SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 12, 1998
MEDNET, MPC CORPORATION
(Exact Name of Registrant as Specified in Charter)
Nevada 0-17120 88-0215949
(State Or Other (Commission (IRS Employer
Jurisdiction Of File Number) Identification No.)
Incorporation)
871-C Grier Drive, Las Vegas, Nevada 89119
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (702) 361-3119
<PAGE>
Item 3. Bankruptcy or Receivership.
(b)
(1) The United States Bankruptcy Court for the District of Nevada.
(2) August 12, 1998.
(3) On August 12, 1998, the Honorable Linda B. Riegle of the United
States Bankruptcy Court for the District of Nevada entered an Order Confirming
Debtor's First Modified Joint Plan of Reorganization under Chapter 11 of the
United States Bankruptcy Code, as amended (the "Bankruptcy Code"). The Order
confirmed the Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code, as amended, dated July 1, 1998 (the "Plan") of Mednet, MPC Corporation
("Mednet"), Medi-Mail, Inc., Medi-Claim, Inc. and Medi-Phar, Inc., debtors (the
"Debtors").
The following is a summary of the material features of the Plan. This
summary is modified in its entirety by reference to the more detailed
information set forth in the Plan.
The Plan provides for the division of holders of claims and interests
into eleven classes. Claims that are entitled to priority under Sections
507(a)(2) through (7) and (9) of the Bankruptcy Code are classified as Class 1
Claims. Secured claims of Foothill Capital Corp. ("Foothill") are classified as
Class 2 Claims. The claims of other secured creditors are classified as Class 3
Claims. The claims asserted by Bergen Brunswig Corporation ("Bergen") against
Mednet are classified as Class 4 Claims. The claims asserted by Bergen against
Medi-Mail, Inc. are classified as Class 5 Claims. Certain general unsecured
claims are classified as Class 6, Class 7, Class 8 and Class 9 Claims. Claims
asserted by the holders of Mednet's preferred stock are classified as Class 10
Claims. Claims asserted by the holders of MedNet's common stock issued and
outstanding prior to July 31, 1997 ("Old Common Stock") are classified as Class
11 Claims.
Holders of Class 1 Claims shall be paid the "Allowed amount" (as such
term is defined in the Plan) of such claim, including all applicable interest
and other charges to which the holder of such claim may be entitled under
applicable law or contract, to the extent permitted under the applicable
provision of Section 507(a) of the Bankruptcy Code, in cash in accordance with
the Plan.
Pursuant to an agreement between the Debtors and Foothill, Foothill
has agreed to accept a cash payment of $1,058,575 (of which $21,575 will be
remitted by Foothill to Bergen) in full satisfaction of the Class 2 Claims.
Holders of Class 3 Claims, at the option of the applicable Debtor,
shall either (i) be paid in full in cash the "Allowed amount" of such claim in
full satisfaction and discharge of such creditor's lien, (ii) receive deferred
cash payments totaling the "Allowed amount" of such claim of a value as of the
effective date of the Plan (the "Effective Date") at least equal to the value of
such creditor's interest in the Debtor's property securing such claim, and shall
retain the lien on its collateral securing such claim until paid as provided in
the Plan or (iii) will receive, pursuant to abandonment by the Debtor,
possession of and the right to foreclose its lien on the collateral securing
such claim. The Debtors have estimated that the members of this Class will
receive payment of 100% of the present value of their "Allowed Secured Claims"
as such term is defined in the Plan.
The pre-petition claims (Class 4 Claims) of Bergen against Mednet
shall be treated in accordance with the provisions of Article 4.04 of the Plan.
Mednet and Bergen shall enter into an acquisition agreement whereby Bergen shall
acquire all of the New Common Stock of Mednet as of the Effective Date. Fifty
percent of the total pre-petition claims of Bergen against all of the Debtors
shall be canceled in exchange for issuance of the New Common Stock in Mednet.
The remaining 50% of Bergen's pre-petition claims against Mednet shall be
discharged.
The Debtors shall make a non-interest bearing, non-recourse,
subordinated promissory note in the principal amount of $1.25 million (the
"Note") for the benefit of the Trustee of a trust (the "Liquidating Trust")
which will be created upon the Effective Date and out of which the distributions
to creditors will be paid. Holders of Class 6, Class 7, Class 8 and Class 9
Claims generally shall share pari passu and pro rata in the payments under the
Note and the Set Aside Amount (as defined in the Plan) in accordance with the
Plan.
All preferred stock of Mednet shall be canceled and be of no further
force and effect. Holders of Class 10 Claims shall receive no distribution under
the Plan unless Classes having priority over such interests have been paid in
full. Once prior Classes have been paid in full, members of Class 10 shall
receive all remaining property of the Debtor's estate until paid in full.
All of the equity securities of the Debtors issued and outstanding
prior to July 31, 1997 shall be canceled, extinguished and of no further force
and effect as of the Effective Date of the Plan. On the Effective Date of the
Plan, Bergen will loan Mednet an additional $250,000 which will be used by
Mednet as consideration by Mednet to purchase 100% of the common stock issued by
Medi-Claim, Inc., Medi-Phar, Inc. and Medi-Mail, Inc. pursuant to the Plan.
Except for certain claims identified in the Plan, all payments will be
made to creditors out of the Liquidating Trust. The Liquidating Trust shall take
title to all pre-petition causes of action of the Debtors and the Note. In
accordance with the Plan, the Liquidating Trust shall also take title to certain
pre-petition accounts receivable of the Debtors. The official committee of
general unsecured creditors of the Debtors, which committee was appointed
pursuant to Section 1102 of the Bankruptcy Code, will designate or act as the
trustee of the Liquidating Trust. $250,000 of the Note will be prepaid by the
Debtors under the Plan.
The Debtors' action against Bergen pending in the United States
District Court for the District of New Jersey, bearing docket no.
CV-S-96-00516-DWH (RJJ), will be dismissed with prejudice and without costs.
Bergen's actions against the Debtors and other defendants, except the action
pending in the United States District Court of Nevada bearing case no.
CV-S-96-00516DWH (RJJ) commenced by Bergen against M.B. Merryman for recovery of
damages, will be dismissed with prejudice and without costs.
(4) All of the Old Common Stock of Mednet shall be canceled,
extinguished and of no further force and effect as of the Effective Date of the
Plan. Mednet will issue 1,000 shares of common stock pursuant to the Plan ("New
Common Stock") to Bergen. No shares of New Common Stock will be reserved for
future issuance.
(5) Reference is made to the attached Plan concerning information as
to the assets and liabilities of Mednet.
Item 7. Financial Statement and Exhibits
(c) Exhibits:
99.1 Debtor's First Modified Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, As Amended, Dated July 1, 1998
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDNET, MPC CORPORATION
Date: August 27, 1998
By: /s/ Robert A. Bagdasarian
Name: Robert A. Bagdasarian
Title: President
<PAGE>
Exhibit Index
Exhibit Number Description
99.1 Debtor's First Modified Joint Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, As Amended, Dated July
1, 1998
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
In re:
CASE NO. BK-S-97-25800-LBR
MEDNET, MPC CORPORATION, CHAPTER 11
Debtor. JOINTLY ADMINISTERED
In re: CASE NO. BK-S-97-25801-LBR
CHAPTER 11
MEDI-MAIL, INC.,
Debtor.
In re: CASE NO. BK-S-97-25802-LBR
CHAPTER 11
MEDI-CLAIM, INC.,
Debtor.
In re: CASE NO. BK-S-98-22812-LBR
CHAPTER 11
MEDI-PHAR, INC.,
CONFIRMATION HEARING DATE:
Debtor. AUGUST 12, 1998
TIME: 9:00 a.m.
