Exhibit 10.20
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

             
 
           
 
    )      
In re:
    )     Chapter 11
 
    )      
TLC Vision (USA) Corporation , et al.,1
    )     Case No. 09-14473 (KG)
 
    )      
Debtors.
    )     Jointly Administered
 
    )      
 
           

FOURTH AMENDED JOINT CHAPTER 11 PLAN OF
REORGANIZATION DATED AS OF MARCH 24, 2010
     The above-captioned debtors and debtors in possession hereby submit their
Fourth Amended Joint Chapter 11 Plan of Reorganization Dated as of March 24,
2010.

     
 
  RICHARDS LAYTON & FINGER, P.A.
 
  One Rodney Square
 
  920 North King Street
 
  Wilmington, Delaware 19801
 
  Telephone: (302) 651-7700
 
  Facsimile: (302) 651-7701
 
  Counsel for Debtors and Debtors in Possession
 
   
Dated: Wilmington, Delaware
  PROSKAUER ROSE LLP
            March 24, 2010
  Mark K. Thomas
 
  Paul V. Possinger
 
  Jeremy T. Stillings
 
  Three First National Plaza
 
  70 West Madison, Suite 3800
 
  Chicago, Illinois 60602
 
  Telephone: (312) 962-3550
 
  Facsimile: (312) 962-3551
 
  Counsel for Debtors and Debtors in Possession

 

1   The Debtors in the cases, along with the last four digits of each Debtor’s
federal tax identification number and address, are: TLC Vision (USA) Corporation
(6220) 16305 Swingley Ridge Road, Chesterfield, MO 63017; TLC Vision Corporation
(1150) 5280 Solar Drive, Suite 300, Mississauga, Ontario, L4W 5M8; and TLC
Management Services, Inc. (0374) 1209 Orange Street, Wilmington, DE 19801.

 

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Table of Contents
Page No.
ARTICLE I.
DEFINITIONS, INTERPRETATION AND EXHIBITS.

     
Section 1.01.
  Definitions
 
   
Section 1.02.
  Rules of Interpretation
 
   
Section 1.03.
  Exhibits

ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS

     
Section 2.01.
  Generally
 
   
Section 2.02.
  Unclassified Claims
 
   
Section 2.03.
  Classification of Claims Against and Interests in TLC USA.
 
   
Section 2.04.
  Classification of Claims Against and Interests in TLC Canada.
 
   
Section 2.05.
  Classification of Claims Against and Interests in TLC MSI.

ARTICLE III.
PROVISIONS FOR TREATMENT OF CLASSES OF CLAIMS AND INTERESTS

     
Section 3.01.
  Satisfaction of Claims and Interests
 
   
Section 3.02.
  Unclassified Claims, Classified Unimpaired and Impaired Claims and Classified
Interests
 
   
Section 3.03.
  Administrative Claims
 
   
Section 3.04.
  Priority Tax Claims
 
   
Section 3.05.
  Junior DIP Claims
 
   
Section 3.06.
  Treatment of Claims Against and Interests in TLC USA:
 
   
Section 3.07.
  Treatment of Claims Against and Interests in TLC Canada:
 
   
Section 3.08.
  Treatment of Claims Against and Interests in TLC MSI:

 

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ARTICLE IV.
ACCEPTANCE OR REJECTION OF THE PLAN; CRAMDOWN

     
Section 4.01.
  Acceptance by Impaired Classes of Claims and Interests
 
   
Section 4.02.
  Voting Classes
 
   
Section 4.03.
  Ballot Instructions
 
   
Section 4.04.
  Cramdown

ARTICLE V.
PROVISIONS GOVERNING DISTRIBUTIONS UNDER THE PLAN

     
Section 5.01.
  Timing of Distributions
 
   
Section 5.02.
  Distributions to Holders of Allowed Claims
 
   
Section 5.03.
  Delivery of Distributions
 
   
Section 5.04.
  Method of Cash Distributions
 
   
Section 5.05.
  Fractional Dollars
 
   
Section 5.06.
  Failure to Negotiate Checks
 
   
Section 5.07.
  Unclaimed Distributions
 
   
Section 5.08.
  Limitation on Distribution Rights
 
   
Section 5.09.
  Compliance With Tax Requirements
 
   
Section 5.10.
  Documentation Necessary to Release Liens

ARTICLE VI.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES; INDEMNIFICATION
OBLIGATIONS; BENEFIT PROGRAMS

     
Section 6.01.
  Treatment of Executory Contracts and Unexpired Leases
 
   
Section 6.02.
  Cure of Defaults for Assumed Contracts and Leases
 
   
Section 6.03.
  Resolution of Objections to Assumption of Executory Contracts and Unexpired
Leases
 
   
Section 6.04.
  Bar Date for Rejection Claims

 

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Section 6.05.
  Treatment of Rejection Claims
 
   
Section 6.06.
  Executory Contracts and Unexpired Leases Entered Into and Other Obligations
Incurred After the Petition Date
 
   
Section 6.07.
  Modification of Change of Control Provisions
 
   
Section 6.08.
  Reorganized Debtors’ Indemnification Obligations
 
   
Section 6.09.
  Benefit Programs

ARTICLE VII.
MEANS FOR IMPLEMENTATION OF THE PLAN

     
Section 7.01.
  Corporate Action
 
   
Section 7.02.
  Plan Funding
 
   
Section 7.03.
  Plan Sponsor Agreement
 
   
Section 7.04.
  Articles of Organization
 
   
Section 7.05.
  Operations Between the Confirmation Date and the Effective Date
 
   
Section 7.06.
  Revesting of Assets
 
   
Section 7.07.
  Approval of Agreements
 
   
Section 7.08.
  Adoption or Assumption of Senior Management Contracts
 
   
Section 7.09.
  Adoption of New Management Incentive Plan
 
   
Section 7.10.
  Corporate Structure Changes

ARTICLE VIII.
PRESERVATION OF CAUSES OF ACTION AND RIGHT TO DEFEND AND CONTEST

     
Section 8.01.
  Preservation of Rights
 
   
Section 8.02.
  Rights of Action
 
   
Section 8.03.
  Setoffs
 
   
Section 8.04.
  No Payment or Distribution Pending Allowance
 
   
Section 8.05.
  Resolution of Disputed Claims

 

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ARTICLE IX.
CONDITIONS TO CONFIRMATION and CONSUMMATION OF THE PLAN

     
Section 9.01.
  Conditions to Confirmation
 
   
Section 9.02.
  Conditions to Effective Date
 
   
Section 9.03.
  Waiver of Conditions to Confirmation and Consummation
 
   
Section 9.04.
  Effect of Failure or Absence of Waiver of Conditions Precedent to the
Effective Date of the Plan

ARTICLE X.
OPERATION AND MANAGEMENT OF THE REORGANIZED DEBTORS

     
Section 10.01.
  Post-Effective Date Operation of Business
 
   
Section 10.02.
  Post Effective Date Officers and Directors

ARTICLE XI.
EFFECTS OF CONFIRMATION

     
Section 11.01.
  Discharge
 
   
Section 11.02.
  Injunction
 
   
Section 11.03.
  Exculpation
 
   
Section 11.04.
  Releases
 
   
Section 11.05.
  Indemnification
 
   
Section 11.06.
  Other Documents and Actions
 
   
Section 11.07.
  Term of Injunctions or Stays
 
   
Section 11.08.
  Preservation of Insurance
 
   
Section 11.09.
  Guaranties
 
   
Section 11.10.
  Subordination Rights
 
   
Section 11.11.
  No Successor Liability

 

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ARTICLE XII.
RETENTION OF JURISDICTION

     
Section 12.01.
  Exclusive Jurisdiction of Bankruptcy Court
 
   
Section 12.02.
  Failure of Bankruptcy Court to Exercise Jurisdiction

ARTICLE XIII.
MISCELLANEOUS PROVISIONS

     
Section 13.01.
  Binding Effect of Plan
 
   
Section 13.02.
  Withdrawal of the Plan
 
   
Section 13.03.
  Final Order
 
   
Section 13.04.
  Modification of the Plan
 
   
Section 13.05.
  Business Days
 
   
Section 13.06.
  Severability
 
   
Section 13.07.
  Governing Law
 
   
Section 13.08.
  Dissolution of Committee
 
   
Section 13.09.
  Payment of Fees and Expenses of the Junior DIP Agent and Junior DIP Lenders
 
   
Section 13.10.
  Payment of Statutory Fees
 
   
Section 13.11.
  Post-Confirmation Operating Reports
 
   
Section 13.12.
  Notices
 
   
Section 13.13.
  Filing of Additional Documents
 
   
Section 13.14.
  Section 1125 of the Bankruptcy Code
 
   
Section 13.15.
  Section 1146 Exemption
 
   
Section 13.16.
  Release of Liens
 
   
Section 13.17.
  Time
 
   
Section 13.18.
  No Attorneys’ Fees

 

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Section 13.19.
  No Injunctive Relief
 
   
Section 13.20.
  Non-Voting Equity Securities
 
   
Section 13.21.
  Continued Confidentiality Obligations
 
   
Section 13.22.
  No Admissions or Waivers
 
   
Section 13.23.
  Entire Agreement
 
   
Section 13.24.
  Waiver
 
   
Section 13.25.
  Bar Date for Professionals

 

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INTRODUCTION
          This fourth amended joint plan of reorganization under chapter 11 of
the Bankruptcy Code (as amended or modified hereafter in accordance with its
terms, the “Plan”), dated as of March 24, 2010, is proposed by TLC Vision
Corporation, TLC Vision (USA) Corporation, and TLC Management Services Inc.
(collectively, the “Debtors”). Reference is made to the Disclosure Statement
accompanying the Plan for a discussion of the Debtors’ history, business,
results of operations, historical financial information, properties, projections
for future operations and risk factors, a summary and analysis of the Plan, and
certain related matters. The Debtors are proponents of the Plan within the
meaning of section 1129 of the Bankruptcy Code.
          ALL CREDITORS OF THE DEBTORS ARE ENCOURAGED TO READ THE PLAN AND THE
DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE
PLAN. SUBJECT TO CERTAIN RESTRICTIONS AND REQUIREMENTS SET FORTH IN SECTION 1127
OF THE BANKRUPTCY CODE, BANKRUPTCY RULE 3019 AND THE PLAN, THE DEBTORS RESERVE
THE RIGHT TO ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THE PLAN PRIOR TO ITS
SUBSTANTIAL CONSUMMATION.
          The Debtors have obtained Bankruptcy Court authority to have the
Chapter 11 Cases jointly administered for administrative and procedural purposes
only. Accordingly, the Plan is being proposed as a joint plan of reorganization
of the Debtors for administrative and procedural purposes only. The Plan is not
premised upon the substantive consolidation of the Debtors or the Chapter 11
Cases and nothing herein shall be otherwise construed. The Debtors, however,
reserve the right to seek substantive consolidation by motion or amendment to
the Plan if they conclude that substantive consolidation is necessary or
appropriate for effectuation of the Plan. Claims against, and Interests in, the
Debtors (other than Administrative Claims, Priority Tax Claims, and Junior DIP
Claims) are classified in Article II hereof and treated in Article III hereof.
ARTICLE I.
DEFINITIONS, INTERPRETATION AND EXHIBITS.
          Section 1.01. Definitions. Unless the context requires otherwise, the
following terms shall have the following meanings whether presented in the Plan
or the Disclosure Statement with initial capital letters or otherwise. As used
herein:
          “Administrative Claim” means a Claim for: (a) any cost or expense of
administration (including, without limitation, Professional Fee Claims) of any
of the Chapter 11 Cases asserted or arising under sections 503, 507(a)(2),
507(b) or 1114(e)(2) of the Bankruptcy Code including, but not limited to
(i) any actual and necessary post Petition Date cost or expense of preserving
the Debtors’ respective Estates or operating the businesses of the Debtors,
(ii) any payment to be made under the Plan to cure a default under an assumed
executory contract or unexpired lease, (iii) any post-Petition Date cost,
indebtedness or contractual obligation duly and validly incurred or assumed by
the Debtors in the ordinary course of their respective businesses,
(iv) compensation or reimbursement of expenses of Professionals to the extent
Allowed by the

 

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Bankruptcy Court under sections 330(a) or 331 of the Bankruptcy Code, and
(v) all Allowed Claims that are entitled to be treated as Administrative Claims
pursuant to a Final Order of the Bankruptcy Court under Section 546 of the
Bankruptcy Code; (b) any fees or charges assessed against the Debtors’
respective Estates under section 1930 of title 28 of the United States Code; and
(c) any Allowed administrative claim or superpriority claim granted pursuant to
the Junior DIP Order.
          “Affiliate” shall have the meaning set forth in section 101(2) of the
Bankruptcy Code.
          “Allowed” means: (i) with reference to any unsatisfied Claim, (a) any
Claim against any of the Debtors that has been listed by the Debtors in the
Schedules, as such Schedules may have been amended by the Debtors from time to
time in accordance with Bankruptcy Rule 1009, as liquidated in amount and not
disputed or contingent, and with respect to which no proof of claim has been
filed, (b) any Claim specifically allowed under the Plan, (c) any Claim the
amount or existence of which has been determined or allowed by a Final Order
(including the Junior DIP Order), or (d) any Claim as to which a proof of claim
has been timely filed before the Bar Date and to which no objection to the
allowance thereof has been filed by the Claims Objection Deadline; provided,
however, that the term “Allowed”, with reference to any Claim, shall not include
(x) any unliquidated claim or (y) interest or attorneys’ fees on or related to
any Claim that accrues from and after the Petition Date unless otherwise
expressly provided for in the Plan; and (ii) with reference to any Interests, an
Interest which is registered as of the Record Date in such stock register as may
be maintained on behalf of the Debtors.
          “Allowed Claim” means a Claim that is Allowed.
          “Allowed Interest” means an Interest that is Allowed.
          “Avoidance Actions” means any and all Causes of Action which a
trustee, debtor-in-possession, the estate or other appropriate party in interest
may assert under sections 502, 510, 541, 542, 543, 544, 545, 547, 548, 549, 550,
551, or 553 of the Bankruptcy Code (other than those which are released or
dismissed as part of and pursuant to the Plan) or under other similar or related
state or federal statutes or common law, including fraudulent conveyance laws.
          “Ballot” means the forms of ballots accompanying the Disclosure
Statement upon which Holders of Impaired Claims entitled to vote on the Plan
shall, among other things, indicate their acceptance or rejection of the Plan in
accordance with the instructions regarding voting.
          “Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as codified
in title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as in effect on
the Petition Date, together with all amendments and modifications thereto that
subsequently may be made applicable to the Chapter 11 Cases.
          “Bankruptcy Court” means the United States Bankruptcy Court for the
District of Delaware or, if such court ceases to exercise jurisdiction over
these proceedings, the court or adjunct thereof that exercises jurisdiction over
the Chapter 11 Cases.

 

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          “Bankruptcy Rules” means: (a) the Federal Rules of Bankruptcy
Procedure and the Official Bankruptcy Forms, as amended and promulgated under
section 2075 of title 28 of the United States Code; (b) the Federal Rules of
Civil Procedure, as amended and promulgated under section 2072 of title 28 of
the United States Code; (c) the Local Rules of the Bankruptcy Court; and (d) any
standing orders governing practice and procedure issued by the Bankruptcy Court,
each as in effect on the Petition Date, together with all amendments and
modifications thereto that subsequently may be applicable to the Chapter 11
Cases or proceedings therein, as the case may be.
          “Bar Date” means the applicable bar date by which a proof of Claim
must be, or must have been, Filed, as established by an order of the Bankruptcy
Court, in accordance with the Bankruptcy Code, or as set forth in Section 6.04
hereof.
          “BIA” means the Bankruptcy and Insolvency Act (Canada), R.S.C. 1985, c
B-3, as amended from time to time.
          “Business Day” means any day which is not a Saturday, a Sunday, a
“legal holiday” as defined in Bankruptcy Rule 9006(a), or a day on which banking
institutions in the State of New York are authorized or obligated by law,
executive order or governmental decree to be closed.
          “Buyer” means Thriller Acquisition Corp., a Delaware corporation.
          “Buyer Parties” mean Buyer and Canadian Buyer.
          “Canadian Buyer” means Thriller Canada Acquisition Corp., a New
Brunswick corporation.
          “Canadian Court” means the Ontario Superior Court of Justice
(Commercial List).
          “Canadian Priority Employee Claims” means the claims of the employees
and former employees of TLC Canada pursuant to section 6(5) of the CCAA, and the
claims of the employees and former employees of TLC Canada and other Persons
pursuant to section 6(6) of the CCAA.
          “Canadian Priority Tax Claim” means the claims of Her Majesty in Right
of Canada pursuant to section 6(3) of the CCAA.
          “Canadian Recognition Order” means an order of the Canadian Court
issued in respect of the CCAA Case recognizing the Plan Sponsor Order and the
Junior DIP Order.
          “Canadian Sanction Order” means an order of the Canadian Court
recognizing the Plan and the Confirmation Order in their entirety and declaring
the Plan and the Confirmation Order to be effective in Canada.
          “Cash” means money, currency and coins, negotiable checks, balances in
bank accounts and other lawful currency of the United States of America and its
equivalents.

