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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) JULY 21, 1999
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SystemSoft Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-24418 04-3121799
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(Commission File Number) (IRS Employer Identification No.)
One Innovation Drive, Natick, Massachusetts 01760
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(Address of Principal Executive Offices) (Zip Code)
508-651-0088
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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TABLE OF CONTENTS
FORM 8-K
JULY 21, 1999
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ITEM PAGE
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<S> <C> <C>
Item 5. Other Events. 1
Item 7. Financial Statements and Exhibits. 1
Signature 2
Exhibits E-1
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ITEM 5. OTHER EVENTS.
On July 21, 1999, SystemSoft Corporation (the "Company") filed a plan of
reorganization (the "Plan") with the United States Bankruptcy Court for the
District of Massachusetts (Western Division). The Plan was filed in connection
with the Company's voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code, filed March 23, 1999 (docket number 99-41885-JFQ). The
Company expects the Bankruptcy Court to either approve or disapprove the Plan by
September or October, 1999, although no assurances can be given as to such
timeframe. If the Plan is not approved, the Company intends to submit an
alternative plan of reorganization or liquidation. The description of the Plan
contained herein is qualified in its entirety by reference to the Plan attached
hereto as Exhibit 2 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed with this report:
EXHIBIT NO. TITLE
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2 Plan of Reorganization
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SystemSoft Corporation
Date: July 28, 1999 By: /S/ Stephen A. Burke
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Stephen A. Burke
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. TITLE
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2 Plan of Reorganization
E-1
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
(Western Division)
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)
In re: )
)
SYSTEMSOFT CORPORATION, ) Chapter 11
) Case No. 99-41885-JFQ
Debtor. )
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PLAN OF REORGANIZATION
July 21, 1999
Charles A. Dale III
Elisabeth Schreuer
Gadsby & Hannah, LLP
225 Franklin Street
Boston, MA 02110
(617) 345-7000
Counsel to the Debtor
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ARTICLE I
DEFINITIONS
All capitalized terms used herein, and not otherwise defined herein, shall
have the meaning given to them in Article I, unless the context clearly requires
otherwise. Any terms used in this Plan which are defined in the Code shall have
the meanings given to them in the Code, unless the context clearly requires
otherwise.
1.1 "Administrative Claims" shall mean amounts Allowed by the Court under
section 503(b) and entitled to priority under section 507(a) of the Code
including (i) actual and reasonable costs and expenses incurred for services
rendered in connection with this reorganization case, (ii) all costs associated
with preservation of the debtor's bankruptcy estate; and (iii) all other claims
accorded priority under section 507(a)(1), 507(a)(2) and 28 U.S.C. ss. 1930.
1.2 "Allowed", "Allowed Amount" or "Allowed Claim" shall mean a Claim or
any portion thereof: (a) that has been allowed by a final Order; (b) either (x)
that is Scheduled, other than a Claim that is Scheduled at zero or as disputed,
contingent, or unliquidated, or (y) for which a proof of claim has been timely
filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order
of the Bankruptcy Court, or other applicable bankruptcy law, and as to which
either (i) no objection to its allowance has been filed within the periods of
limitation fixed by the Code or by any Final Order of the Bankruptcy Court or
(ii) any objection to its allowance has been settled or withdrawn, or has been
denied by a Final Order, or (c) that is expressly allowed in the Plan.
1.3 "Avoidance Actions" shall mean all claims to avoid and/or recover
fraudulent, preferential and other impermissible transfers pursuant to sections
544 through 552 of the Code, and shall not include the Microsoft Claim.
1.4 "Bankruptcy Court" or "Court" shall mean the United States Bankruptcy
Court for the District of Massachusetts (Western Division).
1.5 "Claim" shall mean a right to payment or a right to an equitable
remedy as defined in section 101 of the Code.
