<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 17, 1998
--------------------------
PORTACOM WIRELESS, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-23228 33-0650673
- -------------------------- ------------------------ ---------------------
(State or Other Juris- (Commission File Number) (IRS Employer Identi-
diction of Incorporation) fication No.)
10061 Talbert Avenue, Suite 200, Fountain Valley, California 92708
- ------------------------------------------------------------ ---------
(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 714-593-3234
------------------
N/A
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(Former name or former address, if changed since last report.)
____________________________________
<PAGE>
Item 3. Bankruptcy or Receivership.
--------------------------
On September 17, 1998, the United States Bankruptcy Court for the
District of Delaware (the "Court") entered an order confirming the Amended Plan
of Reorganization Proposed by PortaCom Wireless, Inc. (alternatively, the
"Company," the "Debtor," or the "Registrant"), as Debtor and Debtor-In-
Possession, as Modified (the "Plan"). A copy of the Plan is attached as an
exhibit hereto.
The Plan divides claims against, and interests in, the Debtor into
classes and sets forth the treatment afforded to each such class. A claim or
interest was deemed to be allowed if it was timely filed with the Court and no
timely objection was made to such claim or interest. A claim or interest was
deemed to be filed if it was scheduled by the Debtor under the Plan or if a
proof of claim was filed with the Court by the holder of the claim or interest.
The Court made all determinations regarding objections to any claim or interest.
The Plan calls for the liquidation of the Debtor's assets to satisfy
claims and interests and, ultimately, for the dissolution of the Debtor. The
principal assets of the Debtor are 5,300,000 shares of common stock of VDC
Corporation (the "VDC Shares") and a reserved pool of up to $2,682,000 in cash,
both of which are subject to adjustment as provided in the Plan. The VDC Shares
and cash will be distributed to holders of claims or interests in full or
partial satisfaction of such claims and interests. The Plan also allows, under
certain circumstances, for the liquidation of VDC Shares by the Debtor to
generate additional cash to satisfy certain claims and interests.
Class 1 consists of all administrative claims entitled to priority
under section 507(a)(1) of the United States Bankruptcy Code, as amended, 11
U.S.C. (S)101, et seq. (the "Code"). Class 1 includes holders of claims for
-- ---
compensation or reimbursement of professional fees and unpaid post-petition
obligations of the Debtor. Class 1 is unimpaired under the Plan, and each
holder of a Class 1 claim will be paid in full in cash.
Class 2 consists of claims entitled to priority pursuant to sections
507(a)(2) through (9) of the Code and includes certain tax and wage claims.
Class 2 is unimpaired under the Plan, and each holder of a Class 2 claim will be
paid in full in cash.
Class 3 consists of a secured claim of VDC Corporation in an amount
equal to the sum of certain secured loans made by VDC Corporation to the Debtor
prior to the Debtor's bankruptcy filing and certain debtor-in-possession loan
advances made by VDC Corporation to the Debtor after the Debtor's bankruptcy
filing. This claim also includes accrued and unpaid interest on the advances
made by VDC Corporation to the Debtor. VDC Corporation, as the only member of
Class 3, is impaired under the Plan. VDC Corporation and the Debtor are parties
to a certain transaction consummated in June 1998 whereby VDC Corporation issued
the VDC Shares to the Debtor in exchange for 2,000,000 shares of common stock of
Metromedia China Corporation (the "MCC Shares") and 4,000,000 warrants to
purchase shares of common stock of Metromedia China Corporation (the "MCC
Warrants") (the "Transaction"). Pursuant to the Transaction, VDC Corporation
retained a lien on and a security interest in the MCC Shares and the MCC
Warrants. This Claim was essentially satisfied upon the consummation of the
Transaction and will be deemed to be satisfied, for purposes of the bankruptcy
proceeding, on the date on which the order entered by the Court confirming the
Plan becomes a final order.
Class 4 consists of a contingent secured claim of Metromedia China
Corporation ("MCC") under a certain agreement of indemnification between the
Debtor and MCC. This claim will be extinguished if no claim for indemnification
is made by MCC on or before January 1, 1999.
Class 5 consists of all unsecured claims that are not entitled to
priority under the Code. Class 5 consists of two subclasses. Class 5A consists
of liquidated unsecured claims which are unsecured claims over which there is no
dispute as to the amount of the claim. Class 5A is impaired under the Plan, and
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holders of Class 5A claims shall receive, to the extent available for payment of
such claims, cash and/or VDC Shares. Class 5B consists of disputed unsecured
claims. The Debtor has established a reserve for the disputed portion of such
claims.
Class 6 consists of holders of common stock of the Debtor or the
holders of rights to receive common stock or warrants and/or options to purchase
common stock of the Debtor. Class 6 is impaired under the Plan, and the holders
of Class 6 interests shall receive the assets of the Debtor, including but not
limited to cash and VDC Shares, remaining after all distributions to Classes 1
through 5 under the Plan. The Record Date for determining membership in Class 6
was set by the Court as September 10, 1998.
The issuance or distribution of securities under the Plan is not
subject to the registration requirements of section 5 of the Securities Act of
1933, as amended (the "Securities Act") or any state or local law requiring
registration for offer or sale of a security or registration or licensing of an
issuer, underwriter, broker or dealer, as the transactions contemplated by the
Plan are entitled to the exemptions provided by section 1145 of the Code.
Pursuant to the Plan, all unexpired leases of non-residential real
property and executory contracts which have not been assumed by the Debtor or
which are not the subject of a motion to assume have been rejected pursuant to
sections 1123(b)(2) and 365 of the Code.
As of September 17, 1998, the Debtor had 13,576,970 shares of common
stock issued and outstanding. The Debtor has not reserved any shares of its
common stock for future issuance in respect of claims and interests filed and
allowed under the Plan. A schedule of the Debtor's assets and liabilities as of
August 31, 1998, as filed with the Court on September 15, 1998, is attached as
an exhibit hereto.
On September 28, 1998, VDC Corporation filed a motion with the Court
seeking an opportunity to conduct examinations of representatives of the Debtor
and, potentially, revocation of the Court's order confirming the Plan. The basis
of the motion by VDC Corporation is a newspaper article that appeared in the
Wall Street Journal on September 23, 1998, stating that the Chinese government
- -------------------
has decided to ban foreign companies from participating in joint ventures in the
Chinese telecommunications industry. The motion cites this article as possible
evidence that misrepresentations were made regarding the business prospects of
MCC. The Debtor believes the motion filed by VDC Corporation is without merit
and intends to oppose the motion.
Item 7. Financial Statement and Exhibits.
--------------------------------
(c) Exhibits
2 Amended Plan of Reorganization Proposed by PortaCom Wireless,
Inc., as Debtor and Debtor-In-Possession, as Modified, and as
Confirmed by the United States Bankruptcy Court for the District
of Delaware on September 17, 1998 (without exhibits).
99 Schedule of Debtor's Assets and Liabilities, as of August 31,
1998, as filed with the United States Bankruptcy Court for the
District of Delaware on September 15, 1998.
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<PAGE>
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.
PORTACOM WIRELESS, INC.
(Registrant)
Date: October 2, 1998 By: /s/ Michael Richard
--------------------------------------------
Name: Michael Richard
Title: Acting Chief Executive Officer
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<PAGE>
EXHIBIT INDEX
-------------
Exhibit No.
- -----------
2 Amended Plan of Reorganization Proposed by PortaCom Wireless, Inc., as
Debtor and as Debtor-In-Possession, as Modified, and as Confirmed by
the United States Bankruptcy Court for the District of Delaware on
September 17, 1998 (without exhibits).
99 Schedule of Debtor's Assets and Liabilities, as of August 31, 1998, as
filed with the United States Bankruptcy Court for the District of
Delaware on September 15, 1998.
