Exhibit 99.1
KIRKLAND & ELLIS LLP
Citigroup Center
153 East 53rd Street
New York, New York 10022-4675
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Richard L. Wynne (RW-5630)
KIRKLAND & ELLIS LLP
777 South Figueroa Street
Los Angeles, California 90017
Telephone: (213) 680-8400
Facsimile: (213) 680-8500
Sharon M. Kopman (SK-3295)
Reorganization Counsel for Debtors and
Debtors in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- ------------------------------------------ x Chapter 11
In re: :
: Case No. 03-15261 (SMB)
DDI CORP., et al., :
: (Jointly Administered with Case No.
Debtors. : 03-15260)
- ------------------------------------------ x
DEBTORS' AMENDED FIRST AMENDED JOINT PLAN OF REORGANIZATION
DATED AS OF AUGUST 30, 2003
TABLE OF CONTENTS
I. INTRODUCTION........................................................................1
II. DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION...............................2
2.1 Definitions.................................................................2
2.2 Rules of Construction......................................................28
2.3 Plan Documentary Supplement................................................29
2.4 Exhibits...................................................................29
III. JOINT PLAN; NO SUBSTANTIVE CONSOLIDATION...........................................29
IV. UNCLASSIFIED CLAIMS................................................................30
4.1 Administrative Claims......................................................30
4.2 Superpriority Administrative Expense Claim.................................32
4.3 Priority Tax Claims........................................................32
4.4 Indenture Trustee Fee Claim................................................32
V. CLASSIFICATION OF CLAIMS AND INTERESTS.............................................33
5.1 General Overview...........................................................33
VI. PROVISIONS FOR THE TREATMENT OF CLAIMS AND INTERESTS...............................34
6.1 Class 1 - Allowed Class 1 Claims (Unimpaired)..............................34
6.2 Class 2 - Other Secured Claims (Unimpaired)................................35
6.3 Class 3 - Other Priority Claims (Unimpaired)...............................35
6.4 Class 4 - Allowed Unsecured Claims Not Classified in Classes 5, 6a or 6b
(Unimpaired)...............................................................36
6.5 Class 5 - Allowed Class 5 Claims - Senior Discount Notes (Impaired)........36
6.6 Class 6a - Allowed Class 6a Claims - 5.25% Convertible Subordinated
Notes (Impaired)...........................................................37
6.7 Class 6b - Allowed Class 6b Claims - 6.25% Convertible Subordinated
Notes (Impaired)...........................................................37
6.8 Class 7 - Allowed Equity Interests - Existing DDi Corp. Common Stock
(Impaired).................................................................38
VII. ACCEPTANCE OR REJECTION OF THE PLAN................................................38
7.1 Introduction...............................................................38
7.2 Who May Object to Confirmation of the Plan.................................39
7.3 Who May Vote to Accept/Reject the Plan.....................................39
VIII. MEANS FOR IMPLEMENTING THE PLAN....................................................40
8.1 Introduction...............................................................40
8.2 The Reorganized Debtors....................................................41
8.3 Issuance of New Common Stock...............................................41
8.4 Issuance of Secured Lender Warrants........................................41
8.5 Issuance of Senior Discount Warrants.......................................42
8.6 Issuance of Management Options Under Management Incentive Plan.............42
8.7 Issuance of New Preferred Stock or New DDi Corp. Preferred Stock...........43
i
8.8 Amended and Restated Articles or Certificate of Incorporation or
Charter and Bylaws.........................................................43
8.9 Treatment of the Senior Debt Parties Under the Pre-Restructuring Loan
Documents..................................................................44
8.10 Treatment of the Senior Discount Note Holders..............................44
8.11 Funding of the Plan........................................................45
8.12 Management/Board of Directors..............................................45
8.13 Corporate Actions..........................................................48
8.14 Revesting of Assets........................................................49
8.15 Cancellation of Existing Securities and Agreements.........................49
8.16 Preservation of Rights of Action; Settlement of Litigation Claims..........50
IX. DISTRIBUTIONS......................................................................51
9.1 Distribution Agent.........................................................51
9.2 Distributions..............................................................51
9.3 Old Instruments and Securities.............................................52
9.4 De Minimis Distributions and Fractional Shares.............................53
9.5 Delivery of Distributions..................................................53
9.6 Undeliverable Distributions................................................54
9.7 Disposition of Unclaimed Property..........................................55
9.8 Effect of Distribution Record Date.........................................56
9.9 Setoffs....................................................................56
X. OBJECTIONS TO CLAIMS AND DISPUTED CLAIMS...........................................57
10.1 Objections to Claims.......................................................57
10.2 Treatment of Disputed Claims...............................................57
XI. EFFECT OF CONFIRMATION OF PLAN.....................................................57
11.1 Discharge..................................................................57
11.2 Injunction.................................................................58
XII. LIMITATION OF LIABILITY AND RELEASES...............................................59
12.1 No Liability for Solicitation or Participation.............................59
12.2 Good Faith Finding.........................................................59
12.3 Exculpation/Limitation of Liability........................................59
12.4 Debtors' Releases and Injunction...........................................60
12.5 Releases and Injunction....................................................61
XIII. CONDITIONS TO CONFIRMATION AND EFFECTIVENESS.......................................63
13.1 Conditions Precedent to Plan Confirmation..................................63
13.2 Conditions Precedent to Plan Effectiveness.................................63
13.3 Waiver of Conditions.......................................................64
XIV. RETENTION OF JURISDICTION..........................................................64
14.1 Retention of Jurisdiction..................................................64
XV. MODIFICATION OR WITHDRAWAL OF PLAN.................................................66
15.1 Modification of Plan.......................................................66
15.2 Termination Events.........................................................66
15.3 Nonconsensual Confirmation.................................................67
ii
XVI. MISCELLANEOUS......................................................................67
16.1 Payment of Statutory Fees..................................................67
16.2 Payment Dates..............................................................67
16.3 Headings...................................................................67
16.4 Other Documents and Actions................................................68
16.5 Notices....................................................................68
16.6 Governing Law..............................................................70
16.7 Binding Effect.............................................................70
16.8 Successors and Assigns.....................................................70
16.9 No Waiver..................................................................71
16.10 Exemption from Securities Laws.............................................71
16.11 Inconsistencies............................................................71
16.12 Exemption from Certain Transfer Taxes and Recording Fees...................71
16.13 Post-Confirmation Conversion/Dismissal.....................................72
16.14 Final Decree...............................................................72
iii
Exhibits
Exhibit 1 - Term Sheet for Management Incentive Plan
Exhibit 2 - Term Sheet for Common Equity
Exhibit 3 - Term Sheet for Preferred Equity
Exhibit 4 - Term Sheet for Senior Discount Notes
Exhibit 5 - Term Sheet for the Restructuring of the Pre-Restructuring Bank
Indebtedness
Exhibit 6 - Summary of Terms and Conditions of Financial Restructuring of
DDi Corp. and its Affiliates
Exhibit 7 - Plan Support Agreement (as amended)
Exhibit 8 - Senior Discount Note Holder Plan Support Agreement
List Of Plan Documents To Be Filed After The Petition Date
Document Date Filed
- -------- ----------
Secured Lender Warrant Agreement At least 10 business days prior to
Confirmation Hearing
Senior Discount Warrant Agreement At least 10 business days prior to
Confirmation Hearing
New DDi Corp. Guarantee and Pledge At least 10 business days prior to
Agreement Confirmation Hearing
New Senior Accreting Note Indenture At least 10 business days prior to
Confirmation Hearing
Management Incentive Plan At least 10 business days prior to
Confirmation Hearing
Amended and Restated DDi Corp. At least 10 business days prior to
Certificate of Incorporation Confirmation Hearing
Amended and Restated DDi Corp. Bylaws At least 10 business days prior to
Confirmation Hearing
Amended and Restated DDi Corp. At least 10 business days prior to
Articles of Incorporation Confirmation Hearing
Amended and Restated DDi Europe At least 10 business days prior to
Articles of Association (to be Confirmation Hearing
effective only if the Modified
Structure is not implemented)
Any Other Plan Documents Deemed At least 10 business days prior to
Necessary Confirmation Hearing
iv
I. INTRODUCTION
On August 20, 2003 (the "Petition Date"), DDi, Corp., a Delaware
corporation ("DDi Corp.) and DDi Capital Corp., a California corporation (DDi
Capital, and together with DDi Corp., the "Debtors" and "Debtors-in-Possession"
and each a "Debtor" and "Debtor-in-Possession"), filed separate voluntary
petitions under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York (collectively, the
"Chapter 11 Cases"). Each of the Debtors is a holding company that operates
through their non-debtor operating subsidiaries. As of the Petition Date,
Debtors' total North American debt equaled approximately $300 million,
consisting of approximately $210.6 million in principal plus accrued and unpaid
interest owing by DDi Corp. to the Holders of the Convertible Subordinated Notes
(as defined below), approximately $17.7 million in principal plus accrued and
unpaid interest owing by DDi Capital to Holders of the Senior Discount Notes (as
defined below) and a guarantee of the Pre-Restructuring Bank Indebtedness (as
defined below) by DDi Capital and substantially all of DDi Capital's
subsidiaries. On August 21, 2003, the United States Bankruptcy Court entered an
order authorizing the joint administration of the Debtors' Chapter 11 Cases.
The document that you are reading is the Debtors' First Amended Joint Plan
of Reorganization dated as of August 30, 2003. The Plan (as defined below)
provides for the preservation of the Debtors' businesses through a comprehensive
reorganization and debt recapitalization. Under the Plan, the claims of
creditors will be paid, either in full or in part, through issuance of cash,
debt or equity interests in Reorganized DDi Corp. (as defined below) and DDi
Europe (as defined below) and will otherwise be discharged.
Sent to you in the same envelope with this document is the Debtors' Joint
Disclosure Statement. The Disclosure Statement (as defined below) has been
approved by the Bankruptcy Court and it is being provided along with the Plan in
order to provide you with critical information about the Debtors and to help you
understand the Plan. The Disclosure Statement discusses the Debtors' history,
businesses, properties, and results of operations and contains a summary and
discussion of this Plan. Holders of Claims (as defined below) and Equity
Interests (as defined
1
below) are encouraged to read the Disclosure Statement. No solicitation
materials, other than the Disclosure Statement and related materials transmitted
therewith and approved for solicitation purposes by the Bankruptcy Court, have
been authorized for use in soliciting acceptances or rejections of this Plan.
The Ad Hoc Convertible Note Holder Committee (as defined below), DDi
Europe, DDi Intermediate Holdings Corp., Dynamic Details, Incorporated and
Dynamic Details, Incorporated, Silicon Valley are co-sponsors of the Plan (the
"Co-Sponsors"), with the rights of Plan proponents. This means that these groups
have participated in the development of the Plan, and they have agreed to
perform certain obligations in connection with the Plan provided that the Plan
is confirmed by the Bankruptcy Court and certain other conditions are satisfied.
II. DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
2.1 Definitions.
The following defined terms are used in this document. Any capitalized term
used but not defined herein, but that is defined in the Bankruptcy Code or the
Bankruptcy Rules, shall have the meaning ascribed to it in the Bankruptcy Code
or Bankruptcy Rules.
2.1.1 5.25% Convertible Subordinated Debt Parties. The 5.25%
Convertible Subordinated Note Holders, the 5.25% Underwriters and the 5.25%
Trustee.
2.1.2 5.25% Convertible Subordinated Notes. The 5.25% Convertible
Subordinated Notes due 2008 issued by DDi Corp.
2.1.3 5.25% Convertible Subordinated Note Indenture. That certain
subordinated indenture dated as of February 20, 2001 (as amended, restated,
supplemented, or otherwise modified from time to time prior to the Effective
Date), by and between DDi Corp. and the 5.25% Trustee, pursuant to which the
5.25% Convertible Subordinated Notes were issued.
2.1.4 5.25% Convertible Subordinated Note Holders. All Holders of the
5.25% Convertible Subordinated Notes.
2
2.1.5 5.25% Trustee. U.S. Bank National Association, as successor in
interest to The State Street Bank and Trust Company, in its capacity as
indenture trustee under the 5.25% Convertible Subordinated Note Indenture.
2.1.6 5.25% Underwriters. Credit Suisse First Boston Corp. and
Robertson Stephens, Inc. as underwriters of the 5.25% Convertible Subordinated
Notes.
2.1.7 6.25% Convertible Subordinated Debt Parties. The 6.25%
Convertible Subordinated Note Holders, the 6.25% Underwriters and the 6.25%
Trustee.
2.1.8 6.25% Convertible Subordinated Notes. The 6.25% Convertible
Subordinated Notes due 2007 issued by DDi Corp.
2.1.9 6.25% Convertible Subordinated Note Indenture. That certain
indenture dated as of April 2, 2002 (as amended, restated, supplemented, or
otherwise modified from time to time prior to the Effective Date), by and
between DDi Corp. and the 6.25% Trustee, pursuant to which the 6.25% Convertible
Subordinated Notes were issued.
2.1.10 6.25% Convertible Subordinated Note Holders. All Holders of the
6.25% Convertible Subordinated Notes.
2.1.11 6.25% Trustee. U.S. Bank National Association, as successor in
interest to The State Street Bank and Trust Company, in its capacity as
indenture trustee under the 6.25% Convertible Subordinated Note Indenture.
2.1.12 6.25% Underwriters. Robertson Stephens, Inc. and JPMorgan
Securities, Inc. as underwriters of the 6.25% Convertible Subordinated Notes.
2.1.13 Ad Hoc Convertible Note Holder Committee. The group of Holders
of Convertible Subordinated Notes who formed a committee chaired by Tablerock
Fund Management, LLC. and represented by Stutman, Treister & Glatt Professional
Corporation.
2.1.14 Ad Hoc Senior Discount Note Holder Committee. The group of
Holders of the Senior Discount Notes, AIG Global Investment Corp. and JPMorgan
Partners (BHCA), L.P., who formed a committee represented by Hahn & Hessen LLP.
3
2.1.15 Ad Hoc Committees. Collectively, the Ad Hoc Convertible Note
Holder Committee and Ad Hoc Senior Discount Note Holder Committee.
2.1.16 Administrative Agent. JPMorgan Chase Bank (formerly known as
The Chase Manhattan Bank), in its capacity as the arranger of the Commitments
(as defined in the Pre-Restructuring Loan Documents), and as collateral,
co-syndication, and administrative agent for the Secured Lenders.
2.1.17 Administrative Claim. Any Claim for any cost or expense of
administration of the Cases allowable under section 330, 331, 503(b), or
507(a)(1) of the Bankruptcy Code, and the fees and expenses relating to the Ad
Hoc Committees, including without limitation, any actual and necessary
post-petition expenses of preserving the Estates of the Debtors, any actual and
necessary post-petition expenses of operating the business of the Debtors in
Possession including post-petition taxes, all compensation or reimbursement of
expenses to the extent allowed by the Bankruptcy Court under sections 330, 331,
or 503 of the Bankruptcy Code, the fees and expenses of each Professional
retained by the Ad Hoc Committees which retentions have been approved by the
Debtors and the Required Lenders, and the expenses of the members of the Ad Hoc
Committees as each would be allowed under section 503(b) of the Bankruptcy Code
if the Ad Hoc Committees were official committees under section 1102 of the
Bankruptcy Code, and any fees or charges assessed against the Estates of the
Debtors under section 1930 of Title 28 of the United States Code.
2.1.18 Administrative Claims Bar Date. The last date or dates fixed by
the Plan or the Bankruptcy Court for filing proofs or requests for payment of
certain Administrative Claims pursuant to Section 4.1.2 of the Plan, Rule
3003(c)(3) of the Bankruptcy Rules, or any order of the Bankruptcy Court.
2.1.19 Affiliate. "Affiliate" shall have the meaning set forth in
section 101(2) of the Bankruptcy Code.
2.1.20 Allowed. When used to describe aClaim or Claims, such Claim or
Claims to the extent that it or they are an "Allowed Claim" or "Allowed Claims."
4
2.1.21 Allowed Class 1 Claims. Each of the Secured Lenders shall, for
purposes of distribution and treatment under the Plan, be deemed to have an
Allowed Claim under Class 1 for DDi Capital's guarantee of the Pre-Restructuring
Loan Documents and Pre-Restructuring Bank Indebtedness, which guarantee is
secured by a pledge of the stock of Details, and need not file a proof of claim
with respect thereto.
2.1.22 Allowed Class 5 Claims. A beneficial owner of the Senior
Discount Notes of record as of the Effective Date shall, for purposes of
distribution and treatment under the Plan, be deemed to have an Allowed Claim
under Class 5 for the outstanding principal amount of the Senior Discount Notes
and the Existing Senior Discount Note Indenture owned by such beneficial owner
plus accrued and unpaid interest as of the Petition Date, and need not file a
proof of claim with respect thereto.
2.1.23 Allowed Class 6a Claims. A beneficial owner of the 5.25%
Convertible Subordinated Notes of record as of the Effective Date shall, for
purposes of distribution and treatment under the Plan, be deemed to have an
Allowed Claim under Class 6a for the outstanding principal amount of the 5.25%
Convertible Subordinated Notes and the 5.25% Convertible Subordinated Note
Indenture owned by such beneficial owner plus accrued and unpaid interest as of
the Petition Date, and need not file a proof of claim with respect thereto.
2.1.24 Allowed Class 6b Claims. A beneficial owner of the 6.25%
Convertible Subordinated Notes of record as of the Effective Date shall, for
purposes of distribution and treatment under the Plan, be deemed to have an
Allowed Claim under Class 6b for the outstanding principal amount of the 6.25%
Convertible Subordinated Notes and the 6.25% Convertible Subordinated Note
Indenture owned by such beneficial owner plus accrued and unpaid interest as of
the Petition Date, and need not file a proof of claim with respect thereto.
