-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LnF+SJeWQZy+IrNH1O9iRQ/EGjsrMxWaLr+G72hN328mIQkjT824KlQPhMurGjMY Zp94W3KEdDwuhNi/ilzPlQ== 0000049588-97-000006.txt : 19970222 0000049588-97-000006.hdr.sgml : 19970222 ACCESSION NUMBER: 0000049588-97-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970207 ITEM INFORMATION: Bankruptcy or receivership ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970218 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICH CORP /DE/ CENTRAL INDEX KEY: 0000049588 STANDARD INDUSTRIAL CLASSIFICATION: ACCIDENT & HEALTH INSURANCE [6321] IRS NUMBER: 436069928 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07697 FILM NUMBER: 97537564 BUSINESS ADDRESS: STREET 1: 500 N AKARD ST CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2149547111 MAIL ADDRESS: STREET 1: P.O. BOX 2699 STREET 2: SUITE 400 CITY: DALLAS STATE: TX ZIP: 75221 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHWESTERN LIFE CORP DATE OF NAME CHANGE: 19940808 FORMER COMPANY: FORMER CONFORMED NAME: ICH CORP DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: ICH CORP/CONSOL NAT/RTS/CFR/MOD AMER LIFE INS/SW LIFE INS/CF DATE OF NAME CHANGE: 19930505 8-K 1 CONFIRMATION OF JOINT PLAN OF REORGANIZATION - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 7, 1997 I.C.H. Corporation (Exact name of registrant as specified in its charter) Delaware 1-7697 43-6069928 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 500 North Akard Street Dallas, Texas 75201 75201 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (214) 954-7111 Not Applicable (Former name or former address, if changed since last report) - -------------------------------------------------------------------------------- Item 3. Bankruptcy or Receivership. I.C.H. Corporation, a Delaware corporation (the "Corporation"), together with Care Financial Corporation ("CFC") and SWL Holding Corporation ("SWL"), each a Delaware corporation and a wholly owned subsidiary of the Corporation (the Corporation, CFC and SWL herein referred to collectively, as the "Debtors") filed voluntary petitions for relief with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Bankruptcy Court") under Chapter 11 of the United States Bankruptcy Code, Case No. 395-36351-RCM-11, on October 10, 1995. On February 7, 1997, the Bankruptcy Court entered an order confirming the Debtors' First Amended Joint Plan of Reorganization under Chapter 11 (the "Joint Plan"). The effective date of the Joint Plan is anticipated to occur on or about February 19, 1997 (the "Effective Date"). Pursuant to the Joint Plan, certain assets constituting substantially all of the assets of the Corporation, along with all of the assets of CFC and SWL will be transferred to a liquidating trust (the "Trust") for the benefit of creditors of the Debtors. The Trust will liquidate the assets transferred to it and distribute the proceeds thereof to claimants of the Debtors pursuant to the terms of the Joint Plan. Holders of general unsecured claims against the Corporation will receive a beneficial interest in the proceeds of all assets of the Trust, which, following payment of or provision for all other claims as provided in Article II and Section 4.1(a) of the Joint Plan, will be distributed to the general unsecured claimants according to the procedures set forth in Section 4.1(b) of the Joint Plan. The Corporation will retain certain designated assets, receive a $500,000 contribution pursuant to a third party settlement and will be owned by its existing preferred and common stockholders. On the Effective Date, all outstanding shares of preferred stock and common stock of the Corporation (collectively, the "Stock") will be cancelled, and the Corporation (hereinafter also referred to as "Reorganized ICH") will issue new common stock ("Common Stock") to holders of the cancelled Stock as follows: Preferred Stock. Record holders of preferred stock on the Effective Date will be entitled to receive, for each share of preferred stock held, 0.2 shares of Reorganized ICH Common Stock, rounded to the nearest whole number of shares; provided, however, that: (a) no distribution of Reorganized ICH Common Stock will be made with respect to any shares of preferred stock held by any beneficial holder who holds less than 14 shares of preferred stock and the interest of such beneficial holders in the Corporation represented by preferred stock will be reduced to zero (and record holders who are nominee holders for more than one such beneficial holder will not aggregate holdings of such beneficial holders for purposes of determining the distribution to which such record holders may be entitled); (b) any beneficial holder of preferred stock that holds, in the aggregate, between 14 and 650 shares of preferred stock (or that agrees to voluntarily reduce its interest in the Corporation represented by preferred stock to 650 shares of preferred stock), or any record holder specifically authorized by that beneficial holder, may elect at the time it transmits its preferred stock pursuant to a letter of transmittal to receive a single cash payment of $.36 per share of preferred stock in lieu of receiving shares of Reorganized ICH Common Stock; and (c) any beneficial holder of preferred stock, or any record holder specifically authorized by that beneficial holder, may agree in writing with the equity committee appointed pursuant to the Joint Plan prior to the Effective Date, or with Reorganized ICH on or after the Effective Date, to accept any lesser amounts of cash or Reorganized ICH Common Stock in full satisfaction of its interest in the Corporation represented by preferred stock. Common Stock. In exchange for and in full satisfaction of all interests in the Corporation related to common stock, record holders of common stock on the Effective Date will be entitled to receive, for each share of common stock held, 0.0269 shares of Reorganized ICH Common Stock, rounded to the nearest whole number of shares; provided, however, that: (a) no distribution of Reorganized ICH Common Stock will be made with respect to any shares of common stock held by any beneficial holder who holds less than 101 shares of common stock and the interest of such beneficial holders in the Corporation represented by common stock will be reduced to zero (and record holders who are nominee holders for more than one such beneficial holder will not aggregate holdings of such beneficial holders for purposes of determining the distribution to which such record holders may be entitled); (b) any beneficial holder of common stock that holds, in the aggregate, between 101 and 5,000 shares of common stock (or that agrees to voluntarily reduce its interest in the Corporation represented by common stock to 5,000 shares of common stock), or any record holder specifically authorized by that beneficial holder, may elect at the time it transmits its common stock pursuant to a letter of transmittal to receive a single cash payment of $.05 per share of common stock in lieu of receiving shares of Reorganized ICH Common Stock; (c) any beneficial holder of common stock, or any record holder specifically authorized by that beneficial holder, may agree in writing with the equity committee appointed pursuant to the Joint Plan prior to the Effective Date, or with Reorganized ICH on or after the Effective Date, to accept any lesser amounts of cash or Reorganized ICH Common Stock in full satisfaction of its interest in the Corporation represented by common stock. The number of shares of the Corporation currently issued and outstanding, the number of shares of Reorganized ICH Stock reserved for issuance pursuant to the Joint Plan, and the expected aggregate number of shares outstanding after implementation of the Joint Plan are as follows: -2- Issued and outstanding common stock: 48,644,112 Issued and outstanding preferred stock: 8,000,000 Common Stock reserved for issuance under the Joint Plan: (1) Expected aggregate shares outstanding after implementation 2,908,527(2) of the Joint Plan: - --------------------------- (1) Total shares authorized are 9,000,000 common stock and 1,000,000 preferred stock. The total reserved and issued will depend upon the factors in note 2 below. (2) Maximum number of shares of Reorganized ICH Common Stock that would be issued if all outstanding shares of Common and preferred stock were converted into shares of Reorganized ICH Common Stock at the rates specified above. Actual number will depend on (i) number of beneficial holders holding fewer than the minimum number of shares required to be entitled to receive Reorganized ICH Common Stock as specified above and (ii) number of beneficial holders who elect to receive cash in lieu of Reorganized ICH Common Stock. Information as to the assets and liabilities of the Corporation as of December 31, 1996, as filed with the Bankruptcy Court is contained in the Corporation's Monthly Operating Report for the Month Ending December 1996, filed as Exhibit 99 to the Corporation's Form 8-K which was filed with the Securities and Exchange Commission on February 3, 1997, and is incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits 2.1 First Amended Joint Plan of Reorganization Under Chapter 11 (incorporated by reference to Exhibit B to Exhibit 99.1 to the Corporation's Form 8-K filed with the Securities and Exchange Commission on November 22, 1996). 2.2 First Nonmaterial Modification to the First Amended Joint Plan of Reorganization Under Chapter 11. 2.3 Letter to Robert T. Shaw, Henry W. Simon, Jr. and Russell L. Munsch agreeing to nonmaterial modification to the First Amended Joint Plan of Reorganization Under Chapter 11, as filed with the Bankruptcy Court. 99.1 Order Confirming the First Amended Joint Plan of Reorganization under Chapter 11, as entered by the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, on February 7, 1997. 99.2 Findings of Fact and Conclusions of Law in Support of Order Confirming First Amended Joint Plan of Reorganization Under Chapter 11. -3- 99.3 Monthly Operating Report for the Month Ending December 1996, filed with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, Case No. 395-36351-RCM-11 (incorporated by reference to Exhibit 99 to the Corporation's Form 8-K filed with the Securities and Exchange Commission on February 3, 1997). -4- SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. I.C.H. CORPORATION Date: February 18, 1997 By:/s/Susan A. Brown ----------------- Susan A. Brown, Chairman of the Board, Director, Co-Chief Executive Officer, Chief Financial Officer and Treasurer -5- Index to Exhibits Sequentially Exhibit Numbered Number Description Pages - ------ ----------- ----- 2.1 First Amended Joint Plan of Reorganization Under Chapter 11 (incorporated by reference to Exhibit B to Exhibit 99.1 to the Corporation's Form 8-K filed with the Securities and Exchange Commission on November 22, 1996). 2.2 First Nonmaterial Modification to the First Amended Joint Plan of Reorganization Under Chapter 11. 5 2.3 Letter to Robert T. Shaw, Henry W. Simon, Jr. and Russell L. Munsch agreeing to nonmaterial modification to the First Amended Joint Plan of Reorganization Under Chapter 11, as filed with the Bankruptcy Court. 4 99.1 Order confirming the First Amended Joint Plan of Reorganization under Chapter 11, as entered by the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, on February 7, 1997. 39 99.2 Findings of Fact and Conclusions of Law in Support of Order Confirming First Amended Joint Plan of Reorganization Under Chapter 11. 49 99.3 Monthly Operating Report for the Month Ending December 1996, filed with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division, Case No. 395-36351-RCM-11 (incorporated by reference to Exhibit 99 to the Corporation's Form 8-K filed with the Securities and Exchange Commission on February 3, 1997). EX-2.2 2 FIRST NONMATERIAL MODIFICATION OF JOINT PLAN Daniel C. Stewart, SBT #1920650097 Josiah M. Daniel, III, SBT #05358500 WINSTEAD SECHREST & MINICK P.C. 5400 Renaissance Tower, 1201 Elm Street Dallas, Texas 75270 (214) 745-5400 ATTORNEYS FOR THE DEBTORS Michael A. Rosenthal, SBT #17281490 I. Richard Levy, SBT #12265020 GIBSON, DUNN & CRUTCHER 1717 Main Street, Suite 5400 Dallas, Texas 75201 (214) 698-3100 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS Peter D. Wolfson John A. Bicks PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Avenue New York, New York 10022 (212) 421-4100 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: ) ) I.C.H. CORPORATION, ) CASE NO. 395-36351 a Delaware corporation, f/k/a ) (Chapter 11) Southwestern Life Corporation, ) f/k/a I.C.H. Corporation, ) ) SWL HOLDING CORPORATION, ) CASE No. 395-36352 a Delaware corporation, f/k/a ) (Chapter 11) Life Interests Corporation, and ) ) CARE FINANCIAL CORPORATION, ) CASE NO. 395-36354 a Delaware corporation, f/k/a ) (Chapter 11) Health Interests Corporation, ) ) JOINTLY ADMINISTERED DEBTORS. ) CASE NO. 395-36351-RCM-11 ) FIRST NONMATERIAL MODIFICATION OF FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 PAGE 1 FIRST NONMATERIAL MODIFICATION TO THE FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 This First Nonmaterial Modification to the First Amended Joint Plan of Reorganization (the "Modification") is filed by I.C.H. Corporation ("ICH"), Care Financial Corporation ("Care"), and SWL Holding Corporation ("SWL Holding") (collectively, the "Debtors"), the Official Committee of Unsecured Creditors (the "Creditors Committee"), and the Official Committee of Equity Security Holders (the "Equity Committee") (collectively, the "Plan Proponents") pursuant to Bankruptcy Code Section 1127(a) and Bankruptcy Rule 3019. Capitalized terms used in this Modification and not defined herein shall have their respective meanings set forth in the First Amended Joint Plan of Reorganization Under Chapter 11 (the "Joint Plan") or, if not defined in the Joint Plan, as defined in the Bankruptcy Code. 1. On November 15, 1996, the Plan Proponents filed the Joint Plan with the Bankruptcy Court. On November 15, 1996, after notice and hearing, the Bankruptcy Court approved the First Amended Disclosure Statement for the First Amended Joint Plan of Reorganization and authorized the Plan Proponents to solicit votes with respect to the Joint Plan. Such solicitation is in progress at this time. 2. The purpose of this Modification is to clarify the scope of the release to be provided to the Shaw Group on the Effective Date, so that the terms of the Joint Plan are reflective of and consistent with the announcement made by the Plan Proponents in open court on November 14, 1996. In addition, the Modification makes a procedural change regarding the date for the filing of certain Joint Plan-related documents in advance of the Confirmation Hearing. The changes are not material and do not adversely change the FIRST NONMATERIAL MODIFICATION OF FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 PAGE 2 treatment of the claim of any creditor or the interest of any equity security holder whatsoever. As so modified, the Joint Plan continues to meet the requirements of Bankruptcy Code Sections 1122 and 1123. 3. Section 10.3 of the Joint Plan is hereby modified by deleting (i) the first through fifteenth words and the twenty-third and twenty-fourth words of the first sentence and (ii) the fiftieth-eighth through seventy-second words of the second sentence. Therefore, such Section 10.3 is hereby amended and restated as follows: (e) RELEASES This Joint Plan resolves all disputes between the Debtors and the Released Entities. With respect to all claims that the Debtors ever had, now have, or may claim to have or hereafter have, or which the Debtors could have asserted or could assert, jointly or severally, including without limitation claims held in its corporate capacity and claims that third parties may assert derivatively on behalf of the Debtors absent bankruptcy, Confirmation of this Joint Plan releases each Released Entity from all such claims, counterclaims, demands, controversies, costs, contracts, debts, sums of money, accounts, reckonings, bonds, bills, damages, obligations, liabilities, objections, actions and causes of action of any nature, type or description, whether in law or in equity, in contract, tort, or otherwise, known or unknown, suspected or unsuspected, including claims for negligence, gross negligence, or otherwise. On the Effective Date, the Debtors shall be authorized to execute a general release in favor of the Released Entities consistent with this Section 10.3. 4. Sections 1.99, 7.4(a), and 7.8 of the Joint Plan hereby modified by revising the phrase "ten (10) Business Days" to "five (5) Business Days" in each instance. 5. In all other respects, the Joint Plan is unchanged. WHEREFORE, the Plan Proponents modify the Joint Plan as set forth above and request the Court to confirm the Joint Plan as so modified. FIRST NONMATERIAL MODIFICATION OF FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 PAGE 3 Respectfully submitted, WINSTEAD SECHREST & MINICK P.C. 5400 Renaissance Tower 1201 Elm St. Dallas, Texas 75270 (214) 745-5400 By /s/ Daniel C. Stewart --------------------- Daniel C. Stewart, SBT #19206500 Josiah M. Daniel, III, SBT # 05358500 ATTORNEYS FOR DEBTORS GIBSON, DUNN & CRUTCHER 1717 Main Street, Suite 5400 Dallas, Texas 75201 (214) 698-3100 By /s/ Michael A. Rosenthal ------------------------ Michael A. Rosenthal, SBT #17281490 I. Richared Levy, SBT #12265020 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Ave. New York, New York 10022 (212) 326-0806 By /s/ Peter D. Wolfson -------------------- Peter D. Wolfson John A. Bicks ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS FIRST NONMATERIAL MODIFICATION OF FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 PAGE 4 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served by U.S. Mail, postage prepaid, addressed to all persons identified on the attached Master Service List on this 20th day of January, 1997. /s/Josiah M. Daniel, III ------------------------ One of Counsel FIRST NONMATERIAL MODIFICATION OF FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 PAGE 5 EX-2.3 3 LETTER TO ROBERT T. SHAW Direct Dial: 214/745-5307 dstewart@winstead.com January 31, 1997 Robert T. Shaw Russell L. Munsch, Esq. c/o Henry W. Simon, Jr., Esq. 1455 Ross Avenue Simon Anisman Doby & Wilson 4000 Fountain Place P. O. Box 17047 Dallas, TX 75202 Fort Worth, TX 76102 (via fax 214/855-7584) (via fax 817/335-2274) Henry W. Simon, Jr., Esq. Simon Anisman Doby & Wilson P. O. Box 17047 Fort Worth, TX 76102 (via fax 817/335-2274) Re: I.C.H. Corporation, et al. Gentlemen: This will confirm our agreements made earlier today relative to the Joint Plan of Reorganization pending in the Chapter 11 case and presently scheduled for confirmation hearings to commence Friday, January 31 at 9:00 a.m. We have agreed that a nonmaterial modification shall be made to the Plan which contemplates the following: o The provisions of section 10.4 of the Plan respecting the Released Officers shall remain in full force and effect with respect to W. Hubert Mathis, Steven R. Cartwright, Robert J. Bruce, and H. Don Rutherford and the Shaw Group agrees to the releases of those officers as part of the Plan confirmation. o With respect to John T. Hull, Robert C. Greving, and Daniel B. Gail, the releases contemplated by section 10.4 shall not be executed and delivered on the basis of the confirmation order, but rather shall be the subject of a separate, prompt hearing for compromise of controversies under and in accordance with the procedures and standards of Rule 9019 of the Bankruptcy Rules and law applicable in the Fifth Circuit. Messrs. Shaw, Simon and Munsch January 31, 1997 Page 2 o The compromise hearing shall be sought on an expedited basis as soon following two weeks as the Court's calendar permits. Pending such compromise hearing, each of Messrs. Hull, Greving and Gail shall make themselves available for up to four hours each of deposition examination to be conducted by the Shaw Group. Robert T. Shaw shall make himself available to the Plan Proponents for up to four hours of deposition examination in advance of the compromise hearing. The four (4) hours in each deposition shall be allocated to direct examination only. Cross-examination (if any) and objections or statements by counsel shall not reduce the four hours. If, for any reason, the Court, at such compromise hearing, does not approve the contemplated release of any of Messrs. Hull, Greving or Gail, the maximum financial risk or exposure any of them shall ever have (regardless of any greater liability established) for claims that otherwise (in accordance with section 10.4 of the Plan) would have been released under the Plan, shall be $100,000. o Any and all additional proposed releases which the Equity Committee or the Reorganized Debtor proposes to deliver with respect to pre-petition acts shall be subject to determination by the Bankruptcy Court and the Rule 9019 procedures and standards in the event the Shaw Group objects to any such proposed releases. o The Shaw Group, including Robert T. Shaw individually, shall promptly reimburse each of Messrs. Hull, Greving and Gail up to $5,000 for legal expense actually incurred by each of them beginning this date and continuing through the compromise hearing in connection with the compromise hearing and their preparation therefor. o The Shaw Group shall deposit into escrow, 48 hours prior to the Effective Date, the documents and funds required under section 6.2 of the Plan. The Debtor shall similarly deposit the release of the Shaw Group into escrow 48 hours prior to the Effective Date. The release of the Shaw Group shall be in the form attached hereto. o Releases given to the Trust, the Trustee, the Creditors Committee, the Equity Committee and their respective present and former officers, directors, members, employees, agents and attorneys pursuant to Paragraph 10.3 of the Plan (exclusive of the Shaw Group) shall be time limited to the post-petition activities of such Released Entities related to the reorganization case. o With these immaterial modifications to the Plan, which we are authorized to advise you have been agreed to by Messrs. Hull, Greving and Gail, all objections to confirmation of the Plan, or other pleadings in any manner opposed to, or seeking the continuance of, the Court's consideration of confirmation