Exhibit 2.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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:
In re :
:
GLOBIX CORPORATION, : Chapter 11
COMSTAR.NET, INC., : Case No. 02-10647 (PJW)
ATC MERGER CORP., : (Jointly Administered)
:
Debtors. :
x
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AMENDED JOINT PREPACKAGED PLAN OF GLOBIX CORPORATION AND CERTAIN SUBSIDIARIES
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SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Jay M. Goffman
Howard L. Ellin
Frederick D. Morris
4 Times Square
New York, New York 10036-6552
(212) 735-3000
-and-
Gregg M. Galardi (I.D. No. 2991)
Robert A. Weber (I.D. No. 4013)
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
(302) 651-3000
Attorneys for Globix Corporation, et al.,
Debtors and Debtors-in-Possession
Dated: Wilmington, Delaware
April 8, 2002
TABLE OF CONTENTS
Page
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INTRODUCTION..............................................................PLAN-1
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME...................................................PLAN-1
A. Scope of Definitions; Rules of Construction......................PLAN-1
B. Definitions......................................................PLAN-1
C. Rules of Interpretation..........................................PLAN-5
1. General...............................................PLAN-5
2. "Including"...........................................PLAN-5
3. "On"..................................................PLAN-5
D. Computation of Time..............................................PLAN-6
ARTICLE II.
TREATMENT OF UNCLASSIFIED CLAIMS..........................................PLAN-6
A. Administrative Claims............................................PLAN-6
B. Priority Tax Claims..............................................PLAN-6
ARTICLE III.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS......................PLAN-6
A. Introduction.....................................................PLAN-6
B. Summary of Classes...............................................PLAN-6
C. Treatment of Classes.............................................PLAN-7
1. Class 1 - Other Priority Claims.......................PLAN-7
2. Class 2 - Secured Claims..............................PLAN-7
3. Class 3 - General Unsecured Claims....................PLAN-7
4. Class 4 - Senior Note Claims..........................PLAN-8
5. Class 5 - Preferred Interests.........................PLAN-8
6. Class 6 - Equity Interests............................PLAN-8
7. Class 7 - Warrants Interests..........................PLAN-8
8. Class 8 - Subsidiary Common Stock Interests...........PLAN-9
D. Allowed Claims and Interests.....................................PLAN-9
E. Postpetition Interest............................................PLAN-9
F. Alternative Treatment............................................PLAN-9
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN......................................PLAN-9
A. Continued Corporate Existence....................................PLAN-9
B. Corporate Action.................................................PLAN-9
1. Cancellation Of Existing Securities and Agreements ...PLAN-9
C. Restructuring Transactions......................................PLAN-10
1. New Securities.......................................PLAN-10
2. Registration Rights..................................PLAN-10
D. Directors and Officers..........................................PLAN-11
E. Revesting of Assets.............................................PLAN-11
F. Preservation of Rights of Action; Settlement of Litigation
Claims................................................... PLAN-11
G. Effectuating Documents; Further Transactions................... PLAN-11
H. Exemption from Certain Transfer Taxes...........................PLAN-11
ARTICLE V.
PROVISIONS GOVERNING DISTRIBUTIONS.......................................PLAN-12
A. Distributions for Claims and Interests Allowed as of the
Effective Date............................................PLAN-12
B. Disbursing Agent................................................PLAN-12
C. Surrender of Securities or Instruments..........................PLAN-12
D. Instructions to Disbursing Agent................................PLAN-12
E. Services of Indenture Trustee...................................PLAN-13
F. Record Date for Distributions to Holders of Senior Notes,
Preferred Stock, and Common Stock.........................PLAN-13
G. Means of Cash Payment...........................................PLAN-13
H. Calculation of Distribution Amounts of New Common Stock.........PLAN-13
I. Delivery of Distributions; Undeliverable or Unclaimed
Distributions.............................................PLAN-13
J. Withholding and Reporting Requirements..........................PLAN-14
K. Setoffs.........................................................PLAN-14
ARTICLE VI.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS......................................PLAN-14
A. Objections to Claims; Disputed Claims...........................PLAN-14
B. No Distribution Pending Allowance...............................PLAN-14
C. Distributions After Allowance...................................PLAN-15
ARTICLE VII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES.................................................... PLAN-15
A. Assumed Contracts and Leases....................................PLAN-15
B. Payments Related to Assumption of Contracts and Leases..........PLAN-15
C. Rejected Contracts and Leases...................................PLAN-15
D. Claims Based on Rejection of Executory Contracts or
Unexpired Leases..........................................PLAN-15
E. Compensation and Benefit Plans and Treatment of Retirement
Plan......................................................PLAN-16
ARTICLE VIII.
ACCEPTANCE OR REJECTION OF THE PLAN......................................PLAN-16
A. Classes Entitled To Vote........................................PLAN-16
B. Acceptance by Impaired Classes..................................PLAN-16
C. Elimination of Classes..........................................PLAN-16
D. Cramdown........................................................PLAN-16
ARTICLE IX.
SECURITIES TO BE ISSUED
IN CONNECTION WITH THE PLAN..............................................PLAN-17
ARTICLE X.
CONDITIONS PRECEDENT TO THE PLAN'S
CONFIRMATION AND CONSUMMATION............................................PLAN-17
A. Conditions to Confirmation......................................PLAN-17
B. Conditions to Effective Date....................................PLAN-17
C. Waiver of Conditions............................................PLAN-18
PLAN-ii
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS; WITHDRAWAL.................................PLAN-18
ARTICLE XII.
RETENTION OF JURISDICTION................................................PLAN-19
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS..............................................PLAN-20
ARTICLE XIV.
MISCELLANEOUS PROVISIONS................................................ PLAN-20
A. Bar Date for Professional Fee Claims............................PLAN-20
B. Payment of Statutory Fees.......................................PLAN-20
C. Severability of Plan Provisions.................................PLAN-20
D. Successors and Assigns..........................................PLAN-21
E. Discharge of the Debtors and Injunction.........................PLAN-21
F. Debtors' Releases...............................................PLAN-21
G. Other Releases..................................................PLAN-21
H. Exculpation and Limitation of Liability.........................PLAN-22
I. Waiver of Enforcement of Subordination..........................PLAN-22
J. Term of Injunctions or Stays....................................PLAN-22
K. Binding Effect..................................................PLAN-23
L. Revocation, Withdrawal, or Non-Consummation.....................PLAN-23
M. Committees......................................................PLAN-23
N. Plan Supplement.................................................PLAN-23
O. Notices to Debtors..............................................PLAN-23
P. Indemnification Obligations.....................................PLAN-24
Q. Governing Law...................................................PLAN-24
R. Prepayment......................................................PLAN-25
S. Section 1125(e) of the Bankruptcy Code..........................PLAN-25
PLAN-iii
TABLE OF EXHIBITS
New Notes Indenture ...........................................................A
Reorganized Globix Certificate of Incorporation .............................B-1
Reorganized Globix By-laws ..................................................B-2
Description of New Common Stock ...............................................C
Registration Rights Agreement .................................................D
The following exhibits are included in the Plan Supplement.
Director Designations .........................................................E
Changes In Management and Additional Indemnitees ..............................F
PLAN-iv
INTRODUCTION
Globix Corporation, Comstar.net, Inc., and ATC Merger Corp., jointly
propose the following plan of reorganization under Chapter 11 of the Bankruptcy
Code.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope of Definitions; Rules of Construction
Except as expressly provided or unless the context otherwise requires,
capitalized terms not otherwise defined in this Plan shall have the meanings
ascribed to them in this Article I. Any term used in the Plan that is not
defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules,
shall have the meaning ascribed to it therein. Where the context requires, any
definition applies to the plural as well as the singular number.
B. Definitions
1.1 "Administrative Claim" means a Claim for payment of an administrative
expense of a kind specified in section 503(b) or 1114(e)(2) of the Bankruptcy
Code and entitled to priority under section 507(a)(1) of the Bankruptcy Code,
including (a) actual, necessary costs and expenses, incurred after the Petition
Date, of preserving the Debtors' Estates and operating their businesses,
including wages, salaries, or commissions for services rendered after the
Petition Date, (b) Professional Fees, (c) all fees and charges assessed against
the Estates under chapter 123 of title 28, United States Code, (d) all Allowed
Claims that are entitled to be treated as Administrative Claims by virtue of a
Final Order entered under section 546(c)(2)(A) of the Bankruptcy Code, and (e)
the reasonable post-petition fees and expenses of the Indenture Trustee,
including successors thereto, including reasonable attorney's fees and expenses
of such Indenture Trustee.
1.2 "Allowed" means, with respect to a Claim or Interest within a
particular class, an Allowed Claim or Allowed Interest of the type described in
such class.
1.3 "Allowed Claim" means any Claim against any Debtor, which is listed by
such Debtor in its books and records as liquidated in amount and not disputed or
contingent; provided, that to the extent that a Claim is a Disputed Claim, the
determination of whether such Claim shall be allowed and/or the amount of any
such Claim shall be determined, resolved, or adjudicated, as the case may be, in
the manner in which such Claim would have been determined, resolved, or
adjudicated if the Chapter 11 Cases had not been commenced; and provided,
further, that proofs of claim need not and should not be filed with respect to
any Claims with the Bankruptcy Court; and provided, further, the Reorganized
Debtors in their discretion, may bring an objection or other motion before the
Bankruptcy Court with respect to a Disputed Claim for resolution. An Allowed
Claim (a) includes a Disputed Claim to the extent such Disputed Claim becomes
allowed after the Effective Date and (b) shall be net of any valid setoff
exercised with respect to such Claim pursuant to the provisions of the
Bankruptcy Code and applicable law. Unless otherwise specified herein, in
section 506(b) of the Bankruptcy Code or by order of the Bankruptcy Court,
"Allowed Claim" shall not, for purposes of distributions under the Plan, include
(i) for prepetition Claims, interest on such Claim or Claims accruing from or
after the Petition Date, (ii) punitive or exemplary damages or (iii) any fine,
penalty or forfeiture.
1.4 "Allowed Interest" means an Interest in any Debtor, which has been or
hereafter is listed by such Debtor in its books and records as liquidated in an
amount and not disputed or contingent; provided, however, that to the extent an
Interest is a Disputed Interest, the determination of whether such Interest
shall be allowed and/or the amount of any such Interest shall be determined,
resolved, or adjudicated, as the case may be, in the manner in which such
Interest would have been determined, resolved, or adjudicated if the Chapter 11
Cases had not been commenced; and provided, further, that proofs of Interest
need not and should not be filed with respect to any Interests with the
Bankruptcy Court; and provided, further, that the Reorganized Debtors in their
discretion, may bring an objection or other motion before the Bankruptcy Court
with respect to a Disputed Interest for resolution.
1.5 "ATC" means ATC Merger Corp., a New York corporation.
1.6 "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
codified in title 11 of the United States Code, 11 U.S.C. (ss)(ss) 101-1330, as
now in effect or hereafter amended.
