Attached files
EXHIBIT 2.1
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
In Re: ) Case No. 09-25416
)
ISCO INTERNATIONAL, INC. ) Honorable John H. Squires
)
Debtor and Debtor-in-Possession. ) Chapter 11
FIRST AMENDED PLAN OF REORGANIZATION
------------------------------------
ISCO INTERNATIONAL, INC.'S
FIRST AMENDED PLAN OF REORGANIZATION, DATED NOVEMBER 30, 2009
-------------------------------------------------------------
ARTICLE I
SUMMARY
----------
This Plan of Reorganization (the "Plan") under chapter 11 of the Bankruptcy
Code proposes to pay creditors of ISCO INTERNATIONAL, INC., a Delaware
corporation (the "Debtor") from loan proceeds and the recovery of funds
from the pursuit of contractual claims held by the Debtor against others.
This Plan provides for two (2) classes of secured claims; one (1) class
of general unsecured claims; one (1) class of subordinated claims; and
one (1) class of equity holders. General unsecured creditors holding
allowed claims will receive its pro-rata share of $25,000. The total
amount of unsecured debt scheduled by the Debtor is $10,352,481.
However, $10,015,910 is disputed. If the disputed debt is not included,
the unsecured debt is $336,571. Accordingly, the projected dividend
to unsecured creditors ranges from .24148% to 7.42785% of allowed claims.
This Plan also provides for the payment of administrative and priority
claims.
All creditors and equity security holders should refer to Articles III
through VI of this Plan for information regarding the precise treatment of
their claim. A Disclosure Statement that provides more detailed information
regarding this Plan and the rights of creditors and equity security holders
has been circulated with this Plan. Your rights may be affected. You
should read these papers carefully and discuss them with your attorney,
if you have one. (If you do not have an attorney, you may wish to consult
one.)
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
--------------------------------------
2.01 Administrative Expense Claims. All Claims constituting a cost or
expense of administration allowed under sections 503(b) and 507(a)(2) of the
Bankruptcy Code. Such Claims include all actual and necessary costs and
expenses of preserving the estate of the Debtor, all actual and necessary
costs and expenses of operating the business of the Debtor in
Possession, any indebtedness or obligations incurred or assumed by
1
the Debtor in Possession in connection with the conduct of its business,
all cure amounts owed in respect of leases and contracts assumed by the
Debtor in Possession, all compensation and reimbursement of expenses to
the extent Allowed by the Bankruptcy Court under section 330 or 503 of
the Bankruptcy Code, and any fees or charges assessed against the
estate of the Debtor under section 1930 of chapter 123 of title 28 of
the United States Code.
2.02 Compensation and Reimbursement Claims. All Administrative
Expense Claims for the compensation of professionals and reimbursement of
expenses incurred by such professionals pursuant to sections 503(b)(2),
503(b)(3), 503(b)(4) and 503(b)(5) of the Bankruptcy Code. All payments
to professionals for such Claims will be made in accordance with the
procedures established by the Bankruptcy Code, the Bankruptcy Rules
and the Bankruptcy Court relating to the payment of interim and final
compensation for services rendered and reimbursement of expenses.
The Bankruptcy Court will review and determine all applications for
compensation for services rendered and reimbursement of expenses.
Each holder of a such a Claim shall (a) file its final application for
the allowance of compensation for services rendered and reimbursement
of expenses incurred by no later than the date that is 60 days after
the Effective Date or such other date as may be fixed by the Bankruptcy
Court and (b) if granted such an award by the Bankruptcy Court, be paid
in full in such amounts as are Allowed by the Bankruptcy Court
(i) on the date such Claim becomes an Allowed Claim, or as soon
thereafter as is practicable or (ii) upon such other terms as may
be mutually agreed upon between such holder of a such Claim and the
Reorganized Debtor. Professionals may obtain the interim payment of
professional fees pending the filing of a final fee application.
2.03 Class A - First Bank Claims. All Claims of First Bank,
a Missouri state bank, with respect to the First Bank Letter of Credit.
2.04 Class B - Senior Lender Claims-Alexander Finance LP and
Manchester Securities Corporation. All Senior Lender Claims are
deemed Allowed Claims in the aggregate amount of not less than
$15,000,000.00, plus interest, fees and expenses thereon, and the
Senior Lender Claims shall not be subject to setoff, counterclaim,
recoupment, reduction or offset.