shall be withdrawn by Messrs. Shaw, Simon and Munsch January 31, 1997 Page 3 the Shaw Group with prejudice, and the Shaw Group shall fully support the entry by the Court of an order confirming the Joint Plan of Reorganization, as amended, and as provided herein and shall abide by and timely comply with the terms and provisions of the Plan, including section 6.2. If the foregoing accurately reflects our understandings and agreements, please evidence your agreement to be bound by the terms hereof and in accordance with any required formal modification to the Joint Plan evidencing such agreement by affixing your signature in the space provided below and faxing same back to me immediately. Very truly yours, WINSTEAD SECHREST & MINICK P.C. By: /s/ Daniel D. Stewart --------------------- Daniel C. Stewart ATTORNEYS FOR THE DEBTORS PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Avenue New York, NY 10022 By: /s/ Peter D. Wolfson -------------------- Peter D. Wolfson ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS OF I.C.H. CORPORATION AGREED: /s/ Robert T. Shaw - ------------------ Robert T. Shaw, Individually Messrs. Shaw, Simon and Munsch January 31, 1997 Page 4 Consolidated National Corporation By: /s/ Consolidated National Corporation ------------------------------------- /s/ Henry W. Simon, Jr. - ----------------------- Henry W. Simon, Jr. Attorney for Robert T. Shaw, Fred Rice and CNC (the "Shaw Group") /s/ Russell L. Munsch - --------------------- Russell L. Munsch Attorney for Consolidated National Corporation DCS/jma EX-99.2 4 FINDINGS OF FACT AND CONCLUSIONS OF LAW Daniel C. Stewart, SBT #19206500 Josiah M. Daniel, III, SBT #05358500 WINSTEAD SECHREST & MINICK P.C. 5400 Renaissance Tower, 1201 Elm Street Dallas, Texas 75270 (214) 745-5400 ATTORNEYS FOR THE DEBTORS Michael A. Rosenthal, SBT #17281490 I. Richard Levy, SBT #12265020 GIBSON, DUNN & CRUTCHER 1717 Main Street, Suite 5400 Dallas, Texas 75201 (214) 698-3100 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS Peter D. Wolfson John A. Bicks PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Avenue New York, New York 10022 (212) 421-4100 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: ) ) I.C.H. CORPORATION, ) CASE NO. 395-36351 A DELAWARE CORPORATION, F/K/A ) (CHAPTER 11) SOUTHWESTERN LIFE CORPORATION, ) F/K/A I.C.H. CORPORATION, ) ) SWL HOLDING CORPORATION, ) CASE NO. 395-36352 A DELAWARE CORPORATION, F/K/A ) (CHAPTER 11) LIFE INTERESTS CORPORATION, AND ) ) CARE FINANCIAL CORPORATION, ) CASE NO. 395-36354 A DELAWARE CORPORATION, F/K/A ) (CHAPTER 11) HEALTH INTERESTS CORPORATION, ) ) JOINTLY ADMINISTERED DEBTORS. ) CASE NO. 395-36351-RCM-11 ) FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 1 FINDINGS OF FACT AND CONCLUSIONS OF LAW IN SUPPORT OF ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 I.C.H. Corporation ("ICH"), SWL Holding Corporation ("SWL"), and Care Financial Corporation ("Care" and together with ICH and SWL, the "Debtors"), together with the Official Committee of Unsecured Creditors (the "Creditors Committee") and the Official Committee of Equity Security Holders (the "Equity Committee" and together with the Debtors and the Creditors Committee, the "Plan Proponents") having proposed that certain First Amended Joint Plan of Reorganization under Chapter 11 dated November 15, 1996, as amended by the First Nonmaterial Modification of the First Amended Joint Plan of Reorganization under Chapter 11 filed on January 20, 1997 (the "First Modification") and that certain letter agreement filed with and accepted by the Court at the Confirmation Hearing as the Second Nonmaterial Modification of the First Amended Joint Plan of Reorganization under Chapter 11 filed on January 31, 1997 (the "Second Modification" and as amended collectively, the "Joint Plan"); the Court having conducted a hearing to consider confirmation of the Joint Plan on January 31, 1997 (the "Confirmation Hearing"), and the Court having reviewed and considered the Joint Plan, the Certificate of Service of Solicitation Packages by Hill and Knowlton, Inc., and the Certificate of Service of Merrill Corporation, the Certification of Votes Tabulated by Hill and Knowlton, Inc., as well as the testimony proffered and adduced, the exhibits admitted into evidence and the arguments of counsel presented at the Confirmation Hearing; and the Court having also considered all of the objections to confirmation of the Joint Plan and the Court being familiar with the Joint Plan and other relevant factors affecting the Debtors' chapter 11 cases (the "Chapter 11 Cases"), the Court having taken judicial notice FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 2 of the entire record of the Chapter 11 Cases since the Petition Date, including, but not limited to, all pleadings filed by the Plan Proponents and other parties in interest, all documentary evidence and testimony presented by the Plan Proponents in the Chapter 11 Cases before the Bankruptcy Court, and, in particular, the Court having taken judicial notice of (i) the orders entered by the Bankruptcy Court on October 10, 1995 establishing the Bar Date (ii) the order of the Bankruptcy Court, dated October 10, 1996 (the "Notice Order") establishing various dates in connection with approval of the First Amended Disclosure Statement For the First Amended Joint Plan of Reorganization Under Chapter 11, dated November 15, 1996 (the "Disclosure Statement"), (iii) the order of the Bankruptcy Court, dated November 15, 1996, approving the Disclosure Statement and proposed ballot tabulation and solicitation procedures and establishing various dates in connection with the solicitation of votes on and confirmation of the Joint Plan; and based upon the entire record, in accordance with Bankruptcy Rules 7052 and 9014, the Court makes the following findings of fact and conclusions of law in support of confirmation of the Joint Plan (collectively, the "Findings").1 I. JURISDICTION AND VENUE A. JURISDICTION. 1. Pursuant to 28 U.S.C. Sections 1334 and 157, the Court has jurisdiction to consider confirmation of the Plan. 2. The Confirmation Hearing is a core proceeding under 28 U.S.C. Sections 157(b)(2)(A)(L) and (O). - ----------------- 1 All capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Joint Plan or if not defined in the Joint Plan, as defined in Title 11 of the United States Code (the "Bankruptcy Code"). FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 3 3. The Debtors are entities eligible for relief under Section 109 of Title 11 of the United States Code (the "Bankruptcy Code"). B. VENUE OF THE CHAPTER 11 CASES. 1. The principal place of business of the Debtors is Dallas, Texas. Venue in the Northern District of Texas for the Chapter 11 Cases was proper as of the Petition Date pursuant to 28 U.S.C. Section 1408 and continues to be proper. II. BACKGROUND 1. On October 10, 1995 (the "Petition Date"), each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the Bankruptcy Code, as amended (the "Bankruptcy Code") with the Bankruptcy Court. 2. Since the Petition Date, each of the Debtors had continued to operate its business and manage its properties as a debtor in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. 3. On October 10, 1995, the Bankruptcy Court ordered the Chapter 11 cases of the Debtors jointly administered pursuant to Bankruptcy Rule 1015 (the "Chapter 11 Case"). 4. The Debtors filed their schedules and statements of financial affairs on the Petition Date. Included therewith was a "mailing matrix" listing the names and addresses of creditors and other parties in interest. Also on the Petition Date, the Clerk of the Bankruptcy Court issued a notice concerning the filing of the Chapter 11 Case and concerning the meeting of creditors required under Section 341 of the Bankruptcy Code. The Debtors served such notice by mail and by publication in the National Edition of The Wall Street Journal and The Dallas Morning News. On the Petition Date, the Bankruptcy Court also fixed February 7, 1996, as the Bar Date with respect to claims against the FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 4 Debtors, which date was applicable to all creditors, excluding governmental units. The Bankruptcy Court also fixed April 9, 1996, as the Bar Date with respect to all claims against the Debtors filed by governmental units. The April 9, 1996 Bar Date for governmental units was extended for the Internal Revenue Service. 5. Also, on October 10, 1995, the Debtors filed a Motion to Establish Notice Procedures (the "Notice Motion"), seeking to determine appropriate notice procedures during the Chapter 11 Case. The Notice Motion sought authority to establish a master service list which would include and limit notice of all but certain specified major events to the United States Trustee, the Debtors, counsel for the Debtors, the Debtors' twenty (20) largest unsecured creditors, the members of any official committee and its counsel, any party whose interest was directly affected by a specific pleading, and parties or entities who might formally appear and request service pursuant to Bankruptcy Rule 2002 (the "Master Service List"). On the Petition Date, the Bankruptcy Court approved the relief requested in the Notice Motion, including the Debtors' utilization of the Master Service List and the Debtors' proposed notice procedures. 6. On October 11, 1995, the United States Trustee for the Northern District of Texas (the "U.S. Trustee") appointed the Creditors Committee pursuant to Section 1102(a) of the Bankruptcy Code, the membership of which has been amended or reconstituted from time to time during the Chapter 11 Cases. 7. On March 27, 1996, the U.S. Trustee appointed the Equity Committee pursuant to Section 1102(a) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 5 III. CRITICAL EVENTS IN THE CHAPTER 11 CASES RELATING TO THE JOINT PLAN A. SALE OF PRIMARY INSURANCE SUBSIDIARIES. 1. On October 9, 1995, the Debtors entered into a definitive agreement (the "Shinnecock Agreement") to sell certain of their insurance subsidiaries, consisting of Southwestern Life Insurance Company ("Southwestern Life"), Union Bankers Insurance Company ("Union Bankers"), Constitution Life Insurance Company ("Constitution"), and Marquette National Life Insurance Company ("Marquette"), to Shinnecock Holdings Inc. ("Shinnecock"), and to sell to an affiliate of Shinnecock substantially all of the assets of Facilities Management Installation, Inc. ("FMI"), a subsidiary of ICH that provided data processing and other support services to ICH's insurance subsidiaries (the "Proposed Sales Transaction"). The Shinnecock Agreement contained provisions for presenting the Proposed Sales Transaction to the Bankruptcy Court in a Chapter 11 Case to be commenced by the Debtors, and, for the establishment of a competitive sales procedure to be conducted as part of such Chapter 11 Case. 2. On the Petition Date, ICH requested expedited approval from the Bankruptcy Court for an orderly and competitive sales procedure and for approval of the definitive agreement to sell certain of their insurance subsidiaries pursuant to the terms of the Proposed Sales Transaction. On October 20, 1995, the Bankruptcy Court approved a procedure, with certain modifications, by which interested parties could submit offers to compete with the offer of Shinnecock for the Proposed Sales Transaction. The Bankruptcy Court scheduled a hearing beginning November 28, 1995 (the "Sale Approval Hearing"), to consider additional offers and approval of the Proposed Sales Transaction. In accordance with the order approving the sales procedure, PennCorp Financial Group, FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 6 Inc. ("PennCorp"), Southwestern Financial Corporation ("SFC"), a corporation newly formed by PennCorp and Knightsbridge Capital Fund I, L.P. ("KCF"), and Southwestern Financial Services Corporation ("SFSC," together with PennCorp and SFC, the "Bidders") presented a competing offer. During the days prior to the Sale Approval Hearing, the Debtors received several improved bids from each of Shinnecock and the Bidders. At the Sale Approval Hearing, a final round of bidding occurred, resulting in the Debtors' acceptance of Bidders' final offer of $260 million, consisting of $210 million of cash and $50 million of securities (the "PennCorp Sales Transaction"). As part of the PennCorp Sales Transaction, the Bidders also agreed to provide ICH the right (the "KCF Put"), exercisable on or before June 15, 1996, to sell to KCF ICH's four remaining insurance subsidiaries that were not included in PennCorp Sales Transaction Bankers Multiple Line Insurance Company ("BML") and each of its subsidiaries, Philadelphia American Life Insurance Company ("Philadelphia American"), Modern American Life Insurance Company ("Modern American") and Western Pioneer Life Insurance Company ("Western," and together with BML, Philadelphia American, and Modern American, the "Remaining Insurance Subsidiaries") - for an aggregate purchase price of $50 million, consisting of $25 million of cash and $25 million of KCF notes. The PennCorp Sales Transaction was approved by the Bankruptcy Court on December 5, 1995, and was completed in December 1995. B. SALE OF REMAINING INSURANCE SUBSIDIARIES. 1. On June 28, 1996, BML, a wholly owned subsidiary of ICH, consummated the sale of Modern American and Western to Reassure America Life Insurance Company ("Reassure America"), an indirect subsidiary of Life Reassurance Corporation. Net proceeds to BML from the sale of Modern American and Western were approximately $27 FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 7 million, including the estimated value of certain real estate and mineral interests distributed to BML by Modern American and Western in connection with the sale. BML also received an assignment of any federal income tax refunds payable to Modern American for periods prior to January 1, 1996. 2. Also on June 28, 1996, BML consummated the sale of Philadelphia American to New Era Life Insurance Company, a wholly-owned subsidiary of New Era Enterprise, Inc. ("New Era"). BML utilized approximately $6 million of the proceeds from the sale to purchase certain securities, real estate, limited partnership interests and reinsurance recoverables from Philadelphia American at the closing, as required under the purchase agreement with New Era. ICH estimates the net proceeds from the sale of Philadelphia American, the liquidation of the securities, real estate, and limited partnership interests purchased by BML from Philadelphia American, and the settlement of reinsurance recoverables assigned to BML by Philadelphia American will total approximately $11 million. 3. BML has also sold, through a reinsurance transaction effective as of March 31, 1996, all of its remaining health insurance business and related agent debit balance for $5.75 million cash. C. TAX SETTLEMENT. 1. On August 23, 1996, a Joint Motion for Approval of Agreement for Compromise and Settlement of Tax Claims and Certain Tax-Related Liabilities of the Debtors (the "Tax Settlement Motion") was filed in the Bankruptcy Court by ICH, SWL Holding, Care, FMI, Southwestern Life, Union Bankers, Marquette, BML, SFC, PennCorp (collectively, the "Tax Settlement Group"), and the United States of America, on behalf of its agency, the Internal Revenue Service ("IRS") (collectively, the "Tax Settlement FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 8 Movants"). Consolidated National Corporation ("CNC"), Robert T. Shaw ("Shaw"), C. Fred Rice ("Rice"), and Edward J. Carlisle ("Carlisle") filed with the Bankruptcy Court their statement supporting the relief requested in the Tax Settlement Motion and undertaking to perform their respective portions of the settlement. 2. The Tax Settlement Motion reflected the fact that the IRS had originally asserted that the Tax Settlement Group might owe as much as $200 million in taxes for the years 1990 - 1995. Following a lengthy and detailed review, information gathering and negotiations, however, the Tax Settlement Movants sought the Bankruptcy Court's approval of a global and final compromise and settlement. Under the terms of the Tax Settlement Motion, generally, the federal income tax liabilities of ICH, Southwestern Life, Constitution, Union Bankers, Marquette, ICH Funding Corporation, Modern American, Western, BML, and Philadelphia American for all tax periods ended on or before December 31, 1995, were determined with no additional taxes due. The federal income tax liabilities of CFLIC, Shaw, Rice, and Carlisle for all tax periods ended on or before December 31, 1994, were also resolved by the Tax Settlement Motion. The federal income tax liabilities of each corporation listed on Exhibit A attached to the Tax Settlement Motion (other than ICH, Southwestern Life, Constitution, Union Bankers, Marquette, ICH Funding, Modern American, Western, BML, and Philadelphia American), for all tax periods ended on or before December 31, 1995, in which such corporation was included in a consolidated federal income tax return filed by Modern American, ICH, or a subsidiary of ICH as set forth on such Exhibit A were also determined with no additional tax due. The material terms of ICH's federal income tax indemnification obligations to certain indemnified parties were also resolved. In addition, the IRS paid refunds to Modern American of approximately $3.4 million by wire transfer. Also, Shaw, Rice, FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 9 Carlisle, and CNC collectively paid $550,000 to ICH by wire transfer. Under the Tax Settlement Motion, the Debtors have no net operating losses, general business credits or other tax credits or capital loss carryovers and no earnings and profits accounts remaining from tax years ending prior to January 1, 1996. 3. On September 13, 1996, the Court approved the Tax Settlement Motion and authorized the Debtors, on behalf of themselves and their consolidated subsidiaries, to consummate the terms of the Tax Settlement Motion as described above. The Order approving the Tax Settlement Motion became a Final Order on September 23, 1996. 4. After consummation of the Tax Settlement Motion, provided that there is no showing of fraud or malfeasance or misrepresentation of a material fact (as required to challenge agreements made pursuant to Section 7121 of the Internal Revenue Code), the IRS will not assess any taxes, interest, or penalties or propose any adjustments (a) to or with respect to the Debtors or any entity identified on Exhibit A to the Tax Settlement Motion for any tax period ended on or before December 31, 1995, or (b) to or with respect to CFLIC, Shaw, Rice, or Carlisle for any tax period ended on or before December 31, 1994. D. TENNECO SETTLEMENT. 1. On December 24, 1996, ICH, the Creditors Committee and the Equity Committee (collectively, the "Tenneco Settlement Movants") filed their Motion for Approval of Compromise Between I.C.H. Corporation and Tenneco, Inc. (the "Tenneco Settlement Motion"). Filed as Exhibit A to the Tenneco Settlement Motion are the written terms of the settlement and compromise between the Movants, Southwestern Life, Philadelphia American, and Tenneco (the "Tenneco Settlement Agreement"). Under the terms of the Tenneco Settlement Agreement, except for obligations incurred under the agreement FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 10 itself, ICH, Philadelphia American, and SWL each released Tenneco and its present and former affiliates of and from any claims which ICH, Philadelphia American, or SWL may have; and, similarly, Tenneco released ICH and its bankruptcy estate, Philadelphia American, and SWL and their present and former affiliates, together with their respective present and former officers, directors, employees, attorneys, agents, successors and assigns of and from any claims. Also, under the Tenneco Settlement Agreement, Tenneco will pay ICH $18,500,000, Tenneco's previously filed proof of claim in the amount of $21,952,012 will be deemed disallowed with prejudice to its refiling or consideration, and Tenneco will deliver to ICH the 9 1/2 unsecured note due 1996 of ICH marked cancelled. 2. On January 16, 1997, the Bankruptcy Court approved the Tenneco Settlement Motion and thereby approved the compromise settlement contained in the Tenneco Settlement Agreement. E. SHAW SETTLEMENT. 1. On February 5, 1996, Shaw and Rice filed proofs of claim (the "Shaw Proofs of Claim") seeking approximately $5.775 million under certain consulting contracts with ICH (the "Consulting Contracts"), contractual indemnifications for certain tax claims asserted by the IRS, and other relief. ICH disputed its liability in connection with the Claims asserted by the Shaw Group, including but not limited to ICH's liability under the Consulting Contracts or the asserted indemnification claims. 2. After extensive negotiations and discussions with the Plan Proponents, Robert T. Shaw, C. Fred Rice and CNC, and the Plan Proponents agreed to a compromise and settlement of their issues as part of the Joint Plan (the "Shaw Settlement"). Concurrent with the filing of the Joint Plan, on October 10, 1996, the Shaw FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 11 Group and the Plan Proponents executed that certain letter agreement whereby the Shaw Group agreed to fully support, to perform in accordance with, and to be bound by the terms of the Joint Plan and the Confirmation Order. The terms of the Shaw Settlement are set out in Section 6.2 of the Joint Plan and the modification set out in paragraph V.B.2 hereof, and the Plan Proponents and the Shaw Group both agree to perform their respective obligations thereunder. IV. SOLICITATION PROCEEDINGS A. DISCLOSURE STATEMENT HEARING. 1. On September 15, 1996, the Bankruptcy Court entered an order approving the employment of Hill and Knowlton, Inc. ("Hill and Knowlton") as solicitation agent. Since such time Hill and Knowlton has served as the Debtors' solicitation agent. 2. On October 10, 1996, the Debtors filed the Motion to Shorten Notice Period for Hearing on Disclosure Statement and Objections thereto, and request for Expedited Hearing. Also, on October 10, 1996, the Bankruptcy Court entered the Order Setting Hearing on Disclosure Statement, Fixing Deadlines for Objections, and Shortening Notice Period (the "Disclosure Statement Hearing Order"). The Disclosure Statement Hearing Order set the hearing for approval of the Disclosure Statement (the "Disclosure Statement Hearing") for October 31, 1996. October 28, 1996, was set as the last day for filing and serving written objections to the Disclosure Statement. 