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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): JUNE 6, 1997
PHYSICIANS CLINICAL LABORATORY, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 0-20678 68-0280528
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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3301 C STREET, SUITE 100E, SACRAMENTO, CA 95816
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (916) 444-3500
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 3. Bankruptcy or Receivership.
Physicians Clinical Laboratory Inc., a Delaware corporation
("PCL"), and its subsidiaries, Quantum Clinical Laboratories, Inc., Regional
Reference Laboratory Governing Corporation, Diagnostic Laboratories, Inc. and
California Regional Reference Laboratory (collectively with PCL, the "Debtors")
are debtors in possession in Case Number SV96- 23185-GM (Jointly Administered)
(the "Bankruptcy Cases") in the United States Bankruptcy Court for the Central
District of California, San Fernando Valley Division (the "Bankruptcy Court").
On April 23, 1997 (the "Confirmation Date"), the Bankruptcy Court entered an
order entitled "Findings of Fact, Conclusions of Law and Order Confirming Second
Amended Plan of Reorganization of Physicians Clinical Laboratory, Inc. and Its
Affiliated Debtors" (the "Confirmation Order"), confirming the Second Amended
Joint Plan of Reorganization of Physicians Clinical Laboratory, Inc. and Its
Affiliated Debtors (the "Plan"), filed with the Bankruptcy Court by the Debtors
and their senior secured debt holders (the "Proponents") on February 7, 1997.
The Plan, attached hereto as Exhibit 2.1 and incorporated herein by this
reference, is jointly proposed by the Proponents. The Confirmation Order is
attached hereto as Exhibit 2.2 and incorporated herein by this reference. For
purposes of this Report, unless otherwise referenced, the defined term "Company"
shall apply to PCL and its consolidated group of subsidiaries. Capitalized terms
used but not defined herein shall have the meanings ascribed to them in the
Plan.
The Plan provides for the substantive consolidation of the
Bankruptcy Cases into a single chapter 11 case for purposes of the Plan and the
distribution provisions thereunder. Accordingly, on the Confirmation Date, (1)
all intercompany claims by and among the Debtors were deemed eliminated, (2) all
assets and liabilities of the Debtors were merged or treated as though they were
merged, (3) any obligations of any Debtor and all guaranties thereof executed by
one or more of the Debtors were deemed to be one obligation of the reorganized
Company, (4) any claims filed or to be filed in connection with any such
obligation and guaranties were deemed one claim against the reorganized Company,
(5) each claim filed in the Bankruptcy Case of any Debtor was deemed filed
against the reorganized Company in the consolidated Bankruptcy Case, and (6) all
transfers, disbursements and distributions made by any Debtor were deemed to be
made by all of the Debtors.
The material provisions of the Plan are as follows:
Implementation of the Plan
The Plan contemplates that, prior to the effective date of the
Plan (the "Effective Date"), all of the Debtors will be merged with and into
PCL. The Plan provides for the substantive consolidation of the estates, so that
the assets and liabilities of the Debtors are treated as if the assets were held
by, and the liabilities incurred by, a single entity. On the Effective Date, the
Company will amend and restate its Certificate of Incorporation in the State of
Delaware ("Reorganized PCL"), and will continue to exist after the Effective
Date with all of the powers of a corporation under the Delaware General
Corporation Law and without prejudice to any right to alter or terminate its
existence. Substantially all of the assets of the Debtors will vest in
Reorganized PCL. The Certificate of Incorporation of
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Reorganized PCL will authorize the issuance of 50,000,000 shares of common
stock, par value $0.01 per share (the "New Common Stock"). The Plan provides
that, on the Effective Date, Reorganized PCL will issue, inter alia, (i)
approximately 2,500,000 shares of New Common Stock, (ii) senior secured notes,
in the principal amount of $55,000,000, and (iii) warrants, exercisable within
five years of the Effective Date, to purchase 5% of the shares of New Common
Stock to be issued and outstanding on the Effective Date, at an exercise price
of $13.30 per share. On the Effective Date, the Debtors will assign to
Reorganized PCL all of the Debtors' executory contracts and leases assumed
during the Bankruptcy Case and pursuant to the Plan.
Distributions Under the Plan
The Plan classifies the following classes of claims and
interests: Class 1, consisting of Priority Claims; Class 2, consisting of Senior
Debt Claims; Class 3, consisting of Nu-Tech Senior Debt Claims; Class 4,
consisting of Other Secured Claims; Class 5, consisting of Unsecured Claims;
Class 6, consisting of Old Subordinated Debenture Claims; Class 7, consisting of
Interests of holders of Old Common Stock in PCL; Class 8, consisting of
Interests of holders of Interests in Subsidiaries; and Class 9, consisting of
Interests of holders of Old Stock Options and Old Warrants.
The Company's prepetition secured bank debt is held by Nu-Tech
Bio-Med, Inc. ("Nu-Tech") in conjunction with the Company's senior lenders,
Oaktree Capital Management, LLC, The Copernicus Fund, L.P., DDJ Overseas Corp.,
Belmont Fund, L.P., Belmont Capital Partners, II, L.P. and Cerberus Partners,
L.P. (collectively, the "Senior Lenders"). The Other Secured Claims consist of
claims for which creditors hold property of the Company's estate as collateral
for their claims. The Company's Unsecured Claims consist generally of trade
claims, litigation claims and other general unsecured claims including, for
example, patient refund claims. The Company's other major creditors are the
holders of its $40 million 7.5% Convertible Subordinated Debentures due 2000
(the "Debentures") and Sutter Health, one of the Company's largest shareholders,
as the holder of an Old Warrant to purchase shares of the Company's common
stock, issued by the Company in exchange for Sutter Health's provision of a
guarantee in the amount of $3.5 million of the Company's borrowings under its
prepetition credit agreement.
On the Effective Date, the Company will satisfy its
obligations to its impaired creditors as follows: (A) Nu-Tech will receive
890,000 shares of New Common Stock, which constitutes 35.6% of the amount of New
Common Stock to be issued and outstanding on the Effective Date, in exchange for
approximately $13.0 million in senior secured debt (which debt it purchased from
the Senior Lenders just prior to the Petition Date), constituting an estimated
percentage recovery of 79.58% of its allowed claims; Nu-Tech will also receive
an additional 17% of the amount of New Common Stock to be issued and outstanding
on the Effective Date in exchange for Nu-Tech's cancellation of a note executed
by the Company in the principal amount of $5.0 million (the "Nu-Tech Stock
Purchase") (which note comprised part of the purchase price paid by the Company
to Nu-Tech in connection with its acquisition from Nu-Tech of another clinical
laboratory company, Medical Science Institute, Inc.; (B) the Senior Lenders,
which presently hold an aggregate of approximately $80.0 million of secured
debt, will each receive a pro rata share of $55.0 million in new senior secured
notes and 952,500 shares of New
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Common Stock, which constitutes 38.1% of the amount of New Common Stock to be
issued and outstanding on the Effective Date, constituting an estimated
percentage recovery of 84.37% of their aggregate allowed claims; (C) the holders
of the Debentures will each receive a pro rata share of 232,500 shares of New
Common Stock, which constitutes 9.3% of the amount of New Common Stock to be
issued and outstanding on the Effective Date, constituting an estimated
percentage recovery of 5.9% of their aggregate allowed claims; (D) the Company's
shareholders will receive warrants to purchase 5% of the New Common Stock for a
period of up to five years, at a purchase price of $13.30 per share, which price
is based upon an implied enterprise value for the Company of $90.0 million, and
(E) each of the Company's general unsecured creditors will receive a pro rata
share of $2.45 million in cash and an unsecured note in the principal amount of
$400,000, constituting an estimated percentage recovery of 16.29% of their
aggregate allowed claims. The holders of Old Stock Options and Old Warrants will
not receive any distributions or property under the Plan.
As required by the Bankruptcy Code, the Plan provides that
each holder of a Priority Claim will receive cash equal to the amount of such
claim, unless the holder of such claim and Reorganized PCL agree to a different
treatment.
Allowed Administrative Claims representing obligations
incurred in the ordinary course of business or otherwise assumed by a Debtor
pursuant to the Plan (including Administrative Claims of governmental units for
taxes) will be assumed on the Effective Date and paid, satisfied or settled by
Reorganized PCL when due in accordance with the terms and conditions of the
particular agreements giving rise to such obligations. Each holder of a Priority
Tax Claim will receive, in full satisfaction of such claim, deferred cash
payments over a period not exceeding six years from the date of assessment of
such claim.
The effectiveness of the Plan is subject to certain conditions
set forth in the Plan including, but not limited to, the execution of a
shareholders agreement between Nu-Tech and certain of the Senior Lenders and
the consummation of the Nu-Tech Stock Purchase by Nu-Tech and the Reorganized
Company.
The above summary of the material features of the Plan does
not purport to be a complete description of the Plan and is qualified in its
entirety by reference to the Plan attached hereto as Exhibit 2.1. All
capitalized terms not defined herein shall have the meanings assigned to them in
the Plan.
The number of shares of the registrant's common stock, par
value $0.01 per share, issued and outstanding is 6,071,419.
As described above, no shares of the registrant will be issued
in respect of claims and interests filed and allowed under the Plan. Instead,
shares of the New Common Stock will be issued as described above in respect of
claims and interests filed and allowed under the Plan.
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The assets and liabilities of the Company for the period ended
November 30, 1996 are incorporated by reference to the registrant's Form 10-Q
for the quarterly period ended November 30, 1996 which were filed with the
Securities Exchange Commission on June 6, 1997.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
2.1 Second Amended Joint Plan of Reorganization of Physicians
Clinical Laboratory and its Affiliated Debtors filed with the
Bankruptcy Court on February 7, 1997 (without exhibits).
2.2 Findings of Fact, Conclusions of Law and Order Confirming Second
Amended Plan of Reorganization of Physicians Clinical
Laboratory, Inc. and Its Affiliated Debtors, dated April 23,
1997.
99 Text of the Company's press release dated April 21, 1997
relating to the confirmation of the Company's Plan of
Reorganization
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PHYSICIANS CLINICAL LABORATORY, INC.
By: /s/ J. MARVIN FEIGENBAUM
----------------------------
J. Marvin Feigenbaum
Chief Operating Officer
Dated: June 6, 1997
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EXHIBIT INDEX
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Exhibit Page
Number Description of Document Number
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2.1 Second Amended Joint Plan of Reorganization of Physicians
Clinical Laboratory and its Affiliated Debtors filed with the
Bankruptcy Court on February 7, 1997 (without exhibits).
2.2 Findings of Fact, Conclusions of Law and Order Confirming
Second Amended Plan of Reorganization of Physicians Clinical
Laboratory, Inc. and Its Affiliated Debtors, dated April 23,
1997.
99 Text of the Company's press release dated April 21, 1997
relating to the confirmation of the Company's Plan of
Reorganization
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7
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EXHIBIT 2.1
David S. Kurtz, Esq.
Timothy R. Pohl, Esq.
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Telecopier: (312) 782-8585
Attorneys for Debtors and
Debtors in Possession
David C.L. Frauman, Esq. (State Bar No. 11140)
Eric Reimer, Esq. (State Bar No. 130789)
MILBANK, TWEED, HADLEY & McCLOY
601 South Figueroa Street, 30th Floor
Los Angeles, California 90017
Telephone: (213) 892-4000
Telecopier: (213) 629-5063
Attorneys for the Senior Lenders
Richard M. Pachulski, Esq. (State Bar No. 90073)
Jeremy V. Richards, Esq. (State Bar No. 102300)
PACHULSKI, STANG, ZIEHL & YOUNG P.C.
10100 Santa Monica Boulevard, Suite 1100
Los Angeles, California 90067
Telephone: (310) 277-6910
Telecopier: (310) 201-0760
Attorneys for Nu-Tech Bio-Med, Inc.
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
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In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
)
Debtors. ) SECOND AMENDED JOINT PLAN OF REORGANIZATION OF
) PHYSICIANS CLINICAL LABORATORY, INC. AND ITS
) AFFILIATED DEBTORS
)
)
)
)
______________________________ )
)
)
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INTRODUCTION
Physicians Clinical Laboratory, Inc., a Delaware corporation, Quantum
Clinical Laboratories, Inc., a California corporation, Regional Reference
Laboratory Governing Corporation, a California corporation, Diagnostic
Laboratories, Inc., a California corporation, and California Regional Reference
Laboratory, a California partnership (collectively, the "Debtors"), the Senior
Lenders (as defined herein) and Nu-Tech (as defined herein) (the Debtors, the
Senior Lenders and Nu-Tech shall be referred to herein collectively as the
"Proponents") propose the following joint plan of reorganization for the
satisfaction of the Debtors' outstanding creditor claims and equity interests.
Reference is made to the Debtors' disclosure statement, distributed
contemporaneously with the Plan (the "Disclosure Statement"), for a discussion
of the Debtors' history, businesses, properties, results of operations and
projections for future operations, and for a summary and analysis of the Plan
and certain related matters. The Plan, and the distributions made under it,
are premised upon the substantive consolidation of the chapter 11 cases of the
Debtors for purposes of the Plan and the distribution provisions thereof, as
provided under Section 9.1 below.
ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS ARE
ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY
BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. SUBJECT TO CERTAIN RESTRICTIONS
AND REQUIREMENTS SET FORTH IN THE PLAN, THE PROPONENTS RESERVE THE RIGHT TO
ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THE PLAN PRIOR TO ITS CONSUMMATION.
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ARTICLE I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
1.1 DEFINED TERMS
As used in the Plan, capitalized terms and phrases have the meanings
set forth below. Any term used in the Plan that is not defined herein, but
that is used in the Bankruptcy Code or the Bankruptcy Rules, shall have the
meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules.
1.1.1 "ADMINISTRATIVE CLAIM" means a Claim for costs and expenses of
administration allowed under sections 503(b), 507(b) or 1114(e)(2) of the
Bankruptcy Code, including: (a) the actual and necessary costs and expenses
incurred after the Petition Date of preserving the Estate and operating the
businesses of the Debtors (such as wages, salaries or commissions for services
and payments for goods or other services); (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of expenses
awarded or allowed under sections 330(a) or 331 of the Bankruptcy Code; and (c)
all fees and charges assessed against the Estates under chapter 123 of title
28, United States Code, 28 U.S.C. Section Section 1911-1930. Administrative
Claims shall not include any Claims relating to the DIP Financing Facility.
1.1.2 "AFFILIATE" means PCL or any corporation, limited liability
company or partnership in which PCL directly or indirectly owns 50% or more of
the equity interest of such entity.
1.1.3 "AGENT" means OCM Administrative Services, LLC.
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1.1.4 "ALLOWED CLAIM" means:
1.1.4.1 a Claim that has been listed by a Debtor in its
Schedules as other than disputed, contingent or unliquidated and as to
which a Debtor has not timely Filed an objection thereto;
1.1.4.2 a Claim that either is not a Disputed Claim or has
been allowed by a Final Order if a proof of Claim has been filed by
the Bar Date or has otherwise been deemed timely Filed under
applicable law;
1.1.4.3 a Claim that is allowed: (i) in any Stipulation of
Amount and Nature of Claim executed prior to the Confirmation Date and
approved by the Bankruptcy Court; (ii) in any Stipulation of Amount
and Nature of Claim executed on or after the Confirmation Date; or
(iii) in any contract, instrument, indenture or other agreement or
document entered into in connection with the Plan;
1.1.5 "ALLOWED . . . CLAIM" means an Allowed Claim in the particular
Class(es) or categories described.
1.1.6 "ALLOWED INTEREST" means an Interest: (a) that is registered
as of the Distribution Record Date in a stock register that is maintained by or
on behalf of a Debtor and (b) either (i) is not a Disputed Interest or (ii) has
been allowed by a Final Order.
1.1.7 "BALLOTS" means the ballots accompanying the Disclosure
Statement upon which holders of Impaired Claims or Impaired Interests entitled
to vote on the Plan shall indicate their acceptance or rejection of the Plan in
accordance with the Voting Instructions.
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1.1.8 "BANKRUPTCY CODE" means title 11 of the United States Code, as
now in effect or hereafter amended.
1.1.9 "BANKRUPTCY COURT" means the United States District Court
having jurisdiction over the Chapter 11 Cases and, to the extent of any
reference made pursuant to 28 U.S.C. Section 157, the bankruptcy unit of the
District Court.
1.1.10 "BANKRUPTCY RULES" means, collectively, the Federal Rules of
Bankruptcy Procedure and the general and local rules of the Bankruptcy Court,
as now in effect or hereafter amended.
1.1.11 "BAR DATE" means the bar date for Filing proofs of Claim
established by an order of the Bankruptcy Court.
1.1.12 "BUSINESS DAY" means any day, other than a Saturday, Sunday or
"legal holiday" (as defined in Bankruptcy Rule 9006(a)).
1.1.13 "CRRL" means California Regional Reference Laboratory, a
California limited partnership.
1.1.14 "CAPITAL STOCK" means, collectively, the Old Common Stock of
each Debtor, the Old Stock Options and the Old Warrants.
1.1.15 "CASH" means cash and cash equivalents.
1.1.16 "CHAPTER 11 CASES" means, collectively, the cases commenced
under chapter 11 of the Bankruptcy Code by the Debtors.
1.1.17 "CLAIM" means a claim (as defined in section 101(5) of the
Bankruptcy Code) against any Debtor.
1.1.18 "CLASS" means a class of Claims or Interests, as described in
Article III below.
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1.1.19 "CLASS 5 DISBURSEMENT ACCOUNT" means the account of the
Third-Party Disbursing Agent established for the benefit of holders of Claims
in Class 5, into which the Cash and New Unsecured Note to be distributed to
holders of Allowed Claims in Class 5, pursuant to Section 3.2.5 below, shall be
deposited, if the Voting Condition is satisfied.
1.1.20 "CONFIRMATION" means the entry of the Confirmation Order.
1.1.21 "CONFIRMATION DATE" means the date on which the Bankruptcy
Court enters the Confirmation Order on its docket, within the meaning of
Bankruptcy Rules 5003 and 9021.
1.1.22 "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
1.1.23 "DEBTORS" means, collectively, PCL, QCL, DLI, RRLGC and CRRL.
1.1.24 "DIP FINANCING FACILITY" means the postpetition credit
facility extended to the Debtors under section 364 of the Bankruptcy Code.
1.1.25 "DISBURSING AGENT" means Reorganized PCL, in its capacity as
Disbursing Agent, or any Third-Party Disbursing Agent.
1.1.26 "DISCLOSURE STATEMENT" means the Disclosure Statement of even
date herewith, as amended, modified or supplemented (and all exhibits or
schedules annexed thereto or referenced therein), which relates to the Plan,
and which shall be prepared and distributed in accordance with sections 1125
and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018.
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1.1.27 "DISPUTED CLAIM" means, for the purpose of receiving
distributions pursuant to the Plan:
1.1.27.1 a Claim as to which, if no proof of Claim has
been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law and such Claim has been scheduled by a Debtor in
its schedule of liabilities as other than disputed, contingent or
unliquidated, the applicable Debtor has Filed an objection by the
Effective Date; or
1.1.27.2 a Claim as to which, if a proof of Claim has
been Filed by the Bar Date or has otherwise been deemed timely Filed
under applicable law, an objection has been timely Filed by the
applicable Debtor or any other party in interest and such objection
has not been withdrawn on or before any date fixed by the Plan or
order of the Bankruptcy Court for Filing such objections and such
objection has not been denied by a Final Order. For the purpose of
receiving distributions pursuant to the Plan, a Claim or Claims
asserted in a proof of Claim shall be considered a Disputed Claim in
its entirety if an objection is timely Filed to any portion of such
Claim or Claims.
1.1.28 "DISPUTED INTEREST" means any Interest as to which a Debtor
has listed in its Schedules as disputed, interposed a timely objection or
request for estimation in accordance with the Bankruptcy Code and the
Bankruptcy Rules or any Interest otherwise disputed by a Debtor in accordance
with applicable law, which objection, request for estimation or dispute has not
been withdrawn or determined by a Final Order.
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1.1.29 "DISTRIBUTION DATE" means the last Business Day of the
calendar quarter ending not less than 30 days following the Effective Date and
the last Business Day of each calendar quarter thereafter, through and
including the Final Distribution Date.
1.1.30 "DISTRIBUTION RECORD DATE" means the close of business on the
Business Day immediately preceding the Effective Date.
1.1.31 "DLI" means Diagnostic Laboratories, Inc., a California
corporation.
1.1.32 "DOCUMENT REVIEWING CENTERS" means (a) In-House Management
Services Company, 10351 Santa Monica Boulevard, Unit #101A, West Los Angeles,
California 90025, (b) Jones, Day, Reavis & Pogue, 555 West Fifth Street, Suite
4600, Los Angeles, California 90013-1025, (c) Andrews & Kurth, 601 South
Figueroa Street, Suite 4200, Los Angeles, California 90017 and (d) PCL, 2495
Natomas Park Drive, Suite 600, Sacramento, California 95833.
1.1.33 "EFFECTIVE DATE" means a Business Day, as determined by the
Debtors, that is as soon as reasonably practicable but that is at least 11 days
after the Confirmation Date and on which: (a) no stay of the Confirmation
Order is in effect and (b) all conditions to the Effective Date set forth in
Section 9.2 below have been satisfied or waived (if available) pursuant to
Section 9.3 below.
1.1.34 "EMPLOYMENT AGREEMENT" means the Employment Agreement to be
entered into as of the Effective Date between Reorganized PCL and J. Marvin
Feigenbaum, pursuant to which J. Marvin Feigenbaum shall be employed by
Reorganized PCL as chief executive officer.
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1.1.35 "ESTATE" means, collectively, the estate created for each
Debtor in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
1.1.36 "EXCHANGE ACT" means the Exchange Act of 1934, as amended.
1.1.37 "EXISTING LENDER AGREEMENTS" means, collectively, the original
credit agreements, guaranties, letters of credit, reimbursement agreements and
other documents executed and/or agreements entered into by each Debtor relating
to the Senior Debt Claims, including, but not limited to, those agreements
listed in Exhibit E hereto.
1.1.38 "FILE," "FILED" OR "FILING" means file, filed or filing with
the Bankruptcy Court in the Chapter 11 Cases.
1.1.39 "FINAL DISTRIBUTION DATE" means the date the Disbursing Agent
makes a final distribution to holders of Allowed Claims and Interests as
provided in Articles VII and VIII below, which shall be a Business Day as soon
as practicable after the later of (a) the date all Disputed Claims have been
resolved by Final Order and (b) one year after the Effective Date.
1.1.40 "FINAL ORDER" means an order or judgment of the Bankruptcy
Court, or other court of competent jurisdiction, as entered on the docket in
any Chapter 11 Case, which has not been reversed, stayed, modified or amended,
and as to which the time to appeal or seek certiorari has expired, and no
appeal or petition for certiorari has been timely taken, or as to which any
appeal that has been or may be taken or any petition for certiorari that has
been or may be filed has been dismissed or
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resolved by the highest court to which the order or judgment was appealed or
from which certiorari was sought.
1.1.41 "HEADLEY CLAIMS" means the Unsecured Claims of Mr. Nathan L.
Headley against any of the Debtors, if any, including without limitation Claims
arising from the rejection of any and all employment contracts or agreements
between Mr. Nathan L. Headley and any of the Debtors authorized by a Final
Order to be treated as an Allowed Claim, in an amount not exceeding $390,000.
1.1.42 "IMPAIRED . . ." means, when used with reference to a Claim or
Interest, a Claim or Interest that is impaired within the meaning of section
1124 of the Bankruptcy Code.
1.1.43 "INDENTURE TRUSTEE" means U.S. Trust of California, N.A., as
Trustee under the Old Indenture.
1.1.44 "INTERCOMPANY CLAIM" means, collectively, (a) any account
reflecting intercompany book entries by one Debtor with respect to any other
Debtor and (b) any Claim not reflected in such book entries that is held by a
Debtor against any other Debtor.
1.1.45 "INTEREST" means, collectively, the rights of holders of
Capital Stock and Old Common Stock of the Subsidiaries, including redemption
rights, dividend rights and liquidation preferences.
1.1.46 "MASTER BALLOTS" means the master ballots accompanying the
Disclosure Statement upon which the acceptance or rejection of the Plan by
holders of Impaired Claims and Interests shall be indicated in accordance with
the Voting Instructions.
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1.1.47 "MSI" means Medical Science Institute, d/b/a MSI Laboratories,
a California corporation.
1.1.48 "MSI ACQUISITION" means the acquisition by PCL of 100% of the
stock of MSI from Nu-Tech, as approved by order of the Bankruptcy Court on
January 29, 1997.
1.1.49 "MSI ACQUISITION NOTE" means that certain promissory note to
be issued by PCL in favor of Nu-Tech in the original principal amount of
$5,000,000, as part of the purchase price for the MSI Acquisition.
1.1.50 "NEW COMMON STOCK" means 2,500,000 shares of Common Stock of
Reorganized PCL, which shares constitute 100% of such common stock to be issued
and outstanding immediately after the Effective Date, which shares shall be
authorized, fully prepaid and nonassessable, pursuant to the New PCL
Certificate of Incorporation.
1.1.51 "NEW COMMON STOCK REGISTRATION RIGHTS AGREEMENT" means that
certain agreement to be entered into on the Effective Date by Reorganized PCL
and the Senior Lenders, which shall be substantially in the form set forth in
Exhibit F(2).
1.1.52 "NEW COMPENSATION PLANS" means collectively, the employment,
retirement, indemnification and other agreements, and the welfare benefits and
other incentive plans to be entered into or implemented by Reorganized PCL as
of the Effective Date, summaries of which are set forth in Exhibit J.
1.1.53 "NEW CREDIT FACILITY" means the lending facility to be
provided to Reorganized PCL, if in Reorganized PCL's business judgment such
facility should be entered into, on or after the Effective Date, in an amount
up to $10 million to be
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secured solely by accounts receivable and the proceeds thereof of Reorganized
PCL, pursuant to the terms and conditions of the New Credit Facility Agreement.
1.1.54 "NEW CREDIT FACILITY AGREEMENT" means the agreement to be
entered into on or after the Effective Date by and among Reorganized PCL and
the lender(s) that are signatories thereto, pursuant to which such lender will
provide Reorganized PCL with the New Credit Facility.
1.1.55 "NEW CREDIT FACILITY DOCUMENTS" means the New Credit Facility
Agreement and all documents executed in connection therewith.
1.1.56 "NEW INDENTURE" means, collectively, the indenture between
Reorganized PCL and the trustee named therein, substantially in the form of
Exhibit H, and all related collateral, pledge, security or other similar
agreements, which indenture and other agreements relate to the New Senior
Notes.
1.1.57 "NEW INTERCREDITOR AGREEMENT" means an intercreditor
agreement, in form and substance satisfactory to the Senior Lenders, to be
entered into by the holders of the New Senior Notes, the trustee under the New
Indenture, Reorganized PCL and the lender(s) under the New Credit Facility
setting forth their respective rights in and to the collateral of Reorganized
PCL and providing, inter alia, that the lender(s) under the New Credit Facility
shall have a first priority lien on the accounts receivable of Reorganized PCL
and the trustee under the New Indenture shall have a first priority lien on
substantially all of the other assets of Reorganized PCL and a second priority
lien on the accounts receivable of Reorganized PCL.
