Warnicke & Littler, P.L.C.
1411 N. Third Street
Phoenix, Arizona 85004
TELEPHONE (602) 256-0400
FAX (602) 256-0345
E-MAIL: administrator@warnickelittler.com
Ronald E. Warnicke/SBN 001791
Thomas E. Littler/SBN 006917
Attorneys for Debtor
COPY OF
ORIGINAL FILED ON THIS DATE
JUL 26 2002
Kevin E. O'Brien
CLERK U.S. BANKRUPTCY
COURT, DIST. OF AZ
UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In re:
No. 02-01090-PHX-RTB
In re:
MW MEDICAL, INC., a Nevada corporation,) No. 02-01090-PHX-RTB
)
Debtor. ) Chapter 11
- ---------------------------------------------------------------------
In re: )
)
MICROWAVE MEDICAL CORPORATION, )
a California corporation, ) No. 02-01298-PHX-GBN
)
)
)
Debtor. ) Chapter 11
- ---------------------------------------------------------------------
AMENDED
ORDER CONFIRMING DEBTORS'
FIRST AMENDED JOINT PLAN OF REORGANIZATION
Hearing Date: May 29, 2002
Hearing Time: 9:00 a.m.
This matter came before the Court on May 29, 2002, for a confirmation
hearing on the Debtors' Amended Joint Plan of Reorganization, (the "Plan"),
which was set by the Court on April 11, 2002. Unless stated otherwise, all
terms defined in the Plan will have the same meanings when used in this Order.
With respect to the Plan, the Court finds and concludes as follows:
1, By an Order dated April 11, 2002, the Court approved the Debtors' First
Amended Joint Disclosure Statement (the "Disclosure Statement") related to the
First Amended Joint Plan after circulation of the Disclosure Statement and Plan
as required by the Bankruptcy Code; said Order fixed the procedures related to
the solicitation of votes on the Plan. Following the Court's entry of the Order
approving the Disclosure Statement, plan solicitation packages, including the
Disclosure Statement, were timely transmitted to the creditors and plan packages
including a court approved summary of the Disclosure Statement
were mailed to equity security holders, all in accordance with Bankruptcy Rule
3017(d) and other applicable procedural rules.
2. Voting on the Joint Plan is summarized in the "Ballot Report" (the
-------------
"Ballot Report") filed by the Debtors with the Court on May 24, 2002. Each class
of creditors accepted the Plan in the requisite percentages, no vote was cast
against the Plan by any creditor and the Plan is fully consensual.
3. Only one objection to the Joint Plan was filed. The objection was filed
by the Internal Revenue Service, seeking that the Plan not be confirmed unless
arrangements for payment of its priority claim be made. The Internal Revenue
Service was represented in open court and has agreed that its objection be ruled
upon and has presented no evidence to support its estimate that monies are due.
The Internal Revenue Service withdraws its claim and has approved the form of
this Order.
4. On May 29, 2002, the Court conducted the confirmation hearing on the
Joint Plan, at which time the Court considered all pleadings and other documents
related to plan confirmation, including, but not limited to: (i) the Plan terms
in the First Amended Joint Plan attached hereto as Exhibit 1; and (ii) argument
by counsel and parties in interest appearing at the confirmation hearing; and,
(iii) the proposed modification of the Plan providing for non cash payment of an
administrative claim in exchange for stock in an affiliate under Section 1145 of
the Bankruptcy Code. The Court also considered any prior testimony, evidence and
motions that have been presented or filed in these cases, and the entire record
before the Court.
5. The Court expressly finds and concludes that modification to the Plan
for payment of Warnicke & Littler or Ronald E. Warnicke as an administrative
expense, incorporated in the modified Plan attached hereto as Exhibit 1, does
not materially or adversely change the treatment of any creditor or
party-in-interest who has previously cast a ballot to or reject the Plan and
that the principal purpose of the modification to the Joint Plan is to pay
administrative expenses for which the Debtors have no
2
funds available. Said administrative expense is reasonable based upon the work
done in this case as apparent from the record involved in taking this case to
successful confirmation and said claim is deemed allowed and shall be fully paid
pursuant to the modification as set forth in Exhibit "1". Accordingly, no
further disclosure of information, solicitation of creditors and parties in
interest, or voting is required with respect to the modification of the First
Amended Joint Plan attached hereto as Exhibit "1." The term "Plan" used in this
Order shall hereinafter include the First Amended Joint Plan as modified and
attached hereto as Exhibit "1", certain typographical errors in the attachment
to Exhibit "1" having been corrected.
6. Confirmation of the Plan is a core proceeding under 28 U.S.C.
Sec.157(b)(2). Pursuant to 28 U.S.C. Sec.Sec.157(b)(2) and 1334, this Court has
the jurisdiction to enter a final order confirming the Plan. The Court finds
that the First Amended Joint Plan of Reorganization substantively consolidates
the two bankruptcy cases.
7. The Plan and this Court's hearing thereon were filed in good faith, duly
and properly noticed to all creditors and parties in interest in the Debtors'
Chapter 11 cases. The Court has determined that the Plan (attached hereto as
Exhibit "1") satisfies the requirements for confirmation set forth in the
Bankruptcy Code Sec.1129 (a) through (d) and that the modification is not
material.
Based on the foregoing findings and conclusions, and the entire record
before the Court; and good cause appearing, IT IS HEREBY ORDERED as follows:
A. The Plan, attached hereto as Exhibit 1, shall be, and hereby is,
confirmed pursuant to Bankruptcy Code Sec.1129 and the objection of the Internal
Revenue Service is overruled and denied. The two bankruptcy cases are
substantively consolidated.
B. The Debtors and all other necessary parties are authorized, empowered,
and directed, without further Order of this Court and pursuant to Bankruptcy
Code Sec. Sec. 1142 and 1145, to execute and
3
deliver any instrument, any shares of free trading stock pursuant to the Plan,
or any other document incidental to consummation of the Plan and to perform any
act, that is necessary, desirable, or required for the consummation of the Plan.
Pursuant to Bankruptcy Code Sec.1141, and except as otherwise provided in the
Plan or this Order, entry of this Order discharges any and all Claims against
the Debtors, including, but not limited to, any Claim which arose at any time
before the entry of the Order and any Claim of a kind described in Bankruptcy
Code Sec.502(g), (h) and (i). On and after the Confirmation Date, and as to
every discharged Claim, every holder of a Claim shall be precluded from
asserting against the Debtors, and any assets of the Debtors, any such
discharged Claim and any rights, remedies, demands, damages, or liabilities of
any kind arising from or related to any such discharged Claim. Debtors as used
in this paragraph of this order includes all successors and/or affiliates.
C. Chapter 11 debtors may pay Chapter 11 fees to the Office of the U.S.
Trustee after confirmation of a plan of reorganization and the Debtors shall be,
and hereby are, directed to continue paying in cash the U.S. Trustee fees from
and after the Confirmation Date as such fees become due until the Debtors' cases
are closed.