3. On November 14, 1996, the Court held the Disclosure Statement Hearing, and also heard the Debtors' Motion for Order Approving Ballots and Solicitation Procedures. On November 15, 1996, the Plan Proponents refiled the Disclosure Statement and the Joint Plan in order to incorporate certain changes announced in open court on November 14, 1996, and the Court entered the Order (i) Approving the FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 12 Disclosure Statement, (ii) Setting Hearing on Confirmation of Joint Plan of Reorganization and (iii) Granting Other Relief Relating to Joint Plan Solicitation and the Confirmation Hearing (the "Disclosure Statement Order"). 4. By the Disclosure Statement Order, the Bankruptcy Court approved the Disclosure Statement as containing adequate information of a kind and in sufficient detail as far as reasonably practicable in light of the nature and history of the Debtors, that would enable a hypothetical reasonable investor typical of the holders of claims and interest of the relevant impaired classes to make an informed judgment regarding the Joint Plan pursuant to 11 U.S.C. Section 1125(a)(1). The Disclosure Statement Order also found that the notice given by the Debtors of the hearing to approve the Disclosure Statement was given in compliance with the Federal Rules of Bankruptcy Procedure. 5. Under the Disclosure Statement Order, the hearing on confirmation of the Joint Plan was set for January 31, 1997, at 9:00 a.m.,Central Standard Time, in the Courtroom of the Bankruptcy Court, 1100 Commerce Street, 14th Floor, Dallas, Texas 75242 (the "Confirmation Hearing"). January 17, 1997, was fixed as the last day for filing and serving written objections to the confirmation of the Joint Plan. B. SOLICITATION. 1. As part of the Disclosure Statement Order, the Bankruptcy Court approved certain ballots submitted by the Plan Proponents, solicitation and tabulation procedures, and the documents which made up the Plan Proponents' solicitation materials (the "Solicitation Package"). 2. Pursuant to the Disclosure Statement Order, those entities which were holders of claims and equity security interests on November 15, 1996, were the entities entitled to receive the Solicitation Package and entitled to vote on the Joint Plan. The FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 13 Debtors were required to cause Solicitation Packages to be served upon each entity listed in the Debtors' Schedules and Statements of Financial Affairs, as Amended, and to each entity having filed a Proof of Claim or Proof of Interest against the Debtors as to which an objection had not been filed. In addition, the Debtors were required to cause a Solicitation Package to be served upon each holder of record, as of November 15, 1996, of the debt securities and the common and preferred stock of ICH and to provide Solicitation Packages to brokers or other nominee holders who hold such securities on behalf of beneficial holders. To facilitate the transmittal of Solicitation Packages to record holders, brokers, other nominee holders, and beneficial holders of securities and, pursuant to Bankruptcy Rules 1007(i) and 3717(e), Bank of Louisville and KeyCorp Shareholders Services, Inc. ("KeyCorp") were required to provide the Debtors with lists and mailing labels of the names, addresses and holdings of the respective holders of record of such securities as of the Voting Record Date. Finally, the Debtors were required to cause a copy of the balloting procedures and solicitation and tabulation procedures to be served upon the Bank of Louisville, KeyCorp and each broker or other nominee holder through which beneficial holders hold securities. 3. The Disclosure Statement Order provided that all ballots must be received by Hill and Knowlton by 4:00 p.m., Eastern Standard Time, on January 24, 1997 (the "Voting Deadline"). Any ballot either not properly completed or not actually received by the Voting Deadline, except as otherwise provided by the Disclosure Statement Order or by subsequent order of the Bankruptcy Court, would not be considered a timely ballot and would not be counted as a vote to accept or reject the Joint Plan. The Disclosure Statement Order also provided the amount to be used to tabulate acceptance or rejection of the Joint Plan with respect to the tabulation of ballots cast by record holders and FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 14 beneficial holders of securities and the amount to be used to tabulate the acceptance or rejection of the Joint Plan with respect to the tabulation of the ballots not based on securities. Any objection or challenge to a vote cast by any holder of a claim or interest of the Joint Plan was required to be in writing and actually received by the Clerk of the Bankruptcy Court, the counsel for the Debtors, counsel for the Creditors Committee, counsel for the Equity Committee and the United States Trustee on or before 4:00 p.m., Central Standard Time on January 28, 1997. 4. On October 15, 1996, the Debtors caused a copy of the Order and Notice of Hearing on Disclosure Statement to be mailed to the record holders, as of the close of business on October 5, 1996, of the Notes, the Common Stock and the Preferred Stock. Also, on October 17, 1996, a copy of the Order and Notice of Hearing on Disclosure Statement was published in the national edition of The Wall Street Journal and The Dallas Morning News. 5. The Debtors complied in all material respects with the Disclosure Statement Hearing Order and the Disclosure Statement Order in providing notice of the hearing to consider approval of the Disclosure Statement and the Confirmation Hearing in the method and manner as prescribed in those orders. All entities entitled to and required to receive notice of the Disclosure Statement Hearing and the Confirmation Hearing pursuant to the Bankruptcy Code, applicable non-bankruptcy law, and the Voting Procedures have received due, proper and adequate notice of such hearings and have had an opportunity to appear at and be heard at such hearings. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 94 L.Ed. 865, 70 S.Ct. 652 (1950). FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 15 V. OBJECTIONS TO CONFIRMATION A. PROCEDURE ON OBJECTIONS TO CONFIRMATION. 1. The Disclosure Statement Order fixed January 17, 1996, at 4:00 p.m. Dallas, Texas time (the "Objection Deadline"), as the last day for creditors and other parties in interest to file and serve objections to confirmation of the Joint Plan. 2. By the Objection Deadline, objections to confirmation of the Joint Plan were filed by the Shaw Group and Victor L. Sayyah ("Sayyah"). B. DISCUSSION OF OBJECTIONS TO CONFIRMATION. 1. The Shaw Group filed three separate objections to confirmation of the Joint Plan. On December 31, 1996, the Shaw Group filed its Objection to the Confirmation of the Plan of Reorganization. On January 17, 1997, the Shaw Group filed its Supplemental Objection of the Shaw Group to Confirmation of the First Amended Joint Plan of Reorganization under Chapter 11 Dated November 15, 1996. Finally, the Shaw Group filed its Objection to the First Non-Material Modification of First Amended Joint Plan of Reorganization under Chapter 11 and Continued Objection of the Shaw Group to Confirmation of the First Amended Joint Plan of Reorganization. 2. At the Confirmation Hearing on January 31, 1997, the Plan Proponents and the Shaw Group announced a settlement of the issues presented by the objections filed by the Shaw Group whereby the Plan Proponents and the Shaw Group entered into the Second Modification. Upon approval of the Second Modification, the Shaw Group agreed to withdraw its Objections to the Joint Plan and requested that the Court allow the Shaw Group to change its previously cast votes to reject the Joint Plan to votes to accept the Joint Plan. At the Confirmation Hearing, the Court approved the change of the Shaw Group's votes and the terms of the Second Modification, which are as follows: FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 16 a. The provisions of Article 10.4 of the Plan respecting the Released Officers shall remain in full force and effect with respect to W. Hubert Mathis, Steven R. Cartwright, Robert J. Bruce, and H. Don Rutherford and the Shaw Group agrees to the releases of those officers as part of the Plan confirmation. b. With respect to John T. Hull, Robert C. Greving, and Daniel B. Gail, the releases contemplated by Article 10.4 shall not be executed and delivered on the basis of the confirmation order, but rather shall be the subject of a separate, prompt hearing for compromise of controversies under and in accordance with the procedures and standards of Rule 9019 of the Bankruptcy Rules and law applicable in the Fifth Circuit. c. The compromise hearing shall be sought on an expedited basis as soon following two weeks as the Court's calendar permits. Pending such compromise hearing, each of Messrs. Hull, Greving and Gail shall make themselves available for up to four hours each of deposition examination to be conducted by the Shaw Group. Robert T. Shaw shall make himself available to the Plan Proponents for up to four hours of deposition examination in advance of the compromise hearing. The four (4) hours in each deposition shall be allocated to direct examination only. Cross-examination (if any) and objections or statements by counsel shall not reduce the four hours. If, for any reason, the Court, at such compromise hearing, does not approve the contemplated release of any of Messrs. Hull, Greving or Gail, the maximum financial risk or exposure any of them shall ever have (regardless of any greater liability established) for claims that FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 17 otherwise (in accordance with Article 10.4 of the Plan) would have been released under the Plan, shall be $100,000. d. Any and all additional proposed releases which the Equity Committee or the Reorganized Debtor proposes to deliver with respect to pre-petition acts shall be subject to determination by the Bankruptcy Court and the Rule 9019 procedures and standards in the event the Shaw Group objects to any such proposed releases. e. The Shaw Group, including Robert T. Shaw individually, shall promptly reimburse each of Messrs. Hull, Greving and Gail up to $5,000 for legal expense actually incurred by each of them beginning this date and continuing through the compromise hearing in connection with the compromise hearing and their preparation therefor. f. The Shaw Group shall deposit into escrow, 48 hours prior to the Effective Date, the documents and funds required under Article 6.2 of the Plan. The Plan Proponents shall similarly deposit the release of the Shaw Group into escrow 48 hours prior to the Effective Date. The release shall be executed by the Plan Proponents in the form as follows: RELEASE OF SHAW GROUP On the Effective Date, the Debtors, the Official Committee of Equity Holders (the "Equity Committee"), the Official Committee of Unsecured Creditors (the "Creditors' Committee") and each of them, shall execute a general release as that term is used and commonly understood at law in favor of the Shaw Group and thereby release all claims that the Debtors, the Equity Committee, the Creditors' Committee, or any of them or their affiliates ever had, now have, or may claim to have or hereafter have, or which the Debtors, the Equity Committee, the Creditors Committee or any of them or their affiliates could have asserted or could assert on their own behalf, or derivatively on behalf of the Debtors prior to or related to this bankruptcy, FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 18 including without limitation all claims, counterclaims, demands, controversies, costs, contracts, debts, sums of money, accounts, reckonings, bonds, bills, damages, obligations, liabilities, objections, actions and causes of action, expenses, attorneys' fees of any character, nature, type or description, whether in law or in equity, in contract, tort, or otherwise, known or unknown, suspected or unsuspected, including claims for negligence, gross negligence, fraud, intentional misconduct or otherwise. The releases to be executed shall bind the Debtors, the Equity Committee, the Creditors' Committee and each of them, and each of their affiliates, and their respective successors, assigns, or representatives, including but not limited to, the revested/reorganized Debtors, and each of them, and any representative of any bankruptcy estate for such Debtors or such revested/reorganized Debtors. This release shall not apply to the Shaw Group's obligations under the Plan or for acts occurring after the Effective Date of the Plan. g. Releases given to the Trust, the Trustee, the Creditors Committee, the Equity Committee and their respective present and former officers, directors, members, employees, agents and attorneys pursuant to Paragraph 10.3 of the Plan (exclusive of the Shaw Group) shall be time limited to the post-petition activities of such Released Entities related to the reorganization case. h. With these immaterial modifications to the Plan, which have been agreed to by Messrs. Hull, Greving and Gail, all objections to confirmation of the Plan, or other pleadings in any manner opposed to, or seeking the continuance of, the Court's consideration of confirmation shall be withdrawn by the Shaw Group with prejudice, and the Shaw Group shall fully support the entry by the Court of an order confirming the Joint Plan of Reorganization, as amended, and as provided herein and shall abide by FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 19 and timely comply with the terms and provisions of the Plan, including Article 6.2. 3. Sayyah filed his Objection to Confirmation of First Amended Joint Plan of Reorganization on January 17, 1997. 4. At the Confirmation Hearing, the Plan Proponents and Sayyah announced a settlement of the issues presented by the objection filed by Sayyah whereby Sayyah withdrew his objection to the Joint Plan. The terms of the settlement presented to the Court at the Confirmation Hearing were agreed to by the Plan Proponents and Sayyah. The agreement is that, notwithstanding a contrary interpretation of the provisions of Article III and Article IV of the Joint Plan with respect to the ICH Class 2 and ICH Class 5 Claims, if any, of Sayyah, the following shall apply: a. Any objection counterclaim or action for affirmative recovery related to Sayyah's claims shall be brought, if at all, not later than thirty (30) days following the Effective Date. In the event no objection to Sayyah's proof of claim is filed within that time, then the ICH Class 2 Secured Claim of Sayyah shall be deemed allowed and satisfied by setoff as of the Petition Date and the unsecured ICH Class 5 Claim of Sayyah for the deficiency shall be deemed an Allowed Claim in ICH Class 5. b. Upon an objection, the Court will determine the amount and timing of the offset or recoupment to which Sayyah is entitled. The Debtor, the Creditors' Committee and, upon its formation, the Trust, agree that the date of any offset or recoupment applied shall be deemed to occur no later than the earlier of (i) February 15, 1997, or (ii) the Effective Date. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 20 c. The remainder of the claim of Sayyah not treated as an ICH Class 2 claim shall be treated as an unsecured claim in ICH Class 5 in the amount set forth in Sayyah's proof of claim and calculated as set forth above, or in the amount, if any, as may be determined by the Court upon timely objection. d. The Trust shall reserve the amount of $3.3 million with respect to the ICH Class 5 Claim of Sayyah under the provisions of the Joint Plan. This amount shall not be determined as a limit to the amount, if any, of an allowed ICH Class 5 Claim of Sayyah. 5. The Plaintiffs in Adversary Proceeding No. 395-3589 did not cast any ballots on the Joint Plan, but they appeared at the Confirmation Hearing through their counsel of record, who participated in the hearing and verbally objected to provisions of the Joint Plan specifically regarding releases. Such objections were fully resolved by the agreement of the Plan Proponents that the Confirmation Order shall contain a statement that the Joint Plan does not have the effect of releasing individual, non-derivative claims held by third parties against non-debtor parties. VI. VOTING 1. The Debtors, Hill and Knowlton, and Merrill Corporation, acting for the Plan Proponents, served Solicitation Packages in compliance with the Disclosure Statement Order. 2. Following the service of Solicitation Packages as provided by the Disclosure Statement Order, Hill and Knowlton properly assisted the Plan Proponents with the solicitation of votes from the impaired classes of Claims and Interests by answering various questions from holders of Claims and Interest regarding the Joint Plan, with the FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 21 guidance and advice of the Debtors' counsel in good faith and in a manner consistent with the Bankruptcy Code. 3. There are no holders of ICH Class 4 - Other Secured Claims. 4. The Joint Plan leaves unaltered the legal, equitable, and contractual rights of holders of the SWL Holding Class 1 - Secured Claims, SWL Holding Class 2 - General Unsecured Claims, SWL Holding Class 3 - Common Stock, Care Class 1 Secured Claims, Care Class 2 - General Unsecured Claims, and Care Class 3 Common Stock, and thus in accordance with Sections 1124(1) and 1126(f) of the Bankruptcy Code, each of the foregoing classes of Claims and Interests is unimpaired and deemed to have accepted the Joint Plan. 5. Article 5 of the Joint Plan identifies ICH Class 1 - Secured Claim of Ozark, ICH Class 2 - Secured Claim of Sayyah, ICH Class 3 - Tenneco, ICH Class 4 - - Other Secured Claims, ICH Class 5 - General Unsecured Claims, ICH Class 6 Preferred Stock, and ICH Class 7 - Common Stock as impaired under Section 1124(1) (the "Impaired Classes") and therefore entitled to vote to accept or reject the Joint Plan. 6. Hill and Knowlton has made a final determination of the validity of, and tabulation respecting, all acceptances and rejections of the Joint Plan by the holders of Claims and Interests of the Impaired Classes entitled to vote on the Joint Plan and has submitted a written report of such determination. 7. With respect to the Impaired Classes, each of the following classes has accepted the Joint Plan by at least two-thirds in amount and a majority of number of holders of claims in each class actually voting: ICH Class 1 - Secured Claim of Ozark, ICH Class 3 - Tenneco and ICH Class 5 - General Unsecured Claims. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 22 8. With respect to Impaired Classes of Interests entitled to vote on the Joint Plan, each of the following classes have accepted the Joint Plan by at least two-thirds in amount of Interests in each class actually voting: ICH Class 6 - Preferred Stock and ICH Class 7 - Common Stock. 9. With respect to Impaired Classes of Claims, ICH Class 2 - Secured Claim of Sayyah is the only class which has rejected the Joint Plan. 10. Hill and Knowlton has made a final determination of, and tabulation respecting, all acceptances and rejections of the Joint Plan, pursuant to and in compliance with the guidelines and procedures set forth in the Disclosure Statement Order. 11. The respective determinations of Hill and Knowlton are valid and correctly set forth in the tabulation of votes required under the Bankruptcy Code. VII. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY CODE A. SECTION 1129(A)(1) COMPLIANCE OF THE JOINT PLAN WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. 1. The Court finds and concludes that the Joint Plan satisfies all the applicable provisions of the Bankruptcy Code. 2. The First Modification and the Second Modification are not material. As so modified, the Joint Plan continues to meet the requirements of Sections 1122 and 1123 of the Bankruptcy Code. The First Modification and the Second Modification satisfy Section 1127 of the Bankruptcy Code, are hereby approved, and have become and are part of the Joint Plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 23 B. SECTION 1123(A)(1) DESIGNATION OF CLAIMS AND INTERESTS. 1. Section 1123(a)(1) of the Bankruptcy Code provides that a plan must designate classes of claims and interests. In accordance with Section 1123(a)(1) of the Bankruptcy Code, Articles 3.1 through 3.3 of the Joint Plan designate classes of Claims against and Interests in the Debtors other than Administrative Expenses and Tax Claims. Classes of Administrative Expenses and Tax Claims are not required to be designated pursuant to Section 1123(a)(1) of the Bankruptcy Code. The Joint Plan adequately and properly classifies all Claims against and Interests in the Debtors and, accordingly, satisfies Section 1123(a)(1) of the Bankruptcy Code. C. SECTION 1122(A) CLASSIFICATIONS. 1. Section 1122(a) of the Bankruptcy Code provides that a plan may place a claim or interest in a particular class if such claim or interest is substantially similar to the other claims or interests of such class. A classification scheme satisfies Section 1122(a) of the Bankruptcy Code when a reasonable basis exists for the classification scheme, and the claims or interests within each particular class are substantially similar. See In re Boston Post Road Ltd. Partnership, 21 F.3d 477 (2d Cir. 1994), cert. denied, 130 L.Ed. 2d 782, 115 S.Ct. 897 (1995); In re Jersey City Medical Ctr., 817 F.2d 1955, 1060-61 (3d Cir. 1987); In re U.S. Truck Co., 800 F.2d 581, 586 (6th Cir. 1986); In re LeBlanc, 622 F.2d 872, 879 (5th Cir. 1980). 2. In accordance with Section 1122(a)(1) of the Bankruptcy Code, the Court concludes that Articles 3.1 through 3.3 of the Joint Plan properly classify Claims against and Interests in the Debtors together with other Claims or Interests in the Debtors that are substantially similar to the other Claims or Interests of such class. The Joint Plan accordingly satisfies Section 1122(a) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 24 D. SECTION 1123(A)(2) SPECIFICATION OF IMPAIRED CLASSES. 