SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2000
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AXIOHM TRANSACTION SOLUTIONS, INC.
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(Exact name of registrant as specified in charter)
California 0-13459 94-2917470
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(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
16 Sentry Park West, Suite 450 - 1787 Sentry Parkway West, Blue Bell, PA 19422
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 591-0940
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On November 8, 1999 (the "Petition Date"), Axiohm Transaction
Solutions, Inc. (the "Company"), and its United States subsidiaries, Axiohm IPB,
Inc., Cognitive Solutions, Inc., Cognitive LLC and Stadia Colorado Corp. (the
"U.S. Subsidiaries", together with the Company, the "Debtors") filed voluntary
petitions for relief under chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the District of
Delaware ("Bankruptcy Court"). The Debtors' chapter 11 cases were consolidated
for administrative purposes and proceeded under Case Number 99-4153 PJW. Since
the Petition Date, the Debtors have continued in possession of their property
and operated and managed their businesses as debtors-in-possession pursuant to
ss.ss.1107 and 1108 of the Bankruptcy Code. As debtors-in-possession, the
Debtors were authorized to operate their businesses in the ordinary course, but
were not able to engage in transactions outside the ordinary course without the
approval of the Bankruptcy Court.
On April 27, 2000, the Bankruptcy Court entered an order confirming the
Debtors' First Amended Plan of Reorganization, As Modified, dated February 25,
2000. Subject to certain conditions, including taking the Company private, the
Plan is expected to take effect in mid-May. In addition, the Bankruptcy Court
approved the Company's exit financing in the form of a new revolving line of
credit in an amount up to $23 million provided by Lehman Commercial Paper, Inc.
Upon the effective date of the Plan, the Company's senior secured term
indebtedness in the amount of $62,650,000 will be refinanced and the holders
thereof will also receive warrants. The holders of general unsecured claims,
including the holders of $120,000,000 in 9.75% Senior Subordinated Notes due
October 1, 2007, will receive 100 percent of the new common stock of the
reorganized Company (except for those shares that maybe reserved for the new
stock management plan to be implemented as of the effective date of the Plan).
The existing common stock and stock options of the Company will be canceled and
extinguished as of the effective date. The old shareholders will receive certain
limited rights to participate in the proceeds of any future public offering or
sale of the reorganized Company within the next five years pursuant to a
Contingent Payment Agreement to be executed by the reorganized Company on the
effective date of the Plan. Holders of the Company's stock options will receive
no distributions under the Plan. All claims of suppliers and other trade vendors
will not be affected by the Plan and will be paid in full.
Under the Plan, the reorganized Company will authorize 10,000,000
shares of new common stock, no par value, 1,000,000 shares of which will be
issued and outstanding as of the effective date. No shares of new common stock
are reserved for future issuance in respect of claims and interests filed and
allowed under the Plan.
As of February 28, 2000, total assets of the Company on a consolidated
basis with its subsidiaries were $117,176,000 and total liabilities on
consolidated basis were $231,823,000.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description of Document
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2 First Amended Plan of Reorganization, as
Modified of Axiohm Transaction Solutions,
Inc., Axiohm IPB, Inc., Cognitive Solutions,
Inc., Cognitive LLC, and Stadia Colorado
Corporation under chapter 11 of the
Bankruptcy Code dated February 25, 2000 (the
"Plan") and Order Approving Confirmation of
the Plan
99 Press release dated May 1, 2000 issued by
the Company.
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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.
Axiohm Transaction Solutions, Inc.
Date: May 11, 2000 By: /s/ Carmen J. Conicelli, Jr.
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Its: Chief Accounting Officer
and Corporate Controller
Exhibit 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
AXIOHM IPB, INC., et al. ) Case No. 99 - 4153 PJW
)
Debtors. ) Jointly Administered
)
FIRST AMENDED PLAN OF REORGANIZATION, AS MODIFIED,
OF AXIOHM TRANSACTION SOLUTIONS, INC.,
AXIOHM IPB, INC., COGNITIVE SOLUTIONS, INC.,
COGNITIVE, L.L.C., AND STADIA COLORADO CORPORATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
February 25, 2000
Prepared by:
Robert J. Dehney
Eric D. Schwartz
Gregory W. Werkheiser
MORRIS, NICHOLS, ARSHT & TUNNELL
1201 N. Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
(302) 658-9200
Lewis S. Rosenbloom
John B. Griffith
Debra A. Riley
McDERMOTT, WILL & EMERY
227 W. Monroe Street
Chicago, IL 60606
(312) 372-2000
Counsel for Axiohm Transaction Solutions, Inc.,
Axiohm IPB, Inc., Cognitive Solutions, Inc.,
Cognitive, L.L.C., and Stadia Colorado Corporation
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INTRODUCTION
AXIOHM TRANSACTION SOLUTIONS, INC. ("ATS"), AXIOHM IPB, INC. ("IPB"),
COGNITIVE SOLUTIONS, INC. ("COGNITIVE SOLUTIONS"), COGNITIVE, L.L.C.
("COGNITIVE"), AND STADIA COLORADO CORP. ("STADIA" AND, COLLECTIVELY WITH ATS,
IPB, COGNITIVE SOLUTIONS, AND COGNITIVE, THE "DEBTORS"), PROPOSE THE FOLLOWING
PLAN OF REORGANIZATION (THE "PLAN") FOR THE RESOLUTION OF ALL CLAIMS AGAINST AND
EQUITY INTERESTS IN THE DEBTORS. REFERENCE IS MADE TO THE DEBTORS' DISCLOSURE
STATEMENT FILED WITH THE COURT (THE "DISCLOSURE STATEMENT"), FOR A DISCUSSION OF
THE DEBTORS' HISTORY, BUSINESSES, PROPERTIES, RESULTS OF OPERATIONS AND
PROJECTIONS FOR FUTURE OPERATIONS, AND FOR A SUMMARY AND ANALYSIS OF THE PLAN
AND CERTAIN RELATED MATTERS. THE DEBTORS ARE THE PROPONENTS OF THE PLAN WITHIN
THE MEANING OF SECTION 1129 OF THE BANKRUPTCY CODE, 11 U.S.C. SS. 1129. ALL
HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS ENTITLED TO VOTE ON THE
PLAN ARE ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR
ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. SUBJECT TO CERTAIN
RESTRICTIONS AND REQUIREMENTS SET FORTH IN THE PLAN, THE DEBTORS RESERVE THE
RIGHT TO ALTER, AMEND, MODIFY, REVOKE OR WITHDRAW THE PLAN PRIOR TO ITS
CONSUMMATION.
ARTICLE I
DEFINITIONS, RULES OF INTERPRETATION,
COMPUTATION OF TIME AND GOVERNING LAW
1.1 DEFINITIONS.
Certain capitalized terms used throughout the Plan are defined in this
Article I. Other capitalized terms found in the Plan shall have the meanings
ascribed to such terms in the Bankruptcy Code or the Bankruptcy Rules (and shall
be construed in accordance with the rules of construction thereunder).
AD HOC COMMITTEE means the group of restricted holders of the Sub-Notes
organized prior to the Petition Date to negotiate with the Companies regarding
the Recapitalization.
ADMINISTRATIVE CLAIM means a Claim for payment of an administrative
expense of a kind specified in Section 503(b) of the Bankruptcy Code and
referred to in Section 507(a)(l) of the Bankruptcy Code, including, without
limitation, the actual, necessary costs and expenses incurred after the
commencement of the Reorganization Cases of preserving the Estates and operating
the businesses of the Debtors, including wages, salaries or commissions for
services, payment of the DIP Facility Claim, compensation for legal and other
services and reimbursement of expenses awarded under Sections 330(a), 331 or
503(b) of the Bankruptcy Code for professionals of the Debtors, the Creditors'
Committee, and the Ad Hoc Committee, certain retiree benefits under Section
1114(e)(2) of the Bankruptcy Code, and all fees and charges assessed against the
Estates under Section 1930 of Chapter 123 of Title 28, United States Code.
AFFILIATE means, with respect to the Debtors, any corporation,
partnership or other entity which, directly or indirectly, controls, is
controlled by or is under common control with any of the Debtors, excluding
natural persons. With respect to any entity other than the Debtors, a
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governmental unit or a natural person, Affiliate means any corporation,
partnership, association or other entity which, directly or indirectly,
controls, is controlled by or is under common control with such entity. For
purposes of this definition, the term "control" means the ownership of more than
20% of the beneficial or voting interest in the corporation or other entity
referred to herein.
ALLOWED ADMINISTRATIVE CLAIM means all or that portion of any
Administrative Claim which (a) has been allowed by a Final Order, (b) was
incurred by the Debtors in the ordinary course of their businesses during the
Reorganization Cases, (c) is allowed pursuant to the Plan, (d) relates to any
payment for retiree benefits required to be made before the Plan is confirmed,
pursuant to Section 1114(e)(2) of the Bankruptcy Code, (e) consists of
reasonable fees and expenses of professionals for the Ad Hoc Committee and the
Indenture Trustee as may be approved by Order of the Court, or (f) consists of
fees and charges assessed against the Debtors under Section 1930 of Chapter 123
of title 28, United States Code.
ALLOWED CLAIM means that portion of any Claim, other than an
Administrative Claim or a Contested Claim, (a) as to which no proof of claim has
been filed and which is scheduled by any of the Debtors pursuant to Section
1111(a) of the Bankruptcy Code, unless scheduled as disputed, contingent or
unliquidated; or (b) as to which a proof of claim has been timely filed under
Section 502 of the Bankruptcy Code and Bankruptcy Rule 3003, provided that (i)
no objection to the allowance of such Claim or motion to disallow or expunge or
limit recovery of such Claim has been interposed or (ii) if such objection or
motion has been filed, such objection or motion has been overruled by a Final
Order, or such Claim has been otherwise allowed by a Final Order (but only to
the extent allowed), and (c) a Claim against the Debtors that is allowed
pursuant to Final Order, or pursuant to the terms of the Plan.
ALLOWED INTEREST means an Interest that is of record as of the
Distribution Record Date in a register that is maintained by or on behalf of any
of the Debtors.
AMENDED AND RESTATED BYLAWS means the Amended and Restated Bylaws of
ATS, IPB, Cognitive Solutions, Stadia and the Amended and Restated Operating
Agreement of Cognitive which shall be substantially in the forms filed with the
Court at least ten (10) days prior to the confirmation hearing on the Plan.
AMENDED AND RESTATED CERTIFICATES OF INCORPORATION means the Amended
and Restated Certificates of Incorporation of ATS, IPB, Cognitive Solutions, and
Stadia. A copy of the forms of Amended and Restated Certificates of
Incorporation will be filed at least ten (10) days prior to the confirmation
hearing on the Plan.
BALLOTS means the ballots accompanying the Disclosure Statement upon
which holders of Impaired Claims or Impaired Interests entitled to vote on the
Plan shall indicate their acceptance or rejection of the Plan in accordance with
the instructions regarding voting.
BANKRUPTCY CODE means Title 11 of the United States Code, 11 U.S.C.ss.
101 et seq., as amended.
BANKRUPTCY RULES means the Federal Rules of Bankruptcy Procedure, as
amended, promulgated under 28 U.S.C. ss. 2075 and the local rules of practice
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and procedure of the Court, as applicable, from time to time in thE
Reorganization Cases.
BAR DATE means February 23, 2000, the date set by the Court as the last
date for filing proofs of Claims against the Debtors, and with respect to Claims
arising from the rejection of executory contracts or unexpired leases, the
earlier of the date set forth in the order rejecting such executory contract or
unexpired lease or thirty (30) days after the Confirmation Date.
BUSINESS DAY means any day except Saturday, Sunday or a "legal holiday"
(as defined in Bankruptcy Rule 9006(a)).
CARL MARKS means Carl Marks Consulting Group LLC.
CARL MARKS WARRANTS means warrants to acquire New Common Stock to be
received by Carl Marks as compensation pursuant to confirmation of the Plan as
set forth in the order approving Employment And Retention Of Carl Marks
Consulting Group LLC To Provide Operational Interim Management For Debtors And
Debtors In Possession dated December 9, 1999.
CASH means cash and cash equivalents.
CLAIM means a claim against any of the Debtors, whether or not
asserted, as defined in Section 101(5) of the Bankruptcy Code.
CLASS means a category of holders of Claims or Interests as classified
in Article III of the Plan pursuant to Section 1123(a)(1) of the Bankruptcy
Code.
COMPANIES means ATS, IPB, Cognitive Solutions, Cognitive, and Stadia.
CONFIRMATION DATE means the date on which the Court enters the
Confirmation Order.
CONFIRMATION ORDER means the order confirming this Plan pursuant to
Section 1129 of the Bankruptcy Code.
CONSUMMATION means the occurrence of the Effective Date.
CONTESTED CLAIM means any Claim with respect to which any of the
Debtors, or any of the Reorganized Debtors, as the case may be, the Creditors'
Committee, or any other party in interest, has filed an objection to the
allowance of such Claim or a motion to expunge or limit the recovery of such
Claim and as to which any such objection or motion has not been withdrawn or
overruled by a Final Order.
CONTINGENT PAYMENT means the payment due from Reorganized ATS under the
Contingent Payment Agreement upon the occurrence of a Triggering Event
calculated as follows: (a) 2 1/2% of the value on the Triggering EveNt Closing
Date of the New Common Stock that was issued on the Effective Date to the
holders of the Sub-Notes, plus (b) 10% of the value on the Triggering Event
Closing Date of the New Common Stock that was issued on the Effective Date to
holders of the Sub-Notes that exceeds $100 million.
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CONTINGENT PAYMENT AGREEMENT means the agreement providing for the
Contingent Payment from Reorganized ATS within five years of the Effective Date
upon the occurrence of a Triggering Event and the distribution of such
Contingent Payment, net of appropriate costs and expenses, to holders of Allowed
Class 7 Interests, which shall be substantially in the form set forth in Exhibit
C attached to the Disclosure Statement.
CORPORATE INDEMNITIES means any pre-petition obligations of the
Debtors, pursuant to their respective corporate charters and by-laws or
agreements entered into any time prior to the Effective Date, to indemnify
former and current directors and officers with respect to all present and future
actions, suits and proceedings against the Debtors or such directors and
officers, based upon any act or omission related to service with, or for on
behalf of the Debtors.
COURT means the United States Bankruptcy Court for the District of
Delaware, or such other court that exercises jurisdiction over the
Reorganization Cases, including the United States District Court of the District
of Delaware to the extent reference of the Reorganization Cases is withdrawn.
CREDIT FACILITY SECURED CLAIMS means all Claims arising under the
Prepetition Credit Agreement.
CREDITOR means any holder of a Claim.
CREDITORS' COMMITTEE means the Official Creditors' Committee appointed
pursuant to Section 1102 of the Bankruptcy Code in the Reorganization Cases.
DTC means the Depository Trust Company.
D&O POLICIES means any and all policies providing the Debtors with
insurance for Corporate Indemnities, including without limitation, the
Directors' and Officers' Liability Policy Number 7944-42-79A MTO issued by
Federal Insurance Company and the tail coverage purchased pursuant to Section
6.2(c) of the Plan.
DEBTORS means the Companies, when acting in their capacities as
representatives of the Estates and debtors in possession.
DIP AGENT is the agent for the DIP Lenders.
DIP FACILITY CLAIM means the amount outstanding on the Effective Date
under that certain Revolving Credit and Guaranty Agreement dated November 9,
1999 by and between the Debtors and Lehman Commercial Paper, Inc. and various
other financial institutions.
DIP LENDER means the post petition lenders to the Debtors and holders
of the DIP Facility Claim.
DISCLOSURE STATEMENT means the Debtors' Disclosure Statement filed with
the Court on February 25, 2000, as it may be amended, modified or supplemented
(and all exhibits or schedules annexed thereto or referenced therein), which
relates to the Plan and which has been prepared and distributed in accordance
with Sections 1125 and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018.
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DISTRIBUTION RECORD DATE means the Business Day immediately preceding
the Effective Date.
EFFECTIVE DATE means a date selected by the Reorganized Debtors that is
no more than ten (10) Business Days following the date on which all conditions
to consummation set forth in Section 8.2 of the Plan have been satisfied or
waived.
ENTITY means a Person or governmental unit or entity.
ESTATES mean the bankruptcy estates of the Companies created by Section
541 of the Bankruptcy Code upon the commencement of the Reorganization Cases.
EXCHANGE ACT means the Securities and Exchange Act of 1934, as amended.
EXCHANGE AGENT means the entity or entities designated pursuant to
Section 5.3 of the Plan to make distributions under the Plan or pursuant to the
Contingent Payment Agreement.
EXIT FINANCING means the post-confirmation credit facility obtained by
Reorganized ATS.
EXIT FINANCING AGREEMENT means the agreement documenting the terms and
conditions of the Exit Financing.
FILE, FILED OR FILING means file, filed or filing with the Court in the
Reorganization Cases or if in connection with a Proof of Claim, with
Poorman-Douglas, the Debtors' claims agent.
FINAL ORDER means an order or judgment entered by the Court or any
other court exercising jurisdiction over the subject matter and the parties (i)
that has not been reversed, stayed, modified or amended, (ii) as to which no
appeal, certiorari proceeding, reargument, or other review or rehearing has been
requested or is still pending, and (iii) as to which the time for filing a
notice of appeal or petition for certiorari shall have expired.
FOREIGN SUBSIDIARY means any direct or indirect subsidiary of ATS that
is organized under the laws of a jurisdiction other than the United States.
IMPAIRED means a Claim or Interest that is impaired within the meaning
of Section 1124 of the Bankruptcy Code.
INDENTURE TRUSTEE means Bank of New York, as trustee under the Sub-Note
Indenture.
