<PAGE>
FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
November 16, 1995
-----------------
Date of Report (Date of earliest event reported)
JAY JACOBS, INC.
----------------
(Exact name of registrant as specified in its charter)
Washington 0-15934 91-0698077
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(State or other (Commission File No.) (I.R.S.
jurisdiction of I.D. No.)
incorporation or
organization)
1530 Fifth Avenue
Seattle, Washington 98101
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(Address of principal executive offices) (Zip Code)
(206) 622-5400
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(Registrant's telephone number including area code)
(Not Applicable)
----------------
(Former name or former address, if changed since last report)
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Item 3. BANKRUPTCY OR RECEIVERSHIP
(a) Not applicable.
(b) ORDER CONFIRMING PLAN OF REORGANIZATION
(1)-(3)
On November 16, 1995, the United States District Court for the Western
District of Washington (Seattle) (the "Bankruptcy Court") entered an order (the
"Confirmation Order") confirming the Second Amended Chapter 11 Plan of
Reorganization (the "Plan") of Jay Jacobs, Inc. (the "Company"). The
Confirmation Order and the Plan are filed, respectively, as Exhibits 99.1 and 2
to this Form 8-K and are incorporated herein by reference. The effective date
under the Plan is November 28, 1995 (the "Effective Date"), which is the first
business day that is eleven (11) days after the Confirmation Order was entered
on the Court's docket, absent a stay of the Confirmation Order under Bankruptcy
Code Section 8005. The Confirmation Order became final and nonappealable on
November 28, 1995. The Confirmation Order provides that it would be vacated if
post-confirmation financing acceptable to the Company and the Unsecured
Creditors Committee were not approved by an order entered by the Bankruptcy
Court prior to the Effective Date. Such an order approving post-confirmation
financing with LaSalle National Bank was entered on November 20, 1995.
For a summary of the material features of the Plan, reference is made
to the information set forth under the caption "Summary Of The Plan" under
Section V in the Debtor's First Amended Disclosure Statement regarding its
Chapter 11 Plan of Reorganization dated October 16, 1995, filed as Exhibit 99.2
to this Form 8-K and incorporated herein by reference. The First Amended
Disclosure Statement describes the First Amended Plan. The only material
difference between the confirmed Second Amended Plan and the First Amended Plan
is that the confirmed Plan provides for thirteen quarterly payments to Priority
and Secured Tax Claimants, as defined in the Plan, rather than the four annual
payments proposed in the First Amended Plan.
(4)
As of the Effective Date, the Company had 6,007,283 shares of its
common stock, par value $.01 per share ("Shares"), issued and outstanding. No
Shares will be issued in respect of claims or interests filed and allowed under
the Plan. Holders of Allowed Unsecured Claims, as defined in the Plan, have the
right to elect by July 15, 1996, to receive 9.5% Per Annum Promissory Notes Due
January 2, 2001, in lieu of certain cash payments, as more fully described in
Article IV.B of the Plan, filed as
-2-
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Exhibit 2 to this Form 8-K and incorporated herein by reference, and the
Promissory Note attached as Exhibit A to the Plan.
(5)
For information as to the consolidated assets and liabilities of the
Company and its subsidiaries, reference is made to the consolidated balance
sheet contained in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended July 29, 1995, filed as Exhibit 13 to this Form 8-K and
incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
Exhibit No. Description
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2 Company's Second Amended Chapter 11 Plan of
Reorganization dated November 16, 1995
Exhibit A* Specimen 9.5% Per Annum Promissory Note
of the Company Due January 2, 2001
Exhibit B Leases To Be Assumed
Exhibit C** 1995 Stock Option Plan of the Company
13*** Form 10-Q of the Company for the quarterly period ended
July 29, 1995
99.1 Bankruptcy Court Order Confirming Company's Second
Amended Chapter 11 Plan of Reorganization
- --------------------
* Previously filed with the Securities and Exchange Commission
under File No. 0-15934 as Exhibit A to Exhibit 2 to the Company's
Form 8-K dated October 16, 1995.
** Previously filed with the Securities and Exchange Commission
under File No. 0-15934 as Exhibit D to Exhibit 2 to the
Company's Form 8-K dated October 16, 1995.
*** Previously filed with the Securities and Exchange Commission
under File No. 0-15934.
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99.2**** Company's First Amended Disclosure Statement Regarding
Its Chapter 11 Plan dated October 16, 1995
- --------------------
**** Previously filed with the Securities and Exchange Commission
under File No. 0-15934 as Exhibit 99.5 to the Company's Form 8-K
dated October 16, 1995.
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.
Dated this 30th day of November, 1995.
JAY JACOBS, INC.
By /s/ William L. Lawrence, Jr.
---------------------------
William L. Lawrence, Jr.
Senior Vice President and
Chief Financial Officer
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Mark Charles Paben THE HONORABLE THOMAS T. GLOVER
Lynne Brown Ellis
Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, WA 98101-2346
(206) 682-5151
UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
In Re: ) Chapter 11
) Case No. 94-03993
JAY JACOBS, INC., )
)
Debtor. )
)
- -----------------------------
DEBTOR'S SECOND AMENDED CHAPTER 11 PLAN OF REORGANIZATION
Jay Jacobs, Inc., the Debtor and Debtor-In-Possession, proposes the
following plan of reorganization pursuant to chapter 11 of the United States
Bankruptcy Code:
ARTICLE I. -- DISCLOSURE STATEMENT
The Debtor has filed a Disclosure Statement pursuant to 11 U.S.C. Section
1125 and Bankruptcy Rule 3016. The Disclosure Statement has been approved by
the Court before submission of this Plan to creditors. The Disclosure Statement
provides information to aid and assist the holders of claims in evaluating the
Plan. THE DISCLOSURE STATEMENT SHOULD BE READ IN EVALUATING THE IMPACT OF THE
PLAN UPON CLAIMS AND INTERESTS.
ARTICLE II. -- DEFINITION OF TERMS
The following terms, when used in this Plan, shall have the meaning
specified herein or, if not herein, the meaning set forth in the Bankruptcy
Code, unless the context requires otherwise:
[BOGLE & GATES LETTERHEAD]
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 1
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ADMINISTRATIVE EXPENSE CLAIM: An Allowed Claim entitled to priority under
Section 507(a)(1) of the Code, including (a) Claims incurred by the Debtor since
the Petition Date and allowed by the Court under Section 503(b) of the Code, (b)
professional fees and expenses approved by the Court pursuant to Section 331 of
the Code and Bankruptcy Rule 2016, and (c) fees and charges assessed against the
estate under 28 U.S.C. Section 1930 of the United States Code.
ALLOWED CLAIM: Any Claim (a) in the amount and the priority classification
set forth in the proof of such claim that has been timely filed with the Court
in this Case, or (b) in the absence of such proof, as set forth in the Debtor's
schedules of liabilities filed in this Case pursuant to Bankruptcy Rule 1007
unless: (i) such claim has been listed in the schedules as disputed, contingent,
or unliquidated, in which case such claim shall be allowed only in such amount
and such classification as is authorized by Final Order of the Bankruptcy Court;
(ii) an objection has been filed to such Claim within the deadline fixed by rule
or order of this Court, in which case such claim shall be allowed in such amount
and such classification as is authorized by Final Order of the Bankruptcy Court;
or (iii) such claim has been paid in full, withdrawn, or otherwise deemed
satisfied in full.
BANKRUPTCY CODE OR CODE: The Bankruptcy Code enacted November 6, 1978, as
set forth in title 11 of the United States Code, and as amended thereafter, but
not including the amendments that became effective on or after October 22, 1994.
BANKRUPTCY COURT OR COURT: The United States Bankruptcy Court for the
Western District of Washington, at Seattle, before which the Case is pending, or
if that Court ceases to exercise jurisdiction over the Bankruptcy Case, the
Court that does exercise jurisdiction.
BANKRUPTCY RULE(S): The Federal Rules of Bankruptcy Procedure.
BOARD OF DIRECTORS: The board of directors of Jay Jacobs, Inc., a
Washington corporation.
CASE: The chapter 11 case commenced by the Debtor on May 13, 1994, pending
in the United States Bankruptcy Court for the Western District of Washington,
designated as Case No. 94-03993.
CLAIM: A "claim" against the Debtor as defined in Section 101(5) in the
Code.
CLAIMANT: The holder of a Claim.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 2
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CLASS: A class of claims or interests as defined in Article III of this
Plan.
COMMITTEE: The Official Unsecured Creditors Committee appointed in the
Case. SEE Section III(C) of the Disclosure Statement.
COMMON STOCK: Common stock, par value $.01 per share, of Jay Jacobs, Inc.,
a Washington corporation.
COMPANY: Jay Jacobs, Inc., a Washington corporation.
CONFIRMATION ORDER: The order confirming the Plan pursuant to 11 U.S.C.
Section 1129 of the Bankruptcy Code.
DATE OF CONFIRMATION: The date on which the Court enters an order
confirming the Plan.
DEBTOR: Jay Jacobs, Inc., a Washington corporation.
DEBTOR-IN-POSSESSION: The Debtor, when exercising its rights, powers, and
duties under Section 1107(a) of the Bankruptcy Code in the Case.
DISBURSING AGENT: The disbursing agent as set forth in Article V(G)
herein.
DISCLOSURE STATEMENT: The Debtor's approved disclosure statement
referenced in Article I above.
DISPUTED CLAIM: A filed or scheduled Claim which is listed on the Debtor's
schedules as "disputed", or as to which an objection has been filed by a party-
in-interest and which has not been determined by Final Order.
EBITDA: Earnings before interest, taxes, depreciation, and amortization as
defined under generally accepted accounting principles.
EFFECTIVE DATE: The first business day that is eleven (11) days after the
Confirmation Order is entered on the Court's docket, unless the effect of the
Confirmation Order is stayed under Bankruptcy Rule 8005.
EQUITY SECURITY HOLDERS: The holders of Common Stock of the Debtor.
EQUITY SECURITY INTERESTS OR INTERESTS: Common Stock of the Debtor.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 3
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ESTATE: The estate created pursuant to Section 541 of the Bankruptcy Code.
EVENT OF DEFAULT: An event of default as described and defined in Article
XIII of the Plan.
EXCESS CASH FLOW: Excess Cash Flow as defined in Exhibit A hereto.
FINAL ORDER: An order or judgment of the Court as to which the time for
appeal has expired without a notice of appeal having been filed or as to which
any appeal therefrom has been resolved.
INSIDER: An "insider" as defined in Section 101(31) of the Code.
JACOBS FAMILY BUY/SELL AGREEMENT: The Jacobs Family Buy/Sell Agreement as
defined and described in Section V(E)(1)(a) of the Disclosure Statement.
1995 STOCK OPTION PLAN: The 1995 Stock Option Plan as (a) defined and
described in Section V(F) of the Disclosure Statement and Article VIII herein,
and (b) attached hereto as Exhibit D.
NOTE(S): The promissory note(s) to be issued to Class 3 Claimants
exercising rights of election as provided in Article IV(B)(Class 3)(c) herein,
the form of which is attached hereto as Exhibit A.
PCC: The Postconfirmation Creditors Committee described in Article V(D)
herein.
PETITION DATE: May 13, 1994, the date upon which the order for relief was
entered herein.
PLAN: This plan in its present form or as it may be amended or modified
from time to time pursuant to order of the Bankruptcy Court.
PRIORITY TAX CLAIM: An Allowed Claim of the kind described in Section
507(a)(7) of the Code.
PRIORITY WAGE CLAIM: An Allowed Claim of the kind and limited to the
amount described in Section 507(a)(3) of the Code.