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1.1.58 "NEW PCL CERTIFICATE OF INCORPORATION" means the Amended and
Restated Certificate of Incorporation of Reorganized PCL, which shall be in
substantially the form set forth in Exhibit A.
1.1.59 "NEW PCL BYLAWS" means the Amended and Restated Bylaws of
Reorganized PCL, which shall be substantially in the form set forth in Exhibit
B.
1.1.60 "NEW REGISTRATION RIGHTS AGREEMENTS" means, collectively, (a)
the New Common Stock Registration Rights Agreement and (b) the New Senior Notes
Registration Rights Agreement.
1.1.61 "NEW SECURITIES" means, collectively, the (a) New Common
Stock, (b) New Warrants, (c) New Senior Notes and (d) New Unsecured Note.
1.1.62 "NEW SENIOR NOTES" means the Senior Secured 10% Notes Due
2004, to be issued by Reorganized PCL, pursuant to the New Indenture,
substantially in the form provided therein.
1.1.63 "NEW SENIOR NOTES REGISTRATION RIGHTS AGREEMENT" means that
certain agreement to be entered into on the Effective Date by Reorganized PCL
and the recipients of New Senior Notes, which shall be in substantially the
form set forth in Exhibit F(1).
1.1.64 "NEW UNSECURED NOTE" means the Unsecured Promissory Note Due
1998, to be issued by Reorganized PCL on the Effective Date, payable to the
Third-Party Disbursing Agent for the Class 5 Disbursement Account, in the
original principal amount of $400,000.
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1.1.65 "NEW WARRANT AGREEMENT" means the Warrant Agreement, in
substantially the form set forth in Exhibit G, providing for the issuance of
New Warrants to purchase 131,579 shares of New Common Stock, which constitutes
5% of the aggregate amount of shares of New Common Stock to be issued and
outstanding immediately after the Effective Date, on a fully diluted basis.
1.1.66 "NEW WARRANTS" means the warrants, each to purchase one share
of New Common Stock, to be issued by Reorganized PCL pursuant to the New
Warrant Agreement, which warrants shall be issued to holders of Allowed Class 7
Interests pursuant to Section 3.2.7 of the Plan, and which warrants each shall
(a) enable the holder thereof to purchase one share of New Common Stock for
$13.30 and (b) expire on the date occurring five years after the Effective
Date.
1.1.67 "NU-TECH" means Nu-Tech Bio-Med, Inc., a Delaware corporation.
1.1.68 "NU-TECH SENIOR DEBT CLAIM" means, collectively, all Claims of
Nu-Tech under the Existing Lender Agreements.
1.1.69 "NU-TECH STOCK PURCHASE" means the purchase by Nu-Tech on the
Effective Date of 425,000 shares of New Common Stock, which constitutes 17% of
the aggregate amount of New Common Stock to be issued and outstanding on the
Effective Date, in consideration for forgiveness of all amounts payable under
the MSI Acquisition Note.
1.1.70 "OFFICIAL COMMITTEE" means either the Official Committee of
Unsecured Creditors of the Debtors appointed pursuant to section 1102 of the
Bankruptcy Code or, after the
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Effective Date, the committee formed pursuant to Section 8.4.1 below.
1.1.71 "OLD COMMON STOCK OF . . ." means, when used with reference to
a particular Debtor, the common stock issued by such Debtor and outstanding
immediately prior to the Effective Date and, with respect to CRRL, the
partnership interests of RRLCC and PCL. When used without reference to a
particular Debtor, "Old Common Stock" means the common stock issued by PCL and
outstanding immediately prior to the Effective Date.
1.1.72 "OLD INDENTURE" means, collectively, that certain Indenture
dated as of August 24, 1993 by and among PCL, Donaldson, Lufkin & Jenrette
Securities Corporation and Smith Barney Shearson, Inc., and all related
agreements, which indenture and other agreements relate to the Old Subordinated
Debentures.
1.1.73 "OLD STOCK OPTIONS" means the options, outstanding immediately
prior to the Petition Date, to purchase Old Common Stock.
1.1.74 "OLD SUBORDINATED DEBENTURE CLAIMS" means, collectively, all
Claims of holders of Old Subordinated Debentures relating to the Old
Subordinated Debentures.
1.1.75 "OLD SUBORDINATED DEBENTURES" means the 7.5% Convertible
Subordinated Debentures Due 2000 issued by PCL pursuant to the Old Indenture.
1.1.76 "OLD WARRANTS" means the warrants, outstanding immediately
prior to the Petition Date, to purchase Old Common Stock.
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1.1.77 "OTHER SECURED CLAIMS" means, collectively, all Secured Claims
against a Debtor held by any entity, other than the Secured Claims of the
Senior Lenders and Nu-Tech and other than the DIP Financing Facility Claims.
1.1.78 "PCL" means Physicians Clinical Laboratory, a Delaware
corporation.
1.1.79 "PCL/SUBSIDIARY DEBTOR MERGER" means the merger of each
Subsidiary Debtor and MSI into PCL, as provided in Section 5.1.2 below,
pursuant to the PCL/Subsidiary Debtor Merger Agreement.
1.1.80 "PCL/SUBSIDIARY DEBTOR MERGER AGREEMENT" means the agreement
to be entered into on the Effective Date by PCL and each Subsidiary Debtor and
MSI, in substantially the form of Exhibit C, providing for the merger of each
Subsidiary Debtor and MSI into PCL.
1.1.81 "PETITION DATE" means November 8, 1996.
1.1.82 "PLAN" means this joint chapter 11 plan of reorganization of
Physicians Clinical Laboratory, Inc. and its Affiliated Debtors and all
Exhibits annexed hereto or referenced herein, as the same may be amended,
modified or supplemented.
1.1.83 "PRIORITY CLAIM" means a Claim that is entitled to priority in
payment pursuant to section 507(a) of the Bankruptcy Code and that is not an
Administrative Claim or a Priority Tax Claim.
1.1.84 "PRIORITY TAX CLAIM" means a Claim of a governmental unit that
is entitled to priority in payment pursuant to section 507(a)(8) of the
Bankruptcy Code.
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1.1.85 "PRO RATA" means:
1.1.85.1 so that with respect to an Allowed Senior
Lender Claim, the ratio of (i)(a) the number of shares of New Common
Stock or New Senior Notes to be distributed on account of a particular
Allowed Senior Lender Claim to (b) the amount of such Allowed Senior
Lender Claim, is the same as the ratio of (ii)(a) the number of shares
of New Common Stock or New Senior Notes to be distributed on account
of all Allowed Senior Lender Claims to (b) the amount of all Allowed
Senior Lender Claims;
1.1.85.2 so that with respect to an Allowed Old
Subordinated Debenture Claim, the ratio of (i) (a) the number of
shares of New Common Stock to be distributed on account of a
particular Allowed Old Subordinated Debenture Claim to (b) the amount
of such Allowed Old Subordinated Debenture Claim, is the same as the
ratio of (ii) (a) the number of shares of New Common Stock to be
distributed on account of all Allowed Old Subordinated Debenture
Claims to (b) the amount of all Allowed Old Subordinated Debenture
Claims;
1.1.85.3 so that with respect to an Allowed Class 5
Claim, the ratio of (i) (a) Cash and proceeds of the New Unsecured
Note to be distributed on account of a particular Allowed Class 5
Claim to (b) the amount of such Allowed Class 5 Claim is the same as
the ratio of (ii) (a) the aggregate Cash and proceeds of the New
Unsecured Note to be distributed on account of all Allowed Class 5
Claims, net of fees, costs and expenses to be paid out of the funds in
the
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Class 5 Disbursement Account pursuant to Sections 8.1.2 and 8.3 below
to (b) the amount of all Allowed Class 5 Claims;
1.1.85.4 so that with respect to an Allowed Interest
consisting of Old Common Stock of PCL, the ratio of (i) (a) the number
of New Warrants to be distributed on account of a particular Allowed
Interest to (b) the amount of such Allowed Interest, is the same as
the ratio of (ii) (a) the number of New Warrants to be distributed on
account of all Allowed Interests consisting of Old Common Stock of PCL
to (b) the amount of all such Allowed Interests; and
1.1.85.5 when used with reference to distributions of
the Reorganization Investment Yield, the ratio, as of the date upon
which the distribution of the Reorganization Investment Yield is made,
of (i) (a) the portion of the Reorganization Investment Yield to be
distributed to the Holder of an Allowed Claim pursuant to Articles VII
and VIII of the Plan to (b) the aggregate amount of the Reorganization
Investment Yield is the same as the ratio of (ii) (a) the Allowed
Amount of such Claim to (b) the sum of the aggregate amount of the
Claims which are Disputed and the aggregate amount of Claim on account
of which distributions are undeliverable.
1.1.86 "PROFESSIONAL" means any professional employed in the Chapter
11 Cases pursuant to sections 327 or 1103 of the Bankruptcy Code and the
professionals seeking compensation or reimbursement of expenses in connection
with the Chapter 11 Cases pursuant to section 503(b)(4) of the Bankruptcy Code.
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1.1.87 "PROVIDER AGREEMENTS" means any and all health care provider
agreements between the Debtors, on the one hand, and Federal and State
governments or third parties, or their respective agencies or agents, on the
other hand.
1.1.88 "QCL" means Quantum Clinical Laboratories, Inc., a California
corporation.
1.1.89 "RRLGC" means Regional Reference Laboratory Governing
Corporation, a California corporation.
1.1.90 "REINSTATED" OR "REINSTATEMENT" means rendering a Claim
unimpaired pursuant to section 1124 of the Bankruptcy Code.
1.1.91 "REORGANIZATION INVESTMENT YIELD" means the net yield earned
by the Disbursing Agent from the investment of Cash held pending distribution
pursuant to the Plan (including dividends and other distributions on
undeliverable New Securities from the date that such distribution would have
first been due had it then been deliverable to the date that such distribution
becomes deliverable), which investment shall be in a manner consistent with
Reorganized PCL's investment and deposit guidelines.
1.1.92 "REORGANIZED PCL" means the corporation that is the surviving
corporation in the PCL/Subsidiary Debtor Merger or, until the PCL/Subsidiary
Debtor Merger is effected, collectively, the Debtors on and after the Effective
Date.
1.1.93 "SCHEDULES" means, collectively, the: (a) schedules of assets
and liabilities and the statements of financial affairs, if any, Filed by the
Debtors in the Chapter 11 Cases, pursuant to section 521 of the Bankruptcy
Code, the Bankruptcy Rules and the Official Bankruptcy Forms; and
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(b) schedule of unliquidated, disputed or contingent Claims, as required by any
Local Rule of the Bankruptcy Court, as such requirements may be modified by any
order of the Bankruptcy Court.
1.1.94 "SECURED CLAIM" means a Claim that is secured by a lien on
property in which the Estate has an interest or that is subject to setoff under
section 553 of the Bankruptcy Code, to the extent of the value of the Claim
holder's interest in the Estate's interest in such property or to the extent of
the amount subject to setoff, as applicable, as determined pursuant to section
506(a) of the Bankruptcy Code.
1.1.95 "SECURITIES ACT" means the Securities Act of 1933, 15 U.S.C.
Section Section 77a-77aa, as now in effect or hereafter amended.
1.1.96 "SENIOR DEBT CLAIMS" means, collectively, all Claims of the
Senior Lenders under the Existing Lender Agreements.
1.1.97 "SENIOR LENDERS" means, collectively, the Agent and the other
entities listed on Exhibit D and their successors and assigns, excluding
Nu-Tech.
1.1.98 "STIPULATION OF AMOUNT AND NATURE OF CLAIM" means a
stipulation or other document that a Debtor has sent or may send to a holder of
a Claim that states the Debtor's position regarding the amount or nature of the
holder's Claim and requests such holder's agreement with the Debtor's position.
1.1.99 "SUBSIDIARY DEBTORS" means, collectively, DLI, QCL, RRLGC and
CRRL.
1.1.100 "SUBSTANTIVE CONSOLIDATION" means the combining of the
Estates, for purposes of the Plan and the distributions
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therein, by aggregating their assets and liabilities and eliminating
Intercompany Claims, as provided for pursuant to Section 9.1 of the Plan.
1.1.101 "SUTTER" means Sutter General Hospital, Sutter Health, and any
and all affiliates thereof.
1.1.102 "SUTTER CLAIMS" means any and all Claims of Sutter arising out
of payment of the Sutter Guaranty.
1.1.103 "SUTTER GUARANTY" means that certain General Continuing
Guaranty in the amount of $3,500,000 dated as of May 10, 1995, by Sutter for
the benefit of the Senior Lenders and Nu-Tech.
1.1.104 "THIRD-PARTY DISBURSING AGENT" means (a) with respect to the
Disbursing Agent for Class 5, Credit Managers Association of California and (b)
with respect to any other Class, any entity designated by the Debtors or
Reorganized PCL to act as a Disbursing Agent.
1.1.105 "UNIMPAIRED CLAIM" means a Claim that is not impaired within
the meaning of section 1124 of the Bankruptcy Code.
1.1.106 "UNSECURED CLAIM" means any Claim which is not an
Administrative Claim, Priority Claim, Priority Tax Claim, Secured Claim or Old
Subordinated Debenture Claim.
1.1.107 "VOTING CONDITION" means that Class 5 Claims and Class 6
Claims shall have each voted to accept the Plan in accordance with section 1126
of the Bankruptcy Code; provided, however, that for purposes of determining
whether the Voting Condition is satisfied, Class 5 and Class 6 Claims held by
any Proponents shall be deemed to have been voted in favor of the
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Plan, whether or not such Claims are actually voted in favor of the Plan.
1.1.108 "VOTING INSTRUCTIONS" means the instructions for voting on the
Plan contained in the section of the Disclosure Statement entitled "Voting and
Confirmation of the Plan -- Voting Procedures and Requirements" and
accompanying the Ballots and the Master Ballots.
1.1.109 "VOTING RECORD DATE" means February 11, 1997.
1.2 RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW
1.2.1 RULES OF INTERPRETATION
For purposes of the Plan: (a) whenever from the context it is
appropriate, 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, indenture or other agreement or document being
in a particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms and
conditions; (c) any reference in the Plan to an existing document or Exhibit
Filed or to be Filed means such document or Exhibit, as it may have been or may
be amended, modified or supplemented; (d) if the Plan's description of the
terms of an Exhibit is inconsistent with the terms of the Exhibit, the terms of
the Exhibit shall control; (e) unless otherwise specified, all references in
the Plan to Articles, Sections, Clauses and Exhibits are references to
Articles, Sections, Clauses and Exhibits of or to the Plan; (f) the words
"herein" and "hereto" refer to the Plan in its entirety rather
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than to a particular portion of the Plan; (g) captions and headings to Articles
and Sections are inserted for convenience of reference only and are not
intended to be a part of or to affect the interpretation of the Plan; and (h)
the rules of construction set forth in section 102 of the Bankruptcy Code shall
apply, to the extent such rules are not inconsistent with any other provision
in this Section 1.2.1.
1.2.2 COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.
1.2.3 GOVERNING LAW
Except to the extent that the Bankruptcy Code or Bankruptcy Rules are
applicable, and subject to the provisions of any contract, instrument, release,
indenture or other agreement or document entered into in connection with the
Plan, the rights and obligations arising under the Plan shall be governed by,
and construed and enforced in accordance with, the laws of the State of
California, without giving effect to the principles of conflicts of law
thereof.
ARTICLE II.
ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS
In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims, as described below in Article
II, have not been classified.
2.1 ADMINISTRATIVE CLAIMS
2.1.1 IN GENERAL
Subject to the provisions of Sections 2.1.2 and 2.1.3 below
with respect to the Administrative Claims bar date and
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Professionals, respectively, on the Effective Date, each holder of an Allowed
Administrative Claim shall receive Cash equal to the amount of such Allowed
Administrative Claim, unless such holder and the applicable Debtor or
Reorganized PCL agree to other terms or a Final Order of the Bankruptcy Court
provides for other terms; provided, however, that Allowed Administrative Claims
representing obligations incurred in the ordinary course of business or
otherwise assumed by a Debtor pursuant to the Plan (including Administrative
Claims of governmental units for taxes) shall be assumed on the Effective Date
and paid, performed or settled by Reorganized PCL when due in accordance with
the terms and conditions of the particular agreements governing such
obligations, without the need for holders of such Claims to comply with Section
2.1.2 below .
2.1.2 BAR DATE FOR ADMINISTRATIVE CLAIMS
Requests for payment of Administrative Claims must be Filed
and served on the Debtors or Reorganized PCL no later than 30 days after the
Effective Date. Holders of Administrative Claims that are required to File and
serve a request for payment of such Claims and that do not File and serve a
request by such date shall be forever barred from asserting such Claims against
the Debtors, Reorganized PCL or their respective property. Objections to such
requests must be Filed and served on Reorganized PCL and the requesting party
no later than 30 days after the date on which the applicable request for
payment was Filed.
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2.1.3 PROFESSIONALS
Professionals or other entities requesting compensation or
reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) or
1103 of the Bankruptcy Code for services rendered before the Effective Date
(including compensation requested pursuant to section 503(b)(4) of the
Bankruptcy Code by any Professional or other entity for making a substantial
contribution in the Chapter 11 Cases) shall File and serve on Reorganized PCL
and counsel for Reorganized PCL an application for final allowance of
compensation and reimbursement of expenses no later than 30 days after the
Effective Date, unless such Filing and service deadline is extended by the
Bankruptcy Court. Objections to applications of Professionals or other
entities for compensation or reimbursement of expenses must be Filed and served
on Reorganized PCL, counsel for Reorganized PCL and the requesting Professional
or other entity no later than 30 days after the date on which the applicable
application for compensation or reimbursement was Filed.
2.2 PRIORITY TAX CLAIMS
Pursuant to section 1129(a)(9)(C) of the Bankruptcy Code, unless
otherwise agreed by the holder of a Priority Tax Claim and the applicable
Debtor or Reorganized PCL, each holder of a Priority Tax Claim will receive, in
full satisfaction of such Claim, deferred cash payments over a period not
exceeding six years from the date of assessment of such Claim. Payments will
be made in equal quarterly installments of principal, plus simple interest
accruing from the Effective Date at 8% per annum on the unpaid portion of each
Priority Tax Claim (or upon such other
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terms determined by the Bankruptcy Court to provide the holders of Priority Tax
Claims with deferred cash payments having a value as of the Effective Date
equal to such Claims). Unless otherwise agreed by the holder of a Priority Tax
Claim and the applicable Debtor or Reorganized PCL, the first payment will be
payable one year after the Effective Date or, if the Priority Tax Claim is not
allowed within one year after the Effective Date, the first day of the quarter
following the date on which (a) an order allowing such Claim becomes a Final
Order or (b) a Stipulation regarding the Amount and Nature of Claim is executed
by Reorganized PCL and the Claim holder; provided, however, that Reorganized
PCL will have the right to pay any Priority Tax Claim, or any remaining balance
of such Claim, in full, at any time on or after the Effective Date, without
premium or penalty.
2.3 DIP FINANCING FACILITY CLAIMS
Immediately prior to the Effective Date, provided that no unwaived
events of default exist under the DIP Financing Facility, any amounts available
under the DIP Financing Facility shall be borrowed by PCL so that the total
outstanding principal balance thereunder is $9,800,000. On the Effective Date,
any and all amounts owing under the DIP Financing Facility shall be deemed
fully and finally forgiven without any payment by the Debtors or further action
by any party.
2.4 QUARTERLY FEES TO U.S. TRUSTEE
Reorganized PCL shall pay all quarterly fees payable to the U.S.
Trustee's Office for the Debtors and MSI after Confirmation, consistent with
applicable provisions of the Bankruptcy Code and Bankruptcy Rules.
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ARTICLE III.
CLASSIFICATION AND
TREATMENT OF CLASSIFIED
CLAIMS AND INTERESTS
All Claims and Interests, except Administrative Claims and Priority
Tax Claims, are placed in the Classes described below. All such Claims against
each Debtor are classified premised on the Substantive Consolidation of the
Debtors.
A Claim or Interest is classified in a particular Class only to the
extent that the Claim or Interest qualifies within the description of that
Class and is classified in other Classes only to the extent that any remainder
of the Claim or Interest qualifies within the description of such other
Classes. A Claim or Interest is also classified in a particular Class only to
the extent that such Claim or Interest is an Allowed Claim or Allowed Interest
in that Class and has not been paid, released or otherwise satisfied prior to
the Effective Date.
3.1 SUMMARY
<TABLE>
<CAPTION>
Class Status
<S> <C>
Class 1 - Priority Claims Unimpaired - not entitled to vote
Class 2 - Senior Debt Claims Impaired - entitled to vote
Class 3 - Nu-Tech Senior Debt Claims Impaired - entitled to vote
Class 4 - Other Secured Claims Unimpaired - not entitled to vote
Class 5 - Unsecured Claims Impaired - entitled to vote
Class 6 - Old Subordinated Debenture Claims Impaired - entitled to vote
Class 7 - Interests of holders of Old Impaired - entitled to vote
Common Stock in PCL
</TABLE>
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<TABLE>
<CAPTION>
Class Status
<S> <C>
Class 8 - Interests of holders of Interests Unimpaired - not entitled to vote
in Subsidiaries
Class 9 - Interests of holders of Old Stock Impaired - deemed to have rejected the
Options and Old Warrants Plan
</TABLE>
3.2 CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS
3.2.1 CLASS 1 - PRIORITY CLAIMS
Classification: Class 1 consists of all Priority Claims
against the Debtors.
Treatment: On the Effective Date, each holder of an Allowed
Class 1 Claim shall receive Cash equal to the amount of such Claim,
unless the holder of such Claim and Reorganized PCL agree to a
different treatment. Any Allowed Class 1 Claim not due and owing on
the Effective Date will be paid in full in Cash by Reorganized PCL
when such Claim becomes due and owing.
Voting: Class 1 is unimpaired, and the holders of Claims in
Class 1 are not entitled to vote to accept or reject the Plan.
3.2.2 CLASS 2 - SENIOR DEBT CLAIMS
Classification: Class 2 consists of all Senior Debt Claims
against the Debtors.
Treatment: On the Effective Date, the Existing Lender
Agreements shall automatically be terminated without further action by
any party and shall no longer be of any force or effect. Each holder
of an Allowed Senior Debt Claim, in full and final satisfaction of all
of its Allowed Claims, including the forgiveness of the DIP Financing
Facility
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Claims as provided in Section 2.3 above, shall receive, on or as soon
as practicable after the Effective Date, its Pro Rata Share of (i) if
the Voting Condition is satisfied, 952,500 shares of New Common Stock,
which constitutes 38.1% of the amount of New Common Stock to be issued
and outstanding on the Effective Date, or, if the Voting Condition is
not satisfied, 1,225,000 shares of New Common Stock, which constitutes
49% of the amount of New Common Stock to be issued and outstanding on
the Effective Date and (ii) the New Senior Notes.
Voting: Class 2 is impaired and the holders of Allowed Claims
in Class 2 are entitled to vote to accept or reject the Plan.
3.2.3 CLASS 3 - NU-TECH SENIOR DEBT CLAIMS
Classification: Class 3 consists of all Nu-Tech Senior Debt
Claims.
Treatment: On the Effective Date, the Existing Lender
Agreements shall automatically be terminated without further action by
any party and shall no longer be of any force or effect. In full and
final satisfaction of the Allowed Nu-Tech Senior Debt Claims, Nu- Tech
shall receive, on or as soon as practicable after the Effective Date,
(i) if the Voting Condition is satisfied, 890,000 shares of New Common
Stock, which constitutes 35.6% of the amount of New Common Stock to be
issued and outstanding on the Effective Date or (ii) if the Voting
Condition is not satisfied, 850,000 shares of New Common Stock, which
constitutes 34% of the
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amount of New Common Stock to be issued and outstanding on the
Effective Date.
Voting: Class 3 is impaired and the holder of Allowed Class 3
Claims is entitled to vote to accept or reject the Plan.
3.2.4 CLASS 4 - OTHER SECURED CLAIMS
Classification: Class 4 consists of all Other Secured Claims
against the Debtors.
Treatment: On the Effective Date, at the option of
Reorganized PCL, each Allowed Class 4 Claim shall be treated pursuant
to either clause (i) or (ii) below:
(i) Reorganized PCL may transfer the property
securing such Claim to the holder of the Claim, in full
satisfaction of the Claim; or
(ii) such Claim may be Reinstated as follows: (A)
any default, other than a default of a kind specified in
section 365(b)(2) of the Bankruptcy Code, shall be cured; (B)
the maturity of the Claim shall be reinstated as the maturity
existed before any default; (C) the holder of the Claim shall
be compensated for any damages incurred as a result of any
reasonable reliance by the holder on any contractual provision
that entitled the holder to demand or receive accelerated
payment of the Claim; and (D) the other legal, equitable or
contractual rights to which the Claim entitles the holder
shall not otherwise be altered.
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Voting: Class 4 is unimpaired and the holders of Claims in
Class 4 are not entitled to vote to accept or reject the Plan.
3.2.5 CLASS 5 - UNSECURED CLAIMS
Classification: Class 5 consists of all Unsecured Claims
against the Debtors, including the Headley Claims.
Treatment: On the Effective Date, if the Voting Condition is
satisfied, the Debtors will deliver to the Third-Party Disbursing
Agent, to be held in the Class 5 Disbursement Account for the benefit
of holders of Allowed Class 5 Claims, (i) $2.45 million in Cash and
(ii) the New Unsecured Note. If the Voting Condition is satisfied,
then each holder of an Allowed Class 5 Claim, in full and final
satisfaction of such Allowed Claim, shall receive its Pro Rata share
of the assets held in the Class 5 Disbursement Account in accordance
with the provisions of Articles VII and VIII below. If the Voting
Condition is not satisfied, then there shall be no distribution of any
assets into the Class 5 Disbursement Account.
Voting: Class 5 is impaired and the holders of Allowed Class
5 Claims are entitled to vote to accept or reject the Plan.
3.2.6 CLASS 6 - OLD SUBORDINATED DEBENTURE CLAIMS
Classification: Class 6 consists of all Old Subordinated
Debenture Claims against the Debtors.
Treatment: On the Effective Date, the Old Indenture and the
Old Subordinated Debentures shall be automatically terminated without
further action by any party and shall no
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longer be of any force and effect. If the Voting Condition is
satisfied, then each holder of an Allowed Old Subordinated Debenture
Claim, in full and final satisfaction of such Allowed Claim, shall
receive, on or as soon as practicable after the Effective Date, its
Pro Rata share of 232,500 shares of New Common Stock, which
constitutes 9.3% of the amount of New Common Stock to be issued and
outstanding on the Effective Date. If the Voting Condition is not
satisfied, then the holders of Old Subordinated Debenture Claims shall
not receive or retain any property under the Plan on account of such
Claims.
Voting: Class 6 is impaired and the holders of Allowed Claims
in Class 6 are entitled to vote to accept or reject the Plan.