1.6 "Class Action" shall mean the litigation commenced by the filing of a
complaint on March 2, 1998, captioned THOMAS P. GORMAN, ET AL. V. SYSTEMSOFT
CORPORATION, ROBERT F. ANGELO, WILLIAM J. O'CONNELL, PAUL J. PEDEVILLANO, ROBERT
N. GOLDMAN, THOMAS W. HIGGINS, RUSSELL BLAIR, JONATHAN L. JOSEPH, W. FRANK KING,
DAVID SOMMERS, DAVID J. MCNEFF AND COOPERS & LYBRAND LLP (Civil Action No. 98 CV
10367) in the United States District Court for the District of Massachusetts on
behalf of purchasers of SystemSoft common stock during the period from January
25, 1996 through March 3, 1997, which case was consolidated with eight
additional cases filed in the District Court between March 3, 1998 through April
27, 1998.
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1.7 "Class A Shares" shall mean 1,200,000 shares of Class A preferred
stock in the Reorganized Debtor.
1.8 "Class B Shares" shall mean 2,500,000 shares of Class B preferred
stock in the Reorganized Debtor to be issued to the New Investors on Effective
Date.
1.9 "Code" shall mean the United States Bankruptcy Code, 11
U.S.C.ss.ss.101-1330.
1.10 "Collateral" shall mean the Debtor's accounts, inventory, machinery,
equipment, general intangibles, licenses, patents, copyrights, and certain
certificates of deposit whether now existing or hereafter acquired, and the
proceeds of each of the foregoing.
1.11 "Committee" shall mean the Official Committee of Unsecured Creditors
of SystemSoft Corporation.
1.12 "Confirmation Date" shall mean the date on which an order is entered
by the Court confirming the Plan.
1.13 "Confirmation Order" shall mean the order entered by the Court
confirming the Plan.
1.14 "Creditor Trust" shall mean a trust established on the Effective Date
in accordance with Article V of the Plan for the benefit of holders of Allowed
Class 3 Claims.
1.15 "Creditor Trustee" shall mean the trustee of the Creditor Trust who
shall be elected by a majority vote of the Committee on or before the Effective
Date.
1.16 "Debtor" shall mean SystemSoft Corporation, a Delaware corporation
with a principal place of business at Two Apple Hill, Natick, Massachusetts.
1.17 "Effective Date" shall mean the date which is eleven (11) days after
the Confirmation Date, unless an appeal of the Court's Order confirming the Plan
has been taken, in which case the Effective Date will not occur until the appeal
is finally adjudicated and the Order confirming the Plan is affirmed in all
respects, or the Reorganized Debtor waives the foregoing requirements and
consummates the Plan.
1.18 "Employee Retention Payments" shall mean payments made to the
Debtor's SystemWizard employees pursuant the Court's Order dated May 24, 1999
allowing the Debtor's Motion to Implement Employee Incentive Bonus Program.
1.19 "Final Order" shall mean an Order of the Bankruptcy Court or other
court, which has been duly entered on the docket of such court, from which no
appeal can be taken or with respect to which the time period for taking an
appeal has lapsed or terminated, or as to
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which all appeals have been withdrawn or dismissed with prejudice and no further
appeals can be taken.
1.20 "Initial Cash Distribution" shall mean a payment by the Reorganized
Debtor to the Creditor Trustee on the Effective Date in the amount of $300,000.
1.21 "Interests" shall mean equity in the Debtor evidenced by shares of
preferred or common stock in the Debtor as well as claims asserted by the
plaintiffs, individually and on behalf of others, in the Class Action.
1.22 "Lease" shall mean that certain unexpired commercial lease, dated as
of December 20, 1996 (together with the Second amendment dated November 1, 1998
and the Third Amendment dated April 30, 1999) and entered into by the Debtor as
lessee and Metropolitan Life Insurance Company as lessor, for the lease of real
property known as and numbered Two Apple Hill (also known as 568-598 Worcester
Street), Natick, Massachusetts.
1.23 "Landlord" shall mean Metropolitan Life Insurance Company which is
the lessor under the Lease.