2.1.25 Allowed Amount shall mean:
(i) with respect to any Administrative Claim (i) if the Claim is
based upon a Fee Application, the amount of such Fee Application that has been
approved by a Final Order of the Bankruptcy Court;(ii) if the Claim is
based upon any indebtedness or obligation
5
incurred in the ordinary course of business of the Debtors and is not otherwise
subject to an Administrative Claim Bar Date, the amount of such Claim that has
been agreed to by the Debtors and such creditor, failing which, the amount
thereof as fixed by a Final Order of the Bankruptcy Court; or (iii) if the
Holder of such Claim was required to file and has filed proof thereof with the
Bankruptcy Court prior to an Administrative Claim Bar Date, (l) the amount
stated in such proof if no objection to such proof of claim is interposed within
the applicable period of time fixed by the Bankruptcy Code, the Bankruptcy Rules
or the Bankruptcy Court, or (2) the amount thereof as fixed by Final Order of
the Bankruptcy Court if an objection to such proof was interposed within the
applicable period of time fixed by the Bankruptcy Code, the Bankruptcy Rules or
the Bankruptcy Court. The Allowed Amount of any Administrative Claim which is
subject to an Administrative Claims Bar Date and not filed by the applicable
Administrative Claims Bar Date shall be zero, and no distribution shall be made
on account of any such Administrative Claim;
(ii) with respect to any Claim which is not an Administrative
Claim, a Deficiency Claim, Allowed Class 1 Claim, Allowed Class 5 Claim, Allowed
Class 6a Claim or Allowed Class 6b Claim (all "Other Claim"): (i) if the Holder
of such Other Claim did not file proof thereof with the Bankruptcy Court on or
before the Claims Bar Date, the amount of such Claim as listed in the Debtors'
Schedules as neither disputed, contingent or unliquidated; or (ii) if the Holder
of such Claim has filed proof thereof with the Bankruptcy Court on or before the
Claims Bar Date, (a) the amount stated in such proof if no objection to such
proof of claim was interposed within the applicable period of time fixed by the
Bankruptcy Code, the Bankruptcy Rules, the Plan or the Bankruptcy Court, or (b)
the amount thereof as fixed by Final Order of the Bankruptcy Court if an
objection to such proof was interposed within the applicable period of time
fixed by the Bankruptcy Code, the Bankruptcy Rules, the Plan or the Bankruptcy
Court. The Allowed Amount of any Other Claim which is not filed by the
applicable Claims Bar Date, is not listed on the Debtors' Schedules, is listed
as disputed, unliquidated, contingent, unknown or in a zero amount or is not
allowed under the terms of the Plan, shall be zero, and no distribution shall be
made on account of any such Claim;
6
(iii) with respect to any Deficiency Claim, the amount thereof as
fixed by Final Order of the Bankruptcy Court. The Allowed Amount of any
Deficiency Claim which is not filed by the Claims Bar Date shall be zero, and no
distribution shall be made on account of any such Deficiency Claim;
(iv) with respect to any Allowed Class 5 Claims, Allowed Class 6a
Claims and Allowed Class 6b Claims, the outstanding principal amount plus any
accrued and unpaid interest due under their respective agreements as of the
Petition Date, as the case may be;
(v) with respect to the Allowed Class 1 Claims in the aggregate,
the amount of $72,892,916.17 plus fees and interest thereon; and
(vi) with respect to any Equity Interest, (i) the amount provided
by or established in the records of the Debtors at the Confirmation Date,
provided, however, that a timely filed proof of Equity Interest shall supersede
any listing of such Equity Interest on the records of the Debtors; or (ii) the
amount stated in a proof of Equity Interest filed prior to the Confirmation Date
if no objection to such Equity Interest was filed prior to the Confirmation Date
or such later date as the Bankruptcy Court allows; or (iii) the amount of such
Equity Interest as fixed by a Final Order of the Bankruptcy Court.
2.1.26 Allowed Claim. Except as otherwise provided in this Plan
(including with respect to those Classes for which the amount of the Allowed
Claims is specified by this Plan), a Claim to the extent (and only to the
extent) of the Allowed Amount of such Claim.
2.1.27 Allowed Claim or Allowed Class Claim. A Claim of the type
specified or in the Class specified that is also an Allowed Claim (i.e., an
Allowed Secured Claim is a Secured Claim that is also an Allowed Claim, and an
Allowed Class 3 Claim is a Claim classified in Class 3 that is an Allowed
Claim).
2.1.28 Allowed Equity Interest. Any Equity Interest to the extent, and
only to the extent, of the Allowed Amount of such Equity Interest.
2.1.29 Allowed Superpriority Administrative Expense Claim. An Allowed
Administrative Expense Claim of the Secured Lenders pursuant to Sections
503((b)(1), 507(a)
7
and 507(b) of the Bankruptcy Code with priority in payment over any and all
administrative expenses of the kinds specified or ordered pursuant to any
provision of the Bankruptcy Code including, without limitation, sections 105,
326, 328, 330, 331 and 726 of the Bankruptcy Code, and shall at all times be
senior to the rights of the Debtors, and any successor trustee or any creditor
in the Chapter 11 Cases or any subsequent proceedings under the Bankruptcy Code.
2.1.30 Amended and Restated DDi Corp. Bylaws. The amended and restated
Bylaws for Reorganized DDi Corp., which shall be in the form attached as an
Exhibit to the Plan Documentary Supplement.
2.1.31 Amended and Restated DDi Corp. Certificate of Incorporation.
The amended and restated certificate of incorporation of Reorganized DDi Corp.,
which shall be in the form attached as an Exhibit to the Plan Documentary
Supplement.
2.1.32 Amended and Restated DDi Europe Articles of Association. The
amended and restated articles of association of DDi Europe, which shall be in
the form attached as an Exhibit to the Plan Documentary Supplement.
2.1.33 Ballots. Each of the ballot forms distributed with the
Disclosure Statement to each Holder of an impaired Claim or Equity Interest
(other than to Holders not entitled to vote on the Plan) upon which is to be
indicated among other things, acceptance or rejection of the Plan.
2.1.34 Bankruptcy Code. The Bankruptcy Reform Act of 1978, as amended,
as set forth in Title 11 of the United States Code, 11 U.S.C. (S)(S) 101 et
seq., as applicable to the Cases.
2.1.35 Bankruptcy Court. The United States Bankruptcy Court for the
Southern District of New York, having jurisdiction over the Cases and, to the
extent of any withdrawal of the reference made pursuant to section 157 of Title
28 of the United States Code, the United States District Court for the Southern
District of New York, or, in the event such courts cease to exercise
jurisdiction over the Cases, such court or unit thereof that exercises
jurisdiction over the Cases in lieu thereof.
8
2.1.36 Bankruptcy Rules. Collectively, as now in effect or thereafter
amended and as applicable to the Cases, (i) the Federal Rules of Bankruptcy
Procedure, and (ii) the Local Bankruptcy Rules and General Orders applicable to
cases pending before the Bankruptcy Court.
2.1.37 Borrowers. Dynamic Details, Incorporated, a California
corporation, and Dynamic Details, Incorporated, Silicon Valley, a Delaware
corporation, as borrowers under the Pre-Restructuring Loan Documents.
2.1.38 BOS. The Governor and Company of the Bank of Scotland, in its
various capacities under the BOS Credit Facility.
2.1.39 BOS Consent. The consent of BOS, pursuant to the BOS Credit
Facility, to the issuance of New Preferred Stock by DDi Europe, which shall be
in form and substance reasonably satisfactory to the Co-Sponsors and the
Required Lenders; provided, however, that if BOS consents to the issuance of the
New Preferred Stock that is in strict conformity with the terms and conditions
set forth in Exhibit "3" attached hereto and no other terms and conditions of
such consent shall modify the terms and conditions set forth in such Exhibit
"3", such consent shall be deemed in form and substance reasonably satisfactory
to the Required Lenders provided that a copy of such consent shall have been
provided to the Secured Lenders within a reasonable time prior to it becoming
effective.
2.1.40 BOS Credit Facility. That certain Amended and Restated
Facilities Agreement dated as of May 27, 1999 by and between DDi Europe and BOS.
2.1.41 Budget and Funding Agreement. That certain Budget and Funding
Agreement, dated as of August 1, 2003 by and among the Debtors, Details, DDISV,
each Subsidiary Guarantor (as defined therein), the Administrative Agent and the
Professionals (as defined therein) signatory thereto.
2.1.42 Business Day. Any day, other than a Saturday, a Sunday or a
"legal holiday," as defined in Bankruptcy Rule 9006(a).
2.1.43 Cases. The Chapter 11 cases commenced by the Debtors on the
Petition Date and pending before the Bankruptcy Court.
9
2.1.44 Cash. Currency of the United States of America and cash
equivalents, including, but not limited to, bank deposits, immediately available
or cleared checks, drafts, wire transfers and other similar forms of payment.
2.1.45 Causes of Action. All actions, causes of action, omissions,
courses of conduct, suits, debts, dues, sums of money, accounts, reckoning,
bonds, bills, specialties, covenants, contracts, variances, trespasses, damages,
judgments, extents, executions, controversies, agreements, promises, rights to
legal remedies, rights to equitable remedies, rights to payments, Claims and
demands whatsoever in law, admiralty, equity or otherwise, whether known or
unknown, reduced to judgment, not reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured and whether asserted or assertable directly or derivatively in law,
equity or otherwise.
2.1.46 Claim. All claims (as such term is defined in Section 101(5) of
the Bankruptcy Code), counterclaims, setoffs, recoupment, demands, causes of
action, obligations, damages, liabilities, indebtedness, obligations, debts (as
such term is defined in Section 101(13) of the Bankruptcy Code), demands,
guaranties, options, rights, contractual commitments, restrictions, interests
and matters of any kind and nature, and whether imposed by agreement,
understanding, law, equity or otherwise, including, but not limited to, any
claims that were or could have been brought under Chapter 5 of the Bankruptcy
Code, whether absolute, accrued, contingent, fixed or otherwise, or whether due
or to become due, and shall include (a) any right to payment from any of the
Debtors, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (b) any right to an equitable remedy
for breach of performance if such breach gives rise to a right of payment from
any of the Debtors, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured.
10
2.1.47 Claims Bar Date. For any Claim other than an Administrative
Claim, October 7, 2003, or such other deadline for filing such Claim as has been
established under any order of the Bankruptcy Court.
2.1.48 Claims Objection Deadline. The later of (i) fifteen (15) days
after the Effective Date of the Plan or (ii) such greater period of limitation
as may be fixed or extended by the Bankruptcy Court on request of a Debtor or
Reorganized Debtor or by agreement between a Debtor or Reorganized Debtor and
the Holder of the Claim.
2.1.49 Class. Each group of Claims or Equity Interests classified in
Article V of the Plan pursuant to sections 1122 and 1123 of the Bankruptcy Code.
2.1.50 Co-Sponsors. Co-Sponsors shall have the meaning set forth in
Section I of the Plan.
2.1.51 Co-Syndication Agent. Bankers Trust Company as documentation
and co-syndication agent of the Pre-Restructuring Loan Documents.
2.1.52 Collateral. Any property or interest in property of the
Debtors' Estates subject to a Lien to secure the payment or performance of a
Claim, which Lien is not subject to avoidance under the Bankruptcy Code or
otherwise invalid under the Bankruptcy Code or applicable state law.
2.1.53 Confirmation. Entry of the Confirmation Order by the Bankruptcy
Court.
2.1.54 Confirmation Date. The date on which the Confirmation Order is
entered in the Bankruptcy Court's docket.
2.1.55 Confirmation Hearing. The hearing to consider confirmation of
the Plan pursuant to section 1128 of the Bankruptcy Code, as it may be adjourned
or continued from time to time.
2.1.56 Confirmation Order. The order entered by the Bankruptcy Court
confirming the Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code, which order shall be submitted to the Court in form and
substance satisfactory to the Co-Sponsors and the Required Lenders.
11
2.1.57 Convertible Subordinated Notes. Collectively, the 5.25%
Convertible Subordinated Notes and the 6.25% Convertible Subordinated Notes.
2.1.58 Convertible Subordinated Note Indentures. Collectively, the
5.25% Convertible Subordinated Note Indenture and the 6.25% Convertible
Subordinated Note Indenture.
2.1.59 Convertible Subordinated Note Holders. All Holders of the
Convertible Subordinated Notes.
2.1.60 Creditor. Any Person who is the Holder of a Claim against any
Debtor that arose or accrued or is deemed to have arisen or accrued or to have
matured, or otherwise become due, owing, and payable on or before the Petition
Date, including without limitation, Claims of the kind specified in sections
502(g), 502(h) or 502(i) of the Bankruptcy Code.
2.1.61 DDi Capital. DDi Capital Corp., a California corporation.
2.1.62 DDi Corp. DDi Corp., a Delaware corporation.
2.1.63 DDi Europe. DDi Europe Limited, a company registered in England
and Wales and a non-debtor affiliate of DDi Corp.
2.1.64 DDi Intermediate. DDi Intermediate Holdings Corp., a California
corporation and a non-debtor affiliate of DDi Corp.
2.1.65 DDISV. Dynamic Details, Incorporated, Silicon Valley, a
Delaware corporation and a non-debtor affiliate of DDi Corp.
2.1.66 Debtor(s). Individually or collectively, DDi Corp. and DDi
Capital.
2.1.67 Debtors-in-Possession. The Debtors when each is acting in the
capacity of representative of the Estates in the Cases.
2.1.68 Deficiency Claim. That portion of any Claim of a Creditor
secured by a Lien on, security interest in or charge against property of the
Estate or that is subject to setoff under the Bankruptcy Code section 553, to
the extent that the value of such Creditor's interest in the Estate's interest
in such property or to the extent that the amount subject to setoff, as
12
applicable, as determined pursuant to Bankruptcy Code section 506(a), is less
than the amount of the Claim.
2.1.69 Details. Dynamic Details, Incorporated, a California
corporation and a non-debtor affiliate of DDi Corp.
2.1.70 Disclosure Statement. That certain document entitled Disclosure
Statement for Plan of Reorganization of DDi Corp. and DDi Capital under Chapter
11 of the Bankruptcy Code Filed in the Cases by the Debtors, including the
Exhibits attached thereto, either in its present form or as it may be amended,
restated, supplemented, or otherwise modified from time to time.
2.1.71 Disclosure Statement Hearing. The hearing(s) held pursuant to
Bankruptcy Code section 1125(b) and Bankruptcy Rule 3017(a), including any
continuances thereof, at which the Bankruptcy Court considered the adequacy of
the Disclosure Statement.
2.1.72 Disputed Administrative Claim. Any Administrative Claim that is
not an Allowed Administrative Claim.
2.1.73 Disputed Claim. All or any part of a Claim, other than any
Allowed Amount thereof, an Administrative Claim, or the Allowed Class 1 Claims,
Allowed Class 5 Claims, Allowed Class 6a Claims and the Allowed Class 6b Claims,
as to which any one of the following applies: (i) no proof of claim has been
filed with respect to such Claim, and either (a) the Claim is not listed in the
Schedules, or (b) the Claim is listed in the Schedules as unliquidated,
disputed, contingent, unknown or in a zero amount, (ii) the Claim is the subject
of a timely objection or request for estimation in accordance with the
Bankruptcy Code, the Bankruptcy Rules, any applicable orders of the Bankruptcy
Court, or the Plan which is Filed on or before the Claims Objection Deadline,
which objection or request for estimation has not been withdrawn or determined
by a Final Order, or (iii) the Claim is otherwise treated as a "Disputed Claim"
pursuant to this Plan. In addition, prior to the earlier of (i) the Claims
Objection Deadline, and (ii) such date as the Bankruptcy Court allows the Claim
pursuant to a Final Order, any Claim whose Allowed Amount is not specified under
the Plan or that is not Allowed under
13
the Plan that is evidenced by a proof of claim shall be deemed a Disputed Claim
for purposes of calculating and making any distributions under this Plan if: (a)
no Claim corresponding to the proof of claim is listed in the Schedules, (b) the
Claim corresponding to the proof of claim is listed in the Schedules as
disputed, contingent, unliquidated, unknown, or in a zero amount, (c) the amount
of the Claim as specified in the proof of claim exceeds the amount of any
corresponding Claim listed in the Schedules as not disputed, not contingent, and
liquidated, but only to such extent, or (d) the priority or classification of
the Claim as specified in the proof of claim differs from the priority of any
corresponding Claim listed in the Schedules.
2.1.74 Disputed Claim or Disputed Class Claim. A Claim of the type
specified or in the Class specified that is also a Disputed Claim (i.e., a
Disputed Tax Claim is a Tax Claim that is also a Disputed Claim, and a Disputed
Class 5 Claim is a Claim classified in Class 5 that is also a Disputed Claim).
2.1.75 Distribution Agent. Reorganized DDi. Corp.
2.1.76 Distribution Record Date. The record date for purposes of
making distributions under the Plan on account of Allowed Claims and Equity
Interests, which date shall be the Effective Date.
2.1.77 Effective Date. The tenth calendar day after the entry of the
Confirmation Order, unless a stay of the Confirmation Order has been issued by
the Court, and all conditions to the Effective Date have been satisfied or, if
waivable, waived. In the event the Confirmation Order is stayed, the first
business day after the stay is lifted, and all conditions to the Effective Date
have been satisfied or, if waivable, waived.
2.1.78 Equity Interest. Any equity security or interest of or in any
Debtor within the meaning, of Section 101(16) of the Bankruptcy Code, including,
without limitation, any equity interest in any of the Debtors, whether in the
form of common or preferred stock, stock options, warrants, partnership
interests, membership interests, or any other equity security or interest, and
includes, without limitation, any equity interest based on Existing DDi Corp.
Common Stock or on any common stock of any other Debtor, and the legal,
equitable,
14
contractual and other rights, whether fixed or contingent, matured or unmatured,
disputed or undisputed, of any Person to purchase, sell, subscribe to, or
otherwise acquire or receive (directly or indirectly) any of the foregoing.
2.1.79 Estates. The bankruptcy estates of the Debtors created pursuant
to section 541 of the Bankruptcy Code by the commencement of the Cases.
