SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
UNITED PETROLEUM CORPORATION
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
911327 50 0
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(CUSIP Number)
Mr. Stuart J. Chasanoff
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1601 Elm Street, Suite 4000
Dallas, Texas 75201
(214) 720-1600
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 12, 1999
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(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-l(b)(3) or (4), check the following box | |
(Continued on following pages)
<PAGE>
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CUSIP No. 911327 50 0 13D
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- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON INFINITY INVESTORS LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)| |
(b)|X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
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NUMBER OF SHARES 7 SOLE VOTING POWER 1,360,862**
BENEFICIALLY OWNED BY
EACH REPORTING PERSON
WITH: 8 SHARED VOTING POWER 0
9 SOLE DISPOSITIVE POWER 1,360,862**
10 SHARED DISPOSITIVE POWER 0
- ----------------------- -------- -----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 1,360,862**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 27.2%**
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14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
** Seacrest Capital Limited and Fairway Capital Limited are wholly
owned subsidiaries of Infinity Investors Limited. Accordingly,
Infinity Investors Limited may be deemed to be the beneficial owner of
the shares of common stock of United Petroleum Corporation reported
herein that are owned by Seacrest Capital Limited and Fairway Capital
Limited. Such shares of common stock of United Petroleum Corporation
are not included above so as to avoid double counting.
<PAGE>
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CUSIP No. 911327 50 0 13D
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- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON SEACREST CAPITAL LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)| |
(b)|X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* 00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
- ---------- ---------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER 62,731
BENEFICIALLY OWNED BY
EACH REPORTING PERSON
WITH: 8 SHARED VOTING POWER 0
9 SOLE DISPOSITIVE POWER 62,731
10 SHARED DISPOSITIVE POWER 0
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 62,731
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3%
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14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
<PAGE>
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CUSIP No. 911327 50 0 13D
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1 NAME OF REPORTING PERSON FAIRWAY CAPITAL LIMITED
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON N/A
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)| |
(b)|X|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS* 00
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) | |
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION NEVIS, WEST INDIES
- ---------- ---------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER 0
BENEFICIALLY OWNED BY
EACH REPORTING PERSON
WITH: 8 SHARED VOTING POWER 62,731
9 SOLE DISPOSITIVE POWER 0
10 SHARED DISPOSITIVE POWER 62,731
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 62,731
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* | |
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.3%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON* CO
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* SEE INSTRUCTIONS
<PAGE>
1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the
common stock, par value $.01 per share (the "Common Stock"), of United Petroleum
Corporation, a Delaware corporation, which has its principal executive offices
located at 5800 N.W. 74th Avenue, Miami, Florida 33166 (the "Issuer" ).
2. IDENTITY AND BACKGROUND.
(a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Act"), this Schedule 13D
Statement is hereby filed by Infinity Investors Limited
("Infinity"), Seacrest Capital Limited ("Seacrest") and
Fairway Capital Limited ("Fairway" and, together with
Infinity and Seacrest, the "Reporting Persons").
Additionally, pursuant to Instruction C to Schedule 13D,
information is included herein with respect to the
following persons (collectively, the "Controlling
Persons"): HW Partners, L.P. ("HW Partners"), HW Finance,
L.L.C. ("HW Finance") and Barrett Wissman ("Wissman"). The
Reporting Persons and the Controlling Persons are sometimes
hereinafter collectively referred to as the "Item 2
Persons."
(b) & (c) REPORTING PERSONS
Each of the Reporting Persons is a Nevis, West Indies
Corporation. The principal business of each of the
Reporting Persons is the purchase, sale, exchange,
acquisition and holding of investment securities. The
principal address of each of the Reporting Persons, which
also serves as each of the Reporting Persons' principal
office, is Hunkins Waterfront Plaza, Main Street, P.O. Box
556, Charlestown, Nevis, West Indies.
The names, business addresses, principal occupations or
employments and citizenships of each officer and director
of the Reporting Persons are set forth on Schedule A
attached hereto and incorporated herein by reference.
CONTROLLING PERSONS
Pursuant to Instruction C to Schedule 13D of the Act,
information with respect to the Controlling Persons is set
forth below. The principal address of each Controlling
Person, which also serves as each such person's principal
office, is 1601 Elm Street, Suite 4000, Dallas, Texas
75201.
HW Partners is a Texas limited partnership, the principal
business of which is acting as advisor to Infinity and
activities related thereto.
HW Finance is a Texas limited liability company, the
principal business of which is serving as the general
partner of HW Partners and activities related thereto.
Wissman is the Manager of HW Finance.
The principal occupation or employment of Wissman is
financial management.
(d) & (e) During the last five (5) years, no Item 2 Person and, to
the best of the knowledge of the Item 2 Persons, no person
listed on Schedule A hereto has been convicted in any
criminal proceeding (excluding traffic violations or
similar misdemeanors) and no Item 2 Person and, to the best
of the knowledge of the Item 2 persons, no person listed on
Schedule A hereto has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction
such that, as a result of such proceeding, any Item 2
Person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
mandating activity subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f) Wissman is a U.S. citizen and resident of the State of
Texas.
3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The following disclosure is qualified in its entirety by reference to the
Second Amended Plan of Reorganization of United Petroleum Corporation,
dated July 23, 1999 (the "Plan") and the order confirming the Plan, dated
October 7 (the "Order"), entered by the United States Bankruptcy Court for
the District of Delaware (the "Court"). The Plan and the Order are
incorporated herein by reference and are filed herewith as Exhibit 99.1 and
99.2, respectively.
On January 14, 1999 (the "Petition Date"), the Issuer filed a petition for
relief under chapter 11 of title 11 of the United States Code (11 U.S.C.
ss. 101 et seq.) (the "Bankruptcy Code"). On the Petition Date, the issuer
had outstanding three series of convertible debentures (the "Debentures"),
pursuant to which the Issuer owed the holders thereof $7,498,510 in
principal and accrued interest and two series of preferred stock (the "Old
Preferred Stock"), having a liquidation preference of $13,894,796.
On the Petition Date, Infinity directly held $6,000,044 in principal amount
and accrued interest of Debentures (the "Infinity Debentures") as well as
Old Preferred Stock having a liquidation preference of $9,503,575 (the
"Infinity Preferred Stock").
On the Petition Date, Seacrest directly held $375,558 in principal amount
and accrued interest of Debentures (the "Seacrest Debentures").
On the Petition Date, Fairway directly held $375,558 in principal amount
and accrued interest of Debentures (the "Fairway Debentures").
On or about July 23, 1999, the Issuer filed the Plan with the Court. The
Plan provides for, among other things, the treatment of all previously
existing claims against and equity interests in the Issuer.
Under the Plan, holders of the Debentures are to receive 1,750,000 shares
of Common Stock in full satisfaction of the Debentures and holders of the
Old Preferred Stock are to receive 650,000 shares of Common Stock in full
satisfaction of the Old Preferred Stock.
Pursuant to the Order, the Court found that the Plan and the Issuer
satisfied all the applicable requirements of the Bankruptcy Code, confirmed
the Plan, and granted the Issuer a discharge under section 1141 of the
Bankruptcy Code.
On or about November 12, 1999, the Plan was substantially consummated and
the transactions contemplated by the Plan were implemented.
Pursuant to the Plan, Infinity expects that it will receive directly a
total of 1,645,566 (32%) shares of Common Stock on account of the Infinity
Debentures and the Infinity Preferred Stock.
Pursuant to the Plan, Seacrest expects that it will receive directly a
total of 87,648 (1.75%) shares of Common Stock on account of the Seacrest
Debentures.
Pursuant to the Plan, Fairway expects that it will receive directly a total
of 87,648 (1.75%) shares of Common Stock on account of the Fairway
Debentures.
Certain creditors of the Issuer have asserted the right to receive
distributions as the holders of Debentures even though such creditors
previously exchanged their Debentures for Old Preferred Stock. The Issuer
has indicated that it disputes such claims. Pending the resolution of such
matters, the Issuer has reserved some of the shares of Common Stock that
would otherwise be available for distribution to the holders of Debentures.
As a result, as of the date hereof, Infinity has been issued directly a
total of 1,360,862 (27.2%) shares of Common Stock on account of the
Infinity Debentures and the Infinity Preferred Stock; Seacrest has been
issued directly a total of 62,731 (1.25%) shares of Common Stock on account
of the Seacrest Debentures; and Fairway has been issued directly a total of
62,731 (1.25%) shares of Common Stock on account of the Fairway Debentures.
Additionally, the Issuer is holding 200,000 shares of the Common Stock (the
`Trust Shares") that will be contributed to a trust to be formed for the
settlement of certain securities claims. During the life of the trust,
Infinity has no rights with respect to the Trust Shares, however, upon the
trust's dissolution, any remaining Trust Shares will be issued directly to
Infinity. Thus, depending upon the liquidated amount, if any, of the above
referenced securities claims, Infinity may receive all, none or a portion
of the Trust Shares.
The Infinity Debentures were acquired between July and September 1996
(Infinity then held approximately $12.1 million in face amount of
Debentures) with funds derived from Infinity's working capital accounts.
The Seacrest Debentures and Fairway Debentures were acquired in September
1996 with funds derived from their respective working capital accounts. As
used herein the term "working capital" includes income from the business
operations of the entity plus sums borrowed from, among other sources,
banks and brokerage firm margin accounts, to operate such business in
general. The Infinity Preferred Stock was acquired in April, 1997 in
exchange for a portion of the Infinity Debentures.
4. PURPOSE OF TRANSACTION.
Infinity, Fairway and Seacrest had acquired their respective Debentures and
Old UPC Preferred Stock for investment purposes only. The Reporting
Persons, together with Jose P. and Miriam Bared, have an arrangement with
respect to the election of all of the members of the board of directors of
the Issuer (as further described in Item 6 below). It is expected that the
business and operations of the Issuer will continue without substantial
change. The Reporting Persons and, to their knowledge, Jose P. and Miriam
Bared, currently intend to cause the Issuer's operations to continue to be
run and managed by its existing executive officers, but will continue to
evaluate the business, operations and management of the Issuer and will
take such further actions as they deem appropriate under the circumstances
then existing.
Except as set forth in this Item 4, the Item 2 Persons have no present
plans or proposals that relate to or that would result in any of the
actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of
the Act.
5. INTEREST IN SECURITIES OF THE ISSUER.
(a) REPORTING PERSONS
The aggregate number and percentage of shares of Common Stock
beneficially owned by Infinity, respectively, is 1,360,862 and 27.2%.
The aggregate number and percentage of shares of Common Stock
beneficially owned by Seacrest, respectively, is 62,731 and 1.3%.
The aggregate number and percentage of shares of Common Stock
beneficially owned by Fairway, respectively, is 62,731 and 1.3%.
In addition, Infinity owns 70,000 shares of Class A 9% preferred stock
of the Issuer.
Jose P. and Miriam Bared own 2,400,000 (48%) shares of the Common
Stock (the "Bared Stock"). Because of the Stockholders Agreement,
described in Item 6 below, all of the Bared Stock may be deemed to be
beneficially owned by the Reporting Persons (which, together with Jose
P. and Miriam Bared, may be deemed to comprise a group).
CONTROLLING PERSONS
Infinity, as the sole shareholder of Seacrest may be deemed to be the
beneficial owner of the shares of Common Stock beneficially owned by
Seacrest (the "Seacrest Shares") pursuant to Rule 13d-3 of the Act.
Infinity, as the sole shareholder of Fairway may be deemed to be the
beneficial owner of the shares of Common Stock beneficially owned by
Fairway (the "Fairway Shares") pursuant to Rule 13d-3 of the Act.
Each of (1) HW Partners, as advisor to Infinity and (2) HW Finance, as
the general partner of HW Partners, may be deemed to be the beneficial
owner of the shares of Common Stock beneficially owned by Infinity
(including the Seacrest Shares and the Fairway Shares, the "Infinity
Shares") pursuant to Rule 13d-3 of the Act.
In his capacity as controlling person of HW Partners, Wissman may be
deemed to be the beneficial owner of the Infinity Shares pursuant to
Rule 13d-3 of the Act.
(b) REPORTING PERSON
Acting through its sole shareholder, Infinity, Seacrest would have the
sole power to vote or to direct the vote and to dispose or to direct
the disposition of the Seacrest Shares.
Acting through its sole shareholder, Infinity, Fairway would have the
sole power to vote or to direct the vote and to dispose or to direct
the disposition of the Fairway Shares.
Acting through is advisor, HW Partners, Infinity would have the sole
power to vote or to direct the vote and to dispose or to direct the
disposition of the Infinity Shares.
CONTROLLING PERSONS
Acting through its sole general partner HW Finance, HW Partners would
have the sole power to vote or to direct the vote and to dispose or to
direct the disposition of the Infinity Shares.
In his capacity as controlling person of HW Partners, Wissman would
have the sole power to vote or to direct the vote and to dispose or to
direct the disposition of the Infinity Shares.
(c) Except as provided herein, no Item 2 Person has effected any
transactions in the shares of Common Stock of the Issuer during that
period beginning sixty (60) days preceding the date hereof.
(d) Not applicable
(e) Not applicable
6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
In addition to the contracts and arrangements described above, Infinity,
Seacrest, Fairway, Jose P. Bared and Miriam Bared (collectively the
"Stockholders") and the Issuer entered into that certain Stockholders
Agreement, dated November 3, 1999 (the "Stockholders Agreement"). A true
and correct copy of the Stockholders Agreement is attached hereto as
Exhibit 99.3.
Among other things, the Stockholders Agreement provides that (a) no
Stockholder shall sell, transfer or otherwise dispose of, for a period of
two years, such Stockholder's shares of Common Stock; (b) except under
certain circumstances, each time the Issuer proposes to sell shares of its
capital stock for cash, each Stockholder may purchase its pro rata share of
such capital stock on the same price and terms proposed by the Issuer and
(c) the Stockholders shall vote their Common Stock so that (i) the number
of members of the Issuer's board of directors (the "Board") will be five,
(ii) that two of the five members of the Board will be the representatives
of Jose P. and Miriam Bared, (iii) that two of the five members of the
Board will be the representatives of Infinity, Seacrest and Fairway and
(iv) that the fifth member of the Board will be L. Grant Peeples. One of
the members designated by Infinity, Seacrest and Fairway is Stuart
Chasanoff, who is an officer of HW Partners.
7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit No. Exhibit
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99.1 Second Amended Plan of Reorganization of
United Petroleum Corporation, dated July
23, 1999
99.2 Findings of Fact, Conclusions of Law and
Order, dated October 7, of the United
States Bankruptcy Court for the District
of Delaware confirming the Second
Amended Plan of Reorganization of United
Petroleum Corporation, dated July 23,
1999
99.3 Stockholders Agreement, dated November
3, 1999, by and among United Petroleum
Corporation, Infinity Investors Limited,
Fairway Capital Limited, Seacrest
Capital Limited, and Joe Bared and
Miriam Bared
<PAGE>
SIGNATURE
After reasonable inquiry, I certify that to the best of my knowledge and
belief the information set forth in this Statement is true, complete and
correct.
Date: November 23, 1999
Infinity Investors Limited
By: /s/ James A. Loughran
-------------------------------
Title:
Seacrest Capital Limited
By: /s/ James E. Martin
-------------------------------
Title:
Fairway Capital Limited
By: /s/ James E. Martin
-------------------------------
Title:
<PAGE>
SCHEDULE A
Set forth below is the name, citizenship (or place of
organization, as applicable), business address and present principal
occupation or employment of each director and executive officer of Infinity
Investors Limited
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS PRESENT PRINCIPAL POSITION WITH
CITIZENSHIP OR OCCUPATION OR REPORTING PERSON
PLACE OF EMPLOYMENT
ORGANIZATION
<S> <C> <C> <C>
James A. Loughran 38 Hertford Street, Lawyer Director
(Irish) London England W1Y
7TG
James E. Martin 38 Hertford Street, Accountant Director
(British) London England W1Y
7TG
SECORP Limited 38 Hertford Street, Nevis, West Indies business Secretary
(Nevis, West Indies) London England W1Y corporation that serves as
7TG secretary of various entities
Margareta Hedstrom 37 Shepherd Street, Business Executive President and Treasurer
(Swedish) London England W1Y
7LH
</TABLE>
<PAGE>
Set forth below is the name, citizenship (or place of organization, as
applicable), business address and present principal occupation or employment of
each director and executive officer of Seacrest Capital Limited
<TABLE>
<CAPTION>
NAME AND CITIZENSHIP OR PLACE OF BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR POSITION WITH REPORTING PERSON
ORGANIZATION EMPLOYMENT
<S> <C> <C> <C>
James E. Martin (British) 38 Hertford Street, Accountant President and Treasurer
London England W1Y 7TG
Parchmore Incorporation 80 Broad Street Liberian business corporation Director
(Liberia) Monrovia that serves as director of
Liberia various entities
</TABLE>
<PAGE>
Set forth below is the name, citizenship (or place of organization, as
applicable), business address and present principal occupation or employment of
each director and executive officer of Fairway Capital Limited.
<TABLE>
<CAPTION>
NAME AND CITIZENSHIP OR PLACE BUSINESS ADDRESS PRESENT PRINCIPAL OCCUPATION OR POSITION WITH REPORTING PERSON
OF ORGANIZATION EMPLOYMENT
<S> <C> <C> <C>
James E. Martin (British) 38 Hertford Street, London Accountant President and Treasurer
England W1Y 7TG
Cofides S.A. 38 Hertford Street, London Nevis, West Indies business Director
(Nevis, West Indies) England W1Y 7TG corporation that serves as
fiduciary of various entities
</TABLE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
)
UNITED PETROLEUM CORPORATION, )
)
) Case No. 99-88 (PJW)
)
Debtor. )
)
- -----------------------------------------------------
SECOND AMENDED PLAN OF REORGANIZATION UNDER CHAPTER 11 OF
THE BANKRUPTCY CODE FOR UNITED PETROLEUM CORPORATION
Dated: July 23, 1999
<PAGE>
Pursuant to section 1121(c) of the Bankruptcy Code, United Petroleum
Corporation proposes this chapter 11 plan:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
1.1. Definitions.
The capitalized terms used herein shall have the respective meanings
set forth below:
(a) "Administrative Expense Claim" means a Claim incurred by
the Debtor (or its Estate) on or after the Petition Date and before the
Effective Date for a cost or expense of administration in the Chapter
11 Case entitled to priority under sections 503(b) and 507(a)(1) of the
Bankruptcy Code.
(b) "ADR" means the Alternative Dispute Resolution Procedure
for Treatment of Securities Claims pursuant to the Plan as attached to
the Plan as Appendix II.
(c) "Affiliate" means, with respect to any Person, all Persons
that would fall within the definition assigned to such term in section
101(2) of the Bankruptcy Code, if such Person was a debtor in a case
under the Bankruptcy Code.