2.05 Class C - General Unsecured Claims. All Claims other than
First Bank Claims, Senior Lender Claims, Administrative Expense Claims,
and Subordinated Claims. General Unsecured Claims include, without
limitation, (a) Claims arising from the rejection of leases of
nonresidential real property and executory
2
contracts, (b) Claims relating to personal injury, property damage,
products liability, discrimination, employment or any other similar
litigation Claims asserted against the Debtor (including the TAA
Counterclaim), and (c) Claims, if any, of the Debtor's vendors,
suppliers and service providers. The Debtor estimates that the
total amount of Allowed General Unsecured Claims will be between
$500,000.00 and $12,000,000.00.
2.06 Class D - Subordinated Claims. The Subordinated Claims
consist of any and all Claims arising out of, relating to or in
connection with: (a) the purchase, ownership, sale or other decision
or action made or taken, or declined, or failed or refused to be
made or taken, or otherwise foregone, concerning or relating to
the Equity Interests; (b) any other Claims and Causes of Action
arising out of, relating to, or in connection with the Equity
Interests that would be subject to and subordinated under
section 510(b) of the Bankruptcy Code; and (c) indemnification,
reimbursement or contribution Claims against the Debtor with
respect to any of the foregoing.
2.07 Class E - Equity Interests. All shares of common stock
or other instruments 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.
ARTICLE III
TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS
------------------------------------------
3.01 Unclassified Claims. Under section 1123(a)(1) of the
Bankruptcy Code, administrative expense claims are not in classes.
3.02 Administrative Expense Claims. Except to the extent that
any entity entitled to payment of any Allowed Administrative
Expense Claim agrees to a less favorable treatment, each holder
of an Allowed Administrative Expense Claim shall receive Cash in
an amount equal to such Allowed Administrative Expense Claim on
the later of the Effective Date and the date such Administrative
Expense Claim becomes an Allowed Administrative Expense Claim,
or as soon thereafter as is practicable; provided, however, that
Allowed Administrative Expense Claims representing liabilities
incurred in the ordinary course of business by the Debtor 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
3
evidencing or other documents relating to such transactions.
ARTICLE IV
TREATMENT OF CLAIMS AND INTERESTS UNDER THIS PLAN
-------------------------------------------------
4.01 Treatment of Claims and Interests. Claims and interests shall
be treated as follows under this Plan:
Class Impairment Treatment
--------------------------------------------------------------------
Class A - First Unimpaired Except to the extent that a
holder of such a Claim has been
paid by the Debtor prior to the
Effective Date or agrees to a
different treatment, at the
option of the Reorganized
Debtor, each holder of such
a Claim shall be (a) reinstated
and rendered unimpaired in
accordance with section 1124(2)
of the Bankruptcy Code, (b)
receive Cash in an amount equal
to such Claim, including any
interest on such Claim required
to be paid pursuant to section
506(b) of the Bankruptcy Code,
on the later of the Effective
Date and the date such Claim
becomes an Allowed Claim, or
as soon thereafter as is
practicable or (c) receive
the Collateral securing its
Claim and any interest on such
Claim required to be paid
pursuant to section 506(b)
of the Bankruptcy Code, on the
later of the Effective Date
and the date such Claim becomes
an Allowed Claim, or as soon
thereafter as is practicable.
The Debtor estimates that the
total amount of such Claim
is $85,000.00.
----------------------------------------------------------------------
Class B - Senior Impaired On the Effective Date, all of
Lender Claims of the Senior Lender Claims
Alexander Finance representing accrued but unpaid
LP and Manchester interest and late charges shall
Securities Corporation be deemed cancelled and each
holder of a Senior Lender Claim
shall receive its Ratable
Proportion of (i) 100% of the
shares of the New Common Stock;
(ii) its Ratable Proportion of
100% of the Net Cash Proceeds
of the TAA Litigation; and
(iii) its Ratable Proportion
of any excess cash available
on the Effective Date.
