<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported) January 14, 1999
IMARK TECHNOLOGIES, INC.
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(Exact name of Registrant as Specified in Charter)
Delaware 0-21147 87-0378128
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
620 Herndon Parkway, Suite 200 Herndon, Virginia 20170
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (703) 925-3400
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Item 3:
Attached are the Amended Plan of Reorganization dated January 14, 1999 and the
Disclosure Statement for the Chapter 11 bankruptcy filing of Imark Technologies,
Inc. This Plan has not been confirmed. The hearing date for confirmation has
been set for February 23, 1999. Also attached is the court order fixing time for
filing time for filing proofs of claim.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMARK TECHNOLOGIES, INC.
Dated: January 27, 1999 /s/ Robert A. Wiedemer
-------------------------------------
Robert A. Wiedemer
President
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EXHIBIT INDEX
99.1 Amended Plan of Reorganization.
99.2 Disclosure Statement.
99.3 Order Conditionally Approving Disclosure Statement.
99.4 Order Fixing Time for Filing Proofs of Claim.
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EXHIBIT A
UNITED STATES BANKRUPTCY COURT
THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
In re:
IMARK TECHNOLOGIES, INC., Case No. 98-17963-SSM
(Chapter 11)
Debtor.
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DEBTOR'S AMENDED PLAN OF REORGANIZATION
Stephen E. Leach, Esquire (VA Bar # 20601)
Jonathan W. Lipshie, Esquire (VA Bar No. #31826)
TUCKER, FLYER & LEWIS,
a professional corporation
Attorneys for the Debtors in Possession
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
(202) 429-7112
Attorneys for Imark Technologies, Inc.
Dated: January 14, 1999
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TABLE OF CONTENTS
PAGE
ARTICLE I..................................................................1
INTRODUCTION.........................................................1
ARTICLE II.................................................................1
RULES OF CONSTRUCTION AND DEFINITIONS................................1
2.1 Rules of Construction.....................................1
2.2 Definitions...............................................1
ARTICLE III................................................................4
GENERAL TERMS AND CONDITIONS.........................................4
3.1 Time for Filing Claims....................................4
3.2 Modification to Plan......................................4
3.3 Confirmation Under Bankruptcy Code Section 1129(b)........5
ARTICLE IV.................................................................5
ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS........................5
4.1 Administrative Claims.....................................5
4.2 Priority Tax Claims.......................................5
ARTICLE V..................................................................5
CLASSIFICATION OF CLAIMS AND INTERESTS...............................5
Class 1...................................................6
Class 2...................................................6
Class 3...................................................6
Class 4...................................................6
Class 5...................................................6
Class 6...................................................6
ARTICLE VI.................................................................6
TREATMENT CLASSIFIED CLAIMS AND INTERESTS............................6
6.1 Class 1...................................................6
6.2 Class 2...................................................7
6.3 Class 3...................................................7
6.4 Class 4...................................................7
6.5 Class 5...................................................7
6.6 Class 6...................................................7
ARTICLE VII................................................................8
EXECUTION OF THE PLAN................................................8
7.8 Distributions of Cash.....................................9
7.9 Delivery of Distributions and Undeliverable
Distributions.............................................9
7.10 Setoffs...................................................9
7.11 Claims Against Employees..................................9
7.12 Transactions on Business Days.............................9
7.13 Minimum Distributions....................................10
ARTICLE VIII..............................................................10
RETENTION, ENFORCEMENT AND ADJUSTMENT OF CLAIMS.....................10
8.1 Retention of Rights......................................10
8.2 Administrative Claims....................................10
ARTICLE IX................................................................10
PROCEDURES FOR RESOLVING AND TREATING DISPUTED CLAIMS...............10
9.1 No Distribution Pending Allowance........................10
9.2 Resolution of Disputed Claims............................10
9.3 Estimation...............................................11
ARTICLE X.................................................................11
RETENTION OF JURISDICTION...........................................11
ARTICLE XI................................................................12
EXECUTORY CONTRACTS.................................................12
ARTICLE XII...............................................................12
DISCHARGE AND RELEASE...............................................12
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ARTICLE I
INTRODUCTION
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The Debtor, Imark Technologies, Inc. ("Imark" or "Debtor"), submits to
this Court and the creditors and interest-holders of the Debtor's estate the
following Plan of Reorganization (hereinafter the "Plan") pursuant to section
1121(a) of the Bankruptcy Code (as hereinafter defined).
The Bankruptcy Court has scheduled a confirmation hearing on this Plan
for February 23, 1999 at 2:00 p.m.
ARTICLE II
RULES OF CONSTRUCTION AND DEFINITIONS
-------------------------------------
2.1 Rules of Construction
2.1.1 In the Plan, unless otherwise provided, the capitalized terms
shall have the meaning set forth in Section 2.02 of this Article.
2.1.2 Any capitalized term used in the Plan that is not defined in
Section 2.2 of this Article shall have the meaning ascribed to such term in the
Bankruptcy Code.
2.1.3 The rules of construction used in Bankruptcy Code section 102
will apply to the construction of this Plan.
2.1.4 For purposes of this Plan, the meanings below and in the
Bankruptcy Code shall apply equally to the singular, plural and possessive
forms, and masculine, feminine and neuter genders of the defined terms.
2.1.5 All of the foregoing definitions are intended to be, and hereby
are, part of the substantive provisions of this Plan and have the same force and
effect as any other provision of this Plan.
2.2 Definitions
For purposes of this Plan, the following terms shall have the meanings
set forth below unless the context clearly requires otherwise:
2.2.1 Administrative Claimants: Any persons having Administrative
Claims.
2.2.2 Allowed Administrative Claims: The Allowed Amount of all
administrative expenses, as defined under Bankruptcy Code section 507(a)(1), of
the Debtor's Chapter 11 case, allowed pursuant to Bankruptcy Code section
503(b).
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2.2.3 Allowed Amount (Allowed Claim): The amount of any Claim against
the Debtor recognized by the Debtor as valid or allowed by Final Order of the
Bankruptcy Court.
2.2.4 Allowed Priority Claims: The Allowed Amount of all claims
entitled to priority pursuant to Bankruptcy Code section 507(a).
2.2.5 Allowed Unsecured Claims: The Allowed Amount of the claims of all
Unsecured Creditors.
2.2.6 Bankruptcy Code (or Code): The Bankruptcy Reform Act of 1978, as
thereafter amended and as codified in 11 U.S.C. section 101, et seq.
2.2.7 Bankruptcy Court: The United States Bankruptcy Court for the
Eastern District of Virginia (Alexandria Division) in which the Debtor's Chapter
11 Case is pending or any court having competent jurisdiction over the Debtor's
Chapter 11 Case.
2.2.8 Bar Date: The deadline for filing proofs of claim pursuant to
Bankruptcy Code section 341, Federal Rule of Bankruptcy Procedure 3003(c)(3) and
Local Bankruptcy Rule 3003-1 is February 16, 1999, pursuant to the Order of the
Bankruptcy Court entered on January 13, 1999.
2.2.9 Business Day: Any day other than a Saturday, a Sunday, any other
day on which banking institutions in Alexandria, Virginia are required or
authorized to close by law or executive order.
2.2.10 Cash: Cash and cash equivalents.
2.2.11 Chapter 11 Case: The case under chapter 11 of the Bankruptcy
Code in which Imark Technologies, Inc. is the Debtor, Case No. 98-17963-SMM.
2.2.12 Claim means any right to payment from Debtor, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, known or unknown; or any right to an equitable remedy for breach of
performance if such breach gives rise to a right of payment from the Debtor,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured,
known or unknown.
2.2.13 Class: A category of holders of claims or interests which are
substantially similar to the other claims or interests in such class.
2.2.14 Confirmation: The entry by the Bankruptcy Court of an order
confirming this Plan.
2.2.15 Confirmation Date: The date of Confirmation by the Bankruptcy
Court.
2.2.16 Counsel for the Debtor: Tucker, Flyer & Lewis, P.C., 1615 L
Street, N.W., Suite 400, Washington, D.C. 20036, Attn: Stephen E. Leach,
Esquire.
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2.2.17 Debtor: The Debtor in the above-captioned Chapter 11 case, Imark
Technologies, Inc. ("Imark" or "Debtor").
2.2.18 Disclosure Statement: The disclosure statement filed by the
Debtor in connection with this Plan.
2.2.19 Disputed: means, with respect to a Claim, (a) any such Claim
proof of which was timely and properly filed and (i) which has been or hereafter
is listed on the Schedules as unliquidated, disputed, or contingent, and which
has not been resolved by written agreement of the parties or an order of the
Bankruptcy Court, or (ii) as to which Debtor or any other party in interest has
interposed a timely objection or request for estimation in accordance with the
Bankruptcy Code and the Bankruptcy Rules, which objection or request for
estimation has not been withdrawn or determined by a Final Order, and to any
Claim as to which a proof of Claim was required to be filed by order of the
Bankruptcy Court but as to which a proof of Claim was filed untimely or
improperly. Prior to the time that an objection has been filed and the
expiration of the time within which to object to such Claim set forth herein or
otherwise established by order of the Bankruptcy Court, for purposes of this
Plan, (A) a Claim shall be considered a Disputed Claim if the amount of the
Claim specified in the proof of Claim exceeds the amount of the Claim scheduled
by Debtor as other than disputed, contingent or unliquidated, or (B) in the
event that a Claim is not listed on the Schedules, then the entire amount of
such Claim shall be considered a Disputed Claim.
2.2.20 Effective Date of the Plan: The date of Final Confirmation.
2.2.21 Executory Contracts: All unexpired leases and executory
contracts as described in Bankruptcy Code section 365.
2.2.22 Final Confirmation: The date the order confirming this Plan
becomes a Final Order which is no longer subject to appeal to or review by
certiorari by any court.
2.2.23 Final Order: An order of the Bankruptcy Court which has not been
reversed, stayed, modified, or amended and the time from which to appeal or seek
review or rehearing of such Order shall have expired and which shall have become
final in accordance with the Federal Rules of Bankruptcy Procedure.
2.2.24 Financing Agreement: The agreement between the Debtor and
International Advance, Inc. executed on November 28, 1998 and approved by the
Financing Order.
2.2.25 Financing Order: The Order Approving Agreement for
Debtor-In-Possession Financing and Funding for Plan of Reorganization Pursuant
to 11 U.S.C. ss.ss. 363(c), 364(c)(1), 364(c)(2), 364(c)(3), and 364(d)(1) and
Federal Rule of Bankruptcy Procedure 4001 Authorizing the Debtor to Use Cash
Collateral and to Obtain Debtor-In-Possession Post-Petition Financing and Incur
Post-Petition Indebtedness with Superpriority Over Certain Administrative Claims
Nunc Pro Tunc to the Petition Date and Granting Other Relief entered by the
Bankruptcy Court on December 4, 1998.
