UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
)
FF HOLDINGS CORPORATION, and ) Case No.
FARM FRESH, INC., ) Case No.
)
)
Debtors. )
JOINT PLAN OF REORGANIZATION PROPOSED BY
FF HOLDINGS CORPORATION AND FARM FRESH, INC.
FF Holdings Corporation and Farm Fresh, Inc., propose the following
joint plan of reorganization pursuant to Chapter 11 of the Bankruptcy Code.
ARTICLE I
DEFINITIONS
The following terms used in the Plan shall have the meanings specified
below, and such meanings shall be equally applicable to both the singular and
plural forms of such terms, unless the context otherwise requires. Terms defined
in the Disclosure Statement shall have the same meanings when used herein. Any
term used in the Plan, whether or not capitalized, that is not defined in the
Plan or in the Disclosure Statement, but that is defined in the Bankruptcy Code
or Bankruptcy Rules, shall have the meaning set forth in the Bankruptcy Code or
the Bankruptcy Rules.
1.1 Administrative Claims: The collective reference to all
Claims for costs and expenses of administration of these Cases with priority
under Bankruptcy Code ss.507(a)(1), including without limitation all Claims of
the DIP Facility Lenders arising under the DIP Facility, any adjustment to the
Cash Sale Proceeds in favor of the Buyer pursuant to Section 2.4(b) of the
Purchase Agreement, costs and expenses allowed under Bankruptcy Code ss.503(b),
the actual and necessary costs and expenses of preserving the estates of the
Debtors and operating the business of the Debtors, any indebtedness or
obligations incurred or assumed by the Debtors, professional fees and expenses
of the Debtors and the Committee, and any fees or charges assessed against the
estates of the Debtors under 28 U.S.C. ss.1930, but specifically excluding items
in any of the above categories that constitute Assumed Liabilities, which shall
be the sole responsibility of the Buyer.
1.2 Affiliate: This term shall have the meaning assigned to it
in Bankruptcy Code ss.101(2); provided, however, that where the context so
requires, the term "debtor" in such section shall mean that entity to which the
defined term "Affiliate" refers.
1.3 Allowance Date: The date a Claim or Interest becomes an
Allowed Claim or an Allowed Interest, respectively.
1.4 Allowed Administrative Claim: Any Administrative Claim
that is an Allowed Claim; provided, however, that a Holder of any Administrative
Claim arising prior to the Effective Date -- other than for goods or
non-professional services provided to the Debtors during the bankruptcy
proceedings in the ordinary course of business and Claims arising under the DIP
Facility -- must file a request for payment on or before 30 days after the
Effective Date in order to have such Administrative Claim eligible to be
considered an Allowed Administrative Claim.
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1.5 Allowed Claim: Any Claim against the Debtors to the extent
that (i) such Claim has not been withdrawn, paid in full, or otherwise deemed
satisfied in full, (ii) proof of such Claim was filed on or before the Claims
Filing Bar Date (or, if not filed by such date, any Claim filed with leave of
the Bankruptcy Court, after notice and a hearing), and (iii) no objection to the
allowance of such Claim has been interposed on or before the Claims Objection
Bar Date or such objection having been so interposed, such Claim is allowed by a
Final Order. Unless otherwise specified, "Allowed Claim" shall not include (i)
punitive or exemplary damages, or (ii) any fine, penalty, or forfeiture.
1.6 Allowed Class . . . Claim: Any Allowed Claim in the
particular Class described.
1.7 Allowed Class . . . Interest: Any Allowed Interest in the
particular Class described.
1.8 Allowed Interest: Any Interest in the Debtors in the
amount and of the priority classification set forth in any proof of such
Interest that has been filed or deemed filed timely in these Cases or filed late
with leave of the Bankruptcy Court, after notice and a hearing, or in the
absence of such proof, as set forth in the Stockholder List, unless (i) such
Interest has been listed as disputed, contingent, or unliquidated, in which case
such Interest shall be allowed only in such amount and such classification as is
authorized by Final Order of the Bankruptcy Court, (ii) such Interest has been
or may be objected to on or before the Claims Objection Bar Date, in which case
such Interest shall be allowed only in such amount and such classification as is
authorized by Final Order of the Bankruptcy Court, or (iii) such Interest has
been paid in full, withdrawn, or otherwise deemed satisfied in full.
1.9 Allowed Priority Claim: Any Priority Claim that is an
Allowed Claim.
1.10 Allowed Tax Claim: Any Tax Claim that is an Allowed
Claim.
1.11 Allowed Unsecured Claim: Any Unsecured Claim that is an
Allowed Claim.
1.12 Asset Sale: The sale of the Purchased Assets to, and
the assumption of the Assumed Liabilities by, the Buyer pursuant to the
Purchase Agreement.
1.13 Assets: All of the right, title, and interest of the
Debtors in any and all assets and property, whether tangible, intangible, real,
or personal, that constitute property of the Debtors' estates within the purview
of Bankruptcy Code ss.541, including without limitation, Bankruptcy Claims and
any and all claims, causes of action, or rights of the Debtors under federal or
state law.
1.14 Assumed Liabilities: All of the liabilities of Farm
Fresh assumed by the Buyer in the Purchase Agreement and as defined therein.
1.15 Available Cash: The reference to Available Farm Fresh
Cash and/or Available Holdings Cash, as appropriate.
1.16 Available Farm Fresh Cash: The sum of the following cash
and proceeds available for distribution pursuant to Section 6.5 of the Plan: all
cash or cash equivalents constituting the Assets of Farm Fresh or the proceeds
thereof including, but not limited to, the Cash Sale Proceeds, the amounts
otherwise available to Holders of Allowed Class 3A and 5A Claims (to the extent
that the Holders of Allowed Class 3B Claims have not been paid the full amount
of such Allowed Claims), and all other bank deposits, certified or cashier's
checks, and other similar items, and such additional funds thereafter received
by Farm Fresh or Reorganized Farm Fresh related to the Assets of Farm Fresh, as
the result of the liquidation of Residual Assets, or otherwise, less:
(a) Any amounts required to be reserved for or
paid by Farm Fresh or Reorganized Farm Fresh to the Holders of Allowed
Administrative or Tax Claims against Farm Fresh or the Holders of Allowed Class
1, 2A, 2B, 3C, or 3D Claims;
(b) Any payments required to be reserved for
or made on account of reasonable and necessary fees and expenses of agents,
advisors, and professionals employed or engaged by Farm Fresh or Reorganized
Farm Fresh for the benefit of the Creditors and Interest Holders of Farm Fresh,
any taxes payable by Farm Fresh or Reorganized Farm Fresh, and other expenses
incurred by Reorganized Farm Fresh in connection with the post-Effective Date
activities of Reorganized Farm Fresh related to the Assets of Farm Fresh, the
litigation or other resolution of Disputed Claims and Disputed Interests against
Farm Fresh or any remaining causes of action by or against Farm Fresh, the
liquidation of the Residual Assets, the winding up of the affairs of Farm Fresh,
or otherwise; and
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(c) Any other payments that Reorganized Farm Fresh is
required to make or reserve for under the Plan related to Farm Fresh.
1.17 Available Holdings Cash: The sum of the following cash
and proceeds available for distribution pursuant to Section 6.6 of the Plan: all
cash or cash equivalents constituting the Assets of Holdings or the proceeds
thereof including, but not limited to, distributions received on account of
Allowed Class 3C Claims and Class 4 Interests, and all other bank deposits,
certified or cashier's checks, and other similar items, and such additional
funds thereafter received by Holdings or Reorganized Farm Fresh related to the
Assets of Holdings, less:
(a) Any amounts required to be reserved
for or paid to the Holders of Allowed Administrative or Tax Claims against
Holdings;
(b) Any payments required to be reserved for
or made on account of reasonable and necessary fees and expenses of agents,
advisors, and professionals employed or engaged by Holdings or Reorganized Farm
Fresh for the benefit of the Creditors and Interest Holders of Holdings, any
taxes payable by Holdings, and other expenses incurred by Reorganized Farm Fresh
in connection with the post-Effective Date activities of Reorganized Farm Fresh
related to the Assets of Holdings, the litigation or other resolution of
Disputed Claims and Disputed Interests against Holdings or any remaining causes
of action by or against Holdings, the winding up of the affairs of Holdings, or
otherwise; and
(c) Any other payments that Reorganized Farm Fresh is
required to make or reserve for under the Plan related to Holdings.
1.18 Bankruptcy Claims: All claims, rights, and causes of
action created in favor of the Debtors under the Bankruptcy Code, including but
not limited to all preference, fraudulent conveyance, and other avoidance
claims, rights, and causes of action arising under Bankruptcy Code ss.ss.542
through 553.
1.19 Bankruptcy Code: The Bankruptcy Reform Act of 1978, Title
11, United States Code, as amended from time to time.
1.20 Bankruptcy Court: The United States Bankruptcy Court for
the District of Delaware or any other court of competent jurisdiction exercising
jurisdiction over these Cases.
1.21 Bankruptcy Rules: The Federal Rules of Bankruptcy
Procedure, promulgated under Section 2075, Title 28, United States Code, as
amended from time to time.
1.22 Business Day: A day other than a Saturday, Sunday, or
"legal holiday" (as such term is defined in Bankruptcy Rule 9006(a)) or any
other day on which commercial banks in New York, New York are authorized or
required by law to close.
1.23 Buyer: FF Acquisition, or such other entity as may be
approved by the Debtors, by the Committee, and by the Bankruptcy Court to
purchase the Purchased Assets in accordance with the terms of Purchase
Agreement.
1.24 (These) Cases: The cases for the reorganization of the
Debtors commenced by voluntary petition under Chapter 11 of the Bankruptcy Code,
filed on the Petition Date, in the Bankruptcy Court.
1.25 Cash Sale Proceeds: The cash proceeds received from the
Buyer under the Purchase Agreement, subject to the working capital adjustment
contained therein.
1.26 Chapter 11: Chapter 11 of the Bankruptcy Code.
1.27 Claim: Any right to payment from the Debtors arising, or
with respect to which the obligation giving rise to such right has been
incurred, before the Effective Date, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured; or any right
arising, or with respect to which the obligation giving rise to such right has
been incurred, before the Effective Date to an equitable remedy for breach of
performance if such breach gives rise to a right to payment from the Debtors,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured.
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1.28 Claims Filing Bar Date: The date designated by Final
Order of the Bankruptcy Court as the last date for filing Proofs of Claim (other
than with respect to Administrative Claims).
1.29 Claims Objection Bar Date: The last date for filing an
objection in respect of any Proof of Claim (other than with respect to
Administrative Claims and Claims for damages arising out of the rejection of
Executory Contracts) or Interest, which date shall be 60 days after the later of
the Effective Date or the date such Claim or Interest is filed.