2.1.80 Existing DDi Corp. Common Stock. The shares of common stock of
DDi Corp., outstanding immediately prior to the Effective Date.
2.1.81 Existing Senior Discount Note Indenture. That certain indenture
dated as of November 18, 1997 (as amended, restated, supplemented, or otherwise
modified from time to time prior to the Effective Date), by and between DDi
Capital (f/k/a Details Holdings Corp., a California corporation) and the Senior
Discount Trustee, as trustee, pursuant to which the Senior Discount Notes were
issued.
2.1.82 Fee Applications. Applications of Professional Persons under
sections 330, 331 or 503 of the Bankruptcy Code and the Professional Persons
retained by the Ad Hoc Committees for allowance of compensation and
reimbursement of expenses in the Cases.
2.1.83 Filed. Delivered to, received by and entered upon the legal
docket by the Clerk of the Bankruptcy Court. "File" shall have the correlative
meaning.
2.1.84 Final Order. A judgment, order, ruling or other decree issued
and entered by the Bankruptcy Court or by any state or other federal court or
other tribunal as to which no appeal, petition for certiorari, or other
proceedings for re-argument or rehearing shall then be pending or as to which
any right to appeal, petition for certiorari, reargue, or rehear shall have been
waived in writing in form and substance satisfactory to the Co-Sponsors and the
Required Lenders, or, in the event that an appeal, writ of certiorari, or
re-argument or rehearing thereof has been sought, such order or judgment of the
Bankruptcy Court or other applicable court shall have been affirmed by the
highest court to which such order or judgment was appealed, or certiorari,
re-argument, or rehearing has been denied, and the time to take any further
appeal, petition for certiorari, or move for re-argument or rehearing shall have
expired.
15
2.1.85 Funding Order. The Order entered on August 20, 2003, (i)
Approving the Budget and Funding Agreement, dated as of August 1, 2003 and (ii)
Authorizing and Directing the Debtors' Performance Thereunder, pursuant to
Bankruptcy Code (S)(S)105, 361, 362, 363, 364, 503(B) and 507(B) and Federal
Rule of Bankruptcy Procedure 4001(B).
2.1.86 Hedge Agreement. The terminated Hedge Agreement by and between
JPMorgan Chase Bank and Dynamic Details, Incorporated, which was executed in
connection with the Pre-Restructuring Loan Documents and terminated as of April
25, 2003.
2.1.87 Holder. The beneficial owner of any Interest.
2.1.88 Indentures. Collectively, the 5.25% Convertible Subordinated
Note Indenture, the 6.25% Convertible Subordinated Note Indenture, and the
Existing Senior Discount Note Indenture.
2.1.89 Indenture Trustee Fee Claim. Any Claim of the 5.25% Trustee,
the 6.25% Trustee or the Senior Discount Trustee for payment of compensation for
all services rendered by it under the Indentures as of the Effective Date,
together with the reimbursement of all reasonable expenses, disbursements and
advances incurred in connection therewith, including the reasonable
compensation, expenses and disbursements of its agents and counsel.
2.1.90 Interest. (i) All Liens, (ii) all Claims, (iii) all interests
of any kind or nature, including but not limited to any equity security or
interest of or in any Debtor within the meaning, of section 101(16) of the
Bankruptcy Code, including, without limitation, any Equity Interest in any of
the Debtors, whether in the form of common or preferred stock, stock options,
warrants, partnership interests, membership interests, or any other equity
security or interest, and includes, without limitation, any equity interest
based on Existing DDi Corp. Common Stock or on any common stock of any other
Debtor, and (iv) the legal, equitable, contractual and other rights, whether
fixed or contingent, matured or unmatured, disputed or undisputed, of any Person
to purchase, sell, subscribe to, or otherwise acquire or receive (directly or
indirectly) any of the foregoing.
16
2.1.91 Lien. Any mortgage, pledge, security interest, encumbrance,
lien (as defined in Section 101(37) of the Bankruptcy Code) or charge of any
kind (including any agreement to give the foregoing), judgments, conditions,
covenants, impositions, demands, easements, any conditional sale or other title
retention agreement, any lease in the nature thereof or the filing of or
agreement to give any financing statement under the Laws of any jurisdiction,
restrictions or charges of any kind or nature, if any, including, but not
limited to, any restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.
2.1.92 Management Incentive Plan. The Management Incentive Plan
pursuant to which the Management Options will be granted which shall be in the
form attached as an Exhibit to the Plan Documentary Supplement.
2.1.93 Management Options. The options to be granted under the
Management Incentive Plan to the management of Reorganized DDi Corp. and its
subsidiaries which shall have the material terms described in the term sheet
attached as Exhibit "1" to the Plan.
2.1.94 Modified Structure. In the event BOS does not deliver the BOS
Consent pursuant to the terms of the BOS Credit Facility on or prior to five (5)
Business Days preceding the Effective Date, the issuance by Reorganized DDi
Corp. (not DDi Europe) on the Effective Date of all of the New DDi Corp.
Preferred Stock to Holders of Allowed Class 6a Claims and Allowed Class 6b
Claims.
2.1.95 New Common Stock. The new common stock of Reorganized DDi Corp.
issued from and after the Effective Date, which shall be governed by the Amended
and Restated DDi Corp. Certificate of Incorporation and shall represent all of
the New Common Stock. The New Common Stock shall have the material terms
described in the term sheet attached as Exhibit "2" to the Plan and in the form
attached as an Exhibit to the Plan Documentary Supplement.
2.1.96 New Common Stock Registration Rights Agreement. The New Common
Stock Registration Rights Agreement shall be in the form attached as an Exhibit
to the Plan Documentary Supplement.
17
2.1.97 New DDi Corp. Preferred Stock. The new preferred stock of
Reorganized DDi Corp., issued on the Effective Date, which shall be governed by
the Amended and Restated DDi Corp. Certificate of Incorporation and shall
represent all of the New DDi Corp. Preferred Stock. The New DDi Corp. Preferred
Stock shall have substantially the terms and conditions set forth in Exhibit "3"
attached hereto. The precise terms and conditions of the New DDi Preferred Stock
shall be agreed upon by the Co-Sponsors and the Required Lenders and described
in an Exhibit to the Plan Documentary Supplement. However, the New DDi Corp.
Preferred Stock shall be a preferred equity obligation of Reorganized DDi Corp
and shall have an initial aggregate liquidation preference of $15,000,000. In
addition, the New DDi Corp. Preferred Stock shall be subject, without
limitation, to the following terms and conditions:
(i) any and all rights, claims, liens, and interests of the
Secured Lenders or other holders under the New DDi Corp. Guarantee and Pledge
Agreement and any other Restructuring Loan Document to the extent that it
creates a claim against DDi Corp. or lien on any asset of DDi Corp. will be
subordinate contractually to any and all rights, claims and interests
(including, without limitation, unpaid dividends and other accretions both
before and after any insolvency case or proceeding of Reorganized DDi Corp.)
under the New DDi Corp. Preferred Stock with respect to the (A) the capital
stock of DDi Europe and (B) any cash, property, or other assets of DDi Europe or
any of its subsidiaries that is transferred to Reorganized DDi Corp. by way of
dividend or otherwise ((A) and (B) are collectively referred to herein as the
"DDi Europe Value") until the New DDi Corp. Preferred Stock is fully redeemed;
(ii) any and all rights, claims, liens, or interests of the
Holders of Allowed Class 5 Claims or other holders under the New Senior
Accreting Notes shall be subordinate structurally and contractually to any and
all rights, claims, and interests (including, without limitation, unpaid
dividends and other accretions both before and after any insolvency case or
proceeding of Reorganized DDi Corp.) under the New DDi Corp. Preferred Stock
with respect to the DDi Europe Value (the form and substance of such contractual
subordination shall
18
be reasonably acceptable to holders of a majority of the aggregate principal
amount of the Senior Discount Notes);
(iii) no DDi Europe Value will be paid to or held by the holders
of claims, liens, or interests under the Pre-Restructuring Loan Documents, the
Restructuring Loan Documents, or the New Senior Accreting Notes until the New
DDi Corp. Preferred Stock is fully redeemed; provided, however, that after the
New DDi Corp. Preferred Stock is fully redeemed, all of the DDi Europe Value
shall be available, without limitation, to satisfy obligations under Reorganized
DDi Corp.'s then existing agreements;
(iv) in the event that the Debtors are able to obtain the BOS
Consent on or after the date the Modified Structure is implemented, the New DDi
Corp. Preferred Stock shall convert into or be exchanged for New Preferred Stock
consistent with the terms and conditions set forth in the Amended and Restated
DDi Europe Articles of Association;
(v) Only DDi Europe Value shall be used to effect any
distributions and/or redemptions under the New DDi Corp. Preferred Stock; and
(vi) the New DDi Corp. Preferred Stock shall have no rights,
claims and interests in and to any other assets and equity interests, whether
direct or indirect, of Reorganized DDi Corp.
2.1.98 New DDi Corp. Securities. Collectively, the New Common Stock,
the New Warrants, the New DDi Corp. Preferred Stock (only if the Modified
Structure is implemented) and the Management Options.
2.1.99 New DDi Corp. Guarantee and Pledge Agreement. The New DDi Corp.
Guarantee and Pledge Agreement shall be in the form attached as an Exhibit to
the Plan Documentary Supplement.
2.1.100 New Preferred Stock. The new preferred stock of DDi Europe,
issued on the Effective Date, which shall be governed by the Amended and
Restated DDi Europe Articles of Association and shall represent all of the New
Preferred Stock. The New Preferred
19
Stock shall have the material terms described in the term sheet attached as
Exhibit "3" to the Plan and in the form attached to the Plan Documentary
Supplement.
2.1.101 New Preferred Stock Registration Rights Agreement. The New
Preferred Stock Registration Rights Agreement shall be in the form attached as
an Exhibit to the Plan Documentary Supplement.
2.1.102 New Senior Accreting Note Indenture. The New Senior Accreting
Note Indenture shall have the material terms described in the term sheet
attached as Exhibit "4" to the Plan and in the form of the New Senior Accreting
Note Indenture attached as an Exhibit to the Plan Documentary Supplement.
2.1.103 New Warrant Agreements. Collectively, the Secured Lender
Warrant Agreement and the Senior Discount Warrant Agreement.
2.1.104 New Warrants. Collectively, the Secured Lender Warrants and
the Senior Discount Warrants.
2.1.105 Person. An individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, estate,
association, unincorporated association, joint venture, governmental authority,
Professional, governmental unit, Committee or other entity of whatever nature.
2.1.106 Petition Date. The date on which each Debtor filed its
petition for relief under Chapter 11 of the Bankruptcy Code, i.e., August 20,
2003.
2.1.107 Plan. The Joint Plan of Reorganization as set forth herein,
including the Exhibits thereto and the Plan Documents, as the same may be
amended or modified from time to time in accordance with section 15.1 of this
Plan.
2.1.108 Plan Documentary Supplement. A supplement to this Plan,
containing various documents relating to the implementation of the Plan, to be
Filed with the Bankruptcy Court no later than ten (10) Business Days prior to
the commencement of the hearing on confirmation of the Plan, as said supplement
may be amended from time to time at
20
any time prior to the Effective Date with the consent of the Co-Sponsors and the
Required Lenders.
2.1.109 Plan Documents. Collectively, the Amended and Restated DDi
Corp. Certificate of Incorporation; the Amended and Restated DDi Corp. Bylaws,
the Amended and Restated DDi Europe Articles of Association (to be effective
only if the Modified Structure is not implemented), the New Warrant Agreements,
the Management Incentive Plan, the Registration Rights Agreements, the New
Senior Accreting Note Indenture, and any other documents required by the Plan,
excluding any of the Restructuring Loan Documents (other than the Secured Lender
Warrant Agreement, the New Common Stock Registration Rights Agreement and the
New DDi Corp. Guarantee and Pledge Agreement), or determined by the Co-Sponsors
and the Required Lenders to be necessary or advisable to implement the Plan. The
Plan Documents shall be in form and substance acceptable to the Co-Sponsors and
the Required Lenders. Final or near-final versions of the Plan Documents shall
be filed with the clerk of the Bankruptcy Court as part of the Plan Documentary
Supplement as early as practicable (but in no event later than ten (10) Business
Days prior to the commencement of the Confirmation Hearing or on such other date
as the Bankruptcy Court may establish).
2.1.110 Pre-Restructuring Bank Indebtedness. This term shall have the
meaning ascribed to such term in the term sheet attached as Exhibit "5" to the
Plan.
2.1.111 Pre-Restructuring Loan Documents. The Amended and Restated
Credit Agreement, dated as of July 23, 1998 and as amended and restated as of
August 28, 1998, and as amended by the First Amendment, dated as of March 10,
1999, the Second Amendment, dated as of March 22, 2000, the Third Amendment,
dated as of October 10, 2000, the Fourth Amendment, dated as of February 13,
2001, the Fifth Amendment, dated as of December 31, 2001, the Sixth Amendment,
dated as of June 28, 2002, the Seventh Amendment, dated as of June 27, 2003 and
the Eighth Amendment, dated as of August 1, 2003 (as amended, supplemented or
otherwise modified prior to the Petition Date, the "Pre-Restructuring Credit
Agreement"), among Details, DDISV, the Secured Lenders, the Administrative Agent
and the
21
Co-Syndication Agent, and all collateral and ancillary documentation executed in
connection therewith, including, without limitation, the Hedge Agreement, with
any Secured Lender or any Affiliate of any Secured Lender.
2.1.112 Priority Claim. Any Claim, other than an Administrative Claim
or a Tax Claim, to the extent entitled to priority under Section 507(a) of the
Bankruptcy Code.
2.1.113 Pro Rata. Proportionately, so that with respect to any
distribution in respect of any Allowed Claim, the ratio of (a)(i) the amount of
property distributed on account of such Allowed Claim to (ii) the amount of such
Allowed Claim, is the same as the ratio of (b)(i) the amount of property
distributed on account of all Allowed Claims of the Class or Classes sharing in
such distribution to (ii) the amount of all Allowed Claims in such Class or
Classes.
2.1.114 Professional. A Person or Entity (a) employed by the Debtors
in Possession pursuant to a Final Order in accordance with sections 327 and 1103
of the Bankruptcy Code and to be compensated for services rendered prior to the
Effective Date, pursuant to sections 327, 328, 329, 330 and 331 of the
Bankruptcy Code, (b) employed by the Ad Hoc Committees, which retentions have
been approved by the Debtors and the Required Lenders and to be compensated for
services rendered prior to the Effective Date as would be allowed under section
503(b) of the Bankruptcy Code if the Ad Hoc Committees were official committees
or (c) for which compensation and reimbursement has been allowed by the
Bankruptcy Court pursuant to Section 503(b) of the Bankruptcy Code.
2.1.115 Professional Fees. All Allowed Claims of Professionals for
compensation and for reimbursement of expenses under sections 328, 330 and/or
503(b) of the Bankruptcy Code, and the Administrative Claims of the
Professionals for the Ad Hoc Committees.
2.1.116 PSA. The Plan Support Agreement (together with exhibits,
annexes and attachments thereto) dated as of August 8, 2003 (as amended), by and
among DDi Corp., DDi Intermediate, DDi Capital, Details, DDISV, their respective
subsidiaries and
22
affiliates and the Holders of approximately 64% in aggregate principal amount of
the Convertible Subordinated Notes.
2.1.117 Registration Rights Agreements. Collectively, the New Common
Stock Registration Rights Agreement and the New Preferred Stock Registration
Rights Agreement.
2.1.118 Released Claims. Any and all of the following Claims and
Causes of Action that arose up to and including the Effective Date and/or relate
to, in any way, any Claims or Causes of Action that arose up to and including
the Effective Date:
(i) actions or omissions or courses of conduct of any Released
Party with respect to any indebtedness arising under or with respect to any
credit facility or any other arrangement under which any of the Debtors or any
of their respective subsidiaries is or was a borrower or guarantor, the
Pre-Restructuring Loan Documents, the 5.25% Convertible Subordinated Notes, the
6.25% Convertible Subordinated Notes, the Senior Discount Notes or any
investment (direct or indirect) in any common or preferred equity of any of the
Debtors (including, without limitation, any action or omission of any Released
Party with respect to the issuance, acquisition, holding, voting or disposition
of any such investment),
(ii) actions or omissions or courses of conduct of any Released
Party as an officer, director, employee or agent of, or advisor to, any of the
Debtors, the Debtors' respective subsidiaries, the Senior Debt Parties, the
5.25% Convertible Subordinated Debt Parties, the 6.25% Convertible Subordinated
Debt Parties or the Senior Discount Parties,
(iii) disclosures made or not made by any person to any current
or former Holder of any indebtedness arising under or with respect to any credit
facility or any other arrangement under which any of the Debtors or any of the
Debtors' respective subsidiaries is or was a borrower or a guarantor, the
Pre-Restructuring Loan Documents, the 5.25% Convertible Subordinated Notes, the
6.25% Convertible Subordinated Notes or the Senior Discount Notes,
23
(iv) consideration paid in respect of any investment (direct or
indirect) by any Person in any indebtedness arising under or with respect to any
credit facility or any other arrangement under which any of the Debtors or any
of the Debtors' respective subsidiaries is or was a borrower or a guarantor,
Pre-Restructuring Loan Documents, the 5.25% Convertible Subordinated Notes, the
6.25% Convertible Subordinated Notes, the Senior Discount Notes, any common or
preferred equity investment (direct or indirect) in any of the Debtors or in
respect of any services provided or to be provided to any of the Debtors under
any management agreement or otherwise,
(v) Claims for equitable subordination or other
recharacterization of any claim of any of the Senior Debt Parties, the 5.25%
Convertible Subordinated Debt Parties, the 6.25% Convertible Subordinated Debt
Parties and the Senior Discount Parties,
(vi) avoidance Claims the Debtors and their respective Estates
have or may have against any of the Senior Debt Parties, the 5.25% Convertible
Subordinated Debt Parties, the 6.25% Convertible Subordinated Debt Parties and
the Senior Discount Parties under Sections 542, 543, 544, 547, 548, 549, 553, or
724(a) of the Bankruptcy Code, under applicable state law or otherwise, in
respect of any payments or transfers made, obligations incurred or any
contracts, agreements or arrangements involving any of the Released Parties,
(vii) any fiduciary duty of any of the Released Parties to any of
the Debtors or their respective Estates or which the Estates might have asserted
or any of their creditors or Holders,
(viii) actions taken or not taken or course of conduct in
connection with the contemplated Plan, the restructuring and the petitions or
otherwise in respect in the Chapter 11 Cases, including but not limited to, any
act taken or omitted to be taken in connection with or related to the
formulation, preparation, dissemination, implementation, administration,
Confirmation or Consummation of the Plan, the Disclosure Statement or any
contract, instrument, release or other agreement or document created or entered
into in connection with the Plan, including the RSA, PSA or SDNPSA, or any other
act taken or omitted to be taken in
24
connection with or in contemplation of the Restructuring of the
Pre-Restructuring Bank Indebtedness, the Convertible Subordinated Notes, or the
Senior Discount Notes, and
(ix) Claims, obligations, rights, Causes of Action and
liabilities which the Debtors and any of their respective successors, assigns,
affiliates and subsidiaries (other than DDi Europe and its European
subsidiaries) may assert against the Released Parties, 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, the Restructuring or the Plan; provided, however, that
Released Claims shall not include Claims or Causes of Action arising out of any
such Released Party's gross negligence or willful misconduct;
provided, however, that notwithstanding anything contained herein to the
contrary, nothing in this Plan or the transactions contemplated by and
authorized pursuant to the Plan release any non-debtor from any claims of the
United States of America or its agencies or subdivisions (the "United States"),
or modify, alter, impair, or in any way affect the claims and rights of the
United States or the application of any laws or regulations of the United States
as to any person or entity other than the Debtors.
