Preview
Filed
3/8/2021 3:21 PM
Beverley McGrew Walker
District Clerk
Fort Bend County, Texas
Katherine Cavazos
Cause No. 20-DCV-273317
Jaws Sugar Land, LLC
In the District Court of
Plaintiff(s),
Vv.
Fort Bend County, Texas
24 Hour Fitness USA, Inc.
Defendant(s).
240" Judicial District
Notice of Bankruptcy Discharge
PLEASE TAKE NOTICE that on June 15, 2020, voluntary petitions under chapter
11 of title 11 of the United States Code (the “Bankruptcy Code”) were filed by 24 Hour Fitness
Worldwide, Inc. and its debtor affiliates (collectively, the “Reorganized Debtors”) in the United
States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Reorganized
Debtors’ chapter 11 cases are being jointly administered for procedural purposes only under Case
No. 20-11558 (KBO) (the “Bankruptcy Cases”).
PLEASE TAKE FURTHER NOTICE that on December 22, 2020, the Bankruptcy
Court entered the Order (I) Confirming First Amended Joint Chapter 11 Plan of Reorganization
of 24 Hour Fitness Worldwide, Inc. and Its Affiliated Debtors and (II) Granting Related Relief
[D.I. 1508] in the Bankruptcy Cases (the “Confirmation Order”), confirming the First Amended
Joint Chapter 11 Plan of Reorganization of24 Hour Fitness Worldwide, Inc. and Its Affiliated
Debtors [D.I. 1478] (the “Plan”), attached hereto as Exhibit A.!
PLEASE TAKE FURTHER NOTICE that substantial consummation (as that term
is defined by Section 1101(2) of the Bankruptcy Code) took place, and the Effective Date with
1 Capitalized terms used but not defined herein shall have the meanings set forth in the Confirmation Order or the
Plan (as applicable).
respect to the Plan occurred, on December 29, 2020. See Notice of Effective Date and Entry of
Order (I) Confirming First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness
Worldwide, Inc. and its Affiliated Debtors and (II) Granting Related Relief [D.1. 1551], attached
hereto as Exhibit B.
PLEASE TAKE FURTHER NOTICE that, as of the Effective Date, and without
any further action by any Party, the discharge arising pursuant to Section 1141(d) of the
Bankruptcy Code? of, among other things, Claims and Causes of Action, including with respect to
the above-captioned proceeding, took effect. See Plan Article VII.B. The Plan and the discharge
Section 1141(d)(1) of the Bankruptcy Code, referenced and incorporated in the Plan as further detailed in Exhibit
A attached hereto, provides: “Except as otherwise provided in this subsection, in the plan, or in the order
confirming the plan, the confirmation of a plan: (A) discharges the debtor from any debt that arose before the date
of such confirmation, and any debt of a kind specified in section 502(g), 502(h), or 502(i) of this title, whether or
not: (i) a proofof the claim based on such debt is filed or deemed filed under section 501 of this title; (ii) such
claim is allowed under section 502 of this title; or (iii) the holder of such claim has accepted the plan; and (B)
terminates all rights and interests of equity security holders and general partners provided for by the plan.”
injunction enjoin any party from, among other things, commencing or continuing any action or
th Claims or Interests. Plan Article VIILF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Respectfully submitted,
mA Nelson Skyler
Texas Bar No. 00784982
S.D. Tex. Bar No. 22969
nskyler@brownsims.com
Brown Sims
1177 West Loop South, 10" Floor
Houston, Texas 77027
Phone: 713.629.1580
Fax: 713.629.5027
Attorneys for Defendant
24 Hour Fitness USA, Inc.
Of Counsel:
Tarush R. Anand
Texas Bar No. 24055103
S.D. Tex. Bar No. 712010
tanand@brownsims.com
Certificate of Service
I certify that a true and correct copy of this document, together with any exhibits
or attachments, is being served on all parties on March 8, 2021 in accordance with the
Federal Rules of Civil Procedure.
AAC
Nelson Skyler
Exhibit A
First Amended Joint Chapter 11 Plan of Reorganization
of 24 Hour Fitness Worldwide, Inc. and Its Affiliated Debtors
Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 1 of 20
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
mete ee ene en nen ne nen nnnnnnnennennnene X
In re Chapter 11
24 HOUR FITNESS Case No. 20-11558 (KBO)
WORLDWIDE, INC., et al,
(Jointly Administered)
Debtors.!
Re: D.I. 1487
ex.
ORDER (1) CONFIRMING
FIRST AMENDED JOINT CHAPTER 11 PLAN
OF REORGANIZATION OF 24 HOUR FITNESS WORLDWIDE, INC.
AND ITS AFFILIATED DEBTORS AND (IT) GRANTING RELATED RELIEF
Upon the filing by 24 Hour Fitness Worldwide, Inc. and its debtor affiliates, as
debtors and debtors in possession in the above-captioned chapter 11 cases (collectively,
the “Debtors”) of the First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness
Worldwide, Inc. and its Affiliated Debtors [D.1. 1487] (as amended or modified in accordance with
its terms, the “Plan”),? which is attached hereto as Exhibit A; and the Court previously having
approved the Disclosure Statement and the solicitation procedures related to the Disclosure
Statement and the solicitation of acceptances and rejections of the Plan, in each case pursuant to
the Disclosure Statement Order; and the Debtors having served the Disclosure Statement on the
Holders of Claims and Interests pursuant to the Disclosure Statement Order, see Affidavit of
Service [D.I. 1285]; and the Debtors having filed the documents comprising the Plan Supplement
The Debtors in these chapter 11 cases, along with the last four digits ofeach Debtor’s federal tax identification
number, as applicable, are 24 Hour Holdings II LLC (N/A); 24 Hour Fitness Worldwide, Inc. (5690); 24 Hour
Fitness United States, Inc. (8376); 24 Hour Fitness USA, Inc. (9899); 24 Hour Fitness Holdings LLC (8902); 24
San Francisco LLC (3542); 24 New York LLC (7033); 24 Denver LLC (6644); RS FIT Holdings LLC (3064);
RS FIT CA LLC (7007); and RS FIT NW LLC (9372). The Debtors’ corporate headquarters and service address
is 12647 AlcostaBlvd., Suite 500, San Ramon, CA 94583.
Capitalized terms used in this Order but not otherwise defined shall have the same meaning set forth in the Plan.
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on December 5, 2020, and continuing thereafter, see [D.I. 1301] (collectively, and as may be
further amended or supplemented, the “Plan Supplement”); and the Court having considered the
record in these chapter 11 cases, the stakeholder support for the Plan evinced on the record and in
the Declaration of James Daloia of Prime Clerk LLC Regarding the Solicitation of Votes and
Tabulation of Ballots Cast on the First Amended Joint Chapter 11 Plan of Reorganization of 24
Hour Fitness Worldwide, Inc. and its Affiliated Debtors filed on December 17, 2020 [D.I. 1462]
(the “Voting Certification”), the compromises and settlements embodied in and contemplated by
the Plan, the briefS and arguments regarding confirmation of the Plan, the evidence regarding
confirmation of the Plan, and a hearing on confirmation of the Plan having been held on December
21, 2020 (the “Confirmation Hearing”); and after due deliberation:
THE COURT HEREBY FINDS:
I The Plan was solicited in good faith and in compliance with applicable
provisions of the Bankruptcy Code and Bankruptcy Rules. The Debtors participated in good faith
and in compliance with the applicable provisions of the Bankruptcy Code in the offer, issuance,
sale, solicitation and/or purchase of the securities offered under the Plan, and therefore are entitled
to the protections of section 1125(e) of the Bankruptcy Code.