1.24 "Loan Documents" shall mean certain instruments, loan and security
agreements, letters of credit and other documents evidencing various loans,
extensions of credit and other financial accommodations made to the Debtor by
SVB, including a Second Amended and Restated Loan and Security Agreement dated
June 12, 1998, and an Accounts Receivable (Royalty) Financing Agreement dated
January 7, 1999.
1.25 "Microsoft Claim" shall mean unliquidated claims against Microsoft
Corporation including but not limited to those claims and causes of action based
upon the facts alleged in a complaint filed by the Debtor in the United States
District Court for the District of Massachusetts (Civil Action
#98-CV-12403-WGY).
1.26 "New Investors" shall mean those persons or entities who commit to
make an investment of cash or other consideration in exchange for an equity
interest in the Reorganized Debtor.
1.27 "Non-Business Assets" shall mean proceeds received by the Reorganized
Debtor subsequent to the Effective Date from: (a) all cash and deposit accounts
in Taiwan, (b) amounts returned or made available to the Reorganized Debtor from
the certificate of deposit securing its obligations to SVB on an outstanding
$400,000 letter of credit, (c) amounts collected from Insyde Software (including
the proceeds from the sale or disposition of Insyde Software stock); (d) sales
of intellectual property and excess physical assets; and (e) the Microsoft Claim
LESS the reasonable costs and expenses incurred in pursuing the Microsoft Claim.
1.28 "Petition Date" shall mean March 23, 1999.
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1.29 "Plan" shall mean the Debtor's Plan of Reorganization dated July 21,
1999, as modified or amended from time to time.
1.30 "Reorganized Debtor" shall mean SystemSoft Corporation on and after
the Confirmation Date, its successors and assigns.
1.31 "Reorganized Debtor's Common Stock" shall mean 2,500,000 shares of
common stock in the Reorganized Debtor.
1.32 "SVB" shall mean Silicon Valley Bank, its successors and assigns.
1.33 "Subsidiary" shall mean a newly formed corporation the principal
objective of which is to own and operate the Reorganized Debtor's SystemWizard
business after the Effective Date.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
For purposes of this Plan, Claims and Interests are classified as
follows:
CLAIMS
2.1 CLASS 1 consists of the secured claim held by SVB, its successors or
assigns, to the extent of the value of collateral securing such claims. The
Class 1 secured claim arises out of various loans, extensions of credit and
other financial accommodations made to the Debtor by SVB pursuant to the Loan
Documents. The Debtor's obligations to SVB under the Loan Documents are secured
by a first priority perfected security interest in and to the Collateral.
2.2 CLASS 2 consists of Allowed unsecured non-priority Claims against the
Debtor (i) in the amount of $500 or less and (ii) in any amount greater than
$500 if the holder of such claim makes a written election, prior to the date
upon which creditors must vote to accept or reject the Plan, to be treated as a
Class 2 creditor.
2.3 CLASS 3 consists of Allowed unsecured non-priority claims against the
Debtor other than Class 2 claims.
INTERESTS
2.4 CLASS 4 consists of all Interests in the Debtor.
ARTICLE III
TREATMENT OF CLAIMS AND INTERESTS
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Except as otherwise provided for herein, the treatment of and
consideration to be received by holders of Allowed Claims and Interests shall be
in full settlement, release, and discharge of their respective Allowed Claims.
All payments hereunder shall be subject to reasonable grace, notice, and cure
periods.
CLAIMS
3.1 CLASS 1 -- On the Effective Date, the Class 1 Claim shall be Allowed
in an amount equal to the outstanding indebtedness owed by the Debtor to SVB
arising from and in connection with the Loan Documents including reasonable
fees, costs, and charges which are allowable under 11 U.S.C. ss. 506(b).
