Exhibit 99.4
UNITED STATES BANKRUPTCY COURT
DISTRICT OF MASSACHUSETTS
EASTERN DIVISION
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)
In the matter of ) Chapter 11
) Case No. 03-12309 CJK
WELLS-CTI, INC. )
)
Debtor-in-Possession )
)
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PLAN OF REORGANIZATION OF WELLS-CTI, INC.
April 7, 2003
Debtor-in-possession Wells-CTI, Inc. proposes this Plan of
Reorganization pursuant to Chapter 11 of the Bankruptcy Code.(1)
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(1) A term used but not defined in Article I of this Plan and that is used in
the Bankruptcy Code shall have the meaning assigned to it in the Bankruptcy
Code, unless the context otherwise requires.
ARTICLE I
DEFINITIONS
The following terms, when used in the Plan or any subsequent amendments
or modifications thereof, shall have the meanings set forth below:
1.1 "Administrative Expense Claim" means any right to payment
constituting a cost or expense of administration of the Chapter 11 Case Allowed
under sections 503(b) and 507(a) of the Bankruptcy Code, including without
limitation, (a) any actual and necessary costs and expenses of preserving the
Estate of the Debtor, (b) any actual and necessary costs and expenses of
operating the business of the Debtor, (c) any indebtedness or obligations
incurred or assumed by the Debtor in the ordinary course of business in
connection with the conduct of its business, (d) claims for reclamation Allowed
in accordance with section 546(c)(2) of the Bankruptcy Code pursuant to a Final
Order, (e) any Professional Fees, whether fixed before or after the Effective
Date, and (f) any fees or charges assessed against and payable by the Estate of
the Debtor under section 1930, title 28, United States Code, including
post-Confirmation Date and post-Effective Date fees and charges.
1.2 "Allowed" means, with reference to any Claim (including any
Administrative Expense Claim) or Equity Interest, (a) any Claim against or
Equity Interest in the Debtor, proof of which was filed within the applicable
period of limitation fixed by the Bankruptcy Court in accordance with Rule
3003(c)(3) of the Bankruptcy Rules (i) as to which no objection to the allowance
thereof, or action to equitably subordinate or otherwise limit recovery with
respect thereto, has been interposed within the applicable period of limitation
fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules or a Final Order,
(ii) as to which no action has been commenced to avoid such Claim or Equity
Interest within the applicable period of limitation fixed by the Plan, or (iii)
as to which an objection has been interposed, to the extent such Claim or Equity
Interest has been allowed (whether in whole or in part) by a Final Order, (b) if
no proof of Claim was so filed (or as to which the applicable proof of Claim has
been withdrawn of disallowed), any Claim against the Debtor which has been
listed by the Debtor in its Schedules, as such Schedules may be amended from
time to time in accordance with Rule 1009 of the Bankruptcy Rules prior to the
closing of the Chapter 11 Case, as liquidated in amount and not disputed or
contingent, (c) if no proof of Equity Interest was so filed, any Equity Interest
listed in the consolidated stockholders list maintained by the Debtor as of the
Confirmation Date, (d) any Claim arising from the recovery of property under
sections 550 or 553 of the Bankruptcy Code and allowed in accordance with
section 502(h) of the Bankruptcy Code, (e) any Claim allowed under or pursuant
to the terms of the Plan or (f) any Claim to the extent that it has been allowed
by a Final Order; provided, however, that Claims allowed solely for the purpose
of voting to accept or reject the Plan pursuant to an order of the Bankruptcy
Court shall not be considered "Allowed Claims" hereunder. Unless otherwise
specified herein or by order of the Bankruptcy Court, "Allowed Claims" shall
not, for any purpose under the Plan, include interest, penalties or late charges
on such Claims from and after the Petition Date. In addition, "Allowed Claim"
shall
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not include any Claim subject to disallowance in accordance with section 502(d)
of the Bankruptcy Code.
1.3 "Approval Date" means the date of entry of a Final Order of
the Bankruptcy Court approving the Disclosure Statement.
1.4 "Assets" has the meaning ascribed under the Asset Purchase
Agreement.
