EXHIBIT 2.1
THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
(Baltimore Division)
IN RE: *
*
FRANK'S NURSERY & CRAFTS, INC., ET * Case Nos. 01-52415 and 01-52416
Al., * (Chapter 11)
* Jointly Administered
DEBTORS. *
* * * * * * * *
* * * * * *
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
DATED: MAY 7, 2002
WILLKIE FARR & GALLAGHER
787 Seventh Avenue
New York, NY 10019
(212) 728-8000
WHITEFORD, TAYLOR & PRESTON L.L.P.
Seven Saint Paul Street, Suite 1400
Baltimore, Maryland 21202
(410) 347-8700
Co-Counsel for the Debtors,
Frank's Nursery & Crafts, Inc. et al.
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS ................................................1
ARTICLE II. CLASSIFICATION OF CLAIMS AND INTERESTS .....................7
ARTICLE III. TREATMENT OF CLAIMS AND INTERESTS ..........................8
ARTICLE IV. MEANS OF IMPLEMENTATION OF THE PLAN .......................12
ARTICLE V. TREATMENT OF CLAIMS AND DISTRIBUTIONS UNDER
PLAN ......................................................15
ARTICLE VI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES ..................19
ARTICLE VII. DISCHARGE, RELEASE, INDEMNIFICATION,
ABANDONMENT, AND SETTLEMENT OF CLAIMS .....................20
ARTICLE VIII. CONDITIONS TO CONFIRMATION AND EFFECTIVE DATE .............22
ARTICLE IX. ADMINISTRATIVE PROVISIONS .................................23
Schedule 1.52 New Stock Option Plan
Schedule 3.01(d) Administrative Reclamation Claims
Schedule 3.03 Resolution of Allowed Amounts for Class 3 (Mortgagee) Claims
Schedule 3.04 Resolution of Allowed Amounts for Class 4 (Other Secured) Claims
Schedule 4.05(a) Real Estate Facility Commitment Letter
Schedule 4.05(b) Inventory & Receivables Facility Commitment Letter
Schedule 6.02 Schedule of Executory Contracts and Unexpired Leases Assumed Under
the Plan and Related Cure Amounts
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THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
(Baltimore Division)
IN RE: *
FRANK'S NURSERY & CRAFTS, INC., ET * Case Nos. 01-52415 and 01-52416
AL., (Chapter 11)
* Jointly Administered
DEBTORS.
* * * * * * * *
* * * * * *
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
Frank's Nursery & Crafts, Inc. and FNC Holdings, Inc., as debtors and
debtors in possession, in their procedurally consolidated chapter 11 cases,
hereby propose this Debtors' Second Amended Joint Plan of Reorganization:
ARTICLE I.
DEFINITIONS
As used in the Plan, the following terms have the respective meanings
specified below (such meaning to be equally applicable to both the singular and
the plural, and masculine and feminine forms of the terms defined):
1.01. "Administrative Claim" means an unsecured Claim for payment of
costs or expenses of administration specified in sections 503(b) and 507(a)(1)
of the Bankruptcy Code.
1.02. "Administrative Reclamation Claim" means that portion of a
reclamation Claim eligible for Administrative Claim status pursuant to section
546(c) of the Bankruptcy Code.
1.03. "Allowed Claim" means a Claim: (a) either (i) proof of which has
been timely filed with the Bankruptcy Court or has been deemed timely filed by a
Final Order; or (ii) if not so filed, scheduled by a Debtor other than as
disputed, contingent or unliquidated; and (b) allowed by a Final Order, by this
Plan, or because no party in interest timely has filed an objection, filed a
motion to equitably subordinate, or otherwise sought to limit recovery on such
Claim. An Allowed Claim shall not include interest accruing after the Petition
Date on the amount of any Claim except as expressly provided herein.
1.04. "Allowed [Class Designation/Type] Claim" means an Allowed Claim
in a specified class or of a specified type.
1.05. "Ascribed Value" means an ascribed value of $1.15 per share of
New Common Stock, representing $23 million divided by the 20 million shares of
New Common Stock to be issued to Class 7 under the Plan.
1.06. "Avoidance Action" means an action of the Debtors pursuant to
sections 544, 545, 547, 548, 549, 550, or 553 of the Bankruptcy Code.
1.07. "Bankruptcy Code" means sections 101, et seq. of title 11 of the
United States Code, as now in effect or hereafter amended.
1.08. "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Maryland or any other court or adjunct thereof exercising
competent jurisdiction.
1.09. "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure, as amended from time to time, and the Local Rules of the Bankruptcy
Court, as applicable to the Chapter 11 Cases.
1.10. "Bar Date" means the date established by the Bankruptcy Court as
the last date for filing proofs of pre-Petition Date Claims against the Debtors.
1.11. "Business Day" means any day other than Saturday, Sunday or
"legal holiday" as such term is defined in Bankruptcy Rule 9006(a).
1.12. "Cash" means cash and cash equivalents, including but not limited
to bank deposits, checks, and other similar items.
1.13. "Chapter 11 Cases" means, collectively, the cases under chapter
11 of the Bankruptcy Code concerning the Debtors, entitled Frank's Nursery &
Crafts, et al., Case Nos. 01-52415 and 01-52416 (Jointly Administered).
1.14. "Claim" means a claim against the Debtors, as such term is
defined in section 101(5) of the Bankruptcy Code.
1.15. "Class" means a group of Claims or Interests as classified under
this Plan.
1.16. "Committee" means the Official Committee of Unsecured Creditors
appointed in the Chapter 11 Cases by the United States Trustee and reconstituted
from time to time.
1.17. "Confirmation Date" means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the Bankruptcy Court's docket.
1.18. "Confirmation Hearing" means the hearing pursuant to which the
Bankruptcy Court enters the Confirmation Order.
1.19. "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan pursuant to section 1129 of the Bankruptcy Code.
1.20. "Creditor" means a Person that holds a Claim against a Debtor.
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1.21. "Debtors" means, unless otherwise indicated, Frank's and FNC
(Each of the Debtors is individually referred to herein as a "Debtor.")
1.22. "DIP Facility" means that certain Loan and Security Agreement,
dated February 19, 2001, and the related loan, financing, security agreements
and mortgages and fee letter by and among the Debtors, Wells Fargo, and the DIP
Lenders, as may be amended from time to time.
1.23. "DIP Lenders" means the syndicate of financial institutions
defined as the "Lenders" in the DIP Facility.
1.24. "DIP Lender Claims" mean the Claims of Wells Fargo, as agent for
the DIP Lenders, under the DIP Facility.
1.25. "Disclosure Statement" means the disclosure statement respecting
the Plan approved by the Bankruptcy Court pursuant to section 1125 of the
Bankruptcy Code.
1.26. "Disputed Claim" means a Claim (or portion thereof) as to which
either: (a) an objection has been timely filed, and such objection has not been:
(x) withdrawn, (y) overruled or denied in whole by a Final Order; (b) before the
deadline for an objection to the Claim to be filed, the amount of the Claim
specified in the applicable proof of Claim exceeds the amount of any
corresponding Claim scheduled by the Debtors in the Schedules as being neither
disputed nor contingent or no such amount is scheduled as being neither disputed
nor contingent; (c) there is a dispute as to classification of the Claim; or (d)
the Claim is unliquidated.
1.27. "Distribution" means the distribution in accordance with this
Plan of Cash or other property, as the case may be.
1.28. "Distribution Address" means the last known address of a
Creditor, whether derived from the Schedules, a proof of claim filed with the
Court or other written notification to the Debtors as to where a distribution
under a Plan is to be sent.
1.29. "Distribution Date" means any date that is: (a) the Initial
Distribution Date; (b) any Interim Distribution Date; or (c) the Final
Distribution Date.
1.30. "Effective Date" means a date to be determined by the Debtors
that will be no later than 30 days after the later of: (a) the date each of the
conditions to the Effective Date has been satisfied or waived, provided no stay
of the Confirmation Order is then in effect; or (b) the date any stay of the
Confirmation Order is vacated or any appeal, rehearing, remand, or petition for
certiorari regarding the Confirmation Order is resolved by Final Order in a
manner that does not reverse or materially modify the Confirmation Order.
1.31. "Executory Contract" means any executory contract or unexpired
lease within the meaning of section 365 of the Bankruptcy Code in effect between
a Debtor and other Person as of the Petition Date.
1.32. "Exit Facilities" means two post-Effective Date borrowing
facilities for Reorganized Frank's to be in an original aggregate principal
amount of $80 million,
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consisting of a $30 million facility to be secured by real estate and a $50
million facility to be secured by inventory and receivables.
1.33. "Face Amount" means respecting a Claim: (i) if the holder of such
Claim has not filed a proof of Claim by the applicable bar date and there is no
Final Order fixing such Claim, the amount of such Claim that is listed in the
Schedules as undisputed, noncontingent and liquidated or, if no amount is
listed, zero ($0) dollars; (ii) if the holder of such Claim has filed a proof of
Claim by the applicable bar date, the liquidated amount as stated in such proof
of Claim, or, if no liquidated amount is listed, then zero ($0) dollars unless
such amount is allowed or estimated by Final Order; (iii) an amount fixed or
estimated by a Final Order; or (iv) in all other cases, zero ($0) dollars.
1.34. "Final Distribution Date" means:
(a) with respect to each Claim that is not a Class 7 Claim as well as
Class 7 Claims subject to the Lump Sum Election, the first Business Day twenty
(20) days (or such longer period as may be reasonably determined by Reorganized
Frank's) after the later of: (i) the Effective Date; and (ii) the date that such
Claim becomes an Allowed Claim; and
(b) with respect to Class 7 Claims, the first Business Day twenty (20)
days (or such longer period as may be reasonably determined by Reorganized
Frank's) after the date on which all Disputed Claims in Class 7 have been
resolved by Final Order.
1.35. "Final Order" means an order or judgment, as entered on the
docket of the applicable court, that has not been reversed, modified or amended,
is not stayed, and as to which the time to appeal from or to seek review or
rehearing or petition for certiorari of has expired without an appeal or
application for review or rehearing or petition having been filed.
1.36. "FNC" means FNC Holdings, Inc., one of the Debtors.
1.37. "Frank's" means Frank's Nursery & Crafts, Inc., one of the
Debtors.
1.38. "General Unsecured Claim" means any Claim against the Debtors,
other than a DIP Lender Claim, Mortgagee Claim, Secured Claim, Administrative
Claim, Priority Claim, or Priority Tax Claim.
1.39. "Impaired" means any Claim that is impaired within the meaning of
section 1124 of the Bankruptcy Code.
1.40. "Indenture" means the Old Senior Subordinated Notes Indenture.
1.41. "Indenture Trustee" means Bankers Trust Company or its successor,
as trustee under the Indenture.
1.42. "Initial Distribution Date" means, with respect to Allowed Claims
in Class 7, the first Business Day twenty (20) days after the Effective Date, or
such longer period as may be reasonably determined by Reorganized Frank's, but
in no event later than one-hundred- eighty (180) days after the Effective Date.
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1.43. "Interest" means an equity interest in FNC.
1.44. "Interim Distribution Date" means any date after the Initial
Distribution Date on which Reorganized Frank's determines, in its sole
discretion, that an interim distribution should be made to Class 7 in light of,
inter alia, reductions in Disputed Claims and the administrative costs of such
distribution.
1.45. "Kimco" means Kimco Realty Corporation or any subsidiary,
affiliate, or designee.
1.46. "Lien" means any conveyance in trust, assignment or pledge of,
mortgage or lien on, security interest in, or charge or encumbrance of any kind
against, any property of any Debtor.
1.47. "Lump Sum Election" means the alternative for Class 7 Creditors
under section 3.07 hereof to receive a single lump sum cash distribution instead
of distributions of New Common Stock under the Plan.
1.48. "Mortgagee Claims" means the respective Claims of the parties
listed on Schedule 3.03 hereto, as and to the extent secured by valid Liens
against real property of the Debtors.
1.49. "Mortgagee Loan Documents" means the respective agreements and
instruments creating or evidencing the Mortgagee Claims.
1.50. "Mortgagees" means the respective holders of Mortgagee Claims
(each individually referred to as a "Mortgagee").
1.51. "New Common Stock" means the shares of authorized common stock of
Reorganized Frank's to be issued under the Plan.
1.52. "New Stock Option Plan" means a stock option plan, in
substantially the form annexed as Schedule 1.52 hereto, providing for the
issuance to management of options to purchase certain shares of New Common
Stock.
1.53. "Old Senior Subordinated Notes" means the 10_% Senior
Subordinated Notes due 2008, issued by Frank's.
1.54. "Person" means an individual, a corporation, a partnership, an
association, a joint stock company, a joint venture, an estate, a trust, an
unincorporated organization, or a government or any subdivision thereof, or any
other entity.
1.55. "Petition Date" respecting each Debtor means February 19, 2001,
the date on which the Chapter 11 Cases were commenced.
1.56. "Plan" means this plan under chapter 11 of the Bankruptcy Code
(including all schedules annexed hereto), as the same may be altered, amended,
or modified from
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time to time (after the Confirmation Date, such amendments or modifications
being effective only if approved by order of the Bankruptcy Court).
1.57. "Priority Claim" means any Claim to the extent entitled to
priority in payment pursuant to section 507(a) of the Bankruptcy Code, other
than an Administrative Claim, or Priority Tax Claim.
1.58. "Priority Tax Claim" means any Claim to the extent entitled to
priority in payment under section 507(a)(8) of the Bankruptcy Code.
1.59. "Ratable Share" means a number (expressed as a percentage),
calculated as of the date ten (10) Business Days (or such other fixed period
reasonably determined by Reorganized Frank's) prior to each Distribution Date
equal to the proportion that an Allowed Claim in a Class bears to the aggregate
amount of Allowed Claims in such Class as of the date of determination. Solely
for the purpose of calculating the amount to be distributed to holders of
Allowed Claims in Class 7 and reserved for the holders of Disputed Claims on a
Distribution Date, Reorganized Frank's shall treat each Disputed Class 7 Claim
as an Allowed Claim in the Face Amount of such Disputed Claim, unless otherwise
ordered by the Bankruptcy Court.
1.60. "Record Date" means the date established in the Confirmation
Order for determining the identity of holders of Allowed Claims and Interests
entitled to Distributions under the Plan.
1.61. "Rejection Claim" means the Claim, if any, of parties other than
any of the Debtors to executory contracts or unexpired leases with any of the
Debtors that are rejected or deemed rejected pursuant to a Final Order.
1.62. "Reorganized Frank's" means the Debtors on and after the
Effective Date.
1.63. "Schedules" means the schedules, as amended from time to time, of
assets and liabilities filed by the Debtors with the Bankruptcy Court in
accordance with sections 521 and 1106(a)(2) of the Bankruptcy Code.
1.64. "Secured Claim" means any Claim to the extent such claim
constitutes a secured Claim pursuant to section 506 or 1111(b) of the Bankruptcy
Code.
1.65. "Securities Act" means the Securities Act of 1933, as amended.
1.66. "Settling Mortgagees" means those Mortgagees with whom the
Debtors have entered into settlements regarding treatment of their Mortgagee
Claims under the Plan, in exchange for which such Settling Mortgagees have
agreed to withdraw their respective objections to the Plan and to have their
Claims deemed to have been voted in favor of the Plan.
1.67. "Unclaimed Property" means any Cash or other distributable
property unclaimed on or after the Effective Date or the date on which an
additional Distribution would have been made in respect of a Claim. Unclaimed
Property shall include: (a) checks (and the
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funds represented thereby) mailed to a Distribution Address and returned as
undeliverable without a proper forwarding address; (b) funds for uncashed
checks; and (c) checks (and the funds represented thereby) not mailed or
delivered because no Distribution Address to mail or deliver such property was
available, notwithstanding efforts by the Debtors to locate such address which
were commercially reasonable under the circumstances.
1.68. "Wells Fargo" means Wells Fargo Retail Finance, LLC, as agent for
the DIP Lenders.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
For purposes of the Plan, Claims are classified as follows:
2.01. "Class 1 Claims" shall consist of all Administrative Claims
against the Debtors.
2.02. "Class 2 Claims" shall consist of the claims of the DIP Lenders
under the DIP Facility.
2.03. "Class 3 Claims" shall consist of the Mortgagee Claims, with each
such Claim secured by different collateral to be deemed a separate subclass.
2.04. "Class 4 Claims" shall consist of all Secured Claims against the
Debtors that are not Class 2 Claims or Class 3 Claims.
2.05. "Class 5 Claims" shall consist of all Priority Tax Claims against
the Debtors.
2.06. "Class 6 Claims" shall consist of all Priority Claims against the
Debtors that are not Priority Tax Claims.
2.07. "Class 7 Claims" shall consist of all General Unsecured Claims.
2.08. "Class 8 Interests" shall consist of all Interests.
2.09. Elimination of Classes. Any Class of Claims that is not occupied
as of the date of the commencement of the Confirmation Hearing by an Allowed
Claim or a Claim temporarily Allowed under Rule 3018 of the Bankruptcy Rules
shall be deemed deleted from the Plan for purpose of voting on acceptance or
rejection of the Plan of any such Class under section 1129(a)(8) of the
Bankruptcy Code.
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ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
Each Allowed Claim or Interest shall receive the treatment specified
below for the applicable Class in full settlement of all rights of the holder of
such Allowed Claim or Interest; provided, however, that the holder of such Claim
or Interest may agree to and receive less favorable treatment.
3.01. Class 1 - Administrative Claims. Class 1 is not Impaired.
(a) Professionals whose compensation is subject to approval of the
Bankruptcy Court shall be paid in Cash in the amounts awarded to such
professionals by order of the Bankruptcy Court as soon as practicable after such
order is entered.
(b) Other Administrative Claims (except for ordinary course claims)
shall be paid in Cash in full on the later of the Effective Date and the date
such Claims become Allowed Claims.
(c) Ordinary course Administrative Claims will be paid in accordance
with the terms and conditions of the particular transaction giving rise to such
liabilities.
(d) Schedule 3.01(d) hereto sets forth the holders of valid
Administrative Reclamation Claims against the Debtors and the respective amounts
of such Claims. These Administrative Reclamation Claims shall be treated as
Administrative Claims under the Plan. No other purported reclamation Claim shall
be afforded such treatment unless an Order allowing such claim as an
Administrative Reclamation Claim is entered by the Court on or prior to the
Confirmation Date. If no such Order is entered, then the purported Claim shall
remain in the Class, if any, that it otherwise would belong in the absence of
any asserted priority under section 546(c) of the Bankruptcy Code.
3.02. Class 2 - DIP Lender Claims. Class 2 is not Impaired. All claims
of the DIP Lenders under the DIP Facility shall be Allowed and shall be paid in
full, in Cash on the Effective Date; provided, however, that, any claims under
the DIP Facility that do not arise until after the Effective Date shall be paid
in full in Cash by Reorganized Frank's as soon as practicable after such Claims
become Allowed. Without limiting the foregoing, once payments to be made on the
Effective Date have been made, the DIP Facility and any agreements or
instruments related thereto shall be deemed terminated and the DIP Lenders shall
take all reasonable action to confirm the removal of any liens on the properties
of the Debtors and their affiliates. On the Effective Date, any outstanding
letters of credit issued under the DIP Facility shall be either cash
collateralized, replaced or secured by letters of credit issued under the Exit
Facility.
3.03. Class 3 - Mortgagee Claims. Class 3 is Impaired. For the purposes
of the treatment afforded the Mortgagees under the Plan (other than the Settling
Mortgagees), the Claims set forth on Schedule 3.03 shall each be deemed fully
secured and, accordingly, to accurately represent the amount of each Mortgagee
Claim as of May 19, 2002. Each separate Mortgagee Claim listed on Schedule 3.03
shall be a separate subclass for voting purposes under
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the Plan. Each Mortgagee Claim shall be reinstated, pursuant to the following
terms and conditions:
(a) Amount. Principal plus: (i) accrued unpaid interest at the
non-default rate through the Confirmation Date; (ii) the actual, documented,
out-of-pocket costs reasonably incurred by the applicable Mortgagee as a result
of a need (because no other funds were available) to borrow funds to make
interest payments due under an indenture or other agreement, which borrowing
would not have been necessary but for the Debtors' failure to make timely
payments of interest under the applicable loan documents; and (iii) the actual,
documented, reasonably incurred costs and attorneys' fees otherwise payable
under the applicable loan documents, in an amount not to exceed $25,000 for each
subclass under the Plan.
(b) Term. 10 years from the Effective Date.
(c) Interest Rate. 6.25% per annum, payable monthly in arrears;
provided, however, that interest accrued after the Confirmation Date but before
the Effective Date shall not be due until the end of the calendar month in which
the Effective Date occurs.
(d) Amortization. 20 years, payable monthly in arrears.
(e) Prepayment. The Claim shall be prepayable without penalty or
premium in whole or in part at any time prior to maturity with at least thirty
(30) days advance notice.
(f) Escrows/Reserves. To the extent that a balance remains in any tax
or insurance escrows or any other escrows or reserves otherwise required to be
maintained pursuant to the relevant Mortgagee Loan Documents, the amount in such
escrows and/or reserves shall be applied to the first payments due under the
Plan to the applicable Mortgagee and Reorganized Frank's no longer shall be
required to maintain such escrows or reserves.
(g) Any guarantees by or joint obligations of the Debtors in respect of
the Mortgagee Claims pursuant to the Mortgagee Loan Documents shall be subject
to the substantive consolidation effected by Section 4.01 of this Plan and,
accordingly, shall merge into a single Claim against Reorganized Frank's.
(h) Any representations, warranties, or covenants relating to the
financial condition, capitalization, or operations of the Debtors contained in
the Mortgagee Loan Documents shall be of no force or effect.
(i) As a condition to the receipt of any payments by the Mortgagees on
account of the Mortgagee Claims pursuant to this Plan, the Mortgagees shall be
required to execute any agreements, amendments or supplements or to supply such
information as is reasonably necessary or appropriate to evidence the
modifications to the Mortgagee Loan Documents effected by this Plan or to
determine the amounts in any escrow or reserve funds required to be maintained
pursuant to the relevant Mortgagee Loan Documents.
(j) Except as modified pursuant to this Plan, the terms and conditions
of the Loan Documents shall continue to govern the parties' obligations
thereunder.
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(k) Notwithstanding the foregoing, the treatment of the Class 3 Claims
of the Settling Mortgagees shall be as set forth in the applicable term sheets
annexed hereto as Exhibits 3.03(k)-1 through 3.03(k)-6, respectively. Except as
modified by such term sheets, all other provisions of this Plan shall remain
fully effective as to the Settling Mortgagees.
