UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW JERSEY
)
)
In re )
)
CAPITAL GAMING INTERNATIONAL, ) Chapter 11
INC., ) Case No. 96-19829 (JHW)
)
Debtor. )
)
)
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DEBTOR'S FIRST AMENDED AND MODIFIED PLAN OF REORGANIZATION
March 19, 1997
WILLKIE FARR & GALLAGHER
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4669
(212) 821-8000
Co-Counsel for Debtor
BNS-1945
CRUMMY, DEL DEO, DOLAN,
GRIFFINGER & VECCHIONE
A Professional Corporation
One Riverfront Plaza
Newark, New Jersey 07102-5497
(201) 596-4500
Co-Counsel for Debtor
FV-6343
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS....................................................1
1.1. Administrative Expense Claim...................................1
1.2. Affiliate......................................................1
1.3. Allowed........................................................2
1.4. Allowed Amount.................................................2
1.5. Allowed Noteholder Claims......................................3
1.6. Allowed Claim..................................................3
1.7. Allowed Interest...............................................3
1.8. Amended By-Laws................................................3
1.9. Amended Indenture..............................................3
1.10. Bankruptcy Code................................................4
1.11. Bankruptcy Court...............................................4
1.12. Bankruptcy Rules...............................................4
1.13. Business Day...................................................4
1.14. Cash...........................................................4
1.15. Chapter 11 Case................................................4
1.16. Claim..........................................................4
1.17. Class..........................................................5
1.18. Confirmation Account...........................................5
1.19. Confirmation Payments..........................................5
1.20. Confirmation Date..............................................5
1.21. Confirmation Hearing...........................................5
1.22. Confirmation Order.............................................5
1.23. Confirmation Valuation.........................................5
1.24. Covered Persons................................................6
1.25. Creditors' Committee...........................................6
1.26. Debtor.........................................................6
1.27. Debt Record Date...............................................6
1.28. Deficiency Claim...............................................6
1.29. Disputed Claim.................................................6
1.30. Disputed Interest..............................................6
1.31. Distribution Date..............................................6
1.32. Effective Date.................................................7
1.33. Face Amount....................................................7
1.34. Fee Request....................................................7
1.35. Filing Date....................................................7
1.36. Final Order....................................................8
1.37. Gaming License.................................................8
1.38. Gaming Jurisdiction............................................8
1.39. General Unsecured Claim........................................8
1.40. Guarantors....................................................10
(i)
1.41. Indenture Trustee..............................................9
1.42. Interests......................................................9
1.43. Joint Trade Claims.............................................9
1.44. Key Officers...................................................9
1.45. New Certificate of Incorporation...............................9
1.46. New Common Stock...............................................9
1.47. New Secured Notes..............................................9
1.48. Nontax Priority Claim.........................................10
1.49. Noteholder....................................................10
1.50. Noteholder Claims.............................................10
1.51. Noteholder Secured Claims.....................................10
1.52. Noteholder Unsecured Claims...................................10
1.53. Noteholders Steering Committee................................11
1.54. Old Common Stock..............................................11
1.55. Old Equity Securities.........................................11
1.56. Old Guaranty..................................................11
1.57. Old Indenture.................................................11
1.58. Old Options...................................................11
1.59. Old Secured Notes.............................................12
1.60. Order.........................................................12
1.61. Ordinary Course Administrative Expense Class..................12
1.62. Person........................................................12
1.63. Plan..........................................................12
1.64. Plan Document(s)..............................................12
1.65. Plan Rate.....................................................12
1.66. Post-Confirmation Employee Stock Incentive Plan...............12
1.67. Prepetition...................................................13
1.68. Priority Status...............................................13
1.69. Priority Tax Claim............................................13
1.70. Pro Rata......................................................13
1.71. Regulatory Sale Option........................................13
1.72. Released Claim................................................13
1.73. Reorganized Debtor............................................13
1.74. Schedules.....................................................13
1.75. Secured Claim.................................................14
1.76. Special Administrative Expense Claims.........................14
1.77. Stock Record Date.............................................14
1.78. Stock Transfer Agent..........................................14
1.79. Subsequent Distribution Date..................................14
1.80. Total Class 3A Claims.........................................14
ARTICLE II. CLASSIFICATION OF CLAIMS AND INTERESTS........................15
2.1. Class 1 Claims................................................15
2.2. Class 2 Claims................................................15
2.3. Class 3 Claims................................................15
(ii)
2.4. Class 4 Claims................................................15
2.5. Class 5 Interests.............................................15
2.6. Class 6 Interests.............................................15
ARTICLE III. TREATMENT OF UNCLASSIFIED CLAIMS..............................16
3.1. Administrative Expense Claims.................................16
3.2. Priority Tax Claims...........................................16
ARTICLE IV. TREATMENT OF CLAIMS AND INTERESTS CLASSIFIED UNDER THE PLAN...17
4.1. Class 1 Claims (Nontax Priority Claims).......................17
4.2. Class 2 Claims (Noteholder Secured Claims)....................17
4.3. Class 3 Claims (Secured Claims)...............................18
4.4. Class 4 Claims (General Unsecured Claims......................19
4.5. Class 5 Interests (Old Common Stock)..........................20
4.6. Class 6 Interests (Old Options)...............................20
ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.........20
ARTICLE VI. MEANS FOR IMPLEMENTING THE PLAN...............................21
6.1. Cash Distributions; Liquidity.................................21
6.2. Issuance and Distribution of New Secured Notes and
Cancellation of Old Secured Notes...........................22
6.3. Issuance and Distribution of New Common Stock and
Cancellation of Old Common Stock............................25
6.4. Assuring Management Continuity................................28
6.5. Manner of Payments Under the Plan.............................29
ARTICLE VII. CORPORATE ACTION INCIDENT TO PLAN IMPLEMENTATION..............29
7.1. New Certificate of Incorporation..............................29
7.2. Cancellation of Secured Notes and Old Indenture...............29
7.3. Cancellation of Equity Securities.............................30
7.4. Adoption of Post-Confirmation Employee Incentive Plan.........30
7.5. Board of Directors............................................30
7.6. NASDAQ Listing................................................31
7.7. Other Corporate Action........................................31
ARTICLE VIII. ALLOWANCE OF CLAIMS...........................................31
8.1. Claims of Noteholders.........................................31
8.2. Substantial Contribution Claim of Noteholder Steering
Committee's Counsel.........................................32
8.3. Bar Date for Objections to Claims.............................33
8.4. Reserves......................................................33
(iii)
ARTICLE IX. EFFECT OF CONFIRMATION........................................34
9.1. Revesting of Property.........................................34
9.2. Discharge.....................................................34
9.3. Releases......................................................34
9.4. Survival and Assignment of Avoidance Actions..................37
9.5. Injunction....................................................37
9.6. Indemnification...............................................39
9.7. Limitation on Sale of New Common Stock........................39
1. Definitions..............................................40
2. Rules Applicable to 5% Holders...........................41
3. Rules Applicable to Non-5% Holders.......................43
4. Consent of the Gatekeeper................................43
5. Restriction Period.......................................46
ARTICLE X. CONDITIONS PRECEDENT..........................................47
10.1. Conditions to Confirmation....................................47
10.2. Conditions to the Occurrence of the Effective Date............48
10.3. Waiver of Conditions..........................................48
ARTICLE XI. RETENTION OF JURISDICTION.....................................48
ARTICLE XII. ADDITIONAL PROVISIONS.........................................50
12.1. Revocation....................................................50
12.2. Effect of Revocation..........................................50
12.3. Certain Administrative Expenses...............................51
12.4. Committees....................................................51
12.5. Headings......................................................52
12.6. Successors and Assigns........................................52
12.7. Governing Law.................................................52
12.8. Notices.......................................................52
12.9. Unclaimed Cash or Securities..................................53
12.11. Admissibility.................................................53
12.12. Time..........................................................53
12.13. Use of Pronouns...............................................55
(iv)
DEBTOR'S FIRST AMENDED AND MODIFIED PLAN OF REORGANIZATION
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Capital Gaming International, Inc., the above captioned debtor,
proposes the following plan of reorganization pursuant to the provisions of
chapter 11 of Title 11, United States Code, 11 U.S.C. ss.1101 et seq.
ARTICLE I.
DEFINITIONS
Unless the context otherwise requires, the following terms shall have
the following meanings when used in initially capitalized form in this Plan.
Such meanings shall be equally applicable to both the singular and plural forms
of such terms. Any term used in initially capitalized form in this Plan that is
not defined herein but that is used in the Bankruptcy Code shall have the
meaning assigned to such term in the Bankruptcy Code.
1.1. Administrative Expense Claim means any Claim against the Debtor
(including a Fee Request), arising or accruing during the period commencing on
the Filing Date and ending on the Effective Date, which is entitled to priority
in accordance with sections 503(b) and 507(a)(1) of the Bankruptcy Code,
including, without limitation, all expenses of administration and amounts
necessary to cure defaults pursuant to section 365 of the Bankruptcy Code.
1.2. Affiliate shall have the meaning ascribed to such term in section
101(2) of the Bankruptcy Code.
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1.3. Allowed with respect to Claims (other than Administrative Expense
Claims) and Interests, means (a) any Claim against or Interest in the Debtor,
proof of which was timely filed or by order of the Bankruptcy Court was not
required to be filed or (b) any Claim or Interest that has been, or hereafter
is, listed in the Schedules filed by the Debtor as liquidated in amount and not
disputed or contingent and, in each such case in (a) and (b) above, as to which
either (i) no objection to the allowance thereof has been filed within the
applicable period of limitation fixed by this Plan, the Bankruptcy Code, the
Bankruptcy Rules, other applicable period of limitation fixed by this Plan, the
Bankruptcy Code, the Bankruptcy Rules, other applicable law or the Bankruptcy
Court, or (ii) an objection has been filed and the Claim or Interest has been
allowed by a Final Order (but only to the extent so allowed). "Allowed," with
respect to an Administrative Expense Claim, means all or that portion of an
Administrative Expense Claim which either (a) has been allowed by a Final Order,
or (b) was incurred by the Debtor in the ordinary course of business during the
Chapter 11 Case and is due and owing without defense, offset or counterclaim of
any kind. Unless otherwise specified in the Plan or by order of the Bankruptcy
Court, an Allowed Claim shall not include interest on such Claim for the period
from and after the Petition Date.