1.5 "Asset Purchase Agreement" means that Asset Purchase Agreement
between the Debtor, PCD, Inc., the Buyer, and UMD Technology, Inc. dated as of
March 21, 2003, as amended, attached as Exhibit A hereto.
1.6 "Bankruptcy Code" means title 11 of the United States Code, as
amended from time to time, as applicable to the Chapter 11 Case, as in effect on
the Confirmation Date.
1.7 "Bankruptcy Court" means the United States Bankruptcy Court
for the District of Massachusetts having jurisdiction over the Chapter 11 Case
and, to the extent of any reference under section 157 of title 28 of the United
States Code, the unit of such District Court under section 151 of title 28 of
the United States Code.
1.8 "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure as promulgated by the United States Supreme Court under section 2075,
title 28, United States Code, and the Local Rules of the Bankruptcy Court, as
amended from time to time and applicable to the Chapter 11 Case.
1.9 "Business Day" means any day other than (i) a Saturday, (ii) a
Sunday, (iii) any other day on which banking institutions in Boston,
Massachusetts are required or authorized to close by law or executive order, and
(iv) the Friday after Thanksgiving.
1.10 "Buyer" means Kabushiki Wells-CTI, LLC, an Oregon limited
liability company.
1.11 "Chapter 11 Case" means the Chapter 11 case of Wells-CTI, Inc.
1.12 "Claim" means any claim against the Debtor as defined in
section 101(5) of the Bankruptcy Code.
1.13 "Class 1 Creditors" means those creditors holding Allowed
Claims in Class 1 of the Plan.
1.14 "Class 1 Creditor Payment Amount" means the greater of (i) 98%
of the Sale Proceeds or (ii) $1,980,000, payable to Fleet as agent for the Class
1 Creditors.
1.15 "Class 2 Claim" means an Allowed Claim in Class 2 of the Plan.
1.16 "Class 2 Creditor Reserve" means the funds set aside on the
Closing Date (as that
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term is defined in the Asset Purchase Agreement) from the Sale Proceeds to pay
in full the principal amounts of all Allowed Class 2 Claims.
1.17 "Common Stock" means the common stock of Wells-CTI, Inc.,
authorized and outstanding on the Petition Date, including all rights, claims
and interests attendant thereto.
1.18 "Confirmation Date" means the date the Bankruptcy Court enters
the Confirmation Order.
1.19 "Confirmation Hearing" means the hearing held by the
Bankruptcy Court pursuant to section 1128(a) of the Bankruptcy Code on
confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code, as it
may be adjourned or continued from time to time.
1.20 "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan.
1.21 "Creditors' Committee" means, the Official Committee of
Unsecured Creditors appointed by the U.S. Trustee in the Chapter 11 Case.
1.22 "Debtor" means Wells-CTI, Inc.
1.23 "Debtor in Possession" means the Debtor in its capacity as a
debtor in possession in the Chapter 11 Case under sections 1107(a) and 1108 of
the Bankruptcy Code.
1.24 "Debtor Reserve" means any cash of the Debtor on hand as of
the Effective Date or received thereafter (other than Sale Proceeds), plus
$17,568.53 set aside from the Sale Proceeds to fund the winding down of the
Debtor's affairs.
1.25 "Disallowed Claim" means (a) a Claim, or any portion thereof,
that has been disallowed by a Final Order or (b) unless scheduled by the Debtor
as a fixed, liquidated, non-contingent and undisputed Claim, a Claim as to which
a proof of Claim bar date has been established by the Bankruptcy Code,
Bankruptcy Rules or Final Order but no proof of Claim has been timely filed or
deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy
Code or a Final Order.
1.26 "Disclosure Statement" means the Disclosure Statement for the
Plan approved by the Bankruptcy Court on the Approval Date.
1.27 "Disputed Claim" means a Claim, or any portion thereof, that
is neither an Allowed Claim nor a Disallowed Claim. The Debtor currently does
not believe that any Disputed Claims exist.
1.28 "Disputed Claim Reserve" means the reserve of money that would
be payable to or receivable by the holders of Disputed Claims, if any, in the
event such Claims are Allowed.