INTEREST means the rights and Claims arising from and relating to the
issued and outstanding shares of stock of the Debtors or the rights and Claims
arising from and relating to the owners of options issued by the Debtors.
LITIGATION CLAIMS means all Claims against the Companies asserted under
lawsuits or complaints which are pending as of the commencement of the
Reorganization Cases.
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MANAGEMENT STOCK OPTION PLAN means that certain agreement providing for
the reservation of stock options or other rights with respect to up to ten
percent (10%) of all issued and outstanding shares of New Common Stock on a
fully diluted basis to present and future employees, officers and directors of
the Reorganized Debtors to be designated by the Board of Directors of
Reorganized ATS, and approved by the Creditors' Committee substantially in the
form that will be filed with the Court at least ten (10) days prior to the
confirmation hearing on the Plan.
NEW COLLATERAL DOCUMENTS means the documents necessary to convey a
security interest in and lien against all the assets of Reorganized ATS, the
U.S. Subsidiaries, Axiohm Technologies EURL, and Axiohm SARL on the Effective
Date.
NEW COMMON STOCK means the 10,000,000 shares of Reorganized ATS's new
common stock having no par value per share authorized pursuant to ATS' Amended
and Restated Certificate of Incorporation, 1,000,000 shares of which are to be
issued and distributed in accordance with the Plan constituting 100% of the
total number of shares of such New Common Stock to be issued and outstanding
immediately after the Effective Date.
NEW SECURITIES means, collectively, (a) the New Senior Term Notes, (b)
the New Common Stock, and (c) the New Warrants.
NEW SENIOR TERM LOAN AGREEMENT means the loan agreement under which the
New Senior Term Notes will be issued. A copy of the form of the New Senior Term
Loan Agreement will be filed at least ten (10) days prior to the confirmation
hearing on the Plan.
NEW SENIOR TERM NOTES means the Senior Secured Term Notes of
Reorganized ATS, dated as of the Effective Date, issued pursuant to the New
Senior Term Loan Agreement in the total principal amount not to exceed
$62,650,000 to holders of Credit Facility Secured Claims. A copy of the form of
New Senior Term Notes will be filed at least ten (10) days prior to the
confirmation hearing on the Plan.
NEW WARRANTS means the warrants to purchase shares of New Common Stock,
to be issued by Reorganized ATS and having the terms and conditions set forth in
the New Warrant and described and issued in accordance with section 5.5 of the
Plan to holders of Credit Facility Secured Claims. A copy of the form of New
Warrant will be filed with the Court at least ten (10) days prior to the
confirmation hearing on the Plan.
OLD COMMON STOCK means all the outstanding Common Stock, no par value
per share, of ATS.
OLD OPTIONS means the options outstanding immediately prior to the
Effective Date to purchase Old Common Stock.
OLD SENIOR SECURED NOTES means the notes or documentation evidencing
the Credit Facility Secured Claims.
PERSON shall have the meaning set forth in Section 101(41) of the
Bankruptcy Code.
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PETITION DATE means November 8, 1999, the date the Companies filed
their respective Chapter 11 bankruptcy petitions.
PLAN means this Plan of Reorganization, together with any exhibits or
schedules attached hereto, as they may be amended, modified or supplemented by
the Debtors from time to time in accordance with the provisions set forth
herein, the Bankruptcy Code and the Bankruptcy Rules.
POST-PETITION TRADE CLAIM means any Claim against any of the Debtors
arising from or with respect to the sale of goods or services to any of the
Debtors after the Petition Date.
PREPETITION CREDIT AGREEMENT means that certain Credit Agreement dated
October 2, 1997, as amended, supplemented, or otherwise modified among ATS, the
Senior Lenders, Lehman Brothers Inc., as arranger, Lehman Commercial Paper,
Inc., as syndication agent and as original administrative agent for the Senior
Lenders.
PRIORITY CLAIM means a Claim against any of the Debtors for an amount
entitled to priority under Section 507(a) of the Bankruptcy Code, other than an
Administrative Claim or a Tax Claim.
RECAPITALIZATION means the capital restructuring of the Companies.
REQUIRED LENDERS means Senior Lenders holding in the aggregate
$31,325,000 of Credit Facility Secured Claims.
REORGANIZATION CASES mean the Debtors' cases commenced under Chapter 11
of the Bankruptcy Code.
REORGANIZED ATS means ATS on and after the Confirmation Date, and the
entity that shall succeed to all of the rights and obligations of ATS under the
Plan.
REORGANIZED DEBTORS mean the Debtors on or after the Confirmation Date,
and the entities that shall succeed to all of the rights and obligations of the
Debtors under the Plan.
SECURED CLAIM means any Claim of a creditor secured by a valid,
perfected and enforceable lien on any property of the Estates, but only to the
extent such Claim constitutes a secured claim under Section 506 or 1111(b) of
the Bankruptcy Code.
SECURITIES ACT means the Securities Act of 1933, 15 U.S.C. Sections
771-77aaa, as now in effect or hereafter amended.
SENIOR LENDERS means the holders of Credit Facility Secured Claims.
STOCKHOLDERS AGREEMENT means the Stockholders Agreement affecting the
rights of the holders of New Common Stock, the New Warrants, the Carl Marks
Warrants and management stock options exercisable for New Common Stock, in
substantially the form set forth in Exhibit B attached to the Disclosure
Statement.
SUB-NOTES means the outstanding 9.75% Senior Subordinated Notes due
October 1, 2007 issued pursuant to the Sub-Note Indenture.
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SUB-NOTE CLAIMS means the rights and any and all Claims arising from
and relating to the outstanding Sub-Notes.
SUB-NOTE INDENTURE means the Indenture dated October 2, 1997 by and
among ATS, IPB, Stadia, Cognitive Solutions and the Indenture Trustee that
governs the Sub-Notes.
SUBCLASS means a category of holders of Claims or Interests within a
Class.
TAX CLAIM means a Claim for an amount entitled to priority under
Section 507(a)(7), 507(a)(8) and 502(i) of the Bankruptcy Code, other than a
Claim for a penalty.
TRADE CLAIM means (a) any Claim against any of the Debtors arising from
or with respect to the sale of goods or services prior to the Petition Date, in
the ordinary course of the Debtors' respective businesses; (b) Warranty Claims;
(c) any Claim in respect of salary, benefits or severance of any employee of the
Debtors that is not a Priority Claim; and (d) any Claim by and between any of
the Debtors and any U.S. Subsidiaries or Foreign Subsidiaries.
TRIGGERING EVENT means the occurrence of a future public offering, sale
of all or substantially all of the New Common Stock of Reorganized ATS in a
single transaction or series of related transactions, or other transaction
involving the sale of all or substantially all of the assets of Reorganized ATS
in a single transaction or series of related transactions within five (5) years
of the Effective Date.
TRIGGERING EVENT CLOSING DATE means the date on which the transaction
giving rise to the Triggering Event is closed.
U.S. SUBSIDIARIES means collectively IPB, Cognitive Solutions,
Cognitive and Stadia.
UNIMPAIRED means a Claim or Interest that is not impaired within the
meaning of Section 1124 of the Bankruptcy Code.
WARRANTY CLAIM means any pre-petition obligations of the Debtors to
purchasers of goods pursuant to purchase orders, purchase agreements, warranty
agreements or through custom and practice.
1.2 RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW.
(a) RULES OF INTERPRETATION. For purposes of the Plan: (a) whenever
from the context it is appropriate, each term, whether stated in the singular or
the plural, shall include both the singular and the plural; (b) any reference in
the Plan to a contract, instrument, release, indenture or other agreement or
document being in a particular form or on particular terms and conditions means
that such document shall be substantially in such form or substantially on such
terms and conditions; (c) any reference in the Plan to an existing document or
Exhibit Filed or to be Filed means such document or Exhibit, as it may have been
or may be amended, modified or supplemented; (d) if the Plan's description of
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the terms of an Exhibit is inconsistent with the terms of the Exhibit, the terms
of the Exhibit shall control; (e) unless otherwise specified, all references in
the Plan to Articles, Sections, Clauses and Exhibits are references to Articles,
Sections, Clauses and Exhibits of or to the Plan; (f) the words "herein" and
"hereto" refer to the Plan in its entirety rather than to a particular portion
of the Plan; (g) captions and headings to Articles and Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the interpretation of the Plan; (h) any reference to an entity as a holder of a
Claim or Interest includes that entity's successors, assigns, and affiliates;
and (i) the rules of construction set forth in Section 102 of the Bankruptcy
Code shall apply to the extent such rules are not inconsistent with any other
provision in this Section 1.2(a).
(b) COMPUTATION OF TIME. In computing any period of time prescribed or
allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
(c) GOVERNING LAW. Except to the extent that the Bankruptcy Code or
Bankruptcy Rules are applicable, and subject to the provisions of any contract,
instrument, release, indenture or other agreement or document entered into in
connection with the Plan, 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 Delaware, without giving effect to the principles of conflicts of
law thereof.
ARTICLE II
TREATMENT OF UNCLASSIFIED ADMINISTRATIVE AND TAX CLAIMS
In accordance with Section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Tax Claims, as described below, have not been
classified.
2.1 ADMINISTRATIVE CLAIMS. Unless otherwise agreed to by the Debtors
and the Entity claiming an Allowed Administrative Claim, each holder of an
Allowed Administrative Claim shall receive cash (or in the case of Carl Marks,
cash and Carl Marks Warrants consistent with its engagement) equal to the unpaid
portion of such Allowed Administrative Claim on the later of (i) the Effective
Date, and (ii) the date on which such Claim becomes an Allowed Administrative
Claim; provided, however, that Administrative Claims that represent liabilities
incurred by any of the Debtors in the ordinary course of their businesses during
the Reorganization Cases shall be paid in the ordinary course of their
respective businesses and in accordance with any terms and conditions of any
agreements relating thereto. On the Effective Date, the DIP Facility Claim shall
be paid in full.
2.2 BAR DATE FOR ADMINISTRATIVE CLAIMS.
(a) PRE-CONFIRMATION DATE CLAIMS AND EXPENSES. All applications for
final compensation of professional persons for services rendered and
reimbursement of expenses incurred on or before the Confirmation Date and all
other requests for payment of administrative costs and expenses incurred on or
before the Confirmation Date under Section 507(a)(l) or 507(b) of the Bankruptcy
Code or the terms hereof (except only for Post-petition Trade Claims incurred in
the ordinary course of business and claims under 28 U.S.C. ss. 1930) shall be
filed no lateR than 45 days after the Confirmation Date.
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(b) EFFECT OF FAILURE TO TIMELY FILE CLAIM OR REQUEST FOR PAYMENT. Any
request for payment of an Administrative Claim which is not filed by the
applicable deadline set forth above shall be barred. Under no circumstance will
the applicable deadlines set forth above be extended by order of the Court or
otherwise. Any holder of an Administrative Claim who is required to file a claim
or request for payment of such Claim or expenses and who does not file such
claim or request by the applicable bar date shall be forever barred from
asserting such Claim or expense against the Debtors, any property of the Debtors
or any distributions under the Plan.
2.3 TAX CLAIMS. Unless otherwise agreed to by the parties, each holder
of a Allowed Tax Claim will receive cash equal to the unpaid portion of such
Allowed Tax Claim on or as soon as practical after the later of (i) the
Effective Date, and (ii) the date on which such Tax Claim becomes an Allowed Tax
Claim; provided, however, that at the option of any of the Reorganized Debtors,
each Reorganized Debtor may pay Allowed Tax Claims over a period not exceeding
six (6) years after the date of assessment of the Allowed Tax Claim as provided
in Section 1129(a)(9)(C) of the Bankruptcy Code. If any Reorganized Debtor
elects this option as to any Allowed Tax Claim, then the payment of such Allowed
Tax Claim shall be made in equal semiannual installments with the first
installment due on the latest of: (i) the Effective Date, (ii) 30 calendar days
after the date on which an order allowing such Allowed Tax Claim becomes a Final
Order, and (iii) such other time as may be agreed to by the holder of such
Allowed Tax Claim and the Reorganized Debtor. Each installment shall include
simple interest on the unpaid portion of such Allowed Tax Claim, without penalty
of any kind, at the statutory rate of interest provided for such taxes under
applicable nonbankruptcy law; provided, however, that the Reorganized Debtor
shall reserve the right to pay any Allowed Tax Claim, or any remaining balance
of such Allowed Tax Claim, in full, at any time on or after the Effective Date,
without premium or penalty.
ARTICLE III
CLASSIFICATION OF CLAIMS AGAINST AND INTERESTS IN DEBTOR
The classification of the Claims and Interests listed below shall be
for all purposes, including voting, confirmation and distribution pursuant to
the Plan pursuant to Sections 1122 and 1123(a)(l) of the Bankruptcy Code. A
Claim or Interest is in a particular class only to the extent that the Claim or
Interest is an Allowed Claim or Allowed Interest in that Class and has not been
paid, released, or otherwise satisfied before the Effective Date. A Claim or
Interest which is not an Allowed Claim or Interest is not in any class.
The Estates of the Debtors have not been substantively consolidated.
The Claims held against one of the Debtors will be satisfied solely from the
cash and assets of such Debtor, except as specifically set forth herein. Nothing
in this Plan or the Disclosure Statement shall constitute or be deemed to
constitute an admission that one of the Debtors is subject to or liable for any
Claim against the other Debtors. In the event that more than one Debtor is an
obligor in respect of a Claim, whether pursuant to a guaranty or otherwise, the
holder of such Claim shall be entitled to only one distribution in respect of
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the Claim.
3.1 CLASS 1 - PRIORITY CLAIMS.
Class 1 consists of all Priority Claims, not otherwise treated as
unclassified in Article II above.
3.2 CLASS 2 - CREDIT FACILITY SECURED CLAIMS.
Class 2 consists of all Credit Facility Secured Claims.
3.3 CLASS 3 - AMERICAN MAGNETICS CORPORATION SECURED CLAIM.
Class 3 consists of the Claim of American Magnetics Corporation, or its
successors and assigns, pursuant to the Purchase Money Note of DH Technology,
Inc. in the original principal amount of $2,117,707 issued pursuant to the Asset
Purchase Agreement by and among DH Technology, Inc., American Magnetics
Corporation and Group 4 Securitas Holding (A) BV dated April 2, 1997, to the
extent that such Claim is a Secured Claim.
3.4 CLASS 4 - MISCELLANEOUS SECURED CLAIMS.
Class 4 consists of each Claim secured by a security interest in or
lien upon property and not part of Class 2 or Class 3, including other Claims
secured by (a) mechanics' or materialmen's liens, (b) security deposits, or (c)
liens on personal property such as office furniture, telephone systems, copiers,
machinery, equipment, tools and dies. Each Class 4 Secured Claim shall be
treated for all purposes of the Plan and under the Bankruptcy Code as a separate
Subclass of Class 4.
3.5 CLASS 5 - TRADE CLAIMS.
Class 5 consists of all Trade Claims.
3.6 CLASS 6 - GENERAL UNSECURED CLAIMS.
Class 6 consists of all general unsecured Claims not included in any
other Class in the Plan or otherwise provided for in the Plan, including, but
not limited to, (a) Sub-Note Claims, (b) unsecured Litigation Claims, (c)
unsecured Claims evidenced by notes, (d) unsecured Claims arising under asset
purchase agreements or the like, (e) unsecured Claims arising from termination
of contracts and leases prior to the Petition Date, and (f) unsecured Claims for
damages resulting from the rejection of unexpired leases and executory
contracts, unless with respect to (a) through (f), the Creditors' Committee
elects to treat any such Claim as a Class 5 Claim.
3.7 CLASS 7 - OLD COMMON STOCK.
Class 7 consists of all Old Common Stock Interests.
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3.8 CLASS 8 - OLD OPTIONS.
Class 8 consists of all Old Options Interests.
ARTICLE IV
TREATMENT OF CLASSES UNDER THE PLAN
<TABLE>
- ---------------------------------------------------------------------------------------
SUMMARY
=======================================================================================
<CAPTION>
CLASS STATUS
- ---------------------------------------------------------------------------------------
<S> <C>
Class 1 - Priority Claims Unimpaired; deemed to have accepted the Plan
- ---------------------------------------------------------------------------------------
Class 2 - Credit Facility Secured Claims Impaired; entitled to vote
- ---------------------------------------------------------------------------------------
Class 3 - American Magnetics Corporation Impaired; entitled to vote
Claim
- ---------------------------------------------------------------------------------------
Class 4 - Miscellaneous Secured Claims Unimpaired; deemed to have accepted the Plan
- ---------------------------------------------------------------------------------------
Class 5 - Trade Claims Unimpaired; deemed to have accepted the Plan
- ---------------------------------------------------------------------------------------
Class 6 - General Unsecured Claims Impaired; entitled to vote
- ---------------------------------------------------------------------------------------
Class 7 - Old Common Stock Impaired; entitled to vote
- ---------------------------------------------------------------------------------------
Class 8 - Old Options Impaired; deemed to have rejected the Plan
- ---------------------------------------------------------------------------------------
</TABLE>
4.1 PRIORITY CLAIMS.
Allowed Class 1 Claims are Unimpaired. Unless otherwise agreed to by
the Debtors and the Entity holding a Priority Claim, each holder of an Allowed
Claim in Class 1 shall be paid the allowed amount of such Claim in full in cash
on the later of (a) the Effective Date, and (b) the date such Claim becomes an
Allowed Claim.
4.2 CREDIT FACILITY SECURED CLAIMS.
Allowed Class 2 Claims are Impaired. Each holder of an Allowed Class 2
Claim shall receive, in complete settlement, satisfaction and discharge of the
principal portion its Allowed Class 2 Claim its pro rata share of (a) New Senior
Term Notes, and (b) New Warrants. To the extent not previously paid under the
Orders entered by the Court on November 9, 1999 and November 29, 1999, any
accrued and unpaid interest, fees, costs or charges due on Allowed Class 2
Claims shall be paid in cash on the Effective Date.