2.1.119 Released Parties. The Senior Debt Parties, the 5.25%
Convertible Subordinated Debt Parties, the 6.25% Convertible Subordinated Debt
Parties, the Senior Discount Parties, the Creditors' Committee (if any) and each
of the members, the Ad Hoc Committees and each of the members, and any and all
of such parties' respective predecessors, successors and assigns, past, current
and future principals, affiliates, agents, officers, directors, employees,
shareholders, partners, members, affiliates, representatives, attorneys,
financial advisors, investment bankers, agents or other professionals.
2.1.120 Reorganized DDi Corp. DDi Corp., as reorganized on and after
the Effective Date.
25
2.1.121 Reorganized Debtors. The Debtors, as reorganized under the
terms of the Plan on and after the Effective Date, and any successors thereto by
merger, consolidation, acquisition, or otherwise.
2.1.122 Required Lenders. This term shall have the meaning ascribed to
such term in the term sheet attached as Exhibit "5" to the Plan.
2.1.123 Restructuring. This term shall have the meaning ascribed to
such term in the term sheet attached as Exhibit "5" to the Plan.
2.1.124 Restructuring Loan Documents. This term shall have the meaning
ascribed to such term in the term sheet attached as Exhibit "5" to the Plan.
2.1.125 RSA. The Restructuring Support Agreement (together with
exhibits, annexes and attachments thereto) dated as of August 1, 2003 (as
amended), by and among DDi Corp., DDi Intermediate, DDi Capital, Details, DDISV,
their respective subsidiaries and affiliates and one hundred percent (100%) of
the Holders of the Pre-Restructuring Bank Indebtedness.
2.1.126 Schedules. The schedules of assets and liabilities and list of
equity security Holders Filed by the Debtors, as required by section 521(1) of
the Bankruptcy Code, Bankruptcy Rules 1007(a)(1) and (3) and (b)(1), and
Official Bankruptcy Form No. 6, as amended from time to time.
2.1.127 SDNPSA. The Senior Discount Note Holder Plan Support Agreement
(together with exhibits, annexes and attachments thereto) dated as of August 19,
2003, by and among DDi Corp., DDi Intermediate, DDi Capital, Details, DDISV,
their respective subsidiaries and affiliates and the Holders of approximately
71.5% in aggregate principal amount of the Senior Discount Notes.
2.1.128 Secured Claim. Any Claim, including interest, fees, costs, and
charges to the extent allowable pursuant to Bankruptcy Code section 506(b) and
the Plan, that is secured by a valid and unavoidable Lien on property in which
the Debtors have, or any of them or any Estate has, an interest or that is
subject to recoupment or setoff under Section 553 of the
26
Bankruptcy Code, to the extent of the value of such Holder's interest in the
Debtors, any Debtor's or any Estate's interest in the property, determined
pursuant to Section 506(a) of the Bankruptcy Code.
2.1.129 Secured Lender Warrant Agreement. The agreement pursuant to
which the Secured Lender Warrants will be issued which shall be in the form
attached as an Exhibit to the Plan Documentary Supplement.
2.1.130 Secured Lender Warrant Escrow Agreement. The Secured Lender
Warrant Escrow Agreement shall be in the form attached as an Exhibit to the Plan
Documentary Supplement.
2.1.131 Secured Lender Warrants. The warrants issuable to the Secured
Lenders which shall have the material terms described in the term sheet attached
as Exhibit "5" to the Plan.
2.1.132 Secured Lenders. The several banks and other financial
institutions from time to time parties to the Pre-Restructuring Loan Documents.
2.1.133 Senior Debt Parties. The Secured Lenders, the Administrative
Agent and the Co-Syndication Agent.
2.1.134 Senior Discount Notes. The 12.5% Senior Discount Notes due
2007 issued by DDi Capital.
2.1.135 Senior Discount Note Holders. All Holders of the Senior
Discount Notes.
2.1.136 Senior Discount Parties. The Senior Discount Note Holders and
the Senior Discount Trustee.
2.1.137 Senior Discount Trustee. Wilmington Trust Company, as
successor trustee to U.S. Bank National Association, as successor in interest to
The State Street Bank and Trust Company, in its capacity as indenture trustee
under the Existing Senior Discount Note Indenture.
27
2.1.138 Senior Discount Warrant Agreement. The agreement pursuant to
which the Senior Discount Warrants will be issued which shall be in the form
attached as an Exhibit to the Plan Documentary Supplement.
2.1.139 Senior Discount Warrants. The warrants issuable to the Senior
Discount Note Holders which shall have the material terms described in the term
sheet attached as Exhibit "4" to the Plan.
2.1.140 Tax. Any tax, charge, fee, levy, impound or other assessment
by any federal, state, local or foreign taxing authority, including, without
limitation, income, excise, property, sales, transfer, employment, payroll,
franchise, profits, license, use, ad valorem, estimated, severance, stamp,
occupation and withholding tax. "Tax" shall include any interest or additions
attributable to, or imposed on or with respect to such assessments.
2.1.141 Tax Claim. Any Claim for any Tax to the extent that it is
entitled to priority in payment under Section 507(a)(8) of the Bankruptcy Code.
2.1.142 Unclaimed Property. All Cash, DDi Corp. Securities, and New
Preferred Stock deemed to be "Unclaimed Property" pursuant to Sections 9.6 and
9.7 of the Plan.
2.1.143 Unsecured Claim. A Claim against any Debtor that is not (a) a
Secured Claim, (b) an Administrative Claim, (c) a Tax Claim or (d) a Priority
Claim.
2.2 Rules of Construction. For purposes of this Plan, unless otherwise
provided herein, (a) whenever from the context it is appropriate, each term,
whether stated in the singular or the plural, will include both the singular and
the plural; (b) each pronoun stated in the masculine, feminine or neuter
includes the masculine, feminine and neuter; (c) any reference in this Plan to
an existing document or schedule filed or to be filed means such document or
schedule, as it may have been or may be amended, modified or supplemented
pursuant to this Plan; (d) any reference to an entity as a Holder of a Claim or
Equity Interest includes that entity's successors and assigns; (e) all
references in this Plan to Sections, Articles and Exhibits are references to
Sections, Articles and Exhibits of or to this Plan; (f) the words "herein,"
hereunder" and "hereto" refer to this Plan in its entirety rather than to a
particular portion of this Plan; and
28
(g) unless otherwise provided in the Plan, any reference in this Plan to a
contract, instrument, release, indenture, agreement, or other document being in
a particular form or non particular terms and conditions means that such
document shall be substantially and materially in such form or substantially and
materially on such terms and conditions; (h) any reference in the Plan to a
document, schedule, or exhibit to the Plan, Plan Documentary Supplement, or
Disclosure Statement Filed or to be Filed means such document, schedule, or
exhibit, as it may have been or may be amended, modified, or supplemented; and
(i) the rules of construction set forth in section 102 of the Bankruptcy Code
shall apply to the extent such rules are not inconsistent with the express terms
of the Plan or any other provision in this section 2.2.
2.3 Plan Documentary Supplement. Forms or summaries of certain documents
referred to herein will be contained in a separate Plan Documentary Supplement,
which the Debtors shall file with the Bankruptcy Court and may amend from time
to time with the consent of the Co-Sponsors and the Required Lenders prior to
the Effective Date. A copy of the Plan Documentary Supplement may be obtained
from counsel for the Debtors, at the address set forth in section 16.5 of the
Plan, upon written request.
2.4 Exhibits. All Exhibits to the Plan and all documents contained in the
Plan Documentary Supplement are incorporated into and are a part of the Plan as
if set forth in full herein.
III. JOINT PLAN; NO SUBSTANTIVE CONSOLIDATION
This Plan, although proposed jointly, constitutes a separate plan proposed
by each of the Debtors. The Debtors' respective Chapter 11 estates remain
legally separate. Each Debtor is only assuming liability under the Plan for the
claims properly chargeable to such Debtor and for no others. Accordingly, except
as expressly provided herein, the classifications set forth below shall be
deemed to apply separately with respect to each Plan proposed by each Debtor.
29
IV. UNCLASSIFIED CLAIMS
As required by the Bankruptcy Code, the Plan places claims and interests
into various Classes according to their right to priority. However, certain
types of claims are not classified in any Classes under the Plan. These claims
are deemed "unclassified" under the provisions of the Bankruptcy Code. They are
not considered impaired and they do not vote on the Plan, because they are
automatically entitled to specific treatment provided for them in the Bankruptcy
Code. As such, the Debtors have not placed the following claims in a class. The
treatment of these unclassified claims is as provided below.
4.1 Administrative Claims. Administrative Claims are generally claims for
the expenses of administering the Debtors' Cases that are allowed under Code
section 507(a)(1). The Bankruptcy Code requires that all Administrative Claims
be paid on the Effective Date of the Plan, unless a particular claimant agrees
to a different treatment. The treatment of Administrative Claims is as described
below.
4.1.1 Payment Generally. Except to the extent that the Holder of an
Allowed Administrative Claim agrees to a different treatment, and subject to the
bar dates for Administrative Claims set forth in the following Sections, the
Distribution Agent shall pay each Allowed Administrative Clam in full, in Cash
or such other treatment as may be accepted by such Holder, on the later of (i)
the Effective Date, (ii) within ten (10) Business Days after the date of such
Administrative Claim becomes an Allowed Administrative Claim, or (iii) the date
such Allowed Administrative Claim becomes due according to its terms.
Notwithstanding the foregoing, any Allowed Administrative Claim representing
obligations incurred in the ordinary course of post-petition business by the
Debtors in Possession shall be paid in full or performed by the Reorganized
Debtors in the ordinary course of business, in accordance with the terms of the
particular obligation.
4.1.2 Administrative Claims Bar Date.
(i) General Administrative Claims Bar Date. All applications for
final compensation of Professionals for services rendered and for reimbursement
of expenses incurred
30
on or before the Effective Date and all requests for payment of Administrative
Claims incurred before the Effective Date under sections 507(a)(1) or 507(b) of
the Bankruptcy Code (except only for (i) post-petition, ordinary course trade
obligations and routine post-petition payroll obligations incurred in the
ordinary course of the Debtors' post-petition business, for which no bar date
shall apply, and (ii) post-petition tax obligations, for which the bar date
described in the following Section shall apply) shall be filed with the
Bankruptcy Court and served upon the Co-Sponsors no later than sixty (60) days
after the Effective Date (the "General Administrative Claims Bar Date"), unless
such date is extended by the Bankruptcy Court after notice to the Co-Sponsors.
Any such request for payment of an Administrative Claim that is subject to the
General Administrative Claims Bar Date and that is not filed and served on or
before the General Administrative Claims Bar Date shall be forever barred; any
party that seeks payment of Administrative Claims that (i) is required to file a
request for payment of such Administrative Claims and (ii) does not file such a
request by the deadline established herein shall be forever barred from
asserting such Administrative Claims against the Debtors, the Reorganized
Debtors, their estates, or any of their property.
(ii) Administrative Tax Claims Bar Date. All requests for payment
of Administrative Claims by a governmental unit for Taxes (and for interest
and/or penalties related to such Taxes) for any tax year or period, all or any
portion of which occurs or falls within the period from and including the
Petition Date through and including the Effective Date ("Tax Administrative
Claims") and for which no bar date has otherwise previously been established,
must be filed and served on the Co-Sponsors on or before the later of (i) sixty
(60) days following the Effective Date; and (ii) 180 days following the filing
of the tax return for such taxes for such tax year or period with the applicable
governmental unit. Any Holder of any Tax Administrative Claims that is required
to file a request for payment of such taxes and does not file and properly serve
such a request by the applicable bar date shall be forever barred from asserting
any such Tax Administrative Claims against the Debtors, Reorganized Debtors,
their estates, or their property. The total claims of this nature are estimated
to be zero.
31
4.2 Superpriority Administrative Expense Claim. Pursuant to the terms and
conditions of the Funding Order, the Secured Lenders and the Administrative
Agent were granted the Allowed Superpriority Administrative Expense Claim
pursuant to sections 503(b) and 507(b) of the Bankruptcy Code and the terms of
the Budget and Funding Agreement; provided, however, that the Secured Lenders
have acknowledged that they will waive the Allowed Superpriority Administrative
Expense Claim if the Restructuring Transaction (as defined in Exhibit "7") is
consummated on or before January 30, 2004.
4.3 Priority Tax Claims. Priority Tax Claims are certain unsecured income,
employment and other taxes described by Code section 507(a)(8). The Bankruptcy
Code requires that each Holder of such a section 507(a)(8) priority tax claim
receive the present value of such claim in deferred cash payments over a period
not exceeding six (6) years from the date of the assessment of such tax. At the
election of the Debtors, the Holder of each Allowed Priority Tax Claim shall be
entitled to receive, on account of such Claim, (i) equal cash payments on the
last Business Day of each three-month period following the Effective Date,
during a period not to exceed six years after the assessment of the Tax on which
such Claim is based, totaling the principal amount of such Claim plus simple
interest on any unpaid balance from the Effective Date, calculated at the
interest rate available on ninety (90) day United States Treasuries on the
Effective Date, (ii) such other treatment agreed to by the Holder of the Allowed
Priority Tax Claim and the Debtors (or the Reorganized Debtors), provided such
treatment is on more favorable terms to the Debtors (or the Reorganized Debtors
after the Effective Date) than the treatment set forth in clause (i) hereof, or
(iii) payment of the full Allowed Priority Tax Claim in Cash. The total Claims
of this nature are estimated to be zero.
4.4 Indenture Trustee Fee Claim. Any Claims of the 5.25% Trustee, the 6.25%
Trustee and the Senior Discount Trustee for payment of compensation for services
rendered by it under the Indentures as of the Effective Date, together with the
reimbursement of all reasonable expenses, disbursements and advances incurred in
connection therewith, including reasonable
32
compensation, expenses and disbursements of its agents and counsel, shall be
paid directly by the Debtors on the Effective Date and shall not be deducted
from any distributions to the Holders of (i) the Allowed Class 1 Claims, (ii)
Allowed Class 5 Claims, (iii) Allowed Class 6a Claims or (iv) the Allowed Class
6b Claims; provided, however, that for purposes of reviewing the reasonableness
of such fees and expenses of the 5.25% Trustee, the 6.25% Trustee and the Senior
Discount Trustee (and their respective Professionals), the Debtors and their
general bankruptcy counsel, the Secured Lenders' counsel, the Ad Hoc Committees'
counsel, and the Office of the United States Trustee, will be provided with the
copies of the invoices of each of the 5.25% Trustee, the 6.25% Trustee and the
Senior Discount Trustee (and their respective Professionals) in the form
typically rendered in the regular course of the 5.25% Trustee, the 6.25% Trustee
or the Senior Discount Trustee's business or the professionals' representation
of the 5.25% Trustee, the 6.25% Trustee or the Senior Discount Trustee, provided
that such invoices will contain condensed narrative descriptions of the services
rendered and itemization of expenses incurred. The reviewing parties will report
to the Bankruptcy Court as to whether there are any unresolved disputes
regarding the reasonableness of such fees and expenses. Any such unresolved
disputes shall be submitted to the Bankruptcy Court for resolution. Nothing
contained herein shall limit the ability of the Bankruptcy Court through the
later of the Effective Date or the last date to submit Administrative Claims to
review the reasonableness of the fees and expenses to be paid to the 5.25%
Trustee, the 6.25% Trustee and the Senior Discount Trustee (and their respective
Professionals). In addition, the Reorganized Debtors shall pay the actual,
necessary and reasonable fees and expenses of the 5.25% Trustee, the 6.25%
Trustee and the Senior Discount Trustee incurred after the Effective Date in
connection with the distributions to be made pursuant to this Plan.
V. CLASSIFICATION OF CLAIMS AND INTERESTS
5.1 General Overview. As required by the Bankruptcy Code, the Plan places
claims and interests into various Classes according to their right to priority
and other relative rights. The Plan specifies whether each Class of claims or
interests is impaired or unimpaired, and the
33
Plan sets forth the treatment each Class will receive. The table below lists the
Classes of Claims established under the Plan and states whether each particular
Class is impaired or left unimpaired by the Plan. A Class is "unimpaired" if the
Plan leaves unaltered the legal, equitable and contractual rights to which the
Holders of claims or interests in the Class are entitled, with certain
exceptions specified in the Bankruptcy Code.
