EXHIBIT 2.1
[BLACKLINED TO REFLECT
TECHNICAL MODIFICATIONS]
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
CM HOLDINGS, INC., )
CAMELOT MUSIC, INC., ) Case Nos. 96-1247
G.M.G. ADVERTISING, INC. ) through 96-1250 (PJW)
and GRAPEVINE RECORDS )
AND TAPES, INC., ) Jointly Administered
)
Debtors. )
SECOND AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION
OF
CM HOLDINGS, INC., CAMELOT MUSIC, INC.,
G.M.G. ADVERTISING, INC.
AND GRAPEVINE RECORDS AND TAPES, INC.
November 7, 1997
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attn: Howard S. Beltzer (HSB-5721)
Evan C. Hollander (ECH-0191)
Michael C. O'Sullivan (MCO-2355)
(212) 819-8200
and
Young, Conaway, Stargatt & Taylor
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
Attn: James L. Patton, Jr. (No. 2022)
S. David Peress (No.2679)
(302) 571-6600
Co-Counsel for Debtors and
Debtors in Possession
TABLE OF CONTENTS
Page
INTRODUCTION................................................................. 1
ARTICLE I. DEFINITIONS AND RULES OF INTERPRETATION...................... 1
1.01. Definitions.................................................. 1
1.02. Rules of Interpretation...................................... 14
1.03. Incorporation of Exhibits.................................... 14
ARTICLE II. PROVISIONS FOR TREATMENT OF
ADMINISTRATIVE EXPENSE CLAIMS.............................. 15
2.01. Allowance of Administrative Expense Claims................... 15
2.02. Payment of Administrative Expense Claims..................... 15
ARTICLE III. PROVISIONS FOR TREATMENT OF PRIORITY TAX
CLAIMS..................................................... 16
3.01. Priority Tax Claims.......................................... 16
ARTICLE IV. CLASSIFICATION OF CLAIMS AND INTERESTS....................... 16
4.01. Class 1 Claims............................................... 16
4.02. Class 2 Claims............................................... 17
4.03. Class 3 Claims............................................... 17
4.04. Class 4 Claims............................................... 17
4.05. Class 5 Claims............................................... 17
4.06. Class 6 Claims............................................... 18
4.07. Class 7 Interests............................................ 18
ARTICLE V. PROVISIONS FOR TREATMENT OF CLAIMS AND
INTERESTS.................................................. 18
5.01. Prepetition Lender Secured Claims (Class 1-A)................ 18
5.02. Miscellaneous Secured Claims (Classes 2-A through 2-D)....... 19
5.03. Classified Priority Claims (Classes 3-A through 3-D)......... 20
5.04. Prepetition Lender Deficiency Claims (Class 4-A)............. 20
5.05. General Unsecured Claims (Classes 5-A through 5-D)........... 20
5.06. Subordinated Debenture Claims (Class 6-A).................... 22
5.07. Interests (Classes 7-A through 7-D).......................... 22
ARTICLE VI. IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED AND NOT IMPAIRED BY THE
PLAN; ACCEPTANCE OR REJECTION OF THE PLAN.................. 23
6.01. Acceptance by an Impaired Class of Creditors................. 23
6.02. Voting Classes............................................... 23
6.03. Classes Not Receiving or Retaining Property
Deemed to Reject the Plan.................................. 23
6.04. Unimpaired Classes Conclusively Presumed to
Accept the Plan............................................ 23
6.05. Confirmation Pursuant to Section 1129(b)..................... 23
ARTICLE VII. UNEXPIRED LEASES AND EXECUTORY
CONTRACTS.................................................. 24
7.01. Assumption and Rejection..................................... 24
7.02. Assignment................................................... 24
7.03. Cure of Defaults............................................. 24
7.04. Rejection Damages............................................ 25
ARTICLE VIII. OPERATION AND MANAGEMENT OF
REORGANIZED DEBTORS........................................ 25
8.01. Corporate Governance; Directors and Officers................. 25
8.02. Appointment of Directors; Retention of Officers.............. 26
8.03. Option Plan.................................................. 26
ARTICLE IX. MEANS FOR IMPLEMENTATION OF THE PLAN......................... 28
9.01. Creation of New Subsidiaries; Transfer Agreements;
Wall Asset Purchase Agreement.............................. 28
9.02. Operations Between the Confirmation Date and
the Effective Date......................................... 28
9.03. Revesting and Transfer of Assets............................. 28
9.04. Cancellation of Securities................................... 29
9.05. Closing of Books Related to Cancelled Securities............. 29
9.06. Allowance of Claims Subject to Section 502(d)................ 29
9.07. Right of Setoff.............................................. 29
ARTICLE X. PROVISIONS COVERING DISTRIBUTIONS............................ 30
10.01. Timing of Distributions...................................... 30
10.02. New Common Stock............................................. 30
10.03. New Common Stock Distributions............................... 30
10.04. Fractional Shares............................................ 30
10.05. Administration of Exchange Option............................ 31
10.06. Fractional Dollars........................................... 31
10.07. Compliance With Tax Requirements............................. 32
10.08. Persons Deemed Holders of Registered Securities.............. 32
10.09. Distribution of Unclaimed Property........................... 32
ARTICLE XI. RESOLUTION OF DISPUTED CLAIMS................................ 33
11.01. Objections to Claims......................................... 33
11.02. Procedure.................................................... 33
11.03. Estimation................................................... 33
ARTICLE XII. DISCHARGE, RELEASE AND PRESERVATION OF CLAIMS................ 33
12.01. Discharge and Termination.................................... 33
12.02. Distributions in Complete Satisfaction....................... 34
12.03. Injunction................................................... 34
12.04. Release by Debtors and Debtors in Possession................. 34
12.05. Release by Holders of Claims and Interests................... 35
12.06. Exculpation.................................................. 36
12.07. Indemnification Obligations.................................. 36
12.08. Preservation of Insurance.................................... 37
12.09. Subordination................................................ 37
ARTICLE XIII. CONDITIONS TO CONSUMMATION OF THE PLAN....................... 37
13.01. Conditions................................................... 37
13.02. Consummation................................................. 38
ARTICLE XIV. RETENTION OF JURISDICTION.................................... 39
14.01. Jurisdiction of Bankruptcy Court............................. 39
14.02. Exception to Jurisdiction of Bankruptcy Court................ 40
ARTICLE XV. MISCELLANEOUS PROVISIONS..................................... 41
15.01. Binding Effect of the Plan................................... 41
15.02. Nonvoting Stock.............................................. 41
15.03. Authorization of Corporate Action............................ 41
15.04. Listing of Stock............................................. 41
15.05. Retiree Benefits............................................. 41
15.06. Withdrawal of the Plan....................................... 42
15.07. Final Order.................................................. 42
15.08. Notice ..................................................... 42
15.09. Dissolution of Committee..................................... 43
15.10. Amendments and Modifications................................. 43
15.11. Time......................................................... 43
15.12. Section 1145 Exemption....................................... 43
15.13. Section 1146 Exemption....................................... 43
EXHIBITS(1)
Exhibit A Camelot Distribution Co. Transfer Agreement
Exhibit B Camelot Midwest Region Transfer Agreement
Exhibit C Camelot Northeast Region Transfer Agreement
Exhibit E Camelot Southeast Region Transfer Agreement
Exhibit F Camelot Western Region Transfer Agreement
Exhibit G Customary Trade Terms Commitment and Option Exercise Notice
Exhibit H Qualified Option Plan
- --------
(1) The Exhibits to this Plan are voluminous and in some cases have not been
finalized, and accordingly will be compiled in a separate package to be Filed
with the Bankruptcy Court at least five (5) Business Days prior to the first
scheduled date for Confirmation Hearing.
DEBTORS' SECOND AMENDED JOINT CHAPTER 11
PLAN OF REORGANIZATION
THE DEBTORS PROPOSE THIS SECOND AMENDED JOINT PLAN OF REORGANIZATION
PURSUANT TO SECTION 1121(a) OF THE BANKRUPTCY CODE. REFERENCE SHOULD BE MADE TO
THE DEBTORS' DISCLOSURE STATEMENT, APPROVED BY THE BANKRUPTCY COURT ON NOVEMBER
7, 1997, WHICH PROVIDES PERTINENT INFORMATION REGARDING THE DEBTORS' BUSINESS
AND THIS JOINT PLAN.
Capitalized terms shall have the meanings set forth in Article I hereof.
INTRODUCTION
Unconsolidated Plan
The Debtors' Chapter 11 Cases are being jointly administered pursuant to an
order of the Bankruptcy Court, and the Plan is being presented as a joint plan
of reorganization of the Debtors for administrative purposes only. The Plan is
not predicated upon a substantive consolidation of the Chapter 11 Cases and
nothing herein shall be otherwise construed. Claims against, and Interests in,
the Debtors (other than Administrative Expense Claims and Priority Tax Claims)
are classified in Article IV hereof and treated in Article V hereof.
ARTICLE I.
DEFINITIONS AND RULES OF INTERPRETATION
1.01. Definitions. As used herein:
"ADMINISTRATIVE EXPENSE CLAIM" means a cost or expense of administration of
any of the Chapter 11 Cases allowable under Sections 503(b) and 507(a)(1) of the
Bankruptcy Code, including (i) Fee Claims, (ii) any fees assessed against the
Debtors' estates under 28 U.S.C. ss. 1930, (iii) Ordinary Course Administrative
Expense Claims, (iv) Approved Chapter 11 Liabilities and (v) Reclamation Claims.
"AFFILIATE" means a Person that directly or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with, a
specified Person.
"ALLOWED" means with respect to a Claim (other than an Administrative
Expense Claim) that the Claim is allowed pursuant to the Plan in an amount set
forth herein, or:
A. Either (i) is set forth in a proof of claim that was timely Filed,
or that by order of the Bankruptcy Court is not and will not be required to
be Filed, or (ii) has been or hereafter is listed in the Schedules as
liquidated in amount and not disputed or contingent; and
B. Either (i) no objection to the allowance thereof has been
interposed within the applicable period of time fixed by the Plan, the
Bankruptcy Code, the Bankruptcy Rules or the Bankruptcy Court, or (ii) such
an objection has been so interposed and such Claim has been allowed by a
Final Order;
and means, with respect to an Administrative Expense Claim, an Administrative
Expense Claim that becomes "Allowed" as set forth in Section 2.01.
"APPROVED CHAPTER 11 LIABILITIES" means any and all liabilities that have,
with the approval of the Bankruptcy Court, been assumed by, or otherwise become
binding upon, any of the Debtors at any time during the course of the Chapter 11
Cases through the Effective Date and includes, so long as approved by the
Bankruptcy Court and not paid prior to the Effective Date, (i) all agreements
relating to any indebtedness incurred by any of the Debtors during the course of
the Chapter 11 Cases or credit extended to any of the Debtors at any such time,
(ii) all contracts and other obligations undertaken by, or imposed upon, any of
the Debtors at any such time, and (iii) all unexpired leases and executory
contracts entered into prior to the Petition Date and assumed by any of the
Debtors at any such time.
"ASSUMED CONTRACTS" means the executory contracts assumed by Camelot
pursuant to Section 365(a) or Section 1123(b)(2) of the Bankruptcy Code as of
the Effective Date.
"ASSUMED LEASES" means the non-residential real property leases assumed by
Camelot pursuant to Section 365(a) or Section 1123(b)(2) of the Bankruptcy Code
as of the Effective Date.
"ASSUMPTION CLAIM" means any Claim arising under Section 365(b)(1)(A) and
(B) of the Bankruptcy Code with respect to any Assumed Contract or Assumed
Lease.
"BANK AGENT" means The Chase Manhattan Bank, as Agent under the Prepetition
Credit Agreement.
"BANKRUPTCY CODE" means title 11 of the United States Code, as amended and
supplemented from time to time.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
District of Delaware.
"BANKRUPTCY RULES" means the Federal Rules of Bankruptcy Procedure and the
Local Rules of the Bankruptcy Court, as amended and supplemented from time to
time.
"BIG SIX VENDORS" means BMG Distribution, Sony Music Entertainment, Inc.,
Universal Music and Video Distribution, Inc., Warner/Elektra/Atlantic
Corporation, PolyGram Group Distribution, Inc., and EMI Music Distribution.
"BUSINESS DAY" means any day other than a Saturday, Sunday or "legal
holiday" as defined in Bankruptcy Rule 9006(a).
"CAMELOT" means Camelot Music, Inc., a wholly-owned subsidiary of CMH.
"CAMELOT CORPORATE HEADQUARTERS LEASE" means the agreement to be entered
into between Reorganized Camelot and Camelot Distribution Co., Inc. as of the
Effective Date, governing the lease of Camelot's corporate headquarters facility
by Camelot Distribution Co., Inc. to Reorganized Camelot.
"CAMELOT DISTRIBUTION CO., INC." means Camelot Distribution Co., Inc., a
Delaware corporation and the transferee of assets under the Camelot Distribution
Co. Transfer Agreement, and the lessor under the Camelot Corporate Headquarters
Lease.
