SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) - April 9, 1997
UNITED MERCHANTS AND MANUFACTURERS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-3185 13-1426280
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
Two Executive Drive, Fort Lee, N.J. 07024-3308
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (201) 585-2100
Item 3. Bankruptcy or Receivership.
As previously reported, the Registrant and its 80%-owned
subsidiary, Reunited Holdings, Inc. (formerly Victoria Creations,
Inc.), each filed petitions for reorganization relief under
Chapter 11 of the United States Bankruptcy Code on February 22,
1996. The petitions were filed with the United States Bankruptcy
Court for the Southern District of New York ("Court").
Registrant and its subsidiary continued to operate their
respective businesses as debtors-in-possession while the
reorganization cases were pending.
Registrant and its subsidiary each filed an Amended and Restated
Reorganization Plan with the Court dated February 25, 1997.
After the solicitation procedures set forth by the Court were
completed, a confirmation hearing was held on April 9, 1997. At
the conclusion of the hearing, the Amended and Restated
Reorganization Plan of the Registrant (and of its subsidiary) was
confirmed by the Court.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
Exhibit 2.1 Amended and Restated Reorganization Plan of United
Merchants and Manufacturers, Inc., dated February
25, 1997
Exhibit 99.1 Findings of Fact, Conclusion of Law, and Order
under 11 U.S.C. Sections 1129(a) and (b) and Fed.
R. Bankr. P. 3020 Confirming Amended and Restated
Reorganization Plan of United Merchants and
Manufacturers, Inc. Dated February 25, 1997, dated
April 10, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
United Merchants and Manufacturers, Inc.
Date April 24, 1997 By /s/ Norman R. Forson
Norman R. Forson
Senior Vice President
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - - -x
In re :
: Chapter 11
UNITED MERCHANTS AND : Case Nos. 96 B 40940 (AJG)
MANUFACTURERS, INC. AND : and 96 B 40941 (AJG)
VICTORIA CREATIONS, INC., : (Jointly Administered)
:
Debtors. :
- - - - - - - - - - - - - - - - - - - - - -x
AMENDED AND RESTATED REORGANIZATION PLAN
OF UNITED MERCHANTS AND MANUFACTURERS, INC.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for United Merchants and
Manufacturers, Inc.,
Debtor-in-Possession
MICHAEL L. COOK (MC 7887)
LAWRENCE V. GELBER (LG 9384)
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
Dated: New York, New York
February 25, 1997
TABLE OF CONTENTS
PAGE
INTRODUCTION
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION,
AND COMPUTATION OF TIME
A. Scope Of Definitions....................................... 1
B. Definitions................................................ 1
C. Rules Of Interpretation.................................... 8
D. Computation Of Time........................................ 8
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. Introduction............................................... 8
B. Unclassified Claims........................................ 8
1. Administrative Claims................................ 8
2. Priority Tax Claims.................................. 8
C. Impaired Classes Of Claims................................. 8
1. Class 1: Other Priority Claims...................... 8
2. Class 2: Secured Claims............................. 9
(a) Class 2.01: Foothill Secured Claims............ 9
(b) Class 2.02: Old Subordinated
Debentures Secured Claims................... 9
(c) Class 2.03: Other Secured Claims.............. 9
D. Impaired Classes Of Claims................................. 9
1. Class 3: General Unsecured Claims................... 9
2. Class 4: Subordinated Claims........................ 9
3. Class 5: Old Preferred Stock Interests.............. 9
4. Class 6: Old Common Stock Interests................. 9
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. Unclassified Claims........................................ 9
1. Administrative Claims................................ 9
2. Priority Tax Claims.................................. 10
B. Impaired Classes Of Claims................................. 10
1. Class 1: Other Priority Claims...................... 10
2. Class 2: Secured Claims............................. 10
(a) Class 2.01: Foothill Secured
Claims........................................ 10
(b) Class 2.02: Old Subordinated
Debentures Secured Claims..................... 11
(c) Class 2.03: Other Secured Claims................ 11
3. Class 3: General Unsecured Claims................... 11
4. Class 4: Subordinated Claims........................ 11
C. Impaired Class Of Interests................................ 11
1. Class 5: Old Preferred Stock Interests.............. 11
2. Class 6: Old Common Stock Interests................. 11
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. Continued Corporate Existence.............................. 12
B. Certificate of Incorporation and By-Laws................... 12
C. Directors And Officers..................................... 12
D. Revesting Of Assets........................................ 12
E. Creditors' Committee....................................... 12
F. Substantial Contribution Compensation And
Expenses Bar Date........................................ 12
G. Cancellation of Existing Securities and
Agreements............................................... 13
H. Securities To Be Issued In Connection With
The Plan................................................. 13
I. Effectuating Documents; Further Transactions............... 13
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY IMPAIRED CLASS OF CLAIMS
A. Classes Entitled To Vote................................... 14
B. Class Acceptance Requirement............................... 14
C. Cramdown.................................................. 14
ARTICLE VI.
PRESERVATION OF LITIGATION CLAIMS
A. Retained Litigation Claims................................. 14
B. Preservation of Insurance.................................. 14
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. Date Of Distributions...................................... 15
B. Interest On Claims......................................... 15
C. Disbursing Agent........................................... 15
D. Means Of Cash Payment...................................... 15
E. Surrender Of Securities Or Instruments..................... 15
F. Instructions To Disbursing Agent........................... 15
G. Record Date For Distributions To Holders Of
Old Subordinated Debentures.............................. 16
H. No Fractional Securities Issued............................ 16
I. Delivery Of Distributions.................................. 16
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. Rejection of Executory Contracts And
Unexpired Leases......................................... 17
B. Bar Date For Rejection Damages............................. 17
ARTICLE IX.
CONDITIONS PRECEDENT
A. Conditions To Confirmation................................. 17
B. Conditions To Consummation................................. 17
C. Waiver Of Conditions To Confirmation And
Consummation............................................. 18
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
DISPUTED AND CONTINGENT CLAIMS
A. Objection Deadline......................................... 18
B. No Distributions Pending Allowance......................... 18
C. Distribution Reserve....................................... 19
D. Distributions After Allowance.............................. 19
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
ARTICLE XII.
RETENTION OF JURISDICTION
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. Setoffs.................................................... 21
B. Withholding And Reporting Requirements..................... 21
C. Discharge Of UM&M.......................................... 21
D. Exculpation And Limitation Of Liability.................... 21
E. Binding Effect............................................. 22
F. Withdrawal Or Non-Consummation............................. 22
G. Indemnification Obligations................................ 22
H. Term Of Injunctions Or Stays............................... 22
I. No Liability for Certain Tax Claims........................ 22
J. Administrative Claims Bar Date............................. 23
K. Provisions Governing Sale of Warren and
Warwick Facilities....................................... 23
1. Warren Facility Sale........................... 23
2. Warwick Facility Sale.......................... 23
L. Fees, Costs And Expenses of Existing
Indenture Trustee........................................ 23
M. Notices.................................................... 24
N. Governing Law.............................................. 25
EXHIBIT LIST
Exhibit A: Amended Certificate Of Incorporation And By-Laws
Exhibit B: Description of New Senior Note
Exhibit C: Description of New Subordinated Debentures
Exhibit D: Description of New Common Stock
Exhibit E: Description of New Warrants
Exhibit F: PBGC Agreement
Exhibit G: Rhode Island Real Property Agreements
Exhibit H: General Mutual Release By and Between UM&M and Uzi Ruskin
INTRODUCTION
United Merchants and Manufacturers, Inc. ("UM&M"), debtor and
debtor-in-possession in the above-captioned Chapter 11 reorganization case,
proposes this amended and restated reorganization plan (as may be further
amended, the "Plan") for the resolution of its outstanding creditor Claims
and equity interests. Reference is made to the Disclosure Statement
(defined below) for results of operations, projections for future
operations, risk factors, a summary and analysis of the Plan, and certain
related matters.
All holders of Claims are encouraged to read the Plan and the
Disclosure Statement in their entirety before voting to accept or reject
the Plan.
Subject to the restrictions on modifications set forth in section
1127 of the Bankruptcy Code and those restrictions on modifications set
forth in Article XI of the Plan, UM&M reserves its right to further alter,
amend or modify the Plan one or more times before its substantial
consummation.
ARTICLE I.
DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME
A. SCOPE OF DEFINITIONS
For purposes of this Plan, except as expressly provided or unless the
context otherwise requires, all capitalized terms not otherwise defined
shall have the meanings ascribed to them in Article I of the Plan. Any term
used in the Plan that is not defined herein, but is defined in the
Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to
that term in the Bankruptcy Code or the Bankruptcy Rules. Whenever the
context requires, such terms shall include the plural as well as the
singular number, the masculine gender shall include the feminine, and the
feminine gender shall include the masculine.
B. DEFINITIONS
1.1 "Administrative Claim" means a Claim for payment of an
administrative expense of a kind specified in section 503(b) of the
Bankruptcy Code and entitled to priority pursuant to section 507(a)(1) of
the Bankruptcy Code, including, but not limited to, the actual, necessary
costs and expenses, incurred after the Petition Date, of preserving the
Estate and operating the business of UM&M, including wages, salaries,
commissions or other employment-related expenses for services rendered
after the commencement of the Chapter 11 Case, Professional Fees, the fees,
costs and expenses of the Existing Indenture Trustee (subject to Article
XIV.L of the Plan), and all fees and charges assessed against the Estate
under chapter 123 of title 28, United States Code.
1.2 "Allowed Claim" means a Claim or any portion thereof (a) that has
been allowed by a Final Order, (b) either (x) that is Scheduled, other than
a Claim that is Scheduled at zero or as disputed, contingent, or
unliquidated, or (y) for which a proof of Claim has been timely filed with
the Bankruptcy Court pursuant to the Bankruptcy Code, any Final Order of
the Bankruptcy Court, and as to which either (i) no objection to its
allowance has been filed within the periods of limitation fixed by the
Bankruptcy Code or by any Final Order of the Bankruptcy Court or (ii) any
objection to its allowance has been settled or withdrawn, or has been
denied by a Final Order, or (c) that is expressly allowed in the Plan.
1.3 "Allowed Class...Claim" means an Allowed Claim in the particular
Class described.
1.4 "Allowed Class...Interest" means an interest in the particular
Class described (a) that has been allowed by a Final Order, (b) either (x)
that is Scheduled or (y) for which a proof of interest has been timely
filed with the Bankruptcy Court pursuant to the Bankruptcy Code, any Final
Order of the Bankruptcy Court, or other applicable bankruptcy law, and as
to which either (i) no objection to its allowance has been filed within the
periods of limitation fixed by the Bankruptcy Code or by any Final Order of
the Bankruptcy Court or (ii) any objection to its allowance has been
settled or withdrawn, or has been denied by a Final Order, or (c) that is
expressly allowed in the Plan.
1.5 "Amended Certificate of Incorporation and By-laws" means
Reorganized UM&M's certificate of incorporation and by-laws in effect under
the laws of the State of Delaware, as amended by the Plan, in substantially
the form annexed hereto as Exhibit A.
1.6 "Ballot" means each of the forms that will be distributed with
the Disclosure Statement to holders of Claims in Classes that are impaired
under the Plan and entitled to vote under Article V.A. hereof in connection
with the solicitation of acceptances of the Plan.
1.7 "Bankruptcy Code" means title 11 of the United States Code, 11
U.S.C. ss.ss. 101-1330, as in effect on the date hereof.
1.8 "Bankruptcy Court" means the Bankruptcy Court of the United
States District Court for the Southern District of New York or such other
court as may have jurisdiction over the Chapter 11 Case.
1.9 "Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure and the Official Bankruptcy Forms, as amended, the Federal Rules
of Civil Procedure, as amended, as applicable to the Chapter 11 Case or
proceedings therein, and the Local Rules of the Bankruptcy Court, as
applicable to the Chapter 11 Case or proceedings therein, as the case may
be.
1.10 "Business Day" means any day, excluding Saturdays, Sundays, and
legal holidays, on which commercial banks are open for business in New
York, New York.
1.11 "Cash" means legal tender of the United States or its
equivalent.
1.12 "Chapter 11 Case" means the Chapter 11 case of UM&M pending in
the Bankruptcy Court and bearing case number 96-40941 (AJG).
1.13 "CIT" means The CIT Group/Commercial Services, Inc., a New York
corporation, located at 1211 Avenue of the Americas, New York, New York
10036.
1.14 "CIT Note" means the 5% Subordinated Note due June 30, 2019, in
the principal amount of $30,000,000, given by UM&M to CIT.
1.15 "Claim" means a claim against UM&M, whether or not asserted, as
defined in section 101(5) of the Bankruptcy Code.
1.16 "Class" means a category of holders of Claims or holders of
interests described in Article II hereof.
1.17 "Confirmation Date" means the date the Confirmation Order is
entered.
1.18 "Confirmation Order" means the order, entered by the Bankruptcy
Court, confirming the Plan.
1.19 "Confirmation Hearing" means the hearing to consider
confirmation of the Plan under section 1128 of the Bankruptcy Code.
1.20 "Consummation Date" means the Business Day on which all
conditions to the consummation of the Plan set forth in Article IX.B.
hereof have been satisfied or waived as provided in Article IX.C. hereof.
1.21 "Committee" means the creditors' committee appointed by the
United States Trustee in this Chapter 11 Case on March 5, 1996, to
represent unsecured creditors of UM&M, as such committee may be constituted
from time to time.
1.22 "Cure" means the distribution of Cash, or such other property as
may be agreed upon by the parties and ordered by the Bankruptcy Court after
notice to the Committee, with respect to the assumption of an executory
contract or unexpired lease, pursuant to section 365(b) of the Bankruptcy
Code, in an amount equal to all unpaid monetary obligations, without
interest, or such other amount as may be agreed upon by the parties, under
such executory contract or unexpired lease, to the extent such obligations
are enforceable under the Bankruptcy Code and applicable non-bankruptcy
law.
1.23 "Disallowed Claim" means (a) a Claim, or any portion thereof,
that has been disallowed by a Final Order, (b) a Claim that is Scheduled at
zero or as contingent, disputed, or unliquidated and as to which no proof
of Claim has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy
Court, or (c) a Claim that has not been scheduled and as to which no proof
of Claim has been filed or deemed timely filed with the Bankruptcy Court
pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy
Court.
1.24 "Disbursing Agent" means the party designated by UM&M and
consented to by the Committee to serve as a disbursing agent under Article
VII of the Plan. The Disbursing Agent will be chosen by UM&M on or before
the Confirmation Date.
1.25 "Disclosure Statement" means the written disclosure statement
relating to the Plan and approved by the Bankruptcy Court, as such
disclosure statement may be amended, modified, or supplemented from time to
time.
1.26 "Disputed Claim" means a Claim or any portion thereof that is
neither an Allowed Claim nor a Disallowed Claim.
1.27 "Distribution Date" means the date, occurring as soon as
practicable after the Consummation Date, upon which the first distributions
are made to holders of Allowed Claims in accordance with Article III
hereof; provided, however, that in no event shall the Distribution Date
occur later than thirty (30) days after the Consummation Date, unless
otherwise ordered by the Bankruptcy Court.
1.28 "Distribution Reserve" means the amount of Cash, New Common
Stock, New Warrants, New Subordinated Debentures, or other property that
would have been distributed on the Distribution Date to holders of (A)
Disputed Claims, (B) contingent liquidated Claims, if such Claims had been
undisputed or noncontingent Claims on the Distribution Date, pending (i)
the allowance of such Claims, (ii) the estimation of such Claims for
purposes of allowance or (iii) the realization of the contingencies, and
(C) unliquidated Claims, if such Claims had been liquidated on the
Distribution Date, such amounts to be estimated by the Bankruptcy Court or
agreed upon by UM&M and the Committee as sufficient to satisfy such
unliquidated Claim upon such Claim's (i) allowance, or (ii) estimation for
purposes of allowance or (iii) liquidation, pending the occurrence of such
estimation or liquidation.
1.29 "Estate" means the estate of UM&M in its Chapter 11 Case,
pursuant to section 541 of the Bankruptcy Code.
1.30 "Existing Indenture Trustee" means the indenture trustee under
the Old Indenture.
1.31 "Existing Securities" means, collectively, the Old Subordinated
Debentures, Old Preferred Stock, and Old Common Stock.
1.32 "Face Amount" means, (a) when used in reference to a Disputed or
Disallowed Claim, the full stated amount claimed by the holder of such
Claim in any proof of Claim timely filed with the Bankruptcy Court or
otherwise deemed timely filed by any Final Order of the Bankruptcy Court or
other applicable bankruptcy law, and (b) when used in reference to an
Allowed Claim, the allowed amount of such Claim.
1.33 "Final Order" means an order or judgment, the operation or
effect of which has not been stayed, reversed, or amended and as to which
order or judgment (or any revision, modification, or amendment thereof) the
time to appeal or to seek review or rehearing has expired and as to which
no appeal or petition for review or rehearing was filed or, if filed,
remains pending.
1.34 "Fiscal Year" means, with respect to UM&M, the fiscal year
ending June 30th of each year, or such other fiscal year as UM&M may
designate.
1.35 "Foothill" means Foothill Capital Corporation, a California
corporation, located at 11111 Santa Monica Boulevard, Suite 1500, Los
Angeles, California 90025.
1.36 "Foothill Collateral" means the real property, accounts
receivable, inventory, general intangibles, patents and trademarks, books
and records, money, or other assets of UM&M, as more fully described in the
Foothill Loan Documents, in which UM&M granted Foothill security interests
or liens to secure UM&M's obligations under the Foothill Loan Documents.
1.37 "Foothill Loan Documents" means the Loan and Security Agreement
by and between UM&M and Foothill, dated as of June 24, 1994, as amended
August 26, 1994, September 28, 1994, and July 31, 1995, together with all
other documents and agreements related thereto, including various
promissory notes, pledges, guaranties, and security agreements
1.38 "ILGWU" means the International Ladies Garment Workers Union
National Retirement Fund.
1.39 "ILGWU Note" means the 5% Subordinated Note due 2019, in the
principal amount of $22,000,000, given by UM&M to the ILGWU.
1.40 "Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended, 26 U.S.C. ss.ss. 1-9722.
1.41 "New Common Stock" means the shares of common stock of
Reorganized UM&M authorized under Article IV.B. of the Plan and the Amended
Certificate of Incorporation.
1.42 "New Senior Note" means the 12% Senior Secured Note due March
31, 2002 of Reorganized UM&M, to be issued and distributed pursuant to
Article III.B. of the Plan on the Distribution Date, or as soon thereafter
as practicable, as more fully described in the annexed Exhibit B.
1.43 "New Subordinated Debentures" means the 3 1/2% Subordinated
Debentures due March 31, 2022 of Reorganized UM&M, to be issued and
distributed pursuant to Article III.B. of the Plan on the Distribution
Date, or as soon thereafter as practicable, as more fully described in the
annexed Exhibit C.
1.44 "New Warrants" means the Series A and Series B warrants to
purchase, for the price of $.50 per share, up to two million fifteen
thousand two hundred thirty-nine hares of New Common Stock of Reorganized
UM&M, as authorized under Article IV.H. of the Plan.
1.45 "Old Common Stock" means the issued and outstanding shares of
UM&M common stock, par value $1.00 per share, as of the Petition Date.
1.46 "Old Common Stock Interest" means the rights of a holder and
owner of issued and outstanding shares of Old Common Stock.
1.47 "Old Indenture" means the indenture, dated July 1, 1990, as
supplemented on November 1, 1990 and August 15, 1991, between UM&M and
First Trust National Association, as indenture trustee, pursuant to which
the 3 1/2% Old Subordinated Debentures were issued.
1.48 "Old Preferred Stock" means the issued and outstanding shares of
UM&M 10% cumulative preferred stock, Series 1, as of the Petition Date.
1.49 "Old Preferred Stock Interest" means the rights of a holder and
owner of issued and outstanding shares of Old Preferred Stock.
1.50 "Old Subordinated Debentures" means the 3 1/2% Senior
Subordinated Secured Debentures, due July 1, 2009 of UM&M, issued and
outstanding under the Old Indenture.
1.51 "Old Subordinated Debentures Collateral" means real property,
inventory, equipment, general intangibles, patents and trademarks, books
and records, money, or other assets of UM&M, as more fully described in the
Old Indenture, in which UM&M granted the holders of the Old Subordinated
Debentures security interests or liens to secure UM&M's obligations under
the Old Indenture.
1.52 "Other Priority Claim" means a Claim entitled to priority
pursuant to section 507(a) of the Bankruptcy Code other than a Priority Tax
Claim or an Administrative Claim.
1.53 "Other Secured Claim" means any Secured Claim other than Class
2.01 Foothill Secured Claims and Class 2.02 Old Subordinated Debentures
Secured Claims.
1.54 "PBGC" means the Pension Benefit Guaranty Corporation, a
wholly-owned United States government corporation created under Title IV of
ERISA.
1.55 "PBGC Claims" means, collectively, the Claims, evidenced by
proofs of Claim numbers 1155, 1156, and 1157, filed against UM&M by the
PBGC in an aggregate amount in excess of $44,486,078, based on UM&M's
purported obligations to the PBGC.
1.56 "Person" means an individual, corporation, partnership, joint
venture, association, joint stock company, trust, estate, unincorporated
organization, or other entity.