- -------------------------------------------------------------------------------
Class Claimants Impaired or Unimpaired
- -------------------------------------------------------------------------------
Class 1 Allowed Class 1 Claims Unimpaired
- -------------------------------------------------------------------------------
Class 2 Other Secured Claims Unimpaired
- -------------------------------------------------------------------------------
Class 3 Other Priority Claims that fall within Code Unimpaired
sections 507(a)(3), (4) and (6)
- -------------------------------------------------------------------------------
Class 4 Allowed Unsecured Claims not classified in
Classes 5, 6a or 6b Unimpaired
- -------------------------------------------------------------------------------
Class 5 Allowed Class 5 Claims - Senior Discount
Notes Impaired
- -------------------------------------------------------------------------------
Class 6a Allowed Class 6a Claims - 5.25% Convertible
Subordinated Notes Impaired
- -------------------------------------------------------------------------------
Class 6b Allowed Class 6b Claims - 6.25% Convertible
Subordinated Notes Impaired
- -------------------------------------------------------------------------------
Class 7 Existing DDi Corp. Common Stock Equity
Interests Impaired
- -------------------------------------------------------------------------------
VI. PROVISIONS FOR THE TREATMENT OF CLAIMS AND INTERESTS
6.1 Class 1 - Allowed Class 1 Claims (Unimpaired). Class 1 consists of all
Allowed Class 1 Claims against Debtor DDi Capital by virtue of DDi Capital's
guarantee of the Pre-Restructuring Loan Documents, which guarantee is secured by
a perfected, first priority Lien on and pledge of the stock of Details (the "DDi
Capital Guarantee and Pledge"). All Class 1 Claims are Allowed Class 1 Claims.
Class 1 is unimpaired and all legal, equitable and contractual rights,
remedies, powers and privileges of Holders of Allowed Class 1 Claims shall be
left unaltered, including, without limitation, the DDi Capital Guarantee and
Pledge. Therefore, the Holders of Allowed Class 1
34
Claims are not entitled to vote to accept or reject the Plan and are deemed to
have accepted the Plan.
6.2 Class 2 - Other Secured Claims (Unimpaired). Class 2 consists of any
other Allowed Secured Claims not otherwise classified ("Other Secured Claims").
Each Holder of an Allowed Class 2 Claim shall receive one of the following
alternative treatments, at the election of the Reorganized Debtors:
(a) The legal, equitable and contractual rights of the Allowed Class 2
Claim shall be unaltered by the Plan; or
(b) Such Allowed Class 2 Claim will be otherwise treated in any other
manner so that such Allowed Class 2 Claim shall otherwise be rendered
unimpaired pursuant to section 1124 of the Bankruptcy Code.
Class 2 is unimpaired and the Holders of Allowed Class 2 Claims are
conclusively deemed to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. Therefore, the Holders of Allowed Class 2 Claims are not
entitled to vote to accept or reject the Plan. As of the date hereof, the
Debtors do not believe that there are any Allowed Other Secured Claims.
6.3 Class 3 - Other Priority Claims (Unimpaired). Class 3 consists of all
Allowed Claims against the Debtors accorded priority and right of payment under
section 507(a) of the Bankruptcy Code, other than a Priority Tax Claim or an
Administrative Expense Claim ("Other Priority Claims"). The legal, equitable and
contractual rights of the Holders of Class 3 Claims are unaltered by the Plan.
Unless the Holder of such Allowed Class 3 Claim and the Debtors agree to a
different treatment, each Holder of an Allowed Class 3 Claim shall receive one
of the following alternative treatments, at the election of the Debtors:
(a) to the extent then due and owing on the Effective Date, such Allowed
Class 3 Claim will be paid in full in Cash or such other treatment
agreed to by the Holder of an Allowed Class 3 Claim by the Reorganized
Debtors;
35
(b) to the extent not due and owing on the Effective Date, such Allowed
Class 3 Claim (i) will be paid in full in Cash or such other treatment
agreed to by the Holder of an Allowed Class 3 Claim by the Reorganized
Debtors on the Effective Date or (ii) will be paid in full in Cash or
such other treatment agreed to by the Holder of an Allowed Class 3
Claim by the Reorganized Debtors when and as such Claim becomes due
and owing in the ordinary course of business; or
(c) such Allowed Class 3 Claim will be otherwise treated in any other
manner so that such Allowed Class 3 Claims shall otherwise be rendered
unimpaired pursuant to section 1124 of the Bankruptcy Code.
Any default with respect to any Allowed Class 3 Claim that existed
immediately prior to the filing of the Chapter 11 Cases shall be deemed cured by
virtue of payments made upon the Effective Date. Class 3 is unimpaired and the
Holders of Allowed Class 3 Claims are conclusively deemed to have accepted the
Plan pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the Holders
of Allowed Class 3 Claims are not entitled to vote to accept or reject the Plan.
As of the date hereof, the Debtors do not believe that there are any Allowed
Other Priority Claims.
6.4 Class 4 - Allowed Unsecured Claims Not Classified in Classes 5, 6a or
6b (Unimpaired). Class 4 consists of all Allowed Unsecured Claims which are not
classified in Classes 5, 6a or 6b (other than the Indenture Trustee Fee Claims).
Thirty (30) days after the Effective Date, each Holder of an Allowed Class 4
Claim shall receive, on account of and in full satisfaction of such Holder's
Allowed Class 4 Claim, Cash in full, including post-petition interest to the
extent entitled to such interest under applicable non-bankruptcy law. As of the
date hereof, the Debtors believe that there are no Allowed Class 4 Claims.
Class 4 is unimpaired and the Holders of Allowed Class 4 Claims are not
entitled to vote to accept or reject the Plan.
6.5 Class 5 - Allowed Class 5 Claims - Senior Discount Notes (Impaired).
Class 5 consists of Allowed Class 5 Claims under the Senior Discount Notes and
the Existing Senior
36
Discount Note Indenture. On or as soon as practicable after the Effective Date,
on account of and in full and complete satisfaction of all Allowed Class 5
Claims asserted against any and all Debtors, each Holder of an Allowed Class 5
Claim shall receive a Pro Rata share of (i) participation in the New Senior
Accreting Note Indenture and (ii) the Senior Discount Warrants.
Class 5 is impaired and the Holders of Allowed Class 5 Claims are entitled
to vote to accept or reject the Plan.
6.6 Class 6a - Allowed Class 6a Claims - 5.25% Convertible Subordinated
Notes (Impaired). Class 6a consists of Allowed Class 6a Claims. All Class 6a
Claims are Allowed Class 6a Claims. On the Effective Date, on account of and in
full and complete satisfaction of all Allowed Class 6a Claims asserted against
any and all Debtors, each Holder of an Allowed Class 6a Claim shall receive, (i)
a Pro Rata share of 43.24% of the outstanding shares of New Common Stock,
subject to dilution for (A) all New Common Stock issuable under the Management
Incentive Plan upon the exercise of the Management Options therein, and (B) all
New Common Stock issuable upon the exercise of the New Warrants; and (ii) a Pro
Rata share of (A) 45.45% of the outstanding shares of New Preferred Stock (only
if the Modified Structure is not implemented) or (B) 50% of the outstanding
shares of the New DDi Corp. Preferred Stock (only if the Modified Structure is
implemented).
6.7 Class 6b - Allowed Class 6b Claims - 6.25% Convertible Subordinated
Notes (Impaired). Class 6b consists of Allowed Class 6b Claims. All Class 6b
Claims are Allowed Class 6b Claims. On the Effective Date, on account of and in
full and complete satisfaction of all Allowed Class 6b Claims asserted against
any and all Debtors, each Holder of an Allowed Class 6b Claim shall receive, (i)
a Pro Rata share of 50.76% of the outstanding shares of New Common Stock subject
to dilution for (A) all New Common Stock issuable under the Management Incentive
Plan upon the exercise of the Management Options therein and (B) all New Common
Stock issuable upon the exercise of the New Warrants; and (ii) a Pro Rata share
37
of (A) 45.45% of the outstanding shares of New Preferred Stock (only if the
Modified Structure is not implemented) or (B) 50% of the outstanding shares of
the New DDi Corp. Preferred Stock (only if the Modified Structure is
implemented).
6.8 Class 7 - Allowed Equity Interests - Existing DDi Corp. Common Stock
(Impaired). Class 7 consists of the Allowed Equity Interests of all Holders of
Existing DDi Corp. Common Stock. On or as soon as practicable after the
Effective Date, on account of and in full and complete satisfaction of all
Allowed Class 7 Equity Interests, each Holder of a Class 7 Equity Interest shall
receive a Pro Rata share of 1.0% of the outstanding shares of New Common Stock
on the Effective Date, subject to dilution for (i) all New Common Stock issuable
under the Management Incentive Plan upon exercise of the Management Options
therein and (ii) all New Common Stock issuable upon exercise of the New
Warrants.
VII. ACCEPTANCE OR REJECTION OF THE PLAN
7.1 Introduction. PERSONS OR ENTITIES CONCERNED WITH CONFIRMATION OR THIS
PLAN SHOULD CONSULT WITH THEIR OWN ATTORNEYS BECAUSE THE LAW ON CONFIRMING A
PLAN OF REORGANIZATION IS VERY COMPLEX. The following discussion is intended
solely for the purpose of alerting readers about basic confirmation issues,
which they may wish to consider, as well as certain deadlines for filing claims.
The Debtors and the Co-Sponsors CANNOT and DO NOT represent that the discussion
contained below is a complete summary of the law on this topic.
Many requirements must be met before the Court can confirm a Plan. Some of
the requirements include that the Plan must be proposed in good faith,
acceptance of the Plan, whether the Plan pays creditors at least as much as
creditors would receive in a Chapter 7 liquidation, and whether the Plan is
feasible. The requirements described herein are not the only requirements for
confirmation.
38
7.2 Who May Object to Confirmation of the Plan. Certain Creditors and
parties in interest may object to the confirmation of the Plan, but as explained
below not everyone is entitled to vote to accept or reject the Plan.
7.3 Who May Vote to Accept/Reject the Plan. A Creditor or Equity Interest
Holder has a right to vote for or against the Plan if that Creditor or Equity
Interest Holder has a claim which is both (1) allowed or allowed for voting
purposes and (2) classified in an impaired class.
7.3.1 What Is an Allowed Claim/Equity Interest. As noted above, a
Creditor or Equity Interest Holder must first have an Allowed Claim or Allowed
Equity Interest to vote. These terms are defined in sections 2.1.26 and 2.1.28
of this Plan.
7.3.2 What Is an Impaired Class. A class is impaired if the Plan
alters the legal, equitable, or contractual rights of the claims or interests in
that class, other than the right to accelerate the claim upon certain kinds of
defaults. In this case, the Debtors believe that all classes are impaired except
Classes 1, 2, 3 and 4.
7.3.3 Who is Not Entitled to Vote. The following four types of claims
are not entitled to vote: (1) claims that have not been Allowed; (2) claims in
unimpaired classes; (3) claims entitled to priority pursuant to Bankruptcy Code
sections 507(a)(1), (a)(2), and (a)(8); and (4) claims in classes that do not
receive or retain any value under the Plan. Claims in unimpaired classes are not
entitled to vote because such classes are deemed to have accepted the Plan.
Claims entitled to priority pursuant to Bankruptcy Code sections 507(a)(1),
(a)(2), and (a)(7) are not entitled to vote because such claims are not placed
in classes and they are required to receive certain treatment specified by the
Bankruptcy Code. Claims in classes that do not receive or retain any property
under the Plan do not vote because such classes are deemed to have rejected the
Plan. The Debtors believe that all classes are entitled to vote except Classes
1, 2, 3 and 4. Classes 1, 2, 3 and 4 are unimpaired under the Plan and
consequently are not entitled to vote, because they are conclusively deemed to
have accepted the Plan.
39
EVEN IF YOUR CLAIM IS OF THE TYPE DESCRIBED ABOVE, YOU MAY STILL HAVE A
RIGHT TO OBJECT TO THE CONFIRMATION OF THE PLAN.
7.3.4 Who Can Vote in More Than One Class. A Creditor may hold Claims
in more than one class, and may vote the Claims held in each Class.
7.3.5 Votes Necessary for a Class to Accept the Plan. A class of
claims is deemed to have accepted the Plan when more than one-half (1/2) in
number and at least two-thirds (2/3) in dollar amount of the claims that
actually voted, vote to accept the Plan.
7.3.6 Treatment of Nonaccepting Classes. As noted above, even if there
are impaired classes that do not accept the proposed Plan, the Court may
nonetheless confirm the Plan if the nonaccepting classes are treated in the
manner required by the Bankruptcy Code and at least once impaired class of
claims accepts the Plan. The process by which a plan may be confirmed and become
binding on non-accepting classes is commonly referred to as "cramdown." The
Bankruptcy Code allows the Plan to be "crammed down" on nonaccepting classes of
claims or interests if it meets all statutory requirements except the voting
requirements of 1129(a)(8) and if the Plan does not "discriminate unfairly" and
is "fair and equitable" with respect to each impaired class that has not voted
to accept the Plan, as set forth in 11 U.S.C. (S) 1129(b) and applicable case
law.
7.3.7 Request for Confirmation Despite Nonacceptance by Impaired
Class(es). The parties proposing this Plan will ask the Court to confirm this
Plan by cramdown on any impaired class if such class does not vote to accept the
Plan.
VIII. MEANS FOR IMPLEMENTING THE PLAN
8.1 Introduction. This section is intended to explain the means through
which the Debtors intend to effectuate the recapitalization and reorganization
provided for under the Plan, and it addresses how the Debtors intend to fund the
obligations to Creditors undertaken in the Plan. It provides information
regarding prospective corporate governance, funding sources for Plan
obligations, the new equity interests being issued pursuant to the Plan, and
other material issues bearing upon the performance of the Plan.
40
8.2 The Reorganized Debtors. Each of the Debtors shall, as Reorganized
Debtor, continue to exist after the Effective Date of the Plan as a separate
legal entity, with all of the powers of a corporation under the laws of their
respective states of incorporation, and without prejudice to any right to alter
or terminate such existence (whether by merger, acquisition, or otherwise) under
such applicable state law. Each Reorganized Debtor shall continue to have all
corporate powers and rights accorded to the same under the laws of the
jurisdiction of its incorporation.
8.3 Issuance of New Common Stock. On the Effective Date, Reorganized DDi
Corp. shall issue the New Common Stock in accordance with the Plan, consistent
with the Amended and Restated DDi Corp. Certificate of Incorporation and other
Plan Documents, which shall be distributed as described herein. On the Effective
Date, the New Common Stock shall be issued for distribution to the Holders of
Allowed Class 6a Claims, Allowed Class 6b Claims, Class 7 Equity Interests and
the management of Reorganized DDi Corp.. The New Common Stock issued to the
Holders of Allowed Class 6a Claims and Allowed Class 6b Claims shall represent
94% of the New Common Stock outstanding on the Effective Date. The New Common
Stock issued to the management of Reorganized DDi Corp. shall represent 5% of
the New Common Stock outstanding on the Effective Date; however, one-half (1/2)
of the New Common Stock issued to management shall be vested on the Effective
Date and, subject to the Management Incentive Plan, one-half (1/2) of the New
Common Stock issued to management shall vest twelve (12) months after the
Effective Date. The New Common Stock issued to the Holders of Class 7 Equity
Interests shall represent 1% of the New Common Stock outstanding on the
Effective Date. All shares of New Common Stock issued pursuant to the Plan will
be, upon such issuance, validly issued, and non-assessable and upon payment of
any applicable warrant or option exercise price, fully paid.
8.4 Issuance of Secured Lender Warrants. On the Effective Date, Reorganized
DDi Corp. shall issue the Secured Lender Warrants representing 10.0% of the New
Common
41
Stock of Reorganized DDi Corp. on a fully diluted basis on the Effective Date,
in accordance with the Plan, consistent with the Secured Lender Warrant
Agreement, the Restructuring Loan Documents and other Plan Documents, which
shall be distributed to the Secured Lenders as described herein. The Secured
Lender Warrant Agreement shall be substantially in the form attached as an
Exhibit to the Plan Documentary Supplement. On the Effective Date, the Secured
Lender Warrants shall be issued to the Secured Lenders ratably in accordance
with their respective commitments and held in an escrow account until the
twenty-four (24) month anniversary of the Effective Date (the "Second
Anniversary Date"). The terms of the Secured Lender Warrants are more fully
described in the term sheet attached as Exhibit "5" to the Plan.
8.5 Issuance of Senior Discount Warrants. On the Effective Date,
Reorganized DDi Corp. shall issue the Senior Discount Warrants representing 2.5%
of the New Common Stock of Reorganized DDi Corp. on a fully diluted basis on the
Effective Date, in accordance with the Plan, consistent with the Senior Discount
Warrant Agreement, the Restructuring Loan Documents and other Plan Documents,
which shall be distributed to the Senior Discount Note Holders as described
herein. The Senior Discount Warrant Agreement shall be substantially in the form
attached as an Exhibit to the Plan Documentary Supplement. On the Effective
Date, the Senior Discount Warrants shall be issued ratably to the Senior
Discount Note Holders and held in an escrow account until the Second Anniversary
Date. The terms of the Senior Discount Warrants are more fully described in the
term sheet attached as Exhibit "4" to the Plan.
8.6 Issuance of Management Options Under Management Incentive Plan. On the
Effective Date, Reorganized DDi Corp. shall grant the Management Options under
the Management Incentive Plan, in accordance with the Plan, consistent with the
Management Incentive Plan and other Plan Documents. The terms of the Management
Incentive Plan are more fully described in the term sheet attached as Exhibit
"1" to the Plan. The Management Incentive Plan shall be substantially in the
form attached as an Exhibit to the Plan Documentary Supplement.
