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EXHIBIT 2.1
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IN THE UNITED STATES BANKRUPTCY
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
IN RE: * Case No. 96-69563
*
TAPISTRON INTERNATIONAL, INC., * CHAPTER 11
*
Debtor. * JUDGE MASSEY
*
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FIRST AMENDED AND RESTATED
PLAN OF REORGANIZATION OF
TAPISTRON INTERNATIONAL, INC.
Tapistron International, Inc., a Georgia corporation ("DEBTOR"),
proposes the following First Amended and Restated Plan of Reorganization
("Plan") pursuant to the provisions of Chapter 11 of the Bankruptcy Code, 11
U.S.C. Sec. 101, et seq. (the "BANKRUPTCY CODE").
ARTICLE 1
DEFINITIONS
As used in this Debtor's Plan, the following terms shall have the
respective meanings set forth below, and, unless the context requires
otherwise, such meanings shall be equally applicable to the singular and plural
forms of the terms defined. Unless otherwise defined herein, the terms used in
this Debtor's Plan shall have the same meaning ascribed thereto in the
Bankruptcy Code and the Bankruptcy Rules.
1.1 "ADMINISTRATIVE CLAIM" means any Allowed Claim for payment of
any cost or expense of administration of this Bankruptcy Case that has been
allowed pursuant to Sections 503(b) and 507(a)(1) as entitled to priority under
the Bankruptcy Code.
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1.2 "ALLOWED CLAIM" means any Claim: (a) based on an application
of a Professional Person to the extent such application is approved by a Final
Order; (b) allowed under this Debtor's Plan; or (c) proof of which was either
timely and properly filed, deemed filed under applicable law or by reason of an
order of the Court or, if no proof of claim was filed or order entered, which
has been or hereafter is listed by the Debtor on its schedules filed under
Section 521(1) of the Bankruptcy Code as liquidated in amount and not disputed
or contingent, provided that a timely filed proof of claim shall supersede any
scheduling of such Claim, and, in either case, a Claim as to which (i) no
objection to the allowance thereof has been within any applicable period of
limitation as may be fixed by the Bankruptcy Code or by an order of the Court,
or (ii) any such objection has been withdrawn pursuant to the provisions of
this Debtor's Plan or has been overruled by a Final Order of the Court.
1.3 "ALLOWED SECURED CLAIM" means that portion of an Allowed Claim
equal to the value, as filed or as determined by the Bankruptcy Court pursuant
to Section 506(a) of the Bankruptcy Code and Rule 3012 of the Bankruptcy Rules,
of the interest of the holder of the Allowed Secured Claim in the property of
the Debtor or of the estate securing such Allowed Claim.
1.4 "ASSETS" means all real and personal property of the Debtor on
the Effective Date including, without limitation, cash and the Causes of Action
of the Debtor.
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1.5 "BANKRUPTCY CASE" or "CASE" means this Chapter 11
reorganization case commenced by the filing of a voluntary petition by the
Debtor on June 21, 1996, bearing Case No. 96-69563,now pending in the Court.
1.6 "BANKRUPTCY CODE" means Title 11 of the United States Code.
1.7 "CAUSES OF ACTION" means all claims of the Debtor against
third parties, including, but not limited to, actions for avoidance of
transfers pursuant to Sections 544, 545, 546, 547, 548, 549, and 550 of the
Bankruptcy Code.
1.8 "CLAIM" means a right to payment or to an equitable remedy as
set forth in Section 101(4) of the Bankruptcy Code.
1.9 "CLAIMANT" means the holder of a Claim.
1.10 "CLASS" means a category of holders of Claims as defined in
Section 1122 of the Bankruptcy Code.
1.11 "CONFIRMATION" and "CONFIRMATION DATE" shall refer to the date
of entry of a Final Order confirming this Debtor's Plan pursuant to Section
1129 of the Bankruptcy Code.
1.12 "CONTESTED CLAIM" shall mean a claim (or portion thereof)
which is a Disputed Claim or for which: (a) a proof of claim was or is deemed
filed under applicable law or order of the Bankruptcy Court; (b) an objection
was or is deemed to be timely filed; and (c) such objection is not: (i)
withdrawn or resolved by stipulation with the Debtor pursuant to the Claims
Order or (ii) determined in whole or part by a Final Order. For purposes of
the Debtor's Plan, a Claim shall be considered a Contested Claim, in
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whole or in part, as applicable; before the time that an objection is filed,
but only until the expiration of the time for filing objections to claims, if:
(x) the amount or classification of the Claim specified in the proof of claim
exceeds the amount of or differs in classification from any corresponding Claim
scheduled by the Debtor in its Schedules in the case; (y) any corresponding
Claim scheduled by the Debtor is scheduled as disputed, contingent or
unliquidated; or (z) no corresponding Claim is scheduled by the Debtor in its
Schedules for the Case.
1.13 "CONVENIENCE CLAIM" shall mean an Unsecured Claim against the
Debtor in the amount of $1,200 or less and any Unsecured Claim against the
Debtor in excess of $1,200 that is reduced to $1,200 by election of the holder
thereof; provided that, for purposes hereof, all such Unsecured Claims held by
an entity or by any entity and any affiliate of an entity shall be aggregated
and treated as one such Unsecured Claim; and provided further that, for
purposes hereof, if all or any part of an Unsecured Claim was or is assigned,
the Unsecured Claims held by all assignees of such Unsecured Claim shall be
treated as one such Unsecured Claim.