In the event that the Debtor or
the Reorganized Debtor receives
net cash proceeds from the TAA
Litigation at any time before
or after the Effective Date,
Debtor or Reorganized Debtor
shall pay in Cash to the holders
of Senior Lender Claims in an
amount equal to 100% of the
Net Cash Proceeds. Distributions
will be made on the Effective
Date, in the event that the Net
Cash Proceeds are received on
or prior to the Effective Date,
and no later than 10 Business
Days after such Net Cash
Proceeds are received by the
Reorganized Debtor in the event
that the Net Cash Proceeds are
received after the Effective
Date. The right of holders
of Senior Lender Claims to
receive Cash payments after
the Effective Date on account
of the TAA Litigation is
referred to herein as the
"Class B Contingent Payment
Right." Any amounts received by
the holders of the Senior
Lender Claims shall constitute
a distribution to such
4
holders on account of their
Senior Lender Claims.
In addition, each holder of
Senior Lender Claims shall be
entitled to retain all amounts
paid to it or on its behalf
as adequate protection or
otherwise.
In exchange for the treatment
of the Senior Lender Claims
as provided for in this Plan,
upon the Effective Date, the
Senior Lenders have agreed to
cause ISCO LLC to transfer
all or substantially all of
the Operating Assets back to
the Reorganized Debtor in order
to allow the Reorganized Debtor
to recommence its operations of
the business the Debtor operated
before it temporarily ceased
operations after the UCC
Sale (as defined in the
Disclosure Statement).
----------------------------------------------------------------------------
Class C - General Impaired Each holder of an Allowed General
Unsecured Claims Unsecured Claim shall receive its
Ratable Portion of $25,000.00 Cash.
----------------------------------------------------------------------------
Class D - Impaired Pursuant to section 510(b) of the
Subordinated Bankruptcy Code, the holders of the
Claims Subordinated Claims in Class D shall
not receive any distributions on
account of such Claims and shall
be enjoined from pursuing any
Litigation Claims against any of
the Debtor, the Debtor in
Possession or the Reorganized
Debtor.
-----------------------------------------------------------------------------
Class E - Equity Impaired Holders of Equity Interests shall
Interests not receive any distributions on
account of such Equity Interests.
On the Effective Date, all
Equity Interests shall be
extinguished.
-----------------------------------------------------------------------------
ARTICLE V
ALLOWANCE AND DISALLOWANCE OF CLAIMS
------------------------------------
5.01 Disputed Claim. A disputed claim is a claim that has not been
allowed or disallowed by a final non-appealable order, and as to
which either: (i) a proof of claim has been filed or deemed filed,
and the Debtor or another party in interest has filed an objection;
or (ii) no proof of claim has been filed, and the Debtor has
scheduled such claim as disputed, contingent, or unliquidated.
Under this Plan, the claims of TAA against the Debtor are
disputed claims.
5.02 Delay of Distribution on a Disputed Claim. No distribution
will be made on account of a disputed claim unless such claim is
allowed by a final non-appealable order. To the extent that a Disputed
Administrative Expense or Disputed Claim is allowed after the Effective
Date, the holder thereof will receive the distribution to which the
Plan entitles such holder in respect of such Allowed Administrative
Expense or
5
Claim. Except as otherwise ordered by the Court or provided in the
Plan, each distribution to be made on a specific date will be deemed
to have been made on such date if actually made on the later of such
date and the date on which such administrative expense claim or
equity interest is allowed, or as soon thereafter as practicable.
On the Distribution Date and each subsequent distribution date,
the Reorganized Debtor will reserve from the distributions to be
made on such dates to the holders of allowed General Unsecured
Claims an amount equal to 100% of the Cash distributions to which
holders of disputed General Unsecured Claims would be entitled
under the Plan (including the portion of the Cash distribution
that relates to Disputed Claims) as of such dates as if such
disputed General Unsecured Claims were Allowed Claims in their
Disputed Claim amounts.
5.03 Settlement of Disputed Claims. The Debtor will have the
power and authority to settle and compromise a disputed claim with
court approval and compliance with Rule 9019 of the Federal Rules
of Bankruptcy Procedure.
5.04 Distributions With Respect to Holders of Class C Claims.
(a) Property Held by the Reorganized Debtor.
The Cash that relates to Disputed Class C Claims will be held by
Reorganized Debtor. Amounts so held will then be distributed to
holders of such Claims pursuant to the Plan as disputed General
Unsecured Claims are resolved. All amounts held for Disputed Class
C Claims will be held in a segregated, non-interest bearing
account in Reorganized Debtor's name or held by Reorganized
Debtor's counsel.