3.2.7 CLASS 7 - INTERESTS OF HOLDERS OF OLD COMMON STOCK IN PCL
Classification: Class 7 consists of the Interests of holders
of Old Common Stock in PCL.
Treatment: If the Voting Condition is satisfied, on or as
soon as is practicable after the Effective Date, each holder of an
Allowed Class 7 Interest shall receive, in full and final satisfaction
of such Interest, its Pro Rata Share of the New Warrants issued
pursuant to the New Warrant Agreement. If the Voting Condition is not
satisfied, then the holders of Class 7 Interests shall not receive or
retain any property under the Plan on account of such Interests.
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Voting: Class 7 is impaired and the holders of Allowed Class
7 Interests are entitled to vote to accept or reject the Plan.
3.2.8 CLASS 8 - INTERESTS OF HOLDERS OF INTERESTS IN SUBSIDIARIES
Classification: Class 8 consists of the Interests of PCL and
RRLGC in the Subsidiary Debtors.
Treatment: In full and final satisfaction of the Allowed
Class 8 Interests, PCL shall retain its Interests in each of the
Subsidiary Debtors and RRLGC shall retain its Interests in CRRL.
Pursuant to Section 5.1.2 below and the PCL/Subsidiary Debtor Merger
Agreement, each Subsidiary Debtor shall be merged into Reorganized PCL
on the Effective Date.
Voting: Class 8 is unimpaired and the holders of Allowed
Class 8 Interests are not entitled to vote to accept or reject the
Plan.
3.2.9 CLASS 9 - INTERESTS OF HOLDERS OF OLD STOCK OPTIONS AND OLD
WARRANTS
Classification: Class 9 consists of the Interests of the
holders of Old Stock Options and Old Warrants.
Treatment: The holders of Class 9 Interests shall not receive
or retain any property under the Plan on account of such Interests.
Voting: Class 9 is impaired and because no distribution of
property will be made to holders of Class 9 Interests, nor will such
holders retain any property, Class 9 is deemed not to have accepted
the Plan.
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3.3 SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, nothing shall affect the
Debtors' or Reorganized PCL's rights and legal and equitable defenses in
respect of any Unimpaired Claims, including but not limited to all rights in
respect of legal and equitable defenses to setoffs or recoupments against
Unimpaired Claims.
3.4 ACCRUAL OF POSTPETITION INTEREST
No holder of a Priority Tax Claim, a Priority Claim or an Allowed
Claim (other than a holder of an Administrative Claim based on liability
incurred by a Debtor in the ordinary course of business that is entitled to
interest pursuant to the terms and conditions of the agreements giving rise to
such Administrative Claim) will be entitled to any payments or additional
distributions on account of accrued postpetition interest in respect of such
Claims.
ARTICLE IV.
ACCEPTANCE OR REJECTION OF THE PLAN
4.1 VOTING CLASSES
Each holder of an Allowed Class 2, 3, 5 or 6 Claim or an Allowed Class
7 Interest shall be entitled to vote to accept or reject the Plan.
4.2 ACCEPTANCE BY IMPAIRED CLASSES
An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims
actually voting in such Class have voted to accept the Plan and (ii) the
holders (other than any holder designated under section 1126(e) of the
Bankruptcy Code)
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of more than one-half in number of the Allowed Claims actually voting in such
Class have voted to accept the Plan. An Impaired Class of Interests shall have
accepted the Plan if the holders (other than any holder designated under
section 1126(e) of the Bankruptcy Code) of at least two-thirds in amount of the
Allowed Interests actually voting in such Class have voted to accept the Plan.
4.3 PRESUMED ACCEPTANCE OF PLAN
Classes 1, 4 and 8 are unimpaired under the Plan, and, therefore,
conclusively are presumed to have accepted the Plan pursuant to section 1126(f)
of the Bankruptcy Code.
4.4 DEEMED NON-ACCEPTANCE OF PLAN
Holders of Class 9 Interests shall not receive or retain any property
under the Plan on account of their Interests, and therefore, Class 9 is deemed
not to have accepted the Plan pursuant to Section 1126(g) of the Bankruptcy
Code.
4.5 NON-CONSENSUAL CONFIRMATION
The Proponents will seek Confirmation of the Plan under section
1129(b) of the Bankruptcy Code in view of the deemed non-acceptance by Class 9.
In the event that any Impaired Class of Claims or Interests does not accept the
Plan in accordance with section 1126 of the Bankruptcy Code, the Proponents
hereby request that the Bankruptcy Court confirm the Plan in accordance with
section 1129(b) of the Bankruptcy Code. The Proponents reserve the right to
modify the Plan to the extent, if any, that Confirmation pursuant to section
1129(b) of the Bankruptcy Code requires modification.
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ARTICLE V.
MEANS FOR IMPLEMENTATION OF THE PLAN
5.1 CONTINUED CORPORATE EXISTENCE, VESTING OF ASSETS IN REORGANIZED PCL,
THE PCL/SUBSIDIARY DEBTOR MERGER AND PRESERVATION OF RIGHTS OF ACTION
5.1.1 CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS
Subject to the provisions of Section 5.1.2 below, Reorganized PCL will
continue to exist after the Effective Date with all of the powers of
corporations under the general corporation law of Delaware and without
prejudice to any right to alter or terminate its existence (whether by merger
or otherwise). Except as otherwise provided in the Plan, on and after the
Effective Date, all property of the respective Estates of the Debtors,
including all claims, rights and causes of action (other than those released
pursuant to Section 5.5 below), and any property acquired by a Debtor or
Reorganized PCL under or in connection with the Plan, shall vest in Reorganized
PCL free and clear of all Claims, liens, charges, other encumbrances and
Interests. On and after the Effective Date, Reorganized PCL may operate its
businesses and may use, acquire and dispose of property and compromise or
settle any Claims or Interests without supervision or approval by the
Bankruptcy Court and free of any restrictions of the Bankruptcy Code or
Bankruptcy Rules, other than restrictions expressly imposed by the Plan or the
Confirmation Order. Without limiting the foregoing, Reorganized PCL may pay
the charges that it incurs on or after the Effective
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Date for Professionals' fees, disbursements, expenses or related support
services without application to the Bankruptcy Court.
5.1.2 THE PCL/SUBSIDIARY DEBTOR MERGER
Immediately prior to the commencement of the Effective Date, the
Debtors will take all such actions as may be necessary or appropriate to effect
the PCL/Subsidiary Debtor Merger on the terms and subject to the conditions set
forth in the PCL/Subsidiary Debtor Merger Agreement. Without limiting the
generality of the foregoing sentence, the Debtors will cause the PCL/Subsidiary
Debtor Merger Agreement or a certificate of merger conforming to the applicable
provisions of Delaware law and California law to be filed with the applicable
departments and agencies of the state of Delaware and California and will take
or cause to be taken all other actions, including making appropriate filings or
recordings, that may be required by Delaware law and California law or other
applicable law in connection with the PCL/Subsidiary Debtor Merger. On the
Effective Date, the Old Common Stock of the Subsidiary Debtors and MSI held in
the treasury of PCL, any Subsidiary Debtor or MSI immediately prior to the
Effective Date will be canceled and extinguished and no consideration will be
paid or delivery with respect thereto, in all events without any action on the
part of the Debtors, Reorganized PCL, the holders of Old Common Stock of the
Debtors or any other entity. Such further provisions will be made and taken
pursuant to the Plan or the PCL/Subsidiary Debtor Merger Agreement as may be
necessary or appropriate to result in there being no shares of capital stock of
the Subsidiary Debtors or MSI issued or outstanding immediately following the
Effective Date.
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5.1.3 PRESERVATION OF RIGHTS OF ACTION
Except as provided in Section 5.5 below, or in any contract,
instrument, release, indenture or other agreement entered into in connection
with the Plan, in accordance with section 1123(b) of the Bankruptcy Code,
Reorganized PCL shall retain and may enforce any claims, rights and causes of
action that the applicable Debtor or its Estate may hold against any entity,
including but not limited to the claims, rights and causes of action set forth
in Exhibit L. Failure to list a claim, right or cause of action on Exhibit L
shall not constitute a waiver or release by the Debtors of such claim, right or
cause of action. Reorganized PCL or its successors may pursue such retained
claims, rights or causes of action, as appropriate, in accordance with the best
interests of Reorganized PCL.
5.2 THE OTHER RESTRUCTURING TRANSACTIONS
5.2.1 CANCELLATION OF CAPITAL STOCK, EXISTING LENDER AGREEMENTS AND
OLD INDENTURE; SURRENDER OF SECURITIES AND OTHER DOCUMENTATION
On the Effective Date, the Capital Stock (whether issued and
outstanding or held in the treasury of PCL immediately prior to the Effective
Date), the Existing Lender Agreements, the Old Indenture and the Old
Subordinated Debentures shall be deemed to be cancelled, extinguished, retired
and of no further force and effect, in all events without any further action on
the part of the Debtors, Reorganized PCL, the holders of Capital Stock, the
Senior Lenders, Nu-Tech, the trustee under the Old Indenture, the holders of
the Old Subordinated Debentures or any other entity. The holders of such
canceled securities and other documentation
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shall have no rights arising from or relating to such securities or other
documentation, or the cancellation thereof, except the rights provided pursuant
to the Plan; provided, however, that no distribution under the Plan shall be
made to or on behalf of any holder of any Allowed Claim or Allowed Interest
evidenced by such canceled securities or other documentation unless or until
such securities or documentation are received by the Disbursing Agent pursuant
to Section 7.8 below.
5.2.2 REORGANIZED PCL'S OBLIGATIONS UNDER THE PLAN
From and after the Effective Date, Reorganized PCL will perform the
obligations of the Debtors under the Plan.
5.2.3 ISSUANCE OF SECURITIES AND RELATED DOCUMENTATION
On the Effective Date:
(a) Reorganized PCL shall issue the shares of New Common
Stock to be distributed pursuant to the Plan.
(b) Reorganized PCL shall enter into the New Indenture
with the trustee named therein and issue the New Senior Notes to be
distributed pursuant to the Plan.
(c) If the Voting Condition is satisfied, Reorganized PCL
shall issue the New Unsecured Note.
(d) If the Voting Condition is satisfied, Reorganized PCL
shall issue, pursuant to the New Warrant Agreement, the New Warrants
to be distributed pursuant to the Plan.
(e) The Senior Lenders shall be deemed to have entered
into the New Senior Notes Registration Rights Agreement without
further action on the part of the Debtors, Reorganized PCL or any
other entity.
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(f) The Senior Lenders shall be deemed to have entered
into the New Common Stock Registration Rights Agreement without
further action on the part of the Debtors, Reorganized PCL or any
other entity.
(g) Reorganized PCL and Nu-Tech shall consummate the
Nu-Tech Stock Purchase.
(h) Reorganized PCL shall enter into the Employment
Agreement.
(i) Nu-Tech and the Senior Lenders shall enter into a
shareholders agreement, which will govern certain matters with respect
to the management of Reorganized PCL.
5.2.4 ESTABLISHMENT OF NEW CREDIT FACILITY
On or after the Effective Date, Reorganized PCL may, in its sole
discretion, establish the New Credit Facility by entering into the New Credit
Facility Documents. On or after the Effective Date, if the New Credit Facility
is entered into, the lender(s) under the New Credit Facility, Reorganized PCL
and the trustee under the New Indenture shall enter into the New Intercreditor
Agreement.
5.3 CORPORATE GOVERNANCE, DIRECTORS AND OFFICERS, EMPLOYMENT-RELATED
AGREEMENTS AND COMPENSATION PROGRAMS
5.3.1 REORGANIZED PCL CERTIFICATE OF INCORPORATION AND BYLAWS
As of the Effective Date, the New PCL Certificate of Incorporation and
the New PCL Bylaws shall be substantially in the forms of Exhibits A and B,
respectively, to the Plan. The New PCL Certificate of Incorporation shall,
among other things: (i) prohibit the issuance of nonvoting equity securities,
to the
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extent required by section 1123(a) of the Bankruptcy Code; and (ii) authorize
the issuance of New Common Stock and New Warrants in amounts not less than the
amounts necessary to permit the distributions thereof required or contemplated
by the Plan. After the Effective Date, Reorganized PCL may amend and restate
the New PCL Certificate of Incorporation or New PCL Bylaws as permitted by
applicable law.
5.3.2 REORGANIZED PCL DIRECTORS AND OFFICERS
Subject to any requirement of Bankruptcy Court approval pursuant to
section 1129(a)(5) of the Bankruptcy Code, the initial directors of Reorganized
PCL will consist of five directors. Initially, Nu-Tech will appoint three
directors and the Senior Lenders will appoint two directors. Subject to any
requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the
Bankruptcy Code, the initial chief executive officer and chairman of
Reorganized PCL shall be J. Marvin Feigenbaum. The other officers of
Reorganized PCL will be named prior to Confirmation. All directors of
Reorganized PCL shall serve until their successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the New PCL Certificate of Incorporation and Bylaws. Each
officer of Reorganized PCL will serve from and after the Effective Date until
his or her successor is duly appointed and qualified or until their earlier
death, resignation or removal in accordance with the terms of the Certificate
of Incorporation and Bylaws.
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5.3.3 EMPLOYMENT, RETIREMENT, INDEMNIFICATION AND OTHER AGREEMENTS
AND INCENTIVE COMPENSATION PROGRAMS; RETIREE HEALTH AND
WELFARE BENEFITS
5.3.3.1 As of the Effective Date, Reorganized PCL shall have
the authority to (i) enter into employment, retirement, indemnification and
other agreements with their active directors, officers and employees and (ii)
implement retirement income plans, welfare benefit plans and other incentive
plans in which directors, officers and other active employees of Reorganized
PCL may be eligible to participate. Such agreements and plans may include
equity, bonus and other incentive plans. The Disclosure Statement contains
information as to the compensation to be paid to insiders who are the subject
of any such agreements, plans or programs currently intended to be implemented.
5.3.3.2 From and after the Effective Date, pursuant to
section 1129(a)(13) of the Bankruptcy Code, Reorganized PCL shall continue to
pay all retiree benefits (as defined in section 1114(a) of the Bankruptcy
Code), at the level established pursuant to subsection (e)(1)(B) or (g) of
section 1114 of the Bankruptcy Code, at any time prior to Confirmation, in
accordance with the contract or program giving rise to such benefits.
5.3.4 CORPORATE ACTION
The adoption of new or amended and restated certificates or articles
of incorporation and bylaws or regulations or similar constituent documents for
Reorganized PCL; the initial selection of directors and officers for
Reorganized PCL; the distribution of Cash pursuant to the Plan; the issuance
and distribution of
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New Securities pursuant to the Plan; the grant of mortgages, deeds of trust,
liens and other security interests; the adoption, execution, delivery and
implementation of all contracts, leases, instruments, releases, indentures and
other agreements or documents related to any of the foregoing; the adoption,
execution and implementation of employment, retirement and indemnification
agreements, incentive compensation programs, retirement income plans, welfare
benefit plans and other employee plans and related agreements; and the other
matters provided for under the Plan involving the corporate or partnership
structure of any Debtor or Reorganized PCL or corporate or partnership action
to be taken by or required of any Debtor or Reorganized PCL will occur and be
effective as provided herein, and will be authorized and approved in all
respects and for all purposes without any requirement of further action by
stockholders, directors or partners of any of the Debtors or Reorganized PCL.
5.4 SOURCES OF CASH FOR PLAN DISTRIBUTIONS
Except as otherwise provided in the Plan or the Confirmation Order,
all Cash necessary for Reorganized PCL to make payments pursuant to the Plan
shall be obtained from Reorganized PCL's cash balances and the operations of
the Debtors or Reorganized PCL and the DIP Financing Facility. Cash payments
to be made pursuant to the Plan will be made by Reorganized PCL or the
Disbursing Agent.
5.5 RELEASES AND RELATED MATTERS
5.5.1 RELEASES BY THE DEBTORS
5.5.1.1 As of the Effective Date, the Debtors and Reorganized
PCL will be deemed to have released and waived all
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causes of action of the Debtors arising under sections 510, 544, 547, 548, 549
or 550 of the Bankruptcy Code, other than those expressly listed on Exhibit L.
5.5.1.2 As of the Effective Date, for good and valuable
consideration, the adequacy of which is hereby confirmed, other than as
expressly listed on Exhibit L, the Debtors and Reorganized PCL will be deemed
to forever release, waive and discharge all claims, counterclaims, obligations,
suits, judgments, damages, demands, debts, rights, causes of action and
liabilities whatsoever in connection with or related to the Debtors, the
Chapter 11 Cases or the Plan (other than the rights of the Debtors or
Reorganized PCL to enforce the Plan and the contracts, instruments, releases,
indentures and other agreements or documents delivered thereunder), whether
liquidated or unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, then existing or thereafter arising, in law,
equity or otherwise that are based in whole or in part on any act, omission,
transaction, event or other occurrence taking place on or prior to the
Effective Date in any way relating to the Debtors, the parties released
pursuant to this Section 5.5.1.2, the Chapter 11 Cases or the Plan, and that
may be asserted by or on behalf of a Debtor or its Estate against (i) the
Debtors' current and former officers, directors and shareholders, (ii) Nu-Tech
and Nu-Tech's current and former officers, directors and shareholders, (iii)
the respective current and former agents, employees, consultants, advisors,
attorneys, accountants and other representatives of the Debtors or Nu-Tech
(including the respective current and former members
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and professionals of the foregoing) acting in such capacity, (iv) the Senior
Lenders, the Agent, the holders of the Old Subordinated Debentures, the trustee
under the Old Indenture and the Official Committee and their respective
predecessors in interest relating to their respective Claims and (v) the
respective current and former agents, advisors, attorneys and representatives
of the Senior Lenders, the Agent, the holders of the Old Subordinated
Debentures, and the Official Committee (including the respective current and
former members and professionals of the foregoing and their respective
predecessors in interest) acting in such capacity; provided, however, that the
Debtors shall not release the persons identified in subclauses (i) and (ii) of
this Section 5.5.1.2 from any claims with respect to (a) any loan, advance or
similar payment by the Debtors to such person or (b) any contractual obligation
owed by such person to the Debtors.
5.5.2 RELEASES BY HOLDERS OF CLAIMS OR INTERESTS
5.5.2.1 Holders of Claims. As of the Effective Date, to the
fullest extent permitted by applicable law, in consideration for the
obligations of the Debtors and Reorganized PCL under the Plan and the Cash (if
the Voting Condition is satisfied), the New Securities, contracts, instruments,
releases and other agreements or documents to be delivered in connection with
the Plan, each holder of a Claim that is Impaired under the Plan will be deemed
to forever release, waive and discharge all claims, counterclaims, demands,
debts, rights, causes of action and liabilities (other than the right to
enforce the Debtors' or Reorganized PCL's obligations under the Plan and the
contracts,
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instruments, releases and other agreements and documents delivered thereunder),
whether liquidated or unliquidated, fixed or contingent, matured or unmatured,
known or unknown, foreseen or unforeseen, then existing or thereafter arising,
that are based in whole or in part on any act, omission or other occurrence
taking place on or prior to the Effective Date in any way relating to their
Claims against a Debtor, the Chapter 11 Cases or the Plan against (i) the
Debtors and Nu-Tech, (ii) the current and former officers, directors and
shareholders of the Debtors and Nu-Tech or (iii) their respective agents,
advisors, attorneys and representatives (including the respective current and
former officers, directors, employees, shareholders and professionals of the
foregoing), acting in such capacity.
5.5.2.2 Holders of Interests. As of the Effective Date, to
the fullest extent permissible under applicable law, in consideration for the
obligations of the Debtors and Reorganized PCL under the Plan (and, if the
Voting Condition is satisfied, the New Common Stock and the New Warrants),
contracts, instruments, releases or other agreements or documents to be
delivered in connection with the Plan, each entity that has held, holds or may
hold an Interest will be deemed to forever release, waive and discharge all
claims, counterclaims, demands, debts, rights, causes of action and liabilities
(other than the right to enforce the Debtors' or Reorganized PCL's obligations
under the Plan and the contracts, instruments, releases and other agreements
and documents delivered thereunder), whether liquidated or unliquidated, fixed
or contingent, matured or unmatured, known or unknown, foreseen or unforeseen,
then
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existing or thereafter arising, that are based in whole or in part on any act,
omission or other occurrence taking place on or prior to the Effective Date in
any way relating to their Interests in a Debtor, the Chapter 11 Cases or the
Plan against: (i) the Debtors and Nu-Tech, (ii) the current or former
officers, directors and shareholders of the Debtors and Nu-Tech or (iii) their
respective agents, advisors, attorneys and representatives (including the
respective current and former directors, officers, employees, shareholders and
professionals of the foregoing), acting in such capacity.
5.5.2.3 Release of Official Committee. As of the Effective
Date, to the fullest extent permissible under applicable law, in consideration
for the contracts, instruments, releases or other agreements or documents to be
delivered in connection with the Plan, each entity that has held, holds or may
hold a Claim or Interest which is Impaired will be deemed to forever release,
waive and discharge all claims, counterclaims, demands, debts, rights, causes
of action and liabilities, whether liquidated or unliquidated, fixed or
contingent, matured or unmatured, known or unknown, foreseen or unforeseen,
then existing or thereafter arising, that are based in whole or in part on any
act, omission or other occurrence taking place on or prior to the Effective
Date in any way relating to their Claims against or Interests in a Debtor, the
Chapter 11 Cases or the Plan against the Official Committee, its agents,
advisors, attorneys and representatives (including the respective current and
former directors, officers, employees, shareholders and professionals of the
foregoing), acting in such capacity.
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5.5.2.4 Settlement of Sutter Claims. In exchange for the
releases provided in Sections 5.5.1, 5.5.2.1 and 5.5.2.2 above, as of the
Effective Date, Sutter shall be deemed to forever release, waive and discharge
all Sutter Claims and shall receive no other consideration therefor under the
Plan.
5.5.3 INJUNCTION RELATED TO RELEASES
As further provided in Section 11.2, the Confirmation Order will
enjoin the prosecution, whether directly, derivatively or otherwise, of any
claim, counterclaim, demand, debt, right, cause of action, liability or
interest released, discharged or terminated pursuant to the Plan.
5.5.4 LIMITATION ON RELEASES
Notwithstanding the provisions of this Section 5.5, if and to
the extent that the Bankruptcy Court concludes that the Plan cannot be
confirmed with any portion of the releases set forth in the Plan, then the Plan
may be confirmed with that portion excised so as to give effect as much as
possible to the foregoing releases without precluding confirmation of the Plan.
5.6 RELEASE OF LIENS
Except as otherwise provided in the Plan with respect to Other Secured
Claims, the New Indenture, or in any contract, instrument, indenture or other
agreement or document created in connection with the Plan, on the Effective
Date, all mortgages, deeds of trust, liens or other security interests against
the property of the Estate shall be released, and all the right, title and
interest of any holder of such mortgages, deeds of trust, liens or other
security interests shall revert to Reorganized PCL and its successors and
assigns.
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5.7 EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS; EXEMPTION FROM CERTAIN
TRANSFER TAXES
The Chairman of the Board, Chief Executive Officer and any Executive
Vice President or Vice President of each Debtor or Reorganized PCL shall be
authorized to execute, deliver, file or record such contracts, instruments,
releases, indentures and other agreements or documents and to take such actions
as may be necessary or appropriate to effectuate and further evidence the terms
and conditions of the Plan. The Secretary or any Assistant Secretary of the
applicable Debtor or Reorganized PCL shall be authorized to certify or attest
to any of the foregoing actions. Pursuant to section 1146(c) of the Bankruptcy
Code: (1) the issuance, distribution, transfer or exchange of the New
Securities; (2) the creation, modification, consolidation or recording of any
mortgage, deed of trust or other security interest, the securing of additional
indebtedness by such means or by other means in furtherance of, or in
connection with, the Plan or the Confirmation Order; (3) the making, assignment
or recording of any lease or sublease; or (4) the making, delivery or recording
of any deed or other instrument of transfer under, in furtherance of, or in
connection with, the Plan, including any merger agreements or agreements of
consolidations, deeds, bills of sale, assignment or other instruments of
transfer executed in connection with the Plan, the Confirmation Order or any
transaction contemplated in Section 5.2 above, or any transactions arising out
of, contemplated by or in any way related to the foregoing, shall not be
subject to any document recording tax, stamp tax, conveyance fee, intangibles
or similar
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tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax
or other similar tax or governmental assessment, and the appropriate state or
local governmental officials or agents shall be, and hereby are, directed to
forego the collection of any such tax or governmental assessment and to accept
for filing and recordation any of the foregoing instruments or other documents
without the payment of any such tax or governmental assessment.
ARTICLE VI.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
6.1 EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE ASSUMED OR ASSUMED AND
ASSIGNED
6.1.1 ASSUMPTIONS GENERALLY
Except as otherwise provided in the Plan, including Section 6.2 below,
or in any contract, instrument, release, indenture or other agreement or
document entered into in connection with the Plan, on the Effective Date,
pursuant to section 365 of the Bankruptcy Code, the Debtors shall assume (i)
each executory contract and unexpired lease entered into by a Debtor prior to
the Petition Date that has not previously: (a) expired or terminated pursuant
to its own terms or (b) been assumed or rejected pursuant to section 365 of the
Bankruptcy Code and (ii) each Provider Agreement. Notwithstanding any other
provision of this Plan, the Provider Agreements shall be assumed as of the
Effective Date free and clear of any rights, claims, recoupments or setoffs
which accrued before the Effective Date. In particular, and without
limitation, from and after the Effective Date, the non-debtor parties to the
Provider Agreements
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shall be enjoined from setting off or recouping against payments due to
Reorganized PCL after the Effective Date, any liabilities which the Debtors
have, or may have, to such third parties which liabilities accrued on or before
the Effective Date; and such non-debtor parties to any of the Provider
Agreements shall not be entitled to impose on Reorganized PCL, any successor to
Reorganized PCL or any of their respective agents or employees, any compliance
or other requirements as a condition to the Provider Agreements remaining in
full force and effect. The Confirmation Order shall constitute an order of the
Bankruptcy Court approving the assumptions described in this Section 6.1.1,
pursuant to section 365 of the Bankruptcy Code, as of the Effective Date.
6.1.2 ASSIGNMENTS RELATED TO THE PCL/SUBSIDIARY DEBTOR MERGER
As of the effective time of the PCL/Subsidiary Debtor Merger, any
executory contract or unexpired lease of the Subsidiary Debtors to be held by
Reorganized PCL will be deemed assumed and assigned to Reorganized PCL pursuant
to section 365 of the Bankruptcy Code.
6.1.3 CURE OF DEFAULTS
Any monetary amounts by which each executory contract and unexpired
lease to be assumed pursuant to the Plan is in default shall be satisfied,
pursuant to section 365(b)(1) of the Bankruptcy Code, at the option of the
applicable Debtor or Reorganized PCL: (a) by payment of the default amount in
Cash on the Effective Date or (b) on such other terms as are agreed to by the
parties to such executory contract or unexpired lease. If
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there is a dispute regarding: (i) the amount of any cure payments; (ii) the
ability of Reorganized PCL to provide "adequate assurance of future
performance" (within the meaning of section 365 of the Bankruptcy Code) under
the contract or lease to be assumed; or (iii) any other matter pertaining to
assumption, the cure payments required by section 365(b)(1) of the Bankruptcy
Code shall be made following the entry of a Final Order resolving the dispute
and approving the assumption.