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2.2.26 Person: Any natural person, corporation, limited or general
partnership.
2.2.27 Petition Date: October 29, 1998, the date on which the Debtor
filed its voluntary petition thereby initiating this Chapter 11 Case.
2.2.28 Plan: This Plan of Reorganization as may be amended or modified
as set forth herein in its entirety, and all addenda, exhibits, schedules,
releases, and other attachments thereto as may be amended or supplemented from
time to time.
2.2.29 Professional Persons: A person retained or to be compensated
pursuant to Bankruptcy Code sections 327, 328, 330, 503(b) or 1103.
2.2.30 Property of the Debtor: All assets, of whatever kind, of the
Debtor and all legal and equitable interests of the Debtor in property.
2.2.31 Pro-Rata: The same proportion that a claim or interest in a
particular class bears to the aggregate amount of all claims or the aggregate
number of interests in such class.
2.2.32 Rules: The Federal Rules of Bankruptcy Procedure, as amended and
supplemented by the Local Bankruptcy Rules adopted by the Bankruptcy Court.
2.2.33 Schedules: The Schedules of Assets and Liabilities and Statement
of Financial Affairs filed by the Debtor in this case, as supplemented and
amended.
2.2.34 Secured Creditor: All Persons having allowed claims against the
Debtor for which there is Property of the Debtor serving as security.
2.2.35 Unsecured Creditors: All Persons having allowed claims against
the Debtor for which there is no Property of the Debtor serving as security.
ARTICLE III
GENERAL TERMS AND CONDITIONS
----------------------------
The following general terms and conditions apply to this Plan:
3.1 Time for Filing Claims: All claimants (except those creditors whose
claims were scheduled as neither disputed, unliquidated, nor contingent) will be
required to file Proofs of Claim by the Bar Date. Claims made pursuant to
Bankruptcy Code section 507(a), other than the super-priority Administrative
Claims or Administrative Claims of International Advance or those made pursuant
to Bankruptcy Code section 330 or in accordance with Bankruptcy Code section
1111(a), must have been filed on or before February 16, 1999.
3.2 Modification to Plan: This Plan may be modified, amended or
corrected upon application of the Debtor at any time prior to Confirmation
without notice and hearing and without additional disclosure pursuant Bankruptcy
Code section 1125; provided, however, that the Bankruptcy Court finds that such
modification or correction does not materially and adversely affect any creditor
or the claim of any creditor.
The Debtor may amend or modify the Plan after Confirmation as provided
under Bankruptcy Code section 1127.
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3.3 Confirmation Under Bankruptcy Code Section 1129(b):
If an impaired class of claims or interests that is receiving or
retaining property under the Plan on account of such claim or interest does not
vote to accept the Plan, the Debtor will seek Confirmation of the Plan pursuant
to the provisions of Bankruptcy Code section 1129(b) which set forth the
requirements for confirmation of a plan notwithstanding that an impaired
class(es) has(have) not voted to accept a plan.
ARTICLE IV
ADMINISTRATIVE CLAIMS AND PRIORITY TAX CLAIMS
---------------------------------------------
4.1 Administrative Claims: Except for Administrative Claims of
International Advance, Allowed Administrative Claims shall be paid in full on
the Effective Date up to a maximum aggregate amount of $50,000.00.
Administrative Claims of Professional Persons must be approved by the Bankruptcy
Court and will be paid on approval by the Bankruptcy Court.
The Allowed super-priority Administrative Expense Claims and Allowed
Administrative Expense Claims of International Advance shall not be paid on the
Effective Date. International Advance's Allowed super-priority Administrative
Expense Claims and Allowed Administrative Expense Claims shall not be discharged
by this Plan or otherwise, and shall survive Confirmation of the Plan.
International Advance shall retain all of its liens and security interests
securing repayment of its Allowed super-priority Administrative Expense Claims
and Allowed Administrative Expense Claims as provided in Class 1.
4.2 Priority Tax Claims: Pursuant to Bankruptcy Code section
1129(a)(9)(C), each holder of an Allowed Priority Tax Claim under Bankruptcy
Code section 507(a)(8) shall receive on account of the Allowed Amount of such
claim deferred cash payments over a period of six years after the date of
assessment of such claim with interest at a rate of six percent per annum.
ARTICLE V
CLASSIFICATION OF CLAIMS AND INTERESTS
--------------------------------------
5.1 A claim is in a particular class only to the extent that the claim
qualifies within the description of that class and only to the extent that it is
an Allowed Claim. The remaining portion of the claim will be in a different
class to the extent that it qualifies within the description of that class and
only to the extent that it is an Allowed Claim. All claims and interests shall
be bound by the provisions of this Plan.
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5.2 For purposes of repayment of the Debtor's indebtedness under this
Plan, the remaining claims and interests of the creditors and interest-holders
of the Debtor are divided into the following classes:
Class 1: The Allowed Secured Claim of International Advance, Inc.
Class 2: The Allowed Secured Claims of entities other than
International Advance.
Class 3: The Allowed Priority Wage Claims of employees of the Debtor.
Class 4: The Allowed Unsecured Claims.
Class 5: The Equity Interests of Common Stockholders of Imark.
Class 6: Interests of holders of Stock Options or Warrants.
5.3 Classes 1, 2, 4, 5 and 6 are impaired, as that term is defined in
Bankruptcy Code section 1124, under this Plan. Class 3 is not impaired under
this Plan.
ARTICLE VI
TREATMENT CLASSIFIED CLAIMS AND INTERESTS
-----------------------------------------
6.1 Class 1: The Allowed Secured Claim of International Advance, Inc.
This Class will retain its Allowed Secured Claim for all postpetition
advances to the Debtor and any and all amounts owed by the Debtor to
International Advance under the Financing Agreement, including without
limitation, amounts advanced to fund the Plan ("Postpetition Obligations"). This
class shall retain all of its liens and security interests securing repayment of
all Postpetition Obligations of the Debtor under the Financing Agreement and the
Financing Order, including without limitation, its liens on avoidance powers and
any amounts recovered thereunder and/or any avoided liens preserved for the
benefit of the estate. Such liens and security interests shall be continuing
perfected first priority liens and security interests on all of the Debtor's
assets and after acquired assets as provided in the Financing Agreement and
Financing Order.
For prepetition amounts owed to International Advance, International
Advance shall have an Allowed Claim in the total amount of $598,793.01.
International Advance's pre-petition Allowed Claim shall be an Allowed Secured
Claim to the extent of the value of its collateral and an Allowed Unsecured
Claim for any deficiency (collectively, "Allowed Prepetition Claim"). On the
Effective Date, International Advance shall receive (i) the net proceeds from
the sale of Imark's lease of its premises at 580 Herndon Parkway, Herndon,
Virginia 20170 ("Lease"), (ii) the Debtor's security deposit posted in
connection with the aforesaid Lease, and; (iii) ninety percent (90%) of the
common stock of Imark to be outstanding after Confirmation in full satisfaction
of its Allowed Prepetition Claim.
This class is impaired.
6.2 Class 2: Class 2 consists of the Allowed Secured Claims of any
entity other than International Advance. On the Effective Date, each holder of
an Allowed Secured Claim in this class shall receive on account of the Allowed
Amount of its Secured Claim either: (a) the return of the collateral securing
its claims; or (b) such other treatment as agreed to by the Debtor and the
holder of such Allowed Secured Claim. Any unsecured portion of any allowed claim
in this class shall be treated as provided in Class 4.
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This class is impaired.
6.3 Class 3: The Allowed Priority Claims of employees of the Debtor.
Employees of the Debtor holding Allowed Priority Claims for wages and
benefits shall be paid cash on the Effective Date of the Plan equal to the
allowed amount of such claims subject to the $4,300 maximum payment per employee
for wages, salaries, commissions, including vacation, severance, sick leave pay
(earned by an individual), earned within ninety (90) days before the Petition
Date pursuant to Bankruptcy Code ss. 507(a)(3). The balance of any claims in
this class are Unsecured Claims. Any portion of employee claims for wages and
benefits that exceeds the statutory priority amount under Bankruptcy Code ss.
507(a)(3) shall be treated as provided in Class 4.
This class is not impaired.
6.4 Class 4: The Allowed Unsecured Claims.
On the later of the Effective Date or determination of the allowance or
disallowance of all Disputed Claims by Final Order or by agreement of the
parties, each holder of an Allowed Unsecured Claim shall receive on account of
the Allowed Amount of its Unsecured Claim, a Pro Rata distribution of: (i) five
percent (5%) of the common stock of Imark to be outstanding after Confirmation,
and; (ii) a cash fund equal to the lesser of, $30,000.00 or five percent (5%) of
the aggregate amount of Allowed Unsecured Claims. Fractional shares of common
stock of Imark shall not be distributed to holders of Allowed Unsecured Claims.
International Advance shall receive the distribution provided under Class 1 in
full satisfaction of its Allowed Unsecured Claim.
This class is impaired.
6.5 Class 5: The Allowed Equity Interests of Common Stockholders of
Imark.
On the Effective Date, holders of common stock of Imark shall retain
their shares, which after all other distributions under the Plan shall represent
five percent (5%) of the outstanding common stock of Imark. The outstanding
shares will be subject to a one for ten reverse stock split effective
immediately prior to distribution of common stock to holders of Class 1 and
Class 4 claims.
This class is impaired.
6.6 Class 6: The Allowed Interests of Holders of Stock Options or
Warrants for Imark's stock.
Holders of stock options or warrants issued by Imark shall not receive
any distribution or retain any property, claims or interests on account of their
stock options and warrants and all such stock options and warrants shall be
canceled on the Effective Date of the Plan.
This class is impaired.
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ARTICLE VII
EXECUTION OF THE PLAN
---------------------
7.1 Funding for the Plan shall be provided by International Advance,
Inc. to the extent provided for and according to the terms set forth in the
Financing Agreement.
7.2 To effectuate and carry out the provisions of the Plan, pursuant to
Delaware General Corporation Law section 303 without any further action of the
directors or shareholders, on the Effective Date of the Plan, the officers of
Imark shall file an amendment to its certificate of incorporation as required,
and the certificate of incorporation shall be deemed to be amended under
Delaware General Corporation Law section 242 to provide for (i) a one for ten
reverse stock split of Imark's outstanding common stock and (ii) an increase in
the authorized common stock of Imark to 40,000,000 shares. In addition, all
outstanding warrants and stock options for Imark's stock shall be canceled. The
officers of Imark shall file such amendment with the Secretary of State,
Delaware in conformance with the requirements of Delaware General Corporation
Law section 303(c) and pay all fees for such filing as provided under Delaware
General Corporation Law section 303(e).
7.3 With respect to the one for ten reverse stock split, all stock
certificates representing shares of common stock of the Company which are
outstanding prior to the Effective Date need not be returned to the Debtor or
its transfer agent, but may remain outstanding and shall automatically be deemed
to represent one-tenth of the numbers of shares which they represented prior to
the Effective Date. Fractional shares created by the reverse stock split shall
be deemed canceled and of no value.