1.4. Allowed Amount means, with respect to a particular Claim: (a) if
the holder of such Claim has not filed a proof of claim as prescribed by the
Bankruptcy Court within the applicable period of limitation fixed by the
Bankruptcy Court pursuant to Bankruptcy Rule 3003, the amount, if any, of such
Claim that is listed in the Schedules as being not disputed, contingent or
unliquidated; (b) if the holder of such Claim has duly and timely filed a proof
of claim: (i) the amount stated in such proof of claim, if no objection to such
proof of claim is interposed within
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the applicable period of limitation fixed by the Bankruptcy Code, the Bankruptcy
Rules, the Bankruptcy Court or other applicable law; or (ii) such amount as
shall be fixed by a Final Order of the Bankruptcy Court, if an objection is
interposed within the applicable period of limitation fixed by the Bankruptcy
Code, the Bankruptcy Rules, the Bankruptcy Court or other applicable law; (c)
with respect to an Administrative Expense Claim, other than a Fee Request, the
amount of such Claim or such amount as shall be fixed by a Final Order of the
Bankruptcy Court; or (d) with respect to a Fee Request, such amount as shall be
fixed and allowed by a Final Order of the Bankruptcy Court.
1.5. Allowed Noteholder Claims shall mean the Claims allowed in favor
of the Indenture Trustee, for the benefit of the Noteholders, pursuant to
paragraph 8.1 of the Plan.
1.6. Allowed Claim means any Claim (including a Fee Request) for which
an Allowed Amount has been determined.
1.7. Allowed Interest means any Interest which is Allowed.
1.8. Amended By-Laws means the by-laws of the Reorganized Debtor, as
amended and restated as of the Effective Date, which shall be a Plan Document.
1.9. Amended Indenture means the Old Indenture, amended as of the
Effective Date, between the Reorganized Debtor, as issuer, and the Guarantor
thereunder, in substantially the form as attached hereto as Exhibit "A,"
governing, among other things, the New Secured Notes.
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1.10. Bankruptcy Code means title I of the Bankruptcy Reform Act of
1978, Pub. L. No. 95-598, 92 Stat. 2549 (1978), as amended, and as set forth in
sections 101 et seq. of title 11, United States Code.
1.11. Bankruptcy Court means the United States Bankruptcy Court for the
District of New Jersey, or such other court that may have jurisdiction over the
Chapter 11 Case including any district court that may withdraw the reference of
the Debtor's Chapter 11 Case pursuant to 28 U.S.C. ss.157(d).
1.12. Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure,
prescribed pursuant to 28 U.S.C. ss.2075, as amended from time to time.
1.13. Business Day means any day except Saturday, Sunday or any other
day on which commercial banks in New York City are authorized by law
to close.
1.14. Cash means cash, cash equivalents and other readily marketable
direct obligations of the United States of America and fully FDIC-insured
certificates of deposit issued by banks.
1.15. Chapter 11 Case means the case under chapter 11 of the Bankruptcy
Code concerning the Debtor, entitled In re Capital Gaming International, Inc.,
Chapter 11 Case No. 96-19829 (JHW).
1.16. Claim means (a) right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (b)
right to an equitable remedy for breach of
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performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
1.17. Class means a group of Claims or Interests, consisting of Claims
or Interests, as the case may be, which are substantially similar to each other
within the meaning of the Bankruptcy Code, as classified pursuant to Article II
of the Plan.
1.18. Confirmation Account means the segregated, interest bearing
account established by the Debtor on the Effective Date pursuant to paragraph
6.1 of the Plan.
1.19. Confirmation Payment means the sum of: (a) $250,000 in Cash; and
(b) New Secured Notes having a principal face amount of $550,000.
1.20. Confirmation Date means the date on which the Confirmation Order
is entered on the docket of the Bankruptcy Court.
1.21. Confirmation Hearing means the hearing held before the Bankruptcy
Court in which the Debtor requests confirmation of the Plan in accordance with
section 1129 of the Bankruptcy Code.
1.22. Confirmation Order means the Order entered by the Bankruptcy
Court confirming the Plan under chapter 11 of the Bankruptcy Code.
1.23. Confirmation Valuation means the value of the New Common Stock,
as determined by the Bankruptcy Court at the Confirmation Hearing.
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1.24. Covered Persons means the Debtor and each of its wholly owned
subsidiaries as described in the Disclosure Statement related to this Plan,
together with their respective present and former directors, officers and
employees.
1.25. Creditors' Committee means the Official Committee of the
Unsecured Creditors of the Debtor appointed by the U.S. Trustee on January 8,
1997 pursuant to section 1102 of the Bankruptcy Code to represent the interests
of the unsecured creditors of the Debtor.
1.26. Debtor means Capital Gaming International, Inc., the debtor in
the Chapter 11 Case.
1.27. Debt Record Date means the Confirmation Date or such other date
fixed in the Confirmation Order for determining distributions to Noteholders.
1.28. Deficiency Claim means, with respect to a Claim that is partially
secured, the amount by which the Allowed Amount of such Claim exceeds the value
of the property owned by the Debtor which collateralizes such claim.
1.29. Disputed Claim means a Claim that has not become an Allowed
Claim.
1.30. Disputed Interest means an Interest that has not become an
Allowed Interest.
1.31. Distribution Date means the Effective Date and each Subsequent
Distribution Date, collectively.
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1.32. Effective Date means the Business Day selected by the Debtor that
is not more than five (5) Business Days after the date each of the conditions
precedent to consummation as provided in Article X of the Plan has been
satisfied or waived in accordance with the Plan.
1.33. Face Amount means, with respect to a particular Claim: (a) if the
Claim is listed in the Schedules and the holder of such Claim has not filed a
proof of Claim with the Bankruptcy Court within the applicable period of
limitation fixed by the Bankruptcy Court pursuant to the Bankruptcy Code, the
Bankruptcy Rules or other applicable law, the amount of such Claim that is
listed in the Schedules as not disputed, contingent or unliquidated; or (b) if
the holder of such Claim has filed a proof of Claim with the Bankruptcy Court
within the applicable period of limitation fixed by the Bankruptcy Court
pursuant to the Bankruptcy Code, Bankruptcy Rules or other applicable law, the
liquidated amount stated in such proof of claim, or such amount as is determined
by final order of the Bankruptcy Court; (c) in the case of an Administrative
Expense, the liquidated amount set forth in any application filed with the
Bankruptcy Court , the amount contained in the Debtor's books and records or
such amount as is determined by a Final Order of the Bankruptcy Court; or (d) in
all other cases, zero (0) or such amount as shall be fixed or estimated by a
Final Order of the Bankruptcy Court.
1.34. Fee Request means a request for compensation or reimbursement of
expenses pursuant to section 330 or 331 of the Bankruptcy Code in connection
with an application made to the Bankruptcy Court in the Chapter 11 Case.
1.35. Filing Date means December 23, 1996.
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1.36. Final Order means an order or judgment of the Bankruptcy Court as
entered on the docket that (a) is not stayed, and (b) has not been reversed,
modified or amended, and (c) as to which the time to appeal, petition for
certiorari, or seek reargument or rehearing has expired and as to which no
appeal, reargument, petition for certiorari, or rehearing is pending or as to
which any right to appeal, reargue, petition for certiorari or seek rehearing
has been waived in writing in a manner satisfactory to the Debtor, or, if any
appeal, reargument, petition for certiorari, or rehearing has been sought, the
order or judgment of the Bankruptcy Court has been affirmed by the highest court
to which the order was appealed or from which the reargument or rehearing was
sought, or certiorari has been denied, and the time to take any further appeal
or to seek certiorari or further reargument or rehearing has expired.
1.37. Gaming License means any material license, certification,
franchise or other authorization or approval to own, lease, operate or otherwise
conduct, manage, finance, consult with respect to, operate or develop riverboat,
dockside, land-based or any other type of gaming in any Gaming Jurisdiction, and
applicable liquor licenses.
1.38. Gaming Jurisdiction means any Federal, state, tribal or
sovereign nation in which any entity in which the Debtor or Reorganized Debtor
has a direct or indirect beneficial, legal or voting interest, conducts or
intends to conduct, manage, finance, consult with respect to, operate or develop
riverboat, dockside, land-based or any other type of gaming (including, without
limitation, the rendering of services in respect thereof pursuant to a Native
American Casino Management Contract (as such term is defined in the Amended
Indenture) or otherwise).
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1.39. General Unsecured Claim means any Prepetition Claim against
the Debtor which is not a Secured Claim and is not entitled to Priority Status.
1.40. Guarantor means Capital Gaming Management, Inc., a New Jersey
Corporation.
1.41. Indenture Trustee means First Trust National Association, as
Indenture Trustee under the Old Indenture, and any successor or assign thereof.
1.42. Interests means the rights of the holders and owners of the
issued and outstanding Old Equity Securities, including, without limitation, all
legal and equitable rights or entitlements evidenced by, arising under or
relating to any Old Equity Security.
1.43. Joint Trade Claims means any claim for goods or services as to
which the Debtor and a subsidiary are jointly and severally liable.
1.44. Key Officers means Edward M. Tracy and William S. Papazian,
collectively.
1.45. New Certificate of Incorporation means the amended Restated
Certificate of Incorporation of the Reorganized Debtor which shall become
effective on the Effective Date and which shall be substantially in the form of
the certificate attached hereto as Exhibit "B."
1.46. New Common Stock means the shares of common stock of the
Reorganized Debtor to be issued by the Reorganized Debtor on the Effective Date
in accordance with the terms of the Plan, having the terms set forth in the New
Certificate of Incorporation.
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1.47. New Secured Notes means notes having a principal face amount of
$23.1 million which shall be issued by the Reorganized Debtor and guaranteed by
the Guarantor, under the Amended Indenture.
1.48. Nontax Priority Claim means any Prepetition Claim against the
Debtor (other than an Administrative Expense Claim or Priority Tax Claim)
entitled to Priority Status.
1.49. Noteholder means a holder of an Old Secured Note.
1.50. Noteholder Claims means Noteholder Secured Claims and Noteholder
Unsecured Claims,
collectively.
1.51. Noteholder Secured Claims means the Claims of Noteholders on
account of their ownership of Old Secured Notes, to the extent such Claims
constitute Secured Claims under section 506 of the Bankruptcy Code; provided,
however, that Noteholder Secured Claims shall not include any Claim arising from
recission of a purchase or sale of Old Secured Notes, for damages arising from
the purchase or sale of Old Secured Notes or for reimbursement or contribution
allowed under section 502 of the Bankruptcy Code on account of such Claim. As
provided in paragraph 8.1 of the Plan, the Indenture Trustee shall be deemed to
have filed a proof of claim, pursuant to Bankruptcy Rule 3003(c)(5), on behalf
of all Noteholders, which shall be allowed in the Chapter 11 Case as a Class 2
Claim for $24,000,000 and as a Class 4 Claim for $80,688,850.
