SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 9, 1999
GEOTEK COMMUNICATIONS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-17581 22-2358635
(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
102 Chestnut Ridge Road, Montvale, New Jersey 07645
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-930-9305
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On April 9, 1999, Geotek Communications, Inc. and its domestic
subsidiaries (the "Debtors") filed the Debtors' First Amended Consolidated Plan
of Liquidation (the "Plan") and related Disclosure Statement in the Bankruptcy
Court for the District of Delaware. Pursuant to the Plan, if confirmed, the
Debtors' Preferred Stock and Common Stock will be canceled upon the effective
date of the Plan. The holders of Debtors' Preferred Stock and Common Stock will
not receive or retain any property under the Plan.
Copies of the Plan and related Disclosure Statement are attached hereto as
Exhibit 99 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
(99) Debtors' First Amended Consolidated Plan of Liquidation and
related Disclosure Statement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GEOTEK COMMUNICATIONS, INC.
Date: April 15, 1999 By: /s/ Anne E. Eisele
-------------------------
Name: Anne E. Eisele
Title President and CFO
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re ) Chapter 11
)
GEOTEK COMMUNICATIONS, INC., et al.,* ) Case No. 98 -1375 (PJW)
)
Debtors. ) Jointly Administered
DEBTORS' FIRST AMENDED DISCLOSURE STATEMENT
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE
[THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE DEBTORS' FIRST
AMENDED CONSOLIDATED PLAN OF LIQUIDATION DATED APRIL 9, 1999. ACCEPTANCES OR
REJECTIONS MAY NOT BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED
BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR
APPROVAL BUT HAS NOT YET BEEN APPROVED BY THE BANKRUPTCY COURT.]
[INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THIS
DISCLOSURE STATEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR WILL THERE BE ANY CONVEYANCE OF THE SECURITIES DESCRIBED
HEREIN UNTIL THIS DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT
AND THE DEBTORS' FIRST AMENDED CONSOLIDATED PLAN OF LIQUIDATION HAS BEEN
CONFIRMED.]
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER, LLP
425 Park Avenue
New York, New York 10022
(212) 836-8000
YOUNG CONAWAY STARGATT
& TAYLOR, LLP
P.O. Box 391
Rodney Square North, 11th Floor
Wilmington, Delaware 19801
(302) 571-6600
Co-Counsel to the Debtors
- -----------
* complete list of the Debtors herein is set forth on the following pages.
<PAGE>
LIST OF ALL DEBTORS
GEOTEK COMMUNICATIONS, INC., Case No. 98-1375 (PJW)
f/k/a Geotek Industries, Inc., d/b/a
PowerSpectrum of New York, Inc.
and PowerSpectrum of Washington, D.C.,
ANSA COMMUNICATIONS, INC. Case No. 98-1376 (PJW)
CLW COMMUNICATIONS, INC., Case No. 98-1377 (PJW)
CUMULOUS HOLDING CORP. Case No. 98-1378 (PJW)
GELICO, INC. Case No. 98-1379 (PJW)
GELICO OF CHICAGO, INC. Case No. 98-1380 (PJW)
GENERAL PHOTONICS HOLDING Case No. 98-1381 (PJW)
CORPORATION, d/b/a General
Photonics Corporation
GEOPOWER, INC. Case No. 98-1382 (PJW)
GEOTEK ACQUISITION CORP. Case No. 98-1383 (PJW)
GEOTEK AMERICA, INC., d/b/a Geotek Case No. 98-1384 (PJW)
of America, Inc.
GEOTEK ASIA, INC. Case No. 98-1385 (PJW)
GEOTEK DATA, INC. Case No. 98-1386 (PJW)
GEOTEK FINANCING CORPORATION Case No. 98-1387 (PJW)
GEOTEK GMBH HOLDING CORPORATION Case No. 98-1388 (PJW)
GEOTEK HOLDINGS, INC. f/k/a Case No. 98-1389 (PJW)
Geotek USA, Inc.
GEOTEK INTERNATIONAL Case No. 98-1390 (PJW)
NETWORKS, INC.
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GEOTEK LICENSE HOLDINGS, INC. Case No. 98-1391 (PJW)
GEOTEK OF ATLANTA, INC. Case No. 98-1392 (PJW)
GEOTEK OF BOSTON, INC. Case No. 98-1393 (PJW)
GEOTEK OF CHICAGO, INC. Case No. 98-1394 (PJW)
GEOTEK OF DALLAS, INC. Case No. 98-1395 (PJW)
GEOTEK OF HOUSTON, INC. Case No. 98-1396 (PJW)
GEOTEK OF MIAMI, INC. Case No. 98-1397 (PJW)
GEOTEK OF NEW YORK, INC. Case No. 98-1398 (PJW)
GEOTEK OF ORLANDO, INC. Case No. 98-1399 (PJW)
GEOTEK OF PHILADELPHIA, INC. Case No. 98-1400 (PJW)
GEOTEK OF TAMPA, INC. Case No. 98-1401 (PJW)
GEOTEK OF WASHINGTON, D.C., INC. Case No. 98-1402 (PJW)
GEOTEK SERVICES, INC., f/k/a Case No. 98-1403 (PJW)
Geotek USA, Inc.
GEOTEK SUBSIDIARY INDUSTRIES, INC. Case No. 98-1404 (PJW)
GEOTEK TECHNOLOGIES, INC. Case No. 98-1405 (PJW)
GEOTEK USA, INC., f/k/a Case No. 98-1406 (PJW)
PowerSpectrum, Inc., d/b/a
PowerSpectrum, Incorporated,
PowerSpectrum of Houston, Inc.,
PowerSpectrum of Maryland, Inc.,
PowerSpectrum of New York, Inc.,
PowerSpectrum of N.Y., Inc.,
PowerSpectrum of NYC, Inc.,
PowerSpectrum of San Antonio, Inc., and
PowerSpectrum of Washington, D.C., Inc.
GEOTEK U.S. NETWORKS, INC. Case No. 98-1407 (PJW)
ii
<PAGE>
LASER ACQUISITION CORPORATION Case No. 98-1408 (PJW)
MacDERMOTT COMMUNICATIONS, INC. Case No. 98-1409 (PJW)
METRO NET SYSTEMS, INC., Case No. 98-1410 (PJW)
f/k/a Geotek MNS, Inc.
M.I.S. HOLDINGS ACQUISITION CORP. Case No. 98-1411 (PJW)
MOBILE MESSAGE SERVICE Case No. 98-1412 (PJW)
OF TEXAS, INC.
OAKHILL COMMUNICATIONS, INC. Case No. 98-1413 (PJW)
ORAM USA, INC. Case No. 98-1414 (PJW)
PATLEX INTERNATIONAL Case No. 98-1415 (PJW)
CORPORATION
PATLEX OF DELAWARE, INC. Case No. 98-1416 (PJW)
POWERSPECTRUM MICROWAVE, INC. Case No. 98-1417 (PJW)
POWERSPECTRUM OF ATLANTA, INC. Case No. 98-1418 (PJW)
POWERSPECTRUM OF BOSTON, INC. Case No. 98-1419 (PJW)
POWERSPECTRUM OF BUFFALO, INC. Case No. 98-1420 (PJW)
POWERSPECTRUM OF CHARLOTTE, INC. Case No. 98-1421 (PJW)
POWERSPECTRUM OF CHICAGO, INC. Case No. 98-1422 (PJW)
POWERSPECTRUM OF CINCINNATI, INC. Case No. 98-1423 (PJW)
POWERSPECTRUM OF D.C., INC. Case No. 98-1424 (PJW)
POWERSPECTRUM OF DALLAS, INC. Case No. 98-1425 (PJW)
POWERSPECTRUM OF DENVER, INC. Case No. 98-1426 (PJW)
POWERSPECTRUM OF GREENSBORO, INC. Case No. 98-1427 (PJW)
iii
<PAGE>
POWERSPECTRUM OF HARTFORD, INC. Case No. 98-1428 (PJW)
POWERSPECTRUM OF Case No. 98-1429 (PJW)
INDIANAPOLIS, INC.
POWERSPECTRUM OF Case No. 98-1430 (PJW)
JACKSONVILLE, INC.
POWERSPECTRUM OF KANSAS Case No. 98-1431 (PJW)
CITY, INC.
POWERSPECTRUM OF MEMPHIS, Case No. 98-1432 (PJW)
INC.
POWERSPECTRUM OF MIAMI, INC. Case No. 98-1433 (PJW)
POWERSPECTRUM OF Case No. 98-1434 (PJW)
MINNEAPOLIS, INC.
POWERSPECTRUM OF NASHVILLE, Case No. 98-1435 (PJW)
INC.
POWERSPECTRUM OF Case No. 98-1436 (PJW)
NEW ORLEANS, INC.
POWERSPECTRUM OF Case No. 98-1437 (PJW)
NEW YORK CITY, INC.
POWERSPECTRUM OF Case No. 98-1438 (PJW)
ORLANDO, INC.
POWERSPECTRUM OF Case No. 98-1439 (PJW)
PHILADELPHIA, INC.
POWERSPECTRUM OF PHOENIX, INC. Case No. 98-1440 (PJW)
POWERSPECTRUM OF ROCHESTER, Case No. 98-1441 (PJW)
INC.
POWERSPECTRUM OF SALT LAKE Case No. 98-1442 (PJW)
CITY, INC.
iv
<PAGE>
POWERSPECTRUM OF SAN Case No. 98-1443 (PJW)
FRANCISCO, INC.
POWERSPECTRUM OF SEATTLE, INC. Case No. 98-1444 (PJW)
POWERSPECTRUM OF TAMPA, INC. Case No. 98-1445 (PJW)
RESHEF USA, INC. Case No. 98-1446 (PJW)
U.S.I. VENTURE CORP. Case No. 98-1447 (PJW)
v
<PAGE>
THIS DISCLOSURE STATEMENT, THE DEBTORS' FIRST AMENDED CONSOLIDATED PLAN OF
LIQUIDATION DATED APRIL 9, 1999, ANNEXED HERETO AS APPENDIX "A" (THE "PLAN"),
THE ACCOMPANYING BALLOTS AND THE RELATED MATERIALS DELIVERED TOGETHER HEREWITH
ARE BEING FURNISHED BY THE DEBTORS TO KNOWN HOLDERS OF IMPAIRED CLAIMS AND
INTERESTS PURSUANT TO SECTIONS 1125 AND 1126 OF THE BANKRUPTCY CODE, IN
CONNECTION WITH THE SOLICITATION BY THE DEBTORS OF VOTES TO ACCEPT THE PLAN.
THE VOTING DEADLINE TO ACCEPT OR REJECT THE PLAN IS 5:00 P.M., EASTERN
STANDARD TIME, JUNE __, 1999, UNLESS EXTENDED BY ORDER OF THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE (THE "BANKRUPTCY COURT"). YOUR
VOTE IS IMPORTANT.
THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLAN IS IN THE BEST INTERESTS
OF THE DEBTORS AND ALL HOLDERS OF CLAIMS AND INTERESTS. THE DEBTORS, [THE
OFFICIAL COMMITTEE OF UNSECURED CREDITORS (THE "CREDITORS' COMMITTEE")], HUGHES
NETWORK SYSTEMS, A DIVISION OF HUGHES ELECTRONICS CORPORATION, S-C RIG
INVESTMENTS III, L.P. AND [WILMINGTON TRUST COMPANY, AS SUCCESSOR TRUSTEE UNDER
THE 15% SECURED NOTES INDENTURE] RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN. THE
DEBTORS BELIEVE THAT MERRILL LYNCH GLOBAL ALLOCATION FUND, INC. AND MERRILL
LYNCH EQUITY/CONVERTIBLE SERIES (GLOBAL ALLOCATION PORTFOLIO) INTEND TO VOTE IN
FAVOR OF THE PLAN.
PRIOR TO SUBMITTING BALLOTS, HOLDERS OF CLAIMS AGAINST THE DEBTORS ARE
ENCOURAGED TO READ AND CAREFULLY CONSIDER THIS DISCLOSURE STATEMENT IN ITS
ENTIRETY, INCLUDING SPECIFICALLY THE SECTION HEREOF ENTITLED "CERTAIN FACTORS TO
BE CONSIDERED."
IN ORDER FOR THE PLAN TO BE CONFIRMED BY THE BANKRUPTCY COURT, IT
ORDINARILY MUST BE ACCEPTED BY EACH IMPAIRED CLASS. A CLASS OF CLAIMS OR
INTERESTS IS GENERALLY CONSIDERED TO BE "IMPAIRED" UNDER SECTION 1124 OF THE
BANKRUPTCY CODE IF THE PLAN ALTERS THE LEGAL, EQUITABLE OR CONTRACTUAL RIGHTS TO
WHICH SUCH CLAIM OR INTEREST ENTITLES THE HOLDER THEREOF. ACCEPTANCE OF THE PLAN
BY AN IMPAIRED CLASS OF CLAIMS REQUIRES THAT (i) AT LEAST HALF OF THE CLAIMANTS
WHO HOLD CLAIMS IN SUCH CLASS, AND WHO ACTUALLY CAST BALLOTS, VOTE IN FAVOR OF
THE PLAN, AND (ii) SUCH CLAIMANTS WHO VOTED TO ACCEPT THE PLAN HOLD AT LEAST
TWO-THIRDS IN AGGREGATE DOLLAR AMOUNT OF THE CLAIMS OF THE HOLDERS IN SUCH CLASS
WHO ACTUALLY CAST BALLOTS. ACCEPTANCE OF THE PLAN BY AN IMPAIRED CLASS OF
<PAGE>
INTERESTS REQUIRES THAT AT LEAST TWO-THIRDS IN AMOUNT OF THE ALLOWED INTERESTS
IN SUCH CLASS, AND WHO ACTUALLY CAST BALLOTS, VOTE TO ACCEPT THE PLAN.
IN THE EVENT ANY CLASS OF CLAIMS OR INTERESTS REJECTS, OR IS DEEMED BY LAW
TO HAVE REJECTED, THE PLAN, IF ALL APPLICABLE REQUIREMENTS FOR CONFIRMATION OF
THE PLAN ARE MET, AS SET FORTH IN SECTIONS 1129(a)(1) THROUGH (13) OF THE
BANKRUPTCY CODE, EXCEPT THAT HOLDERS OF ANY SUCH CLAIMS OR INTERESTS HAVE
REJECTED THE PLAN, THE DEBTORS SHALL REQUEST THAT THE BANKRUPTCY COURT CONFIRM
THE PLAN PURSUANT TO THE "CRAM DOWN" PROVISIONS OF SECTION 1129(b) OF THE
BANKRUPTCY CODE.
IF THE REQUISITE VOTE IS ACHIEVED FOR EACH CLASS OF IMPAIRED CLAIMS, THE
PLAN IS SUBSEQUENTLY CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE
OCCURS, ALL HOLDERS OF CLAIMS AGAINST AND INTERESTS IN THE DEBTORS (INCLUDING,
WITHOUT LIMITATION, THOSE HOLDERS OF CLAIMS WHO DO NOT SUBMIT BALLOTS TO ACCEPT
OR REJECT THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND THE TRANSACTIONS
AND DISTRIBUTIONS CONTEMPLATED THEREBY.
BY ORDER DATED MAY __, 1999, THE BANKRUPTCY COURT HAS APPROVED THIS
DISCLOSURE STATEMENT AS CONTAINING ADEQUATE INFORMATION TO PERMIT THE HOLDERS OF
CLAIMS AGAINST THE DEBTORS TO MAKE A REASONABLY INFORMED DECISION IN EXERCISING
THEIR RIGHT TO VOTE UPON THE PLAN. APPROVAL OF THIS DISCLOSURE STATEMENT BY THE
BANKRUPTCY COURT DOES NOT CONSTITUTE A DETERMINATION ON THE MERITS OF THE PLAN.
THIS DISCLOSURE STATEMENT AND ITS RELATED DOCUMENTS ARE THE ONLY DOCUMENTS
AUTHORIZED BY THE BANKRUPTCY COURT TO BE USED IN CONNECTION WITH THE
SOLICITATION OF VOTES ACCEPTING OR REJECTING THE PLAN. NO REPRESENTATIONS ARE
AUTHORIZED BY THE BANKRUPTCY COURT CONCERNING THE DEBTORS, THEIR BUSINESS
OPERATIONS, THE VALUE OF THEIR ASSETS OR THE VALUES OF ANY SECURITIES TO BE
ISSUED OR BENEFITS OFFERED PURSUANT TO THE PLAN, EXCEPT AS EXPLICITLY SET FORTH
IN THIS DISCLOSURE STATEMENT OR ANY OTHER DOCUMENTS APPROVED FOR DISTRIBUTION BY
THE BANKRUPTCY COURT.
THERE HAS BEEN NO INDEPENDENT AUDIT OF THE FINANCIAL INFORMATION CONTAINED
IN THIS DISCLOSURE STATEMENT EXCEPT AS EXPRESSLY INDICATED IN THIS DISCLOSURE
STATEMENT. THIS DISCLOSURE STATEMENT WAS COMPILED FROM INFORMATION OBTAINED BY
THE DEBTORS
2
<PAGE>
FROM NUMEROUS SOURCES BELIEVED TO BE ACCURATE TO THE BEST OF THE DEBTORS'
KNOWLEDGE, INFORMATION AND BELIEF.
SHARES OF CLASS A COMMON STOCK OF NEXTEL COMMUNICATIONS, INC. TO BE
DISTRIBUTED TO HOLDERS OF ALLOWED CLAIMS PURSUANT TO THE PLAN WILL NOT HAVE BEEN
REGISTERED ON THE EFFECTIVE DATE WITH THE SECURITIES AND EXCHANGE COMMISSION
(THE "COMMISSION") UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR UNDER ANY STATE SECURITIES OR "BLUE SKY" LAWS. SUCH SECURITIES WILL BE
ISSUED ON THE EFFECTIVE DATE IN RELIANCE UPON THE EXEMPTION FROM THE SECURITIES
ACT AND APPLICABLE STATE LAWS PROVIDED IN SECTION 1145 OF THE BANKRUPTCY CODE.
NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY SUCH AUTHORITY HAS
PASSED UPON, CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DISCLOSURE STATEMENT OR UPON THE DECISION TO ACCEPT OR REJECT
THE PLAN. HOLDERS OF CLAIMS AND INTERESTS MUST RELY ON THEIR OWN EXAMINATION OF
THE DEBTORS AND THE TERMS OF THE PLAN, INCLUDING THE MERITS AND RISKS INVOLVED.
THIS DISCLOSURE STATEMENT CONTAINS ONLY A SUMMARY OF THE PLAN. ALL HOLDERS
OF CLAIMS ARE ENCOURAGED TO REVIEW THE FULL TEXT OF THE PLAN, ANNEXED HERETO AS
APPENDIX "A," AND TO READ CAREFULLY THIS ENTIRE DISCLOSURE STATEMENT, INCLUDING
ALL APPENDICES TO THE PLAN, BEFORE DECIDING WHETHER TO VOTE TO ACCEPT THE PLAN.
THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE
DATE HEREOF, AND THE DELIVERY OF THIS DISCLOSURE STATEMENT WILL NOT, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF.
HOLDERS OF CLAIMS AND INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS
DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE.
EACH SUCH HOLDER THEREFORE SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS,
FINANCIAL AND TAX ADVISORS AS TO ANY SUCH MATTERS CONCERNING THE SOLICITATION,
THE PLAN AND THE TRANSACTIONS CONTEMPLATED THEREBY.
3
<PAGE>
TABLE OF CONTENTS
Page
----
I. INTRODUCTION...............................................................1
A. Background.........................................................1
B. Voting.............................................................2
C. Summary of Distributions to Be Made Pursuant to the Plan...........6
II. BACKGROUND...............................................................12
A. Introduction......................................................12
B. Description of the Debtors and Other Subsidiary Interests.........13
C. Description of the Debtors' Business and Operations...............19
D. Description of the Debtors' Debt and Equity Structure.............21
1. Indebtedness under 15% Secured Notes Indenture.................21
2. Indebtedness to HNS............................................22
3. Unsecured .....................................................23
4. Equity Investment..............................................24
E. Events Leading to Chapter 11 Filings..............................24
III. THE CHAPTER 11 CASES....................................................28
A. Continuation of Business After the Filing Date....................28
B. Representation of the Debtors.....................................28
C. Representation of Unsecured Creditors.............................30
D. S-C Rig DIP Financing Facility and Proposed Plan of
Reorganization..................................................30
E. The Debtors' Decision to Wind-Down Their Operations...............33
F. Use of Cash Collateral............................................34
G. Marketing and Sale of the FCC Licenses............................35
1. Initial Marketing Efforts......................................35
2. The Auction Process............................................36
3. The Nextel Purchase Agreement..................................39
H. Disposition of Other Assets.......................................43
1. Sales of Miscellaneous Assets..................................43
2. Dispositions of Foreign and Non-Wholly-Owned Subsidiary
Interests....................................................44
(a) Dissolution of Geonet Communications Canada Inc. and Geotek
Communications Canada Inc................................44
(b) Liquidation of GTIL........................................45
(c) Disposition of Geotek Argentina............................46
(d) Disposition of GMSI........................................46
(e) Disposition of Cumulous Communication......................46
I. Disposition of Unexpired Leases and Executory Contracts...........46
J. Employee Retention Programs.......................................48
1. Key Employee Retention Program.................................48
i
<PAGE>
TABLE OF CONTENTS (cont'd)
2. Supplemental Employee Retention Program........................49
K. Establishment of the Bar Date and Notice Thereof..................51
L. Establishment of the Administrative Bar Date and Notice Thereof...51
M. Preferences and Fraudulent Transfers..............................52
IV. THE PLAN.................................................................55
A. Summary...........................................................55
B. Negotiations Regarding the Plan of Liquidation....................56
C. Classification and Treatment of Claims and Interests..............62
1. General........................................................62
Class 1: Administrative Expense Claims........................64
Class 2: Priority Tax Claims..................................66
Class 3: Other Priority Claims................................67
Class 4: 15% Notes Claims.....................................67
Class 5: HNS Claims...........................................74
Class 6: Other Secured Claims.................................79
Class 7: S-C Rig Senior Loan Claims...........................79
Class 8: General Unsecured Claims.............................81
Class 9: Unsecured 12% Notes Claims...........................82
Class 10: Series H Preferred Stock Interests..................84
Class 11: Series I and K Preferred Stock Interests............84
Class 12: Series L Preferred Stock Interests..................84
Class 13: Series M Preferred Stock Interests..................85
Class 14: Series N Preferred Stock Interests..................85
Class 15: Series O, P, Q, and T Preferred Stock Interests.....85
Class 16: Common Stock Interests...............................85
Class 17: Continuing Subsidiary Stock Interests...............86
Class 18: Non-Continuing Subsidiary Stock Interests............86
D. Distribution of Nextel Stock......................................86
E. Means for Implementation and Execution of Plan....................88
1. Corporate Governance...........................................88
2. Post-Confirmation Budget.......................................89
3. Payment of Employee Retention Programs.........................90
4. Professional Fees and Expenses.................................90
5. Dissolution of Non-Continuing Subsidiaries,
Continuing Subsidiaries and Reorganized Geotek........91
6. D&O Escrow Agreement...........................................91
7. Release of Liens, Contributions and Rights and
Interests with Respect to Cash Collateral......................92
ii
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F. Substantive Consolidation.........................................94
1. Generally......................................................94
2. The Plan Contemplates the Substantive
Consolidation of the Debtors' Estates..........................95
G. Other Provisions of the Plan......................................96
1. Vesting of Assets.............................................96
2. Injunction....................................................97
3. Releases......................................................98
4. Executory Contracts...........................................99
5. Closing of Transfer Ledgers; Cancellation and Surrender of
Instruments; Termination of Certain Agreements.............100
6. Distributions to Holders of Allowed Claims...................103
7. Disputed Claims Reserve......................................105
8. Resolution of Disputed Claims................................106
9. Distributions to Holders of Subsequently Allowed Claims......106
10. Setoff Rights................................................107
11. Unclaimed Property...........................................107
12. Conditions Precedent to Confirmation.........................109
13. Conditions Precedent to the Effective Date...................109
14. Waiver of Conditions to Confirmation of the Plan and
Effective Date.............................................111
15. Retention of Jurisdiction....................................111
16. Revocation, Amendment or Modification of the Plan............113
17. Exculpation..................................................114
18. No Interest..................................................114
19. Termination of the Creditors' Committee......................114
20. Post-Effective Date Fees and Expenses........................115
V. CONFIRMATION OF THE PLAN.................................................116
A. Introduction.....................................................116
B. Feasibility......................................................116
C. Best Interests of Holders of Claims and Holders of Interests.....117
D. Alternatives to Confirmation of the Plan.........................118
1. Liquidation Under Chapter 7...................................118
2. Dismissal of the Chapter 11 Cases.............................119
E. Acceptance.......................................................120
F. Non-Acceptance and Cramdown......................................121
G. Classification of Claims and Interests...........................123
iii
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TABLE OF CONTENTS (cont'd)
VI. CERTAIN FACTORS TO BE CONSIDERED........................................124
A. Overall Risks to the Recoveries by Holders of Claims.............124
1. Risks Associated with Phase I Closing..................124
2. Risks Associated with Phase II Closing.................124
3. Risks Associated with Value of Nextel Stock............125
4. Risks to Holders of Certain Claims.....................125
VII. APPLICABILITY OF FEDERAL AND OTHER SECURITIES LAWS TO THE NEXTEL
STOCK TO BE DISTRIBUTED UNDER THE PLAN.................................126
A. Issuance of Nextel Stock Under the Plan..........................126
B. Transfers of Nextel Stock........................................127
C. Certain Transactions by Stockholders.............................129
VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.............................129
A. Federal Income Tax Consequences to the Debtors...................130
1. Cancellation of Indebtedness Income...........................130
2. Gain Resulting From the Consummation of the Plan..............132
B. Federal Income Tax Consequences to Holders of Claims.............132
1. Effect of Distribution........................................132
2. Tax Consequences of Owning Property Received
With Respect to Claims........................................133
C. Importance of Obtaining Professional Assistance..................133
IX. CONCLUSION..............................................................134
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<PAGE>
DEBTORS' FIRST AMENDED DISCLOSURE STATEMENT
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY CODE
I. INTRODUCTION
A. Background
On June 29, 1998 (the "Filing Date"), Geotek Communications, Inc.
("Geotek") and 72 of its direct and indirect subsidiaries (collectively,
including Geotek, the "Debtors"), each filed a voluntary petition for
reorganization under chapter 11 (the "Chapter 11 Cases"), title 11 of the United
States Code, 11 U.S.C. ss.ss. 101 et seq. (the "Bankruptcy Code"), with the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Chapter 11 Cases have been procedurally consolidated and are being
jointly administered, with the Debtors' managing their businesses in the
ordinary course as debtors in possession subject to the supervision of the
Bankruptcy Court.
The Debtors submit this disclosure statement (the "Disclosure Statement")
pursuant to section 1125 of the Bankruptcy Code in connection with the
solicitation of votes to accept or reject the Debtors' First Amended
Consolidated Plan of Liquidation, dated April 9, 1999, a copy of which is
annexed hereto as Appendix "A" (the "Plan"). Capitalized terms used and not
defined herein shall have the meanings respectively ascribed to them in the Plan
unless the context requires otherwise.
The Bankruptcy Court has approved this Disclosure Statement as containing
"adequate information" in accordance with section 1125(b) of the Bankruptcy Code
to enable a
<PAGE>
hypothetical, reasonable investor typical in each of the Voting Classes (as
defined herein) to make an informed judgment about whether to accept or reject
the Plan.
The Bankruptcy Court will hold a hearing on confirmation of the Plan (the
"Confirmation Hearing") commencing at __:__ _.m., E.D.T., on June __, 1999 at
the United States Bankruptcy Court, Marine Midland Plaza, 824 Market Street, 6th
Floor, Wilmington, Delaware 19801. The Confirmation Hearing may be adjourned
from time to time without further notice other than by announcement in court on
the scheduled date of such hearing. At the Confirmation Hearing, the Bankruptcy
Court will, among other things, (i) determine whether each of the Voting Classes
has accepted the Plan, (ii) hear and determine any objections to the Plan and to
confirmation of the Plan, (iii) determine whether the Plan meets the
confirmation requirements set forth in section 1129 of the Bankruptcy Code, and
(iv) determine whether to confirm the Plan.
B. Voting
All creditors whose Claims are impaired (other than Holders of Disputed
Claims) are entitled to vote on the Plan and are being provided with a ballot
for the acceptance or rejection of the Plan (the "Ballot"). A Claim or Interest
is generally considered "impaired" if the Plan alters, modifies or changes the
legal, contractual or equitable rights of the Holder of the Claim or Interest.
Under the Plan, Class 4 (15% Notes Claims), Class 5 (HNS Claims), Class 6
(Other Secured Claims), Class 7 (S-C Rig Senior Loan Claims), Class 8 (General
Unsecured Claims), and Class 9 (Unsecured 12% Notes Claims) (collectively, the
"Voting Classes") are impaired and the Holders of Claims in such Classes are
entitled to vote on the Plan. Under the
2
<PAGE>
Plan, Class 10 (Series H Preferred Stock Interests), Class 11 (Series I and K
Preferred Stock Interests), Class 12 (Series L Preferred Stock Interests), Class
13 (Series M Preferred Stock Interests), Class 14 (Series N Preferred Stock
Interests), Class 15 (Series O, P, Q, and T Preferred Stock Interests), Class 16
(Common Stock Interests), Class 17 (Continuing Subsidiary Stock Interests) and
Class 18 (Non-Continuing Subsidiary Stock Interests) are impaired and, because
the Holders of Interests in such Classes will neither receive nor retain any
property under the Plan, each of such Classes is technically deemed by law to
have rejected the Plan. Class 1 (Administrative Expense Claims), Class 2
(Priority Tax Claims), and Class 3 (Other Priority Claims) are not impaired. The
Holders of Claims in each of such Classes are therefore not entitled to vote on
the Plan and are deemed to have accepted the Plan because, unless they agree to
receive a different treatment, they will receive payment in full in Cash on the
Effective Date. For a description of the Classes of Claims and Interests and
their treatment under the Plan, see Section IV.C of this Disclosure Statement
("Classification and Treatment of Claims and Interests").
Your vote on the Plan is important. The Bankruptcy Code requires as a
condition to confirmation of a plan of reorganization that each class that is
impaired thereunder vote to accept such plan, unless the "cram down" provisions
of the Bankruptcy Code are employed. See Section V.F of this Disclosure
Statement ("Non-Acceptance and Cram Down").
THE DEBTORS, [THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS (THE
"CREDITORS' COMMITTEE"),] HUGHES NETWORK SYSTEMS, A DIVISION OF HUGHES
ELECTRONICS CORPORATION ("HNS"), S-C RIG
3
<PAGE>
INVESTMENTS III, L.P. ("S-C RIG") [AND WILMINGTON TRUST COMPANY ("WTC"), IN ITS
CAPACITY AS SUCCESSOR TRUSTEE UNDER THAT CERTAIN INDENTURE DATED AS OF JUNE 30,
1995 (AS AMENDED AND SUPPLEMENTED) (THE "15% SECURED NOTES INDENTURE")]
RECOMMEND THAT ALL HOLDERS OF CLAIMS IN THE VOTING CLASSES VOTE TO ACCEPT THE
PLAN. THE DEBTORS BELIEVE THAT MERRILL LYNCH GLOBAL ALLOCATION FUND, INC. AND
MERRILL LYNCH EQUITY/CONVERTIBLE SERIES (GLOBAL ALLOCATION PORTFOLIO)
(COLLECTIVELY, THE "ML FUNDS"), INTEND TO VOTE IN FAVOR OF THE PLAN.
Pursuant to the Bankruptcy Code, in order for a Voting Class to have
accepted the Plan, the affirmative vote of Holders of at least two-thirds in
dollar amount and more than one-half in number of Allowed Claims for which
Ballots are cast in such Voting Class is required.
This Disclosure Statement (and the Appendices hereto, including, without
limitation, the Plan and the Exhibits annexed to the Plan), together with the
accompanying Ballots, the related materials delivered together herewith and a
pre-addressed, postage-paid envelope, are being furnished to Holders of Claims
in the Voting Classes and may not be relied upon or used for any purpose other
than to vote to accept or reject the Plan.
THE BANKRUPTCY COURT HAS FIXED 5:00 P.M. E.D.T. ON MAY __, 1999 (THE
"RECORD DATE") AS THE TIME AND DATE FOR THE DETERMINATION OF WHICH HOLDERS OF
CLAIMS IN THE VOTING CLASSES ARE ENTITLED TO RECEIVE A COPY OF THIS DISCLOSURE
STATEMENT AND ALL OF THE RELATED MATERIALS AND TO VOTE WHETHER TO ACCEPT THE
PLAN.
4
<PAGE>
The Ballots have been specifically designed for the purpose of soliciting
votes on the Plan from each Voting Class. Accordingly, in voting on the Plan,
please use only the Ballot sent to you with this Disclosure Statement. Please
complete and sign your Ballot and return it in the enclosed postage-paid
envelope.
ALL PROPERLY COMPLETED BALLOTS ACTUALLY RECEIVED BY POORMAN-DOUGLAS
CORPORATION, ATTN: GEOTEK CLAIMS AGENT, P.O. BOX 4390, PORTLAND, OREGON
97208-4390 PRIOR TO 5:00 P.M. E.D.T. ON JUNE __, 1999 (THE "BALLOT DATE"), WILL
BE COUNTED FOR PURPOSES OF DETERMINING WHETHER EACH VOTING CLASS HAS ACCEPTED
THE PLAN. The Debtors will prepare and file with the Bankruptcy Court a
certification of the results of the balloting.
AS RELEVANT HEREIN, THE BANKRUPTCY CODE PROVIDES THAT ONLY HOLDERS OF
ALLOWED CLAIMS ARE ENTITLED TO VOTE ON A PLAN. HOLDERS OF DISPUTED CLAIMS ARE
NOT ENTITLED TO VOTE ON THE PLAN UNLESS AND UNTIL (i) THE BANKRUPTCY COURT RULES
ON THE OBJECTIONS TO SUCH CLAIMS, (ii) THE BANKRUPTCY COURT PROVISIONALLY ALLOWS
SUCH CLAIMS SOLELY FOR THE PURPOSE OF VOTING ON THE PLAN, OR (iii) THE DEBTORS
AGREE TO PERMIT HOLDERS OF SUCH CLAIMS TO VOTE ON THE PLAN.
IF A HOLDER HAS AN ALLOWED CLAIM IN MORE THAN ONE VOTING CLASS, SUCH
HOLDER MAY RECEIVE MULTIPLE BALLOTS. IF YOU RECEIVE MORE THAN ONE BALLOT, YOU
SHOULD ASSUME THAT EACH BALLOT IS FOR A SEPARATE CLAIM AND SHOULD COMPLETE AND
RETURN
5
<PAGE>
EACH BALLOT YOU RECEIVE.THE DEBTORS URGE YOU TO COMPLETE AND RETURN ALL BALLOTS.
ANY BALLOTS RECEIVED WHICH DO NOT INDICATE EITHER AN ACCEPTANCE OR
REJECTION OF THE PLAN OR WHICH INDICATE BOTH AN ACCEPTANCE AND REJECTION OF THE
PLAN WILL BE DEEMED TO CONSTITUTE AN ACCEPTANCE OF THE PLAN.
C. Summary of Distributions to Be Made Pursuant to the Plan
The following table sets forth a brief summary of the classification and
treatment of Claims and Interests and the distributions, if any, to be made to
the Holders of such Claims and Interests under the Plan. Detailed information
concerning each Class of Claims and Interests is set forth in Section IV.C of
this Disclosure Statement ("Classification and Treatment of Claims and
Interests").
The information set forth in the table is for convenience of reference
only, and each Holder of a Claim or Interest should refer to the Plan for a full
understanding of the classification and treatment of Claims and Interests
provided under the Plan. The estimates set forth in the following table may
differ from actual distributions by reason of, among other things, variations in
the timing and level of distributable net cash proceeds generated by the
liquidation of the Debtors' estates and other sources following confirmation of
the Plan, the amounts of Allowed Claims, the existence of Disputed Claims, the
market value of the class A common stock (the "Nextel Stock") of Nextel
Communications, Inc. ("Nextel") to be distributed under the Plan, and the costs
of administering and winding up the Chapter 11 Cases. With respect to
Distributions of Nextel Stock, the estimates set forth in the table assume that,
on the Distribution
6
<PAGE>
Date, the Nextel Stock has a value equal to the Market Value (the average
closing price, weighted by volume, of a share of Nextel Stock on the NASDAQ
National Market for the fifteen consecutive trading days ending five trading
days immediately preceding the Phase II Closing Date). With respect to
Distributions of Cash to Holders of Allowed Claims in Classes 4, 7, 8 and 9, the
estimates set forth in the table assume that the Debtors realize $1.5 million
for their ownership interest in Cumulous Communication Company ("Cumulous
Communication"), and no value for their ownership interests in GMSI, Inc.
("GMSI") and Geotek Argentina, S.A. ("Geotek Argentina").
7
<PAGE>
TABLE OF CLASSIFICATION OF CLAIMS AGAINST AND
INTERESTS IN THE DEBTORS AND ALLOCATION
OF DISTRIBUTIONS IN RESPECT THEREOF
<TABLE>
<CAPTION>
Estimated Value
Amount of of Distribution
Estimated Description of Distribution Assuming a Phase
Amount of Assuming a Phase I Closing I Closing and a Description of Distribution
Class Claims and Phase II Closing(1)(2) Phase II Closing(2) Assuming a Phase I Closing
<S> <C> <C> <C> <C>
Class 1 $15.3 Payment of each Allowed 100%(3) Payment of each Allowed
(Administrative million(3) Claim in full in Claim in full in Cash.
Expense Claims) Cash.(3)
Class 2 $__________ Payment of each Allowed 100% Payment of each Allowed
(Priority Tax Claim in full in Cash. Claim in full in Cash.
Claims)
Class 3 $___________ Payment of each Allowed 100% Payment of each Allowed
(Other Priority Claim in full in Cash. Claim in full in Cash.
Claims)
Class 4 $153.5 million (a) Shares of Nextel Stock 84.5%(4) (a) Cash equal to $36,450,000(5)
(15% Notes Claims) having an aggregate Market and (b) FCC Licenses having a
Value or Cash equal to value of $111,475,171.(7)
$111,475,171, (b) Cash
equal to $18,274,829, and
and (c) the Cumulous Net
Proceeds.(4)
Class 5 $42.2 million (a) Shares of Nextel Stock 65.8% (a) Cash equal to $3,900,000 and
(HNS Claims) having an aggregate Market (b) FCC Licenses having a value
Value or Cash equal to $19,363,829.(7) of
$19,363,829 and (b) Cash
equal to $8,386,171.
<CAPTION>
Estimated Estimated Value
Value of of Distribution
Distribution Description of Distribution Assuming
Assuming a Assuming Neither a Phase I Neither a Phase I
Phase I Closing Nor a Phase II Closing Nor a
Class Closing only Closing Phase II Closing
<S> <C> <C> <C>
Class 1 100% Payment of each Allowed 100%
(Administrative Claim in full in Cash.
Expense Claims)
Class 2 100% Payment of each Allowed 100%
(Priority Tax Claim in full in Cash.
Claims)
Class 3 100% Payment of each Allowed 100%
(Other Priority Claim in full in Cash.
Claims)
Class 4 96.4% (a) Cash equal to 96.7%
(15% Notes Claims) $24,292,150(6) and (b)
FCC Licenses having a
value of $124,165,921(7)
Class 5 55.1% (a) Cash equal to $0(6) 51%(8)
(HNS Claims) and (b) FCC Licenses
having a value of
$25,834,079(7)
</TABLE>
8
<PAGE>
TABLE OF CLASSIFICATION OF CLAIMS AGAINST AND
INTERESTS IN THE DEBTORS AND ALLOCATION
OF DISTRIBUTIONS IN RESPECT THEREOF
<TABLE>
<CAPTION>
Estimated Value
Amount of of Distribution
Estimated Description of Distribution Assuming a Phase
Amount of Assuming a Phase I Closing I Closing and a Description of Distribution
Class Claims and Phase II Closing(1)(2) Phase II Closing(2) Assuming a Phase I Closing
<S> <C> <C> <C> <C>
Class 6 $__________ In the sole discretion of the 100% Payment of each Allowed Other
(Other Secured Debtors,(a) transfer of the Secured Claim in full in Cash.
Allowed Other Secured
Claim, or (b) payment of
each Allowed Other Secured
Claim in full Cash.
Class 7 $40.8 million (a) If Class 9 accepts ___% (assuming No distribution.
(S-C Rig Senior the Plan, (i) Class 7's Class 9 accepts
Loan Claims) Unsecured Pro Rata Plan)(9)
Share of the Net
Distributable Cash plus ___% (assuming
(ii)the Class 7 Class 9 rejects
Subordination Payment; Plan)(9)
or (b) if Class 9
rejects the Plan,
(i) Class 7's Unsecured
Pro Rata Share of the
Net Distributable Cash
plus (ii) the Class 9
Distribution Amount.
Class 8 $__ million Class 8's Unsecured Pro ___%(9) No distribution.
(General Rata Share of Net
Unsecured Distributable Cash.
Claims)
Class 9 $78.3 million (a) if Class 9 accepts __% (assuming No distribution.
(Unsecured 12% the Plan, Cash in an Class 9 accepts
Notes Claims) amount equal to the Plan)(9)
Class 9 Distribution
Amount; or (b) if 0% (assuming
Class 9 rejects the Class 9 rejects
Plan, no distribution. Plan)
Class 10 N/A No distribution. 0% No distribution.
(Preferred Series H
Stock Interests)
<CAPTION>
Estimated Estimated Value
Value of of Distribution
Distribution Description of Distribution Assuming
Assuming a Assuming Neither a Phase I Neither a Phase I
Phase I Closing Nor a Phase II Closing Nor a
Class Closing only Closing Phase II Closing
<S> <C> <C> <C>
Class 6 100% Payment of each Allowed Other 100%
(Other Secured Secured Claim in full in Cash.
Class 7 0% No distribution. 0%
(S-C Rig Senior
Loan Claims)
Class 8 0% No distribution. 0%
(General
Unsecured
Claims)
Class 9 0% No distribution. 0%
(Unsecured 12%
Notes Claims)
Class 10 0% No distribution. 0%
(Preferred Series H
Stock Interests)
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Estimated Value
Amount of of Distribution
Estimated Description of Distribution Assuming a Phase
Amount of Assuming a Phase I Closing I Closing and a Description of Distribution
Class Claims and Phase II Closing(1)(2) Phase II Closing(2) Assuming a Phase I Closing
<S> <C> <C> <C> <C>
Class 11 N/A No distribution. 0% No distribution. %
(Preferred Series I
and K Stock
Interests)
Class 12 N/A No distribution. 0% No distribution.
(Preferred Series L
Stock Interests )
Class 13 N/A No distribution. 0% No distribution.
(Preferred Series M
Stock Interests)
Class 14 N/A No distribution. 0% No distribution.
(Preferred Series N
Stock Interests)
Class 15 N/A No distribution. 0% No distribution.
(Preferred Series
O, P, Q and T Stock
Interests)
Class 16 N/A No distribution. 0% No distribution.
(Common Stock
Interests )
Class 17 N/A No distribution. 0% No distribution.
(Continuing
Subsidiary Stock
Interests )
Class 18 N/A No distribution. 0% No distribution.
(Liquidating
Subsidiary Stock
Interests )
<CAPTION>
Estimated Estimated Value
Value of of Distribution
Distribution Description of Distribution Assuming
Assuming a Assuming Neither a Phase I Neither a Phase I
Phase I Closing Nor a Phase II Closing Nor a
Class Closing only Closing Phase II Closing
<S> <C> <C> <C>
Class 11 0% No distribution. 0%
(Preferred Series I
and K Stock
Interests)
Class 12 0% No distribution. 0%
(Preferred Series L
Stock Interests )
Class 13 0% No distribution. 0%
(Preferred Series M
Stock Interests)
Class 14 0% No distribution. 0%
(Preferred Series N
Stock Interests)
Class 15 0% No distribution. 0%
(Preferred Series
O, P, Q and T Stock
Interests)
Class 16 0% No distribution. 0%
(Common Stock
Interests )
Class 17 0% No distribution. 0%
(Continuing
Subsidiary Stock
Interests )
Class 18 0% No distribution. 0%
(Liquidating
Subsidiary Stock
Interests )
</TABLE>
Note 1: Phase I Closing and Phase II Closing are defined in Section III.G.3 of
this Disclosure Statement ("The Nextel Purchase Agreement").
10
<PAGE>
Note 2: Assumes that there is no Nextel Escrow Claim (as defined in Section IV.C
of this Disclosure Statement ("Classification and Treatment of Claims and
Interests")). In the event of a Nextel Escrow Claim, assuming a Phase I Closing
and a Phase II Closing shall have occurred, total Distributions of Cash to
creditors in Classes 4, 5, 7, 8 and 9 may be reduced by up to the Allowed Amount
of the Nextel Escrow Claim.
Note 3: Assumes Allowed Administrative Expense and Priority Claims in the amount
of $15 million.
Note 4: Does not include an amount for the Cumulous Net Proceeds.
Note 5: Assumes 15% Secured Notes Cash Collateral in the amount of $21,628,186
and a 15% Secured Notes Cash Collateral Contribution Amount equal to $5,353,750.
Note 6: Assumes Available Cash in the amount of $2,091,401 and a Net Available
Cash Deficiency Amount of $12,908,599.
Note 7: The value attributed to the FCC Licenses is based on the Debtors'
allocation of the Nextel Purchase Price ($150 million) to the FCC Licenses to be
sold to Nextel as set forth in Schedule 1.01(a)(i) and Schedule 1.01(b)(i) to
the Nextel Purchase Agreement. The actual recovery to Holders of Allowed Claims
in Class 4 and Class 5 may materially vary depending upon the actual proceeds
realized from the sale of the FCC Licenses. Based on the bids received from
Individual License Buyers at the Auction, it is more likely than not that the
FCC Licenses would be sold by WTC (or its nominee or designee) or HNS, as the
case may be, for substantially less than the values attributed to the FCC
Licenses. See Section III.G.2 of this Disclosure Statement ("The Auction
Process"). Unless and until confirmation of the Plan, the allocation of the
Nextel Purchase Price to the FCC Licenses is not binding on creditors and shall
have no precedential value with respect to any allocation of value set forth in
the Plan or this Disclosure Statement.
Note 8: Assumes a Cash payment by HNS in the amount of $4,298,563 in respect of
the HNS Contribution Amount.
Note 9: Assumes Net Distributable Cash in the amount of $12.5 million. This
assumption is predicated upon Administrative Expense Claims ultimately being
Allowed in an aggregate amount equal to or less than $15 million.
THE FOREGOING TABLE IS ONLY A SUMMARY OF DISTRIBUTIONS TO BE MADE UNDER
THE PLAN. PLEASE READ THE PLAN AND DISCLOSURE STATEMENT IN THEIR ENTIRETIES,
INCLUDING THE ANNEXED EXHIBITS, BEFORE YOU VOTE ON THE PLAN.