IL. The Plan has been proposed in good faith and not by any means forbidden
by law. In so finding, the Court has considered the totality of the circumstances of these cases.
The Plan is the result of extensive, good faith, arm’s-length negotiations among the Debtors and
their principal constituencies.
Ill. An Impaired Class entitled to vote on the Plan has accepted the Plan with
respect to each of the Debtors.
IV. The Plan does not “discriminate unfairly” and is “fair and equitable” with
respect to the Classes that are Impaired and voted to, or are deemed to, reject the Plan, because no
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Class senior to any rejecting Class is being paid more than in full and the Plan does not provide a
recovery on account of any Claim or Interest that is junior to such rejecting Classes.
Vv. The Plan does not discriminate unfairly among the different classes of
unsecured creditors and does not offend the fair and equitable standard of the Bankruptcy Code
because grounds and justifications exist for treating the classes differently in these cases.
VI. The releases contained in Article VII of the Plan are an essential
component ofthe Plan. In addition, the third-party releases contained in Article VIILD of the Plan
are consensual in that all parties to be bound by such release were given due and adequate notice
thereof and sufficient opportunity and instruction to elect to opt out of such release. The releases
contained in Article VIII of the Plan are (i) in exchange for the good and valuable consideration
provided by the Released Parties; (ii) a good faith settlement and compromise of the Claims
teleased by Article VIII of the Plan; (iii) in the best interests of the Debtors and all Holders of
Claims and Interests; (iv) fair, equitable, and reasonable; and (v) given and made after due notice
and opportunity for hearing.
Vil. The exculpation provided by Article VIILE of the Plan for the benefit of the
Exculpated Parties is appropriately tailored to the circumstances of these cases.
VIII. The Debtors have elected to implement the Purchase Transaction, pursuant
to which All Day AcquisitionCo, LLC will acquire substantially all of the assets of Reorganized
24 Hour Worldwide (primarily the equity interests of 24 Hour Fitness USA, Inc., which shall have
converted into a limited liability company) in accordance with the Exhibit B to the Plan.
FURTHER, IT IS HEREBY ORDERED THAT:
A. Confirmation of the Plan
1 The Plan is confirmed.
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2. Any and all objections to the Plan that have not been withdrawn or resolved
prior to the Confirmation Hearing are hereby overruled.
3 The documents contained in the Plan Supplement are integral to the Plan
and are approved by the Court, and the Debtors and the Reorganized Debtors (as applicable) are
authorized to take all actions required under the Plan and the Plan Supplement to effectuate the
Plan and the transactions contemplated therein, including, for the avoidance of doubt, the issuance
and registration, as applicable, of any new equity interest, debt, or other form of security in
connection with the Plan.
4 The terms of the Plan, the Plan Supplement, and the exhibits thereto are
incorporated herein by reference and are an integral part of this Confirmation Order. The terms of
the Plan, the Plan Supplement, all exhibits thereto, and all other relevant and necessary documents
shall be effective and binding as of the Effective Date. The failure to specifically include or refer
to any particular article, section, or provision of the Plan, the Plan Supplement, or any related
document in this Confirmation Order does not diminish or impair the effectiveness or
enforceability of such article, section, or provision.
> This Confirmation Order shall constitute, to the greatest extent permissible,
all approvals and consents required, if any, by the laws, rules or regulations of any state or any
other governmental authority with respect to the implementation or consummation of the Plan and
any other acts that may be necessary or appropriate for the implementation or consummation of
the Plan.
6 Subject to payment of any applicable filing fees under applicable non-
bankruptcy law, each federal, state, commonwealth, local, foreign, or other governmental agency
is authorized to accept for filing and/or recording any and all documents, mortgages, and
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instruments necessary or appropriate to effectuate, implement, or consummate the transactions
contemplated by the Plan and this Confirmation Order.
7 The compromises and settlements set forth in the Plan are approved and will
be effective immediately and binding on all parties in interest on the Effective Date.
8 The amendments and modifications to the First Amended Joint Chapter11
Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and its Affiliated Debtors [D.1. 1231]
since the filing thereof and mcorporated into the Plan are approved in accordance with section
1127(a) of the Bankruptcy Code and Rule 3019(a) of the Bankruptcy Rules.
9 For the avoidance doubt, pursuant to Bankruptcy Rule 3020(c)(1), the
following provisions in the Plan are hereby approved and will be effective immediately on the
Effective Date without further order or action by the Court, any of the parties to such release, or
any other Entity: (i) Debtor Releases (Article VIII.C); (ii) Third Party Releases (Article VIII.D);
(iii) Exculpation (Article VIII.E); and (iv) Injunction (Article VII.F); provided, thatthe foregoing
provisions of the Plan shall not release the Debtors of (i) any accrued, but unbilled, liabilities under
nonresidential real property leases to be assumed under the Plan, without reference to the Effective
Date, or (ii) any obligations under indemnification provisions contained in nonresidential real
property leases to be assumed under the Plan, without reference to the Effective Date.
10. Except as otherwise provided in the Plan, or in any contract, instrument,
release, or other agreement or document created pursuant to the Plan, on the Effective Date and
concurrently with the applicable distributions made pursuant to the Plan and, in the case of a
Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the
Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any
property of the Estates shall be fully released and discharged, and all of the right, title, and interest
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of any holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall
revert to the Reorganized Debtors and their successors and assigns. All Holders of Secured Claims
are directed to cooperate with the Debtors or the Reorganized Company, as the case may be, in
implementing this paragraph and any administrative details relating thereto.
11. The Debtors shall cause to be served a notice of the entry of this
Confirmation Order and occurrence of the Effective Date, substantially in the form attached hereto
as Exhibit B (the “Confirmation Notice”), upon (i) all parties listed in the creditor matrix
maintained by Prime Clerk LLC, (ii) all parties that filed proof§ of claim in these chapter 11 cases,
and (iii) such additional persons and entities as deemed appropriate by the Debtors, no later than
five (5) business days after the Effective Date. The Debtors shall cause the Confirmation Notice
to be published once in the national editions ofeach of The New York Times and USA Today within
seven (7) business days after the Effective Date or as soon as reasonably practicable thereafter.
No other or further notice of the entry of this Confirmation Order and occurrence of the Effective
Date shall be necessary.
B. Certain Executory Contract, Unexpired Lease, and Taxing Authority Matters
12. Notwithstanding anything to the contrary contained in the Plan, Plan
Supplement, or this Order, no liens shall be granted against Unexpired Leases of non-residential
real property and no rights of use or occupancy to such non-residential real property shall be
granted pursuant to the Plan, the Exit Facility Documents, and the Exit Term Loan Facility.
13. The Debtors have cured or demonstrated their ability to cure any default
with respect to any act or omission that occurred prior to the Effective Date under any of the
Executory Contracts or Unexpired Leases proposed to be assumed or assumed and assigned
(collectively, the “Assumed Agreements”) within the meaning of section 365(b)(1)(A) of the
Bankruptcy Code. Unless otherwise agreed to by the parties, other than with respect to an
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Assumed Agreement that is the subject of an Assumption Dispute or an Adjourned Cure Dispute,
the Cure Amounts set forth in the Assumption Schedule are the amounts necessary to “cure” all
“defaults” within the meaning of section 365(b) of the Bankruptcy Code under the Assumed
Agreements. Other than with respect to an Assumed Agreement that is the subject of an
Assumption Dispute, the promise by the Debtors or the Reorganized Company, as applicable, to
perform the obligations under their respective Assumed Agreements after the Effective Date shall
constitute adequate assurance of their future performance of and under each of their respective
Assumed Agreements within the meaning of sections 365(b)(1) and 365(f)(2), as applicable.
