Exhibit 2.1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
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: Chapter 11
In re :
:
RELIANCE FINANCIAL SERVICES CORPORATION, : Case No. 01-13403 (AJG)
:
:
:
Debtor. :
:
- -----------------------------------------------x
FIRST AMENDED PLAN OF REORGANIZATION OF RELIANCE FINANCIAL SERVICES
CORPORATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
ORRICK, HERRINGTON & SUTCLIFFE LLP
Arnold Gulkowitz (AG-5683)
Thomas L. Kent (TK-2935)
Brian E. Goldberg (BG-8052)
666 Fifth Avenue
New York, New York 10103
Telephone: (212) 506-5000
Attorneys for the Official Unsecured Creditors'
Committee
Dated: New York, New York
December 7, 2004
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND CONSTRUCTION OF TERMS...................................................................1
1.1 847 Termination Date........................................................................1
1.2 Administrative Expense Claim................................................................2
1.3 Allowed.....................................................................................2
1.4 Amended and Restated Articles of Incorporation..............................................2
1.5 Amended and Restated By-laws................................................................2
1.6 Available Cash..............................................................................2
1.7 Avoidance Claims............................................................................2
1.8 Ballot......................................................................................2
1.9 Bank Claim..................................................................................2
1.10 Bank Committee..............................................................................2
1.11 Bank Credit Agreement.......................................................................3
1.12 Bankruptcy Code.............................................................................3
1.13 Bankruptcy Court............................................................................3
1.14 Bankruptcy Rules............................................................................3
1.15 Banks.......................................................................................3
1.16 Bello Litigation............................................................................3
1.17 Beneficial Holder...........................................................................3
1.18 Beneficial Ownership........................................................................3
1.19 Beneficial Ownership Interest...............................................................3
1.20 Board.......................................................................................3
1.21 Board Member................................................................................3
1.22 Budget Requirement..........................................................................3
1.23 Business Day................................................................................4
1.24 Cash........................................................................................4
1.25 Causes of Action............................................................................4
1.26 CEO.........................................................................................4
1.27 CEO Indemnification Obligation..............................................................4
1.28 Change of Control...........................................................................4
1.29 Chapter 11 Case.............................................................................5
1.30 Claim.......................................................................................5
1.31 Class.......................................................................................5
1.32 Classified Priority Claim...................................................................5
1.33 Collateral..................................................................................5
1.34 Committees..................................................................................5
1.35 Commonwealth Court..........................................................................5
1.36 Confirmation Date...........................................................................5
1.37 Confirmation Hearing........................................................................5
1.38 Confirmation Order..........................................................................5
1.39 Creditors' Committee........................................................................5
1.40 D&O Litigation..............................................................................5
1.41 D&O Litigation Proceeds.....................................................................6
(ii)
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1.42 D&O Unsecured Claim.........................................................................6
1.43 Debtor......................................................................................6
1.44 Debtor in Possession........................................................................6
1.45 Development.................................................................................6
1.46 Development Expenses........................................................................6
1.47 Development Period..........................................................................6
1.48 Development Reserve.........................................................................6
1.49 Disallowed..................................................................................6
1.50 Disbursing Agent............................................................................7
1.51 Disclosure Statement........................................................................7
1.52 Discretionary Reserve.......................................................................7
1.53 Disputed....................................................................................7
1.54 Distribution................................................................................7
1.55 Distribution Address........................................................................7
1.56 Distribution Date...........................................................................7
1.57 Effective Date..............................................................................7
1.58 Employment Agreement........................................................................7
1.59 Entity......................................................................................7
1.60 Equity Interest.............................................................................7
1.61 ERISA.......................................................................................8
1.62 Estate......................................................................................8
1.63 Face Amount.................................................................................8
1.64 Final Order.................................................................................8
1.65 Former Directors............................................................................8
1.66 Former Officers.............................................................................8
1.67 General Unsecured Claim.....................................................................8
1.68 Holder......................................................................................8
1.69 Impaired....................................................................................8
1.70 Indemnification Requirement.................................................................8
1.71 Indemnified Advisors........................................................................9
1.72 Indemnified CEO.............................................................................9
1.73 Intercompany Obligations....................................................................9
1.74 Interim Reporting Date......................................................................9
1.75 Interim Statement...........................................................................9
1.76 Internal Revenue Service....................................................................9
1.77 IRC.........................................................................................9
1.78 Joint Venture...............................................................................9
1.79 JV Trigger Date.............................................................................9
1.80 Leibowitz Action............................................................................9
1.81 Lien........................................................................................9
1.82 Liquidator..................................................................................9
1.83 Liquidator Claim............................................................................9
1.84 Liquidator D&O Litigation Proceeds.........................................................10
1.85 Litigation Claim...........................................................................10
1.86 Litigation Distribution....................................................................10
1.87 Litigation Proceeds........................................................................10
(ii)
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1.88 Litigation Proceeds Cash...................................................................10
1.89 Litigation Proceeds Claimants..............................................................10
1.90 Net 847 Refunds............................................................................10
1.91 New RFSC Common Stock......................................................................10
1.92 Non-Liquidator D&O Litigation Proceeds.....................................................10
1.93 Notice Parties.............................................................................10
1.94 Old RFSC Common Stock......................................................................11
1.95 Operating Funds............................................................................11
1.96 Opt-Out Creditor...........................................................................11
1.97 Opt-Out Election...........................................................................11
1.98 Other Expense Amount.......................................................................11
1.99 Other Litigation Proceeds..................................................................11
1.100 Other Secured Claim........................................................................11
1.101 PA Settlement Agreement....................................................................11
1.102 PBGC Stipulation...........................................................................11
1.103 Person.....................................................................................12
1.104 Petition Date..............................................................................12
1.105 Plan.......................................................................................12
1.106 Plan Appendix..............................................................................12
1.107 Plan Supplement............................................................................12
1.108 Postpetition Operating Expenses............................................................12
1.109 Primary Reserve............................................................................12
1.110 Primary Reserve Requirement................................................................12
1.111 Priority Tax Claim.........................................................................12
1.112 Proof of Claim.............................................................................12
1.113 Pro Rata...................................................................................12
1.114 Professionals..............................................................................13
1.115 Professional Compensation and Reimbursement Claim..........................................13
1.116 Professional Compensation Procedures Order.................................................13
1.117 Quarterly Reporting Date...................................................................13
1.118 Quarterly Statement........................................................................13
1.119 Receipt Date...............................................................................13
1.120 Rehabilitation Date........................................................................13
1.121 Reimbursable Expenses......................................................................13
1.122 Reimbursement Obligations..................................................................13
1.123 Reimbursement Period.......................................................................13
1.124 Reliance D&O Action........................................................................13
1.125 Reorganized Debtor and Reorganized RFSC....................................................14
1.126 Required Reporting Information.............................................................14
1.127 RFSC.......................................................................................14
1.128 RFSC Advisory Committee....................................................................14
1.129 RFSC Available Funds.......................................................................14
1.130 RFSC Litigation Proceeds...................................................................14
1.131 RFSC Tax Group.............................................................................14
1.132 RGH........................................................................................14
1.133 RGH Available Funds........................................................................14
(iii)
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1.134 RGH Chapter 11 Case........................................................................14
1.135 RGH Contributions..........................................................................14
1.136 RGH Effective Date.........................................................................15
1.137 RGH Loans..................................................................................15
1.138 RGH Plan...................................................................................15
1.139 RGH Revolving Loans........................................................................15
1.140 RGH/RFSC Settlement Term Sheet.............................................................15
1.141 RGH/RFSC Settlement Term Sheet Order.......................................................15
1.142 RGH Tax Group..............................................................................15
1.143 RGH Term Loan..............................................................................15
1.144 RIC........................................................................................15
1.145 Scheduled..................................................................................15
1.146 Schedules..................................................................................15
1.147 Section 847 Refunds........................................................................16
1.148 Senior Secured Credit Agreement............................................................16
1.149 Tax Determinations.........................................................................16
1.150 Tax Sharing Agreement......................................................................16
1.151 Transfer...................................................................................16
1.152 Unclaimed Distribution.....................................................................16
1.153 Unimpaired.................................................................................16
ARTICLE II RULES OF INTERPRETATION...............................................................................16
2.1 Rules of Interpretation; Application of Definitions and Rules of Construction..............16
2.2 Accounting Terms...........................................................................17
2.3 References to Monetary Figures.............................................................17
2.4 Computation of Time........................................................................17
2.5 Incorporation of Exhibits..................................................................17
2.6 Inconsistencies with PA Settlement Agreement and RGH/RFSC Settlement Term Sheet............17
2.7 Inconsistencies with PBGC Stipulation......................................................18
ARTICLE III TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS...................................18
3.1 Administrative Expense Claims..............................................................18
3.2 Allowance and Payment of Professional Compensation and Reimbursement Claims................18
3.3 Allowance and Payment of Other Administrative Expense Claims...............................19
3.4 Priority Tax Claims........................................................................19
ARTICLE IV CLASSIFICATION OF OTHER CLAIMS AND EQUITY INTERESTS...................................................19
ARTICLE V TREATMENT OF OTHER CLAIMS AND EQUITY INTERESTS.........................................................20
5.1 Class 1 - Classified Priority Claims.......................................................20
5.2 Class 2 - Bank Claims......................................................................20
5.3 Class 3 - Other Secured Claims.............................................................21
5.4 Class 4a - General Unsecured Claims........................................................21
(iv)
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5.5 Class 4b - Liquidator Claim................................................................21
5.6 Class 4c - D&O Unsecured Claims............................................................22
5.7 Class 5 - Equity Interests.................................................................22
ARTICLE VI ACCEPTANCE OR REJECTION OF THE PLAN...................................................................22
6.1 Impaired Classes of Claims Entitled to Vote................................................22
6.2 Acceptance by an Impaired Class of Creditors...............................................22
6.3 Voting Classes.............................................................................23
6.4 Classes Not Receiving or Retaining Property Deemed to Reject the Plan......................23
6.5 Unimpaired Classes Conclusively Presumed to Accept the Plan................................23
6.6 Confirmation Pursuant to Section 1129(b)...................................................23
ARTICLE VII INTERCOMPANY OBLIGATIONS.............................................................................23
ARTICLE VIII EXECUTORY CONTRACTS AND UNEXPIRED LEASES............................................................24
8.1 Assumption or Rejection of Executory Contracts and Unexpired Leases........................24
ARTICLE IX IMPLEMENTATION OF THE PLAN............................................................................25
9.1 Applicable Law.............................................................................25
9.2 Corporate Existence........................................................................25
9.3 Board of Directors of Reorganized Debtor...................................................25
9.4 Chief Executive Officer of Reorganized Debtor..............................................25
9.5 Reorganized RFSC Advisory Committee........................................................26
9.6 By-laws and Articles of Incorporation......................................................26
9.7 Indemnification............................................................................26
9.8 Postpetition Operating Expenses............................................................26
9.9 RGH/RFSC Settlement Term Sheet Obligations.................................................27
9.10 Priority of PA Settlement Agreement Claims.................................................27
9.11 Net 847 Refunds............................................................................27
9.12 Cancellation of Claims and Equity Interests................................................27
9.13 Issuance of New RFSC Common Stock..........................................................27
9.14 Applicability of Securities; Listing of Securities.........................................28
9.15 Restrictions on Transfer, Issuance, Redemption and Cancellation of New RFSC Common
Stock......................................................................................28
9.16 Litigation Proceeds Cash/Opt-Out Election..................................................28
9.17 Transfer of Rights to RFSC Litigation Proceeds.............................................28
9.18 Bello Litigation...........................................................................29
9.19 Distributions from RIC.....................................................................29
9.20 Development................................................................................29
9.21 Reserves...................................................................................29
9.22 Liquidation of Reserves....................................................................30
9.23 Further Funding of Reorganized RFSC........................................................30
9.24 Binding Effect of PA Settlement Agreement and RGH/RFSC Settlement Term Sheet...............30
9.25 Reporting Requirements.....................................................................30
9.26 Operations Between the Confirmation Date and the Effective Date............................31
9.27 Approval of Agreements.....................................................................31
(v)
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9.28 Waiver of Conflicts........................................................................31
9.29 Books and Records..........................................................................31
ARTICLE X PROVISIONS GOVERNING DISTRIBUTIONS UNDER THE PLAN......................................................32
10.1 Distribution Provisions....................................................................32
10.2 Delivery of Distributions..................................................................32
10.3 Disbursing Agent...........................................................................32
10.4 Distributions of Cash......................................................................33
10.5 De Minimis or Fractional Distributions.....................................................33
10.6 Failure to Negotiate Checks................................................................33
10.7 Unclaimed Distributions....................................................................33
10.8 No Distribution Pending Allowance..........................................................33
10.9 Distributions to Holders of Disputed Claims................................................34
10.10 Setoffs....................................................................................35
ARTICLE XI EFFECT OF CONFIRMATION OF THE PLAN....................................................................36
11.1 Term of Bankruptcy Injunction or Stays.....................................................36
11.2 Issuance of New RFSC Common Stock..........................................................36
11.3 Revesting of Assets........................................................................36
11.4 Discharge..................................................................................36
11.5 Injunction.................................................................................36
11.6 Injunction Against Interference with Plan..................................................37
ARTICLE XII CONFIRMATION AND EFFECTIVENESS OF THE PLAN...........................................................37
12.1 Conditions Precedent to Confirmation.......................................................37
12.2 Conditions Precedent to Effectiveness......................................................38
12.3 Effect of Failure of Conditions to Effectiveness...........................................39
12.4 Waiver of Conditions to Confirmation.......................................................39
ARTICLE XIII RETENTION OF JURISDICTION...........................................................................40
13.1 Exclusive Jurisdiction of the Bankruptcy Court.............................................40
ARTICLE XIV MISCELLANEOUS PROVISIONS.............................................................................41
14.1 Effectuating Documents and Further Transactions............................................41
14.2 Corporate Action...........................................................................41
14.3 Exemption from Transfer Taxes..............................................................42
14.4 Releases...................................................................................42
14.5 Exculpation................................................................................44
14.6 Indemnification of Officers, Directors and Members of the RFSC Advisory Committee..........45
14.7 Reorganized RFSC Retention of Professionals................................................45
14.8 Post-Effective Date Fees and Expenses......................................................45
14.9 Payment of Statutory Fees..................................................................45
14.10 Amendment or Modification of the Plan......................................................46
14.11 Severability...............................................................................46
14.12 Revocation or Withdrawal of the Plan.......................................................46
14.13 Binding Effect.............................................................................47
(vi)
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14.14 Continuation of Bank Committee.............................................................47
14.15 Notices....................................................................................47
14.16 GOVERNING LAW..............................................................................48
14.17 Withholding and Reporting Requirements.....................................................48
14.18 Plan Appendix..............................................................................49
14.19 Plan Supplement............................................................................49
14.20 Allocation of Plan Distributions...........................................................49
14.21 Time of Distributions......................................................................49
14.22 Filing of Additional Documents.............................................................49
14.23 No Waiver or Estoppel......................................................................49
(v)
INTRODUCTION
The Creditors' Committee hereby proposes this plan of
reorganization, under Section 1121(c) of the Bankruptcy Code. The Plan sets
forth a restructuring of Reliance Financial Services Corporation ("RFSC" or the
"Debtor") through the transfer of shares of common stock in Reorganized RFSC for
certain outstanding claims against RFSC. The Plan also provides a vehicle to
assist creditors in allocating the proceeds, if any, of potential litigation
claims. Reference is made to the Disclosure Statement accompanying the Plan for
a discussion of the Debtor's history, business, properties, risk factors, a
summary and analysis of the Plan, and certain related matters, including a
description of the shares of New RFSC Common Stock to be issued under the Plan.
The Creditors' Committee is a proponent of the Plan and is participating in the
Plan within the meaning of the Bankruptcy Code.
All creditors are encouraged to consult the Disclosure
Statement and to read the Plan carefully before voting to accept or reject the
Plan.
UNDER SECTION 1125(b) OF THE BANKRUPTCY CODE, NO SOLICITATION
MATERIALS, OTHER THAN THE DISCLOSURE STATEMENT AND THE RELATED MATERIALS
TRANSMITTED THEREWITH AND APPROVED BY THE BANKRUPTCY COURT, HAVE BEEN AUTHORIZED
BY THE BANKRUPTCY COURT FOR USE IN SOLICITING ACCEPTANCE OR REJECTION OF THE
PLAN.
SUBJECT TO CERTAIN RESTRICTIONS AND REQUIREMENTS SET FORTH IN
SECTION 1127 OF THE BANKRUPTCY CODE, BANKRUPTCY RULE 3019 AND IN THE PLAN, THE
CREDITORS' COMMITTEE EXPRESSLY RESERVES THE RIGHT TO ALTER, AMEND, MODIFY,
REVOKE OR WITHDRAW THE PLAN, ONE OR MORE TIMES, PRIOR TO ITS SUBSTANTIAL
CONSUMMATION.
Claims against, and Equity Interests in, the Debtor (other
than Administrative Claims and Priority Tax Claims) are classified in Article IV
hereof and treated in Article V hereof.
ARTICLE I
DEFINITIONS AND CONSTRUCTION OF TERMS
Definitions. As used herein, the following terms have the
respective meanings specified below:
1.1 847 Termination Date means, subject to the PA Settlement Agreement,
the date that the management of Reorganized RFSC shall determine, in its
reasonable discretion, (i) that there is no reasonable likelihood that the RFSC
Tax Group shall receive any additional Section 847 Refunds and (ii) that the
Internal Revenue Service is barred by the statute of limitations (including any
extensions thereto) from recovering any Section 847 Refunds previously received
by the RFSC Tax Group; provided that such date shall in no event be later than
October 20, 2020.
1.2 Administrative Expense Claim means a Claim against the Debtor for
payment of an administrative expense of a kind specified in Sections 503(b) and
507(a)(1) of the Bankruptcy Code, including, without limitation, any actual and
necessary costs and expenses, incurred after the Petition Date, of preserving
the Estate, and any actual and necessary costs and expenses of operating the
business of the Debtor, any indebtedness or obligations incurred or assumed by
the Debtor in Possession in connection with the conduct of its business,
including for the acquisition or lease of property or an interest in property or
the rendition of services, all compensation and reimbursement of expenses
allowed by the Bankruptcy Court under Section 330 or 503 of the Bankruptcy Code
and any fees or charges assessed against the Estate under 28 U.S.C. ss. 1930;
provided, however, that such fees or charges shall be an independent statutory
obligation to be paid by the Reorganized Debtor through the entry of a final
closing decree.
1.3 Allowed means, with respect to a Claim or a portion thereof against
the Debtor, a Claim (a) for which a Proof of Claim in a liquidated amount has
been timely filed with the Bankruptcy Court, pursuant to the Bankruptcy Code,
Final Order of the Bankruptcy Court or other applicable law, or which has been
or hereafter is Scheduled by the Debtor in a liquidated amount and neither
disputed nor contingent and which, in either case, is a Claim as to which (i) no
objection to the allowance thereof has been filed within the applicable period
of limitations (if any) fixed by the Plan, the Bankruptcy Code, the Bankruptcy
Rules or the Bankruptcy Court or (ii) any objection to the allowance has been
settled, withdrawn or denied by a Final Order; or (b) that is expressly allowed
(i) in a liquidated amount in the Plan or (ii) by a Final Order.
1.4 Amended and Restated Articles of Incorporation means the amended
and restated Certificate of Incorporation of the Reorganized Debtor
substantially in the form contained in the Plan Supplement.
1.5 Amended and Restated By-laws means the amended and restated By-laws
of the Reorganized Debtor substantially in the form contained in the Plan
Supplement.
1.6 Available Cash means all Cash held by RGH on the Effective Date,
excluding the RGH Available Funds.
1.7 Avoidance Claims means any and all avoidance claims accruing to the
Debtor and Debtor in Possession under Sections 502(d), 544, 545, 547, 548, 549,
550 and 551 of the Bankruptcy Code.