 

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          “Causes of Action” means any and all actions, claims, rights,
defenses, third-party claims, damages, executions, demands, crossclaims,
counterclaims, suits, choses in action, controversies, agreements, promises,
rights to legal remedies, rights to equitable remedies, rights to payment and
claims whatsoever, whether known, unknown, reduced to judgment, not reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured and whether asserted or assertable
directly, indirectly or derivatively, at law, in equity or otherwise, accruing
to the Debtors or the Reorganized Debtors, including, but not limited to, the
Avoidance Actions.
          “CCAA” shall mean the Companies’ Creditors Arrangement Act (Canada),
R.S.C. 1985, c. C-36, as amended from time to time.
          “CCAA Case” means the proceeding commenced under Part IV of the CCAA
by TLC Canada in the Canadian Court.
          “Chapter 11 Cases” means the cases under chapter 11 of the Bankruptcy
Code commenced by the Debtors in the Bankruptcy Court on the Petition Date.
          “Charlesbank” means Charlesbank Equity Fund VII, Limited Partnership,
its direct and indirect affiliates, and any fund and any accounts managed by
Charlesbank Equity Fund VII or a direct or indirect affiliate thereof.
          “Claim” shall have the meaning set forth in section 101(5) of the
Bankruptcy Code.
          “Claims Objection Deadline” means the latest of (a) 75 days after the
Effective Date, (b) 75 days after the date on which any Claim is Filed, or
(c) such later date as may be fixed by the Bankruptcy Court, whether fixed
before or after the date specified in clauses (a) and (b) above. The filing of a
motion to extend the Claims Objection Deadline shall automatically extend the
Claims Objection Deadline until a Final Order is entered on such motion. In the
event that such motion to extend the Claims Objection Deadline is denied by the
Bankruptcy Court, the Claims Objection Deadline shall be the later of the
current Claims Objection Deadline (as previously extended, if applicable) or
30 days after the Bankruptcy Court’s entry of an order denying the motion to
extend the Claims Objection Deadline.
          “Class” means each class, subclass or category of Claims or Interests
as classified in Article II of the Plan.
          “Committee” means the committee appointed in the Chapter 11 Cases
pursuant to section 1102(a) of the Bankruptcy Code by the United States Trustee
on January 5, 2010, as the membership of such committee is from time to time
constituted and reconstituted.
          “Committee Members” means the members of any Committee.
          “Confirmation” means the entry by the Bankruptcy Court of the
Confirmation Order.

 

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          “Confirmation Date” means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the docket of the Bankruptcy
Court with respect to the Chapter 11 Cases within the meaning of Bankruptcy
Rules 5003 and 9021.
          “Confirmation Hearing” means the hearing held before the Bankruptcy
Court to consider Confirmation of the Plan pursuant to sections 1128 and 1129 of
the Bankruptcy Code.
          “Confirmation Order” means the order entered by the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
          “Creditor” means any Person that is the Holder of any Claim against
any of the Debtors.
          “Day(s)” means, unless expressly otherwise provided, calendar day(s).
          “Debtors” shall have the meaning set forth in the Introduction of this
Plan.
          “Disallowed” means, with respect to any Claim or Interest or portion
thereof, any Claim against or Interest in the Debtors which: (a) has been
withdrawn, in whole or in part, by agreement of the Debtors or Reorganized
Debtors and the Holder thereof; (b) has been withdrawn, in whole or in part, by
the Holder thereof; or (c) has been disallowed, in whole or part, by Final Order
of a court of competent jurisdiction. In each case, a Disallowed Claim or a
Disallowed Interest is disallowed only to the extent of disallowance or
withdrawal.
          “Disallowed Claim” means a Claim, or any portion thereof, that is
Disallowed.
          “Disallowed Interest” means an Interest, or any portion thereof, that
is Disallowed.
          “Disbursing Agent” means Reorganized TLC USA or such other Entity that
is designated by Reorganized TLC USA to be the holder of the General Unsecured
Creditor Note and/or to disburse Property pursuant to the Plan.
          “Disclosure Statement” means the Debtors’ Fourth Amended Disclosure
Statement With Respect to the Fourth Amended Joint Chapter 11 Plan of
Reorganization Dated as of March 24, 2010, including all exhibits, appendices,
schedules and annexes, if any, attached thereto, as submitted by the Debtors, as
the same may be altered, amended, supplemented or modified from time to time,
and which was prepared and distributed in accordance with sections 1125 and
1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018.
          “Disputed” means any Claim or Interest that has been neither Allowed
nor Disallowed.
          “Disputed Claim” means a Claim, or any portion thereof, that is
Disputed. For purposes of the Plan, a Claim that has been neither Allowed nor
Disallowed shall be considered a Disputed Claim.

 

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          “Disputed Interest” means an Interest, or any portion thereof, that is
Disputed. For purposes of the Plan, an Interest that has been neither Allowed
nor Disallowed shall be considered a Disputed Interest.
          “Effective Date” means the date on which all conditions to
consummation set forth in Article IX of the Plan have been satisfied or waived
(if capable of being duly and expressly waived), provided that no stay of the
Confirmation Order is then in effect, as evidenced by the filing and service of
a notice thereof with the Bankruptcy Court.
          “Entity” means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, limited liability
company, estate, trustee, United States Trustee, unincorporated organization,
government, governmental unit (as defined in the Bankruptcy Code), agency or
political subdivision thereof.
          “Essential Trade Claims” shall mean those Claims identified by TLC USA
as such in the Plan Supplement.
          “Estates” means the estates created in these Chapter 11 Cases pursuant
to section 541 of the Bankruptcy Code upon commencement of the Chapter 11 Cases.
          “Exculpated Persons” means: (a) each of the Debtors, (b) directors,
officers and employees of the Debtors, as of the Petition Date but prior to the
Effective Date, (c) Charlesbank, (d) the Buyer Parties, and (e) the respective
current and former officers, directors, employees, agents, stockholders,
managers, members, affiliates, partners, advisors, attorneys and professionals
of the parties identified in subclauses (a) through (d).
          “Excluded Assets” shall have the same meaning set forth in the Plan
Sponsor Agreement.
          “File, Filed or Filing” means file, filed or filing with the
Bankruptcy Court in the Chapter 11 Cases.
          “Final Decree” means the final decree entered by the Bankruptcy Court
after the Effective Date and pursuant to section 350(a) of the Bankruptcy Code
and Bankruptcy Rule 3022.
          “Final Order” means an order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket of such court,
the operation or effect of which has not been stayed, reversed, vacated,
modified or amended, and as to which order or judgment (or any revision,
modification, or amendment thereof) the time to appeal, petition for certiorari,
or seek review or rehearing has expired and as to which no appeal, petition for
certiorari, or petition for review or rehearing was filed or, if filed, remains
pending; provided, however, that the possibility that a motion may be filed
pursuant to Rules 9023 or 9024 of the Bankruptcy Rules or Rules 59 or 60(b) of
the Federal Rules of Civil Procedure shall not mean that an order or judgment is
not a Final Order.

 

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          “General Unsecured Claims” means all Allowed Claims, but excluding
Administrative Claims, Priority Tax Claims, Professional Fee Claims, Other
Secured Claims, Prepetition Lender Secured Claims, Essential Trade Claims, and
Other Priority Claims.
          “General Unsecured Creditor Note” means an unsecured promissory note
with a zero nominal interest rate to be issued by the Buyer Parties to the
Disbursing Agent for the benefit of Holders of Allowed General Unsecured Claims
in Classes A5 and B5 in a principal amount equal to the lesser of (a) 10% of the
aggregate amount of the Allowed General Unsecured Claims in Classes A5 and B5
hereof, and (b) $3,000,000, to be paid to the Disbursing Agent for the benefit
of Holders of Allowed Claims in such Classes on the later of (i) one year after
the Effective Date, or (ii) promptly after any such Claim is Allowed, a copy of
which shall be filed with the Plan Supplement.
          “Holder” means an Entity holding a beneficial interest in a Claim or
Interest and, when used in conjunction with a Class or type of Claim or
Interest, means a holder of a beneficial interest in a Claim or Interest in such
Class or of such type.
          “Impaired” means, when used with reference to a Claim or Interest, a
Claim or Interest that is impaired within the meaning of section 1124 of the
Bankruptcy Code.
          “Impaired Claim” means a Claim which is Impaired.
          “Impaired Interest” means an Interest which is Impaired.
          “Information Officer” means Alvaraz & Marsal Canada Inc., the
information officer appointed by the Canadian Court in connection with the CCAA
Case.
          “Intercompany Claims” means all claims owing to any Debtor by any
other Debtor.
          “Interests” means any and all equity interests, ownership interests or
shares in the Debtors issued by the Debtors prior to the Petition Date
(including, without limitation, all capital stock, stock certificates, common
stock, preferred stock, partnership interests, rights, options, warrants,
contingent warrants, convertible or exchangeable securities, investment
securities, subscriptions or other agreements and contractual rights to acquire
or obtain such an interest or share in the Debtors, partnership interests in the
Debtors’ stock appreciation rights, conversion rights, repurchase rights,
redemption rights, dividend rights, preemptive rights and liquidation
preferences, puts, calls or commitments of any character whatsoever relating to
any such equity, ownership interests or shares of capital stock of the Debtors
or obligating the Debtors to issue, transfer or sell any shares of capital
stock) whether or not certificated, transferable, voting or denominated “stock”
or a similar security, and any Claim or Cause of Action related to or arising
from any of the foregoing.
          “Junior DIP Agent” means Charlesbank as collateral agent and
administrative agent under the Junior DIP Loan Agreement.

 

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          “Junior DIP Claims” means the claims of the Junior DIP Agent and the
Junior DIP Lenders based upon, evidenced by, arising under or related to the
Junior DIP Loan Agreement, plus all accrued and unpaid interest, fees and costs
thereunder.
          “Junior DIP Financing” means the post-petition loan facility provided
to the Debtors by the Junior DIP Lenders pursuant to the Junior DIP Loan
Agreement.
          “Junior DIP Lenders” means the lender parties to the Junior DIP Loan
Agreement.
          “Junior DIP Loan Agreement” means that certain Junior Secured Super
Priority Debtor in Possession Credit Agreement dated as of February 3, 2010 by
and among the Debtors, the Junior DIP Agent and the Junior DIP Lenders.
          “Junior DIP Order” means the interim or final order, as in effect from
time-to-time, entered by the Bankruptcy Court authorizing and approving the
Junior DIP Financing and the Debtors’ use of cash collateral pursuant to section
363 of the Bankruptcy Code, and any extensions or amendments thereof.
          “Liens” means, with respect to any asset or Property (or the rents,
revenues, income, profits or proceeds therefrom), and in each case, whether the
same is consensual or nonconsensual or arises by contract, operation of law,
legal process or otherwise: (a) any and all mortgages, liens, pledges,
attachments, charges, leases evidencing a capitalizable lease obligation,
conditional sale or other title retention agreement, or other security interest
or encumbrance or other legally cognizable security devices of any kind in
respect of any asset or Property, or upon the rents, revenues, income, profits
or proceeds therefrom; or (b) any arrangement, express or implied, under which
any Property is transferred, sequestered or otherwise identified for the purpose
of subjecting or making available the same for the payment of debt or
performance of any other obligation in priority to the payment of general
unsecured Creditors.
          “Management Interests” means equity interests in the Buyer Parties to
be issued to each member of the Senior Management team pursuant to the New
Management Incentive Plan.
          “Medical Pending Litigation Claims” means all Claims relating to
pending litigation against any of the Debtors for medical malpractice or similar
liability, as further disclosed in the Disclosure Statement.
          “New Management Incentive Plan” means, collectively, the equity
incentive and bonus plans and other terms of employment of Senior Management to
be adopted by the Buyer Parties on the Effective Date which provide for the
issuance of equity awards to officers and key employees of the Debtors. The Plan
Supplement will include the forms of the New Management Incentive Plan in
substantially the form to be implemented on the Effective Date.
          “New TLC USA Certificates of Incorporation and By-Laws” means the
amended and restated certificates of incorporation, articles of organization,
by-laws or other governing charter documents, as appropriate, of TLC USA which
will be included in the Plan Supplement.

 

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The Plan Supplement will include the forms of the New TLC USA Certificates of
Incorporation and By-Laws in substantially the form to be implemented on the
Effective Date.
          “Objection” means any objection, application, motion, complaint or any
other legal proceeding seeking, in whole or in part, to Disallow, determine,
liquidate, classify, reclassify or establish the priority, expunge, subordinate
or estimate any Claim (including the resolution of any request for payment of
any Administrative Claim) or Interest other than a Claim or an Interest that is
Allowed.
          “Other Priority Claims” means any Claim against the Debtors entitled
to priority pursuant to section 507(a) of the Bankruptcy Code, including the
Canadian Priority Employee Claims other than a Priority Tax Claim or an
Administrative Claim.
          “Other Secured Claims” means any Secured Claim (other than the
Prepetition Lender Secured Claims).
          “Person” means and includes a natural person, individual, partnership,
corporation (as defined in section 101(9) of the Bankruptcy Code), or
organization including, without limitation, officers and directors of the
Debtors, corporations, limited partnerships, limited liability companies,
general partnerships, joint ventures, joint stock companies, trusts, land
trusts, business trusts, unincorporated organizations or associations, or other
organizations, irrespective of whether they are legal entities, governmental
bodies (or any agency, instrumentality or political subdivision thereof), or any
other form of legal entities; provided, however, “Person” does not include
governmental units, except that a governmental unit that (a) acquires an asset
from a Person (i) as a result of the operation of a loan guarantee agreement or
(ii) as receiver or liquidating agent of a Person; (b) is a guarantor of a
pension benefit payable by or on behalf of a Debtor or an Affiliate of a Debtor;
or (c) is the legal or beneficial owner of an asset of (i) an employee pension
benefit plan that is a governmental plan, as defined in section 414(d) of the
Internal Revenue Code of 1986 or (ii) an eligible deferred compensation plan, as
defined in section 457(b) of the Internal Revenue Code of 1986, shall be
considered for purposes of section 1102 of the Bankruptcy Code to be a Person
with respect to such asset or such benefit.
          “Petition Date” means December 21, 2009, the date on which the Debtors
Filed their respective petitions for relief commencing the Chapter 11 Cases.
          “Plan” means this Fourth Amended Joint Chapter 11 Plan of
Reorganization Dated as of March 24, 2010, including all exhibits, appendices,
schedules and annexes, if any, attached hereto, as submitted by the Debtors,
including the Plan Supplement, as such Plan may be altered, amended,
supplemented or modified from time to time in accordance with the provisions of
the Bankruptcy Code, the Bankruptcy Rules, the Confirmation Order and the terms
and conditions of Section 13.04 of the Plan.
          “Plan Documents” means the form of the Plan Sponsor Agreement, the New
Management Incentive Plan, the Senior Management Contracts, a schedule of the
identities of the members of the Boards of Directors of the Reorganized Debtors,
and such other definitive documents as may be necessary to implement the Plan.
          “Plan Sponsor” means Charlesbank.