PROFESSIONAL PERSONS: Persons to be compensated pursuant to Sections 326,
327, 328, 330, and/or 1103 of the Bankruptcy Code.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 4
<PAGE>
PRO RATA: Proportionally so that the ratio of the amount distributed on
account of a particular Allowed Claim to the amount of such Allowed Claim is the
same as the ratio of the amount distributed, on account of all Allowed Claims in
the Class of which such particular Allowed Claim is a member, to the total
amount of all Allowed Claims in such Class.
PRO RATA SHARE: Pro Rata Share as defined in Exhibit A hereto.
REORGANIZED DEBTOR: Following the Effective Date, the Debtor as
reorganized pursuant to the Plan.
SECURED CLAIM: An Allowed Claim that is a secured claim against the Debtor
in accordance with Section 506(a) of the Bankruptcy Code.
SECURED TAX CLAIM: An Allowed Secured Claim held by a governmental unit
for taxes.
TARGETED EBITDA: Targeted EBITDA as defined and described in Exhibit A
hereto.
UNCLASSIFIED CLAIM: An Allowed Claim of the kind described in Section
507(a)(1) or (7) of the Bankruptcy Code.
UNSECURED CLAIM: An Allowed Claim that is not an Unclassified Claim, a
Secured Claim, a Secured Tax Claim, a Class 1, or a Class 2 Claim.
ARTICLE III. -- CLASSIFICATION OF CLAIMS AND INTERESTS
CLASS 1: Priority Wage Claims.
CLASS 2: Secured Tax Claims.
CLASS 3: Unsecured Claims.
CLASS 4: Equity Security Interests.
Classes 2 and 3 are impaired; Classes 1 and 4 are unimpaired.
ARTICLE IV. -- TREATMENT OF CLAIMS AND INTERESTS UNDER THE PLAN
A. UNCLASSIFIED CLAIMS.
1. ADMINISTRATIVE EXPENSE CLAIMS. Administrative Expense Claims
shall be paid in full in cash by the Debtor on or before the Effective Date or
upon entry of a Final Order allowing such Claim, whichever occurs later, unless
the holder of such a Claim agrees to different treatment.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 5
<PAGE>
2. TRADE/ORDINARY COURSE OF BUSINESS EXPENSE CLAIMS. All claims
entitled to priority under Section 507(a)(1) of the Code that have been, are, or
will be incurred by the Debtor or Reorganized Debtor after the Petition Date in
the ordinary course of business pursuant to Section 363(c)(1) of the Code shall
be paid when and as incurred, or upon such ordinary invoicing terms to which the
Reorganized Debtor and creditor may agree.
3. PRIORITY TAX CLAIMS. All Allowed Priority Tax Claims shall be
paid by the Debtor in thirteen equal quarterly installments. In 1996, the first
such quarterly installment shall be due on January 2, 1996, the second on April
2, 1996, the third on July 2, 1996, and the fourth on October 2, 1996.
Thereafter, the nine remaining quarterly installments shall be paid
consecutively on the second day of each following January, April, July, and
October, with the final quarterly installment being payable on January 2, 1999.
The amount of the Allowed Priority Tax Claim shall include accrued interest at
the rate of 9.5% per annum from the Petition Date through the Date of
Confirmation. Thereafter, simple interest shall accrue postconfirmation on the
unpaid balance of each Allowed Priority Tax Claim at the rate of 9.5% per annum
unless the Court establishes, after notice and hearing, a different rate of
interest. Any holder of a claim entitled to priority under Section 507(a)(7) of
the Code shall, within the same deadline and in the same manner established for
objections to confirmation of the Plan, file any objection it has to the
proposed interest rate, identify a proposed alternative rate, and set forth the
facts and circumstances justifying such rate. FAILURE TO OBJECT TO THE PROPOSED
INTEREST RATE SHALL BE DEEMED A CONSENT THERETO.
Notwithstanding the foregoing, all Allowed Priority Tax Claims shall be
paid in full within six years of the date of the assessment of the tax upon
which such Claim is based. Further, any particular Allowed Priority Tax Claim
may be prepaid in whole at any time without premium or penalty. Any such
prepayment shall be accompanied by a payment of all interest accrued on the
balance due on the Allowed Claim up to the date of the prepayment.
B. CLASSIFIED CLAIMS.
CLASS 1. (Priority Wage Claims). Each holder of an Allowed Class 1
Claim shall receive cash on the Effective Date of the Plan equal to the allowed
amount of such Claim. Class 1 Claims are not impaired.
CLASS 2. (Secured Tax Claims). Each holder of an Allowed Class 2
Claim shall retain its lien against the collateral securing the Class 2 Claim
until such claim is paid in full by the Debtor in thirteen equal quarterly
installments. In 1996, the first
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 6
<PAGE>
such quarterly installment shall be due on January 2, 1996, the second on April
2, 1996, the third on July 2, 1996, and the fourth on October 2, 1996.
Thereafter, the nine remaining quarterly installments shall be paid
consecutively on the second day of each following January, April, July, and
October, with the final quarterly installment being payable on January 2, 1999.
The amount of the Allowed Class 2 Claim shall include accrued interest at the
rate of 9.5% per annum from the Petition Date through the Date of Confirmation.
Thereafter, simple interest shall accrue postconfirmation on the unpaid balance
of each Allowed Class 2 Claim at the rate of 9.5% per annum unless the Court
establishes, after notice and hearing, a different rate of interest. The
procedure for establishing a different rate of interest shall be the same as
that specified in Article IV(A)(3) herein. FAILURE TO OBJECT TO THE PROPOSED
INTEREST RATE SHALL BE DEEMED A CONSENT THERETO.
Notwithstanding the foregoing, all Allowed Secured Tax Claims shall be paid
in full within six years of the date of the assessment of the tax upon which
such Claim is based. Further, if any property securing an Allowed Class 2 Claim
is abandoned or sold following the Date of Confirmation, either the new owner
shall take the property subject to the tax lien of the Class 2 Claimant or the
Class 2 Claimant shall be paid the proceeds of its collateral. Finally, any
particular Allowed Class 2 Claim may be prepaid in whole at any time without
premium or penalty. Any such prepayment shall be accompanied by a payment of
all interest accrued on the balance due on the Allowed Claim up to the date of
the prepayment.
CLASS 3. (Unsecured Claims). Holders of Allowed Unsecured Claims
shall receive the following:
a. 1996 30% PAYMENT. On January 2, 1996, each holder of an
Allowed Class 3 Claim shall receive a payment from the Reorganized Debtor in the
amount of 30% of its Allowed Class 3 Claim, without interest. THIS 1996 30%
PAYMENT WILL BE PAID TO ALL HOLDERS OF ALLOWED CLASS 3 CLAIMS.
b. 1997 30% PAYMENT. Except for holders of Allowed Class 3
Claims electing for the treatment set forth in Article IV(B)(Class 3)(c)
immediately below, on January 2, 1997, each holder of an Allowed Class 3 Claim
shall receive one final payment from the Reorganized Debtor in the amount of 30%
of its Allowed Class 3 Claim, without interest. Upon satisfaction of this 1997
30% payment, the subject Class 3 Claim shall be deemed satisfied in full.
HOLDERS OF ALLOWED CLASS 3 CLAIMS ELECTING THE 1997 15% PAYMENT AND THE NOTE
DESCRIBED BELOW WILL NOT RECEIVE THIS 1997 30% PAYMENT.
c. RIGHT TO ELECTION OF 1997 15% PAYMENT AND NOTE. In lieu of
the payment specified in Article IV(B)(Class 3)(b)
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 7
<PAGE>
immediately above, holders of Allowed Class 3 Claims shall have the right to
elect the payments set forth in this subsection (c). If a holder of an Allowed
Class 3 Claim elects to exercise the right to receive payment as set forth in
this subsection (c), such holder must notify the Reorganized Debtor in writing
(as described below) on or before July 15, 1996 of such exercise, and thereafter
shall receive the following in full satisfaction of its Allowed Class 3 Claim,
in addition to the 1996 30% payment set forth in Article IV(B)(Class 3)(a)
above:
(1) 1997 15% PAYMENT. On January 2, 1997, such electing
holder of an Allowed Class 3 Claim shall receive a second payment under the Plan
in the amount of 15% of its Allowed Class 3 Claim, without interest. SUCH
ELECTING HOLDERS WILL NOT RECEIVE THE 1997 30% PAYMENT DESCRIBED IN ARTICLE
III(B)(CLASS 3)(b) IMMEDIATELY ABOVE.
(2) NOTE(S). Additionally, upon exercise of such right of
election, each such electing holder of an Allowed Class 3 Claim shall receive a
promissory note (the "Note"), with a principal sum equal to the amount of 42% of
its Allowed Class 3 Claim. A copy of the Note is attached hereto as Exhibit A,
and the terms and conditions of the Note are incorporated herein by reference.
A summary of the key provisions of the Note follows:
PRINCIPAL AMOUNT: 42% of Allowed Class 3 Claim (the "Principal
Amount").
INTEREST RATE: 9.5% per annum, commencing February 1, 1997.
INTEREST PAYMENTS: Due when principal payments are due and
payable.
INTEREST ON LATE PAYMENTS: 11.5% per annum.
PRINCIPAL PAYMENTS: 26.2% of Principal Amount due January 2,
1998; 24.6% of Principal Amount due January 2, 1999; 24.6% of Principal Amount
due January 2, 2000; 24.6% of Principal Amount due January 2, 2001.
MATURITY: January 2, 2001.
EXCESS CASH FLOW PAYMENTS: Additionally, non-cumulative Excess
Cash Flow Payments (as therein defined), if any, shall be due and payable on the
15th of June in calendar years 1999, 2000, and 2001 based on such holder's Pro
Rata Share (as therein defined) of 30%, 40%, and 50% of Excess Cash Flow over
Targeted EBITDA (as therein defined) for the prior fiscal year ended
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 8
<PAGE>
January 1999, January 2000, and January 2001, respectively, as provided in the
Note; PROVIDED, HOWEVER, that amounts payable as Excess Cash Flow shall not
exceed the difference between 100% of the holder's Allowed Class 3 Claim, less
the net present value (using a 12% discount rate) of all cash paid or payable
with respect to such Allowed Class 3 Claim, whether under the Note or the Plan.
PREPAYMENT: Prepayment of principal and accrued interest is
permitted without penalty. The Note shall be deemed paid in full upon payment
of all principal and accrued interest, and if so prepaid, any obligation to make
payments of Excess Cash Flow with respect to any fiscal year ending after the
date when such prepayment is made shall cease.
CREDITORS SHOULD CAREFULLY READ AND REVIEW THE ATTACHED NOTE. IF ANY
INCONSISTENCY EXISTS BETWEEN THE FOREGOING SUMMARY AND THE NOTE, THE NOTE
SUPERSEDES THE SUMMARY, AND THE TERMS AND CONDITIONS OF THE NOTE ARE
CONTROLLING.
(3) NOTICE OF EXERCISE REQUIREMENTS. Written notice of the
election by a holder of an Allowed Class 3 Claim to exercise the right to
receive the 1997 15% payment and the Note shall either be made by (a) certified
letter, (b) hand delivery, or (c) next day delivery service, in all three cases,
to Jay Jacobs, Inc. (Attn: William L. Lawrence, Jr.), 1530 Fifth Avenue,
Seattle, WA 98101. If sent by certified mail, the election notice must be
postmarked no later than July 15, 1996. If hand-delivered or sent by next day
delivery service, the notice of election must be received by the Company during
regular business hours no later than July 15, 1996.