7.4 To effectuate and carry out the provisions of the Plan, pursuant to
Delaware General Corporation Law section 303 without any further action of the
directors or shareholders, after amendment of its certificate of incorporation
as provided in paragraph 7.2, the officers of Imark shall issue, or cause to be
issued, sufficient shares of its common stock to make the distributions of
common stock provided in the Plan to the holders of Class 1 and Class 4 claims.
Fractional shares shall not be issued for distributions to holders of Class 1 or
Class 4 claims.
7.5 Upon Confirmation of the Plan, all Property of the Debtor shall
vest in the Debtor free and clear of all claims and interests except as
otherwise provided in the Plan.
7.6 Upon Confirmation of the Plan by the Bankruptcy Court, the Debtor,
and its successors and assigns, shall be discharged from all Claims except as
otherwise provided for in the Plan.
7.7 Notwithstanding any other terms and conditions of the Plan,
Disputed Claims shall be paid only upon entry of a Final Order of allowance by
the Bankruptcy Court in accordance with the terms of this Plan.
7.8 Distributions of Cash. At the option of Debtor, any Cash payment to
be made by Debtor pursuant to this Plan may be made by check drawn on a domestic
bank or by wire transfer.
7.9 Delivery of Distributions and Undeliverable Distributions.
Distributions to holders of Allowed Claims shall be made at the address of each
such holder as set forth on the Schedules filed with the Bankruptcy Court unless
superseded by the address as set forth on the proofs of Claim filed by such
holders or other writing notifying Debtor of a change of address. If any
holder's distribution is returned as undeliverable, no further distributions to
such holder shall be made unless and until Debtor is notified of such holder's
then current address, at which time all missed distributions shall be made to
such holder, without interest. All Claims for undeliverable distributions shall
be made on or before, one hundred and twenty (120) days after the date such
undeliverable distribution was initially made. After such date all unclaimed
property shall be used to satisfy the costs of administering and fully
consummating this Plan and the holder of any such Claim shall not be entitled to
any other or further distribution under this Plan on account of such Claim.
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7.10 Setoffs. Debtor may, in accordance with section 553 of the
Bankruptcy Code and applicable nonbankruptcy law, set off against any Allowed
Claim and the distributions to be made pursuant to this 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 Debtor 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 Debtor or the Debtor in Possession of any such claims,
rights and causes of action that Debtor or the Debtor in Possession may possess
against such holder; and provided further, however, that any claims of Debtor
arising before the Date shall first be setoff against Claims against Debtor
arising before the Date.
7.11 Claims Against Employees. The Debtor has potential legal and
equitable claims against various former employees for the conversion of the
Debtor's property, including but not limited to source code, marketing
information, computer passwords, software documentation and equipment.
Notwithstanding any right to setoff under Section 553 of the Code or its right
to object to any claim, the Debtor reserves any rights or claims for monetary
damages and/or equitable relief which it may have against any former employees.
The Debtor is presently evaluating whether it will pursue these claims in the
Bankruptcy Court or other appropriate court.
7.12 Transactions on Business Days. If the Effective Date or any other
date on which a transaction may occur under this Plan shall occur on a day that
is not a Business Day, the transactions contemplated by this Plan to occur on
such day shall instead occur on the next succeeding Business Day.
7.13 Minimum Distributions. If a distribution to be made to a given
holder of an Allowed Claim on or after the Effective Date would be $5 or less in
the aggregate, notwithstanding any contrary provision of this Plan, no such
distribution will be made to such holder unless a request therefor is made in
writing to Debtor. Any unclaimed distributions pursuant to Section 7.9 shall be
used to satisfy the costs of administering and fully consummating this Plan. No
fractional shares of common stock of Imark shall be distributed.
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ARTICLE VIII
RETENTION, ENFORCEMENT AND ADJUSTMENT OF CLAIMS
-----------------------------------------------
8.1 Retention of Rights: All rights under Bankruptcy Code sections 502,
544, 545, 546, 547, 548, 549, 550, 553(b) and 724(a) are hereby preserved and
retained by the Debtor (either prior to or subsequent to the Confirmation Date
of this Plan) subject to the liens and security interests of International
Advance as provided herein and in the Financing Agreement and the Financing
Order and shall be enforced by the Debtor or shall be assigned to International
Advance pursuant to its security interest under the Financing Agreement for
prosecution by International Advance.
8.2 Administrative Claims: The Debtor reserves the right to object to
any applications to the Bankruptcy Court for the allowance of Administrative
Claims. Except for any Administrative Claims of International Advance, any
claims for administrative expenses which are not filed with the Bankruptcy Court
and served upon the Office of the United States Trustee and Counsel for the
Debtor within ninety (90) days of the Effective Date, subject to any extensions
by the Bankruptcy Court shall be forever barred. Under the Plan and the
Confirmation Order, International Advance shall have Allowed super-priority
Administrative Claims and Allowed Administrative Claims to the extent and for
the amounts provided in the Financing Agreement and Financing Order.
ARTICLE IX
PROCEDURES FOR RESOLVING AND TREATING DISPUTED CLAIMS
-----------------------------------------------------
9.1 No Distribution Pending Allowance. Notwithstanding any other
provision of this Plan, no Cash or other property shall be distributed under
this Plan on account of any Disputed Claim, unless and until such Claim becomes
an Allowed Claim. No Cash or other property shall be distributed under this Plan
on account of any Claim, whether or not allowed, in Class 4 until all Disputed
Claims in Class 4 are resolved pursuant to the procedure in Article 9.2.
9.2 Resolution of Disputed Claims. The Debtor reserves the right to
object to any claim. Unless otherwise ordered by the Bankruptcy Court after
notice and a hearing, Debtor shall make and file objections to Claims and shall
serve a copy of each objection upon the holder of the Claim to which the
objection is made within sixty (60) days after the Effective Date, subject to
extension by the Bankruptcy Court. From and after the Effective Date, all
objections shall be litigated to a Final Order except to the extent Debtor
elects to withdraw any such objection or Debtor and the claimant elect to
compromise, settle or otherwise resolve any such objection, in which event they
may settle, compromise or otherwise resolve any Disputed Claim without approval
of the Bankruptcy Court; provided, however, that any such compromise, settlement
or other resolution of a Disputed Claim where the amount of the proposed Allowed
Claim exceeds the scheduled amount of such Claim by at least $10,000 shall
require the approval of the Bankruptcy Court; provided further, that, at
Debtor's option, it may make a single, lump sum payment of the settlement amount
to the claimant.
9.3 Estimation. Debtor may, at any time, request that the Bankruptcy
Court estimate any Disputed Claim pursuant to Bankruptcy Code section 502(c)
regardless of whether Debtor has previously objected to such Claim, and the
Bankruptcy Court will retain jurisdiction to estimate any Claim at any time,
including during litigation concerning any objection to such Claim.
-10-
<PAGE>
ARTICLE X
RETENTION OF JURISDICTION
-------------------------
10.1 Until this Chapter 11 Case is closed, the Bankruptcy Court shall
retain jurisdiction of all matters arising under, or related to, these
proceedings, including, but not limited to, jurisdiction for the following
purposes:
(a) to ensure that the purposes and intent of this Plan are carried
out;
(b) to consider any modification of this Plan under Bankruptcy Code
section 1127;
(c) to hear and determine all claims, controversies, suits and disputes
against the Debtor;
(d) to hear, determine and enforce all claims or causes of action which
may exist on behalf of the Debtor or its estate;
(e) to hear and determine all controversies, suits and disputes that
may arise in connection with the interpretation or enforcement of this Plan;
(f) to hear and determine all objections to claims, controversies,
suits and disputes that may be pending at or initiated after the Effective Date
of the Plan;
(g) to enforce and interpret by injunction or otherwise the terms and
conditions of this Plan;
(h) to enter any Order, including injunctions, necessary to enforce the
title, rights and powers of the Debtor and to impose such limitations,
restrictions, terms and conditions of such title, rights and powers as the
Bankruptcy Court may deem necessary;
(i) to enter an Order concluding and terminating this Chapter 11 Case;
(j) to correct any defect, cure any omission or reconcile any
inconsistency in the Plan or order of Confirmation which may be necessary or
helpful to carry out the purposes and intent of the Plan;
(k) to consider and act on any such matters consistent with this Plan
as may be provided in the Confirmation Order; and
(l) to determine the allowance of any administrative claims.
ARTICLE XI
EXECUTORY CONTRACTS
-------------------
11.1 All pre-petition Executory Contracts unless specifically assumed
by the Debtor prior to Confirmation, will be rejected by the Debtor in
accordance with the provisions of Bankruptcy Code section 365 as of the
Confirmation Date of the Plan. In the event of the rejection of any Executory
Contract, the Bankruptcy Court shall (if the amount is disputed by the Debtor or
a creditor) fix the dollar amount of the damages, if any, suffered by any
creditor claiming rights under such Executory Contract. Such creditor's claim
shall be filed not later than ten (10) days following the first date scheduled
by the Bankruptcy Court for the hearing on Confirmation of the Plan, subject to
any extensions by the Bankruptcy Court, or shall be forever barred. To the
extent that such damages are finally determined by the Bankruptcy Court or are
not disputed by the Debtor or any creditor, such creditors shall become Class 4
creditors.
-11-
<PAGE>
ARTICLE XII
DISCHARGE AND RELEASE
---------------------
12.1 Upon Confirmation of this Plan, the Debtor, its successors and
assigns, shall be discharged of all claims and liabilities arising prior to the
Confirmation of the Plan. Pursuant to section 1141(d)(1) of the Bankruptcy Code,
Confirmation of the Plan shall constitute a discharge of any debt that arose
prior to Confirmation and any debt of any kind specified in Bankruptcy Code
sections 502(g), (h), or (i), whether or not a proof of claim based on such debt
is filed or deemed filed under section 501 of the Bankruptcy Code, or such claim
is allowed under section 502 of the Bankruptcy Code, or the holder of such claim
has accepted the Plan.
The Confirmation of the Plan, and the rights afforded to creditors and
the holders of interests in the Debtor, under the Plan, shall be in exchange for
and in complete satisfaction, discharge, and release of all Claims against the
Debtor and its successors and assigns, of any nature whatsoever regardless of
whether reduced to judgment, liquidated or unliquidated, contingent or
noncontingent, asserted or unasserted, fixed or not, matured or unmatured,
disputed or undisputed, legal or equitable, known or unknown, which arose or are
deemed to have arisen on or before the Confirmation Date, including, but not
limited to: (1) any interest accrued thereon from and after the Petition Date;
(2) any liability of a kind specified in Bankruptcy Code sections 502(g),
502(h), and 502(i) regardless of whether a Proof of Claim or Interest is filed
or deemed filed under Bankruptcy Code section 501, or such claim or interest is
allowed.
