Exhibit 2.2
Christopher R. Kaup, Esq.
State Bar No. 014820
TIFFANY & BOSCO P.A.
FIFTH FLOOR VIAD TOWER
1850 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004-4546
TELEPHONE: (602) 255-6000
FACSIMILE: (602) 255-0103
Attorneys for Debtors &
Debtors-in-Possession
UNITED STATES BANKRUPTCY COURT
DISTRICT OF ARIZONA
In re: | Chapter 11 Proceedings
| Case Nos. 01-11843-ECF CGC and
E-BIZ ENTERPRISES, INC., | 01-11844-ECF-CGC
a Nevada corporation, |
|
Debtor. | (Jointly Administered)
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|
In re: |
|
JONES BUSINESS SYSTEMS, INC., |
a Texas corporation, |
Debtor. |
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AMENDED JOINT PLAN OF REORGANIZATION
DATED JANUARY 4, 2002
EBIZ Enterprises, Inc. ("EBIZ") and Jones Business Systems, Inc. ("JBSI"),
the Debtors and Debtors-in-Possession in the above-captioned Bankruptcy Case
(collectively, the "Debtors"), propose the following Joint Plan of
Reorganization (the "Plan").
/ / /
/ / /
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LIST OF EXHIBITS
Exhibit "1" Assumption of Executory Contracts and Leases
Exhibit "2" Rejection of Executory Contracts and Leases
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ARTICLE I
DEFINITIONS
A. COMMENTS CONCERNING DEFINED AND UNDEFINED TERMS.
For the purpose of the Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined shall
have the meanings assigned to them in this Article I of the Plan. Whenever the
context requires, such terms shall include the plural and the singular number.
The masculine gender as used in the Plan shall, unless the context otherwise
requires, include the feminine gender, and the feminine gender shall, likewise,
include the masculine.
All other legal terms shall have the meanings ascribed to them by the
Bankruptcy Code, Title 11 U.S.C. ss.101, ET SEQ. (the "Code"), the Federal Rules
of Bankruptcy Procedure promulgated pursuant to 28 U.S.C. ss.2075 and the
amendments thereto as made applicable to this Case.
B. DEFINED TERMS.
Subject to the qualifications contained in the foregoing paragraph, the
following terms are defined as follows whenever used in this Plan:
1. "ALLOWED ADMINISTRATIVE CLAIM" shall mean an Allowed Claim for payment
of an administrative expense of a kind described in Section 503(b) of the Code,
including, without limitation, the actual, necessary costs and expenses of
preserving the estate and operating the business of the Debtors. Such sums
include wages, salaries or commissions due employees and others for services
rendered after the commencement of this Case, compensation for legal and other
professional services and reimbursement of expenses awarded under Section 330(a)
or 331 of the Code and all lawful fees and charges assessed against the estate
under Title 28 of the United States Code.
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2. "ALLOWED CLAIM OR ALLOWED INTEREST" shall mean a Claim or Interest
having the following characteristics:
a. Either such Claim or Interest was listed in the Chapter 11
Schedules that the Debtors filed with the United States Bankruptcy Court for the
District of Arizona (the "Court") pursuant to Section 521 of the Code AND such
Claim or Interest was NOT identified in those Schedules as "disputed,"
"contingent" or "unliquidated" or proof of such Claim or Interest has been filed
with the Court in the time and in the manner prescribed by the Court and the
Federal Rules of Bankruptcy Procedure; AND
b. No objection to the allowance of such Claim or Interest has been
interposed within the periods of limitation fixed by the Court, the Code or the
Federal Rules of Bankruptcy Procedure OR any order resolving any objection to
the allowance of such Claim or Interest has become a Final Order.
3. "ALLOWED SECURED CLAIM" shall mean all or that portion of a Claim
which both constitutes an Allowed Claim and which has been specifically allowed
as a "secured claim" pursuant to Section 506(a) of the Code.
4. "ALLOWED UNSECURED CLAIM" shall mean an Allowed Claim which is not an
Allowed Administrative Claim, an Allowed Secured Claim or an Allowed Claim
entitled to priority pursuant to 11 U.S.C. ss.507.
5. "ASSIGNED CLAIMS" shall mean those claims and causes of action arising
under the Code which are to be assigned to the Creditors' Trust, pursuant to the
terms of this Plan.
5. "BANKRUPTCY CODE" shall mean the federal statutes known as the
"Bankruptcy Code," which are set forth in Title 11 of the United States Code, 11
U.S.C. ss.101, ET SEQ.
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6. "BANKRUPTCY COURT" shall mean the United States Bankruptcy Court for
the District of Arizona or the United States District Court of Arizona when a
district judge is acting as a trial judge and not as an appellate judge in the
case.
7. "CANOPY" OR "THE CANOPY GROUP" shall mean The Canopy Group, Inc., or
its successor or assign.
8. "CANOPY/FFEC WARRANTS" shall mean the warrants to be issued by the
Reorganized Debtor under the Plan and distributed to its largest secured
creditor, The Canopy Group, and to First Financial Equity Corporation, the agent
for the FFEC Group, as that term is defined below, in the manner provided by the
Plan and containing the attributes provided in Article VI of the Plan.
9. "CASE" shall mean the Chapter 11 Bankruptcy Case of EBIZ ENTERPRISES,
INC., pending in the United States Bankruptcy Court for the District of Arizona,
currently assigned Case No. 01-11843-ECF-CGC, and the Chapter 11 Bankruptcy Case
of JONES BUSINESS SYSTEMS, INC., pending in the United States Bankruptcy Court
for the District of Arizona, currently assigned Case No. 01-11844-ECF-CGC, said
cases which are being jointly administered by the Court.
10. "CASH POOL" shall mean that certain pool of funds to be created by the
opening of a bank account at the Southwest Bank of Texas, on the Effective Date,
as that term is defined below in this Section, and into which the Reorganized
Debtor shall make deposits of cash and from which the Reorganized Debtor shall
make biannual distributions to holders of Allowed Unsecured Claims, pursuant to
the terms of this Plan.
11. "CLAIM" shall mean a "claim," as defined byss.101(5) of the Code,
against the Debtors, against property of the Debtors or against property of the
estate.
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12. "CLASS" shall mean any class into which Allowed Claims or Allowed
Interests are classified pursuant to the Plan.
13. "CODE" shall mean the "Bankruptcy Code," defined in this Section of
the Plan.
14. "CONFIRMATION ORDER" shall mean the order (or orders) confirming the
Plan, signed by a United States Bankruptcy Judge or a United States District
Judge acting as a trial judge and not as an appellate judge, after entry of that
order (or those orders) on the Court's docket.
15. "CONFIRMATION OF THE PLAN" shall mean entry on Court's docket of all
orders necessary to confirm the Plan.
16. "CONSUMMATION OF THE PLAN" shall mean the accomplishment of all things
contained or provided for in the Plan and the entry of an order closing the Case
pursuant to Rule 3022 of the Federal Rules of Bankruptcy Procedure.
17. "COURT" shall mean Bankruptcy Court as defined in this Section of the
Plan. When not capitalized, the word "court" shall mean such court exercising
proper jurisdiction in the case as the context of the Plan makes appropriate.
For example, as used in the phrase "entry of an order on the docket of the
court," the term "court" can refer to the United States Bankruptcy Court for the
District of Arizona, or the United States District Circuit or the United States
Supreme Court, depending upon which court has issued the order in the case.
18. "CREDITOR" shall mean any person holding a Claim.
19. "CREDITORS' TRUST" shall mean a trust, under Arizona law, that shall
be created through documents to be prepared by the Debtors and the Committee,
through their legal counsel, and by virtue of the Confirmation Order and which
shall receive an assignment of all claims and causes of action arising or
existing under the Code on the Effective Date and which shall own those causes
of ACTION thereafter. The Trustee of the Creditors Trust shall prosecute all
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appropriate causes of action for the benefit of the Trust and shall cause the
distribution of the net proceeds of those causes of action to the holders of
Allowed Unsecured Claims.
20. "DEBTORS" shall mean EBIZ and JBSI, the entities named as the Debtors
in the Petitions commencing this Case.
21. "DISCLOSURE STATEMENT" shall mean the written disclosure statement
that the Debtors filed in this Case and that the Court approved pursuant to
Section 1125 of the Code.
22. "DISPUTED CLAIM" OR "DISPUTED INTEREST" shall mean either: (a) a Claim
or an Interest listed in the Chapter 11 Schedules filed by the Debtors pursuant
to 11 U.S.C. ss.521 and designated as "disputed," "contingent" or
"unliquidated"; or (b) a Claim or an Interest to which an objection has been
filed by a party in interest and which objection has not been resolved by an
Order which has become a Final Order on or before the Effective Date.
23. "EFFECTIVE DATE" shall mean that date which is thirty (30) days
following the date all Orders necessary for Confirmation of the Plan to become a
Final Order.
24. "FEDERAL RULES OF BANKRUPTCY PROCEDURE" shall mean those rules of
procedure governing bankruptcy cases and contested matters and adversary
proceedings in those cases which have been promulgated pursuant to 28 U.S.C.
ss.2075 and any amendments to those rules applicable to this Case.
25. "FFEC GROUP" shall mean those persons for whom First Financial has
been appointed to act as agent and who have provided postpetition secured
financing, as approved by the Court, to the Debtors.
26. "FINAL ORDER" shall mean order or judgment having the following
characteristics: (a) it has sufficient finality under applicable law to be
appealable as of right; (b) the filing of any motion to alter or amend it or to
reconsider it, except such a motion brought pursuant to Rule 9024 of the Federal
Rules of Bankruptcy Procedure and Rule 60 of the Federal Rules of Civil
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Procedure, is subject to being denied as untimely; (c) it has been entered on
the Court's docket for a sufficient period of time such that the filing of any
notice of appeal from it is subject to being dismissed as commencing an untimely
appeal; (d) it has not been reversed; (e) it is not stayed; (f) it is not the
subject of a pending motion seeking relief from it, reconsideration of it, or to
alter or amend it; and (g) it is not the subject of a pending appeal or a
pending motion for review or rehearing on appeal.