STRICT COMPLIANCE WITH THE FOREGOING NOTICE OF EXERCISE PROCEDURES IS
REQUIRED. FAILURE TO PROVIDE NOTICE OF EXERCISE OF THE RIGHT DESCRIBED ABOVE IN
A TIMELY FASHION WILL RESULT IN SATISFACTION OF A CLASS 3 CLAIMANT'S CLAIM IN
THE MANNER DESCRIBED IN ARTICLE IV(B)(CLASS 3)(b).
(4) REPORTING REQUIREMENTS. For the fiscal years ending
1997, 1998, 1999, 2000, and 2001, the Reorganized Debtor shall provide each
holder of a Note with audited consolidated financial statements certified by
independent public accountants. Additionally, for the fiscal years ending 1999,
2000, and 2001, the Reorganized Debtor shall furnish each holder of a Note with
a comprehensive analysis of Excess Cash Flow for that fiscal year.
d. SUBORDINATION PROVISIONS. The cash incentive compensation
payments due to Rex Loren Steffey and William L. Lawrence, Jr. under their
employment contracts (SEE Sections III(O)(1) and III(O)(2) of the Disclosure
Statement, respectively)
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 9
<PAGE>
shall (a) be subordinate to the payments due and payable with respect to Allowed
Class 3 Claims, and (b) not be paid until all payments due to holders of Allowed
Class 3 Claims in that calendar year have been paid, so that, for example, the
cash incentive payments due (i) after the conclusion of fiscal year 1996 shall
not be paid unless all Allowed Class 3 Claims payments due on January 2, 1996
have been made, (ii) after the conclusion of fiscal year 1997 shall not be paid
unless all Allowed Class 3 Claims payments due on January 2, 1997 have been
made, and (iii) after the conclusion of remaining fiscal years shall not be paid
unless all payments due that calendar year under the Note(s) have been made.
CLASS 4. (Equity Security Interests). Holders of Class 4 Interests
shall retain their interests, and the rights of the holders of Company Common
Stock will not be altered upon confirmation of the Plan. No payments or
distributions will be made to Class 4 Interests under the Plan. Class 4
Interests are not impaired.
ARTICLE V. -- EXECUTION OF THE PLAN
A. VESTING OF PROPERTY OF THE ESTATE. All assets of the Estate shall be
vested in the Reorganized Debtor in accordance with Section 1141 of the
Bankruptcy Code, and no further order of the Court shall be necessary for the
Reorganized Debtor to perform such acts as are in the ordinary course of its
business and/or as are necessary to carry out the purposes and intent of this
Plan. Except as otherwise expressly provided herein, the Reorganized Debtor
shall be free to manage its affairs without further Court intervention.
B. FUNDING OF PLAN. The Company believes that revenues from future
business operations, as well as the new financing agreement with LaSalle
National Bank (which the Company anticipates will be approved before the Plan is
confirmed (SEE Section III(P) of the Disclosure Statement)), should enable the
Debtor to comply with the payment provisions of the Plan.
C. NO PAYMENTS PRIOR TO EFFECTIVE DATE. Although the Plan provides for
various payments to be made on January 2, 1996, such payments shall be due and
payable on the Effective Date if January 2, 1996 precedes the Effective Date.
D. POSTCONFIRMATION CREDITORS COMMITTEE ("PCC"). Upon confirmation, the
Committee shall remain in existence, but it shall thereafter be known and
redesignated as the Postconfirmation Creditors Committee (the "PCC"). The PCC
shall prescribe its own rules of procedure, subject to the following
requirements. The PCC's rights and duties are restricted and limited to those
described and provided for in Article V(G), Article V(K), Article VI, Article
XII, and Article XIII herein.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 10
<PAGE>
The PCC may continue to employ the current attorneys for the Committee as
counsel for the PCC to advise it with respect to such limited rights and duties,
and the PCC is entitled to recover its reasonable attorneys' fees and expenses
from the Reorganized Debtor. Absent Court approval with notice to the
Reorganized Debtor, the PCC may not employ other Professional Persons, the fees
and costs of which are to be borne by the Reorganized Debtor. Any dispute
concerning the fees and costs of Professional Persons of the PCC shall be heard
and determined by the Court.
Members of the PCC are entitled to receive reimbursement of their
reasonable expenses from the Reorganized Debtor, but they shall serve without
compensation. Any dispute concerning the reimbursement of expenses for PCC
members shall be heard and determined by the Court.
Any notices or information required herein to be sent to the PCC shall be
forwarded by facsimile transmission to the PCC (c/o Lawrence C. Gottlieb, Esq.,
Siegel, Sommers & Schwartz, L.L.P., 470 Park Avenue South, New York, NY 10016
(fax number: (212) 889-0688; confirmation number: (212) 889-7570)).
Upon the earlier of (a) the Reorganized Debtor's full satisfaction of all
payments on Allowed Claims due before and including January 2, 1997 under the
Plan, or (b) disbandment by unanimous consent of its members, the PCC shall
disband and cease to exist.
E. SECURITIES LAW EXEMPTION. Pursuant to Section 1145(a) of the Code,
the issuance of Note(s), if any, hereunder to Class 3 Claimants is exempt from
the requirements of Section 5 of the Securities Act of 1933 and any state or
local law requiring registration for offer or sale of a security.
F. IMPLEMENTATION. Following confirmation, the current Board of
Directors and shareholders of the Debtor, as well as the Board of Directors and
shareholders of the Reorganized Debtor, shall undertake whatever actions are
necessary under corporate law, the Articles of Incorporation, the Bylaws, or
otherwise to accomplish the foregoing and other provisions of the Plan. It is
not contemplated that the Articles of Incorporation or Bylaws will be amended to
accomplish and satisfy the provisions of the Plan.
G. ADMINISTRATION OF CLAIMS AND CAUSES OF ACTION.
1. GENERAL. Notwithstanding any provision to the contrary in this
Plan, all rights, claims, and causes of action, whether equitable or legal, of
the Debtor, Debtor-In-Possession, or
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 11
<PAGE>
the Reorganized Debtor against all persons are reserved for the Reorganized
Debtor during the first sixty (60) days following the Effective Date. Without
limiting the generality of the foregoing, such rights, claims, and causes of
action include, but are not limited to, those arising under (a) Sections 544,
545, 547, 548, and 549 of the Bankruptcy Code, and (b) state or other federal
law for the recovery of avoidable transfers.
During the pendency of the Case, prior to or after the Date of
Confirmation, the Reorganized Debtor shall investigate, prosecute, and/or settle
such claims as the Reorganized Debtor deems appropriate, and may commence
adversary proceedings against persons to realize upon causes of action retained.
After the first sixty (60) days following the Effective Date, the PCC shall have
an additional thirty (30) days to file any such action. Additionally, the PCC
may join any such action filed by the Company. After ninety (90) days following
the Effective Date, no additional such actions may be filed by any party.
2. WAIVER OF PREFERENCE ACTIONS. Notwithstanding the foregoing, the
Reorganized Debtor waives the right to pursue preference actions against any
parties under (a) Section 547 of the Bankruptcy Code, or (b) similar state law
preference theories, PROVIDED, HOWEVER, that the Reorganized Debtor reserves the
right to raise such preference causes of action as an affirmative defense to any
action or counterclaim asserted by any party against the Company.
H. DISBURSING AGENT. The Reorganized Debtor shall be the Disbursing
Agent for the payments required to be made under the Plan. Additionally, the
Reorganized Debtor shall continue to have the sole authority to pay the
operating expenses of the Reorganized Debtor, the expenses of liquidation of any
asset of the Reorganized Debtor, including any tax liability resulting
therefrom, and the amounts necessary to cure any arrearages under any executory
contract or unexpired lease being assumed pursuant to this Plan.
I. DEADLINE FOR FILING CERTAIN ADMINISTRATIVE EXPENSE CLAIMS. Any party
holding a claim entitled to priority pursuant to Section 507(a)(1) of the
Bankruptcy Code incurred prior to the Date of Confirmation, other than the
claims for fees and costs of Professional Persons, shall file a proof of such
claim within thirty (30) days of the Date of Confirmation; provided, however,
that this deadline shall not apply to claims arising under Article IV(A)(2) of
this Plan. The failure of any party to timely file a proof of claim as required
hereunder will result in the disallowance of such claim.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 12
<PAGE>
J. NOTICE PROCEDURES GOVERNING DISTRIBUTIONS.
1. UNCLAIMED FUNDS. Pursuant to Section 347(b) of the Bankruptcy
Code, ninety (90) days after any distribution made pursuant to the provisions of
the Plan, including any payment on a Note obligation to a Class 3 Claimant, the
Reorganized Debtor shall send a certified letter to each claimant who has
received a check which remains unpaid, informing such claimant that it has
thirty (30) days in which to respond to the Company and cash the check. If the
Claimant fails to (a) respond to the certified letter and cash the check during
such period, or (b) the certified letter is returned as undeliverable, the
Reorganized Debtor shall stop payment on such check, and said funds shall be
returned to the Reorganized Debtor. From and after the date that the
Reorganized Debtor stops payment on any distribution check pursuant to the terms
of this subparagraph (J), the holder of the Claim on account of which such check
was issued shall be entitled to no further distributions on account of the
Claim, and such holder's Allowed Claim shall thereupon be deemed satisfied in
full, including any and all Note obligations with respect to such Claim.
2. CHANGE OF ADDRESS. All distributions to creditors under the Plan
shall be mailed to the address listed on the respective creditor's proof of
claim (or assignee's notice of transfer), or in the absence of a proof of claim
(or notice of transfer), at the address listed in the Debtor's schedules for
such creditor. Any changes of address must be forwarded to Jay Jacobs, Inc.
(Attn: William L. Lawrence, Jr.), 1530 Fifth Avenue, Seattle, WA 98101, by
certified mail; such change of address shall not take effect for the purposes of
this subparagraph (J) until fifteen (15) days after the Company receives such
certified letter advising of the address change.
K. POSTCONFIRMATION PROFESSIONAL FEES. Subsequent to the Date of
Confirmation, during the existence of the PCC, the Reorganized Debtor shall be
authorized to pay fees and expenses incurred by professionals. Monthly invoices
of said fees and expenses shall be delivered to the Reorganized Debtor, its
counsel, and counsel to the PCC. Unless a written objection is received within
ten (10) days after receipt of the monthly invoices, said fees and expenses
shall be paid by the Reorganized Debtor. If a written objection is received
within ten (10) days, the parties seeking payment shall apply to the Bankruptcy
Court for approval of said fees and expenses, if the objection cannot be
amicably resolved. Following disbandment of the PCC, the Reorganized Debtor
shall be authorized to pay fees and expenses of its professionals in the
ordinary course of its business.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 13
<PAGE>
L. EXCULPATION. The Debtor, Reorganized Debtor, the Committee, the PCC,
and their respective directors, shareholders, agents, officers, employees,
representatives, and attorneys, including Professional Persons (acting in such
capacity), shall neither have nor incur liability to any entity for any action
taken or omitted to be taken in connection with or related to the formulation,
preparation, dissemination, implementation, confirmation or consummation of the
Plan, the Disclosure Statement, earlier versions of same or any contract,
instrument, release or other agreement or document created or entered into, or
any other action taken or omitted to be taken in connection with the Plan;
PROVIDED, HOWEVER, that the foregoing provisions of this subparagraph (L) shall
have no effect on the liability of any entity that would otherwise result from
any such action or omission to the extent that such action or omission is
determined in a Final Order to have constituted gross negligence or willful
misconduct.
ARTICLE VI. -- CLAIMS OBJECTIONS AND TREATMENT OF DISPUTED CLAIMS
A. OBJECTIONS TO CLAIMS. Any objection to a claim by the Reorganized
Debtor must be filed on the later of (a) January 2, 1996, or (b) thirty (30)
days after the filing of a proof of claim pursuant to the provisions of Article
VII(B) below or other claims filed subsequent to confirmation, unless said time
period is extended by the Bankruptcy Court for cause shown. Thereafter, the PCC
shall have an additional thirty (30) days to file any other objections to
claims. Additionally, the PCC may join any objection filed by the Company.