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1.29 "Effective Date" means the date selected by the Debtor, which
date shall be no later than the tenth (10th) Business Day after the date on
which the conditions specified in Article IX have been satisfied.
1.30 "Equity Interest" means, as of the Petition Date, any capital
stock or other ownership interest in the Debtor, whether or not transferable,
and any option, call, warrant or right to purchase, sell or subscribe for
ownership interest or other equity security in the Debtor, including, but not
limited to, (i) the Common Stock and any options, warrants or other rights to
purchase Common Stock, whenever granted; and (ii) redemption, conversion,
exchange, voting, participation, dividend rights and liquidation preferences
relating to such Common Stock, options, warrants or other rights to purchase
Common Stock.
1.31 "Estate" means, as to the Debtor, the estate of the Debtor in
the Chapter 11 Case created by section 541 of the Bankruptcy Code upon
commencement of such Chapter 11 Case.
1.32 "Final Order" means an order of the Bankruptcy Court (a) as to
which the time to appeal, petition for certiorari, or move for reargument,
rehearing or new trial has expired and as to which no appeal, petition for
certiorari, or other proceedings for reargument, rehearing or new trial shall
then be pending; (b) as to which any right to appeal, petition for certiorari,
reargue, rehear or retry shall have been waived in writing in form and substance
satisfactory to the Debtor; or (c) in the event that an appeal, writ of
certiorari, reargument, rehearing or new trial has been sought, as to which (i)
such order of the Bankruptcy Court shall have been affirmed by the highest court
to which such order was appealed; (ii) certiorari has been denied as to such
order; (iii) reargument or rehearing or new trial from such order shall have
been denied, and the time to take any further appeal, petition for certiorari or
move for reargument, rehearing or new trial shall have expired without such
actions having been taken or (iv) with respect to the Confirmation Order, as to
which no stay pending appeal, or like relief, has been granted.
1.33 "Fleet" means Fleet National Bank.
1.34 "Petition Date" means March 21, 2003, the date on which the
Debtor filed the chapter 11 petition and commenced the Chapter 11 Case.
1.35 "Plan" means this Plan of Reorganization of Wells-CTI, Inc.,
including the schedules and exhibits hereto, either in its present form or as
the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof.
1.36 "Priority Employee Claims" means all Claims entitled to
priority pursuant to Bankruptcy Code sections 507(a)(3) and 507(a)(4).
1.37 "Priority Tax Claim" means any Claim of a governmental unit of
the kind specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.38 "Professional Fees" means any Claim of a professional,
retained in the Chapter 11 Case, pursuant to sections 327 or 1103 of the
Bankruptcy Code or otherwise, for compensation or
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reimbursement of costs and expenses relating to services incurred prior to and
including the Effective Date, when and to the extent any such Claim is Allowed
by the Bankruptcy Court pursuant to sections 330, 331, 503(b), or 1103 of the
Bankruptcy Code.
1.39 "Sale Order" means the Order Allowing Debtor's Motion for Sale
of Assets Free and Clear of Liens and Encumbrances under 11 U.S.C.ss.363(f).
1.40 "Sale Proceeds" means the Cash Consideration (as such term is
defined in the Asset Purchase Agreement).
1.41 "Schedules" means the schedules of assets and liabilities and
the statements of financial affairs filed with the Bankruptcy Court on or about
March 21, 2003, by the Debtor under section 521 of the Bankruptcy Code and the
Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and
statements have been or may be supplemented or amended from time to time.
1.42 "Secured Loan Agreement" means that certain Amended and
Restated Loan Agreement By and Among PCD Inc. and Fleet National Bank, as
Collateral Agent, Administrative Agent and a Lender and The Other Financial
Institutions Now or Hereafter Parties Hereto, dated February 27, 2002, as
amended.
1.43 "United States Trustee" means the United States Trustee
appointed under section 591, title 28, United States Code to serve in the
Eastern District of Massachusetts.
1.44 "Unclassified Claims" means, collectively, all Administrative
Expense Claims, all Priority Employee Claims, and all Priority Tax Claims.