27. "FIRST FINANCIAL" OR "FFEC" shall mean First Financial Equity
Corporation, a licensed Arizona securities brokerage firm, which has agreed to
act as the agent for that group of persons defined below as the FFEC Group, who
have provided postpetition secured financing to the Debtors following approval
by the Court. FFEC has previously been and currently is a financial advisor for
the Debtors.
28. "INTEREST" shall mean an equity interest in the Debtors represented by
issued and outstanding stock in the Debtors.
29. "LEGAL RATE" shall mean the rate of interest as defined by 28
U.S.C. ss.1961 as of the Effective Date.
30. "NEW EBIZ" shall mean the Reorganized Debtor as that term is defined
below in this Section.
31. "NEW EBIZ COMMON STOCK" shall mean the common stock of the Reorganized
Debtor to be issued under the Plan and distributed in the manner provided by the
Plan.
32. "NEW EBIZ WARRANTS" shall mean the warrants to be issued by the
Reorganized Debtor under the Plan and distributed to holders of Allowed
Unsecured Claims and holders of Allowed Interests in the manner provided by the
Plan and containing the attributes provided in Article VI of the Plan.
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33. "OLD COMMON STOCK" shall mean any validly issued and fully paid shares
of Common Stock of EBIZ or JBSI issued and outstanding on the Petition Date.
34. "OLD PREFERRED STOCK" shall mean any validly issued and fully paid
shares of Preferred Stock of EBIZ or JBSI issued and outstanding on the Petition
Date.
35. "PETITION" shall mean the Petitions commencing this Case, filed by the
Debtors on September 7, 2001.
36. "PETITION DATE" shall mean September 7, 2001, the date the Petitions
were filed with the Court commencing this Case.
37. "PLAN" shall mean this Chapter 11 Plan of Reorganization, including
all exhibits to the Plan, either in their present form or as they may be
altered, amended or modified from time to time in accordance with the provisions
of the Plan, the Code and the Federal Rules of Bankruptcy Procedure.
38. "REORGANIZED DEBTOR" shall mean New EBIZ, the entity succeeding to the
property interests of the Debtors on the Effective Date and having the rights,
powers, duties and interests granted the "Reorganized Debtor" set forth in the
Plan and granted entities having plans of reorganization confirmed under Chapter
11 of the Code.
39. "SECURED CREDITOR" shall mean any creditor holding a lien, security
interest, or other encumbrance which either: (a) had been properly perfected, as
required by law, with respect to the property owned by the Debtors on the
Petition Date; or (b) had been conveyed to that creditor following the date of
the Order for Relief and approval by the Court which is neither subject to a
pending proceeding seeking to vacate or disallow it nor vacated or disallowed by
Court order or operation of law.
40. "SECURITIES POOL A" shall mean the pool of securities consisting of
New EBIZ Common Stock and New EBIZ Warrants that will be distributed to all
creditors holding Allowed Unsecured Claims on the Effective Date, except for the
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Shadle/Ramsey Group (as that term is defined below), pursuant to the terms of
the Plan.
41. "SECURITIES POOL B" shall mean the pool of securities consisting of
New EBIZ Warrants that will be distributed to the holders of EBIZ's Allowed
Interests on the Effective Date, pursuant to the terms of the Plan, in order to
permit such holders to provide "new value" to the Reorganized Debtor.
42. "SECURITIES POOL C" shall mean the pool of securities consisting of
New EBIZ Common Stock, New EBIZ Warrants and Canopy/FFEC Warrants that may be
distributed to the Canopy Group, on account of its Allowed Secured Claim, the
FFEC Group, on account of their postpetition Allowed Secured Claims, in the
event that any of those creditors elect to exchange a portion of such debt for
such securities, and FFEC, as the agent for the FFEC Group, and the Transition
Management Team as part of their compensation for services rendered during this
Case.
43. "SHADLE/RAMSEY GROUP" shall mean Steve Shadle, Scott Shadle, and Roger
Ramsey, including their agents, successors and assigns, who have asserted Claims
against EBIZ arising out of and relating to the prepetition merger between EBIZ
and JBSI and have agreed to forego the more favorable treatment provided to
other Unsecured Creditors, under the terms of the Plan and, instead, receive the
transfer of the Vericenter Stock, as that term is defined below.
44. "TRANSITION MANAGEMENT PERIOD" shall mean the period of time beginning
on September 7, 2001 and ending on the date which is ninety (90) days after the
Effective Date.
45. "TRANSITION MANAGEMENT TEAM" shall mean Bruce Parsons, Mike Colesante,
David Shaw, Jeffrey Rassas, Ray Goshorn, Jeffrey Perry and Don Young who
currently serve as Officers and/or Directors of the Debtors and/or are key
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employees of the Debtors and who rendered valuable services to the Debtors
during the pendency of the Case at a reduced rate of compensation.
46. "UNSECURED CREDITOR" shall mean any holder of an Allowed Unsecured
Claim.
47. "VERICENTER" shall mean Vericenter, Inc., that certain closely held
corporation, located in Houston, Texas, in which JBSI owns 557,895 shares of
Common Stock, and the remaining shares of such Common Stock are owned by the
Shadle/Ramsey Group.
48. "VERICENTER STOCK" shall mean the 557,895 shares of Vericenter's
Common Stock owned by JBSI.
ARTICLE II
OBJECTIVE OF THE REORGANIZATION
The Plan provides for the reorganization of the Debtors under a
consolidated and simplified corporate structure having cost effective operations
serving existing and new customers with the core competencies and most
profitable products of the Debtors. Members of the FFEC Group holding Allowed
Secured Claims have the right to exchange their Claims into equity, as of the
Effective Date. In addition, The Canopy Group ("Canopy") has the option to
convert up to $1,500.000.00 of its Allowed Secured Claim into shares of the
Reorganized Debtor's Common Stock.
In the event that members of the FFEC Group elect to exchange their Claims
and Canopy elects to convert a portion of its Allowed Secured Claim, all
creditors will necessarily benefit as a result. First, the aggregate amount of
the outstanding secured debt will have been substantially reduced and the
regular monthly debt service obligation of the Reorganized Debtor will be
lowered resulting in better and more reliable operations. Second, as
shareholders of the Reorganized Debtor, the creditors will share in the equity
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appreciation and hold an interest in a company with a much stronger balance
sheet.
Holders of Allowed Unsecured Claims will receive payments of cash from the
Reorganized Debtor in amounts substantially greater than if the assets of the
Debtors were liquidated under Chapter 7. In addition, holders of Allowed
Unsecured Claims will receive additional value in the form of shares of New EBIZ
Common Stock and New EBIZ Warrants, which will allow all such persons to
participate in the anticipated postconfirmation operating success of the
Reorganized Debtor.
Finally, the Plan provides that holders of Allowed Interests shall have the
opportunity to contribute "new value" to the Reorganized Debtor by exercising
New EBIZ Warrants to be issued, under the Plan, to all such holders. All of the
Debtors' Old Common Stock and Old Preferred Stock shall be canceled pursuant to
the Plan. The Debtors believe that this new debt and capital structure will
provide the highest feasible rate of return to all creditors and parties in
interest which can be realistically achieved under current bankruptcy law.
As set forth more fully below and in the Disclosure Statement regarding the
Plan, if the Debtors' assets were liquidated in a case under Chapter 7, the
creditors holding Allowed Unsecured Claims would receive nothing for their
Claims, since all of the Debtors' assets would have less value in the context of
a Chapter 7 case and are fully encumbered by the secured Claims of The Canopy
Group, Ingram Micro, Inc., Caldera Systems, Inc., and certain secured equipment
"lessors." The Debtors believe that by continuing their existing business
through the reorganized structure created by operation of the Plan, the
creditors will receive a far greater return than through a liquidation.
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ARTICLE III.
POSTCONFIRMATION OPERATIONS
EBIZ currently owns all of the common stock of JBSI. Upon the Effective
Date, all of the assets and business operations of JBSI will be transferred to
EBIZ, which shall become the Reorganized Debtor, and JBSI shall be dissolved and
cease to exist. Thereafter, all purchases of goods, manufacturing of products,
sales and other business operations shall be conducted by New EBIZ, the
Reorganized Debtor.
A. INITIAL OFFICERS AND DIRECTORS.
The initial officers and directors of the Reorganized Debtor and the
compensation of such persons shall be as follows:
NAME OFFICE TO BE HELD REMUNERATION
---- ----------------- ------------
Bruce Parsons President, CEO & Director $120,000 per year
Mike Colesante Chief Financial Officer $120,000 per year
In addition, Canopy shall be entitled to designate to the initial board of
directors of the Reorganized Debtor one director for each $500,000 of its
Secured Claim that Canopy elects to convert into shares of stock of the
Reorganized Debtor as provided below. In the event that Canopy elects to convert
at least $500,000 but less than $1,000,000 of its Secured Claim into shares of
stock of the Reorganized Debtor, Canopy designates Dan Baker as director. In the
event that Canopy elects to convert at least $1,000,000 but less than $1,500,000
of its Secured Claim into shares of stock of the Reorganized Debtor, Canopy
designates Dan Baker and Darcy Mott as initial directors. In the event that
Canopy elects to convert $1,500,000 of its Secured Claim into shares of stock of
the Reorganized Debtor, Canopy designates Dan Baker, Darcy Mott and Ralph Yarro
as initial directors.
