SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 8-K/A
AMENDMENT NO. 1
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 22, 1996
NORTH AMERICAN ENERGY OF DELAWARE, INC.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 0-85818 95-3111611
- - --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
555 MADISON AVENUE
22ND FLOOR
NEW YORK, NEW YORK, 10022
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (212) 980-5050
--------------
The purpose of this Amendment is to file Exhibit A to the Form 8-K
filed on December 9, 1996.
Exhibit Index on Page 3
Page 1 of 54
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTH AMERICAN ENERGY OF DELAWARE, INC.
Date: December 10, 1996 By: /s/ R.L. Burke
------------------------------------
Raymond L. Burke
President
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EXHIBIT INDEX
-------------
Exhibit Description Page
- - --------------------------------------------------------------------------------
A Disclosure Statement for the
Debtor's Plan of Reorganization 4
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - ------------------------------------x
In re: Chapter No. 11
NORTH AMERICAN ENERGY OF 96 B. 44434. (JHG)
DELAWARE, INC.,
Debtor. TIN: 95-3111611
- - ------------------------------------x
================================================================================
THIS IS NOT A SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE
PLAN. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL A
DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY
COURT. THE DISCLOSURE STATEMENT IS BEING SUBMITTED FOR
APPROVAL, BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.
================================================================================
DISCLOSURE STATEMENT FOR THE DEBTOR'S
PLAN OF REORGANIZATION
BALLON STOLL BADER & NADLER, P.C.
1450 Broadway
New York, New York 10018-2268
212.575-7900
Fax 212.764-5060
ATTORNEYS FOR DEBTOR AND DEBTOR - IN - POSSESSION
NORTH AMERICAN ENERGY OF DELAWARE, INC.
Page 4 of 54
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Table of Contents
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Page
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I. DEFINITIONS.............................................................3
II. PRELIMINARY STATEMENT...................................................3
III. RETENTION OF PROFESSIONALS .............................................4
A. Counsel to the Debtor...............................................4
B. Securities Consultant...............................................4
C. Creditors Committee.................................................5
IV. REPRESENTATIONS AND SCOPE OF STATEMENT .................................5
V. DESCRIPTION OF THE DEBTOR'S OPERATION...................................5
A. The Debtor's History................................................5
B. Financial Information...............................................6
C. Corporate Structure and Ownership...................................6
D. Officers and Directors..............................................6
E. Litigation..........................................................7
VI. DESCRIPTION OF THE PLAN, THE MERGER AND THE PARTICIPANTS................7
A. Introduction........................................................7
B. The Merger and the Reorganized Debtor...............................7
VII. CLASSIFICATION AND TREATMENT OF CLAIMS AND STOCK INTERESTS ...........13
C. CLASS 1 Claims.....................................................14
D. CLASS 2 Claims.....................................................15
E. CLASS 3 Claims.....................................................15
F. CLASS 4 Claims.....................................................16
G. Court Approval and Adjustment of Shares............................16
VIII. SECURITIES ISSUED TO CREDITORS ........................................17
IX. MEANS FOR THE EXECUTION OF THE PLAN....................................19
X. FULL AND FINAL SATISFACTION............................................19
XI. METHOD FOR DETERMINATION OF ALLOWED CRAMDOWN...........................20
XII. VOTING, IMPAIRMENT, CONFIRMATION AND CRAMDOWN..........................20
A. Voting.............................................................20
B. Confirmation Without Acceptance by All Impaired Classes, or
"Cramdown".........................................................21
B. The Confirmation Hearing...........................................21
XIII. DISCUSSION OF COMPARATIVE RECOVERIES, AND ALTERNATIVES TO PLAN,
LIQUIDATION ANALYSIS COMPARISON TO ALTERNATIVE PLANS ..................22
XIV. TAX CONSEQUENCES ......................................................23
XV. RETENTION OF JURISDICTION..............................................23
i
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - ---------------------------------------x
In re: Chapter No. 11
NORTH AMERICAN ENERGY OF 96 B. 44434 (JHG)
DELAWARE, INC.,
Debtor. TIN: 95-3111611
- - ---------------------------------------x
DISCLOSURE STATEMENT FOR
THE DEBTOR'S PLAN OF REORGANIZATION
INTRODUCTION
This Disclosure Statement ("Disclosure Statement") is being provided
by North American Energy of Delaware, Inc. the debtor and debtor-in-possession
("Debtor"), pursuant to the provisions and requirements of Section 1125(b) of
the Bankruptcy Code, to those known holders of a claim or interest who are
entitled to vote on the confirmation of the Plan of Reorganization (the
"Plan")(Exhibit 1) proposed by the Debtor, in order to disclose adequate
information, deemed to be material, important and necessary for the Debtors's
creditors to make an informed judgment and an informed decision in exercising
their right to vote on the Plan.
Along with this Disclosure Statement, you will receive a copy of the
proposed Plan, a Ballot and a Notice fixing a date for a hearing on the
confirmation of the Plan.1/ Annexed to this Disclosure Statement are the
following exhibits:
Exhibit l.: Debtor's Plan of Reorganization.
Exhibit a.: Unaudited pro forma Balance Sheet as of
- - --------------------
1/ It is the Debtor's intention to confirm the Plan without soliciting
votes from any, creditors other than the Class 3 Creditors. The Debtor
believes that the Plan may be confirmed by cramdown under Section 1129(b)
of the Bankruptcy Code over the rejection of any class of creditors voting
against the Plan. In light of the provisions of the Small Business Chapter,
which election the Debtor has made, 11 U.S.C. sections 1121(e), and the
Debtor's intention not to solicit votes, the Debtor will request that a
confirmation hearing on the Plan be set for the same date as the hearing to
consider approval of the Disclosure Statement.
Disclosure Statement Page 1
Page 6 of 54
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June 30, 1996 showing the effects of the merger
described herein and the subsequent issuance by the
Reorganized Debtor for shares of its Common Stock in
exchange for its outstanding debt and trade payables as
described herein as if both events occurred on such
date.
Exhibit b.: Reserved.
Exhibit c.: Liquidation Analysis.
Exhibit d.: Debtor's Securities and Exchange Commission
Form 10-K, dated June 7, 1996, for the fiscal year
ended March 31, 1996, and Form 10-Q dated July 25,
1996 for the fiscal quarter ended June 30, 1996.
Exhibit e.: Unaudited financial statements of Alliance for
the Years Ending March 31, 1994, 1995 and 1996.
Exhibit f.: Unaudited balance sheet and statement of
income and retained earnings for the three months
ending June 30, 1996.
The Bankruptcy Court has scheduled a hearing confirmation of the
Plan. The date, time and place of the hearing will be found in the "Notice
Fixing a Date for a Hearing on Confirmation", which accompanies this Disclosure
Statement. The creditors may vote on the Plan by completing and mailing the
enclosed ballot to the attorneys for the Debtor,
BALLON STOLL BADER & NADLER, P.C.
14th FLOOR
1450 BROADWAY
NEW YORK, NEW YORK 10018-2268
ATTN: Dwight Yellen
In order for the Plan to be accepted and thereafter confirmed, ("Confirmation"),
at least two thirds (2/3) in amount and more than one-half (1/2) in number of
allowed claims of each class of creditors who vote and who are impaired under
the Plan must cast their vote for the acceptance of the Plan.
A CREDITOR WHO DOES NOT VOTE FOR THE ACCEP
TANCE OR REJECTION OF THE PLAN WILL NOT COUNT
IN THE OUTCOME OF THE PLAN'S ACCEPTANCE.
THIS DISCLOSURE STATEMENT IS THE ONLY AUTHO-
RIZED STATEMENT WITH RESPECT TO THE PLAN. NO
OTHER REPRESENTATIONS CONCERNING THE DEBTOR,
Disclosure Statement Page 2
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ITS OPERATIONS OR THE VALUE OF ITS PROPERTY
HAVE BEEN AUTHORIZED BY THE PROPONENTS OF THE
PLAN. ANY REPRESENTATIONS OR INDUCEMENTS MADE
TO OBTAIN YOUR ACCEPTANCE WHICH ARE OTHER THAN
OR INCONSISTENT WITH THE INFORMATION CONTAINED
HEREIN SHOULD NOT BE RELIED UPON BY YOU IN
ARRIVING AT YOUR DECISION. THIS DISCLOSURE
STATEMENT HAS BEEN APPROVED BY ORDER OF THE
BANKRUPTCY COURT. SUCH APPROVAL BY THE BANKRUPTCY
COURT DOES NOT CONSTITUTE A RECOMMENDATION BY THE
COURT AS TO THE PLAN'S MERITS.
IN THE EVENT OF ANY INCONSISTENCY, AMBIGUITY
OR CONFLICT BETWEEN THIS DISCLOSURE STATEMENT
AND THE PLAN, THE PLAN SHALL CONTROL.
The Debtor and its counsel have prepared the Plan and
submit that the Plan is in the best interest of Creditors generally,
and recommend acceptance of the Plan by those Creditors who vote. It
is the belief of the Debtor that if the Plan is denied Confirmation,
unsecured Creditors will receive less than they will receive under the
Plan. This Disclosure Statement has been approved by the Court as
containing information of a kind and in sufficient detail that will
enable Creditors to make an informed judgment about the Plan, and the
proponents have been authorized to use this Disclosure Statement in
connection with the solicitation of ballots on the Plan. At a hearing
on confirmation, the Court will consider whether the Plan is feasible,
and whether it is in the best interests of the Creditors.
I. DEFINITIONS
For the purposes of this Disclosure Statement, the terms
used herein shall be defined as they are defined in Article I of the
Debtor's Plan of Reorganization.
II. PRELIMINARY STATEMENT
This case was commenced by the filing of a voluntary
Petition on August 19, 1996. On or about August 21, 1996, pursuant to
11 U.S.C. sections 101(51C) and 1121(e), the Debtor made an election
to be treated as a Small Business under the Bankruptcy Code. Briefly,
as described in greater detail herein and in the Plan, on the
Effective Date, the Debtor will merge into ORA Electronics, Inc., a
Delaware corporation ("ORA"). Immediately prior to the Effective Date,
Alliance Research Corporation, a California Corporation ("Alliance"),
will affect its reincorporation into Delaware by merger into ORA. ORA
will be the surviving corporation of such merger and will succeed to
Disclosure Statement Page 3
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all of Alliance's assets and liabilities pursuant thereto and will
conduct Alliance's business, which is described herein, thereafter.
The present management of Alliance will become the management of ORA
and will continue as the management of the Reorganized Debtor
following the Effective Date. References herein to "ORA" shall be
deemed to include Alliance prior to the reincorporation into ORA
unless the context otherwise requires. The current officers and
management of the Debtor will resign. The Creditors and Stock
Interests will share in Securities of the Reorganized Debtor which are
contemplated to be freely tradeable to the extent provided by
applicable law.
III. RETENTION OF PROFESSIONALS
A. Counsel to the Debtor. At the commencement of the
case the Debtor was represented by the firm of Ballon Stoll Bader
& Nadler, P.C. as counsel, which retainer the Court approved on
August 29, 1996, effective NUNC PRO TUNC August 19, 1996). Ballon
Stoll Bader & Nadler, P.C. received a retainer for debt counseling
and a retainer for the preparation of the Chapter 11 petition
herein. The total payments to Ballon Stoll Bader & Nadler, P.C.
were $10,000. Ballon Stoll Bader & Nadler, P.C. has agreed to be
compensated for the balance of its fees by Securities as set forth
herein.
B. Securities Consultant. With an eye toward providing
creditors with an alternative to receiving a nominal cash dividend
from the orderly liquidation of its assets, the Debtor retained with
Court approval, DLS Financial Services, Inc. ("DLS") of Dallas, Texas
as a securities consultant. The Debtor has been advised that DLS has
assisted other Chapter 11 debtors in finding merger or acquisition
partners for the purpose of acting as a proponent of a plan of
reorganization and, upon confirmation, assisting the reorganized
debtor in issuing publicly traded securities. Mr. Robert Geber,
Secretary of the Debtor, and the wife and children of Mr. Raymond L.
Burke, President and CEO of the Debtor, own a small number of publicly
traded shares of the common stock of the parent of DLS.
DLS has been retained, which retainer was denied by the
Court on September 17, 1996 without prejudice to renewal at the
hearing on confirmation of the Plan, on a contingency-fee basis to
assist the Debtor in proposing its Plan of Reorganization and, upon
confirmation, in merging with the proponents of the Plan and issuing
securities which will be available to creditors in lieu of a cash
dividend. DLS will be treated as an administrative creditor in the
Plan and will be paid by receiving stock in the reorganized Debtor. In
the event the Plan of Reorganization is not confirmed, DLS will
receive no compensation whatsoever.