1.57 "Petition Date" means February 22, 1996, the date on which UM&M
filed its petition for reorganization commencing the Chapter 11 Case.
1.58 "Priority Tax Claim" means a Claim entitled to priority pursuant
to section 507(a)(8) of the Bankruptcy Code.
1.59 "Professional Fees" means a Claim of a professional, retained in
the Chapter 11 Case pursuant to sections 327 and 1103 of the Bankruptcy
Code or otherwise, for compensation or reimbursement of costs and expenses
relating to services incurred prior to and including Confirmation, when and
to the extent any Claim described above is approved by a Final Order
entered pursuant to sections 330, 503(b), or 1103 of the Bankruptcy Code.
1.60 "Pro Rata" means, at any time, the proportion that the Face
Amount of a Claim in a particular Class bears to the aggregate Face Amount
of all Claims (including Disputed Claims, but excluding Disallowed Claims)
in such Class, unless the Plan provides otherwise.
1.61 "Record Date" means the record date for purposes of making
distributions under the Plan to holders of Old Subordinated Debentures on
account of Allowed Claims, which date shall be the fifth (5th) Business Day
following the date on which the Bankruptcy Court enters the Confirmation
Order.
1.62 "Reinstated" or "Reinstatement" means leaving unaltered the
legal, equitable, and contractual rights to which a Claim entitles the
holder of such Claim so as to leave such Claim unimpaired in accordance
with section 1124 of the Bankruptcy Code, thereby entitling the holder of
such Claim to, but not more than, (a) reinstatement of the original
maturity of the obligations on which such Claim is based and (b) payment,
as provided herein, of an amount of Cash consisting solely of the sum of
(i) matured but unpaid principal installments, without regard to any
acceleration of maturity, accruing prior to the Consummation Date, (ii)
accrued but unpaid interest as of the Petition Date, and (iii) reasonable
fees, expenses, and charges, to the extent such fees, expenses, and charges
are allowed under the Bankruptcy Code and are provided for in the agreement
or agreements on which such Claim is based; provided, however, that any
contractual right that does not pertain to the payment when due of
principal and interest on the obligation on which such Claim is based,
including, but not limited to, financial covenant ratios, negative pledge
covenants, covenants or restrictions on merger or consolidation, and
affirmative covenants regarding corporate existence prohibiting certain
transactions or actions contemplated by the Plan, or conditioning such
transactions or actions on certain factors, shall not be reinstated in
order to accomplish Reinstatement.
1.63 "Reorganized UM&M" means reorganized UM&M organized on and after
the Consummation Date under the laws of the State of Delaware.
1.64 "RHI" means Reunited Holdings, Inc., a Rhode Island corporation,
formerly Victoria Creations, Inc. ("VCI"), and an approximately 80% owned
subsidiary of UM&M. With respect to any and all events occurring on or
before July 1, 1996, RHI also means VCI.
1.65 "RRL" means Reunited Reinsurance, Ltd., a Bermuda corporation,
and a wholly-owned subsidiary of UM&M.
1.66 "Scheduled" means, with respect to any Claim or interest, the
status and amount, if any, of such Claim or interest as set forth in the
Schedules.
1.67 "Schedules" means (a) the schedules of assets and liabilities
and the statements of financial affairs filed with the Bankruptcy Court by
UM&M on April 29, 1996, and (b) the list of equity security holders filed
with the Bankruptcy Court on April 2, 1996, as such schedules, statements
and lists have been or may be further amended or supplemented from time to
time in accordance with Fed. R. Bankr. P. 1009.
1.68 "Secured Claim" means a Claim, other than a Setoff Claim, (a)
secured by a security interest in or lien upon property of the Estate to
the extent of the value, as of the Consummation Date, or such later date as
is established by the Bankruptcy Court, of such interest or lien as
determined by a Final Order of the Bankruptcy Court pursuant to section 506
of the Bankruptcy Code or as otherwise agreed upon in writing by UM&M and
the holder of such Claim, subject to the approval of the Bankruptcy Court
and (b) that is a Class 2.01 Foothill Secured Claim, a Class 2.02 Old
Subordinated Debentures Secured Claim, or a Class 2.03 Other Secured Claim.
1.69 "Setoff Claim" means a Claim of a holder of a Claim who has a
valid right of setoff with respect to such Claim, which right is
enforceable under section 553 of the Bankruptcy Code as determined by a
Final Order or as otherwise agreed upon by UM&M and the holder of such
Claim, to the extent of the amount subject to such right of setoff.
1.70 "Subordinated Claims" means the Claims of CIT and the ILGWU
directly or indirectly arising from or under, or relating in any way to,
the CIT Note and ILGWU Note, respectively.
1.71 "Subsidiaries" means any or all of the following direct
subsidiaries of UM&M: (i) RHI, (ii) RRL, and (iii) Togla.
1.72 "Substantial Consummation" means the (a) transfer of all or
substantially all of the property proposed by the Plan to be transferred,
(b) assumption by Reorganized UM&M of the business or of the management of
all or substantially all of the property dealt with by the Plan, and (c)
substantial distribution of the property proposed by the Plan to be
distributed thereunder, as recognized by the Committee or by order of the
Bankruptcy Court.
1.73 "Substantial Consummation Date" means the date on which
Substantial Consummation of the Plan occurs.
1.74 "Togla" means Togla Inc., a Delaware corporation with no
operations, assets, or liabilities, and a wholly-owned subsidiary of UM&M.
1.75 "UM&M" means United Merchants and Manufacturers, Inc., debtor
and debtor-in-possession in Chapter 11 Case No. 96-40941 (AJG) pending in
the Bankruptcy Court. UM&M also means Reorganized UM&M on and after the
Consummation Date.
1.76 "Unsecured Claim" means a Claim that is not an Administrative
Claim, Priority Tax Claim, Other Priority Claim, Secured Claim, or
Subordinated Claim.
1.77 "Warren Facility" means the real property and improvements
thereon located at 560 Metacom Avenue, Warren, Rhode Island, owned by UM&M.
1.78 "Warren Facility Proceeds" means the proceeds from the sale of
the Warren Facility in an amount equal to the selling price of the Warren
Facility minus (i) the reasonable broker commission payable by UM&M on
account of the sale of the Warren Facility, (ii) the reasonable legal fees
and other costs applicable to the sale transaction, (iii) state gains or
income tax, calculated as of the date of closing, on the difference between
the gross selling price and UM&M's tax basis in the Warren Facility after
consideration of the transaction costs listed in (i) and (ii) of this
paragraph, (iv) federal gains or income tax, calculated as of the date of
closing, on the difference between the gross selling price and UM&M's tax
basis, (v) and all other expenses associated with the Warren Facility Sale.
1.79 "Warren Facility Sale" means the sale of the Warren Facility, as
described in Articles III.B. and XIV.K. of the Plan.
1.80 "Warwick Facility" means the real property and improvements
thereon located at 30 Jefferson Park Road, Warwick, Rhode Island, owned by
UM&M.
1.81 "Warwick Facility Proceeds" means the proceeds from the sale of
the Warwick Facility in an amount equal to the selling price of the Warwick
Facility minus (i) the reasonable broker commission payable by UM&M on
account of the sale of the Warwick Facility, (ii) the reasonable legal fees
and other costs applicable to the sale transaction, (iii) state gains or
income tax, calculated as of the date of closing, on the difference between
the gross selling price and UM&M's tax basis in the Warwick Facility after
consideration of the transaction costs listed in (i) and (ii) of this
paragraph, and (iv) federal gains or income tax, calculated as of the date
of closing, on the difference between the gross selling price and UM&M's
tax basis, (v) and all other expenses associated with the Warren Facility
Sale.
1.82 "Warwick Facility Sale" means the sale of the Warwick Facility,
as described in Articles III.B. and XIV.K. of the Plan.
C. RULES OF INTERPRETATION
For purposes of the Plan (a) any reference in the Plan to a contract,
instrument, release, indenture, or other agreement or documents being in a
particular form or on particular terms and conditions means that such
document shall be substantially in such form or substantially on such terms
and conditions, (b) any reference in the Plan to an existing document or
exhibit filed or to be filed means such document or exhibit as it may have
been or may be amended, modified, or supplemented, (c) unless otherwise
specified, all references in the Plan to Articles, Schedules, and Exhibits
are references to Articles, Schedules, and Exhibits of or to the Plan, (d)
the words "herein" and "hereto" refer to the Plan in its entirety rather
than to a particular portion of the Plan, (e) captions and headings to
Articles are inserted for convenience of reference only and are not
intended to be a part of or to affect the interpretation of the Plan, and
(f) the rules of construction set forth in section 102 of the Bankruptcy
Code and in the Bankruptcy Rules shall apply.
D. COMPUTATION OF TIME
In computing any period of time prescribed or allowed by the Plan,
unless otherwise expressly provided, the provisions of Fed. R. Bankr. P.
9006(a) shall apply.
ARTICLE II.
CLASSIFICATION OF CLAIMS AND INTERESTS
A. INTRODUCTION
All Claims and interests, except Administrative Claims and Priority
Tax Claims, are placed in the Classes set forth below. In accordance with
section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and
Priority Tax Claims, as described below, have not been classified.
A Claim or interest is placed in a particular Class only to the
extent that the Claim or interest falls within the description of that
Class, and is classified in other Classes to the extent that any portion of
the Claim or interest falls within the description of such other Classes. A
Claim or interest is also placed in a particular Class for the purpose of
receiving distributions pursuant to the Plan only to the extent that such
Claim or interest is an Allowed Claim in that Class and such Claim or
interest has not been paid, released, or otherwise settled prior to the
Consummation Date.
B. UNCLASSIFIED CLAIMS (NOT ENTITLED TO VOTE ON THE PLAN)
1. Administrative Claims
2. Priority Tax Claims
C. IMPAIRED CLASSES OF CLAIMS (ENTITLED TO VOTE ON THE PLAN)
1. Class 1: Other Priority Claims
Class 1 consists of all Other Priority Claims.
2. Class 2: Secured Claims
Class 2 consists of separate subclasses for each Secured Claim
secured by a security interest in or lien upon property in which the Estate
has an interest. Each subclass is deemed to be a separate class for all
purposes under the Bankruptcy Code.
(a) Class 2.01: Foothill Secured Claims
Class 2.01 consists of all Claims, secured by the Foothill
Collateral, directly or indirectly arising from or under, or relating in
any way to, the Foothill Loan Documents
(b) Class 2.02: Old Subordinated Debentures Secured Claims
Class 2.02 consists of all Claims with respect to the Old
Subordinated Debentures Collateral, directly or indirectly arising from or
under, or relating in any way to, the Old Subordinated Debentures.
(c) Class 2.03: Other Secured Claims
Class 2.03 consists of all Other Secured Claims against UM&M.
D. IMPAIRED CLASSES OF CLAIMS AND INTERESTS (CONCLUSIVELY PRESUMED TO HAVE
REJECTED THE PLAN AND, THEREFORE, NOT ENTITLED TO VOTE ON THE PLAN)
1. Class 3: General Unsecured Claims
Class 3 consists of all Unsecured Claims.
2. Class 4: Subordinated Claims
Class 4 consists of all Subordinated Claims.
3. Class 5: Old Preferred Stock Interests
Class 5 consists of all Old Preferred Stock Interests.
4. Class 6: Old Common Stock Interests
Class 6 consists of all Old Common Stock Interests.
ARTICLE III.
TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS
1. Administrative Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Administrative Claim shall receive in full
satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Administrative Claim (a) Cash equal to the unpaid portion of
such Allowed Administrative Claim, or (b) such other treatment as to which
UM&M and such holder shall have agreed upon in writing; provided, however,
that Allowed Administrative Claims with respect to liabilities incurred by
UM&M in the ordinary course of its business during the Chapter 11 Case
shall be paid in the ordinary course of business in accordance with the
terms and conditions of any agreements relating thereto.
2. Priority Tax Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Priority Tax Claim shall be entitled to receive in
full satisfaction, settlement, release, and discharge of and in exchange
for such Allowed Priority Tax Claim (a) deferred Cash payments in an
aggregate principal amount equal to the amount of such Allowed Priority Tax
Claim plus interest on the unpaid portion thereof at the rate of five (5)
percent per annum from the Consummation Date through the date of payment
thereof, or (b) such other treatment as to which UM&M and such holder shall
have agreed upon in writing, with the approval of the Bankruptcy Court. If
deferred Cash payments are made to a holder of an Allowed Priority Tax
Claim, payments of principal shall be made in annual installments, each
such installment amount being equal to 10 percent of such Allowed Priority
Tax Claim plus accrued and unpaid interest, with the first payment to be
due on the Distribution Date, and subsequent payments to be due on the
anniversary of the first payment date or as soon thereafter as is
practicable; provided, however, that any installments remaining unpaid on
the date that is six years after the date of assessment of the tax that is
the basis for the Allowed Priority Tax Claim shall be paid on the first
Business Day following such date, together with any accrued and unpaid
interest to the date of payment; and provided, further, that UM&M reserves
the right to pay any Allowed Priority Tax Claim, or any remaining balance
of any Allowed Priority Tax Claim, in full at any time on or after the
Consummation Date without premium or penalty; and provided, further, that
no holder of an Allowed Priority Tax Claim shall be entitled to any
payments on account of any pre-Consummation interest accrued or penalty
arising on or after the Petition Date with respect to or in connection with
such Allowed Priority Tax Claim.
B. IMPAIRED CLASSES OF CLAIMS
1. Class 1: Other Priority Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Class 1 Other Priority Claim shall receive in full
satisfaction, settlement, release, and discharge of and in exchange for
such Allowed Class 1 Other Priority Claim (a) Cash equal to the amount of
such Allowed Class 1 Other Priority Claim or (b) such other treatment as to
which UM&M and such holder shall have agreed upon in writing.
2. Class 2: Secured Claims
Each holder of a Class 2 Secured Claim shall be treated as a separate
class for purposes of implementing and consummating the Plan.
(a) Class 2.01: Foothill Secured Claims
On the Distribution Date, or as soon thereafter as practicable, the
holder of an Allowed Class 2.01 Foothill Secured Claim shall receive in
full satisfaction, settlement, release, and discharge of and in exchange
for such Allowed Class 2.01 Foothill Secured Claim, the New Senior Note. As
provided in Article XIV.K. hereof, UM&M shall sell the Warren and Warwick
Facilities and apply the proceeds of the sales, after payment of taxes and
sale expenses as set forth in Articles I.B.1.78 and I.B.1.81 above, toward
satisfaction of UM&M's obligations to Foothill under the New Senior Note.
(b) Class 2.02: Old Subordinated Debentures Secured Claims
On the Consummation Date, Reorganized UM&M shall issue to the
Disbursing Agent (x) $59,491,000.00 in aggregate principal amount of New
Subordinated Debentures in full satisfaction, settlement, release, and
discharge of, and in exchange for, $59,491,000.00 of Allowed Class 2.02 Old
Subordinated Debentures Secured Claims, and on account of and for the
benefit of all holders of Allowed Class 2.02 Old Subordinated Debentures
Secured Claims, and (y) eight million (8,000,000) shares of New Common
Stock and New Warrants to purchase two million fifteen thousand two hundred
thirty-nine (2,015,239) additional shares of New Common Stock (together,
the "New Equity Securities") in full satisfaction, settlement, release, and
discharge of, and in exchange for, $10,000,000.00 of Allowed Class 2.02 Old
Subordinated Debentures Secured Claims, and on account of and for the
benefit of all holders of Allowed Class 2.02 Old Subordinated Debentures
Secured Claims. On the Distribution Date, or as soon thereafter as
practicable, each holder of an Allowed Class 2.02 Old Subordinated
Debentures Secured Claim shall receive its Pro Rata share of (x) the New
Subordinated Debentures, and (y) the New Equity Securities.
(c) Class 2.03: Other Secured Claims
On the Distribution Date, or as soon thereafter as practicable, a
holder of an Allowed Class 2.03 Other Secured Claim, in full satisfaction,
settlement, release, and discharge of, and in exchange for, such Allowed
Class 2.03 Other Secured Claim, shall, in the sole discretion of UM&M, (i)
upon abandonment by UM&M receive the property securing such Allowed Class
2.03 Other Secured Claim, (ii) receive deferred cash payments totalling at
least the amount of such Allowed Class 2.03 Other Secured Claim, of a
value, as of the Consummation Date, of at least the value of such holder's
interest in the Estate's interest in the property securing such Allowed
Class 2.03 Other Secured Claim, (iii) receive payments or liens amounting
to the indubitable equivalent of the value of such holder's interest in the
Estate's interest in the property securing the Allowed Class 2.03 Other
Secured Claim, (iv) be Reinstated, or (iii) receive such other treatment as
to which UM&M and the holder shall have agreed upon in writing as announced
prior to or at the Confirmation Hearing.
3. Class 3: General Unsecured Claims
The holders of Class 3 General Unsecured Claims shall not be entitled
to, and shall not, receive or retain any property or interest in property
on account of such Class 3 General Unsecured Claims.
4. Class 4: Subordinated Claims
The holders of Class 4 Subordinated Claims shall not be entitled to,
and shall not, receive or retain any property or interest in property on
account of such Class 4 Subordinated Claims.
C. IMPAIRED CLASS OF INTERESTS
1. Class 5: Old Preferred Stock Interests
On the Distribution Date, the Class 5 Old Preferred Stock Interests
shall be canceled and the holders of Class 5 Old Preferred Stock Interests
shall not be entitled to, and shall not, receive or retain any property or
interest in property on account of such Class 5 Old Preferred Stock
Interests.
2. Class 6: Old Common Stock Interests
On the Distribution Date, the Class 6 Old Common Stock Interests
shall be canceled and the holders of Class 6 Old Common Stock Interests
shall not be entitled to, and shall not, receive or retain any property or
interest in property on account of such Class 6 Old Common Stock Interests.
ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN
A. CONTINUED CORPORATE EXISTENCE
UM&M will continue to exist as a separate corporate entity in
accordance with the laws of Delaware and pursuant to the certificate of
incorporation and by-laws in effect prior to the Consummation Date, except
to the extent such certificate of incorporation and by-laws are amended
under this Plan.
B. CERTIFICATE OF INCORPORATION AND BY-LAWS
The certificate of incorporation and by-laws of UM&M will be amended
as necessary to satisfy the provisions of the Plan and the Bankruptcy Code.
The Amended Certificate of Incorporation shall include, among other things,
(i) a provision for an authorized capital stock of 40,000,000 shares of New
Common Stock, $.01 par value per share, (ii) pursuant to section 1123(a)(6)
of the Bankruptcy Code, a provision prohibiting the issuance of non-voting
equity securities, and (iii) a provision imposing restrictions on the
transfer of New Common Stock by certain holders thereof, in substantially
the form of Article Fifth of the form of Amended Certificate of
Incorporation annexed hereto as Exhibit A.
C. DIRECTORS AND OFFICERS
The directors and officers of UM&M before the Consummation Date shall
serve as the initial directors and officers of Reorganized UM&M after the
Consummation Date. Not later than 60 days after the Consummation Date, or
as soon thereafter as practicable, Reorganized UM&M shall conduct a
shareholders' meeting, at which time the term of the current board of
directors shall expire and the shareholders shall elect a new board of
directors for Reorganized UM&M. The board of directors of Reorganized UM&M
shall have the responsibility for the management, control, and operation of
Reorganized UM&M on and after the Consummation Date.
D. REVESTING OF ASSETS
Pursuant to section 1141(b) of the Bankruptcy Code, the property of
the Estate, and any property of UM&M that is not property of the Estate and
that is not specifically disposed of pursuant to the Plan, shall revest in
UM&M on the Confirmation Date. Thereafter, UM&M may operate its business
and may use, acquire, and dispose of property free of any restrictions of
the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Court. As of
the Confirmation Date, all property of UM&M shall be free and clear of all
Claims and interests, including liens and security interests, except as
specifically provided in the Plan or in the Confirmation Order. Without
limiting the foregoing, UM&M may, without application to or approval by the
Bankruptcy Court, pay professional fees and expenses that it may incur
after the Confirmation Date.
E. CREDITORS' COMMITTEE
The Committee will cease to exist after the Substantial Consummation
Date, except to the extent necessary to (i) monitor UM&M's compliance with
its obligations hereunder, (ii) perform all acts expressly provided for
herein, and (iii) to the extent the Committee has previously done so,
continue the prosecution or defense of pending motions, applications or
adversary proceedings, or any appeal therefrom.
F. SUBSTANTIAL CONTRIBUTION COMPENSATION AND EXPENSES BAR DATE
Any person or entity who requests compensation or expense
reimbursement for making a substantial contribution in the Chapter 11 Case
pursuant to section 503(b)(3),(4), and (5) of the Bankruptcy Code must file
a request with the clerk of the Bankruptcy Court, on or before 5:00 p.m.
Eastern Standard Time on March 31, 1997, (the "Substantial Contribution Bar
Date"), and serve such application on counsel for UM&M, counsel for the
Committee, and as otherwise required by the Bankruptcy Court on or before
the Substantial Contribution Bar Date, or be forever barred from seeking
such compensation or expense reimbursement.
G. CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS
On the Consummation Date, except as otherwise provided for herein,
(i) the Existing Securities and any other note, bond, indenture, or other
instrument or document evidencing or creating any indebtedness or
obligation of UM&M, except (x) such notes or other instruments evidencing
indebtedness or obligations of UM&M that are Reinstated under the Plan and
(y) the notes or instruments listed on Exhibit G to the Plan, shall be
canceled, and (ii) the obligations of UM&M under any agreements, indentures
or certificates of designations governing the Existing Securities and any
other note, bond, indenture or other instrument or document evidencing or
creating any indebtedness or obligation of UM&M, except (x) such notes or
other instruments evidencing indebtedness or obligations of UM&M that are
Reinstated under the Plan and (y) the notes or instruments listed on
Exhibit G to the Plan, as the case may be, shall be discharged; provided,
however, that each indenture or other agreement that governs the rights of
the holder of a Claim and that is administered by an indenture trustee, an
agent, or a service shall continue in effect solely for the purposes of (i)
allowing such indenture trustee, agent, or service to make the
distributions to be made on account of such Claims under the Plan as
provided in Article III.B. hereof, and (ii) permitting such indenture
trustee, agent, or service to maintain any rights or liens it may have for
fees, costs and expenses under such indenture or other agreement; provided,
further, that the provisions of clause (ii) of this paragraph shall not
affect the discharge of UM&M's liabilities under the Bankruptcy Code and
the Confirmation Order or result in any expense or liability to UM&M.
Reorganized UM&M shall not have any obligations to any indenture trustee,
agent or service (or to any Disbursing Agent replacing such indenture
trustee, agent or service) for any fees, costs or expenses, except as
expressly provided in this Article IV.G. or as otherwise ordered by the
Bankruptcy Court.
Any actions taken by an indenture trustee, an agent, or a service
that are not for the purposes authorized in Article VII.E. of the Plan
shall not be binding on UM&M. Notwithstanding the foregoing, UM&M may
terminate any indenture or other governing agreement and the authority of
any indenture trustee, agent, or service to act thereunder at any time,
with or without cause, by giving five (5) days written notice of
termination to the indenture trustee, agent, or service. If distributions
under the Plan have not been completed at the time of termination of the
indenture or other governing agreement, UM&M shall designate a Disbursing
Agent to act in place of the indenture trustee, agent, or service, and the
provisions of this Article IV.G. shall be deemed to apply to the new
distribution agent.
H. SECURITIES TO BE ISSUED IN CONNECTION WITH THE PLAN
On or before the Distribution Date, UM&M shall issue for distribution
in accordance with the provisions of the Plan the New Senior Note, the New
Subordinated Debentures, the shares of New Common Stock, and the New
Warrants required for distribution pursuant to the provisions of the Plan.
The principal terms of the New Senior Note, New Subordinated Debentures,
New Common Stock and New Warrants are summarized in Exhibits B, C, D, and E
hereto and incorporated herein by reference.
I. EFFECTUATING DOCUMENTS; FURTHER TRANSACTIONS
The Chairman of the Board of Directors, the President, the Chief
Executive Officer, the Chief Financial Officer, or any other appropriate
officer of UM&M, shall be authorized to execute, deliver, file, or record
such contracts, instruments, releases, indentures, and other agreements or
documents, and take such actions as may be necessary or appropriate to
effectuate and further evidence the terms and conditions of the Plan. The
Secretary or Assistant Secretary of UM&M shall be authorized to certify or
attest to any of the foregoing actions, if necessary.
ARTICLE V.
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY IMPAIRED CLASS OF CLAIMS
A. CLASSES ENTITLED TO VOTE
Each impaired Class that will (or may) receive or retain property or
an interest in property under the Plan shall be entitled to vote to accept
or reject the Plan. Each unimpaired Class of Claims shall be deemed to have
accepted the Plan and shall not be entitled to vote to accept or reject the
Plan. Because Classes 3, 4, 5, and 6 are not entitled to receive or retain
any property under the Plan, such Classes are presumed to have rejected the
Plan and, therefore, shall not be entitled to vote on the Plan.
B. CLASS ACCEPTANCE REQUIREMENT
Under section 1126(c) of the Bankruptcy Code, an impaired Class of
Claims has accepted the Plan if the holders of at least two-thirds (2/3) in
dollar amount and more than one-half (1/2) in number of the Allowed Claims
of such Class who have voted on the Plan, have voted to accept the Plan.
C. CRAMDOWN
UM&M hereby requests confirmation of the Plan, as it may be modified
or amended from time to time, under section 1129(b) of the Bankruptcy Code,
if necessary.
ARTICLE VI.
PRESERVATION OF LITIGATION CLAIMS
A. RETAINED LITIGATION CLAIMS
In accordance with section 1123(b)(3) of the Bankruptcy Code, and
except as otherwise provided herein, Reorganized UM&M shall retain and may
enforce all claims, rights of action, suits, and proceedings, whether in
law or in equity, whether known or unknown, that UM&M or the Estate may
hold against any entity; provided, however, that, notwithstanding the
foregoing, UM&M shall waive, effective upon the Confirmation Date, any and
all rights that UM&M or the Estate may hold against any entity to enforce
claims, rights of action, suits, and proceedings, whether known or unknown,
under section 547 of the Bankruptcy Code. Reorganized UM&M or any of its
successors may pursue such retained litigation claims in accordance with
the best interests of Reorganized UM&M or its successors who hold such
rights of action.
B. PRESERVATION OF INSURANCE
UM&M's discharge and release from all Claims as provided herein,
except as necessary to be consistent with the Plan, shall not diminish or
impair the enforceability of any insurance policy that may cover Claims
against UM&M or any other Person. Insurance policies that have policy
periods that have expired shall not be deemed to be executory contracts
under the Plan and such insurance policies shall remain in full force and
effect according to the terms of such policies.
ARTICLE VII.
PROVISIONS GOVERNING DISTRIBUTIONS
A. DATE OF DISTRIBUTIONS
Distributions under the Plan shall be made on the Distribution Date,
or as soon thereafter as practicable, except as otherwise provided for
herein or ordered by the Bankruptcy Court.
B. INTEREST ON CLAIMS
Unless otherwise specifically provided for in the Plan or the
Confirmation Order, or as required by applicable bankruptcy law, interest
shall not accrue on Claims, and no holder of a Claim shall be entitled to
interest accruing on or after the Petition Date on any Claim. Interest
shall not accrue or be paid upon any Disputed Claim in respect of the
period from the Petition Date to the date a final distribution is made
thereon if and after such Disputed Claim becomes an Allowed Claim.
C. DISBURSING AGENT
The Disbursing Agent shall make all distributions required under this
Plan. The Disbursing Agent may be required to give a bond or surety or
other security for the performance of its duties unless otherwise ordered
by the Bankruptcy Court.
D. MEANS OF CASH PAYMENT
Cash payments made pursuant to this Plan shall be in U.S. funds, by
the means agreed to by the payor and the payee, including by check or wire
transfer, or, in the absence of an agreement, such commercially reasonable
manner as the payor shall determine in its sole discretion.
E. SURRENDER OF SECURITIES OR INSTRUMENTS
On or before the Distribution Date, or as soon as practicable
thereafter, each holder of a promissory note, debenture, or other
instrument evidencing a Claim, other than a Claim that is Reinstated (a
"Certificate"), shall surrender such Certificate to the Disbursing Agent,
or, with respect to indebtedness that is governed by an indenture or other
agreement, the respective indenture trustee, agent, or servicer, as the
case may be, and such Certificate shall be cancelled. No distribution of
property hereunder shall be made to or on behalf of any such holder unless
and until such Certificate is received by the Disbursing Agent or the
respective indenture trustee, agent, or servicer, as the case may be, or
the unavailability of such Certificate is reasonably established to the
satisfaction of the Disbursing Agent or the respective indenture trustee,
agent, or servicer, as the case may be. Any such holder who fails to
surrender or cause to be surrendered such Certificate or fails to execute
and deliver an affidavit of loss and indemnity reasonably satisfactory to
the Disbursing Agent or the respective indenture trustee, agent, or
servicer, as the case may be, prior to the fifth (5th) anniversary of the
Consummation Date, shall be deemed to have forfeited all rights and Claims
in respect of such Certificate and shall not participate in any
distribution hereunder, and all property in respect of such forfeited
distribution, including interest accrued thereon, shall revert to
Reorganized UM&M notwithstanding any federal or state escheat laws to the
contrary.
F. INSTRUCTIONS TO DISBURSING AGENT
Prior to any distribution on account of Old Subordinated Debentures,
the Existing Indenture Trustee shall (i) inform the Disbursing Agent as to
the amount of properly surrendered Old Subordinated Debentures, and (ii)
instruct the Disbursing Agent, in a form and manner that the Disbursing
Agent reasonably determines to be acceptable, of the names and
denominations of the New Common Stock, New Warrants, and New Subordinated
Debentures to be issued to or on behalf of the holders of Allowed Class
2.02 Old Subordinated Debentures Secured Claims in exchange for properly
surrendered Old Subordinated Debentures.
G. RECORD DATE FOR DISTRIBUTIONS TO HOLDERS OF OLD SUBORDINATED
DEBENTURES
At the close of business on the Record Date, the transfer ledgers of
the Existing Indenture Trustee shall be closed, and there shall be no
further changes in the record holders thereof. Reorganized UM&M, the
Existing Indenture Trustee and the Disbursing Agent shall have no
obligation to recognize any transfer of such Old Subordinated Debentures
occurring after the Record Date. Reorganized UM&M, the Existing Indenture
Trustee and the Disbursing Agent shall be entitled instead to recognize and
deal for all purposes hereunder with only those record holders stated on
the transfer ledgers as of the close of business on the Record Date.
H. NO FRACTIONAL SECURITIES ISSUED
No fractional shares of New Equity Securities shall be issued or
distributed under the Plan or by any Disbursing Agent, indenture trustee,
agent, or servicer. Each holder entitled under the Plan to receive New
Equity Securities shall receive the total number of whole New Common Stock
certificates and whole New Warrants to which such holder is entitled.
Whenever any distribution to a particular holder would otherwise call for
distribution under the Plan of a fraction of a share of New Common Stock or
a fractional part of a New Warrant, the Disbursing Agent shall allocate
separately to each such holder one whole share or warrant, to such holders
in order of the fractional portion of their entitlements, starting with the
largest such fractional portion, until all remaining whole shares and
warrants have been allocated. Upon the allocation of a whole share or
warrant to a holder in respect of the fractional portion of its
entitlement, such fractional portion shall be cancelled. If two or more
holders are entitled to equal fractional entitlements and the number of
holders so entitled exceeds the number of whole shares or warrants which
remain to be allocated, the Disbursing Agent shall allocate the remaining
whole shares or warrants to such holders by random lot or such other
impartial method as the Disbursing Agent deems fair. Upon the allocation of
all of the whole shares and warrants authorized under this Plan, all
remaining fractional portions of the entitlements shall be cancelled and
shall be of no further force and effect.
I. DELIVERY OF DISTRIBUTIONS
Distributions to holders of Allowed Claims shall be made by the
Disbursing Agent or the appropriate agent, or servicer, as the case may be,
(a) at the addresses set forth on the proofs of Claim filed by such holders
(or at the last known addresses of such holders if no proof of Claim is
filed or if UM&M has been notified of a change of address), (b) at the
addresses set forth in any written notices of address changes delivered to
the Disbursing Agent after the date of any related proof of Claim, (c) at
the addresses reflected in the Schedules if no proof of Claim has been
filed and the Disbursing Agent has not received a written notice of a
change of address. If any holder's distribution is returned to the
Disbursing Agent, agent, or servicer, as undeliverable, no further
distributions to such holder shall be made unless and until the Disbursing
Agent or the appropriate agent, or servicer is notified of such holder's
then current address, at which time all missed distributions shall be made
to such holder without interest. Amounts in respect of undeliverable
distributions made through the Disbursing Agent or the agent, or servicer,
shall be returned to Reorganized UM&M until such distributions are claimed.
All claims for undeliverable distributions shall be made on or before the
fifth (5th) anniversary of the Consummation Date. After such date, all
unclaimed property shall revert to Reorganized UM&M and the claim of any
holder or successor to such holder with respect to such property shall be
discharged and forever barred.
ARTICLE VIII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
Unless assumed by order of the Bankruptcy Court entered on or before
Confirmation, all executory contracts and unexpired leases of UM&M,
including, but not limited to, the employment agreement between UM&M and
Uzi Ruskin, dated July 9, 1982, as subsequently amended (the "Ruskin
Agreement"), shall be deemed automatically rejected on the Confirmation
Date. In conjunction with UM&M's rejection of the Ruskin Agreement, UM&M
and Mr. Ruskin shall enter into a general mutual release, a form of which
is annexed hereto as Exhibit H, of all claims, if any, that either party
might possess against the other. The Confirmation Order shall constitute an
order of the Bankruptcy Court approving (i) such rejections, and (ii) the
proposed general mutual release, and (iii) the proposed release by
Reorganized UM&M of all claims, rights of action, suits, and proceedings,
whether known or unknown, under section 547 of the Bankruptcy Code,
pursuant to sections 105(a) and 365(a) of the Bankruptcy Code.
B. BAR DATE FOR REJECTION DAMAGES
If the rejection by UM&M, pursuant to the Plan, of an executory
contract or unexpired lease results in a Claim, which is not theretofore
evidenced by a timely filed proof of Claim or a proof of Claim that is
deemed to be timely filed under applicable law, then such Claim shall be
forever barred and shall not be enforceable against UM&M or Reorganized
UM&M or the properties of either of them unless a proof of Claim is filed
with the clerk of the Bankruptcy Court and served upon counsel to UM&M
within thirty (30) days after service of the earlier of (i) notice of the
Confirmation Order, or (ii) other notice that the executory contract or
unexpired lease has been rejected.
ARTICLE IX.
CONDITIONS PRECEDENT
A. CONDITIONS TO CONFIRMATION
The following are conditions precedent to confirmation of the Plan
that must be satisfied unless waived in accordance with Article IX.C. of
the Plan:
1. The Confirmation Order shall be in form and substance
reasonably acceptable to UM&M and the Committee.
2. The PBGC Agreement shall be approved by the Bankruptcy Court.
B. CONDITIONS TO CONSUMMATION
The following are conditions precedent to the occurrence of the
Consummation Date, each of which must be satisfied unless waived in
accordance with Article IX.C. of the Plan:
1. Confirmation will have occurred and the Confirmation
Order shall, among other things, provide that:
a. The provisions of the Confirmation Order are nonseverable
and mutually dependent;
b. The transfers of property by UM&M (a) to Reorganized UM&M
(i) are or shall be legal, valid, and effective transfers of
property, (ii) vest or shall vest Reorganized UM&M with good
title to such property free and clear of all liens, charges,
Claims, encumbrances, or interests, except as expressly
provided in the Plan or Confirmation Order, (iii) do not and
shall not constitute avoidable transfers under the Bankruptcy
Code or under applicable bankruptcy or nonbankruptcy law, and
(iv) do not and shall not subject Reorganized UM&M to any
liability by reason of such transfer under the Bankruptcy Code
or under applicable nonbankruptcy law, including, without
limitation, any laws affecting successor or transferee
liability, and (b) to holders of Claims under the Plan are for
good consideration and value and are in the ordinary course of
UM&M's business;
c. Except as expressly provided in the Plan, UM&M is discharged
effective on the Confirmation Date from any "debt" (as that
term is defined in section 101(12) of the Bankruptcy Code), and
UM&M's liability in respect thereof is extinguished completely,
whether reduced to judgment or not, liquidated or unliquidated,
contingent or noncontingent, asserted or unasserted, fixed or
unfixed, matured or unmatured, disputed or undisputed, legal or
equitable, or known or unknown, or that arose from any
agreement of UM&M that has either been assumed or rejected in
the Chapter 11 Case or pursuant to the Plan, or obligation of
UM&M incurred before Confirmation, or from any conduct of UM&M
prior to Confirmation, or that otherwise arose before
Confirmation, including, without limitation, all interest, if
any, on any such debts, whether such interest accrued before or
after the Petition Date;
d. The Plan does not provide for the liquidation of all or
substantially all of the property of UM&M and its confirmation
is not likely to be followed by the liquidation of Reorganized
UM&M or the need for further financial reorganization;
e. No request for revocation of the Confirmation Order under
section 1144 of the Bankruptcy Code shall have been made, or,
if made, shall remain pending.
C. WAIVER OF CONDITIONS TO CONFIRMATION AND CONSUMMATION
The conditions set forth in Articles IX.A. and IX.B. of the Plan,
except that contained in Article IX.A.2, may be waived by UM&M, with the
consent of the Committee,without notice or a hearing.
ARTICLE X.
PROCEDURES FOR RESOLVING AND TREATING
DISPUTED AND CONTINGENT CLAIMS
A. OBJECTION DEADLINE
As soon as practicable, but in no event later than 90 days after the
Confirmation Date (unless extended by UM&M after obtaining the approval of
the Bankruptcy Court), UM&M, or any other applicable entity, shall file
objections to Claims with the Bankruptcy Court and serve such objections
upon the holders of each of the Claims to which objections are made.
B. NO DISTRIBUTIONS PENDING ALLOWANCE
Notwithstanding any other provision of the Plan, no payments or
distributions shall be made with respect to all or any portion of a
Disputed Claim unless and until all objections to such Disputed Claim have
been settled or withdrawn or have been determined by Final Order, and the
Disputed Claim, or some portion thereof, has become an Allowed Claim.
C. DISTRIBUTION RESERVE
1. The Disbursing Agent shall withhold the Distribution Reserve from
the Cash, New Equity Securities, New Subordinated Debentures, or other
property to be distributed under the Plan. As to any Disputed Claim, upon a
request for estimation by the Committee or UM&M, the Bankruptcy Court shall
determine what amount is sufficient to withhold as the Distribution
Reserve. UM&M may request estimation for every Disputed Claim that is
unliquidated and the Disbursing Agent shall withhold the Distribution
Reserve based upon the estimated amount of such Claim as set forth in a
Final Order. If UM&M elects not to request such an estimation from the
Bankruptcy Court with respect to a Disputed Claim that is liquidated, the
Disbursing Agent shall withhold the Distribution Reserve based upon the
Face Amount of such Claim. Nothing in the Plan or herein shall be deemed to
entitle the holder of a Disputed Claim to post-petition interest on such
Claim, and such holder shall not be entitled to any such interest.
2. Neither the Disbursing Agent, nor any other party, shall be
entitled to vote any shares of the New Common Stock held in the
Distribution Reserve. In the event that any matter requires approval by the
shareholders of Reorganized UM&M prior to the distribution or cancellation
of all shares of New Common Stock from the Distribution Reserve, the shares
of New Common Stock held by the Disbursing Agent shall be deemed only for
voting purposes not to have been issued.
3. If practicable, the Disbursing Agent shall invest any Cash that is
withheld as the Distribution Reserve in a manner that shall yield a
reasonable net return, taking into account the safety of the investment.
D. DISTRIBUTIONS AFTER ALLOWANCE
Payments and distributions from the Distribution Reserve to each
holder of a Disputed Claim, to the extent that all or part of such Claim
ultimately becomes an Allowed Claim, shall be made in accordance with the
provisions of the Plan governing the class of Claims to which the
respective holder belongs; provided, however, that until a Final Order has
been entered or other final resolution has been reached with respect to
every Disputed Claim, no Cash, shares of New Common Stock, New Warrants,
New Subordinated Debentures, or other property held in the Distribution
Reserve shall be distributed. After a Final Order has been entered, or
other final resolution has been reached, with respect to every Disputed
Claim, any Cash remaining in the Distribution Reserve shall remit to the
working capital of Reorganized UM&M and any New Common Stock, New Warrants,
or New Subordinated Debentures remaining in the Distribution Reserve shall
be distributed Pro Rata to holders of Allowed Class 2.02 Claims.
ARTICLE XI.
MODIFICATIONS AND AMENDMENTS
UM&M may alter, amend, or modify the Plan or any Exhibits thereto
under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date. After the Confirmation Date and prior to Substantial
Consummation of the Plan as defined in section 1101(2) of the Bankruptcy
Code and in Article I.B.1.72 above, UM&M may, under section 1127(b) of the
Bankruptcy Code, institute proceedings in the Bankruptcy Court to remedy
any defect or omission or reconcile any inconsistencies in the Plan, the
Disclosure Statement approved with respect to the Plan, or the Confirmation
Order, and such matters as may be necessary to carry out the purpose and
effect of the Plan so long as such proceedings do not adversely affect the
treatment of holders of Claims or interests under the Plan; provided,
however, that prior notice of such proceedings shall be served in
accordance with the Bankruptcy Rules or order of the Bankruptcy Court.
ARTICLE XII.