D. This Court shall retain jurisdiction in accordance with the terms of
Article 10 of the Plan. This retention of jurisdiction shall not, and does not,
affect the finality of this Order. The Court hereby expressly directs that this
Order shall be entered forthwith, and shall be effective immediately.
JUL 26 2002
DATED this ____ day of __________, 2002.
/s/ REDFIELD T BAUM
-------------------------------------
THE HONORABLE REDFIELD T BAUM
UNITED STATES BANKRUPTCY JUDGE
ACCEPTED AND APPROVED
AS TO FORM AND CONTENT.
/s/ Paul A. Randolph
________________________________________
Paul A. Randolph
United States Attorney
District of Arizona
4
Warnicke & Littler, P.L.C.
1411 N. Third Street
Phoenix, Arizona 85004
TELEPHONE (602) 256-0400
FAX (602) 256-0345
E-MAIL: administrator@warnickelittler.com
Ronald E. Warnicke/SBN 001791
Thomas E. Littler/SBN 006917
Attorneys for Debtor
RECEIVED
2002 MAY 29 P 3:19
Kevin E. O'Brien
CLERK U.S. BANKRUPTCY
COURT, DIST. OF AZ
UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In re:
MW MEDICAL, INC., a Nevada corporation,) No. 02-01090-ECF -RTB
)
Debtor. ) Chapter 11
- ---------------------------------------------------------------------
In re: )
)
MICROWAVE MEDICAL CORPORATION, )
a California corporation, ) No. 02-01298-ECF
)
Debtor. ) Chapter 11
- ---------------------------------------------------------------------
FIRST AMENDED JOINT PLAN OF REORGANIZATION DATED FEBRUARY 21, 2002
PROPOSED BY WARNICKE & LITTLER FOR THE DEBTORS
AS MODIFIED AT CONFIRMATION HEARING
_____________________________________
ARTICLE PAGE
- ------- ----
I. DEFINITIONS 2
1.01 Defined Terms 2
1.02 Undefined Terms 2
1.03 Interpretation 2
II. CLASSIFICATION OF CLAIMS AND INTERESTS 2
2.01 General 2
2.02 Class 1: Administrative Expenses 2
2.03 Class 2: Priority Tax Claims 3
2.04 Class 3: Priority Wage Claims. 3
2.05 Class 4: General Unsecured Claims 3
2.06 Class 5: Unsecured Portion of Secured Creditors'
Claims 3
2.07 Class 6: Secured Claims 3
2.08 Class 7: Equity Security Holders' Interest 3
2.09 Elimination of Classes 3
III. IDENTIFICATION OF UNIMPAIRED CLASSES OF
CLAIMS AND EQUITY INTERESTS 3
3.01 Unimpaired Classes of Claims 3
3.02 Impairment Controversies 3
IV. ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF
REJECTION BY ONE OR MORE CLASSES OF CLAIMS 4
4.01 Classes Entitled to Vote 4
4.02 Creditors Not Entitled to Vote 4
4.03 Class Acceptance Requirement 4
4.04 One Vote Per Holder 4
4.05 Cramdown 4
V. TREATMENT OF ADMINISTRATIVE EXPENSES AND
CLASSES NOT IMPAIRED UNDER THE PLAN 4
5.01 Class 1: Administrative Expenses 4
5.02 Class 2: Priority Tax Claims 5
VI. TREATMENT OF CLASSES IMPAIRED UNDER THE PLAN 5
6.01 Class 3: Priority Wage Claims 5
6.02 Class 4: General Unsecured Claims 5
6.03 Class 5: Unsecured Portion of Secured
Creditor's Claim 5
6.04 Class 6: Secured Claims 6
6.05 Class 7: Equity Security Holders' Interests 6
VII. IMPLEMENTATION OF THE PLAN 6
7.01 Procedure To Implement The Plan 6
7.02 Appointment of a Disbursing Agent 6
a. Duties Of The Disbursing Agent 6
b. Termination of Disbursing Agents' Duties 7
7.03 Effectuating Documents 7
7.04 Property Vests In The Debtor 7
7.05 Unclaimed Monies 7
7.06 Binding to Debtor And Creditors 7
VIII. CONDITIONS OF CONFIRMATION 7
8.01 Conditions To Confirmation Of The Plan 7
i
IX. GENERAL PROCEDURES FOR OBJECTING TO CLAIMS
AND RESOLVING AND TREATING CONTESTED AND
CONTINGENT CLAIMS 8
9.01 Claim Objection Deadline 8
9.02 Preservation Of Objections To Claims 9
9.03 No Monetary Distributions Pending
Resolution Of Objections 9
9.04 Interest On Contested Claims and
Contingent Claims 9
9.05 Treatment Of Contingent Claims 9
9.06 Disallowance Of Post-Petition Additions 10
9.07 Settlement Of Disputed Claims 10
9.08 Preservation Of Debtors' Claims, Demands
And Causes of Action 10
X. GENERAL PROVISIONS 10
10.01 Post-Confirmation Operating Of The
Automatic Stay 10
10.02 Prohibition Against Discriminating
Treatment Against The Debtor 10
10.03 Compliance With Tax Requirements 11
10.04 Insurance 11
10.05 Termination Of Adequate Protection Payments 11
10.06 No Additional Charges 11
10.07 Deficiency Claims 11
10.08 Barring Of Claims 11
10.09 Amount Of Claims 11
10.10 Remedies To Cure Defects 11
10.11 Retention of Jurisdiction 11
10.12 Modification Of Plan 12
10.13 Severability 13
10.14 Revocation Of Plan 13
XI. DISCHARGE OF DEBTOR 13
11.01 Discharge Of The Debtor 13
11.02 Effect Of Discharge On Other Entities 14
11.03 Modification Of Plan Due To Default 14
XII. TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES 14
12.01 Description of Executory Contracts 14
12.02 Rejected If Not Assumed 14
12.03 Expired Contracts Or Leases 14
12.04 Bar To Rejection Damages 14
12.05 Treatment of Claims Arising From
Assumption Or Rejection 15
ii
ARTICLE I
DEFINITIONS
1.01 Defined Terms. The capitalized terms used in this Plan shall have
--------------
the meanings as set forth in Appendix "A" attached hereto. Unless otherwise
specifically stated, the term Debtor shall mean both the joint proponents of the
Plan
1.02 Undefined Terms. Terms and phrases, whether capitalized or not, that
---------------
are used and not defined in Appendix "A" attached hereto, but are defined by the
Bankruptcy Code, have the meanings ascribed to them in the Bankruptcy Code.
1.03 Interpretation. The headings in this Plan are for convenience and
--------------
reference only and shall not limit or otherwise affect the provisions hereof.