Objections must be served in accordance with Bankruptcy Rule 3007.
B. TREATMENT OF DISPUTED CLAIMS. Notwithstanding any provision of the
Plan specifying the time for payment of distributions to holders of claims, no
distribution shall be made to, and no Note shall be issued to the holder of any
Disputed Claim until the time such Claim has been determined to be an Allowed
Claim. At the time of each distribution to holders of Claims in a class or
unclassified category which contains any Disputed Claim, the Disbursing Agent
shall reserve the amount which would have been distributed to holders of the
Disputed Claims had their claims been Allowed Claims so that the timing of
distributions to other creditors shall not be affected by any delay in the
resolution of the Disputed Claims. Upon the allowance of any Disputed Claim,
the holder shall be paid the amount which such holder would have received had
its claim been an Allowed Claim on the Effective Date.
Notwithstanding the foregoing, the Disbursing Agent shall timely pay all
undisputed portions, if any, of Disputed Claims pursuant to the relevant
provisions of the Plan. Upon the allowance of the disputed portion of a
Disputed Claim, the Disbursing Agent
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 14
<PAGE>
shall pay the amount of the allowed portion, plus 4% per annum accruing from the
date that the payment was otherwise due to be paid under the Plan and accruing
only on the amount past due under the payment provisions of the Plan.
C. SETTLEMENT OF CLAIMS. Settlements of Disputed Claims shall be
approved on an ex parte basis if the subject settlement order is executed by
both the Reorganized Debtor and the PCC. In the absence of such a jointly
executed order regarding a particular settlement, approval of the subject
compromise agreement will require (a) notice to the Reorganized Debtor, the PCC,
and all parties entitled to special notice in the Case, and (b) a hearing.
ARTICLE VII. -- EXECUTORY CONTRACTS AND UNEXPIRED LEASES
A. LEASES AND CONTRACTS TO BE ASSUMED OR REJECTED.
1. JACOBS FAMILY BUY/SELL AGREEMENT. The Jacobs Family Buy/Sell
Agreement shall be assumed by the Reorganized Debtor on the Effective Date.
2. ASSUMED REAL ESTATE LEASES. The unexpired real estate leases
under which the Company is the lessee listed on Exhibit B attached hereto shall
be assumed by the Reorganized Debtor on the Effective Date. THE DEBTOR RESERVES
THE RIGHT TO AMEND EXHIBIT B PRIOR TO CONFIRMATION OF THE PLAN.
3. OTHER CONTRACTS/LEASES. Any executory contract or unexpired
lease of the Debtor not listed above, or not previously assumed pursuant to
court order, will be deemed rejected by the Reorganized Debtor on the Effective
Date.
B. FILING OF CLAIMS ARISING FROM REJECTION OF CONTRACT OR UNEXPIRED
LEASE. Any claim arising from the rejection of any executory contract or
unexpired lease is a Class 3 Claim to the extent it is an Allowed Claim. Any
party holding a claim arising from the rejection of a contract or unexpired
lease pursuant to Article VII(A)(3) of the Plan must file a proof of such claim
with the Court within thirty (30) days of the Date of Confirmation or by such
earlier deadline that the Court may impose. The failure of any party to timely
file a proof of claim required hereunder will result in the disallowance of the
claim.
C. CURE OF DEFAULTS. With regard to any executory contract or unexpired
lease to be assumed as set forth in Article VII(A)(1) and (2) above, the
Reorganized Debtor shall (a) assume such contract or lease on the Effective
Date, and (b) cure any arrearage under the contract or lease, upon assumption in
such amounts as may be determined by the Court at the hearing on confirmation or
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 15
<PAGE>
thereafter. Any party to an executory contract or unexpired lease scheduled for
assumption in this Plan shall, within the same deadline and in the same manner
established for objecting to confirmation, file any claim for arrearage required
to be cured under Section 365(b)(1) of the Bankruptcy Code. FAILURE TO TIMELY
ASSERT A CLAIM FOR ARREARAGES SHALL CONSTITUTE AN ACKNOWLEDGMENT THAT NO
DEFAULTS OR CLAIMS EXIST UNDER SUCH CONTRACT OR LEASE WHICH REQUIRE A CURE.
D. AFFIRMATION OF MASTER LEASE FOR VEHICLES. Confirmation of the Plan
will (a) in no way alter or affect the Company's performance obligations under
its master lease for certain vehicles, dated May 30, 1995, entered into with
Glesby-Marks Leasing Corporation, and (b) shall constitute the Reorganized
Debtor's affirmation of said master lease.
ARTICLE VIII. -- 1995 STOCK OPTION PLAN
On the Effective Date, the 1995 Stock Option Plan shall become effective.
A copy of the 1995 Stock Option Plan is attached hereto as Exhibit C. ALSO SEE
Section V(F) of the Disclosure Statement.
THE PLAN AND THE DISCLOSURE STATEMENT SHALL BE DEEMED A SOLICITATION TO THE
HOLDERS OF COMMON STOCK FOR APPROVAL OF THE 1995 STOCK OPTION PLAN, AND APPROVAL
OF THE PLAN THEREBY AND THE CONFIRMATION ORDER SHALL CONSTITUTE APPROVAL OF THE
1995 STOCK OPTION PLAN FOR PURPOSES OF RULE 16b-3 OF THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, AND SECTIONS 162(m) AND 422 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.
ARTICLE IX. -- DISCHARGE OF CLAIMS
The distribution(s) made to the various Classes of creditors as provided
for in this Plan shall be in full and complete satisfaction of their Allowed
Claims. Except as otherwise provided in this Plan or the Confirmation Order,
entry of the Confirmation Order shall operate, upon the Effective Date, as a
discharge of any and all debts and claims as defined in Section 101(5) of the
Bankruptcy Code against the Debtor or Debtor-In-Possession that arose any time
prior to the Date of Confirmation.
The discharge of the Debtor and the discharge of claims against the Debtor
or the Debtor-In-Possession shall be effective to each such claim, regardless of
whether or not (a) the claim was scheduled by the Debtor, (b) a proof of claim
was filed, (c) the claim is an Allowed Claim, or (d) the holder thereof voted to
accept the Plan. Further, any negotiable instrument or other document
evidencing a debt obligation held by the holder of an impaired
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 16
<PAGE>
Allowed Claim shall be deemed exchanged, cancelled, or satisfied, as the case
may be, on the Effective Date.
Postconfirmation debts of the Company, including tax obligations that
become due and owing postconfirmation, are in no way affected by the above-
referenced discharge. Such postconfirmation debts shall be subject to
collection if not timely paid, unaffected by the referenced discharge.
ARTICLE X. -- LIMIT ON COMPENSATION OF INSIDERS
For the fiscal years ending January 27, 1996 and January 25, 1997, annual
base compensation to executive officers and directors of the Company, excluding
bonuses, stock options, and other benefits authorized by the Company and
permissible under corporate law, shall be limited as follows:
NAME POSITION COMPENSATION COMMENTS
Jay Jacobs Chairman of the $225,000 SEE Section
Board II(C)(1) of
Disclosure
Statement
Rex Loren Steffey President and Chief $350,000 SEE Section
Executive Officer III(O)(1) of
Disclosure
Statement
Doris L. Williams Executive Vice $127,000 SEE Section
President - Administration III(U)(3) of
and Secretary Disclosure
Statement
William L. Lawrence Senior Vice President, $200,000 SEE Section
Chief Financial Officer, III(O)(2) of
and Treasurer Disclosure
Statement
Shelley Swerland Director $5,000 annual SEE Sections
retainer, plus III(S)(4) and
$500 for each III(T) of
board meeting, Disclosure
and $500 for each Statement
committee meeting
chaired.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 17
<PAGE>
NAME POSITION COMPENSATION COMMENTS
Sam Rubinstein Director $5,000 annual SEE Sections
retainer, plus III(S)(5) and
$500 for each III(T) of
board meeting, Disclosure
and $500 for each Statement
committee meeting
chaired.
David J. Taylor Director $5,000 annual SEE Sections
retainer, plus III(S)(6) and
$500 for each III(T) of
board meeting, Disclosure
and $500 for each Statement
committee meeting
chaired.
Gilbert Scherer Director $5,000 annual SEE Sections
retainer, plus III(S)(7) and
$500 for each III(T) of
board meeting, Disclosure
and $500 for each Statement
committee meeting
chaired.
ARTICLE XI. -- MODIFICATION OF THE PLAN
Pursuant to the provisions of Section 1127 of the Bankruptcy Code and
Bankruptcy Rule 3019, the Debtor reserves the right to modify or alter the
provisions of the Plan at any time prior or subsequent to confirmation,
including, but not limited to, modifications with respect to executory contracts
and unexpired leases as provided in Article VII herein.
ARTICLE XII. - COVENANTS
A. COVENANTS. During the existence of the PCC, the Reorganized Debtor is
subject to the following covenants:
1. The Reorganized Debtor shall not directly or indirectly sell, lease,
transfer, abandon, or otherwise dispose of all or any substantial portion of its
property or assets (other than (a) dispositions of tangible personal property
which is obsolete or being replaced by or leased back to the Reorganized Debtor,
and (b) sales in the ordinary course of its business) or consolidate or merge
with or into any other entity or permit any other entity to consolidate or merge
with or into it, PROVIDED, HOWEVER, that the Reorganized Debtor may merge or
consolidate with or into a
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 18
<PAGE>
corporation or other entity or acquire substantially all the assets of another
entity (collectively, a "Permitted Acquisition") if the surviving entity assumes
the obligations of the Reorganized Debtor. The Reorganized Debtor shall at all
times preserve, renew, and keep in full force and effect its existence as a
corporation and the rights and franchises with respect thereto and continue to
engage in business of the same type as the Debtor is engaged in as of the
Effective Date.
2. The Reorganized Debtor shall maintain its books, records, and
accounts in accordance with generally accepted accounting principles
consistently applied. The Reorganized Debtor shall furnish the PCC quarterly
with interim consolidated financial statements (including balance sheet,
statement of income and surplus account, and cash flow statements). The
Reorganized Debtor shall furnish the PCC with audited consolidated financial
statements on an annual basis certified by independent public accountants
selected by the Reorganized Debtor and reasonably acceptable to the PCC. All
such statements and information shall fairly present the Reorganized Debtor's
financial condition as of the dates, and the results of its operations for the
periods, for which the same are furnished.
3. The Reorganized Debtor shall make every reasonable effort to pay and
discharge all taxes, assessments, contributions, and governmental charges upon
or against it or its properties or assets prior to the date on which penalties
attach thereto, except for such taxes, assessments, contributions, and
governmental charges which are being contested in good faith and for which the
Reorganized Debtor has established on its books adequate reserves.
4. The Reorganized Debtor shall promptly notify the PCC in writing of
the details of any loss, damage, investigation, action, suit, proceeding, or
claim which would result in any material adverse change in the Reorganized
Debtor's business, properties, assets, goodwill, or financial condition.
5. The Reorganized Debtor shall not create, incur, assume, or suffer to
exist any lien on any of its property, except for (a) liens in favor of C.I.T.