14. Upon an agreement between the Debtors and the relevant counterparty to
an Executory Contract or Unexpired Lease, Assumption Disputes with respect to issues unrelated
to Cure Amounts may be adjourned to a hearing after the Confirmation Hearing (collectively, the
“Adjourned Assumption Disputes”). The determination of assumption, assumption and
assignment, and/or rejection of the Executory Contracts and Unexpired Leases relating to the
Adjourned Assumption Disputes is hereby specifically reserved pending resolution of the relevant
Adjourned Assumption Dispute, and any and all rights and claims of the parties with respect to
such Executory Contracts and Unexpired Leases, including any and all rights afforded under the
Bankruptcy Code and other applicable law, are hereby expressly reserved.
i. Brick Property Agreements
1S. 24 New York, LLC seeks to assume the Lease dated May 1, 1983, and as
amended and supplemented from time to time, for 193 Chambersbridge Road, Brick, New Jersey,
(the “Brick Property”) between Ocean Ice Palace, Inc., as successor Lessor, (“OIP”) and Debtor
24 New York, LLC, as successor Lessee, along with all related rights and documents (collectively,
the “Brick Lease”)
and to assign the Brick Lease to Work Play Fitness, LLC, (“WPF”), the current
subtenant atthe Brick Property pursuant to a Sublease dated August 28, 2018 (the “Sublease”). 24
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New York, LLC is also party to a Sale-Purchase Agreement dated October 16, 2017, with WPF
(the “Brick Lease Sale Agreement” and, together with the Brick Lease and the Sublease, the
“Brick Property Agreements”). OIP has objected to the proposed assumption and assignment of
the Brick Lease to WPF (the “OIP Objection’). See Docket No. 1439. The Debtors, OIP, and
WPF have agreed to continue the OIP Objection until January 12, 2021. As a result, the
determination of assumption, assumption and assignment, and/or rejection of the Brick Property
Agreements is hereby specifically reserved pending resolution of the OIP Objection, and any and
all rights and claims of the parties with respect to the Brick Property Agreements, including any
and all rights afforded under the Bankruptcy Code and other applicable law, are hereby expressly
reserved.
ii. Mechanic’s and Materialman’s Liens
16. For the avoidance of doubt, the Holder of an Allowed Other Secured Claim
arising from the assertion of a mechanic’s lien or materialman’s lien shall retain its Lien(s)
associated with such Allowed Other Secured Claim unless and until such Holder (i) receives Cash
in an amount equal to the Allowed amount of such Claim or (ii) receives such other treatment
sufficient to render such Holder’s Allowed Other Secured Claim Unimpaired, as set forth in Article
IL.B.2 of the Plan. For the avoidance of doubt, nothing herein shall be deemed to affect the
determination of the existence, extent, validity, or priority of any rights, Liens, or interests—
including any mechanic’s or materialman’s liens—asserted or held by any Holder of an Other
Secured Claim.
iii. Texas Comptroller of Public Accounts
17. Nothing in the Plan or this Confirmation Order discharges or releases the
Debtors, Reorganized Debtors or any non-Debtors from any claims or causes of action involving
the Texas Comptroller of Public Accounts (the “Texas Comptroller”) or impairs the ability of the
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Texas Comptroller to pursue any claims or causes of action against any Debtors, Reorganized
Debtors or non-Debtors. All claims and causes of action involving the Texas Comptroller survive
the Chapter 11 Cases just as if the cases had not been commenced. As such, they will be paid and
determined in the manner and by the administrative or judicial tribunals before which such rights
or claims would have been resolved or adjudicated if the Chapter 11 Cases had not been
commenced. Without limiting the foregoing, for the avoidance of doubt: (i) the Texas Comptroller
is not required to file any claims in the Debtors’ Chapter 11 Cases; (ii) nothing affects or impairs
the Texas Comptroller’s ability to make demand on, be paid by, or otherwise pursue any sureties
that are liable to the Texas Comptroller on any debts related to the Debtors and/or the Reorganized
Debtors; (iii) nothing affects or impairs the Texas Comptroller’s ability to exercise its police or
regulatory powers against the Debtors and/or the Reorganized Debtors; (iv) nothng affects or
impairs the Texas Comptroller’s rights to assert setoff and recoupment, including contingent or
unliquidated rights, against the Debtors and/or the Reorganized Debtors; and (v) nothing contained
in the Plan or this Confirmation Order will be deemed to be a waiver or relinquishment of any
rights, claims, causes of action, rights of setoff or recoupment, rights to appeal tax assessments, or
other legal or equitable defenses that the Debtors and/or the Reorganized Debtors have under non-
bankruptcy law in connection with any claim, liability or cause of action of the Texas Comptroller.
iv. Local Texas Tax Authorities
18. Notwithstanding anything to the contrary in the Plan or this Confirmation
Order, with respect to the Claims of the Texas taxing authorities Frisco ISD, Richardson ISD,
Arlington ISD, Eagle Mountain-Saginaw ISD, Crowley ISD, Grapevine-Colleyville ISD, Brazoria
County Tax Office, Fort Bend ISD, Fort Bend MUD #167, Fort Bend MUD #161, Fort Bend MUD
#050, Fort Bend LID 12, Clear Creek ISD, Friendswood ISD, City of Friendswood, East End
District, Spring ISD, Humble ISD, Harris County MUD #132, Cornerstones MUD, Alief ISD, City
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of Houston, Harris County MUD #186, Harris County WCID #145, Pasadena ISD, Spring Branch
ISD, Klein ISD, Woodlands Metro MUD, Woodlands RUD #1, Montgomery County MUD #60,
Collin County, Collin County Community College District, City of Plano, City of Murphy, City
of McKinney, McKinney Independent School District, Denton County, and Williamson County
(the “Certain Texas Taxing Authorities”) that arise under the Texas Tax Code (the “Texas
Taxing Authority Claims”), (a) to the extent the Texas Tax Code provides for interest and/or
penalties with respect to any portion of the Texas Taxing Authority Claims, such interest and/or
penalties shall be included in the Texas Taxing Authority Claims, (b) the liens, if any, securing the
Texas Taxing Authority Claims shall be retained until the applicable Texas Taxing Authority
Claims are paid in full, and (c) the Debtors or the Reorganized Debtors, as applicable, shall pay
Allowed Texas Taxing Authority Claims on the later of (i) the date the Texas Taxing Authority
Claims become due pursuant to the Texas Tax Code and in the ordinary course of business (subject
to any applicable extensions, grace periods, or similar rights under the Texas Tax Code) and (ii)
the Effective Date (or as soon as reasonably practicable thereafter). All rights and defenses of the
Debtors and the Reorganized Debtors under non-bankruptcy law are reserved and preserved with
tespect to such Texas Taxing Authority Claims. The Certain Texas Taxing Authorities’ lien
priority, if any, shall not be primed or subordinated by the Exit Term Loan Facility if approved by
the Bankruptcy Court in conjunction with the Confirmation of this Plan or otherwise. In the event
ofa default in the payment of the Texas Taxing Authority Claims as provided herem, the applicable
Certain Texas Taxing Authority shall provide notice to counsel for the Reorganized Debtors, and
the Reorganized Debtors shall have twenty (20) days ftom the date of such notice to cure the
default. Ifthe default is not cured, the applicable Certain Texas Taxing Authority shall be entitled
to pursue collection of all amounts owed pursuant to applicable non-bankruptcy law outside the
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Bankruptcy Court. Failure to pay the 2020 ad valorem taxes prior to the applicable non-bankruptcy
law delinquency date shall constitute an event of default only as to the relevant Certain Texas
Taxing Authority. In the event that collateral that secures the Claim of one or more of the Certain
Texas Taxing Authorities is returned to a creditor holding a Lien that is junior to the Certain Texas
Taxing Authorities’ Lien, the Debtors or Reorganized Debtors, as applicable, shall first pay all ad
valorem property taxes that are secured by such collateral, to the extent that the Debtors or
Reorganized Debtors, as applicable, are liable for such ad valorem property taxes under applicable
non-bankruptcy law. The Debtors’ and the Reorganized Debtors’ (as applicable) rights and
defenses under applicable law and the Bankruptcy Code with respect to the foregoing, including
their right to dispute or object to the Texas Taxing Authority Claims and liens, are fully preserved.
