<PAGE> 1
- -------------------------------------------------------------------------------
UNITED STATES
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
March 15, 1999
- -------------------------------------------------------------------------------
Date of Report (Date of earliest event reported)
Heartland Wireless Communications, Inc.
- -------------------------------------------------------------------------------
(Exact Name of registrant as specified in its charter)
Delaware 0-23695 73-1435149
- -------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
200 Chisholm Place, Suite 200, Plano, Texas 75075
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(972) 423-9494
- -------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- -------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
- -------------------------------------------------------------------------------
<PAGE> 2
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On December 4, 1998 (the "Petition Date"), Heartland Wireless
Communications, Inc. (the "Company") filed a voluntary petition for
reorganization (the "Petition") under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
(the "Bankruptcy Court") for the District of Delaware (In re Heartland Wireless
Communications, Inc., Case No. 98-2692 (JJF)). The Company filed the Petition
after having received the agreement of the holders of over 70% in aggregate
principal amount of the Company's 13% and 14% senior notes to support a
proposed plan of reorganization (the "Plan") filed therewith.
On January 19, 1999 (the "Adequacy Hearing Date"), the Bankruptcy
Court entered an Order (i) approving the Company's disclosure statement, form
of ballots and proposed solicitation and tabulation procedures, (ii) fixing the
date, time and place for voting on the Plan, (iii) fixing the date, time and
place for a hearing to consider confirmation of the Plan and (iv) prescribing
the form and manner of notice thereof.
After the Adequacy Hearing Date, the Company disseminated, in
accordance with Section 1125 of the Bankruptcy Code, the Plan, Disclosure
Statement and related voting materials to those impaired creditors entitled to
receive distributions under the Plan, and solicited their votes to accept the
Plan. The Plan was approved by all classes of creditors voting on the Plan, in
accordance with Section 1126 of the Bankruptcy Code. On March 15, 1999, the
Bankruptcy Court entered an Order Confirming Debtor's Plan of Reorganization
Under Chapter 11 of the Bankruptcy Code.
SUMMARY OF THE MATERIAL FEATURES OF THE PLAN
The Plan provides for various recoveries to certain classes of claims.
Recoveries for classes of prepetition claims are summarized in the following
section. The following is only a summary of the classification and treatment of
Claims and Equity Interests under the Plan. Reference should be made to the
Plan for a complete description of the classification and treatment of Claims
and Equity Interests. Capitalized terms used in this Current Report on Form 8-K
and not otherwise defined herein have the same meaning as in the Plan. A copy
of the Plan, as confirmed by the Bankruptcy Court on March 15, 1999, is filed
as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
2
<PAGE> 3
SUMMARY OF CLASSIFICATION AND TREATMENT
OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN
<TABLE>
<CAPTION>
Type of Claim or Estimated
Class Equity Interest Treatment Recovery
----- ----------------------------- ------------------------------------ ---------
<S> <C> <C> <C> <C>
-- Administrative Expense Claims Paid in full, in Cash, or in 100%
accordance with the terms and
conditions of transactions or
agreements relating to obligations
incurred in the ordinary course of
business during the pendency of the
Chapter 11 Case or assumed by the
Debtor in Possession.
-- Priority Tax Claims Reorganized Heartland shall pay to 100%
each holder of an Allowed Priority Tax
Claim that is due and payable on or
before the Effective Date Cash in an
amount equal to such Allowed Priority
Tax Claim. All Allowed Priority Tax
Claims which are not due and payable
on or before the Effective Date shall
be paid in the ordinary course of
business in accordance with the terms
thereof.
1 Priority Non-Tax Claims Unimpaired; each Allowed Priority 100%
(to be paid in the ordinary Non-Tax Claim shall be unimpaired in
course of business) accordance with section 1124 of the
Bankruptcy Code. All Allowed
Priority Non-Tax Claims which are
not due and payable on or before the
Effective Date shall be paid in the
ordinary course of business in
accordance with the terms thereof.
Unimpaired; reinstated or rendered 100%
2 Secured Claims unimpaired in accordance with
(estimated at section 1124 of the Bankruptcy Code,
$-0-; to be paid in the notwithstanding any contractual
ordinary course of business) provision or applicable
nonbankruptcy law that entitles the
holder of an Allowed Secured Claim
to demand or receive payment of such
Allowed Secured Claim prior to the
stated maturity of such Claim from
and after the occurrence of a
default. All Allowed Secured Claims
which are not due and payable on or
before the Effective Date shall be
paid in the ordinary course of
business in accordance with the
terms thereof.
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C> <C> <C> <C>
3 Old Senior Note Claims and Impaired; each holder of an Allowed 52.2%
Miscellaneous Unsecured Old Senior Note Claim shall receive,
Claims (Old Senior Note in full satisfaction of such Allowed
Claims estimated at $268.0 Claim, its Ratable Proportion of
million; Miscellaneous 9,700,000 shares of New Common Stock
Unsecured Claims--Disputed) representing 97.0% of the initial
shares of New Common Stock), subject
to dilution by the exercise of the New
Warrants, Incentive Options and, if
holders of Miscellaneous Unsecured Claims
are entitled to receive shares of New Common
Stock, by any such shares issued to such
holders. Each holder of an Allowed
Miscellaneous Unsecured Claim shall receive,
in full satisfaction of such Allowed Claim,
New Common Stock in an amount that will
provide the holder of such Claim the
equivalent number of shares of New Common
Stock per dollar of Allowed Claim which
such holder would receive if such Allowed
Claim were an Old Senior Note Claim.
4 Old Convertible Note Claims Impaired; each holder of an Allowed 16.8%
(estimated at Old Convertible Note Claim shall
$57.1 million) receive, in full satisfaction of
such Allowed Claim, its Ratable
Proportion of (i) 300,000 shares of
New Common Stock (representing 3.0%
of the initial shares of New Common
Stock), subject to dilution by the
exercise of the New Warrants,
Incentive Options and, if holders of
Miscellaneous Unsecured Claims are
entitled to receive shares of New
Common Stock, by any such shares
issued to such holders and (ii)
825,000 New Warrants.
5 Trade Claims (to be paid in Unimpaired; each Allowed Trade Claim 100%
the ordinary course of shall be unimpaired in accordance
business) with section 1124 of the Bankruptcy
Code. All Allowed Trade Claims which
are not due and payable on or before
the Effective Date shall be paid in
the ordinary course of business in
accordance with the terms thereof.
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C> <C> <C> <C>
6 Indemnity Claims (Disputed) Impaired; If Class 6 accepts the N/A
Plan, following the Effective Date,
holders of Indemnity Claims will be
entitled to assert such Claims
against the Debtor to the extent of
(i) any available coverage under the
Debtor's corporate liability
insurance and (ii) any self-insured
retention under such corporate
liability insurance. If Class 6
rejects the Plan, the Debtor will
request the Bankruptcy Court to
estimate the Indemnity Claims at
zero. If the Indemnity Claims are
estimated at more than zero, such
amount, to the extent such amount
exceeds the amount of any corporate
liability insurance (including any
self-insured retention under such
insurance) available to satisfy its
Claim, (taking into account such
insurance or self-insured retention
available to Persons covered by
Section 11.5 of the Plan), shall be
treated as a Miscellaneous Unsecured
Claim under Class 3 of the Plan.
7 Bondholder Litigation Claims Impaired; The Debtor will request N/A
(Disputed) the Bankruptcy Court to estimate the
Bondholder Litigation Claims at
zero. If the Bondholder Litigation
Claims are estimated at more than
zero, each holder of an Allowed
Bondholder Litigation Claim shall
receive, in full satisfaction of
such Allowed Bondholder Litigation
Claim, its Ratable Proportion of any
liability insurance available to
satisfy its Claim remaining after
use of such insurance for Allowed
Indemnity Claims and Persons covered
by section 11.5 of the Plan, not to
exceed the Allowed Amount of its
Claim, and if liability insurance is
insufficient to satisfy such Claim
in full, its Ratable Proportion of
up to 275,000 New Warrants but not
in excess of the number of New
Warrants the value of which is
sufficient to satisfy such Claim for
purposes of section 1129(b)(2)(B)(i)
of the Bankruptcy Code.
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C> <C> <C> <C>
8 Stockholder Litigation Impaired; The Debtor will request N/A
Claims (Disputed) the Bankruptcy Court to estimate the
Stockholder Litigation Claims at
zero. If the Stockholder Litigation
Claims are estimated at more than
zero, each holder of an Allowed
Stockholder Litigation Claim shall
receive, in full satisfaction of
such Allowed Stockholder Litigation
Claim, its Ratable Proportion of any
liability insurance available to
satisfy its Claim remaining after
use of such insurance for Allowed
Indemnity Claims, Persons covered by
Section 11.5 of the Plan and Allowed
Bondholder Litigation Claims, not to
exceed the Allowed Amount of its
Claim, and if liability insurance is
insufficient to satisfy such Claim
in full, its Ratable Proportion of
the Stockholder Litigation Claims
Portion of the Equity Distribution
Pool.
9 Equity Interests Impaired; The Equity Interests shall $-0- to $0.08
be cancelled and each holder of an per share
Allowed Equity Interest will receive a
Ratable Portion of the Old Equity
Portion of the Equity Distribution
Pool.