"CAMELOT DISTRIBUTION CO. TRANSFER AGREEMENT" means the Transfer Agreement
(substantially in the form of Exhibit A to the Plan) to be entered into between
Camelot and Camelot Distribution Co., Inc. as of the Effective Date, providing
for the transfer of certain assets to, and the assumption of certain liabilities
by, Camelot Distribution Co., Inc.
"CAMELOT MIDWEST REGION, INC." means Camelot Midwest Region, Inc., a
Delaware corporation and the New Regional Subsidiary that is the transferee of
assets under the Camelot Midwest Region Transfer Agreement.
"CAMELOT MIDWEST REGION TRANSFER AGREEMENT" means the Transfer Agreement
(substantially in the form of Exhibit B to the Plan) to be entered into between
Camelot and Camelot Midwest Region, Inc. as of the Effective Date, providing for
the transfer of certain assets to, and the assumption of certain liabilities by,
Camelot Midwest Region, Inc.
"CAMELOT NORTHEAST REGION, INC." means Camelot Northeast Region, Inc., a
Delaware corporation and the New Regional Subsidiary that is the transferee of
assets under the Camelot Northeast Region Transfer Agreement and the transferee
of assets of The Wall in the event that such transfer is consummated on or after
the Effective Date.
"CAMELOT NORTHEAST REGION TRANSFER AGREEMENT" means the Transfer Agreement
(substantially in the form of Exhibit C to the Plan) to be entered into between
Camelot and Camelot Northeast Region, Inc. as of the Effective Date, providing
for the transfer of certain assets to, and the assumption of certain liabilities
by, Camelot Northeast Region, Inc.
"CAMELOT SOUTHEAST REGION, INC." means Camelot Southeast Region, Inc., a
Delaware corporation and the New Regional Subsidiary that is the transferee of
assets under the Camelot Southeast Region Transfer Agreement.
"CAMELOT SOUTHEAST REGION TRANSFER AGREEMENT" means the Transfer Agreement
(substantially in the form of Exhibit E to the Plan) to be entered into between
Camelot and Camelot Southeast Region, Inc. as of the Effective Date, providing
for the transfer of certain assets to, and the assumption of certain liabilities
by, Camelot Southeast Region, Inc.
"CAMELOT WESTERN REGION, INC." means Camelot Western Region, Inc., a
Delaware corporation and the New Regional Subsidiary that is the transferee of
assets under the Camelot Western Region Transfer Agreement.
"CAMELOT WESTERN REGION TRANSFER AGREEMENT" means the Transfer Agreement
(substantially in the form of Exhibit F to the Plan) to be entered into between
Camelot and Camelot Western Region, Inc. as of the Effective Date, providing for
the transfer of certain assets to, and the assumption of certain liabilities by,
Camelot Western Region, Inc.
"CANCELLED SECURITY" means any note, bond, debenture, stock certificate or
other instrument or investment security evidencing (i) an Impaired Claim or
Impaired Interest outstanding immediately prior to the Effective Date or (ii) an
obligation under the DIP Facility.
"CASH" means money, currency and coins, negotiable checks and balances in
bank accounts.
"CAUSES OF ACTION" means any and all actions, causes of action,
liabilities, obligations, rights, suits, debts, sums of money, damages,
judgments, claims and demands whatsoever, whether known or unknown, in law,
equity or otherwise.
"CHANGE IN CONTROL" means the occurrence of any of the following:
(i) (A) any Person who is not a shareholder of Reorganized CMH on the
Effective Date, together with any Affiliate of such Person, in the
aggregate become beneficial owners, directly or indirectly, of 35% or
more of the New Common Stock then outstanding or (B) any Person who is
a shareholder of Reorganized CMH on the Effective Date, together with
any Affiliate of such Person, in the aggregate become beneficial
owners, directly or indirectly, of 50% or more of the New Common Stock
then outstanding; or
(ii) individuals who on the Effective Date constituted the board of
directors of Reorganized Camelot or Reorganized CMH (together with any
new directors whose election by the board of directors of Reorganized
Camelot or Reorganized CMH , or whose nomination for election by the
shareholders of Reorganized Camelot or Reorganized CMH, was approved
by a vote of a majority of the directors of Reorganized Camelot or
Reorganized CMH then still in office who were either directors on the
Effective Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors of Reorganized Camelot or Reorganized CMH
then in office; or
(iii)the shareholders of Reorganized CMH approve any transaction or series
of transactions under which any of the Reorganized Debtors, the New
Regional Subsidiaries or Camelot Distribution Co., Inc. are merged or
consolidated with any other company, other than (A) a merger or
consolidation which would result in the voting securities of
Reorganized CMH or the direct or indirect subsidiary thereof party to
such merger or consolidation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
merged entity immediately after such merger or consolidation or (B)
any transaction or series of transactions implemented pursuant to the
Plan; or
(iv) the shareholders of Reorganized CMH approve a plan of liquidation of
any of the Reorganized Debtors, the New Regional Subsidiaries or
Camelot Distribution Co., Inc., or an agreement for the sale or
disposition of all or substantially all of the assets of any of the
Reorganized Debtors, the New Regional Subsidiaries or Camelot
Distribution Co., Inc., other than a sale or disposition of all or
substanti- ally all of the assets of any of the Reorganized Debtors,
the New Regional Subsidiaries or Camelot Distribution Co., Inc. to an
Affiliate of such respective Person or Persons.
"CHAPTER 11 CASES" means the cases under Chapter 11 of the Bankruptcy Code
voluntarily commenced by the Debtors on the Petition Date.
"CLAIM" means any claim against one or more of the Debtors within the
meaning of Section 101(5) of the Bankruptcy Code.
"CLASS" means any group of Claims or Interests as classified pursuant to
Article IV of the Plan.
"CLASSIFIED PRIORITY CLAIMS" means any and all Claims entitled to priority
in payment under Section 507(a) of the Bankruptcy Code other than Administrative
Expense Claims and Priority Tax Claims.
"CMH" means CM Holdings, Inc.
"CMH GUARANTY" means the Holdings Guarantee dated as of November 12, 1993
by and among CMH (as guarantor) and the Prepetition Lenders, pursuant to which
CMH guaranteed all of Camelot's obligations to the Prepetition Lenders arising
under or in connection with the Prepetition Credit Agreement.
"CMH SENIOR DEBENTURES" means the 11% Senior Debentures and the 10% Senior
Debentures of CMH.
"CMH SENIOR DEBENTURE CLAIMS" means any and all Claims against CMH arising
under or in respect of the CMH Senior Debentures or the indebtedness evidenced
thereby or the CMH Senior Debenture Indentures or any instrument, agreement,
breach, tort, wrongful conduct, act, omission or event in any respect and in any
manner arising therefrom or related thereto.
"CMH SENIOR DEBENTURE INDENTURES" means the 10% Indenture and the 11%
Indenture.
"COMMITTEE" means the Official Committee of Unsecured Creditors of the
Debtors appointed by the United States Trustee pursuant to ss. 1102(a) of the
Bankruptcy Code.
"CONFIRMATION" means the entry by the Bankruptcy Court of the Confirmation
Order.
"CONFIRMATION DATE" means the date on which the Confirmation Order is
entered on the docket maintained by the Clerk of the Bankruptcy Court.
"CONFIRMATION HEARING" means the hearing before the Bankruptcy Court on the
Confirmation of the Plan.
"CONFIRMATION ORDER" means an order entered by the Bankruptcy Court
confirming the Plan.
"CUSTOMARY TRADE TERMS" means the normal and customary trade terms,
including, without limitation, credit terms, discounts (including, without
limitation, the 2% prompt payment discount), dating, cooperative advertising
payments and other trade terms, extended by an Eligible Supplier to Camelot
prior to December 1, 1995, or if such Eligible Supplier did not extend customary
trade terms to Camelot prior to December 1, 1995, such trade terms as it
generally extends to creditworthy customers with sales volume comparable to the
Debtors.
"CUSTOMARY TRADE TERMS COMMITMENT AND OPTION EXERCISE NOTICE" means an
agreement (substantially in the form annexed as Exhibit G to the Plan) duly
executed by an Eligible Supplier and delivered to Camelot and the Bank Agent at
least fifteen (15) days prior to the first scheduled date of the Confirmation
Hearing (and revokable in a writing delivered to Camelot and the Bank Agent at
any time up to the Business Day prior to the commencement of the Confirmation
Hearing), pursuant to which such Eligible Supplier (i) commits to sell goods to
Camelot Distribution Co., Inc. on Customary Trade Terms effective as of the
Effective Date, (ii) commits to provide Camelot Distribution Co., Inc. with
credit limits sufficient to insure a minimum of 60 days dating (or, if greater,
such number of days dating as is customarily extended by such Eligible Supplier
to creditworthy customers) with respect to each item of inventory purchased,
(iii) may exercise the Exchange Option and (iv) provides Camelot Distribution
Co., Inc. with a credit equal to the value of any customary discounts
(including, without limitation, the 2% prompt payment discount) denied by such
Eligible Supplier to the Debtors from and after June 1, 1997.
"DEBTORS" means CMH, Camelot, GMG and Grapevine, debtors and debtors in
possession in the Chapter 11 Cases.
"DGCL" means the Delaware General Corporation Law.
"DIP AGENT" means The Chase Manhattan Bank, as agent for the DIP Lenders.
"DIP FACILITY" means the Revolving Credit and Guaranty Agreement dated as
of August 9, 1996 to which the Debtors are parties.
"DIP LENDERS" means those lenders party to the DIP Facility.
"DISBURSING AGENT" means Reorganized Camelot or Reorganized CMH in its
capacity as disbursing agent under Article X of the Plan, or any other party
designated by Reorganized Camelot or Reorganized CMH to serve as disbursing
agent that is reasonably acceptable to the Committee. A Disbursing Agent shall
not be required to give any bond or surety or other security for the performance
of its duties unless otherwise ordered by the Bankruptcy Court.
"DISCLOSURE STATEMENT" means the disclosure statement approved by Order of
the Bankruptcy Court concerning the Plan, distributed to Holders of Claims
entitled to vote for the purpose of making an informed decision as to whether to
accept or reject the Plan in accordance with Section 1126(b) of the Bankruptcy
Code and Bankruptcy Rule 3018.
"DISPUTED" means, in respect of any Claim, that such Claim has been
asserted or Filed, but has not been (i) Allowed or (ii) disallowed or expunged
pursuant to an Order of the Bankruptcy Court.
"EFFECTIVE DATE" means the first Business Day after the conditions set
forth in Section 13.01 have been satisfied or waived as provided therein.
"11% INDENTURE" means the Indenture dated as of December 19, 1994 between
CMH, as borrower, and AIBC Services, N.V., as trustee, as amended, modified,
restated or supplemented from time to time.
"11% SENIOR DEBENTURES" means the 11% Senior Debentures of CMH due March 1,
2001 issued pursuant to the 11% Indenture.
"ELIGIBLE SUPPLIER" means a supplier of prerecorded music, video or other
entertainment products, personal electronic products, blank tapes or discs or
any other merchandise purchased by Camelot for sale that (i) was the Holder of a
General Unsecured Claim as of the Petition Date and (ii) is identified by
Camelot as a continuing supplier of such products to Camelot Distribution Co.,
Inc. in a schedule Filed by Camelot at least 30 days prior to the first
scheduled date of the Confirmation Hearing.
"ESTATES" means the bankruptcy estates created pursuant to Section 541 of
the Bankruptcy Code by the commencement of the Chapter 11 Cases.
"EXCHANGE OPTION" means the right of an Eligible Supplier pursuant to
Section 5.05(a)(iv) of the Plan, at its option exercisable by timely delivery of
a Customary Trade Terms Commitment and Option Exercise Notice, to (i) tender to
the Holders of Allowed Prepetition Lender Secured Claims the entire distribution
to which it is entitled in respect of its Allowed Class 5-A General Unsecured
Claim under the Plan, in exchange for a Cash distribution from the Secured Claim
Distribution in an amount equal to 50% of such Eligible Supplier's Allowed Class
5-A General Unsecured Claim, or (ii) (a) retain 25% of its Allowed Class 5-A
General Unsecured Claim and receive shares of New Common Stock therefor in an
amount equal to the product of the Unsecured Claim Common Stock Distribution
Ratio and the retained amount of such Claim, and (b) tender to the Holders of
Allowed Prepetition Lender Secured Claims the balance of the distribution to
which such Eligible Supplier is entitled in respect of its Allowed Class 5-A
General Unsecured Claim, for a Cash distribution from the Secured Claim
Distribution in an amount equal to 37.5% of such Eligible Supplier's Allowed
Class 5-A General Unsecured Claim.
"FEE CLAIM" means a Claim under Sections 330, 331 or 503(b) of the
Bankruptcy Code for compensation for professional services rendered and
reimbursement of expenses incurred in the Chapter 11 Cases through the Effective
Date.
"FILED" means delivered to, received by and entered upon the legal docket
in the Chapter 11 Cases or any related adversary proceedings by the Clerk of the
Bankruptcy Court, provided, however, that with respect to proofs of claim only,
Filed shall mean delivered and received in the manner approved by the Bankruptcy
Court in that certain Order Fixing Bar Date for Filing Proofs of Claim and
Approving Notice Thereof dated December 6, 1996.