1.8 Ballot means each ballot in the form(s) approved by the Bankruptcy
Court and distributed with the Disclosure Statement to each Holder of Claims in
Classes that are Impaired under the Plan and entitled to vote for acceptance or
rejection of the Plan, and which shall require any Holder of an Allowed General
Unsecured Claim or an Allowed Bank Claim who is an Opt-Out Creditor to so
indicate on its Ballot.
1.9 Bank Claim means any Claim against the Debtor arising from the Bank
Credit Agreement.
1.10 Bank Committee means the Official Unsecured Bank Committee
appointed pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11
Case and the RGH Chapter 11 Case by order of the Bankruptcy Court, dated June
22, 2001, as well as any ex-officio members thereof.
-2-
1.11 Bank Credit Agreement means that certain Credit Agreement, dated
as of November 1, 1993, as amended and restated as of April 25, 1995, and
amended and/or modified through the Petition Date, among, inter alia, the Debtor
and the Banks, and any and all of the documents, instruments and agreements
relating thereto, including all guarantees and security documents, instruments
and agreements executed and delivered in connection therewith, as any of the
foregoing may have been amended, supplemented, modified, extended, replaced,
refinanced, renewed or restated as of the Petition Date.
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,
together with all amendments and modifications thereto, as applicable to the
Chapter 11 Case.
1.13 Bankruptcy Court means the United States Bankruptcy Court for the
Southern District of New York or, if such Court ceases to have jurisdiction over
these proceedings, the court or adjunct thereof that exercises jurisdiction over
the Chapter 11 Case.
1.14 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure
as promulgated by the United States Supreme Court under 28 U.S.C. ss. 2075, the
Official Bankruptcy Forms, as amended, the Federal Rules of Civil Procedure, as
amended, and the Local Rules of the Bankruptcy Court, as amended, as applicable
to the Chapter 11 Case or proceedings therein, as the case may be.
1.15 Banks means, collectively, the agents and lenders that are, or
were, from time to time, parties to the Bank Credit Agreement, and each of the
foregoing parties' successors and assigns.
1.16 Bello Litigation means that certain action captioned George E.
Bello, et al. v. Syndicate 1212 at Lloyd's London, et al., pending in the
Bankruptcy Court (Case No. 01-03572).
1.17 Beneficial Holder means the entity holding the beneficial interest
in a Claim or Equity Interest.
1.18 Beneficial Ownership has the meaning provided in 17 C.F.R. ss.
240.13d-3.
1.19 Beneficial Ownership Interest means an interest which, for U.S.
federal income tax purposes, constitutes an ownership interest.
1.20 Board has the meaning provided in Section 9.3(a).
1.21 Board Member has the meaning provided in Section 9.3(a).
-3-
1.22 Budget Requirement means that amount of funds, as of the most
recent Interim Reporting Date or Quarterly Reporting Date, necessary to fund the
budgeted future expenses of Reorganized RFSC for the subsequent seven (7) years
or such shorter period deemed appropriate by Reorganized RFSC; provided,
however, that the Budget Requirement shall not exceed (i) $5 million at any time
prior to (and including) the fourth (4th) anniversary of the Effective Date
(provided that initial funding of the Primary Reserve in the amount of
$5,074,000 shall be permitted), (ii) $3 million at any time from (but excluding)
the fourth (4th) anniversary of the Effective Date to (and including) the
seventh (7th) anniversary of the Effective Date and (iii) at any time
thereafter, the lesser of (I) $3 million and (II) double the amount of expenses
(excluding any CEO Indemnification Obligations) incurred by Reorganized RFSC
during the prior two (2) years; provided further that the limitation set forth
in the immediately preceding proviso may be waived at any time by the written
consent of (I) holders of sixty-six and two-thirds percent (66 2/3%) of all
claims or obligations on such claims against RGH or its assignees and of (II)
holders of sixty-six and two-thirds percent (66 2/3%) of all outstanding shares
of Reorganized RFSC.
1.23 Business Day means any day other than a Saturday, Sunday or any
other day on which commercial banks in New York, New York are required or
authorized to close by law or executive order.
1.24 Cash means legal tender of the United States of America.
1.25 Causes of Action means any and all actions, causes of action,
accounts, liabilities, obligations, defenses, third-party claims, executions,
cross-claims, counterclaims, choses in action, controversies, agreements,
promises, rights to legal remedies, rights to payment and suits, damages,
judgments, claims and demands whatsoever, whether known or unknown, reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured, existing or hereafter arising,
whether asserted or assertable directly or derivatively in law, equity or
otherwise, based in whole or in part upon any act or omission or other event
occurring prior to the Petition Date or during the course of the Chapter 11
Case, including through the Effective Date; provided, however, Causes of Action
shall not include any causes of action arising from or related to any Litigation
Claim.
1.26 CEO has the meaning set forth in Section 9.4.
1.27 CEO Indemnification Obligation means the actual or anticipated
indemnification obligations of Reorganized RFSC to each Indemnified CEO, to the
fullest extent permitted by Delaware law.
1.28 Change of Control means any transfer, issuance or redemption of
the stock of, or of a Beneficial Ownership interest in, Reorganized RFSC, or of
an interest (including a Beneficial Ownership interest), participation or other
right or obligation in, from, or to any entity which holds, maintains or has any
right in any entity with any interest (including a Beneficial Ownership
interest) in Reorganized RFSC (whether direct or indirect) that could or would
result in the transferee (in the case of a transfer) or any other person (in the
case of a transfer, issuance or redemption) owning, directly or indirectly, or
having a Beneficial Ownership interest in, fifty percent (50%) or more of the
outstanding stock of Reorganized RFSC (by vote or value) or having actual or
constructive control or the right to control or direct the vote of fifty percent
(50%) or more of the outstanding stock of Reorganized RFSC (regardless of the
means used to attain such control).
-4-
1.29 Chapter 11 Case means the case under Chapter 11 of the Bankruptcy
Code commenced by the Debtor in the Bankruptcy Court on the Petition Date (Case
No. 01-13403).
1.30 Claim has the meaning provided in Section 101(5) of the Bankruptcy
Code.
1.31 Class means a category of Holders of Claims or Equity Interests as
set forth in Article IV.
1.32 Classified Priority Claim means any Claim, other than an
Administrative Expense Claim (including a Professional Compensation and
Reimbursement Claim) or Priority Tax Claim, entitled to priority in right of
payment under Section 507(a) or (b) of the Bankruptcy Code.
1.33 Collateral means any property or interest in property of the
Estate subject to a Lien to secure the payment or performance of a Claim, which
Lien is not subject to avoidance or otherwise invalid under the Bankruptcy Code
or applicable state law.
1.34 Committees means the Creditors' Committee together with the Bank
Committee.
1.35 Commonwealth Court means the Commonwealth Court of Pennsylvania.
1.36 Confirmation Date means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the docket.
1.37 Confirmation Hearing means the hearing held before the Bankruptcy
Court to consider confirmation of the Plan and other related matters pursuant to
Sections 1128 and 1129 of the Bankruptcy Code, as such hearing may be adjourned
or continued from time to time.
1.38 Confirmation Order means the order of the Bankruptcy Court
confirming the Plan pursuant to Section 1129 of the Bankruptcy Code.
1.39 Creditors' Committee means the Official Committee of Unsecured
Creditors appointed pursuant to Section 1102(a) of the Bankruptcy Code in the
Chapter 11 Case and the RGH Chapter 11 Case by order of the Bankruptcy Court,
dated June 22, 2001.
1.40 D&O Litigation means any litigation, claims or causes of action
(including, without limitation, the Leibowitz Action and the Reliance D&O
Action), direct or derivative, brought against any present or former director or
officer of the Debtor, RGH or RIC, including the defendants in the Reliance D&O
Action; provided, however, that D&O Litigation shall not include any claims for
receipt of preferential payments, fraudulent transfers or similar causes of
action brought in any forum against one or more of the present or former
directors or officers of the Debtor, RGH or RIC, either in their capacity as
officers and directors of RGH, the Debtor or RIC, or as individuals or
otherwise, unless such proceeds are derived from or received through or under
those insurance policies listed on Exhibit A to the PA Settlement Agreement.
-5-
1.41 D&O Litigation Proceeds means, collectively, the Liquidator D&O
Litigation Proceeds and the Non-Liquidator D&O Litigation Proceeds.
1.42 D&O Unsecured Claim means an unsecured Claim against the Debtor
held at any time by a Former Officer or Former Director.
1.43 Debtor has the meaning set forth in the preamble to the Plan.
1.44 Debtor in Possession means the Debtor in its capacity as debtor in
possession in the Chapter 11 Case, pursuant to Sections 1101, 1107(a) and 1108
of the Bankruptcy Code.
1.45 Development has the meaning ascribed to such term in Section 1.46.
1.46 Development Expenses means all costs and expenses of Reorganized
RFSC relating to the monetization or conversion to Cash of its existing assets
("Development"), excluding any (i) postpetition indemnification expenses not
arising therefrom; (ii) expenses incurred by Reorganized RFSC in respect of the
operation of its business (other than Development) after the Effective Date and
implementation of the Plan; (iii) obligations under the Senior Secured Credit
Agreement; (iv) funding obligations relating to the Primary Reserve, the
Development Reserve and the Discretionary Reserve; and (v) costs and expenses
incurred in connection with obtaining, defending or pursuing the Litigation
Proceeds or Section 847 Refunds; provided, however, that there shall be a
rebuttable presumption that all costs and expenses of Reorganized RFSC are not
Development Expenses.
1.47 Development Period means the period from (but excluding) the
Interim Reporting Date immediately preceding any funding of the Development
Reserve to (and including) the second (2nd) anniversary of such Interim
Reporting Date.
1.48 Development Reserve means that certain account of Reorganized RFSC
which shall be funded by Reorganized RFSC in an amount equal to the aggregate
amount of all Development Expenses that Reorganized RFSC expects to pay in the
immediately subsequent Development Period.
1.49 Disallowed means with respect to any Claim or Equity Interest or
portion thereof, any Claim against or Equity Interest in the Debtor which (i)
has been disallowed, in whole or in part, by a Final Order of the Bankruptcy
Court, (ii) has been withdrawn by agreement of the Debtor and the Holder
thereof, in whole or in part, (iii) has been withdrawn, in whole or in part, by
the Holder thereof, (iv) is listed in the Schedules as zero or as disputed,
contingent or unliquidated and in respect of which a Proof of Claim has not been
timely filed or deemed timely filed pursuant to the Plan, the Bankruptcy Code or
any Final Order of the Bankruptcy Court or other applicable bankruptcy law, (v)
has been reclassified, expunged, subordinated or estimated to the extent that
such reclassification, expungement, subordination or estimation results in a
reduction in the filed amount of any Proof of Claim, or (vi) is evidenced by a
Proof of Claim which been filed, or which has been deemed to be filed under
applicable law or Final Order of the Bankruptcy Court or which is required to be
filed by order of the Bankruptcy Court, but as to which such Proof of Claim was
not timely or properly filed. In each case, a Disallowed Claim is Disallowed
only to the extent of disallowance, withdrawal, reclassification, expungement,
subordination or estimation.
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1.50 Disbursing Agent means Reorganized RFSC, or such other entity
identified at or prior to the confirmation hearing.
1.51 Disclosure Statement means the written disclosure statement that
relates to the Plan, including all exhibits and schedules thereto, as approved
by the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy Code and
Bankruptcy Rule 3017, as such Disclosure Statement may be amended, modified or
supplemented from time to time.
1.52 Discretionary Reserve means that certain account of Reorganized
RFSC which may be funded by Reorganized RFSC in such amount as Reorganized RFSC
shall determine, to provide for funds to (i) satisfy obligations under the RGH
Loans, if any, (ii) reimburse RGH for Reimbursable Expenses, if any, (iii) fund
the Primary Reserve and (iv) reimburse the Indemnified Advisors for any
indemnified expenses incurred in such capacity.
1.53 Disputed means any Claim against which an objection to the
allowance thereof has been interposed, which objection has not been determined
by a Final Order, settled or withdrawn.
1.54 Distribution means any transfer of Cash, New RFSC Common Stock or
other property or instruments from the Disbursing Agent to Holders of Allowed
Claims, and shall include any Litigation Distributions.
1.55 Distribution Address means the address of the Holders of any
Claims as set forth in the Proof of Claim filed by such Person, as such address
may have been updated pursuant to Bankruptcy Rule 2002(g), or if no Proof of
Claim is filed by such Person, the address set forth in Debtor's Schedules or
other books and records as the same may be updated from time to time.
1.56 Distribution Date means any date upon which a Distribution is made
under the Plan.
1.57 Effective Date means the first Business Day on which all of the
conditions to consummation of the Plan as set forth in Section 12.2 have been
satisfied or waived pursuant to Section 12.4.
1.58 Employment Agreement means that certain employment agreement
between the CEO and Reorganized RFSC, a copy of which shall be included in the
Plan Supplement.
1.59 Entity shall have the meaning provided in Section 101(15) of the
Bankruptcy Code.
1.60 Equity Interest means any share of common stock or other
instrument evidencing an ownership interest in the Debtor, whether or not
transferable, and any option, warrant or right, contractual or otherwise, to
acquire any such interest.
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1.61 ERISA means the Employee Retirement Income Security Act of 1974,
as amended.
1.62 Estate means the bankruptcy estate created in the Chapter 11 Case
pursuant to Section 541 of the Bankruptcy Code upon commencement of the Chapter
11 Case.
1.63 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, (b) when used in reference to a contingent or unliquidated Claim, the
amount of the Claim as estimated by the Bankruptcy Court under Section 502(c) of
the Bankruptcy Code and (c) when used in reference to an Allowed Claim, the
Allowed amount of such Claim.
1.64 Final Order means an order, ruling, judgment, or other decree
issued and entered by the Bankruptcy Court or by any state or other federal
court or other court of competent jurisdiction which has not been reversed,
vacated, stayed, modified or amended and as to which (i) the time to appeal or
petition for review, rehearing, certiorari, reargument or retrial has expired
and no appeal or petition for review, rehearing, certiorari, reargument or
retrial is pending or (ii) any appeal or petition for review, rehearing,
certiorari, reargument or retrial has been finally decided and no further appeal
or petition for review, rehearing, certiorari, reargument or retrial can be
taken or granted.
1.65 Former Directors means each director of the Debtor, RGH or RIC who
(i) in the case of the Debtor and RGH, served as a director prior to the
Petition Date and after January 1, 1997, and (ii) in the case of RIC, served as
a director prior to the Rehabilitation Date and after January 1, 1997.
1.66 Former Officers means each officer of the Debtor, RGH or RIC who
(i) in the case of the Debtor and RGH, served as an officer prior to the
Petition Date and after January 1, 1997, and (ii) in the case of RIC, served as
an officer prior to the Rehabilitation Date and after January 1, 1997.
1.67 General Unsecured Claim means any Claim that is not an
Administrative Expense Claim (including a Professional Compensation and
Reimbursement Claim), Priority Tax Claim, Classified Priority Claim, Bank Claim,
Other Secured Claim, Liquidator Claim or D&O Unsecured Claim.
1.68 Holder means the Beneficial Holder of a Claim against, or Equity
Interest in, the Debtor and, when used in conjunction with a Class or type of
Claim or Equity Interest, means a Beneficial Holder of a Claim against, or
Equity Interest in, the Debtor in such Class or of such type.
1.69 Impaired means, when used with reference to a Claim or Equity
Interest, a Claim or Equity Interest that is impaired within the meaning of
Section 1124 of the Bankruptcy Code, and when used with reference to a Class, a
Class comprising Claims or Equity Interests that are so impaired.
1.70 Indemnification Requirement means the amount of any funds to be
reserved for the payment of the CEO Indemnification Obligations; provided,
however, that the Indemnification Requirement shall not exceed (i) $10 million
on or after the commencement of litigation that could give rise to a CEO
Indemnification Obligation and prior to the final disposition of such litigation
and (ii) $1 million at any other time; provided further that the limitation set
forth in the immediately preceding proviso may be waived at any time by the
written consent of (I) holders of sixty-six and two-thirds percent (66 2/3%) of
all claims or obligations on such claims against RGH or its assignees and of
(II) holders of sixty-six and two-thirds percent (66 2/3%) of all outstanding
shares of Reorganized RFSC.
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1.71 Indemnified Advisors means each member of the RFSC Advisory
Committee appointed pursuant to the Plan serving prior to a Change of Control.
1.72 Indemnified CEO means each CEO of Reorganized RFSC serving prior
to a Change of Control, whether in his or her capacity as a director or officer
of Reorganized RFSC.
1.73 Intercompany Obligations means any obligations or claims between
and among the Debtor or its subsidiaries and RGH or its subsidiaries, other than
such obligations or claims arising under or explicitly provided for under the PA
Settlement Agreement, the RGH/RFSC Settlement Term Sheet, the Tax Sharing
Agreement or the Plan.
1.74 Interim Reporting Date means the date that is five (5) Business
Days after a Receipt Date.
1.75 Interim Statement has the meaning specified in Section 9.25(a) of
the Plan .
1.76 Internal Revenue Service means the United States Internal Revenue
Service.
1.77 IRC means the United States Internal Revenue Code of 1986, as
amended.
1.78 Joint Venture means any joint venture of Reorganized RFSC with a
third party for the purpose of exploitation of Development.
1.79 JV Trigger Date means the first day on which the aggregate amount
of all Cash distributions to Reorganized RFSC by Joint Ventures exceeds
$250,000.
1.80 Leibowitz Action means that certain action captioned Glen
Leibowitz and Harvey Greenfield v. Saul Steinberg, et al., pending in the
Supreme Court of the State of New York, Westchester County (Case No. 9869/00).
1.81 Lien has the meaning provided in Section 101(37) of the Bankruptcy
Code.
1.82 Liquidator means M. Diane Koken, and any successor thereto, in her
or his capacity as the statutory liquidator of RIC.
1.83 Liquidator Claim means the claim of the Liquidator against the
Debtor.
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1.84 Liquidator D&O Litigation Proceeds means the gross proceeds of any
D&O Litigation either paid under any of the insurance policies listed on Exhibit
A to the PA Settlement Agreement or received from such directors or officers
named as defendants therein, including any defendants in the Reliance D&O
Action, other than the Non-Liquidator D&O Litigation Proceeds.
1.85 Litigation Claim means (i) any claim or cause of action of the
Debtor or RGH against the Former Directors or Former Officers, (ii) any claim or
cause or action of either Committee, or of any Holder of an Allowed Bank Claim
or an Allowed General Unsecured Claim, against the Former Directors or Former
Officers, (iii) any claim of the Debtor, RGH or either Committee against third
parties, other than any claims released pursuant to Section 14.4, (iv) any claim
of any Holder of an Allowed Bank Claim or an Allowed General Unsecured Claim
arising from or in connection with its claims against RGH or the Debtor and (v)
any claim against any insurer (other than RIC) arising from a claim or cause of
action set forth in clause (i), (ii), (iii) or (iv) of this definition or any
other claim on account of which the Debtor or RGH (whether direct or derivative)
may be entitled to a recovery.
1.86 Litigation Distribution means a distribution of Litigation
Proceeds Cash.
1.87 Litigation Proceeds means, collectively, the D&O Litigation
Proceeds and the Other Litigation Proceeds.
1.88 Litigation Proceeds Cash means all liquidated RFSC Litigation
Proceeds.
1.89 Litigation Proceeds Claimants means Holders of Allowed Claims in
Classes 2 and 4a who are not Opt-Out Creditors.
1.90 Net 847 Refunds means the Section 847 Refunds after deducting (i)
first, any distributions required to be made to RIC under the Tax Sharing
Agreement and (ii) second, any costs and expenses incurred by Reorganized RFSC
(except to the extent limited in accordance with the RGH/RFSC Settlement Term
Sheet) in obtaining such refunds or contesting any claim by the IRS for the
repayment of such refunds (including, but not limited to, those expenses
directly arising from the defense or prosecution of such refunds).