(d) "Allowed," when used
(i) with respect to any Claim, except for a Claim
that is an Administrative Expense Claim or a Securities Claim,
means such Claim (A) to the extent it is not a Contested Claim
as of the Effective Date; (B) to the extent it may be set
forth pursuant to any stipulation or agreement that has been
approved by Final Order of the Bankruptcy Court; (C) to the
extent it is a Contested Claim as of the Effective Date, proof
of which was filed timely with the Bankruptcy Court, and (I)
as to which no objection was filed by the Objection Deadline
(as specified in Section 10.1 of the Plan), unless such Claim
is to be determined in a forum other than the Bankruptcy
Court, in which case such Claim shall not become Allowed until
determined by Final Order of such other forum and allowed by
Final Order of the Bankruptcy Court; or (II) as to which an
objection was filed by the Objection Deadline, to the extent
allowed by a Final Order; or (D) which otherwise becomes an
Allowed Claim as provided in the Plan;
(ii) with respect to any Securities Claim, means a
Securities Claim to the extent (A) it has become "Allowed"
pursuant to the ADR or (B) it may be set forth pursuant to any
stipulation or agreement that has been approved by Final Order
of the Bankruptcy Court; or
(iii) with respect to an Administrative Expense
Claim, means an Administrative Expense Claim, that has become
"Allowed" pursuant to the procedures set forth in Article V of
the Plan; or
(iv) with respect to any Equity Interest, means an
Equity Interest, proof of which was timely and properly filed
or, if no proof of interest was filed, which has been or
hereafter is listed by the Debtor on its Schedules as fixed in
amount and not disputed or contingent, and, in either case, as
to which no objection to the allowance thereof has been
interposed on or before the Effective Date, or as to which any
objection has been determined by a Final Order to the extent
such objection is determined in favor of the holder of such
Equity Interest.
(e) "Ballot" means the form or forms that will be distributed
along with the Disclosure Statement to holders of Allowed Claims and
Equity Interests in classes that are Impaired under the Plan and
entitled to vote, which the holders of Impaired Claims and Equity
Interests may use to vote to accept or reject the Plan.
(f) "Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended, and codified at title 11 of the United States Code and as
applicable to the Chapter 11 Case.
(g) "Bankruptcy Court" means the Bankruptcy Court unit of the
United States District Court for the District of Delaware, or such
other court having jurisdiction over the Chapter 11 Case.
(h) "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure, as prescribed by the United States Supreme Court pursuant to
section 2075 of title 28 of the United States Code and as applicable to
the Chapter 11 Case.
(i) "Bar Date" means March 30, 1999, the date set by the
Bankruptcy Court as the last day for the filing of proofs of claim
against the Debtor.
(j) "Business Day" means any day on which commercial banks are
open for business in both New York, New York and Knoxville, Tennessee.
(k) "Calibur" means Calibur Systems, Inc., a Tennessee
corporation, which is a wholly-owned subsidiary of UPC.
(l) "Cash" means legal tender of the United States of America
or cash equivalents.
(m) "Calibur A Note" means that certain promissory note, dated
August 5, 1998, made payable by Calibur, UPC and Jackson to Infinity in
the original principal amount of $4,200,000, the payment of which is
(i) guaranteed by UPC's President, Michael Thomas, and (ii) secured by
a lien in and to assets of UPC, Calibur and Jackson that is pari passu
with the liens that secure payment of the Calibur B Note.
(n) "Calibur B Note" means that certain promissory note dated
August 5, 1998, made payable by Calibur, UPC and Jackson to Infinity in
the original principal amount of $2,800,000, the payment of which is
secured by a lien in and to assets of UPC, Calibur and Jackson that is
pari passu with the liens that secure payment of the Calibur A Note.
(o) "Causes of Action" means all claims, rights, actions,
causes of action, liabilities, obligations, suits, debts, remedies,
dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages or judgments, whether known or unknown and whether
asserted or unasserted.
(p) "Chapter 11 Case" means the Debtor's case under chapter 11
of the Bankruptcy Code pending before the Bankruptcy Court and styled
In re United Petroleum Corporation, Case No. 99-88(PJW).
(q) "Claim" means (i) any right to payment from the Debtor,
whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; (ii) any right to
an equitable remedy for breach of performance if such breach gives rise
to a right of payment from the Debtor, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured, or unsecured or (iii) any
right under section 502(h) of the Bankruptcy Code.
(r) "Collateral" means any Estate Asset subject to a Lien.
(s) "Common Equity Interest" means any share or other
instrument (including, without limitation, the Old UPC Common Stock)
evidencing a common stock ownership interest in the Debtor, whether or
not transferable or denominated "stock", or similar security, and any
warrant or right, other than a right to convert, to purchase, sell, or
subscribe to a common stock ownership interest in the Debtor.
(t) "Confirmation Date" means the date on which the Clerk of
the Bankruptcy Court enters the Confirmation Order on the docket with
respect to the Chapter 11 Case.
(u) "Confirmation Hearing" means the hearing held by the
Bankruptcy Court, as it may be continued from time to time, on
confirmation of the Plan.
(v) "Confirmation Order" means the order of the Bankruptcy
Court confirming the Plan.
(w) "Contested," when used
(i) with respect to a Claim, other than a Securities
Claim, means a Claim (A) that is listed in the Schedules as
disputed, contingent, or unliquidated, in whole or in part;
(B) that is listed in the Schedules as undisputed, liquidated,
and not contingent and as to which a proof of claim has been
filed with the Bankruptcy Court, to the extent the proof of
claim amount exceeds the scheduled amount; (C) that is not
listed in the Schedules, but as to which a proof of claim has
been filed with the Bankruptcy Court; or (D) as to which an
objection has been filed before the Effective Date, provided,
that a Claim that is Allowed by Final Order or pursuant to the
Plan on or before the Effective Date shall not be a Contested
Claim; and
(ii) with respect to a Securities Claim, means such
Claim to the extent it has not become an Allowed Claim
pursuant to the ADR; provided, that a Claim that is Allowed by
Final Order or pursuant to the Plan on or before the Effective
Date shall not be a Contested Claim.
(x) "Debentures" means, collectively, the following
debentures, together with all amendments thereto, and all documents,
instruments, and agreements executed and delivered in connection
therewith:
(i) The Debtor's six percent (6%) convertible
debentures that matured on August 1, 1998;
(ii) The Debtor's seven percent (7%) convertible
debentures that mature on September 1, 1999; and
(iii) The Debtors eighteen percent (18%) convertible
debentures that matured on February 28, 1998.
(y) "Debenture Claim" means a Claim arising under or relating
in any way to the Debentures, including any Claim for accrued and
unpaid interest.
(z) "Debtor" or "UPC" means United Petroleum Corporation, a
Delaware corporation, the debtor and debtor in possession in this
Chapter 11 Case.
(aa) "Deficiency Amount" means, with respect to a Secured
Claim, the amount by which the Claim exceeds the sum of (i) any set-off
rights of the holder of such Claim against the Debtor under Bankruptcy
Code sections 506 and 553, plus (ii) the net proceeds realized by the
holder of such Claim from the disposition of the Collateral securing
such Claim or, if such Collateral is not liquidated to Cash, the value
of the interest of the holder of the Claim in the Debtor's interest in
such Collateral, as determined by the Bankruptcy Court under Bankruptcy
Code section 506; provided, that if the holder of a Claim that is
secured by a Lien on Collateral makes the election provided in
Bankruptcy Code section 1111(b), there shall be no Deficiency Amount in
respect of such Claim.
(bb) "Disallowed," when used with respect to a Claim, means a
Claim that has been disallowed by a Final Order of the Bankruptcy
Court.
(cc) "Disbursing Agent" means any Person designated by the
Proponent to make distributions required under the Plan which may
include, without limitation, UPC, any financial institution of
recognized standing, or such other disbursing agent as may be approved
by the Proponent.
(dd) "Disbursing Agreement" means, with respect to any
Disbursing Agent (other than UPC), the agreement referenced in Article
XI of the Plan which shall govern the rights and obligations of the
Disbursing Agent. The Disbursing Agreement will be in substantially the
form thereof filed as a Plan Document, unless UPC serves as the
Disbursing Agent, in which case, the Plan shall be the Disbursing
Agreement.
(ee) "Disclosure Statement" means the disclosure statement
respecting the Plan, as approved by the Bankruptcy Court as containing
adequate information in accordance with Section 1125 of the Bankruptcy
Code, all exhibits and annexes thereto and any amendments or
modifications thereof.
(ff) "Distribution Date" means, (i) for any Claim that is an
Allowed Claim on the Effective Date, as soon as practicable after the
occurrence of the Effective Date; (ii) for any Claim that is neither a
Disallowed Claim nor an Allowed Claim on the Effective Date, the first
Business Day after such Claim becomes an Allowed Claim, or as soon as
practicable thereafter; provided, that with respect to Securities
Claims, the Distribution Date shall be determined by the UPC Trustee,
consistent with the ADR and UPC Trust.
(gg) "Distribution Record Date" means the record date fixed
for voting on the Plan.
(hh) "Effective Date" means (i) the first Business Day after
the Confirmation Date upon which the transactions consummated by the
Merger Agreement are consummated, or (ii) a Business Day selected by
the Debtor after the first Business Day which is ten (10) days after
the Confirmation Date on which (y) the Confirmation Order is not stayed
and (z) all conditions to the entry of the Confirmation Order and the
occurrence of the Effective Date have been satisfied or waived as
provided in Article XIII of the Plan.
(ii) "Equity Interest" means (a) the legal, equitable,
contractual and other rights of any Person with respect to Old UPC
Common Stock, Old UPC Preferred Stock, or any other equity security of
the company and (b) the legal, equitable, contractual or other rights
of any Person to acquire or receive any of the foregoing.
(jj) "Estate" means the estate of the Debtor created by
section 541 of the Bankruptcy Code upon the commencement of the Chapter
11 Case.
(kk) "Estate Asset" means any property, right, or interest in
property that is included in the Estate of the Debtor.
(ll) "Estimated Claims Order" means any order of the
Bankruptcy Court estimating any Claim or the aggregate amount of all
Claims in any class created under the Plan to aid in the confirmation
of the Plan, or the calculation of distributions under the Plan.
(mm) "Fairway" means Fairway Capital Limited, a Nevis, West
Indies corporation.
(nn) "Farm Stores" means all of the ninety-two (92) walk-in
convenience stores owned or leased by various entities in which the
FSCI Shareholder has a partnership interest, and all inventory,
fixtures, equipment, merchandise, accounts and general intangibles
associated therewith, except as otherwise provided in the Merger
Agreement.
(oo) "Farm Stores Assets" shall mean all of the assets held by
FSCI, as more fully described in the Merger Agreement, immediately
preceding consummation of the Merger, including, but not limited to,
partnership and other interests in the Farm Stores, the Farm Stores
Real Estate, and the Farm Stores License.
(pp) "Farm Stores License" means the royalty-free license to
use the "Farm Stores" name and all related trademarks in connection
with the operation of the Farm Stores Assets. The Farm Stores License
shall be in substantially the form attached as an Exhibit to the Merger
Agreement.
(qq) "Farm Stores Real Estate" means the real property owned
by various entities in which the FSCI Shareholder has a partnership
interest and used in connection with nine (9) of the Farm Stores.
(rr) "FSCI" means F.S. Convenience Stores, Inc., a Florida
corporation.
(ss) "FSCI Shareholder" means the holder or holders of 100%
of the equity interest of FSCI.
(tt) "FSG" means Farm Stores Grocery, Inc., a Florida
corporation.
(uu) "FSG Equity Interest" means a ten percent (10%) ownership
interest in FSG.
(vv) "Fee Application" means an application of a Professional
Person under section 330 or 503 of the Bankruptcy Code for allowance of
compensation and reimbursement of expenses in the Chapter 11 Case.
(ww) "Fee Claim" means a Claim under section 330 or 503 of the
Bankruptcy Code for allowance of compensation and reimbursement of
expenses in the Chapter 11 Case.
(xx) "Final Order" means (i) an order or judgment of the
Bankruptcy Court or any other court or adjudicative body as to which
the time to appeal, petition for certiorari, or move for reargument or
rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument or rehearing shall then
be pending or, (ii) in the event that an appeal, writ of certiorari,
reargument, or rehearing thereof has been sought, such order of the
Bankruptcy Court or any other court or adjudicative body shall have
been affirmed by the highest court to which such order was appealed, or
certiorari has been denied, or from which reargument or rehearing was
sought, and the time to take any further appeal, petition for
certiorari or move for reargument or rehearing shall have expired;
provided, that no order shall fail to be a Final Order solely because
of the possibility that a motion pursuant to Rule 60 of the Federal
Rules of Civil Procedure or Rule 7024 of the Bankruptcy Rules may be
filed with respect to such order.
(yy) "General Unsecured Claim" means any Claim that is not an
Administrative Expense Claim, a Priority Tax Claim, a Priority Non-Tax
Claim, the Infinity Secured Claim, a Secured Claim, a Debenture Claim
or a UPC Securities Claim.
(zz) "Infinity" means Infinity Investors Limited, a Nevis,
West Indies corporation.
(aaa) "Infinity Party" means Infinity, Fairway, and Seacrest,
and each of their respective Affiliates, officers, directors, managers,
stockholders, investors, agents, attorneys and representatives,
including, without limitation, Clark K. Hunt.
(bbb) "Infinity Secured Claim" means the Secured Claims of
Infinity under the Calibur A Note and the Calibur B Note (and all
related security agreements, instruments and documents).
(ccc) "Infinity Securities Claim" means any Cause of Action
against the Infinity Parties arising from or in connection with the
sale, offer, exchange, conversion, or issuance of, or any transaction
involving, the Common Equity Interests, including without limitation,
the Causes of Action asserted in the Pisacreta/Tucci Action, but
excluding derivative Causes of Action that are property of the Estate.
(ddd) "Infinity Settlement Agreement" means the agreement
dated as of the Effective Date among the Debtor, the Infinity Parties
and The UPC Trust, providing for the settlement of all Causes of Action
that have been, are, or may be asserted by or on behalf of any of the
parties thereto against any of the parties thereto as set forth in
Section 14.1 of the Plan. The Infinity Settlement Agreement shall be
substantially in the form thereof filed as a Plan Document.
(eee) "Jackson" means Jackson-United Petroleum Corporation, a
Kentucky corporation, which is a wholly-owned subsidiary of UPC.
(fff) "Lien" shall have the meaning assigned to it in section
101(37) of the Bankruptcy Code.
(ggg) "Management Agreement" means the agreements to be
entered into as of the Effective Date between the management of UPC and
UPC Merger Sub and FSG regarding the management of FSG from and after
the Effective Date. The Management Agreement shall be in substantially
the form thereof filed as a Plan Document.
(hhh) "Merger" means the combination of FSCI with and into UPC
Merger Sub, with UPC Merger Sub being the surviving corporation, upon
the terms and conditions set forth in the Merger Agreement.
(iii) "Merger Agreement" means the agreement and plan of
merger to be entered into by and among UPC, UPC Merger Sub and FSCI.
The Merger Agreement shall be in substantially the form attached hereto
as Appendix I.
(jjj) "Merger Consideration" consideration means the
consideration to be received by the FSCI Shareholders under the Merger
Agreement, to wit, (i) $3 million Cash Payment delivered to the FSCI
Shareholder; (ii) 2,400,000 shares of New UPC Common Stock delivered to
the FSCI Shareholder, and, (iii) 70,000 shares New UPC Preferred Stock
delivered to the FSCI Shareholder.
(kkk) "Merger Financing" means the financing, as contemplated
in the Merger Agreement, in the original principal amount of up to
$23.0 million, secured by a Lien on the Farm Stores Assets, the
proceeds of which shall be used, inter alia, to pay the Merger
Consideration and to execute and perform the $17 million obligation
under the Toni Option. Upon consummation of the Merger, the Merger
Financing shall be an obligation of UPC Merger Sub.
(lll) "New UPC Bylaws" means the Bylaws of United Petroleum
Corporation, as amended and restated pursuant to the Plan. The New UPC
Bylaws shall be in substantially the form thereof filed as a Plan
Document.
(mmm) "New UPC Charter" means the Certificate of Incorporation
for United Petroleum Corporation, as amended and restated pursuant to
the Plan. The New UPC Charter shall be in substantially the form
thereof filed as a Plan Document.
(nnn) "New UPC Common Stock" means the 10,000,000 shares of
UPC common stock which shall be authorized for issuance under the New
UPC Charter; 5,000,000 of which shares shall be issued and outstanding
on the Effective Date pursuant the transactions to occur thereon under
the Plan and the Merger Agreement.
(ooo) "New UPC Preferred Stock" means the 300,000 shares of
UPC Class A Preferred Stock which shall be authorized for issuance
under the New UPC Charter; 70,000 of which shares shall be issued to
Infinity on the Effective Date in full satisfaction of the obligations
under the Calibur A Note and the Calibur B Note, and 70,000 of which
shares shall be issued to the FSCI Shareholder in conjunction with the
transactions contemplated in the Merger Agreement.
(ppp) "Old UPC Common Stock" means the issued and outstanding
shares of common stock of UPC immediately before the occurrence of the
Effective Date; to wit 30,565,352 shares.
(qqq) "Old UPC Preferred Stock" means the issued and
outstanding shares of preferred stock of UPC immediately before the
occurrence of the Effective Date; to wit 9,912 shares of Class A
Preferred Stock of UPC and 1,833 shares of Class B Preferred Stock of
UPC.
(rrr) "Penalty Claims" means Claims and Causes of Action for
noncompensatory, statutory, exemplary, or punitive damages, or
penalties.
(sss) "Person" means an individual, corporation, partnership,
joint venture, trust, estate, unincorporated association,
unincorporated organization, governmental entity, or political
subdivision thereof, or any other entity.
(ttt) "Petition Date" means January 14, 1999.
(uuu) "Pisacreta/Tucci Action" means that certain lawsuit
entitled Pisacreta v. Infinity Investors Limited et al., Civil
Action No. 3:97-CV-226 in the United States District Court for
the Eastern District of Tennessee, as amended to include the
allegations originally asserted in the Tucci Action.
(vvv) "Plan" means this chapter 11 plan, as it may be
modified from time to time in compliance with the Bankruptcy Code
and the Bankruptcy Rules.
(www) "Plan Documents" means the documents that aid in
effectuating the Plan as specifically identified as such herein,
including but not limited to, the Merger Agreement, the
Management Agreement and the Farm Stores License.
(xxx) "Preferred Equity Interest" means any (1) shares or
other instruments (including, without limitation, the Old UPC
Preferred Stock) evidencing a preferred stock ownership interest
in the Debtor, whether or not transferable or denominated
"stock,"; (2) Cause of Action arising under or in any way
relating to a share or shares of Old UPC Preferred Stock; or (3)
unpaid dividends with respect to a share or shares of Old UPC
Preferred Stock.
(yyy) "Post-Confirmation Interest" means simple interest at
the rate of 6.00% per annum or such other rate as the Bankruptcy
Court may determine at the Confirmation Hearing is appropriate;
such interest to accrue from the date of the entry of an order
allowing a Claim until such Claim is paid.
(zzz) "Priority Non-Tax Claim" means any Claim accorded
priority in right of payment under section 507(a)(3), (4), (5),
(6), or (7) of the Bankruptcy Code.
(aaaa) "Priority Tax Claim" means a Claim of a governmental
unit of the kind specified in section 507(a)(8) of the Bankruptcy
Code.