Group/Business Credit, Inc. or any successor operating lender (the "Operating
Lender"), and/or any letter of credit issuer(s) ("LC Issuer(s)"); (b) the liens
securing the payment of taxes, either not yet due and payable or the validity of
which is being contested in good faith by appropriate proceedings, and as to
which the Reorganized Debtor shall, if appropriate under generally accepted
accounting principles, have set aside on its books and records adequate
reserves; (c) deposits under workmen's compensation, unemployment insurance,
social security, and other similar laws; (d) non-consensual liens of
warehousemen, materialmen,
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 19
<PAGE>
mechanics, carriers, landlords, and other similar entities which liens arise in
the ordinary course of the Reorganized Debtor's business which are not overdue
for a period of more than thirty (30) days; (e) purchase money liens (including
financing leases) attaching solely to property acquired or leased by the
Reorganized Debtor for use in the ordinary course of its business, including
construction liens (including materialmens' and mechanics' liens) attaching in
the manner permitted by applicable law; and (f) reservations, exceptions,
encroachments, zoning restrictions, easements, irregularities of title, and
other restrictions which do not materially adversely impair the value of such
property to the Reorganized Debtor.
6. The Reorganized Debtor shall not make or permit to exist investments
or loans in or to any entity, except for (a) investments in short term
obligations of the United States of America; (b) investments in dollar-
denominated certificates of deposit in, and repurchase agreements with, a United
States commercial bank having shareholders' equity of at least $1,000,000, in
either case with maturities of one year or less from the date of issuance;
(c) investments in commercial paper rated A-1 or P-1; (d) existing loans to any
entity; and (e) loans to employees in an aggregate amount not to exceed $50,000.
7. The Reorganized Debtor shall not guarantee, endorse, or otherwise in
any way become or be responsible for the obligations of any other entity or
incur, create, assume, pay principal or interest on, become or be liable in any
manner with respect to, or permit to exist, any obligations or indebtedness,
other than (a) its obligations under the Plan, (b) obligations to the Operating
Lender or LC Issuer(s), (c) trade and ordinary course of business obligations,
(d) obligations related to capital expenditures, (e) the endorsement of checks
which are being collected and normal accruals in the ordinary course of business
not yet due and payable, (f) indemnification of officers and directors and the
provision of insurance to cover such indemnification, and (g) financing required
for Permitted Acquisitions.
8. The Reorganized Debtor shall not (a) redeem, purchase, or otherwise
retire any of its shares of capital stock, (b) declare or pay any dividends to
any class of stock or classes of stock, or (c) return capital of the Reorganized
Debtor to its shareholders.
9. Except as otherwise expressly provided in the Plan, the Reorganized
Debtor shall not enter into any transaction with any Affiliate, including
without limitation the purchase, lease, sale, or exchange of property or the
rendering of any service to or by any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Reorganized Debtor's
business and
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 20
<PAGE>
upon fair and reasonable terms no less favorable to the Reorganized Debtor than
the Reorganized Debtor would obtain in a comparable arms-length transaction with
an entity which is not an Affiliate.
10. The Reorganized Debtor shall maintain, at its expense, public
liability and third party property insurance, in such amounts and with such
deductibles as are consistent with current practices, and with existing carriers
or other reputable carriers. The PCC recognizes that the Reorganized Debtor
currently self-insures against most property risks, and intends no change to
such practice.
11. The Reorganized Debtor shall, as soon as possible, and in any event
within five (5) business days after the Reorganized Debtor learns of the
following, give written notice to the PCC of (a) any proceeding or proceedings
being instituted or threatened to be instituted by or against the Reorganized
Debtor in any federal, state, local, or foreign court or before any commission
or other regulatory body in which money damages in excess of $250,000 are
claimed or any material non-monetary relief is requested, other than those set
forth herein or in the Disclosure Statement, and (b) any material adverse change
in the financial condition, operations, or properties of the Reorganized Debtor.
B. DEFINITIONS. For purposes of the foregoing covenants, the following terms
shall have these meanings:
1. "Affiliate" shall mean any entity (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with the Reorganized Debtor, (b) that directly or beneficially
owns or holds five percent (5%) or more of any class of the voting stock of the
Reorganized Debtor, or (c) five percent (5%) or more of whose voting stock (or
in the case of an entity which is not a corporation, five percent (5%) or more
of the equity interest) is owned directly or beneficially or held by the
Reorganized Debtor.
2. "Ordinary course of business" of the Reorganized Debtor shall include
the Reorganized Debtor's current apparel business practices, including, but not
limited to, markdowns, clearances, promotional events, and routine liquidation
sales.
THE PROVISIONS OF THIS ARTICLE XII IN NO WAY LIMIT OR RESTRICT THE RIGHTS OF
ANY INDIVIDUAL ALLOWED CLAIM HOLDER TO EXERCISE ANY RIGHTS TO ACCELERATE OR
ENFORCE PAYMENT OBLIGATIONS OR OTHER RIGHTS WITH RESPECT TO ITS CLAIM OR NOTE.
SEE ARTICLE XIV(J) HEREIN.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 21
<PAGE>
ARTICLE XIII - DEFAULTS
A. EVENTS OF DEFAULT. Absent a written waiver by the PCC, any one of
the following events which occurs and continues beyond the applicable cure
period during the existence of the PCC shall be an Event of Default of the Plan:
1. The failure of the Reorganized Debtor to make any payments on Allowed
Class 3 Claims when due under the Plan, and the continuation of such failure for
a period of thirty (30) days after the due date of such payment.
2. The failure of the Reorganized Debtor to perform or comply with any
material term or provision of this Plan, other than a payment due on an Allowed
Class 3 Claim, which failure remains uncured for a period of thirty (30) days
after written notice of such failure shall have been furnished to the
Reorganized Debtor by the PCC.
3. An order for relief under the Bankruptcy Code shall have been granted
to or against the Reorganized Debtor (except for the present proceedings), or
the Reorganized Debtor shall have made an assignment for the benefit of
creditors or the Reorganized Debtor shall have applied for or consented to the
appointment of any receiver, trustee, custodian, or similar officer or any
custodian for all or for any substantial part of its assets; or such receiver,
trustee, or similar officer shall have been appointed without the application or
consent of the Reorganized Debtor, and such an appointment shall not have been
stayed or vacated within a period of ninety (90) days after such appointment; or
the Reorganized Debtor shall institute any bankruptcy, insolvency, liquidation,
reorganization, readjustment, dissolution, or similar proceedings relating to it
under the laws of any jurisdiction; or any such proceeding shall have been
instituted against the Reorganized Debtor which is not stayed or dismissed
within a period of ninety (90) days.
4. The entry of a judgment or judgments against the Reorganized Debtor
in any amount which in the aggregate exceeds insurance coverage, if any,
maintained with respect thereto by more than $250,000 and which is not vacated
or otherwise satisfied within sixty (60) days thereafter or which is not the
subject of an appeal filed in good faith and as to which no surety company bond
has been filed by the Reorganized Debtor required by any court having
jurisdiction or is not otherwise stayed as to the enforcement of an execution.
5. The entry of any order or the imposition of any other process having
the force of law, the effect of which is to
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 22
<PAGE>
restrain materially the conduct by the Reorganized Debtor of its ordinary course
of business.
6. The failure of any of Rex Loren Steffey and William L. Lawrence, Jr.,
other than by death or disability, at any time to exercise that authority and
discharge those management responsibilities with respect to the Reorganized
Debtor as are exercised and discharged by each of them at the Date of
Confirmation.
B. NOTICE OF ACCELERATION; HEARING. Upon an Event of Default, as set
forth immediately above, a majority in number of the members of the PCC, who
hold a majority of the dollar amounts of the Allowed Class 3 Claims held by all
members of the PCC, shall have the right to declare an Event of Default under
this Plan and to accelerate all payments due on Allowed Class 3 Claims pursuant
to the Plan or the Note, PROVIDED, HOWEVER, that the PCC shall provide the
Company with at least fourteen (14) days' written notice, by certified mail, of
a hearing to be conducted by the Bankruptcy Court to determine whether such
acceleration should be approved to Jay Jacobs, Inc. (Attn: William L. Lawrence,
Jr.), 1530 Fifth Avenue, Seattle, WA 98101, with a copy to Bogle & Gates
P.L.L.C. (Attn: Mark Charles Paben), Two Union Square, 601 Union Street,
Seattle, WA 98101. In any event, no such acceleration shall take effect until
the order approving the acceleration becomes a Final Order.
THE PROVISIONS OF THIS ARTICLE XIII IN NO WAY LIMIT OR RESTRICT THE RIGHTS OF
ANY INDIVIDUAL ALLOWED CLAIM HOLDER TO EXERCISE ANY RIGHTS TO ACCELERATE OR
ENFORCE PAYMENT OBLIGATIONS OR OTHER RIGHTS WITH RESPECT TO ITS CLAIM OR NOTE.
SEE ARTICLE XIV(J) HEREIN.
ARTICLE XIV -- RETENTION OF JURISDICTION
Notwithstanding confirmation, until the entry of a Final Decree closing
the Case, the Court shall retain jurisdiction to ensure that the purposes and
intent of this Plan are carried out. Without limiting the generality of the
foregoing, the Court shall retain jurisdiction for the following purposes:
A. The classification or allowability of the Claim of any creditor, the
reexamination of the Claims which have been allowed for the purposes of voting,
and the resolution of any objections to Claims filed by the Debtor;
B. The determination of the secured status of any claim holder pursuant
to the provisions of Section 506 of the Code;
C. The determination of any contested matters or adversary proceedings
pending prior to the Date of Confirmation, or
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 23
<PAGE>
initiated thereafter, including but not limited to the enforcement and
collection of judgments entered in favor of the Estate;
D. The approval of any settlements of claims by the Reorganized Debtor
pursuant to the Plan;
E. The correction of any defect, the curing of any omission, the
reconciliation of any inconsistency in the Plan or
the Confirmation Order as may be necessary to carry out the purpose of the Plan;
F. The determination of all disputes arising under the Plan (including,
but not limited to, defaults, if any) or regarding title to the property of the
Reorganized Debtor;
G. The issuance of any order necessary to implement the Plan or
Confirmation Order, including, without limitation, such declaratory and
injunctive orders as are appropriate to protect the Debtor, the Estate, and the
Reorganized Debtor from the actions of creditors or other parties-in-interest;
H. The modification of the Plan after confirmation pursuant to the Code
and Bankruptcy Rules;
I. The determination of requests for payment of claims entitled to
priority under Section 507(a)(1) of the Code, including compensation to
Professional Persons, and of requests for payment of claims for fees, costs,
and charges under Section 506(b) of the Code;
J. The enforcement of any terms of the Note(s) or payment obligations or
other provisions under the Plan;
K. The determination of whether all payments due on Allowed Class 3
Claims may be accelerated pursuant to Article XIII(B) of the Plan; and
L. The entry of a Final Decree closing the Case.
ARTICLE XV - ENTRY OF CLOSING ORDER BY THE BANKRUPTCY COURT
The Bankruptcy Court, subject to approval, shall enter an order
concluding and terminating the Case upon application of the Reorganized Debtor.
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 24
<PAGE>
DATED this 16TH day of November, 1995.
JAY JACOBS, INC.
By: /s/ Rex Loren Steffey
-----------------------------
Rex Loren Steffey
Its President/Chief Executive
Officer
DEBTOR'S SECOND AMENDED CHAPTER 11
PLAN OF REORGANIZATION - 25
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LEASES TO BE ASSUMED
1. The leases dated April 16, 1965, December 23, 1974, December 31, 1975,
and January 25, 1980, and the modifications and extensions thereto, with The
Bank of California, N.A., trustee under the will of James B. O'Shea, Jr., as
lessor, of premises located at 1530 Fifth Avenue, Seattle, Washington, commonly
called the O'Shea Building, consisting of retail and office space, including the
premises known as Stores Nos. 1 and 66, the term of which expires on February
28, 2001.
2. The lease dated October 7, 1992 with the Southcenter Joint Venture, as
lessor, of premises located at 707 Southcenter Mall, Tukwila, Washington, known
as Store No. 6, the term of which expires on January 31, 2003.