1. Section 1123(a)(2) of the Bankruptcy Code provides that a plan must specify any class of claims or interests that is impaired under a plan. The Joint Plan identifies impaired classes of Claims and Interests and provides for their treatment. 2. Article 5 of the Joint Plan identifies those Classes of Claims against and Interests in ICH that are impaired under the Joint Plan. 3. Article 5 also identifies those Classes of Claims against and Interests in SWL Holding and Care as unimpaired, and such classes are conclusively presumed to have accepted the Joint Plan pursuant to Section 1126(f) of the Bankruptcy Code. 4. The Joint Plan satisfies Section 1123(a)(2) of the Bankruptcy Code. E. SECTION 1123(A)(3) SPECIFICATION OF TREATMENT OF IMPAIRED CLASSES. 1. Section 1123(a)(3) of the Bankruptcy Code provides that a plan must specify the treatment of each impaired class of claims and interests. Article 4 of the Joint Plan specifies the treatment of each impaired class of Claims and of Interests of the Debtors. 2. The Joint Plan satisfies Section 1123(a)(3) of the Bankruptcy Code. F. SECTION 1123(A)(4) SAME TREATMENT WITHIN EACH CLASS UNLESS HOLDER AGREES TO DIFFERENT TREATMENT. 1. Section 1123(a)(4) of the Bankruptcy Code requires a plan to provide the same treatment for each claim or interest of a particular class, unless the holder of the claim or interest agrees to less favorable treatment of such particular claim or interest. With respect to each class of Claims and Interests under the Joint Plan, the Joint Plan provides the same treatment for each Claim or Interest of a particular class. 2. The Joint Plan satisfies Section 1123(a)(4) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 25 G. SECTION 1123(A)(5) MEANS OF IMPLEMENTATION. 1. Section 1123(a)(5) of the Bankruptcy Code provides that a plan must provide adequate means for its implementation. 2. Article 7 of the Joint Plan provides adequate means for implementation of the Joint Plan. Articles 7.1 and 7.2 of the Joint Plan provided for the following: (i) the establishment of the Lone Star Liquidating Trust (the "Trust") and the continuation of ICH as Reorganized ICH; (ii) the transfer of certain assets by SWL Holding and Care to the Trust and Reorganized ICH; (iii) the retention of certain assets by Reorganized ICH (the "Retained Assets"); and (iv) the transfer of certain assets by ICH to the Trust (the "Trust Assets"). 3. Article 7.3 provides adequate means for the implementation of the Joint Plan relating to the operation of the Trust. 4. Article 7.4 provides adequate means for the implementation of the Joint Plan relating to the continued operation of Reorganized ICH. 5. Articles 7.5, 7.6, 7.7 and 7.8 of the Joint Plan provide for the following: (i) provisions regarding the Modern/Western Agreement and the Philadelphia American Agreement; (ii) provisions regarding Perry Park; (iii) provisions regarding BML; (iv) termination of Indentures; (v) payment of Indenture Trustee's fees and expenses; (vi) Article 6.2 of the Joint Plan sets forth the means of implementation for the Shaw Settlement; and (vii) termination of the Committees. 6. The Joint Plan satisfies Section 1123(a)(5) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 26 H. SECTION 1123(A)(6) PROHIBITION AGAINST THE ISSUANCE OF NONVOTING EQUITY SECURITIES. 1. Section 1123(a)(6) of the Bankruptcy Code requires a plan to provide for the inclusion in the charter of the debtor, if the debtor is a corporation, or of any corporation to which the debtor transfers all or any part of the debtor's estate or with which the debtor has merged or consolidated, of a provision prohibiting the issuance of non-voting equity securities. 2. The Joint Plan provides that the Restated Certificate of Incorporation and By-laws of Reorganized ICH may be amended, if necessary, to satisfy Section 1123(a)(6) of the Bankruptcy Code. 3. Section 1123(a)(6) is not applicable to the Trust because the Trust does not have a corporate charter. 4. The Joint Plan satisfies Section 1123(a)(6) of the Bankruptcy Code. I. SECTION 1123(A)(7) SELECTION OF OFFICERS AND DIRECTORS. 1. Section 1123(a)(7) of the Bankruptcy Code requires that the manner of selection of any director, officer, or trustee of the reorganized debtor, or any successor to such officer, director, or trustee, be consistent with the interests of creditors and interest holders and with public policy. 2. Articles 1.102 and 7.3 of the Joint Plan provide for the selection of the Managing Trustee and the Supervising Trustees. Article 7.4 provides for an initial board of directors and Chief Executive Officer of Reorganized ICH. From and after the Effective Date, Directors shall be selected in accordance with the By-laws of Reorganized ICH, and the Managing Trustee and the Supervising Trustees shall be selected in accordance with the Trust Agreement. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 27 3. The selection of the Managing Trustees and Supervising Trustees of the Trust, and the selection of the President and Chief Executive Officer and Initial Board of Directors of Reorganized ICH are consistent with the interests of creditors and interest holders and with public policy. 4. The Joint Plan complies with Section 1123(a)(7) of the Bankruptcy Code as to both the Trust and Reorganized ICH. J. SECTION 1123(B)(1) IMPAIRMENT. 1. Article 4 of the Joint Plan impairs or leaves unimpaired, as the case may be, each class of Claims against or Interests in the Debtors. K. SECTION 1123(B)(2) EXECUTORY CONTRACTS AND UNEXPIRED LEASES. 1. The Debtors have engaged in a thorough review of the executory contracts and unexpired leases to which any of the Debtors is a party. Article 8.1 of the Joint Plan provides for the rejection of executory contracts and unexpired contracts, unless the Debtors have expressly assumed such executory contract or unexpired lease before the Confirmation Hearing. 2. The rejection of the executory contracts and unexpired leases is (i) in the best interests of the Debtors, their estates, and their creditors, (ii) based upon and within the Debtors' sound business judgment, and (iii) necessary to the implementation of the Joint Plan. L. SECTION 1123(B)(3) RETENTION, ENFORCEMENT, AND SETTLEMENT OF CLAIMS ASSERTED AGAINST AND HELD BY THE DEBTORS. 1. Pursuant to Section 1123(b)(3)(A), Article 10.2 of the Joint Plan provides for the retention and enforcement of the Debtors' causes of action. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 28 2. Pursuant to Section 1123(b)(3)(A), Article 6.2 of the Joint Plan provides for the settlement of the Claims of the Debtors against the Shaw Group. In exchange for release and settlement of these Claims against the Shaw Group, the Shaw Group has agreed to (1) pay Reorganized ICH $500,000 in cash; (2) withdraw the Claims filed by the members of the Shaw Group; (3) subject to conditions provided for in Article 6.2(c) of the Joint Plan, allow the transfer of the CFSB Interest; and (4) perform their respective obligations under the Tax Settlement. 3. The Shaw Settlement pursuant to Article 6.2 of the Joint Plan is in the best interests of the Debtors, their estates, their creditors and interest holders and is fair and equitable. 4. Pursuant to Section 1123(b)(3)(A) of the Bankruptcy Code, on the Effective Date, the Debtors are authorized to execute a release in favor of parties defined as Released Entities. Under Article 1.74 of the Joint Plan, the term "Released Entities" means the Trust, the Trustee, the Creditors' Committee, the Equity Committee, the Shaw Group, and their respective present and former officers, directors, members, employees, agents, attorneys, and such other persons as the Equity Committee may designate prior to the conclusion of the Confirmation Hearing; no additional designations were made prior to conclusion of the Confirmation Hearing. 5. After the Effective Date, the compromise and settlement by Reorganized ICH of any Retained Cause of Action may be effected without necessity of Bankruptcy Court approval pursuant to Article 11.10 of the Joint Plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 29 M. SECTION 1123(B)(6) OTHER PROVISIONS NOT INCONSISTENT WITH APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. 1. The Joint Plan includes additional appropriate provisions that are consistent with applicable provisions of the Bankruptcy Code, including: 2. INDEMNIFICATION Article 10.7 of the Joint Plan provides that any obligations of the Debtors, pursuant to the Order Regarding Indemnification of Officers and Directors of Debtors entered February 14, 1996, shall not be discharged or impaired by the reorganization contemplated by this Joint Plan and will be performed and honored by the Trust regardless of the Confirmation of this Joint Plan; provided however, that such obligations will not be obligations of Reorganized ICH. All other obligations of the Debtors with respect to indemnification of officers and directors, or agents, representatives, successors or assigns thereof, will be treated as executory contracts rejected under the Joint Plan, and all Claims arising from or related thereto will be treated and classified as provided by the Joint Plan, subject to any and all defenses thereto and to subordination of such Claims under applicable provisions of the Bankruptcy Code. 3. The provisions of the Order Regarding Indemnification of Officers and Directors of the Debtors entered on February 14, 1996, are hereby ratified and confirmed as obligations of the Trust, subject to any and all defenses thereto of the Debtors, the Estates or the Trust, including that such claims are subordinated pursuant to the provisions of the Bankruptcy Code; provided however, that such obligations shall not be obligations of Reorganized ICH. The balance of the $500,000 fund provided for in such order (the "Indemnification Fund") shall be transferred to the Trust and utilized as provided in February 14, 1996 Order. The withdrawal of the Proofs of Claim of C. Fred Rice shall FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 30 not affect the survival of any claim by him for indemnity by ICH as treated under Article 10.7 of the Joint Plan. 4. SECURITIES-RELATED CLAIMS. The Joint Plan provides for the satisfaction of claims of holders of Allowed Securities-Related Claims related to the Notes, the Preferred Stock and the Common Stock, if any. Under Article 1.86 of the Joint Plan, Securities-Related Claims are defined as Claims, if any, arising from rescission of a purchase or sale of Securities of ICH or of any its affiliates, for damages arising from the purchase or sale of Securities, or for reimbursement or contribution allowed under Section 502 of the Bankruptcy Code on account of such a Claim, including but not limited to the Claims of the plaintiffs in the suit styled In re Southwestern Life Corporation Securities Litigation, Adversary Proceeding No. 395-3589, pending in the Bankruptcy Court. 5. Allowed Securities-Related Claims, if any, related to the Notes or the Preferred Stock are subordinated pursuant to Section 510 of the Bankruptcy Code and will be paid only after payment in full of all such non-subordinated Claims of such Class. Allowed Class 6 Securities-Related Claims shall be subordinated to other Allowed Class 6 Interests, pursuant to Section 510 of the Bankruptcy Code and will not be entitled to receive any distributions until after the distribution to holders of Allowed Non-Subordinated Class 6 Interests equals the full amount of their liquidation preference of $25.00 per share of Preferred Stock. 6. For purposes of calculating the distribution of Reorganized ICH Common Stock to holders of Allowed Securities-Related Claims based on Common Stock, if any, pursuant to the provisions of Joint Plan, holders of Allowed Securities-Related Claims, if any, based on Common Stock shall be entitled to receive their pro-rata portion of shares of Reorganized ICH Common Stock in an amount equal to: (i) the total amount of all FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 31 Allowed Securities-Related Claims within ICH Class 7 divided by (ii) $254 million, multiplied by (iii) 1,309,524, multiplied by (iv) a fraction, the numerator of which is the Allowed Amount of such holder's Allowed Securities-Related Claim within ICH Class 7, and the denominator of which is the total amount all Allowed Securities-Related Claims within ICH Class 7. N. SECTION 1129(A)(2) OF THE BANKRUPTCY CODE REQUIRES THE PROPONENT OF A PLAN TO COMPLY WITH ALL OF THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE. 1. Section 1129(a)(2) of the Bankruptcy Code requires the proponent of a plan to comply with all of the applicable provisions of the Bankruptcy Code. 2. The Debtors have complied with the operating guidelines and financial reporting requirements enacted by the United States Trustee by (i) timely filing all monthly operating reports and consolidated financial statements and (ii) maintaining and providing proof of insurance. The Debtors have paid all statutory fees required to be paid during the Chapter 11 Cases and filed all fee statements required to be filed. 3. The Debtors have timely filed with the Bankruptcy Court all schedules, lists of executory contracts, and statements of financial affairs. 4. The Plan Proponents and their respective directors, officers, employees, agents and professionals have acted in "good faith" within the meaning of Sections 1125(e), 1126(e), and 1129(a)(3) of the Bankruptcy Code. 5. The Plan Proponents have complied with the provisions of the Bankruptcy Code, the Bankruptcy Rules, applicable non-bankruptcy law, the Local Bankruptcy Rules, and the specific rules of the Bankruptcy Court throughout the Chapter 11 Cases. 6. The solicitation of votes from holders of Claims against and Interests in the Debtors was made following approval and dissemination of the Disclosure Statement to FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 32 holders of Claims and Interests in classes that are impaired under the Joint Plan and was made in good faith and in compliance with the applicable provisions of the Bankruptcy Code and the Bankruptcy Rules. The ballots of holders of Claims and Interests entitled to vote on the Joint Plan were properly solicited and tabulated. 7. The Plan Proponents have complied with all orders of the Bankruptcy Court and have fulfilled all of the obligations and duties owed to their respective constituencies as required by and set forth in Sections 1107 and 1108 of the Bankruptcy Code. 8. The Plan Proponents have complied with all applicable provisions of the Bankruptcy Code, as required by Section 1129(a)(2) of the Bankruptcy Code, including the provisions governing the notice, disclosure, and solicitation in connection with the Joint Plan, the Disclosure Statement, and all other matters considered by the Bankruptcy Court in connection with the Chapter 11 Cases. 9. Good, sufficient, and timely notice of the Disclosure Statement Hearing, the Confirmation Hearing and all other hearings in the Chapter 11 Cases has been given to all holders of Claims against and Interests in the Debtors and all other parties in interest to whom notice was required to have been given. 10. The Plan Proponents have satisfied Section 1129(a)(2) of the Bankruptcy Code. O. SECTION 1129(A)(3) PROPOSAL OF THE JOINT PLAN IN GOOD FAITH. 1. Section 1129(a)(3) of the Bankruptcy Code states that a plan must be proposed in good faith and not by any means forbidden by law. 2. The Debtors, the Creditors Committee and the Equity Committee have been closely involved in all negotiations regarding the Joint Plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 33 3. The Court has examined the totality of the circumstances surrounding the formulation of the Joint Plan. The Joint Plan is based on extensive arm's-length negotiations among the Debtors, the Creditors Committee, the Equity Committee, and other parties in interest. 4. The Joint Plan has been proposed with the legitimate and honest purpose of liquidating certain assets of the Debtors and reorganizing the Debtors' remaining businesses and affairs. 5. The Joint Plan was proposed in good faith and not by any means forbidden by law, and the Plan Proponents have thereby satisfied the requirements of Section 1129(a)(3) of the Bankruptcy Code. P. SECTION 1129(A)(4) BANKRUPTCY COURT APPROVAL OF CERTAIN PAYMENTS AS REASONABLE. 1. Section 1129(a)(4) of the Bankruptcy Code requires that all payments made or to be made by the plan proponent, by the debtor, or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, have been approved by, or are subject to the approval of, the court as reasonable. 2. Pursuant to Article 2.1(b) of the Joint Plan, each professional person whose retention with respect to the Debtors' cases has been approved by the Bankruptcy Court and who holds, or asserts, an Administrative Claim that is a Fee Claim shall be required to file with the Bankruptcy Court a final fee application within sixty days after the Effective Date and to serve notice thereof on all parties entitled to such notice pursuant to the Order Establishing Interim Procedures and Guidelines for Compensation of Professional Persons. The failure to timely file the fee application shall result in the Fee Claim being FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 34 forever barred and discharged. A Fee Claim with respect to which a Fee Application has been properly filed with the Bankruptcy Court shall become an Administrative Claim only to the extent allowed by Final Order. Not later than five days prior to the Effective Date, each such professional person shall file an estimate of its final Fee Claim on all parties entitled to such notice pursuant to the Order Establishing Interim Procedures and Guidelines for Compensation of Professional Persons. 3. Any other person or entity who claims to hold any other Administrative Claim shall be required to file with the Court an application within sixty days after the Effective Date and to serve notice thereof on all parties entitled to such notice. The failure to file timely the application as required under the Joint Plan shall result in the Claim being forever barred and discharged. An Administrative Claim with respect to which an application has been properly filed pursuant to the Joint Plan, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order. 4. The Joint Plan satisfies Section 1129(a)(4) of the Bankruptcy Code. Q. SECTION 1129(A)(5) DISCLOSURE OF IDENTITY AND AFFILIATIONS OF PROPOSED MANAGEMENT, COMPENSATION OF INSIDERS AND CONSISTENCY OF MANAGEMENT PROPOSALS WITH THE INTERESTS OF CREDITORS AND PUBLIC POLICY. 1. The Plan Proponents have disclosed the identity of the individuals who will hold positions with Reorganized ICH and the Trust immediately after confirmation of the Joint Plan and have shown that the service of such individuals is consistent with the interests of creditors and with public policy. 2. The Joint Plan satisfies Section 1129(a)(5) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 35 R. SECTION 1129(A)(6) APPROVAL OF RATE CHANGES. 1. Section 1129(a)(6) of the Bankruptcy Code requires a debtor to obtain the approval of any governmental regulatory commission, with jurisdiction over the debtor, with respect to any rate changes provided for in the debtor's plan of reorganization. 2. The Joint Plan has not provided for any changes in rates that require regulatory approval of any governmental agency. Neither the Debtors, Reorganized ICH nor the Trust assess rates that are subject to regulatory approval of any governmental agency. 3. Section 1129(a)(6) of the Bankruptcy Code is not applicable to the Joint Plan. S. SECTION 1129(A)(7) BEST INTERESTS OF CREDITORS. 1. Section 1129(a)(7) of the Bankruptcy Code requires that each creditor or interest holder in an impaired class must either have voted to accept the plan of reorganization, or will receive or retain under such plan on account of such claim or interest property of a value, as of the effective date of such plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated under chapter 7 of the Bankruptcy Code. 2. The Joint Plan satisfies Section 1129(a)(7) of the Bankruptcy Code. T. SECTION 1129(A)(8) ACCEPTANCE OF THE JOINT PLAN BY EACH IMPAIRED CLASS. 1. Section 1129(a)(8) of the Bankruptcy Code requires that, with respect to each class of claims or interests under a plan, such class has either accepted the plan or is not impaired under the plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 36 2. All Classes of Claims against and Interests in the Debtors with the exception of ICH Class 2 - Secured Claim of Sayyah has either voted to accept the Joint Plan or are not impaired under the Joint Plan. 3. Each of the unimpaired classes of Claims and Interests under the Joint Plan and each holder of a Claim or Interest in each such class is conclusively presumed to have accepted the Joint Plan, and, in accordance with Section 1126(f) of the Bankruptcy Code, solicitation of acceptance with respect to each such class is not required. 4. With respect to all Classes of Claims against or Interests in the Debtors except ICH Class 2 - Secured Claim of Sayyah, the Joint Plan satisfies the requirements of Section 1129(a)(8) of the Bankruptcy Code. U. SECTION 1129(A)(9) TREATMENT OF CLAIMS ENTITLED TO PRIORITY PURSUANT TO SECTION 507(A) OF THE BANKRUPTCY CODE. 1. Section 1129(a)(9) of the Bankruptcy Code provides for certain mandatory treatment of claims entitled to priority under the Bankruptcy Code. 2. Article 2.1 of the Joint Plan provides that each holder of an Administrative Claim, except as otherwise set forth in the Joint Plan (and specifically excluding Administrative Tax Claims), shall receive from the Trust either (i) with respect to Administrative Claims which are Allowed Claims on the Effective Date, the amount of such holder's Allowed Claim in one cash payment on the Initial Distribution Date, (ii) with respect to Administrative Claims which become Allowed Claims after the Effective Date, the amount of such holder's Allowed Claim in one cash payment on the applicable Distribution Date; or (iii) such other treatment agreed upon in writing by the Debtors and such holder; provided however, that any such Administrative Claim representing a liability incurred in the ordinary course of business by any of the Debtors shall be paid by the FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 37 Trust in accordance with the terms and conditions of the particular transaction giving rise to such liability and any agreements relating thereto. In connection herewith, the estimated amounts of such Administrative Claims shall on the Effective Date be reserved by the Trust with respect to payment of such Allowed Administrative Claims and shall not be treated as Available Cash. 3. In accordance with Section 1129(a)(9)(C) of the Bankruptcy Code, Article 2.2 of the Joint Plan provides that the Tax Settlement resolves and satisfies all Administrative Claims and Priority Claims for federal income taxes for which the Debtors are responsible for tax years 1990 through 1995. 