RETENTION OF JURISDICTION
The Bankruptcy Court shall have exclusive jurisdiction, under
sections 105(a) and 1142 of the Bankruptcy Code, of all matters arising out
of, and related to, the Chapter 11 Case and the Plan including, among other
things, the following matters:
a. To hear and determine any and all pending or future objections to
the allowance of claims relating to events or transactions occurring
on or prior to the Consummation Date;
b. To consider and rule on the compromise and settlement of any claim
against or cause of action on behalf of the Estate;
c. To hear and determine all pending or future controversies, suits,
and disputes that may arise in connection with the interpretation of
the Plan or any documents intended to implement the provisions of the
Plan;
d. To hear and determine any and all applications for the allowance
of compensation and reimbursement of expenses;
e. To hear and determine, if necessary, or to estimate or liquidate
any and all claims arising therefrom or from the rejection of
executory contracts or unexpired leases pursuant to the Plan or
otherwise;
f. To consider any modifications of the Plan permitted by the
Bankruptcy Code;
g. To correct any defect, cure any omission or reconcile any
inconsistency in the Plan, including any exhibit thereto, or in any
order of the Bankruptcy Court, including the Confirmation Order, as
may be necessary to carry out the purposes and intent of the Plan and
to implement and effectuate the Plan;
h. To determine such other matters as may be provided for in the
Confirmation Order or other orders of the Bankruptcy Court as may be
authorized under the provisions of the Bankruptcy Code or any other
applicable law;
i. To enforce all orders, judgments, injunctions, and rulings entered
in the Chapter 11 case;
j. To issue such orders as may be necessary or appropriate in aid of
confirmation and to facilitate consummation of the Plan;
k. To enter an order closing the Chapter 11 Case;
l. To recover all assets of UM&M and property of the Estate, wherever
located; and
m. To hear and determine (a) all motions, applications, adversary
proceedings, and contested and litigated matters pending on the
Consummation Date, and (b) all claims by or against UM&M arising
under the Bankruptcy Code or nonbankruptcy law, if made applicable by
the Bankruptcy Code, including claims to avoid preferential or
fraudulent transfers under sections 547 and 548 of the Bankruptcy
Code, whether such claims are commenced before or after the
Consummation Date.
ARTICLE XIII.
COMPROMISES AND SETTLEMENTS
Pursuant to section 1123(b)(3) of the Bankruptcy Code and Fed. R.
Bankr. P. 9019(a), UM&M and the PBGC shall effectuate the following
compromise and settlement of the PBGC Claims: (i) the PBGC Claims shall be
Allowed as a single Class 1 Other Priority Claim (the "Allowed PBGC Claim")
in the aggregate amount of Seventeen Million Two Hundred Thousand Dollars
($17,200,000.00), and, together with all claims derivative thereof, shall
be disallowed and expunged in all other amounts and priorities; and (ii) on
the Distribution Date, or as soon thereafter as practicable, the PBGC, in
full satisfaction, settlement, release, and discharge of, and in exchange
for, the Allowed PBGC Claim, shall receive $17,200,000.00 in principal
amount of New Subordinated Debentures. A copy of the PBGC Agreement is
annexed hereto as Exhibit F and is incorporated herein by reference.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
A. SETOFFS
UM&M may, but shall not be required to, set off against any Claim,
and the payments or other distributions to be made under the Plan on
account of such Claim, claims of any nature whatsoever that UM&M may have
against the holder of such Claim; but neither the failure to do so nor the
allowance of any Claim hereunder shall constitute a waiver or release by
UM&M of any claim that UM&M may have against such holder.
B. WITHHOLDING AND REPORTING REQUIREMENTS
In connection with the Plan and all instruments issued in connection
therewith and distributions thereon, UM&M shall comply with all withholding
and reporting requirements imposed by any federal, state, local, or foreign
taxing authority, and all distributions hereunder shall be subject to any
such withholding and reporting requirements.
C. DISCHARGE OF UM&M
All property distributed under the Plan shall be in exchange for, and
in complete satisfaction, settlement, discharge, and release of, all Claims
of any nature whatsoever against UM&M or any of its assets or properties,
and, except as otherwise provided herein or in the Confirmation Order, on
the Confirmation Date, UM&M shall be deemed discharged and released under
section 1141(d)(1)(A) of the Bankruptcy Code from any and all debts. The
Confirmation Order shall be a judicial determination of discharge of all
liabilities of UM&M, subject to the occurrence of Consummation.
D. EXCULPATION AND LIMITATION OF LIABILITY
Neither Reorganized UM&M, the Committee, nor any of their respective
present or former members, officers, directors, employees, advisors,
attorneys, or agents, shall have or incur any liability to any holder of a
Claim or an interest, or any other party in interest, or any of their
respective agents, employees, representatives, financial advisors,
attorneys, or affiliates, or any of their successors or assigns, for any
act or omission in connection with, relating to, or arising out of, UM&M's
Chapter 11 Case, the pursuit of confirmation of the Plan, the consummation
of the Plan, or the administration of the Plan or the property to be
distributed under the Plan, except for their willful misconduct, and in all
respects shall be entitled to reasonably rely upon the advice of counsel
with respect to their duties and responsibilities under the Plan.
Notwithstanding any other provision of this Plan, any holder of a
Claim or an interest, any other party in interest, and any of their
respective agents, employees, representatives, financial advisors,
attorneys, or affiliates, and any successors or assigns of the foregoing,
shall have no right of action against Reorganized UM&M, the Committee or
any of their respective present or former members, officers, directors,
employees, advisors, attorneys, or agents, for any act or omission in
connection with, relating to, or arising out of, UM&M's Chapter 11 Case,
the pursuit of confirmation of the Plan, the consummation of the Plan, or
the administration of the Plan or the property to be distributed under the
Plan, except for their willful misconduct.
E. BINDING EFFECT
The Plan shall be binding upon and inure to the benefit of UM&M, the
holders of Claims, the holders of interests, and their respective
successors and assigns.
F. WITHDRAWAL OR NON-CONSUMMATION
If UM&M withdraws the Plan prior to the Confirmation Date, or if
Confirmation or Consummation of the Plan does not occur, then the Plan, any
settlement or compromise embodied in the Plan (including the fixing or
limiting to an amount certain any Claim or Class of Claims), assumption or
rejection of executory contracts or leases affected by the Plan, and any
document or agreement executed pursuant to the Plan, shall be deemed null
and void. In such event, nothing contained herein, and no acts taken in
preparation for Consummation of the Plan, shall be deemed to constitute a
waiver or release of any Claims by or against UM&M or any other Person, to
prejudice in any manner the rights of UM&M or any Person in any further
proceedings involving UM&M, or to constitute an admission of any sort by
UM&M or any other Person.
G. INDEMNIFICATION OBLIGATIONS
Except as otherwise limited in the Plan, any obligations or rights of
UM&M to indemnify its present and former directors, officers, or employees
pursuant to UM&M's articles of incorporation, by-laws, board of directors
resolutions, and established policy of providing employee indemnification,
and applicable state law or specific agreement in respect of any claims,
demands, suits, causes of action, or proceedings against such directors,
officers, or employees based upon any act or omission related to such
present and former directors', officers', or employees' service with, for,
or on behalf of UM&M, shall survive confirmation of this Plan and remain
unaffected thereby, irrespective of whether indemnification is owed in
connection with an occurrence before or after the Petition Date.
H. TERM OF INJUNCTIONS OR STAYS
Unless otherwise provided in the Plan or the Confirmation Order, all
injunctions or stays provided for in the Chapter 11 Case and extant on the
Confirmation Date (excluding any injunctions or stays contained in this
Plan or the Confirmation Order), shall remain in full force and effect
until the Consummation Date.
I. NO LIABILITY FOR CERTAIN TAX CLAIMS
Unless a taxing authority has filed a proof of Claim, including but
not limited to those proofs of Claim, if any, deemed filed prior to the Bar
Date, no Claim of such authority shall be Allowed for taxes or the
disallowance of tax losses arising out of the failure of UM&M to have filed
any income tax return, or arising out of an audit of any return, for any
tax period prior to the Petition Date. To the extent that any Claim
asserted by a taxing authority seeks recovery of interest, a penalty, or a
fine against UM&M, that portion of such claim, if Allowed, which represents
such interest, penalty or fine shall be disallowed.
J. ADMINISTRATIVE CLAIMS BAR DATE
The Confirmation Order will operate to establish an Administrative
Claims Bar Date for all holders of Administrative Claims, except for
Professional Fees and the expenses of the members of the Committee, 30 days
after the Confirmation Date. Holders of asserted Administrative Claims,
except for Professional Fees and the expenses of the members of the
Committee, not paid on or following the Consummation Date, may submit
proofs of Claim on or before such Administrative Claims Bar Date. The
notice of Confirmation to be delivered pursuant to Fed. R. Bankr. P.
3020(c) and 2002(f) will set forth such date and constitute notice of this
Administrative Claims Bar Date. Reorganized UM&M will have 90 days
following the Administrative Claims Bar Date to review and object to such
Administrative Claims before a hearing for determination of Allowance of
such Administrative Claims.
At or before the Confirmation Hearing, each professional retained in
the Chapter 11 Case and the members of the Committee shall submit to the
Bankruptcy Court, with notice to UM&M and the Committee, an estimate of its
Claim for Professional Fees, including reimbursement of expenses, through
Confirmation. UM&M shall place in escrow or a segregated account a sum
sufficient to pay the estimated, unpaid Professional Fees and expenses in
full. Each professional retained in the Chapter 11 Case shall file its
final application for payment of fees and expenses on or before the
forty-fifth (45th) day following Confirmation.
K. PROVISIONS GOVERNING SALE OF WARREN AND WARWICK FACILITIES
1. Warren Facility Sale
UM&M shall use its best efforts to enter into a sale contract with a
prospective buyer of the Warren Facility on or before February 28, 1998 and
to close such sale on or before March 31, 1998. Until the Warren Facility
is sold, UM&M, or the prospective buyer, shall at UM&M's expense, (i) keep
the Warren Facility free and clear of any further liens and security
interests, and (ii) be responsible for payments of all costs associated
with the operation of the Warren Facility including taxes, insurance, and
maintenance. UM&M shall (i) send to Foothill a copy of the contract for the
sale of the Warren Facility prior to execution and (ii) notify Foothill of
the date, time and place of the closing of the sale. Within three (3)
business days of UM&M's receipt of the Warren Facility Proceeds, UM&M shall
transfer such funds to the holder of the Allowed Class 2.01 Foothill
Secured Claims.
2. Warwick Facility Sale
UM&M shall use its best efforts to enter into a sale contract with a
prospective buyer of the Warwick Facility on or before February 28, 1998
and to close such sale on or before March 31, 1998. Until the Warwick
Facility is sold, UM&M, or the prospective buyer, shall at UM&M's expense,
(i) keep the Warwick Facility free and clear of any further liens and
security interests, and (ii) be responsible for payments of all costs
associated with the operation of the Warwick Facility including taxes,
insurance, and maintenance. UM&M shall (i) send to Foothill a copy of the
contract for the sale of the Warwick Facility prior to execution and (ii)
notify Foothill of the date, time and place of the closing of the sale.
Within three (3) business days of UM&M's receipt of the Warwick Facility
Proceeds, UM&M shall transfer such funds to the holder of the Allowed Class
2.01 Foothill Secured Claims.
L. FEES, COSTS AND EXPENSES OF EXISTING INDENTURE TRUSTEE
Subject to applicable provisions of the Bankruptcy Code and, if and
to the extent necessary, approval of the Bankruptcy Court, the Existing
Indenture Trustee shall be entitled to payment for its reasonable fees,
costs and expenses as provided for under the Old Indenture; provided,
however, that if UM&M or Reorganized UM&M deems such fees, costs and
expenses of the Existing Indenture Trustee to be reasonable, then, except
as otherwise provided in the Confirmation Order, Reorganized UM&M may pay
such fees, costs and expenses without further order of the Bankruptcy
Court.
M. NOTICES
Any notice required or permitted to be provided to UM&M and the
Committee under the Plan shall be in writing and served by (a) certified
mail, return receipt requested, (b) hand delivery, or (c) overnight
delivery service, to be addressed as follows:
Skadden, Arps, Slate, Meagher & Flom LLP
Attorneys for United Merchants and Manufacturers, Inc.
919 Third Avenue
New York, New York 10022-3897
Attn: Michael L. Cook, Esq.
and
Zalkin, Rodin & Goodman LLP
Attorneys for the Committee
750 Third Avenue
New York, New York 10017-2771
Attn: Andrew D. Gottfried, Esq.
N. GOVERNING LAW
Unless a rule of law or procedure is supplied by federal law
(including the Bankruptcy Code and Bankruptcy Rules), the laws of the State
of New York shall govern the construction and implementation of the Plan
and any agreements, documents, and instruments executed in connection with
the Plan. The laws of the State of Delaware shall govern corporate
governance matters.
Dated: New York, New York
February 25, 1997
UNITED MERCHANTS AND
MANUFACTURERS, INC.,
Debtor-in-Possession
By: /s/ Uzi Ruskin
-----------------------
Uzi Ruskin
Chairman and Chief
Executive Officer
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for United Merchants
and Manufacturers, Inc.,
Debtor-in-Possession
By: /s/ Michael L. Cook
---------------------------------
(A Member of the Firm)
Michael L. Cook (MC 7887)
Lawrence V. Gelber (LG 9384)
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
EXHIBIT A
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
AMENDED CERTIFICATE OF INCORPORATION AND BY-LAWS
THIS DOCUMENT IS SUBJECT TO MODIFICATION AND AMENDMENT PRIOR TO
COMPLETION AS PROVIDED IN ARTICLE XI OF THE PLAN.
RESTATED
CERTIFICATE OF INCORPORATION
OF
UNITED MERCHANTS AND MANUFACTURERS, INC.
UNITED MERCHANTS AND MANUFACTURERS, INC., a corporation organized and
existing under the laws of the State of Delaware, hereby certifies as
follows:
1. The name of the corporation is United Merchants and Manufacturers,
Inc. United Merchants and Manufacturers, Inc. was originally incorporated
under the same name, and the original Certificate of Incorporation was
filed with the Secretary of State of the State of Delaware on October 5,
1928. A Restated Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on August 26, 1991.
2. Pursuant to Section 303 of the General Corporation Law of the
State of Delaware, this Restated Certificate of Incorporation amends,
restates and integrates the provisions of the previous Restated Certificate
of Incorporation of this corporation.
3. The text of the Restated Certificate of Incorporation as
heretofore amended or supplemented is hereby further amended as follows:
FIRST: The name of this corporation is: UNITED MERCHANTS AND
MANUFACTURERS, INC.
SECOND: The principal office of the corporation in the State of
Delaware is located at City of Wilmington, County of New Castle, State of
Delaware. The name and address of its resident agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code.
FOURTH:
O. Authorized Capital. The total number of shares of stock which the
corporation shall have authority to issue is 40,000,000 shares of common
stock each having a par value of $.01 per share (the "Common Stock"), and
10,000,000 shares of preferred stock each having a par value of $.01 per
share (the "Preferred Stock").
P. Preferred Stock. Shares of the Preferred Stock of the corporation
may be issued from time to time in one or more classes or series, each of
which class or series shall have such distinctive designation or title as
shall be fixed by the Board of Directors of the corporation in a resolution
or resolutions adopted prior to the issuance of any shares thereof. Each
such class or series of Preferred Stock shall have such voting powers, full
or limited, and such preferences and relative, participating, optional or
other special rights and such qualifications, limitations or restrictions
thereof, as shall be stated in such resolution or resolutions providing for
the issue of such class or series of Preferred Stock as may be adopted from
time to time by the Board of Directors prior to the issuance of any shares
thereof pursuant to the authority hereby expressly vested in it, all in
accordance with the laws of the State of Delaware.
Q. Non-Voting Equity Securities. Notwithstanding the foregoing, the
corporation shall not issue any non-voting equity securities.
FIFTH:
A. Certain Restrictions on the Transfer of Common Stock. In order to
preserve the net operating loss carryovers, capital loss carryovers and tax
credit carryovers (the "Tax Benefits") to which the Corporation is entitled
pursuant to the Internal Revenue Code of 1986, as amended, or any successor
statute (collectively, the "Code") and the regulations thereunder, the
following restrictions shall apply for the two-year period immediately
following the effective date of the Restated Certificate of Incorporation
of the corporation:
(1) No person shall acquire any shares of Common Stock, or any
option or warrant to purchase any such stock, to the extent such
acquisition would cause the Ownership Interest Percentage (as defined
below) of the acquiror or any other person to increase above five (5)
percent, whether or not said acquiror or other person held stock of
the corporation, or options or warrants to purchase such stock, in
excess of such percentage before such transfer. In addition, no
person whose Ownership Interest Percentage exceeds five (5) percent
shall transfer any shares of Common Stock of the corporation or any
options or warrants to purchase such stock. For purposes of this
Article FIFTH, (a) "person" refers to any individual, corporation,
estate, trust, association, company, partnership, joint venture or
similar organization; (b) a person's "Ownership Interest Percentage"
shall be the sum of such person's direct ownership interest in the
corporation as determined under Treasury Regulation Section
1.382-T(f)(8) or any successor regulation and such person's indirect
ownership interest in the corporation as determined under Treasury
Regulation Section 1.382-2T(f)(15) or any successor regulation,
except that, for purposes of determining a person's direct ownership
interest in the corporation, any ownership interest held by such
person in the Corporation described in Treasury Regulation Section
1.38-2T(f)(18)(iii)(A) or any successor regulation shall be treated
as stock of the corporation, and for purposes of determining a
person's indirect ownership interest in the corporation, Treasury
Regulation Sections 1.382-2T(g)(2), 1.382-2T(h)(2)(iii) and
1.382-2T(h)(6)(iii) or any successor regulations shall not apply and
any stock that would be attributed to such person pursuant to the
option attribution rule of Treasury Regulation Section 1.382-2T(h)(4)
or any successor regulation, if to do so would result in an ownership
change, shall be attributed to such person without regard to whether
such attribution results in an ownership change; (c) "transfer"
refers to any means of conveying legal or beneficial ownership of
shares of stock of the corporation, or options or warrants to
purchase such shares, other than stock, or options or warrants to
purchase stock, acquired by reason of death, gift, divorce or
separation, whether such means is direct or indirect, voluntary or
involuntary, including, without limitation the transfer of ownership
of any entity that owns shares of stock of the corporation, or
options or warrants to purchase such share; and (d) "transferee"
means any person to whom stock, or options or warrants to purchase
stock, of the Corporation is transferred.
(2) Any transfer of shares of Common Stock of the corporation,
or options or warrants to purchase any such shares, that would
otherwise be prohibited pursuant to the preceding subparagraph, shall
nonetheless be permitted if information relating to a specific
proposed transaction is presented to the Board of Directors and the
Board determines that such transaction will not jeopardize the Tax
Benefits, based upon an opinion of legal counsel selected by the
Board of Directors to that effect. The transfer restrictions set
forth in this Article FIFTH shall not be effective if (a) the Board
of Directors authorized the filing of a federal tax return electing
to opt out of Section 382(1)(5) of the Code or (b) the Board of
Directors determines that Section 382(1)(5) does not apply. The
provisions of this Article FIFTH shall not apply to a transfer of
Common Stock pursuant to a bona fide tender offer for at least 50% of
aggregate amount of the corporation's Common Stock for the sole
purpose of allowing stockholders to tender their shares pursuant to
the offer. Nothing in this subparagraph shall be construed to limit
or restrict the Board of Directors in the Exercise of its fiduciary
duties under applicable law.
B. Attempted Transfer in Violation of Transfer Restrictions. Unless
approval of the Board of Directors is obtained, or a bona fide tender offer
is commenced, as provided in subparagraph A(2) of this Article FIFTH, any
attempted acquisition or transfer of shares of Common Stock of the
corporation, or options or warrants to acquire such shares, in excess of
the shares or options or warrants that could be transferred to transferee
without restriction under subparagraph A(1) of this Article FIFTH is not
effective to transfer ownership of such excess shares, or options or
warrants to acquire shares (the "Prohibited Shares/Options") to the
purported acquiror thereof (the "Purported Acquiror") who shall not be
entitled to any rights as stockholder or option holder or warrantholder of
the corporation with respect to the Prohibited Shares/Options (including,
without limitation, the right to vote or to receive dividends with respect
thereto). All rights With respect to the Prohibited ted Shares/Options
shall remain the property of the person who initially purported to transfer
Prohibited Shares/Options to a purported Acquiror (the "Initial
Transferor") until such time as the Prohibited Shares/Options are resold as
set forth in subparagraph B(1) or subparagraph B(2) of this Article FIFTH.
The Purported Acquiror, by acquiring ownership of shares of the Common
Stock, or options or warrants to purchase such shares, that are Prohibited
Shares/Options, shall be deemed to have consented to all the provisions of
this Article FIFTH and to have agreed to act as provided in the following
subparagraph B(1):
(1) Upon demand by the corporation, the Purported Acquiror
shall transfer any certificate or other evidence of purported
ownership of the Prohibited Shares/Options within the Purported
Acquiror's possession or control, along with any dividends or other
distributions paid by the corporation with respect to the Prohibited
Shares/Options that were received by the Purported Acquiror (the
"Prohibited Distributions"), to an agent designated by the
corporation (the "Agent"). If the Purported Acquiror has sold the
Prohibited Shares/Options after purportedly acquiring them, the
Purported Acquiror shall be deemed to have sold the Prohibited
Shares/Options as agent for the Initial Transferor, and in lieu of
transferring the Prohibited Shares/Options and Prohibited
Distributions to the Agent shall transfer to the Agent the Prohibited
Distributions ad the proceeds of such sale (the "Resale Proceeds")
except to the extent that the Agent grants written permission to the
Purported Acquiror to retain a portion of the Resale Proceeds not
exceeding the amount that would have been payable by the Agent to the
Purported Acquiror pursuant to the following subparagraph B(2) if the
Prohibited Shares/Options had been sold by the Agent rather than by
the Purported Acquiror. Any purported transfer of the Prohibited
Shares/Options by the Purported Acquiror other than a transfer
described in one of the two preceding sentences shall not be
effective to transfer any ownership of the Prohibited Shares/Options.