In the event that any of Canopy's initial designees resign or are unable
for any reason to act as a director of the Reorganized Debtor, Canopy shall be
entitled to designate an individual to replace such director.
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The FFEC Group shall also be entitled to designate to the initial board of
directors of the Reorganized Debtor one director for each $500,000 of the debt
represented by the promissory notes issued by the Debtors to the FFEC Group that
members of the FFEC Group elect to convert into shares of stock of the
Reorganized Debtor as provided below. In the event that members of the FFEC
Group elect to convert at least $500,000 but less than $1,000,000 of their
Secured Claim, if any, into shares of stock of the Reorganized Debtor, the FFEC
Group designates George Fischer as director. In the event that members of the
FFEC Group elect to convert at least $1,000,000 of their Secured Claim, if any,
into shares of stock of the Reorganized Debtor, the FFEC Group designates Steve
Scronic and as initial directors.
In the event that any of the FFEC Group's initial designees resign or are
unable for any reason to act as a director of the Reorganized Debtor, the FFEC
Group shall be entitled to designate an individual to replace such director.
The directors of the Reorganized Debtor designated by Canopy and the FFEC
Group shall perform their services as directors without remuneration.
Approval of two-thirds of the board of directors of the Reorganized Debtor
shall be required to increase the number of directors from the number of initial
directors appointed and designated; except that, in the event that the number of
initial directors appointed and designated as set forth above is insufficient to
satisfy the statutory minimum number of directors under the governing state law,
the Reorganized Debtor may appoint an additional director or directors in order
that the number of directors satisfies the statutory minimum number of
directors.
Other than the officers of the Debtor listed above, no "insiders" will be
employed by the Reorganized Debtor. However, as set forth above, employees or
agents of Canopy and FFEC, which may be "insiders," may serve as directors of
the Reorganized Debtor for no compensation.
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Salaries of any full time employees shall be at the prevailing market rate
for such employees of similar knowledge, education, training and experience in
the locations in which they will be performing their services.
The following officers and directors of the Debtors will receive the
following distribution of New EBIZ Common Stock and New EBIZ Warrants:
OFFICER/DIRECTOR SHARES WARRANTS
---------------- ------ --------
(1) Bruce Parsons 48,000 48,000
(2) Mike Colesante 48,000 48,000
(3) Dave Shaw 42,000 42,000
(4) Jeffrey Rassas 42,000 42,000
Fifty percent of these Shares and Warrants shall be distributed on the
Effective Date and the remaining Shares and Warrants shall be distributed at the
expiration of the Transition Management Period.
B. QUALIFICATIONS OF OFFICERS AND DIRECTORS.
The qualifications of the individuals who will constitute the initial board
of directors and serve as officers of the Reorganized Debtor are as set forth in
the Disclosure Statement.
C. ADDITIONAL SENIOR MANAGEMENT.
In addition to the officers and directors identified above, three
additional senior level managerial employees of the Debtors have been critical
to the success of the Debtors' reorganization: Mr. Ray Goshorn, Mr. Jeffrey
Perry and Mr. Don Young. Mr. Goshorn, Mr. Perry and Mr. Young have remained with
and provided invaluable services to the Debtors during this Case and have agreed
to continue to provide such services postconfirmation for, at least, the
critical first 90 days after the Effective Date. These three individuals will
also share in the distribution from the Transition Management Pool.
Mr. Don Young has been the Debtors' Director of Technology for years and
will continue in that position postconfirmation. Mr. Young's technical knowledge
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and skills have been and will be essential to the Debtors' and Reorganized
Debtors' abilities to remain competitive in the quickly evolving high tech
industry. Mr. Young has forgone other opportunities and a higher level of
compensation in order to assist with the restructuring of the Debtor's
operations and, in lieu of same, will receive the distribution of shares of New
EBIZ Common Stock and New EBIZ Warrants identified below.
Mr. Jeffrey Perry is the in-house General Counsel for the Debtors, and Mr.
Ray Goshorn is the former CFO of the Debtors. As part of the restructuring
efforts of the Debtors, Mr. Perry and Mr. Goshorn accepted significant pay cuts
during the Case and will not be employed by the Debtors after December 31, 2001.
In exchange for their strenuous efforts in assisting with the reorganization of
the Debtors, at a reduced level of compensation, and agreement to forego large
severance packages to which they may be entitled, Mr. Perry and Mr. Goshorn will
accept the shares of New EBIZ Common Stock and New EBIZ Warrants specified
below.
EMPLOYEE/CONSULTANT SHARES WARRANTS
------------------- ------ --------
(1) Don Young 48,000 48,000
(2) Jeff Perry 36,000 36,000
(3) Ray Goshorn 36,000 36,000
Fifty percent of these Shares and Warrants shall be distributed on the
Effective Date, and the remaining Shares and Warrants shall be distributed at
the expiration of the Transition Management Period.
D. COMPENSATION OF OFFICERS AND DIRECTORS.
The prior table shows the initial proposed annual salaries and fees of
those individuals who will be the officers and directors of the Reorganized
Debtor immediately following Confirmation of the Plan. However, payment of such
salaries is subject to the ability of the Reorganized Debtor to make such
payments without endangering the operating ability of the Reorganized Debtor and
ensuring the continued feasibility of the Plan. If New EBIZ is unable to pay any
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salaries or fees, such salaries or fees will be deferred and accrue interest at
the rate of 10% per annum.
The directors of the Reorganized Debtor will also be authorized to approve
reimbursement to its directors for actual expenses incurred, compensation to
directors for attendance at meetings of the board of directors, and the salaries
and fees for corporate officers set forth above following Confirmation of the
Plan. Nevertheless, the Reorganized Debtor's initial corporate board has no
plans to approve any such reimbursement or increased compensation for officers
or directors, other than as described in the Disclosure Statement and the Plan.
E. MEETINGS OF DIRECTORS AND SELECTION OF NEW DIRECTORS.
Following the Effective Date of the Plan, the board of directors of the
Reorganized Debtor shall meet monthly or more frequently for six months. The
initial board of directors shall serve until the next meeting of shareholders
held pursuant to the articles of incorporation and/or bylaws of the Reorganized
Debtor.
ARTICLE IV.
ANTICIPATED POSTCONFIRMATION LITIGATION
The Debtors are in the process of reviewing the Proofs of Claim filed in
this Case by various alleged creditors. The only contemplated postconfirmation
litigation are objections to allowance of certain Claims, actions to recover
preferential transfers that may be filed by the Reorganized Debtor and
collection efforts on outstanding preconfirmation accounts receivable.
ARTICLE V.
ACCEPTANCE AND REJECTION OF EXECUTORY CONTRACTS
In accordance with 11 U.S.C. ss.365, the Debtors hereby assume all
executory contracts and unexpired leases identified in EXHIBIT "1."
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Pursuant to 11 U.S.C. ss.365, Debtors have rejected or hereby reject the
executory contracts and leases identified in EXHIBIT "2."
Any person or entity injured by such rejection shall be deemed to hold an
unsecured Claim against the Debtors to the extent allowed, and, WITHIN TEN (10)
DAYS BEFORE THE INITIAL HEARING ON CONFIRMATION OF THE PLAN, MUST FILE A PROOF
OF CLAIM FOR ANY DAMAGES RESULTING THEREFROM OR BE FOREVER BARRED FROM ASSERTING
ANY CLAIM.
Debtors reserve the right to apply to the Court at any time prior to
Confirmation of the Plan to reject any and all other contracts which are
executory.
ARTICLE VI.
DESCRIPTIONS OF SECURITIES TO BE ISSUED
IN SATISFACTION OF CLAIMS AND INTERESTS
A. IDENTIFICATION OF SECURITIES.
1. ATTRIBUTES OF SECURITIES.
(a) NEW EBIZ COMMON STOCK: Each share of New EBIZ Common Stock shall
be fully paid, non-assessable and entitled to one vote per share; and
(b) NEW EBIZ WARRANTS: Each New EBIZ Warrant shall be transferable
and shall provide the right to purchase newly issued New EBIZ Common Stock. Each
New EBIZ Warrant shall allow the holder to purchase one share of New EBIZ Common
Stock for $0.65 per share, expiring on the date that is sixty (60) days after
the Effective Date.
(c) CANOPY/FFEC WARRANTS: Each Canopy/FFEC Warrant shall be
transferable and shall provide the right to purchase newly issued New EBIZ
Common Stock. Each Canopy/FFEC Warrant shall allow the holder to purchase one
share of New EBIZ Common Stock for $0.65 per share, expiring on the date that is
three years after the Effective Date.
2. DISTRIBUTION OF SECURITIES.
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EBIZ shall issue shares of New EBIZ Common Stock in the Reorganized Debtor
and certificates representing the New EBIZ Warrants and the Canopy/FFEC Warrants
in different ratios to each Class of Claims. EBIZ shall place such securities
into Securities Pool A, Securities Pool B and Securities Pool C on or before the
Effective Date. These securities pools exist for conceptual and not for
substantive purposes. SUCH SECURITIES SHALL NOT BE DEEMED TO BE ISSUED AND
OUTSTANDING UNTIL ACTUALLY DISTRIBUTED BY THE REORGANIZED DEBTOR TO THE
CREDITORS OR EQUITY SECURITY HOLDERS ENTITLED TO RECEIVE SUCH DISTRIBUTION.
Holders of Allowed Claims and Allowed Interests in each Class shall receive
a different percentage of securities from Securities Pool A, Securities Pool B
or Securities Pool C, depending upon the Class in which such creditors or
interest holders are placed under the Plan. Upon the issuance or distribution of
such shares or the shares underlying the warrants at the time the warrants are
exercised, such shares will be deemed fully paid and nonassessable and shall be
entitled to one vote each.