(b) Distributions Upon Allowance of Disputed
Class C Claims. The holder of a Disputed Class C Claim that
becomes an Allowed Claim subsequent to the Distribution Date
will receive a distribution of Cash that would have been made
to such holder under the Plan if the Disputed Class C Claim
had been an Allowed Claim on or prior to the Distribution
Date, without any post-Distribution Date interest on such
Claims, on the subsequent distribution date that follows
the fiscal quarter during which such Disputed Class C
Claim becomes an Allowed Claim.
ARTICLE VI
PROVISIONS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES
-------------------------------------------------------
6.01 Assumed Executory Contracts and Unexpired Leases. The Debtor
will be conclusively deemed to have rejected all executory contracts
and/or unexpired leases not expressly assumed, either on a date
elected by the Debtor in a written rejection if before the date
of the order confirming this Plan, otherwise
6
upon the date of the entry of the order confirming this Plan.
A proof of a claim arising from the rejection of an executory
contract or unexpired lease under this section must be filed
no later than thirty (30) days after the date of the order
confirming this Plan, or thirty (30) days after the
rejection date, whichever is later.
ARTICLE VII
MEANS OF EFFECTUATING THIS PLAN
-------------------------------
The Debtor shall effectuate this Plan through (a) an unsecured
debtor in possession loan from Alexander Finance, LP and (b) the
agreement of the Senior Lenders to cause ISCO LLC to transfer
all or substantially all of the Operating Assets back to the
Reorganized Debtor in order to allow the Reorganized Debtor to
recommence its operations of the business the Debtor operated
before it temporarily ceased operations after the UCC Sale
(as defined in the Disclosure Statement).
ARTICLE VIII
GENERAL PROVISIONS
------------------
7.01 Definitions and Rules of Construction. The definitions
and rules of construction set forth in sections 101 and 102 of the
Bankruptcy Code shall apply when terms defined or construed
in the Bankruptcy Code are used in this Plan, and they are
supplemented by the following definitions:
Administrative Expense Claim Any expense relating to the
administration of the chapter
11 case, including (i) actual
and necessary costs and expenses
of preserving the Debtor's estate
and operating the Debtor's
businesses, (ii) any indebtedness
or obligations incurred or assumed
during the chapter 11 case, (iii)
allowances for compensation and
reimbursement of expenses to the
extent allowed by the Bankruptcy
Court, and (iv) certain statutory
fees chargeable against the
Debtor's estate.
-------------------------------------------------------------------
Bankruptcy Code Title 11 of the United States Code.
-------------------------------------------------------------------
Bankruptcy Court The United States Bankruptcy Court
for the Northern District of Illinois.
-------------------------------------------------------------------
Business Day Any day other than a Saturday, a
Sunday, or any other day on which
banking institutions in Chicago,
Illinois are required or
authorized to close by law or
executive order.
-------------------------------------------------------------------
Causes of Action Any right to bring a claim or action,
whether choate or inchoate,
asserted or unasserted, whether
arising at law or in equity,
or otherwise.
-------------------------------------------------------------------
7
Debtor ISCO INTERNATIONAL, INC., a
Delaware corporation
--------------------------------------------------------------------
Disclosure Statement Disclosure Statement together with
any annexed exhibits or schedules.
--------------------------------------------------------------------
Effective Date The first Business Day following
the entry of the order of
confirmation of this Plan.
--------------------------------------------------------------------
First Bank Claim The Claim of First Bank, a Missouri
state bank, (or its successors)
under the First Bank Letter of
Credit.
--------------------------------------------------------------------
First Bank Letter of Credit Letter of Credit No. DSSL91000522
dated 10/1/2008 issued by First
Bank in favor of D&K Elk Grove
Industrial II LLC and Draper
& Kramer, in the face amount
of $102,400, as amended.
--------------------------------------------------------------------
General Unsecured Claim Any prepetition Claim against the
Debtor that is not a First Bank
Claim, Administrative Expense Claim,
Subordinated Claim, Senior Lender
Claim, or Equity Interest.
---------------------------------------------------------------------
ISCO LLC ISCO INTERNATIONAL, LLC, an Illinois
limited liability company.