Words denoting the singular number shall include the plural number and vice
versa, and words denoting one gender shall include the other gender.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
2.01 General. For the purposes of organization only with respect to
-------
administrative expenses and for purposes of organization, voting and all
Confirmation matters with respect to all Claims of Creditors of the Debtor, this
Plan classifies Claims of all creditors of both Joint Debtors collectively
without regard to the Debtor contracting the debt. The claims are then placed
in the separate and distinct Classes as set forth in this Article II. The
following Classes shall include all claims against either Joint Debtor without
regard to which of the two actually incurred the debt.
2.02 Class 1: Administrative Expenses. Class 1 shall consist of the costs
--------------------------------
and expenses of administration as defined in Sec. 503 of the Bankruptcy Code for
which application or allowance is made, or a Claim is filed, as the same are
allowed, approved, and ordered paid by the Court. Administrative Expenses shall
consist of: (1) all Claims arising under Sec. 330 of the Bankruptcy Code,
including reasonable compensation for actual and necessary services rendered by
a professional person (including attorneys) and by any paraprofessional persons
employed by such, based on, among other things, the nature, extent and value of
such services, the time spent on such services, and the cost of comparable
services other than in a case under Title 11; (2) the costs and expenses of the
administration of this proceeding, including, but not limited to, any Bankruptcy
Court Clerk fees or Court Reporter's fees which
2
have not been paid, and the cost of reproduction and mailing of this Plan and
the Disclosure Statement; (3) any post-petition operating expenses of the Debtor
which are due and unpaid at Confirmation; and (4) the actual and necessary costs
of preserving the Estate.
2.03 Class 2: Priority Tax Claims. Class 2 consists of all tax
--------------------------------
obligations of the Debtor, if any, which are entitled to priority under Sec.
507(a)(8) of the Bankruptcy Code.
2.04 Class 3: Priority Wage Claims. Class 3 consists of priority
----------------------------------
wage claims.
2.05 Class 4: General Unsecured Claims. Class 4 consists of the
--------------------------------------
Allowed general Unsecured Claims. This Class shall include all Claims not
otherwise classified.
2.06 Class 5: Unsecured Portion of Secured Creditors' Claims. The
----------------------------------------------------------
Class 5 consists of the unsecured portion of Jan Wallace's secured claim. This
is hereby fixed at $50,000.
2.07 Class 6: Secured Claims. Class 6 consists of the secured
-------------------------
claim of Class 5 Jan Wallace which is fixed at $1,139.939.70. That amount shall
be evidenced by a new note secured by the same existing security interest. The
note shall be payable on or before September 30, 2002.
2.08 Class 7: Equity Security Holders' Interests. Class 7 consists
---------------------------------------------
of all equity interests represented by membership interests in the Debtor.
2.09 Elimination of Classes. Any Class that is not occupied as of the
-----------------------
of the hearing on confirmation of this Plan by an Allowed Claim or a Claim
temporarily allowed pursuant to Rule 3019 of the Bankruptcy Rules shall be
deemed deleted from this Plan for purposes of voting on acceptance or rejection
of this Plan and for the purpose of determining whether this Plan has been
accepted by such Class pursuant to Section 1129 of the Bankruptcy Code.
ARTICLE III
IDENTIFICATION OF UNIMPAIRED CLASSES OF
CLAIMS AND EQUITY INTERESTS
3.01 Impaired Classes of Claims. Classes 3, 4, 5 and 6 are impaired
-----------------------------
under this Plan. Administrative Expenses (Class 1) and Priority Tax Claims
(Class 2) are treated in accordance with Section 1129(a)(9) of the Bankruptcy
Code. All other classes are unimpaired.
3.02 Impairment Controversies. If a controversy arises as to
-------------------------
whether any Claim or any class of Claims is impaired under this Plan, such class
shall be treated as specified in this Plan unless the
3
Bankruptcy Court shall determine such controversy upon motion of the party
challenging the characterization of a particular Class or Claim under this Plan.
ARTICLE IV
ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF
REJECTION BY ONE OR MORE CLASSES OF CLAIMS
4.01 Classes Entitled to Vote. Each impaired Class of Claims shall be
-------------------------
entitled to vote separately to accept or reject this Plan. Any unimpaired Class
of Claims shall not be entitled to vote to accept or reject this Plan.
4.02 Creditors Not Entitled to Vote. Only Creditors holding Claims
----------------------------------
that are not contested may vote for the Plan unless authorized by the Court to
do so after motion and court order entered prior to the Confirmation hearing
unless Debtor stipulate to allow a Creditor temporary voting privileges.
4.03 Class Acceptance Requirement. A Class of Claims shall have
------------------------------
accepted this Plan if it is accepted by at least two-thirds (2/3) in amount and
more than one-half (1/2) in number of the Allowed Claims of such class that have
voted on this Plan.
4.04 One Vote Per Holder. If a holder of a Claim holds more than one
---------------------
Claim in any one class, all Claims of such holder in such Class shall be
aggregated and deemed to be one Claim for purposes of determining the number of
Claims voting on this Plan.
4.05 Cramdown. Notwithstanding the rejection or deemed rejection of
--------
this Plan by any class of Claims, Debtor shall request that the Bankruptcy Court
confirm this Plan in accordance with Section 1129(b) of the Bankruptcy Code.
ARTICLE V
TREATMENT OF ADMINISTRATIVE EXPENSES
AND CLASSES NOT IMPAIRED UNDER THE PLAN
5.01 Class 1: Administrative Expenses. The allowed amount of unpaid
-----------------------------------
Administrative Expenses owing to Warnicke & Littler shall be paid by issuance to
said firm or its principals of shares amounting to ninety-five percent (95%) of
the common stock in a new affiliate to be formed pursuant to this Plan. The
remaining shares of common stock in said new affiliate shall be issued, pro
rata, to each equity security holder from a pool consisting of five percent (5%)
of the outstanding stock. All shares shall be issued pursuant to Section 1145
of the Bankruptcy Code.
4
5.02 Class 2: Priority Tax Claims. Debtor will pay all Class 2
--------------------------------
claims, if any, in full on or before the Effective Date.
ARTICLE VI
TREATMENT OF CLASSES
IMPAIRED UNDER THE PLAN
6.01. Class 3: Priority Wage Claims. The entire amount of wage claims
------------------------------
of Dean Drummond shall be satisfied by the distribution to him of ninety-five
percent (95%) of the common stock of MW Europe, an affiliate the Debtor shall
form as a Nevada corporation pursuant to this Plan. The entire amount of wage
claims of Grace Sim shall be satisfied by the distribution to her of ninety-five
percent (95%) of the common stock of NW Asia, an affiliate the Debtor shall form
as a Nevada corporation pursuant to this Plan. The entire amount of wage claims
of Tyler Brown shall be satisfied by the distribution to him of ninety-five
percent (95%) of the common stock of NW South America, an affiliate the Debtor
shall form as a Nevada corporation pursuant to this Plan. All shares shall be
issued pursuant to Sec. 1145 of the Bankruptcy Code.
