Exhibit 10.01

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

 
 

IN RE:   §      §   HIPCRICKET, INC.1  § CASE NO. 15-10104-LSS    §   Debtor.  §
Chapter 11    §  

PLAN OF REORGANIZATION OF THE DEBTOR
DATED MARCH 20, 2015

 

 
Pachulski Stang Ziehl & Jones LLP
Ira D. Kharasch (CA Bar No. 109084)
Linda F. Cantor (LA Bar No. 153762)
James O'Neill (DE Bar Na. 4042)
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705 (Courier 19801)
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: ikharasch@pszjlaw.com
lcantor@pszjlaw.com
joneill@pszjlaw.com
COUNSEL TO DEBTOR-IN-POSSESSION
 
Haynes and Boone, LLP
Charles A. Beckham, Jr. (TX Bar No. 02016600)
1221 McKinney Street, Suite 2100
Houston, Texas 77010
Email: charles.beckham@haynesboone.com
 
-and-
 
Trevor R. Hoffmann (NY Bar No. 24048806)
30 Rockefeller Plaza, 26th Floor
New York, NY 1011
Email: trevor.hoffmann@haynesboone.com
COUNSEL TO PLAN SPONSOR

 

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1 The last four digits of the Debtor’s tax identification number are 2076.  The
location of the Debtor’s headquarters and the service address for the Debtor is
110 110th Avenue NE. Suite 410, Bellevue, WA 98004.

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TABLE OF CONTENTS
 

    Page
ARTICLE I
SUMMARY OF THE PLAN
1
ARTICLE II
DEFINITIONS, RULES OF INTERPRETATION, AND CONSTRUCTION OF TERMS
2
ARTICLE III
DESIGNATION OF CLAIMS AND INTERESTS
2
3.1
Summary
2
3.2
Identification of Classes
2
3.3
Unimpaired Classes
3
3.4
Impaired Classes/Entitled to Vote
3
3.5
Impaired Classes/Not Entitled to Vote
3
3.6
Elimination of Classes for Voting Purposes
3
3.7
Controversy Concerning Classification, Impairment or Voting Rights
3
ARTICLE IV
TREATMENT OF UNCLASSIFIED CLAIMS
4
4.1
Administrative Claims
4
4.2
Allowed Priority Tax Claims
5
4.3
Ordinary Course Liabilities
5
ARTICLE V
CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS
5
5.1
Treatment of Allowed Secured Claims
5
5.2
Treatment of Allowed Priority Unsecured Non-Tax Claims
6
5.3
Treatment of Allowed General Unsecured Claims
6
5.4
Treatment of Allowed Subordinated Claims
6
5.5
Treatment of Allowed Equity Interests
6
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6
6.1
Continued Corporate Existence
6
6.2
Management and Board of Directors
7
6.3
Arrangements with the Litigation Trustee
7
6.4
The Closing
7
6.5
Tax Treatment of the Distribution Trust
8
6.6
Right to Enforce, Compromise, or Adjust Distribution Trust Assets
9
6.7
Preservation of Rights of Action
9

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ARTICLE VII
PROVISIONS GOVERNING RESOLUTION OF CLAIMS AND DISTRIBUTIONS OF PROPERTY UNDER
THE PLAN
9
7.1
Right to Object to Claims
10
7.2
Deadline for Objecting to Claims
10
7.3
Deadline for Responding to Claim Objections
10
7.4
Right to Request Estimation of Claims
10
7.5
Distribution Procedures Regarding Allowed Claims
10
7.6
Procedures Regarding Distributions from the Distribution Trust
13
ARTICLE VIII
EXECUTORY CONTRACTS
13
8.1
Assumption of Executory Contracts
13
8.2
Rejection of Executory Contracts
13
8.3
Procedures Related to Assumption of Executory Contracts
14
8.4
Rejection Claim Bar Date
14
8.5
Indemnification Obligations
14
ARTICLE IX
EFFECT OF REJECTION BY ONE OR MORE CLASSES
15
15
   
9.1
Impaired Classes to Vote
15
9.2
Acceptance by Class
15
9.3
Reservation of Cramdown Rights
15
ARTICLE X
EFFECT OF CONFIRMATION
15
10.1
Legally Binding Effect
15
10.2
Revesting of Property of Debtor in Reorganized Debtor
16
10.3
Yahoo! Rights
16
ARTICLE XI
INJUNCTIONS, RELEASES, AND DISCHARGE
16
11.1
Discharge and Release
16
11.2
Discharge Injunction
17
11.3
Exoneration and Reliance
17
11.4
Additional Releases
18
11.5
Exculpation
18
ARTICLE XII
RETENTION OF JURISDICTION
18
12.1
Exclusive Bankruptcy Court Jurisdiction
19
12.2
Limitation on Jurisdiction
20
ARTICLE XIII
MISCELLANEOUS PROVISIONS
20
13.1
Conditions to Confirmation
20
13.2
Conditions to Effectiveness
21
13.3
Exemption from Transfer Taxes
21
13.4
Securities Exemption
21
13.5
Defects, Omissions and Amendments of the Plan
21
13.6
Withdrawal of Plan
22
13.7
Due Authorization by Creditors and Interest Holders
22
13.8
Filing of Additional Documentation
22
13.9
Governing Law
22
13.10
Successors and Assigns
23
13.11
Transfer of Claims
23
13.12
Notices
23
13.13
U.S. Trustee Fees
25
13.14
Implementation
25
13.15
No Admissions
25
ARTICLE XIV
SUBSTANTIAL CONSUMMATION
26
14.1
Substantial Consummation
26
14.2
Final Decree
26

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EXHIBITS TO THE PLAN

Glossary of Defined Terms
Exhibit A
Schedule of Assumed Contracts and Unexpired Leases
Exhibit B

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Hipcricket, Inc., the Debtor and Debtor-in-Possession in the above-referenced
Bankruptcy Case, and ESW Capital, LLC, in its capacity as the Plan Sponsor,
jointly propose the Plan of Reorganization of the Debtor dated March 20,
2015.  Reference is made to the Disclosure Statement Pursuant to 11 U.S.C. §
1125 in Support of the Plan of Reorganization of the Debtor  for a discussion of
the Debtor’s history, business, property and results of operations, and for a
summary of the Plan and certain related matters.

All Creditors are encouraged to read the Plan and the Disclosure Statement in
their entirety before voting to accept or reject the Plan.  No materials, other
than the Disclosure Statement and any exhibits and schedules attached thereto or
referenced therein, have been approved by the Proponents for use in soliciting
acceptances or rejections of the Plan.

For avoidance of doubt, the Plan applies and preserves the maximum global
jurisdiction possible under applicable U.S. law, including, without limitation,
over the assets of the Debtor wherever located.  The Plan is also consistent
with and implements the decisions of the Bankruptcy Court that are described in
the Disclosure Statement.

ARTICLE I
SUMMARY OF THE PLAN

An overview of the Plan is set forth in the Disclosure Statement.  Generally,
the Plan provides for (1) the reorganization of the Debtor by retiring,
cancelling, extinguishing and/or discharging the Debtor’s prepetition equity
interests and issuing New Equity to the Plan Sponsor and to the DIP Lender, to
the extent that it exercises the Subscription Option, and (2) the distribution
of Cash and rights to certain litigation recoveries to holders of Allowed Claims
in accordance with the priority scheme established by the Bankruptcy Code.

The reorganization of the Debtor and its estate described herein will be
implemented via (1) issuance of a portion of New Equity to ESW Capital, LLC or
an affiliate, in its capacity as the Plan Sponsor, in exchange for the
Consideration; (2) receipt of a portion of the New Equity by ESW Capital, LLC,
in its capacity as DIP Lender, pursuant to the Subscription Option; (3)
distribution of the Consideration to the Creditors; and (4) creation of the
Distribution Trust to pursue certain avoidance claims and causes of action for
the benefit of Creditors.

ARTICLE II
DEFINITIONS, RULES OF INTERPRETATION, AND CONSTRUCTION OF TERMS

2.1           All capitalized terms not defined elsewhere in the Plan shall have
the meanings assigned to them in the Glossary of Defined Terms attached as
Exhibit A to the Plan.  Any capitalized term used in the Plan that is not
defined herein has the meaning ascribed to that term in the Bankruptcy Code
and/or Bankruptcy Rules.
 
2.2           For purposes of the Plan, any reference in the Plan to an existing
document or exhibit filed or to be filed means that document or exhibit as it
may have been or may be amended, supplemented, or otherwise modified.
 
2.3           The words “herein,” “hereof” and “hereunder” and other words of
similar import refer to the Plan as a whole and not to any particular section,
subsection or clause contained in the Plan, unless the context requires
otherwise.  Whenever from the context it appears appropriate, each term stated
in either the singular or the plural includes the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender include the
masculine, feminine and the neuter.  The section headings contained in the Plan
are for reference purposes only and shall not affect in any way the meaning or
interpretation of the Plan.
 