1.7 "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware or any other court with jurisdiction over the Chapter 11
Cases.
1.8 "Bankruptcy Rules" means, collectively, the Federal Rules of
Bankruptcy Procedure and the Official Bankruptcy Forms, the Federal Rules of
Civil Procedure, as applicable to the Chapter 11 Cases or proceedings therein,
and the Local Rules of the Bankruptcy Court, all as now in effect or hereafter
amended.
1.9 "Business Day" means any day, excluding Saturdays, Sundays or "legal
holidays" (as defined in Bankruptcy Rule 9006(a)), on which commercial banks are
open for business in New York, New York.
1.10 "Cash" means legal tender of the United States of America.
1.11 "Certificate" shall have the meaning ascribed to such term in Article
V.C.
1.12 "Chapter 11 Cases" means the jointly administered Chapter 11 cases of
Globix, Comstar and ATC.
1.13 "Claim" means a claim, as defined in section 101(5) of the Bankruptcy
Code, against a Debtor.
1.14 "Class" means one of the classes of Claims or Interests listed in
Article III below.
1.15 "Committee" means any official committee appointed in the Chapter 11
Cases, as such committee may be reconstituted from time to time.
1.16 "Common Stock" means Globix's common stock, par value $.01 per share,
issued and outstanding immediately before the Petition Date, traded on the
Nasdaq National Market under the symbol "GBIX."
1.17 "Comstar" means Comstar.net, Inc., a Georgia Corporation.
1.18 "Confirmation" means the Bankruptcy Court's confirmation of the Plan.
1.19 "Confirmation Date" means the date of entry of the Confirmation Order
on the docket of the Bankruptcy Court.
1.20 "Confirmation Hearing" means the Bankruptcy Court's hearing to
consider confirmation of the Plan, as it may be adjourned or continued from time
to time.
1.21 "Confirmation Order" means the Bankruptcy Court's order confirming
the Plan under section 1129 of the Bankruptcy Code.
1.22 "Cure" means the payment of Cash by a Debtor, or the distribution of
other property (as the parties may agree or the Bankruptcy Court may order), as
necessary to cure defaults under an executory contract or unexpired lease of a
Debtor and to permit a Debtor to assume that contract or lease under section
365(a) of the Bankruptcy Code.
1.23 "Debtor" means each of Globix, Comstar and ATC in their capacity as
debtors and debtors-in-possession under sections 1107 and 1108 of the Bankruptcy
Code, and "Debtors" means all of them collectively, and when the context so
requires, as post-confirmation entities reorganized hereunder.
1.24 "Disallowed Claim" or "Disallowed Interest" means any Claim against
or Interest in any Debtor which has been disallowed, in whole or in part, by
Final Order of the Bankruptcy Court, or which has been withdrawn, in whole or in
part, by the holder thereof.
PLAN-2
1.25 "Disbursing Agent" means Reorganized Globix or any party designated
by Reorganized Globix, in its sole discretion, to serve as a disbursing agent
under the Plan.
1.26 "Disputed Claim" means any Claim, or any portion thereof, that is not
an Allowed Claim or a Disallowed Claim.
1.27 "Disputed Interest" means every Interest that is not an Allowed
Interest.
1.28 "Distribution Date" means the date, occurring as soon as practicable
after the Effective Date, on which the Disbursing Agent first makes
distributions to holders of Allowed Claims and Allowed Interests as provided in
Article V of this Plan.
1.29 "Distribution Record Date" means the record date for purposes of
making distributions under the Plan on account of Allowed Claims, which date
shall be the seventh (7th) Business Day after the Confirmation Date.
1.30 "Effective Date" means the first Business Day (i) on which all
conditions to the Plan's consummation in Article X.B hereof have been satisfied
or waived and (ii) that is the date on which the Plan is consummated.
1.31 "Equity Interest" means the Interest of each owner of Common Stock.
1.32 "Estate" means the estate of any of the Debtors in the Chapter 11
Cases, and "Estates" means, collectively, the estates of all the Debtors in the
Chapter 11 Cases, as created under section 541 of the Bankruptcy Code.
1.33 "Existing Securities" means, collectively, the Preferred Stock,
Common Stock, Senior Notes, and Warrants.
1.34 "Face Amount" means (a) when used in reference to a Disputed Claim,
the full stated amount claimed by the holder thereof in any proof of Claim
timely filed with the Bankruptcy Court, and (b) when used in reference to an
Allowed Claim, the allowed amount thereof.
1.35 "Final Order" means an order or judgment, entered by the Bankruptcy
Court or other court of competent jurisdiction, that has not been amended,
modified, or reversed, and as to which (i) no stay is in effect, (ii) the time
to seek rehearing or file a notice of appeal has expired, and (iii) no appeal or
request for a stay or other review is pending.
1.36 "General Unsecured Claim" means an unsecured Claim that is not
entitled to priority under section 507 of the Bankruptcy Code.
1.37 "Globix" means Globix Corporation, a Delaware Corporation.
1.38 "Impaired" means, when used with reference to a Claim or Interest, a
Claim or Interest that is impaired within the meaning of section 1124 of the
Bankruptcy Code.
1.39 "Indenture" means the indenture dated as of February 8, 2000, between
Globix and the Indenture Trustee, pursuant to which the Senior Notes were
issued, as such Indenture is or has been amended or supplemented from time to
time in accordance with the terms thereof.
1.40 "Indenture Trustee" means HSBC Bank USA or its successor, in either
case in its capacity as indenture trustee for the Senior Notes.
1.41 "Interest" means the legal, equitable, contractual and other rights
of any Person with respect to any capital stock or other ownership interest in
any Debtor, whether or not transferable, and any option, warrant or right to
purchase, sell, or subscribe for an ownership interest or other equity security
in any Debtor.
1.42 "Management Incentive Plan" means the management incentive plan
pursuant to which the Management Incentive Options will be issued, to be adopted
by Reorganized Globix pursuant to Article IV.C hereof.
1.43 "Management Incentive Plan Participants" means the employees of
Globix and any of its subsidiaries who will be participants in the Management
Incentive Plan.
PLAN-3
1.44 "Management Incentive Options" means the options to be issued by the
Reorganized Globix to the Management Incentive Plan Participants to purchase New
Common Stock pursuant to the provisions of the Management Incentive Plan.
1.45 "New Common Stock" means the new common stock to be issued by
Reorganized Globix under the Plan as of the Effective Date.
1.46 "New Notes" means the 11% Senior Secured Notes due 2008 of
Reorganized Globix, in the aggregate principal amount of $120 million, to be
issued and distributed pursuant to the Plan on the Distribution Date and
governed by the terms of the New Notes Indenture.
1.47 "New Notes Indenture" means the indenture to be entered into between
Reorganized Globix and an entity to be selected prior to the Effective Date,
as indenture trustee, under which the New Notes shall be issued, which
indenture shall be substantially in the form of the indenture attached hereto
as Exhibit A.
1.48 "New Securities" means, collectively, the New Common Stock and the
New Notes.
1.49 "Noteholders' Committee" means the informal committee of certain
holders of Senior Notes formed prior to the Petition Date, the members of which
include Romulus Holdings, Inc., Morgan Stanley Asset Management, MacKay Shields
LLC, and Goldman, Sachs & Co. Special Situations Investing, which committee
represents at least 51% in principal amount of the holders of Senior Notes.
1.50 "Other Priority Claim" means a Claim entitled to priority under
section 507(a) of the Bankruptcy Code other than a Priority Tax Claim or an
Administrative Claim.
1.51 "Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, limited
liability partnership, trust, estate, unincorporated organization, or other
entity.
1.52 "Petition Date" means March 1, 2002, the date on which the Debtors
filed their petitions for relief commencing the Chapter 11 Cases.
1.53 "Plan" means this plan of reorganization, as it may be amended,
modified, or supplemented from time to time.
1.54 "Plan Supplement" means the compilation of documents, including any
exhibits to the Plan not included herewith, that the Debtors may file with the
Bankruptcy Court on or before the date that is five (5) days prior to the
Confirmation Hearing.
1.55 "Postpetition Interest" means interest, accruing after the Petition
Date, on a Claim.
1.56 "Preferred Interest" means the Interest of each owner of the
Preferred Stock.
1.57 "Preferred Stock" means Globix's Series A 7.5% Convertible Preferred
Stock, par value $.01 per share, issued and outstanding immediately before the
Petition Date.
1.58 "Priority Tax Claim" means a Claim that is entitled to priority under
section 507(a)(8) of the Bankruptcy Code.
1.59 "Professional" means a professional person, as that term is used in
sections 327 and 1103 of the Bankruptcy Code.
1.60 "Professional Fee Claim" means a Professional's Claim for
compensation or reimbursement of costs and expenses relating to services
performed after the Petition Date and before and including the Effective Date.
1.61 "Pro Rata" means, at any time, the proportion that the Face Amount of
an Allowed Claim or Allowed Interest in a particular Class bears to the
aggregate Face Amount of all Claims or Interests (including Disputed Claims or
Disputed Interests, but excluding Disallowed Claims or Disallowed Interests) in
that Class, unless the Plan provides otherwise.
PLAN-4
1.62 "Registration Rights Agreement" means the agreement among Reorganized
Globix and certain holders of New Common Stock and New Notes who are or may be
deemed to be "affiliates" or "underwriters" of Reorganized Globix for purposes
of the Securities Act of 1933, governing the registration of New Common Stock
and New Notes, in substantially the form of the registration rights agreement
annexed hereto as Exhibit D.
1.63 "Reorganized _____," where _______ is Globix, Comstar or ATC, means
the identified entity on and after the Effective Date.
1.64 "Reorganized Debtor" means each of Reorganized Globix, Reorganized
Comstar, and Reorganized ATC, and "Reorganized Debtors" means all of them.
1.65 "Reorganized Globix Certificate of Incorporation and By-laws" means
Reorganized Globix's certificate of incorporation and by-laws in effect under
the laws of the State of Delaware, as amended by the Plan, substantially in the
form annexed hereto as Exhibits B-1 and B-2.
1.66 "Secured Claim" means a Claim that is secured by a lien that is
valid, perfected and enforceable, and not avoidable, upon property in which a
Debtor has an interest, to the extent of the value, as of the Effective Date, of
such interest or lien as determined by a Final Order of the Bankruptcy Court
pursuant to section 506 of the Bankruptcy Code or as otherwise agreed upon in
writing by a Debtor or Reorganized Debtor and the holder of such claim.
1.67 "Senior Notes" means the 12 1/2% Senior Notes issued under the
Indenture in the aggregate principal amount of $600,000,000, coming due on
February 1, 2010.
1.68 "Solicitation Order" means the Final Order of the Bankruptcy Court or
other court of competent jurisdiction providing, among other things, that Class
6 is deemed to have rejected the Plan and is not entitled to vote on the Plan.
1.69 "Subsidiary Common Stock Interests" means, collectively, the issued
and outstanding common stock of Comstar and ATC.