6.2 EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED; BAR DATE FOR
REJECTION DAMAGES
6.2.1 REJECTION GENERALLY
Except as otherwise provided in the Plan or in any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, on the Effective Date, pursuant to section 365 of the
Bankruptcy Code, the applicable Debtor shall reject each of the executory
contracts and unexpired leases listed on Exhibit I to the Plan; provided,
however, that the Debtors reserve the right, at any time prior to the Effective
Date, to amend Exhibit I to delete any executory contract or unexpired lease
listed therein, thus providing for its assumption or assumption and assignment
pursuant to Section 6.1.1 or Section 6.1.2 above. Each contract and lease
listed on Exhibit I shall be rejected only to the extent that any such contract
or lease constitutes an executory contract or unexpired lease. Listing a
contract or lease on Exhibit I shall not constitute an admission by the
applicable Debtor or Reorganized PCL that such contract or lease is an
executory contract or unexpired lease or that the applicable Debtor or
Reorganized PCL has any liability
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thereunder. The Confirmation Order shall constitute an order of the Bankruptcy
Court approving such rejections, pursuant to section 365 of the Bankruptcy
Code, as of the Effective Date.
6.2.2 BAR DATE FOR REJECTION DAMAGES
If the rejection of an executory contract or unexpired lease pursuant
to Section 6.2.1 above gives rise to a Claim by the other party or parties to
such contract or lease, such Claim shall be forever barred and shall not be
enforceable against the applicable Debtor, Reorganized PCL, their respective
successors or properties unless (a) a Stipulation of Amount and Nature of Claim
has been entered into with respect to the rejection of such executory contract
or unexpired lease or (b) a proof of Claim is Filed and served on Reorganized
PCL and counsel for Reorganized PCL within 30 days after the Effective Date or
such earlier date as established by the Bankruptcy Court.
6.3 SPECIAL EXECUTORY CONTRACT AND UNEXPIRED LEASE MATTERS
6.3.1 EXISTING EMPLOYMENT, RETIREMENT AND OTHER AGREEMENTS AND
INCENTIVE COMPENSATION PROGRAMS
The employment, retirement and other agreements and incentive
compensation programs that are listed on Exhibit K to the Plan are treated as
executory contracts under the Plan and, on the Effective Date, shall be assumed
pursuant to sections 365 and 1123 of the Bankruptcy Code.
6.3.2 INDEMNIFICATION OBLIGATIONS
To the extent any indemnification obligation of a Debtor existing as
of the Petition Date to any officer or director to be employed by Reorganized
PCL constitutes an executory contract, each Debtor shall be deemed to have
assumed (or in the case of a
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Subsidiary Debtor, assumed and assigned to Reorganized PCL) such executory
contract as of the Effective Date pursuant to section 365 of the Bankruptcy
Code; provided, however, that any indemnification obligations of any Debtor to
Nathan L. Headley or Robert Headley shall be rejected pursuant to section 365
of the Bankruptcy Code.
6.4 EXECUTORY CONTRACTS AND UNEXPIRED LEASES ENTERED INTO AND OTHER
OBLIGATIONS INCURRED AFTER THE PETITION DATE
Executory contracts and unexpired leases entered into and other
obligations incurred after the Petition Date by the Debtors shall be performed
by the applicable Debtor or Reorganized PCL in the ordinary course of its
business. Accordingly, such executory contracts, unexpired leases and other
obligations shall survive and remain unaffected by entry of the Confirmation
Order.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
7.1 DISTRIBUTIONS FOR CLAIMS AND INTERESTS ALLOWED AS OF THE EFFECTIVE
DATE
7.1.1 Except as otherwise provided in this Article VII, or as may be
ordered by the Bankruptcy Court, distributions to be made on account of Claims
or Interests that are Allowed as of the Effective Date shall be made on the
Effective Date. Distributions shall be deemed made on the Effective Date if
made on the Effective Date or as promptly thereafter as practicable, but in any
event no later than 60 days after the Effective Date or such later date when
the applicable conditions of Sections 6.1.3 (regarding cure payments for
executory contracts and unexpired leases being assumed); 7.3.2 (regarding
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undeliverable distributions); 7.6.6.2 (regarding arrangements for the
satisfaction and payment of tax obligations relating to distributions of Cash
or securities pursuant to the Plan); or 5.4 and 7.8 (regarding surrender of
canceled debt instruments and securities) are satisfied. Securities to be
issued shall be deemed issued as of the Effective Date regardless of the date
on which they are actually distributed. Distributions on account of Claims or
Interests that are Allowed after the Effective Date shall be made pursuant to
Sections 7.6 and 8.3 below. Notwithstanding the date on which any distribution
of securities is actually made to a holder of a Claim or Interest that is an
Allowed Claim or Allowed Interest on the Effective Date, as of the date of the
distribution such holder shall be deemed to have the rights of a holder of such
securities distributed as of the Effective Date.
7.1.2 From and after the Effective Date, Cash to be distributed on
the Effective Date on account of Claims allowed as of the Effective Date shall
be held pending distribution in trust in segregated bank accounts in the name
of the Disbursing Agent for the benefit of the holders of such Claims. The
Disbursing Agent shall invest such cash in a manner consistent with the
Disbursing Agent's investment and deposit guidelines. Distributions of Cash on
account of each Claim allowed as of the Effective Date shall include a Pro Rata
share of the Reorganization Investment Yield from such investment of Cash.
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7.2 DISTRIBUTIONS BY DISBURSING AGENTS AND THE INDENTURE TRUSTEE
7.2.1 DISBURSING AGENTS
Except as provided in Section 7.2.2 below, the Disbursing Agent shall
make all distributions of Cash and New Securities required to be distributed
under the applicable provisions of the Plan. The Disbursing Agent may employ
or contract with other entities to assist in or make the distributions required
by the Plan. The Disbursing Agent shall serve without bond, and shall receive,
without further Bankruptcy Court approval, reasonable compensation for
distribution services rendered pursuant to the Plan and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services
from Reorganized PCL on terms acceptable to Reorganized PCL or the Committee as
set forth in Section 7.6.2 with respect to Allowed Claims in Class 5.
7.2.1.1 Third-Party Disbursing Agent Provisions. On the
Effective Date, the Third-Party Disbursing Agent shall be appointed and
thereafter act as the disbursing agent for the purpose of making certain
distributions provided for under the Plan to holders of Class 5 Claims. The
Third-Party Disbursing Agent shall serve without bond and shall receive one
percent (1%) of the distributions to Allowed General Unsecured Class 5 Claims,
plus reasonable out-of-pocket expenses. The Third-Party Disbursing Agent shall
serve at the discretion of the Official Committee which shall have the power to
replace the Third-Party Disbursing Agent and otherwise negotiate terms
considered more favorable to the estate, if deemed appropriate. Unless
otherwise replaced and substituted, the Third-Party Disbursing Agent shall be
the Credit Managers Association of California. The fee, costs
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and expenses of Disbursing Agent shall be paid from the Class 5 Disbursement
Account.
7.2.1.2 Investment of Cash by the Third-Party Disbursing
Agent. Upon the receipt of all cash to be paid under the Plan to holders of
Class 5 Claims, the Third-Party Disbursing Agent shall invest such funds and
otherwise be responsible for maintaining such funds in federally-insured
interest bearing account(s) until distribution is required in accordance with
the Plan and any post-Effective Date order of the Bankruptcy Court.
7.2.2 INDENTURE TRUSTEE
Distributions provided for in the Plan on account of Old Subordinated
Debenture Claims shall be made to the Indenture Trustee, for further
distribution to individual holders of Allowed Old Subordinated Debenture
Claims. Any such distribution shall be made pursuant to the Old Indenture.
7.3 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED DISTRIBUTIONS
7.3.1 DELIVERY OF DISTRIBUTIONS IN GENERAL
Distributions to holders of Allowed Claims or Allowed
Interests shall be made at the addresses set forth in the Schedules or other
records of the Debtors or Reorganized PCL at the time of the distribution.
7.3.2 UNDELIVERABLE DISTRIBUTIONS
7.3.2.1 Holding and Investment of Undeliverable Distributions
7.3.2.1.1 If the distribution to any holder of an
Allowed Claim or Allowed Interest is returned to a Disbursing Agent as
undeliverable, no further distributions shall be made to
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such holder unless and until the Disbursing Agent is notified in writing of
such holder's then-current address. Undeliverable distributions shall remain
in the possession of the Disbursing Agent pursuant to this Section 7.3.2.1.1
until such time as a distribution becomes deliverable. Undeliverable Cash
shall be held in trust in segregated bank accounts in the name of the
Disbursing Agent for the benefit of the potential claimants of such funds, and
shall be accounted for separately. Undeliverable New Securities shall be held
in trust for the benefit of the potential claimants of such securities by the
Disbursing Agent in principal amounts or number of shares sufficient to fund
the unclaimed amounts of such securities and shall be accounted for separately.
7.3.2.1.2 Pending the distribution of any
undeliverable New Common Stock pursuant to the Plan, the Disbursing Agent shall
cause the New Common Stock held by it in its capacity as Disbursing Agent to
be: (A) represented in person or by proxy at each meeting of the stockholders
of Reorganized PCL; and (B) voted with respect to any matter of Reorganized PCL
proportionally with the votes cast by the other stockholders of Reorganized
PCL.
7.3.2.2 After Distributions Become Deliverable
On each Distribution Date, the applicable Disbursing
Agent will make all distributions that become deliverable to holders of Allowed
Claims or Allowed Interests during the preceding quarter. Each such
distribution will include, to the extent applicable: (i) dividends or other
distributions, if any, that shall have theretofore been paid to the Disbursing
Agent in respect of any
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New Common Stock included in such distribution and (ii) a Pro Rata share of the
Reorganization Investment Yield.
7.3.2.3 Failure to Claim Undeliverable Distributions
Any holder of an Allowed Claim or Allowed Interest that does not
assert a claim pursuant to the Plan for an undeliverable distribution within
one year after the Effective Date shall have its claim for such undeliverable
distribution discharged and shall be forever barred from asserting any such
claim for an undeliverable distribution against Reorganized PCL or its
respective property. In such cases (other than with respect to Class 5 Claims
and subject to Section 7.6.2): (i) any Cash held for distribution on account
of such claims for undeliverable distributions shall be property of Reorganized
PCL free of any restrictions thereon; (ii) any New Common Stock held for
issuance on account of such claims for undeliverable distributions shall either
be canceled or held as treasury shares as Reorganized PCL may determine is
appropriate; and (iii) any New Warrants held for issuance on account of such
claims for undeliverable distributions shall be canceled. To the extent that
such undeliverable Cash or New Securities are held by a Third-Party Disbursing
Agent, the Third-Party Disbursing Agent shall return such Cash or the
securities or other instruments evidencing such New Securities to Reorganized
PCL. Nothing contained in the Plan shall require the Debtors, Reorganized PCL
or any Disbursing Agent to attempt to locate any holder of an Allowed Claim or
Allowed Interest.
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7.4 DISTRIBUTION RECORD DATE
As of the close of business on the Distribution Record Date, the
transfer registers for the Capital Stock maintained by the Debtors, or their
respective agents, shall be closed. The Disbursing Agents and their respective
agents shall have no obligation to recognize the transfer of any Capital Stock
occurring after the Distribution Record Date, and shall be entitled for all
purposes herein to recognize and deal only with those holders of record as of
the close of business on the Distribution Record Date.
7.5 MEANS OF CASH PAYMENTS
Cash payments made pursuant to the Plan shall be in U.S. dollars by
checks drawn on a domestic bank selected by the Disbursing Agent, or by wire
transfer from a domestic bank, at the option of the Disbursing Agent. Cash
payments of $1,000,000.00 or more to be made pursuant to the Plan will, to the
extent requested in writing no later than five days after the Confirmation
Date, be made by wire transfer from a domestic bank. Cash payments to foreign
creditors may be made, at the option of the Disbursing Agent, in such funds and
by such means as are necessary or customary in a particular foreign
jurisdiction.
7.6 TIMING AND CALCULATION OF AMOUNTS TO BE DISTRIBUTED
7.6.1 IN GENERAL
On the Effective Date, other than as provided in Section 7.6.2 below,
to the extent that the Plan provides for distributions on account of Allowed
Claims or Allowed Interests in the applicable Class, each holder of an Allowed
Claim or Allowed Interest shall receive the full amount of the
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distributions that the Plan provides for Allowed Claims or Allowed Interests in
the applicable Class. On each Distribution Date, distributions shall also be
made, pursuant to Sections 7.3 and 8.3 below, respectively, to (a) holders of
Claims or Interests to whom a distribution has become deliverable during the
preceding quarter and (b) to holders of Disputed Claims or Disputed Interests
in any such Class whose Claims or Interests were Allowed during the preceding
quarter. Such quarterly distributions shall also be in the full amount that
the Plan provides for Allowed Claims or Allowed Interests in the applicable
Class.
7.6.2 DISTRIBUTIONS TO HOLDERS OF CLAIMS IN CLASS 5
7.6.2.1 The Third-Party Disbursing Agent shall make initial
distributions of Cash to the holders of Allowed Claims in Class 5 on the
Effective Date. The amount of the Cash distributions to be made to holders of
Allowed Claims in Class 5 on the Effective Date shall be calculated as if each
Disputed Claim in Class 5 were an Allowed Claim in the amount of the Claim as
Filed. Pursuant to Sections 8.1.2 and 8.3 below, (a) beginning on the first
Distribution Date, the Third-Party Disbursing Agent shall make distributions of
Cash to holders of Disputed Claims whose Claims become Allowed Claims during
the preceding quarter, (b) all fees and expenses of the Third-Party Disbursing
Agent with respect to distributions to holders of Class 5 Claims shall be paid
out of the funds in the Class 5 Disbursement Account and (c) all costs incurred
in connection with the resolution of Disputed Claims after the Effective Date
shall be paid out of the funds in the Class 5 Disbursement
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Account. Such distributions shall be calculated pursuant to the provisions set
forth in this Section 7.6.2.1 and Section 7.2.1.1.
7.6.2.2 On each Distribution Date, each holder of a
previously Allowed Claim in Class 5 shall receive an additional distribution of
Cash on account of such Claim equal to: (i) the amount of Cash that such
holder would be entitled to receive under the Plan as if such Claim had become
an Allowed Claim on such Distribution Date, minus (ii) the aggregate amount of
Cash previously distributed on account of such Claim. Each such additional
distribution shall also include, on the basis of the amount then being
distributed, a Pro Rata share of the Reorganization Investment Yield, from the
date such amounts would have been due had such Claim initially been paid 100%
of the distribution on account of the Allowed amount of such Claim, to the date
such distribution is made, net of any taxes paid or payable by the Disbursing
Agent and properly attributable to such share of the Reorganization Investment
Yield.
7.6.2.3 One year after the Effective Date, Reorganized PCL
shall make all payments due with respect to the New Unsecured Note to the
Third-Party Disbursing Agent, which payments shall be placed in the Class 5
Disbursement Account. On the first Distribution Date that occurs after the
date that is one year after the Effective Date, the Third-Party Disbursing
Agent shall distribute to each holder of an Allowed Claim in Class 5 a Pro Rata
share of the proceeds of the New Unsecured Note. The amount of such
distributions on such date shall be calculated as if each Disputed Claim in
Class 5 were an Allowed Claim in the amount of the Claim as Filed. After such
date,
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(i) distributions of the proceeds of the New Unsecured Note to holders of
Disputed Claims, whose Claims become Allowed Claims during the preceding
quarter and (ii) additional distributions of proceeds of the New Unsecured Note
to holders of previously Allowed Claims in Class 5, shall be made on each
Distribution Date pursuant to the provisions of Sections 7.6.2.1 and 7.6.2.2.
7.6.3 DISTRIBUTIONS OF NEW COMMON STOCK
Notwithstanding any other provision of the Plan, only whole numbers of
shares of New Common Stock shall be issued or transferred, as the case may be,
pursuant to the Plan. When any distribution on account of an Allowed Claim or
Allowed Interest pursuant to the Plan would otherwise result in the issuance or
transfer of a number of shares of New Common Stock that is not a whole number,
the actual distribution of shares of such stock shall be rounded to the next
higher or lower whole number as follows: (a) fractions of 1/2 or greater
shall be rounded to the next higher whole number and (b) fractions of less than
1/2 shall be rounded to the next lower whole number. The total number of
shares of New Common Stock to be distributed to a Class of Claims or Interests
shall be adjusted as necessary to account for the rounding provided for in this
Section 7.6.3. No consideration shall be provided in lieu of fractional shares
that are rounded down.
7.6.4 DISTRIBUTIONS OF NEW SENIOR NOTES
Notwithstanding any other provision of the Plan, New Senior Notes will
be issued in denominations of $1,000 and integral multiples thereof. In the
event a holder of an Allowed Senior Debt Claim is entitled to an amount of New
Senior Notes that is
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not an integral multiple of $1,000, the principal amount of New Senior Notes
such holder is entitled to receive shall be rounded up to the nearest integral
multiple of $1,000.
7.6.5 DISTRIBUTIONS OF NEW WARRANTS
Notwithstanding any other provision of the Plan, only whole numbers of
New Warrants shall be issued pursuant to the Plan. When any distribution on
account of an Allowed Class 7 Interest pursuant to the Plan would otherwise
result in the issuance of a number of New Warrants that is not a whole number,
the actual distribution of such New Warrants shall be rounded to the next
higher or lower whole number as follows: (a) fractions of 1/2 or greater shall
be rounded to the next higher whole number and (b) fractions of less than 1/2
shall be rounded to the next lower whole number. The total number of New
Warrants to be distributed to a holder of an Allowed Class 7 Interest shall be
adjusted as necessary to account for the rounding provided for in this Section
7.6.5. No consideration shall be provided in lieu of fractional warrants that
are rounded down.
7.6.6 COMPLIANCE WITH TAX REQUIREMENTS
7.6.6.1 In connection with the Plan, to the extent
applicable, the Disbursing Agent shall comply with all tax withholding and
reporting requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such withholding and
reporting requirements. The Disbursing Agent shall be authorized to take any
and all actions that may be necessary or appropriate to comply with such
withholding and reporting requirements.
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7.6.6.2 Notwithstanding any other provision of the Plan: (i)
each holder of an Allowed Claim or Interest that is to receive a distribution
of Cash or New Securities pursuant to the Plan shall have sole and exclusive
responsibility for the satisfaction and payment of any tax obligations imposed
by any governmental unit, including income, withholding and other tax
obligations, on account of such distribution; and (ii) no distribution shall be
made to or on behalf of such holder pursuant to the Plan unless and until such
holder has made arrangements satisfactory to the Disbursing Agent for the
payment and satisfaction of such tax obligations. Any Cash or New Securities
to be distributed pursuant to the Plan shall, pending the implementation of
such arrangements, be treated as an undeliverable distribution pursuant to
Section 7.3.2 above.
7.7 SETOFFS
Except with respect to claims of a Debtor or Reorganized PCL released
pursuant to the Plan or any contract, instrument, release, indenture, or other
agreement or document created in connection with the Plan, the Debtors or
Reorganized PCL may, pursuant to section 553 of the Bankruptcy Code or
applicable nonbankruptcy law, set off against any Allowed Claim (other than a
Senior Debt Claim, Nu-Tech Claim or Old Subordinated Debentures Claim) and the
distributions to be made pursuant to the Plan on account of such Claim (before
any distribution is made on account of such Claim), the claims, rights and
causes of action of any nature that the applicable Debtor or Reorganized PCL
may hold against the holder of such Allowed Claim; provided, however, that
neither the failure to effect such a setoff nor the allowance of
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any Claim hereunder shall constitute a waiver or release by the applicable
Debtor or Reorganized PCL of any such claims, rights and causes of action that
the applicable Debtor or Reorganized PCL may possess against such holder.
7.8 SURRENDER OF CANCELLED DEBT INSTRUMENTS OR SECURITIES
Subject to the provisions of Section 7.8.2 below, as a condition
precedent to receiving any distribution pursuant to the Plan on account of an
Allowed Claim or Allowed Interest evidenced by the instruments, securities or
other documentation canceled pursuant to Section 5.2.1 above, the holder of
such Claim or Interest shall tender the applicable instruments, Old
Subordinated Debentures, Old Common Stock or other documentation evidencing
such Claim or Interest to the Disbursing Agent pursuant to a letter of
transmittal furnished by the Disbursing Agent. Any New Securities to be
distributed pursuant to the Plan on account of any such Claim or Interest
shall, pending such surrender, be treated as an undeliverable distribution
pursuant to Section 7.3.2 above.
7.8.1 OLD SUBORDINATED DEBENTURES AND CAPITAL STOCK CERTIFICATES
Except as provided in Section 7.8.2 below for lost, stolen, mutilated
or destroyed Old Subordinated Debentures or Capital Stock certificates, each
holder of an Allowed Claim or Allowed Interest evidenced by an Old Subordinated
Debenture or Capital Stock certificate shall tender such Old Subordinated
Debenture or Capital Stock certificate to the Disbursing Agent in accordance
with written instructions to be provided in a letter of transmittal to such
holders by the Disbursing Agent as promptly
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as practicable following the Effective Date. Such letter of transmittal shall
specify that delivery of such Old Subordinated Debentures or Capital Stock
certificates will be effected, and risk of loss and title thereto will pass,
only upon the proper delivery of such Old Subordinated Debentures or Capital
Stock certificates with the letter of transmittal in accordance with such
instructions. Such letter of transmittal shall also include, among other
provisions, customary provisions with respect to the authority of the holder of
the applicable Old Subordinated Debenture or Capital Stock certificate to act
and the authenticity of any signatures required on the letter of transmittal.
All surrendered Old Subordinated Debentures and Capital Stock certificates
shall be marked as canceled and delivered to Reorganized PCL.
7.8.2 LOST, STOLEN, MUTILATED OR DESTROYED EXISTING LENDER
AGREEMENTS, OLD SUBORDINATED DEBENTURES OR CAPITAL STOCK
CERTIFICATES
In addition to any requirements under the applicable certificate or
articles of incorporation or bylaws of the applicable Debtor, any holder of a
Claim or an Interest evidenced by an Existing Lender Agreement, Old
Subordinated Debenture or a Capital Stock certificate that has been lost,
stolen, mutilated or destroyed shall, in lieu of surrendering such Old
Subordinated Debenture or Capital Stock certificate, deliver to the Disbursing
Agent: (a) evidence satisfactory to the Disbursing Agent of the loss, theft,
mutilation or destruction; and (b) such indemnity as may be required by the
Disbursing Agent to hold the Disbursing Agent harmless from any damages,
liabilities or costs incurred in
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treating such individual as a holder of an Existing Lender Agreement, Old
Subordinated Debenture or a Capital Stock certificate. Upon compliance with
this Section 7.8.2 by a holder of a Claim or an Interest evidenced by an
Existing Lender Agreement, Old Subordinated Debenture or Capital Stock
certificate, such holder shall, for all purposes under the Plan, be deemed to
have surrendered an Existing Lender Agreement, Old Subordinated Debenture or a
Capital Stock certificate, as applicable.
7.8.3 FAILURE TO SURRENDER CANCELED OLD SUBORDINATED DEBENTURES OR
CAPITAL STOCK CERTIFICATES
Any holder of an Old Subordinated Debenture or Capital Stock
certificate that fails to surrender or be deemed to have surrendered such Old
Subordinated Debenture or Capital Stock certificate within one year after the
Effective Date shall have its claim for a distribution pursuant to the Plan on
account of such Old Subordinated Debenture or Capital Stock certificate
discharged and shall be forever barred from asserting any such claim against
Reorganized PCL or their respective property. In such cases, any Cash or New
Securities held for distribution on account of such Claim or Interest shall be
disposed of pursuant to the provisions set forth in Section 7.3.2 above.
ARTICLE VIII.
PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND DISPUTED INTERESTS
8.1 PROSECUTION OF OBJECTIONS TO CLAIMS AND INTERESTS
8.1.1 PRIOR TO THE EFFECTIVE DATE
After the Confirmation Date and through the Effective Date, only the
Debtors and Reorganized PCL shall have the authority to
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File objections, settle, compromise, withdraw or litigate to judgment
objections to Claims and Interests. From and after the Confirmation Date, the
Debtors and Reorganized PCL may settle or compromise any Disputed Claim or
Disputed Interest without approval of the Bankruptcy Court.
8.1.2 AFTER THE EFFECTIVE DATE
After the Effective Date, the Official Committee or any duly
authorized representative thereof shall have authority to File objections,
settle, compromise, withdraw or litigate to judgment objections to Class 5
Claims. After the Effective Date, the Official Committee or its duly
authorized representative must give written notice to Reorganized PCL of any
proposed settlement of a Disputed Claim in Class 5. If Reorganized PCL does
not object within 5 business days after receipt of such notice, the Official
Committee or its representative may settle such Disputed Claim without approval
of the Bankruptcy Court. If Reorganized PCL objects to a proposed settlement,
the proposed settlement shall be ruled upon by the Bankruptcy Court. Any and
all fees, costs and expenses incurred by the Official Committee or its
representative in connection with objections, settlements or litigation of any
Disputed Claim under this Section 8.1.2 shall be paid on a monthly basis out of
the funds in the Class 5 Disbursement Account.
8.2 TREATMENT OF DISPUTED CLAIMS OR INTERESTS
8.2.1 NO PAYMENTS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS
Notwithstanding any other provisions of the Plan, no payments or
distributions shall be made on account of a Disputed
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Claim or a Disputed Interest until such Claim or Interest becomes an Allowed
Claim or Allowed Interest.
8.2.2 RESOLUTION OR ESTIMATION OF CLAIMS
Until the Effective Date, the Debtors or Reorganized PCL, and
after the Effective Date, the Official Committee with respect to Class 5
Claims, may, at any time, request that the Bankruptcy Court estimate any
contingent or unliquidated Claim pursuant to section 502(c) of the Bankruptcy
Code, irrespective of whether the applicable Debtor or Reorganized PCL has
previously objected to such Claim or whether the Bankruptcy Court has ruled on
any such objection. The Bankruptcy Court will retain jurisdiction to estimate
any contingent or unliquidated Claim at any time during litigation concerning
any objection to the Claim, including during the pendency of any appeal
relating to any such objection. If the Bankruptcy Court estimates any
contingent or unliquidated Claim, that estimated amount will constitute either
the Allowed Amount of such Claim or a maximum limitation on such Claim, as
determined by the Bankruptcy Court. If the estimated amount constitutes a
maximum limitation on such Claim, the applicable Debtor or Reorganized PCL or
the Official Committee, as the case may be, may elect to pursue any
supplemental proceedings to object to any ultimate payment on account of such
Claim. All of these Claims objection, estimation and resolution procedures are
cumulative and not necessarily exclusive of one another. In addition to
seeking estimation of Claims as provided in this Section 8.2.2, the Debtors or
Reorganized PCL or the Official Committee pursuant to Section 8.1.2 may resolve
or adjudicate any Disputed Claim in the
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manner in which the amount of such Claim and the rights of the holder of such
Claim would have been resolved or adjudicated if the applicable Chapter 11 Case
had not been commenced. Claims may be subsequently compromised, settled,
withdrawn or resolved by the applicable Debtor or Reorganized PCL or the
Official Committee pursuant to Section 8.1 above.