4.3 AMERICAN MAGNETICS CORPORATION CLAIM.
The Allowed Class 3 Claim is Impaired. The holder of any Allowed Class
3 Claim will receive, in complete settlement, satisfaction and discharge of such
Allowed Class 3 Claim (i) the principal amount of such Allowed Class 3 Claim
payable in twelve equal quarterly installments commencing on the last day of the
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fiscal quarter of the Debtors in which the Effective Date occurs and (ii)
interest from and after the Effective Date on the unpaid principal amount of
such claim based on a 365 or 366 day year and actual days elapsed at a rate of
seven percent (7%) per annum (or such other rate of interest as the Bankruptcy
Court may determine is required to provide such holder with cash payments of a
value as of the Effective Date equal to such Allowed Class 3 Claim) payable
quarterly in arrears in cash commencing on the last day of the fiscal quarter of
the Debtors in which the Effective Date occurs. The holder of any Allowed Class
3 Claim will retain the liens securing such Claim, whether the property subject
to such liens is retained by the Reorganized Debtors or transferred to another
entity, to secure the payment of such Allowed Class 3 Claim as provided
hereunder.
4.4 MISCELLANEOUS SECURED CLAIMS.
Allowed Class 4 Secured Claims are Unimpaired. Unless otherwise agreed
to by the parties, either (a) the legal, equitable and contractual rights of
each holder of an Allowed Secured Claim in any Subclass of Class 4 shall be
unaltered to the extent consistent with Section 506(b) of the Bankruptcy Code by
the Plan, or (b) at the option of any of the Debtors, any Allowed Secured Claim
in any Subclass of Class 4 shall be treated in any other manner that will result
in such Allowed Claim being deemed Unimpaired under Section 1124 of the
Bankruptcy Code. To the extent not previously paid, any accrued and unpaid
interest due on the miscellaneous Secured Claims shall be paid in cash on the
Effective Date.
4.5 TRADE CLAIMS.
Allowed Class 5 Claims are Unimpaired. The legal, equitable and
contractual rights of the holders of Allowed Class 5 Claims shall not be
affected by the Plan. Allowed Class 5 Claims shall survive the discharge
provided for in Section 9.1 of the Plan and Section 1141 of the Bankruptcy Code,
and the rights of a holder of such Claim and the rights of such holder of such
Claim to payment, if any, in respect thereof shall be determined in the manner
in which the amount of such Claim and the rights of the holder of such Claim
would have been resolved or adjudicated if the Reorganization Cases had not been
commenced.
4.6 GENERAL UNSECURED CLAIMS.
Allowed Class 6 Claims are Impaired. On the Effective Date, each holder
of an Allowed Claim in Class 6 shall receive, in complete settlement,
satisfaction and discharge of its Class 6 Claim, its pro rata share of 1,000,000
shares of New Common Stock so that collectively Class 6 Claims shall hold 100%
of the outstanding shares of the New Common Stock of Reorganized ATS on the
Effective Date. If any claims in Class 6 are Contested Claims, Reorganized ATS
shall establish a reserve of New Common Stock equal to the aggregate amount of
New Common Stock that would be distributable to all holders of Contested Claims
if such claims were Allowed in full or in such other reasonable amount
authorized by the Court and shall make an interim distribution of all New Common
Stock that is not reserved to holders of Allowed Claims in Class 6. From time to
time in Reorganized ATS's discretion and, in any event, at such time as all
Contested Claims in Class 6 are resolved by Final Order, Reorganized ATS shall
distribute all reserved New Common Stock (and all dividends or distributions, if
any, previously declared and made by ATS in respect thereof) to holders of
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Allowed Claims in Class 6 such that each holder of an Allowed Claim in Class 6
will have received, on the Effective Date or thereafter, its pro rata share of
the New Common Stock distributable to holders of Allowed Claims in Class 6 as if
such distribution had been made on the Effective Date. Holders of Allowed Claims
in Class 6 shall not be entitled to vote to elect directors of ATS or to
exercise any rights as holders of New Common Stock that is held in reserve until
such New Common Stock has been distributed hereunder. Under certain
circumstances, New Common Stock that is held in reserve hereunder may be sold as
provided in the Stockholders Agreement, with proceeds of such sale to be held by
ATS in reserve in an interest bearing account for distribution at such time as
all Contested Claims in Class 6 are resolved by Final Order.
4.7 OLD COMMON STOCK.
Allowed Class 7 Interests are Impaired. On the Effective Date, all Old
Common Stock shall be cancelled and extinguished and Reorganized ATS shall
accept from the record holders of the Old Common Stock, including DTC, the Old
Common Stock for cancellation. Each holder of an Allowed Interest in Class 7
shall be enjoined from pursuing any Claim against any of the Debtors or
Reorganized Debtors and, shall receive, in complete settlement, satisfaction and
discharge of its Class 7 Allowed Interest, their pro rata share of the
Contingent Payment, if any, due in the future from Reorganized ATS pursuant to
the Contingent Payment Agreement. On the Effective Date, ATS shall execute and
deliver the Contingent Payment Agreement to the Paying Agent defined in section
6.10(a) of the Plan.
4.8 OLD OPTIONS.
Allowed Class 8 Interests are Impaired. The holders of Old Options
shall receive no distributions under the Plan. On the Effective Date, all Old
Options, whether or not vested, shall be cancelled and extinguished.
ARTICLE V
GENERAL PROVISIONS REGARDING TREATMENT OF CLAIMS AND
INTERESTS AND DISTRIBUTIONS UNDER THE PLAN
5.1 DISTRIBUTIONS.
Except as otherwise provided in the Plan, property to be distributed
under the Plan to an Impaired Class (i) shall be distributed on or as soon as
practicable after the Effective Date to each holder of an Allowed Claim or
Allowed Interest who holds an Allowed Claim or Allowed Interest as of the
Effective Date, and (ii) shall be distributed to each holder of an Allowed Claim
of that Class that is allowed after the Effective Date, to the extent allowed,
as soon as practicable after the order of the Court allowing the Claim becomes a
Final Order. Common Stock distributed in respect of Sub-Note Claims shall be
deemed to have been distributed, first, in exchange for the outstanding
principal amount of the Sub-Notes and, second, in exchange for accrued and
unpaid interest, fees, costs and charges. Property to be distributed under the
Plan to a Class that is not Impaired or on account of an Administrative Claim
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shall be distributed on the latest of (i) the distribution dates specified in
the preceding sentence, or (ii) the date on which the distribution to the holder
of the Claim would have been due and payable in the ordinary course of business
or under the terms of the Claim in the absence of the Reorganization Cases.
5.2 DISTRIBUTION RECORD DATE.
As of the close of business on the Distribution Record Date, the
respective transfer registers for the Old Senior Secured Notes, the Sub-Notes
and Old Common Stock as maintained by ATS, or its respective agents, shall be
closed. Neither ATS, the other Debtors, the Reorganized Debtors, the Indenture
Trustee, nor the Exchange Agent shall have any obligation to recognize any
transfer of the Old Senior Secured Notes, the Sub-Notes or Old Common Stock
occurring after the Distribution Record Date.
5.3 EXCHANGE AGENT.
The Debtors may designate an entity or entities to serve as the
Exchange Agent, or may designate itself as the Exchange Agent, to distribute all
the property to be distributed under the Plan, including, without limitation,
the delivery of the New Securities.
5.4 DISTRIBUTIONS - CREDIT FACILITY SECURED CLAIMS.
As a condition to participation under the Plan, the agent for such
Senior Lenders (or if no such agent then exists, any such Senior Lender) (the
"Agent") shall provide to ATS a list setting forth the Senior Lenders and the
amount of the Credit Facility Secured Claims and the amount of such Claims held
by each such Senior Lender, together with a certification by the Agent (or such
Senior Lender) that the list is complete and accurate and reflects the
information contained on the register maintained pursuant to the Prepetition
Credit Agreement as of the Record Distribution Date. The Reorganized Debtors
shall be entitled to rely on the above-described list to determine the identity
of the Senior Lenders. Promptly following the receipt of such certified list,
Reorganized ATS shall deliver to the agent under the New Senior Term Loan
Agreement (which may be the same agreement as the Exit Financing Agreement), the
New Senior Term Notes and New Warrants for delivery to the holders.
5.5 NEW WARRANTS
(a) The New Warrants shall consist of two series (the "Series A
Warrants" and the "Series B Warrants"). Each series of New Warrants shall have
substantially identical terms including weighted average anti-dilution
protection from (i) issuances of New Common Stock below fair market value (other
than the issuance of (x) the Carl Marks Warrants (or shares of New Common Stock
upon the exercise thereof), (y) New Common Stock (or options to acquire New
Common Stock) pursuant to the Management Stock Option Plan or (z) New Common
Stock or options to acquire the same to management employees (or prospective
management employees who accept employment). The New Warrants shall also be
subject to adjustment to reflect dividends, stock splits and reverse stock
splits, recapitalizations and similar events, all as more fully set forth in the
form of New Warrant, a copy of which will be filed with the Court at least ten
(10) days prior to the confirmation hearing on the Plan.
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(b) The Series A Warrants shall be issued on the Effective Date and
shall represent the right to purchase an aggregate of 38,961 shares of the New
Common Stock, representing the right to purchase a number of shares of New
Common Stock equal to 3.75% of the issued and outstanding New Common Stock as of
the Effective Date. The Series A Warrants shall be exercisable at an aggregate
initial exercise price equal to 3.75% of the greater of (a) $45.0 million (i.e.,
a per share price of $43.31), or (b) the excess of $125 million over the
aggregate principal amount of indebtedness under the Exit Financing and New
Senior Term Notes outstanding as of the Effective Date. The exercise period for
Series A Warrants (the "Series A Exercise Period") shall begin at 9:00 a.m.
Eastern Standard Time, on the Effective Date, and shall expire at 5:00 p.m.,
Eastern Standard Time, on the fifth anniversary of the Effective Date.
(c) To the extent that the New Senior Term Notes have not been paid in
full on or prior to the eighteenth month anniversary of the Effective Date (the
"Series B Warrant Issue Date"), Reorganized ATS shall issue the Series B
Warrants on the Series B Warrant Issue Date to record holders of New Senior Term
Notes on such date as set forth in a register provided by the Agent to
Reorganized ATS. The Series B Warrants shall represent the right to purchase the
number of shares of New Common Stock equal to an additional 3.75% of the New
Common Stock outstanding as of the Effective Date, provided that such percentage
shall be reduced ratably in proportion to the reduction of the outstanding
principal amount of the New Senior Term Notes during the period from the
Effective Date through and including the Series B Warrant Issue Date (including
reduction in the principal amount due to amortization on the Series B Warrant
Issue Date). The initial exercise price of the Series B Warrants shall be the
exercise price of the Series A Warrants as of the Series B Warrant Issue Date
taking into account any of the foregoing adjustments applicable to the Series A
Warrant exercise price occurring between the Effective Date and the Series B
Warrant Issue Date. The other terms of the Series B Warrants shall be identical
to the Series A Warrants. The exercise period for Series B Warrants (the "Series
B Exercise Period") shall begin at 9:00 a.m., Eastern Standard Time, on the
Series B Warrant Issue Date, and shall expire at 5:00 p.m., Eastern Standard
Time, on the fifth anniversary of the Effective Date.
(d) Each New Warrant not exercised prior to the expiration of the
Warrant Exercise Period (as defined below) shall become void, and all rights
thereunder shall terminate.
5.6 DISTRIBUTIONS - SUB-NOTES.
On or as soon as possible after the Effective Date, the Exchange Agent
shall provide a letter of direction to DTC, the record holder of the Sub-Notes,
setting forth the appropriate exchange rate for the mandatory exchange of
Sub-Notes for New Common Stock for holders of record of the Sub-Notes on the
Distribution Record Date. Upon receipt of the letter of direction, DTC shall
provide the stock transfer agent with appropriate direction regarding the number
of stock certificates to issue and deliver to DTC. Upon delivery of the stock
certificates to DTC, DTC shall effectuate the exchange to its participants with
appropriate directions, so such participants can take the appropriate actions to
have the stock certificates reissued in the name of the beneficial holders, if
appropriate.
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5.7 UNCLAIMED DISTRIBUTIONS.
If any holder of a Claim or Interest entitled to a distribution
directly from the Exchange Agent or the Reorganized Debtors under the Plan
cannot be located on the Effective Date, such distribution shall be set aside
and maintained by the Exchange Agent. If such person is located within two years
of the Effective Date, such distribution shall be distributed to such person. If
such person cannot be located within two years of the Effective Date, any such
distribution shall become the property of and shall be released to Reorganized
ATS, provided, however, that nothing contained in this Plan shall require the
Exchange Agent or any of the Reorganized Debtors to attempt to locate such
person.
5.8 TAX PROVISIONS.
Pursuant to Section 1146(c) of the Bankruptcy Code, the issuance,
transfer or other exchange of a security, or the making or delivery of an
instrument of transfer under the Plan shall not be taxed under any state or
local law imposing a stamp tax, transfer tax, or similar tax or fee.
5.9 SETOFFS.
The Debtors may, but shall not be required to, setoff
against any Claim (for purposes of determining the allowed amount of such Claim
on which distribution shall be made), any claims of any nature whatsoever that
the Debtors may have against the claimant, but neither the failure to do so nor
the allowance of any Claim hereunder shall constitute a waiver or release by the
Debtors of any such claim the Debtors may have against such claimant.
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 CONTINUED CORPORATE EXISTENCE AND VESTING OF ASSETS IN THE
REORGANIZED DEBTORS.
Each of the Debtors shall, as Reorganized Debtors, continue to exist
after the Effective Date as a separate corporate entity, with all powers of a
corporation under the laws of its state of incorporation or formation and
without prejudice to any right to alter or terminate such existence (whether by
merger or otherwise) under such applicable state law. Except as otherwise
expressly provided in the Plan or in the New Collateral Documents, and subject
to the liens granted to secure the Exit Financing and the New Senior Term Notes,
on the Effective Date, each of the Reorganized Debtors shall be vested with all
of the property of its Estate free and clear of all claims, liens, encumbrances,
charges and other interests, and may operate its business free of any
restrictions imposed by the Bankruptcy Code or by the Court, including, without
limitation, any contracts or leases entered into or assumed by each of the
Debtors after the Petition Date; provided, however, that each of the Reorganized
Debtors shall continue as a debtor in possession under the Bankruptcy Code until
the Effective Date, and, thereafter, each of the Reorganized Debtors may operate
its business free of any restrictions imposed by the Bankruptcy Code or the
Court.
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6.2 PLAN IMPLEMENTATION STEPS.
On or as soon as practicable after the Effective Date (unless otherwise
expressly indicated), the following actions shall be effectuated:
(a) CHANGE OF INCORPORATION.
ATS shall take necessary steps to change its state of incorporation
from California to Delaware.
(b) AMENDED AND RESTATED CERTIFICATES OF INCORPORATION.
Each of the Reorganized Debtors shall file their Amended and Restated
Certificates of Incorporation with the offices of the Secretary of State of the
state under which such entity is organized in accordance with the respective
state law. Each Amended and Restated Certificate of Incorporation shall, among
other things, provide for the prohibition of the issuance of non-voting equity
securities to the extent required by Section 1123(a) of the Bankruptcy Code, and
with respect to Reorganized ATS, authorize the issuance of 10,000,000 shares of
New Common Stock. After the Effective Date, each of the Reorganized Debtors may
amend and restate their Amended Certificates of Incorporation and other
constituent documents as permitted by applicable state law.
(c) AMENDED AND RESTATED BYLAWS.
Each of the Reorganized Debtors shall adopt and effect their Amended
and Restated Bylaws.
(d) D&O TAIL INSURANCE.
Reorganized ATS on behalf of itself and its Affiliates shall purchase
director and officer tail insurance coverage in the same amount as the existing
director and officer insurance policy for a term of not less than six years
following the Effective Date; provided, however, that the cost of such insurance
coverage does not exceed $300,000.
(e) PRIVATIZING ATS.
Reorganized ATS shall take all steps necessary to convert to and
maintain itself as a privately held, non-reporting company, including but not
limited to, filing the appropriate forms with the Securities and Exchange
Commission and applicable stock exchanges and otherwise to ensure Reorganized
ATS will not be a reporting company under the Exchange Act.
(f) STOCK OPTION PLAN.
Reorganized ATS shall adopt and implement the Management Stock Option
Plan.
6.3 NEW SECURITIES.
On the Effective Date, Reorganized ATS (i) shall issue, in accordance
with the provisions of Article V, the New Senior Term Notes, the New Common
Stock and the New Warrants, and (ii) shall execute and deliver the New Senior
Term Loan Agreement, the Stockholders Agreement, and the Contingent Payment
Agreement. In addition, ATS, the U.S. Subsidiaries, Axiohm Technologies EURL,
and Axiohm SARL shall execute and deliver the New Collateral Documents.
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6.4 CANCELLATION OF SECURITIES AND AGREEMENTS.
On the Effective Date, all Old Senior Secured Notes, Sub-Notes, Old
Common Stock, and Old Options, and all documentation related thereto and all
obligations of ATS, the U.S Subsidiaries and the Foreign Subsidiaries under or
in respect of any of the foregoing shall be cancelled and any rights thereunder
terminated. However, the provisions of the Sub-Note Indenture regarding the
rights of the Indenture Trustee to recover its fees, costs and expenses shall
remain in full force and effect to the extent permitted under applicable law.