1.91 New RFSC Common Stock means the shares of common stock of
Reorganized RFSC issued and authorized pursuant to Section 9.13 of the Plan.
1.92 Non-Liquidator D&O Litigation Proceeds means forty percent (40%)
of the gross proceeds of any D&O Litigation either paid under any of the
insurance policies listed on Exhibit A to the PA Settlement Agreement or
received from such directors or officers named as defendants therein, including
any defendant in the Reliance D&O Action; provided, however, that if the
Liquidator declines the option to pay all expenses of any D&O Litigation
initiated by the Committees, RGH, RFSC, any liquidating trustee, or any other
RGH or RFSC estate representative, then Non-Liquidator D&O Litigation Proceeds
means fifty percent (50%) of the net proceeds recovered from such action.
1.93 Notice Parties means (a) RGH; (b) the members of the RFSC Advisory
Committee; (c) counsel to the Creditors' Committee; (d) the chairperson or
co-chairpersons of the Creditors' Committee; (e) all holders of equity interests
in Reorganized RFSC; (f) any additional parties designated in the RGH plan of
reorganization and (g) any assignees of any of the foregoing parties.
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1.94 Old RFSC Common Stock means the issued and outstanding common
stock of the Debtor, and any option, warrant or other agreement requiring, or
potentially requiring, the issuance of such common stock that was authorized,
issued or outstanding prior to the Effective Date.
1.95 Operating Funds has the meaning set forth in Section 9.8 of the
Plan.
1.96 Opt-Out Creditor means any Holder of an Allowed Bank Claim (Class
2) or an Allowed General Unsecured Claim (Class 4a) who indicates its decision
on its Ballot to opt out of assigning its Litigation Claims to RGH.
1.97 Opt-Out Election means the election of a Holder of an Allowed Bank
Claim (Class 2) or an Allowed General Unsecured Claim (Class 4a) to be an
Opt-Out Creditor on such Holder's Ballot.
1.98 Other Expense Amount means, with respect to any Reimbursement
Period, (i) if the JV Trigger Date has not occurred by the end of such
Reimbursement Period, zero, or (ii) otherwise, an amount equal to ten percent
(10%) of all expenses of Reorganized RFSC (other than Development Expenses) paid
from (but excluding) the earliest effective date of any agreement governing a
Joint Venture to (and including) the last day of such Reimbursement Period,
minus the aggregate Other Expense Amounts paid with respect to all prior
Reimbursement Periods.
1.99 Other Litigation Proceeds means the proceeds derived from any
litigation relating to causes of action, direct or derivative, against third
parties for any wrongful or illegal actions or for damages suffered by the
Debtor and/or RGH or their creditors, other than any D&O Litigation, net of
legal fees and expenses.
1.100 Other Secured Claim means any Claim, other than a Bank Claim, (i)
to the extent reflected in the Schedules as a "Secured Claim", which is secured
by a Lien on Collateral to the extent of the value of such Collateral, as
determined in accordance with Section 506(a) of the Bankruptcy Code, (ii) to the
extent a Proof of Claim is filed alleging that the Claim is secured, or (iii) in
the event that such Claim is subject to a permissible setoff under Section 553
of the Bankruptcy Code, to the extent of such permissible setoff.
1.101 PA Settlement Agreement means that certain agreement among the
Committees and the Liquidator, dated April 1, 2003, together with the related
side letter, dated April 4, 2003, approved by order of the Bankruptcy Court on
May 28, 2003 and by order of the Commonwealth Court of Pennsylvania on June 19,
2003, copies of which are provided in the Plan Appendix.
1.102 PBGC Stipulation means that certain stipulation and order among
the Committees and the Pension Benefit Guaranty Corporation, dated September 27,
2004, approved by order of the Bankruptcy Court on October 15, 2004.
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1.103 Person means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, limited
liability partnership, trust, estate, unincorporated organization or other
entity, or as otherwise provided in Section 101(41) of the Bankruptcy Code.
1.104 Petition Date means June 12, 2001.
1.105 Plan means the Chapter 11 plan of reorganization, including as
applicable the Plan Appendix, the Plan Supplement and all Exhibits, Supplements,
Appendices and Schedules thereto, either in its present form or as the same may
be altered, amended or modified from time to time in accordance with the
Bankruptcy Code.
1.106 Plan Appendix means the documents specified in Section 14.18 of
the Plan.
1.107 Plan Supplement means the documents specified in Section 14.19 of
the Plan.
1.108 Postpetition Operating Expenses means those expenses (including
any postpetition indemnification expenses) incurred by Reorganized RFSC in
respect of the operation of its business after the Effective Date and
implementation of the Plan, except for Reimbursable Expenses, obligations under
the Senior Secured Credit Agreement, and funding obligations relating to the
Primary Reserve, the Development Reserve and the Discretionary Reserve.
1.109 Primary Reserve means that certain account of Reorganized RFSC,
which shall contain the Operating Funds, that will be established on or prior to
the Effective Date to pay Postpetition Operating Expenses.
1.110 Primary Reserve Requirement means, collectively, the Budget
Requirement and the Indemnification Requirement.
1.111 Priority Tax Claim means any Claim of a governmental unit
entitled to priority pursuant to Sections 502(i) and 507(a)(8) of the Bankruptcy
Code.
1.112 Proof of Claim means a proof of claim filed in the Chapter 11
Case in accordance with the Bankruptcy Code, the Bankruptcy Rules and any Final
Order of the Bankruptcy Court or other applicable law.
1.113 Pro Rata means, at any time, (i) when used with respect to the
Distribution of Litigation Proceeds Cash to the Litigation Proceeds Claimants,
the proportion that the Face Amount of the Allowed Claim in Class 2 or Class 4a,
as applicable, bears to the aggregate Face Amount of all Claims (including
Disputed Claims, but excluding Disallowed Claims and Claims held by Opt-Out
Creditors) in Classes 2 and 4a, and (ii) when used with respect to the
Distribution of any other property, including the New RFSC Common Stock, the
proportion that the Face Amount of an Allowed Claim in a particular class bears
to the aggregate Face Amount of all Claims (including Disputed Claims, but
excluding Disallowed Claims) in that Class.
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1.114 Professionals means those Persons employed in the Chapter 11 Case
pursuant to Sections 327 and 1103 of the Bankruptcy Code or otherwise.
1.115 Professional Compensation and Reimbursement Claim means any
Administrative Expense Claim for the compensation of Professionals and
reimbursement of expenses incurred by such Professionals, the Committees and
members of the Committees pursuant to Sections 330(a) or 503(b)(2), 503(b)(3),
503(b)(4) and 503(b)(5) of the Bankruptcy Code.
1.116 Professional Compensation Procedures Order means the Order
Pursuant to 11 U.S.C. ss.ss. 105(a) and 331 Establishing Procedures for Monthly
Compensation and Reimbursement of Expenses of Professionals, entered by the
Bankruptcy Court on October 3, 2001.
1.117 Quarterly Reporting Date means the fifteenth (15th) day of
January, April, July and October of each year or, if such day is not a Business
Day, on the first Business Day thereafter.
1.118 Quarterly Statement has the meaning set forth in Section 9.25(b).
1.119 Receipt Date means each date after the Effective Date on which
the cumulative amount of funds (i) received by Reorganized RFSC from any source
whatsoever (including, without limitation, Section 847 Refunds, Litigation
Proceeds and Development proceeds, but excluding funds in, or disbursements
from, the Primary Reserve) and (ii) not previously required to be distributed to
Reorganized RFSC exceeds $25,000.
1.120 Rehabilitation Date means May 29, 2001, the date on which all of
the assets of RIC were placed under the control of the Liquidator and the
Commonwealth Court.
1.121 Reimbursable Expenses means, collectively, fifty percent (50%) of
all Development Expenses paid from the Primary Reserve in the applicable
Reimbursement Period and the Other Expense Amount for such Reimbursement Period.
1.122 Reimbursement Obligations shall mean all obligations owed to RGH
(i) pursuant to the Senior Secured Credit Agreement and (ii) in connection with
the Reimbursable Expenses.
1.123 Reimbursement Period means, in the case of a reimbursement of
Reimbursable Expenses (x) upon a Change of Control, 847 Termination Date or
dissolution of Reorganized RFSC, the period beginning on (and including) the
most recent Interim Reporting Date (or, if none, the Effective Date) and ending
on (and including) the date of such Change of Control, 847 Termination Date or
dissolution of Reorganized RFSC, as the case may be, and (y) otherwise, the
period beginning on (and including) the Interim Reporting Date immediately
preceding the most recent Interim Reporting Date (or, if none, the Effective
Date) and ending on (and including) the most recent Interim Reporting Date.
1.124 Reliance D&O Action means that certain action commenced on June
24, 2002, by the Liquidator against certain former officers and directors of RIC
in the Commonwealth Court captioned Koken v. Steinberg, et al., Case No. 421
M.D. 2002 (July 24, 2002).
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1.125 Reorganized Debtor and Reorganized RFSC means RFSC and any
successor entity, on and after the Effective Date.
1.126 Required Reporting Information means the following information
required to be set forth in any Interim Report or Quarterly Report: (a) the
total amount of all Postpetition Operating Expenses (including any actual CEO
Indemnification Obligations) incurred by the Reorganized Debtor, each
Postpetition Operating Expense in excess of $5,000 incurred by the Reorganized
Debtor, the purpose, date and payee of such Postpetition Operating Expenses (or
portion thereof), and a reconciliation of such Postpetition Operating Expenses
against the amount budgeted therefor; (b) the source, type and amount of any
funds received by the Reorganized Debtor and the allocation or distribution
thereof; (c) all adjustments to the Reorganized Debtor's budgets and all
adjustments to the Development Reserve and the Discretionary Reserve; (d) the
current balances in the Reserves as of the Interim Reporting Date or Quarterly
Reporting Date, as applicable; and (e) the last date of the most current
Development Period, if any.
1.127 RFSC has the meaning set forth in the Preamble.
1.128 RFSC Advisory Committee has the meaning set forth in Section
9.5(a).
1.129 RFSC Available Funds means the funds received by Reorganized RFSC
from any source whatsoever (including, without limitation, Section 847 Refunds,
Litigation Proceeds and Development proceeds, but excluding funds in or
disbursements from the Primary Reserve), distributable to Reorganized RFSC
pursuant to the RGH/RFSC Settlement Term Sheet and the PA Settlement Agreement.
1.130 RFSC Litigation Proceeds means the Debtor's and the Reorganized
Debtor's 27.5% undivided interest in (i) all Non-Liquidator D&O Litigation
Proceeds (without regard to whether such funds are received pursuant to the PA
Settlement Agreement) and (ii) all Other Litigation Proceeds.
1.131 RFSC Tax Group means that certain affiliated group of
corporations within the meaning of Section 1504(a) of the IRC, to be formed on
or about the Effective Date, of which RIC will be a member and RFSC will be the
common parent.
1.132 RGH means Reliance Group Holdings, Inc., together with its
successor, designee and/or any liquidating trustee appointed under the RGH Plan.
1.133 RGH Available Funds means any proceeds from RGH's fifty percent
(50%) undivided interest in the Net 847 Refunds, excluding funds in the Primary
Reserve.
1.134 RGH Chapter 11 Case means the case under Chapter 11 of the
Bankruptcy Code commenced by RGH in the Bankruptcy Court on June 12, 2001 (Case
No. 01-13404).
1.135 RGH Contributions means those funds, other than the RGH Loans,
transferred by RGH to Reorganized RFSC to fund the Primary Reserve.
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1.136 RGH Effective Date has the meaning set forth in Section 14.16.
1.137 RGH Loans means, collectively, the RGH Term Loans and the RGH
Revolving Loans.
1.138 RGH Plan means the Chapter 11 plan of reorganization or
liquidation, including any exhibits, supplements, appendices and schedules
thereto, of RGH, either in its present form or as the same may be altered,
amended or modified from time to time in accordance with the Bankruptcy Code.
1.139 RGH Revolving Loans means that certain committed revolving loan
facility set forth in the Senior Secured Credit Agreement in an aggregate
principal amount equal to the lesser of (a) the aggregate principal amount of
all RGH Available Funds distributed to RGH and borrowed by Reorganized RFSC or
(b) $25,000,000.
1.140 RGH/RFSC Settlement Term Sheet means that certain RGH/RFSC
Settlement Term Sheet, between the Bank Committee and the Creditors' Committee,
dated January 29, 2004, (i) settling certain Claims between the Debtor and RGH
and (ii) providing for post-confirmation funding of the Debtor by RGH, including
Appendix A thereto which sets forth the mechanics of funding Reorganized RFSC
and Appendix B thereto which sets forth, inter alia, the material terms and
provisions of the Senior Secured Credit Agreement, a copy of which is included
in the Plan Appendix, as approved by the Bankruptcy Court in the RGH/RFSC
Settlement Term Sheet Order.
1.141 RGH/RFSC Settlement Term Sheet Order means that certain
Bankruptcy Court order, dated February 27, 2004, approving the terms and
provisions of the RGH/RFSC Settlement Term Sheet, a copy of which is included in
the Plan Appendix.
1.142 RGH Tax Group means that certain affiliated group of corporations
within the meaning of Section 1504(a) of the IRC, of which RFSC and RIC are
members and RGH is the common parent. 1.143 RGH Term Loan means that certain
term loan facility in an aggregate principal amount of $2,537,000 that is
provided for under the Senior Secured Credit Agreement.
1.144 RIC means Reliance Insurance Company, a Pennsylvania insurance
company, together with its successors or designees, as applicable.
1.145 Scheduled means the status and amount, if any, of a Claim as set
forth in the Schedules.
1.146 Schedules means the schedules of assets and liabilities, the list
of Holders of Claims and Equity Interests and the statement of financial affairs
filed in the Bankruptcy Court by the Debtor, as such schedules or statements
have been or may be amended or supplemented from time to time in accordance with
Section 521 of the Bankruptcy Code and Bankruptcy Rules 1007 and 1009, and all
amendments and modifications thereto.
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1.147 Section 847 Refunds means those tax refunds that result from any
"special estimated tax payments" made by RIC, through the RGH Tax Group, under
Section 847 of the IRC.
1.148 Senior Secured Credit Agreement means that certain Credit
Agreement, by and between Reorganized RFSC and RGH, establishing the RGH Loans,
and any and all of the documents, instruments and agreements relating thereto,
including all security documents, instruments and agreements executed and
delivered in connection therewith, as any of the foregoing may be amended,
supplemented, modified, extended, replaced, refinanced, renewed or restated from
time to time, in substantially the form provided in the Plan Appendix.
1.149 Tax Determinations means the rulings pursuant to Section 505 of
the Bankruptcy Code set forth in a schedule in the Plan Appendix, as such
rulings may be amended, modified or supplemented from time to time.
1.150 Tax Sharing Agreement means that certain Tax Sharing Agreement
among RGH, Reorganized RFSC, RIC and the Liquidator, in substantially the form
provided in the Plan Supplement.
1.151 Transfer means, when used in reference to the New RFSC Common
Stock, to directly or indirectly sell, assign, donate, pledge, hypothecate,
encumber, grant a security interest in, or in any other manner transfer any of
the New RFSC Common Stock, in whole or in part, or any other right or interest
therein, or any other right, option or Beneficial Ownership Interest with
respect to any of the foregoing, or enter into any transaction which results in
the economic equivalent of a transfer, to any individual, corporation, limited
partnership, general partnership, limited liability company, joint stock
company, joint venture, association, company, trust, or any governmental or
political subdivision or any agency, department or instrumentality thereof.
"Transferred" and "Transferable" shall have the corresponding meanings.
1.152 Unclaimed Distribution means any Distribution which has not been
claimed, including funds for any check (i) mailed to a Distribution Address and
returned as undeliverable without a proper forwarding address, (ii) not mailed
or delivered because no Distribution Address to mail or deliver such
Distribution was available, or (iii) delivered but not cashed or deposited.
1.153 Unimpaired means, with reference to a Claim or Class, a Claim or
Class that is not Impaired.
ARTICLE II
RULES OF INTERPRETATION
2.1 Rules of Interpretation; Application of Definitions and Rules of
Construction. For purposes of the Plan, the provisions of the Plan shall control
over any descriptions thereof contained in the Disclosure Statement. Any
references herein to "Articles," "Sections," "Schedules," "Appendices" and
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"Exhibits," when not qualified by a reference to another document, are
references to the Articles, Sections, Schedules and Exhibits of or to the Plan.
Any reference in the Plan to a contract, instrument, release, indenture or other
agreement or document being in a particular form or on particular terms and
conditions means that such document shall be substantially in such form or
substantially on such terms and conditions. Any references in the Plan to an
existing document, Exhibit, Schedule, Appendix, the Plan Supplement or the Plan
Appendix filed or to be filed means such document, Exhibit, Schedule, Appendix,
the Plan Supplement or the Plan Appendix as it may have been or may be amended,
modified or supplemented. Whenever it appears appropriate from the context, each
term stated in either the singular or the plural shall include the singular and
the plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter genders. The words "herein",
"hereof", "hereto", "hereunder" and other words of similar import refer to the
Plan as a whole and not to the part in which such words appear. The words
"includes" and "including" are not limiting and mean that the things
specifically identified are set forth for purposes of illustration, clarity or
specificity and do not in any respect qualify, characterize or limit the
generality of the class within which such things are included. Captions and
headings to Articles, Sections, Schedules, Appendices and Exhibits are inserted
for convenience of reference only, and are not intended to be a part of the Plan
or to affect the interpretation of the Plan. Except as expressly provided or
unless the context otherwise requires, all capitalized terms not otherwise
defined shall have the respective meanings ascribed to them in Article I of this
Plan, and 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. Without limiting
the preceding sentence, the rules of construction set forth in Section 102 of
the Bankruptcy Code shall apply to the Plan, unless superseded herein.
2.2 Accounting Terms. Any accounting terms used in the Plan that are
not specifically defined in the Plan shall be construed in accordance with
United States Generally Accepted Accounting Principles (GAAP) applied on a
consistent basis.
2.3 References to Monetary Figures. All references in the Plan to
monetary figures shall refer to United States currency, unless otherwise
expressly provided.
2.4 Computation of Time. Unless otherwise expressly provided, in
computing any period of time prescribed or allowed by the Plan, the provisions
of Bankruptcy Rule 9006(a) shall apply.
2.5 Incorporation of Exhibits. All Exhibits and Schedules to the Plan,
as well as the Plan Appendix and the Plan Supplement are part of the Plan and
incorporated herein as fully as if set forth at length herein.
2.6 Inconsistencies with PA Settlement Agreement and RGH/RFSC
Settlement Term Sheet. In the event of any inconsistency between the terms of
that portion of the Plan encompassed in the document entitled "First Amended
Plan of Reorganization of Reliance Financial Services Corporation Under Chapter
11 of the Bankruptcy Code", as such document may be amended, modified, or
supplemented, and the terms of the RGH/RFSC Settlement Term Sheet or the PA
Settlement Agreement, the terms of the RGH/RFSC Settlement Term Sheet or the PA
Settlement Agreement, as applicable, shall govern. In the event of any
inconsistency between the terms of the RGH/RFSC Settlement Term Sheet and the
terms of the PA Settlement Agreement, the terms of the PA Settlement Agreement,
subject to the Tax Sharing Agreement, shall govern.
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2.7 Inconsistencies with PBGC Stipulation. In the event of any
inconsistency between the terms of that portion of the Plan encompassed in the
document entitled "First Amended Plan of Reorganization of Reliance Financial
Services Corporation Under Chapter 11 of the Bankruptcy Code", as such document
may be amended, modified, or supplemented, and the terms of the PBGC
Stipulation, the terms of the PBGC Stipulation, as applicable, shall govern.