1.14 "COURT" means the United States Bankruptcy Court for the
Northern District of Georgia.
1.15 "CREDITOR" means a Claimant that is the holder of: (a) a Claim
against the Debtor that arose on or before the Petition Date; (b) a Claim
against the Debtor's estate of the kind specified in Sections 502(g), 502(h) or
502(i) of the Bankruptcy Code; or (c) an Administrative Claim.
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1.16 "CULBRETH LOAN DOCUMENTS" means the documents and instruments
as amended from time to time evidencing and securing the loan made or credited
extended by Robert E. Culbreth to Debtor prior to commencement of Debtor's
Chapter 11 case. The documents include a UCC Financing Statement filed as No.
###-##-#### on November 11, 1995, in Catoosa County, Georgia.
1.17 "DEBTOR" means Tapistron International, Inc., a Georgia
corporation, and to the extent applicable, includes the said corporation in its
status as a debtor in possession under Sections 1101 and 1107 of the Bankruptcy
Code.
1.18 "DEBTOR'S PLAN" means this Plan of Reorganization and any
modifications or amendments thereto.
1.19 "DEMOSS LOAN DOCUMENTS" means the documents and instruments as
amended from time to time evidencing and securing the loan made or credited
extended by The Arthur S. DeMoss Foundation to Debtor prior to commencement of
Debtor's Chapter 11 case. The documents include an Addendum to Security
Agreement dated August (no day), 1996 that references a security agreement dated
July (no day), 1996.
1.20 "DISBURSING AGENT" means the individual or entity appointed by
agreement of the Debtor and the Creditors' Committee on or before the
Confirmation Date or in the absence of an agreement such individual or entity
appointed by the Court for the purposes of making disbursements to Class 7
creditors pursuant to Section 3.7 of the Plan and administering the Debtor's
obligations pursuant to Section 3.7 of the Plan.
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1.21 "DISPUTED CLAIM" means any Claim that has been scheduled by
the Debtor as contingent, unliquidated or disputed, or with respect to which an
objection has been interposed in accordance with the Bankruptcy Code, the
Bankruptcy Rules, this Debtor's Plan or an order of the Bankruptcy Court.
1.22 "DISTRIBUTION DATE" shall mean the date that is as soon as
practicable on or after the later of (a) the Effective Date or (b) the date
upon which the Claim becomes an Allowed Claim or Allowed Administrative Claim;
and for other purposes, the date the initial distributions are made to holders
of Allowed Claims under the Plan.
1.23 "EFFECTIVE DATE" means the eleventh (11th) day after entry of
Order confirming the Debtor's Plan with no appeal pending and all applicable
appeal periods having expired.
1.24 "FACILITY" means the Debtor's office and manufacturing plant
on Alabama Highway in Ringold, Georgia.
1.25 "FINAL ORDER" means an order as to which any appeal that has
been or may be taken has been resolved or as to which the time for appeal has
expired and no appeal has been taken.
1.26 "LANDAV LOAN DOCUMENTS" means the documents and instruments as
amended from time to time evidencing and securing the loan made or credited
extended by Landav, Inc. to Debtor prior to commencement of Debtor's Chapter 11
case. The documents include a UCC Financing Statement filed as No. 023-95-939
on August 24, 1995 in Catoosa County, Georgia and a UCC Financing Statement
filed
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as No. 023-96-704 on June 3, 1996, in Catoosa County, Georgia, which references
a security agreement dated July 16, 1996.
1.27 "PETITION DATE" means June 21, 1996, the date on which the
voluntary petition in this Bankruptcy Case was filed.
1.28 "PARKER LOAN DOCUMENTS" means the documents and instruments as
amended from time to time evidencing and securing the loan made or credit
extended by Albert N. Parker to Debtor prior to commencement of Debtor's
Chapter 11 case. The documents include a UCC Financing Statement filed as No.
023-95-397 on August 24, 1995, in Catoosa County, Georgia.
1.29 "PROFESSIONAL PERSONS" means any person or entity employed or
engaged by the Debtor and entitled to compensation pursuant to Section 326,
327, 328, 330, 331, 503(b) or 1103 of the Bankruptcy Code.
1.29 "REORGANIZED DEBTOR" shall mean the Debtor following
Confirmation of the Debtor's Plan.
1.30 "SECURED CLAIM" means a Claim which is secured by property of
the Debtor or of the estate.
1.31 "UNSECURED CLAIM" means a Claim against the Debtor that is
neither a Secured Claim, nor a Claim entitled to priority under Section 507 of
the Bankruptcy Code.
ARTICLE 2
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 All Claims against the Debtor shall be divided into Classes as
follows:
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(a) Class 1 shall consist of all Administrative Claims
allowed under 11 U.S.C. Section 503, including but not limited to compensation
and reimbursement allowed under 11 U.S.C. Section 330 to attorneys for the
Debtor as a debtor in possession and any other Professional Person employed
pursuant to 11 U.S.C. Section 327 and as allowed by the Court except for the
Class 2, 3, and 4 Claimants. Class 1 shall also include all then unpaid
quarterly fees payable to the United States Trustee under 28 U.S.C. Section
1930.