(2) The Agent shall sell in an arm's length transaction
(through the exchange or the inter-dealer quotation system upon which
the Common Stock is listed or quoted, if possible) any Prohibited
Shares/Options transferred to the Agent by the Purported Acquiror,
and the proceeds of such sale (the "Sale Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated to the Purported Acquiror
up to the purported purchase price paid or value of consideration
surrendered by the Purported Acquiror for the Prohibited
Shares/Options. Subject to the succeeding provisions of this
subparagraph, any Resale Proceeds or Sale Proceeds in excess of the
amount allocable to the Purported Acquiror pursuant to the preceding
sentence, together with any Prohibited Distributions, shall be the
property of the Initial Transferor. If the identify of the Initial
Transferor cannot be determined by the Agent through inquiry made to
the Purported Acquiror, the Agent shall publish appropriate notice
(in the Wall Street Journal, if possible) for seven consecutive
business days in an attempt to identify the Initial Transferor in
order to transmit any Resale Proceeds or Sale Proceeds or Prohibited
Distributions due to the Initial Transferor pursuant to this subpara-
graph. The Agent may also take, but is not required to take, other
reasonable actions to attempt to identify the Initial Transferor. If
after 90 days following the final publication of such notice the
Initial Transferor has not been identified, any amounts due to the
Initial Transferor pursuant to this subparagraph may be paid over to
a court or governmental agency, if applicable law permits, or
otherwise shall be transferred to an entity designated by the
corporation that is described in Section 501(c)(3) of the Code. In no
event shall be any such amounts due to the Initial Transferor insure
to the benefit of the corporation or the Agent, but such amounts may
be used to cover expenses (including but not limited to the expenses
of publication) incurred by the Agent in attempting to identify the
Initial Transferor.
C. Prompt Enforcement Against Purported Acquiror. Within thirty (30)
business days of learning of a purported transfer of Prohibited
Shares/Options to a Purported Acquiror, the corporation, through its
Secretary, shall demand that the purported Acquiror surrender to the Agent
the certificates representing the Prohibited Shares/Options, or any Resale
Proceeds, and any Prohibited Distributions, and, if such surrender is not
made by the Purported Acquiror within thirty (30) business days from the
date of such demand, the corporation shall institute legal proceedings to
compel such transfer, provided, however, that nothing in this Paragraph C
shall preclude the corporation in its discretion from immediately bringing
legal proceedings without a prior demand, and also provided that failure of
the corporation to act within the time periods set out in this Paragraph C
shall not constitute a waiver of any right of the corporation to compel any
transfer required by subparagraph (B)(1) of this Article FIFTH.
D. Additional Actions to Prevent Violation or Attempted Violation.
Upon determination by the Board of Directors that there has been or is
threatened a purported transfer of Prohibited Shares/Options to a Purported
Acquiror, the Board of Directors may take such action in addition to any
action require by the preceding Paragraph as it deems advisable to give
effect to the provisions of this Article FIFTH, including, without
limitation, refusing to give effect on the books of this corporation to
such purported transfer or instituting proceedings to enjoin such purported
transfer.
E. Obligation to Provide Information. The corporation may require as
a condition to the registration of the transfer of any shares of its Common
Stock, or options or warrants to acquire such shares, that the proposed
transferee furnish to the corporation all information reasonably requested
by the corporation with respect to all the proposed transferee's direct or
indirect ownership interests in, or options or warrants to acquire Common
Stock of, the corporation.
F. Legends. All certificates evidencing ownership of this corporation
or options or warrants to acquire such shares, that are subject to the
restrictions on transfer contained in this Article Fifth shall bear a
conspicuous legend referencing the restrictions set forth in this Article
FIFTH.
SIXTH: This corporation is to have perpetual existence.
SEVENTH: The private property of the stockholders shall not be
subject to the payment of corporate debts to any extent whatever.
EIGHTH: The corporation reserves the right to amend, alter, change or
repeal any provisions contained in this restated certificate of
incorporation in the manner now or hereafter prescribed by law, and all
rights and powers conferred herein upon stockholders, directors and
officers are subject to this reserved power.
NINTH: The Board of Directors may from time to time provide and carry
out and revise and change a plan or plans for the participation by all or
any of the employees (including directors and officers of the corporation
or of any corporation in which or in the welfare of which the corporation
has any interest, and those actively engaged in the conduct of the
corporation's business or the business of its subsidiary or affiliated
corporations), in the profits of the corporation or of any subsidiary or of
any branch or division thereof as part of the corporations's legitimate
expenses or the expenses of such subsidiary, branch or division.
TENTH: The following provisions are inserted for the regulation of
the business and for the conduct of the affairs of the corporation and it
is expressly provided that the same are intended to be in furtherance and
not in limitation of or exclusion of the powers conferred by statute.
The number of directors of the corporation shall be fixed and may be
altered from time to time as may be provided in the By-Laws; provided that
the number of directors of the corporation shall not be less than three. In
case of any increase in the number of directors, the additional directors
may be elected by the Board of Directors to hold office until the next
annual meeting of the stockholders and until their successors are elected
and qualify. In case of a vacancy in the Board of Directors, a majority of
the remaining members of the Board may elect directors to fill such
vacancy.
The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board, designate one or more committees, each
committee to consists of two or more of the directors of the corporation,
which to the extent provided in said resolution or resolutions or in the
By-Laws of the corporation, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
corporation, and may have power to authorize the seal of the corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be stated in the By-Laws of the
corporation or as may be determined from time to time by resolution adopted
by the Board of Directors.
The By-Laws may prescribe the number of directors necessary to
constitute a quorum, which number may be less than a majority of the whole
board of Directors, but not less than the number required by law.
The Board of Directors may from time to time delegate to Trustees
under a Voting Trust the right to vote upon any or all stock which this
corporation owns, and for the purpose may exchange the certificates of
stock owned by it for Voting Trust Receipts.
The Board of Directors from time to time may determined whether and
to what extent, and at what times and places and under what conditions and
regulations, the accounts and books of the corporation (other than the
stock ledger), or any of them, shall be open to the inspection of the
stockholders; and no stockholder shall have any right to inspect any
account or book or document of the corporation, unless expressly so
authorized by statute or by a resolution of the stockholders or the Board
of Directors.
Subject always to the By-Laws made by the stockholders, the Board of
Directors may make By-Laws and, from time to time, may alter, amend or
repeal any By-Laws, but any By-Laws made by the Board of Directors may be
altered or repealed by the stockholders.
Both stockholders and directors shall have power, if the By-Laws of
the corporation so provide, to hold their meetings either within or without
the State of Delaware, and to have one or more offices in addition to the
principal office in the State of Delaware. The books of the corporation
(subject to the provisions of the statutes) may be kept outside the State
of Delaware at such places as may be from time to time designated by the
Board of Directors or in the By-Laws of the Corporation.
In addition to the powers and authorities hereinbefore or by statute
expressly conferred upon them, the Board of Directors is hereby empowered
to exercise all such powers and do all such acts and things may be
exercised or done by the corporation; subject, nevertheless, to the
provisions of the statutes of Delaware, of this certificate, and to any
by-laws from time to time made by the stockholders; provided, however, that
no By-Laws so made shall invalidate any prior act of the directors which
would have been valid if such By-Laws had not been made.
No contract or other transaction entered into by the corporation
shall be affected by the fact that any director of the corporation in any
way is interested in or connected with any party to such contract or
transaction or himself is a party to such contract or transaction, provided
that such contract or transaction shall be approved by a majority of the
directors present at the meeting of the Board or of the Committee of the
Board of Directors authorizing or confirming such contract or transaction,
which majority shall consist of directors not interested or connected.
Any contract, transaction or act of the corporation of the Board of
Directors or any Committee of the Board of Directors, which shall be
ratified by a majority of a quorum of the stockholders at any annual
meeting or at any special meeting called for said purpose, shall be as
valid and as binding as though ratified by every stockholder of the
corporation.
ELEVENTH: No director shall be personally liable to the corporation
or any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, ( ii)
for acts or omissions not in good faith or which involve intention
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of
the Delaware General Corporation Law or (iv) for any transaction from which
the director derived an improper personal benefit. No repeal or
modification of this Article ELEVENTH, nor the adoption of any provision of
this restated certificate of incorporation inconsistent with this Article
ELEVENTH, by the stockholders of the corporation shall adversely affect any
right or protection of a director of the corporation existing at the time
of such repeal, modification or adoption of an inconsistent provision with
respect to acts or omissions occurring prior to such repeal, modification
or adoption.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has
been signed under the seal of the corporation this day of , 1997.
UNITED MERCHANTS AND
MANUFACTURERS, INC.
By: ______________________
Uzi Ruskin
President
(Seal)
Attest:
_____________________________________
[Assistant] Secretary
EXHIBIT B
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW SENIOR NOTE
UNITED MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW SENIOR NOTE
The principal terms of the New Senior Note to be issued by
Reorganized UM&M under the Plan are as follows:
ISSUER: United Merchants and Manufacturers, Inc.
(the "Issuer")
NOTE: 12% Senior Secured Note (the "Note")
PRINCIPAL AMOUNT: $7,295,178
FINAL MATURITY: 5 years
INTEREST: (A) Payment of Interest. Interest on
the Note will payable annually at rate
of 12% per annum. Interest will accrue
from the date of issuance of the Note
until the Note is paid in full;
provided, however, that no interest will
be paid during any fiscal year in which
Net Earnings (as defined below)
(excluding interest expense, net of any
applicable income tax benefits accrued with
respect thereto, on Indebtedness other
than Senior Indebtedness (as defined
below) does not exceed the Minimum
Amount (as defined below).
(B) Interest Contingent. During any
fiscal year in which the Issuer retains
ownership to either the Warren Facility or
the Warwick Facility, the amount of
interest payable on the next interest
payment date, for such fiscal year and any
prior fiscal year in which interest accrued
but remains unpaid, will be the lesser of
(i) the amount which would be due pursuant
to (A) above or (ii) the rents actually
received by the Issuer pursuant to its
leases of the Warren Facility and Warwick
Facility, net of all direct expenses.
(C) Net Earnings Exceeding Minimum
Amount. If Net Earnings (excluding interest
expense, net of any applicable income tax
benefits accrued with respect thereto, on
Indebtedness other than Senior
Indebtedness) for any fiscal year exceed
the Minimum Amount, the amount of interest
which shall be payable on the next interest
payment date, for such fiscal year and any
previous fiscal year in which interest
accrued but remains unpaid, shall be the
lesser of (i) the amount which would be due
pursuant to (A) above, less any amounts
paid pursuant to (B) above, and (ii) the
excess of Net Earnings (excluding interest
expense, net of any applicable income tax
benefits accrued with respect thereto, on
Indebtedness other than Senior
Indebtedness) over the Minimum Amount, less
any amounts paid pursuant to (B) above.
OPTIONAL REDEMPTION: The Issuer may redeem all or a portion of
the Note at a redemption price of 100% of
the principal amount plus accrued interest
to the applicable redemption date.
SECURITY: Assets of Reorganized UM&M
RANK OF SECURITY POSITION: First priority lien
DEFINITIONS: "Indebtedness" shall mean (i) the principal
of and premium, if any, and interest on
(including, without limitation, interest
accruing after the commencement of a case
arising under Bankruptcy Law), and any
other amounts owing with respect to any
liability of the Issuer (A) for borrowed
money, (B) evidenced by a note, debenture
or similar instrument whether issued in
connection with the acquisition of any
property, assets, (including inventory or
similar property acquired in the ordinary
course of business) or securities, or
otherwise, (C) arising in the ordinary
course of business (including trade
payables), (D) any indebtedness which by
its terms is superior in right of payment
to the Note, and (E) obligations under
factoring agreements, accounts receivable
purchase agreements and accounts receivable
securitization agreements, (ii) capital and
financing lease obligations and other
purchase money obligations of the Issuer,
(iii) Interest Swap Obligations of the
Issuer, (iv) any guaranty, endorsement or
other contingent obligation of the Issuer
in respect of obligations of others of the
type described in the preceding subclauses
(i), (ii) and (iii) (in each case without
regard to when such obligations were
incurred or whether they are secured or
unsecured), and (v) any amendments,
refundings, renewals of, extensions or
other modifications of or supplements to
any obligation described in the preceding
clauses (i) through (iv). Notwithstanding
the foregoing, Indebtedness shall not
include the Note or the New Subordinated
Debentures.
"Minimum Amount" shall mean Ten Million
dollars ($10,000,000); provided, however,
that if the Issuer's fiscal year is
changed, and as a result the first fiscal
year after such change is less than 365
days, then for such fiscal year the Minimum
Amount shall be $10,000,000 multiplied by a
fraction the numerator of which shall be
the number of days in such fiscal year and
the denominator of which shall be 365.
"Net Earnings" shall mean, for any period
for which such amount is being determined,
the net earnings of the Issuer and its
consolidated subsidiaries during such
period in accordance with generally
accepted accounting principles, as set
forth in the consolidated financial
statements of the Issuer and which are
included in the Issuer's Form 10-Q
Quarterly Reports, Form 10-K Annual Reports
and Form 8-K Current Reports which are
filed with the SEC (or, in the event that
the Issuer is no longer legally required to
file such reports, financial statements
reflecting the same information and
deliverable on the same dates as the
above-referenced filings), provided that
there shall be excluded (i) income of any
Person (other than a consolidated
subsidiary of the Issuer) in which the
Issuer or any of its consolidated
subsidiaries has an equity investment or
comparable interest, except to the extent
of the amount of dividends or other
distributions actually paid to the Issuer
or any of its consolidated subsidiaries by
such Person during such period, (ii) the
income of any subsidiary of the Issuer to
the extent that the declaration or payment
of dividends or similar distributions by
that subsidiary of the income is not at the
time permitted by any judgment, decree,
order, statute, rule or governmental
regulation applicable to that subsidiary,
and (iii) any nonrecurring, non-cash
gains and losses, net of any applicable
income taxes.
"Senior Indebtedness" shall mean
Indebtedness, unless by the terms of the
instrument creating or evidencing any such
obligation it is expressly provided that
such obligation is on parity with, or
otherwise not superior in right of payment
to, the Note.
EXHIBIT C
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW SUBORDINATED DEBENTURES
UNITED MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW SUBORDINATED DEBENTURES
The principal terms of the New Subordinated Debentures to be issued
by Reorganized UM&M under the Plan are as follows:
ISSUER: United Merchants and Manufacturers, Inc.
(the "Issuer")
SECURITIES: 3-1/2% Subordinated Debentures (the
"Securities")
PRINCIPAL AMOUNT: $76,691,000
FINAL MATURITY: 25 years
INTEREST: 3-1/2% per annum; provided, however,that
the Issuer will pay interest on overdue
installments of interest on the
Securities at the applicable federal rate
OPTIONAL REDEMPTION: The Issuer may redeem all or a portion
of the Securities at a redemption price
of 100% of the principal amount plus
accrued interest to the applicable
redemption date.
SUBORDINATION: Securities are subordinated to all
Senior Indebtedness.
DENOMINATIONS: $1,000 and integral multiples of $1,000.
COVENANTS: (A) Payment of Securities: The Issuer
will pay the principal of and interest on
the Securities on the dates and in the
manner provided in the Securities.
(B) Compliance Certificate and Notice of
Default: The Issuer shall deliver to the
trustee an officers' certificate (i) within
120 days after the end of each fiscal year
stating whether or not any Default or Event
of Default has occurred during the fiscal
year and (ii) within 30 days upon becoming
aware of any Default or Event of Default.
(C) Securities and Exchange Commission
("SEC") Reports: The Issuer shall file with
the trustee within 15 days after it files
them with the SEC, copies of the annual
reports and other information which the
Issuer is required to file with the SEC
pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as
amended. The Issuer shall also comply with
TIA ss. 314(a).
(D) Consolidation and Mergers: The
Issuer shall not consolidate or merge with
or into, or transfer or lease all or
substantially all of its assets to, any
other person unless:
(i) no Default or Event of Default
shall have occurred and be continuing
at the time of such transaction and no
Event of Default shall occur as a
consequence thereof; and
(ii) the successor person surviving
such consolidation or merger (if other
than the Company), or to which such
sale or conveyance has been made,
expressly assumes by supplemental
indenture in a form satisfactory to the
trustee all the obligations of the
Issuer under the Securities.
EVENTS OF DEFAULT: Any one or more of the following shall
constitute an Event of Default:
(A) Default shall occur in the payment
of principal of any Security when the same
shall have become due and such default
shall continue for 30 days; or
(B) Default shall occur in the payment
of interest on any Security when the same
becomes due and payable and the default
continues for 30 days; or
(C) The Issuer fails to comply with any
of its other agreements in the Securities
or the Indenture and the Default continues
for 60 days after receipt of notice from
the trustee or holders of at least 50% in
principal amount of the Securities then
outstanding that such non-compliance
constitutes an Event of Default; or
(D) The Company, pursuant to or within
the meaning of any Bankruptcy Law:
commences a voluntary case; consents to the
entry of an order for relief against it in
an involuntary case; consents to the
appointment of a Custodian of it or for any
substantial part of its property; or makes
a general assignment for the benefit of its
creditors; or
(E) A court enters an order or decree
under any Bankruptcy Law that: is for
relief against the Issuer in an involuntary
case; appoints a Custodian of the Issuer or
for any substantial part of its property;
or orders the liquidation of the Issuer and
the order or decree remains unstayed and in
effect for 30 days; or
(F) The Issuer defaults in the
performance of the terms of any
Indebtedness (other than the Securities) in
the aggregate principal amount of
$5,000,000 or more, and such Indebtedness
shall have been declared to be due and
payable immediately and such acceleration
shall not have been rescinded or annulled
at the time of declaration of acceleration.
DEFINITIONS: "Indebtedness" shall mean (i) the principal
of and premium, if any, and interest on
(including, without limitation, interest
accruing after the commencement of a case
arising under Bankruptcy Law), and any
other amounts owing with respect to (a) all
obligations for money borrowed by the
Issuer (including without limitation,
obligations to banks and other financial
institutions in respect of letters of
credit, bankers' acceptances and similar
obligations), (b) capital and financing
lease obligations of the Issuer (including
trade payables), (c) obligations of the
Issuer in connection with the acquisition
of all or any portion of any Property or
asset representing all or a portion of the
deferred purchase price thereof, and (d)
any guaranty, endorsement or other
contingent obligation of the Issuer in
respect of obligations of others of the
type described in the preceding subclauses
(a), (b) and (c) (in each case without
regard to when such obligations were
incurred or whether they are secured or
unsecured), and (ii) any refundings,
renewals of, extensions or other
modifications of or supplements to any
obligation described in the preceding
clause (i).
"Senior Indebtedness" shall mean
Indebtedness, unless by the terms of the
instrument creating or evidencing any such
obligation it is expressly provided that
such obligation is on parity with, or
otherwise not superior in right of payment
to, the Securities.
EXHIBIT D
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW COMMON STOCK
UNITED MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW COMMON STOCK
The principal terms of the New Common Stock to be issued by
Reorganized UM&M under the Plan are as follows:
AUTHORIZATION: 40 million shares
INITIAL ISSUANCE: 8 million shares
PAR VALUE: $.01 per share
VOTING RIGHTS: One vote per share
PREEMPTIVE RIGHTS: None
DIVIDENDS: Payable at the discretion of the board of
directors of Reorganized UM&M
TRANSFER RESTRICTIONS: As imposed by Article Fifth of the Restated
Certificate of Incorporation, and as
required by Article IV.B of the Plan, there
shall be certain restrictions on the
ability of any entity to acquire more than
five (5) percent of the New Common Stock
(or rights to acquire New Common Stock), or
to transfer or acquire New Common Stock (or
rights to acquire New Common Stock), if
such entity owns five (5) percent of the
New Common Stock (or equivalents)
EXHIBIT E
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW WARRANTS
UNITED MERCHANTS AND MANUFACTURERS, INC.
