EXHIBIT 99.2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- ----------------------------------------------X
IN RE: : Chapter 11
:
NUTRITIONAL SOURCING CORPORATION : Case No. 02-12550 (PJW)
:
DEBTOR. :
- ----------------------------------------------X
REORGANIZATION PLAN OF NUTRITIONAL SOURCING CORPORATION
Michael B. Solow
Harold D. Israel
KAYE SCHOLER LLC
Three First National Plaza
70 West Madison Street, Suite 4100
Chicago, Illinois 60602
Telephone: (312) 583-2300
Facsimile: (312) 583-2360
Richard W. Riley
William K. Harrington
DUANE MORRIS LLP
1100 North Mark Street
Suite 1200
Wilmington, DE 19801
Telephone: (302) 657-4900
Facsimile: (302) 657-4901
Attorneys for Nutritional Sourcing Corporation
Dated: Wilmington, Delaware
January 31, 2003
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME..........................................1
A. SCOPE OF DEFINITIONS; RULES OF CONSTRUCTION.....................................................1
B. DEFINITIONS.....................................................................................2
1.1 "ADDITIONAL CASH CONSIDERATION"...............................................2
1.2 "ADMINISTRATIVE CLAIM"........................................................2
1.3 "ALLOWED CLAIM"...............................................................2
1.4 "ALLOWED".....................................................................2
1.5 "ALLOWED CLASS . . . CLAIM"...................................................2
1.6 "ALLOWED CLASS . . . INTEREST"................................................2
1.7 "ALTERNATIVE PLAN"............................................................2
1.8 "ALTERNATIVE PLAN CONSIDERATION"..............................................2
1.9 "ALTERNATIVE PLAN NOTES"......................................................3
1.10 "AMENDED CERTIFICATE OF INCORPORATION AND BYLAWS OF NSC"......................3
1.11 "BALLOT"......................................................................3
1.12 "BANKRUPTCY CODE".............................................................3
1.13 "BANKRUPTCY COURT"............................................................3
1.14 "BANKRUPTCY RULES"............................................................3
1.15 "BAR DATE(S)".................................................................3
1.16 "BENCHMARKS"..................................................................3
1.17 "BENCHMARK DEFAULT"...........................................................3
1.18 "BUDGET"......................................................................3
1.19 "BUSINESS DAY"................................................................3
1.20 "CASH"........................................................................4
1.21 "CASH CONSIDERATION"..........................................................4
1.22 "CASH USAGE EVENT"............................................................4
1.23 "CHAPTER 11 CASE".............................................................4
1.24 "CLAIM".......................................................................4
1.25 "CLASS".......................................................................4
1.26 "COLLATERAL"..................................................................4
1.27 "COMMITTEE"...................................................................4
1.28 "COMMON STOCK"................................................................4
1.29 "CONFIRMATION"................................................................4
1.30 "CONFIRMATION DATE"...........................................................4
1.31 "CONFIRMATION ORDER"..........................................................4
1.32 "CONSUMMATION DATE"...........................................................4
1.33 "CONSUMMATION DEADLINE".......................................................4
1.34 "CREDIT DOCUMENTS"............................................................4
1.35 "CREDIT PARTIES"..............................................................5
1.36 "CREDITOR"....................................................................5
1.37 "DEBTOR"......................................................................5
1.38 "DEPOSIT ACCOUNT".............................................................5
1.39 "DEPOSIT DATE"................................................................5
1.40 "DIRECTION LETTER"............................................................5
1.41 "DISBURSING AGENT"............................................................5
1.42 "DISCLOSURE STATEMENT"........................................................5
i
1.43 "DISPUTED CLAIM"..............................................................5
1.44 "DISTRIBUTION DATE"...........................................................6
1.45 "DISTRIBUTION RECORD DATE"....................................................6
1.46 "DISTRIBUTION RESERVE"........................................................6
1.47 "EQUITY CONTRIBUTION".........................................................6
1.48 "EQUITY SECURITIES"...........................................................6
1.49 "ESTATE"......................................................................6
1.50 "EXCESS PREPAYMENT PENALTY"...................................................6
1.51 "EXCESS PREPAYMENT PENALTY EXCEPTIONS"........................................6
1.52 "EXISTING EQUITY".............................................................7
1.53 "EXCLUSIVITY ORDER"...........................................................7
1.54 "EXTENSION AGREEMENT".........................................................7
1.55 "EXTENSION DOCUMENTS".........................................................7
1.56 "FACE AMOUNT".................................................................7
1.57 "FINAL ORDER".................................................................7
1.58 "IMPAIRED"....................................................................7
1.59 "INDENTURE TRUSTEE"...........................................................7
1.60 "INSIDER".....................................................................8
1.61 "INSIDER CLAIMS"..............................................................8
1.62 "INITIAL LENDERS".............................................................8
1.63 "INTERCOMPANY CLAIMS".........................................................8
1.64 "INTERCOMPANY LIENS"..........................................................8
1.65 "INTERCREDITOR AGREEMENT".....................................................8
1.66 "INTEREST"....................................................................8
1.67 "LENDER SECURED CLAIMS".......................................................8
1.68 "LENDER"......................................................................8
1.69 "LIEN"........................................................................8
1.70 "LITIGATION CLAIMS"...........................................................8
1.71 "LOAN AND SECURITY AGREEMENT".................................................8
1.72 "NEW COMMON STOCK"............................................................9
1.73 "NEW INDENTURE TRUSTEE".......................................................9
1.74 "NEW LENDER"..................................................................9
1.75 "NEW LOAN FACILITY"...........................................................9
1.76 "NEW SECURITIES"..............................................................9
1.77 "NEW SENIOR NOTE INDENTURE"...................................................9
1.78 "NEW SENIOR NOTES"............................................................9
1.79 "NSC".........................................................................9
1.80 "OPERATING SUBSIDIARIES".....................................................10
1.81 "PEI"........................................................................10
1.82 "PERSON".....................................................................10
1.83 "PETITION DATE"..............................................................10
1.84 "PLAN".......................................................................10
1.85 "PLAN SUPPLEMENT"............................................................10
1.86 "PRIMARY PLAN"...............................................................10
1.87 "PRIMARY PLAN CONSIDERATION".................................................10
1.88 "PRIORITY TAX CLAIM".........................................................10
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1.89 "PROFESSIONAL"...............................................................10
1.90 "PROFESSIONAL FEE CLAIM".....................................................10
1.91 "PRO RATA"...................................................................10
1.92 "PUEBLO".....................................................................10
1.93 "REGISTRATION RIGHTS AGREEMENT"..............................................10
1.94 "REINSTATED" OR "REINSTATEMENT"..............................................11
1.95 "RELEASED PARTIES"...........................................................11
1.96 "REORGANIZED DEBTOR".........................................................11
1.97 "REQUIRED PROCEDURES"........................................................11
1.98 "RESTRUCTURING"..............................................................11
1.99 "SCHEDULES"..................................................................11
1.100 "SECURED CLAIM"..............................................................12
1.101 "SECURITIES ACT".............................................................12
1.102 "SENIOR NOTE CLAIM"..........................................................12
1.103 "SENIOR NOTE HOLDER".........................................................12
1.104 "SENIOR NOTE INDENTURE"......................................................12
1.105 "SENIOR NOTES"...............................................................12
1.106 "SETOFF CLAIM"...............................................................12
1.107 "STOCK OPTIONS"..............................................................12
1.108 "SUBORDINATED LIEN"..........................................................12
1.109 "SUBORDINATED STOCK PLEDGE"..................................................12
1.110 "SUBSTANTIAL CONTRIBUTION CLAIM".............................................12
1.111 "SUCCESSOR LENDER"...........................................................12
1.112 "TOTAL CASH CONSIDERATION"...................................................12
1.113 "UNIMPAIRED CLAIM"...........................................................13
1.114 "UPDATE CALLS"...............................................................13
1.115 "WARRANTS"...................................................................13
C. RULES OF INTERPRETATION........................................................................13
1. GENERAL...............................................................................13
2. RULE OF "CONTRA PROFERENTUM" NOT APPLICABLE...........................................13
D. COMPUTATION OF TIME............................................................................13
ARTICLE II. CLASSIFICATION OF CLAIMS AND INTERESTS...............................................................14
A. INTRODUCTION...................................................................................14
B. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN).........................................14
1. ADMINISTRATIVE CLAIMS.................................................................14
2. PRIORITY TAX CLAIMS...................................................................14
C. UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE ACCEPTED THE PLAN AND, THEREFORE, NOT ENTITLED TO
VOTE)..........................................................................................14
1. CLASS 1: LENDER SECURED CLAIMS.......................................................14
2. CLASS 3 INTERCOMPANY CLAIMS...........................................................14
3. CLASS 5: EQUITY SECURITIES INTERESTS.................................................14
D. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (CLASS 2 IS ENTITLED TO VOTE ON THE PLAN)............14
1. CLASS 2: SENIOR NOTE CLAIMS..........................................................14
2. CLASS 4 INSIDER CLAIMS................................................................15
3. CLASS 5: EQUITY SECURITIES INTERESTS.................................................15
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ARTICLE III. TREATMENT OF CLAIMS AND INTERESTS...................................................................15
A. UNCLASSIFIED CLAIMS............................................................................15
1. ADMINISTRATIVE CLAIMS.................................................................15
2. PRIORITY TAX CLAIMS...................................................................15
B. UNIMPAIRED CLASSES OF CLAIMS...................................................................16
1. CLASS 1: LENDER SECURED CLAIMS.......................................................16
2. CLASS 3: INTERCOMPANY CLAIMS.........................................................16
3. CLASS 5: EQUITY SECURITIES INTEREST..................................................16
C. IMPAIRED CLASSES OF CLAIMS.....................................................................16
1. CLASS 2: SENIOR NOTE CLAIMS..........................................................16
2. CLASS 4: INSIDER CLAIMS...............................................................17
3. CLASS 5: EQUITY SECURITIES INTEREST..................................................17
D. SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS..................................................17
ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN.................................................................17
A. CONTINUED CORPORATE EXISTENCE..................................................................17
B. CORPORATE ACTION...............................................................................17
1. CANCELLATION OF SENIOR NOTES AND SENIOR NOTE INDENTURE................................17
2. AMENDED CERTIFICATE OF INCORPORATION AND BY-LAWS......................................18
3. OTHER GENERAL CORPORATE MATTERS.......................................................18
C. RESTRUCTURING TRANSACTIONS.....................................................................19
1. NEW SECURITIES........................................................................19
D. DIRECTORS AND OFFICERS.........................................................................19
E. REVESTING OF ASSETS............................................................................19
F. PRESERVATION OF RIGHTS OF ACTION; SETTLEMENT OF LITIGATION CLAIMS..............................20
G. EXCLUSIVITY PERIOD.............................................................................20
H. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS...................................................20
I. EXEMPTION FROM CERTAIN TRANSFER TAXES..........................................................20
ARTICLE V. ACCEPTANCE OR REJECTION OF THE PLAN...................................................................21
A. CLASSES ENTITLED TO VOTE.......................................................................21
B. ACCEPTANCE BY IMPAIRED CLASSES.................................................................21
ARTICLE VI. SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN..................................................21
ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS..................................................................21
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE CONSUMMATION DATE...................................21
B. INTEREST ON CLAIMS.............................................................................22
C. DISBURSING AGENT...............................................................................22
D. SURRENDER OF SECURITIES OR INSTRUMENTS.........................................................22
E. INSTRUCTIONS TO DISBURSING AGENT...............................................................23
F. SERVICES OF INDENTURE TRUSTEES, AGENTS, AND SERVICERS..........................................23
G. RECORD DATE FOR DISTRIBUTIONS TO HOLDERS OF DEBT SECURITIES....................................23
H. MEANS OF CASH PAYMENT..........................................................................23
I. DELIVERY OF DISTRIBUTIONS......................................................................23
J. FRACTIONAL DOLLARS; DE MINIMIS DISTRIBUTIONS...................................................24
K. WITHHOLDING AND REPORTING REQUIREMENTS.........................................................24
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L. CALCULATION OF DISTRIBUTION AMOUNTS OF NEW COMMON STOCK........................................24
M. SETOFFS........................................................................................24
ARTICLE VIII. PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS.............................25
A. OBJECTION DEADLINE; PROSECUTION OF OBJECTIONS..................................................25
B. NO DISTRIBUTIONS PENDING ALLOWANCE.............................................................25
C. DISTRIBUTION RESERVE...........................................................................25
D. DISTRIBUTIONS AFTER ALLOWANCE..................................................................25
ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN....................................26
A. CONDITIONS TO CONFIRMATION.....................................................................26
B. CONDITIONS TO CONSUMMATION.....................................................................26
C. WAIVER OF CONDITIONS...........................................................................29
ARTICLE X. MODIFICATIONS AND AMENDMENTS..........................................................................29
ARTICLE XI. RETENTION OF JURISDICTION............................................................................29
ARTICLE XII. COMPROMISES AND SETTLEMENTS.........................................................................31
ARTICLE XIII. MISCELLANEOUS PROVISIONS...........................................................................31
A. BAR DATES FOR CERTAIN CLAIMS...................................................................31
1. ADMINISTRATIVE CLAIMS: SUBSTANTIAL CONTRIBUTION CLAIMS...............................31
2. PROFESSIONAL FEE CLAIMS...............................................................31
B. PAYMENT OF STATUTORY FEES......................................................................32
C. SEVERABILITY OF PLAN PROVISIONS................................................................32
D. SUCCESSORS AND ASSIGNS.........................................................................32
E. RELEASES AND SATISFACTION OF SUBORDINATION RIGHTS..............................................32
F. DISCHARGE OF THE DEBTOR........................................................................33
G. COMMITTEE......................................................................................33
H. EXCULPATION AND LIMITATION OF LIABILITY........................................................33
I. PERMANENT INJUNCTION...........................................................................34
J. RELEASES.......................................................................................34
K. BINDING EFFECT.................................................................................34
L. REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION....................................................34
M. PLAN SUPPLEMENT................................................................................35
N. NOTICES........................................................................................35
O. INDEMNIFICATION OBLIGATIONS....................................................................36
P. PREPAYMENT.....................................................................................36
Q. TERM OF INJUNCTIONS OR STAY....................................................................36
R. REGISTRATION RIGHTS AGREEMENT..................................................................37
S. HART-SCOTT-RODINO COMPLIANCE...................................................................37
T. ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND INTEREST................................37
U. GOVERNING LAW..................................................................................38
v
INTRODUCTION
Nutritional Sourcing Corporation ("NSC" or the "Debtor") hereby
proposes the following reorganization plan (the "Plan") for the resolution of
its outstanding creditor Claims (as that term is defined herein) and equity
Interests. Reference is made to the Disclosure Statement (as that term is
defined herein), distributed contemporaneously herewith, for a discussion of the
Debtor's history, business, properties, results of operations, projections for
future operations, risk factors, a summary and analysis of the Plan, and certain
related matters, including the New Securities to be issued under the Plan. The
Debtor is the proponent of this Plan within the meaning of Section 1129 of the
Bankruptcy Code (as that term is defined herein).