 

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          “Plan Sponsor Agreement” means that certain Plan Sponsor Agreement
dated February 3, 2010 among the Buyer Parties and the Debtors, as amended.
          “Plan Sponsor Order” means an order of the Bankruptcy Court,
substantially in the form attached to the Plan Sponsor Agreement, approving the
assumption of the Plan Sponsor Agreement by the Debtors and the Break-Up Fee,
Expense Reimbursement and other amounts paid or payable thereunder, and
approving and directing the execution, delivery and performance of the Plan
Sponsor Agreement and the applicable ancillary agreements.
          “Plan Supplement” means the supplement to this Plan containing the
Plan Documents which shall be filed with the Bankruptcy Court. The Plan
Supplement, which shall be reasonably satisfactory to the Debtors and
Charlesbank, is incorporated into, and is a part of, this Plan as if set forth
in full herein, and all references to this Plan shall refer to this Plan
together with all documents contained in the Plan Supplement. The Plan
Supplement (containing drafts or final versions of the Plan Documents) shall be
filed with the Bankruptcy Court on or before the date that is ten (10) days
prior to the Confirmation Hearing, or on such other date as the Bankruptcy Court
may establish.
          “Prepetition Agent” means Wells Fargo Bank, N.A., as collateral agent
and administrative agent under the Prepetition Credit Agreement, and any
predecessor agent thereunder.
          “Prepetition Credit Agreement” means the Amended and Restated Credit
Agreement dated as of June 21, 2007 (as amended from time to time), by and among
TLC USA, TLC Canada, the guarantors party thereto, the Prepetition Lenders, and
the Prepetition Agent pursuant to which the Prepetition Lenders agreed to
provide loans and other financial accommodations to TLC USA secured by first
priority liens and security interests on substantially all of the Debtors’
assets.
          “Prepetition Lenders” shall mean the lenders party to the Prepetition
Credit Agreement.
          “Prepetition Lender Secured Claims” means the claims of the
Prepetition Agent and the Prepetition Lenders based upon, evidenced by, arising
under or related to the Prepetition Credit Agreement estimated to include,
without limitation, (i) outstanding principal amount of term loans of US
$76,659,696.92, (ii) outstanding principal amount of revolving loans of US
$23,400,000, (iii) the outstanding letter of credit exposure of US $50,000 and
CAD $1,000,000, (iv) the outstanding amount under hedge agreements of
$1,605,478.79, plus (v) all interest, fees and costs thereunder, all as may be
Allowed by the Bankruptcy Court.
          “Prepetition Loan Documents” shall mean the Prepetition Credit
Agreement and the other Loan Documents (as defined in the Prepetition Credit
Agreement).
          “Priority Tax Claim” means any and all Claims accorded priority in
payment pursuant to section 507(a)(8) of the Bankruptcy Code and the Canadian
Priority Tax Claim.
          “Professional Fee Claim” means a claim for compensation for services
rendered and for reimbursement of expenses incurred pursuant to sections 327,
328, 330, 331 or 503(b) of

 

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the Bankruptcy Code, relating to services incurred on and after the Petition
Date and prior to and including the Effective Date in connection with an
application made to the Bankruptcy Court by Professionals in the Chapter 11
Cases or Professionals retained by or on behalf of the Debtors or their estates
in connection with parallel restructuring proceedings in the Canadian Court.
          “Professionals” means any professional employed in these Chapter 11
Cases pursuant to sections 327 or 1103 of the Bankruptcy Code or any
Professional entitled to compensation pursuant to sections 327, 328, 330, 331,
503(b)(2) or (4), or 1103 of the Bankruptcy Code or retained by or on behalf of
the Debtors or their estates in connection with parallel restructuring
proceedings in the Canadian Court.
          “Property” means all assets or property of the Debtors’ respective
Estates or the Reorganized Debtors, as applicable, of any nature whatsoever,
real or personal, tangible or intangible, including contract rights, accounts
and Causes of Action, previously or now owned by the Debtors, or acquired by the
Debtors’ respective Estates, or by the Reorganized Debtors, as applicable, as
defined in section 541 of the Bankruptcy Code.
          “Purchased Assets” has the meaning ascribed thereto in the Plan
Sponsor Agreement.
          “Record Date” means (a) for the purpose of voting on the Plan, the
date of entry of the order approving the Disclosure Statement respecting the
Plan and (b) for the purposes of any distribution to Holders of Claims and
Interests and for the determination of which Interests and Claims are Allowed,
the Confirmation Date.
          “Reinstated or Reinstatement” means: (a) leaving unaltered the legal,
equitable, and contractual rights to which a Claim entitles the Holder of such
Claim so as to leave such Claim Unimpaired in accordance with section 1124 of
the Bankruptcy Code, or (b) notwithstanding any contractual provision or
applicable law that entitles the Holder of such Claim to demand or receive
accelerated payment of such Claim after the occurrence of a default, (i) curing
any such default that occurred before or after the Petition Date, other than a
default of a kind specified in section 365(b)(2) of the Bankruptcy Code;
(ii) reinstating the maturity of such Claim as such maturity existed before such
default; (iii) compensating the Holder of such Claim for any damages incurred as
a result of any reasonable reliance by such Holder on such contractual provision
or such applicable law; and (iv) not otherwise altering the legal, equitable, or
contractual rights to which such Claim entitled the Holder of such Claim;
provided, however, that any contractual right that does not pertain to the
payment when due of principal and interest on the obligation on which such Claim
is based, including, but not limited to, financial covenant ratios, negative
pledge covenants, covenants or restrictions on merger or consolidation, and
affirmative covenants regarding corporate existence or which prohibit certain
transactions or actions contemplated by the Plan, or conditioning such
transactions or action on certain factors, shall not be required to be
reinstated in order to accomplish Reinstatement.
          “Rejection Claims” means claims of any non-Debtor counterparty to any
unexpired leased of nonresidential real property or executory contract arising
on account of the rejection of such lease or contract either during the
administration of these Chapter 11 Cases

 

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under section 365 of the Bankruptcy Code or as a result of the occurrence of the
Effective Date of this Plan.
          “Releasees” means: (a) the directors, officers and employees of the
Debtors, in each case as of the Petition Date or that have become directors,
officers, or employees thereafter but prior to the Effective Date, and the
Debtors’ agents and Professionals; (b) the Junior DIP Agent and each of the
Junior DIP Lenders; (c) Charlesbank; (d) the Prepetition Lenders and the
Prepetition Agent; (e) the Senior DIP Agent and the Senior DIP Lenders; (f) the
Junior DIP Agent and the Junior DIP Lenders; (g) the Committee and its members
(solely in their capacity as Committee members); and (h) the respective current
and former officers, directors, employees, agents, stockholders, managers,
members, affiliates, partners, attorneys, advisors, investment bankers,
consultants and professionals of the parties identified in subclauses
(a) through (g); provided, however, that the foregoing released parties
identified in subclauses (a) through (g) above shall be released only from
liabilities arising out of actions taken in such capacity.
          “Reorganized Debtors” means Reorganized TLC Canada, Reorganized TLC
USA, and Reorganized TLC MSI on and after the Effective Date.
          “Reorganized TLC Canada” means TLC Canada on and after the Effective
Date.
          “Reorganized TLC USA” means TLC USA on and after the Effective Date.
          “Reorganized TLC MSI” means TLC MSI on and after the Effective Date.
          “Schedule of Rejected Contracts” means the schedule listing certain
executory contracts and unexpired leases to be rejected by the Debtors as of the
Effective Date, which schedule shall be included in the Plan Supplement.
          “Schedules” means the schedules of assets and liabilities and
statements of financial affairs Filed on January 5, 2010 by any of the Debtors
in the Chapter 11 Cases, as required by section 521 of the Bankruptcy Code, as
the same may have been or may be amended, modified or supplemented.
          “Secured Claim” means any Claim arising before the Petition Date that
is: (a) secured in whole or part, as of the Petition Date, by a Lien which is
valid, perfected and enforceable under applicable law on Property in which the
Debtors’ respective Estates has an interest and is not subject to avoidance
under the Bankruptcy Code or applicable non-bankruptcy law, or (b) subject to
setoff under section 553 of the Bankruptcy Code, but, with respect to both case
(a) and (b), only to the extent of each such Estate’s interest in the value of
the assets or Property securing any such Claim or the amount subject to setoff,
as the case may be.
          “Securities Act” means the Securities Act of 1933, as amended.
          “Senior DIP Agent” means Cantor Fitzgerald Securities, in its capacity
as agent under the Senior DIP Facility.

 

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          “Senior DIP Facility” means the debtor-in-possession financing
facility provided by the Senior Agent and the Senior Lenders pursuant to that
certain Senior Secured Superpriority Debtor In Possession Credit Agreement dated
as of December 23, 2009 among the Senior DIP Agent and the Debtors.
          “Senior DIP Lenders” means the lender parties to the Senior DIP
Facility.
          “Senior Management” means the Chief Executive Officer, Chief Financial
Officer, and the Chief Operating Officer, and such other executives and
employees designated by the Buyer Parties. The Reorganized Debtors’ senior
management shall be substantially the same as the Debtors’ senior management on
the date immediately prior to the Effective Date.
          “Senior Management Contracts” means: (a) certain of the existing
employment and severance agreements with Senior Management which shall be
assumed by the Debtors as of the Effective Date (each as they may be amended
with the approval of the Buyer Parties); and (b) any new employment agreements
with Senior Management which shall be subject to the approval of the Debtors and
the Buyer Parties and which shall become effective as of the Effective Date. The
form of the Senior Management Contracts will be Filed under seal with the
Bankruptcy Court in connection with the Filing of the Plan Supplement.
          “Subordinated Claims” means any and all claims subordinated pursuant
to section 510 of the Bankruptcy Code or pursuant to an order of the Bankruptcy
Court.
          “Tax” means any tax, charge, fee, levy, impost or other assessment by
any federal, state, local or foreign governmental authority, including, without
limitation, income, excise, property, sales, transfer, employment, payroll,
franchise, profits, license, use, ad valorem, estimated, severance, stamp,
occupation and withholding tax, together with any interest, penalties, fines or
additions attributable to, imposed on, or collected by any such federal, state,
local or foreign governmental authority.
          “TLC Canada” means TLC Vision Corporation, a New Brunswick
Corporation.
          “TLC USA” means TLC Vision (USA) Corporation, a Delaware Corporation.
          “TLC MSI” means TLC Management Services Inc., a Delaware Corporation.
          “TLC Canada Common Stock and Interests” means all authorized, issued
and outstanding shares of common stock of, and Interests in, TLC Canada, as of
the Petition Date, including, without limitation, all issued, outstanding and
unexpired options, warrants, conversion, privilege or other legal or contractual
rights to acquire shares of TLC Canada Common Stock or Interests. TLC Canada
Common Stock and Interests also includes any contingent, disputed or
unliquidated Claims related to or in connection with any of the foregoing.
          “TLC MSI Common Stock and Interests” means all authorized, issued and
outstanding shares of common stock of, and Interests in, TLC MSI, as of the
Petition Date, including, without limitation, all issued, outstanding and
unexpired options, warrants, conversion, privilege or other legal or contractual
rights to acquire shares of TLC MSI Common

 

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Stock or Interests. TLC MSI Common Stock and Interests also includes any
contingent, disputed or unliquidated Claims related to or in connection with any
of the foregoing.
          “TLC USA Common Stock and Interests” means all authorized, issued and
outstanding shares of common stock of, and Interests in, TLC USA, as of the
Petition Date, including, without limitation, all issued, outstanding and
unexpired options, warrants, conversion, privilege or other legal or contractual
rights to acquire shares of TLC USA Common Stock or Interests. TLC USA Common
Stock and Interests also includes any contingent, disputed or unliquidated
Claims related to or in connection with any of the foregoing.
          “Unclaimed Property” means any distribution of Cash or any other
Property made to the Holder of an Allowed Claim pursuant to the Plan that:
(a) is returned to the Reorganized Debtors as undeliverable and no appropriate
forwarding address is received within the later of (a) one (1) year after the
Effective Date and (b) one (1) year after such distribution is made to such
Holder, or (b) in the case of a distribution made in the form of a check, is not
negotiated and no request for reissuance is made as provided for in Section 5.06
of the Plan.
          “Unimpaired” means any Claim that is not Impaired within the meaning
of section 1124 of the Bankruptcy Code.
          “United States Trustee” means the United States Trustee appointed
under section 581(a)(3) of title 28 of the United States Code to serve in the
District of Delaware.
          “U.S. Trustee’s Fee Claims” means any fees assessed against the
Debtors’ Estates pursuant to section 1930(a)(6) of title 28 of the United States
Code.
          “Vision Source, L.P.” means the Debtors’ optometric franchising
segment that provides marketing, practice development and purchasing power to
independently owned and operated practices in the U.S. and Canada.
          “Voting Agent” means Epiq Bankruptcy Solutions, LLC.
          Section 1.02. Rules of Interpretation. All references to “the Plan”
herein shall be construed, where applicable, to include references to this
document and all its exhibits, appendices, schedules and annexes, if any (and
any amendments thereto made in accordance with the Bankruptcy Code), including
the Plan Supplement. Whenever from the context it appears appropriate, each term
stated in either the singular or the plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and the neuter. The words “herein,” “hereof,”
“hereto,” “hereunder,” and other words of similar import refer to the Plan as a
whole and not to any particular paragraph, subparagraph, or clause contained in
the Plan. 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. The captions
and headings in the Plan are for convenience of reference only and shall not
limit or otherwise affect the provisions hereof. Any term used in the Plan that
is not defined in the Plan, either in Article I hereof or elsewhere, but that is
used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning
assigned to that term in (and shall be construed in accordance with the rules of
construction under) the

 

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Bankruptcy Code or the Bankruptcy Rules (with the Bankruptcy Code controlling in
the case of a conflict or ambiguity). 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. In computing any period of time
prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) and
Section 13.17 hereof shall apply, but Bankruptcy Rule 9006(a) shall govern.
          Section 1.03. Exhibits. All Exhibits to the Plan, including the Plan
Supplement, are incorporated into and are a part of the Plan as if set forth in
full herein, regardless of when Filed.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
          Section 2.01. Generally. Pursuant to section 1122 of the Bankruptcy
Code, set forth below is a designation of Classes of Claims and Interests. A
Claim or an Interest is classified in a particular Class only to the extent that
the Claim or Interest qualifies within the description of the Class and is
classified in a different Class to the extent the Claim or Interest qualifies
within the description of that different Class. A Claim or Interest is placed in
a particular Class for the purpose of receiving distributions pursuant to the
Plan only to the extent that such Claim or Interest is an Allowed Claim or an
Allowed Interest in that Class and such Claim or Interest has not been paid,
released, settled or otherwise satisfied prior to the Effective Date.
          Section 2.02. Unclassified Claims. In accordance with section
1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims
are not classified and are excluded from the Classes designated in this
Article II of the Plan. The Junior DIP Claims likewise are not classified and
are excluded from the Classes designated in this Article II of the Plan. The
treatment accorded Administrative Claims, Priority Tax Claims and Junior DIP
Claims is set forth in Article III of the Plan.
          Section 2.03. Classification of Claims Against and Interests in TLC
USA.
               (a) Unimpaired Classes. The Plan classifies the following
Unimpaired Claims that are not entitled to vote to accept or reject the Plan.
Pursuant to section 1126(f) of the Bankruptcy Code, each Holder of a Claim in
the following Classes is conclusively presumed to have accepted the Plan on
account of such Claims and is not entitled to vote to accept or reject the Plan:
                    (i) Class A1 shall consist of all Other Secured Claims
(subject to Section 3.02).
                    (ii) Class A2 shall consist of all Essential Trade Claims.
                    (iii) Class A3 shall consist of Other Priority Claims.

 

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                    (iv) Class A4 shall consist of all Prepetition Lender
Secured Claims.
               (b) Impaired Classes Entitled to Vote. The Plan classifies the
following Classes as Impaired Classes that may receive a distribution under the
Plan and that are entitled to vote to accept or reject the Plan:
                    (i) Class A5 shall consist of the General Unsecured Claims.
                    (ii) Class A6 shall consist of Medical Pending Litigation
Claims.
               (c) Impaired Classes Deemed to Reject. The Plan classifies the
following Impaired Classes of Interests and Claims as Impaired Classes that are
not entitled to vote to accept or reject the Plan. Pursuant to section 1126(g)
of the Bankruptcy Code, each Holder of an Interest or Claim in these Classes is
conclusively presumed to have rejected the Plan on account of such Interests or
Claims, because the Plan does not entitle the Holders of such Interests and
Claims to receive or retain any property under the Plan on account of such
Interests or Claims. Accordingly, Holders of such Interests and Claims are not
entitled to vote to accept or reject the Plan:
                    (i) Class A7 shall consist of all Subordinated Claims.
                    (ii) Class A8 shall consist of all Intercompany Claims.
                    (iii) Class A9 shall consist of all TLC USA Common Stock and
Interests.
          Section 2.04. Classification of Claims Against and Interests in TLC
Canada.
               (a) Unimpaired Classes. The Plan classifies the following
Unimpaired Claims that are not entitled to vote to accept or reject the Plan.
Pursuant to section 1126(f) of the Bankruptcy Code, each Holder of a Claim in
the following Classes is conclusively presumed to have accepted the Plan on
account of such Claims and is not entitled to vote to accept or reject the Plan:
                    (i) Class B1 shall consist of all Other Secured Claims
(subject to Section 3.02).
                    (ii) Class B2 shall consist of all Other Priority Claims.

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                    (iii) Class B3 shall consist of all Essential Trade Claims.
                    (iv) Class B4 shall consist of all Prepetition Lender
Secured Claims.
               (b) Impaired Classes Entitled to Vote. The Plan classifies the
following Classes as Impaired Classes that may receive a distribution under the
Plan and that are entitled to vote to accept or reject the Plan:
                    (i) Class B5 shall consist of the General Unsecured Claims.
                    (ii) Class B6 shall consist of Medical Pending Litigation
Claims.
               (c) Impaired Classes Deemed to Reject. The Plan classifies the
following Impaired Classes of Interests and Claims as Impaired Classes that are
not entitled to vote to accept or reject the Plan. Pursuant to section 1126(g)
of the Bankruptcy Code, each Holder of an Interest or Claim in this Classes is
conclusively presumed to have rejected the Plan on account of such Interests or
Claims, because the Plan does not entitle the Holders of such Interests and
Claims to receive or retain any property under the Plan on account of such
Interests or Claims (unless, with respect to Class B8, Classes B5 and B6 vote in
favor of the Plan, in which case it will be entitled to the treatment set forth
in Section 3.07(h). Accordingly, Holders of such Interests and Claims are not
entitled to vote to accept or reject the Plan:
                    (i) Class B7 shall consist of all Intercompany Claims.
                    (ii) Class B8 shall consist of all TLC Canada Common Stock
and Interests.
          Section 2.05. Classification of Claims Against and Interests in TLC
MSI.
               (a) Unimpaired Classes. The Plan classifies the following
Unimpaired Claims and Unimpaired Interests that are not entitled to vote to
accept or reject the Plan. Pursuant to section 1126(f) of the Bankruptcy Code,
each Holder of a Claim or Interest in the following Classes is conclusively
presumed to have accepted the Plan on account of such Claims or Interests and is
not entitled to vote to accept or reject the Plan:
                    (i) Class C1 shall consist of all Other Secured Claims
(subject to Section 3.02).