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EXHIBIT 2
---------
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: :
:
PORTACOM WIRELESS, INC., : Chapter 11
a Delaware Corporation, :
: Case No. 98-661(PJW)
Debtor. :
________________________________________________________________________________
AMENDED PLAN OF REORGANIZATION PROPOSED BY
PORTACOM WIRELESS, INC.,
AS DEBTOR AND DEBTOR-IN-POSSESSION, AS MODIFIED
________________________________________________________________________________
Francis A. Monaco, Jr., Esquire (No. 2078)
Joseph J. Bodnar, Esquire (No. 2512)
WALSH AND MONZACK, P.A.
400 Commerce Center
Twelfth and Orange Streets
P.O. Box 2031
Wilmington, DE 19899
(302) 656-8162
Attorneys for Debtor and
Debtor-in-Possession
- and -
Jeffrey Kurtzman, Esquire
KLEHR, HARRISON, HARVEY,
BRANZBURG & ELLERS LLP
1401 Walnut Street
Philadelphia, PA 19102
(215) 568-6060
Special Counsel for Debtor and
Debtor-in-Possession
Dated: July 24, 1998
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INTRODUCTION
------------
PortaCom Wireless, Inc., a Delaware corporation (the "Debtor"), proposes
the following amended plan of reorganization, as modified (the "Plan") pursuant
to 11 U.S.C. (S)(S)1121 and 1129.
ARTICLE I
DEFINITIONS
-----------
For purposes of this Plan, and unless the context otherwise requires, the
terms set forth below shall have the following meanings:
1.1 Administrative Advance. The Cash available to the Debtor for the
----------------------
payment of ordinary course Administrative Claims from time to time pursuant to
section 3.4(i) of the MOU.
1.2 Administrative Claim. Any cost or expense of administration of the
--------------------
Case entitled to priority in accordance with the provisions of sections 503(b)
and 507(a) (1) and any fees or charges assessed against the Debtor under 28
U.S.C. (S)1930, including, without limitation, any actual and necessary expense
of operating the business of the Debtor and all compensation or reimbursement of
expenses to the extent allowed by the Bankruptcy Court under sections 330 and
331 of the Code, including those of counsel or other professionals employed by
the Debtor and the Committee. All professional fees and costs incurred prior to
the Confirmation Date by the Debtor for professionals employed by the Debtor and
the Committee shall be deemed to be Administrative Claims.
1.3 Administrative Shares. The VDC Shares described in section 3.4(g) of
---------------------
the MOU.
1.4 Allowed Claim. A Claim (a) as listed in the Bankruptcy Schedules
-------------
filed in this case (including any amendments thereto) and not listed as
contingent, disputed or unliquidated, or (b) as set forth in a properly filed
Proof of Claim filed by a Creditor prior to the Bar Date, to which no
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objection is filed pursuant to this Plan, or (c) as allowed by Final Order of
the Bankruptcy Court.
1.5 Allowed Secured Claim. A Claim secured by a lien on or security
---------------------
interest in Collateral as of the Confirmation Date, determined in accordance
with section 506(a) of the Code.
1.6 Asset Purchase Agreement. The asset purchase agreement dated March
------------------------
23, 1998 by and between VDC, as buyer, and the Debtor, as seller, as amended by
(i) two Stipulations and Orders in Lieu of Objection dated April 3, 1998 and
April 23, 1998, respectively, (ii) the Escrow Agreement and (iii) the MOU,
(copies of which are respectively attached hereto as Exhibits "A" through "E"
and incorporated by reference herein).
1.7 Asset Sale. The Debtor's sale of the MCC Shares and the MCC Warrants
-----------
as contemplated in and under the Asset Purchase Agreement and this Plan and as
confirmed by the Asset Sale Order.
1.8 Asset Sale Order. That order entered by the Bankruptcy Court on or
-----------------
about April 23, 1998 approving the Asset Sale and the Asset Purchase Agreement.
1.9 Assets. The Debtor's personal property, including, without
------
limitation, the Debtor's interest in the MCC Shares and the MCC Warrants,
equipment, contract rights, general intangibles and other assets.
1.10 Bankruptcy Court. That unit of the United States District Court for
----------------
the District of Delaware in which the Case is pending.
1.11 Bankruptcy Rules. The Federal Rules of Bankruptcy Procedure, as
----------------
amended from time to time, promulgated by the Supreme Court of the United
States.
1.12 Bankruptcy Schedules. The schedules of assets and liabilities filed
--------------------
by the Debtor with the Clerk of the Bankruptcy Court pursuant to Bankruptcy Rule
1007, as they may be amended from time to time.
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1.13 Bar Date. May 15, 1998, the date established by the Bankruptcy
--------
Court as the deadline by which Proofs of Claim and Interests must be filed.
1.14 Business Day. Any day, except a Saturday, Sunday, or holiday, on
------------
which commercial banking corporations and the federal courts are open for
business.
1.15 Case. The Debtor's Chapter 11 reorganization case presently
----
captioned In re PortaCom Wireless, Inc., Debtor and docketed at Case No. 98-
-------------------------------------
661(PJW).
1.16 Cash. The lawful currency of the United States of America.
----
1.17 Cause of Action. All Claims and causes of action now owned or
---------------
hereafter acquired by the Debtor, whether arising under the Code or other
federal or state law, including, without limitation, any cause of action arising
under sections 544, 547, 548, 549, 550, 551, 553 or other sections of the Code.
1.18 Claim. The right to payment, whether or not such right is
-----
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; and the
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured, as defined in section 101(5) of the Bankruptcy
Code.
1.19 Class. A group of Claims or Interests, consisting of Claims or
-----
Interests which are substantially similar to each other, as classified pursuant
to this Plan.
1.20 Code. The United States Bankruptcy Code, as amended, 11 U.S.C.
----
(S)101, et seq.
-- ---
1.21 Collateral. The property of the Debtor securing an Allowed
----------
Secured Claim.
1.22 Committee. The official committee of unsecured creditors
---------
appointed pursuant to section 1102 of the Code.
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1.23 Confirmation Date. The date on which the Bankruptcy Court shall
-----------------
enter the Confirmation Order with respect to this Plan in accordance with the
provisions of the Code.
1.24 Confirmation Hearing. The hearing at which the Bankruptcy Court
--------------------
considers confirmation of this Plan pursuant to section 1128 of the Code.
1.25 Confirmation Order. The order entered by the Bankruptcy Court
------------------
confirming the Plan, which shall be in form and substance reasonably
satisfactory to the Debtor, the Committee and VDC.
1.26 Creditor. An entity, as defined in section 101(14) of the Code,
--------
that has a Claim against the Debtor.
1.27 Debtor. PortaCom Wireless, Inc., the debtor and debtor-in-
------
possession in the Case.
1.28 Deficiency Claim. The Unsecured Claim of a Secured Creditor in
----------------
excess of the value of the Collateral securing such Claim.
1.29 DIP Financing Documents. The Debtor In Possession Loan, Security
-----------------------
and Pledge Agreement between the Debtor and VDC dated March 23, 1998, together
with, to the extent modified by, the two Stipulations and Orders in Lieu of
Objection dated April 3, 1998 and April 23, 1998.
1.30 Disbursing Agent. Michael Richard or another person or entity
----------------
designated by the Debtor with the consent of the Committee.
1.31 Disputed Claims Reserve. The reserve for Disputed Unsecured
-----------------------
Claims which shall be funded from the Sale Proceeds.
1.32 Disputed Unsecured Claims. All Unsecured Claims, other than
-------------------------
Liquidated Unsecured Claims.
1.33 Distribution Date. The Business Day(s) on which distributions
-----------------
under the Plan shall
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be made or deemed to be made to the holders of Allowed Claims and Interests.
With respect to Unsecured Claims, to the extent practicable in consideration of
the payment mechanisms described in the Escrow Agreement, the Distribution Date
shall occur on the later of the Effective Date or a date within ten (10) days
after such Unsecured Claim becomes an Allowed Claim.
1.34 Effective Date. The first Business Day which is at least eleven
--------------
(11) days after the Confirmation Date, on which the Confirmation Order has
become a Final Order and on which all conditions precedent to the Effective Date
have occurred as set forth in the Plan.
1.35 Equity Security Holder. Any person who holds, as of the Record
----------------------
Date, any legal or equitable interest in any equity security of the Debtor.
