IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: XECHEM, INC., et al., Debtors. § § § § § § § Chapter 11 Case No. 08-30512 (JBS) (Jointly Administered) PLAN OF REORGANIZATION FOR THE DEBTORS PROPOSED BY OFFICIAL COMMITTEE OF UNSECURED CREDITORS Dated: October 21, 2009 SONNENSCHEIN NATH & ROSENTHAL LLP Robert E. Richards Monika J. Machen Stefanie L. Wowchuk233 South Wacker Drive Suite 7800 Chicago, IL 60606-6404 Telephone: (312) 876-8000 Facsimile: (312) 876-7934 Counsel to the Official Committee of Unsecured Creditors Case 08-30512 Doc 215 Filed 10/21/09 Entered 10/21/09 19:21:55 Desc Main Document Page 1 of 25
. For purposes of this Plan, exceptas expressly provided or unless the context otherwise requires, all capitalized terms not otherwisedefined shall have the meanings ascribed to them in Article I of this Plan. Any term used in this
Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules,
shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules.Whenever the context requires, such terms shall include the plural as well as the singular
number, the masculine gender shall include the feminine, and the feminine gender shall include
the masculine.
1.2 Definitions.
(a) “Administrative Claim” means a Claim for payment of an administrative
expense of a kind specified in Section 503(b) or 1114(e)(2), if any, of the BankruptcyCode and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy Code,
including, but not limited to, (i) the actual, necessary costs and expenses, incurred after
the Petition Date, of preserving the applicable Estate, (ii) Professional Fee Claims, (iii) allfees and charges properly assessed against the applicable Estate under 28 U.S.C. § 1930,
(iv) claims for a Cure payment pursuant to any executory contract or unexpired lease
which is assumed under a Final Order of the Bankruptcy Court; and (v) all Allowed
Claims that are entitled to be treated as Administrative Claims pursuant to a Final Orderof the Bankruptcy Court under Section 546(c)(2)(A) of the Bankruptcy Code.
(b) “Administrative Claims Bar Date” is defined in Section 10.2 hereof.
(c) “Administrative Claims Objection Deadline” is defined in Section 10.2
hereof.
(d) “Allowed” or “Allowed Claim” means a Claim or any portion thereof:
(i) that has been allowed by a Final Order, or
(ii) as to which, (w) no Proof of Claim has been filed with the Bankruptcy Court,
(x) the liquidated and noncontingent amount of which is Scheduled, other than aClaim that is Scheduled at zero, in an unknown amount, or as disputed, and either
(y) no objection to its allowance or action to equitably subordinate or otherwise
limit recovery with respect thereto, has been timely filed or (z) any objection to
its allowance has been settled or withdrawn, or has been denied by a Final Order,or
(iii) for which a Proof of Claim in a liquidated amount has been timely filed with
the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of the
Bankruptcy Court or other applicable bankruptcy law, and as to which either (y)
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no objection to its allowance has been timely filed or (z) any objection to itsallowance has been settled or withdrawn, or has been denied by a Final Order, or
(iv) that is expressly allowed in this Plan.
(e) “Allowed Class . . . Claim” means an Allowed Claim in the particularClass described.
(f) “Avoidance Action” means any action to avoid or recover a transfer of
property of the applicable Debtor’s Estate or an interest of the applicable Debtor in
property, including, without limitation, actions arising under Sections 502, 510, 541, 542,544, 545, 547 through 551 and 553 of the Bankruptcy Code, or under related state or
federal statutes and common law, including fraudulent transfer laws, whether or not
litigation is commenced to prosecute such Causes of Action.
(g) “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as
codified in title 11 of the United States Code, 11 U.S.C. §§ 101-1330, or the Bankruptcy
Abuse Protection Act and Consumer Protection Act of 2005, as codified in title 11 of theUnited States Code, 11 U.S.C. §§ 101-1330, as, and to the extent, applicable or as
hereafter amended.
(h) “Bankruptcy Court” means the Bankruptcy Court of the United States
District Court for the Northern District of Illinois, Eastern Division, or such other court asmay have jurisdiction over the Chapter 11 Cases.
(i) “Bankruptcy Rules” means, collectively, the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules
of Civil Procedure, as amended, as applicable to the Chapter 11 Cases or proceedings
therein, and the Local Rules of the Bankruptcy Court, as applicable to the Chapter 11Cases or proceedings therein, as the case may be.
(j) “Bar Date(s)” means applicable date designated by the Bankruptcy Court
as the last dates for filing Proofs of Claim or Interest against the Debtors. For generalpre-petition claims and governmental unit claims, such date is March 2, 2009. For
rejection damage claims, such date is the date set forth in the order approving the
rejection of the applicable contract or lease or as set forth in this Plan.
(k) “Business Day” means any day, excluding Saturdays, Sundays or “legalholidays” (as defined in Bankruptcy Rule 9006(a)), on which commercial banks are open
for business in Chicago, Illinois.
(l) “Cash” means cash and cash equivalents, including, but not limited to,
bank deposits, wire funds, checks and legal tender of the United States or equivalents
thereof.
(m) “Causes of Action” means any and all actions, causes of action, suits,
accounts, controversies, agreements, promises, rights to legal remedies, rights toequitable remedies, rights to payment and claims, damages, judgments, claims and
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demands whatsoever, whether known, unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured and whether asserted or assertable directly or
derivatively, existing or hereafter arising in law, equity or otherwise based in whole or inpart upon any act or omission or other event occurring prior to the Petition Date or during
the course of the Chapter 11 Cases, including through the Effective Date.
(n) “Chapter 11 Cases” means the Chapter 11 cases of the Debtors.
(o) “Claim” means a claim against the applicable Debtor, whether or not
asserted, as defined in Section 101(5) of the Bankruptcy Code.
(p) “Claiming Period” is defined in Section 6.4 hereof.
(q) “Class” means a category of Holders of Claims or Interests, as described
in Article II of this Plan.
(r) “Collateral” means any property or interest in property of the applicableDebtor’s Estate subject to a Lien to secure the payment or performance of a Claim, which
Lien is not subject to avoidance under the Bankruptcy Code or otherwise invalid underthe Bankruptcy Code or applicable law.
(s) “Confirmation” means entry by the Bankruptcy Court of the
Confirmation Order.
(t) “Confirmation Date” means the date of entry by the clerk of the
Bankruptcy Court of the Confirmation Order.
(u) “Confirmation Hearing” means the hearing to consider confirmation of
the Plan under Section 1128 of the Bankruptcy Code.
(v) “Confirmation Order” means the order entered by the Bankruptcy Courtconfirming the Plan, which shall be in form and substance reasonably acceptable to the
Creditors’ Committee.
(w) “Creditor” means any Entity who holds a Claim against the applicable
Debtor.
(x) “Creditors’ Committee” means the official committee of unsecuredcreditors appointed pursuant to Section 1102(a) of the Bankruptcy Code in the
Chapter 11 Cases.
(y) “Creditors’ Equity” means approximately 22.5% of the common stock of
reorganized Xechem International, Inc.