8.3 DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS OR INTERESTS ONCE THEY ARE
ALLOWED
On each Distribution Date, the Disbursing Agent shall make all
distributions on account of any Disputed Claim or Disputed Interest that has
become an Allowed Claim or Allowed Interest during the preceding quarter.
After the Effective Date, costs incurred by the Disbursing Agent with respect
to distributions on account of Class 5 Claims shall be paid from the funds in
the Class 5 Disbursement Account. Such distributions shall be made pursuant to
the provisions of the Plan governing the applicable Class. Holders of Disputed
Claims or Disputed Interests that are ultimately allowed shall also be entitled
to receive, on the basis of the amount ultimately allowed: (1) any dividends
or other payments made on account of New Securities held pending distribution
and (2) a Pro Rata share of the Reorganization Investment Yield.
8.4 PROVISIONS REGARDING THE OFFICIAL COMMITTEE
8.4.1 DISSOLUTION OF THE OFFICIAL COMMITTEE AND FORMATION OF THE
POST-EFFECTIVE DATE COMMITTEE
On the Effective Date, the Official Committee shall be dissolved and a
new committee shall be formed, comprised initially of those creditors who are
members of the Official
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Committee on the Effective Date. In the event any member of the Official
Committee resigns subsequent to the Effective Date, a replacement member may
be appointed by majority vote of the remaining members of the Official
Committee.
8.4.2 POST-EFFECTIVE DATE COMMITTEE PROCEDURES
A majority of the Official Committee shall constitute a quorum.
Meetings of the Official Committee shall be called by its Chairperson or
counsel upon such notice and in such manner as the Chairperson may deem
advisable. The Official Committee shall function by decisions made by a
majority of its members in attendance at any meeting. Any member of the
Official Committee may act by proxy, and through the designated members set
forth above or through such other representative, including counsel, as may be
designated by such member in writing to the Chairperson. The Official
Committee shall prescribe its own rules of procedure, and may adopt by-laws or
enter agreements, as may be deemed appropriate by the Official Committee, to
further the performance of the Official Committee's and its members' and
representatives' duties under this Plan.
8.4.3 COMMITTEE AS REPRESENTATIVE OF CREDITORS
The Official Committee shall constitute a representative of creditors
formed for the purpose, inter alia, of monitoring and enforcing the
implementation of the Plan for the benefit of holders of Class 5 Claims,
including the prosecution of objections to distributions to holders of Class 5
Claims under the Plan and objections to Claims.
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8.4.4 LIABILITY OF POST-EFFECTIVE DATE COMMITTEE
Neither the Official Committee nor any of its members, designees,
counsel or accountants or any duly designated agent or representative of the
Official Committee shall be liable for the act, default, or misconduct of any
other member of the Official Committee, nor shall any member be liable for
anything other than such member's willful misconduct or fraud. None of the
Official Committee's members, designees, agent or representatives or their
respective employees, agents, or representatives or their respective employees,
shall incur or be under any liability or obligation by reason of any act done
or omitted to be done, by any of the Official Committee's designees, agent or
representatives. The Official Committee may, in connection with the
performance of its functions, and in its sole and absolute discretion, consult
with its counsel, accountants or its agents, or with counsel, accountants or
agents for Reorganized PCL, and shall not be liable for anything done in
accordance with such advice or opinions. If the Official Committee determines
not to consult with counsel, accountants or agents, such determination shall
not be deemed to impose any liability on the Official Committee, or its members
and/or its designees.
8.4.5 COMMITTEE COMPENSATION
Except for the reimbursement of reasonable actual costs and expenses
(not including attorneys' fees) incurred in connection with their duties as
Official Committee members, the members of the Official Committee shall serve
without compensation. After the Effective Date, expenses incurred by members
of the Official Committee shall be paid from the Disbursement Fund.
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8.4.6 RETENTION OF PROFESSIONALS AND OTHERS BY THE OFFICIAL
COMMITTEE
After the Effective Date, the Official Committee shall have the right
to retain the services of attorneys, accountants and other agents which, in the
discretion of the Official Committee, are necessary to assist the Official
Committee in the performance of its duties, without the necessity of approval
of the Bankruptcy Court. After the Effective Date, the Official Committee may,
in its sole discretion, retain counsel or accountants which have, during the
course of the Chapter 11 Cases, previously been retained by the Official
Committee, and such prior retention shall not be deemed to create any conflict
of interest.
8.4.7 REVIEW OF OFFICIAL COMMITTEE PROFESSIONAL FEES
After the Effective Date, the Official Committee shall review and
authorize the payment of professional fees billed and expenses incurred on
behalf of the Official Committee in implementing the provisions of the Plan.
Payment of such professional fees and costs shall be made on a monthly basis
from the Disbursement Fund unless otherwise provided by the Official Committee.
The Bankruptcy Court shall retain jurisdiction over any dispute regarding the
reasonableness of such fees, but no fee application is required to be filed
with the Bankruptcy Court.
8.4.8 TERMINATION OF POST-EFFECTIVE DATE COMMITTEE
The Official Committee shall dissolve upon the completion of
distributions to holders of Allowed Class 5 Claims and the entry of a final
decree.
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8.4.9 MAINTENANCE OF BOOKS AND RECORDS
Reorganized PCL shall maintain all books and records with respect to
Class 5 Claims after the Effective Date, and the Official Committee shall be
permitted access to such books for inspection at reasonable times in connection
with the Official Committee's duties with respect to the prosecution of
objections to Claims as undertaken in the discretion of the Official Committee.
ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN
9.1 CONDITIONS TO CONFIRMATION
The Bankruptcy Court will not enter the Confirmation Order unless and
until each of the following conditions will have been satisfied or waived:
9.1.1 Prior to or concurrent with Confirmation, the Bankruptcy Court
has entered an order substantively consolidating the Chapter 11 Cases and
providing that for purposes of the Plan and the distributions thereunder, (a)
all Intercompany Claims by and among the Debtors will be deemed eliminated, (b)
all assets and liabilities of the Debtors will be merged or treated as though
they were merged, (c) any obligations of any Debtor and all guaranties thereof
executed by any Debtor will be deemed to be one obligation of Reorganized PCL,
(d) any Claims Filed or to be Filed in connection with any such obligation and
guaranties will be deemed one Claim against Reorganized PCL, (e) each Claim or
Interest filed in the Chapter 11 Case of any Debtor will be deemed filed
against Reorganized PCL in the consolidated
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Chapter 11 Case and (f) all transfers, disbursements and distributions made by
any Debtor will be deemed to have been made by all of the Debtors.
9.1.2 The Confirmation Order shall be in form and substance
satisfactory to the Proponents.
9.2 CONDITIONS TO EFFECTIVE DATE
The Plan shall not be consummated and the Effective Date shall not
occur unless and until each of the following conditions has been satisfied or
duly waived (if available) pursuant to Section 9.3 below:
9.2.1 The Confirmation Order shall authorize and direct the
Debtors and Reorganized PCL to take all actions necessary or
appropriate to enter into, implement and consummate the contracts,
instruments, releases, leases, indentures and other agreements or
documents created in connection with the Plan. The Confirmation Order
shall not be subject to a presently effective stay pending appeal.
9.2.2 Nu-Tech and Reorganized PCL shall have consummated
the Nu-Tech Stock Purchase.
9.2.3 A shareholders agreement between Nu-Tech and the
Senior Lenders in form and substance satisfactory to such parties
shall have been duly executed.
9.2.4 The MSI Acquisition shall have been consummated and
any order of the Bankruptcy Court with respect thereto shall have
become a Final Order.
9.3 WAIVER OF CONDITIONS
The conditions to Confirmation and the Effective Date, other than the
condition set forth above in Section 9.2.1 and 9.2.2,
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may be waived in whole or in part by the Proponents at any time, without
notice, an order of the Bankruptcy Court or any further action other than
proceeding to Confirmation and consummation of the Plan. The failure to
satisfy or waive any condition may be asserted by the Proponents regardless of
the circumstances giving rise to the failure of such condition to be satisfied
(including any action or inaction by the Proponents). The failure of the
Proponents to exercise any of the foregoing rights shall not be deemed a waiver
of any other rights and each such right shall be deemed an ongoing right that
may be asserted at any time.
9.4 EFFECT OF NONOCCURRENCE OF CONDITIONS TO EFFECTIVE DATE
Each of the conditions to consummation and the Effective Date must be
satisfied or duly waived, as provided above, within 90 days after the
Confirmation Date, which date may not be extended without further order of the
Bankruptcy Court. If each condition to the Effective Date has not been
satisfied or duly waived pursuant to Section 9.3 above, within 90 days after
the Confirmation Date or such later date as ordered by the Bankruptcy Court,
then upon motion by any party in interest made before the time that each of
such conditions has been satisfied or duly waived and upon notice to such
parties in interest as the Bankruptcy Court may direct, the Confirmation Order
shall be vacated by the Bankruptcy Court; provided, however, that,
notwithstanding the filing of such motion, the Confirmation Order may not be
vacated if each of the conditions to the Effective Date is either satisfied or
duly waived before the Bankruptcy Court enters an order granting such motion.
If the Confirmation Order is vacated pursuant to this Section 9.4, the Plan
shall be
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deemed null and void in all respects, including the discharge of Claims and
termination of Interests pursuant to section 1141 of the Bankruptcy Code and
the assumptions or rejections of executory contracts and unexpired leases
pursuant to Sections 6.1 and 6.2 above, and nothing contained in the Plan shall
(1) constitute a waiver or release of any Claims by or against, or any
Interests in, the Debtors or (2) prejudice in any manner the rights of the
Debtors.
ARTICLE X.
CONFIRMABILITY AND SEVERABILITY OF PLAN AND CRAMDOWN
10.1 CONFIRMABILITY AND SEVERABILITY OF A PLAN
The Proponents reserve the right to modify, revoke or withdraw the
Plan pursuant to Sections 13.2 and 13.3 below. A determination by the
Bankruptcy Court that the Plan is not confirmable pursuant to section 1129 of
the Bankruptcy Code shall not limit or affect the Proponents' ability to modify
the Plan to satisfy the confirmation requirements of section 1129 of the
Bankruptcy Code.
10.2 CRAMDOWN
The Proponents hereby request Confirmation of the Plan under section
1129(b) of the Bankruptcy Code if any Impaired Class does not accept the Plan
in accordance with section 1126 of the Bankruptcy Code. The Proponents reserve
the right to modify the Plan to the extent, if any, that Confirmation pursuant
to section 1129(b) of the Bankruptcy Code requires modification.
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ARTICLE XI.
DISCHARGE OF CLAIMS, TERMINATION OF
INTERESTS, INJUNCTIONS AND SUBORDINATION RIGHTS
11.1 DISCHARGE OF CLAIMS AND TERMINATION OF INTERESTS
11.1.1 Except as provided in the Plan or the Confirmation Order, the
rights afforded under the Plan and the treatment of Claims and Interests under
the Plan shall be in exchange for and in complete satisfaction, discharge and
release of all Claims and termination of all Interests, including any interest
accrued on Claims from the Petition Date. Except as provided in the Plan or
the Confirmation Order, Confirmation shall: (a) discharge the Debtors from all
Claims or other debts that arose before the Confirmation Date and all debts of
the kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code,
whether or not: (i) a proof of Claim based on such debt is Filed or deemed
Filed pursuant to section 501 of the Bankruptcy Code, (ii) a Claim based on
such debt is Allowed pursuant to section 502 of the Bankruptcy Code or (iii)
the holder of a Claim based on such debt has accepted the Plan; and (b)
terminate all Interests and other rights of equity security holders in the
Debtors.
11.1.2 As of the Confirmation Date, to the fullest extent permissible
under applicable law, except as provided in the Plan or the Confirmation Order,
all entities shall be precluded from asserting against the Debtors, Reorganized
PCL, Proponents, the Official Committee, their successors or their property,
any other or further claims, counterclaims, debts, rights, causes of action,
liabilities or equity interests relating to the Debtors based upon any act,
omission, transaction or other activity of
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any nature that occurred prior to the Confirmation Date. In accordance with
the foregoing, except as provided in the Plan or the Confirmation Order, the
Confirmation Order shall be a judicial determination of discharge of all such
Claims and other debts and liabilities against the Debtors and termination of
all such Interests and other rights of equity security holders in the Debtors,
pursuant to sections 524 and 1141 of the Bankruptcy Code, and such discharge
shall void any judgment obtained against any Debtor at any time, to the extent
that such judgment relates to a discharged Claim or terminated Interest.
11.2 INJUNCTIONS
11.2.1 INJUNCTION RELATED TO DISCHARGED CLAIMS AND TERMINATED
INTERESTS
Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability that is discharged or an Interest or other
right of an equity security holder that is terminated pursuant to the terms of
the Plan are permanently enjoined from taking any of the following actions
against the Debtors, Reorganized PCL or their respective property on account of
any such discharged Claims, debts or liabilities or terminated Interests or
rights: (a) commencing or continuing, in any manner or in any place, any
action or other proceeding; (b) enforcing, attaching, collecting or recovering
in any manner any judgment, award, decree or order; (c) creating, perfecting or
enforcing any lien or encumbrance; (d) asserting a setoff, right of subrogation
or recoupment of any kind against any debt, liability or obligation due to the
Debtors or Reorganized PCL;
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and (e) commencing or continuing, in any manner or in any place, any action
that does not comply with or is inconsistent with the provisions of the Plan.
11.2.2 RELEASED CLAIMS
As of the Effective Date, all entities that have held, currently hold
or may hold a claim, counterclaim, demand, debt, right, cause of action or
liability that is released pursuant to Section 5.5 are permanently enjoined
from taking any of the following actions on account of such released claims,
demands, debts, rights, causes of action or liabilities: (a) commencing or
continuing in any manner any action or other proceeding; (b) enforcing,
attaching, collecting or recovering in any manner any judgment, award, decree
or order; (c) creating, perfecting or enforcing any lien or encumbrance; (d)
asserting a setoff, right of subrogation or recoupment of any kind against any
debt, liability or obligation due to any released entity; and (e) commencing or
continuing any action, in any manner, in any place that does not comply with or
is inconsistent with the provisions of the Plan.
11.2.3 CONSENT TO INJUNCTION
By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim or Allowed Interest receiving distributions pursuant to the Plan
will be deemed to have specifically consented to the injunctions set forth in
this Section 11.2.
11.3 TERMINATION OF SUBORDINATION RIGHTS AND SETTLEMENT OF RELATED CLAIMS
AND CONTROVERSIES
11.3.1 The classification and manner of satisfying all Claims and
Interests under the Plan take into consideration all
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contractual, legal and equitable subordination rights, whether arising under
general principles of equitable subordination, section 510(c) of the Bankruptcy
Code or otherwise, that a holder of a Claim or Interest may have against other
Claim or Interest holders with respect to any distribution made pursuant to the
Plan. On the Confirmation Date, all contractual, legal or equitable
subordination rights that a holder of a Claim or Interest may have with respect
to any distribution to be made pursuant to the Plan shall be discharged and
terminated, and all actions related to the enforcement of such subordination
rights shall be permanently enjoined. Accordingly, distributions pursuant to
the Plan to holders of Allowed Claims and Allowed Interests shall not be
subject to payment to a beneficiary of such terminated subordination rights, or
to levy, garnishment, attachment or other legal process by any beneficiary of
such terminated subordination rights.
11.3.2 Pursuant to Bankruptcy Rule 9019 and in consideration for the
distributions and other benefits provided under the Plan, the provisions of
this Section 11.3 shall constitute a good faith compromise and settlement of
all claims or controversies relating to the termination of all contractual,
legal and equitable subordination rights that a holder of a Claim or an
Interest may have with respect to any Allowed Claim or Allowed Interest, or any
distribution to be made on account of an Allowed Claim or Allowed Interest.
The entry of the Confirmation Order shall constitute the Bankruptcy Court's
approval of the compromise or settlement of all such claims or controversies
and the Bankruptcy Court's finding that such compromise or settlement
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is in the best interests of the Debtors, Reorganized PCL and their respective
property and Claim and Interest holders, and is fair, equitable and reasonable.
11.4 LIMITATION OF LIABILITY IN CONNECTION WITH THE PLAN, DISCLOSURE
STATEMENT AND RELATED DOCUMENTS AND RELATED INDEMNITY
11.4.1 To the fullest extent permissible under applicable law, the
Proponents and their officers, directors, members, agents and representatives
shall neither have nor incur any liability to any entity, including,
specifically any holder of a Claim or Interest, for any act taken or omitted to
be taken in connection with or related to the formulation, preparation,
dissemination, implementation, Confirmation or consummation of the Plan, the
Disclosure Statement, the Confirmation Order or any contract, instrument,
release or other agreement or document created or entered into, or any other
act taken or omitted to be taken in connection with the Plan, the Disclosure
Statement or the Confirmation Order, including solicitation of acceptances of
the Plan.
11.4.2 Reorganized PCL shall indemnify each Proponent and their
officers, directors, members, agents and representatives, and shall hold each
Proponent and their officers, directors, members, agents and representatives
harmless from, and reimburse each Proponent for, any and all losses, costs,
expenses (including attorneys' fees and expenses), liabilities and damages
sustained by a Proponent and their officers, directors, members, agents and
representatives arising from any liability described in this Section 11.4.
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ARTICLE XII.
RETENTION OF JURISDICTION
12.1 Notwithstanding the entry of the Confirmation Order and the
occurrence of the Effective Date, the Bankruptcy Court shall retain such
jurisdiction over the Chapter 11 Cases after the Effective Date to the fullest
extent permitted by applicable law, including, without limitation, jurisdiction
to:
12.1.1 Allow, disallow, determine, liquidate, classify,
estimate or establish the priority or secured or unsecured status of
any Claim or Interest, including the resolution of any request for
payment of any Administrative Claim, the resolution of any objections
to the allowance or priority of Claims or Interests and the resolution
of any dispute as to the treatment necessary to Reinstate a Claim
pursuant to the Plan;
12.1.2 Grant or deny any applications for allowance of
compensation or reimbursement of expenses authorized pursuant to the
Bankruptcy Code or the Plan, for periods ending on or before the
Effective Date;
12.1.3 Resolve any matters related to the assumption or
rejection of any executory contract or unexpired lease to which a
Debtor is a party or with respect to which a Debtor may be liable, and
to hear, determine and, if necessary, liquidate any Claims arising
therefrom;
12.1.4 Ensure that distributions to holders of Allowed
Claims or Allowed Interests are accomplished pursuant to the
provisions of the Plan;
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12.1.5 Decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters and grant or deny
any applications involving the Debtors or Reorganized PCL that may be
pending on the Effective Date;
12.1.6 Enter such orders as may be necessary or appropriate
to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, indentures and other agreements or
documents created in connection with the Plan, the Disclosure
Statement or the Confirmation Order;
12.1.7 Resolve any cases, controversies, suits or disputes
that may arise in connection with the consummation, interpretation or
enforcement of the Plan or the Confirmation Order, including the
release and injunction provisions set forth in and contemplated by the
Plan and the Confirmation Order, or any entity's rights arising under
or obligations incurred in connection with the Plan or the
Confirmation Order;
12.1.8 Modify the Plan before or after the Effective Date
pursuant to section 1127 of the Bankruptcy Code or modify the
Disclosure Statement, the Confirmation Order or any contract,
instrument, release, indenture or other agreement or document created
in connection with the Plan, the Disclosure Statement or the
Confirmation Order; or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure
Statement, the Confirmation Order or any contract,
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instrument, release, indenture or other agreement or document created
in connection with the Plan, the Disclosure Statement or the
Confirmation Order, in such manner as may be necessary or appropriate
to consummate the Plan, to the extent authorized by the Bankruptcy
Code;
12.1.9 Issue injunctions, enter and implement other orders
or take such other actions as may be necessary or appropriate to
restrain interference by any entity with consummation, implementation
or enforcement of the Plan or the Confirmation Order;
12.1.10 Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified,
stayed, reversed, revoked or vacated;
12.1.11 Determine any other matters that may arise in
connection with or relating to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release, indenture or
other agreement or document created in connection with the Plan, the
Disclosure Statement or the Confirmation Order, except as otherwise
provided in the Plan; and
12.1.12 Enter an order concluding the Chapter 11 Cases.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
13.1 PAYMENT OF STATUTORY FEES
All fees payable pursuant to section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the
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Plan Confirmation hearing pursuant to section 1128 of the Bankruptcy Code,
shall be paid on or before the Effective Date.
13.2 MODIFICATION OF THE PLAN
Subject to the restrictions on modifications set forth in section 1127
of the Bankruptcy Code and any applicable notice requirements, the Proponents
reserve the right to alter, amend or modify the Plan before its substantial
consummation. All Plan modifications must be agreed upon by the Debtors,
Nu-Tech and the Senior Lenders.
13.3 REVOCATION OF THE PLAN
The Proponents reserve the right to revoke or withdraw the Plan as to
any or all of the Debtors prior to the Confirmation Date. If the Debtors
revoke or withdraw the Plan as to any or all of the Debtors, or if Confirmation
as to any or all of the Debtors does not occur, then, with respect to such
Debtors, the Plan shall be null and void in all respects, and nothing contained
in the Plan shall: (1) constitute a waiver or release of any Claims by or
against, or any Interests in, such Debtors; or (2) prejudice in any manner the
rights of such Debtors.
13.4 SEVERABILITY OF PLAN PROVISIONS
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, at the request of the Proponents, shall have the power to alter and
interpret such term or provision to make it valid or enforceable to the maximum
extent practicable, consistent with the original purpose of the term or
provision held to be invalid, void or unenforceable, and such term or provision
shall then be applicable as altered or
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interpreted. Notwithstanding any such holding, alteration or interpretation,
the remainder of the 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 Confirmation Order 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 pursuant to its terms.
13.5 SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred
to in the Plan shall be binding on, and shall inure to the benefit of, any
heir, executor, administrator, successor or assign of such entity.
13.6 EXHIBITS
Because certain of the Exhibits referred to in the Plan are extremely
voluminous, these Exhibits are not being served with copies of the Plan and the
Disclosure Statement. All Exhibits are available for review at the Document
Reviewing Centers
13.7 SERVICE OF DOCUMENTS ON THE DEBTORS OR REORGANIZED PCL
Any pleading, notice or other document required by the Plan or
Confirmation Order to be served on or delivered to the Debtors or Reorganized
PCL shall be sent by first class U.S. mail, postage prepaid, to:
PHYSICIANS CLINICAL LABORATORY, INC.
2495 Natomas Park Drive, Suite 600
Sacramento, California 95833
Attention: J. Marvin Feigenbaum and Richard M. Brooks
with copies to:
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JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Attention: David S. Kurtz, Esq. and
Timothy R. Pohl, Esq.
and
PACHULSKI STANG ZIEHL & YOUNG
Century City North Building
10100 Santa Monica Boulevard, Suite 1100
Los Angeles, California 90067
Attention: Richard Pachulski, Esq. and
Jeremy V. Richards, Esq.
and
MILBANK, TWEED, HADLEY & McCLOY
601 South Figueroa Street, 13th Floor
Los Angeles, California 90017-5735
Attention: David C.L. Frauman, Esq. and
Scot D. Tucker, Esq.
Los Angeles, California
February 11, 1997
Respectfully submitted,
PHYSICIANS CLINICAL LABORATORY, INC.,
a Delaware corporation, on behalf of
itself and each Subsidiary Debtor
By: /s/ John R. Burgis
----------------------------------
John R. Burgis
Chairman of the Board
NU-TECH BIO-MED, INC.
By: /s/ J. Marvin Feigenbaum
----------------------------------
J. Marvin Feigenbaum
Chief Executive Officer
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OAKTREE CAPITAL MANAGEMENT, LLC,
as general partner or investment
manager on behalf of certain funds
By: /s/ Richard Masson
----------------------------------
Richard Masson
Principal
By: /s/ Kenneth Liang
----------------------------------
Kenneth Liang
Managing Director & General Counsel
DDJ OVERSEAS CORP.
By: DDJ Capital Management, LLC
Pursuant to a Power of Attorney
By: /s/ Daniel G. Harmetz
----------------------------------
Daniel G. Harmetz
Member
THE COPERNICUS FUND, L.P.
By: DDJ Copernicus, LLC,
Its General Partner
By: /s/ Daniel G. Harmetz
----------------------------------
Daniel G. Harmetz
Member
BELMONT FUND, L.P.
By: Fidelity Management Trust
Company, pursuant to a Power of
Attorney for Fidelity
International Services Limited,
Managing General Partner
By: /s/ Robert Lawrence
----------------------------------
Robert Lawrence
Senior Vice President
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BELMONT CAPITAL PARTNERS, II, L.P.
By: Fidelity Capital Partners II
Corp., as General Partner
By: /s/ Robert Lawrence
----------------------------------
Robert Lawrence
Senior Vice President
CERBERUS PARTNERS, L.P.