ARTICLE III
TREATMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
3.1 Administrative Expense Claims. Except to the extent that any Holder
of an Allowed Administrative Expense Claim (other than a Professional
Compensation and Reimbursement Claim) agrees to less favorable treatment, such
Holder shall receive, in full and complete settlement, satisfaction, release and
discharge of such Allowed Administrative Expense Claim, Cash in an amount equal
to such Allowed Administrative Expense Claim on the Effective Date or as soon
thereafter as is practicable; provided, however, that Allowed Administrative
Expense Claims (other than Professional Compensation and Reimbursement Claims)
representing liabilities incurred in the ordinary course of business by the
Debtor in Possession or liabilities arising under loans or advances to or other
obligations incurred by the Debtor in Possession shall be paid in full and
performed by the Reorganized Debtor in the ordinary course of business in
accordance with the terms and subject to the conditions of any agreements
governing, instruments evidencing or other documents relating to such
transactions. Unless otherwise agreed to by the Holder of an Allowed
Administrative Expense Claim, distributions on account of Allowed Administrative
Expense Claims (other than Professional Compensation and Reimbursement Claims),
if any, will be made from Available Cash.
3.2 Allowance and Payment of Professional Compensation and
Reimbursement Claims. (a) Each Entity seeking an award by the Bankruptcy Court
of compensation for services rendered or reimbursement of expenses incurred
through and including the Effective Date under Sections 327, 328, 330, 331
503(b) and 1103 of the Bankruptcy Code shall (i) file with the Bankruptcy Court
and (ii) serve on counsel for the Debtor, counsel for the Bank Committee,
counsel for the Creditors' Committee, the United States Trustee and as otherwise
required by the Bankruptcy Court, the Bankruptcy Code and the Bankruptcy Rules,
an application for final allowance of compensation and reimbursement of
expenses, no later than seventy-five (75) days after the Effective Date, or such
other date as may be fixed by the Bankruptcy Court. Objections to applications
of Professionals and other Entities for compensation and reimbursement of
expenses must be filed with the Bankruptcy Court no later than ninety (90) days
after the Effective Date, or such other date as may be fixed by the Bankruptcy
Court.
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(b) Each Holder of an Allowed Professional Compensation and
Reimbursement Claim shall receive, in full and complete settlement,
satisfaction, release and discharge of such Allowed Professional Compensation
and Reimbursement Claim, Cash in an amount equal to such Allowed Professional
Compensation and Reimbursement Claim (i) within ten (10) days after the entry of
an order allowing such fees and expenses or as soon thereafter as is
practicable, or (ii) upon such other terms as may be mutually agreed upon
between such Holder of an Allowed Professional Compensation and Reimbursement
Claim and the Reorganized Debtor. Distributions on account of Allowed
Professional Compensation and Reimbursement Claims, if any, will be made from
Available Cash.
3.3 Allowance and Payment of Other Administrative Expense Claims. All
requests for payment of an Administrative Expense Claim (other than as set forth
in Section 3.2 of the Plan) must be filed with the Bankruptcy Court and served
on counsel to the Debtor, counsel to the Bank Committee, counsel to the
Creditors' Committee, the United States Trustee and as otherwise required by the
Bankruptcy Court, the Bankruptcy Code and the Bankruptcy Rules, no later than
forty-five (45) days after the Effective Date. Unless the Debtor, the Bank
Committee or the Creditors' Committee files an objection to an Administrative
Expense Claim within forty-five (45) days after receipt of such request for
payment, such Administrative Expense Claim shall be deemed Allowed in the amount
requested. In the event that the Debtor, the Bank Committee or the Creditors'
Committee timely objects to an Administrative Claim, the Bankruptcy Court shall
determine the Allowed amount of such Administrative Expense Claim. All such
Allowed Administrative Expense Claims shall be treated in accordance with the
terms of Section 3.1 hereof.
3.4 Priority Tax Claims. Except to the extent that any Holder of an
Allowed Priority Tax Claim has been paid by the Debtor prior to the Effective
Date or agrees to less favorable treatment, such Holder shall receive, in full
and complete settlement, satisfaction and discharge of such Allowed Priority Tax
Claim, Cash in an amount equal to such Allowed Priority Tax Claim on the
Effective Date or as soon thereafter as is practicable; provided, however, that
any Priority Tax Claim that is not an Allowed Claim, including any Priority Tax
Claim not due and owing on the Effective Date, will be paid in accordance with
this Section when such Claim becomes an Allowed Claim that is due and owing.
Distributions on account of Allowed Priority Tax Claims, if any, will be made
from Available Cash.
ARTICLE IV
CLASSIFICATION OF OTHER CLAIMS AND EQUITY INTERESTS
Claims (other than Administrative Expense Claims, including
Professional Compensation and Reimbursement Claims, and Priority Tax Claims,
which are excluded from the Classes set forth below in accordance with Section
1123(a)(1) of the Bankruptcy Code) and Equity Interests are classified for all
purposes, including voting, confirmation and distribution, pursuant to the Plan,
as follows:
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Class Status
- ----- ------
Class 1 - Classified Priority Claims Unimpaired
Class 2 - Bank Claims Impaired
Class 3 - Other Secured Claims Unimpaired
Class 4a - General Unsecured Claims Impaired
Class 4b - Liquidator Claim Impaired
Class 4c - D&O Unsecured Claims Impaired
Class 5 - Equity Interests Impaired
ARTICLE V
TREATMENT OF OTHER CLAIMS AND EQUITY INTERESTS
5.1 Class 1 - Classified Priority Claims.
(a) Impairment and Voting. Classified Priority Claims (Class 1) are
Unimpaired by the Plan. Each Holder of an Allowed Classified Priority Claim is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
(b) Distributions. Except to the extent that a Holder of an Allowed
Classified Priority Claim has been paid by the Debtor prior to the Effective
Date or such Holder agrees to less favorable treatment, each Holder of an
Allowed Classified Priority Claim shall receive, in full and complete
settlement, satisfaction, release and discharge of its Allowed Classified
Priority Claim, Cash in an amount equal to the unpaid portion of such Allowed
Classified Priority Claim on the Effective Date or as soon thereafter as is
practicable. Distributions on account of Classified Priority Claims, if any,
will be from Available Cash.
5.2 Class 2 - Bank Claims.
(a) Impairment and Voting. The Bank Claims (Class 2) shall be deemed
Allowed Claims as of the Petition Date in the aggregate of all amounts due and
owing under the Bank Credit Agreement on account of principal and accrued, but
unpaid, interest through the Petition Date. Bank Claims are Impaired by the
Plan. Each Holder of an Allowed Bank Claim is entitled to vote to accept or
reject the Plan and to make the Opt-Out Election on the Ballot.
(b) Distributions. Unless otherwise provided herein, and except to the
extent that a Holder of an Allowed Bank Claim agrees to less favorable
treatment, on the Effective Date, or as soon thereafter as is practicable, each
Holder of an Allowed Bank Claim (i) shall receive, in full and complete
settlement, satisfaction, release and discharge of and in exchange for its
Allowed Bank Claim, (A) its Pro Rata share of New RFSC Common Stock and (B) the
right to a Pro Rata share (provided the Holder of such Claim(s) is not an
Opt-Out Creditor) of the RFSC Litigation Proceeds and (ii) shall be deemed to
have assigned its Litigation Claim(s) to RGH pursuant to the Plan; provided,
however, that any Holder of a Bank Claim who is an Opt-Out Creditor (A) shall
not be deemed to have assigned its Litigation Claim(s) to RGH and (B) shall not
receive any rights to a Pro Rata share of the RFSC Litigation Proceeds. If the
Holders of Allowed Bank Claims vote to reject the Plan as a Class, the
Creditors' Committee shall seek to confirm the Plan pursuant to Section 1129(b)
of the Bankruptcy Code.
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5.3 Class 3 - Other Secured Claims.
(a) Impairment and Voting. Other Secured Claims (Class 3) are
Unimpaired by the Plan. Each Holder of an Allowed Other Secured Claim is
conclusively presumed to have accepted the Plan and is not entitled to vote to
accept or reject the Plan.
(b) Distributions/Reinstatement of Claims. Unless otherwise provided
herein, and except to the extent that a Holder of an Allowed Other Secured Claim
has been paid by the Debtor prior to the Effective Date or such Holder agrees to
less favorable treatment, on the Effective Date, or as soon thereafter as is
practicable, each Holder of an Allowed Other Secured Claim shall, in full and
complete settlement, satisfaction, release and discharge of and in exchange for
its Allowed Other Secured Claim, at the sole option of the Reorganized Debtor,
(i) be reinstated and rendered Unimpaired, (ii) receive Cash in an amount equal
to such Allowed Other Secured Claim, including any interest on such Allowed
Other Secured Claim required to be paid pursuant to Section 506(b) of the
Bankruptcy Code or (iii) receive the Collateral securing its Allowed Other
Secured Claim and any interest on such Allowed Other Secured Claim required to
be paid pursuant to Section 506(b) of the Bankruptcy Code. Distributions on
account of Other Secured Claims, if any, will be from Available Cash.
5.4 Class 4a - General Unsecured Claims.
(a) Impairment and Voting. General Unsecured Claims (Class 4a) are
Impaired by the Plan. Each Holder of an Allowed General Unsecured Claim is
entitled to vote to accept or reject the Plan and to make the Opt-Out Election
on the Ballot.
(b) Distributions. Unless otherwise provided herein, and except to the
extent that a Holder of an Allowed General Unsecured Claim agrees to less
favorable treatment, on the Effective Date, or as soon thereafter as is
practicable, each Holder of an Allowed General Unsecured Claim (i) shall
receive, in full and complete settlement, satisfaction, release and discharge of
and in exchange for its Allowed General Unsecured Claim, a right to a Pro Rata
share (provided the Holder of such Claim(s) is not an Opt-Out Creditor) of the
RFSC Litigation Proceeds and (ii) shall be deemed to have assigned its
Litigation Claim(s) (other than those covered by Section 14.4(c)(v) of the Plan)
to RGH pursuant to the Plan; provided, however, that any Holder of a General
Unsecured Claim who is an Opt-Out Creditor (A) shall not be deemed to have
assigned its Litigation Claim(s) to RGH and (B) shall not receive any rights to
a Pro Rata share of the RFSC Litigation Proceeds. If the Holders of Allowed
General Unsecured Claims vote to reject the Plan as a Class, the Creditors'
Committee shall seek to confirm the Plan pursuant to Section 1129(b) of the
Bankruptcy Code.
5.5 Class 4b - Liquidator Claim.
(a) Impairment and Voting. The Liquidator Claim (Class 4b) shall be
deemed an Allowed Claim as of the Petition Date in the aggregate amount of $288
million. The Liquidator Claim is impaired by the Plan. The Liquidator, as the
Holder of the Allowed Liquidator Claim, is entitled to vote to accept or reject
the Plan.
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(b) Distributions. Unless otherwise provided herein, and except to the
extent that the Holder of the Allowed Liquidator Claim agrees to less favorable
treatment, on the Effective Date, or as soon thereafter as is practicable, the
Holder of the Allowed Liquidator Claim shall be entitled to receive, in full and
complete settlement, satisfaction, release and discharge of and in exchange for
its Allowed Liquidator Claim, the payments provided under the Tax Sharing
Agreement and the PA Settlement Agreement (which include, without limitation,
fifty percent (50%) of the Section 847 Refunds and the Liquidator D&O Litigation
Proceeds pursuant to Section 4 of the PA Settlement Agreement and, to the extent
certain payments are provided for in both the Tax Sharing Agreement and the PA
Settlement Agreement, shall not result in duplicate payments being made).
5.6 Class 4c - D&O Unsecured Claims.
(a) Impairment and Voting. D&O Unsecured Claims (Class 4c) are Impaired
by the Plan. No Holder of a D&O Unsecured Claim shall receive any Distribution
under the Plan or be entitled to vote to accept or reject the Plan, and each
such Holder is, therefore, deemed to have rejected the Plan.
(b) Distributions. No Holder of a D&O Unsecured Claim shall assign, or
shall be deemed to have assigned, its Litigation Claim to RGH or shall receive
or retain any property on account of its D&O Unsecured Claim.
5.7 Class 5 - Equity Interests.
(a) Impairment and Voting. Equity Interests (Class 5) are Impaired by
the Plan. No Holder of an Equity Interest shall receive any Distribution under
the Plan or be entitled to vote to accept or reject the Plan, and each such
Holder is, therefore, deemed to have rejected the Plan.
(b) Distributions. On the Effective Date, the Equity Interests shall be
canceled and extinguished and no Holder thereof shall be entitled to, or shall
receive or retain any property on account of, its Equity Interests.
ARTICLE VI
ACCEPTANCE OR REJECTION OF THE PLAN
6.1 Impaired Classes of Claims Entitled to Vote. Subject to Sections
6.3 and 6.4 of the Plan, Holders of Claims in each Impaired Class of Claims are
entitled to vote as a class to accept or reject the Plan. The Creditors'
Committee or its agents shall tabulate the votes with respect to the Plan.
6.2 Acceptance by an Impaired Class of Creditors. In accordance with
Section 1126(c) of the Bankruptcy Code, and except as provided in Section
1126(e) of the Bankruptcy Code, an Impaired Class shall have accepted the Plan
if the Holders of at least two-thirds in dollar amount and more than one-half in
number of the Allowed Claims of such Class that have timely and properly voted
to accept or reject the Plan have voted to accept the Plan.
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6.3 Voting Classes. Bank Claims (Class 2), General Unsecured Claims
(Class 4a) and the Liquidator Claim (Class 4b) are Impaired by the Plan and are
entitled to vote to accept or reject the Plan. Only the Holders of Allowed
Claims in Classes 2, 4a and 4b against which no objections are pending at the
time the vote on the Plan is solicited shall be entitled to vote to accept or
reject the Plan, unless the Bankruptcy Court so directs.
6.4 Classes Not Receiving or Retaining Property Deemed to Reject the
Plan. D&O Unsecured Claims (Class 4c) and Equity Interests (Class 5) are
Impaired by the Plan and Holders thereof do not receive a Distribution or retain
any property on account of such Claims or Equity Interests under the Plan.
Pursuant to Section 1126(g) of the Bankruptcy Code, such Classes are deemed to
reject the Plan and the votes of such Holders of Claims or Equity Interests in
Classes 4c and 5 will not be solicited.
6.5 Unimpaired Classes Conclusively Presumed to Accept the Plan.
Classified Priority Claims (Class 1) and Other Secured Claims (Class 3) are
Unimpaired by the Plan. Pursuant to Section 1126(f) of the Bankruptcy Code, such
Classes are conclusively presumed to accept the Plan and the votes of the
Holders of Claims in such Classes will not be solicited.
6.6 Confirmation Pursuant to Section 1129(b). The confirmation
requirements of Section 1129 of the Bankruptcy Code must be satisfied with
respect to the Plan. To the extent that any Impaired Class entitled to vote on
the Plan rejects the Plan or is deemed to reject the Plan, and all of the
applicable requirements for confirmation of the Plan are met as set forth in
Section 1129(a)(1) through (13) of the Bankruptcy Code, except subsection (a)(8)
thereof, the Bank Committee shall request that the Bankruptcy Court confirm the
Plan, as it may be modified from time to time, pursuant to Section 1129(b) of
the Bankruptcy Code, notwithstanding the requirements of Section 1129(a)(8)
thereof, on the basis that the Plan is fair and equitable and does not
discriminate unfairly with respect to each Class of Impaired Claims or Equity
Interests that has not accepted the Plan.
ARTICLE VII
INTERCOMPANY OBLIGATIONS
Except as otherwise provided in the PA Settlement Agreement,
the RGH/RFSC Settlement Term Sheet, the Senior Secured Credit Agreement, the Tax
Sharing Agreement or the Plan, on and after the Effective Date, the Reorganized
Debtor and its subsidiaries and RGH and its subsidiaries will be permanently
enjoined from taking any action on account of any and all Intercompany
Obligations.
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ARTICLE VIII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 Assumption or Rejection of Executory Contracts and Unexpired
Leases.
(a) Executory Contracts and Unexpired Leases. Pursuant to Sections
365(a) and 1123(b)(2) of the Bankruptcy Code, all executory contracts and
unexpired leases that exist between the Debtor and any Person or Entity shall be
deemed rejected by the Debtor as of the Effective Date, except for any executory
contract or unexpired lease (i) that has been assumed or rejected pursuant to an
order of the Bankruptcy Court entered prior to the Confirmation Date, (ii) as to
which a motion for approval of the assumption or rejection of such executory
contract or unexpired lease has been filed and served prior to the Confirmation
Date, or (iii) that is set forth in Schedule 8.1 in the Plan Supplement;
provided, however, that the Creditors' Committee reserves the right, on or prior
to the Confirmation Date, to amend Schedule 8.1 to delete any executory contract
or unexpired lease therefrom or add any executory contract or unexpired lease
thereto, in which event such executory contract(s) or unexpired lease(s) shall
be deemed to be, respectively, assumed or rejected by the Debtor. The Creditors'
Committee shall provide notice of any amendment to Schedule 8.1 to the parties
to the executory contracts and unexpired leases affected thereby. The listing of
a document on Schedule 8.1 shall not constitute an admission by the Debtor that
such document is an executory contract or an unexpired lease or that the Debtor
has any liability thereunder.
(b) Approval of Assumption, Assumption and Assignment or Rejection of
Executory Contracts and Unexpired Leases. Entry of the Confirmation Order shall,
subject to and upon the occurrence of the Effective Date, constitute (i) the
approval, pursuant to Sections 365(a) and 1123(b)(2) of the Bankruptcy Code, of
the assumption of the executory contracts and unexpired leases assumed pursuant
to Section 8.1(a) (including those set forth in Schedule 8.1 in the Plan
Supplement), (ii) the approval of the extension of time, pursuant to Section
365(d)(4) of the Bankruptcy Code, within which the Debtor may assume, assume and
assign or reject the unexpired leases specified in Section 8.1(a), if any,
through the date of entry of an order approving the assumption or assumption and
assignment of such unexpired leases and (iii) the approval, pursuant to Sections
365(a) and 1123(b)(2) of the Bankruptcy Code, of the rejection of the executory
contracts and unexpired leases rejected pursuant to Section 8.1(a).
(c) Cure of Defaults. Except as may otherwise be agreed to by the
parties, within thirty (30) days after the Effective Date, the Reorganized
Debtor shall cure any and all undisputed defaults under any executory contract
or unexpired lease assumed by the Debtor pursuant to Section 8.1(a), in
accordance with Section 365(b)(1) of the Bankruptcy Code. In the event of a
dispute regarding (a) the nature or the amount of any cure, (b) the ability of
the Reorganized Debtor or any assignee to provided "adequate assurance of future
performance" (within the meaning of Section 365 of the Bankruptcy Code) under
the contract or lease to be assumed, or (c) any other matter pertaining to
assumption, then the cure payment required to be made pursuant to Section
365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final
Order resolving the dispute and approving the assumption of such agreement. Any
cure payments required to be made by the Debtor shall be made from Available
Cash.
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(d) Bar Date for Filing Proofs of Claim Relating to Executory Contracts
and Unexpired Leases Rejected Pursuant to the Plan. Claims arising from the
rejection of an executory contract or unexpired lease pursuant to Section 8.1(a)
must be asserted by a Proof of Claim filed with the Bankruptcy Court and served
upon the Debtor or Reorganized Debtor no later than forty (40) days after the
Effective Date. In the absence of a timely filed Proof of Claim, any such Claims
shall be forever barred and shall not be enforceable against the Debtor, the
Reorganized Debtor, the Debtor's Estate or its property and the Holder thereof
shall not receive any Distributions under the Plan on account of such rejection
Claim. Unless otherwise ordered by the Bankruptcy Court, all Claims arising from
the rejection of executory contracts and unexpired leases asserted against the
Reorganized Debtor shall be treated, to the extent they are Allowed Claims, as
Allowed General Unsecured Claims.