 

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                    (ii) Class C2 shall consist of all Other Priority Claims.
                    (iii) Class C3 shall consist of the General Unsecured
Claims.
                    (iv) Class C4 shall consist of all TLC MSI Common Stock and
Interests.
                    (v) Class C5 shall consist of Prepetition Lender Secured
Claims.
               (b) Impaired Classes Deemed to Reject. The Plan classifies the
following Impaired Class of Claims as an Impaired Class that is not entitled to
vote on the Plan. Pursuant to section 1126(g) of the Bankruptcy Code, each
Holder of an Interest in this Class is conclusively presumed to have rejected
the Plan on account of such Claims, because the Plan does not entitle the
Holders of such Claims to receive or retain any property under the Plan on
account of such Claims. Accordingly, Holders of such Claims are not entitled to
vote to accept or reject the Plan:
                    (i) Class C6 shall consist of all Intercompany Claims.
               (c) Impaired Classes Entitled to Vote. The Plan classifies the
following Classes as Impaired Classes that may receive a distribution under the
Plan and that are entitled to vote to accept or reject the Plan:
                    (i) Class C7 shall consist of Medical Pending Litigation
Claims.
ARTICLE III.
PROVISIONS FOR TREATMENT OF CLASSES OF
CLAIMS AND INTERESTS
          Section 3.01. Satisfaction of Claims and Interests. The treatment of
and consideration to be received by Holders of Allowed Claims or Allowed
Interests pursuant to this Article III and the Plan shall be in full
satisfaction, settlement, release, extinguishment and discharge of their
respective Claims against or Interests in the Debtors and the Debtors’
respective Estates, except as otherwise provided in the Plan or the Confirmation
Order.
          Section 3.02. Unclassified Claims, Classified Unimpaired and Impaired
Claims and Classified Interests. Administrative Claims and Priority Tax Claims
are treated in accordance with section 1129(a)(9)(A) and section 1129(a)(9)(C)
of the Bankruptcy Code, respectively. Such Claims are Unimpaired under the Plan
and, in accordance with

 

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section 1123(a)(1) of the Bankruptcy Code, are not designated as Classes of
Claims for purposes of this Plan and for purposes of sections 1123, 1124, 1126
and 1129 of the Bankruptcy Code. The Junior DIP Claims likewise are Unimpaired
under the Plan and are not designated as a Class of Claims for purposes of this
Plan. In addition, Claims and Interests in Classes A1, A2, A3, A4, B1, B2, B3,
B4, C1, C2, C3, C4 and C5 are classified as Classes of Claims and Interests that
are Unimpaired. In accordance with section 1126(f) of the Bankruptcy Code, the
Holders of Claims or Interests in such Classes are conclusively presumed to have
accepted the Plan and are not entitled to vote to accept or reject the Plan.
However, in the event that holders of Claims in Classes A1, B1 and/or C1 are
treated as set forth in Sections 3.06(a)(iv), 3.07(a)(iv) or 3.08(a)(iv), they
shall be entitled to vote on the Plan. Claims in Classes A5, A6, B5, B6 and C7
are Impaired, and the Holders thereof are entitled to vote to accept or reject
the Plan. Claims and Interests in Classes A7, A8, A9, B7, B8 and C6 are Impaired
under the Plan, and the Holders thereof will receive no distribution on account
of their respective Claims and, pursuant to section 1126(g) of the Bankruptcy
Code, such Holders are conclusively presumed to have rejected the Plan and are
not entitled to vote to accept or reject the Plan.
          Section 3.03. Administrative Claims. Administrative Claims are
Unimpaired. Unless otherwise provided for herein, each Holder of an Allowed
Administrative Claim, including Professional Fee Claims, shall receive in full
satisfaction, settlement, release, extinguishment and discharge of such Claim:
(a) the amount of such unpaid Allowed Claim in Cash on or as soon as reasonably
practicable after the later of (i) the Effective Date, (ii) the date on which
such Administrative Claim becomes Allowed, or (iii) a date agreed to in writing
by the Debtors or Reorganized Debtors, as the case may be, and the Holder of
such Administrative Claim; or (b) such other treatment on such other terms and
conditions as may be agreed upon in writing by the Holder of such Claim and the
Debtors or the Reorganized Debtors, as the case may be, or as the Bankruptcy
Court may order; provided, however, that Allowed Administrative Claims
representing (i) liabilities, accounts payable or other Claims, or obligations
incurred in the ordinary course of business of the Debtors consistent with past
practices subsequent to the Petition Date, or (ii) contractual liabilities
incurred subsequent to the Petition Date, whether or not incurred in the
ordinary course of business, shall be paid or performed by the Debtors or the
Reorganized Debtors in accordance with the terms and conditions of the
particular transactions relating to such liabilities and any agreements relating
thereto.
          Section 3.04. Priority Tax Claims. Priority Tax Claims are Unimpaired.
Each Holder of an Allowed Priority Tax Claim shall receive, at the option of the
Debtors or the Reorganized Debtors, as the case may be, in full satisfaction,
settlement, release, extinguishment and discharge of such Priority Tax Claim:
(a) the amount of such unpaid Allowed Priority Tax Claim in Cash on or as soon
as reasonably practicable after the later of (i) the Effective Date, (ii) the
date on which such Priority Tax Claim becomes Allowed and (iii) a date agreed to
by the Debtors or Reorganized Debtors, as the case may be, and the Holder of
such Priority Tax Claim; (b) equal Cash payments from the Reorganized Debtors
made on the last Business Day of every three (3) month period following the
Effective Date, over a period not exceeding five (5) years after the assessment
of the tax on which such Priority Tax Claim is based, totaling the principal
amount of such Priority Tax Claim plus simple interest on any outstanding
balance from the Effective Date calculated at the interest rate publicly quoted
on the Effective Date for obligations backed by the full faith and credit of the
United States of America maturing in ninety (90) days; or (c) such other
treatment on such other terms and conditions as may be agreed upon in writing

 

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by the Holder of such Priority Tax Claim and the Debtors or the Reorganized
Debtors, as the case may be, or as the Bankruptcy Court may order. The Debtors
or the Reorganized Debtors, as the case may be, shall have the right, in their
sole discretion, to prepay at any time, in whole or in part, any Allowed
Priority Tax Claim without premium or penalty of any sort or nature.
Notwithstanding any provision to the contrary in the Plan, the implementing Plan
documents or the Order confirming the Plan: (1) nothing shall affect the rights
of the United States Internal Revenue Service (the “IRS”) to assert setoff and
recoupment; and (2) the Priority Tax Claims of the IRS shall be paid on a no
less than quarterly basis within five (5) years of the Petition Date and
interest shall accrue on such claims from the Effective Date at the rate and
method set forth in 26 U.S.C. Sections 6621 and 6622. Notwithstanding the
foregoing, unless Her Majesty in Right of Canada agrees otherwise, each Allowed
Canadian Priority Tax Claim shall be paid within six (6) months of the Canadian
Sanction Order, or as the Canadian Court may order.
          Section 3.05. Junior DIP Claims. The Junior DIP Claims are Unimpaired.
The Junior DIP Claims shall be paid in full in cash (a) on or as soon as
practicable after the Effective Date or (b) upon such other terms as the
Reorganized Debtors and the Holders of such Claims may agree.
          Section 3.06. Treatment of Claims Against and Interests in TLC USA:
               (a) Class A1: Other Secured Claims. Class A1 Other Secured Claims
are Unimpaired (unless such Claims are treated pursuant to clause (iv) in the
following sentence, in which case such Claims are Impaired and shall be entitled
to vote). Each Holder of an Allowed Class A1 Other Secured Claim shall receive,
in the sole discretion of the Debtors or the Reorganized Debtors, as the case
may be, in full satisfaction, settlement, release, extinguishment and discharge
of such Claim: (i) Cash equal to the amount of such Allowed Other Secured Claim
on or as soon as practicable after the later of (x) the Effective Date, (y) the
date that such Other Secured Claim becomes Allowed, and (z) a date agreed to by
the Debtors or the Reorganized Debtors, as the case may be, and the Holder of
such Class A1 Other Secured Claim; (ii) treatment such that such Other Secured
Claim is Reinstated; (iii) the Property securing such Other Secured Claim, with
any deficiency to result in a General Unsecured Claim; or (iv) such other
treatment on such other terms and conditions as may be agreed upon in writing by
the Holder of such Claim and the Debtors or Reorganized Debtors, as the case may
be, or as the Bankruptcy Court may order.
               (b) Class A2: Essential Trade Claims. Class A2 Essential Trade
Claims are Unimpaired. Each Holder of an Allowed Class A2 Essential Trade Claim
shall receive in full satisfaction, settlement, release, extinguishment and
discharge of such Claim: (i) the amount of such unpaid Allowed Claim in Cash on
or as soon as reasonably practicable after the later of (x) the Effective Date,
(y) the date on which such Class A2 Claim becomes Allowed, and (z) a date agreed
to by the Debtors or the Reorganized Debtors, as the case may be, and the Holder
of such Class A2 Essential Trade Claim; or (ii) such other treatment on such
other terms and conditions as may be agreed upon in writing by the Holder of
such Claim and the Debtors or the Reorganized Debtors, as the case may be, or as
the Bankruptcy Court may order.
               (c) Class A3: Other Priority Claims. Class A3 Other Priority
Claims are Unimpaired. Each Holder of an Allowed Class A3 Other Priority Claim
shall receive in full

 

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satisfaction, settlement, release, extinguishment and discharge of such Claim:
(i) the amount of such unpaid Allowed Claim in Cash on or as soon as reasonably
practicable after the later of (x) the Effective Date, (y) the date on which
such Class A3 Claim becomes Allowed, and (z) a date agreed to by the Debtors or
the Reorganized Debtors, as the case may be, and the Holder of such Class A3
Claim; or (ii) such other treatment on such other terms and conditions as may be
agreed upon in writing by the Holder of such Claim and the Debtors or the
Reorganized Debtors, as the case may be, or as the Bankruptcy Court may order.
               (d) Class A4: Prepetition Lender Secured Claims. Class A4
Prepetition Lender Secured Claims are Unimpaired. Each Holder of an Allowed
Class A4 Prepetition Lender Secured Claim shall receive, on or as soon as
reasonably practicable after the Effective Date, in full satisfaction,
settlement, release, extinguishment and discharge of such Claim, cash in an
amount equal to such Allowed Class A4 Prepetition Lender Secured Claim.
               (e) Class A5: General Unsecured Claims. Class A5 General
Unsecured Claims are Impaired. Each Holder of an Allowed Class A5 General
Unsecured Claim shall receive, on or as soon as reasonably practicable after the
Effective Date, in full satisfaction, settlement, release, extinguishment and
discharge of such Claim, its pro rata share of: (i) Cash in the amount of 90% of
the aggregate amount of all Allowed Class A5 Claims, up to a maximum amount
(when combined with the aggregate amount of all Allowed Class B5 Claims) of
$9,000,000; and (ii) from the General Unsecured Creditor Note, 10% of all
Allowed Class A5 Claims, up to a maximum amount (when combined with the
aggregate amount of all Allowed Class B5 Claims) of $3,000,000; provided,
however, that in the event that Holders of Allowed Class A5 Claims are paid in
full pursuant to this Section 3.06(e), any remaining balance from the foregoing
shall be distributed pro rata to Holders of Allowed Claims in Class B5.
               (f) Class A6: Medical Pending Litigation Claims. Class A6 Medical
Pending Litigation Claims are Impaired. On the Effective Date, the Holders of
Class A6 Medical Pending Litigation Claims shall be entitled to payment
exclusively by way of any insurance coverage held by TLC USA or its affiliates
covering such Medical Pending Litigation Claims.
               (g) Class A7: Subordinated Claims. Class A7 Subordinated Claims
are Impaired. Holders of Class A7 Subordinated Claims shall not receive or
retain any Property under the Plan on account of such Subordinated Claims. On
the Effective Date, all Subordinated Claims shall be extinguished.
               (h) Class A8: Intercompany Claims. Class A8 Intercompany Claims
are Impaired. Holders of Class A8 Intercompany Claims shall not receive or
retain any Property under the Plan on account of such Intercompany Claims. On
the Effective Date, all Intercompany Claims shall be extinguished, provided that
claims owing by non-debtor subsidiaries and affiliates to TLC USA shall not be
affected by this Plan.
               (i) Class A9: TLC USA Common Stock and Interests. Class A9 TLC
USA Common Stock and Interests are Impaired. Holders of Class A9 TLC USA Common
Stock and Interests shall not receive or retain any Property under the Plan on
account of such

 

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Common Stock and Interests. All TLC USA Common Stock and Interests shall be
transferred to the Buyer Parties pursuant to the Plan Sponsor Agreement.
          Section 3.07. Treatment of Claims Against and Interests in TLC Canada:
               (a) Class B1: Other Secured Claims. Class B1 Other Secured Claims
are Unimpaired (unless such Claims are treated pursuant to clause (iv) in the
following sentence, in which case such Claims are Impaired and shall be entitled
to vote). Each Holder of an Allowed Class B1 Other Secured Claim shall receive,
in the sole discretion of the Debtors or the Reorganized Debtors, as the case
may be, in full satisfaction, settlement, release, extinguishment and discharge
of such Claim: (i) Cash equal to the amount of such Allowed Other Secured Claim
on or as soon as practicable after the later of (x) the Effective Date, (y) the
date that such Other Secured Claim becomes Allowed, and (z) a date agreed to by
the Debtors or the Reorganized Debtors, as the case may be, and the Holder of
such Class B1 Other Secured Claim; (ii) treatment such that such Other Secured
Claim is Reinstated; (iii) the Property securing such Other Secured Claim, with
any deficiency to result in a General Unsecured Claim; or (iv) such other
treatment on such other terms and conditions as may be agreed upon in writing by
the Holder of such Claim and the Debtors or Reorganized Debtors, as the case may
be, or as the Bankruptcy Court may order.
               (b) Class B2: Other Priority Claims. Class B2 Other Priority
Claims are Unimpaired. Each Holder of an Allowed Class B2 Other Priority Claim
shall receive in full satisfaction, settlement, release, extinguishment and
discharge of such Claim: (i) the amount of such unpaid Allowed Claim in Cash on
or as soon as reasonably practicable after the later of (x) the Effective Date,
(y) the date on which such Class B2 Claim becomes Allowed, and (z) a date agreed
to by the Debtors or the Reorganized Debtors, as the case may be, and the Holder
of such Class B2 Claim; or (ii) such other treatment on such other terms and
conditions as may be agreed upon in writing by the Holder of such Claim and the
Debtors or the Reorganized Debtors, as the case may be, or as the Bankruptcy
Court may order. Notwithstanding the foregoing, each Allowed Canadian Priority
Employee Claim shall be paid immediately after the Canadian Sanction Order, or
as the Canadian Court may order.
               (c) Class B3: Essential Trade Claims. Class B3 Essential Trade
Claims are Unimpaired. Each Holder of an Allowed Class B3 Essential Trade Claim
shall receive in full satisfaction, settlement, release, extinguishment and
discharge of such Claim: (i) the amount of such unpaid Allowed Claim in Cash on
or as soon as reasonably practicable after the later of (x) the Effective Date,
(y) the date on which such Class B3 Claim becomes Allowed, and (z) a date agreed
to by the Debtors or the Reorganized Debtors, as the case may be, and the Holder
of such Class B3 Essential Trade Claim; or (ii) such other treatment on such
other terms and conditions as may be agreed upon in writing by the Holder of
such Claim and the Debtors or the Reorganized Debtors, as the case may be, or as
the Bankruptcy Court may order.
               (d) Class B4: Prepetition Lender Secured Claims. Class B4
Prepetition Lender Secured Claims are Unimpaired. Each Holder of an Allowed
Class B4 Prepetition Lender Secured Claim shall receive, on or as soon as
reasonably practicable after the Effective Date, in full satisfaction,
settlement, release, extinguishment and discharge of such Claim, cash in an
amount equal to such Allowed Class B4 Prepetition Lender Secured Claim.