1.30 Class: A category, designated herein, of Holders of
Claims or Interests that are substantially similar to the other Claims or
Interests in such category as specified in Article II of the Plan.
1.31 Committee: The informal steering committee of Senior
Noteholders, initially composed of PPM America Special Investments Fund, LP,
Moore Capital Management, Inc., and Conseco Capital Management.
1.32 Confirmation: The entry by the Bankruptcy Court of an
order confirming the Plan in accordance with the provisions of Chapter 11.
1.33 Confirmation Date: The date upon which the
Confirmation Order is entered on the docket by the Clerk of the Bankruptcy
Court.
1.34 Confirmation Order: The order of the Bankruptcy Court
confirming the Plan.
1.35 Convertible Debentures Subordination Provisions:
The subordination and related provisions contained in the Convertible
Indenture.
1.36 Convertible Indenture: The Indenture dated as of March 1,
1985, as amended, between Farm Fresh and Crestar Bank (successors to United
Virginia Bank), as trustee.
1.37 Convertible Subordinated Debentures: The 7.5% Convertible
Subordinated Debentures due in 2010, issued by Farm Fresh in March, 1985,
pursuant to the Convertible Indenture.
1.38 Creditor: Any entity that is the Holder of any Allowed
Claim against the Debtors that arose (or is based on an obligation incurred) on
or before the Petition Date, including, without limitation, any Allowed Claim
against the Debtors' estates of a kind specified in Bankruptcy Code ss.502(g),
(h), or (i).
1.39 Debtors: Holdings and Farm Fresh.
1.40 Debentureholders: Collectively, the Holders of
the Convertible Subordinated Debentures.
1.41 DIP Facility: The revolving credit facility to be
provided to the Debtors by the DIP Facility Lenders pursuant to Bankruptcy Code
ss.364, together with the documents, instruments, agreements, and orders of the
Bankruptcy Court authorizing and governing such facility.
1.42 DIP Facility Lenders: Fleet Capital Corporation, as agent
and lender, and Heller Financial, Inc., as lender, pursuant to the DIP Facility,
and their successors and assigns thereunder, or such other lenders as may be
approved by the Bankruptcy Court to provide the DIP Facility.
1.43 Disclosure Statement: The Disclosure Statement and all
supplements and exhibits thereto that relate to the Plan and that are approved
by the Bankruptcy Court pursuant to Bankruptcy Code ss.1125, as the same may be
amended or modified by the Debtors from time to time pursuant to the Bankruptcy
Code and the Bankruptcy Rules.
1.44 Disputed Claim: A Claim as to which a Proof of Claim has
been filed, or deemed filed under applicable law, as to which an objection has
been or may be timely filed and which objection, if timely filed, has not been
withdrawn on or before the Claims Objection Bar Date and has not been overruled
or denied by a Final Order. Prior to the Claims Objection Bar Date, for the
purposes of the Plan, a Claim shall be considered a Disputed Claim in its
entirety if: (i) the amount of the Claim specified in the Proof of Claim exceeds
the amount of any corresponding Claim scheduled by the Debtors in their
Schedules of Assets and Liabilities; (ii) any corresponding Claim scheduled by
the Debtors in their Schedules of Assets and Liabilities has been scheduled as
disputed, contingent, or unliquidated, irrespective of the amount scheduled; or
(iii) no corresponding Claim has been scheduled by the Debtors in their
Schedules of Assets and Liabilities.
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1.45 Disputed Claims Reserve: This term shall have the
meaning set forth in Section 6.10(a) of the Plan.
1.46 Disputed Interest: An Interest as to which a Proof of
Interest has been filed, or deemed filed under applicable law, as to which an
objection has been or may be timely filed and which objection, if timely filed,
has not been withdrawn on or before the Claims Objection Bar Date and has not
been overruled or denied by a Final Order. Prior to the Claims Objection Bar
Date, for the purposes of the Plan, an Interest shall be considered a Disputed
Interest in its entirety if: (i) the amount of the Interest specified in the
Proof of Interest exceeds the amount of any corresponding Interest set forth in
the Stockholder List; (ii) the priority classification of the Interest specified
in the Proof of Interest is higher than the priority classification of any
corresponding Interest set forth in the Stockholder List; (iii) any
corresponding Interest set forth in the Stockholder List has been listed as
disputed, contingent, or unliquidated either as to amount or to priority
classification; or (iv) no corresponding Interest has been set forth in the
Stockholder List.
1.47 Effective Date: The first Business Day: (a) that is at
least 13 days after the Confirmation Date; (b) on which no stay of the
Confirmation Order is in effect; and (c) on which all conditions in Article VIII
of the Plan have been satisfied or have been waived as provided in the Plan.
1.48 Executory Contract: Any executory contract or unexpired
lease, subject to Bankruptcy Code ss.365, between one of the Debtors and any
other Person or Persons, specifically excluding contracts and agreements entered
into pursuant to the Plan.
1.49 Farm Fresh: Debtor Farm Fresh, Inc., a Virginia
corporation.
1.50 Farm Fresh Common Stock: The common stock, par value $.01
per share, of Farm Fresh, which has constituted and shall constitute the sole
class of capital stock in Farm Fresh at all times during these Cases prior to
and on the Effective Date, and any options, warrants, or rights, contractual or
otherwise, to acquire such shares of common stock.
1.51 Farm Fresh Employees: The present and former employees
(including retirees) of Farm Fresh.
1.52 FF Acquisition: FF Acquisition, L.L.C., a Virginia
limited liability company, wholly-owned by Richfood.
1.53 Final Order: An order or judgment entered by the
Bankruptcy Court that has not been reversed, stayed, modified, or amended and
that has not been and may no longer be appealed from or otherwise reviewed or
reconsidered, as a result of which such order or judgment shall have become
final and non-appealable in accordance with Bankruptcy Rule 8002.
1.54 Holder: The beneficial owner of any Claim or Interest,
which, in the case of an investment company, shall be the investment company and
not its stockholders, and in the case of an insurance company, shall be the
insurance company and not its insureds.
1.55 Holdings: Debtor FF Holdings Corporation, a Delaware
corporation that owns 100% of the Farm Fresh Common Stock.
1.56 Holdings Common Stock: The Class A, Class B, and Class C
common stock, par value $.01 per share, of Holdings, which, along with the
Holdings Preferred Stock, have constituted and shall constitute the sole classes
of capital stock in Holdings at all times during these Cases prior to and on the
Effective Date, and any options, warrants, or rights, contractual or otherwise,
to acquire such shares of common stock.
1.57 Holdings Indenture: The Indenture dated as of October 1,
1992, as amended, between Holdings and First Bank, National Association, as
Trustee.
1.58 Holdings Noteholders: Collectively, the Holders of the
Holdings Notes.
1.59 Holdings Notes: The 14.25% Senior Notes due October 1,
2002, issued by Holdings on October 9, 1992, and those provided in an exchange
offer in early 1993, in either case pursuant to the Holdings Indenture.
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1.60 Holdings Notes Subordination Provisions: The
subordination and related provisions contained in the Holdings Indenture.
1.61 Holdings Preferred Stock: The 14.25% cumulative preferred
stock of Holdings, with a liquidation value of $100 per share, and any options,
warrants, or rights, contractual or otherwise, to acquire such preferred stock.
1.62 Initial Distribution Date: The first Business Day that is
5 Business Days after the Effective Date or such other date as the Bankruptcy
Court may order.
1.63 Interest: An ownership interest in the Debtors as
evidenced by capital stock of the Debtors and any rights to any dividends or
distributions as a result of such ownership.
1.64 New Common Stock: The common stock, par value $.01 per
share, of Reorganized Farm Fresh to be issued on the Effective Date and
distributed in the manner provided by the Plan.
1.65 Notes: Collectively, the Senior Notes, the Convertible
Subordinated Debentures, and the Holdings Notes.
1.66 Old Credit Agreement: The Revolving Credit Agreement,
dated as of December 10, 1993, as amended, among Farm Fresh, as borrower,
Holdings, as guarantor, and the Old Credit Agreement Banks, together with all
documents, instruments, and agreements related thereto or entered into in
connection therewith.
1.67 Old Credit Agreement Banks: Fleet Bank, N.A. (as
successor to NatWest USA Credit Corp.), as agent and lender, and Heller
Financial, Inc., as lender, pursuant to the Old Credit Agreement, and their
successors and assigns thereunder.
1.68 Old Credit Agreement Claims: All Claims of the Old Credit
Agreement Banks arising under or relating to the Old Credit Agreement, which,
for purposes of the Plan, shall be deemed to be Allowed and fully Secured
Claims, less the sum of all payments made in cash by the Debtors to the Old
Credit Agreement Banks prior to the Effective Date on account of such Claims
pursuant to the interim order approving the DIP Facility under Bankruptcy Code
ss.364.
1.69 Person: An individual, a corporation, a partnership, an
association, a joint stock company, a joint venture, an estate, a trust, an
unincorporated organization, a government or any political subdivision thereof,
or any other entity.
1.70 Petition Date: The date upon which the petitions for
relief under Chapter 11 with respect to the Debtors were filed.
1.71 Plan: The Plan of Reorganization proposed by the Debtors
set forth herein, and all supplements and exhibits thereto, as the same may be
amended or modified by the Debtors from time to time pursuant to the Plan, the
Bankruptcy Code, and the Bankruptcy Rules.
1.72 Priority Claims: All Claims that are entitled to priority
pursuant to Bankruptcy Code ss.507(a) or (b) and that are not Administrative
Claims or Tax Claims.
1.73 Proof of Claim: Any written statement filed under oath in
these Cases by a Creditor in which such Creditor sets forth the amount owed and
sufficient detail to identify the basis for a Claim.
1.74 Proof of Interest: Any written statement filed under oath
in these Cases by an Interest Holder in which such Interest Holder sets forth
the amount and priority of such Interest with sufficient detail to identify the
basis for an Interest.
1.75 Pro Rata: Proportionately, so that a Pro Rata
distribution with respect to an Allowed Claim or an Allowed Interest of a
particular Class bears the same ratio to all distributions (and, in the case of
Disputed Claims or Disputed Interests, allocations) on account of a particular
Class or Classes, as the dollar amount of such Allowed Claim or Allowed Interest
bears to the dollar amount of all Allowed Claims or Allowed Interests and
Disputed Claims or Disputed Interests in such Class or Classes.
1.76 Purchase Agreement: The Asset Purchase Agreement, dated
as of November 26, 1997, by and among Farm Fresh, Richfood, and FF Acquisition
(without giving effect to any modifications thereof or amendments thereto), or
(i) such modifications thereof or amendments thereto as may be approved by the
Debtors, Richfood, FF Acquisition, the Committee, and the Bankruptcy Court, or
(ii) such other agreement for the purchase of the Purchased Assets by a party
other than FF Acquisition as may be approved by the Debtors, the Committee, and
the Bankruptcy Court.