(b) Class 2 shall consist of all Allowed Claims
entitled to priority under 11 U.S.C. Section 507(a)(3) and (4). Debtor
believes that there are no Class 2 Claims.
(c) Class 3 shall consist of all Allowed Claims
entitled to priority under 11 U.S.C. Section 507(a)(8). Debtor believes that
there are no Class 3 Claims.
(d) Class 4: The Allowed Administrative Claim of
Avonwood Capital Corporation as Debtor's investment banker for post-petition
payments due for professional services to Debtor.
(e) Class 5 shall consist of the Allowed Secured Claim
of the holders of the DeMoss Loan Documents and the Culbreth Loan Documents and
the Parker Loan Documents, which are secured by liens upon the Debtor's
personal property plus such other security as may exist under the respective
Loan Documents which is determined to be property of the Debtor.
(f) Class 6 shall consist of the Allowed Claim of the
holders of the Landav Loan Documents.
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(g) Class 7 shall consist of all Unsecured Claims,
including Contested Claims.
(h) Class 8 shall consist
of all Convenience Claims.
(i) Class 9 shall consist of the holders of the
outstanding common stock of Debtor.
(j) Class 10 shall consist of the holders of the
outstanding Redeemable Warrants to acquire common stock of Debtor.
(k) Class 11 shall consist of the holders of outstanding
options to acquire common stock of Debtor.
2.2 Unimpaired Classes. Claims of Creditors in Classes 1 through
5 and 8 are not impaired under the provisions of 11 U.S.C. Section 1124, and
Classes 1 through 5 and 8 are therefore deemed to have accepted this Debtor's
Plan, in accordance with the provisions of 11 U.S.C. Section 1126(f).
2.3 Impaired Classes. The Debtor's Plan does not leave unaltered
the legal, equitable and contractual rights of Creditors in Classes 6 and 7 and
interest holders in Classes 9, 10 and 11, and those parties in interest are
impaired under the provisions of Section 1124 of the Bankruptcy Code. Such
parties in interest shall be entitled to vote to accept or reject this Plan.
ARTICLE 3
TREATMENT OF CLASSES AND INTERESTS
The following Classes, in full satisfaction of their Allowed Claims,
shall receive the following:
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3.1 The Holders of Allowed Class 1 Claims shall be paid in full on
the Confirmation Date or upon such other payment terms as may be agreed upon by
the holder of any Class 1 Claim. In the event that the Claim of any
Professional Person has not been approved by the Court by the Confirmation
Date, such Claim shall be paid at the time that a Final Order is entered
allowing such Claim.
3.2 Debtor believes that there are no Class 2 Claims. To the
extent that there are any, they will be paid on the Distribution Date.
3.3 Debtor believes that there are no Class 3 Claims. To the
extent that there are any, they will be paid on the Distribution Date.
3.4 The Holder of the Allowed Class 4 Claim shall be satisfied in
accordance with the terms of its employment as approved by the Court on
November 12, 1996 by monthly payments of $3,000 per month for three months and
by the receipt of 1.5 million shares of the common stock of Debtor to be issued
pursuant to Section 5.5 of the Plan and Section 1145 of the Bankruptcy Code
within four (4) months following the Effective Date.
3.5 The Holder of the Allowed Class 5 Claim shall be paid in full
from proceeds of collateral encumbered by their respective Loan Documents as
such collateral is sold. At this time, the claims of Albert Parker and the
DeMoss Foundation have already been paid from the liquidation of their
collateral.
3.6 The Holders of the Allowed Class 6 Claims shall release their
Claims in exchange for the common stock of Debtor to be
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issued pursuant to Section 5.5 of this Plan at the rate of one share for each
15c. of the Allowed Claim. Their liens shall be released and cancelled.
3.7 Each holder of an Allowed Class 7 Unsecured Claim shall be
paid in full, unless the creditor elects to accept a discounted amount or the
creditor and the Debtor agree to different terms, with interest from stock and
cash payments as follows:
(a) Each creditor shall receive its pro rata share (based on the
amount of its Allowed Claim compared to the total of Class 7 Allowed Claims) of
(i) cash in the amount of $500,000 plus (ii) its pro rata share of a second
aggregate payment of $500,000 together with interest at the rate of 8.75% per
annum payable based on twelve thirty day months.
(b) Within fifteen (15) days from the Effective Date, the Debtor
shall deposit the sum of $500,000 with the Disbursing Agent who shall on the
Distribution Date disburse such sum pro-rata (based on the amount of a
creditor's Allowed Claim compared to the total of Class 7 Allowed Claims) to
Class 7 creditors in accordance with this Section 3.7 and Section 5.2 of this
Plan.
