EXHIBIT 10.5
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
IN RE: CASE NO.: 97-22199-BKC-RBR
THE SINGING MACHINE COMPANY, INC., CHAPTER 11
Tax ID# 95-3795478
Debtor.
- -----------------------------------/
DEBTOR'S AMENDED PLAN OF REORGANIZATION
---------------------------------------
FURR AND COHEN, P.A.
Attorneys for Debtor
By: Robert C. Furr, Esq. and
Lisa J. Chaiklin Aflalo, Esq.
1499 West Palmetto Park Road
Suite 412
Boca Raton, FL 33486
(561) 395-0500
TABLE OF CONTENTS
Page
----
(a) Definitions - Article I 1
(b) Classification of Claims and Interests -
Article II 11
(c) Treatment of Claims and Interests under the
Plan - Article III 11
(d) Impairment - Article IV 15
(e) Means of Execution and Security for
Installment Payments - Article V 15
(f) Executory Contracts - Article VI 16
(g) Effect of Confirmation - Article VII 17
(h) Cram Down, Modification, Substantive
Consolidation - Article VIII 17
(i) Retention of Jurisdiction - Article IX 18
(j) Officers and Directors - Article X 19
(k) Miscellaneous - Article XI 20
DEBTOR'S AMENDED PLAN OF REORGANIZATION
---------------------------------------
ARTICLE I
---------
Definitions
-----------
As used in this Plan, the following terms shall have the respective
meanings set forth below, and such meanings shall be equally applicable to the
singular and plural forms of the terms defined unless the context requires
otherwise. Those terms no specifically defined in this Plan shall have the
meanings ascribed to them by the code.
Actions
-------
All actions that a trustee or debtor-in-possession is empowered to
bring pursuant to 11 U.S.C. Sections 542-553 of the Code, and any other cause of
action, lawsuit, adversary proceeding, contested matter, claim objection, or
right of the Debtor or the Estate against any Person.
Administrative Claim
--------------------
A Claim for payment of an administrative expense under Section 503 of
the Code that is entitled to priority under Section 507(a)(1) of the Code.
Administrative Claims include claims for the provision of goods or services that
are incurred by the Debtor in the ordinary course of business.
Administrative Claimant
-----------------------
The holder of an Administrative Claim.
Allowed Amount
--------------
With Respect to a Claim, (a) the amount of a Claim that was listed in
the Debtor's Schedules (as originally filed in the Case) as not disputed,
contingent or unliquidated, if the holder of such Claim has not filed a proof of
claim with the Court within the applicable period of limitation fixed by the
Court pursuant to Rule 3003(c)(3) of the Rules, or (b) if a holder of a Claim
has filed a proof of claim with the Court within the applicable period of
limitation fixed by the Court pursuant to Rule 3003(c)(3) of the Rules: (I) the
amount stated in such proof of claim or in the Schedules if no objection to such
proof of claim or amount listed in the Schedules has been interposed within the
applicable period of limitation fixed by the Code or Rules, or as otherwise
fixed by the Court, or (ii) such amount as shall be fixed by an order of the
Court which has become a Final Order, if an objection has been interposed within
the applicable period of limitation fixed by the Code, the Rules, or the Court,
or (c) with respect to a Fee Request, such amount as shall be fixed by an order
of the Court which has become a Final Order. In no event shall the Allowed
Amount of any Priority Claim or Unsecured Claim include interest accrued on such
Claim after the Filing Date.
Allowed Claim
-------------
Any Claim which is not a Disputed Claim for which an Allowed Amount has
been finally determined in such Allowed Amount. The Allowed Amount of each
Secured Claim shall include, pursuant to Section 506(b) of the Code, interest on
such Claim, and any reasonable fees, costs, or charges provided for under the
agreement(s) under which such Claim arose incurred as a result of any breach or
default, act or omission occurring through the Effective Date or by reason of
the Plan, Confirmation or Substantial Consummation.
Allowed Interest
----------------
Any Interest which has not been timely disputed, or if timely disputed,
which has been allowed by order of the Court which has become a Final Order.