This Plan is comprised of two plans. Under the first plan, referred to
in the Plan as the Primary Plan, holders of unsecured Claims against the Debtor
will receive consideration consisting of cash and notes, and the existing equity
holder will retain its stock in the Debtor. Under the second plan, referred to
in the Plan as the Alternative Plan, the holders of unsecured Claims against the
Debtor will receive consideration consisting of alternative notes and 100% of
the newly issued common stock in the Debtor. The Alternative Plan can only be
implemented if the Debtor fails to achieve any of the Benchmarks and the
Committee issues the Direction Letter. A vote on the Plan is a vote on both the
Primary Plan and the Alternative Plan. Each term that is capitalized in this
paragraph is defined in the Plan.
All holders of Claims and Interests are encouraged to read this Plan
and the Disclosure Statement in their entirety before voting to accept or reject
this Plan. Subject to certain restrictions and requirements set forth in Section
1127 of the Bankruptcy Code and Fed. R. Bankr. P. 3019 and those restrictions on
modifications set forth in Article X of this Plan, the Debtor reserves the right
to alter, amend, modify, revoke or withdraw this Plan prior to its substantial
consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. SCOPE OF DEFINITIONS; RULES OF CONSTRUCTION
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings ascribed to them in Article 1 of this Plan. Any term used in
this Plan that is not defined herein, but is defined in the Bankruptcy Code or
the Bankruptcy Rules, shall have the meaning ascribed to that term in the
Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such
terms shall include the plural as well as the singular number. The masculine
gender shall include the feminine, and the feminine gender shall include the
masculine.
1
B. DEFINITIONS
1.1 "Additional Cash Consideration" means $1.5 million deposited by one
of the Operating Subsidiaries into the Deposit Account on each Deposit Date,
proof of such deposit shall be provided by the Debtor to the Committee within
two (2) Business Days after each deposit is made.
1.2 "Administrative Claim" means a Claim for payment of an
administrative expense of a kind specified in Section 503(b) of the Bankruptcy
Code and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy
Code, including, but not limited to, (a) the actual, necessary costs and
expenses, incurred after the Petition Date, of preserving the Estate and
operating the business of the Debtor, (b) Professional Fee Claims, (c) all fees
and charges assessed against the Estate under chapter 123 of title 28, United
States Code.
1.3 "Allowed Claim" means a Claim or any portion thereof (a) as to
which no objection to allowance or request for estimation has been interposed on
or before the Consummation Date or the expiration of such other applicable
period of limitation fixed by the Bankruptcy Code, Bankruptcy Rules, or the
Bankruptcy Court, (b) as to which any objection to its allowance has been
settled, waived through payment, or withdrawn, or has been denied by a Final
Order, (c) that has been allowed by a Final Order, (d) as to which the liability
of the Debtor, and the amount thereof are determined by final order of a court
of competent jurisdiction other than the Bankruptcy Court, or (e) that is
expressly allowed in a liquidated amount in the Plan; PROVIDED, HOWEVER, that
with respect to an Administrative Claim, "Allowed Claim" means an Administrative
Claim as to which a timely request for payment has been made in accordance with
Article XIII.A.1 of this Plan (if such written request is required) or other
Administrative Claim, in each case as to which the Debtor (1) has not interposed
a timely objection or (2) has interposed a timely objection and such objection
has been settled, waived through payment. or withdrawn, or has been denied by a
Final Order.
1.4 "Allowed" means when used in reference to a Claim or Interest
within a particular Class, an Allowed Claim or Allowed Interest of the type
described in such Class.
1.5 "Allowed Class . . . Claim" means an Allowed Claim in the
particular Class described.
1.6 "Allowed Class . . . Interest" means an Interest in the particular
Class described (a) that has been allowed by a Final Order, (b) for which (i) no
objection to its allowance has been filed within the periods of limitation fixed
by the Bankruptcy Code or by any Final Order of the Bankruptcy Court or (ii) any
objection to its allowance has been settled or withdrawn, or (c) that is
expressly allowed in the Plan.
1.7 "Alternative Plan" means, in the event the Committee issues the
Direction Letter, an alternative plan that will result in the holders of Class 2
Claims receiving the Alternative Plan Consideration, and the holder of the Class
5 Interest receiving nothing on account of its Equity Interests.
1.8 "Alternative Plan Consideration" means (i) the Alternative Plan
Notes and (ii) 100% of the New Common Stock.
2
1.9 "Alternative Plan Notes" means the 12% Alternative Plan Notes due
2009 of the Reorganized Debtor, in the aggregate principal amount not to exceed
$125 million, secured by the Subordinated Lien and the Subordinated Stock
Pledge, to be issued and distributed pursuant to the Alternative Plan on the
Distribution Date and governed by the terms of the New Senior Note Indenture, as
more fully described in Article VI hereof; provided that the drawn amount on the
effective date of the Alternative Plan under the new loan facility for the
Operating Subsidiaries shall not exceed $35 million (net of excess cash).
1.10 "Amended Certificate of Incorporation and Bylaws of NSC" means the
Reorganized Debtor's certificate of incorporation and bylaws in effect under the
laws of the State of Delaware, as amended by the Plan, substantially in the form
of Exhibit A to the Plan.
1.11 "Ballot" means each of the ballot forms distributed to each holder
of an Impaired Claim or Interest on which the holder is to indicate acceptance
or rejection of this Plan.
1.12 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
codified in title 11 of the United States Code, 11 U.S.C. ss.ss. 101-1330, as
now in effect or hereafter amended.
1.13 "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Delaware or such other court as may have jurisdiction over the
Chapter 11 Case.
1.14 "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, the Federal
Rules of Civil Procedure, as amended, as applicable to the Chapter 11 Case or
proceedings therein, and the Local Rules of the Bankruptcy Court, as applicable
to the Chapter 11 Case or proceedings therein, as the case may be.
1.15 "Bar Date(s)" means the date(s), if any, designated by the
Bankruptcy Court as the last dates for filing proofs of Claim against the
Debtor.
1.16 "Benchmarks" means the requirement that the Debtor (i) obtain an
order approving the Disclosure Statement on or before April 14, 2003, (ii)
obtain the Confirmation Order on or before May 30, 2003, (iii) obtain a
commitment letter for a New Loan Facility on or before July 31, 2003, (iv)
replenish the Deposit Account if a Cash Usage Event has occurred on or before
the Consummation Date, and (v) consummate the Plan on or before the Consummation
Deadline.
1.17 "Benchmark Default" means (i) the Debtor's failure to achieve any
one of the Benchmarks or (ii) the Debtor's or Existing Equity's breach of any
material obligation under the Exclusivity Order.
1.18 "Budget" means the budget provided to the Committee dated December
27, 2003, as such budget may be supplemented from time to time, after providing
three Business Days notice to the Committee of such supplemental budget and the
rationale therefore.
1.19 "Business Day" means any day, excluding Saturdays, Sundays or
"legal holidays" (as defined in Fed. R. Bankr. P. 9006(a)), on which commercial
banks are open for business in New York, New York.
3
1.20 "Cash" means legal tender of the United States or equivalents
thereof.
1.21 "Cash Consideration" means $51 million, a portion of which shall
consist of the Equity Contribution.
1.22 "Cash Usage Event" means, after the Debtor has complied with the
Required Procedures, the Operating Subsidiaries, in their business judgment, use
some or all of the cash in the Deposit Account prior to the Consummation Date
for an unanticipated expense that is not included in the Budget but is required
for the operation of such subsidiary's business.
1.23 "Chapter 11 Case" means the Chapter 11 case of NSC.
1.24 "Claim" means a claim against the Debtor, whether or not asserted,
as defined in Section 101(5) of the Bankruptcy Code.
1.25 "Class" means a category of holders of Claims or Interests, as
described in Article II below.
1.26 "Collateral" means any property or interest in property of the
Debtor's Estate subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable state law.
1.27 "Committee" means the committee of unsecured Creditors appointed
pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11 Case.
1.28 "Common Stock" means NSC common stock, par value $.01 per share,
together with any options, warrants, or rights, contractual or otherwise, to
acquire or receive any such stock, including, but not limited to, the Stock
Options and Warrants.
1.29 "Confirmation" means entry by the Bankruptcy Court of the
Confirmation Order.
1.30 "Confirmation Date" means the date of entry by the clerk of the
Bankruptcy Court of the Confirmation Order.
1.31 "Confirmation Order" means the order entered by the Bankruptcy
Court confirming the Plan.
1.32 "Consummation Date" means the Business Day on which all conditions
to the consummation of the Plan as set forth in Article IX.B hereof have been
satisfied or waived as provided in Article IX.C hereof and is the effective date
of the Plan.
1.33 "Consummation Deadline" means the earlier of the Consummation Date
and September 30, 2003.
1.34 "Credit Documents" means, collectively (a) the Loan and Security
Agreement; (b) the Extension Documents; (c) each other security agreement or
pledge agreement entered into pursuant to the Loan and Security Agreement or
4
other documents designated as a "Credit Document" in the Loan and Security
Agreement, and (d) each other agreement that creates or purports to create or
perfect a Lien in favor of the Lender.
1.35 "Credit Parties" means Debtor, Pueblo, PEI, Xtra Super Foods
Centers, Inc., Xtra Merger Corporation, Caribad, Inc., and All Truck, Inc.
1.36 "Creditor" means any Person who holds a Claim against the Debtor.
1.37 "Debtor" means NSC, including in its capacity as
debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code,
and as reorganized hereunder.
1.38 "Deposit Account" means a segregated bank account established by
one of the Operating Subsidiaries into which each payment of Additional Cash
Consideration shall be deposited. If the Alternative Plan is consummated, the
Deposit Account shall remain property of the Operating Subsidiaries.
1.39 "Deposit Date" means the fifth Business Day following the last day
of each four (4) week accounting period commencing with the accounting period
ending on January 25, 2003 and terminating on the date the Plan is consummated;
PROVIDED that if the Plan is to be consummated prior to the Deposit Date in any
four (4) week accounting period, the Debtor shall cause a pro rata deposit with
respect to such period to be made into the Deposit Account immediately prior to
the date on which the Plan is consummated.
1.40 "Direction Letter" means a letter dated on or after the date of a
Benchmark Default addressed to counsel to the Debtor from counsel to the
Committee informing the Debtor that the Committee has determined to proceed with
the Alternative Plan.
1.41 "Disbursing Agent" means the Reorganized Debtor or any party
designated by the Reorganized Debtor, in its sole discretion, to serve as a
disbursing agent under the Plan.
1.42 "Disclosure Statement" means the written disclosure statement that
relates to the Plan, dated January 31, 2003, as amended, supplemented, or
modified from time to time, and that is prepared and distributed in accordance
with Sections 1125 and 1126(b) of the Bankruptcy Code and Fed. R. Bankr. P.
3018.