3.04. Class 4 - All Other Secured Claims. Class 4 is not Impaired.
(a) Election of Alternative Treatments. At the election of Reorganized
Frank's, on or before the later of the Effective Date and ten (10) Business Days
after the date on which a Class 4 Claim becomes an Allowed Claim, such Claim
shall be paid in full by either:
(1) reinstating the Claim, that is, leaving unaltered the
legal, equitable, and contractual rights respecting such Claim
in accordance with section 1124 of the Bankruptcy Code,
including: (A) curing all pre- and postpetition defaults other
than defaults relating to the insolvency or financial
condition of the relevant Debtor or its status as a debtor
under the Bankruptcy Code; and (B) reinstating the maturity
date of the Claim;
(2) paying such Claim in full, in Cash, in an amount equal to
such Allowed Class 4 Claim on the Effective Date or as soon as
reasonably practicable thereafter; or
(3) transferring title to the property securing such Allowed
Class 4 Claim to the holder of such Claim. Within thirty (30)
days after mailing by the Debtors or Reorganized Frank's of
notice of the election of this option (iii), the holder of an
Allowed Class 4 Claim shall be entitled to amend in writing of
file a proof of claim for any unsecured deficiency Claim
respecting such Claim (to the extent such holder has recourse
to a Debtor respecting such Class 4 Claim, and provided the
holder has timely filed a proof of claim respecting such Class
4 Claim or whose Class 4 Claim was listed in the Schedules as
nondisputed, noncontingent, and liquidated). To the extent, if
any, allowed, such deficiency claim shall be treated in Class
7.
(b) Resolution of Allowed Amounts. Schedule 3.04 to this Plan lists:
(i) each Class 4 Claim; (ii) the amount in which each such Claim is proposed to
be allowed; and (iii) the additional cure amount, if any, proposed to be paid if
the Claim is to be reinstated. If prior to the Confirmation Date or such other
date as the Bankruptcy Court may fix, a holder of a Class 4 Claim fails to file
with the Bankruptcy Court and serve on the attorneys for the Debtors an
objection to the amount(s) set forth in such Schedule 3.04 respecting such
Claim, then such holder shall be forever barred from asserting any Claims
against the Debtors exceeding the proposed Allowed amount of such Claim, and
Reorganized Frank's shall be entitled to rely upon such amount(s) in selecting
the treatment for the Claim under this section. If a timely objection to the
amounts listed on Schedule 3.04 to the Plan is served and filed by a holder of a
Class 4 Claim, then such holder's Claim shall be deemed to be a Disputed Claim
to be resolved in accordance with the Plan.
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3.05. Class 5 - Priority Tax Claims. Class 5 is not Impaired. On the
later of the Effective Date or as soon as reasonably practicable thereafter and
ten (10) Business Days after the date on which a Class 5 Claim becomes an
Allowed Claim, such Claim shall be paid in full, in Cash; provided, however,
that the Debtors shall have the option, exercisable prior to the Effective Date,
to pay any Priority Tax Claim over a period not longer than six (6) years from
the date of assessment of the applicable tax, with interest on the unpaid
portion payable annually in arrears at the rate of interest ordered by the
Bankruptcy Court (or agreed to by the holder of the Claim and the Debtors).
3.06. Class 6 - All Other Priority Claims. Class 6 is not Impaired. On
the later of the Effective Date or as soon as reasonably practicable thereafter
and ten (10) Business Days after the date on which a Class 6 Claim becomes an
Allowed Claim, such Claim shall be paid in full, in Cash.
3.07. Class 7 - General Unsecured Claims. Class 7 is Impaired.
(a) Distributions. On the later of: (i) the Initial Distribution Date;
and (ii) ten (10) Business Days after the date on which a Class 7 Claim becomes
an Allowed Claim, each holder of an Allowed Class 7 Claim shall receive its
Ratable Share of 20 million shares of the New Common Stock; provided, however,
that Allowed Class 7 Claims subject to the Lump Sum Election shall instead
receive the applicable cash payment on such date.
(b) Lump Sum Cash Payment Election. Subject to the occurrence of the
Effective Date, each holder of a Class 7 Claim may elect, on such holder's
ballot for voting on the Plan, to receive a single lump sum cash payment of
10(cent) per dollar of Allowed Claim in lieu of New Common Stock and in full
satisfaction of any and all distributions to be made under the Plan for such
Class 7 Claim. The Lump Sum Election shall apply to such holder's entire Class 7
Claim. Each holder of an Allowed Class 7 Claim of $10,000 or less that is not an
Old Senior Subordinated Notes Claim shall be deemed to have made the Lump Sum
Election.
(c) Funding of Lump Sum Election Payments. Payments made to satisfy
Claims subject to the Lump Sum Election shall be funded by Kimco, in an amount
of up to $5 million (or such higher amount as Kimco may elect in writing at
least 10 days prior to the Effective Date in Kimco's sole and absolute
discretion), less any amount paid to purchase shares of New Common Stock from
the Indenture Trustee pursuant to section 5.01(c) hereof. On or before the
Effective Date, Kimco shall post a $5 million letter of credit to secure its
obligation to fund the Lump Sum Election. In the alternative, at Kimco's option,
Kimco may deposit $5 million into an escrow account to fund distributions on
Claims subject to the Lump Sum Election. To the extent such amount is not
sufficient to satisfy all Allowed Class 7 Claims subject to the election, all
such Allowed Claims shall be satisfied through the Lump Sum Election in the
order of lowest to highest amount, with the lowest amount being paid first. The
New Common Stock allocable to any Claim subject to the Lump Sum Election shall
be delivered to Kimco, as the funder of such payments. If a holder of a disputed
Class 7 Claim makes, or is deemed to have made, the Lump Sum Election, then the
lump sum payment allocable to such entire Claim shall be held in the escrow
pending resolution of such Claim, with any such reserve allocable to the
ultimately disallowed portion of such Claim to be made available to other
Allowed Claims subject to the Lump Sum Election. To the extent, if any, the $5
million
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deposited in escrow to fund the Lump Sum Elections is not exhausted, such funds
shall be returned to Kimco. All interest accrued in the escrow account shall be
paid to Reorganized Frank's at the end of each month.
(d) Subordinated Claims. Any Claim subordinated as provided in sections
510(b) or (c) of the Bankruptcy Code or otherwise to Class 7 Claims shall be
provisionally in Class 7 but receive no distributions therefrom.
3.08. Class 8 - Interests. Class 8 is impaired. On the Initial
Distribution Date, each holder of a Class 8 Interest shall receive its Ratable
Share of four-year warrants representing the right to purchase 913,044 shares of
New Common Stock, at a price of $1.38 per share.
ARTICLE IV.
MEANS OF IMPLEMENTATION OF THE PLAN
4.01. Substantive Consolidation. On the Effective Date, for the
purposes of the Chapter 11 Cases both Debtors shall be merged into Frank's to
become Reorganized Frank's, and the assets and liabilities of each Debtor shall,
as a result, become assets and liabilities of Reorganized Frank's alone. The
Plan contemplates and is predicated upon the substantive consolidation of both
Debtors into Reorganized Frank's solely for purposes of the Chapter 11 Cases and
all actions respecting confirmation and consummation of the Plan. On the
Confirmation Date or such other date as may be set by a Final Order of the
Court, but subject to the occurrence of the Effective Date: (i) all Claims
between the Debtors shall be eliminated; (ii) all assets and liabilities of the
Debtors shall be merged or treated as though they were merged and vest in
Reorganized Frank's (such liabilities to be satisfied in accordance with and
subject to the terms of the Plan); (iii) all cross-corporate guaranties of the
Debtors shall be eliminated and any obligation of any Debtor and all guaranties
thereof executed by one or both Debtors shall be deemed to be a single
obligation of the consolidated Debtors; (iv) any Claims filed or to be filed in
connection with any such obligation or such guaranties shall be deemed one Claim
against the consolidated Debtors; and (vi) each and every Claim filed or to be
filed in the individual Chapter 11 Case of any of the Debtors shall be deemed
filed against the consolidated Debtors and shall be deemed joint and several
obligations of both Debtors.
4.02. Non-voting Stock. The certificate of incorporation and by-laws of
Reorganized Frank's shall, inter alia, prohibit the issuance of nonvoting stock
to the extent required by section 1123(a) of the Bankruptcy Code.
4.03. Exemption From Securities Laws. The Confirmation Order will
provide that the offer and sale of the New Common Stock that is issued pursuant
to the Plan is exempt from registration pursuant to section 1145(a) of the
Bankruptcy Code and that such New Common Stock may be resold by the Holders
thereof without restriction, except to the extent that any such holder is deemed
to be an "underwriter" as defined in section 1145(b)(1) of the Bankruptcy Code
with respect to the New Common Stock.
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4.04. Listing of New Common Stock. Reorganized Frank's shall use
commercially reasonable efforts to cause the shares of the New Common Stock to
be listed on a national securities exchange or qualifying interdealer quotation
system. Reorganized Frank's will be a public reporting company under the
Securities Exchange Act of 1934 and will file periodic and current reports as
required thereunder.
4.05. Exit Financing. On or before the Effective Date, the Debtors
shall have obtained the Exit Facilities.
(a) Real Estate Exit Facility. The real estate Exit Facility shall be
substantially on the terms and conditions set forth in the commitment letter
annexed as Schedule 4.05(a) hereto.
(b) Receivables and Inventory Exit Facility. The receivables and
inventory Exit Facility shall be substantially on the terms and conditions set
forth in the commitment letter annexed as Schedule 4.05(b) hereto.
4.06. New Stock Option Plan. On the Effective Date, Reorganized Frank's
shall adopt and implement the New Stock Option Plan without the need for any
further corporate action in connection therewith.
4.07. Corporate Authorization.
(a) Certificate of Incorporation and Bylaws.
(i) The certificate of incorporation and by-laws of Reorganized Frank's
shall be amended and restated in a manner as is mutually acceptable to
the Debtors and the Committee.
(ii) Within sixty (60) days after the Effective Date, Reorganized
Frank's shall file such documents and take such other actions as are
necessary and appropriate to cause Reorganized Frank's to be
reincorporated in the State of Delaware. Such actions may include,
among other things: (a) the creation of a new Delaware corporation
("Newco"); (b) the merger of Frank's into FNC ("Merged FNC"); and (c)
the further merger of Merged FNC into Newco. No separate shareholder
approval shall be required to effectuate any of the foregoing.
(b) Governance Action. Any action under the Plan to be taken by or
required of Reorganized Frank's, including, without limitation, the adoption or
amendment of the certificate of incorporation and by-laws, issuance of
securities and instruments, and the mergers of the Debtors into Reorganized
Frank's, shall be authorized and approved in all respects, without any
requirement of further action by the board of managers of any of the Debtors or
Reorganized Frank's.
(c) Effectuating Documents and Further Transactions. Each Debtor and,
subsequently, Reorganized Frank's shall be authorized to execute, deliver, file,
or record such documents, contracts, instruments, releases and other agreements
and take such other action as may be necessary to effectuate and further
evidence the terms and conditions of the Plan.
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4.08. Post-Effective Date Management of Reorganized Frank's.
(a) On the Effective Date, the Board of Directors of Reorganized
Frank's shall consist of five (5) members, including Reorganized Frank's Chief
Executive Officer and four additional members to be selected by the Committee.
(b) Except as otherwise provided herein, the members of the existing
Board of Directors of FNC and Frank's shall have no continuing obligations to
Reorganized Frank's on or after the Effective Date.
4.09. Debtors' Retention of Causes of Action. On the Effective Date,
the Debtors' rights in respect of existing and potential Avoidance Actions shall
be preserved and become property of Reorganized Frank's. On the Effective Date,
Reorganized Franks shall be deemed the representative of the Debtors' estates
under section 1123(b) of the Bankruptcy Code and will be authorized and shall
have the power to commence and prosecute any and all causes of action that could
have been asserted by either of the Debtors. ALL AVOIDANCE ACTIONS SHALL SURVIVE
CONFIRMATION AND THE COMMENCEMENT OR PROSECUTION OF AVOIDANCE ACTIONS SHALL NOT
BE BARRED OR LIMITED BY ANY ESTOPPEL, WHETHER JUDICIAL, EQUITABLE, OR OTHERWISE.
4.10. Release.
(a) The following release shall be valid, binding, and enforceable and
shall supplement any benefits from sections 524 and 1141 of the Bankruptcy Code
to the Debtors or Reorganized Frank's and to other parties involved in these
Chapter 11 Cases:
AS OF THE CONFIRMATION DATE, BUT SUBJECT TO THE OCCURRENCE OF THE
EFFECTIVE DATE: NONE OF: (i) THE DEBTORS AND REORGANIZED FRANK'S AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS; (ii) AFFILIATES OF THE DEBTORS AND SUCH
AFFILIATES' SUCCESSORS AND ASSIGNS; (iii) THE DEBTORS' PRESENT DIRECTORS AND
OFFICERS; (iv) THE DEBTORS' FORMER DIRECTORS AND OFFICERS WHO HELD SUCH POSITION
WITH ANY OF THE DEBTORS AS OF OR SINCE THE PETITION DATE; (v) AGENTS, ATTORNEYS,
ADVISORS, FINANCIAL ADVISORS, AND INVESTMENT BANKERS OF THE DEBTORS AND THEIR
AFFILIATES; AND (vi) ANY PERSON CLAIMED TO BE LIABLE DERIVATIVELY THROUGH AND OF
THE FOREGOING, SHALL HAVE OR INCUR ANY LIABILITY TO ANY PERSON FOR ANY CLAIM,
OBLIGATION, RIGHT, CAUSE OF ACTION OR LIABILITY (INCLUDING, BUT NOT LIMITED TO,
ANY CLAIMS ARISING OUT OF ANY ALLEGED FIDUCIARY OR OTHER DUTY AND THE AVOIDANCE
OF PREFERENCES OR FRAUDULENT CONVEYANCES) WHETHER KNOWN OR UNKNOWN, FORESEEN OR
UNFORESEEN, EXISTING OR HEREAFTER ARISING, BASED ON WHOLE OR IN PART ON ANY ACT
OR OMISSION, TRANSACTION OR OCCURRENCE FROM THE BEGINNING OF TIME THROUGH THE
EFFECTIVE DATE IN ANY WAY RELATING TO THE DEBTORS; AND ALL CLAIMS BASED UPON OR
ARISING OUT OF SUCH ACTIONS OR OMISSIONS SHALL BE FOREVER WAIVED AND RELEASED;
PROVIDED, HOWEVER, THAT THIS SECTION SHALL HAVE NO EFFECT ON
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THE LIABILITY OF ANY PERSON THAT OTHERWISE WOULD RESULT FROM ANY ACTION OR
OMISSION TO THE EXTENT THAT SUCH ACTION OR OMISSION IS DETERMINED IN A FINAL
ORDER TO HAVE CONSTITUTED WILLFUL MISCONDUCT; PROVIDED FURTHER, HOWEVER, THAT
NOTWITHSTANDING THE RELEASE PROVIDED HEREBY, ANY CLAIM ASSERTED AGAINST
REORGANIZED FRANK'S PURSUANT TO SECTION 7.04 HEREOF SHALL REMAIN SUBJECT TO ANY
RIGHT OF SET-OFF THAT WOULD OTHERWISE BE AVAILABLE TO ANY OF THE DEBTORS OR
REORGANIZED FRANK'S IN THE ABSENCE OF ANY SUCH RELEASE.
THE RELEASE DESCRIBED ABOVE SHALL BE ENFORCEABLE AS A MATTER OF
CONTRACT AGAINST ANY HOLDER OF A CLAIM OR INTEREST TIMELY NOTIFIED OF THE
PROVISIONS OF THE PLAN. CREDITORS AND INTEREST HOLDERS OF THE DEBTORS SHALL BE
ENJOINED FROM COMMENCING OR CONTINUING ANY ACTION, EMPLOYMENT OF PROCESS OR ACT
TO COLLECT, OFFSET OR RECOVER ANY CLAIM THAT IS RELEASED AS PROVIDED HEREIN.
ARTICLE V.
TREATMENT OF CLAIMS AND DISTRIBUTIONS UNDER PLAN
5.01. Distributions to Holders of Old Senior Subordinated Notes Claims.
(a) All Distributions on account of Old Senior Subordinated Notes
Claims shall be made to the Indenture Trustee for further distribution to
individual holders of Old Senior Subordinated Notes Claims. Any such
distribution made by the Indenture Trustee shall be made pursuant to the
Indenture. Notwithstanding any provision in the Plan to the contrary, the
Indenture shall continue in effect to the extent necessary to allow the
Indenture Trustee to receive and make distributions pursuant to the Plan on
account of Old Senior Subordinated Notes Claims. Any actions taken by the
Indenture Trustee on or after the Effective Date that are not for this purpose
shall be null and void as against Reorganized Frank's, and Reorganized Frank's
shall have no obligations to the Indenture Trustee for any fees, costs or
expenses incurred in connection with any such actions.
(b) As of the close of business on the Record Date, the transfer
ledgers for the Old Senior Subordinated Notes shall be closed, and there shall
be no further changes in the record holders of any Old Senior Subordinated
Notes. Reorganized Frank's and the Indenture Trustee shall have no obligation to
recognize any transfer of Old Senior Subordinated Notes occurring on or after
the Record Date. Reorganized Frank's and the Indenture Trustee shall instead be
entitled to recognize and treat with for all purposes hereunder only with those
holders listed on the transfer ledgers of the Indenture Trustee as of the close
of business on the Record Date.
(c) Nothing in this Plan shall either enhance or impair any right of
the Indenture Trustee to enforce a charging lien against the New Common Stock
for amounts due to the Indenture Trustee under the Indenture. To the extent of
any such lien, the Indenture Trustee
15
may tender such New Common Stock as necessary to satisfy such lien to Kimco,
which shall purchase such shares at their Ascribed Value.
5.02. Distributions to Holders of Other Claims and Interests.
(a) On the Initial Distribution Date or as soon as reasonably
practicable thereafter, Reorganized Frank's shall distribute the New Common
Stock allocable to Allowed Claims held by members of Classes 7. For the purpose
of calculating the amount of New Common Stock to be distributed to holders of
Allowed Claims in Class 7 on the Initial Distribution Date (or to the Indenture
Trustee for further distribution to holders of Allowed Claims in Class 7, as
applicable) all Disputed Claims in Class 7 will be treated as though such Claims
will be Allowed Claims in the amounts asserted or as estimated by the Court
pursuant to section 502(c) of the Bankruptcy Code, as applicable.
(b) Upon any Interim Distribution Date, Reorganized Frank's may make
interim Distributions of New Common Stock to Class 7 in light of resolutions of
Disputed Claims since the date of the immediately prior Distribution.
(c) On the Final Distribution Date or as soon as reasonably practicable
thereafter, Reorganized Frank's shall make the balance of all Distributions
required under the Plan.
(d) Reorganized Frank's may employ or contract with other entities to
assist it in making the Distributions required by the Plan.
5.03. Compensation for Services Related to Distribution. In
consideration for providing services related to Distributions, the Indenture
Trustee and any other entity employed by Reorganized Frank's shall receive from
Reorganized Frank's, without the need for further Bankruptcy Court approval,
reasonable compensation for such services and reimbursement of reasonable
out-of-pocket expenses incurred in connection with such services. These payments
will be made on terms agreed to with Reorganized Frank's and shall not be
deducted from distributions to be made pursuant to the Plan to holders of
Allowed Claims and Interests.
5.04. Miscellaneous Distribution Provisions.
(a) Unclaimed Property. If a Distribution under the Plan remains
unclaimed six months following the date of such Distribution, then the holder of
the applicable Allowed Claim shall cease to be entitled to such Distribution and
such Distribution shall be retained by Reorganized Frank's. If any Distribution
on an Old Senior Subordinated Note Claim is returned to the Indenture Trustee as
undeliverable, the Distribution shall be held by the Indenture Trustee until it
becomes deliverable, or six months from the Effective Date, whichever is
earlier. After six months from the Effective Date: (a) the Indenture Trustee
shall return all such undeliverable Distributions to Reorganized Frank's; and
(b) all such undeliverable distributions shall become the property of
Reorganized Frank's.
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(b) Method of Cash Distributions. Any Cash payment to be made pursuant
to the Plan may be made by draft, check, wire transfer, or as otherwise required
or provided in any relevant agreement or applicable law.
(c) Fractional Plan Securities. Notwithstanding any other provision of
the Plan, only whole numbers of shares of New Common Stock will be issued. When
any Initial Distribution or Interim Distribution on account of an Allowed Claim
would otherwise result in the issuance of a number of shares of New Common Stock
that is not a whole number, the actual distribution of shares of such stock only
will include the next lower whole number. When any Final Distribution on account
of an Allowed Claim would otherwise result in the issuance of a number of shares
of New Common Stock that is not a whole number, the actual distribution of
shares of such stock will be rounded to the next higher or lower whole number as
follows: (i) fractions equal to or greater than _ will be rounded to the next
higher whole number; and (ii) fractions less than _ will be rounded to the next
lower number. The total number of shares of New Common Stock specified to be
distributed to a Class of Claims will be adjusted as necessary to account for
the rounding provided for herein. If, as a result of such rounding, the amount
of shares of New Common Stock to be distributed to a particular Class differs
from the aggregate number of shares of New Common Stock specified to be
distributed pursuant to the Plan to that Class, the aggregate number of shares
of New Common Stock specified with respect to such Class will be adjusted upward
or downward to provide for the appropriate distribution of New Common Stock, as
the case may be. No consideration will be provided in lieu of fractional shares
that are rounded down, except that with respect to Initial Distributions or
Interim Distributions, such fractional shares shall, with respect to each
Allowed Claim, be deemed held by Reorganized Frank's or the Indenture Trustee,
as the case may be, for the benefit of the holder of such Allowed Claim, to be
aggregated with the remaining Distribution to be allocated to such holder on the
Final Distribution Date. In addition, notwithstanding the foregoing, no de
minimis distribution shall be made, as provided in Section 5.04(g) of this Plan.
(d) Distributions on Non-Business Days. Any payment or Distribution due
on a day other than a Business Day shall be made, without interest, on the next
Business Day.
(e) No Distribution in Excess of Allowed Amount of Claim.
Notwithstanding anything to the contrary herein, no holder of an Allowed Claim
shall receive, respecting such Claim, any Distribution (of a value set forth
herein) in excess of the allowed amount of such Claim. Except as expressly
provided herein, no Claim shall be allowed to the extent that it is for
postpetition interest.