</TABLE>
On April 1, 1999 (the "Effective Date"), the Company will consummate
the Plan. As of the Effective Date, pursuant to the terms of the Plan, the
Company will issue a total of 10,000,000 shares of New Common Stock to holders
of Old Senior Note Claims (9,700,000 shares) and Old Convertible Note Claims
(300,000 shares). Pursuant to the Company's Amended and Restated Certificate of
Incorporation, which the Company will file with the Secretary of State of
Delaware on the Effective Date, the Company's authorized capital stock as of
the Effective Date will be 30,000,000 million shares of New Common Stock and
15,000,000 shares of preferred stock, par value $.001 per share.
The Plan also provides for the issuance of New Common Stock to holders
of Allowed Miscellaneous Unsecured Claims (including Indemnity Claims) in an
amount that will provide the holder of such Claim the equivalent number of
shares of New Common Stock per dollar of Allowed Claim that such holder would
receive if such Allowed Claim were an Old Senior Note Claim. The Company has
not reserved a specific number of shares of Common Stock for future issuance in
respect of Allowed Miscellaneous Unsecured Claims (including Indemnity Claims),
but expects to satisfy future Allowed Miscellaneous Unsecured Claims (including
Indemnity Claims), if any, out of authorized and unissued New Common Stock.
6
<PAGE> 7
As of December 31, 1998, the Company's books and records reflected
assets totaling approximately $186,000,000 and liabilities of approximately
$337,000,000 (including liabilities subject to compromise pursuant to the terms
of the Plan).
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Document Description
---------- --------------------
<S> <C>
2.1 Plan of Reorganization, as confirmed by the United
States Bankruptcy Court for the District of Delaware
on March 15, 1999.
</TABLE>
7
<PAGE> 8
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Current Report to be signed on its behalf
by the undersigned hereunto duly authorized.
HEARTLAND WIRELESS COMMUNICATIONS, INC.
Dated:
March 30, 1999 By: /s/ J. Curtis Henderson
--------------------------------------------------
J. Curtis Henderson
Senior Vice President and General Counsel
8
<PAGE> 9
INDEX TO EXHIBIT
<TABLE>
<CAPTION>
Exhibit No.
----------
<S> <C>
2.1 Plan of Reorganization, as confirmed by the United
States Bankruptcy Court for the District of Delaware
on March 15, 1999.
</TABLE>
<PAGE> 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- -------------------------------------
:
In re: :
: CHAPTER 11
HEARTLAND WIRELESS COMMUNICATIONS, :
INC., a Delaware Corporation, : Case No. 98-2692 (JJF)
:
Debtor. :
:
- -------------------------------------
DEBTOR'S PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
WEIL, GOTSHAL & MANGES LLP RICHARDS, LAYTON & FINGER, P.A.
Co-Attorneys for Heartland Co-Attorneys for Heartland
Wireless Communications, Inc. Wireless Communications, Inc.
100 Crescent Court, Suite 1300 One Rodney Square
Dallas, Texas 75201 P.O. Box 551
(214) 746-7700 Wilmington, Delaware 19899
(302) 658-6541
Dated: Wilmington, Delaware
January 19, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1. DEFINITIONS AND INTERPRETATION.......................................................................1
A. Definitions.............................................................................................1
B. Interpretation; Application Of Definitions And Rules Of Construction....................................7
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS......................8
2.1 Administrative Expense Claims..................................................................8
2.2 Priority Tax Claims............................................................................8
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS........................................................8
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS..............................................9
4.1 Priority Non-Tax Claims (Class 1)..............................................................9
4.2 Secured Claims (Class 2).......................................................................9
4.3 Old Senior Note Claims and Miscellaneous Unsecured Claims (Class 3)............................9
4.4 Old Convertible Note Claims (Class 4)..........................................................9
4.5 Trade Claims (Class 5)........................................................................10
4.6 Indemnity Claims (Class 6)....................................................................10
4.7 Bondholder Litigation Claims (Class 7)........................................................10
4.8 Stockholder Litigation Claims (Class 8).......................................................10
4.9 Equity Interests (Class 9)....................................................................11
4.10 Alternative Treatment for Holders of Allowed Claims...........................................11
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS IMPAIRED; ACCEPTANCE OR REJECTION OF THE PLAN.....11
5.1 Holders of Claims and Equity Interests Entitled to Vote.......................................11
SECTION 6. MEANS OF IMPLEMENTATION.............................................................................11
6.1 Distributions.................................................................................11
6.2 Authorization of New Securities...............................................................12
6.3 New Warrant Agreement.........................................................................12
6.4 Adoption of Stock Option Plan.................................................................12
6.5 Incentive Options on the Effective Date.......................................................12
6.6 Cancellation of Existing Securities and Agreements............................................12
6.7 Corporate Action..............................................................................12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
6.8 Amended Certificate of Incorporation..........................................................13
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS..................................................................13
7.1 Date of Distributions.........................................................................13
7.2 Disbursing Agent..............................................................................13
7.3 Surrender of Instruments......................................................................13
7.4 Compensation of Professionals.................................................................14
7.5 Delivery of Distributions.....................................................................14
7.6 Manner of Payment Under the Plan..............................................................14
7.7 Fractional Shares.............................................................................15
7.8 Setoffs and Recoupment........................................................................15
7.9 Distributions After Effective Date............................................................15
7.10 Rights and Powers of Disbursing Agent.........................................................15
7.11 Exculpation...................................................................................15
7.12 Allocation Relating to Old Senior Notes and Old Convertible Notes.............................16
7.13 Voluntary Cancellation of Equity Interests; Return of New Common Stock and New Warrants.......16
SECTION 8. PROCEDURES FOR TREATING DISPUTED CLAIMS UNDER THE PLAN..............................................16
8.1 Disputed Claims...............................................................................16
8.2 No Distributions Pending Allowance............................................................17
8.3 Distributions After Allowance.................................................................17
8.4 Voting Rights of Holders of Disputed Claims...................................................17
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED LEASES.......................................18
9.1 Assumption or Rejection of Contracts and Leases...............................................18
9.2 Amendments to Schedule; Effect of Amendments..................................................18
9.3 Bar to Rejection Damage Claims................................................................18
9.4 Indemnification Obligations...................................................................19
SECTION 10. CONDITIONS PRECEDENT TO EFFECTIVE DATE..............................................................19
10.1 Conditions Precedent to Effective Date of the Plan............................................19
10.2 Waiver of Conditions Precedent................................................................20
SECTION 11. EFFECT OF CONFIRMATION..............................................................................20
11.1 Vesting of Assets.............................................................................20
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
11.2 Binding Effect................................................................................20
11.3 Discharge of Debtor...........................................................................20
11.4 Term of Injunctions or Stays..................................................................21
11.5 Indemnification Obligations...................................................................21
11.6 Limited Release...............................................................................21
SECTION 12. WAIVER OF CLAIMS....................................................................................21
12.1 Avoidance Actions.............................................................................21
SECTION 13. RETENTION OF JURISDICTION...........................................................................22
SECTION 14. MISCELLANEOUS PROVISIONS............................................................................23
14.1 Payment of Statutory Fees.....................................................................23
14.2 Retiree Benefits..............................................................................23
14.3 Administrative Expenses Incurred After the Confirmation Date..................................23
14.4 Section 1125(e) of the Bankruptcy Code........................................................23
14.5 Compliance with Tax Requirements..............................................................24
14.6 Severability of Plan Provisions...............................................................24
14.7 Notices.......................................................................................24
14.8 Governing Law.................................................................................25
14.9 Binding Effect................................................................................25
</TABLE>
iii
<PAGE> 5
EXHIBITS TO THE PLAN
Exhibit 1 -- Charter
Exhibit 2 -- New Warrant Agreement
Exhibit 3 -- Registration Rights Agreement
Exhibit 4 -- Stock Option Plan
iv
<PAGE> 6
DEBTOR'S PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Heartland Wireless Communications, Inc. proposes the following Plan of
Reorganization, Under Chapter 11 of the Bankruptcy Code, dated as of January 19,
1999, pursuant to section 1121(a) of the Bankruptcy Code:
SECTION 1. DEFINITIONS AND INTERPRETATION
A. DEFINITIONS.
The following terms herein shall have the respective meanings defined
below:
1.1 Ad Hoc Committee means the unofficial committee of certain holders
of Old Senior Notes, the members of which consist of, as of the date hereof,
Aspen Partners, L.P., Condor Partners IV L.L.C.; The Mainstay Funds, on behalf
of its High Yield Corporate Bond Fund Series; Quad-C, Inc.; and Quaker Capital
Management Corp.
1.2 Administrative Expense Claim means any right to payment
constituting a cost or expense of administration of the Chapter 11 Case allowed
under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without
limitation, (a) any actual and necessary costs and expenses of preserving the
Debtor's estate, (b) any actual and necessary costs and expenses of operating
the Debtor's business in the ordinary course of business, (c) any indebtedness
or obligations incurred or assumed by the Debtor in Possession during the
Chapter 11 Case in the ordinary course of business, (d) any allowances of
compensation and reimbursement of expenses to the extent allowed by Final Order
under section 330 or 503 of the Bankruptcy Code, and (e) any fees or charges
assessed against the Debtor's estate under section 1930, title 28, United States
Code.
1.3 Allowed means, with reference to any Claim or Equity Interest, (a)
any Claim or Equity Interest as to which no objection to allowance has been
interposed on or before the Confirmation Date or such other applicable period of
limitation fixed by the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy
Court, or as to which any objection has been determined by a Final Order to the
extent such objection is determined in favor of the respective holder, (b) any
Claim or Equity Interest as to which the liability of the Debtor and the amount
thereof are determined by final order of a court of competent jurisdiction other
than the Bankruptcy Court or (c) any Claim or Equity Interest expressly allowed
hereunder. Unless otherwise specified in the Plan or in a Final Order of the
Bankruptcy Court allowing such claim, "Allowed" in reference to a Claim shall
not include (a) interest on the amount of such Claim accruing from and after the
Petition Date, (b) punitive or exemplary damages or (c) any fine, penalty or
forfeiture.