1.36 Escrow Agent. Klehr, Harrison, Harvey, Branzburg & Ellers LLP,
------------
as appointed pursuant to the Escrow Agreement.
1.37 Escrow Agreement. That certain Escrow Agreement among the
----------------
Debtor, VDC, the Committee and the Escrow Agent, contemplated by the Stipulation
and Order in Lieu of Objection dated April 6, 1998, to establish an account for
the Escrowed Funds, which constitutes a part of the consideration payable by VDC
to purchase the MCC Shares and MCC Warrants. A true and correct copy of the
Escrow Agreement is attached hereto as Exhibit "D" and incorporated by
reference herein.
1.38 Escrowed Funds. The Cash fund in the sum of $2,682,000
--------------
established pursuant to the Escrow Agreement.
1.39 Filing Date. March 23, 1998, the date on which the Petition was
-----------
filed with the Bankruptcy Court.
1.40 Final Order. A judgment, order or other decree issued and
-----------
entered by the Bankruptcy Court, which judgment, order or other decree (a) has
not been reversed or stayed, as to which the
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time to appeal has expired and as to which no appeal or petition for relief,
rehearing or certiorari is pending, or (b) with respect to which any appeal has
----------
been finally decided and no further appeal or petition for certiorari can be
----------
taken or granted.
1.41 Impaired Class. Any Class of Claims or Interests which is
--------------
impaired within the meaning of section 1124 of the Code.
1.42 Interests. The rights of the Equity Security Holders, together
---------
with any other rights to receive shares of common stock, warrants and/or options
to purchase common stock of the Debtor or the Reorganized Debtor.
1.43 Issuance or Issued. With respect to VDC Shares to be issued,
------------------
offered or sold pursuant to the Asset Purchase Agreement , the offer or sale of
securities under the Plan as set forth in and within the meaning of section 1145
of the Code.
1.44 Lien. With respect to any of the Assets of the Debtor, any
----
mortgage, lien, pledge, charge, security interest, or other security device
(including a lease which is not a true lease) or encumbrance of any kind
affecting such Asset.
1.45 Liquidated Unsecured Claims. The limited class of Unsecured
---------------------------
Claims which (a) have been resolved and/or liquidated pursuant to a Settlement
Agreement, and/or (b) are asserted in amounts and with priorities consistent
with, or in amount or priority less than that reflected in, the Bankruptcy
Schedules.
1.46 MCC. Metro media China Corporation, formerly Metro media Asia
---
Corporation, a privately held corporation organized and existing under the laws
of the state of Delaware, which is the successor to Asian American
Telecommunications Corporation.
1.47 MCC Shares. The 2,000,000 shares of MCC common stock owned by
----------
Debtor, together with all rights and privileges pertaining thereto, including,
without limitation, all securities
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and additional securities receivable in respect of or in exchange for such
securities, all rights to subscribe for securities incident to or arising from
ownership of such securities, all cash, interest, stock and other dividends or
distributions paid or payable on such securities, and all books and records
pertaining to the foregoing, including, without limitation, all stock record and
transfer books, and whatever is received when any of the foregoing is sold,
exchanged or otherwise disposed of, including any proceeds as such term is
defined in the Uniform Commercial Code of each state as enacted and in effect on
the date hereof in each applicable jurisdiction, and as the same may
subsequently be amended from time to time as further defined in and pursuant to
the Prepetition Loan Documents.
1.48 MCC Warrants. The warrants to purchase 4,000,000 shares of MCC
------------
common stock with a strike price of $4.00 per share, together with all rights
and privileges pertaining thereto, including, without limitation, all securities
and additional securities receivable in respect of or in exchange for such
securities, all rights to subscribe for securities incident to or arising from
ownership of such securities, all cash, interest, stock and other dividends or
distributions paid or payable on such securities, and all books and records
pertaining to the foregoing, including, without limitation, all stock record and
transfer books, and whatever is received when any of the foregoing is sold,
exchanged or otherwise disposed of, including any proceeds as such term is
defined in the Uniform Commercial Code of each state as enacted and in effect on
the date hereof in each applicable jurisdiction, and as the same may
subsequently be amended from time to time as further defined in and pursuant to
the Prepetition Loan Documents.
1.49 MOU. The Memorandum of Understanding by and among VDC and the Debtor
---
dated June 8, 1998, a copy of which is annexed hereto and incorporated herein as
Exhibit "E".
1.50 Net Distributable Value. The remaining Sale Proceeds and other
------------------------
assets available for
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distribution from time to time to the holders of Allowed Interests after (a)
distributions have been made to the holders of Allowed Claims in Classes 1
through 5 as provided in this Plan, and (b) distributions to professionals from
reserves for post-Confirmation professional fees that have been made pursuant to
sections 3.1 and 5.10 hereof.
1.51 New Common Stock. The shares, if any, of common stock to be
----------------
Issued by the Reorganized Debtor to an Investor.
1.52 Petition. The voluntary petition for reorganization under
--------
Chapter 11 of the Code filed by the Debtor with the Bankruptcy Court.
1.53 Plan. This Amended Plan of Reorganization, as modified, as it
----
may be further amended, modified or supplemented from time to time, and any
exhibits and schedules thereto.
1.54 Pledge Agreement. That certain Pledge Agreement dated on or
----------------
about June 8, 1998 between MCC and the Debtor (the "Pledge Agreement").
1.55 Prepetition Loan Documents. Collectively, the Loan Agreement,
--------------------------
Security Agreement, Pledge Agreement each dated November 10, 1997 and related
instruments and documents executed and delivered by the Debtor to VDC in
connection therewith.
1.56 Priority Claims. Any Claim or portion thereof that is entitled
---------------
to priority under sections 503(b) or 507 of the Code.
1.57 Pro Rata. With respect to any distribution to the holder of an
--------
Allowed Claim or Interest of a particular Class on a particular date, the same
proportion that the amount of such Allowed Claim or Interest bears to the
aggregate amount of all Claims or Interests of such Class, including Disputed
Claims or Interests.
1.58 Purchaser. VDC, as the purchaser of the MCC Shares and MCC
---------
Warrants.
1.59 Record Date. The date as of which entities or persons are
-----------
deemed to be Equity
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Security Holders and entitled to treatment on account of Allowed Interests under
this Plan, which shall be the date and time established by the Bankruptcy Court
as the deadline for filing objections to confirmation of the Plan.
1.60 Reorganized Debtor. The Debtor on and after the Confirmation
------------------
Date.
1.61 Sale Proceeds. The Cash and non-Cash proceeds of the Asset Sale.
-------------
In the event that VDC is the Purchaser, pursuant to the Asset Purchase Agreement
and to the extent provided in the Escrow Agreement, the Sale Proceeds shall
consist of the Escrowed Funds and the VDC Shares.
1.62 Secured Claim. A Claim of a Creditor against the Debtor secured
-------------
by a validly perfected, enforceable and unavoidable Lien on property in which
the Debtor has an interest, to the extent of the value of such Creditor's
interest in such property.
1.63 Secured Creditor. A Creditor that holds a Secured Claim.
----------------
1.64 Settlement Agreements. The prepetition debt settlement
---------------------
agreements between the Debtor and certain of its creditors, as reflected in
Attachment #1 to Bankruptcy Schedule "F," which shall be deemed to be Allowed
Claims in the amount and in exchange for the consideration set forth therein,
respectively.
1.65 Unsecured Claim. Any Claim, or portion thereof, that is not
---------------
entitled to priority under sections 503(b) or 507 of the Code and is not secured
by Collateral, including Disputed Unsecured Claims.
1.66 VDC. VDC Corporation, Ltd., a Bermuda corporation.
---
1.67 VDC Shares. The shares of VDC common stock to be Issued by VDC
----------
to the Debtor, or the Escrow Agent as the case may be pursuant to the Asset
Purchase Agreement and this Plan and offered or sold in connection with and in
consideration of the Asset Sale.