(f) Disputed Payments. If any dispute arises as to the identity of the
holder of an Allowed Claim or Interest entitled to receive any Distribution
under the Plan, Reorganized Frank's may retain such Distribution until its
disposition is determined by a Final Order or written agreement among the
interested parties to such dispute and withhold from such Distribution an amount
equal to the fees and costs incurred by Reorganized Frank's in resolving such
dispute.
(g) De Minimis Distributions. No: (i) Cash payment of less than
$100.00; or (ii) distribution of less than 100 shares of New Common Stock, shall
be required to be made to the holder of any Claim until the Final Distribution
Date for such Claim.
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(h) Withholding Taxes. Any federal or state withholding taxes or other
amounts required to be withheld under any applicable law shall be deducted and
withheld from any Plan distributions.
(i) Estimation of Disputed Claims. Unless otherwise provided for
herein, upon notice and a hearing, the Court shall estimate the aggregate Face
Amount of all Disputed Claims in any Class that are disputed, contingent and/or
unliquidated. The aggregate Face Amount of: (a) Disputed Claims; and (b) Allowed
Claims shall set the maximum allowable aggregate amount of Claims in each
relevant Class that is eligible to receive Distributions hereunder. The
existence of a Disputed Claim in any Class shall not impair or impede the making
of a Distribution to Allowed Claims in the same or other Classes. If the allowed
amount of any particular Disputed Claim is reconsidered under section 502(j) of
the Bankruptcy Code and Bankruptcy Rule 3008 and/or is allowed in an amount that
is greater than the estimated amount of such Claim or the ultimately allowed
amount of all Disputed Claims in a particular Class is greater than the
estimated aggregate Face Amount of such Claims, no claimant shall have recourse
to Reorganized Frank's (or any property thereof), any Distribution made to a
creditor in any other Class herein, or any Cash, previously distributed on
account of any Allowed Claim (however, nothing herein shall modify any right of
a holder of a reconsidered Claim under the penultimate sentence of section
502(j) of the Bankruptcy Code).
(j) Distribution When a Disputed Claim Becomes an Allowed Claim.
Promptly after a Disputed Claim becomes an Allowed Claim, unless a later time is
provided for in the Plan or by agreement of the parties, Reorganized Frank's
shall make a Distribution in Cash or a Ratable Share of New Common Stock, as the
case may be, to the holder of such Allowed Claim, as if such Claim had been an
Allowed Claim on all the prior Distribution Date(s).
5.05. Objections to Claims. Unless otherwise ordered by the Bankruptcy
Court, all objections to Claims shall be filed with the Bankruptcy Court and
served on the applicable claimant on or prior to one-hundred and eighty (180)
days after the later of: (a) the Effective Date; and (b) the date a Claim is
filed with the Bankruptcy Court and served on counsel for Reorganized Frank's.
5.06. Settlement of Claims. Subsequent to the Effective Date,
Reorganized Frank's shall have the authority to resolve any Disputed Claim for
an Allowed Claim of less than $100,000 without further Court order and subject
only to the filing of a notice of such settlement with the Court. Any such
settlement shall be binding upon all parties in interest in the Chapter 11
Cases.
5.07. Setoff. Reorganized Frank's may, but shall not be required to,
set off or recoup against any Allowed Claim and the distributions to be made
pursuant to the Plan on account of such Claim, claims of any nature that the
Debtors or Reorganized Frank's may have against the holder of such Allowed
Claim; provided, however, that neither the failure to effect such a setoff or
recoupment nor the allowance of any Claim against the Debtors or Reorganized
Frank's shall constitute a waiver or release by the Debtors or Reorganized
Frank's of any claim that the Debtors or Reorganized Frank's may possess against
such holder.
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ARTICLE VI.
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
6.01. Rejection.
(a) Leases and Contracts to be Rejected. On the Confirmation Date, but
subject to the occurrence of the Effective Date, each Debtor, pursuant to
section 365 of the Bankruptcy Code, all of the Debtors' executory contracts and
unexpired leases shall be deemed rejected except those that: (i) are the subject
of motions to assume or reject pending on the Confirmation Date; (ii) were
assumed or rejected before the Confirmation Date; (iii) are listed on Schedule
6.02 annexed hereto; (iv) become the subject of a dispute over the amount or
manner of cure and for which the Debtors or Reorganized Frank's, as the case may
be, makes a motion, at any time, to reject such contract or lease based upon the
existence of such dispute; or (v) are agreements, obligations, security
interests, or similar undertakings that the Debtors list on Schedule 3.04 hereto
as a Secured Claim of the Debtors, but the Bankruptcy Court later determines are
subject to assumption or rejection; provided, however, that the Debtors shall
not be required to assume or reject any executory contract or unexpired lease
with any party that is a debtor under the Bankruptcy Code unless and until such
contract or lease has been assumed or rejected by such other party.
(b) Effect of Post-Confirmation Rejection. The entry by the Bankruptcy
Court after the Confirmation Date of an order authorizing the rejection of an
executory contract or unexpired lease shall result in such rejection being a
prepetition breach under sections 365(g) and 502(g) of the Bankruptcy Code.
(c) Deadline to File Rejection Damage Claims. Each Person who is a
party to a contract or lease rejected under the Plan must file with the
Bankruptcy Court and served on the Debtors' attorneys, not later than thirty
(30) days after the Confirmation Date, a proof of Claim for damages alleged to
arise from the rejection of the applicable contract or lease or be forever
barred from filing a Claim, or sharing in distributions under the Plan, related
to such alleged rejection damages.
6.02. Assumption.
(a) Leases and Contracts to be Assumed. Annexed hereto as Schedule 6.02
is a list of the executory contracts and unexpired leases deemed to be assumed
by the Debtors under the Plan as of the Confirmation Date (but subject to the
occurrence of the Effective Date) pursuant to section 365 of the Bankruptcy
Code, and the cure amounts necessary for such assumptions.
(b) Deadline to Object to Cure Amounts. If prior to the Confirmation
Date or such other date as the Bankruptcy Court may fix, a party to such an
executory contract or unexpired lease listed on Schedule 6.02 hereto fails to
file with the Bankruptcy Court and serve upon the attorneys for the Debtors an
objection to the applicable cure amount listed on such Schedule, then such party
shall be forever barred from asserting any additional or other amounts against
the Debtors respecting such cure amount.
19
(c) Method of Cure. At the election of Reorganized Frank's, any
monetary defaults under each executory contract and unexpired lease to be
assumed under this Plan shall be satisfied pursuant to section 365(b)(1) of the
Bankruptcy Code, in one of the following ways: (a) by payment of the default
amount in Cash within thirty (30) days after the Effective Date or such longer
period ordered by the Bankruptcy Court; or (b) on such other terms as may be
agreed to by the parties to such executory contract or unexpired lease. If a
dispute occurs regarding: (x) the cure amount; (y) the ability of the applicable
Debtor to provide adequate assurance of future performance under the contract or
lease to be assumed; or (z) any other matter pertaining to assumption, then the
cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made
following the entry of a Final Order resolving the dispute and approving
assumption. Notwithstanding anything herein to the contrary, the Debtors shall
retain their right to reject any executory contract or unexpired lease that is
subject to a dispute concerning amounts necessary to cure any defaults, until
thirty days following entry of a Final Order establishing the cure amount.
ARTICLE VII.
DISCHARGE, RELEASE, INDEMNIFICATION, ABANDONMENT, AND
SETTLEMENT OF CLAIMS
7.01. Discharge.
(a) Scope. Except as otherwise provided in the Plan or Confirmation
Order, in accordance with section 1141(d)(1) of the Bankruptcy Code, entry of
the Confirmation Order acts as a discharge, effective as of the Effective Date,
of all Claims. The discharge of the Debtors shall be effective as to each Claim,
regardless of whether a proof of claim therefor was filed, whether the Claim is
an Allowed Claim, whether the Claim has been asserted, or whether the holder
thereof votes to accept the Plan. On the Effective Date, as to every discharged
Claim, any holder of such Claim shall be precluded from asserting such Claim
against the Debtors or Reorganized Frank's assets or properties, or any other or
further Claim based upon any document, instrument, act, omission, transaction or
other activity of any kind or nature relating to any Claim.
(b) Injunction. In accordance with sections 524 and 1141 of the
Bankruptcy Code, the discharge provided by this section, inter alia, acts as an
injunction against the commencement or continuation of any action, employment of
process or act to collect, offset or recover the Claims discharged hereby.
(c) Release of Securities. Each holder of any Claim other than a Class
3 Claim, shall surrender to Reorganized Frank's or to the Indenture Trustee, as
applicable, any note, instrument, document, certificate, subordinated note,
agreement, certificated security or other item, if any, evidencing such Claim.
No Distribution hereunder shall be made to or on behalf of any holder of a Claim
other than a Class 3 Claim unless and until such holder executes and delivers to
the Reorganized Frank's or the Indenture Trustee, as applicable, such items
described above, or demonstrates non-availability of such items to the
satisfaction of Reorganized Frank's or the Indenture Trustee, as applicable,
including requiring such holder to post a lost instrument or other indemnity
bond, among other things, to hold Reorganized Frank's
20
or the Indenture Trustee, as applicable, harmless in respect of such instrument
or other item described above and any Distributions made in respect thereof.
Reorganized Frank's or the Indenture Trustee, as applicable, may reasonably
require the holder of such Claim to hold Reorganized Frank's or the Indenture
Trustee, as applicable, harmless up to the amount of any Distribution made in
respect of such unavailable note, instrument, document, certificate,
subordinated note, agreement, certificated security or other item evidencing
such Claim. Any holder of a Claim other than a Class 3 Claim that fails to
execute and deliver such release of liens or other items described above or
satisfactorily explain their non-availability to Reorganized Frank's or the
Indenture Trustee, as applicable, within 120 days of the Effective Date shall be
deemed to have no further claim against the Debtors and Reorganized Frank's or
their property in respect of such Claim and shall not participate in any
Distribution hereunder, and the Distribution that would otherwise have been made
to such holder shall be treated as Unclaimed Property.
(d) Satisfaction of Claims and Interests. The treatment to be provided
for respective Allowed Claims pursuant to this Plan shall be in full
satisfaction, settlement, release and discharge of such respective Claims or
Interests.
7.02. Revesting and Vesting. Except as otherwise provided in this Plan,
on the Effective Date all property comprising the estates of the Debtors shall
vest in Reorganized Frank's, free and clear of all claims, liens, charges,
encumbrances and interests of creditors and equity security holders.
7.03. Postconfirmation Operations. As of the Effective Date,
Reorganized Frank's may operate their businesses and use, acquire and settle and
compromise claims or interests without supervision of the Court free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan and Confirmation Order. Without
limiting the foregoing, Reorganized Frank's may pay the charges they incur for
professional fees, disbursements, expenses or related support services after the
Confirmation Date without any application to the Court.
7.04. Survival of Certain Indemnification Obligations. The obligations,
if any, of the Debtors to indemnify individuals who serve or served after the
Petition Date as the Debtors' respective directors, officers, agents, employees,
representatives, and others, including (without limitation) professional persons
retained by the Debtors, pursuant to the Debtors' certificate of incorporation,
by-laws, applicable statutes and preconfirmation agreements in respect of all
present and future actions, suits and proceedings against any of such officers,
directors, agents, employees, representatives, and others, including (without
limitation) professional persons retained by the Debtors, based upon any act or
omission related to service with, for or on behalf of the Debtors on or before
the Effective Date as such obligations were in effect at the time of any such
act or omission, shall not be discharged or impaired by confirmation or
consummation of this Plan, but shall survive unaffected by the reorganization
contemplated by this Plan and shall be performed and honored by Reorganized
Frank's regardless of such confirmation, consummation, and reorganization.
7.05. Limitation on Liability Regarding Chapter 11 Activities. NONE OF
THE DEBTORS, THE COMMITTEE, OR KIMCO, OR ANY OF THEIR RESPECTIVE
21
OFFICERS, DIRECTORS, MANAGERS, EMPLOYEES, MEMBERS (INCLUDING ANY ex officio
MEMBERS) OR AGENTS (EACH ACTING IN SUCH CAPACITY), NOR ANY PROFESSIONAL PERSONS
EMPLOYED BY ANY OF THEM WILL HAVE OR INCUR ANY LIABILITY TO ANY PERSON FOR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH OR RELATED TO THE
FORMULATION, PREPARATION, DISSEMINATION, IMPLEMENTATION, CONFIRMATION, OR
CONSUMMATION OF THE PLAN, THE DISCLOSURE STATEMENT, ANY CONTRACT, RELEASE, OR
OTHER AGREEMENT OR DOCUMENT CREATED OR ENTERED INTO, OR ANY OTHER ACTION TAKEN
OR OMITTED TO BE TAKEN IN CONNECTION WITH THE PLAN OR THE CHAPTER 11 CASES, AND
ALL CLAIMS BASED UPON OR ARISING OUT OF SUCH ACTIONS OR OMISSIONS WILL BE
FOREVER WAIVED AND RELEASED; provided, however, THAT NOTHING HEREIN SHALL AFFECT
THE LIABILITY OF ANY ENTITY THAT OTHERWISE WOULD RESULT FROM ANY ACTION OR
OMISSION TO THE EXTENT THAT SUCH ACTION OR OMISSION IS DETERMINED IN A FINAL
ORDER TO HAVE CONSTITUTED WILLFUL MISCONDUCT.
ARTICLE VIII.
CONDITIONS TO CONFIRMATION AND EFFECTIVE DATE
8.01. Conditions to Confirmation. Except as provided in Section 8.03
below, the following are conditions precedent to confirmation of the Plan:
(a) The Bankruptcy Court shall have entered the Confirmation Order.
8.02. Conditions to Effective Date. Except as provided in Section 8.03
below, the Plan may not be consummated unless each of the conditions set forth
below has been satisfied:
(a) The Confirmation Order shall have been entered and not be the
subject of any judicial stay.
(b) All instruments and documents required by the respective lenders in
connection with the Exit Facilities shall have been executed and the funding for
borrowings thereunder will be available on or before the Effective Date.
8.03. Waiver of Conditions to Confirmation and Effective Date.
(a) Waiving Party. Other than the requirements set forth in Sections
8.01(a) and 8.02(a) of the Plan, each of the conditions to confirmation of the
Plan or the occurrence of the Effective Date may be waived in whole or part by
the Debtors in their sole discretion, without notice and a hearing.
(b) Effect of Waiver or Failure to Waive. Any such waiver(s) shall not
affect the relevant Debtors' benefits under the "mootness doctrine." The failure
to satisfy or waive any condition may be asserted by any Debtor, regardless of
the circumstances giving rise to the failure of such condition to be satisfied
(including, without limitation, any act, action, failure to
22
act, or inaction by any of the Debtors). The failure of a Debtor to exercise any
of the foregoing rights shall not be deemed a waiver of any other rights and
each such right shall be deemed an ongoing right that may be asserted or waived
(as set forth herein) at any time or from time to time.
(c) Method of Waiver. To be effective, any such waiver(s) must be in
writing and filed with the Bankruptcy Court.
8.04. Effect of Nonoccurrence of the Conditions to Effective Date. If
each of the conditions to the occurrence of the Effective Date has not been
satisfied or duly waived on or before the first Business Day that is more than
179 days after the Confirmation Date (or by such later date as the Debtors
propose and the Bankruptcy Court approves, after notice and a hearing), upon
motion by any party in interest, the Confirmation Order may be vacated by the
Bankruptcy Court; provided, however, that notwithstanding the filing of such a
motion, the Confirmation Order shall not be vacated if each of the conditions to
the Effective Date is either satisfied or duly waived before the Bankruptcy
Court enters an order granting the relief requested in such motion. If the
Confirmation Order is vacated pursuant to this section, then the Plan shall be
null and void in all respects, and nothing contained in the Plan shall: (a)
constitute a waiver or release of any Claims against, liens on property of the
Debtors; or (b) prejudice in any manner the rights of any of the Debtors,
including (without limitation) the right to seek further extensions of the
exclusivity periods under section 1121(d) of the Bankruptcy Code, which
exclusivity periods shall be deemed to have been extended to the date sixty (60)
days after the date of entry of any order vacating the Confirmation Order,
subject to the rights of any party to seek to shorten the exclusivity periods
after notice and hearing.
ARTICLE IX.
ADMINISTRATIVE PROVISIONS
9.01. Retention of Jurisdiction. Notwithstanding confirmation of the
Plan or occurrence of the Effective Date, the Bankruptcy Court shall retain
jurisdiction for the following purposes:
(a) Determination of the allowability of Claims against, or the
administrative expenses of, the Debtors (except those Claims that are Allowed
Claims pursuant to the Plan, unless such determination is pursuant to a
reconsideration or modification of the entire Plan), and the validity, extent,
priority, and nonavailability of consensual and nonconsensual liens and other
encumbrances;
(b) Determination of any of the Debtors' tax liability pursuant to
section 505 of the Bankruptcy Code;
(c) Approval, pursuant to section 365 of the Bankruptcy Code, of all
matters related to the assumption, assumption and assignment, or rejection of
any executory contract or unexpired lease of any of the Debtors;
23
(d) Resolution of controversies and disputes regarding the enforcement
or interpretation of the Plan, the Confirmation Order, or the Bankruptcy Court's
orders that survive Confirmation of the Plan pursuant to the Plan or other
applicable law;
(e) Implementation of the provisions of the Plan, and entry or orders
in aid of confirmation and consummation of the Plan and enforcing settlements or
orders entered during the Chapter 11 Cases or as part of the Plan, including,
without limitation, appropriate orders to protect Reorganized Frank's from
actions by Creditors of the Debtors and resolution of disputes and controversies
regarding property of the Debtors' estates and Reorganized Frank's;
(f) Modification of the Plan pursuant to section 1127 of the Bankruptcy
Code;
(g) Commencement and adjudication of any causes of action that arose
preconfirmation or in connection with the implementation of the Plan, including
Avoidance Actions and other actions against third parties brought or to be
brought by a Debtor, Reorganized Frank's or other successors of either of the
Debtors as the representative of the Debtors' estates, or a party in interest
(as a representative of either Debtor's estate);
(h) Entry of a Final Order closing the Chapter 11 Cases;
(i) Resolution of disputes concerning Disputed Claims, Claims for
disputed distributions and recharacterization or equitable subordination of
Claims;
(j) The resolution of any disputes concerning any release under the
Plan of a nondebtor or the injunction under the Plan, or in the Confirmation
Order against acts, employment of process, or actions against such nondebtor;
(k) Resolution of any disputes concerning whether a Person had
sufficient notice of: (i) the Chapter 11 Cases; (ii) the applicable Claims' bar
date; (iii) the hearing on the approval of the Disclosure Statement as
containing adequate information; (iv) the hearing on confirmation of the Plan
for the purpose of determining whether a Claim is discharged hereunder; or (v)
for any other purpose;
(l) Issuance of injunctions, grant and implementation of other orders,
or taking such other actions as may be necessary or appropriate to restrain
interference by any Person with consummation or enforcement of the Plan;
(m) Resolution of controversies and disputes regarding settlement
agreements, orders, injunctions, judgments, and other matters entered or
approved by the Bankruptcy Court in connection with any adversary proceeding,
discovery, or contested matter in any of the Chapter 11 Cases;
(n) Correction of any defect, cure of any omission or reconcile any
inconsistency in the Plan, the Confirmation Order, organizational documents of
Reorganized Frank's or any other documents relating to the Plan, as may be
necessary to carry out the purposes or intent of the Plan;
24
(o) Adjudication of any pending adversary proceeding, or other
controversy or dispute, in any of the Chapter 11 Cases, which arose
pre-confirmation and over which the Bankruptcy Court had jurisdiction prior to
confirmation of the Plan;
(p) Entry and implementation of such orders as may become necessary or
appropriate if the Confirmation Order is for any reason modified, stayed,
reversed, revoked, or vacated; and
(q) Determination of any other matters that may arise in connection
with or related to the Plan, the Disclosure Statement, the Confirmation Order or
any contract, instrument, release, or other agreement or document created in
connection with the Plan or Disclosure Statement.
9.02. Plan Revocation.
(a) Pre-Confirmation Amendments. The Debtors reserve the right to
modify the Plan at any time prior to the Confirmation Date.
(b) Revocation of the Plan. The Debtors reserve the right to revoke or
withdraw the Plan prior to the Confirmation Date. If the Debtors revoke or
withdraw the Plan, or if confirmation of the Plan does not occur, then the Plan
and related Disclosure Statement shall be null and void, and nothing contained
therein shall: (i) constitute a waiver or release of any Claims by or against,
liens in property of, the Debtors; or (ii) serve as an admission of fact or
conclusion of law or otherwise prejudice in any manner the rights of the Debtors
in any further proceedings involving the Debtors.
9.03. 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.
9.04. Severability. Should any provision in the Plan be determined to
be unenforceable following the Confirmation Date, such determination shall in no
way limit or affect the enforceability and operative effect of any and all other
provisions of the Plan; provided that the Plan, as modified, meets the
requirements of the Bankruptcy Code, including, without limitation, section 1127
of the Bankruptcy Code.
9.05. Governing Law. Except to the extent the Bankruptcy Code,
Bankruptcy Rules, other federal laws apply, or as otherwise expressly provided
in the Plan, the rights and obligations arising under the Plan shall be governed
by the laws of the State of New York without giving effect to principles of
conflicts of law.
9.06. Committees. As of the Initial Distribution Date, the duties of
any official committee in the Chapter 11 Cases shall terminate except as to: (a)
any appeal or motion for reconsideration of the Confirmation Order; and (b)
objections to fee applications of professional Persons or to Claims for
substantial contribution pursuant to section 503 of the Bankruptcy Code.
25
9.07. Application of Bankruptcy Code section 1146(c). The
issuance, transfer, or exchange of a security, or the making or delivery of an
instrument of transfer under the Plan shall be entitled to the tax treatment
provided by sections 1146(c) of the Bankruptcy Code and each recording or other
agent of any governmental office shall record any such documents of issuance,
transfer, or exchange without any further direction or order from the Court.
9.08. Payment of Statutory Fees. All fees payable pursuant to
section 1930 of title 28, United States Code, due and payable through the
Effective Date shall be paid by the Debtors or Reorganized Frank's on or before
the Effective Date and amounts due thereafter shall be paid by Reorganized
Frank's in the ordinary course.
9.09. Continuation of Injunctions and Stays. Unless otherwise
provided, all injunctions or stays ordered in the Chapter 11 Cases, pursuant to
section 105 of the Bankruptcy Code or otherwise, and extant on the Confirmation
Date shall remain in full force and effect unless or until subsequently
modified or terminated.