(c) Within ten (10) days from the date on which the Debtor
receives full or final payment for each new machine sold and shipped by the
Debtor post confirmation, exclusive of any sample machines, the Debtor shall
pay to the Disbursing Agent the sum of $50,000. In addition, the Debtor shall
pay to the Disbursing Agent accrued interest on the outstanding remaining
principal balance of this second $500,000 to the Disbursing Agent on a
quarterly basis
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within fifteen (15) days of the end of each fiscal quarter for the preceding
quarter or portion thereof in the case of the first fiscal quarter after the
Confirmation Date. Within thirty (30) days of the end of each fiscal quarter
and provided that the Disbursing Agent holds at least $100,000 unless it is the
last disbursement, the Disbursing Agent shall disburse such sums deposited with
it pro-rata (based on the amount of a creditor's Allowed Claim compared to the
total of Class 7 Allowed Claims) to Class 7 creditors in accordance with this
Section 3.7 and Section 5.2 of this Plan. If any payment due hereunder remains
unpaid for more than thirty (30) days after the Debtor's receipt of written
notice from the Chairperson of the Creditor's Oversight Committee ("Oversight
Committee") constituted pursuant to Section 3.7(e), then all remaining amounts
due pursuant to this Section 3.7(c) together with the actual reasonable
attorney's fees for collection shall become immediately due and payable and the
Oversight Committee may, as the representative of all Class 7 creditors,
commence such action as is necessary to recover such remaining amounts for the
benefit of Class 7 creditors and any amounts recovered by it shall first be
applied to the costs of collection and thereafter to distribution to Class 7
creditors in the manner provided for in this Section 3.7(c).
(d) The balance of the claims of Class 7 creditors, the total
amount of Allowed Class 7 claims less $1,000,000, shall be paid as follows. On
or before the Confirmation Date, a Class 7 creditor may elect in writing one of
the following two options with respect
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to the payment of the balance of its claim. The election shall be irrevocable
and shall be made on a form to be supplied by the Debtor with the ballot in
this case and filed with the Bankruptcy Court. Any creditor who fails to file
a ballot or to elect Option 1 shall be deemed to have elected Option 2. A
Class 7 creditor may elect to receive:
OPTION 1: the sum of 15% of the balance of its claim (its Allowed
Claim less the amounts due to it pursuant to Sections 3.7(b) and (c) in cash in
full and complete satisfaction of the remaining portion of its claim to be paid
with the payment made pursuant to Section 3.7(b) of this Plan. This option
shall be limited to the holders of the first $750,000 of Allowed Claims which
make this election, although the Debtor shall have the sole and exclusive
option to increase this amount; or
OPTION 2: on the Distribution Date its pro rata share (based on the
amount of its Allowed Claim compared to the total of Class 7 Allowed Claims) of
1,000,000 shares of common stock issued by the Debtor pursuant to Article 5.4
of the Plan provided that there shall be no fractional shares. At any time on
or prior to September 30, 2000 ("Final Settlement Date"), each Class 7 creditor
shall, at the sole and exclusive option of the Debtor, receive an additional
cash payment or additional shares of common stock based on the average of the
closing prices of the Debtor's common stock for the period that is not less
than five (5) nor more than thirty-five (35) trading days prior to the Final
Settlement Date such that the total amount received by Class 7 creditors
pursuant to this
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Option 2, either in additional stock or cash, equals its prorata share of the
difference between the total amount of Allowed Class 7 claims less all
principal amounts to be paid pursuant to Section 3.7(b) and (c) ("Final Payment
Amount") together with interest at the rate of 8.75% per annum from the
Effective Date of the Plan through the Final Settlement Date. If between the
Effective Date of the Plan and the Final Settlement Date the average of the
closing prices of the Debtor's common stock for any five (5) consecutive
trading day period multiplied by 1,000,000 exceeds the Final Payment Amount
multiplied by the factor for the end of the month in which such event occurs as
set forth in Exhibit "1" attached hereto or if any Class 7 creditor shall
sell, pledge or trade the stock, directly or indirectly, issued to it on the
Distribution Date pursuant to this Section 3.7(b), then such creditors shall no
longer be entitled to any further distribution on the Final Settlement Date.
All stock issued to Class 7 creditors shall be freely tradable stock. In the
event a closing price of the Reorganized Debtor's stock for any day is not
available, then the average of the closing bid and asked price for that day
shall be used and considered the closing price for that day.
(e) While there remains any amounts outstanding pursuant to
Section 3.7(c), there shall exist a Creditor's Oversight Committee. The
Committee shall be appointed by the Bankruptcy Court at the
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(1) For the purposes of Exhibit "1", month one shall be the first
calendar month following the Confirmation Date of the Plan.
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Confirmation Hearing and shall be comprised of those members of the Official
Committee of Unsecured Creditors who wish to serve. While there remains any
amounts outstanding pursuant to Section 3.7(c), the Debtor shall provide the
members of the Oversight Committee within thirty (30) days of the end of fiscal
quarter with a quarterly operating statement and balance sheet together with a
sales report of machines sold during the preceding fiscal quarter, the machines
expected to be delivered during the subsequent fiscal quarter and the machines
for which payment has been received in full during the previous fiscal quarter.
This post confirmation committee shall be entitled to retain such professionals
as it deems necessary to assist it in analyzing financial information and in
enforcing the provisions of Section 3.7(c) of the Plan and the Debtor shall
reimburse the Creditor's Oversight Committee for up to $12,000 of such
reasonable and necessary expenses upon presentation of invoices and other
documentation substantiating those charges. Upon the Debtor's payment of all
amounts due pursuant to Section 3.7(c), the Committee shall automatically
dissolve.
(f) The Disbursing Agent shall be paid compensation in an
aggregate amount not to exceed $15,000 by the Debtor for its services. $5,000
of the fee shall be paid with the first disbursement pursuant to Section 3.7(c)
and $2,500 paid each time a disbursement is made by the Disbursing Agent to
Class 7 creditors. In the event the Disbursing Agent resigns or is discharged
for cause by the Oversight Committee, then the Debtor
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shall assume the role of the Disbursing Agent for the balance of the payments
due pursuant to Section 3.7(c).