42
8.7 Issuance of New Preferred Stock or New DDi Corp. Preferred Stock. On
the Effective Date, DDi Europe shall issue the New Preferred Stock (only if the
Modified Structure is not implemented) or Reorganized DDi Corp. shall issue the
New DDi Corp. Preferred Stock (only if the Modified Structure is implemented) in
accordance with the Plan, consistent with the Amended and Restated DDi Europe
Articles of Association or the Amended and Restated DDi Corp. Certificate of
Incorporation, as the case may be, and other Plan Documents, which shall be
distributed as described herein. On the Effective Date, the New Preferred Stock
or the New DDi Corp. Preferred Stock, as the case may be, shall be issued to the
Holders of Class 6a and 6b Claims in accordance with sections 6.6 and 6.7 of the
Plan. The Amended and Restated DDi Europe Articles of Association and the
Amended and Restated DDi Corp. Certificate of Incorporation shall be
substantially in the forms attached as Exhibits to the Plan Documentary
Supplement. All shares of New Preferred Stock or New DDi Corp. Preferred Stock,
as the case may be, issued pursuant to the Plan will be, upon such issuance,
validly issued, and non-assessable and fully paid. The terms of the New
Preferred Stock and the New DDi Corp. Preferred Stock are more fully described
in the term sheet attached as Exhibit "3" to the Plan.
8.8 Amended and Restated Articles or Certificate of Incorporation or
Charter and Bylaws. As of the Effective Date, the Certificate of Incorporation
of Reorganized DDi Corp. shall be the Amended and Restated DDi Corp. Certificate
of Incorporation, substantially in the form attached as an Exhibit to the Plan
Documentary Supplement. The Amended and Restated DDi Corp. Certificate of
Incorporation will, among other provisions, prohibit the issuance of non-voting
equity securities to the extent required by section 1123(a)(6) of the Bankruptcy
Code. As of the Effective Date, the Bylaws of Reorganized DDi Corp. shall be the
Amended and Restated DDi Corp. Bylaws substantially in the form attached as an
Exhibit to the Plan Documentary Supplement. As of the Effective Date, the
Articles of Association of DDi Europe shall be the Amended and Restated DDi
Europe Articles of Association, substantially in the form attached as an Exhibit
to the Plan Documentary Supplement. The Amended and Restated DDi Corp.
Certificate of Incorporation, Amended and Restated DDi Corp. Bylaws and
43
the Amended and Restated DDi Europe Articles of Association shall be deemed
effective as of the Effective Date by virtue of the Confirmation Order, without
the need for any corporate, director or stockholder action.
8.9 Treatment of the Senior Debt Parties Under the Pre-Restructuring Loan
Documents. On the Effective Date, the aggregate outstanding principal amount of
indebtedness and the face amount of letters of credit under the
Pre-Restructuring Loan Documents in the amount of $72,892,916.17 and any fees
and interest accrued and unpaid thereon shall be restructured, exchanged and
repaid pursuant to the terms of the Restructuring Loan Documents and all the
rights of the Senior Debt Parties under the Pre-Restructuring Loan Documents
shall be modified, exchanged and restated as provided in the Restructuring Loan
Documents. On the Effective Date, DDi Corp. shall execute and deliver (i) the
New DDi Corp. Guarantee and Pledge Agreement and deliver one hundred percent
(100%) of the common stock of DDi Intermediate to the Administrative Agent as
Collateral pursuant thereto, (ii) the Secured Lender Warrant Agreement and shall
issue the Secured Lender Warrants to the Secured Lenders pursuant thereto, (iii)
the New Common Stock Registration Rights Agreement and (iv) the Secured Lender
Warrant Escrow Agreement. On the Effective Date, DDi Intermediate shall pledge
one hundred percent (100%) of the common stock of DDi Capital to the
Administrative Agent as Collateral. The New DDi Corp. Guarantee and Pledge
Agreement and the Secured Lender Warrant Agreement shall be in the form attached
as an Exhibit to the Plan Documentary Supplement. The terms of the Secured
Lender Warrants are more fully described in the term sheet attached as Exhibit
"5" to the Plan.
8.10 Treatment of the Senior Discount Note Holders. On the Effective Date,
the aggregate outstanding principal amount of the Senior Discount Notes and the
fees and interest accrued and unpaid thereon shall be restructured and repaid
pursuant to the New Senior Accreting Note Indenture and all the rights of the
Senior Accreting Note Holders under the Existing Senior Discount Note Indenture
shall be extinguished. The New Senior Accreting Note
44
Indenture shall be substantially in the form attached to the Plan Documentary
Supplement as an Exhibit. In addition, the Senior Discount Warrants shall be
issued ratably to the Senior Discount Note Holders and held in an escrow account
until the Second Anniversary Date. The terms of the Senior Discount Warrants are
more fully described in the term sheet attached as Exhibit "4" to the Plan.
8.11 Funding of the Plan. All Cash necessary for the Debtors to pay their
obligations under the Plan shall be obtained by the Debtors from their North
American subsidiaries; provided, however, that: (a) this section 8.11 shall not
create or vest in any creditor, claimant or Holder any Claim against such
subsidiaries; (b) the Debtors shall have the exclusive right to collect the Cash
from their subsidiaries; (c) this section 8.11 shall not create, or be
interpreted or construed to create, any liability of any such subsidiaries to
any Person other than the Debtors; and (d) the Debtors' rights under this
section 8.11 shall not be enforceable to the extent that they would cause a
breach of the Restructuring Loan Documents or the Budget and Funding Agreement.
Nothing in this section 8.11 shall impair any rights or Claims of any entity
against the Debtors, nor modify the obligations of the Debtors under the
Bankruptcy Code, including section 1129(a)(9) of the Bankruptcy Code, or the
Plan.
8.12 Management/Board of Directors. On the Effective Date, the operation of
the Reorganized Debtors shall become the general responsibility of the
Reorganized Debtors' newly constituted Board of Directors (each a "Board" and
collectively, the "Boards"), who shall thereafter have the responsibility for
the management and control of the Reorganized Debtors. Immediately following the
Effective Date, the New Board of Reorganized DDi Corp. shall consist of seven
members, comprised as follows: (a) Bruce McMaster, (b) David Blair, (c) two
Convertible Subordinated Note Holder designees (designated by the Ad Hoc
Convertible Note Holder Committee prior to distribution of the Plan) which
designees will be included in the Plan as sent to the Convertible Subordinated
Note Holders for approval and (d) three Convertible Subordinated Note Holder
designees (selected by the Ad Hoc Convertible Note Holder
45
Committee prior to distribution of the Plan) which designees will be included in
the Plan as sent to the Convertible Subordinated Note Holders for approval
(designees will be selected from list to be developed in conjunction with
Reorganized DDi Corp., the Ad Hoc Convertible Note Holder Committee and their
respective advisors). Prior to or immediately following the Effective Date of
the Plan, Reorganized DDi Corp. shall use commercially reasonable efforts to
provide to the Ad Hoc Convertible Note Holder Committee the names of at least
three directors who meet the "independence" standards of the Securities and
Exchange Commission and the Nasdaq National Market (whether or not Reorganized
DDi Corp. or any of the securities of Reorganized DDi Corp. are subject to such
standards). After the Effective Date of the Plan, and not less than annually
thereafter, prior to any election by the stockholders or appointments by the
Board (only if there are not remaining at the time of any such appointment by
the Board, two members of the Board who have been previously recommended as
nominees by the Preferred Stock Representatives (as defined below)), two Holders
of the New Preferred Stock or New DDi Corp. Preferred Stock (if the Modified
Structure is implemented) (who in either case initially will be Providence
Capital, LLC and Tablerock Fund Management, LLC (the "Preferred Stock
Representatives"), together, shall make reasonable recommendations in good faith
(the "Designation Right") to the Board (or more frequently in the event any such
Holder transfers any of its shares of New Preferred Stock or New DDi Corp.
Preferred Stock, as the case may be, along with its Designation Right to an
unaffiliated third party) with respect to two nominees, who shall be qualified
and otherwise appropriate candidates for the Board in the event of an election
by the stockholders and a number of nominees necessary to result in there being
two acting members of the Board who have been recommended by such Preferred
Stock Representatives in the event of an appointment by the Board. Such
recommendation may be made by delivering notice thereof to Reorganized DDi Corp.
within sixty (60) days after the written request by the Board of names for
consideration (or more frequently in the event such Holder of New Preferred
Stock or New DDi Corp. Preferred Stock, as the case may be, and any transferee
thereof each certify that such Holder of New Preferred Stock or New DDi Corp.
46
Preferred Stock, as the case may be, has transferred its shares of New Preferred
Stock or New DDi Corp. Preferred Stock, as the case may be, to such transferee).
The Board shall submit a written request for names for consideration once a year
(or more frequently in the event such Holder of New Preferred Stock or New DDi
Corp. Preferred Stock, as the case may be, and any transferee thereof each
certify that such Holder of New Preferred Stock or New DDi Corp. Preferred
Stock, as the case may be, has transferred its shares of New Preferred Stock or
New DDi Corp. Preferred Stock, as the case may be, to such transferee). If at
any time while the New Preferred Stock or New DDi Corp. Preferred Stock, as the
case may be, remains outstanding, those nominees recommended by such Holders of
the New Preferred Stock or New DDi Corp. Preferred Stock, as the case may be,
are not appointed by the Board to the Board (if the appointments are determined
by the Board) or nominated by the Board or management of Reorganized DDi Corp.
for election by the stockholders of Reorganized DDi Corp. to the Board, then as
a remedy to the Holders of the New Preferred Stock or the New DDi Corp.
Preferred Stock, as the case may be, for breach of the Designation Right, the
New Preferred Stock or the New DDi Corp. Preferred Stock, as the case may be,
shall bear a dividend rate equal to 17% per annum effective retroactively to the
date of issuance (until such time as two nominees recommended to the Board
pursuant to the foregoing procedures are appointed or nominated, whereupon the
dividend rate shall be decreased to 15% per annum commencing on the date of such
complying appointments or nominations.) Notwithstanding the foregoing, if (i)
any member of the Board who holds New Preferred Stock or New DDi Corp. Preferred
Stock, as the case may be (or who is a stockholder, director, member, partner,
employee or otherwise an affiliate of a person or entity who holds New Preferred
Stock or New DDi Corp. Preferred Stock, as the case may be) (each, a "Preferred
Stock Board Member") votes against an appointment or nominee to the Board
recommended by such holders of the New Preferred Stock or New DDi Corp.
Preferred Stock, as the case may be (the "Recommended Board Member") in
accordance with the foregoing provisions, (ii) such Recommended Board Member is
not appointed or nominated to the Board because one or more Preferred Stock
Board Members votes against such
47
Recommended Board Member and (iii) such Recommended Board Member would have been
appointed or nominated to the Board had such Preferred Stock Board Member voted
for such Recommended Board Member, then there shall be no increase in the
dividend rate pursuant to the provisions of this section."
8.13 Corporate Actions. On the Effective Date, all actions contemplated by
the Plan shall be deemed authorized and approved in all respects (subject to the
provisions of the Plan) by virtue of the entry of the Confirmation Order, in
accordance with the Bankruptcy Code and applicable State law (including but not
limited to section 303 of the Delaware General Corporations Law, to the extent
applicable, and any analogous provision of the business corporation law or code
of each other State in which any Reorganized Debtor is incorporated or
organized) and without any requirement of further action by the stockholders,
officers or directors of the Debtors or the Reorganized Debtors or DDi Europe,
including, without limitation, the following: (a) the adoption and the filing
with the Secretary of State of the State of Delaware of the Amended and Restated
DDi Corp. Certificate of Incorporation; (b) the adoption of the Amended and
Restated DDi Corp. Bylaws; (c) the adoption and filing with Companies House of
the Amended and Restated DDi Europe Articles of Association (only if the
Modified Structure is not implemented); (d) the issuance by DDi Europe of the
New Preferred Stock (only if the Modified Structure is not implemented), (e) the
issuance by Reorganized DDi Corp. of the New Common Stock, the New DDi Corp.
Preferred Stock (only if the Modified Structure is implemented), the New
Warrants and the Management Options contemplated under the Management Incentive
Plan; (f) the execution and the delivery of, and the performance under, each of
the Plan Documents, the Restructuring Loan Documents and all documents and
agreements contemplated by or relating to any of the foregoing; and (g) the
removal of all members of the respective Boards of Directors of the Debtors and
the election of all members of the Boards of Directors of the Reorganized
Debtors designated pursuant to the Plan. All matters provided for under the Plan
involving the corporate structure of the Debtors or Reorganized Debtors and any
corporate action required by the Debtors or Reorganized Debtors in connection
48
with the Plan shall be deemed to have occurred and shall be in effect pursuant
to the Bankruptcy Code, without any requirement of further action by the
shareholders, officers or directors of the Debtors or Reorganized Debtors. On
the Effective Date, the appropriate officers of the Reorganized Debtors are
authorized and directed to execute and to deliver the Plan Documents, the
Restructuring Loan Documents and any other agreements, documents and instruments
contemplated by the Plan, the Plan Documents or the Restructuring Loan Documents
in the name and on behalf of the Reorganized Debtors.
8.14 Revesting of Assets. Except as otherwise specifically provided in the
Plan, on the Effective Date, all property of the Estates of the Debtors
(including all rights of action held by such Estates, but excluding property
that has been abandoned pursuant to an order of the Bankruptcy Court) shall
revest in each of the Debtors whose Estates owned such property or interest in
property immediately prior to the Effective Date, free and clear of all Claims,
Liens, charges, encumbrances, rights and Equity Interests of Creditors and
equity security holders. As of the Effective Date, the Reorganized Debtors may
operate their businesses and use, acquire, and dispose of property and settle
and compromise Claims or Equity Interests without the supervision of, or any
authorization from, the Bankruptcy Court or the United States Trustee, and free
of any restriction of the Bankruptcy Code or Bankruptcy rules, other than those
restrictions specifically provided for in the Plan or the Confirmation Order. As
of the Effective Date, all property of the Reorganized Debtors shall be free and
clear of all Claims, Liens, encumbrances, and other interests of creditors and
Holders of Equity Interests, except as otherwise expressly provided herein.
8.15 Cancellation of Existing Securities and Agreements. On the Effective
Date, except as otherwise specifically provided for in the Plan (including,
without limitation, the DDi Capital Guarantee and Pledge) and except for the
Debtors' obligation to pay, reimburse and indemnify the 5.25% Trustee, the 6.25%
Trustee, the Senior Discount Trustee and the rights of the 5.25% Trustee, the
6.25% Trustee, the Senior Discount Trustee to payment thereof (including
49
any priority or lien rights); provided that the Indentures shall continue in
effect for the purposes of allowing the 5.25% Trustee, the 6.25% Trustee, the
Senior Discount Trustee, agent or servicer to make the distributions to be made
on account of such Allowed Claims in connection with the Indentures under the
Plan, (a) all existing Equity Interests and any note, bond, indenture, or other
instrument or document evidencing or creating any indebtedness or obligation of
or ownership interest in the Debtors, including, without limitation, the
Existing DDi Corp. Common Stock, any existing warrants or vested or unvested
options to purchase Equity Interests in DDi Corp., the Convertible Subordinated
Note Indentures, the Convertible Subordinated Notes, the Existing Senior
Discount Note Indenture and the Senior Discount Notes will be cancelled, (b) the
Pre-Restructuring Loan Documents will be modified, exchanged and restated as
provided in the Restructuring Loan Documents and (c) the obligations of, Claims
against, and/or Equity Interests in the Debtors under, relating, or pertaining
to any agreements, indentures, certificates of designation, bylaws, or
certificate or articles of incorporation or similar documents governing existing
Equity Interests and any note, bond, indenture, or other instrument or document
evidencing or creating any indebtedness or obligation of the Debtors, as the
case may be, including, without limitation, the Existing DDi Corp. Common Stock,
the Convertible Subordinated Note Indentures, and the Convertible Subordinated
Notes, the Senior Discount Note Indenture and the Senior Discount Notes will be
released and discharged.
8.16 Preservation of Rights of Action; Settlement of Litigation Claims.
Except as otherwise provided herein or the Confirmation Order, or in any
contract, instrument, release, indenture or other agreement entered into in
connection with this 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
without the approval of the Bankruptcy Court. The Reorganized Debtors or their
successor(s) may pursue such retained
50
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.
IX. DISTRIBUTIONS
9.1 Distribution Agent. The Distribution Agent shall make all distributions
required hereunder, except with respect to (1) a Holder of a Claim whose
distribution is governed by the Indentures, which distributions shall be
deposited by the Distribution Agent with the 5.25% Trustee, the 6.25% Trustee or
the Senior Discount Trustee, as the case may be, who shall respectively deliver
such distributions to the Holders of Claims in accordance with the provisions
hereof and the terms of the Indentures and (2) a distribution governed by the
Secured Lender Warrant Agreement, which distributions shall be deposited by the
Distribution Agent with the Administrative Agent, who shall deliver such
distribution to the Secured Lenders in accordance with the terms hereof and the
terms of the Secured Lender Warrant Agreement. The Distribution Agent may employ
one or more sub agents on such terms and conditions as it may agree in its
discretion, upon consultation with the Required Lenders. The Distribution Agent
shall not be required to provide any bond in connection with the making of any
distributions pursuant to the Plan.
9.2 Distributions.
9.2.1 Dates of Distributions. Any distribution required to be made on
the Effective Date shall be deemed timely if made as soon as practicable after
such date and, in any event, within thirty (30) days after such date, except
that the distributions required to be made on the Effective Date to the (a)
Senior Discount Trustee for distribution to the Senior Discount Note Holders for
Allowed Class 5 Claims, (b) 5.25% Trustee and the 6.25% Trustee for distribution
to the Convertible Subordinated Note Holders for Allowed Class 6a Claims and
Allowed Class 6b Claims, and (c) Administrative Agent for distribution to the
Secured Lenders, shall be made on the Effective Date. Any distribution required
to be made upon a Disputed Claim becoming an
51
Allowed Claim and no longer being a Disputed Claim shall be deemed timely if
made as soon as practicable thereafter.