(z) “Cure” means the distribution of Cash, or such other property as may be
agreed upon by the parties or ordered by the Bankruptcy Court, with respect to theassumption of an executory contract or unexpired lease, pursuant to Section 365(b) of the
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Bankruptcy Code, in an amount equal to all unpaid monetary obligations, withoutinterest, or such other amount as may be agreed upon by the parties, under such
executory contract or unexpired lease, to the extent such obligations are enforceable
under the Bankruptcy Code and applicable bankruptcy law.
(aa)
“Debtors
” means Xechem International, Inc. and Xechem Inc., includingin their capacity as debtors and debtors-in-possession pursuant to Sections 1107 and 1108of the Bankruptcy Code.
(bb) “Disallowed Claim” means a Claim, or any portion thereof, that (i) has
been disallowed by a Final Order, (ii) is Scheduled at zero or in an unknown amount or as
contingent, disputed or unliquidated and as to which a Bar Date has been established butno Proof of Claim has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order or otherwise deemed timely
filed under applicable law, or (iii) is not Scheduled and as to which a Bar Date has been
established but no Proof of Claim has been filed by the Bar Date or deemed timely filedwith the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order.
(cc) “Disclosure Statement” means the written disclosure statement that
relates to the Plan, as amended, supplemented, or modified from time to time, and that is
prepared and distributed in accordance with Section 1125 of the Bankruptcy Code andBankruptcy Rule 3018.
(dd) “Disputed Claim” means any Claim that has not been Allowed pursuantto the Plan, resolved by written agreement of the relevant parties, or determined by a
Final Order, and
(i) if no Proof of Claim has been filed by the applicable Bar Date, a
Claim which has been listed on the Schedules as liquidated, non-contingent, and undisputed, as to which a party in interest has
timely filed an objection or request for estimation in accordancewith the Plan, the Bankruptcy Code, the Bankruptcy Rules, and
any Final Order, or which is otherwise disputed by a party in
interest in accordance with applicable law;
(ii) if a Proof of Claim has been filed by the applicable Bar Date, a
Claim designated on such Proof of Claim as contingent,unliquidated or unknown;
(iii) if a Proof of Claim has been filed by the applicable Bar Date, a
Claim as to which a party in interest has timely filed an objection
or request for estimation in accordance with the Plan, the
Bankruptcy Code, the Bankruptcy Rules, and any Final Order, orwhich is otherwise disputed by a party in interest in accordance
with applicable law; or
(iv) that is disputed in accordance with the provisions of this Plan.
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(i) the liquidated amount in a Proof of Claim that is a Disputed Claim, unless (x) alesser amount is agreed to for reserve purposes only by the Creditors’ Committee,
and the Holder of such Disputed Claim; or (y) if a request for estimation is filed
by a party in interest and the Bankruptcy Court estimated the amount of suchClaim;
(ii) if no liquidated amount is set forth in the Proof of Claim relating to aDisputed Claim, (x) an amount agreed to by the Creditors’ Committee and the
holder of such Disputed Claim for reserve purposes only or (y) the amount
estimated by the Bankruptcy Court with respect to such Disputed Claim; or
(iii) if the Claim was listed on the Schedules as unliquidated, contingent or
disputed and no Proof of Claim was timely filed, or deemed to have been timelyfiled, by the applicable Bar Date and the Claim has not been resolved by written
agreement of the parties or an order of the Bankruptcy Court, zero.
(ff) “Disputed Claim Reserve” means the reserve established and maintained
pursuant to the terms of this Plan and Confirmation Order which, on the Effective Date,shall contain the amount of Creditors’ Equity or where applicable, Cash or other property
estimated for distribution on the Distribution Date to Holders of (a) Disputed Claims,
pending (i) the allowance or disallowance of such Claims or (ii) the estimation of such
claims for purposes of distribution.
(gg) “Distribution” means a distribution made on a Distribution Date, the dateof the Final Distribution, or at such time as the Reorganized Debtors, in their discretion,
deems appropriate.
(hh) “Distribution Date” means the date on which the Reorganized Debtors
make a Distribution under the terms of the Plan, which date shall be no later than the
earlier of (i) five (5) business days following the Effective Date or (ii) the date a DisputedClaim becomes an Allowed Claim.
(ii) “Effective Date” means the Business Day on which all conditions set
forth in Article 8.2 of this Plan have been satisfied or waived as provided in Article 8.2 of this Plan.
(jj) “Entity” means Entity as defined in Section 101(15) of the Bankruptcy
Code.
(kk) “Estate” means the estate of the applicable Debtor in these Chapter 11
Cases, created pursuant to Section 541 of the Bankruptcy Code.
(ll) “Face Amount” means (i) when used in reference to a Disputed Claim,
the full stated amount claimed by the Holder of such Claim in any Proof of Claim timely
filed with the Bankruptcy Court or otherwise deemed timely filed by any Final Order of the Bankruptcy Court or other applicable bankruptcy law, (ii) when used in reference to
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an Allowed Claim, the Allowed Amount of such Claim, or (iii) to the extent that a Claimincludes an unliquidated or unquantified portion, the amount that the Bankruptcy Court,
after notice and an opportunity to be heard, fixes as the amount for such Claim pursuant
to any applicable provisions of the Bankruptcy Code and Bankruptcy Rules.
(mm)
“Final Distribution
” means the last distribution occurring on or after theEffective Date by the Reorganized Debtors to holders of Allowed Claims entitled toreceive distributions under this Plan.
(nn) “Final Order” means an order or judgment, the operation or effect of
which has not been reversed or stayed, which is no longer subject to appeal, certiorari
proceeding or other proceeding for review, reargument, or rehearing, and as to which noappeal, certiorari proceeding, or other proceeding for review, reargument, or rehearing
has been requested or is then pending and the time to file any such appeal, certiorari
proceeding or other proceeding for review, reargument, or rehearing has expired or as to
which any right to appeal, petition for certiorari, right to reargue, or seek rehearing shallhave been waived in writing in form and substance satisfactory to the Creditors’
Committee or the Reorganized Debtors, as applicable.
(oo) “Finder” means Basu Capital LLC.
(pp) “Finders’ Fee” means the finders’ fee payable to Finder pursuant to the
Finders Agreement approved by order of the Bankruptcy Court. (Dkt. No. __).
(qq) “General Unsecured Claim” means a Claim that is not a Secured Claim,
Administrative Claim, Priority Tax Claim, or Other Priority Claim.
(rr) “Governmental” means of, or relating to, the government of any nation,
state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and
includes the Bankruptcy Court.
(ss) “Holder” means a Person holding a Claim or Interest.
(tt) “Impaired” means, when used with reference to a Claim or Interest, aClaim or Interest that is impaired within the meaning of Section 1124 of the Bankruptcy
Code.
(uu) “Indebtedness” means any (i) note, bond, debenture, evidence of
indebtedness, (ii) certificate of interest or participation in any such note, bond, debenture,
or evidence of indebtedness, or (iii) temporary certificate for, or guarantee of, any suchnote, bond, debenture, or evidence of indebtedness.