By: /s/ Stephen Feinberg
----------------------------------
Stephen Feinberg
General Partner
COUNSEL FOR THE DEBTORS
/s/ Timothy R. Pohl
- -----------------------------------
David S. Kurtz
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker Drive
Chicago, Illinois 60601-1692
(312) 782-3939
Robert Dean Avery
Susanne Meline
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
(213) 489-3939
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW . . . . . . . 2
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.1 "Administrative Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.3 "Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1.4 "Allowed Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.5 "Allowed . . . Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.6 "Allowed Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.7 "Ballots" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1.8 "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.9 "Bankruptcy Court" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.10 "Bankruptcy Rules" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.11 "Bar Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.12 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.13 "CRRL" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.14 "Capital Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.15 "Cash" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.16 "Chapter 11 Cases" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.17 "Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.18 "Class" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.1.19 "Class 5 Disbursement Account" . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.20 "Confirmation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.21 "Confirmation Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.22 "Confirmation Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.23 "Debtors" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.24 "DIP Financing Facility" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.25 "Disbursing Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.26 "Disclosure Statement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1.27 "Disputed Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.28 "Disputed Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.1.29 "Distribution Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.30 "Distribution Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.31 "DLI" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.32 "Document Reviewing Centers" . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.33 "Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.34 "Employment Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.1.35 "Estate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.36 "Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.37 "Existing Lender Agreements" . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.38 "File," "Filed" or "Filing" . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.39 "Final Distribution Date" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.40 "Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.1.41 "Headley Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.42 "Impaired . . ." . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.43 "Indenture Trustee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.44 "Intercompany Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.45 "Interest" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.1.46 "Master Ballots" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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1.1.47 "MSI" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.48 "MSI Acquisition" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.49 "MSI Acquisition Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.50 "New Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.51 "New Common Stock Registration Rights Agreement" . . . . . . . . . . . . . . 10
1.1.52 "New Compensation Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.53 "New Credit Facility" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.1.54 "New Credit Facility Agreement" . . . . . . . . . . . . . . . . . . . . . . . 11
1.1.55 "New Credit Facility Documents" . . . . . . . . . . . . . . . . . . . . . . . 11
1.1.56 "New Indenture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.1.57 "New Intercreditor Agreement" . . . . . . . . . . . . . . . . . . . . . . . . 11
1.1.58 "New PCL Certificate of Incorporation" . . . . . . . . . . . . . . . . . . . 12
1.1.59 "New PCL Bylaws" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.1.60 "New Registration Rights Agreements" . . . . . . . . . . . . . . . . . . . . 12
1.1.61 "New Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.1.62 "New Senior Notes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.1.63 "New Senior Notes Registration Rights Agreement" . . . . . . . . . . . . . . 12
1.1.64 "New Unsecured Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.1.65 "New Warrant Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.66 "New Warrants" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.67 "Nu-Tech" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.68 "Nu-Tech Senior Debt Claim" . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.69 "Nu-Tech Stock Purchase" . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.70 "Official Committee" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.1.71 "Old Common Stock of . . ." . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1.72 "Old Indenture" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1.73 "Old Stock Options" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1.74 "Old Subordinated Debenture Claims" . . . . . . . . . . . . . . . . . . . . . 14
1.1.75 "Old Subordinated Debentures" . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1.76 "Old Warrants" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1.1.77 "Other Secured Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.78 "PCL" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.79 "PCL/Subsidiary Debtor Merger" . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.80 "PCL/Subsidiary Debtor Merger Agreement" . . . . . . . . . . . . . . . . . . 15
1.1.81 "Petition Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.82 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.83 "Priority Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.84 "Priority Tax Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
1.1.85 "Pro Rata" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.1.86 "Professional" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
1.1.87 "Provider Agreements" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.1.88 "QCL" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.1.89 "RRLGC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.1.90 "Reinstated" or "Reinstatement" . . . . . . . . . . . . . . . . . . . . . . . 18
1.1.91 "Reorganization Investment Yield" . . . . . . . . . . . . . . . . . . . . . . 18
1.1.92 "Reorganized PCL" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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1.1.93 "Schedules" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
1.1.94 "Secured Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.95 "Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.96 "Senior Debt Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.97 "Senior Lenders" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.98 "Stipulation of Amount and Nature of Claim" . . . . . . . . . . . . . . . . . 19
1.1.99 "Subsidiary Debtors" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.100 "Substantive Consolidation" . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.1.101 "Sutter" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.102 "Sutter Claims" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.103 "Sutter Guaranty" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.104 "Third-Party Disbursing Agent" . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.105 "Unimpaired Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.106 "Unsecured Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.107 "Voting Condition" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.1.108 "Voting Instructions" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.1.109 "Voting Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.2 Rules of Interpretation, Computation of Time and Governing Law . . . . . . . . . . . . . . 21
1.2.1 Rules of Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.2.2 Computation of Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
1.2.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE II. ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS . . . . . . . . . . . . . . . . . . . . . . . 22
2.1 Administrative Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.1.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.1.2 Bar Date for Administrative Claims . . . . . . . . . . . . . . . . . . . . . 23
2.1.3 Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.2 Priority Tax Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.3 DIP Financing Facility Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.4 Quarterly Fees to U.S. Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE III. CLASSIFICATION AND TREATMENT OF
CLASSIFIED CLAIMS AND INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.1 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 Classification and Treatment of Claims and Interests . . . . . . . . . . . . . . . . . . . 27
3.2.1 Class 1 - Priority Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.2 Class 2 - Senior Debt Claims . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2.3 Class 3 - Nu-Tech Senior Debt Claims . . . . . . . . . . . . . . . . . . . . 28
3.2.4 Class 4 - Other Secured Claims . . . . . . . . . . . . . . . . . . . . . . . 29
3.2.5 Class 5 - Unsecured Claims . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.2.6 Class 6 - Old Subordinated Debenture Claims . . . . . . . . . . . . . . . . . 30
3.2.7 Class 7 - Interests of holders of Old Common Stock in PCL . . . . . . . . . . 31
3.2.8 Class 8 - Interests of holders of Interests in Subsidiaries . . . . . . . . . 32
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3.2.9 Class 9 - Interests of holders of Old Stock Options and Old Warrants . . . . 32
3.3 Special Provision Regarding Unimpaired Claims . . . . . . . . . . . . . . . . . . . . . . . 33
3.4 Accrual of Postpetition Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IV. ACCEPTANCE OR REJECTION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.1 Voting Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2 Acceptance by Impaired Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.3 Presumed Acceptance of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.4 Deemed Non-Acceptance of Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.5 Non-Consensual Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V. MEANS FOR IMPLEMENTATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.1 Continued Corporate Existence, Vesting of Assets in Reorganized PCL, The PCL/Subsidiary
Debtor Merger and Preservation of Rights of Action . . . . . . . . . . . . . . . . . . . . 35
5.1.1 Continued Corporate Existence and Vesting of Assets . . . . . . . . . . . . . 35
5.1.2 The PCL/Subsidiary Debtor Merger . . . . . . . . . . . . . . . . . . . . . . 36
5.1.3 Preservation of Rights of Action . . . . . . . . . . . . . . . . . . . . . . 37
5.2 The Other Restructuring Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2.1 Cancellation of Capital Stock, Existing Lender Agreements and Old
Indenture; Surrender of Securities and Other Documentation . . . . . . . . . 37
5.2.2 Reorganized PCL's Obligations Under the Plan . . . . . . . . . . . . . . . . 38
5.2.3 Issuance of Securities and Related Documentation . . . . . . . . . . . . . . 38
5.2.4 Establishment of New Credit Facility . . . . . . . . . . . . . . . . . . . . 39
5.3 Corporate Governance, Directors and Officers, Employment-Related Agreements and
Compensation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.3.1 Reorganized PCL Certificate of Incorporation and Bylaws . . . . . . . . . . . 39
5.3.2 Reorganized PCL Directors and Officers . . . . . . . . . . . . . . . . . . . 40
5.3.3 Employment, Retirement, Indemnification and Other Agreements and Incentive
Compensation Programs; Retiree Health and Welfare Benefits . . . . . . . . . 41
5.3.4 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.4 Sources of Cash for Plan Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.5 Releases and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.5.1 Releases by the Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.5.2 Releases by Holders of Claims or Interests . . . . . . . . . . . . . . . . . 44
5.5.2.1 Holders of Claims . . . . . . . . . . . . . . . . . . . . . 44
5.5.2.2 Holders of Interests . . . . . . . . . . . . . . . . . . . . 45
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5.5.2.3 Release of Official Committee . . . . . . . . . . . . . . . 46
5.5.2.4 Settlement of Sutter Claims . . . . . . . . . . . . . . . . 47
5.5.3 Injunction Related to Releases . . . . . . . . . . . . . . . . . . . . . . . 47
5.5.4 Limitation on Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.6 Release of Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.7 Effectuating Documents; Further Transactions; Exemption from Certain Transfer Taxes . . . . 48
ARTICLE VI. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES . . . . . . . . . . . . . . . . . . . 49
6.1 Executory Contracts and Unexpired Leases to be Assumed or Assumed and Assigned . . . . . . 49
6.1.1 Assumptions Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.1.2 Assignments Related to the PCL/Subsidiary Debtor Merger . . . . . . . . . . . 50
6.1.3 Cure of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.2 Executory Contracts and Unexpired Leases to be Rejected; Bar Date for Rejection Damages . . 51
6.2.1 Rejection Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.2.2 Bar Date for Rejection Damages . . . . . . . . . . . . . . . . . . . . . . . 52
6.3 Special Executory Contract and Unexpired Lease Matters . . . . . . . . . . . . . . . . . . 52
6.3.1 Existing Employment, Retirement and Other Agreements and Incentive
Compensation Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.3.2 Indemnification Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.4 Executory Contracts and Unexpired Leases Entered Into and Other Obligations Incurred
After the Petition Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.1 Distributions for Claims and Interests Allowed as of the Effective Date . . . . . . . . . . 53
7.2 Distributions by Disbursing Agents and the Indenture Trustee . . . . . . . . . . . . . . . 55
7.2.1 Disbursing Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.2.1.1 Third-Party Disbursing Agent Provisions . . . . . . . . . . 55
7.2.1.2 Investment of Cash by the Third-Party Disbursing Agent . . . 56
7.2.2 Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.3 Delivery of Distributions and Undeliverable or Unclaimed Distributions . . . . . . . . . . 56
7.3.1 Delivery of Distributions in General . . . . . . . . . . . . . . . . . . . . 56
7.3.2 Undeliverable Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.3.2.1 Holding and Investment of Undeliverable Distributions . . . 56
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7.3.2.2 After Distributions Become Deliverable . . . . . . . . . . . 57
7.3.2.3 Failure to Claim Undeliverable Distributions . . . . . . . . 58
7.4 Distribution Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.5 Means of Cash Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.6 Timing and Calculation of Amounts to be Distributed . . . . . . . . . . . . . . . . . . . . 59
7.6.1 In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.6.2 Distributions to Holders of Claims in Class 5 . . . . . . . . . . . . . . . . 60
7.6.3 Distributions of New Common Stock . . . . . . . . . . . . . . . . . . . . . . 62
7.6.4 Distributions of New Senior Notes . . . . . . . . . . . . . . . . . . . . . . 62
7.6.5 Distributions of New Warrants . . . . . . . . . . . . . . . . . . . . . . . . 63
7.6.6 Compliance with Tax Requirements . . . . . . . . . . . . . . . . . . . . . . 63
7.7 Setoffs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.8 Surrender of Cancelled Debt Instruments or Securities . . . . . . . . . . . . . . . . . . . 65
7.8.1 Old Subordinated Debentures and Capital Stock Certificates . . . . . . . . . 65
7.8.2 Lost, Stolen, Mutilated or Destroyed Existing Lender Agreements, Old
Subordinated Debentures or Capital Stock Certificates . . . . . . . . . . . . 66
7.8.3 Failure to Surrender Canceled Old Subordinated Debentures or Capital Stock
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE VIII. PROCEDURES FOR RESOLVING DISPUTED CLAIMS AND DISPUTED INTERESTS . . . . . . . . . . . . . . 67
8.1 Prosecution of Objections to Claims and Interests . . . . . . . . . . . . . . . . . . . . . 67
8.1.1 Prior to the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.1.2 After the Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.2 Treatment of Disputed Claims or Interests . . . . . . . . . . . . . . . . . . . . . . . . . 68
8.2.1 No Payments on Account of Disputed Claims or Interests . . . . . . . . . . . 68
8.2.2 Resolution or Estimation of Claims . . . . . . . . . . . . . . . . . . . . . 69
8.3 Distributions on Account of Disputed Claims or Interests Once They Are Allowed . . . . . . 70
8.4 Provisions Regarding the Official Committee . . . . . . . . . . . . . . . . . . . . . . . . 70
8.4.1 Dissolution of the Official Committee and Formation of the Post-Effective
Date Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.4.2 Post-Effective Date Committee Procedures . . . . . . . . . . . . . . . . . . 71
8.4.3 Committee As Representative of Creditors . . . . . . . . . . . . . . . . . . 71
8.4.4 Liability of Post-Effective Date Committee . . . . . . . . . . . . . . . . . 72
</TABLE>
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<PAGE> 98
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
8.4.5 Committee Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.4.6 Retention of Professionals and Others by the Official Committee . . . . . . . 73
8.4.7 Review of Official Committee Professional Fees . . . . . . . . . . . . . . . 73
8.4.8 Termination of Post-Effective Date Committee . . . . . . . . . . . . . . . . 73
8.4.9 Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN . . . . . . . . . . . . . 74
9.1 Conditions to Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9.2 Conditions to Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.3 Waiver of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.4 Effect of Nonoccurrence of Conditions to Effective Date . . . . . . . . . . . . . . . . . . 76
ARTICLE X. CONFIRMABILITY AND SEVERABILITY OF PLAN AND CRAMDOWN . . . . . . . . . . . . . . . . . . . 77
10.1 Confirmability and Severability of a Plan . . . . . . . . . . . . . . . . . . . . . . . . . 77
10.2 Cramdown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE XI. DISCHARGE OF CLAIMS, TERMINATION OF INTERESTS, INJUNCTIONS AND SUBORDINATION RIGHTS . . . . 78
11.1 Discharge of Claims and Termination of Interests . . . . . . . . . . . . . . . . . . . . . 78
11.2 Injunctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.2.1 Injunction Related to Discharged Claims and Terminated Interests . . . . . . 79
11.2.2 Released Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.2.3 Consent to Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.3 Termination of Subordination Rights and Settlement of Related Claims and Controversies . . 80
11.4 Limitation of Liability in Connection with the Plan, Disclosure Statement and Related
Documents and Related Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
ARTICLE XII. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XIII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
13.1 Payment of Statutory Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
13.2 Modification of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.3 Revocation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.4 Severability of Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
13.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.6 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
13.7 Service of Documents on the Debtors or Reorganized PCL . . . . . . . . . . . . . . . . . . 87
</TABLE>
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<PAGE> 99
TABLE OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NAME
------- ----
<S> <C>
A Reorganized PCL Certificate of Incorporation*
B Reorganized PCL Bylaws*
C PCL/Subsidiary Debtor Merger Agreement*
D List of Senior Lenders
E List of Existing Lender Agreements
F(1) New Notes Registration Rights Agreement*
F(2) New Common Stock Registration Rights Agreement*
G New Warrant Agreement*
H Indenture for New Senior Notes*
I Exclusive Schedule of Executory Contracts and Unexpired Leases to
be Rejected
J Summaries of New Compensation Plans
K List of New Employment, Retirement, Indemnification and Other
Agreements and Incentive Compensation Programs That Will Remain in
Effect as of the Effective Date
L Non-Exclusive List of Retained Claims, Rights and Causes of Action
</TABLE>
___________________
* These Exhibits will not be distributed to creditors or shareholders
with the Plan. All such Exhibits are summarized in the Disclosure
Statement. In addition, all such Exhibits have been filed with the
Court and are available upon request to counsel for the Debtors. In
addition, all such Exhibits are available for review at the Document
Reviewing Centers.
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<PAGE> 1
EXHIBIT 2.2
David S. Kurtz
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Craig S. Gatarz
Susanne Meline, Bar No. 169177
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
Telephone: (213) 489-3939
Attorneys for Debtors and
Debtors in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
-- --
)
Debtors. ) FINDINGS OF FACT, CONCLUSIONS
) OF LAW AND ORDER CONFIRMING
) SECOND AMENDED PLAN OF
) REORGANIZATION OF PHYSICIANS
) CLINICAL LABORATORY, INC. AND
) ITS AFFILIATED DEBTORS
)
) Date: April 18, 1997
) Time: 2:00 p.m.
) Place:Courtroom 303
) 21041 Burbank Blvd.
- ------------------------------------------ Woodland Hills, CA 91367
)
<PAGE> 2
Physicians Clinical Laboratory, Inc., Quantum Clinical
Laboratories, Inc., Diagnostic Laboratories, Inc., Regional Reference
Laboratory Governing Corporation and California Regional Reference Laboratory,
debtors and debtors in possession (collectively, the "Debtors"), having filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code, 11
U.S.C. Sections 101-1330 (the "Bankruptcy Code"), on November 8, 1996
(the "Petition Date"); the Debtors, Nu-Tech Bio-Med, Inc. ("Nu-Tech") and the
Senior Lenders,1 as proponents, having filed on February 11, 1997 the Second
Amended Plan of Reorganization of Physicians Clinical Laboratory, Inc. and its
Affiliated Debtors (the "Plan") and the Disclosure Statement Pursuant to
Section 1125 of the Bankruptcy Code With Respect to the Second Amended Plan of
Reorganization of Physicians Clinical Laboratory, Inc. and Its Affiliated
Debtors (the "Disclosure Statement"); the Court having entered an Order, dated
February 11, 1997, (1) Approving Disclosure Statement; (2) Approving
Solicitation Package; (3) Approving Form and Manner of Notice of the
Confirmation Hearing and of Related Issues; (4) Establishing Record Dates and
Approving Procedures for Distribution of Solicitation Packages; (5) Approving
Forms of Ballots; (6) Establishing Last Date for Receipt of Ballots; (7)
Establishing Procedures for Vote Tabulation; and (8) Establishing Deadline and
Procedures for Filing Objections to Confirmation of the Plan (the "Disclosure
Statement Order"); the Debtors having distributed the Plan and the Disclosure
Statement to all holders of Impaired Claims against, and Interests in, the
Debtors together with a solicitation of votes to accept or reject the Plan on
February 20, 1997, all in accordance with the terms of the Disclosure Statement
Order; the Declaration of Logan & Company, Inc. ("Logan") Certifying (i) the
Methodology for the Tabulation of, and (ii) Results of Voting With Respect
- ----------
1 Unless otherwise specified, capitalized terms and phrases used herein
have the meanings assigned to them in the Plan (as hereinafter
defined). The rules of interpretation set forth in Section 1.2 of the
Plan shall apply to these Findings of Fact, Conclusions of Law and
Order (this "Confirmation Order"). In accordance with Section III.A
of this Confirmation Order, if there is any direct conflict between
the terms of the Plan and this Confirmation Order, the terms of this
Confirmation Order shall control.
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<PAGE> 3
to the Debtors' Second Amended Plan of Reorganization (the "Voting
Declaration") having been filed with the Court on April 11, 1997; the Court
having established in the Disclosure Statement Order April 18, 1997 at 2:00
p.m. as the date and time of a hearing pursuant to section 1129 of the
Bankruptcy Code to consider Confirmation of the Plan (the "Confirmation
Hearing"); certain Certificates of Logan, dated March 3, 1997, having been
filed with respect to the mailing of notice of the Confirmation Hearing to
parties in interest, in accordance with the Disclosure Statement Order; an
Affidavit of Publication by The Wall Street Journal, dated March 3, 1997,
having been filed with respect to the publication of notice of the Confirmation
Hearing in the national edition of The Wall Street Journal, in accordance with
the Disclosure Statement Order; the Debtors having submitted the Declaration of
Richard M. Brooks in support of Confirmation of the Plan; this Court having
reviewed the Plan, the Disclosure Statement, the Debtors' Memorandum of Law in
Support of Confirmation of Second Amended Plan of Reorganization of Physicians
Clinical Laboratory, Inc. and Its Affiliated Debtors, filed on April 11, 1997
(the "Confirmation Memorandum"), the objection of the Securities and Exchange
Commission to Confirmation, filed on March 20, 1997 (the "SEC Objection"), and
all other filed objections and responses to, and statements and comments
regarding, Confirmation; this Court having heard the statements of counsel in
support of Confirmation at the Confirmation Hearing; this Court having
considered all testimony presented and evidence admitted by affidavits or
otherwise at the Confirmation Hearing; this Court having taken judicial notice
of the papers and pleadings on file in the above-captioned Chapter 11 Cases;
and it appearing to this Court that (a) notice of the Confirmation Hearing and
the opportunity of any party in interest to object to Confirmation were
adequate and appropriate as to all parties to be affected by the Plan and the
transactions contemplated thereby and (b) the legal and factual bases set forth
in the Confirmation Memorandum and presented at the Confirmation Hearing
establish just cause
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<PAGE> 4
for the relief granted herein; this Court hereby makes the following Findings
of Fact, Conclusions of Law and Order:2
I. FINDINGS OF FACT
A. JURISDICTION AND VENUE.
On the Petition Date, the Debtors commenced the Chapter 11
Cases by filing voluntary petitions for relief under chapter 11 of the
Bankruptcy Code. The Debtors were and are qualified to be debtors under
section 109 of the Bankruptcy Code. The Debtors' principal place of business
is California. Accordingly, venue in the Central District of California was
proper as of the Petition Date and continues to be proper.
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE
BANKRUPTCY CODE.
1. SECTION 1129(A)(1) -- COMPLIANCE OF THE PLAN WITH
APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE.
The Plan complies with all applicable provisions of the
Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code,
including, without limitation, sections 1122 and 1123. Pursuant to sections
1122(a) and 1123(a)(1) of the Bankruptcy Code, Article III of the Plan
designates Classes of Claims and Interests, other than Administrative Claims
and Priority Tax Claims.3 As required by section 1122(a) of the Bankruptcy
Code, each Class of Claims and Interests contains only Claims or Interests that
are substantially similar to the other Claims or Interests within that Class.
Pursuant to sections 1123(a)(2) and (3) of the Bankruptcy
Code, Article III of the Plan specifies all Claims and Interests that are not
impaired and specifies the treatment of
- ----------
2 This Confirmation Order constitutes the Court's findings of fact and
conclusions of law under Fed. R. Civ. P. 52, as made applicable by
Rules 7052 and 9014 of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules"). Any and all findings of fact shall constitute
findings of fact even if they are stated as conclusions of law, and
any and all conclusions of law shall constitute conclusions of law
even if they are stated as findings of fact.
3 Administrative Claims and Priority Tax Claims are not required to be
designated pursuant to section 1123(a)(1) of the Bankruptcy Code. 11
U.S.C. # 1123(a)(1).
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<PAGE> 5
all Claims and Interests that are impaired. Pursuant to section 1123(a)(4) of
the Bankruptcy Code, Article III of the Plan also provides the same treatment
for each Claim or Interest within a particular Class.
Pursuant to section 1123(a)(5) of the Bankruptcy Code, the
Plan provides adequate means for the Plan's implementation. Reorganized PCL
will have, immediately upon the effectiveness of the Plan, sufficient cash to
make all payments required to be made on the Effective Date pursuant to the
terms of the Plan. Moreover, Article V and various other provisions of the
Plan specifically provide adequate means for the Plan's implementation,
including, without limitation: (a) the continued corporate existence of PCL;
(b) the PCL/Subsidiary Debtor Merger; (c) the cancellation of the Capital
Stock, the Existing Lender Agreements, the Old Indenture, the Old Subordinated
Debentures and certain other agreements; (d) the issuance and distribution of
the New Securities in exchange for Claims and Interests; (e) the appointment of
the Disbursing Agent and the Third Party Disbursing Agent for the purpose of
making certain distributions under the Plan; and (f) the adoption of the New
PCL Certificate of Incorporation and the New PCL Bylaws.
Section 5.3.1 of the Plan provides for the inclusion in the
New PCL Certificate of Incorporation of all provisions required to be included
in the charter of Reorganized PCL under section 1123(a)(6) of the Bankruptcy
Code. As of the Effective Date, Reorganized PCL will have outstanding only one
class of capital stock with voting power. Accordingly, the Plan satisfies the
requirement of section 1123(a)(6) of the Bankruptcy Code that a plan of
reorganization provides for an appropriate distribution of voting power among
the classes of securities possessing voting power.
The Plan provides that the initial directors of Reorganized
PCL will consist of five directors, three of whom will be appointed by Nu-Tech
and two of whom will be appointed by the Senior Lenders. Subject to any
requirement of Bankruptcy Court approval pursuant to section 1129(a)(5) of the
Bankruptcy Code, the initial chief executive officer and chairman of
Reorganized PCL shall be J. Marvin Feigenbaum. The identities of the initial
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<PAGE> 6
members of the board of directors were disclosed at or prior to the
Confirmation Hearing and are set forth on Exhibit A hereto. The members of the
initial board of directors will serve from and after the Effective Date until
the shareholder meeting for the year in which his or her term expires and until
his or her successor is duly elected or appointed and qualified or until his or
her earlier death, resignation, retirement, disqualification or removal in
accordance with the terms of the certificate of incorporation and bylaws of
Reorganized PCL.
The identities of the initial officers of Reorganized PCL were
disclosed at or prior to the Confirmation Hearing and are set forth on Exhibit
B hereto. Each such officer will serve from and after the Effective Date until
his or her successor is elected or appointed and qualified in accordance with
the terms of the certificate of incorporation and bylaws of Reorganized PCL,
any applicable employment agreement and applicable corporation or similar law,
or until the earlier death, resignation, retirement, disqualification or
removal of any such officer.
The initial officers and directors of Reorganized PCL have
been selected in a manner consistent with the interests of the holders of
Claims and Interests and public policy.
Article III of the Plan impairs or leaves unimpaired, as the
case may be, each Class of Claims and Interests. In accordance with section
1123(b)(2) of the Bankruptcy Code, Article VI of the Plan provides for the
assumption, assumption and assignment or rejection of the executory contracts
and unexpired leases of the Debtors that have not been previously assumed,
assumed and assigned or rejected pursuant to section 365 of the Bankruptcy Code
and that are not the subject of any motion regarding assumption, assumption and
assignment or rejection that is pending as of the Confirmation Date.
Section 5.1.3 of the Plan provides that, except as provided in
the Plan or in any contract, instrument, release, indenture or other agreement
entered into in connection with the Plan, Reorganized PCL will retain and may
enforce any claims, demands, rights and causes of action that any Debtor or
Estate may hold against any entity, including claims,
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<PAGE> 7
demands, rights or causes of action set forth on Exhibit L to the Plan.
Reorganized PCL or its successors may pursue such retained claims, demands,
rights or causes of action, as appropriate, in accordance with the best
interests of Reorganized PCL or such successors.
The Plan includes additional appropriate provisions that are
not inconsistent with applicable provisions of the Bankruptcy Code, including:
(1) the provisions of Article VI of the Plan governing the assumption,
assumption and assignment or rejection of executory contracts and unexpired
leases (including the provisions of Section 6.2.1 of the Plan allowing the
Debtors to amend Exhibit I to the Plan through and including the Effective
Date); (2) the provisions of Article VII of the Plan governing distributions on
account of Allowed Claims and Interests, particularly as to the timing and
calculation of amounts to be distributed; (3) the provisions of Article VIII of
the Plan establishing procedures for resolving Disputed Claims and making
distributions on account of such Disputed Claims once resolved; and (4) the
provisions of Article XII of the Plan regarding retention of jurisdiction by
the Court over certain matters subsequent to the Effective Date.
2. SECTION 1129(A)(2) -- COMPLIANCE WITH APPLICABLE
PROVISIONS OF THE BANKRUPTCY CODE.
The Debtors, Nu-Tech and the Senior Lenders, as proponents of
the Plan, complied with all applicable provisions of the Bankruptcy Code as
required by section 1129(a)(2) of the Bankruptcy Code, including, without
limitation, sections 1125 and 1126 and Bankruptcy Rules 3017 and 3018. The
Disclosure Statement and the procedures by which the Ballots (and Master
Ballots) for acceptance or rejection of the Plan were solicited and tabulated,
were fair, properly conducted and in accordance with sections 1125 and 1126 of
the Bankruptcy Code, Bankruptcy Rules 3017 and 3018, the Disclosure Statement
Order and applicable nonbankruptcy law.
-6-
<PAGE> 8
3. SECTION 1129(A)(3) -- PROPOSAL OF PLAN IN GOOD FAITH.
The Proponents proposed the Plan in good faith and not by any
means forbidden by law. In determining that the Plan has been proposed in good
faith, the Court has examined the totality of the circumstances surrounding the
formulation of the Plan. Based upon the evidence presented at the Confirmation
Hearing, the Court finds and concludes that the Plan has been proposed with the
legitimate and honest purpose of reorganizing the business affairs of each of
the Debtors and maximizing the returns available to creditors and Interest
holders. Consistent with the overriding purpose of chapter 11 of the
Bankruptcy Code, the Plan is designed to allow the Debtors to reorganize by
providing them with a capital structure that will allow them to satisfy their
obligations with sufficient liquidity and capital resources and to fund
necessary capital expenditures and otherwise conduct their businesses.