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1.77 Purchased Assets: Those Assets of Farm Fresh sold and
assigned to, and purchased by, the Buyer pursuant to the Asset Sale.
1.78 Rejection Claims: All Claims arising as a result of the
Debtors' rejection of Executory Contracts pursuant to Bankruptcy Code ss.ss.365
and 1123, subject to the limitations provided in Bankruptcy Code ss.502(b).
1.79 Reorganized Farm Fresh: Farm Fresh, as reorganized
pursuant to the Plan and the Confirmation Order.
1.80 Residual Assets: Collectively, all of the Assets of Farm
Fresh other than the Purchased Assets, including without limitation the Excluded
Assets (as defined in the Purchase Agreement) and the Bankruptcy Claims, if any.
1.81 Richfood: Richfood Holdings, Inc., a Virginia
corporation.
1.82 Secured Claims: All Claims that are secured by a valid,
perfected, enforceable, and non-avoidable lien on any of the Assets of one of
the Debtors or that are subject to setoff under Bankruptcy Code ss.553, to the
extent of the value of the interest of each Holder of such Claim in such
Debtor's interest in the liened Assets or to the extent of the amount of the
setoff, as applicable, provided, however, that if the Holder's Class timely
elects application of Bankruptcy Code ss.1111(b)(2), each Holder's Claim in such
Class shall be a Secured Claim in the full amount of the Holder's Allowed Claim.
1.83 Senior Noteholders: Collectively, the Holders of the
Senior Notes.
1.84 Senior Notes: The 12.25% Senior Notes due October 1,
2000, issued by Farm Fresh on October 9, 1992, and December 13, 1993 (Series A),
and those provided in an exchange offer in May, 1994 (Series A), pursuant to
those certain Indentures dated as of October 1, 1992, and December 13, 1993,
respectively.
1.85 Stockholder List: The listing of stockholders of the
Debtors filed by the Debtors in these Cases, as the same may be amended or
modified by the Debtors from time to time.
1.86 Tax Claims: All Claims that are entitled to
priority under Bankruptcy Code ss.507(a)(8) (excluding Assumed Liabilities).
1.87 Trade Claims: All Unsecured Claims of ordinary
course suppliers of goods and services to Farm Fresh.
1.88 Unsecured Claims: All Claims that are neither Secured
Claims nor entitled to priority under the Bankruptcy Code or an order of the
Bankruptcy Court, excluding Claims that are subordinated pursuant to Bankruptcy
Code ss.510.
1.89 Warrants: Warrants to purchase shares of Richfood, as
more fully defined in the Purchase Agreement.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
In accordance with Bankruptcy Code ss.1123(a)(1), Administrative Claims and Tax
Claims have not been classified and are excluded from the following Classes.
(Article III describes the treatment of Administrative Claims and Tax Claims.)
For the purposes of the Plan, Holders of Claims against, or Interests in, the
Debtors are grouped as follows in accordance with Bankruptcy Code ss.1122(a):
2.1 Class 1 - Priority Claims. Class 1 consists of all
Allowed Priority Claims.
2.2 Class 2 - Secured Claims Against Farm Fresh.
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(a) Class 2A - Old Credit Agreement Claims.
Class 2A consists of all Old Credit Agreement Claims.
(b) Class 2B - Other Secured Claims Against
Farm Fresh. Class 2B consists of all Allowed Secured Claims against Farm Fresh
other than the Old Credit Agreement Claims.
2.3 Class 3. Unsecured Claims Against Farm Fresh.
(a) Class 3A - Convertible Subordinated
Debentures Claims. Class 3A consists of all Allowed Claims of the
Debentureholders under or in connection with the Convertible Subordinated
Debentures, to the extent that such Debentures are outstanding and have not been
canceled.
(b) Class 3B - Senior Notes Claims. Class 3B
consists of all Allowed Claims of the Senior Noteholders under or in connection
with the Senior Notes.
(c) Class 3C - General Unsecured Claims
Against Farm Fresh. Class 3C consists of all Allowed Unsecured Claims against
Farm Fresh not otherwise classified in this Article II, including without
limitation Rejection Claims against Farm Fresh; Claims of Debentureholders under
or in connection with the Convertible Subordinated Debentures, to the extent
that such Debentureholders have exercised their conversion privilege in
accordance with the terms of the Convertible Subordinated Debentures prior to
the Petition Date; and Holdings' Claims against Farm Fresh.
(d) Class 3D - Trade Claims Against Farm
Fresh. Class 3D consists of all Allowed Trade Claims against Farm Fresh.
2.4 Class 4 - Farm Fresh Common Stock Interests. Class 4
consists of all Allowed Interests of the Holder of Farm Fresh Common Stock under
or in connection with such Farm Fresh Common Stock.
2.5 Class 5. Unsecured Claims Against Holdings.
(a) Class 5A - Holdings Notes Claims. Class
5A consists of all Allowed Claims of the Holders of the Holdings Notes under or
in connection with the Holdings Notes.
(b) Class 5B - General Unsecured Claims
Against Holdings. Class 5B consists of all Allowed Unsecured Claims against
Holdings not otherwise classified in this Article II.
2.6 Class 6 - Holdings Preferred Stock Interests. Class 6
consists of all Allowed Interests of the Holders of Holdings Preferred Stock
under or in connection with such Holdings Preferred Stock.
2.7 Class 7 - Holdings Common Stock Interests. Class 7
consists of all Allowed Interests of the Holders of Holdings Common Stock under
or in connection with such Holdings Common Stock.
ARTICLE III
TREATMENT OF ADMINISTRATIVE AND TAX CLAIMS
3.1 Administrative Claims. Each Holder of an Allowed Administrative
Claim shall receive in full satisfaction of such Allowed Claim cash equal to the
amount of such Claim on the later of (i) the Initial Distribution Date and (ii)
the date that is 10 days after the Allowance Date, unless such Holder shall have
agreed to different treatment of such Allowed Claim; provided, however, that
Allowed Administrative Claims representing obligations incurred in the ordinary
course of business and assumed by the Debtors shall be paid or performed in
accordance with the terms and conditions of the particular transactions and any
agreements relating thereto, and the Allowed Claims of the DIP Facility Lenders
under the DIP Facility shall be paid the full amount of their Allowed Claims on
the Effective Date.
3.2 Tax Claims. Each Holder of an Allowed Tax Claim shall receive in
full satisfaction of such Allowed Claim cash equal to the amount of such Claim
on the later of (i) the Initial Distribution Date and (ii) the date that is 10
days after the Allowance Date, unless such Holder shall have agreed to different
treatment of such Allowed Claim.
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ARTICLE IV
TREATMENT OF CLASSES THAT ARE NOT IMPAIRED UNDER THE PLAN
4.1 Unimpaired Classes. Classes 1, 2A, 2B, and 3D are unimpaired.
Therefore, pursuant to Bankruptcy Code ss.1126(f), the Holders of Allowed Claims
in such Classes are conclusively presumed to have accepted the Plan.
4.2 Class 1 - Priority Claims. Each Holder of an Allowed Class 1 Claim
shall receive in full satisfaction of such Allowed Claim cash equal to the
amount of such Allowed Claim on the latest of (i) the Initial Distribution Date,
(ii) the date that is 10 days after the Allowance Date, and (iii) the date when
such Allowed Claim becomes due and payable according to its terms and
conditions.
4.3 Class 2A - Old Credit Agreement Claims. Each Holder of an Allowed
Class 2A Claim shall be paid in full in cash the amount of its Allowed Class 2A
Claim on the Effective Date if it has not been paid off in full prior to that
date.
4.4 Class 2B - Secured Claims Against Farm Fresh. Each Holder of an
Allowed Class 2B Claim shall receive in full satisfaction of such Allowed Claim
either (i) cash equal to the amount of such Allowed Claim on the Effective Date,
or (ii) if included in the Assumed Liabilities, payments by the Buyer in
accordance with the original terms of the underlying obligations.
4.5 Class 3D - Trade Claims Against Farm Fresh. Each Holder of an
Allowed Class 3D Claim shall either (i) have been paid by Farm Fresh during the
pendency of the Cases pursuant to an order or orders of the Bankruptcy Court
authorizing Farm Fresh to pay certain creditors under certain circumstances,
(ii) be paid in full by Farm Fresh on the Effective Date or when such payments
become due by their terms after the Effective Date, if such Claims are not
included in the Assumed Liabilities, or (iii) be paid in full by the Buyer on
the Effective Date or when such payments become due by their terms after the
Effective Date, if such Claims are included in the Assumed Liabilities. To the
extent that the Trade Claims covered by subpart (ii), above, exceed $300,000 in
the aggregate, the excess portion(s) of all such Claims shall be treated as
Class 3C Claims, unless the Committee agrees, in writing, to permit such Claims
to be treated as Class 3D Claims.
ARTICLE V
TREATMENT OF CLASSES THAT ARE IMPAIRED UNDER THE PLAN
5.1 Impaired Classes. Classes 3A, 3B, 3C, 4, 5A, 5B, 6, and 7 are
impaired and, therefore, the Holders of Allowed Claims in such Classes are
entitled to vote to accept or reject the Plan.
5.2 Class 3A - Convertible Subordinated Debentures Claims. Each Holder
of an Allowed Class 3A Claim shall be entitled to receive in full satisfaction
of such Allowed Claim a percentage of such Allowed Claim in cash, on the later
of (i) the Initial Distribution Date and (ii) the date that is 10 days after the
Allowance Date, which percentage shall equal the percentage that Holders of
Allowed Class 3B Claims are anticipated, as of the Effective Date, to receive
(taking into account the value -- determined in good faith by Farm Fresh and the
Committee, or in the absence of an agreement, by the Bankruptcy Court -- of the
New Common Stock, the Warrants, and anticipated Available Farm Fresh Cash (but
without deducting therefrom cash distributions to Holders of Allowed Class 3A
Claims), but excluding any amounts included in such Available Farm Fresh Cash by
virtue of the Convertible Debentures Subordination Provisions and the Holdings
Notes Subordination Provisions). However, because of the existence of the
Convertible Debentures Subordination Provisions, until the Holders of Allowed
Class 3B Claims have been paid the full amount of such Allowed Claims, all such
cash shall not be paid to the Holders of Allowed Class 3A Claims, but rather
shall be included with Available Farm Fresh Cash to be distributed to the
Holders of Allowed Class 3B Claims, in accordance with Section 6.5 of the Plan.