1.70 "Warrants" means all incentive stock options, non-qualified stock
options, and stock appreciation rights granted under any Debtor-sponsored stock
option plans, and any other options, warrants, or rights, contractual or
otherwise, if any (other than Preferred Stock), to acquire or receive an
Interest, authorized as of the Petition Date.
1.71 "Warrants Interest" means any Interest arising from or under the
Warrants.
C. Rules of Interpretation
1. General
In this Plan (a) any reference to a contract, instrument, release,
indenture, or other agreement or document as being in a particular form or on
particular terms and conditions means the agreement or document substantially in
that form or on those terms and conditions, (b) any reference to an existing
document or exhibit means that document or exhibit as it may have been or may be
amended, modified, or supplemented, (c) unless otherwise specified, all
references to Sections, Articles, Schedules, and Exhibits are references to
Sections, Articles, Schedules, and Exhibits of or to the Plan, (d) the words
"herein" and "hereto" refer to the Plan in its entirety rather than to a
particular portion of the Plan, (e) captions and headings to Articles and
Sections are for convenience of reference only and are not intended to be a part
of or to affect the interpretation of the Plan, and (f) the rules of
construction in section 102 of the Bankruptcy Code and in the Bankruptcy Rules
shall apply.
2. "Including"
As used in this Plan, "including" means "including without limitation."
3. "On"
With reference to any distribution under this Plan, "on" a date means on or
as soon as reasonably practicable after that date.
PLAN-5
D. Computation of Time
In computing any period of time prescribed or allowed by the Plan, the
provisions of Bankruptcy Rule 9006(a) shall apply.
ARTICLE II.
TREATMENT OF UNCLASSIFIED CLAIMS
In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Priority Tax Claims are not classified and are not
entitled to vote on the Plan.
A. Administrative Claims
Each holder of an Allowed Administrative Claim shall receive, on the latest
of (i) the Distribution Date, (ii) the date on which its Administrative Claim
becomes an Allowed Administrative Claim, or (iii) the date on which its
Administrative Claim becomes payable under any agreement relating thereto, Cash
equal to the unpaid portion of its Allowed Administrative Claim. Notwithstanding
the foregoing, (a) any Allowed Administrative Claim based on a liability
incurred by a Debtor in the ordinary course of business during the Chapter 11
Cases shall be paid in the ordinary course of business, in accordance with the
terms and conditions of any agreement relating thereto; and (b) any Allowed
Administrative Claim may be paid on such other terms as may be agreed on between
the holder of such claim and the Debtors.
B. Priority Tax Claims
On, or as soon as reasonably practicable after, the later of (i) the
Distribution Date or (ii) the date such Priority Tax Claim becomes an Allowed
Priority Tax Claim, each holder of an Allowed Priority Tax Claim shall receive
in full satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Priority Tax Claim, in the sole discretion of the Debtors, (a) Cash
equal to the unpaid portion of such Allowed Priority Tax Claim, (b) deferred
Cash payments over a period not exceeding six years after the date of assessment
of such Allowed Priority Tax Claim, of a value, as of the Effective Date, equal
to such Allowed Priority Tax Claim, or (c) such other treatment as to which the
Debtors and such holder shall have agreed upon in writing; provided, however,
that the Debtors reserve the right to pay any Allowed Priority Tax Claim, or any
remaining balance of any Allowed Priority Tax Claim, in full at any time on or
after the Distribution Date without premium or penalty; and provided further,
that no holder of an Allowed Priority Tax Claim shall be entitled to any
payments on account of any pre-Effective Date interest accrued on or penalty
arising after the Petition Date with respect to or in connection with such
Allowed Priority Tax Claim.
ARTICLE III.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS
A. Introduction
The Plan places all Claims and Interests, except Unclassified Claims
provided for in Article II, in the Classes listed below. A Claim or Interest is
placed in a particular Class only to the extent that it falls within the
description of that Class, and is classified in other Classes to the extent that
any portion thereof falls within the description of other Classes.
B. Summary of Classes
Class Impaired/Unimpaired; Entitlement to Vote
- --------------------------------------------------------------------------------
PLAN-6
Class 1 - Other Priority Claims Unimpaired - Deemed to have accepted the Plan and not
entitled to vote
Classes 2A, 2B, 2C, etc. - Secured Claims Unimpaired - Deemed to have accepted the Plan and not
entitled to vote
Class 3 - General Unsecured Claims Unimpaired - Deemed to have accepted the Plan and not
entitled to vote
Class 4 - Senior Note Claims Impaired - Entitled to vote
Class 5 - Preferred Interests Impaired - Entitled to vote
Class 6 - Equity Interests Impaired - If the Bankruptcy Court enters the Solicitation
Order, Class 6 will be deemed to have rejected the Plan
and therefore is not entitled to vote
Class 7 - Warrants Interests Impaired - Deemed to have rejected the Plan and not
entitled to vote
Class 8 - Subsidiary Common Stock Interests Unimpaired - Deemed to have accepted the Plan and not
entitled to vote
C. Treatment of Classes
1. Class 1 - Other Priority Claims
a. Claims in Class: Class 1 consists of all Other Priority Claims
against all Debtors.
b. Treatment: On the later of (i) the Distribution Date or (ii) the
date on which its Other Priority Claim becomes an Allowed Other Priority Claim,
each holder of an Allowed Other Priority Claim shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Class 1 Other Priority Claim, Cash equal to the full amount of its
Allowed Other Priority Claim.
2. Class 2 - Secured Claims
a. Claims in Class: Each sub-Class of Class 2 Secured Claims contains
a single Secured Claim, and in the aggregate include all Secured Claims against
all Debtors. Each sub-Class is a separate Class for all purposes under the
Bankruptcy Code and the Plan, including for voting purposes. If the Claim of a
holder of a Secured Claim exceeds the value of the collateral that secures it,
such holder will have a Secured Claim equal to the collateral's value and a
General Unsecured Claim for the deficiency.
b. Treatment: The legal, equitable, and contractual rights of the
holders of Secured Claims are unaltered by the Plan, or such Secured Claims
shall otherwise be rendered unimpaired pursuant to section 1124 of the
Bankruptcy Code.
3. Class 3 - General Unsecured Claims
a. Claims in Class: Class 3 consists of all General Unsecured Claims
against all Debtors other than claims in respect of Senior Notes classified in
Class 4.
b. Treatment: Each holder of an Allowed Class 3 General Unsecured
Claim shall, in full satisfaction, settlement, release, and discharge of and in
exchange for such Allowed Class 3 General Unsecured Claim, in the sole
discretion of the Debtors, (i) to the extent such Claim is due and owing on the
Effective Date, be paid in full in Cash on the later of the Effective Date and
the date such claim becomes an Allowed Claim, or shall otherwise be paid in
accordance with
PLAN-7
the terms of any agreement between the respective Debtor and such holder, (ii)
to the extent such Claim is not due and owing on the Effective Date, be paid in
full in Cash when and as such Claim becomes due and owing in the ordinary course
of business, or (iii) receive treatment that leaves unaltered the legal,
equitable, and contractual rights to which such Allowed Class 3 General
Unsecured Claim entitles the holder of such Claim.
4. Class 4 - Senior Note Claims
a. Claims in Class: Class 4 consists of any Claims directly or
indirectly arising from or under, or relating in any way to, Senior Notes.
b. Treatment: On or as soon as practicable after the Effective Date
each holder of an Allowed Class 4 Senior Note Claim shall receive, in full
satisfaction, settlement, release, and discharge of and in exchange for such
Allowed Class 4 Senior Note Claim, its Pro Rata share of (i) $120 million
principal amount of New Notes, and (ii) 13,991,000 shares of New Common Stock
(representing approximately 85 percent of the initial shares of New Common
Stock), subject to dilution by exercise of the Management Incentive Options. For
tax purposes, all New Common Stock and New Notes received by holders of Allowed
Class 4 Senior Note Claims in satisfaction of the Senior Notes will be allocated
first in full satisfaction of principal upon such Senior Notes and second in
satisfaction of any accrued unpaid interest. In consideration of the foregoing
treatment, on the Effective Date, effective as of the Confirmation Date, all
holders of Class 4 Senior Note Claims shall be deemed to release, and shall be
permanently enjoined from bringing any action against, the Debtors, the
Reorganized Debtors, and their respective members, officers, directors, agents,
financial advisors, attorneys, employees, equity holders, partners, affiliates
and representatives and their respective property, in respect of any claims,
obligations, rights, causes of action, and liabilities related to or arising
from any and all Class 4 Senior Note Claims.
5. Class 5 - Preferred Interests
a. Interests in Class: Class 5 consists of all Preferred Interests
in Globix and any Claims directly or indirectly arising from or under, or
relating in any way to, Preferred Stock.
b. Treatment: On the Effective Date Preferred Interests shall be
cancelled. On or as soon as practicable after the Effective Date each holder of
an Allowed Class 5 Preferred Interest shall receive, in full satisfaction,
settlement, release, and discharge of an in exchange for such Allowed Preferred
Interest, its Pro Rata share of 2,304,400 shares of New Common Stock
(representing approximately 14 percent of the initial shares of New Common
Stock), subject to dilution by exercise of the Management Incentive Options. In
consideration of the foregoing treatment, on the Effective Date, effective as of
the Confirmation Date, all holders of Class 5 Preferred Interests shall be
deemed to release, and shall be permanently enjoined from bringing any action
against, the Debtors, the Reorganized Debtors, and their respective members,
officers, directors, agents, financial advisors, attorneys, employees, equity
holders, partners, affiliates and representatives and their respective property,
in respect of any claims, obligations, rights, causes of action, and liabilities
related to or arising from any and all Class 5 Preferred Interests.
6. Class 6 - Equity Interests
a. Interests in Class: Class 6 consists of all Equity Interests in
Globix and any Claims directly or indirectly arising from or under, or relating
in any way to, Common Stock.
b. Treatment: On the Effective Date Equity Interests shall be
cancelled. On or as soon as practicable after the Effective Date each holder of
an Allowed Class 6 Equity Interest shall receive, in full satisfaction,
settlement, release, and discharge of an in exchange for such Allowed Equity
Interest, its Pro Rata share of 164,600 shares of New Common Stock (representing
approximately 1 percent of the initial shares of New Common Stock), subject to
dilution by exercise of the Management Incentive Options.
7. Class 7 - Warrants Interests
a. Interests in Class: Class 7 consists of all Warrants Interests
and any Claims directly or indirectly arising from or under, or relating in
any way to, Warrants.
PLAN-8
b. Treatment: On the Effective Date all Warrants Interests shall be
cancelled and the holders of Warrants Interests shall not receive or retain any
property or interest in property on account of their Class 7 Warrants Interests.
8. Class 8 - Subsidiary Common Stock Interests
a. Interests in Class: Class 8 consists of all Subsidiary Common
Stock Interests.
b. Treatment: The legal, equitable and contractual rights of Globix
in the Subsidiary Common Stock Interests are unaltered by the Plan.