---------------------------------------------------------------------
Net Cash Proceeds The amount recovered from the TAA
Litigation less the costs of pursuing
said litigation and collecting
said amounts.
---------------------------------------------------------------------
New Common Stock The new common stock of Reorganized
Debtor.
---------------------------------------------------------------------
Petition Date July 14, 2009
---------------------------------------------------------------------
Plan This Plan of Reorganization Under
Chapter 11 or any modified plan.
---------------------------------------------------------------------
Ratable Proportion The ratio (expressed as a
percentage) of the amount of an
Allowed Claim in a Class to the
aggregate amount of all Allowed
Claims in the same Class.
---------------------------------------------------------------------
Reorganized Debtor The Debtor, and any successor thereto
by merger, consolidation or
otherwise, on and after the
Effective Date.
----------------------------------------------------------------------
Senior Lender Notes The promissory notes issued by the
Debtor to the Senior Lenders, together
with any and all instruments relating
thereto, as amended, supplemented,
or modified from time to time.
-----------------------------------------------------------------------
Senior Lender Claim of All Claims of the Senior Lenders against
Alexander Finance LP and the Debtor arising under the Senior
Manchester Securities Lender Notes.
Corporation
-----------------------------------------------------------------------
Senior Lenders The agents and lenders that are from
time to time holders of the Senior
Lender Notes.
-----------------------------------------------------------------------
Subordinated Claims Any and all Claims arising out of,
relating to, or in connection with:
(a) the purchase, ownership, sale or
other decision or action made or taken,
or declined, or failed or refused to
be made or taken, or otherwise foregone,
concerning or relating to the Equity
Interests;
8
(b) the facts, transactions, events,
occurrences, acts, representations,
disclosures, statements, omissions or
failures to act that were alleged or
could have been alleged in any pending
litigation asserted against the Debtor,
whether asserted individually or on
behalf of a class of plaintiffs, that
generally arise from allegations of
alleged acts or omissions of the Debtor
or any other persons or entities prior
to the Petition Date with respect to
or concerning the Equity Interests,
or the purchase, sale or ownership
thereof, (c) any other Claims and
Causes of Action arising out of,
relating to, or in connection with
the Equity Interests that would be
subject to and subordinated under
section 510(b) of the Bankruptcy Code;
and (d) indemnification, reimbursement
or contribution Claims against the
Debtor with respect to any of the
foregoing.
------------------------------------------------------------------------
TAA Agreement Stock Purchase Agreement dated December
5, 2008 between the Debtor and TAA
Group, Inc.
------------------------------------------------------------------------
TAA Counterclaim The counterclaim filed by TAA Group,
Inc. against the Debtor in the
TAA Litigation.
------------------------------------------------------------------------
TAA Litigation The lawsuit filed in the Circuit Court
of Cook County, Illinois captioned as
ISCO INTERNATIONAL, INC. V. TAA GROUP,
INC. and any other suit or suits
arising out of the same set of facts
or the relationship between the Debtor
and TAA Group, Inc.
------------------------------------------------------------------------
7.02. Amendment or Modification of this Plan
(a) Plan Modifications. This Plan may be amended,
modified, or supplemented by the Debtor, with the consent of the Senior
Lenders, in the manner provided for by Section 1127 of the Bankruptcy
Code or as otherwise permitted by law without additional disclosure
pursuant to Section 1125 of the Bankruptcy Code, except as the
Bankruptcy Court may otherwise direct. In addition, after the
Confirmation Date, so long as such action does not materially
adversely affect the treatment of holders of Claims or Equity
Interests under this Plan (or, in the case of the Senior Lender
Claims, does not affect the treatment for holders of such Claims),
the Debtor may institute proceedings in the Bankruptcy Court to
remedy any defect or omission or reconcile any inconsistencies in
this Plan or the Confirmation Order, with respect to such matters
as may be necessary to carry out the purposes and effects of
this Plan.
(b) Other Amendments. Prior to the Effective
Date, the Debtor may make appropriate technical adjustments and
modifications to this Plan without further order or approval
of the Bankruptcy Court, provided that such technical adjustments
and modifications do not adversely affect in a material way
the treatment of holders of Claims or Equity Interests.