1.4 Bankruptcy Code means title 11, United States Code, as amended from
time to time, as applicable to the Chapter 11 Case.
1
<PAGE> 7
1.5 Bankruptcy Court means the United States District Court for the
District of Delaware having jurisdiction over the Chapter 11 Case and, to the
extent of any reference made under section 157, title 28, United States Code,
the unit of such District Court having jurisdiction over the Chapter 11 Case
under section 151, title 28, United States Code.
1.6 Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075, title 28,
United States Code, as amended from time to time, applicable to the Chapter 11
Case, and any Local Rules of the Bankruptcy Court.
1.7 Bondholder Litigation Claim means a Claim (a) arising from
rescission of a purchase or sale of a debt security of the Debtor, (b) for
damages arising from the purchase or sale of such a debt security or (c) for
reimbursement or contribution allowed under section 502 of the Bankruptcy Code
on account of a Claim for damages or recision arising out of a purchase or sale
of a debt security of the Debtor.
1.8 Business Day means any day other than a Saturday, a Sunday or any
other day on which banking institutions in New York, New York are required or
authorized to close by law or executive order.
1.9 Cash means legal tender of the United States of America.
1.10 Chapter 11 Case means the Debtor's voluntary case filed with the
Bankruptcy Court under Chapter 11 of the Bankruptcy Code.
1.11 Charter means the Restated Certificate of Incorporation of
Reorganized Heartland, which shall be in substantially the form annexed hereto
as Exhibit 1.
1.12 Claim means (a) any right to payment from the Debtor, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured, known or unknown, or (b) any right to an equitable remedy for
breach of performance if such breach gives rise to a right of payment from the
Debtor, whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured, or
unsecured, known or unknown.
1.13 Class means any group of substantially similar Claims or Equity
Interests classified by the Plan pursuant to section 1129(a)(1) of the
Bankruptcy Code.
1.14 Collateral means any property or interest in property of the
Debtor's estate subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code.
1.15 Confirmation Date means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on its docket.
2
<PAGE> 8
1.16 Confirmation Hearing means the hearing to be held by the
Bankruptcy Court regarding confirmation of the Plan, as such hearing may be
adjourned or continued from time to time.
1.17 Confirmation Order means the order of the Bankruptcy Court
confirming the Plan, which shall be in a form reasonably acceptable to the
Debtor and a Creditors' Committee Majority.
1.18 Creditors' Committee means the statutory committee of unsecured
creditors appointed in the Chapter 11 Case pursuant to section 1102 of the
Bankruptcy Code.
1.19 Creditors' Committee Majority means, at any time, the holders of a
majority in amount of Claims held in the aggregate by the members of the
Creditors' Committee at such time.
1.20 Debtor means Heartland Wireless Communications, Inc., a Delaware
corporation, the debtor in the Chapter 11 Case.
1.21 Debtor in Possession means the Debtor in its capacity as a debtor
in possession in the Chapter 11 Case under sections 1107(a) and 1108 of the
Bankruptcy Code.
1.22 DGCL means the General Corporation Law of the State of Delaware,
as amended from time to time.
1.23 Disallowed means, when used with respect to a Claim or Equity
Interest, a Claim or Equity Interest that has been disallowed by Final Order.
1.24 Disbursing Agent means any entity in its capacity as a disbursing
agent under section 7.2 hereof.
1.25 Disclosure Statement means the disclosure document relating to the
Plan, including, without limitation, all exhibits and schedules thereto as
approved by the Bankruptcy Court pursuant to section 1125 of the Bankruptcy
Code.
1.26 Disputed means, with respect to a Claim or Equity Interest, any
such Claim or Equity Interest proof of which was filed with the Bankruptcy Court
and (a) which has been or hereafter is listed on the Schedules as unliquidated,
disputed or contingent, and which has not been resolved by written agreement of
the parties or an order of the Bankruptcy Court, or (b) as to which the Debtor
or any other party in interest has interposed a timely objection in accordance
with the Bankruptcy Code and the Bankruptcy Rules, which objection has not been
withdrawn or determined by a Final Order. Prior to (i) the time an objection has
been filed and (ii) the expiration of the time within which to object to such
Claim or Equity Interest set forth herein or otherwise established by order of
the Bankruptcy Court, a Claim or Equity Interest shall be considered a Disputed
Claim or Disputed Equity Interest to the extent that the amount of the Claim or
Equity Interest specified in a proof of Claim or Equity Interest exceeds the
amount of the Claim or Equity Interest scheduled by the Debtor as not disputed,
contingent or unliquidated.
3
<PAGE> 9
1.27 Effective Date means the first Business Day on which all the
conditions precedent to the Effective Date specified in section 10.1 hereof
shall have been satisfied or waived as provided in section 10.2 hereof;
provided, however, that if a stay of the Confirmation Order is in effect, the
Effective Date shall be the first Business Day after such stay is no longer in
effect.
1.28 Equity Distribution Pool means 275,000 New Warrants less the
number of New Warrants, if any, distributable to the holders of Allowed
Bondholder Litigation Claims pursuant to Section 4.7 hereof.
1.29 Equity Interest means the interest of any holder of equity
securities of the Debtor represented by any issued and outstanding shares of
common or preferred stock or other instrument evidencing a present ownership
interest in the Debtor, whether or not transferable, or any option, warrant or
right, contractual or otherwise, to acquire or in connection with any such
interest.
1.30 Final Order means an order or judgment of the Bankruptcy Court
entered by the Clerk of the Bankruptcy Court on the docket in the Chapter 11
Case, which has not been reversed, vacated or stayed and as to which (a) the
time to appeal, petition for certiorari or move for a new trial, reargument or
rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for a new trial, reargument or rehearing shall then be pending
or (b) if an appeal, writ of certiorari, new trial, reargument or rehearing
thereof has been sought, such order or judgment of the Bankruptcy Court shall
have been affirmed by the highest court to which such order was appealed, or
certiorari shall have been denied or a new trial, reargument or rehearing shall
have been denied or resulted in no modification of such order, and the time to
take any further appeal, petition for certiorari or move for a new trial,
reargument or rehearing shall have expired; provided, however, that the
possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure,
or any analogous rule under the Bankruptcy Rules, may be filed relating to such
order, shall not cause such order not to be a Final Order.
1.31 Incentive Options means the options to purchase shares of New
Common Stock pursuant to the Stock Option Plan.
1.32 Indemnity Claim means a Claim (i) of a director or officer of the
Debtor that was not a director or officer, respectively, at any time on or after
April 25, 1997 or (ii) that is not assumed by the Debtor pursuant to Section
11.5 of the Plan for any obligations of the Debtor to indemnify directors or
officers against any obligations pursuant to the Debtor's certificate of
incorporation, bylaws, contract, applicable state law, any combination of the
foregoing, or otherwise and including, without limitation, any such obligations
relating to a Bondholder Litigation Claim or a Stockholder Litigation Claim.
1.33 Lien means any charge against, encumbrance upon or other interest
in property, the purpose of which is to secure payment of a debt or performance
of an obligation.
1.34 Miscellaneous Unsecured Claim means any Unsecured Claim other than
an Old Convertible Note Claim, an Old Senior Note Claim, a Trade Claim, a
Bondholder Litigation Claim or a Stockholder Litigation Claim.
4
<PAGE> 10
1.35 New Common Stock means the shares of common stock of Reorganized
Heartland to be authorized, issued and outstanding as of the Effective Date.
1.36 New Warrants means the warrants which are issued pursuant to, and
exercisable in accordance with, the terms and conditions of the New Warrant
Agreement.
1.37 New Warrant Agreement means the warrant agreement governing the
issuance of the New Warrants, which shall be in substantially the form annexed
hereto as Exhibit 2.
1.38 Old Convertible Note Claim means a Claim arising under or in
connection with the Old Convertible Notes.
1.39 Old Convertible Notes means those 9% convertible subordinated
discount notes due November 1, 2004 issued by the Debtor under that certain Note
Purchase Agreement, dated November 30, 1994, as amended, between the Debtor and
the purchasers named therein.
1.40 Old Equity Portion means the ratio (expressed as a percentage)
that the aggregate number of shares of Equity Interests bears to the aggregate
number of shares of Equity Interests represented by Allowed Equity Interests and
Allowed Stockholder Litigation Claims.
1.41 Old 14% Senior Notes means those 14% senior notes due October 15,
2004 issued by the Debtor under the Old 14% Senior Notes Indenture.
1.42 Old 14% Senior Notes Indenture means that certain Indenture, dated
as of December 20, 1996, between the Debtor and the Old 14% Senior Notes
Indenture Trustee relating to the Old 14% Senior Notes.
1.43 Old 14% Senior Notes Indenture Trustee means First Trust of New
York, National Association or a successor indenture trustee appointed in
accordance with the Old 14% Senior Notes Indenture.
1.44 Old Indentures means, collectively, the Old 14% Senior Notes
Indenture and the Old 13% Senior Notes Indenture.
1.45 Old Senior Note Claim means a Claim arising under or in connection
with the Old Senior Notes and the Old Indentures.
1.46 Old Senior Notes means, collectively, the Old 14% Senior Notes and
the Old 13% Senior Notes.
1.47 Old 13% Senior Notes means those 13% senior notes due April 15,
2003 issued by the Debtor under the Old 13% Senior Notes Indenture.