(vv) “Interest” means the rights and interests of the holder of any equity
security, including, without limitation, options or warrants to purchase equity securities,
stock appreciation rights or other rights to purchase or deliver in exchange for equity
securities, including preferred stock, options or warrants to purchase or otherwise acquirethe same and any Claims arising out of the purchase and sales of any such securities.
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(ww) “Lien” means a charge against or interest in property to secure paymentof a claim or debt or performance of an obligation.
(xx) “Local Rules” means the Local Rules of the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
(yy) “Management Incentive Plan” means a management incentive plan of
up to 5% percent of the stock of Xechem International, Inc. on such terms and conditions
as the Board of Directors of reorganized Xechem International, Inc. may approve.
(zz) “NIPRID” means the National Institute for Pharmaceutical Research andDevelopment of Nigeria.
(aaa) “Old Xechem International Stock” means the shares of common stock of Xechem International, Inc. and all options, warrants or rights, contractual or otherwise,
if any, to acquire any such stock, issued and outstanding as of the Record Date.
(bbb) “Other Priority Claim” means a Claim entitled to priority pursuant toSection 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an
Administrative Claim.
(ccc) “Person” has the meaning ascribed to such terms in Section 101(41) of the Bankruptcy Code.
(ddd) “Petition Date” means November 9, 2008, which is the date on which the
Debtors filed their petition commencing their Chapter 11 Cases.
(eee) “Plan” means this Plan of Reorganization, including any Plan Exhibits,
which is herein proposed by the Creditors’ Committee for the resolution of outstanding
Claims and Interests, and which as such plan may be amended from time to time inaccordance with the Bankruptcy Code and the terms of the Plan.
(fff) “Plan Exhibit” means any exhibit or schedule attached hereto.
(ggg) “Priority Tax Claim” means a Claim that is entitled to priority pursuantto Section 507(a)(8) of the Bankruptcy Code.
(hhh) “Professional” means any professional employed in the Chapter 11 Cases
pursuant to Sections 327 or 1103 of the Bankruptcy Code or otherwise and anyprofessionals seeking compensation or reimbursement of expenses in connection with the
Chapter 11 Cases pursuant to Section 503(b)(4) of the Bankruptcy Code.
(iii) “Professional Fee Claim” means a Claim of a Professional for
compensation or reimbursement of costs and expenses relating to services rendered after
the Petition Date and prior to and including the Effective Date.
(jjj) “Proof of Claim” means the proof of claim filed by a Holder of a Claim.
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(kkk) “Record Date” means the record date for purposes of makingdistributions under the Plan on account of Allowed Claims, which date shall be the
Effective Date.
(lll) “Reorganized Debtors” shall mean Xechem International, Inc. and
Xechem, Inc. as reorganized under this Plan on the Effective Date.
(mmm)“Scheduled” means, with respect to any Claim or Interest, the status and
amount, if any, of such Claim or Interest as set forth in the Schedules.
(nnn) “Schedules” means the schedules of assets and liabilities and thestatements of financial affairs filed in the Bankruptcy Court by the applicable Debtor
pursuant to Bankruptcy Rule 1007, as such schedules or statements have been or may be
amended or supplemented from time to time in accordance with Bankruptcy Rule 1009 or
orders of the Bankruptcy Court.
(ooo) “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 theBankruptcy Code, to the extent of the value of the Claim holder’s interest in the
applicable Estate’s interest in such property or to the extent of the amount subject tosetoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code.
This does not include any secured claim which was settled and/or paid pursuant to prior
order of the Bankruptcy Court.
(ppp) “Unimpaired” means, when used with reference to a Claim or Interest, a
Claim or Interest that is not impaired within the meaning of Section 1124 of theBankruptcy Code.
(qqq) “Unimpaired Claim” means a Claim that is not an Impaired Claim.
1.3 Rules of Interpretation. For purposes of the Plan (a) any reference in the Plan toa contract, instrument, release, indenture, or other agreement or documents being in a particular
form or on particular terms and conditions means that such document shall be substantially insuch form or substantially on such terms and conditions, (b) 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, (c) unless otherwise specified, allreferences in the Plan to sections, articles, schedules, and exhibits are references to sections,
articles, schedules, and exhibits of or to the Plan, (d) the words “herein” and “hereto” refer to the
Plan in its entirety rather than to a particular portion of the Plan, (e) captions and headings toarticles 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 (f) the rules of construction set forth in
Section 102 of the Bankruptcy Code and in the Bankruptcy Rules shall apply.
1.4 Computation of Time. In computing any period of time prescribed or allowed
by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
1.5 Governing Law. Unless a rule of law or procedure is supplied by federal law(including the Bankruptcy Code and Bankruptcy Rules), the laws of the State of Illinois shall
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govern the construction and implementation of the Plan and any agreements, documents, andinstruments executed in connection with the Plan.
ARTICLE II
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS
2.1 Unclassified Claims. In accordance with Section 1123(a)(1) of the Bankruptcy
Code, Administrative Claims, Priority Tax Claims and Other Priority Claims have not beenclassified, and the respective treatment of such unclassified claims is set forth immediately
below.
(a) Administrative Claims. Except as otherwise expressly provided for in
this Plan, on, or as soon as reasonably practicable after, the later of (i) the date such
Administrative Claim becomes an Allowed Administrative Claim, or (ii) the date suchAdministrative Claim becomes payable pursuant to any agreement between the Creditors’
Committee or the Reorganized Debtors and the holder of such Administrative Claim,
each holder of an Allowed Administrative Claim shall receive in full satisfaction,settlement, release, and discharge of, and in exchange for, such Allowed Administrative
Claim (x) Cash equal to the unpaid portion of such Allowed Administrative Claim, or (y)
such other treatment as to which the Creditors’ Committee or Reorganized Debtors andsuch holder shall have agreed upon in writing.
(b) Priority Tax Claims. Each holder of an Allowed Priority Tax Claim, atthe option of the Creditors’ Committee, shall be entitled to receive on account of such
Allowed Priority Tax Claim, in full satisfaction, settlement, release and discharge of, and
in exchange for, such Allowed Priority Tax Claim (i) Cash equal to the unpaid portion of such Allowed Priority Tax Claim or (ii) such other treatment agreed to by the Allowed
Priority Tax Claim holder and the Creditors’ Committee or Reorganized Debtors.
(c) Other Priority Claims. Each Holder of any remaining unpaid AllowedOther Priority Claim, if any, shall at the option of the Creditors’ Committee, shall be
entitled to receive on account of such Allowed Other Priority Claim, in full satisfaction,
settlement, release and discharge for, such Allowed Other Priority Claim, (i) Cash equal
to the amount of such Allowed Priority Other Claim or (ii) such other treatment agreed toby the Allowed Other Priority Claim Holder and the Creditors’ Committee or
Reorganized Debtors.