2.4           Captions and headings to articles, sections and exhibits are
inserted for convenience of reference only and are not intended to be part of or
to affect the interpretation of the Plan.
 
2.5           The rules of construction set forth in section 102 of the
Bankruptcy Code shall apply.
 
2.6           In computing any period of time prescribed or allowed by the Plan,
the provisions of Bankruptcy Rule 9006(a) shall apply.
 

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ARTICLE III
DESIGNATION OF CLAIMS AND INTERESTS

3.1           Summary
 
Pursuant to section 1122 of the Bankruptcy Code, a Claim or Equity Interest is
placed in a particular Class for purposes of voting on the Plan and receiving
Distributions under the Plan only to the extent (i) the Claim or Equity Interest
qualifies within the description of that Class; (ii) the Claim or Equity
Interest is an Allowed Claim or Allowed Equity Interest in that Class, and is
classified in another Class or Classes to the extent that any remainder of the
Claim or Equity Interest qualifies within the description of such other Class or
Classes; and (iii) the Claim or Equity Interest has not been paid, released, or
otherwise compromised before the Effective Date.  A Claim or Equity Interest
which is not an Allowed Claim or Allowed Equity Interest, including a Disputed
Claim, is not in any Class, and, notwithstanding anything to the contrary
contained in the Plan, no Distribution shall be made on account of any Claim or
Equity Interest which is not an Allowed Claim or Allowed Equity Interest.  In
accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative
Claims, Professional Compensation Claims, and Priority Tax Claims are not
classified under the Plan and are excluded from the following Classes.
 
3.2           Identification of Classes
 
The following is a designation of the classes of Claims and Equity Interests
under the Plan.
 
Class 1: Secured Claims
Class 2: Priority Unsecured Non-Tax Claims
Class 3: General Unsecured Claims
Class 4: Subordinated Claims
Class 5: Equity Interests

3.3           Unimpaired Classes
 
Classes 1 and 2 are unimpaired under the Plan.  Under section 1126(f) of the
Bankruptcy Code, holders of Claims in Classes 1 and 2 are conclusively presumed
to have accepted the Plan and are therefore not entitled to vote to accept or
reject the Plan.
 
3.4           Impaired Classes/Entitled to Vote
 
Class 3 is impaired under the Plan.  Holders of Claims in Class 3 are entitled
to vote to accept or reject the Plan.
 
3.5           Impaired Classes/Not Entitled to Vote
 
Holders of Subordinated Claims in Class 4 and Holders of Allowed Equity
Interests in Class 5 will not receive Distributions on account of such Claims
under the Plan.  Under section 1126(g) of the Bankruptcy Code, holders of
Subordinated Claims in Class 4 and Holders of Allowed Equity Interests in Class
5 are conclusively presumed to have rejected the Plan, and therefore the
Proponents will not solicit their votes.
 
3.6           Elimination of Classes for Voting Purposes
 
Any Class of Claims or Equity Interests that is not occupied as of the date of
the commencement of the Confirmation Hearing by an Allowed Claim, an Allowed
Equity Interest, or a Claim or Equity Interest temporarily allowed under Rule
3018 of the Bankruptcy Rules shall be deemed deleted from the Plan for purposes
of voting on acceptance or rejection of the Plan by such Class under section
1129(a)(8) of the Bankruptcy Code.
 
3.7           Controversy Concerning Classification, Impairment or Voting Rights
 
In the event a controversy or dispute should arise involving issues related to
the classification, impairment or voting rights of any Creditor or Interest
Holder under the Plan, whether before or after the Confirmation Date, the
Bankruptcy Court may, after notice and a hearing, determine such
controversy.  Without limiting the foregoing, the Bankruptcy Court may estimate
for voting purposes (i) the amount of any contingent or unliquidated Claim the
fixing or liquidation of, as the case may be, would unduly delay the
administration of the Bankruptcy Case and (ii) any right to payment arising from
an equitable remedy for breach of performance.
 

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ARTICLE IV
TREATMENT OF UNCLASSIFIED CLAIMS

4.1           Administrative Claims

(a)           General:  Except with regards to the Ordinary Course Liabilities,
including Allowed DIP Claim, subject to the bar date provisions herein, unless
otherwise agreed to by the parties, each holder of an Allowed Administrative
Claim shall receive, from the Consideration, Cash equal to the unpaid portion of
such Allowed Administrative Claim within ten (10) days after the later of (a)
the Effective Date, (b) the Allowance Date, or (c) such date as is mutually
agreed upon by the Proponents and the holder of such Claim.

(b)           Allowed DIP Claims: The DIP Claim is Allowed in full.  (i)
Pursuant to the Subscription Option, the DIP Lender, as a Qualified Ordinary
Course Creditor, shall have the option, on account of being the holder of the
Allowed DIP Claim, to exchange a total of up to $3,000,000 in satisfaction of
such amount of its Allowed Claim for up to a total of 600 shares, equal to 60
percent, of the issued New Equity, at a rate of $5,000 of its Allowed DIP Claim
for one (1) share of New Equity, and (ii) the DIP Lender, on account of being
the holder of the Allowed DIP Claim, shall receive, from the Consideration,
payment in Cash of the remaining amount of the Allowed DIP Claim after the DIP
Lender has exercised the Subscription Option to receive its share of the New
Equity. On the Effective Date, all liens and interests granted in exchange for
the DIP Note shall be deemed discharged, cancelled, and released and shall be of
no further force and effect. The Consideration payable by the Plan Sponsor under
the Plan shall be reduced on a dollar-for-dollar basis to reflect any and all
Claims exchanged for New Equity pursuant to the Subscription Option.

(c)           Payment of Statutory Fees:  All fees payable pursuant to 28 U.S.C.
§ 1930 shall be paid in Cash equal to the amount of such Administrative Claim
when due or no later than the Effective Date.  Postpetition U.S. Trustee fees
and post-confirmation reports shall be paid and filed as required by 28 U.S.C. §
1930 until the Bankruptcy Case is closed, converted or dismissed, and failure to
do either timely is a material default pursuant to section 1112 of the
Bankruptcy Code.

(d)           Bar Date for Administrative Claims:

(i)           General Provisions:  Except as otherwise provided in this Article
IV, requests for payment of Administrative Claims must be included within an
application (setting forth the amount of, and basis for, such Administrative
Claims, together with documentary evidence) and Filed and served on respective
counsel for the Debtor and Plan Sponsor no later than ten (10) days after the
Confirmation Hearing or by such earlier deadline governing a particular
Administrative Claim contained in an order of the Bankruptcy Court entered
before the Effective Date.  Holders of Administrative Claims (including, without
limitation, professionals requesting compensation or reimbursement of expenses
and the holders of any Claims for federal, state or local taxes) that are
required to File a request for payment of such Claims and that do not File such
requests by the applicable bar date specified in this section shall be forever
barred from asserting such Claims against the Debtor or any of its
property.  Requests for payments of Administrative Claims included within a
proof of claim are of no force and effect, and are disallowed in their entirety
as of the Confirmation Date unless such Administrative Claim is subsequently
Filed in a timely fashion as provided herein.

(ii)           Professionals:  All professionals or other entities requesting
compensation or reimbursement of expenses pursuant to sections 327, 328, 330,
331, 503(b) and 1103 of the Bankruptcy Code for services rendered before the
Effective Date (including, without limitation, any compensation requested by any
professional or any other entity for making a substantial contribution in the
Bankruptcy Case) shall File and serve on the Reorganized Debtor and
Post-Confirmation Service List an application for final allowance of
compensation and reimbursement of expenses no later than thirty (30) days after
the Effective Date.  Objections to applications of professionals for
compensation or reimbursement of expenses must be filed and served on the
Reorganized Debtor, the U.S. Trustee, and the professionals to whose application
the objections are addressed no later than twenty-one (21) days after the date
the application is filed, or the Bankruptcy Court may enter an order authorizing
the fees without a hearing.  Any professional fees and reimbursements or
expenses incurred by the Reorganized Debtor subsequent to the Effective Date may
be paid without application to the Bankruptcy Court.

(iii)           Tax Claims:  All requests for payment of Administrative Claims
and other Claims by a Governmental Unit for taxes (and for interest and/or
penalties related to such taxes) for any tax year or period, which accrued or
was assessed within the period from and including the Petition Date through and
including the Effective Date (“Post-Petition Tax Claims”) and for which no bar
date has otherwise been previously established, must be Filed on or before the
later of (i) forty-five (45) days following the Effective Date; and (ii) ninety
(90) days following the filing with the applicable Governmental Unit of the tax
return for such taxes for such tax year or period.  Any holder of any
Post-Petition Tax Claim that is required to File a request for payment of such
taxes and does not File such a Claim by the applicable bar date shall be forever
barred from asserting any such Post-Petition Tax Claim against the Debtor or its
property, whether any such Post-Petition Tax Claim is deemed to arise prior to,
on, or subsequent to the Effective Date.  To the extent that the holder of a
Post-Petition Tax Claim holds a lien to secure its Claim under applicable state
law, the holder of such Claim shall retain its lien until its Allowed
Post-Petition Tax Claim has been paid in full.