5.3 Class 3B - Senior Notes Claims. Each Holder of an Allowed Class 3B
Claim shall receive in full satisfaction of such Allowed Claim such Holder's Pro
Rata share of the New Common Stock, the Warrants, and Available Farm Fresh Cash
to be allocated or distributed to the Holders of all Allowed Class 3B Claims,
until each such Holder is paid the full amount of its Allowed Class 3B Claim.
Such distributions of Available Farm Fresh Cash shall be made from time to time
in accordance with the terms of Section 6.5 of the Plan. However, if any such
Holder was not an "accredited investor," as defined in Regulation D under the
Securities Act of 1933, at any time between November 24, 1997, and the Petition
Date, such Holder shall receive in full satisfaction of such Allowed Claim cash
of a percentage equal to the aggregate percentage recovery that "accredited
investor" Holders of Allowed Class 3B Claims receive (taking into account the
value -- determined in good faith by Farm Fresh and the Committee, or in the
absence of an agreement, by the Bankruptcy Court -- of the New Common Stock, the
Warrants, and anticipated Available Farm Fresh Cash).
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5.4 Class 3C - General Unsecured Claims Against Farm Fresh. Each Holder
of an Allowed Class 3C Claim shall receive in full satisfaction of such Allowed
Claim a percentage of such Allowed Claim in cash, on the later of (i) the
Initial Distribution Date and (ii) the date that is 10 days after the Allowance
Date, which percentage shall equal the percentage that Holders of Allowed Class
3B Claims are anticipated, as of the Effective Date, to receive (taking into
account the value -- determined in good faith by Farm Fresh and the Committee,
or in the absence of an agreement, by the Bankruptcy Court -- of the New Common
Stock, the Warrants, and anticipated Available Farm Fresh Cash (but without
deducting therefrom cash distributions to Holders of Allowed Class 3C Claims),
but excluding any amounts included in such Available Farm Fresh Cash by virtue
of the Convertible Debentures Subordination Provisions and the Holdings Notes
Subordination Provisions). With respect to the Debentureholders included in this
Class 3C, all such cash shall be paid directly to such Debentureholders. To the
extent that the Allowed Claims of such Debentureholders aggregate $750,000 or
less, they shall not be subject to the Claims of the Holders of Allowed Class 3B
Claims pursuant to the Convertible Debentures Subordination Provisions or
otherwise. To the extent that the Allowed Claims of such Debentureholders
aggregate in excess of $750,000, the Holders of Allowed Class 3B Claims reserve
all of their rights under the Convertible Debentures Subordination Provisions to
pursue remedies against the Debentureholders receiving payments pursuant to the
terms of the Plan for such amounts in excess of $750,000.
5.5 Class 4 - Farm Fresh Common Stock Interests. The Holder of Allowed
Class 4 Interests shall receive in full satisfaction of such Allowed Interests
all Available Farm Fresh Cash, if any, after each Holder of Allowed Class 1, 2A,
2B, 3A, 3B, 3C, and 3D Claims has been paid the full amount of such Claim, in
accordance with Section 6.5 of the Plan, and such Interests shall be canceled.
5.6 Class 5A - Holdings Notes Claims. Each Holder of an Allowed Class
5A Claim shall receive in full satisfaction of such Allowed Claim such Holder's
Pro Rata share, along with the Holders of Class 5B Claims, of Available Holdings
Cash, if any, until each such Holder is paid (directly or as provided below) the
full amount of its Allowed Class 5A Claim; however, because of the existence of
the Holdings Notes Subordination Provisions, until the Holders of Allowed Class
3B Claims are paid the full amount of such Allowed Claims, all such cash shall
not be paid to the Holders of Allowed Class 5A Claims, but rather shall be
included with Available Farm Fresh Cash to be distributed to the Holders of
Allowed Class 3B Claims, in accordance with Sections 6.5 and 6.6 of the Plan.
5.7 Class 5B - Unsecured Claims Against Holdings. Each Holder of an
Allowed Class 5B Claim shall receive in full satisfaction of such Allowed Claim
such Holder's Pro Rata share, along with the Holders of Class 5A Claims, of
Available Holdings Cash, if any, until each such Holder is paid the full amount
of its Allowed Class 5B Claim.
5.8 Class 6 - Holdings Preferred Stock Interests. Each Holder of an
Allowed Class 6 Interest shall receive in full satisfaction of such Allowed
Interest such Holder's Pro Rata share of Available Holdings Cash, if any, after
each Holder of an Allowed Class 5A and 5B Claim has been paid the full amount of
such Claim, until each such Holder is paid the full amount of any liquidation
preference to which it is entitled by the terms of the Holdings Preferred Stock
that it holds and all accrued and unpaid dividends thereon, if any, in
accordance with Section 6.6 of the Plan, and such Interests shall be canceled.
5.9 Class 7 - Holdings Common Stock Interests. Each Holder of an
Allowed Class 7 Interest shall receive in full satisfaction of such Allowed
Interest such Holder's Pro Rata share of Available Holdings Cash, if any, after
each Holder of an Allowed Class 5A and 5B Claim has been paid the full amount of
such Claim, and after each Holder of an Allowed Class 6 Interest has been paid
the full amount of any liquidation preference to which it is entitled by the
terms of the Holdings Preferred Stock that it holds and all accrued and unpaid
dividends thereon, if any, in accordance with Section 6.6 of the Plan, and such
Interests shall be canceled.
5.10 Distribution Limitations. Notwithstanding any other provision of
the Plan to the contrary, no distribution shall be made on account of any Claim
or Interest, or part thereof, (i) that is not an Allowed Claim or an Allowed
Interest or (ii) that has been avoided or is subject to any objection.
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 Dissolution. After the Confirmation Date, but prior to the
Effective Date, the Board of Directors of Holdings shall take such actions as
are necessary and appropriate to cause, as of the Effective Date, the
dissolution of Holdings, including but not limited to the designation and
authorization of an officer to file certificates of dissolution with the
appropriate secretaries of state and to take such other actions as such officer
deems appropriate to effect such dissolution. Pursuant to such dissolution, any
Assets of dissolved Holdings shall be distributed to Reorganized Farm Fresh to
be administered in accordance with the terms of the Plan.
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6.2 Asset Sale.
(a) Confirmation of the Plan is premised on the
consummation of the transactions contemplated to occur on the Closing Date (as
defined in the Purchase Agreement) under the Purchase Agreement.
(b) Pursuant to the procedures set forth in the
Purchase Agreement, or such other procedures as may be approved or ordered by
the Bankruptcy Court that are not inconsistent in any material respect with the
Purchase Agreement, Farm Fresh and the Buyer shall consummate the Asset Sale on
the Effective Date.
(c) As part of the consummation of the Asset
Sale, pursuant to the Purchase Agreement and the Plan, on the Effective Date,
except to the extent provided in the Purchase Agreement, the Buyer shall acquire
the Purchased Assets free and clear of all claims, debts, liens, security
interests, encumbrances, and interests, whether such claims, debts, liens,
security interests, encumbrances, or interests are against the Purchased Assets
or against the Debtors, with such claims, debts, liens, security interests,
encumbrances, and interests to attach to the proceeds of such Purchased Assets,
to be distributed in accordance with the Plan.
(d) Other than the Assumed Liabilities, or
as specifically set forth in the Purchase Agreement, the Buyer, in acquiring
the Purchased Assets, is not assuming any of the Debtors' liabilities for any
expenses, debts, obligations, liabilities, claims, demands, fines, or penalties
arising out of or in any way related to the Purchased Assets or the operation of
the Debtors' business.
(e) If the consummation of the Asset Sale
does not occur on the Effective Date, then the Confirmation Order shall be
deemed vacated and of no further force or effect.
6.3 Boards of Directors of the Debtors Pre- and Post-Effective
Date. Those members of the Debtors' Boards of Directors who are serving as of
the Confirmation Date shall continue to serve in such capacities until the
Effective Date (or the date of dissolution, in the case of Holdings). On the
Effective Date, the members of the Farm Fresh Board of Directors shall be deemed
to have resigned. On the date of Holdings' dissolution, the members of the
Holdings Board of Directors shall be deemed to have resigned. As of the
Effective Date, the Board of Directors of Reorganized Farm Fresh shall consist
of those individuals selected by the Committee and disclosed to the Bankruptcy
Court pursuant to Bankruptcy Code ss.1129(a)(5) on or before the Confirmation
Date.
6.4 Administration of the Plan.
(a) After the Effective Date, Reorganized
Farm Fresh shall perform those responsibilities, duties, and obligations set
forth herein, including without limitation to liquidate any Residual Assets in
accordance with the terms of a budget and guidelines to be approved by its Board
of Directors, to make distributions as provided under the Plan, to object to the
Allowance of any Claim and to prosecute any litigation pertaining thereto, to
pay such Claims as may be later Allowed, all as contemplated by the dispute
resolution procedures contained in Section 6.10 of the Plan, and to wind up the
remaining affairs of Reorganized Farm Fresh.
(b) Reorganized Farm Fresh may retain such
management, law firms, accounting firms, experts, advisors, agents,
consultants, investigators, appraisers, auctioneers, or other professionals as
it may deem necessary, including without limitation a disbursing agent, to aid
it in the performance of its responsibilities pursuant to the terms of the Plan.
Reorganized Farm Fresh shall pay such management and professionals reasonable
compensation for services rendered and expenses incurred on its behalf.
(c) The compensation and reimbursement of
expenses to be paid to the management of Reorganized Farm Fresh and to those
Persons employed or engaged by Reorganized Farm Fresh pursuant to Section 6.4(b)
of the Plan shall be paid prior to each distribution of Available Cash. These
rights to payment shall be prior and superior to the rights of all Holders of
Allowed Claims who are entitled to receive distributions of Available Cash.
(d) The Board of Directors and the management
of the Debtors and Reorganized Farm Fresh shall perform the duties and
obligations imposed on them by the Plan with reasonable diligence and care under
the circumstances.
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(e) The Board of Directors and management of
the Debtors and Reorganized Farm Fresh, and any of the professionals employed
or engaged by such entities, shall be defended, held harmless, and indemnified
by Reorganized Farm Fresh, against any and all losses, claims, costs, expenses,
and liabilities to which such indemnified parties may be subject by reason of
such indemnified parties' execution of the duties of the Debtors and Reorganized
Farm Fresh under the Plan.
(f) Reorganized Farm Fresh shall be
responsible for filing all federal, state, and local tax returns for the
Debtors and for Reorganized Farm Fresh.
(g) To the extent the manner of performance
is not specified, the Debtors and Reorganized Farm Fresh will have the
discretion to carry out and perform all other obligations or duties imposed on
them by the Plan or by law in any manner their respective Board of Directors so
chooses, as long as such performance is consistent with the intents and purposes
of the Plan.
6.5 Obtaining and Distributing Available Farm Fresh
Cash.