(bbbb) "Professional Person" means a Person retained or to
be compensated pursuant to section 327, 328, 330, 503(b), or 1103
of the Bankruptcy Code.
(cccc) "Proponent" means the Debtor.
(dddd) "Pro Rata Share" means the proportion that the amount
of an Allowed Claim or Equity Interest in a particular class of
Claims or Equity Interests bears to the aggregate amount of all
Claims or Equity Interests in such class, including Contested
Claims and Equity Interests, but not including Disallowed Claims
and Equity Interests, (i) as calculated by the Disbursing Agent,
or the UPC Trustee, as applicable, on or before any Distribution
Date; or (ii) as determined by the Bankruptcy Court in an
Estimated Claims Order, if such an order is sought and obtained.
(eeee) "Schedules" means the schedules of assets and
liabilities and the statements of financial affairs filed by the
Debtor as required by section 521 of the Bankruptcy Code and
Bankruptcy Rule 1007, as such schedules and statements have been
or may be supplemented or amended.
(ffff) "Seacrest" means Seacrest Capital Limited, a Nevis,
West Indies corporation.
(gggg) "Secured Claim" means (i) a Claim secured by a Lien
on any Estate Asset, which Lien is valid, perfected, and
enforceable under applicable law and is not subject to avoidance
under the Bankruptcy Code or other applicable non-bankruptcy law,
and which is duly established in the Chapter 11 Case, but only to
the extent of the value of the Collateral that secures payment of
the Claim; (ii) a Claim that is subject to a valid right of
setoff under section 553 of the Bankruptcy Code; and (iii) a
Claim allowed under the Plan as a Secured Claim.
(hhhh) "Securities Claim" means either a UPC Securities Claim
or an Infinity Securities Claim.
(iiii) "Securities Claims Resolution Facility" means the
facility to be established or designated by the UPC Trustee for
the purpose of liquidating Securities Claims as specified in the
ADR.
(jjjj) "Toni" means Toni Gas & Food Stores, Inc.
(kkkk) "Toni Option" means that certain agreement between,
among others, Toni and FSCI, under which, FSCI has the option of
purchasing from Toni, for $17 million, all partnership and other
interests which relate to the Farm Stores, and which are not
already owned by FSCI or the FSCI Shareholder.
(llll) "Thomas Guarantee" means the guarantee of the Calibur
A Note by UPC's president, Michael Thomas.
(mmmm) "UPC Merger Sub" means United Petroleum Subsidiary,
Inc., a Delaware corporation and the wholly-owned subsidiary of
UPC created for the purpose of consummating the Merger.
(nnnn) "UPC Securities Claim" means any Cause of Action
against the Debtor arising from or in connection with the sale,
offer, exchange, conversion or issuance of, or any transaction
involving, the Common Equity Interests, including without
limitation, any Causes of Action asserted against the Debtor in
the Pisacreta/Tucci Action.
(oooo) "UPC Trust" means the trust to be established pursuant
to Section 7.1 of the Plan and the UPC Trust Agreement.
(pppp) "UPC Trust Agreement" means the trust agreement
between the Debtor, Infinity and the UPC Trustee, dated as of the
Effective Date. The UPC Trust Agreement shall be in substantially
the form thereof filed as a Plan Document.
(qqqq) "UPC Trustee" means the Person that is duly appointed
and qualified to serve as the trustee of the UPC Trust pursuant
to the terms and conditions of the Plan and the UPC Trust
Agreement and as approved by the Bankruptcy Court.
1.2. Interpretation.
Unless otherwise specified, all section, article, and exhibit
references in the Plan are to the respective section in, article of, or exhibit
to, the Plan, as the same may be amended, waived, or modified from time to time.
The headings in the Plan are for convenience of reference only and shall not
limit or otherwise affect the provisions of the Plan. Words denoting the
singular number shall include the plural number and vice versa, and words
denoting one gender shall include the other gender. The Disclosure Statement may
be referred to for purposes of interpretation to the extent any term or
provision of the Plan is determined by the Bankruptcy Court to be ambiguous.
1.3. Application of Definitions and Rules of
Construction Contained in the Bankruptcy Code.
Words and terms defined in section 101 of the Bankruptcy Code shall
have the same meaning when used in the Plan, unless a different definition is
given in the Plan. The rules of construction contained in section 102 of the
Bankruptcy Code shall apply to the construction of the Plan.
1.4. Other Terms.
The words "herein," "hereof," "hereto," "hereunder," and others of
similar import refer to the Plan as a whole and not to any particular section,
subsection, or clause contained in the Plan. A term used herein that is not
defined herein shall have the meaning ascribed to that term, if any, in the
Bankruptcy Code.
1.5. Appendices and Plan Documents.
All Appendices to the Plan and the Plan Documents are incorporated into
the Plan by this reference and are a part of the Plan as if set forth in full
herein.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
2.1. Claims and Equity Interests Classified.
For purposes of organization, voting, and all confirmation matters,
except as otherwise provided herein, all Claims (except for Administrative
Expense Claims, and Priority Tax Claims) and all Equity Interests shall be
classified as set forth in this Article II of the Plan.
2.2. Administrative Expense Claims and Priority Tax Claims.
As provided in section 1123(a)(1) of the Bankruptcy Code,
Administrative Expense Claims and Priority Tax Claims shall not be classified
for purposes of voting or receiving distributions under the Plan. Rather, all
such Claims shall be treated separately as unclassified Claims on the terms set
forth in Article V of the Plan.
2.3. Claims and Equity Interests.
The Plan classifies the Claims against and Equity Interests in the
Debtor as follows:
(a) Class 1: Priority Non-Tax Claims
(b) Class 2: Infinity Secured Claim
(c) Class 3: Secured Claims (other than the Infinity
Secured Claim)
(d) Class 4: General Unsecured Claims
(e) Class 5: Debenture Claims
(f) Class 6: Preferred Equity Interests
(g) Class 7: Common Equity Interests
(h) Class 8: UPC Securities Claims
2.4. Separate Classification of Secured Claims.
Although placed in one category for purposes of convenience, each Claim
that is determined to be a Secured Claim shall be treated as though in a
separate class (to be designated as Class 3A, Class 3B, Class 3C, etc.) for
purposes of voting and receiving distributions under the Plan.
ARTICLE III.
IDENTIFICATION OF IMPAIRED
CLASSES OF CLAIMS AND EQUITY INTERESTS
3.1. Unimpaired Classes of Claims and Equity Interests.
Class 1 -- Priority Non-Tax Claims, Class 3 -- Secured Claims (if any),
and Class 4 -- General Unsecured Claims, are not impaired under the Plan.
3.2. Impaired Classes of Claims and Equity Interests.
With the exception of the unimpaired classes specified in Section 3.1
of the Plan, all classes of Claims and Equity Interests are impaired under the
Plan.
3.3. Impairment Controversies.
If a controversy arises as to whether any Claim or Equity Interest, or
any class of Claims or class of Equity Interests, is impaired under the Plan,
the Bankruptcy Court shall, after notice and a hearing, determine such
controversy.
ARTICLE IV.
PROVISIONS FOR TREATMENT OF CLAIMS
AND EQUITY INTERESTS UNDER THE PLAN
4.1. Treatment of Claims and Equity Interests.
The classes of Claims against and Equity Interests in the Debtor shall
be treated under the Plan as follows:
(a) Class 1 -- Priority Non-Tax Claims. Each holder of an
Allowed Priority Non-Tax Claim shall be unimpaired under the Plan and,
pursuant to section 1124 of the Bankruptcy Code, all of the legal,
equitable and contractual rights of each holder of an Allowed Priority
Non-Tax Claim in respect of such Claim shall be fully reinstated and
retained as though the Chapter 11 Case had not been filed.
(b) Class 2 -- Infinity Secured Claim. The Infinity Secured
Claim shall be Allowed pursuant to the Plan and on the Effective Date
the holder of the Infinity Secured Claim shall receive 70,000 shares of
New UPC Preferred Stock in full satisfaction and release of the
Infinity Secured Claim.
(c) Class 3 -- Secured Claims (Other than the Infinity Secured
Claim). Each holder of an Allowed Secured Claim shall be unimpaired
under the Plan and, pursuant to section 1124 of the Bankruptcy Code,
all of the legal, equitable, and contractual rights of each holder of a
Secured Claim in respect of such Claim shall be fully reinstated and
retained as though the Chapter 11 Case had not been filed.
Notwithstanding the foregoing, the Debtor and any holder of an Allowed
Secured Claim may agree to any alternate treatment of such Secured
Claim which treatment may include preservation of such holder's Lien;
provided, that such treatment shall not provide a return to such holder
having a present value as of the Effective Date in excess of the amount
of such holder's Allowed Secured Claim.
(d) Class 4 -- General Unsecured Claims. Each holder of an
Allowed General Unsecured Claim shall be unimpaired under the Plan and,
pursuant to section 1124 of the Bankruptcy Code, all of the legal,
equitable and contractual rights of each holder of an Allowed General
Unsecured Claim in respect of such Claim shall be fully reinstated and
retained as though the Chapter 11 Case had not been filed.
(e) Class 5 -- Debenture Claims. The Debenture Claims shall be
Allowed pursuant to the Plan and on the Effective Date each holder of
an Allowed Debenture Claim shall receive a Pro Rata Share of 1,750,000
shares (35%) of New UPC Common Stock in full satisfaction and release
of the Debenture Claims.
(f) Class 6 -- Preferred Equity Interests. The Preferred
Equity Interests shall be Allowed pursuant to the Plan and on the
Effective Date each holder of an Allowed Preferred Equity Interest
shall receive a Pro Rata Share of 650,000 shares (13%) of New UPC
Common Stock in full satisfaction and release of the Preferred Equity
Interests.
(g) Class 7 -- Common Equity Interests. All Common Equity
Interests will be canceled, annulled and extinguished as of the
Effective Date. In full satisfaction and release of the Common Equity
Interests, each holder of an Allowed Common Equity Interests evidenced
by Old UPC Common Stock as of the Distribution Record Date shall
receive (i) a Pro Rata Share of 200,000 shares (4%) of New UPC Common
Stock, and (ii) the right to receive a Pro Rata Share of one-half (1/2)
of any of the assets initially contributed to the UPC Trust pursuant to
Sections 7.2 and 7.3 of the Plan, which remain after all distributions
have been made by the UPC Trust under the Plan in respect of Allowed
Securities Claims.
(h) Class 8 -- UPC Securities Claims. In full satisfaction and
release of the UPC Securities Claims, the UPC Securities Claims shall
have the right to be liquidated and allowed pursuant to the ADR,
together with the Infinity Securities Claims, except that, under no
circumstance will any Person other than the UPC Trust be liable to the
holder of a UPC Securities Claim on account of such UPC Securities
Claim. On the Distribution Date, each holder of an Allowed UPC
Securities Claim shall receive a distribution from the UPC Trust as
provided for by Article VII of the Plan, the UPC Trust Agreement and
the ADR.
ARTICLE V.
PROVISIONS FOR TREATMENT
OF UNCLASSIFIED CLAIMS UNDER THE PLAN
5.1. Treatment of Administrative Expense Claims.
All Administrative Expense Claims shall be treated as follows:
(a) Time for Filing Administrative Expense Claims. The holder
of an Administrative Expense Claim, other than (i) a Fee Claim, (ii) a
liability incurred and paid in the ordinary course of business by the
Debtor, or (iii) an Administrative Expense Claim that has been allowed
on or before the Effective Date, must file with the Bankruptcy Court
and serve on the Debtor and its counsel, notice of such Administrative
Expense Claim within twenty (20) days after service of notice of entry
of the Confirmation Order. Such notice must include at a minimum (1)
the name of the holder of the Claim, (2) the amount of the Claim, and
(3) the basis of the Claim. Failure to file this notice timely and
properly shall result in the Administrative Expense Claim being forever
barred and discharged.
(b) Time for Filing Fee Claims. Each Professional Person or
other entity that holds or asserts an Administrative Expense Claim that
is a Fee Claim incurred before the Effective Date shall be required to
file with the Bankruptcy Court, and serve on all parties required to
receive notice, a Fee Application within forty-five (45) days after the
Effective Date. The failure to file timely the Fee Application shall
result in the Fee Claim being forever barred and discharged.
(c) Allowance of Administrative Expense Claims. An
Administrative Expense Claim with respect to which notice has been
properly filed pursuant to Section 5.1(a) of the Plan shall become an
Allowed Administrative Expense Claim if no objection is filed within
sixty (60) days after the deadline for filing and serving a notice of
such Administrative Expense Claim specified in Section 5.1(a) hereof,
or such later date as may be approved by the Bankruptcy Court on motion
of the Debtor, without notice or a hearing. If an objection is filed
within such sixty-day period (or any extension thereof), the
Administrative Expense Claim shall become an Allowed Administrative
Expense Claim only to the extent allowed by Final Order. An
Administrative Expense Claim that is a Fee Claim, and with respect to
which a Fee Application has been properly filed pursuant to Section
5.1(b) of the Plan, shall become an Allowed Administrative Expense
Claim only to the extent allowed by Final Order.
(d) Payment of Allowed Administrative Expense Claims. Each
holder of an Allowed Administrative Expense Claim shall receive (i) the
amount of such holder's Allowed Claim in one Cash payment on the
Distribution Date, or (ii) such other treatment as may be agreed upon
in writing by the Debtor and such holder; provided, that an
Administrative Expense Claim representing a liability incurred in the
ordinary course of business of the Debtor may be paid at the Debtor's
election in the ordinary course of business by the Debtor. All Allowed
Administrative Expense Claims shall be paid by, and shall be the sole
responsibility of, UPC.
5.2. Treatment of Priority Tax Claims.
Each holder of an Allowed Priority Tax Claim shall receive from UPC in
full satisfaction of such holder's Allowed Priority Tax Claim, (i) the amount of
such holder's Allowed Claim, with Post-Confirmation Interest thereon, in equal
annual Cash payments on each anniversary of the Distribution Date, until the
sixth anniversary of the date of assessment of such Claim (provided that the
Debtor may prepay the balance of any such Allowed Priority Tax Claim at any time
without penalty); (ii) a lesser amount in one Cash payment as may be agreed upon
in writing by such holder; or (iii) such other treatment as may be agreed upon
in writing by such holder. The Confirmation Order shall constitute and provide
for an injunction by the Bankruptcy Court as of the Effective Date against any
holder of a Priority Tax Claim from commencing or continuing any action or
proceeding against any responsible person or officer or director of the Debtor
that otherwise would be liable to such holder for payment of a Priority Tax
Claim so long as UPC is not in default of its obligations with respect to such
Claim under this Section 5.2 of the Plan.
ARTICLE VI.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
CLASSES OF CLAIMS OR EQUITY INTERESTS
6.1. Classes Entitled to Vote.
Each impaired class of Claims shall be entitled to vote separately to
accept or reject the Plan. All unimpaired classes of Claims shall be deemed to
have accepted the Plan.
6.2. Class Acceptance Requirement.
A class of Claims shall have accepted the Plan if it is accepted by at
least two-thirds (2/3) in amount and more than one-half (1/2) in number of the
Allowed Claims in such class that have voted on the Plan. A class of Equity
Interests shall have accepted the Plan if it is accepted by holders of at least
two-thirds (2/3) of the Allowed Equity Interests in such class that have voted
on the Plan.
6.3. Confirmation Without Acceptance by All Impaired Classes.
If any impaired class of Claims or Equity Interests shall fail to
accept the Plan in accordance with section 1129(a) of the Bankruptcy Code, the
Plan shall constitute a request that the Bankruptcy Court confirm the Plan over
such rejection in accordance with section 1129(b) of the Bankruptcy Code.
ARTICLE VII.
TRANSFERS OF PROPERTY TO AND
ASSUMPTION OF CERTAIN LIABILITIES BY THE UPC TRUST
7.1. Creation of UPC Trust and Appointment of Trustee.
(a) On the Effective Date, the UPC Trust will be created
pursuant to the UPC Trust Agreement for the benefit of all holders of
Securities Claims. The UPC Trust or the fund established for transfer
to the UPC Trust may be a "designated settlement fund" or "qualified
settlement fund" pursuant to section 468B of the Internal Revenue Code
and related regulations.
(b) The UPC Trust shall be administered by an independent
trustee who shall be an individual designated by the Debtor, subject to
approval of the Bankruptcy Court. The terms of the compensation to be
payable to the UPC Trustee shall also be subject to approval of the
Bankruptcy Court.
(c) No person shall be eligible to be appointed as the UPC
Trustee who, within the five (5) years preceding such appointment, had
any business or professional affiliation with the Debtor or any holder
of a Claim, or any attorney representing any of the foregoing. The
appointment of the UPC Trustee and the terms of his/her compensation
shall be subject to the approval of the Bankruptcy Court.
7.2. Transfers of Certain Property of the Debtor to the UPC Trust.
(a) As of the Effective Date, the Debtor shall transfer and
assign (or deliver, as applicable) to the UPC Trust in accordance with
the UPC Trust Agreement, all Causes of Action of the Debtor for
contribution and indemnity with respect to Securities Claims against
any Person, excluding the Infinity Parties.
(b) On or as soon as practicable after the Effective Date, the
Debtor shall transfer to the UPC Trust all of its documents and records
relating to the transactions and events that purportedly give rise to
Securities Claims, except those documents necessary for the Debtor's
continuing operations. As of the date of such transfer, the UPC Trust
shall assume any and all obligations related to the storage of such
documents and records. The Proponent shall retain a right of access to
all documents and records transferred to the UPC Trust.
7.3. Transfers of Certain Property of the
Infinity Parties to the UPC Claims Trust.
The Infinity Parties shall transfer and assign (or deliver, as
applicable) or cause to be transferred and assigned (or deliver, as applicable)
to the UPC Trust in accordance with the UPC Trust Agreement, effective as of the
Effective Date, the following:
(a) 200,000 shares of New UPC Common Stock;
(b) all Causes of Action of the Infinity Parties for
contribution and indemnity with respect to Securities Claims against
any Person, excluding the Debtor, its affiliates and their respective
officers, directors, attorneys and representatives.
7.4. Distribution of Assets by the UPC Trust.
The UPC Trustee shall make distributions from the assets in the UPC
Trust to the holders of Allowed Securities Claims, in the full amount of such
Allowed Securities Claims. Upon the termination of the channeling injunction in
favor of the Infinity Parties pursuant to Section 16.2(d) of the Plan, holders
of Securities Claims that have been timely asserted shall be permitted to assert
such claims directly against the Infinity Parties. After the satisfaction of all
Allowed Securities Claims, any assets remaining in the UPC Trust shall be
allocated and distributed in accordance with the Infinity Settlement Agreement
50% to the Infinity Parties and 50% to the holders of Allowed Common Equity
Interests.
7.5. Assumption of Certain Liabilities by the UPC Trust.
(a) In consideration for the property transferred and the
payments made to the UPC Trust pursuant to Sections 7.2 and 7.3 of the
Plan, the UPC Trust shall assume all Securities Claims against the
Debtor and the Infinity Parties.