6.5 DIRECTORS.
Upon the Effective Date, the operation of each of the Reorganized
Debtors shall become the general responsibility of their respective boards of
directors who shall, thereafter, have the responsibility for the management,
control and operation of each of the Reorganized Debtors. Each Reorganized
Debtor's Board of Directors shall be comprised of five (5) directors who shall
be designated by the Creditors' Committee. The names of each of the director
nominees shall be disclosed at or prior to the hearing to consider confirmation
of the Plan. All such directors shall be deemed elected, and those directors not
continuing in office shall be deemed removed therefrom, effective on the
Effective Date, pursuant to the Confirmation Order. Such directors' tenure and
the manner of selection of new directors shall be initially as provided in the
Amended and Restated Certificates of Incorporation and the Amended and Restated
Bylaws.
6.6 OFFICERS.
On the Effective Date, the existing officers of each of the Reorganized
Debtors shall be retained and shall remain as officers and shall continue to
serve until such time as they may resign, be removed or be replaced by the board
of directors of each of the Reorganized Debtors.
6.7 EMPLOYMENT CONTRACTS.
From and after the Effective Date, the Reorganized Debtors may enter
into employment contracts with their respective officers, agents or employees.
6.8 SECTION 1145.
The shares of New Common Stock, the New Warrants, the Carl Marks
Warrants, and the New Senior Term Notes issued pursuant to the Plan shall be
issued pursuant to the exemption from securities registration contained in
Section 1145 of the Bankruptcy Code.
6.9 FRACTIONAL SHARES -
(a) CREDIT FACILITY SECURED CLAIMS EXCHANGE.
Whenever any distribution of a New Warrant would otherwise provide for
distribution of a fractional share of New Common Stock to any holder of an
Allowed Class 2 Claim, the actual New Warrant issued shall reflect a rounding of
such fraction to the nearest whole share (up or down).
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(b) GENERAL UNSECURED CLAIMS EXCHANGE.
Whenever any distribution of a fraction of a share of New Common Stock
to any holder of an Allowed Class 6 Claim would otherwise be called for, the
actual distribution shall reflect a rounding of such fraction to the nearest
whole share (up or down).
6.10 DELIVERY OF THE CONTINGENT PAYMENT AGREEMENT.
On the Effective Date, Reorganized ATS shall execute the Contingent
Payment Agreement, a copy of which is attached to the Disclosure Statement as
Exhibit C and deliver it to the Paying Agent identified below. The provisions of
the Contingent Payment Agreement are incorporated into the Plan, as if the same
were fully set forth herein. Reference should be made to the Contingent Payment
Agreement since not all of such terms and conditions are set forth in this
Section 6.10. It is the intent of the Plan that the provisions of this Section
6.10 shall be consistent with the provisions of the Contingent Payment
Agreement. To the extent, if any, that the provisions of the Contingent Payment
Agreement and the provisions of this Section 6.10 of the Plan may be
inconsistent, the provisions of the Contingent Payment Agreement shall govern.
(a) PAYING AGENT.
The Exchange Agent shall serve as the Paying Agent under the Contingent
Payment Agreement.
(b) POWERS OF PAYING AGENT.
Pursuant to the Contingent Payment Agreement, the Paying Agent shall
have the power and authority to do, among other actions, the following:
(I) Take such actions necessary to verify or confirm the
amount payable under the agreement in the event of
the occurrence of a Triggering Event;
(II) Hire such advisors as are required to perform the
actions required in clause (i) above;
(III) Compensate any such advisors, and itself and pay all
costs and expenses associated therewith before
distributions to holders of Allowed Class 7
Interests; and
(IV) Distribute the Contingent Payment, less expenses, to
satisfy Allowed Class 7 Interests.
(c) LIABILITIES OF PAYING AGENT.
Except as otherwise provided by applicable law: (a) the Paying Agent
shall not be liable to any Person holding a Class 7 Interest, except to the
extent any act or failure to act on the part of the Paying Agent shall
constitute bad faith or gross negligence; (b) the Paying Agent shall be entitled
to rely upon the advice of counsel or other advisors retained, and information
provided by any such Person and shall not be liable for acting or failing to act
in accordance with such advice or in reliance on such information; and (c) all
actions taken and determinations made by the Paying Agent, unless otherwise
expressly provided in the Contingent Payment Agreement, the Plan, or an order of
the Court, shall be final and binding upon all Persons having any interest under
the Contingent Payment Agreement.
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(d) DISTRIBUTION.
As soon as practicable following the occurrence of a Triggering Event
and receipt of the Contingent Payment due under the Contingent Payment
Agreement, the Paying Agent shall distribute all proceeds, net of costs and
expenses allowed pursuant to the Contingent Payment Agreement. The Paying Agent
shall pay such distribution to holders of record of ATS's Old Common Stock as of
the Distribution Record Date based upon their pro rata share of the aggregate
number of Old Common Stock outstanding on the Distribution Record Date. In
connection with any such distribution, the Paying Agent shall provide DTC, the
record holder of approximately 20% of Old Common Stock, with the proper letter
of direction to distribute cash payments to beneficial holders of ATS's Old
Common Stock on the Distribution Record Date.
(d) TRANSFERABILITY OF RIGHTS.
All Allowed Class 7 Interests are deemed to be parties to the
Contingent Payment Agreement. The rights of holders of Allowed Class 7 Interests
shall be subject to various restrictions under the Contingent Payment Agreement.
Such rights are not transferable except to the extent provided for in the
Contingent Payment Agreement.
6.11 CORPORATE ACTION.
The adoption of the Amended and Restated Certificates of Incorporation,
the Amended and Restated Bylaws, the selection of directors and officers for
each of the Reorganized Debtors, the issuance and distribution of the New
Securities, the execution and delivery of the Contingent Payment Agreement and
any other contract, instrument, release, document or agreement, and any of the
other matter provided for under the Plan involving the corporate action to be
taken by or required of any of the Reorganized Debtors shall be deemed to have
occurred and be effective as provided herein, and shall be authorized and
approved in all respects without any requirement of further action by
stockholders or directors of any of the Debtors or Reorganized Debtors.
6.12 OTHER DOCUMENTS AND ACTIONS.
Each of the Debtors and the Reorganized Debtors may execute such
documents and take such other action as is necessary to effectuate the
transactions provided for in the Plan.
6.13 THE STOCKHOLDERS AGREEMENT.
All persons receiving New Common Stock, New Warrants, Carl Marks
Warrants or any other option or warrant to acquire New Common Stock (including
persons granted options pursuant to the Management Stock Option Plan) shall be
deemed to be parties to the Stockholders Agreement, whether or not such persons
actually execute a counterpart to the Stockholders Agreement, and all New Common
Stock, New Warrants, Carl Marks Warrants and any other option or warrant to
acquire New Common Stock shall be subject to the Stockholders Agreement.
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ARTICLE VII
ACCEPTANCE OR REJECTION OF THE PLAN
7.1 PRESUMED ACCEPTANCE OF PLAN.
The Allowed Claims in Classes 1, 4, and 5 are Unimpaired under the Plan
and the holders of such Allowed Claims are conclusively presumed to have
accepted the Plan.
7.2 DEEMED NON-ACCEPTANCE OF PLAN.
Holders of Class 8 Interests are deemed to have rejected the Plan and
will not be solicited for acceptances or rejections of the Plan.
7.3 VOTING CLASSES.
The Allowed Claims in Classes 2, 3, and 6 and the Allowed Interests in
Class 7 are Impaired; consequently, the holders of Claims and Interests in such
Classes are entitled to vote to accept or reject the Plan.
7.4 ACCEPTANCE BY IMPAIRED CLASSES.
An Impaired Class of Claims shall have accepted the Plan if (i) the
holders (other than those designated under Section 1126(e) of the Bankruptcy
Code) of at least two-thirds in amount of the Allowed Claims actually voting in
such Class have voted to accept the Plan and (ii) the holders (other than those
designated under Section 1126(e) of the Bankruptcy Code) of more than one-half
in number of the Allowed Claims actually voting in such Class have voted to
accept the Plan. An Impaired Class of Interests shall have accepted the Plan if
the holders (other than those designated under Section 1126(e) of the Bankruptcy
Code) of at least two-thirds in amount of such Allowed Interests actually voting
in such Class have voted to accept the Plan.
7.5 NON-CONSENSUAL CONFIRMATION.
The Debtors shall seek confirmation of the Plan under Section 1129(b)
of the Bankruptcy Code in view of the deemed non-acceptance by Class 8. In the
event that any other Impaired Class of Claims or Interests does not accept the
Plan in accordance with Section 1126 of the Bankruptcy Code, the Debtors hereby
request that the Court confirm the Plan in accordance with Section 1129(b) of
the Bankruptcy Code. Subject to Section 1127 of the Bankruptcy Code, the Debtors
reserve the right to modify the Plan to the extent that confirmation pursuant to
Section 1129(b) of the Bankruptcy Code requires modification.
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ARTICLE VIII
CONDITIONS PRECEDENT
8.1 CONDITIONS TO CONFIRMATION.
It is a condition to confirmation of the Plan that the Confirmation
Order be entered by the Court and include provisions:
(a) authorizing each of the Reorganized Debtors to adopt
and file their respective Amended and Restated
Certificates of Incorporation and By-laws;
(b) authorizing the issuance of the New Securities and
any related documents;
(c) authorizing the Reorganized Debtors to execute and
deliver the Exit Financing Agreement;
(d) authorizing Reorganized ATS to execute and deliver
the Contingent Payment Agreement;
(e) authorizing and directing the Exchange Agent, in
accordance with the Plan, to deliver (i) the New
Common Stock to the holders of general unsecured
Claims, and (ii) the New Senior Term Notes and New
Warrants to the holders of Credit Facility Secured
Claims;
(f) authorizing Reorganized ATS to adopt and implement
the Management Stock Option Plan;
(g) authorizing all of the other transactions
contemplated by the Plan in order to effectuate the
Plan;
(h) exempting the New Common Stock, New Senior Term
Notes, Carl Marks Warrants and New Warrants from
registration under the Securities Act and state and
local laws pursuant to Section 1145; and
(i) making the provisions of the Confirmation Order
non-severable and mutually dependent.
8.2 CONDITIONS TO CONSUMMATION.
It is a condition to consummation of the Plan that the following occur:
(a) The Confirmation Order shall contain the provisions
set forth in Section 8.1 of the Plan and the
Confirmation Order shall have become a Final Order;
(b) ATS shall secure and obtain Exit Financing sufficient
to pay in full the DIP Facility Claim and other
Claims required to be paid in cash on or as soon as
practicable after the Effective Date;
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(c) Allowed Class 6 Claims shall not exceed $135,000,000;
(d) The New Senior Term Loan Agreement, the New Senior
Term Notes, New Warrants, and the New Collateral
Documents shall be on terms satisfactory to ATS, the
Required Lenders and the Creditors' Committee;
(e) The Stockholders Agreement shall be on terms
satisfactory to ATS and the Creditors' Committee;
(f) The Contingent Payment Agreement shall be on terms
satisfactory to ATS and the Creditors' Committee;
(g) The Management Stock Option Plan shall be on terms
satisfactory to ATS and the Creditors' Committee; and
(h) Reorganized ATS shall not be a reporting company
under the Exchange Act.
8.3 WAIVER OF CONDITIONS.
The Debtors, with the consent of the Creditors' Committee and Required
Lenders, which consent shall not be unreasonably withheld or delayed, may waive
any condition set forth in this Article VIII at any time, without notice,
without leave of or order of the Court, and without any formal action other than
proceeding to consummate the Plan.
ARTICLE IX
EFFECTS OF PLAN CONFIRMATION
9.1 DISCHARGE OF ALL CLAIMS AND INTEREST AND RELEASES.
(a) Except as otherwise specifically provided by this Plan, the
confirmation of this Plan (subject to the occurrence of the Effective Date)
shall discharge the Companies, the Debtors and the Reorganized Debtors from all
Claims, Administrative Claims and any debt (including, without limitation,
Claims under federal or state securities laws) that arose before the
Confirmation Date, and any debt of the kind specified in Sections 502(g), 502(h)
or 502(i) of the Bankruptcy Code, whether or not a proof of Claim is filed or is
deemed filed, whether or not such Claim is Allowed, and whether or not the
holder of such Claim has voted on this Plan.
(b) Except as otherwise specifically provided by this Plan, in
consideration for the distributions received under the Plan, all holders of
Claims and Interests shall be deemed to have released, remised and forever
discharged the Debtors, the Reorganized Debtors, Affiliates of the Debtors or
Reorganized Debtors, present and former stockholders, directors, officers,
agents or employees, attorneys, advisors of the Debtors or Reorganized Debtors
and their successors and assigns of and from all debts, demands, actions, causes
of action, suits, accounts, covenants, contracts, agreements, promises, damages,
claims and liabilities whatsoever, known or unknown arising from a Claim or
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Interest or based upon the same subject matter as a Claim or Interest and
existing on the Effective Date or which thereafter could arise based on any act,
fact, transaction, cause, matter or thing which occurred prior to the Effective
Date.
(c) Except as otherwise specifically provided by this Plan, any Entity
accepting any distribution pursuant to this Plan shall be presumed conclusively
to have released the Debtors, Reorganized Debtors, and any other Entity
accepting any distribution pursuant to this Plan, successors and assigns of the
Debtors, Affiliates of the Debtors and such Entities, present and former
stockholders, directors, officers, agents, attorneys, advisors, and employees of
the Debtors, such Affiliates and such Entities, and any Entity claimed to be
liable derivatively through any of the foregoing, from any cause of action
arising from or based on the same subject matter as the Claim or Interest on
which the distribution is received. The release described in the preceding
sentence shall be enforceable as a matter of contract against any Entity that
accepts any distribution pursuant to this Plan.
(d) On the Effective Date, the Debtors and the Reorganized Debtors will
be conclusively deemed to release (i) all professionals other than Warburg
Dillon Reed L.L.C. (including, but not limited to, advisors and attorneys)
retained by (A) the Debtors (that were retained in connection with the Debtors'
restructuring, but only as to claims which arise in connection with such
restructuring, or were retained by order of the Court), (B) the Senior Lenders
(or any of them), the Creditors' Committee, the DIP Lenders (or any of them),
and the Ad Hoc Committee, provided that such professionals were disclosed to the
Debtors prior to the Petition Date or retained by order of the Court, and (C)
the Indenture Trustee, and (ii) all directors and officers of the Debtors
holding such offices at any time during the period from and including the
Petition Date through and including the Confirmation Date from all liability
based upon any act or omission related to past service with, for or on behalf of
the Companies or the Debtors except for:
(i) any indebtedness of any such person to the Companies or
the Debtors for money borrowed by such person;
(ii) any set off or counterclaim the Companies or the Debtors
may have or assert against any such person, provided that the aggregate
amount thereof shall not exceed the aggregate amount of any Claims held
or asserted by such person against the Companies or the Debtors, as the
case may be;
(iii) the uncollected amount of any claim made by the
Companies or the Debtors (whether in a filed pleading, by letter or
otherwise asserted in writing) prior to the Effective Date against such
person which claim has not been adjudicated to a Final Order, settled
or compromised; or
(iv) claims arising from the fraud, willful misconduct or
gross negligence of such persons.
(e) On the Confirmation Date, subject to the occurrence of the
Effective Date, the Debtors shall be deemed to have released all causes of
action against the members of the Creditors' Committee, the members of the Ad
Hoc Committee, the DIP Lenders, the Senior Lenders, the holders of Sub-Notes,
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and the Indenture Trustee, in their respective capacities as such and their
respective stockholders, directors, officers, agents, attorneys, advisors and
employees, including without limitation, any causes of action pursuant to
Bankruptcy Code Sections 542, 544, 547, 548, 549 and 550.
(f) Notwithstanding anything herein to the contrary, the foregoing
releases shall be enforced with respect to releases of attorneys by their
clients, only to the extent permitted by applicable canons of ethics and rules
of professional conduct.
(e) The releases set forth herein are in addition to, and not in lieu
of, any other release separately given, conditionally or unconditionally, by the
Debtors or Reorganized Debtors to any other person or entity.
9.2 EXCULPATION.
Neither the Reorganized Debtors, the Creditors' Committee, the Ad Hoc
Committee, the Senior Lenders, the DIP Lenders, nor (as applicable) any of their
respective members, officers, directors, shareholders, employees, agents,
attorneys, accountants or other advisors, shall have or incur any liability to
any holder of a Claim or Interest for any act or failure to act in connection
with, or arising out of, the pursuit of confirmation of the Plan, the
consummation of the Plan or the administration of the Plan or the property to be
distributed under the Plan, except for any act or failure to act that
constitutes fraud, willful misconduct or gross negligence as determined pursuant
to a Final Order, and in all respects, such Entities (a) shall be entitled to
rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan, and shall be fully protected from liability in
acting or in refraining from action in accordance with such advice, and (b)
shall be fully protected from liability with respect to any act or failure to
act that is approved or ratified by the Bankruptcy Court.
9.3 INJUNCTION.
The satisfaction, release and discharge pursuant to Section 9.1 of the
Plan shall also act as an injunction against any Entity commencing or continuing
any action, employment of process, or act to collect, offset or recover any
Claim or cause of action satisfied, released or discharged under this Plan to
the fullest extent authorized or provided by the Bankruptcy Code, including,
without limitation, to the extent provided for or authorized by Sections 524 and
1141 thereof.
9.4 CLAIMS OF SUBORDINATION.
(a) Subject to the Confirmation Order becoming a Final Order (or the
requirement therefor being waived in accordance with Section 8.3) and subject to
the distributions that are required to be made under the Plan as of the
Effective Date to Classes 2, 6 and 7 having been made, as of the Effective Date,
each holder of an Allowed Claim (or claim thereafter Allowed), (i) by virtue of
the acceptance of the Plan by such holder's Class in accordance with Section
1126 of the Bankruptcy Code, (ii) by virtue of the acceptance of the Plan by
such holder, (iii) by virtue of the acceptance of any distribution under the
Plan on account of such Claim or (iv) by virtue of the confirmation of the Plan,
waives, releases and relinquishes any and all rights, claims or causes of action
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arising out of contract or under applicable law, including, without limitation,
any claim under subsections (a) or (c) of Section 510 of the Bankruptcy Code and
the provisions of the Sub-Note Indenture, to the payment and distributions of
the consideration made or to be made hereunder or otherwise consistent with the
Plan to any holder of an Allowed Claim (or claim thereafter Allowed) against the
Debtors.