4. Pursuant to Article 2.2(b) of the Joint Plan, each holder of an Allowed Administrative Claim for taxes shown on the (a) Federal income tax returns in which the Debtors are includible for the period from and after January 1, 1996, and ending on the Effective Date, and (b) State income tax returns in which the Debtors are includible for the period during which the Debtors' Chapter 11 cases are being administered and any other taxes of the Debtors payable pursuant to Section 507(a)(1) of the Bankruptcy Code (collectively, the "Allowed Administrative Tax Claims"), if any, shall be paid in cash in full from the Trust on the latest of (i) the Initial Distribution Date, or (ii) the date such payment is due under applicable law. Payment of Allowed Administrative Tax Claims shall be the responsibility of the Trust, and the estimated amounts of such tax liabilities as of the Effective Date shall be reserved and shall not be treated as Available Cash. The amount of Allowed Administrative Tax Claims shall be determined after giving effect to the terms of the Tax Settlement by a deemed closing of the books of the Debtors as of the close of the Effective Date, and shall be determined where appropriate on a consolidated or combined basis consistent with the manner in which the Debtors have previously filed tax FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 38 returns; provided however, that the Trust shall not be obligated in excess of the actual liability of the Debtors' tax liabilities for the taxable year during which the Effective Date occurs. The Trust shall have no obligation to Reorganized ICH for any tax liability. If the Effective Date occurs in a taxable year subsequent to the taxable year including January 1, 1996, the amount of Allowed Administrative Tax Claims shall be determined by carrying forward all available net operating losses, capital losses, alternative minimum tax net operating losses, and other tax attributes of the Debtors and members of their consolidated or combined groups, where applicable, for full use in the period of such subsequent taxable year deemed for these purposes to end on the Effective Date. 5. Pursuant to Article 2.2(c) of the Joint Plan, each Allowed Claim for State taxes entitled to priority in accordance with Section 507(a)(8) of the Bankruptcy Code, shall be paid in cash in full by the Trust on the later of (i) the Initial Distribution Date, or (ii) the date such payment is due under applicable law. 6. The Debtors have sufficient cash to fund payments of Allowed Administrative Expenses and Allowed Tax Claims. 7. The Joint Plan satisfies the requirements of Section 1129(a)(9) of the Bankruptcy Code. V. SECTION 1129(A)(10) ACCEPTANCE BY AT LEAST ONE IMPAIRED CLASS. 1. Section 1129(a)(10) of the Bankruptcy Code provides that at least one impaired class of claims must accept a plan of reorganization, determined without including any acceptance of such plan by any insider. 2. At least one impaired class in the Joint Plan has voted to accept the Joint Plan determined without including any acceptance of the Joint Plan by an insider holding a Claim in each such class. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 39 3. The Joint Plan satisfies the requirements of Section 1129(a)(10) of the Bankruptcy Code. W. SECTION 1129(A)(11) FEASIBILITY OF THE JOINT PLAN. 1. Section 1129(a)(11) of the Bankruptcy Code requires that a plan be "feasible" and that the debtor or its successor under such plan is not likely to require liquidation or further financial reorganization, except as provided under such plan. 2. On the basis of the information presented in the Joint Plan, the record of the Confirmation Hearing, and as detailed in the Disclosure Statement, the Court concludes that confirmation of the Joint Plan is not likely to be followed by the liquidation of Reorganized ICH or further financial reorganization thereof and that the liquidation of the Trust is provided for under the Joint Plan. 3. At the Confirmation Hearing, the Court was advised through the testimony of James R. Arabia of the terms of a potential transaction which is under active consideration by the members of the Initial Board of Directors of Reorganized ICH. 4. The Joint Plan satisfies the requirements of Section 1129(a)(11) of the Bankruptcy Code. X. SECTION 1129(A)(12) PAYMENT OF BANKRUPTCY FEES. 1. Section 1129(a)(12) of the Bankruptcy Code requires either that all fees payable under 28 U.S.C. Section 1930, as determined by the court at the hearing on confirmation of the plan, have been paid or that the plan provides for the payment of all such fees on the effective date of the plan. 2. Article 2.5 of the Joint Plan provides that all fees payable pursuant to 28 U.S.C. Section 1930 shall be paid by the Trust on the Effective Date. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 40 3. The Joint Plan satisfies the requirements of Section 1129(a)(12) of the Bankruptcy Code. Y. SECTION 1129(A)(13) RETIREE BENEFITS. 1. Section 1129(a)(13) of the Bankruptcy Code requires the continuation of payment of all retiree benefits, at the level established pursuant to Section 1114 of the Bankruptcy Code at any time prior to confirmation of the plan, for the duration of the period for which the debtor has obligated itself to provide such benefits. 2. The Joint Plan provides for the continuation of retiree benefits, as the term is defined under Section 1114 of the Bankruptcy Code. The Trust is authorized to exercise the Debtors' rights under the applicable retiree benefit documents, including the modification of such benefits in accordance with such plan documents and the payment of sums to a third party for the provision of such benefits to retirees henceforth. In addition, the Debtors are authorized to take such action as may be necessary to terminate all existing employee benefit plans, other than the retiree benefit plan, on or before the Effective Date. 3. The Joint Plan satisfies the requirements of Section 1129(a)(13) of the Bankruptcy Code. Z. BANKRUPTCY RULE 3016(B). 1. The Joint Plan is dated and identifies the entities that have proposed and submitted the Joint Plan. 2. The Joint Plan satisfies Federal Rule of Bankruptcy Procedure 3016(b). AA. SECTION 1129(B) CONFIRMATION OF THE JOINT PLAN OVER THE NONACCEPTANCE OF CERTAIN IMPAIRED CLASSES. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 41 1. The holder of the Class 2 - Secured Claim of Sayyah has rejected the Joint Plan. 2. The Joint Plan satisfies the requirements of Section 1129(b) of the Bankruptcy Code because, with respect to the Class 2 Secured Claim of Sayyah, the Joint Plan does not discriminate unfairly and is fair and equitable with respect to such claim. 3. Pursuant to Article 3.1(a)(ii), the Class 2 Secured Claim of Sayyah shall be fully satisfied by an offset of the amount owed by Sayyah to ICH against the Allowed Amount of Sayyah's Claim against ICH. Such offset satisfies the requirements of Sections 1129(b)(1) and (2)(A) of the Bankruptcy Code. In re FCX, 853 F.2d 1149 (4th Cir. 1988), cert. denied 489 U.S. 1011 (1989). 4. The Joint Plan satisfies the requirements of Section 1129(b) of the Bankruptcy Code with respect to the one class of Claims that did not accept the Joint Plan. AB. SECTION 1129(D) TAX AVOIDANCE. 1. Section 1129(d) of the Bankruptcy Code provides that a court may not confirm a plan if the principal purpose is the avoidance of taxes or the avoidance of the requirements of Section 5 of the Securities Act of 1933, as amended. 2. No objection has been filed by any governmental unit or any party in interest alleging that the principal purpose of the Joint Plan is avoidance of taxes or avoidance of the requirements of Section 5 of the Securities Act of 1933, as amended. 3. The principal purpose of the Joint Plan is not avoidance of taxes or avoidance of the requirements of Section 5 of the Securities Act of 1933, as amended. 4. The Joint Plan satisfies Section 1129(d) of the Bankruptcy Code. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 42 AC. TAX SHARING AGREEMENT. 1. The Debtors and members of their consolidated group have executed a Consolidated Tax Allocation Agreement (the "Tax Agreement"). The Tax Agreement provides for certain allocations among the Debtors and members of their consolidated group of the federal income tax liabilities of members of the group. In order to effectuate the terms of the Joint Plan, and to realize the value of BML, ICH Funding Corp. and REO Holding under the terms of the Joint Plan, any outstanding obligations under the Tax Agreement between and among the Debtors, BML, ICH Funding and REO Holdings should be cancelled. AD. ASSET VALUES. 1. The fair market value as of the Effective Date of the assets listed in (a) thru (h) below is as follows: a. CFSB Interest. The CFSB Interest has a fair market value of $18,000,000. b. ICH Funding. The stock of ICH Funding has a fair market value of $1,353,000. c. Southwestern Financial Corp. $40 Million Note Due 2005. The fair market value of the Southwestern Financial Corp. $40 Million Note Due 2005 is $40,000,000. d. Hatbrands, L.P. and Hatbrands, Inc. II L.P. The fair market value of BML's interest in Hatbrands, L.P. and Hatbrands, Inc. II L.P. is $0. e. Conseco Capital Partners. The fair market value of BML's interest in the account receivable relating to the sale of Conseco Capital Partners if $3,571,000. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 43 f. Post Oak. The fair market value of BML's interest in the Post Oak property in Houston, Texas, is $2,300,000. g. Berg Electronics, L.P. As of the Effective Date, the fair market value of BML's interest in Berg Electronics, L.P. is $10,000,000. h. Neodata, L.P. and Neodata DBMS, L.P. As of the Effective Date, the fair market value of BML's interest in Neodata, L.P. and Neodata DBMS, L.P. is $1,817,000. VIII. DISTRIBUTIONS A. DISTRIBUTIONS. 1. Articles 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.8 and 9.9 of the Joint Plan contain the provisions governing distributions under the Joint Plan, and such distributions are fair and reasonable. B. SECTIONS 1145 AND 1125(E). 1. Each of ICH and Reorganized ICH constitute or will constitute a "debtor," and the Trust will constitute a "successor" and a "newly organized successor" to ICH, for purposes of Sections 1145 and 1125(e) of the Bankruptcy Code and each of the Plan Proponents has participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code in the offer, sale, issuance and distribution of Reorganized ICH Common Stock or the Trust Interests or Trust Certificates (the "Plan Securities"), and any other securities that may be deemed to be offered, sold, issued or distributed pursuant to the Joint Plan and the transactions contemplated thereunder, to the extent such interests constitute a security under the Securities Act of 1933, pursuant to the Joint Plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 44 2. The Plan Proponents have fulfilled the requirements of Section 1125(e), of the Bankruptcy Code having solicited votes on the Joint Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code. 3. With respect to the offer, sale, issuance and distribution of the Plan Securities or any other securities, if any, pursuant to the terms of the Joint Plan (1) Reorganized ICH and the Trust are not underwriters within the meaning of section 1145(b) of the Bankruptcy Code, (2) the offer, sale and issuance of the Plan Securities, and any other securities, if any, are, and shall be, pursuant to a plan of reorganization, such as the Joint Plan, (3) the Plan Securities, and any other securities, if any, are to be distributed in exchange for Claims against or Interests in the Debtors, (4) Reorganized ICH Common Stock, as securities of Reorganized ICH, constitute securities of a debtor under a plan of reorganization, such as the Joint Plan, (5) the Trust Certificates, as securities of the Trust, constitute securities of a successor to ICH under the Joint Plan, and (6) the other securities, if any, constitute securities of ICH or of a successor to ICH under a plan of reorganization, such as the Joint Plan. 4. The disclosure to Reorganized ICH by the depositories, transfer agents, street name holders, and all other banks, brokers, or agent nominee record holders (collectively "Record Holders") of the Common Stock and/or Preferred Stock of: (1) the identity of the beneficial owners of Common Stock and/or Preferred Stock held of record by such Record Holders for the benefit of third party beneficial owners, and (2) the amount and type of the Common Stock and/or Preferred Stock attributable to such third party beneficial owners is essential to the completion, implementation, and operation of the Joint Plan. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 45 5. The disclosure to the Trust by Record Holders of the Notes of: (1) the identity of the beneficial owners of the Notes held of record by such Record Holders for the benefit of third part beneficial owners and (2) the amount and type of the Notes attributable to such third party beneficial owners is essential to the completion, implementation, and operation of the distribution of the Trust Certificates and is essential to the completion, implementation, and operation of the Joint Plan. IX. PLAN MODIFICATIONS 1. On January 20, 1997, the Plan Proponents filed the First Modification. which affected certain technical amendments to the Joint Plan and resolve certain objections to confirmation of the Joint Plan. At the Confirmation Hearing, the Plan Proponents and the Shaw Group submitted the Second Modification (collectively the Plan Modifications"). 2. The Plan Modifications do not adversely change the treatment of the claim of any creditor or the right of holders of interests. The Plan Modifications merely clarify certain provisions of the Joint Plan. The Plan Modifications preserve the Joint Plan, as negotiated, and the rights of all parties set forth therein. On January 20, 1997, the Plan Proponents served the First Modification upon persons listed on the Master Service List. Such service of the Plan Modifications constitutes adequate and appropriate notice of the First Modification, and no further notice of the First Modification is necessary. The Plan Modifications comply in all respects with Section 1127 of the Bankruptcy Code, Bankruptcy Rule 3019, and all other provisions of the Bankruptcy Code. No additional disclosure under Section 1125 of the Bankruptcy Code is required with respect to the Plan Modifications. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 46 3. At the Confirmation Hearing, the Court approved the Plan Modifications, and, pursuant to Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, all holders of claims that have accepted or are conclusively presumed to accept the Joint Plan are deemed to have accepted the Plan Modifications. X. THE TRANSFER OF PROPERTIES UNDER THE JOINT PLAN ARE GOVERNED BY THE EXEMPTIONS PROVIDED IN SECTION 1146(C) OF THE BANKRUPTCY CODE 1. Any and all transfers under the Joint Plan including, without limitation, the following transfers shall not be subject to taxation under state or local law imposing a stamp, transfer, or similar tax: (a) SWL Holding & Care Transactions. Consistent with the requirements of Section 1146(c) of the Bankruptcy Code, the transactions and distributions made by SWL Holding & Care under the Joint Plan will not be subject to taxation under any state or local law imposing a stamp, transfer, or similar tax. (b) Transfer of Trust Assets. Consistent with the requirements of Section 1146(c) of the Bankruptcy Code, the transfer of Trust Assets to the Trust will not be subject to taxation under any state or local law imposing a stamp, transfer, or similar tax. (c) Assumption of Modern/Western Agreement and Philadelphia American Agreement Obligations. Consistent with the requirements of Section 1146(c) of the Bankruptcy Code, the assumption of the Modern/Western Agreement and the Philadelphia American Agreement (as such Agreements are defined in the Joint Plan) obligations by ICH and the Trust will not be subject to taxation under any state or local law imposing a stamp, transfer, or similar tax. FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 47 (d) Transfer of Perry Park. Consistent with the requirements of Section 1146(c) of the Bankruptcy Code, the transfer of Perry Park to Reorganized ICH under the Joint Plan will not be subject to taxation under any state or local law imposing a stamp, transfer, or similar tax. (e) Transfer of Assets of BML. Consistent with the requirements of Section 1146(c) of the Bankruptcy Code, the transfer of assets of BML will not be subject to taxation under any state or local law imposing a stamp, transfer, or similar tax. CONCLUSION The foregoing constitutes the Court's findings of fact and conclusions of law. Based thereon, the Court will separately enter an order confirming the Joint Plan. SIGNED This 7th day of February, 1997. /s/ Robert C. McGuire --------------------- ROBERT C. McGUIRE CHIEF BANKRUPTCY JUDGE SUBMITTED BY: Daniel C. Stewart, SBT #19206500 Josiah M. Daniel, III, SBT # 05358500 WINSTEAD SECHREST & MINICK P.C. 5400 Renaissance Tower 1201 Elm Street Dallas, Texas 75270 (214) 745-5400 ATTORNEYS FOR DEBTORS FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 48 Michael A. Rosenthal, SBT #17281490 I. Richard Levy, SBT #12265020 GIBSON, DUNN & CRUTCHER 1717 Main Street, Suite 5400 Dallas, Texas 75201 (214) 698-3100 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS Peter D. Wolfson John A. Bicks PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Ave. New York, New York 10022 (212) 326-0806 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 49 EX-99.3 5 ORDER CONFIRMING FIRST AMENDED JOINT PLAN IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION IN RE: ) ) I.C.H. CORPORATION, ) CASE NO. 395-36351 a Delaware corporation, f/k/a ) (Chapter 11) Southwestern Life Corporation, f/k/a ) I.C.H. Corporation, ) Fed. Tax No. 43-6069928, ) ) SWL HOLDING CORPORATION, ) CASE No. 395-36352 a Delaware corporation, f/k/a ) (Chapter 11) Life Interests Corporation, ) Fed. Tax No. 51-0343581, ) ) CARE FINANCIAL CORPORATION, ) CASE NO. 395-36354 a Delaware corporation, f/k/a ) (Chapter 11) Health Interests Corporation, ) Fed. Tax No. 51-0343580, and ) ) JOINTLY ADMINISTERED DEBTORS. ) CASE NO. 395-36351-RCM-11 ) ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 On January 31, 1997, the Court conducted the hearing on confirmation (the "Confirmation Hearing") of the First Amended Joint Plan of Reorganization under Chapter 11 dated November 15, 1996, as modified by the First Nonmaterial Modification of First Amended Joint Plan of Reorganization Under Chapter 11 filed on January 20, 1997, and as further modified by that certain letter agreement filed with and accepted by the Court at the Confirmation Hearing as the Second Nonmaterial Modification of the First Amended Joint Plan of Reorganization Under Chapter 11 (as so modified, the "Joint Plan") filed by I.C.H. Corporation ("ICH"), SWL Holding Corporation ("SWL"), and Care Financial Corporation ("Care" and, together with ICH and SWL, the "Debtors"), the Official ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 1 Committee of Unsecured Creditors (the "Creditors Committee") and, the Official Committee of Equity Security Holders (the "Equity Committee" and, together with the Debtors and the Creditors Committees, the "Plan Proponents"). At the conclusion of the Confirmation Hearing, having reviewed and considered the Joint Plan, the testimony proffered and adduced and the exhibits submitted into evidence, the arguments of counsel presented at the Confirmation Hearing, and all of the objections to confirmation of the Joint Plan, and the Court being familiar with the Joint Plan and other relevant factors affecting the Debtors' Chapter 11 cases (the "Chapter 11 Cases"), and having taken judicial notice of the entire record of the Chapter 11 Cases since the Petition Date, the Court made certain Findings of Fact and Conclusions of Law (the "Findings and Conclusions") which are separately entered herewith. On the basis of the Findings and Conclusions, which are incorporated herein by reference, and good cause having been shown, it is: ORDERED, ADJUDGED AND DECREED that: 1. This Order1 shall be effective according to its terms upon its entry. Notwithstanding the foregoing, the Effective Date shall occur on the later of (i) the eleventh (11) day following the date on which this Order has been entered on the docket maintained by the Clerk of the Bankruptcy Court, (ii) if this Order is stayed pending appeal, the day after such stay is dissolved by final order, or (iii) the first date upon which this Order is subject to execution or enforcement under Bankruptcy Rule 7062. - ----------------- 1 All capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Joint Plan or, if not defined in the Joint Plan, as defined in Title 11 of the United States Code (the "Bankruptcy Code"). ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 2 2. The Joint Plan complies with all applicable provisions of the Bankruptcy Code and all applicable Bankruptcy Rules relating to confirmation and, thus, the Joint Plan is hereby confirmed. 3. The record of the Confirmation Hearing is closed. 