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ARTICLE II
----------
CLASSIFICATION OF CLAIMS AND INTERESTS
--------------------------------------
All Claims against and Interests in the Debtor are classified as follows:
2.1 Class 1. Allowed Administrative Claims.
-------
2.2 Class 2. Allowed Priority Claims.
-------
2.3 Class 3. Allowed Secured Claim of VDC.
-------
2.4 Class 4. Contingent Secured Claim of MCC.
-------
2.5 Class 5. Allowed Liquidated Unsecured Claims and Disputed Unsecured
--------
Claims.
2.6 Class 6. Allowed Interests of Equity Security Holders as defined in
-------
this Plan.
ARTICLE III
-----------
TREATMENT OF CLASSES UNDER THE PLAN
-----------------------------------
3.1 Class 1 - Administrative Claims. Class 1 is unimpaired under the
-------------------------------
Plan. Unless the holder of an Administrative Claim agrees to a less favorable
treatment, or an Administrative Claim is not yet due or payable, the holder of
an Allowed Class 1 Claim shall be paid in full in Cash on the later of the
Effective Date or the date on which such Claim becomes an Allowed Claim.
Notwithstanding the foregoing, if an Allowed Administrative Claim was incurred
in the ordinary course of the Debtor's business, such Claim shall be paid when
due in the ordinary course of business. Any Claim for professional fees
arising or reimbursement of costs arising or incurred before the Confirmation
Date shall be subject to Bankruptcy Court approval pursuant to an application
under sections 330 or 331 of the Code, which shall be filed on or within sixty
(60) days from the Confirmation Date. The Disbursing Agent shall establish a
reserve for professional fees and costs arising or incurred after the
Confirmation Date and may liquidate such VDC Shares as are
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sufficient to pay or reserve, in Cash, Allowed Class 1 Claims.
3.2 Class 2- Priority Claims. Class 2 is unimpaired under the Plan. On
------------------------
or as soon as is reasonably practicable after the Effective Date, Allowed Class
2 Claims shall be paid in full in Cash in satisfaction of such Claims. In the
discretion of the Disbursing Agent, the Disbursing Agent may liquidate such VDC
shares as are sufficient to pay, in Cash, Allowed Class 2 Claims.
3.3 Class 3 - VDC Secured Claim. Class 3 is impaired under the Plan.
---------------------------
Since VDC was, the Class 3 Claim shall be treated in accordance with the Asset
Purchase Agreement as follows: VDC shall retain its Lien on and security
interest in the MAC Shares and MAC Warrants, which Lien and security interest
shall be deemed perfected without further action, notice or recording by VDC,
and the DIP Financing Documents shall remain in full force and effect; however,
the Maturity Date thereunder shall be extended through the Effective Date.
Notwithstanding the foregoing, the Indebtedness and the VDC Secured Claim shall
be satisfied pursuant to sections 3.4(a) and (h) of the Asset Purchase
Agreement.
3.4 Class 4 - MCC Contingent Secured Claim. Class 4 is impaired under
---------------------------------------
the Plan. Class 4 consists of MCC's contingent Secured Claim arising pursuant
to that certain Termination Agreement dated September 11, 1996 and the Pledge
Agreement. Under the terms of the Asset Purchase Agreement and the Asset Sale
Order, the MCC Shares were conveyed free and clear of Liens, Claims, and
encumbrances with such Liens, Claims and encumbrances to attach to the Sale
Proceeds pursuant to section 363(f) of the Code (the "Replacement Lien").
Pursuant to the Asset Sale Order and the terms of the Pledge Agreement, MCC has
a first priority Replacement Lien on 2,650,000 VDC Shares (the "Pledged Shares")
which have been pledged to MCC to secure the Debtor's indemnification
obligations to MCC under the Termination Agreement dated September 11, 1996,
subject to the terms of the Pledge Agreement.
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3.5 Class 5 - Allowed Unsecured Claims. Class 5 consists of two
----------------------------------
subclasses which are impaired under the Plan.
(a) Class 5A - Liquidated Unsecured Claims. Class 5A consists of
---------------------------------------
Liquidated Unsecured Claims. Unless otherwise agreed between the holder of a
Class 5A Claim and the Debtor, the Disbursing Agent shall distribute to the
holder of each Class 5A Allowed Claim, in full satisfaction of such Claim and
all other interest, late charges, penalties, attorneys' fees and/or court or
other costs which might otherwise be due, either:
(i) VDC Shares and one hundred four (104%) percent of any Cash
expressly provided for in the applicable Settlement Agreement; or
(ii) to the extent that (A) the consideration payable under the
applicable Settlement Agreement is not expressed as a number of
VDC Shares or (B) a Class 5A Claim is not subject to a Settlement
Agreement, Cash equal to one hundred four (104%) percent of the
Allowed amount of such Claim.
Distribution of the Escrowed Funds to the holders of Class 5 Claims shall be
limited to the Closing Date Claims, Settlements, Bar Date Claims and Other
Allowed Claims, all as defined in the Asset Purchase Agreement, and the Escrowed
Funds shall not be distributed to the holders of such Claims in an amount in
excess of one hundred (100%) percent of the Cash amount of such Claims.
(b) Class 5B - Disputed Unsecured Claims. Class 5B consists of
-------------------------------------
Disputed Unsecured Claims, including, but not limited to, all Unsecured Claims
that are not Liquidated Unsecured Claims and/or Claims that are disputed because
(i) the Debtor's books and records reflect such a dispute; (ii) a Class 5A
claimant asserts a Claim in excess of the consideration reflected in its
Settlement Agreement with the Debtor; (iii) a Class 5A claimant asserts a Claim
in excess of the amount of its Claim as listed in the Bankruptcy Schedules; (iv)
a Claim asserted in a timely filed proof of claim reflecting an inaccurate
priority or an invalidly asserted Lien; or (v) an objection to a Claim has been
asserted and is pending. On the Distribution Date, the escrow account
established
-18-
<PAGE>
pursuant to the Escrow Agreement shall be deemed to be the Disputed Claims
Reserve, which account shall consist of Sale Proceeds sufficient to satisfy the
Disputed Unsecured Claims as scheduled or asserted in a proof of claim
(whichever amount is higher) for subsequent distribution to the holders of
Disputed Unsecured Claims at such time or times and in such amounts as they
become Allowed Claims, pursuant to sections 5.11 and 7.2 hereof. Class 5B
claimants may elect to receive distributions of Cash and/or VDC Shares in
satisfaction of their Allowed Unsecured Claims. In the event that a Class 5B
claimant elects to accept, or is judicially determined to be entitled to
receive, VDC Shares in full or partial satisfaction of its Claim, such claimant
shall receive VDC Shares in an amount determined by dividing its Allowed Claim
by the closing bid price of the VDC Shares on the day immediately preceding the
Distribution Date and, in the event that such calculation would result in the
issuance of a fractional share, rounding up to the next highest number of
shares. This calculation is illustrated as follows:
Creditor X has an Allowed Class 5
Claim against the Debtor in the
amount of $1,100.00. On the day
immediately preceding the
Distribution Date, the closing bid
price of VDC common stock is $4.25
per share. On the Distribution Date,
Creditor X is entitled to receive
259 shares of VDC common stock
($1,100.00/$4.25/share = 258.82
shares, rounded to 259 shares).
Nothing herein shall obligate a Class 5 claimant which is not a party to a
Settlement Agreement to accept VDC Shares in satisfaction of its Claim.
(c) Authority to Liquidate VDC Shares. Subject to the provisions of
---------------------------------
the Escrow Agreement and sections 7.6 and 7.7 of the Asset Purchase Agreement,
in the discretion of the Disbursing Agent, the Disbursing Agent may liquidate
such VDC Shares as are sufficient to pay,
-19-
<PAGE>
in Cash, Allowed Class 5A Claims to the extent provided in the applicable
Settlement Agreement or Allowed Class 5B claims to the extent such a claimant
elects to receive Cash pursuant to section 3.5(b) above.