D. Allowed Claims and Interests
Notwithstanding any provision herein to the contrary, the Debtors or
Reorganized Debtors shall only make distributions to holders of Allowed Claims
and Allowed Interests. No holder of a Disputed Claim or Disputed Interest will
receive any distribution on account thereof until and to the extent that its
Disputed Claim or Disputed Interest becomes an Allowed Claim or Allowed
Interest.
E. Postpetition Interest
In accordance with section 502(b)(2) of the Bankruptcy Code, the amount of
all Claims against the Debtors shall be calculated as of the Petition Date.
Except as otherwise explicitly provided herein or in an order of the Bankruptcy
Court, no holder of a Claim shall be entitled to or receive Postpetition
Interest.
F. Alternative Treatment
Notwithstanding any provision herein to the contrary, any holder of an
Allowed Claim may receive, instead of the distribution or treatment to which it
is entitled hereunder, any other distribution or treatment to which it and the
Debtors, with the consent of the Noteholders' Committee, may agree to in
writing.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Continued Corporate Existence
Reorganized Globix, Reorganized Comstar and Reorganized ATC shall continue
to exist after the Effective Date as separate corporate entities in accordance
with the applicable law in the applicable jurisdiction in which they are
incorporated, under their respective certificates of incorporation and by-laws
in effect before the Effective Date except as their certificates of
incorporation and by-laws are amended by this Plan. On the Effective Date, the
certificate of incorporation and by-laws of each Reorganized Debtor shall be
amended as necessary to satisfy the provisions of the Plan and the Bankruptcy
Code and shall include, among other things, pursuant to section 1123(a)(6) of
the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity
securities. In addition, the Reorganized Globix Certificate of Incorporation
shall include a provision authorizing the issuance of 500,000,000 shares of New
Common Stock.
B. Corporate Action
1. Cancellation Of Existing Securities and Agreements
As of the Effective Date, the certificates constituting the Existing
Securities will evidence solely the right to receive the distribution of the
consideration, if any, set forth in Article III.C. On the Effective Date, except
as otherwise provided for in the Plan, (i) the Existing Securities, to the
extent not already cancelled, shall be deemed cancelled and of no further force
or effect without any further action on the part of the Bankruptcy Court or any
Person and (ii) the obligations of Globix under the Existing Securities and
under Globix's certificate of incorporation, any agreements, indentures, or
certificates of designations governing the Existing Securities shall be
discharged; provided, however, that each indenture or other agreement that
governs the rights of the holder of a Claim based on the Existing Securities and
that is administered by an indenture
PLAN-9
trustee, agent, or servicer shall continue in effect solely for the purposes of
(a) allowing such indenture trustee, agent or servicer to make the distributions
to be made on account of such Claims under the Plan and (b) permitting such
indenture trustee, agent, or servicer to maintain any rights it may have for
fees, costs, and expenses under such indenture or other agreement. Additionally,
the cancellation of the Indenture shall not impair the rights and duties under
the Indenture as between the Indenture Trustee thereunder and the beneficiaries
of the trust created thereby. Additionally, as of the Effective Date, all
Interests other than Subsidiary Common Stock Interests, to the extent not
already cancelled, shall be cancelled.
Any actions taken by an indenture trustee, agent or servicer that are not
for the purposes authorized in this Article IV.B.1 shall not be binding upon the
Debtors. Except with respect to the making of distributions as provided in the
preceding paragraph, Reorganized Globix may, with or without cause, terminate
any indenture or other governing agreement and the authority of any indenture
trustee, agent or servicer to act thereunder at any time by giving five (5)
days' written notice of termination to the indenture trustee, agent, or
servicer. If distributions under the Plan on account of Class 4 Senior Note
Claims have not been completed at the time of termination of the Indenture or
other governing agreement, Reorganized Globix shall designate a distribution
agent to act in place of the indenture trustee, agent or servicer, and the
provisions of this Article IV.B.1 shall be deemed to apply to the new
distribution agent.
C. Restructuring Transactions
1. New Securities
a. Authorization
As of the Effective Date, the issuance by Reorganized Globix of (i) $120
million in principal amount of New Notes, and (ii) 500 million shares of New
Common Stock, is hereby authorized without further act or action under
applicable law, regulation, order or rule.
b. Issuance
The New Notes and New Common Stock, authorized pursuant to this Article
IV.C.1 hereof shall be issued by Reorganized Globix pursuant to the Plan without
further act or action under applicable law, regulation, order or rule. The
Management Incentive Options shall be issued by Reorganized Globix in accordance
with the Management Incentive Plan to be adopted by the compensation committee
of the board of directors of Reorganized Globix.
c. Reserve
Reorganized Globix shall reserve 1,828,889 shares of the New Common Stock
for issuance pursuant to the Management Incentive Options without further act or
action under applicable law, regulation, order or rule.
2. Registration Rights
Reorganized Globix and certain holders of shares of New Common Stock and
New Notes who may be deemed to be "underwriters" or "affiliates" for purposes of
the Securities Act of 1933 shall enter into the Registration Rights Agreement on
or prior to the Effective Date. Pursuant to the Registration Rights Agreement,
among other things, Reorganized Globix shall (i) within ninety days after the
Effective Date, prepare and file, and have declared effective as soon as
possible thereafter a registration statement or registration statements under
the Securities Act of 1933, as amended, for the offering on a continuous basis
pursuant to Rule 415 of the Securities Act of 1933, as amended, certain shares
of New Common Stock and New Notes (the "Registrable Securities") held by certain
"underwriters" or "affiliates" (the "Shelf Registration"), (ii) keep the Shelf
Registration effective for a period ending on the earlier of (a) the date on
which all covered securities have been sold pursuant to the Shelf Registration
or pursuant to Rule 144 under the Securities Act of 1933, as amended, (b)
subject to Section 4(c) of the Registration Rights Agreement, the date that is
the three-year anniversary of the date upon which the shelf registration
statement is declared effective by the Securities and Exchange Commission, and
(c) the date when there are no remaining Registrable Securities outstanding; and
(iii) use its reasonable best efforts to cause the New Common Stock to be quoted
in the national market system of the National Association of Securities Dealers'
Automated Quotation System.
PLAN-10
D. Directors and Officers
On the Effective Date, the term of the current board of directors of Globix
shall expire. The initial board of directors of Reorganized Globix after the
Effective Date shall consist of 7 members, which shall include 5 members to be
designated by the Noteholders' Committee, one member to be designated by the
holders of Preferred Interests, and Marc Bell, the current non-executive
chairman of the board, who will be designated Non-Executive Chairman. Globix
will identify the individuals proposed to serve as directors of Reorganized
Globix as well as any proposed changes to the existing management in the Plan
Supplement, which will be filed with the Bankruptcy Court on or before the date
that is five (5) days prior to the Confirmation Hearing. The board of directors
of Reorganized Globix shall have the responsibility for the management, control,
and operation of Reorganized Globix on and after the Effective Date. The
existing officers and directors of Comstar and ATC shall serve initially in
their current capacities for Reorganized Comstar and Reorganized ATC,
respectively, unless otherwise provided in the Plan Supplement.
E. Revesting of Assets
The property of each Debtor's Estate, together with any property of each
Debtor that is not property of its Estate and that is not specifically disposed
of pursuant to the Plan, shall revest in the applicable Reorganized Debtor on
the Effective Date. Thereafter, the Reorganized Debtors may operate their
businesses and may use, acquire, and dispose of property free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy
Court. As of the Effective Date, all property of the Reorganized Debtors shall
be free and clear of all Claims, encumbrances, Interests, charges and liens
except as specifically provided in the Plan or Confirmation Order. Without
limiting the generality of the foregoing, the Reorganized Debtors may, without
application to or approval by the Bankruptcy Court, pay professional fees and
expenses incurred after the Effective Date.
F. Preservation of Rights of Action; Settlement of Litigation Claims
Except as otherwise provided in this Plan or the Confirmation Order, or in
any contract, instrument, release, indenture or other agreement entered into in
connection with the Plan, in accordance with section 1123(b) of the Bankruptcy
Code, the Reorganized Debtors shall retain and may enforce, sue on, settle, or
compromise (or decline to do any of the foregoing) all claims, rights or causes
of action, suits, and proceedings, whether in law or in equity, whether known or
unknown, that the Debtors or their Estates may hold against any Person or
entity. The Reorganized Debtors or their successor(s) may pursue such retained
claims, rights or causes of action, suits, or proceedings as appropriate, in
accordance with the best interests of the Reorganized Debtors or their
successor(s) who hold such rights.
G. Effectuating Documents; Further Transactions
The chairman of the board of directors, president, chief financial officer,
or any other appropriate officer of each Debtor shall be authorized to execute,
deliver, file, or record such contracts, instruments, releases, indentures, and
other agreements or documents, and take such actions, as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan. The secretary or assistant secretary of the appropriate Debtor shall be
authorized to certify or attest to any of the foregoing actions.
H. Exemption from Certain Transfer Taxes
Pursuant to section 1146(c) of the Bankruptcy Code, any transfers from a
Debtor to a Reorganized Debtor or any other Person or entity pursuant to the
Plan shall not be subject to any document recording tax, stamp tax, conveyance
fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer
tax, mortgage recording tax, or other similar tax or governmental assessment,
and the Confirmation Order shall direct the appropriate state or local
governmental officials or agents to forego the collection of any such tax or
governmental assessment and to accept for filing and recordation any of the
foregoing instruments or other documents without the payment of any such tax or
governmental assessment.
PLAN-11
ARTICLE V.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Distributions for Claims and Interests Allowed as of the Effective Date
Except as otherwise provided herein or as ordered by the Bankruptcy Court,
distributions to be made on account of Claims or Interests that are Allowed
Claims or Allowed Interests as of the Effective Date shall be made on the
Distribution Date, or as soon thereafter as reasonably practicable. All Cash
distributions shall be made by the Disbursing Agent from available Cash of the
Reorganized Debtors. Any distribution under the Plan of property other than Cash
shall be made by the Disbursing Agent or the Indenture Trustee in accordance
with the terms of the Plan.
B. Disbursing Agent
The Disbursing Agent shall make all distributions required under this Plan
(subject to the provisions of Articles III, V, and VI hereof), except with
respect to a holder of a Claim whose distribution is governed by an indenture or
other agreement and is administered by an indenture trustee, agent, or servicer,
which distributions shall be deposited with the appropriate indenture trustee,
agent, or servicer, who shall deliver such distributions to the holders of
Claims in accordance with the provisions of this Plan and the terms of the
relevant indenture or other governing agreement.
If the Disbursing Agent is an independent third party designated by
Reorganized Globix to serve in such capacity (or, in the case of an indenture or
other agreement that governs distributions and is administered by an indenture
trustee, agent, or servicer), such Disbursing Agent, indenture trustee, agent,
or servicer shall receive, without further Bankruptcy Court approval, reasonable
compensation for distribution services rendered pursuant to the Plan and
reimbursement of reasonable out-of-pocket expenses incurred in connection with
such services from the Reorganized Debtors on terms acceptable to the
Reorganized Debtors. No Disbursing Agent shall be required to give any bond or
surety or other security for the performance of its duties unless otherwise
ordered by the Bankruptcy Court. If otherwise so ordered, all costs and expenses
of procuring any such bond shall be paid by the Reorganized Debtors.