ARTICLE IX
IMPLEMENTATION OF THE PLAN
9.1 Applicable Law. All of the corporate governance provisions in
Article IX of the Plan shall be subject to all applicable regulatory
requirements and approvals and to applicable state law, including 40 P.S.
991.1401, et seq., in respect of insurance holding companies.
9.2 Corporate Existence. Except as otherwise provided in the Plan, the
Debtor shall continue to exist after the Effective Date as a separate corporate
entity, with all the powers of a corporation under applicable law in the
jurisdiction in which it is formed and pursuant to all operative documents in
effect prior to the Effective Date, except to the extent such documents are
amended by the Plan, without prejudice to any right to terminate such existence
(whether by merger or otherwise) under applicable law after the Effective Date.
9.3 Board of Directors of Reorganized Debtor.
(a) Appointment. On and after the Effective Date, the Board of
Directors (the "Board") of the Reorganized Debtor shall be composed of one
director (the "Board Member"). The initial Board Member shall be appointed by
the Creditors' Committee as set forth in the Plan Supplement.
(b) Role of Board. On the Effective Date, the management, control and
operation of the Reorganized Debtor shall become the general responsibility of
the Board Member. The Board Member shall serve in accordance with the Amended
and Restated Articles of Incorporation and the Amended and Restated By-laws, as
the same may be amended from time to time.
9.4 Chief Executive Officer of Reorganized Debtor. The Bank Committee
shall select a new chief executive officer (the "CEO") of the Reorganized
Debtor, who may be the Board Member, to serve on and after the Effective Date in
accordance with the Employment Agreement, the RGH/RFSC Settlement Term Sheet and
applicable nonbankruptcy law.
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9.5 Reorganized RFSC Advisory Committee.
(a) Appointment. There shall also be appointed an advisory committee
(the "RFSC Advisory Committee") composed of representatives of one (1) or more
shareholders of the Reorganized Debtor, with the initial members of the RFSC
Advisory Committee to be appointed by the Bank Committee.
(b) Role of RFSC Advisory Committee. The Board will consult with the
RFSC Advisory Committee in the exercise of the authority granted to the Board
under the Amended and Restated Articles of Incorporation, the Amended and
Restated By-laws and the Plan; provided, however, that ultimate decision-making
authority shall reside in the Board.
9.6 By-laws and Articles of Incorporation. On the Effective Date, or as
soon thereafter as is practicable, the Reorganized Debtor shall file its Amended
and Restated Articles of Incorporation and Amended and Restated By-laws with the
Secretary of State of the state of Delaware, to the extent required by the law
of such state. The Amended and Restated Articles of Incorporation and the
Amended and Restated By-laws shall contain, inter alia, provisions necessary (a)
to prohibit the issuance of nonvoting equity securities as required by Section
1123(a)(6) of the Bankruptcy Code, subject to further amendment of same as
permitted by applicable law, and (b) to effectuate the provisions of the Plan.
9.7 Indemnification.
(a) Indemnification of Chief Executive Officer. Reorganized RFSC shall
indemnify each Indemnified CEO to the fullest extent permitted by Delaware law.
Reorganized RFSC may reserve funds in the Primary Reserve to satisfy any such
Indemnification Requirements.
(b) Indemnification of RFSC Advisory Committee. Reorganized RFSC shall
indemnify each Indemnified Advisor to the fullest extent permitted by Delaware
law; provided, that Reorganized RFSC shall satisfy such indemnification
obligations only after satisfying (i) its Reimbursement Obligations; (ii) its
obligation to fund fifty percent (50%) of the Primary Reserve Requirement; and
(iii) its obligation to fund the Development Reserve.
9.8 Postpetition Operating Expenses. Postpetition Operating Expenses
shall be paid from the RGH Contributions, RGH Loans and RFSC Available Funds in
the Primary Reserve (collectively, the "Operating Funds").
(a) RGH Contributions. On the Effective Date, RGH shall contribute
funds in the amount of $2,537,000 to the Primary Reserve in satisfaction of
RGH's obligations with respect to the initial Primary Reserve Requirement.
Thereafter, if, on any Distribution Date, the reported Primary Reserve
Requirement exceeds the reported Primary Reserve balance, Reorganized RFSC shall
deposit into the Primary Reserve the RGH Contributions in the amounts necessary
to satisfy RGH's obligations with respect to the Primary Reserve Requirement.
RGH Contributions shall be equal to fifty percent (50%) of the Primary Reserve
Requirement or any portion thereof in excess of the reported Primary Reserve
balance.
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(b) RGH Loans. On the Effective Date, Reorganized RFSC shall borrow
funds from RGH in the aggregate principal amount of $2,537,000 in connection
with the RGH Term Loan, to be deposited into the Primary Reserve in satisfaction
of Reorganized RFSC's obligations with respect to the initial Primary Reserve
Requirement. Thereafter, if, on any Distribution Date, the reported Primary
Reserve Requirement exceeds the reported Primary Reserve balance, and the RFSC
Available Funds are insufficient for Reorganized RFSC to satisfy all or part of
its obligations with respect to the Primary Reserve Requirement, Reorganized
RFSC shall borrow funds from RGH in connection with the RGH Revolving Loans (to
the extent available) in the amount of any shortfall, to be deposited into the
Primary Reserve in satisfaction of Reorganized RFSCs obligations with respect to
the Primary Reserve Requirement.
(c) RFSC Available Funds. Pursuant to the terms of the RGH/RFSC
Settlement Term Sheet, any RFSC Available Funds shall be applied by Reorganized
RFSC in the following order: (i) first, to satisfy its Reimbursement
Obligations, (ii) second, to satisfy its obligation to fund fifty percent (50%)
of the Primary Reserve Requirement; (iii) third, to satisfy its obligation to
fund the Development Reserve; (iv) fourth, to reimburse the Indemnified Advisors
for any indemnification obligations; (v) fifth, to fund the Discretionary
Reserve and (vi) sixth, to pay dividends to Holders of New RFSC Common Stock. It
should be noted, however, that Reorganized RFSC might be obligated to make
payments pursuant to the Tax Sharing Agreement prior to paying dividends to
holders of New RFSC Common Stock.
9.9 RGH/RFSC Settlement Term Sheet Obligations. Pursuant to the terms
of the RGH/RFSC Settlement Term Sheet and the Senior Secured Credit Agreement,
Reorganized RFSC shall satisfy all required obligations under the RGH/RFSC
Settlement Term Sheet prior to making any Cash Distributions to Holders of
Claims treated under Section 5.2 of the Plan, or any assignees thereof.
9.10 Priority of PA Settlement Agreement Claims. Pursuant to the PA
Settlement Agreement, all payments and payment obligations of the Debtor to the
Liquidator or RIC under the PA Settlement Agreement and the Tax Sharing
Agreement shall have first priority administrative status.
9.11 Net 847 Refunds. On and after the Effective Date, each of RGH and
Reorganized RFSC shall have a fifty percent (50%) undivided interest in the Net
847 Refunds, pursuant to the terms of the RGH/RFSC Settlement Term Sheet.
9.12 Cancellation of Claims and Equity Interests. On the Effective
Date, the Old RFSC Common Stock and any options or warrants related thereto or
any other instrument or document evidencing or creating any indebtedness or
obligation of the Debtor (other than Intercompany Obligations) shall be deemed
cancelled without further act or action by any Person; and any documents
evidencing such cancellation shall be executed and delivered as provided for in
the Plan, the Plan Appendix or the Plan Supplement.
9.13 Issuance of New RFSC Common Stock. The issuance of the New RFSC
Common Stock shall be authorized under Section 1145 of the Bankruptcy Code as of
the Effective Date without further act or action by any Person, unless required
by the Amended and Restated Articles of Incorporation, the Amended and Restated
By-laws or applicable law, regulation, order or rule, and any documents
evidencing such issuance shall be executed and delivered as provided for in the
Plan, the Plan Appendix or the Plan Supplement.
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9.14 Applicability of Securities; Listing of Securities. Under Section
1145 of the Bankruptcy Code, the issuance of the New RFSC Common Stock under the
Plan shall be exempt from registration under the Securities Act of 1933 and
applicable state and local laws requiring registration of securities. The New
RFSC Common Stock will not be listed on any securities exchange or any quotation
system.
9.15 Restrictions on Transfer, Issuance, Redemption and Cancellation of
New RFSC Common Stock. Holders of Bank Claims who receive shares of New RFSC
Common Stock pursuant to the Plan shall (i) until the first (1st) anniversary of
the Effective Date, be restricted from Transferring such shares under any
circumstances and (ii) thereafter, be restricted from Transferring such shares
without first complying with the provisions of the Amended and Restated By-laws
and Amended and Restated Articles of Incorporation. Any Transfer of the shares
of New RFSC Common Stock shall be void ab initio (i) if made prior to the first
(1st) anniversary of the Effective Date or (ii) if made after the first (1st)
anniversary of the Effective Date unless made in strict compliance with the
procedures set forth in the Amended and Restated By-laws and Amended and
Restated Articles of Incorporation. Any issuance, redemption or cancellation of
New RFSC Common Stock shall be subject to the restrictions set forth in, and
shall be done in strict compliance with, the Amended and Restated By-laws and
Amended and Restated Articles of Incorporation.
9.16 Litigation Proceeds Cash/Opt-Out Election.
(a) Litigation Proceeds Claimants. On the Effective Date, all
Litigation Claims (including those held by the Debtor and the Estate, but other
than those covered by either subsection (b) below or Section 14.4(c)(v) of the
Plan) shall be deemed assigned to RGH, without further action by any Person, to
be managed by the Creditors' Committee or any liquidating trustee appointed
pursuant to the RGH Plan, as applicable. Upon such assignment, RGH shall obtain
all rights to litigate such Litigation Claims. In the event RGH recovers any
Litigation Proceeds on account of such Litigation Claims or receives any
Litigation Proceeds on account of the D&O Litigation, RGH shall pay or shall
cause to be paid to Reorganized RFSC the RFSC Litigation Proceeds. Reorganized
RFSC shall hold any RFSC Litigation Proceeds in trust for the benefit of the
Litigation Proceeds Claimants entitled to Litigation Distributions and, except
as otherwise provided in the Plan, such RFSC Litigation Proceeds shall not
constitute property of Reorganized RFSC.
(b) Opt-Out Creditors. Litigation Claims held by Opt-Out Creditors
shall not be deemed assigned and Holders of Claims in Classes 2 and 4a who are
Opt-Out Creditors shall not receive Litigation Proceeds Cash and their Claims
shall not be counted for purposes of determining the amounts of the Litigation
Distributions to Holders of Claims in such Classes.
9.17 Transfer of Rights to RFSC Litigation Proceeds. After the
Effective Date, any Litigation Proceeds Claimant may transfer its right to
receive Litigation Proceeds by providing written notice of such transfer to
Reorganized RFSC. The right of any Litigation Proceeds Claimant to receive
Litigation Proceeds may be transferred solely in its entirety, as a single
right, and may not be divided or partitioned in any way; provided, that any such
right to receive Litigation Proceeds transferred by a Litigation Proceeds
Claimant that is a Holder of Claims under Section 5.2 of the Plan, shall be
transferred subject to Section 9.9 of the Plan.
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9.18 Bello Litigation. The Bankruptcy Court shall continue to retain
jurisdiction over the Bello Litigation.
9.19 Distributions from RIC. As of the Effective Date, RGH shall have a
twenty percent (20%) undivided interest in all distributions of Cash made from
RIC to Reorganized RFSC, other than any distributions, whether in the form of
dividends or otherwise, which are directly attributable to Reorganized RFSC's
share of the Section 847 Refunds or Development, pursuant to the RGH/RFSC
Settlement Term Sheet.
9.20 Development. On or after the Effective Date, Reorganized RFSC may
enter into a Joint Venture or Joint Ventures for the purpose of obtaining
proceeds from Development.
9.21 Reserves.
(a) Primary Reserve. The Primary Reserve shall contain the Operating
Funds. On the Effective Date, each of RGH, through an RGH Contribution, and
Reorganized RFSC, from proceeds of the RGH Term Loan, shall deposit $2,537,000
into the Primary Reserve. Thereafter, on each Distribution Date, (i) if the
reported Primary Reserve balance exceeds the reported Primary Reserve
Requirement, then funds from the Primary Reserve shall be distributed as if such
funds were (x) RFSC Available Funds distributable pursuant to Section 2(b) of
the RGH/RFSC Settlement Term Sheet and (y) RGH Available Funds distributable
pursuant to Section 2(c) of the RGH/RFSC Settlement Term Sheet, in each case in
an amount equal to fifty percent (50%) of such excess; and (ii) if the reported
Primary Reserve Requirement exceeds the reported Primary Reserve balance, then,
the Primary Reserve balance shall be funded by RGH Contributions, proceeds from
the RGH Revolving Loans and RFSC Available Funds, pursuant to Section 9.8.
(b) Development Reserve. Reorganized RFSC shall fund the Development
Reserve with RFSC Available Funds; provided that it may only do so after first
applying any RFSC Available Funds (i) first, to satisfy obligations under the
RGH Loans, (ii) second, to reimburse RGH for Reimbursable Expenses, and (iii)
third, to fund Reorganized RFSC's portion of the Primary Reserve Requirement.
Funds in the Development Reserve shall be used (i) prior to any Change of
Control or dissolution of Reorganized RFSC, to pay (or establish an escrow to
pay) all Development Expenses coming due (or reasonably expected to come due)
during a Development Period to (and including) the date of any Change of Control
or dissolution of Reorganized RFSC; and (ii) upon any Change of Control or
dissolution of Reorganized RFSC, to pay (or reserve against) all Development
Expenses due and payable (or actually incurred) through the date of such Change
of Control or dissolution of Reorganized RFSC, if same occurs during a
Development Period, and, in any event, with any remaining funds to be
distributed as provided in Section 9.22.
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(c) Discretionary Reserve. Reorganized RFSC may deposit RFSC Available
Funds into the Discretionary Reserve to pay future expenses, provided, that it
may only do so after first applying any RFSC Available Funds (i) first, to
satisfy obligations under the RGH Loans, (ii) second, to reimburse RGH for
Reimbursable Expenses, (iii) third, to fund Reorganized RFSC's portion of the
Primary Reserve Requirement, (iv) fourth, to satisfy its obligation to fund the
Development Reserve, and (v) fifth, to reimburse the Indemnified Advisors for
any indemnified expenses incurred in such capacity. Upon the occurrence of a
Change of Control, 847 Termination Date or the dissolution of the Reorganized
Debtor, all funds in the Discretionary Reserve shall be distributed as provided
in Section 9.22.
9.22 Liquidation of Reserves. At the times and to the extent provided
in Section 9.21(a), (b) and (c), all funds remaining in the Primary Reserve,
Development Reserve and Discretionary Reserve, respectively, shall be
distributed: (i) first, if any CEO Indemnification Obligations could reasonably
be expected to become payable, to a trust or trusts established to maintain such
funds for the benefit of the respective Indemnified CEOs in an aggregate amount
not exceeding the Indemnification Requirement, and, notwithstanding any other
provision of the RGH/RFSC Settlement Term Sheet, neither Reorganized RFSC nor
such trusts shall be obligated to distribute such funds to RGH, or to holders of
equity interests in Reorganized RFSC pursuant to the Plan, until all litigation
and claims giving rise to such CEO Indemnification Obligations have been
settled, paid or otherwise finally resolved, at which time any remaining trust
funds shall be distributed pursuant to Section 9.22(ii); and (ii) second, (A) in
the case of funds from the Primary Reserve, fifty percent (50%) to RGH or its
successors and fifty percent (50%) to (I) satisfy any Reimbursement Obligations,
(II) reimburse the Indemnified Advisors for any indemnified expenses incurred in
such capacity and (III) pay dividends to Holders of New RFSC Common Stock, and
(B) in the case of funds from the Development Reserve or the Discretionary
Reserve, one hundred percent (100%) (I) to satisfy any Reimbursement
Obligations, (II) reimburse the Indemnified Advisors for any indemnified
expenses incurred in such capacity and (III) pay dividends to Holders of New
RFSC Common Stock.
9.23 Further Funding of Reorganized RFSC. Nothing contained in the
Plan, the RGH/RFSC Settlement Term Sheet, the Amended and Restated By-laws or
the Amended and Restated Articles of Incorporation shall, or shall be
interpreted to, in any way bind, require or otherwise create any obligation
requiring any shareholder of Reorganized RFSC to provide any funds or other
property to or on behalf of, or otherwise invest in, Reorganized RFSC or RGH.
9.24 Binding Effect of PA Settlement Agreement and RGH/RFSC Settlement
Term Sheet. All parties identified under, and bound by, the RGH/RFSC Settlement
Term Sheet and the PA Settlement Agreement shall, subject to the Tax Sharing
Agreement, now and forever be bound to abide by the terms and provisions therein
and nothing in this Plan shall in any way act as a release, waiver or discharge
of any obligation under the PA Settlement Agreement, the RGH/RFSC Settlement
Term Sheet or the Tax Sharing Agreement, or the orders approving the PA
Settlement Agreement and the RGH/RFSC Settlement Term Sheet, all of which shall
survive confirmation of the Plan and shall not be affected by Section 11.4 or
11.5 of the Plan.
9.25 Reporting Requirements.
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(a) Interim Reporting. On each Interim Reporting Date, the Reorganized
Debtor shall prepare and send a statement (each, an "Interim Statement") to each
of the Notice Parties. Each Interim Statement shall set forth, with respect to
the period from (and including) the Interim Reporting Date or Quarterly
Reporting Date, whichever is later, immediately preceding the most recent
Interim Reporting Date (or, if none, the Effective Date) to (but excluding) the
most recent Interim Reporting Date, the Required Reporting Information.
(b) Quarterly and Annual Reporting. On each Quarterly Reporting Date,
the Reorganized Debtor shall prepare and send a quarterly statement (each, a
"Quarterly Statement") to each of the Notice Parties. Each Quarterly Statement
shall set forth, with respect to the calendar quarter then most recently ended,
the Required Reporting Information. On or before February 15th of each year, the
Reorganized Debtor shall provide to the Notice Parties an annual statement
aggregating the information contained in the Quarterly Statements for the
previous four (4) quarters. The Reorganized Debtor shall be audited not less
than once every twelve (12) months.
9.26 Operations Between the Confirmation Date and the Effective Date.
The Debtor shall continue to operate as Debtor in Possession, subject to the
supervision of the Bankruptcy Court, during the period from the Confirmation
Date through and until the Effective Date.
9.27 Approval of Agreements. Confirmation shall constitute approval of
all other agreements and transactions contemplated by the Plan, and the
Confirmation Order shall so provide.
9.28 Waiver of Conflicts. The Debtor and the Reorganized Debtor shall
waive, and shall be deemed to have waived, any conflict of interest of any
counsel, director or officer of Reorganized RFSC or RGH arising from (i) the
employment of an Indemnified CEO as a director of Reorganized RFSC, (ii) the
employment of an Indemnified CEO as a director or officer of RGH and the
participation of such Indemnified CEO in negotiations leading to employment; and
(iii) the participation of counsel to RGH as co-counsel or lead counsel in the
pursuit or defense of Section 847 Refunds.