Except as otherwise provided herein, upon the Effective Date, all such
Claims and Interests against the Debtor and its successors and assigns, shall be
satisfied, discharged and released in full. Except as otherwise provided herein,
all creditors and interest-holders shall be precluded from asserting against the
Debtor, or its successors or assigns, any other or further Claim based upon any
act or omission, transaction or other activity of any kind or nature that
occurred prior to the Effective Date.
Unless otherwise provided, all injunctions or stays provided for in the
case pursuant to Bankruptcy Code section 362 or otherwise extant on the
Confirmation Date shall become permanent and remain in full force and effect
unless otherwise provided for by order of the Bankruptcy Court.
IMARK TECHNOLOGIES, INC.
Dated: January 14, 1999 By:/s/ John David Wiedemer
------------------------------------
John David Wiedemer,
Senior Vice President
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<PAGE>
EXHIBIT B
LIQUIDATION ANALYSIS
Assets:
Net Security Deposit for Lease of Real Property $43,957.98
$169,391.00 Initial Deposit
-$ 89,594.74 Prepetition setoff by landlord (disputed)
-$ 35,838.28 Postpetition Administrative Rent (60
days at $17,919.14 per month)
Various trade manuals, books and periodicals $ 1,200.00
Software technology, software code and related
marketing information $60,000.00
Computers, office supplies, miscellaneous office
equipment (reduced by S15,000.00 representing FMV of
computers subject to security agreements in favor of
Newcourt Capital/AT&T Capital) $15,000.00
Potential claims against former employees Unknown
Lease for non-residential real property Unknown
-----------
Total Assets available for payment of International
Advance's secured claim ................................ $120,157.98
Liabilities (other than secured claims) payable before Unsecured Creditors:
Chapter 7 Trustee Fees (estimated)
(on disbursements of $120,000) $ 9,250.00
Costs of Sale Unknown
Chapter 7 Administrative Expenses (estimated) $ 10,000.00
Chapter 11 Administrative Expenses (estimated) $ 50,000.00
Priority Tax Claims (estimated) $ 90,000.00
Priority Wage Claims (estimated) $ 70,000.00
-----------
Total Liabilities (other than secured claims)
Payable Prior to Distribution to Unsecured Creditors ... $229,250.00
<PAGE>
- ------------------------------
Stephen E. Leach, Esquire
(VA Bar No. 29601)
Jonathan W. Lipshie, Esquire
(VA Bar No. 31826)
Tucker, Flyer & Lewis, P.C.
1615 L Street N.W., Suite 400
Washington, DC 20036
(202) 429-7112
- ------------------------------
UNITED STATES BANKRUPTCY COURT
THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
In re:
Case No. 98-17963-SMM
IMARK TECHNOLOGIES, INC.,
(Chapter 11)
Debtor.
- --------------------------------------------------------------------------------
DEBTOR'S AMENDED DISCLOSURE STATEMENT
I. INTRODUCTION
On October 29, 1998, Imark Technologies, Inc. (the "Debtor"), filed a
voluntary petition under Chapter 11, Title 11, United States Code ("Bankruptcy
Code" or "Code") in the United States Bankruptcy Court for the Eastern District
of Virginia, Alexandria Division. The following Disclosure Statement is
submitted by the Debtor pursuant to the provisions of 11 U.S.C. ss. 1125(f) with
the Debtor's Plan of Reorganization ("the Plan"). A copy of the Plan is attached
hereto as Exhibit A. The definitions set forth in the Plan shall have the same
meanings throughout this Disclosure Statement. Provisions of the Bankruptcy Code
require the Debtor to submit this Disclosure Statement to all of its creditors
in order to provide creditors with adequate information to make an informed
decision in exercising their rights to vote for acceptance or rejection of the
Debtor's Plan.
REORGANIZATION OF THE DEBTOR IS SUBJECT TO NUMEROUS CONDITIONS AND
VARIABLES, AND THERE CAN BE NO ASSURANCE THAT THE PLAN, AS CONTEMPLATED, WILL BE
EFFECTUATED.
ALL TERMS USED HEREIN SHALL HAVE THE SAME MEANING GIVEN SUCH TERMS IN
THE PLAN.
Pursuant to the Bankruptcy Code, this Disclosure Statement has been
presented to and conditionally approved by the Bankruptcy Court on the 14th day
of January, 1999. Such approval is required by the Bankruptcy Code and does not
constitute a judgment of the Bankruptcy Court as to the desirability of the
Plan, or as to the value or suitability of any consideration offered hereunder.
Such approval indicates that the Bankruptcy Court has determined, subject to
final approval after notice and a hearing, that the Disclosure Statement
<PAGE>
contains adequate information to permit those claimants whose acceptance of the
Plan is solicited to make an informed judgment about the Plan. Interested
parties are referred to 11 U.S.C. Section 1125, which reads in part:
(b) An acceptance or rejection of a plan may not be solicited after
the commencement of the case under this title from a holder of a
claim or interest with respect to such claim or interest, unless, at
the time of or before such solicitation, there is transmitted to
such holder the plan or a summary of the plan, and a written
disclosure statement approved, after notice and a hearing, by the
court as containing adequate information. The court may approve a
disclosure statement without a valuation of the debtor or an
appraisal of the debtor's assets.
(d) Whether a disclosure statement, required under subsection (b) of
this section contains adequate information is not governed by any
otherwise applicable nonbankruptcy law, rule, or regulation, but an
agency or official whose duty is to administer or enforce such a
law, rule, or regulation may be heard on the issue of whether a
disclosure statement contains adequate information. Such an agency
or official may not appeal from, or otherwise seek review of, an
order approving a disclosure statement.
(e) A person that solicits acceptance or rejection of a plan, in
good faith and in compliance with the applicable provisions of this
title, or that participates, in good faith and in compliance with
the applicable provisions of this title, in the offer, issuance,
sale, or purchase of a security, offered or sold under the plan, of
the debtor, of an affiliate participating in a joint plan with the
debtor, or of a newly organized successor to the debtor under the
plan, is not liable, on account of such solicitation or
participation, for violation of any applicable law, rule, or
regulation governing solicitation of acceptance or rejection of a
plan or the offer, issuance, sale, or purchase of securities.
(f) Notwithstanding subsection (b), in a case in which the debtor
has elected under section 1121(e) to be considered a small business:
(1) the court may conditionally approve a disclosure statement
subject to final approval after notice and a hearing; (2)
acceptances and rejections of a plan may be solicited based on a
conditionally approved disclosure statement as long as the debtor
provides adequate information to each holder of a claim or interest
that is solicited, but a conditionally approved disclosure statement
shall be mailed at least 10 days prior to the date of the hearing on
confirmation of the plan; and (3) a hearing on the disclosure
statement may be combined with a hearing on confirmation of a plan.
The Debtor has prepared this Disclosure Statement to disclose that
information available to the Debtor which, in its opinion, is material,
important and necessary to any evaluation of the Plan. This document was
compiled from information obtained by the Debtor from numerous sources believed
to be accurate to the best of the Debtor's knowledge, information and belief.
Certain financial information contained herein has been prepared by management
without audit. The material contained herein is intended solely for the purpose
of evaluating the Plan and only for the use of known creditors and
interest-holders of the Debtor. This Disclosure Statement may not be relied upon
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<PAGE>
for any purpose other than the determination of how to vote on the Plan. The
Debtor favors the Plan and believes that the Plan provides the best possible
recovery to creditors and shareholders. THE DEBTOR RECOMMENDS THAT YOU VOTE TO
ACCEPT THE PLAN.
II. VOTING
A. Impaired Classes
This Disclosure Statement is submitted in accordance with Bankruptcy
Code ss. 1125 for the purpose of soliciting acceptance of the Plan from holders
of certain classes of claims and interests. The only claimants whose acceptances
of the Plan are sought are those whose claims and interests are "impaired" by
the Plan and are receiving or retaining any property under the Plan on account
of such claims or interests. Specifically, a class is impaired unless the Plan
(1) leaves unaltered the legal, equitable, and contractual rights to which such
claim or interest entitles the holder of such claim or interest, or; (2) cures
any default that occurred before or after the commencement of the case, other
than certain defaults, reinstates the maturity of such claim or interest as such
maturity existed before such default, and compensates the holder of such claim
or interest for any damages incurred as a result of any reasonable reliance by
such holder on such contractual provision or such applicable law and does not
otherwise alter the legal, equitable, or contractual rights to which such claim
or interest entitles the holder of such claim or interest.
Holders of claims and interests which are not "impaired" shall be
deemed to have accepted the Plan. Holders of interests that will not receive or
retain any property under the Plan on account of such interests are deemed not
to have accepted the Plan.
B. Voting Procedure
The Bankruptcy Court has set the 23rd day of February, 1999, at 2:00
p.m. for a hearing on the final approval of the Disclosure Statement and
Confirmation of the Plan. A creditor in order to vote, must have filed with the
Clerk of the United States Bankruptcy Court, 200 South Washington Street,
Alexandria, Virginia 22314 a proof of claim or interest on, or before, the bar
date of February 16, 1999, set by the Bankruptcy Court by Order entered on
January 13 1999 in accordance with Federal Rule of Bankruptcy Procedure 3003(c)
and Eastern District of Virginia Local Bankruptcy Rule 3003-1. Any creditor or
interest-holder claim which is scheduled as undisputed, liquidated and not
contingent is, to the extent scheduled, deemed to have filed a claim and, absent
objection, such claim is deemed allowed. A creditor may vote to accept or reject
the Plan by filling out and mailing to counsel for the Debtor the ballot which
the Debtor has provided to him/her. February 16, 1999 at 4:30 p.m. is the last
day on which ballots must be delivered to counsel for the Debtor at the address
listed below. No vote received after such time will be counted.
Whether a creditor or interest-holder votes on the Plan or not, or
whether the creditor or interest-holder votes to accept or not to accept the
Plan, such person will be bound by the terms and treatment set forth in the Plan
if the Plan is accepted by the requisite majority of creditors and
interest-holders and is confirmed by the Bankruptcy Court. Allowance of a claim
or interest for voting purposes does not necessarily mean that all or a portion
of the claim or interest will be allowed or disallowed for distribution
purposes.
-3-
<PAGE>
The Debtor or others may solicit your vote. The cost of any
solicitation by the Debtor will be borne by the Debtor. No other additional
compensation shall be received by any party for any solicitation other than as
disclosed to the Bankruptcy Court.
NO REPRESENTATIONS OR ASSURANCES CONCERNING THE DEBTOR INCLUDING,
WITHOUT LIMITATION, THE PLAN ARE AUTHORIZED BY THE DEBTOR, OTHER THAN AS SET
FORTH IN THIS DISCLOSURE STATEMENT.