DESCRIPTION OF NEW WARRANTS
The principal terms of the New Warrants to be issued by Reorganized
UM&M under the Plan are as follows:
SERIES A WARRANTS
TERM: Three months, commencing on the
Distribution Date
EXERCISE PRICE: $.50 per share
NUMBER OF WARRANTS: 69,491
RESERVATION OF SHARES
OF NEW COMMON STOCK: 2,015,239 shares
ANTIDILUTION PROVISIONS: Protected against dilution caused by:
i) dividends of New Common Stock;
ii) rights issuances;
iii) distribution of assets other than
dividends out of current earnings;
No adjustment shall be required upon the
occurrence of any of the foregoing events
unless such adjustment would require an
increase or decrease of at least one
percent (1%) of the number of shares into
which the New Warrants are exercisable
TRANSFER RESTRICTIONS: As imposed by Article Fifth of the Restated
Certificate of Incorporation, and as
required by Article IV.B of the Plan, there
shall be certain restrictions on the
ability of any entity to acquire more than
five (5) percent of the New Common Stock
(or rights to acquire New Common Stock), or
to transfer or acquire New Common Stock (or
rights to acquire New Common Stock), if
such entity owns five (5) percent of the
New Common Stock (or equivalents)
SERIES B WARRANTS
TERM: Three months, commencing three months
and one week after the Distribution Date
EXERCISE PRICE: $.50 per share
NUMBER OF WARRANTS: 69,491
RESERVATION OF SHARES
OF NEW COMMON STOCK: 2,015,239 shares minus the actual number
of shares issued pursuant to the
exercise of Series A Warrants
ANTIDILUTION PROVISIONS: Similar to Series A Warrants
TRANSFER RESTRICTIONS: Similar to Series A Warrants
EXHIBIT F
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
PBGC AGREEMENT
UNITED STATES BANKRUPTCY COURT CONFORMED COPY
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - x
In re :
UNITED MERCHANTS AND MANUFACTURERS, : Jointly Administered
INC. and VICTORIA CREATIONS, INC., Chapter 11 Case No.
: 96 B 40941 (AJG)
Debtors.
:
- - - - - - - - - - - - - - - - - - - - x
AGREEMENT TO COMPROMISE CLAIMS OF THE
PENSION BENEFIT GUARANTY CORPORATION
THIS AGREEMENT (the "Agreement") is made and entered into this
19th day of February, 1997, by and among United Merchants and
Manufacturers, Inc. ("UM&M"), Reunited Holdings, Inc.(1) ("RHI," and together
with UM&M, the "DIPs"), and the Pension Benefit Guaranty Corporation
("PBGC").
- ------------
1 Formerly Victoria Creations, Inc. ("VCI").
W I T N E S S E T H:
WHEREAS, on February 22, 1996, UM&M and VCI each filed a petition
in the United States Bankruptcy Court for the Southern District of New York
(the "Bankruptcy Court") for reorganization relief under Chapter 11 of the
United States Bankruptcy Code, 11 U.S.C. ss.ss. 101-1330, as amended (the
"Bankruptcy Code"); and
WHEREAS, the PBGC is a wholly-owned United States Government
corporation created under Title IV of the Employee Retirement Income
Security Act of 1974, 29 U.S.C. ss.ss. 1301-1461, as amended ("ERISA"),
which guarantees the payment of certain pension benefits upon termination
of a pension plan; and
WHEREAS, effective May 28, 1942, UM&M established and adopted the
Pension Plan of United Merchants and Manufacturers, Inc. & Subsidiaries
(the "Pension Plan"), to provide pension benefits for certain of its
employees, which Pension Plan is covered by ERISA; and
WHEREAS, UM&M was the contributing sponsor and Plan Administrator
of the Pension Plan within the meaning of 29 U.S.C. ss.ss. 1002(16)(A),
(B), 1301(a)(1), and (13); and
WHEREAS, pursuant to (a) the "Agreement for Appointment of Trustee
and Termination of Pension Plan" by and between UM&M and the PBGC, dated
August 6, 1996, and (b) 29 U.S.C. ss.ss. 1342(c) and 1348, the Pension Plan
was terminated and the PBGC was appointed trustee thereof, effective
January 31, 1996; and
WHEREAS, the PBGC has filed proofs of claim in UM&M's Chapter 11
case, asserting that UM&M owes the PBGC (i) $7,088,078 for unpaid minimum
funding contributions on a priority basis, (ii) $37,398,000 for unfunded
benefit liabilities on a general unsecured basis, and (iii) an unliquidated
amount for unpaid premiums, interest and penalties imposed by 29 U.S.C. ss.
1307(a), of which the portion arising post-petition is owed on a priority
basis and the remainder on a general unsecured basis (collectively, the
"UM&M Claims"); and
WHEREAS, the PBGC has filed proofs of claim in RHI's Chapter 11
case, asserting that (a) RHI is a member of UM&M's controlled group within
the meaning of 29 U.S.C. ss. 1301(a)(13) and (14) and, accordingly, is
jointly and severally liable with UM&M for certain liabilities arising from
the Pension Plan, and (b) RHI owes to the PBGC (i) $7,088,078 for unpaid
minimum funding contributions on a priority basis, (ii) $37,398,000 for
unfunded benefit liabilities on a general unsecured basis, and (iii) an
unliquidated amount for unpaid premiums, interest and penalties imposed by
29 U.S.C. ss. 1307(a), of which the portion arising post-petition is owed
on a priority basis and the remainder on a general unsecured basis
(collectively, the "RHI Claims" and, together with the UM&M Claims, the
"PBGC Claims"); and
WHEREAS, the DIPs and the PBGC dispute, among other things, the
nature, validity and amount of the PBGC Claims and the inclusion of RHI as
a member of UM&M's controlled group; and
WHEREAS, the PBGC has stated its intention to prosecute vigorously
the PBGC Claims and the DIPS have asserted that they will litigate
vigorously the validity, nature, and amount of the PBGC Claims; and
WHEREAS, the DIPs have negotiated with the PBGC concerning the
PBGC Claims in an effort to resolve the parties' disputes regarding such
claims; and
WHEREAS, as a result of such negotiations, the DIPs and the PBGC
have reached an agreement which will allow for the compromise and
settlement of the PBGC Claims; and
WHEREAS, if the PBGC Claims are not compromised now, future
proceedings could be protracted and expensive, involve complex issues of
liability and/or damages, and involve substantial uncertainties and risks
inherent in litigation; and
WHEREAS, the DIPs and the creditors' committee appointed in their
cases have considered the benefit to the DIPs' estates and creditors that
will be received as a result of the compromise and settlement of the PBGC
Claims, particularly in light of the costs, uncertainties, and risks of
further litigation, and have concluded that the settlement contained herein
is (i) fair and equitable, (ii) a reasonable resolution of the PBGC Claims,
and (iii) in the best interests of the DIPs, their creditors, and their
estates; and
WHEREAS, on January 31, 1997, UM&M and RHI each filed a
reorganization plan (the "UM&M Plan" and the "RHI Plan" and, together, the
Plans") in their Chapter 11 cases; and
WHEREAS, this Agreement is contained in and made part of each of
the Plans;
NOW THEREFORE, in consideration of the promises herein, the
receipt and sufficiency of which are hereby acknowledged, and in full
satisfaction of the PBGC Claims, UM&M, RHI, and the PBGC, intending to be
legally bound, hereby agree as follows:
1. The UM&M Claims shall be allowed in UM&M's Chapter 11 case as a
single Class 1 Other Priority Claim, as that term is defined in the UM&M
Plan, in the aggregate amount of Seventeen Million Two Hundred Thousand
Dollars ($17,200,000.00) and, together with any and all claims derivative
thereof, shall be disallowed and expunged in all other amounts and
priorities (the "Allowed UM&M Claim").
2. On the UM&M Distribution Date,(2) or as soon thereafter as
practicable, the PBGC, in full satisfaction, settlement, release, and
discharge of the Allowed UM&M Claim, and in exchange for, the Allowed UM&M
Claim, shall receive $17,200,000.00 in principal amount of New Subordinated
Debentures, as that term is defined in the UM&M Plan.
- --------------
2 The UM&M Distribution Date is the date upon which the first
distributions are made to holders of Allowed Claims in accordance with
the terms of the UM&M Plan.
3. The RHI Claims shall be allowed in RHI's Chapter 11 case as a
single Class 1 Other Priority Claim, as that term is defined in the RHI
Plan, in the aggregate amount of Four Hundred Thousand Dollars
($400,000.00) and, together with any and all claims derivative thereof,
shall be disallowed and expunged in all other amounts and priorities (the
"Allowed RHI Claim").
4. On the RHI Distribution Date,(3) or as soon thereafter as
practicable, the PBGC, in full satisfaction, settlement, release, and
discharge of the Allowed RHI Claim, and in exchange for, the Allowed RHI
Claim, shall receive $400,000.00 in cash.
- -----------------
3 The RHI Distribution Date is the date upon which the first distributions
are made to holders of Allowed Claims in accordance with the terms of
the RHI Plan.
5. The parties hereto represent and warrant to each other that the
signatories to this Agreement are authorized to execute this Agreement;
that each has full power and authority to enter into this Agreement; that
this Agreement is duly executed and delivered, and constitutes a valid and
binding agreement in accordance with its terms.
6. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements or understandings between the parties with respect to the
subject matter hereof.
7. This Agreement is expressly subject to and contingent upon (i)
Bankruptcy Court approval, and (ii) confirmation of the Plans. If this
Agreement is not approved by the Bankruptcy Court or the Plans are not
confirmed, neither this Agreement, its terms, nor any negotiations in
connection with this Agreement shall be, or in any way be construed as or
deemed to be, evidence or an admission by or against UM&M, RHI, or the
PBGC.
8. This Agreement shall be binding upon and shall inure to the
benefit of the representatives, successors, and assigns of the parties
hereto, including, without limitation, any trustee appointed in UM&M's case
or RHI's case under any chapter of the Bankruptcy Code.
9. Nothing contained herein shall constitute an admission of
liability, of any type or in any amount, on the part of UM&M, RHI or the
PBGC.
10. This Agreement may be executed and delivered in any number of
original or telecopied counterparts, each of which shall be deemed an
original, but which together shall constitute one and the same.
IN WITNESS WHEREOF, and in agreement herewith, the parties have
executed this Agreement as of the day and year first written above.
REUNITED HOLDINGS, INC.,
Debtor-in-Possession
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By: /s/ Uzi Ruskin
----------------------------
Uzi Ruskin
Its: Chairman of the Board
of Directors
UNITED MERCHANTS AND
MANUFACTURERS, INC.,
Debtor-in-Possession
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By: /s/ Uzi Ruskin
-----------------------------
Uzi Ruskin
Its: Chairman of the Board
of Directors
THE PENSION BENEFIT
GUARANTY CORPORATION
1200 K Street, N.W.
Washington, DC 20006
By: /s/ Andrea E. Schneider
------------------------------
Andrea E. Schneider
Its: Corporate Finance and
Negotiation Department
Director
EXHIBIT G
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
RHODE ISLAND REAL PROPERTY AGREEMENTS
UNITED MERCHANTS AND MANUFACTURERS, INC.
RHODE ISLAND REAL PROPERTY AGREEMENTS
Warren Facility
- ---------------
o Mortgage from United Merchants and Manufacturers, Inc. to Foothill
Capital Corporation dated June 28, 1994, recorded with the Land
Evidence Records of the Town of Warren, Rhode Island, Book 223 at
Page 161.
o Absolute Assignment of Leases and Rents from United Merchants and
Manufacturers, Inc. to Foothill Capital Corporation dated June 28,
1994, recorded with the Land Evidence Records of the Town of Warren,
Rhode Island, Book 223 at Page 192.
Warwick Facility
- ----------------
o Mortgage from United Merchants and Manufacturers, Inc. to Foothill
Capital Corporation dated June 28, 1994, recorded with the Land
Evidence Records of the City of Warwick, Rhode Island, Book 2244 at
Page 268.
o Absolute Assignment of Leases and Rents from United Merchants and
Manufacturers, Inc. to Foothill Capital Corporation dated June 28,
1994, recorded with the Land Evidence Records of the City of Warwick,
Rhode Island, Book 2244 at Page 299.
EXHIBIT H
TO
AMENDED AND RESTATED
REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC.
GENERAL MUTUAL RELEASE BY
AND BETWEEN UM&M AND UZI RUSKIN
THIS DOCUMENT IS SUBJECT TO MODIFICATION AND AMENDMENT PRIOR TO
COMPLETION AS PROVIDED IN ARTICLE XI OF THE PLAN.
MUTUAL RELEASE
KNOW ALL MEN BY THESE PRESENTS, that in consideration of the
promises and covenants set forth below and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned UNITED MERCHANTS AND MANUFACTURERS, INC.
("UM&M") and REUNITED HOLDINGS, INC. ("RHI"), for themselves and their
affiliates, subsidiaries, administrators, successors and assigns, hereby
remise, release and forever discharge UZI RUSKIN, and his administrators,
successors, and assigns, as well as their respective administrators,
successors and assigns, from any and all claims, demands, liabilities,
actions, causes of action, offsets, recoupments, obligations, suits, debts,
judgments and damages, including costs, expenses and attorneys' fees of any
kind whatsoever that UM&M or RHI now has or may have had against UZI
RUSKIN, on behalf of themselves or any other entity from the beginning of
time through the date hereof, whether arising at law or in equity, whether
direct or contingent, matured or unmatured, liquidated or unliquidated, now
known or unknown.
In consideration of the promises and covenants set forth above and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned UZI RUSKIN, for himself and
his administrators, successors and assigns, hereby remises, releases and
forever discharges UM&M and RHI and their affiliates, subsidiaries,
administrators, successors, assigns, officers, directors, employees,
representatives, authorized signers, agents, accountants and attorneys, as
well as their respective affiliates, subsidiaries, administrators,
successors and assigns, from any and all claims, demands, liabilities,
actions, causes of action, offsets, recoupments, obligations, suits, debts,
judgments and damages, including costs, expenses and attorneys' fees of any
kind whatsoever that UZI RUSKIN now has or may have had against UM&M or RHI
on behalf of himself or any other person or entity from the beginning of
time through the date hereof, whether arising at law or in equity, whether
direct or contingent, matured or unmatured, liquidated or unliquidated, now
know or unknown, including, but not limited to, UM&M's obligations arising
out of or in connection with that certain employment agreement by and
between UM&M and UZI RUSKIN, dated July 9, 1982, as subsequently amended;
provided, however, that nothing contained herein shall in any manner
abridge, limit or otherwise affect UZI RUSKIN'S rights or remedies arising
out of, under, or in connection with, the Pension Plan of United Merchants
and Manufacturers, Inc. and Subsidiaries.
It is expressly understood and agreed that this Mutual Release be,
and is, a general release, and that the consideration for this Mutual
Release is not, and is not to be construed as, an admission of liability on
the part of any of the parties hereto or, in the case of UM&M and RHI, any
of their officers, directors, employees, agents, accountants, and
attorneys, or any of them, such liability being expressly denied by each of
the parties hereto.
The parties hereto represent and warrant that they have entered
into this Mutual Release voluntarily, with full opportunity to obtain the
advice of independent legal counsel in connection herewith, and have read
each and every paragraph of this Mutual Release, and understand their
rights and obligations hereunder.
This Mutual Release contains the entire agreement between the
parties hereto, and the terms hereof are contractual and not a mere
recital. If any provision of this Mutual Release is at any time held
illegal, invalid, or unenforceable, such illegality, invalidity, or
unenforceability will not affect any other provision hereof, and such
illegal, invalid, or unenforceable provision and the remainder of the
Mutual Release shall be deemed modified to the extent necessary to render
enforceable the remainder hereof.
The parties hereto stipulate that no adequate remedy at law exists
for any breach of the provisions of this Mutual Release, and that it shall
be specifically enforceable. This Mutual Release shall be governed by and
construed in accordance with the laws of the State of New York without
regard to the choice of law provisions thereof.
This Mutual Release may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Executed at Fort Lee, New Jersey on this _____ day of
____________, 1997.
UNITED MERCHANTS AND
MANUFACTURERS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
REUNITED HOLDINGS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
UZI RUSKIN
538 Next Day Hill Drive
Englewood, New Jersey 07631
_______________________________
Executed at Englewood, New Jersey on this _____ day of
____________, 1997.
UNITED MERCHANTS AND
MANUFACTURERS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
REUNITED HOLDINGS, INC.,
2 Executive Drive
Suite 780
Fort Lee, New Jersey 07024
By:___________________________
[NAME]
Its: [TITLE]
UZI RUSKIN
538 Next Day Hill Drive
Englewood, New Jersey 07631
______________________________
CONFORMED COPY
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - - - - x
In re :
UNITED MERCHANTS AND MANUFACTURERS, : Jointly Administered
INC. and VICTORIA CREATIONS, INC., Chapter 11 Case No.
: 96 B 40941 (AJG)
Debtors.
:
- - - - - - - - - - - - - - - - - - - - x
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER UNDER
11 U.S.C. ss.ss. 1129(a) AND (b) AND FED. R. BANKR. P. 3020
CONFIRMING AMENDED AND RESTATED REORGANIZATION PLAN OF UNITED
MERCHANTS AND MANUFACTURERS, INC., DATED FEBRUARY 25, 1997
TABLE OF CONTENTS
Page
RECITALS............................................................. 1
FINDINGS OF FACT AND CONCLUSIONS OF LAW.............................. 3
1. Core Proceeding And Exclusive Jurisdiction
28 U.S.C.ss.ss. 157(b)(2) and 1334(a))................... 3
2. Judicial Notice............................................ 4
3. Burden of Proof............................................ 4
4. Transmittal And Mailing Of Materials; Notice............... 4
5. Plan Compliance With Bankruptcy Code (11
U.S.C.ss.1129(a)(1))..................................... 5
(a) Proper Classification (11 U.S.C.ss.ss.
1122, 1123(a)(1))................................. 5
(b) Specify Unimpaired Classes (11 U.S.C.ss.
1123(a)(2))....................................... 5
(c) Specify Treatment of Impaired Classes
(11 U.S.C.ss.1123(a)(3)).......................... 5
(d) No Discrimination (11 U.S.C.ss.
1123(a)(4))....................................... 5
(e) Implementation Of The Plan (11 U.S.C.ss.
1123(a)(5))....................................... 6
(f) Nonvoting Equity Securities (11 U.S.C.
ss. 1123(a)(6))................................... 7
(g) Selection Of Officers And Directors (11
U.S.C.ss.1123(a)(7)).............................. 7
(h) Additional Plan Provisions (11 U.S.C.
ss. 1123(b))...................................... 8
6. UM&M's Compliance With The Bankruptcy Code
(11 U.S.C.ss.1129(a)(2))................................. 8
7. Plan Proposed In Good Faith (11 U.S.C.
ss. 1129(a)(3)).......................................... 9
8. Payments For Services Or Costs And Expenses
(11 U.S.C. ss. 1129(a)(4))............................... 9
9. Directors, Officers, And Insiders (11 U.S.C.
ss. 1129(a)(5))........................................... 10
10. No Rate Changes (11 U.S.C. ss. 1129(a)(6)).................. 10
11. Best Interests Of Creditors Test (11 U.S.C.
ss. 1129(a)(7))........................................... 10
12. Acceptance By Certain Classes (11 U.S.C. ss.
1129(a)(8))............................................... 11
13. Treatment Of Administrative And Priority
Claims (11 U.S.C. ss. 1129(a)(9))......................... 11
14. Acceptance By Impaired Classes (11 U.S.C.
ss. 1129(a)(10)).......................................... 11
15. Feasibility (11 U.S.C. ss. 1129(a)(11))..................... 12
16. Payment Of Fees (11 U.S.C. ss. 1129(a)(12))................. 12
17. Continuation Of Retiree Benefits (11 U.S.C.
ss. 1129(a)(13)).......................................... 12
18. Fair And Equitable; No Unfair Discrimination
(11 U.S.C. ss. 1129(b))................................... 12
19. Principal Purpose Of Plan (11 U.S.C. ss.
1129(d)).................................................. 13
20. Settlement With The PBGC.................................... 13
21. Mutual Releases Between UM&M and Uzi Ruskin................. 13
22. Objections.................................................. 14
23. Technical Amendments........................................ 14
24. Amendment Of Article XIV.I.................................. 14
25. Exemption From Securities Laws (11 U.S.C.
ss. 1145(a)).............................................. 15
26. Good Faith Solicitation; Good Faith Sale Of
Securities (11 U.S.C. ss. 1125(e))........................ 16
27. Transfers Of Property....................................... 17
28. No Liquidation.............................................. 17
29. Conditions To Confirmation.................................. 17
30. Jurisdiction................................................ 18
31. Satisfaction Of Confirmation Requirements................... 18
DECREES................................................................ 18
32. Confirmation................................................ 18
33. Objections.................................................. 18
34. Provisions Of Plan And Order Nonseverable
And Mutually Dependent.................................... 19
35. Executory Contracts And Unexpired Leases.................... 19
36. Release of Preference Actions............................... 20
37. Binding Effect; Discharge................................... 20
38. Injunctions; Stays.......................................... 21
39. Continuation of Automatic Stay.............................. 22
40. Exculpation and Limitation of Liability..................... 22
41. Settlement With The PBGC.................................... 23
42. General Authorizations...................................... 23
43. Authorizations Under Delaware Law........................... 24
44. Cancellation Of Existing Securities......................... 25
45. Exemption From Securities Laws.............................. 26
46. Exemption From Certain Taxes................................ 26
47. Plan Classification Controlling............................. 27
48. Administrative Claims Bar Date.............................. 28
49. Rejection Damages Bar Date.................................. 28
50. Failure To Consummate Plan.................................. 28
51. Retention Of Jurisdiction................................... 29
52. Notice Of Entry Of Confirmation Order....................... 30
53. Sufficiency of Notice of Confirmation....................... 31
RECITALS
WHEREAS, United Merchants and Manufacturers, Inc.,
debtor-in-possession ("UM&M"), filed its Amended And Restated
Reorganization Plan Of United Merchants And Manufacturers, Inc., dated
February 25, 1997 (as modified herein, the "Plan"),(1) the Amended Disclosure
Statement With Respect To Amended And Restated Reorganization Plan Of
United Merchants And Manufacturers, Inc., dated February 25, 1997 (the
"UM&M Disclosure Statement"), and the Short Form Disclosure Statement And
Summary Of Plan Distributions For Dissemination To Creditors And Equity
Holders That Receive No Distribution Under Amended and Restated
Reorganization Plan Of United Merchants And Manufacturers, Inc., dated
February 25, 1997 (the "Short Form Disclosure Statement" and, together with
the UM&M Disclosure Statement, the "Disclosure Statements"); and
- -------------
1 Unless otherwise defined, capitalized terms used herein shall have
the meanings ascribed to them in the Plan. Any term used in the Plan
or herein that is not defined in the Plan or herein, but that is used
in the United States Bankruptcy Code, 11 U.S.C. ss.ss. 101-1330, as
amended (the "Bankruptcy Code") or the Federal Rules of Bankruptcy
Procedure (the "Bankruptcy Rules"), shall have the meaning assigned
to that term in the Bankruptcy Code or the Bankruptcy Rules. If there
is any direct conflict between the Plan and the Confirmation Order,
the terms of the Confirmation Order shall control.