3. The lease dated July 31, 1981 with Bellevue Square Managers, Inc., as
lessor, of premises located at 163 Bellevue Square, Bellevue, Washington, known
as Store No. 7, the term of which expires on February 29, 1996.
4. The lease dated February 1, 1984 with Bellevue Square Managers, Inc.,
as lessor, of premises located at 190 Bellevue Square, Bellevue, Washington,
known as Store No. 9, the term of which expires on February 29, 1996.
5. The lease dated January 2, 1985 with Carr Gottstein Properties, an
Alaska general partnership, successor-in-interest to Anchorage Shopping Center,
as lessor of premises located at 600 East Northern Lights Blvd., Anchorage,
Alaska, known as Store No. 10 (the "Anchorage Shopping Center Women's Store
Lease"), which is a month-to-month tenancy. The Debtor's assumption of the
Anchorage Shopping Center Women's Store Lease is subject to the entry of an
order herein, on or before the Effective Date of the Plan, approving the First
Amendment to Retail Lease to be entered into by the Debtor and Carr Gottstein
Properties, which will extend the Lease until February 28, 1997.
6. The lease dated May 7, 1993 with Yakima Mall Shopping Center
Corporation, as lessor, of premises located at 2028 Yakima Mall, Yakima,
Washington, known as Store No. 11, the term of which expires on July 31, 2000.
7. The lease dated July 20, 1983, with Bentley Mall Associates, as
lessor, of premises located at Bentley Mall, Space 8/9, 32 College Road,
Fairbanks, Alaska, known as Store No. 12 (the "Bentley Mall Lease"), the term of
which expires on February 28, 2001. The Debtor's assumption of the Bentley Mall
Lease is subject to the entry of an order herein, on or before the Effective
Date of the Plan, approving the First Amendment to Lease dated July 25, 1995 by
and between the Debtor and Bentley Mall Associates.
8. The lease dated December 5, 1983, as amended by the First Amendment to
Lease Agreement dated November 11, 1994, approved by order entered herein on
July 28, 1995, with East Ridge Development Company, Ltd., as lessor, of premises
located at Eastridge Mall, 601 Wyoming Blvd., Casper, Wyoming, known as Store
No. 15, the term of which expires on January 31, 1995.
9. The lease dated July 27, 1991, as extended by the Lease Extension
Agreement dated December 7, 1992, with 4M2B, an Alaska general partnership, as
lessor, of premises located
EXHIBIT B - PAGE 1
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at Peninsula Mall, 44332 Sterling Highway, No. 42, Soldotna, Alaska, known as
Store No. 17, the term of which expires on January 31, 2001.
10. The lease dated January 9, 1984, as amended by the First Amendment to
Lease dated March 7, 1995, approved by order entered herein on May 2, 1995, with
Equiteton Associates, successor in-interest to Grand Teton Development Company,
as lessor, of premises located at Grand Teton Mall, 2300 East 17th Street, Idaho
Falls, Idaho, known as Store No. 18, the term of which expires on January 31,
1996.
11. The lease dated September 29, 1989, as amended by the First Amendment
to Lease dated March 8, 1995, approved by order entered herein on May 2, 1995,
with Winmar Cascade, Inc., as lessor, of premises located at Cascade Mall, Space
A9, 740 Cascade Mall Drive, Burlington, Washington, known as Store No. 20, the
term of which expires on January 31, 2001.
12. The lease dated November 8, 1975, with Daniel A. Duryee, Jr., Marjorie
A. Duryee and Clotilde D. Freeman, successors-in-interest to Clotilde R. Duryee,
a widow; Henry Charles Bartlett, individually and as trustee of the estate of
Belle B. Bartlett; Marion Virginia Harrington, co-trustee u/w of Eugene C.
Metzger and co-trustee u/w of Beatrice Metzger, and Everett Trust & Savings
Bank, co-trustee u/w of Eugene C. Metzger and co-trustee u/w of Beatrice
Metzger; M. Madeleine Metzger, a widow, Harry B. Metzger and Jeanne Metzger,
husband and wife, and Edward M. Nollmeyer and Pauline M. Nollmeyer, husband and
wife, as lessor, as extended by lease extension agreements dated November 20,
1979 and December 21, 1983, of premises located at 2814 Colby, Everett,
Washington, known as Store No. 23, which is a month-to-month tenancy.
13. The lease and Lease addendum dated April 27, 1976, with WVM Partners,
Ltd., successor-in-interest to Eastmont Enterprises, as lessor, of premises
located at Wenatchee Valley Mall, 511 Valley Mall Parkway, East Wenatchee,
Washington, known as Store No. 24, the term of which expires February 28, 1996.
14. The lease dated September 11, 1991, as amended by Addendum to Lease
Agreement dated February 6, 1995, approved by order entered on August 18, 1995,
with Hickel Investment Company, d/b/a University Center, as lessor, of premises
located at University Center, 3901 Old Seward Highway, No. 3, Anchorage, Alaska,
known as Store No. 25, the term of which expires January 31, 2002.
15. The lease dated June 13, 1978, as amended, including the Lease
Modification Agreement dated November 7, 1994, approved by order entered
December 16, 1994, with Titantic Associates, as lessor, of premises located at
1402 SE Everett Mall, Everett, Washington, known as Store No. 31, the term of
which expires September 30, 2003.
16. The lease dated May 22, 1990 with Palouse Empire Mall Associates, as
lessor, of premises located at Palouse Empire Mall, 2108 Pullman Road, Moscow,
Idaho, known as Store No. 32, the term of which expires January 31, 2000.
17. The lease dated October 26, 1993, as amended by First Amendment to
Lease dated January 10, 1995, approved by order entered herein on March 13,
1995, with Tristate Joint Venture, as lessor, of premises located at Salem
Centre, 480 Center Street NE, Salem Oregon, known as Store No. 37, the term of
which expires on April 30, 2003.
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18. The lease dated May 1, 1980 with Totem Shopping Center Associates, as
lessor, of premises located at Totem Lake Shopping Center, 12613 Totem Lake
Blvd., Kirkland, Washington, known as Store No. 39, the term of which expires
January 31, 1996.
19. The lease dated April 25, 1980 with Pony Village Properties Limited
Partnership of premises located at the Pony Village Shopping Center, 1601
Virginia Avenue, North Bend, Oregon, known as Store No. 40, the term of which
expires January 31, 1996.
20. The lease dated September 6, 1992, as amended by the First Amendment
to Lease Agreement dated December 31, 1993, with Clackamas Associates Limited
Partnership, as lessor, of premises located at Clackamas Town Center, 12000 S.E.
82nd Street, Suite 2193, Space E-9, Portland, Oregon, known as Store No. 42, the
term of which expires January 31, 2003.
21. The lease dated February 12, 1981 with Norcrest China Company, as
lessor, as renewed pursuant to letter dated August 21, 1995 from the Debtor to
H. Naito Properties exercising the Debtor's five year renewal option, of
premises located at the Galleria 921 S.W. Morrison Street, Portland, Oregon,
known as Store No. 43, the term of which expires on February 28, 2001, as a
result of the renewal.
22. The lease dated June 18, 1981 with Watercress Associates - Joint
Venture 315089, successor-in-interest to Pearl Ridge Mall - Joint Venture
315068, as lessor, of premises located at 213 Pearl Ridge Shopping Center, Aiea,
Oahu, Hawaii, known as Store No. 45, the term of which expires July 31, 1996.
23. The lease dated April 15, 1981 with South Shore Partners, successor-
in-interest to General Growth Development Corporation, as lessor, of premises
located at Southshore Mall, 1017 Boone, Aberdeen, Washington, known as Store
No. 46, the term of which expires January 31, 1997.
24. The lease dated September 21, 1981, as amended, including the Third
Amendment to Lease dated February 1, 1995, approved by order entered on February
6, 1995 with Anita McGill, as lessor, of premises located at Beaverton Town
Square, 11765 S.W. Beaverton-H Highway, Beaverton, Oregon, known as Store
No. 48, the term of which expires January 31, 1996.
25. The lease dated September 15, 1981, as amended, with Northway
Associates Limited Partnership, successor-in-interest to Glen Mall Associates,
as lessor, of premises located at Northway Mall, 3101 Penland Parkway,
Anchorage, Alaska, known as Store No. 49 (the "Northway Mall Lease"), the term
of which expires February 28, 1997. The Debtor's assumption of the Northway
Mall Lease is subject to the entry of an order herein, on or before the
Effective Date of the Plan, approving the Second Amendment to Lease dated July
26, 1995, by and between the Debtor and Northway Associates Limited Partnership.
26. The lease dated May 12, 1993 with Price Financing Partnership L.P.,
successor-in-interest to Pine Ridge Development Company Ltd., as lessor, as
amended, including the Second Amendment to Lease dated December 16, 1994,
approved by order entered March 13, 1995, of premises located at Pine Ridge
Mall, 4155 Yellowstone Highway, Chubbuck Idaho, known as Store No. 50, the term
of which expires January 31, 1996.
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27. The lease dated December 2, 1992 with Rodney K. Haynes, as lessor, of
premises located at Towne Square Mall, 504 Main Street, Lewiston, Idaho, known
as Store No. 51, the term of which expires January 31, 1998.
28. The lease dated February 9, 1982, with EMI Santa Rosa Limited
Partnership, successor-in-interest to Santa Rosa Associates, as lessor, as
amended by Modification of Lease dated January 27, 1995, approved by order dated
March 13, 1995, of premises located at Santa Rosa Plaza, No. B-165, Santa Rosa,
California, known as Store No. 52, the term of which expires January 31, 1996.
29. The lease dated February 25, 1987 with West Coast Freeholds,
successor-in-interest to Valley River Center, as lessor, as amended by Amendment
dated October 1, 1994, approved by order entered February 6, 1995, of premises
located at 480 Valley River Center, Eugene, Oregon, known as Store No. 53, the
term of which expires January 31, 1998.
30. The lease, and riders to lease, dated August 19, 1982, as amended,
with Dimond Center, Ltd., as lessor, of premises located at Dimond Center, 800
E. Dimond Blvd., No. 210, Anchorage, Alaska, known as Store No. 57, the term of
which expires September 30, 1997.
31. The lease dated September 16, 1982 with Gelsar, a California Limited
Partnership, successor-in-interest to Gelsar, Incorporated, as lessor, as
amended by Relocation Agreement dated April 18, 1995, approved by order entered
August 18, 1995, of premises located at Serramonte Center, Space D340, Daly
City, California, known as Store No. 59, the term of which expires January 31,
1996.
32. The lease dated August 8, 1989, as amended, including the Second
Amendment to Lease, dated July 13, 1995, approved by order entered herein on
September 8, 1995, with Bay Fair L.L.C., successor-in-interest to Westland Bay
Fair Mall, L.P., as lessor, of premises located at Bay Fair Mall, 116 Bay Fair
Drive, San Leandro, California, known as Store No. 63 (the "Bay Fair Mall
Women's Store Lease"). The Debtor's assumption of the Bay Fair Mall Women's
Store Lease is subject to entry of an order herein on or before the Effective
Date of the Plan approving the Third Amendment to Lease entered into by and
between the Debtor and Bay Fair L.L.C.
33. The lease dated May 7, 1993 with Yakima Mall Shopping Center
Corporation of premises located at 1075 Yakima Mall, Yakima, Washington, known
as Store No. 65, (the "Yakima Mall Lease") the term of which expires February
28, 1997. The Debtor's assumption of the Yakima Mall Lease is subject to the
entry of an order herein, on or before the Effective Date of the Plan, approving
the First Amendment to Lease Agreement dated July 26, 1995 by and between the
Debtor and Yakima Mall Shopping Center Corporation.