6.02. Class 4: General Unsecured Claims. Class 4 unsecured claimants
-----------------------------------
shall have the choice of being paid under one of the two following alternatives:
A. Payment, pro rata, from a fund of $10,000.00 to be advanced as an
administrative loan by the secured creditor; or
B. By issuance, pursuant to Sec. 1146, of shares pro rata according to
each allowed claim so electing from a pool of 4,500,000 shares of the
MW Debtor.
Said election shall be made in writing in the ballot to be marked to creditors.
Any creditor not voting shall be deemed to have election option A.
6.03 Class 5: Unsecured Portion of Secured Creditor's Claim. The
------------------------------------------------------------
Class 5 claims shall be paid by issuance of ninety-five percent (95%) of the
shares of the Microwave Debtor, ninety-five percent (95%) of the shares of the
Fitness Club affiliate (MW Fitness) that the Debtor shall form as a Nevada
corporation pursuant to this Plan. All shares therein shall be issued
hereunder pursuant to Sec. 1145 of the Bankruptcy Code. The holder of the Class
5 claim shall also satisfy the $10,000 administrative loan being
5
made for the $10,000 to be distributed to Class 4 claimants.
6.04 Class 6: Secured Claims. The Class 6 secured claim of Jan
--------------------------
Wallace in the amount of $1,189,939.70 shall be allowed as a secured claim in
the amount of $1,139,939.70. The remainder of said claim, $50,000 shall be
deemed a Class 5 claim. The $1,139,939.70 secured claim shall be evidenced by a
new promissory note from the Debtor payable on or before September 30, 2002.
Said note shall bear interest from January 15, 2002 until paid. Said promissory
note shall be secured by the same security interest in all the Debtor's property
now held by Jan Wallace.
6.05 Class 7: Equity Security Holders' Interests. Class 7, Equity
------------------------------------------------
security holders (except Jan Wallace) shall retain their stock interests in the
MW Debtor. Equity security holders shall also be issued stock pursuant to Sec.
1145 in proportion to their ownership of the Debtor from a pool of shares equal
to five percent (5%) of the total shares in the Microwave Debtor. All presently
outstanding shares of the MW Debtor in the Microwave Debtor shall be cancelled.
Equity security holders shall also be issued five percent (5%) of the shares in
MW Fitness, five percent (5%) of the shares in MW Europe, five percent (5%) in
NW Asia and five percent (5%) in NW South America.
ARTICLE VII
IMPLEMENTATION OF THE PLAN
7.01 Procedure To Implement The Plan. On or shortly after the date of
--------------------------------
Plan Confirmation, the Debtor shall determine the amounts of all allowed Class
claims as quickly as can be accomplished given the court calendar and the
objection process. The Debtor shall file a report with the court and shall
inform the transfer agent upon confirmation to proceed to issue all shares in
both joint Debtors as set forth in the Report. The Debtor and MW Fitness, the
Debtor and MW Europe, the Debtor and MW Asia, the Debtor, and NW South America,
the Debtor, shall, following confirmation, execute and deliver such formal
license agreements as are deemed appropriate.
7.02 Appointment Of A Disbursing Agent. The Reorganized MW Debtor
-------------------------------------
shall serve as Disbursing Agent for all distributions to be made to the Classes
under the Joint Plan and shall direct a qualified transfer agent to issue the
shares.
a. Duties of The Disbursing Agent. The Disbursing Agent shall receive,
disburse and account to the Court, the Creditors, Equity Security Holders and
other parties in interest for the shares
6
to be issued, and shall be responsible for reviewing and approving all claims
(all disputes to be resolved by the Court), keeping adequate records of all
transactions, receipts and disbursements, communicating with, and advising all
Creditors, Equity Security Holders and other parties in interest as needed, and
such other duties as may be consistent with the responsibilities of a Disbursing
Agent. The Debtor shall use a transfer agent to assist with distributions of
shares of stock and the keeping of stockholder records. The Disbursing Agent
shall monitor the pending litigation against MCC/Ferro Magnetic Services, Inc.,
collect any net proceeds and distribute the same to creditors entitled to such
proceeds under this Plan.
b. Termination of Disbursing Agents' Duties: The entry of an order
terminating and concluding the case shall discharge the Disbursing Agent.
7.03 Effectuating Documents. On or before the Effective Date, Debtor
-----------------------
shall file with the Bankruptcy Court such agreements, indentures, instruments
and other documents as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of this Plan.
7.04 Property Vests In The Debtor. All Property, assets and rights of
------------------------------
the estate of the Debtor shall vest in the Debtor, free and clear of all liens,
claims and encumbrances of any kind whatsoever unless expressly provided for
under this Plan. Debtor shall be able to manage its affairs, subject only to
the limitations set forth in this Plan, without the requirement of further
orders from the Bankruptcy Court.
7.05 Unclaimed Monies. All distributions of shares under the Plan
-----------------
which are returned by the Post Office undelivered or which cannot be delivered
due to lack of a current address will be retained by the Debtor; after the
expiration of six months from the date of the first attempted distribution,
shares of stock and all future distributions will vest in the reorganized Debtor
as treasury stock (or in the affiliate of its shares) free of any Claim by the
distributee.
7.06 Binding To Debtor And Creditors. Upon the entry of the
-----------------------------------
Confirmation Order, this Plan shall bind the Debtor, any entity acquiring or
being distributed any property under this Plan, any Creditor, whether or not
their Claims and interests are impaired under this Plan and whether or not they
have accepted this Plan.
ARTICLE VIII
CONDITIONS OF CONFIRMATION
8.01 Conditions To Confirmation Of The Plan. It shall be a condition
-------------------------------------------
precedent to the
7
Confirmation of this Plan that the Final Order provide for:
(a) Confirmation of this Plan;
(b) To supplement the injunctive provisions of Sec. 524 of the
Bankruptcy Code, except as provided in this Plan or the Confirmation Order, as
of the Confirmation Date, all persons or entities and governmental units shall
be stayed, restrained and enjoined from taking any of the following actions on
account of any such discharged Claims, debts or liabilities: (i) commencing or
continuing in any manner any action or other proceeding against Debtor, or its
property; (ii) enforcing, attaching (including, without limitation, any
prejudgment attachment), collecting or recovering in any manner any judgment,
award, decree or order against Debtor, or its property; (iii) creating,
perfecting or enforcing in any manner, directly or indirectly, any lien or
encumbrance against Debtor, or any of its property, or any direct or indirect
transferee of any property of, or any direct or indirect successor in interest
to, or any property of such transferee or successor; (iv) setting-off, seeking
reimbursement of, contribution from, subrogation against or otherwise recouping
in any manner directly or indirectly, any amount owed to Debtor, or any direct
or indirect transferee of any property of, or any successor in interest to
Debtor, commencing or continuing any action, in any manner, in any place that
does not comply with or is inconsistent with the provisions of this Plan.