9.2.2 Limitation on Liability. Neither the Debtors, the Reorganized
Debtors, the Ad Hoc Committees, the 5.25% Trustee, the 6.25% Trustee, the Senior
Discount Trustee, the Administrative Agent and the Collateral Agent, their
respective Affiliates, nor any of their respective employees, members, officers,
directors, agents, or professionals or Affiliates shall be liable for (i) any
acts or omissions (except for gross negligence or willful misconduct) in
connection with implementing the distribution provisions of this Plan and the
making or withholding of distributions pursuant to the Plan, or (ii) any change
in the value of distributions made pursuant to the Plan resulting from any
delays in making such distributions in accordance with the Plan's terms
(including but not limited to any delays caused by the resolution of Disputed
Claims).
9.3 Old Instruments and Securities.
9.3.1 Surrender and Cancellation of Instruments and Securities. As a
condition to receiving any distribution pursuant, to the Plan, each Person
holding any note or other instrument or security (other than the Convertible
Subordinated Notes, Senior Discount Notes and the DDi Capital Guarantee and
Pledge) (collectively "Instruments or Securities" and individually an
"Instrument or Security") evidencing an existing Claim against or in a Debtor
must surrender such Instrument or Security to the Distribution Agent.
9.3.2 Rights of Persons Holding Instruments and Securities. As of the
Effective Date, and whether or not surrendered by the Holder thereof, (a) all
Existing DDi Corp. Common Stock, Convertible Subordinated Notes, Senior Discount
Notes and all other Instruments and Securities evidencing any Claims or Equity
Interests (other than the DDi Capital Guarantee and Pledge) shall be deemed
automatically cancelled and deemed void and of no further force or effect,
without any further action on the part of any person, and any Claims or Equity
Interests under or evidenced by such Existing DDi Corp. Common Stock,
Convertible Subordinated Notes, Senior Discount Notes or other Instruments or
Securities (other than the DDi Capital
52
Guarantee and Pledge) shall be deemed discharged. All options to purchase any
stock of DDi Corp. shall be deemed rejected, cancelled and terminated as of the
Petition Date.
9.3.3 Cancellation of Liens. Except as otherwise provided in the Plan,
any Lien securing any Secured Claim shall be deemed released and discharged, and
the Person holding such Secured Claim shall be authorized and directed to
release any collateral or other property of the Debtors (including, without
limitation, any cash collateral) held by such Person and to take such actions as
may be requested by the Reorganized Debtors to evidence the release of such
Lien, including, without limitation, the execution, delivery and Filing or
recording of such releases as may be requested by Reorganized Debtors at the
sole expense of Reorganized Debtors. This subsection 9.3.3 shall not apply to
any Lien securing any of the Pre-Restructuring Bank Indebtedness.
9.4 De Minimis Distributions and Fractional Shares. No Cash payment shall
be made by the Reorganized Debtors to any Holder of Allowed Claims (other than
Administrative Claims) unless a request therefore is made in writing to the
Reorganized Debtors. No fractional shares of New Common Stock and New Preferred
Stock (or New DDi Corp. Preferred Stock if the Modified Structure is
implemented) shall be distributed; any entity that otherwise would be entitled
to receive a fractional share distribution under this Plan shall instead receive
an amount of shares rounded down to the next whole number. Any securities or
other property that is not distributed as a consequence of this section shall,
after the last distribution on account of Allowed Claims in the applicable Class
be treated as "Unclaimed Property" under the Plan. This section 9.4 shall not
apply to any of the Secured Lenders.
9.5 Delivery of Distributions. Except as provided in Section 9.7 with
respect to Unclaimed Property, distributions to Holders of Allowed Claims,
Allowed Administrative Claims, Allowed Class 5 Claims, Allowed Class 6a Claims
and Allowed Class 6b Claims shall be distributed by mail as follows: (1) with
respect to each Holder of an Allowed Claim that has filed a proof of claim, at
the address for such Holder as maintained by the official claims agent for the
Debtors; (2) with respect to each Holder of an Allowed Claim that has not filed
a proof of
53
claim, at the address reflected on the Schedules filed by the Debtors, provided,
however, that if the Debtors or the Reorganized Debtors have received a written
notice of a change of address for such Holder, the address set forth in such
notice shall be used; (3) with respect to each Holder of an Allowed
Administrative Claim, at such address as the Holder may specify in writing; (4)
with respect to each Holder of an Allowed Class 6a Claim or Allowed Class 6b
Claim, to the 5.25% Trustee or the 6.25% Trustee, as the case may be; (5) with
respect to each Holder of an Allowed Claim under the Senior Discount Notes and
the Existing Senior Discount Note Indenture, to the Senior Discount Trustee; or
(6) with respect to each Holder of an Allowed Class 1 Claim, to the
Administrative Agent.
9.6 Undeliverable Distributions. If the distribution of Cash, New Preferred
Stock or New DDi Corp. Securities (other than the Secured Lender Warrants) to
the Holder of any Allowed Claim, Allowed Administrative Claim, Allowed Class 5
Claims, Allowed Class 6a Claims, or Allowed Class 6b Claims, is returned to the
Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or the Senior Discount
Trustee as undeliverable (any such distribution being hereinafter referred to as
"Unclaimed Property"), no further distribution shall be made to such Holder
unless and until the Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or
the Senior Discount Trustee is notified in writing of such Holder's then current
address. Subject to the remainder of this section and following section 9.7,
Unclaimed Property shall remain in the possession of the Distribution Agent, the
5.25% Trustee, the 6.25% Trustee or the Senior Discount Trustee pursuant to this
Section, and shall be set aside and (in the case of Cash) held in a segregated
interest bearing account (as to Cash Unclaimed Property) to be maintained by the
Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or the Senior Discount
Trustee, as the case may be, until such time as the subject distribution becomes
deliverable. Nothing contained in the Plan shall require the Distribution Agent,
the 5.25% Trustee, the 6.25% Trustee, the Senior Discount Trustee, or any other
Person to attempt to locate such Person. This section 9.6 shall not apply to any
of the Secured Lenders.
54
9.7 Disposition of Unclaimed Property. If the Person entitled thereto
notifies the Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or the
Senior Discount Trustee, as the case may be, of such Person's claim to the
distribution of Unclaimed Property within nine (9) months following the
Effective Date, the Unclaimed Property distributable to such Person, together
with any interest or dividends earned thereon, shall be paid or distributed to
such Person. Any Holder of an Allowed Claim, Allowed Administrative Claim,
Allowed Class 5 Claim, Allowed Class 6a Claim or Allowed Class 6b Claim that
does not assert a claim in writing for Unclaimed Property held by the
Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or the Senior Discount
Trustee, as the case may be, within nine (9) months after the Effective Date
shall no longer have any claim to or interest in such Unclaimed Property, and
shall be forever barred from receiving any distributions under this Plan or
otherwise from the Distribution Agent, the 5.25% Trustee, the 6.25% Trustee or
the Senior Discount Trustee, as the case may be. In such cases, any Unclaimed
Property held for distribution on account of such Allowed Claims, Administrative
Claims, Allowed Class 5 Claims, Allowed Class 6a Claims and Allowed Class 6b
Claims shall be retained by the Distribution Agent, the 5.25% Trustee, the 6.25%
Trustee or the Senior Discount Trustee, as the case may be, as follows: pursuant
to Bankruptcy Code section 347(b), (a) any undistributed Cash shall be the
property of the Distribution Agent; provided, however, that any undistributed
Cash whose distribution is governed by the Existing Senior Discount Note
Indenture shall be returned by the Senior Discount Trustee to the Distribution
Agent and distributed by the Distribution Agent to DDi Capital, (b) any
undistributed New DDi Corp. Securities (other than the Secured Lender Warrants)
shall be the property of the Distribution Agent; provided, however that any
undistributed New Common Stock and New Preferred Stock (or New DDi Corp.
Preferred Stock if the Modified Structure is implemented) which was distributed
for the benefit of the Convertible Subordinated Note Holders shall be retained
by or transferred to the 5.25% Trustee or the 6.25% Trustee, as the case may be,
and distributed Pro Rata to Holders of Allowed Class 6a Claims and Allowed Class
6b Claims that have claimed their initial distributions, in each case,
55
free from any restrictions thereon, and such undistributed Cash or securities
shall not be subject to the unclaimed property or escheat laws of any State or
other governmental unit. This section 9.7 shall not apply to any of the Secured
Lenders.
9.8 Effect of Distribution Record Date. As of the close of business on the
Distribution Record Date, the transfer register for any instrument, security, or
other documentation canceled pursuant to the Plan (including, but not limited
to, the Existing DDi Corp. Common Stock, any existing warrants or vested or
unvested options to purchase Equity Interests in DDi Corp., the Convertible
Subordinated Note Indentures, the Convertible Subordinated Notes, the Existing
Senior Discount Indenture and the Senior Discount Notes) shall be closed and
there shall be no further changes in the record Holders of any such instrument,
security, or documentation. The Reorganized Debtors shall have no obligation to
recognize the transfer of any such instrument, security, or other documentation
occurring after the Distribution Record Date, and shall be entitled for all
purposes herein to recognize and deal only with those Holders of record as of
the close of business on the Distribution Record Date.
9.9 Setoffs. Except as otherwise provided herein, the Reorganized Debtors
may, pursuant to sections 502(d) or 553 of the Bankruptcy Code or applicable
non-bankruptcy law, offset against any Allowed Claim (other than an Allowed
Class 1 Claim, Allowed Class 5 Claim, Allowed Class 6a Claim, Allowed Class 6b
Claim), and the distributions to be made pursuant to the Plan on account of such
Claim (before any distribution is made on account of such Claim), the Claims,
rights, and Causes of Action of any nature that the Debtors or Reorganized
Debtors may hold against the Holder of such Allowed Claim; provided, however,
that neither the failure to effect such a setoff nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Debtors or the Reorganized
Debtors of any such Claims, rights, and causes of Action that the Debtors or the
Reorganized Debtors may possess against such Holder.
56
X. OBJECTIONS TO CLAIMS AND DISPUTED CLAIMS
10.1 Objections to Claims. The Reorganized Debtors shall have the sole and
exclusive right to file and prosecute objections to Claims. Unless another date
is established by order of the Bankruptcy Court or the Plan, any objection to a
Claim shall be Filed with the Bankruptcy Court and served on the Person holding
such Claim on or before the applicable Claims Objection Deadline. The
Reorganized Debtors shall have the right to petition the Bankruptcy Court,
without notice or a hearing, for an extension of the Claims Objection Deadline.
10.2 Treatment of Disputed Claims.
10.2.1 No Distribution Pending Allowance. If any portion of a Claim is
a Disputed Claim, no payment or distribution provided for under the Plan shall
be made on account of such Claim unless and until such Claim becomes an Allowed
Claim and is no longer a Disputed Claim; provided, however, that this section
does not apply to any distributions made on account of the Allowed Class 6a
Claims or Allowed Class 6b Claims.
10.2.2 Distribution After Allowance. As soon as practicable following
the date on which a Disputed Claim becomes an Allowed Claim and is no longer a
Disputed Claim, the Distribution Agent shall distribute to the Person holding
such Claim any Cash or New Common Stock that would have been distributable to
such Person if on the Effective Date such Claim had been an Allowed Claim and
not a Disputed Claim.
XI. EFFECT OF CONFIRMATION OF PLAN
11.1 Discharge. Except as otherwise specifically provided in the Plan or in
the Confirmation Order, pursuant to section 1141(d) of the Bankruptcy Code, the
distributions and rights that are provided in the Plan shall be in complete
satisfaction, discharge and release, effective as of the Effective Date, of all
Claims, whether known or unknown, against liabilities of, Liens on, obligations
of, rights against and Equity Interests in the Debtors, or any of their assets
or properties, regardless of whether any property shall have been distributed or
retained
57
pursuant to the Plan on account of such Claims, rights and Equity Interest,
including but not limited to, Claims and Equity Interests that arose before the
Confirmation Date, including all debts of the kind specified in section 502(g),
502(h) and 502(i) of the Bankruptcy Code, in each case whether or not (a) a
proof of claim or interest based upon such Claim, debt or Equity Interest is
filed or deemed filed under section 501 of the Bankruptcy Code, (b) a Claim of
Equity Interest based upon such Claim, debt, right or Equity Interest is allowed
under section 502 of the Bankruptcy Code, or (c) the Holder of such a Claim,
right, or Equity Interest accepted the Plan. The Confirmation Order shall
constitute a determination of the discharge of all of the Claims against and
Equity Interest in the Debtors, subject to the occurrence of the Effective Date.
11.2 Injunction. Except as otherwise expressly provided in the Plan, the
documents executed pursuant to the Plan, or the Confirmation Order, on and after
the Effective Date, all Persons and Entities who have held, currently hold, or
may hold a debt, Claim, or Equity Interest discharged pursuant to the terms of
the Plan (including but not limited to States and other governmental units, and
any State official, employee, or other entity acting in an individual or
official capacity on behalf of any State or other governmental units) shall be
deemed permanently enjoined from taking any of the following actions on account
of any such discharged debt, Claim, or Equity Interest: (1) commencing or
containing in any manner any action or other proceeding against the Debtors, the
Reorganized Debtors, their successors, or their property; (2) enforcing,
attaching, executing, collecting, or recovering in any manner any judgment,
award, decree, or order against the Debtors, the Reorganized Debtors, their
successors, or their property; (3) creating, perfecting, or enforcing any Lien
or encumbrance against the Debtors, the Reorganized Debtors, their successors,
or their property; (4) asserting any set off, right of subrogation, or
recoupment of any kind against any obligation due the Debtors, the Reorganized
Debtors, their successors, or their property; and (5) commencing or continuing
any action, in any manner, in any place that does not comply with or is
inconsistent with the provisions of this Plan. Any person or entity injured by
any willful violation of such
58
injunction shall recover actual damages, including costs and attorneys' fees,
and , in appropriate circumstances, may recover punitive damages from the
willful violator.
XII. LIMITATION OF LIABILITY AND RELEASES
12.1 No Liability for Solicitation or Participation. As specified in
section 1125(e) of the Bankruptcy Code, entities that solicit acceptances or
rejections of the Plan and/or that participate in the offer, issuance, sale, or
purchase of the New DDi Corp. Securities and the New Preferred Stock offered or
sold under the Plan, in good faith and in compliance with the applicable
provisions of the Bankruptcy Code, shall not be liable, on account of such
solicitation or participation, for violation of any applicable law, rule, or
regulation governing the solicitation of acceptances or rejections of the Plan
or the offer, issuance, sale, or purchase of securities.
12.2 Good Faith Finding. Confirmation of the Plan shall constitute a
finding that (a) the Plan has been proposed in good faith and in compliance with
all applicable provisions of the Bankruptcy Code and (b) the solicitation of
acceptances of rejections of the Plan by all Persons (except as set forth below)
and the offer, issuance, sale, or purchase of a security offered or sold under
the Plan has been in good faith and in compliance with all applicable provisions
of the Bankruptcy Code.
12.3 Exculpation/Limitation of Liability. Except as otherwise specifically
provided in this Plan, the Debtors, their non-debtor Affiliates, and each of
their respective members, officers, directors, employees, advisors, accountants,
attorneys, and other agents acting in such capacity, shall neither have nor
incur any liability to any Holder of any Claim or Equity Interest or any other
Person for any act or omission thereof taken in connection with, related to, or
arising out of, the negotiations, formulation, preparation, dissemination,
implementation, administration, consummation and pursuit of Confirmation of the
Plan, the Disclosure Statement, the Chapter 11 Cases, or any contract,
instrument, release or other agreement or document created or entered into in
connection with the Plan, including the RSA, PSA, and SDNPSA or the offer,
issuance, sale or purchase of New DDi Corp. Securities and the New Preferred
Stock
59
under the Plan, or any other act taken or omitted to be taken in connection with
or in contemplation of the restructuring of the Pre-Restructuring Bank
Indebtedness, the Convertible Subordinated Notes, or the Senior Discount Notes;
provided however, that the provisions of this section of the Plan shall (i) have
no effect on the liability of any of the Debtors, their non-debtor Affiliates,
and each of their respective members, officers, directors, employees, advisors,
accountants, attorneys, and other agents acting in such capacity, that results
from any such act or omission that is determined in a Final Order to have been
the direct result of fraud, gross negligence, breach of fiduciary duty, or
willful misconduct; or (ii) limit the liability of the advisors, accounts,
attorneys and other agents acting in such capacity to their respective clients
pursuant to DR 6-102 of the Code of Professional Responsibility. The Debtors,
their non-debtor Affiliates, and each of their respective members, officers,
directors, employees, advisors, accountants, attorneys, and other agents acting
in such capacity, shall be entitled to rely, in every respect, upon the advice
of counsel with respect to their duties and responsibilities under or with
respect to the Plan.
12.4 Debtors' Releases and Injunction.
12.4.1 Release. On the Confirmation Date (but subject to the
occurrence of the Effective Date), each of the Debtors, their respective
non-debtor affiliates and subsidiaries and each of the officers, directors and
advisors of the Debtors and their non-debtor affiliates and subsidiaries, shall
conclusively, absolutely, unconditionally, irrevocably and forever release,
waive and discharge the Released Parties from any and all of the Released Claims
and any and all Claims and Causes of Action arising from or related in any way
to the Released Claims.