3.6 Class 6 - Allowed Interests. Class 6 is impaired under the Plan.
----------------------------
Class 6 consists of the holders of Interests. Such holders shall retain their
Interests on and after the Confirmation Date. The ownership of Interests and the
entitlement of Equity Security Holders to treatment under the Plan shall be
determined as of the Record Date.
ARTICLE IV
----------
PROVISIONS CONCERNING TREATMENT OF CLASSES
------------------------------------------
4.1 Claims in Classes 1 and 2 are "non-classified Claims" for voting
purposes pursuant to section 1123(a) (1) of the Code, and solicitation of
acceptances with respect to such Claims is not required.
4.2 Claims in Classes 3, 4 and 5 and Interests in Class 6 are impaired and
are entitled to vote to accept or reject the Plan pursuant to section 1126(a) of
the Code.
ARTICLE V
---------
MEANS FOR IMPLEMENTATION OF THE PLAN
------------------------------------
5.1 Plan Funding. The Plan shall be funded by the consummation of the
-------------
Asset Sale pursuant to the Asset Purchase Agreement and the distribution of the
Sale Proceeds, including the Administrative Advance and the Administrative
Shares, as well as any other funds which the Reorganized Debtor may have on hand
as of the Confirmation Date, the collection of accounts receivable and any
other amounts due and owing to the Debtor, the proceeds of Causes of Action, if
any.
5.2 Delivery of Sale Proceeds. The Escrowed Funds have been delivered to
--------------------------
the Escrow
-20-
<PAGE>
Agent pursuant to the Escrow Agreement . At Closing (as defined in the Asset
Purchase Agreement), the Buyer shall deliver the VDC Shares to the Escrow Agent
in furtherance of Section 4(b) of the Stipulation and Order in Lieu of Objection
dated April 3, 1998 and subject to adjustment provided for in section 8 of the
Escrow Agreement and section 3.4 of the Asset Purchase Agreement. On or before
the Distribution Date, and from time to time thereafter, the Escrow Agent will
deliver the Sale Proceeds to the Disbursing Agent for distributions consistent
with the Escrow Agreement and this Plan.
5.3 Duties of Disbursing Agent. The duties and responsibilities of the
---------------------------
Disbursing Agent shall be ministerial only, and the Disbursing Agent may only
act upon the direction and authorization of the Bankruptcy Court pursuant to the
terms of the Plan. At the expense of the Debtor's estate, the Disbursing Agent
shall be required to obtain a bond satisfactory to the Reorganized Debtor and
the Committee. After the Disbursing Agent has made a final distribution of the
Net Distributable Value pursuant to the terms of the Plan, the Disbursing Agent
shall file with the Court a report of all receipts and disbursements made by the
Disbursing Agent after the Confirmation Date. Additionally, at that time and in
the event that VDC is the Purchaser, the Disbursing Agent shall distribute to
VDC and the holders of Class 6 Interests such Cash and VDC Shares as may be
available pursuant to section 8 of the Escrow Agreement. The Disbursing Agent,
in his discretion, and subject to the provisions of the Escrow Agreement and
sections 7.6 and 7.7 of the Asset Purchase Agreement, may liquidate such VDC
Shares as are sufficient to allow Cash payments to be made to claimants in
Classes 1 and 2, and, pursuant to the terms of the applicable Settlement
Agreements or as otherwise provided herein, to claimants in Class 5.
5.4 Timing of Distributions. Distributions, when practicable from time to
------------------------
time, as provided in this Plan shall be made first to the holders of Allowed
Claims and thereafter to the
-21-
<PAGE>
holders of Allowed Interests (to the extent of the Net Distributable Value),
provided that the Disputed Claims Reserve has been funded in accordance with
section 7.2 hereof.
5.5 Payment of Class 1 and 2 Claims. Except as otherwise agreed by the
-------------------------------
holder of any such Claim, on the Distribution Date, the Disbursing Agent shall
pay in full in Cash all Allowed Administrative Claims and all Allowed Priority
Claims.
5.6 Payment of Class 4 and 5 Claims. Except as otherwise agreed between
-------------------------------
the Debtor and the holder of an Allowed Class 4 or 5 Claim, such Allowed Claims
shall be paid in full and final satisfaction thereof on the later of the
Distribution Date or the date on which such Claim becomes an Allowed Claim,
provided that the Disputed Claims Reserve has been established and funded as
required pursuant to this Plan.
5.7 Unclaimed Distributions. Neither the Reorganized Debtor nor any
------------------------
successor or designee thereof, including the Disbursing Agent, shall have any
obligation to search for the current addresses of Creditors whose distributions
are returned. The Disbursing Agent may rely exclusively upon the addresses
contained in (i) the Bankruptcy Schedules, if a Creditor did not file a proof of
claim; (ii) a Creditor's proof of claim; and (iii) any written notice provided
to the Reorganized Debtor after the Effective Date. Any distribution
undeliverable after consideration of such address sources shall be forever
waived, and the amount of such distribution shall revest in the Reorganized
Debtor for distribution on behalf of the Class 6 Interests.
5.8 Good Faith Sale. The reversal or modification on appeal of the Asset
----------------
Sale Order approving the Asset Sale will not affect the validity of the Asset
Sale to the Purchaser, whether or not the Purchaser knew of the pendency of the
appeal, unless the Asset Sale Order is stayed pending the appeal and prior to
the consummation of the Asset Sale.
5.9 Injunction. Except as otherwise expressly provided in this Plan or
----------
the Confirmation
-22-
<PAGE>
Order, no Creditor or Equity Security Holder may (i) commence or continue in any
manner any action or other proceeding against the Debtor or VDC or their
respective property, (ii) enforce, attach, collect or recover by any means or
manner any judgment, Claim or award against the Debtor or VDC, (iii) create,
perfect or enforce any lien or encumbrance of any kind against the Debtor or
VDC, or (iv) take any other action in respect of any such Claim or Interest
except as specifically permitted under this Plan. In addition, MCC shall deliver
the MCC Shares and MCC Warrants, to the extent that such MCC Shares and MCC
Warrants have not previously been delivered, to the Purchaser.
5.10 Reserve for Post-Confirmation Professional Fees. On and after the
-----------------------------------------------
Effective Date, the Reorganized Debtor and the Disbursing Agent shall implement
the Plan. On or as soon as is reasonably practicable after the Effective Date,
the Disbursing Agent shall establish a reserve of Cash and/or VDC Shares for the
professional fees and expenses reasonably anticipated to implement the Plan and
the Asset Sale, to prosecute objections to and resolve Disputed Claims, and
otherwise consummate the Plan and the duties of the Reorganized Debtor
thereunder. The Disbursing Agent shall pay post-confirmation professional fees
from the reserve in the ordinary course of business without further order of the
Bankruptcy Court except as provided in section 10.16 hereof. The Committee will
continue to exist post-confirmation until such time as this Plan has been fully
consummated, and the Committee's professionals shall be entitled to receive fees
and expenses paid in accordance with the terms of this section 5.10.
5.11 Reserve for Disputed Claims. Consistent with the Escrow Agreement and
---------------------------
as provided in Section 7.2 hereof, the escrow account established pursuant to
the Escrow Agreement shall be the Disputed Claims Reserve, which account shall
consist of Cash sufficient to satisfy the Disputed Unsecured Claims as scheduled
or asserted in a proof of claim (whichever amount is
-23-
<PAGE>
higher) for subsequent distribution to the holders of Disputed Unsecured Claims
at such time or times and in such amounts as they become Allowed Claims,
together with additional Cash which may be added to the escrow account upon the
liquidation of VDC Shares by the Disbursing Agent in accordance with section 5.3
of this Plan.