1.43 "Disputed Claim" means any Claim not otherwise Allowed or paid
pursuant to the Plan or an order of the Bankruptcy Court (a) which has been or
hereafter is listed on the Schedules as unliquidated, contingent, or disputed,
and which has not been resolved by written agreement of the parties or an order
of the Bankruptcy Court, (b) proof of which was required to be filed by order of
the Bankruptcy Court but as to which a proof of Claim was not timely or properly
filed, (c) proof of which was timely and properly filed and which has been or
hereafter is listed on the Schedules as unliquidated, disputed or contingent,
(d) that is disputed in accordance with the provisions of this Plan, or (e) as
to which the Debtor has interposed a timely objection or request for estimation
in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any orders of
the Bankruptcy Court, or is otherwise disputed by the Debtor in accordance with
applicable law, which objection, request for estimation, or dispute has not been
withdrawn or determined by a Final Order; PROVIDED, HOWEVER, that for purposes
of determining whether a particular Claim is a Disputed Claim prior to the
expiration of any period of limitation fixed for the interposition by the Debtor
5
of objections to the allowance of Claims, any Claim that is not identified by
the Debtor as an Allowed Claim shall be deemed a Disputed Claim.
1.44 "Distribution Date" means the date, occurring as soon as
practicable after the Consummation Date, upon which distributions are made by
the Reorganized Debtor to holders of Administrative, Priority Tax, and Classes 1
and 2 Claims; PROVIDED, HOWEVER, that in no event shall the Distribution Date
occur later than twenty (20) Business Days after the Consummation Date.
1.45 "Distribution Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed Claims, which date
shall be the fifth (5th) Business Day following the Confirmation Date.
1.46 "Distribution Reserve" means the reserve, if any, established and
maintained by the Reorganized Debtor, into which the Reorganized Debtor shall
deposit the amount of Cash or other property that would have been distributed by
the Reorganized Debtor on the Distribution Date to holders of (a) Disputed
Claims, (b) contingent liquidated Claims, if such Claims had been undisputed or
noncontingent Claims on the Distribution Date, pending (i) the allowance of such
Claims, (ii) the estimation of such Claims for purposes of allowance or (iii)
the realization of the contingencies, and (c) unliquidated Claims, if such
Claims had been liquidated on the Distribution Date, such amount to be estimated
by the Bankruptcy Court or agreed upon by the Debtor or Reorganized Debtor, as
the case may be, and the holders thereof as sufficient to satisfy such
unliquidated Claim upon such Claim's (x) allowance, (y) estimation for purposes
of allowance, or (z) liquidation, pending the occurrence of such estimation or
liquidation.
1.47 "Equity Contribution" means Existing Equity's contribution to the
Cash Consideration in amount not to be less than $15 million.
1.48 "Equity Securities" means, collectively, the Common Stock, Stock
Options, and Warrants, together with any options, warrants, or rights,
contractual or otherwise, to acquire or receive any such stock or ownership
interests, including, but not limited to, the Options, the Warrants and any
contracts or agreements pursuant to which the non-debtor party was or could have
been entitled to receive shares of stock or other ownership interests in NSC.
1.49 "Estate" means the estate of NSC in the Chapter 11 Case, created
pursuant to Section 541 of the Bankruptcy Code.
1.50 "Excess Prepayment Penalty" means Existing Equity's obligation to
pay any prepayment penalty on account of a change of control owed to Successor
Lender in excess of $2.4 million if the Excess Prepayment Penalty becomes due
and owing on account of (A) Existing Equity's decision not to make the Equity
Contribution or (B) the Debtor's failure to achieve any Benchmark. Existing
Equity's obligation to pay the Excess Prepayment Penalty terminates on July 30,
2003.
1.51 "Excess Prepayment Penalty Exceptions" means the following
exceptions, upon the occurrence of which Existing Equity shall have no
obligation to pay the Excess Prepayment Penalty: (i) the Committee's failure to
issue a Direction Letter by July 30, 2003, (ii) the Successor Lender's waiver of
6
its right to receive the Excess Prepayment Penalty or otherwise declines to
enforce the prepayment penalty provision related to a change of control; or
(iii) the Debtor's failure to achieve any Benchmark; provided that such failure
is caused by, or is the result of, (1) an objection filed by any creditor to the
Disclosure Statement, the Plan, or any other motion or document related thereto;
or (2) the incapacitation or unavailability of the bankruptcy judge, or a
natural disaster, terrorist attack or any other act of a similar type or nature
that renders it impossible for the Bankruptcy Court to timely rule on the
Disclosure Statement or the Plan.
1.52 "Existing Equity" means the holder of the Equity Securities as of
the Petition Date.
1.53 "Exclusivity Order" means that certain order entered by the
Bankruptcy Court on January 28, 2003 granting the Debtor's motion pursuant to
section 1121(d) of the Bankruptcy Code for an order extending the Debtor's
exclusive periods to file a plan and submit acceptances thereof.
1.54 "Extension Agreement" means that certain Extension and
Modification Agreement by and between the Credit Parties and Successor Lender
dated January 31, 2003, as such agreement may be amended and supplemented from
time to time thereafter.
1.55 "Extension Documents" means the Extension Agreement, that certain
Guarantee executed by the Debtor in favor of Successor Lender, that certain
Guarantor General Security Agreement executed by Debtor in favor of the
Successor Lender and all other documents required by Successor Lender to secure
the Credit Parties' payment of their obligations under the Extension Agreement
and perfect Successor Lender's security interest in the Collateral granted to it
in the Extension Documents.
1.56 "Face Amount" means (a) when used in reference to a Disputed
Claim, the full stated amount claimed by the holder of such Claim in any proof
of Claim timely filed with the Bankruptcy Court or otherwise deemed timely filed
by any Final Order of the Bankruptcy Court or other applicable bankruptcy law,
and (b) when used in reference to an Allowed Claim, the allowed amount of such
Claim.
1.57 "Final Order" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in the
Chapter 11 Case, the operation or effect of which has not been stayed, reversed,
or amended and as to which order or judgment (or any revision, modification, or
amendment thereof) the time to appeal or seek review or rehearing has expired
and as to which no appeal or petition for review or rehearing was filed or, if
filed, remains pending.
1.58 "Impaired" means, when used with reference to a Claim or Interest,
a Claim or Interest that is impaired within the meaning of Section 1124 of the
Bankruptcy Code.
1.59 "Indenture Trustee" means The Bank of New York or its successor,
in either case in its capacity as indenture trustee pursuant to the Senior Note
Indenture.
7
1.60 "Insider" means any (i) director, officer, or person in control of
the Debtor or Existing Equity or (ii) relative of a director, officer, or person
in control of the Debtor or Existing Equity.
1.61 "Insider Claims" means any Claim by any Insider against the
Debtor.
1.62 "Initial Lenders" means Bank of Nova Scotia and Bank of America,
N.A. f/k/a Nationsbank, N.A. South.
1.63 "Intercompany Claims" means any Claim by any of the Operating
Subsidiaries against the Debtor.
1.64 "Intercompany Liens" means those liens granted by Pueblo to the
Debtor (i) pursuant that certain Pledge Agreement dated July 28, 1993, as
amended by that certain Amendment to Pledge Agreement dated April 29, 1997 on
certain real estate to secure certain subordinated intercompany real estate
notes and (ii) that certain Personal Property Mortgage and Affidavit dated July
28, 1993, as amended by that certain Amendment to Personal Property Mortgage
dated April 19, 1997 to secure certain intercompany notes.
1.65 "Intercreditor Agreement" means that certain intercreditor
agreement dated as of the Consummation Date by and among the Reorganized Debtor,
the Operating Subsidiaries, the New Indenture Trustee and the New Lender, which
intercreditor agreement shall be in the form of the intercreditor agreement to
be included as Exhibit C to the Plan.
1.66 "Interest" means (a) the legal, equitable, contractual and other
rights of any Person with respect to Common Stock, Stock Options, Warrants, or
any other Equity Securities of NSC and (b) the legal, equitable, contractual or
other rights of any Person to acquire or receive any of the foregoing.
1.67 "Lender Secured Claims" means the Secured Claims of the Lender
under the Loan and Security Agreement and the Extension Documents.
1.68 "Lender" means Successor Lender as successor to the Initial
Lenders.
1.69 "Lien" means a charge against or interest in property to secure
payment of a debt or performance of an obligation.
1.70 "Litigation Claims" means the claims, rights of action, suits, or
proceedings, whether in law or in equity, whether known or unknown, that the
Debtor or the Estate may hold against any Person, which are to be retained by
the Reorganized Debtor pursuant to Article IV.F of this Plan.
1.71 "Loan and Security Agreement" means the Loan and Security
Agreement, dated as of April 27, 1997, among NSC, as borrower, and the Initial
Lenders as amended and supplemented from time to time thereafter and as amended
and supplemented by the Extension Agreement.
8
1.72 "New Common Stock" means 1,000,000 shares of common shares of the
Reorganized Debtor authorized under ARTICLE IV of the Plan.
1.73 "New Indenture Trustee" means the indenture trustee under the New
Senior Note Indenture.
1.74 "New Lender" means the lender(s) under the New Loan Facility.
1.75 "New Loan Facility" means a new loan facility to replace the Loan
and Security Agreement, pursuant to which the New Lender shall have agreed to
provide the Operating Subsidiaries binding commitments for approximately $70
million (including a $5 million letter of credit sub-limit)(but in no event
shall such facility exceed $80 million without the prior written consent of the
Committee) in working capital and term loans, which loans shall be secured by
the granting on the Effective Date of a perfected security interest in all
personal, mixed and real property of each borrower and guarantor a party to the
New Loan Facility (subject to certain permitted liens and other exceptions
reasonably satisfactory to the New Lender).
1.76 "New Securities" means either (A) the New Senior Notes or (B) if
the Direction Letter has been issued, the Alternative Plan Consideration, in
either case to be issued to the Indenture Trustee, for the ratable benefit of
all holders of Allowed Class 2 Senior Note Claims pursuant to Article III.C.1 of
the Plan.
1.77 "New Senior Note Indenture" means the indenture to be entered into
between the Reorganized Debtor and the New Indenture Trustee, under which the
New Senior Notes or the Alternative Notes, as the case may be, shall be issued
which indenture shall (i) contain, with respect to the New Senior Notes, certain
covenants and events of default similar to the existing covenants and events of
default in the Senior Note Indenture, subject to adjustment on account of the
Debtor's projections with a reasonable cushion; PROVIDED that no such covenant
or event of default shall conflict or be more onerous then those covenants or
events of default set forth in the New Loan Facility and PROVIDED FURTHER that
an event of default under the New Loan Facility shall be an event of default
under the New Senior Note Indenture, (ii) contain, with respect to the New
Senior Notes, certain call premium provisions requiring that the Reorganized
Debtor pay the holders of the New Senior Notes (a) 102% of the original
principal amount of the New Senior Notes if the New Senior Notes are redeemed on
or before the first anniversary of the Consummation Date and (b) 101% of the
original principal amount of the New Senior Notes if such notes are redeemed
during the period after the first anniversary of the Consummation Date and on or
before the second anniversary of the Consummation Date, and (iii) be
substantially in the form of the indenture to be included as Exhibit B to the
Plan.
1.78 "New Senior Notes" means the 10.125% Senior Notes due 2009 of the
Reorganized Debtor, in the aggregate principal amount of $90 million, secured by
the Subordinated Lien and the Subordinated Stock Pledge, to be issued and
distributed pursuant to the Plan on the Distribution Date and governed by the
terms of the New Senior Note Indenture, as more fully described in Article VI
hereof.
1.79 "NSC" means Nutritional Sourcing Corporation.
9
1.80 "Operating Subsidiaries" means Pueblo, PEI and each of their
subsidiaries and affiliates.
1.81 "PEI" means Pueblo Entertainment, Inc., a Delaware corporation.
1.82 "Person" means an individual, partnership, limited liability
company, trust, incorporated or unincorporated association, joint venture, joint
stock company, government (or an agreed or political subdivision thereof) or
other entity of any kind.
1.83 "Petition Date" means the date on which an involuntary petition
for relief commencing the Chapter 11 Case was filed against NSC.
1.84 "Plan" means this Chapter 11 reorganization plan for NSC
(including the Primary Plan and the Alternative Plan) and all exhibits annexed
hereto or referenced herein, as the same may be amended, modified or
supplemented from time to time.
1.85 "Plan Supplement" means the compilation of documents and forms of
documents specified in the Plan which will be filed with the Bankruptcy Court
not later than ten (10) days prior to (a) the Confirmation Date or (b) if the
Direction Letter was issued, the Consummation Date.
1.86 "Primary Plan"means a plan that will result in the holders of
Class 2 Claims receiving the Primary Plan Consideration, and the holder of the
Class 5 Interest retaining its Equity Interests in exchange for the Equity
Contribution.
1.87 "Primary Plan Consideration"means (i) Total Cash Consideration and
(ii) the New Senior Notes.
1.88 "Priority Tax Claim" means a Claim that is entitled to priority
pursuant to Section 507(a)(8) of the Bankruptcy Code.
1.89 "Professional" means any professional employed in the Chapter 11
Case pursuant to Sections 327 or 1103 of the Bankruptcy Code or otherwise and
the professionals seeking compensation or reimbursement of expenses in
connection with the Chapter 11 Case pursuant to Section 503(b)(4) of the
Bankruptcy Code.