(c) Acceptance or rejection of this Plan was solicited in good
faith and in compliance with the applicable provisions of the Bankruptcy Code,
and no Person conducting or participating in solicitation, including Debtor,
shall be liable, on account of such solicitation or participation, for violation
of any applicable law, rule, or regulation government solicitation of acceptance
or rejection of a plan of reorganization.
ARTICLE IX
GENERAL PROCEDURES FOR OBJECTING TO CLAIMS
AND RESOLVING AND TREATING CONTESTED
AND CONTINGENT CLAIMS
9.01 Claim Objection Deadline. Unless another date is established by the
-------------------------
Bankruptcy Court, all objections to Claims shall be filed with the Clerk of the
Bankruptcy Court and served on the holders of such Claims (unless earlier filed)
by the later of 60 days after the Effective Date or the date that is sixty
8
(60) days after a particular proof of Claim (or a request for payment in the
case of Administrative Claim) has been filed. If an objection has not been filed
to a Claim by the deadlines established herein, the Claim shall be treated as an
Allowed Claim; provided, however, that no objection shall be required if a Claim
was not listed on the Schedules or was listed on the Schedules as disputed,
contingent or unliquidated, or was not evidenced by a timely filed proof of
Claim. No such unlisted, disputed, contingent, unliquidated or unfiled Claim
shall be treated as an Allowed Claim, except pursuant to a Final Order so
providing. The objection deadlines established herein shall not apply to Claims
and causes of action that must be asserted through an adversary proceeding.
9.02 Preservation Of Objections To Claims. Except as otherwise provided
--------------------------------------
in this Plan or in the Confirmation Order or other Final Order, no compromise,
waiver or release of Claims, demands or causes of action, that may be provided
for in this Plan or in any Final Order of the Court shall, in any way, limit or
impair the right of the Debtor to prosecute objections to Claims, and the Debtor
hereby retains all objections to the allowability of a Claim and all defenses
associated with such objections.
9.03 No Monetary Distributions Pending Resolution Of Objections.
----------------------------------------------------------------
Notwithstanding any other provision of this Plan, no monetary distributions
shall be made with respect to a contested Claim (or any contested portion of a
Claim, if such Claim is not severable) by Debtor unless and until all objections
to such contested Claim have been determined by Final Order. No distributions
to Class 3 creditors shall be made until all objections are resolved, but
distributions to all other classes shall not be delayed.
9.04 Interest On Contested Claims And Contingent Claims. No interest shall
--------------------------------------------------
accrue on a contested Claim during the period from the Effective Date until the
date on which the Claim is allowed, if ever, and no interest shall accrue on a
contingent Claim during the period from the Effective Date until the date on
which the Claim becomes fixed and absolute or is otherwise allowed, if ever;
provided that a contested Claim or a contingent Claim that is specifically
entitled to post-confirmation interest by the terms of this Plan, and that is
ultimately allowed, shall accrue post-confirmation interest from the Effective
Date.
9.05 Treatment Of Contingent Claims. Until such time as a contingent
---------------------------------
Claim or a contingent portion of an Allowed Claim becomes fixed and absolute or
is disallowed, such Claim shall be treated as a contested Claim for all purposes
related to the distributions under this Plan; provided, however, that the
9
distribution entitlements shall arise only from the date on which a contingent
Claim becomes fixed and absolute or is otherwise allowed.
9.06 Disallowance Of Post-Petition Additions. The Debtor shall not be
------------------------------------------
required to make specific objection to proofs of Claim that allege a right to
recover post-petition interest, penalties, fees, and other accruals with respect
to pre-petition Claims (except Secured Claims entitled to such accruals pursuant
to Sec. 506(b) of the Bankruptcy Code), and any Claim amounts attributable to
such post-petition interest, penalties, fees and other accruals shall be
disallowed in full upon entry of the Confirmation Order.
9.07 Settlement Of Disputed Claims. The Debtor shall be authorized to
--------------------------------
settle, without Court approval, any disputed Claims with a settlement amount
that does not exceed five thousand dollars ($5,000).
9.08 Preservation Of Debtor's Claims, Demands And Causes Of Action. All
---------------------------------------------------------------
claims, demands and causes of action held by, through or on behalf of the
Debtor, against any other person or entity, are hereby preserved in full, unless
otherwise provided by this Plan; and no provision of this Plan shall impair the
rights of the Debtor with respect to any of such claims, demands and causes of
action to prosecute and defend against any such preserved claims, demands and
causes of action.
ARTICLE X
GENERAL PROVISIONS
10.01 Post-Confirmation Operating Of The Automatic Stay. Any lawsuits
-----------------------------------------------------
pending in any court (other than the Bankruptcy Court) that seek to establish
Debtor's liability on pre-petition Claims and that are stayed pursuant to Sec.
362 of the Bankruptcy Code, shall be dismissed with prejudice as of the
Effective Date unless the Debtor elects to have its liability determined by such
other courts. Any pending motions to lift or vacate the automatic stay shall be
deemed denied as of the Effective Date and the stay shall remain in effect. Any
such pre-petition Claims shall be determined as provided in this Plan.
10.02 Prohibition Against Discriminating Treatment Against The Debtor. No
---------------------------------------------------------------
individual, entity or government may discriminate against the Debtor solely
because of the commencement, continuation or termination of this Chapter 11
proceeding, or because of any provision of this Plan. The Confirmation Order
shall constitute an express injunction against such discriminating treatment.
10
10.03 Compliance With Tax Requirements. In connection with this Plan,
-----------------------------------
Debtor shall comply with all withholding and reporting requirements imposed by
federal, state and local taxing authorities.
10.04 Insurance. The Debtor shall use its best efforts to maintain
---------
insurance on all of its property sufficient to cover the Allowed Claims of all
Creditors.
10.05 Termination Of Adequate Protection Payments. Upon the entry of a
----------------------------------------------
Confirmation Order by the Court, any and all payments to Secured Creditors for
adequate protection shall be terminated.
10.06 No Additional Charges. Except as expressly stated in this Plan, or
----------------------
as allowed by Court order, no interest, penalty, late charge or additional
charges (such as attorneys' fees) shall be allowed on any Claim subsequent to
the Filing Date.
10.07 Deficiency Claims. Unsecured Creditors whose Claims arise out of a
------------------
deficiency resulting from the abandonment of Collateral to a previously Secured
Creditor or resulting from orders granting relief from the provisions of Sec.
362 of the Bankruptcy Code, must file their Claims within thirty (30) days after
Confirmation of this Plan.