Debtors' best estimates on the number and percentage of securities to be
distributed to each Class are based, in part, upon the dollar amounts of Claims
the Debtors believe to be in those Classes. The number of shares of New EBIZ
Common Stock to be placed into each Securities Pool shall equal the number of
such shares which the Plan requires be issued and distributed to the persons in
each such Class on the Effective Date. Debtors shall place additional shares of
such stock into the relevant Securities Pool, on or before the Effective Date,
upon being informed that any creditor in any Class has exercised any of the
rights provided by this Plan to exchange or convert that creditor's Claim for
equity in the Reorganized Debtor or has exercised or intends to exercise any of
the New EBIZ Warrants or Canopy/FFEC Warrants held by that creditor. The Debtors
estimate the distribution to the different Classes in the following ratios:
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(a) NEW EBIZ COMMON STOCK. 440,000 shares from Securities Pool A are
to be distributed to holders of Allowed Unsecured Claims and, from Securities
Pool C: (i) upon the exercise by members of the FFEC Group of the rights to
exchange debt for equity granted to them under the Plan, up to 2,200,000 shares
are to be distributed to those creditors, (ii) 300,000 shares are to be
distributed to the Transition Management Team, and (iii) 2,538,462 shares are to
be distributed to Canopy; however, only upon the exercise of the rights to
convert debt to equity granted to Canopy under the Plan.
(b) NEW EBIZ WARRANTS.
(1) 440,000 New EBIZ Warrants shall be deposited into Securities
Pool A and be distributed, on a PRO RATA basis to holders of Allowed Unsecured
Claims.
(2) 3,728,185 New EBIZ Warrants shall be deposited into
Securities Pool B and be distributed to holders of Allowed Equity Security
Interests in order to facilitate the contribution of new value by such persons
to the Reorganized Debtor.
(3) 300,000 New EBIZ Warrants shall be deposited into Securities
Pool C for distribution to the Transition Management Team.
(c) CANOPY/FFEC WARRANTS: 253,846 Canopy/FFEC Warrants shall be
distributed to Canopy; and up to 220,000 Canopy/FFEC Warrants are to be
distributed to FFEC depending upon the aggregate amount of the Secured Claims
held by the FFEC Group.
(d) SECURITIES POOL A: Securities Pool A shall consist of the
following securities: (1) NEW EBIZ COMMON STOCK: 440,000 shares of New EBIZ
Common Stock, which shall be issued and distributed on a PRO RATA basis to
holders of Allowed Unsecured Claims on the Effective Date and, if any holder of
an Allowed Unsecured Claim has informed the Debtors or Reorganized Debtor that
he or she intends to exercise any New EBIZ Warrants issued or to be issued to
him or her under the Plan, such additional shares of New EBIZ Common Stock that
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are necessary for the Reorganized Debtor to fulfill its obligations under those
warrants. Any shares which are to be issued to any holder of an Allowed
Unsecured Claim upon the exercise of any New EBIZ Warrant shall only be
distributed upon payment in full of the exercise price of each such Warrant held
by each creditor; and (2) NEW EBIZ WARRANTS: 440,000 New EBIZ Warrants, which
shall be issued and distributed on a PRO RATA basis to holders of Allowed
Unsecured Claims on the Effective Date.
(e) SECURITIES POOL B: Securities Pool B shall consist of the
following securities:
(1) NEW EBIZ WARRANTS: 3,728,185 New EBIZ Warrants, which shall
be issued and distributed on the Effective Date to all holders of Allowed
Interests on a PRO RATA basis; and
(2) NEW EBIZ COMMON STOCK: if any holder of an Equity Security
Interest has informed the Debtors or Reorganized Debtor that he intends to
exercise any New EBIZ Warrants issued or to be issued to him or her under the
Plan, the number of shares of New EBIZ Common Stock that are necessary for the
Reorganized Debtor to fulfill its obligations under those warrants. Any shares
which are to be issued to any holder of an Allowed Interest upon the exercise of
any New EBIZ Warrant shall only be distributed upon payment in full of the
exercise price of each such warrant held by each creditor;
(f) SECURITIES POOL C: Securities Pool C shall consist of the
following securities: (1) NEW EBIZ COMMON STOCK: (i) Up to 2,200,000 shares of
New EBIZ Common Stock which shall be issued and distributed, on a PRO RATA
basis, to each member of the FFEC Group, on the Effective Date, only upon the
exercise by each such member of the rights to exchange debt for equity, set
forth in the Plan; (ii) 300,000 shares of New EBIZ Common Stock to be issued and
distributed to the Transition Management Team, 50% on the Effective Date with
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the remainder to be distributed at the expiration of the Transition Management
Period; and (iii) 2,538,462 shares of New EBIZ Common Stock to be issued and
distributed to Canopy on the Effective Date only upon the exercise by Canopy of
the rights to exchange debt into equity set forth in this Plan; (2) NEW EBIZ
WARRANTS: 300,000 New EBIZ Warrant Units to the Transition Management Team, 50%
on the Effective Date with the remainder to be distributed at the expiration of
the Transition Management Period; and (3) CANOPY/FFEC WARRANTS: (i) 253,846
Canopy/FFEC Warrants to Canopy; and (ii) up to 220,000 Canopy/FFEC Warrants to
FFEC.
(g) DOCUMENTATION OF WARRANTS: The Reorganized Debtor will provide to
each person entitled to receive New EBIZ Warrants one document evidencing the
aggregate number of warrants to be distributed to that person, if that person is
entitled to receive any New EBIZ Warrants of that Class.
3. DIVIDENDS.
No dividends have ever been paid by the Debtors. The declaration of any
future cash or stock dividends will be made at the discretion of the Reorganized
Debtor's board of directors.
It is anticipated that any income received by the Reorganized Debtor will
be devoted to such entity's future operations. The Debtors do not anticipate the
payment of cash dividends on the Reorganized Debtor's common stock in the
foreseeable future, and any decision to pay dividends will depend on the
Reorganized Debtor's profitability, funds legally available therefor and other
factors.
4. TRANSFER AGENT.
The registrar and transfer agent for the New EBIZ Common Stock and New EBIZ
Warrants issued pursuant to the Plan will be Computer Share Investor Services.
5. REPORTING.
The Debtors are subject to the reporting requirements of the Securities
Exchange Act of 1934 (the "1934 Act") at this time.
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6. RESALE OF COMMON STOCK.
(a) RESALES IN GENERAL:
In general, securities issued by a debtor in a Chapter 11 reorganization to
a creditor on account of a claim may be resold by such recipient without further
registration under the 1934 Act or other laws, in reliance on the exemption from
registration provided by the Code. This exemption does not apply to holders who
are deemed "underwriters" with respect to such securities, as the term
"underwriter" is defined in the Code. Securities issued under a plan of
reorganization to new investors do not benefit from a bankruptcy law exemption
from registration.
Section 1145(b)(1) of the Code provides that "except with respect to
ordinary trading transactions," an entity is an "underwriter" if such entity:
(A) purchases a claim against or interest in a debtor with a view to
distribution of any security received in exchange for such claim or interest;
(B) offers to sell securities offered or sold under the Plan for the holders of
such securities (except certain offers to sell fractional interests); (C) offers
to buy securities offered or sold under the Plan from the holders of such
securities if the offer to buy is made with a view to distributing such
securities and the offer to buy if made under an agreement made in connection
with the Plan, with the consummation of the Plan, or with the offer or sale of
securities under the Plan of reorganization; or (D) is an issuer with respect to
a reorganized debtor's securities, as the term "issuer" is used in Section 2(11)
of the 1933 Act.
In the context of the Plan, an "issuer" under Section 2(11) of the 1933 Act
includes any person directly or indirectly controlling or controlled by the
Debtors or any person under direct or indirect control with the Debtors. Whether
a person is an "issuer" and, therefore, an "underwriter" for purposes of Section
1145(b) of the Code depends upon a number of factors, including the relative
size of the shareholder's equity interest in the Debtors; the distribution and
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concentration of other equity interests in the Debtors; whether the person,
either alone or acting in concert with others, has a contractual or other
relationship giving that person power over management policies and decisions;
and whether the person actually has such power notwithstanding the absence of
formal indicia of control.
Because of complex and subjective issues involved in determining issuer and
underwriter status, creditors and equity interest holders are urged to consult
with their attorneys concerning whether they will be able to trade freely any
securities they are to receive under the Plan. NEITHER THE DEBTORS NOR ANY OF
THEIR REPRESENTATIVES MAKE ANY REPRESENTATIONS AS TO WHETHER ANY SECURITIES
ISSUED PURSUANT TO THE PLAN, ONCE PLACED IN THE HANDS OF RECIPIENTS UNDER THE
PLAN, MAY BE FREELY TRADED. Persons who may be underwriters must either register
the securities under the 1933 Act in connection with a resale or use an
applicable exemption from registration.
The Reorganized Debtor is not obligated to register securities issued
pursuant to the Plan or to assist holders of such securities in establishing an
exemption from registration. Accordingly, any entity becoming a holder of such
securities who is determined to be an underwriter may be able to dispose of the
securities only in limited circumstances.
If the Reorganized Debtor has reason to believe that a recipient of its
securities pursuant to the Plan may be an underwriter, the Reorganized Debtor
may require from such recipient a statement that the recipient is aware of
Section 1145 of the Code and the requirements of the 1933 Act regarding resale
of those securities and that those securities held by such recipient will be
sold in compliance with the 1933 Act.
b. STATE "BLUE SKY" LAWS:
State laws affecting resales of securities issued in connection with
bankruptcy reorganizations may vary. Those who become holders of securities
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issued pursuant to the Plan should consult with their attorneys concerning the
applicability of any state law affecting resales of such securities.