4. All motions to challenge, designate or in any way disqualify any votes cast to accept or reject the Joint Plan, are hereby denied. The Shaw Group's oral motion to change its rejecting votes with respect to the Joint Plan is hereby granted, and such rejecting votes are hereby amended to be acceptances of the Joint Plan. 5. All objections to confirmation of the Joint Plan, whether formally filed in writing or not, including but not limited to: (i) the Objection of the Shaw Group to Confirmation of the Joint Plan of Reorganization under Chapter 11 dated November 15, 1996, and/or reservation of rights included therein; (ii) Supplemental Objection of the Shaw Group; (iii) the Objection of the Shaw Group to First Nonmaterial Modification of Joint Plan of Reorganization; (iv) the Objection of Victor L. Sayyah to Confirmation of First Amended Joint Plan of Reorganization, and (v) the oral objections of the Plaintiffs in Adversary No. 395-3985, and any other objections to confirmation that have not been withdrawn prior to entry of this Order or are not cured by the relief granted herein, are overruled in their entirety, and all withdrawn objections are deemed withdrawn. 6. Nothing in this Order shall be construed as modifying or contradicting settlements previously approved by Order of this Court, including but not limited to the Order Approving Agreement for Compromise and Settlement of Tax Claims and Certain Tax Related Liabilities of the Debtors entered on September 13, 1997, the Order Granting Motion for Approval of Compromise Between ICH Corporation and Tenneco, Inc. entered ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 3 on January 17, 1997, and the Order Granting Motion for Approval of Compromise between ICH Corporation and Conseco, Inc. entered on January 31, 1997. 7. In accordance with Article 7 of the Joint Plan and pursuant to Sections 105(a) and 1123(a)(5)(B) of the Bankruptcy Code, the transfer of the Trust Assets to the Trust is authorized and approved, and the Debtors are authorized, empowered and ordered to convey to the Trust all of their rights, titles, and interests in and to the Trust Assets in accordance with the terms and conditions of the Joint Plan and the Trust Agreement and Joint Plan-related documents filed with the Court. The Trust Assets include, without limitation, the Debtors' right, title, and interest in and to the obligation of Sayyah to ICH evidenced by the documents referred to, attached to, or related to the Proof of Claim filed by Sayyah on February 7, 1996 (the "Sayyah Obligation"), and that certain partnership interest owned by the Estate of ICH which is the subject of Adversary No. 397-3038 in this Court (the "Conseco Partnership Interest"). 8. In accordance with Article 7 of the Joint Plan and pursuant to Section 1141(c) of the Bankruptcy Code, the Trust Assets [including the Capital and Surplus Retention Assets that may subsequently be transferred to the Trust pursuant to Article 7.5(c)] shall be conveyed to the Trust (1) free and clear of all liens, claims, interests, encumbrances, and charges of the Claimants and holders of Interests of the Debtors to the full extent permitted by the Bankruptcy Code, including: (A) those of the kind specified in Sections 502(g), (h), and (i) of the Bankruptcy Code, and (B) preferential rights or rights of first refusal of any kind or nature whatsoever, whether direct or indirect, absolute or contingent, matured or unmatured, liquidated or unliquidated, of, by, or against the Trust Assets; and (2) with respect to contracts or leases assigned or transferred, ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 4 notwithstanding a provision in any contract or lease or any applicable law that prohibits, restricts or conditions the assignment or transfer of that contract or lease, including all preferential rights or rights of first refusal of any kind or nature whatsoever, pursuant to Section 365(f) of the Bankruptcy Code; provided that such prohibition, restriction or condition of assignment or transfer shall be negated only with respect to transfers and assignments effected pursuant to the Joint Plan, and that such prohibitions, restrictions and conditions of assignment shall otherwise remain in full force and effect and a part of the contract or lease so assigned or transferred. Notwithstanding the foregoing provisions of this paragraph, the transferability of the CFSB Interest is governed by Article 6.2 of the Joint Plan and Paragraph 26 below. 9. The transfers of the Trust Assets to the Trust are and will be legal, valid and effective assignments and transfers of the Trust Assets pursuant to the Joint Plan. 10. In accordance with Article 7 of the Joint Plan and pursuant to Sections 105(b) and 1123(a)(5)(A)(B) and (D) of the Bankruptcy Code, any retention of Retained Assets by Reorganized ICH and the transfer of Retained Assets to Reorganized ICH is authorized and approved, and the Debtors are authorized, empowered and ordered to transfer to Reorganized ICH all of their rights, titles, and interests in and to the Retained Assets in accordance with the terms and conditions of the Joint Plan. 11. In accordance with and subject to Article 7 of the Joint Plan, and pursuant to Section 1141(a)(5)(A) of the Bankruptcy Code, on the Effective Date, the Retained Assets shall be transferred and vested in Reorganized ICH (1) free and clear of all liens, claims, interests, encumbrances, and charges of Claimants and holders of Interests of the Debtors in accordance with and to the full extent permitted by Section 1141(c) of the ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 5 Bankruptcy Code, including: (A) those of the kind specified in Sections 502(g), (h), and (i) of the Bankruptcy Code; and (B) preferential rights or rights of first refusal of any kind or nature whatsoever, whether direct or indirect, absolute or contingent, matured or unmatured, liquidated or unliquidated, of, by, or against the Retained Assets; and (2) with respect to contracts or leases assigned or transferred, notwithstanding a provision in any contract or lease or any applicable law that prohibits, restricts or conditions the assignment or transfer of that contract or lease, including all preferential rights or rights of first refusal of any kind or nature whatsoever, pursuant to Section 365(f) of the Bankruptcy Code; provided that such prohibition, restriction or condition of assignment or transfer shall be negated only with respect to transfers and assignments effected pursuant to the Joint Plan, and that such prohibitions, restrictions and conditions of assignment shall otherwise remain in full force and effect and a part of the contract or lease so assigned or transferred. 12. The Debtors, the Trust and Reorganized ICH are authorized and empowered to take such actions and do all things and to incur all reasonable costs and expenses as may be necessary and required to implement and effectuate the Joint Plan, the transfer to the Trust of the Trust Assets and the transfer to and retention by Reorganized ICH of the Retained Assets, and this Order. 13. Notwithstanding the foregoing, Ozark National Life Insurance Company shall retain its lien upon certain real property of Perry Park until its Secured Claim has been paid in full, which shall be on the Initial Distribution Date, whereupon Ozark shall execute and deliver to Reorganized ICH a complete release of its lien on such property. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 6 14. The provisions of the Article 7.5 of the Joint Plan relating to BML are authorized and approved, and the Debtors, the Trust and Reorganized ICH are authorized to take such action as may be necessary to perform their respective duties under the Joint Plan, including but not limited to: a. The Debtors are authorized to take any action and to execute such documents as may be necessary or appropriate to effectuate the assumption by ICH of the rights and obligations of BML under the Modern/Western Agreement and the Philadelphia American Agreement (as such Agreements are defined in the Joint Plan); and b. ICH is authorized to take any action and to execute such documents as may be necessary or appropriate to effectuate the assignment to the Trust of all of ICH's rights and obligations under the Modern/Western Agreement and the Philadelphia American Agreement (as such Agreements are defined in the Joint Plan); and the Trust is authorized to take any action and to execute such documents as may be necessary or appropriate to effectuate the assumption by the Trust of the obligations of ICH and/or BML under the Modern/Western Agreement and the Philadelphia American Agreement. c. The assumption by the Trust of non-reinsured liabilities of BML, as provided for by the Joint Plan, is approved and the Trust is authorized to take any action and to execute such documents that may be necessary or appropriate to effectuate the assumption by the Trust of the non-reinsured liabilities of BML. Reorganized ICH shall not be responsible or liable for any liabilities of the Debtors ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 7 including, without limitation, the non-reinsured liabilities, as provided for by the Joint Plan. 15. Subject to the provisions of the Joint Plan, after the Effective Date, Reorganized ICH may operate its business and buy, sell, use, acquire, and dispose of its property, free of any restrictions imposed by the Bankruptcy Code or any requirement of obtaining further approvals of the Court. 16. The Plan Proponents, the Trust, the Trustees, Reorganized ICH, the Shaw Group, and any other Entity having duties or responsibilities under the Joint Plan or this Order, and their respective directors, officers, general partners, agents, representatives, and attorneys, are authorized, empowered and ordered to carry out all of the provisions of the Joint Plan, to issue, execute, deliver, file, and record, as appropriate, any instrument, or perform any act necessary to implement, effectuate, or consummate the Joint Plan or this Order, and to issue, execute, deliver, file, and record, as appropriate, such other contracts, instruments, releases, indentures, mortgages, deeds, bills of sale, assignments, leases, or other agreements or documents, and to perform such other acts and execute and deliver such other documents as are required by, consistent with and necessary or appropriate to implement, effectuate, or consummate the Joint Plan and this Order and the transactions contemplated thereby and hereby, all without the requirement of further application to, or Order of, the Court or further action by their respective directors, stockholders or beneficiaries, and with like effect as if such actions had been taken by unanimous action of the respective directors, stockholders or beneficiaries of such entities. The Co-CEOs, any other officer of the Debtors; the Secretary, assistant secretary, and any other officer of Reorganized ICH; and the Managing Trustee of the ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 8 Trust (as defined in the Trust Agreement) are authorized to certify or attest to any of the foregoing actions taken by the Debtors, Reorganized ICH and/or the Trust, respectively. The Managing Trustee is hereby irrevocably appointed as the Debtors' attorney-in-fact (which appointment as attorney-in-fact shall be coupled with an interest), with full authority in the place and stead of each Debtor and in the name of each Debtor or otherwise, from time to time after the Effective Date, in the Managing Trustee's discretion to take any action and to execute any instrument that the Managing Trustee may deem to be necessary or advisable to convey, transfer, vest, perfect, and confirm title of the Trust Assets in the Trust as to, and/or to put the Trust in possession of, any and all Trust Assets, including, without limitation, to issue, execute, deliver, file, and record such contracts, instruments, releases, indentures, mortgages, deeds, bills of sale, assignments, leases, or other agreements or documents, and to file any claims, to take any action, and to institute any proceedings that the Managing Trustee may deem necessary or desirable in furtherance thereof. 17. The Debtors, the Trust and Reorganized ICH are further authorized, empowered and ordered to cause to be filed with the Secretary of State or other applicable officials of any applicable governmental units any and all certificates, agreements, or plans of merger, dissolution, liquidation, or amendment necessary or appropriate to effectuate the transactions contemplated by the Joint Plan and this Order, and amended and restated certificates or articles of incorporation and by-laws or certifications or articles of amendment and all such other actions, filings, or recordings as may be required under appropriate provisions of the applicable laws of all applicable Governmental Units. The execution of any such document or the taking of any such ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 9 action shall be, and hereby is, deemed conclusive evidence of the authority of such Entity to so act. This Order shall constitute all approvals and consents, if any, required by the General Corporation Law of the State of Delaware and all other applicable business corporation, trust, and other laws of the applicable governmental units with respect to the implementation and consummation of the Joint Plan. 18. The Plan Proponents, Reorganized ICH, and the Trust shall have the right, to the full extent permitted by Section 1142 of the Bankruptcy Code, to apply to this Court for an order, notwithstanding any otherwise applicable nonbankruptcy law, directing any appropriate entity to execute and deliver any instrument or perform any act necessary to implement the Joint Plan, as required thereunder or under the provisions of this Order. 19. Pursuant to Sections 1141(a) and (d) of the Bankruptcy Code, the provisions of the Joint Plan shall (i) bind all Claimants and Interests Holders, whether or not they voted to accept the Joint Plan, and (ii) discharge the Debtors, jointly and severally, from all claims that arose before the Petition Date, and from any liability, including, without limitation, any liability of a kind specified in Sections 502(h) or 502(i) of the Bankruptcy Code, that arose, or has been asserted against, the Debtors, jointly or severally, at any time before the entry of the Confirmation Order or that arises from any pre-Confirmation conduct of the Debtors, jointly or severally, whether or not the Claim is known or knowable. In addition, the distributions provided for under this Joint Plan shall be in exchange for and in complete satisfaction, discharge, and release of all Claims against and Interests in the Debtors or any of their assets or properties, including any Claim or Interest accruing after the Petition Date and prior to the Effective Date. Without limiting the generality of the foregoing, Confirmation discharges all Unsecured Claims, all Claims, ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 10 if any, relating to ICH's 1986 retirement of its Class B preferred stock, and all Claims or Interests relating to the escheat of Securities or funds attributable to Securities of ICH. On and after the Effective Date, all holders of Claims or Interests shall be precluded from asserting any Claim or Interest against the Trust or Reorganized ICH or their assets or properties based on any transaction or other activity of any kind that occurred prior to the Confirmation Date except as provided in the Joint Plan. 20. Confirmation of the Joint Plan shall result in the issuance of a permanent injunction against the: (i) commencement or continuation of any judicial, administrative, or other action or proceeding against the Debtors, the Trust, or Reorganized ICH on account of Claims against or Interests in the Debtors, or on account of claims released pursuant to Articles 10.3 and 10.4 of the Joint Plan against the Released Entities or Released Officers; (ii) enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree, or order against the Debtors, the Trust or Reorganized ICH on account of or arising from pre-Confirmation conduct of the Debtors; or (iii) creation, perfection or enforcement of any encumbrance of any kind against the Debtors, the Trust, or Reorganized ICH, or their respective assets, arising from a Claim against or Interest in the Debtors. 21. The compromise, settlement or release by the Debtors of claims, if any, against the Released Entities, the Released Officers or the Shaw Group does not operate as a release of the claims, if any, held individually and non-derivatively by third parties against such Entities or any other non-Debtor third party; and the rights of any non-Debtor third party to pursue his, her, or its individual, non-derivative claims, if any, against non-Debtor third parties shall not be precluded or impaired by this Order. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 11 22. As provided in Article 10.2(a) of the Joint Plan and subject to Paragraph 14 of this Order and Article 7.5 of the Joint Plan, Reorganized ICH is the successor and designated representative of the Debtors and their Estates appointed for the purpose of retention and enforcement of the Retained Causes of Action. As provided in Article 10.2(a) of the Joint Plan, the Trust is the appointed successor and designated representative of the Debtors and their Estates appointed for the purpose of retention and enforcement of claims specifically relating to or arising from Trust Assets, including but not limited to all claims related to collection of the Sayyah Obligation and the Conseco Partnership Interest, but specifically excluding all claims related to any asset which has been fully and finally converted into cash which has been transferred to the Trust as the Effective Date. 23. Notwithstanding the foregoing, but only to the extent set forth in the Joint Plan, the Trust shall be entitled to assert as an offset, objection, or defense with respect to any Claim filed or asserted against the Estates, or against the Trust as successor to the Estates, any Retained Cause of Action retained by Reorganized ICH under this Joint Plan, provided however, that the obligations of Reorganized ICH set forth in Article 10.2(b) of the Joint Plan shall not apply to any such Retained Cause of Action so asserted by the Trust. This provision shall be deemed to be an assignment of such Retained Cause of Action to the Trust solely for the limited purpose, and only to the extent necessary, to permit the Trust to fully assert such offset, objection or defense. As provided in the Joint Plan, any recovery obtained through such assertion of a Retained Cause of Action by the Trust in excess of the amount of the claim asserted against the Estates or the Trust, as the case may be, shall be the property of Reorganized ICH. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 12 24. Consistent with the Joint Plan, Reorganized ICH or the Trust, as applicable, shall be the only parties authorized to pursue the Retained Causes of Action and any other claims or causes of action of the Debtors, and shall have the sole right to waive or assert any attorney-client or other privilege of the Debtors; and no other party shall have the right or obligation to pursue any such actions or to waive, raise, or assert any claim or privilege related thereto. Notwithstanding any applicable statutes of limitation, Reorganized ICH and the Trust, as applicable, shall have the right to prosecute any claim or cause of action, including the Retained Causes of Action within the time periods provided for the prosecution of such actions by the Debtors, as set forth in Section 546(a) of the Bankruptcy Code. 25. The "Judgment Reduction and Hold Harmless" provision set forth at Article 10.2(b) of the Joint Plan is authorized and approved. 