EXHIBIT 10.6
UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF FLORIDA
Case No.: 97-22199-BKC-RBR
Chapter 11
In re:
THE SINGING MACHINE COMPANY, INC.,
_________________________________ Debtor./
ORDER CONFIRMING DEBTOR'S AMENDED PLAN
A hearing was held on February 26, 1998 to consider the confirmation of
an amended plan, dated December 17, 1997, filed by The Singing Machine Company,
Inc., under chapter 11 of the Bankruptcy Code (the "plan").
The plan having been transmitted to creditors and equity security
holders; and
It having been determined after hearing on notice that:
1. The plan has been accepted in writing by the creditors and equity
holders whose acceptance is required by law; and
2. The provisions of chapter 11 of the Code have been complied with and
that the plan has been proposed in good faith and not by any means forbidden by
law; and
3, With respect to each impaired class of claims or interests, each
holder of a claim or interest has accepted the plan, or will receive or retain
under the plan on account of such claim or interest property of a value, as of
the effective date of the plan, that is not less than the amount that such
holder would receive or retain if the debtor were liquidated under chapter 7 of
the Bankruptcy Code on such date. The plan does not discriminate unfairly, and
is fair and equitable, with respect to each class of claims or interests that
are impaired under the plan, and had not accepted the plan; and
4. All payments made or promised by the debtor or by a person issuing
securities or acquiring property under the plan or by any other person for
services or for costs and expenses in, or in connection with, the plan and
incident to the case, have been fully disclosed to the court and are reasonable
or, if to be fixed after confirmation of the plan, will be subject to approval
of the court; and
5. The identity, qualifications, and affiliations of the persons who
are to be directors or officers, or voting trustees, if any, of the debtor,
after confirmation of the plan, have been fully disclosed, and the appointment
of such persons to such offices, or their continuance therein, is equitable and
consistent with the interests of the creditors and equity security holders and
with public policy; and
6. The identity of any insider that will be employed or retained by the
debtor and compensation to such insider has been fully disclosed; and
7. The confirmation of the plan is not likely to be followed by the
liquidation, or the need for further financial reorganization, of the debtor or
any successor to the debtor under the plan, unless such liquidation or further
reorganization is proposed in the plan.
IT IS THEREFORE:
ORDERED that the plan is confirmed; and it is further
ORDERED that the post-petition financing with Bankers Capital approved
in this Court's Order dated September 5, 1997 is hereby ratified and shall
continue with the reorganized debtor under the same terms of such Order; and it
is further
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ORDERED that the Court shall retain jurisdiction as provided in the
plan until there is substantial consummation of the plan; the plan is modified
if it calls for retention of jurisdiction beyond that point; and it is further
ORDERED that the debtor shall pay the United States Trustee the
appropriate sum required pursuant to 28 U.S.C. Section 1930(a)(6) within ten
(10) days of the entry of this order for pre-confirmation periods and
simultaneously provide to the United States Trustee an appropriate affidavit
indicating the cash disbursements for the relevant period; and the reorganized
debtor shall further pay the United States Trustee the appropriate sum required
pursuant to 28 U.S.C. ss. 1930(a)(6) for post-confirmation periods within the
time period set forth in 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 Court, or upon the
entry of an Order by this Court dismissing this case or converting this case to
another chapter under the United States Bankruptcy Code, and the party
responsible for paying the post-confirmation United States Trustee fees shall
provide to the United States Trustee upon the payment of each post-confirmation
payment an appropriate affidavit indicating all the cash disbursements for the
relevant period; and it is further
ORDERED that Robert C. Furr, Esq. of Furr and Cohen, P.A., is named as
disbursing agent without additional compensation; bond is waived; the disbursing
agent is directed to make all first installment payments on the effective date
of the plan. The disbursing agent shall, not later than sixty (60) days after
this Order becomes final, file a Final Report of Estate and Motion for Final
Decree Closing Case on the Court approved local form. Failure to timely file the
Final Report of Estate and Motion For Final Decree Closing Case will result in
the imposition of sanctions against the debtor's counsel, which may include the
return of attorney's fees; and it is further
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ORDERED, that the Court will conduct a post-confirmation status
conference on June 19, 1998 at 9:30 A.M., in Courtroom 308, U.S. Courthouse, 299
East Broward Blvd., Ft. Lauderdale, FL, to determine: (i) whether the debtor has
complied with he provisions of this Order, and (ii) whether the disbursing agent
and the plan proponent have timely filed the required Final Report of Estate and
Motion For Final Decree Closing Case. At the status conference, the Court will
consider the propriety of dismissal or conversion to chapter 7, and/or the
imposition of sanctions against the debtor and/or the debtor's disbursing agent
for failure to timely file the Final Report of Estate and Motion For Final
Decree Closing Case or for failure to comply with the provisions of this Order.
DONE and ORDERED this 26 day of February, 1998.
/s/ Raymond B. Ray
------------------------------
Raymond B. Ray, Judge
United States Bankruptcy Court
xc: Attorney for Debtor
U.S. Trustee
ALL CREDITORS (The Debtor's counsel is directed to immediately mail a
conformed copy of this Order to all creditors and parties in interest and file a
certificate of mailing with the Court)
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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.
- ----------------------------------/
ORDER AMENDING AMENDED PLAN OF REORGANIZATION
AND ORDER CONFIRMING DEBTOR'S AMENDED PLAN
This cause came before the Court upon the Debtor's Ex-Parte Motion to
Amend the Plan of Reorganization and Confirmation Order wherein the Debtor
requested that the Amended Plan of Reorganization and Confirmation Order entered
by this Court on February 26, 1998 be amended to provide that the record date
and payable date for purposes of effectuating the reverse stock split of the
Debtor's securities and the issuance of shares to those creditors that are
exchanging debt for equity, be extended for fourteen (14) days from and after
approval of the amendment to provide the Debtor with the opportunity to comply
with the National Association of Securities Dealers, Inc. ("NASD") regulations.
After review of the Motion and finding that good cause to Amend the Confirmation
Order, it is
ORDERED AND ADJUDGED as follows:
1. The Debtor's Amended Plan of Reorganization and the Order Confirming
Debtor's Amended Plan of Reorganization entered by the Court on February 26,
1998 are amended to add and include the following paragraph:
ORDERED THAT the record date and payable date for purposes of
effectuating the reverse stock split of the Debtor's securities and the
issuance of shares to the creditors whose debt is being converted to
stock is extended fourteen (14) days from the date of this Order to
provide the Debtor with the opportunity to comply with the National
Association of Securities Dealers, Inc. ("NASD") regulations.
DONE AND ORDERED in the Southern District of Florida this 17th day of
March, 1998.
/s/ Raymond B. Ray
-----------------------------------------
RAYMOND B. RAY, Judge
UNITED STATES BANKRUPTCY JUDGE
COPIES FURNISHED TO:
Robert C. Furr, Esq.
Furr and Cohen, P.A.
1499 W. Palmetto Pk.Rd.#412
Boca Raton, Florida 33486
Office of Asst. U.S. Trustee
51 S.W. 1 Avenue
Room 1204
Miami, Florida 33130
The Singing Machine Company, Inc.
3101 Northwest 25th Avenue
Pompano Beach, FL 33069
Susan Sherrill, Esq.
Securities & Exchange Commission
Branch of Reorganization
Suite 1000
3475 Lenox Road, NE
Atlanta, GA 30326-1323
David Carter, Esq.
Special Counsel to DIP
2300 Glades Road
Boca Raton, FL 33431