Moreover, the Plan itself and the arms-length negotiations among the Debtors,
Nu-Tech, the Senior Lenders, the Official Committee and the Debtors' other
major creditor constituencies leading to the Plan's formulation provide
independent evidence of the good faith of the Proponents in proposing the Plan.
4. SECTION 1129(A)(4) -- BANKRUPTCY COURT APPROVAL OF
CERTAIN PAYMENTS AS REASONABLE.
Section 2.1.3 of the Plan provides that Professionals or other
entities requesting compensation or reimbursement of expenses pursuant to
sections 327, 328, 330, 331, 503(b) and 1103 of the Bankruptcy Code for
services rendered before the Effective Date (including compensation requested
pursuant to section 503(b)(3) and (4) of the Bankruptcy Code by any
Professional or other entity for making a substantial contribution in any
Chapter 11 Case) must file and serve an application for final allowance of
compensation and reimbursement of expenses no later than 30 days after the
Effective Date, which the Court will review for reasonableness under sections
328 and 330 of the Bankruptcy Code and any applicable case law. Pursuant to a
prior order entered in the Chapter 11 Cases, the Court has authorized the
monthly payment of 85% of the fees and 100% of the expenses of
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<PAGE> 9
Professionals incurred in connection with the Chapter 11 Cases. All such fees
and expenses, however, remain subject to final review for reasonableness by the
Court.
5. SECTION 1129(A)(5) -- DISCLOSURE OF IDENTITY AND
AFFILIATIONS OF PROPOSED MANAGEMENT, COMPENSATION OF
INSIDERS AND CONSISTENCY OF MANAGEMENT PROPOSALS WITH
THE INTERESTS OF CREDITORS AND PUBLIC POLICY.
Pursuant to section 1129(a)(5) of the Bankruptcy Code, the
Debtors have disclosed the identity and affiliations of the proposed directors
and officers of Reorganized PCL, the manner in which such directors and
officers were chosen and the identity and compensation of insiders who will be
employed or retained by Reorganized PCL. The appointment or continuance of the
proposed directors and officers is consistent with the interests of the holders
of Claims and Interests and public policy.
6. SECTION 1129(A)(B) -- APPROVAL OF RATE CHANGE.
The Debtors' current businesses do not involve the
establishment of rates over which any regulatory commission has or will have
jurisdiction after Confirmation.
7. SECTION 1129(A)(7) -- BEST INTERESTS OF CREDITORS AND
INTEREST HOLDERS.
With respect to each Impaired Class of Claims or Interests,
each holder of a Claim or Interest in such Class has accepted the Plan or will
receive or retain under the Plan on account of such Claim or Interest property
of a value, as of the Effective Date, that is not less than the amount such
holder would receive or retain if the Debtors were liquidated on the Effective
Date under chapter 7 of the Bankruptcy Code.
8. SECTION 1129(A)(8) -- ACCEPTANCE OF THE PLAN BY EACH
IMPAIRED CLASS.
Pursuant to sections 1124 and 1126 of the Bankruptcy Code, (a)
as indicated in Article III of the Plan, Classes 1, 4 and 8 are unimpaired4 and
(b) as indicated in the Voting Declaration, all Impaired Classes entitled to
vote have accepted the Plan. Because the Plan
- ----------
4 The provisions of the Plan with respect to the holders of the
Unimpaired Claims are fair and appropriate. The Plan does not require
the holders of Unimpaired Claims to file proofs of Claim with this
Court and does not discharge such Unimpaired Claims.
-8-
<PAGE> 10
provides that the holders of Class 9 Interests will not receive or retain any
property on account of these Interests, Class 9 is deemed not to have accepted
the Plan pursuant to section 1126(g) of the Bankruptcy Code. Notwithstanding
the lack of compliance of Class 9 with section 1129(a)(8) of the Bankruptcy
Code, the Plan is confirmable because, as more fully set forth in Section
I.B.14 of this Confirmation Order, the Plan satisfies the requirements section
1129(b)(1) of the Bankruptcy Code with respect to Class 9.
9. SECTION 1129(A)(9) -- TREATMENT OF CLAIMS ENTITLED TO
PRIORITY PURSUANT TO SECTION 507(A) OF THE BANKRUPTCY
CODE.
The Plan provides for treatment of Administrative Claims,
Priority Tax Claims and Claims entitled to priority pursuant to sections
507(a)(3)-(6) of the Bankruptcy Code in the manner required by section
1129(a)(9) of the Bankruptcy Code.
10. SECTION 1129(A)(10) -- ACCEPTANCE BY AT LEAST ONE
IMPAIRED CLASS.
As required by section 1129(a)(10) of the Bankruptcy Code and
as indicated in the Voting Declaration, at least one Class of Claims or
Interests that is impaired under the Plan has accepted the Plan, excluding
votes cast by insiders.
11. SECTION 1129(A)(11) -- FEASIBILITY OF THE PLAN.
Confirmation of the Plan is not likely to be followed by the
liquidation, or the need for financial reorganization, of the Debtors,
Reorganized PCL or any successor to Reorganized PCL, and the Plan therefore
complies with section 1129(a)(11) of the Bankruptcy Code.
12. SECTION 1129(A)(12) -- PAYMENT OF BANKRUPTCY FEES.
In accordance with section 1129(a)(12) of the Bankruptcy Code,
Section 13.1 of the Plan provides for the payment of all fees payable under 28
U.S.C. Section 1930 on or before the Effective Date.
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<PAGE> 11
13. SECTION 1129(A)(13) -- RETIREE BENEFITS.
In accordance with section 1129(a)(13) of the Bankruptcy Code,
Section 5.3.3 of the Plan provides for the continuation after the Effective
Date of all retiree benefits, as that term is defined in section 1114(a) of the
Bankruptcy Code, in accordance with the contract or program giving rise to such
retiree benefits.
14. SECTION 1129(B) -- CONFIRMATION OF PLAN OVER
NONACCEPTANCE OF IMPAIRED CLASS.
Pursuant to section 1129(b)(1) of the Bankruptcy Code, the
Plan is confirmed notwithstanding that, contrary to section 1129(a)(8) of the
Bankruptcy Code, the Interests of the holders of Old Stock Options and Old
Warrants (Class 9) are impaired and such holders are deemed to have rejected
the Plan. The Plan does not discriminate unfairly and is fair and equitable
with respect to the holders of Class 9 Interests. The holders of Class 9
Interests would not receive or retain any property on account of their
Interests in a liquidation under chapter 7 of the Bankruptcy Code. No holder
of an Interest junior to the Class 9 Interests will receive or retain any
property under the Plan on account of such junior Interest.
C. SATISFACTION OF CONDITIONS TO CONFIRMATION.
Each of the conditions precedent to the entry of this
Confirmation Order, as set forth in Section 9.1 of the Plan, has been
satisfied.
D. CONDITIONS TO THE EFFECTIVE DATE.
The Debtors reasonably believe that, as of the date of this
Confirmation Order, each of the conditions precedent to consummation of the
Plan and the Effective Date, as set forth in Section 9.2 of the Plan, will be
satisfied or duly waived.
E. APPLICABILITY OF Section 2115 OF THE CALIFORNIA GENERAL
CORPORATION LAW.
As of the Effective Date, more than 50% of the New Common
Stock of Reorganized PCL will be held of record by persons having addresses
outside of the State of California.
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<PAGE> 12
II. CONCLUSIONS OF LAW
A. JURISDICTION AND VENUE.
This Court has jurisdiction over this matter pursuant to 28
U.S.C. Sections 157(a) and 1334. This is a core proceeding pursuant to
28 U.S.C. Section 157(b)(2). The Debtors were and are qualified to be debtors
under section 109 of the Bankruptcy Code. Venue in the Central District of
California was proper as of the Petition Date and continues to be proper under
28 U.S.C. Section 1408.
B. EXEMPTIONS FROM SECURITIES LAWS.
1. Pursuant to section 1125(e) of the Bankruptcy Code,
neither the Debtors, Reorganized PCL, the Official Committee nor any other
person that participated in the Debtors' transmittal of Plan solicitation
materials (as described above), their solicitation of acceptances of the Plan
or the offer, issuance, sale or purchase of New Common Stock, New Senior Notes,
New Warrants, New Unsecured Notes and any other security offered or sold under
the Plan shall be liable, on account of such actions or such participation, for
any violation of any applicable law, rule or regulation governing the
solicitation of acceptance or rejection of a plan of reorganization or the
offer, issuance, sale or purchase of securities. Accordingly, the Debtors,
Reorganized PCL, the Official Committee and their respective directors,
officers, employees, agents and Professionals (acting in such capacity) are
entitled to the protection of section 1125(e) of the Bankruptcy Code.
2. Pursuant to section 1145(a)(1) of the Bankruptcy
Code, the offering, issuance, sale and distribution by the Debtors, Reorganized
PCL, the Third-Party Disbursing Agent or the Disbursing Agent of New Common
Stock, New Senior Notes, New Warrants, New Unsecured Notes and any other
securities offered, issued, sold or distributed pursuant to the Plan shall be
exempt from section 5 of the Securities Act and any state or local law
requiring registration prior to the offering, issuance, sale or distribution of
securities. In addition, pursuant to section 1145(a)(2) of the Bankruptcy
Code, the offering, issuance, sale and distribution by Reorganized PCL of New
Common Stock upon the exercise of New
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<PAGE> 13
Warrants shall be exempt from section 5 of the Securities Act and any state or
local law requiring registration prior to the offering, issuance, sale or
distribution of securities.
3. Pursuant to and to the fullest extent permitted under
section 1145 of the Bankruptcy Code, the resale of any of the securities
referenced in Section II.B.2 of this Confirmation Order shall be exempt from
section 5 of the Securities Act and any state or local law requiring
registration prior to the offering, issuance, sale or distribution of
securities.
C. EXEMPTIONS FROM TAXATION.
Pursuant to section 1146(c) of the Bankruptcy Code: (1) the
issuance, distribution, transfer or exchange of New Securities; (2) the
creation, modification, assignment, consolidation, filing or recording of any
mortgage, deed of trust, security agreement or similar instrument; (3) the
securing of additional indebtedness by such means or by other means or the
additional securing of existing indebtedness by such means or by other means;
(4) the creation, modification, assignment, delivery, filing or recording of
any lease or sublease; or (5) the creation, modification, assignment, delivery,
filing or recording of any deed or other instrument of transfer under, in
furtherance of, or in connection with, the Plan, including the PCL/Subsidiary
Debtor Merger Agreement, the New Credit Facility Agreement, the New Indenture
or any other agreements or certificates of merger, consolidation, dissolution
or liquidation, deeds, bills of sale, assignments or other instruments of
transfer executed in connection with the Plan, this Confirmation Order, or any
transactions arising out of, contemplated by or in any way related to the
foregoing, whether occurring on or after the Effective Date, shall not be
subject to any document recording tax, stamp tax or stamp act, conveyance,
filing or transfer fee, intangibles or similar tax, mortgage tax, real estate
transfer tax, mortgage recording tax or other similar tax or governmental
assessment, and the appropriate state or local governmental officials or agents
shall be, and hereby are, directed to forego the collection of any such tax or
governmental
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assessment and to accept for filing and recordation any of the foregoing
instruments or other documents without the payment of any such tax or
governmental assessment.
D. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE.
As set forth in Section I.B of this Confirmation Order, the
Plan complies in all respects with the applicable requirements of section 1129
of the Bankruptcy Code.
E. APPROVAL OF THE SETTLEMENTS AND RELEASES PROVIDED UNDER THE
PLAN AND CERTAIN OTHER MATTERS.
Subject to Section III.L below, to the fullest extent
permissible under applicable law, pursuant to section 1123(b)(3) of the
Bankruptcy Code and Bankruptcy Rule 9019(a): (1) the settlements, compromises,
releases, discharges and injunctions set forth in the Plan, including, without
limitation, the settlements, compromises, releases, discharges and injunctions
set forth in Sections 5.5.1, 5.5.2 and 5.5.3 of the Plan, and implemented by
this Confirmation Order are hereby approved as fair, equitable, reasonable and
in the best interests of the Debtors, Reorganized PCL and their respective
Estates, creditors and Interest holders; (2) the settlement or compromise of
all claims or controversies set forth in Section 11.3 of the Plan relating to
the termination of all contractual, legal and equitable subordination rights
that any holder of a Claim or Interest may have with respect to any Allowed
Claim or Allowed Interest, or any distribution to be made pursuant to the Plan
on account of such Allowed Claim or Interest, is in the best interests of the
Debtors, Reorganized PCL and their respective Estates, creditors and Interest
holders, and is hereby approved as fair, equitable and reasonable.
In approving the releases, settlements and compromises of and
from such potential Claims, the Court has considered: (a) the balance of the
likelihood of success of claims asserted by the Debtors or other claimants
against the likelihood of success of the defenses or counterclaims possessed by
the Debtors, other claimants or other potential defendants; (b) the complexity,
cost and delay of litigation that would result in the absence of these
releases, settlements and compromises; (c) the objection made by the Securities
and Exchange Commission to the releases, settlements and compromises; (d) the
acceptance of
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the Plan by an overwhelming majority of the holders of Claims and Interests;
and (e) that the Plan, which gives effect to the releases, settlements and
compromises, is the product of extensive arms-length negotiations among the
Debtors, Nu-Tech, the Senior Lenders, the Official Committee and numerous other
parties in interest. See Protective Comm. Stockholders of TMT Trailer Ferry
Inc. v. Anderson, 390 U.S. 414, 424 (1968) (citing factors such as those set
forth above to be evaluated by courts in determining whether a settlement as a
whole is fair and equitable).
Subject to Section III.L below, to the fullest extent
permissible under applicable law, all settlements, compromises, releases,
discharges and injunctions of claims and causes of action against non-Debtor
entities as set forth in the Plan, which are approved herein as an integral
part of the Plan and are fair, equitable, reasonable and in the best interests
of the Debtors, Reorganized PCL and their respective Estates, creditors and
Interest holders, shall be, and hereby are, effective and binding on all
persons and entities who, prior to the filing of the Chapter 11 Cases, may have
had standing to assert such claims or causes of action, and no person or entity
will possess such standing to assert such claims or causes of action after the
Effective Date. St. Paul Fire & Marine Ins. Co. v. Pepsico, Inc., 884 F.2d
688, 700-01 (2d Cir. 1989).
F. AGREEMENTS AND OTHER DOCUMENTS.
Pursuant to section 1142(b) of the Bankruptcy Code and section
303 of the Delaware General Corporation Law, no action of the directors or
stockholders of the Debtors or Reorganized PCL will be required to authorize
them (or any of their officers, employees or agents acting on their behalf) to
effectuate and carry out the Plan and all orders of this Court relating
thereto, to consummate the transactions contemplated by the Plan, the
Disclosure Statement and such orders or to take or do any other action or thing
contemplated by the Plan, the Disclosure Statement or such orders as may be
necessary or appropriate to fully effectuate the intents and purposes thereof,
and all such actions and things hereby are or will be deemed to have been taken
or done with like effect as if they had been authorized and
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approved by unanimous actions of the directors and the stockholders of the
Debtors and Reorganized PCL.
G. POST-CONFIRMATION ASSUMPTIONS, ASSUMPTIONS AND ASSIGNMENTS AND
REJECTIONS OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
1. Each post-Confirmation assumption, assumption and
assignment or rejection of an executory contract or unexpired lease pursuant to
Section 6.1 of the Plan, including any assumption, assumption and assignment or
rejection effectuated as a result of any amendment to Exhibit I to the Plan, as
contemplated by Section 6.2.1 of the Plan and this Confirmation Order, shall be
legal, valid and binding upon the applicable Debtor or Reorganized PCL and all
non-Debtor parties to such executory contract or unexpired lease, all to the
same extent as if such assumption, assumption and assignment or rejection had
been effectuated pursuant to an appropriate authorizing order of this Court
entered before the Confirmation Date under section 365 of the Bankruptcy Code.
Notwithstanding anything to the contrary contained in Section 6.2.1 of the
Plan, Reorganized PCL shall be authorized, at any time prior to the Effective
Date, to amend Exhibit I to delete or add any executory contract or unexpired
lease listed therein, thus providing for its assumption, assumption and
assignment or rejection pursuant to Sections 6.1.1, 6.1.2 or 6.2.1 of the Plan,
as the case may be.
2. If, pursuant to Section 6.2.1 of the Plan,
Reorganized PCL amends Exhibit I to provide for the assumption of an executory
contract or unexpired lease prior to the Effective Date, Reorganized PCL shall
provide notice of such assumption to the party or parties to such lease or
contract, which notice shall set forth any amounts that Reorganized PCL asserts
are required to assume, or assume and assign, such lease or contract pursuant
to section 365 of the Bankruptcy Code. Such parties shall have 20 days from
the date of receipt of such notice to File objections to the cure amounts
listed thereon, and shall serve such objection on Reorganized PCL and the
Official Committee. If an objection is Filed, and Reorganized PCL and the
objecting party do not resolve such objection by stipulation within 10 days
after the objection is Filed, Reorganized PCL will request that the Court set a
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date for a hearing at which such dispute will be adjudicated. If no such
objection is Filed and served on Reorganized PCL within such time,
a. the party to such lease or contract shall be
bound by the cure amount set forth in such notice;
b. any Claim scheduled by the Debtors or any
proof of Claim relating to the Debtors' obligations under the
applicable lease or contract shall be disallowed to the extent that
such Claim is based on obligations under such agreement; and
c. the applicable party shall be forever barred,
estopped and enjoined from (x) asserting any other Claim against the
Debtors based on any defaults that may presently exist under the
applicable lease or contract and (y) objecting to the proposed
assumption or assumption and assignment on any ground.
3. If, pursuant to Section 6.2.1 of the Plan,
Reorganized PCL amends Exhibit I to provide for the rejection of an executory
contract or unexpired lease prior to the Effective Date, Reorganized PCL shall
provide notice of such rejection to the party or parties to such lease or
contract, which notice shall include a proof of Claim form and set forth the
bar date information contained in Section III.E.2 of this Confirmation Order.
III. ORDER
ACCORDINGLY, THE COURT HEREBY ORDERS, ADJUDGES AND DECREES THAT:
A. CONFIRMATION OF THE PLAN.
The Plan and each of its provisions are hereby confirmed
pursuant to section 1129 of the Bankruptcy Code; provided, however, that if
there is any direct conflict between the terms of the Plan and this
Confirmation Order, the terms of this Confirmation Order shall control. The
SEC Objection and any other responses to, and statements and comments
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regarding, the Plan, other than those withdrawn with prejudice in their
entirety prior to, or on the record at, the Confirmation Hearing, are hereby
expressly overruled.
B. EFFECTS OF CONFIRMATION.
1. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
The executory contract and unexpired lease provisions of
Article VI of the Plan, as modified by the terms and conditions of this
Confirmation Order and any subsequent order of the Court, are hereby approved.
2. UNIMPAIRED CLAIMS.
Pursuant to section 1124 of the Bankruptcy Code, all
Administrative Claims, Priority Tax Claims and Claims in Classes 1, 4 and 8 are
unimpaired by the Plan and shall survive Confirmation of the Plan. Neither the
Plan nor this Confirmation Order shall be construed as altering in any way the
legal, equitable or contractual rights of the holders of Unimpaired Claims.
The holders of Unimpaired Claims shall not be required to file proofs of claim
with this Court, and any dispute with respect to any Unimpaired Claim may be
determined, resolved or adjudicated, as the case may be, with respect to
Reorganized PCL in the manner in which such dispute would have been determined,
resolved or adjudicated if this Chapter 11 Case had not been commenced. Except
as otherwise provided in the Plan, nothing therein or in this Confirmation
Order shall affect the Debtors' or Reorganized PCL's rights and legal and
equitable defenses in respect of any Unimpaired Claims, including, but not
limited to, all rights in respect of legal and equitable defenses to, setoffs
or recoupments against Unimpaired Claims.
3. INJUNCTIONS AND STAYS REMAIN IN EFFECT UNTIL
EFFECTIVE DATE.
All injunctions and stays pursuant to sections 105 and 362 of
the Bankruptcy Code or otherwise shall remain in full force and effect until
the Effective Date of the Plan, except that nothing herein shall bar the filing
of financing documents or the taking of such other actions as are necessary to
effectuate the transactions contemplated by the Plan or this Confirmation
Order.
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C. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN.
1. IMMEDIATE EFFECTIVENESS; SUCCESSORS AND ASSIGNS.
Immediately upon the entry of this Confirmation Order, the
terms of the Plan shall be binding upon the Debtors, Reorganized PCL, Nu-Tech,
the Senior Lenders, any and all holders of Claims or Interests (irrespective of
whether such Claims or Interests are impaired under the Plan or whether the
holders of such Claims or Interests accepted, rejected or are deemed to have
accepted or rejected the Plan), any and all non-Debtor parties to executory
contracts and unexpired leases with the Debtor and any and all entities who are
parties to or are subject to the settlements, compromises, releases, discharges
and injunctions described in Section II.E above, and the respective heirs,
executors, administrators, successors or assigns, if any, of any of the
foregoing.
2. CONSUMMATION OF THE MERGER.
Each of the Debtors and Reorganized PCL shall take any and all
such actions as may be necessary or appropriate to effect the PCL/Subsidiary
Debtor Merger and the other transactions contemplated by the PCL/Subsidiary
Debtor Merger Agreement on the terms and subject to the conditions set forth in
the PCL/Subsidiary Debtor Merger Agreement and otherwise to perform their
obligations thereunder.
3. CONTINUED CORPORATE EXISTENCE; VESTING OF ASSETS.
Subject to the PCL/Subsidiary Debtor Merger Agreement,
Reorganized PCL shall continue to exist after the Effective Date as a separate
corporate entity, with all of the powers of a corporation under the laws of the
State of Delaware and without prejudice to any right to alter or terminate such
existence (whether by merger or otherwise) under applicable state law. Except
as otherwise provided in the Plan, on or after the Effective Date, all property
of the Estates of the Debtors and any property acquired by the Debtors or
Reorganized PCL under or in connection with the Plan, shall vest in Reorganized
PCL free and clear of all Claims, liens, charges, other encumbrances and
Interests.
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On and after the Effective Date, Reorganized PCL may operate
its business and may use, acquire and dispose of property and compromise or
settle any Claims or Interests without supervision or approval by this Court
and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other
than those restrictions expressly imposed by the Plan or this Confirmation
Order. Without limiting the foregoing, Reorganized PCL may pay the charges
that it incurs on or after the Effective Date for Professionals' fees,
disbursements, expenses or related support services without application to the
Court.
4. CANCELLATION OF CAPITAL STOCK, EXISTING LENDER
AGREEMENTS, OLD INDENTURE AND OLD SUBORDINATED
DEBENTURES; SURRENDER OF SECURITIES AND OTHER
DOCUMENTATION.
On the Effective Date, the Capital Stock (whether issued and
outstanding or held in the treasuries of the Debtors immediately prior to the
Effective Date), the Existing Lender Agreements, the Old Indenture and the Old
Subordinated Debentures shall be deemed to be cancelled, extinguished, retired
and of no further force and effect, in all events without any further action on
the part of the Debtors, Reorganized PCL, the holders of Capital Stock, the
holders of Old Subordinated Debentures or any other entity. Neither the holder
of any such cancelled securities and other documentation (or any purported
successor, assign or transferee of any such holder) shall have any rights
arising from or relating to such securities or other documentation, or the
cancellation thereof, except the rights provided pursuant to the Plan;
provided, however, that no distribution under the Plan shall be required to be
made to or on behalf of any holder of any Allowed Claim or Allowed Interest
evidenced by such cancelled securities or other documentation unless or until
such securities or documentation are received by the Disbursing Agent pursuant
to Section 7.8 of the Plan.
5. DIRECTORS AND OFFICERS; EMPLOYMENT-RELATED AGREEMENTS
AND COMPENSATION PROGRAMS.
a. DIRECTORS AND OFFICERS OF REORGANIZED PCL.
The appointment of the initial directors and officers of
Reorganized PCL, as set forth on Exhibits A and B hereto, respectively, as of
and immediately following the Effective Date, is hereby approved.
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The members of the initial board of directors will serve from
and after the Effective Date until the shareholders meeting for the year in
which his or her term expires and until his or her successor is duly elected or
appointed and qualified or until his or her earlier death, resignation,
retirement, disqualification or removal in accordance with the terms of the
certificate of incorporation and bylaws of Reorganized PCL.
All persons serving as officers of Reorganized PCL will serve
in the capacities in which they are to serve from and after the Effective Date
until his or her successor is duly elected or appointed and qualified in
accordance with the terms of the certificate of incorporation or bylaws of
Reorganized PCL, any applicable employment agreement and applicable corporation
or similar law, or until the earlier of the death, resignation, retirement,
disqualification or removal of any such officer.
b. APPROVAL OF NEW EMPLOYMENT, RETIREMENT,
INDEMNIFICATION AND OTHER AGREEMENTS AND
INCENTIVE COMPENSATION PLANS.
Pursuant to section 1142(b) of the Bankruptcy Code and other
appropriate provisions of applicable state business corporation laws, without
further action by the Court, the stockholders or (except as otherwise provided
herein) the board of directors of Reorganized PCL, and without limiting the
power or authority of Reorganized PCL following the Effective Date to take any
and all such actions as may be permitted or required by applicable
nonbankruptcy law, Reorganized PCL is hereby authorized to enter into or
modify, in accordance with their respective terms, employment, retirement,
severance, change-in-control, indemnification and other agreements with its
directors, officers and employees, and to implement or modify retirement income
plans, welfare benefit plans and other plans for employees and take any and all
such other actions as may be necessary or appropriate to perform and effectuate
such agreements and plans and otherwise make available the benefits
contemplated by such agreements and plans.
6. APPROVAL OF AGREEMENTS RELATED TO NEW CREDIT FACILITY
AND NEW SECURITIES.
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Pursuant to section 1142(b) of the Bankruptcy Code and other
appropriate provisions of applicable state business corporation laws, without
further action by the Court, the stockholders or (except as otherwise provided
herein) the board of directors of Reorganized PCL, on or after the Effective
Date, Reorganized PCL shall be, and hereby is, authorized and directed to
execute, deliver and perform its obligations under the New Securities and the
New Credit Facility Documents (including without limitation the New Credit
Facility Agreement) and to take all such other actions and execute, deliver,
record and file all such other agreements, instruments, releases, indentures,
applications, registration statements, reports and other documents as any of
their respective officers may determine are necessary or appropriate in
connection with the issuance and distribution of New Securities under the Plan
and the consummation of the transactions contemplated by New Credit Facility
Documents. All liens and security interests granted under the DIP Financing
Facility shall be terminated as of the Effective Date.