1.90 "Professional Fee Claim" means a Claim of a Professional for
compensation or reimbursement of costs and expenses relating to services
incurred after the Petition Date and prior to and including the Consummation
Date.
1.91 "Pro Rata" means, at any time, the proportion that the Face Amount
of a Claim in a particular Class bears to the aggregate Face Amount of all
Claims (including Disputed Claims) in such Class, unless the Plan provides
otherwise.
1.92 "Pueblo" means Pueblo International LLC, a Delaware corporation.
1.93 "Registration Rights Agreement" means an agreement to be entered
into, if the Alternative Plan is consummated, by the Reorganized Debtor and
10
certain holders of Senior Note Claims with respect to the New Common Stock,
substantially in the form of Exhibit D to the Plan.
1.94 "Reinstated" or "Reinstatement" means (i) leaving unaltered the
legal, equitable, and contractual rights to which a Claim entitles the holder of
such Claim so as to leave such Claim unimpaired in accordance with Section 1124
of the Bankruptcy Code or (ii) 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 (a) curing
any such default that occurred before or after the Petition Date, other than a
default of a kind specified in Section 365(b)(2) of the Bankruptcy Code; (b)
reinstating the maturity of such Claim as such maturity existed before such
default; (c) compensating 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 (d) not otherwise altering the legal, equitable, or
contractual rights to which such Claim entitles the holder of such Claim;
PROVIDED, HOWEVER, that any contractual right that does not pertain to the
payment when due of principal and interest on the obligation on which such Claim
is based, including, but not limited to, financial covenant ratios, negative
pledge covenants, covenants or restrictions on merger or consolidation, and
affirmative covenants regarding corporate existence prohibiting certain
transactions or actions contemplated by the Plan, or conditioning such
transactions or actions on certain factors, shall not be required to be
reinstated in order to accomplish Reinstatement.
1.95 "Released Parties"means the Debtor, the Reorganized Debtor, the
Committee, the Lender, holders of Claims and Interests, the Indenture Trustee
and their respective current and former members, officers, directors, partners,
limited partners, common shareholders, controlling persons, employees, agents,
advisors, representatives, attorneys, accountants, financial advisors,
professionals and affiliates and any and all current and former members,
officers, directors, partners, limited partners, common shareholders,
controlling persons, employees, agents, advisors, representatives, attorneys,
accountants, financial advisors, professionals and affiliates of the foregoing.
1.96 "Reorganized Debtor" means reorganized NSC, on and after the
Consummation Date.
1.97 "Required Procedures" means that the Debtor shall (i) provide the
Committee with three (3) Business Days notice prior to using funds in the
Deposit Account (ii) replenish the Deposit Account as soon as possible after a
Cash Usage Event, but in no event later than the Consummation Date; (iii) update
the Committee as to the status of the Deposit Account upon the earlier of (a)
the Committee's reasonable request and (b) the Update Calls.
1.98 "Restructuring" means, collectively, the transactions and
transfers described in Article IV of this Plan.
1.99 "Schedules" means the schedules of assets and liabilities and the
statements of financial affairs, if any, filed in the Bankruptcy Court by NSC as
such schedules or statements may be amended or supplemented from time to time in
accordance with Fed. R. Bankr. P. 1009 or orders of the Bankruptcy Court.
11
1.100 "Secured Claim" means a Claim that is secured by a security
interest in or lien upon property, or the proceeds of the sale of such property,
in which the Debtor has an interest, to the extent of the value, as of the
Consummation Date or such later date as is established by the Bankruptcy Court,
of such interest or lien as determined by a Final Order of the Bankruptcy Court
pursuant to Section 506 of the Bankruptcy Code or as otherwise agreed upon in
writing by the Debtor or Reorganized Debtor and the holder of such Claim.
1.101 "Securities Act" means the Securities Act of 1933, 15
U.S.C.ss.ss. 77a-77aa, as now in effect or hereafter amended.
1.102 "Senior Note Claim" means a Claim of a Senior Note Holder arising
under or on an account of the Senior Notes.
1.103 "Senior Note Holder" means a holder of Senior Notes.
1.104 "Senior Note Indenture" means collectively (i) the indenture,
dated July 18, 1993, between NSC and the Indenture Trustee, and (ii) the
indenture, dated April 29, 1997, between NSC and the Indenture Trustee, pursuant
to which the Senior Notes were issued.
1.105 "Senior Notes" means the 9.5% Senior Notes Due August 1, 2003 of
NSC, issued and outstanding under the Senior Note Indenture.
1.106 "Setoff Claim" means a Claim, against the Debtor, of a holder
that has a valid right of setoff with respect to such Claim, which right is
enforceable under Section 553 of the Bankruptcy Code as determined by a Final
Order or as otherwise agreed in writing by the Debtor, to the extent of the
amount subject to such right of setoff.
1.107 "Stock Options" means the outstanding options to purchase Common
Stock, as of the Petition Date, if any.
1.108 "Subordinated Lien" means a lien on the Intercompany Lien, which
lien shall be subordinate to the secured claims of the New Lender to the extent
provided in the Intercreditor Agreement and the unsecured claims of the
Operating Subsidiaries' trade creditors.
1.109 "Subordinated Stock Pledge" means a pledge of the stock of Pueblo
and PEI, which stock pledge shall be junior in priority to the pledge of such
stock to the New Lender to the extent provided in the Intercreditor Agreement.
1.110 "Substantial Contribution Claim" means a claim for compensation
or reimbursement of expenses incurred in making a substantial contribution in
the Chapter 11 Case pursuant to Section 503(b)(3), (4), or (5) of the Bankruptcy
Code.
1.111 "Successor Lender" means Westernbank Puerto Rico or its
successors and assigns.
1.112 "Total Cash Consideration" means an amount of cash equal to the
sum of the Cash Consideration and the Additional Cash Consideration.
12
1.113 "Unimpaired Claim" means a Claim that is not an Impaired Claim.
1.114 "Update Calls" means a call at least once every fourteen (14)
days by the Debtor to the Committee or its professionals whereby the Debtor will
(i) update the Committee on the status of the negotiations with respect to the
New Loan Facility and (ii) if a Cash Usage Event has occurred, when the Debtor
anticipates that the Deposit Account will be replenished.
1.115 "Warrants" means the outstanding warrants to purchase Common
Stock, as of the Petition Date, if any.
C. RULES OF INTERPRETATION
1. GENERAL
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or document's being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions, (b) any reference in the Plan to an existing document or exhibit
filed or to be filed means such document or exhibit as it may have been or may
be amended, modified, or supplemented, (c) unless otherwise specified, all
references in the Plan to Sections, Articles, Schedules, and Exhibits are
references to Sections, Articles, Schedules, and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather than to
a particular portion of the Plan, (e) captions and headings to Articles and
Sections are inserted for convenience of reference only and are not intended to
be a part of or to affect the interpretation of the Plan, and (f) the rules of
construction set forth in Section 102 of the Bankruptcy Code and in the
Bankruptcy Rules shall apply.
2. RULE OF "CONTRA PROFERENTUM" NOT APPLICABLE
This Plan is the product of extensive discussions and negotiations
between and among, INTER ALIA, the Debtor, the Committee, and certain other
creditors and constituencies. Each of the foregoing was represented by counsel
who either (a) participated in the formulation and documentation of or (b) was
afforded the opportunity to review and provide comments on, the Plan, the
Disclosure Statement, and the documents ancillary thereto. Accordingly, unless
explicitly indicated otherwise, the general rule of contract construction known
as "CONTRA PROFERENTUM" shall not apply to the construction or interpretation of
any provision of this Plan, the Disclosure Statement, or any contract,
instrument, release, indenture, or other agreement or document generated in
connection therewith.
D. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan, the
provisions of Fed. R. Bankr. P. 9006(a) shall apply.
13
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. INTRODUCTION
All Claims and Interests, Administrative Claims and Priority Tax
Claims, are placed in the Classes set forth below. In accordance with Section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax
Claims, as described below, have not been classified.
A Claim or Interest is placed in a particular Class only to the extent
that a Claim or Interest falls within the description of that Class, and is
classified in other Classes to the extent that any portion of the Claim or
Interest falls within the description of such other Classes. A Claim is also
placed in a particular Class for the purpose of receiving distributions pursuant
to the Plan only to the extent that such Claim is an Allowed Claim in that Class
and such Claim has not been paid, released, or otherwise settled prior to the
Consummation Date.
B. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN)
1. ADMINISTRATIVE CLAIMS
2. PRIORITY TAX CLAIMS
C. UNIMPAIRED CLASSES OF CLAIMS (DEEMED TO HAVE ACCEPTED THE PLAN AND,
THEREFORE, NOT ENTITLED TO VOTE)
1. CLASS 1: LENDER SECURED CLAIMS
Class 1 consists of all Claims against NSC, secured by and to the
extent of the value (as of the Petition Date), if any, of the Collateral
securing such Claims directly or indirectly arising from or under, or relating
in any way to, the Credit Documents.
2. CLASS 3 INTERCOMPANY CLAIMS
Class 3 consists of all Intercompany Claims.
3. CLASS 5: EQUITY SECURITIES INTERESTS
Class 5 consists of, with respect to the Primary Plan, all Interests in
NSC directly or indirectly arising from or under, or relating in any way to, any
of the Equity Securities of NSC.
D. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (CLASS 2 IS ENTITLED TO
VOTE ON THE PLAN)
1. CLASS 2: SENIOR NOTE CLAIMS
Class 2 consists of all Senior Note Claims against NSC. Notwithstanding
anything contained in this Plan to the contrary, the Class 2 Senior Note Claims
shall be deemed Allowed Class 2 Senior Note Claims in the aggregate amount of
$187.3 million.
14
2. CLASS 4 INSIDER CLAIMS
Class 4 consists of all Insider Claims.
3. CLASS 5: EQUITY SECURITIES INTERESTS
Class 5 consists of, with respect to the Alternative Plan, all
Interests in NSC directly or indirectly arising from or under, or relating in
any way to, any of the Equity Securities of NSC.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS
1. ADMINISTRATIVE CLAIMS
Except as otherwise provided for herein, and subject to the
requirements of Article XIII.A.1 hereof, on, or as soon as reasonably
practicable after, the latest of (i) the Distribution Date, (ii) the date such
Administrative Claim becomes an Allowed Administrative Claim, or (iii) the date
such Administrative Claim becomes payable pursuant to any agreement between the
Debtor and the holder of such Administrative Claim, each holder of an Allowed
Administrative Claim shall receive in full satisfaction, settlement, release,
and discharge of and in exchange for such Allowed Administrative Claim (a) Cash
equal to the unpaid portion of such Allowed Administrative Claim or (b) such
other treatment as to which the Debtor and such holder shall have agreed upon in
writing.
2. PRIORITY TAX CLAIMS
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim, each holder of an Allowed Priority Tax Claim shall receive
in full satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Priority Tax Claim (a) Cash equal to the unpaid portion of such
Allowed Priority Tax Claim, (b) Cash payments over time in an aggregate
principal amount equal to the amount of such Allowed Priority Tax Claim plus
interest on the unpaid portion thereof at the interest rate available on ninety
(90) day United States Treasuries from the Consummation Date through the date of
payment thereof, or (c) such other treatment as to which NSC and such holder
shall have agreed upon in writing. Cash payments of principal shall be made in
annual installments, each such installment amount being equal to ten percent
(10%) of such Allowed Priority Tax Claim plus accrued and unpaid interest, with
the first payment to be due on or before the first anniversary of the
Consummation Date, or as soon thereafter as is practicable, and subsequent
payments to be due on the anniversary of the first payment date or as soon
thereafter as is practicable; PROVIDED, HOWEVER, that any installments remaining
unpaid on the date that is six years after the date of assessment of the tax
that is the basis for the Allowed Priority Tax Claim shall be paid on the first
Business Day following such date, or as soon thereafter as is practicable
15
together with any accrued and unpaid interest to the date of payment; and
PROVIDED FURTHER, that that Debtor reserves the right to pay any Allowed
Priority Tax Claim, or any remaining balance of any Allowed Priority Tax Claim,
in full at any time on or after the Distribution Date without premium or
penalty; and PROVIDED FURTHER, that no holder of an Allowed Priority Tax Claim
shall be entitled to any payments on account of any pre-Consummation Date
interest accrued on or penalty arising after the Petition Date with respect to
or in connection with such Allowed Priority Tax Claim.
B. UNIMPAIRED CLASSES OF CLAIMS
1. CLASS 1: LENDER SECURED CLAIMS
On, or as soon as reasonably practicable after, the latest of (i) the
Distribution Date, (ii) the date such Class 1 Lender Secured Claim becomes an
Allowed Class 1 Lender Secured Claim, or (iii) the date such Class 1 Lender
Secured Claim becomes payable pursuant to any agreement between NSC or the
Operating Subsidiaries and the holder of such Class 1 Lender Secured Claim, each
holder of an Allowed Class 1 Lender Secured Claim shall receive in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Class 1 Lender Secured Claim (a) cash from the Operating Subsidiaries
equal to the unpaid portion of such Allowed 1 Lender Secured Claim, including
accrued but unpaid interest at the contract rate through the date of payment, or
(b) such other treatment as to which NSC and such holder shall have agreed upon
in writing.