(a) Reorganized Farm Fresh shall reserve
funds in an amount estimated to be sufficient for the satisfaction of
anticipated Administrative Claims against Farm Fresh and for reasonable
compensation and reimbursement of expenses to Persons it employs related to Farm
Fresh. In the event that any amount reserved for such payments is in excess of
actual Allowed Administrative Claims and actual allowed compensation and
expenses to Persons employed by Reorganized Farm Fresh related to Farm Fresh,
such excess amount shall then be included in Available Farm Fresh Cash and
distributed in accordance with the Plan.
(b) To the extent there exists sufficient Available
Farm Fresh Cash from time to time, Reorganized Farm Fresh shall make Pro Rata
distributions of such Available Farm Fresh Cash to the Holders of Allowed Class
3B Claims at least quarterly beginning with the Initial Distribution Date;
provided, however, that Reorganized Farm Fresh shall not be required to make any
such quarterly distribution in the event that Available Farm Fresh Cash then
available for distribution is less than $250,000.
(c) To the extent there exists Available Farm Fresh
Cash after payment in full of all Allowed Class 3B Claims, Reorganized Farm
Fresh shall make a distribution or distributions of such Available Farm Fresh
Cash to the Holder of Allowed Class 4 Interests.
6.6 Obtaining and Distributing Available Holdings Cash.
(a) Reorganized Farm Fresh shall reserve
funds in an amount estimated to be sufficient for the satisfaction of
anticipated Administrative Claims against Holdings and for reasonable
compensation and reimbursement of expenses to Persons it employs related to
Holdings. In the event that any amount reserved for such payments is in excess
of actual Allowed Administrative Claims and actual allowed compensation and
expenses to Persons employed by Reorganized Farm Fresh related to Holdings, such
excess amount shall then be included in Available Holdings Cash and distributed
in accordance with the Plan.
(b) To the extent there exists sufficient Available
Holdings Cash from time to time, Reorganized Farm Fresh shall make Pro Rata
distributions of such Available Holdings Cash to the Holders of Allowed Class 5A
and 5B Claims (provided, however, that pursuant to the Holdings Notes
Subordination Provisions, until the Holders of Allowed Class 3B Claims have been
paid the full amount of such Claims, any amounts payable to the Holders of
Allowed Class 5A Claims shall not be paid to the Holders of Allowed Class 5A
Claims, but rather shall be included with Available Farm Fresh Cash) at least
quarterly beginning with a calendar quarter that is not later than the end of
the second calendar quarter after the Effective Date; provided, however, that
Reorganized Farm Fresh shall not be required to make any such quarterly
distribution in the event that Available Holdings Cash then available for
distribution is less than $250,000.
(c) To the extent there exists Available Holdings
Cash after all Holders of Allowed Class 5A and 5B Claims have been paid in full
(taking into account amounts paid to Holders of Class 3B Claims on behalf of
Holders of Class 5A Claims pursuant to the Holdings Notes Subordination
Provisions), Reorganized Farm Fresh shall make a distribution or distributions
of such Available Holdings Cash to the Holders of Allowed Class 6 Interests
until each such Holder is paid the full amount of any liquidation preference to
which it is entitled by the terms of the Holdings Preferred Stock that it holds
and all accrued and unpaid dividends thereon, if any.
(d) To the extent there exists Available Holdings
Cash after all Holders of Allowed Class 6 Interests have been paid the full
amount of any liquidation preference to which they are entitled by the terms of
the Holdings Preferred Stock that they hold and all accrued and unpaid dividends
thereon, if any, Reorganized Farm Fresh shall make a distribution or
distributions of such Available Holdings Cash to the Holders of Allowed Class 7
Interests.
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6.7 Provisions Relating to Existing Notes and Existing
Stock.
(a) As of the Effective Date, each of the
Notes shall be of no further force and effect, without any further action on the
part of the Debtors, and the Holders thereof shall have no rights, and such
instruments shall evidence no rights, except the right to receive distributions
in accordance with the Plan.
(b) No Holder of any of the Notes shall be
entitled to any distribution under the Plan unless and until such Holder has
first surrendered or caused to be surrendered to Reorganized Farm Fresh the
original Notes held by it or, in the event that such original Notes have been
lost, destroyed, stolen, or mutilated, has first executed and delivered an
affidavit of loss and indemnity with respect thereto in form customarily
utilized for such purposes that is reasonably satisfactory to Reorganized Farm
Fresh and, in the event Reorganized Farm Fresh so requests, has first furnished
a bond in form and substance (including, without limitation, amount) reasonably
satisfactory to Reorganized Farm Fresh. As soon as practicable after such
surrender or such delivery of an affidavit of loss and indemnity and such
furnishing of a bond as provided in this Section 6.7(b), Reorganized Farm Fresh
shall make the distributions, if any, provided in the Plan. Promptly upon
surrender of such instruments, Reorganized Farm Fresh shall cancel the
applicable Notes.
(c) As of the Effective Date, the Farm Fresh
Common Stock, the Holdings Common Stock, and the Holdings Preferred Stock
shall be of no further force and effect, without any further action on the part
of the Debtors.
6.8 Delivery of Distributions; Unclaimed Property;
Undeliverable Distributions.
(a) Except as provided in Section 6.8(c),
distributions to Holders of Allowed Claims and Allowed Interests shall be made:
(i) at the addresses set forth on the respective Proofs of Claim filed by such
Holders; or (ii) at the addresses set forth in any written notices of address
change delivered to the Debtors or Reorganized Farm Fresh (if after the
Effective Date) after the date of any related Proof of Claim.
(b) In accordance with Bankruptcy Code ss.1143, any
Holder of any Note that fails to surrender the applicable security or deliver an
affidavit of loss and indemnity as provided herein within one year from and
after the later of the Effective Date or the applicable Allowance Date with
respect to such Claim, shall be deemed to have forfeited all rights and claims
and shall be forever barred from receiving any distributions under the Plan. In
such cases, any property held for distribution by Reorganized Farm Fresh on
account of an Allowed Claim based on such Note shall be redistributed in
accordance with the provisions of the Plan.
(c) If the distribution to the Holder of any
Allowed Claim or Allowed Interest is returned to Reorganized Farm Fresh as
undeliverable, no further distribution shall be made to such Holder unless and
until Reorganized Farm Fresh is notified in writing of such Holder's then
current address. Reorganized Farm Fresh shall retain undeliverable distributions
to be redistributed in accordance with the provisions of the Plan. Unclaimed
distributions shall be held in trust in a segregated bank account in the name of
Reorganized Farm Fresh, for the benefit of the potential claimants of such
funds, and shall be accounted for separately.
(d) Any Holder of an Allowed Claim or
Allowed Interest who does not assert a claim for an undeliverable distribution
within one year after the date by which such Holder was first entitled to such
distribution shall no longer have any claim to or interest in such undeliverable
distribution and shall be forever barred from receiving any distribution under
the Plan. In such cases, any property held for distribution on account of such
Claims or Interests shall be redistributed in accordance with the provisions of
the Plan as if such Claims or Interests were not Allowed Claims or Allowed
Interests.
(e) Nothing contained in the Plan shall
require the Debtors or Reorganized Farm Fresh to attempt to locate any Holder
of an Allowed Claim or Allowed Interest.
6.9 Manner of Payments Under the Plan. Any cash payment to be
made by Reorganized Farm Fresh pursuant to the Plan may be made by a check on a
United States bank selected by Reorganized Farm Fresh; provided, however, that
cash payments made to foreign Holders of Allowed Claims may be paid, at the
option of Reorganized Farm Fresh, in such funds and by such means as are
necessary or customary in a particular foreign jurisdiction.
6.10 Disputed Claims and Interests.
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(a) No distribution or payment shall be
made on a Disputed Claim or Disputed Interest until such Disputed Claim or
Disputed Interest becomes an Allowed Claim or Allowed Interest. On each
distribution date, the distributions reserved for the Holders of Disputed Claims
or Disputed Interests in each Class under the Plan shall be deposited in reserve
accounts segregated by the respective Classes in which the Disputed Claims or
Disputed Interests exist (each a "Disputed Claims Reserve").
(b) Notwithstanding any other provisions of
the Plan, Reorganized Farm Fresh shall withhold from the property to be
distributed under the Plan, in each Disputed Claims Reserve, a sufficient Pro
Rata share of the property to be distributed on account of the face amount of
Claims or Interests that are Disputed Claims or Disputed Interests in such Class
as of the date of the initial distribution of such Class under the Plan. For the
purposes of this provision, the "face amount" of a Claim is (i) the amount set
forth on the Proof of Claim or such lower amount as may be determined in
accordance with Section 6.10(c), unless the Claim is filed in an unliquidated
amount; or (ii) if a Proof of Claim has been filed in an unliquidated amount,
the amount determined in accordance with Section 6.10(c). For the purposes of
this provision, the "face amount" of an Interest is (i) the amount set forth on
the Proof of such Interest or such lower amount as may be determined in
accordance with Section 6.10(c), unless the Proof of Interest is filed in an
unliquidated amount; or (ii) if a Proof of Interest has been filed in an
unliquidated amount, the amount determined in accordance with Section 6.10(c).
In determining the amount of the Pro Rata distributions to the Holders of
Allowed Claims or Allowed Interests in any Class for which a Disputed Claims
Reserve has or will be established, the calculation of the amount of Pro Rata
distribution to each Holder of an Allowed Claim or Allowed Interest in such
Classes shall be made as if all Disputed Claims or Disputed Interests in the
applicable Class were Allowed Claims or Allowed Interests in their respective
face amounts.
(c) As to any Disputed Claim or Disputed
Interest (including, without limitation, any unliquidated Claim or Interest),
the Bankruptcy Court shall, upon motion by the Debtors or Reorganized Farm
Fresh, estimate the maximum allowable amount of such Disputed Claim or Disputed
Interest and the amount to be placed in the Disputed Claims Reserve on account
of such Disputed Claim or Disputed Interest. Any Creditor or Interest Holder
whose Claim or Interest is so estimated by an Order of the Bankruptcy Court
shall not have recourse to the Debtors or to Reorganized Farm Fresh, any assets
theretofore distributed on account of any Allowed Claim or Allowed Interest, or
any other entity or property if the finally Allowed Claim or Allowed Interest of
that Creditor or Interest Holder exceeds that maximum. Instead, such Creditor or
Interest Holder shall have recourse only to the undistributed assets (if any) in
the applicable Disputed Claims Reserve for the Claim or Interest of that
Creditor or Interest Holder and (on a Pro Rata basis with other Creditors or
Interest Holders of the same Class who are similarly situated) to those portions
(if any) of the Disputed Claims Reserve for other disputed and unliquidated
Claims or Interests of the same Class that exceed the ultimately allowed amount
of such Claims or Interests.