On the Effective Date, SVB shall (i) make a term loan to the Reorganized
Debtor in the original principal sum of $600,000 and (ii) reinstate the Debtor's
pre-petition working capital line of credit (or make available a new working
capital line) to the extent of $700,000. Amounts owed to SVB as of the Effective
Date shall be repaid by the Reorganized Debtor in equal monthly installments of
principal and interest (at a rate equal to Prime plus 4% per annum) over a
period of two years. All amounts owed to SVB shall continue to be secured by
first priority liens against all of the Reorganized Debtor's assets as well as
the assets transferred to the Subsidiary on the Effective Date.
The Class 1 Claim is impaired under the Plan.
3.2 CLASS 2 -- On the Effective Date, holders of Allowed Class 2 Claims
shall be paid the lesser of: (i) the Allowed Amount of such Class 2 Claim or
(ii) $500.
Class 2 Claims are impaired under the Plan.
3.3 CLASS 3 -- On the Effective Date, each holder of an Allowed Class 3
Claim shall be entitled to receive the following:
1. a PRO RATA beneficial interest in the Creditor Trust; and
2. a cash distribution from the Creditor Trustee in an amount equal to
such creditor's PRO RATA interest in the Initial Cash Distribution.
Additional distributions to and from the Creditor Trust are discussed
at Article V INFRA.
Class 3 Claims are impaired under the Plan.
INTERESTS
3.4 CLASS 4 -- All Interests in the Debtor shall be cancelled on the
Effective Date.
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ARTICLE IV
TREATMENT OF UNCLASSIFIED CLAIMS
4.1 ADMINISTRATIVE AND NON-TAX PRIORITY CLAIMS -- All Claims for actual
and necessary costs and expenses of administration entitled to priority in
accordance with sections 503(b) and 507(a) of the Code, other than Claims
entitled to priority under section 507(a)(8), including but not limited to: (a)
all Claims, if any, for wages, salaries, or commissions entitled to priority in
accordance with section 507(a)(3) of the Code; (b) Claims for compensation
pursuant to sections 328, 330 and 503(b) of the Code; and (c) Claims, if any, in
respect of tax obligations incurred by the Debtor's estate, shall be paid in
full in cash upon the Effective Date or as soon thereafter as is practicable;
PROVIDED, HOWEVER, that any such Claim that is the subject of an agreement for
waiver, deferral, installment payment or the like shall be so paid in accordance
with such agreement.
Administrative claims against the Debtor include professional fees
incurred during the course of these Chapter 11 proceedings including (i) fees
and expenses of Debtor's counsel, Gadsby & Hannah LLP; (ii) fees and expenses of
Debtor's financial advisor, KPMG Peat Marwick; (iii) fees and expenses of
Debtor's special patent counsel, Testa, Hurwitz and Thibeault; and (iv) fees and
expenses of counsel to the Committee, Hanify & King, P.C. Also included are
Court approved Employee Retention Payments for eligible employees.
4.2 PRIORITY TAX CLAIMS -- Unsecured tax claims as defined and entitled to
priority under section 507(a)(8) of the Code including, without limitation,
claims for withholding, excise, employment, sales, and personal property taxes,
but excluding any penalties and interest owed on said penalties (which, if an
Allowed Claim, shall be treated as general unsecured claims under Class 3) shall
be paid in full in cash on the Effective Date or, at the election of the Debtor,
over a six year period from the date of assessment of such claims in accordance
with section 1129(a)(9)(C) of the Code. Any payment made to the holder of an
Allowed priority tax claim shall be applied first in satisfaction of the
so-called "trust fund" portion of such claim for which any "responsible party"
assessment may be made under state or federal law and, thereafter, to the
balance of such Allowed Claim.