9
7.03. Limited Releases. As of the Effective Date, the Debtor
and the Debtor in Possession release all of the Releasees from any
and all Causes of Action held, assertable on behalf of or derivative
from the Debtor or the Debtor in Possession, in any way relating to
the Debtor, the Debtor in Possession, the Chapter 11 Case, this
Plan and the ownership, management and operation of the Debtor.
Releasees means all present and former officers and directors of
the Debtor who were directors and/or officers, respectively, on
or after the Petition Date, and any other Persons who serve or
served as members of management of the Debtor on or after the
Petition Date, all present and former Senior Lenders and debtor
in possession lenders (and known loan participants), any of the
respective Affiliates of each of these parties in interest, all
present and former officers and directors and other Persons
who serve or served as members of the management of any present
or former Senior Lender or debtor in possession lenders (and
their respective Affiliates), and all advisors, consultants or
professionals of or to the Debtor, the Senior Lenders, the Senior
Lenders and debtor in possession lenders (and their respective
Affiliates). The foregoing shall not operate as a waiver of or
release from any Causes of Action arising out of any express
contractual obligation owing by any former director, officer
or employee to the Debtor or any reimbursement obligation of
any former director, officer or employee with respect to a loan
or advance made by the Debtor to such former director, officer
or employee and is not a waiver of or release for any attorneys
retained in connection with this Chapter 11 Case from Claims
by their respective clients. Nothing contained herein shall
effect a release in favor of any person other than the Debtor
with respect to any Causes of Action based on willful
misconduct, or gross negligence.
7.04. Cancellation of Existing Securities and Agreements.
On the Effective Date, the promissory notes, share certificates,
bonds and all other instruments or documents evidencing any
Claim or Equity Interest, other than the First Bank Claim
that is reinstated and rendered unimpaired pursuant to this
Plan, shall be deemed cancelled without further act or action
under any applicable agreement, law, regulation, order or rule,
and, except as otherwise set forth in this Plan, the obligations
of the Debtor under the agreements, indentures and certificates
of designations governing such Claims and Equity Interests, as
the case may be, shall be discharged. Except as expressly
provided for herein, holders of promissory notes, share
certificates, bonds and any and all other instruments or
documents evidencing any Claim or Equity Interest shall not
be required to surrender such instruments pursuant to this Plan.
10
7.05. Revocation or Withdrawal of this Plan. Subject to the
approval of the Senior Lenders, the Debtor reserves the right
to revoke or withdraw this Plan prior to the Confirmation Date.
If the Debtor revokes or withdraws this Plan prior to the
Confirmation Date, then this Plan shall be deemed null and
void. In such event, nothing contained in this Plan shall
constitute or be deemed a waiver or release of any Claims
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.
7.06. Claims Preserved. Except as otherwise provided
herein or in a final order entered in this Chapter 11
Case, a Litigation Trust or similarly named entity shall
be established for the purpose of retaining any and all
avoidance claims accruing to the Debtor under sections
502(d), 544, 545, 547, 548, 549, 550 and 551 of the
Bankruptcy Code and to prosecute such claims at the
discretion of the Litigation Trust or similarly named
entity.
7.07. Effectuating Documents and Further Transactions.
The Debtor and the Reorganized Debtor are authorized to
execute, deliver, file or record such contracts,
instruments, releases, indentures and other agreements
or documents and take such actions as may be necessary
or appropriate to effectuate and further evidence the
terms and conditions of this Plan and any securities
issued pursuant to this Plan.
7.08. Corporate Action. On the Effective Date, all
matters provided for under this Plan that would otherwise
require approval of the stockholders or directors of the
Debtor or the Reorganized Debtor, including, without
limitation, (a) the authorization to issue or cause to
be issued New Common Stock, (b) the authorization and
effectiveness of the Reorganized Debtor's Certificate
of Incorporation, the Reorganized Debtor's By-laws,
and (c) the election or appointment, as the case may
be, of directors and officers of the Reorganized
Debtor pursuant to this Plan, shall be deemed to have
occurred and shall be in effect from and after the
Effective Date pursuant to the applicable general
corporation or other law of the state in which
Reorganized Debtor is formed and established,
without any requirement of further action by the
stockholders or directors of the Debtor or the
Reorganized Debtor.