11
<PAGE>
II. BACKGROUND
A. Introduction
As of the Filing Date, Geotek, together with its eighty-five (85) domestic
and foreign subsidiaries (collectively, the "Company"), was engaged in the
business of developing and selling in the United States and internationally
certain state-of-the-art wireless communications systems and services, based on
its proprietary frequency hopping multiple access (i.e., FHMA(R)) technology.
However, as discussed more fully below in Section III.E of this Disclosure
Statement ("The Debtors' Decision to Wind-Down Their Operations"), the Debtors,
unable to muster creditor support for any plan of reorganization which
contemplated a continuation of the Debtors as a going concern, decided in
October 1998 to virtually cease their operations and to liquidate their assets.
The Debtors own one hundred ninety-one (191) Federal
Communications Commission ("FCC") 900 Mhz licenses (consisting of 188 Major
Trading Areas and 3 Designated Filing Area licenses) (collectively, the "FCC
Licenses") covering the operation of specialized mobile radio systems in over
forty (40) U.S. markets and, as of the Filing Date, were the largest holder of
900 Mhz frequency in the United States. The FCC Licenses constitute the most
valuable assets of the Debtors' estates and the primary source of recovery for
the creditors, and, as such, after ceasing their operations, the Debtors focused
their efforts on marketing the FCC Licenses. After extensive marketing of the
FCC Licenses, see Section III.G.2 of this Disclosure Statement ("The Auction
Process"), the Debtors determined to move forward with a bid received from
12
<PAGE>
Nextel, and, on February 16, 1999, the Bankruptcy Court entered an order (the
"Sale Order") authorizing the sale of the FCC Licenses to Nextel, subject to the
terms of that certain purchase agreement between Geotek and Nextel dated
February 16, 1999, as amended (the "Nextel Purchase Agreement"). The sale of the
Debtors' FCC Licenses contemplated by the Nextel Purchase Agreement has not yet
closed, and, as discussed below in Section III.G.3 of this Disclosure Statement
("The Nextel Purchase Agreement"), remains subject to a number of contingencies.
B. Description of the Debtors and Other Subsidiary Interests
The seventy-three (73) Debtors are comprised of the following
entities:
o Geotek f/k/a Geotek Industries, Inc., a Delaware corporation, is the
parent company and is headquartered at 102 Chestnut Ridge Road, Montvale,
New Jersey 07645.
o Geotek USA f/k/a PowerSpectrum, Inc., a Delaware corporation and a direct
subsidiary of Geotek, was the Company's principal domestic operating
entity.
o Geotek U.S. Networks, Inc. ("Geotek U.S. Networks"), a direct subsidiary
of Geotek, is a Delaware holding company which is the licensee in respect
of sixty-eight (68) FCC Licenses. The common stock of Geotek U.S. Networks
has been pledged as collateral to WTC, as collateral agent under the
pledge agreement between Geotek and IBJ Whitehall Bank & Trust Company
("IBJ Whitehall") dated as of July 6, 1995 (as amended) relating to the
15% Secured Notes Indenture providing for up to $227 million (face amount)
of 15% senior secured discount notes (the "15% Secured
13
<PAGE>
Notes").(1) Approximately fifty-nine (59) of the Debtors have guaranteed
Geotek's obligations under the 15% Secured Notes Indenture.
o Geotek Financing Corporation ("Geotek Financing"), a Delaware corporation
and direct subsidiary of Geotek, is the borrower under (i) that certain
loan agreement dated as of December 21, 1995 (the "HNS License Loan
Agreement") with HNS, as lender, and Geotek, as guarantor, and (ii) that
certain Vendor Credit Financing Agreement dated as of September 27, 1996
(the "HNS Vendor Credit Financing Agreement") and related agreements with
HNS, pursuant to which Geotek Financing purchased certain base station
equipment manufactured and partially financed by HNS.
o Geotek License Holdings, Inc. ("Geotek License Holdings"), a wholly-owned
subsidiary of Geotek Financing, is a Delaware holding company which is the
licensee in respect of fifty-eight (58) FCC Licenses. The common stock of
Geotek License Holdings has been pledged as collateral to HNS, (i) as
collateral agent under the pledge agreement among Geotek, Geotek Financing
and HNS, dated as of December 21, 1995 (as amended) relating to the HNS
License Loan Agreement, and (ii) as lender under the HNS Vendor Credit
Financing Agreement among Geotek, Geotek Financing and HNS dated as of
September 27, 1996.
- ----------
(1) On March 4, 1999, WTC was appointed as trustee under the 15% Secured Notes
Indenture, in replacement of IBJ Whitehall.
14
<PAGE>
o Geotek Technologies, Inc., a Delaware corporation and direct subsidiary of
Geotek, was the Company's primary equipment entity. It provided support
for the Company's FHMA(R) networks (the "Networks"), and sold FHMA(R)
equipment internationally.
o Geotek America, Inc., a Delaware corporation and direct subsidiary of
Geotek, leased IMACS and routers, equipment which had been used for the
servicing of the Debtors' customers.
o Geotek Asia, Inc., a Delaware corporation and direct subsidiary of Geotek,
owns a 50% interest in ANAM Geonet Co., Ltd. ("ANAM Geonet"), a Korean
entity that monitors the Company's approximate 21% interest in ANAM
Telecommunications Corporation, Ltd. ("ANAM Telecom"), which operates an
FHMA(R) network in Korea.
o Geotek GmbH Holding Corporation ("Geotek GmbH"), a Delaware corporation
and direct subsidiary of Geotek, formerly owned the Company's interests in
a German joint venture ("Terrafon") and in a wholly-owned subsidiary in
the United Kingdom, known as National Band Three Ltd. ("NB3"), each of
which was sold pursuant to December 1997 agreements to Telesystems
International Wireless, Inc and its affiliates.
o Geotek Data, Inc., a Delaware corporation and direct subsidiary of Geotek,
was the Company's principal software application development entity.
15
<PAGE>
o Geotek Services, Inc. f/k/a Geotek USA, Inc., a Delaware corporation and
direct subsidiary of Geotek, is the entity that handles payroll for the
Company.
o Cumulous Holding Corp. ("Cumulous Holding"), a Delaware corporation and
direct subsidiary of Geotek, holds a 25% ownership interest in Cumulous
Communication, a limited liability company which operates a mobile radio
network in California.
o Gelico, Inc. ("Gelico"), a Delaware corporation, is a direct subsidiary of
Geotek which is the licensee in respect of sixty-four (64) FCC Licenses.
MacDermott Communications, Inc. ("MacDermott Communications"), a Texas
corporation, is a direct subsidiary of Geotek which is the licensee in
respect of one (1) FCC License. As of the Filing Date, the common stock of
Gelico and MacDermott Communications was unpledged. As discussed below in
Section III.D of this Disclosure Statement ("S-C Rig DIP Financing
Facility and Proposed Plan of Reorganization") and Section III.F of this
Disclosure Statement ("Use of Cash Collateral"), the Debtors' interests in
Gelico were pledged in connection with the Debtors' debtor-in-possession
financing facility and in connection with the Debtors' use of cash
collateral.
o Mobile Message Service of Texas, Inc., a New York corporation, and Ansa
Communications, Inc., a California corporation, are direct
16
<PAGE>
subsidiaries of Geotek which were formerly licensees in respect of certain
FCC Licenses.
o U.S.I. Venture Corp., Geotek Subsidiary Industries Inc, and Geotek
Acquisition Corp., Delaware corporations and direct subsidiaries of
Geotek, owned the Company's interest in Bogen Communications, Inc. prior
to August 1995 when their interest therein was sold to Bogen
Communications International, Inc. f/k/a European Gateway Acquisition
Corporation ("BCI"), a non-wholly owned subsidiary of Geotek.(2)
o PowerSpectrum of Atlanta, Inc., PowerSpectrum of Boston, Inc.,
PowerSpectrum of Chicago, Inc., PowerSpectrum of Dallas, Inc.,
PowerSpectrum of D.C., Inc., PowerSpectrum of Denver, Inc., PowerSpectrum
of Jacksonville, Inc., PowerSpectrum of Miami, Inc., PowerSpectrum of New
York City, Inc., PowerSpectrum of Orlando, Inc., PowerSpectrum of Phoenix,
Inc., PowerSpectrum of Philadelphia, Inc., PowerSpectrum of San Francisco,
Inc., and PowerSpectrum of Tampa, Inc. are each Delaware corporations,
direct subsidiaries of Geotek USA, and, as of the Filing Date, were
lessees of sites and/or offices in the specific market in which each such
entity operated.
o The following Debtors did not hold, as of the Filing Date, and have not
since the Filing Date, held any assets, and, except where otherwise
- ----------
(2) In November 1997, the Company's 64% interest in BCI was sold for $18.5
million.
17
<PAGE>
indicated, are Delaware corporations and direct subsidiaries of Geotek:
CLW Communications, Inc. (a Texas corporation), Gelico of Chicago, Inc. (a
direct subsidiary of Gelico Inc.), General Photonics Holding Corporation,
Geotek Holdings, Inc. (f/k/a Geotek USA, Inc.), Geotek International
Networks, Inc., Geotek of Atlanta, Inc., Geotek of Boston, Inc., Geotek of
Chicago, Inc., Geotek of Dallas, Inc., Geotek of Houston, Inc., Geotek of
Miami, Inc., Geotek of New York, Inc., Geotek of Orlando, Inc., Geotek of
Philadelphia, Inc., Geotek of Tampa, Inc., Geotek of Washington D.C.,
Inc., Geopower Inc., Laser Acquisition Corporation, Metro Net Systems,
Inc. (f/k/a Geotek MNS, Inc.) (a New York corporation), M.I.S. Holdings
Acquisition Corp., Oakhill Communications, Inc. (a Texas corporation),
Oram USA, Inc., Patlex International Corporation, Patlex of Delaware,
Inc., PowerSpectrum Microwave, Inc. and Reshef USA, Inc.
o The following Debtors did not hold, as of the Filing Date, and have not,
since the Filing Date, held any assets, and are Delaware corporations and
direct subsidiaries of Geotek USA: PowerSpectrum of Buffalo, Inc.,
PowerSpectrum of Charlotte, Inc., PowerSpectrum of Cincinnati, Inc.,
PowerSpectrum of Greensboro, Inc., PowerSpectrum of Hartford, Inc.,
PowerSpectrum of Indianapolis, Inc., PowerSpectrum of Kansas City, Inc.,
PowerSpectrum of Memphis, Inc., PowerSpectrum of Minneapolis, Inc.,
PowerSpectrum of Nashville, Inc., PowerSpectrum of New Orleans,
18
<PAGE>
Inc., PowerSpectrum of Rochester, Inc., PowerSpectrum of Salt Lake City,
Inc., and PowerSpectrum of Seattle, Inc.
Geotek Technologies Israel (1992) Ltd. (f/k/a PowerSpectrum Technologies
Ltd.) ("GTIL") is a majority-owned (97%) Israeli subsidiary of Geotek and Geotek
USA which had been granted, pursuant to that certain license agreement dated
July 2, 1992 with, among others, Rafael Armament Development Authority
("Rafael"), a quasi-governmental unit of the Israeli military, the irrevocable,
exclusive, world-wide rights (outside of Israel) to commercialize for the
non-military market an integrated voice and data system based on FHMA(R)
technology developed by Rafael. GTIL, in turn, licensed to Geotek USA the right
to market and distribute systems and services based on the FHMA(R) technology.
Pursuant to a motion filed by Rafael, in accordance with Israeli insolvency law,
a temporary receiver of GTIL was appointed in October 1998. Thereafter, GTIL's
operations ceased and its assets liquidated.
In addition to GTIL, the Company also has equity interests in several
other foreign non-Debtor corporations, including, among others, (i) an
approximate 80% ownership interest in GMSI, a Canadian entity, (ii) an
approximate 50% ownership interest in ANAM Geonet, and an approximate 21%
ownership interest in ANAM Telecom, Korean entities, and (iii) an approximate
70% ownership interest in Geotek Argentina, an Argentinian entity.
C. Description of the Debtors' Business and Operations
In the United States, Geotek, through its various domestic subsidiaries,
offered its high-quality integrated digital voice and data wireless
communications services, based on its proprietary FHMA(R) technology, in eleven
(11) major markets -- Baltimore/Washington, D.C., Boston, Dallas, Houston,
Miami, New York, Orlando, Philadelphia, Phoenix, San Antonio and
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Tampa. As a start-up enterprise, the Company since 1992 devoted the bulk of its
resources to developing its proprietary technology, building a nationwide
infrastructure and establishing a customer base which, as of the Filing Date,
was approximately 10,000 subscribers.
The heart of the Company's business was the proprietary Driver
Logistics(TM) System, a unique integrated digital voice and data wireless
communications network developed by the Company for businesses with a mobile
workforce. The Driver Logistics(TM) System -- an integrated system that includes
hardware, software applications, network usage, installation, training, and
maintenance -- allowed users to increase the productivity of drivers in the
field by organizing work schedules, assigning jobs to mobile workers, tracking
work status and completion, sending and receiving directions, locating stolen
and lost vehicles, and verifying transactions and communications among mobile
work groups.
The Driver Logistics(TM) System operated over the Networks which the
Company had developed based on its FHMA(R) technology. A primary benefit of the
FHMA(R) technology is spectral efficiency in that the technology is designed to
allow a wireless network to support more subscribers on a given frequency.
Because licenses to operate on a radio frequency are costly, FHMA(R) is designed
to allow for the initial construction of a wireless network at a lower capital
cost than competing wireless technologies. The process of developing the
technology into a fully operational commercial network was a long and intensive
one requiring investment of significant resources and years of coordinated
effort among leading U.S. and Israeli wireless radio technology experts.
As of March 31, 1998, the Company reported unaudited balance sheet assets
of approximately $351 million and unaudited balance sheet liabilities including
redeemable
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preferred stock of approximately $424 million. The Company generated net
revenues of approximately $65 million and a loss from continuing operations of
$223.9 million for its fiscal year ended December 31, 1997, and net revenues of
approximately $7 million, and a loss from continuing operations before gain on
sale of subsidiary was approximately $51.7 million during the first three months
of fiscal year 1998. The Company has several hundred creditors and several
thousand equity security holders.
As of the Filing Date, the Company had approximately 450 employees,
approximately 130 of whom worked at Geotek's headquarters in Montvale, New
Jersey, 195 of whom worked in other locations throughout the United States and
125 of whom worked internationally. Except for five employees who, as of the
Confirmation Date, will remain to oversee the wind-down and liquidation of the
estates, and maintain minimal operations of the systems in the markets in which
the Debtors initiated operations, the Debtors will have terminated all of their
employees.
D. Description of the Debtors' Debt and Equity Structure
As of the Filing Date, the Debtors had approximately $194.8
million outstanding secured debt and in excess of $170 million outstanding
unsecured debt.
1. Indebtedness under 15% Secured Notes Indenture
The Debtors owed, as of the Filing Date, approximately $153.5 million in
accreted value to Holders of the 15% Secured Notes issued in connection with the
15% Secured Notes Indenture. The 15% Secured Notes are secured principally by a
pledge of the common stock of Geotek U.S. Networks which is the licensee in
respect of sixty-eight (68) FCC Licenses and had owned certain Network
equipment. In addition, approximately fifty-nine (59) of the
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Debtors, including
Geotek License Holdings and Gelico, are guarantors under the 15% Secured Notes
Indenture. The ML Funds and S-C Rig, respectively, currently hold approximately
[52]% and [21]% of the 15% Secured Notes. WTC is currently the trustee of the
15% Secured Notes Indenture, and replaced the previous trustee, IBJ Whitehall,
as of March 4, 1999.
2. Indebtedness to HNS
Geotek Financing, as borrower, and Geotek, as guarantor, are also parties
to two secured arrangements with HNS. Prior to any rights of offset, and
exclusive of pre-petition accrued interest and expenses, Geotek Financing owes
HNS $24.5 million pursuant to the HNS License Loan Agreement. This obligation is
secured by a pledge of (i) a promissory note dated as of September 27, 1996
executed by Geotek License Holdings in favor of Geotek Financing in the original
principal amount of $24.5 million (the "Intercompany Promissory Note"), and (ii)
the common stock of Geotek License Holdings, the licensee in respect of
fifty-eight (58) FCC Licenses. Although Geotek License Holdings is a guarantor
under the 15% Secured Notes Indenture, by agreement between HNS and the Holders
of the 15% Secured Notes, such guaranty (the "GLH Guaranty") is subordinate to
Geotek Financing's $24.5 million intercompany claim against Geotek License
Holdings pursuant to the Intercompany Promissory Note.
In addition, pursuant to the HNS Vendor Credit Financing Agreement and a
related manufacturing agreement between Geotek and HNS, HNS agreed to
manufacture, sell, and finance the purchase price of certain FHMA(R)
infrastructure equipment. To secure its claims under the HNS Vendor Credit
Financing Agreement and related agreements, HNS was granted thereunder (i) a
purchase money security interest in the infrastructure equipment it manufactured
and sold to Geotek, and (ii) a pledge of the common stock of Geotek License
Holdings, which
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pledge ranks pari passu with the pledge of Geotek License Holdings' common stock
granted in connection with the HNS License Loan Agreement. Geotek License
Holdings is not an obligor under the HNS Vendor Credit Financing Agreement.
Prior to any rights of offset, and exclusive of pre-petition accrued interest
and expenses, HNS is owed approximately $17.6 million under the HNS Vendor
Credit Financing Agreement.
3. Unsecured Indebtedness
S-C Rig, an investment group affiliated with Soros Trust Company and The
Chatterjee Group ("Chatterjee"), is the lender under a Senior Loan Agreement
dated April 4, 1996 (the "S-C Rig Loan Agreement") with Geotek, as borrower,
pursuant to which S-C Rig loaned Geotek $40 million. Accordingly, S-C Rig has a
$40 million senior unsecured claim.
Geotek also owes approximately $78 million to Holders of the 12% Senior
Subordinated Convertible Notes (the "Unsecured 12% Notes") issued in connection
with that certain Indenture dated as of March 5, 1996 (the "Unsecured 12% Notes
Indenture") with The Bank of New York, as trustee. Pursuant to the Unsecured 12%
Notes Indenture, the Claims of the Holders of the Unsecured 12% Notes are
subordinated to the Claims of (i) the Holders of the 15% Secured Notes under the
15% Secured Notes Indenture, (ii) HNS under the HNS License Loan Agreement and
the HNS Vendor Credit Financing Agreement, and (iii) S-C Rig under the S-C Rig
Loan Agreement. As of the Filing Date, the ML Funds held approximately 33% of
the Unsecured 12% Notes.(1)
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(1) [Upon information and belief, subsequent to the Filing Date, the ML Funds
sold their Unsecured 12% Notes.]
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The Debtors had scheduled in excess of $50 million in outstanding
unsecured trade debt, including approximately $21 million owed to Rafael, $10
million to HNS, $4 million to Mitsubishi Consumer Electronics of America and $2
million to IBM Corporation. The Debtors have received proofs of unsecured Claims
in excess of $300 million.
4. Equity Investment
There are more than 200 million outstanding shares of Geotek common stock
("Geotek Common Stock"). The Geotek Common Stock has been delisted from the
NASDAQ National Market and the Pacific Stock Exchange. Geotek also has numerous
series of preferred stock outstanding, totaling in excess of one million
outstanding shares held collectively by approximately 45 holders, including,
among others, Chatterjee and other affiliates of the Soros Trust Company, and
entities affiliated with the Charles R. Bronfman Trust.
E. Events Leading to Chapter 11 Filings
Over the last several years prior to the Filing Date, the Debtors had been
taking necessary steps to develop their technology and build the necessary
infrastructure to enable them ultimately to compete in more than forty (40)
different markets throughout the United States in the highly capital-intensive
wireless communications industry. Primarily, this involved the development and
deployment of digital wireless systems, including network infrastructure and
mobile radio terminals, and the acquisition of FCC licenses in each of the
target markets. As of March 31, 1998, the Debtors had completed the initial
build-out of base stations for their wireless network in 11 markets, and had
acquired the control of 900 Mhz frequencies with approximately 2,170 channels
throughout its over 40 target markets.
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The business of building a wireless network and providing services is
highly capital intensive. Thus, while the Debtors had always planned on raising,
and did raise, millions of dollars to support their business plan, certain
unforeseen events contributed to the Debtors' state of financial distress. In
early 1996, after several years of building out tens of millions of dollars of
necessary infrastructure, the Debtors began rolling out voice-only services to a
number of markets. When several months later, in October 1996, the Debtors began
rolling out their integrated voice and data services, various technical issues
surfaced which hampered the voice and data integration. Consequently, at the end
of 1996, the Debtors devoted significant resources to rectify the technical
issues. By the end of the first quarter in 1997, with many of the technical
issues addressed, the Debtors refocused their efforts on building a sales engine
and rolling out their integrated services.
In 1998, the Debtors' cash flow became severely affected by the cumulative
effects of the years of funding the development, deployment and rollout of their
system and services. Those effects coincided with further cash needs associated
with marketing and sales, expanding network coverage, providing technical and
operational support and continuing to develop new products such as portable
units for the Debtors' customers.
At the same time, the Debtors' ability to raise capital was affected by
the above-described events as well as the presence in its capital structure of
"floating rate" preferred stock instruments held by a group of hedge funds.
These instruments caused dilution and a threat of continuing dilution: The terms
of these instruments allowed the holders thereof to convert their preferred
shares to Geotek Common Stock at a price equal to a discount to the market price
of the Geotek Common Stock at the time of conversion. The floating aspect of the
conversion price
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in these instruments could result in the issuance of large and indeterminate
numbers of shares and the decline in the price of the Geotek Common Stock. In
fact, these instruments did result in the issuance of significant amounts of
Geotek Common Stock. In February 1998, in an effort to stabilize the Debtors'
capital structure, Geotek consummated a transaction with six of the seven hedge
funds to exchange their "floating rate" preferred shares into preferred shares
with a fixed conversion price. Nonetheless, despite its efforts, the Debtors
continued to experience difficulties raising capital.
The Debtors made an effort to address their cash needs through certain
asset sales in late 1997. On November 26, 1997, Geotek sold its 64% interest in
BCI for $18.5 million in cash, and, on December 18, 1997, Geotek entered into
two definitive sales agreements with Telesystems International Wireless, Inc.
and its affiliates providing for the sale of Geotek's Terrafon joint venture
interests in Germany and its wholly owned subsidiary in the United Kingdom, NB3,
for approximately $3.8 million and $82 million, respectively.(2) The sales of
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(2) Approximately five (5%) percent of the $82 million purchase price for
NB3 (the "NB3 Escrow Proceeds"), i.e., approximately $4.1 million,
which had been held in escrow by counsel for the buyer to satisfy
potential indemnity obligations, was released from escrow in August
1998. The ML Funds, the majority holder of the 15% Secured Notes, have
asserted, and the Debtors dispute, that the NB3 Escrow Proceeds
constitute cash collateral securing the Claims of the Holders of the
15% Secured Notes. Pursuant to the Terms and Conditions and the Amended
Terms and Conditions (each as defined below), the Debtors have agreed,
that until the Cash Collateral Account (as defined below) is fully
replenished, to maintain the NB3 Escrow Proceeds in a segregated
account and not to use such proceeds without either (i) the consent of
WTC or the holders of more than fifty (50%) percent of the aggregate
principal amount at maturity of the 15% Secured Notes outstanding at
such time, or (ii) an order of the Bankruptcy Court permitting such
use.
In accordance with the Terrafon sale agreement, approximately $270,000
of the purchase price for Terrafon is currently being held in escrow by
counsel for the buyer to satisfy
(continued...)
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Terrafon and NB3 closed in February 1998. In accordance with amendments to the
15% Secured Notes Indenture effective at the time of the sales, the use of a
portion of the proceeds from certain of these sales was restricted. Geotek was
also required to tender back approximately $16 million of the sales proceeds to
the Holders of the 15% Secured Notes.
Despite these sales, the Debtors continued to lack adequate working
capital throughout 1998 to effectively develop and operate their business and to
realize the economic potential of its substantial infrastructure. As a result,
for several months prior to the Filing Date, the Debtors participated in
extensive negotiations with three of its principal creditors in an effort to
achieve a non-judicial restructuring of the Debtors' liabilities and to free
certain restricted assets and/or to obtain an infusion of financing for use as
ongoing working capital. It ultimately became apparent to the Debtors that a
chapter 11 filing would provide the most viable means of obtaining working
capital and of achieving (i) a restructuring of the Debtors' obligations, (ii)
entry into a strategic partnership and/or (iii) a possible sale of the business.
The Debtors therefore decided, after considering all of their options and
discussing the situation with their professional advisors and principal
creditors, to voluntarily seek bankruptcy protection.
As discussed in further detail in Section III.D of this Disclosure
Statement ("S-C Rig DIP Financing Facility and Proposed Plan of
Reorganization"), to provide the Debtors with sufficient financing to commence
the chapter 11 process, S-C Rig agreed to provide the Debtors with $10 million
in debtor-in-possession financing.
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(2) (...continued)
potential indemnity obligations and will be released in May 1999.
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On the Filing Date, the Debtors filed voluntary petitions for relief under
chapter 11 of the Bankruptcy Code. The Debtors have continued in the possession
of their properties and the management of their assets as debtors in possession
pursuant to sections 1107 and 1108 of the Bankruptcy Code. No trustee or
examiner has been appointed in any of these Chapter 11 Cases.
III. THE CHAPTER 11 CASES
A. Continuation of Business After the Filing Date
Under the Bankruptcy Code, the Debtors were authorized to continue to
operate their businesses in the ordinary course. On the Filing Date, the Debtors
obtained a number of "first-day" orders from the Bankruptcy Court granting
various forms of relief to the Debtors, including, among others, (i) an order
approving the joint administration of the Chapter 11 Cases, (ii) orders
approving the Debtors' retention of various professionals, (iii) an order
approving a $10 million debtor-in-possession financing facility from S-C Rig,
(iv) an order authorizing the Debtors to pay to their employees all outstanding
wages and benefits and other forms of consideration, (v) an order approving the
use of a consolidated cash management system, and (vi) an order approving the
implementation of a key employee retention program.
B. Representation of the Debtors
The Debtors retained and have been represented in the Chapter 11 Cases by
(i) the law firms of Kaye, Scholer, Fierman, Hays & Handler, LLP, located at 425
Park Avenue, New York, New York 10022, and Young Conaway Stargatt & Taylor, LLP,
located at Rodney Square North, 11th Floor, Wilmington, Delaware 19801, (ii) the
financial consulting firm of
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Rothschild, Inc., located at 1251 Avenue of the Americas, New York, New York
10020, and (iii) the accounting firm of PriceWaterhouse Coopers, located at 1301
Avenue of the Americas, New York, New York 10019. Gardner, Carton & Douglas,
located at 1301 K Street, N.W., Suite 900, East Tower, Washington, D.C. 20005
has served as the Debtors' FCC counsel. In November 1998, the Debtors retained
the services of Richard Krants, one of their directors, to assist in the FCC
License marketing process.(3)
As required by the DIP Financing Agreement (as defined in Section III.D of
this Disclosure Statement ("S-C Rig DIP Financing Facility and Proposed Plan of
Reorganization")), the Debtors engaged the services of a crisis manager and an
outside management consultant to supervise and/or monitor various aspects of
their reorganization effort and business operations. Specifically, the Debtors
retained (i) Zolfo, Cooper Management, LLC ("Zolfo Cooper"), located at 292
Madison Avenue, New York, New York 10017, as crisis manager, with Stephen
Marotta thereof to serve as the acting Chief Executive Officer of Geotek, and
(ii) Renaissance Worldwide, Inc. ("Renaissance"), located at 200 Berkeley
Street, Boston, Massachusetts 02116-5034, as communications strategy specialist
to prepare and develop a business plan.
Stephen Marotta served as Chief Executive Officer until his resignation on
January 31, 1999, and at which time the Company terminated Zolfo Cooper as
crisis manager. During his tenure, Mr. Marotta supervised the Debtors' initial
efforts to develop a business plan, to negotiate a consensual plan of
reorganization and to pursue a strategic investor or purchaser of
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(3) Additionally, the Debtors have been represented in connection with
GTIL's Israeli insolvency proceeding by the law firm of Doren Cohen
and David Cohen, located at 14 Abba Hillel Blvd., Ramat Gan 525D6,
Israel.
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substantially all of the Debtors' assets. After the cessation of operations and
until January 31, 1999, Mr. Marotta and Zolfo Cooper directed the Debtors'
wind-down and liquidation of their estates.
C. Representation of Unsecured Creditors
Pursuant to section 1102(a) of the Bankruptcy Code, following the
commencement of a chapter 11 case, the United States Trustee is empowered to
appoint a committee of a debtor's largest unsecured creditors. On July 10, 1998,
an official committee of unsecured creditors (the "Creditors' Committee") was
appointed to represent the interests of all unsecured creditors in the Chapter
11 Cases. The Creditors' Committee retained and has been represented in the
Chapter 11 Cases by (i) the law firms of Baker & McKenzie, located at 805 Third
Avenue, New York, New York 10022 and at The Wells Fargo Plaza 12th Floor, 101
West Broadway, San Diego, California 92101 and Rosenthal, Monhait, Gross &
Goddess, P.A., located at Mellon Bank Center, Suite 1401, Wilmington, Delaware
19899-1070, and (ii) the financial advisory firm of CIBC Oppenheimer, located at
425 Lexington Avenue, New York, New York 10017. A list of the current members of
the Creditors' Committee is set forth on Appendix "B" annexed hereto.
D. S-C Rig DIP Financing Facility and Proposed Plan of Reorganization
As of the Filing Date, the Debtors had minimal funds with which to operate
their businesses, and therefore were wholly dependant upon obtaining immediate
Bankruptcy Court approval of a debtor-in-possession financing facility with
which to preserve the prospects for a successful reorganization or to afford
them sufficient time to find a strategic investor in, or purchaser of, their
businesses and assets.
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As a result of exhaustive negotiations immediately prior to the Filing
Date, the Debtors agreed to enter into a $10 million debtor-in-possession
financing agreement with S-C Rig (the "DIP Financing Agreement").(4) The Debtors
estimated that this debtor-in-possession financing facility (the "DIP
Financing") would provide them with sufficient working capital to sustain a
"brown-out" (i.e., maintaining essential services to customers in each of their
markets, but not undertaking efforts to expand their customer base) for not more
than 80-85 days.
As part of the DIP Financing, S-C Rig proposed a term sheet (the "S-C Rig
Term Sheet"), which provided an outline for a proposed chapter 11 plan of
reorganization of the Debtors premised upon, among other things, a rights
offering underwritten by S-C Rig (or an affiliate thereof). On or about July 21,
1998, the Debtors filed the Debtors' Consolidated Plan of Reorganization (the
"Old Plan of Reorganization") and related disclosure statement based upon the
S-C Rig Term Sheet.
The S-C Rig Term Sheet set forth the proposed classification and treatment
of the claims and interests of the principal creditor and equity constituencies,
and contemplated that, subject to certain terms and conditions, S-C Rig would
underwrite a $20 million rights offering (the "Rights Offering"). Although the
DIP Financing Agreement committed the Debtors to
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(4) Purnendu Chatterjee, a principal of Chatterjee (which is affiliated
with S-C Rig), was a member of Geotek's Board of Directors until his
resignation on June 11, 1998. Moreover, S-C Rig holds approximately 21%
of the 15% Secured Notes, and S-C Rig is a creditor of Geotek pursuant
to the S-C Rig Loan Agreement. Although these relationships may not
technically have rendered S-C Rig an "insider" under section 101(31)(B)
of the Bankruptcy Code, the Debtors fully disclosed to the Bankruptcy
Court that the relationships did and do exist. Notwithstanding such
relationships, the negotiations with S-C Rig were at all times
conducted intensively and at arm's-length, and resulted in the largest
and best financing facility available under the circumstances.
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attempt a restructuring in accordance with the S-C Rig Term Sheet, the DIP
Financing Agreement was and is entirely consistent with the Debtors' fulfillment
of their fiduciary duty to achieve the best results possible for their estate.
Indeed, the S-C Rig Term Sheet and DIP Financing Agreement expressly contained a
"fiduciary out" provision that enabled the Debtors to pursue other restructuring
proposals or third-party transactions, subject to a break-up fee and the
satisfaction of an established minimum equity investment.
On the Filing Date, the Bankruptcy Court issued an order approving the
borrowing of up to $7 million on an interim basis, pending a hearing on final
approval of the DIP Financing Agreement. On July 23, 1998, the Bankruptcy Court
entered a final order (the "Final DIP Order") approving the DIP Financing
Agreement. Thus, as a result of the DIP Financing Agreement, up to $10 million
was made available to the Debtors, which enabled the Debtors to operate their
businesses and pursue a reorganization or other transaction for up to three
months. Pursuant to the DIP Financing Agreement and the Final DIP Order, S-C Rig
was granted (i) first priority liens upon and security interests in all of the
Debtors' and their wholly-owned subsidiaries' unencumbered assets, including,
without limitation, the common stock of Gelico, (ii) second priority liens upon
and security interests in all of the Debtors' and their wholly-owned
subsidiaries' assets that are subject to permitted liens (as described in the
DIP Financing Agreement), and (iii) subject to a "carve-out" for professional
fees and fees or charges assessed against the estates of the Debtors under
section 1930 of chapter 123 of title 28 of the United States Code (the "US
Trustee Fees") in an aggregate amount not to exceed $500,000 (collectively, the
"Carve-Out"), a superpriority administrative claim allowable under section
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503(b) of the Bankruptcy Code having priority over any and all administrative
expenses of the kind specified in sections 503(b), 506(c), 507(b) and 726(b) of
the Bankruptcy Code.
On or about October 7, 1998, using proceeds received in connection with an
exchange of licenses with Paging Network of America, Inc. ("PageNet"),(5) the
Debtors repaid S-C Rig $7 million. The Debtors estimate that, as of May 14,
1999, inclusive of post-petition interest and other applicable charges, they
will owe $3.44 million to S-C Rig pursuant to the DIP Financing Agreement.
E. The Debtors' Decision to Wind-Down Their Operations
After the filing of the Old Plan of Reorganization, the Debtors engaged in
negotiations with their principal creditor constituencies in an effort to obtain
support for the Old Plan of Reorganization. Despite these extensive efforts, the
Debtors were unable to obtain sufficient creditor support for the Old Plan of
Reorganization and the business plan upon which the Old Plan of Reorganization
was premised. In addition, the Debtors were unable to obtain sufficient creditor
support for the proposed plan which contemplated a continuation of their
business as a going concern.
Faced with the upcoming exhaustion of the DIP Financing and their
remaining capital, the Debtors attempted to obtain additional financing from its
principal creditors. In view of the Debtors' inability to obtain support for a
plan contemplating a continuation of the Debtors as a going concern, and in view
of the Debtors' inability to obtain the funds necessary to
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(5) By order dated July 23, 1998, the Bankruptcy Court approved the
Debtors' assumption of the SMR Frequency Exchange Agreement dated as
of March 14, 1997 between Geotek and PageNet and authorized the
Debtors to complete the exchange transaction contemplated therein.
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continue operating as a going concern, the Debtors commenced their efforts to
virtually "black-out" their operations by, inter alia, (i) issuing a
press-release announcing the imminent shutdown of their commercial operations
and the Networks, (ii) terminating employees at each of the Debtors' sale
offices throughout the United States, (iii) providing notice to substantially
all of their employees at their Montvale, New Jersey headquarters that such
employees would be terminated in sixty (60) days (i.e., on November 30, 1998),
and (iv) providing notice to their customers, dealers and vendors that the
Debtors would shortly be ceasing all commercial operations and virtually
shutting down the Networks. The Debtors currently are maintaining minimal
operation of the systems in the markets in which they initiated operations.
F. Use of Cash Collateral
Notwithstanding the virtual shut-down of operations, the Debtors still
required additional financing to fund the wind-down and liquidation of their
estates. To meet their financing needs, the Debtors sought authorization to use
"cash collateral" held in a custody account maintained by the 15% Secured Notes
Indenture Trustee for the benefit of the Holders of the 15% Secured Notes (the
"Cash Collateral Account"). By final order dated November 13, 1998 (the "First
Cash Collateral Order"), the Bankruptcy Court authorized the Debtors to use
$4.80 million of cash collateral in the Cash Collateral Account subject to,
inter alia, the Terms and Conditions Regarding Use of Cash Collateral (the
"Terms and Conditions"). The Debtors' authorization to use cash collateral
pursuant to the First Cash Collateral Order extended through January 29, 1999.
By final order dated February 16, 1999 (the "Second Cash Collateral Order"), the
Bankruptcy Court extended the Debtors' authorization to use cash collateral
through May 14, 1999 and permitted the Debtors to use up to an additional $2.2
million of cash collateral in the
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Cash Collateral Account, subject to, inter alia, the Amended Terms and
Conditions Regarding the Use of Cash Collateral (the "Amended Terms and
Conditions")
As adequate protection for the Debtors' use of cash collateral, WTC (as
successor to IBJ Whitehall) was granted, subject to the Carve-Out, (i)
replacement liens on all of the Debtors' assets, which did not previously secure
the 15% Secured Notes, including, without limitation, the common stock of
Gelico, (a) prior to all other liens and interests, other than certain permitted
liens specified in the Terms and Conditions and the Amended Terms and
Conditions, which permitted liens include, inter alia, the Claims of S-C Rig
under the DIP Financing and the Claims of HNS under the HNS License Loan
Agreement and the HNS Vendor Credit Financing Agreement, and (b) with respect to
collateral subject to such permitted liens, second priority, junior only to such
permitted liens, provided that such replacement liens would be senior to the
liens granted to HNS in connection with the HNS License Loan Agreement and the
HNS Vendor Credit Financing Agreement to the extent of the HNS Subordination
Amount (as defined in the Amended Terms and Conditions).
G. Marketing and Sale of the FCC Licenses
1. Initial Marketing Efforts
After cessation of their commercial operations and the virtual shutdown of
their Network, the Debtors, with the assistance of their professionals, engaged
in an extensive and thorough marketing process pursuant to which they solicited
potential purchasers to buy the FCC Licenses on an individual license-by-license
or market-by-market basis (an "Individual License
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Buyer").(6) The Debtors, with the assistance of their professionals, identified
more than six hundred (600) potential Individual License Buyers and, on October
15, 1998, sent them a bidding package describing the procedures for bidding on
the individual FCC Licenses. In addition, the Debtors issued a press release and
had articles published in industry trade journals describing the FCC License
sale process and inviting interested buyers to come forward.
Contemporaneously, the Debtors, with the assistance of their
professionals, identified and solicited potential purchasers of the FCC Licenses
on a bulk basis (a "Bulk Buyer"). As a result of these efforts, a number of
potential Bulk Buyers came forward, and the Debtors received term sheets or
formal proposals for the purchase of all of the FCC Licenses from at least four
(4) different Bulk Buyers.
2. The Auction Process
On December 16, 1998 and December 17, 1998, the Debtors conducted an
auction (the "Auction") of the FCC Licenses at the Wyndham Garden Hotel in
Wilmington, Delaware. Both Bulk Buyers and Individual License Buyers were
invited, and were eligible, to participate in the Auction. The Debtors provided
notification of the Auction to the more than six hundred (600) potential
Individual License Buyers they identified.
Prior to the Auction, by motion dated December 7, 1998 (the "FCC License
Sale Motion"), the Debtors described the bidding procedures which would govern
at the Auction. In addition, prior to the Auction, the Debtors, after
consultation with their principal creditors,
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(6) In fact, Rothschild, Inc. had solicited potential investors and
purchasers of the Debtors' assets, including the FCC Licenses, even
prior to the Debtors' decision to cease operations.
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established and distributed to the Individual License Buyers, the minimum
opening bid for each of the FCC Licenses (the "Minimum Individual Bids"). The
Debtors advised the Individual License Buyers that such buyers would not be
permitted to submit a bid at the Auction for an FCC License which was less than
the Minimum Individual Bid for such FCC License and which was not an
unconditional Cash bid. The Debtors expressly reserved their right to retain
individual FCC Licenses if the Debtors were not satisfied with the high bid
received at the Auction, even if such bid exceeded the Minimum Individual Bid
for such FCC License.
The Debtors publicly conducted the Auction for individual FCC Licenses on
December 16, 1998. Approximately thirty (30) Individual License Buyers
participated in the Auction either in person or by phone. The Debtors received
bids at the Auction equal to or in excess of the Minimum Individual Bids for 144
of their 191 FCC Licenses, and did not receive Minimum Individual Bids at the
Auction for their remaining 47 FCC Licenses. The aggregate of the high bids
received on each FCC License at the Auction was $54,138,200. The high bids were
received from twenty (20) different Individual License Buyers.
On December 17, 1998, the Debtors met separately with each of the four
Bulk Buyers at the Auction, including Nextel and Mobex Communications Inc.
("Mobex") to determine whether any of the Bulk Buyers would submit an
unconditional offer for the FCC Licenses in excess of $150 million. Only one
Bulk Buyer (the "Unnamed Buyer") submitted a Cash bid at the Auction valued by
the Debtors in excess of $150 million. The other Bulk Buyers submitted
conditional bids having face amounts of up to $150 million, but which were
valued by the Debtors below $150 million, and which, in some cases, were
non-Cash debt offers.
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The Debtors diligently investigated the financial capabilities of the
Unnamed Buyer and had serious concerns and doubts regarding the ability of the
Unnamed Buyer to obtain the financing needed to consummate the proposed $200
million Cash transaction. Notwithstanding those concerns, and in view of the
limited value of the other bulk bids received and the contingencies associated
with such bulk bids, at the conclusion of the Auction, on December 18, 1998, the
Debtors and the Unnamed Buyer executed a purchase agreement (the "Unnamed
Purchase Agreement"), pursuant to which the Debtors would sell the FCC Licenses
for $200 million in Cash.(7)
To afford the Unnamed Buyer additional time to perform its obligations
under the Unnamed Purchase Agreement and to afford the Individual License Buyers
and the Bulk Buyers an opportunity to increase the value of the bids and/or to
remove any conditions on such bids, the Debtors, after consultation with their
principal creditors, decided to adjourn for several weeks the hearing on the
Sale Motion (the "Sale Hearing"), which had been scheduled for December 18,
1998.
Subsequent to December 18, 1998 and until February 16, 1999, the Debtors
continued their negotiations with the Bulk Buyers (including Mobex and Nextel)
and the
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(7) Pursuant to the Unnamed Purchase Agreement, the Unnamed Buyer was
obligated to tender to a designated escrow agent a Cash deposit of $25
million, which was non-refundable regardless of whether the FCC
Licenses were sold to the Unnamed Buyer. In addition, five (5) business
days after the later of (i) the entry of an order approving the sale of
the FCC Licenses to the Unnamed Buyer, and (ii) the submission to the
FCC of assignment application documents providing for the transfer of
the FCC Licenses to the Unnamed Buyer, the Unnamed Buyer was obligated
to deposit an additional $25 million in escrow. The remaining $150
million was to be paid at the closing of the sale of the FCC Licenses.
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Individual License Buyers. Throughout this period, the Unnamed Buyer failed to
tender (and has continued to fail to tender) the $25 million non-refundable Cash
deposit required under the Unnamed Purchase Agreement. In addition, despite
repeated requests by the Debtors, the Unnamed Buyer was not able to provide
adequate evidence of the Unnamed Buyer's financial ability to perform its
obligations under the Unnamed Purchase Agreement.
Ultimately, the Debtors, after consultation with, and with the support of,
their principal creditors, determined that a $150 million Cash or
Cash-equivalent (i.e., consisting of Nextel Stock) offer submitted by Nextel
after the Auction for all of the FCC Licenses was the highest and best offer
received, and thus decided to seek to proceed with such offer. After successive
adjournments of the Sale Hearing, the Bankruptcy Court held the Sale Hearing on
February 16, 1999, at which time the Bankruptcy Court, overruling all existing
objections, entered an order (the "Sale Order") approving, subject to, inter
alia, FCC approval of the sale of the FCC Licenses to Nextel, pursuant to the
terms of the Nextel Purchase Agreement.
3. The Nextel Purchase Agreement
Pursuant to a final judgment dated July 25, 1995 entered by the United
States District Court for the District of Columbia (the "District Court") in
United States of America v. Motorola, Inc. and Nextel Communications, Inc.,
Civil Action No. 94-02331 (the "Consent Decree"), the number of 900 Mhz channels
in certain major cities (i.e., Boston, Chicago, Dallas, Denver, Detroit,
Houston, Los Angeles, Miami, New York City, Orlando, Philadelphia, San
Francisco, Seattle and Washington, D.C.) that Nextel is permitted to hold,
manage or acquire is capped. As such, based on Nextel's current 900 Mhz license
holdings, the Consent Decree prohibits Nextel from acquiring certain of the
Debtors' FCC Licenses.
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Accordingly, the Nextel Purchase Agreement contemplates a sale of the FCC
Licenses in two phases. The FCC Licenses located in cities not subject to the
Consent Decree (the "Phase I Licenses") are to be sold to Nextel upon FCC
approval(8) (and satisfaction of other closing conditions) (the "Phase I
Closing") for $19,161,000 in Cash. The Phase I Closing is not expected to occur
until July 1999 at the earliest, and may not occur until several weeks or
months thereafter.
The FCC Licenses located in cities subject to the Consent Decree (the
"Phase II Licenses") will be sold to Nextel for $130,839,000 if and when
(assuming satisfaction of other closing conditions, including FCC approval) (the
"Phase II Closing") (i) Nextel successfully obtains consent by the United States
Department of Justice (the "DOJ") permitting Nextel to acquire, own and utilize
in its businesses all of the Phase II Licenses (the "DOJ Consent"), or (ii) an
order is entered by the District Court vacating the Consent Decree, or otherwise
permitting Nextel to acquire, own and utilize in its businesses all of the Phase
II Licenses (the "District Court Order"). The Phase II Closing is not expected
to occur until July 1999 at the earliest, and may not occur until several weeks
or months thereafter. The Phase I Closing can occur regardless of whether there
is a Phase II Closing.
Pursuant to the Nextel Purchase Agreement and the License Assignment
Agreement among Nextel, Geotek, WTC (as successor to IBJ Whitehall) and HNS (the
"License Assignment Agreement"), the Debtors filed applications requesting FCC
approval for the transfer of the FCC Licenses to (i) WTC (as successor to IBJ
Whitehall) on behalf of both the Holders of
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(8) Under applicable FCC regulations, any transfer of the FCC Licenses by
the Debtors to a third party must be approved by the FCC.
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the 15% Secured Notes and S-C Rig as the DIP Lender, with respect to the FCC
Licenses owned by Geotek U.S. Networks, Gelico and MacDermott Communications
(the "15% Secured Notes FCC Licenses"), and (ii) HNS, with respect to the FCC
Licenses owned by Geotek License Holdings (the "HNS FCC Licenses").(9) In
addition, pursuant to the Nextel Purchase Agreement and the License Assignment
Agreement, WTC (as successor to IBJ Whitehall) and HNS were to cooperate with
the Debtors in the filing of applications with the FCC seeking approval of the
assignment of the 15% Secured Notes FCC Licenses and the HNS FCC Licenses from
WTC and HNS, as applicable, to Nextel. Pursuant to and subject to the Nextel
Purchase Agreement and the License Assignment Agreement, the assignments of the
FCC Licenses from the Debtors to WTC and HNS and from WTC and HNS to Nextel are
to occur (a) as to each Phase I License, at the Phase I Closing, and (b) as to
each Phase II License, at the Phase II Closing. Such assignments are subject to
the Bankruptcy Court's entry of an order confirming a plan of reorganization or
liquidation on behalf of the Debtors, which order approves the assignment of the
FCC Licenses by the Debtors to WTC and HNS under the License Assignment
Agreement.