(c) LISTING AND TRADING:
IT IS ADVISABLE FOR EACH RECIPIENT OF SECURITIES ISSUED PURSUANT TO THE
PLAN TO CONSULT INDEPENDENT COUNSEL PRIOR TO SELLING THOSE SECURITIES. ALL
CREDITORS AND EQUITY HOLDERS ARE ALSO URGED TO CONSULT COUNSEL REGARDING TAX
CONSEQUENCES OF THE PLAN AND, IN PARTICULAR, ANY TAX CONSEQUENCES OF RECEIVING
SECURITIES UNDER THE PLAN.
ARTICLE VII.
CLASSES DEFINED
A. UNCLASSIFIED CLAIMS.
Unclassified claims include claims for administrative expenses and claims
held by certain governmental entities entitled to priority under 11 U.S.C.
ss.ss.507(a)(1) & (a)(8) of the Code. The holder of each such Claim is entitled
to receive specific treatment under the Plan (i.e., payment cash of the allowed
amount of the Claim), regardless of whether holders of Claims having similar
priority choose to accept different treatment (e.g., deferred cash payments over
time).
The unclassified Claims include all Claims for allowed administrative
expenses, which include the fees and costs incurred by Debtors' counsel in
representing the Debtors in this Case. The unclassified claims also include
Allowed Claims for certain taxes entitled to priority in payment under the Code.
The Debtors estimate that unclassified claims will not exceed, at the time
of Confirmation of the Plan, $100,000.00. The Debtors believe that no amount is
due and owing to the IRS or to other taxing authorities. Any amount agreed by
the parties or found by the Court to be due to the IRS or any other taxing
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authority and entitled to priority shall be distributed by deferred cash
payments over a period not exceeding six years after the date of assessment of
such claim having a value, as of the Effective Date, equal to the allowed amount
of such claim.
The holders of unclassified claims, excluding claims entitled to priority
under Section 507(a)(8), must be paid the allowed amounts of their claims in
cash on the Effective Date of the Plan, unless the claim holders agree to
different treatment.
B. CLASSIFIED CLAIMS.
Most claims and equity interests may be classified or aggregated for
purposes of voting and treatment under the Plan, based upon a substantial
similarity among the claims or interests in the Class. If a Class of claims or
interests votes to accept the Plan, a rejection of the Plan by some of the
holders of the claims or interests in the Class will not, by itself, prevent
Confirmation of the Plan.
The Classes of claims and interests provided for in the Plan are as
follows:
Class 1: The Allowed Secured Claim of Canopy.
Class 2: The Allowed Secured Claim of Ingram Micro Inc. ("Ingram").
Class 3: The Allowed Secured Claim of Caldera Systems, Inc. ("Caldera").
Class 4: The Allowed Secured Claim of Copelco Leasing
Corporation/Citicorp Leasing ("Copelco").
Class 5: The Allowed Secured Claim of Marlin Leasing, Inc.
Class 6: The Allowed Secured Claim of Information Leasing, Inc. ("ILC").
Class 7: The Allowed Secured Claim of ILC [acquired from Finova Loan
Administration, Inc., on September 1, 2001].
Class 8: The Allowed Claims of the general unsecured creditors of the
Debtors.
Class 9: The Claims of the Shadle/Ramsey Group.
Class 10: The Allowed Secured Claims of the FFEC Group.
Class 11: The Allowed Interests.
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C. IDENTIFICATION OF CLASSES IMPAIRED BY THE PLAN.
All Classes of Claims and Interests created by the Plan are considered
"impaired" pursuant to 11 U.S.C. ss.1124. This means, in part, that the Plan
modifies the contractual rights of all holders of Claims and Interests, that
holders of classified Claims will not receive the allowed amounts of their
Claims in cash on the Effective Date of the Plan, and that holders of Allowed
Interests will not retain any fixed liquidation preference or be paid any fixed
redemption amount for equity securities held.
D. TREATMENT OF UNCLASSIFIED CLAIMS.
(ADMINISTRATIVE EXPENSES AND PRIORITY CLAIMS).
1. UNSECURED, ALLOWED PRIORITY CLAIMS (EXCEPT SS.507(a)(8)).
The holders of unsecured priority Claims against the Debtors existing on
the filing date (excluding claims described in 11 U.S.C. ss.507(a)(8)) and all
claims for administrative expenses, including, without limitation, the actual
necessary expenses of preserving the estate, such as attorneys" and accounting
fees, will be paid in cash, in full, on the Effective Date or upon the
expiration of the appeal period of the Order allowing the Claim, whichever is
later, or at such other times as may be mutually agreed upon by the Debtors and
such claimants.
All trade and service debts and obligations incurred in the normal course
of the Debtors' business during the Chapter 11 Case shall be paid when due in
the ordinary course of business.
2. ALLOWED UNSECURED SECTION 507(A)(8) PRIORITY CLAIMS.
The Debtors do not believe they owe any debts to any entities entitled to
priority pursuant to 11 U.S.C. ss.507(a)(8). Each holder of an Allowed Priority
Claim as specified in Section 507(a)(8) of the Code shall receive on account of
such Claim, based on the sole discretion of the Debtors, either: (a) cash in the
full amount of the Allowed Claim on the Effective Date or upon the expiration of
the appeal period of the order allowing the Claim, whichever is later, or (b)
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deferred equal cash payments, payable quarterly beginning ninety (90) days after
the Effective Date or upon the expiration of the appeal period of the Order
allowing the Claim, whichever is later, and made during a period not exceeding
six (6) years after the date of assessment of such Claim, of value, as of the
Effective Date of the Plan, equal to the allowed amount of such Claim, which
payments shall include interest on the Allowed Claim at the appropriate
statutory rate.
E. TREATMENT OF CLASSIFIED CLAIMS AND INTERESTS.
1. CLAIM AMOUNTS.
Because certain of the Claims against the Debtors are in unknown or
undetermined amounts, the amounts of Claims specified in the Plan reflect only
the Debtors' best estimate as of the date hereof. A list of creditors and Claim
amounts are included in the Schedules and Statement of Affairs filed by the
Debtors in this Case on September 7, 2001. The Debtors reserve the right to
object to any Claim and any Interest noted in the Schedules and Statement of
Affairs, or any other Claim asserted against the Debtors, either prior to or
following Confirmation of the Plan. Objections to Claims must be filed within
sixty (60) days following the Effective Date of the Plan.
The Debtors shall distribute all securities to holders of Allowed Claims
and holders of Allowed Interests, pursuant to the terms of the Plan, on the
Effective Date. In calculating the number of shares to be distributed pursuant
to the formulae set forth below, the number of such shares to be distributed to
each holder of an Allowed Claim or Allowed Interest shall be rounded down to the
next whole number.
(a) CLASS 1: Canopy holds a Secured Claim in the aggregate principal
amount of $4,402,336.00. This Claim is secured by a first position security
interest in all of the assets of the JBSI Bankruptcy Estate and a second
position lien in all of the assets of the EBIZ Bankruptcy Estate. Following the
Effective Date until it has received payment in full, Canopy shall retain its
lien in all such property and the aggregate amount of principal due to Canopy
shall bear interest at the rate of 8% PER ANNUM.
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Payments to Canopy shall be made in the following manner and according to
the following terms:
(i) Pursuant to the terms of the Cash Collateral Stipulation
between Canopy and the Debtors, from the date of that Stipulation through
December 31, 2001, Canopy was permitted to and did withhold and apply to the
principal balance and interest due to Canopy five percent (5%) of the amount of
each receivable belonging to the Reorganized Debtor which is received by Canopy
under the "lockbox" arrangement referenced in the Cash Collateral Stipulation
and the Canopy Agreements;
(ii) Thereafter, the Reorganized Debtor shall make regular
monthly payments to Canopy of interest only, beginning on January 1, 2002 and
continuing through October of 2002; and
(iii) Thereafter, the Reorganized Debtor shall make regular
monthly payments of principal and interest in the amount of $53,030.00 to Canopy
beginning on November 1, 2002 and continuing thereafter for a period of five
years with a final balloon payment in the amount of all remaining principal,
interest and other charges then due to Canopy on November 1, 2007.
In addition, Canopy shall have the right to convert a portion of its
Secured Claim in an amount that shall not exceed $1,500,000.00 into shares of
stock of the Reorganized Debtor. The conversion rates for Canopy's debt shall be
as follows: $0.50 per share for the first $500,000 of debt converted into stock
in the Reorganized Debtor and $0.65 per share for any remaining debt so
converted. Canopy shall be required to exercise its conversion rights on or
before that date which is thirty (30) days after the Effective Date by sending
to the Reorganized Debtor a written notice stating the dollar amount of its
Secured Claim that Canopy has elected to convert into stock. Finally Canopy
shall receive a distribution on the Effective Date of 253,846 Canopy/FFEC
Warrants from Securities Pool C.
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(b) CLASS 2: Ingram holds a Secured Claim in the aggregate principal
amount of $88,042.00. This Claim is secured by a first position security
interest in all of the assets of the EBIZ Bankruptcy Estate. Following the
Effective Date until it has received payment in full, Ingram shall retain its
lien in all such property and the aggregate amount of principal due to Ingram
shall bear interest at the rate of 8% PER ANNUM, with accrual of such interest
commencing as of the Petition Date.
Payments to Ingram shall be made in the following manner and according to
the following terms: (i) regular monthly payments of interest only beginning on
July 1, 2002; (ii) equal payments of principal and interest in the amount of
$1,454.77 beginning on January 1, 2003 and continuing on the first day of each
month thereafter for a period of five years with a final balloon payment of all
remaining principal and interest due on January 1, 2008.
(c) CLASS 3: Caldera holds a Secured Claim in the aggregate principal
amount of $535,000.00. This Claim is secured by a third position security
interest in all of the assets of the EBIZ Bankruptcy Estate and a second
position security interest in all of the assets of the JBSI Bankruptcy Estate.