DEBTORS' FIRST MODIFIED JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE, AS AMENDED
July 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE 1
DEFINITIONS...............................................................4
ARTICLE 2
ADMINISTRATIVE AND PRIORITY TAX CLAIMS....................................4
2.01 Administrative Expense Claims.................................4
2.02 Bar Date for Administrative Claims............................4
2.03 Priority Tax Claims...........................................4
ARTICLE 3
CLASSIFICATION OF CLAIMS AND INTERESTS....................................4
3.01 Class 1 - Priority Claims.....................................4
3.02 Class 2 - Secured Claims of Foothill..........................4
3.03 Class 3 - Other Secured Claims................................4
3.04 Class 4 - Bergen Claims Against Mednet........................4
3.05 Class 5 - Bergen Claims Against Medi-Mail and Medi-Phar.......4
3.06 Class 6 - General Unsecured Claims Against Mednet.............4
3.07 Class 7 - General Unsecured Claims Against Medi-Mail..........4
3.08 Class 8 - General Unsecured Claims Against Medi-Claim.........4
3.09 Class 9 - General Unsecured Claims Against Medi-Phar..........4
3.10 Class 10 - Preferred Stock Interests and Claims
Relating Thereto..............................................4
3.11 Class 11 - Old Common Stock Interests and Claims
Relating Thereto..............................................4
3.12 Classification Rules..........................................5
3.13 Inter-Company Claims..........................................5
ARTICLE 4
TREATMENT OF CLASSES UNDER THE PLAN.......................................5
4.01 Class 1 - Priority Claims.....................................5
4.02 Class 2 - Secured Claims of Foothill..........................5
4.03 Class 3 - Other Secured Claims................................5
4.04 Class 4 - Bergen Claims Against Mednet........................5
4.05 Class 5 - Bergen Claims Against Medi-Mail and Medi-Phar.......5
4.06 Class 6 - General Unsecured Claims Against Mednet.............5
4.07 Class 7 - General Unsecured Claims Against Medi-Mail..........5
4.08 Class 8 - General Unsecured Claims Against Medi-Claim.........5
4.09 Class 9 - General Unsecured Claims Against Medi-Phar..........5
4.10 Class 10 - Preferred Interests and Claims Relating Thereto....6
4.11 Class 11 - Old Common Stock...................................6
4.12 Controversy Concerning Impairment.............................6
ARTICLE 5
ACCEPTANCE OR REJECTION OF THE PLAN.......................................6
5.01 Impaired Classes Entitled To Vote.............................6
5.02 Acceptance by an Impaired Class of Claims.....................6
5.03 Presumed Acceptance of Plan by Unimpaired Classes.............6
5.04 Presumed Rejection............................................6
ARTICLE 6
MEANS FOR IMPLEMENTATION OF THE PLAN......................................6
ARTICLE 7
CONDITIONS PRECEDENT......................................................7
7.01 Conditions Precedent to Confirmation Date.....................7
7.02 Conditions to Effective Date..................................7
7.03 Waiver of Conditions..........................................7
7.04 Failure of Conditions.........................................7
ARTICLE 8
DISTRIBUTIONS UNDER THE PLAN..............................................7
8.01 Distributions.................................................7
8.02 Method of Payment.............................................7
8.03 Timing of Payment.............................................7
8.04 Setoff........................................................7
8.05 De Minimis Distributions......................................7
8.06 Unclaimed Distributions to Creditors..........................7
8.07 Treatment of Disputed Claims..................................7
8.08 Estimation of Claims..........................................7
ARTICLE 9
EXECUTORY CONTRACTS.......................................................8
9.01 Assumption or Rejection of Executory
Contracts and Unexpired Leases................................8
ARTICLE 10
EFFECTS OF PLAN UPON CONFIRMATION.........................................8
10.01 Revesting of Assets..........................................8
10.02 Section 1141 Discharge.......................................8
10.03 Retention of Jurisdiction....................................9
10.04 Preservation of Subordination Rights.........................9
10.05 Indemnification of Officers and Directors....................9
10.06 Effectuating Documents; Further Transactions; Timing.........9
10.07 Dismissal with Prejudice of Action Against Bergen............9
10.08 Ratification of Actions Taken................................9
10.09 Modification of the Plan.....................................9
10.10 Representative of Estates...................................10
ARTICLE 11
MANAGEMENT AFTER CONFIRMATION............................................10
11.01 General.....................................................10
11.02 Board of Directors..........................................10
11.03 Officers....................................................10
11.04 No Corporate Action Required................................10
11.05 Powers and Duties of the Liquidating Trustee................10
ARTICLE 12
MISCELLANEOUS PROVISIONS.................................................10
12.01 Exemption from Transfer Taxes...............................10
12.02 Exculpation.................................................10
12.03 Modifications...............................................10
12.04 Revocation or Withdrawal of the Plan........................10
12.05 Severability................................................10
12.06 Binding Effect..............................................10
12.07 Construction................................................10
12.08 Time........................................................10
12.09 Headings....................................................10
12.10 Governing Law...............................................10
12.11 Existence of Committee......................................11
12.12 Benefit Programs............................................11
12.13 Retiree Benefits............................................11
12.14 Payment of Statutory Fees...................................11
12.15 Cramdown....................................................11
12.16 Execution of Plan Documents.................................11
12.17 Post Confirmation Fees and Expenses.........................11
12.18 Closing of Cases............................................11
<PAGE>
Mednet, MPC Corporation ("Mednet"), Medi-Mail, Inc. ("Medi-Mail"), Medi-Claim,
Inc. ("Medi-Claim") and Medi-Phar, Inc. ("Medi-Phar") (sometimes collectively
"Debtors" or "Proponents" and individually each a "Debtor" or a "Proponent")
hereby propose the following First Amended Joint Plan of Reorganization, as
Amended, pursuant to section 1121(a) of the Bankruptcy Code (the "Plan").
ARTICLE 1
DEFINITIONS
As used in the Plan, the following terms shall have the respective
meanings specified below (such meanings to be equally applicable to the singular
and plural, and the masculine, feminine and neuter forms of the terms defined).
Acquisition Agreement means the agreement between Bergen and Mednet
pursuant to which Bergen shall acquire 1000 shares, representing one hundred
percent (100%) of the New Common Stock of Mednet, which shall occur only after
Mednet has acquired the New Common Stock of Medi-Mail, Medi-Claim and Medi-Phar.
The Acquisition Agreement shall be entered into as of the Effective Date. A copy
of the proposed Acquisition Agreement, without Exhibits, is annexed hereto as
Exhibit A.
Acquisition Price means the amounts Bergen has agreed to exchange or
contribute for the all of the New Common Stock of Mednet pursuant to the
Acquisition Agreement.
Administrative Expense Claim means a Claim for payment of any costs or
expenses of administration of the Case incurred after the commencement of the
Case allowable under section 503(b) or 507(a)(1) of the Bankruptcy Code,
including, without limitation: (a) the actual and necessary expenses of
preserving the estates of the Debtors; (b) the actual and necessary expenses of
operating the business of the Debtor (such as wages, salaries or commissions for
services rendered); (c) indebtedness or obligations incurred or assumed by the
Debtors in connection with the conduct of its business, the acquisition or lease
of property, or the rendition of services to the Debtors; (d) allowances of
compensation for legal and other services and reimbursement of expenses awarded
pursuant to sections 330(a), 331 and 503(b) of the Bankruptcy Code, and (e) all
fees or charges assessed against the estates of the Debtors under section 1930,
title 28, United States Code; provided, however, that an Exempt Tax shall not be
an Administrative Claim. Costs and expenses incurred by the Debtors after the
Effective Date shall be paid in the ordinary course.
Allowed, when used as an adjective preceding the words "Claim" or
"Interest," means any Claim against or Interest in the Debtors: (a) proof or
application for allowance of which was (i) Filed on or before the date
designated by the Bankruptcy Court as the last date for Filing a Proof of Claim
against or Proof of Interest in the Debtors, (ii) later Filed with Bankruptcy
Court leave after notice and a hearing, or (iii) if no Proof of Claim or Proof
of Interest or application for allowance was Filed, which Claim or Interest has
been or hereafter is listed by the Debtors in the Schedules as liquidated in
amount and not disputed or contingent; and (b) which (i) is due and payable and
as to which no objection to the allowance thereof has been interposed within the
applicable period of limitation fixed by the Plan, the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules or the Bankruptcy Court or (ii) as to which
any objection has been determined by Final Order of the Bankruptcy Court to the
extent such objection has been resolved in favor of the Holder of such Claim or
Interest.
Assets means all property of the Estate of the Debtors.
Avoiding Power Causes of Action means rights and remedies accruing to
the Debtors pursuant to Chapter 5 of the Bankruptcy Code.