"FINAL ORDER" means an order, judgment, ruling or decree issued and entered
upon the legal docket in the Chapter 11 Cases or any related adversary
proceedings by the Clerk of the Bankruptcy Court or any other court of competent
jurisdiction that has not been reversed, stayed, modified or amended and as to
which the time to appeal, reargue, petition for certiorari or seek rehearing has
expired, and as to which no appeal, reargument, petition for certiorari, or
rehearing is pending or as to which any right to appeal, reargue, petition for
certiorari or seek rehearing has been waived in writing in a manner satisfactory
to the applicable Debtor or, if an appeal, reargument, petition for certiorari
or rehearing thereof has been denied, the time to take any further appeal or to
seek certiorari or further reargument or rehearing has expired.
"546(G)* AGREEMENT" means an agreement entered into after the Petition Date
by Camelot and a supplier, and approved or authorized by order of the Bankruptcy
Court, which provides, among other things, for returns of goods sold to Camelot
prior to the Petition Date for credit against such supplier's Class 5-A General
Unsecured Claim.
"GENERAL UNSECURED CLAIMS" means all Claims other than Priority Claims,
Secured Claims and Subordinated Debenture Claims.
"GMG" means G.M.G. Advertising, Inc., a wholly-owned subsidiary of Camelot.
"GRAPEVINE" means Grapevine Records and Tapes, Inc., a wholly-owned
subsidiary of Camelot and the transferee of assets of The Wall under the Wall
Asset Purchase Agreement in the event that such transfer is consummated prior to
the Effective Date.
"HOLDER" means, in respect of any Claim or Interest, the holder or owner
of, or Person otherwise entitled to enforce, such Claim or Interest.
"IMPAIRED" means impaired as that term is defined in Section 1124 of the
Bankruptcy Code.
"INITIAL DISTRIBUTION DATE" means the date ten (10) days subsequent to the
Effective Date, or as soon as practicable thereafter.
"INTERESTS" means any and all equity or ownership interests in the Debtors
and all stock certificates and other investment securities, whether or not
certificated, representing any such equity or ownership interests and any and
all options, warrants, subscription agreements and contractual rights to acquire
any such equity or ownership interests.
"MAC" means Music Acquisition Corp.
"MISCELLANEOUS SECURED CLAIMS" means any and all Secured Claims other than
the Prepetition Lender Secured Claims.
"NET EQUITY VALUE" means the residual value of Reorganized CMH after
deduction for all liabilities and anticipated Cash obligations upon emergence
from and in connection with the Chapter 11 Cases.
"NEW COMMON STOCK" means the common stock of Reorganized CMH ($0.01 par
value), having one vote per share, without preemptive rights or cumulative
voting rights.
"NEW REGIONAL SUBSIDIARIES" means Camelot Midwest Region, Inc., Camelot
Northeast Region, Inc., Camelot Southeast Region, Inc. and Camelot Western
Region, Inc.
"NEW WORKING CAPITAL FACILITY" means that certain definitive written
agreement providing for a revolving credit facility and a term loan in an amount
and on terms, conditions and collateral security satisfactory to and approved by
the Debtors, the Reorganized Debtors, the New Regional Subsidiaries and/or
Camelot Distribution Co., Inc., as appropriate, the lenders party thereto, the
agent thereunder and the Committee, together with all collateral and ancillary
documents to be executed in connection therewith.
"NEW WORKING CAPITAL FACILITY AGREEMENT" means that certain definitive
written agreement providing for the New Working Capital Facility.
"OPTION PLAN ACCOUNT" means the bookkeeping account established for the
purpose of recording the shares of New Common Stock available for issuance under
the Qualified Option Plan.
"ORDINARY COURSE ADMINISTRATIVE EXPENSE CLAIMS" means the actual, necessary
costs and expenses of preserving the Estates and operating the business of the
Debtors, incurred and payable in the ordinary course of business by the Debtors
after the Petition Date.
"PERSON" means any individual, corporation, limited or general partnership,
limited liability company, joint venture, association, joint stock company,
estate, entity, trust, trustee, United States trustee, unincorporated
organization, government, governmental unit (as defined in the Bankruptcy Code),
agency or political subdivision thereof.
"PETITION DATE" means August 9, 1996.
"PLAN" means this Second Amended Joint Chapter 11 Plan of Reorganization,
as amended or modified from time to time by the Debtors in accordance with the
terms hereof and Section 1127 of the Bankruptcy Code.
"PREPETITION CREDIT AGREEMENT" means the Credit Agreement dated as of
November 12, 1993 by and among Camelot (as successor by merger with MAC), the
Prepetition Lenders and the Bank Agent, as amended, modified or supplemented
from time to time.
"PREPETITION LENDERS" means the Holders of the Prepetition Lender Claims.
"PREPETITION LENDER CLAIMS" means the Claims of the Prepetition Lenders
against Camelot and CMH arising under or in connection with the Prepetition
Credit Agreement and the CMH Guaranty.
"PREPETITION LENDER DEFICIENCY CLAIMS" means the portion of the Prepetition
Lender Claims that are General Unsecured Claims against Camelot pursuant to
Section 506(a) of the Bankruptcy Code.
"PREPETITION LENDER SECURED CLAIM OPTION" means the right of a Holder of a
Prepetition Lender Secured Claim to elect to receive shares of New Common Stock
at the Secured Claim Common Stock Distribution Ratio to the extent of such
Holders Ratable Share of the balance of the Cash available in the Secured Claim
Distribution after giving effect to the Exchange Option.
"PREPETITION LENDER SECURED CLAIMS" means the portion of the Prepetition
Lender Claims that are Secured Claims against Camelot pursuant to Section 506(a)
of the Bankruptcy Code.
"PREPETITION LOAN DOCUMENTS" means the Prepetition Credit Agreement, the
schedules thereto and the collateral and ancillary documents executed and
delivered pursuant thereto.
"PRIORITY CLAIMS" means Classified Priority Claims, Administrative Expense
Claims and Priority Tax Claims.
"PRIORITY TAX CLAIMS" means any and all Claims entitled to priority in
payment under Section 507(a)(8) of the Bankruptcy Code.
"QUALIFIED OPTION PLAN" means the stock option plan (substantially in the
form of Exhibit H to the Plan) to be adopted by Reorganized CMH on the Effective
Date for the purpose of granting options for the purchase of New Common Stock to
the participants in such plan.
"RATABLE SHARE" means, with reference to any distribution on account of any
Allowed Claim in any Class, a distribution equal in amount to the ratio
(expressed as a percentage) that the amount of such Allowed Claim bears to the
amount of all Allowed Claims in that Class.
"RECLAMATION CLAIMS" means any and all rights of reclamation identified as
valid in accordance with that certain Order of the Bankruptcy Court Determining
Validity of Reclamation Claims, dated January 10, 1997.
"RELEASE OBLIGOR" has the meaning assigned to that term in Section 12.05.
"REORGANIZED CAMELOT" means Camelot Music, Inc., the successor to Camelot
under the Plan.
"REORGANIZED CMH" means CM Holdings, Inc., the successor to CMH under the
Plan.
"REORGANIZED DEBTORS" means Reorganized Camelot, Reorganized CMH and
Reorganized Grapevine.
"REORGANIZED GRAPEVINE" means Grapevine Records and Tapes, Inc., the
successor to Grapevine under the Plan.
"SCHEDULES" means the Schedules of Assets and Liabilities and the Statement
of Financial Affairs that were filed with the Bankruptcy Court by the Debtors on
or about October 23, 1996, as such have been and from time to time may be
amended or supplemented by any of the Debtors in accordance with Bankruptcy Rule
1009.
"SECURED CLAIM" means a Claim secured by a lien on property in which any of
the Estates have an interest, as determined pursuant to Section 506(a) of the
Bankruptcy Code, or that is subject to setoff under Section 553 of the
Bankruptcy Code, to the extent of the value of the Holder's interest in the
Estate's interest in such property or to the extent of the amount subject to
setoff, as applicable.
"SECURED CLAIM COMMON STOCK DISTRIBUTION RATIO" means one (1) share of New
Common Stock for each $18.75 of Allowed Prepetition Lender Secured Claims, and
which may be expressed as a fraction, the numerator of which equals 1 and the
denominator of which equals 18.75.
"SECURED CLAIM DISTRIBUTION" means $41,884,000 in a combination of Cash
and, to the extent that Holders of the Prepetition Lender Secured Claims
exercise the Prepetition Lender Secured Claim Option, shares of New Common
Stock.
"SUBORDINATED DEBENTURES" means the 11% Subordinated Debentures of Camelot
due March 1, 2004 outstanding under the Subordinated Indenture.
"SUBORDINATED DEBENTURE CLAIMS" means any and all Claims against Camelot
arising under or in respect of the Subordinated Indenture or the Subordinated
Debentures or the indebtedness evidenced thereby or any instrument, agreement,
breach, tort, wrongful conduct, act, omission or event in any respect and in any
manner arising therefrom or related thereto, as Allowed pursuant to Section
5.06(a).
"SUBORDINATED INDENTURE" means the Indenture dated as of November 12, 1993
between Camelot, as successor to MAC, and AIBC Services, N.V., as trustee, as
amended, modified, restated or supplemented from time to time.
"SUBORDINATION PROVISIONS" means the provisions of Article Eleven of the
Subordinated Indenture.
"TRANSFER AGREEMENTS" means the Camelot Midwest Region Transfer Agreement,
the Camelot Distribution Co. Transfer Agreement, the Camelot Northeast Region
Transfer Agreement, the Camelot Southeast Region Transfer Agreement and the
Camelot Western Region Transfer Agreement.
"10% INDENTURE" means the Indenture dated as of November 12, 1993 between
CMH, as borrower and AIBC Investcorp Finance, B.V., as trustee, as amended,
modified, restated or supplemented from time to time.
"10% SENIOR DEBENTURES" means the 10% Senior Debentures of CMH due March 1,
2004 outstanding under the 10% Indenture.
"THE WALL" means The Wall Music, Inc., a Pennsylvania corporation and the
seller under the Wall Asset Purchase Agreement.
"UNSECURED CLAIM COMMON STOCK DISTRIBUTION RATIO" means one (1) share of
New Common Stock for each $47.95 of Allowed Class 4-A, 5-A and 6-A Claims, and
which may be expressed as a fraction, the numerator of which equals 1 and the
denominator of which equals 47.95.
"WALL ASSET PURCHASE AGREEMENT" means the asset purchase agreement
(substantially in the form of Exhibit I to the Plan) pursuant to which Grapevine
or Camelot Northeast Region, Inc., as appropriate, shall purchase, if at all,
substantially all of the assets of The Wall.
1.02. Rules of Interpretation. References herein to a "Section," when not
qualified by a reference to another document, are references to the sections of
the Plan. Whenever from the context it appears appropriate, each term stated in
either the singular or the plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. The words "herein," "hereof," "hereto,"
"hereunder" and others of similar import, refer to the Plan as a whole and not
to the part in which such words appear. The words "includes" and "including" are
not limiting and mean that the things specifically identified are set forth for
purposes of illustration, clarity or specificity and do not in any respect
qualify, characterize or limit the generality of the class within such things
are included. Captions and headings to articles, sections and exhibits are
inserted for convenience of reference only, are not a part of the Plan, and
shall not be used to interpret the Plan. The rules of construction set forth in
Section 102 of the Bankruptcy Code shall apply. In computing any period of time
prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) and
Section 15.11 shall apply, but Bankruptcy Rule 9006(a) shall govern.
1.03. Incorporation of Exhibits. All Exhibits to the Plan are part of the
Plan and incorporated herein as fully as if set forth at length herein. The
Exhibits to the Plan will be Filed with the Bankruptcy Court at least three (3)
days prior to the first scheduled date for the hearing to consider approval of
the Disclosure Statement.
ARTICLE II.
PROVISIONS FOR TREATMENT OF ADMINISTRATIVE EXPENSE
CLAIMS
2.01. Allowance of Administrative Expense Claims. Except as otherwise
provided in the Plan, Administrative Expense Claims shall become Allowed as
follows:
(a) Ordinary Course Administrative Expense Claims and Approved Chapter
11 Liabilities. An Ordinary Course Administrative Expense Claim that is not
disputed by Camelot or Reorganized Camelot by written notice given to the
Holder of such Claim prior to the date on which such payment is last due
shall become Allowed on such date and payable in accordance with Section
2.02 of the Plan. An Approved Chapter 11 Liability shall become Allowed on
the date on which such payment is last due and shall be payable in
accordance with Section 2.02 of the Plan.
(b) Reclamation Claims. A Reclamation Claim shall become Allowed as an
Administrative Expense Claim only to the extent that the Holder of such
Reclamation Claim has not received payment of such Reclamation Claim prior
to the Effective Date.
(c) Fee Claims. A Fee Claim shall become Allowed if Allowed or
approved by the Bankruptcy Court upon an application Filed not later than
90 days after the date that the Confirmation Order becomes a Final Order.
(d) All Other Administrative Expense Claims. All other Administrative
Expense Claims (including Ordinary Course Administrative Expense Claims
that are Disputed by Camelot or Reorganized Camelot as set forth in Section
2.01(a)) shall become Allowed only if the Holder of such Claim files with
the Bankruptcy Court and serves on Reorganized Camelot within 45 days after
the date that Camelot, or Reorganized Camelot, provides written notice that
such Claim is a Disputed Claim, a motion requesting payment of such
Administrative Expense Claim and only if and to the extent such Claim is
Allowed by the Bankruptcy Court pursuant to a Final Order.