2.2 Classification of Claims and Interests. Claims against and Interests in the
Debtor are classified as set forth below for all purposes, including voting, confirmation anddistribution pursuant to the Plan and pursuant to Sections 1122 and 1123(a)(1) of the Bankruptcy
Code. A Claim or Interest shall be deemed classified in a particular Class only to the extent that
the Claim or Interest qualifies for the description of that Class and shall be deemed classified in a
different Class to the extent that any remainder of such Claim or Interest qualifies for thedescription of such different Class. A Claim or Interest is in a particular Class only to the extent
that such Claim or Interest is Allowed in that Class and has not been paid or otherwise settled
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prior to the Effective Date. The classification of Claims against and Interests in the Debtorspursuant to this Plan is as follows:
Class Status Voting Rights
CLASS-1 Secured Claims Unimpaired Not entitled to vote
CLASS-2 General Unsecured Claims Impaired Entitled to Vote
CLASS-3 Equity Interests Impaired Deemed to Reject
2.3 Treatment of Claims against and Interests in the Debtors.
(a) Class-1 – Secured Claims against the Debtors.
(i) Treatment: On, or as soon as reasonably practicable after, the
latest of (x) the Distribution Date, (y) the date such Claim becomesan Allowed Class-1 Claim, or (z) the date such Class-1 Claim
becomes payable pursuant to any agreement between the
Creditors’ Committee or the Reorganized Debtors and the holderof such Class-1 Claim, each holder of an Allowed Class-1 Claim
shall receive, in full satisfaction, settlement, release, and discharge,
of and in exchange for, such Allowed Class-1 Claim (I) Cash equalto the unpaid portion of such Allowed Class-1 Claim, (II) such
other treatment as to which the Creditors’ Committee or the
Reorganized Debtors and such holder shall have agreed upon inwriting, or (III) the surrender of its Collateral by the applicable
Estate or the applicable Reorganized Debtor.
(ii) Voting: Class-1 is Unimpaired and is deemed to accept the Plan.
(b) Class-2 – General Unsecured Claims against the Debtors.
(i) Treatment: Subject to the provisions of Article VI of this Plan,(x) on the Distribution Date, each holder of an Allowed Class-2Claim, shall receive his, her or its pro rata share of Creditors’
Equity. The Claims against the applicable Debtors shall be
deemed substantively consolidated for distribution and voting
purposes under this Plan but the Debtors shall not otherwise beconsolidated under this Plan.
(ii) Voting: Class-2 is Impaired and is entitled to vote to accept orreject the Plan.
(c) Class-3 – Interests in the Debtors.
(i) Treatment: The holder of Class-3 Interests shall neither receive
any distributions nor retain any property under the Plan. On the
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Effective Date, all such Interests shall be deemed cancelled orextinguished.
(ii) Voting: Class-3 is Impaired, but because no distributions will be
made to the holder of Class-3 Interests and such holders will not
retain any property under the Plan, such holders are conclusivelydeemed to reject the Plan pursuant to Section 1126(g) of theBankruptcy Code. Class-3 is not entitled to vote to accept or reject
the Plan.
2.4 Previously Paid, Settled, or Otherwise Satisfied Claims. The Claims of any
creditors that have been previously satisfied are deemed to be disallowed and shall not beentitled to any further distribution under the Plan.
2.5 Reservation of Rights Regarding Claims. Except as otherwise explicitlyprovided in the Plan, nothing shall affect the applicable Debtor’s, the Creditors’ Committee’s, or
the applicable Reorganized Debtor’s rights and defenses, both legal and equitable, with respect
to any Claims, including, but not limited to, all rights with respect to legal and equitable defensesto alleged rights of setoff or recoupment.
2.6 Third Party Claims. Except as specifically provided in the Plan, nothing in the
Plan shall be construed to effectuate a release or discharge of any claims owned by a party other
than the Debtors against any party other than the Debtors.
ARTICLE III
ACCEPTANCE OR REJECTION OF THE PLAN
3.1 Summary of Classes Voting on the Plan. As a result of the provisions of thisPlan, so long as such Claims are not Disputed Claims on or before 10 days before the voting
deadline or have not been previously Disallowed by a Final Order, the Holders of Claims in
Class-2 will be entitled to vote and the votes of the Holders of such Claims will be solicited withrespect to this Plan; provided, however, that objections may be filed to Claims in accordance
with the Plan for the purpose of voting and/or motions may be filed to estimate Claims for thepurpose of voting. The Holders of Claims in Class-1 and Interests in Class-3 are deemed by
operation of law to have accepted or rejected the Plan, as applicable, and the Holders of such
claims are not entitled to vote to accept or reject the Plan.
3.2 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code. To theextent that any Impaired Class rejects the Plan or is deemed to have rejected the Plan, the
Creditors’ Committee will request confirmation of the Plan under Section 1129(b) of the
Bankruptcy Code.
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4.1 New Capital. New capital shall be funded into the Reorganized Debtors in an
amount sufficient to pay allowed Cure Costs and allowed administrative and priority claims asprovided in this Plan and to provide working capital for the Reorganized Debtors and theirsubsidiaries in such amounts and on such terms and conditions as determined by the Creditors’
Committee in the exercise of its reasonable discretion.
4.2 Reorganized Equity. It is anticipated that approximately 60% of Reorganized
Equity of reorganized Xechem International, Inc. shall be issued to one or more parties infusingnew capital (which may include existing creditors or new management), and the balance shall be
distributed as or reserved for the Creditors’ Equity, the Finders’ Fee and the Management
Incentive Plan. The issuance of new securities is authorized without the need for any further
corporate action.
4.3 Management and Operation of Reorganized Debtors. It is anticipated that theReorganized Debtors will be managed by a management team lead by William Pursley, with
other members of management reasonably acceptable to the Creditors’ Committee, and as to the
Nigerian operations, NIPRID.
4.4 Vesting of Assets and Reorganization. Except as expressly provided elsewhere
in this Plan, on the Effective Date, the property of the applicable Debtor’s Estate shall vest in theReorganized Debtor, including all of the applicable Debtor’s claims, rights and Causes of Action
(including Avoidance Actions) and any property acquired by Debtors or Reorganized Debtors
under or in connection with this Plan, free and clear of all Claims, Liens, charges, otherencumbrances and Interests other than (i) those Liens, Claims and Interests retained or created
pursuant to this Plan and (ii) Liens that have arisen subsequent to the Petition Date on account of taxes that arose subsequent to the Petition Date. On and after the Effective Date, the applicableReorganized Debtor may operate its business and may use, acquire and dispose of property and
compromise or settle any Claims without supervision of or approval by the Bankruptcy Courtand free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than
restrictions expressly imposed by this Plan or the Confirmation Order. Following the Effective
Date, Reorganized Debtors will engage in any business appropriate under their organizationaldocuments.