Ballots means the ballots accompanying the Disclosure Statement and
the Plan upon which impaired Creditors shall have indicated their acceptance or
rejection of the Plan.
Bankruptcy Code means the Bankruptcy Reform Act of 1978, as amended,
and as codified in title 11 of the United States Code.
Bankruptcy Court means the United States Bankruptcy Court for the
District of Nevada or any court having competent jurisdiction to hear appeals or
certiorari proceedings therefrom, or any successor thereto that may be
established by act of Congress or otherwise, and that has competent jurisdiction
over the Case.
Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure, as
amended from time to time, as applicable to the Case.
Bar Date is the last date for filing Claims as fixed by the Court.
Bergen means Bergen Brunswig Drug Company, a California corporation,
or its affiliates.
Business Day means any day except Saturday, Sunday or a "legal
holiday," as such term is defined in Bankruptcy Rule 9006(a).
Case means the above-captioned cases under Chapter 11 of the
Bankruptcy Code in which Mednet, Medi-Mail, Medi-Claim and Medi-Phar are the
Debtors.
Causes of Action means all legal and equitable claims, demands, or
causes of action held by the Debtors against any entity, other than Causes of
Action specifically to be released under the Plan.
Cash means cash and cash equivalents held by the Debtors.
Claim shall mean a "claim" against the Debtors within the meaning of
section 101(5) of the Bankruptcy Code.
Class means a class of Claims or Interests as classified in the Plan.
Closing means the meeting of the parties at which the papers,
instruments and documents required to be executed and delivered pursuant to the
Acquisition Agreement shall be exchanged.
Collateral means any property of the Estate that secures an Allowed
Secured Claim.
<PAGE>
Committee means the official committee of general unsecured Creditors
which was appointed in the Case pursuant to section 1102 of the Bankruptcy Code.
Confirmation Date means the date the Clerk of the Bankruptcy Court
enters the Confirmation Order on the docket of the Bankruptcy Court.
Confirmation Hearing means the hearing before the Bankruptcy Court to
consider confirmation of the Plan.
Confirmation Order means an order of the Bankruptcy Court confirming
the Plan in accordance with the provisions of Chapter 11 of the Bankruptcy Code.
Creditor means any Entity that has a Claim against the Debtor that
arose on or before the Petition Date or a Claim against the Estate of any kind
specified in section 502(g), 502(h) or 502(i) of the Bankruptcy Code.
Debtors means Mednet in Case No. BK-S-97-25800-LBR, Medi-Mail in Case
No. BK-S-97-25801-LBR, Medi-Claim in Case No. BK-S-97-25802-LBR, and Medi-Phar
in Case No. BK-98-22812-LBR.
DIP Facility means the arrangement approved by the Bankruptcy Court
pursuant to which Bergen has been financing the Debtors' post-petition
operations.
Disbursing Agent means the Debtor, solely for purposes of paying
Allowed Administrative Expenses and Priority Claims.
Disclosure Statement means the written first modified disclosure
statement and its appendices, as they may be amended, supplemented or further
modified from time to time, filed by Proponents, with respect to the Plan.
Disputed Claim means a Claim which is not an Allowed Claim.
Effective Date means the first Business Day determined by the Debtor
that is at least eleven (11) days after the Confirmation Date, and upon which
(a) no stay of the Confirmation Order is in effect and (b) the conditions to the
Effective Date set forth in section 7.02 of the Plan have been satisfied or
waived pursuant to section 7.03 of the Plan.
Entity means an "entity" within the meaning of section 101(15) of the
Bankruptcy Code.
Estate means the estate created upon the commencement of each Case as
to each Debtor by section 541 of the Bankruptcy Code.
Estate Action Recoveries means the net proceeds recovered as the
result of prosecution or settlement of any Estate cause of action.
Exempt Tax means any stamp, recording or similar tax or charge
(including any penalties, interest or additions thereto) within the meaning of
section 1146(c) of the Bankruptcy Code which may be imposed by the laws of any
state upon the transactions contemplated under, or necessary for the success of,
the Plan, including without limitation, any mortgage recording, securities
transfer, deed transfer, documentary transfer or gains taxes.
File, Filed, Filing or Files shall mean file, filed, filing or files,
respectively, with the Bankruptcy Court in the Case.
Final Order means an order or judgment of the Bankruptcy Court or
other court of competent jurisdiction, as entered on the docket of such court,
that has not been reversed or stayed, and as to which: (a) the time to appeal or
petition for certiorari has expired and no timely-filed appeal or petition for
certiorari is pending, or (b) any appeal taken or petition for certiorari filed
has been resolved by the highest court to which the order or judgment was
appealed or from which certiorari was sought.
Foothill means Foothill Capital Corp.
General Unsecured Claim means any Claim against the Debtors which
arose or which is deemed by the Bankruptcy Code to have arisen prior to the
Petition Date, and which is not a Claim in any other Class.
Holder means any entity holding a Claim or Interest, and includes the
beneficial Holder of such Claim or Interest.
Indemnity means the prepetition indemnification obligation to officers
of Mednet arising out of employee litigation commenced against certain officers
and directors of the Debtors by Value Rx entitled ValueRx Pharmacy Program,
Inc., and ValueRx, Inc. v. Robert Bagdasarian and Glenn Merritts, Civ. File No.
97-318, which Indemnity shall be assumed by the Debtors, but only to the extent
covered by available insurance and above any applicable deductible. The
Indemnity shall not become part of the Liquidating Trust.
Interest means any and all rights arising out of the ownership of Old
Common Stock or Preferred Stock, including all Claims against the Debtor
resulting from the rescission of a purchase or sale of Old Common Stock or
Preferred Stock, for damages arising from the purchase or sale of Common Stock
or Preferred Stock or for reimbursement or contribution allowed under section
502 on account of such a claim.
Liquidating Trust means the trust which will be created upon the
Effective Date of the Plan and out of which the distributions to Creditors will
be paid.
Local Rules means the Local Bankruptcy Rules of the District of
Nevada, as applicable to the Case.
Medi-Claim means Medi-Claim, Inc., one of the Debtors herein.
Medi-Mail means Medi-Mail, Inc., one of the Debtors herein.
Medi-Phar means Medi-Phar, Inc., one of the Debtors herein.
Mednet means Mednet, MPC Corporation, one of the Debtors herein.
<PAGE>
Merryman District Court Action means the action pending in the United
States District Court of Nevada bearing case no. CV-S-96-00516DWH (RJJ)
commenced by Bergen against M.B. Merryman for recovery of damages.
New Common Stock shall mean the new common stock of the Debtors issued
pursuant to the Plan.
Note means the non-interest bearing, non-recourse, subordinated
promissory note in the principal amount of $1.25 million to be paid by the
reorganized Debtor to the Trustee. A copy of the proposed Note is attached as
Appendix C to Exhibit A annexed hereto.
Old Common Stock shall mean the common stock of Mednet, Medi-Mail,
Medi-Claim and Medi-Phar issued and outstanding prior to the Petition Date, and
includes any options or warrants with the right to acquire Old Common Stock.
Petition Date means July 31, 1997, the date of Filing of the voluntary
petitions for relief commencing the Mednet, Medi-Mail and Medi-Claim Cases and
April 8, 1998, the date of filing of the voluntary petition for relief
commencing the Medi-Phar Case.
Plan means this Plan of Reorganization proposed by the Debtors. Any
appendices to the Plan are incorporated into and made a part hereof as if fully
set forth herein.
Preferred Stock means Preferred Stock issued by Mednet at any time
prior to the Petition Date, including convertible preferred stock.
Priority Claim means any Claim to the extent entitled to priority in
payment under sections 507(a)(2)-(7) or (9) of the Bankruptcy Code.
Priority Tax Claim means any Claim to the extent entitled to priority
in payment under section 507(a)(8) of the Bankruptcy Code.
Professionals means Entities whose Administrative Claims must be
Allowed by Final Order of the Bankruptcy Court under section 330 of the
Bankruptcy Code prior to payment.
Proof of Claim or Proof of Interest means a Filed Proof of Claim or
Proof of Interest.