Disclosure Statement Page 4
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C. Creditors Committee. Pursuant to section 1102(a)(3)
of the Bankruptcy Code, no creditors committee has been appointed.
IV. REPRESENTATIONS AND SCOPE OF STATEMENT
The information contained herein relating to ORA has been
obtained by the Debtor from the management of Alliance. The Debtor has
no reason to believe that the information contained herein relating to
ORA is incomplete or inaccurate but does not make any representations
with respect thereto.
V. DESCRIPTION OF THE DEBTOR'S OPERATION
A. The Debtor's History.2/ North American Energy of
Delaware, Inc. incorporated under the laws of the State of Delaware
on June 8, 1972 under the name "The Investing Professional, Inc."
After several name changes and alterations in business direction,
in 1986, the Debtor changed its name to its current name.
During the fiscal year ended March 31, 1987, the Debtor
raised approximately $480,000 in a private placement of 2,127,500 of
its common shares and contributed $400,000 in cash and 1,000,000
restricted shares of the Debtor's common stock to Canyon Pipeline
Corporation ("Canyon") and Worldwide Petroleum Corporation
("Worldwide") in return for a 49% interest in each company. The Debtor
wrote off its entire investment in these two companies as of March 31,
1987. During the year ended March 31, 1989, a settlement was reached
in which the Debtor's investments in Canyon and Worldwide were
exchanged for the 1,000,000 shares of the Debtor's stock held by
Canyon and Worldwide. The Debtor subsequently canceled these shares.
In 1991, the Debtor agreed to acquire from Mica Minerals,
Inc., a Texas corporation, certain vermiculite deposits in Llano
County, Texas. The Agreement provided for the issuance to Mica
Minerals, Inc., shares in a subsidiary of the Debtor that would be
convertible into a controlling interest in the Debtor. The transaction
never received the necessary funding or the approval of the Debtor's
stockholders and, after several postponements and extensions of the
closing date, the transaction was deemed abandoned. No further public
announcement or filing was ever made. A dispute ensued and on March 9,
1994, the Board of Directors decided it would be in the best future
interest of the Debtor to settle any dispute with Mica Minerals, Inc.
of Texas regarding the agreement that was entered into in January,
1991, surrounding the vermiculite deposits in Llano County, Texas. The
settlement called for payment of $5,000 in cash at closing and the
- - ---------------
2/ Further historic details on the Debtor are set forth in
Exhibit D hereto.
Disclosure Statement Page 5
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issuance of 500,000 restricted common shares of the Debtor when
additional shares became available.
B. Financial Information. In the fiscal years ended March
31, 1996, 1995, 1994, 1993 and 1992, the Debtor was involved in the
negotiation of various acquisitions. THE DEBTOR HAS HAD NO OPERATING
REVENUES FOR THE FOUR YEARS ENDED MARCH 31, 1996. Expenses incurred
during those periods consisted primarily of consulting fees, legal and
accounting fees, interest expense and general and administrative
expenses. Liabilities arising from such expenses have been satisfied
through officer loans, settled through stock issuance or written off
due to statutory limitations. In consideration of such activities, the
Board of Directors has committed for issuance 2,380,920 shares of the
Debtor once duly authorized.
C. Corporate Structure and Ownership. The Debtor is a
publicly traded Delaware corporation which, as of March 31, 1996, had
14,995,099 outstanding shares. Details concerning the number of
shareholders, trading information and other matters are set forth in
the Debtor's SEC Form 10-K annexed hereto as Exhibit D.
D. Officers and Directors. DAVID ROSENBERG, CHAIRMAN.
Mr. Rosenberg, age 85, has been a Director of the Debtor since 1981 and
President until June, 1992. Mr. Rosenberg, a Chartered Financial
Analyst, was formerly Vice-Chairman of the investment arm of the
Schroder Banking group. Prior to that he was a senior partner of the
investment firm of Naess & Thomas (sold to Schroders Ltd., 1969).
Prior to that time he was a senior analyst and economist with Goldman,
Sachs & Co.
RAYMOND L. BURKE, PRESIDENT AND CEO. Mr. Burke, age 53,
has, been President and CEO of the Debtor since 1992. Mr. Burke is
also President and CEO of Horowitz/Rae Holdings, Inc., which is the
parent company of Horowitz/Rae Book Manufacturers, Inc. Horowitz/Rae
is one of the largest privately owned integrated book manufacturers in
the country today.
ROBERT GEBER, SECRETARY. Mr. Geber, age 59, became
Secretary of the Debtor effective April, 1996. He is currently
Executive Vice-President and Treasurer of Horowitz/Rae Holdings,
Inc., the parent company of Horowitz/Rae Book Manufacturers, Inc.
Prior to 1992, Mr. Geber was President of Jersey Transport, Inc.,
a transport company. Mr. Geber served as Senior Operations Vice-
President of Alexanders, Inc., a multi-million dollar retailing
operation, for approximately 20 years.
COMPENSATION. The Debtor has not paid any cash
compensation, bonuses or deferred compensation to its officers and
directors and has no pension or other employee benefit plans for
the fiscal years ended March 31, 1994, 1995 and 1996.
Disclosure Statement Page 6
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E. Litigation. There are currently no active or pending
legal proceedings against the Debtor.
VI. DESCRIPTION OF THE PLAN, THE MERGER AND THE PARTICIPANTS
THE FOLLOWING IS ONLY A SUMMARY OF THE PLAN.
CREDITORS ARE URGED TO READ THE PLAN IN FULL AND
TO CONSULT WITH COUNSEL AS TO ITS CONTENT. THE
PLAN REPRESENTS A PROPOSED AGREEMENT BETWEEN THE
DEBTOR AND ITS CREDITORS WHICH, IF FINALLY
CONFIRMED, WOULD BE LEGALLY BINDING.
A. Introduction. The Plan provides for payment in full
to priority creditors from the cash on hand maintained by the
Debtor. Certain administrative Creditors, unsecured Creditors and
Stock Interests will receive Securities in the Reorganized Debtor.
B. The Merger and the Reorganized Debtor. On the Effective
Date, the Debtor will merge into ORA. The present management of ORA
will continue as the management of the Reorganized Debtor. The current
officers and management of the Debtor will resign. The authorized
stock of the Reorganized Debtor will be 30,000,000 shares of Common
Stock, $.001 par value, and 5,000,000 shares of preferred stock, $.001
par value. The Securities provided for in the Plan will be issued by
the Reorganized Debtor to the Claimants as contemplated thereby, and
the Reorganized Debtor will commit to reserve a sufficient number of
shares of Common Stock to meet its obligation to issue such shares
upon the exercise of Warrants. The current shareholders of Alliance
will hold 5,000,000 shares of Common Stock as of the Effective Date.
Immediately following the Effective Date, ORA intends to
issue shares of its Common Stock for payment in full for all of the
outstanding principal and accrued interest under three promissory
notes held by an unaffiliated third party. Such payment will be made
on the basis of one share for every $5.00 of debt. As of August 31,
1996, there was an aggregate of approximately $4,276,087 in principal
and accrued interest outstanding under the three promissory notes.
Hence, as of such date, approximately 855,220 shares of Common Stock
would have been issued in payment for such debt. Interest accrues
under the three promissory notes at the aggregate rate of $832 per
day. Consequently, the actual number of shares to be issued in payment
for such debt will depend on when the payment is made. The holder of
the promissory notes has also agreed to convert $1.5 million in trade
payables into 300,000 shares of Common Stock at a conversion rate of
$5.00 per share.
ORA intends to adopt a stock option plan for its
employees, consultants and directors in the near future. Following the
Effective Date, ORA will be free to issue additional shares of
Disclosure Statement Page 7
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its Common Stock, from time to time, at the discretion of its Board of
Directors. Prior to such date, ORA may distribute, in the form of
debt, its S corporation retained earnings, if any, to its sole
shareholder. As part of the reincorporation of Alliance in Delaware
pursuant to its merger into ORA as described herein, ORA will grant
registration rights to its sole shareholder which permit, under
certain circumstances, such shareholder to cause ORA to register
shares of Common Stock held by such shareholder under the Securities
Act of 1933, as amended, and applicable state securities statutes and
for such shareholder to participate in such registrations initiated by
ORA.
ORA. BUSINESS DESCRIPTION. ORA (sometimes referred to
hereafter as the "Company") is a supplier of telecommunications
equipment. Its unaudited net sales for its fiscal year ended March 31,
1996, were approximately $24.5 million with estimated pre-tax losses
of approximately $521,000. Such amounts may be subject to adjustments
pursuant to the audit of the Company's financial statements for its
fiscal year ended March 31, 1996 by the Company's outside auditors.
Its unaudited net sales for the three months ended June 30, 1996 were
approximately $2.3 million with estimated pre-tax losses of
approximately $3.6 million. Such amounts are subject to year end
adjustments. ORA currently markets more than 2,000 products, including
battery packs, battery eliminators, power cords, hands-free car
speaker phone adapters ("hands-free kits"), antennas, mounts and
battery quick-chargers. It operates from an 80,090 square foot
facility in Chatsworth, California, and employs approximately 85
employees.
MANUFACTURING. ORA outsources the actual manufacturing of
most of its product lines, using contract manufacturers and "bid"
manufacturing. It has a long-standing sourcing arrangement with a far
east trading company which has created procurement and manufacturing
arrangements for both contract and "bid" goods manufacturing. Contract
manufacturers located in the United States, Taiwan, Korea and China
are used to manufacture proprietary products such antennas, hands-free
kits, battery quick-chargers, battery packs and several connectivity
products. "Bid" goods manufacturing is used primarily for commodity
type products. ORA maintains quality assurance and inspection systems
both in its receiving facilities in the United States and on-site in
the countries where its products are manufactured.
HISTORY. Alliance was incorporated in California in 1979,
as the successor to the business of a small specialty supply house
operating since 1974 under the name "ORA Electronics." Alliance's
original customers were service retailers and repair centers having
difficulty obtaining replacement parts for repair work. Alliance was
an early user of direct mail marketing, mailing catalogs to virtually
every electronic service organization and retailer in the United
States. By 1980, Alliance was mailing a catalog quarterly to over
100,000 businesses.
Disclosure Statement Page 8
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MARKETING. ORA handles all design, packaging, and
marketing internally, including advertising design and production,
product photography, line brochures, packaging, catalogs and
specialized customer services, including complete planogram service,
co-operative advertising programs, store merchandising, in-store
displays, customer-specific collateral material, ad slicks, clip art
services, semi-private labeling, private label catalogs, mail inserts,
and trade show participation.
CERTAIN INVESTMENT CONSIDERATIONS. ORA has sustained
substantial net losses in its fiscal year ended March 31, 1996 and for
the quarter ended June 30, 1996. In reviewing the unaudited financial
statements for such periods attached to this Disclosure Statement, it
should be noted that during such periods ORA was taxed as an "S"
corporation and therefore did not pay federal or state income taxes
(although state corporation taxes in California were paid). If the
Company were a C corporation, some of such losses would have been
offset by the value of tax loss carry back or forward.
The reader should read the attached financial statements,
including the notes thereto where applicable, in their entirety. In
doing so, the reader should note that ORA has loaned money to one of
its officers and should be aware that the loan secured by the property
on which ORA's headquarters is located is, by its terms, callable by
the lender. As of March 31, 1996, the outstanding principal balance of
such loan was approximately $4.7 million. In addition, as of March
31, 1996, the Company was not in compliance with certain covenants,
related to tangible net worth and debt to equity ratios, under its
line of credit facility. The Company is currently negotiating with the
lender for a waiver of such covenants. No assurances can be given that
such waiver can be obtained. The reader should also note that, as of
March 31, 1996, ORA's trade accounts receivable and net sales were
concentrated with a single customer.
RESEARCH, AND DEVELOPMENT. ORA has an in-house research
and development engineering staff, and in early 1994, acquired a
product development group which tripled the size of its research
staff. ORA maintains extensive research and test facilities (including
an anechoic chamber) at its corporate headquarters, allowing it to
conduct such sophisticated operations as testing radiation patterns
for antennas and ensuring product safety with in-house facilities.
QUALITY CONTROL. All products are thoroughly tested. ORA
is operating under the ISO 9001 quality standards and is currently
seeking certifications under these standards. Many of the products
carry UL listings and FCC approvals.