 

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               (e) Class B5: General Unsecured Claims. Class B5 General
Unsecured Claims are Impaired. Class B5 General Unsecured Claims are Impaired.
Each holder of an Allowed Class B5 General Unsecured Claim shall receive, in
full satisfaction, settlement, release, extinguishment, and discharge of such
Claim, its pro rata share of: (i) (i) Cash in the amount of 90% of the aggregate
amount of all Allowed Class B5 Claims, up to a maximum amount (when combined
with the aggregate amount of all Allowed Class A5 Claims) of $9,000,000; and
(ii) from the General Unsecured Creditor Note, 10% of all Allowed Class B5
Claims, up to a maximum amount (when combined with the aggregate amount of all
Allowed Class A5 Claims) of $3,000,000; provided, however, that in the event
that Holders of Allowed Class B5 Claims are paid in full pursuant to this
Section 3.07(e), any remaining balance from the foregoing shall be distributed
pro rata to Holders of Allowed Claims in Class A5.
               (f) Class B6: Medical Pending Litigation Claims. Class B6 Medical
Pending Litigation Claims are Impaired. On the Effective Date, the Holders of
Class B6 Medical Pending Litigation Claims shall be entitled to payment
exclusively by way of any insurance coverage held by TLC Canada or its
affiliates covering such Medical Pending Litigation Claims.
               (g) Class B7: Intercompany Claims. Class B7 Intercompany Claims
are Impaired. Holders of Class B7 Intercompany Claims shall not receive or
retain any Property under the Plan on account of such Intercompany Claims. On
the Effective Date, all Intercompany Claims shall be extinguished, provided that
claims owing by non-debtor subsidiaries and affiliates to TLC Canada shall not
be affected by this Plan.
               (h) Class B8: TLC Canada Common Stock and Interests. Class B8 TLC
Canada Common Stock and Interests are Impaired and deemed to have rejected the
Plan. The Holders of the TLC Canada Common Stock and Interests shall retain such
Common Stock and Interests although TLC Canada shall no longer have any assets
following the consummation of the Plan and Plan Sponsor Agreement. The Holders
of the TLC Canada Common Stock and Interests shall not receive or retain any
Property under the Plan on account of such Common Stock and Interests; provided,
however, that solely in the event that Holders of Class B5 General Unsecured
Claims and Class B6 Medical Pending Litigation Claims vote to accept the Plan,
each Holder of an Allowed Class B8 TLC Canada Common Stock and Interest shall
receive its pro rata share of a cash pool of $287,500.
          Section 3.08. Treatment of Claims Against and Interests in TLC MSI:
               (a) Class C1: Other Secured Claims. Class C1 Other Secured Claims
are Unimpaired (unless such Claims are treated pursuant to clause (iv) in the
following sentence, in which case such Claims are Impaired and shall be entitled
to vote). Each Holder of an Allowed Class C1 Other Secured Claim shall receive,
in the sole discretion of the Debtors or the Reorganized Debtors, as the case
may be, in full satisfaction, settlement, release, extinguishment and discharge
of such Claim: (i) Cash equal to the amount of such Allowed Other Secured Claim
on or as soon as practicable after the later of (x) the Effective Date, (y) the
date that such Other Secured Claim becomes Allowed, and (z) a date agreed to by
the Debtors or the Reorganized Debtors, as the case may be, and the Holder of
such Class C1 Other Secured Claim; (ii) treatment such that such Other Secured
Claim is Reinstated; (iii) the Property securing such Other Secured Claim, with
any deficiency to result in a General Unsecured Claim; or (iv) such

 

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other treatment on such other terms and conditions as may be agreed upon in
writing by the Holder of such Claim and the Debtors or Reorganized Debtors, as
the case may be, or as the Bankruptcy Court may order.
               (b) Class C2: Other Priority Claims. Class C2 Other Priority
Claims are Unimpaired. Each Holder of an Allowed Class C2 Other Priority Claim
shall receive in full satisfaction, settlement, release, extinguishment and
discharge of such Claim: (i) the amount of such unpaid Allowed Claim in Cash on
or as soon as reasonably practicable after the later of (x) the Effective Date,
(y) the date on which such Class C2 Claim becomes Allowed, and (z) a date agreed
to by the Debtors or the Reorganized Debtors, as the case may be, and the Holder
of such Class C2 Claim; or (ii) such other treatment on such other terms and
conditions as may be agreed upon in writing by the Holder of such Claim and the
Debtors or the Reorganized Debtors, as the case may be, or as the Bankruptcy
Court may order.
               (c) Class C3: General Unsecured Claims. Class C3 General
Unsecured Claims are Unimpaired. Each Holder of an Allowed Class C3 General
Unsecured Claim not satisfied as of the Effective Date of the Plan shall
receive, in full satisfaction, settlement, release, extinguishment and discharge
of such Claim: (i) the amount of such unpaid Allowed Claim in Cash on or as soon
as reasonably practicable after the later of (x) the Effective Date, (y) the
date on which such General Unsecured Claim becomes Allowed, or (z) a date agreed
to in writing by the Debtors or Reorganized Debtors, as the case may be, and the
Holder of such General Unsecured Claim; (ii) treatment such that such General
Unsecured Claim is Reinstated; or (iii) such other treatment on such other terms
and conditions as may be agreed upon in writing by the Holder of such Claim and
the Debtors or the Reorganized Debtors, as the case may be, or as the Bankruptcy
Court may order.
               (d) Class C4: TLC MSI Common Stock and Interests. Class C4 TLC
MSI Common Stock and Interests is Unimpaired. Holders of Allowed Class C4 TLC
MSI Common Stock and Interests shall retain their Interests.
               (e) Class C5: Prepetition Lender Secured Claims. Class C5
Prepetition Lender Secured Claims are Unimpaired. Each Holder of an Allowed
Class C5 Prepetition Lender Secured Claim shall receive, on or as soon as
reasonably practicable after the Effective Date, in full satisfaction,
settlement, release, extinguishment and discharge of such Claim, cash in an
amount equal to such Allowed Class C5 Prepetition Lender Secured Claim.
               (f) Class C6: Intercompany Claims. Class C6 Intercompany Claims
are Impaired. Holders of Class C6 Intercompany Claims shall not receive or
retain any Property under the Plan on account of such Intercompany Claims. On
the Effective Date, all Intercompany Claims shall be extinguished, provided that
claims owing by non-debtor subsidiaries and affiliates to TLC MSI shall not be
affected by this Plan.
               (g) Class C7: Medical Pending Litigation Claims. Class C7 Medical
Pending Litigation Claims are Impaired. On the Effective Date, the Holders of
Class C7 Medical Pending Litigation Claims shall be entitled to payment
exclusively by way of any insurance coverage held by TLC MSI or its affiliates
covering such Medical Pending Litigation Claims.

 

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ARTICLE IV.
ACCEPTANCE OR REJECTION OF THE PLAN; CRAMDOWN
          Section 4.01. Acceptance by Impaired Classes of Claims and Interests.
Pursuant to section 1126(c) of the Bankruptcy Code, an Impaired Class of Claims
shall have accepted the Plan if: (a) the Holders of at least two-thirds (2/3) in
dollar amount of the Allowed Claims actually voting in such Class (other than
Claims held by any Holder designated pursuant to section 1126(e) of the
Bankruptcy Code) have timely and properly voted to accept the Plan, and (b) more
than one-half (1/2) in number of the Holders of such Allowed Claims actually
voting in such Class (other than Claims held by any Holder designated pursuant
to section 1126(e) of the Bankruptcy Code) have timely and properly voted to
accept the Plan. No Class of Interests is entitled to vote on the Plan pursuant
to section 1126 of the Bankruptcy Code.
          Section 4.02. Voting Classes. Except as otherwise required by the
Bankruptcy Code or the Bankruptcy Rules or as otherwise provided in this
Section 4.02, the Holders of Claims against TLC USA in Classes A5 and A6,
Holders of Claims or Interests against TLC Canada in Classes B5 and B6, and
Holders of Claims against TLC MSI in Class C7 shall be entitled to vote to
accept or reject the Plan in accordance with Section 4.01 of the Plan. Classes
of Claims and Interests Unimpaired under the Plan (Classes A1, A2, A3, A4, B1,
B2, B3, B4, C1, C2, C3, C4 and C5) shall not be entitled to vote to accept or
reject the Plan, and shall be conclusively presumed to have accepted the Plan
pursuant to section 1126(f) of the Bankruptcy Code. However, in the event that
holders of Claims in Classes A1, B1 and C1 are treated as set forth in
Sections 3.06(a)(iv), 3.07(a)(iv) or 3.08(a)(iv), they shall be entitled to vote
on the Plan. The Classes of Claims and Interests that are Impaired that are
receiving no distribution under the Plan (Classes A7, A8, A9, B7, B8 and C6)
shall not be entitled to vote to accept or reject the Plan and shall be
conclusively presumed to have rejected the Plan. Administrative Claims, Priority
Tax Claims and the Junior DIP Claims are Unimpaired and not classified under the
Plan and hence are not entitled to vote to accept or reject the Plan.
          Section 4.03. Ballot Instructions. Each Holder of a Claim entitled to
vote on the Plan will be asked to complete and return a Ballot to the Voting
Agent, which will compile the votes so received. Any questions as to the
validity, form, and eligibility (including time of receipt) of Ballots will be
resolved by the Bankruptcy Court upon application or at the Confirmation
Hearing.
          Section 4.04. Cramdown. If all 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 (8) thereof, the Debtors intend to
request that the Bankruptcy Court confirm the Plan in accordance with section
1129(b) of the Bankruptcy Code, notwithstanding the requirements of section
1129(a)(8) thereof, on the bases that the Plan is fair and equitable, and does
not discriminate unfairly, with respect to each Class of Claims or Interests
that is Impaired under, and has not accepted or is deemed to have rejected, the
Plan.

 

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ARTICLE V.
PROVISIONS GOVERNING DISTRIBUTIONS
UNDER THE PLAN
          Section 5.01. Timing of Distributions. Except as set forth in
Section 5.03 below, distributions of Property will be made to Holders of Allowed
Claims and Allowed Interests in accordance with Article III of the Plan. If a
Claim or Interest is not an Allowed Claim or an Allowed Interest as of the
applicable distribution date, distributions will be made only if and when the
Claim or Interest is Allowed, and then in accordance with Article III of the
Plan and, with respect to the cure of defaults for assumed executory contracts
and unexpired leases, Section 6.02 of the Plan, and in each case, subject to
Article VIII of the Plan.
          Section 5.02. Distributions to Holders of Allowed Claims. The
Reorganized Debtors shall deliver to the Disbursing Agent sufficient Cash to
make the distributions to be made on the Effective Date to the Holders of
Allowed Claims entitled to receive Cash in accordance with Article III of the
Plan. Payments and other distributions to be made pursuant to the Plan will be
available from the funds held by the Reorganized Debtors as of the Effective
Date. If any dispute arises as to the identity of a Holder of an Allowed Claim
who is to receive any distribution, the Reorganized Debtors shall, in lieu of
making such distribution to such Holder, delay such distribution until the
disposition thereof shall be determined by Final Order of the Bankruptcy Court
or by written agreement among the interested parties to such dispute.
          Section 5.03. Delivery of Distributions. Distributions to Holders of
Allowed Claims shall be made by the Disbursing Agent: (a) at the last known
addresses 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 distributions 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; provided, however, that such notice be
received by the Disbursing Agent prior to such distribution becoming Unclaimed
Property. All distributions pursuant to the Plan shall be at the Reorganized
Debtors’ expense.
          Section 5.04. Method of Cash Distributions. Any Cash payment 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 agreement or applicable law at
the option of the Reorganized Debtors.
          Section 5.05. Fractional Dollars. Whenever any payment of a fraction
of a dollar would otherwise be called for, the actual payment shall reflect a
rounding of such fraction to the nearest whole dollars (rounding down in the
case of $0.50 or less and rounding up in the case of more than $0.50).
          Section 5.06. Failure to Negotiate Checks. Checks issued in respect of
distributions under the Plan shall be null and void if not negotiated within
sixty (60) days after the date of issuance. Any amounts returned to the
Reorganized Debtors in respect of such non-negotiated checks shall be held by
the Reorganized Debtors, as appropriate. Requests for reissuance for any such
check shall be made directly to the Reorganized Debtors 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 the later of one
(1) year after (a) the Effective Date or (b) the date that a particular Claim is
Allowed, 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

 

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date. Thereafter, all such amounts shall be deemed to be Unclaimed Property, in
accordance with Section 5.07 of the Plan, and all Holders of Claims in respect
of void checks shall be forever barred, estopped and enjoined from asserting a
claim to such funds in any manner against the Debtors or their respective assets
or the Reorganized Debtors or their respective assets.
          Section 5.07. Unclaimed Distributions. All Property distributed on
account of Claims must be claimed within the later of (a) one (1) year after the
Effective Date or (b) one (1) year after such distribution is made to such
Holder or, in the case of a distribution made in the form of a check, must be
negotiated and a request for reissuance be made as provided for in Section 5.06
of the Plan. All Unclaimed Property will be retained by and will revest in the
Reorganized Debtors and will no longer be subject to distribution. All full or
partial payments made by the Disbursing Agent and received by the Holder of a
Claim prior to the Effective Date will be deemed to be payments under the Plan
for purposes of satisfying the obligations of the Debtors pursuant to the Plan.
Nothing contained in the Plan shall require the Reorganized Debtors to attempt
to locate any Holder of an Allowed Claim other than by reviewing the records of
the Debtors or the Reorganized Debtors, as applicable, and any Claims filed in
these Cases. Pursuant to section 1143 of the Bankruptcy Code, all Claims in
respect of Unclaimed Property shall be deemed Disallowed and the Holder of any
Claim Disallowed in accordance with this Section 5.07 will be forever barred,
expunged, estopped and enjoined from asserting such Claim in any manner against
the Debtors or their respective assets or the Reorganized Debtors or their
respective assets.
          Section 5.08. Limitation on Distribution Rights. If a claimant holds
more than one Claim in any one Class, all Claims of the claimant in that Class
will be aggregated into one Claim and one distribution will be made with respect
to the aggregated Claim.
          Section 5.09. Compliance With Tax Requirements. In connection with
each distribution with respect to which the filing of an information return
(such as an Internal Revenue Service Form 1099 or 1042) or withholding is
required, the Reorganized Debtors shall file such information return with the
Internal Revenue Service and provide any required statements in connection
therewith to the recipients of such distribution or effect any such withholding
and deposit all moneys so withheld as required by law. With respect to any
Person 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 Debtors within thirty (30) days from the date
of such request, the Reorganized Debtors may, at their option, withhold the
amount required and distribute the balance to such Person or decline to make
such distribution until the information is received.
          Section 5.10. Documentation Necessary to Release Liens. Each Creditor
which is to receive a Cash distribution under the Plan in full satisfaction of a
Secured Claim shall not receive such distribution until such Creditor executes
and delivers any documents necessary to release all Liens arising under any
applicable security agreement or non-bankruptcy law (in recordable form if
appropriate) in connection with such Secured Claim and such other documents as
the Debtors or the Reorganized Debtors, as applicable, may reasonably request or
otherwise turns over and releases any and all Property of the Debtors that
secures or purportedly secures such Claim. Any such Holder that fails to execute
and deliver such release of liens within 120 days of the Effective Date shall be
deemed to have no further Claim against the

 

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Debtors, the Reorganized Debtors or their assets or Property in respect of such
Claim and shall not participate in any distribution hereunder on account of such
Claim. Notwithstanding the immediately preceding sentence, any such Holder of a
Disputed Claim shall not be required to execute and deliver such release until
at least the date that is 30 days after the date on which such Claim is Allowed
or Disallowed.
ARTICLE VI.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES; INDEMNIFICATION
OBLIGATIONS; BENEFIT PROGRAMS
          Section 6.01. Treatment of 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 Debtors and any Person or
Entity shall be deemed assumed by the Debtors as of the Effective Date, except
for any executory contract or unexpired lease that (a) has expired or terminated
pursuant to its own terms, (b) has previously been assumed, assumed and
assigned, or rejected pursuant to an order of the Bankruptcy Court on or prior
to the Confirmation Date, and, if necessary, by order of the Canadian Court,
(c) is the subject of a pending motion to assume, assume and assign, or reject
as of the Confirmation Date, or (d) is listed on the Schedule of Rejected
Contracts which shall be included with the Plan Supplement; provided, however,
that the Debtors shall have the right, with the consent of the Buyer Parties, at
any time prior to the Confirmation Date, to amend the Schedule of Rejected
Contracts upon notice to the counterparty to such contract or lease (a) to
delete any executory contract or unexpired lease listed therein, thus providing
for its assumption pursuant to this Section 6.01 or (b) to add any executory
contract or unexpired lease thereto, thus providing for its rejection pursuant
to this Section 6.01. The Confirmation Order (except as otherwise provided
therein) shall constitute an order of the Bankruptcy Court pursuant to section
365 of the Bankruptcy Code, effective as of the Effective Date, approving the
assumptions and rejections hereunder. Each contract and lease assumed pursuant
to this Section 6.01 shall be assumed only to the extent that any such contract
or lease constitutes an executory contract or unexpired lease. Assumption of a
contract or lease pursuant to this Section 6.01 shall not constitute an
admission by the Debtors or the Reorganized Debtors that such contract or lease
is an executory contract or unexpired lease or that the Debtors or the
Reorganized Debtors have any liability thereunder. All executory contracts and
unexpired leases that are assumed will be assumed under their present terms or
upon such terms as are agreed to in writing between the applicable Debtor and
the counterparty to the executory contract or unexpired lease; provided,
however, that any leases and executory contracts of TLC Canada that are assumed
under this Plan shall be deemed to be assigned to the Canadian Buyer. Each
executory contract and unexpired lease that is assumed and relates to the use,
ability to acquire, or occupancy of real property shall include: (a) all
modifications, amendments, supplements, restatements, or other agreements made
directly or indirectly by any agreement, instrument, or other document that in
any manner affect such executory contract or unexpired lease and (b) all
executory contracts or unexpired leases appurtenant to the premises, including
all easements, licenses, permits, rights, privileges, immunities, options,
rights of first refusal, powers, uses, reciprocal easement agreements, vaults,
tunnel or bridge agreements or franchises, and any other interests in real
estate or rights in rem related to such premises, unless any of the foregoing
agreements has been rejected pursuant to an order of the Bankruptcy Court.