Record Date means the date on which Creditors entitled to vote on the
Plan are determined by their record ownership of Claims, which date shall be the
date of Filing of the Plan.
Schedules means the Schedules of Assets and Liabilities and Statements
of Executory Contracts and Financial Affairs, Filed by the Debtors in accordance
with the Bankruptcy Rules, which have been amended and may be further amended.
Secured Claim means a Claim against the Debtors which is deemed by the
Bankruptcy Code to have arisen prior to the Petition Date and which is (i)
secured by a valid lien, security interest, or other encumbrance on Collateral,
or (ii) subject to setoff under section 553 of the Bankruptcy Code, but only to
the extent of the value of the Collateral, or to the extent of the amount
subject to setoff, determined in accordance with section 506(a) of the
Bankruptcy Code, as modified by section 1111(b) of the Bankruptcy Code.
Set Aside Amount means the initial $250,000 recovered from the
collection of prepetition accounts receivable, after payment of Administrative
Expense Claims, but before payment of Bergen's post-petition deficiency claim.
If $250,000 is not collected by the Effective Date, Bergen shall loan the
Reorganized Debtor the amount needed to fully fund the Set Aside Amount, which
loan shall be in the form of a promissory note bearing interest at the prime
rate plus two percent (2%) and shall be repaid to Bergen from the Liquidating
Trust before creditors' share in the distributions therefrom.
Trustee means the Trustee of the Liquidating Trust, which will be the
Committee or its designee.
Unclaimed Distribution means, in respect of any Class of Claims, all
Cash or other property deemed to be "Unclaimed Distributions" pursuant to the
Plan.
Unliquidated, Disputed or Contingent Claim means any Claim, the amount
of which is undetermined or the liability for which is not proven or is
contingent, or disputed, as reflected in either the Schedules or the Proof of
Claim Filed by any Creditor.
Document References. All references to documents shall include all
addenda, exhibits and schedules attached thereto or referred to therein.
Other Definitions. A term used and not defined herein, but that is
defined in the Bankruptcy Code, shall have the meaning set forth therein. 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. The word "including" shall mean "including,
without limitation." The singular shall include the plural and vice versa unless
the context otherwise requires.
<PAGE>
ARTICLE 2
ADMINISTRATIVE AND PRIORITY TAX CLAIMS
2.01 Administrative Expense Claims Administrative Expense Claims
(other than Claims for compensation and reimbursement of expenses of
Professionals) will be paid in full, in Cash, on the Effective Date, or, if such
Claim becomes Allowed after the Effective Date, within five (5) days after such
Claim becomes Allowed. Any fees due and owing to the United States Trustee shall
be paid in full on the Effective Date, or as soon thereafter as practicable. All
requests by Professionals for final allowance of compensation and reimbursement
of expenses accrued as of the Confirmation Date must be Filed with the Court
within sixty (60) days of the Confirmation Date and will be paid within five (5)
days after such Claims become Allowed. All other requests for payment of an
Administrative Expense Claim must be Filed on or before the date of the
Confirmation Hearing or will be forever barred. The estimated amount of unpaid
fees and expenses of Professionals as of the Confirmation Hearing will be
deposited in a segregated account upon Confirmation of the Plan, and will be
used to pay Allowed Claims of Professionals. To the extent that the Debtors have
insufficient funds to satisfy the Allowed Administrative Expense Claims of
Professionals, Bergen shall loan to the Reorganized Debtors the amount necessary
to pay said Allowed Administrative Expense Claims of Professionals in full,
which amount loaned shall be repaid first, with interest at the prime rate plus
2%, out of the Liquidating Trust. Such escrowed funds shall be used solely to
pay Allowed Administrative Claims of Professionals and any excess after making
all such payments shall be applied to the above loan.
2.02 Bar Date for Administrative Claims
(a) In General. Unless otherwise ordered by the Bankruptcy Court,
requests for payment of Administrative Claims must be Filed and served on the
Debtors no later than thirty (30) days after the Effective Date. Any Entity that
is required to File and serve a request for payment of an Administrative Claim
and that fails to timely File and serve such request, shall be forever barred,
estopped and enjoined from asserting such Claim against the Debtors, the Estate
of the Debtors or their respective property.
(b) Professionals. Professionals or other Entities requesting
compensation or reimbursement of expenses pursuant to sections 327, 328, 330,
331, 503(b) and 1103 of the Bankruptcy Code for services rendered before the
Effective Date shall File an application for final allowance of compensation and
reimbursement of expenses no later than sixty (60) days after the Effective
Date. Objections to applications of professionals or other Entities for
compensation or reimbursement of expenses must be Filed no later than ninety
(90) days after the Effective Date.
(c) Ordinary Course Liabilities. Holders of Administrative Claims
based upon liabilities incurred by the Debtor in the ordinary course of business
(including Administrative Claims of governmental units for taxes) shall not be
required to File any request for payment of such Claims.
2.03 Priority Tax Claims Each holder of an Allowed Priority Tax Claim
shall be paid the full amount of such Allowed Priority Tax Claim, in Cash, on
the later of (a) the Effective Date (or as soon thereafter as is practicable),
or (b) the first Business Day after such Claim becomes an Allowed Claim (or as
soon thereafter as is practicable).
ARTICLE 3
CLASSIFICATION OF CLAIMS AND INTERESTS
3.01 Class 1 - Priority Claims Class 1 consists of all Allowed
Priority Claims against any Debtor. Class 1 is not impaired.
3.02 Class 2 - Secured Claims of Foothill Class 2 consists of all
Allowed Secured Claims of Foothill. Class 2 is impaired.
3.03 Class 3 - Other Secured Claims Class 3 consists of all Allowed
Secured Claims other than Foothill. Class 3 is impaired.
3.04 Class 4 - Bergen Claims Against Mednet. Class 4 consists of
Bergen's total pre-petition Claims against Mednet. Class 4 is impaired.
3.05 Class 5 - Bergen Claims Against Medi-Mail and Medi-Phar. Class 5
consists of Bergen's total pre-petition Claims against Medi-Mail and Medi-Phar.
Class 5 is impaired.
3.06 Class 6 - General Unsecured Claims Against Mednet Class 6, which
is impaired, consists of all Allowed General Unsecured Claims against Mednet,
except Bergen's Claims against Mednet.
3.07 Class 7 - General Unsecured Claims Against Medi-Mail Class 7
consists of all Allowed General Unsecured Claims against Medi-Mail, except
Bergen's Claims against Medi-Mail. Class 7 is impaired.
3.08 Class 8 - General Unsecured Claims Against Medi-Claim Class 8
consists of all Allowed General Unsecured Claims against Medi-Claim. Class 8 is
impaired.
3.09 Class 9 - General Unsecured Claims Against Medi-Phar Class 9
consists of all Allowed General Unsecured Claims Against Medi-Phar. Class 9 is
impaired.
3.10 Class 10 - Preferred Stock Interests and Claims Relating Thereto.
Class 10 consists of all Preferred Stock Interests, as well as any Claims
arising by virtue of the purchase or sale of Preferred Stock. Class 10 is
impaired.
3.11 Class 11 - Old Common Stock Interests and Claims Relating Thereto
Class 11 consists of all Old Common Stock Interests in the Debtors, as well as
any Claims arising by virtue of the purchase or sale of Old Common Stock of the
Debtors, including stock options and warrants. Class 11 is impaired.
3.12 Classification Rules A Claim is in a particular Class only to the
extent that the Claim qualifies within the description of Claims of that Class,
and such Claim is in a different Class to the extent that the remainder of the
Claim qualifies within the description of the different Class. Pursuant to
section 1123(a)(4) of the Bankruptcy Code, all Allowed Claims of a particular
Class shall receive the same treatment unless the Holder of a particular Allowed
Claim agrees to a less favorable treatment for such Allowed Claim. For purposes
of the Plan, and pursuant to section 510(a) of the Bankruptcy Code, the Plan
shall give effect to subordination agreements which are enforceable under
applicable nonbankruptcy law, except to the extent the beneficiary or
beneficiaries thereof agree to less
<PAGE>
favorable treatment. The Plan shall also give effect to the subordination rules
of sections 510(b) and (c) of the Bankruptcy Code. The inclusion of a Creditor
by name in any Class is for purposes of general description only, and includes
all Entities claiming as beneficial interest holders, assignees, heirs,
devisees, transferees or successors in interest of any kind of the Creditor
named.