Disclosure Statement Page 9
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INTELLECTUAL PROPERTY. ORA owns over 30 issued patents in
the United States and a number of foreign patents on its various
products. It also owns over 15 trademark registrations. In addition,
the Company applied for and its individual managers hold numerous
United States and foreign patents, and are applying for additional
ones at the present time. Further, ORA is currently developing
proprietary data transfer protocols and bus interfacing systems, both
hardware and software, for which patent and copyright protection have
been sought. There can be no assurances that such protocols and
systems can be successfully developed or that such patent and
copyright protection can be obtained. Trademark clearance and filings
for new products and systems are being made concurrently with project
development in consultation with the marketing department.
MAJOR CUSTOMERS. ORA services many of the largest and
most respected mass merchandisers and retailers in the United
Slates, including:
Brandsmart
Circuit City
The Good Guys
Nobody Beats the Wiz
Office Max
Pep Boys
Service Merchandise
Staples
Tandy Corporation
In addition, ORA provides products for resale by many major service providers,
including:
AirTouch
Bell Atlantic
Cellular One
GTE
Houston Cellular
Pittsburgh Telephone
Rochester Telephone
ORA is also a supplier to various equipment manufacturers, including:
Mitsubishi
Motorola
NEC
Nissan
Disclosure Statement Page 10
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ORA also serves smaller dealers through a network of regional distributors,
including:
All American Distributing
Communication Associates
Ingram-Micro
Merisel
Tessco
Unplugged
PRODUCT HIGHLIGHTS. ORA has made a significant
commitment to innovation through its research and development
group. ORA is bringing many significant new products on line.
Among its major new products are the following:
PARALINK PRO(R) A product which is currently being introduced
- - -------- to the market is the Paralink Pro. This
product is an intelligent printer sharing
network directed toward the home office and
consumer markets. The system is completely
external, in that it does not require opening
of the PC to be installed and it features very
high speed and a user friendly interface. All
nodes are connected by a standard modular
telephone cord. The Paralink Pro was designed
for Windows applications.
DIGITAL HANDS
FREE SPEAKERPHONE Hands free operation of cellular phones in
- - ----------------- moving vehicles is recommended for safety.
ORA Electronics Digital Hands Free kits are
designed to be installed in vehicles by
professional installers. They feature an
independent speaker, a high performance
external microphone, and a Thru Glass(R)
antenna. This product was re-released in
January 1995 after being upgraded to work with
digital telephones.
TRAVELTALK(TM) This model is built into a cigarette lighter plug for
- - ---------- ultimate convenience and portability. It does not
require permanent installation and can be transferred
from car to car. This product is priced at under $100.00
retail.
PERSONAL
HANDS FREE The personal hands free is a low cost entry
- - ---------- level portable hands free. It utilizes an
earphone/microphone combination and is simply
Disclosure Statement Page 11
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plugged into the bottom of the phone. The
unit can be used outside a vehicle as it is
battery operated and very light.
DELCO ELECTRONICS
PROJECT TELECAR(TM) In June 1995, Delco Electronics and ORA,
- - --------------- Electronics entered into an agreement to
jointly develop three types of cellular
telephone gateway interfaces for the new
generation of vehicles featuring data buses
instead of the normal wiring. Under the
agreement, both ORA Electronics and Delco will
be able to market it's product through their
own marketing channels.
Cellular Data/Link The Cellular Telephone Data/Link ("CDL") is a
- - ------------------ device which has already gained enough
industry interest to be noted by the
Department of Commerce in its U.S. Industrial
Outlook 1994 publication as a significant
product in U.S. market trends for cellular
equipment. Additionally, the product was
selected as "one of the most innovative
consumer electronics products of 1994" by the
Innovation '94 Design and Engineering Honors
Program, a review group endorsed by the
Industrial Design Society of America.
CDL allows modems (including all those commonly
used on micro-computers) to communicate using
cellular telephones. Although several companies
have developed similar technologies (notably
Telular Corporation), ORA has marketed a small,
battery operated unit which connects to multiple
cellular phone models at a price attractive
to the mass market.
CERTAIN LITIGATION. ORA filed suit in 1994 in Federal
District Court seeking a declaratory judgment that certain patents
held by Telular Corporation ("Telular") are invalid or, even if valid,
CDL does not infringe them. Telular counter-claimed, contending that
its patents are valid and that CDL infringes on such patents. In early
1996, the District Court granted Telular's motion for partial summary
judgment against ORA determining that Telular's patents are valid and
that CDL infringes such patents and permanently enjoining ORA from
further sales of CDL. However, the Company has appealed the District
Court's opinion to the United States Ninth Circuit Court of Appeals.
The Company filed a motion in such Circuit requesting a stay of the
permanent injunction pending such appeal. The Federal Circuit Court
granted the motion in part. The Federal Circuit Court lifted the
injunction with respect to the Motorola compatible CDLs. The Company
does not expect the Federal Circuit Court to rule on its appeal until
the first half of 1997.
Disclosure Statement Page 12
Page 17 of 54
<PAGE>
Given that its appeal is still pending, ORA is unable to
predict the outcome of the proceedings with respect to the patents.
Possible outcomes could range from no liability or injunction being
imposed on ORA to the payment by ORA to Telular of potentially
material damages and costs and ORA being enjoined from all future CDL
sales or non-Motorola sales. ORA intends to vigorously continue
contesting Telular's claims.
CDLs accounted for approximately $1,170,000 and $211,000,
or 4.6% and 0.88% of ORA's net sales, in its fiscal years ended March
31, 1995 and 1996, respectively. Of such amounts, approximately
$1,045,000 and $180,000 (or 4.1% and 0.75% of ORA's total net sales)
were from Motorola compatible CDLs. Sales in fiscal year 1996 were
impacted by the injunction discussed above.
VII. CLASSIFICATION AND TREATMENT OF CLAIMS AND STOCK INTERESTS
Pursuant to Section 1124 of the Bankruptcy Code, classes
of claims or interests that are impaired,3/ as that term is defined in
the Bankruptcy Code, have a right to vote with respect to the Plan,
and classes or interests that are not impaired do right have the right
to vote on the Plan. Pursuant to Section 1124 of the Bankruptcy Code,
a class is impaired unless the Plan leaves unaltered the legal,
equitable and contractual rights to "which such claim or interest
entitles the holder of such claim or interest," or where a default has
occurred, the Plan provides for the cure of such default, reinstates
the maturity of the claim as it existed before the default,
compensates the claimant for damages incurred as result and does not
otherwise alter the legal, equitable or contractual rights of the
claimant, or, otherwise, if, on the effective date of a Plan, the
creditor's allowed claim is paid in full in cash. Treatment of Claims
under the Plan is described hereafter.
A. The claims against the Debtor are divided in the
following classes:
- - -----------------
3/ Under the Plan, a Claim which is properly includable
in more than one Class may be divided for classification
purposes, and may be treated as being in one Class
to the extent that it qualifies within the description of that
Class, and in another Class to the extent that it does not
qualify within the description of the first Class but qualifies
within the description of such different Class.
Disclosure Statement Page 13
Page 18 of 54
<PAGE>
1. Class 1 - Allowed Administrative Claims;
2. Class 2 - Allowed Priority (wage and tax)
Claims;
3. Class 3 - Allowed General Unsecured Claims;
4. Class 4 - Allowed Stock interests.
B. The Plan contemplates that certain securities
("Securities") of the Reorganized Debtor will be issued pursuant to
the Plan. The Securities include Common Stock and four classes of
stock purchase warrants ("Warrants"). Such Securities are described
below.
1. The Common Stock of the Reorganized Debtor
shall have $.001 par value and each share thereof shall
be entitled to one vote at meetings, of shareholders and
shall share equally with all other shares of Common
Stock in all dividends paid or other distributions
made to holders of Common Stock.
2. Each Warrant of the Reorganized Debtor shall
entitle the holder thereof to purchase shares of
Common Stock of the Reorganized Debtor at the following
exercise prices and during the following periods after
the Effective Date:
Exercise Price Exercise Period
-------------- ---------------
Class A Warrants $ 5.00 180 days
Class B Warrants 10.00 18 months
Class C Warrants 15.00 36 months
Class D Warrants 20.00 60 months
C. CLASS 1 Claims. Upon the Distribution Date, or as soon
thereafter as is practicable (and if such claim is for professional
fees or expenses owed by the Debtor, upon a determination by the
Bankruptcy Court that such fees are reasonable and allowable), Allowed
Class 1 Claims shall be paid in full in cash except as set forth
below.
The Debtor does not anticipate any Administrative Claims
other than DLS and counsel for the Debtor, each of which have agreed
to the compensation set forth in the Plan primarily comprised of
Securities of the Reorganized Debtor as follows: DLS would receive
100,000 shares of Common Stock, 8,000 Class A Warrants, 12,000 Class B
Warrants, 10,000 Class C Warrants and 14,000 Class D Warrants, and
Disclosure Statement Page 14
Page 19 of 54
<PAGE>
counsel for the Debtor would receive, in addition to its cash retainer
of $10,000, 4,000 shares of Common Stock, 6,272 Class A Warrants,
6,000 Class B Warrants, 3,333 Class C Warrants and 5,600 Class D
Warrants. Funds advanced by officers and directors to pay expenses
incurred by the Debtor, will entitle such persons to options to
purchase up to 2,200 shares of the Common Stock of the Reorganized
Debtor.
CLASS I IS IMPAIRED.
D. CLASS 2 Claims. Upon the Distribution Date, or as soon
thereafter as is practicable, the Disbursing Agent shall pay to each
holder of an Allowed Class 2 Claim entitled to priority under sections
507(a)(3), (4), (6) of the Bankruptcy Code, an amount equal to 100%
of such Allowed Priority Claim, without interest. The Debtor does not
anticipate any priority claims.
CLASS 2 IS UNIMPAIRED.
E. CLASS 3 Claims. Upon the Distribution Date, or as soon
thereafter as is practicable, Allowed Class 3 Claims shall be paid by
the Exchange Agent, as set forth below, without interest, in full and
complete satisfaction thereof.
The Debtor believes the Unsecured Creditors are as follows:
Ferro Labella Logerfo and Zucker $8,000
27 Warren Street
Hackensack, NJ 07601
Michael Logerfo, Esq.
A. W. Guthman and Company 3,500
2663 Stoney Street
Mohegan Lake, NY
Mr. Andre Guthman
Abrams Roberts Klickstein and Levy 2,000
265 Franklin Street, 16th Fl.
Boston, MA 02110
Mr. Paul Roberts
Lowenstein, Sandler, Kohl,
Fisher & Boylan 2,000
65 Livingston Avenue
Roseland, NJ 07068
George Mazin, Esq. _______
Total $15,500
=======
Holders of Allowed Class 3 Claims shall share PRO RATA in
a pool of 3,500 shares of Common Stock of the Reorganized Debtor.
CLASS 3 IS IMPAIRED.
Disclosure Statement Page 15
Page 20 of 54
<PAGE>
F. CLASS 4 Claims. Upon the Distribution Date, or as soon
thereafter as is practicable, Allowed Class 4 claims4/ shall be paid by
the Exchange Agent, as set forth below, without interest, in full and
complete satisfaction thereof.
Holders of Allowed Class 4 claims shall share PRO RATA in
a pool of Securities of the Reorganized Debtor as follows: 242,500
Common Shares, 385,728 Class A Warrants, 582,000 Class B Warrants,
486,667 Class C Warrants and 680,400 Class D Warrants. In addition to
the aforesaid numbers of shares and Warrants, the Reorganized Debtor
will issue additional Securities such that the numbers of shares of
Common Stock or Warrants received by each Class 4 Claimant will be
rounded up to the next higher "round lot" of shares or Warrants (a
"round lot" being a multiple of 100 shares or 100 Warrants of any
Class).
[NOTE: the numbers of shares and Warrants included in this
paragraph are included for illustrative purposes, and are subject to
change.] AS AN EXAMPLE of the distribution described in the preceding
paragraph, assuming there are an aggregate of 17,876,019 shares of
stock of the Debtor currently outstanding (including the 2,780,980
shares which have not been issued, but which are committed to be
issued once authorized), a Class 4 Claimant holding 50,000 shares of
such stock would be entitled to the following Securities of the
Reorganized Debtor: 678.3 shares of Common Stock, 1,078.9 Class A
Warrants, 1,627.9 Class B Warrants, 1,361.2 Class C Warrants and
1,905.4 Class D Warrants. After rounding such shares and Warrants up
to the next higher round lots, such Claimant Would actually receive
700 shares of Common Stock, 1,100 Class A Warrants, 1,700 Class B
Warrants, 1,400 Class C Warrants and 2,000 Class D Warrants.
CLASS 4 IS IMPAIRED.