 

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          Section 6.02. Cure of Defaults for Assumed Contracts and Leases.
Within fifteen (15) days after the Effective Date, the Reorganized Debtors shall
pay to the nondebtor parties to such executory contracts and unexpired leases
being assumed the cure amounts. The nondebtor parties to such executory
contracts and unexpired leases shall have thirty (30) days from receipt of such
cure amounts to object thereto. If any objections are filed, and cannot be
resolved by agreement, the Bankruptcy Court shall hold a hearing to determine
the cure amount with respect to the executory contract or unexpired lease
subject to the objection or to otherwise resolve such objection. Any party
failing to object (whether to the proposed cure amount or otherwise) within
thirty (30) days after receipt of the cure amount by the Reorganized Debtors
shall be forever barred from asserting, collecting, or seeking to collect from
the Reorganized Debtors any amounts in excess of the cure amount or from
otherwise objecting to the assumption, by the Debtors, of such executory
contract or unexpired lease. Notwithstanding the foregoing, or anything else in
this Article VI, with respect to any executory contract or unexpired lease which
is the subject of an objection, the Reorganized Debtors shall retain the right,
until five (5) Business Days after any order resolving the objection becomes a
Final Order, to reject such executory contract or unexpired lease.
          Section 6.03. Resolution of Objections to Assumption of Executory
Contracts and Unexpired Leases. Any party objecting to the Debtors’ proposed
assumption of an executory contract or unexpired lease on any grounds other than
the proposed cure amount, including, without limitation, the ability of the
Reorganized Debtors to provide “adequate assurance of future performance”
(within the meaning of section 365 of the Bankruptcy Code) under the contract or
lease to be assumed shall File and serve on counsel for the Debtors a written
objection to the assumption of such contract or lease not later than thirty
(30) days from service of notice of the Debtors’ intent to assume such executory
contract or unexpired lease. Service of such notice shall be sufficient if
served on the other party to the executory contract or unexpired lease at the
address indicated on (a) the contract or lease, (b) any proof of Claim filed by
such other party in respect of such contract or lease, or (c) the Reorganized
Debtors’ books and records; provided, however, that if such a notice is served
by the Reorganized Debtors to one of the foregoing addresses and is promptly
returned as undeliverable, the Reorganized Debtors shall attempt reservice of
the notice on an alternative address, if any, from the above listed sources.
Failure to File an objection within the time period set forth above shall
constitute an acknowledgement of the assumption and revestment of such contract
or lease, subject to payment of the cure amount, if any, including an
acknowledgment that the proposed assumption provided adequate assurance of
future performance. To the extent that any objections to the assumption of a
contract or lease are timely Filed and served and such objections are not
resolved between the Debtors and the objecting parties, the Bankruptcy Court
shall resolve such disputes at the Confirmation Hearing or as soon as reasonable
practicable thereafter. Notwithstanding the foregoing, or anything else in this
Article VI, with respect to any executory contract or unexpired lease which is
subject to an objection, the Reorganized Debtors shall retain the right, until
five (5) Business Days after any order resolving the objection becomes a Final
Order, to reject such executory contract or unexpired lease.
          Section 6.04. Bar Date for Rejection Claims. Rejection Claims arising
out of the rejection of any executory contract or unexpired lease pursuant to
Section 6.01 hereof must be filed with the Bankruptcy Court no later than the
later of thirty (30) days after the entry of an order rejecting such executory
contract or unexpired lease or the Bar Date. Any Claim not filed

 

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within such time period shall be forever barred. The Reorganized Debtors shall
have the exclusive right to object to any Claim arising out of the rejection of
an executory contract or unexpired lease pursuant to the terms of Section 8.05
of this Plan.
          Section 6.05. Treatment of Rejection Claims. The Bankruptcy Court
shall determine any Objections Filed in accordance with Section 8.05 hereof at a
hearing to be held on a date to be determined by the Bankruptcy Court. Subject
to any statutory limitation, including, but not limited to, the limitations
contained in sections 502(b)(6) and 502(b)(7) of the Bankruptcy Code, any Claims
arising out of the rejection of executory contracts and unexpired leases shall,
pursuant to section 502(g) of the Bankruptcy Code, be treated as Class A5, B5,
or C3 General Unsecured Claims, as appropriate, in accordance with
Sections 3.05, 3.06, or 3.07 of the Plan.
          Section 6.06. Executory Contracts and Unexpired Leases Entered Into
and Other Obligations Incurred After the Petition Date. On the Effective Date,
all contracts, leases, and other agreements entered into by any or all of the
Debtors on or after the Petition Date, which agreements have not been terminated
in accordance with their terms on or before the Effective Date, shall revest in
and remain in full force and effect as against the Reorganized Debtors and the
other parties to such contracts, leases and other agreements.
          Section 6.07. Modification of Change of Control Provisions. To the
extent any contracts of the Debtors contain provisions modifying their rights or
the rights of the subject counterparties, or give rise to rights or obligations
of the Debtors or such counterparties, as a result of a change in control of any
of the Debtors, such contracts are hereby deemed to be modified such that the
consummation of the transactions contemplated hereby, including the Plan Sponsor
Agreement, shall not modify or give rise to any such rights or obligations.
          Section 6.08. Reorganized Debtors’ Indemnification Obligations. To the
extent not inconsistent with the Plan, any obligations of the Debtors, pursuant
to their respective articles of incorporation or by-laws, applicable state law
or their specific agreement, to indemnify a Person with respect to all present
and future actions, suits and proceedings against the Debtors, the Reorganized
Debtors or such indemnified Person, based upon any act or omission related to
service with, or for or on behalf of, the Debtors or the Reorganized Debtors,
shall survive Confirmation of the Plan and shall not be impaired by Confirmation
of the Plan, but shall be deemed and treated as executory contracts that are
assumed and, as applicable, amended by the Debtors pursuant to the Plan and
section 365 of the Bankruptcy Code, except to the extent any such obligation has
been released, discharged or modified pursuant to the Plan. Such indemnification
obligations shall survive unaffected by the Plan and shall be performed and
honored by the Reorganized Debtors. The Debtors will purchase “tail” coverage to
their existing D&O insurance policies pursuant to Section 6.12 of the Plan
Sponsor Agreement.
          Section 6.09. Benefit Programs. Employees of TLC Canada to be
transferred to the Buyers will be given full credit for their years of service
with TLC Canada before the Effective Date for purposes of vesting and
eligibility to participate (but not accrual of benefits for any purpose) in
benefit plans, vacation and leave, severance and other programs of Buyer and its
Affiliates that are made available to such employees after the Effective Date.
Such employees shall cease to participate in TLC Canada’s benefit plans (other
than any Assumed Benefit Plans

 

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as defined in the Plan Sponsor Agreement) as at the Effective Date and shall
commence participation in the Buyers’ benefit plans as at the Effective Date. In
respect of any Assumed Benefit Plan, effective as of the Effective Date, TLC
Canada shall assign to the subject new employer the Assumed Benefit Plans and
all of its rights, duties, obligations and liabilities under and in relation to
the Assumed Benefit Plans and all related agreements. Buyer shall cause the
employer to accept such assignment and become the sponsor and administrator
(where applicable) of the Assumed Benefit Plans as of the Effective Date. Except
and to the extent previously assumed by an order of the Bankruptcy Court on or
before the Effective Date, all officer, director or employee compensation and
benefit programs of Debtors TLC USA and TLC MSI entered into before or after the
Petition Date and not since terminated, shall be deemed to be, and shall be
treated as though they are, executory contracts that are assumed under
Section 6.01 of the Plan, but only to the extent that rights under such programs
are held by such Debtors or Persons who are employees of the Debtors as of the
Effective Date, and the Debtors’ obligations under such programs to Persons who
are employees of the Debtors on the Effective Date shall survive Confirmation of
the Plan, except for (a) executory contracts or plans specifically rejected
pursuant to the Plan, and (b) executory contracts or plans that have previously
been rejected, are the subject of a motion to reject, or have been specifically
waived by the beneficiaries of any plans or contracts.
ARTICLE VII.
MEANS FOR IMPLEMENTATION OF THE PLAN
          Section 7.01. Corporate Action. The entry of the Confirmation Order
shall constitute authorization for the Debtors and the Reorganized Debtors to
take or to cause to be taken all corporate actions necessary or appropriate to
consummate and implement the provisions of the Plan prior to, on and after the
Effective Date, and all such actions taken or caused to be taken shall be deemed
to have been authorized and approved by the Bankruptcy Court, including, without
limitation, (a) the consummation of the transactions contemplated by the Plan
Sponsor Agreement; (b) the election of directors and officers in accordance with
Section 10.02 of the Plan; (c) the adoption of the New TLC USA Certificates of
Incorporation and By-Laws; (d) the execution and delivery of the new Senior
Management Contracts; (e) the adoption of the New Management Incentive Plan; and
(f) the filing of liquidation proceedings in the Canadian Court. All such
actions shall be deemed to have occurred and shall be in effect pursuant to
applicable non-bankruptcy law and the Bankruptcy Code, without any requirement
of further action by the stockholders or directors of the Debtors or the
Reorganized Debtors. On the Effective Date, the appropriate officers and
directors of the Debtors and the Reorganized Debtors are authorized and directed
to execute and deliver the agreements, documents and instruments contemplated by
the Plan and the Plan Supplement in the name and on behalf of the Debtors and
the Reorganized Debtors to effect the actions detailed herein.
          Section 7.02. Plan Funding. The funds to be utilized to make Cash
payments under this Plan have been and/or will be generated from, among other
things, payments made, funds available, or obligations assumed under the Plan
Sponsor Agreement, payments under the General Unsecured Creditor Note, the Cash
of the Debtors as of the Effective Date, and Cash generated from operations of
the Debtors or Reorganized Debtors.

 

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          Section 7.03. Plan Sponsor Agreement. On the Effective Date, the
transactions contemplated by the Plan Sponsor Agreement shall be consummated.
          Section 7.04. Articles of Organization. The New TLC USA Certificates
of Incorporation and By-Laws shall contain such provisions as are required to
satisfy the provisions of the Plan and the Bankruptcy Code and shall include,
among other things, (a) a prohibition on the issuance of nonvoting equity
securities to the extent, and only to the extent, required by section 1123(a)(6)
of the Bankruptcy Code, (b) provisions for a five (5) member Board of Directors
of Reorganized TLC USA consisting of initial members who will be identified in
the Plan Supplement, and (c) other provisions ordinary and customary in such
situations so long as they are not inconsistent with any of the provisions
contained in the foregoing (a) and (b).
          Section 7.05. Operations Between the Confirmation Date and the
Effective Date. The Debtors shall continue to operate as debtors-in-possession,
subject to the supervision of the Bankruptcy Court and in accordance with the
provisions of the Bankruptcy Code, during the period from the Confirmation Date
through and until the Effective Date.
          Section 7.06. Revesting of Assets. Except as otherwise expressly
provided in the Plan, pursuant to sections 1123(a)(5), 1123(b)(3) and 1141(b) of
the Bankruptcy Code, all Property comprising the Estates of each Debtor,
including, but not limited to, all Avoidance Actions and all Causes of Action
shall automatically be retained and revest in the relevant Reorganized Debtor or
its respective successor, free and clear of all Claims, Liens,
contractually-imposed restrictions, charges, encumbrances and Interests of
Creditors and equity security holders on the Effective Date, with all such
Claims, Liens, contractually-imposed restrictions, charges, encumbrances and
Interests being extinguished except as otherwise provided in the Plan and Plan
Sponsor Agreement. As of the Effective Date, each Reorganized Debtor may operate
its business and use, acquire and dispose of Property and settle and compromise
Claims or Interests without supervision of the Bankruptcy Court free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan and Confirmation Order. Without
limiting the foregoing, each Reorganized Debtor may pay the charges it incurs
for professional fees, disbursements, expenses, or related support services
after the Effective Date without any application to the Bankruptcy Court.
          Section 7.07. Approval of Agreements. The solicitation of votes on the
Plan shall be deemed a solicitation of the Holders of Claims for the approval of
all other agreements and transactions contemplated by the Plan and the Plan
Supplement. Entry of the Confirmation Order shall constitute approval of such
agreements and transactions and the Confirmation Order shall so provide.
          Section 7.08. Adoption or Assumption of Senior Management Contracts.
On the Effective Date, the Reorganized Debtors shall (i) assume existing Senior
Management Contracts (each as they may be amended with the approval of the Buyer
Parties), and (ii) shall enter into an employment agreement with Jim Tiffany,
current President and Chief Operating Officer, and Ellen Jo Plass (on terms and
conditions acceptable to the Buyer Parties).
          Section 7.09. Adoption of New Management Incentive Plan. On the
Effective Date, the Buyer Parties will adopt the New Management Incentive Plan.

 

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          Section 7.10. Corporate Structure Changes. Following the Effective
Date, the Reorganized Debtors shall have the same corporate structure as existed
prior to the Effective Date, as may be modified in a manner acceptable by the
Buyer Parties; provided, however, that Reorganized TLC Canada shall cease all
operations and the Information Officer of TLC Canada appointed by the Canadian
Court shall be authorized, pursuant to powers set out in the Confirmation Order
and Canadian Sanction Order, to liquidate any remaining assets of TLC Canada and
distribute the net proceeds of such assets to Holders of Allowed Class B5
Claims.
ARTICLE VIII.
PRESERVATION OF CAUSES OF ACTION AND
RIGHT TO DEFEND AND CONTEST
          Section 8.01. Preservation of Rights. Except to the extent that any
Claim is Allowed during the Chapter 11 Cases or expressly by this Plan, nothing,
including, but not limited to, the failure of the Debtors or the Reorganized
Debtors to object to a Claim or Interest for any reason during the pendency of
the Chapter 11 Cases, shall affect, prejudice, diminish or impair the rights and
legal and equitable defenses of the Debtors or the Reorganized Debtors with
respect to any Claim or Interest, including, but not limited to, all rights of
the Debtors or Reorganized Debtors to contest or defend themselves against such
Claims or Interests in any lawful manner or forum when and if such Claim or
Interest is sought to be enforced by the Holder thereof.
          Section 8.02. Rights of Action. Except as otherwise provided in the
Plan, all Causes of Action, including Avoidance Actions, shall automatically be
retained and preserved and will revest in the Reorganized Debtors. Pursuant to
section 1123(b)(3) of the Bankruptcy Code, the Reorganized Debtors (as
representatives of the Debtors’ Estates) will retain and have the exclusive
right to enforce and prosecute such Causes of Action against any Entity, that
arose before the Effective Date, other than those expressly released or
compromised as part of or pursuant to the Plan.
          Section 8.03. Setoffs. Except to the extent that any Claim is Allowed,
the Debtors or the Reorganized Debtors, 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, Causes of Action and claims of every type and nature whatsoever
which the Estates, the Debtors or the Reorganized Debtors may have against their
Creditors, but 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 Debtors of any such claims or Causes of Action the Debtors may
have against such Creditors, and all such claims and Causes of Action which are
not expressly released pursuant to the Plan shall be reserved to and retained by
the Reorganized Debtors.
          Section 8.04. No Payment or Distribution Pending Allowance. All
references to Claims and amounts of Claims refer to the amount of the Claim
Allowed by agreement of the Debtors or Reorganized Debtors and the Holder of
such Claim, by operation of law, by Final Order, or by this Plan.
Notwithstanding any other provision in the Plan, no payment or distribution
shall be made on account of or with respect to any Claim to the extent it is a
Disputed Claim unless and until the Disputed Claim becomes an Allowed Claim.