(d) All cash held in the Disputed Claims Reserve
accounts shall be invested in such investments as are described in Bankruptcy
Code ss.345. All earnings on such cash shall be held in trust in the Disputed
Claims Reserve accounts and shall be distributed only in the manner described in
the Plan.
(e) At such time as all or any portion of a
Disputed Claim or Disputed Interest becomes an Allowed Claim or Allowed
Interest, the distributions reserved for such Disputed Claim or Disputed
Interest or such portion, plus any earnings thereon, shall be released from the
appropriate Disputed Claims Reserve account and delivered to the Holder of such
Allowed Claim or Allowed Interest. At such time as all or any portion of any
Disputed Claim or Disputed Interest is determined not to be an Allowed Claim or
Allowed Interest, the distribution reserved for such Disputed Claim or Disputed
Interest or such portion, plus any earnings thereon, shall be released from the
appropriate Disputed Claims Reserve account and made available for
redistribution as Available Cash in the manner described in the Plan.
(f) (i) After the Confirmation Date, the
Debtors, and (ii) after the Effective Date, Reorganized Farm Fresh, shall have
the authority to object to, settle, compromise, withdraw, or litigate Disputed
Claims and Disputed Interests without Bankruptcy Court approval.
(g) Notwithstanding anything contained in
this Section 6.10 to the contrary, if there exists any Disputed Administrative
or Tax Claim, or any Disputed Class 1, 2A, 2B, or 3D (if not part of the Assumed
Liabilities) Claim, Reorganized Farm Fresh shall withhold in a separate reserve
account the "face amount" (as calculated under Section 6.10(b)) of any such
Disputed Claim until and to the extent such Claims are determined to be Allowed.
6.11 Bar Date for Objections to Claims and Interests. Unless
an earlier time is set by Final Order of the Bankruptcy Court, all objections to
Claims (other than with respect to Administrative Claims and Rejection Claims)
or Interests must be filed by the Claims Objection Bar Date; provided, however,
that no such objections may be filed against any Claim or Interest after the
Bankruptcy Court has determined that such Claim or Interest is an Allowed Claim
or Allowed Interest, as applicable. The failure by any party in interest,
including the Debtors, to object to any Claim, whether or not unpaid, for
purposes of voting shall not be deemed a waiver of such party's rights to object
to, or re-examine, any such Claim or Interest, as applicable, in whole or in
part.
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6.12 New Common Stock. On the Effective Date (or as soon
thereafter as is possible), 1,000,000 shares of New Common Stock, which shall
constitute all of the then issued and outstanding shares of New Common Stock,
shall be issued and distributed Pro Rata to the Holders of Allowed Class 3B
Claims. As of such issuance of New Common Stock, it shall be the only class of
equity securities of Reorganized Farm Fresh issued under the Plan or authorized
by the Articles of Incorporation of Reorganized Farm Fresh, which shall be
amended on or prior to the Effective Date to satisfy the provisions of the Plan
and Bankruptcy Code ss.1123(a)(6). Upon issuance of the shares of New Common
Stock pursuant to the Plan, all such shares of New Common Stock will be deemed
fully paid and nonassessable.
6.13 Warrants. On the Effective Date (or as soon thereafter as
is possible), the Warrants shall be issued and distributed Pro Rata to certain
Holders of Allowed Class 3B Claims in accordance with Section 5.3 of the Plan.
6.14 Direction to Parties. From and after the Effective Date,
Reorganized Farm Fresh may apply to the Bankruptcy Court for an order directing
any necessary party to execute or deliver or to join in the execution or
delivery of any instrument required to effect a transfer of property dealt with
by the Plan, and to perform any other act, including the satisfaction of any
lien, that is necessary for the consummation of the Plan, pursuant to Bankruptcy
Code ss.1142(b).
6.15 Setoffs. The Debtors shall, pursuant to Bankruptcy Code
ss.553, setoff against any Allowed Claim and the distributions to be made
pursuant to the Plan on account of such Claim, the claims, rights, and causes of
action of any nature that the Debtors may hold against the Holder of such
Allowed Claim that are not otherwise waived, released, or compromised in
accordance with the Plan; provided, however, that neither the failure to effect
such a setoff nor the allowance of any Claim hereunder shall constitute a waiver
or release by the Debtors of any such claims, rights, and causes of action that
either of the Debtors may possess against such Holder.
6.16 Preservation of Rights of Action. Except as otherwise
specified in the Plan, in accordance with Bankruptcy Code ss.1123(b), as of the
Effective Date, Reorganized Farm Fresh shall have the power (i) to institute and
present in the name of the Debtors, or otherwise, all proceedings which it may
deem proper in order to collect, assert, or enforce any claim, right, or title
of any kind in or to any of the Debtors' assets, and (ii) to defend and
compromise any and all actions, suits, or proceedings in respect of such assets.
ARTICLE VII
EXECUTORY CONTRACTS
7.1 Assumption of Executory Contracts. Executory Contracts will be
deemed assumed by Farm Fresh and assigned to the Buyer in accordance with the
provisions and requirements of Bankruptcy Code ss.ss.365 and 1123 and the
Purchase Agreement, except those Executory Contracts that (i) are assumed and
retained by Farm Fresh pursuant to the terms of the Plan or pursuant to an order
of the Bankruptcy Court, (ii) have been rejected by order of the Bankruptcy
Court, (iii) are the subject of a motion to reject pending on the Confirmation
Date, (iv) are identified as "to be rejected" on the list attached to the Plan
as Exhibit A-1, (v) are identified as "Non-Assumed Contracts" on Schedule 2.3D
of the Purchase Agreement, or (vi) are rejected pursuant to the terms of the
Plan. Rejection shall be effective as of the Confirmation Date or as of the
Effective Date, at the option of the Debtors.
7.2 Claims for Damages. Each Person who is a party to an Executory
Contract rejected pursuant to this Article VII shall be entitled to file, not
later than 30 days after such rejection (or as otherwise provided by Final Order
of the Bankruptcy Court), a Proof of Claim for alleged Rejection Claims. If no
such Proof of Claim for Rejection Claims is timely filed, any such Claim shall
be forever barred and shall not be enforceable against the Debtors or their
estates. Objections to any such Proof of Claim shall be filed not later than 90
days after such Proof of Claim is filed (or as otherwise provided by Final Order
of the Bankruptcy Court), and the Bankruptcy Court shall determine any such
objections. Payment of such Claims (consistent with the payments received by
Holders of other Claims in the Class into which such Claims fall, as determined
by Section 7.4 hereof) shall be made no earlier than the later of (a) 10 days
after the expiration of the 90-day period for filing an objection in respect of
any Proof of Claim filed pursuant to this Section 7.2 and (b) 10 days after the
Claim has been allowed by a Final Order, provided that no such payments shall be
made before the Effective Date.
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7.3 Classification of Claims. Except as otherwise provided under the
Plan, Rejection Claims against Farm Fresh shall be treated as Class 3C Claims,
and Rejection Claims against Holdings shall be treated as Class 5B Claims.
7.4 Insurance Policies. All insurance policies of the Debtors providing
coverage to the Debtors' directors, officers, shareholders, agents, employees,
representatives, and others for conduct in connection with the Debtors, to the
extent such policies are Executory Contracts, shall be deemed assumed by the
Debtors as of the Confirmation Date. Whether such policies are Executory
Contracts or not, if they have not done so already, on or prior to the Effective
Date, the Debtors (i) shall cure any defaults under such insurance policies and
(ii) shall purchase "tail" coverage for a period of six years with respect to
any such policies, all as a cost and expense of administering these Cases and
preserving the Debtors' estates, provided that the aggregate cost of such
assumption, cure, and "tail" does not exceed $600,000.
ARTICLE VIII
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS
8.1 Conditions to Confirmation. Confirmation of the Plan shall not
occur unless and until each of the following conditions has been satisfied or
waived, subject to Section 8.3, in writing by the Debtors and the Committee:
(a) The Confirmation Order shall be
acceptable in form and substance (i) to the Debtors and the Committee, (ii) to
the Buyer, subject to the qualifications contained in Section 8.4(a)(ii)(A) of
the Purchase Agreement, and (iii) to the DIP Facility Lenders, insofar as it
relates to the transactions contemplated by the DIP Facility; however, the
Committee, the Buyer, and the DIP Facility Lenders shall not be permitted to
unreasonably withhold their consent to the form and substance of the
Confirmation Order.
(b) The Purchase Agreement shall be in full
force and effect and binding on the parties thereto.
8.2 Conditions to Effectiveness. Notwithstanding any other
provision of the Plan or the Confirmation Order, the Effective Date of the Plan
shall not occur, and the Plan shall not be binding on any party, unless and
until each of the following conditions has been satisfied or waived, subject to
Section 8.3, in writing by the Debtors and the Committee:
(a) The Confirmation Order shall have been
entered on the docket by the Clerk of the Bankruptcy Court, and shall not have
been reversed, stayed, modified, or amended, and as to which the time for filing
a notice of appeal, or petition for certiorari, or request for reargument or
further review or rehearing shall have expired.
(b) All other documents provided for under the Plan
shall have been executed and delivered by the parties thereto, unless such
execution or delivery has been waived by the parties benefited by such
documents.
(c) Provided that the remaining conditions of this
Section 8.2 have been duly satisfied or waived, the Asset Sale shall have been
consummated.
(d) The Debtors shall have filed statements with the
Bankruptcy Court certifying that, in the Debtors' good faith belief, Allowed
Rejection Claims against Farm Fresh shall not exceed $7,000,000, in the
aggregate, excluding, in the case of nonresidential real property leases, any
taxes, insurance premiums, common area maintenance charges, cost escalators, and
any other non-rent charges that may arguably be due under such leases, and the
Committee, after having had a reasonable opportunity to review such statements
and the basis therefor, shall not have objected to the same on the sole ground
that the Debtors' good faith belief is incorrect.
(e) The Debtors shall have satisfied all of their
Obligations (as defined under the DIP Facility) under the DIP Facility, and the
DIP Facility shall have been terminated.
(f) The election by Farm Fresh under
Section 5.11(f)(ii) of the Purchase Agreement, regarding the retention of
either or both of Farm Fresh Stores 210 and 295, shall be reasonably acceptable
to the Committee, it being understood that (i) at least one of the two
alternatives for election will be reasonably acceptable to the Committee, and
(ii) within five days after Farm Fresh's notification of the Committee of its
election, the Committee shall inform Farm Fresh whether its election is
reasonably acceptable to the Committee, and if not, that the alternative
election is reasonably acceptable to the Committee.
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(g) The Effective Date shall occur no later than
March 5, 1998.
The Confirmation Order shall be deemed annulled at such time as a
condition to the Effective Date that has not been waived in a writing executed
by the Debtors and the Committee can no longer occur. If the Effective Date does
not occur for any reason, then the Plan shall be null and void and, in such
event, nothing contained herein shall be deemed to constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtors or any
other Person or to prejudice in any manner the rights of the Debtors or any
Person in any further proceedings (whether or not such proceedings involve the
Debtors).