4.5 Cancellation of Old Xechem International Stock and Indebtedness. On theEffective Date, all Old Xechem International Stock and any other notes, bonds, indentures or
other instruments or documents evidencing or creating any Indebtedness or obligations of, orinterests in, the Debtor, except such notes or other instruments evidencing indebtedness orobligations of the Debtor that are unimpaired, reinstated, or amended and restated under this
Plan, shall be cancelled, and the obligations of the applicable Debtor under any agreement,
indentures or certificates of designation governing the Old Xechem International, and any othernotes, bonds, indentures or other instruments or documents evidencing or creating any
indebtedness or obligations of, or interests in, the applicable Debtor, except such notes or other
instruments evidencing Indebtedness or obligations of the applicable Debtor that are unimpaired,
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reinstated or amended and reinstated under this Plan, as the case may be, shall be discharged.Any intercompany balances with non-debtor subsidiaries as of the Effective Date are hereby
subordinated as of the Effective Date to all distributions and claims under the Plan and may, at
the sole discretion of Reorganized Debtors, be forgiven or contributed to capital in whole or inpart or otherwise treated if the Reorganized Debtors so elect.
4.6 Corporate Action. The articles of incorporation and bylaws of the ReorganizedDebtors shall comply with Section 1123(a)(6) of the Bankruptcy Code and may be amended and
restated in a form to be attached to the Confirmation Order. On the Effective Date, the adoption
of the articles of incorporation and bylaws of the Reorganized Debtors or any other similarconstituent documents, the selection of directors and officers for the Reorganized Debtors, and
all other actions contemplated by this Plan shall be deemed authorized and approved in all
respects and any corporate action required by the Reorganized Debtors in connection with thisPlan, shall be deemed to have occurred and shall be in effect without any requirement of further
action by the Reorganized Debtors or their boards. On the Effective Date, the appropriate
officers of the Reorganized Debtors and members of the boards of directors of the ReorganizedDebtors shall be authorized and directed to issue, execute, deliver, file or record such contracts,
instruments, releases, indentures and other agreements or documents, securities and instruments
contemplated by this Plan in the name of and on behalf of the Reorganized Debtors.
4.7 Preservation of Rights of Action. Except as otherwise provided in this Plan,
prior order of the Bankruptcy Court or the Confirmation Order, 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, the Creditors’ Committee, and the Reorganized
Debtors shall retain and may enforce, sue on, settle, or compromise (or decline to do any of theforegoing) all Causes of Action or warranty, indemnity, credits, rebates, discounts or similar
claims that the Debtors or the Estates may hold against any Entity. This includes, without
limitation, the matters set forth and described in Exhibit A hereto.
4.8 Section 1146(a) Exemption From Certain Transfer and Mortgage Taxes.Pursuant to Section 1146(a) of the Bankruptcy Code, any issuance, transfer, or exchange of any
mortgage or security under the Plan (including sales of the remaining real properties and other
assets of the applicable Estate subsequent to the Effective Date) or the making or delivery of aninstrument of transfer under this Plan, shall not be subject to any stamp tax or similar tax, and the
Confirmation Order shall direct the appropriate state or local governmental officials or agents to
forego the collection of any such tax or governmental assessment and to accept for filing andrecordation any of the foregoing instruments or other documents without the payment of any
such tax or governmental assessment.
4.9 Section 1142(b) Performance of Acts Necessary to Consummate the Plan.Pursuant to Section 1142(b) of the Bankruptcy Code, any and all non-Debtor entities shall, and
are directed to, execute and deliver, or join in the execution or delivery of, any documentrequired to effectuate a transfer of property dealt with under the Plan, and perform any other act
that is necessary for the consummation of the Plan.
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TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
5.1 Executory Contracts and Leases. As of the Effective Date, each executory
contract and unexpired lease that has not otherwise been assumed or rejected by a Final Order of the Bankruptcy Court prior to the Confirmation Date or is subject to a pending motion seekingassumption or assumption and assignment as of the Effective Date, shall be rejected pursuant to
Section 365 of the Bankruptcy Code, and such executory contract or unexpired lease shall be
deemed rejected as of the Effective Date. Each contract or lease that is rejected shall be rejectedonly to the extent such contract or lease constitutes an executory contract or unexpired lease.
Listing a contract or lease on the prior filed bankruptcy Schedule G or any other schedule to this
Plan or otherwise, shall not constitute an admission by the applicable Debtor that such contractor lease is in fact an executory contract or unexpired lease or that the applicable Debtor has any
liability thereunder. Many of the contracts listed originally on Schedule G have subsequently
been performed and thus, are no longer executory. The Confirmation Order shall constitute anorder of the Bankruptcy Court approving such rejections, pursuant to Section 365 of the
Bankruptcy Code, as applicable, as of the Effective Date. To the extent that any agreement,
obligation, security interest, transaction or other arrangement is not deemed an executory
contract or unexpired lease by the applicable Debtor and is later determined by the BankruptcyCourt to be an executory contract or unexpired lease that is subject to assumption or rejection
under Section 365 of the Bankruptcy Code, such agreement shall be subject to assumption or
rejection within thirty (30) days of such determination.
5.2 Rejection Damages Bar Date. If the rejection by the applicable Debtor, pursuantto the Plan, of an executory contract or unexpired lease results in a Claim, then such Claim shall
be forever barred and shall not be enforceable against the applicable Debtor or the applicable
Reorganized Debtor or the properties of either of them, except that there shall be a Class-2 Claim
under this Plan to the extent that a Proof of Claim is filed and served upon counsel to theReorganized Debtors on or before thirty (30) days after the Confirmation Date.
ARTICLE VI
PROVISIONS GOVERNING DISTRIBUTIONS
6.1 Distributions. The Reorganized Debtors shall make distributions required under
this Plan on the Distribution Date. As to any Disputed Claim or subsequently allowed
Administrative Expense, the Reorganized Debtors shall pay such claim within five (5) Business
Days of the order Allowing such Claim or such Administrative Expense becomes a Final Order.
6.2 No Interest on Claims. Unless otherwise specifically provided for in this Plan orthe Confirmation Order, or required by applicable bankruptcy law, post-petition interest shall not
accrue or be paid on Claims, and no holder of a Claim shall be entitled to interest accruing on or
after the Petition Date on any Claim. Unless such Claim is a Secured Claim entitled topostpetition interest pursuant to Section 506 of the Bankruptcy Code, interest shall not accrue or
be paid upon any Disputed Claim with respect to the period from the Petition Date to the date a
Final Distribution is made thereon, if and after such Disputed Claim becomes an Allowed Claim.
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6.3 Means of Cash Payment. Cash payments made pursuant to this Plan shall be inU.S. funds, by the means agreed to by the payor and the payee, including by check or wire
transfer, or, in the absence of an agreement, such commercially reasonable manner as the payor
shall determine in its sole discretion.