1.48 Old 13% Senior Notes Indenture means those certain Indentures,
dated as of April 26, 1995, as amended, and March 28, 1996, as amended,
respectively, between the Debtor and the Old 13% Senior Notes Indenture Trustee
relating to the Old 13% Senior Notes.
5
<PAGE> 11
1.49 Old 13% Senior Notes Indenture Trustee means First Trust of New
York National Association or a successor indenture trustee appointed in
accordance with the Old 13% Senior Notes Indenture.
1.50 Petition Date means December 4, 1998, the date on which the Debtor
commenced the Chapter 11 Case.
1.51 Plan means this Debtor's Plan of Reorganization Under Chapter 11
of the Bankruptcy Code dated as of January 19, 1999, including, without
limitation, the exhibits and schedules hereto, as the same may be amended or
modified from time to time in accordance with the provisions of the Bankruptcy
Code and the terms hereof.
1.52 Priority Non-Tax Claim means any Claim other than an
Administrative Expense Claim or a Priority Tax Claim, entitled to priority in
payment under section 507(a) of the Bankruptcy Code.
1.53 Priority Tax Claim means any Claim of a governmental unit of the
kind entitled to priority in payment as specified in sections 502(i) and
507(a)(8) of the Bankruptcy Code.
1.54 Ratable Proportion means, with reference to any distribution on
account of any Claim or Equity Interest in any Class or subclass, as the case
may be, a distribution equal in amount to the ratio (expressed as a percentage)
that the amount of such Claim or number of shares evidencing such Equity
Interests, as applicable, bears to the aggregate amount of Claims or aggregate
number of outstanding shares of Equity Interests in the same Class, as
applicable.
1.55 Registration Rights Agreement means the registration rights
agreement relating to the New Common Stock distributed pursuant to the Plan and
New Common Stock issuable upon exercise of New Warrants, to be entered into as
of the Effective Date by Reorganized Heartland, for the benefit of certain
holders of shares of New Common Stock and New Warrants, which agreement shall be
in substantially the form of, and containing provisions not less favorable than,
the form of agreement annexed hereto as Exhibit 3.
1.56 Rejection Claim means any Claim against the Debtor arising from
the rejection of any executory contract or unexpired lease, including any Claim
of (a) or lessor for damages resulting from the rejection of a lease of real
property as any such claim shall be calculated in accordance with section
502(b)(6) of the Bankruptcy Code or (b) an employee for damages resulting from
the rejection of an employment agreement as any such Claim shall be calculated
in accordance with section 502(b)(7) of the Bankruptcy Code. A Rejection Claim
shall constitute a Miscellaneous Unsecured Claim.
1.57 Reorganized Heartland means the Debtor, as it will be reorganized
as of the Effective Date in accordance with the Plan.
1.58 Schedules means the schedules of assets and liabilities and the
statement of financial affairs filed by the Debtor under section 521 of the
Bankruptcy Code, Bankruptcy Rule 1007 and the Official Bankruptcy Forms of the
Bankruptcy Rules as such schedules and statements have been or may be
supplemented or amended through the Confirmation Date.
6
<PAGE> 12
1.59 Stock Option Plan means the 1999 Heartland Wireless
Communications, Inc. Share Incentive Plan, which shall be in substantially the
form annexed hereto as Exhibit 4.
1.60 Secured Claim means a Claim secured by a Lien on Collateral to the
extent of the value of such Collateral (i) as set forth in the Plan, (ii) as
agreed to by the holder of such Claim and the Debtor or (iii) as determined by a
Final Order in accordance with section 506(a) of the Bankruptcy Code or, in the
event that such Claim is subject to setoff under section 553 of the Bankruptcy
Code, to the extent of such setoff.
1.61 Stockholder Litigation Claim means a Claim (a) arising from
rescission of a purchase or sale of an equity security of the Debtor, (b) for
damages arising from the purchase or sale of such an equity security or (c) for
reimbursement or contribution allowed under section 502 of the Bankruptcy Code
on account of a Claim for damages or recision arising out of a purchase or sale
of an equity security of the Debtor.
1.62 Stockholder Litigation Claims Portion means the ratio (expressed
as a percentage) that the aggregate number of shares of Equity Interests
represented by Allowed Stockholder Litigation Claims bears to the aggregate
number of shares of Equity Interests represented by Allowed Stockholder
Litigation Claims and Allowed Equity Interests.
1.63 Tort Claim means any Claim related to personal injury, property
damage, products liability or other similar Claims against the Debtor. A Tort
Claim shall constitute a Miscellaneous Unsecured Claim (except as otherwise
provided in Section 8.1(b) of the Plan).
1.64 Trade Claim means an Unsecured Claim for (x) goods, materials or
services provided to the Debtor or rendered to the Debtor in the ordinary course
of business prior to the Petition Date and (y) pre and post Petition Date
Claims, as approved by the Bankruptcy Court, for actual fees, charges or
reasonable attorneys' fees incurred in respect of the Old Senior Notes by the
Old 13% Senior Notes Indenture Trustee and the Old 14% Senior Notes Indenture
Trustee. A Trade Claim shall not include an Old Convertible Note Claim, an Old
Senior Note Claim, a Miscellaneous Unsecured Claim, a Rejection Claim, an
Indemnity Claim, a Bondholder Litigation claim, a Stockholder Litigation Claim
or a Tort Claim.
1.65 Unsecured Claim means any Claim against the Debtor that is not an
Administrative Expense Claim, a Priority Non-Tax Claim, a Priority Tax Claim or
a Secured Claim.
B. INTERPRETATION; APPLICATION OF DEFINITIONS AND RULES OF
CONSTRUCTION.
Unless otherwise specified, all section, schedule or exhibit references
in the Plan are to the respective section in, article of, or schedule or exhibit
to, the Plan, as the same may be amended, waived or modified from time to time.
The words "herein," "hereof," "hereto," "hereunder" 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. A term used herein that is not
defined herein shall have the meaning assigned to that term in the Bankruptcy
Code. 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 hereof.
7
<PAGE> 13
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY
TAX CLAIMS
2.1 Administrative Expense Claims.
On the Effective Date, except to the extent that a holder of an Allowed
Administrative Expense Claim agrees to a different treatment of such
Administrative Expense Claim, Reorganized Heartland shall pay to each holder of
an Allowed Administrative Expense Claim Cash in an amount equal to such Allowed
Administrative Expense Claim; provided, however, that Allowed Administrative
Expense Claims representing liabilities incurred in the ordinary course of
business by the Debtor in Possession or liabilities arising under loans or
advances to or other obligations incurred by the Debtor in Possession, whether
or not incurred in the ordinary course of business, shall be assumed and paid by
Reorganized Heartland in the ordinary course of business, consistent with past
practice and in accordance with the terms and subject to the conditions of any
agreements governing, instruments evidencing or other documents relating to such
transactions.
2.2 Priority Tax Claims.
On the Effective Date, except to the extent that a holder of an Allowed
Priority Tax Claim agrees to a different treatment of such Allowed Priority Tax
Claim, Reorganized Heartland shall pay to each holder of an Allowed Priority Tax
Claim that is due and payable on or before the Effective Date Cash in an amount
equal to such Allowed Priority Tax Claim. All Allowed Priority Tax Claims that
are not due and payable on or before the Effective Date shall be paid in the
ordinary course of business in accordance with the terms thereof.
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims against and Equity Interests in the Debtor are divided into the
following Classes:
Class 1 -- Priority Non-Tax Claims
Class 2 -- Secured Claims
Class 3 -- Old Senior Note Claims and Miscellaneous Unsecured Claims
Class 4 -- Old Convertible Note Claims
Class 5 -- Trade Claims
Class 6 -- Indemnity Claims
Class 7 -- Bondholder Litigation Claims
Class 8 -- Stockholder Litigation Claims
Class 9 -- Equity Interests
8
<PAGE> 14
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS
4.1 Priority Non-Tax Claims (Class 1).
On the Effective Date, except to the extent that a holder of an Allowed
Priority Non-Tax Claim agrees to a different treatment of such Allowed Priority
Non-Tax Claim, each Allowed Priority Non-Tax Claim shall be unimpaired in
accordance with section 1124 of the Bankruptcy Code. All Allowed Priority
Non-Tax Claims which are not due and payable on or before the Effective Date
shall be paid in the ordinary course of business in accordance with the terms
thereof.
4.2 Secured Claims (Class 2).
On the Effective Date, except to the extent that a holder of an Allowed
Secured Claim agrees to a different treatment of such Allowed Secured Claim,
each Allowed Secured Claim shall be reinstated or rendered unimpaired in
accordance with section 1124 of the Bankruptcy Code, notwithstanding any
contractual provision or applicable nonbankruptcy law that entitles the holder
of an Allowed Secured Claim to demand or receive payment of such Allowed Secured
Claim prior to the stated maturity of such Allowed Secured Claim from and after
the occurrence of a default. All Allowed Secured Claims which are not due and
payable on or before the Effective Date shall be paid in the ordinary course of
business in accordance with the terms thereof.
4.3 Old Senior Note Claims and Miscellaneous Unsecured Claims
(Class 3).