WHEREAS, on February 25, 1997, the court entered an order (the
"Solicitation Procedures Order") that, among other things, (i) approved the
Disclosure Statements under section 1125 of the Bankruptcy Code and Fed. R.
Bankr. P. 3017, (ii) fixed April 9, 1997 for the hearing on confirmation of
the Plan (the "Confirmation Hearing"), (iii) approved the form and method
of notice of the Confirmation Hearing (the "Confirmation Hearing Notice"),
and (iv) established certain procedures for soliciting and tabulating votes
with respect to the Plan; and
WHEREAS, as applicable, the Confirmation Hearing Notice, the
Disclosure Statement(s), the Plan, and, as to Class 1 and Class 2 Claims, a
ballot and return envelope (such ballot and envelope being referred to as a
"Ballot"), were transmitted in accordance with Fed. R. Bankr. P. 3017(d)
and the Solicitation Procedures Order, as set forth in (i) the affidavit of
Diane Sayek of Registrar and Transfer Company, sworn to April 3, 1997, (ii)
the affidavit of Edward D. Taffet, legal consultant for UM&M, sworn to
April 4, 1997, and (iii) the affidavit of Lawrence V. Gelber, sworn to
April 4, 1997; and
WHEREAS, UM&M filed the certification of Arlene Moller, Principal
Clerk of the Publisher of The New York Times, dated March 17, 1997,
demonstrating that the Confirmation Hearing Notice was published in
accordance with the Solicitation Procedures Order; and
WHEREAS, UM&M filed the affidavit of Scott B. Davis, sworn to
April 7, 1997, attesting to and certifying the method and results of the
ballot tabulation for the Classes of Claims (Classes 1 and 2) voting to
accept or reject the Plan (the "Voting Report"); and
WHEREAS, 6 objections or purported objections to confirmation of
the Plan were timely filed and served and 2 objections or purported
objections were filed and served after the deadline for objections; and
WHEREAS, on April 7, 1997, UM&M filed (i) a memorandum of law in
support of confirmation of the Plan and in response to objections to
confirmation of the Plan (the "Confirmation Memorandum") and (ii) a
response to the renewed motion of Franklin Feldman for the appointment of a
Chapter 11 trustee and a memorandum of law in support thereof; and
WHEREAS, the Confirmation Hearing was held on April 9, 1997;
NOW, THEREFORE, based upon the court's review of the affidavits
and Voting Report previously filed with the court; and upon the
Confirmation Memorandum; and upon all of the evidence proffered or adduced
at, memoranda and objections filed in connection with, and arguments of
counsel made at, the Confirmation Hearing; and after due deliberation
thereon; and upon the entire record of this Chapter 11 case (the "Chapter
11 Case");
FINDINGS OF FACT AND CONCLUSIONS OF LAW
IT IS HEREBY FOUND AND DETERMINED THAT(2)
1. Core Proceeding And Exclusive Jurisdiction (28 U.S.C. ss.ss.
157(b)(2) and 1334(a)). Confirmation of the Plan is a core proceeding under
28 U.S.C. ss. 157(b)(2). This court has exclusive jurisdiction to determine
whether the Plan complies with applicable provisions of the Bankruptcy Code
and should be confirmed.
- --------------
2 When appropriate, findings of fact shall be construed as conclusions
of law and conclusions of law shall be construed as findings of fact.
See Fed. R. Bankr. P. 7052.
2. Judicial Notice. This court takes judicial notice of the
docket of this case maintained by the Clerk of the Bankruptcy Court and/or
its duly-appointed agent, including, without limitation, all pleadings and
other documents filed, all orders entered, and all evidence and argument
made, proffered or adduced at, the hearing(s) on (a) UM&M's request for
authorization to use cash collateral, held on February 27 and March 5, 7,
8, 15, 26, and 29, 1996, (b) the motion of Franklin Feldman, dated April 2,
1996, for the appointment of a Chapter 11 trustee, held on May 17, 1996,
and (c) approval of the Disclosure Statements, held on February 25, 1997.
3. Burden of Proof. UM&M, as proponent of the Plan, has the
burden of proving the elements of sections 1129(a) and (b) by a
preponderance of the evidence.
4. Transmittal And Mailing Of Materials; Notice. The Disclosure
Statements, Plan, Ballots, and Confirmation Hearing Notice were transmitted
and served in compliance with the Solicitation Procedures Order and the
Federal Rules of Bankruptcy Procedure, and such transmittal and service
were adequate and sufficient. Adequate and sufficient notice of the
Confirmation Hearing and the other matters described in the Solicitation
Procedures Orders was given in compliance with the Federal Rules of
Bankruptcy Procedure and the Solicitation Procedures Order, and no other or
further notice is or shall be required.
5. Plan Compliance With Bankruptcy Code (11 U.S.C. ss.
1129(a)(1)). The Plan complies with the applicable provisions of the
Bankruptcy Code, thereby satisfying section 1129(a)(1) of the Bankruptcy
Code.
(a) Proper Classification (11 U.S.C. ss.ss. 1122, 1123(a)(1)).
In addition to Administrative Claims and Priority Tax Claims, which need
not be designated, the Plan designates eight (8) Classes of Claims and/or
interests. The Claims and/or interests placed in each Class are
substantially similar to other Claims or interests, as the case may be, in
each such Class. Valid business, factual and legal reasons exist for
separately classifying the various Classes of Claims and interests created
under the Plan, and such Classes do not unfairly discriminate between
holders of Claims or interests. Thus, the Plan satisfies sections 1122 and
1123(a)(1) of the Bankruptcy Code.
(b) Specify Unimpaired Classes (11 U.S.C. ss. 1123(a)(2)). The
Plan specifies that no Classes of Claims or interests are unimpaired under
the Plan, thereby satisfying section 1123(a)(2) of the Bankruptcy Code.
(c) Specify Treatment of Impaired Classes (11 U.S.C. ss.
1123(a)(3)). Articles III.B and III.C of the Plan designate Classes 1,
2.01, 2.02, 2.03, 3, 4, 5, and 6 as impaired and specify the treatment of
Claims and interests in those Classes, thereby satisfying section
1123(a)(3) of the Bankruptcy Code.
(d) No Discrimination (11 U.S.C. ss. 1123(a)(4)). The Plan
provides for the same treatment for each Claim or Interest in each
respective Class unless the holder of a particular Claim or interest has
agreed to a less favorable treatment of such Claim or interest, thereby
satisfying section 1123(a)(4) of the Bankruptcy Code.
(e) Implementation Of The Plan (11 U.S.C. ss. 1123(a)(5)). The
Plan provides adequate and proper means for implementation of the Plan,
thereby satisfying section 1123(a)(5) of the Bankruptcy Code. Among other
things:
i) The Plan provides for post-consummation financing of
Reorganized UM&M through use of (a) the proceeds of the exercise of
New Warrants, and (b) cash generated from (1) the post-consummation
operations of UM&M's wholly-owned subsidiary Reunited Reinsurance,
Ltd., and (2) the business of its approximately 80% owned operating
subsidiary, Reunited Holdings, Inc. UM&M has determined that,
together, the aforementioned sources of financing will provided
Reorganized UM&M with liquidity sufficient to meet its working
capital needs.
ii) The Plan provides for the rejection of all unexpired
leases and executory contracts not previously assumed or rejected,
thus relieving Reorganized UM&M of unnecessary and burdensome
obligations.
iii) The Plan provides for the cancellation of the Old
Subordinated Debentures, Old Preferred Stock and Old Common Stock;
the discharge of substantial pre-petition indebtedness in exchange
for various types of securities and instruments described in Article
IV of the Plan; the continued corporate existence of Reorganized
UM&M; the revesting of property of the estate in Reorganized UM&M as
described in Article IV.D of the Plan; the creation of a Distribution
Reserve to resolve claims and make distributions, as described in
Article X.C of the Plan; and the settlement of certain disputes and
claims between UM&M and the Pension Benefit Guaranty Corporation
("PBGC"), as described in Article XIII of the Plan.
(f) Nonvoting Equity Securities (11 U.S.C. ss. 1123(a)(6)).
Pursuant to Article IV.B of the Plan, Reorganized UM&M's Restated
Certificate of Incorporation, annexed to the Plan as Exhibit A, prohibits
the issuance of nonvoting equity securities, thereby satisfying section
1123(a)(6) of the Bankruptcy Code. The holders of shares of New Common
Stock, after the Consummation Date, will vote as a single class on the
basis of one vote per share of New Common Stock.
(g) Selection Of Officers And Directors (11 U.S.C. ss.
1123(a)(7)). The Plan and UM&M's Restated Certificate of Incorporation
contain only provisions that are consistent with the interests of creditors
and equity security holders and with public policy, with respect to the
manner of selection of officers and directors of Reorganized UM&M, thereby
satisfying section 1123(a)(7) of the Bankruptcy Code. Specifically, Article
IV.C of the Plan provides that the directors and officers of UM&M before
Consummation will serve as the initial officers of Reorganized UM&M after
Consummation. Not later than 60 days after the Consummation Date, or as
soon thereafter as practicable, Reorganized UM&M will conduct a
shareholder's meeting, at which time the term of the current board of
directors will expire and the shareholders will elect a new board of
directors for Reorganized UM&M.
(h) Additional Plan Provisions (11 U.S.C. ss. 1123(b)). The
Plan's provisions are appropriate and not inconsistent with the applicable
provisions of the Bankruptcy Code.
6. UM&M's Compliance With The Bankruptcy Code (11 U.S.C. ss.
1129(a)(2)). UM&M has complied with the applicable provisions of the
Bankruptcy Code, thereby satisfying section 1129(a)(2) of the Bankruptcy
Code. Specifically:
(a) UM&M, a Delaware corporation, is a proper debtor under
section 109 of the Bankruptcy Code and a proper proponent of the Plan
pursuant to section 1121(a) of the Bankruptcy Code.
(b) On February 22, 1996, UM&M commenced this Chapter 11 Case
by filing a petition pursuant to section 301 of the Bankruptcy Code. The
court has jurisdiction over this Chapter 11 Case pursuant to 28 U.S.C.
ss.ss. 157 and 1334 and the "Standing Order of Referral of Cases to
Bankruptcy Judges," dated July 10, 1984 of District Judge Robert T. Ward.
Venue is proper in this district pursuant to 28 U.S.C. ss.ss. 1408 and
1409.
(c) UM&M has complied with applicable provisions of the
Bankruptcy Code, except as otherwise provided or permitted by orders of
this court.
(d) UM&M has complied with the applicable provisions of the
Bankruptcy Code, the Bankruptcy Rules, and the Solicitation Procedures
Order in transmitting the Plan, the UM&M Disclosure Statement, the Short
Form Disclosure Statement, the Ballots and related documents and notices
and in soliciting and tabulating votes on the Plan.
7. Plan Proposed In Good Faith (11 U.S.C. ss. 1129(a)(3)). UM&M
has proposed the Plan in good faith and not (a) by any means forbidden by
law or (b) in violation of any fiduciary duty owed to creditors or equity
security holders, thereby satisfying section 1129(a)(3) of the Bankruptcy
Code. In determining that the Plan has been proposed in good faith, the
court has examined the totality of the circumstances surrounding the
formulation of the Plan. The Chapter 11 Case was filed and the Plan was
proposed with the legitimate and honest purpose of reorganizing the
business and financial affairs of UM&M, modifying its financially
burdensome pre-petition capital structure, reducing its debt and other
obligations, and dealing with its pre-petition debt defaults. Moreover, the
extensive arm's-length negotiations among UM&M, its major creditor
constituencies, and the creditors' committee with respect to the terms of
the Plan provide independent evidence of the good faith of UM&M in
proposing the Plan.
8. Payments For Services Or Costs And Expenses (11 U.S.C. ss.
1129(a)(4)). Any payment made or to be made by UM&M, or by a person issuing
securities or acquiring property under the Plan, for services or for costs
and expenses in or in connection with the Chapter 11 Case, or in connection
with the Plan and incident to the Chapter 11 Case, has been approved by, or
is subject to the approval of, the court as reasonable, thereby satisfying
section 1129(a)(4) of the Bankruptcy Code.
9. Directors, Officers, And Insiders (11 U.S.C. ss. 1129(a)(5)).
UM&M has complied with section 1129(a)(5) of the Bankruptcy Code.
Specifically, UM&M properly and adequately disclosed the procedure for
determining the individuals that will serve, after Consummation of the
Plan, as directors or officers of Reorganized UM&M and the identities of
any insiders who will be employed or retained by Reorganized UM&M and the
nature of such person's compensation, to the extent known.
10. No Rate Changes (11 U.S.C. ss. 1129(a)(6)). No governmental
regulatory commission has jurisdiction over the rates charged by UM&M.
Thus, section 1129(a)(6) of the Bankruptcy Code is not applicable in this
Chapter 11 Case.
11. Best Interests Of Creditors Test (11 U.S.C. ss. 1129(a)(7)).
The Plan satisfies section 1129(a)(7) of the Bankruptcy Code. The
liquidation analysis annexed to the Disclosure Statement and other evidence
proffered or adduced at the Confirmation Hearing (a) are persuasive and
credible, (b) have not been controverted by other evidence, and (c)
establish that each holder of a Claim or Interest in an impaired Class
either (i) has accepted the Plan or (ii) will receive or retain under the
Plan, on account of such Claim or interest, property of a value, as of the
effective date of the Plan, that is not less that the amount that it would
receive if UM&M were liquidated under Chapter 7 of the Bankruptcy Code on
such date.
12. Acceptance By Certain Classes (11 U.S.C. ss. 1129(a)(8)).
Classes 1 and 2.02 have voted to accept the Plan in accordance with
sections 1126(c) and (d) of the Bankruptcy Code. The sole member of Class
2.01 did not cast a timely ballot; thus Class 2.01 is deemed to have
rejected the Plan. Classes 3, 4, 5, and 6 are not entitled to receive or
retain any property under the Plan and, therefore, are deemed to have
rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.
Although section 1129(a)(8) of the Bankruptcy Code has not been satisfied
with respect to Classes 2.01, 3, 4, 5, and 6, the Plan is confirmable
because the Plan satisfies section 1129(b) of the Bankruptcy Code with
respect to those Classes.
13. Treatment Of Administrative And Priority Claims (11 U.S.C.
ss. 1129(a)(9)). The treatment of Administrative Claims and Other Priority
Claims under Articles III.A.1 and III.B.1 of the Plan satisfies the
requirements of section 1129(a)(9)(A) and (B) of the Bankruptcy Code, and
the treatment of Priority Tax Claims under Article III.A.2 of the Plan
satisfies the requirements of section 1129(a)(9)(C) of the Bankruptcy Code.
14. Acceptance By Impaired Classes (11 U.S.C. ss. 1129(a)(10)).
At least one Class of Claims (e.g., Class 2.02) that is impaired under the
Plan has accepted the Plan, determined without including any acceptance of
the Plan by any insider of UM&M holding a Claim in such Class, thereby
satisfying section 1129(a)(10) of the Bankruptcy Code.
15. Feasibility (11 U.S.C. ss. 1129(a)(11)). Based upon the
evidence proffered or adduced at or prior to the Confirmation Hearing,
reasonable prospects exist that Reorganized UM&M will have adequate capital
to meet its ongoing obligations and operate its business and be able to
perform its obligations under the Plan. Thus, the Plan is feasible and
confirmation of the Plan is not likely to be followed by the liquidation,
or the need for further financial reorganization, of UM&M or any successor
to UM&M, thereby satisfying section 1129(a)(11) of the Bankruptcy Code.
16. Payment Of Fees (11 U.S.C. ss. 1129(a)(12)). All fees payable
under 28 U.S.C. ss. 1930 have been paid or will be paid on the Consummation
Date pursuant to Article III.A.1 of the Plan, thereby satisfying section
1129(a)(12) of the Bankruptcy Code.
17. Continuation Of Retiree Benefits (11 U.S.C. ss. 1129(a)(13)).
UM&M is not obligated to provide any "retiree benefits" as defined in
section 1114(a) of the Bankruptcy Code. Thus, section 1129(a)(13) of the
Bankruptcy Code is inapplicable.
18. Fair And Equitable; No Unfair Discrimination (11 U.S.C. ss.
1129(b)). Class 2.01 is an impaired class of secured claims that is deemed
to have rejected the Plan. Classes 3, 4, 5, and 6 (the "Rejecting Classes")
are impaired Classes of unsecured Claims and interests that are deemed to
have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.
These are the only Classes that have not accepted the Plan. Pursuant to
section 1129(b) of the Bankruptcy Code, the court finds that the Plan does
not discriminate unfairly, and is fair and equitable with respect to Class
2.01 and each of the Rejecting Classes. As to Class 2.01, the court finds
that the provisions of section 1129(b)(2)(A)(i) have been met. As to each
of the Rejecting Classes, the court finds that (a) no holder of a Claim or
interest (i) junior to any Rejecting Class will receive or retain any
property under the Plan or (ii) senior to any Rejecting Class will receive
or retain more than 100% of the allowed amount of its allowed Claim or
interest, and (b) the shares of stock in each such Class have no value.
Thus, the Plan satisfies section 1129(b) of the Bankruptcy Code with
respect to each of the Rejecting Classes and the Plan may be confirmed
notwithstanding UM&M's failure to satisfy section 1129(a)(8) of the
Bankruptcy Code.
19. Principal Purpose Of Plan (11 U.S.C. ss. 1129(d)). The
principal purpose of the Plan is not the avoidance of taxes or the
avoidance of the application of Section 5 of the Securities Act of 1933
(15 U.S.C. ss. 77e), and no governmental unit has requested that the court
not confirm the Plan.
20. Settlement With The PBGC. The settlement in the Plan of
certain claims and disputes between UM&M and the PBGC is fair and
reasonable and in the best interests of UM&M, its Estate, and its
creditors, considering the potential costs of litigation and the
uncertainty of the outcome of such disputes.
21. Mutual Releases Between UM&M and Uzi Ruskin. The releases in
the Plan of (a) certain claims against UM&M by Uzi Ruskin, and (b) claims,
if any, that UM&M might assert against Uzi Ruskin, in connection with
UM&M's rejection under the Plan of Uzi Ruskin's employment agreement is
fair and reasonable and in the best interests of UM&M, its Estate, and its
creditors, considering the potential costs to the Estate were such claims
to be litigated and/or allowed.
22. Objections. Each of the objections to Confirmation of the
Plan which has not been withdrawn, waived or settled, and all reservations
of rights included therein, are overruled. To the extent that pleadings or
letters filed by individuals or entities constitute objections to
Confirmation of the Plan and have not been withdrawn, waived or settled,
they are hereby overruled.
23. Technical Amendments. The modifications of the Plan announced
at the Confirmation Hearing and described in paragraph 24 below constitute
technical changes and do not materially adversely affect any creditor,
interest holder, or other party in interest. As such, under Fed. R. Bankr.
P. 3019, these modifications do not require additional disclosure under
section 1125 of the Bankruptcy Code or resolicitation of acceptances or
rejections of the Plan under section 1126 of the Bankruptcy Code, nor do
they require that holders of Claims or interests be afforded an opportunity
to change previously cast acceptances or rejections of the Plan.
24. Amendment Of Article XIV.I. The text of Article XIV.I of the
Plan is hereby amended by deleting it in its entirety and replacing it with
the following text:
The exceptions to discharge specified in 11 U.S.C. ss. 523
shall not limit or abridge in any way UM&M's entitlement to a
discharge of the pre-petition Claims of federal, state, and local
taxing authorities. To the extent that any Claim asserted by a taxing
authority seeks recovery of interest, a penalty, or a fine against
UM&M, that portion of such claim, if Allowed, which represents such
interest, penalty or fine shall be disallowed; provided, however,
that the provisions of this second sentence of Article XIV.I shall
not apply to any Claim asserted against UM&M by the United States
Department of Treasury - Internal Revenue Service.