1.52. Noteholder Unsecured Claims means the Claims of Noteholders on
account of their ownership of Old Secured Notes, to the extent such Claims
constitute Unsecured Claims
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; provided, however, that Noteholder Unsecured Claims shall not include any
Claim arising from recission of a purchase or sale of Old Secured Notes, for
damages arising from the purchase or sale of Old Secured Notes or for
reimbursement or contribution allowed under section 502 of the Bankruptcy Code
on account of such Claim. As provided in paragraph 8.1 of the Plan, the
Indenture Trustee shall be deemed to have filed a proof of claim, pursuant to
Bankruptcy Rule 3003(c)(5), on behalf of all Noteholders, which shall be allowed
in the Chapter 11 Case as a Class 2 Claim for $24,000,000 and as a Class 4 Claim
for $80,688,850.
1.53. Noteholders Steering Committee means that certain
unofficial committee of Noteholders consisting, as of the Filing Date, of
SunAmerica, Inc., DDJ Capital Management L.L.C., Loews Corporation and Grace
Brothers, Ltd.
1.54. Old Common Stock means any and all of the common equity
securities of the Debtor in respect of which any shares are presently issued and
outstanding, including, 19,329,574 shares of common stock, provided that Old
Common Stock shall not include any shares of New Common Stock.
1.55. Old Equity Securities means Old Common Stock and Old Options,
collectively.
1.56. Old Guaranty means the guaranty of the Guarantor, dated as of
February 17, 1994 in respect to the Old Secured Notes.
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1.57. Old Indenture means the Indenture governing the Old
Secured Notes, dated February 17, 1994, as amended, between the Debtor, as
Issuer, the guarantors thereunder and the Indenture Trustee.
1.58. Old Options means any and all rights, warrants and options
relating to Old Common Stock.
1.59. Old Secured Notes means, collectively, the 11-1/2%
Secured Notes due 2001, issued by the Debtor pursuant to the Old Indenture.
1.60. Order means an order of the Bankruptcy Court.
1.61. Ordinary Course Administrative Expense Claims means all
Administrative Expense Claims other than any Special Administrative Expense
Claims.
1.62. Person means an individual, a corporation, a partnership, an
association, a joint stock company, a joint venture, an estate, a trust, an
unincorporated organization, a government, or any political subdivision thereof,
or other entity.
1.63. Plan means this plan of reorganization of the Debtor under
chapter 11 of the Bankruptcy Code and all exhibits hereto, as it may be amended
or modified by the Debtor from time to time in accordance with the Plan, the
Bankruptcy Code and the Bankruptcy Rules.
1.64. Plan Document(s) means the document(s) that aid in
effectuating the Plan and that are specifically identified herein as Plan
Documents or which, in the view of the Debtor, become necessary or appropriate
to effectuate the Plan, which documents, to the extent feasible, shall be filed
on or before the Confirmation Hearing.
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1.65. Plan Rate means six percent (6%) per annum.
1.66. Post-Confirmation Employee Stock Incentive Plan means
the employee stock option plan substantially in the form of that annexed as
Exhibit "C" to the Plan.
1.67. Prepetition means arising or accruing or relating to the period
before the Filing Date.
1.68. Priority Status means the priority in distribution afforded to
certain Claims pursuant to section 507(a) of the Bankruptcy Code.
1.69. Priority Tax Claim means any Prepetition Claim against the Debtor
to the extent entitled to priority in payment under section 507(a)(8) of the
Bankruptcy Code.
1.70. Pro Rata means, as to any distribution provided for by this Plan
in respect of any Class of Claims, the allocation of the aggregate amount of
such distribution in accordance with that percentage of the total of Allowed
Claims in such Class that is represented by the Allowed Claim receiving the
distribution.
1.71. Regulatory Sale Option has the meaning set forth in paragraph
6.3(e) of the Plan.
1.72. Released Claim shall have the meaning ascribed to such term in
paragraph 9.3(a) hereof.
1.73. Reorganized Debtor means the Debtor on and after the Effective
Date.
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1.74. Schedules means the various schedules and lists filed by the
Debtor on December 23, 1996, pursuant to section 521 of the Bankruptcy Code, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the Bankruptcy Rules, Bankruptcy Code or other applicable law.
1.75. Secured Claim means any Prepetition Claim against the
Debtor (other than a Nontax Priority Claim or Tax Claim) which is secured or
collateralized by property of the Debtor.
1.76. Special Administrative Expense Claims means all Administrative
Expense Claims which, by law, rule, agreement or otherwise, must be allowed by
order of the Bankruptcy Court. Special Administrative Expense Claims include (i)
all professional fees to be awarded and expenses to be reimbursed under section
327 or 1103 of the Bankruptcy Code, (ii) reimbursement of expenses to committee
members in accordance with section 503(b)(3)(F) of the Bankruptcy Code, and
(iii) substantial contribution awards granted in accordance with section
503(b)(3)(D) and (b)(4) of the Bankruptcy Code.
1.77. Stock Record Date means the Confirmation Date or such other date
fixed in the Confirmation Order for determining distributions to holders of Old
Common Stock.
1.78. Stock Transfer Agent means American Stock Transfer Company.
1.79. Subsequent Distribution Date shall mean (a) the first (1st)
Business Day following January 15 and July 15 of each year; and (b) such other
dates as the Reorganized Debtor, in its discretion, may determine.
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1.80. Total Class 4 Claims means the sum of the Allowed Amounts of all
Allowed Class 4 Claims, plus the Face Amounts of all Disputed Class 4 Claims.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
The following is a designation of Classes of Claims and Interests. A
Claim or Interest is classified in a particular Class only to the extent that
the Claim or Interest qualifies within the description of the Class and is
classified in a different Class to the extent the Claim or Interest qualifies
within the description of that different Class. Administrative Expense Claims
and Priority Tax Claims are unclassified. For purposes of the Plan, Claims and
Interests are classified as follows:
2.1. "Class 1 Claims" shall consist of all Nontax Priority Claims.
2.2. "Class 2 Claims" shall consist of all Noteholder Secured Claims.
2.3. "Class 3 Claims" shall consist of all Secured Claims other than
Noteholder Secured Claims.
2.4. "Class 4 Claims" shall consist of all General Unsecured Claims.
Class 4 Claims include all Deficiency Claims.
2.5. "Class 5 Interests" shall consist of all Old Common Stock.
2.6. "Class 6 Interests" shall consist of all Old Options.
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ARTICLE III.
TREATMENT OF UNCLASSIFIED CLAIMS
3.1. Administrative Expense Claims.
(a) Ordinary Course Administrative Expense Claims. Each holder
of an Ordinary Course Administrative Expense Claim shall be paid in full, in
Cash, on account of such holder's Ordinary Course Administrative Expense Claim,
on the date such Claim becomes due and payable unless such claim is a Disputed
Claim, in which case payment shall be made (i) within three (3) Business Days of
the day that an Order determining the Allowed Amount of such Claim has become a
Final Order (unless the time of payment is otherwise prescribed in such order),
or (ii) or as otherwise agreed between the Debtor or Reorganized Debtor, as the
case may be, and such holder.
(b) Special Administrative Expense Claims. Each holder of a
Special Administrative Expense Claim shall be paid the Allowed Amount of such
Claim in full, in Cash, on or before the third (3rd) Business Day following the
day on which an Order is entered allowing such Claim, or on such other date as
the Bankruptcy Court may direct.
3.2. Priority Tax Claims. Each holder of an Allowed Priority Tax Claim
shall be paid the Allowed Amount of such Claim, at the sole option of the Debtor
or Reorganized Debtor, as the case may be, either (a) in Cash on the Effective
Date, or such other date as the Bankruptcy Court may determine, or (b) pursuant
to section 1129(a)(9)(C) of the Bankruptcy Code,
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in deferred cash payments to be made in equal semi-annual installments over the
six (6) years following the date of assessment of such Claim, with interest
thereon at the Plan Rate in the case of such deferred payments.
ARTICLE IV.
TREATMENT OF CLAIMS AND INTERESTS
CLASSIFIED UNDER THE PLAN
The Allowed Claims and Allowed Interests as classified in
Article II of the Plan shall be satisfied in the manner set forth in this
Article IV unless the holder of such Allowed Claim or Allowed Interest agrees to
accept less favorable treatment.
4.1. Class 1 Claims (Nontax Priority Claims). Class 1 Claims
may be impaired. Each holder of an Allowed Nontax Priority Claim shall be paid
the Allowed Amount of such Claim in full, in Cash, on the Effective Date or on
such other date as the Bankruptcy Court may determine, or, in the alternative,
if Class 1 Claims have accepted the Plan, the Debtor, at its option, may elect,
consistent with section 1129(a)(9)(B) of the Bankruptcy Code, to make deferred
Cash payments to any holder of a Class 1 Claim in equal semi-annual installments
over a three (3) year period following the Effective Date, with interest thereon
at the Plan Rate in the case of such deferred payments.
4.2. Class 2 Claims (Noteholder Secured Claims). Class 2 Claims are
impaired. On the Effective Date, the Indenture Trustee shall receive, on behalf
of the
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Noteholders, on account of its Allowed Class 2 Claim: (a) New Secured Notes in
the principal face amount of $21.45 million; and (b) 1,225,000 shares of New
Common Stock.
4.3. Class 3 Claims (Secured Claims). Class 3 Claims are not impaired.
Each holder of an Allowed Class 3 Claim shall be treated, at the sole option of
the Reorganized Debtor, exercised on or within five (5) Business Days after the
Effective Date, or such other date as the Bankruptcy Court may determine,
pursuant to any of the following alternatives: (A) the Reorganized Debtor shall
execute a written undertaking in favor of the holder of such Claim, whereby the
Reorganized Debtor assumes such Claim and leaves unaltered such holder's legal,
equitable and contractual rights with respect to such Claim, or (B)
notwithstanding any contractual provision or applicable law that entitles the
holder of such Claim to demand or receive accelerated payment of such Claim
after the occurrence of a default, the Reorganized Debtor shall (1) cure any
such default that occurred before or after the Filing Date, other than a default
of a kind specified in section 365(b)(2) of the Bankruptcy Code, (2) reinstate
the maturity of such Claim as such maturity existed before such default, (3)
compensate the holder of such Claim for any damages incurred as a result of any
reasonable reliance by such holder on such contractual provision or such
applicable law, and (4) execute a written undertaking in favor of such holder,
whereby the Reorganized Debtor assumes such Claim and, except as permitted in
clauses (1), (2) and (3) hereof, does not otherwise alter the legal, equitable
or contractual rights of such holder with respect to such Claim; or (C) the
Reorganized Debtor shall; or (D) the Reorganized Debtor shall transfer title to
some or all of that property of the Reorganized Debtor which secures such
holder's Allowed Class 3 Claim with a concomitant reduction in the Allowed
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Amount thereof based upon the value of property transferred, with any resulting
Deficiency Claim being treated as a Class 4 Claim.