8.3 Waiver of Conditions. The Debtors and the Committee may,
but shall have no obligation to, waive any conditions set forth in this Article
at any time, without notice, without leave of or order of the Bankruptcy Court,
and without any formal action other than proceeding to consummate the Plan, with
the exception of Sections 8.1(a) and 8.2(e), the waiver of which will also
require the consent of the DIP Facility Lenders, and with the exception of
Sections 8.1(a) and (b) and 8.2(a), (c), and (g), the waiver of which will also
require the consent of the Buyer. The failure to satisfy or waive any condition
may be asserted by the Debtors and the Committee regardless of the circumstances
giving rise to the failure of such conditions to be satisfied (including any
action or inaction by the Debtors).
ARTICLE IX
TITLE TO PROPERTY AND RELEASES
9.1 Vesting of Property. Except as otherwise provided in the Plan or
the Confirmation Order, upon the Effective Date, but retroactive to the
Confirmation Date, (a) Reorganized Farm Fresh shall continue to exist as a
separate corporate entity, with all the powers of a corporation under applicable
law and without prejudice to any right to alter or terminate such existence
(whether by merger or otherwise) under applicable state law, and (b) all
property of the estates of the Debtors, wherever situated, shall vest in
Reorganized Farm Fresh, subject to the provisions of the Plan and the
Confirmation Order. After the Effective Date, but retroactive to the
Confirmation Date, all property retained by Reorganized Farm Fresh pursuant
hereto shall be free and clear of all claims, debts, liens, security interests,
encumbrances, and interests of creditors and security holders of the Debtors,
except the obligation to perform according to the Plan, the Confirmation Order,
and the Purchase Agreement, and the claims, debts, liens, security interests,
encumbrances, and interests of Creditors and Interest Holders arising in
connection with or preserved by the Plan with respect to the Cash Sale Proceeds.
9.2 Non-Discharge. Pursuant to Bankruptcy Code ss.1141(d)(3), the
Confirmation Order shall not discharge Claims against the Debtors. However, no
Creditor or Interest Holder of the Debtors may receive any payment from, or seek
recourse against, any Assets that are to be distributed under the terms of the
Plan, except for those distributions expressly provided for under the Plan. All
Persons are precluded from asserting, against any property that is to be
distributed under the terms of the Plan, any claims, obligations, rights, causes
of action, liabilities, or equity interests based upon any act, omission,
transaction, or other activity of any kind or nature that occurred prior to the
Confirmation Date, other than as expressly provided for in the Plan, the
Confirmation Order, or the Purchase Agreement, whether or not (a) a Proof of
Claim based upon such debt is filed or deemed filed under Bankruptcy Code
ss.501; (b) a Claim based upon such debt is allowed under Bankruptcy Code
ss.502; or (c) the Holder of a Claim based upon such debt has accepted the Plan.
Except as otherwise provided in the Plan, the Confirmation Order, or the
Purchase Agreement, all Holders of Allowed Claims and Allowed Interests arising
prior to the Effective Date shall be permanently barred and enjoined from
asserting against the Debtors, their successors, or the Assets, any of the
following actions on account of such Allowed Claim or Interest: (a) commencing
or continuing in any manner any action or other proceeding on account of such
Claim or Interest against property to be distributed under the terms of the
Plan, other than to enforce any right to distribution with respect to such
property under the Plan; (b) enforcing, attaching, collecting, or recovering in
any manner any judgment, award, decree, or order against any of the property to
be distributed under the terms of the Plan, other than as permitted under
sub-paragraph (a) above; and (c) creating, perfecting, or enforcing any lien or
encumbrance against any property to be distributed under the terms of the Plan.
9.3 Post-Consummation Effect of Evidences of Claims or Interests.
Notes, stock certificates, and other evidences of Claims against or Interests in
the Debtors shall, effective upon the Effective Date, represent only the right
to participate in the distributions contemplated by the Plan, if any.
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9.4 Term of Injunctions or Stays. Unless otherwise provided, all
injunctions or stays provided for in these Cases pursuant to Bankruptcy Code
ss.105, ss.362, or otherwise, and in effect on the Confirmation Date, shall
remain in full force and effect until the Effective Date.
9.5 Releases.
(a) On the Effective Date, the rights
afforded to Holders of Allowed Claims and Allowed Interests (collectively, the
"Releasing Parties") by and in the Plan and the Exhibits thereto shall be in
exchange for and in complete release, satisfaction, and discharge of any and all
claims of any kind or nature arising on or prior to the Effective Date against
the Debtors or the Assets and any and all claims arising out of or related to
Claims or Interests that any Releasing Party has or may have against any Person
who at the Effective Date is, or at the Petition Date was, an Affiliate of the
Debtors or any Holder of an Allowed Claim or Allowed Interest (including without
limitation, the Old Credit Agreement Banks and the DIP Facility Lenders) or any
member of the Committee or any present or former shareholders, directors,
officers, employees, agents, advisors, attorneys, professional persons, and
representatives of the Debtors, each such Affiliate, each such Holder, and each
such member of the Committee, and their respective heirs, representatives,
successors, and assigns, in whatever capacity (collectively, with the Debtors,
the "Released Parties"), including without limitation, claims arising from
ownership of securities under fraudulent conveyance or other laws relating to
creditors' rights generally, claims with respect to securities laws, and claims
related to fiduciary obligations. The Releasing Parties deemed to have released
claims pursuant to this Section 9.5(a) shall be forever precluded from directly
or indirectly asserting any such claims against any of the Released Parties, or
their assets, or any of their Affiliates, or any of their present or former
directors, officers, employees, agents, advisors, attorneys, professional
persons, or representatives, or their respective heirs, representatives,
successors, or assigns. To the extent that any of the Releasing Parties may be
entitled to recover from any of the Released Parties, whether through the
Convertible Debentures Subordination Provisions, the Holdings Notes
Subordination Provisions, or otherwise, the proceeds of any claims released
herein (other than any such claims against the Debtors), whether brought by one
of the Releasing Parties or by any other Person, such Releasing Parties hereby
assign all of their right, title, and interest in such proceeds to the Released
Party against whom such proceeds are recovered. In addition, the Senior
Noteholders hereby assign all of their right, title, and interest in the
Convertible Debentures Subordination Provisions and the Holdings Notes
Subordination Provisions to such of the Released Parties who may be affected by
any action covered thereby.
(b) Except with respect to the rights under
the Holdings Notes Subordination Provisions and the proceeds assigned
pursuant to Section 9.5(a) hereof, on the Effective Date, the Released Parties
and the Debtors shall hereby be deemed to completely release any Releasing Party
from any and all claims of any kind or nature arising on or prior to the
Effective Date against any such Releasing Party or its assets or any of its
Affiliates, or any present or former shareholders, directors, officers,
employees, agents, advisors, attorneys, professional persons, or
representatives, and their respective heirs, representatives, successors, and
assigns, in whatever capacity; provided, however, that no such right or claim
shall be deemed released in connection with any and all Bankruptcy Claims, or in
connection with any adversary proceeding or contested matter pending on the
Confirmation Date. The Released Parties deemed to have released claims pursuant
to this Section 9.5(b) shall be forever precluded from asserting any such claims
against any Releasing Party, or its assets, or any of its Affiliates, or any of
its present or former directors, officers, employees, agents, advisors,
attorneys, professional persons, or representatives, or their respective heirs,
representatives, successors, or assigns.
(c) On the Effective Date, provided that FF
Acquisition is the Buyer, except with respect to obligations under the Purchase
Agreement, the Debtors on the one hand and Richfood and its Affiliates on the
other shall be deemed to have each released the other from any and all claims of
any kind or nature arising on or prior to the Effective Date. From and after the
Effective Date, the Debtors on the one hand and Richfood on the other shall be
forever precluded from directly or indirectly asserting any such released claims
against the other, their assets, or any of their Affiliates or any of their
present or former directors, officers, employees, agents, advisors, attorneys,
professional persons, or representatives, or their respective heirs,
representatives, successors, or assigns.
(d) Notwithstanding any provision of the
Plan to the contrary, the releases contained in this Section 9.5 shall not be
construed as or operate as a release of or limitation on (i) claims between and
among the Releasing Parties and the Released Parties that do not relate to or
involve the Debtors, or (ii) objections to Claims or Interests.
9.6 Release of Directors, Officers, Etc. On the Effective
Date, the Debtors, on their own behalf, and on behalf of all the Debtors'
stockholders and Creditors derivatively, hereby waive, release, and discharge
all present or former shareholders, directors, officers, employees, agents,
advisors, attorneys, professional persons, and representatives of the Debtors,
and their respective heirs, representatives, successors, and assigns, from all
liability based upon any act or omission related to past service with, for, or
on behalf of the Debtors or their Affiliates. The immediately preceding sentence
shall not, however, apply to (i) any indebtedness of any Person to the Debtors
for money borrowed by such Person, or (ii) any setoff or counterclaim that the
Debtors may have or assert against any Person, provided that the aggregate
amount thereof shall not exceed the aggregate amount of any Claims held or
asserted by such Person against the Debtors. Holders of Claims and Interests
against the Debtors shall be enjoined from commencing or continuing any action,
employment of process, or act to collect, offset, or recover any such claim that
could be brought on behalf of or in the name of the Debtors.
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9.7 Preservation of Insurance. Notwithstanding anything
provide herein to the contrary, the Plan shall not be deemed in any way to
diminish or impair the enforceability of any insurance policies that may cover
claims against the Debtors or any other Person.
ARTICLE X
MODIFICATION AND RESERVATION OF RIGHTS IN THE
EVENT OF NONACCEPTANCE OF THE PLAN
The Debtors hereby reserve the right to request that the Bankruptcy Court
confirm the Plan over the objection of any impaired Class or Interest in
accordance with the applicable provisions of Bankruptcy Code ss.1129(b). In the
event that any impaired Class or Classes of Allowed Claims or Allowed Interests
shall not accept the Plan, upon the written request of the Debtors filed with
the Bankruptcy Court, the Plan shall be modified, revised, and amended to
provide such treatment as set forth in such request, to assure that the Plan
does not discriminate unfairly, and is fair and equitable, with respect to the
Classes rejecting the Plan, and, in particular, the treatment necessary to meet
the requirements of Bankruptcy Code ss.1129(a) and (b) with respect to (i) the
rejecting Classes and (ii) any other Classes adversely affected by the
modifications caused by this Article, provided that such requested treatment is
reasonably acceptable to the Committee. In particular, the treatment of any
rejecting Classes or adversely affected Classes shall be modified and amended
from that set forth in Article V, even if less favorable, to the minimum
treatment necessary to meet the requirements of Bankruptcy Code ss.1129(a) and
(b). These modifications may include, but not be limited to, cancellation of all
amounts otherwise payable under the Plan to the rejecting Classes and to any
junior Classes affected thereby (even if such Classes previously accepted the
Plan) consistent with Bankruptcy Code ss.1129(b)(2)(B)(ii) and (C)(ii).