9.29 Books and Records. So long as RGH retains an undivided interest in
the Net 847 Refunds, Reorganized RFSC shall permit RGH, at reasonable intervals,
upon reasonable notice and during regular business hours, at the sole expense of
RGH, to examine and make copies of all books, records and documents, including
computer tapes and disks, in the possession or under the control of Reorganized
RFSC. On and after the Effective Date, the CEO shall have the authority to, in
his or her reasonable discretion, (i) use and (ii) subject to reasonable prior
notice being given to RGH and the Liquidator, dispose of the books and records
of the Debtor and Reorganized Debtor. The CEO will not, however, dispose of
books and records without first (a) filing a motion authorizing the CEO to
dispose of such books and records, on notice to (i) counsel to RGH, (ii) the
Liquidator, (iii) the Creditors' Committee or any liquidating trustee appointed
under the RGH Plan, as applicable, and (iv) any parties with pending formal
discovery requests, and any other persons who have delivered written notice to
the Debtor or Reorganized Debtor identifying a legal interest in preserving such
books and records, or (b) obtaining the consent of such parties and/or persons
to dispose of such books and records. To the extent that the Liquidator at any
time requires such books and records for its own purposes or determines that any
or all of them should not be disposed, the Liquidator shall be allowed the
reasonable opportunity to take possession of any or all such books and records.
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ARTICLE X
PROVISIONS GOVERNING DISTRIBUTIONS UNDER THE PLAN
10.1 Distribution Provisions.
(a) Distributions Under the Plan. The Debtor, through the Disbursing
Agent, shall make all Distributions required by the Plan. Furthermore, the
Debtor and the Reorganized Debtor are authorized to make Distributions required
in connection with consummation of the Plan. In particular, on the Effective
Date, the Disbursing Agent shall make a Distribution of New RFSC Common Stock
and Litigation Proceeds Cash, if any, as applicable, to the Holders of Allowed
Claims in accordance with Article V and Section 9.9 of the Plan. Thereafter,
Distributions may be made from time to time, pursuant to the terms of the Plan.
Notwithstanding any other provision of the Plan, no Distributions shall be made
to a Holder of a Claim unless and until such Claim is an Allowed Claim.
(b) Distributions on Non-Business Days. Any payment due on a day other
than a Business Day shall be made, without interest, on the next Business Day.
(c) Record Date. The Disbursing Agent shall have no obligation to
recognize the transfer of, or the sale of any participation in, any Allowed
Claim that occurs after close of business on the Confirmation Date, and will be
entitled for all purposes herein to recognize and distribute only to those
Holders of Allowed Claims who are Holders of such Claims, or participants
therein, as of the close of business on the Confirmation Date.
10.2 Delivery of Distributions. Subject to Bankruptcy Rule 9010,
Distributions to Holders of Allowed Claims shall be made by the Disbursing Agent
(a) at the last known address of such Holders or (b) at the addresses set forth
in any written notices of address changes delivered to the Disbursing Agent. If
any Holder's Distribution is returned as undeliverable, no further Distribution
to such Holder shall be made unless and until the Disbursing Agent is notified
of such Holder's then current address, at which time all missed Distributions
shall be made to such Holder without interest and without any dividends that
would have been payable on any equity securities to be distributed. All
Distributions pursuant to the Plan shall not require the Reorganized Debtor or
the Disbursing Agent to attempt to locate any Holder of an Allowed Claim other
than by reviewing the records of the Reorganized Debtor.
10.3 Disbursing Agent. The Disbursing Agent shall fulfill the
obligations under the Plan with respect to Distributions to the Holders of
Allowed Claims, including, without limitation, holding all reserves and accounts
pursuant to the Plan. The Disbursing Agent shall be Reorganized RFSC, or such
other entity identified at or prior to the confirmation hearing.
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10.4 Distributions of Cash. Any Cash payments to be made pursuant to
the Plan may be made by Cash, draft, check, wire transfer, or as otherwise
required or provided in any relevant agreements or applicable law at the option
of the Reorganized Debtor.
10.5 De Minimis or Fractional Distributions. Notwithstanding anything
to the contrary contained in this Plan, Reorganized RFSC shall not be required
to distribute Cash to any entity if the amount of such distribution is less than
$25.00. Additionally, the Disbursing Agent shall not be required to make
distributions of fractions of dollars. Whenever any payment or distribution of a
fraction of a dollar under the Plan would otherwise be called for, the actual
payment or distribution shall reflect a rounding of such fraction to the nearest
whole dollar (up or down) with half dollars or less being rounded down.
10.6 Failure to Negotiate Checks. Checks issued in respect of
Distributions under the Plan shall be null and void if not negotiated within
ninety (90) days after the date of issuance. Any amounts returned to the
Reorganized Debtor in respect of such non-negotiated checks shall be held by the
Reorganized Debtor. Requests for reissuance of any such check shall be made
directly to the Reorganized Debtor by the Holder of the Allowed Claim with
respect to which such check originally was issued. All amounts represented by
any voided check will be held until nine (9) months after such voided check was
issued, and all requests for reissuance by the Holder of the Allowed Claim in
respect of a voided check are required to be made prior to such date.
Thereafter, all such amounts shall be deemed to be Unclaimed Distributions, in
accordance with Section 10.7 of the Plan, and all Claims in respect of void
checks and the underlying Distributions shall be forever barred, estopped and
enjoined from assertion in any manner against the Debtor, the Estate or the
Reorganized Debtor.
10.7 Unclaimed Distributions. Any Unclaimed Distributions, and all
interest, dividends, and other earnings thereon, shall be held and segregated in
an account or accounts by the Disbursing Agent for the benefit of the Holders of
Allowed Claims entitled thereto under the terms of this Plan. All such Unclaimed
Distributions shall be held for a period of one year following the applicable
Distribution Date and during such period shall be released and delivered to the
Holders of Allowed Claims entitled thereto only upon presentation of proper
proof by such Holders of such entitlement. At the end of one year following the
relevant Distribution Date of any Unclaimed Distributions, the Holders of
Allowed Claims theretofore entitled to such Unclaimed Distributions shall cease
to be entitled thereto and the Unclaimed Distributions for each such Holder of
an Allowed Claim shall then be distributed on a Pro Rata basis to the Holders of
Allowed Claims in the applicable Class(es) who have received and have claimed
Distributions and who are otherwise entitled to further Distributions pursuant
to the Plan and if no such Holders of Allowed Claims in the applicable Class(es)
then exist, such Unclaimed Distributions shall vest in Reorganized RFSC and
shall no longer be subject to distribution to any Holders of Allowed Claims.
10.8 No Distribution Pending Allowance. Notwithstanding any other
provision of the Plan, no Distributions shall be made under the Plan unless and
until such Claim becomes an Allowed Claim.
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10.9 Distributions to Holders of Disputed Claims.
(a) Resolution of Disputed Claims. Unless otherwise ordered by the
Bankruptcy Court, each of the Bank Committee, the Creditors' Committee, the
Debtor, the Reorganized Debtor and RGH shall have the right to make and file
objections to Claims and settle, compromise or otherwise resolve all such
objections previously made or filed by the Debtor. The Bank Committee, the
Creditors' Committee, the Debtor, the Reorganized Debtor or RGH, as the case may
be, shall file all objections to Claims as soon as practicable, but in no event
later than (i) ninety (90) days after the later to occur of the Effective Date
or the applicable Bar Date, or (ii) such other time as may be fixed or extended
by order of the Bankruptcy Court. All objections to Claims filed by the Bank
Committee, the Creditors' Committee, the Debtor, the Reorganized Debtor or RGH,
as applicable, shall be filed and resolved in accordance with all applicable
provisions of the Bankruptcy Code and Bankruptcy Rules and, after the Effective
Date, the Bankruptcy Court will retain jurisdiction to resolve such objections
pursuant to Section 502 of the Bankruptcy Code.
(b) Reserves for Disputed Claims. (i) On each applicable Distribution
Date, the Debtor or the Reorganized Debtor, as applicable, shall reserve in an
account or account(s), for the benefit of Holders of Disputed Claims, the
Distributions to which the Holders of such Disputed Claims would be entitled
under the Plan if such Disputed Claims were Allowed Claims. Such amounts shall
be determined by reference to the full stated amount claimed by the Holder of
such Disputed Claim in any Proof(s) of Claim filed with the Bankruptcy Court as
of such date or such lesser amount determined by (I) agreement between the
Debtor, the Creditors' Committee, and such Holder or (II) Final Order of the
Bankruptcy Court. Reorganized RFSC shall maintain a register of all Disputed
Claims and the amounts of such Claims, upon which to base the Distribution
reserves for such Disputed Claims pursuant to the preceding sentence.
(ii) Reorganized RFSC shall pay, or cause to be paid, out of
the funds held in any Distribution reserve account(s) pursuant to Section
10.09(b)(i), all taxes imposed by any federal, state and local taxing
authorities, and any foreign taxing authorities, on the income generated by the
funds held in such account. Reorganized RFSC shall also file, or cause to be
filed, any tax or information return related to any such account. All property
held in such account(s) shall be invested in accordance with Section 345 of the
Bankruptcy Code, as modified by the relevant orders of the Bankruptcy Court for
investments made by the Debtor during the Chapter 11 Case. The earnings on such
investments shall be held in trust as an addition to the balance of the accounts
for the benefit of the Holders of Disputed Claims on whose behalf the reserve
was created (to the extent such Disputed Claims become Allowed Claims), and
shall not constitute property of Reorganized RFSC.
(c) Distributions Upon Allowance of Disputed Claims. The Holder of a
Disputed Claim that becomes an Allowed Claim subsequent to the Distribution Date
shall receive Distributions previously reserved on account of such Claim
(including any earnings thereon), as soon as reasonably practicable following
the allowance of any such Claim. Such Distributions shall be made in accordance
with the Plan based upon the Distributions that would have been made to such
Holder under the Plan if the Disputed Claim had been an Allowed Claim on or
prior to the Effective Date; provided, however, that if an insufficient amount
was reserved for such Disputed Claim, the Distribution may be limited if an
additional amount is unavailable therefor and has been distributed to Holders of
Allowed Claims.
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(d) Excess Reserves. Upon any Disputed Claim becoming a Disallowed
Claim, in whole or in part, the property, if any, previously reserved for the
payment of or Distribution on the Disallowed portion of such Disputed Claim
shall be distributed on a Pro Rata basis to the Holders of Allowed Claims in the
applicable Class(es) who have received and have claimed Distributions and who
are otherwise entitled to further Distributions pursuant to the Plan, and if no
such Holders of Allowed Claims then exist, such property previously reserved for
the payment of or Distribution on the Disallowed portion of such Disputed Claim
shall vest in the Reorganized Debtor and shall no longer be subject to
distribution to any Holders of Allowed Claims.
(e) Late Claims. Except as otherwise expressly provided in this Plan,
any Claim which is not deemed filed pursuant to Section 1111(a) of the
Bankruptcy Code, or for which a Proof of Claim is not timely filed pursuant to
the Bankruptcy Code, Bankruptcy Rules or any order of the Bankruptcy Court
setting a Bar Date, shall not be treated as an Allowed Claim and shall be
expunged from the Claims register in the Chapter 11 Case without need for any
further notice, motion, objection or order.
(f) Estimation of Claims. The Debtor, the Reorganized Debtor, the Bank
Committee or the Creditors' Committee, as the case may be, may request that the
Bankruptcy Court estimate any Claim subject to estimation under Section 502(c)
of the Bankruptcy Code and for which the Debtor may be liable under this Plan,
including any Claim for taxes, to the extent permitted by Section 502(c) of the
Bankruptcy Code, regardless of whether any party in interest previously objected
to such Claim. The Bankruptcy Court will retain jurisdiction to estimate any
Claim pursuant to Section 502(c) of the Bankruptcy Code at any time during
litigation concerning any objection to any Claim.
(g) Procedure. All of the Claims objection, estimation and resolution
procedures described in the Plan are cumulative and not necessarily exclusive of
one another. Claims may be estimated and subsequently objected to, compromised,
settled, withdrawn or resolved by any mechanism set forth in this Plan, the
Bankruptcy Code, or otherwise approved by the Bankruptcy Court.
10.10 Setoffs. The Debtor or the Reorganized Debtor, as applicable,
may, but shall not be required to, set off against any Claims and the payments
or Distributions to be made pursuant to the Plan in respect of such Claims, any
and all debts, liabilities and claims of every type and nature whatsoever which
the Estate, the Debtor or the Reorganized Debtor may have against the Holders of
such Claims; provided, however, that neither the failure to do so nor the
allowance of any such Claims, whether pursuant to the Plan or otherwise, shall
constitute a waiver or release by the Debtor or the Reorganized Debtor of any
such claims the Debtor or the Reorganized Debtor may have against such
Creditors, and all such claims shall be reserved to and retained by the
Reorganized Debtor.
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ARTICLE XI
EFFECT OF CONFIRMATION OF THE PLAN
11.1 Term of Bankruptcy Injunction or Stays. Unless otherwise provided,
all injunctions or stays provided for in the Chapter 11 Case under Section 105
or 362 of the Bankruptcy Code, or otherwise, and in existence on the
Confirmation Date, shall remain in full force and effect until the Effective
Date or such later date as provided under applicable law.
11.2 Issuance of New RFSC Common Stock. On the Effective Date, the
Debtor shall issue the New RFSC Common Stock.
11.3 Revesting of Assets. (a) On the Effective Date, all property of
the Estate shall vest in the Reorganized Debtor, except as otherwise provided
for in the Plan, including, in particular, the Litigation Claims of the Debtor
and the Estate, which shall be deemed assigned to RGH in accordance with Section
9.16(a) of the Plan.
(b) From and after the Effective Date, the Reorganized Debtor may
operate its business, and may use, acquire and dispose of property free of any
restrictions imposed under the Bankruptcy Code.
(c) As of the Effective Date, except as otherwise provided herein, all
property of the Reorganized Debtor shall be free and clear of all Liens, Claims
and interests of Holders of Claims and Equity Interests, except as otherwise
provided in the Plan.
11.4 DISCHARGE. THE RIGHTS AFFORDED HEREIN AND PURSUANT TO THE PA
SETTLEMENT AGREEMENT, THE RGH/RFSC SETTLEMENT TERM SHEET, THE PBGC STIPULATION,
THE TAX SHARING AGREEMENT, THE CONFIRMATION ORDER OR A SEPARATE ORDER OF THE
BANKRUPTCY COURT AND THE TREATMENT OF ALL CLAIMS AND EQUITY INTERESTS HEREIN
SHALL BE IN EXCHANGE FOR AND IN COMPLETE SATISFACTION, DISCHARGE AND RELEASE OF
ALL CLAIMS AND EQUITY INTERESTS OF ANY NATURE WHATSOEVER, INCLUDING ANY INTEREST
ACCRUED ON SUCH CLAIMS FROM AND AFTER THE PETITION DATE, AGAINST THE DEBTOR OR
ANY OF ITS ASSETS OR PROPERTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE
PLAN (INCLUDING, WITHOUT LIMITATION, SECTION 9.24 OF THE PLAN), THE PA
SETTLEMENT AGREEMENT, THE RGH/RFSC SETTLEMENT TERM SHEET, THE PBGC STIPULATION,
THE TAX SHARING AGREEMENT, THE CONFIRMATION ORDER OR A SEPARATE ORDER OF THE
BANKRUPTCY COURT, AS OF THE EFFECTIVE DATE (A) ALL SUCH CLAIMS AGAINST AND
EQUITY INTERESTS IN THE DEBTOR SHALL BE SATISFIED, DISCHARGED AND RELEASED IN
FULL AND (B) ALL PERSONS AND GOVERNMENTAL ENTITIES SHALL BE PRECLUDED FROM
ASSERTING AGAINST THE DEBTOR, ITS SUCCESSORS, OR ITS ASSETS OR PROPERTIES ANY
OTHER OR FURTHER CLAIMS OR EQUITY INTERESTS BASED UPON ANY ACT, OMISSION,
TRANSACTION OR OTHER ACTIVITY OF ANY KIND OR NATURE THAT OCCURRED PRIOR TO THE
CONFIRMATION DATE.
11.5 INJUNCTION. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THE PLAN
(INCLUDING, WITHOUT LIMITATION, SECTION 9.24 OF THE PLAN), THE PA SETTLEMENT
AGREEMENT, THE RGH/RFSC SETTLEMENT TERM SHEET, THE TAX SHARING AGREEMENT, THE
PBGC STIPULATION, THE CONFIRMATION ORDER OR A SEPARATE ORDER OF THE BANKRUPTCY
COURT, ALL PERSONS WHO HAVE HELD, HOLD OR MAY HOLD CLAIMS AGAINST OR EQUITY
INTERESTS IN THE DEBTOR, ARE PERMANENTLY ENJOINED, ON AND AFTER THE EFFECTIVE
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DATE, FROM DIRECTLY OR INDIRECTLY (A) COMMENCING OR CONTINUING IN ANY MANNER ANY
ACTION OR OTHER PROCEEDING OF ANY KIND WITH RESPECT TO ANY SUCH CLAIM OR EQUITY
INTEREST, (B) ENFORCING, ATTACHING, COLLECTING OR RECOVERING BY ANY MANNER OR
MEANS OF ANY JUDGMENT, AWARD, DECREE OR ORDER AGAINST THE DEBTOR ON ACCOUNT OF
ANY SUCH CLAIM OR EQUITY INTEREST, (C) 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 EQUITY INTEREST, (D)
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 EQUITY INTEREST AND (E) COMMENCING
OR CONTINUING IN ANY MANNER ANY ACTION OR OTHER PROCEEDING OF ANY KIND WITH
RESPECT TO ANY CLAIMS AND CAUSES OF ACTION WHICH ARE EXTINGUISHED, DISMISSED OR
RELEASED PURSUANT TO THE PLAN, INCLUDING THE CAUSES OF ACTION RELEASED PURSUANT
TO SECTIONS 14.4 AND 14.5. SUCH INJUNCTION SHALL EXTEND TO SUCCESSORS OF THE
DEBTOR, INCLUDING THE REORGANIZED DEBTOR AND ITS PROPERTIES AND INTERESTS IN
PROPERTY.
11.6 Injunction Against Interference with Plan. Upon the entry of the
Confirmation Order, all Holders of Claims and Equity Interests, and other
parties in interest, shall be enjoined from taking any actions to interfere with
the implementation or consummation of the Plan.
ARTICLE XII
CONFIRMATION AND EFFECTIVENESS OF THE PLAN
12.1 Conditions Precedent to Confirmation. The Plan shall not be
confirmed unless and until the following conditions shall have been satisfied or
waived pursuant to Section 12.4:
(a) The Disclosure Statement, in form and substance reasonably
acceptable to the Creditors' Committee, shall have been approved by the
Bankruptcy Court;
(b) The Holders of at least a majority in dollar amount of the Allowed
Bank Claims (Class 2) shall have voted to accept the Plan;
(c) One Impaired Class shall have voted to accept the Plan by the
requisite statutory majorities provided in Section 1126(c) of the
Bankruptcy Code; and
(d) The Bankruptcy Court shall have entered one or more orders that
shall be in full force and effect and not stayed and which shall:
(i) provide that pursuant to Section 1146(c) of the Bankruptcy Code, the
issuance, transfer or exchange of any security under the Plan or the
making or delivery of any instrument of transfer or sale of any real
or personal property of the Debtor, the Reorganized Debtor or the
Estate pursuant to, in implementation of, or as contemplated by the
Plan, shall not be taxed under any state or local law imposing a stamp
tax, a transfer tax or similar tax or fee;
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(ii) confirm the Plan and authorize the implementation of the Plan in
accordance with its terms, including the execution and delivery of the
agreements and instruments entered into pursuant to the Plan (including
each of the documents in the Plan Appendix and the Plan Supplement);
(iii) issue the injunction and authorize the issuance of the releases and
exculpations as set forth in the Plan, effective on the Effective Date;
and
(iv) decree that, on the Effective Date, the transfers of assets by the
Debtor contemplated by the Plan (a) are or will be legal, valid and
effective transfers of property, (b) vest or will vest in the
transferee good title to such property free and clear of all claims,
interests and Liens, except those provided for in the Plan or the
Confirmation Order, (c) do not or will not constitute fraudulent
transfers or conveyances under any applicable law and (d) do not and
will not subject the Debtor, the Reorganized Debtor or the property so
transferred to any liability by reason of such transfer under
applicable law or any theory of law, including any theory of successor
or transferee liability.