1.45 "Unsecured Claim" means any Claim against the Debtor that is
not an Administrative Expense Claim, Secured Claim, Priority Tax Claim, or a
Priority Employee Claim.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
For purposes of all confirmation issues, including, without limitation,
voting, confirmation and distribution, except as otherwise provided herein, all
Claims against the Debtor and Equity Interests in the Debtor are classified as
follows:
A. Unclassified Claims. Unclassified claims are Allowed
Administrative Expense Claims, Allowed Priority Employee
Claims, and Allowed Priority Tax Claims.
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B. Classified Claims.
Class 1. This Class consists of all Allowed Claims of
the lenders under the Secured Loan Agreement,
subdivided as follows:
Class 1A. This Class consists of the Allowed
Secured Claim of Fleet National Bank.
Class 1B. This Class consists of the Allowed
Secured Claim of Citizens Bank of
Massachusetts.
Class 1C. This Class consists of the Allowed
Secured Claim of Comerica Bank - California.
Class 1D. This Class consists of the Allowed
Secured Claim of First Union National Bank.
Class 1E. This Class consists of the Allowed
Secured Claim of Eastern Bank.
Class 1F. This Class consists of the Allowed
Secured Claim of Restoration Funding CLO,
Ltd.
Class 1G. This Class consists of the Allowed
Secured Claim of First Source Loan
Obligations Trust.
Class 2. This Class consists of all Allowed Unsecured
Claims other than Unclassified Claims.
C. Equity Interests.
Class 3. This Class consists of all holders of Equity
Interests.
ARTICLE III - TREATMENT OF CLAIMS AND EQUITY INTERESTS
A. Unclassified Claims.
1. Administrative Expense Claims. Each holder of an Allowed
Administrative Expense Claim against the Debtor shall be paid in cash in full by
or on behalf of the Debtor, or the successor(s) in interest thereto, (a) upon
the later of (i) the Effective Date, or as soon as practicable thereafter or
(ii) as soon as practicable after such Claim becomes an Allowed Administrative
Expense Claim, if the date of allowance is later than the Effective Date, (b)
upon such other terms as may be mutually agreed upon between such holder of an
Allowed Administrative Expense Claim and the Debtor, or (c) according to the
ordinary business terms of the Debtor and such holder; provided, however, that
all post-Effective Date Professional Fees
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shall be paid by the Debtor within ten (10) Business Days of the submission of
an invoice to the Debtor. In the event that the Debtor objects to the payment of
a Professional's post-Effective Date invoice, in whole or part, and the parties
cannot resolve such objection after good faith negotiation, the Bankruptcy Court
shall retain jurisdiction to review the disputed invoice and make a
determination as to the extent to which the invoice shall be paid by the Debtor.
2. Priority Employee Claims. All Allowed Priority Employee
Claims, if any, shall be paid in full in cash by the Debtor on the later of the
Effective Date or seven (7) days following the date of a Final Order Allowing
such Claim.
3. Priority Tax Claims. Allowed Priority Tax Claims shall be paid
(a) in cash, in full, on the Effective Date, or as soon as practicable
thereafter, or as soon as practicable after such Claim becomes an Allowed Claim
if the date of allowance is later than the Effective Date, or (b) in such
amounts and on such other terms as may be agreed on between the holder of any
such Claim and the Debtor in full satisfaction, settlement, release and
discharge of and in exchange for such Allowed Priority Tax Claim.
B. Classified Claims.
Class 1 (Secured Claims)
The Claims in Class 1 are impaired. Subject to the Bankruptcy Court's
approval of the Sale OrderFleet, as agent for the Class 1 Creditors, already
will have received under the Sale Order the Class 1 Creditor Payment Amount. On
or about the Effective Date, Fleet, as agent shall also receive (i) any funds
remaining in the Debtor's Reserve and any other property held by the Debtor
after payment of all Allowed Claims and expenses in accordance with Article VI,
(ii) any amounts remaining in the Class 2 Creditor Reserve after payment in full
of the Class 2 Claims and (iii) any residual interest or right to payment
otherwise provided for herein, including without limitation as provided in
Article V. These payments to the Class 1 Creditors collectively, shall be in
full satisfaction, settlement, release and discharge of and in exchange for all
Allowed Class 1 Claims.