Each Old Senior Note Claim shall be Allowed as of the Petition Date in
the amount of outstanding principal plus accrued and unpaid interest owed in
respect thereof at the Petition Date. On the Effective Date, each holder of an
Allowed Old Senior Note Claim shall receive, in full satisfaction of such
Allowed Old Senior Note Claim, its Ratable Proportion of 9,700,000 shares of New
Common Stock, subject to dilution by the exercise of the New Warrants, Incentive
Options and, if Miscellaneous Unsecured Claims are entitled to receive shares of
New Common Stock, by any such shares issued to such holders. On the Effective
Date, each holder of an Allowed Miscellaneous Unsecured Claim shall receive, in
full satisfaction of such Allowed Miscellaneous Unsecured Claim, New Common
Stock in an amount that will provide the holder of such Claim the equivalent
number of shares of New Common Stock per dollar of Allowed Claim which such
holder would receive if such Allowed Claim were an Old Senior Note Claim.
4.4 Old Convertible Note Claims (Class 4).
Each Old Convertible Note Claim shall be Allowed as of the Petition
Date in the amount of outstanding principal plus accrued and unpaid interest
owed in respect thereof at the Petition Date. On the Effective Date, each holder
of an Allowed Old Convertible Note Claim shall
9
<PAGE> 15
receive, in full satisfaction of such Allowed Old Convertible Note Claim, its
Ratable Proportion of (i) 300,000 shares of New Common Stock, subject to
dilution by the exercise of the New Warrants, Incentive Options and, if
Miscellaneous Unsecured Claims are entitled to receive shares of New Common
Stock, by any such shares issued to such holders and (ii) 825,000 New Warrants.
4.5 Trade Claims (Class 5).
On the Effective Date, except to the extent that a holder of an Allowed
Trade Claim agrees to a different treatment of such Allowed Trade Claim, each
Allowed Trade Claim shall be unimpaired in accordance with section 1124 of the
Bankruptcy Code. All Allowed Trade Claims that are not due and payable on or
before the Effective Date shall be paid in the ordinary course of business in
accordance with the terms thereof.
4.6 Indemnity Claims (Class 6).
If Class 6 accepts the Plan, following the Effective Date, holders of
Indemnity Claims will be entitled to assert such Claims against the Debtor to
the extent of (i) any available coverage under the Debtor's corporate liability
insurance and (ii) any self-insured retention under such corporate liability
insurance. If Class 6 rejects the Plan, the Debtor will request the Bankruptcy
Court to estimate the Indemnity Claims at zero. If the Indemnity Claims are
estimated at more than zero, such amount, to the extent such amount exceeds the
amount of any corporate liability insurance (including any self-insured
retention under such insurance) available to satisfy its Claim (taking into
account such insurance or self-insured retention available to Persons covered by
Section 11.5 of the Plan), shall, to the extent such Claim becomes an Allowed
Claim, be treated as a Miscellaneous Unsecured Claim under Class 3 of the Plan.
4.7 Bondholder Litigation Claims (Class 7).
The Debtor will request the Bankruptcy Court to estimate the Bondholder
Litigation Claims at zero. If the Bondholder Litigation Claims are estimated at
more than zero, each holder of an Allowed Bondholder Litigation Claim shall
receive, in full satisfaction of such Allowed Bondholder Litigation Claim, its
Ratable Proportion of any liability insurance available to satisfy its Claim
remaining after use of such insurance for Allowed Indemnity Claims and Persons
covered by Section 11.5 of the Plan, not to exceed the Allowed Amount of its
Claim, and if liability insurance is insufficient to satisfy such Claim in full,
its Ratable Proportion of up to 275,000 New Warrants but not in excess of the
number of New Warrants the value of which is sufficient to satisfy such Claims
for purposes of section 1129(b)(a)(B)(i) of the Bankruptcy Code.
4.8 Stockholder Litigation Claims (Class 8).
The Debtor will request the Bankruptcy Court to estimate the
Stockholder Litigation Claims at zero. If the Stockholder Litigation Claims are
estimated at more than zero, each holder of an Allowed Stockholder Litigation
Claim shall receive, in full satisfaction of such Allowed Stockholder Litigation
Claim, its Ratable Proportion of any liability insurance available to satisfy
its Claim remaining after use of such insurance for Allowed Indemnity Claims,
Persons covered
10
<PAGE> 16
by Section 11.5 of the Plan and Allowed Bondholder Litigation Claims, not to
exceed the Allowed Amount of its Claim, and if liability insurance is
insufficient to satisfy such Claim in full, its Ratable Proportion of the
Stockholder Litigation Claims Portion of the Equity Distribution Pool.
4.9 Equity Interests (Class 9).
On the Effective Date, the Equity Interests shall be cancelled and each
holder of an Allowed Equity Interest shall receive in full satisfaction of such
Allowed Equity Interest, its Ratable Proportion of the Old Equity Portion of the
Equity Distribution Pool.
4.10 Alternative Treatment for Holders of Allowed Claims
Notwithstanding the treatment provided for holders of Allowed Claims in
this Section 4, Reorganized Heartland and the holder of an Allowed Claim may
agree to other treatment of such Claim, including payment in Cash, provided that
such treatment shall not provide a return having a present value in excess of
the present value of the distribution that otherwise would be made to such
holder under Section 4 hereof.
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS IMPAIRED;
ACCEPTANCE OR REJECTION OF THE PLAN
5.1 Holders of Claims and Equity Interests Entitled to Vote.
Each of Class 1 (Priority Non-Tax Claims), Class 2 (Secured Claims) and
Class 5 (Trade Claims) is unimpaired by the Plan and the holders of Claims in
each of such Classes are conclusively presumed to have accepted the Plan and are
not entitled to vote to accept or reject the Plan.
Each of Class 3 (Old Senior Note Claims and Miscellaneous Unsecured
Claims), Class 4 (Old Convertible Note Claims), Class 6 (Indemnity Claims),
Class 7 (Bondholder Litigation Claims), Class 8 (Stockholder Litigation Claims)
and Class 9 (Equity Interests) is impaired by the Plan and the holders of Claims
or Equity Interests in each of such Classes are entitled to vote to accept or
reject the Plan.
SECTION 6. MEANS OF IMPLEMENTATION
6.1 Distributions.
On the Effective Date, Reorganized Heartland shall make or cause to be
made to the holders of Allowed Claims and Allowed Equity Interests the
distributions of New Common Stock, New Warrants and Cash as provided in Section
4 hereof. Disputed Claims shall be resolved in accordance with Section 8 hereof
and, if a Disputed Claim becomes an Allowed Claim by Final Order, distributions
shall be made on account of such Claims in accordance with Section 8.3 hereof.
11
<PAGE> 17
6.2 Authorization of New Securities.
The issuance of the following securities by Reorganized Heartland is
hereby authorized without further act or action under applicable law,
regulation, order or rule: (a) 30,000,000 shares of New Common Stock, (b) the
New Warrants, (c) the Incentive Options and (d) 15,000,000 shares of preferred
stock, $.01 par value.
6.3 New Warrant Agreement.
The New Warrant Agreement shall be executed and delivered by
Reorganized Heartland and the warrant agent or any replacement agent reasonably
acceptable to the Debtor and a Creditors' Committee Majority.
6.4 Adoption of Stock Option Plan.
If not theretofore adopted by the Debtor, on the Effective Date,
Reorganized Heartland will adopt the Stock Option Plan.
6.5 Incentive Options on the Effective Date.
Reorganized Heartland is authorized to issue Incentive Options to
purchase 900,000 shares of New Common Stock pursuant and subject to the Stock
Option Plan. Said shares of New Common Stock and Incentive Options not issued on
the Effective Date shall be reserved for issuance thereafter pursuant to the
Stock Option Plan by Reorganized Heartland, on such terms and conditions
consistEnt with the Stock Option Plan.
6.6 Cancellation of Existing Securities and Agreements.
On the Effective Date, the Old Senior Notes, the Old Convertible Notes
and the Equity Interests or commitments, contractual or otherwise, obligating
the Debtor to issue, transfer or sell Equity Interests or any other capital
stock of the Debtor shall (a) be cancelled and (b) have no effect other than the
right to participate in the distributions, if any, provided under the Plan in
respect of Claims and Equity Interests. Except for purposes of effectuating the
distributions under the Plan on the Effective Date, the Old Indentures shall be
cancelled.
6.7 Corporate Action.
(a) Board of Directors of Reorganized Heartland. On the
Effective Date, the operation of Reorganized Heartland shall become the
general responsibility of its Board of Directors, subject to, and in
accordance with, the Charter and by-laws. The initial Board of
Directors of Reorganized Heartland shall consist of six members, at
least one of which shall be a member of the management of Reorganized
Heartland. Subject to the immediately preceding sentence, the initial
members and the manner of selection of the Board of Directors of
Reorganized Heartland shall in all respects be subject to the approval
of a Creditors' Committee Majority and shall be disclosed in the
Disclosure Statement or an amendment or supplement to the Disclosure
Statement or such other filing as may be made with the Bankruptcy
Court. The directors of the Debtor
12
<PAGE> 18
immediately prior to the Effective Date shall resign as of the
Effective Date and shall be replaced by the Board of Directors of
Reorganized Heartland.
(b) Officers of Reorganized Heartland. The initial officers of
Reorganized Heartland are or shall be disclosed in the Disclosure
Statement or an amendment or supplement to the Disclosure Statement or
such other filing as may be made with the Bankruptcy Court. The
selection of officers of Reorganized Heartland after the Effective Date
shall be as provided in its certificate of incorporation and by-laws.