(b) As of the Effective Date, the UPC Trust shall (i)
establish the Securities Claims Resolution Facility and assume
responsibility for the liquidation of all Securities Claims as
specified in the ADR, (ii) assume the defense of all Causes of Action
against the Debtor and the Infinity Parties that constitute or may give
rise to Securities Claims, (iii) assume the defense of all Causes of
Action against any Person that may give rise to an indemnification
liability against the Infinity Parties; and (iv) prosecute the Causes
of Action of the Debtor and the Infinity Parties that have been
transferred and assigned to the UPC Trust as the UPC Trustee shall
determine is appropriate under the circumstances. Except as otherwise
provided in the UPC Trust Agreement and the Infinity Settlement
Agreement, the UPC Trust shall have all defenses, cross claims, Causes
of Action, and rights to liens, offsets and recoupments that the Debtor
and the Infinity Parties would have had against any Person under
applicable non-bankruptcy law with respect to the Securities Claims.
7.6. Certain Property Held in Trust by the Debtor and the Infinity Parties.
If for any reason after the Effective Date the Debtor and the Infinity
Parties shall retain or receive any property that is owned by the Debtor or the
Infinity Parties and which is to be transferred to the UPC Trust, then the
Debtor and the Infinity Parties shall segregate and hold such property (and any
proceeds thereof) in trust for the benefit of the UPC Trust, and shall take such
actions with respect to such property at the expense and for the account of the
UPC Trust as the UPC Trustee shall direct in writing.
7.7. Obligations of the UPC Trust with Regard to Claims Over.
The rights and entitlement of the UPC Trust in respect of its
prosecution of Causes of Action, rights, and claims are subject to the
obligations and conditions set forth in subparagraphs (a) and (b) below.
(a) When the UPC Trust asserts a Cause of Action, that was
transferred or assigned to the UPC Trust by the Debtor or the Infinity
Parties, the UPC Trust shall as soon as practicable deliver to the
Person designated by each of the Debtor and Infinity to receive notice
(the "Notice Party"), a copy of the complaint asserting such Cause of
Action. Notwithstanding the injunctions provided pursuant to Section
16.12 of the Plan and the discharge provided pursuant to Section 16.11
and 16.13 of the Plan, if a party to such action asserts therein a
counterclaim or cross claim (a "Claim Over") against the Debtor,
Infinity or any other Person specified in the Infinity Settlement
Agreement (a "Named Party"), the UPC Trust shall as soon as practicable
deliver to the Notice Party a copy of the pleading asserting such Claim
Over.
(b) If the UPC Trust obtains a settlement with respect to or
judgment against a party who has made a Claim Over in respect of such
settlement or judgment, the UPC Trust shall:
(i) in the event of any settlement, obtain, as part
of such settlement, a release of each Named Party or a
withdrawal with prejudice of any Claim Over against each Named
Party; and
(ii) in the event of any judgment rendered other than
by reason of settlement:
(A) in the event that the Claim Over is
adjudicated, reduce, in satisfaction of such Claim
Over, any such judgment obtained against the party
asserting the Claim Over by the amount, if any,
necessary to eliminate and satisfy such Claim Over
without any further obligation of the relevant Named
Party or Parties with respect to such Claim Over;
provided, that (without limiting its obligations for
indemnification) in no event shall reduction in
respect of such Claim Over exceed the amount of the
judgment obtained by the UPC Trust against the party
asserting such Claim Over, or
(B) indemnify and hold the Named Parties
harmless in respect of such Claim Over if such Claim
Over has not been adjudicated.
(c) If a Claim Over has been asserted by any party against any
Named Party, the UPC Trust shall fully indemnify and hold harmless the
relevant Named Party from and against any and all liabilities, losses,
penalties, damages, and all other reasonable costs and expenses or
disbursements (including legal fees) incurred in connection with, or
related to, the defense of the Claim Over.
7.8. Powers and Duties of the UPC Trustee.
(a) Subject to the terms and provisions of the UPC Trust
Agreement, as approved by the Bankruptcy Court, the UPC Trustee shall
have the duty and authority to take all actions, including, but not
limited to, the retention of professionals, deemed by the UPC Trustee
to be necessary or appropriate (i) to implement the Plan, including
without limitation, executing, entering into and implementing (A) the
UPC Trust Agreement, (B) the Infinity Settlement Agreement, and (B) any
other document, instrument or agreement necessary, or appropriate to
implement the Plan, (ii) to assert, enforce, or settle the rights and
claims of the UPC Trust under the Plan, the UPC Trust Agreement, any
order of the Bankruptcy Court, any agreement, instrument, or document,
and applicable law, (iii) to protect, maintain, liquidate to Cash, and
maximize the value of the assets transferred to the UPC Trust, (iv) to
liquidate and resolve the Securities Claims pursuant to the ADR, (v) to
make distributions to the holders of Allowed Securities Claims pursuant
to the Plan, and (vi) to prepare and make available to the Debtor,
Infinity and holders of Claims and Equity Interests periodic reports
regarding the results of the UPC Trust's operations.
(b) Except as otherwise provided in this Section 7.8, the UPC
Trustee, together with his/her officers, directors, employees, agents,
and representatives, are hereby exculpated by all Persons, holders of
Claims and Equity Interests, and parties in interest, from any and all
Causes of Action, and other assertions of liability (including breach
of fiduciary duty) arising out of the discharge of the powers and
duties conferred upon the UPC Trustee by the UPC Trust Agreement, the
Plan, any Final Order of the Bankruptcy Court entered pursuant to or in
the furtherance of the Plan, or applicable law, except solely for
actions or omissions arising out of the UPC Trustee's willful
misconduct. No holder of a Claim or an Equity Interest, or
representative thereof, shall have or pursue any claim or cause of
action against the UPC Trustee or his/her officers, directors,
employees, agents, and representatives for making payments in
accordance with the Plan, or for liquidating assets to make payments
under the Plan.
ARTICLE VIII.
MEANS FOR IMPLEMENTATION OF THE PLAN
8.1. Continued Corporate Existence.
UPC shall continue to exist after the Effective Date as a separate
corporate entity, with all corporate powers, in accordance with the laws of the
State of Delaware and pursuant to the New UPC Charter and the New UPC Bylaws,
which shall become effective upon the occurrence of the Effective Date.
8.2. The Merger .
Pursuant to the terms and conditions set forth in the Merger Agreement,
(a) FSCI will receive and disburse $17 Million from the Merger Financing to
exercise and perform under the Toni Option, (b) UPC Merger Sub and FSCI shall
merge on the Effective Date, with UPC Merger Sub being the surviving
corporation, (c) the FSCI Shareholder shall receive the Merger Consideration
such that the UPC Merger Sub will own 100% of the Farm Stores Assets and 10% of
the equity in FSG.
8.3. Vesting of Assets.
(a) Upon the occurrence of the Effective Date, title to the
Estate Assets shall vest in UPC, free and clear of all Liens, Claims,
Causes of Action, and interests, except as expressly provided in the
Plan. On and after the occurrence of the Effective Date, UPC may
operate its business and may use, acquire and dispose of its assets
free of any restrictions of the Bankruptcy Code.
(b) Upon the occurrence of the Effective Date, and pursuant to
the Merger Agreement, title to the Farm Stores Assets shall vest in UPC
Merger Sub, subject to a lien securing payment of the Merger Financing.
On and after the occurrence of the Effective Date, UPC Merger Sub may
operate its business and may use, acquire and dispose of its assets
free of any restrictions of the Bankruptcy Code.
8.4. Management.
Upon the occurrence of the Effective Date, the management, control, and
operation of UPC shall become the general responsibility of the board of
directors of UPC, as reconstituted pursuant to the Plan and Merger Agreement.
Additionally, pursuant to the terms of the Management Agreement, UPC shall
provide the management for FSG. Entry of the Confirmation Order shall ratify and
approve all actions taken by the board of directors of UPC from the Petition
Date through and until the Confirmation Date.
8.5. Reconstitution of UPC Board of Directors.
The initial board of directors of UPC shall be composed of the
individuals identified in the Disclosure Statement or as otherwise identified at
or prior to the Confirmation Hearing, to hold such positions.
8.6. Officers.
The officers of UPC immediately following the Effective Date, shall be
those parties identified in the Disclosure Statement or otherwise identified
prior to the conclusion of the Confirmation Hearing.
8.7. The New UPC Charter and Bylaws.
Upon the occurrence of the Effective Date, UPC's charter and bylaws
shall be amended and restated as specified herein. In addition to containing
provisions that are currently contained in UPC's charter and bylaws, the New UPC
Charter and the New UPC Bylaws shall provide for, among other things, a
prohibition against the issuance of nonvoting equity securities as required by
section 1123(a)(6) of the Bankruptcy Code.
8.8. Issuance of New UPC Common Stock.
(a) All existing shares of Old UPC Common Stock and Old UPC
Preferred Stock shall be deemed canceled, annulled, and extinguished as
of the Effective Date.
(b) On the Effective Date, UPC shall issue and distribute
5,000,000 shares of New UPC Common Stock as follows:
(i) 2,400,000 shares will be issued to the FSCI
Shareholder;
(ii) 1,750,000 shall be issued to the holders of
Allowed Debenture Claims;
(iii) 650,000 shall be issued to the holders of Allowed
Preferred Equity Interests; and
(iv) 200,000 shall be issued to the holders of
Allowed Common Equity Interests.
(c) Each share of New UPC Common Stock shall have a par value
of $0.01. The New UPC Common Stock shall have one vote per share on all
matters.
8.9. Issuance of New UPC Preferred Stock.
(a) On the Effective Date, UPC shall issue and distribute
140,000 shares of New UPC Preferred Stock as follows:
(i) 70,000 shares shall be issued to the FSCI
Shareholder; and
(ii) 70,000 shares shall be issued to the holder of the
Infinity Secured Claim.
(b) The New UPC Preferred Stock shall be issued pursuant to a
certificate of designation in substantially the form to be filed with
the Bankruptcy Court as a Plan Document, pursuant to which each share
of New UPC Preferred Stock shall
(i) entitle the holder to receive cumulative quarterly
dividends at the annual rate of approximately nine percent
(9%), dividends payable in cash out of funds legally
available for the payment thereof, or, at the election of
the Board of Directors, New UPC Common Stock having an
equivalent market value;
(ii) have a preference of $100.00, plus accrued and
unpaid dividends upon any voluntary or involuntary
liquidation, dissolution, or winding up of the affairs of
the Debtor; and
(iii) provide that at any time or times dividends shall
be in arrears and unpaid on an amount equal to eight (8)
consecutive full quarterly dividend periods, then the number
of directors constituting the board of directors, without
further action, shall be increased by two (2) and the
holders of shares of New UPC Preferred Stock shall have the
exclusive right, voting separately as a class, to elect the
directors to fill such newly-created directorships.
8.10. Cancellation of Instruments and Agreements.
Upon the occurrence of the Effective Date, except as otherwise provided
herein, all promissory notes, share certificates, instruments, indentures, or
agreements evidencing, giving rise to, or governing any Claim or Equity Interest
shall be deemed canceled and annulled without further act or action under any
applicable agreement, law, regulation, order, or rule, and the obligations of
the Debtor under such promissory notes, share certificates, instruments,
indentures, or agreements shall be discharged.
8.11. Effectuating Documents.
On or before ten (10) business days prior to the deadline for parties
to vote to accept or reject the Plan, the Proponent shall file with the
Bankruptcy Court substantially final forms of the agreements and other documents
that have been identified herein as Plan Documents, which documents and
agreements shall implement and be controlled by the Plan. Entry of the
Confirmation Order shall authorize the officers of UPC to execute, enter into,
and deliver all documents, instruments and agreements, including, but not
limited to, the Plan Documents, and to take all actions necessary or appropriate
to implement the Plan. To the extent the terms of any of the Plan Documents
conflict with the terms of the Plan, the Plan shall control.
8.12. Treatment of Affiliate Claims.
Except for valid intercompany payables and receivables between and
among the Debtor, Jackson and Calibur, which shall be unaffected by the Chapter
11 Case, all rights, claims, Causes of Action, obligations, and liabilities
between and among the Debtor and its Affiliates shall be waived, released, and
discharged upon the occurrence of the Effective Date.
8.13. Retention of Causes of Action.
Except as otherwise provided in the Plan, all Causes of Action
assertable by the Debtor including, without limitation, those Causes of Action
assertable pursuant to sections 542, 543, 544, 545, 547, 548, 549, 550, or 553
of the Bankruptcy Code, shall be retained by the Debtor and shall be vested in
the Debtor upon the occurrence of the Effective Date. Any net recovery realized
by the Debtor on account of such Causes of Action shall be property of the
Debtor.
8.14. Indemnification.
The entry of the Confirmation Order shall constitute a permanent
injunction against the prosecution of all claims and Causes of Action of any
Person against the officers, directors, employees and attorneys of the Debtor as
of the Confirmation Date to the extent such claims or Causes of Action (a) are
based in whole or in part on events occurring on or before the Confirmation
Date, and (b) have been indemnified by the Debtor under its charter, its bylaws,
applicable state law or any other agreement between the Debtor and such other
parties, or any combination of the foregoing.
8.15. Employee Benefits.
Except as may be otherwise provided in a motion filed with the
Bankruptcy Court prior to entry of the Confirmation Order, all employment and
severance practices, policies, and agreements, and all compensation and benefit
agreements, plans, policies, and programs of the Debtor applicable to its
directors, officers, or employees, including, without limitation, all savings
plans, health care plans, severance benefit plans, incentive plans, employment
agreements, workers' compensation programs, and life, disability, and other
insurance plans, to the extent in full force and effect on the date of the
commencement of the Confirmation Hearing, and excluding all Retiree Benefit
Plans, are treated as executory contracts under the Plan, and the Plan
constitutes and incorporates a motion to assume all such practices, policies,
agreements, plans, and programs pursuant to section 365(a) of the Bankruptcy
Code. The Confirmation Order shall represent and reflect an order of the
Bankruptcy Court approving such assumptions as of the Effective Date; provided,
that the confirmation and consummation of the Plan shall not constitute a change
of control or triggering event under any employment agreement.
8.16. Appointment of the Disbursing Agent.
Unless prior to the conclusion of the Confirmation Hearing the Debtor
specifically identifies a Person to serve as the Disbursing Agent under the
Plan, the Debtor shall serve as the Disbursing Agent.
8.17. Transactions on the Effective Date.
On the Effective Date, unless otherwise provided by the Confirmation
Order of the Bankruptcy Court, the following shall occur, shall be deemed to
have occurred simultaneously, and shall constitute substantial consummation of
the Plan:
(a) the New UPC Charter and Bylaws shall become effective;
(b) The Merger Agreement shall become effective and the
transactions contemplated by the Merger Agreement shall be
consummated;
(c) all payments and other distributions to be made on, or as
soon as practicable after, the Effective Date by the Debtor or the UPC
Trust pursuant to Articles IV and V of the Plan shall be made or duly
provided for;
(d) the UPC Trustee shall be duly appointed and qualified to
serve;
(e) the Debtor, the UPC Trustee and Infinity shall enter into the
Infinity Settlement Agreement and the transactions contemplated
thereby shall be consummated;
(f) the Debtor shall issue the shares of New UPC Common Stock and
New UPC Preferred Stock to be issued under the Plan; and
(g) the UPC Trustee, the Debtor, and Infinity shall enter into
and execute the UPC Trust Agreement, the UPC Trust shall be
established, and the property to be transferred to the UPC Trust
pursuant to Sections 7.2 and 7.3 of the Plan shall automatically vest
in the UPC Trust without further action on the part of the Debtor,
Infinity or the UPC Trustee, with the execution, delivery and filing
or recording as necessary of appropriate documents of conveyance and
physical delivery of such property occurring as soon thereafter as
practicable.
8.18. Sources of Cash for Plan Distributions.
All Cash necessary for the Debtor to make payments and distributions to
pursuant to the Plan shall be obtained from existing Cash balances, from funds
made available pursuant to Merger Financing, and the operations of the Debtor
and its subsidiaries, including UPC Merger Sub. All Cash necessary for the UPC
Trust to make payments to the holders of Allowed Securities Claims shall be
obtained from the assets contributed to the UPC Trust pursuant to the Plan, or
the proceeds thereof.
ARTICLE IX.
PROVISIONS GOVERNING DISTRIBUTIONS
9.1. Date of Distributions.
Any distributions and deliveries to be made under the Plan on account
of an Allowed Claim shall be made on the Distribution Date with respect to such
Allowed Claim, as otherwise provided for herein, or as may be ordered by the
Bankruptcy Court.
9.2. Disbursing Agent/UPC Trustee.
The Disbursing Agent shall make or direct all distributions required
under this Plan, except for distributions to the holders of Allowed Securities
Claims, which shall be made by the UPC Trustee.
9.3. Means of Cash Payment.
Cash payments made pursuant to the Plan shall be in US funds, by check
drawn on a domestic bank, or by wire transfer from a domestic bank, except that
payments made to foreign trade creditors holding Allowed Claims or to foreign
governmental units holding Allowed Priority Tax Claims shall be in such funds
and by such means as are customary or as may be necessary in a particular
foreign jurisdiction.
9.4. Delivery of Distributions.
Subject to Bankruptcy Rule 9010, distributions and deliveries to
holders of Allowed Claims shall be made at the address of each such holder (a)
as set forth on the proofs of Claim filed by such holders, (b) as set forth in
the Verification Form (as defined in the ADR), with respect to holders of
Allowed Securities Claims, or (c) at the last known address of such holders if
the Disbursing Agent, or the UPC Trustee (as applicable) have been notified of a
change of address, except as otherwise provided in this Article IX of the Plan.
If any holder's distribution is returned as undeliverable, no further
distributions to such holder shall be made unless and until the Disbursing Agent
(or the UPC Trustee, as applicable) receives notification of such holder's then
current address, at which time any missed distributions shall be made to such
holder without interest. Amounts in respect of undeliverable distributions shall
be returned to the Disbursing Agent (or the UPC Trustee, as applicable) until
such distributions are claimed. All claims for undeliverable distributions shall
be made on or before the second anniversary of the Distribution Date. After such
date all unclaimed property shall (a) in the case of distributions to holders of
Administrative Expense Claims, Priority Tax Claims, Class 1 -- Priority Non-Tax
Claims, the Class 2 -- Infinity Secured Claim, Class 3 -- Secured Claims, and
Class 4 -- General Unsecured Claims, Class 5 -- Debenture Claims, Class 6 --
Preferred Equity Interests and Class 7 -- Common Equity Interests revert to UPC,
and (b) in the case of Securities Claims, revert to the UPC Trust; and, in any
case, the Claim or Equity Interest of any holder with respect to such property
shall be discharged and forever barred.