10.08 Barring Of Claims. The entry of the Confirmation Order shall
-------------------
permanently bar the filing and asserting of any Claims against the Debtor which
arose or relate to the period of time prior to the Confirmation Date, which were
listed by the Debtor in its Schedules and Statement Of Financial Affairs filed
with the Court or were not evidenced by timely and proper proofs of Claim filed
with the Court.
10.09 Amount Of Claims. All references to Claims and amount of the Claims
----------------
refer to the amount of the Claims as allowed by the Court. The Debtor reserves
the right, both before and within thirty days after the Effective Date, to
object to Claims so as to have the Court determine the amount allowed to be paid
under this Plan.
10.10 Remedies To Cure Defects. After Confirmation, the Debtor may, with
-------------------------
the approval of the Court, and so long as it does not materially and/or
adversely affect the interest of Creditors, remedy any defect or omission, or
reconcile any inconsis-tencies in this Plan, or in the Confirmation of this
Plan, in such a manner as may be necessary to carry out the purposes and the
intent of this Plan.
10.11 Retention Of Jurisdiction. After the Effective Date, the Bankruptcy
-------------------------
Court shall retain and have exclusive jurisdiction over the Chapter 11 cases for
the following purpose:
(a) To determine any and all objections to the allowance of
Claims;
11
(b) To determine any and all applications for allowances of
compensation and reimbursement of expenses and any other fees and expenses
authorized to be paid or reimbursed under the Bankruptcy Code or this Plan;
(c) To determine any applications for the rejection or assumption
of executory contracts or unexpired leases or for the assumption and assignment,
as the case may be, of executory contracts or unexpired leases to which Debtor
is a party or with respect to which Debtor may be liable, and to hear and
determine, and if need be, to liquidate any and all Claims arising therefrom;
(d) To determine any and all applications, adversary proceedings
and contested or litigated matters that may be pending on the Effective Date;
(e) To consider any modifications of this Plan, including creation
of a new affiliate or subsidiary, to remedy any defect or omission or reconcile
any inconsistency in any order of the Bankruptcy Court, including the
Confirmation Order, to the extent authorized by the Bankruptcy Code;
(f) To determine any and all controversies, suits and disputes
that may arise in connection with the interpretation, enforcement or
consummation of this Plan or any person or entity's obligations thereunder;
(g) To determine all controversies, suits and disputes arising as
a result of a demand by any utility for a deposit or other form of security as a
condition to providing post-confirmation utility services to Debtor;
(h) To determine all controversies, suits and disputes of this
Plan as a result of discriminatory treatment of Debtor;
(i) To hear and determine any Claim or cause of action by or
against Debtor, and to consider and act on the compromise and settlement of any
Claim or cause of action by or against Debtor; and
(j) To issue such orders in aid of execution of this Plan, as are
authorized by Sec. 1142 of the Bankruptcy Code.
10.12 Modification Of Plan. Modifications of this Plan may be proposed in
--------------------
writing by Debtor at any time before Confirmation, provided that this Plan, as
modified, meets the requirements of Sec.Sec. 1122 and 1123 of the Bankruptcy
Code, and Debtor shall have complied with Sec. 1125 of the Bankruptcy Code.
12
This Plan may be modified at any time after Confirmation and before its
substantial consummation, provided that this Plan, as modified, meets the
requirements of Sec.Sec. 1122 and 1123 of the Bankruptcy Code and provided that
the Bankruptcy Court, after such notice and hearing, if any, deemed necessary by
the Bankruptcy Court, confirms this Plan, as modified, under Sec. 1129 of the
Bankruptcy Code. A holder of a Claim that has accepted or rejected this Plan
shall be deemed to have accepted or rejected, as the case may be, such Plan as
modified, unless within the time, if any, fixed by the Bankruptcy Court, such
holder changes its previous acceptance or rejection.
10.13 Severability. Wherever possible, each provision of this Plan shall
------------
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Plan shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Plan. Furthermore, if the Bankruptcy Court
will not confirm this Plan because one or more provisions hereof are determined
to be prohibited or invalid under applicable law, Debtor may seek permission of
the Bankruptcy Court to amend this Plan by deleting the offending provision.
10.14 Revocation Of Plan. Debtor reserves the right to revoke and/or
--------------------
withdraw this Plan prior to entry of the Confirmation Order. If Debtor revokes
and/or withdraws this Plan, or if Confirmation of this Plan does not occur, then
this Plan shall be deemed null and void and nothing contained herein shall be
deemed to constitute a waiver or release of any Claims by or against Debtor or
any other person or entity or to prejudice in any manner the rights of Debtor or
any person or entity in any further proceeding involving Debtor.
ARTICLE XI
DISCHARGE OF DEBTOR
11.01 Discharge Of The Debtor. Except as otherwise provided in this
--------------------------
Plan or in the Confirmation Order, the rights afforded under this Plan and the
treatment of Claims under this Plan shall be in exchange for and in complete
satisfaction, discharge and release of all Claims including any interest or
Claims from the petition date. Confirmation of this Plan shall discharge the
Debtor from all Claims or other debts, liabilities or obligations of any kind or
nature, that arose, in whole or part, before the
13
Effective Date, and all debts of the kind specified in Sec.Sec. 502(g), 502(h)
or 502(i) of the Bankruptcy Code, whether or not a proof of Claim based on such
debt is timely filed or deemed filed pursuant to Sec. 501 of the Bankruptcy
Code, a Claim based on such debt is allowed pursuant to Sec. 502 of the
Bankruptcy Code, or the holder of a Claim based on such debt has accepted this
Plan.
11.02 Effect Of Discharge On Other Entities. Pursuant to Sec. 524(e)
---------------------------------------
of the Bankruptcy Code, except as otherwise provided in this Plan, the discharge
of a debt of the Debtor, pursuant to this Plan, shall not affect the liability
of any other entity on, or the Property of any other entity for, such debt.
Provided, however, the affiliate created by the Debtor pursuant to this Plan
shall not be liable for the debts or obligations of the Debtor.
11.03 Modification Of Plan Due To Default. If any Creditor holding an
------------------------------------
Allowed Claim seeks such an Order, the Debtor may seek modification of the Plan
prior to entry of the Order based upon good cause and reasonableness of the
modification.
ARTICLE XII
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
12.01 Description of Executory Contracts. The Debtor has no executory
-------------------------------------
contracts except a lease. This lease is rejected and any claim shall be a Class
4 general unsecured claim.
12.02 Rejected If Not Assumed. Notwithstanding the Debtor's belief
--------------------------
that it has no executory contracts, all contracts and leases of Debtor that
constitute executory contracts or unexpired leases as of the date of filing the
Chapter 11 petition for relief shall be rejected as of the Effective Date.
12.03 Expired Contracts Or Leases. Any contract or lease that expired
----------------------------
pursuant to its terms prior to the Effective Date, and that has not been assumed
or rejected by Final Order prior to the Effective Date, is hereby specifically
rejected.