6.4 Delivery of Distributions
. Distributions to holders of Allowed Claims shall bemade by the Reorganized Debtors (i) at the addresses set forth on the Proofs of Claim filed bysuch Holders (or at the last known addresses of such Holders if no Proof of Claim is filed or if
the Debtors have been notified of a change of address), (ii) at the addresses set forth in any
written notice of address change delivered to the Reorganized Debtors after the date of anyrelated Proof of Claim, and (iii) at the addresses reflected in the Schedules if no Proof of Claim
has been filed and the Reorganized Debtors have not received a written notice of a change of
address. If any Holder’s distribution is returned as undeliverable, no further distributions to suchHolder shall be made unless and until the Reorganized Debtors are notified of such Holder’s then
current address prior to the expiration of the Claiming Period (defined herein), at which time all
missed distributions shall be made to such Holder without interest. All claims for undeliverabledistributions made by the Reorganized Debtors must be made by the Holder of the Claim with
respect to such distribution within ninety (90) days after the date such distribution was initially
mailed or otherwise distributed (the “Claiming Period”), after which date all unclaimed
property shall become available for redistribution, and the claims of such Holder or successor tosuch Holder with respect to such property shall be discharged and forever barred,
notwithstanding any federal or state escheat laws to the contrary. Nothing contained in the Plan
shall require the Creditors’ Committee or the Reorganized Debtors or any of their respectiveagents and representatives to attempt to locate any Holder of an Allowed Claim. Holders of
Allowed Claims and Allowed Interests have the affirmative obligation to notify, in writing, the
Reorganized Debtors of any change in address.
6.5 Withholding and Reporting Requirements. In connection with this Plan and all
distributions hereunder, the Reorganized Debtors shall, to the extent applicable, comply with alltax withholding and reporting requirements imposed by any federal, state, provincial, local, or
foreign taxing authority and all distributions hereunder shall be subject to any such withholdingand reporting requirements. The Reorganized Debtors shall be authorized to take any and all
actions that may be necessary or appropriate to comply with such withholding and reporting
requirements. Notwithstanding any other provision of the Plan: (a) each Holder of an AllowedClaim that is to receive a distribution 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 suchdistribution, and (b) 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 Reorganized
Debtors for the payment and satisfaction of such tax obligations. The Reorganized Debtors shallbe responsible for forwarding an Internal Revenue Service Form W-9 (or for foreign creditors,
Form W-8BEN) to all Holders of Claims under the Plan to the extent this is not done as part of
the plan solicitation package. The Reorganized Debtors shall only make a distribution to a
Claimant upon receipt of an executed W-9 form (or for foreign creditors, Form W-8BEN), whichspecifies Holder’s Federal Tax Identification Number, Social Security Number or other tax
identification information, unless the Reorganized Debtors are already in possession of the
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Holder’s Federal Tax Identification Number, Social Security Number or other tax identificationinformation.
6.6 Setoffs. The Reorganized Debtors may, but shall not be required to, setoff against
any Claim not deemed an Allowed Claim under the Plan, and the payments or other distributions
to be made pursuant to the Plan in respect of such Claim, including, without limitation,Administrative Claims, claims of any nature whatsoever that either of the Debtors may haveagainst the Holder of such Claim; provided, however , if the Holder of such Claim disputes the
asserted setoff, it may, upon notice and motion, request that the Court determine whether or not
such setoff is appropriate, and; further, provided that neither the failure to do so nor theallowance of any Claim not deemed an Allowed Claim hereunder shall constitute a waiver or
release by the Reorganized Debtors of any such claim that the Debtors may have against such
Holder.
ARTICLE VII
PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND
UNLIQUIDATED CLAIMS AND DISTRIBUTIONS WITH RESPECT THERETO
7.1 Prosecution of Objections to Claims. After the Effective Date, the Reorganized
Debtors will have the sole authority to file or litigate to judgment, objections to Claims and shallnot be required to provide notice on any settlement of Claims nor seek Bankruptcy Court
approval of the same.
7.2 Treatment of Disputed Claims. Notwithstanding any other provisions of the
Plan, no payments or distributions will be made on account of a Disputed Claim until such Claim
becomes an Allowed Claim.
7.3 Distributions on Account of Disputed Claims Once Allowed and AdditionalDistributions on Account of Previously Allowed Claims. At such time as all or any portion of
a Disputed Claim becomes an Allowed Claim or a Claim or Administrative Expense otherwisereserved for becomes due and payable, the distributions reserved for such Disputed Claim or
Administrative Expense or such portion (including interest earned thereon or property distributed
on account thereof) shall be released from the appropriate reserve and paid or distributed, as the
case may be, by Reorganized Debtors on the Distribution Date or Final Distribution Date, to theHolder of such Allowed Claim or Administrative Expense, net of any taxes or other applicable
charges required to be paid by Reorganized Debtor in respect thereof. At such time as all or any
portion of a Disputed Claim is determined by the Bankruptcy Court not to be an Allowed Claimor an Administrative Expense is not ultimately Allowed by the Bankruptcy Court, the
Distribution reserved for such Disputed Claim or Administrative Expense or such portion(including such interest and dividend thereon or property distributed on account thereof) shall bereleased from the appropriate Reserve Account and shall be held by Reorganized Debtors for
distribution.
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8.1 Conditions to Confirmation. The following are conditions precedent to theoccurrence of the Confirmation Date:
(a) the entry of an Order, which is not subject to a stay pending appeal,
finding that the Disclosure Statement contains adequate information pursuant to
Section 1125 of the Bankruptcy Code;
(b) the proposed Confirmation Order shall be in form and substance,
reasonably acceptable to the Debtors and the Creditors’ Committee;
(c) all provisions, terms and conditions hereof are approved in theConfirmation Order;
(d) receipts of commitments in form and substance reasonably acceptable tothe Creditors’ Committee for new capital; and
(e) negotiation and finalization of a definitive settlement agreement with
NIPRID.
8.2 Conditions to Effective Date. The following are conditions precedent to the
occurrence of the Effective Date, each of which must be satisfied, or waived in writing in
accordance with Section 8.3 of this Plan:
(a) The Confirmation Order shall have been entered and docketed, and shallprovide that the Creditors’ Committee and the Reorganized Debtors are authorized and
directed to take all actions necessary or appropriate to enter into, implement and
consummate the contracts, instruments, releases, leases, indentures and other agreementsor documents created in connection with the Plan;
(b) all Plan Exhibits shall be in form and substance reasonably acceptable tothe Creditors’ Committee and shall have been executed and delivered by all parties
signatory thereto; and
(c) all actions, documents and agreements necessary to implement the Planshall have been effected or executed.
8.3 Waiver of Conditions. Each of the conditions set forth in Sections 8.1 and 8.2 of the Plan may be waived in whole or in part by the Creditors’ Committee. The failure of a party
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.