Class 2 (General Unsecured Claims).
The Claims in Class 2 are impaired. Ten (10) days following the later
of the Effective Date or the date upon which a Class 2 Claim becomes an Allowed
Claim, each holder of an Allowed Class 2 Claim shall receive from the Class 1
Creditor Reserve in full satisfaction, settlement, release, and discharge of and
in exchange for that Allowed Claim a cash payment in an amount equal to 100% of
the principal amount of such holder's Allowed Class 2 Claim. The Class 1
Creditors are waiving the right to receive any distribution under Class 2 on
account of deficiency claims under the Secured Loan Agreement, except as
otherwise expressly provided in this Plan.
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C. Equity Interests
Class 3 (Equity Interests).
The Equity Interests in Class 3 are impaired. The holders of Equity
Interests shall receive nothing for their interests or potential interests in
the Debtor.
ARTICLE IV - IMPAIRED AND UNIMPAIRED CLASSES OF CLAIMS AND EQUITY
INTERESTS UNDER THE PLAN; ACCEPTANCE OR REJECTION OF THE PLAN
A. Holders of Claims and Equity Interests Entitled to Vote.
1. Each holder of an Allowed Claim or Allowed Equity Interest,
or the holder of a Claim or Equity Interest that has been temporarily allowed
for voting purposes only under Bankruptcy Rule 3018(a), in an impaired Class of
Claims against or Equity Interest in the Debtor, shall be entitled to vote
separately to accept or reject the Plan. Any unimpaired Class of Claims shall be
deemed to have accepted the Plan. Any Class of Claims or Equity Interests that
will not receive or retain any property on account of such Claims or Equity
Interests under the Plan shall be deemed to have rejected the Plan.
2. Class 1 and Class 2 are impaired hereunder and the holders
of Allowed Claims in those Classes are entitled to vote on the Plan. The holders
of Class 3 Equity Interests shall be deemed to have rejected the Plan.
B. Non-consensual Confirmation. In the event that either Class 1
or Class 2 fails to accept the Plan, the Debtor reserves its right to modify the
Plan in accordance with Section IV(A)(2)(D) hereof.
C. Revocation of the Plan. The Debtor may revoke and withdraw the
Plan at any time prior to entry of the Confirmation Order. If the Plan is so
revoked or withdrawn, then it shall be deemed null and void.
D. Modification of Plan. The Debtor reserves the right, in
accordance with the Bankruptcy Code, to amend or modify the Plan prior to the
entry of the Confirmation Order. After the entry of the Confirmation Order, the
Debtormay, upon order of the Bankruptcy Court, amend or modify the Plan, in
accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or
omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan.
ARTICLE V - LIQUIDATION
A. Prior to the Effective Date, the Debtor shall have transferred
to the Buyer all of the Debtor's right, title and interest to the Assets, free
of all liens, claims and encumbrance, in
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accordance with the terms and conditions of the Asset Purchase Agreement
attached as Exhibit A, in exchange for which the Buyer shall, inter alia, pay to
the Debtor the Sale Proceeds.
B. On the Effective Date, (i) all securities, equity interests,
notes, bonds, indentures, and other instruments or documents evidencing or
creating any indebtedness, Equity Interest or obligation of the Debtor shall be
as against the Debtor and its successor extinguished and canceled, and (ii) the
obligations of the Debtor under any agreements, indenture or certificates of
designation governing any securities, equity interests, notes, bonds, indentures
and other instruments or documents creating any indebtedness, Equity Interest or
obligation of the Debtor, as the case may be, shall be discharged.