Notwithstanding the foregoing: (1) the Debtor, in its sole discretion,
may elect by sending written notice to the affected creditor on or before the
Confirmation Date to (x) pay the holder of such Allowed Class 3 Claim the
Allowed Amount thereof, in Cash; (y) distribute to the holder of an Allowed
Claim in Class 3 the property securing such holder's Claim, in which event such
holder shall be entitled within thirty (30) days of such election to file a
proof of claim for any deficiency entitled to treatment as a General Unsecured
Claim in Class 4, as applicable, or be forever barred from thereafter asserting
a Deficiency Claim against the Debtor or Reorganized Debtor; or (z) provide to
such holder such treatment, including deferred Cash payments, as shall be
consistent with section 1129(b) of the Bankruptcy Code; and (2) the holder of a
Class 3 Claim may receive such less favorable treatment as may be agreed upon by
such holder and the Debtor or Reorganized Debtor, as the case may be. In the
event the Debtor elects the treatment provided for in the preceding sentence,
such Claim shall be deemed impaired.
4.4. Class 4 Claims (General Unsecured Claims). Class 4 Claims are
impaired. Each holder of an Allowed Class 4 Claim, subject to paragraph 6.3(e)
of the Plan, shall receive on the Effective Date or such later date that a Class
4 Claim becomes an Allowed Claim its Pro Rata share of: (i) 525,000 shares of
New Common Stock; (ii) the right to receive the net proceeds of Avoidance
Actions recovered pursuant to Section 9.4 of the Plan; and (iii) $1,100,000 in
New Secured Notes. Notwithstanding the foregoing, the Indenture Trustee shall
receive no more than 375,000 shares of New Common Stock and $550,000 in New
Secured Notes on account of its Allowed Class 4 Claim, and any shares the
Indenture Trustee would
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otherwise receive on account of its Class 4 Claim in excess of 375,000 shares
and any New Secured Notes the Indenture Trustee would otherwise receive on
account of its Class 4 Claim in excess of $550,000 in New Secured Notes shall be
distributed Pro Rata to all other holders of Allowed Class 4 Claims.
4.5. Class 5 Interests (Old Common Stock). Class 5 Interests are
impaired. Subject to paragraphs 6.3(d) and (e) of the Plan, each holder of an
Allowed Class 5 Interest shall receive, on the Effective Date, its Pro Rata
share of 50,000 shares of New Common Stock.
4.6. Class 6 Interests (Old Options). Class 6 Interests are impaired.
Each holder of a Class 6 Interest shall not receive any distribution under the
Plan on account of such Interest. As provided in paragraph 7.3 of the Plan, all
Old Options shall be deemed canceled and void as of the Effective Date.
ARTICLE V.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Subject to the requirements of section 365 of the Bankruptcy Code, all
executory contracts or unexpired leases of the Debtor that have not been assumed
by order of the Bankruptcy Court, are not the subject of a motion to assume
pending on the Confirmation Date or are not listed on the Schedule of Assumed
Executory Contracts annexed hereto as Exhibit "D" shall be deemed rejected by
the Debtor on the Effective Date. The Debtor reserves all of its rights prior to
the Confirmation Date to assume any such contract or lease agreement, and, as to
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any contract determined by the Bankruptcy Court to constitute an executory
contract of the Debtor, which contract was not set forth on the Debtor's
Schedule G -- Executory Contracts and Unexpired Leases filed by the Debtor with
the Bankruptcy Court in connection with the Chapter 11 Case, as the same may
have been amended or modified by the Debtor from time to time, for a period of
five (5) Business Days after the date of any such determination. All payments to
cure defaults that may be required by section 365(b)(1) of the Bankruptcy Code
shall be made by the Debtor as an Ordinary Course Administrative Expense Claim.
In the event of a dispute regarding the amount of any such payments or the
ability of the Debtor to provide adequate assurance of future performance, the
Debtor will make any payments required by section 365(b)(1) of the Bankruptcy
Code after the entry of a Final Order resolving such dispute. All proofs of
claim with respect to Claims arising from the rejection of executory contracts
or unexpired leases must be filed with the Bankruptcy Court within thirty (30)
days from and after the date of entry of an Order authorizing such rejection,
unless the Bankruptcy Court shall fix a different period in any such Order, or
such Claims shall be barred.
ARTICLE VI.
MEANS FOR IMPLEMENTING THE PLAN
6.1. Cash Distributions; Liquidity. The Debtor anticipates that it will
have adequate liquidity on the Effective Date to satisfy its obligations under
the Plan and to operate its ongoing business. On the Effective Date the Debtor
shall establish a segregated, interest bearing account (the "Confirmation
Account") into which it shall deposit an amount equal to the Debtor's
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reasonable, good faith estimate of the Allowed Amounts of all then unsatisfied
Special Administrative Expense Claims. The Reorganized Debtor shall invest those
funds in the Confirmation Account subject to the provisions of section 345 of
the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court. Monies
shall be disbursed from the Confirmation Account only to satisfy Allowed Special
Administrative Expense Claims or as otherwise ordered by the Bankruptcy Court.
Neither the Debtor nor Reorganized Debtor shall have any interest in the cash
deposited in the Confirmation Account, such cash being deposited solely for the
benefit of holders of Allowed Special Administrative Claims. To the extent that
cash remains in the Confirmation Account after all Special Administrative
Expense Claims have been allowed and paid, the Bankruptcy Court, upon the
request of the Reorganized Debtor, may order the release of such cash balance to
the Reorganized Debtor.
6.2. Issuance and Distribution of New Secured Notes and Cancellation of
Old Secured Notes.
(a) On the Effective Date, the Reorganized Debtor shall issue New
Secured Notes in the principal face amount of $23.1 million, $21.45 million for
distribution to the Indenture Trustee for the benefit of holders of Class 2
Claims as hereinafter provided, $1,100,000 for distribution to holders of
Allowed Class 4 Claims and $550,000 for distribution to the Key Officers in
partial payment of their Confirmation Payment. For purposes of making
distributions to holders of Old Secured Notes under the Plan, the Indenture
Trustee shall be deemed to be the sole holder of all Allowed Claims evidenced by
the Old Secured Notes under the Old Indenture. Accordingly, all distributions on
account of such Old Secured Notes shall be distributed to the Indenture Trustee,
for further distribution to holders of the Old Secured Notes, pursuant to the
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terms of the Old Indenture (including, without limitation, any terms providing
rights and claims of the Indenture Trustee such as claims for fees and
reimbursement of expenses). Subject to this Section 6.2 and Section 12.9, the
provisions of the Old Indenture shall govern the holding of undeliverable
distributions and the delivery of distributions to holders of such Allowed
Claims. To the extent not satisfied pursuant to paragraph 12.3 hereof, any fees
and reimbursable expenses of the Indenture Trustee may be payable from the
distributions made to the Indenture Trustee as and to the extent specifically
provided by the Old Indenture.
(b) In accordance with the terms of the Amended Indenture, the
Guarantor will guaranty payment of the obligations under the New Secured Notes.
In addition, the pledge of collateral by the Guarantor of the Old Secured Notes
will secure the payment of all of the Reorganized Debtor's obligations under the
New Secured Notes. The Amended Indenture provides that the pledge of Collateral
by the Guarantor respecting the Old Secured Note shall, upon the Effective Date,
be released and fully subordinated to the pledge of collateral by the Guarantor
securing the New Secured Notes. Moreover, pursuant to Section 9.3 and 9.4 of the
Plan the Guarantor shall be released from the Old Guaranty and all holders of
Old Secured Notes and their transferees, successors and assigns shall, upon the
occurrence of the Effective Date, be permanently enjoined from taking any action
to enforce the Old Guaranty. It is possible that pursuant to Section 10.2 of the
Indenture respecting the Old Secured Notes, prior to the amendments contemplated
under this Plan (the "Old Indenture"), the holders of 66 2/3 % of the
outstanding Old Secured Notes may modify the Guaranty under Article XIII of the
Old Indenture. Accordingly, the acceptance of the Plan by 66 2/3 % of the
outstanding Old Secured Notes will be deemed an agreement and consent by the
holders of the Old Secured Notes to
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modify Article XIII of the Old Indenture to render the Old Guaranty satisfied
and unenforceable upon the Effective Date.
(c) No holder of Old Secured Notes shall be entitled to receive any
distribution from the Indenture Trustee respecting such Old Secured Note unless
and until such holder shall have first either (i) surrendered or caused to be
surrendered to the Indenture Trustee the original Old Secured Note held by such
holder, or (ii) if such holder is unable to surrender its original Old Secured
Note because the same has been lost, destroyed, stolen or mutilated, (A)
furnished the Indenture Trustee with an executed affidavit of loss, destruction,
theft or mutilation in a form that is reasonably acceptable to the Indenture
Trustee and the Reorganized Debtor, and (B) provided to the Indenture Trustee
such security or indemnity as may be reasonably required by the Indenture
Trustee and the Reorganized Debtor, Promptly upon surrender of the Old Secured
Notes or such affidavit and such security or indemnity to be deemed to have
surrendered such Old Secured Notes, the Indenture Trustee shall cancel such Old
Secured Notes and deliver such canceled Old Secured Notes to the Reorganized
Debtor or otherwise dispose of such securities in such manner as the Reorganized
Debtor may request. On the Effective Date, any default or Event of Default
existing under the Old Indenture or any related document that does not
constitute a continuing Event of Default under the Amended Indenture shall be
deemed waived by the Indenture Trustee and the Noteholders.
(d) Any holder of Old Secured Notes that fails to surrender
its securities or to provide an affidavit and adequate security or indemnity to
be deemed to have surrendered such securities within two years of the Effective
Date shall be conclusively deemed to have no further Claims against the Debtor
and all such property not claimed by such holder shall be distributed
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Pro Rata to all other holders of Old Secured Notes under the Old Indenture who
have complied with this Section 6.2.
(e) On the Effective Date, the obligations of the Debtor and the
Reorganized Debtor under the Old Secured Notes shall be deemed canceled,
discharged, terminated and of no further force or effect. Notwithstanding the
foregoing, such cancellation shall not impair the rights of holders of the Old
Secured Notes to receive distributions on account of such Claims as provided in
this Plan, nor shall such cancellation impair the rights of the Indenture
Trustee to compensation and indemnity under the applicable provisions of the Old
Indenture until all distributions are made to holders of Old Secured Notes as
provided herein.
(f) Upon entry of the Confirmation Order, the rights, liens, and
interests granted to recipients of the New Secured Notes shall be deemed valid
and perfected as to the amounts and priorities established under this Plan
without further order of the Bankruptcy Court, and without the need for any
documentation or filing with appropriate recording offices. Notwithstanding the
foregoing, the Reorganized Debtor shall prepare and deliver to the Indenture
Trustee under the Amended Indenture any and all documents or writings that the
Indenture Trustee may reasonably request to evidence and perfect the rights,
liens, and interests granted under this Plan, the Amended Indenture, or any
related security documents.