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9.1 Jurisdiction. Under Sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, theBankruptcy Court shall retain jurisdiction over all matters arising out of, and related to, theChapter 11 Cases and the Plan to the fullest extent permitted by law, and over which the
Bankruptcy Court would otherwise have been able to exercise original jurisdiction, including,
among other things, jurisdiction to:
(a) allow, disallow, determine, liquidate, classify, estimate or establish thepriority or secured or unsecured status of any Claim or Interest not otherwise allowed
under the Plan, including the resolution of any request for payment of any Administrative
Claim and the resolution of any objections to the allowance or priority of Claims or
Interests, and further that the Bankruptcy Court shall have exclusive jurisdiction to hearany Claims made against the Debtors and the Reorganized Debtors;
(b) hear and determine all applications for compensation and reimbursement
of expenses of Professionals under the Plan or under Sections 330, 331, 503(b), 1103 and
1129(a)(4) of the Bankruptcy Code; provided, however, that from and after the EffectiveDate, the payment of the fees and expenses of the retained Professionals of the
Reorganized Debtors shall be made in the ordinary course of business and shall not be
subject to the approval of the Bankruptcy Court, except as expressly provided herein or in
the implementing documents;
(c) hear and determine all matters with respect to the assumption or rejectionof any executory contract or unexpired lease to which the Debtors are a party or with
respect to which the applicable Debtor may be liable, including, if necessary, the natureor amount of any required cure or the liquidation or allowance of any Claims arisingtherefrom;
(d) effectuate performance of, and payments under, the provisions of the Plan;
(e) hear and determine any and all adversary proceedings, motions,
applications, and contested or litigated matters arising out of, under, or related to, the
Chapter 11 Cases;
(f) enter such orders as may be necessary or appropriate to execute,implement, or consummate the provisions of the Plan and all contracts, instruments,
releases, and other agreements or documents created in connection with the Plan, the
Disclosure Statement or the Confirmation Order;
(g) hear and determine disputes arising in connection with the interpretation,
implementation, consummation, or enforcement of the Plan, including disputes arisingunder agreements, documents or instruments executed in connection with the Plan;
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(h) consider any modifications of the Plan, cure any defect or omission, orreconcile any inconsistency in any order of the Bankruptcy Court, including, without
limitation, the Confirmation Order;
(i) issue injunctions, enter and implement other orders, or take such other
actions as may be necessary or appropriate to restrain interference by any Entity withimplementation, consummation, or enforcement of the Plan or the Confirmation Order;
(j) enter and implement such orders as may be necessary or appropriate if theConfirmation Order is for any reason reversed, stayed, revoked, modified, or vacated;
(k) hear and determine any matters arising in connection with or relating to
the Plan, the Disclosure Statement, the Confirmation Order, or any contract, instrument,
release, or other agreement or document created in connection with the Plan, the
Disclosure Statement or the Confirmation Order;
(l) enforce all orders, judgments, injunctions, releases, exculpations,
indemnifications and rulings entered in connection with the Chapter 11 Cases;
(m) except as otherwise limited herein, recover all assets of the applicableDebtor and property of the applicable Debtor’s Estate, wherever located;
(n) hear and determine matters concerning state, local, and federal taxes in
accordance with Sections 346, 505, and 1146 of the Bankruptcy Code;
(o) hear and determine all disputes involving the existence, nature, or scope of
any injunction imposed by the Plan, the Confirmation Order, or the Bankruptcy Code;
(p) hear and determine such other matters as may be provided for in the
Confirmation Order or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code; and
(q) enter a final decree closing the applicable Chapter 11 Case.
9.2 Non-Core Matters. Nothing contained in the Plan is intended, or shall beconstrued, to prohibit the Reorganized Debtors from filing, prosecuting, or defending non-core
Causes of Action in venues and jurisdictions other than the Court.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Professional Fee Claims. All final requests for compensation or reimbursement
of Professional fees pursuant to Sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy
Code for services rendered prior to the Effective Date and substantial contribution claims underSection 503(b)(4) of the Bankruptcy Code must be filed and served on the Reorganized Debtors
and their counsel no later than sixty (60) days after the Effective Date, unless otherwise ordered
by the Bankruptcy Court. Objections to applications of such Professionals or other entities for
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compensation or reimbursement of expenses must be filed and served on the ReorganizedDebtors and their counsel and the requesting Professional or other entity no later than thirty (30)
days (or such longer period as may be allowed by order of the Bankruptcy Court) after the date
on which the applicable application for compensation or reimbursement was served.
10.2 Administrative Claims Bar Date
. The Confirmation Order will establish a bardate for filing applications for the allowance of Administrative Claims (except for ProfessionalFee Claims or Administrative Claims that have already been Allowed by Final Order), which
date (the “Administrative Claims Bar Date”) will be the first Business Day that is thirty
(30) days after the Effective Date. Holders of Administrative Claims (except for ProfessionalFee Claims or Administrative Claims that have already been Allowed by Final Order) not paid
prior to the Confirmation Date shall submit requests for payment on or before the Administrative
Claims Bar Date or forever be barred from doing so and from receiving payment thereof. Thenotice of Confirmation to be delivered pursuant to Bankruptcy Rules 3020(c) and 2002(f) will set
forth the Administrative Claims Bar Date and constitute notice of the Administrative Claims Bar
Date. The Reorganized Debtors shall have one hundred-twenty (120) days (or such longerperiod as may be allowed by order of the Court) following the Administrative Claims Bar Date
(the “Administrative Claims Objection Deadline”) to review and object to all Administrative
Claims.
10.3 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 ConfirmationHearing shall be paid on or before the Effective Date and shall thereafter be paid by the
Reorganized Debtor until the applicable Chapter 11 Case is closed.
10.4 Modifications and Amendments. The Plan may be altered, amended or
modified by the Creditors’ Committee under Section 1127(a) of the Bankruptcy Code at any time
prior to the Confirmation Date. After the Confirmation Date and prior to substantial
consummation of the Plan, as defined in Section 1101(2) of the Bankruptcy Code, the Creditors’Committee or the Reorganized Debtors may, under Section 1127(b) of the Bankruptcy Code,institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any
inconsistencies in the Plan, the Disclosure Statement, or the Confirmation Order, or between or
among such documents, and to raise such matters as may be necessary or appropriate to carry outthe purposes and effects of the Plan, so long as such proceedings do not materially adversely
affect the treatment of holders of Claims under the Plan; provided, however, that prior notice of
such proceedings shall be served in accordance with the Bankruptcy Rules or order of theBankruptcy Court.
10.5 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 BankruptcyCourt, at the request of the Creditors’ Committee, shall have the power to alter and interpret such
term or provision to make it valid or enforceable to the maximum extent practicable, consistentwith 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 interpreted. Notwithstanding any
such holding, alteration or interpretation, the remainder of the terms and provisions of the Planshall remain in full force and effect and shall in no way be affected, impaired or invalidated by
such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial
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determination and shall provide that each term and provision of the Plan, as it may have beenaltered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its
terms.
10.6 Conflicts. To the extent that any provision of the Disclosure Statement or the
Confirmation Order (or any exhibits, schedules, appendices, supplements or amendments to theforegoing) conflict with or are in any way inconsistent with the terms of the Plan, the Plan shallgovern and control.
10.7 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.
10.8 Compromises and Settlements After Confirmation But Prior to Effective
Date. After Confirmation, but prior to the Effective Date, pursuant to Bankruptcy Rule 9019(a),the Creditors’ Committee may compromise and settle any Claims against the Debtors and/or
claims that the Debtors might have against other Entities, as provided in the Plan or as authorized
by Final Order of the Court, after appropriate notice and hearing.