2.02. Payment of Administrative Expense Claims. Reorganized Camelot shall
assume and pay Allowed Administrative Expense Claims, other than Ordinary Course
Administrative Expense Claims and Approved Chapter 11 Liabilities, in full and
in Cash on the latest of (i) the date which is fifteen (15) days after the
Effective Date, (ii) the date on which such Administrative Expense Claim becomes
Allowed, and (iii) a date agreed by Reorganized Camelot and such Holder.
Reorganized Camelot shall assume and pay Allowed Ordinary Course Administrative
Expense Claims and Allowed Approved Chapter 11 Liabilities on the last date on
which payment is due or would otherwise be permitted to be made in accordance
with the terms and conditions of the particular transaction and any agreements
relating thereto.
ARTICLE III.
PROVISIONS FOR TREATMENT OF PRIORITY TAX CLAIMS
3.01. Priority Tax Claims. The Holder of an Allowed Priority Tax Claim
shall receive, on account of such Allowed Priority Tax Claim, a Cash payment in
the amount of such Allowed Priority Tax Claim six years after the assessment of
the tax on which such Claim is based, plus simple interest annually in arrears
on such amount from the Effective Date through such day at the interest rate
publicly quoted on the Effective Date for obligations backed by the full faith
and credit of the United States of America maturing in 90 days. At the option of
Reorganized Camelot, any Allowed Priority Tax Claim may be (i) paid on such
alternative terms as may be agreed to by Reorganized Camelot and the Holder of
such Allowed Priority Tax Claim or (ii) prepaid in whole or in part, without
premium or penalty, at any time.
ARTICLE IV.
CLASSIFICATION OF CLAIMS AND INTERESTS
For purposes of the Plan all Claims against, and Interests in, the Debtors
(other than Administrative Expense Claims and Priority Tax Claims) are
classified as described below. In accordance with 1123(a)(1) of the Bankruptcy
Code, Administrative Expense Claims and Priority Tax Claims have not been
classified and are excluded from the following Classes. A Claim or Interest will
be deemed classified in a particular Class only to the extent that such Claim or
Interest qualifies within the description of that Class and will be deemed
classified in a different Class to the extent that any remainder of such Claim
or Interest qualifies within the description of such different Class. Further, a
Claim or Interest shall not be classified in any Class for distribution purposes
until such Claim or Interest becomes an Allowed Claim or Allowed Interest and
then only to the extent that such Claim or Interest has not been paid, released
or otherwise satisfied prior to the Effective Date.
4.01. Class 1 Claims: Prepetition Lender Secured Claims.
Class 1-A Claims: Class 1-A Claims shall consist of all Prepetition
Lender Secured Claims against Camelot.
4.02. Class 2 Claims: Miscellaneous Secured Claims.
Class 2-A Claims: Class 2-A Claims shall consist of all Miscellaneous
Secured Claims against Camelot.
Class 2-B Claims: Class 2-B Claims shall consist of all Miscellaneous
Secured Claims against CMH.
Class 2-C Claims: Class 2-C Claims shall consist of all Miscellaneous
Secured Claims against GMG.
Class 2-D Claims: Class 2-D Claims shall consist of all Miscellaneous
Secured Claims against Grapevine.
4.03. Class 3 Claims: Classified Priority Claims.
Class 3-A Claims: Class 3-A Claims shall consist of all Classified
Priority Claims against Camelot.
Class 3-B Claims: Class 3-B Claims shall consist of all Classified
Priority Claims against CMH.
Class 3-C Claims: Class 3-C Claims shall consist of all Classified
Priority Claims against GMG.
Class 3-D Claims: Class 3-D Claims shall consist of all Classified
Priority Claims against Grapevine.
4.04. Class 4 Claims: Prepetition Lender Deficiency Claims.
Class 4-A Claims: Class 4-A Claims shall consist of all Prepetition
Lender Deficiency Claims against Camelot.
4.05. Class 5 Claims: General Unsecured Claims.
Class 5-A Claims: Class 5-A Claims shall consist of all General
Unsecured Claims against Camelot other than the
Class 4-A Prepetition Lender Deficiency Claims.
Class 5-B Claims: Class 5-B Claims shall consist of all General
Unsecured Claims against CMH.
Class 5-C Claims: Class 5-C Claims shall consist of all General
Unsecured Claims against GMG.
Class 5-D Claims: Class 5-D Claims shall consist of all General
Unsecured Claims against Grapevine.
4.06. Class 6 Claims: Subordinated Debenture Claims.
Class 6-A Claims: Class 6-A Claims shall consist of all Subordinated
Debenture Claims against Camelot.
4.07. Class 7 Interests.
Class 7-A Interests: Class 7-A Interests shall consist of all
Interests in Camelot.
Class 7-B Interests: Class 7-B Interests shall consist of all
Interests in CMH.
Class 7-C Interests: Class 7-C Interests shall consist of all
Interests in GMG.
Class 7-D Interests: Class 7-D Interests shall consist of all
Interests in Grapevine.
ARTICLE V.
PROVISIONS FOR TREATMENT
OF CLAIMS AND INTERESTS
5.01. Prepetition Lender Secured Claims (Class 1-A).
(a) Allowance of Prepetition Lender Secured Claims. The Prepetition Lender
Secured Claims shall be Allowed in the amount of $41,884,000.
(b) Treatment. Subject to the Exchange Option, each Holder of an Allowed
Prepetition Lender Secured Claim shall receive, on account of such Claim, in
accordance with Section 10.05 of the Plan, its Ratable Share of the Secured
Claim Distribution in the form of Cash or New Common Stock at the Secured Claim
Common Stock Distribution Ratio. In accordance with the Exchange Option, the
Holders of the Prepetition Lender Secured Claims will (i) reduce their Ratable
Share of Cash from the Secured Claim Distribution by their Ratable Share of 50%
of the Allowed Class 5-A General Unsecured Claims tendered by Eligible Suppliers
that have timely exercised the Exchange Option, and (ii) receive in exchange
therefor their Ratable Share of the distributions to which such Eligible
Suppliers would have otherwise been entitled on account of the tendered portion
of their Allowed Class 5-A General Unsecured Claims.
(c) Prepetition Lender Secured Claim Option. Each Holder of an Allowed
Prepetition Lender Secured Claim shall have the right, exercisable at its sole
option, to exercise the Prepetition Lender Secured Claim Option.
(d) Satisfaction of ss. 507(b) Rights. The distribution pursuant to Section
5.01(b) of the Plan shall be in full satisfaction of any and all rights of the
Holders of Prepetition Lender Secured Claims under ss. 507(b) of the Bankruptcy
Code.
(e) Impairment. Class 1-A is Impaired.
5.02. Miscellaneous Secured Claims (Classes 2-A through 2-D).
(a) Treatment. With regard to each Allowed Miscellaneous Secured Claim, on
the Effective Date, the applicable Reorganized Debtor, at its sole option, shall
either (i) assume such Claim, and those legal, equitable and contractual rights
to which the Holder of such Claim is entitled shall not be altered by the Plan,
or (ii) provide such other treatment in respect of such Claim as will cause such
Claim not to be Impaired. The Debtors' failure to object to any such Claim
during the pendency of the Chapter 11 Cases shall not prejudice, diminish,
affect or impair the applicable Reorganized Debtor's right to contest or defend
itself against such Claim in any lawful manner or forum when and if such Claim
is sought to be enforced by the Holder thereof. Each Miscellaneous Secured Claim
and any lien lawfully granted or existing on any property of the Estates on the
Petition Date as security for a Miscellaneous Secured Claim shall, unless such
Claim is paid in full on or prior to the Effective Date, (x) survive the
Confirmation and consummation of the Plan, the Debtors' discharge under Section
1141(d) of the Bankruptcy Code and Section 12.01 of the Plan, and transfer of
the property securing such Miscellaneous Secured Claim under the Plan, (y)
remain enforceable against either the applicable Reorganized Debtor or the
transferee of the property securing such Miscellaneous Secured Claim under the
Plan in accordance with the contractual terms of any lawful agreements
enforceable by the Holder of such Claim on the Petition Date until the Allowed
amount of such Claim is paid in full, and (z) remain subject to avoidance by the
applicable Reorganized Debtor under the Bankruptcy Code.
(b) Impairment. Classes 2-A through 2-D are not Impaired.
5.03. Classified Priority Claims (Classes 3-A through 3-D).
(a) Treatment. Each Holder of an Allowed Classified Priority Claim shall
receive, on account of such Claim, payment of the Allowed amount of such Claim
in full and in Cash to the extent that the Holder of such Allowed Classified
Priority Claim has not received payment of such Claim as of the Effective Date.
(b) Impairment. Classes 3-A through 3-D are not Impaired.
5.04. Prepetition Lender Deficiency Claims (Class 4-A).
(a) Allowance of Prepetition Lender Deficiency Claims. The Prepetition
Lender Claims shall be Allowed in the amount of $295,775,392 and the Prepetition
Lender Deficiency Claims shall be Allowed in the amount of $253,891,392.
(b) Treatment. Each Holder of an Allowed Prepetition Lender Deficiency
Claim shall receive, on account of such Claim, its Ratable Share of shares of
New Common Stock in an amount equal to the product of the Unsecured Claim Common
Stock Distribution Ratio and the sum of the Allowed Prepetition Lender
Deficiency Claims and the Allowed Subordinated Debenture Claims.
(c) Impairment. Class 4-A is Impaired.
5.05. General Unsecured Claims (Classes 5-A through 5-D).
(a) Class 5-A General Unsecured Claims.
(i) Treatment. Subject to the terms of Section 5.05(a)(ii), (iii) and (iv)
below, each Holder of an Allowed Class 5-A General Unsecured Claim shall receive
on account of such Claim, shares of New Common Stock in an amount equal to the
product of the Unsecured Claim Common Stock Distribution Ratio and the Allowed
amount of such Holder's Class 5-A General Unsecured Claim.
(ii) Effect of Returns under Section 546(g)*. If any Holder of a Class 5-A
General Unsecured Claim, or its predecessor in interest, received goods returned
by Camelot after the Petition Date for credit to the Class 5-A General Unsecured
Claim of such Holder pursuant to a 546(g)* Agreement, then the Allowed amount of
such Class 5-A General Unsecured Claim shall be reduced in accordance with the
applicable 546(g)* Agreement. The right of such Holder to receive any
distribution to be made under the Plan on account of such Class 5-A General
Unsecured Claim, as adjusted, shall not otherwise be increased, reduced,
impaired or affected by any such return of goods.
(iii) Effect of Allowance of Reclamation Claims. If a Holder of a Class 5-A
General Unsecured Claim, or its predecessor in interest, holds or has received
payment of a Reclamation Claim, such General Unsecured Claim shall be reduced by
the Allowed amount of such Reclamation Claim.
(iv) Eligible Supplier Exchange Option. Each Holder of a Class 5-A General
Unsecured Claim that is an Eligible Supplier shall have the right, exercisable
at its sole option by timely delivery of a Customary Trade Terms Commitment and
Option Exercise Notice, to exercise the Exchange Option. In order to exercise
the Exchange Option, such Eligible Supplier must deliver to Camelot and the Bank
Agent at least fifteen (15) days prior to the first scheduled date of the
Confirmation Hearing (unless Camelot and the Bank Agent waive such requirement)
a Customary Trade Terms Commitment and Option Exercise Notice duly executed by
such Eligible Supplier.
(v) Impairment. Class 5-A is Impaired.
(b) Classes 5-B and 5-C General Unsecured Claims.
(i) No Distribution. The Holders of Classes 5-B and 5-C General Unsecured
Claims shall receive no distribution under the Plan.
(ii) Impairment. Classes 5-B and 5-C are Impaired.
(c) Class 5-D General Unsecured Claims.
(i) Treatment. Each Holder of an Allowed Class 5-D General Unsecured Claim
shall receive, on account of such Claim, payment of the Allowed amount of such
Claim in Cash, or such other treatment in respect of such Claim as will cause
such Claim not to be Impaired.
(ii) Impairment. Class 5-D is not Impaired.
5.06. Subordinated Debenture Claims (Class 6-A).
(a) Allowance of Subordinated Debenture Claims. The Subordinated Debenture
Claims shall be Allowed in the amount of $58,490,487.
(b) Enforcement of Subordination Provisions. In accordance with and in
enforcement of the Subordination Provisions, all distributions that any Holder
of an Allowed Subordinated Debenture Claim would otherwise be entitled to
receive under the Plan on account of such Allowed Subordinated Debenture Claim
shall be delivered to the Holders of the Allowed Prepetition Lender Deficiency
Claims.
(c) No Distribution. The Holders of Subordinated Debenture Claims shall
receive no distribution under the Plan.
(d) Impairment. Class 6-A is impaired.
5.07. Interests (Classes 7-A through 7-D).
(a) Class 7-A Interests.