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4.2           Allowed Priority Tax Claims

Each Holder of an Allowed Priority Tax Claim against Debtor shall receive, from
the Consideration,  in full satisfaction, settlement, release and discharge of,
and in exchange for, such Allowed Priority Tax Claim (i) Cash equal to the
amount of such Allowed Priority Tax Claim, (ii) payment in full through the
fifth anniversary of the Petition Date, plus interest, or (iii) such other less
favorable treatment to the Holders of an Allowed Priority Tax Claim as to which
the Debtor, or the Proponents and the Holder of such Allowed Priority Tax Claims
shall have agreed upon in writing.

4.3           Ordinary Course Liabilities

A holder of an Ordinary Course Liability is not required to file or serve any
request for payment of the Ordinary Course Liability. The Debtor shall continue
to pay each Ordinary Course Liability (other than the Allowed DIP Claim, as
provided for in Section 4.1(b)) accrued prior to the Effective Date, pursuant to
the payment terms and conditions of the particular transaction giving rise to
the Ordinary Course Liability, and the Approved Budget. The Reorganized Debtor
shall continue to pay each Ordinary Course Liability accrued after the Effective
Date, pursuant to the payment terms and conditions of the particular transaction
giving rise to the Ordinary Course Liability.

ARTICLE V
CLASSIFICATION AND TREATMENT
OF CLASSIFIED CLAIMS AND INTERESTS

 
5.1
Treatment of Allowed Secured Claims (Class 1)

On the Effective Date, solely to the extent an Allowed Secured Claim is
collateralized by a segregated bank account, then the holder of such Allowed
Secured Claim shall, on account of and in full and complete settlement, release
and discharge of, and in exchange for, such Secured Claim, have its Claim
satisfied by receipt of the Cash deposited in the segregated bank account. All
other holders of Allowed Secured Claims shall, at the election of the Plan
Sponsor, on account of and in full and complete settlement, release and
discharge of, and in exchange for, such Secured Claims, have their Claims
satisfied by the Reorganized Debtor by either (i) reinstatement pursuant to
section 1124 of the Bankruptcy Code, (ii) receipt of the collateral securing
such claim and any interest required to be paid pursuant to section 506(b) of
the Bankruptcy Code, (iii) such other treatment as the Plan Sponsor and the
applicable holder of the Allowed Secured Claim may agree, or (iv) such other
recovery necessary to satisfy section 1129 of the Bankruptcy Code.

 
5.2
Treatment of Allowed Priority Unsecured Non-Tax Claims (Class 2)

Each holder of an Allowed Priority Unsecured Non-Tax Claim against the Debtor
shall receive, from the Consideration, on the Effective Date, on account of and
in full and complete settlement, release and discharge of, and in exchange for,
such Allowed Priority Unsecured Non-Tax Claim, either cash equal to the full
unpaid amount of such Allowed Priority Unsecured Non-Tax Claim, or such other
treatment as the Proponent and the holder of such Allowed Priority Unsecured
Non-Tax Claim shall have agreed.

 
5.3
Treatment of Allowed General Unsecured Claims (Class 3)

On the Effective Date, each holder of an Allowed General Unsecured Claim shall
receive, on account of and in full and complete settlement, release and
discharge of, and in exchange for its Allowed General Unsecured Claim, its Pro
Rata Share of (i) remaining Consideration after payment of Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and
Allowed Priority Unsecured Non-Tax Claims, and (ii) the Beneficial Interest in
the Distribution Trust in accordance with the Distribution Trust Agreement.

 
5.4
Treatment of Allowed Subordinated Claims (Class 4)

No Distributions will be made to holders of Allowed Subordinated Claims.  On the
Effective Date, all Allowed Subordinated Claims will be released and discharged.

 
5.5
Treatment of Allowed Equity Interests (Class 5)

No Distributions will be made to holders of Allowed Equity Interests.  On the
Effective Date, all Allowed Equity Interests shall be deemed automatically
cancelled, released, and extinguished without further action by the Debtor or
the Reorganized Debtor, and the obligations of the Debtor and the Reorganized
Debtor thereunder shall be discharged.

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ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN

 
6.1
Continued Corporate Existence

Except as otherwise provided in the Plan, the Reorganized Debtor will continue
to exist after the Effective Date as a corporate entity, with all of the powers
of a corporation under applicable law in the jurisdiction in which the Debtor is
incorporated and pursuant to its certificate of incorporation and bylaws or
other organizational documents in effect before the Effective Date, as such
documents are amended by or pursuant to the Plan.

 
6.2
Management and Board of Directors

The members of the board of directors of the Debtor existing immediately before
the Effective Date shall be deemed terminated and/or removed without cause
effective immediately prior to the Effective Date.  The Plan Sponsor may
nominate and elect new members for the board of directors of the Reorganized
Debtor in accordance with the Reorganized Debtor’s bylaws.

6.3           Arrangements with the Distribution Trustee

Within fourteen (14) days prior to the Confirmation Hearing, the Debtor,
following consultation with the Committee, shall file with the Bankruptcy Court
a disclosure identifying the Distribution Trustee under the Distribution
Trust.  At the Confirmation Hearing, the Bankruptcy Court shall ratify such
Distribution Trustee.  All compensation for the Distribution Trustee shall be
paid from the Distribution Trust Assets in accordance with the Distribution
Trust Agreement.  The approved person shall serve as the Distribution Trustee on
execution of the Distribution Trust Agreement at the Closing.

6.4           The Closing

The Closing of the transactions required and contemplated under the Plan shall
take place on the Effective Date at the offices of Haynes and Boone, LLP, 30
Rockefeller Plaza, 26th Floor, New York, New York 10112, or at such other place
identified in a notice provided to those parties listed in Section 13.12 of the
Plan.  The Proponents may reschedule the Closing by making an announcement at
the originally scheduled Closing of the new date for the Closing.  A notice of
the rescheduled Closing shall be filed with the Bankruptcy Court and served on
the parties identified in Section 13.12 of the Plan within two (2) days after
the originally scheduled Closing.  All documents to be executed and delivered by
any party as provided in this Article VI and all actions to be taken by any
party to implement the Plan as provided herein shall be in form and substance
satisfactory to the Proponents.  The following actions shall occur at or before
the Closing (unless otherwise specified), and shall be effective on the
Effective Date:

(a)           Execution of Documents and Corporate Action.  The Debtor shall
deliver all documents and perform all actions reasonably contemplated with
respect to implementation of the Plan.  The Chief Executive Officer, or his
designee, is authorized (i) to execute on behalf of the Debtor, in a
representative capacity and not individually, any documents or instruments after
the Confirmation Date or at the Closing that may be necessary to consummate the
Plan and (ii) to undertake any other action on behalf of the Debtor to
consummate the Plan.  Each of the matters provided for under the Plan involving
the corporate structure of the Debtor or corporate action to be taken by or
required of the Debtor will, as of the Effective Date, be deemed to have
occurred and be effective as provided herein, and shall be authorized, approved,
and (to the extent taken before the Effective Date) ratified in all respects
without any requirement of further action by stockholders, creditors, or
directors of the Debtor.

(b)           Cancellation of Equity Interests and Issuance of New Equity.  On
the Effective Date, all prepetition equity interests of Debtor shall be retired,
cancelled, extinguished and/or discharged in accordance with the terms of the
Plan, and 1,000 shares of New Equity of the Reorganized Debtor shall be
issued.  The New Equity shall be free and clear of all Liens, Claims, and
encumbrances of any kind, except as otherwise provided in the Plan.

(c)           Funding of the Consideration.  On the Effective Date, the Plan
Sponsor shall contribute to the Debtor an amount of Cash equal to the
Consideration in consideration of the Plan Sponsor’s purchase of the New Equity.
The Consideration is not subject to any financing contingency.  The Allowed
Equity Interests shall be terminated and cancelled and the holders of the
Allowed Equity Interests shall neither retain nor receive any property under the
Plan. The Consideration shall be used to fund Distributions under the Plan.  To
the extent DIP Lender does not fully exercise the Subscription Option, the Plan
Sponsor will acquire the remaining shares of New Equity for the remainder of the
Consideration. The Consideration payable by the Plan Sponsor under the Plan
shall be reduced on a dollar-for-dollar basis to reflect any and all Claims
exchanged for New Equity pursuant to the Subscription Option.