C. Surrender of Securities or Instruments
On or before the Distribution Date, or as soon as reasonably practicable
thereafter, each holder of an instrument evidencing an Existing Security (a
"Certificate") shall surrender such Certificate to the Disbursing Agent, or,
with respect to the Senior Notes, the Indenture Trustee, and such Certificate
shall be cancelled. No distribution of property hereunder shall be made to or on
behalf of any such holder unless and until such Certificate is received by the
Disbursing Agent or the Indenture Trustee, as the case may be, or the
unavailability of such Certificate is reasonably established to the satisfaction
of the Disbursing Agent or Indenture Trustee, as the case may be. Any such
holder who fails to surrender or cause to be surrendered such Certificate or
fails to execute and deliver an affidavit of loss and indemnity reasonably
satisfactory to the Disbursing Agent or Indenture Trustee, as the case may be,
prior to the second anniversary of the Effective Date, shall be deemed to have
forfeited all rights and Claims or Interests in respect of such Certificate and
shall not participate in any distribution hereunder, and (i) all Cash in respect
of such forfeited distribution, including interest accrued thereon, shall revert
to Reorganized Globix and (ii) all New Common Stock or New Notes, as the case
may be, in respect of such forfeited distribution shall be cancelled
notwithstanding any federal or escheat laws to the contrary.
D. Instructions to Disbursing Agent
Prior to any distribution on account of a Class 4 Senior Note Claim, the
Indenture Trustee shall (i) inform the Disbursing Agent as to the amount of
properly surrendered Senior Notes, and (ii) inform the Disbursing Agent in a
properly completed letter of transmittal accompanying properly remitted
securities of the names of holders of Allowed Class 4 Senior Note Claims, and
the face amount of New Notes and/or number of shares of New Common Stock, as the
case may be, to be issued and distributed to or on behalf of such holders of
Allowed Class 4 Senior Note Claims in exchange for properly surrendered Senior
Notes.
PLAN-12
E. Services of Indenture Trustee
The Indenture Trustee's services with respect to consummation of the Plan
shall be as set forth in the Plan.
F. Record Date for Distributions to Holders of Senior Notes, Preferred Stock,
and Common Stock
At the close of business on the Distribution Record Date, the transfer
ledgers for the Senior Notes, Preferred Stock, and Common Stock shall be closed,
and there shall be no further changes in the record holders of such securities.
Reorganized Globix and the Disbursing Agent, if any, shall have no obligation to
recognize any transfer of any such securities occurring after the Distribution
Record Date and shall be entitled instead to recognize and deal for all purposes
hereunder with only those record holders sated on the transfer ledgers as of the
close of business on the Distribution Record Date.
G. Means of Cash Payment
Cash payments under this Plan shall be in U.S. funds, by the means agreed
to by the payor and the payee, including by check or wire transfer, or, in the
absence of an agreement, such commercially reasonable manner as the payor shall
determine in its sole discretion
H. Calculation of Distribution Amounts of New Common Stock
No fractional shares of New Common Stock shall be issued or distributed
under the Plan or by Reorganized Globix or any Disbursing Agent, indenture
trustee, agent, or servicer. Each Person entitled to receive New Common Stock
shall receive the total number of whole shares of New Common Stock to which such
Person is entitled. Whenever any distribution to a particular Person would
otherwise call for distribution of a fraction of a share of New Common Stock,
the Disbursing Agent shall allocate separately one whole share to such Person in
order of the fractional portion of their entitlements, starting with the largest
such fractional portion, until all remaining whole shares have been allocated.
Upon the allocation of a whole share to a Person in respect of the fractional
portion of its entitlement, such fractional portion shall be cancelled. If two
or more Persons are entitled to equal fractional entitlements and the number of
Persons so entitled exceeds the number of whole shares which remain to be
allocated, the Disbursing Agent shall allocate the remaining whole shares to
such holders by random lot or such other impartial method as the Disbursing
Agent deems fair. Upon the allocation of all of the whole shares authorized
under the Plan, all remaining fractional portions of the entitlements shall be
cancelled and shall be of no further force and effect. No shares of New Common
Stock will be issued and no other property will be distributed under the Plan or
by Reorganized Globix or any Disbursing Agent, indenture trustee, agent or
servicer on account of entitlements to a fractional share of New Common Stock
which fall below a threshold level to be determined by the Disbursing Agent
after allocation of whole shares in respect of entitlements to fractional shares
as described above. Accordingly, a person who otherwise would be entitled to
receive a distribution of a fractional share of New Common Stock will not
receive any such distribution if the number of fractional shares such person was
to receive falls below such threshold.
I. Delivery of Distributions; Undeliverable or Unclaimed Distributions
Distributions to holders of Allowed Claims shall be made by the Disbursing
Agent or the Indenture Trustee, as the case may be, (a) at the holder's last
known address, (b) at the address in any written notice of address change
delivered to the Disbursing Agent, (c) in the case of the holder of a Senior
Note Claim, at the address in the Indenture Trustee's official records, or (d)
set forth in a properly completed letter of transmittal accompanying a
Certificate properly remitted in accordance with the terms hereof. If any
holder's distribution is returned as undeliverable, no further distributions to
such holder shall be made, unless and until the Disbursing Agent or Indenture
Trustee is notified of such holder's then current address, at which time all
missed distributions shall be made to such holder without interest. Amounts in
respect of undeliverable distributions made through the Disbursing Agent or the
Indenture Trustee shall be returned to the appropriate Reorganized Debtor or the
Indenture Trustee, as the case may be, until such distributions are claimed. All
claims for undeliverable distributions must be made on or before the second
(2nd) anniversary of the Effective Date, after which date all unclaimed property
shall revert to the appropriate Reorganized Debtor free of any restrictions
thereon and the claim of any holder or successor to such holder with respect to
such property shall be discharged and forever barred, notwithstanding any
federal or state escheat laws to the contrary.
PLAN-13
J. Withholding and Reporting Requirements
In connection with this Plan and all distributions hereunder, the
Disbursing Agent shall, to the extent applicable, comply with all tax
withholding and reporting requirements imposed by any federal, state, local, or
foreign taxing authority, and all distributions hereunder shall be subject to
any such withholding and reporting requirements. The Disbursing Agent shall be
authorized to take all actions necessary or appropriate to comply with such
withholding and reporting requirements.
K. Setoffs
A Reorganized Debtor may, but shall not be required to, set off against any
Claim, and the payments or other distributions to be made pursuant to the Plan
in respect of such Claim, claims of any nature whatsoever that the Debtor or
Reorganized Debtor may have against the Claim's holder; provided, however, that
neither the failure to do so nor the allowance of any Claim hereunder shall
constitute a waiver or release by the Reorganized Debtor of any claim that the
Debtor or Reorganized Debtor may have against such holder. Nothing herein shall
be deemed to expand rights to setoff under applicable law.
ARTICLE VI.
PROCEDURES FOR RESOLVING DISPUTED,
CONTINGENT, AND UNLIQUIDATED CLAIMS
A. Objections to Claims; Disputed Claims
Except as otherwise provided in the Plan, holders of Claims and Interests
shall not be required to file proofs of Claim with the Bankruptcy Court, and no
parties should file proofs of Claim or proofs of Interests with the Bankruptcy
Court. The Debtors do not intend to object to the allowance of Claims and
Interests filed with the Bankruptcy Court. Instead, the Debtors intend to make
distributions, as required by the Plan, in accordance with the books and records
of the Debtors. Unless disputed by a holder of a Claim or Interest, the amount
set forth in the books and records of the Debtors shall constitute the amount of
the Allowed Claim or Allowed Interest of such holder. If any holder of a Claim
or Interest disagrees with the Debtors, such holders must so advise the Debtors
in writing, in which event, the Claim or Interest will be a Disputed Claim or a
Disputed Interest. The Debtors intend to attempt to resolve any such disputes
consensually, or through other judicial means outside the Bankruptcy Court.
Nevertheless, the Debtors may, in their discretion, file with the Bankruptcy
Court (or any other court of competent jurisdiction) an objection to the
allowance of any Claim or Interest, or any other appropriate motion or adversary
proceeding with respect thereto. All such objections will be litigated to Final
Order; provided, however, that the Debtors may compromise and settle, withdraw
or resolve by any other method approved by the Bankruptcy Court, any objections
to Claims or Interests. In addition, any Debtor may, at any time, request that
the Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to
section 502(c) of the Bankruptcy Code regardless of whether such Debtor has
previously objected to such Claim or whether the Bankruptcy Court has ruled on
any such objection, and the Bankruptcy Court will retain jurisdiction to
estimate any Claim at any time during litigation concerning any objection to any
Claim, including during the pendency of the any appeal relating to any such
objection. In the event the Bankruptcy Court estimates any contingent or
unliquidated Claim, that estimated amount will constitute either the Allowed
amount of such Claim or a maximum limitation on such Claim, as determined by the
Bankruptcy Court. If the estimated amount constitutes a maximum limitation on
such Claim, the Debtors may elect to pursue any supplemental proceedings to
object to any ultimate payment on such Claim. All of the aforementioned Claims
objection, estimation, and resolution procedures are cumulative and are not
necessarily exclusive of one another. Claims may be estimated and thereafter
resolved by any permitted mechanism.
B. No Distribution 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.
PLAN-14
C. Distributions After Allowance
To the extent that a Disputed Claim or Disputed Interest ultimately becomes
an Allowed Claim or Allowed Interest, a distribution shall be made to the holder
of such Allowed Claim or Allowed Interest in accordance with the provisions of
this Plan. As soon as reasonably practicable after the date that the order or
judgment of the Bankruptcy Court or other applicable court of competent
jurisdiction allowing any Disputed Claim or Disputed Interest becomes a Final
Order, the Disbursing Agent shall provide to the holder of such Claim or
Interest the distribution to which such holder is entitled under this Plan.
ARTICLE VII.
TREATMENT OF EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
A. Assumed Contracts and Leases
Except as otherwise provided in the Plan, or in any contract, instrument,
release, indenture, or other agreement or document entered into in connection
with the Plan, as of the Effective Date each Debtor shall be deemed to have
assumed each executory contract and unexpired lease to which it is a party,
unless such contract or lease (i) was previously assumed or rejected by the
Debtors, (ii) previously expired or terminated pursuant to its own terms, or
(iii) is the subject of a motion to reject filed on or before the Confirmation
Date. The Confirmation Order shall constitute an order of the Bankruptcy Court
under section 365 of the Bankruptcy Code approving the contract and lease
assumptions described above, as of the Effective Date.