On February 16, 1999, Nextel filed a motion (the "Nextel Motion to
Vacate") with the District Court seeking the entry of an order vacating the
Consent Decree and requesting expedited consideration. The Department of
Justice, as well as Mobex and at least one other mobile dispatch operator, have
filed oppositions to the Nextel Motion to Vacate.
On March 5, 1999, the District Court held a hearing to determine whether
it should summarily deny the Nextel Motion to Vacate or whether it should permit
Nextel an
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(9) See Section IV.B of this Disclosure Statement ("Negotiations Regarding
the Plan of Liquidation") as to the rationale for utilizing a two-step
assignment procedure.
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opportunity to factually develop its case through discovery and an
evidentiary hearing. On March 16, 1999, the District Court issued its Memorandum
Opinion in which it concluded that it would not dismiss the Nextel Motion to
Vacate without an evidentiary hearing. On the same day, the District Court
entered its order which provided that the District Court will hold an
evidentiary hearing and directed Nextel and the Department of Justice to jointly
submit a proposed scheduling order on or before March 24, 1999.
On March 25, 1999, Nextel and the Department of Justice filed a joint
motion for entry of a scheduling order and a stipulated protective order. The
proposed scheduling order sets forth the following deadlines:
April 8 Parties exchange preliminary witness lists.
April 12 Deadline for service of interrogatories and
requests for production to parties.
April 19 Defendant serves its expert report.
April 22 Deadline for document discovery production
from parties.
April 26 Parties exchange final witness lists.
April 26 Plaintiff serves its expert report.
April 26 Deadline for completion of third-party
document discovery.
May 3 Deadline for completing all depositions of
fact and expert witnesses.
May 6 Parties exchange preliminary exhibit lists.
May 10 Parties file pre-hearing submissions.
May 14 Deadline for objections to exhibits.
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On or after
May 24 Evidentiary hearing.
Four days
after hearing Post-hearing briefs.
On March 5, 1999, the Debtors filed applications with the FCC seeking
approval of the assignment of (i) the 15% Secured Notes FCC Licenses to WTC, and
(ii) the HNS FCC Licenses to HNS. On March 9, 1999 the Debtors filed, on behalf
of WTC and HNS, applications with the FCC seeking approval of the assignment of
the 15% Secured Notes FCC Licenses from WTC to Nextel and of the HNS FCC
Licenses from HNS to Nextel, subject to and in accordance with the Purchase
Agreement and the License Assignment Agreement.
H. Disposition of Other Assets
1. Sales of Miscellaneous Assets
Shortly after the Filing Date, and prior to the cessation of commercial
operations, the Debtors sought and obtained authorization to reject eighteen
leases of sales offices (the "Office Leases"). The Debtors decided to reject
such Office Leases because the leases were either (i) located in "browned-out"
markets where the Debtors were not undertaking sales efforts to expand their
customer base, (ii) located in markets where the Debtors had not yet begun
commercial operation, or (iii) were going to be consolidated into other office
locations. In connection with the closing of such Office Leases, the Debtors
sought and obtained authorization, by order dated July 27, 1998, to sell certain
furniture, fixtures and equipment, free and clear of all liens, claims and
encumbrances, located at a number of such Office Leases.
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After the cessation of operations and the virtual shutdown of the Network,
by order dated November 13, 1998, the Bankruptcy Court approved procedures
("Miscellaneous Assets Sales Procedures") for the Debtors to sell certain
miscellaneous assets (consisting of, inter alia, furniture, office equipment and
Network equipment), free and clear of all liens, claims and encumbrances, which
were located in the Office Leases, the telecommunications site leases (the "Site
Leases") or the Debtors' headquarters or warehouse facility. Among other things,
the Miscellaneous Assets Sales Procedures set forth the required notice period
that the Debtors had to provide to their principal creditors before the Debtors
could complete a sale and also maintained the opportunity and right of the
principal creditors to object to any sale of miscellaneous assets proposed by
the Debtors.
The Debtors have sold substantially all of their miscellaneous assets,
consisting of furniture, office equipment and Network equipment, for
approximately $1.6 million. The Debtors estimate that they will recover an
additional $20,000 from sales of the remaining miscellaneous furniture and
equipment.
2. Dispositions of Foreign and Non-Wholly-Owned Subsidiary Interests
(a) Dissolution of Geonet Communications Canada Inc. and Geotek
Communications Canada Inc.
Geonet Communications Canada Inc. ("Geonet") was a federally incorporated
Canadian corporation in which Geotek held an approximate 90% equity interest and
33% voting interest. Geotek Communications Canada Inc. ("Geotek Canada") was a
wholly-owned subsidiary of Geonet. Geotek Canada had been incorporated to engage
in the business of developing and marketing a wireless communications system in
Canada based on the Debtors
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FHMA(R) technology. By motion dated September 21, 1998, the Debtors sought
authorization of the Bankruptcy Court to (i) a distribution to the shareholders
of Geonet of all funds thereof remaining following the satisfaction of all of
its liabilities, (ii) the amalgamation of Geonet and Geotek Canada, and (iii)
the dissolution of the corporation resulting from such amalgamation. Geonet's
sole remaining asset at the time of the order of the Bankruptcy Court consisted
of approximately Cdn.$600,000. Geotek Canada had no assets or liabilities.
Following the satisfaction of all liabilities of Geonet and the establishment of
a general reserve of Cdn.$5,000 to, inter alia, provide for unanticipated
liabilities, the balance of Geonet's funds were distributed to the shareholders
of Geonet pursuant to a reduction in the stated capital account of each class of
outstanding shares of Geonet. Approximately Cdn.$495,000 was distributed to the
Debtors, as the holders of all of the outstanding Class C Shares and Class D
Shares of Geonet. On or about October 6, 1998, Geonet and Geotek Canada were
amalgamated. The corporation resulting from such amalgamation (also known as
Geonet Communications Canada Inc. ("Geonet II")) is in the process of being
dissolved.
(b Liquidation of GTIL
Geotek and Geotek USA have an approximate 97% ownership interest in GTIL,
an Israeli corporation, which is the direct licensee of the FHMA(R) technology.
Pursuant to a motion filed by Rafael, a temporary receiver was appointed in
October 1998 pursuant to Israeli insolvency law. Thereafter, GTIL's operations
ceased and its assets liquidated. The Debtors do not anticipate that they will
be able to recover on account of their ownership interest in GTIL.
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(c) Disposition of Geotek Argentina
The Debtors have an approximate 70% ownership in Geotek Argentina, an
Argentinian entity. Geotek Argentina owns a nationwide Argentina frequency
license. The Debtors and their professionals have been soliciting potential
buyers of their ownership interest in Geotek Argentina.
(d) Disposition of GMSI
The Debtors have an approximate 80% ownership interest in GMSI, a Canadian
entity. GMSI provides software and hardware for fleet management. The Debtors
and their professionals have been soliciting potential buyers of their ownership
interest in GMSI.
(e) Disposition of Cumulous Communication
Cumulous Holding, one of the Debtors, holds a 25% ownership interest in
Cumulous Communication, a limited liability corporation which runs and operates
a mobile radio network in California. The Debtors and their professionals have
been soliciting potential buyers of their ownership interest in Cumulous
Communication.
I. Disposition of Unexpired Leases and Executory Contracts
Subsequent to the cessation of their commercial operations and the virtual
shutdown of their Network, the Debtors continually reviewed their executory
contracts and unexpired leases and their operations with respect to the subject
matter of such executory contracts and unexpired leases, to determine whether
such contracts and leases should be assumed, assumed and assigned, or rejected
in accordance with section 365 of the Bankruptcy Code.
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By order dated November 13, 1998, the Bankruptcy Court authorized and
approved the rejection of the Debtors' customer and dealer contracts. After
extensive efforts to market more than two hundred Site Leases generally proved
unsuccessful, the Debtors began taking the steps necessary to reject such
leases. By order dated November 13, 1998, the Bankruptcy Court authorized and
approved the rejection of approximately one hundred and eleven (111) Site
Leases. By order dated December 18, 1998, the Bankruptcy Court authorized and
approved the rejection of (i) approximately eighty-two (82) Site Leases, (ii)
fourteen (14) Office Leases, and (iii) more than sixty (60) executory
contracts.(10) In addition, a number of other Site Leases and Office Leases,
including the lease for the Debtors' headquarters in Montvale, New Jersey and
the lease for the Debtors' warehouse facility in Mountainside, New Jersey, have
been periodically rejected by specific orders or stipulations relating
thereto.(11) By order dated December 18, 1998, the Debtors assumed and assigned
four (4) Site Leases to Subcarrier Communications, Inc. in exchange for a
$35,000 payment to the Debtors.
The Debtors have continued and continue to maintain thirteen (13) Site
Leases (the "Unexpired Site Leases") which may be necessary, under applicable
FCC regulations, to
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(10) Prior to the cessation of operations, the Bankruptcy Court authorized
and approved the rejection of, respectively, three (3), eleven (11) and
four (4) Office Leases. The Debtors decided to reject such Office
Leases because the leases were either (i) located in "browned-out"
markets where the Debtors were not undertaking sales efforts to expand
their customer base, (ii) located in markets where the Debtors had not
yet begun commercial operations, or (iii) were going to be consolidated
into other office locations.
(11) In connection with the rejection of Site Leases, the Debtors also
obtained authorization to abandon certain fixtures and proprietary
Network equipment, free and clear of any security interests therein, to
lessors for the Site Leases, because the costs of removal of such
property exceeded the anticipated recovery that could be achieved from
a sale thereof.
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preserve the Debtors' rights in the FCC Licenses. The Unexpired Site Leases will
either be rejected if a Phase I Closing and/or a Phase II Closing occurs, or
assumed and assigned to WTC or HNS, as the case may be, at the option of WTC and
HNS, in the event a Phase I Closing and/or a Phase II Closing does not occur, as
of the Effective Date.
J. Employee Retention Programs
1. Key Employee Retention Program
By order dated June 30, 1998, the Bankruptcy Court approved the Debtors'
key employee retention program (the "Key Employee Retention Program"), which
authorized the Debtors to establish a $1,032,188 escrow fund for thirty-one (31)
key employees (the "Key Employees") whose services were integral to the Debtors'
then-efforts to reorganize and to preserve the going concern value of the
Debtors' business operations. Pursuant to the Key Employee Retention Program,
each of the designated key employees was assigned a retention amount (the "Key
Employee Retention Amount") and was entitled to receive (i) a Cash payment equal
to the remaining 50% of such employee's Key Employee Retention Amount, earned
and payable upon confirmation of a chapter 11 plan, and (ii) a Cash payment
equal to the remaining 50% of such employee's Key Employee Retention Amount,
earned and payable nine months following the date of such confirmation;
provided, however, that in the event of a liquidation of the Debtors under
chapter 7 of the Bankruptcy Code or the involuntary termination of employment of
such employee, the full outstanding balance that eventually would have become
due and payable to such employee under clauses (i) and (ii) above had a chapter
11 plan been confirmed, would become immediately due and payable. By order dated
October 21, 1998, the Court modified the Key Employee Retention Program, inter
alia, to provide for the inclusion of
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additional employees into such program and to allow the Debtors to pay Key
Employee Retention Amounts to those employees who had received notice of
termination and opted to leave before their official termination date. In the
aggregate, $867,838 of Key Employee Retention Amounts has been distributed to
employees who were previously involuntarily terminated. There is approximately
$164,350 remaining in escrow, which is being held for three (3) remaining Key
Employees which will be paid to such Key Employees in accordance with the Key
Employee Retention Program upon termination of their respective employment.
2. Supplemental Employee Retention Program
By order dated November 13, 1998, the Bankruptcy Court approved the
Debtors' supplemental employee retention program (the "Supplemental Retention
Program," and together with the Key Employee Retention Program, the "Employee
Retention Programs"). Pursuant to the Supplemental Retention Program, the
Debtors' then-remaining nineteen (19) employees (the "Supplemental Retention
Employees") were each granted administrative expense Claims in a specified
amount (the "Wind-Down Retention Amount") with such Claim payable upon the
termination date of each such employee; provided, however, an employee would not
be entitled to the Wind-Down Retention Amount if either (i) the employee
voluntarily terminates his or her employment prior to such employee's specified
termination date, or (ii) the employee is terminated by the Debtors for good
cause. In connection with the Supplemental Retention Program, except with
respect to the Key Employee Retention Amount and the Wind-Down Retention Amount,
the nineteen (19) remaining employees waived all rights to any further Claim for
severance as well as any other contractual entitlement under an existing
employment contract with the Debtors; provided, however, that such employees did
not waive (a)(u) any rights under
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the Consolidated Omnibus Budget Reconciliation Act of 1985 (i.e., COBRA), (v)
any retirement and health benefits under the Employee Retirement Income Security
Act of 1974 (i.e., ERISA), (w) any rights under applicable state and federal
wage and hour laws, and (x) any workers' compensation and disability claims, (b)
any rights created or arising on or after the date of the application seeking
approval of the Supplemental Retention Program (other than Claims for severance
or under the Workers Adjustment and Retraining Notification Act (i.e., WARN
Act), and (c) any Claims for vacation pay, sick pay, or pre-Filing Date bonuses.
Pursuant to the Supplemental Retention Program, the nineteen (19) remaining
employees received administrative expense Claims totaling $622,000, of which
$294,000 has already been paid to twelve (12) of the employees upon their
termination date.
Payments to be made under the Supplemental Employee Retention Program are
included in the Post-Confirmation Budget. As provided in the Plan, the
Confirmation Order shall provide that the Debtors shall be authorized to use the
15% Secured Notes Cash Collateral to fund the Post-Confirmation Budget for the
period commencing on the Confirmation Date and terminating on the Effective
Date. For the period commencing on the Effective Date and continuing to the date
Geotek is dissolved, the Post-Confirmation Budget will be funded either from (i)
Available Cash if a Phase I Closing and a Phase II Closing shall have occurred,
or (ii) if (x) a Phase I Closing and Phase II Closing shall not have occurred,
payment of the 15% Secured Notes Contribution Amount by WTC and the HNS
Contribution Amount by HNS, or (y) a Phase I Closing shall have occurred but a
Phase II Closing shall not have occurred, payment of the 15% Secured Notes Cash
Collateral Contribution Amount (an amount equal to the Net Available Cash
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Deficiency Amount) by WTC and the HNS Phase I Cash Contribution Amount
($2,570,250) by HNS.
K. Establishment of the Bar Date and Notice Thereof
The Debtors filed their schedules, lists and statements of financial
affairs on September 4, 1998. In accordance with Bankruptcy Rule
3003(c)(3), by order dated September 11, 1998 (the "Bar Order"), the Bankruptcy
Court fixed October 30, 1998 (the "Bar Date") as the last date by which
creditors would be permitted to file proofs of Claim in the Chapter 11 Cases.
Pursuant to Bankruptcy Rule 3003(c)(2) and the Bar Order, and excepting only
those creditors expressly identified in the Bar Order, any creditor whose Claim
was not scheduled by the Debtors or was scheduled as disputed, contingent or
unliquidated, and who failed to file a proof of Claim on or before the Bar Date,
will not be treated as a creditor with respect to such Claim for purposes of
voting on, and receiving a distribution under, the Plan. Late-filed, defective,
excessive or otherwise inappropriate proofs of Claim are subject to objection.
It is anticipated there will be significant objections to proofs of Claim filed
in the event a Phase I Closing and a Phase II Closing shall have occurred.
L. Establishment of the Administrative Bar Date and Notice Thereof
In accordance with Bankruptcy Rule 3003(c)(3), by order dated January 19,
1999 (the "Administrative Claims Bar Order"), the Bankruptcy Court fixed March
5, 1999 (the "Administrative Claims Bar Date") as the last date by which
creditors who held Claims arising on or after the Filing Date and through and
including January 15, 1999 that are entitled to priority as expenses of
administering the Chapter 11 Cases under sections 503(b) and 507(a)(1) of the
Bankruptcy Code could file a proof of Claim in the Chapter 11 Cases. Pursuant to
the
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Administrative Claims Bar Order, and excepting only those creditors expressly
identified therein, any creditor who failed to timely assert their
Administrative Expense Claim on or before the Administrative Claims Bar Date
will not be treated as a creditor with respect to such Administrative Expense
Claim for purposes of receiving a distribution under the Plan. Late-filed,
defective, excessive or otherwise inappropriate proofs of Administrative Expense
Claim are subject to objection.
M. Preferences and Fraudulent Transfers
Pursuant to the Bankruptcy Code, a debtor may seek to recover, through the
initiation of adversary proceedings in the bankruptcy court, certain transfers
of the debtor's property (preferential transfers), including payments of Cash,
made while the debtor was insolvent during the ninety (90) days immediately
prior to the commencement of the bankruptcy case (or, in the case of a transfer
to or on behalf of an "insider," one year prior to the commencement of the
bankruptcy case) in respect of antecedent debts to the extent the transferee
received more than it would have received on account of such pre-existing debt
had the debtor been liquidated under chapter 7 of the Bankruptcy Code. There are
certain defenses to such claims. For example, transfers made in the ordinary
course of the debtor's and the transferee's business according to ordinary
business terms are not recoverable. Furthermore, if the transferee extended
credit contemporaneously with or subsequent to the transfer, and prior to the
commencement of the bankruptcy case, for which the transferee was not repaid,
such extension constitutes an offset against an otherwise recoverable transfer
of property. If a transfer is recovered by a debtor, the transferee has a
general unsecured claim against the debtor to the extent of the recovery.
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Under the Bankruptcy Code and under various state laws, a debtor may also
recover or set aside certain transfers of property (fraudulent conveyances),
including the grant of a security interest in property, made while the debtor
was insolvent or which rendered the debtor insolvent or undercapitalized to the
extent that the debtor received less than fair consideration or reasonably
equivalent value for such transfer.
The Debtors have yet to complete their investigation as to whether any
amounts can be recovered by the estate in respect of preferential transfers or
fraudulent conveyances. The Debtors therefore reserve their right to commence
any preferential transfer and/or fraudulent conveyance actions until the date of
confirmation of the Plan or such later date as the Bankruptcy Court may approve.
As set forth in Section 11.3 of the Plan, mutual releases will be deemed
to have been given by and among the Debtors (including their officers, directors
and employees as of the Filing Date and the Debtors' agents, advisors, attorneys
and representatives), each Holder of a 15% Notes Claim (a "Consenting Holder")
that marked a box on such Holder's Ballot indicating such Holder's agreement to
grant the release provided in Section 11.3 of the Plan, the ML Funds, WTC, HNS,
S-C Rig, [the Unsecured 12% Notes Indenture Trustee (provided that Class 9 has
accepted the Plan)], and the Creditors' Committee, with respect to, inter alia,
any and all Claims and causes of action relating to the Debtors, the Plan or the
Chapter 11 Cases (including the 85/15 Proposal). See Section IV.G.3 of this
Disclosure Statement ("Releases"). Such release would include the Released
Avoidance Actions (all Causes of Action arising under sections 510(c), 544, 545,
547, 548 and 549 of the Bankruptcy Code) in connection with any transfers or
payments, including, but not limited to, the granting of Liens, the pledging of
common stock of
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certain of the Continuing Subsidiaries and Non-Continuing Subsidiaries, and the
issuance of guarantees by certain of the Debtors in connection with the 15%
Secured Notes Indenture, the HNS License Loan Agreement, the HNS Vendor Credit
Financing Agreement and the S-C Rig Loan Agreement. See Section IV.B of this
Disclosure Statement ("Negotiations Regarding the Plan of Liquidation").
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IV. THE PLAN
A. Summary
THE FOLLOWING IS A SUMMARY OF THE MATTERS CONTEMPLATED TO
OCCUR EITHER PURSUANT TO OR IN CONNECTION WITH CONFIRMATION OF THE PLAN. THIS
SUMMARY HIGHLIGHTS THE SUBSTANTIVE PROVISIONS OF THE PLAN AND IS NOT, NOR IS IT
INTENDED TO BE, A COMPLETE DESCRIPTION OF, OR A SUBSTITUTE FOR, THE PLAN.
STATEMENTS REGARDING PROJECTED AMOUNTS OF CLAIMS OR DISTRIBUTIONS (OR VALUE OF
SUCH DISTRIBUTIONS) ARE ESTIMATES BY THE DEBTORS BASED ON CURRENT INFORMATION
AND ARE NOT A REPRESENTATION AS TO THE ACCURACY OF THESE AMOUNTS. FOR AN
EXPLANATION OF THE BASIS FOR, LIMITATIONS OF AND UNCERTAINTIES RELATING TO THESE
CALCULATIONS, SEE SECTION VI OF THIS DISCLOSURE STATEMENT ("CERTAIN FACTORS TO
BE CONSIDERED").
The Plan classifies the various Claims against and Interests in the
Debtors into eighteen (18) Classes. These Classes take into account the
differing nature and priority of Claims against and Interests in the Debtors.
A chapter 11 plan may specify that certain classes of claims or interests
are unimpaired by the reorganization effectuated pursuant to the plan. A class
is deemed unimpaired if, among other things, the plan does not alter the legal,
equitable or contractual rights of the members of such class. Unimpaired classes
are deemed, as a matter of law, to have accepted the
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plan. Accordingly, it is not necessary to solicit votes from holders of
unimpaired claims. Under the Plan, the following Classes are unimpaired, and,
accordingly, are deemed to have accepted the Plan: Class 1 (Administrative
Expense Claims), Class 2 (Priority Tax Claims) and Class 3 (Other Priority
Claims).
B. Negotiations Regarding the Plan of Liquidation
In late September 1998, it became clear that the Debtors would not be able
to achieve a consensual plan of reorganization based upon an on-going business
operation which utilized the FHMA(R) technology and the Driver Logistics(TM)
System. As a result thereof, the only alternative to the Debtors was an orderly
liquidation of their assets.
At that time, the ML Funds and HNS indicated that they would be willing
generally to support a plan of reorganization to be proposed by the Debtors
which provided that, assuming the Debtors were able to generate $150 million or
more of proceeds from the sale of their FCC Licenses, (a) each of the Holders of
the 15% Secured Notes and HNS would receive a distribution under a plan equal to
85% of their respective claims under the 15% Secured Notes Indenture and under
the HNS Loan Agreement and the HNS Vendor Credit Financing Agreement, i.e., for
the Holders of 15% Secured Notes, a distribution equal to approximately $130.3
million (85% of $153 million) and for HNS, a distribution equal to approximately
$35.7 million (85% of $42 million), (b) after payment of the 85% distribution
described in clause (a) above, (i) proceeds from the sale of FCC Licenses, (ii)
proceeds from the sale of other assets in which the 15% Secured Notes Indenture
Trustee or HNS held a valid and perfected security interest, (iii) cash
collateral held by the 15% Secured Notes Indenture Trustee which remained, and
(iv) the proceeds realized from the liquidation of the Debtors' other assets,
would be
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available for distribution to administrative expense, priority and
unsecured creditors, (c) the Holders of the 15% Secured Notes and HNS would
waive any deficiency claims they held, i.e., for the Holders of the 15% Secured
Notes, the difference between $153 million and $130.3 million, and for HNS, the
difference between $42 million and $35.7 million, (d) the Holders of the 15%
Secured Notes and HNS would not assert any Claim for post-Filing Date interest,
(e) HNS would waive the right to receive a distribution on account of any
unsecured claim (net of a right of setoff) it held, an amount HNS estimated to
be in excess of $[8] million, and (f) the ML Funds would waive any distribution
as a Holder of the Unsecured 12% Notes Claims (the "85/15 Proposal").
On October 21, 1998, an interim hearing (the "Interim Cash Collateral
Hearing") was held to consider the Debtors' application (the "First Cash
Collateral Application") to use cash collateral in the Cash Collateral Account.
Several objections were filed to the First Cash Collateral Application,
including objections by the Creditors' Committee and S-C Rig. Negotiations among
the parties resolved nearly all of the open issues regarding the First Cash
Collateral Application. However, three provisions under the proposed order
approving the First Cash Collateral Application remained in controversy: (i) the
Debtors' payment to the ML Funds of approximately $200,000 of fees incurred by
the ML Funds in connection with the Chapter 11 Cases subsequent to the Filing
Date, (ii) the section 506(c) waiver, which provided that the costs and expenses
of liquidating and winding-down the Debtors' estates would not be charged
against the collateral of the Holders of the 15% Secured Notes, and (iii) the
Debtors' indemnification of the ML Funds and the trustee for the 15% Secured
Notes Indenture, pursuant to Section 10.6(b) of the Terms and Conditions, for
the ML Funds' and the trustee's role with respect to a proposed
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plan. After lengthy negotiations on October 21, 1998, these issues were
ultimately resolved, and S-C Rig's and the Creditors' Committee's objections
were withdrawn, based on the 85/15 Proposal.(12) The 85/15 Proposal is a matter
of Bankruptcy Court record for which there are differing views of its meaning by
the principal constituencies.
S-C Rig and the Creditors' Committee disagreed with the Debtors', the ML
Funds' and HNS's understanding of the 85/15 Proposal, and contended that the
85/15 Proposal, as negotiated and as reflected on the transcript of the Interim
Cash Collateral Hearing, provided that the Claims of the Holders of the 15%
Secured Notes and the Claims of HNS in connection with the HNS License Loan
Agreement and the HNS Vendor Credit Financing Agreement are to be limited to a
recovery of 85% of the secured portion of such Claims.
At the conclusion of the Auction held on December 16 and December 17,
1998, the Debtors met with the ML Funds and HNS to review the results of the
Auction. With respect
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(12) In practical effect, the order was modified to provide the following:
Provided that a sale of the FCC Licenses produced $150 million or more
in sales proceeds, in the event that the ML Funds and HNS failed to
support a plan term sheet and a plan containing the 85/15 Proposal,
then: (i) the payment of $200,000 in fees to the ML Funds would be
returned to the Debtors or credited as a distribution to the ML Funds
in connection with a plan on account of the ML Funds' 15% Secured
Notes, (ii) the section 506 waiver would be partially abrogated, and
(iii) the Debtors' indemnification of the ML Funds and the trustee of
the 15% Secured Notes Indenture in connection with the ML Funds' and
the trustee's role in connection with a plan would be partially
abrogated in force and effect. It is the Debtors' view and the view of
the ML Funds and HNS, that (i) the 85/15 Proposal was not binding on
any parties, including the ML Funds and HNS, unless such 85/15 Proposal
was set forth in a plan proposed by the Debtors approved by the
Bankruptcy Court, and (ii) the ML Funds and HNS never affirmatively
covenanted to do the 85/15 Proposal. The Creditors' Committee
disagrees. The ML Funds and HNS did agree that they would lose the
benefit of certain provisions of the First Cash Collateral Order and
the Second Cash Collateral Order, in the event that they failed to
support a plan which included the 85/15 Proposal.
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to the Individual License Bids received, the Debtors and their principal
creditors were extremely disappointed with such bids in view of the fact that
(i) the aggregate amount of the Individual License Bids received, approximately
$54 million, was far below that which the parties hoped to receive, i.e., $150
million, and (ii) Individual License Bids were not received for several of the
Debtors' key markets, i.e., Dallas, Chicago and Houston. In addition, the
parties were extremely disappointed with the Bulk Bids received due to, inter
alia, in certain cases, the proposed purchase price, financing and/or regulatory
contingencies associated with such Bulk Bids and, in certain other cases, the
form of consideration to be paid.
The Debtors and their principal creditors commenced discussions which
resulted in an agreement by the Debtors that in the event an acceptable Bulk Bid
was not received, the Debtors would pursue the sale of those FCC Licenses for
which an acceptable Individual License Bid was received and to propose a plan of
liquidation pursuant to which the FCC Licenses not sold would be transferred to
the 15% Secured Notes Indenture Trustee and HNS. The Plan provides that the
Holders of the 15% Secured Notes and HNS shall provide sufficient Cash to pay
Allowed Administrative Expense and priority Claims.
The Debtors, after consultation with their principal creditors, continued
negotiations with each of the Bulk Bidders until it was determined that,
notwithstanding the significant regulatory contingency, i.e., the need to obtain
the DOJ Consent or the District Court Order, the Nextel Bulk Bid represented the
"highest and best offer" for the FCC Licenses. However, the Nextel Bulk Bid
presented the risk that if Nextel was unable to obtain the DOJ Consent or the
District Court Order, and if at that time the Debtors then began the lengthy
process of seeking FCC approval for the assignment of the FCC Licenses to WTC,
on behalf of
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the Holders of 15% Secured Notes, and HNS, there would be a risk that the value
of the FCC Licenses to be assigned could be materially and adversely affected.
To avoid this possibility, Nextel agreed to a two-step assignment process
pursuant to which the Debtors would file applications with the FCC seeking
approval to assign the FCC Licenses to WTC, on behalf of the Holders of the 15%
Secured Notes, and HNS, which assignments would be effective only upon entry of
the Confirmation Order, and WTC and HNS would file applications with the FCC
seeking approval to assign the FCC Licenses to Nextel. Thus, if Nextel were not
able to obtain DOJ Consent or the District Court Order or other closing
conditions for the Phase II Closing were not timely met, then WTC and HNS would
withdraw their requests for FCC approval to assign the Phase II FCC Licenses to
Nextel, and, subject to entry of the Confirmation Order, and final approval of
the FCC, WTC, on behalf of the Holders of 15% Secured Notes, and HNS would be
the owners of the Phase II FCC Licenses. Similarly, if the closing conditions
for the Phase I Closing were not timely met, then WTC and HNS would withdraw
their requests for FCC approval to assign the Phase I FCC Licenses to Nextel,
and, subject to entry of the Confirmation Order, and final approval of the FCC,
WTC, on behalf of the Holders of the 15% Secured Notes and HNS would be the
owners of the Phase I FCC Licenses.
During the latter part of March 1999, various of the principal creditor
constituencies met in an attempt to reach a consensus on the terms and
conditions of a plan of liquidation. These meetings culminated in an agreement
in principle on the terms and conditions of a consensual plan of liquidation
which would be supported by the Debtors' principal creditor constituencies,
i.e., HNS, the ML Funds, S-C Rig, the Creditors' Committee, WTC and the
[Unsecured 12% Notes Indenture Trustee]. This agreement in principle is the
foundation of the
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Plan and is reflected in the distributions to be received by HNS, Holders of the
15% Notes Claims, Holders of General Unsecured Claims, S-C Rig and [Holders of
the Unsecured 12% Notes Claims].
This agreement in principle resolves a number of litigable issues and
results in substantial benefits being conferred upon the Debtors' estates.
First, this agreement in principle resolves issues concerning the validity of
the guarantees issued by certain of the Debtors, including, most importantly,
the GLH Guaranty and the guarantee issued by Gelico, in connection with Geotek's
obligations under the 15% Secured Notes Indenture. While the Debtors believe
such guarantees are valid and enforceable, litigation as to whether such
guarantees constituted fraudulent conveyances would result in substantial costs
to the Debtors' estates.
Second, the agreement in principle avoids costly and time-consuming
litigation concerning the proper allocation of Administrative Expense and
priority Claims among each of the Debtors and, most importantly, ensures that in
the event of either a Nextel Termination Event or a Phase II Termination Event,
the Debtors will have sufficient Cash available to fund Administrative Expense
and priority Claims. Such funding will be made available by HNS and the Holders
of 15% Notes Claims. The amount of the contribution to be made by HNS in the
event a Nextel Termination Event shall have occurred, likely exceeds the
Administrative Expense and priority Claims properly allocable to Geotek License
Holdings.
Third, the agreement in principle avoids costly and time-consuming
litigation concerning the allocation of the Nextel Purchase Price among Gelico,
Geotek U.S. Networks, and Geotek License Holdings.
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Fourth, the agreement in principle permits a substantial recovery for
general unsecured creditors in the event a Phase I Closing and a Phase II
Closing shall have occurred. Distributions to general unsecured creditors is
further enhanced by the agreement by HNS and the Holders of the 15% Notes Claims
to waive the right to payment on account of their unsecured Claims.
[Fifth, the agreement in principle resolves subordination issues between
S-C Rig and Holders of Unsecured 12% Notes Claims notwithstanding the fact that
S-C Rig will not be paid in full on account of its S-C Rig Senior Loan Claims.]
Sixth, the agreement in principle avoids costly and time consuming
litigation concerning the respective rights of WTC and the Debtors to the NB3
Escrow Proceeds.
Finally, the agreement in principle avoids costly and time consuming
litigation with respect to the disputes concerning the meaning of the 85/15
Proposal.
In summary, the Debtors firmly believe that the agreement in principle
spares the Debtors' estate substantial costs and expense, avoids the risk of
litigation and provides substantial benefits.
C. Classification and Treatment of Claims and Interests
1. General
The Plan classifies Claims and Interests separately in accordance with the
Bankruptcy Code and provides different treatment for different Classes of Claims
and Interests.
Only Holders of Allowed Claims are entitled to receive Distributions under
the Plan. Allowed Claims are Claims that are not in dispute, are not contingent,
are liquidated in amount and are not subject to objection or estimation. All
distributions or other transfers of
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Cash, shares of Nextel Stock or FCC Licenses otherwise available to Holders of
Allowed Claims will be made on or as soon as practicable after, with respect to
Distributions to Holders of Allowed Claims in Classes 1, 2, 3, 4, 5 and 6, the
Distribution Date (i.e., either (i) ten (10) Business Days after the Effective
Date, (ii) within ten (10) Business Days following the date on which a Claim
becomes "Allowed," or (iii) such other date as the parties agree or as the
Bankruptcy Court may fix) or, with respect to distributions to Holders of the
Allowed S-C Rig Senior Loan Claims, Allowed General Unsecured Claims and Allowed
Unsecured 12% Notes Claims in the event a Phase I Closing and a Phase II Closing
have occurred, the Final Distribution Date (i.e. the tenth Business Day after
(a) the later of (i) the earlier of the occurrence of the (x) Escrowed Property
Distribution Date, or (y) Phase II Termination Event, (ii) the date by when the
Disposition Assets (the equity or partnership interest of (w) Cumulous Holding
Corp. in Cumulous Communications, (x) Geotek in GMSI, and (y) Geotek in Geotek
Argentina) have been either (1) reduced to Cash, or (2) abandoned pursuant to
section 554 of the Bankruptcy Code, and (iii) the date by when all Disputed
Claims shall have been Allowed or disallowed by Final Order or (b) such other
distribution dates as the Bankruptcy Court may determine).
In accordance with the Plan, unless otherwise provided in the Plan or the
order confirming the Plan (the "Confirmation Order"), the treatment of any Claim
or Interest under the Plan will be in full satisfaction, settlement, release and
discharge of (i) such Holder's respective Claim against or Interest in each and
all of the Debtors, and (ii) any other claims, obligations, rights, causes of
action and liabilities which such Holder may thereafter be entitled to assert
against any Debtor, whether known or unknown, foreseen or unforeseen, then
existing or thereafter arising, based in whole or in part upon any act, omission
or other occurrence taking
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place on or prior to the Effective Date, except as otherwise provided in the
Plan or the Confirmation Order.
A brief description, qualified in all respects by reference to the Plan
itself, of each Class of Claims and Interests and their respective treatments
under the Plan, is set forth below.
Class 1: Administrative Expense Claims. Class 1 Claims are not impaired.
Class 1 consists of (i) any Claim that constitutes a cost or expense of
administration of the Chapter 11 Cases of a kind specified in section 503(b) of
the Bankruptcy Code entitled to priority under section 507(a)(1) of the
Bankruptcy Code, including, without limitation, any actual and necessary costs
and expenses of preserving the estates of the Debtors, (ii) any Fee Claim to the
extent Allowed by Final Order under sections 330 and 331 of the Bankruptcy Code,
(iii) any Claim entitled to be treated as an Administrative Expense Claim
pursuant to a Final Order, (iv) any Cure Claim under an Assumed Executory
Contract, (v) any DIP Lender Claim, (vi) any Substantial Contribution Claim,
(vii) the D&O Retention Claim, (viii) the Merrill Lynch Fee Claim to the extent
Allowed by Final Order,(13) (ix) the IBJ Whitehall Fee Claim to the extent
Allowed by Final Order, (x) the 15% Secured Notes Indenture Trustee Fee Claim to
the extent Allowed by Final Order, (xi) the 15% Secured Notes Cash Collateral
Claim, and (xii) fees or charges assessed against the estates of the Debtors
under section 1930 of
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(13) Pursuant to Section 4.16.J of the Plan, the Majority Holders and HNS
are deemed to have supported the plan of reorganization described in
paragraph 22 of the Cash Collateral Extension Order, and, in accordance
with Section 10.6 of the Amended Cash Collateral Terms and Conditions,
the ML Funds, IBJ Whitehall, and WTC shall each, upon submission to the
Debtors of reasonably detailed invoices, be reimbursed for all
reasonable costs, expenses, and charges (including, without limitation,
the reasonable fees and charges of their experts, consultants, and
legal counsel) incurred in connection with the Chapter 11 Cases to the
extent not previously reimbursed.
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chapter 123 of title 28 of the United States Code. For purposes of the Plan, the
term "Administrative Expense Claim" shall not include the Post-Confirmation
Budget Amount, the Employee Retention Payment and Post-Filing Date Intercompany
Claims, and provided further, that in the event either a Phase I Closing and/or
a Phase II Closing shall have occurred, the term "Administrative Expense Claim"
shall not include the 15% Secured Notes Cash Collateral Claim and the HNS Fee
Claim.
It is a condition precedent to Confirmation of the Plan that the sum of
(i) Allowed Administrative Expense Claims, Allowed Priority Tax Claims, Allowed
Other Priority Claims and Allowed Other Secured Claims as of the Confirmation
Hearing, (ii) the estimated Allowed amount of Disputed Administrative Expense
Claims, Disputed Priority Tax Claims, Disputed Other Priority Claims and
Disputed Other Secured Claims as of the Confirmation Hearing, and (iii) the
Post-Confirmation Budget Amount ($2.6 million), shall not exceed (x) in the
event a Phase I Closing and a Phase II Closing shall not have occurred, $15
million (exclusive of interest accruing on the 15% Secured Notes Cash Collateral
Claim and the DIP Lender Claims), or (y) in the event a Phase I Closing and/or a
Phase II Closing shall have occurred, $8 million (exclusive of interest accruing
on the DIP Lender Claims).
Whether the aforementioned condition to Confirmation of the Plan will be
satisfied will depend, inter alia, on (i) the Debtors' success in pursuing
voluntary reductions in fee claims expected to be asserted by certain
professionals in the Chapter 11 Cases, (ii) the Debtors' success in pursuing
voluntary reductions in Priority Tax Claims, (iii) the Debtors' success in
reducing Disputed Administrative Expense Claims to an amount equal to or less
than $250,000, and (iv) whether, based, inter alia, upon when the Effective Date
will occur and the
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time it will take to resolve Disputed General Unsecured Claims, there will be a
need to extend the Post-Confirmation Budget beyond May 2000.
Pursuant to the Plan, each Holder of a Class 1 Allowed Claim shall
receive, in full satisfaction, settlement, release and discharge thereof, (i)
Cash in an amount equal to such Allowed Administrative Expense Claim, without
interest, on or as soon as practicable after the Distribution Date, or (ii) such
amount, at such other date and upon such other terms as shall have been agreed
upon between the Holder of such Allowed Administrative Expense Claim and the
Debtors and, if required, approved by Final Order.
Class 2: Priority Tax Claims. Class 2 Claims are not impaired.
Class 2 consists of all Claims of governmental units of the kind specified
in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
The Debtors are in the process of negotiating with each Holder of a
Priority Tax Claim for the purpose of seeking significant reductions in the
amount of such Claims in consideration for which the Debtors would seek
authority to pay such reduced Claims prior to the Effective Date. The Debtors
estimate that the aggregate amount of Allowed Class 2 Priority Tax Claims will
not exceed $_____.(14)
Each Holder of a Class 2 Allowed Claim shall receive, at the sole
discretion of the Debtors, in full satisfaction, settlement, release and
discharge thereof, (i) Cash in an amount equal to such Allowed Priority Tax
Claim, without interest, or (ii) such amount, at such other
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(14) See Section IV.C.1 of this Disclosure Statement ("Classification and
Treatment of Claims and Interests - General - Class 1: Administrative
Expense Claims").
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date and upon such other terms as shall have been agreed upon between the Holder
of such Allowed Priority Tax Claim and the Debtors and, if required, approved by
Final Order.
Class 3: Other Priority Claims. Class 3 Claims are not impaired.
Class 3 consists of all Claims, other than Administrative Expense Claims
or Priority Tax Claims, entitled to priority in right of payment under section
507(a) of the Bankruptcy Code.
The Debtors estimate that the aggregate amount of Allowed Class 3 Other
Priority Claims will not exceed $____.(15)
Pursuant to the Plan, each Holder of a Class 3 Allowed Claim shall
receive, in full satisfaction, settlement, release and discharge thereof, (i)
Cash in an amount equal to such Allowed Other Priority Claim, without interest,
or (ii) such amount, at such other date and upon such other terms as shall have
been agreed upon between the Holder of such Allowed Other Priority Claim and the
Debtors and, if required, approved by Final Order.
Class 4: 15% Notes Claims. Class 4 Claims are impaired.
Class 4 consists of all 15% Notes Claims. Class 4 Claims arise from the
15% Secured Notes issued pursuant to the 15% Secured Notes Indenture. The 15%
Secured Notes were principally secured, in whole or in part, by a pledge of the
common stock of Geotek U.S. Networks and approximately $27 million of cash
collateral resulting from pre-Filing Date asset sales. Approximately fifty-nine
(59) of the Debtors, including Gelico and Geotek License Holdings, guaranteed
Geotek's obligations under the 15% Secured Notes Indenture.
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(15) See Section IV.C.1 of this Disclosure Statement ("Classification and
Treatment of Claims and Interests - General - Class 1: Administrative
Expense Claims").
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The Debtors estimate that the aggregate amount of Allowed Class 4 Claims
will not exceed $153.5 million, excluding original issue discount accruable
after the Filing Date.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, and subject to the provisions of Sections 3.5(A)(3), 3.5(A)(4), 4.1
and 4.4 of the Plan, each Holder of an Allowed 15% Notes Claim shall receive, in
full satisfaction, settlement, release and discharge thereof: (i)(a) its Pro
Rata share of (1) Cash in an amount equal to, or shares of Nextel Stock having
an aggregate Market Value equal to, $103,625,171, together with 78.5% of the
difference between (x) $10 million, and (y) the Nextel Escrow Cash, (2) the 15%
Secured Notes Phase I Cash (i.e., $12,690,750), (3) 15% Secured Notes Cash
Collateral in an amount equal to $5,584,079, and (4) the Cumulous Net Proceeds
(net proceeds realized from the disposition of Cumulous Holding's interest in
Cumulous Communications), on or as soon as practicable after the Distribution
Date, or (b) such amount, at such other date and upon such other terms as shall
have been agreed upon between the Holder of such Allowed 15% Notes Claim and the
Debtors and, if required, approved by Final Order; and (ii)(a) if Nextel shall
have failed to assert a Nextel Escrow Claim (the claim(s) of Nextel against the
Debtors, HNS and/or WTC in an amount in excess of $100,000 in the aggregate
arising under Section 6.01 or any other provisions of the Nextel Purchase
Agreement or any provision of the License Assignment Agreement as determined by
Final Order or as may be agreed upon by the applicable parties and approved by
Final Order) on or before the Escrowed Property Distribution Date, such Holder's
Pro Rata share of 78.5% of the Nextel Escrow Cash ($7,850,000 together with any
income, profits or interest thereon), on or as soon as practicable after the
Escrowed Property Distribution Date, (b) if on or before the Escrowed Property
Distribution Date, a Nextel Escrow Claim is
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asserted against (1) the Debtors, its Pro Rata share of (x) 78.5% of the Net
Nextel Escrow Cash, and (y) Net Available Cash (Cash in an amount equal to the
difference between Available Cash and the sum of Allowed Administrative Expense
Claims, Allowed Priority Tax Claims, Allowed Other Priority Claims, Allowed
Other Secured Claims, the Disputed Claims Cash Reserve Amount (i.e., Cash in an
amount equal to the full amount asserted by a Holder of a Disputed
Administrative Expense Claim or a Disputed priority Claim) and the
Post-Confirmation Budget Amount) in an amount up to 78.5% of the Nextel Escrow
Claim, (2) HNS, such Holder's Pro Rata share of (x) 78.5% of the Net Nextel
Escrow Cash (the difference between Nextel Escrow Cash and the Nextel Escrow
Claim), and (y) Cash in an amount equal to 78.5% of the Nextel Escrow Claim,
which Cash amount HNS shall pay to WTC for and on behalf of the Holders of 15%
Notes Claims, or (3) WTC, 78.5% of the Net Nextel Escrow Cash, on or as soon as
practicable after the Escrowed Property Distribution Date, or (c) such amount,
at such other date and upon such other terms as shall have been agreed upon
between the Holder of such Allowed 15% Notes Claim and the Debtors and, if
required, approved by Final Order.
In the event that one or more of the 15% Secured Notes Phase I Licenses
cannot be assigned to Nextel due to the fact that the Debtors do not have good
and marketable title to such 15% Secured Notes Phase I License(s), then each
Holder of an Allowed 15% Notes Claim shall receive its Pro Rata share of Net
Available Cash in an aggregate amount up to that portion of the Phase I Purchase
Price allocated to such 15% Secured Notes Phase I License(s) in the Nextel
Purchase Agreement.
In the event that prior to the Phase II Closing, the Phase II Purchase
Price is reduced due to the fact that one or more of the 15% Secured Notes Phase
II Licenses cannot be
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assigned to Nextel as a result of the fact that the Debtors do not have good and
marketable title to such 15% Secured Notes Phase II License(s), then each Holder
of an Allowed 15% Notes Claim shall receive its Pro Rata share of Net Available
Cash in an aggregate amount up to the amount by which the Phase II Purchase
Price has been reduced.
The maximum recovery for Holders of Allowed Claims in Class 4 is
$129,750,000, exclusive of the Cumulous Net Proceeds.
Assuming that either (i) a Nextel Escrow Claim is not asserted against
WTC, the Debtors or HNS, or (ii) (a) a Nextel Escrow Claim is asserted against
the Debtors and such Claim is not greater than the amount of Net Available Cash,
or (b) a Nextel Escrow Claim is asserted against HNS, and further assuming that
no portion of the Cash distribution will be needed to fund in part a Net
Available Cash Deficiency Amount, then each Holder of an Allowed 15% Notes Claim
shall receive a Distribution equal to 84.5% of such Holder's Allowed 15% Notes
Claim, together with the Cumulous Net Proceeds. See Section I.C. of this
Disclosure Statement ("Summary of Distributions to Be Made Pursuant to the
Plan"). In the event a Nextel Escrow Claim is asserted against the Debtors in an
amount greater than the amount of Net Available Cash, then the Distribution of
Nextel Stock and Cash to each Holder of an Allowed 15% Notes Claim will result
in a Distribution in an amount less than 84.5% of such Holder's Allowed 15%
Notes Claim. Finally, in the event a Nextel Escrow Claim is asserted against
WTC, each Holder of an Allowed 15% Notes Claim will receive a Distribution of
Nextel Stock and Cash in an amount less than 84.5% of such Holder's Allowed 15%
Notes Claim.