3.13 Inter-Company Claims. Allowed Claims by any Debtor against any
other Debtor shall be treated in accordance with the treatment afforded other
members of the Class of which such Claims are a member.
ARTICLE 4
TREATMENT OF CLASSES UNDER THE PLAN
4.01 Class 1 - Priority Claims Each holder of an Allowed Priority
Claim shall be paid the Allowed amount of such Claim, including all applicable
interest and other charges to which the Holder of such Allowed Priority Claim
may be entitled under applicable law or contract, to the extent permitted under
the applicable provision of section 507(a), in Cash, on the later of: (a) the
Effective Date (or as soon thereafter as is practicable) and (b) the first
Business Day after such Claim becomes an Allowed Claim (or as soon thereafter as
is practicable).
4.02 Class 2 - Secured Claims of Foothill The Allowed Secured Claims
of Foothill shall be paid in full, in Cash, on or before the Effective Date, in
accordance with an agreement between Foothill and the Debtors.
4.03 Class 3 - Other Secured Claims Holders of Allowed Secured Claims,
other than Foothill, at the option of the Debtor which is the obligor of such
creditor, shall either (i) be paid in full in Cash the Allowed Amount of such
Secured Claim in full satisfaction and discharge of such Creditor's lien, (ii)
receive deferred Cash payments totalling the Allowed amount of such Claim of a
value as of the Effective Date at least equal to the value of such Creditor's
interest in the Debtor's property securing such Claim, and shall retain the lien
securing such Claim until paid as provided herein, or (iii) will receive,
pursuant to abandonment by the Debtor, possession of and the right to foreclose
its lien on the collateral securing such Claim. In the event the treatment
provided in subparagraphs (ii) or (iii) above results in payment to such
Creditor of less than the Allowed amount of its Claim, it shall be entitled to
assert a General Unsecured Claim against its obligor for any deficiency.
4.04 Class 4 - Bergen Claims Against Mednet. The pre-petition Claims
of Bergen against Mednet shall be treated in accordance with the provisions of
the Acquisition Agreement and this section of the Plan, which treatment shall be
deemed in full satisfaction of the Claims of Bergen (except as set forth below)
against Mednet. Mednet and Bergen will enter into the Acquisition Agreement on
the Effective Date. If the terms of the Acquisition Agreement in any way
conflict with the terms of the Plan, then for purposes of this Plan, the terms
of the Plan shall govern.
The Acquisition Agreement shall provide that 50% of the total
pre-petition Claims of Bergen against all of the Debtors, including Mednet,
shall be cancelled in exchange for issuance of the New Common Stock in Mednet.
The remaining 50% of Bergen's pre-petition Claims against Mednet shall be
discharged under the Plan.
4.05 Class 5 - Bergen Claims Against Medi-Mail and Medi-Phar. The
pre-petition Claims of Bergen against Medi-Mail and Medi-Phar shall be treated
in accordance with the provisions section 4.04 of this Plan, which treatment
shall be in full satisfaction of the Claims of Bergen against Medi-Mail and
Medi-Phar.
The Acquisition Agreement shall provide that 50% of the total
pre-petition Claims of Bergen against all of the Debtors, including Medi-Mail
and Medi-Phar, shall be exchanged for 100% of the New Common Stock in Mednet to
Bergen. The remaining 50% of Bergen's pre-petition Claims shall be discharged.
4.06 Class 6 - General Unsecured Claims Against Mednet Holders of
Allowed General Unsecured Claims against Mednet shall share (i) pari passu and
pro rata in the payments under the Note and the Set Aside Amount, and (ii) the
net recoveries from prepetition accounts receivable and all other Liquidating
Trust assets, excluding the Note and Set Aside Amount (after payment of
Administrative Expense Claims and the amounts necessary to cure Bergen's
postpetition deficiency on its Court-approved post-petition secured claim) and
prosecution of Causes of Action owned by the Mednet Estate from the Liquidating
Trust. Distributions will be made from the Liquidating Trust.
4.07 Class 7 - General Unsecured Claims Against Medi-Mail Holders of
Allowed General Unsecured Claims against Medi-Mail shall share (i) pari passu
and pro rata in the payments under the Note and the Set Aside, and (ii) the net
recoveries from prepetition accounts receivable and all other Liquidating Trust
assets, excluding the Note and Set Aside Amount (after payment of Administrative
Expense Claims and the amounts necessary to cure Bergen's postpetition
deficiency on its Court-approved post-petition secured claim) and prosecution of
Causes of Action owned by the Medi-Claim Estate. Distributions will be made from
the Liquidating Trust.
4.08 Class 8 - General Unsecured Claims Against Medi-Claim Holders of
Allowed General Unsecured Claims against Medi-Claim shall share (i) pari passu
and pro rata in the payments under the Note and the Set Aside, and (ii) the net
recoveries from prepetition accounts receivable and all other Liquidating Trust
assets, excluding the Note and Set Aside Amount (after payment of Administrative
Expense Claims and the amounts necessary to cure Bergen's postpetition
deficiency on its Court-approved post-petition secured claim) and prosecution of
Causes of Action owned by the Medi-Claim Estate. Distributions will be made from
the Liquidating Trust.
4.09 Class 9 - General Unsecured Claims Against Medi-Phar Holders of
Allowed General Unsecured Claims against Medi-Phar shall share (i) pari-passu
and pro rata in the payments under the Note and the Set Aside, and (ii) the net
recoveries from prepetition accounts receivable and all other Liquidating Trust
assets, excluding the Note and Set Aside Amount (after payment of Administrative
Expense Claims and the amounts necessary to cure Bergen's postpetition
deficiency on its Court-approved post-petition secured claim) and prosecution of
Causes of Action owned by the Medi-Phar Estate. Distributions will be made from
the Liquidating Trust.
4.10 Class 10 - Preferred Interests and Claims Relating Thereto All
Preferred Stock shall be cancelled and be of no further force and effect.
Holders of Allowed Class 10 Interests, including any Claims arising by virtue of
the purchase or sale of Preferred Stock shall receive no distribution under the
Plan, unless Classes having priority over such Preferred Interests have been
paid in full. Once prior Classes have been paid in full, members of this Class
shall receive all remaining property of the Debtor's Estate until their Claims
have been paid in full.
4.11 Class 11 - Old Common Stock Holders of Old Common Stock in all of
the Debtors shall receive no distribution under the Plan. The Old Common Stock
shall be cancelled, extinguished and of no further force and effect as of the
Effective Date.
<PAGE>
4.12 Controversy Concerning Impairment In the event of a controversy
as to whether any Creditor or Holder of an Interest or Class of Creditors or
Class of Holders of Interests is impaired under the Plan, the Bankruptcy Court
shall, after notice and a hearing, determine such controversy.
ARTICLE 5
ACCEPTANCE OR REJECTION OF THE PLAN
5.01 Impaired Classes Entitled To Vote Classes 2 through 9 are
impaired under the Plan. Each Holder of an Allowed Claim in Classes 2 through 9
shall be entitled to vote to accept or reject the Plan.
5.02 Acceptance by an Impaired Class of Claims A Class of Creditors
shall have accepted the Plan if Creditors holding at least two-thirds in the
aggregate dollar amount and more than one-half in number of the Allowed Claims
of such Class that have accepted or rejected the Plan vote to accept the Plan.
5.03 Presumed Acceptance of Plan by Unimpaired Classes Class 1 is
unimpaired under the Plan, and, therefore, is conclusively presumed to accept
the Plan pursuant to section 1126(f) of the Bankruptcy Code and they do not have
a right to vote on the Plan.
5.04 Presumed Rejection Classes 10 and 11 are presumed to have
rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.
ARTICLE 6
MEANS FOR IMPLEMENTATION OF THE PLAN
6.01 Foothill's Allowed Secured Claim has been or will be paid from
the proceeds of its collateral.