Following the Effective Date until it has received payment in full, Caldera
shall retain its lien in all such property and the aggregate amount of principal
due to Caldera shall bear interest at the rate of 8% PER ANNUM, with accrual of
such interest commencing as of the Effective Date.
Payments to Caldera shall be made in the following manner and according to
the following terms: (i) regular monthly payments of interest only beginning on
July 1, 2002; (ii) equal payments of principal and interest in the amount of
$8,338.62, beginning on January 1, 2003 and continuing on the first day of each
month thereafter for a period of five years with a final balloon payment of all
remaining principal and interest due on January 1, 2008.
(d) CLASS 4: Copelco holds a Secured Claim in the aggregate principal
amount of $295,995.62. This Claim is secured by a security interest in office
furniture, a computer system network and a Konica copy printer and controller,
property, which is essential for the Debtors' operations, by virtue of three
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"financing" or "capitalized" leases. Following the Effective Date, until it has
received payment in full, Copelco shall retain its lien in all such property.
Since the value of its collateral is less than the amount of its Secured Claim,
Copelco shall be paid $70,735.17.00 (the "Discounted Balance"); that is, the
value of their collateral, in full satisfaction of its Secured Claim.
Payments to Copelco shall be made in the following manner and according to
the following terms: regular monthly payments in the amount of $2,447.30
beginning on March 1, 2002 until the Discounted Balance is paid in full. Upon
payment in full of the Discounted Balance, all liens, security interests or
other Claims of Copelco in or to the equipment serving as its collateral shall
terminate and be released, and the Reorganized Debtor shall own that property
free and clear of all such liens or Claims of Copelco.
(e) CLASS 5: Marlin Leasing holds a Secured Claim in the aggregate
principal amount of $24,400.00. This Claim is secured by a security interest in
pallet racks, equipment that is essential for the Debtors' operations, by virtue
of a "financing" or "capitalized" lease with JBSI. Following the Effective Date,
until it has received payment in full, Marlin Leasing shall retain its lien in
all such property. Since the value of its collateral is less than the amount of
its Secured Claim, Marlin Leasing has agreed to accept $13,500.00 (the
"Discounted Balance") in full satisfaction of its Secured Claim.
Payments to Marlin Leasing shall be made in the following manner and
according to the following terms: regular monthly payments in the amount of
$562.50 beginning on March 1, 2002 until the Discounted Balance is paid in full.
Upon payment in full of the Discounted Balance, all liens, security interests or
other Claims of Marlin Leasing in or to the equipment serving as its collateral
shall terminate and be released, and the Reorganized Debtor shall own that
property free and clear of all such liens or Claims of Marlin Leasing.
(f) CLASS 6: ILC holds a Secured Claim in the aggregate principal
amount of $8,398.93. This Claim is secured by a security interest in computer
systems and software, equipment that is essential for the Debtors' operations,
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by virtue of a "financing" or "capitalized" lease with JBSI. Following the
Effective Date, until it has received payment in full, ILC shall retain its lien
in all such property. Since the value of its collateral is less than the amount
of its Secured Claim ILC has agreed to accept $1,550.00 (the "Discounted
Balance") in full satisfaction of its Secured Claim.
Payments to ILC have been and shall be made in the following manner and
according to the following terms: a monthly payment in the amount of $775.00 on
December 1, 2001 and a final payment in the amount of $775.00 on January 1,
2002. Upon payment in full of the Discounted Balance, all liens, security
interests or other Claims of ILC in or to the equipment serving as its
collateral shall terminate and be released, and the Reorganized Debtor shall own
that property free and clear of all such liens or Claims of ILC.
(g) CLASS 7: ILC holds an additional Secured Claim in the aggregate
principal amount of $82,006.40 acquired from Finova Loan Administration, Inc.,
on December 1, 2001. This Claim is secured by a security interest in modular
office furniture, property that is essential for the Debtors' operations, by
virtue of a "financing" or "capitalized" lease with JBSI. Following the
Effective Date, until it has received payment in full, ILC shall retain its lien
in all such property. Since the value of its collateral is less than the amount
of its Secured Claim, ILC has agreed to accept $22,000.00 (the "Discounted
Balance") in full satisfaction of its Secured Claim.
Payments to ILC shall be made in the following manner and according to the
following terms: regular monthly payments in the amount of $916.67 beginning on
December 5, 2001 until the Discounted Balance is paid in full. Upon payment in
full of the Discounted Balance, all liens, security interests or other Claims of
ILC in or to the equipment serving as its collateral shall terminate and be
released, and the Reorganized Debtor shall own that property free and clear of
all such liens or Claims of ILC.
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(h) CLASS 8: Unsecured Creditors holding Allowed Class 8 Claims shall
receive biannual cash payments over a period of two years from the Reorganized
Debtor in an amount equal to five percent of the aggregate amount of unsecured
claims which have been timely filed (except for the claims of Loki________,
Inc., Red Hat ____, Inc. and _________) or listed in the Debtors' Schedules as
undisputed, contingent and liquidated plus New E-BIZ Common Stock and New EBIZ
Warrants, plus all of the proceeds, less legal expenses and costs, from the
Creditors' Trust (the "Trust Distribution"). Since the holder of any Allowed
Unsecured Claim will receive, IN ADDITION to a payment of five percent of that
claim, his, her or its PRO RATA share of: (i) the funds in the Cash Pool that
would have been distributed to the holder of any unsecured claim(1) which is
disallowed by order of the Court; and (ii) the Trust Distribution, it is highly
likely that each holder of an Allowed Unsecured Claim will be paid an amount
that is greater than five percent of his, her or its claim.
More specifically, each creditor in this Class shall receive, in full
satisfaction of its Claim, the following: (1) four equal biannual payments from
the Cash Pool equal to that creditor's PRO RATA portion of the Cash Pool,
beginning on the date which is six months after the Effective Date; (2) that
holder's PRO RATA share of Securities Pool A on the Effective Date. The
Reorganized Debtor shall issue such additional shares of the Reorganized Debtor
to the Class 8 holders of claims so that each holder shall have at least one
share and one warrant; and (3) that holders PRO RATA share of the Trust
Distribution.
It is not possible, at this time, to determine the value of the securities
to be distributed to the holders of allowed claims in this or any other class.
The number of shares and warrants which each creditor in this class will receive
will be dependent upon the aggregate amount of Allowed Claims. Since that amount
is not known as of the date of the filing of the Plan, it is not possible to
- ----------
(1) The claims of Loki________, Inc., Red Hat ____, Inc. and _________ are
specifically excepted from the formula for calculating the payments into
and distributions from the Cash Pool. Therefore, if those claims are
disallowed by the Court, the amount that would have otherwise been paid to
those creditors will not be part of the Cash Pool and not be paid to
holders of Allowed Unsecured Claims.
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specify the exact number of shares which creditors will receive on account of
each $1,000.00 of unsecured claims.
The aggregate amount of nonpriority unsecured claims, as stated in the
Debtors' Schedules, is $12,857,651. For purposes of estimation and illustration
only: Assuming that all such claims remain as, or are determined to be, Allowed
Claims, creditors in this Class would be entitled to receive 34 shares of New
EBIZ Common Stock and 34 New EBIZ Warrants for each $1,000.00 of debt.
On or before the date that is (30) days after the Effective Date, New EBIZ
shall set up a bank account at Southwest Bank of Texas (the "CASH POOL
ACCOUNT"). Thereafter, the Reorganized Debtor shall make periodic deposits of
cash into the Cash Pool Account, which shall equal the amount of each biannual
payment to members of Class 8 required by the terms of the Plan, and shall
distribute the balance of the Cash Pool to holders of Allowed Unsecured Claims
in the amounts and on the dates required by the Plan.
Prior to the Effective Date, the Debtors or the Reorganized Debtor and the
Committee, through their respective legal counsel, shall prepare all documents
necessary to create the Creditors' Trust. On the Effective Date, all claims and
causes of action arising or existing under the Code shall be assigned, by virtue
of a term of the Confirmation Order, to the Creditors' Trust. The Creditors'
Committee and the Debtors or Reorganized Debtor shall select the individual to
serve as the Trustee of the Creditors' Trust on or before the date which is 30
days after the Effective Date. Thereafter, the Trustee shall have standing and
the right to retain his or her own legal counsel to prosecute any of the
Assigned Claims and to object to any claims for the benefit of the Creditors'
Trust.
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The Trustee and his or her legal counsel shall be entitled to be paid their
reasonable fees and costs from the proceeds of the Assigned Claims. The Debtors,
the Reorganized Debtor and the Bankruptcy Estate shall not be liable for any
portion of the Trustee's fees or costs or the attorneys fees and costs of the
Creditors Trust and are not and shall not be required to pay any amounts to or
for the benefit of the Creditors' Trust. The only sources for satisfaction of
the fees and costs that may be incurred by the Trustee and his or her attorneys
shall be the proceeds of the Assigned Claims or any individual creditors which
may decide to advance such sums to the Creditors' Trust.
On every six month anniversary of the Effective Date, the Trustee shall
distribute the entire balance of the Creditors' Trust, less the aggregate amount
of accrued fees and costs of the Trustee and his or her legal counsel and a
reserve for future fees and costs in an amount deemed to be appropriate by the
Trustee. The Trustee shall provide a written report and accounting to all
holders of Class 8 Claims on each one year anniversary of the Effective Date.
(i) CLASS 9: Each member of the Shadle/Ramsey Group holds a disputed
unsecured Claim. Rather than participate in costly Claims litigation with the
Debtors or the Reorganized Debtor, the Shadle/Ramsey Group has agreed to forego
treatment under Class 8 and, instead, accept, in full satisfaction of their
Claims, distribution of only the shares of stock held by JBSI in Vericenter.