2. CLASS 3: INTERCOMPANY CLAIMS
On the Effective Date, each holder of an Allowed Class 3 Intercompany
Claim shall have its Claim Reinstated.
3. CLASS 5: EQUITY SECURITIES INTEREST
Pursuant to the Primary Plan, each holder of an Allowed Equity
Securities Interest shall retain such Equity Securities Interest.
C. IMPAIRED CLASSES OF CLAIMS
1. CLASS 2: SENIOR NOTE CLAIMS
(a) On, or as soon as reasonably practicable after, the Distribution
Date, the Debtor or the Reorganized Debtor, as the case may be, shall distribute
to the Indenture Trustee, for the ratable benefit of the holders of Allowed
Class 2 Senior Note Claims, and in full satisfaction, settlement, release, and
discharge of and in exchange for all such Allowed Class 2 Senior Note Claims,
either (A) Primary Plan Consideration or (B) if the Direction Letter has been
issued, the Alternative Plan Consideration. The Indenture Trustee shall, in
accordance with the terms of the Senior Note Indenture, promptly distribute to
each holder of an Allowed Class 2 Senior Note Claim, as of the Distribution
Record Date, such holder's Pro Rata share of the Total Cash Consideration and
the New Senior Notes or the Alternative Plan Consideration, as the case may be.
(b) Any holder of an Allowed Class 2 Senior Note Claim that casts a
vote in favor of the Plan shall be deemed to have consented to the Committee
exercising its right to issue or withdraw any Direction Letter.
16
2. CLASS 4: INSIDER CLAIMS
Each holder of Class 4 Insider Claim shall not receive a distribution
on account of such Insider Claim and all such Insider Claims, if any, shall be
deemed to be disallowed. Each holder of a Class 4 Insider Claim is deemed to
reject the Plan.
3. CLASS 5: EQUITY SECURITIES INTEREST
Pursuant to the Alternative Plan, each holder of an Allowed Equity
Securities Interest shall not receive a distribution on or account of such
Equity Securities Interest and all such Equity Securities Interests shall be
cancelled. Each holder of a Class 5 Equity Securities Claim is deemed to reject
the Alternative Plan.
D. SPECIAL PROVISION REGARDING UNIMPAIRED CLAIMS
Except as otherwise provided in the Plan, nothing shall affect the
Debtor's or Reorganized Debtor's rights and defenses, both legal and equitable,
with respect to any Unimpaired Claims, including, but not limited to, all rights
with respect to legal and equitable defenses to Setoff Claims or recoupments
against Unimpaired Claims.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE
NSC shall continue to exist after the Consummation Date as a separate
corporate entity, in accordance with the laws of the State of Delaware, and
pursuant to its certificate of incorporation and bylaws in effect prior to the
Consummation Date, except to the extent such certificate of incorporation and by
laws are amended by this Plan.
B. CORPORATE ACTION
1. CANCELLATION OF SENIOR NOTES AND SENIOR NOTE INDENTURE
On the Consummation Date, except as otherwise provided for herein, (i)
the Senior Notes and any other note, bond, indenture, or other instrument or
document evidencing or creating any indebtedness or obligation of the Debtor,
shall be canceled, and (ii) the obligations of the Debtor under any agreements,
indentures or certificates of designations governing the Senior Notes and any
other note, bond, indenture or other instrument or document evidencing or
creating any indebtedness or obligation of the Debtor, shall be discharged;
PROVIDED, HOWEVER, that each indenture or other agreement that governs the
rights of the holder of a Claim and that is administered by an indenture
trustee, an agent, or a servicer shall continue in effect solely for the
purposes of (i) allowing such indenture trustee, agent, or servicer to make the
distributions be made on account of such Claims under the Plan as provided in
Article III hereof and (ii) permitting such indenture trustee, agent, or
servicer to maintain any rights or liens it may have for fees, costs and
17
expenses under such indenture or other agreement; PROVIDED, FURTHER, that the
provisions of clause (ii) of this paragraph shall not affect the discharge of
the Debtor's liabilities under the Bankruptcy Code and the Confirmation Order or
result in any expense or liability to the Reorganized Debtor. The Reorganized
Debtor shall not have any obligations to any indenture trustee, agent or
servicer (or to any Disbursing Agent replacing such indenture trustee, agent or
servicer) for any fees, costs or expenses; PROVIDED, HOWEVER, that nothing
herein shall preclude such indenture trustee, agent or servicer (or any
Disbursing Agent replacing such indenture trustee, agent or servicer) from being
paid or reimbursed for pre-petition and post-petition fees, costs and expenses
from the distributions until payment in full of such fees, costs or expenses
that are governed by the respective indenture or other agreement in accordance
with the provisions set forth therein.
Any actions taken by an indenture trustee, an agent, or a servicer that
are not for the purposes authorized in this Article IV.B.1 of the Plan shall not
be binding upon the Debtor. Notwithstanding the foregoing, the Debtor may
terminate any indenture or other governing agreement and the authority of any
indenture trustee, agent, or servicer to act thereunder at any time, with or
without cause, by giving five (5) days written notice of termination to the
indenture trustee, agent, or servicer. If distributions under the Plan have not
been completed at the time of termination of the indenture or other governing
agreement, the Debtor shall designate a Disbursing Agent to act in place of the
indenture trustee, agent, or servicer, and the provisions of this Article IV.B.1
shall be deemed to apply to the new distribution agent.
2. AMENDED CERTIFICATE OF INCORPORATION AND BY-LAWS
The certificate of incorporation and by-laws of the Debtor shall be
amended as necessary to satisfy the provisions of the Plan and the Bankruptcy
Code and shall include, among other things, pursuant to Section 1123(a)(6) of
the Bankruptcy Code, (x) a provision prohibiting the issuance of non-voting
equity securities, and if applicable (y) a provision as to the classes of
securities issued pursuant to the Plan or thereafter possessing voting power,
for an appropriate distribution of such power among such classes, including, in
the case of any class of equity securities having a preference over another
class of equity securities with respect to dividends, adequate provisions for
the election of directors representing such preferred class in the event of
default in the payment of such dividends. On the Effective Date or as soon
thereafter as is practicable, the Reorganized Debtor shall file with the
Secretary of the State of Delaware in accordance with Sections 103 and 303 of
the Delaware General Corporate Law, the applicable amended certificate of
incorporation.
3. OTHER GENERAL CORPORATE MATTERS
On or after the Effective Date, the Reorganized Debtor will be
authorized to take such action as is necessary under the laws of the State of
Delaware, federal law and other applicable law to effect the terms and
provisions of the Plan. Without limiting the foregoing, the issuance of the New
Common Stock, the election and the appointment of directors or officers, and any
other matter involving the corporate structure of the Reorganized Debtor shall
be deemed to have occurred and shall be in effect from and after the Effective
Date pursuant to Section 303 of the Delaware General Corporate Law without any
requirement of further action by the stockholders or directors of the Debtor or
the Reorganized Debtor.
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C. RESTRUCTURING TRANSACTIONS
1. NEW SECURITIES
(a) Authorization
As of the Consummation Date, the issuance by the Reorganized Debtor of
(i) $90 million in principal amount of New Senior Notes or, (ii) if the
Direction Letter has been issued, up to $125 million in principal amount of
Alternative Plan Notes and 1,000,000 shares of New Common Stock, in each case
are hereby authorized without further act or action under applicable law,
regulation, order or rule.
(b) Issuance
The New Senior Notes or the Alternative Plan Notes and the New Common
Stock, as the case may be, authorized pursuant to Article IV.C.1 hereof shall be
issued by the Reorganized Debtor pursuant to the Plan without further act or
action under applicable law, regulation, order or rule.
D. DIRECTORS AND OFFICERS
Under the Primary Plan, the directors and officers of the Debtor before
the Consummation Date will serve as the initial directors and officers after the
Consummation Date. If the Alternative Plan is consummated, the initial directors
and officers of the Reorganized Debtor shall be determined by the Committee on
or before the Consummation Date of the Alternative Plan. Those directors and
officers of the Debtor, if any, who continue to serve after the Consummation
Date shall not be liable to any Person for any Claim that arose prior to the
Consummation Date in connection with such directors service to the Debtor, in
their capacity as director. If the Alternative Plan is consummated, the Debtor's
officers agree to cooperate with, and provide reasonable assistance to, the
Committee and its designated senior management team. The board of directors of
the Reorganized Debtor shall have the responsibility for the management,
control, and operation of the Reorganized Debtor on and after the Consummation
Date.
E. REVESTING OF ASSETS
The property of the Estate, together with any property of the Debtor
that is not property of the Estate and that is not specifically disposed of
pursuant to the Plan, including, but not limited to, the Intercompany Liens,
shall revest in the Reorganized Debtor on the Consummation Date and hereafter,
the Debtor may operate its business and may use, acquire, and dispose of
property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules,
and the Bankruptcy Court.
The Reorganized Debtor, the Operating Subsidiaries, the New Indenture
Trustee and the New Lender agree to enter into the Intercreditor Agreement which
shall provide INTER ALIA, that any claims of the Reorganized Debtor and the New
Indenture Trustee on account of the intercompany notes secured by the
Intercompany Liens shall be subordinate to the secured claims of the New Lender
and the unsecured claims of the Operating Subsidiaries' trade creditors.
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Further, the Reorganized Debtor shall grant to the New Indenture Trustee, for
the benefit of the New Senior Note holders, the Subordinated Lien.
As of the Consummation Date, all property of the Debtor shall be free
and clear of all Claims and Interests, except as specifically provided in the
Plan or the Confirmation Order. Without limiting the generality of the
foregoing, the Debtor may, without application to or approval by the Bankruptcy
Court, pay fees that it incurs after the Consummation Date for professional fees
and expenses.
F. PRESERVATION OF RIGHTS OF ACTION; SETTLEMENT OF LITIGATION CLAIMS
Except as otherwise provided in this Plan or the Confirmation Order, or
in any contract, instrument, release, indenture or other agreement entered into
in connection with the Plan, in accordance with Section 1123(b) of the
Bankruptcy Code, the Reorganized Debtor shall retain and may enforce, sue on,
settle, or compromise (or decline to do any of the foregoing) all claims, rights
or causes of action, suits, and proceedings, whether in law or in equity,
whether known or unknown, that the Debtor or the Estate may hold against any
Person or entity. The Reorganized Debtor or its successor(s) may pursue such
retained claims, rights or causes of action, suits, or proceedings as
appropriate, in accordance with the best interests of the Reorganized Debtor or
its successor(s)who hold such rights.
G. EXCLUSIVITY PERIOD
Except as set forth in the Exclusivity Order, the Debtor shall retain
the exclusive right to amend or modify the Plan, and to solicit acceptances of
any amendments to or modifications of the Plan, through and until the
Consummation Date.
H. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS
The chairman of the board of directors, president, chief financial
officer, or any other appropriate officer of NSC shall be authorized to execute,
deliver, file, or record such contracts, instruments, releases, indentures, and
other agreements or documents, and take such actions as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan. The secretary or assistant secretary of NSC shall be authorized to certify
or attest to any of the foregoing actions.
I. EXEMPTION FROM CERTAIN TRANSFER TAXES
Pursuant to Section 1146(c) of the Bankruptcy Code, the issuance,
transfer, or exchange of a security, or the making of delivery of an instrument
of transfer from the Debtor to the Reorganized Debtor or any other Person or
entity pursuant to the Plan may not be taxed under any law imposing a stamp tax
or similar tax, and the Confirmation Order shall direct the appropriate state or
local governmental officials or agents to forego the collection of any such tax
or governmental assessment and to accept for filing and recordation any of the
foregoing instruments or other documents without the payment of any such tax or
governmental assessment.
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ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN
A. CLASSES ENTITLED TO VOTE
Each Impaired Class of Claims that will (or may) receive or retain
property or any interest in property under the Plan, shall be entitled to vote
to accept or reject the Plan. By operation of law, each Unimpaired Class of
Claims is deemed to have accepted the Plan and, therefore, is not entitled to
vote to accept or reject the Plan.
B. ACCEPTANCE BY IMPAIRED CLASSES
An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than any holder designated under Section 1126(e) of the
Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually
voting in such Class have voted to accept the Plan and (ii) the holders (other
than any holder designated under Section 1126(e) of the Bankruptcy Code) of more
than one-half in number of the Allowed Claims actually voting in such Class have
voted to accept the Plan. An Impaired Class of Interests shall have accepted the
Plan if (i) the holders (other than any holder designated under Section 1126(e)
of the Bankruptcy Code) of at least two-thirds in amount of the Allowed
Interests actually voting in such Class have voted to accept the Plan.
ARTICLE VI.