7.09. Exculpation. Neither the Debtor, the
Reorganized Debtor, all present and former holders
of the Senior Lender Claims (or their known
participants), all present and former debtor in
possession lenders (or their known loan participants),
Senior Lenders, nor any of the respective Affiliates
of each of those parties in interest, members, present
or former officers, directors, employees, agents or
professionals shall have or
11
incur any liability to any holder of any Claim or Equity
Interest for any act or omission in connection with,
related to, or arising out of, the Chapter 11 Case,
negotiations regarding or concerning this Plan, the
confirmation of this Plan, the consummation of this
Plan or the administration of this Plan or property to
be distributed under this Plan, except for willful
misconduct or gross negligence. The Debtor, the Reorganized
Debtor, all present and former holders of the Senior Lender
Claims (or their known participants), all present and
former debtor in possession lenders (or their known loan
participants), or any of the respective Affiliates of
each of those parties in interest, and each of their
respective members, officers, directors, employees, advisors,
professionals and agents shall be entitled to rely upon
the advice of counsel with respect to their duties and
responsibilities under this Plan.
7.10. Retention of Jurisdiction. The Bankruptcy Court
shall have exclusive jurisdiction of all matters arising
out of, and related to, the Chapter 11 Case and this 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
applications for the assumption or rejection of executory
contracts or unexpired leases and the allowance of Claims
resulting therefrom.
(b) To determine any motion, adversary
proceeding, application, contested matter, and other
litigated matter pending on the Confirmation Date.
(c) To ensure that distributions
to holders of Allowed Claims are accomplished as
provided herein.
(d) To consider Claims or the
allowance, classification, priority, compromise,
estimation, or payment of any Claim, Administrative
Expense Claim, or Equity Interest.
(e) To hear and determine all
actions commenced by the Debtor pursuant to sections
505, 542, 543, 544, 545, 547, 548, 549, 550, and 553 of
the Bankruptcy Code, collection matters related thereto,
and settlements thereof.
(f) To enter, implement, or enforce
such orders as may be appropriate in the event the
Confirmation Order is for any reason stayed, reversed,
revoked, modified, or vacated.
(g) To issue injunctions, enter and
implement other orders and take such other actions as
may be necessary or appropriate to restrain interference
by any person with the consummation, implementation, or
enforcement of this Plan, the Confirmation Order, or
any other order of the Bankruptcy Court.
12
(h) To hear and determine any application
to modify this Plan in accordance with section 1127 of the
Bankruptcy Code, to remedy any defect or omission or
reconcile any inconsistency in this Plan, the Disclosure
Statement, or any order of the Bankruptcy Court, including
the Confirmation Order, in such a manner as may be necessary
to carry out the purposes and effects thereof.
(i) To hear and determine all
applications of retained professionals under sections
330, 331, and 503(b) of the Bankruptcy Code for awards
of compensation for services rendered and reimbursement
of expenses incurred prior to the Confirmation Date.
(j) To hear and determine disputes
arising in connection with the interpretation,
implementation, or enforcement of this Plan, the
Confirmation Order, any transactions or payments contemplated
hereby or any agreement, instrument, or other document
governing or relating to any of the foregoing.
(k) To take any action and issue such
orders as may be necessary to construe, enforce, implement,
execute, and consummate this Plan or to maintain the
integrity of this Plan following consummation.
(l) To determine such other matters and
for such other purposes as may be provided in the
Confirmation Order.
(m) To hear and determine matters
concerning state, local, and federal taxes in accordance
with sections 346, 505, and 1146 of the Bankruptcy Code.
(n) To hear and determine any other
matters related hereto and not inconsistent with the
Bankruptcy Code and title 28 of the United States Code.
(o) To enter a final decree
closing the Chapter 11 Case.
(p) To recover all assets of the
Debtor and property of the Debtor's estate,
wherever located.
(q) To resolve any Disputed Claims.
(r) To determine the scope of any
discharge of Debtor under this Plan or the Bankruptcy Code.