If you are in one of the classes of creditors whose interests are
effected by the Plan (see "Impaired Classes" above), it is important that you
vote. IN ADDITION, CREDITORS HOLDING CLAIMS IN MORE THAN ONE CLASS MUST FILE A
BALLOT FOR EACH CLAIM.
To vote to accept or reject the Plan, creditors of the Debtor in any of
the impaired classes (see "Classification of Claims and Interests" in the Plan
attached hereto as Exhibit A) should indicate their acceptance or rejection on
the appropriate ballot. Any creditors holding claims in another impaired class
must file one ballot for each such class. Additional ballots may be obtained by
proper written request to Stephen Leach, Esq., Tucker, Flyer & Lewis, P.C., 1615
L Street N.W., Suite 400, Washington, DC 20036, (202) 429-7112, counsel for the
Debtor or photocopies of ballots may be used.
A class of claims will have accepted the Plan if (counting only those
claims voted) it is accepted by class members holding at least 2/3 in amount and
more than 1/2 in number of the allowed claims of such class voting on the Plan.
You are, therefore, urged to fill in, date, sign and promptly mail the enclosed
ballot furnished to you. Please be sure to fully complete the form and legibly
identify the name of the claimant or interest-holder.
EXECUTED BALLOTS MUST BE RECEIVED ON OR BEFORE THE RETURN DATE SET
FORTH IN THE BALLOT. COMPLETED BALLOTS SHOULD BE MAILED TO STEPHEN E. LEACH,
ESQUIRE, Tucker, Flyer & Lewis, P.C., 1615 L Street N.W., Suite 400, Washington,
DC 20036, (202) 429-7112. BECAUSE MAIL DELAYS MAY OCCUR, IT IS IMPORTANT THAT
THE BALLOT OR BALLOTS BE MAILED OR DELIVERED WELL IN ADVANCE OF THE DATE
SPECIFIED. ANY BALLOTS RECEIVED AFTER THE RETURN DATE WILL NOT BE INCLUDED IN
ANY CALCULATION TO DETERMINE WHETHER THE CREDITORS AND INTEREST-HOLDERS HAVE
VOTED TO ACCEPT OR REJECT THE PLAN. NO FACSIMILE BALLOTS WILL BE ACCEPTED.
THIS IS A SOLICITATION BY THE DEBTOR ONLY AND IS NOT A SOLICITATION BY
THE ATTORNEYS OR ACCOUNTANTS FOR THE DEBTOR, AND THE REPRESENTATIONS MADE HEREIN
ARE THOSE OF THE DEBTOR AND NOT OF SUCH ATTORNEYS OR ACCOUNTANTS.
-4-
<PAGE>
III. MATTERS TO CONSIDER BEFORE VOTING ON THE CHAPTER 11 PLAN
A. Alternatives to the Plan.
Although this Disclosure Statement is intended to provide information
to assist in the formation of a judgment as to whether to vote for or against
the Plan, a brief reminder of the only presently alternative available to the
Plan is in order. This alternative consists of the liquidation of the Debtor
under chapter 7 of the Bankruptcy Code. The Debtor believes the proposed Plan to
be in the best interests of the creditors and the interest-holders. In arriving
at this conclusion, the Debtor emphasizes that the Debtor has liabilities far in
excess of the fair value of its assets and unsecured creditors would not receive
any distribution in a chapter 7 liquidation (see liquidation analysis Section
VIII).
The Plan is a plan of reorganization that provides for the Debtor to
continue to operate and provides for a distribution to both unsecured creditors
and certain interest-holders. The unsecured creditors and shareholders of the
Debtor will receive more under the Debtor's Plan than under a chapter 7
liquidation as a result of the distribution of cash and stock and retention of
stock provided for under the Plan.
B. Specific Consideration in Voting.
Implications and risks concerning the Plan: While the Plan provides for
certain payments and distributions, such payments and distributions will apply
only to allowed claims and certain interests. Under the Bankruptcy Code, a claim
may not receive a distribution unless it is "allowed." A claim will be allowed
in the absence of an objection. A claim to which an objection has been filed
will be heard by the Bankruptcy Court at a regular evidentiary hearing and will
be allowed in full, or in part, or disallowed. Accordingly, payment on all
claims may be delayed until objections to such claims are settled.
C. Risk Factors.
For classes of claims which do not receive cash on the Effective Date,
there are certain risks inherent in accepting the Plan, including the absence of
absolute certainty of ultimate payment.
IV. REQUIREMENTS FOR CONFIRMATION
The Confirmation of a Plan of Reorganization is the ultimate goal of
the Debtor's chapter 11 case. Consequently, your decision whether to accept the
Plan must be made in the context fixed by the Bankruptcy Code.
Chapter 11 permits the adjustment of secured debt, unsecured debt and
equity interests. A Chapter 11 Plan, may with consent of that class, provide
less than full satisfaction of a senior indebtedness in favor of junior
indebtedness, and may even provide some return to equity owners absent full
satisfaction of indebtedness, so long as no impaired class votes against the
Plan. A class of claims will have accepted the Plan if (counting only claims
voted) it is accepted by class members holding at least 2/3 in amount and more
than 1/2 in number of the allowed claims of such class voting on the Plan.
-5-
<PAGE>
Even if an impaired class votes against the Plan, implementation of the
Plan is still available under the provisions of chapter 11 so long as the Plan
is fair and equitable and does not discriminate unfairly with respect to the
rejecting class or classes. A plan does not discriminate unfairly if the legal
rights of the rejecting class are treated in a manner consistent with the
treatment of other classes whose legal rights are similar to those of the
rejecting class, and if no class receives more than it is entitled to for its
claims. The "fair and equitable" test is satisfied if either (1) each creditor
in a non-accepting impaired class receives or retains under the plan property
having a present value equal to the amount of its allowed claim or (2) the
holders of claims or interests that are junior to the claims of the rejecting
class will not receive or retain any property under a plan. This principal,
commonly known as the "absolute priority rule," applies only in cases when a
class of unsecured claims or equity interests is impaired and does not accept a
plan. In that event, the absolute priority rule does not apply to all classes of
unsecured claims and equity interests, but only to the dissenting class and
classes junior to the dissenting class. The Debtor may seek to have the Plan
confirmed over the rejection of any impaired class that does not vote to accept
the Plan, or which is deemed to have rejected the Plan.
In the event a class is not impaired, it is conclusively presumed to
have accepted the Plan. Classes 1, 2, 4, 5 and 6, are impaired, as that term is
defined in Bankruptcy Code ss.1124, as the result of this Plan.
If there is no dissenting class, the test for approval by the
Bankruptcy Court of a chapter 11 plan is whether the plan is feasible and in the
best interest of creditors and interest-holders. A plan is in the best interest
of creditors if the plan will provide a recovery to the creditors that is not
less than they would have obtained if the debtor were liquidated under chapter 7
and the proceeds distributed in accordance with bankruptcy liquidation
priorities of that chapter. The Bankruptcy Court, in considering this factor,
need not consider any other alternative to the plan but liquidation. In
considering "feasibility," the Bankruptcy Court is only required to determine
whether the plan can be accomplished. This entails determining the availability
of cash for payments required at the effective date, and any other factor which
might make it impossible for a debtor to accomplish that which is proposes to
accomplish in the plan.
In order to confirm a plan, the Bankruptcy Court must find that the
plan was proposed in good faith and that the plan and the Debtor are in
compliance with the applicable provisions of chapter 11 of the Bankruptcy Code.
Finally, similar to the requirement that the Bankruptcy Court find the plan to
be feasible, the Bankruptcy Court must find the liquidation or further
reorganization of the reorganized debtor is not likely to occur after
implementation of the plan.
The determination by the Bankruptcy Court that a plan is fair,
equitable and feasible occurs at the confirmation hearing after a plan has been
accepted. The Bankruptcy Court's judgment on these matters does not constitute
an expression of the Bankruptcy Court's opinion as to whether the plan is a good
one, nor does it constitute an opinion by the Bankruptcy Court regarding any
debt or equity interest or securities issued to creditors under the plan.
-6-
<PAGE>
V. HISTORY OF THE DEBTOR AND EVENTS PRECIPITATING BANKRUPTCY.
The Debtor is a public corporation, incorporated in Delaware. The
Debtor's stock previously traded on the Nasdaq Small Cap market. The Debtor has
20,000,000 shares of common stock authorized, of which approximately 4,718,270
shares are outstanding and approximately 8,922,933 shares are subject to
issuance upon the exercise of warrants and options. The Debtor also has
1,000,000 shares of preferred stock authorized, none of which has been issued or
is outstanding.
The Debtor is developing and marketing a system, based on its
proprietary technology, to allow publishers of professional, corporate, library
and educational CD-ROM and internet based information to sell their information
to end-users on a usage basis. Because the system is currently being developed,
the Debtor has no source of income. The Debtor funded its prepetition operations
from the proceeds of its initial public offering and later with loans from
International Advance and other sources. Notwithstanding financing made
available to the Debtor by International Advance, the Debtor was unable to pay
its operating expenses, including payroll and rent. As a result, the Debtor
currently has no employees, other than David and Robert Wiedemer who also serve
as officers and directors of the Debtor.
The Debtor leases non-residential real property having an address of
580 Herndon Parkway, Suite 100, Herndon, VA 20170-5225 ("Leased Premises") under
a five year lease dated in or about June 1997 ("Lease") between the Debtor and
Monroe Parkway, L.L.C. (the "Landlord"). Pursuant to the Lease, the Debtor paid
the Landlord a security deposit in the amount of $169,391.00. On or about
October 6, 1998, the Landlord notified the Debtor that the Landlord was
unilaterally setting off amounts against the Debtor's security deposit past due
rent in the alleged amount of $89,595.70 for the months of May, June, July,
September, and October, 1998 leaving a balance of the Debtor's security deposit
of $79,795.30. The Debtor disputes the amounts owed to the Landlord and
maintains that the Landlord improperly setoff amounts allegedly due against its
security deposit.
In addition, the Landlord alleged that the Debtor breached the Lease
and filed an action for possession in the General District Court for the County
of Fairfax, Virginia ("County Court"). The County Court issued a Summons for
Unlawful Detainer and scheduled a hearing for October 30, 1998. The hearing was
stayed by the filing of the Debtor's bankruptcy petition.
Other events precipitating the filing of the bankruptcy petition
included requests for return of leased equipment by various lessors and
notification by NASDAQ on October 28, 1998 that the Debtor no longer qualified
for listing on the Nasdaq Small Cap market and had been delisted. As a result of
these events and its inability to pay its operating expenses, the Debtor filed
its petition for relief under chapter 11 on October 29, 1998 (the "Petition
Date").
VI. ASSETS AND LIABILITIES
As of the Petition Date, the Debtor estimates the value of its assets
at approximately $170,996.26. The Debtor's assets consist of trade manuals,
books, periodicals, software technology, software code and related marketing
information, software license agreement, computers, office supplies, furniture,
equipment, a non-residential lease and a security deposit. The Debtor's software
and related intellectual property needs to be further developed in order to
realize any substantial value.