(b) Pursuant to Bankruptcy Rule 9019, and any applicable state law, and
as consideration for the distributions and other benefits provided under this
Plan, the provisions of this Section 9.4 shall constitute a good faith
compromise and settlement of any causes of action relating to the matters
described in this Section 9.4 which could be brought by any holder of a Claim or
Interest against or involving another holder of a Claim or Interest, which
compromise and settlement shall be approved by the Court as a settlement of all
such causes of action. The Court's approval of this settlement pursuant to
Bankruptcy Rule 9019 and its finding that this is a good faith settlement
pursuant to any applicable state law, including, without limitation, the laws of
the states of California, New York and Delaware, given and made after due notice
and opportunity for hearing, shall bar any such cause of action relating to the
matters described in this Section 9.4 which could be brought by any holder of a
Claim or Interest against or involving another holder of a Claim or Interest.
9.5 TERMINATION OF INDEMNIFICATION OBLIGATIONS.
(a) Termination of Indemnification Obligations. Except as and to the
extent set forth in subSections (b) and (c) of this Section 9.5, and
notwithstanding any other provision of the Plan, all obligations of the
Companies or the Debtors to indemnify, or to pay contribution or reimbursement
to, their present or former directors and officers holding such positions at any
time prior to the Effective Date whether pursuant to its certificate of
incorporation, bylaws, contractual obligations or any applicable laws or
otherwise in respect of all past, present and future actions, suits and
proceedings against any of such directors, and officers based upon any act or
omission related to service with, for or on behalf of the Companies, the
Debtors, or any present or former Affiliate shall prior to the Effective Date be
discharged under the Plan, all such undertakings and agreements shall be
rejected and terminated, and the Reorganized Debtors shall have no obligation
thereunder pursuant to this Plan or otherwise.
(b) Limited Continuing Indemnification.The obligations of the Debtors
pursuant to law or their respective certificates of incorporation or bylaws or
otherwise to indemnify, or to pay contribution or reimbursement to their present
directors, officers, agents, employees and representatives who have held such
position at any time during the period from and including one year prior to the
Petition Date and served in such capacities through the Confirmation Date (the
"Continuing Indemnified Persons") (i) in respect of all past, present and future
actions, suits and proceedings, whether commenced or threatened, against such
Continuing Indemnified Persons, which include obligations based upon any act or
omission arising out of the performance by a Continuing Indemnified Person of
services to the Debtors, its present or former subsidiaries, for or at the
request of the Debtors, prior to the Effective Date, whether prior to the
Petition Date or not (collectively, "Indemnified Claims") and (ii) to the extent
insured pursuant to the D&O Policies, shall not be discharged or impaired by
confirmation of this Plan. The Debtors' discharge and release as provided
herein, except as necessary to be consistent with this Plan, shall not diminish
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or impair the enforceability of any insurance policies that may cover claims
against the Debtors or any other person or entity, including without limitation,
the D&O Policies.
(c) Additional Limited Indemnification for Costs. Notwithstanding the
provisions of subSections (a) and (b) of this Section 9.5, the obligations of
the Debtors and the Reorganized Debtors pursuant to law or their respective
certificates of incorporation or bylaws or otherwise to indemnify, or to pay
contribution or reimbursement to, the Continuing Indemnified Persons, in respect
of legal fees, costs, expert advice and witnesses and expenses ("Defense
Expenses") incurred by the Continuing Indemnified Persons in the defense of
Indemnified Claims shall not be discharged or impaired by reason of confirmation
of this Plan or otherwise and shall not be subordinated under Section 510 of the
Bankruptcy Code or otherwise and shall not be disallowed under Section 502(e) of
the Bankruptcy Code or otherwise to the extent that (i) such Indemnified Claims
are not covered pursuant to the D&O Policies or the policy limits under the D&O
Policies are exceeded, and (ii) such Indemnified Claims do not in the aggregate
exceed $700,000. Upon written request of any one or more Continuing Indemnified
Person, the Board of Directors may, in its reasonable discretion, apply funds
that would be used in respect of the defense of an Indemnified Claim to the
settlement thereof if such settlement payment will be less than the reasonably
anticipated Defense Expenses of such Indemnified Claim and such application
would be in the best interest of the Reorganized Debtors. Any liability of the
Debtors under this paragraph which is attributable to the period from the
Petition Date to the Effective Date and which under the Bankruptcy Code has the
priority of an expense of administration shall be entitled to such priority, but
no aggregate amount of dollars shall be paid by reason of such priority which is
greater than the absolute maximum payable under the paragraph.
(d) Continuing Indemnified Persons shall not be required to file a
Proof of Claim or to seek allowance of an administrative expense to establish
rights preserved under subsections (b) and (c) of this Section 9.5.
9.6 RETENTION OF CAUSES OF ACTION/RESERVATION OF RIGHTS.
(a) Except as and to the extent set forth in Section 9.1(e), nothing
contained in the Plan or the Confirmation Order shall be deemed to be a waiver
or relinquishment of any rights or causes of action that the Debtors or the
Reorganized Debtors may have currently or which the Reorganized Debtors may
choose to assert on behalf of their Estates under any provision of the
Bankruptcy Code or any similar applicable non-bankruptcy law, including, without
limitation, (i) the avoidance of any transfer by or obligation of the Companies
or the Debtors or (ii) the turnover of any property to the Estates, all of which
are expressly reserved by the Plan.
(b) Except as and to the extent set forth in Section 9.1(e),
nothing contained in the Plan or the Confirmation Order shall be deemed to be a
waiver or relinquishment of any claim, cause of action, right of setoff, or
other legal or equitable defense which the Debtors had immediately prior to the
Petition Date, against or with respect to any Claim left unaltered or Unimpaired
by the Plan. The Reorganized Debtors shall have, retain, reserve and be entitled
to assert all such claims, causes of action, rights of setoff and other legal or
equitable defenses which they had immediately prior to the Petition Date fully
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as if the Chapter 11 case had not been commenced; and all of the Reorganized
Debtors' legal and equitable rights respecting any Claim left unaltered or
Unimpaired by the Plan may be asserted after the Confirmation Date to the same
extent as if the Chapter 11 cases had not been commenced.
(c) Notwithstanding any provision of this Plan or the Disclosure
Statement, or any exhibit hereto or thereto, or the Confirmation Order, nothing
herein or in the Disclosure Statement, in any exhibit hereto or thereto or in
the Confirmation Order shall affect any rights preserved pursuant to Section 9.5
of this Plan.
9.7 POST-CONSUMMATION EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS.
Outstanding notes, loan agreements, stock certificates, and other
evidences of Claims against or Interests in the Debtors shall, effective upon
the Effective Date, represent only the right to participate in the
distributions, if any, contemplated by the Plan.
ARTICLE X
ALLOWANCE OF CLAIMS; CONTESTED CLAIMS AND CONTESTED INTERESTS
10.1 ALLOWANCE OF CREDIT FACILITY SECURED CLAIMS.
Credit Facility Secured Claims shall be allowed in an aggregate
principal amount equal to $62,650,000, plus unpaid interest, fees, costs and
charges accrued but not paid as of the Effective Date in accordance with the
terms of the Prepetition Credit Agreement.
10.2 ALLOWANCE OF SUB-NOTE CLAIMS.
Sub-Note Claims shall be allowed in an aggregate principal amount equal
to $120,000,000, plus accrued unpaid interest to the Petition Date of $7,052,500
and expenses reimbursable under the Sub Note Indenture as agreed to by the
Debtors or approved by the Court.
10.3 OBJECTIONS TO CLAIMS.
The Debtors, the Creditors' Committee or any other party-in-interest
may object to the allowance of any Claim filed in the Reorganization Cases. All
objections shall be litigated to a Final Order; provided, however, that the
Debtors or the Reorganized Debtors, or the Creditors' Committee, as the case may
be, may compromise and settle any objections to Claims, subject to the approval
of the Court, and may seek Court estimation of Contested Claims pursuant to
Section 502(c) of the Bankruptcy Code.
10.4 DISTRIBUTIONS.
At such time as a Contested Claim becomes an Allowed Claim, in whole or
in part, the holder of such Claim shall receive the property that would have
been distributed to such holder under the Plan if such Allowed Claim was an
Allowed Claim on the Effective Date. Such distributions shall be made as soon as
practicable after the date that the order or judgment of the Court allowing such
Claim becomes a Final Order. In the event there are Contested Claims requiring
adjudication and resolution, the Debtors reserve the right, or upon order of the
Court, to establish appropriate reserves for satisfaction of those Contested
Claims.
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ARTICLE XI
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
11.1 ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.
On the Effective Date, and to the extent permitted by applicable law
all executory contracts and unexpired leases of each of the Debtors shall be
assumed in accordance with the provisions of Section 365 and Section 1123 of the
Bankruptcy Code, excluding (a) any and all executory contracts or unexpired
leases which are the subject of separate motions filed pursuant to Section 365
of the Bankruptcy Code by the Debtors prior to the commencement of the hearing
on confirmation of the Plan, (b) such contracts or leases as are listed on any
"Schedule of Rejected Executory Contracts and Unexpired Leases" filed by the
Debtors on or before entry of the Confirmation Order, all of which contracts or
leases shall be deemed rejected pursuant to the provisions of Section 365 and
Section 1123 of the Bankruptcy Code, and (c) any and all executory contracts or
unexpired leases rejected prior to entry of the Confirmation Order. Contracts or
leases entered into after the Petition Date will be performed by the Reorganized
Debtors in the ordinary course of their businesses.
11.2 CLAIMS BASED ON REJECTION OF EXECUTORY CONTRACTS OR UNEXPIRED
LEASES.
Any Claims arising out of the rejection of contracts or leases must be
filed with the Court within the time set by any Final Order rejecting such
executory contract or unexpired lease or 30 days after the Confirmation Date.
Any Claims not filed within such time will be forever barred from assertion
against any of the Debtors or Reorganized Debtors, its estate and property.
Unless otherwise provided in this Plan, all such Claims for which proofs of
Claim are required to be filed will be treated as Class 6 Claims.
ARTICLE XII
RETENTION OF JURISDICTION
12.1 RETENTION OF JURISDICTION.
Notwithstanding the entry of the Confirmation Order or the Effective
Date having occurred, the Court shall retain exclusive jurisdiction to the
fullest extent permitted by law for the purposes of resolving all disputes and
other issues presented or arising under this Plan including, without limitation,
to (a) determine any Contested Claims, (b) determine requests for payment of
Claims entitled to priority under Section 507(a)(1) of the Bankruptcy Code,
including compensation of and reimbursement of expenses of parties entitled
thereto, (c) resolve controversies and disputes regarding interpretation and
implementation of the Plan, (d) enter orders in aid of the Plan, including,
without limitation, appropriate orders (which may include contempt or other
sanctions) to protect the Debtors and the Reorganized Debtors, (e) modify the
Plan pursuant to Section 13.2 of the Plan, (f) determine any and all
applications, adversary proceedings and contested or litigated matters pending
on the Effective Date, (g) allow, disallow, estimate, liquidate or determine any
Claim or Interest and enter or enforce any order requiring the filing of any
such Claim before a particular date, provided that, the Court's jurisdiction
shall be concurrent, not exclusive, after the Effective Date with respect to the
enforcement and adjudication of Claims that are Unimpaired, (h) determine any
and all pending applications for the rejection or disaffirmance of executory
contracts or leases, or for the assignment of assumed executory contracts and
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leases, and hear and determine, and if need be to liquidate, any and all Claims
arising therefrom, (i) determine any actions or controversies arising under or
in connection with the Plan, the Disclosure Statement, the Confirmation Order,
or any contract, instrument, release, or other agreement created in connection
with the Plan or the Disclosure Statement and enforce any orders related
thereto, (j) enter and implement orders as are necessary or appropriate if the
Confirmation Order is for any reason modified, stayed, reversed, revoked or
vacated, and (k) enter a final decree closing the Reorganization Cases.
12.2 FAILURE OF COURT TO EXERCISE JURISDICTION.
If the Court abstains from exercising or declines to exercise
jurisdiction, or is otherwise without jurisdiction over any matter arising out
of the Reorganization Case, including the matters set forth in this Article XII,
this Article shall not prohibit or limit the exercise of jurisdiction by any
other court having competent jurisdiction with respect to such matter.
12.3 DISSOLUTION OF CREDITORS' COMMITTEE.
On the Effective Date, the Creditors' Committee shall cease to exist
and its members, employees or agents (including without limitation, attorneys,
investment bankers, financial advisors, accountants and other professionals)
shall be released and discharged from all further authority, duties,
responsibilities, and obligations related to, arising from or in connection with
the Reorganization Cases except with respect to: (i) any objections made by the
Creditors' Committee pursuant to Section 10.3 of the Plan or other matters
pending before the Court to which the Creditors' Committee is a party, until
such objections or matters are resolved, (ii) all fee applications filed or to
be filed after the Effective Date pursuant to Section 330 of the Bankruptcy Code
by or on behalf of any professionals employed by the Debtors or the Creditors'
Committee, and (iii) any post-confirmation modifications to the Plan or
Confirmation Order.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 RETIREE BENEFITS.
On and after the Effective Date, pursuant to Section 1129(a)(13) of the
Bankruptcy Code, each of the Reorganized Debtors shall continue to be obligated
to pay all of their retiree benefits, as that term is defined in Section 1114 of
the Bankruptcy Code, and shall continue to pay such retiree benefits as they
become due at the level established at any time prior to confirmation of the
Plan pursuant to subSection (e)(1)(B) or (g) of Section 1114, for the duration
of the period each of the Debtors have obligated themselves to provide such
benefits; provided, however, that nothing herein shall extend or otherwise
modify the duration of such period or prohibit each of the Debtors' ability or
the Reorganized Debtors' ability to modify the terms and conditions of the
retiree benefits as otherwise permitted by any such plan and otherwise
applicable nonbankruptcy law. Moreover, the Reorganized Debtors shall assume all
obligations relating to the Axiohm IPB, Inc. Retirement Plan for Bargaining
Associates, and those obligations shall survive confirmation of the Plan, remain
unaffected thereby, and will not be discharged. In addition, in accordance with
Section 11.1 of the Plan, the Reorganized Debtors shall assume all obligations
and executory contracts relating to the Debtors' 401K Plan.
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13.2 MODIFICATION OF PLAN.
The Debtors reserve the right, which right may be exercised only with
the prior consent of the Required Lenders and the Creditors' Committee, which
consent should not be unreasonably withheld or delayed, in accordance with the
Bankruptcy Code, to amend or modify the Plan prior to the entry of the
Confirmation Order. After the entry of the Confirmation Order, the Reorganized
Debtors may, upon order of the Court, amend or modify the Plan in accordance
with Section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in the Plan in such manner as may be necessary to
carry out the purpose and intent of the Plan.
13.3 WITHDRAWAL OF PLAN.
The Debtors reserve the right, which right may be exercised only with
the prior consent of the Required Lenders and the Creditors' Committee, which
consent should not be unreasonably withheld or delayed, at any time prior to the
entry of the Confirmation Order, to revoke and withdraw the Plan. If the Debtors
revoke or withdraw the Plan under this Section, or if entry of the Confirmation
Order does not occur, then the Plan shall be deemed null and void. In that
event, nothing contained in the Plan shall be deemed to constitute a waiver or
release of any Claims by or against or any Interests in the Debtors or to
prejudice in any manner the rights of the Debtors in any further proceedings
involving the Debtors.
13.4 PAYMENT DATES.
Whenever any payment to be made under the Plan is due on a day other
than a Business Day, such payment will instead be made, without interest, on the
next Business Day.
13.5 HEADINGS.
The headings used in this Plan are inserted for convenience only and
neither constitute a portion of the Plan nor in any manner affect the provisions
of the Plan.
13.6 SUCCESSORS AND ASSIGNS.
The rights, benefits and obligations of any person or entity named or
referred to in the Plan shall be binding upon, and shall inure to the benefit
of, the heir, executor, administrator, successor or assign of such person.
13.7 PAYMENT OF STATUTORY FEES.
All fees payable pursuant to Section 1930 of Title 28 of the United
States Code, as determined by the Court at the confirmation hearing will be paid
on or before the Effective Date, and to the extent required will be paid until
the Reorganized Cases are closed.
13.8 NOTICES.
Any notice, request or demand given or made under this Plan or under
the Bankruptcy Code or the Bankruptcy Rules shall be in writing and shall be
hand delivered or sent by a reputable overnight courier service, and shall be
deemed given when received at the following addresses whether hand delivered or
sent by overnight courier service:
Nicolas Dourassof
Axiohm Transaction Solutions, Inc.
950 Danby Road
Ithaca, NY 18450
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with a copy to:
Robert J. Dehney
Gregory W. Werkheiser
Morris, Nichols, Arsht & Tunnell
1201 N. Market Street
Wilmington, Delaware 19899-1347
-- and --
Lewis S. Rosenbloom
John B. Griffith
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
Notwithstanding anything to the contrary provided herein, all notices concerning
this Plan shall be served upon the entities prescribed and in the manner
prescribed under the Bankruptcy Code and the Bankruptcy Rules.