Since Vericenter is a closely held private corporation with significant
financial difficulties and JBSI only owns a noncontrolling minority interest in
Vericenter, the Debtors believe that the value of the shares of Vericenter stock
held by JBSI is zero. No member of the Shadle/Ramsey Group will be treated as a
creditor under Class 8 or receive any portion of the cash or stock distributions
provided to holders of Allowed Unsecured Claims.
(j) CLASS 10: Each member of the FFEC Group shall have the right to:
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(1) Receive payments from the Reorganized Debtor, pursuant to
the terms of the promissory notes issued by the Debtors to the FFEC Group under
Section 364 of the Code (the "364 Notes"). All members of the FFEC Group who
elect to receive payments pursuant to their 364 Notes shall retain their lien
securing their claims until such time as all amounts due under those notes have
been paid in full; or
(2) Exchange all or a portion of the secured debt represented by
such notes for shares of New EBIZ Common Stock at the price of $0.50 for each
such share of stock (two shares of New EBIZ Common Stock for each dollar of
secured claim). Any member of the FFEC Group desiring to exchange any portion of
her or his Allowed Secured Claim for New EBIZ Common Stock shall be required to
do so in the following manner: (i) marking the appropriate box on the ballot
accepting or rejecting the Plan and indicating the amount of her or his Claim
which she or he elects to exchange for such stock; or (ii) sending the Debtors a
written notice of her or his decision to make that exchange and specifying the
amount of her or his Claim which she or he elects to exchange for such stock on
or before the date which is thirty (30) days after the Effective Date. The
amount of the promissory note held by each member of the FFEC Group electing to
exchange all or a portion of her or his Allowed Secured Claim for shares of new
EBIZ Common Stock shall be immediately reduced by the dollar amount that she or
he has elected to exchange.
(3) Exchange all or a portion of the secured debt represented by
such notes for new secured promissory notes (the "New Notes") to be issued under
this Plan, pursuant to 11 U.S.C. ss.1145, and which shall provide as follows:
(i) All principal and accrued interest shall be due under each New Note on the
date which is seven years after the Effective Date (the "New Note Maturity
Date"); (ii) interest shall accrue at the rate of 6% PER ANNUM beginning on the
date that any such creditor elects to exchange her or his 364 Note for a New
Note and continuing thereafter until the date that is 24 months after the
Effective Date; thereafter interest shall accrue at the rate of 5% PER ANNUM
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until the date which is 36 months after the Effective Date; thereafter interest
shall accrue at the rate of 4% PER ANNUM until the New Note Maturity Date; (iii)
the Reorganized Debtor shall make quarterly payments of interest only to each
holder of a New Note until the Note Maturity Date; (iv) each holder of a New
Note shall have the right to convert the amount of that New Note into shares of
New EBIZ Common Stock at the conversion price of $0.50 for each such share of
stock for 24 months after the Effective Date; thereafter, the holders of New
Notes will have no further conversion rights under the New Notes; (v) All
amounts due under all New Notes shall automatically convert into shares of New
EBIZ Common Stock at the conversion price of $0.50 for each such share of stock
if, during the period from the Effective Date to the date that is 24 months
thereafter, the average of the trading session ending market prices for the
Reorganized Debtor's common stock for 30 consecutive market days is equal to or
greater than $2.50 per share; (vi) The amounts due under the New Notes shall be
secured by all of the asset of the Reorganized Debtor to the same extent and
with the same priority the liens securing the 364 Notes; (vii) All amounts due
under the New Notes shall be subordinated to any new debt financing obtained by
the Reorganized Debtor with a factoring company or an asset based lender on
ordinary commercial terms.
Any member of the FFEC Group desiring to exchange her or his Allowed
Secured Claim for a New Note shall be required to do so in the following manner:
(i) marking the appropriate box on the ballot accepting or rejecting the Plan;
or (ii) sending the Debtors a written notice of her or his decision to make that
exchange on or before the date which is thirty (30) days after the Effective
Date.
In addition, in the event that the aggregate amount of Secured Claims held
by the FFEC Group is equal to or greater than $300,000.00, FFEC, as the agent
for the FFEC Group, shall receive a distribution from Securities Pool C of that
number of Canopy/FFEC Warrants equal to the aggregate amount of the Secured
Claims held by the FFEC Group divided by five; that is, FFEC shall receive one
such warrant for each five dollars of Secured Claims held by the FFEC Group.
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(j) CLASS 11: Class 11 shall consist of all holders of Allowed
Interests in the Debtors. All of the Old Common Stock and Old Preferred Stock of
the Debtors shall be canceled by operation of this Plan and the holders of
Allowed Interests shall retain none of their Old Common Stock, Old Preferred
Stock or other interests in the Debtors.
Each holder of Class 11 Allowed Interests shall, however, have the right to
contribute "new value" to the Reorganized Debtor. Accordingly, in order to
facilitate the contribution of new value, each person holding an Allowed
Interest shall receive that holder's PRO RATA portion of the New EBIZ Warrants
in Securities Pool B and may pay to the Reorganized Debtor a dollar amount
necessary to exercise the rights associated with such warrants and receive New
EBIZ Common Stock.
2. DISPUTED CLAIMS. The Reorganized Debtor and its attorneys or the
Trustee of the Creditors' Trust and his or her attorneys may file on or before
120 days from the Effective Date of the Plan: (a) an Objection to any Claim; (b)
a Motion to determine the extent, priority, or amount of any Secured or other
Claim; or (c) a Complaint to determine the validity, priority or extent of any
lien or other interest in property of the Debtors' estate.
Copies of responsive pleadings to all such Objections, Motions or
Complaints must be served upon the Reorganized Debtor's attorney: CHRISTOPHER R.
KAUP, ESQ. OF TIFFANY & BOSCO, P.A., 1850 NORTH CENTRAL AVENUE, FIFTH FLOOR,
PHOENIX, ARIZONA, 85004, FACSIMILE: 602-255-0103.
Except as set forth in the next paragraph below, ifan objection is made to
any Claim or to any Motions or proceedings filed in regard to any lien, Claim,
or privilege, any payments or distributions of securities that are due in
accordance with the Plan shall be held in trust by the Reorganized Debtor,
subject to the Court's jurisdiction, in an interest-bearing or escrow account or
accounts in Phoenix, Arizona, which account or accounts shall be federally
insured (in the event of a distribution of a cash payment) and segregated unless
otherwise stated herein or, in the alternative, one or more of the following
will be provided:
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(a) A letter of credit or other bond; or
(b) Certificates of Deposit or other security satisfactory to the
Court to assure the payment of the Claim.
In the event that an objection is filed by the Reorganized Debtor or the
Trustee of the Creditors' Trust to any unsecured claim, with the exception of
the claims filed by Loki ______,Inc., Red Hat ___, Inc., and ________, the
amount that would be paid to that creditor shall be held in the Cash Pool
pending resolution of that objection.
Within thirty (30) days after entry of a final, non-appealable Order
resolving any disputed Claim, lien or privilege, payment, including accrued
interest, or securities shall be distributed to the claimant (subject to the
terms of the Plan) or any other entity entitled to distribution in accordance
with the Court's Order.
3. PENALTY CLAIMS. No creditor, whether secured, unsecured, priority or
non-priority shall be entitled to any fine, penalty, exemplary or punitive
damages, late charges, default interest, or any other monetary charge relating
to or arising from any act or omission by the Debtors, and any Claim for such
sums shall be deemed disallowed, whether or not a specific objection to the
allowance of such sums is filed. Creditors with Allowed Secured Claims shall be
entitled to reasonable attorneys' fees and interest at a non-default rate,
subject to the limitations of Section 506 of the Code.
4. UNCLAIMED DISTRIBUTIONS. All distributions of money or securities
under the Plan which are returned by the Post Office undelivered or which cannot
be delivered due to the distributee's failure to provide the Reorganized Debtor
with a current address will be retained by the Reorganized Debtor in trust in a
federally insured bank (in the event of a distribution of a cash payment) or in
an escrow account (in the event of a distribution of securities) for the
distributee. After the expiration of six (6) months from the date of the first
attempted distribution, any unclaimed monies, securities and all future
distributions will vest in the Reorganized Debtor, free of any Claim of the
distributee.
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ARTICLE VIII.
POSTCONFIRMATION BUSINESS OPERATIONS.
After the Effective Date, the Reorganized Debtor will continue its business
through the Operating Subsidiaries and manage its affairs without supervision by
the Bankruptcy Court, and it may enter into agreements to transfer, convey,
encumber, use and lease any and all of its assets.
ARTICLE IX.
OWNERSHIP OF THE DEBTORS' ASSETS
As of the Effective Date of the Plan, the Reorganized Debtor shall be
vested with ownership of all property of the Debtors' Chapter 11 estate, as
defined in 11 U.S.C. ss.541, and as provided for in the Plan. All such property
shall be transferred to the Reorganized Debtor in the manner described in
Article XV below. Upon such transfer, the Reorganized Debtor shall own all such
property free and clear of all liens, Claims and interests of any person or
entity, except as specifically provided in the Plan or the Confirmation Order.
ARTICLE X.
CONTINUATION AND TERMINATION OF SECURITY INTERESTS
Unless otherwise provided in the Plan or in the Confirmation Order, all
creditors possessing Allowed Secured Claims shall retain their liens on any of
their collateral the Reorganized Debtor acquires to secure payment of all cash
or other property to be distributed to them pursuant to the terms of the Plan.
Such liens on the Reorganized Debtor's property shall be deemed relinquished and
reconveyed to the Reorganized Debtor upon the payment to the holders of such
liens of all money, property or securities due them in satisfaction of their
Allowed Secured Claims pursuant to the terms of the Plan.