10.9 Satisfaction of Subordination and Other Rights. All Claims, including theClaims of the Holders of all notes issued by the Debtors, and all rights and Claims between or
among such Holders relating in any manner whatsoever to any claimed lien rights or
subordination rights, shall be deemed satisfied by the distributions made during the Chapter 11
Cases and distributions under, described in, contemplated by, and/or implemented in this Plan.Distributions under, described in, contemplated by, and/or implemented by this Plan to the
various Classes of Claims hereunder shall not be subject to levy, garnishment, attachment, or like
legal process by any holder of a Claim, by reason of any claimed lien or subordination rights orotherwise, so that each Holder of a Claim shall have and receive the benefit of the distributions
in the manner set forth in the Plan.
10.10 Discharge. Except as specifically provided in the Plan to the contrary, thetreatment of Allowed Claims and Interests, distributions and rights that are provided in the Plan
shall be in complete, full and final settlement, satisfaction, and discharge of, and shall void and
extinguish all Claims against, liens on and Interests in the Debtors or the Reorganized Debtors,
or the assets and properties of the Debtors or the Reorganized Debtors. This Plan constitutes adischarge under Section 1141 of the Bankruptcy Code.
10.11 Injunction. Except as specifically provided in the Plan to the contrary, the
satisfaction and discharge set forth in Sections 10.9 and 10.10 hereof shall also operate as an
injunction prohibiting and enjoining the commencement or continuation of any action, theemployment of process or any act in furtherance of (a) any attempt to collect, recover from,
offset or recoup any Claim against or Interest in the applicable Debtor or the applicable
Reorganized Debtor by any entity, and (b) any claim or cause of action, whether known or
unknown, against a Released Party released hereunder based upon or related to the same subjectmatter as any Claim or Interest or other released matter.
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10.12 Exculpation and Limitation of Liability. The Plan provides that the membersof the Creditors’ Committee and the Finder and their respective representatives, employees,
management, agents, Professionals and affiliates (a) shall have no liability whatsoever to any
Holder or purported Holder of an Administrative Claim, Claim, or Equity Interest for any act oromission in connection with, or arising out of, the Plan, the Disclosure Statement, the negotiation
of the Plan, the pursuit of approval of the Disclosure Statement or the solicitation of votes forconfirmation of the Plan, the Chapter 11 Cases, the consummation of the Plan, the administrationof the Plan or the property to be distributed under the Plan, or any transaction contemplated by
the Plan or Disclosure Statement or in furtherance thereof except for any act or omission that
constitutes willful misconduct or gross negligence as determined by a Final Order, and (b) in all
respects, shall be entitled to rely upon the advice of counsel with respect to their duties andresponsibilities under the Plan. Notwithstanding the foregoing, the Plan shall not release,
discharge, or exculpate any non-Debtor party from any debt owed to the United States
Government and/or its agencies (the “Government”), or from any liability arising under theInternal Revenue Code, the Employee Retirement Income Security Act of 1974, as amended, or
the environmental laws, securities laws or criminal laws of the United States. In addition,
notwithstanding Section 10.11 of the Plan, the Plan shall not enjoin or prevent the Governmentfrom collecting any such liability from any such non-Debtor party.
10.13 Term of Injunctions or Stays Under Sections 105 and 362 of the Bankruptcy
Code. Unless otherwise provided in this Plan or in the Confirmation Order, all injunctions or
stays provided for in the Chapter 11 Cases under Sections 105 or 362 of the Bankruptcy Code or
otherwise, and extant on the Confirmation Date (excluding any injunctions or stays contained inthis Plan or the Confirmation Order), shall remain in full force and effect until the Effective
Date.
10.14 Binding Effect. The Plan shall be binding upon and inure to the benefit of the
Debtors, all present and former Holders of Claims against and Interests in the Debtors, their
respective successors and assigns, including, but not limited to, the Reorganized Debtors and allother parties-in-interest in this Chapter 11 Cases.
10.15 Effect of Non-Consummation. Except as otherwise provided herein, if either
Confirmation or consummation of the Plan does not occur, then (a) the Plan shall be null andvoid in all respects, (b) any settlement or compromise embodied in the Plan (including the fixing
or limiting to an amount certain any Claim or Class of Claims), assumption or rejection of
executory contracts or leases effected by the Plan, and any document or agreement executedpursuant to the Plan, shall be deemed null and void, and (c) nothing contained in the Plan, and no
acts taken in preparation for consummation of the Plan, shall (x) constitute or be deemed to
constitute a waiver or release of any Claims by or against, or any Interests in, the Debtor or any
other Entity, (y) prejudice in any manner the rights of the Debtor, the Creditors’ Committee orany Entity in any further proceedings involving the Debtor, or (z) constitute an admission of any
sort by the Debtor, the Creditors’ Committee or any other Entity.
10.16 Plan Exhibits. Any and all Plan Exhibits, or other lists or schedules not filed
with the Plan shall be filed with the Clerk of the Bankruptcy Court at least five (5) BusinessDays prior to the date of the commencement of the Confirmation Hearing. Upon such filing,
such documents may be inspected in the office of the Clerk of the Bankruptcy Court during
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normal court hours. Holders of Claims or Interests may obtain a copy of any such documentupon written request to the Creditors’ Committee in accordance with Section 10.17 of the Plan.
10.17 Notices. Any notice, request, demand, waiver or consent required or permitted to
be made or provided to or upon the Reorganized Debtors or the Creditors’ Committee under the
Plan shall be (a) in writing, (b) served by (i) certified mail, return receipt requested, (ii) handdelivery, (iii) overnight delivery service or (iv) first class mail, postage prepaid, and (c) deemedto have been duly given or made when actually delivered, addressed as follows:
If to the Creditors’ Committee or the Reorganized
Debtors:
Sam John
Persistency Capital
1270 Avenue of the Americas
Suite 2100New York, New York 10020
with a copy to:
SONNENSCHEIN NATH &
ROSENTHAL, LLP233 South Wacker Drive
Suite 7800
Chicago, Illinois 60606Attention: Robert E. Richards, Esq.
10.18 Dissolution of Creditors’ Committee. The Creditors’ Committee shallcontinue in existence until the Effective Date to exercise those powers and perform those duties
specified in Section 1103 of the Bankruptcy Code and shall perform such other duties as it mayhave been assigned by the Bankruptcy Court prior to the Effective Date. On the Effective Date,
the Creditors’ Committee shall be dissolved and its members shall be deemed released of all
their duties, responsibilities and obligations in connection with the Chapter 11 Cases or the Planand its implementation, and the retention or employment of the Creditors’ Committee’s
attorneys, accountants and other agents or Professionals shall terminate; provided, however, that
the Creditors’ Committee and its retained Professionals shall remain in existence following theEffective Date for the sole purpose of pursuing and prosecuting the payment of all Professional
Fees. All expenses of Creditors’ Committee members and the fees and expenses of their
Professionals through the Effective Date shall be paid in accordance with the provisions of thePlan and the terms and conditions of a Final Order concerning such fees.
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