Each executory contract and unexpired lease that is assumed and relates to
the use, ability to acquire, or occupancy of real property shall include (a) all
modifications, amendments, supplements, restatements, or other agreements made
directly or indirectly by any agreement, instrument, or other document that in
any manner affect such executory contract or unexpired lease and (b) all
executory contracts or unexpired leases appurtenant to the premises, including
all easements, licenses, permits, rights, privileges, immunities, options,
rights of first refusal, powers, uses, usufructs, reciprocal easement
agreements, vaults, tunnel or bridge agreements or franchises, and any other
interests in real estate or rights in rem related to such premises, unless any
of the foregoing agreements has been rejected pursuant to an order of the
Bankruptcy Court.
B. Payments Related to Assumption of Contracts and Leases
Any monetary amounts by which any executory contract and unexpired lease to
be assumed under the Plan is in default shall be satisfied, under section
365(b)(1) of the Bankruptcy Code, at the option of the Debtor party to the
contract or lease or its assignee, by Cure. If there is a dispute regarding (i)
the nature or amount of any Cure, (ii) the ability of a Reorganized Debtor or
any assignee to provide "adequate assurance of future performance" (within the
meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed, or (iii) any other matter pertaining to assumption, Cure shall occur
following the entry of a Final Order of the Bankruptcy Court resolving the
dispute and approving the assumption or assumption and assignment, as the case
may be.
C. Rejected Contracts and Leases
Except as otherwise provided in the Plan or in any contract, instrument,
release, indenture or other agreement or document entered into in connection
with the Plan, none of the executory contracts and unexpired leases to which a
Debtor is a party shall be rejected under the Plan; provided, however, that the
Debtors reserve the right, at any time prior to the Confirmation Date, to seek
to reject any executory contract or unexpired lease to which any Debtor is a
party.
D. Claims Based on Rejection of Executory Contracts or Unexpired Leases
All Claims arising out of the rejection of executory contracts and
unexpired leases must be served upon the appropriate Reorganized Debtor and its
counsel within sixty (60) days after the earlier of (i) the date of entry of an
order of the Bankruptcy Court approving such rejection, or (ii) the Confirmation
Date. Any Claims not served within such times will be forever barred from
assertion against the respective Reorganized Debtor, its Estate, and its
property.
PLAN-15
E. Compensation and Benefit Plans and Treatment of Retirement Plan
Except and to the extent previously assumed by an order of the Bankruptcy
Court, on or before the Confirmation Date, all employee compensation and benefit
plans of the Debtors, including programs subject to sections 1114 and
1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition
Date and not since terminated, shall be deemed to be, and shall be treated as if
they were, executory contracts that are assumed under Article VII.A hereof, and
the Debtors' obligations under such programs to Persons shall survive
confirmation of this Plan, except for (i) executory contracts or employee
benefit plans specifically rejected pursuant to the Plan (to the extent such
rejection does not violate sections 1114 and 1129(a)(13) of the Bankruptcy Code)
and (ii) such executory contracts or employee benefit plans as have previously
been rejected, are the subject of a motion to reject as of the Confirmation
Date, or have been specifically waived by the beneficiaries of any employee
benefit plan or contract; provided, however, that the Debtors' obligations, if
any, to pay all "retiree benefits" as defined in section 1114(a) of the
Bankruptcy Code shall continue.
ARTICLE VIII.
ACCEPTANCE OR REJECTION OF THE PLAN
A. Classes Entitled To Vote
Each Impaired Class of Claims or Interests that will (or may) receive or
retain property or any interest in property under the Plan, other than Class 6
Equity Interests, is entitled to vote to accept or reject the Plan. By operation
of law, each unimpaired Class of Claims or Interests is deemed to have accepted
the Plan and, therefore, is not entitled to vote. Because holders of Claims in
Classes that are not entitled to receive or retain any property under the Plan
are presumed to have rejected the Plan, they are not entitled to vote. The
Debtors have requested that the Bankruptcy Court enter the Solicitation Order
waiving the requirement, if any, to solicit acceptances or rejections of the
Plan from holders of Equity Interests and deeming such holders of Class 6 Equity
Interests to have rejected the Plan. If the Solicitation Order is entered, Class
6 will be deemed to have rejected the Plan and therefore will not be entitled to
vote to accept or reject the Plan.
B. Acceptance by Impaired Classes
An Impaired Class of Claims shall have accepted the Plan if (i) the holders
of at least two-thirds in amount of the Allowed Claims actually voting in the
Class have voted to accept the Plan, and (ii) the holders of more than one-half
in number of the Allowed Claims actually voting in the Class have voted to
accept the Plan, in each case not counting the vote of any holder designated
under section 1126(e) of the Bankruptcy Code. An Impaired Class of Interests
shall have accepted the Plan if the holders (other than any holder designated
under section 1126(e) of the Bankruptcy Code) of at least two-thirds in amount
of the Allowed Interests actually voting in such Class have voted to accept the
Plan.
C. Elimination of Classes
Any Class that does not contain any Allowed Claims or Interests or any
Claims or Interests temporarily allowed for voting purposes under Bankruptcy
Rule 3018, as of the date of the commencement of the Confirmation Hearing, shall
be deemed to have been deleted from this Plan for purposes of (i) voting to
accept or reject this Plan and (ii) determining whether it has accepted or
rejected this Plan under section 1129(a)(8) of the Bankruptcy Code.
D. Cramdown
To the extent necessary, the Debtors shall request confirmation of the
Plan, as it may be modified from time to time, under section 1129(b) of the
Bankruptcy Code. The Debtors reserve the right to modify the Plan to the extent,
if any, that confirmation pursuant to section 1129(b) of the Bankruptcy Code
requires modification.
PLAN-16
ARTICLE IX.
SECURITIES TO BE ISSUED
IN CONNECTION WITH THE PLAN
On or before the Distribution Date, Reorganized Globix shall issue for
distribution in accordance with the provisions of the Plan the New Notes and New
Common Stock required for distribution pursuant to the provisions hereof. All
securities to be issued shall be deemed issued as of the Effective Date
regardless of the date on which they are actually distributed. The form of
indenture governing the New Notes is annexed hereto as Exhibit A. A description
of the terms of the New Common Stock is annexed hereto as Exhibit C.
ARTICLE X.
CONDITIONS PRECEDENT TO THE PLAN'S
CONFIRMATION AND CONSUMMATION
A. Conditions to Confirmation
The Plan's Confirmation is subject to the satisfaction or due waiver of the
following condition precedent:
The proposed Confirmation Order shall be in form and substance
reasonably acceptable to the Debtors, the Noteholders' Committee, and
the holders of Preferred Stock.
B. Conditions to Effective Date
The following are conditions precedent to the occurrence of the Effective
Date, each of which must be satisfied or waived in accordance with Article X.C
below:
1. The Confirmation Order, in form and substance reasonably acceptable to
the Debtors, Noteholders' Committee, and the holders of Preferred Stock, must
have become a Final Order and must, among other things, provide that:
a. the Debtors and Reorganized Debtors are authorized and directed to
take all actions necessary or appropriate to enter into, implement, and
consummate the contracts, instruments, releases, leases, indentures, and other
agreements or documents created in connection with the Plan;
b. the provisions of the Confirmation Order are non-severable and
mutually dependent;
c. all executory contracts or unexpired leases assumed or assumed and
assigned by the Debtors during the Chapter 11 Cases or under the Plan shall
remain in full force and effect for the benefit of the Reorganized Debtors or
their assignees notwithstanding any provision in such contract or lease
(including those described in sections 365(b)(2) and (f) of the Bankruptcy Code)
that prohibits such assignment or transfer or that enables, permits, or requires
termination of such contract or lease;
d. the transfers of property by the Debtors (i) to the Reorganized
Debtors (a) are or will be legal, valid, and effective transfers of property,
(b) vest or will vest the Reorganized Debtors with good title to such property
free and clear of all liens, charges, Claims, encumbrances, or Interests, except
as expressly provided in the Plan or Confirmation Order, (c) do not and will not
constitute avoidable transfers under the Bankruptcy Code or under applicable
bankruptcy or nonbankruptcy law, and (d) do not and will not subject the
Reorganized Debtors to any liability by reason of such transfer under the
Bankruptcy Code or under applicable nonbankruptcy law, including, without
limitation, any laws affecting successor, transferee or stamp or recording tax
liability and (ii) to holders of Claims or Interests under the Plan are for good
consideration and value;
e. except as expressly provided in the Plan, the Debtors are discharged
effective upon the Confirmation Date from any "debt" (as that term is defined in
section 101(12) of the Bankruptcy Code), and the Debtors' liability in respect
thereof is extinguished completely, whether reduced to judgment or not,
liquidated or unliquidated, contingent or
PLAN-17
noncontingent, asserted or unasserted, fixed or unfixed, matured or unmatured,
disputed or undisputed, legal or equitable, or known or unknown, or that arose
from any agreement of the Debtors that has either been assumed or rejected in
the Chapter 11 Cases or pursuant to the Plan, or obligation of the Debtors
incurred before the Confirmation Date, or from any conduct of the Debtors prior
to the Confirmation Date, or that otherwise arose before the Confirmation Date,
including, without limitation, all interest, if any, on any such debts, whether
such interest accrued before or after the Petition Date;
f. the Plan does not provide for the liquidation of all or substantially
all of the property of the Debtors and its Confirmation is not likely to be
followed by the liquidation of the Reorganized Debtors or the need for further
financial reorganization;
g. all Equity Interests and other Interests in Globix shall be cancelled
effective upon the Effective Date; and
h. the New Notes and New Common Stock issued under the Plan in exchange
for Claims and Interests are exempt from registration under the Securities Act
of 1933 pursuant to section 1145 of the Bankruptcy Code, except to the extent
that any holders of New Notes and New Common Stock are "underwriters," as that
term is defined in section 1145 of the Bankruptcy Code.
2. All authorizations, consents, and regulatory approvals required, if any,
in connection with the consummation of the Plan shall have been obtained.
3. The following agreements, in form reasonably satisfactory to the
Debtors, Noteholders' Committee, and the holders of Preferred Stock shall have
been executed and delivered, and all conditions precedent thereto shall have
been satisfied:
a. Reorganized Globix Certificate of Incorporation and By-laws;
b. New Notes Indenture; and
c. Registration Rights Agreement.
4. The Debtors shall have executed and delivered all documents necessary to
effectuate the issuance of the New Notes and New Common Stock.
5. All other actions, documents, and agreements necessary to implement the
Plan shall have been effected or executed.
C. Waiver of Conditions
Each of the conditions set forth in Article X.B above, other than as set
forth in Article X.B.1, may be waived in whole or in part by Globix with the
consent of the Noteholders' Committee and the holders of Preferred Stock,
without any notice to parties in interest or the Bankruptcy Court and without a
hearing. The failure to satisfy or waive any condition to the Effective Date may
be asserted by Globix with the consent of the Noteholders' Committee and the
holders of Preferred Stock regardless of the circumstances giving rise to the
failure of such condition to be satisfied (including any action or inaction by
Globix). The failure of Globix to exercise any of the foregoing rights shall not
be deemed a waiver of any other rights, and each such right shall be deemed an
ongoing right that may be asserted at any time.