6.02 Each of the Debtors shall remain as separate, free-standing
entities. On the Effective Date, Bergen and Mednet will enter into the
Acquisition Agreement. The Acquisition Agreement will provide that on the
Effective Date, Bergen will loan Mednet an additional $250,000 under the DIP
Facility, which funds will be used as the consideration by Mednet to purchase
100% of the New Common Stock of its subsidiaries, broken down as follows:
Medi-Mail - $100,000; Medi-Claim - $100,000; and Medi-Phar - $50,000. Proceeds
received by Medi-Mail, Medi-Claim and Medi-Phar for the New Common Stock will be
used as the initial payment on the Note. The Acquisition Agreement will further
provide that Bergen will, thereafter, acquire 100% of the New Common Stock of
Mednet, in exchange for one-half of Bergen's pre-petition claims.
6.03 The Liquidating Trust will be created upon the Effective Date of
the Plan, and the Committee will act as or designate the Trustee. Except for
payments for Allowed Administrative Claims and Priority Claims, which will be
paid by the Disbursing Agent, all payments will be made to Creditors out of the
Liquidating Trust. The Liquidating Trust shall take title to the Debtors'
pre-petition Causes of Action and to the Note. The Liquidating Trust shall also
take title to the prepetition accounts receivable remaining after payment of the
Administrative Expense Claims and the Set Aside Amount. The initial $250,000
(the "Set Aside Amount") shall be set aside for the beneficiaries of the
Liquidating Trust. Thereafter, the proceeds of prepetition accounts receivable
and all other Liquidating Trust assets, excluding the Note and Set Aside Amount,
shall be used to satisfy Bergen's postpetition deficiency claim incurred through
the Effective Date until same is paid in full. Thereafter, proceeds from
prepetition accounts receivable shall be paid into the Liquidating Trust The
Trustee shall be designated as the representative of the Estates for purposes of
prosecuting Avoiding Power Causes of Action, and the net proceeds thereof shall
be deposited in the Liquidating Trust. The Committee will remain in effect after
the Confirmation Date. The Committee's professionals will represent the Trustee
of the Liquidating Trust. The Trustee of the Liquidating Trust shall be entitled
to pay professional fees after the Confirmation Date without order of the Court;
provided, however, that the Court shall retain jurisdiction to resolve any
dispute relating to professional fees.
The Liquidating Trust will be administered under the direction of the
Committee upon the Effective Date of the Plan. The Trustee will make periodic
distributions from the Liquidating Trust to Creditors in Classes 6, 7, 8 and 9.
Upon the Effective Date of the Plan, the reorganized Debtors will
issue the Note to the Liquidating Trust. The Note will be a non-recourse,
subordinated promissory note in the principal sum of $1,250,000, payable without
interest, over four years, based on 10% of the net income of the reorganized
Debtors. $250,000 will be pre-paid on the Effective Date. The Note will be
returned to the Debtors upon the sooner to occur of payment of principal, or 4
years. The Note will be subordinated to all post-petition creditors of the
Debtors, including but not limited to financial institutions and post-petition
trade creditors and shall not be assignable. The Note Trustee shall have no
recourse to the Debtors except the right to receive the share of the Debtors'
net income described above and in the Note.
The fees and expenses of counsel for Bergen shall not be recoverable
from the Debtors or their Estates, except as provided in the DIP Facility.
6.04 The other assets of the Debtors which are not included within the
Acquisition Agreement shall be realized upon by the Debtors.
6.05 The Debtors' action against Bergen pending in the United States
District Court for the District of New Jersey, bearing docket no.
CV-S-96-00516-DWH (RJJ), shall be dismissed with prejudice and without costs.
Bergen's action against the Debtors and other defendants, except the Merryman
District Court Action, shall be dismissed with prejudice and without costs. Each
dismissal shall occur upon the confirmation of the Plan.
6.06 After the Confirmation Date and until the Effective Date, the
Debtors shall be authorized to continue the DIP Facility with Bergen.
6.07 The Trustee shall be the representative of the Estates for
purposes of prosecuting all Avoiding Power Causes of Action, and other Causes of
Action.
ARTICLE 7
CONDITIONS PRECEDENT
7.01 Conditions Precedent to Confirmation Date. The occurrence of the
Confirmation Date of the Plan is subject to satisfaction or waiver of each of
the following conditions:
(a) the Bankruptcy Court has entered the Confirmation Order in form
and substance satisfactory to the Debtors and Bergen;
(b) the Debtors have been authorized to assume all leases and
executory contracts which they may seek to assume;
<PAGE>
(c) the Debtors shall have assumed the Indemnity; and
(d) the estimated unpaid fees and expenses of Professionals have been
loaned to the Reorganized Debtors.
7.02 Conditions to Effective Date The occurrence of the following
shall be separate conditions to the Effective Date of the Plan:
(a) the Confirmation Order has become a Final Order; and
(b) Bergen and the Debtors have entered into the Acquisition
Agreement.
7.03 Waiver of Conditions The Proponents and Bergen jointly shall have
the right to waive any of the foregoing conditions to Confirmation Date, or to
the Effective Date. Without limiting the foregoing, the Effective Date may occur
notwithstanding the pendency of an appeal of the Confirmation Order or any order
related thereto so long as there is no stay in effect. The Effective Date may
occur before the expiration of time to take an appeal or to seek reconsideration
of the Confirmation Order without the giving of any notice to any objecting
party. In the event of any such appeal, the Proponents may seek the dismissal of
such appeal as moot following the Effective Date of the Plan.
7.04 Failure of Conditions. In the event all conditions to occurrence
of the Effective Date have not been satisfied or waived prior to December 31,
1998, then upon request of any party in interest, the Confirmation Order shall
be vacated.
ARTICLE 8
DISTRIBUTIONS UNDER THE PLAN
8.01 Distributions All distributions under the Plan to Holders of
Allowed Administrative and Priority Claims shall be made by the Disbursing
Agent. All other distributions to creditors shall be made by the Trustee.
8.02 Method of Payment Any Cash payment made by the Disbursing Agent
pursuant to the Plan shall be in U.S. dollars, either by check drawn on a
domestic bank or wire transfer therefrom.
8.03 Timing of Payment Any payment or distribution required to be made
under the Plan on a day other than a Business Day shall be due on the next
succeeding Business Day.
8.04 Setoff Nothing contained herein shall be deemed to waive the
Debtor's or Trustee's statutory or common law right of setoff.
8.05 De Minimis Distributions The Disbursing Agent or the Trustee
shall not be required to distribute Cash to any Creditor if the amount of Cash
to be distributed to such Creditor is less than $5.00.
8.06 Unclaimed Distributions to Creditors
(a) Non-Negotiated Checks If the Holder of an Allowed Claim fails to
present for payment a check issued to such Holder pursuant to the Plan within
ninety (90) days of the date such check was issued, or if any distributions
returned to the Disbursing Agent or Trustee due to an incorrect or incomplete
address for which the Debtors or Trustee have not received a correct address,
then the amount of Cash attributable to such check or distribution shall be
deemed to be Unclaimed Distributions in respect of such Holder's Class of Claims
and the payee of such check or distribution shall be deemed to have no further
Claim in respect of such check or distribution, and shall not be entitled to
participate in any further distributions under the Plan.
(b) Revesting of Unclaimed Distributions All Unclaimed Distributions
shall revest in the Debtors, if made by the Disbursing Agent, or in the
Liquidating Trust, if made by the Trustee.
8.07 Treatment of Disputed Claims Disputed Claims shall be treated as
follows under the Plan:
(a) Objections to Claims Except as otherwise provided by the
Bankruptcy Court or in the Plan, all objections to Claims shall be Filed and
served on the Holders of such Claims on or before the later of (i) ninety (90)
days after the Confirmation Date, (ii) ninety (90) days after a particular Proof
of Claim is Filed, except that such Claim shall not be deemed an Allowed Claim
until after the ninety (90) day period lapses, and (iii) such additional date as
the Bankruptcy Court may fix upon application of the Debtor; provided, however,
that no party in interest shall be required to File an objection to any Claim
listed in the Schedules as disputed, contingent, unliquidated or undetermined
and for which no Proof of Claim was Filed, which Claim shall be barred and
disallowed in its entirety.
(b) Authority To Prosecute As of the Confirmation Date, the Trustee or
Committee shall have the sole and exclusive authority to settle, compromise,
withdraw or litigate to judgment objections to Claims in Classes 6, 7, 8 or 9.