-7-
<PAGE>
The Debtor also has potential claims of unknown value against various
former employees for conversion of Debtor's property as set forth in Article VII
below.
The Debtor's largest secured creditor is International Advance.
International Advance is owed $598,793.01 which includes interest, costs and
fees accrued through the Petition Date for pre-petition loans to the Debtor.
International Advance has a first priority lien on all or virtually all of the
Debtor's assets for its prepetition loans. The Debtor maintains that a portion
of International Advance's prepetition security interest is an avoidable
preference, however, the Debtor does not dispute that International Advance has
a perfected unavoidable prepetition security interest for at least $160,000.00.
International Advance disputes that its security interests are avoidable.
International Advance also has postpetition claims, liens and security interests
on all of the Debtor's assets for amounts it advances to the Debtor under a
debtor-in-possession financing facility in an amount not to exceed $120,830.00.
This debtor-in-possession financing was approved pursuant to an Order of the
Bankruptcy Court dated December 4, 1998.
In addition to the pre-petition loans to the Debtor by International
Advance, Philip Gross ("Gross") and/or Steven Schnipper ("Schnipper") made loans
in the approximate amount of $75,000.00 in April 1998 ("Gross/Schnipper Loans").
Notwithstanding certain agreements under which IMARK purportedly granted Gross
and/or Schnipper a lien on Imark's assets, the Debtor maintains that Gross
and/or Schnipper failed to perfect any security interest and/or that any
perfected security interest would be avoidable under the Bankruptcy Code. Gross
and Schnipper explicitly agreed to subordinate any security interests in their
favor to all loans advanced by, and the lien positions of, International Advance
until all amounts owed to International Advance were paid in full. Because the
value of Imark's assets is less than the first priority liens of International
Advance, Gross and Schnipper are unsecured creditors of the estate.
Priority claims against the estate include the wage claims of
approximately 16 employees subject to the statutory maximum payable per employee
in the amount of $4,300.00. The total amount of these claims is $67,493.23. In
addition to priority wage claims, there are priority tax claims against the
estate in the approximate amount of $90,000.00.
The Debtor has approximately 100 unsecured trade creditors that are
owed approximately $1,100,000.00. In addition to trade creditors, approximately
16 employees have unsecured claims against the estate for amounts in excess of
the statutory cap in the approximate amount of $240,000.
VII. POST-PETITION OPERATIONS OF DEBTOR
After the petition was filed, Imark continued its operations as a
debtor-in-possession pursuant to the provisions of Bankruptcy Code sections 1107
and 1108. The Court approved an agreement between Imark and International
Advance for Debtor-In-Possession Financing and Funding for Plan of
Reorganization ("Financing Agreement") by Order entered on December 4, 1998
("Financing Order"). Pursuant to the Financing Agreement and Financing Order,
International Advance will provide up to $120,860.00 of debtor-in-possession
financing to Imark to fund Imark's monthly expenses. In addition, under the
Financing Agreement, International Advance will provide up to $150,000.00 to
fund a plan of reorganization.
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<PAGE>
In order to expeditiously present a plan of reorganization to creditors
and interest-holders, the Debtor elected to be treated as a small business under
the Bankruptcy Code. Under the Bankruptcy Code provisions for a small business,
the Debtor can obtain confirmation of a plan of reorganization typically in less
time and at less expense than under normal Chapter 11 reorganization procedures.
As the Debtor is not currently developing its technology, the Debtor is seeking
to reorganize expeditiously in order to continue development and marketing of
its products. Consistent with this expedited procedure, the Debtor also filed a
motion for entry of an Order directing that no creditors' committees be
appointed in its case. The Bankruptcy Court granted the motion and entered an
order on December 15, 1998 directing that no creditors' committees be appointed
in the case.
Subsequent to filing its bankruptcy petition, the Debtor has maintained
minimal staff and equipment and has focused its efforts on maintaining and
preserving its technology pending confirmation of its Plan. The Debtor is also
arranging to move from its current location in order to reduce rental expenses.
The DIP financing will be used to pay for the Debtor's moving costs. The Debtor
believes that its Lease at the current location is below market value. The
Debtor has negotiated a tentative settlement with the Landlord resolving
disposition of the Lease and the claims arising from the Lease and has filed a
motion to approve the settlement.
The Debtor is reviewing its unexpired leases of computer equipment to
determine whether to reject or assume these leases. The Debtor is also reviewing
equipment lease agreements with Newcourt Capital/AT&T Capital which the Debtor
believes may be security agreements as opposed to true leases. After reviewing
these agreements and the value of the equipment, the Debtor will consider
abandoning or surrendering the equipment to Newcourt Capital/AT&T Capital. The
Debtor is presently evaluating and analyzing potential avoidance actions
pursuant to 11 U.S.C. Sections 544, 545, 546, 547 and 548, including any
potential avoidance actions for transfers to insiders. Pursuant to the Financing
Agreement, any recovery from avoidance actions will be distributed to
International Advance. The Debtor will prosecute any avoidance action which it
determines has merit and will result in a net recovery after litigation costs or
assign such avoidance actions to International Advance pursuant to its security
interest under the Financing Agreement for prosecution by International Advance.
No creditor, interest-holder, insider or other entity should rely upon the
absence of a list of identified potential avoidance actions as indicating that
no such actions exist or will be pursued.
The Debtor has potential legal and equitable claims against various
former employees for the conversion of the Debtor's property, including but not
limited to, source code, marketing information, computer passwords, software
documentation and equipment. Notwithstanding any right to setoff under
Bankruptcy Code Section 553 or its right to object to any claim, the Debtor
reserves any rights or claims for monetary damages and/or equitable relief which
it may have against any former employees. The Debtor is presently evaluating
whether it will pursue these claims in the Bankruptcy Court or other appropriate
court.
Under the Debtor's Plan of Reorganization, Imark's common stock will be
subject to a one for ten reverse stock split and outstanding shares will be
distributed to certain creditors. After these distributions, the common stock of
Imark will be owned 90% by International Advance, approximately 5% by existing
common stock holders and 5% by Imark's unsecured creditors. The Debtor's Plan
also provides for a cash distribution of up to $30,000 to unsecured creditors in
addition to stock interests in Imark.
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<PAGE>
VIII. LIQUIDATION ANALYSIS
All or virtually all of the Debtor's assets are subject to a security
interest in favor of International Advance, Inc. ("International Advance") or
other secured creditors. Consequently, if the Debtor's assets were liquidated
under chapter 7, International Advance would receive all of the proceeds and
unsecured creditors and shareholders would not receive any distributions.
The liquidation analysis attached hereto as Exhibit B demonstrates that
the proceeds from a liquidation of the Debtor's assets available for payment of
International Advance's secured claim is only approximately $120,157.98. This
amount would be further reduced by the costs of liquidating the assets, fees
required to be paid to a chapter 7 trustee under the Bankruptcy Code, and
administrative expenses in a chapter 7 case. The total amount of International
Advance's undisputed first priority prepetition secured claim (in the amount of
$160,000.00) and its postpetition secured claim (which after the first advance
under the Financing Order is greater than $40,000.00) greatly exceeds the
liquidation value of the Debtor's assets. Furthermore, prior to any distribution
to unsecured creditors, the estate would have to pay in full (i) priority tax
claims in the approximate amount of $90,000.00, (ii) priority wage claims in the
amount of $67,493.23, and (iii) Chapter 11 administrative expenses in the
approximate amount of $50,000.00. Considering the secured claims of
International Advance, administrative claims and priority claims, in a Chapter 7
liquidation, the unsecured creditors and shareholders would not receive any
distribution. Alternatively, the Debtor's Plan provides for a pro rata
distribution to unsecured creditors of a fund in an amount up to $30,000 and
five percent of the equity of the Debtor. Shareholders of the Debtor will retain
their interests under the Debtor's Plan subject to a one for ten reverse stock
split. The distribution of stock and cash to unsecured creditors and the
retention of interests by shareholders, provides significantly more to unsecured
creditors and shareholders than a chapter 7 liquidation.
IX. SUMMARY OF THE PLAN
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN PROVISIONS OF THE PLAN AND
SHOULD NOT BE RELIED UPON FOR VOTING PURPOSES. THE SUMMARY DOES NOT PURPORT TO
BE COMPLETE. CREDITORS ARE URGED TO CAREFULLY READ THE PLAN. A COPY OF THE PLAN
IS ATTACHED HERETO AS EXHIBIT A. CREDITORS AND INTEREST-HOLDERS ARE FURTHER
URGED TO CONSULT WITH COUNSEL OR WITH EACH OTHER, IN ORDER TO UNDERSTAND THE
PLAN MORE FULLY.
A. Classification of Claims and Interests
Pursuant to the Bankruptcy Code, claims and interests are grouped into
classes and the Plan provides for different treatment of each class. Under the
Plan, each class will either be left unimpaired or received distributions as
described in the Plan. Distributions to holders of allowed claims under the Plan
will be in full satisfaction and discharge of those claims. Upon Confirmation,
the Debtor will be discharged from all claims that arose before confirmation of
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<PAGE>
the Plan. For purposes of repayment of the Debtor's indebtedness under this
Plan, the claims and interests of the creditors of the Debtor are divided into
the following classes:
Class 1: The Allowed Secured Claim of International Advance.
Class 2: The Allowed Secured Claims of entities other than
International Advance.
Class 3: The Allowed Priority Wage Claims Under Bankruptcy
Code ss. 507(a)(3).
Class 4: The Allowed Unsecured Claims of Unsecured Creditors,
including, the Allowed Unsecured Deficiency Claim of International Advance,
Unsecured Claims arising from the Debtor's rejection of Executory Contracts and
Unexpired Leases, and Allowed Unsecured Claims of Employees.
Class 5: The Allowed Equity Interests of Common Stockholders.
Class 6: The Allowed Interests of Holders of Stock Options
or Warrants.
B. Treatment of Claims and Interests
1. Administrative Claims
Pursuant to Bankruptcy Code Section 1123(a)(1), administrative
claims are not separately classified. Administrative claims, as provided under
Bankruptcy Code Sections 503(b) and 507(a)(1), are the actual, necessary costs
and expenses of the administration of the chapter 11 case. The amount of all
Administrative Claims of Imark including attorneys' fees and those fees payable
pursuant to 28 U.S.C. Section 1930 are projected at $50,000.00. The Plan
provides for payment in full on the Effective Date of Allowed Administrative
Claims, except for Administrative Claims of International Advance, up to a
maximum of $50,000.00.