5.12 Distribution Pursuant to the Escrow Agreement.
----------------------------------------------
(a) Pursuant to section 8 of the Escrow Agreement and section 3.4 of
the Asset Purchase Agreement, VDC shall receive (i) Cash in an amount equal to
the sum of the disallowed amount of Disputed Unsecured Claims not previously
disbursed pursuant to section 5.15 hereof, plus the Cash portion of the Escrowed
Funds in excess of the Cash required to pay all Allowed Priority Claims and
Allowed Unsecured Claims, plus all interest and other earnings on the Escrowed
Funds, and (ii) the portion of the VDC Shares in an amount equal to the
difference between (x) the total amount of the Escrowed Funds distributed on
account of all Allowed Priority Claims and Allowed Unsecured Claims and (y) the
Indebtedness to VDC (as defined in the Asset Purchase Agreement) plus the fee
incurred by VDC to obtain the letter of credit portion of the Escrowed Funds, if
any, divided by the value of the VDC Shares. The shares of VDC common stock will
be valued based upon the mean of the last bid and ask prices per share as listed
on the NASD Electronic Bulletin Board or other similar interdealer quotation
system through which bid and ask prices for VDC are submitted, or any national
securities exchange on which VDC is listed, for the consecutive five (5) trading
days immediately preceding the auction date of April 23, 1998 in connection with
the Asset Sale. In the event VDC is not trading on any exchange for the five (5)
days prior to the auction date of April 23, 1998 in connection with the Asset
Sale, the value of VDC common stock shall be the fair market value as reasonably
determined by an investment banking firm selected by the Debtor, with the costs
of such appraisal to be borne by the Debtor.
-24-
<PAGE>
(b) After payments to VDC as described in section 5.12(a) above, Class
6 Interests will receive a Pro Rata distribution of the remaining VDC Shares.
5.13 Notice of Occurrence of Effective Date. Upon the occurrence of the
--------------------------------------
Effective Date or as soon thereafter as is reasonably practicable, the
Reorganized Debtor shall file a written notice of the occurrence of the
Effective Date, including the date thereof, with the Bankruptcy Court, which
notice shall constitute appropriate and adequate evidence that this Plan has
become effective, and neither the Reorganized Debtor nor any other party shall
have any other or further obligation to provide notice of the Effective Date.
5.14 Objections to Claims. The Reorganized Debtor may object to or contest
--------------------
the allowance of any Claim on or before May 22, 1998. Objections to Claims
must be filed with the Court and served upon the holder of the Claim at its last
known address. Within thirty (30) days from service of an objection, the holder
of the Claim subject to an objection must file with the Court and serve upon the
objecting party a response to such objection. Failure to file such a response
within the thirty (30) day time period may cause the Court to enter a default
judgment against the non-responding Claimant and thereby grant the relief
requested in the Claim objection.
5.15 Disallowance of Disputed Claims. Notwithstanding anything herein to
-------------------------------
the contrary and subject to section 8 of the Escrow Agreement and section 3.4 of
the Asset Purchase Agreement, at such time as a Disputed Unsecured Claim becomes
an Allowed Claim (in whole or in part) or is disallowed by the Bankruptcy Court,
the Escrow Agent shall deliver to the Disbursing Agent such Sale Proceeds from
the Disputed Claims Reserve having an aggregate value equal to the aggregate
amount of the Allowed Claim and shall disburse to VDC, in the event that VDC is
the Purchaser, sixty (60%) percent of the disallowed portion of the Disputed
Unsecured Claim as a credit or reduction in VDC's liability under the letter of
credit portion of the Escrowed Funds and/or a
-25-
<PAGE>
payment in Cash to VDC, whichever VDC may from time to time elect in writing.
5.16 Modification. The Debtor reserves the right to modify or withdraw the
-------------
Plan in accordance with the Bankruptcy Code. However, modifications to the Plan
after votes have already been solicited may, in certain circumstances, require
the resolicitation of votes on the Plan.
5.17 Securities Laws Exemption. The Asset Sale and transactions
-------------------------
contemplated by the Plan, including, without limitation, VDC's Issuance of the
VDC Shares pursuant to the Asset Purchase Agreement are not subject to section 5
of the Securities Act of 1933, as amended (the "Securities Act"), or any state
or local law requiring registration for offer or sale of a security or
registration or licensing of an issuer, underwriter, broker or dealer, as the
transactions contemplated by the Plan are entitled to the exemptions provided by
section 1145 of the Bankruptcy Code. VDC shall be deemed to be a successor to
the Debtor under the Plan for the sole and limited purpose of acquiring the
Debtor's interest in the MCC Shares and MCC Warrants, and the VDC Shares Issued
to the Debtor and subsequently to creditors and Equity Security Holders shall be
deemed to be in exchange for Claims and Interests. Notwithstanding anything
herein to the contrary, VDC shall not assume or be deemed to assume any
liability or otherwise be held liable for any Claims or any other obligations of
the Debtor.
5.18 Conditions Precedent. The effectiveness of the Plan and the
--------------------
transactions contemplated herein are specifically conditioned upon the entry of
a Confirmation Order (provided it shall become a Final Order) in form and
substance satisfactory to the Debtor, VDC, and the Committee, which Confirmation
Order shall, inter alia, authorize the Issuance, offer or sale of securities,
----- ----
subject to the exemption set forth in section 1145 of the Code, and the payment
and delivery of the Sale Proceeds as provided in the Asset Purchase Agreement.
Distribution of the VDC
-26-
<PAGE>
Shares to Creditors or Equity Security Holders shall be conditioned upon each
such recipient's execution of an agreement consistent with section 7.6 of the
Asset Purchase Agreement in form and in substance reasonably satisfactory to VDC
and its counsel or other procedure acceptable to VDC giving effect to sections
7.6 and 7.7 of the Asset Purchase Agreement.
ARTICLE VI
----------
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
-----------------------------------------------------
Any pre-petition executory contract or unexpired lease to which the Debtor
is a party, as reflected on Bankruptcy Schedule "G", which has not been
previously assumed or rejected, or is not the subject of a motion to assume
which is pending as of the Confirmation Date, is hereby rejected as of the
Confirmation Date. Any Proof of Claim for damages arising from any rejection of
an executory contract or unexpired lease must be filed on or before thirty (30)
days from the date on which such rejection has occurred or is deemed to have
occurred (unless governed by a more specific Order of the Bankruptcy Court) and
shall be classified as a Class 5 Claim. Failure to file such Proof of Claim in
a timely fashion will result in its disallowance, and the holder thereof will
not receive any distribution. If any such Claim is disputed, treatment and
participation in the Plan shall be accorded after allowance, pursuant to the
provisions of Article VII.
-27-
<PAGE>
ARTICLE VII
-----------
DISPUTED CLAIMS AND
SEGREGATION OF RESERVES THEREFOR
--------------------------------
7.1 Treatment of Disputed Claims and Interests. Notwithstanding any other
-------------------------------------------
provision of this Plan to the contrary, as described in section 5.10 hereof, any
Claim or Interest which is listed in the Bankruptcy Schedules as disputed,
contingent, unliquidated or which was objected to in whole or in part on or
before May 22, 1998 (except with respect to Claims filed after the Bar Date),
or proof of which is filed in an amount or priority greater than the Bankruptcy
Schedules, shall receive distribution under the Plan only after such Claim or
Interest has become an Allowed Claim or Allowed Interest by a Final Order, or as
agreed by a stipulation of settlement approved by the Bankruptcy Court. Upon
the entry of a Final Order, or the approval of a stipulation of settlement, the
holder of such Allowed Claim or Allowed Interest shall receive distribution
under the Plan (without interest except as provided in the Plan) in accordance
with the terms of this Plan as if there had been no objection thereto.
7.2 Establishment of Disputed Claims Reserve. With respect to Disputed
-----------------------------------------
Unsecured Claims, or any portion thereof, Sale Proceeds sufficient to satisfy
the Disputed Unsecured Claims as scheduled or asserted in a proof of claim
(whichever amount is higher) shall be set aside and segregated pending the
determination of the objection. The Sale Proceeds which are not so segregated
shall be distributed in accordance with the provisions of Article III of the
Plan, subject to the provisions of section 5.11 hereof. If an objection is
overruled or resolved favorably to the party asserting such Claim, the amount of
the Allowed Claim of such party shall be paid to such party in accordance with
Article III of the Plan. At such time as all Disputed Unsecured Claims
-28-
<PAGE>
either become Allowed Claims or are disallowed by a Final Order of the
Bankruptcy Court or other court of competent jurisdiction, the remaining Sale
Proceeds in the Disputed Claims Reserve shall be distributed pursuant to section
5.12 above. The Disputed Claims Reserve shall be established and funded with
prior notice to the Committee and its counsel, subject to the Committee's right
to assert objections to the amount thereof.