 

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          Section 8.05. Resolution of Disputed Claims. Unless otherwise ordered
by the Court after notice and a hearing, the Reorganized Debtors shall have the
exclusive right, on and after the Effective Date, to File Objections to Claims
(except those specifically Allowed by this Plan) and shall serve a copy of each
such objection upon the holder of the Claim to which the objection is made as
soon as practicable, but in no event later than the Claims Objection Deadline.
The foregoing deadlines may be extended by order of the Court. An Objection to
any Claim shall be deemed properly served on the Holder thereof if the
Reorganized Debtors effect service in any of the following manners: (a) in
accordance with Rule 4 of the Federal Rules of Civil Procedure, as modified and
made applicable by Federal Rule of Bankruptcy Procedure 7004; (b) by first class
mail, postage prepaid, on the signatory on the proof of claim or other
representative identified in the proof of Claim or any attachment thereto; or
(c) by first class mail, postage prepaid, on any counsel that has appeared on
the Holder’s behalf in the Chapter 11 Cases.
ARTICLE IX.
CONDITIONS TO CONFIRMATION AND CONSUMMATION OF THE PLAN
          Section 9.01. Conditions to Confirmation. The Confirmation Order shall
not be entered unless and until the following conditions have occurred or have
been duly waived (if waivable) pursuant to Section 9.03 below:
               (a) the Plan, including any amendments, modifications, or
supplements thereto, and all documentation contemplated by the Plan, shall be in
form and substance reasonably satisfactory to the Buyer Parties;
               (b) no default or event of default shall have occurred under the
Junior DIP Loan Agreement;
               (c) the Bankruptcy Court shall have entered the Plan Sponsor
Order;
               (d) the Canadian Court shall have entered the Canadian
Recognition Order;
               (e) all material third party consents and waivers shall have been
obtained, reasonably satisfactory to the Buyer Parties; and
               (f) the Debtors shall not be in breach of the Plan Sponsor
Agreement.
          Section 9.02. Conditions to Effective Date. The Plan shall not be
consummated, and the Effective Date shall not occur, unless and until the
following conditions have occurred or have been duly waived (if waivable)
pursuant to Section 9.03 below:
               (a) the Bankruptcy Court shall have approved the information
contained in the Disclosure Statement as adequate;
               (b) the Confirmation Order, which order shall be in form and
substance satisfactory to the Debtors and Buyer Parties, shall have been entered
and shall not be stayed by order of a court of competent jurisdiction;

 

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               (c) the Bankruptcy Court shall have entered an order confirming
the Plan, which order shall be in form and substance satisfactory to the Debtors
and Buyer Parties
               (d) all documents and agreements required to be executed or
delivered under the Plan on or prior to the Effective Date shall have been
executed and delivered by the parties thereto;
               (e) the Bankruptcy Court shall have entered an order
(contemplated to be part of the Confirmation Order) authorizing and directing
the Debtors and the Reorganized Debtors to take all actions necessary or
appropriate to enter into, implement, and consummate the contracts, instruments,
releases, indentures and other agreements or documents created, amended,
supplemented, modified or adopted in connection with the Plan;
               (f) the Canadian Court shall have entered the Canadian Sanction
Order;
               (g) the Debtors’ obligations under the Junior DIP Financing shall
have been paid in full;
               (h) the New Debtors Certificates of Incorporation shall have been
filed with the applicable authority of each Reorganized Debtors’ jurisdiction of
incorporation or organization in accordance with such jurisdiction’s applicable
law;
               (i) all authorizations, consents and regulatory approvals
required, if any, in connection with the Plan’s effectiveness shall have been
obtained;
               (j) the conditions to closing under the Plan Sponsor Agreement
shall have been satisfied;
               (k) the Buyer Parties shall have issued the General Unsecured
Creditor Note to the Disbursing Agent;
               (l) the Senior Management Contracts shall have been entered into
by the parties thereto (as applicable); and
               (m) all Plan Documents shall have been adopted, shall be in full
force and effect and shall be in form and substance acceptable to the Debtors
and the Buyer Parties.
          Section 9.03. Waiver of Conditions to Confirmation and Consummation.
The conditions to confirmation in Section 9.01 and to consummation in
Section 9.02 (other than 9.02(a) and (b)) may be waived at any time by a writing
signed by an authorized representative of each of the Debtors and the Buyer
Parties without notice or order of the Bankruptcy Court or any further action
other than proceeding to consummation of the Plan.
          Section 9.04. Effect of Failure or Absence of Waiver of Conditions
Precedent to the Effective Date of the Plan. In the event that one or more of
the conditions specified in Section 9.02 of the Plan have not occurred (or been
waived) within ninety (90) days after entry of the Confirmation Order, upon
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(a) the Confirmation Order, automatically and without further order of the
Bankruptcy Court, shall be deemed, vacated, null and void, with no force or
legal effect whatsoever, (b) no distributions under the Plan shall be made,
(c) all Property of the Estates shall revest in the Debtors’ Estates, (d) the
Debtors and all Holders of Claims and Interests shall be restored to the status
quo ante as of the day immediately preceding the Confirmation Date as though the
Confirmation Date never occurred, and (e) the Debtors’ obligations with respect
to the Claims and Interests shall remain unchanged and nothing contained herein
shall constitute or be deemed a waiver or release of any Claims or Interests by
or against the Debtors or any other Person or Entity or to prejudice in any
manner the rights of the Debtors or any Person or Entity in any further
proceedings involving the Debtors.
ARTICLE X.
OPERATION AND MANAGEMENT OF THE REORGANIZED DEBTORS
          Section 10.01. Post-Effective Date Operation of Business. From and
after the Effective Date, the Reorganized Debtors will continue to exist as
separate corporate entities, in accordance with the applicable law in the
respective jurisdictions in which they are incorporated and pursuant to the New
TLC USA Certificates of Incorporation and By-Laws and the existing Certificates
of Incorporation and By-Laws of TLC Canada and TLC MSI.
          Section 10.02. Post Effective Date Officers and Directors. On the
Effective Date, the officers of the Reorganized Debtors (a) shall be the
individuals with such titles as set forth in the Plan Supplement, and (b) will
be reimbursed for all reasonable costs and expenses, and will receive
compensation, as set forth in the Senior Management Contracts or such other
employment arrangements, with all such payments to be made by the respective
Reorganized Debtors. The members of each of the Boards of Directors of the
Reorganized Debtors, which shall serve starting on the Effective Date, will be
identified in the Plan Supplement.
ARTICLE XI.
EFFECTS OF CONFIRMATION
          Section 11.01. Discharge. To the fullest extent permitted by
applicable law (including, without limitation, section 105 of the Bankruptcy
Code), and except as otherwise provided in the Plan or in the Confirmation
Order, all consideration distributed under the Plan shall be in exchange for,
and in complete satisfaction, settlement, discharge and release of, all Claims
of any nature whatsoever against the Debtors or any of their assets or
Properties, regardless of whether any Property shall have been distributed or
retained pursuant to the Plan on account of such Claims. Upon the Effective
Date, and except as expressly contemplated in this Plan, the Debtors, and each
of them, shall: be deemed discharged and released under section 1141(d)(1)(A) of
the Bankruptcy Code from any and all Claims, including, but not limited to,
demands and liabilities that arose before the Effective Date, debts (as such
term is defined in section 101(12) of the Bankruptcy Code), Liens, security
interests, and encumbrances of and against all Property of the respective
Estates, the Debtors, or the Reorganized Debtors that arose prior to the
Effective Date, including, without limitation, all debts of the kind specified
in sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not
(i) such Claim has been Allowed pursuant to section 502 of the Bankruptcy Code,
or (ii) the Holder of such Claim has voted to accept the Plan. Further, as of
the Effective Date, all entities, including, without

 

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limitation, all Holders of Claims or Interests, shall be barred and enjoined
from asserting against the Debtors or the Reorganized Debtors, their successors
or their Property any other or further Claims, debts, rights, Causes of Action,
liabilities or Interests relating to the Debtors based upon any act, omission,
transaction or other activity of any nature that occurred prior to the Effective
Date, except for those obligations expressly created by, or reserved in, this
Plan. In accordance with the foregoing, except as provided in the Plan or the
Confirmation Order, the Confirmation Order shall be a judicial determination of
discharge of all such Claims and other debts and liabilities against the
Debtors, pursuant to sections 524 and 1141 of the Bankruptcy Code, and such
discharge and termination shall void any judgment obtained against the Debtors
or the Reorganized Debtors at any time, to the extent that such judgment relates
to a discharged Claim or terminated Interest.
          Section 11.02. Injunction.
               (a) Discharged Claims and Terminated Interests. Except as
otherwise expressly provided for in the Plan or the Confirmation Order and to
the fullest extent authorized or provided by the Bankruptcy Code, including
sections 524 and 1141 thereof, the entry of the Confirmation Order shall,
provided that the Effective Date occurs, permanently enjoin all Persons that
have held, currently hold or may hold a Claim or other debt or liability that is
discharged or an Interest or other right of an equity security holder that is
Impaired or terminated pursuant to the terms of the Plan from taking any of the
following actions against the Debtors, the Reorganized Debtors or their Property
on account of any such discharged Claims, debts or liabilities or such
terminated Interests or rights: (i) commencing, conducting or continuing in any
manner, directly or indirectly, any suit, action or other proceeding of any
kind; (ii) enforcing, levying, attaching, collecting or otherwise recovering in
any manner or by any means, whether directly or indirectly, any judgment, award,
decree or order; (iii) creating, perfecting or enforcing in any manner, directly
or indirectly, any Lien or encumbrance of any kind; (iv) asserting any setoff,
offset, right of subrogation or recoupment of any kind, directly or indirectly,
against any debt, liability or obligation due to the Debtors or the Reorganized
Debtors; and (v) proceeding in any manner in any place whatsoever, including
employing any process, that does not conform to or comply with or is
inconsistent with the provisions of the Plan.
               (b) Released Claims. As of the Effective Date, the Confirmation
Order shall constitute an injunction permanently enjoining any Person that has
held, currently holds or may hold a Claim, demand, debt, right, Cause of Action
or liability that is released pursuant to Section 11.04 of the Plan from
enforcing or attempting to enforce any such Claim, demand, debt, right, Cause of
Action or liability against any (i) Debtor, (ii) Reorganized Debtor,
(iii) Releasee, or (iv) Exculpated Person, or any of their respective Property,
based on, arising from or relating to, in whole or in part, any act, omission,
or other occurrence taking place on or prior to the Effective Date with respect
to or in any way relating to the Chapter 11 Cases, all of which claims, demands,
debts, rights, Causes of Action or liabilities shall be deemed released on and
as of the Effective Date; provided, however, this injunction shall not apply to
(a) any claims Creditors may assert under the Plan to enforce their rights
thereunder to the extent permitted by the Bankruptcy Code or (b) any claims
Creditors or other third parties may have against each other, which claims are
not related to the Debtors and the Reorganized Debtors, it being understood,
however, that any defenses, offsets or counterclaims of any kind or nature

 

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whatsoever which the Debtors may have or assert in respect of any of the claims
of the type described in (a) or (b) of this proviso are fully preserved.
          Section 11.03. Exculpation. None of the Debtors, Reorganized Debtors
or Exculpated Persons shall have or incur any liability to any Person,
including, without limitation, any Holder of a Claim or Interest or any other
party in interest, or any of their respective agents, employees,
representatives, financial advisors, attorneys or affiliates or any of their
successors or assigns, for: (i) any act taken or omission made in connection
with, relating to, or arising out of, the Chapter 11 Cases; (ii) Filing,
negotiating, prosecuting, administering, formulating, implementing, confirming
or consummating this Plan; or (iii) the Property to be distributed under this
Plan, including all 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 Debtors or
these Chapter 11 Cases; provided, however, that the foregoing exculpation shall
not apply to any act of gross negligence or willful misconduct.
          Section 11.04. Releases.
               (a) Releases by Debtors. Effective as 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, the Debtors
and the Reorganized Debtors, in their individual capacities and as debtors in
possession, will be deemed to have forever released, waived and discharged the
Releasees from any and all claims, obligations, suits, judgments, damages,
demands, debts, rights, Causes of Action and liabilities (other than the rights
of the Debtors or Reorganized Debtors to enforce the Plan and the contracts,
instruments, releases, and other agreements or documents delivered thereunder),
whether for tort, 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 in part on any
act, omission, transaction, event or other occurrence, including actions in
connection with indebtedness for money borrowed by the Debtors, taking place on
or prior to the Effective Date in any way relating to any of the Debtors, the
Reorganized Debtors, the Chapter 11 Cases, or the Plan, and the subject matter
of, or the transactions or events giving rise to, any claim or interest that is
treated in the Plan (other than claims based on gross negligence or willful
misconduct) arising on or prior to the Effective Date, that the Debtors or the
Reorganized Debtors have, had or may have, provided, however, that no Releasee
shall be released or discharged from any Claims, obligations, suits, judgments,
debts or Causes of Action arising out of or in connection with indebtedness for
money borrowed by any such person from any of the Debtors, provided¸ however,
that such release provisions will not impact, modify or limit the ability of the
Debtors or the Reorganized Debtors to take any defensive measure, including,
without limitation, as to impleading any party into such matter, necessary to
respond to any litigation, adversary proceeding or other proceeding that may be
brought by any other party in interest to the bankruptcy proceeding or in
relation thereto, as necessary to fully and properly protect their interests.
Notwithstanding anything to the contrary contained herein, the Plan shall not
release former officers of the Debtors from any continuing obligations the
former officers owe to the

 

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Debtors under employment, separation, severance, non-competition, non-disclosure
or proprietary rights agreements existing between the Debtors and the former
officers.
               (b) Releases by Holders of Claims and Interests. Effective as of
the Effective Date, and except as otherwise provided in the Plan or the
Confirmation Order, in consideration for the obligations of the Debtors under
the Plan and the payments, contracts, instruments, releases, agreements or
documents to be entered into or delivered in connection with the Plan, each
Holder of a Claim or Interest and any Affiliate of any such Holder (as well as
any trustee or agent on behalf of each such Holder) that either affirmatively
votes in favor of the Plan or is deemed to have accepted this Plan pursuant to
section 1126(f) of the Bankruptcy Code, shall be deemed to have forever waived,
released and discharged (i) the Debtors, (ii) the Reorganized Debtors, and
(iii) the Releasees from any and all claims, obligations, suits, judgments,
damages, demands, debts, rights, causes of action and liabilities, whether for
tort, contract, violations of federal or state securities laws or otherwise, or
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 in part on any act,
omission, transaction, event or other occurrence taking place on or prior to the
Effective Date in any way relating to any of the Debtors or the Plan that such
person or entity has, had or may have against the Debtors, the Releasees, the
Junior DIP Lenders and the Junior DIP Agent, and each of their respective
present or former directors, affiliates, officers, employees, attorneys,
accountants, underwriters, investment bankers, professionals, financial advisors
and agents (acting in such capacity and excluding claims based on gross
negligence or willful misconduct); provided however that, the foregoing
provision will not impact, modify or limit the ability of any such party to take
any defensive measure, including, without limitation, as to impleading any party
into such matter, necessary to respond to any litigation, adversary proceeding
or other proceeding that may be brought by any other party in interest to the
bankruptcy proceeding or in relation thereto, as necessary to fully and properly
protect its interests.
          Section 11.05. Indemnification. To the extent not inconsistent with
the Plan or the Confirmation Order and to the fullest extent permitted by
applicable law, including, but not limited to, the extent provided in their
constituent documents, contracts (including, but not limited to, employment
agreement or indemnification agreement), statutory law or common law, the
Reorganized Debtors will indemnify, hold harmless and reimburse the Exculpated
Persons from and against any and all losses, claims, Causes of Action, damages,
fees, expenses, liabilities and actions: (a) for any act taken or omission made
in good faith in connection with or in any way related to negotiating,
formulating, implementing, confirming or consummating the Plan, the Disclosure
Statement, or any contract, instrument, release or other agreement or document
created in connection with the Plan or the administration of the Chapter 11
Cases; or (b) for any act or omission in connection with or arising out of the
administration of the Plan or the Property to be distributed under the Plan or
the operations or activities of the Reorganized Debtors, and any Claims of any
such Exculpated Person against the Debtors or the Reorganized Debtors on account
of such indemnification obligations shall be unaltered and Unimpaired within the
meaning of section 1124(1) of the Bankruptcy Code, except that none of the
Debtors or the Reorganized Debtors shall have any obligation to indemnify any
Exculpated Person for any acts or omissions that constitute gross negligence or
willful misconduct as such is finally determined by a court of competent
jurisdiction. Such indemnification obligations shall survive unaffected

 

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by entry of the Confirmation Order, irrespective of whether such indemnification
is owed for an act or event occurring before or after the Petition Date.
          Section 11.06. Other Documents and Actions. The Debtors and the
Reorganized Debtors are authorized to execute such documents and take such other
action as is necessary to effectuate the transactions provided for in the Plan.
          Section 11.07. Term of Injunctions or Stays. Unless otherwise provided
herein or in the Confirmation Order, all injunctions or stays provided for in
the Chapter 11 Cases under sections 105(a) 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.
          Section 11.08. Preservation of Insurance. Except as necessary to be
consistent with the Plan, the Plan and the discharge provided herein shall not
diminish or impair: (a) the enforceability of insurance policies that may cover
Claims against the Debtors or any other Person or Entity; or (b) the
continuation of workers’ compensation programs in effect, including
self-insurance programs.
          Section 11.09. Guaranties. Notwithstanding the existence of guaranties
by the Debtors of obligations of any Entity or Entities, and the Debtors’ joint
obligations with another Entity or Entities with respect to the same
obligations, all Claims against the Debtors based upon any such guaranties shall
be satisfied, discharged and released in the manner provided in this Plan and
the Holders of Claims shall be entitled to only one distribution with respect to
any given obligation of the Debtors.
          Section 11.10. Subordination Rights. Any distributions under the Plan
shall be received and retained free of and from any obligations to hold or
transfer the same to any other Creditor, and shall not be subject to levy,
garnishment, attachment or other legal process by any Holder by reason of
claimed contractual subordination rights and such subordination rights shall be
waived and the Confirmation Order shall constitute an injunction enjoining any
Person from enforcing or attempting to enforce any contractual, legal or
equitable subordination rights to Property distributed under the Plan, in each
case other than as provided in the Plan.
          Section 11.11. No Successor Liability. Except as otherwise expressly
provided in the Plan, the Debtors and the Reorganized Debtors do not, pursuant
to the Plan or otherwise, assume, agree to perform, pay, or indemnify or
otherwise have any responsibilities for any liabilities or obligations of the
Debtors relating to or arising out of the operations of or assets of the
Debtors, whether arising prior to, on, or after the Effective Date. The
Reorganized Debtors are not, and shall not be, successors to the Debtors by
reason of any theory of law or equity, and none shall have any successor or
transferee liability of any kind or character, except that the Reorganized
Debtors shall assume the obligations specified in the Plan and the Confirmation
Order.
ARTICLE XII.
RETENTION OF JURISDICTION
          Section 12.01. Exclusive Jurisdiction of Bankruptcy Court.
Notwithstanding the entry of the Confirmation Order and the occurrence of the
Effective Date, the Bankruptcy Court

 