C. At the time set forth in Article III, the Debtor shall, after
funding the Disputed Claims Reserve and the Debtors' Reserve, (a) pay from the
Sale Proceeds to Fleet, as agent under the Secured Loan Agreement, the Class 1
Creditor Payment Amount (if such amount was not already paid to Fleet pursuant
to the Sale Order) in full satisfaction of the Class 1 Creditors' claims under
the Secured Loan Agreement (without waiver of rights of the Class 1 Creditors to
post-Effective Date payments in accordance with this Plan, including without
limitation as provided in Article III(B), this Article V and Article VIII); (b)
pay in full all Unclassified Claims and all Classified Claims in accordance with
Article III. Following the payment of all Claims in accordance with Article III,
all funds remaining in the Debtor' Reserve and all other property of the Debtor
shall revert to Fleet as agent for the Class 1 Creditors.
1. Mechanics for Distributions.
(a) Address for Mailing Distributions. Subject to Bankruptcy
Rule 9010, and except as otherwise provided herein,
distributions to holders of Allowed Claims shall be made at
the address of each of such holder as set forth in the
Schedules filed with the Bankruptcy Court unless superseded by
the address set forth on proofs of Claim filed by such holder
(or at the last known address of such holders if no proof of
Claim or proof of Equity Interest is filed or if the Debtor
has been notified in writing of a change of address). If any
distribution to any holder of an Allowed Unsecured Claim is
returned as undeliverable, the Debtor shall use reasonable
efforts to determine the current address of such holder, but
no distribution to any such holder shall be made unless and
until the Debtor has determined the then current address of
such holder, at which time such distribution to such holder
shall be made to such holder without interest.
(b) Time Bar to Cash Payments by Check. The Debtor is
authorized to stop payment on any payment made to a holder of
an Allowed Class 2 Claim if said payment is not cashed within
180 days after the date on which the payment was mailed.
Provided that the Debtor has made a reasonable effort to
locate a holder who has failed to cash a payment, the failure
to cash a payment within 180 days after its mailing shall be
deemed a waiver of any of the holder's remaining claims
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against the Debtor, and the funds represented by that payment
shall, revert to the Debtor to be distributed to Fleet.
(c) Untimely Claims. Except as otherwise expressly provided in
this Plan, any Claim not deemed filed pursuant to section
1111(a) of the Bankruptcy Code or timely filed pursuant to the
Bankruptcy Code, Bankruptcy Rules or any applicable order of
the Bankruptcy Court, shall (a) not be treated as an Allowed
Claim and (b) expunged from the Claims register in the Chapter
11 Case without need for any further notice, motion or order.
(d) No Distributions in Excess of Allowed Amount of Claim.
Notwithstanding anything to the contrary herein, no holder of
an Allowed Claim shall receive in respect of such Claim any
distribution in excess of the Allowed Amount of such Claim. In
the event there are funds remaining after payment in full of
all Allowed Claims, such funds shall be paid to Fleet, as
agent for the Class 1 Creditors.
2. Reports. In addition to the requirements of Article X, the
Debtor shall file on a quarterly basis with the Bankruptcy
Court, Fleet, and the United States Trustee and any other
party in interest who has delivered to the Debtor a written
request for such reports an unaudited report and account
showing the assets and liabilities of the Debtor at the end of
such quarter or upon dissolution.
D. Following all distributions from the Debtor's Estate required
under this Plan, the Debtor shall be dissolved and all funds and propoerty
remaining in the Debtor shall revert to Fleet as agent for the Class 1
Creditors.
ARTICLE VI - TREATMENT OF
DISPUTED AND CONTINGENT CLAIMS
A. Objections to Claims.
From and after the Effective Date, the Debtor shall be solely
responsible for filing objections to Disputed Claims and for prosecuting and, in
its sole discretion, settling such objections.
B. Disputed Claim Reserves.
The Debtor shall create a Disputed Claim Reserve from the Sale Proceeds
which shall consist of the money that would have been distributed on and after
the Effective Date from the Sale Proceeds to holders of Disputed Claims in Class
2 as if such Claims were Allowed, which reserve shall be allocable as provided
below for Disputed Claims in Class 2. The Debtor may request estimation for
every Disputed Claim in Class 2 in the face amount of $10,000 or more that is
unliquidated, and shall withhold a Disputed Claim Reserve based upon the
estimated amount of such Claim as set forth in an applicable Final Order. If the
Debtor elects not to
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request an estimation from the Bankruptcy Court with respect to a Disputed Claim
in Class 2, the Debtor shall, as to such Disputed Claim in Class 2, base the
reserve in the Disputed Claim Reserve on the face amount of such Disputed Claim
in Class 2.