(c) No Distributions Pending Allowance Notwithstanding any other
provision of the Plan to the contrary, no distribution shall be made to the
Holder of a Disputed Claim or the Holder of a Claim who is the subject of a
proceeding against it by the Debtor or Trustee, unless and until such Disputed
Claim becomes an Allowed Claim or such proceeding is resolved.
(d) Distributions After Allowance Once a Disputed Claim becomes an
Allowed Claim, distribution on account of such Claim shall be made in accordance
with the provisions of the Plan governing the Class of Claims to which the
respective Claim belongs.
8.08 Estimation of Claims At any time prior to the Effective Date, the
Debtor may seek the estimation of a Disputed Claim in accordance with the
applicable provisions of the Bankruptcy Code and Bankruptcy Rules. The estimated
amount of a Disputed Claim shall be fixed by Final Order, which shall be deemed
the amount of such Claim for all purposes under the Plan.
<PAGE>
ARTICLE 9
EXECUTORY CONTRACTS
9.01 Assumption or Rejection of Executory Contracts and Unexpired
Leases
(a) Executory Contracts All executory contracts that exist between the
Debtor and any Entity which have not been assumed or rejected prior to the
Confirmation Date shall be deemed rejected as of the Confirmation Date, except
for any executory contract that has been assumed pursuant to an order of the
Bankruptcy Court entered at or prior to the Confirmation Date, or which is
subject to a pending application to assume or extend time to assume. Nothing
contained herein shall constitute a waiver of any claim, right or cause of
action that the Debtor may hold against any party to any executory contract with
the Debtor, including the insurer under any policy of insurance.
Any options, warrants or other equity interests representing the right
to acquire either Preferred Stock or Old Common Stock and the Preferred Stock
and Old Common Stock, shall be canceled as of the Effective Date.
(b) Unexpired Leases. All unexpired leases that exist between the
Debtor and any Entity which have not been assumed or rejected prior to the
Confirmation Date shall be deemed rejected as of the Confirmation Date, except
for any unexpired lease that has been assumed pursuant to an order of the
Bankruptcy Court entered at or prior to the Confirmation Date, or which is
subject to a pending application to assume or extend time to assume. Nothing
contained herein shall constitute a waiver of any claim, right or cause of
action that the Debtor may hold against any lessor.
(c) Approval of Assumption or Rejection of Leases and Contracts Entry
of the Confirmation Order shall constitute the approval, pursuant to section
365(a) of the Bankruptcy Code, of the rejection of the executory contracts and
unexpired leases to be rejected pursuant to the Plan.
(d) Bar Date for Filing Proofs of Claim Relating to Executory
Contracts and Unexpired Leases Rejected Pursuant to the Plan Any and all Proofs
of Claim arising out of the rejection of an executory contract or unexpired
lease pursuant to this Article 9 must be Filed within thirty (30) days after the
Confirmation Hearing. Any Holder of a Claim arising out of the rejection of an
executory contract or unexpired lease who fails to File a Proof of Claim within
such time shall be forever barred, estopped and enjoined from asserting such
Claim against the Debtor or the Estate. Unless otherwise ordered by the
Bankruptcy Court, all Claims arising from the rejection of executory contracts
and unexpired leases shall be treated as General Unsecured Claims under the
Plan. Nothing contained herein shall extend the time for Filing a Proof of Claim
for rejection of any contract or lease rejected prior to the Confirmation Date.
ARTICLE 10
EFFECTS OF PLAN UPON CONFIRMATION
10.01 Revesting of Assets Except as otherwise set forth herein,
subject to the provisions of and for the purposes of distributions in accordance
with the Plan, all property of the Estates shall revest in the Debtors on the
Confirmation Date. Such revested property shall be free and clear of all liens,
claims, encumbrances and interests, except as otherwise provided in the Plan.
10.02 Section 1141 Discharge Pursuant to section 1141 of the
Bankruptcy Code, all Claims against or Interests in (including rights of
stockholders, nominees and warrant holders) the Debtors will be forever barred
and discharged and deemed satisfied upon entry of the Confirmation Order. As of
the Effective Date, all Entities that have held, currently hold or may hold a
Claim or other debt or liability against the Debtor affected by the Plan are
enjoined from taking any actions to collect or recover in any manner on account
of any such Claims, debts or liabilities from any or all of the Assets, except
as otherwise provided in the Plan.
Except to the extent otherwise provided in the Plan, the treatment of
all claims against, or equity interest in, the Debtors under the Plan shall be
in exchange for, and in complete satisfaction, discharge and release of, all
claims against or equity interest in, the Debtors of any nature whatsoever,
known or unknown, including, without limitation, any interest accrued or
expenses incurred thereon from and after the Petition Date, or against its
estate or properties or interest in property. Except as otherwise provided in
the Plan, upon the Effective Date, all claims against, and equity interest in,
the Debtors will be satisfied, discharged and released in full exchange for the
consideration provided under the Plan. Except as otherwise provided in the Plan,
all entities shall be precluded from asserting against the Debtors, or
reorganized Debtors, or their respective properties or interest in property, any
other claims based upon any act or omission, transaction, or other activity of
any kind or nature that occurred prior to the Effective Date.
10.03 Retention of Jurisdiction The Bankruptcy Court shall retain and
have jurisdiction over the Case for the following purposes:
(a) to adjudicate all controversies concerning the classification or
allowance of any Claims or Interests;
(b) to liquidate any Claims which are disputed, contingent or
unliquidated;
(c) to determine any and all objections to the allowance of Claims or
Interests, or counterclaims to any Claim;
(d) to determine any and all applications for allowance of
compensation and reimbursement of expenses and any other fees and expenses
authorized to be paid or reimbursed under the Bankruptcy Code or the Plan;
(e) to determine any applications pending on the Effective Date for
the rejection or assumption of executory contracts or unexpired leases or for
the assumption and assignment, as the case may be, of executory contracts or
unexpired leases to which the Debtor is a party or with respect to which it may
be liable, and to hear and determine, and if need be to liquidate, any and all
Claims arising therefrom;
(f) to adjudicate any actions brought by the Debtor or the Committee
(upon authorization of the Bankruptcy Court) for any Estate Action Recoveries,
at any time prior to expiration of the relevant statute of limitations;
(g) to determine any and all applications, adversary proceedings and
contested or litigated matters that may be pending on the Confirmation Date;
(h) to consider any modifications of the Plan, remedy any defect or
omission or reconcile any inconsistency in any order of the Bankruptcy Court,
including the Confirmation Order, to the extent authorized by the Bankruptcy
Court;
(i) to determine all controversies, suits and disputes that may arise
in connection with the interpretation, enforcement or consummation of the Plan;
<PAGE>
(j) to consider and act on the compromise and settlement of any Claim
or cause of action by or against the Estate;
(k) to issue orders in aid of execution of the Plan to the extent
authorized by section 1142 of the Bankruptcy Code; and
(l) to determine such other matters as may be set forth in the
Confirmation Order or which may arise in connection with the Plan or the
Confirmation Order.
10.04 Preservation of Subordination Rights The classification and
treatment of all Claims and Interests under the Plan does not adversely affect
any contractual, legal and equitable subordination rights, whether arising under
general principles of equitable subordination, section 510(c) of the Bankruptcy
Code or otherwise, that a Holder of a Claim or Interest or the Debtor may have
against other Claim Holders with respect to any distribution made pursuant to
the Plan.
10.05 Indemnification of Officers and Directors Notwithstanding
anything contained herein to the contrary, the Debtors' indemnification of its
current directors, officers, employees, agents and any person who is or was
serving or who had agreed to serve at the request of the Debtors' Board of
Directors or an officer of the Debtor as an employee or agent of the Debtor or
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, employee benefit plan, trust, or other entity or enterprise,
whether for profit or not for profit (including the heirs, executors,
administrators, or estate of such person), as provided in the Debtor's
Certificate of Incorporation, By-Laws and any insurance policy providing
coverage for the claims for which such indemnification was given, shall
continue, but shall be limited to available insurance in excess of any
applicable deductible. Nothing contained herein shall be deemed to cut off the
rights of any of the indemnified persons described above to make a claim under
any insurance policy providing coverage therefor.