Article
-------
One of the numbered Articles of the Plan.
Assets
------
All of the right, title and interest of the Debtors in and to property
of any type or nature including the patents, licenses, technologies and the
Actions and all other Property of the Estate.
2
Assumed Contract
----------------
An Executory Contract (as modified or amended pursuant to the Plan,
prior order of the Court or by agreement of the parties) that is assigned to the
Reorganized Debtor pursuant to the Plan.
Business Day
------------
A day other than a Saturday, a Sunday or a day on which commercial
banks in South Florida are authorized or required to close.
Case
----
This Chapter 11 Case No. 97-22199-BKC-RBR United States Bankruptcy
Court for the Southern District of Florida.
Claim
-----
(a) A right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed or contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured; (b) a right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured,
or unsecured; and (c) without limiting the generality of the foregoing, all
Administrative Claims, Priority Claims, Secured Claims and unsecured Claims.
Class
-----
A group of Claims or Interests classified together pursuant to the
Plan.
Class 1
-------
The unsecured priority claims of employees of the Debtor as described,
classified and treated in Article 3.5 of the Plan.
3
Class 2
-------
The Secured Claim of Bankers Capital as described, classified and
treated in Article 3.6 of the Plan.
Class 3
-------
The Secured Claim of Toyota Motor Credit Corporation as described,
classified and treated in Article 3.7 of the Plan.
Class 4
-------
The Claims of Convenience Claims as described, classified and treated
in Article 3.8 of the Plan.
Class 5
-------
The Claims of general unsecured creditors as described, classified and
treated in Article 3.9 of the Plan.
Class 6
-------
The equity interests of the holders of common shares of the Debtor as
described, classified and treated in Article 3.10 of the Plan.
Code
----
The Bankruptcy Code, 11 U.S.C. Section 101 et seq.
Common Stock
------------
The Common Stock, par value $0.01 per share, of the Debtor to be issued
to certain Claim holders and Interest Holders pursuant to the Plan.
Confirmation
------------
The entry by the Court of the Confirmation Order.
4
Confirmation Date
-----------------
The date on which the Clerk of the Court enters the Confirmation Order
on the docket.
Confirmation Hearing
--------------------
A hearing held by the Court on confirmation of the Plan pursuant to
Section 1128 of the Code.
Confirmation Order
------------------
The order entered by the Court confirming the Plan, which shall contain
such provisions as the Proponent desires and shall otherwise be in form and
substance satisfactory to the Proponent.
Convenience Claims
------------------
The Claims by those general unsecured creditors which are equal to or
less than $300.00 in amount.
Court
-----
The United States Bankruptcy Court, Southern District of Florida
including any Bankruptcy Judge thereof and any court having competent
jurisdiction to hear appeals from the Bankruptcy Judges thereof.
Creditor
--------
Any Person holding a Claim or Interest, including Administrative
Claimants and Claims of the kind specified in Sections 502(b), 502(h) and 502(i)
of the Code, and such Person's heirs, successors, assigns, executors and
personal representatives.
Debtor or Debtor in Possession
------------------------------
The Singing Machine Company, Inc. Any reference in the Plan to the
"Debtor" shall also include the Debtor in its capacity as debtor in possession
in the Case, and vice versa.
5
Disclosure Statement
--------------------
The Disclosure Statement filed by the Debtor in connection with the
Plan and approved by the Court for submission to Creditors as the same may be
amended from time to time.
Disputed Amount
---------------
With respect to a particular Disputed Claim, that amount which is equal
to the difference, if any, between the Face Amount of such Claim and the amount,
if any, of such Claim which the party objecting thereto concedes.
Disputed Claim
--------------
Any Claim for which an Allowed Amount has not yet been determined and
with respect to which an objection has been interposed on or prior to the
Confirmation Date or such other date as may be fixed by the Court.
Disputed Interest
-----------------
Any Interest which has not yet been allowed and with respect to which
an objection has been interposed on or prior to the Confirmation Date or such
other date fixed by the Court.