The Allowed super-priority Administrative Expense Claims and
Allowed Administrative Expense Claims of International Advance shall not be paid
on the Effective Date. International Advance's Allowed super-priority
Administrative Expense Claims and Allowed Administrative Expense Claims shall
not be discharged by this Plan or otherwise, and shall survive Confirmation of
the Plan. International Advance shall retain all of its liens and security
interests securing repayment of its Allowed super-priority Administrative
Expense Claims and Allowed Administrative Expense Claims as provided in Class 1.
2. Priority Tax Claims
Allowed Priority Tax Claims under Bankruptcy Code Section
507(a)(8). Pursuant to Bankruptcy Code Section. 1129(a)(9)(C), each holder of an
Allowed Priority Tax Claim shall receive on account of the allowed amount of
such claim deferred cash payments over a period of six years after the date of
assessment of such claim with interest at a rate of six percent per annum.
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<PAGE>
3. Classified Claims and Interests
The Plan separates the remaining claims and interests of the
creditors and interest-holders of the Debtor into the following classes:
(i) Class 1: Class 1 consists of the Allowed Secured
Claim of International Advance. This class will retain its allowed secured claim
for all postpetition advances to the Debtor and any and all amounts owed by the
Debtor to International Advance under the Financing Agreement, including without
limitation, amounts advanced to fund the Plan ("Postpetition Obligations"). This
class shall retain all of its liens and security interests securing repayment of
all Postpetition Obligations of the Debtor under the Financing Agreement and the
Financing Order, including without limitation, its liens on avoidance powers and
any amounts recovered thereunder and/or any avoided liens preserved for the
benefit of the estate. Such liens and security interests shall be continuing
perfected first priority liens and security interests on all of the Debtor's
assets and after acquired assets as provided in the Financing Agreement and
Financing Order.
For prepetition amounts owed to International Advance,
International Advance shall have an allowed claim in the total amount of
$598,793.01. International Advance's prepetition allowed claim shall be a
secured claim to the extent of the value of its collateral and an allowed
unsecured claim for any deficiency (collectively, "Allowed Prepetition Claim").
On the Effective Date, International Advance shall receive (i) the net proceeds
from the sale of Imark's Lease, (ii) the Debtor's security deposit posted in
connection with the Lease, and; (iii) ninety percent (90%) of the common stock
of Imark to be outstanding after Confirmation in full satisfaction of its
Allowed Prepetition Claim.
This class is impaired.
(ii) Class 2: Class 2 consists of the Allowed Secured
Claims of any entity other than International Advance. On the Effective Date,
each holder of an allowed secured claim in this class shall receive on account
of its allowed secured claim either: (a) the return of the collateral securing
its claim; or (b) such other treatment as agreed to by the Debtor and the holder
of such allowed secured claim. Any unsecured portion of any allowed claim in
this class shall be treated as provided in Class 4.
This class is impaired.
(iii) Class 3: Class 3 consists of the Allowed
Priority Claims of employees of the Debtor for wages and benefits. At this time,
the Debtor estimates that these claims total $67,493.23. Under the Plan, this
class shall be paid cash on the Effective Date of the Plan equal to the allowed
amount of such claims subject to the $4,300 maximum payment per employee for
wages, salaries, commissions, including vacation, severance, sick leave pay
(earned by an individual), earned within ninety (90) days before the Petition
Date pursuant to Bankruptcy Code ss. 507(a)(3). The balance of any claims in
this class are Unsecured Claims. Any portion of employee claims for wages and
benefits that exceeds the statutory priority amount under Bankruptcy Code ss.
507(a)(3) shall be treated as provided in Class 4.
This class is not impaired.
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<PAGE>
(iv) Class 4: Class 4 consists of the Allowed
Unsecured Claims (including the Allowed Unsecured Claim of International
Advance, Allowed Unsecured Claims of Class 2, Allowed Unsecured Claims of the
Debtor's employees for wages and benefits and Allowed Unsecured Claims arising
from the rejection of Executory Contracts). On the later of the Effective Date
or determination of the allowance or disallowance of all Disputed Claims by
Final Order or by agreement of the parties, each holder of an allowed claim in
this class shall receive on account of the allowed amount of its unsecured
claim, a Pro Rata distribution of: (i) five percent (5%) of the common stock of
Imark to be outstanding after Confirmation, and; (ii) a cash fund equal to the
lesser of, $30,000.00 or five percent (5%) of the aggregate amount of Allowed
Unsecured Claims. No fractional shares of common stock of Imark shall be
distributed to holders of Allowed Unsecured Claims. International Advance shall
receive the distribution provided under Class 1 in full satisfaction of its
Allowed Unsecured Claim.
This class is impaired.
(v) Class 5: Class 5 consists of the Allowed Equity
Interests of Common Stockholders of Imark. On the Effective Date, holders of
common stock of Imark shall retain their shares, which after all other
distributions under the Plan shall represent five percent (5%) of the
outstanding common stock of Imark. The outstanding shares will be subject to a
one for ten reverse stock split effective immediately prior to distribution of
common stock to holders of Class 1 and Class 4 claims.
This class is impaired.
(vi) Class 6: Class 6 consists of the Allowed
Interests of Holders of Stock Options or Warrants. Holders of stock options or
warrants for the Debtor's stock shall not receive any distribution or retain any
property, claims or interests on account of their stock options and warrants and
all stock options and warrants shall be canceled on the Effective Date of the
Plan.
This class is impaired.
X. MEANS OF EXECUTION
The Plan provides that upon Confirmation of the Plan, all assets shall
vest in the Debtor free and clear of all claims and interests except as
otherwise provided in the Plan. The outstanding shares of the Debtor's common
stock will be subject to a one for ten reverse stock split effective immediately
prior to issuance and distribution of common stock to holders of allowed Class 1
and Class 4 claims on the Effective Date. After distributions under the Plan,
Imark common stock will be held in the following percentages: (i) International
Advance ninety percent (90%) (ii) Unsecured Creditors five percent (5%) and
(iii) common stockholders approximately five percent (5%). All stock options and
warrants will be canceled on the Effective Date of the Plan.
The Plan provides that pursuant to Delaware General Corporation Law
section 303 without any further action of the directors or shareholders, on the
Effective Date of the Plan, the officers of Imark shall file an amendment to its
certificate of incorporation as required, and the certificate of incorporation
shall be deemed to be amended under Delaware General Corporation Law section 242
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<PAGE>
to provide for (i) a one for ten reverse stock split of Imark's outstanding
common stock and (ii) an increase in the authorized common stock of Imark to
40,000,000 shares. In addition, all outstanding warrants and stock options for
Imark's stock shall be canceled. The Plan provides that the officers of Imark
shall file such amendment with the Delaware Secretary of State, in conformance
with the requirements of Delaware General Corporation Law section 303(c) and pay
all fees for such filing as provided under Delaware General Corporation Law
section 303(e).
The Plan provides that with respect to the one for ten reverse stock
split, all stock certificates representing shares of common stock of the Company
which are outstanding prior to the Effective Date need not be returned to the
Debtor or its transfer agent, but may remain outstanding and shall automatically
be deemed to represent one-tenth of the numbers of shares which they represented
prior to the Effective Date. The Plan provides that fractional shares created by
the reverse stock split shall be deemed canceled and of no value.
The Plan provides that pursuant to Delaware General Corporation Law
section 303 without any further action of the directors or shareholders, after
amendment of its certificate of incorporation, the officers of Imark shall
issue, or cause to be issued, sufficient shares of its common stock to make the
distributions of common stock provided in the Plan to the holders of Class 1 and
Class 4 claims. Fractional shares shall not be issued for distributions to
holders of Class 1 or Class 4 claims.
Funding for the Plan up to a maximum of $150,000.00 will be provided by
International Advance pursuant to the terms of the Financing Agreement.
The Plan provides for procedures concerning the delivery of
distributions and undeliverable distributions as provided in paragraph 7.9 of
the Plan.
Paragraph 7.10 of the Plan provides that the Debtor may, in accordance
with section 553 of the Bankruptcy Code and applicable nonbankruptcy law, set
off against any Allowed Claim and any relevant distributions, any claim the
Debtor may hold against the holder of such Allowed Claim.
XI. OBJECTIONS TO CLAIMS
A. Retention of Rights
The Plan provides that the Debtor will retain all rights under
Bankruptcy Code sections 502, 544, 545, 546, 547, 548, 549, 550, 553(b) and
724(a), subject to the liens and security interests of International Advance as
provided herein and in the Financing Agreement and the Financing Order. The
Debtor is evaluating potential avoidance actions, including any potential
avoidance actions for transfers to insiders.
B. Administrative Claims
Under the Plan, the Debtor reserves the right to object to any
applications to the Bankruptcy Court for the allowance of administrative claims.
Except for any administrative claims of International Advance, any claims for
administrative expenses that are not filed with the Bankruptcy Court and served
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<PAGE>
upon the Office of the United States Trustee and counsel for the Debtor within
ninety (90) days of the Effective Date of the Plan, subject to any extensions by
the Bankruptcy Court, shall be forever barred. Under the Plan and the
Confirmation Order, International Advance shall have allowed super-priority
administrative claims and administrative claims to the extent and for the
amounts provided in the Financing Agreement and Financing Order.
XII. PROCEDURES FOR RESOLVING AND TREATING DISPUTED CLAIMS
Under the Plan, the Debtor reserves the right to object to claims.
Unless otherwise provided in the Plan or by Order of the Bankruptcy Court, the
Debtor will make objections to claims prior to the expiration of sixty (60) days
after the Effective Date of the Plan, subject to any extensions by the
Bankruptcy Court. The Debtor will serve the objection to the claim on the holder
of such claim and file the objection with the Bankruptcy Court.
XIII. RETENTION OF JURISDICTION
The Plan provides for retention of jurisdiction by the Bankruptcy Court
for all matters arising under, or related to, these proceedings.
XIV. EXECUTORY CONTRACTS
The Plan provides that all executory contracts and unexpired leases not
assumed or rejected prior to Confirmation shall be rejected unless otherwise
provided by the Plan.
XV. DISCHARGE OF DEBTOR
The Plan provides that pursuant to Bankruptcy Code section 1141, upon
Confirmation of the Plan, the Debtor and its successors and assigns, will be
discharged of all claims and liabilities arising prior to the Confirmation of
the Plan. The Plan provides that Confirmation of the Plan shall constitute a
discharge of any debt that arose prior to Confirmation and any debt of any kind
specified in Bankruptcy Code sections 502(g), (h), or (i), whether or not a
holder or transferee of a claim accepts the Plan. The Debtor is not assuming
any liabilities under the Plan.