(i) No Distribution. The Holders of the Class 7-A Interests shall retain
such Interests, which shall be reinstated under the Plan, but shall not receive
any distribution under the Plan on account of such Class 7-A Interests.
(ii) Impairment. Class 7-A is not Impaired.
(b) Class 7-B and 7-C Interests.
(i) No Distribution. The Classes 7-B and 7-C Interests shall be cancelled
on the Effective Date, and the Holders of the Classes 7-B and 7-C Interests
shall not receive or retain any property under the Plan on account of their
Classes 7-B and 7-C Interests.
(ii) Impairment. Classes 7-B and 7-C are Impaired.
(c) Class 7-D Interests.
(i) No Distribution. The Holders of the Class 7-D Interests shall retain
such Interests, which shall be reinstated under the Plan, but shall not receive
any distribution under the Plan on account of such Class 7-D Interests.
(ii) Impairment. Class 7-D is not Impaired.
ARTICLE VI.
IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED AND NOT IMPAIRED BY THE
PLAN; ACCEPTANCE OR REJECTION OF THE PLAN
6.01. Acceptance by an Impaired Class of Creditors. Consistent with Section
1126(c) of the Bankruptcy Code, and except as provided in Section 1126(e) of the
Bankruptcy Code, an Impaired Class of Claims shall have accepted the Plan if the
Plan is accepted by the Holders of at least two-thirds in dollar amount and more
than one-half in number of the Allowed Claims of such Class that have timely and
properly voted to accept or reject the Plan.
6.02. Voting Classes. Prepetition Lender Secured Claims (Class 1-A),
Prepetition Lender Deficiency Claims (Class 4-A) and General Unsecured Claims
against Camelot (Class 5-A) are Impaired by the Plan, and only the Holders of
Allowed Claims in such Classes at the time the vote on the Plan is solicited
shall be entitled to vote to accept or reject the Plan.
6.03. Classes Not Receiving or Retaining Property Deemed to Reject the
Plan. General Unsecured Claims against CMH and GMG (Classes 5-B and 5-C),
Subordinated Debenture Claims (Class 6-A), and Interests in CMH and GMG (Classes
7-B and 7-C) are Impaired by the Plan and do not receive or retain any property
under the Plan. Under Section 1126(g) of the Bankruptcy Code, the Holders of
Claims and Interests in such Classes are deemed to reject the Plan, and the
votes of Holders in such Classes will not be solicited.
6.04. Unimpaired Classes Conclusively Presumed to Accept the Plan.
Miscellaneous Secured Claims (Classes 2-A through 2-D), Classified Priority
Claims (Classes 3-A through 3-D), General Unsecured Claims against Grapevine
(Class 5-D) and Interests in Camelot and Grapevine (Classes 7-A and 7-D) are not
Impaired by the Plan. Under Section 1126(f) of the Bankruptcy Code, such Classes
of Claims and Interests are conclusively presumed to accept the Plan, and the
votes of Holders in such Classes will not be solicited.
6.05. Confirmation Pursuant to Section 1129(b). If all of the applicable
requirements for Confirmation of the Plan are met as set forth in Section
1129(a) (1) through (13) of the Bankruptcy Code except subsection (a)(8)
thereof, the Debtors intend to request that the Bankruptcy Court confirm the
Plan pursuant to Section 1129(b) of the Bankruptcy Code, notwithstanding the
requirements of Section 1129(a)(8) thereof, on the basis that the Plan is fair
and equitable, and does not discriminate unfairly, with respect to each Class of
Claims or Interests that is impaired under, and has not accepted, the Plan.
ARTICLE VII.
UNEXPIRED LEASES AND EXECUTORY CONTRACTS
7.01. Assumption and Rejection. Except as otherwise provided in the Plan,
all executory contracts and unexpired leases that have not been assumed or
rejected by Camelot prior to the Confirmation Date and that are not the subject
of a motion to reject pending before the Bankruptcy Court on the Confirmation
Date shall be deemed assumed as of the date that the Confirmation Order becomes
a Final Order.
7.02. Assignment.
(a) Leases. Those unexpired leases of non-residential real property assumed
or deemed assumed by Camelot at any time during the pendency of the Chapter 11
Cases (and not otherwise assigned), as well as those non-residential real
property leases with respect to which a motion to assume is pending as of the
Confirmation Date, shall, on the Effective Date, be assigned (together with all
attendant leasehold improvements) to the respective New Regional Subsidiary
containing stores in the region in which the store subject to such lease is
located, unless prior to the Confirmation Date the Debtors elect that such lease
shall be assigned to another Person.
(b) Executory Contracts. Those executory contracts and unexpired leases of
personal property assumed or deemed assumed by Camelot at any time during the
pendency of the Chapter 11 Cases (and not otherwise assigned), as well as those
executory contracts and unexpired leases of personal property with respect to
which a motion to assume is pending as of the Confirmation Date, shall, on the
Effective Date, (i) be assigned to Camelot Distribution Co., Inc. and/or the New
Regional Subsidiaries to the extent provided in the Transfer Agreements, or (ii)
be retained as obligations of Reorganized Camelot to the extent that the
Transfer Agreements do not provide for the transfer of such executory contracts
and unexpired leases of personal property to Camelot Distribution Co., Inc. or
the New Regional Subsidiaries.
7.03. Cure of Defaults. As to any unexpired lease or executory contract
assumed pursuant to the Plan, Reorganized Camelot shall, pursuant to the
provisions of Section 1123(a)(5)(G) of the Bankruptcy Code, cure or provide
adequate assurance of a prompt cure of all defaults (except those specified in
Section 365(b)(2) of the Bankruptcy Code) existing under and pursuant to such
executory contract or lease by paying or demonstrating the ability to pay the
amount, if any, of such Assumption Claim. The Debtors shall file with the
Bankruptcy Court, and serve on the counter-party to each such executory contract
or unexpired lease, a schedule setting forth the amount of each Assumption Claim
at least fifteen (15) days prior to the date first scheduled for the
Confirmation Hearing. Any counterparty to an executory contract or unexpired
lease that does not agree with the amount of its Assumption Claim as scheduled
by the Debtors, may File an objection to the amount so scheduled by the Debtors
no later than two (2) days prior to the date first scheduled for the
Confirmation Hearing. If an objection to the amount of an Assumption Claim is so
Filed, the Assumption Claim shall be deemed a Disputed Claim, and the Bankruptcy
Court shall determine the amount actually due and owing in respect of the
Assumption Claim or shall approve any settlement of such Assumption Claim. Any
scheduled Assumption Claim with respect to which an objection is not timely
Filed will be paid on the Initial Distribution Date. Payment of any such
Assumption Claim shall cure and be in full satisfaction, release and discharge
of such Assumption Claim and all such defaults (including any other Claims Filed
by any such party as a result of such defaults).
7.04. Rejection Damages. Each Person that is a party to an executory
contract or unexpired lease that is rejected as of the Confirmation Date shall
File, not later than thirty (30) days after the Confirmation Date (unless an
earlier date has been established by the Bankruptcy Court for such claimant, in
which case such earlier date shall control), a proof of claim for damages
alleged to have arisen from the rejection of such executory contract or
unexpired lease, or be forever barred from asserting such a Claim against the
Debtors, the Reorganized Debtors, the New Regional Subsidiaries or Camelot
Distribution Co., Inc. Each Person that is party to an executory contract or
unexpired lease subject to a motion to reject that is pending before the
Bankruptcy Court on the Confirmation Date shall File, not later than thirty (30)
days after the date that the Bankruptcy Court approves such motion, a proof of
claim for damages alleged to have arisen from the rejection of such executory
contract or unexpired lease, or be forever barred from asserting such a Claim
against the Debtors, the Reorganized Debtors, the New Regional Subsidiaries or
Camelot Distribution Co., Inc.
ARTICLE VIII.
OPERATION AND MANAGEMENT
OF REORGANIZED DEBTORS
8.01. Corporate Governance; Directors and Officers. Except where otherwise
expressly provided in the Plan, the corporate governance of the Reorganized
Debtors, the New Regional Subsidiaries and Camelot Distribution Co., Inc. and
the election and appointment of the directors and officers of the Reorganized
Debtors, the New Regional Subsidiaries and Camelot Distribution Co., Inc. shall
be carried out in accordance with the respective articles of incorporation and
by-laws of the Reorganized Debtors, the New Regional Subsidiaries and Camelot
Distribution Co., Inc. and the laws of the respective states in which the
Reorganized Debtors, the New Regional Subsidiaries and Camelot Distribution Co.,
Inc. are incorporated.
8.02. Appointment of Directors; Retention of Officers. The initial board of
directors of Reorganized CMH as of the Effective Date shall be selected as
follows prior to the Confirmation Date: two (2) directors will consist of the
Chief Executive Officer and the Chief Financial Officer of Camelot, and five (5)
directors will be selected by the Prepetition Lenders (in consultation with the
Big Six Vendors) in their capacity as the Holders of a majority of the New
Common Stock as of the Effective Date. The tenure and manner of selection of
directors and officers of the Reorganized Debtors, the New Regional Subsidiaries
and Camelot Distribution Co., Inc. shall be as provided in the articles of
incorporation and by-laws of the Reorganized Debtors, the New Regional
Subsidiaries and Camelot Distribution Co., Inc., respectively. On the Effective
Date, the authority, power and incumbency of the persons then acting as
directors of the Debtors shall be terminated and such directors shall be deemed
to have resigned, and the directors of the Reorganized Debtors, the New Regional
Subsidiaries and Camelot Distribution Co., Inc. that are selected in accordance
with Sections 8.01 and 8.02 shall have responsibility for the management,
control and operations of Reorganized Camelot, the New Regional Subsidiaries and
Camelot Distribution Co., Inc. At least five (5) business days prior to the
Confirmation Hearing, the Debtors will file with the Bankruptcy Court a schedule
setting forth the names of the persons to be appointed as the directors of the
Reorganized Debtors, the New Regional Subsidiaries and Camelot Distribution Co.,
Inc. pursuant to this Section 8.02.
8.03. Option Plan. As of the Effective Date, a number of shares of New
Common Stock equal to 7.5% of the total number of shares of New Common Stock to
be authorized on the Effective Date pursuant to Section 10.02 of the Plan (i) in
respect of Class 1-A, Class 4-A, Class 5-A and Class 6-A Claims, whether then
Disputed or Allowed and (ii) in respect of the Qualified Option Plan, shall be
reserved for the Qualified Option Plan, and a number of shares of New Common
Stock shall be recorded under the Option Plan Account equal to 7.5% of the total
number of shares of New Common Stock (i) issued on the Effective Date in respect
of Allowed Claims and (ii) recorded on the Effective Date under the Option Plan
Account. In accordance with the Qualified Option Plan, options to purchase
shares recorded under the Option Plan Account shall be granted as of the
Effective Date to the employees of Reorganized Camelot listed in the Qualified
Option Plan. After the Effective Date, as further shares of New Common Stock are
issued in respect of Allowed Claims, the number of shares of New Common Stock
recorded under the Option Plan Account shall be adjusted so that at all times
the aggregate number of shares of New Common Stock recorded under the Option
Plan Account on and after the Effective Date shall equal 7.5% of the total
number of shares of New Common Stock (i) issued under the Plan and (ii) recorded
under the Option Plan Account. Additionally, after the Effective Date, as
further shares of New Common Stock are issued in respect of Allowed Claims,
outstanding options to purchase shares of New Common Stock recorded under the
Option Plan Account shall be appropriately adjusted by Reorganized Camelot such
that the potential proportionate interest in the total number of issued shares
of New Common Stock of each holder of such an option, if he were to exercise his
option and purchase all shares of New Common Stock subject thereto, will not be
diminished from the potential proportionate interest in the total number of
issued shares of New Common Stock of such holder if he were to have exercised
such option on the Effective Date and purchased all shares of New Common Stock
subject thereto. Such options shall be exercisable by the recipients thereof for
ten (10) years from the date of grant thereof. Such options granted on the
Effective Date (as such options are appropriately adjusted by Reorganized
Camelot with respect to shares recorded under the Option Plan Account after the
Effective Date to take account of additional Allowed Claims) shall have an
exercise price of $20.75 per share, subject to proportionate adjustment (as
described in the Qualified Option Plan) to the extent that the per share fair
market value of the New Common Stock has changed since the Effective Date due to
the issuance of additional shares in respect of Claims Allowed after the
Effective Date. Prior to the fourth anniversary of the Effective Date, with
respect to the options granted on the Effective Date to purchase shares of New
Common Stock recorded under the Option Plan Account on the Effective Date, in
order for such options to purchase the first 1/3 of the shares of New Common
Stock recorded under the Option Plan Account to become exercisable, the per
share fair market value (as defined in the Qualified Option Plan) of the New
Common Stock must exceed the per share exercise price of such options by more
than 15%; in order for such options to purchase the second 1/3 of the shares of
New Common Stock recorded under the Option Plan Account to become exercisable,
the per share fair market value (as defined in the Qualified Option Plan) of the
New Common Stock must exceed the per share exercise price of such options by
30%; and in order for such options to purchase the balance of the shares of New
Common Stock recorded under the Option Plan Account to become exercisable, the
per share fair market value (as defined in the Qualified Option Plan) of the New
Common Stock must exceed the per share exercise price of such options by 45%.