19. Notwithstanding any other provisions herein, with respect to the claims for
2020 ad valorem taxes filed by the Local Texas Tax Authorities (Cypress-Fairbanks ISD, Dallas
County, Fairview, Fort Bend County, Frisco, Galveston County, Harris County, Irving ISD,
Lewisville ISD, Montgomery County, Rockwall CAD, and Tarrant County ), such claims shall be
paid in the ordinary course of business by the Reorganized Debtors, and any claims asserted by
the Local Texas Tax Authorities in the Chapter 11 Cases with respect to such 2020 ad valorem
taxed shall be deemed waived and withdrawn. Should the 2020 ad valorem taxes not be paid
timely pursuant to applicable non-bankruptcy law, the Local Texas Tax Authorities shall be
entitled to such interest and penalties as would ordinarily accrue under state law. The Local Texas
Tax Authorities shall retain their liens until the taxes are paid in full with the same validity, extent
and priority as existed upon the Petition Date. The Local Texas Tax Authorities may proceed to
collect all unpaid amounts owed with respect to 2020 ad valorem taxes pursuant to applicable non-
bankruptcy law without further recourse to this Court.
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20. Notwithstanding anything to the contrary in the Plan or this Confirmation
Order, the State of Washington Department of Revenue shall receive, on the account of its Allowed
General Unsecured Claims, if any, the GUC Cash Recovery, as set forth in Article IIIB of the
Plan. For the avoidance of doubt, nothing in this Confirmation Order shall be construed to affect
the distribution, if any, under Article II of the Plan to the State of Washington Department of
Revenue on account of any Allowed Priority Tax Claims.
C. Certain Governmental Matters
21. Notwithstanding any provision to the contrary in the Plan, the Plan
Supplement, this Order, or documents that implement the Plan, the Plan Supplement, or this Order
(collectively, the “Plan Documents”):
(a) As to the United States, nothing in the Plan Documents shall: (1)
discharge, release, enjoin, impair or otherwise preclude (a) any liability to the United States that
is not a “claim” within the meaning of section 101(5) of the Bankruptcy Code (a “Section 101(5)
Claim”), (b) any Section 101(5) Claim of the United States arising after the Confirmation Date,
or (c) any liability of any entity or person under police or regulatory statutes or regulations to any
Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) as the owner, lessor,
lessee or operator of property or rights to property that such entity owns, operates or leases after
the Confirmation Date; (2) release, nullify, preclude, or enjoin the enforcement of any police or
regulatory power; (3) modify the scope of section 502 of the Bankruptcy Code with respect to the
Section 101(5) Claims of the United States, including, but not limited to, the provisions of section
502 of the Bankruptcy Code pertaining to the estimation of claims; (4) cause an amended Section
101(5) Claim of the United States to be disallowed or expunged pursuant to the Plan solely because
the United States did not obtain the prior authorization of the Bankruptcy Court to file the Section
101(5) Claim if such claim would otherwise be Allowed pursuant to the Bankruptcy Code, to the
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extent such amended Section 101(5) Claim was timely filed, the Federal Rules of Bankruptcy
Procedure, or applicable law, without prejudice to the right of the Debtors and the Reorganized
Debtors, as applicable, to object to any Section 101(5) Claim of the United States on any
appropriate grounds; (5) authorize the sale, assignment, or other transfer to any non-Debtor third
party of any federal (i) grants, (i) grant funds, (iii) contracts, (iv) property, cluding but not
limited to, intellectual property and patents, (v) leases, (vi) agreements, or other interests of the
federal government (collectively, the “Federal Interests”) without compliance by the Debtors and
the Reorganized Debtors, as applicable, with all terms of the Federal Interests and with all
applicable non-bankruptcy law; (6) be interpreted to set cure amounts or to require the United
States to novate, approve, or otherwise consent to the assumption, transfer, or assignment of any
Federal Interests; (7) authorize the transfer or assignment to any non-Debtor third party of any
federal governmental (i) license, (ii) permit, (iti) registration, (iv) authorization, or (v) approval,
or the discontinuation of any obligation thereunder, without compliance with all applicable legal
requirements, obligations, and approvals under non-bankruptcy laws; (8) waive, alter, or otherwise
limit the United States’ property rights with respect to the Federal Interests, including, but not
limited to, inventory, patents, intellectual property, licenses, and data; (9) release, exculpate,
enjoin, impair, or discharge any non-Debtor from any Section 101(5) Claim, liability, suit, right or
Cause of Action of the United States; (10) affect any setoff or recoupment rights of the United
States, and such rights are hereby preserved; (11) require the United States to file an
Administrative Claim in order to receive payment for any liability described in section
503(b)(1)(B) and (C) pursuant to section 503(b)(1)(D) of the Bankruptcy Code with respect to any
such Administrative Claim arising in the ordinary course of business; (12) be construed as a
compromise or settlement of any liability, claim, Cause of Action or interest of the United States
13
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Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 14 of 20
with respect to the U.S. Equal Employment Opportunity Commission; (13) be deemed to be a
waiver of any right, interest, dividends, or accruals on Plan distributions to which the United States
would be entitled under the Bankruptcy Code; or (14) require Section 101(5) Claims arismg from
the rejection of an Executory Contract or Unexpired Lease relating to Federal Interests
(collectively, the “Federal Rejection Damages Claims”) (a) to be filed by a deadline other than
the later of (i) the Governmental Bar Date (as defined in the Claims Bar Date Order) or (ii) thirty
(30) days after the effective date of the rejection of such Federal Interest or (b) alter the treatment
of such Federal Rejection Damages Claims under the Bankruptcy Code.
(b) Validly perfected Liens securing Section 101(5) Claims of the
United States to the extent provided by section 506 of the Bankruptcy Code shall be retained until
the relevant Section 101(5) Claim, with interest as provided by applicable non-bankruptcy law, to
the extent such interest and penalties are allowed pursuant to the Bankruptcy Code and applicable
law, is paid in full Administrative Claims of the United States Allowed pursuant to the Plan or
the Bankruptcy Code shall accrue interest and penalties as provided by non-bankruptcy law until
paid in full, to the extent such terest and penalties are allowed pursuant to the Bankruptcy Code
and applicable law. Priority Tax Claims of the United States Allowed pursuant to the Plan or the
Bankruptcy Code will be paid in accordance with Section 1129(a)(9)(C) of the Bankruptcy Code.
To the extent the Priority Tax Claims of the United States (including any penalties, interest, or
additions to tax entitled to priority under the Bankruptcy Code) are Allowed pursuant to the
Bankruptcy Code or the Plan and are not paid in full in cash on the Effective Date, then such
Priority Tax Claims shall accrue interest commencing on the Effective Date at the rate set forth in
section 511 of the Bankruptcy Code.