12.4.2 Injunction. On the Confirmation Date (but subject to the
occurrence of the Effective Date), each of the Debtors, their respective
non-debtor affiliates and subsidiaries and each of the officers, directors and
advisors of the Debtors and their non-debtor affiliates and subsidiaries, shall
conclusively, absolutely, unconditionally, irrevocably and forever be
permanently enjoined from:
60
(i) commencing, conducting or continuing in any manner, directly
or indirectly, any suit, action or other proceeding of any kind in respect of a
Released Claim against any and all Released Parties or their respective direct
or indirect successors or transferees in interest, or any assets or property of
such transferees or successors;
(ii) enforcing, levying, attaching, collecting or otherwise
recovering by any manner or means whether directly or indirectly any judgment,
award, decree or order in respect of a Released Claim against any and all
Released Parties or their respective assets or property, or their respective
direct or indirect successors or transferees in interest, or any assets or
property of such transferees or successors;
(iii) creating, perfecting or otherwise enforcing in any manner,
directly or indirectly, any Lien in respect of a Released Claim against any and
all Released Parties or their respective assets or property, or their respective
direct or indirect successors or transferees in interest, or any assets or
property of such transferees or successors;
(iv) asserting any set-off, right of subrogation or recoupment of
any kind in respect of a Released Claim, directly or indirectly against any
obligation due to any and all Released Parties or their respective assets or
property, or their respective direct or indirect successors or transferees in
interest, or any assets or property of such transferees or successors; and
(v) prosecuting or attempting to prosecute any and all Claims and
Causes of Action arising from or related in any way to the Released Claims which
they have or may have against any and all of the Released Parties.
12.5 Releases and Injunction.
12.5.1 Release. On the Confirmation Date (but subject to the
occurrence of the Effective Date), each Person and Entity, other than the
Debtors, their respective non-debtor affiliates and subsidiaries and each of the
officers, directors and advisors of the Debtors and their respective non-debtor
affiliates and subsidiaries acting in such capacity, that votes to accept the
Plan and/or does not file an objection to the entry of the Confirmation Order
and/or receives
61
consideration under the Plan, shall conclusively, absolutely, unconditionally,
irrevocably and forever release, waive and discharge the Released Parties from
any and all of the Released Claims and any and all Claims and Causes of Action
arising from or related in any way to the Released Claims.
12.5.2 Injunction. On the Confirmation Date (but subject to the
occurrence of the Effective Date), each Person and Entity, other than the
Debtors, their respective non-debtor affiliates and subsidiaries and each of the
officers, directors and advisors of the Debtors and their respective non-debtor
affiliates and subsidiaries, that votes to accept the Plan and/or does not file
an objection to the entry of the Confirmation Order and/or receives
consideration under the Plan, shall conclusively, absolutely, unconditionally,
irrevocably and forever be permanently enjoined from:
(i) commencing, conducting or continuing in any manner, directly
or indirectly, any suit, action or other proceeding of any kind in respect of a
Released Claim against any and all Released Parties or their respective direct
or indirect successors or transferees in interest, or any assets or property of
such transferees or successors;
(ii) enforcing, levying, attaching, collecting or otherwise
recovering by any manner or means whether directly or indirectly any judgment,
award, decree or order in respect of a Released Claim against any and all
Released Parties or their respective assets or property, or their respective
direct or indirect successors or transferees in interest, or any assets or
property of such transferees or successors;
(iii) creating, perfecting or otherwise enforcing in any manner,
directly or indirectly, any Lien in respect of a Released Claim against any and
all Released Parties or their respective assets or property, or their respective
direct or indirect successors or transferees in interest, or any assets or
property of such transferees or successors;
(iv) asserting any set-off, right of subrogation or recoupment of
any kind in respect of a Released Claim, directly or indirectly against any
obligation due to any and all Released Parties or their respective assets or
property, or their respective direct or indirect
62
successors or transferees in interest, or any assets or property of such
transferees or successors; and
(v) prosecuting or attempting to prosecute any and all Claims and
Causes of Action arising from or related in any way to the Released Claims which
they have or may have against any and all of the Released Parties.
XIII. CONDITIONS TO CONFIRMATION AND EFFECTIVENESS
13.1 Conditions Precedent to Plan Confirmation. The conditions precedent to
Confirmation of the Plan shall include, without limitation, the following:
13.1.1 The Confirmation Order shall be in form and substance
satisfactory to the Debtors, the Co-Sponsors, the Ad Hoc Senior Discount Note
Holder Committee and the Required Lenders.
13.1.2 The aggregate amount filed or asserted in documents filed with
the Bankruptcy Court as of the first business day prior to the Confirmation
Hearing of (a) the Allowed and Disputed Administrative Claims (exclusive of
post-Petition Date trade payables incurred in the ordinary course of business
and the Claims of the Professionals described in section 13.1.3 below); (b)
Allowed and Disputed Priority Claims; and (c) Allowed and Disputed Tax Claims
does not exceed $500,000.
13.1.3 The aggregate amount filed or asserted in documents filed with
the Bankruptcy Court as of the first business day prior to the Confirmation
Hearing of the Allowed and Disputed Administrative Claims relating to the amount
of the Professionals' Advisor Fees (as defined in the Budget and Funding
Agreement) does not exceed $2,500,000.
13.1.4 The aggregate amount of Allowed and Disputed Class 4 Claims as
of the Claims Bar Date does not exceed $500,000.
13.2 Conditions Precedent to Plan Effectiveness. The following shall be
conditions precedent to the effectiveness of the Plan and the occurrence of the
Effective Date.
63
13.2.1 The Confirmation Order in form and substance satisfactory to
the Debtors, the Co-Sponsors, the Ad Hoc Senior Discount Note Holder Committee
and the Required Lenders shall have been entered and have become a Final Order.
13.2.2 All agreements and instruments contemplated by, or to be
entered into pursuant to, the Plan, including, without limitation, each of the
Plan Documents necessary for consummation of the Plan and the Restructuring Loan
Documents necessary for consummation of the restructuring of the
Pre-Restructuring Bank Indebtedness, shall have been duly and validly executed
by the parties thereto and all conditions of their effectiveness shall have been
satisfied or waived. Upon satisfaction of all conditions precedent to
effectiveness of the Plan, unless waived, and the Effective Date, all parties
shall be deemed to have delivered all of the documents and instruments described
herein simultaneously, and effectiveness of the Plan and the Plan Effective Date
shall be deemed to have occurred simultaneously with such delivery.
13.3 Waiver of Conditions. The conditions set forth in sections 13.1 and
13.2 may be waived with the prior written consent of the Required Lenders, the
Ad Hoc Committees and the Debtors, at any time, without notice, leave or order
of the Bankruptcy Court, and without any formal action other than proceeding to
obtain the Confirmation Order and consummate the Plan.
XIV. RETENTION OF JURISDICTION
14.1 Retention of Jurisdiction. Notwithstanding the entry of the
Confirmation Order or the occurrence of the Effective Date, the Bankruptcy Court
shall retain jurisdiction over the Cases and any of the proceedings arising
from, or relating to, the Cases pursuant to section 1142 of the Bankruptcy Code
and 28 U.S.C. (S) 1334 to the fullest extent permitted by the Bankruptcy Code
and other applicable law, including, without limitation, such jurisdiction as is
necessary to ensure that the purpose and intent of the Plan are carried out;
provided, however, that the Bankruptcy Court shall not have nor retain
jurisdiction over any of the Restructuring Loan Documents (other than
non-exclusive jurisdiction with respect to the Restructuring Loan Documents
being filed as Plan Documents). Without limiting the generality of the foregoing
the Bankruptcy Court shall retain jurisdiction for the following purposes:
64
(a) to hear and determine any and all objections to the
allowance, or requests for estimation, of Claims or the establishment of
reserves pending the resolution of Disputed Claims;
(b) to consider an act on the compromise and settlement of
any Claim against, or cause of action on behalf of, any Debtor or any Estate;
(c) to enter such orders as may be necessary or appropriate
in connection with the recovery of the Debtors' assets wherever located;
(d) to hear and determine any and all applications for
allowance of compensation and reimbursement of expenses;
(e) to hear and determine any and all controversies, suits
and disputes arising under or in connection with the interpretation,
implementation or enforcement of the Plan and any of the documents intended to
implement the provisions of the Plan or any other matters to be resolved by the
Bankruptcy Court under the terms of the Plan.
(f) to hear and determine any motions or contested matters
involving Taxes, tax refunds, tax attributes and tax benefits and similar and
related matters with respect to any Debtor arising prior to the Effective Date
or relating to the administration of the Cases, including, without limitation,
matters involving federal, state and local Taxes in accordance with sections
346, 505 and 1146 of the Bankruptcy Code;
(g) to hear and determine any and all applications,
adversary proceedings and contested matters pending on the Effective Date or
that may be commenced thereafter as provided in the Plan;
(h) to effectuate distributions under and performance of the
provisions of the Plan.
(i) to hear and determine any applications to modify any
provision of the Plan to the full extent permitted by the Bankruptcy Code;
(j) to correct any defect, cure any omission or reconcile
any inconsistency in the Plan, the exhibits to the Plan and annexes thereto,
including any of the Plan
65
Documents, or any order of the Bankruptcy Court, including the Confirmation
Order, as may be necessary to carry out the purposes and intent of the Plan;
(k) to determine such other matters as may be provided for
in the Confirmation Order or as may from time to time be authorized under the
provisions of the Bankruptcy Code or any other applicable law;
(l) to enforce all order, judgments, injunctions and
exculpations issued or entered in connection with the Cases or the Plan;
(m) to enter such orders as may be necessary or appropriate
in aid of confirmation and to facilitate implementation of the Plan, including,
without limitation, any orders as may be appropriate in the event that the
Confirmation Order is for any reason stayed, revoked, modified or vacated;
(n) to determine any other matter not inconsistent with the
Bankruptcy Code;
(o) to issue a final decree closing the Cases.
XV. MODIFICATION OR WITHDRAWAL OF PLAN
15.1 Modification of Plan. At any time prior to confirmation of the Plan,
with the prior written consent of the Co-Sponsors and the Required Lenders, the
Reorganized Debtors may supplement, amend or modify the Plan. After confirmation
of the Plan, with the prior written consent of the Co-Sponsors and the Required
Lenders, the Debtors or Reorganized Debtors may (x) apply to the Bankruptcy
Court, pursuant to section 1127 of the Bankruptcy Code, to modify the Plan; and
(y) apply to the Bankruptcy Court to remedy defects or omissions in the Plan or
to reconcile inconsistencies in the Plan.
15.2 Termination Events. If confirmation is denied by a Final Order, or if
the Effective Date does not occur by January 8, 2004 (or such later date as may
be agreed to in writing by the Debtors and the Co-Sponsors and the Required
Lenders), then the Plan shall be deemed null and void. In such event, nothing
contained herein shall be deemed to constitute a waiver or release of any claims
by or against the Debtors or any other Person or to prejudice in
66
any manner the rights of the Debtors or any Person in any further proceedings
involving the Debtors.
15.3 Nonconsensual Confirmation. In the event that any impaired Class of
Claims or Equity Interests shall fail to accept the Plan in accordance with
section 1129(a)(8) of the Bankruptcy Code, the Debtors (i) may request that the
Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code, and (ii) in accordance with Section 15.1, and with the consent
of the Co-Sponsors and the Required Lenders, may modify the Plan in accordance
with section 1127(a) of the Bankruptcy Code.
XVI. MISCELLANEOUS
16.1 Payment of Statutory Fees. All quarterly fees due and payable to the
Office of the United States Trustee pursuant to section 1930(a)(6) of Title 28
of the United States Code shall be paid in full on or before the Effective Date,
or, to the extent such quarterly fees are disputed, an adequate reserve shall
have been established and set aside for payment in full thereof, as required by
section 1129(a)(12) of the Bankruptcy Code. Each Reorganized Debtor shall remain
responsible for timely payment of its respective quarterly fees due and payable
after the Effective Date and until such Reorganized Debtor's Case is closed, to
the extent required by section 1930(a)(6) of Title 28 of the United States Code.
16.2 Payment Dates. Whenever any payment or distribution to be made under
the Plan shall be due on a day other than a business day, such payment or
distribution shall instead be made, without interest, on the immediately
following Business Day.
16.3 Headings. The headings used in the Plan are inserted for convenience
only and neither constitutes a portion of the Plan nor in any manner affect the
construction of the provisions of the Plan.
67
16.4 Other Documents and Actions. The Reorganized Debtors may execute such
other documents and take such other actions as may be necessary or appropriate
to effectuate the transactions contemplated under this Plan.
16.5 Notices. All notices and requests in connection with the Plan shall be
in writing and shall be hand delivered or sent by mail addressed to:
To the Debtors:
DDi Corp.
1220 North Simon Circle
Anaheim, CA 92806
Attention: Timothy Donnelly
With copies to:
Kirkland & Ellis LLP
777 South Figueroa Street
Los Angeles, CA 90017
Attention: Sharon M. Kopman
To the Secured Lenders:
JPMorgan Chase Bank
270 Park Avenue, 20th Floor
New York, NY 10017
Attention: Michael Lancia
With copies to:
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attention: Kathrine A. McLendon
To the Ad Hoc Convertible Note Holder Committee:
Tablerock Fund Management
505 Park Avenue, 5th Floor
New York, NY 10022
Attention: Jeffrey D. Lapin
68
With copies to:
Stutman Treister & Glatt Professional Corporation
1901 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Attention: George C. Webster II
To the Ad Hoc Senior Discount Note Holder Committee:
JP Morgan Partners
1221 Avenue of the Americas, 34th Floor
New York, NY 10020
Attention: Kevin O'Brien
With copies to:
Hahn & Hessen LLP
488 Madison Avenue
New York, NY 10022
Attention: Jeffrey L. Schwartz
To the 5.25% Trustee:
US Bank
555 SW Oak Street
Portland, Oregon 97204
Attention: Lawrence Bell
With copies to:
Maslon Edelman Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
To the 6.25% Trustee:
US Bank
555 SW Oak Street
Portland, Oregon 97204
Attention: Lawrence Bell
With copies to:
Maslon Edelman Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
69
To the Senior Discount Trustee:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Attention: Sandra R. Ortiz
With copies to:
Curtis, Mallet-Prevost, Colt & Mosle, LLP
101 Park Avenue
New York, New York 10178
Attention: Steven J. Reisman
All notices and requests to any Person holding of record any Claim of Equity
Interest shall be sent to them at their last known address or to the last known
address of their attorney of record. Any such Person may designate in writing
any other address for purposes of this Section 16.5 which designation will be
effective on receipt.
16.6 Governing Law. Unless a rule of law or procedure is supplied by
federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of
the State of New York (without reference to its conflict of law rules) shall
govern the construction and implementation of the Plan and any agreements,
documents, and instruments executed in connection with the Plan, unless
otherwise specifically provided in such agreements, documents, or instruments.
16.7 Binding Effect. The Plan and all rights, duties and obligations
thereunder shall be binding upon and inure to the benefit of the Debtors, the
Reorganized Debtors, Holders of Claims, Holders of Equity Interests, and their
respective successors and assign.
16.8 Successors and Assigns. The rights, benefits, and obligations of any
entity named or referred to in the Plan shall be binding on, and shall inure to
the benefit of, the heirs, executors, administrators, successors, and assigns of
such entity.
70
16.9 No Waiver. The failure of the Debtors or any other Person to object to
any Claim for purposes of voting shall not be deemed a waiver of the Debtors' or
Reorganized Debtors' right to object to or examine such Claim, in whole or in
part.
16.10 Exemption from Securities Laws. All of the New Preferred Stock and
New DDi Corp. Securities distributed pursuant to this Plan are and shall be
entitled to the benefits and exemptions provided by section 1145 of the
Bankruptcy Code.
16.11 Inconsistencies. In the event the terms or provisions of the Plan and
the Confirmation Order are inconsistent with the terms and provisions of the
Exhibits to the Plan or documents executed in connection with the Plan (other
than the Restructuring Loan Documents), the terms of the Plan and the
Confirmation Order shall control. In the event the terms and provisions of the
Plan and the Confirmation Order are inconsistent with the terms and provisions
of the Restructuring Loan Documents, the terms of the Restructuring Loan
Documents shall control.
16.12 Exemption from Certain Transfer Taxes and Recording Fees. Pursuant to
section 1146(c) of the Bankruptcy Code, any transfers from a Debtor to a
Reorganized Debtor or to any other Person or entity pursuant to the Plan, or any
agreement regarding the transfer of title to or ownership of any of the Debtors'
real or personal property or of any other interest in such property (including,
without limitation, a security interest) will 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, Uniform
Commercial Code filing or recording fee, or other similar tax or governmental
assessment, and the Confirmation Order will 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.
71
16.13 Post-Confirmation Conversion/Dismissal. A creditor or party in
interest may bring a motion to convert or dismiss the case under (S) 1112(b),
after the Plan is confirmed, if there is a default in performing the Plan. The
Debtors and Reorganized Debtors reserve the right to object to any motion for
conversion or dismissal. If the Court orders any of the Cases converted to
Chapter 7 after the Plan is confirmed, then all property that had been property
of the Chapter 11 Estate, and that has not been disbursed pursuant to the Plan,
will revest in the Chapter 7 estate. The automatic stay will be reimposed upon
the revested property, but only to the extent that relief from stay was not
previously authorized by the Court during this case.
16.14 Final Decree. Once an Estate has been fully administered, as referred
to in Bankruptcy Rule 3022, the applicable Reorganized Debtor, or other party as
the Court shall designate in the Confirmation Order, shall file a motion with
the Court to obtain a final decree to close the Case of such Debtor.
72
Date: October 31, 2003 DDi Corp., a Delaware corporation
By: /s/ Timothy J. Donnelly
---------------------------------------
Name: Timothy J. Donnelly
Title: Vice President
Date: October 31, 2003 DDi Capital Corp., a California corporation
By: /s/ Timothy J. Donnelly
---------------------------------------
Name: Timothy J. Donnelly
Title: Vice President
Submitted by:
Kirkland & Ellis LLP
By: /s/ Richard L. Wynne
-----------------------------------------------
Richard L. Wynne (RW-5630)
Sharon M. Kopman (SK-3295)
Christian C. Lymn (CL-3159)
Attorneys for Debtors and Debtors-In-Possession