The Confirmation of the Plan, and the rights afforded to creditors and
interest-holders in the Plan shall be in exchange for and in complete
satisfaction, discharge and release of all Claims against the Debtor and its
successors and assigns, of any nature whatsoever regardless of whether reduced
to judgment, liquidated or unliquidated, contingent or noncontingent, asserted
or unasserted, fixed or not, matured or unmatured, disputed or undisputed, legal
or equitable, known or unknown, which arose or are deemed to have arisen on or
before the Confirmation Date, including, but not limited to: (1) any interest
accrued thereon from and after the Petition Date; (2) any liability of a kind
specified in Bankruptcy Code sections 502(g), 502(h), and 502(i) regardless of
whether a Proof of Claim or Interest is filed or deemed filed under Bankruptcy
Code section 501, or such Claim or Interest is allowed.
Except as provided under the Plan, upon the Effective Date, all such
Claims and Interests against the Debtor and its successors and assigns, shall be
satisfied, discharged and released in full. Except as otherwise provided herein,
all Creditors shall be precluded from asserting against the Debtor and its
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<PAGE>
successors and assigns, any other or further Claim based upon any act or
omission, transaction or other activity of any kind or nature that occurred
prior to the Effective Date.
Unless otherwise provided in the Plan, all injunctions or stays
provided for in the case pursuant to Bankruptcy Code section 362 or otherwise
extant on the Confirmation Date shall become permanent and remain in full force
and effect unless otherwise provided for by Bankruptcy Court Order.
XVI. MODIFICATION OF THE PLAN
The Plan provides that the Debtor reserves the right to amend or modify
the Plan before Confirmation in accordance with Bankruptcy Code section 1127 and
Federal Rule of Bankruptcy Procedure 3017. The Debtor may modify the Plan prior
to Confirmation if the Bankruptcy Court determines that the modification does
not materially and adversely affect or impair the interest of any creditor or
interest-holder who has not accepted such modification. In which case, such
modification shall be deemed accepted by all holders of claims and interests who
have previously accepted the Plan.
The Plan provides that the Debtor may amend or modify the Plan after
Confirmation as provided under Bankruptcy Code section 1127.
XVII. DISCLOSURES REQUIRED BY BANKRUPTCY CODE
The Code requires disclosure of certain facts as follows:
1. There are no payments or promises made of the kind
specified in Bankruptcy Code section 1129(a)(4)(A) which have not previously
been disclosed to the Bankruptcy Court.
2. Upon the Effective Date of the Plan, the ownership of the
Debtor shall be as set forth in the Plan.
XVIII. CONCLUSION
THE MATERIALS PROVIDED IN THIS DISCLOSURE STATEMENT ARE INTENDED TO
ASSIST YOU IN VOTING ON THE PLAN IN AN INFORMED FASHION. IF THE PLAN IS
CONFIRMED, YOU WILL BE BOUND BY ITS TERMS; THEREFORE, YOU ARE URGED TO REVIEW
THIS MATERIAL AND TO MAKE SUCH FURTHER INQUIRIES AS YOU MAY DEEM APPROPRIATE AND
THEN CAST AN INFORMED VOTE ON THE PLAN.
IMARK TECHNOLOGIES, INC.
/s/ John David Wiedemer
Dated: January 14, 1999 By: ------------------------------------
John David Wiedemer, Senior Vice President
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<PAGE>
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
IN RE:
IMARK TECHNOLOGIES, INC., Case No. 98-17963-SSM
(Chapter 11)
DEBTOR
- --------------------------------------------------------------------------------
ORDER CONDITIONALLY APPROVING DISCLOSURE STATEMENT,
FIXING TIME FOR FILING ACCEPTANCES OR REJECTIONS OF PLAN,
FIXING TIME FOR FILING OF PROOFS OF CLAIM OR INTEREST,
FIXING TIME FOR FILING OBJECTIONS TO DISCLOSURE STATEMENT,
FIXING DATE FOR HEARING ON FINAL APPROVAL OF DISCLOSURE
STATEMENT, AND FIXING DATE FOR HEARING ON CONFIRMATION
COMBINED WITH NOTICE THEREOF
An amended disclosure statement under Chapter 11 of the Bankruptcy Code
having been filed by IMARK Technologies, Inc. ("IMARK" or "Debtor") on January
14, 1999 ("Disclosure Statement") referring to an amended plan under Chapter 11
of the Code filed by the Debtor on January 14, 1999 ("Plan"); and the Debtor
having filed an Election to be Considered Small Business in Chapter 11
Reorganization; and the Debtor having filed an Application for Conditional
Approval of the Disclosure Statement Pursuant to Federal Rule of Bankruptcy
Procedure ("Bankruptcy Rule") 3017.1(a), the Court having conditionally approved
the Disclosure Statement as containing adequate information pursuant to
Bankruptcy Rule 1125(f)(1):
IT IS, on this 14th day of January, 1999, ORDERED and notice is hereby
given, that:
- ------------------------------------------
STEPHEN E. LEACH, (VA Bar No. 20601)
JONATHAN W. LIPSHIE, (VA Bar No. 31826)
TUCKER, FLYER & LEWIS, P.C.
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
(202) 429-7112
Counsel for Debtor
<PAGE>
1. The Disclosure Statement is conditionally approved subject to final
approval after notice and a hearing February 23, 1999 at 2:00 p.m. is fixed as
the date for a hearing for final approval of the Disclosure Statement if timely
objections are filed. Unless a written response objecting to the adequacy of the
Disclosure Statement is filed with the Clerk of the Court and served on counsel
for the Debtor within five (5) business days before the scheduled hearing date,
the Court may deem any opposition to the adequacy of the Disclosure Statement as
waived, treat the adequacy of the Disclosure Statement as conceded, and issue an
order approving the Disclosure Statement without further notice. If no
objections to the adequacy of the Disclosure Statement are filed and served, the
Court shall enter an Order approving the adequacy of the Disclosure Statement at
the confirmation hearing.
2. February 16, 1999 is fixed as the last day for filing written
acceptances or rejections of the Plan (ballots) referred to above.
3. February 23, 1999 at 2.00 p.m. is fixed as the date and time for the
hearing on confirmation of the Plan. February 16, 1999 is fixed as the last day
for filing and serving written objections to confirmation of the Plan and unless
a written response objecting to Plan and supporting memorandum are filed with
tho Clerk of the Court and served on counsel for the Debtor, the Court may deem
any opposition as waived, treat the request for confirmation of the Plan as
conceded, and issue an order confirming the Plan referred to herein without
further notice or hearing.
4. By Order entered by the Bankruptcy Court, the last date to file
proofs of claim or interest in the Debtor's Chapter 11 bankruptcy case has been
shortened from March 2, 1999 to February 16, 1999. All proofs of claim must be
filed on or before February 16, 1999. This Order amends and supersedes any prior
notices or orders setting the last date to file proofs of claim or interest in
the Debtor's Chapter 11 bankruptcy case, including the notice issued by the
Clerk of the Bankruptcy Court setting the last date to file proofs of claim or
interest as March 2, 1999.
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<PAGE>
5. Within 2 days after the entry of this order, copies of this order,
the conditionally approved Disclosure Statement and Plan, together with a ballot
in the form annexed hereto, shall be mailed by the Debtor to all creditors, all
record shareholders, any other party which has filed a notice of appearance and
request for service of papers, the NASDAQ Stock Market, Inc., the Securities
Exchange Commission and shall be transmitted to the United States Trustee, as
provided by Fed. R. Bankr. P.3017(d).
6. Service of copies of this order, the conditionally approved
Disclosure Statement and Plan, and ballot on all record shareholders and filing
a Form 8-k, including the conditionally approved Disclosure Statement and Plan
as exhibits thereto, with the SEC is deemed sufficient notice to all beneficial
shareholders pursuant to Federal Rule of Bankruptcy Procedure 3017(e) and 11
U.S.C. section 1125.
/s/ Stephen S. Mitchell
-----------------------------
Honorable Stephen S. Mitchell
United States Bankruptcy Judge
TUCKER, FLYER & LEWIS, P.C.
/s/ Jonathan W. Lipshie
By: -----------------------------
STEPHEN E. LEACH, (VA Bar No. 20601)
JONATHAN W. LIPSHIE, (VA Bar No. 31826)
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
(202) 429-7112
Counsel to Imark Technologies, Inc.
<PAGE>
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
(Alexandria Division)
IN RE: |
|
IMARK TECHNOLOGIES, INC., | Case No. 98-17963-SSM
DEBTOR | (Chapter 11)
ORDER FIXING TIME FOR FILING PROOFS OF CLAIM OR INTEREST
IN DEBTOR'S CHAPTER 11 CASE
---------------------------
IMARK Technologies, Inc. ("IMARK" or "Debtor") having filed a Motion for
entry of an Order fixing the time for filing proofs of claim or interest in the
Debtor's Chapter 11 case ("Motion"), on notice to Vorys, Sater, Seymour & Pease,
LLP and Lowenstein Sandler PC, counsel for International Advance, Inc., the
Office of the United States Trustee, the Debtor's twenty largest unsecured
creditors and all parties filing notices of appearance; and no objections having
been timely filed to the Motion; and the Court having considered the Motion and
all papers filed in support thereof; and for good cause shown:
IT IS, on this 13th day of January, 1999, ORDERED, that:
1. The last date to file proofs of claim or interest in the Debtor's
Chapter 11 bankruptcy case is February 16, 1999. This Order amends and
supersedes any prior notices or orders setting the last date to file proofs of
claim or interest in the Debtor's Chapter 11 bankruptcy case.
- ------------------------------------
STEPHEN E. LEACH, (VA Bar No. 20601)
JONATHAN W. LIPSHIE, (VA Bar No. 31826)
TUCKER, FLYER & LEWIS, P.C.
1615 L Street, N,W., Suite 400
Washington, D.C. 20036
(202)429-7112
Counsel for Debtor
<PAGE>
2. The Debtor is hereby authorized and directed to provide notice of the
shortened date for filing proofs of claim or interest to all creditors and
interest-holders in the time and manner approved by this Court pursuant to the
Order Conditionally Approving Disclosure Statement, Fixing Time for Filing
Acceptances or Rejections of Plan, Fixing Time for Filing Proofs of Claim or
Interest, Fixing Time for Filing Objections to Disclosure Statement, Fixing Date
for Hearing on Final Approval of Disclosure Statement, and Fixing Date for
Hearing on Confirmation Combined with Notice Thereof.
3. This order is without prejudice to the claim or interest of any creditor
or interest holder who files a proof of claim or interest on or before the
original bar date and who did not have actual notice of the shortened bar date
in sufficient time to file a timely proof of claim or interest or otherwise
justifiably relied on the original notice of bar date.
/s/ Stephen S. Mitchell
-----------------------------
Honorable Stephen S. Mitchell
United States Bankruptcy Judge
TUCKER, FLYER & LEWIS, P.C.
By: /s/ Jonathan W. Lipshie
---------------------------
STEPHEN E. LEACH
(VA Bar No. 20601)
JONATHAN W. LIPSHIE
(VA Bar No. 31826)
1615 L Street, N.W., Suite 400
Washington, D.C. 20036
(202) 429-7112
Counsel to Imark Technologies, Inc.
-2-