9.10. Undefined Terms. Any term used herein that is not defined
herein shall have the meaning ascribed to any such term used in the Bankruptcy
Code and/or the Bankruptcy Rules, if used therein.
9.11. Interpretation. The words "herein," "hereof," "hereto,"
"hereunder," and others of similar inference refer to the Plan as a whole and
not to any particular section, subsection, or clause contained in the Plan
unless otherwise specified herein. The word "including" shall mean including,
without limitation. The headings in the Plan are only for convenience of
reference and shall not limit or otherwise affect the provisions of the Plan.
A term used herein or elsewhere in the Plan that is not defined herein shall
have the meaning ascribed to that term, if any, in the Bankruptcy Code or
Bankruptcy Rules.
Submitted by:
Dated: May 7, 2002 FNC HOLDINGS, INC.
/s/ Steven S. Fishman
By: ----------------------------
Chief Executive Officer
Dated: May 7, 2002 FRANK'S NURSERY & CRAFTS, INC.
By: /s/ Steven S. Fishman
----------------------------
Chief Executive Officer
Schedule 1.52
Frank's Nursery & Crafts, Inc.
2002 Stock Option Plan
FRANK'S NURSERY & CRAFT, INC.
2002 STOCK OPTION PLAN
1. Definitions. As used in this 2002 Stock Option Plan Frank's
Nursery & Craft, Inc., the following terms shall have the following meanings:
(a) "Affiliate" means any affiliate of the Company within the meaning
of 17 CFR ss. 230.405.
(b) "Board of Directors" or "Board" means the Company's board of
directors.
(c) "Change in Control" shall mean:
(i) The acquisition, after the Effective Date, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 35% or more (on a fully
diluted basis) of either (A) the then outstanding shares of Stock, taking
into account as outstanding for this purpose such shares issuable upon the
exercise of options or warrants, the conversion of convertible shares or
debt, and the exercise of any similar right to acquire shares (the
"Outstanding Company Common Stock") or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors or member managers (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control: (V) any acquisition by the Company or any
Affiliate, (W) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Affiliate of the
Company, (X) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of Section 1(c)(iii), (Y) any
acquisition in connection with any loan or other financing described in,
pursuant to, as a result of, or in connection with the Plan of
Reorganization, or (Z) any acquisition by an Existing Shareholder (or any
Existing Shareholder Affiliate). For purposes of this Section (1)(c)(i),
"Existing Shareholder" shall be defined as any shareholder receiving Stock
pursuant to, as a result of, or in connection with the Plan of
Reorganization and "Existing Shareholder Affiliate" shall be defined as
any person or entity that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with
the Existing Shareholder; or
(ii) Individuals who, as of the Effective Date, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election, or nomination
for election by the directors then comprising the Incumbent Board, was
approved by a vote of at least a majority of the Company's shareholders
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Consummation, after the Effective Date, of a reorganization,
merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business Combination"),
in each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 65% of the
then outstanding shares of common stock or interests and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation or other entity resulting from such Business Combination
(including, without limitation, a corporation or entity which as a result
of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, and (B) no
Person (excluding any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Affiliate of the Company, or such
corporation resulting from such Business Combination or any Affiliate of
such corporation) beneficially owns, directly or indirectly, 35% or more
(on a fully diluted basis) of, respectively, the then outstanding shares
of common stock or interests of the corporation or entity resulting from
such Business Combination, taking into account as outstanding for this
purpose such common stock or interests issuable upon the exercise of
options or warrants, the conversion of convertible stock, interests or
debt, and the exercise of any similar right to acquire such common stock
or interests, or the combined voting power of the then outstanding voting
securities of such corporation or other entity except to the extent that
such ownership existed prior to the Business Combination and (C) at least
a majority of the members of the board of directors or equivalent
governing body of the corporation or other entity resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders or equityholders of the Company of
a complete liquidation or dissolution of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the full Board of Directors, the Compensation
Committee of the Board of Directors, or such other committee of at least two
independent people as the Board of Directors may appoint to administer the Plan.
(f) "Company" means Frank's Nursery & Craft, Inc., a Delaware
corporation, as reorganized pursuant to the Plan of Reorganization.
2
(g) "Effective Date" shall have the meaning ascribed to it in Section
21 hereof.
(h) "Exchange Act" means the Securities Exchange Act of 1934.
(i) "Fair Market Value" on a given date means (i) if the Stock is
listed on a national securities exchange, the mean between the highest and
lowest sale prices reported as having occurred on the primary exchange with
which the Stock is listed and traded on the date prior to such date, or, if
there is no such sale on that date, then on the last preceding date on which
such a sale was reported; (ii) if the Stock is not listed on any national
securities exchange but is quoted in the National Market System of the National
Association of Securities Dealers Automated Quotation System on a last sale
basis, the average between the high bid price and low ask price reported on the
date prior to such date, or, if there is no such sale on that date, then on the
last preceding date on which a sale was reported; or (iii) if the Stock is not
listed on a national securities exchange nor quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation
System on a last sale basis, the amount determined by the Committee to be the
fair market value based upon a good faith attempt to value the Stock accurately
and computed in accordance with applicable regulations of the Internal Revenue
Service; or (iv) in the event of a Change in Control, the same amount received
by the selling shareholders. Notwithstanding anything contained herein to the
contrary, the Fair Market Value as of the consummation date of the Plan of
Reorganization shall be the ascribed value set forth in the Plan of
Reorganization.
(j) "Grant Date" means the date on which an Option is granted, as
specified in Section 7.
(k) "Incentive Option" means an Option which by its terms is to be
treated as an "incentive stock option" within the meaning of Section 422 of the
Code.
(l) "Nonemployee Director" means a director of the Company who is not
an officer or employee of the Company and who is (i) a "nonemployee director"
within the meaning of Rule 16b-3 under the Exchange Act, or any successor rule
or regulation and (ii) an "outside director" within the meaning of Section
162(m) of the Code; provided, however, that clause (ii) shall apply only with
respect to grants of Options intended by the Committee to qualify as
"performance-based compensation" under Section 162(m) of the Code.
(m) "Nonstatutory Option" means any Option that is not an Incentive
Option.
(n) "Option" means an option to purchase shares of the Stock granted
under the Plan.
(o) "Option Agreement" means an agreement between the Company and an
Optionee, setting forth the terms and conditions of an Option.
(p) "Option Period" shall have the meaning ascribed to it in Section
9 hereof.
(q) "Option Price" means the price paid or to be paid by an Optionee
for a share of Stock upon exercise of an Option.
3
(r) "Optionee" means a person eligible to receive an Option, as
provided in Section 6, to whom an Option shall have been granted under the Plan.
(s) "Plan" means this 2002 Stock Option Plan of the Company.
(t) "Plan of Reorganization" means the Company's Joint Plan of
Reorganization, dated February __, 2002, as amended.
(u) "Securities Act" means the Securities Act of 1933, as amended.
(v) "Stock" means common stock, par value $.001 per share, of the
Company.
(w) "Subsidiary" means any subsidiary of the Company as defined in
Section 424(f) of the Code.
(x) "Ten Percent Owner" means a person who owns, or is deemed within
the meaning of Section 422(b)(6) of the Code to own, stock possessing more than
10% of the total combined voting power of all classes of stock of the Company
(or its parent or subsidiary corporations). Whether a person is a Ten Percent
Owner shall be determined with respect to each Option based on the facts
existing immediately prior to the Grant Date of such Option.
2. Purpose. The Plan is intended to encourage ownership of the Stock
by key employees and Nonemployee Directors of the Company and to provide
additional incentive for them to promote the success of the Company's business.
The Plan is intended to provide for the grant of Incentive Options and
Nonstatutory Options.
3. Term of the Plan. The expiration date of the Plan, after which no
Options may be granted hereunder, shall be the date that is ten years following
the Effective Date; provided, however, that the administration of the Plan shall
continue in effect until all matters relating to the payment of Options
previously granted have been settled.
4. Administration.
(a) The Plan shall be administered by the Committee. Unless otherwise
determined by the Board of Directors, each member of the Committee shall, at the
time he takes any action with respect to an Option under the Plan, be a
Nonemployee Director. The majority of the members of the Committee shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present or acts approved in writing by a majority
of the Committee shall be deemed the acts of the Committee.
(b) Subject to the provisions of the Plan (including, without
limitation, the provisions of Sections 8 and 9), the Committee shall have
complete authority, in its discretion, to make the following determinations with
respect to each Option to be granted by the Company: (i) the key employee or
Nonemployee Director to receive the Option; (ii) whether the Option (if granted
to an employee) will be an Incentive Option or a Nonstatutory Option; (iii) the
time of granting the Option; (iv) subject to Section 5, the number of shares of
the Stock subject to the Option; (v) the Option Price; (vi) the vesting
schedule, if any, over which the Option shall become exercisable; (vii) the
expiration date of the Option (which may not be more than ten (10)
4
years after the date of grant thereof); and (viii) the restrictions, if any, to
be imposed upon transfer of shares of the Stock purchased by the Optionee upon
the exercise of the Option. The Committee shall have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective Option
Agreements (which need not be identical), and to make all other determinations
necessary or advisable for the administration of the Plan. The Committee's
determination on the matters referred to in this Section 4 shall be conclusive.
5. Stock Subject to the Plan. The Plan covers 3,652,174 shares of the
Stock, subject, however, to the provisions of Section 11 of the Plan. All of the
shares of the Stock covered by the Plan may be granted, at the Committee's
discretion, as performance based compensation pursuant to Section 162(m) of the
Code. The number of shares of the Stock purchased pursuant to the exercise of
Options and the number of shares of the Stock subject to outstanding Options
shall be charged against the shares covered by the Plan; but shares of the Stock
subject to Options which terminate without being exercised shall not be so
charged. Shares of the Stock to be issued upon the exercise of Options may be
either authorized but unissued shares or shares held by the Company in its
treasury. During any calendar year no person may be granted Options with respect
to more than 500,000 shares of Stock; provided, however, that with respect to
calendar year 2002, no person may be granted Options with respect to more than
2,000,000 shares of Stock.
6. Eligibility. An Option may be granted only to a key employee or
Nonemployee Director of the Company; provided, however, that Incentive Options
may only be granted to employees of the Company.
7. Discretionary Grant of Stock Options. The Committee is authorized
to grant one or more Incentive Options or Nonstatutory Options to any person who
meets the eligibility requirements of Section 6. Each Option so granted shall be
subject to the provisions of the Plan, or to such other conditions as may be
reflected in the applicable Option Agreement.
8. Option Price. The Option Price per share of Stock for each Option
shall be set by the Committee at the time of grant but shall not be less than,
in the case of an Incentive Option, 100% of the Fair Market Value of the Stock
on the Grant Date, or not less than 110% of the Fair Market Value of the Stock
on the Grant Date if the Optionee is a Ten Percent Owner; provided, however,
that all Options intended to qualify as "performance-based compensation" under
Section 162(m) of the Code shall have an Option Price per share of Stock no less
than the Fair Market Value of a share of Stock on the Grant Date
9. Option Period. Options shall vest and become exercisable in such
manner and on such date or dates determined by the Committee and shall expire
after such period, not to exceed ten years, as may be determined by the
Committee (the "Option Period"); provided, however, that no Incentive Option may
be exercised later than the fifth anniversary of the Grant Date if the Optionee
is a Ten Percent Owner; further, provided, however, that notwithstanding any
vesting dates set by the Committee, the Committee may in its sole discretion
accelerate the exercisability of any Option, which acceleration shall not affect
the terms and conditions of any such Option other than with respect to
exercisability. If an Option is exercisable in installments,
5
such installments or portions thereof which become exercisable shall remain
exercisable until the Option expires.
10. $100,000 Per Year Limitation for Incentive Stock Options. To the
extent the aggregate Fair Market Value (determined as of the Grant Date) of
Stock for which Incentive Options are exercisable for the first time by any
Optionee during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $100,000, such excess Incentive Options shall be treated
as Nonstatutory Options.
11. Manner of Exercise and Form of Payment.
(a) The Options shall be exercised by delivering written notice to
the Company stating the number of shares of Stock to be purchased, the person or
persons in whose name the shares of Stock are to be registered and each such
person's address and social security number. Such notice shall not be effective
unless accompanied by the full purchase price for all shares to be purchased,
and any applicable withholding (as described below). The purchase price shall be
payable in cash or, in the discretion of the Committee, in shares of Stock, by
any other means or method acceptable to the Committee or any combination
thereof; provided that the Optionee may use Stock in payment of the exercise
price only if the shares so used are considered "mature" for purposes of
generally accepted accounting principles, i.e., (i) have been held by the
Optionee free and clear for at least six months prior to the use thereof to pay
part of an Option exercise price, (ii) have been purchased by the Optionee on
the open market, or (iii) meet any other requirements for "mature" shares as may
exist on the date of the use thereof to pay part of an Option exercise price.
Payment in currency or by certified or cashier's check shall be considered
payment in cash. In the event that all or part of the purchase price is paid in
shares of Stock, the shares used in payment shall be valued at their Fair Market
Value on the date of exercise of the relevant Options. Subject to, and promptly
after, the Optionee's compliance with all of the provisions of this Section 11,
the Company shall deliver or cause to be delivered to the Optionee a certificate
for the number of shares of the Stock then being purchased by him or her. If any
law or applicable regulation of the Securities and Exchange Commission or other
body having jurisdiction in the premises shall require the Company or the
Optionee to take any action in connection with shares of the Stock being
purchased upon exercise of the Option, exercise of the Option and delivery of
the certificate or certificates for such shares (including, without limitation,
any exercise of the Option and delivery of the certificate or certificate for
such shares in accordance with the procedures set forth in Section 11(c) below)
shall be postponed until completion of the necessary action, which shall be
taken at the Company's expense. The number of shares of Stock subject to each
outstanding Option shall be reduced by one share for each share of the Stock
purchased upon exercise of the Option.
(b) The Company's obligation to deliver shares of Stock upon exercise
of an Option shall be subject to the Optionee's satisfaction of all applicable
federal, state and local income and employment tax withholding obligations. The
Optionee shall satisfy such obligations by making a payment of the requisite
amount in cash or by check, unless the Optionee is entitled to and has elected
to effect such payment through a "cashless" exercise in accordance with Section
11(c) below.
6
(c) In lieu of the methods of exercise described in Section 11(a)
above, an Optionee may, unless prohibited by applicable law, elect to effect
payment by including with the written notice of exercise referred to in Section
11(a) above irrevocable instructions to deliver for sale to a registered
securities broker acceptable to the Company a number of shares of Stock subject
to the Option being exercised sufficient, after brokerage commissions, to cover
the aggregate option price payable with respect to such shares and, if the
Optionee further elects, the Optionee's withholding obligations under Section
11(b) with respect to such exercise, together with irrevocable instructions to
such broker to sell such shares and to remit directly to the Company such
aggregate option price and, if the Optionee has so elected, the amount of such
withholding obligations. The Company shall not be required to deliver to such
securities broker any stock certificate for such shares until it has received
from the broker such aggregate option price and, if the Optionee has so elected,
the amount of such withholding obligations.
12. Transferability of Options. Unless specifically allowed by the
Committee and set forth in an Option Agreement, Options shall not be
transferable, otherwise than by will or the laws of descent and distribution,
and may be exercised during the life of the Optionee only by the Optionee.
13. Termination of Employment. If an Optionee ceases to be an
employee of the Company or a Subsidiary, or a Nonemployee Director's service
with the Company terminates, for any reason other than retirement (in accordance
with any qualified retirement plan maintained by the Company), in the case of an
employee, or death of an Optionee, any Option held by that Optionee may be
exercised by the Optionee at any time within 90 days after the termination of
such relationship, but only to the extent exercisable at termination and in no
event after the Option Period. If an Optionee that is an employee of the Company
or a Subsidiary enters retirement from employment or any Optionee dies, any
Option held by that Optionee may be exercised by the Optionee or the Optionee's
trustee, executor or administrator, as applicable, at any time within the
shorter of the option period or 12 months after the date of retirement or death,
but only to the extent exercisable at retirement or death. Options which are not
exercisable at the time of termination of such relationship or which are so
exercisable but are not exercised within the time periods described above shall
terminate. Military or sick leave shall not be deemed a termination under this
Section 13 provided that such leave does not exceed the longer of 90 days or the
period during which the reemployment rights of the absent employee are
guaranteed by statute or by contract.
14. Adjustment of Number of Shares; Fractional Shares.
(a) Options granted under the Plan and any agreements evidencing such
Options, the maximum number of shares of Stock subject to all Options and the
maximum number of shares of Stock with respect to which any one person may be
granted Options during any year shall be subject to adjustment or substitution,
as determined by the Committee in its sole discretion, reasonably exercised, as
to the number, price or kind of a share of Stock or other consideration subject
to such Options or as otherwise determined by the Committee to be equitable (i)
in the event of changes in the outstanding Stock or in the capital structure of
the Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the Grant
Date of any such Option or (ii) in the event of any change
7
in applicable laws or any change in circumstances which results in or would
result in any substantial dilution or enlargement of the rights granted to, or
available for, Optionees in the Plan, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Plan. In
addition, in the event of any such adjustments or substitution, the aggregate
number of shares of Stock available under the Plan, and the aggregate number of
shares of Stock as to which Options may be granted to any one person over the
term of the Plan, shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any adjustment in Incentive Options under
this Section 14 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 14 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. Further, with respect to Options intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, such
adjustments or substitutions shall be made only to the extent that the Committee
determines that such adjustments or substitutions may be made without a loss of
deductibility for Options under Section 162(m) of the Code. The Company shall
give each Optionee notice of an adjustment hereunder and, upon notice, such
adjustment shall be conclusive and binding for all purposes.
(b) Upon a Change in Control, all outstanding Options that have not
yet become fully vested and exercisable shall become fully vested and
exercisable. Upon a Change in Control, the Committee may, in its discretion and
upon at least 10 days advance notice to the affected persons, provide that an
Option shall terminate, but the Optionee (if at the time an employee or
Nonemployee Director of the Company or a Subsidiary) shall have the right,
immediately prior to such event, to exercise the Option, to the extent then
exercisable by its terms and not theretofore exercised. In the event of a Change
in Control, the Committee may also, in its discretion and upon at least 10 days
advance notice to the affected persons, cancel any outstanding Options and pay
to the Optionees thereof, in cash or stock, or any combination thereof, the
value of such Options based upon the price per share of Stock received or to be
received by other shareholders of the Company in the event. The terms of this
Section 14 may be varied by the Committee in any particular Option Agreement. No
fraction of a share of the Stock shall be purchasable or deliverable, but in the
event any adjustment of the number of shares of the Stock covered by the Option
shall cause such number to include a fraction of a share, such fraction shall be
adjusted to the nearest smaller whole number of shares. In the event of changes
in the outstanding Stock by reason of any stock dividend, split-up, contraction,
reclassification, or change of outstanding shares of the Stock of the nature
contemplated by this Section 14 after the Effective Date, the number of shares
of the Stock available for the purpose of the Plan as stated in Section 5 and
the exercise price per share of each Option shall be correspondingly adjusted.
15. Stock Reserved. The Company shall at all times during the term of
the Options reserve and keep available such number of shares of the Stock as
will be sufficient to satisfy the requirements of this Plan and shall pay all
other fees and expenses necessarily incurred by the Company in connection
therewith.
16. Limitation of Rights in Option Stock. The Optionee shall have no
rights as a stockholder in respect of shares of the Stock as to which his or her
Option shall not have
8
been exercised, certificates issued and delivered and payment as herein provided
made in full, and shall have no rights with respect to such shares not expressly
conferred by this Plan.
17. Purchase for Investment. The Optionee shall make such
representations with respect to investment intent and the method of disposal of
optioned shares of the Stock as the Board of Directors may deem advisable in
order to assure compliance with applicable securities laws.
18. Voluntary Surrender. The Committee may permit the voluntary
surrender of all or any portion of any Nonstatutory Option granted under the
Plan to be conditioned upon the granting to the Optionee of a new Option for the
same or a different number of shares as the Option surrendered, subject to the
aggregate maximum number of shares available under the Plan as set forth in
Section 5, or require such voluntary surrender as a condition precedent to a
grant of a new Option to such Optionee. Such new Option shall be exercisable at
an Option Price, during an Option Period, and in accordance with any other terms
or conditions specified by the Committee at the time the new Option is granted,
all determined in accordance with the provisions of the Plan without regard to
the Option Price, Option Period, or any other terms and conditions of the
Nonstatutory Option surrendered.
19. Termination and Amendment of Plan. The Board of Directors may at
any time terminate the Plan or make such modifications of the Plan as it shall
deem advisable, provided, that the Board of Directors may not, without the
approval of the Company's shareholders in a manner which complies with the
requirements of Sections 422 and 162(m) of the Code and the requirements of any
exchange on which the Stock may be listed, increase the maximum number of shares
available for option under the Plan (other than as provided in Section 14). In
addition, unless the Committee specifically determines otherwise, approval of
the Company's shareholders in a manner which complies with the requirements of
Sections 422 and 162(m) of the Code shall be required for any other amendment to
the Plan which, without such shareholder approval, would cause (a) Options
intended to be Incentive Options to fail to qualify as Incentive Options or (b)
Options intended to qualify as "performance-based compensation" under Section
162(m) of the Code to fail to so qualify. No termination or amendment of the
Plan may, without the consent of the Optionee to whom any Option shall
theretofore have been granted, directly and adversely affect the rights of that
Optionee under that Option.
20. General
(a) Government and Other Regulations. Notwithstanding any terms or
conditions of any Option to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering to
sell or selling any shares of Stock pursuant to an Option unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an opinion
of counsel, satisfactory to the Company, that such shares may be offered or sold
without such registration pursuant to an available exemption therefrom and the
terms and conditions of such exemption have been fully complied with. The
Company shall be under no obligation to register for sale under the Securities
Act any of the shares of Stock to be offered or sold under the Plan. If the
shares of Stock offered for sale or sold under the Plan are offered or sold
9
pursuant to an exemption from registration under the Securities Act, the Company
may restrict the transfer of such shares and may legend the Stock certificates
representing such shares in such manner as it deems advisable to ensure the
availability of any such exemption.
(b) Claim to Options and Employment Rights. No employee, Nonemployee
Director, or other person shall have any claim or right to be granted an Option
under the Plan or, having been selected for the grant of an Option, to be
selected for a grant of any other Option. Neither the Plan nor any action taken
hereunder shall be construed as giving any Optionee any right to be retained in
the employ or service of the Company, a Subsidiary or an Affiliate.