6.8 Amended Certificate of Incorporation.
On the Effective Date, or as soon thereafter as is practicable,
Reorganized Heartland shall file with the Secretary of State of the State of
Delaware in accordance with section 303 of the DGCL, the Charter which shall,
among other things, prohibit Reorganized Heartland from creating, designating,
authorizing or causing to be issued any class or series of non-voting stock. On
the Effective Date, the Charter shall automatically become effective, and all
other matters provided under this Plan involving the corporate structure of
Reorganized Heartland, or corporate action by it, shall be deemed to have
occurred and shall be in effect from and after the Effective Date pursuant to
section 303 of the DGCL without any requirement of further action by the
stockholders, the directors of Reorganized Heartland or Reorganized Heartland.
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS
7.1 Date of Distributions.
Unless otherwise provided herein, any distributions and deliveries to
be made hereunder shall be made on the Effective Date or as soon as practicable
thereafter and deemed made on the Effective Date. In the event that any payment
or act under the Plan is required to be made or performed on a date that is not
a Business Day, then the making of such payment or the performance of such act
may be completed on the next succeeding Business Day, but shall be deemed to
have been completed as of the required date.
7.2 Disbursing Agent.
All distributions under the Plan shall be made by Reorganized Heartland
as Disbursing Agent or such other entity designated by Reorganized Heartland as
a Disbursing Agent on the Effective Date. A Disbursing Agent shall not be
required to give any bond or surety or other security for the performance of its
duties unless otherwise ordered by the Bankruptcy Court, and, in the event that
a Disbursing Agent is so otherwise ordered, all costs and expenses of procuring
any such bond or surety shall be borne by Reorganized Heartland.
7.3 Surrender of Instruments.
As a condition to receiving any distribution under the Plan each holder
of an Old Senior Note, Old Convertible Note and Equity Interest must surrender
such Old Senior Note, Old Convertible Note and Equity Interest to Reorganized
Heartland or its designee. Any holder of an Old Senior Note, Old Convertible
Note or Equity Interest that fails to (a) surrender such
13
<PAGE> 19
instrument or (b) execute and deliver an affidavit of loss and/or indemnity
reasonably satisfactory to Reorganized Heartland and furnish a bond in form,
substance, and amount reasonably satisfactory to Reorganized Heartland before
the first anniversary of the Effective Date shall be deemed to have forfeited
all rights and claims and may not participate in any distribution under the
Plan.
7.4 Compensation of Professionals.
Each person retained or requesting compensation in the Chapter 11 Case
pursuant to section 330 or 503(b) of the Bankruptcy Code shall be required to
file an application for allowance of final compensation and reimbursement of
expenses in the Chapter 11 Case on or before a date to be determined by the
Bankruptcy Court in the Confirmation Order or any other order of the Bankruptcy
Court. Objections to any application made under this section 7.4 shall be filed
on or before a date to be fixed and determined by the Bankruptcy Court in the
Confirmation Order or such other order.
The Debtor acknowledges that the Ad Hoc Committee has made a
substantial contribution in the Chapter 11 Case and has been of benefit to the
Debtor's bankruptcy estate. The Debtor will not object to the payment of the
reasonable fees and expenses of the Ad Hoc Committee (as determined in
accordance with section 503(b) of the Bankruptcy Code) including, without
limitation, the reasonable fees and expenses of counsel to the Ad Hoc Committee.
7.5 Delivery of Distributions.
Subject to Bankruptcy Rule 9010, all distributions to any holder of an
Allowed Claim or an Allowed Equity Interest shall be made at the address of such
holder as set forth on the Schedules filed with the Bankruptcy Court or on the
books and records of the Debtor or its agents, unless the Debtor or Reorganized
Heartland, as applicable, has been notified in writing of a change of address,
including, without limitation, by the filing of a proof of claim or interest by
such holder that contains an address for such holder different from the address
reflected on such Schedules for such holder. In the event that any distribution
to any holder is returned as undeliverable, the Disbursing Agent shall use
reasonable efforts to determine the current address of such holder, but no
distribution to such holder shall be made unless and until the Disbursing Agent
has determined the then current address of such holder, at which time such
distribution shall be made to such holder without interest; provided that such
distributions shall be deemed unclaimed property under section 347(b) of the
Bankruptcy Code at the expiration of one year from the Effective Date. After
such date, all unclaimed property or interest in property shall revert to
Reorganized Heartland, and the claim of any other holder to such property or
interest in property shall be discharged and forever barred.
7.6 Manner of Payment Under the Plan.
At the option of the Disbursing Agent, any Cash payment to be made
hereunder may be made by a check or wire transfer or as otherwise required or
provided in applicable agreements.
14
<PAGE> 20
7.7 Fractional Shares.
No fractional shares of New Common Stock or New Warrants or Cash in
lieu thereof shall be distributed. No New Warrants shall be issued for
fractional shares of New Common Stock. For purposes of distribution, fractional
shares of New Common Stock and fractional New Warrants shall be rounded down to
the previous whole number.
7.8 Setoffs and Recoupment.
The Debtor may, but shall not be required to, setoff against, or recoup
from, any Claim and the payments to be made pursuant to the Plan in respect of
such Claim, any claims of any nature whatsoever that the Debtor may have against
the claimant, but neither the failure to do so nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Debtor of any such claim
it may have against such claimant.
7.9 Distributions After Effective Date.
Distributions made after the Effective Date to holders of Disputed
Claims that are not Allowed Claims as of the Effective Date but which later
become Allowed Claims shall be deemed to have been made on the Effective Date.
7.10 Rights and Powers of Disbursing Agent.
(a) Powers of the Disbursing Agent. The Disbursing Agent shall
be empowered to (i) effect all actions and execute all agreements,
instruments and other documents necessary to perform its duties under
the Plan, (ii) make all distributions contemplated hereby, (iii) employ
professionals to represent it with respect to its responsibilities and
(iv) exercise such other powers as may be vested in the Disbursing
Agent by order of the Bankruptcy Court, pursuant to the Plan, or as
deemed by the Disbursing Agent to be necessary and proper to implement
the provisions hereof.
(b) Expenses Incurred on or After the Effective Date. Except
as otherwise ordered by the Bankruptcy Court, the amount of any
reasonable fees and expenses incurred by the Disbursing Agent on or
after the Effective Date (including, without limitation, taxes) and any
reasonable compensation and expense reimbursement claims (including,
without limitation, reasonable attorney fees and expenses) made by the
Disbursing Agent shall be paid in Cash by Reorganized Heartland.
7.11 Exculpation.
The Debtor, Reorganized Heartland, each of the members of the Ad Hoc
Committee, the Creditors' Committee, the Old Indenture Trustees and the
Disbursing Agent, and their respective members, partners, officers, directors,
employees and agents (including any attorneys, financial advisors, investment
bankers and other professionals retained by such persons) shall have no
liability to any holder of any Claim or Equity Interest for any act or omission
in connection with, or arising out of, the Disclosure Statement, the Plan, the
solicitation of votes for and the pursuit of confirmation of the Plan, the
consummation of the Plan, or the administration of the Plan or
15
<PAGE> 21
the property to be distributed under the Plan, except for willful misconduct or
gross negligence as determined by a Final Order of the Bankruptcy Court and, in
all respects, shall be entitled to rely upon the advice of counsel with respect
to their duties and responsibilities under the Plan.
7.12 Allocation Relating to Old Senior Notes and Old Convertible NoteS.
All distributions to holders of Old Senior Note Claims and Old
Convertible Note Claims shall be allocated first to the portion of each of such
Claims representing the principal amount of the Old Senior Notes or the Old
Convertible Notes and then, to the extent the consideration exceeds such amount,
to the remainder of such Claim.
7.13 Voluntary Cancellation of Equity Interests; Return of New Common
Stock and New Warrants.
Any holder of an Equity Interest that does not desire to receive any
consideration under the Plan in consideration for the cancellation of its Equity
Interests may send a letter to the Debtor so directing. In such event, if such
holder nevertheless receives its Ratable Proportion New Warrants in accordance
with section 4.9 of the Plan, such holder should return such Warrants to
Reorganized Heartland.
SECTION 8. PROCEDURES FOR TREATING DISPUTED CLAIMS UNDER THE PLAN
8.1 Disputed Claims.
(a) Process. Except as to applications for allowances of
compensation and reimbursement of expenses under sections 330 and 503
of the Bankruptcy Code, the Debtor or Reorganized Heartland shall have
the exclusive right to make and file objections to Administrative
Expense Claims, Claims and Equity Interests subsequent to the
Confirmation Date. All objections shall be litigated to Final Order;
provided, however, that Reorganized Heartland shall have the authority
to compromise, settle, otherwise resolve or withdraw any objections,
without approval of the Bankruptcy Court. Unless otherwise ordered by
the Bankruptcy Court, the Debtor or Reorganized Heartland shall file
all objections to Administrative Expense Claims that are the subject of
proofs of claim or requests for payment filed with the Bankruptcy Court
(other than applications for allowances of compensation and
reimbursement of expenses), Claims and Equity Interests and serve such
objections upon the holder of the Administrative Expense Claim, Claim
or Equity Interest as to which the objection is made as soon as is
practicable, but in no event later than (a) ninety (90) days after the
Effective Date or the date on which a proof of claim or request for
payment is filed with the Bankruptcy Court or (b) such later date as
may be approved by the Bankruptcy Court.
(b) Tort Claims. All Tort Claims are Disputed Claims.