34. The lease dated June 7, 1983, as amended, with Gateway West Shopping
Center Associates, as lessor, of premises located at Gateway West Shopping
Center, 1203 Highway 2 West, No. 21, Kalispell, Montana, known as Store No. 69,
the term of which expires January 31, 2001.
35. The lease dated November 11, 1983, as amended, including the Lease
Modification Agreement dated November 14, 1994, approved by order entered
December 16, 1994, with C. E. Loveless and Barclay Tollefson, as lessor, of
premises located at Nugget Mall, 8745
EXHIBIT B - PAGE 4
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Glacier Highway, No. 245, Juneau, Alaska, known as Store No. 72, the term of
which expires January 31, 1999.
36. The lease dated April 2, 1986, as amended, with Northern Trust Bank of
California, N.A., successor-in-interest to Manhattan Beach Commercial
Properties, as lessor, of premises located at Manhattan Village, 3200 Sepulveda
Blvd., C14, Manhattan Beach, California, known as Store No. 73 (the "Manhattan
Village Women's Store Lease"), the term of which expires January 31, 1997. The
Debtor's assumption of the Manhattan Village Women's Store Lease is subject to
entry of an order herein, on or before the Effective Date of the Plan, approving
the Third Amendment of Lease to be entered into by and between the Debtor and
Northern Trust Bank of California, N.A., in its capacity as special trustee
under trust no. 22-81962.
37. The lease dated February 25, 1986 with University City, Inc., as
lessor, of premises located at 349 University City, Spokane, Washington, known
as Store No. 83 (the "University City Lease"), the term of which expires May 31,
1996 and is being extended to January 31, 1997 pursuant to the Amendment. The
Debtor's assumption of the University City Lease is subject to entry of an order
herein, on or before the Effective Date of the Plan, approving the Amendment to
Lease to be entered into by and between the Debtor and University City, Inc.
38. The lease dated July 27, 1984, as amended by Amendment Number One
dated October 27, 1994, approved by order entered February 6, 1995, with Eagle
Properties Limited Partnership, as lessor, of premises located at Cottonwood
Creek Mall, 1800 Parks Highway, D-06, Wasilla, Alaska, known as Store No. 100,
the term of which expires December 31, 1996.
39. The lease dated March 8, 1985, as amended by the Lease Modification
Agreement dated December 15, 1994, approved by order entered February 6, 1995,
with Citizens Realty Company, as lessor, of premises located at River Park
Square, West 714 Main Avenue, Spokane, Washington, known as Store No. 102, the
term of which expires February 28, 1996.
40. The lease dated May 15, 1985, as amended, including by amendment dated
March 8, 1985, approved by order entered May 2, 1995, with Kitsap Associates
Limited Partnership, successor-in-interest to Winmar of Kitsap, Inc., of
premises located at Kitsap Mall, 10315 Silverdale way N.E., Silverdale,
Washington, known as Store No. 103, the term of which expires January 31, 1996.
41. The lease dated December 4, 1986, as amended, with Carr Gottstein
Properties, successor-in-interest to Anchorage Shopping Center, as lessor, of
premises located at Anchorage Mall, 600 East Northern Lights Blvd., Anchorage,
Alaska, known as Store No. 111 (the "Anchorage Mall Fashion Direction Lease"),
the term of which expires on July 31, 1996. The Debtor's assumption of the
Anchorage Mall Fashion Direction Lease is subject to entry of an order herein,
on or before the Effective Date of the Plan, approving the Second Amendment to
Retail Lease to be entered into by and between the Debtor and Carr Gottstein
Properties, extending the lease to February 28, 1997.
42. The lease dated June 9, 1986, as amended, with Dimond Center, Ltd., as
lessor, of premises located at Dimond Center, 800 East Dimond Center Blvd., No.
3140, Anchorage, Alaska, known as Store No. 112, the term of which expires on
September 30, 1996.
EXHIBIT B - PAGE 5
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43. The lease dated August 14, 1986 with Kalispell Center Limited
Partnership, as lessor, of premises located at Kalispell Center Mall, North 20
Main, Kalispell, Montana, known as Store No. 113, the term of which expires
February 28, 1997.
44. The lease dated September 15, 1980 between Emporium West, as lessee,
and Harry M. Daum and Kathleen Mary Ellen Daum, as lessor, assigned to the
Debtor, as lessee, on October 10, 1986, as amended, including by Amendment to
Lease dated April 5, 1995 with Robert H. Copple, executor of the estate of Harry
M. Daum, approved by order entered May 2, 1995, of premises located at the Main
Mall, 2825 West Main, Bozeman, Montana, known as Store No. 115, the term of
which expires October 31, 2000.
45. The lease dated March 17, 1986, as amended, with Fund A Rogue Valley,
Inc., successor-in-interest to Rogue Valley Mall Development Company, as lessor,
of premises located at the Rogue Valley Mall, 1600 North Riverside, Medford,
Oregon, known as Store No. 116, the term of which expires January 31, 2002.
46. The lease dated September 16, 1986, and Addendum thereto dated October
8, 1986, with The Hames Group, as lessor, of premises located at Plaza Port
West, 2417 Tongass Street, UL9, Ketchikan, Alaska, known as Store No. 118, the
term of which expires January 31, 1997.
47. The lease dated July 14, 1977 between Fred McCaulou and Jean McCaulou,
d/b/a Oak Bay Clothing Company, as lessee, and Norman Scheiner, successor-in-
interest to EFEM Company, as lessor, assigned to the Debtor, as lessee, on
February 1, 1987, as amended, of premises located at Gresham Village, 2424-26
East Burnside Drive, Gresham, Oregon, known as Store No. 120, which is a month-
to-month tenancy.
48. The lease dated September 15, 1986 with David L. Hyman, d/b/a Center
Properties, as lessor, of premises located at Butte Plaza, 3100 Harrison Avenue,
Butte, Montana, known as Store No. 122, the term of which expires January 31,
1997.
49. The lease dated February 27, 1987, as amended, with Price Financing
Partnership, L.P., successor-in-interest to Kelso Mall Development Company, as
lessor, of premises located at Three Rivers Mall, 351 Three Rivers Drive, Kelso,
Washington, known as Store No. 127, the term of which expires January 31, 2002.
50. The lease dated July 9, 1987, as amended, with Melvin Simon and
Associates/Anchorage, successor-in-interest to Anchorage Fifth Avenue
Associates, as lessor, of premises located at Anchorage Fifth Avenue, 320 West
Fifth Avenue, No. 254, Anchorage, Alaska, known as Store No. 129, the term of
which expires January 31, 1998.
51. The lease dated July 9, 1987, as amended, with Melvin Simon and
Associates/Anchorage, successor-in-interest to Anchorage Fifth Avenue
Associates, as lessor, of premises located at Anchorage Fifth Avenue, 320 West
Fifth Avenue, No. 208, Anchorage, Alaska, known as Store No. 130, the term of
which expires January 31, 1998.
52. The lease dated September 3, 1987, as amended, including by Amendment
No. 2 to Factoria Square Lease dated February 1, 1995, approved by order entered
July 28, 1995, with Factoria Square Limited Partnership, as lessor, of premises
located at Factoria Square, 4065
EXHIBIT B - PAGE 6
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128th Avenue S.E., Bellevue, Washington, known as Store No. 143, the term of
which expires January 31, 1998.
53. The lease dated June 15, 1988 with Crossroads Plaza Associates, as
lessor, of premises located at Crossroads Plaza, 50 South Main, No. 2A15, Salt
Lake City, Utah, known as Store No. 145 (the "Crossroads Plaza Lease"), the term
of which expires January 31, 1999. The Debtor's assumption of the Crossroad
Plaza Lease is subject to entry of an order herein, on or before the Effective
Date of the Plan, approving the First Amendment to Lease to be entered into by
and between the Debtor and Crossroads Plaza Associates.
54. The lease dated February 26, 1988, as amended, including by Second
Amendment to Lease dated June 15, 1995, approved by order entered July 28, 1995,
with Cordano Associates and Sunrise Mall Associates, as lessor, of premises
located at 5921 Sunrise Mall, Citrus Heights, California, known as Store
No. 150, the term of which expires January 31, 1999.
55. The lease dated November 25, 1987, as amended, with Bellis Fair
Partners, successor-in-interest to Bellis Fair Limited Partnership, as lessor,
of premises located at Bellis Fair, 1 Bellis Fair Parkway, No. 350, Bellingham,
Washington, known as Store No. 155, the term of which expires January 31, 1999.
56. The lease dated June 15, 1988, as amended by First Amendment to Lease
dated January 12, 1989, and Second Amendment to Lease dated June 15, 1995,
approved by order entered herein on July 20, 1995, with Chico Mall Associates,
as lessor, of premises located at the Chico Mall, 1950 East 20th Street, D-409,
Chico, California, known as Store No. 156, the term of which expires on January
31, 1999.
57. The lease dated June 15, 1988, as amended by First Amendment to Lease
dated January 12, 1989, and Second Amendment to Lease Dated June 15, 1995,
approved by order entered herein on July 20, 1995, with Chico Mall Associates,
as lessor, of premises located at Chico Mall, 1950 East 20th Street, D-407,
known as Store No. 157, the term of which expires on January 31, 1999.
58. The lease dated August 24, 1988, as amended, with Price Financing
Partnership L.P., successor-in-interest to Boise Mall Development Company, as
lessor, of premises located at Boise Towne Square, 350 North Milwaukee, No.
1101, Boise, Idaho, known as Store No. 162, the term of which expires January
31, 1999.
59. The lease dated November 2, 1988 with Capitola Mall Associates, as
lessor, of premises located at Capitola Mall, 1855 41st Avenue, Space H-4,
Capitola, California, known as Store No. 163, the term of which expires January
31, 1999.
60. The lease dated June 15, 1988, as amended, including by the Third
Amendment to lease dated June 15, 1995, approved by order entered July 28, 1995,
with Heritage Mall Associates, as lessor, of premises located at Heritage Mall,
2137 14th Ave. S.E., Albany, Oregon, known as Store No. 164, the term of which
expires January 31, 1999.
61. The lease dated July 22, 1988, as amended by Lease Modification
Agreement dated November 11, 1994, approved by order entered herein on March 13,
1995, with Frontier Mall Associates, L.P. of premises located at Frontier Mall,
1400 Del Range Blvd., No. 44, Cheyenne, Wyoming, known as Store No. 165, the
term of which expires on January 1, 1999.
EXHIBIT B - PAGE 7
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62. The lease dated April 27, 1988 with Capital Hill Mall Partnership, as
lessor, of premises located at Capital Hill Mall, 1600 11th Avenue, No. 240,
Helena, Montana, known as Store No. 167 (the "Capital Hill Mall Women's Store
Lease"), the term of which expires January 31, 1999. The Debtor's assumption of
the Capital Hill Mall Women's Store Lease is subject to entry of an order
herein, on or before the Effective Date of the Plan, approving the Lease
Amendment to be entered into by and between the Debtor and Capital Hill Mall
Partnership.
63. The lease dated August 25, 1988, as amended by Lease Amendment dated
September 1, 1994, approved by order entered herein on February 6, 1995, between
the Debtor, as lessee, and Cafaro Northwest Partnership, f/k/a South Hill
Company, as lessor, of premises located at South Hill Mall, 3500 South Meridian,
no. 320, Puyallup, Washington, known as store no. 169. The Debtor's assumption
of the South Hill Mall Lease is subject to entry of an order herein on or before
the Effective Date of the Plan approving the Lease Amendment - No. 2 entered
into by and between the Debtor and Cafaro Northwest Partnership.