9.5. Surrender of Notes, Instruments, and Securities.
As a condition to receiving distributions provided for by the Plan,
each holder of a promissory note, share certificate, or other instrument
evidencing a Claim or Equity Interest shall surrender such promissory note,
share certificate, or instrument to the Disbursing Agent (or, in the case of the
holders of Securities Claims, to the UPC Trustee) within sixty (60) days of the
Effective Date. All promissory notes, share certificates, and other instruments
surrendered pursuant to the preceding sentence shall be marked "Compromised and
Settled only as provided in Debtor's Plan of Reorganization." Unless waived by
the Disbursing Agent (or the UPC Trustee in the case of the holders of
Securities Claims), any person seeking the benefits of being a holder of an
Allowed Claim or Equity Interest evidenced by a promissory note, share
certificate, or other instrument, who fails to surrender such promissory note,
share certificates, or other instrument must (a) establish the unavailability of
such promissory note, share certificate, or other instrument to the reasonable
satisfaction of the Disbursing Agent (or the UPC Trustee, in the case of the
holders of Securities Claims), and (b) provide an indemnity bond in form and
amount acceptable to the Disbursing Agent (or the UPC Trustee, in the case of
the holders of Securities Claims) holding harmless the Debtor and the Disbursing
Agent (or the UPC Trustee, in the case of the holders of Securities Claims) from
any damages, liabilities, or costs incurred a result of treating such Person as
a holder of an Allowed Claim or Equity Interest, as applicable. Thereafter, such
Person shall be treated as the holder of an Allowed Claim or Equity Interest for
all purpose under the Plan. Notwithstanding the foregoing, any holder of a
promissory note, share certificate, or other instrument evidencing a Claim or
Equity Interest that fails within one year of the Effective Date to surrender to
the Debtor (or the UPC Trustee, as applicable) such note or other instrument, or
alternatively, to satisfy the requirements of the second sentence of this
Section 9.5 shall be deemed to have forfeited all rights, Claims against, and
Equity Interests in, the Debtor and shall not be entitled to receive any
distribution under the Plan.
9.6. Expenses Incurred On or After the Effective Date
and Claims of the Disbursing Agent and the UPC Trustee.
Except as otherwise ordered by the Bankruptcy Court, the amount of any
expenses incurred by the Disbursing Agent or the UPC Trustee on or after the
Effective Date (including, but not limited to, taxes) and any compensation and
expenses (including any post-confirmation fees, costs, expenses, or taxes) to be
paid to or by the Disbursing Agent or the UPC Trustee shall be borne by the
Debtor and the UPC Trust, respectively. Professional fees and expenses incurred
by the Disbursing Agent and the UPC Trustee after the Effective Date in
connection with the effectuation of the Plan shall be paid by each in the
ordinary course of business.
9.7. Time Bar to Cash Payments.
Checks issued by the Disbursing Agent or the UPC Trustee in respect of
Allowed Claims shall be null and void if not negotiated within ninety (90) days
after the date of issuance thereof. Requests for reissuance of any check shall
be made directly to the Disbursing Agent or the UPC Trustee, as applicable, by
the holder of the Allowed Claim with respect to which such check originally was
issued. Any claim in respect of such a voided check shall be made on or before
the later of (a) the second anniversary of the Distribution Date or (b) ninety
(90) days after the date of issuance of such check. After such date, all Claims
in respect of void checks shall be discharged and forever barred.
9.8. Initial and Interim Distributions.
Initial distributions and interim distributions, if any, under the Plan
to the holders of Allowed Securities Claims shall be made on the Distribution
Dates and be based on the UPC Trustee' calculation or estimate of the amount of
Allowed Securities Claims, unless upon the timely request of a party in
interest, the Bankruptcy Court determines that a different estimate is
appropriate. Final distributions shall be based on the actual amount of Allowed
Securities Claims.
9.9. Effect of Distributions on Account of Securities Claims.
The making of a final distribution under the Plan on account of an
Allowed Securities Claim shall effect, without the need to take any further
action, the assignment of all right, title, claim, and interest in and to such
Allowed Securities Claim to the UPC Trust.
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
CONTESTED CLAIMS AND EQUITY INTERESTS
10.1. Objection Deadline.
As soon as practicable, but in no event later than sixty (60) days
after the Effective Date (subject to being extended by the Bankruptcy Court upon
motion of the Debtor without notice or a hearing), objections to Claims (except
Securities Claims) shall be filed with the Bankruptcy Court and served upon the
holders of each of the Claims to which objections are made; provided, that no
objection may be filed with respect to any Claim that is Allowed on or before
the Effective Date pursuant to Section 1.1(d)(i)(A), (B) or (D) of the Plan.
10.2. Prosecution of Objections.
After the date of entry of the Confirmation Order, only the Disbursing
Agent shall have authority to file, litigate, settle, or withdraw objections to
Claims (except for Securities Claims). All disputes regarding the existence
amount and treatment of Securities Claims shall be resolved pursuant to ADR,
except as otherwise provided in the Plan.
10.3. No Distributions Pending Allowance.
Notwithstanding any other provision of the Plan, no payment or
distribution shall be made with respect to any Claim or Equity Interest to the
extent it is Contested unless and until such Contested Claim becomes an Allowed
Claim or Equity Interest.
10.4. Distributions After Allowance.
Payments and distributions to each holder of a Contested Claim or
Equity Interest, to the extent that such Claim or Equity Interest ultimately
becomes Allowed, shall be made in accordance with the provision of the Plan
governing the class of Claims or Equity Interests to which the respective holder
belongs.
10.5. Estimation of Claims.
The Disbursing Agent (or the UPC Trustee, as applicable) may, at any
time, request that the Bankruptcy Court estimate any Contested Claim or Equity
Interest pursuant to section 502(c) of the Bankruptcy Code regardless of whether
the Disbursing Agent (or the UPC Trustee, as applicable) has previously objected
to such Claim or Equity Interest or whether the Bankruptcy Court has ruled on
any such objection, and the Bankruptcy Court will retain jurisdiction to
estimate any Claim or Equity Interest at any time during litigation concerning
any objection to any Claim, including during the pendency of any appeal relating
to any such objection. In the event that the Bankruptcy Court estimates any
Contested Claim or Equity Interest, that estimated amount will constitute either
the allowed amount of such Claim or Equity Interest or a maximum limitation on
such Claim or Equity Interest, as determined by the Bankruptcy Court. If the
estimated amount constitutes a maximum limitation on such Claim or Equity
Interest, the Disbursing Agent (or the UPC Trustee, as applicable) may elect to
pursue any supplemental proceedings to object to any ultimate payment on such
Claim or Equity Interest. All of the objection, estimation, settlement, and
resolution procedures set forth in the Plan are cumulative and not necessarily
exclusive of one another. Claims or Equity Interests may be estimated and
subsequently compromised, settled, withdrawn or resolved by any mechanism
approved by the Bankruptcy Court.
ARTICLE XI.
POWERS AND DUTIES OF THE DISBURSING AGENT
11.1. Exculpation.
Except as otherwise provided in this Section 11.1, the Disbursing
Agent, together with its officers, directors, employees, agents, and
representatives, are hereby exculpated by all Persons, holders of Claims and
Equity Interests, and parties in interest, from any and all Causes of Action,
and other assertions of liability (including breach of fiduciary duty) arising
out of the discharge of the powers and duties conferred upon the Disbursing
Agent by the Disbursement Agreement, the Plan, any Final Order of the Bankruptcy
Court entered pursuant to or in the furtherance of the Plan, or applicable law,
except solely for actions or omissions arising out of the Disbursing Agent's
willful misconduct. No holder of a Claim or an Equity Interest, or
representative thereof, shall have or pursue any claim or cause of action (i)
against the Disbursing Agent or its officers, directors, employees, agents, and
representatives for making payments in accordance with the Plan, or for
liquidating assets to make payments under the Plan, or (ii) against any holder
of a Claim or an Equity Interest for receiving or retaining payments or
transfers of assets as provided for by the Plan. Nothing contained in this
Section 11.1 shall preclude or impair any holder of an Allowed Claim or Equity
Interest from bringing an action in the Bankruptcy Court against the Debtor to
compel the making of distributions contemplated by the Plan on account of such
Claim or Equity Interest.
11.2. Powers and Duties of the Disbursing Agent.
Pursuant to the terms and provisions of the Disbursement Agreement and
the Plan, the Disbursing Agent shall be empowered and directed to (a) take all
steps and execute all instruments and documents necessary to make distributions
to holders of Allowed Claims (except Securities Claims); (b) make distributions
contemplated by the Plan; (c) comply with the Plan and the obligations
thereunder; (d) employ, retain, or replace professionals to represent it with
respect to its responsibilities; (e) object to Claims (except Securities Claims)
as specified in Article X hereof, and prosecute such objections; (f) compromise
and settle any issue or dispute regarding the amount, validity, priority,
treatment, or Allowance of any Claim (except Securities Claims) without further
notice or hearing, and without the need for an order of the Bankruptcy Court
approving such compromise or settlement; (g) make annual and other periodic
reports regarding the status of distributions under the Plan to the holders of
Allowed Claims that are outstanding against the Debtor at this time; such
reports to be made available upon request to the holders of any Contested Claim;
and (h) exercise such other powers as may be vested in the Disbursing Agent
pursuant to the Disbursement Agreement, order of the Bankruptcy Court, or the
Plan.
ARTICLE XII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
12.1. Assumed If Not Rejected.
The Plan constitutes and incorporates a motion to reject all
prepetition executory contracts, and all prepetition unexpired leases to which
the Debtor is a party, except for an executory contract or lease that (a) has
been assumed or rejected by Final Order of the Bankruptcy Court; or (b) is the
subject of a motion to assume or reject that is pending before the Bankruptcy
Court on the Effective Date. The Confirmation Order shall represent and reflect
an order of the Bankruptcy Court approving such rejections and assumptions of
executory contracts and leases as of the Effective Date.
12.2. Cure Payments.
Any monetary amounts by which the contracts and leases to be assumed
under the Plan are in default shall be satisfied (a) by delivery of one Cash
payment on the Distribution Date in the amount of such default, or (b) as
otherwise agreed by the parties or ordered by the Bankruptcy Court.
12.3. Bar to Rejection Damages.
If the rejection of an executory contract or unexpired lease by the
Debtor results in damages to the other party or parties to such contract or
lease, a Claim for such damages, if not heretofore evidenced by a filed proof of
Claim, shall be forever barred and shall not be enforceable against the Debtor,
or its properties or agents, successors, or assigns, unless a proof of Claim is
filed with the Bankruptcy Court and served upon counsel for the Debtor on or
before thirty (30) days after service of notice of entry of the Confirmation
Order.
ARTICLE XIII.
CONDITIONS PRECEDENT TO CONFIRMATION
OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE
13.1. Conditions Precedent to Confirmation.
(a) It is a condition to confirmation of the Plan that the
Clerk of the Bankruptcy Court shall have entered an order or orders on
the docket in the Chapter 11 Case, which may be the Confirmation Order,
approving the Plan Documents, authorizing the Debtor to execute, enter
into, and deliver the Plan Documents and to execute, implement, and
give effect to, the transactions contemplated thereby.
(b) It is a condition to confirmation of the Plan that the
Clerk of the Bankruptcy Court shall have entered an order or orders on
the docket in the Chapter 11 Case, which may be the Confirmation Order,
approving the Merger Agreement and authorizing the Debtor, UPC Merger
Sub and FSCI to consummate the Merger.
(c) It is a condition to confirmation of the Plan that the
Clerk of the Bankruptcy Court shall have entered an order or orders on
the docket in the Chapter 11 Case, which may be the Confirmation Order,
approving the compromises and settlements described in Section 14.1 of
the Plan.
(d) It is a condition to confirmation of the Plan that the
Clerk of the Bankruptcy Court shall have entered an order or orders on
the docket in the Chapter 11 Case, which may be the Confirmation Order,
issuing the injunctions described in Section 16.12 of the Plan.
13.2. Conditions Precedent to the Occurrence of the Effective Date.
(a) It is a condition to the occurrence of the Effective Date
that the Confirmation Order shall have been entered by the Clerk of the
Bankruptcy Court on the docket in the Chapter 11 Case, be in full force
and effect and be in form and substance satisfactory to Infinity and
FSCI.
(b) It is a condition to the occurrence of the Effective Date
that (i) the Merger Financing shall have been obtained and (ii) FSCI
shall have acquired and hold 100% ownership interest in and to the Farm
Stores Assets.
(c) It is a condition to the occurrence of the Effective Date
that all necessary and material consents, authorizations and approvals
shall have been given or waived for the transfers and transactions
described in the Merger Agreement.
(d) It is a condition to the occurrence of the Effective Date
that all necessary and material consents, authorizations and approvals
shall have been given or waived for the transfers of property and the
payments described in Sections 7.2 and 7.3 of the Plan, as applicable.
13.3. Waiver of Conditions.
The Proponent (with the consent of Infinity and FSCI) may waive any of
the conditions set forth in Sections 13.1 and 13.2 of the Plan in a writing
executed by each of them.
ARTICLE XIV.
COMPROMISE AND SETTLEMENT
OF CERTAIN CAUSES OF ACTION
14.1. Compromise and Settlement Between and Among the Debtor, the UPC Trust
and the Infinity Parties.
The Plan constitutes a motion pursuant to Bankruptcy Rule 9019 for the
entry of an order authorizing and approving the following compromise and
settlement between and among the Debtor, the UPC Trust and the Infinity Parties:
(a) For and in consideration of the undertakings and other
agreements of the Infinity Parties under and in connection with the
Plan and the Infinity Settlement Agreement, as of the Effective Date,
the Debtor shall: (i) issue 70,000 shares of New UPC Preferred Stock to
Infinity, or its designee, and (ii) release the Infinity Parties from
any and all Causes of Action arising in whole or in part from conduct
or events that occurred prior to the Effective Date (including, without
limitation, derivative claims which the Debtor otherwise has legal
power to assert, compromise or settle in connection with the Chapter 11
Case), except as otherwise provided in the Plan and the Infinity
Settlement Agreement.
(b) For and in consideration of the undertakings and
agreements of UPC under and in connection with the Plan and the
Infinity Settlement Agreement, as of the Effective Date, the Infinity
Parties shall (i) waive and release all of their rights, interests and
claims (including, without limitation, as to UPC, Calibur, Jackson and
under the Thomas Guarantee) in and under the Calibur A Note and the
Calibur B Note, (ii) contribute 200,000 shares of New UPC Common Stock
to the UPC Trust as provided in Section 7.3 of the Plan, and (iii)
release the Debtor, and its Affiliates, and their respective past and
present directors, officers, employees, agents, sales representatives,
and attorneys from any and all Causes of Action and Claims Over arising
in whole or in part from conduct or events that occurred prior to the
Effective Date, except as otherwise provided in the Plan and the
Infinity Settlement Agreement.
(c) As of the Effective Date, the Infinity Parties and the
Debtor shall release the UPC Trust and the UPC Trustee from any and all
Causes of Action arising in whole or in part from conduct or events
that occurred prior to the Effective Date, except as otherwise provided
in the Plan and the Infinity Settlement Agreement.
ARTICLE XV.
RETENTION OF JURISDICTION
15.1. Scope of Jurisdiction.
Notwithstanding the entry of the Confirmation Order and the occurrence
of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over
the Chapter 11 Case after the Effective Date as legally permissible, including,
but not limited to, jurisdiction to:
(a) Allow, disallow, determine, liquidate, classify, estimate
or establish the priority or secured or unsecured status of any Claim,
including the resolution of any request for payment of any
Administrative Expense Claim and the resolution of any and all
objections to the allowance or priority of Claims;
(b) Grant or deny any applications for allowance and payment
of any Fee Claim for periods ending on or before the Effective Date;
(c) Resolve any matters related to the assumption, assumption
and assignment or rejection of any executory contract or unexpired
lease to which the Debtor is a party or with respect to which the
Debtor may be liable and to hear, determine and, if necessary,
liquidate, any Claims arising therefrom, including those matters
related to the amendment after the Effective Date pursuant to Article
XVI of the Plan to add any executory contracts or unexpired leases to
Appendix II hereto;
(d) Ensure that distributions to holders of Allowed Claims are
accomplished pursuant to the provisions of the Plan, including ruling
on any motion filed pursuant to Article XII;
(e) Decide or resolve any motions, adversary proceedings,
contested or litigated matters and any other matters and grant or deny
any applications involving the Debtor that may be pending on or
commenced after the Effective Date;
(f) Enter such orders as may be necessary or appropriate to
implement or consummate the provisions of the Plan, the Merger
Agreement and all contracts, instruments, releases, indentures and
other agreements or documents created in connection with the Plan or
the Disclosure Statement, including without limitation the UPC Trust
Agreement and the Infinity Settlement Agreement, including to correct
any defect, cure any omission or reconcile any inconsistency, except as
provided in Section 15.1(g) or elsewhere herein;
(g) Resolve any cases, controversies, suits, or disputes that
may arise in connection with the consummation, interpretation or
enforcement of the Plan or the UPC Trust Agreement or any entity's
obligations incurred in connection with the Plan or the UPC Trust
Agreement, or any other agreements governing, instruments evidencing or
documents relating to any of the foregoing, including the
interpretation or enforcement of any rights, remedies or obligations
under any of the foregoing;
(h) Issue injunctions, enter and implement other orders or
take such other actions as may be necessary or appropriate to restrain
interference by any entity with Consummation or enforcement of the
Plan, except as otherwise provided herein;
(i) Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified,
stayed, reversed, revoked or vacated;
(j) Determine any other matters that may arise in connection
with or relate to the Plan, the Disclosure Statement, the Confirmation
Order or any contract, instrument, release, indenture or other
agreement or document created in connection with the Plan or the
Disclosure Statement, including without limitation the UPC Trust
Agreement, except as provided in Section 15.1(g) or elsewhere herein;
and
(k) Enter a Final Decree as contemplated by Bankruptcy Rule
3022.
ARTICLE XVI.
MISCELLANEOUS PROVISIONS
16.1. Notice of Entry of Confirmation Order and Relevant Dates.
Promptly upon entry of the Confirmation Order, the Debtor shall publish
as directed by the Bankruptcy Court and serve on all known parties in interest,
holders of Claims, and holders of Equity Interests, notice of the entry of the
Confirmation Order and all relevant deadlines and dates under the Plan,
including, but not limited to, the deadline for filing notice of Administrative
Expense Claims (Section 5.1 hereof), and the deadline for filing rejection
damage claims (Section 12.3 hereof).
16.2. Payment of Statutory Fees.
All fees payable pursuant to section 1930 of title 28 of the United
States Code, as determined if necessary by the Bankruptcy Court at the hearing
pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before the
Effective Date.
16.3. No Interest or Attorneys' Fees.
Except as expressly stated in the Plan, or as allowed by the Bankruptcy
Court, no interest, penalty or late charge arising after the Petition Date, and
no award or reimbursement of attorneys fees or related expenses or
disbursements, shall be allowed on, or in connection with, any Claim.
16.4. Modification of the Plan.
Modification of the Plan may be proposed in writing by the Proponent at
any time before confirmation, provided that the Plan, as modified, meets the
requirements of section 1122 and 1123 of the Bankruptcy Code, and the Debtor
shall have complied with section 1125 of the Bankruptcy Code. The Proponent may
modify the Plan (with the consent of Infinity and FSCI) at any time after
confirmation and before substantial consummation, provided that the Plan, as
modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy
Code and the Bankruptcy Court, after notice and a hearing, confirms the Plan as
modified, under section 1129 of the Bankruptcy Code, and the circumstances
warrant such modifications. A holder of a Claim that has accepted or rejected
the Plan shall be deemed to have accepted or rejected, as the case may be, such
plan as modified, unless, within the time fixed by the Bankruptcy Court, such
holder changes its previous acceptance or rejection.