(d)           Execution and Ratification of the Distribution Trust
Agreement.  On the Effective Date, the Distribution Trust Agreement shall be
executed by all parties thereto.  The Distribution Trust Agreement shall be
provided in the Plan Supplement.  Each holder of a Claim shall be deemed to have
ratified and become bound by the terms and conditions of the Distribution Trust
Agreement.

(e)           Transfer of Distribution Trust Assets.  All property of the Debtor
constituting the Distribution Trust Assets shall be conveyed and transferred by
the Debtor to the Distribution Trust, free and clear of all Liens, Claims,
interests, and encumbrances.

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6.5           Tax Treatment of the Distribution Trust

The Distribution Trust established under the Plan is established for the purpose
of satisfying General Unsecured Claims by liquidating the Distribution Trust
Assets transferred to the Distribution Trust and performing related and
incidental functions referenced in the Distribution Trust Agreement, and the
Distribution Trust shall have no objective of continuing or engaging in any
trade or business except to the extent reasonably necessary to, and consistent
with, the liquidating purpose of the trust.  The purpose of the Distribution
Trust is to provide a mechanism for the liquidation of the Distribution Trust
Assets, and to distribute the proceeds of the liquidation, net of all claims,
expenses, charges, liabilities, and obligations of the Distribution Trust, to
the Beneficiaries in accordance with the terms of the Plan.  No business
activities will be conducted by the Distribution Trust other than those
associated with or related to the liquidation of the Distribution Trust
Assets.  It is intended that the Distribution Trust be classified for federal
income tax purposes as a “liquidating trust” within the meaning of the Treasury
Regulations Section 301.7701-4(d).  All parties and Beneficiaries shall treat
the transfers in trust described herein as transfers to the Beneficiaries for
all purposes of the Internal Revenue Code of 1986, as amended (including
Sections 61(a)(12), 483, 1001, 1012, and 1274 thereof).  All the parties and
Beneficiaries shall treat the transfers in trust as if all the transferred
assets, including all the Distribution Trust Assets, had been first transferred
to the Beneficiaries and then transferred by the Beneficiaries to the
Distribution Trust.  The Beneficiaries shall be treated for all purposes of the
Internal Revenue Code of 1986, as amended, as the grantors of the Distribution
Trust and the owners of the Distribution Trust.  The Distribution Trustee shall
file returns for the Distribution Trust as a grantor trust pursuant to Treasury
Regulations Section 1.671-4(a) or (b).  All parties, including the Beneficiaries
and the Distribution Trustee, shall value the Distribution Trust Assets
consistently, and such valuations shall be used for all federal income tax
purposes.  Beneficiaries may wish to consult with a tax professional regarding
the tax consequences of holding a Beneficial Interest in or receiving a
Distribution from the Distribution Trust.

 
6.6
Right to Enforce, Compromise, or Adjust Distribution Trust Assets

The Distribution Trustee shall have and retain the sole and full power,
authority, and standing to prosecute, compromise, or otherwise resolve the
Distribution Trust Avoidance Actions assigned to the Distribution Trust, subject
to the terms and conditions set forth in the Distribution Trust Agreement and
the rights of the Oversight Board thereunder.  All proceeds derived from such
causes of action shall constitute Distribution Trust Assets.

6.7           Preservation of Rights of Action

The Reorganized Debtor shall retain and shall have the exclusive right to
enforce any and all claims, rights and causes of action arising from its
IP.  Unless any Claims against a Person are expressly waived, relinquished,
exculpated, released, compromised, transferred to the Distribution Trust or
settled in the Plan or by a Final Order, in accordance with section 1123(b) of
the Bankruptcy Code, the Reorganized Debtor shall retain and may enforce all
rights to commence and pursue any and all retained causes of action, whether
arising before or after the Petition Date, and the Reorganized Debtor’s rights
to commence, prosecute or settle such causes of action shall be preserved
notwithstanding the occurrence of the Effective Date.  Notwithstanding the
foregoing or any other provision herein, neither the Reorganized Debtor nor any
other Person acting in their name or on their behalf shall prosecute or pursue
any Avoidance Actions against any Person that is not an Insider of any Debtor.

ARTICLE VII
PROVISIONS GOVERNING RESOLUTION OF CLAIMS
AND DISTRIBUTIONS OF PROPERTY UNDER THE PLAN

7.1           Right to Object to Claims

The Plan Sponsor and the Reorganized Debtor shall have the authority, but not
the obligation, to object to, litigate, and settle, the amount, priority or the
extent of any Administrative Claim, Secured Claim, Priority Tax Claim, or
Priority Unsecured Non-Tax Claim. Notwithstanding anything to the contrary
herein, subject to the terms and conditions set forth in the Distribution Trust
Agreement and the rights of the Oversight Board thereunder, and notwithstanding
any requirements that may be imposed pursuant to Bankruptcy Rule 9019, except
insofar as a Claim is Allowed under the Plan on and after the Effective Date,
the Distribution Trustee shall have the authority, but not the obligation, to:
(1) file, withdraw or litigate to judgment objections to and requests for
estimation of Claims; (2) settle or compromise any Disputed Claim without any
further notice to or action, order or approval by the Bankruptcy Court; and (3)
administer and adjust the Claims register to reflect any such settlements or
compromises without any further notice to or action, order or approval by the
Bankruptcy Court.  The Distribution Trustee shall succeed to any pending
objections to Claims filed by the Debtor prior to the Effective Date, and shall
have and retain any and all rights and defenses the Debtor had immediately prior
to the Effective Date with respect to any Disputed Claim, including the causes
of action retained under the Plan.  The Reorganized Debtor shall provide
commercially reasonable assistance and cooperation to the Distribution Trustee
in connection with the Distribution Trustee’s prosecution of objections to
Claims, including, without limitation, access to the books and records of the
Debtor or the Reorganized Debtor (as the case may be) and other information
reasonably requested by the Distribution Trustee to enable the Distribution
Trustee to perform its obligations under the Distribution Trust Agreement.

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7.2           Deadline for Objecting to Claims

Objections to Claims must be filed with the Bankruptcy Court, and a copy of the
objection must be served on the subject Creditor before the expiration of the
Claim Objection Deadline (unless such period is further extended by subsequent
orders of the Bankruptcy Court); otherwise such Claims shall be deemed Allowed
in accordance with section 502 of the Bankruptcy Code.  The objection shall
notify the Creditor of the deadline for responding to such objection.

7.3            Deadline for Responding to Claim Objections

Within 30 days after service of an objection, or such other date as is indicated
on such objection or the accompanying notice thereof, the Creditor whose Claim
was objected to must file a written response to the objection with the
Bankruptcy Court and serve a copy on the Distribution Trustee.  Failure to file
a written response within the 30-day time period shall constitute a waiver and
release of that portion of the subject Claim that was subject to the objection,
and shall cause the Bankruptcy Court to enter a default judgment against the
non-responding Creditor or granting the relief requested in the claim objection.

7.4           Right to Request Estimation of Claims

Pursuant to section 502(c) of the Bankruptcy Code, the Debtor, the Reorganized
Debtor, and the Distribution Trustee may request estimation or liquidation of
any Disputed Claim that is contingent or unliquidated or any Disputed Claim
arising from a right to an equitable remedy or breach of performance.

7.5           Distribution Procedures Regarding Allowed Claims

(a)           In General

The Distribution Trustee shall make all Distributions required to be made under
the Plan, including Distributions from the Distribution Trust.

(b)           Distributions on Allowed Claims Only

Distributions from Available Cash shall be made only to the holders of Allowed
Claims.  Until a Disputed Claim becomes an Allowed Claim, the holder of that
Disputed Claim shall not receive a Distribution from Available Cash.

(c)           Place and Manner of Payments of Distributions

Except as otherwise specified in the Plan, Distributions from Available Cash
shall be made by mailing such Distribution to the Creditor at the address listed
in any proof of claim filed by the Creditor or at such other address as such
Creditor shall have specified for payment purposes in a written notice received
by the Distribution Trustee at least twenty (20) days before a Distribution
Date.  If a Creditor has not filed a proof of claim or interest or sent the
Distribution Trustee a written notice of payment address, then the
Distribution(s) for such Creditor will be mailed to the address identified in
the Schedules of Assets and Liabilities.  The Distribution Trustee shall
distribute any Cash by wire, check, or such other method as it deems appropriate
under the circumstances.  Before receiving any Distributions, all Creditors, at
the request of the Distribution Trustee, must provide written notification of
their respective Federal Tax Identification Numbers or Social Security Numbers
to the Distribution Trustee; otherwise, the Distribution Trustee may suspend
Distributions to any Creditors who have not provided their Federal Tax
Identification Numbers or Social Security Numbers.