3.8 Each holder of an Allowed Class 8 Claim shall receive on the
Distribution Date payment in cash equal to the lesser of $1,200 or the Allowed
amount of such Allowed Convenience Claim. Any holder of an Allowed Unsecured
Claim (or Claims) in excess of $1,200 that desires treatment of such Claim (or
Claims) as a Convenience Claim shall have the right to receive such treatment
by making an irrevocable written election to reduce its Claim (or aggregate
Claims) to $1,200 when ballots on this Plan are due from holders of Unsecured
Claims.
3.9 The Holders of the Class 9 Claims will have their equity
interest in Debtor diluted by the common stock of Debtor issued to implement
this Debtor's Plan pursuant to Sections 5.3 and 5.5 of this Plan and any
existing preemptive rights to acquire, and other rights to limit issuance of,
Debtor's common stock shall be cancelled.
3.10 The Holders of the Class 10 Claims will have their rights to
acquire equity interest modified such that the exercise price of each
Redeemable Warrant shall be reduced to $1.00 and the time period in which to
exercise the Redeemable Warrant shall be extended to the earlier of the last
day of the thirty sixth (36th) month following the Effective Date or August 31,
2000. The first $850,000 in funds received by the Reorganized Debtor from the
exercise of these Redeemable Warrants shall be escrowed by it for payment of
the amounts due to Class 7 creditors on the Final
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Settlement Date. In addition, no payments or amounts shall be due or paid to
Josephthal Lyon & Ross Incorporated shall be paid from the proceeds of the
warrants.
3.11 The holders of the Class 11 Claims will have their stock
options cancelled and rejected and shall hold no claim due to the fact that
such options as worthless due to the exercise price being substantially in
excess of the market value of Debtor's common stock.
ARTICLE 4
ANALYSIS OF PLAN
Under the Debtor's Plan, all creditors will be paid as much as or more
than they would receive upon liquidation of the Debtor's assets. Classes 1
through 5 and 8 will receive payment in full. Although Class 6 is to have its
Claim satisfied by issuance of Debtor's common stock, Debtor understands that
the Class 6 Claimant has agreed to such treatment.
Class 7, unsecured creditors, will be paid in full, unless they
voluntarily agree to accept a lesser sum, through a combination of stock and
cash in satisfaction of their Allowed Claims, except to the extent that they
receive payment as a Convenience Claim on the Distribution Date. This class
shall be paid in full, unless a creditor agrees to accept a discounted amount.
As part of this Plan, the Debtor has developed a series of unaudited
projections (the "Projections") attached hereto as
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Exhibit "2", which it believes estimates future income and expenses under the
Debtor's Plan. The Projections assume confirmation of the Debtor's Plan and
that all aspects of the Plan will be successful if implemented. The Debtor
believes that the Projections reflect a realistic estimate of its financial
performance under the Debtor's Plan; however, no warranty can be made that
future events will correspond with the Projections.
The Debtor's shareholders will be entitled to retain their interests
subject to dilution for the Debtor's common stock to be issued pursuant to the
Plan. Debtor's option holders will have their options cancelled.
ARTICLE 5
MEANS FOR EXECUTION OF THE DEBTOR'S PLAN
5.1 Continuation of the Debtor's Business. The Confirmation of the
Debtor's Plan shall vest all of the Assets in the Reorganized Debtor. The
Reorganized Debtor shall continue to operate its Facility and shall pay its
operating expenses.
5.2 Contested Claims. Unless otherwise ordered by the Bankruptcy
Court, all objections to Claims shall be filed and served on the applicable
claimant by a date that is no later than 60 days after (i) the Effective Date
or (ii) the date the Claim is filed, whichever is later. After the
Confirmation Date, only the Debtor and Reorganized Debtor shall have the
authority to file, settle, compromise, withdraw, or litigate to judgment
objections to Claims.
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(a) Notwithstanding any other provision of the Debtor's
Plan, no payment or distribution shall be made with respect to any Claim to the
extent it is a Contested Claim unless and until such Contested Claim becomes an
Allowed Claim.
(b) Debtor shall withhold from the property (stock or
cash) that would otherwise be distributed to the Class in which a Contested
Claim is classified an amount sufficient to be distributed on account of
Contested Claims in that Class as of the Effective Date and shall place such
withheld property, cash or stock, in a reserve (the "Contested Claims
Reserve").
(c) Payments and distributions by Debtor to each holder
of a Contested Claim, to the extent that such Claim ultimately becomes an
Allowed Claim, shall be made from the Contested Claims Reserve in accordance
with the provisions of the Debtor's Plan governing the Class of Claims to which
the respective holder belongs.
(d) If any of the property withheld for the Contested
Claim Reserve remains after all objections to Contested Claims of a particular
Class have been resolved then such property shall be distributed as soon as
practicable in accordance with the provisions of the Debtor's Plan governing
the Class of Claims to which the Disallowed Claim belonged.