Effective Date
--------------
The tenth day after the Confirmation Order becomes final, or such other
date as this Court shall order.
Estate
------
The estate created in the Case pursuant to Section 541 of the Code.
Executory Contract
------------------
A contract or unexpired lease to which Debtor is a party and that is
executory within the meaning of Section 365 of the Code.
6
Face Amount
-----------
With respect to a particular Claim, (a) if the holder of such Claim has
not filed a proof of claim with the Court within the applicable period of
limitation fixed by the Court pursuant to Rule 3003(c)(3) of the Rules, the
amount of such Claim that was listed in the Schedules (as originally filed in
the Case) as not disputed, contingent or unliquidated; or (b) if the holder of
such Claim has filed a proof of claim with the Court within the applicable
period of limitation fixed by the Court pursuant to Rule 3003(c)(3) of the
Rules, the amount stated in such proof of claim, or (c) with respect to a Fee
Request, the net amount to which the applicant would be entitled if its
application were to be granted in full.
Fee Request
-----------
An application or request for payment by the Estate of fees,
compensation for services rendered or reimbursement of expenses, pursuant to
Rule 2016 of the Rules or other applicable provision of the Code or the Rules.
Filing Date
-----------
April 11, 1997, the date the Debtor filed its Chapter 11 petition with
the Court.
Final Order
-----------
An order or judgment of the Court as entered on the docket that has not
been reversed, stayed, modified or amended, and respecting which the time to
appeal, petition for certiorari or seek reargument, review or rehearing has
expired and as to which no appeal, reargument, petition for certiorari, review
or rehearing is pending or as to which any right to appeal, reargue, petition
for certiorari or seek review or rehearing has been waived in writing in a
manner satisfactory to the Proponents, or, if any appeal, reargument, petition
for certiorari, review or rehearing thereof as been denied, the time to take any
further appeal or to seek certiorari or further rehearing, review of reargument
has expired.
7
If any provision of the Plan requires the entry of a Final Order as a
condition to the occurrence or performance of an act, the Debtor may waive such
requirement.
Interest Holders
----------------
Equity interest of the holders of common stock of the Debtor.
Lien
----
A charge against or interest in any item of Property of the Estate to
secure payment of a debt or performance of an obligation.
Person
------
Any individual, sole proprietorship, partnership (general or limited),
joint venture, trust, unincorporated organization, association, corporation,
institution, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body, political subdivision or department thereof).
Plan
----
This Plan of Reorganization in the present form or as it may be
modified, amended or supplemented from time to time.
Priority Claim
--------------
A Claim (other than an Administrative Claim) that is entitled to
priority under Section 507 of the Code.
Priority Tax Claim
------------------
A Claim (other than an Administrative Claim) that is entitled to
priority under Section 507(a)(8) of the Code.
8
Pro Rata
--------
Proportionately, so that the ratio of the amount of consideration
distributed on account of a particular Allowed Claim to the Allowed Amount of
such Claim is the same as the ratio of the amount of consideration distributed
on account of all Allowed Claims of the Class in which the particular Claim is
included to the amount of all Allowed Claims of that Class. Whenever a Disputed
Claim has not been finally resolved, an appropriate reserve for payment of such
Disputed Claim shall be established so that there will be sufficient monies
available to make a Pro Rata distribution to the holder of such Disputed Claim
upon final resolution of the dispute.
Property of the Estate
----------------------
The property defined in Section 541 of the Code and any other property
right or interest of the Debtor.
Proponent
---------
The Debtor
Rejected Contract
-----------------
An Executory Contract that is rejected at any time during the Case or
pursuant to Article VI of the Plan.
Rejection Claim
---------------
A Claim arising under Section 502(g) of the Code in its Allowed Amount.
Rules
-----
The Federal Rules of Bankruptcy Procedure, the Federal Rules of Civil
Procedure and/or the Local Rules of the Bankruptcy Court.
Schedules
---------
The schedules of assets and liabilities originally filed by the Debtor
with the Court and as the same may be amended from time to time.