C. Distributions After Allowance.
Distributions from the Disputed Claim Reserve in respect of a Disputed
Claim, to the extent that all or part of such Claim ultimately becomes Allowed,
shall be made in accordance with the provisions of the Plan governing the class
to which the respective holder belongs. After Final Orders have been entered, or
other final resolutions have been reached, with respect to all Disputed Claims
in Class 2, any money remaining in the Disputed Claim Reserves for Disputed
Claims in Class 2, less expenses, shall be distributed to Fleet as agent for the
Class 1 Creditors.
D. Interest on Claims.
Unless otherwise specifically provided for in the Plan or Confirmation
Order, or required by applicable bankruptcy law, interest shall not accrue on
Claims, and no holder of a Claim shall be entitled to interest accruing on or
after the Commencement Date on any Claim. Interest shall not accrue or be paid
upon any Disputed Claim in respect of the period from the Commencement Date to
the date a final distribution is made thereon if such Disputed Claim becomes an
Allowed Claim.
E. Fees and Expenses.
All fees and expenses incurred by the Debtor in connection with the
Disputed Claims shall be paid from the Debtors' Reserve. Any funds remaining in
the Debtors' Reserve after all fees and expenses have been paid shall be
distributed to Fleet as agent for the Class 1 Creditors.
ARTICLE VII - CONSEQUENCES OF CONFIRMATION OF THE PLAN
A. Property of the Estate.
As of the Effective Date, all property of the Estate shall be free and
clear of all claims and interests, except as specifically provided in the Plan
or the Confirmation Order. The Debtor shall establish the Debtor's Reserve to
pay all expenses associated with winding down the Debtor's affairs and the
Disputed Claim Reserve to fund payment of Disputed Claims that are subsequently
Allowed. Following the Effective Date, the Debtor may, without application to or
approval by the Bankruptcy Court, pay professional fees and expenses that it
will incur after the Effective Date in connection with its dissolution, using
funds from the Debtor's Reserve.
B. Claims Objections.
As provided in Article V and Article VI, the Debtor shall have the sole
authority to file and pursue objections to Disputed Claims. All fees and costs
incurred by the Debtor on or after
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the Confirmation Date in relation to the objections to Disputed Claims,
including any fees owed to the United States Trustee from and after the
Effective Date, shall be paid from the Debtors' Reserve, and all such
post-confirmation fees and costs may be paid without application to or order of
the Bankruptcy Court. Once all Disputed Claims are resolved, the Debtor shall be
responsible for closing the Chapter 11 Case. All expenses, fees and costs
related to the Chapter 11 Case from and after the Effective Date shall be paid
from the Debtors' Reserve. Any funds remaining after all fees and expenses have
been paid shall be distributed to Fleet as agent for the Class 1 Creditors.
C. Dissolution of Committees. As of the Effective Date, the
Official Committee of Unsecured Creditors shall be deemed dissolved, and fees
and costs incurred by the Committee or its professionals from and after the
Effective Date, other than those incurred to prepare final fee applications,
shall not be borne or paid by the Debtor.
D. Retiree Benefits. The Debtor has no retiree benefit plans,
fund, or programs, as defined in section 1114 of the Bankruptcy Code, for the
purpose of providing or reimbursing payments for retired employees and their
spouses and dependents for medical, surgical, or hospital care benefits, or
benefits in the event of sickness, accident, disability, or death under any
plan, fund or program (through the purchase of insurance or otherwise).
Accordingly, no payments relating to such retiree benefit plans, fund or
programs shall be made.