10.06 Effectuating Documents; Further Transactions; Timing The Debtors
are authorized to execute, deliver, file or record such contracts, instruments,
releases and other agreements or documents and to take such actions as may be
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan. All transactions that are required to occur on the
Effective Date under the terms of the Plan shall be deemed to have occurred
simultaneously.
10.07 Dismissal with Prejudice of Action Against Bergen The
Confirmation Order shall authorize the Debtors to dismiss with prejudice all
actions pending against Bergen and to execute and deliver general releases to
Bergen.
10.08 Ratification of Actions Taken Entry of the Confirmation Order
shall ratify all transactions effected by the Debtors from and including the
Filing of the Case through the Confirmation Date.
10.09 Modification of the Plan The Debtors reserve the right, in
accordance with the Bankruptcy Code, to amend or modify the Plan and related
documents in any manner prior to the entry of the Confirmation Order. After
entry of the Confirmation Order, the Debtors may, upon order of the Bankruptcy
Court, amend or modify the Plan and related documents in accordance with, and to
the extent permitted by, Section 1127(b) of the Bankruptcy Code, and remedy any
defect or omission, or reconcile any inconsistency in the Plan in such manner as
may be necessary to carry out the purpose and intent of the Plan. Every
amendment or modification of the Plan shall supersede and render null and void
all prior versions of the Plan.
10.10 Representative of Estates The Trustee shall be designated
representative of the Debtors' Estates for the purposes of prosecuting all
Causes of Action and Avoiding Power Causes of Action in which the Liquidating
Trust has an interest.
ARTICLE 11
MANAGEMENT AFTER CONFIRMATION
11.01 General Upon the Effective Date, the management, control and
operation of the Debtor shall become the responsibility of Bergen in accordance
with the Acquisition Agreement.
11.02 Board of Directors The board of directors of the Debtor after
the Confirmation Date shall be identified at the Confirmation Hearing.
11.03 Officers The officers of the Debtor after the Confirmation Date
shall be identified at the Confirmation Hearing.
11.04 No Corporate Action Required As of the Effective Date, the
distribution of Cash, the adoption, execution, delivery and implementation of
all contracts, leases, instruments, and other agreements related to or
contemplated by the Plan, the restatement and amendment of Mednet's Certificate
of Incorporation and Bylaws in a form which will be annexed to the Acquisition
Agreement, and the other matters provided for, under or in furtherance of the
Plan involving action to be taken by or required of the Debtor shall be deemed
to have occurred and be effective as provided herein, and shall be authorized
and approved in all respects without further order of the Bankruptcy Court or
any requirement of further action by stockholders or directors of the Debtor.
11.05 Powers and Duties of the Liquidating Trustee From and after the
Effective Date, the Trustee shall have the powers and exercise the duties, as
set forth in section 1123(b)(3) of the Bankruptcy Code, to retain, enforce,
settle and prosecute all Estate Action Recoveries. The Trustee shall use its
best efforts to promptly liquidate the remaining Assets at minimal cost and to
distribute the proceeds of the Assets as soon as practicable pursuant to this
Plan.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.01 Exemption from Transfer Taxes Pursuant to section 1146(c) of the
Bankruptcy Code, the issuance, transfer or exchange of securities or other
property under the Plan; the creation, transfer, filing or recording of any
mortgage, deed of trust, financing statement or other security interest; or the
making, delivery, filing or recording of any deed or other instrument of
transfer under, in furtherance of or in connection with the Plan, shall not be
subject to any stamp tax, real estate tax, conveyance, filing or transfer fees,
mortgage, recording or other similar tax or other government assessment. All
recording officers and other entities whose duties include recordation of
documents lodged for recording shall record, file and accept such documents
delivered under the Plan without the imposition of any charge, fee, governmental
assessment or tax.
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12.02 Exculpation Neither the Debtor, the Committee, Bergen, nor any
of their officers, directors, members, employees, advisors, affiliates, lenders,
investors or agents shall have or incur any liability to any Holder of a Claim
or Interest for any act or omission in connection with, or arising out of,
confirmation or consummation of the Plan or the administration of the Case or
Plan or the property to be distributed under the Plan, except for willful
misconduct or gross negligence, and in all respects shall be entitled to rely
upon the advice of counsel with respect to their duties and responsibilities
under the Plan.
12.03 Modifications The Plan may not be altered, amended or modified
by the Debtor before or after the Confirmation Date, other than as provided in
section 1127 of the Bankruptcy Code. The Plan as modified shall become the Plan
for all purposes hereunder.
12.04 Revocation or Withdrawal of the Plan Bergen and/or the
Proponents reserve the right to revoke or withdraw the Plan at any time prior to
the Effective Date. If Bergen or the Proponents revoke or withdraw the Plan,
then the Plan shall be deemed null and void.
12.05 Severability Should any provision in the Plan be determined to
be unenforceable following the Effective Date, such determination shall in no
way limit the enforceability and operative effect of any and all other
provisions of the Plan.
12.06 Binding Effect The Plan shall be binding upon, and shall inure
to the benefit of, the Debtor, the Holders of all Claims and Interests and their
respective successors and assigns. Confirmation of the Plan binds each of the
Holders of Claims and Interests to the terms and conditions of the Plan, whether
or not such Creditor or Interest Holder has accepted the Plan.
12.07 Construction The rules of construction set forth in section 102
of the Bankruptcy Code shall apply to construction of the Plan.
12.08 Time In computing any period of time prescribed or allowed by
the Plan, unless otherwise set forth herein, the provisions of Bankruptcy Rule
9006 shall apply.
12.09 Headings The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor are intended
in any manner to affect any interpretation of the provisions of the Plan.
12.10 Governing Law Except to the extent that the Bankruptcy Code or
other federal law is applicable, the rights, duties and obligations of any
Entity arising under the Plan shall be governed by, and construed and enforced
in accordance with, the internal laws of the State of Nevada, without regard to
Nevada choice of law provisions.
12.11 Existence of Committee The Committee shall continue in existence
until the Cases are closed.
12.12 Benefit Programs As of the Confirmation Date, all programs or
plans maintained by the Debtor for the benefit of present or former employees
and dated on or before the Petition Date which have not been previously
terminated shall be deemed to be terminated. Any Entity with a Claim arising
from such termination shall be treated as a Holder of a General Unsecured Claim.
12.13 Retiree Benefits Except as otherwise provided in the Plan, any
obligations of the Debtor to any Entity for the purpose of providing or
reimbursing payments for retired employees and their spouses and dependents for
medical, surgical, or hospital care benefits, or benefits in the event of
sickness, accident, disability, or death under any plan, fund or program
(through the purchase of insurance or otherwise) maintained or established in
whole or in part by the Debtor prior to the Petition Date, if any, shall be
continued.
12.14 Payment of Statutory Fees No later than the Effective Date, the
Debtors shall have paid all fees due to the United States Trustee through the
Effective Date. Such fees which accrue after the Effective Date and until the
Cases are closed shall be payable by the Liquidating Trust.
12.15 Cramdown At the Confirmation Hearing, the Proponent may seek
Confirmation of this Plan notwithstanding the rejection of the Plan by any
impaired Class of Creditors or Interest Holders.
12.16 Execution of Plan Documents Upon application by the Debtor or
Committee, the Court may issue an order directing any necessary party to
execute, deliver, or to join in the execution or delivery of an instrument or
document, and to perform any act necessary for the consummation of this Plan.
12.17 Post Confirmation Fees and Expenses The Debtors shall be
authorized to pay the fees and expenses of any professional retained by the
Debtors accruing after the Effective Date in accordance with the terms of
engagement of such professional.
12.18 Closing of Cases The Cases shall be closed when the Plan has
been substantially consummated. Closing of the Cases shall not affect the
pendency of any adversary proceedings filed before the Cases are closed.
MEDNET, MPC CORPORATION
By: /s/ Robert Bagdasarian
MEDI-MAIL, INC.
By: /s/ Robert Bagdasarian
MEDI-CLAIM, INC.
By: /s/ Robert Bagdasarian
MEDI-PHAR, INC.
By: /s/ Robert Bagdasarian
Dated: July 1, 1998