(e) Prior or subsequent to the Effective Date, in order
to effectuate distributions pursuant to Debtor's Plan and avoid undue delay in
the administration of the Case, the Debtor shall have the right to seek an
order of the Bankruptcy Court, pursuant
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to section 502(c) of the Bankruptcy Code, after notice and a hearing (which
notice may be limited to the holder of such Contested Claim and which hearing
may be held on an expedited basis), estimating or limiting the amount of
property that must be withheld from distribution on account of Contested
Claims. If the amount of the claim as ultimately allowed exceeds the estimated
amount or should any rejections claims become allowed Class 7 claims, then the
Reorganized Debtor shall have the right to make adjustments to the future
distributions to Class 7 creditors, either in stock or in cash, to account for
the additional distribution arising out of the resolution of the claim
objection.
5.3 Stock Offering. After confirmation, Debtor will proceed with
issuance of the common stock of Debtor at the rate of 15c. per share for a
total of 16,666,667 shares with the assistance of Avonwood Capital Corporation.
Issuance will be pursuant to Section 4(2) of the Securities Act of 1933 and the
provisions of Regulation D promulgated thereunder. The placement shall be
completed prior to the Distribution Date. Avonwood Capital Corporation will
deposit the sum of $2,500,000 with Debtor's counsel on or before the Effective
Date to secure such placement. Proceeds of the placement will be applied to
satisfy the Class 7 Claim and to provide operating funds for the continuation
of Reorganized Debtor's business.
5.4 Section 1145 Stock. Prior to the Distribution Date, Debtor
shall issue its common stock pursuant to Section 1145 of the Bankruptcy Code to
satisfy the administrative claims of the
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Avonwood Capital Corporation, the secured claim of the holder of the Landav
Loan Documents, the administrative claim of Ameristar Insurance Services, Inc.
and the distribution of stock to Class 7 creditors.
5.5 Returned Payments. Should any payment due to any Class 7 or 8
creditor hereunder be returned or unclaimed, then such amounts shall revert to
the Debtor upon the final disbursement pursuant to Section 3.7(c) and the
Disbursing Agent shall return such funds to the Debtor within sixty (60) days
from the date of the final disbursement.
ARTICLE 6
PROVISIONS FOR THE ASSUMPTION AND REJECTION
OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
6.1 As of the Confirmation Date, the Reorganized Debtor shall
assume each executory contract and unexpired lease that is identified as being
subject to assumption, unless such executory contract or unexpired lease has
been assumed or rejected by Debtor prior to the Confirmation Date or is the
subject of an application for assumption or rejection filed prior to such date.
Debtor's lease for the Facility and its licensing agreement with Card Monroe
Corporation are assumed and all defaults will be cured by the Distribution
Date. To the extent required or that they are considered executory contracts,
the Debtor also rejects any option agreement included within Class 11.
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6.2 Debtor reserves the right to file applications for the
assumption or rejection of any executory contract or unexpired lease at any
time prior to the Confirmation Date.
6.3 Each entity that is a party to an executory contract or
unexpired lease rejected pursuant to this Debtor's Plan shall be entitled to
file, not later than 30 days after the Confirmation Date, or such later date as
specified by the Court in the Confirmation Order or in an order approving such
rejection, a proof of claim for damages alleged to have arisen from the
rejection of the contract or lease to which such entity is a party. Any
Allowed Claim arising from or as a result of the rejection of any executory
contract or unexpired lease shall be a Class 7 Claim and shall be treated in
accordance with the provisions for payment of such Claims, but nothing herein
shall constitute a determination that any rejection gives rise to or results in
an Allowed Claim.
ARTICLE 7
ASSETS OF THE DEBTOR
7.1 Confirmation of the Debtor's Plan shall constitute a
determination that the Reorganized Debtor shall retain the Assets free and
clear of all liens, claims and encumbrances in accordance with 11 U.S.C.
Section 1141.
- 22 -
24
ARTICLE 8
MODIFICATION OF DEBTOR'S PLAN OF ORGANIZATION
8.1 Modification of the Debtor's Plan may be proposed in writing
by Debtor at any time before entry of a Confirmation Order, provided the
Debtor's Plan, as modified, meets the requirements of Sections 1122 and 1123 of
the Bankruptcy Code and Debtor shall have complied with Section 1125 of the
Bankruptcy Code.
8.2 The Debtor's Plan may be modified at any time after entry of a
Confirmation Order and before its substantial consummation, provided that such
Plan, as modified, meets the requirements of Sections 1122 and 1123 of the
Bankruptcy Code and the Court, after notice and a hearing, confirms such Plan,
as modified, under Section 1125 of the Bankruptcy Code and the circumstances
warrant such modification.
8.3 Effect of Modification on Balloting. A holder of a claim or
interest that has accepted or rejected the Debtor's Plan and whose interests
are materially and adversely affected by the proposed modifications shall be
deemed to have accepted or rejected, as the case may be, such Plan as modified,
unless, within the time fixed by the Court, the holder changes its previous
acceptance or rejection.
- 23 -
25
ARTICLE 9
DISCHARGE OF CLAIMS
9.1 Except as provided for herein, in accordance with 11 U.S.C.
Section Section 105 and 1141, all indebtedness, claims and litigation by any
person, creditor, interest holder or other party in interest against Debtor,
which existed or accrued on or before the Confirmation Date, including, but not
limited to, all fraudulent conveyance, preference or avoidable transfer
actions, whether or not contingent, unliquidated, unmatured, legal or
equitable, shall be discharged, regardless of whether the holder of any such
claim has accepted or rejected the Debtor's Plan.