13.9 SEVERABILITY OF PLAN PROVISIONS.
If prior to confirmation, any term or provision of the Plan which does
not govern the treatment of Claims or Interests or the conditions to
confirmation or the Effective Date is held by the Court to be invalid, void or
unenforceable, the Court shall have the power to alter and interpret such term
or provision to make it valid or enforceable to the maximum extent practicable,
consistent with the original purpose of the term or provision held to be
invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions of the
Plan will remain in full force and effect and will in no way be affected,
impaired or invalidated by such holdings, alteration or interpretation. The
Confirmation Order shall constitute a final judicial determination and shall
provide that each term and provision of the Plan as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
13.10 EXHIBITS.
Exhibits to the Plan or Disclosure Statement that are not filed
simultaneously with the Plan and Disclosure Statement shall be filed with the
Court not less than fourteen days prior to the first date set for the hearing on
confirmation of the Plan pursuant to the Bankruptcy Rule 3020 and shall be
mailed to the Creditors' Committee, the Senior Lenders and any party in interest
that makes a written request for such Exhibits to the Debtors.
13.11 NO ADMISSIONS.
Notwithstanding anything herein to the contrary, nothing contained in
the Plan shall be deemed as an admission by the Debtors with respect to any
matter set forth herein including, without limitation, liability on any Claim or
the propriety of any Claims classification.
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ARTICLE XIV
CONFIRMATION REQUEST
The Debtors request confirmation of the Plan under Section 1129(b) of
the Bankruptcy Code.
Dated: February 25, 2000
AXIOHM TRANSACTION SOLUTIONS, INC.
AXIOHM IPB, INC., COGNITIVE SOLUTIONS,
INC., COGNITIVE L.L.C., STADIA COLORADO
CORPORATION
By: /S/ NICHOLAS DOURASSOF
-------------------------------------
Name: Nicolas Dourassof
Title: Chief Executive Officer of ATS
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
)
AXIOHM IPB, INC., et al., ) Chapter 11
) Case No. 99-4153
Debtors. ) Jointly Administered
)
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
UNDER 11 U.S.C. SS. 1129 AND RULE 3020 OF THE FEDERAL
RULES OF BANKRUPTCY PROCEDURE CONFIRMING
THE FIRST AMENDED PLAN OF REORGANIZATION, AS MODIFIED,
OF AXIOHM TRANSACTION SOLUTIONS, INC., AXIOHM IPB, INC.,
COGNITIVE SOLUTIONS, INC., COGNITIVE, L.L.C., AND
STADIA COLORADO CORPORATION, DATED AS OF FEBRUARY 25, 2000
Upon the First Amended Plan Of Reorganization, As Modified, Of
Axiohm Transaction Solutions, Inc. ("ATSI"), Axiohm IPB, Inc., Cognitive
Solutions, Inc., Cognitive, L.L.C., And Stadia Colorado Corporation, dated as of
February 25, 2000 (including all amendments and modification thereof and
exhibits thereto, the "Plan"), filed with this Court by the above-captioned
debtors and debtors in possession (collectively, the "Debtors"), and the First
Amended Disclosure Statement, As Modified, Pursuant To Section 1125 Of The
United States Bankruptcy Code With Respect To The First Amended Plan Of
Reorganization, As Modified, Of Axiohm Transaction Solutions, Inc., Axiohm IPB,
Inc., Cognitive Solutions, Inc., Cognitive, L.L.C., And Stadia Colorado
Corporation dated as of February 25, 2000 (the "Disclosure Statement"), filed
with this Court by the Debtors; and upon (a) the hearing before this Court on
February 25, 2000 to consider approval of the Disclosure Statement and (b) the
Order dated February 25, 2000, among other things, (i) approving the Disclosure
<PAGE>
Statement and (ii) scheduling a hearing to consider confirmation of the Plan
(the "Disclosure Statement Order") (D.I. 196); and solicitation of acceptances
of the Plan having been authorized by Order dated February 25, 2000,
establishing voting procedures and approving form of ballots and notices (the
"Voting Procedures Order") (D.I. 197); and upon the Declaration of Debbie Reyes
of Poorman-Douglas Corporation, the balloting agent appointed in the Debtors'
bankruptcy cases, sworn to on April 24, 2000 (the "Voting Declaration") (D.I.
TBD); and upon the Declaration of Stuart J. Groom in Support of Certification of
the First Amended Plan of Reorganization as Modified of Axiohm Transaction
Solutions, Inc., Axiohm IPB, Inc., Cognitive Solutions, Inc., Cognitive, L.L.C.,
And Stadia Colorado Corporation, dated as of February 25, 2000 (D.I. TBD), and
it appearing from the affidavits of mailing and publication filed with this
Court and the Voting Declaration that copies of the Disclosure Statement
(including the Plan as annexed thereto as Exhibit A), notice of the Confirmation
Hearing (as defined herein), the Voting Procedures Order, the Disclosure
Statement Order and ballots for acceptances or rejections of the Plan, were
transmitted to the holders of Claims against and Old Common Stock in ATSI and
other parties in interest as required by the Disclosure Statement Order and the
Voting Procedures Order, and such transmissions at such time being due and
adequate notice under the circumstances, and that notice of the Confirmation
Hearing was published in the manner required by the Disclosure Statement Order;
and the Disclosure Statement Order fixing April 12, 2000 at 4:00 p.m. (Eastern
Standard Time) as the deadline for filing of objections to confirmation of the
Plan; and upon the affidavit of Stuart J. Groom dated April 25, 2000, filed in
support of confirmation of the Plan; and a hearing to consider confirmation of
the Plan having been held before this Court commencing on April 27, 2000 (the
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"Confirmation Hearing"); and upon the full and complete record of the
Confirmation Hearing and all matters and proceedings heretofore part of the
record in these cases; and after due deliberation and sufficient cause appearing
therefore;
FINDINGS OF FACT AND CONCLUSIONS OF LAW
---------------------------------------
IT IS HEREBY FOUND AND DETERMINED THAT:
A. All capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Plan, unless the context
otherwise requires.
B. This Court has jurisdiction over the Reorganization Cases
pursuant to 28 U.S.C. ss.ss. 157 and 1334. Venue is proper before this Court
pursuant to 28 U.S.C. ss.ss. 1408 and 1409. Confirmation of the Plan is a core
proceeding under 28 U.S.C. ss. 157(b)(2), and this Court has exclusive
jurisdiction to determine whether the Plan complies with the applicable
provisions of the title 11 of the United States Code (the "Bankruptcy Code") and
the Federal Rules of Bankruptcy Procedures (the "Bankruptcy Rules") and should
be confirmed.
C. This Court takes judicial notice of the docket of the
Reorganization Cases maintained by the Clerk of the Court and/or its duly
appointed agent, including, without limitation, all pleadings and other
documents filed, all orders entered, and all evidence and arguments made,
proffered or adduced at, the hearings held before the Court during the pendency
of the Reorganization Cases, including, without limitation, the hearing to
consider the adequacy of the Disclosure Statement.
D. The Debtors, as proponents of the Plan, have the burden of
proving the elements of Section 1129 by a preponderance of the evidence.
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E. Notice of the Confirmation Hearing and the relevant
deadlines for submission of objections and ballots, as prescribed by this Court
in the Disclosure Statement Order and the Voting Procedures Order, has been
provided and is adequate and sufficient pursuant to Section 1128 of the
Bankruptcy Code, Rules 2002(b) and 3020 of the Bankruptcy Rules and other
applicable law and rules.
F. Ballots were transmitted to holders of claims in classes
eligible to vote on the Plan (the "Voting Classes") in accordance with the
Disclosure Statement Order and the Voting Procedures Order.
G. The Debtors solicited votes for the Plan from the Voting
Classes in good faith and in a manner consistent with the Bankruptcy Code.
H. The Voting Declaration is consistent with Bankruptcy Rule
3018.
I. The classification scheme of Claims and Interests under the
Plan is reasonable. Claims or Interests in each Class are substantially similar
to other Claims or Interests in such Class and the Plan therefore satisfies the
requirements of Section 1122(a) of the Bankruptcy Code.
J. The Plan provides for the treatment of Allowed
Administrative Claims and Allowed Priority Tax Claims. In addition, the Plan
establishes the following Classes of Claims and Interests: Class 1 (Priority
Claims); Class 2 (Credit Facility Secured Claims); Class 3 (American Magnetics
Corporation Claims); Class 4 (Miscellaneous Secured Claims); Class 5 (Trade
Claims); Class 6 (General Unsecured Claims); Class 7 (Old Common Stock); and
Class 8 (Old Options). The Plan satisfies the requirements of Section 1123(a)(1)
of the Bankruptcy Code.
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K. The following Classes of Claims and Interests are impaired
and comprise the Voting Classes entitled to vote under the Plan: Class 2 (Credit
Facility Secured Claims); Class 3 (American Magnetics Corporation Claims); Class
6 (General Unsecured Claims); and Class 7 (Old Common Stock). All other Classes
of Claims or Interests are either unimpaired under the Plan or, in the case of
Class 8, deemed to reject the Plan by virtue of receiving no distributions
thereunder. The treatment of Claims and Interests in impaired Classes is
specified in Article VI of the Plan, and the Plan satisfies the requirements of
Sections 1123(a)(2) and 1123(a)(3) of the Bankruptcy Code.
L. The Plan provides for the same treatment of each Claim or
Interest of a particular Class, and the Plan satisfies the requirements of
Section 1123(a)(4) of the Bankruptcy Code.
M. The Plan provides for adequate means for its
implementation, and therefore satisfies the requirements of Section 1123(a)(5)
of the Bankruptcy Code.
N. The Plan provides for the amendment of the Certificates of
Incorporation of the Debtors in substantially the form of the Amended and
Restated Certificates of Incorporation of Reorganized Debtors filed with this
Court on April 17, 2000, which prohibits the issuance of nonvoting equity
securities. Any revisions to the Amended and Restated Certificates of
Incorporation filed prior to the Effective Date shall also prohibit the issuance
of a non-voting equity securities. Accordingly, the Plan complies with Section
1123(a)(6) of the Bankruptcy Code.
O. The Plan impairs or leaves unimpaired, as the case may be,
each Class of Claims or Interests, and the Plan therefore complies with the
provisions of Section 1123(b)(1) of the Bankruptcy Code.
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P. The Plan provides for the treatment under Section 365 of
the Bankruptcy Code, of all executory contracts and unexpired leases not
previously assumed or rejected or the subject of a motion either to assume or
reject pursuant to such section, and the Plan therefore complies with the
provisions of Section 1123(b)(2) of the Bankruptcy Code.
Q. Furthermore, the provisions of the Plan constitute a good
faith compromise and settlement of all the Claims and Interests and all
controversies respecting Claims and Interests are resolved pursuant to the Plan.
This Confirmation Order constitutes the Court's approval of all such compromises
and settlements which, based upon the representations by the Debtors and the
Creditors' Committee, all other testimony proffered and evidence introduced at
the Confirmation Hearing and the full record of the Reorganization Cases, the
Court finds to be fair, equitable, within the range of reasonableness and in the
best interests of the Debtors, the Estates, creditors and other parties in
interest. Accordingly, the Plan satisfies Section 1123(b)(3) of the Bankruptcy
Code.
R. Pursuant to Section 1123(b)(3)(B) of the Bankruptcy Code,
the Plan, except as provided thereon, provides for the retention and enforcement
of all claims, rights and causes of action of the Debtors and the Estates,
whether prepetition or postpetition, and regardless of whether such claims,
reports or causes of action arise under any or all agreements and applicable law
or equity exclusively by the Reorganized Debtors. Under the Plan, all such
claims, rights and causes of action of the Debtors and the Estates, upon the
Effective Date, shall vest in the Reorganized Debtors and may be pursued by the
Reorganized Debtors except to the extent released under the Plan. Accordingly,
the retention and enforcement of all claims, rights and causes of action of the
Debtors and the Estates exclusively by the Reorganized Debtors will benefit the
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Debtors' creditors and the requirements of Sections 550(a) and 1123(b)(3)(B) of
the Bankruptcy Code are satisfied.
S. The Plan complies with the applicable provisions of the
Bankruptcy Code, including, without limitation, Sections 1122 and 1123 of the
Bankruptcy Code. Therefore, the Plan satisfies the requirements of Section
1129(a)(1) of the Bankruptcy Code. In addition, in accordance with Bankruptcy
Rule 3016(a), the Plan is dated and identified with the names of the Debtors.
T. The Debtors, as proponents of the Plan, have complied with
the applicable provisions of the Bankruptcy Code including, without limitation,
Sections 1125 and 1126 of the Bankruptcy Code, and therefore have satisfied the
requirements of Section 1129(a)(2) of the Bankruptcy Code, as follows: (a) the
Debtors are proper debtors under Section 109 of the Bankruptcy Code and proper
proponents of the Plan under Section 1121(a) of the Bankruptcy Code; (b) the
Debtors have complied with applicable provisions of the Bankruptcy Code, except
as otherwise provided or permitted by orders of the Court; and (c) the Debtors
have complied with the applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the Disclosure Statement, the Disclosure Statement Order and
the Voting Procedures Order in transmitting notices and solicitation materials
and in soliciting and tabulating votes on the Plan.
U. The Plan has been proposed in good faith and not by any
means forbidden by law. In determining that the Plan has been proposed in good
faith, the Court has examined the totality of the circumstances surrounding the
filing of the Debtors' Reorganization Cases, the negotiation and execution of
the Consent Agreement (as defined in the Disclosure Statement) and the
formulation of the Plan. The Debtors' chapter 11 cases were filed, the Consent
Agreement was negotiated and the Plan was proposed with the proper purpose of
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reorganizing the Debtors, and expeditiously making distributions to their
creditors. Furthermore, the Plan is the product of extensive, arms' length
negotiations among the Debtors, the Ad Hoc Committee, the Creditors' Committee,
the Senior Lenders, other significant stakeholders and their respective counsel
and financial advisors. The Plan reflects the results of these negotiations and
is reflective of the interests of all the Estates' constituencies. Thus, the
Plan satisfies the requirements of Section 1129(a)(3) of the Bankruptcy Code.
V. Any payments made or to be made by the Debtors for services
or for costs and expenses in, or in connection with, the Debtors' chapter 11
cases have, to the extent required by the Bankruptcy Code, the Bankruptcy Rules
and the Orders of this Court, been approved by, or are subject to the approval
of, this Court as reasonable. Accordingly, the Plan satisfies the requirements
of Section 1129(a)(4) of the Bankruptcy Code.
W. The Debtors' Amended and Restated Certificates of
Incorporation and the Debtors' Amended and Restated By-Laws provide that each of
the Reorganized Debtors shall each have a board of directors consisting of five
(5) members. The names and affiliations of the persons designated by the
Creditors' Committee as the initial members of the board of directors of each of
the Reorganized Debtors were disclosed to this Court at the Confirmation Hearing
and may be amended by notice filed with this Court on or before the Effective
Date of the Plan. The appointment to such office of each of the proposed
directors and officers of each of the Reorganized Debtors is consistent with the
interests of creditors and equity security holders and with public policy with
respect to the manner of selection of any officer or director of the Reorganized
Debtors. Accordingly, the Plan complies with Section 1123(a)(7) and 1129(a)(5)
of the Bankruptcy Code.
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X. Section 1129(a)(6) of the Bankruptcy Code issatisfied
because the Plan does not provide for any change in rates over which a
governmental regulatory commission has jurisdiction.
Y. With respect to each impaired Class of Claims against each
Debtor, or the Old Common Stock, each holder of a Claim or Old Common Stock in
such Class: (a) has accepted the Plan; or (b) will receive or retain under the
Plan, on account of such Claim or Interest, property of a value, as of the
Effective Date of the Plan, that is not less than the amount that such holder
would so receive or retain if such Debtor were to be liquidated under chapter 7
of the Bankruptcy Code on such date. Accordingly, the Plan satisfies the
requirements of Section 1129(a)(7) of the Bankruptcy Code.
Z. As evidenced by the Voting Declaration, the Plan has been
accepted by Class 2 (Credit Facility Secured Claims), Class 3 (American
Magnetics Claims), Class 6 (General Unsecured Claims), and Class 7 (Old Common
Stock) of the Voting Classes in accordance with Section 1126 of the Bankruptcy
Code and consistent with Bankruptcy Rule 3018 and the Voting Procedures Order.
AA. The Plan is deemed rejected, pursuant to Section 1126(g)
of the Bankruptcy Code, by the members of Class 8 (Old Options), who will
receive no distribution and retain no interest on account of their respective
Interests.
BB. With respect to each Class of Claims or Interests
designated by the Plan, other than Class 8, either: (a) such Class has accepted
the Plan; or (b) such Class is not impaired under the Plan. Accordingly, the
requirements of Section 1129(a)(8) of the Bankruptcy Code have been satisfied
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with respect to all Claims and Interests other than those in Class 8. The Plan
nevertheless may be confirmed with respect to Class 8 because, as demonstrated
below, the requirements of Section 1129(b) of the Bankruptcy Code are satisfied
with respect to Class 8.
CC. The treatment of Allowed Administrative Claims, Allowed
Tax Claims and Allowed Priority Claims under Sections 4.1 and 5.1 of the Plan
satisfies the applicable requirements of Section 1129(a)(9)(A),(B) and (C) of
the Bankruptcy Code.
DD. The Plan has been accepted by Class 2, Class 3, Class 6
and Class 7, and, therefore, has been accepted by at least one impaired Class of
Claims or Interests, which acceptance has been determined without including any
acceptances of the Plan by any insider holding a Claim in such Class.
Accordingly, the requirements of Section 1129(a)(10) of the Bankruptcy Code are
satisfied with respect to the Plan.
EE. The Plan satisfies Section 1129(a)(11) of the Bankruptcy
Code because confirmation of the Plan is not likely to be followed by
liquidation or the need for further financial reorganization of the Reorganized
Debtors.