7. ISSUANCE OF NEW SECURITIES.
a. All shares of New Common Stock issued
pursuant to the Plan shall, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.
b. New Warrants issued pursuant to the Plan
shall, upon such issuance, be duly authorized and validly issued.
c. The Senior Lenders shall be deemed to have
entered into, and shall be bound by the provisions of, the New Senior Notes
Registration Rights Agreement without further action on the part of such
recipients, the Debtors, Reorganized PCL or any other entity.
d. The Senior Lenders shall be deemed to have
entered into, and shall be bound by the provisions of, the New Common Stock
Registration Rights Agreement without further action on the part of such
recipients, the Debtors, Reorganized PCL or any other entity.
8. APPROVAL OF PROVISIONS GOVERNING DISTRIBUTIONS;
APPOINTMENT OF DISBURSING AGENT.
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The provisions governing distributions of Article VII of the
Plan are hereby approved. With respect to Claims in Class 5, Credit Managers
Association of California is hereby appointed Third-Party Disbursing Agent
under the Plan, subject to the terms and conditions of a disbursing agent
agreement to be mutually acceptable to Reorganized PCL, the Official Committee
and Credit Managers Association of California. With respect to any other Class
of Claims and Interests, Reorganized PCL or any other entity designated thereby
is hereby appointed Disbursing Agent under the Plan.
9. CORPORATE GOVERNANCE.
As of the Effective Date, the New PCL Certificate of
Incorporation and the New PCL Bylaws shall be substantially in the forms of
Exhibits A and B, respectively, to the Plan. From and after the Effective
Date, Reorganized PCL may amend and restate the New PCL Certificate of
Incorporation or New PCL Bylaws as permitted by applicable law.
D. ADDITIONAL ACTIONS IN FURTHERANCE OF THE PLAN.
The approvals and authorizations specifically set forth in
this Confirmation Order are nonexclusive and are not intended to limit the
authority of the Debtors or Reorganized PCL or any officer thereof to take any
and all actions necessary or appropriate to implement, effectuate and
consummate any and all documents or transactions contemplated by the Plan or
this Confirmation Order. Without limiting the generality or effect of any
other provision of this Confirmation Order, the Debtors and Reorganized PCL
shall be, and hereby are, authorized and empowered, without action of their
respective boards of directors or stockholders, to take any and all such
actions as any of their officers may determine are necessary or appropriate to
implement, effectuate and consummate any and all documents or transactions
contemplated by the Plan or this Confirmation Order. Each of the officers of
each Debtor and Reorganized PCL shall be, and hereby is, authorized to execute,
deliver, file or record such contracts, instruments, releases, indentures,
mortgages, deeds, assignments, leases, applications, registration statements,
reports or other agreements or documents and take such other actions as such
officer may determine are necessary or
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appropriate to effectuate and further evidence the terms and conditions of the
Plan, this Confirmation Order and any and all documents or transactions
contemplated by the Plan or this Confirmation Order, all without further
application to or order of this Court and whether or not such actions or
documents are specifically referred to in the Plan, the Disclosure Statement,
the Disclosure Statement Order, this Confirmation Order or the Exhibits to any
of the foregoing, and the Secretary or any Assistant Secretary of each Debtor
or Reorganized PCL shall be, and hereby is, authorized to certify or attest to
any of the foregoing actions. To the extent that, under applicable
nonbankruptcy law, any of the foregoing actions would otherwise require the
consent or approval of the directors or stockholders of the Debtors or
Reorganized PCL, this Confirmation Order will constitute such consent or
approval, and such actions shall be, and hereby are, deemed to have been taken
by unanimous action of the directors and stockholders of the appropriate Debtor
or Reorganized PCL.
E. CLAIMS BAR DATES AND OBJECTION DEADLINES.
1. BAR DATES FOR ADMINISTRATIVE CLAIMS.
a. GENERAL BAR DATE PROVISIONS.
Except as provided below, unless previously filed (including
Claims filed asserting status as Administrative Claims), requests for payment
of Administrative Claims must be filed and served on Reorganized PCL no later
than 30 days after the Effective Date. Holders of Administrative Claims that
are required to File and serve a request for payment of such Claims and that do
not File and serve a request by the applicable bar date shall be forever barred
from asserting such Claims against the Debtors, Reorganized PCL, their
respective successors or their respective properties. Objections to such
requests must be Filed and served on the requesting party by the later of: (i)
30 days after the Effective Date and (ii) 30 days after the Filing of the
applicable request for payment of Administrative Claims.
b. BAR DATES FOR CERTAIN ADMINISTRATIVE CLAIMS.
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(1) PROFESSIONAL COMPENSATION.
Professionals or other entities requesting compensation or reimbursement of
expenses pursuant to sections 327, 328, 330, 331, 503(b) and 1103 of the
Bankruptcy Code for services rendered before the Effective Date (including
compensation requested pursuant to section 503(b)(3) and (4) of the Bankruptcy
Code by any Professional or other entity for making a substantial contribution
in any Chapter 11 Case) must File and serve on Reorganized PCL and such other
entities who are designated by the Bankruptcy Rules or any order of the
Bankruptcy Court an application for final allowance of compensation and
reimbursement of expenses no later than 30 days after the Effective Date.
Objections to applications of Professionals or other entities for compensation
or reimbursement of expenses must be Filed and served on Reorganized PCL and
the requesting Professional no later than 30 days after the Filing of the
applicable application for compensation or reimbursement of expenses.
(2) ORDINARY COURSE LIABILITIES.
Holders of Administrative Claims based on liabilities incurred by a Debtor in
the ordinary course of its business (including Administrative Claims arising
from or with respect to the sale of goods or the rendition of services) and
Administrative Claims of governmental units for taxes, will not be required to
File or serve any request for payment of such Claims.
(3) CLAIMS UNDER DIP FINANCING FACILITY.
On the Effective Date, any and all Claims under or evidenced by the DIP
Financing Facility shall be deemed fully and finally forgiven.
2. BAR DATE FOR REJECTION DAMAGES CLAIMS.
If the rejection of an executory contract or unexpired lease
pursuant to Section 6.2.1 of the Plan gives rise to a Claim by the other party
or parties to such contract or lease, such Claim shall be forever barred and
will not be enforceable against the Debtors or Reorganized PCL, or their
respective successors or properties unless a proof of Claim is Filed and served
on Reorganized PCL no later than 30 days after the later of: (a) the Effective
Date and (b) delivery of a notice of amendment to Exhibit I to the Plan
pursuant to
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Section 6.2.1 of the Plan providing for the rejection of the applicable
executory contract or unexpired lease.
3. DEADLINE FOR FILING OBJECTIONS TO CLAIMS.
Except as otherwise provided in this Confirmation Order, all
objections to proofs of Claims and Interests Filed in these Chapter 11 Cases
shall be Filed with the Court and served on the claimant or Interest holder, as
the case may be, no later than one hundred and twenty (120) days after the
later of: (a) the Effective Date or (b) the date of Filing of such proof of
Claim or Interest.
F. DISCHARGE, TERMINATION, INJUNCTION AND SUBORDINATION RIGHTS.
1. DISCHARGE OF CLAIMS AND SATISFACTION AND TERMINATION
OF INTERESTS.
a. Except as provided in the Plan or this
Confirmation Order, the rights afforded under the Plan and the treatment of
Claims and Interests under the Plan will be in exchange for and in complete
satisfaction, discharge and release of all Claims and satisfaction or
termination of all Interests, including any interest accrued on Claims from and
after the Petition Date. Except as provided in the Plan or this Confirmation
Order, as of the Effective Date: (i) the Debtors are discharged from all
Claims or other debts that arose before the Effective Date and all debts of the
kind specified in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code,
whether or not: (x) a proof of Claim based on such debt is Filed or deemed
Filed pursuant to section 501 of the Bankruptcy Code, (y) a Claim based on such
debt is allowed pursuant to section 502 of the Bankruptcy Code or (z) the
holder of a Claim based on such debt has accepted the Plan, (ii) all Interests
and other rights of equity security holders in the Debtors are satisfied or
terminated as provided in the Plan and (iii) all liens or security interests
securing Claims discharged under the Plan are hereby terminated.
b. As of the Effective Date, except as provided
in the Plan or this Confirmation Order, all entities shall be, and hereby are,
precluded and permanently enjoined from asserting against the Debtors or
Reorganized PCL, or their respective
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successors or property, any other or future Claims, demands, debts, rights,
causes of action, liabilities or equity interests based upon any act, omission,
transaction or other activity of any kind or nature that occurred prior to the
Effective Date. In accordance with the foregoing, except as provided in the
Plan or this Confirmation Order, this Confirmation Order shall be, and hereby
is, deemed to constitute this Court's determination, as of the Effective Date,
of discharge of all Claims and other debts and liabilities against the Debtors
and termination of all Interests and other rights of equity security holders in
the Debtors, pursuant to applicable provisions of the Bankruptcy Code, and such
discharge shall be, and hereby is, deemed to void any judgment obtained against
the Debtors at any time, to the extent that such judgment relates to a Claim
discharged or Interest satisfied or terminated pursuant to the Plan or this
Confirmation Order.
2. INJUNCTION.
a. Except as provided in the Plan or this
Confirmation Order, as of the Effective Date, all entities that have held,
currently hold or may hold a Claim or other debt or liability that is
discharged or an Interest or other right of an equity security holder that is
satisfied or terminated pursuant to the terms of the Plan shall be, and hereby
are, permanently enjoined from taking any of the following actions on account
of any such discharged Claims, debts or liabilities or satisfied or terminated
Interests or rights: (i) commencing or continuing in any manner any action or
other proceeding against the Debtors or Reorganized PCL or their respective
properties; (ii) enforcing, attaching, collecting or recovering in any manner
any judgment, award, decree or order against the Debtors or Reorganized PCL or
their respective properties; (iii) creating, perfecting or enforcing any lien
or encumbrance against the Debtors or Reorganized PCL or their respective
properties; (iv) asserting a setoff, right of subrogation or recoupment of any
kind against any debt, liability or obligation due to the Debtors or
Reorganized PCL or their respective properties; and (v) commencing or
continuing any action, in any manner, in any
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place that does not comply with or is inconsistent with the provisions of the
Plan and this Confirmation Order.
b. Subject to Section III.L below, as of the
Effective Date, all entities that have held, currently hold or may hold a
Claim, demand, debt, right, cause of action or liability that is released
pursuant to Section 5.5 of the Plan shall be, and hereby are, permanently
enjoined from taking any of the following actions on account of such released
claims, demands, debts, rights, causes of action or liabilities: (i)
commencing or continuing in any manner any action or other proceeding; (ii)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order; (iii) creating, perfecting or enforcing any lien or
encumbrance; (iv) asserting a setoff, right of subrogation or recoupment of any
kind against any debt, liability or obligation due to any released entity; and
(v) commencing or continuing any action, in any manner, in any place that does
not comply with or is inconsistent with the provisions of the Plan or this
Confirmation Order.
c. By accepting distributions pursuant to the
Plan, each holder of an Allowed Claim or Interest receiving distributions
pursuant to the Plan shall be, and hereby is, deemed to have specifically
consented to the injunctions set forth in the Plan and this Confirmation Order.
3. TERMINATION OF SUBORDINATION RIGHTS AND SETTLEMENT OF
RELATED CLAIMS AND CONTROVERSIES.
On the Effective Date, all contractual, legal or equitable
subordination and turnover rights that a holder of a Claim or Interest of the
Debtors may have with respect to any distribution to be made pursuant to the
Plan shall be, and hereby are, discharged and terminated, and all actions
related to the enforcement of such subordination rights shall be, and hereby
are, permanently enjoined. Accordingly, distributions pursuant to the Plan to
holders of Allowed Claims or Interests will not be subject to payment to a
beneficiary of such terminated subordination rights, or to levy, garnishment,
attachment or other legal process by a beneficiary of such terminated
subordination rights.
-27-
<PAGE> 29
4. LIMITATION OF LIABILITY IN CONNECTION WITH PLAN.
Subject to Section III.L below, to the fullest extent
permissible under applicable law, the Proponents and their officers, directors,
members, agents and representatives shall neither have nor incur any liability
to any entity, including, specifically, any holder of a Claim or an Interest
for any act taken or omitted to be taken in connection with or related to the
formulation, preparation, dissemination, implementation, Confirmation or
consummation of the Plan, the Disclosure Statement, the Confirmation Order or
any contract, instrument, release or other agreement or document created or
entered into, or any other act taken or omitted to be taken in connection with
the Plan, the Disclosure Statement or the Confirmation Order, including
solicitation of acceptances of the Plan.
G. SUBSTANTIAL CONSUMMATION.
The substantial consummation of the Plan, within the meaning
of section 1127 of the Bankruptcy Code, is hereby deemed to have occurred on
the Effective Date.
H. PAYMENT OF STATUTORY FEES.
On or prior to the Effective Date, the Debtors shall pay all
fees payable pursuant to 28 U.S.C. Section 1930. From and after the Effective
Date, Reorganized PCL shall pay all fees payable pursuant to 28 U.S.C. Section
1930.
I. APPLICABILITY OF Section 2115 OF THE CALIFORNIA GENERAL
CORPORATION LAW.
As of the Effective Date, Section 2115(a) of the California
General Corporation Law (the "GCL") shall be inapplicable to Reorganized PCL
inasmuch as more than 50% of the New Common Stock of Reorganized PCL will be
held of record by persons having addresses outside of the State of California.
Upon becoming a final order, this Confirmation Order shall constitute a "final
order" within the meaning of Section 2115(d) of the GCL.
J. REFERENCE TO PLAN PROVISIONS.
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<PAGE> 30
The failure to reference any particular provision of the Plan
in this Confirmation Order shall have no effect on the binding effect,
enforceability or legality of such provisions and such provisions shall have
the same binding effect, enforceability or legality as every other provision of
the Plan.
K. POST-CONFIRMATION NOTICES; POST-CONFIRMATION REPORTS.
1. NOTICE OF ENTRY OF CONFIRMATION ORDER.
a. Pursuant to Bankruptcy Rules 2002(f)(7) and
3020(c), the Debtors are hereby directed to serve a notice of the entry of this
Confirmation Order, substantially in the form annexed hereto as Exhibit C (the
"Confirmation Notice"), on all holders of Claims or Interests to whom the
notice of the Confirmation Hearing was mailed and on the United States Trustee
no later than 14 days after the Confirmation Date; provided, however, that the
Debtors shall be obligated to serve the Confirmation Notice only on the record
holders of such Claims as of February 11, 1997.
b. The Debtors are hereby directed to serve
copies of the Confirmation Order on each party that has filed a notice of
appearance in these Chapter 11 Cases and on each party who filed an objection
or response to, or statement or comment regarding, the Plan or the Confirmation
thereof, no later than 14 days after the Confirmation Date.
2. POST-CONFIRMATION REPORTS.
a. Generally. Within 120 days of the entry of
this Confirmation Order, Reorganized PCL shall file a status report (the
"Report") with the Court describing what progress has been made toward
consummation of the Plan. The initial Report shall be served on the Senior
Lenders, Nu-Tech, the U.S. Trustee and all parties having requested special
notice in these Chapter 11 Cases. Further Reports shall be filed with the
Court every 120 days thereafter and served on the foregoing entities, except as
otherwise ordered by the Court.
-29-
<PAGE> 31
b. Contents. Each Report shall include at least
the following information:
(1) a schedule listing for each claim and
each class of claims: the total amount required to be paid under the Plan; the
amount required to be paid as of the date of the Report; the amount actually
paid as of the date of the Report; and the deficiency, if any, in required
payments;
(2) a schedule of any and all
post-confirmation tax liabilities that have accrued or come due, and a detailed
explanation of payments thereon;
(3) Reorganized PCL's projections as to its
continuing ability to comply with the terms of the Plan;
(4) an estimate of the date for Plan
consummation and application for a final decree; and
(5) any other pertinent information needed
to explain the progress toward completion of the confirmed Plan.
c. Conversion. Unless otherwise provided in the
Plan, if the Chapter 11 Cases are converted to chapter 7, the property of
Reorganized PCL shall be revested in the chapter 7 estate, except that, in
individual cases, the post-petition income from personal services and proceeds
thereof, and post-confirmation gifts or inheritances pursuant to 11 U.S.C.
Section 541(a)(5)(A) or (a)(6) shall not automatically revest in the chapter 7
estate.
L. MISCELLANEOUS.
The Court is unable at this time to anticipate what types of
claims against non-Debtor third parties purported to be released under the
Plan, if any, may arise. Therefore, the releases by holders of Claims and
Interests described in Paragraphs 5.5.2, 11.1 and 11.4 of the Plan are approved
to the extent that applicable law allows a release of such claim as the law is
interpreted by a court of competent jurisdiction at the time such claim is
prosecuted.
-30-
<PAGE> 32
IT IS SO ORDERED.
Dated: April __, 1997 ____________________________________
UNITED STATES BANKRUPTCY JUDGE
-31-
<PAGE> 33
EXHIBIT A
Initial Board of Directors of Reorganized PCL
The following individuals will serve on the initial board of
directors of Reorganized PCL from and after the Effective Date:
-32-
<PAGE> 34
EXHIBIT B
Initial Officers of Reorganized PCL
The following individuals will serve as executive officers of
Reorganized PCL from and after the Effective Date:
<TABLE>
<CAPTION>
Name Position
---- --------
<S> <C>
J. Marvin Feigenbaum President and Chief Executive Officer
Richard M. Brooks Senior Vice President, Chief Financial Officer
Wayne E. Cottrell Vice President, Finance
</TABLE>
-33-
<PAGE> 35
David S. Kurtz EXHIBIT C
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Craig S. Gatarz
Susanne Meline, Bar No. 169177
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
Telephone: (213) 489-3939
Attorneys for Debtors and
Debtors in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
)
Debtors. ) NOTICE OF CONFIRMATION OF
) SECOND AMENDED PLAN OF
) REORGANIZATION OF PHYSICIANS
) CLINICAL LABORATORY, INC. AND
) ITS AFFILIATED DEBTORS
)
) Date: April 18, 1997
) Time: 2:00 p.m.
) Place: Courtroom 303
) 21041 Burbank Blvd.
----------------------------------------- ) Woodland Hills, CA 91367
)
TO ALL HOLDERS OF IMPAIRED CLAIMS AGAINST AND CLASS 7, 8 AND 9 EQUITY INTERESTS
IN PHYSICIANS CLINICAL LABORATORY, INC. AND ITS AFFILIATED DEBTORS
(COLLECTIVELY, THE "DEBTORS") AND ALL OTHER PARTIES IN INTEREST IN THE
ABOVE-CAPTIONED CHAPTER 11 CASES:
PLEASE TAKE NOTICE that, on April 18, 1997, the United States
Bankruptcy Court for the Central District of California (the "Bankruptcy
Court") entered its Findings of
-34-
<PAGE> 36
Fact, Conclusions of Law and Order Confirming Second Amended Plan of
Reorganization of Physicians Clinical Laboratory, Inc. and Its Affiliated
Debtors (the "Confirmation Order").
PLEASE TAKE FURTHER NOTICE that, pursuant to applicable
provisions of the United States Bankruptcy Code, and except as otherwise
provided in the Second Amended Plan of Reorganization of Physicians Clinical
Laboratory, Inc. And Its Affiliated Debtors (the "Plan") or the Confirmation
Order, the Confirmation Order constitutes the Bankruptcy Court's determination
of discharge of all the impaired claims against, and impaired equity interests
in, the Debtors. The holders of impaired claims and impaired equity interests
were the holders of the Senior Debt Claims, Nu-Tech Senior Debt Claims,
Unsecured Claims, Old Subordinated Debenture Claims, Old Common Stock, Old
Stock Options and Old Warrants (all as defined in the Plan). Professionals or
other entities requesting compensation or reimbursement of expenses for
services rendered before the Effective Date of the Plan shall file and serve an
application for final allowance of compensation and reimbursement of expenses
not later than 30 days after the Effective Date, in accordance with Section
2.1.3 of the Plan. Objections to applications of Professionals or other
entities for compensation or reimbursement of expenses shall be filed and
served in accordance with Section 2.1.3 of the Plan not later than 30 days
after the filing of the applicable application for compensation or
reimbursement of expenses. Unimpaired claims against the Debtors, including
unimpaired claims which are contingent, unliquidated and/or disputed, will be
determined, resolved or adjudicated as if these Chapter 11 Cases had not been
commenced.
-35-
<PAGE> 37
If you have questions or would like a copy of the Confirmation
Order, please call Physicians Clinical Laboratory, Inc. at (916) 648-3500.
BY ORDER OF THE COURT
JONES, DAY, REAVIS & POGUE
David S. Kurtz
Timothy R. Pohl
77 West Wacker
Chicago, IL 60606-1692
JONES, DAY, REAVIS & POGUE
Craig S. Gatarz
Susanne Meline
555 West Fifth Street
Suite 4600
Los Angeles, CA 90013-1025
-36-
<PAGE> 38
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
)
)
Debtors. ) NOTICE OF ENTRY OF ORDER
)
)
- ---------------------------------------------------)
)
TO ALL PARTIES IN INTEREST ON THE ATTACHED SERVICE LIST:
You are hereby notified, pursuant to Local Bankruptcy Rule
116(1)(a)(iv), that a judgment or order entitled:
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING SECOND
AMENDED PLAN OF REORGANIZATION OF PHYSICIANS CLINICAL LABORATORY,
INC. AND ITS AFFILIATED DEBTORS
was entered on (specify date):
Dated: JON D. CERETTO
Clerk of the Bankruptcy Court
By
----------------------------------
Deputy Clerk
<PAGE> 39
Jones, Day, Reavis & Pogue
Attn: Susanne Meline
555 West Fifth Street, Suite 4600
Los Angeles, CA 90013-1025
Phone: (213) 489-3939
Fax: (213) 243-2539
Counsel to Debtors
United States Trustee
Attn: Ron Maroko
221 N. Figueroa Street, Suite 800
Los Angeles, CA 90071
Phone: (213) 894-6811
Fax: (213) 894-2603
<PAGE> 40
David S. Kurtz
Timothy R. Pohl
JONES, DAY, REAVIS & POGUE
77 West Wacker
Chicago, Illinois 60601-1692
Telephone: (312) 782-3939
Craig S. Gatarz
Susanne Meline, Bar No. 169177
JONES, DAY, REAVIS & POGUE
555 West Fifth Street, Suite 4600
Los Angeles, California 90013-1025
Telephone: (213) 489-3939
Attorneys for Debtors and
Debtors in Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
)
)
Debtors. ) JUDGMENT PURSUANT TO FEDERAL
) RULE OF BANKRUPTCY PROCEDURE 9021
)
) Date: April 18, 1997
) Time: 2:00 p.m.
) Place: Courtroom 303
) 21041 Burbank Blvd.
) Woodland Hills, CA 91367
)
)
- --------------------------------------------)
)
The Court having this day approved and entered the Findings of
Fact, Conclusions of Law and Order Confirming Second Amended Plan of
Reorganization of Physicians Clinical Laboratory, Inc. and Its Affiliated
Debtors (the "Confirmation Order") and the Court having received a request to
enter judgment thereon;
<PAGE> 41
IT IS HEREBY ORDERED that final judgment is entered pursuant to
Federal Rule of Bankruptcy Procedure 9021 confirming the Second Amended Plan of
Reorganization of Physicians Clinical Laboratory, Inc. and Its Affiliated
Debtors, pursuant to section 1129(b) of the Bankruptcy Code, 11 U.S.C. Section
1129(b), as set forth in the Confirmation Order.
Dated: April __, 1997 ____________________________________
UNITED STATES BANKRUPTCY JUDGE
-2-
<PAGE> 42
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re: ) Jointly Administered
) Case No. SV96-23185-GM
PHYSICIANS CLINICAL LABORATORY, INC., )
a Delaware corporation, et al., ) Chapter 11
)
)
Debtors. ) NOTICE OF ENTRY OF ORDER
)
)
- ---------------------------------------------------)
)
TO ALL PARTIES IN INTEREST ON THE ATTACHED SERVICE LIST:
You are hereby notified, pursuant to Local Bankruptcy Rule
116(1)(a)(iv), that a judgment or order entitled:
JUDGMENT PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 9021
was entered on (specify date):
Dated: JON D. CERETTO
Clerk of the Bankruptcy Court
By
--------------------------------------
Deputy Clerk
<PAGE> 43
Jones, Day, Reavis & Pogue
Attn: Susanne Meline
555 West Fifth Street, Suite 4600
Los Angeles, CA 90013-1025
Phone: (213) 489-3939
Fax: (213) 243-2539
Counsel to Debtors
United States Trustee
Attn: Ron Maroko
221 N. Figueroa Street, Suite 800
Los Angeles, CA 90071
Phone: (213) 894-6811
Fax: (213) 894-2603
<PAGE> 44
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
I. FINDINGS OF FACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A. Jurisdiction And Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
B. Compliance With The Requirements Of Section 1129 Of The Bankruptcy Code. . . . . . . . . . . . . . . . . . 3
C. Satisfaction Of Conditions To Confirmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
D. Conditions to the Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
E. Applicability of Section 2115 of the California General Corporation Law. . . . . . . . . . . . . . . . . 10
II. CONCLUSIONS OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Jurisdiction And Venue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Exemptions From Securities Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. Exemptions From Taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. Compliance With Section 1129 Of The Bankruptcy Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
E. Approval Of The Settlements And Releases Provided Under The Plan And Certain Other Matters. . . . . . . . 13
F. Agreements And Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
G. Post-Confirmation Assumptions, Assumptions and Assignments and Rejections of Executory
Contracts and Unexpired Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
III. ORDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A. Confirmation Of The Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
B. Effects Of Confirmation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
C. Matters Relating To Implementation Of The Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
D. Additional Actions in Furtherance of the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
E. Claims Bar Dates and Objection Deadlines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
F. Discharge, Termination, Injunction and Subordination Rights. . . . . . . . . . . . . . . . . . . . . . . . 25
G. Substantial Consummation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
H. Payment Of Statutory Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE> 45
<TABLE>
<S> <C> <C>
I. Applicability of Section 2115 of the California General Corporation Law. . . . . . . . . . . . . . . . . 28
J. Reference to Plan Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
K. Post-Confirmation Notices; Post-Confirmation Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
<PAGE> 1
EXHIBIT 99
NEWS from:
Physicians Clinical Laboratory, Inc.
Corporate Headquarters
2495 Natomas Park Drive
Sacramento, CA 95833
(916) 648-3500
Contact: J. Marvin Feigenbaum
(916) 444-3500
For Immediate Release:
PHYSICIANS CLINICAL LABORATORY, INC.
ANNOUNCES CHAPTER 11 REORGANIZATION
SACRAMENTO, CA -- APRIL 21, 1997 -- Physicians Clinical Laboratory, Inc.
announced today that its Chapter 11 reorganization plan was approved by the
United States Bankruptcy Court for the Central District of California on Friday,
April 18, 1997.
"We are very pleased that our restructuring plan has been approved by the
Court," a company spokesperson stated. "Our creditors and shareholders have also
overwhelming approved the Plan, and the Company will emerge from Chapter 11 in
the next few weeks."
The restructuring plan results in a significant reduction of debt and an
infusion of new capital into the business. "Our employees and creditors have
worked extremely hard and cooperatively to allow us to restructure our business.
We are now poised to compete successfully throughout the State of California and
we look forward to a bright future," the Company concluded.
###