(d)           Undeliverable Distributions

If a Distribution made from Available Cash to any Creditor is returned as
undeliverable, the Distribution Trustee shall use reasonable efforts to
determine such Creditor’s then current address.  If the Distribution Trustee
cannot determine, or is not notified of, a Creditor’s then current address
within six months after the Effective Date, the Distribution reserved for such
Creditor shall be deemed an unclaimed Distribution, and Section 7.5(e) of the
Plan shall be applicable thereto.

(e)           Unclaimed Distributions

If the current address for a Creditor entitled to a Distribution from Available
Cash under the Plan has not been determined within six months after the
Effective Date or such Creditor has otherwise not been located or submitted a
valid Federal Tax Identification Number or Social Security Number to the
Distribution Trustee, then such Creditor (i) shall no longer be a Creditor and
(ii) shall be deemed to have released such Claim.

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(f)           Withholding

The Distribution Trustee may at any time withhold from a Distribution from
Available Cash to any Person (except the Internal Revenue Service) amounts
sufficient to pay any tax or other charge that has been or may be imposed on
such Person with respect to the amount distributable or to be distributed under
the income tax laws of the United States or of any state or political
subdivision or entity by reason of any Distribution provided for in the Plan,
whenever such withholding is determined by the Distribution Trustee (in its sole
discretion) to be required by any law, regulation, rule, ruling, directive, or
other governmental requirement.  The Distribution Trustee, in the exercise of
its sole discretion and judgment, may enter into agreements with taxing or other
authorities for the payment of such amounts that may be withheld in accordance
with the provisions of this section.

(g)           Dissolution
 
 
(i)
The Distribution Trustee and Distribution Trust shall be discharged or
dissolved, as the case may be, at such time as all of the Distribution Trust
Assets have been distributed pursuant to the Plan and the Distribution Trust
Agreement; provided, however, that in no event shall the Distribution Trust be
dissolved later than three (3) years from the creation of the Distribution Trust
unless the Bankruptcy Court, upon motion within the six-month period prior to
the third (3rd) anniversary (or within the six-month period prior to the end of
an extension period), determines that a fixed period extension (not to exceed
three (3) years, together with any prior extensions, without a favorable private
letter ruling from the Internal Revenue Service or an opinion of counsel
satisfactory to the Distribution Trustee that any further extension would not
adversely affect the status of the trust as a liquidating trust for United
States federal income tax purposes) is necessary to facilitate or complete the
liquidation of the Distribution Trust Assets.

 
 
(ii)
If at any time the Distribution Trustee determines, in reliance upon such
professionals as a Distribution Trustee may retain, that the expense of
administering the Distribution Trust so as to make a final distribution to
Distribution Trust Beneficiaries is likely to exceed the value of the assets
remaining in the Distribution Trust, the Distribution Trustee may (i) reserve
any amount necessary to dissolve the Distribution Trust, (ii) donate any balance
to a charitable organization (A) described in section 501(c)(3) of the Internal
Revenue Code, (B) exempt from United States federal income tax under section
501(a) of the Internal Revenue Code, (C) not a “private foundation,” as defined
in section 509(a) of the Internal Revenue Code, and (D) that is unrelated to the
Debtor, the Distribution Trust, and any insider of the Distribution Trustee, and
(iii) dissolve the Distribution Trust.

 

 
7.6
Procedures Regarding Distributions from the Distribution Trust

Procedures regarding Distributions from the Distribution Trust to holders of
Class 3 Allowed General Unsecured Claims shall be governed by the Distribution
Trust Agreement.

ARTICLE VIII
EXECUTORY CONTRACTS

8.1           Assumption of Executory Contracts

On the Effective Date, all Executory Contracts identified on the Schedule of
Assumed Contracts and Unexpired Leases, attached as Exhibit B, shall be deemed
assumed by the Reorganized Debtor. The Plan Sponsor may amend the Schedule of
Assumed Contracts and Unexpired Leases through the deadline to file the Plan
Supplement. Entry of the Confirmation Order shall constitute approval of the
assumption of such Executory Contracts under sections 365 and 1123 of the
Bankruptcy Code.

8.2           Rejection of Executory Contracts

All Executory Contracts not identified on the Schedule of Assumed Contracts and
Unexpired Leases (or assumed by the Debtor previously) shall be deemed rejected
on the Effective Date. Entry of the Confirmation Order shall constitute approval
of such rejections under sections 365 and 1123 of the Bankruptcy Code

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 8.3           Procedures Related to Assumption of Executory Contracts

 
(a)
Establishment of Cure Claim Amounts

The Cure Amounts associated with the assumption of the Executory Contracts
pursuant to Section 8.1 of the Plan are specified in the Schedule of Assumed
Contracts and Unexpired Leases. Pursuant to the Notice of (I) Possible
Assumption of Contracts and Leases, (II) Fixing of Cure Amounts, and (III)
Deadline to Object Thereto served by the Debtor, counterparties to the Executory
Contracts were required to file Objections to Cure Amount, if any, by the Cure
Amount Objection Bar Date.

(b)           Objection to Disputed Cure Amounts

The Plan Sponsor shall have the right to examine any Objection to Cure Amount
filed by any party, and shall have the right to object to and contest the
Disputed Cure Amount asserted therein.

If an objection to a Disputed Cure Amount has not been resolved by the
Bankruptcy Court or agreement of the parties by the Effective Date, the
Executory Contract related to such Disputed Cure Amount shall be deemed assumed
by the Reorganized Debtor effective on the Effective Date; provided, however,
the Reorganized Debtor may revoke an assumption of any such Executory Contract
within ten (10) days after entry of an order by the Bankruptcy Court
adjudicating the objection to the Disputed Cure Amount related to the Executory
Contract by filing a notice of such revocation with the Bankruptcy Court and
serving a copy on the party(ies) whose Executory Contract is rejected.  Any
Executory Contract identified in a revocation notice shall be deemed rejected
retroactively to the Effective Date.

(c)           Payment of Cure Amounts

Within ten (10) Business Days after the Effective Date, the Reorganized Debtor
shall pay, in Cash, all Cure Amounts related to Executory Contracts listed on
the Schedule of Assumed Contracts and Unexpired Leases, other than Disputed Cure
Amounts.  Subject to the revocation rights described in Section 8.3(b) above,
the Reorganized Debtor shall pay all Cure Amounts that are subject to an
objection on the Effective Date within ten (10) days after entry of an order by
the Bankruptcy Court resolving the objection or approving an agreement between
the parties concerning the Cure Amount.

(d)           No Admission of Liability

Neither the inclusion nor exclusion of any Executory Contract by the Proponents
on the Schedule of Assumed Contracts and Unexpired Leases, nor anything
contained in the Plan, shall constitute an admission by the Proponents that any
such contract or unexpired lease is in fact an Executory Contract or that the
Debtor has any liability thereunder.

(e)           Reservation of Rights

Nothing in the Plan shall waive, excuse, limit, diminish, or otherwise alter any
of the defenses, claims, causes of action, or other rights of the Debtor under
any executory or non-executory contract or any unexpired or expired lease, nor
shall any provision of the Plan increase, augment, or add to any of the duties,
obligations, responsibilities, or liabilities of the Debtor under any such
contract or lease.

8.4           Rejection Claim Bar Date

Each Claim resulting from the rejection of an Executory Contract pursuant to
Section 8.2 of the Plan shall be filed with the Bankruptcy Court no later than
the Rejection Claim Bar Date; provided, however, any party whose Executory
Contract is rejected pursuant to a revocation notice pursuant to Section 8.3
above may file a rejection damage Claim arising out of such rejection within 30
days after the filing of the revocation notice with the Bankruptcy Court.  Any
Claim resulting from the rejection of an Executory Contract not filed by the
applicable deadline shall be discharged and forever barred, and shall not be
entitled to any Distributions under the Plan.  The Distribution Trustee shall
have the right to object to any rejection damage Claim.

8.5           Indemnification Obligations

Any obligation of the Debtor to indemnify, reimburse, or limit the liability of
any Person, including any officer or director of the Debtor, or any agent,
professional, financial advisor, or underwriter of any securities issued by the
Debtor, relating to any acts or omissions occurring before the Petition Date,
whether arising pursuant to charter, bylaws, contract or applicable state law,
shall be deemed to be, and shall be treated as, an Executory Contract and (a)
shall be deemed to be rejected, canceled, and discharged pursuant to the Plan as
of the Effective Date and (b) any and all Claims resulting from such obligations
are disallowed under section 502(e) of the Bankruptcy Code or other applicable
grounds, including section 502(d) or violations of sections 327, 362, 363 or
other requirements of the Bankruptcy Code, or, if any court of applicable
jurisdiction rules to the contrary, such Claim shall  be estimated pursuant to
section 502(c) of the Bankruptcy Code in the amount of $0 or such other amount
as the Bankruptcy Court shall determine.  Notwithstanding any of the foregoing,
nothing contained in the Plan impacts, impairs, or prejudices the rights of the
Distribution Trustee to pursue the Distribution Trust Avoidance Actions.