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS; WITHDRAWAL
Globix may alter, amend, or modify this Plan or any exhibits hereto under
section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation
Date. Globix reserves the right to include any amended exhibits in the Plan
Supplement. After the Confirmation Date and prior to substantial consummation of
the Plan, as defined in section 1101(2) of the Bankruptcy Code, Globix may,
under section 1127(b) of the Bankruptcy Code, institute proceedings in the
Bankruptcy Court to remedy any defect or omission or reconcile any
inconsistencies in the Plan, the Disclosure Statement, or the Confirmation
Order, and
PLAN-18
to accomplish such matters as may be necessary to carry out the purposes and
effects of the Plan so long as such proceedings do not materially adversely
affect the treatment of holders of Claims or Interests under the Plan; provided,
however, that prior notice of such proceedings shall be served in accordance
with the Bankruptcy Rules or order of the Bankruptcy Court.
ARTICLE XII.
RETENTION OF JURISDICTION
Under sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding
the Plan's Confirmation and the occurrence of the Effective Date, the Bankruptcy
Court shall retain exclusive jurisdiction (except with respect to the purposes
described under clause (A) below, with respect to which jurisdiction shall not
be exclusive) over all matters arising out of or related to the Chapter 11 Cases
and the Plan, to the fullest extent permitted by law, including jurisdiction to:
A. To determine any and all objections to the allowance of Claims or
Interests;
B. To determine any and all motions to estimate Claims at any time,
regardless of whether the Claim to be estimated is the subject of a pending
objection, a pending appeal, or otherwise;
C. To determine any and all motions to subordinate Claims or Interests
at any time and on any basis permitted by applicable law;
D. Hear and determine all Professional Fee Claims and other
Administrative Claims;
E. Hear and determine all matters with respect to the assumption or
rejection of any executory contract or unexpired lease to which a Debtor is a
party or with respect to which a Debtor may be liable, including, if necessary,
the nature or amount of any required Cure or the liquidation of any Claims
arising therefrom;
F. Hear and determine any and all adversary proceedings, motions,
applications, and contested or litigated matters arising out of, under, or
related to, the Chapter 11 Cases;
G. Enter such orders as may be necessary or appropriate to execute,
implement, or consummate the provisions of the Plan and all contracts,
instruments, releases, and other agreements or documents created in connection
with the Plan, the Disclosure Statement or the Confirmation Order;
H. Hear and determine disputes arising in connection with the
interpretation, implementation, consummation, or enforcement of the Plan and all
contracts, instruments, and other agreements executed in connection with the
Plan;
I. Hear and determine any request to modify the Plan or to cure any
defect or omission or reconcile any inconsistency in the Plan or any order of
the Bankruptcy Court;
J. Issue and enforce injunctions or other orders, or take any other
action that may be necessary or appropriate to restrain any interference with
the implementation, consummation, or enforcement of the Plan or the Confirmation
Order;
K. Enter and implement such orders as may be necessary or appropriate if
the Confirmation Order is for any reason reversed, stayed, revoked, modified, or
vacated;
L. Hear and determine any matters arising in connection with or relating
to the Plan, the Disclosure Statement, the Confirmation Order or any contract,
instrument, release, or other agreement or document created in connection with
the Plan, the Disclosure Statement or the Confirmation Order;
M. Enforce all orders, judgments, injunctions, releases, exculpations,
indemnifications and rulings entered in connection with the Chapter 11 Cases;
N. Recover all assets of the Debtors and property of the Debtors'
Estates, wherever located;
PLAN-19
O. Hear and determine matters concerning state, local, and federal taxes
in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;
P. Hear and determine all disputes involving the existence, nature, or
scope of the Debtors' discharge;
Q. Hear and determine such other matters as may be provided in the
Confirmation Order or as may be authorized under, or not inconsistent with,
provisions of the Bankruptcy Code; and
R. Enter a final decree closing the Chapter 11 Cases.
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to Bankruptcy Rule 9019(a), the Debtors may, with the consent of
the Noteholders' Committee while it exists, compromise and settle various Claims
against them and/or claims they may have against other Persons. The Debtors
expressly reserve the right (with Bankruptcy Court approval, following
appropriate notice and opportunity for a hearing) to compromise and settle
Claims against it and claims that it may have against other Persons up to and
including the Effective Date. After the Effective Date, such right shall pass to
the Reorganized Debtors pursuant to Articles IV.E and IV.F hereof.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Bar Date for Professional Fee Claims
All final requests for compensation or reimbursement of Professional Fees
pursuant to sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code
for services rendered to the Debtors or any Committee (if appointed) prior to
the Effective Date must be filed and served only on the Reorganized Debtors and
their counsel, as well as those parties filing notices of appearance in these
cases or otherwise request notice of such application, no later than 45 days
after the Effective Date, unless otherwise ordered by the Bankruptcy Court.
Objections to applications of such Professionals or other entities for
compensation or reimbursement of expenses must be filed and served on the
Reorganized Debtors and their counsel and the requesting Professional or other
entity no later than 45 days (or such longer period as may be allowed by order
of the Bankruptcy Court) after the date on which the applicable application for
compensation or reimbursement was served.
B. Payment of Statutory Fees
All fees payable under section 1930 of title 28 of the United States Code,
as determined by the Bankruptcy Court at the Confirmation Hearing, shall be paid
on or before the Effective Date. All such fees that arise after the Effective
Date but before the closing of the Chapter 11 Cases shall be paid by the
Reorganized Debtors.
C. Severability of Plan Provisions
If, prior to Confirmation, any term or provision of the Plan is held by the
Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at
the request of the Debtors, 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 of the
Plan 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 of the Plan, as it may have been altered or
interpreted in accordance with the foregoing, is valid and enforceable pursuant
to its terms.
PLAN-20
D. Successors and Assigns
The rights, benefits and obligations of any Person named or referred to in
the Plan shall be binding on, and shall inure to the benefit of, any heir,
executor, administrator, successor or assign of that Person.
E. Discharge of the Debtors and Injunction
All consideration distributed under the Plan shall be in exchange for, and
in complete satisfaction, settlement, discharge, and release of, all Claims
against and Interests in the Debtors of any nature whatsoever or against any of
the Debtor's assets or properties. Except as otherwise expressly provided in the
Plan, entry of the Confirmation Order acts as a discharge of all Claims against,
liens on, and Interests in each of the Debtors, the Debtors' assets, and their
properties, arising at any time before the entry of the Confirmation Order,
regardless of whether a proof of Claim or proof of Interest therefor was filed,
whether the Claim or Interest is Allowed, or whether the holder thereof votes to
accept the Plan or is entitled to receive a distribution thereunder, subject to
the occurrence of the Effective Date. Upon entry of the Confirmation Order, and
subject to the occurrence of the Effective Date, any holder of such discharged
Claim or Interest shall be precluded from asserting against the Debtors or any
of their assets or properties any other or further Claim or Interest based upon
any document, instrument, act, omission, transaction, or other activity of any
kind or nature that occurred before the date of entry of the Confirmation Order.
The Confirmation Order shall be a judicial determination of discharge of all
liabilities of the Debtors, subject to the occurrence of the Effective Date.
In accordance with section 524 of the Bankruptcy Code, the discharge
provided by this section and section 1141 of the Bankruptcy Code shall act as an
injunction against the commencement or continuation of any action, employment of
process, or act to collect, offset, or recover the Claims and Interest
discharged hereby. Except as otherwise expressly provided in this Plan or the
Confirmation Order, all Persons who have held, hold, or may hold Claims against,
or Interests in, the Debtors will be permanently enjoined, on and after the
Effective Date, from (i) commencing or continuing in any manner any action or
other proceeding of any kind with respect to any such Claim or Interest, (ii)
the enforcement, attachment, collection, or recovery by any manner or means of
any judgment, award, decree, or order against the Debtors on account of any such
Claim or Interest, (iii) creating, perfecting, or enforcing any encumbrance of
any kind against the Debtors or against the property or interests in property of
the Debtors on account of any such Claim or Interest, and (iv) asserting any
right of setoff, subrogation, or recoupment of any kind against any obligation
due from the Debtors or against the property or interests in property of the
Debtors on account of any such Claim or Interest. The foregoing injunction will
extend to successors of the Debtors (including, without limitation, the
Reorganized Debtors) and their respective properties and interests in property.
F. Debtors' Releases
On the Effective Date, effective as of the Confirmation Date, the Debtors
shall release and be permanently enjoined from any prosecution or attempted
prosecution of any and all causes of action which they have or may have against
any present or former director, officer, or employee of the Debtors relating to
the Chapter 11 Cases or the Plan; provided, however, that the foregoing shall
not operate as a waiver of or release from any causes of action arising out of
(i) any express contractual obligation owing by any such director, officer, or
employee of the Debtors or (ii) the willful misconduct or gross negligence of
such director, officer, or employee in connection with, related to, or arising
out of the Chapter 11 Cases, the pursuit of Confirmation of the Plan, the
consummation of the Plan, the administration of the Plan, or the property to be
distributed under the Plan.
On the Effective Date, effective as of the Confirmation Date, the Debtors
shall release and be permanently enjoined from any prosecution or attempted
prosecution of any and all claims and causes of action, including any claims or
causes of action under Chapter 5 of the Bankruptcy Code, which they have or may
have against any holder of Preferred Stock or Senior Notes and its respective
members, officers, directors, agents, financial advisors, attorneys, employees,
equity holders, partners, affiliates and representatives and their respective
property in connection with actions taken as or in its capacity of being a
holder of the Preferred Stock or Senior Notes.
G. Other Releases
On the Effective Date, effective as of the Confirmation Date, and except as
otherwise provided herein or in the Confirmation Order, the Debtors, Reorganized
Debtors, the Noteholders' Committee, each holder of the Senior Notes, each
holder of Preferred Stock, and the Indenture Trustee, and each of their
respective members, officers, directors, agents,
PLAN-21
financial advisors, attorneys, employees, equity holders, partners, affiliates
and representatives and their respective property shall be released from any and
all claims, obligations, rights, causes of action, and liabilities which the
Debtors, Reorganized Debtors, or any holder of a Claim against or Interest in
any Debtor may be entitled to assert, whether for tort, fraud, contract,
violations of federal or state securities laws, or otherwise, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, based in whole
or in part upon any act or omission, transaction, or other occurrence taking
place on or before the Confirmation Date, in any way relating to the Chapter 11
Cases or the Plan, or otherwise; provided, however, that nothing shall release
any Person from any claims, obligations, rights, causes of action, or
liabilities based upon any act or omission in connection with, relating to, or
arising out of, the Chapter 11 Cases, the solicitation of acceptances of the
Plan, the pursuit of Confirmation of the Plan, the consummation of the Plan, the
administration of the Plan, or the property to be distributed under the Plan
arising out of such Person's gross negligence or willful misconduct.