Notwithstanding Section 8.1(a) above, after the Effective Date, any
Tort Claim for personal injury or wrongful death as to which a proof of
claim was timely filed that is not otherwise settled or consensually
resolved shall be determined and liquidated in the administrative or
judicial tribunal in which it is pending on the Confirmation Date or,
if no such action was
16
<PAGE> 22
pending on the Confirmation Date, in any administrative or judicial
tribunal of appropriate jurisdiction. Any Tort Claim determined and
liquidated pursuant to Section 8.1(a) or a judgment obtained in
accordance with this subsection 8.1(b) and applicable non-bankruptcy
law that is no longer subject to appeal or other review shall, only to
the extent there exists no available coverage under the Debtor's
liability insurance (including any self-insured retention under such
liability insurance), be deemed to be an Allowed Miscellaneous
Unsecured Claim in Class 3 of the Plan in such liquidated amount and
satisfied in accordance with the Plan; provided, however, that such
Allowed Claim shall not include punitive or exemplary damages. Nothing
contained in this subsection 8.1(b) shall constitute or be deemed a
waiver of any claim, right or cause of action that the Debtor or
Reorganized Heartland may have against any person in connection with or
arising out of any Tort Claim, including, without limitation, any
rights under section 157(b) of title 28, United States Code.
8.2 No Distributions Pending Allowance.
Notwithstanding any other provision hereof, if any portion of a Claim
is a Disputed Claim, no payment or distribution provided hereunder shall be made
on account of such Claim unless and until such Disputed Claim becomes an Allowed
Claim.
8.3 Distributions After Allowance.
To the extent that a Disputed Claim or Disputed Equity Interest
ultimately becomes an Allowed Claim or Allowed Equity Interest, a distribution
shall be made to the holder of such Allowed Claim or Allowed Equity Interest in
accordance with the provisions of the Plan. As soon as practicable after the
date that the order or judgment of the Bankruptcy Court allowing any Disputed
Claim or Disputed Equity Interest becomes a Final Order, the Disbursing Agent
shall provide to the holder of such Claim or Equity Interest the distribution to
which such holder is entitled under the Plan.
8.4 Voting Rights of Holders of Disputed Claims.
Pursuant to Bankruptcy Rule 3018(a), a Disputed Claim will not be
counted for purposes of voting on the Plan to the extent it is disputed, unless
an order of the Bankruptcy Court is entered after notice and a hearing
temporarily allowing the Disputed Claim for voting purposes under Bankruptcy
Rule 3018(a). Such disallowance for voting purposes is without prejudice to the
claimant's right to seek to have its Disputed Claim allowed for purposes of
distribution under the Plan.
17
<PAGE> 23
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS AND UNEXPIRED LEASES
9.1 Assumption or Rejection of Contracts and Leases.
This Plan constitutes a motion by the Debtor to assume, as of the
Effective Date, all executory contracts and unexpired leases to which the Debtor
is a party, except for an executory contract or unexpired lease that (a) has
been assumed or rejected pursuant to Final Order of the Bankruptcy Court, (b) is
specifically rejected on Schedule 9.1 hereto filed by the Debtor on or before
the commencement of the hearing on approval of the Disclosure Statement or such
later date as may be fixed by the Bankruptcy Court, (c) is the subject of a
separate motion filed under section 365 of the Bankruptcy Code by the Debtor
prior to the Confirmation Date or (d) is otherwise assumed hereunder. For
purposes hereof, each executory contract and unexpired lease listed on Schedule
9.1 hereto that relates to the use or occupancy of real property shall include
(i) modifications, amendments, supplements, restatements, or other agreements
made directly or indirectly by any agreement, instrument, or other document that
in any manner affects such executory contract or unexpired lease, without regard
to whether such agreement, instrument or other document is listed on Schedule
9.1 hereto and (ii) executory contracts or unexpired leases appurtenant to the
premises listed on Schedule 9.1 hereto including all easements, licenses,
permits, rights, privileges, immunities, options, rights of first refusal,
powers, uses, usufructs, reciprocal easement agreements, vault, tunnel or bridge
agreements or franchises, and any other interests in real estate or rights in
rem relating to such premises to the extent any of the foregoing are executory
contracts or unexpired leases, unless any of the foregoing agreements are
assumed.
9.2 Amendments to Schedule; Effect of Amendments.
The Debtor shall assume each of the executory contracts and unexpired
leases not listed on Schedule 9.1 hereto; provided, that the Debtor may at any
time on or before the first Business Day before the date of the commencement of
the Confirmation Hearing amend Schedule 9.1 hereto to delete or add any
executory contract or unexpired lease thereto, in which event such executory
contract or unexpired lease shall be deemed to be, respectively, assumed and, if
applicable, assigned as provided therein, or rejected. The Debtor shall provide
notice of any amendments to Schedule 9.1 hereto to the parties to the executory
contracts or unexpired leases affected thereby. The fact that any contract or
lease is scheduled on Schedule 9.1 hereto shall not constitute or be construed
to constitute an admission by the Debtor that the Debtor has any liability
thereunder.
9.3 Bar to Rejection Damage Claims.
In the event that the rejection of an executory contract or unexpired
lease by the Debtor results in damages to the other party or parties to such
contract or lease, a Claim for such damages, if not heretofore evidenced by a
filed proof of claim, shall be forever barred and shall not be enforceable
against the Debtor, or its properties or interests in property as agents,
successors, or assigns, unless a proof of claim is filed with the Bankruptcy
Court and served upon counsel for the Debtor on or before 30 days after the
earlier to occur of (a) the giving of notice to such party under section 9.1 or
9.2 hereof and (b) the entry of an order by the Bankruptcy Court authorizing
rejection of a particular executory contract or lease.
18
<PAGE> 24
9.4 Indemnification Obligations.
The obligations of the Debtor to indemnify its directors and officers
that were not directors or officers, respectively, on or after April 25, 1997
pursuant to certificate of articles of incorporation, bylaws, contract,
applicable state law or otherwise shall be deemed to be, and shall be treated as
though they are, executory contracts that are rejected under the Plan. Any
Claims arising from such rejection shall be treated as Indemnity Claims under
Section 4.6 hereof.
SECTION 10. CONDITIONS PRECEDENT TO EFFECTIVE DATE
10.1 Conditions Precedent to Effective Date of the Plan.
The occurrence of the Effective Date of the Plan is subject to
satisfaction of the following conditions precedent:
(a) Confirmation Order. The Confirmation Order, in form and
substance reasonably acceptable to the Debtor and a Creditors'
Committee Majority shall have been entered by the Clerk of the
Bankruptcy Court and there shall not be a stay or injunction in effect
with respect thereto.
(b) All Trade Claims shall have become Allowed Claims,
Disallowed Claims or estimated for distribution purposes under the Plan
by Final Order(s) or by operation of law and the aggregate amount of
all such Allowed Trade Claims and estimated Trade Claims, if any, shall
not exceed $7,000,000.
(c) New Warrant Agreement. The New Warrant Agreement shall
have been executed and delivered.
(d) The Debtor shall have received approval from the Federal
Communications Commission ("FCC") of all of the Debtor's transfer of
control applications requesting FCC approval of the transfer of the
basic trading areas authorizations and channel licenses held directly
or indirectly by the Debtor (or its affiliates).
(e) The Debtor or Reorganized Heartland shall have filed a
shelf registration statement for the benefit of certain holders of New
Common Stock with the Securities and Exchange Commission.
(f) Execution and Delivery of Other Documents. All other
actions and all agreements, instruments or other documents necessary to
implement the terms and provisions hereof shall have been effected.
19
<PAGE> 25
10.2 Waiver of Conditions Precedent.
Each of the conditions precedent in section 10.1 hereof may be waived,
in whole or in part, by the Debtor, with the prior written consent of a
Creditors' Committee Majority. Any such waivers of a condition precedent in
section 10.1 hereof may be effected at any time, without notice, without leave
or order of the Bankruptcy Court and without any formal action (other than by
the Debtor and a Creditors' Committee Majority).
SECTION 11. EFFECT OF CONFIRMATION
11.1 Vesting of Assets.
On the Effective Date, the Debtor, its properties and interests in
property and its operations shall be released from the custody and jurisdiction
of the Bankruptcy Court, and the estate of the Debtor shall vest in Reorganized
Heartland. From and after the Effective Date, Reorganized Heartland may operate
its business and may use, acquire and dispose of property free of any
restrictions of the Bankruptcy Code or the Bankruptcy Rules, subject to the
terms and conditions of the Plan.
11.2 Binding Effect.
Except as otherwise provided in section 1141(d)(3) of the Bankruptcy
Code and subject to the occurrence of the Effective Date, on and after the
Confirmation Date, the provisions of the Plan shall bind any holder of a Claim
against, or Equity Interest in, the Debtor and such holder's respective
successors and assigns, whether or not the Claim or Equity Interest of such
holder is impaired under the Plan and whether or not such holder has accepted
the Plan.
11.3 Discharge of Debtor.
Except to the extent otherwise provided herein, the treatment of all
Claims against or Equity Interests in the Debtor hereunder shall be in exchange
for and in complete satisfaction, discharge and release of all Claims against or
Equity Interests in the Debtor of any nature whatsoever, known or unknown,
including, without limitation, any interest accrued or expenses incurred thereon
from and after the Petition Date, or against its estate or properties or
interests in property. Except as otherwise provided herein, upon the Effective
Date, all Claims against and Equity Interests in the Debtor will be satisfied,
discharged and released in full exchange for the consideration provided
hereunder. Except as otherwise provided herein, all entities shall be precluded
from asserting against the Debtor or Reorganized Heartland or their respective
properties or interests in property, any other Claims based upon any act or
omission, transaction or other activity of any kind or nature that occurred
prior to the Effective Date.
20
<PAGE> 26
11.4 Term of Injunctions or Stays.
Unless otherwise provided, all injunctions or stays arising under or
entered during the Chapter 11 Case under section 105 or 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.