-29-
<PAGE>
ARTICLE VIII
------------
RETENTION AND ENFORCEMENT
OF CLAIMS AND CAUSES OF ACTION
BELONGING TO THE DEBTOR OR TO THE ESTATE
----------------------------------------
Claims, if any, for the avoidance of transfers of property as a lien
creditor or bona fide purchaser pursuant to section 544 or other applicable law,
the avoidance and recovery of preferential transfers pursuant to section 547 of
the Code or other applicable law, all fraudulent transfer Claims pursuant to
section 548 of the Code, all Claims relating to post-petition transactions under
section 549 of the Code, all Claims recoverable under section 550 of the Code,
all Claims against a third party on account of an indebtedness, any other Claims
owed to or in favor of the Debtor, of any character whatsoever, and the
determination of all causes of action, controversies, conflicts, questions and
disputes, whether or not subject to an action pending as of the Confirmation
Date, between the Debtor or the Reorganized Debtor and any other party, are
hereby preserved and transferred exclusively to the Disbursing Agent for the
benefit of Allowed Class 5 Claims (to the extent not fully satisfied hereunder)
and Class 6 Interests as of the Effective Date.
ARTICLE IX
----------
EFFECT OF CONFIRMATION
----------------------
9.1 Terms Binding. On the Confirmation Date, all provisions of this Plan
-------------
shall be binding upon the Debtor, the Reorganized Debtor, all holders of Claims
and Interests, and all other entities who are affected in any manner by the
Plan.
9.2 Revesting. Except as otherwise expressly provided in this Plan, as of
---------
the Effective Date, the Reorganized Debtor shall be vested with title to all
remaining interests, property and assets of any kind whatsoever, including
causes of action, net operating losses or carry-forwards of the
-30-
<PAGE>
Debtor's estate, free and clear of all claims, liens, charges and other interest
of Creditors or holders of Interests arising prior to the Filing Date.
9.3 Automatic Stay. The automatic stay arising under section 362 of the
--------------
Code shall remain in effect until the Plan has been fully consummated, except as
otherwise specifically modified, terminated or annulled prior to the Effective
Date.
9.4 Exculpation. The Debtor, the Committee, and their respective members,
------------
officers, directors, employees, or agents (including the professionals and any
other professionals retained by such persons and/or entities), shall have no
liability to any holder of the claim or interest for any act or omission in
connection with, or arising out of the formulation of the Plan, the pursuit of
approval of the Disclosure Statement for the Plan or the solicitation of votes
for or confirmation of the Plan, the consummation of the Plan, or the
administration of the Plan, or the property to be distributed under the Plan,
except for willful misconduct or gross negligence and in all respects, shall be
entitled to reply upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
ARTICLE X
---------
RETENTION OF JURISDICTION
-------------------------
10.1 The Bankruptcy Court shall retain jurisdiction under this Plan until
the Plan is fully consummated and the Case is closed, for all purposes,
including the hearing of all causes of action over which the Bankruptcy Court
may have jurisdiction, the approval of professional fees incurred prior to the
Confirmation Date, and any and all other purposes necessary and proper for
consummation of this Plan. The Bankruptcy Court shall hear and determine all
contested matters to be submitted to it pursuant to the express provisions of
this Plan. The Bankruptcy Court's retention
-31-
<PAGE>
of jurisdiction until the Plan has been fully consummated shall include, but not
be limited to, the following purposes:
10.2 Classification of the Claim of any Creditor, reexamination of Claims
which have been allowed for purposes of voting, and determination of objections
to any Claim. The failure of the Debtor to object to any Claim for the purpose
of voting shall not be deemed to be a waiver of the Debtor's right to object to
such Claim in whole or in part.
10.3 Determination of all questions and disputes regarding all assets of
the estate and determination of all causes of action, controversies, disputes or
conflicts involving the Debtor and its assets, whether or not subject to any
action pending as of the Confirmation Date, between the Debtor and any other
party.
10.4 Correction of any defect, curing of any omission, or reconciliation
of any inconsistency in the Plan or Confirmation Order as may be necessary to
carry out the purposes and intent of the Plan.
10.5 Modification of the Plan after Confirmation pursuant to the
Bankruptcy Rules and the Code.
10.6 Enforcement and interpretation of this Plan.
10.7 Liquidation or estimation of damages or determination of the manner
and time for such liquidation or estimation in connection with any contingent or
unliquidated Claim.
10.8 Entry of such orders as are necessary or appropriate to carry out the
provisions of this Plan.
10.9 To determine any and all pending applications for the assumption or
rejection of executory contracts or unexpired leases to which the Debtor is a
party or with respect to which it
-32-
<PAGE>
may be liable, and to hear and determine and, if need be, to liquidate any and
all Claims arising therefrom.
10.10 To determine any and all applications, motions, adversary
proceedings and contested matters, whether pending before the Court on the
Confirmation Date or filed or instituted after the Confirmation Date, provided
such actions are otherwise initiated in accordance with the terms of this Plan,
which actions shall include, without limitation, proceedings to collect accounts
receivable or recover voidable transfers under the Code or other applicable law.
10.11 Entry of any order, including injunctions, necessary to enforce the
title, rights, and powers of the Debtor, creditors or other parties in interest
and to impose such limitations, restrictions, terms and conditions of such
title, rights, and powers as the Bankruptcy Court may deem necessary.
10.12 Entry of orders approving any requests for professional compensation
for services rendered or expenses incurred prior to or after the Effective Date.
10.13 Determination of any issue, violation, injunction, contempt, relief,
or other proceeding as contemplated under the Code.
10.14 Entry of any order, including a Final Order closing this Case.
10.15 Determination of the allowance of any contingent or unliquidated
Claim for reimbursement or contribution of any entity that is liable with the
Debtor.
10.16 Determination of the allowance of professional fees and expenses
incurred or arising after the Confirmation Date to the extent of any dispute.
10.17 Determination of any issue affecting or relating to the exemption
provided under section 1145 of the Bankruptcy Code as applied to the Plan or the
Asset Sale.
-33-
<PAGE>
10.18 The entry and enforcement of such orders, injunctions and stays to
implement the Plan and the transactions contemplated herein.
ARTICLE XI
----------
MISCELLANEOUS PROVISIONS
------------------------
11.1 After Confirmation, the Reorganized Debtor may, with approval of the
Bankruptcy Court, and so long as it does not materially or adversely affect the
interests of Creditors, remedy any defect or omission, or reconcile any
inconsistencies in the Plan or in the Confirmation Order in such manner as may
be necessary to carry out the purpose and intent of this Plan.
11.2 Except as otherwise provided in the Plan, all Creditors holding
Unsecured Claims of any kind and all holders of Interests shall waive any and
all interest, late charges, penalties, attorneys' fees, court costs, and any
other charges of any kind.
11.3 The transfer of any Assets during the pendency of this Case or after
the Confirmation Date which constitutes a transfer under this Plan within the
purview of section 1146(c) of the Code shall not be subject to stamp or similar
taxes under any law.
11.4 After the Confirmation Date, the Reorganized Debtor shall not be
required to submit to the United States Trustee monthly operating reports.
11.5 All quarterly fees due and owing to the United States Trustee under
28 U.S.C. (S)1930 shall be paid pursuant to this Plan until an order closing the
Case is entered.
11.6 Any and all claims which are listed in the Bankruptcy Schedules as
disputed, contingent or unliquidated, and for which no proper or timely Proof of
Claim has been filed prior to the Bar Date, shall be deemed disallowed.
-34-
<PAGE>
11.7 Except to the extent that the Code is applicable, the rights and
obligations arising under the Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of Delaware.