B. In the event that (i) a Phase I Closing shall have occurred, and (ii) a
Phase II Termination Event shall have occurred, and subject to the provisions of
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Sections 3.5(B)(3) and 4.1 of the Plan, then: (1) each Holder of an Allowed 15%
Notes Claim shall receive, in full satisfaction, settlement, release and
discharge thereof, (a) its Pro Rata share of (i) the 15% Secured Notes Phase I
Cash ($12,690,750); (ii) Cash in an amount equal to the difference between the
amount of the 15% Secured Notes Cash Collateral and the 15% Secured Notes Cash
Collateral Contribution Amount (15% Secured Notes Cash Collateral in an amount
equal to the Net Available Cash Deficiency Amount); and (iii) Net Available Cash
if any, on or as soon as practicable after the Distribution Date, or (b) such
amount, at such other date and upon such other terms as shall have been agreed
upon between the Holder of such Allowed 15% Notes Claim and the Debtors and, if
required, approved by Final Order, and (2) in accordance with the provisions of
Section 1.02(a) of the License Assignment Agreement, and subject to (a) the
consent and approval of the FCC to the transfer and assignment of the 15%
Secured Notes Phase II Licenses to WTC (or its nominee or designee), and (b) to
the extent applicable, the expiration or termination of all waiting periods
under the HSR Act and the rules and regulations promulgated thereunder, the
Debtors shall assign and transfer to WTC (or its nominee or designee) for and on
behalf of the Holders of the 15% Notes Claims, all of the Debtors' rights, title
and interest in the 15% Secured Notes Phase II Licenses, on or as soon as
practicable after the Distribution Date.
In the event that one or more of the 15% Secured Notes Phase I Licenses
cannot be assigned to Nextel due to the fact that the Debtors do not have good
and marketable title to such 15% Secured Notes Phase I License(s), then each
Holder of an Allowed 15% Notes Claim shall receive its Pro Rata share of Net
Available Cash in an aggregate amount up to that portion
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of the Phase I Purchase Price allocated to such 15% Secured Notes Phase I
License(s) in the Nextel Purchase Agreement.
The maximum recovery for Holders of Allowed Claims in Class 4 is $36.45
million in Cash and the 15% Secured Notes Phase II Licenses.
Assuming that $16,274,436 of the 15% Secured Notes Cash Collateral is
available for distribution to Holders of Allowed 15% Notes Claims but Net
Available Cash is not available for distribution to Holders of Allowed 15% Notes
Claims due to the existence of a Net Available Cash Deficiency Amount, and
assuming further the 15% Secured Notes Phase II Licenses have an aggregate value
equal to $111,475,171 (each such FCC License having a value equal to the amount
allocated to it in the Nextel Purchase Agreement), then, each Holder of an
Allowed 15% Notes Claim will receive a distribution having a value equal to
approximately 96.4% of such Holder's Allowed 15% Notes Claim. See Section I.C.
of this Disclosure Statement ("Summary of Distributions to Be Made Pursuant to
the Plan"). The actual recovery for Holders of Allowed 15% Notes Claims may
materially vary depending upon (i) the amount of the Net Available Cash
Deficiency Amount, and (ii) the actual proceeds which may be received from the
sale of the 15% Secured Notes Phase II Licenses. Based on the bids received from
Individual License Buyers at the Auction, it is more likely than not that the
15% Secured Notes Phase II Licenses would be sold by WTC for an amount
substantially less than $111,475,171. See Section III.G.2 of this Disclosure
Statement ("The Auction Process").
C. In the event that a Nextel Termination Event shall have occurred, then,
upon payment of the 15% Secured Notes Contribution Amount, and subject to the
provisions of Section 4.1 of the Plan, (i) each Holder of an Allowed 15% Note
Claim shall receive, in full
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satisfaction, settlement, release and discharge thereof (together with the Cash
Distribution to be made to WTC pursuant to Section 3.2 of the Plan on account of
the 15% Secured Notes Cash Collateral Claim), (a) its Pro Rata share of (1) the
Net 15% Secured Notes Cash Collateral, (2) 66.7% of Net Available Cash, and (3)
the NB3 Escrow Proceeds, on or as soon as practicable after the Distribution
Date, or (b) such amount, at such other date and upon such other terms as shall
have been agreed upon between the Holder of such Allowed 15% Notes Claim and the
Debtors and, if required, approved by Final Order, and (ii) in accordance with
the provisions of Section 1.02(a) of the License Assignment Agreement, and
subject to (a) the consent and approval of the FCC to the transfer and
assignment of the 15% Secured Notes Phase I Licenses and the 15% Secured Notes
Phase II Licenses to WTC (or its nominee or designee), and (b) to the extent
applicable, the expiration and termination of all waiting periods under the HSR
Act and the rules and regulations promulgated thereunder, the Debtors shall
assign and transfer to WTC (or its nominee or designee) for and on behalf of the
Holders of the 15% Notes Claims, all of the Debtors' rights, title and interest
in the 15% Secured Notes Phase I Licenses and the 15% Secured Notes Phase II
Licenses, on or as soon as practicable after the Distribution Date. 1.
Assuming that $24,292,150 of the 15% Secured Notes Cash Collateral and NB3
Escrow Proceeds is available for distribution to Holders of Allowed 15% Notes
Claim but Net Available Cash is not available for distribution to Holders of
Allowed 15% Notes Claims due to the existence of a Net Available Cash Deficiency
Amount and assuming the 15% Secured Notes Phase I Licenses and 15% Secured Notes
Phase II Licenses have an aggregate value equal to $124,165,921 (each such FCC
License having a value equal to the amount allocated to it in the Nextel
Purchase Agreement), then, each Holder of an Allowed 15% Notes Claim will
receive a
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distribution having a value equal to approximately 96.7% of such Holder's
Allowed 15% Notes Claim. The actual recovery for Holders of Allowed 15% Notes
Claims may materially vary depending upon (i) the amount of WTC Cash Collateral
and Net Available Cash available for distribution on the Distribution Date,
which amounts will depend upon the actual Net Available Cash Deficiency Amount,
and (ii) the actual proceeds which may be received from the sale of the 15%
Secured Notes Phase I Licenses and the 15% Secured Notes Phase II Licenses.
Based on the bids received from Individual License Buyers at the Auction, it is
more likely than not that the 15% Secured Notes Phase I Licenses and the 15%
Secured Notes Phase II Licenses would be sold by WTC for an amount substantially
less than $124,165,921. See Section III.G.2 of this Disclosure Statement (the
"Auction Process").
Class 5: HNS Claims. Class 5 Claims are impaired. Class 5 consists of all
HNS Claims, which arise under (i) the HNS License Loan Agreement which was
secured by a pledge of (a) the common stock of Geotek License Holdings and (b)
the Intercompany Promissory Note, and (ii) the HNS Vendor Credit Financing
Agreement which was secured by a pledge of the common stock of Geotek License
Holdings.
The Debtors estimate that the aggregate amount of Allowed Class 5 Claims
will not exceed $42.2 million.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, and subject to the provisions of Sections 3.6(A)(3), 3.6(A)(4), 4.1
and 4.4 of the Plan, HNS shall receive, in full satisfaction, settlement,
release and discharge thereof: (i)(a)(1) Cash in an amount equal to, or shares
of Nextel Stock having an aggregate Market Value equal to, $17,213,829, together
with 21.5% of the difference between (x) $10 million, and (y) the Nextel
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Escrow Cash, (2) the HNS Phase I Cash ($6,470,250), and (3) Cash in an amount
equal to $1,915,921, on or as soon as practicable after the Distribution Date,
or (b) such amount, at such other date and upon such other terms as shall have
been agreed upon between HNS and the Debtors and, if required, approved by Final
Order; and (ii)(a) if Nextel shall have failed to assert a Nextel Escrow Claim
on or before the Escrowed Property Distribution Date, 21.5% of the Nextel Escrow
Cash ($2,150,000 together with any income, profits or interest thereon), on or
as soon as practicable after the Escrowed Property Distribution Date, (b) if on
or before the Escrowed Property Distribution Date, a Nextel Escrow Claim is
asserted against (1) the Debtors, (x) 21.5% of the Net Nextel Escrow Cash, and
(y) Net Available Cash in an amount up to 21.5% of the Nextel Escrow Claim, (2)
HNS, 21.5% of the Net Nextel Escrow Cash, or (3) WTC, (x) 21.5% of the Net
Nextel Escrow Cash, and (y) Cash in an amount equal to 21.5% of the Nextel
Escrow Claim, which Cash amount WTC shall pay to HNS, on or as soon as
practicable after the Escrowed Property Distribution Date, or (c) such amount,
at such other date and upon such other terms as shall have been agreed upon
between HNS and the Debtors and, if required, approved by Final Order.
In the event that one or more HNS Phase I Licenses cannot be assigned to
Nextel due to the fact that the Debtors do not have good and marketable title to
such HNS Phase I License(s), then HNS shall receive Net Available Cash in an
amount up to that portion of the Phase I Purchase Price allocated to such HNS
Phase I License(s) in the Nextel Purchase Agreement.
In the event that prior to the Phase II Closing, the Phase II Purchase
Price is reduced due to the fact that one or more HNS Phase II License(s) cannot
be assigned to Nextel as
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a result of the fact that the Debtors do not have good and marketable title to
such HNS Phase II License(s), then HNS shall receive Net Available Cash in an
amount up to the amount by which the Phase II Purchase Price has been reduced.
The maximum recovery for HNS is $27,750,000.
Assuming that either (i) a Nextel Escrow Claim is not asserted against
WTC, the Debtors or HNS, or (ii) (a) a Nextel Escrow Claim is asserted against
the Debtors and such Claim is not greater than the amount of Net Available Cash,
or (b) a Nextel Escrow Claim is asserted against WTC, and further assuming that
no portion of the Cash distributed will be needed to fund a portion of the Net
Available Cash Deficiency Amount, then HNS shall receive a distribution equal to
65.8% of such Holder's Allowed HNS Claim. In the event a Nextel Escrow Claim is
asserted against the Debtors in an amount greater than the amount of Net
Available Cash, then the distribution of Nextel Stock and Cash to HNS will
result in a distribution equal to less than 65.8% of such Holder's Allowed HNS
Claim. Finally, in the event a Nextel Escrow Claim is asserted against HNS, HNS
will receive a distribution of Nextel Stock and Cash in an amount less than
65.8% of such Holder's Allowed HNS Claim.
B. In the event that (i) a Phase I Closing shall have occurred, and (ii) a
Phase II Termination Event shall have occurred, and subject to the provisions of
Sections 3.6(B)(3) and 4.1 of the Plan then: (1) HNS shall receive, in full
satisfaction, settlement, release and discharge thereof, (a) Cash in an amount
equal to the HNS Phase I Cash Payment ($3,900,000), or (b) such amount, at such
other date and upon such other terms as shall have been agreed upon between HNS
and the Debtors and, if required, approved by Final Order, and (2) in accordance
with the provisions of Section 1.02 of the License Assignment Agreement, and
subject to (a) the consent
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and approval of the FCC to the transfer and assignment of the HNS Phase II
Licenses to HNS, and (b) to the extent applicable, the expiration or termination
of all waiting periods under the HSR Act and the rules and regulations
promulgated thereunder, the Debtors shall assign and transfer to HNS all of the
Debtors' rights, title and interest in the HNS Phase II Licenses, on or as soon
as practicable after the Distribution Date.
In the event that one or more HNS Phase I Licenses cannot be assigned to
Nextel due to the fact that the Debtors do not have good and marketable title to
such HNS Phase I License(s), then HNS shall receive Net Available Cash in an
amount up to that portion of the Phase I Purchase Price allocated to such HNS
Phase I License(s) in the Nextel Purchase Agreement.
The maximum recovery for HNS is $3,900,000 in Cash and the HNS Phase II
Licenses.
Assuming that the HNS Phase II Licenses have an aggregate value equal to
$19,363,829 (each such HNS Phase II License having a value equal to the amount
allocated to it in the Nextel Purchase Agreement), then HNS will receive a
Distribution having a value equal to approximately 55.1% of the Allowed HNS
Claim. The actual recovery to HNS may materially vary depending upon the actual
proceeds which may be realized from the sale of the HNS Phase II Licenses. Based
on the bids received from Individual License Buyers at the Auction, it is more
likely than not that the HNS Phase II Licenses would be sold by HNS for an
amount substantially less than $19,363,829. See Section III.G.2 of this
Disclosure Statement ("The Auction Process").
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C. In the event that a Nextel Termination Event shall have occurred, then
upon payment of the HNS Contribution Amount to the Debtors, and subject to the
provisions of Section 4.1 of the Plan: (i) HNS shall receive in full
satisfaction, settlement, release and discharge thereof, 33.3% of Net Available
Cash, and (ii) in accordance with the provisions of Section 1.02(a) of the
License Assignment Agreement, and subject to (a) the consent and approval of the
FCC to the transfer and assignment of the HNS Phase I Licenses and the HNS Phase
II Licenses to HNS, and (b) to the extent applicable, the expiration or
termination of all waiting periods under the HSR Act and the rules and
regulations promulgated thereunder, the Debtors shall assign and transfer to HNS
all of the Debtors' rights, title and interest in the HNS Phase I Licenses and
the HNS Phase II Licenses, on or as soon as practicable after the Distribution
Date.
Assuming that Net Available Cash is not available for Distribution to HNS
due to the existence of a Net Available Cash Deficiency Amount, and assuming
further that the HNS Phase I Licenses and HNS Phase II Licenses have an
aggregate value equal to $25,834,079 (each such HNS Phase I License and HNS
Phase II License having a value equal to the amount allocated to it in the
Nextel Purchase Agreement), then HNS will receive a distribution having a value
equal to 51% of the Allowed HNS Claim. The actual recovery to HNS may materially
vary depending upon the actual proceeds which may be realized from the sale of
the HNS Phase I Licenses and the HNS Phase II Licenses. Based on the bids
received from Individual License Buyers at the Auction, it is more likely than
not that the HNS Phase I Licenses and the HNS Phase II Licenses would be sold by
HNS for an amount substantially less than $25,834,079. See Section III.G.2 of
the Disclosure Statement ("The Auction Process").
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Class 6: Other Secured Claims. Class 6 Claims are impaired.
Class 6 consists of the Other Secured Claims. The Debtors estimate that
the aggregate amount of Allowed Class 6 Claims will not exceed $_____. See
Section IV.C.1 of this Disclosure Statement ("Classification and Treatment of
Claims and Interests - General - Class 1: Administrative Expense Claims").
Each Holder of an Allowed Other Secured Claim, in full satisfaction,
settlement, release and discharge thereof, will receive, in the sole discretion
of the Debtors, (i) Cash in an amount equal to such Allowed Other Secured Claim,
on or as soon as practicable after the Distribution Date, (ii) the properly
securing such Allowed Other Secured Claim, or (iii) such amount, at such other
date and upon such other terms as shall have been agreed upon between the Holder
of such Allowed Other Secured Claim and the Debtors and, if required, approved
by Final Order.
Class 7: S-C Rig Senior Loan Claims. Class 7 Claims are impaired.
Class 7 consists of the S-C Rig Senior Loan Claims. Class 7 Claims arise
under the S-C Rig Loan Agreement and are unsecured.
The Debtors estimate that the aggregate amount of Allowed Class 7 Claims
will not exceed $40.8 million.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, the Holder of the Allowed S-C Rig Senior Loan Claims shall receive, in
full satisfaction, settlement, release and discharge thereof, (i)(a) if Class 9
shall have accepted the Plan and the Unsecured 12% Notes Indenture Trustee shall
not have objected to Confirmation of the Plan, (1) such Holder's Unsecured Pro
Rate Share of the Net Distributable Cash (the
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difference between Net Available Cash and any amounts to be paid to the Holders
of 15% Secured Notes and HNS pursuant to Sections 3.5 and 3.6 of the Plan), plus
(2) the Class 7 Subordination Payment (the difference between the aggregate
amount of each Holder of an Allowed Class 9 Claim's Unsecured Pro Rata Share of
Net Distributable Cash and $______ of said amount), or (b) if Class 9 shall have
rejected the Plan or the Unsecured 12% Notes Indenture Trustee shall have
objected to Confirmation of the Plan, (1) such Holder's Unsecured Pro Rata Share
of the Net Distributable Cash, plus (2) the Class 9 Distribution Amount (the
aggregate amount of each Holder of an Allowed Class 9 Claim's Unsecured Pro Rata
Share of Net Distributable Cash), on or as soon as practicable after the Final
Distribution Date, or (ii) such amount, at such other date and upon such other
terms as shall have been agreed upon between the Holder of such Allowed S-C Rig
Senior Loan Claims and the Debtors and, if required, approved by Final Order. 1.
In the event that Class 9 shall have accepted the Plan and the Unsecured
12% Notes Indenture Trustee shall not have objected to Confirmation of the Plan,
and assuming (i) a Nextel Escrow Claim has not been asserted against the
Debtors, and (ii) the amount of Net Distributable Cash available is $12.5
million, then S-C Rig shall receive Cash in an amount equal to __% of its
Allowed S-C Rig Senior Loan Claims. In the event Class 9 shall have rejected the
Plan or the Unsecured 12% Notes Indenture Trustee shall have objected to
Confirmation of the Plan, then S-C Rig shall receive Cash in an amount equal to
__% of its Allowed S-C Rig Senior Loan Claim. S-C Rig's actual recovery may
materially differ depending upon (a) the Allowed Amount of Class 8 Claims, (b)
the assertion of a Nextel Escrow Claim, (c) whether and to what extent
Reorganized Geotek will be successful in liquidating the
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Disposition Assets, (d) whether Administrative Expense Claims will ultimately be
Allowed in an aggregate amount equal to or less than $15 million, and (e) the
actual amount of Net Distributable Cash available on the Final Distribution
Date.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of the Allowed S-C Rig Senior
Loan Claims shall not receive or retain any property under the Plan in respect
of such Claims.
Class 8: General Unsecured Claims. Class 8 Claims are impaired.
Class 8 consists of the General Unsecured Claims. Class 8 Claims consist
of all unsecured Claims which are not otherwise separately classified in this
Plan, including (i) the Unsecured 12% Notes Indenture Trustee Fee Claim in the
event that either (x) Class 9 votes to reject the Plan, or (y) the Unsecured 12%
Notes Indenture Trustee objects to Confirmation of the Plan, (ii) any Secondary
Liability Claims not otherwise included in a separate Class, and (iii) the
Claims of the Holders of Other Secured Claims to the extent such Claims exceed
the value of such Holders' Collateral, but shall not include the Pre-Filing Date
Intercompany Claims, the HNS Unsecured Claims, or the Deficiency Claims.
The Debtors estimate that the aggregate amount of Allowed Class 8 Claims
will not exceed $____ million.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, each Holder of an Allowed General Unsecured Claim will receive, in
full satisfaction, settlement, release and discharge thereof, (i) its Unsecured
Pro Rata Share of the Net Distributable Cash, on or as soon as practicable after
the Final Distribution Date, or (ii) such amount, at such other date and upon
such other terms as shall have been agreed upon between the
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Holder of such Allowed General Unsecured Claim and the Debtors and, if required,
approved by Final Order
Assuming (i) a Nextel Escrow Claim is not asserted against the Debtors,
and (ii) the amount of Net Distributable Cash available is $12.5 million, then
each Holder of an Allowed Class 8 Claim shall receive Cash in an amount equal to
__% of such Holder's Allowed General Unsecured Claim. Such Holder's actual
recovery may materially differ depending upon (a) the Allowed amount of Class 8
Claims, (b) the assertion of a Nextel Escrow Claim, (c) whether and to what
extent Reorganized Geotek will be successful in liquidating the Disposition
Assets, (d) whether Administrative Expense Claims will ultimately be Allowed in
an aggregate amount equal to or less than $15 million, and (e) the actual amount
of Net Distributable Cash available on the final Distribution Date.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of an Allowed General
Unsecured Claim shall not receive or retain any property under the Plan in
respect of such Claim.
Class 9: Unsecured 12% Notes Claims. Class 9 Claims are impaired. Class 9
consists of the Unsecured 12% Notes Claims.
Class 9 Claims arise under the Unsecured 12% Notes issued pursuant to the
Unsecured 12% Notes Indenture. The Unsecured 12% Notes are unsecured. Under the
Unsecured 12% Note Indenture, the 12% Unsecured Note Claims are subordinated to
the Claims arising under the 15% Secured Notes Indenture, the HNS License Loan
Agreement, the HNS Vendor Credit Financing Agreement and the S-C Rig Senior
Loan.
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The Debtors estimate that the aggregate amount of Allowed Class 11 Claims
will not exceed $78.3 million.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, (i) if the Holders of Class 9 Claims shall have accepted the Plan and
the Unsecured 12% Notes Indenture Trustee shall not have objected to
Confirmation of the Plan, and subject to the provisions of Section 7.08 of the
Unsecured 12% Notes Indenture and Section 4.1 of the Plan, each Holder of an
Allowed Unsecured 12% Notes Claim will receive, in full satisfaction,
settlement, release and discharge thereof, (a) its Pro Rata share of
$___________, on or as soon as practicable after the Final Distribution Date, or
(b) such amount, at such other date and upon such other terms as shall have been
agreed upon between the Holder of such Allowed Unsecured 12% Notes Claim and the
Debtors and, if required, approved by Final Order, or (ii) in the event the
Holders of Class 9 Claims shall have rejected the Plan or the Unsecured 12%
Notes Indenture Trustee shall have objected to Confirmation of the Plan, each
Holder of an Allowed Unsecured 12% Notes Claim will not receive or retain any
property under the Plan and the Holder of the S-C Rig Senior Loan Claims shall
receive the amount of Net Distributable Cash otherwise distributable to Holders
of Unsecured 12% Notes Claims in full satisfaction, settlement, release and
discharge of any and all subordination rights which such Holder may otherwise
have with respect to the distributions to be made to Holders of Unsecured 12%
Notes Claims. 1.
In the event Class 9 shall have accepted the Plan and the Unsecured 12%
Notes Indenture Trustee shall not have objected to Confirmation of the Plan, and
assuming (i) a Nextel Escrow Claim is made against the Debtors, and (ii) Net
Distributable Cash available is $12.5 million, then each Holder of an Allowed
Class 9 Claim shall receive Cash in an amount
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equal to __% of such Holder's Allowed Unsecured 12% Notes Claim. Such Holder's
actual recovery may materially differ depending upon (a) the Allowed amount of
Class 8 Claims, (b) the assertion of a Nextel Escrow Claim, (c) whether and to
what extent Reorganized Geotek will be successful in liquidating the Disposition
Assets, (d) whether Administrative Expense Claims will ultimately be Allowed in
an aggregate amount equal to or less than $15 million, and (e) the actual amount
of Net Distributable Cash available on the Final Distribution Date.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of an Allowed Unsecured 12%
Notes Claim shall not receive or retain any property under the Plan in respect
of such Claim.
Class 10: Series H Preferred Stock Interests. Class 10 Interests are
impaired.
Class 10 consists of all Series H Preferred Stock Interests. Under the
Plan, all Series H Preferred Stock will be cancelled, and each Holder thereof
shall not receive or retain any property for or on account of such Interest.
Class 11: Series I and K Preferred Stock Interests. Class 11 Interests are
impaired.
Class 11 consists of all Series I and K Preferred Stock Interests. Under
the Plan, all Series I Preferred Stock and Series K Preferred Stock will be
cancelled, and each Holder thereof shall not receive or retain any property for
or on account of such Interest.
Class 12: Series L Preferred Stock Interests. Class 12 Interests are
impaired.
Class 12 consists of all Series L Preferred Stock Interests. Under the
Plan, all Series L Preferred Stock will be cancelled, and each Holder thereof
shall not receive or retain any property for or on account of such Interest.
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Class 13: Series M Preferred Stock Interests. Class 13 Interests are
impaired.
Class 13 consists of all Series M Preferred Stock Interests. Under the
Plan, all Series M Preferred Stock will be cancelled, and each Holder thereof
shall not receive or retain any property for or on account of such Interest.
Class 14: Series N Preferred Stock Interests. Class 14 Interests are
impaired.
Class 14 consists of all Series N Preferred Stock Interests. Under the
Plan, all Series N Preferred Stock will be cancelled, and each Holder thereof
shall not receive or retain any property for or on account of such Interest.
Class 15: Series O, P, Q, and T Preferred Stock Interests. Class 15
Interests are impaired.
Class 15 consists of all Series O, P, Q, and T Preferred Stock Interests.
Under the Plan, all Series O Preferred Stock, Series P Preferred Stock, Series Q
Preferred Stock, and Series T Preferred Stock will be cancelled, and each Holder
thereof shall not receive or retain any property for or on account of such
Interest.
Class 16: Common Stock Interests. Class 16 Interests are impaired.
Class 16 consists of all Common Stock Interests. There are approximately
200 million outstanding shares of Old Common Stock.
Under the Plan, all Common Stock will be cancelled, and each Holder
thereof shall not receive or retain any property for or on account of such
Interest.
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Class 17: Continuing Subsidiary Stock Interests. Class 17 Interests are
impaired.
Class 17 consists of all Continuing Subsidiary Stock Interests.
All stock of the Continuing Subsidiaries will be cancelled, and each
Holder of a Continuing Subsidiary Stock Interest shall not receive or retain any
property on account of such Interest.
Class 18: Non-Continuing Subsidiary Stock Interests. Class 18 Interests
are impaired.
Class 18 consists of all Non-Continuing Subsidiary Stock Interests.
All stock of the Non-Continuing Subsidiaries will be cancelled, and each
Holder of a Non-Continuing Subsidiary Stock Interest shall not receive or retain
any property on account of such Interest.
D. Distribution of Nextel Stock
Unless a Nextel Termination Event occurs or Nextel elects to pay the
entire Phase II Purchase Price (as defined in the Nextel Purchase Agreement) in
Cash, the Holders of the 15% Secured Notes and HNS shall receive a Distribution
of Nextel Stock under the Plan. Pursuant to the Nextel Purchase Agreement,
Nextel has covenanted to (i) submit a request for a no-action letter (the
"No-Action Request") from the staff of the Securities Exchange Commission
("SEC") which would permit shares of Nextel Stock to be issued to Geotek by
Nextel for distribution to Geotek's creditors under the Plan without
registration of such shares under the Securities Act of 1933, as amended (the
"1933 Act"), based upon the provisions of section 1145(a) of the Bankruptcy Code
which exempts the offer and distribution of such shares under
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the Plan from federal and state securities registration requirements to the
extent Nextel is a "successor" to Geotek as said term is used in section
1145(a), and (ii) in the event that Nextel has not theretofore obtained the
no-action relief described in clause (i) of this sentence, as promptly as
practicable after the later of (a) the date on which Nextel receives (1) a DOJ
Consent, or (2) a District Court Order that is final and has not been stayed,
rescinded or modified, or (b) the date upon which all waiting periods under the
Hart-Scott-Rodin Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder applicable to the transactions
contemplated by the Nextel Purchase Agreement shall have expired or been
terminated, Nextel shall use its reasonable best efforts to diligently file and
cause to become effective a registration statement (the "Registration
Statement") on behalf of Geotek and its creditors who shall receive the Nextel
Stock under the Plan to permit the offer, sale and distribution of such Nextel
Stock by Geotek to its creditors and by such creditors. See Section VII of this
Disclosure Statement ("Applicability of Federal and Other Securities Laws to
Nextel Stock to be Distributed Under the Plan").
On March 29, 1999, Nextel filed the No-Action Request with the SEC.
The Nextel Stock is class A common stock, par value $.001 per share, of
Nextel. The Nextel Stock is publicly traded on the NASDAQ national stock market.
Nextel is subject to the informational requirements of the Securities and
Exchange Act of 1934 (the "Exchange Act"). In accordance with the Exchange Act,
Nextel files reports, proxy statements and other information with the
Commission. The reports, proxy statements and other information filed with the
Commission can be inspected and copied at the public reference facilities that
the Commission maintains at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C.
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20549, and the Commission's Regional Offices located at 7 World
Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549.
Additionally, the Commission maintains a Web site on the Internet that is
located at http://www.sec.gov and that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.
For the benefit of creditors who may receive Distributions of Nextel Stock
under the Plan, attached as Appendix "C" hereto is Nextel's Form 10-K Annual
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the Fiscal Year Ended December 31, 1998.
E. Means for Implementation and Execution of Plan
1. Corporate Governance
On the Effective Date and automatically and without further action, the
following individuals will serve as members of the Board of Directors of each of
Reorganized Geotek and the Continuing Subsidiaries: [insert] Anne Eisele shall
continue to serve as the President, Chief Financial Officer and Treasurer of
Reorganized Geotek and each of the Continuing Subsidiaries.
All Cash held by Reorganized Geotek, in any accounts, shall be
invested in accordance with section 345 of the Bankruptcy Code or as otherwise
permitted by order of the Bankruptcy Court.
On or before the Effective Date of the Plan, Geotek will adopt the New
Charter and New By-Laws, substantially in the form of those to be filed with the
Bankruptcy Court and
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made available to parties in interest on or before the Exhibit Filing Date, and
will file the New Charter with the Secretary of State of Delaware.
Reorganized Geotek and the Continuing Subsidiaries will continue to exist
after the Effective Date as separate corporate entities, in accordance with the
law applicable in the jurisdictions in which they are incorporated and pursuant
to their respective certificates of incorporation and by-laws in effect prior to
the Effective Date, except to the extent such certificates of incorporation and
by-laws are amended as provided by the Plan. The Liquidating Subsidiaries are
being liquidated under the Plan and will be dissolved under applicable state law
as soon as practicable after the Effective Date.
2. Post-Confirmation Budget
Attached as Exhibit "O" to the Plan is the budget (the "Post-Confirmation
Budget") of Reorganized Geotek for the period commencing on the date the
Confirmation Order is entered by the Clerk of the Bankruptcy Court on the legal
docket (the "Confirmation Date") and terminating on the date Reorganized Geotek
is dissolved under applicable state law. The Confirmation Order shall provide
that the Debtors shall be authorized to use the 15% Secured Notes Cash
Collateral pursuant to the Post-Confirmation Budget and the Post-Confirmation
Cash Collateral Terms and Conditions for the period commencing on the
Confirmation Date and terminating on the Effective Date. In the event a Phase I
Closing and a Phase II Closing shall have occurred, the Debtors shall fund the
Post-Confirmation Budget for the period commencing on the Effective Date and
continuing to the date Reorganized Geotek is dissolved, from Available Cash.
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The Post-Confirmation Budget reflects costs and expenses of administering
the Debtors' estates from the Confirmation Date through the date Reorganized
Geotek is dissolved and, based on the Debtors' current estimates of such costs
and expenses, such costs and expenses shall not exceed $2.6 million.
3. Payment of Employee Retention Programs
Upon a Key Employee's Termination Date (as defined in the Key Employee
Retention Program), such Key Employee's Key Employee Retention Amount shall be
released from escrow and paid to such Key Employee in accordance with the Key
Employee Retention Program.
The Post-Confirmation Budget includes the Wind-Down Retention Amounts owed
to those Supplemental Retention Employees who will be terminated after the
Confirmation Date. The Wind-Down Retention Amounts will be paid to the
Supplemental Retention Employees in accordance with the Supplemental Employee
Retention Program and in accordance with the Post-Confirmation Budget.
4. Professional Fees and Expenses
In accordance with Section 4.17 of the Plan and pursuant to the
Confirmation Order, each Person retained or requesting compensation in the
Chapter 11 Cases for services rendered through the Confirmation Date, shall file
an application for the allowance of final compensation and reimbursement of
expenses herein on or before the thirtieth (30th) day after the Confirmation
Date. Objections to each such application shall be filed on or before the
sixtieth (60th) day after the Confirmation Date. Counsel to Reorganized Geotek
shall be entitled to reasonable and necessary compensation for services rendered
and the reimbursement
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for reasonable and necessary out-of-pocket disbursements incurred, consistent
with the Post-Confirmation Budget, with respect to the implementation and
consummation of the Plan subsequent to the Confirmation Date.
5. Dissolution of Non-Continuing Subsidiaries,
Continuing Subsidiaries and Reorganized Geotek
On or as soon as practicable after the Effective Date, Reorganized Geotek
will take all steps necessary to effectuate the effective dissolution of each of
the Non-Continuing Subsidiaries in accordance with applicable non-bankruptcy law
and as of the Effective Date the stock issued by each of the Non-Continuing
Subsidiaries shall be deemed terminated, cancelled and of no force and effect.
On or as soon as practicable after the Final Distribution Date, Reorganized
Geotek will take all steps necessary to effectuate the effective dissolution of
each of the Continuing Subsidiaries in accordance with applicable non-bankruptcy
law and as of the Effective Date the stock issued by each of the Continuing
Subsidiaries shall be deemed terminated, cancelled and of no force and effect.
On the date that Reorganized Geotek has fully performed its obligations pursuant
to the Plan, Reorganized Geotek shall be dissolved under applicable state law
and as of the Effective Date the Common Stock and Preferred Stock issued by
Geotek shall be deemed terminated, cancelled and of no force and effect.
6. D&O Escrow Agreement
On the Effective Date, [ ] and [ ] shall execute the D&O Escrow Agreement
and the escrow established thereunder shall be funded with the D&O Escrow Cash.
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7. Release of Liens, Contributions and Rights and
Interests with Respect to Cash Collateral
In the event that a Nextel Termination Event shall have occurred, Cash
required to (i) make the distributions provided for in Sections 3.2, 3.3, 3.4
and 3.7 of the Plan, (ii) fund the Disputed Claims Cash Reserve Amount, and
(iii) fund the Post-Confirmation Budget for the period from the Effective Date
to the date Reorganized Geotek shall be dissolved, shall be provided to
Reorganized Geotek by WTC in an amount equal to the difference between the Net
Available Cash Deficiency Amount and the HNS Contribution Amount (the "15%
Secured Notes Contribution Amount") and by HNS in an amount equal to 33.3% of
the Net Available Cash Deficiency Amount, provided that the aggregate amount to
be paid by HNS shall not exceed $2.5 million (the "HNS Contribution Amount").
The 15% Secured Notes Contribution Amount shall be paid to the Debtors or by the
release of the 15% Secured Notes Cash Collateral on the Effective Date. The HNS
Contribution Amount shall be paid to the Debtors from a Cash payment from HNS on
the Effective Date.
In the event that a Phase II Termination Event shall have occurred, Cash
required to fund the obligations listed in clauses (i), (ii) and (iii) above,
shall be provided to Reorganized Geotek by (a) WTC in an amount equal to the Net
Available Cash Deficiency Amount, which amount shall be paid from either the 15%
Secured Notes Phase I Cash or by the release of the 15% Secured Notes Cash
Collateral, and (b) HNS in an amount equal to $2,570,250, which amount shall be
paid from either the HNS Phase I Cash or from a Cash payment from HNS.
In the event a Phase I Closing and a Phase II Closing shall have occurred,
then as at the Effective Date: (i) upon receipt of the consideration to be
distributed on the Effective Date
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to WTC on behalf of the Holders of Allowed 15% Notes Claims pursuant to Section
3.5 and 4.5.A.2 of the Plan, WTC shall be deemed to have waived and released (a)
any right or interest in the NB3 Escrow Proceeds, (b) any right or interest in
the 15% Secured Notes Cash Collateral not released for payment to the Holders of
Allowed 15% Notes Claims pursuant to Section 3.5 of the Plan, (c) the right to
payment in respect of the 15% Secured Notes Cash Collateral Claim, and (d) the
right to payment in respect of the 15% Secured Notes Deficiency Claims, and (ii)
upon receipt of the consideration to be distributed on the Effective Date to HNS
pursuant to Section 3.6 and 4.5.A.3 of the Plan, HNS shall be deemed to have
waived and released the right to payment in respect of the (a) HNS Unsecured
Claims, and (b) HNS Deficiency Claims.
In the event a Phase I Closing and/or a Phase II Closing shall have
occurred, HNS shall be deemed to have waived and released the right to payment
in respect of the HNS Fee Claim.
8. Transfer of FCC Licenses in Connection with
Phase I Closing and/or Phase II Closing
In connection with a Phase I Closing and/or a Phase II Closing, and
pursuant to the provisions of Sections 1.02(a) and 1.04(a) of the License
Assignment Agreement, the Debtors shall, pursuant to the Plan and the
Confirmation Order, assign and transfer: (i) to WTC for and on behalf of the
Holders of 15% Notes Claims, all of the Debtors' rights, title and interest in
the 15% Secured Notes Phase I Licenses and/or the 15% Secured Notes Phase II
Licenses, and (ii) to HNS, all of the Debtors' rights, title and interest in the
HNS Phase I Licenses and/or the HNS Phase II Licenses. In connection with a
Phase I Closing and/or a Phase II Closing, and pursuant to the provisions of
Section 1.02(a) and 1.04(b) of the License Assignment Agreement, (a) WTC
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shall assign and transfer to Nextel all of WTC's rights, title and interest in
the 15% Secured Notes Phase I Licenses and/or the 15% Secured Notes Phase II
Licenses, and (b) HNS shall assign and transfer to Nextel, all of HNS' rights,
title and interest in the HNS Phase I Licenses and/or the HNS Phase II Licenses.
F. Substantive Consolidation
1. Generally
Substantive consolidation is an equitable remedy which the Bankruptcy
Court may be asked to apply in those chapter 11 cases involving affiliated
debtors. As contrasted with procedural consolidation,(16) substantive
consolidation may affect the substantive rights and obligations of creditors and
debtors. Substantive consolidation involves the pooling and merging of the
assets and liabilities of the affected debtors; all of the debtors in the
substantively consolidated group are treated as if they were a single
corporate/economic entity. Consequently, a creditor of one of the substantively
consolidated debtors is treated as a creditor of the substantively consolidated
group of debtors and issues of separate corporate ownership of property and
separate corporate liability on obligations are ignored. However, substantive
consolidation does not affect the debtors' separate corporate existence or
independent ownership of property for any purposes other than for making
distributions of property under a plan of reorganization or otherwise as
necessary to implement such plan.
- ----------
(16) Procedural consolidation is the administrative process (contemplated by
Bankruptcy Rule 1015(b)) whereby the proceedings of two or more
affiliated debtors are conducted as part of a single proceeding for the
convenience of the bankruptcy court and parties in interest. Procedural
consolidation does not affect the substantive rights of the debtors or
their respective creditors and interest holders.
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2. The Plan Contemplates the Substantive
Consolidation of the Debtors' Estates
Substantive consolidation in the Chapter 11 Cases will have the effect of
eliminating (i) cross-Corporate guaranties by one Debtor of the obligation of
another Debtor, (ii) duplicative claims against more than one Debtor in the
substantively consolidated group and (iii) intercompany claims between the
substantively consolidated Debtors. Absent substantive consolidation, the
allowance of these multiple claims has the effect of diluting the amounts
payable to holders of General Unsecured Claims generally, as a consequence of
such holders' having to share their distributions with additional holders or
holders of larger claims.
For substantive consolidation of the Debtors' estates to be ordered by the
Court, one or more of the following factors must be demonstrated to the
satisfaction of the Court: (i) the Debtors are an economically integrated group,
(ii) the Debtors' creditors reasonably believed they were dealing with the
corporate enterprise as a group, (iii) accounts of the affiliated corporations
have been intermingled, (iv) assets of the affiliated corporations have been
intermingled, and (v) substantive consolidation will enhance reorganization.
The Debtors anticipate that either prior to or during the Confirmation
Hearing, a motion will be made before the Bankruptcy Court for the entry of an
order providing for the substantive consolidation of all the Debtors. The
Debtors believe that an adequate and legally sufficient basis exists for the
Bankruptcy Court to grant such relief. Substantive consolidation will facilitate
an effective reorganization and foster fairness and uniformity of treatment of
Holders of Claims and Interests. The Plan provides that, as a condition to
confirmation, an order
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of the Bankruptcy Court will be entered providing for the substantive
consolidation of the Debtors (the "Substantive Consolidation Order").
The Substantive Consolidation Order will provide, inter alia, that on the
Effective Date: (i) all assets and all liabilities of the Debtors will be
treated as though the Debtors were merged, (ii) any obligation of any Debtor and
all guaranties thereof or related thereto executed by one or more of the Debtors
will be deemed to be one obligation of the consolidated Debtors, (iii) any
Claims filed or to be filed in connection with any such obligation and such
guaranties will be deemed one Claim against the consolidated Debtors, (iv) any
Claim filed in these Chapter 11 Cases will be deemed filed against the
consolidated Debtors, and (v) for purposes of determining the availability of
the right of set off under section 553 of the Bankruptcy Code, the Debtors will
be treated as one entity, so that, subject to the other provisions of section
553 of the Bankruptcy Code, debts due to any of the Debtors may be set off
against the debts of any of the Debtors.
G. Other Provisions of the Plan
The following paragraphs summarize certain additional significant
provisions of the Plan.
1. Vesting of Assets
Except as otherwise provided in the Plan or the Confirmation Order, on the
Effective Date, (i) all assets of Geotek and the Non-Continuing Subsidiaries
shall vest in and be retained by Reorganized Geotek, and (ii) all assets of the
Continuing Subsidiaries' estates shall vest in and be retained by the respective
Continuing Subsidiaries. As of the Effective Date, all
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assets retained by Reorganized Geotek and the Continuing Subsidiaries shall be
retained free and clear of all Liens, Claims and Interests of all Holders,
except as otherwise provided in the Plan.
2. Injunction
Except as otherwise expressly provided in the Plan, the Confirmation Order
or a separate order of the Bankruptcy Court, on the Effective Date, all Persons
who have held, hold or may hold Claims, or any other liabilities of the Debtors,
arising on or before the Effective Date, or who have held, hold or may hold
Interests acquired on or before the Effective Date of the Plan, will be
permanently enjoined on the Effective Date from taking any of the following
actions with respect to such Claims, liabilities or Interests: (i) commencing,
conducting or continuing in any manner, directly or indirectly, any suit, action
or other proceeding of any kind against the Debtors, the assets of the Debtors
or any direct or indirect successor in interest to the Debtors, or any assets of
any such transferee or successor, (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 Debtors, any of their assets or
any direct or indirect successor in interest to the Debtors, or any assets of
any such transferee or successor, (iii) creating, perfecting or otherwise
enforcing in any manner, directly or indirectly, any encumbrance of any kind
against the Debtors, any of their assets or any direct or indirect successor in
interest to the Debtors, any of their assets or any direct or indirect successor
in interest to the Debtors, or any assets of any such transferee or successor,
(iv) asserting any set-off, right of subrogation or recoupment of any kind,
directly or indirectly, against any obligation due the Debtors, any of their
assets, any direct or indirect transferee of any assets of, or successor in
interest to, the Debtors, and (v) proceeding in any manner in any place
whatsoever that does
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not conform to or comply with the provisions of the Plan. Such injunction shall
extend to successors of the Debtors and their respective properties and
interests in property.
3. Releases
As of the Effective Date each Holder of a 15% Notes Claim (a "Consenting
Holder") that marked a box on the Ballot sent to such Holder indicating such
Holder's agreement to grant the release provided in Section 11.3 of the Plan and
each of the Debtors, the ML Funds, the Creditors' Committee, WTC, HNS, S-C Rig,
the Unsecured 12% Notes Indenture Trustee shall be deemed to have mutually
released, to the extent permitted by the Bankruptcy Court, each of the Debtors
(including their officers, directors, and employees as of the Filing Date,
agents, advisors and representatives), the ML Funds, the Creditors' Committee,
WTC, HNS, S-C Rig, [the Unsecured 12% Notes Indenture Trustee (provided that
Class 9 has accepted the Plan)], each Consenting Holder and, except with respect
to the Debtors, the respective present and former directors, officers, partners
(general and limited), shareholders (record and beneficial), employees, agents,
advisors, attorneys and representatives of all of the foregoing, of and from any
and all Claims, obligations, rights, Causes of Action, the Released Avoidance
Actions, and liabilities (other than the right to enforce the Debtors'
obligations under the Plan) which such Person may be entitled to assert, whether
known or unknown, foreseen or unforeseen, then existing or thereafter arising,
based in whole or in part upon any act, omission or other occurrence taking
place from the beginning of time to and including the Effective Date in any way
relating to the Debtors, the Chapter 11 Cases, including, but not limited to,
the 85/15 Proposal, or the Plan.
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4. Executory Contracts
Except as provided in Section 8.2 of the Plan, all Executory Contracts,
other than Executory Contracts which have been rejected pursuant to an order of
the Bankruptcy Court entered prior to the Confirmation Date, including all
employment, severance benefits, retirement and supplemental retirement benefit
contracts, plans or policies that have not been rejected, canceled or terminated
on or prior to the Confirmation Date, shall be deemed rejected as of the
Effective Date; provided, however, that Reorganized Geotek and the Continuing
Subsidiaries reserve the right to reject after the Effective Date any Executory
Contract which on the Confirmation Date or such later date as may be set forth
in the Confirmation Order, was subject to a pending motion to reject such
Executory Contract. Without limiting the foregoing, to the extent they are
Executory Contracts, all Common Stock Options and Conversion Rights will be
deemed rejected under section 1123(b)(2) of the Bankruptcy Code as of the
Effective Date and the Holders of such Options and Rights will receive no
Distributions under the Plan on account thereof.
Any Claim for damages arising by reason of the rejection of any Executory
Contract will constitute a Class 8 Claim if, but only if, a proof of Claim
therefor is timely filed. The Debtors reserve their rights to object to any such
Claim. The Confirmation Order shall fix the last day for filing Claims arising
by reason of the rejection of any Executory Contract under the Plan as thirty
(30) days after the issuance of the Confirmation Order.
In the event a Nextel Termination Event shall have occurred, the Debtors
shall, at the option of WTC or HNS, as the case may be, assume and assign (i)
the 15% Secured Notes Phase I Site Leases and the 15% Secured Notes Phase II
Leases to WTC (or its nominee or
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designee) for and on behalf of the Holders of the 15% Notes Claims, and (ii) the
HNS Phase I Site Leases and the HNS Phase II Site Leases to HNS.
In the event a Phase II Termination Event shall have occurred, the Debtors
shall, at the option of WTC or HNS, as the case may be, assume and assign (i)
the 15% Secured Notes Phase II Site Leases to WTC (or its nominee or designee)
for and on behalf of the Holders of the 15% Notes Claims, and (ii) the HNS Phase
II Site Leases to HNS.
As to the Executory Contracts assumed pursuant to Section 8.2 of the Plan,
WTC and HNS, as the case may be, pursuant to the provisions of section
1123(a)(5)(G) of the Bankruptcy Code, shall, on behalf of the Debtors, cure or
demonstrate the ability to cure all defaults (except those specified in section
365(b)(2) of the Bankruptcy Code) existing under and pursuant to such Executory
Contracts by paying or demonstrating the ability to pay the amount, if any, of
such Cure Claim. Payment of any such Cure Claim will be in full satisfaction,
settlement, release, discharge and cure of all such defaults (including any
other Claims filed by any such party as a result of such existing defaults). The
dollar amount of any monetary default of the Debtors existing under any such
Executory Contracts as of the Confirmation Date, as may be agreed to by the
parties thereto or as may be fixed by Final Order shall constitute an Allowed
Class 1 Claim.