16.5. Revocation of Plan.
The Proponent reserves the right to revoke and withdraw the Plan after
the Confirmation Date and prior to the occurrence of the Effective Date (with
the consent of Infinity and FSCI). If the Proponent revokes or withdraws the
Plan, or if the Effective Date does not occur, then, the Plan and all
settlements set forth in Article XIV of the Plan shall be deemed null and void
and nothing contained herein shall be deemed to constitute a waiver or release
of any Claims by or against the Proponent or any other person or to prejudice in
any manner the rights of the Proponent or any person in any other further
proceedings involving the Debtor.
16.6. Exemption From Transfer Taxes.
Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer, or exchange of notes or equity securities under the Plan, the creation
of any mortgage, deed of trust, or other security interest, the making or
assignment of any lease or sublease, or the making or delivery of any deed or
other instrument of transfer under, in furtherance of, or in connection with,
the Plan, including, without limitation, the Merger Agreements or any agreements
of consolidation, deeds, bills of sale, or assignments executed in connection
with any of the transactions contemplated under the Plan shall not be subject to
any stamp, real estate, transfer, mortgage recording, or other similar tax.
16.7. Setoff Rights.
In the event that the Debtor has a claim of any nature whatsoever
against the holder of a Claim, the Debtor may, but is not required to, setoff
against the Claim (and any payments or other distributions to be made in respect
of such Claim hereunder) the Debtor's claim against the holder, unless any such
claim is or will be released under the Plan, subject to the provisions of
section 553 of the Bankruptcy Code. Neither the failure to set off nor the
allowance of any Claim under the Plan shall constitute a waiver or release by
the Debtor of any claim that the Debtor has against the holder of a Claim.
16.8. Subordination Rights.
All Claims against and Equity Interests in the Debtor, based upon any
claimed subordination rights against the Debtor or rights to avoid payments or
transfers of property by the Debtor pursuant to any provision of the Bankruptcy
Code or other applicable law, shall be deemed satisfied as to the Debtor by the
distributions under the Plan to holders of Allowed Claims and Allowed Equity
Interests having such subordination rights and any rights to avoid payments or
transfers of property. As proposed in the Plan, the distributions to the various
classes of Claims hereunder shall not be subject to levy, garnishment,
attachment, or like legal process by any holder of a Claim or Equity Interest by
reason of any claimed subordination rights or otherwise of the holder of a Claim
or Equity Interest against the holder of another Claim or Equity Interest,
except as otherwise provided herein. Distributions under the Plan shall be
subject to and modified by any order pursuant to which a party in interest
obtains a Final Order directing distributions other than as provided in the
Plan, which distributions take into account the subordination rights of holders
of Claims and Equity Interests between and among themselves.
16.9. Compliance with Tax Requirements.
In connection with the Plan, the Debtor, and the Disbursing Agent, and
the UPC Trustee shall comply with all withholding and reporting requirements
imposed by federal, state, local, and foreign taxing authorities and all
distributions hereunder shall be subject to such withholding and reporting
requirements. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer, or exchange of promissory notes, equity securities, or other
instruments under the Plan, the creation of any mortgage, deed of trust, or
other security interest, the making or assignment of any lease or sublease or
the making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan, including, without limitation,
any merger agreements or agreements of consolidation, deeds, bills of sale, or
assignments executed in connection with any of the transactions contemplated
under the Plan shall not be subject to any stamp, real estate transfer, mortgage
recording, or other similar tax.
16.10. Recognition of Guaranty Rights.
The classification of and manner of satisfying all Claims under the
Plan take into consideration (a) the existence of guaranties by the Debtor of
obligations of other Persons, and (b) the fact that the Debtor may be a joint
obligor with other Persons with respect to an obligation. All Claims against the
Debtor based upon any such guaranties or joint obligations shall be discharged
in the manner provided in the Plan; provided, that no creditor shall be entitled
to receive more than one recovery with respect to any of its Allowed Claims.
16.11. Compliance With All Applicable Laws.
If notified by any governmental authority that it is in violation of
any applicable law, rule, regulation, or order of such governmental authority
relating to its businesses, the Debtor, shall take whatever action as may be
required to comply with such law, rule, regulation, or order; provided, that
nothing contained herein shall require such compliance if the legality or
applicability of any such requirement is being contested in good faith, and, if
appropriate, an adequate reserve for such requirement has been set aside.
16.12. Discharge of Claims.
Except as otherwise provided herein or in the Confirmation Order, the
rights afforded in the Plan and the payments and distributions to be made
hereunder shall discharge all existing debts and Claims of any kind, nature, or
description whatsoever against the Debtor or the Estate Assets to the extent
permitted by section 1141 of the Bankruptcy Code; upon the Effective Date, all
existing Claims shall be, and shall be deemed to be discharged; and all holders
of Claims shall be precluded from asserting against the Debtor, or any of the
Estate Assets, any other or further Claim based upon any act or omission,
transaction, or other activity of any kind or nature that occurred prior to the
Effective Date, whether or not such holder filed a proof of Claim.
16.13. Injunctions.
(a) On the Effective Date, all Persons who have been, are, or
may be holders of Claims against or Equity Interests in the Debtor
shall be enjoined from taking any of the following actions against or
affecting the Debtor, its Estate, or its assets and property with
respect to such Claims or Equity Interests (other than actions brought
to enforce any rights or obligations under the Plan and appeals, if
any, from the Confirmation Order):
(i) commencing, conducting or continuing in any
manner, directly or indirectly, any suit, action or other
proceeding of any kind against the Debtor, its Estate, or its
assets or property, or any direct or indirect successor in
interest to the Debtor, or any assets or property of such
transferee or successor (including, without limitation, all
suits, actions, and proceedings that are pending as of the
Effective Date, which must be withdrawn or dismissed with
prejudice);
(ii) enforcing, levying, attaching, collecting or
otherwise recovering by any manner or means whether directly
or indirectly any judgment, award, decree or order against the
Debtor, its Estate, or its assets or property, or any direct
or indirect successor in interest to the Debtor, or any assets
or property of such transferee or successor;
(iii) creating, perfecting or otherwise enforcing in
any manner, directly or indirectly, any Lien against the
Debtor, its Estate, or its respective assets or property, or
any direct or indirect successor in interest to any of the
Debtor, or any assets or property of such transferee or
successor other than as contemplated by the Plan;
(iv) asserting any setoff, right of subrogation or
recoupment of any kind, directly or indirectly against any
obligation due the Debtor, its Estate, or its respective
assets or property, or any direct or indirect successor in
interest to any of the Debtor, or any assets or property of
such transferee or successor; and
(v) proceeding in any manner in any place whatsoever
that does not conform to or comply with the provisions of the
Plan or the settlement set forth in Article XIV of the Plan to
the extent such settlements have been approved by the
Bankruptcy Court in connection with confirmation of the Plan.
(b) Except as provided herein, as of the Effective Date, all
Persons are permanently enjoined from commencing or continuing in any
manner, any action or proceeding (including, without limitation, the
Causes of Action asserted in the Pisacreta/Tucci Action), whether
directly, derivatively, on account of or respecting any Claim, debt,
right, Cause of Action or liability released or to be released pursuant
to the Plan.
(c) From and after the Effective Date, any Infinity Securities
Claim shall channel and transfer to the UPC Trust, and all Persons who
have been, are, or may be holders of any such Infinity Securities Claim
shall be enjoined from taking any of the following actions against or
affecting Infinity or its assets and property with respect to such
Infinity Securities Claim (other than actions brought to enforce any
rights or obligations under the Plan, the UPC Trust Agreement and the
Infinity Settlement Agreement):
(i) commencing, conducting or continuing in any
manner, directly or indirectly, any suit, action or other
proceeding of any kind against any Infinity party or its
assets or property, or its direct or indirect successors in
interest, or any assets or property of such transferee or
successor (including, without limitation, all suits, actions,
and proceedings that are pending as of the Effective Date,
which must be withdrawn or dismissed with prejudice);
(ii) enforcing, levying, attaching, collecting or
otherwise recovering by any manner or means whether directly
or indirectly any judgment, award, decree or order against any
Infinity Party or its assets or property, or its direct or
indirect successors in interest, or any assets or property of
such transferee or successor;
(iii) creating, perfecting or otherwise enforcing in
any manner, directly or indirectly, any Lien against any
Infinity Party or its assets or property, or its direct or
indirect successors in interest, or any assets or property of
such transferee or successor;
(iv) asserting any set-off, right of subrogation or
recoupment of any kind, directly or indirectly against any
obligation due any Infinity Party, or its assets or property,
or its direct or indirect successors in interest, or any
assets or property of such transferee or successor; and
(v) proceeding in any manner in any place whatsoever
that does not conform to or comply with the provisions of the
Plan, or the settlements set forth in Article XIV of the Plan,
the UPC Trust Agreement or the Infinity Settlement Agreement.
(d) The injunction provided by Section 16.12(c) shall
terminate and be of no further force or effect if at any time or from
time to time the UPC Trustee file with the Bankruptcy Court and serve
upon the Infinity Parties a notice that the UPC Trust assets have been
fully expended and that additional Allowed Securities Claims exists or
that all Securities Claims have not yet been resolved and the Infinity
Parties, within thirty (30) days after the filing of such notice, fail
to make an additional contribution to the UPC Trust in an aggregate
amount equivalent to (A) not less than $100,000 (provided that such
amount must be at least enough to satisfy all outstanding Allowed
Securities Claims in full and provide at least $25,000 to fund the
expenses of the UPC Trust in liquidating any remaining Securities
Claims) or (B) such lesser amount as may be agreed to by the UPC
Trustee.
16.14. Discharge of the Debtor.
Any consideration distributed under the Plan shall be in exchange for
and in complete satisfaction, discharge, and release of all Claims of any nature
whatsoever against the Debtor and any of its assets or properties; and, except
as otherwise provided herein, upon the Effective Date, the Debtor shall be
deemed discharged and released to the extent permitted by section 1141 of the
Bankruptcy Code from any and all Claims, including but not limited to demands
and liabilities that arose before the Effective Date, and all debts of the kind
specified in section 502(g), 502(h), or 502(i) of the Bankruptcy Code, whether
or not (a) a proof of Claim based upon such debt is filed or deemed filed under
section 501 of the Bankruptcy Code; (b) a Claim based upon such debt is allowed
under section 502 of the Bankruptcy Code; or (c) the holder of a Claim based
upon such debt has accepted the Plan. Except as provided herein, the
Confirmation Order shall be a judicial determination of discharge of all
liabilities of the Debtor. As provided in section 524 of the Bankruptcy Code,
such discharge shall void any judgment against the Debtor at any time obtained
to the extent it relates to a Claim discharged, and operates as an injunction
against the prosecution of any action against the Debtor, or its property, to
the extent it relates to a Claim discharged.
16.15. Exculpation.
Neither the Proponent, Infinity, FSCI, any of their respective
Affiliates, nor any of their respective members, officers, directors, managers,
employees, agents, or professionals shall have or incur any liability to any
holder of a Claim or Equity Interest for any act, event, or omission in
connection with, or arising out of, the preparation and dissemination of the
Disclosure Statement, the solicitation of votes with respect to the Plan, the
Chapter 11 Case, the 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 willful misconduct.
16.16. Binding Effect.
The Plan shall be binding upon and inure to the benefit of the Debtor,
Infinity, the holders of all Claims and Equity Interests, and their respective
successors and assigns.
16.17. Notices.
Whenever service is required in the Plan, such service shall be made
upon the following parties so as to be received by 5:00 p.m. eastern time on or
before the date required:
The Debtor:
Attn: President
United Petroleum Corporation
2620 Mineral Springs Road, Suite A
Knoxville, Tennessee 37917
Facsimile: (423) 688-3463
with a copy to:
Laura Davis Jones, Esquire
Young Conaway Stargatt & Taylor, LLP
Rodney Square North, 11th Floor
P.O. Box 391
Wilmington, Delaware 19899-0391
Facsimile: (305) 571-1254
David A. Wood, Esquire
Wood, Exall & Bonnet, L.L.P.
12222 Merit Drive, Suite 880
Dallas, Texas 75251
Facsimile: (972) 991-9261
Infinity:
Infinity Investors Limited
38 Hertford Street
London, England WIY-7T6
Facsimile:
with a copy to:
Stuart J. Chasanoff, Esquire
HW Finance LLC
1601 Elm Street, Suite 4000
Dallas, Texas 75201
Facsimile: (214)720-1667
Thomas E Lauria, Esquire
White & Case
First Union Financial Center
200 South Biscayne Boulevard
Miami, FL 33131
Facsimile: (305) 358-5744
16.18. Governing Law.
Unless a rule of law or procedure is supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules) or the Delaware General Corporation
Law, the laws of the State of Delaware shall govern the construction and
implementation of the Plan and any agreements, documents, and instruments
executed in connection with the Plan or the Chapter 11 Case, including the Plan
Documents, except as may otherwise be provided in such agreements, documents,
instruments, and Plan Documents.
<PAGE>
16.19. Severability.
SHOULD THE BANKRUPTCY COURT DETERMINE THAT ANY PROVISION OF THE PLAN IS
UNENFORCEABLE EITHER ON ITS FACE OR AS APPLIED TO ANY CLAIM OR EQUITY INTEREST
OR TRANSACTION, THE PROPONENT (WITH THE CONSENT OF INFINITY) MAY MODIFY THE PLAN
IN ACCORDANCE WITH SECTION 16.5 OF THE PLAN SO THAT SUCH PROVISION SHALL NOT BE
APPLICABLE TO THE HOLDER OF ANY CLAIM OR EQUITY INTEREST. SUCH A DETERMINATION
OF UNENFORCEABILITY SHALL NOT (A) LIMIT OR AFFECT THE ENFORCEABILITY AND
OPERATIVE EFFECT OF ANY OTHER PROVISION OF THE PLAN OR (B) REQUIRE THE
RESOLICITATION OF ANY ACCEPTANCE OR REJECTION OF THE PLAN.
Dated: July ___, 1999
Respectfully submitted,
UNITED PETROLEUM CORPORATION
By:
Its:
<PAGE>
APPENDICES
Appendix I -- The Merger Agreement.
Appendix II -- Alternative Dispute Resolution Procedures For Treatment of
Securities Claims Pursuant to The Plan of Reorganization Under
Chapter 11 of the United States Bankruptcy Code For United
Petroleum Corporation.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS AND INTERPRETATION.................................................1
1.1. Definitions..............................................................1
1.2. Interpretation..........................................................12
1.3. Application of Definitions and Rules of
Construction Contained in the Bankruptcy Code...........................12
1.4. Other Terms.............................................................12
1.5. Appendices and Plan Documents...........................................12
ARTICLE II
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.................................12
2.1. Claims and Equity Interests Classified..................................12
2.2. Administrative Expense Claims and Priority Tax Claims...................13
2.3. Claims and Equity Interests.............................................13
2.4. Separate Classification of Secured Claims...............................13
ARTICLE III
IDENTIFICATION OF IMPAIRED
CLASSES OF CLAIMS AND EQUITY INTERESTS........................................13
3.1. Unimpaired Classes of Claims and Equity Interests.......................13
3.2. Impaired Classes of Claims and Equity Interests.........................14
3.3. Impairment Controversies................................................14
ARTICLE IV.
PROVISIONS FOR TREATMENT OF CLAIMS
AND EQUITY INTERESTS UNDER THE PLAN...........................................14
4.1. Treatment of Claims and Equity Interests................................14
ARTICLE V.
PROVISIONS FOR TREATMENT
OF UNCLASSIFIED CLAIMS UNDER THE PLAN.........................................15
5.1. Treatment of Administrative Expense Claims..............................15
5.2. Treatment of Priority Tax Claims........................................16
ARTICLE VI.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
CLASSES OF CLAIMS OR EQUITY INTERESTS.........................................17
6.1. Classes Entitled to Vote................................................17
6.2. Class Acceptance Requirement............................................17
6.3. Confirmation Without Acceptance by All Impaired Classes.................17
ARTICLE VII.
TRANSFERS OF PROPERTY TO AND
ASSUMPTION OF CERTAIN LIABILITIES BY THE UPC TRUST............................18
7.1. Creation of UPC Trust and Appointment of Trustee........................18
7.2. Transfers of Certain Property of the Debtor to the UPC Trust............18
7.3. Transfers of Certain Property of the
Infinity Parties to the UPC Claims Trust................................18
7.4. Distribution of Assets by the UPC Trust.................................19
7.5. Assumption of Certain Liabilities by the UPC Trust......................19
7.6. Certain Property Held in Trust by the Debtor and the Infinity Parties...19
7.7. Obligations of the UPC Trust with Regard to Claims Over.................20
7.8. Powers and Duties of the UPC Trustee....................................21
ARTICLE VIII.
MEANS FOR IMPLEMENTATION OF THE PLAN..........................................22
8.1. Continued Corporate Existence...........................................22
8.2. The Merger..............................................................22
8.3. Vesting of Assets.......................................................22
8.4. Management..............................................................22
8.5. Reconstitution of UPC Board of Directors................................23
8.6. Officers ...............................................................23
8.7. The New UPC Charter and Bylaws..........................................23
8.8. Issuance of New UPC Common Stock........................................23
8.9. Issuance of New UPC Preferred Stock.....................................24
8.10. Cancellation of Instruments and Agreements..............................24
8.11. Effectuating Documents..................................................24
8.12. Treatment of Affiliate Claims...........................................25
8.13. Retention of Causes of Action...........................................25
8.14. Indemnification.........................................................25
8.15. Employee Benefits.......................................................25
8.16. Appointment of the Disbursing Agent.....................................26
8.17. Transactions on the Effective Date......................................26
8.18. Sources of Cash for Plan Distributions..................................26
ARTICLE IX.
PROVISIONS GOVERNING DISTRIBUTIONS............................................27
9.1. Date of Distributions...................................................27
9.2. Disbursing Agent/UPC Trustee............................................27
9.3. Means of Cash Payment...................................................27
9.4. Delivery of Distributions...............................................27
9.5. Surrender of Notes, Instruments, and Securities.........................28
9.6. Expenses Incurred On or After the Effective Date
and Claims of the Disbursing Agent and the UPC Trustee..................28
9.7. Time Bar to Cash Payments...............................................29
9.8. Initial and Interim Distributions.......................................29
9.9. Effect of Distributions on Account of Securities Claims.................29
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
CONTESTED CLAIMS AND EQUITY INTERESTS.........................................29
10.1. Objection Deadline......................................................29
10.2. Prosecution of Objections...............................................29
10.3. No Distributions Pending Allowance......................................30
10.4. Distributions After Allowance...........................................30
10.5. Estimation of Claims....................................................30
ARTICLE XI.
POWERS AND DUTIES OF THE DISBURSING AGENT.....................................30
11.1. Exculpation.............................................................30
11.2. Powers and Duties of the Disbursing Agent...............................31
ARTICLE XII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.........................31
12.1. Assumed If Not Rejected.................................................31
12.2. Cure Payments...........................................................32
12.3. Bar to Rejection Damages................................................32
ARTICLE XIII.