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shall retain after the Effective Date exclusive jurisdiction of all matters
arising out of, arising in or related to the Chapter 11 Cases to the fullest
extent permitted by applicable law, including, without limitation, jurisdiction
to:
               (a) classify or establish the priority or secured or unsecured
status of any Claim (whether Filed before or after the Effective Date and
whether or not contingent, Disputed or unliquidated) or resolve any dispute as
to the treatment of any Claim pursuant to the Plan;
               (b) grant or deny any applications for allowance of compensation
or reimbursement of expenses pursuant to sections 330, 331 or 503(b) of the
Bankruptcy Code or otherwise provided for in the Plan, for periods ending on or
before the Effective Date;
               (c) determine and resolve any matters related to the assumption,
assumption and assignment or rejection of any executory contract or unexpired
lease to which any Debtor is a party or with respect to which any Debtor may be
liable, and to hear, determine and, if necessary, liquidate any Claims arising
therefrom;
               (d) ensure that all payments due under the Plan, including,
without limitation, payments of Allowed Administrative Claims, and performance
of the provisions of the Plan are accomplished as provided herein and resolve
any issues relating to distributions to Holders of Allowed Claims pursuant to
the provisions of the Plan;
               (e) construe, take any action and issue such orders, prior to and
following the Confirmation Date and consistent with section 1142 of the
Bankruptcy Code, as may be necessary for the enforcement, implementation,
execution and consummation of the Plan and all contracts, instruments, releases,
and other agreements or documents created in connection with the Plan,
including, without limitation, the Disclosure Statement and the Confirmation
Order, for the maintenance of the integrity of the Plan and protection of the
Reorganized Debtors in accordance with sections 524 and 1141 of the Bankruptcy
Code following consummation;
               (f) determine and resolve any cases, controversies, suits or
disputes that may arise in connection with the consummation, interpretation,
implementation or enforcement of the Plan Sponsor Agreement, the Plan (and all
Exhibits to the Plan and the Plan Supplement) or the Confirmation Order,
including the indemnification and injunction provisions set forth in and
contemplated by the Plan Sponsor Agreement, the Plan or the Confirmation Order,
or any Entity’s rights arising under or obligations incurred in connection
therewith;
               (g) hear any application of the Debtors or Reorganized Debtors to
modify the Plan before or after the Effective Date pursuant to section 1127 of
the Bankruptcy Code and Section 13.04 hereof or modify the Disclosure Statement,
the Confirmation Order or any contract, instrument, release, or other agreement
or document created in connection with the Plan, the Disclosure Statement or the
Confirmation Order, or remedy any defect or omission or reconcile any
inconsistency in any Bankruptcy Court order, the Plan, the Disclosure Statement,
the Confirmation Order or any contract, instrument, release, indenture or other
agreement or document created in connection with the Plan, the Disclosure
Statement or the Confirmation

 

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Order, in such manner as may be necessary or appropriate to consummate the Plan,
to the extent authorized by the Bankruptcy Code and the Plan;
               (h) issue injunctions, enter and implement other orders or take
such other actions as may be necessary or appropriate to restrain interference
by any Entity with consummation, implementation or enforcement of the Plan or
the Confirmation Order;
               (i) enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified, stayed,
reversed, revoked or vacated;
               (j) determine any other matters that may arise in connection with
or relating to the Plan Sponsor Agreement, the Plan, the Disclosure Statement,
the Confirmation Order or any contract, instrument, release, or other agreement
or document created in connection with the Plan Sponsor Agreement, the Plan, the
Disclosure Statement or the Confirmation Order, except as otherwise provided in
the Plan;
               (k) determine such other matters and for such other purposes as
may be provided in the Confirmation Order;
               (l) hear and determine any other matters related hereto and not
inconsistent with chapter 11 of the Bankruptcy Code;
               (m) hear and determine disputes arising in connection with the
interpretation, implementation or enforcement of the Plan;
               (n) enter a final decree closing the Chapter 11 Cases;
               (o) determine and resolve any and all controversies relating to
the rights and obligations of the Disbursing Agent in connection with the
Chapter 11 Cases;
               (p) allow, disallow, determine, liquidate or estimate any Claim,
including the compromise, settlement and resolution of any request for payment
of any Claim, the resolution of any Objections to the allowance of Claims and to
hear and determine any other issue presented hereby or arising hereunder,
including during the pendency of any appeal relating to any Objection to such
Claim (to the extent permitted under applicable law);
               (q) permit the Debtors and the Reorganized Debtors to recover all
assets of the Debtors and Property of their respective Estates, wherever
located;
               (r) hear and determine any motions or contested matters involving
taxes, tax refunds, tax attributes and tax benefits and similar or related
matters with respect to the Debtors or the Debtors’ respective Estates arising
prior to the Effective Date or relating to the period of administration of the
Chapter 11 Cases, including, without limitation, matters concerning federal,
state and local taxes in accordance with sections 346, 505 and 1146 of the
Bankruptcy Code;
               (s) hear and determine any motions, applications, adversary
proceedings, contested matters and other litigated matters pending on, Filed or
commenced after

 

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the Effective Date that may be commenced by the Debtors or the Reorganized
Debtors thereafter, including Avoidance Actions, proceedings with respect to the
rights of the Debtors or their Estates to recover Property under sections 542,
543 or 553 of the Bankruptcy Code, or proceedings to otherwise collect to
recover on account of any claim or Cause of Action that the Debtors may have;
and
               (t) hear any other matter not inconsistent with the Bankruptcy
Code.
          Section 12.02. Failure of Bankruptcy Court to Exercise Jurisdiction.
If the Bankruptcy Court abstains from exercising or declines to exercise
jurisdiction over any matter arising under, arising in or related to the
Debtors, including with respect to the matters set forth above in Section 12.01
hereof, this Article XII shall not prohibit or limit the exercise of
jurisdiction by any other court having competent jurisdiction with respect to
such subject matter.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
          Section 13.01. Binding Effect of Plan. The provisions of the Plan
shall be binding upon and inure to the benefit of the Debtors, the Estates, the
Reorganized Debtors, any Holder of any Claim or Interest treated herein or any
Person named or referred to in the Plan, and each of their respective heirs,
executors, administrators, representatives, predecessors, successors, assigns,
agents, officers and directors, and, to the fullest extent permitted under the
Bankruptcy Code and other applicable law, each other Person affected by the
Plan.
          Section 13.02. Withdrawal of the Plan. The Debtors reserve the right,
at any time prior to Confirmation of the Plan, though subject to the terms of
the Plan Sponsor Agreement, to withdraw the Plan. If the Plan is withdrawn, the
Plan shall be null and void and have no force and effect. In such event, nothing
contained herein shall be deemed to constitute a waiver or release of any claims
by or against the Debtors or any other Person or to prejudice in any manner the
rights of the Debtors or any Person in any further proceedings involving the
Debtors.
          Section 13.03. Final Order. Except as otherwise expressly provided in
the Plan, any requirement in the Plan for a Final Order may be waived by the
Debtors (with the consent of the Buyer Parties) or, after the Effective Date,
the Reorganized Debtors upon written notice to the Bankruptcy Court. No such
waiver shall prejudice the right of any party in interest to seek a stay pending
appeal of any order that is not a Final Order.
          Section 13.04. Modification of the Plan. The Debtors may alter, amend
or modify the Plan (with the consent of the Buyer Parties) in accordance with
section 1127 of the Bankruptcy Code or as otherwise permitted at any time prior
to the Confirmation Date. After the Confirmation Date and prior to the
substantial consummation of the Plan, and in accordance with the provisions of
section 1127(b) of the Bankruptcy Code and the Bankruptcy Rules, the Debtors may
(with the consent of the Buyer Parties), so long as the treatment of Holders of
Claims or Interests under the Plan is not adversely affected, institute
proceedings in the Bankruptcy Court to remedy any defect or omission or to
reconcile any inconsistencies in the Plan, the Disclosure Statement or the
Confirmation Order and any other matters as may be necessary to carry out the

 

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purposes and effects of the Plan; provided, however, prior notice of such
proceedings shall be served in accordance with Bankruptcy Rules 2002 and 9014.
          Section 13.05. Business Days. If any payment or act under the Plan is
required to be made or performed on a date that is not a Business Day, then the
making of such payment or the performance of such act may be completed on the
next succeeding Business Day, but shall be deemed to have been completed as of
the required date.
          Section 13.06. Severability. Should the Bankruptcy Court determine,
prior to the Confirmation Date, that any provision of the Plan is either illegal
on its face or illegal as applied to any Claim or Interest, such provision shall
be unenforceable as to all Holders of Claims or Interests or to the specific
Holder of such Claim or Interest, as the case may be, as to which such provision
is illegal. Unless otherwise determined by the Bankruptcy Court, such a
determination of unenforceability shall in no way limit or affect the
enforceability and operative effect of any other provision of the Plan. The
Debtors reserve the right not to proceed with Confirmation or consummation of
the Plan if any such ruling occurs. In the event that the Canadian Court does
not enter an accompanying order that includes the approval of
Sections 3.07(e)(2) and 3.07(h) of this Plan, such provisions are expressly
severed from this Plan.
          Section 13.07. Governing Law. EXCEPT TO THE EXTENT THAT THE BANKRUPTCY
CODE OR BANKRUPTCY RULES OR OTHER FEDERAL LAWS ARE APPLICABLE, AND SUBJECT TO
THE PROVISIONS OF ANY CONTRACT, INSTRUMENT, RELEASE, OR OTHER AGREEMENT OR
DOCUMENT ENTERED INTO IN CONNECTION WITH THE PLAN, THE CONSTRUCTION,
IMPLEMENTATION AND ENFORCEMENT OF THE PLAN AND ALL RIGHTS AND OBLIGATIONS
ARISING UNDER THE PLAN SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
CONFLICTS-OF-LAW PRINCIPLES WHICH WOULD APPLY THE LAW OF A JURISDICTION OTHER
THAN THE STATE OF DELAWARE.
          Section 13.08. Dissolution of Committee. On the Effective Date, any
Committee shall be automatically dissolved and all of its members, Professionals
and agents shall be deemed released of their duties, responsibilities and
obligations, and shall be without further duties, responsibilities and authority
in connection with the Debtors, the Chapter 11 Cases, the Plan or its
implementation.
          Section 13.09. Payment of Fees and Expenses of the Junior DIP Agent
and Junior DIP Lenders. The Debtors or the Reorganized Debtors (as applicable)
shall pay the reasonable fees and expenses incurred by the Junior DIP Agent and
the Junior DIP Lenders in connection with the Chapter 11 Cases and the
performance of their duties pursuant to the terms of the Plan Sponsor Agreement
(as long as such duties are performed prior to the Effective Date) in accordance
with the provisions of the Junior DIP Order and without further Order of the
Bankruptcy Court.
          Section 13.10. Payment of Statutory Fees. All U.S. Trustee’s Fee
Claims, as determined, if necessary, by the Bankruptcy Court at the hearing
pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before the
Effective Date.

 

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          Section 13.11. Post-Confirmation Operating Reports. The Debtors or the
Reorganized Debtors, as applicable, shall continue to file quarterly operating
reports as required by the United States Trustee until such time as an order is
entered under section 350(a) of the Bankruptcy Code closing the Bankruptcy
Cases.
          Section 13.12. Notices. Any notice required or permitted to be
provided under this Plan to the Debtors or the Reorganized Debtors, or any
request for information with respect to the Plan, shall be in writing and served
by either (a) certified mail, return receipt requested, postage prepaid,
(b) hand delivery or (c) reputable overnight delivery service, freight prepaid,
to be addressed as follows:
TLC Vision (USA) Corporation
16305 Swingley Ridge Road
Chesterfield, MO 63017
Attn:William McManus
Email: wmcmanus@cdgco.com
With a copy to:
Proskauer Rose LLP
70 West Madison Street
Chicago, Illinois 60602
Attn: Mark K. Thomas
Email: mthomas@proskauer.com
          Section 13.13. Filing of Additional Documents. On or before
substantial consummation of the Plan, the Debtors shall issue, execute, deliver,
and File with the Bankruptcy Court or record any agreements and other documents,
and take any action as may be necessary or appropriate to effectuate, consummate
and further evidence the terms and conditions of the Plan.
          Section 13.14. Section 1125 of the Bankruptcy Code. The Debtors have,
and upon Confirmation of the Plan shall be deemed to have, solicited acceptances
of the Plan in good faith and in compliance with the applicable provisions of
the Bankruptcy Code and the Debtors (and each of their respective Affiliates,
officers, directors, employees, consultants, agents, advisors, members,
attorneys, accountants, financial advisors, other representatives and
Professionals), have participated in good faith and in compliance with the
applicable provisions of the Bankruptcy Code in the offer, issuance, sale, and
purchase of the securities offered and sold under the Plan, and are not, and on
account of such offer, issuance, sale, solicitation, and/or purchase will not
be, liable at any time for the violation of any applicable law, rule, or
regulation governing the solicitation of acceptances or rejections of the Plan
or the offer, issuance, sale, or purchase of the securities offered and sold
under the Plan.
          Section 13.15. Section 1146 Exemption. To the fullest extent permitted
under section 1146(a) of the Bankruptcy Code, the issuance, transfer or exchange
of any security under the Plan, if any, or the execution, delivery or recording
of an instrument of transfer under the Plan, or the revesting, transfer or sale
of any real or other Property of or to the Debtors or the Reorganized Debtors,
shall not be taxed under any state or local law imposing a stamp tax,

 

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transfer tax or similar tax or fee. Consistent with the foregoing, each recorder
of deeds or similar official for any county, city or governmental unit in which
any instrument hereunder is to be recorded shall, pursuant to the Confirmation
Order, be ordered and directed to accept such instrument, without requiring the
payment of any documentary stamp tax, deed stamps, stamp tax, transfer tax,
mortgage recording tax, intangible tax or similar tax.
          Section 13.16. Release of Liens. Upon entry of the Confirmation Order,
all Liens of the Prepetition Lenders against all non-debtor guarantors under the
Prepetition Credit Agreement and the related Prepetition Loan Documents shall be
released. Furthermore, the Debtors are permitted to file termination statements
to effectuate such releases of those Liens.
          Section 13.17. Time. Unless otherwise specified herein, in computing
any period of time prescribed or allowed by the Plan, the day of the act or
event from which the designated period begins to run shall not be included. The
last day of the period so computed shall be included, unless it is not a
Business Day, in which event the period runs until the end of next succeeding
day that is a Business Day. Otherwise, the provisions of Bankruptcy Rule 9006
shall apply.
          Section 13.18. No Attorneys’ Fees. No attorneys’ fees will be paid by
the Debtors with respect to any Claim or Interest except as expressly specified
herein or by order of the Bankruptcy Court (including the Junior DIP Order).
          Section 13.19. No Injunctive Relief. No Claim or Interest shall under
any circumstances be entitled to specific performance or other injunctive,
equitable or other prospective relief.
          Section 13.20. Non-Voting Equity Securities. The Debtors shall comply
with the provisions of section 1123(a)(6) of the Bankruptcy Code.
          Section 13.21. Continued Confidentiality Obligations. Pursuant to the
terms thereof, members of and advisors to the Committee, any other Holder of a
Claim or Interest and their respective predecessors, successors and assigns
shall continue to be obligated and bound by the terms of any confidentiality
agreement executed by them in connection with these Chapter 11 Cases or the
Debtors, to the extent that such agreement, by its terms, may continue in effect
after the Confirmation Date.
          Section 13.22. No Admissions or Waivers. Notwithstanding anything
herein to the contrary, nothing contained in the Plan shall be deemed an
admission or waiver by the Debtors with respect to any matter set forth herein,
including, without limitation, liability on any Claim or Interest or the
propriety of any classification of any Claim or Interest.
          Section 13.23. Entire Agreement. The Plan (and all Exhibits to the
Plan and the Plan Supplement) sets forth the entire agreement and undertakings
relating to the subject matter hereof and supersedes all prior discussions and
documents. The Debtors shall not be bound by any terms, conditions, definitions,
warranties, understandings, or representations with respect to the subject
matter hereof, other than as expressly provided for herein or as may hereafter
be agreed to by the parties in writing.

 

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          Section 13.24. Waiver. The Debtors or the Reorganized Debtors, as
applicable, reserve the right to waive (with the consent of the Buyer Parties)
any provision of this Plan to the extent such provision is for the sole benefit
of the Debtors and/or their officers or directors.
          Section 13.25. Bar Date for Professionals. Applications for
compensation for services rendered and reimbursement of expenses incurred by
Professionals (a) from the Petition Date through the Effective Date, or (b) at
any time during the Chapter 11 Cases when such compensation is sought pursuant
to sections 503(b)(2) through (b)(5) of the Bankruptcy Code, shall be Filed no
later than forty-five (45) days after the Effective Date or such later date as
the Bankruptcy Court approves. Such applications shall be served on: (a) the
Reorganized Debtors at the address set forth in Section 13.12 of the Plan;
(b) counsel to the Debtors at the address set forth in Section 13.12 of the
Plan; (c) the Office of the United States Trustee, 844 King Street, Room 2202,
Wilmington, DE 19801, Attn: Mark Kenney; (d) counsel for Charlesbank, Goodwin
Procter, LLP, The New York Times Building, 620 Eighth Avenue, New York, NY
10018-1405, Attn: Brian W. Harvey; and (e) counsel to the Committee, Winston &
Strawn LLP, 200 Park Avenue, New York, NY 10166-4193, Attn: David Neier.
Applications that are not timely Filed will not be considered by the Court. The
Reorganized Debtors may pay any Professional fees and expenses incurred after
the Effective Date without any application to the Bankruptcy Court.
CONFIRMATION REQUEST
          The Debtors hereby request confirmation of the Plan pursuant to
section 1129(a) or section 1129(b) of the Bankruptcy Code.
Dated: March 24, 2010

            TLC VISION CORPORATION; TLC VISION (USA) CORPORATION;
AND TLC MANAGEMENT SERVICES INC.
      By:   /s/ Michael F. Gries         Title:Chief Restructuring Officer