5. Closing of Transfer Ledgers; Cancellation and Surrender of Instruments;
Termination of Certain Agreements
As of the close of business on the Effective Date, the transfer ledgers or
registers and any other records determining record ownership maintained by
Geotek (or the 15% Secured Notes Indenture Trustee, Unsecured 12% Notes
Indenture Trustee or any other trustees, transfer
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agents or registrars which may have been employed in connection therewith) for
any Old Securities will be deemed to be closed, and for purposes of the Plan,
there shall be no further changes in the record Holders of any Old Securities on
the books of Geotek (or the 15% Secured Notes Indenture Trustee, Unsecured 12%
Notes Indenture Trustee or any other trustees, transfer agents or registrars
which may have been employed in connection therewith). Reorganized Geotek will
have no obligation to recognize any transfer of Old Securities occurring
thereafter, but will be entitled instead to recognize and deal with, for all
purposes under the Plan, including for purposes of making Distributions under
the Plan, except as otherwise provided herein, only those Persons who were
Holders of such Old Securities as of the close of business on the Effective
Date, as reflected on the books of Geotek (or the 15% Secured Notes Indenture
Trustee, Unsecured 12% Notes Indenture Trustee, or any other transfer agents or
registrars which may have been employed in connection therewith), as the case
may be.
No Holder of any Old Notes will be entitled to any right of Distribution
under the Plan unless and until such Holder will have first surrendered or
caused to be surrendered the relevant instrument, if any, held by such Holder to
the Distribution Agent, the 15% Secured Notes Indenture Trustee or the Unsecured
12% Notes Indenture Trustee, as the case may be. To the extent any such Holder
is not the Holder of record of such relevant instrument, such Holder must
deliver to the Distribution Agent, the 15% Secured Notes Indenture Trustee or
the Unsecured 12% Note Indenture Trustee, as the case may be, together with the
relevant instrument, documents satisfactory to Reorganized Geotek evidencing
succession of title from the record Holder thereof. In the event that any Old
Notes instrument has been lost, destroyed, stolen or mutilated, the Holder
thereof may instead execute and deliver an affidavit of loss and
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indemnity with respect thereto in a form customarily utilized for such purposes
that is reasonably satisfactory to Reorganized Geotek, together with, if
Reorganized Geotek so requests, a bond in form and substance (including, without
limitation, amount) reasonably satisfactory to Reorganized Geotek.
As soon as practicable after the surrender of the relevant instruments or
the delivery of such affidavit of loss and indemnity (and, if requested, the
furnishing of a bond) as provided in Section 4.1.B of the Plan, the 15% Secured
Notes Indenture Trustee, the Unsecured 12% Notes Indenture Trustee, or
Reorganized Geotek, as the case may be, will cancel such instruments, as and to
the extent it deems appropriate, and the 15% Secured Notes Indenture Trustee and
the Unsecured 12% Notes Indenture Trustee will deliver such cancelled
instruments to Reorganized Geotek or otherwise dispose of such instruments in
such manner as Reorganized Geotek may require.
Until (i) a Holder of record on the Effective Date or its successor by
operation of law surrenders the relevant instruments, if any, evidencing its
ownership of Old Notes pursuant to Section 4.1.B hereof, and (ii) the shares of
Nextel Stock and/or Cash to be issued in satisfaction thereof are issued and
delivered by or on behalf of Reorganized Geotek to such Holder, the 15% Secured
Notes Indenture Trustee or the Unsecured 12% Notes Indenture Trustee, as the
case may be, for the account of such Holder, such Holder shall have no rights
with respect to the shares of Nextel Stock and/or Cash to be received by such
Holder under the Plan.
To the extent reasonably requested by Reorganized Geotek and to the extent
not inconsistent with the Plan, no Holder of a Claim in Class 4 or Class 5 will
receive the Distribution provided for in Sections 3.5 or 3.6, respectively, of
the Plan until the 15% Secured
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Notes Indenture Trustee with respect to Class 4 Claims or the Holder of the
Class 5 Claim executes, delivers and files (where applicable) or causes to be
executed, delivered and filed any documents (in recordable form if appropriate)
and/or surrenders or causes to be surrendered to Reorganized Geotek any personal
property or other Collateral in its possession or the possession of the 15%
Secured Notes Indenture Trustee necessary to release any Lien(s) and retransfer
all Collateral held by any Person in connection with the relevant underlying
loan documents.
As of the Effective Date, the Old Notes and all agreements, instruments
and other documents incident thereto and executed therewith, will be terminated,
deemed null and void and of no further force and effect as to the Debtors or
Reorganized Geotek.
As of the Effective Date, all Common Stock and Preferred Stock, and any
options, warrants, conversion rights, subscription rights and the like,
including, without limitation, Common Stock Options and Conversion Rights, will
be deemed canceled and extinguished and of no further force or effect as to the
Debtors or Reorganized Geotek.
6. Distributions to Holders of Allowed Claims
Except as otherwise provided in Article III of the Plan, the Distribution
Agent will deliver or cause to be delivered, on behalf of the applicable
Debtors, at the time specified in Article III of the Plan, subject to
compliance, if required, with the provisions of Section 4.1 of the Plan:
a. To each Holder of an Allowed Administrative Expense Claim, Allowed
Priority Tax Claim, Allowed Other Priority Claim and Allowed Other Secured Claim
in Classes 1, 2, 3 and 6, respectively, Cash, in accordance with Sections 3.2,
3.3, 3.4, and 3.7, respectively, of the Plan;
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b. To the 15% Secured Notes Indenture Trustee for and on behalf of the
Holders of Allowed 15% Secured Notes Claims in Class 4, Cash, shares of Nextel
Stock, the 15% Secured Notes Phase I Licenses, and/or the 15% Secured Notes
Phase II Licenses, as the case may be, in accordance with Section 3.5 of the
Plan.
c. To HNS, as the Holder of the HNS License Facility Claims and the HNS
Vendor Credit Facility Claims in Class 5, Cash, shares of Nextel Stock, the HNS
Phase I Licenses, and/or the HNS Phase II Licenses, as the case may be, in
accordance with Section 3.6 of the Plan.
d. To S-C Rig, in its capacity as the Holder of the S-C Rig Unsecured Loan
Claims in Class 7, Cash in accordance with Section 3.8 of the Plan.
e. To each Holder of an Allowed General Unsecured Claim in Class 8, Cash,
in accordance with Section 3.9 of the Plan.
f. To the Unsecured 12% Notes Indenture Trustee for and on behalf of the
Holders of Unsecured 12% Notes, Cash, in accordance with Section 3.10 of the
Plan.
Distributions of Cash required by the Plan will be made, at Reorganized
Geotek's option, by wire transfer or check drawn on a United States Bank mailed
by first class mail.
Fractional shares of Nextel Stock shall not be issued or distributed.
Instead, each time a Distribution is to be made to any Class of Allowed Claims,
the aggregate of all of the fractional interests in Nextel Stock to which the
Holders of Allowed Claims in such Class would otherwise be entitled shall be
placed in a separate pool (hereinafter the "Fractional Shares Pool"). All
Holders of Allowed Claims in such Class that would otherwise be entitled to a
fractional share of Nextel Stock shall be placed on a list (hereinafter a
"Distribution List") in descending
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order according to the size of the fractional interest in each share of Nextel
Stock, to which each such Holder is entitled. In the event two or more Holders
of Allowed Claims are entitled to the same fractional interest (rounded to six
decimal places) in a share of Nextel Stock, their relative ranking on any
Distribution List shall be determined by lot. Based upon each Distribution List
for Nextel Stock for each such Class, a whole share of Nextel Stock shall be
distributed to Holders entitled to the largest fractions of each share of Nextel
Stock until all of the whole shares or whole units of Nextel Stock in the
Fractional Shares Pool for each fractional share of Nextel Stock in each such
Class shall have been distributed.
7. Disputed Claims Reserve
On the Effective Date, except as otherwise provided in Section 4.6 of the
Plan, Reorganized Geotek shall maintain Cash and shares of Nextel Stock (the
"Disputed Claims Reserve") equal to 100 percent of the Cash and shares of Nextel
Stock (or such lesser amount as authorized by Final Order, including pursuant to
an estimation made pursuant to section 502(c) of the Bankruptcy Code, which
estimation shall conclusively establish the amount of Distribution for such
Claim) of (i) the amount of Cash or shares of Nextel Stock that the Holders of
Disputed Claims would be entitled to receive under the Plan if such Disputed
Claims were Allowed in the full amount asserted by the Holders thereof, and (ii)
an appropriate estimate for Administrative Expense Claims, Priority Tax Claims,
Other Priority Claims and Other Secured Claims that may not have been Allowed as
of the Effective Date.
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8. Resolution of Disputed Claims
Unless another date is provided in the Confirmation Order, all objections
to Claims shall be filed with the Bankruptcy Court not later than ninety (90)
days after the Effective Date, subject to the right of Reorganized Geotek to
extend such period from time to time.
9. Distributions to Holders of Subsequently Allowed Claims
Unless another date is agreed upon by the Debtors and the Holder of a
Subsequently Allowed Claim and approved by Final Order, the Distribution Agent,
on behalf of the Debtors, will, on the tenth Business Day following the day the
Allowed amount thereof is fixed by Final Order, distribute to the 15% Secured
Notes Indenture Trustee with respect to Class 4 Claims, or such Holder with
respect to Classes 1, 2, 3, and 6 Claims, in accordance with Section 3.2, 3.3,
3.4, 3.5 or 3.7 of the Plan, as the case may be, Cash, without interest, the
property, if any, securing such Holder's Class 6 Claim, or, subject to the
provisions of Section 4.4 of the Plan, shares of Nextel Stock equal to the
amount of Cash or number of shares of Nextel Stock which would have been
distributed to such Holder through such date had such Holder's Subsequently
Allowed Claim been an Allowed Claim on the Effective Date.
Any Holder of a Subsequently Allowed Claim will not be entitled to any
interest on the Allowed amount of such Claim, regardless of when Distribution
thereon is made to or received by such Holder.
As each Disputed Claim becomes a Subsequently Allowed Claim or is
disallowed by Final Order, the property, if any, reserved for, but not
distributed to, the Holder of such Subsequently Allowed Claim (including
interest, if any, earned thereon net of income or similar
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taxes borne by Reorganized Geotek) as a consequence of the Allowed amount of
such Claim having been fixed at less than the amount stated in such Claim shall
constitute Available Cash.
10. Setoff Rights
Except as provided in the Plan, the Debtors and Reorganized Geotek may,
but shall not be required to, set off against any Claim and the Distributions to
be made pursuant to the Plan in respect of such Claim, any valid claims of any
nature of whatsoever that the Debtors may have against the Holder of such Claim,
but neither the Debtors' nor Reorganized Geotek's failure to do so, or the
allowance of any Claim hereunder shall constitute a waiver or release by the
Debtors or Reorganized Geotek of any such Claim against such Holder.
11. Unclaimed Property
Subject to Section 4.11.C of the Plan, in accordance with sections 347 and
1143 of the Bankruptcy Code, any Holder of Old Notes that fails to comply with
Section 4.1.B of the Plan within six (6) months from and after the Effective
Date will be deemed to have forfeited all rights and Claims with respect thereto
and shall not participate in any Distribution on account thereof under the Plan.
Any Cash, including interest thereon, or shares of Nextel Stock constituting
unclaimed property pursuant to Section 4.11.A of the Plan shall be distributed
Pro Rata to Holders of Allowed Class 4 or Class 9 Claims, as the case may be.
If a Holder of an Allowed Claim entitled to receive Cash fails to
negotiate a check issued to such Holder pursuant to the provisions of Article
III of the Plan within six (6) months of the date such check was issued, then
the amount of Cash attributable to such check shall be distributed Pro Rata to
Holders of Allowed Claims in the applicable Class, and the payee of such
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check will be deemed to have waived its Claim and will not participate in any
further Distributions under the Plan in respect thereof.
If a Distribution to any Holder of an Allowed Claim made pursuant to
Article III of the Plan is returned to the 15% Secured Notes Indenture Trustee,
the Unsecured 12% Notes Indenture Trustee or Reorganized Geotek, as the case may
be, due to an incorrect or incomplete address for the Holder of such Allowed
Claim, then such 15% Secured Notes Indenture Trustee or Unsecured 12% Notes
Indenture Trustee, as the case may be, shall promptly so notify Reorganized
Geotek, and Reorganized Geotek will publish a notice once in The Wall Street
Journal or The New York Times (national edition), not later than thirty (30)
days after the date on which such Distribution is returned to Reorganized
Geotek, listing the name of such Holder and the Distributions due such Holder
and stating that unless such Holder contacts Reorganized Geotek within thirty
(30) days following the date such notice appears in such newspaper, and provides
Reorganized Geotek with an accurate address, such Distribution shall be deemed
unclaimed property in respect of such Holder's Allowed Claim, and such Holder
shall be deemed to have no further entitlement in respect of such Distribution
and shall not participate in any further Distributions under the Plan in respect
thereof. If the aggregate amount of Distributions returned to the 15% Secured
Notes Indenture Trustee, the Unsecured 12% Notes Indenture Trustee or
Reorganized Geotek, as the case may be, pursuant to Section 4.11.C of the Plan
is less than $100,000, then Reorganized Geotek shall have no obligation to
publish the notice required herein, and any such Distributions shall constitute
unclaimed property. Any Cash, including interest thereon, or shares of Nextel
Stock constituting unclaimed property pursuant to
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Section 4.11.C of the Plan shall be distributed Pro Rata to the Holders of
Allowed Claims in the applicable Class.
12. Conditions Precedent to Confirmation
Confirmation of the Plan shall not occur unless and until each of the
following conditions has occurred or has been waived in accordance with the
terms of the Plan:
a. The Bankruptcy Court shall have entered the Substantive Consolidation
Order;
b. The Bankruptcy Court shall have determined that the sum of (i) Allowed
Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Other
Priority Claims and Allowed Other Secured Claims as of the Confirmation Hearing,
(ii) the estimated Allowed amount of Disputed Administrative Expense Claims,
Disputed Priority Tax Claims, Disputed Other Priority Claims and Disputed Other
Secured Claims as of the Confirmation Hearing, and (iii) the Post-Confirmation
Budget Amount, shall not exceed (x) in the event a Nextel Termination Event
shall have occurred, $15 million, exclusive of interest accruing on the 15%
Secured Notes Cash Collateral Claim and the DIP Lender Claims, or (y) in the
event a Phase I Closing and/or a Phase II Closing shall have occurred, $8
million, exclusive of interest accruing on the DIP Lender Claims; and
c. The Bankruptcy Court shall have entered the Confirmation Order.
13. Conditions Precedent to the Effective Date
The Effective Date of the Plan shall not occur unless and until each of
the following conditions has occurred or has been waived in accordance with the
terms of the Plan:
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a. Either, a (i) Nextel Termination Event, (ii) Phase I Closing and a
Phase II Termination Event, or (iii) Phase I Closing and a Phase II Closing
shall have occurred;
b. The FCC shall have approved the transfer and assignment by the Debtors
of the HNS Phase I Licenses and the HNS Phase II Licenses to HNS;
c. The FCC shall have approved the transfer and assignment by the Debtors
of the 15% Secured Notes Phase I Licenses and the 15% Secured Notes Phase II
Licenses to WTC (or its nominee or designee) for and on behalf of the Holders of
15% Notes Claims;
d. The Substantive Consolidation Order shall have become a Final Order;
and
e. The Confirmation Order shall have become a Final Order.
In the event that one or more of the conditions specified in Section 10.2
of the Plan have not been satisfied or waived by the Debtors on or before 365
days after the Nextel Effective Date, or such later date as may be fixed by
Final Order entered after notice and a hearing, upon notification submitted by
the Debtors to the Bankruptcy Court and counsel for the Creditors Committee, S-C
Rig, HNS, the ML Funds, and WTC, (i) the Confirmation Order shall be vacated,
(ii) no Distributions under the Plan shall be made, (iii) the Debtors and all
Holders of Claims and Interests shall be restored to the status quo ante as of
the day immediately preceding the Confirmation Date as though Confirmation had
never occurred, and (iv) the Debtors' obligations with respect to Claims or
Interests shall remain unchanged and nothing contained herein shall constitute
or be deemed a waiver or release of any Claims or Interests or rights and
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defenses related thereto by or against the Debtors or any other Person or to
prejudice in any manner the rights of the Debtors or any Person in any further
proceedings involving the Debtors.
14. Waiver of Conditions to Confirmation of the Plan and Effective Date.
Any condition to Confirmation of the Plan or the Effective Date contained
in Article X of the Plan may be waived, in whole or in part, by the Debtors,
with the unanimous consent of (i) S-C Rig, (ii) the Creditors' Committee, (iii)
HNS, and (iv) WTC or the Majority Holders.
15. Retention of Jurisdiction
Notwithstanding the entry of the Confirmation Order or the occurrence of
the Effective Date, the Bankruptcy Court shall retain jurisdiction of the
Chapter 11 Cases for the following purposes:
a. To enforce the terms of the Plan and the Confirmation Order, including,
without limitation injunctive provisions thereof;
b. To hear and determine any and all applications for the rejection,
assumption or assignment of any Executory Contract, any objection to any Claim
resulting therefrom, and the allowance, reduction, expungement or compromise of
any Claim resulting therefrom, pursuant to the terms and conditions of the Plan;
c. To hear and determine any motion, application, adversary proceeding,
contested matter and other litigated matter pending on the Effective Date or
such later date as the Bankruptcy Court may permit;
d. To ensure that the Distribution to Holders of Allowed Claims and
Allowed Interests is effectuated in accordance with the Plan;
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e. To hear and determine any objection to any Claim filed, either before
or after the Confirmation Date; and to allow or disallow, in whole or in part,
any Disputed Claim;
f. To enter, implement or enforce such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, reversed, revoked,
modified or vacated;
g. To hear and determine the allowance of any and all Administrative
Expense Claims including, without limitation, any Fee Claim or Substantial
Contribution Claim and any objections thereto;
h. To hear any application of the Debtors (i) to modify the Plan in
accordance with section 1127 of the Bankruptcy Code, and (ii) after the
Confirmation Date, to institute proceedings in the Bankruptcy Court to remedy
any defect or omission or reconcile any inconsistency in the Plan or
Confirmation Order, in such manner as may be necessary to carry out the purposes
and effects thereof;
i. To hear and determine disputes arising in connection with the Plan, its
interpretation or its implementation, including disputes arising under
agreements, documents or instruments executed in connection with the Plan;
j. To hear and determine any disputes arising in connection with the
Nextel Purchase Agreement and the License Assignment Agreement, their
interpretation or implementation, including disputes among the parties thereto;
k. To construe, take any action and issue such orders, prior to and
following the Confirmation Date, as may be necessary for the enforcement,
implementation,
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execution and consummation of the Plan or for the maintenance of the integrity
of the Plan following consummation, and to hear and determine any other issue
presented by or arising under the Plan including, without limitation, the
injunctive provisions thereof;
l. To hear and determine any motions or contested matters involving taxes,
tax refunds, tax attributes and tax benefits and similar or related matters,
with respect to the Debtors or their Estates arising prior to the Effective Date
or relating to the period of administration of the Chapter 11 Cases, including
under section 505 of the Bankruptcy Code;
m. To hear and determine such other matters as may arise under, be
provided for in or implicated by the Plan or the Confirmation Order;
n. To enter a final decree closing the Chapter 11 Cases; and
o. To hear and determine any other matters related hereto and not
inconsistent with chapter 11 of the Bankruptcy Code.
16. Revocation, Amendment or Modification of the Plan
The Debtors reserve the right to revoke or withdraw the Plan prior to the
Confirmation Date. If the Debtors revoke or withdraw the Plan, then the Plan
shall be null and void and, in such event, nothing contained in the Plan shall
be deemed to constitute on admission of liability, a waiver or release of any
Claims by or against the Debtors or any other Person or to prejudice in any
manner the rights of any of the Debtors or any Person in any further proceedings
involving the Debtors, including any rights in respect of the proposed
substantive consolidation of the Debtors.
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The Plan may be amended, modified or supplemented by the Debtors before or
after the Confirmation Date, in the manner provided for by section 1127 of the
Bankruptcy Code or as otherwise permitted by law.
17. Exculpation
Neither the Debtors, Reorganized Geotek, nor any of the other Released
Parties shall have or incur any liability to any Holder of a Claim or Interest
for any act or omission in connection with, related to, or arising out of, the
Chapter 11 Cases, the pursuit of confirmation of the Plan, the consummation of
the Plan or the administration of the Plan or the property to be distributed
under the Plan, except for gross negligence, willful misconduct or fraud, and in
all respects, they shall be entitled to rely upon the advice of counsel with
respect to their duties and responsibilities under the Plan and shall be fully
protected in acting or in refraining from action in accordance with such advice.
18. No Interest
Except as expressly provided in the Plan, or allowed by Final Order, no
interest, penalty or late charge shall be allowed on any Claim to the extent
such interest, penalty or late charge arises or accrues subsequent to the Filing
Date.
19. Termination of the Creditors' Committee
The existence of the Creditors' Committee shall terminate on the
Confirmation Date except solely with respect to (i) all Fee Applications, (ii)
any post-Confirmation modifications to the Plan or the Confirmation Order, (iii)
the waiver of a condition to Confirmation of the Plan and/or the Effective Date
pursuant to Section 10.3 of the Plan, and
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(iv) any matters pending as of the Confirmation Date before the Bankruptcy Court
to which the Creditors' Committee is a party, until such matters are resolved by
Final Order.
20. Post-Effective Date Fees and Expenses
From and after the Confirmation Date, Reorganized Geotek shall, in the
ordinary course of business and without the necessity for any approval by the
Bankruptcy Court, pay, in accordance with the Post-Confirmation Budget, the
reasonable fees and expenses of professional persons thereafter incurred by the
Debtors and Reorganized Geotek, including, without limitation, those fees and
expenses incurred in connection with the implementation and consummation of the
Plan.
THE FOREGOING SUMMARY OF THE PLAN ONLY HIGHLIGHTS CERTAIN SUBSTANTIVE
PROVISIONS OF THE PLAN AND IS NOT, NOR IS IT INTENDED TO BE, A COMPLETE
DESCRIPTION OF OR SUBSTITUTE FOR THE FULL AND COMPLETE READING OF THE PLAN. ALL
CREDITORS AND INTEREST HOLDERS ARE URGED TO READ THE PLAN CAREFULLY IN ITS
ENTIRETY FOR A COMPLETE DESCRIPTION OF ITS PROVISIONS BEFORE VOTING EITHER TO
ACCEPT OR REJECT THE PLAN OR TAKING A POSITION WITH RESPECT TO THE CONFIRMATION
OF THE PLAN.
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V. CONFIRMATION OF THE PLAN
A. Introduction
In order for the Plan to be confirmed, the Bankruptcy Code requires that
the Bankruptcy Court determine that the Plan complies with the requirements set
forth in section 1129 of the Bankruptcy Code. Thus, among other things, the
Court must find that: (i) the Plan is feasible, (ii) confirmation of the Plan is
in the best interests of all rejecting Holders of Claims and Interests (that is,
rejecting Holders of Claims and of Interests will receive at least as much under
the Plan as they would receive in a liquidation under chapter 7 of the
Bankruptcy Code), and (iii) the Plan has classified Claims and Interests in a
permissible manner.
B. Feasibility
The Debtors believe that, regardless of whether a Phase I Closing and/or a
Phase II Closing occurs, the Plan meets the feasibility standard of sections
1123(a)(5) and 1129(a)(11) of the Bankruptcy Code, which requires that there is
a reasonable probability that the Debtors will be able to perform their
obligations under the Plan. In determining whether the Plan meets the
feasibility standard, the Debtors have analyzed their ability to fully pay
Allowed Claims in Classes 1, 2, 3 and 6 under the Plan,(17) for a partial
distribution to Allowed Claims in Classes 4 and 5, and for a partial or, in some
circumstances, no distribution to Allowed Claims in Classes 7, 8 and 9.
- ----------
(17) The Debtors are in the process of negotiating reductions of existing tax
claims.
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C. Best Interests of Holders of Claims and Holders of Interests
Regardless of whether each impaired Class votes to accept the Plan, the
Bankruptcy Court must determine that the Plan is in the best interests of all
Holders of Claims and Interests. The "best interests" test requires that the
Bankruptcy Court find either that each Holder of an Allowed Claim or Allowed
Interest in each impaired Class has accepted the Plan or that each Holder of an
Allowed Claim or Allowed Interest in such Class will receive or retain under the
Plan on account of such Claim or Interest property of a value, as of the
Effective Date, that is not less than the amount that such Holder would so
receive or retain if the Debtors hypothetically were liquidated under chapter 7
of the Bankruptcy Code on such date.
To calculate what Holders of Claims and Interests would receive if the
Debtors were liquidated under chapter 7 of the Bankruptcy Code, the Bankruptcy
Court must first determine the dollar amount that would be realized from the
liquidation (the "Liquidation Fund") of the Debtors. The Liquidation Fund would
consist of the net proceeds from the disposition of the Assets (after
satisfaction of all valid Liens) augmented by the Cash held by the Debtors and
recoveries on actions against third parties, if any. The Liquidation Fund would
then be reduced by the costs of the liquidation. The costs of liquidation under
chapter 7 would include the fees and expenses of a trustee, as well as those of
counsel and other professionals that might be retained by the trustee, selling
expenses, any unpaid expenses incurred by the Debtors during their Chapter 11
Cases (such as fees for attorneys, financial advisors and accountants) which are
allowed in the chapter 7 proceeding, interest expense on secured debt and Claims
incurred by the Debtors during the pendency of the Chapter 11 Cases. These costs
and Claims would be paid in full out of the Liquidation Fund before the balance
of the Liquidation Fund would be made
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available to Holders of unsecured Claims and Interests. In addition, other
Claims which would arise upon conversion to a chapter 7 case (e.g., additional
claims asserted against the Debtors because of a new claims bar date being set
upon conversion of the Chapter 11 Cases to chapter 7, damage Claims for
termination of contracts, and the costs of lengthy litigation related to certain
of these Claims) would dilute the balance of the Liquidation Fund available to
Holders of unsecured Claims. The present value of the distributions out of the
Liquidation Fund (after deducting the amounts described above) are then compared
with the present value of the property offered to each of the Classes of Claims
and Interests under the Plan to determine if the Plan is in the best interests
of each Holder of a Claim or Interest.
The Debtors believe, based upon the liquidation analysis (the "Liquidation
Analysis") annexed hereto as Appendix "D," that the value of any distributions
from the Liquidation Fund to each impaired Class of Claims and Interests would
be less than the value of distributions under the Plan. The Debtors believe that
liquidation of the Debtors under chapter 7 of the Bankruptcy Code would not be
in the best interests of the Debtors, would provide Holders of Claims with a
smaller return than under the Plan and would eliminate all Interests.
D. Alternatives to Confirmation of the Plan
1. Liquidation Under Chapter 7
One alternative to confirmation of the Plan is the liquidation of the
Debtors under chapter 7 of the Bankruptcy Code. The Debtors believe that
this alternative would not only seriously jeopardize the Debtors' ability to
consummate the Nextel Purchase Agreement but would also result in substantial
delays and probable diminution of recoveries, to the detriment of all Classes of
Creditors.
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For a discussion of the effect that a chapter 7 liquidation would have on
the recovery by Holders of Claims and Interests, see the Liquidation Analysis
annexed hereto as Appendix "D." For the reasons set forth in Section V.C of this
Disclosure Statement ("Best Interests of Holders of Claims and Holders of
Interests") and in Appendix "D", the Debtors believe that the distributions to
each Class of impaired Claims under the Plan will be no less and received
earlier than the distributions that might be received after a chapter 7
liquidation of the Debtors. Accordingly, the Debtors believe that confirmation
of the Plan is preferable to a chapter 7 liquidation because the Plan maximizes
the property available for distribution whereas liquidation under chapter 7
jeopardizes the Debtors' ability to consummate the Nextel Purchase Agreement
and, regardless of such ability, would result in substantial delays and lesser
recoveries.
2. Dismissal of the Chapter 11 Cases
Dismissal of the Chapter 11 Cases would have the effect of restoring (or
attempting to restore) all parties to the status quo ante. Upon dismissal of the
Chapter 11 Cases, the Debtors would lose the protection of the Bankruptcy Code,
and, lacking the capital necessary to continue their operations, would likely be
forced to liquidate under applicable state law. Dismissal of the Chapter 11
Cases would likely result in a chaotic scramble for the Debtors' FCC Licenses,
the principal source of value for the Debtors' estates, with the holders of the
15% Secured Notes and HNS likely attempting to foreclose upon the common stock
of the entities which own the FCC Licenses, and upon which they have a stock
pledge, and the unsecured creditors likely individually attempting to obtain and
enforce judgments against the Debtors. Dismissal of the Chapter 11 Cases, like a
conversion to chapter 7, would thus seriously
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jeopardize the sale of the FCC Licenses pursuant to the Nextel Purchase
Agreement, and would result in substantial delays and lesser recoveries.
E. Acceptance
As a condition to Confirmation, the Bankruptcy Code requires that, with
certain exceptions (as described below), each impaired Class of Claims votes to
accept the Plan. The Bankruptcy Code defines acceptance of the Plan by a Class
of Claims as acceptance by Holders of two-thirds in dollar amount and a majority
in number of Allowed Claims of that Class, but for these purposes counts only
those who actually vote to accept or reject the Plan.
Acceptances of the Plan are being solicited only from those Persons who
hold Allowed Claims in impaired Classes and who are entitled to receive
Distributions under the Plan. In accordance with Section 1126 of the Bankruptcy
Code, a Class is "impaired" if the legal, equitable, or contractual rights
attaching to the Claims of that Class are modified, other than by curing
defaults in stated maturities or by payment in full of cash. The Classes of
Claims that are not "impaired" under the Plan are deemed to have accepted the
Plan.
Classes 1, 2 and 3 are not impaired under the Plan and thus deemed to have
accepted the Plan. Classes 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 and
18 are impaired under the Plan. The votes of Classes 4, 5, 6, 7, 8 and 9 on the
Plan are being solicited herein. Classes 10, 11, 12, 13, 14, 15, 16, 17 and 18
are not receiving any Distribution under the Plan, are thus deemed, as a matter
of law, to have rejected the Plan, and, as such, votes are not being solicited
from Holders of Interests in such Classes.
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F. Non-Acceptance and Cramdown
The Bankruptcy Code contains provisions for confirmation of a plan even if
the plan is not accepted by all impaired classes, as long as at least one
impaired class of claims has accepted it. The "cramdown" provisions of the
Bankruptcy Code are set forth in section 1129(b) of the Bankruptcy Code. If the
Plan is not accepted by each Class entitled to vote on the Plan, the Debtors
intend to seek confirmation of the Plan pursuant to the "cramdown" provisions of
section 1129(b) of the Bankruptcy Code.
Under the "cramdown" provisions, upon the request of a plan proponent, the
bankruptcy court may confirm a plan despite the lack of acceptance by an
impaired class or classes if the bankruptcy court finds that (i) the plan does
not discriminate unfairly with respect to each non-accepting impaired class,
(ii) the plan is "fair and equitable" with respect to each non-accepting
impaired class, and (iii) at least one impaired class has accepted the plan.
As used by the Bankruptcy Code, the phrases "discriminate unfairly" and
"fair and equitable" have narrow and specific meanings unique to bankruptcy law.
A plan does not discriminate unfairly if claims or interests in different
classes but with similar priorities and characteristics receive or retain
property of similar value under a plan. Inasmuch as the Plan provides similar
treatment to Claims and Interests that share similar priorities and
characteristics, it satisfies the unfair discrimination test contained in
section 1129(b)(1) of the Bankruptcy Code.
The Bankruptcy Code sets forth different standards for establishing that a
plan is "fair and equitable" with respect to a rejecting class, depending on
whether the class is comprised of secured or unsecured claims or interests. In
general, section 1129(b) of the Bankruptcy Code permits confirmation
notwithstanding rejection by an impaired class if that class and all classes
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junior thereto are treated in accordance with the "absolute priority" rule,
which requires that the rejecting class be paid in full before a junior class
may receive anything under the plan.
With respect to Classes of secured Claims that have rejected the Plan, the
Debtors must demonstrate to the Bankruptcy Court that either (i)(a) the Holders
of such secured Claims retain the liens securing such Claims, whether the
property subject to such liens is retained by the Debtors or transferred to
another entity, to the extent of the Allowed amount of such Claims and (b) each
Holder of a Claim of such Class receives on account of such Claim deferred cash
payments totaling at least the Allowed amount of such Claim, of a value as of
the effective date of the Plan, of at least the value of such Holder's interest
in the estate's interest in such property, (ii) for the sale, subject to section
363(k) of the Bankruptcy Code, of any property that is subject to the liens
securing such Claims, free and clear of such liens, with such liens to attach to
the proceeds of such sale, and the treatment of such liens on proceeds under
clause (i) or (iii) of this sentence, or (iii) for the realization by such
holders of the indubitable equivalent of such Claims.
With respect to Classes of unsecured Claims that have rejected the Plan,
the Debtors must demonstrate to the Bankruptcy Court that either (i) each Holder
of an unsecured Claim of the rejecting Class receives or retains under the Plan
property of a value equal to the Allowed amount of its unsecured Claim, or (ii)
the Holders of Claims or Interests that are junior to the Claims of the Holders
of such unsecured Claims will not receive or retain any property under the Plan.
With respect to Classes of Interests that have rejected or are deemed to
have rejected the Plan, the Debtors must demonstrate to the Bankruptcy Court
that either (i) each Holder of an Interest of the rejecting Class receives or
retains under the Plan property of a value
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equal to the Allowed amount of its Interest, or (ii) the Holders of
Interests that are junior to the Claims of the Holders of such Interests will
not receive or retain any property under the Plan.
The Debtors believe that the Plan satisfies the "cramdown" requirements of
the Bankruptcy Code. If all the applicable requirements for confirmation of the
Plan are met as set forth in section 1129(a) of the Bankruptcy Code, except that
Holders of Class 4 Claims, Class 5 Claims, Class 6 Claims, Class 7 Claims, Class
8 Claims and/or Class 9 Claims have failed to accept the Plan pursuant to
section 1129(a)(8) of the Bankruptcy Code, the Debtors intend to seek
confirmation of the Plan, pursuant to the "cramdown" provisions of section
1129(b) of the Bankruptcy Code.
G. Classification of Claims and Interests
The Bankruptcy Code requires that a plan of reorganization place each
claim or interest into a class with other claims or interests which are
"substantially similar." The Debtors believe that the Plan, which establishes
nine (9) Classes of Claims and nine (9) Classes of Interests, satisfies this
requirement.
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VI. CERTAIN FACTORS TO BE CONSIDERED
HOLDERS OF CLAIMS AGAINST THE DEBTORS SHOULD READ AND CONSIDER
CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS THE OTHER INFORMATION SET
FORTH IN THIS DISCLOSURE STATEMENT (AND THE DOCUMENTS DELIVERED TOGETHER
HEREWITH AND/OR INCORPORATED BY REFERENCE), PRIOR TO VOTING TO ACCEPT OR REJECT
THE PLAN. THIS STATEMENT OF RISK FACTORS, HOWEVER, IS ONLY A SUMMARY AND SHOULD
NOT BE REGARDED AS CONSTITUTING THE ONLY RISKS INVOLVED IN CONNECTION WITH THE
PLAN AND ITS IMPLEMENTATION.
A. Overall Risks to the Recoveries by Holders of Claims
The ultimate recoveries under the Plan to Holders of Claims depend upon,
inter alia, whether or not a Phase I Closing and a Phase II Closing occurs. The
factors specified below assume that the Plan is confirmed on June __, 1999.
Prior to voting on the Plan, each Holder of a Claim should carefully consider
the risk factors referred to below as well as all of the information contained
in the Plan, including the Exhibits annexed thereto, and this Disclosure
Statement, including the Appendices hereto.
1. Risks Associated with Phase I Closing
Upon the entry of the Confirmation Order, the remaining conditions to a
Phase I Closing will be the FCC's approval of the transfer of the Phase I
Licenses, the expiration of all waiting periods under the HSR Act, as well as
other conditions standard in a purchase agreement. The Debtors believe that the
FCC will approve the transfer of the Phase I Licenses to Nextel.
2. Risks Associated with Phase II Closing
Upon the entry of the Confirmation Order, the remaining conditions to a
Phase II Closing will be the DOJ Consent or District Court Order, the FCC's
approval of the transfer of
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the Phase II Licenses, the expiration of all waiting periods under the HSR Act,
as well as other conditions standard in a purchase agreement.
As discussed in Section III.G.3 of this Disclosure Statement ("The Nextel
Purchase Agreement"), the DOJ has previously refused to give the DOJ Consent. In
an effort to obtain the District Court Order, on, February 16, 1999, Nextel
filed the Nextel Motion to Vacate in the District Court. See Section III.G.3 of
this Disclosure Statement ("The Nextel Purchase Agreement").
Although it is difficult to assess the likelihood of a Phase II Closing,
it is evident that there remains a very distinct possibility that Nextel will be
unable to obtain the DOJ Consent or the District Court Order.
3. Risks Associated with Value of Nextel Stock
Holders of Allowed Claims in Classes 4 and 5 who will receive Nextel Stock
should evaluate Nextel and its business and the risks associated therewith. In
particular, such Holders should carefully consider the information set forth
under the caption "Item 1. Business - N. Risk Factors" in the Form 10-K Annual
Report of Nextel filed with the Securities and Exchange Commission (the
"Commission"), a copy of which is attached hereto as Appendix C and which is
hereby incorporated by reference herein.
4. Risks to Holders of Certain Claims
The ultimate aggregate amount of Allowed Claims in any particular Class
may differ significantly from the estimates set forth in the table in Section
I.C. of this Disclosure Statement ("Summary of Distributions to be Made Pursuant
to the Plan"). Accordingly, the amount of the distribution that will ultimately
be received by any particular Holder of an
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Allowed Claim in a particular Class may be adversely affected by the aggregate
amount of Disputed Claims ultimately allowed in that Class.
VII. APPLICABILITY OF FEDERAL AND OTHER
SECURITIES LAWS TO THE NEXTEL STOCK
TO BE DISTRIBUTED UNDER THE PLAN
Certain Holders of Claims will receive Nextel Stock under the Plan.
Section 1145 of the Bankruptcy Code creates certain exemptions from the
registration and other requirements of certain federal and state securities laws
with respect to the distribution of securities pursuant to a plan of
reorganization. The No-Action Request will seek confirmation from the SEC that
section 1145 of the Bankruptcy Code will apply to Nextel Stock issued pursuant
to the Plan. In the alternative, the Nextel Stock will be registered under the
1933 Act. See Section IV.D of this Disclosure Statement ("Distribution of Nextel
Stock").
A. Issuance of Nextel Stock Under the Plan
Section 1145 of the Bankruptcy Code exempts the issuance of securities
under a plan of reorganization from registration under the 1933 Act and under
state securities laws if three principal requirements are satisfied: (i) the
securities must be issued "under a plan" of reorganization by the debtor or its
successor under a plan or by an affiliate participating in a joint plan of
reorganization with the debtor, (ii) the recipients of the securities must hold
a prepetition or administrative expense claim against the debtor or an interest
in the debtor, and (iii) the securities must be issued entirely in exchange for
the recipient's claim against or interest in debtor, or "principally" in such
exchange and "partly" for cash or property. The No-Action Request will seek
confirmation from the SEC that the issuance of the Nextel Stock to Geotek and
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its distribution to creditors under the Plan satisfies the requirements of
section 1145(a)(1) of the Bankruptcy Code and is, therefore, exempt from
registration under federal and state securities laws. In the alternative, the
Nextel Stock will be registered pursuant to the Registration Statement. See
Section IV.D of the Disclosure Statement ("Distribution of Nextel Stock").
However, under certain circumstances, subsequent transfers of such Stock may be
subject to registration requirements under such securities laws.
B. Transfers of Nextel Stock
In general, all resales and subsequent transactions in the Nextel Stock
will be exempt from registration under federal and state securities laws, unless
the holder is an "underwriter" with respect such securities. Section 1145(b) of
the Bankruptcy Code defines four types of "underwriters":
(i) persons who purchase a claim against, an interest in, or a claim for
administrative expense against the debtor with a view to
distributing any security received in exchange for such a claim or
interest;
(ii) persons who offer to sell securities offered under a plan for the
holders of such securities;
(iii) persons who offer to buy such securities from the holders of such
securities, if the offer to buy is (a) with a view to distributing
such securities and (b) made under a distribution agreement; and
(iv) a person who is an "issuer" with respect to the securities, as the
term "issuer" is defined in section 2(11) of the 1933 Act.
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Under section 2(11) of the 1933 Act, an "issuer" includes any person
directly or indirectly controlling or controlled by the issuer, or any person
under direct or indirect common control with the issuer.
To the extent that persons deemed to be "underwriters" receive securities
pursuant to the Plan, resales by such persons would not be exempt under section
1145 of the Bankruptcy Code from registration under the 1933 Act or other
applicable state laws. Persons deemed to be "underwriters," however, may be able
to sell such securities without registration subject to the provisions of Rule
144 under the 1933 Act, which permits the public sale of securities received
pursuant to the Plan by "underwriters," subject to the availability to the
public of current information regarding the issuer and to volume limitations and
certain other conditions.
Whether any particular person would be deemed an "underwriter" with
respect to any security to be issued pursuant to the Plan would depend upon
various facts and circumstances applicable to that person. Accordingly, the
Debtors express no view as to whether any person would be an "underwriter" with
respect to any security to be issued pursuant to the Plan.
Given the complex, subjective nature of the question of whether a
particular person may be an "underwriter," the Debtors make no representations
concerning the right of any person to trade in the Nextel Stock to be
distributed pursuant to the Plan. Potential recipients of the Nextel Stock are
strongly urged to consult their own counsel concerning whether they may freely
trade such securities.
128
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C. Certain Transactions by Stockholders
Under section 1145(a)(4) of the Bankruptcy Code, stockbrokers are required
to deliver a copy of the Disclosure Statement (and supplements hereto, if any,
if ordered by the Bankruptcy Court) at or before the time of delivery of
securities issued under the Plan to their customers for the first 40 days after
the Effective Date. This requirement specifically applies to trading and other
aftermarket transactions in such securities.
THE FOREGOING SUMMARY DISCUSSION IS GENERAL IN NATURE AND HAS BEEN
INCLUDED IN THIS DISCLOSURE STATEMENT SOLELY FOR INFORMATIONAL PURPOSES. THE
DEBTORS DO NOT MAKE ANY REPRESENTATIONS CONCERNING, AND DO NOT PROVIDE ANY
OPINION OR ADVICE WITH RESPECT TO, THE SECURITIES LAW AND BANKRUPTCY LAW MATTERS
DESCRIBED ABOVE. THE DEBTORS ENCOURAGE EACH PERSON WHO IS TO RECEIVE NEXTEL
STOCK PURSUANT TO THE PLAN TO CONSIDER CAREFULLY AND CONSULT WITH HIS, HER OR
ITS OWN LEGAL ADVISOR(S) WITH RESPECT TO SUCH (AND ANY RELATED) MATTERS, IN VIEW
OF THE UNCERTAINTY CONCERNING THE AVAILABILITY OF EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND EQUIVALENT STATE SECURITIES
AND "BLUE SKY" LAWS TO A RECIPIENT OF NEXTEL STOCK WHO MAY BE DEEMED TO BE AN
"UNDERWRITER" (WITHIN THE MEANING OF BANKRUPTCY CODE SECTION 1145(b)(1)) AND/OR
AN "AFFILIATE" OF, OR A PERSON WHO EXERCISES "CONTROL" OVER, GEOTEK UNDER
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING DISCUSSION IS A SUMMARY OF CERTAIN OF THE MORE SIGNIFICANT
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN TO THE DEBTORS AND HOLDERS OF CLAIMS
OR INTERESTS BASED ON THE TAX LAWS IN EFFECT AS OF THE DATE OF THIS DISCLOSURE
STATEMENT. THIS DISCUSSION DOES NOT ADDRESS THE PARTICULAR FEDERAL INCOME TAX
CONSEQUENCES THAT MAY BE RELEVANT TO CERTAIN TYPES OF TAXPAYERS SUBJECT TO
SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS (SUCH AS LIFE INSURANCE
COMPANIES, TAX-EXEMPT ORGANIZATIONS AND TAXPAYERS WHO ARE NOT U.S. DOMESTIC
CORPORATIONS OR CITIZENS OR RESIDENTS OF THE UNITED STATES), NOR DOES IT DISCUSS
ANY ASPECT OF STATE, LOCAL, FOREIGN OR OTHER TAX LAWS THAT MAY BE APPLICABLE TO
129
<PAGE>
PARTICULAR TAXPAYERS. THE TAX CONSEQUENCES TO HOLDERS MAY VARY BASED ON THE
INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER.
AS OF THE DATE OF THIS DISCLOSURE STATEMENT, NO RULING HAS BEEN OBTAINED
FROM THE SERVICE WITH RESPECT TO ANY OF THE TAX CONSEQUENCES OF THE PLAN. THE
DEBTORS HAVE NOT OBTAINED AN OPINION OF COUNSEL WITH RESPECT TO ANY OF THE TAX
CONSEQUENCES DESCRIBED BELOW. THE DISCUSSION AND CONCLUSIONS PRESENTED BELOW MAY
BE AFFECTED BY MATTERS NOT DISCUSSED THEREIN. EACH HOLDER OF A CLAIM OR INTEREST
IS STRONGLY URGED TO CONSULT WITH HIS OWN TAX ADVISOR REGARDING THE FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES OF THE PLAN.
A. Federal Income Tax Consequences to the Debtors
It is anticipated that the consummation of the Plan will not result in any
federal income tax liability on the part of the Debtors. The Debtors reported on
their consolidated federal income tax return for the period ending December 31,
1996 net operating loss carryforwards ("NOLs") in excess of $169 million, which
the Debtors can utilize to offset income and gains that may be realized by them
in the process of liquidating the Debtors' assets pursuant to the Plan and to
minimize its potential liability for alternative minimum tax, if applicable.
1. Cancellation of Indebtedness Income
The Plan contemplates that certain Holders of Claims will receive
consideration that is expected to have an aggregate value that is less than the
full amount of such Claims. Under the Internal Revenue Code of 1986, as amended
(the "Tax Code"), a taxpayer generally must include in gross income the amount
of any discharged or canceled indebtedness realized during the taxable year,
except to the extent payment of such indebtedness would have given rise to a
deduction for Federal income tax purposes. However, section 108 of the Tax
130
<PAGE>
Code provides that, in a case under the Bankruptcy Code, where the discharge of
indebtedness is granted by the bankruptcy court or is pursuant to a plan
approved by the bankruptcy court, the amount of cancellation of indebtedness
("COD") is excluded from income and instead is applied, at the end of the
taxable year in which such discharge occurs, to reduce the tax attributes of the
taxpayer in the following order: NOLs, tax credit carryforwards, alternative
minimum tax credit carryovers, capital loss carryforwards, the tax bases of
assets, passive activity loss and credit carryovers and foreign tax credit
carryovers.
The Plan contemplates the satisfaction on the Effective Date, of certain
of the Claims with distributions of cash and/or property, the total value of
which is expected to be less than the Allowed amount of such Claims. The
satisfaction of such Claims will therefore result in COD that is excluded from
the income of the Debtors under the bankruptcy exception of section 108 of the
Tax Code.