9
Secured Claim
-------------
A Claim secured by a lien on property in which the Estate has an
interest or that is subject to set-off under Section 553 of the Code to the
extent of the value of the interest attributable to such Claim in the Estate's
interest in such property or to the extent of the amount subject to set-off.
Secured Creditor
----------------
The holder of a Secured Claim.
Secured Tax Claims
------------------
Ad valorem taxes assessed against the personal property owned by the
Debtor.
Substantial Consummation
------------------------
Following the occurrence of Confirmation, the date that the first
dividend is distributed to creditors.
Unsecured Claim
---------------
A Claim other than a Secured Claim, a Priority Claim or an
Administrative Claim.
Unsecured Creditor
------------------
The holder of a unsecured Claim
Wage Claims
-----------
The claims of employees for wages, salaries or commissions earned
within ninety (90) days before the date of the filing of the Petition to the
extent of $4,000.00 as provided in Section 507(a)(3) of the Code.
Rules of Construction and Interpretation
----------------------------------------
The following rules of construction shall be applicable for all
purposes of the Plan unless the context clearly requires otherwise:
10
The terms "include," "including" and similar terms shall be construed
as if followed by the phrase "without being limited to."
1. Words of masculine, feminine or neuter gender shall mean and include
the correlative words of the other genders, and words importing the singular
number shall mean and include the plural number, and vice versa.
2. All article, section and exhibit or appendix captions are used for
convenience and reference only and in no way define, limit or describe the scope
or intent of, on in any way affect, any such article, section, exhibit or
appendix.
ARTICLE II
----------
Classification of Claims and Interests
--------------------------------------
2.1 An allowed Claim is part of a particular class only to the
extent that the Allowed Claim qualifies within the definition of that Class and,
is in a different Class to the extent that the remainder of the Claim qualifies
within the description of a different Class.
ARTICLE III
-----------
Treatment of Claims and Interests Under the Plan
------------------------------------------------
3.1 General. All payments under this Plan shall commence ten days
after confirmation.
3.2 Administrative Claims. All Allowed Administrative Claims shall
be paid:
(a) in full on the Effective Date or, if such Claim is objected to,
the Date of a Final Order allowing any such Administrative Claim;
OR
--
(b) upon such other terms as may be agreed to between the Debtor and
each such Administrative Claimant.
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Administrative costs are estimated to be approximately $100,000.00
above what has been paid to Furr and Cohen as a retainer.
All case related payments for services, costs, and expenses will be
subject to Court approval. All payments shall be from cash on hand.
3.3 All fees due under 11 U.S.C.ss.1129(a)(12) shall be paid as
required by 28 U.S.C. ss. 1930.
3.4 Tax Claims. - Allowed Tax Claims, estimated by management to
total $7,500.00, specified in 11 U.S.C. Section 507(a)(8) shall be paid in full
at confirmation.
3.5 Class 1 -- Wage Claims
Description: Class 1 consists of the unsecured priority claims of
employees of the Debtor. The Debtor estimates the aggregate amount of Class 1
Claims to be $10,000.00.
Treatment: Class 1 Claimants will be paid up to a maximum of $4,000.00
per claimant in accordance with the provisions of Sections 507 of the Code on
the Effective Date.
Impairment. Class 1 Claims are unimpaired.
3.6 Class 2 -- Bankers Capital.
Description: Class 2 consists of the secured claim of Bankers Capital
in the amount of $124,000.00, secured by a lien on certain of the Debtor's
Assets, as described in the factoring agreement and as approved by prior Court
Orders.
Treatment: The Class 2 claim of Bankers Capital shall be paid according
to the terms of its contract with the Debtor, which contract is current.
Impairment. Class 2 claim is unimpaired.
3.7 Class 3 -- Toyota Motor Credit Corporation
Description: Class 3 consists of the Secured Claim of Toyota Motor
Credit Corporation, which is secured by a Lien on a forklift.
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Treatment: The Class 3 claim shall be paid according to its contract,
which is current.
Impairment. Class 3 Claim is unimpaired.
3.8 Class 4 -- Administrative Convenience Claims
Description: Class 4 consists of Convenience Claims.