ARTICLE V
PROVISIONS FOR THE EXECUTION AND IMPLEMENTATION OF THE PLAN
5.1 THE CREDITOR TRUST -- The Creditor Trust shall be funded and
distributions shall be made to the holders of Allowed Class 3 Claims as follows:
1. On the Effective Date, the Reorganized Debtor shall transfer to the
Creditor Trustee the Initial Cash Distribution together with the Class
A Shares;
2. From and after the Effective Date, the Reorganized Debtor shall
make semi-annual distributions to the Creditor Trustee in an amount
equal to 80% of amounts collected on account of the Non-Business
Assets;
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3. Pursuant to 11 U.S.C. ss. 1123(b)(3)(B), the Creditor Trustee shall
be appointed to serve as the estate representative to prosecute all
Avoidance Actions. The proceeds of all Avoidance Actions, net of
related expenses including reasonable attorneys' fees, shall be
retained by the Creditor Trustee for the benefit of holders of Allowed
Class 3 Claims;
4. The Reorganized Debtor shall redeem the Class A Shares according to
the following schedule:
a) Prior to the first anniversary of the Effective Date, the
Reorganized Debtor may redeem all or any portion of the Class A
Shares for Seventy-Five cents ($.75) per share;
b) On and after the first anniversary of the Effective Date, but
prior to the second anniversary of the Effective Date, the
Reorganized Debtor may redeem all or any portion of the Class A
Shares for One dollar ($1.00) per share; and
c) On and after the second anniversary of the Effective Date, the
Reorganized Debtor may redeem all or any portion of the Class A
Shares for One Dollar Twenty-Five cents ($1.25) per share.
Semi-annually, the Reorganized Debtor shall redeem that number of
Class A Shares which is equal to a quotient (i) the numerator of which
is 50% of the Reorganized Debtor's earnings before interest, taxes,
debt service and amortization from the operation of its PC Card
business during the preceding six months and (ii) the denominator of
which is the applicable per share redemption price set forth above.
After the second anniversary of the Effective Date, the Class A shares
shall have a liquidation preference over the Reorganized Debtor's
common and Class B stockholders for an amount equal to the number of
then outstanding Class A Shares times $1.25 per share.
5. In the event that the Reorganized Debtor sells its PC Card business
subsequent to the Effective Date, the Creditor Trustee shall be
entitled to receive, on account of the Class A Shares, the net
proceeds of sale up to an amount equal to the number of then
outstanding Class A Shares times the applicable per share redemption
price.
6. Notwithstanding Paragraphs 1 through 5 above, the Creditor Trustee
shall only be entitled to receive from the Reorganized Debtor under
the Plan an amount equal to the lesser of (i) 100% of the total amount
of Allowed Class 3 Claims or (ii) $6,500,000 (the "Total Class 3
Distribution"). Once the Total Class 3 Distribution is made (i) the
Reorganized Debtor will have no further obligations to the Creditor
Trustee or the holders of Allowed Class 3 Claims; (ii) all then
outstanding Class A Shares may be redeemed for a total of $1; and
(iii) all Avoidance Actions will be pursued for the sole and exclusive
benefit of
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the Reorganized Debtor. For example, if the total Allowed Amount of
Class 3 Claims is $5,850,000 and the Creditor Trustee has received
$5,000,000 as of the second anniversary of the Effective Date, then
the Reorganized Debtor may redeem all then outstanding Class A Shares
for $850,000, notwithstanding its obligation to pay $1.25 per share.
5.2 CAPITALIZATION OF THE REORGANIZED DEBTOR AND INITIAL FUNDING OF THE
CREDITOR TRUST -- On or before the Effective Date or, if required, prior to the
Confirmation Date, the New Investors shall make a capital contribution to the
Reorganized Debtor in the total sum of $2,500,000 in exchange for which the
Reorganized Debtor will issue 2,500,000 shares of Class B preferred stock. The
Class B Shares will be convertible into as much as 50% of the Subsidiary's
common stock, BUT ONLY after the Class A preferred stock is redeemed by the
Reorganized Debtor.
From the $2,500,000 contributed by the New Investors, as well as from any
cash on hand, the Reorganized Debtor shall make the following disbursements on
the Effective Date:
(a) Payments in the Allowed Amount of all unpaid Administrative Claims
and Court-approved professional fees and expenses incurred during the
Debtor's Chapter 11 proceeding or payments to the holders of Allowed
Administrative Claims in accordance with such agreements for waiver,
deferral or installments as may be agreed to by the parties and
approved by the Court;
(b) Any payment(s) required to be made to SVB;
(c) The Initial Cash Distribution to the Creditor Trust;
(d) Payments to taxing authorities, pursuant to section 4.2 of the
Plan, if and as applicable; and
(e) The balance to be used by the Reorganized Debtor as working
capital.