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ARTICLE IX
EFFECT OF REJECTION BY ONE OR MORE CLASSES

9.1           Impaired Classes Entitled to Vote

Each impaired Class shall be entitled to vote separately to accept or reject the
Plan.  A holder of a Disputed Claim which has not been temporarily allowed for
purposes of voting on the Plan may vote only such Disputed Claim in an amount
equal to the portion, if any, of such Claim or Equity Interest shown as fixed,
liquidated, and undisputed in the Debtor’s Schedules of Assets and Liabilities.

9.2           Acceptance by Class

A Class of Claims shall have accepted the Plan if the Plan is accepted by at
least two thirds (2/3) in amount and more than one half (1/2) in number of the
Allowed Claims of such Class that have voted to accept or reject the Plan.

9.3           Reservation of Cramdown Rights

In the event that any impaired Class shall fail to accept the Plan in accordance
with section 1129(a) of the Bankruptcy Code, the Proponents reserve the right to
request that the Bankruptcy Court confirm the Plan in accordance with the
provisions of the section 1129(b) of the Bankruptcy Code.

ARTICLE X
EFFECT OF CONFIRMATION

10.1           Legally Binding Effect

The provisions of the Plan shall bind all Creditors and Interest Holders,
whether or not they accept the Plan and wherever located.  On and after the
Effective Date, all holders of Claims and Equity Interests shall be precluded
and enjoined from asserting any Claim or Equity Interest against the Debtor or
its assets or properties based on any transaction or other activity of any kind
that occurred prior to the Confirmation Date except as permitted under the Plan.

10.2           Vesting of Property of Debtor in Reorganized Debtor

On the Effective Date, except as otherwise expressly provided in the Plan or
Confirmation Order, all Estate Property, other than the Distribution Trust
Assets, shall vest in the Reorganized Debtor free and clear of all Liens,
Claims, and encumbrances of any kind, except as otherwise provided in the Plan.

10.3           Yahoo! Rights

Notwithstanding any other provisions of the Plan, or any agreement among any
parties-in-interest referenced herein, Yahoo! shall be deemed a timely objector
to the Plan, and each of the following rights, claims, interests, and defenses
shall be reserved and preserved for Yahoo!’s benefit.

(a)           Nothing in the Plan, or any related order or agreement approved by
or implementing the Plan, shall be, whether directly or indirectly, deemed to
confer any immunity, exculpation, release, or other freedom from infringement or
any wrongs involving Yahoo! IP, and Yahoo! may enforce the consequences of any
infringement or any wrongs involving Yahoo! IP by the Debtor or any third party;
provided, however, that Yahoo! shall not assert against or pursue the Sponsor or
the Reorganized Debtor for any infringement or any other wrongs involving the
Yahoo! IP by the Debtor prior to the Effective Date.

(b)           Nothing herein shall directly or indirectly prevent Yahoo! from
challenging, in court or through any governmental authority, agency, or
instrumentality or otherwise, after the Effective Date the validity,
interpretation, scope, or other effects of any of the Reorganized Debtor’s
assets consisting of any U.S. or foreign patents, copyrights, trademarks, trade
secrets, or other intellectual property, including without limitation the
Debtor’s Patent No. 7,269,636 presently being re-examined by the Patent and
Trademark Office.

(c)           The rights, claims, interests, and defenses of Yahoo! set forth in
sections 10.3(a) and (b) above shall not, whether directly or indirectly, be or
be deemed enjoined, stayed, discharged, negated, barred, eliminated, or
otherwise adversely affected by the Plan, except that Yahoo! shall not seek to
impose on the Sponsor or the Reorganized Debtor, Debtor liabilities existing
prior to the Effective Date for acts or omissions of the Debtor prior to the
Effective Date. The Yahoo! Rights shall be free and clear of any other provision
in the Plan, in each case as to acts, omissions, transactions, events,
circumstances, conditions, or matters that arise, continue in effect, or exist
after the Effective Date.
 

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ARTICLE XI
INJUNCTIONS, RELEASES, AND DISCHARGE

11.1           Discharge and Release

Except as otherwise expressly provided in the Plan, the rights afforded in the
Plan and the treatment of all Claims and Interests shall be in exchange for and
in complete satisfaction, discharge, and release of all Claims and Interests of
any nature whatsoever, against the Debtor or its Estate, assets, properties or
interests in property. Except as otherwise provided herein, or in any Plan
Documents, on the Effective Date, all Claims against and Interests in the Debtor
shall be satisfied, discharged, and released in full.  The Reorganized Debtor
and other Protected Parties shall not be responsible or liable for any duties,
obligations, responsibilities, or liabilities of the Debtor except those
expressly assumed by them in the Plan.

11.2           Discharge Injunction

Except as otherwise expressly provided in the Plan, the discharge and release
set forth in Section 11.1 shall also operate as an injunction permanently
prohibiting and enjoining the commencement or continuation of any action or the
employment of process with respect to, or any act to collect, recover from, or
offset (a) any Claim discharged and released in Section 11.1 and (b) any cause
of action, whether known or unknown, based on the same subject matter as any
Claim discharged and released in Section 11.1. Except as otherwise expressly
provided in the Plan, all Persons shall be precluded and forever barred from
asserting against the Protected Parties, their successors or assigns, or their
assets, properties, or interests in property any other or further Claims, or any
other right to legal or equitable relief regardless of whether such right can be
reduced to a right to payment, based upon any act or omission, transaction, or
other activity of any kind or nature that occurred prior to the Effective Date,
whether or not the facts of or legal bases therefor were known or existed prior
to the Effective Date.

 
11.3
Exoneration and Reliance

To the extent allowed by law, none of the Protected Parties shall be liable
(other than for parties in interest in this Bankruptcy Case with respect to
criminal liability under applicable law, willful misconduct or bad faith under
applicable law, or ultra vires acts under applicable law) to any holder of a
Claim, or Interest or any other Person with respect to any action, omission,
forbearance from action, decision, or exercise of discretion taken from the
Petition Date through the Effective Date in connection with (a) the management
or operation of the Debtor or the discharge of its duties under the Bankruptcy
Code, (b) the solicitation, negotiation, or implementation of any of the
transactions provided for, or contemplated in, the Plan or other Plan Documents,
(c) any action taken in connection with either the enforcement of the rights of
the Debtor against any Persons or the defense of Claims asserted against the
Debtor with regard to the Bankruptcy Case or otherwise, (d) any action taken in
the negotiation, formulation, preparation, development, proposal, solicitation,
disclosure, confirmation, or implementation of the Plan, other Plan Documents,
or any other settlement, contract or transaction with the Estate, (e) the
administration of the Plan or the assets and property to be distributed pursuant
to the Plan or any other order of the Bankruptcy Court, or (f) the
administration of the Debtor’s Estate. The Protected Parties shall be deemed to
have participated in the Bankruptcy Case and each Bankruptcy Court-approved
transaction or contract with the Debtor in good faith and in compliance with all
applicable provisions of the Bankruptcy Code, which shall apply
exclusively.  Nothing in this Section 12.3 shall prevent the enforcement of the
terms of the Plan.

 
11.4
Additional Releases

To the extent allowed by applicable law, on, and as of, the Effective Date and
for good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the Protected Parties (acting in any capacity whatsoever) shall be
forever released and discharged from any and all Claims, obligations, actions,
suits, rights, debts, accounts, causes of action, remedies, avoidance actions,
agreements, promises, damages, judgments, demands, defenses, or claims in
respect of equitable subordination, and liabilities throughout the world under
any law or court ruling through the Effective Date (including all Claims based
on or arising out of facts or circumstances that existed as of or prior to the
Plan in the Bankruptcy Case, including Claims based on negligence or strict
liability, and further including any derivative claims asserted on behalf of the
Debtor, whether known or unknown, foreseen or unforeseen, existing or
hereinafter arising, in law, equity or otherwise, that the Debtor, its Estate,
or the Reorganized Debtor would have been legally entitled by applicable law to
assert in its own right, whether individually or collectively) which the Debtor,
its Estate, the Reorganized Debtor, Creditors or other Persons receiving or who
are entitled to receive Distributions under the Plan may have against any of
them in any way related to the Bankruptcy Case or the Debtor (or its
predecessors); provided, however, the releases provided for in this paragraph
shall not extend to any claims by any Governmental Unit  with respect to
criminal liability under applicable law, willful misconduct or bad faith under
applicable law, or ultra vires acts under applicable law.  No compliance with or
reliance on the applicable law or the orders of the Bankruptcy Court shall be
deemed or permitted to be judged, declared, or ruled to be in any way wrongful,
in bad faith, ultra vires, inequitable or otherwise subject to any sanction or
punishment, all of which are preempted, superseded and negated by the Plan to
the maximum extent permitted by applicable law.