14
WEIL:\97764464\1\78028.0003
Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 15 of 20
D. Exit Term Loan Facility
22. The Debtors and Reorganized Debtors are hereby authorized to enter into,
and take such actions as necessary or desirable to perform under the Exit Term Loan Facility and,
in each case, all documents or agreements related thereto, including the payment or reimburse ment
of any fees, indemnities and expenses under or pursuant to any such documents and agreements in
connection therewith. Except as otherwise provided in paragraph 12 hereof, upon the closing of
the Exit Term Loan Facility, the lenders thereunder shall have valid, binding, perfected and
enforceable Liens on the collateral specified in the Exit Facility Documents with the priority set
forth in the Exit Facility Documents, and subject only to such Liens and security interests as may
be permitted under the Exit Facility Documents, and the Debtors and Reorganized Debtors are
hereby authorized to make a
Preview
Filed 3/8/2021 3:21 PM Beverley McGrew Walker District Clerk Fort Bend County, Texas Katherine Cavazos Cause No. 20-DCV-273317 Jaws Sugar Land, LLC In the District Court of Plaintiff(s), Vv. Fort Bend County, Texas 24 Hour Fitness USA, Inc. Defendant(s). 240" Judicial District Notice of Bankruptcy Discharge PLEASE TAKE NOTICE that on June 15, 2020, voluntary petitions under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) were filed by 24 Hour Fitness Worldwide, Inc. and its debtor affiliates (collectively, the “Reorganized Debtors”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The Reorganized Debtors’ chapter 11 cases are being jointly administered for procedural purposes only under Case No. 20-11558 (KBO) (the “Bankruptcy Cases”). PLEASE TAKE FURTHER NOTICE that on December 22, 2020, the Bankruptcy Court entered the Order (I) Confirming First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and Its Affiliated Debtors and (II) Granting Related Relief [D.I. 1508] in the Bankruptcy Cases (the “Confirmation Order”), confirming the First Amended Joint Chapter 11 Plan of Reorganization of24 Hour Fitness Worldwide, Inc. and Its Affiliated Debtors [D.I. 1478] (the “Plan”), attached hereto as Exhibit A.! PLEASE TAKE FURTHER NOTICE that substantial consummation (as that term is defined by Section 1101(2) of the Bankruptcy Code) took place, and the Effective Date with 1 Capitalized terms used but not defined herein shall have the meanings set forth in the Confirmation Order or the Plan (as applicable). respect to the Plan occurred, on December 29, 2020. See Notice of Effective Date and Entry of Order (I) Confirming First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and its Affiliated Debtors and (II) Granting Related Relief [D.1. 1551], attached hereto as Exhibit B. PLEASE TAKE FURTHER NOTICE that, as of the Effective Date, and without any further action by any Party, the discharge arising pursuant to Section 1141(d) of the Bankruptcy Code? of, among other things, Claims and Causes of Action, including with respect to the above-captioned proceeding, took effect. See Plan Article VII.B. The Plan and the discharge Section 1141(d)(1) of the Bankruptcy Code, referenced and incorporated in the Plan as further detailed in Exhibit A attached hereto, provides: “Except as otherwise provided in this subsection, in the plan, or in the order confirming the plan, the confirmation of a plan: (A) discharges the debtor from any debt that arose before the date of such confirmation, and any debt of a kind specified in section 502(g), 502(h), or 502(i) of this title, whether or not: (i) a proofof the claim based on such debt is filed or deemed filed under section 501 of this title; (ii) such claim is allowed under section 502 of this title; or (iii) the holder of such claim has accepted the plan; and (B) terminates all rights and interests of equity security holders and general partners provided for by the plan.” injunction enjoin any party from, among other things, commencing or continuing any action or th Claims or Interests. Plan Article VIILF. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Respectfully submitted, mA Nelson Skyler Texas Bar No. 00784982 S.D. Tex. Bar No. 22969 nskyler@brownsims.com Brown Sims 1177 West Loop South, 10" Floor Houston, Texas 77027 Phone: 713.629.1580 Fax: 713.629.5027 Attorneys for Defendant 24 Hour Fitness USA, Inc. Of Counsel: Tarush R. Anand Texas Bar No. 24055103 S.D. Tex. Bar No. 712010 tanand@brownsims.com Certificate of Service I certify that a true and correct copy of this document, together with any exhibits or attachments, is being served on all parties on March 8, 2021 in accordance with the Federal Rules of Civil Procedure. AAC Nelson Skyler Exhibit A First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and Its Affiliated Debtors Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 1 of 20 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE mete ee ene en nen ne nen nnnnnnnennennnene X In re Chapter 11 24 HOUR FITNESS Case No. 20-11558 (KBO) WORLDWIDE, INC., et al, (Jointly Administered) Debtors.! Re: D.I. 1487 ex. ORDER (1) CONFIRMING FIRST AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION OF 24 HOUR FITNESS WORLDWIDE, INC. AND ITS AFFILIATED DEBTORS AND (IT) GRANTING RELATED RELIEF Upon the filing by 24 Hour Fitness Worldwide, Inc. and its debtor affiliates, as debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors”) of the First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and its Affiliated Debtors [D.1. 1487] (as amended or modified in accordance with its terms, the “Plan”),? which is attached hereto as Exhibit A; and the Court previously having approved the Disclosure Statement and the solicitation procedures related to the Disclosure Statement and the solicitation of acceptances and rejections of the Plan, in each case pursuant to the Disclosure Statement Order; and the Debtors having served the Disclosure Statement on the Holders of Claims and Interests pursuant to the Disclosure Statement Order, see Affidavit of Service [D.I. 1285]; and the Debtors having filed the documents comprising the Plan Supplement The Debtors in these chapter 11 cases, along with the last four digits ofeach Debtor’s federal tax identification number, as applicable, are 24 Hour Holdings II LLC (N/A); 24 Hour Fitness Worldwide, Inc. (5690); 24 Hour Fitness United States, Inc. (8376); 24 Hour Fitness USA, Inc. (9899); 24 Hour Fitness Holdings LLC (8902); 24 San Francisco LLC (3542); 24 New York LLC (7033); 24 Denver LLC (6644); RS FIT Holdings LLC (3064); RS FIT CA LLC (7007); and RS FIT NW LLC (9372). The Debtors’ corporate headquarters and service address is 12647 AlcostaBlvd., Suite 500, San Ramon, CA 94583. Capitalized terms used in this Order but not otherwise defined shall have the same meaning set forth in the Plan. WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 2 of 20 on December 5, 2020, and continuing thereafter, see [D.I. 1301] (collectively, and as may be further amended or supplemented, the “Plan Supplement”); and the Court having considered the record in these chapter 11 cases, the stakeholder support for the Plan evinced on the record and in the Declaration of James Daloia of Prime Clerk LLC Regarding the Solicitation of Votes and Tabulation of Ballots Cast on the First Amended Joint Chapter 11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and its Affiliated Debtors filed on December 17, 2020 [D.I. 1462] (the “Voting Certification”), the compromises and settlements embodied in and contemplated by the Plan, the briefS and arguments regarding confirmation of the Plan, the evidence regarding confirmation of the Plan, and a hearing on confirmation of the Plan having been held on December 21, 2020 (the “Confirmation Hearing”); and after due deliberation: THE COURT HEREBY FINDS: I The Plan was solicited in good faith and in compliance with applicable provisions of the Bankruptcy Code and Bankruptcy Rules. The Debtors participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code in the offer, issuance, sale, solicitation and/or purchase of the securities offered under the Plan, and therefore are entitled to the protections of section 1125(e) of the Bankruptcy Code. IL. The Plan has been proposed in good faith and not by any means forbidden by law. In so finding, the Court has considered the totality of the circumstances of these cases. The Plan is the result of extensive, good faith, arm’s-length negotiations among the Debtors and their principal constituencies. Ill. An Impaired Class entitled to vote on the Plan has accepted the Plan with respect to each of the Debtors. IV. The Plan does not “discriminate unfairly” and is “fair and equitable” with respect to the