5.3 CONDITIONS TO THE EFFECTIVE DATE -- The Effective Date of the Plan
shall be conditioned upon:
(a) The Debtor obtaining binding commitments from the New Investors,
upon terms and conditions acceptable to the Debtor, to provide the
Reorganized Debtor with equity financing in an aggregate amount not
less than $2,500,000;
(b) Entry of a final and non-appealable Order confirming the Debtor's
Chapter 11 Plan; PROVIDED, HOWEVER, that the Reorganized Debtor can,
in its sole discretion, waive this condition in the event that an
appeal from the Confirmation Order is taken.
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5.4 OPERATION OF BUSINESS/MANAGEMENT OF REORGANIZED DEBTOR
(a) On the Effective Date, the Reorganized Debtor will enter into new
employment agreements (the "Executive Employment Agreements") with (i)
Frank Sola, who shall serve as the Chief Executive Officer of the
Reorganized Debtor and (ii) Stephen Burke, who shall serve as the
Chief Financial Officer of the Reorganized Debtor. Each of the
Executive Employment Agreements shall be for an initial term of three
years and shall require payment of customary benefits and annual
salaries to Frank Sola in the sum of $180,000 and to Stephen Burke in
the sum of $125,000. The Executive Employment Agreement shall provide
for 10% annual increases in base salary and incentive bonuses in
amounts to be determined by the Reorganized Debtor's Board of
Directors. In addition, the Executive Employment Agreements will
contain provisions requiring that each executive be paid an amount
equal to two times his annual salary if he is terminated other than
for "cause".
(b) The Reorganized Debtor's Board of Directors will initially consist
of Frank Sola, Stephen A. Burke, Robert Goldman, the Creditor Trustee
and one person chosen by a majority of the Class B shareholders.
Directors of the Reorganized Debtor shall serve an initial term of
three years and shall be elected annually thereafter.
(c) On the Effective Date, the Debtor's charter and/or bylaws will be
amended to specifically authorize the restructuring contemplated
hereby and, in particular, to authorize the issuance of the Class A
Shares, the Class B Shares, the Reorganized Debtor's Common Stock and
such other debt and equity securities as may be necessary, from time
to time, thereafter.
(d) On the Effective Date, the Reorganized Debtor's Common Stock will
be issued to or reserved for Frank Sola, Stephen Burke and certain key
employees.
5.5 OBJECTIONS TO CLAIMS -- As of the Confirmation Date, the exclusive
right to object to all claims against the Debtor shall vest with the Reorganized
Debtor; PROVIDED, HOWEVER, that nothing contained herein shall be deemed to
prohibit any party in interest from applying to the Court for permission to
object to any claim, and to object to such claim if such application is granted
by a Final Order, upon a showing that the Reorganized Debtor has not fulfilled
its duty with respect to the proposed objection. All such objections to claims
shall be filed and served not later than ninety (90) days after the Effective
Date.
5.6 RETAINED CAUSES OF ACTION AND RELEASES -- All causes of action of the
Debtor including, without limitation, avoidance and preference actions pursuant
to sections 544 through 552 of the Code, if any, shall be preserved and vested
in the Reorganized Debtor. Pursuant to section 1123(b)(3)(B) of the Code and
section 5.1 hereof, the Creditor Trustee shall be appointed to serve as the
estate representative to Avoidance Actions. Avoidance Actions shall not include
the Microsoft Claim. Nothing in the Plan shall be construed to
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require the Creditor Trustee to commence any such action. Subject to section
5.1.5 hereof, the proceeds of all Avoidance Actions, net of related expenses
including reasonable attorneys' fees, shall be retained by the Creditor Trustee
for the benefit of holders of Allowed Class 3 Claims.