Notwithstanding any such increase in per share market value, as set forth more
fully in the Qualified Option Plan and the stock option award agreements
thereunder, such options shall not become exercisable for more than 50% of the
shares of New Common Stock recorded under the Option Plan Account prior to the
second anniversary of the Effective Date, and such options shall not become
exercisable for the balance of the shares of New Common Stock recorded under the
Option Plan Account sooner than the second anniversary of the Effective Date.
Notwithstanding anything else to the contrary, the exercisability of all such
options shall be accelerated upon the earlier to occur of (i) a Change in
Control or (ii) the fourth anniversary of the Effective Date.
ARTICLE IX.
MEANS FOR IMPLEMENTATION OF THE PLAN
9.01. Creation of New Subsidiaries; Transfer Agreements; Wall Asset
Purchase Agreement. On or prior to the Effective Date, the New Regional
Subsidiaries and Camelot Distribution Co., Inc. will be created and incorporated
under the DGCL. On the Effective Date, Camelot's non-residential real property
leases, together with all assets within the stores subject to such leases, and
all contracts and other obligations exclusively attendant to any store or group
of stores within a region controlled by a given New Regional Subsidiary, shall
be assigned to the respective New Regional Subsidiaries pursuant to the Transfer
Agreements. Also on the Effective Date, Camelot's real property and the
improvements thereon shall be transferred to Camelot Distribution Co., Inc.,
together with all the assets contained in Camelot's distribution center and all
the liabilities attendant to the operation of the distribution center, pursuant
to the Camelot Distribution Co. Transfer Agreement. Reorganized Camelot will
simultaneously enter into a lease with Camelot Distribution Co., Inc. pursuant
to which it shall lease its corporate headquarters from Camelot Distribution
Co., Inc. Furthermore, either Camelot Northeast Region, Inc. (if on or after the
Effective Date) or Grapevine (if prior to the Effective Date) may enter into and
perform the Wall Asset Purchase Agreement.
9.02. Operations Between the Confirmation Date and the Effective Date. The
Debtors shall continue to operate as debtors in possession, subject to the
supervision of the Bankruptcy Court, during the period from the Confirmation
Date through and until the Effective Date; provided, however, that nothing
herein shall preclude the Debtors from taking any steps that they deem necessary
or desirable to prepare for and effect the consummation of the Plan, including
the incorporation of the New Regional Subsidiaries and Camelot Distribution Co.,
Inc., the transfer of assets pursuant to the Transfer Agreements, and the
acquisition of substantially all of the assets of The Wall pursuant to the Wall
Asset Purchase Agreement.
9.03. Revesting and Transfer of Assets. The property of the Estates that is
not specifically disposed of pursuant to the Plan shall revest in the
Reorganized Debtors on the Effective Date, and Camelot, the New Regional
Subsidiaries and Camelot Distribution Co., Inc. shall enter into and perform the
Transfer Agreements and all ancillary documentation. Except as specifically
provided in the Plan or in the Confirmation Order, as of the Effective Date, the
Reorganized Debtors, the New Regional Subsidiaries and Camelot Distribution Co.,
Inc. may operate their businesses and may use, acquire, and dispose of property
free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the
Bankruptcy Court. As of the Effective Date, all property of the Reorganized
Debtors, the New Regional Subsidiaries and Camelot Distribution Co., Inc. shall
be free and clear of all Claims and Interests, except as specifically provided
in the Plan or in the Confirmation Order. The Reorganized Debtors, the New
Regional Subsidiaries and Camelot Distribution Co., Inc. shall not be liable or
responsible for any Claim against the Debtors or the Estates except as expressly
assumed by the Reorganized Debtors, the New Regional Subsidiaries and Camelot
Distribution Co., Inc. pursuant to the Plan. Without limiting the foregoing,
Reorganized Camelot may pay amounts that it incurs after the Effective Date for
professional fees and expenses without application to or approval by the
Bankruptcy Court.
9.04. Cancellation of Securities. On the Effective Date, the Prepetition
Loan Documents, including all notes and other instruments outstanding thereunder
or issued pursuant thereto and all related security documents, mortgages and
guarantees, the Subordinated Debentures, the 11% Senior Debentures, the 10%
Senior Debentures, the Subordinated Indenture, the 11% Indenture and the 10%
Indenture and all obligations of the Debtors or the Estates under or in respect
of any of the foregoing, and all the Class 7-B and 7-C Interests shall be
cancelled and discharged and fully satisfied by the Confirmation of the Plan and
the distributions to be made pursuant to the Plan.
9.05. Closing of Books Related to Cancelled Securities. On the Effective
Date, each of the respective transfer books maintained for the Cancelled
Securities shall be closed. Except for the right to receive the distributions,
if any, to be made pursuant to the Plan, the Holder of a Cancelled Security
shall have no rights arising from or relating to such Cancelled Security after
the Effective Date, including rights of subordination or subrogation that may be
construed to be inherent in or ancillary or related to such Cancelled Security.
9.06. Allowance of Claims Subject to Section 502(d). Allowance of Claims
shall be in all respects subject to the provisions of Section 502(d) of the
Bankruptcy Code, except that no Claim that is Allowed in an amount set forth in
the Plan shall be disallowed under Section 502(d) of the Bankruptcy Code.
9.07. Right of Setoff. Except for any Claim that is Allowed in an amount
set forth in the Plan, the Reorganized Debtors shall have the right to set off
against any Claim and the distributions to be made pursuant to the Plan in
respect of such Claim, any and all debts, liabilities and claims of every type
and nature whatsoever which the Estates or the Reorganized Debtors may have
against the Holder of such Claim, and neither any prior failure to do so nor the
allowance of such Claim, whether pursuant to the Plan or otherwise, shall
constitute a waiver or release of any such right of setoff.
ARTICLE X.
PROVISIONS COVERING DISTRIBUTIONS
10.01. Timing of Distributions. An initial distribution of property under
the Plan shall be made by the Disbursing Agent on the Initial Distribution Date.
Subsequent interim distributions may be made from time to time in the reasonable
discretion of the Disbursing Agent, but in no event less frequently than
annually. Furthermore, a final distribution of property shall be made by the
Disbursing Agent no later than 120 days from the date that all Disputed Claims
have been resolved in accordance with Article XI of the Plan.
10.02. New Common Stock. As of the Effective Date, Reorganized CMH shall be
authorized to issue the New Common Stock, including (i) in respect of Class 1-A
Claims, one share of New Common Stock for each $18.75 of Class 1-A Claims, (ii)
in respect of Class 4-A, Class 5-A and Class 6-A Claims, one share of New Common
Stock for each $47.95 of Class 4-A, Class 5-A and Class 6-A Claims (regardless
of whether any such Claims are then Disputed or Allowed), and (iii) in respect
of the Qualified Option Plan, additional shares of New Common Stock such that
the number of shares of New Common Stock reserved for issuance in respect of the
Qualified Option Plan equals 7.5% of the aggregate number of shares of New
Common Stock (i) authorized to be issued in respect of Class 1-A, Class 4-A,
Class 5-A and Class 6-A Claims and (ii) reserved for issuance in respect of the
Qualified Option Plan.
10.03. New Common Stock Distributions. Subject to the Exchange Option, on
the Initial Distribution Date, the Disbursing Agent shall (i) make distributions
of New Common Stock to Holders of Allowed Class 1-A, Class 4-A and Class 5-A
Claims as provided by Article V of the Plan, and (ii) record shares of New
Common Stock under the Option Plan Account as provided in Section 8.03 of the
Plan. Additional shares of New Common Stock shall be (i) issued and distributed
to the Holders of Allowed Class 4-A and Class 5-A Claims that were Disputed on
the Effective Date and (ii) recorded under the Option Plan Account, in the event
that any Class 4-A and Class 5-A Claims that were Disputed on the Effective Date
become Allowed Claims, so that at all times the aggregate number of shares of
New Common Stock (i) distributed to the Holders of Allowed Claims equals 92.5%
of the sum of the New Common Stock (a) issued under the Plan and (b) recorded
under the Option Plan Account, and (ii) recorded under the Option Plan Account
equals 7.5% of the sum of the New Common Stock (a) issued under the Plan and (b)
recorded under the Option Plan Account.
10.04. Fractional Shares. Fractional shares of New Common Stock shall not
be issued under the Plan. Whenever any distribution of a fraction of a share of
New Common Stock would otherwise be called for, the actual distribution made
shall reflect a rounding of such fraction to the nearest whole share (up or
down), with half shares being rounded down.
10.05. Administration of Exchange Option. The Disbursing Agent shall
administer the Exchange Option and, on the Initial Distribution Date, shall
reduce the Cash amount of the Secured Claim Distribution that would otherwise be
available under the Plan for the Holders of Allowed Prepetition Lender Secured
Claims by an amount of Cash equal to 50% of the amount of the Class 5-A General
Unsecured Claims tendered by Eligible Suppliers that have timely exercised the
Exchange Option (regardless of whether such tendered Class 5-A General Unsecured
Claims of Eligible Suppliers are then Disputed or Allowed). The amount of Cash
reduced shall be placed in an interest bearing account to the extent that such
Eligible Suppliers' Class 5-A General Unsecured Claims are Disputed as of the
Initial Distribution Date. The Disbursing Agent shall also, in accordance with
Article XI of the Plan, (i) withhold any electing Eligible Supplier's payment
from the Secured Claim Distribution until such time as such Eligible Supplier's
Class 5-A General Unsecured Claim becomes Allowed, and (ii) withhold all shares
of New Common Stock that would have otherwise been distributed under the Plan to
such Eligible Supplier on account of its Class 5-A General Unsecured Claim but
for its exercise of the Exchange Option. If and when an electing Eligible
Supplier's Class 5-A General Unsecured Claim becomes Allowed, the Disbursing
Agent shall (in accordance with Section 10.01 of the Plan) distribute to such
Eligible Supplier Cash from the Secured Claim Distribution in an amount equal to
50% of the Allowed Class 5-A General Unsecured Claim tendered by such Eligible
Supplier (together with interest accrued and paid), in accordance with the
Exchange Option, and shall distribute the shares of New Common Stock tendered by
such Eligible Supplier to the Holders of the Allowed Prepetition Lender Secured
Claims, based upon their Ratable Shares. Furthermore, if and to the extent a
Disputed Class 5-A General Unsecured Claim tendered by an Eligible Supplier is
disallowed or consensually reduced, the Disbursing Agent shall distribute to the
Holders of Allowed Prepetition Lender Secured Claims (in accordance with Section
10.01 of the Plan), based upon their Ratable Shares, additional amounts of Cash
or New Common Stock (in accordance with the Prepetition Lender Secured Claim
Option) from the Secured Claim Distribution equal to 50% of that portion of the
tendered Disputed Class 5-A General Unsecured Claim that was disallowed or
consensually reduced (together with interest accrued and paid with respect to
additional Cash distributions).
10.06. Fractional Dollars. Notwithstanding any other provision of the Plan,
payments of fractions of dollars shall not be made. Whenever any payment of a
fraction of a dollar under the Plan would otherwise be called for, the actual
payment made shall reflect a rounding of such fraction to the nearest whole
dollar (up or down), with half dollars being rounded down.
10.07. Compliance With Tax Requirements. In connection with each
distribution with respect to which the filing of an information return (such as
an Internal Revenue Service Form 1099 or 1042) or withholding is required, the
Reorganized Debtors shall file such information return with the Internal Revenue
Service and provide any required statements in connection therewith to the
recipients of such distribution or effect any such withholding and deposit all
moneys so withheld as required by law. With respect to any Person from whom a
tax identification number, certified tax identification number or other tax
information required by law to avoid withholding has not been received by the
Reorganized Debtors (or the Disbursing Agent), the Reorganized Debtors may, at
their option, withhold the amount required and distribute the balance to such
Person or decline to make such distribution until the information is received.
In any event, however, the Reorganized Debtors shall not be obligated to
liquidate New Common Stock to honor any withholding obligation.
10.08. Persons Deemed Holders of Registered Securities. Except as otherwise
provided herein, the Reorganized Debtors and the Disbursing Agent shall be
entitled to treat the record Holder of a registered security as the sole Holder
of the Claim or Interest in respect thereof for purposes of all notices,
payments or other distributions under the Plan. No notice of any transfer of any
such security shall be binding on the Reorganized Debtors or the Disbursing
Agent, unless such transfer has been properly registered in accordance with the
provisions of the governing indenture or agreement on or prior to the date on
which the Bankruptcy Court enters an Order approving the Disclosure Statement.
If there is any dispute regarding the identity of the Person entitled to any
payment or distribution in respect of any Claim under the Plan, no payment or
distribution need be made in respect of such Claim until such dispute has been
resolved by the parties or the Bankruptcy Court resolves the dispute pursuant to
a Final Order. Notwithstanding the foregoing, the Reorganized Debtors and the
Disbursing Agent shall be entitled to rely on the Bank Agent to determine the
Holders of the Prepetition Lender Claims.
10.09. Distribution of Unclaimed Property. Any claimant to whom a
distribution of property is made under the Plan that fails to claim such
property within one year following the distribution of such property by the
Disbursing Agent shall have its Claim expunged, and such property shall
irrevocably revert to the Reorganized Debtors, without regard to escheatment or
other similar laws.