11.8 In the event and to the extent that any provision of the Plan is
inconsistent with the provisions of the Disclosure Statement filed by the Debtor
pursuant to section 1125 of the
[Intentionally Left Blank]
-35-
<PAGE>
Code, the provisions of the Plan shall control and take precedence.
Dated: July 24, 1998 WALSH AND MONZACK, P.A.
By: /s/ Francis A. Monaco
------------------------------------------
Francis A. Monaco, Jr., Esquire (No. 2078)
Joseph J. Bodnar, Esquire (No. 2512)
400 Commerce Center
Twelfth and Orange Streets
P.O. Box 2031
Wilmington, DE 19899
(302) 656-8162
- and -
Jeffrey Kurtzman, Esquire
KLEHR, HARRISON, HARVEY,
BRANZBURG & ELLERS LLP
1401 Walnut Street
Philadelphia, PA 19102
(215) 568-6060
Attorneys for Debtor and
Debtor-in-Possession
PORTACOM WIRELESS, INC.
By: /s/ Michael A. Richard
------------------------------------------
Michael Richard, Chief Executive Officer
-36-
<PAGE>
Exhibit 99
----------
Debtor: PORTACOM WIRELESS, INC. ACCRUAL BASIS- 2
A DELAWARE CORPORATION
Case Number: 98-00661PJW Third Quarter
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Assets MONTH MONTH MONTH
- ------------------------------------------------------------------------------------------------
July 98 August 98
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Cash 44,174.23 46,696.53
- ------------------------------------------------------------------------------------------------
5. Prepaid Expenses 1,404.00 1,404.00
- ------------------------------------------------------------------------------------------------
6. Other (Attach List) See Attachment 2a 2,624,300.00 2,606,300.00
- ------------------------------------------------------------------------------------------------
7. Total Current Assets 2,669,878.23 2,657,400.53
- ------------------------------------------------------------------------------------------------
8. Property, Plant & Equipment 11,339.10 11,339.10
- ------------------------------------------------------------------------------------------------
9. Less: Accumulated Depreciation/Depletion 7,077.34 7,351.47
- ------------------------------------------------------------------------------------------------
10. Net Property, Plant & Equipment 4,261.76 3,987.63
- ------------------------------------------------------------------------------------------------
13. Other (Attach List) See Attachment 2b 5,318,000.00 5,318,000.00
- ------------------------------------------------------------------------------------------------
14. Total Assets 7,992,139.99 7,979,388.16
- ------------------------------------------------------------------------------------------------
Postpetition Liabilities
- ------------------------------------------------------------------------------------------------
15. Accounts Payable 0.00 3,342.08
- ------------------------------------------------------------------------------------------------
18. Professional Fees 263,050.35 293,810.12
- ------------------------------------------------------------------------------------------------
19. Secured Debt 18,295.00 18,295.00
- ------------------------------------------------------------------------------------------------
20. Due to Affiliates & Insiders 6,000.00 6,000.00
- ------------------------------------------------------------------------------------------------
21. Other Allowed Claims Escrow Liability 41,412.00 41,412.00
- ------------------------------------------------------------------------------------------------
22. Total Postpetition Liabilities 328,757.35 362,859.20
- ------------------------------------------------------------------------------------------------
Prepetition Liabilities
- ------------------------------------------------------------------------------------------------
23. Secured Debt 371,758.06 371,758.06
- ------------------------------------------------------------------------------------------------
24. Priority Debt 10,202.64 10,202.64
- ------------------------------------------------------------------------------------------------
25. Unsecured Debt 3,490,914.94 3,490,914.94
- ------------------------------------------------------------------------------------------------
26. Other (Attach List) Reserve for contingency 153,604.07 153,604.07
- ------------------------------------------------------------------------------------------------
27. Total Prepetition Liabilities 4,026,479.71 4,026,479.71
- ------------------------------------------------------------------------------------------------
28. Total Liabilities 4,355,237.06 4,389,338.91
- ------------------------------------------------------------------------------------------------
Equity
- ------------------------------------------------------------------------------------------------
29. Owner's Prepetition Equity. See Attachment 2c 3,999,599.08 3,999,599.08
- ------------------------------------------------------------------------------------------------
30. Postpetition Cumulative Profit or (Loss) (362,696.15) (409,549.83)
- ------------------------------------------------------------------------------------------------
31. Total Equity (Deficit) 3,636,902.93 3,590,049.25
- ------------------------------------------------------------------------------------------------
32. Total Liabilities & Owners' Equity 7,992,139.99 7,979,388.16
- ------------------------------------------------------------------------------------------------
</TABLE>
-37-
<PAGE>
PortaCom Wireless, Inc. Debtor In Possession Case 98-661 (PJW)
Attachment 2a
Detail of Line 6 -- Other Current Asset
August, 1998
<TABLE>
<S> <C>
Cash Received from VDC Corporation, Ltd. as portion of $2,682,000.00
purchase price for 2,000,000 shares and warrants to
purchase an additional 4,000,000 shares of Metromedia
China Corporation common stock. Cash is held in an
escrow account for the benefit of the Debtor.
Less: Cash Withdrawn from escrow and deposited in
DIP Cash Account #15818-28175
June, 1998 (45,600.00)
July, 1998 (12,100.00)
August, 1998 (18,000.00)
-------------
Total line 6 $2,606,300.00
=============
</TABLE>
<PAGE>
PortaCom Wireless, Inc. Debtor In Possession Case 98-661 (PJW)
Attachment 2b
Detail of Line 13 -- Other Assets, Non-current
August, 1998
<TABLE>
<S> <C>
Investment in VDC Corporation, Ltd. (see Note 1) $ 8,000,000.00
Allowance for reduction in shares resulting from (2,682,000.00)
payment of allowed claims from cash escrow funds
--------------
Total line 13 $ 5,318,000.00
==============
</TABLE>
Note 1
As of June 8, 1998, PortaCom Wireless, Inc. (the "Debtor") consummated the
sale to VDC Corporation, Ltd. ("VDC") of 2,000,000 shares of common stock and
warrants to acquire, at an exercise price of $4.00 per share, an additional
4,000,000 shares of common stock of Metromedia China Corporation (formerly
Metromedia Asia Corporation). In consideration for the sale of such assets and
subject to certain adjustment features, the Debtor received a pool of 5,300,000
shares of VDC common stock and the right to utilize a maximum of $3,000,000 in
cash to satisfy claims made against the Debtor in connection with Debtor's Plan
of Reorganization (the "Plan") filed in its Chapter 11 bankruptcy case in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"), Case No. 98-661 (PJW). To the extent that more than $384,725 of the
cash is used by PortaCom to satisfy claims made in connection with the Plan, the
excess thereof will result in the Debtor returning to VDC a certain number of
shares of VDC common stock according to a predetermined formula. The final
amounts of the cash and VDC common stock received will be determined by the
Debtor, its creditors and the Bankruptcy Court. The Plan remains subject to,
among other things, the approval of impaired creditors and stockholders and
confirmation by the Bankruptcy Court.
Generally accepted accounting principles require the Debtor to record its
investment in VDC common stock using the equity method. The use of the equity
method for the purposes of this Monthly Operating Report was not possible
because financial statements of VDC as of June 30, 1998 were not available as of
the date this report was required to be filed with the Bankruptcy Court.
Accordingly, the accounts have not been adjusted to reflect any difference
between the value of the investment in VDC common stock which the Debtor now
holds and the value of the investment in Metromedia China Corporation common
stock which the Debtor held prior to the consummation of the sale to VDC.
<PAGE>
PortaCom Wireless, Inc. Debtor In Possession Case 98-661 (PJW)
Attachment 2c
Detail of Line 29 -- Owner's Prepetition Equity
August, 1998
<TABLE>
<S> <C>
Common Stock -- Par Value $ 13,576.00
Additional Paid In Capital 18,319,550.68
Accumulated Deficit -- Prepetition (1,952,946.18)
Due From Non-Operating Wholly Owned Subsidiaries (12,380,581.42)
---------------
Total line 29 $ 3,999,599.08
===============
</TABLE>