ARTICLE 10
RETENTION OF JURISDICTION
10.1 Notwithstanding entry of a Confirmation Order, the Court shall
retain jurisdiction over the Case for the following purposes:
(a) To consider any modification of this Debtor's Plan
under Section 1127 of the Bankruptcy Code;
(b) To determine any and all objections to the allowance
of Claims;
(c) To determine any and all pending applications for
assumption or rejection of executory
contracts or unexpired leases;
(d) To determine and fix all Claims arising from the
rejection of any executory contract or unexpired lease;
- 24 -
26
(e) To hear and determine all controversies, suits and
disputes that may arise in connection with the interpretation or enforcement of
this Debtor's Plan;
(f) To enter and implement such orders as may be
appropriate in the event the Confirmation Order is for any reason stayed,
reversed, revoked or vacated;
(g) To hear and determine all requests for compensation
or reimbursement of expenses that may be made after the Confirmation Date;
(h) To hear and determine all controversies, suits and
disputes, including the Causes of Action, that may be pending at or initiated
after the Confirmation Date;
(i) To consider and act on a compromise and settlement of
any Claim or any Cause of Action on behalf of the Debtor;
(j) To liquidate or estimate damages or determine the
manner and time for such liquidation or estimation in connection with any
disputed, contingent or unliquidated Claim;
(k) To correct any defect, cure any omission or reconcile
any inconsistency in the Debtor's Plan or in the order of the Court confirming
the Debtor's Plan as may be necessary to carry out the purpose and intent of
this Debtor's Plan; and
(l) To enter a Final Order closing the Bankruptcy Case.
- 25 -
27
ARTICLE 11
GENERAL PROVISIONS
11.1 The Reorganized Debtor shall continue its existence subsequent
to the Confirmation Date and shall perform all acts necessary to remain a
business corporation in good standing in the State of Georgia. The directors
of the Reorganized Debtor and the Chief Executive Officer and Chief Financial
Officer and their compensation will be determined and disclosed prior to
Confirmation of the Debtor's Plan.
11.2 Confirmation of the Debtor's Plan shall bind the Reorganized
Debtor and every Creditor of the Debtor whether or not the Claim of such
Creditor, is impaired under the Debtor's Plan and whether or not such Creditor
has accepted the Debtor's Plan.
11.3 Notwithstanding any other provision of this Debtor's Plan,
each Claim shall be paid only after it has been allowed in accordance with the
Bankruptcy Code.
11.4 At the option of the Debtor, this Debtor's Plan may be
withdrawn at any time prior to the Effective Date of the Debtor's Plan. Such
option shall be exercised by the filing in the Case of a notice of withdrawal
and mailing a copy of such notice to all Creditors and persons specially
requesting all notices in this case. If such option is timely and properly
exercised, the Case shall continue and be administered as if the Debtor's Plan
had been withdrawn prior to the Confirmation.
- 26 -
28
11.5 Pursuant to Section 1123(b)(3)(B) of the Bankruptcy Code, the
Reorganized Debtor shall retain each and every Claim, Demand or Cause of Action
whatsoever which the Debtor or debtor in possession had or had power to assert
immediately prior to Confirmation of the Debtor's Plan, including without
limitation actions for avoidance and recovery of transfers pursuant to Section
550 of the Bankruptcy Code, or transfers avoidable by reason of Sections 544,
545, 547, 548, 549 or 553(b) of the Bankruptcy Code, and may commence or
continue in any appropriate court or tribunal any suit or other proceeding for
the enforcement of same.
11.6 In order for all creditors and other interest holders and
other parties in interest to fully comprehend and analyze the provisions of
this Plan, it is necessary to analyze the financial condition of Debtor as
referenced in the schedules and reports filed with the Court.
11.7 Each creditor should consult with its own legal, tax and
financial adviser as it deems necessary in order to evaluate the effect of the
Plan on them. Debtor has the right to modify the Plan at any time in order to
obtain acceptances and shall do so if modification can be agreed upon between
Debtor and claim holders affected by the modification in order to secure their
acceptance of the Plan.
- 27 -
29
Dated this 14th day of March, 1997.
TAPISTRON INTERNATIONAL, INC.
By: /s/ Darwin Poe
-----------------------
Darwin Poe, President
PREPARED AND SUBMITTED BY:
/s/ John A. Christy
- ---------------------------------
JOHN A. CHRISTY, ESQ.