6.3. Issuance and Distribution of New Common Stock and Cancellation of
Old Common Stock.
(a) On the Effective Date, the Reorganized Debtor shall issue
the aggregate amount of 2,000,000 shares of New Common Stock in accordance with
the terms of the Plan.
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The New Common Stock shall be subject to the provisions and restrictions of the
New Certificate of Incorporation.
(b) On the Effective Date all Old Common Stock and all unexercised
rights to acquire shares of common stock or preferred stock of the Debtor by way
of option, warrant or other legal or contractual rights shall be automatically
canceled and deemed to be void.
(c) As of the close of business on the Stock Record Date, the transfer
ledgers for Old Common Stock shall be closed, and there shall be no further
changes in the record holders of any such securities. The Debtor shall have no
obligation to recognize any transfer of any of the Old Common Stock occurring on
or after the Stock Record Date. The Debtor and the Stock Transfer Agent shall be
entitled to recognize and deal for all purposes hereunder with only those record
holders stated on the transfer ledgers of the Stock Transfer Agent as of the
close of business on the Stock Record Date.
(d) The holder of each Class 5 Interest shall not be entitled to any
distribution under this Plan unless and until such holder shall have first
surrendered, or caused to be surrendered, to the Debtor or the Reorganized
Debtor, as the case may be (or any transfer agent designated by the Debtor or
Reorganized Debtor, as the case may be) the original such security held by it
or, in the event that such original security shall have been lost, destroyed,
stolen or mutilated, executed and delivered an affidavit of loss and indemnity
with respect thereto in form customarily utilized for such purposes that is
reasonably satisfactory to the Debtor or the Reorganized Debtor, as the case may
be, and, in the event the Debtor so requests, furnished a
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bond in form and substance (including, without limitation, amount) reasonably
satisfactory to the Debtor or the Reorganized Debtor, as the case may be.
(e) The Reorganized Debtor or the Debtor, as the case may be, shall
have the option (the "Regulatory Sale Option"), in its sole and absolute
discretion, to cause the purchase on or soon as practicable after the Effective
Date and on any applicable Distribution Date thereafter, from any Person
otherwise entitled to distribution of New Common Stock under the Plan, the
Common Stock allocated to such Person, in the event the Debtor believes, in its
sole and absolute discretion that ownership of New Common Stock by such Person
could have an adverse effect on the Debtor's ability to maintain its existing
Gaming Licenses or obtain new Gaming Licenses in the future. In order to
exercise the Regulatory Sale Option, the Debtor must send written notice to the
Person of the Debtor's intention to exercise the Regulatory Sale Option on or
before the later of (i) the Effective Date, and (ii) the tenth (10th) day
following the day on which such creditor's claim becomes an Allowed Claim. In
the event the Regulatory Sale Option is exercised, such holder shall have a
period of ten (10) Business Days in which to transfer its shares of New Common
Stock into a liquidating trust (each a "Liquidating Trust") administered by an
independent trustee appointed by the Board of Directors of the Reorganized
Debtor who shall, under the terms of the Liquidating Trust, be required to sell
or otherwise transfer within a period of twelve months all of the New Common
Stock required to be divested hereunder. All net cash proceeds derived from the
sale of the New Common Stock shall be delivered to the transferor. Failure to
divest itself of its shares prior to the expiration of such ten (10) Business
Day period shall result in the immediate forfeiture and cancellation of such
shares. Any shares forfeited or cancelled pursuant to this Section 6.3(e) shall
be delivered promptly to the
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Reorganized Debtor for cancellation. Any Liquidating Trust established hereunder
shall provide that, unless the prior written approval of the Board of Directors
of the Reorganized Debtor is obtained, which may be granted or denied in its
sole discretion, the independent trustee may only sell the New Common Stock in
open market transactions. Immediately upon the Debtor or the Reorganized Debtor
transmitting written notice to a shareholder of its intent to exercise the
Regulatory Sale Option, the New Common Stock in question shall no longer be
entitled to any voting, dividend or other rights, if any, until such time as the
New Common Stock has been appropriately transferred to the Liquidating Trust (in
which case the independent trustee will have the exclusive right to vote such
securities. The Reorganized Debtor shall be entitled to recover its attorneys
fees and costs incurred in connection with any proceeding brought by the
Reorganized Debtor for failure of a holder of New Common Stock to comply with
the provisions of this Section 6.3(e). The Regulatory Sale Option is not
intended to otherwise detract from or minimize the Debtor's and Reorganized
Debtor's rights under its Certificate or Incorporation and the New Certificate
of Incorporation.
6.4. Assuring Management Continuity. In order to induce the Key
Officers to remain with the Debtor during the restructuring process and to
reward them for maintaining and enhancing the value of the Debtor's assets and
business for the benefit of the Debtor's creditors and shareholders, the
Reorganized Debtor shall distribute to the Key Officers on the Effective Date,
the Confirmation Payment, in such proportion to each Key Officer as the Board of
Directors of the Debtor shall determine, provided, however, that the allocation
of such cash, notes and shares shall be consistent with any understandings
existing between and among the Debtor and its Key
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Officers. In addition, the Reorganized Debtor shall distribute to the Key
Officers 3.34% of the issued and outstanding shares of New Common Stock on the
Effective Date and 3.33% of the then issued and outstanding shares of common
stock of the Reorganized Debtor on each of the first and second year
anniversaries of the Effective Date. In the event either of the Key Officers is
deemed to have waived his entitlement to New Secured Notes, under such Key
Officers' Employment Agreement, such New Secured Notes shall immediately become
property of the Reorganized Debtor and shall be held in treasury and shall not
be redistributed except in accordance with the terms of the Amended Indenture.
6.5. Manner of Payments Under the Plan. At the option of the
Reorganized Debtor, any cash payment required to be made by the Debtor or
Reorganized Debtor, as the case may be, pursuant hereto may be made by a check
or wire transfer or as otherwise required or provided in applicable agreements.
ARTICLE VII.
CORPORATE ACTION
INCIDENT TO PLAN IMPLEMENTATION
7.1. New Certificate of Incorporation. On the Effective Date, the
Reorganized Debtor will amend its certificate of incorporation to adopt the New
Certificate of Incorporation, which certificate of incorporation shall comply
with section 1123(a)(6) of the Bankruptcy Code.
7.2. Cancellation of Old Secured Notes and Modification of Old
Indenture. On the Effective Date, any and all obligations of the Debtor
respecting each outstanding Old
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Secured Note shall, as against the Debtor and each of the guarantors thereunder,
be canceled, terminated and cease in their entirety, except for the obligation
to make distributions of property under the Plan. On the Effective Date, the Old
Indenture shall be modified and amended pursuant to the terms of this Plan and
shall continue in full force and effect respecting each New Secured Note.
7.3. Cancellation of Equity Securities. All Old Equity Securities shall
be automatically canceled and deemed to be void as of the Effective Date,
without further corporate authority or action.
7.4. Adoption of Post-Confirmation Employee Incentive Plan. On the
Effective Date, the Reorganized Debtor shall be deemed to have adopted the
Post-Confirmation Employee Incentive Plan, without further corporate authority
or action.
7.5. Board of Directors. As of the Effective Date, the Board of
Directors of the Reorganized Debtor shall consist of a minimum of three and a
maximum of seven members. Initially, the following individuals shall serve as
the Board of Directors of the Reorganized Debtor:
(a) Edward M. Tracy;
(b) Col. Clinton L. Pagano; and
(c) William S. Papazian.
The Noteholder Steering Committee will designate four additional
persons to serve on the Board of Directors of the Reorganized Debtor. The
Reorganized Debtor and the
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Noteholders Steering Committee designees will use their best efforts to seek and
obtain the appropriate licensing to allow the Noteholders Steering Committee
designees to serve on the Board of Directors. Once licensed, the Noteholder
designees shall be added to the Board of Directors. Except with the consent of a
majority of the Board of Directors, each of the Noteholders Steering Committee
designees must meet at all times the following minimum qualifications or shall
be disqualified from service on the Board of Directors of the Reorganized
Debtor:
1. The designee shall not (a) have any conflict of interest that would
impair such designee's ability to serve fairly and impartially, (b);
otherwise have a material equity interest in or relationship with an
entity that is in direct competition with the Reorganized Debtor, or (c)
currently serve as an officer or director of a gaming company; and
2. The designee generally shall be of good character and reputation.
7.6. NASDAQ Listing. The Reorganized Debtor shall use its best efforts
to obtain a listing for the New Common Stock on NASDAQ or on some comparable
stock exchange.
7.7. Other Corporate Action. On the Effective Date, by reason of the
entry of the Confirmation Order, the Debtor and Reorganized Debtor, as the case
may be, shall be deemed to have obtained all necessary corporate authority to
take such additional actions as may be reasonably necessary to implement the
Plan.
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ARTICLE VIII.
ALLOWANCE OF CLAIMS
8.1. Claims of Noteholders. The Debtor believes that, as of the Filing
Date, the Claims of the Noteholders, as evidenced by the Old Secured Notes, and
giving effect to distributions received by the Noteholders on account of the
guarantee executed by Crescent City Capital Development Corp. of the Old Secured
Notes, exceed $100 million. The Old Secured Notes are collateralized by
substantially all of the assets of the Debtor. As of the Filing Date, the amount
of principal and interest outstanding on the Old Secured Notes was $104,688,850,
and the value of the Noteholders' collateral for the Old Secured Notes was not
less than $24,000,000. Accordingly, on the Effective Date, the Indenture
Trustee, for the benefit of the Noteholders, shall be allowed a Class 2 Claim in
the Allowed Amount of $24 million, and a Class 4 Claim in the Allowed Amount of
$80,688,850 million. On the Effective Date, the Allowed Noteholder Claims shall
not be subject to, or the subject of, an objection, claim, counterclaim, set
off, defense, motion or proceeding by the Debtor, Reorganized Debtor, any
statutory committee, or of any other party in interest, whether in law or in
equity.
8.2. Substantial Contribution Claim of Noteholders Steering Committee's
Counsel. In recognition of the substantial contribution made to this Chapter 11
Case by the Noteholders Steering Committee, the Debtor has agreed that it will
support the allowance of a "substantial contribution" Claim under section
503(b)(4) of the Bankruptcy Code in favor of said committee's counsel, Andrews &
Kurth, L.L.P. of up to $175,000 provided, however, that the Debtor has reserved
its right to contest such claim on any basis other than that the Noteholders
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Steering Committee failed to make a substantial contribution in the Chapter 11
Case. Such "substantial contribution" claim shall constitute a Special
Administrative Expense Claim.