ARTICLE VI
EXECUTORY CONTRACTS
6.1 ASSUMED CONTRACTS -- Those executory contracts and unexpired leases
identified in EXHIBIT A hereto which will be filed by the Debtor and served upon
all creditors and parties in interest at least seven (7) days prior to the
Confirmation Hearing, shall be deemed to have been assumed by the Debtor in
accordance with section 365 of the Code. The Debtor reserves the right to
request Court approval of any additional executory contracts prior to the
Confirmation Date.
6.2 REJECTED CONTRACTS -- All executory contracts and unexpired leases
which have not been assumed prior to the Confirmation Date, with Court approval
or pursuant to section 6.1 hereof, shall be deemed to have been rejected by the
Debtor in accordance with section 365 of the Code.
6.3 CLAIMS ARISING FROM REJECTION -- Any claim for damages arising by
reason of the rejection of any executory contract or unexpired lease shall be
evidenced by a proof of claim which must be filed with the Court on or before
the Effective Date.
ARTICLE VII
DISCHARGE
7.1 DISCHARGE -- In accordance with section 1141(d)(1) of the Code and
except as otherwise provided in the Plan or in the Order confirming the Plan,
entry of the Confirmation Order shall act as a discharge as of the Effective
Date of any and all claims against the Debtor or shareholders of the Debtor,
with respect to such stock ownership, that arose at any time before the entry of
the Confirmation Order including, but not limited to, all principal and interest
on such claims, whether arising or accruing before or after the Petition Date.
ARTICLE VIII
RETENTION OF JURISDICTION
8.1 After the Confirmation Date, and until the Reorganized Debtor's
bankruptcy proceeding is closed, the Court shall retain jurisdiction until the
final allowance or disallowance of all claims, the disposition of all property
of the estate, and for the following limited purposes:
a) To enforce any order, judgment, or ruling previously entered
herein;
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b) To interpret or construe the Plan and any and all provisions
thereof or any order previously entered herein;
c) To ensure that the purpose and intent of the Plan are effectuated;
d) To adjudicate any and all claims and controversies regarding the
Plan;
e) To hear and determine all claims against the Debtor or against
property of the estate or any and all objections to allowance of
such claims which are not settled or adjudicated prior to
confirmation and to determine participation, if any, under the
Plan;
f) To hear and determine any and all applications, adversary
proceedings and contested matters properly pending on the date the
Plan is confirmed or properly brought thereafter;
g) To hear and determine any and all claims arising from assumption or
rejection of executory contracts, and to consummate such rejection
or assumption;
h) To adjudicate all controversies concerning the classification of
claims;
i) To liquidate damages in connection with any disputed, contingent,
or unliquidated claim;
j) To adjudicate all claims of a security or ownership interest in any
property of the estate or in any proceeds thereof;
k) To adjudicate any claim or controversy arising out of any purchase,
sale, or contract made or undertaken by the Debtor during its
Chapter 11 proceeding;
l) To modify any provision of the Plan to the full extent permitted by
the Code;
m) For any other purpose specifically set forth in the Confirmation
Order;
n) To enter such other orders, findings, or other determinations as is
necessary or appropriate to effectuate the provisions of the Plan;
and
o) To enter a final decree closing the Chapter 11 case.
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ARTICLE IX
MISCELLANEOUS
9.1 PAYMENT DATES -- Whenever any payment or distribution to be made under
the Plan shall be due on a Saturday, Sunday, or legal holiday, such payment or
distribution shall instead be made, without interest, on the immediately
following day which is not a Saturday, Sunday or legal holiday.
9.2 HEADINGS -- The headings used in the Plan are inserted for convenience
only and neither constitute a portion of this Plan nor in any manner affect the
construction of the provisions of this Plan.
9.3 CONSTRUCTION -- The rules of construction set forth in section 102 of
the Code shall apply to construction of the Plan.