Georgia Bar No. 125518
Schreeder, Wheeler, & Flint, LLP
127 Peachtree Street, N.E.
16th Floor, The Candler Building
Atlanta, Georgia 30303-1845
(404) 681-3450
- 28 -
30
TAPISTRON INTERNATIONAL INC
COMPOUNDED MONTHLY AMOUNT WHEN PRINCIPAL IS 1
ANNUAL INTEREST RATE OF 8.75%
FEBRUARY 13, 1997
n
s=(1 + i)
n COMPOUND FACTOR
- - ---------------
1 1.00729200
2 1.01463717
3 1.02203591
4 1.02948859
5 1.03699562
6 1.04455740
7 1.05217431
8 1.05984676
9 1.06757517
10 1.07535992
11 1.08320145
12 1.09110015
13 1.09905646
14 1.10707078
15 1.11514354
16 1.12327516
17 1.13146609
18 1.13971674
19 1.14802755
20 1.15639897
21 1.16483143
22 1.17332538
23 1.18188127
24 1.19049955
25 1.19918067
26 1.20792509
27 1.21673328
28 1.22560570
29 1.23454282
30 1.24354511
31 1.25261304
32 1.26174709
33 1.27094775
34 1.28021550
35 1.28955083
36 1.29895424
37 1.30842621
38 1.31796726
39 1.32757787
40 1.33725857
41 1.34700986
42 1.35683226
43 1.36672628
EXHIBIT 1
31
TAPISTRON INTERNATIONAL INC. OPTION 1
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B C D E F G H I J K L
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5 QUARTER ENDING 1/31/97 4/30/97 7/31/97 10/31/97 1/31/98 4/30/98 7/31/98 10/31/98 1/31/99
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6 170,000 636,625 1,219,197 1,451,584 1,085,763 755,264 (88,002) 272,639 46,278
7 BEG CASH
8 INCOME
9
10 Machine Sales 1996:
11 Machine 403 (gtc) 105,000 115,000 15,000 15,000 15,000 15,000
12 Machine 412 (burton) 80,000 60,000 50,000
13 Machine 104 (strikeoff)
14 Machine 111 (asahi)
15 Machine 112 (asahi)
16
17 Projections 1997:
18 Machine 414 (Daigo) 70,000
19 Machine 415 700,000
20 Machine 416 800,000
21 Machine 113 (asahi/acako) 528,000
22 Machine 114 (asahi/duskin+dep) 550,000
23 Machine 115 (asahi/duskin+dep) 550,000
24
25 Projection 1998:
26 Machine 417 800,000
27 Machine 418 (Int) 800,000
28 Machine 419 800,000
29 Machine 420 800,000
30 Machine 421 (Int) 800,000
31 Machine 422 (Int) 800,000
32 Machine 423 800,000
33 Machine 424 300,000
34 Machine 425 (Intl)
35
36 Debt Adj, LC Finance, etc. 470,000
37 INFLUX 2,500,000
38 Part Sales 2,325 30,225 32,550 30,225 33,100 37,700 37,700 37,700 37,700
39 Design/Samples 200 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600
40 Burtco power/Rent 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000
41 Service 100 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300
42 EXPENSES
43 Payroll (260,000) (350,000) (370,000) (340,000) (420,000) (360,000) (420,000) (360,000)
44 Payroll Taxes (104,000) (140,000) (148,000) (136,000) (168,000) (144,000) (168,000) (144,000)
45 Utilities:
46 Gas (900) (900) (900) (900) (900) (900) (900) (900)
47 Electric (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000) (27,000)
48 Telephone (2,700) (2,700) (2,700) (2,700) (2,700) (2,700) (2,700) (2,700)
49 Water/Mics. (300) (300) (300) (300) (300) (300) (300) (300)
50 Long Distance (900) (900) (900) (900) (900) (900) (900) (900)
51 Insurance:
52 Building (8,733) (8,733) (8,733) (8,733) (8,733) (8,733) (8,733) (8,733)
53 Health (33,750) (33,750) (33,750) (33,750) (33,750) (33,750) (33,750) (33,750)
54 Workers Comp. (10,500) (10,500) (10,500) (10,500) (10,500) (10,500) (10,500) (10,500)
55 COGS:
56 2 METER
57 Machine 112
58 Machine 113 (210,268) (75,134)
59 Machine 114 (119,000) (170,000)
60 Machine 115 (55,000) (237,500)
61 4 METER
62 Machine 414 (5,000)
63 Machine 415 (147,000)
64 Machine 416 (329,902)
65 Machine 417 (268,500) (141,400)
66 Machine 418 (85,700) (324,200)
67 Machine 419 (268,500) (141,400)
68 Machine 420 (85,700) (324,200)
69 Machine 421 (268,500) (141,400)
70 Machine 422 (131,400) (278,500)
71 Machine 423 (85,700) (214,200) (110,000)
72 Machine 424 (222,800) (187,100)
73 Machine 425 (85,700) (107,471)
74 Misc. expense/freight (105,000) (105,000) (105,000) (105,000) (105,000) (105,000) (105,000) (105,000)
75 Minor expense report (900) (900) (900) (900) (900) (900) (900) (900)
76 Office supplies (61,500) (4,000) (2,000) (3,000) (4,000) (3,000) (2,000) (2,000)
77 Sales/Marketing: (1,000) (13,000) (28,000) (13,000) (13,000) (13,000) (28,000) (13,000) (13,000)
78 Royalty Payments: (6,000) (6,000) (6,000) (6,000) (3,000) (6,000) (6,000) (3,000)
79 R&D: (42,500) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000) (30,000)
80 Building: (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000) (75,000)
81 Professional Fees (100,000) (100,000)
82 Warranty/Installations (15,600) (28,600) (16,000) (20,500) (18,000) (6,500) (20,500) (15,500)
83 Debt Adj, LC Finance, etc. (470,000)
84 PAYMENT TO CREDITORS (500,000) (114,646) (111,563) (107,516) (53,083) (103,276) (50,578)
85
86 SECURED/PRIORITY DEBT
87 Parker (160,000)
88 Lawyer (150,000)
89 CPA (110,000)
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90 END.CASH 636,625 1,219,197 1,451,584 1,085,763 755,264 (88,002) 272,639 46,278 (40,876)
===================================================================================================================================
EXHIBIT 2