G. Court Approval and Adjustment of Shares. The shares and
Warrants anticipated to be allowed to Class 1 creditors are subject to
Court approval. In the event that additional administrative or
unsecured creditors' claims are allowed or that the Court does not
approve the full amount of the shares and Warrants, the Class 4
Creditors will share in a different pool of shares and Warrants.
H. Classes Not Impaired Under the Plan. Class 2 is
not impaired under the Plan and is conclusively deemed to have
- - ----------------
4/ Class 4 claims consist of Stock Interests-holders of the
14,995,099 shares of the Debtor issued and outstanding and the
2,880,920 shares of the Debtor committed for issuance once duly
authorized.
Disclosure Statement Page 16
Page 21 of 54
<PAGE>
accredited the Plan pursuant to Section 1126(f) of the Bankruptcy
Code and is therefore not entitled to vote on the Plan.
I. Confirmation Over Dissenting Classes. In the event
that one or more Classes do not vote to accept the Plan, the Debtor
intends to seeks confirmation under the "cramdown" provisions of
Section 1129(b) of the Bankruptcy Code and will amend the Plan
accordingly.
ANY HOLDER OF A CLAIM OR INTEREST IN ANY OF
THE ABOVE CLASSES WHO FAILS TO OBJECT IN WRITING
TO THE CLASSIFICATION PROVIDED IN THE PLAN AT
LEAST TWENTY (20) DAYS PRIOR TO CONFIRMATION
SHALL BE DEEMED TO HAVE ACCEPTED SUCH CLASSIFICATION
AND TO BE BOUND THEREBY. ANY BALLOT WHICH IS
EXECUTED BY A HOLDER OF A CLAIM WHICH FAILS TO
VOTE FOR ACCEPTANCE OR REJECTION OF THE PLAN SHALL
BE DEEMED AN ACCEPTANCE OF THE PLAN.
VIII. SECURITIES ISSUED TO CREDITORS
Upon confirmation, the Reorganized Debtor will issue
various securities described above in connection with the Plan
pursuant to Section 1145 of the Bankruptcy Code5/, and will be issued
pursuant to the exemption provided for under Section 1145 of the
Bankruptcy Code. The securities shall bear the legend required by the
Office of the United States Trustee, which is as follows:
- - -------------
5/ 11 U.S.C. section 1145 provides, in relevant part:
(a) Except with respect to any entity that is an underwriter as
defined in subsection (b) of this section, section 5 of the
Securities Act of 1933 and any State or local law requiring
registration or licensing of an issuer of, underwriter of, or broker
or dealer in, a security do not apply to --
(1) the offer or sale under a plan of a security of the
debtor, of an affiliate participating in a joint plan
with the debtor, or of a successor to the debtor under
the plan (A) in exchange for a claim against, an
interest in, or a claim for an administrative expense in
the case concerning, the debtor or such affiliate; or
(B) principally in such exchange and partly for cash or
property.
Disclosure Statement Page 17
Page 22 of 54
<PAGE>
The securities represented by this certificate
have not been registered under the Securities
Act of 1933 and were issued pursuant to an
exemption provided by 11 U.S.C. sections 1145,
under an order confirming Plan in a case
entitled, IN RE NORTH AMERICAN ENERGY OF
DELAWARE, INC. in the United States Bankruptcy
Court for the Southern District of New York. The
holder of this certificate is referred to 11
U.S.C. sections 1145(b) and (c) for guidance as
to the sale of these securities.
Section 1145(b) of the Bankruptcy Code, referred to in the
foregoing legend, exempts resales of securities received pursuant to a
plan of reorganization under chapter 11 of the Bankruptcy Code from
the requirements of the Securities Act of 1933, so long as the selling
shareholder is not an "underwriter," as defined in such Section.
However, Section 1145 does not exempt such resales from the
requirements of state "blue sky" (securities) laws. Most blue sky laws
contain exemptions applicable to such resales, including exemptions
for isolated transactions, unsolicited transactions or transactions in
securities received in a bankruptcy reorganization. However, there is
no assurance that such an exemption will be available in every
jurisdiction in which a resale of shares may be made. Recipients of
shares are advised to check with a securities broker or dealer
regarding the availability of such an exemption before selling their
shares or Warrants.
It is anticipated that the Securities to be issued by the
Reorganized Debtor will initially be traded in the over-the-counter
market and that quotations therefor will initially appear in the
so-called "pink sheets" which are published daily. Such Securities
will be separately tradable and the Debtor believes that active
trading markets for the common stock will eventually develop. The
Reorganized Debtor intends to seek the inclusion of some or all of
such Securities in the National Association of Securities Dealers
Automated Quotation System6/ ("NASDAQ"), or another quotation system or
exchange as soon as administratively practical.
Valuation of Securities. The Debtor does not make any representation
as to the values at which the Common Stock or Warrants of the Reorganized Debtor
are likely to trade in the over-the-counter-market after the Effective Date. In
making a decision whether to cast a ballot to approve the Plan, Claimants are
urged to consider that any Securities to be distributed under the Plan are
speculative and subject to a high degree of risk.
- - -------------
6/ In order that common stock be accepted for initial inclusion in
NASDAQ, it must meet NASDAQ's listing requirements, one of which
is that such stock have a minimum bid price of $3.00 per share.
There is no assurance that such criterion will be attained.
Disclosure Statement Page 18
Page 23 of 54
<PAGE>
IX. MEANS FOR THE EXECUTION OF THE PLAN
Any pre-petition default or forfeiture, real or alleged,
by the Debtor shall be deemed vacated and otherwise cured upon the
confirmation of the Plan (or any amendment hereof).
On the Confirmation Date, the appointment of the
Disbursing and Exchange Agents shall automatically and without further
act or order become effective. The Disbursing and Exchange Agents
shall have the duties, responsibilities, rights and authority set
forth in the Plan and such incidental and implied rights and authority
as may be necessary to implement the Plan. The Debtor shall fund the
Plan from its Cash on hand and by the issuance of Securities by the
Reorganized Debtor directly to the holders of Class I claims (allowed
administrative claims) and Class 3 claims (allowed general and secured
claims) and, upon surrender of any certificates representing such
Stock Interests, to the holders of Class 4 claims (allowed stock
interest) pursuant to the merger of Debtor into Alliance. As soon as
practical after the Effective Date, the Disbursing Agent for the
Debtor shall issue payment to those Claimants, if any, receiving a
cash distribution and the Exchange Agent appointed by the Reorganized
Debtor shall issue certificates representing the Securities to which
such claimants are entitled upon surrender of the certificates
representing their shares, if any, of the Debtor's stock.
The Debtor shall have the power and authority to review
all claims and may, in its discretion, (1) commence actions to assert
any such Bankruptcy Claims or Non-Bankruptcy Claims that they
determine should be commenced and (2) prosecute, compromise and settle
all such actions on such terms as it deems appropriate. The Debtor is
authorized and empowered to assert, litigate and settle objections to
Disputed Claims, including Insider or Related Party Claims.
X. FULL AND FINAL SATISFACTION
The Plan provides as to some creditors, that payments made
are in full and final satisfaction of those claims, and creditors are
advised to review the Plan as applied to their claim for such
classification.
XI. METHOD FOR DETERMINATION OF ALLOWED CRAMDOWN
The Plan provides for payment to be made only to holders
of "allowed" claims, in the various classes. As to claims incurred
prior to the filing date, there are three avenues by which such claims
may become "allowed" claims entitled to payment under the Plan. First,
if a claim is listed in Debtor's Chapter 11 schedules, it is
automatically allowed unless those schedules denominate that
particular claim as "contingent", "unliquidated", or "disputed", or
Disclosure Statement Page 19
Page 24 of 54
<PAGE>
unless an objection thereto is filed with the Court and served upon
the claimant. If an objection is interposed, the validity and amount
of the claim will be determined by the Bankruptcy Court, following a
hearing.
The second method by which a claim may be allowed is by
the ruling of a "proof of claim" in substantial conformity with
official Bankruptcy Form 10, with the Bankruptcy Court on or before
the Bar Date. If the claim is not disputed or objected to, it is
deemed allowed. Such filing is required in order to assert any claim
not included in the schedules, and for any claim denominated therein
as 'contingent", "unliquidated", or "disputed".
The third manner in which a claim may be determined to be
"allowed" is by Final Order, after the litigation of a filed
objection, or by stipulation settling such litigation setting forth an
agreed liquidated claim and which is thereafter "so ordered" by the
Court.
XII. VOTING, IMPAIRMENT, CONFIRMATION AND CRAMDOWN
A. Voting. Claimants with allowed impaired claims are
entitled to vote to accept or reject the Plan. A claimant who fails to
vote to either accept or reject the Plan will not be included in the
calculations regarding the acceptance or rejection of the Plan.
Classes which are not "impaired" under the Plan, pursuant
to Section 1126(f) of the Bankruptcy Code, are presumed to have
accepted the Plan. However, said claimants may rebut this presumption.
Debtor believes that classes 1, 3 and 4 are impaired.
A ballot to be completed by the holders of Claims is
enclosed herewith. Instructions for completing and returning the
ballots are set forth thereon and should be reviewed at length. The
Plan will be confirmed by the Bankruptcy Court and made binding upon
all claimants if, with respect to all classes of claimants, the Plan
is accepted by the Holders of two thirds (2/3) in amount and more than
one half (1/2) in number of allowed claims in each such classes voting
upon the plan.
B. Confirmation Without Acceptance by All Impaired
Classes, or "Cramdown". Generally, if a Plan is not accepted by all
impaired classes, it may nevertheless be confirmed by the Bankruptcy
Court if (i) the Plan is accepted by at least one impaired class and
it meets all of the other requirements of Section 1129(a) of the
Bankruptcy Code; (ii) the Plan does not discriminate unfairly; and
(iii) the Plan is fair and equitable to the rejecting classes. Such a
finding would require a determination by the Bankruptcy Court that the
Plan meets the requirements of Section 1129(b) of the Bankruptcy Code,
Disclosure Statement Page 20
Page 25 of 54
<PAGE>
including that no holder of any claim or interest junior to the claims
of the rejecting class is receiving or retaining any property or
payment under the Plan solely on account of such claim or interests.
This requirement is generally referred to as the "absolute priority
rule".
The "cramdown" provisions for confirmation of a Plan
despite the non-acceptance of one or more impaired classes of the
claims or interest are set forth in Section 1129(b) of the Bankruptcy
Code. Section 1129(b)(1) of the Bankruptcy Code states:
Notwithstanding section 510(l) of this title, if all
of the applicable requirements of subsection (a) of
this section other than paragraph (8), are met with
respect to the Plan, the Court, on request of the
proponent of the Plan, shall confirm the Plan
notwithstanding the requirements of such paragraph if
the Plan does not discriminate unfairly, and is fair
and equitable, with respect to each class of claims
or interests that is impaired under, and has not
accepted, the Plan.
The Debtor does not represent that the "cramdown"
provisions would allow the confirmation of the Plan. That
determination should be made after a review of the information
contained herein.
In the event any impaired class rejects the Plan, the
Debtor reserves the right to seek confirmation of the Plan pursuant to
"cramdown" provisions of the Bankruptcy Code, and to cramdown
dissenting classes.
B. The Confirmation Hearing. The Bankruptcy Court will
schedule a Confirmation Hearing. At the Confirmation Hearing, or at
any adjourned hearing thereof, the Bankruptcy Court will consider
whether the Plan satisfies the various requirements of the Bankruptcy
Code, including whether it is feasible and whether it is in the best
interests of holders of claims and interests. The Bankruptcy Court
will also receive and consider a certification of ballots received
prepared on behalf of the Debtor concerning the results of the vote.
The Confirmation Hearing will be held before United States Bankruptcy
Judge Jeffry H. Gallett, United States Bankruptcy Court, Room 523,
Southern District of New York, Alexander Hamilton Customs House, One
Bowling Green, New York, New York 10004-1408. The Confirmation Hearing
may be adjourned from time to time by the Bankruptcy Court without
further notice except for the announcement of such adjournment in open
Court.
Disclosure Statement Page 21
Page 26 of 54
<PAGE>
XIII. DISCUSSION OF COMPARATIVE RECOVERIES,
AND ALTERNATIVES TO PLAN, LIQUIDATION
ANALYSIS COMPARISON TO ALTERNATIVE PLANS
Notwithstanding acceptance of the Plan by creditors of
each class, in order to confirm the Plan, the Bankruptcy Court must
independently determine that the Plan is in the best interests of all
classes of creditors and the Equity Interest Holder impaired by the
Plan. The "best interests" test requires that the Bankruptcy Court
find that the plan provides to each member of each impaired class of
claims and interests a recovery which has a value at least equal to
the value of the distribution which each such person would receive if
the Debtor were liquidated under Chapter 7 of the Code.