(c) No Liability of Committee Members. No member of the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold them
harmless.
(d) Governing law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without regard to the
principles of conflicts of law thereof.
(e) Funding. No provision of the Plan shall require the Company, for
the purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Holders shall have
no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, they shall have the same
rights as other employees under general law.
(f) Relationship to Other Benefits. No payment under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary except as otherwise specifically provided in such other plan.
(g) Expenses. The expenses of administering the Plan shall be borne
by the Company and its Subsidiaries and Affiliates.
10
(h) Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.
(i) Titles and Headings. The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.
21. Effective Date. The Plan is effective as of the effective date of
the Plan of Reorganization. The effectiveness of the Plan and the validity of
any and all Options granted pursuant to the Plan is contingent upon approval of
the Plan by the stockholders of the Company in a manner which complies with
Sections 422(b)(1) and 162(m) of the Code, if applicable. Unless and until the
stockholders approve the Plan in compliance therewith, no Option granted under
the Plan shall be effective.
11
SCHEDULE 3.01(d) -- Administrative Reclamation Claims
VENDOR AMOUNT TO BE ALLOWED
- ------ --------------------
The Scotts Company 16,990.76
Taching, Inc. 32,467.79
Pratt & Austin Co. 18,000.00
Tenax Corporation 5,227.86
NL Lawn & Garden Co. 4,633.80
K. Van Bourgendien 102,102.78(*)
Partrician Product, Inc. 3,152.16
Reliance Trading Corp. 6,332.97
Benick Brands 45,458.10
Real Wood Products Co. 9,349.20
Tyco 8,728.20
TOTAL $252,443.62
(*)Previously allowed and satisfied pursuant to Court order
REVISED SCHEDULE 3.03 - MORTGAGEE CLAIMS
NAME OF MORTGAGEE STORE LOCATIONS OUTSTANDING BALANCE AS OF
5/19/02
NRFLC (Key Commercial/ - Store #601 - Huntington, NY $1,685,744.81
Prudential Securities)
MIDLAND #1 (LaSalle - Store #34 - Okemos, MI $2,497,056.08
Bank/Lennar Partners) - Store #100 - Joliet, IL
PEOPLE'S BANK - Store #631 - Branford, CT $3,541,676.20
- Store #632 - Vernon, CT
- Store #633 - Southington, CT
- Store #636 - Farmington, CT
- Store #643 - Hartford, CT
MIDLAND #2 (LaSalle) - Store #99 - Brookhaven, PA $7,862,895.38
- Store #101 - Deptford, NJ
- Store #106 - Libertyville, IL
- Store #135 - Bridgeton, MO
- Store #140 - Lake Zurich, IL
- Store #163 - Crystal Lake, IL
- Store #623 - Staten Island, NY
- Store #628 - Bridgewater, NJ
MIDLAND #2 (J.E. - Store #25 - Grand Rapids, MI $5,998,009.66
Roberts Partners) - Store #65 - Roseville, MN
- Store #244 - Eden Prairie, MN
- Store #277 - Bloomfield, MI
- Store #626 - Bricktown, NJ
FIRST UNION (CRIMI - Store #32 - Columbus, OH $3,393,128.09
MAE/State Street Bank/ - Store #33 - Grand Rapids, MI
Merrill Lynch - Store #80 - Flint, MI
- Store #142 - Cincinnati, OH
- Store #205 - Louisville, KY
SCHEDULE 3.03(k)-1
LENNAR TERM SHEET
Terms Sheet
-----------
Principal Balance Note shall be created with a principal balance of
approximately $2,632,846 (the "Note").
The actual principal balance shall be equal to the
sum of:
Current Outstanding $2,261,609
Principal
Past Due Interest $239,101 - as of 4/09/2002
Through the (this amount will change
Effective Date and will be recalculated
as of the Effective Date
(1))
Appraisal Fees $27,877 - this includes
depositions and expert
witness testimony costs
for the Hearing on the
Trust's Motion for Relief
from Stay
Interest of Advances $11,259 - as of 4/09/2002
(this amount will change
and will be recalculated
as of the Confirmation
Date)
Legal Fees $54,000
Default Interest $28,000 - interest reduced
to twenty-five percent
(25%) of the total (this
amount will change and
will be recalculated as
of the Confirmation Date)
Interest Rate Note shall bear an interest at the rate of 7.31%
per annum. Interest shall begin to accrue at the
new rate beginning on the Confirmation Date,
subject to the occurrence of the Effective Date.
Maturity Date Note shall have a maturity date of ten (10) years
from the Effective Date of modification.
Amortization Note shall have an amortization of twenty (20)
years from the Effective Date of modification.
Borrower shall make monthly payments of principal
and interest in accordance with the twenty (20)
year amortization.
- --------------------------------------------------------------------------------
(1) Capitalized terms not herein defined shall have the definition given in
Frank's Nursery & Crafts, Inc., et al. Disclosure Statement for Debtor's First
Amended Joint Plan of Reorganization for March 13, 2002.
Taxes Borrowers shall be responsible for bringing all
property taxes associated with the property current on
or before the Effective Date. The taxes to be paid
shall include but not be limited to $16,489 plus
penalties and interest due on Store No. 34 in Okemos,
Michigan and $13,541.59 plus penalties and interest
due on Store No. 100 in Jolliet, Illinois.
Subordinate Liens All subordinate liens shall be discharged.
Plan Modification All parties shall work in good faith to obtain an
amendment to the Borrower's Plan reflecting the terms
set forth herein.
Escrow for Taxes Escrows shall be fully funded pursuant to the
and Insurance existing loan documents within 45 days
of the Confirmation Date. All provisions in the
existing loan documents concerning escrows for taxes
and insurance shall remain unaffected by confirmation
and shall remain in existence post-confirmation.
Other Terms All other terms in the loan documents not inconsistent
with this terms sheet or the Debtors' plan as modified
shall remain in effect post-confirmation.
LASALLE BANK NATIONAL, A NATIONALLY CHARTERED BANK FORMERLY KNOWN AS LASALLE
NATIONAL BANK, AS TRUSTEE FOR THE BENEFIT OF CERTIFICATE HOLDERS OF PRUDENTIAL
SECURITIES SECURED FINANCIAL CORP., COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES SERIES 1995-MCF-2, ACTING BY AND THROUGH ITS SPECIAL SERVICER
LENNAR PARTNERS, INC.
By: /s/ Penina Tannenbaum
-----------------------
Name: Penina Tannenbaum
---------------------
Title: Asset Manager
--------------------
Frank's Nursery & Crafts, Inc.
By:
-----------------------
Name:
---------------------
Title:
--------------------
SCHEDULE 3.03(k)-2
PEOPLE'S BANK TERM SHEET
[PEOPLE'S BANK LETTERHEAD]
April 17, 2002
Mr. Larry Lakin
Vice Chairman and Chief Financial Officer
Frank's Nursery & Crafts, Inc.
1175 West Long Lake Road
Troy, Michigan 48098
RE: FRANK'S NURSERY & CRAFTS, INC. AND FNC HOLDINGS, INC.
CASE NOS. 01-52415 AND 01-52416 (THE "DEBTORS")/PLAN
Dear Mr. Lakin:
I am writing to memorialize the terms and conditions agreed to during our
conversation yesterday, April 16, 2002, in connection with our voting and
settlement of your proposed Plan of Reorganization and concerning the post
confirmation terms and conditions of Frank's outstanding indebtedness to
People's Bank. Those terms and conditions are as follows:
Note "A"
- Principal Amount - outstanding principal balance under the existing loan
documents as of February 19, 2001 (the "Petition Date"), less payments
received by the Bank since the Petition Date.
- Term - 10 years from the Plan's effective date.
- Amortization - 20 years
- Interest Rate - 7% per annum for the first five years, then adjusted to
the federal home loan bank rate, for loans of similar term and
amortization, prevailing at the inception of the remaining term plus
2.00%, in each case payable monthly in arrears.
- Rate Lock Fee - Frank's agrees to pay a Rate Lock Fee of approximately
$11,800 to guaranty the 7% rate discussed above until the effective date
of the Plan or until the terms and conditions discussed herein are
formally documented. Both parties understand that the Rate Lock Fee is
subject to adjustment depending on the actual amount of the post
confirmation debt and actual closing date. Time is of the essence with
respect to these adjustments.
- Prepayment - prepayment terms, conditions and penalties under the
existing loan documents. There shall be no prepayment penalty if the
Note is paid in full on the rate change date or on the maturity date.
Also, there will be no prepayment penalty for principal reductions
resulting from the sale of the Vernon, CT and East Hartford, CT
operating facilities.
- Default Rate - the default rate and terms under the existing loan
documents.
Larry Lakin
April 17, 2002
Page 2
Note "B"
- Principal Amount - the sum of a) non-default contract interest accrued
on the Bank's principal balance since the Petition Date; plus b) 25% of
incremental default rate interest accrued since the Petition Date; plus
c) 50% of the Bank's legal expenses incurred in this matter, to a
maximum of $17,500.
- Term - 10 years from the Plan's effective date.
- Amortization - 10 years
- Interest Rate - 4% per annum, payable monthly in arrears.
The following additional terms and conditions are also a part of our agreement:
- Note "A" and Note "B" shall be secured by one first mortgage on the
collateral securing the existing debt and shall be "cross defaulted".
- Frank's shall reimburse the Bank for approximately $75,000 of
pre-petition real property taxes previously paid by the Bank in
connection with the subject properties, upon delivery of documentary
verification of such payments.
- Implicit in this agreement is a concession from Frank's that People's
Bank is fully secured.
Please read the terms and conditions detailed in this letter carefully. This
resolution contemplates the proposed Plan of Reorganization will be confirmed
and effective within a reasonable time thereafter. If any of the terms and
conditions contained herein are not correct, please contact me immediately at
(203) 338-4190. If you are in agreement with these terms and conditions, kindly
have this letter executed below and returned to the undersigned no later than
3:00pm (EDST) on Wednesday, April 17, 2002.
Sincerely,
/s/ David A. Bodor
David A. Bodor
Senior Vice President
AGREED TO AND ACCEPTED THIS
17TH DAY OF APRIL 2002.
FRANK'S NURSERY & CRAFT, INC.
/s/ LARRY T. LAKIN
By: LARRY T. LAKIN
Its: Chief Financial Officer
SCHEDULE 3.03(k)-3
J.E. ROBERT TERM SHEET
MRAC 1996-C2 TRUST - J.E. ROBERT PLAN TREATMENT TERM SHEET
DRAFT - SUBJECT TO FRE 408
Principal Amount of New Sum of: (a) principal amount owed as of the Petition
Note: Date; (b) accrued non-default contract rate interest from
the Petition Date until the Confirmation Date; (c) the
lesser of 50% of Mortgagee's reasonable attorneys' fees
and $50,000; minus (c) amounts received by Mortgagee
since the Petition Date, other than amounts received
and applied by the Mortgagee in connection with the
sale of store numbers 168 and 245, as set forth on
Schedule A annexed hereto.
Interest Rate: 7.31% per annum beginning on the Confirmation Date,
subject to occurrence of the Effective Date.
Term: 10 years from the Effective Date
Amortization 20 years from the Effective Date
Application of Asset Sale As reflected in the calculation of principal set forth
Proceeds: above, the Debtors waive any right to challenge the
Mortgagee's application of postpetition asset sale
proceeds set forth on Schedule A.
Waiver of Default Interest, Upon the Effective Date, Mortgagee waives any right
Costs, Penalties, and to: (a) 50% of default rate interest accrued prior to the
Premiums: Confirmation Date; and (b) except as set forth below,
any and all other accrued late charges, fees, penalties,
and premiums.
Upon payment in full of all amounts owed under the
amended loan documents, and provided that there shall
have been no uncured Default (as defined below),
Mortgagee shall waive any right to: (a) the remaining
50% of the default rate interest not waived on the
Effective Date; and (b) any attorneys' fees and other
out-of-pocket costs reasonably incurred by the
Mortgagee prior to the Effective Date not recapitalized
into the principal amount of the New Note or set forth
on Schedule A.
Default: For the purposes of the immediately preceding
settlement term only, "Default" shall refer to any of the
following events: (a) the date of a sale, pursuant to a
docketed foreclosure proceeding commenced by
Mortgagee or their successors of any property secured
by the New Note (and Mortgagee may include this debt
in its bid price and/or calculation of debt at a sale); (b)
the commencement of a voluntary case by the Debtors
under any chapter of the Bankruptcy Code, or entry of
an order for relief against the Debtors under any chapter
of the Bankruptcy Code; or (c) failure to make any
payment owed pursuant to the amended loan
documents.
The Debtors shall have one year from the date the
Debtors receive written notice of Default from
Mortgagee to cure any Default under (c) above;
however, this one-year cure period shall not prohibit
Mortgagee from exercising all rights and remedies
during the one-year cure period, as provided in the loan
documents or at law in the event of a default, monetary
or otherwise.
Escrows for Taxes and Escrows shall be fully funded pursuant to the existing
Insurance: loan documents within 45 days of the Effective Date.
All provisions in the existing loan documents
concerning escrows for taxes and insurance shall
remain unaffected by the occurrence of the
Confirmation Date and the Effective Date.
Interest Accrued Between All interest accrued on and after the Confirmation Date
Confirmation Date and but prior to the Effective Date shall be paid within ten
Effective Date (10) days of the Effective Date. If the Effective Date
shall not have occurred by August 15, 2002, then the
Debtors shall commence making monthly interest
payments until the Effective Date occurs.
Other Terms All other terms in the loan documents not inconsistent
with this settlement or the Plan (including the Debtors'
post-Effective Date capital or equity structure) shall
remain in effect.
2
ACCEPTED AND AGREED AS OF THIS 6TH DAY OF MAY, 2002
LaSalle Bank National Association, f.k.a. FRANK'S NURSERY & CRAFTS, INC.
LaSalle National Bank, as Trustee under the
Pooling and Servicing Agreement dated as of
December 1, 1996 for Commercial Mortgage
Pass-Through Certificates, Series 1996-C2
By: J.E. Robert Company, Inc., its special
servicer
By: /s/ Debra H. Morgan By: /s/ Larry T. Lakin
-------------------- ----------------------
Title: Servicing Officer Title: Vice Chairman & CFO
FNC Store 168 Proceeds Applicat
FNC Store 168
Sources:
9/17/01 Payoff $ 915,048.28
Escrow balances $ 34,304.99
--------------
Total $ 949,353.27
Uses:
Principal $ 643,937.79
Interest at non-default rate $ 39,993.91
Costs $ 10,142.60
Costs in process $ 1,137.36
Late Fee (Jan 01 P&I due Feb 01) $ 319.98
Default Interest $ 14,953.67
Prepayment Consideration $ 112,945.92
Rounding $ (0.01)
--------------
$ 823,431.22
Overage (Shortfall) $ 125,922.05
DEFAULT INTEREST CALCULATION
4.00%
Begin End Days Amount
2/19/01 3/1/01 12 $ 858.58
3/1/01 9/1/01 180 $ 12,878.76
9/1/01 9/17/01 17 $ 1,216.33
---- -------------
209 $ 14,953.67
==== =============
Loans are cross-collateralized and cross-defaulted.
FNC Store 245 Proceeds Applicat
FNC Store 245
Sources:
3/7/01 Payoff $ 833,004.00
Escrow balances $ 37,405.93
--------------
Total $ 870,409.93
Uses:
Principal $ 752,517.83
Interest at non-default rate $ 77,471.71
Expenses $ 15,477.10
Late Fee (1/1/01 to 1/31/01 accrual) $ 373.93
Default Interest $ 31,605.75
Prepayment Consideration $ 116,905.76
--------------
Releases $ 75.00
--------------
$ 994,427.08
Overage (Shortfall) $ (124,017.15)
Overage from Store 168 Proceeds $ 125,922.05
Overage (Shortfall) $ 1,904.90
DEFAULT INTEREST CALCULATION
4.00%
Begin End Days Amount
2/19/01 3/1/01 12 $ 1,003.36
3/1/01 3/1/02 360 $ 30,100.71
3/1/02 3/7/02 6 $ 501.68
--- -------------
378 $ 31,605.75
=== =============
Loans are cross-collateralized and cross-defaulted.
SCHEDULE 3.03(k)-4
CRIIMI MAE TERM SHEET
CRIIMI MAE SERVICES LIMITED PARTNERSHIP
TERM SHEET
Principal Amount of Sum of: (a) principal amount owed as of the Petition
New Note: Date; (b) accrued non-default contract-rate interest
from the Petition Date until the Confirmation Date;
(c) the lesser of 50% of Mortgagee's reasonable
attorneys' fees and $40,000; minus (c) amounts
received by Mortgagee since the Petition Date, other
than amounts received and applied by the Mortgagee in
connection with the sale of store number 208, as set
forth on Schedule A annexed hereto.
Interest Rate: 7.31% per annum beginning on the Confirmation Date,
subject to occurrence of the Effective Date.
Term: 10 years from the Effective Date
Amortization 20 years from the Effective Date
Application of Asset As reflected in the calculation of principal
Sale Proceeds: set forth above, the Debtors waive any right
to challenge the Mortgagee's application of
postpetition asset sale proceeds set forth
on Schedule A.
Waiver of Default Upon the Effective Date, Mortgagee waives any right
Interest, Costs, to: (a) 50% of default rate interest accrued prior to
Penalties, and Premiums: the Confirmation Date; (b) except as set forth below,
any and all late charges, fees, penalties, and
premiums.
Upon payment in full of all amounts owed under the
amended loan documents, and provided that there
shall have been no uncured Default (as defined
below), Mortgagee shall waive any right to: (a)
the remaining 50% of the default rate interest not
waived on the Effective Date; and (b) any
attorneys' fees and other out-of-pocket costs
reasonably incurred by the Mortgagee prior to the
Effective Date not recapitalized into the
principal amount of the New Note or set forth on
Schedule A.
Default: For the purposes of the immediately preceding
settlement term only, "Default" shall refer to any
of the following events: (a) the date of a sale,
pursuant to a docketed foreclosure proceeding
commenced by Mortgagee or their successors of any
property secured
by the New Note (and Mortgagee may include this debt
in any bid price and/or calculation of debt at a
sale); (b) the commencement of a voluntary case by the
Debtors under any chapter of the Bankruptcy Code, or
entry of an order for relief against the Debtors under
any chapter of the Bankruptcy Code; or (c) failure to
make any payment owed pursuant to the amended loan
documents.
The Debtors shall have one year from the date the
Debtors receive written notice of Default from
Mortgagee to cure any Default under (c) above;
however, this one-year cure period shall not prohibit
Mortgagee from exercising all rights and remedies
during the one-year cure period, as provided in the
loan documents or at law in the event of a default,
monetary or otherwise.
Escrows for Taxes Escrows shall be fully funded pursuant to the
and Insurance: existing loan documents within 45 days of the
Effective Date. All provisions in the existing loan
documents concerning escrows for taxes and insurance
shall remain unaffected by the occurrence of the
Confirmation Date and the Effective Date.
Interest Accrued All interest accrued on and after the Confirmation
Between Confirmation Date but prior to the Effective Date shall be paid
Date and Effective within ten (10) days of the Effective Date. If the
Date Effective Date shall not have occurred by August 15,
2002, then the Debtors shall commence making monthly
interest payments until the Effective Date occurs.
Other Terms All other terms in the loan documents not inconsistent
with this settlement or the Plan (including the
Debtors' post-Effective Date capital or equity
structure) shall remain in effect.
ACCEPTED AND AGREED AS OF THIS 6TH DAY OF MAY, 2002
CRIIMI MAE SERVICES LIMITED FRANK'S NURSERY & CRAFTS, INC.
PARTNERSHIP, as Sub-special
Servicer for State Street
Bank & Trust Company, as
trustee
By: /s/ D. J. Morakis By: /s/ Larry T. Lakin
---------------------- ----------------------
Title: Asset Manager Title:
2
89-5051035
FRANKS NURSERY & CRAFTS #208
Investor 315
MLMI 1996 C2
Payoff Funds $1,037,053.39
Taxes $ 1,777.76
Insurance $ 11,889.14
Reserves $ 53,945.73
-------------
Available Payoff Funds $1,104,666.02
Current Balance $ 591,438.08 $ 591,438.08 To Principal
Accrued Interest(Net of ASER's) $ 45,685.58 $ 45,685.58 To Interest
P&I Adv Int $ 1,301.81 $ 1,301.81 Suspense
Serv Adv Int $ - $ - Suspense
Servicing Advances $ - $ - To PMI (Esc #4)
Criimi Advances $ 15,042.74 $ 15,042.74 Suspense
Criimi Adv Int $ 49.16 $ 49.16 Suspense
Default Interest $ 12,913.06 $ 12,913.06
Late Fees $ 3,550.95 $ 3,550.95
Yield Maintenance $ 116,531.32 $ 116,531.32
CMSLP Administrative Fee $ 375.00 $ 375.00
Funds Required for Full Payoff $ 786,887.70 $ 786,887.70 $ - Loss on Payoff
Scheduled Balance $ 577,973.12 $ 577,973.12 $ - Loss on Payoff
November Interest $ 4,515.41 $ 4,515.41
P&I Advances Outstanding $ 54,635.13 $ 54,635.13
Servicing Advances $ - $ -
Criimi Servicing Advances $ 15,042.74 $ 15,042.74
P&I Advance Interest $ 1,301.81 $ 1,301.81
Servicing Adv Interest $ - $ -
Criimi Serv Adv Int $ 49.16 $ 49.16
Default Interest $ 12,913.06 $ 12,913.06
Late Fees $ 3,550.95 $ 3,550.95
Yield Maintenance $ 116,531.32 $ 116,531.32
CMSLP Administrative Fee $ 375.00 $ 375.00
$ 786,887.70 $ 786,887.70 $ - Loss on Payoff
Principal Recovery Fee from General Collections: $ 1,444.93
Excess Funds to be applied to Cross-Collateralized Loans $ 317,778.32
Crossed-Loan ID Actual Balance Aggregate % Curtailment New Actual Bal
895051033 95 $ 614,843.24 17.98% $ 57,133.40 $ 557,709.84
895051034 97 $ 667,055.46 19.51% $ 61,985.15 $ 605,070.31
895051036 100 $ 764,278.29 22.35% $ 71,019.43 $ 693,258.86
895051037 104 $ 594,924.73 17.40% $ 55,282.50 $ 539,642.23
895051048 96 $ 778,681.51 22.77% $ 72,357.83 $ 706,323.68
$3,419,783.23 100.00% $ 317,778.32 $3,102,004.91
SCHEDULE 3.03(k)-5
KEY BANK/PRUDENTIAL TERM SHEET
KEY BANK/PRUDENTIAL
TERM SHEET
Principal Amount of Sum of: (a) principal amount owed as of the Petition
New Note: Date; (b) accrued non-default contract-rate interest
from the Petition Date until the Confirmation Date;
and (c) $150,000 for expenses of counsel and costs
Interest Rate: 7% per annum beginning of the Confirmation Date,
subject to occurrence of the Effective Date.