26. At the Confirmation Hearing, the Plan Proponents tendered to the Court a letter agreement among the Debtors, the Equity Committee, and the Shaw Group which constitutes the Second Nonmaterial Modification of the Joint Plan of Reorganization which was agreed and consented to by the Creditors Committee, and which provides as follows: (a) The provisions of Article 10.4 of the Joint Plan respecting the Released Officers shall remain in full force and effect with respect to W. Hubert Mathis, Steven R. Cartwright, Robert J. Bruce, and H. Don Rutherford, and the Shaw Group agrees to the releases of those officers as part of the Confirmation of the Joint Plan. (b) With respect to John T. Hull, Robert C. Greving, and Daniel B. Gail, the releases contemplated by Article 10.4 of the Joint Plan shall not ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 13 be executed and delivered on the basis of this Order, but rather shall be the subject of a separate, prompt hearing for compromise of controversies under and in accordance with the procedures and standards of Bankruptcy Rule 9019 and law applicable in the Fifth Circuit. (c) The compromise hearing shall be held on an expedited basis on February 20, 1997, at 9:00 A.M. Pending such compromise hearing, each of Messrs. Hull, Greving and Gail shall make themselves available for up to four hours each of deposition examination to be conducted by the Shaw Group. Robert T. Shaw shall make himself available to the Plan Proponents for up to four hours of deposition examination in advance of the compromise hearing. The four (4) hours in each deposition shall be allocated to direct examination only. Cross-examination (if any) and objections or statements by counsel shall not reduce the four hours. If, for any reason, the Court, at such compromise hearing, does not approve the contemplated release of any of Messrs. Hull, Greving or Gail, the maximum financial risk or exposure any of them shall ever have (regardless of any greater liability established) for claims that otherwise (in accordance with Article 10.4 of the Plan) would have been released under the Plan, shall be $100,000. (d) Any and all additional proposed releases which the Equity Committee or the Reorganized Debtor proposes to deliver with respect to pre-petition acts shall be subject to determination by the Bankruptcy Court ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 14 and the Rule 9019 procedures and standards in the event the Shaw Group objects to any such proposed releases. (e) The Shaw Group, including Robert T. Shaw individually, shall promptly reimburse each of Messrs. Hull, Greving and Gail up to $5,000 for legal expense actually incurred by each of them beginning this date and continuing through the compromise hearing in connection with the compromise hearing and their preparation therefor. (f) The Shaw Group shall deposit into escrow, 48 hours prior to the Effective Date, the documents and funds required under Article 6.2 of the Plan. The Plan Proponents shall similarly deposit the release of the Shaw Group into escrow 48 hours prior to the Effective Date. The release of the Shaw Group shall be executed by the Plan Proponents in the following form: a general release as that term is used and commonly understood at law in favor of the Shaw Group and thereby release all claims that the Debtors, the Equity Committee, the Creditors Committee, or any of them or their affiliates ever had, now have, or may claim to have or hereafter have, or which the Debtors, the Equity Committee, the Creditors Committee or any of them or their affiliates could have asserted or could assert on their own behalf, or derivatively on behalf of the Debtors prior to or related to this bankruptcy, including without limitation all claims, counterclaims, demands, controversies, costs, contracts, debts, sums of money, accounts, reckonings, bonds, bills, damages, obligations, liabilities, objections, actions and causes of action, expenses, attorneys' fees of any character, nature, type or description, whether in law or in equity, in contract, tort, or otherwise, known or unknown, suspected or unsuspected, including claims for negligence, gross negligence, fraud, intentional, misconduct or otherwise. The releases to be executed shall bind the Debtors, the Equity Committee, the Creditors Committee, and each of them, and each of their affiliates, and ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 15 their respective successors, assigns, or representatives, including, but not limited to, the revested/reorganized Debtors, and each of them, and any representative of any bankruptcy or other estate for such Debtors or such revested/reorganized Debtors. This release shall not apply to the Shaw Group's obligations under the Joint Plan or for acts occurring after the Effective Date of the Joint Plan. (g) Releases given to the Trust, the Trustee, the Creditors Committee, the Equity Committee, and their respective present and former officers, directors, members, employees, agents and attorneys pursuant to Article 10.3 of the Joint Plan (exclusive of the Shaw Group) shall be time limited to the post-petition activities of such Released Entities related to the Case. (h) All objections to confirmation of the Joint Plan, or other pleadings in any manner opposed to, or seeking the continuance of, the Court's consideration of Confirmation are withdrawn by the Shaw Group with prejudice, and the Shaw Group fully supports the entry by the Court of this Order and shall abide by and timely comply with the terms and provisions of the Joint Plan, including Article 6.2 of the Joint Plan. 27. Except as modified by Paragraph 26 above, the Joint Plan resolves all disputes between the Debtors and the Released Entities, as provided in Article 10.3 of the Joint Plan, with respect to all claims that the Debtors ever had, now have, or may claim to have or hereafter have, or which the Debtors could have asserted or could assert, jointly or severally, including without limitation claims held in their corporate capacity and claims that third parties may assert derivatively on behalf of the Debtors absent bankruptcy. Confirmation of the Joint Plan releases each Released Entity from ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 16 all such claims, counterclaims, demands, controversies, costs, contracts, debts, sums of money, accounts, reckonings, bonds, bills, damages, obligations, liabilities, objections, actions and causes of action of any nature, type or description, arising prior to the Confirmation Date, whether in law or in equity, in contract, tort, or otherwise, known or unknown, suspected or unsuspected, including claims for negligence, gross negligence, or otherwise. On the Effective Date, the Debtors shall be authorized to execute general releases in favor of the Released Entities consistent with the Joint Plan. 28. Except as modified by Paragraph 26 above, on the Effective date, the Debtors shall execute releases of the Released Officers consistent with the Joint Plan. 29. Any claim or cause of action may be settled by Reorganized ICH or the Trust, as applicable, pursuant to Article 11.10 of the Joint Plan without the necessity of Court approval under Bankruptcy Rule 9019 or otherwise. To the extent the Trust is entitled to assert a Retained Cause of Action pursuant to the Joint Plan, the Trust may compromise, settle or release any such Retained Cause of Action with the consent of Reorganized ICH. Nothing herein shall prohibit Reorganized ICH or the Trust from seeking Bankruptcy Court approval of the compromise, settlement or release of any claim. 30. As of the Effective Date, in accordance with Section 1141(d)(1) of the Bankruptcy Code: (i) all the outstanding shares of common stock, $1.00 par value per share of ICH (the "Common Stock"), all outstanding shares of $1.75 Convertible Exchangeable Preferred Stock, Series 1986-A, $25.00 stated value, issued by ICH (the "Preferred Stock"), and all rights of the Interest holders therein, (ii) all outstanding 11 1/4% Senior Subordinated Notes due 1996 and outstanding 11 1/4% Senior Subordinated Notes due 2003 issued by ICH (the "Notes" and, together with the Common Stock and the ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 17 Preferred Stock, the "Securities") and, (iii) the indentures, debentures or statements of resolution and other agreements heretofore binding upon the Debtors or their assets with respect to the Securities shall be deemed to be terminated, cancelled, extinguished, void, and of no further force or effect in accordance with the Joint Plan without any action by the holders of such Securities, and no consideration shall be paid or delivered with respect thereto except as otherwise provided in the Joint Plan. Notwithstanding the foregoing, the distribution provisions of the Indentures shall be followed by the Trust in order to facilitate distribution to record holders of the Notes to the extent not inconsistent with the provisions of the Joint Plan, the Trust Agreement, and this Order. 31. Subject to Paragraph 33 below, the Effective Date shall be the date for determining the Entities holding Securities who are entitled to receive distributions pursuant to the Joint Plan. As of the close of business on the Effective Date, the transfer ledgers in respect of the Securities shall be closed, and no transfer of the Securities occurring after the Effective Date shall be recognized. Reorganized ICH, the Trust, the Transfer Agent, the Distribution Agent, the Indenture Trustee and their respective agents shall be entitled instead to recognize and deal for purposes herein with only those holders of record stated on the respective transfer ledgers for the Securities as of the close of business on the Effective Date. 32. Subject to Paragraph 33 below, distributions and deliveries called for by the Joint Plan, other than distributions with respect to non-classified Claims, shall be proper if made (i) to the holders of Allowed Claims in ICH Classes 1, 2, 3, 4 and 5 (except as provided in clause (ii) below), ICH Classes 6 and 7 (to the extent, if any, of Securities- Related Claims within those Classes), SWL Holding Classes 1 and 2, and Care Classes ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 18 1 and 2, at the addresses set forth on the proofs of claim Filed by such holders (or at the last known addresses or such holders if no proof of claim is Filed or if the Debtors have been notified of a change of address), (ii) to Record Holders of Notes as of the record date for any particular distribution, on account of their ICH Class 5 Claims, at the addresses contained in the records of the Indenture Trustee as of the Effective Date and (iii) to the Record Holders of Preferred Stock and Common Stock, as of the record date for any particular distribution, at the addresses contained in the records of the appropriate Transfer Agent as of the Effective Date. The record date for purposes of determining the Entities holding the Securities and other Claims that are entitled to receive initial distributions under the Joint Plan shall be the Effective Date. 33. No distribution shall be mailed to any holder of an Allowed Claim or Allowed Interest if any mailing to such holder's last known address has been returned as undeliverable, unless and until the Debtors or the Distribution Agent (as such term is defined in the Joint Plan) are notified of such holder's then-current address, at which time all distributions then due shall be made to such holder without interest. All claims for undeliverable distributions shall be made on or before the later of (a) two years after the Effective Date or (b) 120 calendar days after an order of the Bankruptcy Court allowing such holder's Claim or Interest becomes a Final Order, after which period the Claim or Interest of any holder with respect to such undeliverable distribution shall be deemed abandoned, discharged, and forever barred as of the second anniversary of the Effective Date. Notwithstanding the above, if any beneficial interest in the Trust ("Trust Interest") is transferred after the initial issuance of certificates by the Trust representing Trust Interests, distributions to be made with respect to any such Trust Interest shall be made ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 19 to the record holder of such Trust Interest on the applicable record date determined in accordance with the Trust Agreement. Notwithstanding anything herein to the contrary, no Trust Interest shall be transferable prior to receipt of appropriate advice from the Securities and Exchange Commission (the "SEC") which satisfies the Trustees of the Trust as to the transferability of Trust Interests on terms that are reasonable and economical as determined by the Trustees. 34. Any holder of an Allowed Claim or Allowed Interest arising on account of outstanding Securities who has not surrendered such holder's Securities as set forth in Article 9.1(d) of the Joint Plan within two (2) years after the Effective Date shall forfeit, to the extent permitted by law, such holder's right to receive any distribution under the Joint Plan with respect to such Allowed Claim or Allowed Interest, provided that this provision shall not apply to Securities-Related Claims. 35. The Trust shall be governed by the terms, conditions, and rules substantially as set forth in the form of trust agreement filed with the Court on January 24, 1997 (the "Trust Agreement"), and the Trust Agreement, together with changes thereto as may be consistent with this Order and the Joint Plan, is approved. Susan A. Brown is approved as the Managing Trustee and John A. Tobin, Jeffrey Schultz, and Gregory Lathrop are approved as Supervising Trustees of the Trust. The Trust is authorized to enter into such employment agreement with Susan A. Brown as the Managing Trustees may approve, which agreement may be on substantially the same terms as her existing Employment Agreement. 36. The Restated Certificate of Incorporation and the By-Laws of Reorganized ICH are approved. Reorganized ICH is authorized to appoint an initial Board of Directors ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 20 consisting of between four (4) and nine (9) members. The following persons are hereby approved as the initial board of directors to commence on the Effective Date: James R. Arabia Michael D. Dunn Kenneth T. Giddens Carl D. Robinson James R. Arabia is approved as President and Chief Executive Officer of Reorganized ICH upon the terms and conditions provided for in the Joint Plan and set forth in the Disclosure Statement. 37. All Securities held in treasury by ICH immediately before the Effective Date shall be cancelled and extinguished as of the Effective Date without any action on the part of ICH and no payment or distribution shall be made with respect thereto. 38. The Distribution Agent is authorized to make distributions of Reorganized ICH Common Stock and cash as required in the Joint Plan to be distributed to holders of Allowed ICH Class 6 and 7 Interests. The Managing Trustee or such agent as the Managing Trustee may employ in her sole discretion shall be authorized to make all other distributions of cash as are required to be made under the Joint Plan; provided that distributions to be made to Record Holders of the Notes as of the Effective Date may be made by the Managing Trustee, such other agent as the Managing Trustee may employ in her sole discretion, the Distribution Agent, or the Indenture Trustee. 39. No payment or distributions shall be required to be made with respect to all or any portion of a Contested Claim or Contested Interest unless and until such Claim or Interest becomes an Allowed Claim or Allowed Interest as determined by Final Order. 40. Following the Effective Date, the Trust shall withhold from the property to be distributed under the Joint Plan, and shall reserve, an amount sufficient to be ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 21 distributed on account of Contested Claims as of the Initial Distribution Date (the Reserved Distribution Amount"). As to any Contested Claim, upon a request for estimation by the party in interest, the Bankruptcy Court shall determine what amount is sufficient to withhold as the Reserved Distribution Amount. In the event that no party in interest elects to request such an estimation from the Bankruptcy Court with respect to a Contested Claim, the Debtors or, after the Effective Date, the Managing Trustee shall withhold as the Reserved Distribution Amount the amount which, in the discretion of the Managing Trustee, such Claimant would have received under the Joint Plan, if any, if the proof of claim Filed by or on behalf of the Claimant were Allowed. Reorganized ICH shall reserve sufficient authorized but unissued shares of Reorganized ICH Common Stock to allow for distributions to holders of Allowed Securities-Related Claims, if any, related to the Common Stock or Preferred Stock. 41. Payments and distributions to each holder of a Contested Claim or Contested Interest, to the extent that it ultimately becomes an Allowed Claim or Allowed Interest, shall be made in accordance with the provisions of the Joint Plan governing the respective Class of Claims or Interests of which such Contested Claim or Contested Interest belongs. As soon as practicable after the date that the order or judgment of the Bankruptcy Court allowing such Claim or Interest becomes a Final Order, any Reserved Distribution Amount that would have been distributed to the holder of such Claim or Interest had such Claim or Interest been an Allowed Claim or Allowed Interest on the Effective Date, to the extent of the Allowed Amount of such Claim or Interest, shall be distributed to the holder of such Claim or Interest. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 22 42. Any asset and property to be distributed by the Trust under the Joint Plan which remains unclaimed or otherwise not deliverable to the person entitled thereto on the later of (a) two years after the Effective Date or (b) 120 calendar days after an Order allowing such person's Claim or Interest becomes a Final Order, shall become vested in, and shall be transferred and delivered to the Trust for distribution pursuant to the Joint Plan. In such event, such person's Claim or Interest shall no longer be deemed to be Allowed and such person shall be deemed to have no further Claim or Interest in respect of such distribution and shall not participate in any further distributions under the Joint Plan. 43. Until such time as a contingent Claim or unliquidated Claim becomes fixed and Allowed, such Claim shall be treated as a Contested Claim for purposes relating to voting, allowance, and distributions under the Joint Plan. The Bankruptcy Court upon request by the Debtors or, after the Effective Date, by the Trust or Reorganized ICH, shall in a summary proceeding on each such contingent Claim or unliquidated Claim, by estimation determine the allowability of each such contingent or unliquidated Claim. 44. Payment to be made by the Trust pursuant to the Joint Plan shall be made by check drawn on a domestic bank or by wire transfer from a domestic bank. 45. The Trust is authorized to disregard, and shall not make distributions in respect of, Allowed Claims whose Pro Rata share of the proposed distribution would be less than $5.00. In such case, the Allowed Amount of such Claims for purposes of such distribution shall be reduced to zero. 46. Reorganized ICH is authorized to make distributions of Reorganized ICH Common Stock in whole share amounts only, and no fractional shares of Reorganized ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 23 ICH Common Stock shall be distributed pursuant to the Joint Plan. Fractional shares of Reorganized ICH Common Stock to which any Beneficial or Record Holder of Preferred Stock or Common Stock as of the Effective Date may be entitled shall be rounded to the nearest whole share. Beneficial holders of fewer than 14 shares of Preferred Stock and Beneficial holders of fewer than 101 shares of Common Stock shall not be entitled to any distribution of Reorganized ICH Common Stock on account of their respective Interests, and in each such case, the Allowed Amount of such Interests for purposes of such distribution shall be reduced to zero. 47. Notwithstanding the provisions of Article IV of the Joint Plan; (a) Allowed Claims, if any, of a particular class that are subordinated to other Allowed Claims of such class pursuant to Section 510 of the Bankruptcy Code shall be paid only after payment in full of all such non-subordinated Claims of such class; and (b) Allowed Class 6 Interests, if any, that are subordinated to other Allowed Class 6 Interests, pursuant to Section 510 of the Bankruptcy Code shall not be entitled to receive any distributions until after the distribution to holders of Allowed non-subordinated Class 6 Interests equals the full amount of their liquidation preference of $25.00 per share of Preferred Stock. 48. For purposes of calculating the distribution of Reorganized ICH Common Stock to holders of Allowed Securities-Related Claims based on Common Stock, if any, pursuant to the provisions of Article IV of the Joint Plan, holders of Allowed Securities- Related Claims, if any, based on Common Stock shall be entitled to receive their Pro Rata portion of shares of Reorganized ICH Common Stock in an amount equal to: (i) the total amount of all Allowed Securities-Related Claims within ICH Class 7, divided by (ii) $254 million, multiplied by (iii) 1,309,524, multiplied by (iv) a fraction, the numerator of ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 24 which is the Allowed Amount of such holder's Allowed Securities-Related Claim within ICH Class 7, and the denominator of which is the total amount of all Allowed Securities- Related Claims within ICH Class 7. 49. Pursuant to Section 1142(b) of the Bankruptcy Code and as a condition precedent to a holder of an Allowed Claim or Interest in ICH Class 5, ICH Class 6 or ICH Class 7 receiving a distribution under the Joint Plan on account of Securities, such holder of the Securities must deliver to the Distribution Agent or to the Managing Trustee or her agent, as applicable, the Securities giving rise to such holder's Allowed Claim or Interests, or such evidence or other documents regarding ownership of such Securities as the Distribution Agent or the Managing Trustee may require, together with the Letter of Transmittal, properly completed and executed by such holder of the Securities, and any documents required by the Letter of Transmittal, on or before the second (2nd) anniversary of the Effective Date. 50. Each professional person whose retention with respect to the Debtors' cases has been approved by the Bankruptcy Court and who holds, or asserts, an Administrative Claim under Section 330(b)(2)-(5) of the Bankruptcy Code (a "Fee Claim") shall be required to file with the Bankruptcy Court a final fee application within sixty days after the Effective Date and to serve notice thereof on all parties entitled to such notice pursuant to the Order Establishing Interim Procedures and Guidelines for Compensation of Professional Persons. The failure to timely file the fee application as required under Article 2.1(b) of the Joint Plan shall result in the Fee Claim being forever barred and discharged. A Fee Claim, with respect to which a fee application has been properly Filed pursuant to the Joint Plan, shall become an Administrative Claim only to the extent ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 25 allowed by Final Order. Not later than five days prior to the Effective Date, each such professional person shall serve an estimate of such final Fee Claim on all parties entitled to such notice pursuant to the Order Establishing Interim Procedures and Guidelines for Compensation of Professional Persons. The estimated amounts of such Fee Claims shall on the Effective Date be reserved by the Trust for payment of such Fee Claims and shall not be treated as Available Cash under the Trust. All Fee Claims shall be paid promptly by the Trust after such amounts are allowed by Final Order of the Bankruptcy Court. 51. All amounts due and owing to Susan A. Brown and Rodney D. Moore pursuant to their respective Employment Agreements entered into with ICH as of January 1, 1996, shall be paid in cash in full by the Trust on the Initial Distribution Date. Any additional amounts that become payable under such Employment Agreements shall be paid in cash in full by the Trust as and when due thereunder without further order or approval of the Bankruptcy Court. 52. Any other person or Entity who claims to hold any other Administrative Claim shall be required to file with the Court an application within sixty days after the Effective Date and to serve notice thereof on all parties entitled to such notice. The failure to file timely the application as required under the Joint Plan shall result in the Claim being forever barred and discharged. An Administrative Claim with respect to which an application has been properly Filed pursuant to the Joint Plan, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order. 