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11.5
Exculpation

To the extent allowed by law, except in the case of a judicial finding by a
Final Order of willful misconduct or bad faith, or any criminal liability or
liability for ultra vires acts asserted by any Governmental Unit, no Protected
Party (acting in any capacity whatsoever) shall be liable to any Person for any
action, failure or omission to act or other matter related to the Debtor or the
Bankruptcy Case through and including the Effective Date. All Persons are
permanently enjoined from initiating a suit against any Protected Party, except
in the case of a judicial finding by a Final Order of actions for willful
misconduct or bad faith, or any criminal liability or liability for ultra vires
acts asserted by any Governmental Unit.  Any such action by a non-Governmental
Unit shall be brought in the Bankruptcy Court within 90 days after the Effective
Date.  Nothing in this Section 11.5 will prevent the enforcement of the terms of
the Plan.

ARTICLE XII
RETENTION OF JURISDICTION

12.1           Exclusive Bankruptcy Court Jurisdiction

Notwithstanding the entry of the Confirmation Order or the occurrence of the
Effective Date, the Bankruptcy Court shall retain and have such jurisdiction
over the Bankruptcy Case to the maximum extent as is legally permissible,
including, without limitation, for the following purposes:

(a)           To allow, disallow, determine, liquidate, classify or establish
the priority or secured or unsecured status of or estimate any Right of Action,
Claim or Equity Interest, including, without limitation, the resolution of any
request for payment of any Administrative Claim and the resolution of any and
all objections to the allowance or priority of Claims or Equity Interests;

(b)           To ensure that Distributions to holders of Allowed Claims are
accomplished pursuant to the provisions of the Plan;

(c)           To determine any and all applications or motions pending before
the Bankruptcy Court on the Effective Date of the Plan, including without
limitation any motions for the rejection, assumption or assumption and
assignment of any Executory Contract;

(d)           To consider and approve any modification of the Plan, remedy any
defect or omission, or reconcile any inconsistency in the Plan, or any order of
the Bankruptcy Court, including the Confirmation Order;

(e)           To determine all controversies, suits and disputes that may arise
in connection with the interpretation, enforcement or consummation of the Plan
or any Plan Documents or any entity’s obligations in connection with the Plan or
any Plan Documents, or to defend any of the rights, benefits, Estate Property
transferred, created, or otherwise provided or confirmed by the Plan or the
Confirmation Order or to recover damages or other relief for violations thereof;

(f)           To consider and act on the compromise and settlement of any claim
or cause of action by or against the Debtor, the Reorganized Debtor or the
Distribution Trust;

(g)           To decide or resolve any and all applications, motions, adversary
proceedings, contested or litigated matters, and any other matters, or grant or
deny any applications involving the Debtor that may be pending on the Effective
Date or that may be brought by the Reorganized Debtor, or the Distribution
Trustee (as applicable), including claims arising under Chapter 5 of the
Bankruptcy Code, or any other related proceedings by the Reorganized Debtor, and
to enter and enforce any default judgment on any of the foregoing;

(h)           To issue orders in aid of execution and implementation of the Plan
or any Plan Documents to the extent authorized by section 1142 of the Bankruptcy
Code or provided by the terms of the Plan;

(i)           To decide issues concerning the federal or state tax liability of
the Debtor which may arise in connection with the confirmation or consummation
of the Plan or any Plan Documents;

(j)           To interpret and enforce any orders entered by the Bankruptcy
Court in the Bankruptcy Case; and

(k)           To enter an order closing this Bankruptcy Case when all matters
contemplating the use of such retained jurisdiction have been resolved and
satisfied.

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12.2           Limitation on Jurisdiction

In no event shall the provisions of the Plan be deemed to confer in the
Bankruptcy Court jurisdiction greater than that established by the provisions of
28 U.S.C. §§ 157 and 1334, as well as the applicable circumstances that continue
jurisdiction for defense and enforcement of the Plan and Plan Documents.  For
the avoidance of doubt, however, such jurisdiction shall be deemed, by the entry
of the Confirmation Order, to:

(a)           Permit entry of a final judgment by the Bankruptcy Court in any
core proceeding referenced in 28 U.S.C. § 157(b) and to hear and resolve such
proceedings in accordance with 28 U.S.C. § 157(c) and any and all related
proceedings, including, without limitation, (i) all proceedings concerning
disputes with, or Rights of Action or Claims against, any Person that the Debtor
or the Reorganized Debtor or its successors or assigns, may have, and (ii) any
and all Rights of Action or other Claims against any Person for harm to or with
respect to (x) any Estate Property, including any infringement of  IP or
conversion of Estate Property, or (y) any Estate Property liened or transferred
by the Debtor to any other Person;

(b)           Include jurisdiction over the recovery of any Estate Property (or
property transferred by the Debtor with Bankruptcy Court approval) from any
Person wrongly asserting ownership, possession or control of the same, whether
pursuant to sections 542, 543, 549, 550 of the Bankruptcy Code or otherwise, as
well as to punish any violation of the automatic stay under section 362 of the
Bankruptcy Code or any other legal rights of the Debtor under or related to the
Bankruptcy Code; and

(c)           Permit the taking of any default judgment against any Person who
has submitted himself or herself to the jurisdiction of the Bankruptcy Court.

ARTICLE XIII
MISCELLANEOUS PROVISIONS

13.1           Conditions to Confirmation

The Confirmation Order will not be effective unless (a) the amount, priority or
extent of the administrative, priority or secured claims are satisfactory to the
Plan Sponsor in its reasonable discretion, (b) the Confirmation Order shall be
in form and substance acceptable to the Plan Sponsor, in its reasonable
discretion, and shall provide for the Plan Sponsor and the DIP Lender to acquire
the New Equity subject to the Subscription Option, free and clear of all Liens,
Claims, and encumbrances of any kind, except as otherwise provided in the Plan,
and (c) the final version of the Plan, Plan Supplement, and any other documents,
or schedules thereto, shall have been filed in form and substance acceptable to
the Plan Sponsor in its reasonable discretion.

13.2           Conditions to Effectiveness

The Plan will not be effective unless (a) the conditions to confirmation above
have been either satisfied, or waived, by the Plan Sponsor, (b) the Confirmation
Order has been entered by the Bankruptcy Court, and no stay or injunction is in
effect with respect thereto, (c) Plan Sponsor and the DIP Lender shall acquire
the New Equity subject to the Subscription Option, free and clear of all Liens,
Claims, and encumbrances of any kind, except as otherwise provided in the Plan,
and (d) no material adverse change or development shall have occurred with
respect to the Debtor’s IP or capital structure of the Debtor.

13.3           Exemption from Transfer Taxes

The Plan and the Confirmation Order provide for (a) the issuance, transfer or
exchange of notes, debt instruments and equity securities under or in connection
with the Plan; (b) the creation, assignment, recordation or perfection of any
lien, pledge, other security interest or other instruments of transfer; (c) the
making or assignment of any lease; (d) the creation, execution and delivery of
any agreements or other documents creating or evidencing the formation of the
Reorganized Debtor or the issuance or ownership of any interest in the
Reorganized Debtor; or (e) the making or delivery of any deed or other
instrument of transfer under the Plan in connection with the vesting of the
Debtor’s assets in the Reorganized Debtor or the Distribution Trustee pursuant
to or in connection with the Plan, including, without limitation, merger
agreements, stock purchase agreement, agreements of consolidation,
restructuring, disposition, liquidation or dissolution, and transfers of
tangible property.  Pursuant to section 1146 of the Bankruptcy Code and the
Plan, any such act described or contemplated herein will not be subject to any
stamp tax, transfer tax, filing or recording tax, or other similar tax.

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13.4           Securities Exemption

Any rights issued under, pursuant to or in effecting the Plan, including,
without limitation, the New Equity in the Reorganized Debtor or the Beneficial
Interest in the Distribution Trust, and the offering and issuance thereof by any
party, including without limitation the Proponents or the Estate, shall be
exempt from Section 5 of the Securities Act of 1933, if applicable, and from any
state or federal securities laws requiring registration for offer or sale of a
security or registration or licensing of an issuer of, underwriter of, or broker
or dealer in, a security, and shall otherwise enjoy all exemptions available for
Distributions of securities under a plan of reorganization in accordance with
all applicable law, including without limitation section 1145 of the Bankruptcy
Code. If the issuance of the New Equity does not qualify for an exemption under
section 1145 of the Bankruptcy Code, the New Equity shall be issued in a manner,
which qualifies for any other available exemption from registration, whether as
a private placement under Rule 506 of the Securities Act, Section 4(2) of the
Securities Act, and/or the safe harbor provisions promulgated thereunder.