8.3. Bar Date for Objections to Claims. Unless additional time
is granted by Order of the Bankruptcy Court, all objections to Claims must be
filed prior to sixty (60) days following the Confirmation Date. The objecting
party shall be the Debtor or Reorganized Debtor, as the case may be, or any
creditor or creditor representative with the consent of the Debtor or
Reorganized Debtor, unless the Bankruptcy Court shall authorize another
party-in-interest to file an objection. Any objecting party shall serve a copy
of each objection upon the holder of the Claim or Interest to which it pertains,
upon the Debtor or Reorganized Debtor, as the case may be, and upon counsel
designated for such purpose by the Creditors' Committee.
8.4. Reserves. On or soon as practicable after the Effective
Date, the Reorganized Debtor shall reserve for the account of each holder of a
Disputed Claim or Disputed Interest, that property which would otherwise be
distributable to such holder on such date in accordance with the Plan or such
Disputed Claim or Disputed Interest and Allowed Claim or Allowed Interest, as
applicable on such date, in the Face Amount thereof. If and to the extent such
Disputed Claim or Disputed Interest becomes an Allowed Claim or Allowed
Interest, the property so reserved for the holder thereof, together with any
proceeds thereon shall be distributed to such holder in accordance with the
Plan. If, the Disputed Claim or Disputed Interest is disallowed by Final Order,
the property so reserved for the holder thereof, together with any proceeds
thereon, shall be distributed in accordance with the Plan to the holders of
Claims or Interests in the Class in which such Disputed Claim or Disputed
Interest would have been had it been an Allowed Claim or Allowed Interest on the
first to occur of (i) the first
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Subsequent Distribution Date thereafter in which the Reorganized Debtor
determines that sufficient property is available for distribution to make
meaningful distributions to the holders of Claims or Interests in such Class or
(ii) the last Distribution Date after all Disputed Claims in Class 4 have been
resolved.
ARTICLE IX.
EFFECT OF CONFIRMATION
9.1. Revesting of Property. Except as otherwise expressly provided
herein, on the Effective Date, title to all property of the Debtor's estate
shall revest in the Debtor (except as set forth in the Plan) free and clear of
all liens, Claims, charges and Interests arising on or before the Confirmation
Date and other rights and interests of holders of Claims and Interests. Subject
to the provisions of the Plan, the Reorganized Debtor may continue in existence
free of any restriction imposed by the Bankruptcy Code or the Bankruptcy Court.
9.2. Discharge. Except as otherwise provided herein or in the
Confirmation Order, the occurrence of the Effective Date shall operate as a
discharge, pursuant to section 1141(d)(1) of the Bankruptcy Code, effective as
of the Effective Date, of any and all debts of and Claims against the Debtor
that arose at any time prior to the Confirmation Date, including, but not
limited to, all principal and interest, whether accrued before, on or after the
Filing Date, any and all liabilities or obligations of the Debtor under the Old
Indenture. On and after the Effective Date, as to every discharged debt and
Claim, the Person that held such debt or Claim shall be precluded from asserting
against the Reorganized Debtor, or against the Reorganized Debtor's
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assets or properties, any other or further Claim based upon any document,
instrument or act, omission, transaction or other activity of any kind or nature
that occurred prior to the Confirmation Date.
9.3. Releases. Except as otherwise provided in the Plan, the Covered
Persons are released from any and all claims or liabilities (including claims by
the Debtor), arising from actions taken in their capacity as such, and from any
and all Claims, obligations, rights, causes of action and liabilities which any
holder of a Claim against or Interest in the Debtor may be entitled to assert,
whether known or unknown, foreseen or unforeseen, existing or hereafter arising
based in whole or in part upon any act or omission, transaction or other
occurrence taking place on or before the Effective Date in any way relating to
the Debtor, the Chapter 11 Case, or the Plan, including, without limitation, any
Claims of equitable subordination or similar assertions; provided that such
releases shall exclude claims arising from willful misconduct, gross negligence
or defalcation and Joint Trade Claims against any subsidiary of the Debtor.
(a) Except as otherwise expressly provided herein or the
Confirmation Order, on the Effective Date, each holder of any Claim against the
Debtor receiving, or entitled to receive, payments or distributions pursuant to
the Plan on account of such Claim, shall be deemed to have forever waived,
released and discharged all rights, causes of action and claims, in law or in
equity, whether based on tort, fraud, contract or otherwise, which they
heretofore or hereafter possessed or may possess against any Covered Person
arising in any manner from (i) the issuance, offering or sale of any interest in
any of the Old Secured Notes or the amendment of any term of the Old Indenture,
(ii) the disclosure made by any Covered Person in any document used in
connection with the issuance, offering or sale of any interest in any of the Old
Secured
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Notes, or the amendment of any term of the Old Indenture, (iii) the due
diligence undertaken by any Covered Person in connection with the issuance,
offering and sale of any interest in any of the Old Secured Notes or the
amendment of any term of the Old Indenture, or (iv) as against any Covered
Person, such holder's acquisition, ownership or disposition of any interest in
any of the Old Secured Notes (together, the "Released Claims"). From and after
the Effective Date, any such right, cause of action or Claim against any Covered
Person shall, without the necessity for any further action by, or notice to, any
holder, automatically be relinquished, conceded, extinguished, canceled and
terminated as a result of the waiver, release and discharge contained in this
paragraph 9.3 and the Confirmation Order shall provide that such holders, with
respect to any such rights, causes of action and Claims, will be permanently
enjoined on and after the Effective Date from acting or proceeding in any
manner, including without limitation, commencing, conducting or continuing in
any manner, directly or indirectly any suit, action or proceeding of any kind
(including, without limitation, any thereof in a judicial, arbitral,
administrative or other forum against any Covered Person) in derogation of the
release contemplated by this paragraph 9.3, provided that the foregoing, solely
as to any Covered Person, may be subject to review by the court having
jurisdiction in respect of such proceeding.
(b) Following the Effective Date, neither the Debtor, the
Reorganized Debtor, the Creditors' Committee, the Noteholders' Steering
Committee, the Indenture Trustee, nor any of the members of such committee, nor
any of their respective officers, directors, employees or agents (acting in such
capacity), nor any professional persons employed by any of them, shall have or
incur any liability or obligation to any Person for any action taken or omitted
to be taken in connection with or related to the formulation, preparation,
dissemination, implementation,
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confirmation or consummation of the Plan, the related Disclosure Statement, or
any contract, release, or other agreement or document created or entered into,
or any other action taken or omitted to be taken in connection with the Plan;
provided, however, that the provisions of this sentence shall have no effect on
the liability of any Person that would otherwise result from an action or
omission to the extent that such action or omission is determined in a Final
Order to have constituted gross negligence or willful misconduct. (c) In
consideration for, among other things, the guaranty by the Guarantor of the New
Secured Notes and the pledge of collateral securing the payment by the
Reorganized Debtor of all obligations under the New Secured Notes, each
Noteholder, and its transferees, successors and assignees shall be deemed to
have forever waived, released and discharged all rights, causes of action and
claims, in law or in equity, against the Guarantor arising out of the Old
Guaranty or the Old Secured Notes.
9.4. Survival and Assignment of Avoidance Actions. Except as expressly
provided herein, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtor shall retain and may enforce any claims, rights and causes of
action that the Debtor or its estate may hold, including, without limitation,
any claims, rights or causes of action, under section 544 through 550,
inclusive, of the Bankruptcy Code (collectively, "Avoidance Actions"). On the
Effective Date, the Reorganized Debtor shall transfer to the Creditors'
Committee all of the Avoidance Actions and with respect thereto, the Creditors'
Committee shall be deemed a representative of the Debtor's estate under section
1123(b)(3). Any net recoveries from the Avoidance Actions shall be distributed
by the Creditors' Committee Pro Rata to holders of Allowed Class 4 Claims. Such
distributions shall be made from time to time in the discretion of
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the Creditors' Committee. All Avoidance Actions must be commenced by no later
than sixty (60) days after the Effective Date, unless otherwise ordered by the
Bankruptcy Court, or shall be deemed waived.
9.5. Injunction. Except as otherwise expressly provided herein, the
Confirmation Order will provide that, following the Effective Date, all Persons
who have held, hold or may hold Claims or Interests, with respect to any such
Claim or Interest, shall be permanently enjoined on and after the Effective Date
from: (a) commencing, conducting or continuing in any manner any suit, action or
other proceeding of any kind (including, without limitation, any thereof in a
judicial, arbitral, administrative or other forum) against the Debtor or
Reorganized Debtor, any of its property, or any direct or indirect transferee of
any property of, or direct or indirect successor in interest to, any of the
foregoing Persons, or any property of any such transferee or successor, (b)
enforcing, levying, attaching (including, without limitation, any pre-judgment
attachment), collecting or otherwise recovering by any manner or means, of any
judgment, award, decree or order against the Debtor or Reorganized Debtor, any
of its property, or any direct or indirect transferee of any property of, or
direct or indirect successor in interest to, any of the foregoing, or any
property of any such transferee or successor, (c) creating, perfecting or
otherwise enforcing in any manner, directly or indirectly, any encumbrance of
any kind against the Debtor or Reorganized Debtor, any of its property, or any
direct or indirect transferee of any property of, or successor in interest to,
any of the foregoing, (d) asserting any setoff, right of subrogation or
recoupment of any kind, directly or indirectly, against any obligation due the
Debtor or Reorganized Debtor, any of the property of the Debtor or the
Reorganized Debtor, or any direct or indirect transferee of any property of, or
successor in interest to, any of the
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foregoing, or (e) acting or proceeding in any manner, in any place whatsoever,
that does not conform to or comply with the provisions of the Plan and the
Confirmation Order. Notwithstanding anything herein to the contrary, nothing in
this paragraph 9.4 or elsewhere in this Plan shall in any way affect or impair
any rights or causes of action against any Person other than any Covered Person.
Upon the Effective Date, all Noteholders and their respective transferees,
successors and assigns shall be permanently enjoined from the commencing,
conducting or continuing in any manner whatsoever any action to recover from the
Guarantor any amounts owing under the Old Guaranty or the Old Secured Notes.