11.5 Indemnification Obligations.
Subject to the occurrence of the Effective Date, the obligations of the
Debtor, only to the extent permitted under the laws of the State of Delaware, to
indemnify, defend, reimburse or limit the liability of directors or officers who
were or are directors or officers of the Debtor on or after April 25, 1997,
respectively, against any claims or causes of action as provided in the Debtor's
certificate of incorporation, bylaws, applicable state law or contract shall
survive confirmation of the Plan, remain unaffected thereby and not be
discharged except with respect to any such claims or causes of action arising
out of acts or omissions occurring, in whole or in part, before April 25, 1997
where liability as finally adjudicated by a court of competent jurisdiction is
imposed (i) for any breach of duty of loyalty to the Debtor or its stockholders,
(ii) for acts or omissions not in good faith and not in a manner such director
of officer reasonably believed to be in or not opposed to the best interests of
the Debtor or which involve intentional misconduct, gross negligence or a
knowing violation of law or (iii) for any transaction from which the director or
officer derived any improper personal benefit.
11.6 Limited Release.
On the Effective Date, the Debtor, on behalf of itself and its
non-debtor subsidiaries, hereby releases the officers and directors of the
Debtor and its subsidiaries holding office at any time on or after April 25,
1997 (as well as any non-voting representative of Jupiter Partners, L.P.
("Jupiter") appointed pursuant to Section 5.12 of the Note Purchase Agreement
among the Debtor, Jupiter and Thomas R. Haack, executed as of November 30, 1994,
who served in such position on or after April 25, 1997) and each of the members
of the Ad Hoc Committee and the Creditors' Committee and each of their
respective agents, employees, advisors (including any attorneys, financial
advisors, investment bankers and other professionals retained by such persons or
entities), affiliates and representatives from any and all claims or liabilities
arising from or related to actions taken or omissions occurring in connection
with the Plan or otherwise in their capacity as officers, directors, agents,
members, employees, affiliates or advisors of each of the foregoing, as
applicable.
SECTION 12. WAIVER OF CLAIMS
12.1 Avoidance Actions.
Effective as of the Effective Date, the Debtor waives the right to
prosecute any avoidance or recovery actions under section 547 of the Bankruptcy
Code that belong to the Debtor or Debtor in Possession.
21
<PAGE> 27
SECTION 13. RETENTION OF JURISDICTION
The Bankruptcy Court shall have exclusive jurisdiction of all matters
arising out of, or related to, the Chapter 11 Case and the Plan pursuant to, and
for the purposes of, sections 105(a) and 1142 of the Bankruptcy Code and for,
among other things, the following purposes:
(a) To hear and determine pending applications for the
assumption or rejection of executory contracts or unexpired leases and
the allowance of Claims resulting therefrom.
(b) To determine any and all adversary proceedings,
applications and contested matters, including, without limitation,
under sections 544, 545, 548, 549, 550, 551 and 553 of the Bankruptcy
Code.
(c) To ensure that distributions to holders of Allowed Claims
and Allowed Equity Interests are accomplished as provided herein.
(d) To hear and determine any timely objections to
Administrative Expense Claims or to proofs of claim and equity
interests, including, without limitation, any objections to the
classification of any Claim or Equity Interest, and to allow or
disallow any Disputed Claim or Disputed Equity Interest, in whole or in
part.
(e) To enter and implement such orders as may be appropriate
in the event the Confirmation Order is for any reason stayed, revoked,
modified or vacated.
(f) To issue such orders in aid of execution of the Plan, to
the extent authorized by section 1142 of the Bankruptcy Code.
(g) To consider any amendments to or modifications of the
Plan, or to cure any defect or omission, or reconcile any
inconsistency, in any order of the Bankruptcy Court, including, without
limitation, the Confirmation Order.
(h) To hear and determine all applications under sections 330,
331 and 503(b) of the Bankruptcy Code for awards of compensation for
services rendered and reimbursement of expenses incurred prior to the
Confirmation Date.
(i) To hear and determine disputes arising in connection with
the interpretation, implementation or enforcement of the Plan, the
Confirmation Order, any transactions or payments contemplated hereby or
any agreement, instrument or other document governing or relating to
any of the foregoing.
(j) To hear and determine matters concerning state, local and
federal taxes in accordance with sections 346, 505 and 1146 of the
Bankruptcy Code.
(k) To hear any other matter not inconsistent with the
Bankruptcy Code.
(l) To hear and determine all disputes involving the
existence, scope and nature of the discharges granted under section
11.3 hereof.
22
<PAGE> 28
(m) To issue injunctions and effect any other actions that may
be necessary or desirable to restrain interference by any entity with
the consummation or implementation of the Plan.
(n) To enter a final decree closing the Chapter 11 Case.
SECTION 14. MISCELLANEOUS PROVISIONS
14.1 Payment of Statutory Fees.
All fees payable under section 1930, chapter 123, title 28, United
States Code, as determined by the Bankruptcy Court at the Confirmation Hearing,
shall be paid on the Effective Date. Any such fees accrued after the Effective
Date will constitute an Allowed Administrative Expense Claim and be treated in
accordance with section 2.1 hereof.
14.2 Retiree Benefits.
On and after the Effective Date, pursuant to section 1129(a)(13) of the
Bankruptcy Code, Reorganized Heartland shall continue to pay any retiree
benefits (within the meaning of section 1114 of the Bankruptcy Code), at the
level established in accordance with section 1114 of the Bankruptcy Code, at any
time prior to the Confirmation Date, for the duration of the period for which
the Debtor has obligated itself to provide such benefits.
14.3 Administrative Expenses Incurred After the Confirmation Date.
Administrative expenses incurred by the Debtor or Reorganized Heartland
after the Confirmation Date, including (without limitation) Claims for
professionals' fees and expenses, shall not be subject to application and may be
paid by the Debtor or Reorganized Heartland, as the case may be, in the ordinary
course of business and without further Bankruptcy Court approval; provided,
however, that no Claims for professional fees and expenses incurred after the
Confirmation Date shall be paid until after the occurrence of the Effective
Date.
14.4 Section 1125(e) of the Bankruptcy Code.
As of the Confirmation Date, the Debtor shall be deemed to have
solicited acceptances of the Plan in good faith and in compliance with the
applicable provisions of the Bankruptcy Code. The Debtor and each of the members
of the Ad Hoc Committee and the Creditors' Committee (and each of their
respective affiliates, agents, directors, officers, employees, investment
bankers, financial advisors, attorneys and other professionals) have, and shall
be deemed to have, participated in good faith and in compliance with the
applicable provisions of the Bankruptcy Code in the offer and issuance of the
securities under the Plan, and therefore are not, and on account of such offer,
issuance and solicitation will not be, liable at any time for the violation of
any applicable law, rule or regulation governing the solicitation of acceptances
or rejections of the Plan or the offer and issuance of securities under the
Plan.
23
<PAGE> 29
14.5 Compliance with Tax Requirements.
In connection with the consummation of the Plan, the Debtor shall
comply with all withholding and reporting requirements imposed by any taxing
authority, and all distributions hereunder shall be subject to such withholding
and reporting requirements.
14.6 Severability of Plan Provisions.
In the event that, prior to the Confirmation Date, any term or
provision of the Plan is held by the Bankruptcy Court to be invalid, void or
unenforceable, the Bankruptcy Court shall have the power to alter and interpret
such term or provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision shall then be
applicable as altered or interpreted. Notwithstanding any such holding,
alteration or interpretation, the remainder of the terms and provisions hereof
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated by such holding, alteration or interpretation. The Confirmation
Order shall constitute a judicial determination and shall provide that each term
and provision hereof, as it may have been altered or interpreted in accordance
with the foregoing, is valid and enforceable in accordance with its terms. All
actions taken under this section 14.6 shall require the consent of the Debtor
and a Creditors' Committee Majority.
14.7 Notices.
All notices, requests, and demands to or upon the Debtor to be
effective shall be in writing (including by facsimile transmission) and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed, addressed as follows:
Heartland Wireless Communications, Inc.
200 Chisholm Place, Suite 200
Plano, Texas 75075
Attn: J. Curtis Henderson, Esq.
Senior Vice President and General Counsel
Telephone: (972) 633-4039
Telecopier: (972) 633-0074
and
24
<PAGE> 30
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attn: Martin A. Sosland, Esq.
Telephone: (214) 746-7700
Telecopier: (214) 746-7777
and
Richards, Layton & Finger, P.A.
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Attn: Thomas L. Ambro, Esq.
Telephone: (302) 658-6541
Telecopier: (302) 658-6548
14.8 Governing Law.
Except to the extent that the Bankruptcy Code or other federal law is
applicable, or to the extent an Exhibit hereto provides otherwise, the rights,
duties and obligations arising under the Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
without giving effect to the principles of conflict of laws thereof.
14.9 Binding Effect.
The Plan shall be binding upon and inure to the benefit of the Debtor,
the holders of Claims and Equity Interests, and their respective successors and
assigns, including, without limitation, Reorganized Heartland.
Dated: January 19, 1999
Respectfully submitted,
Heartland Wireless Communications, Inc.
By: /s/ Marjean Henderson
-------------------------------------------------
Name: Marjean Henderson
Title: Senior Vice President and Chief Financial
Officer
25
<PAGE> 31
EXHIBIT 1
Restated Certificate of Incorporation of Reorganized Heartland
<PAGE> 32
EXHIBIT 2
New Warrant Agreement
<PAGE> 33
EXHIBIT 3
Registration Rights Agreement
<PAGE> 34
EXHIBIT 4
Stock Option Plan