12.2 Conditions Precedent to Effectiveness. The Plan shall not become
effective unless and until the following conditions shall have been satisfied or
waived pursuant to Section 12.4:
(a) the Confirmation Order, in form and substance reasonably acceptable
to the Committees, shall have been approved and entered and not stayed or
overturned by a court of competent jurisdiction;
(b) there shall not be in force any order, decree or ruling of any
court or governmental body having jurisdiction, restraining, enjoining or
staying the consummation of, or rendering illegal the transactions
contemplated by, the Plan;
(c) the Effective Date shall have occurred on or before December 31,
2004;
(d) the Tax Sharing Agreement shall have been executed and delivered by
all parties thereto and an order approving the Tax Sharing Agreement shall
have been entered by each of the Bankruptcy Court and the Commonwealth
Court;
(e) the RGH/RFSC Settlement Term Sheet Order shall have been approved
and entered and not stayed or overturned by a court of competent
jurisdiction;
(f) the Senior Secured Credit Agreement shall have been entered into
and executed by RGH and the Debtor;
(g) all other funding arrangements and mechanisms required to implement
the RGH/RFSC Settlement Term Sheet shall be fully established and
implemented;
(h) an order approving the distribution or use of any property of RGH
under the Plan, including with respect to any funding obligations of RGH
under the Plan and all mechanisms required to satisfy such funding
obligations (other than any funding obligations or mechanisms previously
approved pursuant to the RGH/RFSC Settlement Term Sheet Order), shall have
been approved and entered and not stayed or overturned by a court of
competent jurisdiction;
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(i) the Debtor shall have received all authorizations, consents,
regulatory approvals, rulings, letters, no-action letters, opinions or
other documents necessary to implement the Plan;
(j) any amended, modified or supplemented Tax Determinations deemed
appropriate by the Committees shall have been sought from, and final,
non-appealable rulings substantially to the same effect shall have been
granted by, the Bankruptcy Court;
(k) each Exhibit and Schedule, as well as the Plan Appendix and the
Plan Supplement, shall be in form and substance reasonably acceptable to
the Committees; and
(l) there shall not be in excess of One Hundred Thousand Dollars
($100,000.00), in the aggregate, of Allowed Administrative Expense Claims
(other than Professional Compensation and Reimbursement Claims) to be paid
from Available Cash.
12.3 Effect of Failure of Conditions to Effectiveness. In the event
that any condition specified in Section 12.2 has not occurred or has not been
waived pursuant to Section 12.4 on or before December 31, 2004, (a) the
Confirmation Order shall be vacated, (b) no Distributions under the Plan shall
be made, (c) the Debtor and all Holders of Claims and Equity Interests shall be
restored to the status quo as of the day immediately preceding the Confirmation
Date as though the Confirmation Date had never occurred and (d) the Debtor's
obligations with respect to Claims and Equity Interests shall remain unchanged
and nothing contained herein shall constitute or be deemed a waiver or release
of any Claims or Equity Interests by or against the Debtor or any other Person
or Entity or to prejudice in any manner the rights of the Debtor or any Person
or Entity in any further proceedings involving the Debtor.
12.4 Waiver of Conditions to Confirmation. The Creditors' Committee may
in its sole discretion waive, in whole or in part, any condition precedent to
the Confirmation Date or the Effective Date set forth in Article 12 (other than
(i) the conditions set forth in Sections 12.2(a), (b), (e) and (k) and (ii) the
condition set forth in Section 12.2(j), which may be waived by either the Bank
Committee or the Creditors' Committee), by a writing signed by an authorized
representative of the Creditors' Committee and subsequently filed with the
Bankruptcy Court, without notice to other parties in interest and without a
hearing. The failure to satisfy or waive any condition to the Confirmation Date
or the Effective Date may be asserted by the Creditors' Committee (or by the
Bank Committee regarding the condition set forth in Section 12.2(j)) in its sole
discretion regardless of the circumstances giving rise to such failure of such
condition to be satisfied (including any action or inaction by the Creditors'
Committee in its sole discretion). The failure of the Creditors' Committee in
its sole discretion to exercise any of the foregoing rights shall not be deemed
a waiver of any rights, and each right shall be deemed an ongoing right, which
may be asserted at any time.
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ARTICLE XIII
RETENTION OF JURISDICTION
13.1 Exclusive Jurisdiction of the Bankruptcy Court. The Bankruptcy
Court shall have exclusive jurisdiction of all matters arising out of, and
related to, the Chapter 11 Case and the Plan pursuant to, and for the purposes
of, Sections 105(a) and 1142 of the Bankruptcy Code and for, among other things,
the following purposes:
(a) to hear and determine pending motions, if any, for the assumption
or rejection of executory contracts or unexpired leases, if any are
pending, and the allowance of cure amounts and Claims resulting therefrom;
(b) to hear and adjudicate any and all adversary proceedings,
applications and contested matters;
(c) to hear and determine any applications for and/or objections to
payment of Claims entitled to priority under Section 507(a)(1) of the
Bankruptcy Code, including Administrative Expense Claims, Professional
Compensation and Reimbursement Claims, Priority Tax Claims or other Claims;
(d) to hear and determine any and all objections to the allowance or
estimation of Claims filed, before and after the Confirmation Date,
including any objections to the classification of any Claim, and any and
all motions to allow or disallow any Claim, in whole or in part;
(e) to enter and implement such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, revoked, modified
and/or vacated;
(f) to issue orders in aid of execution, implementation and
consummation of the Plan, to the extent authorized by Section 1142 of the
Bankruptcy Code;
(g) to consider any amendments to or modifications of the Plan and any
and all motions to cure any defect or omission, or to reconcile any
inconsistency, in any order of the Bankruptcy Court, including the
Confirmation Order;
(h) to hear and determine disputes arising in connection with the
interpretation, implementation and enforcement of the Plan, including
disputes arising under agreements, documents or instruments executed in
connection with the Plan; provided, however, that with respect to any
disputes relating to or arising under Section 9.29 of the Plan, the
Bankruptcy Court shall not have exclusive jurisdiction, but shall have
concurrent jurisdiction with the Commonwealth Court;
(i) to recover all assets of the Debtor and property of the Estate,
wherever located;
(j) to hear and determine matters concerning state, local and federal
taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code;
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(k) to hear any other matter not inconsistent with the Bankruptcy Code;
(l) to hear and determine any issues or disputes regarding the Bello
Litigation;
(m) to adjudicate any dispute in respect of the implementation of or
arising out of the PA Settlement Agreement, subject to any arbitration
provisions set forth therein; provided, however, that with respect to any
such disputes set forth in this subsection (m), the Bankruptcy Court shall
not have exclusive jurisdiction, but shall have concurrent jurisdiction
with the Commonwealth Court;
(n) to adjudicate any dispute in respect of the implementation of or
arising out of the RGH/RFSC Settlement Term Sheet;
(o) to adjudicate any dispute in respect of the implementation or
arising out of the PBGC Stipulation;
(p) to adjudicate any dispute in respect of the implementation of or
arising out of the Tax Sharing Agreement, subject to any arbitration
provision set forth therein; provided, however, that with respect to any
such disputes set forth in this subsection (o), the Bankruptcy Court shall
not have exclusive jurisdiction, but shall have concurrent jurisdiction
with the Commonwealth Court;
(q) to enter a final decree closing the Chapter 11 Case; and
(r) to hear all matters arising out of, and related to, the Chapter 11
Case and the Plan, pursuant to, and for the purposes of, Sections 105(a)
and 1142 of the Bankruptcy Code, and for the purposes set forth above in
this Section 13.1.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Effectuating Documents and Further Transactions. The Debtor and
Reorganized Debtor are authorized and directed 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 and any securities
issued pursuant to the Plan.
14.2 Corporate Action. On the Effective Date, all matters provided for
under the Plan that would otherwise require approval of the stockholders or
directors of the Debtor or Reorganized Debtor shall be deemed to have been
approved by the necessary entities and to be in effect from and after the
Effective Date pursuant to the applicable general corporation law of the state
in which the Debtor and Reorganized Debtor are incorporated, without any
requirement of further action by the stockholders or directors of the Debtor or
Reorganized Debtor.
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14.3 Exemption from Transfer Taxes. Pursuant to Section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of notes or issuance of debt
or equity securities under the Plan, the creation of any mortgage, deed of trust
or other security interest, the making or assignment of any lease or sublease,
or the making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan, including any merger agreements
or agreements of consolidation, deeds, bills of sale or assignments executed in
connection with any of the transactions contemplated under the Plan, shall not
be subject to any stamp, real estate transfer, mortgage recording or other
similar tax, or to any fees for filing documents to perfect a security interest.
All sale transactions consummated by the Debtor and approved by the Bankruptcy
Court on and after the Petition Date through and including the Effective Date,
including the sale, if any, by the Debtor of owned property or assets pursuant
to Section 363(b) of the Bankruptcy Code, the assumptions, assignments and
sales, if any, by the Debtor of unexpired leases of non-residential real
property pursuant to Section 365(a) of the Bankruptcy Code, and the transactions
effected pursuant to the RGH/RFSC Settlement Term Sheet, the PA Settlement
Agreement, and the PBGC Stipulation, shall be deemed to have been made under, in
furtherance of, or in connection with the Plan and, therefore, shall not be
subject to any stamp, real estate transfer, mortgage recording or other similar
tax.
14.4 RELEASES.
(a) RELEASES BY DEBTOR. EFFECTIVE AS OF THE CONFIRMATION DATE, BUT
SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, AND EXCEPT AS OTHERWISE
PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, FOR GOOD AND VALUABLE
CONSIDERATION, THE ADEQUACY OF WHICH IS HEREBY CONFIRMED, EACH OF THE DEBTOR AND
THE REORGANIZED DEBTOR, IN ITS INDIVIDUAL CAPACITY AND AS A DEBTOR IN
POSSESSION, WILL BE DEEMED TO HAVE FOREVER RELEASED, WAIVED AND DISCHARGED (I)
THE BANK COMMITTEE, THE CREDITORS' COMMITTEE AND EACH OF THE BANKS, AND, SOLELY
IN THEIR CAPACITY AS SUCH, ANY OF THEIR CURRENT OR FORMER OFFICERS, DIRECTORS,
SUBSIDIARIES, AFFILIATES, MEMBERS, SHAREHOLDERS, PARTNERS, REPRESENTATIVES,
EMPLOYEES, ATTORNEYS, FINANCIAL ADVISORS, ACCOUNTANTS, CONSULTANTS AND AGENTS,
(II) THE DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTOR, THE REORGANIZED DEBTOR
AND RGH WHO CONTINUE IN SUCH POSITIONS SUBSEQUENT TO THE EFFECTIVE DATE, (III)
THE FORMER DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTOR AND RGH, AND (IV) THE
CURRENT AND FORMER REPRESENTATIVES, ATTORNEYS, FINANCIAL ADVISORS, ACCOUNTANTS,
CONSULTANTS AND AGENTS OF THE DEBTOR, THE REORGANIZED DEBTOR AND RGH FROM ANY
AND ALL CLAIMS (INCLUDING AVOIDANCE CLAIMS), OBLIGATIONS, SUITS, JUDGMENTS,
DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION AND LIABILITIES (OTHER THAN
THE RIGHTS OF THE DEBTOR, THE REORGANIZED DEBTOR AND THE BANK COMMITTEE TO
ENFORCE THE PLAN AND THE CONTRACTS, INSTRUMENTS, RELEASES, INDENTURES AND OTHER
AGREEMENTS OR DOCUMENTS DELIVERED THEREUNDER), WHETHER FOR TORT, FRAUD,
CONTRACT, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS, OR OTHERWISE, WHETHER
LIQUIDATED OR UNLIQUIDATED, FIXED OR CONTINGENT, MATURED OR UNMATURED, KNOWN OR
UNKNOWN, FORESEEN OR UNFORESEEN, THEN EXISTING OR THEREAFTER ARISING, IN LAW,
EQUITY OR OTHERWISE THAT ARE BASED IN WHOLE OR PART ON ANY ACT, OMISSION,
TRANSACTION, EVENT OR OTHER OCCURRENCE TAKING PLACE ON OR PRIOR TO THE EFFECTIVE
DATE IN ANY WAY RELATING TO THE DEBTOR, THE REORGANIZED DEBTOR, RGH, THE
DEBTOR'S RESTRUCTURING, RGH'S RESTRUCTURING, THE CHAPTER 11 CASE, THE RGH
CHAPTER 11 CASE, THE PA SETTLEMENT AGREEMENT, THE RGH/RFSC SETTLEMENT TERM
SHEET, THE PBGC STIPULATION, THE SENIOR SECURED CREDIT AGREEMENT OR THE PLAN.
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(b) RELEASES BY HOLDERS OF CLAIMS. EFFECTIVE AS OF THE CONFIRMATION
DATE, BUT SUBJECT TO THE OCCURRENCE OF THE EFFECTIVE DATE, AND EXCEPT AS
OTHERWISE PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW, IN CONSIDERATION FOR THE OBLIGATIONS OF THE
PERSONS SET FORTH BELOW UNDER THE PLAN AND, AS APPLICABLE, THE PA SETTLEMENT
AGREEMENT, THE RGH/RFSC SETTLEMENT TERM SHEET, THE PBGC STIPULATION, AND THE
SENIOR SECURED CREDIT AGREEMENT AND THE CASH, SECURITIES, CONTRACTS, RELEASES
AND OTHER AGREEMENTS OR DOCUMENTS TO BE DELIVERED IN CONNECTION WITH THE PLAN,
EACH HOLDER (AS WELL AS ANY TRUSTEE OR AGENT ON BEHALF OF SUCH HOLDER) OF A
CLAIM AND ANY AFFILIATE OF SUCH HOLDER SHALL BE DEEMED TO HAVE FOREVER WAIVED,
RELEASED AND DISCHARGED (I) THE DEBTOR, (II) RGH, (III) THE REORGANIZED DEBTOR,
(IV) THE BANK COMMITTEE, THE CREDITORS' COMMITTEE AND EACH OF THE BANKS, AND,
SOLELY IN THEIR CAPACITY AS SUCH, ANY OF THEIR CURRENT OR FORMER OFFICERS,
DIRECTORS, SUBSIDIARIES, AFFILIATES, MEMBERS, SHAREHOLDERS, PARTNERS,
REPRESENTATIVES, EMPLOYEES, ATTORNEYS, FINANCIAL ADVISORS, ACCOUNTANTS,
CONSULTANTS AND AGENTS, (V) THE DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTOR,
THE REORGANIZED DEBTOR AND RGH WHO CONTINUE IN SUCH POSITIONS SUBSEQUENT TO THE
EFFECTIVE DATE, (VI) THE FORMER DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTOR
AND RGH, AND (VII) THE CURRENT AND FORMER REPRESENTATIVES, ATTORNEYS, FINANCIAL
ADVISORS, ACCOUNTANTS, CONSULTANTS AND AGENTS OF THE DEBTOR, THE REORGANIZED
DEBTOR AND RGH FROM ANY AND ALL CLAIMS (INCLUDING AVOIDANCE CLAIMS),
OBLIGATIONS, SUITS, JUDGMENTS, DAMAGES, DEMANDS, DEBTS, RIGHTS, CAUSES OF ACTION
AND LIABILITIES, WHETHER FOR TORT, FRAUD, CONTRACT, VIOLATIONS OF FEDERAL OR
STATE SECURITIES LAWS, OR OTHERWISE, WHETHER LIQUIDATED OR UNLIQUIDATED, FIXED
OR CONTINGENT, MATURED OR UNMATURED, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN,
THEN EXISTING OR THEREAFTER ARISING, IN LAW, EQUITY OR OTHERWISE THAT ARE BASED
IN WHOLE OR PART ON ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER OCCURRENCE
TAKING PLACE ON OR PRIOR TO THE EFFECTIVE DATE IN ANY WAY RELATING TO THE
DEBTOR, THE REORGANIZED DEBTOR, RGH, THE DEBTOR'S RESTRUCTURING, RGH'S
RESTRUCTURING, THE CHAPTER 11 CASE, THE RGH CHAPTER 11 CASE, THE PA SETTLEMENT
AGREEMENT, THE RGH/RFSC SETTLEMENT TERM SHEET, THE PBGC STIPULATION, THE SENIOR
SECURED CREDIT AGREEMENT OR THE PLAN; PROVIDED, HOWEVER, THAT ONLY THOSE HOLDERS
OF CLASS 1, 2, 3, 4A AND 4B CLAIMS WHO TIMELY VOTE TO ACCEPT THE PLAN ON THEIR
BALLOTS, OR ARE DEEMED TO ACCEPT THE PLAN, SHALL BE DEEMED TO HAVE GRANTED A
RELEASE TO ANY PERSON IDENTIFIED IN SUBCLAUSES (IV) - (VII) ABOVE PURSUANT TO
THIS SECTION 14.4(B).
(c) LIMITATIONS. NOTWITHSTANDING THE PROVISIONS OF SUBSECTIONS (A) AND
(B) ABOVE, AND ANY OTHER PROVISION IN THE PLAN REGARDING RELEASES:
(i) NOTHING IN THE PLAN SHALL RELEASE (A) THE DIRECTORS, OFFICERS AND
EMPLOYEES OF THE DEBTOR, THE REORGANIZED DEBTOR AND RGH WHO CONTINUE IN
SUCH POSITIONS SUBSEQUENT TO THE EFFECTIVE DATE, (B) THE CURRENT AND FORMER
DIRECTORS, OFFICERS AND EMPLOYEES OF THE DEBTOR AND RGH, OR (C) THE CURRENT
AND FORMER REPRESENTATIVES, ATTORNEYS, FINANCIAL ADVISORS, ACCOUNTANTS,
CONSULTANTS AND AGENTS OF THE DEBTOR, THE REORGANIZED DEBTOR AND RGH, IN
EACH CASE WITH RESPECT TO ANY ACT, OMISSION, TRANSACTION, EVENT OR OTHER
OCCURRENCE TAKING PLACE PRIOR TO THE PETITION DATE, INCLUDING, WITHOUT
LIMITATION, WITH RESPECT TO ANY SUCH CLAIMS IN CONNECTION WITH, OR REFERRED
TO IN, THE RELIANCE D&O ACTION OR ANY OTHER ACTIONS BY THE LIQUIDATOR
AGAINST THE FOREGOING PERSONS; AND
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(ii) NOTHING IN THE PLAN SHALL EFFECT A RELEASE IN FAVOR OF ANY
RELEASED PARTY FROM ANY LIABILITY ARISING UNDER (I) THE IRC, OR ANY STATE,
CITY OR MUNICIPAL TAX CODE, (II) THE ENVIRONMENTAL LAWS OF THE UNITED
STATES OR ANY STATE, CITY OR MUNICIPALITY, OR (III) ANY CRIMINAL LAWS OF
THE UNITED STATES OR ANY STATE, CITY OR MUNICIPALITY; NOR SHALL ANYTHING IN
THE PLAN ENJOIN THE UNITED STATES GOVERNMENT OR ANY STATE, CITY OR
MUNICIPALITY, AS APPLICABLE, FROM BRINGING ANY CLAIM, SUIT, ACTION OR OTHER
PROCEEDING AGAINST ANY RELEASED PARTY FOR ANY LIABILITY ARISING UNDER (I)
THE IRC, OR ANY STATE, CITY OR MUNICIPAL TAX CODE, (II) THE ENVIRONMENTAL
LAWS OF THE UNITED STATES OR ANY STATE, CITY OR MUNICIPALITY, OR (III) ANY
CRIMINAL LAWS OF THE UNITED STATES OR ANY STATE, CITY OR MUNICIPALITY;
(iii) NOTHING IN THE PLAN SHALL EFFECT A RELEASE IN FAVOR OF ANY
RELEASED PARTY (A) FROM ANY LIABILITY ARISING AS A RESULT OF SUCH PARTY'S
WILLFUL MISCONDUCT, GROSS NEGLIGENCE, INTENTIONAL FRAUD, OR BREACH OF
FIDUCIARY DUTY THAT RESULTS IN A PERSONAL PROFIT (OTHER THAN FEES AND
EXPENSES APPROVED BY THE BANKRUPTCY COURT) AT THE EXPENSE OF THE ESTATE,
AND (B) FOR THE KNOWING MISUSE OF CONFIDENTIAL INFORMATION;
(iv) NOTHING IN THE PLAN SHALL LIMIT THE LIABILITY OF THE DEBTOR'S,
RGH'S OR THE COMMITTEES' PROFESSIONALS TO THEIR RESPECTIVE CLIENTS PURSUANT
TO DR 6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY; PROVIDED, HOWEVER,
THAT THIS LIMITATION SHALL NOT IN ANY WAY DEROGATE FROM THE RES JUDICATA OR
COLLATERAL ESTOPPEL EFFECT, IF ANY, OF ANY FINAL ORDER APPROVING ANY FINAL
FEE APPLICATIONS FILED IN THE CHAPTER 11 CASE AND THE RGH CHAPTER 11 CASE;
AND
(v) NOTHING IN THE PLAN SHALL RELEASE (1) ANY PERSON (WHETHER OR NOT
INCORPORATED), OTHER THAN THE DEBTOR, THAT WOULD BE TREATED TOGETHER WITH
THE DEBTOR AS MEMBERS OF A CONTROLLED GROUP AS DEFINED BY SECTION
4001(A)(14) OF ERISA, FROM ANY LIABILITY ARISING UNDER TITLE IV OF ERISA OR
(2) ANY PERSON FROM LIABILITY ARISING AS A RESULT OF SUCH PERSON'S BREACH
OF FIDUCIARY DUTY UNDER ERISA;
PROVIDED, HOWEVER, THAT THIS SECTION 14.4(C) SHALL IN NO WAY AFFECT OR LIMIT THE
DISCHARGE GRANTED TO THE DEBTOR UNDER CHAPTER 11 OF THE BANKRUPTCY CODE AND
PURSUANT TO SECTION 11.4 OF THE PLAN.