Treatment: Class 4 claims will receive a cash payment of ten percent
(10%) of the amount of their Allowed Claim on the Effective Date.
Impairment: Class 4 is impaired.
3.9 Class 5 -- General Unsecured Claims
Description: Class 5 consists of the claims of general unsecured
creditors.
Treatment: Unsecured creditors will be given a choice at confirmation
to elect the following:
Option A: a cash payment of ten percent (10%) of the amount of their
Allowed Claim, payable five percent (5%) on the Effective Date and five percent
(5%) six (6) months thereafter;
or
Option B: issuance on the Effective Date of shares of New Common
Stock of the reorganized Company on the following basis: for each Two Dollars
($2.00) of an Allowed Claim, each Claimant shall receive one share of New Common
Stock.
Creditors will elect Option A or Option B on the ballot. In the event a creditor
fails to elect a treatment on the ballot or fails to vote, such creditor will be
deemed to have elected Option B.
Impairment. Class 5 is impaired.
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3.10 Class 6 -- Interest Holders
Description: Class 6 consists of the equity interests of the holders of
the Old Common Stock of the Debtor.
Treatment: Interest Holders will have their interest diluted by ninety
percent (90%) at confirmation, so that for each share of existing pre-petition
common stock owned, they will receive one- tenth (1/10) of a share of New Common
Stock in the reorganized Company (1 x 10 reverse split).
Impairment. Class 6 is impaired.
Agreement to Less Favorable Treatment
Any Creditor of Interest Holder may agree to less favorable treatment
than is provided for such Creditor in the Plan. The obligations of the Debtor
under this Plan may be prepaid in full or in part without penalty.
3.11 Payment of U.S. Trustee's Fees: Notwithstanding any other
provisions of the Plan to the contrary, the Debtor shall pay the United States
Trustee the appropriate sum required pursuant to 28 U.S.C ss. 1930(a)(6), within
ten (10) days of the entry of the order confirming this Plan, for pre-
confirmation periods and simultaneously provide to the United States Trustee an
appropriate affidavit indicating the cash disbursements for the relevant period.
The Debtor, as a reorganized Debtor, shall further pay the United States Trustee
the appropriate sum required pursuant to 28 U.S.C. ss. 1930(a)(6), until the
earlier of the closing of this case by the issuance of a Final Decree by the
Bankruptcy Court, or upon the entry of an Order by the Bankruptcy court
dismissing this case or converting this case to another Chapter under the United
States Bankruptcy Code, and the reorganized Debtor shall provide to the United
States Trustee upon the payment of each post-confirmation payment an appropriate
affidavit indicating all the cash disbursements from the relevant period.
3.12 Blank Ballots Any Ballot not filed in accordance with the
filing instructions on the Ballot pertaining to this Plan shall not be counted
for voting purposes.
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ARTICLE IV
----------
Impairment
----------
4.1 Claims in Classes 4, 5 and 6 are impaired under this Plan.
Impaired classes will be treated as fully set forth in Article III above.
ARTICLE V
---------
Means of Execution and Security for Payments
--------------------------------------------
5.1 The distribution of cash required under the Plan, shall be made
from available funds of the Debtor or as may be available for distribution on or
before the Effective Date or, as otherwise agreed to by Debtor and the holders
of Allowed Priority Claims and Allowed Unsecured Claims.
5.2 The Distribution of cash required under Article III of the Plan
shall, as set forth in such Article, be made from the continuing operations of
Debtor prior to the Effective Date or by the reorganized Debtor following the
Effective Date.
5.3 [Omitted]
5.4 Upon the entry of the Confirmation Order, the reorganized Debtor
shall be vested with all of its property free and clear of all claims and
interests of creditors, except as otherwise provided for herein.
5.5 After the entry of an Order of Confirmation, the reorganized
Debtor shall continue its business and manage its affairs without further
supervision of the Court.
5.6 Furr and Cohen shall be the initial disbursing agent and shall
be responsible for making the payments under the Plan due on the Effective Date.