ARTICLE VIII - ASSUMPTION AND ASSIGNMENT OF EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
Any executory contract or unexpired lease which is not an Assumed
Contract (as that term is defined in the Asset Purchase Agreement) as of the
Confirmation Hearing, or which the Debtor has previously moved to reject, shall
be deemed rejected. If the rejection by the Debtor pursuant to the Plan, of an
executory contract or unexpired lease results in a Claim or Administrative
Expense Claim, then such Claim or Administrative Expense Claim shall be
discharged and barred forever and shall not be enforceable against the Debtor or
any of its property, unless a proof of Claim or proof of Administrative Expense
Claim is filed with the Clerk of the Bankruptcy Court and served upon counsel to
the Debtor and, as applicable, counsel to the Creditors' Committee within thirty
(30) days after the earlier to occur of (a) the Confirmation Date and (b) the
entry of an order by the Bankruptcy Court authorizing rejection of the subject
executory contract or unexpired lease.
ARTICLE IX - CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN
A. Conditions Precedent to Confirmation. It is a condition
precedent to confirmation of the Plan that:
1. The Asset Purchase Agreement shall have been approved
by a Final Order;
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2. The covenants of the Debtor under Section 4 of the
Asset Purchase Agreement shall have been satisfied; and
3. The conditions precedent to the Buyer's obligations
under Section 5 of the Asset Purchase Agreement shall have been
satisfied.
B. Conditions Precedent to Consummation. It is a condition
precedent to consummation of the Plan that the Confirmation Order shall be a
Final Order, and shall provide, among other things, that:
1. The Asset Purchase Agreement is authorized and
approved;
2. The provisions of the Confirmation Order are
nonseverable and mutually dependent;
3. The Debtor Reserve, the Disputed Claims Reserve (if
any) and the Class 2 Creditor Reserve shall have been funded in full
from the Sale Proceeds; and
4. The Class 1 Creditor Payment Amount had been received
by Fleet.
ARTICLE X - OBLIGATIONS TO THE UNITED STATES TRUSTEE
After the Effective Date, the Debtor will be responsible for timely
payment of fees incurred pursuant to 28 U.S.C. ss. 1930(a)(6). After the
Effective Date, the Debtor will serve the United States Trustee with a monthly
financial report for each month (or portion thereof) the Chapter 11 Case remains
open. The monthly financial report shall include the following:
A. a statement of all disbursements made from during the course
of the month, whether or not pursuant to the Plan;
B. a summary, by class, of amount distributed or property
transferred to each recipient under the Plan, and an
explanation of the failure to make any distributions or
transfers of property under the Plan;
C. the Debtor's projections as to its continuing ability to
comply wit the terms of the Plan;
D. a description of any other factors which may materially affect
the Debtor's ability to consummate the Plan; and
E. an estimated date when an application for final decree will be
filed with the Bankruptcy Court (in the case of the final
monthly report, the date the decree was filed).
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ARTICLE XI - RETENTION OF JURISDICTION
The Bankruptcy Court shall retain jurisdiction of the Reorganization
Case pursuant to the provisions of Chapter 11 of the Bankruptcy Code following
the Effective Date, for the following purposes:
1. To hear and determine estimates of and objections to Claims
and Interests;
2. To hear and determine any dispute arising under the Plan or
the Plan Documents, the implementation or execution of the
foregoing and any requests to amend, modify, or correct the
Plan or the Plan Documents;
3. To hear and determine motions for rejection, assumption or
assumption and assignment of executory contracts and unexpired
leases to which the Debtor is a party, and any Claims arising
therefrom;
4. To modify any of the deadlines set forth in the Confirmation
Order, as may be appropriate;
5. To enforce all discharge provisions under the Plan;
6. To hear and determine actions arising under Chapter 5 of the
Bankruptcy Code;
7. To hear any other matters not inconsistent with the Bankruptcy
Code; and
8. To enter a final decree closing the Chapter 11 Case.
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Wells-CTI, INC.
By: _________________________________
John L. Dwight, Jr. President
COUNSEL TO DEBTOR
Charles R. Dougherty
Anne L. Showalter
77A Revere Street
Boston, MA 02114
(617) 669-9003
DATED: April ___, 2003
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Exhibit A - Asset Purchase Agreement
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Exhibit B - Summary of Schedules and Exhibits
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