FF. The fees payable by the Debtors to the United States
Trustee or the Clerk of this Court, as provided under 28 U.S.C. ss. 1930(a)(6),
constitute administrative expenses entitled to priority under Section 507(a)(1)
of the Bankruptcy Code and the treatment of such fees in the Plan satisfies the
requirements of Section 1129(a)(12) of the Bankruptcy Code.
GG. To the extent the Debtors are required to provide any
retiree benefits (as that term is defined under Section 1114 of the Bankruptcy
Code), such benefits shall be continued under the Plan, and the Plan satisfies
the requirements of Section 1129(a)(13) of the Bankruptcy Code.
HH. The requirements of Section 1129(b) of the Bankruptcy Code
are satisfied as to holders of Old Options in Class 8 because no holder of any
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Interests of ATSI that is junior to the Interests of such Class will received or
retain any property under the Plan on account of such junior Interests.
II. Other than the Plan (including previous versions thereof),
no plan has been filed in these cases. Accordingly, the requirements of Section
1129(c) of the Bankruptcy Code have been satisfied.
JJ. No party in interest that is a governmental unit has
requested that the Court not confirm the Plan on the grounds that the principal
purpose of the Plan is the avoidance of taxes or the avoidance of the
application of Section 5 of the Securities Act of 1933, 15 U.S.C. ss. 77e, and
the principal purpose of the Plan is not such avoidance. Accordingly, the Plan
satisfies the requirements of Section 1129(d) of the Bankruptcy Code.
KK. The modifications of the Plan set forth in paragraph 4
hereof (the "Plan Modifications") do not materially or adversely affect or
change the treatment of any Claim against or Interest in any Debtor.
Accordingly, pursuant to Bankruptcy Rule 3019, the Plan Modifications do not
require additional disclosure under Section 1125 of the Bankruptcy Code or the
resolicitation of acceptances or rejections under Section 1126 of the Bankruptcy
Code, nor do they require that holders of Claims against or Interests in any
Debtor to be afforded an opportunity to change previously cast acceptances or
rejections of the Plan as filed with the Court. Disclosure of the Plan
Modifications on the record at the Confirmation Hearing constitutes due and
sufficient notice of thereof under the circumstances of these Reorganization
Cases.
LL. Based upon the record before the Court, the Debtors and
their agents, counsel and financial advisors have solicited votes on the Plan in
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good faith and in compliance with the applicable provisions of the Bankruptcy
Code and are entitled to the protections afforded by Section 1125(e) of the
Bankruptcy Code and the exculpatory and injunctive provisions set forth in
Article IX of the Plan, as amended in paragraph four (4) herein.
MM. The Debtors, the Creditors' Committee, the Senior Lenders
and each of their respective officers, directors, partners, employees, members,
agents, attorneys, financial advisors, accountants or other professionals, have
acted in good faith and in compliance with the applicable provisions of the
Bankruptcy Code pursuant to Section 1125(e) of the Bankruptcy Code and
1129(a)(3) of the Bankruptcy Code, with respect to the administration of the
Plan, the solicitation of acceptances with regard thereto and the property to be
distributed thereunder.
NN. The Court may properly retain jurisdiction over the
matters set forth in Section 12.1 of the Plan, as amended by paragraph 4 herein.
DECREES
-------
NOW THEREFORE IT IS HEREBY ORDERED, ADJUDGED, DECREED AND
DETERMINED THAT:
1. To the extent that any objections have not been withdrawn
prior to the entry of this Confirmation Order or are not resolved by the relief
granted herein or as stated on the record of the Confirmation Hearing, all such
objections are hereby overruled.
2. The findings of this Court set forth above and the
conclusions of law stated herein shall constitute findings of fact and
conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this
proceeding by Bankruptcy Rule 9014. To the extent any findings of fact shall be
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determined to be a conclusion of law, it shall be so deemed, and vice versa.
3. The Plan complies with the requirements of Sections 1122,
1123 and 1129 of the Bankruptcy Code.
4. The Plan is hereby modified pursuant to Section 1127(a) of
the Bankruptcy Code and Section 13.2 of the Plan as follows:
(a) Article IV of the Plan is hereby amended by inserting the
following language after Section 2.3 of the Plan:
"Notwithstanding anything in this Plan to the
contrary, the Bankruptcy Court shall not retain
jurisdiction with respect to the Tax Claims of State
of New Jersey, Division of Taxation ("NJ Division")
except for (i) resolving the amount, allowability and
priority of any such Tax Claim arising prior to
confirmation, and (ii) enforcing the discharge
provisions of the Plan. The Tax Claim of the NJ
Division shall be paid in cash as soon as practical
after the later of (i) the Effective Date, and (ii)
the date on which such Tax Claim becomes and Allowed
Tax Claim; provided, however, at the election of the
Reorganized Debtors, the Reorganized Debtors may pay
NJ Division's Allowed Tax Claims over a period not
exceeding six (6) years after the date of assessment
of its Allowed Tax Claim as provided in Section
1129(a)(9)(C) of the Bankruptcy Code. If the
Reorganized Debtors elects this option as to NJ
Division's Allowed Tax Claim, then the payment of
such Allowed Tax Claim shall be made in equal monthly
installments with the first installment due on the
later of: (i) the Effective Date, (ii) 30 calendar
days after the date on which an order allowing such
Allowed Tax Claim becomes a Final Order, and (iii)
such other time as may be agreed to by NJ Division
and the Reorganized Debtors. Each installment shall
include simple interest on the unpaid portion of such
Allowed Tax Claim, without penalty of any kind, at
the statutory rate of interest provided for such
taxes under applicable nonbankruptcy law; provided,
however, that the Reorganized Debtors shall reserve
the right to pay any Allowed Tax Claim, or any
remaining balance of such Allowed Tax Claim, in full,
at any time on or after the Effective Date, without
premium or penalty. Further, any failure by the
Reorganized Debtors to make a payment to NJ Division
pursuant to the terms herein shall be an event of
default. If the Reorganized Debtors fail to cure the
event of default as to tax payments within thirty
days after receipt of written notice of default from
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NJ Division, then NJ Division may exercise any and
all rights and remedies it may have under the
applicable state law."
(b) Section 9.1(b) is replaced in its entirety by the
following:
Except as otherwise specifically provided by this
Plan, in consideration for the distributions received
under the Plan, all holders of Claims and Interests
shall be deemed to have released, remised and forever
discharged (a) the Debtors, the Reorganized Debtors
and (b) Affiliates of the Debtors or Reorganized
Debtors present and former stockholders, directors,
officers, agents or employees, attorneys, advisors of
the Debtors or Reorganized Debtors and their
successors and assigns of such parties (such parties
commencing with (b), collectively, the "Released
Parties") of and from all debts, demands, actions,
causes of action, suits, accounts, covenants,
contracts, agreements, promises, damages, claims and
liabilities whatsoever, known or unknown arising from
a Claim or Interest or based upon the same subject
matter as a Claim or Interest and existing on the
Effective Date or which thereafter could arise based
on any act, fact, transaction, cause, matter or thing
which occurred prior to the Effective Date, except as
to Released Parties for acts or omissions which are
the result of fraud, gross negligence, willful
misconduct or willful violation of the securities
laws or the Internal Revenue Code. Subject to the
discharge Sections 524 and 1141 of the Bankruptcy
Code, the releases provided for herein shall not
preclude police, federal tax, or regulatory agencies
from fulfilling their statutory duties.
Notwithstanding anything to the contrary in the Plan
or the Confirmation Order, the releases provided for
herein shall not apply to the claims, if any, of the
United States as to Released Parties.
(c) Section 9.1(c) is replaced in its entirety by the
following:
Except as otherwise specifically provided by this
Plan, any Entity accepting any distribution pursuant
to this Plan shall be presumed conclusively to have
released the (a) Debtors and Reorganized Debtors, and
(b) any other Entity accepting any distribution
pursuant to this Plan, Affiliates of the Debtors and
such Entities, present and former stockholders,
directors, officers, agents, attorneys, advisors, and
employees of the Debtors, such Affiliates and such
Entities and any Entity claimed to be liable
derivatively through any of the foregoing (such
parties commencing with (b), collectively, the
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"Nondebtor Releasees"), from any cause of action
arising from or based on the same subject matter as
the Claim or Interest on which the distribution is
received, except as to Released Parties and Nondebtor
Releasees for acts or omissions which are the result
of fraud, gross negligence, willful misconduct or
willful violation of the securities laws or the
Internal Revenue Code. The release described in the
preceding sentence shall be enforceable as a matter
of contract against any Entity that accepts any
distribution pursuant to this Plan. Subject to the
discharge of Sections 524 and 1141 of the Bankruptcy
Code, the releases provided for herein shall not
preclude police, Federal tax, or regulatory agencies
from fulfilling their statutory duties.
Notwithstanding anything to the contrary in the Plan
or the Confirmation Order, the releases provided for
herein shall not apply to the claims, if any, of the
United States as to Released Parties and Non-Debtor
Releasees.
(d) Section 9.3 of Article IX of the Plan is hereby amended by
inserting the words ", provided that nothing in the Plan shall restrain
and enjoin all Entities who are holders of Claims against and Interests
in the Estates from taking any action to enforce liability arising from
acts or omissions which are the result of fraud, gross negligence,
willful misconduct or willful violation of the securities laws or the
Internal Revenue Code as against Released Parties and Nondebtor
Releasees. Subject to the discharge Sections 524 and 1141 of the
Bankruptcy Code, the injunction provided for herein shall not preclude
police, federal tax, or regulatory agencies from fulfilling their
statutory duties. Notwithstanding anything to the contrary in the Plan
or the Confirmation Order, the injunction provided for herein shall not
apply to bar the Claims, if any, of the United States as against
Released Parties and Nondebtor Releasees." after the words "to the
extent provided for or authorized by Sections 524 and 1141 thereof."
(e) Section 9.5(c) of Article IX of the Plan is hereby amended
in its entirety:
Notwithstanding the provisions of Subsections (a) and
(b) of this Section 9.5, the obligations of the
Debtors and the Reorganized Debtors pursuant to law
or their respective certificates of incorporation or
bylaws or otherwise to indemnify, or to pay
contribution or reimbursement to, the Continuing
Indemnified Persons, in respect of legal fees, costs,
expert advice and witnesses and expenses ("Defense
Expenses") incurred by the Continuing Indemnified
Persons, limited, however, up to the amount of
$700,000.00 in the aggregate for such Defense
Expenses, and provided that such Defense Expenses
otherwise are not covered under the D&O Policies
(whether according to their terms or because the
policy limits under the D&O Policies are exceeded),
shall not be discharged or impaired by reason of
confirmation of this Plan or otherwise and shall not
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be subordinated under Section 510 of the Bankruptcy
Code or otherwise and shall not be disallowed under
Section 502(a) of the Bankruptcy Code or otherwise.
Defense Expenses shall include fees, costs, and
expenses incurred by any Continuing Indemnified
Person in contesting any denial of coverage under the
D & O Policies. Upon written request of any one or
more Continuing Indemnified Person, the Board of
Directors may, in its reasonable discretion, apply
funds that would be used in respect of the defense of
an Indemnified Claim to the settlement thereof if
such settlement payment will be less than the
reasonably anticipated Defense Expenses of such
Indemnified Claim and such application would be in
the best interest of the Reorganized Debtors. Any
liability of the Debtors under this paragraph which
is attributable to the period from the Petition Date
to the Effective Date and which under the Bankruptcy
Code has the priority of an expense of administration
shall be entitled to such priority, but no aggregate
amount of dollars shall be paid by reason of such
priority which is greater than $700,000.00.
(f) Section 11.1 of Article XI of the Plan is replaced in its
entirety by the following:
On the Effective Date, and to the extent permitted by
applicable law all executory contracts and unexpired
leases of each of the Debtors shall be assumed in
accordance with the provisions of Section 365 and
Section 1123 of the Bankruptcy Code, excluding (a)
any and all executory contracts or unexpired leases
which are the subject of separate motions filed
pursuant to Section 365 of the Bankruptcy Code by the
Debtors prior to the Effective Date, (b) such
contracts or leases as are listed on any "Schedule of
Rejected Executory Contracts and Unexpired Leases"
filed by the Debtors on or before the Effective Date,
all of which contracts or leases shall be deemed
rejected pursuant to the provisions of Section 365
and Section 1123 of the Bankruptcy Code, and (c) any
and all executory contracts or unexpired leases
rejected prior to the Effective Date. Contracts or
leases entered into after the Petition Date will be
performed by the Reorganized Debtors in the ordinary
course of their businesses.
(g) Section 11.2 of Article XI of the Plan is replaced in its
entirety by the following:
Any Claims arising out of the rejection of contracts
or leases must be filed with the Court within the
time set by any Final Order rejecting such executory
contract or unexpired lease or 30 days after the
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Effective Date. Any Claims not filed within such time
will be forever barred from assertion against any of
the Debtors or Reorganized Debtors, its estate and
property. Unless otherwise provided in this Plan, all
such Claims for which proofs of Claim are required to
be filed will be treated as Class 6 Claims.
(h) Section 12.1 of Article XII of the Plan is hereby amended
by inserting the words "notwithstanding anything contained herein or
the Confirmation Order to the contrary, the Bankruptcy Court shall not
retain jurisdiction over matters relating exclusively to or otherwise
arising solely under the Exit Financing Facility." after the words "and
(k) enter a final decree closing the Reorganization Cases."
5. To the extent the IRS holds an allowed claim properly
classified, and to the extent entitled to interest, the interest rate shall be
at the federal statutory rate as provided by the Internal Revenue Code.
6. The Plan (as modified by the modifications set forth in
paragraph 4 of this Confirmation Order) is confirmed under Section 1129 of the
Bankruptcy Code.
7. The provisions of the Plan and this Confirmation Order,
including the findings of fact and conclusions of law set forth herein, are
nonseverable and mutually dependent.
8. Plan Classification Controlling. The classification of
Claims and Interests for purposes of the distributions to be made under the Plan
shall be governed solely by the terms of the Plan. The classifications and
amounts of Claims, if any, set forth in the Ballots tendered or returned by the
Debtors' creditors in connection with voting on the Plan (i) were set forth on
the Ballots solely for purposes of voting to accept or reject the Plan, (ii) do
not necessarily represent, and in no event shall be deemed to modify or
otherwise affect the actual classification of such Claims or Interests under the
Plan for distribution purposes, and (iii) shall not be binding on the Debtors,
the Estates, or the Reorganized Debtors.
9. Certain Effects of Confirmation; Discharge; Injunction. All
of the provisions of Article IX, Section 9.1, 9.2, 9.3 and 9.5 of the Plan, as
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restated or amended by this Confirmation Order, are incorporated herein by
reference as if set forth herein in extenso.
10. Retention and Enforcement of Estates' Claims and Rights.
Except as and to the extent set forth in Section 9.1(e) of the Plan, nothing in
this Confirmation Order or Article IX of the Plan shall be deemed to be a waiver
or relinquishment of:
(i) any rights or causes of action (prepetition or
postpetition) that the Debtors or the Reorganized
Debtors may have currently or which the Reorganized
Debtors may choose to assert on behalf of their
Estates under any provision of the Bankruptcy Code or
any similar applicable non-bankruptcy law, including
without limitation, (i) breach of contract claims,
(ii) the avoidance of any transfer by or obligation
of the Companies or the Debtors or (iii) the turnover
of any property to the Estates, all of which are
expressly reserved by the Plan and may only be
pursued by the Reorganized Debtors;
(ii) any claim, cause of action, right of setoff, or
other legal or equitable defense which the Debtors
had immediately prior to the Petition Date, against
or with respect to any Claim left unaltered or
Unimpaired by the Plan. The Reorganized Debtors shall
have, retain, reserve and be entitled to assert all
such claims, causes of action, rights of setoff and
other legal or equitable defenses which they had
immediately prior to the Petition Date fully as if
the Chapter 11 cases had not been commenced; and all
of the Reorganized Debtors' legal and equitable
rights respecting any Claim left unaltered or
Unimpaired by the Plan may be asserted after the
Confirmation Date to the same extent as if the
Chapter 11 cases had not been commenced.
11. Binding Effect. Pursuant to Section 1141 of the Bankruptcy
Code, effective as of the Confirmation Date, but subject to the occurrence of
the Effective Date, and except as expressly provided in the Plan or this
Confirmation Order, the provisions of the Plan (including the exhibits to, and
all documents and agreements executed pursuant to the Plan) and this
Confirmation Order shall be binding on (i) the Debtors, (ii) the Reorganized
Debtors, (iii) all holders of Claims against and Interests in the Debtors,
whether or not impaired under the Plan and whether or not, if impaired, such
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holder accepts the Plan, and (iv) each person acquiring property under the Plan.
The holders of liens satisfied, discharged and released under the Plan shall
execute any and all documentation reasonably requested by the Debtors or the
Reorganized Debtors evidencing the satisfaction, discharge and release of such
liens.
12. Revesting of Assets. On the Effective Date, the assets of
the Debtors, shall vest in the Reorganized Debtors. Thereafter, the Reorganized
Debtors may operate their businesses and may use, acquire, and dispose of
property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules
and the Court. All property of the Reorganized Debtors shall be free and clear
of all Claims and Interests, except as specifically provided in the Plan, the
Exit Financing Facility, the New Senior Term Loan Agreement, or this
Confirmation Order and all such Claims and Interests shall be both discharged
and released as to the Reorganized Debtors.