9.4 SEVERABILITY -- Should any provision in the Plan be determined to be
unenforceable following the Effective Date, such determination shall in no way
limit or affect the enforceability and operative effect of any and all other
provisions of this Plan.
9.5 REVOCATIONS -- The Debtor reserves the right to revoke or withdraw the
Plan prior to the Confirmation Date.
9.6 TIME -- In computing any period of time prescribed or allowed by this
Plan, the day of the act, event, or default from which the designated period of
time begins to run shall not be included. The last day of the period so computed
shall be included, unless it is not a Business Day or, when the act to be done
is the filing of a paper in court, a day on which weather or other conditions
have made the clerk's office inaccessible, in which event the period runs until
the end of the next day which is not one of the aforementioned days. When the
period of time prescribed or allowed is less than eight calendar days,
intermediate days that are not Business Days shall be excluded in the
computation.
9.7 AMENDMENTS TO PLAN -- This Plan may be amended, modified, or
supplemented by the Debtor or the Reorganized Debtor before or after the
Confirmation Date in the manner provided for by section 1127 of the Code.
9.8 NO INTEREST -- Except as expressly stated in this Plan, or allowed by
a Final Order of the Court, no interest, penalty, or late charge is allowed on
any Claim or Interest subsequent to the Petition Date.
9.9 NO ATTORNEYS' FEES -- Except as may be required with respect to any
oversecured creditor entitled to such fees under section 506 of the Code, no
attorneys' fees shall be paid with respect to any Claim or Interest except as
specified herein or as allowed by a Final Order of the Court.
9.10 AMOUNTS OF CLAIMS AND INTERESTS -- All references to Claims and
Interests and amounts of Claims and Interests refer to the amount of the Claim
or Interest allowed by Final
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Order by the Court or by the Plan. Claims and Interests which have been objected
to and which have not been allowed or disallowed prior to the day set for return
of ballots shall not be entitled to be voted and be counted unless the claimant
has obtained an Order of the Court estimating the claim for purposes of voting
on the Plan. Subject to Article V, section 5.5 of the Plan, the Debtor reserves
the right, for both the Debtor and all interested parties, both before and after
the Confirmation Date, to object to Claims and Interests so as to have the Court
determine the Allowed Amount of such Claim or Interest to be paid under this
Plan.
9.11 NO WAIVER OF DISCHARGE -- Except as otherwise specifically provided
herein, nothing in the Plan shall be deemed to waive, limit, or restrict in any
way the discharge granted upon confirmation of the Plan in section 1141 of the
Code.
9.12 WAIVER OF SUBORDINATION -- Except as specifically set forth in the
Plan, all creditors and holders of interests in the Debtor shall be deemed to
have waived any and all equitable and contractual subordination rights which
they may have with respect to the distributions made pursuant to the Plan, and
the Court in the Confirmation Order shall permanently enjoin, as of the
Effective Date, all Creditors and Interest Holders from enforcing or attempting
to enforce any such rights against any person receiving distributions under the
Plan.
9.13 GOVERNING LAW -- Except to the extent that the Code or other federal
law is applicable, the rights, duties and obligations arising under this Plan
shall be governed by, and construed and enforced in accordance with, the laws of
the Commonwealth of Massachusetts.
9.14 SUCCESSORS AND ASSIGNS -- The rights, duties and obligations of any
person named or referred to in the Plan shall be binding upon, and shall inure
to the benefit of the successors and assigns of such person.
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SYSTEMSOFT CORPORATION
By: /s/ Frank Sola
-----------------------------
Frank Sola
Chief Executive Officer
Counsel to the Debtor,
Charles A. Dale III
-------------------------------
Charles A. Dale III BBO# 558839
Elisabeth Schreuer BBO# 637583
GADSBY & HANNAH LLP
225 Franklin Street
Boston, MA 02110
(617) 345-7064
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EXHIBIT A
A Schedule of Executory Contracts is to be furnished by the Debtor at
least seven (7) days prior to the Confirmation Hearing.
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