Classes that are Impaired and voted to, or are deemed to, reject the Plan, because no 2 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc 1508 Filed 12/22/20 Page 3 of 20 Class senior to any rejecting Class is being paid more than in full and the Plan does not provide a recovery on account of any Claim or Interest that is junior to such rejecting Classes. Vv. The Plan does not discriminate unfairly among the different classes of unsecured creditors and does not offend the fair and equitable standard of the Bankruptcy Code because grounds and justifications exist for treating the classes differently in these cases. VI. The releases contained in Article VII of the Plan are an essential component ofthe Plan. In addition, the third-party releases contained in Article VIILD of the Plan are consensual in that all parties to be bound by such release were given due and adequate notice thereof and sufficient opportunity and instruction to elect to opt out of such release. The releases contained in Article VIII of the Plan are (i) in exchange for the good and valuable consideration provided by the Released Parties; (ii) a good faith settlement and compromise of the Claims teleased by Article VIII of the Plan; (iii) in the best interests of the Debtors and all Holders of Claims and Interests; (iv) fair, equitable, and reasonable; and (v) given and made after due notice and opportunity for hearing. Vil. The exculpation provided by Article VIILE of the Plan for the benefit of the Exculpated Parties is appropriately tailored to the circumstances of these cases. VIII. The Debtors have elected to implement the Purchase Transaction, pursuant to which All Day AcquisitionCo, LLC will acquire substantially all of the assets of Reorganized 24 Hour Worldwide (primarily the equity interests of 24 Hour Fitness USA, Inc., which shall have converted into a limited liability company) in accordance with the Exhibit B to the Plan. FURTHER, IT IS HEREBY ORDERED THAT: A. Confirmation of the Plan 1 The Plan is confirmed. WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 4 of 20 2. Any and all objections to the Plan that have not been withdrawn or resolved prior to the Confirmation Hearing are hereby overruled. 3 The documents contained in the Plan Supplement are integral to the Plan and are approved by the Court, and the Debtors and the Reorganized Debtors (as applicable) are authorized to take all actions required under the Plan and the Plan Supplement to effectuate the Plan and the transactions contemplated therein, including, for the avoidance of doubt, the issuance and registration, as applicable, of any new equity interest, debt, or other form of security in connection with the Plan. 4 The terms of the Plan, the Plan Supplement, and the exhibits thereto are incorporated herein by reference and are an integral part of this Confirmation Order. The terms of the Plan, the Plan Supplement, all exhibits thereto, and all other relevant and necessary documents shall be effective and binding as of the Effective Date. The failure to specifically include or refer to any particular article, section, or provision of the Plan, the Plan Supplement, or any related document in this Confirmation Order does not diminish or impair the effectiveness or enforceability of such article, section, or provision. > This Confirmation Order shall constitute, to the greatest extent permissible, all approvals and consents required, if any, by the laws, rules or regulations of any state or any other governmental authority with respect to the implementation or consummation of the Plan and any other acts that may be necessary or appropriate for the implementation or consummation of the Plan. 6 Subject to payment of any applicable filing fees under applicable non- bankruptcy law, each federal, state, commonwealth, local, foreign, or other governmental agency is authorized to accept for filing and/or recording any and all documents, mortgages, and WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc 1508 Filed 12/22/20 Page 5 of 20 instruments necessary or appropriate to effectuate, implement, or consummate the transactions contemplated by the Plan and this Confirmation Order. 7 The compromises and settlements set forth in the Plan are approved and will be effective immediately and binding on all parties in interest on the Effective Date. 8 The amendments and modifications to the First Amended Joint Chapter11 Plan of Reorganization of 24 Hour Fitness Worldwide, Inc. and its Affiliated Debtors [D.1. 1231] since the filing thereof and mcorporated into the Plan are approved in accordance with section 1127(a) of the Bankruptcy Code and Rule 3019(a) of the Bankruptcy Rules. 9 For the avoidance doubt, pursuant to Bankruptcy Rule 3020(c)(1), the following provisions in the Plan are hereby approved and will be effective immediately on the Effective Date without further order or action by the Court, any of the parties to such release, or any other Entity: (i) Debtor Releases (Article VIII.C); (ii) Third Party Releases (Article VIII.D); (iii) Exculpation (Article VIII.E); and (iv) Injunction (Article VII.F); provided, thatthe foregoing provisions of the Plan shall not release the Debtors of (i) any accrued, but unbilled, liabilities under nonresidential real property leases to be assumed under the Plan, without reference to the Effective Date, or (ii) any obligations under indemnification provisions contained in nonresidential real property leases to be assumed under the Plan, without reference to the Effective Date. 10. Except as otherwise provided in the Plan, or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates shall be fully released and discharged, and all of the right, title, and interest WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc 1508 Filed 12/22/20 Page 6 of 20 of any holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the Reorganized Debtors and their successors and assigns. All Holders of Secured Claims are directed to cooperate with the Debtors or the Reorganized Company, as the case may be, in implementing this paragraph and any administrative details relating thereto. 11. The Debtors shall cause to be served a notice of the entry of this Confirmation Order and occurrence of the Effective Date, substantially in the form attached hereto as Exhibit B (the “Confirmation Notice”), upon (i) all parties listed in the creditor matrix maintained by Prime Clerk LLC, (ii) all parties that filed proof§ of claim in these chapter 11 cases, and (iii) such additional persons and entities as deemed appropriate by the Debtors, no later than five (5) business days after the Effective Date. The Debtors shall cause the Confirmation Notice to be published once in the national editions ofeach of The New York Times and USA Today within seven (7) business days after the Effective Date or as soon as reasonably practicable thereafter. No other or further notice of the entry of this Confirmation Order and occurrence of the Effective Date shall be necessary. B. Certain Executory Contract, Unexpired Lease, and Taxing Authority Matters 12. Notwithstanding anything to the contrary contained in the Plan, Plan Supplement, or this Order, no liens shall be granted against Unexpired Leases of non-residential real property and no rights of use or occupancy to such non-residential real property shall be granted pursuant to the Plan, the Exit Facility Documents, and the Exit Term Loan Facility. 13. The Debtors have cured or demonstrated their ability to cure any default with respect to any act or omission that occurred prior to the Effective Date under any of the Executory Contracts or Unexpired Leases proposed to be assumed or assumed and assigned (collectively, the “Assumed Agreements”) within the meaning of section 365(b)(1)(A) of the Bankruptcy Code. Unless otherwise agreed to by the parties, other than with respect to an 6 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 7 of 20 Assumed Agreement that is the subject of an Assumption Dispute or an Adjourned Cure Dispute, the Cure Amounts set forth in the Assumption Schedule are the amounts necessary to “cure” all “defaults” within the meaning of section 365(b) of the Bankruptcy Code under the Assumed Agreements. Other than with respect to an Assumed Agreement that is the subject of an Assumption Dispute, the promise by the Debtors or the Reorganized Company, as applicable, to perform the obligations under their respective Assumed Agreements after the Effective Date shall constitute adequate assurance of their future performance of and under each of their respective Assumed Agreements within the meaning of sections 365(b)(1) and 365(f)(2), as applicable. 