13. Assumption of Contracts and Leases. On the Effective Date,
all executory contracts and unexpired leases of the Estates shall be assumed by
the Debtors pursuant to the provisions of Sections 365 and 1123 of the
Bankruptcy Code, except: (i) any executory contract or unexpired lease that is
the subject of a separate motion filed pursuant to Section 365 of the Bankruptcy
Code by the Debtors before the Effective Date; (ii) such contracts or leases as
are listed on any "Schedule of Rejected Executory Contracts and Unexpired
Leases" filed by the Debtors on or before the Effective Date; and (iii) all
executory contracts or unexpired leases rejected under this Plan or by order of
the Court entered before the Effective Date and not subsequently assumed
pursuant to an order of the Court. Any order entered after the Confirmation Date
by the Bankruptcy Court, after notice and hearing, authorizing the rejection of
an executory contract or unexpired lease shall cause such rejection to be a
prepetition breach under Sections 365(g) and 502(g) of the Bankruptcy Code, as
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if such relief were granted and such order were entered prior to the
Confirmation Date. Any Claims arising out of the rejection of contracts or
leases must be filed with the Court within the time set by any Final Order
rejecting such executory contract or unexpired lease or 30 days after the
Effective Date. Any Claims not filed within such time will be forever barred
from assertion against any of the Debtors or Reorganized Debtors, their Estates
and property.
14. General Authorizations. The Debtors and the Reorganized
Debtors are authorized and empowered pursuant to Sections 105 and 1142(b) of the
Bankruptcy Code, and as applicable, Sections 141(f) and 303 of the General
Corporation Law of the State of Delaware, 8 Del. C. ss. 141(f) and 303, and any
other applicable state law to take any and all actions reasonably necessary to
implement the transactions contemplated by the Plan and this Confirmation Order,
all without further corporate action or action by or the vote of directors or
stockholders of the Debtors or Reorganized Debtors, including, without
limitation, the following: (a) to reconstitute the boards of directors of
Reorganized Debtors as contemplated by the Amended and Restated By-Laws; (b) to
reincorporate ATSI as Delaware corporation; (c) to take ATSI private; (d) to
amend the Reorganized Debtors' certificates of incorporation and by-laws as such
may be revised and filed with the Court on or prior to the Effective Date,
provided that as revised the Amended and Restated Certificates of Incorporation
and Amended and Restated Bylaws shall continue to prohibit the issuance of
non-voting equity securities; (e) to merge any or all of the Debtors; (f) to
issue the New Securities and Carl Marks Warrants under the Plan; (g) to enter
into, execute and deliver the Exit Financing Agreement, Contingent Payment
Agreement and Stockholders Agreement; (h) to adopt and implement the Management
Stock Option Plan; and (i) to authorize the appropriate officers of the
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Reorganized Debtors to execute any documents, instruments or agreements
necessary, and perform any act that is desirable or required to comply with the
terms and conditions of the Plan and consummation of the Plan, including all
documents necessary and appropriate to execute and consummate the Exit
Financing. Such actions are approved in all respects and shall be deemed to have
occurrence and be effective on the Effective Date.
15. Reserve of Common Stock. Pursuant to Section 4.6 of the
Plan, the Exchange Agent is authorized to reserve New Common Stock for issuance
in satisfaction of Contested Claims in Class 6 under the Plan, such reserve to
be an amount of New Common Stock which would be distributable on account of all
Contested Claims if each Contested Claim were Allowed in the amount set forth in
(i) any agreement between the holder of such Contested Claim and the Debtor,
(ii) an order of this Court Allowing such Contested Claim or establishing the
amount of a reasonable reserve in respect of such Contested Claim, or (iii) the
amount of such Contested Claim that is asserted to be liquidated in amount and
non-contingent in the proof of claim filed by the holder such Contested Claim.
From time to time in the Exchange Agent's discretion and, in any event,
following allowance or disallowance of all Contested Claims in Class 6, the
Exchange Agent is authorized and directed to distribute to each holder of
Allowed Claim in Class 6 an amount equal to the lesser of the amount of New
Common Stock reserved in respect of such Contested Claim or the amount of New
Common Stock distributable in respect of the Allowed Amount of such Contested
Claim, had such Contested Claim been Allowed in such amount on the Effective
Date.
16. Contingent Payment Agreement. ATSI and Reorganized ATSI
are authorized to execute and deliver the Contingent Payment Agreement, in
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substantially the form of the copy of which is attached hereto as Exhibit A, to
the Paying Agent. On the Effective Date, all Old Common Stock of ATSI shall be
cancelled and extinguished and Reorganized ATS shall accept the Old Common Stock
for cancellation. All holders of Old Common Stock are deemed parties to the
Contingent Payment Agreement and subject to the various restrictions thereunder,
including the restrictions on transferability.
17. Cancellation of Securities and Documents. On the Effective
Date, all Old Senior Secured Notes, Sub-Notes, Old Common Stock, Old Options,
and all documentation related thereto and all obligations of ATSI, the U.S.
Subsidiaries and the Foreign Subsidiaries under or in respect of any of the
foregoing shall be cancelled and extinguished and any rights thereunder
terminated. However, the provisions of the Sub-Note Indenture regarding the
rights of the Indenture Trustee to recover its fees, costs and expense shall
remain in full force and effect to the extent permitted under applicable law.
The Interests of ATSI in the U.S. Subsidiaries and Foreign Subsidiaries shall
remain outstanding and unaffected by the Plan or this Confirmation Order.
18. Reissuance of Securities and Other Documentation. On the
Effective Date, the Reorganized Debtors (i) shall issue, in accordance with the
provisions of Article V of the Plan, the New Senior Term Notes, the New Common
Stock and the New Warrants, and (ii) shall execute and deliver the New Senior
Term Loan Agreement, the Stockholders Agreement, and the Contingent Payment
Agreement. In addition, the Reorganized Debtors, the U.S. Subsidiaries, Axiohm
Technologies EURL, and Axiohm SARL shall execute and deliver the New Collateral
Documents.
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19. Stockholders Agreement. ATSI and Reorganized ATSI are
authorized to execute and deliver the Stockholders Agreement in substantially
the form attached as Exhibit B to the Disclosure Statement. On the Effective
Date, all holders of New Common Stock, New Warrants, Carl Marks Warrants, and
participants in the Management Stock Option Plan, shall be deemed to have
executed and shall be bound by the terms of the Stockholders Agreement.
20. Subordination Rights. Subject to the Confirmation Order
becoming a Final Order (or the requirement therefor being waived in accordance
with Section 8.3 of the Plan) and subject to the distributions that are required
to be made under the Plan as of the Effective Date to Classes 2 and 6 having
been made, as of the Effective Date, each holder of an Allowed Claim (or claim
thereafter Allowed), (i) by virtue of the acceptance of the Plan by such
holder's Class in accordance with Section 1126 of the Bankruptcy Code, (ii) by
virtue of the acceptance of the Plan by such holder, (iii) by virtue of the
acceptance of any distribution under the Plan on account of such Claim or (iv)
by virtue of the confirmation of the Plan, waives, releases and relinquishes any
and all rights, claims or causes of action arising out of contract or under
applicable law, including, without limitation, any claim under subsections (a)
or (c) of Section 510 of the Bankruptcy Code and the provisions of the Sub-Note
Indenture, to the payment and distributions of the consideration made or to be
made hereunder or otherwise consistent with the Plan to any holder of an Allowed
Claim (or claim thereafter Allowed) against the Debtors.
21. Status of D&O Insurance. The purchase or continuance of
the D&O Policies by the Reorganized Debtors shall be authorized and approved in
all respects without any requirement of further action by stockholders or
directors of any of the Debtors or Reorganized Debtors.
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22. No Post-Confirmation Amendment or Filing of Claims. Except
as to the United States and as otherwise provided herein, a Claim may not be
filed or amended after the Confirmation Date without the prior authorization of
the Court and, even with such Court authorization may be amended by the holder
of such Claim solely to decrease, but not to increase, the amount or priority of
the Claim. Except as otherwise permitted herein, a Claim filed or amended after
the Confirmation Date shall be deemed disallowed in full and expunged without
any action by the Debtors or the Reorganized Debtors if prior Court
authorization has not been obtained.
23. Payment of Fees. All fees payable pursuant to Section 1930
of Title 28 of the United States Code shall be paid on or before the Effective
Date, and to the extent required, shall be paid until the Reorganization Cases
are closed.
24. Retention of Jurisdiction. Notwithstanding confirmation of
the Plan or occurrence of the Effective Date, this Court shall retain such
jurisdiction as is legally permissible, including, without limitation, for the
purposes set forth in Section 12.1 of the Plan, as amended in paragraph 4
herein.
25. Modification of Plan. After the entry of this Order, the
Reorganized Debtors may, upon order of the Court, amend or modify the Plan in
accordance with Section 1127(b) of the Bankruptcy Code, or remedy any defect or
omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan, as modified by this
Order.
26. Exemption from Securities Laws. The exemption from the
requirements of Section 5 of the Securities Act of 1933, 15 U.S.C. ss. 77e, and
any state and local law requiring registration for the offer or sale of a
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security provided for in Section 1145 of the Bankruptcy Code shall apply to the
shares of New Common Stock, the New Warrants, the Carl Marks Warrants, and the
New Senior Term Notes issued pursuant to the Plan.
27. Exemptions from Taxation. Pursuant to section 1146(c) of
the Bankruptcy Code: (1) the issuance, distribution, transfer or exchange of the
Old Senior Notes, Sub-Notes and Old Common Stock, or (2) the making, delivery or
recording of any other instrument of transfer under, shall not be taxed under
any law imposing a stamp, or similar tax.
28. Validity of Liens. The liens granted pursuant to the Exit
Financing Facility shall be legal, valid and enforceable first and second
priority liens (as applicable) except as otherwise provided in the Exit
Financing Facility, and the documents to be executed and delivered pursuant
thereto shall constitute the legal, valid and binding obligations of the
Reorganized Debtors.
29. References to Plan Provisions. The failure specifically to
include or reference any particular provision
of the Plan in this Confirmation Order shall not diminish or impair the
effectiveness of such provision, it being the intent of the Court that the Plan
be confirmed in its entirety.
30. Confirmation Order Controlling. If there is any direct
conflict between the Plan, and this Confirmation Order, the terms of this
Confirmation Order shall control.
31. Reversal. If any or all of the provisions of this
Confirmation Order are hereafter reversed, modified or vacated by subsequent
order of this Court or any other court, such reversal, modification or vacatur
shall not affect the validity or enforceability of the acts or obligations
incurred or undertaken under or in connection with the Plan prior to the
Debtors' receipt of written notice of such order including, without limitations,
the obligations and indebtedness created under the Exit Financing Facility.
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Notwithstanding any such reversal, modification or vacatur of this Confirmation
Order, any such act or obligation incurred or undertaken pursuant to, and in
reliance on, this Confirmation Order prior to the Effective Date of such
reversal, modification or vacatur shall be governed in all respects by the
provisions of this Confirmation Order and the Plan and all related documents or
any amendments or modifications thereto.
32. No Stay of Confirmation Order. Pursuant to Bankruptcy Rule
3020(e), this Order shall not be stayed and shall be effective upon entry on the
docket of this Court.
33. Applicable Non-Bankruptcy Law. Pursuant to Sections
1123(a) and 1142(a) of the Bankruptcy Code, the provisions of this Confirmation
Order, the Plan or any amendments or modifications thereto shall apply and be
enforceable notwithstanding any otherwise applicable nonbankruptcy law.
34. Dissolution of the Creditors' Committee. On the Effective
Date, the Creditors' Committee shall cease to exist and its members, employees
or agents (including without limitation, attorneys, financial advisors, and any
other professionals) shall be released and discharged from all further
authority, duties, responsibilities, and obligations related to, arising from or
in connection with the Reorganization Cases except with respect to: (i) any
objections made by the Creditors' Committee pursuant to Section 10.3 of the Plan
or other matters pending before the Court to which the Creditors' Committee is a
party, until such objections or matters are resolved, (ii) all fee applications
filed or to be filed after the Effective Date pursuant to Section 330 of the
Bankruptcy Code by or on behalf of members of the Creditors' Committee on any
professionals employed by the Debtors or the Creditors' Committee, (iii)
effectuating consummation of the Plan; and (iv) any post-confirmation
modifications to the Plan or this Order.
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35. Record Date for Distributions. Therecord date for
determining the holders of Sub-Notes and Old Common Stock entitled to receive
distributions under the Plan shall be the Business Day immediately preceding the
Effective Date.
36. Professional Compensation and Reimbursement Claims. All
applications for payment of fees and expenses pursuant to Section 330 and 503(b)
of the Bankruptcy Code which were incurred before the Confirmation Date must be
filed with the Court on or before 4:00 p.m. on the date that is the first
Business Day after the date that is forty-five (45) days after the Effective
Date. Any Person who fails to file such an application with the Court on or
before such time and date shall be forever barred from asserting such claim
against any of the Debtors, the Reorganized Debtors, or their property, and the
holder thereof shall be enjoined from commencing or continuing any action,
employment of process or act to collect, offset or recover such claim.
Notwithstanding any prior order of this Court in these Reorganization Cases, all
requests for approval and payment of professionals' fees and reimbursement of
expenses, whether or not previously applied for by interim application, may be
included in such Professionals' final applications for payment of Claims as set
forth herein and in the Plan. Objections, if any, to such claims shall be filed
and served not later than five (5) business days prior to the date set by the
Court for the hearing to consider such claims.
37. Post-Confirmation Notices. On or before the tenth (10)
Business Day following the date of the entry of this Confirmation Order, the
Debtors or the Reorganized Debtors, as appropriate, shall serve notice of entry
of this Confirmation Order pursuant to Bankruptcy Rules 2002(f)(7), 2002(k) and
3020(c) to all creditors, indenture trustees and equity security holders of the
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Debtors as of the date hereof
Dated: Wilmington, Delaware
April 27, 2000
ENTERED
JUDGE PETER W. WALSH
CHIEF UNITED STATES BANKRUPTCY JUDGE
Exhibit 99
REORGANIZATION PLAN OF AXIOHM TRANSACTION SOLUTIONS, INC
AND ITS U.S. SUBSIDIARIES CONFIRMED BY COURT-- EMERGENCE FROM
CHAPTER 11 EXPECTED IN MAY
Blue Bell, PA, May 1, 2000. Axiohm Transaction Solutions Inc. (OTCBB: AXHMQ) and
its U.S. Subsidiaries announced that the United States Bankruptcy Court in
Wilmington, Delaware confirmed the Company's Plan of Reorganization on Thursday,
April 27, 2000. Subject to certain conditions, including the ability to take the
Company private, the Plan is expected to take effect in mid-May. The Plan
received overwhelming support of the Company's creditors and shareholders. In
addition, the Court approved the Company's exit financing in the form of a new
revolving line of credit in the amount of up to $23 million provided by Lehman
Commercial Paper, Inc.
Upon the effective date of the Plan, the Company's senior secured term
indebtedness in the amount of $62,650,000 will be refinanced and the holders
thereof will also receive warrants. The holders general unsecured claims,
including the holders of $120 million in senior subordinated notes, will receive
100% of the new common stock of the reorganized Company. The old common stock
will be cancelled, although shareholders will receive certain limited rights to
participate in the proceeds of any future public offering or sale of the Company
within the next five years. All claims of suppliers and other trade vendors were
not affected by the Plan and will be paid in full.
"We are very happy that we were able to restructure and significantly reduce our
long term indebtedness in a short period of time and with a minimal disruption
to the business," said Nicolas Dourassoff, President and CEO. "We believe the
overwhelming support for the restructuring by our creditors and shareholders
demonstrates their continued confidence in the Company's future success. The
support we received from our customers, vendors, and employees throughout the
process was immeasurably important to us and for that we are grateful."
With sales offices in eight countries, distribution relationships in 20
countries and seven manufacturing facilities located in four countries, Axiohm
is among the largest non-captive designers, manufacturers and marketers of
transaction printers in the world. With the completion of the chapter 11
process, the Company will increase its focus on delivery of new products and
technology and take advantage of its extensive research and development
capabilities. "In short," said Dourassoff, "our financial house is in order and
we are better positioned to take advantage of our competitive edge in research
and development and continue our tradition of innovation and reliability."
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AXIOHM TRANSACTION SOLUTIONS PAGE TWO
THE GENERAL SUMMARY OF THE CONFIRMED PLAN OF REORGANIZATION CONTAINED IN THIS
NEWS RELEASE IS NOT MEANT TO BE COMPLETE. THE FULL TEXT OF THE CONFIRMED PLAN
HAS BEEN FILED WITH THE U.S. BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE.
Axiohm Transaction Solutions, Inc., based in Blue Bell, Pennsylvania, is a
leading designer and manufacturer of printers and ancillary products. The
transaction printers employ thermal and impact technology and are used to print
documents such as point of sale receipts, gaming tickets, and other transaction
records. Axiohm also designs and manufactures thermal and impact printer
mechanisms, magnetic-stripe and smart-card readers, and bar code printers.
Axiohm sells to distributors, end users, OEMs, and VARs. Approximately 80% of
Axiohm's sales are to OEMs; and about 40% of sales come from outside the US.
SAFE HARBOR" STATEMENT UNDER THE SECURITIES LITIGATION REFORM ACT OF 1995: This
news release contains certain forward-looking statements pertaining to a
voluntary bankruptcy petition, the outcome of the company's agreement with
certain lenders, the outcome of a reorganization plan filed with the bankruptcy
court, future operations and other matters. These statements are subject to
uncertainties and other factors. Should one or more of these uncertainties or
other factors materialize, or should underlying assumptions prove incorrect,
actual events or results may vary materially from those anticipated. Such
uncertainties and other factors include the outcome of negotiations with the
company's lenders with respect to the plan or reorganization and other documents
related thereto, approval by the Bankruptcy Court, objections of third parties,
as well as the company's ability to maintain market-share, trends in the
transaction printer industry, and general economic conditions. The company
undertakes no obligation to update any such factor or to publicly announce the
results of any revisions to any forward-looking statements contained herein to
reflect future events or developments.