Moreover, once any lien is deemed relinquished and reconveyed to the
Reorganized Debtor pursuant to the terms of the Plan, the creditor who had
claimed such lien shall immediately deliver to the Reorganized Debtor all
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documents, properly signed and notarized, needed to document the release of the
lien according to any applicable state or federal law. If the required
documentation is not supplied WITHIN ONE (1) WEEK after demand therefor has been
made, the Reorganized Debtor may seek an order from the Court enforcing the lien
release provisions of the Plan or entry of an Order declaring the lien to be
released or void.
Except as stated previously in this Article, all security interests and
liens of any kind in any property the Reorganized Debtor acquires under the Plan
shall terminate and shall be deemed to have terminated upon the Effective Date
of the Plan.
ARTICLE XI.
INSURANCE
The Reorganized Debtor shall maintain insurance on all of its tangible
personal and real property in an amount not less than the fair market value of
that property and shall keep its property in good repair, reasonable wear and
tear excepted.
ARTICLE XII.
SATISFACTION OF CLAIMS AND INTERESTS
All Classes of Allowed Claims and Allowed Interests shall receive the
distributions set forth herein on account of and in complete satisfaction of
those Allowed Claims and Interests. Without limiting the foregoing, upon the
Effective Date of the Plan, each holder (and each successor of a holder) of an
Allowed Claim or an Allowed Interest shall be deemed to have waived,
relinquished and released any and all of its rights and Claims against the
Debtors and the Reorganized Debtor, except as provided in the Plan or the
Confirmation Order.
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ARTICLE XIII.
BINDING NATURE OF THE PLAN
Upon the entry of the Order Confirming the Plan, the Plan shall bind the
Debtors, the Reorganized Debtor, all entities that are to acquire any property
under the Plan, all creditors, and all equity security holders of the Debtors,
whether or not their Claims and Interests are impaired under the Plan and
whether or not they have accepted the Plan, as determined by Section 1141(a) of
the Code.
This means, in part, that, except as provided by an express order of the
Bankruptcy Court or pursuant to the terms of the Plan or the Order Confirming
the Plan, all judicial, administrative or other actions or proceedings pending
against the Debtors or arising out of Claims accrued prior to Confirmation of
the Plan shall be permanently enjoined.
ARTICLE XIV.
TERMINATION OF THE AUTOMATIC STAY AND DISCHARGE
The automatic stay imposed by 11 U.S.C. ss. 362(a) shall terminate when the
Confirmation Order becomes nonappealable. Pursuant to Section 1141(a) of the
Code, the entry of the Confirmation Order shall permanently bar the filing and
asserting of any Claims against the Debtors and the Reorganized Debtor which
arose or relate to the period of time prior to the date of entry of that Order,
except as provided in the Plan or the Order Confirming the Plan.
ARTICLE XV.
IMPLEMENTATION OF THE PLAN
The Plan will be implemented, in part, as follows:
1. On the Effective Date, New EBIZ shall become the Reorganized Debtor.
2. The board of directors of the Reorganized Debtor shall oversee
implementation of the Plan and be fully empowered to act for the Debtors to
implement the Plan.
3. The board of directors of the Reorganized Debtor shall take the
necessary actions to:
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(a) transfer all of the assets of JBSI to New EBIZ;
(b) form, deposit funds into and distribute funds from the Cash Pool,
pursuant to the terms of this Plan;
(c) form Securities Pool A, Securities Pool B and Securities Pool C,
pursuant to the provisions of the Plan and then distribute all the New EBIZ
Common Stock, the New EBIZ Warrants and Canopy/FFEC Warrants from Securities
Pool A, Securities Pool B and Securities Pool C in satisfaction of all Claims by
creditors against the Debtors pursuant to the terms of the Plan;
(d) After all such implementation actions have been completed, JBSI
shall have no remaining assets and no remaining liabilities and shall be
formally dissolved in accordance with Texas law;
5. The articles of incorporation and the bylaws of the Reorganized Debtor
shall be deemed to be amended in every way necessary to comply with and
effectuate the terms and conditions of the Plan;
6. The board of directors of the Reorganized Debtor shall have all of the
powers granted any board of directors by the Arizona statutes and any other
applicable state or federal laws;
7. The board of directors of the Reorganized Debtor shall have the power
to amend the articles of incorporation or the bylaws in any manner necessary to
carry out the provisions of the Plan. The board of directors shall be entitled
to use and exercise all pertinent provisions of state and federal law;
8. To implement the issuance of the securities provided for in the Plan,
the board of directors of the Reorganized Debtor shall take all necessary steps
required by the Code, federal and state laws and, in order to perform such
implementation in a cost effective manner, the board of directors shall have the
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authority to vary, alter or revise any of the steps outlined above so long as
such change does not negatively affect any of the distributions provided for by
the Plan;
9. The board of directors of the Reorganized Debtor shall have the
authority to make provision for payment of cash and/or distribution of
securities to creditors as required hereby on the Effective Date of the Plan or
as otherwise provided herein; and
10. The Reorganized Debtor shall have the right to distribute any
securities directly into an account at any insured and registered broker-dealer
and shall notify all persons entitled to receive such securities under the terms
of this Plan that the securities are available for distribution into their
respective individual accounts at the broker-dealer of their selection. In the
event that the Reorganized Debtor is not notified of or not otherwise aware of
the existence of an account for a particular recipient of securities under this
Plan, the Reorganized Debtor is further empowered to place any such securities
into an escrow account with a registered broker-dealer and then the Reorganized
Debtor shall be further empowered to act as the escrow agent to hold but not
vote, sell nor determine the disposition of any such securities. Any shareholder
that desires to have physical possession of certificates shall pay the standard
price to the Transfer Agent for the issuance of each such certificate. The
Reorganized Debtor may assist creditors in opening broker-dealer accounts in any
reasonable way to receive any securities.
ARTICLE XVI.
MODIFICATION OF AND AMENDMENTS TO THIS PLAN
Prior to the entry of the Order Confirming this Plan, the Debtor may
propose amendments or modifications in accordance with 11 U.S.C. ss.1127(a).
After Confirmation of the Plan, the Reorganized Debtor may amend this Plan in
the manner provided by Section 1127(b) of the Bankruptcy Code.
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The Court may, at any time, so long as it does not materially or adversely
affect the interests of creditors and equity interest holders, remedy defects
and omissions or reconcile any inconsistencies herein or in the Confirmation
Order as may be appropriate to effectuate the Plan.
ARTICLE XVII.
REMEDIES FOR DEFAULTS BY THE REORGANIZED DEBTOR
If the Reorganized Debtor fails to comply with the terms hereof, the
holders of unsecured Claims or equity interests in any class materially harmed
thereby may proceed against the Reorganized Debtor and its property to enforce
this Plan, taking any action permissible under federal or state law, in any
court of competent jurisdiction.
With respect to holders of liens on the Reorganized Debtor's property, such
creditors may act in accordance with any applicable and existing mortgage, deed
of trust, security agreement, or other instrument evidencing a lien or
encumbrance on their collateral.
ARTICLE XVIII.
RETENTION OF BANKRUPTCY COURT JURISDICTION
Following Confirmation of the Plan, the Court shall retain, without
limitation, jurisdiction for the following purposes and to provide any relief
the Reorganized Debtor may require to effectuate the Plan or any modification of
the Plan:
1. Deciding the proper classification of any Claim, determining the
proper allowance for purposes of distribution of Claims estimated for purposes
of voting, and resolving objections to Claims;
2. Resolving all disputes regarding title to assets of the Reorganized
Debtor and all disputes arising under the Bankruptcy Code;
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3. Hearing all matters and deciding all issues regarding the prosecution
by the Debtor or the Reorganized Debtor of any Complaints or causes of action
and preference Claims against any person;
4. Correcting of any defect, curing any omission, or reconciling any
inconsistency between the Plan and the Confirmation Order as may be appropriate
to effectuate the purposes and intent of this Plan;
5. Modifying the Plan after Confirmation of the Plan;
6. Enforcing and interpreting the terms and conditions of the Plan, any
securities issued under the Plan, or any other documentation effectuating the
Plan;
7. Resolve any Claims or causes of action, including any avoidance
actions arising by operation of U.S.C. ss.ss.542 through 551, against any
creditors or equity security holders held by the Debtor, the Reorganized Debtor
or any creditors of the Debtor;
8. Entering any order required to enforce the rights and powers of the
Reorganized Debtor;
9. Determining any Claim entitled to priority under Section 507 of the
Code; and
10. Entering any Order required to close the Debtors' Case.
ARTICLE XIX.
REQUEST FOR CONFIRMATION
The Debtor requests entry of a Confirmation Order pursuant to Section 1129
of the Bankruptcy Code.
DATED this 24th day of January, 2002.
TIFFANY & BOSCO, P.A.
/s/ C.K. #014820
------------------------------
Christopher R. Kaup, Esq.
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Fifth Floor Viad Tower
1850 North Central Avenue
Phoenix, Arizona 85004-4546
Attorneys for Debtors
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EBIZ ENTERPRISES, INC.
By: /s/ Bruce Parsons
---------------------------
Bruce Parsons
Its President and CEO
JONES BUSINESS SYSTEMS, INC.
By: /s/ Bruce Parsons
---------------------------
Bruce Parsons
Its Chief Executive Officer
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EXHIBIT "1"
ASSUMPTION OF EXECUTORY CONTRACTS AND LEASES
NONE
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EXHIBIT "2"
REJECTION OF EXECUTORY CONTRACTS AND LEASES
The following leases of equipment are, hereby, rejected by the Debtors:
LESSOR EQUIPMENT/PROPERTY
------ ------------------
1. Raymond Leasing Forklift
2. Pitney Bowes Postage Machine
3. Avaya Financial Telephone System
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