CONDITIONS PRECEDENT TO CONFIRMATION
OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE..........................32
13.1. Conditions Precedent to Confirmation....................................32
13.2. Conditions Precedent to the Occurrence of the Effective Date............33
13.3. Waiver of Conditions....................................................33
ARTICLE XIV.
COMPROMISE AND SETTLEMENT
OF CERTAIN CAUSES OF ACTION...................................................33
14.1. Compromise and Settlement Between and Among
the Debtor, the UPC Trust and the Infinity Parties......................33
ARTICLE XV.
RETENTION OF JURISDICTION.....................................................34
15.1. Scope of Jurisdiction...................................................34
ARTICLE XVI.
MISCELLANEOUS PROVISIONS......................................................36
16.1. Notice of Entry of Confirmation Order and Relevant Dates................36
16.2. Payment of Statutory Fees...............................................36
16.3. No Interest or Attorneys'Fees...........................................36
16.4. Modification of the Plan................................................36
16.5. Revocation of Plan......................................................36
16.6. Exemption From Transfer Taxes...........................................37
16.7. Setoff Rights...........................................................37
16.8. Subordination Rights....................................................37
16.9. Compliance with Tax Requirements........................................37
16.10. Recognition of Guaranty Rights.........................................38
16.11. Compliance With All Applicable Laws....................................38
16.12. Discharge of Claims....................................................38
16.13. Injunctions............................................................38
16.14. Discharge of the Debtor................................................39
16.15. Exculpation............................................................41
16.16. Binding Effect.........................................................41
16.17. Notices42
16.18. Governing Law..........................................................43
16.19. Severability...........................................................44
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
UNITED PETROLEUM CORPORATION, ) Case No. 99-88 (PJW)
)
Debtor. )
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER
AND ORDER CONFIRMING AMENDED PLAN OF REORGANIZATION
United Petroleum Corporation ("UPC" or "Debtor"), as
Debtor-In-Possession, having on July 23, 1999 filed the Second Amended Plan of
Reorganization Under Chapter 11 of The Bankruptcy Code for United Petroleum
Corporation (the "Plan"); and the Debtors having on July 23, 1999 filed the
Second Amended Disclosure Statement With Respect to Second Amended Plan of
Reorganization of United Petroleum Corporation (the "Disclosure Statement"); and
the Court, by Order dated July 23, 1999 (the "Disclosure Approval Order") having
approved the Disclosure Statement after notice and a hearing held on July 22,
1999 and July 23, 1999; and upon the affidavits of service filed herein
reflecting compliance with the notice and solicitation requirements of the
Disclosure Approval Order; and upon the Declaration of Kathleen Logan Certifying
the Ballots Accepting and Rejecting the Plan filed with the Court on August 23,
1999; and objections to confirmation of the Plan having been filed by (i) John
Rankin, (ii) Dan Dotan and Mantel Investments, (iii) The Internal Revenue
Service, (iv) John Pisacreta and James Lynn (the "Securities Claim Objectors")
and (v) the Securities and Exchange Commission (collectively, the "Objections');
and upon the submission of Plan Documents filed on August 13, 1999 (the "Plan
Documents"); and upon the submission of the revised form of Merger Agreement on
September 29, 1999 (the "Merger Agreement"), and after a hearing having been
held on September 29, 1999 (the "Hearing"); and upon the evidence adduced and
proffered and the arguments of counsel made at the Hearing; and the Court having
reviewed all documents in connection with confirmation and having heard all
parties desiring to be heard; and the Debtor, Infinity and the Securities Claim
Objectors having reached an agreement as set forth herein regarding the terms on
which the objections of the Securities Claim Objectors shall be resolved; and
upon the record compiled in the case; and after due deliberation and
consideration of all of the foregoing; and sufficient cause appearing therefor;
the Court hereby makes the following:
FINDINGS OF FACT AND CONCLUSIONS OF LAW:
A. Capitalized terms used herein, but not defined herein, shall have
the respective meanings attributed to such terms in the Plan and the Disclosure
Statement.
B. This Court has jurisdiction over the Debtor's chapter 11 case
pursuant to 28 U.S.C. Section 1334(a) and 157(l). Venue of these proceedings and
the chapter 11 case in this district is proper pursuant to 28 U.S.C. Section
1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. Section
157(b)(2).
C. The Plan complies with all of the applicable provisions of the
Bankruptcy Code.
D. The classification of claims and interests under the Plan is proper
under Section 1122 of the Bankruptcy Code.
E. The Plan provides equal treatment for each Claim or Interest of a
particular class.
F. The Debtor, as proponent of the Plan has complied with the
applicable provisions of the Bankruptcy Code.
G. The Plan has been proposed in good faith and not by any means
forbidden by law.
H. Any payments made or promised by the Debtor, or a person issuing
securities or acquiring property under the Plan, for services or for costs and
expenses in, or in connection with, the case, or in connection with the Plan and
incident to the case, have been approved by, or is subject to approval of the
Court as reasonable.
I. In the Disclosure Statement, the identity, qualifications, and
affiliation of the persons who are to serve as officers and directors of the
reorganized debtor after confirmation of the Plan was fully disclosed and the
appointment of such persons is consistent with the interests of the Debtor's
creditors and equity security holders and with public policy.
J. In the Disclosure Statement, the identity of any insider that will
be employed or retained by the Debtor and his compensation has been fully
disclosed.
K. The provisions of Section 1129(a)(6) of the Bankruptcy Code are
inapplicable to this case.
L. The procedures by which the ballots for acceptance or rejection of
the Plan were distributed and tabulated were fair, properly conducted, and
complied with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure
Approval Order.
M. As evidenced by the Disclosure Statement and at the Hearing, each
holder of a Claim or Interest in each impaired class has either accepted the
Plan or will receive or retain under the Plan property of a value, as of the
Effective Date of the Plan, that is not less than the amount that such holder
would receive or retain if the Debtor liquidated under Chapter 7 of the
Bankruptcy Code on such date.
N. With respect to each class of Claims or Interests, such class has
accepted the Plan or such class is not impaired under the Plan and is,
therefore, deemed to have accepted the Plan under Section 1126(f) of the
Bankruptcy Code, except for Class 8.
O. With respect to Class 8, the requirements of 11 U.S.C. Section
1129(b)(2)(c) have been satisfied.
P. At least one impaired class of claims has accepted the Plan,
determined without including any acceptances of the Plan by any insider.
Q. Except to the extent that the holder of a particular claim has
agreed to a different treatment of such Claim, the treatment of Claims under the
Plan of the type specified in Sections 507(a)(1) and 507(a)(3) - 507(a)(8) of
the Bankruptcy Code, if any, complies with the provisions of Section 1129(a)(9)
of the Bankruptcy Code.
R. No other chapter 11 plan has been moved for confirmation.
S. The primary purpose of the Plan is not the avoidance of taxes or
the requirements of Section 5 of the Securities Act of 1933.
T. Confirmation of the Plan is not likely to be followed by the need
for further financial reorganization of the Debtor.
U. All fees payable under section 1930 of title 28 of the United
States Code, have either been paid or will be paid under the Plan.
V. The Plan and the Infinity Settlement Agreement are hereby modified
as follows: (a) Infinity Securities Claims asserted in the Pisacreta/Tucci
Action shall (including, without limitation, the Claims of the named plaintiffs
therein, the members of the putative class sought to be certified therein
whether or not the class is certified, and any opt-outs from such class) shall
be excluded from the injunctive provisions of Section 16.13(c) of the Plan; (b)
any assets in the UPC Trust after the satisfaction of all Allowed Securities
Claims shall be distributed 100% to the Infinity Parties; and (c) the Infinity
Parties shall retain all of their Causes of Action for contribution and
indemnity against any Person with respect to the Infinity Securities Claims,
except the Debtor, its affiliates and their respective officers, directors and
employees.
W. The settlements and compromises incorporated into the Plan
(including, the settlement and compromise set forth in Section 14.1 of the Plan
and the Infinity Settlement Agreement, as modified pursuant to paragraph V,
above) meet the requirements for approval under section 1123(6)(3) of the Code
and Bankruptcy Rule 9019 because, among other things, the settlements:
i. reflect a reasonable balance of the risks and expenses of both
future litigation and the continuation of this Chapter 11 Case, on the one
hand, and early resolution of the disputes, on the other hand;
ii. fall within the range of reasonableness for the resolution of
complex litigation or litigable issues and claims;
iii. are fair and equitable and in the best interest of the Debtor,
the Debtor's estate and all holders of Claims and Equity Interests; and
iv. Are essential to the Debtor's reorganization and the confirmation
of the Plan.
X. The Proponent, Infinity and FSCI have consented to the approval of
the compromises and settlements described in Section 14.1 of the Plan, as
modified hereby, and the exclusion of Infinity Securities Claims asserted in the
Pisacreta/Tucci Action from the injunctive provisions set forth in Section
16.13(c) of the Plan.
Y. The Plan, as modified hereby, does not materially adversely affect
the treatment of any class of Claims or Equity Interests under the Plan.
Consequently, all votes accepting the Plan shall constitute votes accepting the
Plan, as modified hereby.
Z. By operation of section 1145 of the Bankruptcy Code, the
distribution of new UPC Common Stock to be issued under the Plan shall be exempt
from registration under section 5 of the Securities Act of 1933, as amended, and
any state or local law requiring registration for offer or sale of a security or
registration or licensing of an issuer of, or broker or dealer in, a security.
All such securities so issued shall be freely transferable by the initial
recipients thereof (i) except for any such securities received by an underwriter
within the meaning of section 1145(b) of the Bankruptcy Code and (ii) subject to
any restriction contained in the terms of such securities themselves, in the
Plan or any documents relating to the Plan.
NOW, it is hereby,
ORDERED, ADJUDGED, and DECREED, that:
1. All Objections, to the extent not settled or withdrawn, are hereby
expressly overruled.
2. The Plan, as modified hereby (the "Modified Plan") and as
supplemented by the Merger Agreement, is confirmed pursuant to section 1129 of
the Bankruptcy Code; provided, however, that if there is any conflict between
the terms of the Modified Plan and the terms of the Merger Agreement, the terms
of the Modified Plan shall control and if there is any conflict between the
terms of either the Modified Plan or Merger Agreement and the terms of this
Confirmation Order, this Confirmation Order shall control.
3. The Merger Agreement and Plan Documents substantially in the forms
previously filed with the Court, are approved and the Debtor is authorized and
directed to execute, enter into and deliver such documents and to execute,
implement and consummate the transactions contemplated thereby.
4. The Debtor is hereby authorized, empowered, and ordered to issue,
execute, deliver, file and record any documents or court papers or pleadings,
and to take any and all actions, that are necessary or desirable to implement,
effectuate, and consummate the transactions contemplated by the Plan, whether or
not specifically referred to therein and without further application or order of
this Court, in each case with like effect as if exercised and taken by unanimous
action of the directors and stockholders of the Debtor as may be necessary to
cause the same to become effective under the Delaware General Corporation Law.
5. The Debtor shall remain a Debtor-in-Possession under the Bankruptcy
Code until the Effective Date. The Debtor may consummate the transactions
contemplated by the Plan and make distributions to creditors after the Effective
Date in accordance with the Plan, and free of any restrictions imposed by the
Bankruptcy Code.
6. Any and all pre-petition unexpired leases and executory contracts
not previously rejected by the Debtor, unless specifically assumed pursuant to
the Bankruptcy Code prior to the date hereof or the subject of a motion to
assume or assume and assign pending on the date hereof, shall be deemed rejected
by the Debtor effective as of the Effective Date of the Plan.
7. All proofs of claim with respect to claims arising from the
rejection of executory contracts and unexpired leases shall, unless another
order of the Bankruptcy Court provides for an earlier date, be filed with the
Bankruptcy Court within thirty (30) days after the mailing of notice of the
entry of this order. Any proof of claim that is not timely filed shall be
released, discharged and forever barred from assertion against the Debtor, its
estate or property or the Post-Confirmation Debtor.
8. The exculpation and injunction provisions set forth in the Modified
Plan, including without limitation, those set forth in Sections 5.2, 8.14, 11.1,
16.12, 16.13, 16.14 and 16.15 of the Modified Plan, are approved; provided,
however, that the injunction provided by section 5.2 of the Plan shall not
result in the release by the United States Internal Revenue Service (the "IRS")
of any claim against any responsible officer or director of the Debtor that
otherwise would be liable to the IRS on any priority tax claim owed by the
Debtor to the IRS and further provided that notwithstanding section 16.13(iv) of
the Modified Plan, the IRS shall be permitted to offset against any claim of the
Debtor or Reorganized Debtor against the IRS any claim of the IRS against the
Debtor that was timely filed in the Debtor's Chapter 11 case, to the extent
ultimately allowed.
9. Subject to paragraph 8 herein, on the Effective Date, all Persons
who have been, are, or may be holders of Claims against or Equity Interests in
the Debtor shall be enjoined from taking any of the following actions against or
affecting the Debtor, its Estate, or its assets and property with respect to
such Claims or Equity Interests (other than actions brought to enforce any
rights or obligations under the Plan and appeals, if any, from this Confirmation
Order):
(i) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind against the
Debtor, its Estate, or its assets or property, or any direct or indirect
successor in interest to the Debtor, or any assets or property of such
transferee or successor (including, without limitation, all suits, actions,
and proceedings that are pending as of the Effective Date, which must be
withdrawn or dismissed with prejudice);
(ii) enforcing, levying, attaching, collecting or otherwise recovering
by any manner or means whether directly or indirectly any judgment, award,
decree or order against the Debtor, its Estate, or its assets or property,
or any direct or indirect successor in interest to the Debtor, or any
assets or property of such transferee or successor;
(iii) creating, perfecting or otherwise enforcing in any manner,
directly or indirectly, any Lien against the Debtor, its Estate, or its
respective assets or property, or any direct or indirect successor in
interest to any of the Debtor, or any assets or property of such transferee
or successor other than as contemplated by the Plan;
(iv) asserting any setoff, right of subrogation or recoupment of any
kind, directly or indirectly against any obligation due the Debtor, its
Estate, or its respective assets or property, or any direct or indirect
successor in interest to any of the Debtor, or any assets or property of
such transferee or successor; and
(v) proceeding in any manner in any place whatsoever that does not
conform to or comply with the provisions of the Plan or the settlement set
forth in Article XIV of the Plan to the extent such settlements have been
approved by the Bankruptcy Court in connection with confirmation of the
Plan.
10. From and after the Effective Date, except (a) for Infinity
Securities Claims asserted in the Pisacreta/Tucci Action, including, without
limitation, the Claims of the named plaintiffs therein, the members of the
putative class sought to be certified therein, whether or not such class is
certified, and any opt-outs from such putative class (which claims shall not be
affected or impaired in any way by this Order), and (b) as provided by paragraph
11 below, all Infinity Securities Claims shall channel and transfer to the UPC
Trust, and all Persons who have been, are, or may be holders of any such
Infinity Securities Claim shall be enjoined from taking any of the following
actions against or affecting the Infinity Parties or their assets and property
with respect to such Infinity Securities Claim (other than actions brought to
enforce any rights or obligations under the Plan, the UPC Trust Agreement and
the Infinity Settlement Agreement):
(vi) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind against any
Infinity Party or its assets or property, or its direct or indirect
successors in interest, or any assets or property of such transferee or
successor (including, without limitation, all suits, actions, and
proceedings that are pending as of the Effective Date, which must be
withdrawn or dismissed with prejudice);
(vii) enforcing, levying, attaching, collecting or otherwise
recovering by any manner or means whether directly or indirectly any
judgment, award, decree or order against any Infinity Party or its assets
or property, or its direct or indirect successors in interest, or any
assets or property of such transferee or successor;
(viii) creating, perfecting or otherwise enforcing in any manner,
directly or indirectly, any Lien against any Infinity Party or its assets
or property, or its direct or indirect successors in interest, or any
assets or property of such transferee or successor;
(ix) asserting any set-off, right of subrogation or recoupment of any
kind, directly or indirectly against any obligation due any Infinity Party,
or its assets or property, or its direct or indirect successors in
interest, or any assets or property of such transferee or successor; and
(x) proceeding in any manner in any place whatsoever that does not
conform to or comply with the provisions of the Plan, or the settlements
set forth in Article XIV of the Plan, the UPC Trust Agreement or the
Infinity Settlement Agreement.
11. The injunction provided by paragraph 10 of this Confirmation Order
shall terminate and be of no further force or effect if at any time or from time
to time the UPC Trustee files with the Bankruptcy Court and serves upon the
Infinity Parties a notice that the UPC Trust assets have been fully expended and
that additional Allowed Securities Claims exist or that all Securities Claims
have not yet been resolved and the Infinity Parties, within thirty (30) days
after the filing of such notice, fail to make an additional contribution to the
UPC Trust in an aggregate amount equivalent to (A) not less than $100,000
(provided that such amount must be at least enough to satisfy all outstanding
Allowed Securities Claims in full and provide at least $25,000 to fund the
expenses of the UPC Trust in liquidating any remaining Securities Claims) or (B)
such lesser amount as may be agreed to by the UPC Trustee.
12. Nothing contained herein or in the Modified Plan shall impair the
rights or claims asserted in the Pisacreta/Tucci Action by or on behalf of the
named plaintiffs therein, the members of the class sought to be certified
therein (whether or not such class is certified) or any opt-outs from such
class.
13. Unless required to be filed by an earlier date by another order of
this Court, all requests for payment of Administrative Claims, including all
applications for final allowance of compensation and reimbursement of expenses
of Professionals, must be filed and served on the Debtor, no later than
forty-five (45) days after the Effective Date. Any person that is required to
file and serve such a request for payment of an Administrative Claim and fails
to timely file and serve such request, shall be forever barred, estopped and
enjoined from asserting such Claim or participating in distributions under the
Plan on account thereof.
14. The Debtor shall file objections to Claims with this Court no
later than 60 days after the Effective Date, provided, however, that this
deadline may be extended by the Court upon motion of the Post-Confirmation
Debtor, without notice or a hearing. After the date hereof, no party, other than
the Debtor or Post-Confirmation Debtor, may file objections to the allowance of
claims.
15. This Order shall constitute all approvals and consents required,
if any, by the laws, rules or regulations of any State or any other governmental
authority with respect to the implementation or consummation of the Plan and any
other acts that may be necessary or appropriate for the implementation or
consummation of the Plan.
16. Pursuant to Section 1146(c) of the Bankruptcy Code, neither the
making nor delivery of an instrument of transfer, nor the revesting, transfer
and sale of any real property or personal property of the Debtor in accordance
with the Plan, shall subject the Debtor to any state or local law imposing a
stamp tax, transfer tax or similar tax or fee.
17. The provisions of the Plan and this Order shall be, and hereby are
now, and forever afterwards, binding on the Debtor, all holders of Claims and
Interests (whether or not impaired under the Plan and whether or not, if
impaired, they accepted the Plan), any other party in interest, any other party
making an appearance in this Chapter 11 Case, and any other person or entity
affected thereby, as well as their respective heirs, successors, assigns,
trustees, subsidiaries, affiliates, officers, directors, agents, employees,
representatives, attorneys, beneficiaries, guardians, and similar officers, or
any person claiming through or in the right of any such person or entity.