9.6. Indemnification. To facilitate the expeditious and effective
reorganization of the Debtor, the Reorganized Debtor shall indemnify, hold
harmless and reimburse any present and former director, officer or employee
pursuant to the provisions of its certificate of incorporation and by-laws and
applicable provisions of the laws of New Jersey from and against any and all
losses, claims, damages, liabilities and actions, asserted or filed against such
persons for, by reason of, arising from, in connection with, involving, or
related to services rendered or acts or omissions to act in those capacities
relating to or arising out of the facts and claims alleged or asserted, or which
could have been alleged or asserted prior to the Confirmation Date. In addition,
the Reorganized Debtor shall indemnify the members of the Noteholders Steering
Committee for their participation in such capacity in the Debtor's chapter 11
case. The indemnifications provided hereunder shall survive confirmation of the
Plan and shall not be discharged pursuant to section 1141 of the Bankruptcy
Code. The Reorganized Debtor shall pay any legal or other expenses reasonably
incurred by such indemnified party in connection with this indemnification or
the enforcement thereof. In no event shall the indemnification provided
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hereunder extend to claims or liabilities asserted and found by a court of
competent jurisdiction to arise from willful misconduct, gross negligence or
defalcation by the Person seeking indemnification.
9.7. Limitation on Transfer of New Common Stock.
(a) Subject to further review of federal securities laws and
regulations in conjunction with the securities law exemptions under
Bankruptcy Code ss. 1145, New Jersey corporate laws and federal income tax
law, the by-laws and articles of incorporation of the Reorganized Debtor
will be amended, (or, if New Jersey law prohibits the inclusion of part or
all of the following restrictions in the by-laws or articles of
incorporation of the Reorganized Debtor, creditor Parties and the
Reorganized Debtor this Plan shall constitute a contractual agreement
between the Reorganized Debtor and each holder of New Common Stock and their
respective successors and assigns with respect to the restrictions which
cannot under Delaware law be included in the by-laws or articles of
incorporation), to provide for the restrictions on transfers of the common
stock of the Reorganized Debtor hereinafter set forth.
The Reorganized Debtor's certificate of incorporation shall also
provide that sales or other transfers made in violation of such restrictions
shall be null and void.
1. Definitions
(a) The term "5% Holder" means any persons or entity that owns, or that
is treated as owning after application of the constructive stock ownership
rules of Section
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382(1)(3) of the Code five (5%) percent or more of the New Common Stock of
Reorganized Debtor immediately following the Effective Date of the Proposed
Plan.
(b) The term "Non-5% Holder" means any person that is not a 5% Holder.
(c) The term "the Code" mean the Internal Revenue Code of 1986, as
1986, as amended and the Treasury Regulations (final, temporary and
proposed) issued thereunder.
(d) The term "Transfer", when applied to any of the New Common Stock,
Stock, means to issue, sell, transfer, pledge, encumber, grant an option
with respect to, or otherwise dispose of an interest in such stock, but only
if such transaction would result in a change in the ownership of such stock
after application of the constructive stock ownership rules of section
382(1)(3) of the Code.
(e) The term "Gatekeeper" means the person or persons appointed by the
appointed by the Board of Directors of the Reorganized Debtor to exercise
the powers set forth below.
(f) The term "Restriction Period" means the time period beginning on
beginning on the Effective Date and ending on the date determined under
paragraph (5), below.
(g) The term "Initial Allotment" means that number of shares of New of
New Common Stock owned by a person immediately following the Effective Date.
(h) The term "Acquire", when applied to any shares of the New Common
Common Stock, means to purchase or otherwise acquire such stock. The term
"Acquire" includes any acquisition of an interest in stock, including
acquisition of an option to acquire stock,
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if such acquisition would result in a change in the ownership of such stock
after application of the constructive stock owner ship rules of Section
382(1)(3) of the Code.
(i) The term "person" includes both entities and natural persons.
2. Rules Applicable to 5% Holders
During the Restriction Period, each 5% Holder may Transfer up to five (5%)
percent of its Initial Allotment to any person, without the consent of the
Gatekeeper (hereinafter, such 5% Holder's "Unrestricted Shares"). A 5% Holder
that Transfers any of its Unrestricted Shares shall, however, notify the
Gatekeeper in writing of such Transfer within 10 days of the Transfer. During
the Restriction Period, no 5% Holder may Transfer any part of its Initial
Allotment in excess of its Unrestricted Shares without the consent of the
Gatekeeper, which consent is to be granted or denied as set forth in paragraph
(4) below.
At any time during the Restriction Period, any 5% Holder (hereinafter, the
"Assignor") may assign to any other 5% Holder (hereinafter, the "Assignee") the
right to Transfer, without the consent of the Gatekeeper, an amount of shares
equal to or less than the Assignor's Unrestricted Shares that have not, as of
the date of the assignment, been Transferred. In the event of such as
assignment, the Assignor's Unrestricted Shares shall be reduced, and the
Assignee's Unrestricted Shares shall be increased, for all purposed of this
agreement, by the amount of shares the right to the Transfer of which has been
assigned. The Assignor shall give notice to the Gatekeeper of any assignment
under this paragraph within 10 days of such assignment.
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If any 5% Holder reduces its ownership of stock at any time during the
Restriction Period to any amount that is less than its Initial Allotment, such
5% Holder shall not thereafter Acquire any shares of the common stock of the
Reorganized Debtor during the Restriction Period.
In order to ensure compliance with the restrictions on 5% Holders, unless
otherwise waived by the Reorganized Debtor, all shares of New Common Stock
issuable to any 5% Holder in excess of such 5% Holder's Unrestricted Shares,
shall be issued to and may be voted by such 5% Holders but shall be held in
escrow by an escrow agent. Such shares shall continue to be held in escrow until
released to such 5% Holder at the end of the Restriction Period, or, if sooner,
upon consent of the Gatekeeper.
3. Rules Applicable to Non-5% Holders
No restrictions shall apply to any Transfer of the New Common Stock by a
Non-5% Holder.
4. Consent of the Gatekeeper
The Board of Directors of the Reorganized Debtor shall appoint a person or
persons to serve as Gatekeeper. The Gatekeeper shall be responsible for
considering requests for the Transfer of stock by 5% Holders in excess of their
Unrestricted Shares, as provided in this paragraph (4). The Reorganized Debtor
shall indemnify the Gatekeeper against any liability to any person for any
action taken in the exercise of its discretion under this paragraph (4).
Neither the Reorganized Debtor nor any 5% Holder shall issue, sell,
transfer, pledge, encumber, receive a pledge or encumbrance of, grant or acquire
an option with respect to, or
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otherwise dispose of or acquire an interest in any common stock of the
Reorganized Debtor (other than, in the case of a 5% Holder, its Unrestricted
Shares and, in the case of the Reorganized Debtor, securities issued under the
Post-Confirmation Employee Incentive Plan and securities issued pursuant to this
Plan) without obtaining a prior determination from the Gatekeeper as to whether
such transaction constitutes a Transfer of such stock within the meaning of
paragraph (1)(d). If the Gatekeeper determines that such transaction constitutes
a Transfer of such stock, in the case of a proposed transaction by the
Reorganized Debtor, the Gatekeeper shall notify the Board of Directors of such
determination, and in the case of a proposed transaction by a 5% Holder, the
restrictions of this paragraph (4) shall apply.
Upon application (hereinafter, the "Application") by any 5% Holder
(hereinafter, the "Applicant") for the Gatekeeper's consent to the Transfer of
any shares of New Common Stock held by such 5% Holder in excess of such 5%
Holder's Unrestricted Shares, the Gatekeeper shall send notice to all 5% Holders
(including the Applicant) of the Application (hereinafter a "Notice of
Application"). Such Notice of Application shall specify the number of shares for
which the Applicant seeks approval. Within 10 days of the Notice Effective Date
(as hereinafter defined) of such Notice of Application, any other 5% Holder may
notify (hereinafter a "Notification") the Gatekeeper that it requests the right
to Transfer a specified amount of its Initial Allotment, which shall not exceed
its Initial Allotment multiplied by a fraction. The numerator of such fraction
shall be the number of shares specified in the Application and the denominator
of such fraction shall be the Initial Allotment of the Applicant.
Following the expiration of such 10-day period, the Gatekeeper shall
make a determination as to whether the Transfer of all of the shares specified
in the Application and all
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Notifications would create an unreasonable risk of loss of, or material
limitation on, the Reorganized Debtor's use of its net operating loss
carryforwards. Such determination shall be made in the Gatekeeper's sole
discretion after reviewing all information available to it, including, but not
limited to, all Form 13-d's filed with the Securities and Exchange Commission.
If the Gatekeeper determines that the Transfer of all such shares would not
create an unreasonable risk of loss of, or material limitation on, the
Reorganized Debtor's use of its net operating loss carryforwards, it shall
notify the Applicant and all other 5% Holders of its consent to such Transfers
(hereinafter a "Notice of Final Consent"). If the Gatekeeper determines that it
cannot consent to all proposed Transfers, it shall determine the maximum number
of shares the Transfer of which it can approve (hereinafter, the "Maximum
Amount") without creating an unreasonable risk of loss of, or material
limitation on, the Reorganized Debtor's use of its net operating loss
carryforwards. The Maximum Amount shall be allocated among the Applicant and the
other 5% Holders that submitted Notifications to the Gatekeeper in accordance
with this paragraph (4), if any, as follows. The Applicants shall be permitted
to sell that proportion of the Maximum Amount Equal to the ratio that the number
of shares specified in the Application bears to the sum of the number of shares
specified in such Application and all of the Notifications submitted to the
Gatekeeper in accordance with this paragraph (4), if any, shall be permitted to
sell that proportion of the Maximum Amount equal to the ratio that the number of
shares specified in such Notification bears to the sum described in the
preceding sentence. The Gatekeeper shall send Notice of Final Consent to the
Applicant and such other 5% Holder or 5% Holders, if any, of the number of
shares that each may sell based on the foregoing calculations, which Notice
shall constitute final consent to the Transfer of such shares.
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The Transfer of any shares of stock pursuant to a Notice of Final Consent
shall be completed, (i) in the case of a 5% Holder that has submitted a
Notification not later than the later of (a) 35 days after the Notice Effective
Date of the relevant Notice of Final Consent and (b) 45 days after the Notice
Effective Date of the relevant Notice of Application and (ii) in the case of the
Applicant, not later than 35 days after the Notice Effective Date of the
relevant Notice of Final Consent. Each 5% Holder that Transfers shares pursuant
to a Notice of Final Consent shall give notice to the Gatekeeper that such
Transfer has been completed within 5 days after the Transfer has been completed.
If any such Transfer has not been completed by the end of the relevant time
period (as determined under the first sentence of this paragraph), final consent
shall be deemed to have been withdrawn as to such Transfer. If a 5% Holder that
submitted a Notification does not complete such a Transfer by the end of the
relevant time period, the Gatekeeper shall consent to the Transfer by the
Applicant pursuant to the relevant Notice of Final Consent) equal to the number
of shares the Transfer of which was not completed. In no event, however, shall
the Gatekeeper consent to the Transfer by the Applicant of a number of shares
that, in the aggregate, exceeds the number of shares specified in the
Application. The Gatekeeper shall notify the Applicant and all other 5% Holders
that it has consented to the Transfer of such additional shares (hereinafter, an
"Amended Notice of Final Consent"). The Applicant shall complete the Transfer of
such additional shares within 10 days after the Notice Effective Date of the
Amended Notice of Final Consent, and if it does not do so, consent to the
Transfer of such additional shares shall be deemed to be withdrawn.