ARTICLE XI
RETENTION OF JURISDICTION
11.1 Claims and Actions. Following the Effective Date, the Bankruptcy
Court shall retain such jurisdiction over these Cases as is legally permissible,
including without limitation, such jurisdiction as is necessary to ensure that
the purposes and intent of the Plan are carried out. The Bankruptcy Court shall
also expressly retain jurisdiction: (a) to hear and determine all Claims against
the Debtors and (b) to enforce all causes of action that may exist on behalf of
the Debtors.
11.2 Retention of Additional Jurisdiction. Following the Effective
Date, the Bankruptcy Court shall also retain jurisdiction for the purpose of
classification of Claims and Interests, the re-examination of Claims and
Interests that have been allowed, and the determination of such objections as
may be filed to the Claims and Interests, including Bankruptcy Code ss.502(c)
proceedings for estimation of Claims. The Bankruptcy Court shall further retain
jurisdiction for the following additional purposes:
(a) to determine all questions and disputes
regarding title to the respective assets of the Debtors, all causes of action,
controversies, disputes, or conflicts, whether or not subject to any pending
action as of the Effective Date, between either of the Debtors and any other
party, including, without limitation, any right to recover assets pursuant to
the provisions of the Bankruptcy Code;
(b) to modify the Plan after the Effective
Date pursuant to the Bankruptcy Code and the Bankruptcy Rules;
(c) to enforce and interpret the terms
and conditions of the Plan and the Purchase Agreement;
(d) to enter such orders, including, but not
limited to, such future injunctions as are necessary to enforce the respective
title, rights, and powers of the Debtors, and to impose such limitations,
restrictions, terms, and conditions on such title, rights, and powers as the
Bankruptcy Court may deem necessary;
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(e) to enter an order closing these Cases;
(f) to correct any defect, cure any omission,
or reconcile any inconsistency in the Plan, the Purchase Agreement, or the
Confirmation Order as may be necessary to implement the purposes and intent of
the Plan and the Asset Sale;
(g) to determine any and all objections to the
allowance of Claims or Interests;
(h) to determine any and all applications
for allowances of compensation and reimbursement of expenses and the
reasonableness of any fees and expenses authorized to be paid or reimbursed
under the Bankruptcy Code, the Purchase Agreement, or the Plan;
(i) to determine any applications or motions
pending on the Effective Date for the rejection of any Executory Contract
and to hear and determine, and, if need be, to liquidate any and all Claims
arising therefrom;
(j) to determine any and all applications,
adversary proceedings, and contested matters that may be pending on the
Effective Date;
(k) to consider any modification of the
Plan, whether or not the Plan has been substantially consummated, and to remedy
any defect or omission or to reconcile any inconsistency in any order of the
Bankruptcy Court, to the extent authorized by the Plan or the Bankruptcy Court;
(l) to determine all controversies, suits,
and disputes that may arise in connection with the interpretation,
enforcement, or consummation of the Plan, the Purchase Agreement, or the
Asset Sale;
(m) to consider and act on the compromise and
settlement of any Claim against or cause of action by or against the Debtors
arising under or in connection with the Plan, the Purchase Agreement, or the
Asset Sale;
(n) to issue such orders in aid of execution of
the Plan as may be authorized by Bankruptcy Code ss.1142; and
(o) to determine such other matters or
proceedings as may be provided for under Title 28 or any other title of the
United States Code, the Bankruptcy Code, the Bankruptcy Rules, other applicable
law, the Plan, or in any order or orders of the Bankruptcy Court, including, but
not limited to, the Confirmation Order or any order that may arise in connection
with the Plan or the Confirmation Order.
11.3 Failure of Bankruptcy Court to Exercise Jurisdiction. If
the Bankruptcy Court abstains from exercising or declines to exercise
jurisdiction, or is otherwise without jurisdiction over any matter arising out
of these Cases, including the matters set forth in this Article, this Article
shall not prohibit or limit the exercise of jurisdiction by any other court
having competent jurisdiction with respect to such matter.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Governing Law. Except to the extent the Bankruptcy Code or
Bankruptcy Rules are applicable, and subject to the provisions of any contract,
instrument, release, indenture, or other agreement or document entered into in
connection with the Plan, 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 New York, without giving effect to the principles of conflicts of
law thereof.
12.2 Headings. The headings of the Articles and Sections of the
Plan are inserted for convenience only and shall not affect the interpretation
hereof.
12.3 Revocation. The Debtors reserve the right to revoke or withdraw the
Plan prior to the Confirmation Date. If the Debtors revoke or withdraw the Plan,
then the Plan shall be null and void and, in such event, nothing contained
herein shall be deemed to constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtors or any other Person or to prejudice in
any manner the rights of the Debtors or any Person in any further proceedings
involving the Debtors.
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12.4 Successors and Assigns. The rights, benefits, and
obligations of any Person named or referred to in the Plan shall be binding
upon, and shall inure to the benefit of, the heir, executor, administrator,
successor, or assign of such Person.
12.5 Time. In computing any period of time prescribed or allowed by the
Plan, the day of the act, event, or default from which the designated period of
time begins to run shall not be included. The last day of the period so computed
shall be included, unless it is not a Business Day or, when the act to be done
is the filing of a paper in court, a day on which weather or other conditions
have made the clerk's office inaccessible, in which event the period runs until
the end of the next day which is not one of the aforementioned days. When the
period of time prescribed or allowed is less than eight calendar days,
intermediate days that are not Business Days shall be excluded in the
computation.
12.6 Construction. The rules of construction set forth in Bankruptcy
Code ss.102 shall apply to the construction of the Plan.
12.7 Amendments. The Plan may be amended, modified, or supplemented by
the Debtors before or after the Confirmation Date in the manner provided for by
Bankruptcy Code ss.1127.
12.8 No Penalty or Late Charges. Except as expressly stated in the Plan,
or allowed by a Final Order of the Bankruptcy Court, no penalty or late charge
is to be allowed on any Claim or Interest subsequent to the Petition Date.
12.9 No Attorneys' Fees. No attorneys' fees shall be paid with respect
to any Claim or Interest except as specified herein or as allowed by a Final
Order of the Bankruptcy Court.
12.10 Amounts of Claims and Interests. All references to Claims and
Interests and amounts of Claims and Interests refer to the amount of the Claim
or Interest allowed by Final Order of the Bankruptcy Court or by the Plan;
provided, however, that Claims and Interests that have been objected to and that
have not been allowed or disallowed prior to the day set for return of ballots
shall be voted and counted at the amount as estimated by the Bankruptcy Court.
The Debtors and other interested parties reserve the right, both before and
after Confirmation, to object to Claims and Interests so as to have the
Bankruptcy Court determine or estimate the Allowed amount of such Claim or
Interest under the Plan.
12.11 Exculpation. The Debtors, Reorganized Farm Fresh, and the
Committee, and their present and former shareholders, officers, directors,
employees, attorneys, accountants, consultants, professional persons, and
agents, shall not have or incur any liability to any Person for any act or
omission in connection with or arising out of their administration of the Plan
or the property to be distributed under the Plan, and in all respects shall be
entitled to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan and shall be fully protected in acting or in
refraining from action in accordance with such advice.
12.12 Waiver of Subordination. Except as provided in the Plan, all
Creditors and Interest Holders shall be deemed to have waived any and all
equitable and contractual subordination rights that they may have with respect
to the distributions made pursuant to the Plan, and the Bankruptcy Court in the
Confirmation Order shall permanently enjoin, effective as of the Effective Date,
all Creditors and Interest Holders from enforcing or attempting to enforce any
such rights against any Person receiving distributions under the Plan.
12.13 Amendments to Articles of Incorporation and Bylaws. From and after
the Effective Date, amendments to the articles of incorporation and bylaws of
Reorganized Farm Fresh shall be carried out in accordance with applicable state
law.
12.14 Section 1145 Exemption. Pursuant to Bankruptcy Code ss.1145(a)(1),
the issuance of any securities under the Plan, including without limitation the
New Common Stock and the Warrants, shall be exempt from the registration
requirements of the Securities Act of 1933, as amended, and any state or local
laws requiring registration for the sale of securities. Such securities, when
issued or sold, shall be freely transferable by the recipients thereof, subject
to: (i) the provisions of Bankruptcy Code ss.1145(b) relating to "underwriters,"
as defined therein, (ii) any restrictions contained in the terms of the
securities themselves; and (iii) any restriction on the securities that has been
agreed to by the holder of the securities with respect thereto.
12.15 Section 1146 Exemption. Pursuant to Bankruptcy Code ss.1146(c),
the issuance, transfer, or exchange of any security under the Plan; the making
or delivery of any instrument of transfer pursuant to, in implementation of, or
as contemplated by the Plan or the Purchase Agreement; and the revesting,
transfer, or sale of any real or personal property of the Debtors pursuant to,
in implementation of, or as contemplated by the Plan or the Purchase Agreement
shall not be taxed under any state or local law imposing a stamp tax, transfer
tax, or similar tax or fee.
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12.16 Dissolution of the Committee. On the Effective Date, the Committee
shall dissolve and the members of the Committee shall be released and discharged
from all rights and duties arising from or related to these Cases. Unless
otherwise agreed by Reorganized Farm Fresh, the professionals retained by the
Committee and the members thereof shall not be entitled to compensation or
reimbursement of expenses for any services rendered after the Effective Date,
except for services rendered and expenses incurred in connection with any
applications for allowance of compensation and reimbursement of expenses pending
on the Effective Date and approved by the Bankruptcy Court.
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12.17 Further Actions. The Debtors and Reorganized Farm Fresh shall be
authorized to execute, deliver, file, or record such documents, contracts,
instruments, releases, and other agreements and to take such other action as may
be necessary to effectuate and further evidence the terms and conditions of the
Plan and the Asset Sale.
Dated: January 7, 1998 FF HOLDINGS CORPORATION
Debtor and Debtor-in-Possession
By: ________________________
Chairman and Chief
Executive Officer
FARM FRESH, INC.
Debtor and Debtor-in-Possession
By: ________________________
Chairman and Chief
Executive Officer
Submitted By:
Robert A. Baime, Esquire
Joel H. Levitin, Esquire
DECHERT PRICE & RHOADS
30 Rockefeller Plaza
New York, NY 10112
(212) 698-3558
Attorneys for the Debtors and
Debtors-in-Possession