Debtor has annexed hereto a liquidation analysis (Exhibit
Q in the form of an appraisal of Debtor's property. To determine what
might be recovered by an unsecured creditor in a Chapter 7 liquidation
case, the following steps should be taken:
(i) Determine the dollar amount that would be
generated from the liquidation by forced sale of the
Debtor's assets by a Chapter 7 Trustee; and
(ii) Subtract the balance due the secured creditors,
the estimated costs of the liquidation (including the
Chapter 7 trustee's fees and the fees of accountants,
auctioneers and other professionals employed by the
Chapter 7 trustee), the unpaid expenses of the
reorganization proceeding and other bankruptcy priority
obligations (such as priority wage, union and tax
obligations). These and any other claims arising in the
liquidation, or from the current reorganization
proceedings, must be paid in full before any funds would
be made available to pay unsecured creditors. The value of
the distribution resulting from a liquidation (after
subtracting the amounts described above) may then be
compared with the recovery estimated to be forthcoming
under the Plan.
The Debtor believes that the liquidation of the assets of
the Debtor will result in unsecured creditors receiving nothing after
the Administrative and Priority claims are paid. The Debtor believes
that unsecured creditors will fare better under the Plan than they
would in a liquidation.
XIV. TAX CONSEQUENCES
The Debtor has not researched the tax consequences of the
Plan to holders of Claims and Stock Interests. The Debtor has not
requested any ruling from the Internal Revenue Service or any other
Disclosure Statement Page 22
Page 27 of 54
<PAGE>
taxing authority with respect to such matters. The tax consequences of
the Plan on any particular holder of a Claim or Stock Interest may be
affected by matters not discussed in this Disclosure Statement. EACH
HOLDER OF A CLAIM OR INTEREST IS URGED TO CONSULT ITS OWN TAX ADVISOR
AS TO THE CONSEQUENCES OF THE PLAN UNDER FEDERAL AND APPLICABLE STATE,
LOCAL AND FOREIGN TAX LAWS.
XV. RETENTION OF JURISDICTION
Upon confirmation of the Plan, the Bankruptcy Court shall
retain jurisdiction of Debtor's case pursuant to and for the purposes
set forth in 1127(b) of the Bankruptcy Code and, INTER ALIA, for the
following purposes:
(i) To determine any and all objections to the allowance
of claims or interests;
(ii) To determine any and all applications for
compensation and reimbursements of expenses for professional fees and
any other fees and expenses authorized to be paid or reimbursed under
the Bankruptcy Code;
(iii) To amend or modify the Plan to remedy any defect,
cure any omission, or reconcile any inconsistency in the Plan or the
Confirmation Order as may be necessary or advisable to carry out the
purposes and intent of the Plan to the extent authorized by the
Bankruptcy Code or the Bankruptcy Rules;
(iv) To determine any and all controversies and disputes
arising under or related to the Plan;
(v) To construe and enforce any and all provisions of the
Plan;
(vi) To determine any and all applications, motions,
adversary proceedings and contested or litigated matters brought
before the Bankruptcy Court concerning the administration of the
estate, or its property;
(vii) To determine any and all controversies and disputes
arising under or related to any settlement of an adversary proceeding
or contested matter approved by the Bankruptcy Court, either before or
after the Confirmation date.
(viii) To hear and determine adversary proceedings seeking
the avoidance or recovery of preferential payments and/or fraudulent
conveyances or seeking the recovery of money, assets or property of
the estate;
Disclosure Statement Page 23
Page 28 of 54
<PAGE>
XVI. CONCLUSION
No representations concerning Debtor or the Plan are
authorized other than as set forth in this Disclosure Statement. Any
representation or inducements made to secure acceptances, other than
those contained in this Disclosure Statement, should not be relied
upon by any claimants in arriving at their decision as to whether to
accept or reject the Plan. Debtor is unable to warrant that the
information contained herein is without any inaccuracy, although
effort has been made to insure that the information set forth in this
Disclosure Statement is true and accurate. For the reasons set forth
herein, the Debtor urges all Claimants which are or may be impaired
under the Plan to vote to accept the Plan, and to evidence such
acceptance by returning their Ballots so that they will be duly and
timely received in the manner prescribed herein.
Dated. New York, New York
September 13, 1996
NORTH AMERICAN ENERGY OF DELAWARE, INC.
By: /s/ R.L. Burke, Pres.
-------------------------------------
Raymond L. Burke, President
BALLON STOLL BADER & NADLER, P.C.
By: /s/ Dwight Yellen
-------------------------------------
Dwight Yellen
ATTORNEYS FOR DEBTOR AND DEBTOR-IN-
POSSESSION
1450 Broadway-14th Floor
New York, New York 10018-2268
212.575-7900
Fax 212.764-5060
Disclosure Statement Page 24
Page 29 of 54
<PAGE>
EXHIBITS
--------
Exhibit 1.: Debtor's Plan of Reorganization.
Exhibit a.: Unaudited pro forma Balance Sheet as of June 30, 1996
showing the effects of the merger described herein and the
subsequent issuance by the Reorganized Debtor for shares
of its Common Stock in exchange for its outstanding debt
and trade payables as described herein as if both events
occurred on such date.
Exhibit b.: Reserved.
Exhibit c.: Liquidation Analysis.
Exhibit d.: Debtor's Securities and Exchange Commission Form 10-K,
dated June 7, 1996, for the fiscal year ended March 31,
1996, and Form 10-Q dated July 25, 1996 for the fiscal
quarter ended June 30, 1996 are incorporated by reference
herein.
Exhibit e.: Unaudited financial statements of Alliance for the Years
Ending March 31, 1994, 1995 and 1996.
Exhibit f.: Unaudited balance sheet and statement of income and
retained earnings for the three months ending June 30,
1996.
Disclosure Statement Page 25
Page 30 of 54
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - --------------------------------------x
In re: Chapter No. 11
NORTH AMERICAN ENERGY OF 96 B. 44434 (JHG)
DELAWARE, INC.,
Debtor. TIN: 95-3111611
- - --------------------------------------x
- - ----------------------------------------------------------------------
DEBTOR'S PLAN OF REORGANIZATION
- - ----------------------------------------------------------------------
BALLON STOLL BADER & NADLER, P.C.
Attorneys for Debtor and Debtor-in-Possession
NORTH AMERICAN ENERGY OF DELAWARE, INC.
1450 Broadway - - 14th Floor
New York, New York 10018-2268
212.575-7900
Fax 212.764-5060
-1-
Page 31 of 54
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1. DEFINITIONS......................................................1
ARTICLE 2. CLASSIFICATION OF CLAIMS AND STOCK INTERESTS.....................8
2.1 GENERAL CLASSIFICATION RULE................................8
ARTICLE 3. TREATMENT OF CLAIMS..............................................8
3.1 CLASS 1....................................................8
3.2 CLASS 2....................................................9
3.3 CLASS 3....................................................9
3.3.1 SECURITIES OF THE REORGANIZED DEBTOR......................10
3.4 CLASS 4...................................................10
3.5 CLASSES NOT IMPAIRED UNDER THE PLAN.......................10
3.6 CONFIRMATION OVER DISSENTING CLASSES......................10
ARTICLE 4. MEANS FOR THE EXECUTION OF THE PLAN.............................11
4.5 REORGANIZED DEBTOR........................................11
4.6 EXEMPTION FOR SECURITIES LAWS.............................12
ARTICLE 5. PROVISIONS CONCERNING DISTRIBUTIONS.............................12
5.1 MANNER OF PAYMENTS UNDER THE PLAN.........................12
5.2 MANNER OF DISTRIBUTION OF SECURITIES UNDER
THE PLAN..................................................12
5.3 ROUNDING TO THE NEAREST DOLLAR............................13
5.4 ROUNDING TO THE NEAREST SHARE OR WARRANT..................13
5.5 UNCLAIMED CASH............................................13
5.6 UNCLAIMED SECURITIES......................................14
5.7 DISTRIBUTED PAYMENTS OR DISTRIBUTION......................14
5.8 FULL AND FINAL SATISFACTION...............................14
5.9 NO WAIVER.................................................14
ARTICLE 6. TREATMENT OF EXECUTORY CONTRACTS AND LEASES.....................15
ARTICLE 7. PROCEDURES FOR RESOLVING DISPUTED CLAIMS........................15
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7.1 THE TIME FOR OBJECTIONS TO CLAIMS.........................15
7.2 RESOLUTION OF DISPUTED CLAIMS.............................15
7.3 PAYMENTS..................................................15
7.4 DISPUTED PAYMENTS OR DISTRIBUTIONS........................16
ARTICLE 8. DEFAULT.........................................................16
ARTICLE 9. RETENTION OF JURISDICTION.......................................16
ARTICE 10. MISCELLANEOUS PROVISIONS........................................18
10.1 PAYMENT DATES.............................................18
10.2 NOTICES...................................................18
10.3 HEADINGS..................................................19
10.4 SEVERABILITY..............................................19
10.5 GOVERNING LAW.............................................19
10.6 SUCCESSORS AND ASSIGNS....................................19
10.7 RE-VESTING OF PROPERTY UPON CONFIRMATION..................19
10.8 THE DEBTOR................................................19
10.9 OFFSETS...................................................19
10.10 RESERVATION OF RIGHTS.....................................19
10.12 CONDITIONS TO EFFECTIVENESS OF THE PLAN...................20
10.13 CLOSING OF THE CHAPTER 11 CASE............................20
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<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
___________________________________x
In re: Chapter No. 11
NORTH AMERICAN ENERGY OF 96 B. 44434 (JHG)
DELAWARE, INC.,
Debtor. TIN: 95-3111611
__________________________________x
DEBTOR'S PLAN OF REORGANIZATION
North American Energy of Delaware, Inc. (the "Debtor"),
proposes the following Plan of Reorganization (the "Plan")
pursuant to Chapter 11 of Title 11 U.S.C. section 101 et seq.,
(the "Bankruptcy Code").
ARTICLE 1. -- DEFINITIONS
For purposes of this Plan, the following terms shall have
the respective meanings as hereinafter set forth (such meanings
to be equally applicable to the singular and plural forms of the
terms defined) unless the context: otherwise requires. The
inclusion of a term in the definitions does not necessarily imply
that the term or the concept or principle embodied therein is
used in the Plan.
ADMINISTRATIVE CLAIM. Any cost or expense of administration
of the Chapter 11 case allowed under Section 503 (b) of the
Bankruptcy Code, including without limitation, any actual and
necessary expenses of operating the business of the Debtor, and
all allowances of compensation or reimbursement of expenses for
legal or other professional services to the extent allowed by the
Bankruptcy Court under sections 327, 330, 331 and 503 of the
Bankruptcy Code, and all fees and charges of the Court, or the
Office of the United States Trustee assessed against the Debtor's
estate pursuant to Section 1930 of Title 28 of the United States
Code.
ALLIANCE shall mean Alliance Research Corporation, a
California Corporation.
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ALLOWED ADMINISTRATIVE CLAIM. All or that portion of any
Administrative Claim which is an Allowed Claim.
ALLOWED OR ALLOWED CLAIM. Except as otherwise provided
herein, any Claim or portion of a Claim, other than a Disputed
Claim, (a) which is scheduled by the Debtor pursuant to
sections 521(l) and 106(a)(2) of the Bankruptcy Code; or
(b) proof of which had been timely filed with the Bankruptcy
Court pursuant to Section 501 (a) of the Bankruptcy Code and
Bankruptcy Rule 3003 (c) (3) , or on or before the Bar Date
designated by the Court and with respect to which no objection to
the allowance thereof has been interposed within the applicable
period of limitation fixed by the Bankruptcy Code, Bankruptcy
Rules, by an order of the Court or under this Plan; or (c) which,
after objection thereto, has been allowed in whole or in part by
a Final Order. For purposes of this Plan, any claim which is the
subject of litigation in this or any other court, or which
arises out of a judgment rendered by any court, shall not be
deemed "allowed" until a final non-appealable judgment has
been rendered, and the Claim is otherwise "allowed" as that
term is hereinabove defined.
ALLOWED PRIORITY CLAIM. All or that portion of an allowed
Claim entitled to priority under sections 507(a)(3), (4), (6)
and (7) of the Bankruptcy Code. Except as may be allowed by the
Court in the case of an Allowed Priority Claim under Section 507(a)(7)
of the Bankruptcy Code, any interest on such Claim which accrued
after the filing date, shall not be part of the Allowed Priority
Claim.