Term: 10 years from the Effective date
Amortization 20 years from the Effective date
Waiver of Default Except for $150,000 in legal fees and costs referenced
Interest, Costs, above, all default interest, costs, penalties, and
Penalties, and premiums of any kind or nature as of the Effective
Premiums: Date shall be waived.
Escrows for Taxes Escrows shall be fully funded pursuant to the existing
and Insurance: loan documents within 45 days of the Effective Date.
All provisions in the existing loan documents
concerning escrows for taxes and insurance shall
remain unaffected by the occurrence of the
Confirmation Date and the Effective date.
Interest Accrued Between All interest accrued on and after the Confirmation
Confirmation Date and Date but prior to the Effective Date shall be paid
Effective Date within ten (10) days of the Effective Date.
Other Terms All other terms in the loan documents shall remain in
effect. If the Effective Date shall not have occurred
by August 15, 2002, then the Debtors shall commence
making monthly interest payments until the Effective
Date occurs. If the Effective Date shall not have
occurred by September 20, 2002, then either party may
terminate this settlement agreement upon 10 days'
written notice; in such event, this settlement
agreement shall be void and the parties reserve their
respective rights.
The loan documents are subject to reasonable
modifications to effect this settlement agreement and
may include, without limitation, an Amended and
Restated Promissory Note.
ACCEPTED AND AGREED AS OF THIS 7TH DAY OF MAY, 2002
THE TRUST BY ITS AUTHORIZED FRANK'S NURSERY & CRAFTS, INC.
AGENT KEYCORP REAL ESTATE
CAPITAL MARKETS
By: /s/ CLARK ROGERS By: /s/ LARRY T. LAKIN
------------------------ ------------------------
Title: Senior Asset Manager Title: Larry T. Lakin
SCHEDULE 3.03(k)-6
MIDLAND TERM SHEET
MIDLAND
TERM SHEET
Note A Principal Amount: Principal and accrued nondefault interest through the Confirmation Date minus
principal and interest paid by Mortgagee to the Trust beneficiaries during the
pendency of Debtors' cases.
Interest Rate: 7.6% per annum interest shall be paid monthly beginning on the Confirmation Date.
Principal and interest payments shall be paid monthly beginning on the Effective Date.
Term: 10 years from the Effective Date
Amortization: 20 years from the Effective Date
Other Terms: The capital expenditure reserves shall be eliminated. All other terms in the loan
documents not inconsistent with this settlement or the Plan (including the Debtors'
post-Effective Date capital or equity structure) shall remain in effect. All
prepayment premium and yield maintenance provisions shall continue to be enforceable.
Note B Principal Amount: Sum of: (a) the amount of principal and interest paid by Mortgagee to Trust
beneficiaries during pendency of Debtors' cases; (b) $53,738.39, consisting of
out-of-pocket expenses incurred by Mortgagee in connection with the Debtors' cases,
other than for counsel; (c) reasonable, documented fees and expenses of counsel
incurred by Mortgagee in connection with the Debtors' cases, up to a maximum of
$215,000; and (d) advance interest through the Confirmation Date (subject to
appropriate adjustment).
Interest Rate: Prime plus 0.25%, per annum, beginning on the Confirmation Date. Principal and
interest payments as described herein shall be paid monthly beginning on the Effective
Date.
Term: 10 years from the Effective Date
Amortization: 20 years from the Effective Date such that the principal payment made each month shall
be equal to the principal payment due according to an amortization schedule at 7%
interest. In addition to the principal payment, interest will be paid on the then
outstanding principal balance on a monthly basis.
Other Terms: Prepayment premiums and capital expenditure reserve requirements eliminated. All other
terms in the loan documents not inconsistent with this settlement or the Plan
(including the Debtors' post-Effective Date capital or equity structure) shall remain
in effect.
Application
of Unapplied
Asset Sales
Proceeds and
Existing
Reserves
Amount Available (a) Net proceeds from sale of store 135; (b) unapplied net proceeds from sale of store
for Application: 167; and (c) all amounts contained in the existing capital expenditure reserves for
all stores.
Order of First, to principal and non-default rate contractual interest attributable to store
Application upon 135;
the earlier of the
Effective Date or Second, to principal balance of Note A, until such principal amount is reduced to $6.2
the date proceeds million;
are received by
the Debtors, not
subject to the
occurrence of
the Effective Date:
Third, to principal balance of Note B.
Waiver of Except for any amounts included in the Note B principal amount, upon the Effective
Default Date, Mortgagee waives any right to default rate interest, and any and all other late
Interest, charges, fees, penalties, and premiums accruing on or prior to the
Costs,
Penalties,
and Premiums:
2
Effective Date.
Escrows for Taxes Escrows shall be fully funded pursuant to the existing loan documents within 45 days
and Insurance: of the Effective Date. Existing tax escrows attributable to sold stores shall be
reallocated pro rata to remaining stores.
Interest Accrued All interest accrued on and after the Confirmation Date shall be paid within ten (10)
Between Confirmation days of the Effective Date. If the Effective Date shall not have occurred by August
Date and Effective 15, 2002, then the Debtor shall commence making monthly interest payments until the
Date: Effective Date occurs. If the Effective Date shall not have occurred by September 20, 2002,
then either party may terminate this agreement upon 10 days' written notice; in such event,
this agreement shall be void and the parties reserve their respective rights.
LaSalle Bank N.A., f/k/a LaSalle National FRANK'S NURSERY & CRAFTS, INC.
Bank, as Trustee for the Registered Certificate
Holders of Midland Realty Acceptance Corp.
Commercial Mortgage Pass-Through
Certificates, Series 1996-C1, acting
through its special servicer Midland Loan
Services, Inc.
By: /s/ Michael E. Wadhams By: /s/ Larry T. Lakin
------------------------- --------------------------
Title: Senior Asset Manager Title:
5/7/02
3
SCHEDULE 3.04 -- CLASS 4 -- OTHER SECURED CLAIMS
NONE
SCHEDULE 4.05(a)
KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD
NEW HYDE PARK, NY 11042
February 11, 2002
Frank's Nursery & Crafts, Inc.
1175 West Long Lake Road
Troy, Michigan 48098
Attn: Mr. Steven Fishman
Mr. Larry Lakin
Commitment Letter For Exit Financing
Gentlemen:
On February 19, 2001 (the "Petition Date"), Frank's Nursery & Crafts,
Inc. (the "Company"), and FNC Holdings, Inc. ("FNC"), filed voluntary petitions
under Chapter 11 of the United States Bankruptcy Code (the "Code") in the
United States Bankruptcy Court for the District of Maryland (the "Bankruptcy
Court"). You have advised Kimco Realty Corporation and its affiliates ("Kimco")
that the Company has filed, or will be filing, a proposed Plan of
Reorganization and a Disclosure Statement (the "Plan"). As used herein, the
term "Closing Date" shall mean the date on which the Plan becomes effective.
You have further advised Kimco that to consummate the Plan, the
Company will require exit financing on the Closing Date consisting of, among
other things, a $20 million term loan (the "Term Loan") and a $10 million
revolving credit facility (the "Revolving Facility") to be used (i) to repay
certain loans under the existing Debtor-in-Possession Credit Agreement (the "DIP
Loan"), (ii) to provide for working capital requirements and general corporate
purposes of the Company and FNC, and (iii) to make certain payments to
creditors under the Plan.
Kimco is pleased to advise you of its commitment, substantially upon
the terms and subject to the conditions set forth in this Commitment Letter and
in the Outline of Terms and Conditions attached as Exhibit A hereto (the "Term
Sheet"), to provide the Company with the $20 million Term Loan and the $10
million Revolving Facility (collectively, the "Facility"), all of the Company's
obligations under which will be guaranteed by FNC (to the extent still in
existence) and shall be secured as described in the Term Sheet.
In the event that Kimco seeks to syndicate all or any portion of the
Term Loan and Revolving Facility, the Company agrees to cooperate with Kimco in
connection with such
syndication and the Company acknowledges that prior to the Closing Date the
structure of the transaction and the terms and conditions thereof may change to
ensure a successful syndication, provided that, the total amount available to
the Company shall remain unchanged and the remaining terms of the Facility
shall be no less favorable to the Company in the aggregate.
Kimco's commitment to provide the Term Loan and Revolving Facility is
subject to the entry by the Bankruptcy Court of an order satisfactory in form
and substance to Kimco approving the Term Loan and Revolving Facility (the
"Approval Order") and the execution and delivery of definitive documents
satisfactory in form and substance to Kimco. Such documents shall be consistent
with the terms hereof and the annexed term sheet.
Kimco's commitment is also subject to (i) Kimco's satisfaction with,
and the approval by the Bankruptcy Court of, the liens to be granted to secure
the Term Loan and the Revolving Facility as more fully set forth in the Term
Sheet and all definitive documentation in connection therewith, and all actions
to be taken, undertakings to be made and obligations to be incurred by the
Company and FNC in connection with the Term Loan and Revolving Facility (all
such approvals to be evidenced by the entry of one or more orders of the
Bankruptcy Court satisfactory in form and substance to Kimco, which orders
shall, among other things, approve the payment by the Company of all of the fees
that are provided for in the Term Sheet); (ii) the other conditions set forth or
referred to in the Term Sheet; (iii) delivery to Kimco of financial information,
budgets and projections regarding the confirmation of the Plan and the
reorganization of the Company and the Other Debtors (which Kimco acknowledges
has already been delivered); (iv) entry by the Bankruptcy Court of an order, in
form satisfactory to Kimco, confirming the Plan; (v) the Approval Order and the
Interim Order (defined below) shall be final; (vi) no stay of the order
confirming the Plan or the Interim Order or the Approval Order shall be in
effect; (vii) the Plan shall have become effective in accordance with its terms;
and (viii) payment of all fees and expenses set forth in the Term Sheet on
or before the dates set forth therein or herein.
You hereby represent and covenant that (a) all information concerning
the Company, FNC and other affiliates of the Company (the "Information") that
has been or will be made available to Kimco by you or any of your authorized
representatives in connection with the transactions contemplated hereby is and
will be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein, taken as a
whole, not materially misleading in light of the circumstance under which such
statements are made and (b) all financial projections concerning the Company,
FNC and other affiliates of the Company (the "Projections") that have been or
will be prepared by you and made available to Kimco has been or will be
prepared in good faith based upon reasonable assumptions. In arranging the Term
Loan and Revolving Facility, Kimco will be using and relying on the Information
and the Projections without independent verification thereof.
Kimco hereby represents that it has the funds available to extend the
Facility referenced herein.
As consideration for the commitment and agreements of Kimco hereunder,
the Company agrees that it will pay to Kimco (i) the fees set forth in the
Term Sheet, (ii) reasonable fees and
-2-
expenses of Kimco's counsel and (iii) out-of-pocket costs incurred by Kimco
in connection with the preparation, execution and delivery of this letter and
the definitive financing agreement and the recordation and perfection of all
liens and mortgages granted to Kimco. Once paid, the fees shall not be
refundable.
By your signature below, you further agree that you will indemnify and
hold harmless Kimco and its respective officers, directors, employees,
affiliates, agents and controlling persons from and against any and all losses,
claims, damages and liabilities to which any such person may become subject
arising out of or in connection with any claim, litigation, investigation or
proceeding, regardless of whether any of such indemnified parties is a party
thereto, relating to this Commitment Letter, the Term Sheet or any related
transaction or relating to the acts or omissions of the Company or FNC or their
agents or employees in connection with these Chapter 11 cases or the Plan or
the intended use of any of the loans described herein, and to reimburse each of
such indemnified persons, from time to time upon their reasonable demand, for
any legal or other expenses incurred in connection with investigating or
defending any of the foregoing; provided that the foregoing indemnity will not,
as to any indemnifed person, apply to losses, claims, damages, liabilities or
related expenses to the extent that they are determined by the final judgment
of a court of competent jurisdiction to have resulted from the willful
misconduct or gross negligence of such indemnifed person nor the Company or FNC
or their respective officers, directors, employees, affiliates, agents or
controlling persons shall be liable for any special, indirect, consequential or
punitive damages in connection with this Commitment Letter or the transactions
contemplated hereby.
This Commitment Letter shall not be assignable by you or Kimco without
the other's prior written consent, and may not be amended or any provision
hereof waived or modified expect by an instrument in writing signed by you and
Kimco.
This Commitment Letter will be governed by, and construed in accordance
with, the laws of the State of New York.
On or before the date on the hearing on the adequacy of the disclosure
statement, you shall file with the Court and serve on creditors a motion
(acceptable in form and substance to Kimco), seeking (i) authority to pay the
"Termination Fee" described in the Term Sheet, (ii) authority to pay the
portion of the fees and expenses due upon execution of this Commitment Letter
and upon the Closing Date, and (iii) approval of the indemnification set forth
above (such order approving the fees in (i), (ii) and (iii) herein being
referred to as the "Interim Order").
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof by signing in the appropriate space below
and returning to us the enclosed duplicate originals (or facsimile
counterparts) of this Commitment Letter by 5 p.m. (New York City time) on
February 14, 2002. Kimco's commitment hereunder shall expire at such time
without further obligation on the part of any party hereto unless prior to such
time Kimco shall have received originals of this Commitment Letter executed by
the Company. In addition, Kimco's commitment hereunder shall expire on May 30,
2002, unless, prior to that time, the Bankruptcy Court shall have entered the
Interim Order. In the further event that the Interim Order is entered, Kimco's
Commitment hereunder shall expire 120 days after the entry of the Interim Order
unless
-3
the Closing Date shall have occurred and all fees paid, or an extension has
been granted in a writing signed by Kimco.
The compensation and indemnification provisions contained herein shall
remain in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or Kimco's commitment hereunder.
This Commitment Letter may be executed in any number of counterparts,
each of which will be an original and all of which, when taken together, will
constitute one agreement.
Very truly yours,
KIMCO REALTY CORPORATION
By /s/ Michael V. Pappagallo
--------------------------
Name: Michael V. Pappagallo
Title: Vice President /CFO
Accepted and agreed to as of
the date first above written:
FRANK'S NURSERY & CRAFTS, INC.
By:
---------------------------
Name:
Title:
-4-
the Closing Date shall have occurred and all fees paid, or an extension has
been granted in a writing signed by Kimco.
The compensation and indemnification provisions contained herein shall
remain in full force and effect regardless of whether definitive financing
documentation shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or Kimco's commitment hereunder.
This Commitment Letter may be executed in any number of counterparts,
each of which will be an original and all of which, when taken together, will
constitute one agreement.
Very truly yours,
KIMCO REALTY CORPORATION
By
--------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written:
FRANK'S NURSERY & CRAFTS, INC.
By: /s/ Larry T. Lakin
---------------------------
Name: Larry T. Lakin
Title: Chief Financial Officer
-4-
Revised Term
Sheet Proposal: Kimco/Frank's Real Estate Financing
Loan Amount: $30 Million of which $20 million will be a term loan
and $10 million will be a revolving line of credit
Term: Three Years from Plan's Effective Date (see
extension right below)
Interest Rate: 10.25%; Interest is Payable Quarterly in Arrears
Amoritization: None
Loan Fee: $300,000 paid $75,000 at closing and $75,000 on each
of the 90th, 180th and 270th day after closing. If
the transaction does not close for any reason,
Debtor shall reimburse Kimco for reasonable legal
fees and out-of-pocket expenses relating to this
transaction.
Expense Deposit: $100,000 payable upon execution of the Commitment
Letter, which sum shall be held by Kimco and applied
at closing against legal fees and out-of-pocket
expenses incurred by Kimco in connection with this
financing, with any balance remaining to be applied
against the first installment of the Loan Fee.
Extension: Provided no event of default exists, up to 2-year
extension of up to the full principal amount upon
payment of a fee of 1%; rate during extension period
to be 10.75%. The period of the extension, the type
of facility and the principal amount of the loan to
be extended each shall be at the option of
Frank's, with the fee to be 1% of amount extended
pro-rated to the extent the term is less than 2
years.
Collateral: All owned and leased real estate other than
properties currently held for sale and properties
currently encumbered by mortgages other than the
mortgage in favor of the DIP lender. The owned
stores shall be those listed on Schedule A attached
hereto. (Lender will consider excluding certain
leased real estate where value of lease may not
justify costs of collateralization.) The Company may
sell collateral in arms-length transactions and at
fair market prices, with the net proceeds to be a
mandatory prepayment of the term loan and,
thereafter, to the revolver, provided that, no more
than 10 properties may be sold without Kimco's prior
consent.
Partial
Convertibility: A portion of the loan amount (up to $6.75 million)
may be converted, at Lender's sole discretion, to
common equity of the company at a conversion price
equal to $1.15 per share (the Ascribed Value, as
defined in the Plan of Reorganization). Conversion
right expires on the later of (a) the third
anniversary from financing or (b) payment in full of
the loan. Unless and until any amount is drawn
under the revolving line of credit, the conversion
amount shall be limited to $5.75 million. Upon a
draw under the revolving right of credit, the
conversion amount shall be up to
$6.75 million notwithstanding the subsequent
reduction of the outstandings under the revolver at
zero. If the equity conversion is made by Lender at
a time when the amount to be converted exceeds the
outstanding term loan balance, then Lender shall pay
the difference to the Company (so, by way of
example, if Lender elects to convert $5.5 million of
term debt when the balance of the term loan is only
$5 million, then the $5 million debt will be reduced
to zero and Lender would contribute an additional
$.5 million). The conversion features described
herein may be documented either as part of the term
loan or as a separate, stand-alone warrant
agreement, at Lender's election.
Prepayment: Company may prepay the loan in whole or in part
without penalty.
Due Diligence: Due Diligence shall be limited to a review of the
leases, title, survey and current environmental
reports. For leases, such due diligence period shall
expire twenty (20) days after execution of the
Commitment Letter, and for all other matters the
diligence period shall expire twenty (20) days after
the delivery of such item or document to Kimco.
Conditions: Court approval and execution of definitive documents.
Covenants: There will be no financial covenants.
Revolving Line
of Credit: Frank's may draw down on this line at any time as
long as there are no defaults on either the term
loan or the Congress Financial Revolving Loan.
Termination
Fee: The Company shall have the right to terminate the
commitment, in whole or in part, prior to the
closing, provided that (i) in such event Kimco shall
be for its reasonable legal fees and out-of-pocket
costs incurred by Kimco relating to this transaction,
and (ii) if an alternative real estate based
transaction is entered into by the Company within six
(6) months after the termination, then Kimco shall
also be paid a fee of 1%.
SCHEDULE A
----------
List of Owned Stores
--------------------
<Table>
<Caption>
ZIP
STORE # STORE ADDRESS CITY STATE CODE COUNTY
5 25488 Michigan Ave. Dearborn Heights MI 48125 Wayne
26 7141 E. Broad Columbus OH 43213 Franklin
27 5500 W. Broad St. Columbus OH 43228 Franklin
29 1133 Coliseum Blvd. Ft. Wayne IN 46805 Allen
30 47340 Van Dyke Utica MI 48317 Macomb
45 7940 Penn Ave. S Bloomington MN 55431 Hennepin
81 3001 28th St. SW Grandville MI 48418 Kent
84 43473 Ford Rd. Canton Twp. MI 48188 Wayne
85 325 Mall Dr. Portage MI 49002 Kalamazoo
86 8032 Ken-18 Burlington Pk. Florence KY 41042 Boone
87 3720 95th St. Evergreen Park IL 60805 Cook
88 720 N. Green Bay Rd. Waukegan IL 60087 Lake
90 2999 E. Lincoln Hwy. Merrillville IN 46410 Lake
92/401 15300 Hall Rd. Clinton Twp. MI 48038 Macomb
93 5737 S. Pennsylvania Lansing MI 48911 Eaton
94 9142 Telegraph Toledo OH 43612 Lucas
98 1950 State St. St. Charles IL 60174 Dupage
102 10901 Bustleton Philadelphia PA 19116 Philadelphia
103 3707 Coon Rapids Blvd. Coon Rapids MN 55433 Anoka
104 10550 Reistertown Rd. Owings Mills MD 21117 Baltimore
105 190 W. Lincoln Hwy. Exton PA 19341 Chester
107 1520 Aurora Naperville IL 60563 Dupage
112 255 89th Ave. Blaine MN 55434 Anoka
118 4356 Pierson Rd. Flint MI 48504 Genesee
134 15031 Manchester Rd. Ballwin MO 63011 St. Louis
141 7456 S. State Rd. Bedford Park IL 60638 Cook
151 2295 10 Mile Rd. Warren MI 48091 Macomb
188 448 N. Lexington Pkwy. St. Paul MN 55104 Ramsey
202 3365 Highland Ave. Cincinnati OH 45213 Hamilton
213 4902 Cortez Rd. Bradenton FL 34210 Manatee
219 3075 Mille Rd. Columbus IN 47203 Bartholom
240 7325 Old Troy Pike Huber Heights OH 45424 Montgomery
266 10808 Montgomery Rd. Cincinnati OH 45242 Hamilton
267 1910 E. Ireland Rd. South Bend IN 46614 St. Joseph
286 2145 Hwy. 35 Sea Girt NJ 98750 Monmouth
297 2051 N. Rte. 83 Round Lake Beach IL 60046 Lake
605 210 Monmouth Rd. West Long Branch NJ 07764 Monmouth
624 840 Route 46 Kenvil NJ 07847 Morris
625 2931 Highway 35 Hazlet NJ 07730 Monmouth
638 4250 Route 9 South Howell NJ 07731 Monmouth
SCHEDULE 4.05(b)
[CONGRESS FINANCIAL CORPORATION LETTERHEAD]
[FIRST UNION* LOGO]
February 8, 2002
Frank's Nursery & Crafts, Inc.
1175 West Long Lake Road
Troy, Michigan 48098
Attention: Larry T. Lakin
Re: $50,000,000 Senior Secured Credit Facility
Ladies and Gentlemen:
In accordance with our recent discussions, Congress Financial
Corporation (Central) ("Congress") is pleased to issue its commitment (the
"Commitment") to provide a $50,000,000 senior secured credit facility (the
"Credit Facility") to the Borrower described below, subject to the terms and
conditions set forth herein. Although Congress is committed to provide the
entire Credit Facility, Congress reserves the right, as discussed in more
detail below, to form a syndicate of financial institutions to provide the
Credit Facility.