12.04 Bar To Rejection Damages. If the rejection or an executory
---------------------------
contract or unexpired lease results in damages to the other party or parties to
such contract or lease, a Claim for such damages, if not heretofore evidenced by
a filed proof of Claim, shall be forever barred and shall not be enforceable
unless
14
a proof of Claim is filed with the Bankruptcy Court and served upon the Debtor
as follows: (a) if the Claim arises from the rejection of an executory contract
or unexpired lease by operation of any provision of this Plan, thirty (30) days
after the date of service of notice of the Effective Date; (b) if the Claim
arises from the rejection of an executory contract or unexpired lease pursuant
to a Final Order of the Bankruptcy Court (other than the Confirmation Order)
authorizing rejection of such contract or lease, thirty (30) days after service
of notice of the entry of such Final Order; or (c) if the Claim arises from the
rejection of an executory contract or unexpired lease that is rejected after
withdrawal of the assumption thereof, thirty (30) days after service of notice
of the assumption withdrawal. The foregoing applies only to Claims arising from
the rejection of an executory contract or unexpired lease; any other Claims held
by a party to a rejected contract or lease shall have been evidenced by a proof
of Claim filed by earlier applicable bar dates or shall be barred and
unenforceable.
12.05 Treatment of Claims Arising From Assumption Or Rejection. All
-----------------------------------------------------------
Allowed Claims arising from the assumption of an executory contract or unexpired
lease shall be treated as a General Unsecured Claim (Class 4) unless otherwise
ordered by Final Order of the Bankruptcy Court.
DATED this 29th day of May, 2002.
WARNICKE & LITTLER, P.L.C.
By: /s/Ronald E. Warnicke
------------------------------------
Ronald E. Warnicke
Thomas E. Littler
1411 North Third Avenue
Phoenix, AZ 85004
COPY of the foregoing mailed/hand
delivered*/telefaxed** this 29th day
of May, 2002, to:
The Honorable Redfield T. Baum
United States Bankruptcy Judge
2929 N. Central Ave.
Phoenix, Arizona 85012
Office of the United States Trustee
2929 N. Central Ave.
Phoenix, Arizona 85012
15
Cane & Company, LLC
Attn: Michael Cane
2300 W. Sahara Ave., #100
Las Vegas, NV 89102
Fritz, Manspeaker & Associates, LLC
Attn: Tom Fritz
6380 N. Camino Arturo
Tucson, AZ 85718
Robert Spertell
8843 Newcastle Avenue
Northridge, CA 91325
By /s/ Joanne Bjorklund
----------------------
APPENDIX A
DEFINITIONS
Defined Terms. For purposes of this Plan, the capitalized terms used in
--------------
this Plan shall have the meanings as set forth below:
1.01 Administrative Claims/Expenses. Claims and expenses which
-------------------------------
are allowed pursuant to Sec. 503(b) of the Bankruptcy Code and which are
entitled to priority pursuant to Sec. 507(a)(1) of the Bankruptcy Code.
1.02 Allowed Claim. A Claim (a) with respect to which a Proof of
--------------
Claim has been filed with the Court within the applicable period of limitation
fixed by the Federal Rules Of Bankrupt-cy Procedure, Rule 3003, or (b) scheduled
in the list of Creditors prepared and filed with the Court pursuant to Federal
Rules Of Bankruptcy Procedure, Rule 1007(b) and not listed as disputed,
contingent or unliquidated as to amount, and in either case, as to which no
objection to the allowance thereof has been filed within any applicable period
of limita-tion fixed by Federal Rules Of Bankruptcy Procedure, Rule 3007, the
Plan, an order of the Court, or as to which any such objection has been
determined by an order or judgment which is no longer subject to appeal and as
to which no appeal is pending. An Allowed Claim shall not include unmatured or
post-petition interest unless otherwise provided hereafter in the Plan.
1.03 Allowed Secured Claim. This term refers to and means a Claim
---------------------
that is both an Allowed Claim and a Secured Claim.
1.04 Allowed Unsecured Claim. This term refers to and means a
-------------------------
Claim that is both an Allowed Claim and an Unsecured Claim.
1.05 Ballot. This term refers to and means the ballot for
------
accepting or rejecting the Plan which will be distributed to holders of Claims
in Classes that are impaired under this Plan and are entitled to vote on this
Plan.
1.06 Bankruptcy Code. The Bankruptcy Code is the Bankrupt-cy
----------------
Reform Act Of 1978, sometimes referred to as the Bankruptcy Code Of 1978, as
contained in Title 11 U.S.C.A. Sec. 101, et seq., and all amendments thereto.
1.07 Bankruptcy Court or Court. This term refers to and means the
-------------------------
United States Bankruptcy Court for the District of Arizona, Phoenix Division, or
any other court that exercises jurisdiction over all or part of the Bankruptcy
Cases, including the United States District Court for the District of Arizona to
the extent that the reference of all or part of the Bankruptcy Cases is
withdrawn.
1.08 Bankruptcy Rules. This term refers to and means the Federal
-----------------
Rules of Bankruptcy Procedure promulgated under 28 U.S.C. Sec. 2075 and the
local rules of Court, as applicable during the term of the Bankruptcy Cases.
1.09 Bankruptcy Cases. This term refers to and means the
-----------------
above-captioned Chapter 11 cases filed by Care Concepts, Inc
1.10 Bar Date. The last day the Court will allow a Proof of Claim
--------
to be filed in this bankruptcy proceeding. The Bar Date is usually the date set
for the hearing on approval of the Disclosure Statement and notice of the Bar
Date will accompany the notice setting the hearing on approval of the Disclosure
Statement, unless another deadline has been set by the Court.
1.11 Business Day. This term refers to and means every day except
------------
Saturdays, Sundays, and holidays observed by the Bankruptcy Court.
1.12 Cash Collateral Cash, negotiable instruments, documents of
----------------
title, securities, deposit accounts, or other cash equivalents whenever acquired
in which the estate and an entity other than the estate have an interest and
includes the proceeds, products, offspring, rents, or profits of property
subject to a security interest as provided in Sec. 552(b) of the Bankruptcy
Code, whether existing before or after the commencement of a case under Title 11
of the Bankruptcy Code.
1.13 Chapter 11. Chapter 11 of the Bankruptcy Code. Reference to
----------
section numbers are
2
references to sections in the Bankruptcy Code 11 U.S.C. Sec. 101, et seq.,
Public Law 95-598, effective October 1, 1979, as amended, unless otherwise
speci-fied.
1.14 Claim. A right to (1) payment from the Debtor, whether or
-----
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (2) an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
1.15 Class. One or more creditors grouped together as defined
-----
herein. The Plan is intended to deal with all Claims against the Debtor of
whatever character, whether or not contingent or liquidated, and whether or not
allowed by the Court pursuant to Sec. 502(a) of the Bankruptcy Code. However,
only those Claims allowed pursuant to Sec. 502(a) of the Bankruptcy Code will
receive payment under the Plan.