53. The Joint Plan provides for the continuation of retiree benefits, as the term is defined under Section 1114 of the Bankruptcy Code, as obligations of the Trust. The Trust is authorized to exercise the Debtors' rights under the applicable retiree benefit ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 26 documents, including the modification of such benefits in accordance with such plan documents and the payment of sums to a third party for the provision of such benefits to retirees henceforth. In addition, the Debtors are authorized to take such action as may be necessary or appropriate to terminate all existing employee benefit plans, other than the retiree benefit plan, on or before the Effective Date. 54. Any obligations of the Debtors, pursuant to the Order Regarding Indemnification of Officers and Directors of Debtors entered February 14, 1996, shall not be discharged or impaired by Confirmation or Consummation of the Joint Plan; accordingly, such indemnification obligations shall survive unaffected by the reorganization contemplated by the Joint Plan and shall be performed and honored by the Trust regardless of the Confirmation of the Joint Plan, provided however, that such obligations shall not be obligations of Reorganized ICH. The balance of the $500,000 fund provided for in such order (the "Indemnification Fund") shall be transferred to the Trust and utilized as provided in such Order. All other obligations of the Debtors with respect to indemnifications of officers and directors, or agents, representatives, successors or assigns thereof, shall be treated as executory contracts rejected under Article 8.1 of the Joint Plan, and all Claims arising from or related thereto shall be treated and classified as provided by Article 8.2 of the Joint Plan, subject to any and all defenses thereto and to subordination of such Claims under applicable provisions of the Bankruptcy Code. The withdrawal of the Proofs of Claim of C. Fred Rice shall not affect the survival of any claim by him for indemnity by ICH as treated under Article 10.7 of the Joint Plan. 55. The Consolidated Tax Allocation Agreement (the "Tax Agreement") to which the Debtors are parties shall be rejected on the Effective Date, and any claims existing ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 27 under such agreement between and among the Debtors and BML, ICH Funding Corporation, and REO Holding Corporation shall be deemed to be zero. Each of the Debtors are authorized to execute and deliver to Modern American Life Insurance Company ("Modern") and Western Pioneer Life Insurance Company ("Western") such instruments and documents as may be necessary or appropriate to release Modern and Western from any further liability with respect to taxes (including under or pursuant to the Tax Agreement to which Debtors are, and Modern and Western formerly were, a party) as contemplated by, and in satisfaction of BML's and the Debtors' obligations under, Section 5.17 of the Modern/Western Agreement and Section 10 of the Closing Statement and Amendment to Purchase Agreement dated June 28, 1996, between BML and Reassure America Life Insurance Company. Each of the Debtors are authorized to execute and deliver to Philadelphia American Life Insurance Company ("Philadelphia American ") such instruments and documents as may be necessary or appropriate to release Philadelphia American from any further liability with respect to taxes (including under or pursuant to the Tax Agreement to which Debtors are, and Philadelphia American formerly was, a party) as contemplated by, and in satisfaction of BML's and the Debtors' obligations under, Section 5.18 of the Philadelphia American Agreement and Section 9 of the Closing Statement and Agreement dated June 28, 1996, between BML and New Era Enterprises, Inc. 56. Any other executory contract or an unexpired lease not expressly assumed, as provided in Section 365(a) of the Bankruptcy Code on or before the Confirmation Date, is deemed rejected. Without limiting the foregoing, the Independent Contractor and Service Agreement dated February 11, 1994, between ICH Corporation and Robert T. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 28 Shaw and the Independent Contractor and Service Agreement dated February 11, 1994 between ICH Corporation and C. Fred Rice have been previously terminated, and all claims pursuant to such agreements will be withdrawn with prejudice and released pursuant to Section 6.2(b) of the Joint Plan. Any Claims made on account of executory contracts or unexpired leases that are deemed rejected pursuant to the Joint Plan must be filed with the Bankruptcy Court within 30 days after the Confirmation Date or such Claim shall be forever barred and discharged. 57. The Joint Plan and its classification scheme contains certain compromises of various potential claims, rights and causes of action, including the Settlement with the Shaw Group, the release of the Released Entities, and the release of the Released Officers. All such compromises embodied in the Joint Plan and the classification scheme set forth in the Joint Plan are reasonable, have been consented to and accepted by virtue of the acceptance of the Joint Plan by the requisite members of each impaired Class of Claims and Interests, and are approved by the Court. 58. On the Effective Date, the Shaw Group shall (i) pay $500,000 in cash to Reorganized ICH and (ii) withdraw the claims that the Shaw Group and the members thereof filed with prejudice to refiling such claims in the Case. 59. Notwithstanding any provisions of the CFSB Interest to the contrary, the CFSB Interest shall not be subject to any transferability or ownership restrictions, save and except those conditions set forth in Article 6.2(c) of the Joint Plan. The Shaw Group and the Trust shall immediately perform all of their respective obligations set forth in Article 6.2(c) of the Joint Plan and Paragraph 26 of this Order regarding the CFSB Interest. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 29 60. Notwithstanding a contrary interpretation of the provisions of Article III and Article IV of the Joint Plan with respect to the ICH Class 2 and ICH Class 5 Claims, if any, of Sayyah, the following shall apply: (a) Objection. Any objection counterclaim or action for affirmative recovery related to Sayyah's Claims shall be brought, if at all, not later than thirty (30) days following the Effective Date. In the event no objection to Sayyah's proof of claim is filed within that time, then the ICH Class 2 Secured Claim of Sayyah shall be deemed allowed and satisfied by setoff as of the Petition Date and the unsecured ICH Class 5 Claim of Sayyah for the deficiency shall be deemed an Allowed Claim in ICH Class 5. (b) Treatment of ICH Class 2 Claim of Sayyah. Upon an objection, the Court will determine the amount and timing of the offset or recoupment to which Sayyah is entitled. The Debtor, the Creditors' Committee and, upon its formation, the Trust, agree that the date of any offset or recoupment applied shall be deemed to occur no later than the earlier of (i) February 15, 1997, or (ii) the Effective Date. (c) Treatment of ICH Class 5 Claim of Sayyah. The remainder of the Claim of Sayyah not treated as an ICH Class 2 Claim shall be treated as an Unsecured Claim in ICH Class 5 in the amount set forth in Sayyah's proof of claim and ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 30 calculated as set forth above, or in the amount, if any, as may be determined by the Court upon timely objection. (d) Claims Reserve. The Trust shall reserve the amount of $3.3 million with respect to the ICH Class 5 Claim of Sayyah under the provisions of the Joint Plan. This amount shall not be determined as a limit to the amount, if any, of an allowed ICH Class 5 claim of Sayyah. 61. On the Initial Distribution Date, the Creditors Committee and the Equity Committee shall cease to exist and have no further status as parties in interest except for purposes of prosecuting any applications for Fee Claims, participating in any appeal of the Confirmation Order, and participating in the proceedings on the Bankruptcy Rule 9019 motion referred to in Paragraph 26 above, in which events such committees shall cease to exist immediately after the resolution of such matters. Following the termination of the Committees, any professional that was employed by the Creditors Committee may be employed by the Trust and any professional that was employed by the Equity Committee may be employed by Reorganized ICH. The Trust may adopt and succeed to any unresolved pleading filed by the Creditors Committee during the Chapter 11 Case; Reorganized ICH may adopt and succeed to any unresolved pleading filed by the Equity Committee during the Chapter 11 Case; and the Trust or Reorganized ICH may adopt and succeed to any unresolved pleading filed by the Debtors during the Chapter 11 Case. 62. The Trust Interests, Trust Certificates, and Reorganized ICH Common Stock (collectively, the "Plan Securities") offered, sold and/or issued pursuant to the Joint Plan are deemed to have been offered, sold and/or issued pursuant to Section 1145 of the ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 31 Bankruptcy Code. Pursuant to Section 1145 of the Bankruptcy Code, the exemption of the offer and sale of securities from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), and any state or local law requiring registration for the offer or sale of a security, applies with respect to: the Plan Securities distributed pursuant to the Joint Plan and any other interests that may be deemed to be securities offered, sold, issued, or distributed pursuant to the Joint Plan and to the transactions contemplated thereunder. Without limiting the generality of the foregoing: (i) the offer, sale and issuance of the Trust Interests or Trust Certificates (to the extent such interests and/or certificates constitute securities under the Securities Act), and the distribution by the Trust of the Trust Interests or Trust Certificates (to the extent such interests and/or certificates constitute securities under the Securities Act), to Claimants pursuant to the Joint Plan are exempt from the requirements of Section 5 of the Securities Act and all securities laws of all applicable governmental units pursuant to Section 1145(a)(1) of the Bankruptcy Code; (ii) the offer, sale and issuance by Reorganized ICH of the Reorganized ICH Common Stock, and the distribution by Reorganized ICH and of Reorganized ICH Common Stock, pursuant to the Joint Plan are exempt from the requirements of Section 5 of the Securities Act and all securities laws of all applicable governmental units pursuant to Section 1145(a)(1) of the Bankruptcy Code; and (iii) all of the Plan Securities distributed pursuant to the Joint Plan and any other securities that may be deemed to be distributed pursuant to the Joint Plan shall be subject to the provisions of Section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in Section 2(11) of the Securities Act, and to compliance with rules and regulations of the ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 32 Securities and Exchange Commission (the "SEC"), if any, applicable at the time of any future transfer of such securities. 63. As established in Paragraph 33 above, the record date for purposes of determining the Entities holding the Securities and other Claims that are entitled to receive initial distributions under the Joint Plan shall be the Effective Date. Pursuant to Bankruptcy Rules 1007(i) and 3020(d), and Section 1142(b) of the Bankruptcy Code, (i) Bank of Louisville and Trust Company, the indenture trustee for the Notes and the transfer agent for the Common Stock, or KeyCorp Shareholders Services, Inc. (collectively the "Transfer Agents"), are hereby directed to disclose to the Debtors, the Trust, Reorganized ICH, and the Trust Depository Institutions (the "Depositories") and such other transfer agents, street name holders and all other bank, broker and agent nominees listed as record holders of the Securities ("Other Record Holders") for which they act as trustee or transfer agent and to the extent available, within ten (10) calendar days after the Effective Date, the name, address, and taxpayer identification or social security number of each such beneficial owner, and the amount and type of the Securities, identified by CUSIP (if available) or other identification number, owned by each such beneficial owner on whose behalf they hold record title to the Securities, using the Effective Date as the record date; (ii) the Depositories are hereby directed to disclose to the Debtors, the Trust and Reorganized ICH the lists of such transfer agents, street name holders and all other bank, broker and agent nominees in whose name the Securities are registered with the Depositories ("Depository Record Holders") and, to the extent available, within twenty (20) calendar days after the Effective Date, the name, address, and taxpayer identification or social security number of each such beneficial owner; and ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 33 the amount and type of the Securities, identified by CUSIP (if available) or other identification number, owned by each such beneficial owner on whose behalf they hold record title to Securities, using the Effective Date as the record date; (iii) the Other Record Holders, the Depository Record Holders and all other transfer agents, street name holders and other bank, broker or agent nominee record holders of the Securities that hold record title on behalf of beneficial owners of the Securities are hereby directed to provide to the Debtors, the Trust and Reorganized ICH, within thirty (30) calendar days after the Effective Date, the name, address, and taxpayer identification or social security number of each such beneficial owner; and the amount and type of the Securities, identified by CUSIP (if available) or other identification number, owned by each such beneficial owner on whose behalf they hold record title to Securities, using the Effective Date as the record date. The directions contained above shall apply and be effective notwithstanding the provisions of Rule 14b-1 and Rule 14b-2 promulgated under the Securities Exchange Act of 1934, as amended. 64. The issuance, transfer or exchange of the Plan Securities to be issued under the Joint Plan, and the recognition, continuation, or creation of liens on assets or property of the Debtors, Reorganized ICH or the Trust, or the transfer of any asset or property, pursuant to the Joint Plan, or the making, delivery or recordation of any instrument of transfer under the Joint Plan, shall not be taxed under any law imposing a stamp tax, transfer tax or other similar tax or fee. All filing and recordation officers or authorities responsible for the assessment or collection of any such tax or fee may rely on the terms of this Order for all such purposes. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 34 65. In the event the Chapter 11 Cases (or any of them) shall be inadvertently deemed closed or fully administered before the substantial consummation of the Joint Plan, then such Chapter 11 Case(s) may be reopened pursuant to Section 350(b) of the Bankruptcy Code and Rule 5010 of the Bankruptcy Rules for cause. 66. The Debtors shall promptly serve notice of the entry of this Order, together with notice of the last day for filing administrative expense claims, claims arising from the rejection of executory contracts, and applications for allowances of compensation and/or reimbursement of expenses, pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c) and the terms of the Joint Plan. Such notice shall be given by U.S. Mail and by publication in The Dallas Morning News and The Wall Street Journal (national edition). 67. The Debtors shall mail a copy of this Order to all parties on the Master Service List. 68. This Order shall be, and hereby is, declared to be in recordable form and shall be accepted by any filing or recording officer or authority of any applicable Governmental Unit for filing and recording purposes without further or additional orders, certifications or other supporting documents. Further, the Court authorizes the Debtors to file a memorandum of this Order in any appropriate filing or recording office as evidence of the matters herein contained. 69. The Joint Plan has been proposed in good faith and not by any means forbidden by law. Section 1129(a)(3) of the Bankruptcy Code has been fully complied with. There was proper disclosure with respect to the Joint Plan, and there was proper solicitation of the Joint Plan. Sections 1125(d) and 1125(e) of the Bankruptcy Code have been fully complied with. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 35 70. The distribution of the Disclosure Statement and solicitation of acceptances of the Joint Plan from the Claimants and holders of Interests are exempt from federal proxy regulations pursuant to the express terms of Section 1125(e) of the Bankruptcy Code. 71. The reversal or modification of this Order on appeal shall not affect the validity of the Joint Plan or any other agreement, document, instrument or action authorized or directed by this Order or under the Joint Plan as to the Debtors, the Trust, any Trustee, Reorganized ICH, or any other Entity acting in good faith, whether or not that Entity knows of the appeal, unless this Order is stayed pending appeal. 72. All transactions consistent with the provisions of the Joint Plan effected by the Debtors during the period commencing on the Petition Date and ending on the Confirmation Date are ratified by the Court. 73. Objections to Claims or Interests, if any, shall be filed and served within 90 days after the Effective Date. Responses to the objections must be filed within 30 days of service thereof. 74. The Trust and Reorganized ICH shall obtain settings for hearings on all applications for the award of compensation or expenses and motions for administrative expenses, and, consistent with the notice requirements of Bankruptcy Rule 3007, to determine objections to claims. Within 45 days after the foregoing hearings, the Trust shall file a post-confirmation report. 75. The Trust and Reorganized ICH, after substantial consummation, as defined under 11 U.S.C. Section 1101(2), shall file an application for final decree and obtain a setting ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 36 on the application within 180 days of the Effective Date, and if the application for final decree is not filed within 180 days of the Effective Date, a status conference will be held. 76. The Bankruptcy Court shall retain exclusive jurisdiction over these Chapter 11 Cases after Confirmation, notwithstanding consummation or substantial consummation, for the following purposes: (a) to consider and effect any modification of this Joint Plan under Section 1127 of the Bankruptcy Code; (b) to hear and determine all controversies, suits and disputes that arise in connection with the interpretation or enforcement of this Joint Plan and the Trust Agreement; (c) to hear and determine all requests for compensation and/or reimbursement of expenses for the period commencing on the Petition Date through the Confirmation Date; (d) to hear and determine all objections to Claims and Interests, and to determine the appropriate classification of any Claim or Interests, and other controversies, suits and disputes that may be pending at or initiated after the Confirmation Date, except as provided herein; (e) to hear and determine all claims that the Debtors, as debtors in possession qua trustee, or Reorganized ICH or the Trust, as applicable, as the successors and designated representatives of the Debtors and the Estates could assert under the Bankruptcy Code; (f) to consider and act on such other matters consistent with this Joint Plan as provided in this Order; ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 37 (g) to make such orders as are necessary and appropriate to carry out and implement the provisions of the Joint Plan, including to effect the further assurances provided in Article 11.9; (h) to approve the reasonableness of any payments made or to be made, within the meaning of Section 1129(a)(4) of the Bankruptcy Code; (i) to exercise the jurisdiction granted pursuant to Section 505(a) and (b) of the Bankruptcy Code to determine any and all federal, state, Commonwealth, local and foreign tax liabilities of, and any and all refunds of such taxes paid by the Debtors; (j) to hear and determine any issues or matters in connection with any property not timely claimed as provided in the Joint Plan; (k) to hear and determine issues related to the Trust or administration of the Trust Assets; and (l) to hear and determine post-confirmation date motions to approve compromises and settlements pursuant to Bankruptcy Rule 9019. 77. Notwithstanding the foregoing, Reorganized ICH and the Trust shall retain the right to commence or prosecute any of their respective claims in any court of competent jurisdiction. 78. In the event and to the extent that any provision of this Order conflicts with any provision of the Joint Plan with respect to the Effective Date, the Sayyah Claim, or the Shaw Group settlement, the provisions of this Order shall control. ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 38 SIGNED this 7th day of February, 1997. /s/ Robert C. Mcguire --------------------- ROBERT C. McGUIRE CHIEF BANKRUPTCY JUDGE Submitted by: Daniel C. Stewart, SBT #19206500 Josiah M. Daniel, III, SBT #05358500 WINSTEAD SECHREST & MINICK P.C. 5400 Renaissance Tower 1201 Elm Street Dallas, Texas 75270-2199 Telephone: (214) 745-5400 Telecopy: (214) 745-5390 ATTORNEYS FOR THE DEBTORS Michael A. Rosenthal, SBT #17284490 I. Richard Levy, SBT #12265020 GIBSON, DUNN & CRUTCHER 1717 Main Street, Suite 5400 Dallas, Texas 75201 Telephone: (214) 698-3100 Telecopy: (214) 698-3400 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS Peter D. Wolfson John A. Bicks PRYOR, CASHMAN, SHERMAN & FLYNN 410 Park Avenue New York, NY 10022 Telephone (212) 421-4100 Telecopy: (212) 326-0814 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS ORDER CONFIRMING FIRST AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 Page 39 -----END PRIVACY-ENHANCED MESSAGE-----