Subject to the satisfactory completion of each of the conditions set
forth herein, the Credit Facility shall be structured as follows:
1. Loan Structure:
a. Borrower: Frank's Nursery & Crafts, Inc., a reorganized debtor
under a plan of reorganization (the "Plan of Reorganization")
confirmed in Case No. 01 52415 (the "Bankruptcy Case") commenced under
Chapter 11 of the Bankruptcy Code of the United States Bankruptcy
Court for the District of Maryland (Baltimore Division) (the
"Bankruptcy Court").
b. Agent: Congress.
c. Lenders: Congress and such other financial institutions as
Congress shall select.
d. Maximum Credit Line: $50,000,000.
e. Revolving Loan: Revolving advances up to the lesser of (i) the
Maximum Credit Line, less the aggregate letters of credit outstanding
under the Letter of Credit Subline described in Section 1.f below;
and (ii) the sum of (a) the lesser of (x) eight-five percent (85%) of
the amount of net eligible accounts due
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 2
from major credit card processors or (y) an amount equal to
$6,000,000, plus (b) the lesser of (x) seventy percent (70%) of
the Cost (as defined on Annex A) of eligible inventory of Borrower
(subject to adjustment based on the results of the Hilco
appraisal currently in process) or (y) eighty-five percent of the
Net Recovery Rate (Cost) (as defined on Annex A) of the Cost of
eligible inventory of Borrower, less (c) the Letter of Credit
Reserve (as defined on Annex A), and less (d) reserves
established by Agent in good faith (including, without
limitation, a reserve for shrink, a reserve for sales and other
taxes and other charges which have priority over Agent's lien on
the Specified Collateral (as defined on Annex A), a reserve for
customer credits (e.g., gift certificates, merchandise credits
and similar liabilities of Borrower to its customers), a rent
reserve for inventory at the stores or at third party warehouses
if landlord waivers are not obtained, a reserve for, amounts
collected by Borrower and payable to vendors under consignment or
purchase money financing arrangements and a reserve for claims
under the Plan of Reorganization which have priority over Agent's
lien on the Specified Collateral. The sum of (a) and (b) less (c)
and (d) of the foregoing clause (ii) is hereafter referred to as
the "Borrowing Base".
Eligible accounts will be defined more specifically in the Loan
Documents, but will not include: (i) accounts unpaid more than 5
days past the original transaction date; (ii) accounts which are
disputed, are with recourse or with respect to which a claim,
counterclaim, offset or chargeback has been asserted (to the
extent of such claim, counterclaim, offset or chargeback); or
(iii) any account customarily deemed ineligible by Agent in good
faith.
Eligible inventory will be defined more specifically in the Loan
Documents, but will not include (i) inventory deemed to be
obsolete, slow moving or used; (ii) inventory not located in the
United States; (iii) inventory in-transit, (iv) consigned
inventory, (v) inventory held for return to vendors, (vi) vendor
allowances, (vii) out-of-season outdoor live plants, trees and
shrubs, (viii) out-of-season fresh Christmas trees, wreaths and
plants, (ix) packaging, (x) damaged or defective inventory; or
(x) any other inventory customarily deemed ineligible by Agent
in good faith.
f. Letter of Credit Subline: $25,000,000 in letters of credit
(or guaranties thereof) on behalf of Borrower not to exceed the
amount by which the Borrowing Base exceeds the outstanding
Revolving Loans.
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 3
Borrower will be charged a letter of credit fee equal to the L/C rate
in Section 4 set forth below times the average undrawn amount of all
outstanding letters of credit, payable monthly in arrears, plus
issuing bank charges.
2. Purpose: Loan proceeds shall be used to (i) repay Borrower's
secured working capital and other indebtedness on the effective date (the
"Effective Date") of the Plan of Reorganization; (ii) otherwise enable
Borrower to consummate the Plan of Reorganization on the Effective Date;
and (iii) for general corporate purposes.
3. Term of Facility/Early Termination Fee: Three years. In the event
of early termination (whether voluntarily by Borrower, as a result of an
event of default, or otherwise), Borrower shall pay an early termination
fee of two percent (2%) of the Maximum Credit Line if terminated during
the first year of the Credit Facility, one percent (1%) of the Maximum
Credit Line if terminated during the second year of the Credit Facility,
and one-half of one percent (0.5%) of the Maximum Credit Line if
terminated after the second anniversary and prior to the third anniversary
of the date of closing or at any other time prior to the end of the then
current term. Commencing on its initial term, the Credit Facility will be
automatically renewable for one year periods unless either party gives
sixty (60) days prior written notice to the other party of its intent to
terminate.
4. Interest Rate: The rate of interest charged on the Revolving Loans
shall be a per annum rate equal to the Applicable Margin set forth below
above the prime rate publicly announced by First Union National Bank or a
per annum rate equal to the Applicable Margin set forth below above the
Adjusted Eurodollar Rate (as defined in Annex A). Interest and letter of
credit fees shall be calculated on the basis of a 360 day year and actual
days elapsed, and shall be payable monthly in arrears. All collections and
remittances shall be directed to a blocked account and shall be subject to
a one business day charge after receipt of good funds by Agent. Upon the
occurrence and during the continuation of an event of default, no
Eurodollar Rate loans will be permitted and all obligations will bear
interest at a per annum rate equal to two (2.00) percentage points above
the otherwise applicable interest rate and the letter of credit fee will be
increased by two (2.00) percentage points. The Applicable Margin shall be
as follows:
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 4
<Table>
<Caption>
Prime Eurodollar
Applicable Applicable L/C
Margin Margin Rate
When Excess Availability Is:
$25,000,000 or greater 0.25% 2.75% 2.00%
$14,000,000 to $24,999,999 0.50% 3.00% 2.25%
Less than $14,000,000 0.50% 3.25% 2.50%
</Table>
Until the end of the first six full calendar months following the
date the initial loans are made hereunder (the "Closing Date"),
the Applicable Margin for prime loans shall not be less than
one-half of one percent (0.50%), the Applicable Margin for
eurodollar rate loans shall not be less than three percent (3.00%)
and the L/C Rate shall not be less than two and one-quarter
percent (2.25%). Thereafter, the Applicable Margins and LC rate
shall adjust based on the average daily Excess Availablility (as
defined on Annex A) for the immediately preceding month.
Eurodollar rate loans shall be subject to certain conditions to be
set forth in the Loan Documents, including the following: (i)) all
Eurodollar loans shall be available in interest periods of thirty
(30) days, sixty (60) days, or ninety (90) days, as selected by
Borrower; and (ii) Borrower shall be responsible for any
Eurodollar contract breakage fees (but shall not include lost
profits) or other associated costs, as determined by Agent.
5. Fees: Borrower shall pay to Congress a non refundable
Commitment Fee equal to $250,000 upon approval of the Bankruptcy
Court; provided, that if such approval is not obtained on or
before March 11, 2002, this Commitment shall terminate. Borrower
shall pay to Congress a closing fee in the amount of $250,000 on
the Closing Date. In addition, an unused line fee of one-quarter
of one percent (0.25%) per annum shall be charged and payable
monthly in arrears by Borrower, based on the difference between
the Maximum Credit Line and the average monthly borrowings and
letters of credit outstanding during the preceding month, and (b)
a servicing fee of $10,000 for each calendar quarter or part
thereof shall be charged and payable quarterly in advance by
Borrower.
6. Collateral Support: The Credit Facility shall be secured by
(a) a first priority, perfected security interest in all of the
Specified Collateral and (b) a second priority, perfected security
interest in all other personal property of Borrower (other
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 5
than specified equipment acceptable to Congress that is subject to a
lease or other financing arrangement that prohibits such security
interest in favor of Congress).
7. Periodic Loan Maintenance Charges: Borrower shall reimburse
Agent for audit, appraisal, and valuation fees and charges as follows
(i) a fee of $750 per day, per auditor, plus out-of-pocket expenses for
each collateral audit of Borrower performed by personnel employed by
Agent, (ii) out-of-pocket expenses, for each appraisal of the
Collateral performed by personnel employed by Agent, and (iii) the
actual charges paid or incurred by Agent if it elects to employ the
services of one or more third persons to perform collateral audits of
Borrower, to appraise the Collateral, or any portion thereof.
8. Conditions Precedent: Congress' obligation to extend credit to
Borrower shall be subject to the satisfaction of each of the following
conditions precedent in a manner satisfactory to Congress:
a. Borrower shall have obtained confirmation of the Plan of
Reorganization, which Plan of Reorganization shall provide for
the Credit Facility, shall contain terms and provisions
acceptable to Congress and shall otherwise be in form and
substance acceptable to Congress.
b. The Plan of Reorganization shall have been confirmed by a
final order entered by the Bankruptcy Court (the "Confirmation
Order"), in form and substance acceptable to Congress, and
which has not been stayed by the Bankruptcy Court or by any
other court having jurisdiction to issue any such stay. The
Confirmation Order shall have been entered upon proper notice
to all parties to be found by the Plan of Reorganization, all
as may be required by the Bankruptcy Code, the Federal Rules
of Bankruptcy Procedure and any applicable local bankruptcy
rules. In addition to the foregoing, the time to appeal the
Confirmation Order must have expired, no appeal or petition
for review, rehearing or certiorari with respect to the
provisions of the Confirmation Order may be pending that (i)
would be material, (ii) related to the Credit Facility or
(iii) related to the effectiveness of the Plan of
Reorganization, and the Confirmation Order must otherwise be
in full force and effect.
c. The Plan of Reorganization shall have been consummated and
the Effective Date thereunder shall have occurred.
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 6
d. The loans shall be made pursuant to, and subject to, the
terms of loan agreements, notes, and other financing documents
(the "Financing Documents") executed and delivered by Borrower
on or prior to the closing date, containing such
representations, warranties, covenants (affirmative and
negative), conditions to funding, events of default,
indemnification provisions, agency provisions, co-lender
provisions and yield protection provisions as are customary,
in Congress' experience, for a transaction of this type.
Without limiting the foregoing, the loan agreement shall
contain covenants that Borrower shall be required to maintain
(i) minimum Excess Availability (as defined on Annex A) of
$3,000,000 at all times, (ii) minimum EBITDA in amounts to be
determined prior to closing, (iii) minimum accounts payable to
inventory levels in amounts to be determined prior to closing.
The covenants in (ii), (iii) and (iv) shall be tested monthly
and only if Excess Availability is less than $9,000,000 or
there is a default under our Loan Documents.
e. Borrower shall have executed and/or delivered, or caused
to be delivered, to Congress at or prior to the closing date,
such security agreements, financing statements, fixture
filings, inter-creditor agreements, deeds of trust, mortgages,
blocked and depository account agreements, credit card
processor agreements, landlord waivers (alternatively, Agent
shall establish an appropriate lease reserve), bailee
agreements, and other agreements affecting the Collateral,
insurance certificates and endorsements, and other
documentation relative to the liens and security interest in
the Collateral as Congress may reasonably request (the
"Security Documents"). Each of the Financing Documents and the
Security Documents (collectively, the "Loan Documents") shall
be governed by the law of the State of Illinois and shall need
to be in form and substance reasonably satisfactory to
Congress and its counsel.
f. Congress shall have completed all lien searches with
respect to the Collateral. The financing statements, fixture
filings, deeds of trust, mortgages, and other Documents
related to perfection of Congress' interests in the Collateral
shall have been filed or recorded in all appropriate
jurisdictions and, with respect to financing statements,
Congress shall have received searches reflecting title
insurance (with endorsements specified by Congress) and ALTA
surveys with respect to the real property of Borrower that is
part of the Specified Collateral.
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 7
g. Congress shall have received such opinions of Borrower's
counsel and such advice of Congress' counsel as Congress shall
require, which opinions and/or advice shall be in form and
substance satisfactory to Congress and its counsel.
h. Borrower shall have delivered such certified articles of
incorporation, good standing certificates, secretary's
certficates and other corporate documents as Congress
requests.
i. Borrower shall, at closing, have Excess Availability under
the Credit Facility in an amount acceptable to Congress.
j. Borrower shall have consummated its real estate financing
arrangement with KIMCO, which arrangement shall be on terms
and conditions set forth in the term sheet attached hereto as
Annex C.
k. Receipt and satisfactory review of the Hilco inventory
appraisal and Loewe-Adler real estate appraisals. Based on the
inventory appraisal results, Congress will establish
sub-limits and an advance rate matrix for various categories
of inventory and seasons.
l. Borrower shall pledge eight unencumbered real estate
properties (listed on Annex B) as additional collateral and if
such property is sold, reserves against the Borrowing Base may
be established in a manner to be determined prior to the
Closing Date.
m. Quarterly inventory appraisal updates, at the expense of
Borrower, by independent appraisers acceptable to Congress.
n. Congress shall have completed its environmental due diligence
of Borrower and the results thereof shall be satisfactory to
Congress.
o. Congress shall have completed its field examination and a
pre-closing collateral update and the results thereof shall be
satisfactory to Congress.
p. Congress shall have completed its legal due diligence.
q. There shall have been no material adverse change in the
business, operations, assets, financial condition or prospects
of Borrower since December 2, 2001.
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 8
9. Loan Origination Costs: Borrower shall pay for all of
Congress' incurred costs and expenses incurred in connection with the
proposed financing transaction including field examination costs and
out-of-pocket expenses incurred by field examiners (at a rate of $750
per examiner per day) and appraisers in verifying Borrower's records
and assets, Congress' reasonable legal expenses for advice in preparing
documents in connection with the proposed loan, and any filing and
search fees. Borrower's reimbursement obligations set forth herein
shall apply whether or not the Credit Facility closes, and Congress'
right to receive reimbursement of all costs and expenses incurred in
connection with Borrower's account and the Credit Facility shall be
entitled to priority as an Administrative Expense claim under Section
503(b)(1) of the Bankruptcy Code, and to immediate payment upon demand
by Congress without any further order of the Bankruptcy Court, whether
or not the Credit Facility closes.
10. Expense Deposit: In connection with the requested financing,
Borrower understands that Congress will continue to make certain
financial, legal and collateral investigations and determinations.
Borrower has previously deposited with Congress the sum of $100,000
against the expenses of Congress pursuant to the terms of Section 8 of
the proposal letter between Congress and Borrower dated January 18,
2002. Congress requests that Borrower pay an additional deposit of
$100,000 (the "Deposit") to Congress to be paid upon approval of the
Creditors' Committee; provided, that if such approval is not obtained
on or before February 22, 2002, this Commitment shall terminate.
The terms and provisions of this letter shall be of no force or effect
unless Borrower delivers to Congress, on or before March 11, 2002, a
copy of an order entered by the Bankruptcy Court in the Bankruptcy
Case, in form and substance acceptable to Congress, authorizing
Borrower's payment to Congress of the Commitment Fee and the Deposit
(the "Designated Fees"), and otherwise authorizing Borrower's
acceptance of this letter, which order shall specifically provide that
Congress' right to receive the Commitment Fee and Deposit, and to
reimbursement of all costs and expenses incurred in connection with
Borrower's account and the Credit Facility shall be entitled to
priority as Administrative Expense claims under Section 503(b)(1) of
the Bankruptcy Code, and to immediate payment upon demand by Congress
without any further order of the Bankruptcy Court, whether or not the
Credit Facility closes.
Such deposits, together with any other deposits at any time received by
Congress from or on behalf of Borrower, will be held by Congress and
will be applied to the expenses of Congress as and when they are
incurred, and Congress will provide supporting documentation for such
expenses. If (i) the transactions contemplated
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 9
hereby do not close on or before May 31, 2002, whether as a result of
Borrower's election to not close the transactions contemplated hereby
with Congress or a failure to fulfill any of the conditions precedent
set forth herein, or (ii) Borrower intentionally misleads Congress or
intentionally fails to disclose material information which, if
disclosed, would have a material adverse impact on the loan approval,
then in each case Congress shall be entitled to retain the full amount
of the Deposit and any other deposits, irrespective of the amount of
the expenses incurred by Congress. The retention by Congress of the
balance of the Deposit and any other deposits results from its
reasonable endeavor to estimate the added administrative costs incurred
and the amount of damage sustained by Congress as a result of
Borrower's decision to decline to accept the financing. If the Credit
Facility is funded, the Deposit and any other deposits will be returned
to Borrower after deducting all reasonable expenses incurred by
Congress. Congress shall not be obligated to segregate such Deposit
from its other funds and Borrower is not entitled to receive interest
on any portion of such Deposit. Borrower hereby agrees to pay to
Congress the full amount of its reasonable expenses incurred in
connection with the transaction contemplated hereby, irrespective of
the amount of the Deposit and whether the subject transaction actually
is consummated. Congress reserves the right to request additional
deposits in its reasonable determination.
11. Complete Agreement; No Oral Modifications: The Commitment
embodies the entire agreement between the parties hereto with respect
to the subject matter hereof and supersedes all prior proposals,
negotiations, or agreements whether written or oral, relating to the
subject matter hereof including any letter of intent. This letter may
not be modified, amended, supplemented, or otherwise changed, except by
a document in writing signed by the parties thereto.
12. GOVERNING LAW; JURY WAIVER. THIS LETTER SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF ILLINOIS AND THE VALIDITY OF THIS LETTER
AND THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE
RIGHTS OF THE PARTIES HERETO RELATING TO CLAIMS OR CAUSES OF ACTION
ARISING IN CONNECTION HEREWITH SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
BORROWER AND CONGRESS HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY
OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING
UNDER OR RESPECT TO THIS LETTER, OR IN ANY WAY RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO WITH
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 10
RESPECT TO THIS LETTER, OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN
EACH CASE WHETHER NOW OR HEREAFTER ARISING, IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BORROWER AND CONGRESS
HEREBY AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING SHALL BY DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT
ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
OTHER PARTY HERETO TO WAIVE ITS RIGHT TO TRIAL BY JURY.
13. Closing Date: If the transactions contemplated by this
letter are not consummated on or before May 31, 2002 then the
Commitment set forth herein shall expire, without further notice or
act of any kind by Congress or any other party.
14. Indemnification: Borrower shall pay, indemnify, defend,
and hold Congress, and each of its officers, directors, employees,
counsel, agents, and attorneys-in-fact (each, an "Indemnified
Person") harmless (to the fullest extent permitted by law) from and
against any and all claims, demands, suits, actions, investigations,
proceedings, and damages, and all reasonable attorneys fees and
disbursements and other reasonable costs and expenses incurred in
connection therewith (as and when they are incurred and irrespective
of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them in connection with or as a result of
or related to the execution, delivery, enforcement, or performance,
of this letter or the transactions contemplated herein, and with
respect to any investigation, litigation, or proceedings related to
this letter (irrespective of whether any Indemnified Person is a
party thereto), or any act, omission, event or circumstance in any
manner related thereto, unless and to the extent such claims,
demands, suits, actions, investigations, proceedings, damages, fees,
disbursements, costs or expenses are incurred as a result of the
gross negligence, intentional fraud or willful misconduct of an
Indemnified Person. The provision shall survive the termination of
this letter.
15. Syndication: Borrower agrees to assist Congress, upon
request by Congress, in forming a syndicate of lenders and to provide
Congress and the proposed lending group, promptly upon request, with
all information deemed necessary by them to complete successfully the
syndication of the Commitment. Borrower acknowledges that the
Commitment in this letter has been based upon the financial
information delivered to Congress through the date hereof and that
Congress may copy, utilize and distribute any and all such
information provided by Borrower or its
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 11
affiliates or consultants in connection with their efforts to
syndicate the credit. Borrower also agrees that it will provide
appropriate senior officers to attend and participate in any
informational meetings or other diligence sessions with potential
syndicate members and participants which Congress may determine to
hold in connection therewith.
16. Accuracy of Information: Borrower represents and warrants
that (a) all information which has been or is hereafter made
available to Congress or any other prospective lender by Borrower,
its affiliates or any of their respective representatives in
connection with the proposed Credit Facility is and will be complete
and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under
which such statements are made, and (b) all financial projections
that have been or are hereafter prepared by Borrower, its affiliates
or any of their respective representatives and made available to
Congress or any other prospective lender have been or will be
prepared in good faith based upon reasonable assumptions which have
been adequately disclosed as part of such projections. Borrower
agrees to supplement the information and projections referred to in
clauses (a) and (b) above from time to time until the Closing Date so
that the representation and warranty in the preceding sentence
remains correct and, in the event any such information and
projections materially and adversely vary from those delivered
through the date hereof, Congress shall have no further obligation to
proceed with the financing contemplated hereby. Borrower understands
that in arranging and syndicating the Credit Facility, Congress may
be using and relying on such information and projections without
independent verification thereof and Borrower agrees that if it
discovers that any of the information at any time provided to
Congress is incomplete, inaccurate or misleading in any material
manner, Borrower will immediately notify Congress of that fact and
provide corrected information.
Frank's Nursery & Crafts, Inc.
February 8, 2002
Page 12
If you wish to proceed on the basis outlined above, please
execute this letter in the space provided below and return it to the
undersigned no later than 5:00 p.m., Chicago time, on or before February 8,
2002.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By /s/ Richard Dickard
-------------------------
Its Senior Vice President
-------------------------
Acknowledged this 8th date of February, 2002
FRANK'S NURSERY & CRAFTS, INC.
By /s/ Larry T. Lakin
--------------------------
Its Chief Financial Officer
--------------------------
ANNEX A
"Adjusted Eurodollar Rate" means, with respect to each
interest period for any eurodollar rate loan, the rate per annum (rounded
upwards, if necessary, to the next one-sixteenth (1/16) of one percent (1%)
determined by dividing (a) the Eurodollar Rate for such Interest Period by (b)
a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For
purposes hereof, "Reserve Percentage" shall mean the reserve percentage,
expressed as a decimal, prescribed by any United States or foreign banking
authority for determining the reserve requirement which is or would be
applicable to deposits of United States dollars in a non-United States or an
international banking office of First Union National Bank used to fund a
eurodollar rate loan or any eurodollar rate loan made with the proceeds of such
deposit, whether or not First Union National Bank actually holds or has made
any such deposits or loans. The Adjusted Eurodollar Rate shall be adjusted on
and as of the effective day of any change in the Reserve Percentage.
"Collateral" means all property and interest in property
of Borrower, whether personality or realty, whether now or hereafter acquired,
including, without limitation, all accounts, inventory, general intangibles,
equipment, documents, instruments, chattel paper, fixtures and real property.