SECURITIES TO BE ISSUED
IN CONNECTION WITH THE PLAN
On or before the Distribution Date, the Reorganized Debtor shall issue
for distribution in accordance with the provisions of the Plan (A) the New
Senior Notes or (B) if the Direction Letter is issued, the Alternative Plan
Consideration, each for distribution pursuant to the provisions of the Plan or
the Alternative Plan, as the case may be, and the New Senior Note Indenture. All
securities to be issued will be deemed issued as of the Distribution Date
regardless of the date on which they are actually distributed. The form of
indenture governing the New Senior Notes shall be attached as an exhibit to the
Plan.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DISTRIBUTIONS FOR CLAIMS ALLOWED AS OF THE CONSUMMATION DATE
Except as otherwise provided herein or as ordered by the Bankruptcy
Court, distributions to be made on account of Claims that are Allowed Claims as
of the Consummation Date shall be made on the Distribution Date, or as soon
thereafter as practicable. The New Securities to be issued under this Plan shall
be deemed issued as of the Distribution Date regardless of the date on which
they are actually distributed. Distributions on account of Claims that first
21
become Allowed Claims after the Consummation Date shall be made pursuant to
Articles III, VII, and VIII of this Plan.
B. INTEREST ON CLAIMS
Except for interest, fees and expenses owed and owing to the Lender
pursuant to the Credit Documents, unless otherwise specifically provided by this
Plan or the Confirmation Order, or by applicable bankruptcy law, post-petition
interest shall not accrue and not be paid on Allowed Claims when due under the
contract, agreement, or other instrument governing the terms and conditions of
the obligation comprising such Allowed Claim. Post-petition interest shall
accrue and be paid upon any Disputed Claim in respect of the period from the
Consummation Date to the date a final distribution is made thereon, if and after
such Disputed Claim becomes an Allowed Claim.
C. DISBURSING AGENT
The Disbursing Agent shall make all distributions required under this
Plan (subject to the provisions of Articles III and VIII hereof) except
distributions to the holders of Allowed Class 2 Senior Note Claims, which
distributions shall be deposited with the Indenture Trustee, who shall deliver
such distributions to the holders of such Claims in accordance with the
provisions of this Plan and the terms of the Senior Note Indenture.
If the Disbursing Agent is an independent third party designated by the
Reorganized Debtor to serve in such capacity, such Disbursing Agent shall
receive, without further Bankruptcy Court approval, reasonable compensation for
distribution services rendered pursuant to the Plan and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services from
the Reorganized Debtor on terms acceptable to the Reorganized Debtor. No
Disbursing Agent shall be required to give any bond or surety or other security
for the performance of its duties unless otherwise ordered by the Bankruptcy
Court. If otherwise so ordered, all costs and expenses of procuring any such
bond shall be paid by the Reorganized Debtor.
D. SURRENDER OF SECURITIES OR INSTRUMENTS
On or before the Distribution Date, or as soon as practicable
thereafter, each holder of an instrument evidencing a Claim on account of Senior
Notes (a "Certificate") shall surrender such Certificate to the Indenture
Trustee and such Certificate shall be cancelled. No distribution of property
hereunder shall be made by the Indenture Trustee to any such holder unless and
until such Certificate is received by the Indenture Trustee, or the
unavailability of such Certificate is reasonably established to the satisfaction
of the Indenture Trustee. Any such holder who fails to surrender or cause to be
surrendered such Certificate or fails to execute and deliver an affidavit of
loss and indemnity reasonably satisfactory to the Indenture Trustee prior to the
second (2nd) anniversary of the Consummation Date, shall be deemed to have
forfeited all rights and Claims in respect of such Certificate and shall not
participate in any distribution hereunder, and all property in respect of such
forfeited distribution, including interest accrued thereon, shall revert to the
Reorganized Debtor notwithstanding any federal or state escheat laws to the
contrary.
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E. INSTRUCTIONS TO DISBURSING AGENT
Prior to any distribution on account of an Allowed Class 2 Senior Note
Claim, the Indenture Trustee shall instruct the Disbursing Agent, in a form and
manner that the Disbursing Agent reasonably determines to be acceptable, of the
names of the holders of Allowed Class 2 Senior Note Claims, and the face amount
of New Senior Notes or, if the Direction Letter is issued, the Alternative Plan
Notes, to be issued and distributed to or on behalf of such holders of Allowed
Class 2 Senior Note Claims in exchange for properly surrendered Senior Notes.
F. SERVICES OF INDENTURE TRUSTEES, AGENTS, AND SERVICERS
The services, with respect to consummation of the Plan, of indenture
trustees, agents, and servicers under indentures and other agreements that
govern the rights of holders of Claims, shall be as set forth in Article IV.B.1
and elsewhere in the Plan.
G. RECORD DATE FOR DISTRIBUTIONS TO HOLDERS OF DEBT SECURITIES
At the close of business on the Distribution Record Date, the transfer
ledgers for the Senior Notes shall be closed, and there shall be no further
changes in the record holders of the Senior Notes. The Reorganized Debtor and
the Disbursing Agent, if any, shall have no obligation to recognize any transfer
of such Senior Notes occurring after the Distribution Record Date and shall be
entitled instead to recognize and deal for all purposes hereunder with only
those record holders stated on the transfer ledgers as of the close of business
on the Distribution Record Date.
H. MEANS OF CASH PAYMENT
Cash payments made pursuant to this Plan shall be in U.S. funds, by the
means agreed to by the payor and the payee, including by check or wire transfer,
or, in the absence of an agreement, such commercially reasonable manner as the
payor shall determine in its sole discretion.
I. DELIVERY OF DISTRIBUTIONS
Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent or Indenture Trustee, as the case may be, (a) at the addresses
set forth on the proofs of Claim filed by such holders (or at the last known
addresses of such holders if no proof of Claim is filed or if the Debtor has
been notified of a change of address), (b) at the addresses set forth in any
written notices of address changes delivered to the Disbursing Agent after the
date of any related proof of Claim, (c) at the addresses reflected in the
Schedules if no proof of Claim has been filed and the Disbursing Agent has not
received a written notice of a change of address, or (d) in the case of the
holder of a Claim that is governed by an indenture or other agreement and is
administered by an indenture trustee, agent, or servicer, at the addresses
contained in the official records of such indenture trustee, agent, or servicer,
or (e) at the addresses set forth in a properly completed letter of transmittal
accompanying securities properly remitted to the Debtors. If any holder's
distribution is returned as undeliverable, no further distributions to such
holder shall be made unless and until the Disbursing Agent or the appropriate
indenture trustee, agent, or servicer is notified of such holder's then current
23
address, at which time all missed distributions shall be made to such holder
without interest. Amounts in respect of undeliverable distributions made through
the Disbursing Agent or the indenture trustee, agent, or servicer, shall be
returned to the Reorganized Debtor until such distributions are claimed. All
claims for undeliverable distributions must be made on or before the second
(2nd) anniversary of the Consummation Date, after which date all unclaimed
property shall revert to the Reorganized Debtor free of any restrictions thereon
and the claim of any holder or successor to such holder with respect to such
property shall be discharged and forever barred, notwithstanding any federal or
state escheat laws to the contrary.
J. FRACTIONAL DOLLARS; DE MINIMIS DISTRIBUTIONS
Any other provision of the Plan notwithstanding, payments of fractions
of dollars shall not be made. Whenever any payment of a fraction of a dollar
under the Plan would otherwise be called for, the actual payment made shall
reflect a rounding of such fraction to the nearest whole dollar (up or down),
with half dollars being rounded down. The Disbursing Agent, or any indenture
trustee, agent, or servicer, as the case may be, shall not make any payment of
less than twenty-five dollars ($25.00) with respect to any Claim unless a
request therefor is made in writing to such Disbursing Agent, indenture trustee,
agent, or servicer, as the case may be.
K. WITHHOLDING AND REPORTING REQUIREMENTS
In connection with this Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all tax
withholding and reporting requirements imposed by any federal, state, local, or
foreign taxing authority, and all distributions hereunder shall be subject to
any such withholding and reporting requirements. The Disbursing Agent shall be
authorized to take any and all actions that may be necessary or appropriate to
comply with such withholding and reporting requirements.
L. CALCULATION OF DISTRIBUTION AMOUNTS OF NEW COMMON STOCK
Under the Alternative Plan, no fractional shares of New Common Stock
shall be issued or distributed under the Plan by Reorganized Debtor, or the
Disbursing Agent. Each Person entitled to receive New Common Stock will receive
the total number of whole shares of New Common Stock to which such Person is
entitled. Whenever any distribution to a particular Person would otherwise call
for distribution of a fraction of a share of New Common Stock, the actual
distribution of shares of such New Common Stock shall be rounded to the next
higher or lower whole number as follows: (a) fractions 1/2 or greater shall be
rounded to the next higher whole number, and (b) fractions of less than 1/2
shall be rounded to the next lower whole number. The total number of shares of
New Common Stock to be distributed to the holder of a Class 2 Senior Note Claim
shall be adjusted as necessary to account for the rounding provided for in this
Article VIII.K. No consideration shall be provided in lieu of fractional shares
that are rounded down.
M. SETOFFS
The Reorganized Debtor may, but shall not be required to, set off
against any Claim, and the payments or other distributions to be made pursuant
to the Plan in respect of such Claim, claims of any nature whatsoever that the
Debtor or Reorganized Debtor may have against the holder of such Claim;
PROVIDED, HOWEVER, that neither the failure to do so nor the allowance of any
Claim hereunder shall constitute a waiver or release by the Reorganized Debtor
24
of any such claim that the Debtor or Reorganized Debtor may have against such
holder.
ARTICLE VIII.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS
A. OBJECTION DEADLINE; PROSECUTION OF OBJECTIONS
As soon as practicable, but in no event later than sixty (60) days
after the Consummation Date (unless extended by an order of the Bankruptcy
Court), the Reorganized Debtor shall file objections to Claims with the
Bankruptcy Court and serve such objections upon the holders of each of the
Claims to which objections are made. Nothing contained herein, however, shall
limit the Reorganized Debtor's right to object to Claims, if any, filed or
amended more than sixty (60) days after the Consummation Date.
B. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a Disputed
Claim unless and until all objections to such Disputed Claim have been settled
or withdrawn or have been determined by Final Order, and the Disputed Claim, or
some portion thereof, has become an Allowed Claim.
C. DISTRIBUTION RESERVE
1. The Disbursing Agent shall withhold the Distribution Reserve from
the Cash or other property (other than the New Senior Notes and Total Cash
Consideration, or, if the Direction Letter is issued, the Alternative Plan
Consideration, to be distributed to the Indenture Trustee for the ratable
benefit of the holders of Allowed Class 2 Senior Notes Claims) to be distributed
under the Plan. As to any Disputed Claim, upon a request for estimation by the
Debtor, the Bankruptcy Court shall determine what amount is sufficient to
withhold as the Distribution Reserve. The Debtor may request estimation for
every Disputed Claim that is unliquidated and the Disbursing Agent shall
withhold the Distribution Reserve based upon the estimated amount of such Claim
as set forth in a Final Order. If the Debtor elects not to request such an
estimation from the Bankruptcy Court with respect to a Disputed Claim that is
liquidated, the Disbursing Agent shall withhold the Distribution Reserve based
upon the Face Amount of such Claim.
2. If practicable, the Disbursing Agent shall invest any Cash that is
withheld as the Distribution Reserve in a manner that shall yield a reasonable
net return, taking into account the safety of the investment.
D. DISTRIBUTIONS AFTER ALLOWANCE
The Reorganized Debtor or the Disbursing Agent, as the case may be,
shall make payments and distributions from the Distribution Reserve to each
holder of a Disputed Claim that has become an Allowed Claim in accordance with
the provisions of the Plan governing the class of Claims to which such holder
belongs. On the next succeeding interim distribution date after the date that
25
the order or judgment of the Bankruptcy Court allowing all or part of such Claim
becomes a Final Order, the Disbursing Agent shall distribute to the holder of
such Claim any Cash or other property in the Distribution Reserve that would
have been distributed on the Distribution Date had such Allowed Claim been
allowed on the Distribution Date. After a Final Order has been entered, or other
final resolution has been reached, with respect to each Disputed Claim, any Cash
or other property remaining in the Distribution Reserve shall become property of
the Reorganized Debtor. All distributions made under Article VIII.D of the Plan
on account of an Allowed Claim shall be made together with any dividends,
payments, or other distributions made on account of, as well as any obligations
arising from, the distributed property, as if such Allowed Claim had been an
Allowed Claim on the Distribution Date. Notwithstanding the foregoing, the
Disbursing Agent shall not be required to make distributions under Article
VIII.D more frequently than once every 180 days or to make any individual
payments in an amount less than $25.00.
ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION AND
CONSUMMATION OF THE PLAN
A. CONDITIONS TO CONFIRMATION
The Bankruptcy Court shall not enter the Confirmation Order unless and
until (i) the Confirmation Order shall be reasonably acceptable in form and
substance to the Debtor, the Lender and the Committee and (ii) the Confirmation
Order includes a finding of fact that the Debtor, the Reorganized Debtor, the
Committee, and their respective present and former members, officers, directors,
employees, advisors, attorneys, and agents acted in good faith within the
meaning of and with respect to all of the actions described in Section 1125(e)
of the Bankruptcy Code and are therefore not liable for the violation of any
applicable law, rule, or regulation governing such actions.