All payments thereafter will be made by the Debtor. The payments shall be as
provided in Article III.
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5.7 Unclaimed Distributions. Any checks mailed by the disbursing
agent for the initial payment to a particular creditor which remains unclaimed
ninety (90) days after mailing, shall constitute "unclaimed funds" which shall
become the Debtor's property. A distribution of funds is unclaimed, if, without
limitation, the holder of a Claim entitled thereto does not cash a check or
returns a check or if the check mailed to the holder at the address set forth in
the Debtor's Schedule of Liabilities or set forth in a proof of claim filed by
such holder is returned by the United States Postal Service as undeliverable.
Any funds unclaimed shall be forfeited by the holder otherwise entitled thereto,
and all rights, title and interest therein shall thereupon vest in the
Reorganized Debtor.
ARTICLE VI
----------
Executory contracts
-------------------
6.1 Any and all Executory Contracts and unexpired leases of the
Debtor not expressly assumed herein, assumed prior to the Confirmation Date, or
not at the Confirmation Date the subject of pending application to assume, shall
be deemed to be rejected.
6.2 Debtor has present intentions to assume certain leases of office
equipment and its music licensing contracts. The debtor intends to file motions
to assume same prior to the Confirmation date.
6.3 Any claims for rejected contracts shall be paid in Class 5 upon
determination by agreement or by the Court. Any proof of claim for damages
arising from the rejection must be filed with ;the Court within thirty (30) days
after the entry of an Order allowing the rejection of the contract.
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ARTICLE VII
Effect of Confirmation
7.1 Discharge - Except as otherwise provided in this Plan,
Confirmation of the Plan and full compliance and performance with the Plan,
shall be deemed to have discharged the Debtor from any Claim that arose on or
prior to the confirmation Date, and any Claim of a kind specified in Section
502(g), (h) or (i) of the Code, whether or not:
(a) a Proof of the Claim is filed or deemed to be filed under
Sections 501 and 1111(a) of the Code;
(b) such Claim is allowed under Section 502 of the Code; or
(c) the holder of such Claim has accepted the Plan.
The payments to be made by Debtor pursuant to this Plan shall be in
full settlement and satisfaction of all Claims against Debtor.
ARTICLE VIII
------------
Cram Down, Modification, Substantive Consolidation
--------------------------------------------------
UTILIZATION OF CRAM DOWN
------------------------
If all of the applicable provisions of 11 U.S.C. ss. 1129(a) other
than paragraph (8), are found to have been met with respect to the Plan, Debtor
may seek confirmation pursuant to 11 U.S.C. ss. 1129(b) of the Code. For the
purposes of seeking confirmation under the Cram-down provisions of the Code,
should that alternative means of confirmation prove to be necessary, Debtor
reserves the right to modify or vary the treatment of the claims of the
rejecting Classes so as to comply with ss. 1129(6) of the Code.
17
MODIFICATION OF PLAN
--------------------
Prior to Confirmation At any time prior to the Confirmation Date,
the Proponent may modify the Plan, but may not modify the Plan so that the Plan
as modified fails to meet the requirements of Sections 1122 and 1123 of the
Code. If the Proponent files a modification with the Court, the Plan as modified
shall become the Plan.
After Confirmation. At any time after the Confirmation Date, and
before Substantial Consummation, the Proponent may modify the Plan but may not
modify the Plan so that the Plan as modified fails to meet the requirements of
Sections 1122 and 1123 of the Code. The Plan as modified under this Section
becomes the Plan only if the Court, after notice and a hearing, confirms such
Plan, as modified, under Section 1129 of the Code.