"Cost" means the lower of (a) cost computed on a
first-in-first out basis in accordance with GAAP or (b) market value, as
determined by Agent in good faith, with respect to the inventory of Borrower.
"Eurodollar Rate" means with respect to the interest period
for a eurodollar rate loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/16) of one percent (1%)) at which First Union National
Bank is offered deposits of United States dollars in the London interbank
market (or other eurodollar rate market selected by Borrower and approved by
Agent) on or about 9:00 a.m. (New York time) two (2) Business Days prior to the
commencement of such interest period in amounts substantially equal to the
principal amount of the eurodollar rate loans requested by and available to
Borrower, with a maturity of comparable duration to the interest period selected
by Borrower.
"Excess Availability" means, as to Borrower, the amount, as
determined by Agent, calculated at any date, equal to: (a) the lesser of: (j)
the Borrowing Base of Borrower and (ii) the Maximum Credit minus (b) the sum
of: (i) the amount of all then outstanding and unpaid Obligations of Borrower
plus (ii) the aggregate amount of all then outstanding and unpaid trade payables
and other obligations of Borrower which are outstanding more than sixty (60)
days past due as of such time (other than trade payables or other obligations
being contested or disputed by Borrower in good faith), plus (iii) without
duplication, the amount of checks issued by Borrower to pay trade payables and
other obligations which are more than sixty (60) days past due as of such time
(other than trade payables or other obligations being contested or disputed by
Borrower in good faith), but not yet sent.
"Letter of Credit Reserve" means a reserve equal to (i) 100% of the
aggregate outstanding face amount of any standby letters of credit and
documentary letters of credit for which negotiable documents of title are not
consigned to the issuing bank, plus (ii) the sum of one hundred percent (100%)
minus the advance rate then in effect with respect to inventory (based on the
cost of such inventory) of the aggregate amount of documentary letters of credit
for which negotiable documents of title are consigned to the issuing bank, plus
duty, freight and Cost of transport in connection with the inventory purchased
with such documentary letters of credit.
"Net Recovery Rate (Cost)" means the percentage of the Cost of eligible
inventory of Borrower that an appraiser acceptable to Agent, and engaged by
Agent, projects will be recovered, net of liquidation expenses and fees, in a
"going out of business" sale, pursuant to the most recent appraisal acceptable
to Agent prepared by such appraiser.
"Specified Collateral" means all Collateral other than (i) equipment
that is subject to a lien prior to that of Congress under the Plan of
Reorganization and (ii) any real property and fixtures of Borrower except for
the real property listed on Annex B.
-2-
ANNEX B
Store #181 3530 Mona Kai Drive., Norton Shores, MI
Store #178 2685 Tittabawasee Road, Saginaw, MI
Store #58 3333 Refugee Road, Columbus, OH
Store #199 1238 Upper Valley Pike, Springfield, OH
Store #214 3526 Towne Blvd., Middletown, OH
Store #645 447 Winthrop St., Taunton, MA
Store #117 6401 W. Waters Ave., Tampa, FL
Store #110 4315 E. Bay Drive, Clearwater, FL
SCHEDULE 6.02
EXECUTORY CONTRACTS AND UNEXPIRED
LEASES ASSUMED UNDER THE
PLAN AND RELATED CURE AMOUNTS
ASSUMED
REAL ESTATE/CURE AMOUNTS
LOC. LOCATION CURE AMOUNT RESOLVED CURE
3 23090 Coolidge - Oak Park, MI 10,146.40 13,378.75
6 14601 Eureka Rd. - Southgate, MI 5,383.84
8 27650 Schoolcraft - Livonia, MI 4,583.33
8 27650 Schoolcraft - Livonia, MI 6,878.85
10 30110 Harper - St. Clair Shores, MI 2,457.75
12 27650 Van Dyke - Warren, MI 8,224.82
@ 14 44 BATCHEWANA - CLAWSON, MI 25,928.17
16 31590 Grand River - Farmington, MI 10,000.00
17 3590 Washtenaw - Ann Arbor, MI 9,199.77
19 4202 S. Dort Hwy - Flint, MI 10,279.27
21 5919 Highland Rd - Waterford, MI 14,215.69
(*) 25 2450 28th St., Grand Rapids, MI 0.00
31 5135 Monroe St. - Toledo, OH 11,471.25
34 1941 Grand River, Okemos, MI 48864 8,876.65
35 5474 W. Main - Kalamazoo, MI 2,839.27
36 2520 S. Reynolds - Toledo, OH 37,395.44
37 250 Rand RD - Arlington Heights, IL 146,851.21
38 817 W. Golf - Schaumburg, IL 3,375.00 84,692.24
@ 39 6715 DEMPSTER - MORTON GROVE, IL 154,501.67 225,952.56
42 5620 Winnetka - New Hope, MN 10,103.40
44 5016 County Rd - Minnetonka, MN 61,967.69
46 Kenwood Rd - Cincinnati, OH 4,331.20
47 10870 Hamilton Ave. - Cincinnati, OH 27,133.57
50 497 Lake Cook Rd - Deerfield, IL 132,474.96
51 700 E. Roosevelt Rd - Lombard, IL 16,489.97
52 1785 River Oaks Road - Calumet City, IL 3,101.93
53 4260 W. 211th St. - Matteson, IL 34,950.76
55 W. Harrison - Chevriot, OH 5,758.93
56 25101 Allen Rd - Woodhaven, MI 7,191.60
57 155 N. Maple - Ann Arbor, MI 8,101.28
59 4261 W. Dublin Granville - Dublin, OH 52,335.03
62 6302 E. 82nd St - Castleton, IN 30,126.27
63 8802 US 31 S. - Indianapolis, IN 1,209.58 55,563.71
63 8802 US 31 S. - Indianapolis, IN 18,853.15
(**) 63 8802 US 31 S. - Indianapolis, IN 0.00
66 1970 S. Robert - West St. Paul, MN 3,061.41
67 7520 W. 159th St - Orland Park, IL 3,080.27
68 2501 W. 75th St. - Woodridge, IL 18,208.22
71 4231 Ebenezer Rd. - Baltimore, MD 3,310.29
72 6503 Baltimore N. Pike - Baltimore, MD 3,958.33 49,444.02
73 7928 Eastern Blvd. - Baltimore, MD 1,473.17
74 2325 18 Mile Rd - Sterling Heights, MI 7,166.24
75 9701 E. Washington - Indianapolis, IN 47,248.71
76 4500 Roosevelt Rd - Hillside, IL 87,928.06
s:miller\disposition project\assumed real estate-cure amounts 050302
(*)Debtor as Lessor
(**)Debtor as Sublessor
@Additional assumed lease
ASSUMED
REAL ESTATE/CURE AMOUNTS
LOC. LOCATION CURE AMOUNT RESOLVED CURE
78 330 W. Ridge Rd. - Griffith, IN 6,128.51
79 7222 Rockville Rd. - Indianapolis, IN 5,524.55
82 522 Ritchie Hwy - Severna Park, MD 14,358.83
(**) 82 522 Ritchie Hwy - Severna Park, MD 0.00
85 325 Mall Dr., Portage, MI 49002 7,286.00
88 720 N. Green Bay Rd., Waukegan, IL 60087 413.46
91 3271 S. Blvd. E. - Auburn Hills, MI 4,806.46
95 31 Airport Square - North Wales, PA 5,523.40
96 160 S. State St. - Springfield, PA 3,900.49
97 Countryside Plaza - Countryside, IL 27,138.92
(*) 98 1950 State St., St. Charles, IL 0.00
101 1729 Deptford Center Rd., Deptford, NJ 08096 (7,310.19)
(*) 101 1729 Deptford Center Rd., Deptford, NJ 08096 0.00
(*) 102 10901 Bustelton, Philadelphia, PA 0.00
(*) 102 10901 Bustelton, Philadelphia, PA 0.00
(*) 104 10550 Reisertown Rd. Owings Mills, MD 0.00
(*) 105 190 W. Lincoln Hwy., Exton, PA 0.00
@ 108 7401 W. 24TH ST - NORTH RIVERSIDE, IL 130,474.18 149,168.65
125 2308 Belair Rd - Fallston, MD 9,276.11
127 2730 Dekalb Pike - Norristown, PA 1,910.19 9,255.65
129 1524 E. Joppa Rd. - Towson, MD 11,029.22
(**) 129 1524 E. Joppa Rd. - Towson, MD 0.00
(**) 129 1524 E. Joppa Rd. - Towson, MD 0.00
130 8124 Jumpers Junction - Pasadena, MD 3,080.27
130 8124 Jumpers Junction - Pasadena, MD 547.66
(**) 130 8124 Jumpers Junction - Pasadena, MD 0.00
131 201 Bowie Rd. - Laurel, MD 4,802.41
133 Lee Hwy - Fairfax, VA 26,886.29
134 15031 Manchester Rd., Ballwin, MO 63011 (61,755.42)
138 1135 S Kirkwood Blvd. - Kirkwood, MN 28,617.56
140 195 S. Rand Rd., Lake Zurich, IL 70047 180.47
152 89 W. Central Ave. - Edgewater, MD 0.00
165 7235 N. Keystone Ave. - Indianapolis, IN 6,528.44
173 4383 Winston Ave. - Covington, KY 49,539.86
174 14308 Burnhave Dr. - Burnsville, MN 15,409.44
175 1845 E. Country Rd - Maplewood, MN 21,618.74
177 1487 West Street Rd - Warminster, PA 4,497.64
180 110 Commerce Lane - Fairview Heights, IL 19,588.32
183 8901 Page - Overland Park, MO 38,037.89
187 Jefferson Davis Hwy - Fredricksburg, VA 11,356.05
192 West Union Blvd. - Bethlehem, PA (7,801.98)
201 1920 Dempster St. - Evanston, Il 104,895.85
203 Easton Rd. - Wyncote, PA 4,714.35
207 710 Chicago Drive - Holland, MI 3,024.42
s:miller\disposition project\assumed real estate-cure amounts 050302
(*)Debtor as Lessor
(**)Debtor as Sublessor
@Additional assumed lease
ASSUMED
REAL ESTATE/CURE AMOUNTS
LOC. LOCATION CURE AMOUNT RESOLVED CURE
213 4902 Cortez Rd., Bradenton, FL 34210 5,486.68
215 2108 MacArthur - Whitehall, PA 17,373.24
216 RT. 130 S. - Delran, NJ 4,692.47
217 6560A W. Fullerton Ave. - Chicago, IL 61,197.80 129,769.49
221 328 W. Army Trail Rd. - Bloomingdale, Il 48,019.17
230 5210 Baltimore Pike - Clifton Heights, PA 25,462.39
231 757 Huntingdon Pike - Huntingdon Valley, PA 5,619.64
232 6351 Roosevelt Blvd. - Philadelphia, PA 5,498.56
235 191 Lincoln Hwy - Fairless Hills, PA 5,378.60
236 Paoli Pike - West Goshen, PA 9,664.52
237 Welsh Rd. - Horsham, PA 5,932.39
@ 238 46 STATE HWY 70 - MARLTON, NJ 17,802.46
241 1950 East Stroop Rd - Kettering, OH 22,936.91
@ 242 7151 DIXIE HWY - CLARKSTON, MI 17,008.52
243 36624 5 Mile - Livonia, MI 14,788.95
@ 246 63 RICE LAKE SQ. - WHEATON, IL 25,469.39
248 1738 Boston Post Road - Milford, CT 9,263.46
248 1738 Boston Post Road - Milford, CT 6,834.56
249 641 Connecticut Ave. - Norwalk, CT 50,377.94
251 5057 Westfields Blvd. - Centreville, VA 39,695.61
254 3660 S. Tuttle Ave. - Sarasota, FL 29,536.00
260 7300 Haggerty Rd. - W. Bloomfield, MI 19,327.34
261 14641 US 31 N. - Carmel, IN 10,620.52
262 7350 153rd St. W - Apple Valley, MN 11,215.50
264 40 Tunxis Ave. - Bloomfield, CT 5,667.77
268 246 Main Street - Monroe, CT 13,813.30
289 1475 Queens Drive - Woodbury, MN 22,720.05
290 4585 Sunrise Hwy - Bohemia, NY 47,909.47
291 1770 Middle Country Rd - Centereach, NY 27,759.56
291 1770 Middle Country Rd - Centereach, NY 0.00
303 Rt. 130 - East Windsor, NJ 8,365.51
@ 304 554 NY AVE. - LYNDHURST, NJ 26,571.23
602 Central Park Ave. - Yonkers, NY 21,311.89
608 Westminster Rd - West Hempstead, NY 1,654.02
608 Westminster Rd - West Hempstead, NY 2,517.86
610 715 Dobbs Ferry Rd - White Plains, NY 26,491.03
611 3767 Hempstead Turnpike - Levittown, NY 62,888.01
611 3767 Hempstead Turnpike - Levittown, NY 0.00
611 3767 Hempstead Turnpike - Levittown, NY 0.00
612 714 Smithtown Bypass - Smithtown, NY 2,428.23
612 714 Smithtown Bypass - Smithtown, NY 31,209.44
615 167 E. Sunrise Hwy - Patchogue, NY 6,168.96
616 894 Sunrise Hwy - Bay Shore, NY 16,587.13
616 894 Sunrise Hwy - Bay Shore, NY 0.00
s:miller\disposition project\assumed real estate-cure amounts 050302
(*)Debtor as Lessor
(**)Debtor as Sublessor
@Additional assumed lease
ASSUMED
REAL ESTATE/CURE AMOUNTS
LOC. LOCATION CURE AMOUNT RESOLVED CURE
617 Rocky Point Plaza - Rocky Point, NY 9,159.02
620 705 Montauk Hwy - Copiague, NY 11,044.84
621 1797 Dutch Broadway - Elmont, NY 2,571.40
621 1797 Dutch Broadway - Elmont, NY 0.00
641 3105 E. Main St. (Route 6) - Mohegan Lake, NY 2,782.43
647 Rt 130 - Trenton, NJ 2,185.28
991 3400 Industrial Rd., Harrisburg, PA 17110 0.00
@ 997 8055 STATE RTE. 9, HOWE, IN 46746 7,367.72
1193 580 S. Kirts Blvd., Ste. 300, Troy, MI 48084 35,932.84
4478 1454 Elmhurst Rd., Elk Grove Village, IL 60007 0.00
9156 Alexandria, VA 4,794.29
(**) 9156 Alexandria, VA 0.00
TOTAL ASSUMED CURE AMOUNT 2,425,504.69 717,225.07
2,757,103.46
s:miller\disposition project\assumed real estate-cure amounts 050302
(*)Debtor as Lessor
(**)Debtor as Sublessor
@Additional assumed lease
CONTRACTS TO BE ASSUMED
PARTY CONTRACT CURE
Atlas Auto Leasing Fleet Vehicle Leases 0.00
39935 Grand River (11 vehicles)
Novi, MI 48375
Atlas Auto Leasing Forklift Leases 0.00
39935 Grand River (17 store forklifts)
Novi, MI 48375
Atlas Auto Leasing Electric Equipment & Batteries Leases 0.00
39935 Grand River (14 D.C. forklifts, 19 batteries, 1 sweeper, 1 scrubber)
Novi, MI 48375
NMHG/Yale Financial Forklift Leases 0.00
PO Box 747016 (3 store forklifts)
Pittsburgh, PA 15274-7016
All Vend Management Corp. Vending Machines 0.00
2121 W. Airport Fwy., Ste. 380
Irving, TX 75062
Grinnell Fire Protection Fire Sprinkler Protection 61,215.81
107800 Northwest Fwy., #400
Houston, TX 32428
Computerized Waste System Trash Removal/Recycling 73,860.80
PO Box 32428
Louisville, KY 40232
IBM Credit Corp. P.O.S. Cash Register Lease 399,890.37
91222 Collection Ctr. Dr.
Chicago, IL 60693-1222
Alpha National Technology Services Printer Maintenance 0.00
2501 E. Loop, 820 N (stores)
Fort Worth, TX 76118
Facsimile Systems, Inc. Fax Machine Maintenance 8,271.84
27280 Haggerty Rd., Ste. C-6
Farmington Hills, MI 48331
Deposit Payment Protection Services, Inc. Check Processing 1,356.99
400 W. Deluxe Pkwy., PO Box 12536
Milwaukee, WI 53212-0536
AJB Software Design Check/Charge Computer Software 0.00
185 The West Mall, Ste. 1020
Toronto, Ontario, Canada M9C 5L5
Front Range HEAT Division Computer Software 0.00
Dept. #1027 (Help Desk)
Denver, CO 80263
S2 Systems, Inc. Charge Card Computer Software 0.00
15301 Dallas Parkway, Ste. 600
Dallas, TX 75248-4683
Stratus Computer Charge Card Computer Software 0.00
PARTY CONTRACT CURE
2 Westbrook Corp. Ctr., Ste. 320
Westchester, IL 60154
CRS Retail Systems POS Software Maintenance 98,751.81
15 Governor Dr.
Newburgh, NY 12650
JDA Software Systems, Inc. JDA Merchandise Management System Software 4,071.36
14000 N. 87th St.
Scottsdale, AZ 85260-3649
JDA Software Systems, Inc. JDA Retail Ideas Software 21,887.50
14000 N. 87th St.
Scottsdale, AZ 85260-3649
Peregrine Systems EDI Software 0.00
1277 Lenox Park Blvd.
Atlanta, GA 30319-5396
S2 Software On2 Credit Card S2 0.00
PO Box 910291
Dallas, TX 75391-0291
IBM Credit Corp. Computer Lease 39,593.76
2707 Butterfield Rd. (AS/400)
Oak Brook, IL 60523
CIT/GE Computer Lease 0.00
CIT Systems Leasing Dept. 56901 (AS/400)
PO Box 67000
Detroit, MI 48267
Pro Data Software Maintenance 0.00
2809 S. 160th St., Ste. 401 (Database Utility)
Omaha, NB 68130
Help/Systems, Inc. Robot Maintenance Software 0.00
210 Baker Technology Plaza (AS/400)
6101 Baker Rd.
Minnetonka, MN 55345
Penta Safe System Security Software Maintenance 0.00
Penta Safe Security Technologies
802 Lovett Blvd.
Houston, TX 77006
SoftLanding Systems, Inc. Data Base Reorg. Software Maintenance 0.00
84 Elm St.
Peterborough, NH 03458
RedTitan, LLC RedTitan Software Maintenance 0.00
258 Whetstone Rd.
Harwinton, CT 06791
Hawkeye Information Systems, Inc. Pathfinder Services Software Support 0.00
PO Box 2167
Fort Collins, CO 80522
SunGuard Recovery Services, Inc. Disaster Recovery Planning & Services 18,105.00
PO Box 91233
PARTY CONTRACT CURE
Chicago, IL 60693
ARCUS Data Security, Inc. Offsite Magnetic Media Storage 0.00
30555 Northwestern Hwy.
Farmington Hills, MI 48334
GS Leasing Personal Computers 34,404.36
3290 W. Big Beaver, Ste. 200
Troy, MI 48084
Qwest Communications Telecommunications Services Contract 10,130.91
1801 California St., Ste. 3800
Denver, CO 80202
Sprint Telecommunications Services-Store Dial Backup 11,470.26
2330 Shawnee Mission Parkway
Westwood, KS 66205
Siemens Credit Corp. Troy-South PBX and Components 0.00
991 US Highway 22
Bridgewater, NJ 08807
Siemens PBX Maintenance Contract-North & South 14,572.83
1 Town Square, Ste. 300
Southfield, MI 48076
Ameritech Custom Service Agreement-Fiber Optic OC3 Link 0.00
225 W. Randolph, Floor 25
Chicago, IL 60606
Michigan Internet Communications Assn. Internet T1 Port 3,510.00
21711 W. 10 Mile Rd., Ste. 205
Southfield, MI 48075
GENERAL ELECTRIC CAPITAL CORP. EQUIPMENT (COPIERS AND FAX MACHINES) 10,847.06
(#3256877-015, 3256877-06,
3256877-21, 3256877-22,
3256877-23, 3256877-024
3256877-25, 3256877-026)
PARTY CONTRACT CURE
AT&T Local TCG 318.00
PO Box 10226 (Internet communications line)
Newark, NJ 07193
Xerox Service Contract-Printers for D.C.s 25,075.38
800 Long Ridge Rd.
Stamford, CT 06904
Metro-Data Service Contracts for Printers & Terminals
701 Minnesota Dr. Howe & Harrisburg 0.00
Troy, MI 48083
Perle Systems, Ltd. Service Contract for Terminal Controllers
60 Renfrew Dr. Howe & Harrisburg 0.00
Markham, Ontario L3R 0E1
Security Private Network DSL 0.00
1700 E. Garry Ave., Ste. 203 (Circuit to POS Lab)
Santa Ana, CA 92705
SSPA Association Real Estate Purchase Agreement 0.00
3875 Bay Rd., Ste. 3
Saginaw, MI 48607
Eagle Properties One Road Widening Curb cut Construction 0.00
4024 N. Deep Lake
Antioch, IL 60002
Pitney Bowes, Inc. Fax Machines 0.00
One Elmcroft Rd. (3)
Stamford, CT 06926-0700
Sterling Logistics EDI Network 0.00
4600 Lakehurst Ct.
PO Box 8000
Dublin, OH 43016-2000
Soft Landing Systems Computer Software 0.00
84 Elm St.
Peterborough, NH 03458
Benick Private Label 0.00
2377 Main St. (Potting soil)
Glastonbury, CT 06033
Bonide Private Label 0.00
6301 Sutliff Rd. (Chemicals)
Oriskany, NY 13424
Ames True Temper Private Label 0.00
465 Railroad Ave. (Long hand tools)
Camp Hill, PA 17011
PARTY CONTRACT CURE
Bond Manufacturing Co. Private Label 0.00
1666 Willow Pass Rd. (Pruning Tools)
Bay Point, CA 94565
Flexon Industries Private Label 0.00
One Flexon Plaza (Hoses)
Newark, NJ 07114
Midwest Quality Gloves Private Label 0.00
PO Box 260 (Gloves)
Chillicothe, MO 64601
Ceridian Corporation Payroll Services 0.00
26100 Northwestern Hwy., Ste. 1100
Southfield, MI 48076
American Express Co. Credit Card Services 0.00
World Financial Center
New York, NY 10285
Discover Financial Services, Inc. Credit Card Services 0.00
f/k/a/ NOVUS Services, Inc.
2500 Lake Cook Rd.
Riverwoods, IL 60015