SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 19, 2004
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Progressive Software Holding, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
001-05513 06-0682273
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(Commission File Number) (IRS Employer Identification Number)
6836 Morrison Boulevard, Charlotte, NC 28211
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(Address of principal executive offices)
(406) 556-9886
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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)
Item 2. Acquisition or Disposition of Assets
On July 2, 2004, the Registrant notified ARK CLO 2000-1, Limited ("ARK") and
Zohar 2003-1, Limited (collectively, the "Lenders") under that certain Credit
Agreement, dated August 6, 2002 as amended (the "Credit Agreement") that it had
insufficient cash to make the required principal and interest payments due on
July 6, 2004. On July 6, 2004, Registrant received a notice of default from the
Lenders addressed to it and its wholly-owned subsidiary, Progressive Software,
Inc., as co-borrower under the Credit Agreement ("Progressive"), a copy of said
notice is attached as Exhibit 4 to that certain amended Schedule 13D filed by
Patriarch Partners, LLC with the Securities and Exchange Commission on July 28,
2004 (the "Patriarch Schedule 13D"). The notice indicated that Patriarch
Partners Agency Services, as agent for the Lenders, would seek to hold a secured
party public sale of all or substantially all of the assets of the Registrant
pursuant to Section 9-610 of the Uniform Commercial Code of New York.
In this notice, the Lenders proposed that if the Registrant agreed to the
secured party sale, the Lenders would undertake the following:
1. Fund the normal business expense of the Registrant in an amount not to
exceed $100,000 from the date of the notice to the date of the public sale.
2. Indemnify members of the board of directors of the borrowers relating to
the public sale.
3. Release the lien securing the obligations under the Credit Agreement only
if the successful bidder and purchaser at the public sale of all or
substantially all of the assets of the Registrant also assumed all of the
Registrant's disclosed liabilities except certain liabilities and assumed
all of the obligations of the Registrant to current employees.
Notice of said public sale was published in the national edition of the New York
Times on July 9, 2004. On July 19, 2004, pursuant to the terms and conditions of
that certain Asset Purchase Agreement, a copy of which is attached as Exhibit 5
to the Patriarch Schedule 13D, it was agreed that the assets of the Registrant
would be sold to SIVA Corporation pursuant to public sale for the purchase price
of $3,000,000 in cash, $2,250,000 in notes, warrants to purchase 4,166,667
shares of common stock of SIVA Corporation to be paid solely to the Lenders and
assumption of certain of Registrant's and Progressive's liabilities. The closing
of said sale is scheduled for August 6, 2004. Following the sale, the Registrant
will have no assets or operations.
Item 5. Other Events
As of July 6, 2004, ARK, as Series B Stockholder under the Registrant's
Stockholders Agreement, removed Lynn Tilton and Greg Murphy from the Board of
Directors of Directors of the Registrant and elected Christopher Sebes. Pursuant
to the terms of that certain Letter Agreement from ARK to Mr. Sebes dated July
6, 2004, a copy of which is attached as Exhibit 7 to the Patriarch Schedule 13D,
ARK agreed to grant Mr. Sebes certain indemnification rights in his capacity as
a Director of the Registrant and agreed that the "Change in Control" provisions
of his employment agreement with the Registrant would be deemed satisfied by (i)
the assumption by purchaser of the assets of the Registrant pursuant to the
public sale of Mr. Sebes' employment agreement and (ii) the payment by ARK to
Mr. Sebes of $175,000 on the effective date of the "Change in Control" (as
defined in said employment agreement).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Progressive Software Holding, Inc.
By: /s/ Christopher Sebes
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Christopher Sebes
Chief Executive Officer
Date: August 3, 2004