ARTICLE IX
----------
Retention of Jurisdiction
-------------------------
9.1 From and after entry of the Confirmation order, the Bankruptcy
Court shall retain such jurisdiction as is legally permissible over the
reorganization Case for the following purposes:
(a) to hear and determine any and all objections to the allowance on
any Claim or any controversy as to the classification of Claims;
(b) to hear and determine any and all applications for compensation
and reimbursement of expenses to professionals as well as to hear and determine
claims entitled to priority under Section 507(a)(1) of Title 11;
(c) to enable the Debtor to prosecute any and all proceedings which
may be brought to set aside liens or encumbrances and to recover any transfers,
assets, properties or damages to which the Debtor may be entitled under
applicable provision of the Code or any other Federal, State or local laws;
18
including causes of action, controversies, disputes, and conflicts between the
Debtor and any other party, including but not limited to any causes of action
for objections to claims, preferences or fraudulent transfers and obligations or
equitable subordination; and to enter any Order assuring that good, sufficient
and marketable legal title is conveyed to the purchaser of the Debtor's
property.
(d) to consider any necessary valuation issues under Section 506 of
the Code, and any proceeding to determine the amount, validity and priority of
liens, in connection with the Debtor's property.
(e) to determine the rights of any party in respect of the
assumption or rejection of any executory contracts or unexpired leases.
(f) to correct any defect, cure any omission, or reconcile any
inconsistency in the Plan or Order of Confirmation, as may be necessary to carry
out the purposes and intent of this Plan.
(g) to modify this Plan after Confirmation, pursuant to the Code.
(h) to enforce and interpret the terms and conditions of the Plan.
(i) to enter Orders to enforce the title, rights and power of the
Estate as the Court may deem necessary.
(j) to enter Orders concluding and closing this case.
ARTICLE X
---------
Officers and Directors
----------------------
The following individuals shall hold the position indicated as an
officer and/or director of the Reorganized Debtor, at the compensation stated,
subject to change by action of the Board of Directors. They are insiders.
President, CEO and Director Edward Steele $167,500.00
Vice President And Director Edward Pearson $ 75,000.00
Secretary & Treasurer John Klecha $ 75,000.00
Director Paul Wu $ NONE
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ARTICLE XI
----------
Miscellaneous
-------------
11.1 Headings. Headings are utilized in this Plan for the
convenience of reference only, and shall not constitute a part of this Plan for
any other purpose.
11.2 Defects, Omissions and Amendments. This Plan may be altered,
amended or modified by Debtor before or after the Confirmation Date as provided
in Section 1127 of the Code.
11.3 Governing Law. Except to the extent that the Code is
applicable, all rights and obligations arising under this Plan shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Florida.
11.4 Severability. Should any provision in this Plan be determined
to be unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any or all other provisions of this plan.
11.5 Regulatory Approval. No regulatory approval is necessary for
the confirmation of this Plan.
11.6 Savings Clause. Any minor defect or inconsistency in the Plan
may be corrected or amended by the Confirmation Order.
11.7 No Admissions. The preparation and filing of this Plan and the
Disclosure Statement were undertaken, in part, as a means of settling disputes
among various parties in interest in the Case and is offered by the Proponent,
in part, as an offer in compromise by the Proponent in the Plan to other parties
in interest in the Case. No statement or omission by Proponent in the Plan or
20
the Disclosure Statement, including any statement concerning the estimated
Allowed Amount of any Claim, shall preclude or estop the Proponent from
objecting to any Claim, and no such statement or omission shall constitute, or
be deemed to constitute, any type of admission, waiver or estoppel on the part
of the Proponent, and nothing stated or unstated by the Proponent shall be
admissible against the Proponent except in the hearings on the adequacy of the
Disclosure Statement and the confirmation of the Plan.
DATED: December 17, 1997
The Singing Machine Company, Inc.
By: /s/ John Klecha
------------------------------
John Klecha, Secy./Treas.
I HEREBY CERTIFY that I am admitted to the Bar of the United States District
Court for the Southern District of Florida and I am in compliance with the
additional qualifications to practice in this Court set forth in Local Rule
910(A).
FURR AND COHEN, P.A.
Attorney for Debtor
1499 W. Palmetto Park Road
Suite 412
Boca Raton, FL 33486
561-395-0500
By /s/ Robert C. Furr
--------------------------------
ROBERT C. FURR, ESQ.
Florida Bar No. 210854
LISA J. CHAIKLIN AFLALO, ESQ.
Florida Bar No. 873179
21