On the Effective Date, effective as of the Confirmation Date, all holders
of Class 4 Senior Note Claims that voted in favor of the Plan and all holders of
Class 5 Preferred Interests that voted in favor of the Plan shall be deemed to
release, and shall be permanently enjoined from bringing any action against, the
Debtors, the Reorganized Debtors, and their respective members, officers,
directors, agents, financial advisors, attorneys, employees, equity holders,
partners, affiliates and representatives and their respective property, in
respect of any claims, obligations, rights, causes of action, and liabilities
related to or arising from any and all Class 4 Senior Note Claims or Class 5
Preferred Interests.
H. Exculpation and Limitation of Liability
The Reorganized Debtors, the Noteholders' Committee, each holder of the
Senior Notes, and the holders of Preferred Stock, and any and all of their
respective present or former members, officers, directors, employees, equity
holders, partners, affiliates, advisors, attorneys, or agents, or any of their
successors or assigns, shall not have or incur any liability to any holder of a
Claim or an Interest, or any other party in interest, or any of their respective
agents, employees, equity holders, partners, members, representatives, financial
advisors, attorneys, or affiliates, or any of their successors or assigns, for
any act or omission in connection with, relating to, or arising out of, the
administration of the Chapter 11 Cases, the solicitation of acceptances of the
Plan, the pursuit of confirmation of the Plan, the consummation of the Plan, or
the administration of the Plan or the property to be distributed under the Plan,
except for their willful misconduct or gross negligence, and in all respects
shall be entitled to reasonably rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan.
Notwithstanding any other provision of this Plan, no holder of a Claim or
Interest, no other party-in-interest, none of their respective agents,
employees, equity holders, partners, members, representatives, financial
advisors, attorneys, or affiliates, and no successors or assigns of the
foregoing, shall have any right of action against the Reorganized Debtors, the
Estates, any Committee, any holder of Preferred Stock, or the Noteholders'
Committee, or any of their respective present or former members, officers,
directors, employees, equity holders, partners, or affiliates, or any of their
successors or assigns, for any act or omission in connection with, relating to,
or arising out of, the administration of the Chapter 11 Cases, the solicitation
of acceptances of the Plan, the pursuit of confirmation of the Plan, the
consummation of the Plan, or the administration of the Plan or the property to
be distributed under the Plan, except for their willful misconduct or gross
negligence.
I. Waiver of Enforcement of Subordination
All Claims against and Interests in the Debtors and all rights and claims
between or among holders of Claims and Interests relating in any manner
whatsoever to Claims against and Interests in the Debtors, based upon any
claimed subordination rights (if any), shall be deemed satisfied by the
distributions under the Plan to holders of Claims and Interests having such
subordination rights, and such subordination rights shall be deemed waived,
released, discharged, and terminated as of the Effective Date. Distributions to
the various Classes of Claims and Interests hereunder shall not be subject to
levy, garnishment, attachment, or like legal process by any holder of a Claim by
reason of any claimed subordination rights or otherwise, so that each holder of
a Claim or Interest shall have and receive the benefit of the distributions in
the manner set forth in the Plan.
J. Term of Injunctions or Stays
Unless otherwise provided herein or in the Confirmation Order, all
injunctions or stays in effect in the Chapter 11 Cases under sections 105 or 362
of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the
Confirmation Date (excluding any injunctions or stays contained in this Plan or
the Confirmation Order), shall remain in full force and effect
PLAN-22
until the Effective Date. All injunctions or stays contained in this Plan or the
Confirmation Order shall remain in full force and effect in accordance with
their terms.
K. Binding Effect
The Plan shall be binding upon and inure to the benefit of the Debtors, all
present and former holders of Claims against and Interests in the Debtors, their
respective successors and assigns, including the Reorganized Debtors, and all
other parties-in-interest in the Chapter 11 Cases.
L. Revocation, Withdrawal, or Non-Consummation
The Debtors reserve the right to revoke or withdraw the Plan at any time
prior to the Confirmation Date and to file other plans of reorganization. If the
Debtors revoke or withdraw the Plan, or if Confirmation or consummation of the
Plan does not occur, then (i) the Plan shall be null and void in all respects,
(ii) any settlement or compromise embodied in the Plan (including the fixing or
limiting to an amount any Claim or Class of Claims), assumption or rejection of
executory contracts or leases effected by the Plan, and any document or
agreement executed pursuant to the Plan shall be deemed null and void, and (iii)
nothing contained in the Plan, and no acts taken in preparation for consummation
of the Plan, shall (a) constitute or be deemed to constitute a waiver or release
of any Claims by or against, or any Interests in, the Debtors or any other
Person, (b) prejudice in any manner the rights of the Debtors or any Person in
any further proceedings involving the Debtors, or (c) constitute an admission of
any sort by the Debtors or any other Person.
M. Committees
On the Effective Date, the duties of any Committee shall terminate.
N. Plan Supplement
Any and all exhibits, lists, or schedules referred to herein but not filed
with the Plan shall be contained in the Plan Supplement and filed with the Clerk
of the Bankruptcy Court at least five days prior to the date of the commencement
of the Confirmation Hearing. Thereafter, any Person may examine the Plan
Supplement in the office of the Clerk of the Bankruptcy Court during normal
court hours. Holders of Claims or Interests may obtain a copy of the Plan
Supplement upon written request to the Debtors in accordance with Article XIV.O
hereof.
O. Notices to Debtors
Any notice, request, or demand required or permitted to be made or provided
to or upon a Debtor or a Reorganized Debtor under the Plan shall be (i) in
writing, (ii) served by (a) certified mail, return receipt requested, (b) hand
delivery, (c) overnight delivery service, (d) first class mail, or (e) facsimile
transmission, and (iii) 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:
GLOBIX CORPORATION
139 Centre Street
New York, New York 10013
Attn: William A. Austin, Esq.
Telephone: (212) 334-8500
Facsimile: (212) 625-7474
with copies to:
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Four Times Square
New York, New York 10036-6552
Attn: Jay M. Goffman
Frederick D. Morris
Telephone: (212) 735-3000
PLAN-23
Facsimile: (212) 735-2000
-and-
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899-0636
Attn: Gregg M. Galardi
Robert A. Weber
Telephone: (302) 651-3000
Facsimile: (302) 651-3001
P. Indemnification Obligations
Except as otherwise specifically limited in this Plan, any obligations or
rights of the Debtors or Reorganized Debtors to defend, indemnify, reimburse, or
limit the liability of the Debtors' present and former directors, officers or
employees (the "Covered Persons") pursuant to the Debtors' or Reorganized
Debtors' certificates of incorporation, by-laws, policy of providing employee
indemnification, applicable state law, or specific agreement in respect of any
claims, demands, suits, causes of action, or proceedings against such Covered
Persons based upon any act or omission related to such Covered Persons' service
with, for, or on behalf of the Debtors prior to the Effective Date, shall
survive Confirmation of this Plan and remain unaffected thereby, and shall not
be discharged, irrespective of whether such defense, indemnification,
reimbursement, or limitation of liability is owed in connection with an
occurrence before or after the Petition Date; provided, however, that except as
set forth in this paragraph, the rights and obligations of the Reorganized
Debtors in respect of the foregoing shall be satisfied solely from coverage
afforded under any applicable director, officer and corporation liability
insurance policies of the Debtors in effect as of the Petition Date (the "D&O
Insurance"), up to the limits thereof. In the allocation of any loss arising
from a claim or claims for which payment is due under the D&O Insurance, as
between the Covered Persons and the Debtors, such payment or benefits will be
allocated first to the Covered Persons. In addition to the indemnification
obligations described in the preceding sentences, the indemnification
obligations of the Reorganized Debtors to Covered Persons shall also include (i)
the payment of all retentions under the D&O Insurance, (ii) the payment of legal
expenses to persons who are directors, officers and employees as of January 11,
2002 (in respect of any position currently or formerly held by them), as well as
any additional persons agreed to by the Noteholders' Committee and the holders
of the Preferred Stock that are identified in the Plan Supplement, in connection
with matters that are covered under the D&O Insurance, to the extent that such
expenses are not advanced under the D&O Insurance, and (iii) notwithstanding the
foregoing limitation, full indemnification to persons who are directors,
officers and employees as of January 11, 2002 (in respect of any position
currently or formerly held by them), as well as any additional persons agreed to
by the Noteholders' Committee and the holders of the Preferred Stock that are
identified in the Plan Supplement, in respect of any and all liability and
expenses incurred as a result of actions or claims which may be asserted by
holders of Class 4 Senior Note Claims or Class 5 Preferred Interests arising out
of or in connection with their being holders of Senior Notes or Preferred
Interests. Nothing in this Article shall be construed to limit the effect of any
existing right that the Covered Persons may have directly from the D&O
Insurance. Any indemnification obligations of the Debtors to Covered Persons
that are not satisfied pursuant to this paragraph shall be discharged in
accordance with subsection E of this Article and Sections 524 and 1141 of the
Bankruptcy Code.
Q. Governing Law
Unless a rule of law or procedure is supplied by federal law (including the
Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Delaware
shall govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with the Plan and (ii) the
laws of the state of incorporation of each Debtor shall govern corporate
governance matters with respect to such Debtor, in either case without giving
effect to the principles of conflicts of law thereof.
PLAN-24
R. Prepayment
Except as otherwise provided in this Plan or the Confirmation Order, the
Debtors shall have the right to prepay, without penalty, all or any portion of
an Allowed Claim at any time; provided, however, that any such prepayment shall
not be violative of, or otherwise prejudice, the relative priorities and
parities among the Classes of Claims.
S. Section 1125(e) of the Bankruptcy Code
As of the Confirmation Date, the Debtors shall be deemed to have solicited
acceptances of this Plan in good faith and in compliance with the applicable
provisions of the Bankruptcy Code. The Debtors and each of their respective
affiliates, agents, directors, officers, employees, investment bankers,
financial advisors, attorneys, and other professionals have participated in good
faith and in compliance with the applicable provisions of the Bankruptcy Code in
the offer and issuance of the New Securities under this 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 this Plan or the
offer and issuance of New Securities under this Plan.
PLAN-25
Dated: Wilmington, Delaware
April 8, 2002
GLOBIX CORPORATION
COMSTAR.NET, INC.
ATC MERGER CORP.
Debtors and Debtors-in-Possession
By: /s/
----------------------------------------------
Gregory Leahy
General Counsel
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Globix Corporation., et al.
Debtors-in-Possession
By: /s/
----------------------------------------------
Jay M. Goffman
Frederick D. Morris
Four Times Square
New York, New York 10036-6522
(212) 735-3000
-and-
By: /s/
---------------------------------------------
Gregg M. Galardi (I.D. No. 2991)
Robert A. Weber (I.D. No. 4013)
P.O. Box 636
One Rodney Square
Wilmington, Delaware 19899
(302) 651-3000
ALL EXHIBITS HAVE PREVIOUSLY BEEN FILED
AS EXHIBITS TO THE ORIGINAL PLAN, FILED
ON OR ABOUT MARCH 3, 2002, OR AS EXHIBITS
TO THE PLAN SUPPLEMENT, FILED ON OR
ABOUT APRIL 3, 2002.