ALLOWED STOCK INTEREST. A Stock Interest: (a) which is
scheduled by the Debtor pursuant to the Bankruptcy Code, other
than a Stock Interest which is scheduled by the Debtor as
disputed, contingent or unliquidated; or (b) proof of which has
been filed pursuant to Section 501(a) of the Bankruptcy Code on
or before the Bar Date designated by the Court and with respect
to which no objection to the allowance thereof has been
interposed prior to the filing date for filing such objections
set forth in an order of the court; or (c) which, after objection
thereto, has been allowed, in whole or in part, by a Final Order.
ALLOWED UNSECURED CLAIM. Any allowed pre-petition Claim by
one who is not an insider and is not on account of an equity
interest in the Debtor that. is not secured by collateral, is not
an Allowed Priority Claim or an allowed secured Claim. Interest
accruing after the filing date shall not be a part of any allowed
unsecured Claim.
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ASSETS. Shall mean all of the Debtor's property, real and
personal, tangible and intangible including property of the
estate as defined by Section 541 of the Bankruptcy Code.
BANKRUPTCY CODE. The Bankruptcy Reform Act of 1978 (11
U.S.C. sections 101, et. seq.), as amended by the Bankruptcy
Amendments and Federal Judgeship Act of 1984 (P.L. No. 98-353),
and by those aspects of the Bankruptcy Reform Act of 1994,
effective as to a case filed prior to the enactment date of such
Act, and Title 11 of the United States Code, as amended.
BANKRUPTCY RULES. The Rules of Bankruptcy Procedure as
applicable to cases under Title 11 of the United States Code.
BAR DATE. That date to be fixed by Order of the Bankruptcy
Court as the last date by which all creditors asserting a Claim
must file a proof of claim or such other applicable date
respecting Claims.
BUSINESS DAY. Any day other than a Saturday, Sunday or
legal holiday as such term is defined in Bankruptcy Rule 9006.
CASH. Currency of the United States and cash or cash
equivalents, including but not limited to checks, bank deposits
or similar items in currency of the United States of America.
CHAPTER 11. Chapter 11 of the Bankruptcy Code.
CHAPTER 11 CASE. In re: NORTH AMERICAN ENERGY OF DELAWARE,
INC. Case No. : 96 B. 44434 (JHG) , currently pending in
Bankruptcy Court.
CLAIM. A claim against the Debtor as defined. in
Section 101(5) of the Bankruptcy Code.
CLAIMANT. The holder of a Claim.
CLASS. A class of holders of Allowed Claims or Allowed
Stock Interests described in section 2 of this Plan.
COMMITTEE. The Committee of Unsecured Creditors appointed
in this Chapter 11 case, if any, as same may be constituted from
time to time.
COMMON STOCK shall mean the Common Stock, $.001 par value,
of ORA, or, after the merger of the Debtor into ORA, the
Reorganized Debtor.
COMPANY shall refer to ORA.
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<PAGE>
CONFIRMATION. Entry of an order by the Court approving the
Plan in accordance with Chapter 11.
CONFIRMATION DATE. The date upon which the Court enters an
order confirming the Plan pursuant to Section 1129 of the
Bankruptcy Code.
CONFIRMATION ORDER. The order entered by the Court
confirming the Plan in accordance with Chapter 11.
CONSUMMATION OF THE PLAN shall mean the full performance by
the Debtor of all of its obligations under the Plan and the entry
of a Final Decree closing the case.
COURT OR BANKRUPTCY COURT. The United States Bankruptcy
Court for the Southern District of New York or such other court
as may have jurisdiction over the Debtor's Chapter 11 case.
CREDITOR. Any person having a Claim against the Debtor that
arose on or before the Petition Date or a Claim against the
Debtor's estate of a kind specified in sections 502(g), (h) or
(i) of the Bankruptcy Code.
DEBTOR. North American Energy of Delaware, Inc., a Delaware
corporation, debtor and debtor-in-possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code.
DISALLOWED CLAIM. Any Claim or portion thereof that is not
an allowed Claim, or which has been disallowed by the Bankruptcy
Court by a Final order or, at the option of the Debtor, by a
different court of appropriate jurisdiction by order which
becomes final under the appropriate rules of such court.
DISBURSING AGENT shall mean the individual or institution
duly authorized by the Bankruptcy Court and charged with the
fiduciary obligation of distributing all dividends, whether by
Cash or Securities, to Creditors in accordance with the Plan.
DISCLOSURE STATEMENT shall mean the Disclosure Statement,
all exhibits annexed thereto, either in their present form or
altered, amended or modified from time to time by the Debtor and
filed by the Debtor pursuant to Section 1125 of the Bankruptcy
Code regarding the Plan and approved by the Bankruptcy Court.
DISPUTED CLAIM. Shall mean (a) any Claim or portion of a
Claim (other than an Allowed Claim) which is scheduled by the
Debtor as disputed, contingent or unliquidated, or which the
Debtor moves to amend or re-classify, or (b) a Claim Which has
been filed pursuant to Section 501(a) of the Bankruptcy Code as
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<PAGE>
unliquidated, (c) a Claim which has been filed pursuant to
Section 501(a) of the Bankruptcy Code and as to which an
objection to the allowance thereof has been interposed within the
time limitation fixed by the Bankruptcy Code, by an order of this
Court, or this Plan, which objection has not been determined, in
whole or in part, by a Final order, or (d) a Claim subject to
determination as to its validity, enforceability or amount in a
legal proceeding pending in another court.
DISPUTED INTEREST shall mean an Interest in the Debtor, the
allowance of which in whole or part is the subject of a timely
objection interposed by the Debtor, the Reorganized Debtor or a
party-in-interest.
DISTRIBUTION DATE. Shall refer to the date of the initial
distribution under the Plan which shall occur within 30 days of
the Effective Date.
DLS. Shall mean DLS Financial Services, Inc., the Debtor's
securities consultant.
EFFECTIVE DATE. Shall mean (a) for Allowed Claims and
implementation of the Plan in general, the date on which the
Confirmation order becomes a Final Order, provided no stay
thereof is in effect, and if a stay is in effect, ten days after
the dissolution of such stay, and (b) for Disputed Claims, the
entry of a Final Judgment resolving or determining said Disputed
Claim.
ESTATE shall mean the estate of the Debtor created pursuant
to Section 541 (a) of the Bankruptcy Code upon commencement of
the Chapter 11 case.
ENTITY. Defined at Section 101(14) of the Bankruptcy Code.
EXCHANGE AGENT shall mean the individual or institution duly
authorized by the Bankruptcy Court and charged with the fiduciary
obligation of distributing Transmittal Letters to holders of
stock of the Debtor and distributing Securities to such
stockholders or to other Claimants in accordance with the Plan.
EXECUTORY CONTRACT shall mean any contract or unexpired
lease, subject to the provisions of Section 365 of the Bankruptcy
Code between the Debtor and any other party, specifically
excluding all contracts and agreements entered into pursuant to
this Plan.
FILING DATE shall mean August 19, 1996, the date on which a
voluntary petition under Chapter 11 of the Bankruptcy Code was
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<PAGE>
filed by the Debtor in the Bankruptcy Court commencing the
Debtor's Chapter 11 case.
FINAL ORDER OR FINAL JUDGMENT. An order or judgment (or any
revision, modification or amendment thereof) as to which (a) the
time to appeal has expired and as to which no appeal has been
filed, or (b) an order or judgment which has been appealed, has
been affirmed on appeal and as to which appeal the time for
further appeal has expired.
FINAL DECREE. Means the Final Decree to be entered by the
Bankruptcy Court pursuant to Bankruptcy Rule 3022.
INSIDER. Shall be as defined at Section 101(31) of the
Bankruptcy Code.
MERGER AGREEMENT shall mean the merger agreement between the
Debtor and ORA, to be entered into to implements the Plan,
setting forth the terms and conditions pursuant to which the
Debtor will be merged into ORA.
ORA shall mean Ora Electronics, Inc., a Delaware
corporation, the corporation into which it is proposed that the
Debtor shall be merged pursuant to the Plan, provided that the
term "ORA" shall refer to Alliance with respect to periods prior
to the merger of Alliance into ORA unless the context otherwise
requires.
PLAN. This Plan of Reorganization as modified or amended
from time to time as and to the extent permitted herein or by
Bankruptcy Code.
PROFESSIONAL PERSON. Defined at Section 327(a) of the
Bankruptcy Code.
PRO RATA shall mean the payment or distribution of Cash or
Securities in proportion to the respective outstanding amounts of
all Allowed Claims of Claimants in the particular Class as of a
stated date.
REORGANIZED DEBTOR shall mean the surviving corporation in
the merger of the Debtor into ORA, effective at the Effective
Date.
SECURITIES shall mean shares of Common Stock and Warrants.
SCHEDULES shall mean the Schedules of Assets and
Liabilities filed by the Debtor with the office of the Clerk of
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<PAGE>
the Bankruptcy Court pursuant to Bankruptcy Rule 1007, as they
may be mended from time to time.
STOCK INTEREST. Shall refer to one who owns or holds the
shares of stock of the Debtor or has a further or future entitle
ment to shares of stock of the Debtor.
TAX CLAIM shall mean that portion of an Allowed Claim
entitled to priority under Section 507 (a) (7) of the Bankruptcy
Code.
TIMELY FILED CLAIM. Claims filed prior to the Bar Date as
set by the Bankruptcy Court.
TRANSMITTAL LETTER shall mean a form of letter to be
distributed to stockholders of Debtor, to be used by such stock
holders to forward their stock certificates to the Exchange Agent
for exchange into the Securities provided for in the Plan.
UNCLAIMED PROPERTY shall mean any cash, cash equivalents,
Securities or other property of the Debtor or the Reorganized
Debtor unclaimed for a period of one year after the applicable,
initial or interim Distribution Date or in the event that
Distribution was made after a final Distribution Date, one year
after said final Distribution Date.
UNITED STATES TRUSTEE shall mean the United States Trustee
for the Bankruptcy Court.
UNSECURED CLAIM. Shall mean any Allowed Claim or portion
thereof which is not an Administrative Claim, a Tax Claim,
Priority Claim, or Secured Claim. An Allowed Unsecured Claim
shall not include any Claims for accrued and unpaid interest.,
fees, costs, or other charges arising on or after the Filing
Date.
WAGE CLAIM shall mean any Allowed Claim entitled to priority
under Section 507(a)3(A) of the Bankruptcy Code.
WARRANTS shall mean warrants issued by the Reorganized
Debtor entitling the holder to purchase shares of Common. Stock
upon the exercise thereof, as follows:
CLASS A WARRANTS shall mean Warrants having an exercise
price of $5 per share, exercisable during the period of
180 days following the Effective Date.
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CLASS B WARRANTS shall mean Warrants having an exercise
price of $10 per share, exercisable during the period
of 18 months following the Effective Date.
CLASS C WARRANTS shall mean Warrants having an exercise
price of $15 per share, exercisable during the period
of 36 months following the Effective Date.
CLASS D WARRANTS shall mean Warrants having an exercise
price of $20 per share, exercisable during the period
of 60 months following the Effective Date.
ARTICLE 2. CLASSIFICATION OF CLAIMS AND STOCK INTERESTS
2.1 GENERAL CLASSIFICATION RULE. A proof of claim or
proof of interest which asserts a Claim or interest which is
properly includible in more than one Class is in a Class to the
extent it qualifies within the description of such Class and is
in a different Class to the extent it qualifies within the
description of such different Class.
2.2 The Claims against the Debtor are divided in the
following classes:
2.2.1 Class 1 - Allowed Administrative Claims;
2.2.2 Class 2 - Allowed Priority (wage and
tax) Claims;
2.2.3 Class 3 - Allowed General Unsecured
Claims;
2.2.4 Class 4 - Allowed Stock interests.
ARTICLE 3. TREATMENT OF CLAIMS
3.1 CLASS 1 Upon the Distribution Date, or as soon
thereafter as is practicable (and if such Claim is for
professional fees or expenses owed by the Debtor, upon a
determination by the Bankruptcy Court that such fees are
reasonable and allowable), shall be paid, except as provided
below with respect to the Allowed Administrative Claims of DLS,
other Professional Persons and officers and directors, in Cash,
in full, in an amount equal to 100% of each such Allowed Claim.
The Debtor reserves the right to object to and/or oppose the
validity, priority, extent, status or allowance of any such Claim
filed with the Bankruptcy Court, listed in the Debtor's
schedules, or asserted against the Debtor or its property, at any
time heretofore or hereafter.