18. The Court hereby retains jurisdiction of this case (i) as provided
for in the Plan, (ii) as provided for in this Order, and (iii) for the purposes
set forth in Sections 1127 and 1142 of the Bankruptcy Code.
19. The compromises and settlements set forth in Section 14.1 of the
Plan and in the Infinity Settlement Agreement, in substantially the form
attached hereto as Exhibit A, are approved.
20. The UPC Trust Agreement and the ADR are hereby approved and the
Debtor and the UPC Trustee once appointed may take such actions as are necessary
to implement the terms thereof.
21. The failure to reference or discuss any particular provision of
the Plan in this Order shall have no effect on the validity, binding effect and
enforceability or such provision and such provision shall have the same
validity, binding effect and enforceability as every other provision of the
Plan.
22. Pursuant to Bankruptcy Rule 2002(f)(7) and 3020(c), the Debtor is
hereby directed to serve a notice of the entry of this Order on all holders of
record of Claims and Interests as of the date hereof, all parties who have
entered their appearance in this case and requested notice pursuant to
Bankruptcy Rule 2002 and the Office of the United States Trustee no later than
ten (10) days after the Effective Date of the Plan. Dated: Wilmington, Delaware
October 7, 1999
s/Peter J. Walsh
------------------------------------
Peter J. Walsh
Chief Judge, United States Bankruptcy Court
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT is made as of November 3, 1999, by and
among United Petroleum Corporation, a Delaware corporation (the "Corporation"),
Infinity Investors Limited, a Nevis, West Indies corporation, Fairway Capital
Limited, a Nevis, West Indies corporation, Seacrest Capital Limited, a Nevis,
West Indies corporation (collectively, the "Investor") and Joe Bared and Miriam
Bared (collectively, "Bared"). The Investor and Bared are sometimes collectively
referred to as the "Stockholders" and individually as a "Stockholder.")
Capitalized terms used herein are defined in Section 12 hereof.
The Corporation and the Stockholders desire to enter into this
Agreement for the purposes, among others, of (i) assuring continuity in the
management and ownership of the Corporation, (ii) limiting the manner and terms
by which the Stockholders' stock may be transferred, and (iii) providing the
Stockholders with certain registration rights.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Restrictions on Transfer of Shareholder Shares. No Stockholder shall
sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of
(collectively, a "Transfer") any interest in any Stockholder Shares for a period
of two (2) years from the date hereof (the "Termination Date").
2. Stockholder Preemptive Rights. Prior to the Termination Date, and
for so long as any Stockholder owns any Stockholder Shares, each time the
Corporation proposes to sell shares of its capital stock or options, warrants or
other rights to buy capital stock for cash (except any capital stock issued
pursuant to a stock option or warrant plan of the Corporation which does not
exceed ten percent (10%) of the issued and outstanding capital stock of the
Corporation at the time the warrant or option plan is adopted by the
Corporation), the Corporation shall also make an offering of such shares to the
Stockholders in accordance with the following provisions:
(a) The Corporation shall deliver a notice to each Stockholder
stating the number of shares to be offered and the price and the terms on which
it proposes to offer such shares. Such notice shall be sent to the addresses set
forth in the records of the Corporation.
(b) Within 15 days after delivery of the notice, each
Stockholder may elect to purchase, at the price and on the terms specified in
the notice, up to its Pro Rata Portion of such shares by delivering written
notice of such election to the Corporation within such 15 calendar days.
(c) Any shares referred to in the notice that are not elected
to be purchased as provided in subsection (b) above may, during the 180-day
period thereafter, be offered by the Corporation to any other person or persons
at a price not less than, and on terms no more favorable to the offeree than,
those specified in the notice.
3. Board of Directors.
(a) From and after the date hereof and until the Termination
Date, each Stockholder shall vote all of his Stockholder Shares and any other
voting securities of the Corporation over which such Stockholder has voting
control and shall take all other necessary or desirable actions within his
control (whether in his capacity as a stockholder, director, member of a Board
of Directors committee or officer of the Corporation or otherwise, and
including, without limitation, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Corporation shall take all necessary and desirable actions
within its control (including, without limitation, calling special board and
stockholder meetings), so that:
(i) the number of directors on the Board shall be five (5)
directors;
(ii) the following persons shall be elected to the Board:
(A) Two (2) representatives designated by the Investor
(the "Investor Directors");
(B) Two (2) representatives designated by Bared (the
"Bared Directors"); and
(C) L. Grant Peeples (the "Independent Director").
(iii) the removal from the Board (with or without cause) of
any representative designated hereunder by the Investor or Bared
shall be at only the Investor's, or Bared's written request,
respectively;
(iv) in the event that any representative designated
hereunder by the Investor or Bared for any reason ceases to serve
as a member of the Board during his term of office, the resulting
vacancy on the Board shall be filed by a representative
designated by the Investor or Bared, respectively, as provided
hereunder; provided that any representative removed for cause
shall not be designated again as a member of the Board; and
(v) Expansion of the Board and election of its additional
members will initially be subject to the mutual agreement of the
Investor Directors and Bared Directors and whenever they do not
agree on such a matter, may be submitted to the vote of all
stockholders of the Corporation at a duly called meeting.
(vi) Each member of the Board shall abstain acting in the
event of a direct or indirect financial interest (excluding
matters that relate to Farm Stores Grocery, Inc., so long as UPET
has a financial interest in it).
(b) The Board shall not appoint any committee with the
authority to act on behalf of the Board without the consent of the Investor
Directors and the Bared Investors.
(c) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this Section 3, the election of a person
to such directorship shall be accomplished in accordance with the Corporation's
bylaws and applicable law.
4. Piggyback Registrations.
(a) Right to Piggyback. Subject to Section 1 hereof, whenever
the Corporation proposes to register any of its Common Stock under the
Securities Act (other than the initial public offering, pursuant to a
transaction described under Rule 145 of the Securities Act, a transaction
registering securities convertible into Common Stock or pursuant to Form S-8 or
its successor forms) and the registration form to be used may be used for the
registration of the Stockholder Shares of the Stockholders (a "Piggyback
Registration"), the Corporation shall give prompt written notice to the
Stockholders of its intention to effect such a registration and will include in
such registration the Stockholder Shares of the Stockholders with respect to
which the Corporation has received written requests for inclusion therein within
15 days after the receipt of the Corporation's notice.
(b) Right to Shelf Registration. Subject to Section 11 hereof,
in addition to the Piggyback Registration provided pursuant to paragraph 4(a),
the Stockholders shall be entitled to request an unlimited number of Form S-3
resale registrations (a "Short Form Registration") in which the Corporation will
pay all Registration Expenses; provided that the Corporation and the securities
meet the eligibility requirements for such form and provided further that the
Short Form Registration shall only be effective for 180 days and shall be
subject to no sale periods upon notice to the Stockholders participating therein
if in the reasonable judgment of the Corporation such Short Form Registration
conflicts with the Corporation's business plans or another existing or proposed
registration statement. The Corporation shall use its best efforts to make
Short-Form Registrations available for the resale of Stockholder Shares.
(c) Expenses. The Registration Expenses of the Stockholders
shall be paid by the Corporation in all Piggyback Registrations and Short-Form
Registrations.
(d) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the
Corporation, and the managing underwriters advise the Corporation in writing
that in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Corporation shall
include in such registration (i) first, the securities the Corporation proposes
to sell, (ii) second, the Stockholder Shares of the Investor and Bared requested
to be included in such registration (on a pro rata basis), together with any
securities underlying any warrants issued to the lenders or underwriters of the
Corporation on a pro rata basis, (iii) third, other securities requested by
other persons to be included in such registration.
(e) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Corporation's securities, and the managing underwriters advise the
Corporation in writing that in their opinion the number of securities requested
to be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of the offering, the
Corporation shall include in such registration (i) first, the securities
requested to be included therein by the Investor and Bared on a pro rata basis,
together with any securities underlying any warrants issued to the lenders or
underwriters of the Corporation on a pro rata basis, (ii) second, other
securities requested by other persons to be included in such registration.
5. Registration Procedures. Whenever the Stockholders have requested
that any securities be registered pursuant to this Agreement, the Corporation
shall use its best efforts to effect the registration and the sale of such
securities in accordance with the intended method of disposition thereof, and
pursuant thereto the Corporation shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such securities and use its
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Corporation shall furnish to the counsel selected by
the Stockholders covered by such registration statement copies of all such
documents proposed to be filed, which documents will be subject to the review
and comment of such counsel);
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of securities such number of copies
of such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as such seller may reasonably request in
order to facilitate the disposition of the securities owned by such seller;
(d) use its best efforts to register or qualify such
securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller
(provided that the Corporation shall not be required to (i) qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction);
(e) notify each seller of Stockholder Shares, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Corporation shall prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Stockholder Shares, such prospectus will not contain an untrue statement
of a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(f) cause all such securities to be listed on each securities
exchange on which similar securities issued by the Corporation are then listed
and, if not so listed, to be listed on the NASD automated quotation system and,
if listed on the NASD automated quotation system, use its best efforts to secure
designation of all such securities covered by such registration statement as a
Nasdaq national market security within the meaning of Rule 11Aa2-1 of the
Securities and Exchange Commission or, failing that, to secure Nasdaq
authorization for such securities and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such securities with the NASD;
(g) provide a transfer agent and registrar for all such
securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Selling Stockholder or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such securities (including, without
limitation, effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of securities,
any underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Corporation, and cause the Corporation's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Corporation's first full calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(k) permit the Selling Stockholder which, in its sole and
exclusive judgment, might be deemed to be an underwriter or a controlling person
of the Corporation, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Corporation in writing, which in the reasonable judgment of the Selling
Stockholder and its counsel should be included;
(l) in the event of the issuance of any stop order suspending
the effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Corporation shall use its best efforts promptly to obtain the
withdrawal of such order; and
(m) in the event of an underwritten offering obtain a cold
comfort letter from the Corporation's independent public accountants and an
opinion from the Corporation's counsel in customary form and covering such
matters of the type customarily covered by cold comfort letters or opinions,
respectively as any underwriter may reasonably request.
6. Registration Expenses.
(a) All expenses incident to the Corporation's performance of
or compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Corporation and all independent certified
public accountants, underwriters (excluding discounts and commissions and
selling expenses (including brokers' fees and commissions)) and other persons
retained by the Corporation (all such expenses being herein called "Registration
Expenses"), shall be borne by the Corporation as provided in this Agreement,
except that the Corporation shall, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by the Corporation are then listed
or on the NASD automated quotation system.
(b) In connection with each Piggyback Registration or Short
Form Registration, the Corporation shall reimburse the Stockholders for the
reasonable fees and disbursements to the extent the Corporation's counsel has
not performed the work.
(c) To the extent Registration Expenses are not required to be
paid by the Corporation, each holder of securities included in any registration
hereunder shall pay those Registration Expenses allocable to the registration of
such holder's securities so included, and any Registration Expenses not so
allocable shall be borne by all sellers of securities included in such
registration in proportion to the aggregate selling price of the securities to
be so registered.
7. Indemnification.
(a) The Corporation agrees to indemnify, to the extent
permitted by law, the Selling Stockholder, its officers and directors and each
person who controls the Selling Stockholder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact contained in
any registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are caused by or contained in
any information furnished in writing to the Corporation by the Selling
Stockholder expressly for use therein or by the Selling Stockholder's failure to
deliver a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Corporation has furnished the Selling Stockholder
with a sufficient number of copies of the same. In connection with an
underwritten offering, the Corporation shall indemnify such underwriters, their
officers and directors and each person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the Selling Stockholder.
(b) In connection with any registration statement in which the
Selling Stockholder is participating, the Selling Stockholder shall furnish to
the Corporation in writing such powers of attorney, custody agreements and
letters of direction and other information and affidavits as the Corporation
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, shall only have to indemnify
the Corporation, its directors and officers and each person who controls the
Corporation (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by the Selling Stockholder to
the Corporation for specific use in such registration statement, prospectus or
amendment or supplement thereto and which remained in the final prospectus
delivered to the purchaser of such securities; provided that the obligation to
indemnify shall be limited to the net amount of proceeds received by the Selling
Stockholder from the sale of Stockholder Shares pursuant to such registration
statement.
(c) Any person entitled to indemnification hereunder shall (i)
give prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
person of such indemnified party and shall survive the transfer of securities.
The Corporation also agrees to make such provisions, as are reasonably requested
by any indemnified party, for contribution to such party in the event the
Corporation's indemnification is unavailable for any reason.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party, then each
indemnifying party, to the extent that it would have been or was obligated to
provide indemnification under this Section 7, shall contribute to the amount
paid or payable by such indemnified party as a result of the claims. losses,
changes or liabilities referred to in this Section 7 in such proportion as is
appropriate to reflect the relative benefits received by the Stockholders on the
one hand and the Corporation on the other. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Stockholders on the one
hand and the Corporation on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Stockholders on the one hand or the
Corporation on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
8. Participation in Underwritten Registrations. No person may
participate in any registration hereunder which is underwritten unless such
person (i) agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of securities included in any underwritten registration shall be required
to make any representations or warranties to the Corporation or the underwriters
other than representations and warranties regarding such holder and such
holder's intended method of distribution.
9. Legend. Each certificate evidencing Stockholder Shares and each
certificate issued in exchange for or upon the Transfer of any Stockholder
Shares shall be stamped or otherwise imprinted with legends in substantially the
following form (in addition to any other applicable legends).
"The shares of New UPC Common Stock represented by this
certificate are issued pursuant to the Plan of Reorganization for
United Petroleum Corporation, as confirmed by the United States
Bankruptcy Court for the District of Delaware. The Corporation's
Certificate of Incorporation contains restrictions prohibiting the
sale, transfer, disposition, purchase or acquisition of any shares of
Common Stock without the prior written authorization of the
Corporation's Board of Directors (or its designee) by or to any person
(a) who beneficially owns, directly or through attribution (as
determined under Section 382 of the Internal Revenue Code of 1986 as
amended from time to time (the "Code")), 5% or more of the total fair
market value of the then issued and outstanding shares of Common Stock
of the corporation, or (b) who, upon the sale, transfer, disposition,
purchase or acquisition of any shares of Common Stock of the
Corporation would beneficially own, directly or through attribution (as
determined under Section 382 of the Code), or would cause another
person beneficially to own, directly or through attribution (as
determined under Section 382 of the Code), 5% or more of the total fair
market value of the then issued and outstanding shares of common stock,
if that sale, transfer, disposition, purchase or acquisition would
jeopardize UPC's preservation of its federal income tax attributes
pursuant to Sections 382 or 383 of the Code; provided however, that for
so long as the percentage point changes in ownership of the common
stock (as described in Section 382(g)(1) of the Code) since the
Effective Date do not total more than thirty (30) percentage points,
the above restrictions shall be applied by substituting "10%" for "5%".
UPC will furnish a copy of its Certificate of Incorporation to the
holder of record of this certificate without charge upon written
request addressed to UPC at its principal place of business."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER, REPURCHASE OPTIONS AND CERTAIN
OTHER AGREEMENTS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED NOVEMBER
3, 1999. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF
AT THE CORPORATION'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE."
The Corporation shall imprint such legend on certificates evidencing
outstanding Stockholder Shares. The legend set forth above shall be removed from
the certificates evidencing any Stockholder Shares after the Termination Date.
10. Conflicting Agreements. Each Stockholder represents that it has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
holder of Stockholder Shares shall grant any proxy or become party to any voting
trust or other agreement which is inconsistent with or conflicts with the
provisions of this Agreement. No Stockholder shall act, for any reason, as a
member of a group or in concert or enter into any agreement or arrangement with
any other person in connection with the acquisition, disposition or voting of
Stockholder Shares in any manner which is inconsistent with the provisions of
this Agreement.
11. Actions Consistent with Agreement. The Corporation shall not
circumvent this Agreement by taking any action through a subsidiary or affiliate
that would be prohibited under this Agreement. The certificate of incorporation
and bylaws of the Corporation may be amended in any manner permitted thereunder,
except that neither the certificate nor the bylaws shall be amended in any
manner that would conflict with, or be inconsistent with, the provisions of this
Agreement.
12. Definitions.
"Bared Directors" shall have the meaning set forth in Section
3(a)(ii) hereof.
"Corporation" shall have the meaning set forth in the preamble
and shall include all of the Corporation's subsidiaries.
"Independent Director" shall have the meaning set forth in
Section 3(a)(ii) hereof.
"Investor Directors" shall have the meaning set forth in
Section 3(a)(ii) hereof.
"Piggyback Registration" shall have the meaning set forth in
Section 4(a) hereof.
"Registration Expenses" shall mean all expenses related to
registration pursuant to Sections 4(a) and 4(b) of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Stockholder" shall have the meaning as set forth in the
preamble and shall include their permitted successors and assigns.
"Stockholder Shares" means (i) any common stock of the
Corporation purchased or otherwise acquired by any Stockholder (ii) any equity
securities issued or issuable directly or indirectly with respect to the Common
Stock referred to in clause (i) above by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization, and (iii) any other shares of any class
or series of capital stock of the Corporation held by a Stockholder. As to any
particular shares constituting Stockholder Shares, such shares shall cease to be
Stockholder Shares when they have been sold to the public through a Public Sale
even if thereafter they are reacquired by a Stockholder.
"Transfer" shall have the meaning set forth in Section 1
hereof.
13. Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any Stockholder Shares in violation of any provision of this
Agreement shall be void, and the Corporation shall not record such Transfer on
its books or treat any purported transferee of such Stockholder Shares as the
owner of such shares for any purpose.
14. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Corporation, the Investor or Bared unless such
modification, amendment, termination or waiver is approved unanimously in
writing by the Corporation, the Investor and Bared. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
15. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
16. Entire Agreement. Except as set forth herein, this document
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
17. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Corporation and its successors and assigns and the Stockholders and any
permitted subsequent holders of Stockholder Shares and the respective successors
and permitted assigns of each of them, so long as they hold Stockholder Shares.
18. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
19. Remedies. The Corporation, the Investor and Bared shall be entitled
to enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that the Corporation, any Investor and Bared
may in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
20. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Corporation at the address set forth below and to any other
recipient at the address indicated on the schedules hereto and to any subsequent
holder of Stockholder Shares subject to this Agreement at such address as
indicated by the Corporation's records, or at such address or to the attention
of such other person as the recipient party has specified by prior written
notice to the sending party. Notices will be deemed to have been given hereunder
when delivered personally, three days after deposit in the U.S. mail and one day
after deposit with a reputable overnight courier service. The Corporation's
address is:
United Petroleum Corporation
2620 Mineral Springs Road, Suite A
Knoxville, Tennessee 37917
21. Governing Law. This Agreement will be construed and interpreted in
accordance with and governed by the laws of the State of Delaware.
22. Termination. This Agreement shall expire on the tenth anniversary
of the date of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
UNITED PETROLEUM CORPORATION
By:
Its:
INFINITY INVESTORS LIMITED
By:
Its:
FAIRWAY CAPITAL LIMITED
By:
Its:
SEACREST CAPITAL LIMITED
By:
Its:
Joe Bared
Miriam Bared