Because the Debtors' NOLs and other tax attributes will be reduced, at the
end of the taxable year in which the COD income is realized, by the amount of
such income, such NOLs and tax attributes will, thereafter, no longer be
available in full to offset future income and gains of the Debtors. Because the
Plan does not provide for a discharge of Claims, but rather for the eventual
dissolution of the Debtors without full payment of such Claims, any COD should
be realized in the year of dissolution of the Debtors. Accordingly, the Debtors
should have completed the liquidation and distribution of their assets as
contemplated by the Plan before the end of the taxable year in which COD income
is realized. The Debtors therefore should not incur any Federal income tax
liability on account of COD income that they realize at some date in the future.
131
<PAGE>
2. Gain Resulting From the Consummation of the Plan
The Debtors' distributions of their assets in satisfaction of Claims will
result in the recognition of gain for Federal income tax purposes to the extent
of the excess, if any, of each asset's fair market value over the adjusted tax
basis for such asset. The Debtors believe that, for Federal income tax purposes,
such gain will be offset by existing NOLs and that no Federal income tax
liability will result therefrom. The Debtors' use of their NOLs to offset any
gain from transactions contemplated by the Plan is, for alternative minimum tax
("AMT") purposes, limited to an amount equal to 90 percent of the amount of such
income, also determined for AMT purposes. The AMT is imposed at the rate of 20
percent. Accordingly, the Debtors will incur an AMT liability equal to 2 percent
of their gain from transactions contemplated as part of the implementation of
the Plan. Although this tax gives rise to an AMT credit carryover, which could
be used to offset regular income tax liabilities in future years, the AMT credit
carryover is of little value because (i) it is one of tax attributes reduced as
a consequence of discharge of indebtedness that is excluded from income, and
(ii) the Debtors do not expect to have taxable income in future years. For these
reasons the Debtors do not expect to be able to use this credit to reduce their
future tax liabilities.
B. Federal Income Tax Consequences to Holders of Claims
1. Effect of Distribution
Holders of Claims will recognize gain or loss equal to the difference
between (a) the sum of (i) any cash, and (ii) the fair market value of any other
property that they receive in exchange for such Claims, other than the portion
of such cash and property allocable to any accrued but unpaid interest with
respect to the Claims not previously included in the Holders'
132
<PAGE>
income; and (b) their tax basis for their Claims. Holders of Claims must include
in their income as interest, the portion, if any, of such cash and property that
is allocable to accrued but unpaid interest with respect to the Claims not
previously included in the Holders' income. The Debtors plan to allocate the
property that they distribute as part of the Plan first to the principal amount
of Claims and thereafter to any accrued but unpaid interest on the Claims.
2. Tax Consequences of Owning Property Received With Respect to Claims
A Holder who subsequently disposes of property received in exchange for a
Claim will recognize gain or loss equal to the difference between the amount
realized on the sale and the Holder's tax basis for such property. A Holder's
tax basis for such property will be the fair market value of the property upon
its distribution to the Holders. Such gain or loss generally will be capital in
nature if the relevant property constitutes a capital asset in the hands of the
Holder and will be long-term if such property is held for more than one year.
C. Importance of Obtaining Professional Assistance
AS INDICATED ABOVE, THE FOREGOING IS INTENDED TO BE A SUMMARY ONLY AND NOT
A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. THE FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES OF THE PLAN ARE COMPLEX AND, IN SOME CASES,
UNCERTAIN. ACCORDINGLY, EACH HOLDER OF A CLAIM OR INTEREST IS STRONGLY URGED TO
CONSULT WITH HIS OWN TAX ADVISOR REGARDING THE FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES OF THE PLAN.
133
<PAGE>
IX. CONCLUSION
The Debtors urge Holders of Claims in Voting Classes to vote
to accept the Plan and to evidence such acceptance by returning their Ballots so
they will be
actually received not later than 5:00 p.m. (E. D. T.) on June , 1999.
Dated: Montvale, New Jersey
April 9, 1999
GEOTEK COMMUNICATIONS, INC.
On behalf of itself and all Debtors
By: /s/ Anne E. Eisele
-------------------------------------
Name: Anne Eisele
Title: President
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER, LLP
/s/ Andrew A. Kress
- ---------------------------------
Andrew A. Kress (AK 8985)
425 Park Avenue
New York, New York 10022
(212) 836-8000
YOUNG CONAWAY STARGATT
& TAYLOR, LLP
Laura Davis Jones (No. 2436)
P.O. Box 391
Rodney Square North, 11th Floor
Wilmington, Delaware 19801
(302) 571-6600
Co-Counsel to the Debtors
134
<PAGE>
APPENDICES TO DISCLOSURE STATEMENT
Appendix A: Debtors' First Amended Consolidated Plan of Liquidation
Appendix B: List of Members of Creditors' Committee
Appendix C: Nextel Communication, Inc.'s Form 10K for the Fiscal Year
Ended 12/31/98.
Appendix D: Liquidation Analysis
135
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re ) Chapter 11
)
GEOTEK COMMUNICATIONS, INC., et al.,* ) Case No. 98 -1375 (PJW)
)
Debtors. ) Jointly Administered
DEBTORS' FIRST AMENDED CONSOLIDATED PLAN OF LIQUIDATION
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER, LLP
425 Park Avenue
New York, New York 10022
(212) 836-8000
YOUNG CONAWAY STARGATT
& TAYLOR, LLP
P.O. Box 391
Rodney Square North, 11th Floor
Wilmington, Delaware 19801
(302) 571-6600
Co-Counsel to the Debtors
Dated: Wilmington, Delaware
April 9, 1999
- ---------------------------
* A complete list of the Debtors herein is set forth on the following pages.
<PAGE>
LIST OF ALL DEBTORS
-------------------
GEOTEK COMMUNICATIONS, INC., Case No. 98-1375 (PJW)
f/k/a Geotek Industries, Inc., d/b/a
PowerSpectrum of New York, Inc.
and PowerSpectrum of Washington, D.C.
ANSA COMMUNICATIONS, INC. Case No. 98-1376 (PJW)
CLW COMMUNICATIONS, INC. Case No. 98-1377 (PJW)
CUMULOUS HOLDING CORP. Case No. 98-1378 (PJW)
GELICO, INC. Case No. 98-1379 (PJW)
GELICO OF CHICAGO, INC. Case No. 98-1380 (PJW)
GENERAL PHOTONICS HOLDING Case No. 98-1381 (PJW)
CORPORATION, d/b/a General
Photonics Corporation
GEOPOWER, INC. Case No. 98-1382 (PJW)
GEOTEK ACQUISITION CORP. Case No. 98-1383 (PJW)
GEOTEK AMERICA, INC., d/b/a Geotek Case No. 98-1384 (PJW)
of America, Inc.
GEOTEK ASIA, INC. Case No. 98-1385 (PJW)
GEOTEK DATA, INC. Case No. 98-1386 (PJW)
GEOTEK FINANCING CORPORATION Case No. 98-1387 (PJW)
GEOTEK GMBH HOLDING Case No. 98-1388 (PJW)
CORPORATION
GEOTEK HOLDINGS, INC., f/k/a Case No. 98-1389 (PJW)
Geotek USA, Inc.
GEOTEK INTERNATIONAL Case No. 98-1390 (PJW)
NETWORKS, INC.
GEOTEK LICENSE HOLDINGS, INC. Case No. 98-1391 (PJW)
<PAGE>
GEOTEK OF ATLANTA, INC. Case No. 98-1392 (PJW)
GEOTEK OF BOSTON, INC. Case No. 98-1393 (PJW)
GEOTEK OF CHICAGO, INC. Case No. 98-1394 (PJW)
GEOTEK OF DALLAS, INC. Case No. 98-1395 (PJW)
GEOTEK OF HOUSTON, INC. Case No. 98-1396 (PJW)
GEOTEK OF MIAMI, INC. Case No. 98-1397 (PJW)
GEOTEK OF NEW YORK, INC. Case No. 98-1398 (PJW)
GEOTEK OF ORLANDO, INC. Case No. 98-1399 (PJW)
GEOTEK OF PHILADELPHIA, INC. Case No. 98-1400 (PJW)
GEOTEK OF TAMPA, INC. Case No. 98-1401 (PJW)
GEOTEK OF WASHINGTON, D.C., INC. Case No. 98-1402 (PJW)
GEOTEK SERVICES, INC., f/k/a Case No. 98-1403 (PJW)
Geotek USA, Inc.
GEOTEK SUBSIDIARY Case No. 98-1404 (PJW)
INDUSTRIES, INC.
GEOTEK TECHNOLOGIES, INC. Case No. 98-1405 (PJW)
GEOTEK USA, INC., f/k/a Case No. 98-1406 (PJW)
PowerSpectrum, Inc., d/b/a
PowerSpectrum, Incorporated,
PowerSpectrum of Houston, Inc.,
PowerSpectrum of Maryland, Inc.,
PowerSpectrum of New York,Inc.,
PowerSpectrum of N.Y., Inc.,
PowerSpectrum of NYC, Inc.,
PowerSpectrum of San Antonio, Inc., and
PowerSpectrum of Washington, D.C., Inc.
GEOTEK U.S. NETWORKS, INC. Case No. 98-1407 (PJW)
LASER ACQUISITION CORPORATION Case No. 98-1408 (PJW)
<PAGE>
MacDERMOTT
COMMUNICATIONS, INC. Case No. 98-1409 (PJW)
METRO NET SYSTEMS, INC. Case No. 98-1410 (PJW)
f/k/a Geotek MNS, Inc.,
M.I.S. HOLDINGS ACQUISITION Case No. 98-1411 (PJW)
CORP.
MOBILE MESSAGE SERVICE Case No. 98-1412 (PJW)
OF TEXAS, INC.
OAKHILL COMMUNICATIONS, INC. Case No. 98-1413 (PJW)
ORAM USA, INC. Case No. 98-1414 (PJW)
PATLEX INTERNATIONAL Case No. 98-1415 (PJW)
CORPORATION
PATLEX OF DELAWARE, INC. Case No. 98-1416 (PJW)
POWERSPECTRUM MICROWAVE, Case No. 98-1417 (PJW)
INC.
POWERSPECTRUM OF ATLANTA, INC. Case No. 98-1418 (PJW)
POWERSPECTRUM OF BOSTON, INC. Case No. 98-1419 (PJW)
POWERSPECTRUM OF BUFFALO, Case No. 98-1420 (PJW)
INC.
POWERSPECTRUM OF CHARLOTTE, Case No. 98-1421 (PJW)
INC.
POWERSPECTRUM OF CHICAGO, Case No. 98-1422 (PJW)
INC.
POWERSPECTRUM OF CINCINNATI, Case No. 98-1423 (PJW)
INC.
POWERSPECTRUM OF D.C., INC. Case No. 98-1424 (PJW)
POWERSPECTRUM OF DALLAS, INC. Case No. 98-1425 (PJW)
POWERSPECTRUM OF DENVER, INC. Case No. 98-1426 (PJW)
<PAGE>
POWERSPECTRUM OF GREENSBORO, Case No. 98-1427 (PJW)
INC.
POWERSPECTRUM OF HARTFORD, Case No. 98-1428 (PJW)
INC.
POWERSPECTRUM OF Case No. 98-1429 (PJW)
INDIANAPOLIS, INC.
POWERSPECTRUM OF Case No. 98-1430 (PJW)
JACKSONVILLE, INC.
POWERSPECTRUM OF KANSAS Case No. 98-1431 (PJW)
CITY, INC.
POWERSPECTRUM OF MEMPHIS, Case No. 98-1432 (PJW)
INC.
POWERSPECTRUM OF MIAMI, INC. Case No. 98-1433 (PJW)
POWERSPECTRUM OF Case No. 98-1434 (PJW)
MINNEAPOLIS, INC.
POWERSPECTRUM OF NASHVILLE, Case No. 98-1435 (PJW)
INC.
POWERSPECTRUM OF Case No. 98-1436 (PJW)
NEW ORLEANS, INC.
POWERSPECTRUM OF Case No. 98-1437 (PJW)
NEW YORK CITY, INC.
POWERSPECTRUM OF Case No. 98-1438 (PJW)
ORLANDO, INC.
POWERSPECTRUM OF Case No. 98-1439 (PJW)
PHILADELPHIA, INC.
POWERSPECTRUM OF PHOENIX, INC. Case No. 98-1440 (PJW)
POWERSPECTRUM OF ROCHESTER, Case No. 98-1441 (PJW)
INC.
POWERSPECTRUM OF SALT LAKE Case No. 98-1442 (PJW)
CITY, INC.
<PAGE>
POWERSPECTRUM OF SAN Case No. 98-1443 (PJW)
FRANCISCO, INC.
POWERSPECTRUM OF SEATTLE, INC. Case No. 98-1444 (PJW)
POWERSPECTRUM OF TAMPA, INC. Case No. 98-1445 (PJW)
RESHEF USA, INC. Case No. 98-1446 (PJW)
U.S.I. VENTURE CORP. Case No. 98-1447 (PJW)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................1
A. Scope of Definitions............................................1
B. Definitions.....................................................1
ARTICLE II CLASSIFICATION OF CLAIMS AND INTERESTS....................22
2.1 Class 1-Administrative Expense Claims..........................22
2.2 Class 2-Priority Tax Claims....................................22
2.3 Class 3-Other Priority Claims..................................22
2.4 Class 4-15% Notes Claims.......................................22
2.5 Class 5-HNS Claims.............................................22
2.6 Class 6-Other Secured Claims...................................23
2.7 Class 7-S-C Rig Senior Loan Claims.............................23
2.8 Class 8-General Unsecured Claims...............................23
2.9 Class 9-Unsecured 12% Notes Claims.............................23
2.10 Class 10-Series H Preferred Stock Interests....................23
2.11 Class 11-Series I and K Preferred Stock Interests..............23
2.12 Class 12-Series L Preferred Stock Interests....................23
2.13 Class 13-Series M Preferred Stock Interests....................23
2.14 Class 14-Series N Preferred Stock Interests....................23
2.15 Class 15-Series O, P, Q, and T Preferred Stock Interests.......23
2.16 Class 16-Common Stock Interests............................... 23
2.17 Class 17-Continuing Subsidiary Stock Interests.................24
2.18 Class 18-Non-Continuing Subsidiary Stock Interests.............24
ARTICLE III TREATMENT OF ALLOWED CLAIMS AND ALLOWED INTERESTS.........24
3.1 Satisfaction of Claims and Interests...........................24
3.2 Class 1:Administrative Expense Claims..........................24
3.3 Class 2:Priority Tax Claims....................................24
3.4 Class 3:Other Priority Claims..................................25
3.5 Class 4:15% Notes Claims.......................................25
3.6 Class 5:HNS Claims.............................................27
3.7 Class 6:Other Secured Claims...................................29
3.8 Class 7:S-C Rig Senior Loan Claims.............................29
3.9 Class 8:General Unsecured Claims...............................29
3.10 Class 9:Unsecured 12% Notes Claims.............................30
3.11 Class 10:Series H Preferred Stock Interests....................30
3.12 Class 11:Series I and K Preferred Stock Interests..............30
3.13 Class 12:Series L Preferred Stock Interests....................30
i
<PAGE>
TABLE OF CONTENTS (CON'T) Page
3.14 Class 13:Series M Preferred Stock Interests....................31
3.15 Class 14:Series N Preferred Stock Interests....................31
3.16 Class 15:Series O, P, Q, and T Preferred Stock Interests.......31
3.17 Class 16:Common Stock Interests................................31
3.18 Class 17:Continuing Subsidiary Stock Interests.................31
3.19 Class 18:Non-Continuing Subsidiary Stock Interests.............31
ARTICLE IV MEANS FOR IMPLEMENTATION OF THE PLAN...............31
4.1 Cancellation and Surrender of Instruments......................31
4.2 Adoption of New Charter and New By-Laws........................33
4.3 Disputed Claims................................................33
4.4 Fractional Shares of Nextel Stock.............................33
4.5 Distributions to Holders of Allowed Claims.....................34
4.6 Disputed Claims Reserve........................................34
4.7 Distributions to Holders of Subsequently Allowed Claims........35
4.8 Timing of Distributions........................................35
4.9 Resolution of Disputed Claims..................................35
4.10 Setoff.........................................................35
4.11 Unclaimed Property.............................................36
4.12 Direction to Parties...........................................36
4.13 Waiver of Contractual Subordination Rights.....................37
4.14 Preservation of Debtors' Causes of Action......................37
4.15 Liquidation and Dissolution of the Debtors.....................37
4.16 Means of Implementation, Release of Liens,
Rights and Interests With Respect to Cash Collateral...........37
4.17 Bar Date for Fee Applications..................................39
ARTICLE V PROVISIONS REGARDING CORPORATE GOVERNANCE
AND MANAGEMENT OF REORGANIZED GEOTEK...............40
5.1 General........................................................40
5.2 Corporate Governance and Officers of the Reorganized Debtors...40
5.3 Amended By-Laws and Amended Certificates of Incorporation......40
ARTICLE VI SUBSTANTIVE CONSOLIDATION..........................40
6.1 Substantive Consolidation......................................40
ARTICLE VII CRAMDOWN 41
ARTICLE VIII EXECUTORY CONTRACTS................................41
8.1 Rejection of Executory Contracts...............................41
ii
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TABLE OF CONTENTS(CONT'D)
8.2 Assumption and Assignment of Site Leases.......................41
8.3 Approval of Assumption or Rejection of Executory Contracts.....42
8.4 Curing of Defaults.............................................42
8.5 Claims for Rejection Damages...................................42
ARTICLE IX RETENTION OF JURISDICTION...................................43
ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND
EFFECTIVENESS...............................................44
10.1 Conditions Precedent to Confirmation...........................44
10.2 Conditions Precedent to the Effective Date.....................45
10.3 Waiver of Condition to Confirmation of the Plan and
Effective Date.................................................45
10.4 Effect of Failure of Conditions................................45
ARTICLE XI TITLE TO PROPERTY; INJUNCTION......................46
11.1 Vesting of Property............................................46
11.2 Injunction.....................................................46
11.3 Releases.......................................................46
11.4 Term of Bankruptcy Injunctions or Stays........................47
ARTICLE XII MISCELLANEOUS PROVISIONS....................................47
12.1 Revocation.....................................................47
12.2 Amendments.....................................................47
12.3 No Interest....................................................47
12.4 No Attorneys' Fees.............................................47
12.5 Exculpation....................................................48
12.6 Termination of Creditors' Committee............................48
12.7 Post-Effective Date Fees and Expenses..........................48
12.8 Time...........................................................48
12.9 Governing Law..................................................48
12.10 Headings.......................................................49
12.11 Severability...................................................49
12.12 Notices........................................................49
12.13 Effectuating Documents and Further Transactions................52
12.14 Corporate Action...............................................53
12.15 Exemption from Transfer Taxes..................................53
12.16 Payment of Statutory Fees......................................53
12.17 Withholding and Reporting Requirements.........................53
12.18 Exhibits/Schedules.............................................53
12.19 Allocation of Plan Distributions Between Principal
and Interest...................................................53
iii
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12.20 Non-Admissibility..............................................54
12.21 Filing of Additional Documents.................................54
12.22 Successors and Assigns.........................................55
LIST OF EXHIBITS
Exhibit A.........15% Secured Notes Phase I Licenses
Exhibit B.........15% Secured Notes Phase I Site Leases**
Exhibit C.........15% Secured Notes Phase II Licenses
Exhibit D.........15% Secured Notes Phase II Site Leases**
Exhibit E.........Amended Cash Collateral Terms and Conditions
Exhibit F.........D&O Escrow Agreement**
Exhibit G.........HNS Phase I Licenses
Exhibit H.........HNS Phase I Site Leases**
Exhibit I.........HNS Phase II Licenses
Exhibit J.........HNS Phase II Site Leases**
Exhibit K.........License Assignment Agreement
Exhibit L.........Form of New By-Laws**
Exhibit M.........Form of New Charter**
Exhibit N.........Nextel Purchase Agreement and Nextel Purchase
Agreement Amendment
Exhibit O.........Post-Confirmation Budget
Exhibit P.........Post-Confirmation Cash Collateral Terms and Conditions**
** Document to be filed on or before the Exhibit Filing Date.
iv
<PAGE>
DEBTORS' FIRST AMENDED CONSOLIDATED PLAN OF LIQUIDATION
Geotek Communications, Inc. and its seventy-two (72) affiliated Debtors
hereby propose the following First Amended Consolidated Plan of Liquidation
under section 1121(a) of title 11 of the United States Code.
ARTICLE I
DEFINITIONS
A. Scope of Definitions
Unless the context otherwise requires, each term stated in either the
singular or plural shall be equally applicable to the singular and plural forms
as well as the past, present and future tenses of the terms defined. Pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
feminine or neuter. Unless otherwise specified, all section, article, schedule,
or exhibit references in the Plan are to the respective Section in, Article of,
Schedule to, or Exhibit to, the Plan. The terms "herein," "hereof," "hereunder,"
"hereto" and other words of similar import refer to the Plan as a whole and not
to any particular section, subsection or clause contained in the Plan. The rules
of construction contained in section 102 of the Bankruptcy Code shall apply to
the construction of the Plan. The headings in the Plan are for convenience of
reference only and shall not limit or otherwise affect the provisions of the
Plan.
B. Definitions
1.1 "15% Notes Claims" shall mean, collectively, the 15% Secured Notes
Claims and the 15% Secured Notes Deficiency Claims.
1.2 "15% Secured Notes" shall mean the notes issued pursuant to the 15%
Secured Note Indenture, secured principally by a pledge of the common stock of
Geotek U.S. Networks, Inc. and the other Senior Secured Note Collateral.
1.3 "15% Secured Notes Cash Collateral" shall mean "Cash Collateral" as
that term is defined in the Amended Cash Collateral Terms and Conditions,
including, but not limited to, proceeds from the sale of Senior Secured Note
Collateral by the Debtors subsequent to the Filing Date.
1.4 "15% Secured Notes Cash Collateral Claim" shall mean the "Net
Withdrawn Amount" as that term is defined in the Amended Cash Collateral Terms
and Conditions.
1.5 "15% Secured Notes Cash Collateral Contribution Amount" shall mean 15%
Secured Notes Cash Collateral in an amount equal to the Net Available Cash
Deficiency Amount.
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1.6 "15% Secured Notes Deficiency Claims" shall mean a Claim, if any, of
the Holders of the 15% Secured Notes arising under the 15% Secured Notes
Indenture, to the extent such Claim is not a Secured Claim, including such
Claim, if any, that is a Secondary Liability Claim.
1.7 "15% Secured Notes Claims" shall mean any Claim of the Holders of the
15% Secured Notes arising under the 15% Secured Notes Indenture to the extent
such Claim is a Secured Claim, including such Secured Claim, if any, that is a
Secondary Liability Claim.
1.8 "15% Secured Notes Contribution Amount" shall mean Cash in the amount
equal to the difference between (x) the Net Available Cash Deficiency Amount,
and (y) the HNS Contribution Amount.
1.9 "15% Secured Notes Indenture" shall mean that certain Indenture dated
as of June 30, 1995 (as amended and supplemented) among Geotek and WTC, as
successor trustee.
1.10 "15% Secured Notes Indenture Trustee" shall mean WTC, as successor
trustee under the 15% Secured Notes Indenture.
1.11 "15% Secured Notes Indenture Trustee Fee Claim" shall mean the Claim
of the 15% Secured Notes Indenture Trustee for reasonable costs, expenses and
charges (including, without limitation, the reasonable fees and charges of their
legal counsel) incurred during the Post-Filing Date Period in connection with
the Chapter 11 Cases in its capacity as the 15% Secured Notes Indenture Trustee.
1.12 "15% Secured Notes Net Cash Collateral" shall mean Cash in an amount
equal to the difference between (x) the 15% Secured Notes Cash Collateral as of
the Effective Date, and (y) the 15% Secured Notes Cash Collateral Contribution
Amount.
1.13 "15% Secured Notes Phase I Cash" shall mean Cash in the amount of
$12,690,750 (together with any income, profits or interest thereon) to be paid
by Nextel in connection with the purchase of the 15% Secured Notes Phase I
Licenses pursuant to the Nextel Purchase Agreement.
1.14 "15% Secured Notes Phase I Licenses" shall mean the FCC Licenses set
forth in the schedule annexed hereto as Exhibit "A."
1.15 "15% Secured Notes Phase I Site Leases" shall mean the real estate
site leases set forth in the schedule annexed hereto as Exhibit "B."
1.16 "15% Secured Notes Phase II Licenses" shall mean the FCC Licenses set
forth in the schedule annexed hereto as Exhibit "C."
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1.17 "15% Secured Notes Phase II Site Leases" shall mean the real estate
site leases set forth in the schedule annexed hereto as Exhibit "D."
1.18 "85/15 Proposal"shall mean the terms of a plan of liquidation
described at the Bankruptcy Court hearing held on October 21, 1998 and as
described in the Interim Order, the Order of the Bankruptcy Court dated November
13, 1998 approving the Original Terms and Conditions and the Cash Collateral
Extension Order.
1.19 "Acknowledgment of Lien" shall mean the Agreement and Acknowledgment
of Lien dated as of February 16, 1999, between S-C Rig and IBJ Whitehall and
acknowledged by the Debtors.
1.20 "Administrative Expense Claim" shall mean (i) any Claim that
constitutes a cost or expense of administration of the Chapter 11 Cases of a
kind specified in section 503(b) of the Bankruptcy Code entitled to priority
under section 507(a)(1) of the Bankruptcy Code, including, without limitation,
any actual and necessary costs and expenses of preserving the estates of the
Debtors; (ii) any Fee Claim to the extent Allowed by Final Order under sections
330 and 331 of the Bankruptcy Code; (iii) any Claim entitled to be treated as an
Administrative Expense Claim pursuant to Final Order; (iv) any Cure Claim under
an Assumed Executory Contract; (v) any DIP Lender Claim; (vi) any Substantial
Contribution Claim; (vii) the D&O Retention Claim; (viii) the Merrill Lynch Fee
Claim to the extent Allowed by Final Order; (ix) the IBJ Whitehall Fee Claim to
the extent Allowed by Final Order; (x) the 15% Secured Notes Indenture Trustee
Fee Claim to the extent Allowed by Final Order; (xi) the 15% Secured Notes Cash
Collateral Claim; and (xii) fees or charges assessed against the estates of the
Debtors under section 1930 of chapter 123 of title 28 of the United States Code.
For purposes of the Plan, the term "Administrative Expense Claim" shall not
include the Post-Confirmation Budget Amount, the Employee Retention Payment and
Post-Filing Date Intercompany Claims, and provided further, that in the event
either a Phase I Closing and/or a Phase II Closing shall have occurred, the term
"Administrative Expense Claim" shall not include the 15% Secured Notes Cash
Collateral Claim and the HNS Fee Claim.
1.21 "Allowed" shall mean, with reference to any Claim, (i) any Claim
against the Debtors that has been listed by the Debtors in their Schedules, as
such Schedules may be amended by the Debtors from time to time in accordance
with Bankruptcy Rule 1009, as liquidated in amount and not disputed or
contingent and for which no contrary proof of claim has been filed with the
Bankruptcy Court; (ii) any Claim allowed pursuant to the terms of this Plan;
(iii) any Claim that has not been disallowed and is not Disputed; or (iv) any
Claim which, if Disputed, has been allowed by Final Order. Any Claim allowed
solely for the purpose of voting to accept or reject the Plan pursuant to an
order of the Bankruptcy Court shall not constitute an "Allowed Claim" under the
Plan.
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1.22 "Amended Cash Collateral Terms and Conditions" shall mean the Amended
Terms and Conditions Regarding Use of Cash Collateral, a copy of which is
annexed hereto as Exhibit "E," and which was approved by the Bankruptcy Court
pursuant to the Cash Collateral Extension Order.
1.23 "Assumed Executory Contract" shall mean an unexpired contract or
lease entered into prior to the Filing Date, as contemplated by section 365 of
the Bankruptcy Code, of any of the Debtors that is or has been assumed pursuant
to section 365(a) or section 1123(b)(2) of the Bankruptcy Code in accordance
with Article VIII of the Plan.
1.24 "Available Cash" shall mean:
A. In the event a Phase I Closing and a Phase II Closing shall
have occurred, all Cash of Reorganized Geotek and the Debtors, as at the
Effective Date, including, but not limited to the NB3 Escrow Proceeds, proceeds
of Avoidance Actions, and the Released 15% Secured Notes Cash Collateral Amount,
together with all Cash received by Reorganized Geotek subsequent to the
Effective Date but prior to the Final Distribution Date, provided, however, the
term "Available Cash" shall not include the (i) Phase I Cash, (ii) Nextel Escrow
Cash, (iii) 15% Secured Notes Cash Collateral in the amount of $5,584,079, (iv)
Cumulous Net Proceeds, (v) Key Employee Retention Escrow Cash,(vi) Phase II
Cash, or (vii) Cash in the amount of $1,915,921 to be distributed to HNS
pursuant to Section 3.6(A)(1)(a)(iii) of the Plan.
B. In the event a Phase I Closing and a Phase II Termination
Event shall have occurred, all Cash of Reorganized Geotek and the Debtors, as at
the Effective Date, including, but not limited to the NB3 Escrow Proceeds,
proceeds of Avoidance Actions, and the HNS Phase I Cash Contribution Amount,
together with all Cash received by Reorganized Geotek subsequent to the
Effective Date, provided, however, the term "Available Cash" shall not include
the (i) 15% Secured Notes Phase I Cash, (ii) 15% Secured Notes Cash
Collateral,(iii) HNS Phase I Cash Payment, or (iv) Key Employee Retention Escrow
Cash.
C. In the event a Nextel Termination Event shall have
occurred, all Cash of Reorganized Geotek and the Debtors as at the Effective
Date, together with all Cash received by Reorganized Geotek subsequent to the
Effective Date, including proceeds of Avoidance Actions, provided, however, the
term "Available Cash" shall not include the (i) 15% Secured Notes Cash
Collateral, (ii) NB3 Escrow Proceeds, or (iii) Key Employee Retention Escrow
Cash.
1.25 "Avoidance Actions" shall mean all Causes of Action arising under
sections 510(c), 544, 545, 547, 548 and 549 of the Bankruptcy Code.
1.26 "Ballot" shall mean the form of ballot distributed to a Holder of an
impaired Claim on which is to be indicated acceptance or rejection of the Plan.
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1.27 "Ballot Date" shall mean the date fixed by the Bankruptcy Court as
the last date for timely submission of a Ballot by a Holder of a Claim.
1.28 "Bankruptcy Code" shall mean title 11 of the United States Code, 11
U.S.C.ss.ss. 101 et seq., as amended from time to time, to the extent applicable
to the Chapter 11 Cases.
1.29 "Bankruptcy Court" shall mean the United States Bankruptcy Court for
the District of Delaware having jurisdiction over the Chapter 11 Cases and, to
the extent of any withdrawal of reference made pursuant to section 157 of title
28 of the United States Code, the United States District Court for the District
of Delaware.
1.30 "Bankruptcy Rules" shall mean the Federal Rules of Bankruptcy
Procedure as promulgated by the United States Supreme Court under section 2075
of title 28 of the United States Code, as amended from time to time, and the
local rules of the Bankruptcy Court, as amended from time to time, to the extent
applicable to the Chapter 11 Cases.
1.31 "Business Day" shall mean a day other than a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required to close.
1.32 "Capital Lease" shall mean any putative lease of equipment or other
personal property in which any of the Debtors has a financial interest and
regarding which the Bankruptcy Court has determined, or with which the putative
lessor and the Debtors are in agreement, that such lease constitutes a financing
transaction.
1.33 "Cash" shall mean the lawful currency of the United States of
America.
1.34 "Cash Collateral Extension Order" shall mean the Order Extending
Debtors' Authorization to Use Cash Collateral Pursuant to Terms and Conditions
dated February 16, 1999.
1.35 "Causes of Action" shall mean all actions, causes of action,
liabilities, suits, debts, indebtedness (for borrowed money or in the nature of
a guarantee), dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, trespasses, damages, rights, executions, claims, Claims,
objections to Claims, judgments and demands whatsoever, whether known or
unknown, choate or inchoate, suspected or unsuspected, in law, equity or
otherwise.
1.36 "Chapter 11 Cases" shall mean the cases under chapter 11 of the
Bankruptcy Code commenced by the Debtors on the Filing Date, jointly
administered pursuant to order of the Bankruptcy Court dated June 29, 1998, and
captioned "In re Geotek Communications, Inc., et al., Case No. 98-1375 (PJW),
Jointly Administered."
1.37 "Claim" shall mean a claim against one or more of the Debtors within
the meaning of section 101(5) of the Bankruptcy Code.
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1.38 "Class" shall mean any group of Holders of Claims or Interests that
are classified together as a group, as set forth in Article II of the Plan.
1.39 "Class 7 Subordination Payment" shall mean Net Distributable Cash in
an amount equal to the difference between the (x) Class 9 Distribution Amount,
and (y) Class 9 Settlement Amount.
1.40 "Class 9 Distribution Amount" shall mean the aggregate amount of each
Holder of an Allowed Class 9 Claim's Unsecured Pro Rata Share of Net
Distributable Cash.
1.41 "Class 9 Settlement Amount" shall mean Net Distributable Cash in an
amount equal to $____________.
1.42 "Collateral" shall mean any property or interest in property of the
estates of the Debtors subject to a Lien as of the Filing Date to secure payment
or performance of a Claim, which Lien is not subject to avoidance under the
Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable
state law.
1.43 "Common Stock" shall mean the common stock, $.01 par value per share,
of Geotek issued and outstanding immediately prior to the Effective Date.
1.44 "Common Stock Option" shall mean any option, warrant, subscription
agreement or other right to purchase or acquire the Common Stock arising under
any agreement, outstanding as of the Effective Date.
1.45 "Confirmation" shall mean the entry, within the meaning of Bankruptcy
Rules 5003 and 9021, of the Confirmation Order by the Clerk of the Bankruptcy
Court on the legal docket.
1.46 "Confirmation Date" shall mean the date of Confirmation.
1.47 "Confirmation Hearing" shall mean the hearing on Confirmation of the
Plan held pursuant to section 1128 of the Bankruptcy Code.
1.48 "Confirmation Order" shall mean the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code and
approving and authorizing the implementation of the transactions contemplated
herein.
1.49 "Consenting Holder" shall mean a Holder of a 15% Notes Claim that
marked a box on the Ballot sent to such Holder indicating such Holder's
agreement to grant the release provided in Section 11.3 of the Plan.
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1.50 "Continuing Subsidiaries" shall mean, collectively, Geotek USA,
Geotek U.S. Networks, Inc., Geotek License Holdings, Inc., Geotek Financing
Corporation, Geotek Asia, Inc., MacDermott Communications, Inc., Cumulous
Holding Corp., the Debtor Site Lessees, and Gelico, Inc.
1.51 "Continuing Subsidiary Stock" shall mean, collectively, the common
stock of each of the Continuing Subsidiaries, issued and outstanding as of the
Filing Date.
1.52 "Conversion Right" shall mean the right as of the Effective Date of
the Holders of any Old Securities (other than Common Stock) arising under any
agreement to convert some or all of their Old Securities to Common Stock.
1.53 "Creditor" shall mean any Person that is the Holder of a Claim
against any of the Debtors. --------
1.54 "Creditors' Committee" shall mean the Official Committee of Unsecured
Creditors appointed in the Chapter 11 Cases pursuant to section 1102 of the
Bankruptcy Code, as such committee may be constituted from time to time.
1.55 "Cumulous Net Proceeds" shall mean the net proceeds realized from the
disposition of Cumulous Holding Corp.'s interest in Cumulous Communications
Company.
1.56 "Cure Claim" shall mean an Allowed Claim arising in connection with a
Debtor's obligation under section 365(b)(1)(A) or (B) of the Bankruptcy Code
relating to an Assumed Executory Contract.
1.57 "D&O Escrow Agreement" shall mean the Escrow Agreement dated as of
the Effective Date between [ ] and [ ], a copy of which is annexed hereto as
Exhibit "E."
1.58 "D&O Escrow Cash" shall mean Cash in the amount of $500,000.
1.59 "D&O Retention Claim" shall mean the Allowed Claim in an amount equal
to the D&O Escrow Cash.
1.60 "Debtor Site Lessees" shall mean, collectively, Geotek USA d/b/a
PowerSpectrum of San Antonio, Inc., PowerSpectrum of Phoenix, Inc.,
PowerSpectrum of Dallas, Inc., Geotek USA d/b/a PowerSpectrum of Houston, Inc.,
PowerSpectrum of Denver, Inc., PowerSpectrum of Miami, Inc., PowerSpectrum of
Orlando, Inc., PowerSpectrum of Philadelphia, Inc. and PowerSpectrum of Tampa,
Inc.
1.61 "Debtors" shall mean, collectively, Geotek, the Continuing
Subsidiaries and the Non-Continuing Subsidiaries, as identified on the list that
immediately follows the cover sheet of this Plan.
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1.62 "Deficiency Claims" shall mean, collectively, the 15% Notes
Deficiency Claims, the HNS License Facility Deficiency Claims and the HNS Vendor
Credit Facility Deficiency Claims.
1.63 "DIP Financing Agreement" shall mean the Credit Agreement dated as of
June 29, 1998, as the same may be amended, supplemented, restated and/or
modified, among Geotek and Geotek USA, as borrowers, and S-C Rig, as lender.
1.64 "DIP Financing Documents" shall mean, collectively, the DIP Financing
Agreement and the Security and Pledge Agreement, together with all financing
statements, additional security agreements, mortgages, notes and other documents
or instruments executed in connection therewith.
1.65 "DIP Lender Claims" shall mean all Allowed Claims of S-C Rig arising
under or related to the DIP Financing Documents, including Claims, if any, which
are Secondary Liability Claims.
1.66 "Disclosure Statement" shall mean the Debtors' First Amended
Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code dated as of
April 9, 1999, pertaining to the Plan, as amended from time to time, and
approved by the Bankruptcy Court.
1.67 "Disposition Assets" shall mean the equity or partnership interest of
(i) Cumulous Holding Corp. in Cumulous Communications Company; (ii) Geotek in
GMSI, Inc.; and (iii) Geotek in Geotek Argentina, S.A.
1.68 "Disputed" shall mean, with reference to any Claim, (i) proof of
which was timely and properly filed and/or which has been or hereafter is listed
on the Schedules as unliquidated, disputed or contingent, and in either case as
to which any of the Debtors, or, if not prohibited by the Plan, any other party
in interest, has interposed a timely objection and/or a request for estimation
in accordance with section 502(c) of the Bankruptcy Code and Bankruptcy Rule
3018, which objection and/or request for estimation has not been withdrawn or
determined by a Final Order, and (ii) proof of which was required to be filed by
order of the Bankruptcy Court but as to which a proof of claim or interest was
not timely or properly filed.
1.69 "Disputed Claims Cash Reserve Amount" shall mean an amount equal to
the sum of the full amounts asserted by the Holders of Disputed Administrative
Expense Claims, Disputed Priority Tax Claims, Disputed Other Tax Claims and
Disputed Other Secured Claims as of the Effective Date or such other amount as
permitted by Section 4.6 of the Plan.
1.70 "Disputed Claims Reserve" shall mean a reserve of Cash or shares of
Nextel Stock for the relevant Class, established pursuant to Section 4.11 of the
Plan for, inter alia, the payment of Disputed Claims that become Subsequently
Allowed Claims.
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1.71 "Distribution" shall mean the distribution in accordance with this
Plan of Cash, shares of Nextel Stock and/or FCC Licenses, as the case may be.
1.72 "Distribution Agent" shall mean Reorganized Geotek or a Person
retained by Reorganized Geotek and approved by Final Order to make Distributions
under the Plan on behalf of Reorganized Geotek.
1.73 "Distribution Date" shall mean the date on which a Distribution,
other than a Final Distribution, is required to be made under the Plan, which
shall be the date that is as soon as practicable after (i) the tenth Business
Day after the Effective Date, or (ii) as to any Disputed Claim which becomes
Allowed after the Effective Date, the tenth Business Day following the date such
Disputed Claim becomes a Subsequently Allowed Claim, or (iii) as to any of the
foregoing, such other date as the Holder of a particular Claim and the Debtors
agree or as the Bankruptcy Court may fix.
1.74 "Effective Date" shall mean the first Business Day after the
conditions specified in Section 10.2 of the Plan have been satisfied or waived.
1.75 "Employee Retention Payment" shall mean the payments required to be
made pursuant to the Key Employee Retention Program and the Supplemental
Employee Retention Program.
1.76 "Escrow Account" shall have the meaning set forth in Section
1.03(b)(ii)(A) of the Nextel Purchase Agreement.
1.77 "Escrow Amount" shall mean the amount of the Nextel Escrow Cash
(including any income, profits or interest thereon).
1.78 "Escrowed Property Distribution Date" shall have the meaning set
forth in Section 1.03(b)(ii)(A) of the Nextel Purchase Agreement.
1.79 "Executory Contract" shall mean any unexpired contract or lease
entered into prior to the Filing Date, as contemplated by section 365 of the
Bankruptcy Code, in effect on the Confirmation Date, between any of the Debtors
and any other Person or Persons and neither assumed nor rejected prior to the
Confirmation Date pursuant to section 365(a) or 1123(b)(2) of the Bankruptcy
Code.
1.80 "Exhibit Filing Date" shall mean the date that exhibits to the Plan
and the Disclosure Statement shall be filed with the Bankruptcy Court and made
available to parties in interest, which date shall be not less than ten (10)
days prior to the Confirmation Hearing.
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1.81 "FCC" shall mean the Federal Communications Commission.
1.82 "FCC Licenses" shall mean all the licenses issued by the FCC to the
Debtors, as licensee.
1.83 "Fee Application" shall mean, an application by a (i) Professional
Person under section 330 or 331 of the Bankruptcy Code for a Fee Claim, or (ii)
Person who asserts a Substantial Contribution Claim.
1.84 "Fee Claim" shall mean a Claim of a Professional Person for
compensation or reimbursement of costs and expenses relating to services
rendered from the Filing Date through and including the Confirmation Date.
1.85 "Filing Date" shall mean June 29, 1998.
1.86 "Final Distribution" shall mean, in the event the Phase I Closing and
a Phase II Closing shall have occurred, the Distribution of Net Distributable
Cash to Holders of Allowed Class 7, Allowed Class 8 and Allowed Class 9 Claims
on the Final Distribution Date in accordance with Sections 3.8, 3.9 and 3.10 of
the Plan.
1.87 "Final Distribution Date" shall mean the tenth Business Day after (a)
the later of (i) the earlier of the occurrence of a (x) Escrowed Property
Distribution Date or (y) Phase II Termination Event, (ii) the date by when the
Disposition Assets shall either have been (x) reduced to Cash or (y) abandoned
pursuant to section 554 of the Bankruptcy Code, and (iii) the date by when all
Disputed Claims shall have been Allowed or disallowed by Final Order, or (b)
such other distribution dates as the Bankruptcy Court may determine.
1.88 "Final Order" shall mean (i) an order, judgment, ruling or other
decree of the Bankruptcy Court as entered on the legal docket maintained by the
Clerk of the Bankruptcy Court which judgment, order or other decree (a) has not
been reversed, stayed, modified or amended and as to which the time to appeal,
petition for certiorari, or seek reargument or rehearing has expired and as to
which no appeal, reargument, petition for certiorari, or rehearing is pending or
as to which any right to appeal, reargue, petition for certiorari or seek
rehearing has been waived in writing in a manner satisfactory to the Debtors, or
(b) if an appeal, reargument, petition for certiorari, or rehearing thereof has
been denied, the time to take any further appeal or petition for certiorari or
further argument or rehearing has expired, or (ii) a stipulation or agreement
entered into which has the effect of any such judgment, order or other decree.
1.89 "General Unsecured Claims" shall mean all unsecured Claims which are
not otherwise separately classified in this Plan, including (i) the Unsecured
12% Notes Indenture Trustee Fee Claim in the event that either (x) Class 9 votes
to reject the Plan, or (y) the Unsecured 12% Notes Indenture Trustee objects to
Confirmation of the Plan, (ii) any Secondary Liability Claims not otherwise
included in a separate Class, and (iii) the Claims of the Holders of Other
Secured Claims to the extent such Claims exceed the value of such Holders'
Collateral, but shall not include the Pre-Filing Date Intercompany Claims, the
HNS Unsecured Claims, or the Deficiency Claims.
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1.90 "Geotek" shall mean Geotek Communications, Inc., a Delaware
corporation, formerly known as Geotek Industries, Inc.
1.91 "Geotek USA" shall mean Geotek USA, Inc., a Delaware corporation,
formerly known as PowerSpectrum, Inc.
1.92 "HNS" shall mean Hughes Network Systems, Inc., a division of Hughes
Electronics Corporation.
1.93 "HNS Claims" shall mean the HNS License Facility Claims and the HNS
Vendor Credit Facility Claims but shall exclude the HNS Unsecured Claims.
1.94 "HNS Contribution Amount" shall mean Cash in the amount equal to
33.3% of the Net Available Cash Deficiency Amount, but not more than $2,500,000.
1.95 "HNS Deficiency Claims" shall mean, collectively, the HNS License
Facility Deficiency Claims and the HNS Vendor Credit Facility Deficiency Claims.
1.96 "HNS Fee Claim" shall mean the Claim of HNS for reasonable costs,
expenses and charges (including without limitation, the reasonable fees and
charges of their experts, consultants and legal counsel) incurred during the
Post-Filing Date Period in connection with the Chapter 11 Cases.
1.97 "HNS License Facility Claims" shall mean, collectively, the HNS
License Facility Secured Claims and the HNS License Facility Deficiency Claims.
1.98 "HNS License Facility Deficiency Claims" shall mean a Claim of HNS
arising under the HNS License Loan Agreement to the extent such Claim is not a
Secured Claim, including such Claim, if any, that is a Secondary Liability
Claim.
1.99 "HNS License Facility Secured Claims" shall mean the Claim of HNS
arising under the HNS License Loan Agreement to the extent such Claim is a
Secured Claim, including such Secured Claim, if any, that is a Secondary
Liability Claim.
1.100 "HNS License Loan Agreement" shall mean that certain loan agreement
dated as of December 21, 1995 (as amended), among Geotek Financing Corporation,
as borrower, HNS, as lender, and Geotek, as guarantor.
1.101 "HNS Phase I Cash" shall mean Cash in the amount of $6,470,250
(together with any income, profits or interest thereon) to be paid by Nextel in
connection with the purchase of the HNS Phase I Licenses pursuant to the Nextel
Purchase Agreement.
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1.102 "HNS Phase I Cash Contribution Amount" shall mean HNS Phase I Cash
in an amount equal to $2,570,250.
1.103 "HNS Phase I Cash Payment" shall mean HNS Phase I Cash in an amount
equal to $3,900,000.
1.104 "HNS Phase I Licenses" shall mean the FCC Licenses set forth in the
schedule annexed hereto as Exhibit "G."
1.105 HNS Phase I Site Leases" shall mean the real estate site leases set
forth in the schedule annexed hereto as Exhibit "H."
1.106 "HNS Phase II Licenses" shall mean the FCC Licenses set forth in the
schedule annexed hereto as Exhibit "I."
1.107 "HNS Phase II Site Leases" shall mean the real estate site leases
set forth in the schedule annexed hereto as Exhibit "J."
1.108 "HNS Unsecured Claims" shall mean the Claim of HNS against any of
the Debtors other than the HNS License Facility Claims and the HNS Vendor Credit
Facility Claims.