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3.1.1 Subject to approval of the Bankruptcy
Court, the sole compensation of the Allowed Administrative Claim
of DLS shall be the following Securities, in lieu of the Cash
provided for in the preceding Section: 100,000 shares of Common
Stock, 8,000 Class A Warrants, 12,000 Class B Warrants,
10,000 Class C Warrants and 14,000 Class D Warrants.
3.1.2 Subject to approval of the Bankruptcy
Court, other than DLS, all Professional Persons appointed by the
Court pursuant to Section 327 of the Bankruptcy Code shall be
paid their Allowed Administrative Claims for Professional Fees in
full pursuant to such Final Order or Final Orders of the
Bankruptcy Court granting allowances of Professional Fees as
Allowed Administrative Claims pursuant to sections 330, 331
or 503 (b) of the Bankruptcy Code as follows: $10,000 in Cash,
the remainder in the following Securities of the Reorganized
Debtor: 4, 000 shares of Common Stock, 6,272 Class A Warrants,
6,000 Class B Warrants, 3,333 Class C Warrants and 5,600 Class D
Warrants.
3.1.3 Subject to approval of the Bankruptcy
Court, funds to pay all expenses incurred by the Debtor,
including expenses of the Bankruptcy Case, will be advanced to
the Debtor by its existing officers and directors. Each such
person shall be entitled to options to purchase from the
Reorganized Debtor during the period of 12 months beginning with
the Effective Date of the Plan, for $3.50 per share, one share of
the Common Stock for each $3.50 of expenses so paid. The options
pursuant to this provision shall in no event cover more than a
maximum of 2,200 shares of Common Stock.
CLASS 1 IS IMPAIRED.
3.2 CLASS 2 Upon the Distribution Date, or as soon
thereafter as is practicable, the Disbursing Agent shall pay to
each holder of an Allowed Class 2 Claim entitled to priority
under sections 507(a)(3), (4), (6) of the Bankruptcy Code, an
amount equal to 100% of such Allowed Priority Claim, without
interest. The Debtor reserves the right to object to and/or
oppose the validity, priority, extent, status or allowance of any
such Claim filed with the Bankruptcy Court, listed in the
Debtor's schedules, or asserted against the Debtor or its
property, at any time heretofore or hereafter.
CLASS 2 IS UNIMPAIRED.
3.3 CLASS 3 Upon the Distribution Date, or as soon
thereafter as is practicable, Allowed Class 3 Claims shall be
paid by the Disbursing Agent, as set forth below, without
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interest, in full and complete satisfaction thereof. The Debtor
reserves the right to object to and/or oppose the validity,
priority, extent, status or allowance of any Claim filed with the
Bankruptcy Court, listed in the Debtor's schedules, asserted
against the Debtor or its property, at any time heretofore or
hereafter.
3.3.1 SECURITIES OF THE REORGANIZED DEBTOR.
Holders of Allowed Class 3 Claims shall share pro rata in a pool
of Securities of the Reorganized Debtor as follows: 3,500 shares
of Common Stock.
CLASS 3 IS IMPAIRED.
3.4 CLASS 4 Holders of Allowed Class 4 Claims shall
share pro rata in a pool of Securities of the Reorganized Debtor
as follows: 242,500 Common Shares, 385,728 Class A Warrants,
582,000 Class B Warrants, 486,667 Class C Warrants and 680,400
Class D Warrants. In addition, holders of Allowed Class 4 claims
will receive Securities sufficient to round up their numbers of
shares of Common Stock and Warrants to which they are entitled,
as aforesaid, to the next higher "round lot" of 100 such shares
of 100 Warrants of any class.
CLASS 4 IS IMPAIRED.
3.5 CLASSES NOT IMPAIRED UNDER THE PLAN. Class 2 not
impaired under the Plan and is conclusively deemed to have
accepted the Plan pursuant to Section 1126(f) of the Bankruptcy
Code and is therefore not entitled to vote on the Plan.
3.6 CONFIRMATION OVER DISSENTING CLASSES. In the
event that one or more Classes do not vote to accept the Plan,
the Debtor intends to seeks confirmation under the "cramdown"
provisions of Section 1129(b) of the Bankruptcy Code and will
amend the Plan accordingly.
ANY HOLDER OF A CLAIM OR INTEREST IN ANY OF
THE ABOVE CLASSES WHO FAILS TO OBJECT IN
WRITING TO THE CLASSIFICATION PROVIDED IN THE
PLAN AT LEAST 20 DAYS PRIOR TO CONFIRMATION
SHALL BE DEEMED TO HAVE ACCEPTED SUCH
CLASSIFICATION AND TO BE BOUND THEREBY. ANY
BALLOT WHICH IS EXECUTED BY A HOLDER OF A
CLAIM WHICH FAILS TO VOTE FOR ACCEPTANCE OR
REJECTION OF THE PLAN SHALL BE DEEMED AN
ACCEPTANCE OF THE PLAN.
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ARTICLE 4. MEANS FOR THE EXECUTION OF THE PLAN
4.1 Any pre-petition default or forfeiture, real or
alleged, by the Debtor shall be deemed vacated and otherwise
cured upon the confirmation of the Plan (or any amendment
hereof).
4.2 On the Confirmation Date, the appointment of the
Disbursing Agent shall automatically and without further act or
order become effective. The Disbursing Agent shall have the
duties, responsibilities, rights and authority set forth in the
Plan and such incidental and implied rights and authority as may
be necessary to implement the Plan.
4.2.1 On and after the Confirmation Date,
(a) the Disbursing Agent shall exercise the
rights, powers, and duties which it has under the
Plan, and such additional rights, powers, and
duties as are set forth in the Confirmation Order
or are reasonably required for the performance and
implementation of the Plan; and (b) the Disbursing
Agent shall implement and effectuate all
provisions of the Plan in accordance with its
terms.
4.2.2 Subject to the provisions of the Plan,
the Disbursing Agent shall have full right and
power to distribute the Securities Assets in
accordance with the Plan and shall have power and
authority, as is reasonably necessary or
appropriate, to enable it to exercise and perform
the rights, duties, and responsibilities of the
Disbursing Agent under the Plan.
4.3 The Debtor shall have the power and authority to
review all Claims and may, in its discretion, (1) commence
actions to assert any such Bankruptcy Claims or Non-Bankruptcy
Claims that they determine should be commenced and (2) prosecute,
compromise and settle all such actions on such terms as it deems
appropriate. The Debtor is authorized and empowered to assert,
litigate, and settle objections to Disputed Claims, including
insider or Related Party Claims.
4.4 The Debtor shall fund the Plan from its Cash on
hand and by the issuance of: Securities by the Reorganized Debtor
after the merger of Debtor into ORA.
4.5 REORGANIZED DEBTOR. On the Effective Date, the
Debtor will merge into ORA. The present management of ORA will
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continue as the management of the Reorganized Debtor. The
current officers and management of the Debtor will resign. The
authorized stock of the Reorganized Debtor will be
30,000,000 shares of Common Stock, $.001 par value, and
5,000,000 shares of preferred stock, $.001 par value. The
Securities provided for in the Plan will be issued by the
Reorganized Debtor to the Claimants as contemplated thereby, and
the Reorganized Debtor will commit to reserve a sufficient number
of shares of Common Stock to meet its obligation to issue such
shares upon the exercise of Warrants. The current shareholders
of Alliance will hold 5,000,000 shares of Common Stock as of the
Effective Date.
4.6 EXEMPTION FOR SECURITIES LAWS. The securities to
be issued by the Reorganized Debtor will be issued pursuant to
the exemption provided for under Section 1145 of the Bankruptcy
Code. The securities shall bear the legend required by the
Office of the United States Trustee, which is as follows:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND WERE ISSUED
PURSUANT TO AN EXEMPTION PROVIDED BY 11
U.S.C. SECTION 1145, UNDER AN ORDER CONFIRMING
PLAN IN A CASE ENTITLED, IN RE NORTH AMERICAN
ENERGY OF DELAWARE, INC. IN THE UNITED STATES
BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK. THE HOLDER OF THIS CERTIFICATE IS
REFERRED TO 11 U.S.C. SECTION 1145(B) AND
(C) FOR GUIDANCE AS TO THE SALE OF THESE
SECURITIES.
4.7 As soon as practical after the Effective Date, the
Disbursing Agent for the Debtor shall issue payment to those
claimants, if any, receiving a Cash distribution and the Exchange
Agent appointed by the Reorganized Debtor shall issue the Securi
ties to those Claimants receiving same, against surrender of the
certificates representing their shares, if any, of the Debtor's
stock.
ARTICLE 5. PROVISIONS CONCERNING DISTRIBUTIONS
5.1 MANNER OF PAYMENTS UNDER THE PLAN. Payments to be
made pursuant to the Plan shall be made by check drawn on a
domestic bank.
5.2 MANNER OF DISTRIBUTION OF SECURITIES UNDER THE
PLAN. Promptly after the Distribution Date, the Exchange Agent
will mail Transmittal Letters to each person who will be
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receiving Securities in exchange for a Stock Interest in the
Debtor, pursuant to which the holders of such Stock Interests
will be instructed to send their stock certificates, if any,
representing stocks in the Debtor, to the Exchange Agent, who
upon the receipt thereof, will mail to each such person
certificates representing the Securities to which such person is
entitled. The Transmittal Letter will contain instructions
relating to such exchange, including the procedure to be followed
in the case of lost certificates. At the same time that the
Transmittal Letters are mailed, the Exchange Agent will
distribute certificates representing Securities to Claimants who
are to receive such Securities in exchange for Claims other than
outstanding stock.
5.3 ROUNDING TO THE NEAREST DOLLAR. Any other
provision of the Plan to the contrary withstanding, no payments
of portions of a Dollar will be made. Whenever any payment of a
portion of a Dollar would otherwise be called for, the actual
payment shall reflect a rounding of such fraction up or down to
the nearest whole Dollar.
5.4 ROUNDING TO THE NEAREST SHARE OR WARRANT. Under
the Plan, each Claimant receiving Securities will receive numbers
of shares of Common Stock or Warrants which have been rounded up
to the next higher "round lot" of shares or Warrants, being a
multiple of 100 shares or 100 Warrants of any Class. For example
only, if a Claimant is entitled to 201 shares or Common Stock or
201 Class A, B C or D Warrants, the Reorganized Debtor shall
issue enough additional such shares or Warrants to round the
number of shares or Warrants up to 300. The Reorganized Debtor
will issue shares and Warrants to accomplish such rounding up in
addition to the numbers of shares and Warrants set forth in
Section 3.4 of the Plan.
5.5 UNCLAIMED CASH. Except as otherwise provided
herein, in the event any Claimant fails to claim any Cash within
90 days from the date such Cash is distributed, such Claimant
shall forfeit all rights thereto, and to any and all future
payments, and thereafter the Claim for which such Cash was
distributed shall be treated as a Disallowed Claim. In this
regard, distributions to Claimants entitled thereto shall be sent
to their last known address set forth on a proof of claim filed
with the Court or, if no proof of claim is filed, on the
schedules fired by the Debtor, or to such other address as may be
designated by a Claimant, in a writing, delivered to the Debtor,
with a copy to the Debtor's counsel, at least one week prior to
the distribution. All unclaimed Cash shall be returned to the
Debtor.
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5.6 UNCLAIMED SECURITIES. Until any person who is
entitled to Securities surrenders the certificates representing
the stock of the Debtor currently owned by such person for
exchange, the currently outstanding certificates representing
such stock to be exchanged will, effective on the Effective Date,
represent the right to receive the Securities for which such
stock is to be exchanged under the Plan. Except as otherwise
provided herein, in the event any Claimant, other than a holder
of stock of the Debtor, fails to claim any Securities within
90 days from the date such Securities are distributed, such
Claimant shall forfeit all rights thereto, and thereafter the
Claim for which such Claim was to be exchanged shall be treated
as a Disallowed Claim. The provisions of Section 5.5 hereof,
regarding addresses shall apply to non-stock Claims to be
exchanged for Securities.
5.7 DISTRIBUTED PAYMENTS OR DISTRIBUTION. In the
event of any dispute between and among Claimants (including the
Entity or Entities asserting the right to receive the disputed
payment or distribution) as to the right of any Entity to receive
or retain any payment or distribution to be made to such Entity
under the Plan, they may, in lieu of making such payment or
distribution to such Entity, make it instead into an escrow
account or to a disbursing agent, for payment or distribution, as
ordered by a court of competent jurisdiction, or as the
interested parties to such dispute may otherwise agree among
themselves.