The Gatekeeper shall use its best efforts to take all actions required
under this paragraph (4) as promptly as practicable.
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5. Restriction Period
Except as otherwise provided in this paragraph (5), the Restriction Period
shall end on the date that is two years after the Effective Date.
If the Reorganized Debtor determines either that (A) the Plan does not
qualify under Section 382(1)(5) of the Code (the "Bankruptcy Exception") or (B)
chooses to make an election under Section 382(1)(5)(H) of the Code not to have
the Bankruptcy Exception apply to the Plan, then the Restriction Period shall
end immediately upon notification thereof by the Gatekeeper to all 5% Holders.
The Board of Directors may, in its sole discretion, determine that the
Restriction Period shall end prior to the date that is two years after the
Effective Date if it determines (A) the restrictions are no longer necessary to
avoid a loss of the Reorganized Debtor's net operating loss carryforwards, (B)
significant net operating loss carryforwards are no longer available to, or
reasonably usable by, the Reorganized Debtor for any reason, including through
passage of time, usage, restriction or disallowance, or (C) preservation of the
net operating loss carryforwards is no longer in the best interests of the
Reorganized Debtor and its shareholders.
The Board of Directors may, in its sole discretion, determine that the
Restriction Period is to extend beyond the date that is two years after the
Effective Date, if the Board determines that such extension of the Restriction
Period would be in the best interests of the Reorganized Debtor and its
shareholders. In no event, however, will the Restriction Period end later than
the date that is three years after the Effective Date.
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ARTICLE X.
CONDITIONS PRECEDENT
10.1. Conditions to Confirmation. The following conditions must be
satisfied or waived pursuant to Section 10.3 hereof prior to confirmation of the
Plan:
(a) the Confirmation Order shall be in form and substance reasonably
satisfactory to the Debtor; and
(b) the Confirmation Order shall be in form and substance reasonably
satisfactory to the Noteholders Steering Committee;
(c) the Debtor has extended the terms of the Key Officers' existing
employment agreements with the Debtor, as modified, for terms of three (3) years
from the Effective Date.
10.2. Conditions to the Occurrence of the Effective Date. It is a
condition precedent to the occurrence of the Effective Date, that the
Confirmation Order shall have become a Final Order.
10.3. Waiver of Conditions. Without limiting any benefits to the Debtor
of the doctrine of mootness, the Debtor may at any time, without any notice to
any Person, without leave or Order and without any other formal action, waive
any condition set forth in Section 10.1(a) or 10.2 hereof. The Noteholders
Steering Committee may at any time, without leave or Order and without any other
action, waive any condition set forth in Section 10.1(b) hereof.
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ARTICLE XI.
RETENTION OF JURISDICTION
Notwithstanding the confirmation of the Plan or the occurrence of the
Effective Date, the Bankruptcy Court shall retain jurisdiction of the chapter 11
case with respect to the following matters:
(a) to determine the Allowed amount of any Disputed Claims;
(b) to determine requests for payment of Claims entitled to
priority under section 507(a)(1) of the Bankruptcy Code,
including compensation of and reimbursement of expenses of
parties entitled thereto;
(c) to resolve controversies and disputes regarding
interpretation and implementation of the Plan including,
without limitation, the determination of the status of any
contract of the Debtor claimed by any Person to constitute an
executory contract thereof as of the Filing Date and the
resolution of any disputes concerning whether any Person had
sufficient notice of the chapter 11 case, any applicable
claims bar date, the hearing on the approval of the
Disclosure Statement as containing adequate information, the
hearing on the confirmation of this Plan for the purpose of
determining whether a Claim or Interest is discharged
hereunder or for any other purposes;
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(d) to enter orders in aid of the Plan, including, without
limitation, appropriate orders (which may include contempt or
other sanctions) to protect the Debtor and Reorganized
Debtor;
(e) to modify the Plan or remedy any apparent defect or omission
in the Plan;
(f) to determine any and all applications, objections to, claims,
adversary proceedings and contested or litigated maters
pending on the confirmation Date or as filed pursuant to the
Bankruptcy Code or order of the Bankruptcy Court, including,
without limitation, proceedings and matters filed subsequent
to the Confirmation Date that could have been filed prior to
the Confirmation Date and which are authorized to be
commenced under section 1123(b) of the Bankruptcy Code;
(g) to allow, disallow, estimate, liquidate or determine any
Claim and to enter or enforce any order requiring the filing
of any such Claim before a particular date;
(h) to determine any and all pending applications for the
rejection or disaffirmance of executory contracts or leases,
or for the assignment of assumed executory contracts and
leases, and to hear and determine, and if need be to
liquidate, any and all Claims arising therefrom; and
(i) to enter a final decree closing the Chapter 11 Case.
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ARTICLE XII.
ADDITIONAL PROVISIONS
12.1. Revocation. The Debtor reserves the right to revoke and withdraw
this Plan at any time prior to the Effective Date.
12.2. Effect of Revocation. If the Debtor revokes or withdraws the Plan
prior to the Effective Date, or if the Effective Date does not occur, then the
Plan shall be deemed null and void. In such event, nothing contained in this
Plan shall be deemed to constitute a waiver or release of any Claims by or
against the Debtor or any other Person or to prejudice in any manner the right
of the Debtor or any Person in any further proceedings involving the Debtor.
12.3. Certain Administrative Expenses. As more fully set forth in a
stipulation filed with the Bankruptcy Court, the Debtor has agreed to pay to the
Indenture Trustee under the Old Indenture, in full and complete satisfaction of
all Administrative Expense Claims which could be asserted thereby in respect of
the Debtor's Chapter 11 case, the amount of $125,000, subject to the receipt by
the Debtor of adequate documentation therefor. In consideration of the
foregoing, the Indenture Trustee under the Old Indenture has agreed to (i) limit
claims in respect of all such Administrative Expenses to an amount not to exceed
$125,000; and (ii) waive any and all claims for indemnity, contribution or
reimbursement (whether pre- or post-Effective Date) against the Debtor in excess
of $125,000; provided, however, that nothing herein shall be deemed to waive the
Indenture Trustee's charging lien or any other right to reimbursement of its
expenses out of Plan Distributions or funds held by the Indenture.
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12.4. Committees. All officially appointed committees shall terminate
on the Effective Date except that the Creditors' Committee shall remain in
existence with respect to the commencement and prosecution of any Avoidance
Actions assigned to the Creditors' Committee pursuant to Section 9.4 of the
Plan; provided, that, unless otherwise approved by the Advisory Committee (as
such term is defined in the Amended Indenture), the Reorganized Debtor shall not
be obligated to pay more than $35,000 in the aggregate for the reasonable costs
and expenses, including professional fees, incurred by the Creditors' Committee
after the Effective Date with respect to the commencement and prosecution of the
Avoidance Actions and the distribution of proceeds therefrom. The Debtor shall
pay such reasonable costs and expenses up to the limits set forth herein without
the need for further Bankruptcy Court Order upon presentment of invoices by the
Creditors' Committee.
12.5. Headings. The headings used in the Plan are inserted for
convenience only and neither constitute a portion of this Plan nor in any manner
affect the provisions of this Plan.
12.6. Successors and Assigns. The rights and obligations of any Person
named or referred to in the Plan shall be binding upon and inure to the benefit
of the successors and assigns of such Person.
12.7. Governing Law. Except to the extent the Bankruptcy Code or
Bankruptcy Rules are applicable, 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 New Jersey without regard to the principles of conflict of
law thereof.
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12.8. Notices. Any notice, demand, claim or other communication under
this Plan shall be in writing and shall be deemed to have been given upon
personal delivery thereof, or upon the fifth (5th) day following mailing
thereof, if sent by registered mail, return receipt requested, postage prepaid,
to the last known address of the party to whom such notice is given.
12.9. Unclaimed Cash or Securities. Except as otherwise expressly
provided herein and subject to Section 6.2 of the Plan, if any Person entitled
to receive cash or securities under the Plan cannot be located, or has not
provided the Debtor with the documents required as a condition precedent to
receiving distributions under the Plan, within two (2) years after the Effective
Date, such cash or securities and accrued interest or dividends thereon will
become the property of and shall be released to the Debtor. Nothing contained in
this Plan shall require the Debtor or Reorganized Debtor to attempt to locate
any such Person.
12.10. Rounding. Whenever any payment of a fraction of a cent would
otherwise be called for, the actual payment shall reflect a rounding of such
fraction to the nearest whole cent, with one-half cent being rounded up to the
nearest whole cent. To the extent Cash remains undistributed as a result of the
rounding of such fraction to the nearest whole cent, such Cash shall be treated
as unclaimed property under Section 12.9 of the Plan. Whenever any distribution
of a fraction of a share of New Common Stock would otherwise be called for, the
actual distribution will reflect a rounding of such fraction down to the nearest
whole number of shares. Whole shares of New Common Stock not distributed because
of this provision of the Plan will be treated as unclaimed securities under
Section 12.9 of the Plan. In addition, any amount of New Secured Notes issuable
upon the Effective Date in denominations below $100 shall be rounded down to the
nearest $100.
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12.11. Admissibility. In the event the Confirmation Order is not
entered or the Plan is not confirmed, the provisions of this Plan shall be of no
force or effect. Any statement made herein by the Debtor shall be deemed to be a
statement made in connection with a settlement or compromise and, as provided in
Rule 408 of the Federal Rules of Evidence, shall not be admissible in any
subsequent proceeding.
12.12. Time. In computing any period of time prescribed or allowed by
this Plan, the day of the act or event from which the designated period begins
to run shall not be included. The last day of the period so computed shall be
included, unless it is a Saturday, a Sunday or a legal holiday, in which event
the period runs until the end of the next succeeding day which is not one of the
aforementioned days. With respect to any distribution to be made on the
Effective Date, such distribution shall be deemed timely made if made within
five (5) Business Days of the Effective Date.
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12.13. Use of Pronouns. As used in the Plan, singular terms shall
include the plural, plural terms shall include the singular and masculine
pronouns shall include all pronouns.
CAPITAL GAMING INTERNATIONAL, INC.
By: /s/ William S. Papazian
----------------------------------
William S. Papazian
Vice President and General Counsel
Dated: March 19, 1997
Atlantic City, New Jersey
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CAPITAL GAMING INTERNATIONAL, INC.
Exhibit "A" To Plan Of Reorganization
Amended and Restated Indenture