14. Upon an agreement between the Debtors and the relevant counterparty to an Executory Contract or Unexpired Lease, Assumption Disputes with respect to issues unrelated to Cure Amounts may be adjourned to a hearing after the Confirmation Hearing (collectively, the “Adjourned Assumption Disputes”). The determination of assumption, assumption and assignment, and/or rejection of the Executory Contracts and Unexpired Leases relating to the Adjourned Assumption Disputes is hereby specifically reserved pending resolution of the relevant Adjourned Assumption Dispute, and any and all rights and claims of the parties with respect to such Executory Contracts and Unexpired Leases, including any and all rights afforded under the Bankruptcy Code and other applicable law, are hereby expressly reserved. i. Brick Property Agreements 1S. 24 New York, LLC seeks to assume the Lease dated May 1, 1983, and as amended and supplemented from time to time, for 193 Chambersbridge Road, Brick, New Jersey, (the “Brick Property”) between Ocean Ice Palace, Inc., as successor Lessor, (“OIP”) and Debtor 24 New York, LLC, as successor Lessee, along with all related rights and documents (collectively, the “Brick Lease”) and to assign the Brick Lease to Work Play Fitness, LLC, (“WPF”), the current subtenant atthe Brick Property pursuant to a Sublease dated August 28, 2018 (the “Sublease”). 24 7 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc 1508 Filed 12/22/20 Page 8 of 20 New York, LLC is also party to a Sale-Purchase Agreement dated October 16, 2017, with WPF (the “Brick Lease Sale Agreement” and, together with the Brick Lease and the Sublease, the “Brick Property Agreements”). OIP has objected to the proposed assumption and assignment of the Brick Lease to WPF (the “OIP Objection’). See Docket No. 1439. The Debtors, OIP, and WPF have agreed to continue the OIP Objection until January 12, 2021. As a result, the determination of assumption, assumption and assignment, and/or rejection of the Brick Property Agreements is hereby specifically reserved pending resolution of the OIP Objection, and any and all rights and claims of the parties with respect to the Brick Property Agreements, including any and all rights afforded under the Bankruptcy Code and other applicable law, are hereby expressly reserved. ii. Mechanic’s and Materialman’s Liens 16. For the avoidance of doubt, the Holder of an Allowed Other Secured Claim arising from the assertion of a mechanic’s lien or materialman’s lien shall retain its Lien(s) associated with such Allowed Other Secured Claim unless and until such Holder (i) receives Cash in an amount equal to the Allowed amount of such Claim or (ii) receives such other treatment sufficient to render such Holder’s Allowed Other Secured Claim Unimpaired, as set forth in Article IL.B.2 of the Plan. For the avoidance of doubt, nothing herein shall be deemed to affect the determination of the existence, extent, validity, or priority of any rights, Liens, or interests— including any mechanic’s or materialman’s liens—asserted or held by any Holder of an Other Secured Claim. iii. Texas Comptroller of Public Accounts 17. Nothing in the Plan or this Confirmation Order discharges or releases the Debtors, Reorganized Debtors or any non-Debtors from any claims or causes of action involving the Texas Comptroller of Public Accounts (the “Texas Comptroller”) or impairs the ability of the 8 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc 1508 Filed 12/22/20 Page 9 of 20 Texas Comptroller to pursue any claims or causes of action against any Debtors, Reorganized Debtors or non-Debtors. All claims and causes of action involving the Texas Comptroller survive the Chapter 11 Cases just as if the cases had not been commenced. As such, they will be paid and determined in the manner and by the administrative or judicial tribunals before which such rights or claims would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced. Without limiting the foregoing, for the avoidance of doubt: (i) the Texas Comptroller is not required to file any claims in the Debtors’ Chapter 11 Cases; (ii) nothing affects or impairs the Texas Comptroller’s ability to make demand on, be paid by, or otherwise pursue any sureties that are liable to the Texas Comptroller on any debts related to the Debtors and/or the Reorganized Debtors; (iii) nothing affects or impairs the Texas Comptroller’s ability to exercise its police or regulatory powers against the Debtors and/or the Reorganized Debtors; (iv) nothng affects or impairs the Texas Comptroller’s rights to assert setoff and recoupment, including contingent or unliquidated rights, against the Debtors and/or the Reorganized Debtors; and (v) nothing contained in the Plan or this Confirmation Order will be deemed to be a waiver or relinquishment of any rights, claims, causes of action, rights of setoff or recoupment, rights to appeal tax assessments, or other legal or equitable defenses that the Debtors and/or the Reorganized Debtors have under non- bankruptcy law in connection with any claim, liability or cause of action of the Texas Comptroller. iv. Local Texas Tax Authorities 18. Notwithstanding anything to the contrary in the Plan or this Confirmation Order, with respect to the Claims of the Texas taxing authorities Frisco ISD, Richardson ISD, Arlington ISD, Eagle Mountain-Saginaw ISD, Crowley ISD, Grapevine-Colleyville ISD, Brazoria County Tax Office, Fort Bend ISD, Fort Bend MUD #167, Fort Bend MUD #161, Fort Bend MUD #050, Fort Bend LID 12, Clear Creek ISD, Friendswood ISD, City of Friendswood, East End District, Spring ISD, Humble ISD, Harris County MUD #132, Cornerstones MUD, Alief ISD, City 9 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 10 of 20 of Houston, Harris County MUD #186, Harris County WCID #145, Pasadena ISD, Spring Branch ISD, Klein ISD, Woodlands Metro MUD, Woodlands RUD #1, Montgomery County MUD #60, Collin County, Collin County Community College District, City of Plano, City of Murphy, City of McKinney, McKinney Independent School District, Denton County, and Williamson County (the “Certain Texas Taxing Authorities”) that arise under the Texas Tax Code (the “Texas Taxing Authority Claims”), (a) to the extent the Texas Tax Code provides for interest and/or penalties with respect to any portion of the Texas Taxing Authority Claims, such interest and/or penalties shall be included in the Texas Taxing Authority Claims, (b) the liens, if any, securing the Texas Taxing Authority Claims shall be retained until the applicable Texas Taxing Authority Claims are paid in full, and (c) the Debtors or the Reorganized Debtors, as applicable, shall pay Allowed Texas Taxing Authority Claims on the later of (i) the date the Texas Taxing Authority Claims become due pursuant to the Texas Tax Code and in the ordinary course of business (subject to any applicable extensions, grace periods, or similar rights under the Texas Tax Code) and (ii) the Effective Date (or as soon as reasonably practicable thereafter). All rights and defenses of the Debtors and the Reorganized Debtors under non-bankruptcy law are reserved and preserved with tespect to such Texas Taxing Authority Claims. The Certain Texas Taxing Authorities’ lien priority, if any, shall not be primed or subordinated by the Exit Term Loan Facility if approved by the Bankruptcy Court in conjunction with the Confirmation of this Plan or otherwise. In the event ofa default in the payment of the Texas Taxing Authority Claims as provided herem, the applicable Certain Texas Taxing Authority shall provide notice to counsel for the Reorganized Debtors, and the Reorganized Debtors shall have twenty (20) days ftom the date of such notice to cure the default. Ifthe default is not cured, the applicable Certain Texas Taxing Authority shall be entitled to pursue collection of all amounts owed pursuant to applicable non-bankruptcy law outside the 10 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 11 of 20 Bankruptcy Court. Failure to pay the 2020 ad valorem taxes prior to the applicable non-bankruptcy law delinquency date shall constitute an event of default only as to the relevant Certain Texas Taxing Authority. In the event that collateral that secures the Claim of one or more of the Certain Texas Taxing Authorities is returned to a creditor holding a Lien that is junior to the Certain Texas Taxing Authorities’ Lien, the Debtors or Reorganized Debtors, as applicable, shall first pay all ad valorem property taxes that are secured by such collateral, to the extent that the Debtors or Reorganized Debtors, as applicable, are liable for such ad valorem property taxes under applicable non-bankruptcy law. The Debtors’ and the Reorganized Debtors’ (as applicable) rights and defenses under applicable law and the Bankruptcy Code with respect to the foregoing, including their right to dispute or object to the Texas Taxing Authority Claims and liens, are fully preserved. 