1.109 "HNS Vendor Credit Facility Claims" shall mean, collectively, the
HNS Vendor Credit Facility Secured Claims and the HNS Vendor Credit Facility
Deficiency Claims.
1.110 "HNS Vendor Credit Facility Deficiency Claims" shall mean the Claim
of HNS arising under the HNS Vendor Credit Financing Agreement to the extent
such Claim is not a Secured Claim, including such Claim, if any, that is a
Secondary Liability Claim.
1.111 "HNS Vendor Credit Facility Secured Claims" shall mean the Claim of
HNS arising under the HNS Vendor Credit Financing Agreement to the extent such
Claim is a Secured Claim, including such Secured Claim, if any, that is a
Secondary Liability Claim.
1.112 "HNS Vendor Credit Financing Agreement" shall mean that certain
Vendor Credit Financing Agreement dated as of September 27, 1996 (as amended),
among Geotek Financing Corporation, as borrower, HNS, as lender and Geotek, as
guarantor.
1.113 "Holder" shall mean the beneficial owner of any Claim or Interest.
1.114 "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
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1.115 "IBJ Whitehall" shall mean IBJ Whitehall Bank and Trust Company,
formerly known as IBJ Schroder Bank and Trust Company.
1.116 "IBJ Whitehall Fee Claim" shall mean the Claim of IBJ Whitehall for
reasonable costs, expenses and charges (including, without limitation, the
reasonable fees and charges of their experts, consultants and legal counsel)
incurred during the Post-Filing Date Period in its capacity as the trustee under
the 15% Secured Notes Indenture.
1.117 "Interest" shall mean any equity interest in a Debtor.
1.118 "Interim Order" shall have the meaning set forth in the Amended Cash
Collateral Terms and Conditions.
1.119 "Key Employee Retention Escrow Cash" shall mean Cash held by the
Debtors in a segregated account pursuant to the Key Employee Retention Program,
which Cash shall be distributed in accordance with the terms thereof.
1.120 "Key Employee Retention Program" shall mean the Key Employee
Retention Program approved by the Bankruptcy Court by order dated June 29, 1998,
as modified by order of the Bankruptcy Court dated October 21, 1998.
1.121 "License Assignment Agreement" shall mean the License Assignment
Agreement dated as of February 16, 1999 among Nextel, the Debtors, HNS and WTC
as successor to IBJ Whitehall, a copy of which is annexed hereto as Exhibit "K."
1.122 "Lien" shall mean, individually or collectively, as the context
requires, any mortgage, lien, pledge, charge, security interest, encumbrance or
other security device of any kind affecting any asset of the Debtors or the
Reorganized Debtors.
1.123 "Majority Holders" shall have the meaning set forth in the Amended
Cash Collateral Terms and Conditions.
1.124 "Market Value" shall have the meaning set forth in Section
1.03(b)(ii)(A) of the Nextel Purchase Agreement.
1.125 "Merrill Lynch" shall mean, collectively, Merrill Lynch Global
Allocation Fund, Inc. and Merrill Lynch Equity/Convertible Series (Global
Allocation Portfolio).
1.126 "Merrill Lynch Fee Claim" shall mean, in accordance with and
pursuant to the Original Terms and Conditions and the Amended Cash Collateral
Terms and Conditions, the Claim of Merrill Lynch for reasonable costs, expenses
and charges (including, without limitation, the reasonable fees and charges of
its experts, consultants and legal counsel) incurred during the Post-Filing Date
Period in connection with the Chapter 11 Cases.
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1.127 "NB3 Escrow Proceeds" shall mean the "NB3 Escrow Proceeds" as that
term is defined in the Amended Cash Collateral Terms and Conditions together
with any income, profits or interest thereon.
1.128 "Net Available Cash" shall mean Cash in an amount equal to the
difference between (i) Available Cash, and (ii) the sum of (u) Allowed
Administrative Expense Claims, (v) Allowed Priority Tax Claims, (w) Allowed
Other Priority Claims, (x) Allowed Other Secured Claims to the extent such Claim
is to be paid in Cash pursuant to Section 3.7 of the Plan, (y) the Disputed
Claims Cash Reserve Amount, and (z) the Post-Confirmation Budget Amount as of
the Effective Date and with respect to the Post-Confirmation Budget Amount, such
amount as may be adjusted over time.
1.129 "Net Available Cash Deficiency Amount" shall mean the amount by
which (i) the sum of (u) Allowed Administrative Expense Claims, (v) Allowed
Priority Tax Claims, (w) Allowed Other Priority Claims, (x) Allowed Other
Secured Claims, (y) the Disputed Claims Cash Reserve Amount, and (z) the
Post-Confirmation Budget Amount, exceeds (ii) Available Cash as of the Effective
Date.
1.130 "Net Distributable Cash" shall mean Cash in an amount equal to the
difference between (i) Net Available Cash, and (ii) the sum of (x) the
aggregated amount of Net Available Cash to be paid to Holders of Allowed 15%
Note Claims pursuant to Sections 3.5(A)(2)(b)(i)(2), 3.5(A)(3) and/or 3.5(A)(4)
of the Plan, and (y) the aggregated amount of Net Available Cash to be paid to
HNS pursuant to Sections 3.6(A)(2)(b)(i)(2), 3.6(A)(3) and/or 3.6(A)(4) of the
Plan as of the Final Distribution Date.
1.131 "Net Nextel Escrow Cash" shall mean Cash in an amount equal to the
difference between the (i) Nextel Escrow Cash, and (ii) Nextel Escrow Claim.
1.132 "Net 15% Secured Notes Cash Collateral" shall mean the amount of 15%
Secured Notes Cash Collateral equal to the difference between (i) the amount of
15% Secured Notes Cash Collateral, and (ii) the 15% Secured Notes Contribution
Amount as of the Effective Date.
1.133 "New Board" shall mean the new Board of Directors for Reorganized
Geotek. The new Boards of Directors of the Continuing Subsidiaries shall consist
of the same members of the New Board.
1.134 "New By-Laws" shall mean Reorganized Geotek's amended and restated
by-laws, a copy of which is annexed hereto as Exhibit "L."
1.135 "New Charter" shall mean Reorganized Geotek's amended and restated
certificate of incorporation, a copy of which is annexed hereto as Exhibit "M."
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1.136 "Nextel" shall mean Nextel Communications, Inc., a Delaware
corporation, in its capacity as the "Buyer" under the Nextel Purchase Agreement
and the License Assignment Agreement.
1.137 "Nextel Effective Date" shall mean the "Effective Date" as said term
is defined in Section 1.03(b)(i) of the Nextel Purchase Agreement.
1.138 "Nextel Escrow Cash" shall mean Cash in an amount not to exceed $10
million (together with any income, profits or interest thereon) to be deposited
into the Escrow Account pursuant to Section 1.03(b)(ii)(A) of the Nextel
Purchase Agreement at the Phase II Closing.
1.139 "Nextel Escrow Claim" shall mean the claim(s) of Nextel against the
Debtors, HNS and/or WTC in an amount in excess of $100,000 in the aggregate
arising under Section 6.01 or any other provision of the Nextel Purchase
Agreement or any provision of the License Assignment Agreement as determined by
Final Order or as may be agreed upon by the applicable parties and approved by
Final Order.
1.140 "Nextel Purchase Agreement" shall mean the Asset Purchase Agreement
dated as of February 16, 1999, as amended, between Nextel and the Debtors, a
copy of which is annexed hereto as Exhibit "N."
1.141 "Nextel Purchase Agreement Amendment" shall mean the Amendment No. 1
to Asset Purchase Agreement dated as of March 19, 1999 between Nextel and the
Debtors, a copy of which is annexed hereto as Exhibit "N."
1.142 "Nextel Stock" shall mean shares of class A common stock of Nextel.
1.143 "Nextel Termination Event" shall mean the termination of the Nextel
Purchase Agreement prior to (i) the Phase I Closing, and (ii) the Phase II
Closing.
1.144 "No-Action Relief" shall mean the no-action relief described in
Section 3.02(c)(i) of the Nextel Purchase Agreement.
1.145 "Non-Continuing Subsidiaries" shall mean all Debtors that are direct
and indirect subsidiaries of Geotek that are not Continuing Subsidiaries.
1.146 "Non-Continuing Subsidiary Stock" shall mean, collectively, the
common stock of each of the Non-Continuing Subsidiaries, issued and outstanding
as of the Filing Date.
1.147 "Old Notes" shall mean, collectively, all secured and unsecured
notes issued under any agreement by one or more of the Debtors and outstanding
on the Filing Date, including the 15% Secured Notes, the Unsecured 12% Notes,
the notes issued to HNS under the HNS License Loan Agreement and the HNS Vendor
Credit Financing Agreement and the notes issued to S-C Rig under the S-C Rig
Loan Agreement.
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1.148 "Old Securities" shall mean, collectively, the Old Notes, the Common
Stock and the Preferred Stock.
1.149 "Original Terms and Conditions" shall have the meaning set forth in
the Amended Cash Collateral Terms and Conditions.
1.150 "Other Priority Claims" shall mean any Claim, other than an
Administrative Expense Claim or a Priority Tax Claim, entitled to priority in
right of payment under section 507(a) of the Bankruptcy Code.
1.151 "Other Secured Claims" shall mean any Secured Claim, including any
Secured Claim arising under any Capital Lease, which is not a 15% Notes Secured
Claim, an HNS License Facility Secured Claim, an HNS Vendor Credit Facility
Secured Claim, a DIP Lender Claim or a 15% Secured Notes Cash Collateral Claim.
1.152 "Person" shall have the meaning assigned such term in section
101(41) of the Bankruptcy Code.
1.153 "Phase I Cash" shall mean Cash in the amount equal to $19,161,000
(together with any income, profits or interest thereon) to be paid by Nextel in
connection with the purchase of the Phase I Licenses pursuant to the Nextel
Purchase Agreement.
1.154 "Phase I Closing" shall have the meaning set forth in Section 1.05
of the Nextel Purchase Agreement.
1.155 "Phase I Licenses" shall mean the FCC Licenses set forth on Schedule
1.01(a)(i) to the Nextel Purchase Agreement.
1.156 "Phase I Purchase Price" shall have the meaning set forth in Section
1.03(b)(i) of the Nextel Purchase Agreement.
1.157 "Phase II Cash" shall mean, in the event Nextel elects to pay the
Phase II Purchase Price in Cash, Cash in an amount equal to the Phase II
Remainder Amount.
1.158 "Phase II Closing" shall have the meaning set forth in Section 1.05
of the Nextel Purchase Agreement.
1.159 "Phase II Licenses" shall mean the FCC Licenses set forth on
Schedule 1.01(b)(i) to the Nextel Purchase Agreement.
1.160 "Phase II Purchase Price" shall have the meaning set forth in
Section 1.03(b)(ii) of the Nextel Purchase Agreement.
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1.161 "Phase II Remainder Amount" shall have the meaning set forth in
Section 2.01 of the Nextel Purchase Agreement Amendment.
1.162 "Phase II Termination Event" shall mean the termination of the
Nextel Purchase Agreement solely with respect to the sale of the Phase II
Licenses.
1.163 "Plan" shall mean the Debtors' First Amended Consolidated Plan of
Liquidation dated April 9, 1999, including, without limitation, all exhibits,
supplements, appendices and schedules hereto, either in its present form or as
it may be altered, amended or modified from time to time.
1.164 "Post-Confirmation Budget" shall mean the budget of Reorganized
Geotek for the post-Confirmation Date period, a copy of which is annexed hereto
as Exhibit "O," which budget shall include payments to be made in accordance
with the Supplemental Employee Retention Program.
1.165 "Post-Confirmation Budget Amount" shall mean Cash in an amount up to
$2.6 million, the purpose of which is to fund the Post-Confirmation Budget.
1.166 "Post-Confirmation Cash Collateral Terms and Conditions" shall mean
the Post-Confirmation Terms and Conditions Regarding Use of Cash Collateral
approved by the Bankruptcy Court pursuant to the Confirmation Order, a copy of
which is annexed hereto as Exhibit "P."
1.167 "Post-Filing Date Intercompany Claim" shall mean any Claim arising
after the Filing Date held by any Debtor or non-Debtor affiliate of a Debtor
against any other Debtor.
1.168 "Post-Filing Date Period" shall mean the period commencing on the
Filing Date and terminating on the Effective Date.
1.169 "Pre-Filing Date Intercompany Claim" shall mean any Claim arising on
or before the Filing Date held by any Debtor or non-Debtor affiliate of a Debtor
against any other Debtor.
1.170 "Preferred Stock" shall mean, collectively, all the Series H
Preferred Stock, the Series I Preferred Stock, the Series K Preferred Stock, the
Series L Preferred Stock, the Series M Preferred Stock, the Series N Preferred
Stock, the Series O Preferred Stock, the Series P Preferred Stock, the Series Q
Preferred Stock, and the Series T Preferred Stock issued and outstanding as of
the Filing Date.
1.171 "Preferred Stock Interests" shall mean the Interests of Holders of
Preferred Stock.
1.172 "Priority Tax Claim" shall mean any Claim of a governmental unit of
the kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
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1.173 "Pro Rata" shall mean (i) with regard to a Claim asserted in a
particular Class, a proportionate share, so that the ratio of the Distribution
on account of an Allowed Claim to the total amount of such Allowed Claim is the
same as the ratio of the amount of the Distribution on account of all Allowed
Claims in the Class of which the Allowed Claim is a member to the total amount
of all of the Allowed Claims in such Class, and (ii) with regard to Classes of
Claims, a ratio equal to the amount available for Distribution to each of such
Classes divided by the amount of Allowed Claims in each of such Classes,
respectively.
1.174 "Professional Person" shall mean any Person retained by the Debtors
or the Creditors' Committee pursuant to section 327, 328 or 1103 of the
Bankruptcy Code.
1.175 "Released 15% Secured Notes Cash Collateral Amount" shall mean the
15% Secured Notes Cash Collateral in an amount equal to the difference between
(i) the amount of the 15% Secured Notes Cash Collateral on the Effective Date,
and (ii) $5,584,079
1.176 "Released Avoidance Actions" shall mean all Avoidance Actions in
connection with any transfers or payments, including but not limited to the
granting of Liens, the pledging of common stock and the issuance of guarantees
by the Debtors in connection with the 15% Secured Notes Indenture, the HNS
License Loan Agreement, the HNS Vendor Credit Financing Agreement and the S-C
Rig Loan Agreement.
1.177 "Released Parties" shall mean, collectively, (i) the Debtors, their
officers, directors and employees as of the Filing Date, and their agents,
advisors and representatives, and (ii) a Consenting Holder, the Creditors'
Committee, HNS, S-C Rig, WTC, Merrill Lynch, the Unsecured 12% Notes Indenture
Trustee and each of their respective present and former officers, directors,
partners (general and limited), shareholders (record and beneficial), employees,
agents, advisors, attorneys, and representatives.
1.178 "Reorganized Geotek" shall mean Geotek on and after the Effective
Date, as reorganized pursuant to the Plan.
1.179 "S-C Rig" shall mean S-C Rig Investments III, L.P.
1.180 "S-C Rig Loan Agreement" shall mean that certain Senior Loan
Agreement dated April 4, 1996 between Geotek, as borrower, and S-C Rig, as
lender.
1.181 "S-C Rig Senior Loan Claims" shall mean the Claim of S-C Rig arising
out of the S-C Rig Loan Agreement, including any such Claims which are Secondary
Liability Claims.
1.182 "Schedules" shall mean, collectively, the schedules of assets and
liabilities, the lists of Holders of Interests and the statements of financial
affairs filed by each of the Debtors on September 4, 1998 under section 521 of
the Bankruptcy Code and Bankruptcy Rule 1007, and all amendments, supplements
and modifications thereto made in accordance with Bankruptcy Rule 1009.
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1.183 "Secondary Liability Claim" means a Claim that arises from a Debtor
being liable as a guarantor of, or otherwise jointly, severally or secondarily
liable for, any contractual or other obligation of another Debtor, including any
Claim based upon: (i) guaranties of payment, collection or performance; (ii)
indemnity bonds, obligations to indemnify, obligations to hold harmless or for
contribution; (iii) performance bonds; (iv) contingent liabilities arising out
of contractual obligations or out of undertakings (including any assignment or
other transfer) with respect to leases, operating agreements, management
contracts or other similar obligations made or given by a Debtor relating to the
performance of a Debtor; (v) vicarious liability; or (vi) any other joint or
several liability that any Debtor may have in respect of any obligation that is
the basis of a Claim.
1.184 "Secured Claim" shall mean any Claim that is secured by a Lien on,
in or against Collateral to the extent of the value of such Collateral, as
determined in accordance with section 506(a) of the Bankruptcy Code, or, in the
event such Claim is subject to setoff under section 553 of the Bankruptcy Code,
to the extent of such setoff right.
1.185 "Security and Pledge Agreement" shall mean the Security and Pledge
Agreement dated June 29, 1998, executed by Geotek and Geotek USA, as borrowers,
and certain other Debtors, as guarantors, pursuant to which S-C Rig was granted
a Lien on certain Collateral, to secure repayment of Geotek's and Geotek USA's
obligations to S-C Rig under the DIP Financing Agreement, as the same may be
amended, modified and supplemented and in effect from time to time.
1.186 "Senior Secured Note Collateral" shall mean the "Senior Secured Note
Collateral" as that term is defined in the Amended Cash Collateral Terms and
Conditions.
1.187 "Series H Preferred Stock" shall mean the Series H Cumulative
Convertible Preferred Stock issued by Geotek ranking prior to the Common Stock
and all other classes and series of Preferred Stock.
1.188 "Series H Preferred Stock Interests" shall mean all Interests of
Holders of Series H Preferred Stock.
1.189 "Series I and K Preferred Stock Interests" shall mean all Interests
of Holders of Series I Preferred Stock and Series K Preferred Stock.
1.190 "Series I Preferred Stock" shall mean the Series I Cumulative
Convertible Preferred Stock issued by Geotek ranking (i) prior to the Common
Stock, (ii) junior to the Series H Preferred Stock, (iii) pari passu with the
Series K Preferred Stock, and (iv) prior to all other classes and series of
Preferred Stock.
1.191 "Series K Preferred Stock" shall mean the Series K Cumulative
Convertible Preferred Stock issued by Geotek ranking (i) prior to the Common
Stock, (ii) junior to the Series H Preferred Stock, (iii) pari passu with the
Series I Preferred Stock, and (iv) prior to all other classes and series of
Preferred Stock.
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1.192 "Series L Preferred Stock" shall mean the Series L Cumulative
Convertible Preferred Stock issued by Geotek ranking (i) prior to the Common
Stock, (ii) junior to the Series H Preferred Stock, the Series I Preferred Stock
and the Series K Preferred Stock, and (iii) prior to all other classes and
series of Preferred Stock.
1.193 "Series L Preferred Stock Interests" shall mean all Interests of
Holders of Series L Preferred Stock.
1.194 "Series M Preferred Stock" shall mean the Series M Cumulative
Convertible Preferred Stock issued by Geotek ranking (i) prior to the Common
Stock, (ii) junior to the Series H Preferred Stock, the Series I Preferred
Stock, the Series K Preferred Stock and the Series L Preferred Stock, and (iii)
prior to all other classes and series of Preferred Stock.
1.195 "Series M Preferred Stock Interests" shall mean all Interests of
Holders of Series M Preferred Stock.
1.196 "Series N Preferred Stock" shall mean the Series N Cumulative
Convertible Preferred Stock issued by Geotek ranking (i) prior to the Common
Stock, (ii) junior to the Series H Preferred Stock, the Series I Preferred
Stock, the Series K Preferred Stock, the Series L Preferred Stock and the Series
M Preferred Stock, and (iii) prior to all other classes and series of Preferred
Stock.
1.197 "Series N Preferred Stock Interests" shall mean all Interests of
Holders of Series N Preferred Stock.
1.198 "Series O, P, Q and T Preferred Stock Interests" shall mean all
Interests of Holders of Series O Preferred Stock, Series P Preferred Stock,
Series Q Preferred Stock and Series T Preferred Stock.
1.199 "Series O Preferred Stock" shall mean the Series O Convertible
Preferred Stock issued by Geotek ranking (i) prior to the Common Stock, (ii)
junior to the Series H Preferred Stock, Series I Preferred Stock, Series K
Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, and Series
N Preferred Stock and (iii) pari passu with the Series P Preferred Stock, Series
Q Preferred Stock, and Series T Preferred Stock.
1.200 "Series P Preferred Stock" shall mean the Series P Convertible
Preferred Stock issued by Geotek ranking (i) prior to the Common Stock, (ii)
junior to the Series H Preferred Stock, Series I Preferred Stock, Series K
Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, and Series
N Preferred Stock, and (iii) pari passu with the Series O Preferred Stock,
Series Q Preferred Stock, and Series T Preferred Stock.
1.201 "Series Q Preferred Stock" shall mean the Series Q Convertible
Preferred Stock issued by Geotek ranking (i) prior to the Common Stock, (ii)
junior to the Series H Preferred Stock, Series I Preferred Stock, Series K
Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, and Series
N Preferred Stock, and (iii) pari passu with the Series O Preferred Stock,
Series P Preferred Stock, and Series T Preferred Stock.
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1.202 "Series T Preferred Stock" shall mean the Series T Convertible
Preferred Stock issued by Geotek ranking (i) prior to the Common Stock, (ii)
junior to the Series H Preferred Stock, Series I Preferred Stock, Series K
Preferred Stock, Series L Preferred Stock, Series M Preferred Stock, and Series
N Preferred Stock, and (iii) pari passu with the Series O Preferred Stock,
Series P Preferred Stock, and Series Q Preferred Stock.
1.203 "Subsequently Allowed Claim" shall mean any Claim for which an
Allowed amount is established and fixed after the Effective Date.
1.204 "Subsidiaries" shall mean, collectively, the Continuing Subsidiaries
and the Non-Continuing Subsidiaries.
1.205 "Substantial Contribution Claim" shall mean a Claim or expense (i)
Allowed by Final Order pursuant to section 503(b)(3), (4) or (5) of the
Bankruptcy Code entitled to priority in payment under section 507(a)(1) of the
Bankruptcy Code, or (ii) in an amount agreed to by the Debtors and the Holder of
such Claim and approved by Final Order.
1.206 "Substantive Consolidation Order" shall mean the order of the
Bankruptcy Court substantively consolidating the Debtors' Chapter 11 Cases.
1.207 "Supplemental Employee Retention Program" shall mean the
Supplemental Employee Retention Program approved by the Bankruptcy Court by
order dated November 13, 1998.
1.208 "Unsecured 12% Notes" shall mean the 12% Senior Subordinated
Convertible Notes issued pursuant to the Unsecured 12% Note Indenture.
1.209 "Unsecured 12% Notes Claims" shall mean the Claim of the Holders of
the Unsecured 12% Notes arising out of the Unsecured 12% Notes Indenture,
including such Claim, if any, that is a Secondary Liability Claim.
1.210 "Unsecured 12% Notes Indenture" shall mean that certain Indenture
dated as of March 5, 1996, between Geotek and The Bank of New York, as trustee.
1.211 "Unsecured 12% Notes Indenture Trustee" shall mean The Bank of New
York, as trustee under the Unsecured 12% Notes Indenture.
1.212 "Unsecured 12% Notes Indenture Trustee Fee Claim" shall mean the
Claim of the Unsecured 12% Notes Indenture Trustee for reasonable costs,
expenses and charges (including, without limitation, the reasonable fees and
charges of its legal counsel) during the Post-Filing Date Period in connection
with the Chapter 11 Cases incurred in its capacity as the Unsecured 12% Notes
Indenture Trustee.
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1.213 "Unsecured Pro Rata Share" shall mean with regard to a Claim
asserted in Class 7, Class 8 or Class 9, a proportionate share, so that the
ratio of the Distribution on account of an Allowed Claim to the total amount of
such Allowed Claim is the same ratio as the amount of the Distribution on
account of all Allowed Claims in Classes 7, 8 and 9 to the total amount of all
of the Allowed Claims in Classes 7, 8 and 9.
1.214 "WTC" shall mean Wilmington Trust Company, a Delaware banking
company, in its capacity as the 15% Secured Notes Indenture Trustee.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
Claims against, and Interests in, the Debtors are classified for all
purposes, including voting, confirmation and distribution, pursuant to the Plan
as described below. A Claim or Interest will be deemed classified in a
particular Class only to the extent that such Claim or Interest qualifies within
the description of that Class and will be deemed classified in a different Class
to the extent that any remainder of such Claim or Interest qualifies within the
description of such different Class.
2.1 Class 1-Administrative Expense Claims.
Class 1 consists of all Administrative Expense Claims.
2.2 Class 2-Priority Tax Claims.
Class 2 consists of all Priority Tax Claims.
2.3 Class 3-Other Priority Claims.
Class 3 consists of all Other Priority Claims.
2.4 Class 4-15% Notes Claims.
Class 4 consists of all 15% Notes Claims.
2.5 Class 5-HNS Claims.
Class 5 consists of the HNS Claims.
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2.6 Class 6-Other Secured Claims.
Class 6 consists of all Other Secured Claims.
2.7 Class 7-S-C Rig Senior Loan Claims.
Class 7 consists of all S-C Rig Senior Loan Claims.
2.8 Class 8-General Unsecured Claims.
Class 8 consists of all General Unsecured Claims.
2.9 Class 9-Unsecured 12% Notes Claims.
Class 9 consists of all Unsecured 12% Notes Claims.
2.10 Class 10-Series H Preferred Stock Interests.
Class 10 consists of the Series H Preferred Stock Interests.
2.11 Class 11-Series I and K Preferred Stock Interests.
Class 11 consists of the Series I and K Preferred Stock Interests.
2.12 Class 12-Series L Preferred Stock Interests.
Class 12 consists of the Series L Preferred Stock Interests.
2.13 Class 13-Series M Preferred Stock Interests.
Class 13 consists of the Series M Preferred Stock Interests.
2.14 Class 14-Series N Preferred Stock Interests.
Class 14 consists of the Series N Preferred Stock Interests.
2.15 Class 15-Series O, P, Q, and T Preferred Stock Interests.
Class 15 consists of the Series O, P, Q and T Preferred Stock Interests.
2.16 Class 16-Common Stock Interests.
Class 16 consists of all Interests of the Holders of Common Stock.
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2.17 Class 17-Continuing Subsidiary Stock Interests.
Class 17 consists of all Interests of the Holders of Continuing Subsidiary
Stock.
2.18 Class 18-Non-Continuing Subsidiary Stock Interests.
Class 18 consists of all Interests of the Holders of Non-Continuing
Subsidiary Stock.
ARTICLE III
TREATMENT OF ALLOWED CLAIMS AND ALLOWED INTERESTS
3.1 Satisfaction of Claims and Interests.
The treatment of and consideration to be received by a Holder of an
Allowed Claim or Allowed Interest pursuant to this Article III shall be in full
satisfaction, settlement, release and discharge of (i) such Holder's respective
Claim against or Interest in each and all of the Debtors, and (ii) any other
claims, obligations, rights, Causes of Action and liabilities which such Holder
may thereafter be entitled to assert against any Debtor, whether known or
unknown, foreseen or unforeseen, then existing or thereafter arising, based in
whole or in part upon any act, omission or other occurrence taking place on or
prior to the Effective Date, except as otherwise provided in the Plan or the
Confirmation Order.
3.2 Class 1: Administrative Expense Claims.
Class 1 Claims are not impaired. Each Holder of an Allowed Administrative
Expense Claim shall receive in full satisfaction, settlement, release and
discharge thereof, (i) Cash in an amount equal to such Allowed Administrative
Expense Claim, without interest, on or as soon as practicable after the
Distribution Date, or (ii) such amount, at such other date and upon such other
terms as shall have been agreed upon between the Holder of such Allowed
Administrative Expense Claim and the Debtors and, if required, approved by Final
Order.
3.3 Class 2: Priority Tax Claims.
Class 2 Claims are not impaired. Each Holder of an Allowed Priority Tax
Claim shall receive in full satisfaction, settlement, release and discharge
thereof, (i) Cash in an amount equal to such Allowed Priority Tax Claim, without
interest, on or as soon as practicable after the Distribution Date, or (ii) such
amount, at such other date and upon such other terms as shall have been agreed
upon between the Holder of such Allowed Priority Tax Claim and the Debtors and,
if required, approved by Final Order.
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3.4 Class 3: Other Priority Claims.
Class 3 Claims are not impaired. Each Holder of an Allowed Other Priority
Claim shall receive, in full satisfaction, settlement, release and discharge
thereof, (i) Cash in an amount equal to such Allowed Other Priority Claim,
without interest, on or as soon as practicable after the Distribution Date, or
(ii) such amount, at such other date and upon such other terms as shall have
been agreed upon between the Holder of such Allowed Other Priority Claim and the
Debtors and approved, if required, by Final Order.
3.5 Class 4: 15% Notes Claims.
Class 4 Claims are impaired.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, and subject to the provisions of Sections 3.5(A)(3), 3.5(A)(4), 4.1
and 4.4 of the Plan, each Holder of an Allowed 15% Notes Claim shall receive, in
full satisfaction, settlement, release and discharge thereof:
1. (a) its Pro Rata share of (i)(x) shares of Nextel Stock having an
aggregate Market Value equal to, or (y) Cash in an amount equal to,
$103,625,171, together with 78.5% of the difference between (1) $10
million, and (2) the Nextel Escrow Cash; (ii) the 15% Secured Notes Phase
I Cash; (iii) 15% Secured Notes Cash Collateral in an amount equal to
$5,584,079; and (iv) the Cumulous Net Proceeds, on or as soon as
practicable after the Distribution Date, or (b) such amount, at such other
date and upon such other terms as shall have been agreed upon between the
Holder of such Allowed 15% Notes Claim and the Debtors and, if required,
approved by Final Order; and
2. (a) if Nextel shall have failed to assert a Nextel Escrow Claim
on or before the Escrowed Property Distribution Date, its Pro Rata share
of 78.5% of the Nextel Escrow Cash, on or as soon as practicable after the
Escrowed Property Distribution Date; (b) if on or before the Escrowed
Property Distribution Date, a Nextel Escrow Claim is asserted against (i)
the Debtors, its Pro Rata share of (x) 78.5% of the Net Nextel Escrow
Cash, and (y) Net Available Cash in an amount up to 78.5% of the Nextel
Escrow Claim; (ii) HNS, such Holder's Pro Rata share of (x) 78.5% of the
Net Nextel Escrow Cash, and (y) Cash in an amount equal to 78.5% of the
Nextel Escrow Claim, which Cash amount HNS shall pay to WTC for and on
behalf of the Holders of 15% Notes Claims; or (iii) WTC, 78.5% of the Net
Nextel Escrow Cash, on or as soon as practicable after the Escrowed
Property Distribution Date; or (c) such amount, at such other date and
upon such other terms as shall have been agreed upon between the Holder of
such Allowed 15% Notes Claim and the Debtors and, if required, approved by
Final Order.
3. In the event that one or more 15% Secured Notes Phase I
License(s) cannot be assigned to Nextel due to the fact that the Debtors
do not have good and marketable title to such 15% Secured Notes Phase I
License(s), then each Holder of an Allowed 15% Notes Claim shall receive
its Pro Rata share of Net Available Cash in an amount up to that portion
of the Phase I
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Purchase Price allocated to such 15% Secured Notes Phase I License(s) in
the Nextel Purchase Agreement.
4. In the event that prior to the Phase II Closing, the Phase II
Purchase Price is reduced due to the fact that one or more 15% Secured
Notes Phase II License(s) cannot be assigned to Nextel as a result of the
fact that the Debtors do not have good and marketable title to such 15%
Secured Notes Phase II License(s), then each Holder of an Allowed 15%
Notes Claim shall receive its Pro Rata share of Net Available Cash in an
amount up to the amount by which the Phase II Purchase Price has been
reduced.
B. In the event that (i) a Phase I Closing shall have occurred and (ii) a
Phase II Termination Event shall have occurred, and subject to the provisions of
Sections 3.5(B)(3) and 4.1 of the Plan, then:
1. Each Holder of an Allowed 15% Notes Claim shall receive, in full
satisfaction, settlement, release and discharge thereof, (a) its Pro Rata
share of (i) the 15% Secured Notes Phase I Cash; (ii) the 15% Secured
Notes Net Cash Collateral; and (iii) the Net Available Cash on or as soon
as practicable after the Distribution Date, or (b) such amount, at such
other date and upon such other terms as shall have been agreed upon
between the Holder of such Allowed 15% Notes Claim and the Debtors and, if
required, approved by Final Order; and
2. In accordance with the provisions of Section 1.02(a) of the
License Assignment Agreement, and subject to (a) the consent and approval
of the FCC to the transfer and assignment of the 15% Secured Notes Phase
II Licenses to WTC (or its nominee or designee), and (b) to the extent
applicable, the expiration or termination of all waiting periods under the
HSR Act and the rules and regulations promulgated thereunder, the Debtors
shall assign and transfer to WTC (or its nominee or designee) for and on
behalf of the Holders of the 15% Notes Claims, all of the Debtors' rights,
title and interest in the 15% Secured Notes Phase II Licenses, on or as
soon as practicable after the Distribution Date.
3. In the event that one or more 15% Secured Notes Phase I
License(s) cannot be assigned to Nextel due to the fact that the Debtors
do not have good and marketable title to such 15% Secured Notes Phase I
License(s), then each Holder of an Allowed 15% Notes Claim shall receive
its Pro Rata share of Net Available Cash in an amount up to that portion
of the Phase I Purchase Price allocated to such 15% Secured Notes Phase I
License(s) in the Nextel Purchase Agreement.
C. In the event that a Nextel Termination Event shall have occurred, then,
upon payment of the 15% Secured Notes Contribution Amount, and subject to the
provisions of Section 4.1 of the Plan:
1. Each Holder of an Allowed 15% Note Claim shall receive, in full
satisfaction, settlement, release and discharge thereof (together with the
Cash Distribution to be made to WTC pursuant to Section 3.2 of the Plan on
account of the 15% Secured Notes Cash Collateral Claim), (a) its Pro Rata
share of (i) the Net 15% Secured Notes Cash Collateral, (ii) the NB3
Escrow
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Proceeds, and (iii) 66.7% of Net Available Cash, on or as soon as
practicable after the Distribution Date, or (b) such amount, at such other
date and upon such other terms as shall have been agreed upon between the
Holder of such Allowed 15% Notes Claim and the Debtors and, if required,
approved by Final Order; and
2. In accordance with the provisions of Section 1.02(a) of the
License Assignment Agreement, and subject to (a) the consent and approval
of the FCC to the transfer and assignment of the 15% Secured Notes Phase I
Licenses and the 15% Secured Notes Phase II Licenses to WTC (or its
nominee or designee), and (b) to the extent applicable, the expiration and
termination of all waiting periods under the HSR Act and the rules and
regulations promulgated thereunder, the Debtors shall assign and transfer
to WTC (or its nominee or designee) for and on behalf of the Holders of
the 15% Notes Claims, all of the Debtors' rights, title and interest in
the 15% Secured Notes Phase I Licenses and the 15% Secured Notes Phase II
Licenses, on or as soon as practicable after the Distribution Date.
3.6 Class 5: HNS Claims.
Class 5 Claims are impaired.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, and subject to the provisions of Sections 3.6(A)(3), 3.6(A)(4), 4.1
and 4.4 of the Plan, HNS shall receive, in full satisfaction, settlement,
release and discharge thereof:
1. (a)(i)(x) shares of Nextel Stock having an aggregate Market Value
equal to, or (y) Cash in an amount equal to, $17,213,829, together with
21.5% of the difference between (1) $10 million, and (2) the Nextel Escrow
Cash, (ii) the HNS Phase I Cash, and (iii) Cash in an amount equal to
$1,915,921, on or as soon as practicable after the Distribution Date, or
(b) such amount, at such other date and upon such other terms as shall
have been agreed upon between HNS and the Debtors and, if required,
approved by Final Order; and
2. (a) if Nextel shall have failed to assert a Nextel Escrow Claim
on or before the Escrowed Property Distribution Date, 21.5% of the Nextel
Escrow Cash, on or as soon as practicable after the Escrowed Property
Distribution Date; (b) if on or before the Escrowed Property Distribution
Date, a Nextel Escrow Claim is asserted against (i) the Debtors, (1) 21.5%
of the Net Nextel Escrow Cash, and (2) Net Available Cash in an amount up
to 21.5% of the Nextel Escrow Claim; (ii) HNS, 21.5% of the Net Nextel
Escrow Cash; or (iii) WTC, (1) 21.5% of the Net Nextel Escrow Cash, and
(2) Cash in an amount equal to 21.5% of the Nextel Escrow Claim, which
Cash Amount WTC shall pay to HNS, on or as soon as practicable after the
Escrowed Property Distribution Date; or (c) such amount, at such other
date and upon such other terms as shall have been agreed upon between HNS
and the Debtors and, if required, approved by a Final Order of the
Bankruptcy Court.
3. In the event that one or more HNS Phase I License(s) cannot be
assigned to Nextel due to the fact that the Debtors do not have good and
marketable title to such HNS Phase I
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License(s), then HNS shall receive Net Available Cash in an amount up to
that portion of the Phase I Purchase Price allocated to such HNS Phase I
License(s) in the Nextel Purchase Agreement.
4. In the event that prior to the Phase II Closing, the Phase II
Purchase Price is reduced due to the fact that one or more HNS Phase II
License(s) cannot be assigned to Nextel as a result of the fact that the
Debtors do not have good and marketable title to such HNS Phase II
License(s), then HNS shall receive Net Available Cash in an amount up to
the amount by which the Phase II Purchase Price has been reduced.
B. In the event that (i) a Phase I Closing shall have occurred and (ii) a
Phase II Termination Event shall have occurred, and subject to the provisions of
Sections 3.6(B)(3) and 4.1 of the Plan then:
1. HNS shall receive, in full satisfaction, settlement, release and
discharge thereof, (a) the HNS Phase I Cash Payment, or (b) such amount,
at such other date and upon such other terms as shall have been agreed
upon between HNS and the Debtors and, if required, approved by Final
Order; and
2. In accordance with the provisions of Section 1.02 of the License
Assignment Agreement, and subject to (a) the consent and approval of the
FCC to the transfer and assignment of the HNS Phase II Licenses to HNS,
and (b) to the extent applicable, the expiration or termination of all
waiting periods under the HSR Act and the rules and regulations
promulgated thereunder, the Debtors shall assign and transfer to HNS all
of the Debtors' rights, title and interest in the HNS Phase II Licenses,
on or as soon as practicable after the Distribution Date.
3. In the event that one or more HNS Phase I License(s) cannot be
assigned to Nextel due to the fact that the Debtors do not have good and
marketable title to such HNS Phase I License(s), then HNS shall receive
Net Available Cash in an amount up to that portion of the Phase I Purchase
Price allocated to such HNS Phase I License(s) in the Nextel Purchase
Agreement.
C. In the event that a Nextel Termination Event shall have occurred, then
upon payment of the HNS Contribution Amount to the Debtors, and subject to the
provisions of Section 4.1 of the Plan:
1. HNS shall receive in full satisfaction, settlement, release and
discharge thereof, 33.3% of Net Available Cash, and
2. In accordance with the provisions of Section 1.02(a) of the
License Assignment Agreement, and subject to (a) the consent and approval
of the FCC to the transfer and assignment of the HNS Phase I Licenses and
the HNS Phase II Licenses to HNS, and (b) to the extent applicable, the
expiration or termination of all waiting periods under the HSR Act and the
rules and regulations promulgated thereunder, the Debtors shall assign and
transfer to HNS all of the Debtors' rights, title and interest in the HNS
Phase I Licenses and the HNS Phase II Licenses, on or as soon as
practicable after the Distribution Date.
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3.7 Class 6: Other Secured Claims.
Class 6 Claims are impaired. Each Holder of an Allowed Other Secured
Claim, in full satisfaction, settlement, release and discharge thereof, will
receive, in the sole discretion of the Debtors, (i) Cash in an amount equal to
such Allowed Other Secured Claim, on or as soon as practicable after the
Distribution Date, (ii) the property securing such Allowed Other Secured Claim,
or (iii) such amount, at such other date and upon such other terms as shall have
been agreed upon between the Holder of such Allowed Other Secured Claim and the
Debtors and, if required, approved by a Final Order of the Bankruptcy Court.
3.8 Class 7: S-C Rig Senior Loan Claims.
Class 7 Claims are impaired.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, the Holder of the Allowed S-C Rig Senior Loan Claim shall receive, in
full satisfaction, settlement, release and discharge thereof, (i)(a) if Class 9
shall have accepted the Plan and the Unsecured 12% Notes Indenture Trustee shall
not have objected to Confirmation of the Plan, (x) such Holder's Unsecured Pro
Rata Share of the Net Distributable Cash, plus (y) the Class 7 Subordination
Payment, or (b) if Class 9 shall have rejected the Plan or the Unsecured 12%
Notes Indenture Trustee shall have objected to Confirmation of the Plan, (x)
such Holder's Unsecured Pro Rata Share of the Net Distributable Cash, plus (y)
the Class 9 Distribution Amount, on or as soon as practicable after the Final
Distribution Date, or (ii) such amount, at such other date and upon such other
terms as shall have been agreed upon between the Holder of such Allowed S-C Rig
Senior Loan Claim and, if required, the Debtors and approved by Final Order.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of the Allowed S-C Rig Senior
Loan Claim shall not receive nor retain any property under the Plan in respect
of such Claim.
3.9 Class 8: General Unsecured Claims.
Class 8 Claims are impaired.
A. In the event that a Phase I Closing and a Phase II Closing shall have
occurred, each Holder of an Allowed General Unsecured Claim shall receive, in
full satisfaction, settlement, release and discharge thereof, (i) its Unsecured
Pro Rata Share of the Net Distributable Cash, on or as soon as practicable after
the Final Distribution Date, or (ii) such amount, at such other date and upon
such other terms as shall have been agreed upon between the Holder of such
Allowed General Unsecured Claim and the Debtors and, if required, approved by
Final Order.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of an Allowed General
Unsecured Claim shall not receive or retain any property under the Plan in
respect of such Claim.
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3.10 Class 9: Unsecured 12% Notes Claims.
Class 9 Claims are impaired.
A. In the event that a Phase I Closing and a Phase II Closing shall
have occurred:
1. If the Holders of Class 9 Claims shall have accepted the Plan and
the Unsecured 12% Notes Indenture Trustee shall not have objected to
Confirmation of the Plan, and subject to the provisions of section 7.08 of
the Unsecured 12% Notes Indenture and Section 4.1 of the Plan, each Holder
of an Allowed Unsecured 12% Notes Claim shall receive, in full
satisfaction, settlement, release and discharge thereof, (i) its Pro Rata
share of the Class 9 Settlement Amount, on or as soon as practicable after
the Final Distribution Date, or (ii) such amount, at such other date and
upon such other terms as shall have been agreed upon between the Holder of
such Allowed Unsecured 12% Notes Claim and the Debtors and, if required,
approved by a Final Order.
2. In the event the Holders of Class 9 Claims shall have rejected
the Plan or the Unsecured 12% Notes Indenture Trustee shall have objected
to Confirmation of the Plan, each Holder of an Allowed Unsecured 12% Notes
Claim will not receive or retain any property under the Plan and the
Holder of the S-C Rig Senior Loan Claims shall receive the Class 9
Distribution Amount in full satisfaction, settlement, release and
discharge of any and all subordination rights which such Holder may
otherwise have with respect to the Distributions to be made to Holders of
Unsecured 12% Notes Claims.
B. In the event that either a Phase II Termination Event or a Nextel
Termination Event shall have occurred, the Holder of an Allowed Unsecured 12%
Notes Claim shall not receive or retain any property under the Plan in respect
of such Claim.
3.11 Class 10: Series H Preferred Stock Interests.
Class 10 Interests are impaired. Holders of Class 10 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
3.12 Class 11: Series I and K Preferred Stock Interests.
Class 11 Interests are impaired. Holders of Class 11 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
3.13 Class 12: Series L Preferred Stock Interests.
Class 12 Interests are impaired. Holders of Class 12 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
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3.14 Class 13: Series M Preferred Stock Interests.
Class 13 Interests are impaired. Holders of Class 13 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
3.15 Class 14: Series N Preferred Stock Interests.
Class 14 Interests are impaired. Holders of Class 14 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
3.16 Class 15: Series O, P, Q, and T Preferred Stock Interests.
Class 15 Interests are impaired. Holders of Class 15 Interests shall not
receive or retain any property under the Plan in respect of such Interest.
3.17 Class 16: Common Stock Interests.
Class 16 Interests are impaired. The Holders of Common Stock Interests
shall not receive or retain any property under the Plan in respect of such
Interest.
3.18 Class 17: Continuing Subsidiary Stock Interests.
Class 17 Interests are impaired. Each Holder of a Continuing Subsidiary
Stock Interest shall neither retain its particular equity interests in the
Continuing Subsidiaries, nor receive any Distribution for or on account of its
Interest.
3.19 Class 18: Non-Continuing Subsidiary Stock Interests.
Class 18 Interests are impaired. Each Holder of a Non-Continuing
Subsidiary Stock Interest shall neither retain its particular equity interests
in its particular Non-Continuing Subsidiary nor receive any Distribution for or
on account of its Interest.
ARTICLE IV
MEANS FOR IMPLEMENTATION OF THE PLAN
4.1 Cancellation and Surrender of Instruments.
A. As of the close of business on the Effective Date, the transfer ledgers
or registers and any other records determining record ownership maintained by
Geotek (or the 15% Secured Notes Indenture Trustee, Unsecured 12% Notes
Indenture Trustee or any other trustees, transfer agents or registrars which may
have been employed in connection therewith) for any Old Securities will be
deemed to be closed, and for purposes of the Plan, there shall be no further
changes in the record Holders of any Old Securities on the books of Geotek (or
the 15% Secured Notes Indenture Trustee,
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Unsecured 12% Notes Indenture Trustee or any other trustees, transfer agents or
registrars which may have been employed in connection therewith). Reorganized
Geotek will have no obligation to recognize any transfer of Old Securities
occurring thereafter, but will be entitled instead to recognize and deal with,
for all purposes under the Plan, including for purposes of making Distributions
under the Plan, except as otherwise provided herein, only those Persons who were
Holders of such Old Securities as of the close of business on the Effective
Date, as reflected on the books of Geotek (or the 15% Secured Notes Indenture
Trustee, Unsecured 12% Notes Indenture Trustee, or any other transfer agents or
registrars which may have been employed in connection therewith), as the case
may be.
B. No Holder of any Old Notes will be entitled to any right of
Distribution under the Plan unless and until such Holder will have first
surrendered or caused to be surrendered the relevant instrument, if any, held by
such Holder to the Distribution Agent, the 15% Secured Notes Indenture Trustee
or the Unsecured 12% Notes Indenture Trustee, as the case may be. To the extent
any such Holder is not the Holder of record of such relevant instrument, such
Holder must deliver to the Distribution Agent, the 15% Secured Notes Indenture
Trustee or the Unsecured 12% Note Indenture Trustee, as the case may be,
together with the relevant instrument, documents satisfactory to Reorganized
Geotek evidencing succession of title from the record Holder thereof. In the
event that any Old Notes instrument has been lost, destroyed, stolen or
mutilated, the Holder thereof may instead execute and deliver an affidavit of
loss and indemnity with respect thereto in a form customarily utilized for such
purposes that is reasonably satisfactory to Reorganized Geotek, together with,
if Reorganized Geotek so requests, a bond in form and substance (including,
without limitation, amount) reasonably satisfactory to Reorganized Geotek.