ARTICLE XI.
RESOLUTION OF DISPUTED CLAIMS
11.01. Objections to Claims. Any party in interest may object to a Claim,
except a Claim that is Allowed as set forth in the Plan. Any such objection by a
party in interest other than the Debtors or the Reorganized Debtors must be
Filed and served no later than the date first scheduled for the Confirmation
Hearing. Objections to Claims, except Claims that are Allowed pursuant to the
Plan or as to which the Bankruptcy Court has set an earlier objection deadline,
may be Filed and served by the Debtors or the Reorganized Debtors on the later
of (a) the 30th day following the Effective Date, (b) 30 days after the filing
of the proof of claim setting forth such Claim, or (c) any later date set by
order of the Bankruptcy Court, which the Debtors or the Reorganized Debtors may
request on an ex parte basis.
11.02. Procedure. Unless otherwise ordered by the Bankruptcy Court, the
Debtors or the Reorganized Debtors shall litigate the merits of each Disputed
Claim until it is abandoned or otherwise withdrawn by the Holder, determined by
Final Order or compromised and settled by the Debtors or the Reorganized
Debtors, subject to any required approval of the Bankruptcy Court.
11.03. Estimation. In order to effectuate distributions pursuant to the
Plan and avoid undue delay in the administration of the Estates, the Debtors
(prior to the Effective Date) and the Reorganized Debtors (after the Effective
Date) shall have the right to seek an order of the Bankruptcy Court, after
notice and a hearing (which notice may be limited to the holder of such Disputed
Claim and which hearing may be held on an expedited basis), estimating a
Disputed Claim pursuant to Section 502(c) of the Bankruptcy Code.
ARTICLE XII.
DISCHARGE, RELEASE AND PRESERVATION OF CLAIMS
12.01. Discharge and Termination. Except for distributions under the Plan
and as otherwise provided in the Plan or in the Confirmation Order, on the
Effective Date, the Confirmation Order shall operate as a discharge, pursuant to
Section 1141(d)(1) of the Bankruptcy Code, and release of any and all debts (as
such term is defined in Section 101(12) of the Bankruptcy Code) of, and Claims
against, one or more of the Debtors that arose at any time before the
Confirmation Date, including, but not limited to, all principal and interest,
whether accrued before, on or after the Petition Date, regardless of whether (i)
a proof of claim in respect of such Claim has been Filed or deemed Filed, (ii)
such Claim has been Allowed pursuant to Section 502 of the Bankruptcy Code, or
(iii) the Holder of such Claim has voted on the Plan, or has voted to reject the
Plan. Without limiting the generality of the foregoing, on the Effective Date,
the Debtors shall be discharged from any debt that arose before the Confirmation
Date, and any debt of a kind specified in Section 502(g), 502(h) or 502(i) of
the Bankruptcy Code, to the full extent permitted by Section 1141(d)(1)(A) of
the Bankruptcy Code. Except as otherwise specifically provided herein, nothing
in the Plan shall be deemed to waive, limit or restrict in any manner the
discharge granted upon Confirmation of the Plan pursuant to Section 1141 of the
Bankruptcy Code.
12.02. Distributions in Complete Satisfaction. The distributions and rights
provided under the Plan shall be in complete satisfaction, discharge and
release, effective as of the Effective Date, of all Claims against and Interests
in the Debtors and the Estates and all liens upon any property of the Estates or
the Reorganized Debtors except for liens continuing pursuant to Section 5.02(a).
The Holders of liens satisfied, discharged and released under the Plan shall
execute any and all documentation reasonably requested by the Debtors or the
Reorganized Debtors evidencing the satisfaction, discharge and release of such
liens.
12.03. Injunction. The discharge and release provided in Section 12.01
shall also operate as an injunction restraining any Person from commencing or
continuing any action, suit or proceeding, or employing any process, or
otherwise acting, to collect, offset or recover any Claim discharged or released
under the Plan to the fullest extent authorized or provided by the Bankruptcy
Code, including Sections 524 and 1141 thereof. The Confirmation Order shall
constitute an injunction enjoining any Person from enforcing or attempting to
enforce any Cause of Action against any present or former director, officer,
employee, attorney, accountant, financial advisor, investment banker or agent of
any of the Debtors (but excluding any former officer or director of Camelot, GMG
or Grapevine who served in such capacity prior to November 12, 1993 who was not
an officer or director of Camelot, GMG or Grapevine as of the Petition Date)
based on, arising from or relating to, in whole or in part, any act, omission,
or other occurrence taking place on or prior to the Effective Date with respect
to or in any way relating to the Chapter 11 Cases, all of which Causes of Action
will be deemed released on the Effective Date.
12.04. Release by Debtors and Debtors in Possession. Pursuant to Section
1123(b)(3) of the Bankruptcy Code, on the Effective Date, the Debtors, in their
individual capacities and as Debtors in Possession, for and on behalf of the
Estates, shall release and discharge the following:
(a) Certain Bankruptcy-Related Causes of Action. Any and all Causes of
Action existing as of the Effective Date that may be asserted against (i)
any Eligible Supplier that timely executes a Customary Trade Terms
Commitment and Option Exercise Notice or (ii) the Prepetition Lenders by
any of the Debtors or Debtors in Possession, including, without limitation,
Causes of Action under Sections 510, 542, 544, 545, 546, 547, 548, 549, 550
and 553 of the Bankruptcy Code or under similar state laws; and
(b) Other Causes of Action. Any and all Causes of Action existing as
of the Effective Date against any present or former directors, officers,
employees, attorneys, accountants, financial advisors, investment bankers,
or agents of or acting for the Debtors or the Estates, all members of the
Committee in their capacity as Committee members, the Prepetition Lenders,
any Eligible Supplier that timely executes a Customary Trade Terms
Commitment and Option Exercise Notice, and all professionals retained by
the Committee or any such Person (but excluding any former officer or
director of Camelot, GMG or Grapevine who served in such capacity prior to
November 12, 1993 who was not an officer or director of Camelot, GMG or
Grapevine as of the Petition Date) (each a "Released Person") in any manner
arising from, based on or relating to, in whole or in part, the subject
matter of, or the transaction or event giving rise to, any Claim or
Interest that is treated in the Plan, the business or contractual
arrangements between any Debtor and any Released Person, the restructuring
of Claims and Interests prior to or in the Chapter 11 Cases, or any act,
omission, occurrence or event in any manner related to any such Claim,
Interest, restructuring or the Chapter 11 Cases.
The Reorganized Debtors, the New Regional Subsidiaries and Camelot Distribution
Co., Inc. shall be bound, to the same extent the Debtors are bound, by all of
the releases set forth above.
12.05. Release by Holders of Claims and Interests. Each Person who votes to
accept the Plan or that accepts any distribution on its Claim made pursuant to
the Plan (a "Release Obligor") shall be presumed conclusively to have
absolutely, unconditionally, irrevocably and forever, released and discharged
the Debtors, the Estates, the Reorganized Debtors, the New Regional Subsidiaries
and Camelot Distribution Co., Inc., each Released Person, and any Person that
may be liable derivatively through any of the foregoing, from any Claim or Cause
of Action existing as of the Effective Date arising from, based on or relating
to, in whole or in part, the subject matter of, or the transaction or event
giving rise to, the Claim or Interest of such Release Obligor, any act,
omission, occurrence or event in any manner related to such subject matter,
transaction or event, the Chapter 11 Cases, or the business or contractual
arrangements between any Release Obligor and any Debtor, except for the
obligations of the Debtors, the Reorganized Debtors, the New Regional
Subsidiaries and Camelot Distribution Co., Inc. expressly set forth therefor in
the Plan. The Confirmation Order shall constitute an injunction enjoining any
Release Obligor from attempting to enforce any Claim or Cause of Action
described in the immediately preceding sentence against any Person receiving a
release pursuant to the immediately preceding sentence.
12.06. Exculpation. Neither the Debtors, the Estates, the Reorganized
Debtors, the New Regional Subsidiaries nor Camelot Distribution Co., Inc., nor
any present officer, director, employee, agent, attorney, accountant, investment
banker or financial advisor to any of them, shall be obligated in any manner
under the Plan or in respect or by reason of the filing, negotiation,
prosecution, Confirmation, consummation or implementation of the Plan or the
attempted restructuring of the indebtedness of the Debtors prior to the Petition
Date or any action taken or not taken in connection therewith, or shall have or
incur any liability to any Holder of a Claim or Interest or any other Person in
respect of any such matters or any information provided or statement made in the
Disclosure Statement or omitted therefrom, except that (i) the Debtors, the
Reorganized Debtors, the New Regional Subsidiaries and Camelot Distribution Co.,
Inc. shall fulfill the obligations expressly set forth therefor in the Plan and
(ii) each Person shall remain liable, to the extent provided by law, for its own
willful misconduct or gross negligence as determined pursuant to a Final Order.
Each such Person shall be entitled to rely upon the advice of counsel with
respect to its duties and responsibilities under the Plan and shall be fully
protected in acting or in refraining from acting in accordance with such advice
or in any manner approved or ratified by the Bankruptcy Court.
12.07. Indemnification Obligations.
(a) Termination of Indemnification Obligations. Except as set forth in
Section 12.07(b), all obligations of the Debtors or the Estates to indemnify, or
to pay contribution or reimbursement to, any of its present or former directors,
officers, agents, employees and representatives or any Holder of a Claim or
Interest treated in the Plan (other than those indemnification obligations under
any Assumed Lease), or any trustee or agent acting for any such Holder, or any
person in any manner engaged, employed or indemnified in connection with the
issuance or sale of any Cancelled Securities or any agent, attorney, accountant,
financial advisor, investment banker, employee or representative or any heirs,
representatives, successors or assigns of any indemnified person, that may be
outstanding, accrued or existing, or might reasonably have been asserted, on the
Confirmation Date (whether pursuant to articles of incorporation, by-laws,
contractual obligations or any applicable law or otherwise) in respect of any
past, present or future action, suit or proceedings shall be discharged under
the Plan, and all undertakings and agreements for or relating to any such
indemnification, contribution or reimbursement are hereby rejected and
terminated.
(b) Limited Continuing Indemnification. No obligation of any of the
Debtors, whether arising pursuant to law or its articles of incorporation or
by-laws or by contract or otherwise, to indemnify, or to pay contribution or
reimbursement to, any individual who served as a director or officer of the
Debtors at any time during the Chapter 11 Cases shall be (i) discharged or
impaired under the Plan, (ii) subordinated under Section 510 of the Bankruptcy
Code or otherwise, or (iii) disallowed. Any such obligation that, under the
Bankruptcy Code, has the priority of an Administrative Expense Claim shall be
entitled to such priority. No proof of claim shall be required to preserve any
such obligation. The Reorganized Debtors shall assume and agree to pay all such
obligations and further, shall defend, indemnify and hold harmless each such
individual from and against all related claims, damages, losses, liabilities,
costs and expenses (including the reasonable fees and disbursements of legal
counsel selected and employed by such indemnified person, whether or not suit is
brought); provided, however, that, in addition to any other existing limitation
on such indemnity, no individual shall be indemnified in respect of any claim,
damages, liability, loss, cost or expense that is finally determined by a court
of competent jurisdiction to have been caused by such individual's own willful
misconduct or gross negligence.
12.08. Preservation of Insurance. The Debtors' discharge provided in the
Plan shall not diminish or impair the enforceability of any insurance policies
that may cover claims against the Debtors or any other Person. Additionally, the
Debtors' discharge provided in the Plan will not impair the continuation of
workers' compensation programs in effect, including self-insurance programs.
12.09. Subordination. Distributions under the Plan take into account the
relative priorities of the Claims and Interests in each Class in connection with
any and all contractual, legal or equitable subordination provisions or rights
relating thereto. Accordingly, (i) any distributions under the Plan shall be
received and retained free of and from any obligations to hold or transfer the
same to any other creditor, and shall not be subject to levy, garnishment,
attachment or other legal process by any Holder by reason of claimed contractual
subordination rights, and (ii) the Confirmation Order shall constitute an
injunction enjoining any Person from enforcing or attempting to enforce any
contractual, legal or equitable subordination rights to property distributed
under the Plan, in each case other than as provided in the Plan.
ARTICLE XIII.
CONDITIONS TO CONSUMMATION OF THE PLAN
13.01. Conditions. The Plan shall not become effective, the Effective Date
shall not occur, and no obligations and rights set forth in the Plan as of the
Effective Date or thereafter shall come into existence, unless each of the
following conditions is met or waived by the Debtors (with the consent of the
Bank Agent with respect to subsections (g) and (h) of this Section 13.01 and the
consent of the co-chairs of the Committee with respect to subsection (f) of this
Section 13.01) on or before the Effective Date:
(a) Confirmation Order. The Confirmation Order shall have been entered
and shall have become a Final Order.
(b) Reorganized Debtors. The articles of incorporation and by-laws of
the Reorganized Debtors shall have been amended to the extent necessary to
effect or permit each of the transactions contemplated in the Plan.