19. Notwithstanding any other provisions herein, with respect to the claims for 2020 ad valorem taxes filed by the Local Texas Tax Authorities (Cypress-Fairbanks ISD, Dallas County, Fairview, Fort Bend County, Frisco, Galveston County, Harris County, Irving ISD, Lewisville ISD, Montgomery County, Rockwall CAD, and Tarrant County ), such claims shall be paid in the ordinary course of business by the Reorganized Debtors, and any claims asserted by the Local Texas Tax Authorities in the Chapter 11 Cases with respect to such 2020 ad valorem taxed shall be deemed waived and withdrawn. Should the 2020 ad valorem taxes not be paid timely pursuant to applicable non-bankruptcy law, the Local Texas Tax Authorities shall be entitled to such interest and penalties as would ordinarily accrue under state law. The Local Texas Tax Authorities shall retain their liens until the taxes are paid in full with the same validity, extent and priority as existed upon the Petition Date. The Local Texas Tax Authorities may proceed to collect all unpaid amounts owed with respect to 2020 ad valorem taxes pursuant to applicable non- bankruptcy law without further recourse to this Court. 11 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 12 of 20 20. Notwithstanding anything to the contrary in the Plan or this Confirmation Order, the State of Washington Department of Revenue shall receive, on the account of its Allowed General Unsecured Claims, if any, the GUC Cash Recovery, as set forth in Article IIIB of the Plan. For the avoidance of doubt, nothing in this Confirmation Order shall be construed to affect the distribution, if any, under Article II of the Plan to the State of Washington Department of Revenue on account of any Allowed Priority Tax Claims. C. Certain Governmental Matters 21. Notwithstanding any provision to the contrary in the Plan, the Plan Supplement, this Order, or documents that implement the Plan, the Plan Supplement, or this Order (collectively, the “Plan Documents”): (a) As to the United States, nothing in the Plan Documents shall: (1) discharge, release, enjoin, impair or otherwise preclude (a) any liability to the United States that is not a “claim” within the meaning of section 101(5) of the Bankruptcy Code (a “Section 101(5) Claim”), (b) any Section 101(5) Claim of the United States arising after the Confirmation Date, or (c) any liability of any entity or person under police or regulatory statutes or regulations to any Governmental Unit (as defined by section 101(27) of the Bankruptcy Code) as the owner, lessor, lessee or operator of property or rights to property that such entity owns, operates or leases after the Confirmation Date; (2) release, nullify, preclude, or enjoin the enforcement of any police or regulatory power; (3) modify the scope of section 502 of the Bankruptcy Code with respect to the Section 101(5) Claims of the United States, including, but not limited to, the provisions of section 502 of the Bankruptcy Code pertaining to the estimation of claims; (4) cause an amended Section 101(5) Claim of the United States to be disallowed or expunged pursuant to the Plan solely because the United States did not obtain the prior authorization of the Bankruptcy Court to file the Section 101(5) Claim if such claim would otherwise be Allowed pursuant to the Bankruptcy Code, to the 12 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 13 of 20 extent such amended Section 101(5) Claim was timely filed, the Federal Rules of Bankruptcy Procedure, or applicable law, without prejudice to the right of the Debtors and the Reorganized Debtors, as applicable, to object to any Section 101(5) Claim of the United States on any appropriate grounds; (5) authorize the sale, assignment, or other transfer to any non-Debtor third party of any federal (i) grants, (i) grant funds, (iii) contracts, (iv) property, cluding but not limited to, intellectual property and patents, (v) leases, (vi) agreements, or other interests of the federal government (collectively, the “Federal Interests”) without compliance by the Debtors and the Reorganized Debtors, as applicable, with all terms of the Federal Interests and with all applicable non-bankruptcy law; (6) be interpreted to set cure amounts or to require the United States to novate, approve, or otherwise consent to the assumption, transfer, or assignment of any Federal Interests; (7) authorize the transfer or assignment to any non-Debtor third party of any federal governmental (i) license, (ii) permit, (iti) registration, (iv) authorization, or (v) approval, or the discontinuation of any obligation thereunder, without compliance with all applicable legal requirements, obligations, and approvals under non-bankruptcy laws; (8) waive, alter, or otherwise limit the United States’ property rights with respect to the Federal Interests, including, but not limited to, inventory, patents, intellectual property, licenses, and data; (9) release, exculpate, enjoin, impair, or discharge any non-Debtor from any Section 101(5) Claim, liability, suit, right or Cause of Action of the United States; (10) affect any setoff or recoupment rights of the United States, and such rights are hereby preserved; (11) require the United States to file an Administrative Claim in order to receive payment for any liability described in section 503(b)(1)(B) and (C) pursuant to section 503(b)(1)(D) of the Bankruptcy Code with respect to any such Administrative Claim arising in the ordinary course of business; (12) be construed as a compromise or settlement of any liability, claim, Cause of Action or interest of the United States 13 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 14 of 20 with respect to the U.S. Equal Employment Opportunity Commission; (13) be deemed to be a waiver of any right, interest, dividends, or accruals on Plan distributions to which the United States would be entitled under the Bankruptcy Code; or (14) require Section 101(5) Claims arismg from the rejection of an Executory Contract or Unexpired Lease relating to Federal Interests (collectively, the “Federal Rejection Damages Claims”) (a) to be filed by a deadline other than the later of (i) the Governmental Bar Date (as defined in the Claims Bar Date Order) or (ii) thirty (30) days after the effective date of the rejection of such Federal Interest or (b) alter the treatment of such Federal Rejection Damages Claims under the Bankruptcy Code. (b) Validly perfected Liens securing Section 101(5) Claims of the United States to the extent provided by section 506 of the Bankruptcy Code shall be retained until the relevant Section 101(5) Claim, with interest as provided by applicable non-bankruptcy law, to the extent such interest and penalties are allowed pursuant to the Bankruptcy Code and applicable law, is paid in full Administrative Claims of the United States Allowed pursuant to the Plan or the Bankruptcy Code shall accrue interest and penalties as provided by non-bankruptcy law until paid in full, to the extent such terest and penalties are allowed pursuant to the Bankruptcy Code and applicable law. Priority Tax Claims of the United States Allowed pursuant to the Plan or the Bankruptcy Code will be paid in accordance with Section 1129(a)(9)(C) of the Bankruptcy Code. To the extent the Priority Tax Claims of the United States (including any penalties, interest, or additions to tax entitled to priority under the Bankruptcy Code) are Allowed pursuant to the Bankruptcy Code or the Plan and are not paid in full in cash on the Effective Date, then such Priority Tax Claims shall accrue interest commencing on the Effective Date at the rate set forth in section 511 of the Bankruptcy Code. 14 WEIL:\97764464\1\78028.0003 Case 20-11558-KBO Doc1508 Filed 12/22/20 Page 15 of 20 D. Exit Term Loan Facility 22. The Debtors and Reorganized Debtors are hereby authorized to enter into, and take such actions as necessary or desirable to perform under the Exit Term Loan Facility and, in each case, all documents or agreements related thereto, including the payment or reimburse ment of any fees, indemnities and expenses under or pursuant to any such documents and agreements in connection therewith. Except as otherwise provided in paragraph 12 hereof, upon the closing of the Exit Term Loan Facility, the lenders thereunder shall have valid, binding, perfected and enforceable Liens on the collateral specified in the Exit Facility Documents with the priority set forth in the Exit Facility Documents, and subject only to such Liens and security interests as may be permitted under the Exit Facility Documents, and the Debtors and Reorganized Debtors are hereby authorized to make a