C. As soon as practicable after the surrender of the relevant instruments
or the delivery of such affidavit of loss and indemnity (and, if requested, the
furnishing of a bond) as provided in Section 4.1.B of the Plan, the 15% Secured
Notes Indenture Trustee, the Unsecured 12% Notes Indenture Trustee, or
Reorganized Geotek, as the case may be, will cancel such instruments, as and to
the extent it deems appropriate, and the 15% Secured Notes Indenture Trustee and
the Unsecured 12% Notes Indenture Trustee will deliver such cancelled
instruments to Reorganized Geotek or otherwise dispose of such instruments in
such manner as Reorganized Geotek may require.
D. Until (i) a Holder of record on the Effective Date or its successor by
operation of law surrenders the relevant instruments, if any, evidencing its
ownership of Old Notes pursuant to Section 4.1.B hereof, and (ii) the shares of
Nextel Stock and/or Cash to be issued in satisfaction thereof are issued and
delivered by or on behalf of Reorganized Geotek to such Holder, the 15% Secured
Notes Indenture Trustee or the Unsecured 12% Notes Indenture Trustee, as the
case may be, for the account of such Holder, such Holder shall have no rights
with respect to the shares of Nextel Stock and/or Cash to be received by such
Holder under the Plan.
E. To the extent reasonably requested by Reorganized Geotek and to the
extent not inconsistent with the Plan, no Holder of a Claim in Class 4 or Class
5 will receive the Distribution provided for in Sections 3.5 or 3.6,
respectively, of the Plan until the 15% Secured Notes Indenture Trustee with
respect to Class 4 Claims or the Holder of the Class 5 Claim executes, delivers
and files (where applicable) or causes to be executed, delivered and filed any
documents (in recordable form
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if appropriate) and/or surrenders or causes to be surrendered to Reorganized
Geotek any personal property or other Collateral in its possession or the
possession of the 15% Secured Notes Indenture Trustee necessary to release any
Lien(s) and retransfer all Collateral held by any Person in connection with the
relevant underlying loan documents.
F. As of the Effective Date, the Old Notes and all agreements, instruments
and other documents incident thereto and executed therewith, will be deemed
terminated, cancelled and extinguished, null and void and of no further force
and effect as to the Debtors or Reorganized Geotek.
G. As of the Effective Date, all Common Stock and Preferred Stock, and any
options, warrants, conversion rights, subscription rights and the like,
including, without limitation, Common Stock Options and Conversion Rights, will
be deemed terminated, canceled and extinguished, null and void and of no further
force and effect as to the Debtors or Reorganized Geotek.
4.2 Adoption of New Charter and New By-Laws.
On the Effective Date, the New Charter and New By-Laws shall become
operative as the certificate of incorporation and the by-laws, respectively, of
Reorganized Geotek. Except to the extent prohibited by the terms and provisions
of any then-existing agreement, applicable law or the Plan, after the Effective
Date, Geotek may amend the New Charter and the New By-Laws in accordance with
the terms thereof and applicable state law.
4.3 Disputed Claims.
Any Distributions to the Holder of a Disputed Claim will be made if, when
and only to the extent such Disputed Claim becomes a Subsequently Allowed Claim,
subject to Section 4.7 of the Plan.
4.4 Fractional Shares of Nextel Stock.
Fractional shares of Nextel Stock shall not be issued or distributed.
Instead, each time a Distribution is to be made to any Class of Allowed Claims,
the aggregate of all of the fractional interests in Nextel Stock to which the
Holders of Allowed Claims in such Class would otherwise be entitled shall be
placed in a separate pool (hereinafter the "Fractional Shares Pool"). All
Holders of Allowed Claims in such Class that would otherwise be entitled to a
fractional share of Nextel Stock shall be placed on a list (hereinafter a
"Distribution List") in descending order according to the size of the fractional
interest in each share of Nextel Stock, to which each such Holder is entitled.
In the event two or more Holders of Allowed Claims are entitled to the same
fractional interest (rounded to six decimal places) in a share of Nextel Stock,
their relative ranking on any Distribution List shall be determined by lot.
Based upon each Distribution List for Nextel Stock for each such Class, a whole
share of Nextel Stock shall be distributed to Holders entitled to the largest
fractions of each share of Nextel Stock until all of the whole shares or whole
units of Nextel Stock in the Fractional Shares Pool for each fractional share of
Nextel Stock in each such Class shall have been distributed.
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4.5 Distributions to Holders of Allowed Claims.
A. Except as otherwise provided in Article III of the Plan, the
Distribution Agent will deliver or cause to be delivered, on behalf of the
applicable Debtors, at the time specified in Article III, subject to compliance,
if required, with the provisions of Section 4.1 of the Plan:
1. To each Holder of an Allowed Administrative Expense Claim,
Allowed Priority Tax Claim, Allowed Other Priority Claim and Allowed Other
Secured Claim in Classes 1, 2, 3 and 6, respectively, Cash, in accordance
with Sections 3.2, 3.3, 3.4 and 3.7, respectively, of the Plan;
2. To the 15% Secured Notes Indenture Trustee for and on behalf of
the Holders of Allowed 15% Secured Notes Claims in Class 4, Cash, shares
of Nextel Stock, 15% Secured Notes Phase I Licenses, and/or 15% Secured
Notes Phase II Licenses, as the case may be, in accordance with Section
3.5 of the Plan.
3. To HNS, as the Holder of the HNS License Facility Claims and the
HNS Vendor Credit Facility Claims in Class 5, Cash, shares of Nextel
Stock, HNS Phase I Licenses, and/or HNS Phase II Licenses, as the case may
be, in accordance with Section 3.6, respectively, of the Plan.
4. To S-C Rig, in its capacity as the Holder of the S-C Rig
Unsecured Loan Claims in Class 7, Cash in accordance with Section 3.8 of
the Plan.
5. To each Holder of an Allowed General Unsecured Claim in Class 8,
Cash, in accordance with Section 3.9 of the Plan.
6. To the Unsecured 12% Notes Indenture Trustee for and on behalf of
the Holders of Unsecured 12% Notes, Cash, in accordance with Section 3.10
of the Plan.
B. Distributions of Cash required by the Plan will be made, at Reorganized
Geotek's option, by wire transfer or check drawn on a United States Bank mailed
by first class mail.
4.6 Disputed Claims Reserve.
On the Effective Date, except as otherwise provided in this Section 4.6,
Reorganized Geotek shall maintain Cash and/or shares of Nextel Stock (the
"Disputed Claims Reserve") equal to 100 percent of the Cash and/or shares of
Nextel Stock (or such lesser amount as authorized by Final Order, including
pursuant to an estimation made pursuant to section 502(c) of the Bankruptcy
Code, which estimation shall conclusively establish the amount of Distribution
for such Claim) of (a) the amount of Cash and/or shares of Nextel Stock that the
Holders of Disputed Claims would be entitled to receive under the Plan if such
Disputed Claims were Allowed in the full amount asserted by the Holders thereof,
and (b) an appropriate estimate for Administrative Expense Claims, Priority Tax
Claims, Other Priority Claims, and Other Secured Claims that may not have been
Allowed as of the Effective Date.
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4.7 Distributions to Holders of Subsequently Allowed Claims.
A. Unless another date is agreed upon by the Debtors and the Holder of a
Subsequently Allowed Claim and approved by Final Order, the Distribution Agent,
on behalf of the Debtors, will, on the tenth Business Day following the day the
Allowed amount thereof is fixed by Final Order, distribute to the 15% Secured
Notes Indenture Trustee with respect to Class 4 Claims or such Holder with
respect to Class 1, 2, 3, and 6 Claims, in accordance with Section 3.2, 3.3,
3.4, 3.5 or 3.7 of the Plan, as the case may be, Cash, without interest, the
property, if any, securing such Holder's Class 6 Claim, or, subject to the
provisions of Section 4.4 of the Plan, shares of Nextel Stock equal to the
amount of Cash or number of shares of Nextel Stock which would have been
distributed to such Holder through such date had such Holder's Subsequently
Allowed Claim been an Allowed Claim on the Effective Date.
B. Any Holder of a Subsequently Allowed Claim will not be entitled to any
interest on the Allowed amount of such Claim, regardless of when Distribution
thereon is made to or received by such Holder.
C. As each Disputed Claim becomes a Subsequently Allowed Claim or is
disallowed by Final Order, the property, if any, reserved for, but not
distributed to, the Holder of such Subsequently Allowed Claim (including
interest, if any, earned thereon net of income or similar taxes borne by
Reorganized Geotek) as a consequence of the Allowed amount of such Claim having
been fixed at less than the amount stated in such Claim, shall constitute
Available Cash.
4.8 Timing of Distributions.
Any payment or Distribution required to be made under the Plan on a day
other than a Business Day will be made on the next succeeding Business Day.
4.9 Resolution of Disputed Claims.
Unless another date is provided in the Confirmation Order, all objections
to Claims shall be filed not later than ninety (90) days after the Effective
Date, subject to the right of Reorganized Geotek to seek to extend such period
from time to time.
4.10 Setoff.
Except as provided in the Plan, the Debtors and Reorganized Geotek may,
but shall not be required to, set off against any Claim and the Distributions to
be made pursuant to the Plan in respect of such Claim, any valid claims of any
nature whatsoever that the Debtors may have against the Holder of such Claim,
but neither the Debtors' nor Reorganized Geotek's failure to do so, or the
allowance of any Claim hereunder, shall constitute a waiver or release by the
Debtors or Reorganized Geotek of any such Claim against such Holder.
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4.11 Unclaimed Property
A. Subject to Section 4.11.C of the Plan, in accordance with sections 347
and 1143 of the Bankruptcy Code, any Holder of Old Notes that fails to comply
with Section 4.1.B hereof within six (6) months from and after the Effective
Date will be deemed to have forfeited all rights and Claims with respect thereto
and shall not participate in any Distribution on account thereof under the Plan.
Any Cash, including interest thereon, or shares of Nextel Stock constituting
unclaimed property pursuant to this Section 4.11.A shall be distributed Pro Rata
to Holders of Allowed Class 4 or Class 9 Claims, as the case may be.
B. If a Holder of an Allowed Claim entitled to receive Cash fails to
negotiate a check issued to such Holder pursuant to the provisions of Article
III hereof within six (6) months of the date such check was issued, then the
amount of Cash attributable to such check shall be distributed Pro Rata to
Holders of Allowed Claims in the applicable Class, and the payee of such check
will be deemed to have waived its Claim and will not participate in any further
Distributions under the Plan in respect thereof.
C. If a Distribution to any Holder of an Allowed Claim made pursuant to
Article III of the Plan is returned to the 15% Secured Notes Indenture Trustee,
the Unsecured 12% Notes Indenture Trustee or Reorganized Geotek, as the case may
be, due to an incorrect or incomplete address for the Holder of such Allowed
Claim, then such 15% Secured Notes Indenture Trustee or Unsecured 12% Notes
Indenture Trustee, as the case may be, shall promptly so notify Reorganized
Geotek, and Reorganized Geotek will publish a notice once in The Wall Street
Journal or The New York Times (national edition), not later than thirty (30)
days after the date on which such Distribution is returned to Reorganized
Geotek, listing the name of such Holder and the Distributions due such Holder
and stating that unless such Holder contacts Reorganized Geotek within thirty
(30) days following the date such notice appears in such newspaper, and provides
Reorganized Geotek with an accurate address, such Distribution shall be deemed
unclaimed property in respect of such Holder's Allowed Claim, and such Holder
shall be deemed to have no further entitlement in respect of such Distribution
and shall not participate in any further Distributions under the Plan in respect
thereof. If the aggregate amount of Distributions returned to the 15% Secured
Notes Indenture Trustee, the Unsecured 12% Notes Indenture Trustee or
Reorganized Geotek, as the case may be, pursuant to this Section 4.11.C is less
than $100,000, then Reorganized Geotek shall have no obligation to publish the
notice required herein, and any such Distributions shall constitute unclaimed
property. Any Cash, including interest thereon, or shares of Nextel Stock
constituting unclaimed property pursuant to this Section 4.11.C shall be
distributed Pro Rata to Holders of Allowed Claims in the applicable Class.
4.12 Direction to Parties.
From and after the Effective Date, any Holder of an Allowed Claim or
Interest and Reorganized Geotek may apply to the Bankruptcy Court for an order
directing Reorganized Geotek or any necessary party, as the case may be, to
execute or deliver or to join in the execution or delivery of any instrument
required to effect a transfer of property dealt with by the Plan, and to
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perform any other act, including the satisfaction of any Lien, that is necessary
for the consummation of the Plan, pursuant to section 1142(b) of the Bankruptcy
Code.
4.13 Waiver of Contractual Subordination Rights.
Upon receipt of the Distributions provided for it under the Plan on
account of its Claims, as of the Effective Date each Holder of an Allowed Claim
shall be deemed to have waived any and all contractual rights which may
subordinate Claims to the payment and distributions or consideration made or to
be made in respect of such Allowed Claim and such Holder shall be permanently
enjoined from enforcing or attempting to enforce any such subordination rights
except as expressly provided in the Plan.
4.14 Preservation of Debtors' Causes of Action.
Except as otherwise provided in the Plan, including, but not limited to
Section 11.3 of the Plan, or the Confirmation Order, or in any contract,
instrument, release, indenture or other agreement entered into in connection
with the Plan, Reorganized Geotek will retain and may enforce all Causes of
Action, including the Avoidance Actions.
4.15 Liquidation and Dissolution of the Debtors.
A. On the Effective Date, the Liquidating Subsidiaries will be deemed to
have been liquidated. Thereafter, such Liquidating Subsidiaries shall be
dissolved under applicable state law and the stock issued by each of the
Liquidating Subsidiaries will be deemed terminated, cancelled and of no force
and effect as of the Effective Date.
B. On the date that a Continuing Subsidiary or Reorganized Geotek has
fully performed its respective obligations pursuant to the Plan, such Continuing
Subsidiary or Reorganized Geotek shall be dissolved under applicable state law
and as of the Effective Date the stock issued by such Continuing Subsidiary
shall be deemed terminated, cancelled and of no force and effect. As of the
Effective Date the Common Stock and Preferred Stock issued by Geotek shall be
deemed terminated, cancelled and of no force and effect.
4.16 Means of Implementation, Release of Liens, Rights and Interests With
Respect to Cash Collateral
A. In the event that a Phase II Termination Event shall have occurred,
Cash required to make the Distributions provided for in Sections 3.2, 3.3, 3.4
and 3.7 of the Plan and to fund the Post-Confirmation Budget for the period from
the Effective Date to the date Reorganized Geotek shall be dissolved, shall be
provided to Reorganized Geotek by WTC in an amount equal to the 15% Secured
Notes Cash Collateral Contribution Amount and by HNS in an amount equal to the
HNS Phase I Cash Contribution Amount. The 15% Secured Notes Cash Collateral
Contribution Amount shall be paid to the Debtors from either the 15% Secured
Notes Phase I Cash or by the release of 15% Secured Notes Cash Collateral on the
Effective Date. The HNS Phase I Cash Contribution
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Amount shall be paid to the Debtors from either the HNS Phase I Cash or from a
Cash payment from HNS on the Effective Date.
B. In the event that a Nextel Termination Event shall have occurred, Cash
required to make the Distributions provided for in Sections 3.2, 3.3, 3.4 and
3.7 of the Plan and to fund the Post-Confirmation Budget for the period from the
Effective Date to the date Reorganized Geotek shall be dissolved, shall be
provided to Reorganized Geotek by WTC in an amount equal to the 15% Secured
Notes Contribution Amount and by HNS in an amount equal to the HNS Contribution
Amount. The 15% Secured Notes Contribution Amount shall be paid to the Debtors
by the release of 15% Secured Notes Cash Collateral on the Effective Date. The
HNS Contribution Amount shall be paid to the Debtors from a Cash payment from
HNS on the Effective Date.
C. In the event a Phase I Closing and a Phase II Closing shall have
occurred, then as at the Effective Date:
1. Upon receipt of the consideration to be distributed on the
Effective Date to WTC on behalf of the Holders of Allowed 15% Notes
pursuant to Sections 3.5 and 4.5.A.2 of the Plan, WTC shall be deemed to
have waived and released (i) any right or interest in the NB3 Escrow
Proceeds, (ii) any right or interest in the Released 15% Secured Notes
Cash Collateral Amount, (iii) the right to payment in respect of the 15%
Secured Notes Cash Collateral Claim, and (iv) the right to payment in
respect of the 15% Secured Notes Deficiency Claims.
2. Upon receipt of the consideration to be distributed on the
Effective Date to HNS pursuant to Sections 3.6 and 4.5.A.3 of the Plan,
HNS shall be deemed to have waived and released the right to payment in
respect of the (i) HNS Deficiency Claims, and (ii) HNS Unsecured Claims.
D. In the event a Phase I Closing and/or a Phase II Closing shall have
occurred, then, upon receipt of the consideration to be distributed on the
Effective Date to HNS pursuant to Sections 3.6 and 4.5.A.3 of the Plan, HNS
shall be deemed to have waived and released the right to payment in respect of
the HNS Fee Claim.
E. In connection with a Phase I Closing and/or a Phase II Closing, and
pursuant to the provisions of Sections 1.02(a) and 1.04(b) of the License
Assignment Agreement the Debtors shall assign and transfer:
1. To WTC for and on behalf of the Holders of 15% Notes Claims, all
of the Debtors' rights, title and interest in the 15% Secured Notes Phase
I Licenses and/or the 15% Secured Notes Phase II Licenses, and
2. To HNS, all of the Debtors' rights, title and interest in the HNS
Phase I Licenses and/or the Phase II Licenses.
F. In connection with a Phase I Closing and/or a Phase II Closing, and
pursuant to the provisions of Sections 1.02(a) and 1.04(b) of the License
Assignment Agreement, (i) WTC shall
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assign and transfer to Nextel, all of WTC's rights, title and interest in the
15% Secured Notes Phase I Licenses, and/or the 15% Secured Notes Phase II
Licenses, and (ii) HNS shall assign and transfer to Nextel, all of HNS' rights,
title and interest in the HNS Phase I Licenses and/or HNS Phase II Licenses.
G. On the Effective Date, [ ] and [ ] shall execute the D&O Escrow
Agreement and the escrow established thereunder shall be funded with the D&O
Escrow Cash.
H. The Confirmation Order shall provide that, in accordance with the
Post-Confirmation Cash Collateral Terms and Conditions, the Debtors shall be
authorized to use 15% Secured Notes Cash Collateral pursuant to the
Post-Confirmation Budget for the period commencing on the Confirmation Date and
terminating on the Effective Date. In the event a Phase I Closing and a Phase II
Closing shall have occurred, the Debtors shall fund the Post-Confirmation Budget
for the period commencing on the Effective Date and continuing to the date
Reorganized Geotek is dissolved, from Available Cash.
I. Reorganized Geotek shall use commercially reasonable efforts to
liquidate to Cash the Disposition Assets.
J. The Majority Holders and HNS shall be deemed to have supported the plan
of reorganization described in paragraph 22 of the Cash Collateral Extension
Order. In accordance with Section 10.6 of the Amended Cash Collateral Terms and
Conditions, Merrill Lynch, IBJ Whitehall, and WTC shall each, upon submission to
the Debtors of reasonably detailed invoices, be reimbursed for all reasonable
costs, expenses, and charges (including, without limitation, the reasonable fees
and charges of their experts, consultants, and legal counsel) incurred in
connection with the Chapter 11 Cases to the extent not previously reimbursed.
4.17 Bar Date for Fee Applications.
Unless another date is set by Final Order entered on or before the bar
date set forth in this Section 4.17, all Fee Applications shall be filed within
thirty (30) days after the Confirmation Date. All such Fee Claims and
Substantial Contribution Claims for which applications are not timely filed
shall be forever barred. At least thirty (30) days prior to the Confirmation
Hearing, each Professional Person asserting a Fee Claim and each Person
asserting a Substantial Contribution Claim shall file with the Bankruptcy Court
and serve upon counsel for the Debtors an estimate of the maximum amount of
compensation and reimbursement of expenses to be requested in the Chapter 11
Cases, for the period from the Filing Date through the Confirmation Date.
Objections to such Fee Applications may be filed on or before sixty (60) days
after the Confirmation Date. The Bankruptcy Court shall retain jurisdiction to
determine all such Fee Claims and Substantial Contribution Claims.
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ARTICLE V
PROVISIONS REGARDING CORPORATE GOVERNANCE
AND MANAGEMENT OF REORGANIZED GEOTEK
5.1 General.
On the Effective Date, the New Board shall have the responsibility for the
management, control and operation of the Continuing Subsidiaries.
5.2 Corporate Governance and Officers of the Reorganized Debtors.
A. The corporate governance of Reorganized Geotek will be carried out in
accordance with the New Charter, the New By-Laws and the corporate laws of the
State of Delaware.
B. Except as may otherwise be set forth in this Plan or the Confirmation
Order, the officers of each of Geotek and the Continuing Subsidiaries
immediately prior to the Confirmation Date and identified in the Disclosure
Statement will retain their positions immediately after the Effective Date,
until such time as their termination of employment or as otherwise agreed to.
5.3 Amended By-Laws and Amended Certificates of Incorporation.
The certificates of incorporation and by-laws of each of Geotek and the
Continuing Subsidiaries will be amended and restated as of the Effective Date to
the extent necessary to prohibit the issuance of nonvoting equity securities as
required by section 1123(a)(6) of the Bankruptcy Code.
ARTICLE VI
SUBSTANTIVE CONSOLIDATION
6.1 Substantive Consolidation.
A. The Plan contemplates and is predicated upon the entry of the
Substantive Consolidation Order.
B. Pursuant to the Substantive Consolidation Order, on the Effective Date:
(i) all assets and liabilities of the Debtors will be treated as though they
were merged; (ii) any obligation of any of the Debtors and all guaranties
thereof or related thereto executed by one or more of the Debtors will be deemed
to be one obligation of the consolidated Debtors; (iii) any Claims filed or to
be filed in connection with any such obligation and such guaranties will be
deemed one Claim against the consolidated Debtors; (iv) each and every Claim
filed in the individual Chapter 11 Case of any of the Debtors will be deemed
filed against the consolidated Debtors; and (v) for purposes of determining a
setoff Claim, the Debtors will be treated as one entity so that, subject to the
other
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provisions of section 553 of the Bankruptcy Code, debts due to any of the
Debtors may be set off against the debts of any of the Debtors.
C. The substantive consolidation of the Debtors shall not (other than for
purposes related to the Plan) affect the (i) legal and corporate structure of
the Debtors; (ii) Pre-Filing Date Intercompany Claims and the Post-Filing Date
Intercompany Claims by and among the Debtors; and (iii) Continuing Subsidiary
Stock Interests.
ARTICLE VII
CRAMDOWN
7.1 In the event any Class of Claims or Interests rejects, or is deemed by
law to have rejected, the Plan, if all of the other applicable requirements for
confirmation of the Plan are met, as set forth in sections 1129(a)(1) through
(13) of the Bankruptcy Code, the Debtors will request that the Bankruptcy Court
confirm the Plan pursuant to section 1129(b) of the Bankruptcy Code.
ARTICLE VIII
EXECUTORY CONTRACTS
8.1 Rejection of Executory Contracts.
Except as provided in Section 8.2 of the Plan, all Executory Contracts,
other than Executory Contracts which have been rejected pursuant to an order of
the Bankruptcy Court entered prior to the Confirmation Date, including all
employment, severance benefits, retirement and supplemental retirement benefit
contracts, plans or policies that have not been rejected, canceled or terminated
on or prior to the Confirmation Date, will be deemed rejected as of the
Effective Date; provided, however, that the Reorganized Debtors reserve the
right to reject after the Effective Date any Executory Contract which on the
Confirmation Date or such later date as may be set forth in the Confirmation
Order, was subject to a pending motion to reject such Executory Contract.
Without limiting the foregoing, to the extent they are Executory Contracts, all
Common Stock Options and Conversion Rights will be deemed rejected under section
1123(b)(2) of the Bankruptcy Code as of the Effective Date and the Holders of
such Options and Rights will receive no Distributions under the Plan on account
thereof.
8.2 Assumption and Assignment of Site Leases.
A. In the event a Nextel Termination Event shall have occurred, the
Debtors shall, at the option of WTC (or its nominee or designee) or HNS, as the
case may be, and subject to the provisions of Section 8.4 of the Plan, assume
and assign (i) the 15% Secured Notes Phase I Site Leases and the 15% Secured
Notes Phase II Site Leases to WTC for and on behalf of the Holders of the 15%
Notes Claims, and (ii) the HNS Phase I Site Leases and the HNS Phase II Site
Leases to HNS.
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B. In the event a Phase II Termination Event shall have occurred, the
Debtors shall, at the option of WTC or HNS, as the case may be, and subject to
the provisions of Section 8.4 of the Plan, assume and assign (i) the 15% Secured
Notes Phase II Site Leases to WTC for and on behalf of the Holders of the 15%
Notes Claims, and (ii) the HNS Phase II Site Leases to HNS.
8.3 Approval of Assumption or Rejection of Executory Contracts.
Occurrence of the Effective Date will constitute (i) the approval,
pursuant to sections 365(a) and 1123(b)(2) of the Bankruptcy Code, of the
assumption and assignment of the Executory Contracts assumed pursuant to Section
8.2 hereof; and (ii) the approval, pursuant to sections 365(a) and 1123(b)(2) of
the Bankruptcy Code, of the rejection of the Executory Contracts rejected
pursuant to Section 8.1 hereof.
8.4 Curing of Defaults.
As to any Executory Contracts assumed pursuant to Section 8.2 hereof, WTC
or HNS, as the case may be, pursuant to the provisions of section 1123(a)(5)(G)
of the Bankruptcy Code, shall, on behalf of the Debtors, cure or demonstrate the
ability to cure all defaults (except those specified in section 365(b)(2) of the
Bankruptcy Code) existing under and pursuant to such Executory Contracts by
paying or demonstrating the ability to pay the amount, if any, of such Cure
Claim. Payment of any such Cure Claim will be in full satisfaction, settlement,
release, discharge and cure of all such defaults (including any other Claims
filed by any such party as a result of such existing defaults). The dollar
amount of any monetary default of the Debtors existing under any such Executory
Contract as of the Confirmation Date, as may be agreed to by the parties thereto
or as may be fixed by Final Order, shall constitute an Allowed Class 1 Claim.
8.5 Claims for Rejection Damages.
A. Each Person who is a party to an Executory Contract rejected by the
Debtors under the Plan, will be entitled to file, not later than thirty (30)
days after the issuance of an order of the Bankruptcy Court authorizing such
rejection, or such other time period stated in an order, a proof of Claim for
damages alleged to have arisen from the rejection of the Executory Contract or
be forever barred from asserting such Claim.
B. Objections to any such proof of Claim for the rejection of an Executory
Contract shall be filed not later than sixty (60) days after such proof of Claim
is filed and the Holder of such proof of Claim notifies the Debtors, in writing,
of such filing, or such later date as the Bankruptcy Court may permit, and the
Bankruptcy Court shall determine any such objection.
C. Claims arising from the rejection of Executory Contracts shall
constitute Class 8 Claims entitled to treatment pursuant to Section 3.9 of the
Plan.
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ARTICLE IX
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order or the occurrence of
the Effective Date, the Bankruptcy Court shall retain jurisdiction of the
Chapter 11 Cases for the following purposes:
A. To enforce the terms of the Plan and the Confirmation Order, including,
without limitation, the injunctive provisions thereof;
B. To hear and determine any and all applications for the rejection,
assumption or assignment of any Executory Contract, any objection to any Claim
resulting therefrom, and the allowance, reduction, expungement or compromise of
any Claim resulting therefrom, pursuant to the terms and conditions of the Plan;
C. To hear and determine any motion, application, adversary proceeding,
contested matter and other litigated matter pending on the Effective Date or
commenced or such later date as the Bankruptcy Court may permit;
D. To ensure that the Distributions to Holders of Allowed Claims and
Interests are accomplished as provided herein;
E. To hear and determine any objection to any Claim filed, whether before
or after the Confirmation Date; and to allow or disallow, in whole or in part,
any Disputed Claim;
F. To enter, implement or enforce such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, reversed, revoked,
modified or vacated;
G. To hear and determine the allowance of any and all Administrative
Expense Claims, including, without limitation, any Fee Claim or Substantial
Contribution Claim and any objections thereto;
H. To hear and determine any application, if any, to (i) modify the Plan
in accordance with section 1127 of the Bankruptcy Code, and (ii) after the
Confirmation Date, so long as it does not adversely affect the interest of
Holders, institute proceedings in the Bankruptcy Court to remedy any defect or
omission or reconcile any inconsistency in the Plan or Confirmation Order, in
such manner as may be necessary to carry out the purposes and effects thereof;
I. To hear and determine any disputes arising in connection with the Plan,
its interpretation or implementation, including disputes among Holders and
arising under agreements, documents or instruments executed in connection with
the Plan;
J. To hear and determine any disputes arising in connection with the
Nextel Purchase Agreement and the License Assignment Agreement, their
interpretation or implementation, including disputes among the parties thereto;
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K. To construe, take any action and issue such orders, prior to and
following the Confirmation Date, as may be necessary for the enforcement,
implementation, execution and consummation of the Plan or for the maintenance of
the integrity of the Plan following consummation; and to hear and determine any
other issue presented by or arising under the Plan including, without
limitation, the injunctive provisions thereof;
L. To hear and determine any motions or contested matters involving taxes,
tax refunds, tax attributes and tax benefits and similar or related matters,
with respect to the Debtors or their estates arising prior to the Effective Date
or relating to the period of administration of the Chapter 11 Cases, including
under section 505 of the Bankruptcy Code;
M. To hear and determine such other matters as may arise under, be
provided for in, or be implicated by, the Plan or the Confirmation Order;
N. To enter a final decree closing the Chapter 11 Cases; and
O. To hear and determine any other matters related hereto and not
inconsistent with chapter 11 of the Bankruptcy Code.
ARTICLE X
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS
10.1 Conditions Precedent to Confirmation.
Confirmation of the Plan shall not occur unless and until each of the
following conditions has been satisfied or has waived in accordance with the
terms of the Plan:
A. The Bankruptcy Court shall have entered the Substantive Consolidation
Order;
B. The Bankruptcy Court shall have determined that the sum of (i) Allowed
Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Other
Priority Claims and Allowed Other Secured Claims as of the Confirmation Hearing,
(ii) the estimated Allowed amount of Disputed Administrative Expense Claims,
Disputed Priority Tax Claims, Disputed Other Priority Claims and Disputed Other
Secured Claims as of the Confirmation Hearing, and (iii) the Post-Confirmation
Budget Amount, shall not exceed (x) in the event a Nextel Termination Event
shall have occurred, $15 million, exclusive of interest accruing on the 15%
Secured Notes Cash Collateral Claim and the DIP Lender Claims, or (y) in the
event a Phase I Closing and/or a Phase II Closing shall have occurred, $8
million, exclusive of interest accruing on the DIP Lender Claims; and
C. The Bankruptcy Court shall have entered the Confirmation Order.
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10.2 Conditions Precedent to the Effective Date
The Effective Date of the Plan shall not occur unless and until each of
the following conditions has been satisfied or waived in accordance with the
terms of the Plan:
A. Either, a (i) Nextel Termination Event, (ii) Phase I Closing and a
Phase II Termination Event, or (iii) Phase I Closing and a Phase II Closing
shall have occurred;
B. The FCC shall have approved the transfer and assignment by the Debtors
of the HNS Phase I Licenses and the HNS Phase II Licenses to HNS;
C. The FCC shall have approved the transfer and assignment by the Debtors
of the 15% Secured Notes Phase I Licenses and the 15% Secured Notes Phase II
Licenses to WTC (or its nominee or designee) for and on behalf of the Holders of
15% Notes Claims;
D. The Substantive Consolidation Order shall have become a Final Order;
and
E. The Confirmation Order shall have become a Final Order.
10.3 Waiver of Condition to Confirmation of the Plan and Effective Date.
Any condition to Confirmation of the Plan or the Effective Date contained
in this Article X may be waived, in whole or in part, by the Debtors, with the
unanimous consent of (i) S-C Rig, (ii) the Creditors' Committee, (iii) HNS, and
(iv) WTC or the Majority Holders.
10.4 Effect of Failure of Conditions.
In the event that one or more of the conditions specified in Section 10.2
of the Plan have not been satisfied or waived as provided in Section 10.3 on or
before 365 days after the Nextel Effective Date, or such later date as may be
fixed by Final Order entered after notice and a hearing, upon notification
submitted by the Debtors to the Bankruptcy Court and counsel for the Creditors
Committee, S-C Rig, HNS, Merrill Lynch and WTC, (i) the Confirmation Order shall
be vacated, (ii) no Distributions under the Plan shall be made, (iii) the
Debtors and all Holders of Claims and Interests shall be restored to the status
quo ante as of the day immediately preceding the Confirmation Date as though
Confirmation had never occurred, and (iv) the Debtors' obligations with respect
to Claims or Interests shall remain unchanged and nothing contained herein shall
constitute or be deemed a waiver or release of any Claims or Interests or rights
and defenses related thereto by or against the Debtors or any other Person or to
prejudice in any manner the rights of the Debtors or any Person in any further
proceedings involving the Debtors.
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ARTICLE XI
TITLE TO PROPERTY; INJUNCTION
11.1 Vesting of Property.
Except as otherwise provided in the Plan or the Confirmation Order, on the
Effective Date, (i) all assets of Geotek and the Non-Continuing Subsidiaries'
estates will vest in and be retained by Reorganized Geotek, and (ii) all assets
of the Continuing Subsidiaries' estates will vest in and be retained by the
respective Continuing Subsidiaries, subject to the provisions of the Plan and
the Confirmation Order. As of the Effective Date, all assets retained by
Reorganized Geotek and the Continuing Subsidiaries pursuant hereto shall be
retained free and clear of all Liens, Claims and Interests of all Holders,
except as otherwise provided in the Plan and the Confirmation Order.
11.2 Iunction.
Except as otherwise expressly provided in the Plan, the Confirmation Order
or a separate order of the Bankruptcy Court, on the Effective Date, all Persons
who have held, hold or may hold Claims or any other liabilities against the
Debtors arising on or before the Effective Date, or who have held, hold or may
hold Interests acquired on or before the Effective Date, shall be enjoined from
taking any of the following actions with respect to such Claims, liabilities or
Interests (other than actions brought to enforce any rights or obligations under
the Plan): (i) commencing, conducting or continuing in any manner, directly or
indirectly, any suit, action or other proceeding of any kind against the
Debtors, or the assets of the Debtors or any direct or indirect successor in
interest to any of the Debtors, or any assets of any such transferee or
successor; (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 Debtors or the assets of the Debtors or any
direct or indirect successor in interest to any of the Debtors or any assets of
any such transferee or successor; (iii) creating, perfecting or otherwise
enforcing in any manner, directly or indirectly, any encumbrance of any kind
against the Debtors or the assets of the Debtors or any direct or indirect
successor in interest to any of the Debtors or any assets of any such transferee
or successor; (iv) asserting any set off, right of subrogation or recoupment of
any kind, directly or indirectly, against any obligation due the Debtors or the
assets of the Debtors or any direct or indirect transferee of any assets of, or
successor in interest to, any of the Debtors and (v) proceeding in any manner in
any place whatsoever that does not conform to or comply with the provisions of
the Plan. Such injunction shall extend to successors of the Debtors and their
respective properties and interests in property.
11.3 Releases.
As of the Effective Date, each of the Released Parties shall be deemed
to have mutually released, to the extent permitted by the Bankruptcy Court each
of the (a) Debtors, their officers, directors and employees as of the Filing
Date, agents, advisors and representatives, (b) Merrill Lynch, (c) WTC, (d) HNS,
(e) S-C Rig, (f) the Unsecured 12% Notes Indenture Trustee, (g) the Creditors'
Committee, and (h) each Consenting Holder and, with respect to the Persons
listed in
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clauses (b) through (h), the respective present and former directors, officers,
partners (general and limited), shareholders (record and beneficial), employees,
agents, advisors, and representatives of all of the foregoing, of and from any
and all Claims, obligations, rights, Causes of Action, the Released Avoidance
Actions and liabilities (other than the right to enforce the obligations of any
party under the Plan) which such Person may be entitled to assert, whether known
or unknown, foreseen or unforeseen, then existing or thereafter arising, based
in whole or in part upon any act, omission or other occurrence taking place from
the beginning of time to and including the Effective Date in any way relating to
the Debtors, the Chapter 11 Cases, including, but not limited to, the 85/15
Proposal, or the Plan.
11.4 Term of Bankruptcy Injunctions or Stays.
All injunctions or stays provided for in the Chapter 11 Cases under
section 105 or section 362 of the Bankruptcy Code, or otherwise, and in
existence on the Confirmation Date, shall remain in full force and effect until
the Effective Date.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Revocation.
The Debtors reserve the right to revoke and withdraw the Plan prior to the
Confirmation Date. If the Debtors revoke or withdraw the Plan, then the Plan
shall be null and void and, in such event, nothing contained herein shall be
deemed to constitute a waiver or release of any Claims by or against the Debtors
or any other Person or to prejudice in any manner the rights of any of the
Debtors or any Person in any further proceedings involving the Debtors,
including any rights in respect of the proposed substantive consolidation of the
Debtors.
12.2 Amendments.
The Plan may be amended, modified or supplemented by the Debtors or
Reorganized Geotek before or after the Confirmation Date, in the manner provided
for by section 1127 of the Bankruptcy Code or as otherwise permitted by law.
12.3 No Interest.
Except as expressly provided in the Plan, or allowed by Final Order, no
interest, penalty or late charge shall be allowed on any Claim subsequent to the
Filing Date.
12.4 No Attorneys' Fees.
No attorneys' fees will be paid by any Debtor with respect to any Claim or
Interest except as specified herein, in the Confirmation Order or as Allowed by
Final Order.
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12.5 Exculpation.
Neither the Debtors, Reorganized Geotek, nor any of the other Released
Parties shall have or incur any liability to any Holder of a Claim or Interest
for any act or omission in connection with, related to, or arising out of, the
Chapter 11 Cases, the pursuit of confirmation of the Plan, the consummation of
the Plan or the administration of the Plan or the property to be distributed
under the Plan, except for gross negligence, willful misconduct or fraud, and in
all respects, they shall be entitled to rely upon the advice of counsel with
respect to their duties and responsibilities under the Plan and shall be fully
protected in acting or in refraining from action in accordance with such advice.
12.6 Termination of Creditors' Committee.
The existence of the Creditors' Committee shall terminate on the
Confirmation Date except solely with respect to (i) all Fee Applications, (ii)
any post-Confirmation modifications to the Plan or the Confirmation Order, (iii)
the waiver of a condition to Confirmation of the Plan and/or the Effective Date
pursuant to Section 10.3 of the Plan, and (iv) any matters pending as of the
Confirmation Date before the Bankruptcy Court to which the Creditors' Committee
is a party, until such matters are resolved by Final Order.
12.7 Post-Effective Date Fees and Expenses.
From and after the Effective Date, Reorganized Geotek shall, in the
ordinary course of business and without the necessity for any approval by the
Bankruptcy Court, pay, in accordance with the Post-Confirmation Budget, the
reasonable fees and expenses of professional persons thereafter incurred by the
Debtors and Reorganized Geotek, including, without limitation, those fees and
expenses incurred in connection with the implementation and consummation of the
Plan.
12.8 Time.
In computing any period of time prescribed or allowed by the Plan, the day
of the act, event, or default from which the designated period of time begins to
run shall not be included. The last day of the period so computed shall be
included, unless it is not a Business Day or, when the act to be done is the
filing of a paper in court, a day on which weather or other conditions have made
the clerk's office inaccessible, in which event the period runs until the end of
the next day which is not one of the aforementioned days.
12.9 Governing Law.
Except to the extent the Bankruptcy Code, Bankruptcy Rules or other
federal law is applicable, or to the extent an Exhibit to the Plan provides
otherwise, the rights and obligations arising under the Plan shall be governed
by, and construed and enforced in accordance with, the laws of the State of New
York, without giving effect to the principles of conflicts of law thereof.
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12.10 Headings.
The headings of the Articles, Paragraphs, and Sections of the Plan are
inserted for convenience only and shall not affect the interpretation hereof.
12.11 Severability.
Subsequent to the Confirmation Date, should any provision in the Plan be
determined to be invalid, void or unenforceable, such determination shall in no
way limit or affect the enforceability and operative effect of any other
provision of the Plan.
12.12 Notices.
All notices, requests or demands in connection with the Plan shall be in
writing and shall be mailed by registered or certified mail, return receipt
requested, to:
If to the Debtors:
Geotek Communications, Inc.
102 Chestnut Ridge Road
Montvale, New Jersey 07645
Attn: Chief Financial Officer
Telephone: (201) 930-5430
Facsimile: (201) 573-8204
with a copy to:
Kaye, Scholer, Fierman, Hays
& Handler, LLP
425 Park Avenue
New York, NY 10022
Attn: Andrew A. Kress, Esq.
Telephone: (212) 836-8000
Facsimile: (212) 836-7151
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If to HNS:
Hughes Network Systems
10450 Pacific Center Court
San Diego, California 92121
Attn: James Gandolfi
cc: Site Counsel
Telephone: (619) 452-4616
Facsimile: (619) 457-4994
with a copy to:
Latham & Watkins
633 West 5th Street
Suite 4000
Los Angeles, California 90071
Attn: Michael S. Lurey, Esq.
Telephone: (213) 891-8304
Facsimile: (213) 891-8763
If to Merrill Lynch:
Merrill Lynch Global Allocation Fund, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Attn: Brad Lucido, Esq.
Telephone: (609) 282-1715
Facsimile: (609) 282-0689
with a copy to:
Dilworth Paxson LLP
3200 Mellon Bank Center
1735 Market Street
Philadelphia, Pennsylvania 19103
Attn: Roger F. Wood, Esq.
Telephone: (215) 575-7068
Facsimile: (215) 575-7200
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If to S-C Rig:
S-C Rig Investments III, L.P.
c/o Soros Fund Management
888 7th Avenue
32nd Floor
New York, New York 10106
Attn: Ronald Drake
Telephone: (212) 333-9779
Facsimile: (212) 376-1709
with a copy to:
Paul, Weiss, Rifkind, Wharton
& Garrison
1285 Avenue of the Americas
New York, New York 10019
Attn: Robert Drain, Esq.
Telephone: (212) 373-3000
Facsimile: (212) 373-2366
If to the Creditors' Committee:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Attn: Joseph Samet, Esq.
Telephone: (212) 751-5700
Facsimile: (212) 759-9133
and
Baker & McKenzie
The Wells Fargo Plaza 12th Floor
101 West Broadway
San Diego, California 92101
Attn: Ali M. M. Mojdehi, Esq.
Telephone: (619) 236-1441
Facsimile: (619) 236-0429
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If to WTC:
Wilmington Trust Company
520 Madison Avenue
33rd Floor
New York, New York 10022
Attn: James F. McGinley
Telephone: (212) 415-0522
Facsimile: (212) 415-0513
with a copy to:
Nixon Hargrave Devans & Doyle
437 Madison Avenue
New York, New York 10022
Attn: William Thomas, Esq.
Telephone: (212) 940-3141
Facsimile: (212) 940-3111
If to Nextel:
Nextel Communications, Inc.
1505 Farm Credit Drive, Suite 100
McLean, Virginia 22102
Attn: General Counsel
Telephone: (703) 394-3629
Facsimile: (703) 394-3763
with a copy to:
Jones, Day, Reavis & Pogue
1900 Huntington Center
41 South High Street
Columbus, Ohio 43215
Attn: Paul Harner, Esq.
Telephone: (614) 469-3939
Facsimile: (614) 461-4198
12.13 Effectuating Documents and Further Transactions.
Reorganized Geotek is authorized to execute, deliver, file or record such
contracts, instruments, releases, indentures and other agreements or documents
and take such actions as may be necessary or appropriate to effectuate and
further evidence the terms and conditions of the Plan and any notes or
securities issued pursuant to the Plan.
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12.14 Corporate Action.
Notwithstanding any other provisions of the Plan, on the Effective Date,
all matters provided for under the Plan that would otherwise require approval of
the stockholders, directors or members of one or more of the Debtors shall be
deemed to have occurred and shall be in effect from and after the Effective Date
pursuant to the applicable general corporation law of the states in which the
Debtors or Reorganized Geotek are incorporated without any requirement of
further action by the stockholders or directors of the Debtors or Reorganized
Geotek. On the Effective Date, or as soon thereafter as is practicable,
Reorganized Geotek shall, if required, file its amended certificate of
incorporation with the Secretary of State of the state in which Reorganized
Geotek is incorporated, in accordance with the applicable general corporation
law of such states.
12.15 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
Lien, the making or assignment of any lease or sublease, or the making or
delivery of any deed or instrument of transfer under, in furtherance of, or in
connection with the Plan, shall not be subject to any stamp, real estate
transfer, mortgage recording or other similar tax.
12.16 Payment of Statutory Fees.
All fees payable pursuant to section 1930 of title 28 of the United States
Code, as determined by the Bankruptcy Court on or before the Effective Date
shall be paid by Reorganized Geotek on the Effective Date.
12.17 Withholding and Reporting Requirements.
In connection with the consummation of the Plan, Reorganized Geotek shall
comply with all withholding and reporting requirements imposed by any federal,
state, local or foreign taxing authority, and all Distributions hereunder shall
be subject to any such withholding and reporting requirements.
12.18 Exhibits/Schedules.
All exhibits and schedules to the Plan as filed on or before the Exhibit
Filing Date are incorporated into and are a part of the Plan as if set forth in
full herein.
12.19 Allocation of Plan Distributions Between Principal and Interest.
To the extent that any Allowed Claim entitled to a Distribution under the
Plan is composed of indebtedness and accrued but unpaid interest thereon, such
Distribution shall, for federal income tax purposes, be allocated to the
principal amount of the Claim first and then, to the extent the consideration
exceeds the principal amount of the Claim, to accrued but unpaid interest.
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12.20 Non-Admissibility.
The Plan shall not be admissible in any cases or proceedings involving the
Debtors for any purpose (other than for enforcing its terms), nor shall the Plan
be deemed as an admission or waiver of any of the Debtors for any purpose.
12.21 Filing of Additional Documents.
On or before substantial consummation of the Plan, the Debtors shall file
with the Bankruptcy Court such agreements and other documents as may be
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan.
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12.22 Successors and Assigns.
The rights, benefits and obligations of any Person named or referred to in
the Plan will be binding upon, and will inure to the benefit of, the heirs,
executors, administrators, representatives, successors or assigns of such
Person.
Dated: Wilmington, Delaware
April 9, 1999
GEOTEK COMMUNICATIONS, INC.,
for itself and on behalf of all of the Debtors
By:/s/ Anne E. Eisele
-----------------------------------
Name: Anne Eisele
Title: President
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER, LLP
By:/s/ Andrew A. Kress
---------------------------------------
Andrew A. Kress (AK 8985)
425 Park Avenue
New York, New York 10022
(212) 836-8000
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Laura Davis Jones
11th Floor, Rodney Square North
P.O. Box 391
Wilmington, DE 19899-0391
(302) 371-6600
Co-Counsel for the Debtors
55