14.5 EXCULPATION. NONE OF THE DEBTOR, THE REORGANIZED DEBTOR, RGH, THE
BANK COMMITTEE, THE CREDITORS' COMMITTEE OR THE BANKS, OR ANY OF THEIR CURRENT
OR FORMER OFFICERS, DIRECTORS, SUBSIDIARIES, AFFILIATES, MEMBERS, SHAREHOLDERS,
PARTNERS, REPRESENTATIVES, EMPLOYEES, ATTORNEYS, FINANCIAL ADVISORS,
ACCOUNTANTS, CONSULTANTS AND AGENTS, SHALL HAVE OR INCUR ANY LIABILITY TO ANY
PERSON, INCLUDING, WITHOUT LIMITATION, ANY HOLDER OF A CLAIM OR EQUITY INTEREST
OR ANY OTHER PARTY IN INTEREST, OR ANY OF THEIR RESPECTIVE AGENTS, EMPLOYEES,
MEMBERS, REPRESENTATIVES, FINANCIAL ADVISORS, ATTORNEYS OR AFFILIATES OR ANY OF
THEIR SUCCESSORS OR ASSIGNS, FOR ANY ACT TAKEN OR OMISSION MADE IN GOOD FAITH IN
CONNECTION WITH, RELATING TO OR ARISING OUT OF THE DEBTOR'S RESTRUCTURING, RGH'S
RESTRUCTURING, THE CHAPTER 11 CASE, THE RGH CHAPTER 11 CASE, THE SOLICITATION OF
ACCEPTANCES OF THE PLAN, FILING, NEGOTIATING, PROSECUTING, ADMINISTRATING,
FORMULATING, IMPLEMENTING, CONFIRMING OR CONSUMMATING THE PLAN, THE PA
SETTLEMENT AGREEMENT, THE RGH/RFSC SETTLEMENT AGREEMENT, THE PBGC STIPULATION,
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THE SENIOR SECURED CREDIT AGREEMENT OR THE PROPERTY TO BE DISTRIBUTED UNDER THE
PLAN, INCLUDING ALL PREPETITION ACTIVITIES LEADING TO THE PROMULGATION AND
CONFIRMATION OF THE PLAN, THE DISCLOSURE STATEMENT (INCLUDING ANY INFORMATION
PROVIDED OR STATEMENT MADE IN THE DISCLOSURE STATEMENT OR OMITTED THEREFROM), OR
ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED IN
CONNECTION WITH OR RELATED TO THE PLAN OR THE ADMINISTRATION OF THE DEBTOR, RGH,
THE CHAPTER 11 CASE OR THE RGH CHAPTER 11 CASE; PROVIDED, HOWEVER, THAT
CONSISTENT WITH SECTION 14.4(C) OF THE PLAN, THE FOREGOING SHALL NOT APPLY TO
(I) ANY PREPETITION ACTIVITIES, PREPETITION ACTS OR PREPETITION OMISSIONS OF THE
DEBTOR OR RGH, OR ANY OF THEIR CURRENT OR FORMER OFFICERS, DIRECTORS,
SUBSIDIARIES, AFFILIATES, MEMBERS, SHAREHOLDERS, PARTNERS, REPRESENTATIVES,
EMPLOYEES, ATTORNEYS, FINANCIAL ADVISORS, ACCOUNTANTS, CONSULTANTS AND AGENTS OR
(II) ANY RELEASED PARTY'S (A) WILLFUL MISCONDUCT, GROSS NEGLIGENCE, INTENTIONAL
FRAUD, BREACH OF FIDUCIARY DUTY RESULTING IN A PERSONAL PROFIT (OTHER THAN FEES
AND EXPENSES APPROVED BY THE BANKRUPTCY COURT) AT THE EXPENSE OF THE ESTATE OR
(B) KNOWING MISUSE OF CONFIDENTIAL INFORMATION; AND FURTHER PROVIDED, THAT THE
FOREGOING SHALL NOT BE INTERPRETED OR CONSTRUED TO LIMIT THE LIABILITY OF THE
DEBTOR'S, RGH'S OR THE COMMITTEES' PROFESSIONALS TO THEIR RESPECTIVE CLIENTS
PURSUANT TO DR 6-102 OF THE CODE OF PROFESSIONAL RESPONSIBILITY (PROVIDED,
HOWEVER, THAT THE LIMITATION SET FORTH IN THE FOREGOING PROVISO SHALL NOT IN ANY
WAY DEROGATE FROM THE RES JUDICATA OR COLLATERAL ESTOPPEL EFFECT, IF ANY, OF ANY
FINAL ORDER APPROVING ANY FINAL FEE APPLICATIONS FILED IN THE CHAPTER 11 CASE
AND THE RGH CHAPTER 11 CASE).
14.6 Indemnification of Officers, Directors and Members of the RFSC
Advisory Committee. Indemnification of directors and officers of Reorganized
RFSC and members of the RFSC Advisory Committee shall be provided as set forth
in the Amended and Restated Articles of Incorporation and the Amended and
Restated By-laws.
14.7 Reorganized RFSC Retention of Professionals. Reorganized RFSC may
retain counsel and other professionals solely pursuant to the provisions of
Section 9 of Appendix A of the RGH/RFSC Settlement Term Sheet.
14.8 Post-Effective Date Fees and Expenses. From and after the
Effective Date, the Reorganized Debtor shall, in the ordinary course of business
and without the necessity for any approval by the Bankruptcy Court, pay the
reasonable fees and expenses of professional persons thereafter retained by the
Reorganized Debtor, including those fees and expenses incurred in connection
with the implementation and consummation of the Plan; provided, however, that to
the extent that the Bank Committee renders services in connection with the RGH
Plan, as provided in Section 14.14 of the Plan, any such fees and expenses
incurred in connection therewith, shall be paid out of Available Cash by RGH,
subject to the Professional Compensation Procedures Order and any other order of
the Bankruptcy Court.
14.9 Payment of Statutory Fees. Unless the Office of the United States
Trustee agrees to a different treatment, all fees payable pursuant to Section
1930 of Title 28 of the United States Code, as determined by the Bankruptcy
Court at the Confirmation Hearing, shall be paid by the Reorganized Debtor on
the Effective Date, or as soon as reasonably practicable thereafter, through the
entry of a final closing decree in this case.
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14.10 Amendment or Modification of the Plan. Alterations, amendments or
modifications of or to the Plan may be proposed in writing by the Creditors'
Committee at any time prior to the Confirmation Date; provided that the Plan, as
altered, amended or modified, is consistent with the terms of the RGH/RFSC
Settlement Term Sheet and satisfies the conditions of Sections 1122 and 1123 of
the Bankruptcy Code, and that the Creditor's Committee shall have complied with
Section 1125 of the Bankruptcy Code. The Plan may be altered, amended or
modified by the Creditors' Committee at any time after the Confirmation Date and
before substantial consummation; provided that the Plan, as altered, amended or
modified, is consistent with the terms of the PA Settlement Agreement, the
RGH/RFSC Settlement Term Sheet, the PBGC Stipulation, and the Tax Sharing
Agreement and satisfies the requirements of Sections 1122 and 1123 of the
Bankruptcy Code, and that the Bankruptcy Court, after notice and a hearing,
confirms the Plan, as altered, amended or modified, under Section 1129 of the
Bankruptcy Code and the circumstances warrant such alterations, amendments or
modifications to remedy any defect or omission or reconcile any inconsistencies
in the Plan with respect to the Disclosure Statement or the Confirmation Order,
or such matters as may be necessary to carry out the purposes and effects of the
Plan. A determination by the Bankruptcy Court that the Plan is not confirmable
pursuant to Section 1129 of the Bankruptcy Court shall not limit or affect the
Creditors' Committee's ability to modify the Plan to satisfy the confirmation
requirements of Section 1129 of the Bankruptcy Code. A Holder of a Claim that
has accepted the Plan shall be deemed to have accepted the Plan, as altered,
amended or modified, if the proposed alteration, amendment or modification does
not materially and adversely change the treatment of the Claim of such Holder.
14.11 Severability. In the event that the Bankruptcy Court determines
that any provision in the Plan is invalid, void or unenforceable, such provision
shall be invalid, void or unenforceable with respect to the Holder or Holders of
such Claims or Equity Interests as to which the provision is determined to be
invalid, void or unenforceable. The invalidity, voidness or unenforceability of
any such provision shall in no way limit or affect the enforceability and
operative effect of any other provision of the Plan; provided, however, that in
the event the Bankruptcy Court determines that the exculpation and release
provisions set forth in Sections 14.4 and 14.5 are invalid, void or
unenforceable, the Plan shall not become enforceable and or be given any
operative effect and shall by operation of this provision be deemed void for all
purposes.
14.12 Revocation or Withdrawal of the Plan. The Creditors' Committee
reserves the right to revoke or withdraw the Plan at any time prior to the
Effective Date. If the Creditors' Committee revokes or withdraws the Plan prior
to the Effective Date or if the Confirmation Date or the Effective Date does not
occur, then the Plan, any settlement or compromise embodied in the Plan, the
assumption or rejection of executory contracts or leases effected by the Plan or
any document or agreement executed pursuant to the Plan, shall be deemed null
and void. In such event, nothing contained in the Plan and no acts taken in
preparation for consummation of the Plan shall constitute or be deemed a waiver
or release of any claims by or against the Debtor, the Reorganized Debtor, or
any other Person or Entity, or to prejudice in any manner the rights of Debtor,
the Reorganized Debtor, the Creditors' Committee or any Person or Entity in any
further proceedings involving the Debtor or the Reorganized Debtor, or to
constitute an admission of any sort by the Creditors' Committee, the Debtor, the
Reorganized Debtor, or any other Person.
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14.13 Binding Effect. The Plan shall be binding upon and inure to the
benefit of the Debtor, the Reorganized Debtor, all present and former Holders of
Claims against and Equity Interests in the Debtor, whether or not the Claims or
Equity Interests, as applicable, of such Holders are Impaired under the Plan and
whether or not such Holders have accepted this Plan, and all other parties in
interest and their respective successors and assigns, including RGH.
14.14 Continuation of Bank Committee. The Bank Committee shall not be
dissolved until the later of (i) the Effective Date or (ii) the date upon which
the RGH Plan becomes effective (the "RGH Effective Date") or, in the event the
RGH Chapter 11 Case is converted to a case under Chapter 7 of the Bankruptcy
Code, until the closing of such Chapter 7 case; provided, however, that, if the
Effective Date occurs prior to the RGH Effective Date, after the Effective Date,
with respect to the RGH Chapter 11 Case, the Bank Committee shall continue in
existence solely in a limited capacity, and its duties shall be limited to (i)
reviewing and commenting on documents prepared and/or filed in connection with
the RGH Chapter 11 Case, (ii) participating in the plan confirmation process in
the RGH Chapter 11 Case, (iii) participating in the Claims objection process and
(iv) otherwise being involved with respect to any motion to appoint an examiner
in the RGH Chapter 11 Case or conversion of the RGH Chapter 11 Case to a case
under Chapter 7 of the Bankruptcy Code.
14.15 Notices. All notices, requests and demands to or upon the Debtor,
the Reorganized Debtor, the Bank Committee or the Creditors' Committee with
copies to counsel for each, must be in writing to be effective and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when actually delivered by (a) certified mail, return receipt requested,
(b) hand delivery or (c) overnight delivery or service, or, in the case of
notice by facsimile transmission, when received and telephonically confirmed, at
the following address:
Debtor or Reorganized Debtor:
Reliance Financial Services Corporation
5 Hanover Square, 14th Fl.
New York, NY 10005
Attn: Paul Zeller, Esq.
Telephone: (212) 785-5690
Facsimile: (212) 785-8133
Counsel to the Debtor and Debtor in Possession:
Debevoise & Plimpton LLP
919 Third Avenue
New York, New York 10022
Attn: Steven R. Gross, Esq.
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
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Bank Committee:
White & Case LLP
1155 Avenue of the Americas
New York, New York 10036
Attn: Andrew P. DeNatale, Esq.
Telephone: (212) 819-8200
Facsimile: (212) 354-8113
Creditors' Committee:
Orrick, Herrington & Sutcliffe LLP
666 Fifth Avenue
New York, New York 10103
Attn: Arnold Gulkowitz, Esq.
Telephone: (212) 506-5000
Facsimile: (212) 506-5151
RGH:
Reliance Group Holdings, Inc.
5 Hanover Square, 14th Fl.
New York, NY 10005
Attn: Paul Zeller, Esq.
Telephone: (212) 785-5690
Facsimile: (212) 785-8133
14.16 GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE BANKRUPTCY CODE, THE
BANKRUPTCY RULES OR OTHER FEDERAL LAW IS APPLICABLE, OR TO THE EXTENT THAT AN
EXHIBIT OR SCHEDULE TO THE PLAN, OR THE PLAN APPENDIX OR PLAN SUPPLEMENT PROVIDE
OTHERWISE, THE RIGHTS AND OBLIGATIONS ARISING UNDER THE PLAN, ANY AGREEMENTS,
DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION WITH THE PLAN, AND ALL
CORPORATE GOVERNANCE MATTERS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH JURISDICTION.
14.17 Withholding and Reporting Requirements. In connection with the
consummation of the Plan, and all instruments issued in connection therewith and
distributions made pursuant thereto, the Debtor or Reorganized Debtor, as the
case may be, shall comply with all withholding and reporting requirements
imposed by any federal, state, local or foreign taxing authority, including
filing any required information returns with the Internal Revenue Service and
providing any required statements in connection therewith to the recipients of
any distribution or effecting any withholding and depositing all moneys so
withheld as required by law. All distributions shall be subject to such
withholding and reporting requirements and, with respect to any Holder of an
Allowed Claim from whom a tax identification number, certified tax
identification number or other tax information required by law to avoid
withholding has not been received by the Reorganized Debtor within thirty (30)
days from the date a request for such information is made, the Reorganized
Debtor may, at its option, withhold the amount required from the property to be
distributed and distribute the balance to such Holder of an Allowed Claim or
decline to make such distribution until the information is received.
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14.18 Plan Appendix. No later than ten (10) days after the date first
scheduled for the hearing to approve the Disclosure Statement, the Creditors'
Committee shall file with the Bankruptcy Court the Plan Appendix, which shall
include the following documents: (i) the PA Settlement Agreement, (ii) the
RGH/RFSC Settlement Term Sheet, (iii) the Senior Secured Credit Agreement, (iv)
the Schedule of Tax Determinations, (v) the PBGC Stipulation, and (vi) the Order
approving the Tax Determinations.
14.19 Plan Supplement. No later than fourteen (14) days prior to the
date first scheduled for the Confirmation Hearing, the Creditors' Committee
shall file with the Bankruptcy Court in the Plan Supplement such agreements and
other documents as may be necessary or appropriate to effectuate and further
evidence the terms and conditions of the Plan. Such documents shall include (i)
the Amended and Restated Articles of Incorporation, (ii) the Amended and
Restated By-laws, (iii) a specimen of the New RFSC Common Stock, (iv) the
name(s) of the member(s) of the Board, (v) the names of the members of the RFSC
Advisory Committee, (vi) the Tax Sharing Agreement, (vii) the Employment
Agreement and (viii) the Schedule of contracts that are not rejected under
Section 8.1. Upon the filing of the Plan Supplement with the Bankruptcy Court,
copies of the Plan Supplement may be inspected in the Office of the Clerk of the
Bankruptcy Court during normal court hours. Holders of Claims against or Equity
Interests in the Debtor may obtain a copy of the Plan Supplement upon written
request to counsel for the Creditors' Committee in accordance with Section
14.15.
14.20 Allocation of Plan Distributions. All Distributions in respect of
Claims will be allocated first to the original principal amount of such Claims
(as determined for U.S. federal income tax purposes), with any excess allocated
to any remaining amounts due with respect to such Claims.
14.21 Time of Distributions. Subject to Section 9.9 of the Plan and
except as otherwise provided herein or ordered by the Bankruptcy Court,
Distributions under the Plan on account of Allowed Claims shall be made on the
later to occur of (a) the Effective Date (or as soon thereafter as practicable)
or (b) when such Claim becomes an Allowed Claim, or as otherwise provided by
this Plan.
14.22 Filing of Additional Documents. On or before substantial
consummation of the Plan, the Creditors' Committee shall file with the
Bankruptcy Court such agreements and other documents as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan.
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14.23 No Waiver or Estoppel. Each Holder of a Claim or Equity Interest
shall be deemed to have waived any right to assert that its Claim or Equity
Interest should be Allowed in a certain amount, in a certain priority, secured
or not subordinated by virtue of an agreement made with the Bank Committee and
or/its counsel, the Creditors' Committee and/or its counsel, the Debtor and/or
its counsel or any other party, if such agreement was not disclosed in the Plan,
the Disclosure Statement or papers filed with the Bankruptcy Court.
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CONFIRMATION REQUEST
The Creditors' Committee hereby requests confirmation of the Plan
pursuant to Section 1129(a) or Section 1129(b) of the Bankruptcy Code.
Dated: December 7, 2004
OFFICIAL UNSECURED CREDITORS
COMMITTEE OF RELIANCE FINANCIAL
SERVICES CORPORATION
By: /s/ Eric R. Johnson
-------------------------------------------
Name: Eric R. Johnson
Title: Chair, Unsecured Creditors' Committee
Submitted by:
ORRICK, HERRINGTON & SUTCLIFFE LLP
Attorneys for the Official Unsecured Creditors' Committee
By: /s/ Arnold Gulkowitz
---------------------------------
Arnold Gulkowitz (AG-5683)
Thomas L. Kent (TK-2935)
Brian E. Goldberg (BG-8052)
666 Fifth Avenue
New York, New York 10103
Telephone: (212) 506-5000
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