(c) Funding under New Working Capital Facility. The Reorganized
Debtors and/or any New Regional Subsidiary or Camelot Distribution Co.,
Inc. and a lender or lenders shall have entered into the New Working
Capital Facility Agreement, and all conditions to closing set forth in such
agreement shall have been satisfied or waived, subject to the actions to be
taken under the Plan on the Effective Date.
(d) Delivery of Documents. All documents required to be delivered
under the Plan and under the Transfer Agreements on or prior to the
Effective Date shall have been executed and delivered by the parties
thereto.
(e) Approval of Corporate Action. The Bankruptcy Court shall have
entered an order (contemplated to be part of the Confirmation Order)
authorizing and directing the Debtors, the Reorganized Debtors, the New
Regional Subsidiaries and Camelot Distribution Co., Inc. to take all
actions necessary or appropriate to enter into, implement and consummate
the contracts, instruments, releases, indentures and other agreements or
documents created or adopted in connection with the Plan.
(f) Customary Trade Terms. Each of the Big Six Vendors shall have
provided Camelot with a Customary Trade Terms Commitment and Option
Exercise Notice.
(g) Allowance of Prepetition Lender Claims. The Prepetition Lender
Claims shall be Allowed in the amount of $295,775,392, the Prepetition
Lender Secured Claims shall be Allowed in the amount of $41,884,000, and
the Prepetition Lender Deficiency Claims shall be Allowed in the amount of
$253,891,392.
(h) Allowance of Subordinated Debenture Claims. The Subordinated
Debenture Claims shall be Allowed in the amount of $58,490,487 and the Plan
will provide for the enforcement of the Subordination Provisions.
13.02. Consummation. The Plan shall become effective, and the Effective
Date shall occur, when the conditions set forth in Section 13.01 are met or
waived as provided therein. The Reorganized Debtors shall thereupon perform the
obligations required under the Plan to be performed by them on the Effective
Date. The filing with the Bankruptcy Court of a certificate of a responsible
officer of the Reorganized Debtors to the effect that the conditions in Section
13.01 have been met or waived and that the Reorganized Debtors have
substantially performed the obligations required under the Plan to be performed
by them on the Effective Date shall establish conclusively that the Plan has
been substantially consummated.
ARTICLE XIV.
RETENTION OF JURISDICTION
14.01. Jurisdiction of Bankruptcy Court. Notwithstanding the entry of the
Confirmation Order or the Effective Date having occurred, the Bankruptcy Court
will retain jurisdiction of the Chapter 11 Cases for the following purposes:
(a) To hear and determine any and all pending applications for the
rejection, assumption or assignment of executory contracts and leases, any
objections to Claims resulting therefrom, and the allowance of any Claims
resulting therefrom;
(b) To hear and determine any and all applications, adversary
proceedings, contested matters and other litigated matters pending on the
Effective Date or permitted to be commenced thereafter under the Bankruptcy
Code and the Bankruptcy Rules;
(c) To ensure that the distributions to Holders of Allowed Claims are
accomplished as provided herein;
(d) To hear and determine any objections to Claims Filed both before
and after Confirmation; to allow or disallow, in whole or in part, any
Disputed Claim; and to hear and determine other issues presented by or
arising under the Plan;
(e) To enter and implement such orders as may be appropriate in regard
to the Confirmation Order and the Plan;
(f) To hear and determine all applications of professionals for
compensation and reimbursement of expenses under Sections 330, 331 or
503(b) of the Bankruptcy Code;
(g) To hear the Debtors' or the Reorganized Debtors' application, if
any, to modify the Plan in accordance with Section 1127 of the Bankruptcy
Code (after Confirmation, the Debtors or the Reorganized Debtors may also,
so long as they do not adversely affect the interest of Holders of Allowed
Claims, institute proceedings in the Bankruptcy Court to remedy any defect
or omission or reconcile any inconsistencies in the Plan or Confirmation
Order, in such manner as may be necessary to carry out the purposes and
effects of the Plan);
(h) To hear and determine disputes arising in connection with the
interpretation of the Plan or its implementation, including disputes among
Holders of Allowed Claims and disputes arising under any other agreements,
documents or instruments executed in connection with the Plan;
(i) To construe and to take any action to enforce the Plan and issue
such orders and injunctions as may be necessary for the consummation and
implementation of the Plan;
(j) To determine such other matters and for such purposes as may be
provided in the Confirmation Order;
(k) To hear and determine any motions or contested matters involving
taxes, tax refunds, tax Claims, tax attributes and tax benefits and similar
or related matters, with respect to the Debtors or the Estates arising on
or prior to the Effective Date or relating to the period of administration
of the Chapter 11 Cases or the Plan;
(l) To hear and determine any other matters related hereto and not
inconsistent with Chapter 11 of the Bankruptcy Code; and
(m) To enter a final decree closing the Chapter 11 Cases.
14.02. Exception to Jurisdiction of Bankruptcy Court. Notwithstanding
anything contained in the Plan to the contrary, the Bankruptcy Court shall not
retain jurisdiction over matters relating exclusively to the enforcement of
rights and remedies under the New Working Capital Facility or otherwise arising
solely under the New Working Capital Facility.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
15.01. Binding Effect of the Plan. The provisions of the Plan shall be
binding upon and inure to the benefit of the Debtors, the Estates, the
Reorganized Debtors, the New Regional Subsidiaries, Camelot Distribution Co.,
Inc., any Holder of any Claim or Interest treated herein, and each of their
respective predecessors, successors, assigns, agents, officers and directors
and, to the fullest extent permitted under Section 1141(a) of the Bankruptcy
Code and other applicable law, each other Person affected by the Plan.
15.02. Nonvoting Stock. In accordance with Section 1123(a)(6) of the
Bankruptcy Code, the amended articles of incorporation of the Reorganized
Debtors and the articles of incorporation of the New Regional Subsidiaries and
Camelot Distribution Co., Inc. shall contain provisions prohibiting the issuance
of nonvoting equity securities by the Reorganized Debtors, the New Regional
Subsidiaries and Camelot Distribution Co., Inc., respectively.
15.03. Authorization of Corporate Action. The entry of the Confirmation
Order shall constitute authorization for the Debtors and the Reorganized Debtors
to take or cause to be taken all corporate actions necessary or appropriate to
consummate and implement the provisions of the Plan prior to, on and after the
Effective Date, and all such actions taken or caused to be taken shall be deemed
to have been authorized and approved by the Bankruptcy Court. All such actions
shall be deemed to have occurred and shall be in effect pursuant to applicable
nonbankruptcy law and the Bankruptcy Code, without any requirement of further
action by the stockholders or directors of the Debtors or the Reorganized
Debtors. On the Effective Date, the appropriate officers and directors of the
Debtors and the Reorganized Debtors are authorized and directed to execute and
deliver the agreements, documents and instruments contemplated by the Plan in
the name and on behalf of the Debtors and the Reorganized Debtors.
15.04. Listing of Stock. CMH or Reorganized CMH shall use its reasonable
best efforts to cause the New Common Stock to be listed or admitted to trading
on the NASDAQ or another nationally recognized securities exchange.
15.05. Retiree Benefits. On and after the Effective Date, the Reorganized
Debtors shall continue to pay any retiree benefits, as that term is defined in
Section 1114(a) of the Bankruptcy Code, to the extent required by Section
1129(a)(13) of the Bankruptcy Code, without prejudice to the Reorganized
Debtors' rights under applicable nonbankruptcy law to modify, amend or terminate
the foregoing arrangements.
15.06. Withdrawal of the Plan. The Debtors reserve the right, at any time
prior to the entry of the Confirmation Order, to revoke or withdraw the Plan. If
they do so, the Plan shall be null and void. If the Debtors revoke or withdraw
the Plan without the consent of the Committee, the Debtors' exclusive periods to
file a plan of reorganization and to solicit acceptances thereto under Section
1121 of the Bankruptcy Code shall be automatically terminated on the date of
such revocation or withdrawal, as to the Committee only, without further order
of the Bankruptcy Court.
15.07. Final Order. Except as otherwise expressly provided in the Plan, any
requirement in the Plan for a Final Order may be waived by the Debtors or, after
the Effective Date, the Reorganized Debtors upon written notice to the
Bankruptcy Court. No such waiver shall prejudice the right of any party in
interest to seek a stay pending appeal of any order that is not a Final Order.
15.08. Notice. All notices required to be given to the Debtors under the
Plan, if any, shall be in writing and shall be sent by first class mail, postage
prepaid, or by overnight courier to:
Camelot Music, Inc.
8000 Freedom Avenue, N.W.
North Canton, Ohio 44720
Attn: Jack K. Rogers
Tel: (330) 494-2282
with copies to:
White & Case
1155 Avenue of the Americas
New York, New York 10036
Attn: Howard S. Beltzer
Evan C. Hollander
Michael C. O'Sullivan
Tel: (212) 819-8200
and
Young, Conaway, Stargatt & Taylor
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
Attn: James L. Patton, Jr.
S. David Peress
Tel: (302) 571-6600
Any of the above may, from time to time, change its address for future notices
and other communications hereunder by filing a notice of the change of address
with the Bankruptcy Court. Any and all notices given under the Plan shall be
effective when received.
15.09. Dissolution of Committee. When the Plan becomes effective as set
forth in Section 13.02, the Committee shall cease to exist and its members and
professional advisors shall be released and discharged from all further
authority, duties, responsibilities and obligations relating to, arising from or
in connection with the Chapter 11 Cases.
15.10. Amendments and Modifications. The Debtors or the Reorganized
Debtors, with the consent of the Committee, may modify the Plan both before and
after Confirmation in accordance with the provisions of Section 1127 of the
Bankruptcy Code.
15.11. Time. Unless otherwise specified herein, in computing any period of
time prescribed or allowed by the Plan, the day of the act or event from which
the designated period begins to run shall not be included. The last day of the
period so computed shall be included, unless it is not a Business Day, in which
event the period runs until the end of the next succeeding day that is a
Business Day.
15.12. Section 1145 Exemption. To the fullest extent permitted under
Section 1145 of the Bankruptcy Code, the offer or sale under the Plan of the New
Common Stock and the options for the purchase of New Common Stock, and any
transactions by a stockbroker complying with Section 1145(a)(4) of the
Bankruptcy Code in such securities, shall be and are exempt from the
registration requirements of Section 5 of the Securities Act of 1933, as
amended, and any state or local law requiring registration for offer or sale of
a security or registration or licensing of an issuer of, underwriter of, or
broker or dealer in, such securities. The offer and sale of the New Common Stock
and the options for the purchase of New Common Stock under the Plan are deemed
to be a public offering of the New Common Stock and the options for the purchase
of New Common Stock. Certain Holders of New Common Stock who, due to the
magnitude of their holdings as of the Effective Date, may be deemed
"underwriters" pursuant to Section 1145(b) of the Bankruptcy Code, will become
parties with Reorganized CMH to a registration rights agreement affording them
certain limited registration and other rights, all as more fully set forth
therein.
15.13. Section 1146 Exemption. To the fullest extent permitted under
Section 1146(c) of the Bankruptcy Code, the issuance, transfer or exchange of
any security under the Plan, or the execution, delivery or recording of an
instrument of transfer under the Plan, or the revesting, transfer or sale of any
real or other property of or to the Debtors, the Reorganized Debtors, the New
Regional Subsidiaries or Camelot Distribution Co., Inc. under the Plan
(including, without limitation, the transfer of property in accordance with the
Transfer Agreements and the Wall Asset Purchase Agreement), shall not be taxed
under any state or local law imposing a stamp tax, transfer tax or similar tax
or fee. Consistent with the foregoing, each recorder of deeds or similar
official for any county, city or governmental unit in which any instrument
hereunder is to be recorded shall, pursuant to the Confirmation Order, be
ordered and directed to accept such instrument, without requiring the payment of
any documentary stamp tax, deed stamps, stamp tax, transfer tax, mortgage
recording tax, intangible tax or similar tax.
Wilmington, Delaware
November 7, 1997
CM HOLDINGS, INC.
Debtor and Debtor in Possession
By: /s/ Jack K. Rogers
----------------------
Jack K. Rogers
Executive Vice President and
Chief Financial Officer
CAMELOT MUSIC, INC.
Debtor and Debtor in Possession
By: /s/ Jack K. Rogers
----------------------
Jack K. Rogers
Executive Vice President and
Chief Financial Officer
G.M.G. ADVERTISING, INC.
Debtor and Debtor in Possession
By: /s/ Jack K. Rogers
----------------------
Jack K. Rogers
Executive Vice President and
Chief Financial Officer
GRAPEVINE RECORDS AND TAPES, INC.
Debtor and Debtor in Possession
By: /s/ Jack K. Rogers
----------------------
Jack K. Rogers
Executive Vice President and
Chief Financial Officer
White & Case
1155 Avenue of the Americas
New York, New York 10036
(212) 819-8200
Howard S. Beltzer (HSB-5721)
Evan C. Hollander (ECH-0191)
Michael C. O'Sullivan (MCO-2355)
and
Young, Conaway, Stargatt & Taylor
11th Floor - Rodney Square North
P.O. Box 391
Wilmington, Delaware 19899
(302) 571-6600
James L. Patton, Jr. (No. 2022)
S. David Peress (No. 2679)
Co-Counsel for Debtors and
Debtors in Possession