B. CONDITIONS TO CONSUMMATION
The following are conditions precedent to the occurrence of the
Consummation Date, each of which must be (i) satisfied or (ii) waived in
accordance with Article IX.C. below:
1. The Confirmation Order, in form and substance reasonably acceptable
to the Debtor, the Lender and the Committee, confirming the Plan, as the same
may have been modified, must have become a Final Order and must, among other
things, provide that:
(a) the Debtor and Reorganized Debtor are authorized and
directed to take all actions necessary or appropriate to enter into, implement
and consummate the contracts, instruments, releases, indentures and other
agreements or documents created in connection with the Plan or the Restructuring
or, if the Direction Letter is issued, the Alternative Plan;
(b) the provisions of the Confirmation Order are nonseverable
and mutually dependent;
26
(c) the transfers of property by the Debtor (a) to the
Reorganized Debtor (i) are or will be legal, valid, and effective transfers of
property, (ii) vest or will vest the Reorganized Debtor with good title to such
property free and clear of all Liens, charges, Claims, encumbrances, or
Interests, except as expressly provided in the Plan or Confirmation Order, (iii)
do not and will not constitute avoidable transfers under the Bankruptcy Code or
under applicable bankruptcy or nonbankruptcy law, and (iv) do not and will not
subject the Reorganized Debtor to any liability by reason of such transfer under
the Bankruptcy Code or under applicable nonbankruptcy law, including, without
limitation, any laws affecting successor or transferee liability, and (b) to
holders of Claims under the Plan are for good consideration and value and are in
the ordinary course of the Debtor's business;
(d) except as expressly provided in the Plan, the Debtor is
discharged effective upon the Confirmation Date from any "debt" (as that team is
defined in Section 101(12) of the Bankruptcy Code), and the Debtor's liability
in respect thereof is extinguished completely, whether reduced to judgment or
not, liquidated or unliquidated, contingent or noncontingent, asserted or
unasserted, fixed or unfixed, matured or unmatured, disputed or undisputed,
legal or equitable, or known or unknown, or obligation of the Debtor incurred
before the Confirmation Date, or from any conduct of the Debtor prior to the
Confirmation Date, or that otherwise arose before the Confirmation Date,
including, without limitation, all interest, if any, on any such debts, whether
such interest accrued before or after the Petition Date;
(e) the Plan does not provide for the liquidation of all or
substantially all of the property of the Debtor and its confirmation is not
likely to be followed by the liquidation of the Reorganized Debtor or the need
for further financial reorganization; and
(f) the New Senior Notes or, if the Direction Letter is
issued, the Alternative Plan Consideration, issued under the Plan, or the
Alternative Plan as the case may be, in exchange for Claims against NSC are
exempt from registration under the Securities Act pursuant to Section 1145 of
the Bankruptcy Code, except to the extent that holders of New Senior Notes, or
the Alternative Plan Consideration as the case may be, are "underwriters," as
that term is defined in Section 1145 of the Bankruptcy Code.
2. The Credit Parties shall have entered into the New Loan Facility,
PROVIDED that this shall not be a condition under the Alternative Plan.
3. Under the Primary Plan, the amount drawn under the New Loan Facility
shall be less than or equal to $61.5 million plus letters of credit, PROVIDED
that this shall not be a condition under the Alternative Plan.
4. Under the Alternative Plan, the drawn amount under the new loan
facility for the Operating Subsidiaries shall not exceed $35 million (net of
excess cash), PROVIDED that this shall not be a condition under the Primary
Plan.
5. The Debtor shall not have entered into, and shall not have permitted
any of its Operating Subsidiaries to enter into, any agreement containing change
in control or employee severance provisions with any employees or otherwise
27
except as disclosed to the Committee prior to the January 17, 2003 or as
otherwise consented to by the Committee, which consent shall not be unreasonably
withheld.
6. The Debtor shall not have taken any action to increase the amount of
the prepayment penalty on account of a change of control in the Extension
Agreement that would come due after the 180th day after the effective date of
the Extension Agreement to exceed $2.4 million without obtaining the prior
consent of the Committee.
7. The Consummation Date shall have occurred on or before September 30,
2003.
8. The following agreements, in form reasonably satisfactory to the
Debtor or Reorganized Debtor and the Committee, as the case may be, shall have
been executed and delivered, and all conditions precedent thereto shall have
been satisfied:
(a) Amended Certificate of Incorporation and Bylaws of NSC;
(b) Intercreditor Agreement;
(c) New Senior Note Indenture; and
(d) the Registration Rights Agreement, if the Alternative Plan
is consummated.
9. The Cash Consideration shall be $51 million, of which $15 million
shall be contributed by Existing Equity, provided that this shall not be a
condition under the Alternative Plan.
10. The New Senior Notes, or the Alternative Plan Notes, as the case
may be, shall be secured by the Subordinated Lien and the Subordinated Stock
Pledge.
11. Existing Equity shall have paid the Excess Prepayment Penalty, if
payable and barring the occurrence of any of the Excess Prepayment Penalty
Exceptions.
12. The Operating Subsidiaries shall have deposited into the Deposit
Account the Additional Cash Consideration on or before each Deposit Date and the
Deposit Account shall have been replenished in full should any portion of the
cash contained in the Deposit Account have been used for a Cash Usage Event or
any other event, provided that this shall not be a condition under the
Alternative Plan.
13. The Deposit Account shall remain property of the Operating
Subsidiaries, provided that this only shall be a condition under the Alternative
Plan.
14. All actions, documents and agreements necessary to implement the
Plan shall have been effected or executed.
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C. WAIVER OF CONDITIONS
Each of the conditions set forth in Article IX. may be waived in whole
or in part by the joint written consent of the Debtor or Reorganized Debtor, the
Committee, and with respect to Articles IX.B.1(a)-(e) and IX.B.7, the Lender in
their sole and absolute discretion, without any notice to parties in interest or
the Bankruptcy Court and without a hearing. The failure to satisfy or waive any
condition to the Consummation Date may be asserted by the Debtor, Reorganized
Debtor, the Committee or, with respect to Articles IXB.1 (a)-(e) and IX.B.7, the
Lender regardless of the circumstances giving rise to the failure of such
condition to be satisfied (including any action or inaction by the Debtor or
Reorganized Debtor). The failure of the Debtor, Reorganized Debtor, the
Committee, or the Lender to exercise any of the foregoing rights shall not be
deemed a waiver of any other rights, and each such right shall be deemed an
ongoing right that may be asserted at any time.
ARTICLE X.
MODIFICATIONS AND AMENDMENTS
The Debtor, upon the consent of the Committee, may alter, amend, or
modify the Plan or any Exhibits thereto under Section 1127(a) of the Bankruptcy
Code at any time prior to the Confirmation Date. After the Confirmation Date and
prior to substantial consummation of the Plan, as defined in Section 1l0l(2) of
the Bankruptcy Code, the Debtor may, under Section 1127(b) of the Bankruptcy
Code, institute proceedings in the Bankruptcy Court to remedy any defect or
omission or reconcile any inconsistencies in the Plan, the Disclosure Statement,
or the Confirmation Order, and such matters as may be necessary to carry out the
purposes and effects of the Plan so long as such Proceedings do not materially
adversely affect the treatment of holders of Claims or Interests under the Plan;
PROVIDED, HOWEVER, that prior notice of such proceedings shall be served in
accordance with the Bankruptcy Rules or order of the Bankruptcy Court.
ARTICLE XI.
RETENTION OF JURISDICTION
Under Sections 105(a) and 1142 of the Bankruptcy Code, and
notwithstanding entry of the Confirmation Order and occurrence of the
Consummation Date, the Bankruptcy Court shall retain exclusive jurisdiction over
all matters arising out of, and related to, the Chapter 11 Case and the Plan to
the fullest extent permitted by law, including, among other things, jurisdiction
to:
A. Allow, disallow, determine, liquidate, classify, estimate or
establish the priority or secured or unsecured status of any Claim or Interest,
including the resolution of any request for payment of any Administrative Claim
and the resolution of any objections to the allowance or of priority Claims or
Interests;
B. Hear and determine all applications for compensation and
reimbursement of expenses of Professionals under the Plan or under Sections 330,
331, 503(b), 1103 and 1129(a)(4) of the Bankruptcy Code; PROVIDED, HOWEVER, that
from and after the Consummation Date, the payment of the fees and expenses of
29
the retained professionals of the Reorganized Debtor shall be made in the
ordinary course of business and shall not be subject to the approval of the
Bankruptcy Court;
C. Hear and determine any and all adversary proceedings, motions,
applications, and contested or litigated matters arising out of, under, or
related to, the Chapter 11 Case, including, but not limited to, any and all
motions for approval of asset sales by the Debtor filed by the Debtor on or
before the Consummation Date;
D. Enter such orders as may be necessary or appropriate to execute,
implement, or consummate the provisions of the Plan and all contracts,
instruments, releases, and other agreements or documents created in connection
with the Plan, the Disclosure Statement or the Confirmation Order;
E. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan,
including disputes arising under agreements, documents or instruments executed
in connection with the Plan;
F. Consider any modifications of the Plan, cure any defect or omission,
or reconcile any inconsistency in any order of the Bankruptcy Court, including,
without limitation, the Confirmation Order;
G. Issue injunctions, enter and implement other orders, or take such
other actions as may be necessary or appropriate to restrain interference by any
entity with implementation, consummation, or enforcement of the Plan or the
Confirmation Order;
H. Enter and implement such orders as may be necessary or appropriate
if the Confirmation Order is for any reason reversed, stayed, revoked, modified,
or vacated;
I. Hear and determine any matters arising in connection with or
relating to the Plan, the Disclosure Statement, the Confirmation Order, or any
contract, instrument, release, or other agreement or document created in
connection with the Plan, the Disclosure Statement or the Confirmation Order;
J. Enforce all orders, judgments, injunctions, releases, exculpations,
indemnifications and rulings entered in connection with the Chapter 11 Case;
K. Recover all assets of the Debtor and property of the Debtor's
Estate, wherever located;
L. Hear and determine matters concerning state, local, and federal
taxes in accordance with Sections 346, 505, and 1146 of the Bankruptcy Code;
M. Hear and determine all disputes involving the existence, nature, or
scope of the Debtor's discharge;
30
N. Hear and determine such other matters as may be provided in the
Confirmation Order or as may be authorized under, or not inconsistent with,
provisions of the Bankruptcy Code;
O. Enter a final decree closing the Chapter 11 Case.
ARTICLE XII.
COMPROMISES AND SETTLEMENTS
Pursuant to Fed. R. Bankr. P. 9019(a), the Debtor may compromise and
settle various Claims against it and/or claims that it may have against other
Persons. The Debtor expressly reserves the right (with Bankruptcy Court
approval, following appropriate notice and opportunity for a hearing) to
compromise and settle Claims against it and claims that it may have against
other Persons up to and including the Consummation Date. After the Consummation
Date, such right shall pass to the Reorganized Debtor or the Estate pursuant to
Articles IV.E and IV.F of the Plan.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
A. BAR DATES FOR CERTAIN CLAIMS
1. ADMINISTRATIVE CLAIMS: SUBSTANTIAL CONTRIBUTION CLAIMS
The Confirmation Order will establish an Administrative Claims Bar Date
for filing of all Administrative Claims, including Substantial Contribution
Claims (but not including claims for Professional Fees or the expenses of the
members of the Committee (if one has been appointed)), which date will be 45
days after the Consummation Date. Holders of asserted Administrative Claims,
other than claims for Professional Fees or the expenses of the members of the
Committee not paid prior to the Consummation Date, must submit proofs of
Administrative Claim on or before such Administrative Claims Bar Date or forever
be barred from doing so. A notice prepared by the Reorganized Debtor will set
forth such date and constitute notice of this Administrative Claims Bar Date.
The Debtor or Reorganized Debtor, as the case may be, shal1 have 45 days (or
such longer period as may be allowed by order of the Bankruptcy Court) following
the Administrative Claims Bar Date to review and object to such Administrative
Claims before a hearing for determination of allowance of such Administrative
Claims.
2. PROFESSIONAL FEE CLAIMS
All final requests for compensation or reimbursement of Professional
Fees pursuant to Sections 327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy
Code for services rendered to the Debtor or the Committee (if one has been
appointed) prior to the Consummation Date (other than Substantial Contribution
Claims under Section 503(b)(4) of the Bankruptcy Code) must be filed and served
on the Reorganized Debtor and its counsel no later than 45 days after the
Consummation Date, unless otherwise ordered by the Bankruptcy Court. Objections
to applications of such Professionals or other entities for compensation or
31
reimbursement of expenses must be filed and served on the Reorganized Debtor and
its counsel and the requesting Professional or other entity no later than 45
days (or such longer period as may be allowed by order of the Bankruptcy Court)
after the date on which the applicable application for compensation or
reimbursement was served.
B. PAYMENT OF STATUTORY FEES
All fees payable pursuant to Section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the Confirmation shall be
paid on or before the Consummation Date.