5.8 FULL AND FINAL SATISFACTION. The distributions
accorded under this Plan shall be in exchange for and in complete
satisfaction, discharge, and release of all Claims of any nature
whatsoever (including without limitation, any interest otherwise
accrued or accruing thereon from and after the Filing Date to and
until the Confirmation Date) against the reorganized Debtor, and
except as otherwise provided herein, upon the Confirmation Date,
all Claims against the reorganized Debtor shall be satisfied,
discharged, and released in full and in consideration of the
distribution on account of such Claims; and. all Claimants shall
be absolutely barred and precluded from asserting against the
reorganized Debtor's assets or properties, any other, further, or
alternative Claim based on any act or omission, transaction, or
other activity of any kind or nature that occurred on or prior to
the Effective Date of the Plan.
5.9 NO WAIVER. Nothing in the Plan shall constitute,
nor act or be construed to act as a release or waiver of any
Claims of the Debtor against any creditor, or other party or
Entity or any successors, affiliates, officer, directors,
shareholder, employee, representative or agent thereof.
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ARTICLE 6. TREATMENT OF EXECUTORY CONTRACTS AND LEASES
6.1 Except as provided herein, any and all executory
contracts of the Debtor that have not been assumed or rejected
herein, or in the order confirming the Plan, or by an Order of
the Bankruptcy Court prior to the Effective Date or pursuant to a
proceeding or motion commenced prior to the Effective Date, are
hereby rejected pursuant to Section 365 of the Bankruptcy Code.
6.2 Any Entity whose Claim arises from rejection of an
executory contract or lease shall, to the extent such Claim
becomes an allowed Claim, have the rights of a pre-petition
general unsecured creditor with respect thereto, subject to any
objections, defenses, set offs or counterclaims Debtor may have
thereto.
6.3 Any Entity who has a Claim against the Debtor by
virtue of the rejection of any executory contract or lease, and
for which Claim the Court has not set a final date by which such
Claim must be submitted, such Entity may file a Claim with the
Clerk of the Bankruptcy Court and serve a copy of same upon the
Debtor and Debtor's counsel within 30 days following the
Confirmation Date or order authorizing such rejection, whichever
is earlier. If such Claim is not filed within the specified
time, it shall be forever barred from assertion against the
Debtor or its property.
ARTICLE 7. PROCEDURES FOR RESOLVING DISPUTED CLAIMS
7.1 THE TIME FOR OBJECTIONS TO CLAIMS. Objections to
Claims shall be filed by the Debtor with the Court and served
upon each holder of each of the Claims to which objections are
made at any time prior to 45 days after the Confirmation Date, or
within such other time period as may be fixed by the Court.
7.2 RESOLUTION OF DISPUTED CLAIMS. Unless otherwise
ordered by the Court, the Debtor may litigate to judgment, settle
or withdraw objections to any Disputed Claim, in Its sole discre
tion, and without notice to any party in interest other than the
Disputed Claimholder and the U.S. Trustee.
7.3 PAYMENTS. Payments and distributions to each
holder of a Disputed Claim that ultimately becomes an Allowed
Claim shall be made in accordance with the provisions of the Plan
with respect to the Class of Creditors to which the respective
holder of an Allowed Claim belongs. Such payments and
distributions shall be made as soon as practicable after the date
that the Court enters a Final Order allowing such Claim but not
later than 30 days thereafter. Payments shall be made as and
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when a Disputed Claim has become, in whole or in part, an Allowed
Claim or a Disallowed Claim, pursuant to a Final Order or
agreement between the Debtor and such Claimant.
7.4 DISPUTED PAYMENTS OR DISTRIBUTIONS. In the event
of any dispute between and among Claimants (including the Entity
or entities asserting the right to receive the disputed payment
or distribution) as to the right of any Entity to receive or
retain any payment or distribution to be made to such Entity
under the Plan, the Disbursing Agent shall, in lieu of making
such payment or distribution to such Entity, retain such payment
pending a Final Order of a court of competent jurisdiction or an
agreement among the interested parties to such dispute.
ARTICLE 8. DEFAULT
8.1 Failure of the Debtor to mail or otherwise attempt
to deliver the Cash distributions required under the Plan to any
and all creditors holding Allowed Claims to their last known
address as set forth in their Proof of claims or Debtor's sched
ules, within 30 days of the Distribution Date, or failure of the
Debtor to comply with any of the covenants or obligations
contained in the Plan, which failure shall remain uncured for a
period of ten days after notice and an opportunity to cure, shall
constitute a default under the Plan. The foregoing shall not be
construed to prevent the implementation of any modification to
the Plan, made in accordance with the provisions of the
Bankruptcy Code.
ARTICLE 9. RETENTION OF JURISDICTION
9.1 The Court shall retain jurisdiction of this
Chapter 11 case pursuant to and for the purposes set forth in
Section 1127(b) of the Code and:
(a) to hear and determine all controversies con-
cerning allowance of Claims;
(b) to determine any and all applications for
compensation for Professional Persons and similar fees
payable by the Debtor for services rendered during the
Bankruptcy or to resolve invoices disputed by the
Debtor between confirmation and a final decree entered
in this case;
(c) to hear and determine any and all pending
applications for the rejection or assumption or for the
assumption and assignment, as the case may be, of
executory contracts to which the Debtor is a party or
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with respect to which Debtor may be liable, and to hear
and determine, and if need be to liquidate, any and all
Claims arising therefrom;
(d) to determine any and all applications, adver
sary proceedings, and contested or litigated matters
properly before the Court;
(e) to modify the Plan pursuant to Section 1127
of the Bankruptcy Code or to remedy any defect or
omission or reconcile any inconsistency in the
Confirmation Order to the extent authorized by the
Bankruptcy Code;
(f) to hear and determine all controversies,
suits and disputes, if any, as may arise in connection
with the interpretation or enforcement of the Plan;
(g) to hear and determine all controversies,
suits and disputes, if any, as may arise with regard to
orders of this Court in the Chapter 11 case entered on
or before the Effective Date;
(h) to hear and determine any and all
controversies and disputes arising under, or in
connection with, the Plan;
(i) to adjudicate all controversies concerning
the classification of any Claim or Stock Interest;
(j) to litigate damages in connection with any
disputed, contingent or unliquidated Claims;
(k) to adjudicate all Claims to a security or
ownership interest in any property of the Debtor or in
any proceeds thereof;
(l) to adjudicate all Claims or controversies
arising out of any purchases, sales or contracts made
or undertaken by the Debtor during the pendency of the
Chapter 11 case;
(m) to recover all assets and proper-ties of the
Debtor wherever located, including the prosecution and
adjudication of all causes of action available to the
Debtor as at the Effective date;
(n) to enter any order, including injunctions
necessary to enforce the title, rights and powers of
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the Debtor and to impose such limitations,
restrictions, terms and conditions on such title,
rights and powers that the Court may deem necessary or
appropriate;
(o) to enter an order of Final Decree concluding
and terminating the Chapter 11 case;
(p) to hear and determine adversary proceedings
seeking the recovery of fraudulent conveyances,
preferences or property or assets of the Estate; and
(q) to make such orders as are necessary or
appropriate to carry out the provisions of the Plan,
including but not limited to orders interpreting,
clarifying or enforcing the provisions thereof.
ARTICLE 10. MISCELLANEOUS PROVISIONS
10.1 PAYMENT DATES. If any payment or act under the
Plan is required to be made or falls on a date which shall be a
Saturday, Sunday or legal holiday, then the making of such
payment or the performance of such act may be completed on the
next succeeding business day, but shall be deemed to have been
completed as of the required date.
10.2 NOTICES. Any notice to be provided under the Plan
shall be in writing and sent by certified mail, return receipt
requested, postage pre-paid (with additional copy to Debtor's
counsel by telefax); or by hand delivery, addressed as follows:
If to the Debtor:
North American Energy of Delaware, Inc.
555 Madison Avenue, 22nd Floor
New York, New York 10022
With a copy to:
Ballon Stoll Bader & Nadler, P.C.
1450 Broadway-14th Floor
New York, New York 10018-2268
FAX No. (212) 764-5060
The Debtor may designate in writing any other address for
purposes of this section, which designation shall be effective
upon receipt, which receipt shall be deemed to be on the third
business day after mailing. Any payment required under the Plan
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shall be deemed to have been paid on the date when such payment
is mailed.
10.3 HEADINGS. The headings used in the Plan are
inserted for convenience only and are not to be deemed a substan
tive portion of the Plan nor in any manner are they to affect the
provisions of the Plan.
10.4 SEVERABILITY. Should any provision in the Plan be
determined to be unenforceable, such determination shall in no
way limit or affect the enforceability or operative effect of any
and all other provisions of the Plan.
10.5 GOVERNING LAW. Except to the extent that the
Bankruptcy Code is applicable, the rights and obligations arising
under the Plan shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York.
10.6 SUCCESSORS AND ASSIGNS. The rights and
obligations of any Entity named or referred to in the Plan shall
be binding upon, and shall inure to the benefit of, the successors
and assigns of such Entity.
10.7 RE-VESTING OF PROPERTY UPON CONFIRMATION. Upon
confirmation, the Reorganized Debtor shall be vested with all
property of the Debtor free and clear of Claims and interest
except as set forth in the Plan, and after Confirmation the
Reorganized Debtor shall continue its business and manage its
affairs without further supervision of the Court subject to the
retention of jurisdiction provisions, as set forth herein.
10.8 THE DEBTOR. Upon the Effective Date, the Debtor
shall be merged into ORA pursuant to the Merger Agreement, upon
which merger the Debtor will be extinguished as a legal entity
and ORA Electronics, Inc. shall be the surviving corporation
(herein defined as the "Reorganized Debtor").
10.9 OFFSETS. The Debtor will be entitled to offset
any amounts legally due from any creditor against the amount of
the Allowed Claim of such creditor.
10.10 RESERVATION OF RIGHTS. The Debtor reserves the
right, in its sole and absolute determination, to modify or to
revoke and withdraw the Plan before the Confirmation Date. In
the event that the Plan is not confirmed, neither the Plan nor
related documents nor any statement contained in the Plan or in
such related documents may be used or relied upon in any manner
in any action, proceeding, or controversy within or outside of
the Chapter 11 Case, and, in such event, (i) the Plan shall be
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deemed null and void and (ii) nothing contained in the Plan or in
related documents shall be deemed to constitute a waiver or
release of any Claim against the Debtor or to prejudice in any
manner the rights of any Entity.
10.11 After Confirmation, the Debtor may, upon order of
the Court, in accordance with Section 1127(b) of the Bankruptcy
Code, remedy any defect or omission or reconcile any
inconsistency in the Plan in such manner as to be necessary to
carry out the purposes and intent of the Plan.
10.12 CONDITIONS TO EFFECTIVENESS OF THE PLAN. Unless
waived in writing by the Debtor, the Plan shall not become
effective unless the following conditions are met:
10.12.1 There have been no material adverse
changes in the Debtor's business or operations since
the Filing Date;
10.12.2 No trustee under Chapter 11 has been
appointed and qualified in the Debtor's case;
10.12.3 No Claims other than those timely filed
with the Court pursuant to the Court's order fixing a
last date for the filing of Claims shall be entitled,
if allowed, to receive distributions under the Plan;
10.12.4 The property of the Debtor's Estate is
free and clear of all liens, claims and encumbrances
(including any claims of constructive trust) not
otherwise herein provided;
10.12.5 There is no stay in effect of the
Confirmation order; and
10.12.6 The Effective Date of the Plan has
occurred.
10.13 CLOSING OF THE CHAPTER 11 CASE. Upon the
Disbursing Agent's completion of all Distributions and the
Debtor' s conclusion of its duties under the Plan, the Debtor
shall (a) file with the Bankruptcy Court a final report as
required by the Bankruptcy Code, the Bankruptcy Rules, and the
Local Bankruptcy Rules for the Bankruptcy Court, and serve such
report upon the United States Trustee. Upon payment of all
compensation and reimbursement of expenses allowed by the
Bankruptcy Court, and any other costs and expenses related to the
administration of the Chapter 11 Case, and upon payment of all
Class 1 - 4 Allowed Claims, and in accordance with the
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provisions of such orders as the Bankruptcy Court may enter,
(a) the Chapter 11 Case shall be closed and (b) the Disbursing
Agent shall be relieved of all of its rights, powers, and duties
under the Plan.
Dated: New York, New York
September 13, 1996
NORTH AMERICAN ENERGY OF DELAWARE,
INC.
By: /s/ R.L. Burke, Pres.
-----------------------------
BALLON STOLL BADER & NADLER, P. C.
By: /s/ Howard Bader
----------------------------
Howard Bader (HB 9744)
Attorneys for Debtor and
Debtor in Possession
1450 Broadway
New York, New York 10018-2268
212.575-7900
Fax 212.764-5060
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