1.16 Collateral. Property which is pledged as security for the
----------
satisfaction of a debt. Collateral is additional security for performance of
principal obligation, or that which is by the side, and not in direct line.
Property subject to a security interest, including accounts, contract rights and
chattel paper which have been sold.
1.17 Collateral Value. Collateral Value is the fair market value
-----------------
of the any collateral as determined by the Court.
1.18 Confirmation. The formal approval of the Bankruptcy Court of
------------
a Plan Of Reorganization.
1.19 Confirmation Date. The date upon which the Confirmation
------------------
Order is entered by the Court.
1.20 Confirmation Hearing. This term refers to and means the
---------------------
hearing regarding confirmation of the Plan conducted by the Bankruptcy Court
pursuant to Bankruptcy Code Sec. 1128,
3
including any adjournment or continuation of that hearing from time to time.
1.21 Confirmation Order. The Final Order of the Court determining
------------------
that the Plan meets the requirements of Chapter 11 of the Bankruptcy Code and is
entitled to Confirmation.
1.22 Creditor. A Creditor or all Creditors of the Debtor holding
--------
Allowed Claims for the debts, liabilities, demands or Claims of any character
whatsoever, as defined in Sec. 101(4) of the Bankruptcy Code.
1.23 Debtor. The Debtor is Care Concepts, Inc., which is a
------
Delaware corporation.
1.24 Disclosure Statement. The Disclosure Statement In Support Of
--------------------
Care Concept, Inc.'s Joint Plan in its present form, or as it may be amended or
supplemented.
1.25 Disputed Claim. This term refers to and means every Claim:
---------------
(a) that is scheduled by the Debtors as disputed, contingent, or unliquidated;
and/or (b) that is not an Allowed Claim.
1.26 Effective Date. The date following the Confir-ma-tion Date
---------------
after which no appeal of the Confirmation Order can be taken or sixty (60) days
from the Confir-mation Date, whichever is later.
1.27 Estate. This term refers to and means the bankruptcy estate
------
of the Debtor created under Bankruptcy Code Sec. 541.
1.28 Executory Contract. This term refers to and means every
-------------------
unexpired lease and other contract which is subject to being assumed or rejected
under Bankruptcy Code Sec. 365.
1.29 Final Order. A Final Order is an order of the Court which,
------------
not having been reversed, modified or amended and not being stayed and the time
to appeal from which or to seek review or rehearing of which having expired, and
no such appeal, review, certiorari or rehearing is pending, has become
conclusive of all matters adjudicated thereby and in full force and effect.
1.30 Impaired/Impaired Class Under Sec. 1124 of the Bankruptcy
------------------------
Code, a Class Of Claims is impaired under a Plan unless, with respect to each
Claim of such Class: (i) it is paid in full on the Effective Date of the Plan;
(ii) the Plan leaves unaltered the legal, equitable and contractual rights to
4
which such Claim entitles the holder to such Claim; or (iii) all defaults are
cured, the original maturity of the Claim is reinstated and the Claim is
otherwise treated as provided in clause (ii) above.
1.31 Interests. This term refers to and means the rights of the
---------
members of the Debtor.
1.32 Interpretation. The headings in this Plan are for
--------------
convenience and reference only and shall not limit or otherwise affect the
provisions hereof. Words denoting the singular number shall include the plural
number and vice versa, and words denoting one gender shall include the other
gender.
1.33 IRS. This term refers to and means the Internal Revenue
---
Service.
1.34 Personal Property. This term refers to and means all
------------------
personal property owned by Debtor.
1.35 Plan. This term refers to and means this Joint Plan of
----
Reorganization Proposed By Warnicke and Littler and The Debtor and every
modification thereof, if any, filed by the Debtor.
1.36 Plan Confirmation. Entry by the Court of an order confirming
-----------------
the Plan at or after a hearing held pursuant to Sec. 1128 of the Bankruptcy
Code.
1.37 Preserved Lien(s). Any liens required under Sec. 1124(2) of
------------------
the Bankruptcy Code.
1.38 Priority Claim(s). Any Claim or Claims entitled to priority
------------------
pursuant to Sec. 507(a) of the Bankruptcy Code other than a Tax Claim or a Claim
for Administrative Expenses.
1.39 Professional Charges. This term refers to and means all
---------------------
professional fees and costs by professional persons approved by the Bankruptcy
Court to serve the Debtors or the Committee which have accrued during the
pendency of the Debtors' Bankruptcy Cases up to and including the Confirmation
Date.
1.40 Property: All real and personal Property (individually or as
--------
a whole) of the estate of the Debtor as previously or hereafter determined by
Final Order of a court of competent jurisdiction and/or as defined in Sec. 541
of the Bankruptcy Code, including, but not limited to, any and all Claims or
causes of action in favor of the Debtor against third parties (except as
otherwise provided herein).
5
1.41 Property Broker. This term refers to and means the
----------------
independent person engaged to market and sell the property or any portion
thereof.
1.42 Proponent. This term refers to and means Warnicke and
---------
Littler and Care Concepts, Inc. who are proposing this Plan of Reorganization.
1.43 Pro Rata. This term refers to and means proportionally, so
---------
that the ratio of the consideration distributed on account of an Allowed Claim
in the Class (or sub-class) and consideration distributed on account of all
Allowed Claims in the Class (or sub-class) is the same as the ratio of the
Allowed Claims in the Class (or sub-class).
1.44 Real Property Real Property owned by the Debtor.
--------------
1.45 Reorganized Debtor. The Debtor, after Confir-mation of the
-------------------
Plan, and its successors and assigns.
1.46 Secured Claim(s). Any Claims, other than a Tax Claim,
-----------------
secured by Property of the Debtor under a duly perfected security interest, to
the extent of the value of the Collateral (security), as determined in
accordance with Sec. 506 of the Bankruptcy Code.
1.47 Secured Creditor(s). All Creditors other than taxing
--------------------
entities, who hold a lien, security interest or other encumbrance which has been
properly perfected as required by law with respect to Property owned by the
Debtor.
1.48 Tax Claim(s). Any Claim for taxes entitled to priority
-------------
pursuant to Sec. 507(a)(7) of the Bankruptcy Code.
1.49 Term Of The Plan. That period after the Effec-tive Date
-------------------
during which distributions are being made to Creditors.
1.50 Unsecured Claim(s): All Claims not secured by
-------------------
collateral of the estate.
1.51 Unsecured Creditor(s). All Creditors of Debtor holding
----------------------
Unsecured Claims of any character what-soever, except Claims entitled to
priority pursuant to Sec. 507 of the Bankruptcy Code.
6
1.52 Undefined Terms. Terms and phrases, whether capitalized or
----------------
not, that are used and not defined herein, but are defined by the Bankruptcy
Code, have the meanings ascribed to them in the Bankruptcy Code.