25. Exemption From Securities Laws (11 U.S.C. ss. 1145(a)). To
the extent, if any, that they constitute "securities," the issuance and
distribution of the (i) New Senior Note, (ii) New Subordinated Debentures,
(iii) New Common Stock, and (vii) New Warrants (collectively, the "Plan
Consideration") have been duly authorized, and when issued as provided in
the Plan, will be validly issued, fully paid and nonassessable. The offer
and sale of the foregoing is in exchange for Claims or interests, or
principally in exchange for Claims or interests and partly for cash or
property, within the meaning of section 1145(a)(1) of the Bankruptcy Code.
In addition, under Section 1145 of the Bankruptcy Code, to the extent, if
any, that any items of Plan Consideration constitute "securities," (I) the
offering of such items is exempt and the issuance and distribution of such
items will be exempt from Section 5 of the Securities Act of 1933 and any
state or local law requiring registration prior to the offering, issuance,
distribution or sale of securities, and (II) all of the above-described
items will be freely tradable by the recipients thereof, subject to (A) the
provisions of section 1145(b)(1) of the Bankruptcy Code relating to the
definition of an underwriter in Section 2(11) of the Securities Act of
1933, as amended, and compliance with any rules and regulations of the
Securities and Exchange Commission, if any, applicable at the time of any
future transfer of such securities or instruments, and (B) in the case of
New Common Stock and New Warrants, the restrictions on the transferability
of such instruments. Neither UM&M nor any of its agents or affiliates is an
underwriter under section 2(11) of the Securities Act or under section
1145(b)(1) of the Bankruptcy Code with respect to the offer, sale, issuance
or distribution of any securities to be distributed under the Plan.
26. Good Faith Solicitation; Good Faith Sale Of Securities (11
U.S.C. ss. 1125(e)). To the extent that UM&M, the Committee, and their
agents, accountants, business consultants, representatives, attorneys, and
advisors (collectively, "Agents"), or any of them, have solicited votes on
the Plan, such solicitation was in good faith and in compliance with the
applicable provisions of the Bankruptcy Code, and they are entitled to the
protections afforded by section 1125(e) of the Bankruptcy Code and the
provisions set forth in Article XIV.D of the Plan, as such provisions are
modified by paragraph 40 below. In addition, to the extent that UM&M, the
Committee, and their Agents, or any of them, participated in the offer,
sale, issuance, and purchase of the New Senior Note, the New Subordinated
Debentures, the New Common Stock, and the New Warrants, they did so in good
faith and in compliance with the applicable provisions of the Bankruptcy
Code and are entitled to the protections afforded by section 1125(e) of the
Bankruptcy Code and the exculpation provisions set forth in Article XIV.D
of the Plan, as such provisions are modified by paragraph 40 below.
27. Transfers Of Property. The transfers of property by UM&M (a)
to Reorganized UM&M (i) are or shall be legal, valid, and effective
transfers of property, (ii) vest or shall vest Reorganized UM&M with good
title to such property free and clear of all liens, charges, Claims,
encumbrances, or interests, except as expressly provided in the Plan or
Confirmation Order, (iii) do not and shall not constitute avoidable
transfers under the Bankruptcy Code or under applicable bankruptcy or
nonbankruptcy law, and (iv) do not and shall not subject Reorganized UM&M
to any liability by reason of such transfer under the Bankruptcy Code or
under applicable nonbankruptcy law, including, without limitation, any laws
affecting successor or transferee liability, and (b) to holders of Claims
under the Plan are for good consideration and value and are in the ordinary
course of UM&M's business.
28. No Liquidation. Because (a) the Plan does not provide for the
liquidation of all or substantially all of the property of UM&M's Estate
and (b) Reorganized UM&M will engage in business following consummation of
the Plan, section 1141(d)(3) of the Bankruptcy Code is inapplicable.
29. Conditions To Confirmation. Each of the conditions to
confirmation set forth in Article IX.A of the Plan has been satisfied, or
may be satisfied or waived on or before the Confirmation Date.
30. Jurisdiction. The court may properly retain jurisdiction over
the matters set forth in Article XII of the Plan, including any action or
process commenced after the Confirmation Date that arose from an act,
omission, occurrence or transaction that UM&M allegedly performed on or
before the Confirmation Date.
31. Satisfaction Of Confirmation Requirements. The Plan satisfies
the requirements for confirmation set forth in section 1129 of the
Bankruptcy Code.
DECREES
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT,
32. Confirmation. The Plan, a copy of which is annexed hereto as
Exhibit A, as amended or otherwise modified herein or on the record of the
Confirmation Hearing, is hereby confirmed. All acceptances and rejections
previously cast for or against the Plan are hereby deemed to constitute
acceptances or rejections of the Plan as amended or otherwise modified by
this Confirmation Order or the record of the Confirmation Hearing, and all
parties in interest are authorized and empowered, or enjoined, as the case
may be, to act in accordance with its terms. The terms of the Plan and the
exhibits thereto are incorporated by reference into and are an integral
part of this Confirmation Order.
33. Objections. All objections to confirmation of the Plan that
have not been withdrawn, waived, or settled, and all reservations of rights
included therein, are overruled on the merits. To the extent that pleadings
or letters filed by individuals or entities constitute objections to
Confirmation of the Plan and have not been withdrawn, waived or settled,
they are hereby overruled.
34. Provisions Of Plan And Order Nonseverable And Mutually
Dependent. The provisions of the Plan and this Confirmation Order,
including the findings of fact and conclusions of law set forth herein,
are nonseverable and mutually dependent.
35. Executory Contracts And Unexpired Leases. All executory
contracts or unexpired leases assumed by UM&M during the Chapter 11 Case
shall be assigned and transferred to, and remain in full force and effect
for the benefit of, Reorganized UM&M, notwithstanding any provision in such
executory contract or unexpired lease (including those described in
sections 365(b)(2) and (f) of the Bankruptcy Code) which prohibits such
assignment or transfer or that enables or requires termination of such
executory contract or unexpired lease. All other executory contracts and
unexpired leases of UM&M shall be deemed automatically rejected on the
Confirmation Date. As described in Article VIII.A of the Plan, in
conjunction with UM&M's rejection of the Ruskin Agreement, UM&M and Mr.
Ruskin shall enter into a general mutual release, in the form of the
release annexed to the Plan as Exhibit H, of all claims, if any, that
either party might possess against the other. The (i) rejection of all
executory contracts and unexpired leases, and (ii) proposed general mutual
release are hereby approved pursuant to sections 105(a) and 365(a) of the
Bankruptcy Code.
36. Release of Preference Actions. The release by UM&M of all
claims, rights of action, suits, and proceedings, whether known or unknown,
under section 547 of the Bankruptcy Code, as described in Article VI.A of
the Plan, is hereby approved.
37. Binding Effect; Discharge. Pursuant to section 1141 of the
Bankruptcy Code and subject to consummation of the Plan:
(a) Except as expressly provided in the Plan, on the
Consummation Date, the provisions of the Plan (including the exhibits to,
and all documents and agreements executed pursuant to, the Plan) and the
Confirmation Order shall be binding on (i) UM&M, (ii) all holders of Claims
against and interests in UM&M, whether or not impaired under the Plan and
whether or not, if impaired, such holders accepted the Plan, (iii) each
person or entity issuing securities or acquiring property under the Plan,
(iv) any other party in interest, (v) any person or other entity making an
appearance in this Chapter 11 Case, and (vi) each of the foregoing's
respective heirs, successors, assigns, trustees, executors, administrators,
affiliates, officers, directors, agents, representatives, attorneys,
beneficiaries, or guardians;
(b) Except as expressly provided in the Plan, UM&M is
discharged effective on the Confirmation Date from any "debt" (as that term
is defined in section 101(12) of the Bankruptcy Code), and UM&M's liability
in respect thereof is extinguished completely, whether reduced to judgment
or not, liquidated or unliquidated, contingent or noncontingent, asserted
or unasserted, fixed or unfixed, matured or unmatured, disputed or
undisputed, legal or equitable, or known or unknown, or that arose from any
agreement of UM&M that has either been assumed or rejected in the Chapter
11 Case or pursuant to the Plan, or obligation of UM&M incurred before
Confirmation, or from any conduct of UM&M prior to Confirmation, or that
otherwise arose before Confirmation, including, without limitation, all
interest, if any, on any such debts, whether such interest accrued before
or after the Petition Date.
(c) Except as expressly provided in the Plan, all property of
the Estate shall vest in Reorganized UM&M on the Consummation Date, and
such property shall be free and clear of all Claims and interests of
creditors and equity security holders.
38. Injunctions; Stays. Except as otherwise provided in the Plan,
effective on the Confirmation Date, pursuant to section 524(a) of the
Bankruptcy Code:
(a) the commencement or continuation of any action or the
employment of process with respect to any Claim or debt discharged
hereunder, or any act to collect, recover, or offset any Claim or debt
discharged hereunder as a personal liability of UM&M or Reorganized UM&M,
or from properties of UM&M or Reorganized UM&M is forever enjoined; and
(b) any judgment at any time obtained is null and void to the
extent that such judgment is a determination of personal liability of UM&M
with respect to any Claim or debt discharged under the Plan or hereunder.
39. Continuation of Automatic Stay. Except as other wise provided
herein, all stays or injunctions provided for in the Chapter 11 Case under
sections 105 or 362 of the Bankruptcy Code or otherwise, and extant on the
Confirmation Date, shall remain in full force and effect until the
Consummation Date.
40. Exculpation and Limitation of Liability. The provisions of
Article XIV.D of the Plan are hereby approved; provided, however, that
nothing in the Plan or this Confirmation Order shall effect a release in
favor of any person or entity described in Article XIV.D with respect to
(a) any act or omission occurring or arising prior to February 22, 1996, or
(b) any debt owed to (i) the United States Government for any liability
arising under the Internal Revenue Code, any environmental laws or any
criminal laws of the United States, (ii) a state or local governmental
agency or authority, or (iii) any person or entity that did not receive
actual or constructive notice of the Plan and the Confirmation Hearing;
provided, further, that nothing in the Plan or this Confirmation Order
shall enjoin or restrain the United States Government from any act to
enforce the Internal Revenue Code, any environmental laws or any criminal
laws of the United States; provided, further, however, that nothing
contained in this paragraph shall in any way affect or limit (x) the
discharge granted to UM&M under Chapter 11 of the Bankruptcy Code or (y)
the mutual releases to be exchanged by UM&M and Uzi Ruskin pursuant to
Article VIII.A of the Plan.
41. Settlement With The PBGC. The Plan constitutes a settlement
between UM&M and the PBGC. In approving the PBGC Agreement and the
settlement contemplated thereby as fair and reasonable, the court has taken
note of and considered the evidence presented concerning the disputed PBGC
Claims. The court has found that the settlement embodied in the Plan will
save UM&M and its creditors the cost and expense of litigating over the
PBGC Claims, the outcome of which is not guaranteed and the litigation of
which is likely to expend significant resources and require substantial
time to adjudicate. The court has also found that the settlement has
facilitated the creation and implementation of the Plan and benefits the
creditors of UM&M's Estate.
42. General Authorizations. Pursuant to section 1142(b) of the
Bankruptcy Code, UM&M and all other necessary parties, are authorized and
empowered to execute and deliver any instrument, security, agreement or
document, and perform any act, that is necessary, desirable, or required to
comply with the terms and conditions of the Plan and consummation of the
Plan, and are authorized and empowered, without limitation, to:
(a) Issue, execute, deliver, file and record any documents,
court papers or pleadings, and to take any and all actions that are
necessary or desirable to implement, effect or consummate the transactions
contemplated by the Plan whether or not specifically referred to in the
Plan or related documents and without further application to or order of
this court, including but not limited to, execution and delivery of the
following documents:
i) New Senior Note;
ii) New Subordinated Debentures Indenture;
iii) New Warrant Agreement;
provided, however, that UM&M may make such additional ministerial changes
thereto as UM&M deems necessary, without notice and a hearing under section
1127(b) of the Bankruptcy Code or disclosure or resolicitation under section
1127(c) of the Bankruptcy Code, as long as such changes do not adversely
affect the rights of any party in interest;
(b) issue or cause the issuance of the securities and other
instruments contemplated by the Plan, including the New Senior Note, New
Subordinated Debentures, New Common Stock, and New Warrants; and
(c) file with the Delaware Secretary of State the Restated
Certificate of Incorporation of United Merchants and Manufacturers, Inc.,
substantially in the form as Exhibit A to the Plan.
43. Authorizations Under Delaware Law. UM&M and each of its
officers is authorized, empowered, and directed pursuant to Section 303 of
the Delaware General Corporation Law ("Section 303") to take any and all
actions necessary or desirable to implement the transactions contemplated
by the Plan and this Confirmation Order, all without further corporate
action or action of the directors or stockholders of UM&M, including,
without limitation (a) to reconstitute the board of directors of UM&M and
of Reorganized UM&M as contemplated by Article IV.C of the Plan, and (b) to
amend the Certificate of Incorporation and By-laws of UM&M as contemplated
by Article IV.B of the Plan.
44. Cancellation Of Existing Securities. Effective as of the
Consummation Date, except as otherwise provided for in the Plan, (i) the
Existing Securities and any other note, bond, indenture, or other
instrument or document evidencing or creating any indebtedness or
obligation of UM&M, except (x) such notes or other instruments evidencing
indebtedness or obligations of UM&M that are Reinstated under the Plan and
(y) the notes or instruments listed on Exhibit G to the Plan, shall be
canceled; provided, however, that each indenture or other agreement that
governs the rights of the holder of a Claim and that is administered by an
indenture trustee, an agent, or a service shall continue in effect solely
for the purposes of (i) allowing such indenture trustee, agent, or service
to make the distributions to be made on account of such Claims under the
Plan as provided in Article III.B. of the Plan, and (ii) permitting such
indenture trustee, agent, or service to maintain any rights or liens it may
have for fees, costs and expenses under such indenture or other agreement;
provided, further, that the provisions of clause (ii) of this paragraph
shall not affect the discharge of UM&M's liabilities under the Bankruptcy
Code and this Confirmation Order or result in any expense or liability to
UM&M. Reorganized UM&M shall not have any obligations to any indenture
trustee, agent or service (or to any Disbursing Agent replacing such
indenture trustee, agent or service with respect to any note, bond,
instrument, indenture or other instrument or document being canceled
hereby) for any fees, costs or expenses, except as expressly provided in
Article IV.G of the Plan or as otherwise ordered by the Bankruptcy Court.
45. Exemption From Securities Laws. To the extent, if any, that
any items of Plan Consideration (as defined in paragraph 23 above)
constitute a "security," (a) section 5 of the Securities Act of 1933 (the
"Securities Act") and any state or local law requiring registration for the
offer or registration or licensing of an issuer of, underwriter of, or
broker or dealer in, a security do not apply to the offer, sale, issuance
or distribution of any item of Plan Consideration, and (b) each of the
above-described items of Plan Consideration will be freely tradable by the
recipients thereof, subject to (x) the provisions of section 1145(b)(1) of
the Bankruptcy Code relating to the definition of an "underwriter" in
section 2(11) of the Securities Act, as amended, and section 1145(b) of the
Bankruptcy Code, and (y) the restrictions on the transferability of such
items of Plan Consideration specifically set forth in the items of Plan
Consideration, the Plan, or the Restated Certificate of Incorporation of
United Merchants and Manufacturers, Inc.
46. Exemption From Certain Taxes. Pursuant to section 1146(c) of
the Bankruptcy Code:
(a) the issuance, transfer, or exchange of any security, or
the making, delivery, filing, or recording of any instrument of transfer
under the Plan, shall not be taxed under any law imposing a recording tax,
stamp tax, transfer tax, or similar tax;
(b) without limiting the generality of subparagraph (a)
above, the making, delivery, filing, or recording at any time of any deed,
bill of sale, mortgage, leasehold mortgage, deed of trust, leasehold deed
of trust, memorandum of lease, notice of lease, assignment, leasehold
assignment, security agreement, financing statement, or other instrument of
absolute or collateral transfer required by, or deemed necessary or
desirable by UM&M and any party to any instruments, documents, or other
agreements contemplated by or related to Consummation of the Plan, shall
not be so taxed; and
(c) notice of entry of this Confirmation Order in the form
approved by the court (i) shall have the effect of an order of the court,
(ii) shall constitute sufficient notice of the entry of this Confirmation
Order to all filing or recording officers, wherever located and by whomever
appointed, and (iii) shall be a recordable instrument notwithstanding any
contrary provision of nonbankruptcy law.
47. Plan Classification Controlling. The classification of Claims
and interests for purposes of payment of the distributions to be made under
the Plan is governed solely by the terms of the Plan. The classifications
set forth on the Ballots in connection with voting on the Plan (a) were set
forth thereon solely for purposes of voting on the acceptance or rejection
of the Plan and tabulation of such votes, (b) do not necessarily represent
and in no event shall be deemed to modify or otherwise affect the actual
classification of such Claims and interests under the terms of the Plan for
distribution purposes, and (c) may not be relied upon by any creditor or
equity security holder as actually representing the actual classification
of such Claims and interests under the terms of the Plan for distribution
purposes.
48. Administrative Claims Bar Date. Except as otherwise ordered
by the court, any final request for payment of an Administrative Claim
(other than Claims for Professional Fees and expenses of the members of the
Committee) must be filed no later than 30 days after the Confirmation Date;
provided, however, that each professional retained in the Chapter 11 Case
shall file its final application for payment of fees and expenses on or
before the forty-fifth (45th) day following the Confirmation Date.
49. Rejection Damages Bar Date. The holder of any Claim arising
from the rejection of an executory contract or unexpired lease under the
Plan must file a proof of claim with respect to such Claim within thirty
(30) days after service of the notice of this Confirmation Order, or be
forever barred from asserting or pursuing such Claim, and such Claim shall
not be enforceable against UM&M or its property.
50. Failure To Consummate Plan. In accordance with Article XIV.F
of the Plan, if the Consummation Date does not occur, then (a) the Plan,
(b) any settlement or compromise in connection with the Plan (including the
fixing or limiting to an amount certain any Claim or Class of Claims), (c)
assumption or rejection of executory contracts or unexpired leases pursuant
to the Plan, (d) any document or agreement executed pursuant to the Plan,
and (e) any actions authorized by this order or any order in aid of
consummation of the Plan shall be deemed null and void. In such event,
nothing contained in this Confirmation Order, any order in aid of
consummation of the Plan, or the Plan, and no acts taken in preparation for
consummation of the Plan, (x) shall be deemed to constitute a waiver or
release of any Claims or interests by or against UM&M or any other person
or entity, to prejudice in any manner the rights of UM&M or any person or
entity in any further proceedings involving UM&M, or to constitute an
admission of any sort by UM&M or any other person or entity as to any
issue, including, without limitation, issues relating to the ownership by
or the rights of UM&M in all or any part of the property owned, sold, held
by or in the possession of UM&M or (y) shall be construed as a finding of
fact or conclusion of law in respect thereof.
51. Retention Of Jurisdiction. This court shall retain
jurisdiction in accordance with the terms of Article XII of the Plan, the
other provisions of this Confirmation Order, and section 1142 of the
Bankruptcy Code, including any action or process commenced after the
Confirmation Date that arose from any alleged act, omission, occurrence or
transaction of UM&M on or before the Confirmation Date. Until this Chapter
11 Case is closed, any party in interest may commence a proceeding in this
court in respect of any matter as to which jurisdiction has been retained.
52. Notice Of Entry Of Confirmation Order. On or before the tenth
(10th) day following the Confirmation Date, pursuant to Fed. R. Bankr. P.
2002(f)(7), 2002(k), and 3020(c), UM&M shall (a) serve notice of entry of
this Confirmation Order in substantially the form of the notice annexed
hereto as Exhibit B, which form is hereby approved (the "Notice of
Confirmation"), by United States first class mail postage prepaid, by hand
or by overnight courier service to, without duplication, upon (i) the
United States Trustee, (ii) counsel for the Committee, (iii) the Securities
and Exchange Commission (Manhattan), (iv) the District Director of Internal
Revenue (Manhattan), (v) the United States Attorney for the Southern
District of New York, (vi) each department, agency or instrumentality of
the United States that asserts a non-tax claim against UM&M, (vii)
Secretary of the Treasury, (viii) entities that requested notice under Fed.
R. Bankr. P. 2002, and (ix) all creditors that have filed proofs of claim
in this case or are scheduled in UM&M's schedules of assets and
liabilities, dated April 29, 1996 (other than those scheduled at zero), and
(b) cause the Notice of Confirmation to be published in the national
edition of The New York Times; provided, however, that the Notice of
Confirmation need not be sent to holders of UM&M's equity securities; and
provided, further, that notice need not be given or served under the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure or this
Confirmation Order to any person or entity to whom UM&M mailed a notice of
the hearing on the Disclosure Statements or the various solicitation
packages, but received any of such notices returned marked "undeliverable
as addressed," "moved - left no forwarding address" or "forwarding order
expired," or similar reason, unless UM&M has been informed in writing by
such person or entity of that person's or entity's new address.
53. Sufficiency of Notice of Confirmation. The service and
publication of the Notice of Confirmation as set forth in paragraph 52 is
adequate notice to all creditors and equity security holders of UM&M, known
and unknown, and satisfies the requirements of Fed. R. Bankr. P. 2002 and
3020(c), and no other or further notice is or shall be necessary.
Dated: New York, New York
April 10, 1997
/s/ Arthur J. Gonzalez
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United States Bankruptcy Judge