13.5           Defects, Omissions and Amendments of the Plan

The Proponents may, with the approval of the Bankruptcy Court and without notice
to holders of Claims and Equity Interests, insofar as it does not materially and
adversely affect holders of Claims and Equity Interests, correct any defect,
omission, or inconsistency in the Plan in such a manner and to such extent
necessary or desirable to expedite the execution of the Plan.  The Proponents
may propose amendments or alterations to the Plan before the Confirmation
Hearing as provided in section 1127 of the Bankruptcy Code if, in the opinion of
the Bankruptcy Court, the modification does not materially and adversely affect
the interests of holders of Claims, so long as the Plan, as modified, complies
with sections 1122 and 1123 of the Bankruptcy Code and the Debtor has complied
with section 1125 of the Bankruptcy Code.  The Proponents may propose amendments
or alterations to the Plan after the Confirmation Date but prior to substantial
consummation, in a manner that, in the opinion of the Bankruptcy Court, does not
materially and adversely affect holders of Claims, so long as the Plan, as
modified, complies with sections 1122 and 1123 of the Bankruptcy Code, the
Proponents have complied with section 1125 of the Bankruptcy Code, and after
notice and a hearing, the Bankruptcy Court confirms such Plan, as modified,
under section 1129 of the Bankruptcy Code.

13.6           Withdrawal of Plan

The Proponents reserve the right to withdraw the Plan at any time prior to the
Confirmation Date. If the Proponents withdraw the Plan prior to the Confirmation
Date, or if the Confirmation Date or the Effective Date does not occur, then the
Plan shall be deemed null and void. In such event, nothing contained herein
shall be deemed to constitute an admission, waiver or release of any claims by
or against the Debtor or any other person, or to prejudice in any manner the
rights of the Debtor, the Debtor’s Estate, or any person in any further
proceedings involving the Debtor.

13.7           Due Authorization By Creditors

Each and every Creditor who elects to participate in the Distributions provided
for herein warrants that the Creditor is authorized to accept in consideration
of its Claim against the Debtor the Distributions provided for in the Plan, and
that there are no outstanding commitments, agreements, or understandings,
express or implied, that may or can in any way defeat or modify the rights
conveyed or obligations undertaken by the Creditor under the Plan.

13.8           Filing of Additional Documentation
 
Fourteen (14) days prior to the Effective Date, the Debtor may file with the
Bankruptcy Court such Plan Supplement, agreements and other documents as may be
reasonably necessary or appropriate to effectuate and further evidence the terms
and conditions of the Plan or any Plan Document, which shall also constitute
“Plan Documents.”

13.9           Governing Law

Except to the extent the Bankruptcy Code or the Bankruptcy Rules are applicable,
the rights and obligations arising under the Plan shall be governed by, and
construed and enforced in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of law thereof.

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13.10           Successors and Assigns

The rights, benefits and obligations of any entity named or referred to in the
Plan or any Plan Document shall be binding on, and shall inure to the benefit
of, any heir, executor, administrator, successor or assign of such entity.

13.11           Transfer of Claims

Any transfer of a claim shall be in accordance with Bankruptcy Rule 3001(e) and
the terms of this Section 13.11.  Notice of any such transfer shall be forwarded
to the Debtor by registered or certified mail, as set forth in Section 13.12
hereof.  Both the transferee and transferor shall execute any notice, and the
signatures of the parties shall be acknowledged before a notary public.  The
notice must clearly describe the interest in the claim to be transferred.  No
transfer of a partial interest shall be allowed.  All transfers must be of one
hundred percent (100%) of the transferor’s interest in the claim.

13.12           Notices

Any notice required to be given under the Plan or any Plan Document shall be in
writing.  Any notice that is allowed or required hereunder except for a notice
of change of address shall be considered complete on the earlier of (a) three
(3) days following the date the notice is sent by United States mail, postage
prepaid, or by overnight courier service, or in the case of mailing to a
non-United States address, air mail, postage prepaid, or personally delivered;
(b) the date the notice is actually received by the Persons on the
Post-Confirmation Service List by facsimile or computer transmission; or (c)
three (3) days following the date the notice is sent to those Persons on the
Post-Confirmation Service List as it is adopted by the Bankruptcy Court at the
hearing on confirmation of the Plan, as such list may be amended from
time-to-time by written notice from the Persons on the Post-Confirmation Service
List.

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(a)           If to the Debtor, at:

Hipcricket, Inc.
c/o Pachulski Stang Ziehl & Street
10100 Santa Monica Blvd., 13th Floor
Los Angeles, California 90067
Attn: Ira Kharasch and Linda Cantor
Email: ikharasch@pszjlaw.com
Email: lcantor@pszjlaw.com

 
(b)
If to the Plan Sponsor, at:

ESW Capital, LLC
c/o Haynes and Boone, LLP
1221 McKinney Street, Suite 2100
Houston, Texas 77010
Attention: Charles A. Beckham, Jr.
Email: charles.beckham@haynesboone.com
Fax: 713-236-5638

and

30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Attention: Trevor R. Hoffmann
Email: trevor.hoffmann@haynesboone.com
Fax: 212-884-9558

 
(c)
If to the DIP Lender, at:

ESW Capital, LLC
c/o Haynes and Boone, LLP
1221 McKinney Street, Suite 2100
Houston, Texas 77010
Attention: Charles A. Beckham, Jr.
Email: charles.beckham@haynesboone.com
Fax: 713-236-5638

and

30 Rockefeller Plaza, 26th Floor
New York, NY 10112
Attention: Trevor R. Hoffmann
Email: trevor.hoffmann@haynesboone.com
 
Fax: 212-884-9558

 
(d)
If to the U.S. Trustee, at:

Office of the United States Trustee
Andrew R. Vara, Acting United States Trustee, Region 3
c/o Jane M. Leamy
844 King Street, Room 2207
Lockbox #35
Wilmington, DE 19899-0035
Fax: 302-573-6497

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(e)
If to the Committee, at

Committee of Unsecured Creditors of Hipcricket, Inc.
c/o Pepper Hamilton LLP
Hercules Plaza, Suite 5100
1313 Market Street
P.O. Box 1709
Wilmington, DE 19899-1709
Attn: Donald J. Detweiler and Henry Jon Jaffe
Email: detweilerd@pepperlaw.com
Email: jaffeh@pepperlaw.com
Fax: (302) 421-8390

and

Committee of Unsecured Creditors of Hipcricket, Inc.
c/o Cooley LLP
The Grace Building
1114 Avenue of the Americas
New York, NY 10036-7798
Attn: Jay Indyke and Jeffrey L. Cohen
Email: jindyke@cooley.com
Email: jcohen@cooley.com
Fax: (212) 479-6275

 
(f)
If to any Creditor or Interest Holder in his capacity as such, at his address or
facsimile number as listed on the Post-Confirmation Service List.

13.13           U.S. Trustee Fees

The Debtor will pay pre-confirmation fees owed to the U.S. Trustee on or before
the Effective Date of the Plan.  After confirmation, the Distribution Trustee
will file with the court and serve on the U.S. Trustee quarterly financial
reports in a format prescribed by the U.S. Trustee, and the Distribution Trustee
will pay post-confirmation quarterly fees to the U.S. Trustee until a final
decree is entered or the case is converted or dismissed as provided in 28 U.S.C.
§ 1930(a)(6).

13.14           Implementation

The Debtor, the Reorganized Debtor, the Plan Sponsor, and the Distribution
Trustee shall be authorized to perform all reasonable, necessary and authorized
acts to consummate the terms and conditions of the Plan and the Plan Documents.

13.15           No Admissions

Notwithstanding anything herein to the contrary, nothing contained in the Plan
shall be deemed an admission by the Debtor with respect to any matter set forth
herein, including, without limitation, liability on any Claim or Equity Interest
or the propriety of the classification of any Claim or Equity Interest.

ARTICLE XIV
SUBSTANTIAL CONSUMMATION

14.1           Substantial Consummation

The Plan shall be deemed substantially consummated on the Effective Date.

[Remainder of Page Intentionally Left Blank]

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14.2           Final Decree
 
On full consummation and performance of the Plan and Plan Documents, the
Distribution Trustee may request the Bankruptcy Court to enter a final decree
closing the Bankruptcy Case and such other orders that may be necessary and
appropriate.

Dated:  March 20, 2015

Hipcricket, Inc.

       /s/                                
Todd Wilson
Chief Executive Officer
110 110th Avenue NE, Suite 410
Bellevue, Washington 98005
Debtor and Debtor-in-Possession and Proponent

ESW Capital, LLC

       /s/                                
Andrew Price
Chief Financial Officer
401 Congress Ave., Suite 2650
Austin, Texas 78701
Plan Sponsor and Proponent
 
 

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