C. SEVERABILITY OF PLAN PROVISIONS
If, prior to Confirmation, any term or provision of the Plan is held by
the Bankruptcy Court to be invalid, void or unenforceable, the Bankruptcy Court,
at the request of the Debtor, shall have the power to alter and interpret such
term or provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan shall remain in full force and effect and shall in no way be affected,
impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order shall constitute a judicial determination and shall provide
that each term and provision of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
D. SUCCESSORS AND ASSIGNS
The rights, benefits and obligations of any entity named or referred to
in the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of such entity.
E. RELEASES AND SATISFACTION OF SUBORDINATION RIGHTS
All Claims of the holders of the Senior Notes against the Debtor and
all rights and claims between or among such holder relating in any manner
whatsoever to any claimed subordination rights (if any), shall be deemed
satisfied by the distributions under, described in, contemplated by, and/or
implemented by this Plan to holders of Claims having such subordination rights,
and such subordination rights shall be deemed waived, released, discharged, and
terminated as of the Consummation Date, and all actions related to the
enforcement of such subordination rights shall be permanently enjoined.
Distributions under, described in, contemplated by, and/or implemented by this
Plan to the various Classes of Claims hereunder shall not be subject to levy,
garnishment, attachment, or like legal process by any holder of a Claim,
including, but not limited to, holders of Senior Note Claims, by reason of my
claimed subordination rights or otherwise, so that each holder of a Claim shall
have and receive the benefit of the distributions in the manner set forth in the
Plan.
32
F. DISCHARGE OF THE DEBTOR
All consideration distributed under the Plan shall be in exchange for,
and in complete satisfaction, settlement, discharge, and release of, all Claims
of any nature whatsoever against the Debtor or any of its assets or properties,
and, except as otherwise provided herein or in the Confirmation Order, and
regardless of whether any property shall have been distributed or retained
pursuant to the Plan on account of such Claims, upon the Consummation Date, the
Debtor, shall be deemed discharged and released under Section 1141(d)(l)(A) of
the Bankruptcy Code from any and all Claims, including, but not limited to,
demands and liabilities that arose before the Confirmation Date, and all debts
of the kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy
Code, whether or not (a) a proof of Claim based upon such debt is filed or
deemed filed under Section 501 of the Bankruptcy Code, (b) a Claim based upon
such debt is Allowed under Section 502 of the Bankruptcy Code, or (c) the holder
of a Claim based upon such debt accepted the Plan. The Confirmation Order shall
be a judicial determination of discharge of all liabilities of the Debtor,
subject to the Consummation Date occurring.
G. COMMITTEE
Effective on the Consummation Date, the duties of the Committee shall
terminate, except with respect to any appeal of an order in the Chapter 11 Case
and applications for Professional Fees.
H. EXCULPATION AND LIMITATION OF LIABILITY
Neither the Reorganized Debtor, the Lender, nor the Committee, or any
of their respective present or former members, officers, directors, employees,
advisors, attorneys, or agents, shall have or incur any liability to any holder
of a Claim or an Interest, or any other party in interest, or any of their
respective agents, employees, representatives, financial advisors, attorneys, or
affiliates, or any of their successors or assigns, for any act or omission in
connection with, relating to, or arising out of, the Chapter 11 Case,
negotiation of the Plan, the solicitation of acceptances of the Plan, the
pursuit of confirmation of the Plan, the consummation of the Plan, or the
administration of the Plan or the property to be distributed under the Plan,
except for their willful misconduct, and in all respects shall be entitled to
reasonably rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan. Without limiting any of the foregoing, the
Committee and its members and advisors shall not incur any liability to any
holder of a Claim or an Interest, or any other party in interest, or any of
their respective agents, employees, representatives, financial advisors,
attorneys, or affiliates, or any of their successors or assigns, for any act or
omission in connection with, relating to, or arising out of, any issuance or
withdrawal of the Direction Letter.
Notwithstanding any other provision of this Plan, no holder of a Claim
or Interest, no other party in interest, none of their respective agents,
employees, representatives, financial advisors, attorneys, or affiliates, and no
successors or assigns of the foregoing, shall have any right of action against
the Reorganized Debtor, or any statutory committee, or any of their respective
present or former members, officers, directors, employees, advisors, attorneys,
or agents, for any act or omission in connection with, relating to, or arising
33
out of, the Chapter 11 Case, the solicitation of acceptances of the Plan, the
pursuit of confirmation of the Plan, the consummation of the Plan, or the
administration of the Plan or the property to be distributed under the Plan,
except for their willful misconduct.
The foregoing exculpation and limitation on liability shall not,
however, limit, abridge, or otherwise affect the rights, if any, of the
Reorganized Debtor to enforce, sue on, settle, or compromise the Litigation
Claims retained pursuant to Article IV.F hereof.
I. PERMANENT INJUNCTION
Except as otherwise expressly provided in the Plan or the Confirmation
Order, all entities who have held, hold or may hold Claims against, or Interests
in, the Debtor will be permanently enjoined, on and after the Consummation Date,
from (i) commencing or continuing in any manner any action or other proceeding
of any kind with respect to any such Claim or Interest, (ii) the enforcement,
attachment, collection, or recovery by any manner or means of judgment, award,
decree or order against the Debtor on account of any such Claim or Interest,
(iii) creating, perfecting, or enforcing any encumbrance of any kind against the
Debtor or against the property or interests in property of the Debtor on account
of any such Claim or Interest, and (iv) asserting any right of setoff,
subrogation, or recoupment of any kind against any obligation due from the
Debtor or against the property or interests in property of the Debtor on account
of any such Claim or Interest. The foregoing the injunction will extend to
successors of the Debtor (including, without limitation, the Reorganized Debtor)
and their respective properties and interests in property.
J. RELEASES
The distributions provided for in this Plan are in full satisfaction,
settlement, release and discharge of all Claims against and Interests in the
Debtor and its Estate. Effective as of the Confirmation Date, but subject to the
occurrence of the Consummation Date, and except as otherwise provided in this
Plan or the Confirmation Order, each Released Party shall be deemed to have
released the other Released Parties from all Claims, obligations, rights, causes
of action or liabilities which any such Person is, or 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
occurrence taking place on or before the Consummation Date in any way relating
to the Debtor, this Chapter 11 Case, or this Plan.
K. BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of the Debtor,
all present and former holders of Claims against and Interests in the Debtor,
their respective successors and assigns, including, but not limited to, the
Reorganized Debtor, and all other parties-in-interest in this Chapter 11 Case.
L. REVOCATION, WITHDRAWAL, OR NON-CONSUMMATION
The Debtor reserves the right to revoke or withdraw the Plan at any
time prior to the Confirmation Date and to file subsequent plans of
reorganization. If the Debtor revokes or withdraws the Plan, or if Confirmation
or Consummation does not occur, then (i) the Plan shall be null and void in all
34
respects, (ii) any settlement or compromise embodied in the Plan (including the
fixing or limiting to an amount certain any Claim or Class of Claims), and any
document or agreement executed pursuant to the Plan shall be deemed null and
void, and (iii) nothing contained in the Plan, and no acts taken in preparation
for consummation of the Plan, shall (a) constitute or be deemed to constitute a
waiver or release of any Claims by or against, or any Interests in, the Debtor
or any other Person, (b) prejudice in any manner the rights of the Debtor or any
Person in any further proceedings involving a Debtor, or (iii) constitute an
admission of any sort by the Debtor or any other Person.
M. PLAN SUPPLEMENT
Any and all exhibits, lists, or schedules not filed with the Plan shall
be contained in the Plan Supplement and filed with the Clerk of the Bankruptcy
Court not later than the tenth (10th) day prior to the Consummation Date. Upon
its filing with the Bankruptcy Court, the Plan Supplement may be inspected in
the office of the Clerk of the Bankruptcy Court during normal court hours.
Holders of Claims or Interests may obtain a copy of the Plan Supplement upon
written request to the Debtor in accordance with Article XIII.N of the Plan.
N. NOTICES
Any notice, request, or demand required or permitted to be made or
provided to or upon a Debtor, Reorganized Debtor or Committee under the Plan
shall be (i) in writing, (ii) served by (a) certified mail, return receipt
requested, (b) hand delivery, (c) overnight delivery service, (d) first class
mail, or (e) facsimile transmission, and (iii) deemed to have been duly given or
made when actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed, addressed as follows:
William T. Keon, III
NUTRITIONAL SOURCING CORPORATION
550 Biltmore Way
Suite 900
Coral Gables, Florida 33134
Telephone: (305) 442-3407
Facsimile: (305) 447-1389
with a copy to:
Michael B. Solow
Harold D. Israel
KAYE SCHOLER LLC
Three First National Plaza
70 West Madison Street, Suite 4100
Chicago, Illinois 60602
Telephone: (312) 583-2300
Facsimile: (312) 583-2360
and
35
Michael J. Sage
Edward O. Sassower
STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, New York 10038
Telephone: (212) 806-5400
Facsimile: (212) 806-6006
O. INDEMNIFICATION OBLIGATIONS
Except as otherwise specifically limited in this Plan, any obligations
or rights of the Debtor to indemnify its present and former directors, officers,
or employees pursuant to the Debtor's certificate of incorporation, by-laws,
policy of providing employee indemnification, applicable state law, or specific
agreement in respect of any claims, demands, suits, causes of action, or
proceedings against such directors, officers, or employees based upon any act or
omission related to such present and former directors', officers', or employees'
service with, for, or on behalf of the Debtor, shall survive confirmation of
this Plan and remain unaffected thereby, irrespective of whether indemnification
is owed in connection with an occurrence before or after the Petition Date.
If the Direction Letter is issued, none of the indemnification
provisions currently in place for directors, officers and each of the Debtor's
advisors (whether in the Debtor's bylaws, contracts or otherwise) shall survive
confirmation of the Plan except to the extent that (i) any related claims are
covered by insurance policies in respect of the Debtor and (ii) the
indemnification is part of the retention of an advisor approved by the
Bankruptcy Court. The Debtor may obtain sufficient tail coverage under its
existing directors and officers insurance policy for current officers and
directors provided that the terms are reasonably acceptable to the Debtor and
the Committee.
P. PREPAYMENT
Except as otherwise provided in this Plan or the Confirmation Order,
the Debtor shall have the right to prepay, without penalty, all or any portion
of an Allowed Claim at any time; PROVIDED, HOWEVER, that any such prepayment
shall not be violative of, or otherwise prejudice, the relative priorities and
parties among the classes of Claims.
Q. TERM OF INJUNCTIONS OR STAY
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Case under Sections 105 or
362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date
(excluding any injunctions or stays contained in this Plan or the Confirmation
Order), shall remain in full force and effect until the Consummation Date.
36
R. REGISTRATION RIGHTS AGREEMENT
Without limiting the effect of Section 1145 of the Bankruptcy Code, on
the Effective Date, under the Alternative Plan, the Reorganized Debtor will be
deemed to have entered into a Registration Rights Agreement with each holder of
a Claim entitled to a distribution of New Common Stock (i) who by virtue of
holding New Common Stock to be distributed under the Plan and/or its
relationship with Reorganized Debtor could reasonably be deemed to be an
"affiliate" (as such term is used within the meaning of applicable securities
laws) of Reorganized Debtor, and (b) who requests in writing that New Common
Stock execute such agreement. The Registration Rights Agreement shall contain
certain shelf, demand and piggyback registration rights for the benefit of the
signatories thereto.
S. HART-SCOTT-RODINO COMPLIANCE
Any shares of New Common Stock distributed under the Alternative Plan
to any entity required to file a Premerger Notification and Report Form under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall not
be distributed until the notification and waiting periods applicable under such
Act to such entity shall have expired or been terminated. Any filing fees
associated with any such filing shall be paid by the Reorganized Debtor.
T. ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND INTEREST
To the extent that any Allowed Claim entitled to a distribution under
the Plan is comprised of indebtedness and accrued but unpaid interest thereon,
the value of such distribution shall be allocated to the principal amount of the
Claim first and then, to the extent consideration exceeds the principal amount
of the Claim, to accrued but unpaid interest.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
37
U. GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Delaware
shall govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with the Plan and (ii) the
laws of the state of incorporation of the Debtor shall govern corporate
governance matters with respect to such Debtor, in either case without giving
effect to the principles of conflicts of law thereof.
Dated: Wilmington, Delaware
January 31, 2003
NUTRITIONAL SOURCING CORPORATION
By: /s/ Daniel J.O'Leary
--------------------------------
Name: Daniel J. O'Leary
Title: Chief Financial Officer
Michael B. Solow
Harold D. Israel
KAYE SCHOLER LLC
Three First National Plaza
70 West Madison Street, Suite 4100
Chicago, Illinois 60602
Telephone: (312) 583-2300
Facsimile: (312) 583-2360
-and-
Richard W. Riley
DUANE MORRIS LLP
1100 North Mark Street
Suite 1200
Wilmington, DE 19801
Telephone: (302) 657-4900
Facsimile: (302) 657-4901
ATTORNEYS FOR NUTRITIONAL SOURCING CORPORATION
38
TABLE OF EXHIBITS
PAGE
----
EXHIBIT NAME
A Amended Certificate of Incorporation and Bylaws of NSC
B New Senior Note Indenture
C Intercreditor Agreement
D Registration Rights Agreement
39