7.11. Exemption from Transfer Taxes. Pursuant to section
1146(a) of the Bankruptcy Code, the issuance, transfer or
exchange of notes or issuance of debt or equity securities
under this Plan, the creation of any mortgage, deed of
trust or other security interest, the making or
assignment of any lease or sublease,
13
or the making or delivery of any deed or other instrument
of transfer under, in furtherance of, or in connection with
this Plan, including, without limitation, any merger
agreements or agreements of consolidation, deeds, bills of
sale or assignments executed in connection with any of the
transactions contemplated under this Plan, shall not be
subject to any stamp, real estate transfer, mortgage recording,
sales or other similar tax. All sale transactions consummated
by the Debtor and approved by the Bankruptcy Court on and after
the Petition Date, including, without limitation, the sales,
if any, by the Debtor of owned property or assets pursuant to
section 363(b) of the Bankruptcy Code and 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, shall be deemed to have been
made under, in furtherance of, or in connection with this
Plan and, therefore, shall not be subject to any stamp,
real estate transfer, mortgage recording, sales or other
similar tax.
7.12. Post-Effective Date Fees and Expenses. From and
after the Effective Date, 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 incurred by Reorganized Debtor,
including, without limitation, those fees and expenses
incurred in connection with the implementation and
consummation of this Plan.
7.13. Payment of Statutory Fees. All fees payable
pursuant to section 1930 of title 28 of the United States
Code shall be paid on the Effective Date and shall
continue to accrue and be paid until the case is closed.
7.14 Severability. If any provision in this Plan is
determined to be unenforceable, the determination will
in no way limit or affect the enforceability and
operative effect of any other provision of this Plan.
7.15 Binding Effect. The rights and obligations of
any entity named or referred to in this Plan will be
binding upon, and will inure to the benefit of the
successors or assigns of such entity.
7.16 Captions. The headings contained in this Plan
are for convenience of reference only and do not
affect the meaning or interpretation of this Plan.
7.17 Controlling Effect. Unless a rule of law or
procedure is supplied by federal law (including the
Code or the Federal Rules of Bankruptcy Procedure),
the laws of the State of Illinois govern this Plan
and any agreements, documents, and instruments
executed in connection with this Plan, except as
otherwise provided in this Plan.
14
7.18 Corporate Governance. The Reorganized Debtor's
By-laws and the Reorganized Debtor's Certificate of
Incorporation shall contain provisions necessary to
effectuate the provisions of this Plan, in each case
without any further action by the stockholders or
directors of the Debtor, the Debtor in Possession
or the Reorganized Debtor. Pursuant to section 1123(a)(6)
of the Bankruptcy Code, the charter of the Reorganized
Debtor shall be amended to include a prohibition on
the issuance of non-voting securities. For Illinois
franchise taxation purposes, the paid in capital of
the Reorganized Debtor shall be $1,000.00. The initial
two (2) members of the Reorganized Debtor's board
shall be Bradford T. Whitmore and Dave Miller. Subject
to the approval of the Senior Lenders, the officers
of the Debtor immediately prior to the Effective Date
shall serve as the initial officers of the Reorganized
Debtor on and after the Effective Date, until replaced
in accordance with the By-Laws.
7.19 Minimum Distributions. No payment of Cash on
account of a distribution under this Plan less than
$5.00 shall be made by the Reorganized Debtor to any
holder of a Claim.
7.20 Unclaimed or Undisbursed Distributions. Any
disbursement not claimed by a holder of a Claim (e.g.,
the distribution check has not cleared) or not otherwise
disbursed under the Plan (e.g., money reserved for
unresolved Disputed Claims) prior to March 31, 2010
shall be deemed abandoned and shall be paid to the
Reorganized Debtor.
ARTICLE VIII
DISCHARGE
---------
On the confirmation date of this Plan, the Debtor will be
discharged from any debt that arose before confirmation of
this Plan, subject to the occurrence of the Effective Date,
to the extent specified in section 1141(d)(1)(A) of the
Bankruptcy Code, except that the Debtor will not be
discharged of any debt: (i) imposed by this Plan;
(ii) of a kind specified in section 1141(d)(6)(A) if a timely
complaint was filed in accordance with Rule 4007(c) of
the Federal Rules of Bankruptcy Procedure; or (iii) of
a kind specified in section 1141(d)(6)(B).
Respectfully submitted,
ISCO INTERNATIONAL, INC.,
Debtor and Debtor-in-Possession
By:/s/ Joel A. Schechter,
---------------------------------
Its Attorney
Joel A. Schechter
Attorney No. 3122099
53 W. Jackson Blvd, Suite 1025
Chicago, IL 60604, 312-332-0267
15