64. The lease dated June 1, 1989, as amended by the First Amendment to
Lease dated June 15, 1995, approved by order entered July 28, 1995, with Silver
Lake Mall, Ltd., as lessor, of premises located at Silver Lake Mall, 200 West
Hanley Ave., D-409, Coeur d'Alene, Idaho, known as Store No. 170, the term of
which expires January 31, 2000.
65. The lease dated May 4, 1989, and the Supplemental
Utility/Environmental Agreement dated October 30, 1989, with Corporate Property
Investors, as lessor, of premises located at 2055 Brea Mall, Brea, California,
known as Store No. 173 (the Brea Mall Men's Store Lease"), the term of which
expires February 28, 2000. The Debtor's assumption of the Brea Mall Men's Store
Lease is subject to the entry of an order herein, on or before the Effective
Date of the Plan, approving the First amendment to Lease dated August 24, 1995
by and between the Debtor and Corporate Property Investors.
66. The lease dated June 1, 1989, as subsequently amended pursuant to the
Lease Modification Agreement dated October 11, 1994, approved by order entered
December 16, 1994, with Walla Walla Shopping Center Associates, as lessor, of
premises located at Blue Mountain Mall, 1631 West Rose Street, No. 517, Walla
Walla, Washington, known as Store No. 174, the term of which expires January 31,
2000.
67. The lease dated December 15, 1989, as amended by First Amendment to
Lease dated December 27, 1994 with Arden Fair Associates, L.P., successor-in-
interest to Arden Fair Associates, of premises located at 1689 Arden Fair Mall,
Space No. 2116, Sacramento, California, known as Store No. 175, the term of
which expires January 31, 2000.
68. The lease dated November 7, 1989, as amended by First Amendment of
Lease dated April 27, 1990, with D/E Hawaii Joint Venture, as lessor, of
premises located at the Ala Moana Shopping Center, 1450 Ala Moana Blvd., No.
2015, Honolulu, Hawaii, known as Store No. 181, the term of which expires on
November 30, 1996.
69. The lease dated August 21, 1989, as amended, including the Second
Amendment to Lease dated July 13, 1995, approved by order entered herein on
September 8, 1995, with Vallco L.L.C., successor-in-interest to Westland
Shopping Center L.P., as lessor, of premises located at Vallco Fashion Park,
10123 North Wolfe Road, #2112, Cupertino, California, known as Store No. 184.
The Debtor's assumption of the Vallco Fashion Park Store Lease is subject to
EXHIBIT B - PAGE 8
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entry of an order herein on or before the Effective Date of the Plan approving
the Third Amendment to Lease entered into by and between the Debtor and Vallco
L.L.C.
70. The lease dated August 21, 1989, as amended, including the Second
Amendment to Lease dated July 13, 1995, approved by order entered herein on
September 8, 1995, with Vallco L.L.C., successor-in-interest to Westland
Shopping Center L.P., as lessor, of premises located at Vallco Fashion Park,
10123 North Wolfe Road, #2027, Cupertino, California, known as Store No. 185.
The Debtor's assumption of the Vallco Fashion Park Store Lease is subject to
entry of an order herein on or before the Effective Date of the Plan approving
the Third Amendment to Lease entered into by and between the Debtor and Vallco
L.L.C.
71. The lease dated May 11, 1990 with Madison Joint Venture, as lessor, of
premises located at 207 West Towne Mall, Madison, Wisconsin, known as Store
No. 197 (the "West Towne Mall Women's Store Lease"), the term of which expires
January 31, 2001. The Debtor's assumption of the West Towne Mall Women's Store
Lease is subject to entry of an order herein, on or before the Effective Date of
the Plan, approving the First Amendment to Lease to be entered into by and
between the Debtor and Madison Joint Venture.
72. The lease dated July 16, 1990 with Madison Joint Venture, as lessor,
of premises located at 161 East Towne Mall, Madison, Wisconsin, known as Store
No. 200 (the East Towne Mall Women's Store Lease"), the term of which expires
January 31, 2001. The Debtor's assumption of the East Towne Mall Women's Store
Lease is subject to entry of an order herein, on or before the Effective Date of
the Plan, approving the First Amendment to Lease to be entered into by and
between the Debtor and Madison Joint Venture.
73. The lease dated August 10, 1990, and related Agreements dated April
18, 1991 and May 10, 1991, with S-I Lloyd Associates Limited Partnership, of
premises located at 968 Lloyd Center, Portland, Oregon, known as Store No. 203
(the Lloyd Center Women's Store Lease"), the term of which expires January 31,
2001. The Debtor's assumption of the Lloyd Center Women's Store Lease is
subject to entry of an order herein, on or before the Effective Date of the
Plan, approving the Amendment to Lease to be entered into by and between the
Debtor and SI-Lloyd Associates Limited Partnership.
74. The lease dated August 28, 1990, as amended, including by the
Supplemental Lease Agreement dated March 15, 1995, approved by order dated May
2, 1995, with Simon Property Group L.P., successor-in-interest to Lincolnwood
Associates, as lessor, of premises located at Lincolnwood Towne Center, 3333
West Touhy Avenue, D8, Lincolnwood, Illinois, known as Store No. 205, the term
of which expires January 31, 2001.
75. The lease dated August 28, 1990, as amended, including by the
Supplemental Lease Agreement dated March 15, 1995, approved by order entered May
2, 1995, with Simon Property Group L.P., as lessor, of premises located at
Lincolnwood Towne Center, 3333 West Touhy Ave., H9, Lincolnwood, Illinois, known
as Store No. 206, the term of which expires January 31, 2001.
76. The lease dated August 21, 1990, as amended by Amendment to Lease
dated December 7, 1993, with Charles A. Ratner, Trustee ("Ratner") and Richard
B. Buchholzer, Trustee ("Buchholzer"), as lessor, as amended by Lease Amendment
dated March 24, 1995, approved by order entered herein on May 2, 1995, with
Chapel Hill Properties Co., successor-in-interest to
EXHIBIT B - PAGE 9
<PAGE>
Ratner and Buchholzer, as lessor, of premises located at Chapel Hill Mall, 2000
Brittain Road, Suite 950, Akron, Ohio, known as Store No. 214, the term of which
expires on January 31, 2001.
77. The lease dated October 24, 1990, as amended by Lease Amendment dated
March 15, 1995, approved by order entered June 20, 1995, with Rolling Acres
Properties Co. Limited Partnership, successor-in-interest to Charles A. Ratner,
Trustee, as lessor, of premises located at Rolling Acres Mall, 2400 Romig Road,
Akron, Ohio, known as Store No. 215, the term of which expires on January 31,
2002.
78. The lease dated October 9, 1991 with the Dimond Center, Ltd., as
lessor, of premises located at Dimond Center, 800 East Dimond Center Blvd., No.
213, Anchorage, Alaska, known as Store No. 219, the term of which expires
September 10, 1995.
79. The lease dated September 11, 1991 with Hickel Investment Company, as
lessor, as amended by Addendum to Lease Agreement dated February 6, 1995,
approved by order entered herein on August 18, 1995, of premises located at
University Center, 3901 Old Seward Highway, 15E, Anchorage, Alaska, known as
Store No. 218. The Debtor's assumption of the University Center Store Lease is
subject to entry of an order herein on or before the Effective Date of the Plan
approving the Second Addendum to Lease entered into by and between the Debtor
and Hickel Investment Company.
80. The lease dated June 19, 1990, as amended by the Lease Modification
Agreement dated October 14, 1994, approved by order entered December 16, 1994,
with Center Developments Oregon, Ltd., as lessor, of premises located at
Beaverton Mall, No. 8, 3275 S.W. Cedar Hills Blvd., Beaverton, Oregon, known as
Store No. 224, the term of which expires January 31, 2001.
81. The lease dated February 5, 1991, as amended by Addendum to Lease
Agreement dated February 6, 1995, approved by order entered August 18, 1995,
with Hickel Investment Company, as lessor, of premises located at Valley River
Center, 12001 Business Blvd., Eagle River, Alaska, known as Store No. 225, the
term of which expires January 31, 1996.
82. The lease dated October 1, 1990, as amended by the Lease Amendment
dated September 1, 1994, approved by order entered herein February 6, 1995,
between the Debtor, as lessee, and Cafaro Northwest Partnership, f/k/a South
Hill Company, as lessor, of premises located at South Hill Mall, 3500 South
Meridian Avenue, no. 330, Puyallup, Washington, known as store no. 227. The
Debtor's assumption of the South Hill Mall Lease is subject to entry of an order
herein on or before the Effective Date of the Plan approving the Lease Amendment
No. - 2 entered into by and between the Debtor and Cafaro Northwest Partnership.
83. The lease dated January 7, 1991, as amended by Amendment to Lease
dated April 1, 1995, approved by order entered July 20, 1995, with The Hames
Group, as lessor, of premises located at Plaza Port West, 2417 Tongass Street,
LL119A, Ketchikan, Alaska, known as Store No. 233, the term of which expires
January 31, 2002.
84. The lease dated January 24, 1991, as amended, with Atlantic Freeholds
II, as lessor, of premises located at 2146 Town East Mall, Mesquite, Texas,
known as Store No. 236, the term of which expires January 31, 2001.
EXHIBIT B - PAGE 10
<PAGE>
85. The lease dated November 16, 1988, between Maurices Incorporated, as
lessee, and Dakota Square Limited Partnership, as lessor, assigned to the
Debtor, as lessee, on June 9, 1992, of premises located at Dakota Square, 2400 -
10th Street SW, No. 600, Minot, North Dakota, known as Store No. 238, the term
of which expires on January 31, 2000 (the "Dakota Square Women's Store Lease").
The Debtor's assumption of the Dakota Square Women's Store Lease is subject to
the entry of an order herein, on or before the Effective date of the Plan,
approving the amendment to such Lease to be entered into by and between the
Debtor and the Dakota Square Limited Partnership.
86. The lease dated September 25, 1991, and Addendum thereto dated
December 12, 1991 with Bentley Mall Associates, as lessor, of premises located
at Bentley Mall, 32 College Road, Space 12, Fairbanks, Alaska, known as Store
No. 240, the term of which expires February 28, 2002.
87. The lease dated June 4, 1991, as amended by Supplemental Lease
Agreement dated March 15, 1995, approved by order entered May 8, 1995, with
Northwestern Simon, Inc., successor-in-interest to Anchorage Fifth Avenue
Associates, as lessor, of premises located at Anchorage Mall, 320 West Fifth
Avenue, No. 260, Anchorage, Alaska, known as Store No. 241, the term of which
expires January 31, 2002.
88. The lease dated July 26, 1991 with Vancouver Mall, as lessor, of
premises located at the Vancouver Mall, 5001 N.E. Thurston Way, No. 131,
Vancouver, Washington, known as Store No. 243 (the "Vancouver Mall Lease"), the
term of which expires January 31, 2001. The Debtor's assumption of the
Vancouver Mall Lease is subject to entry of an order herein, on or before the
Effective Date of the Plan, approving the First amendment to Lease Agreement
entered into by and between the Debtor and Vancouver Mall.
89. The lease dated January 23, 1992 with HO Retail Properties I Limited
Partnership of premises located at 520 Prince Kuhio Plaza, 111 East Puainako,
Hilo, Hawaii, known as Store No. 245, the term of which expires January 31,
2002.
90. The lease dated January 12, 1987 between Bruce T. and Marie E. Guyer,
as lessee, and Watercress Associates-Joint Venture 315089, successor-in-interest
to Watercress Associates, as lessor, assigned to the Debtor, as lessee, on
January 31, 1992 of premises located at Pearl Ridge Shopping Center, Phase II,
No. 24-06, Aiea, Oahu, Hawaii, known as Store No. 247 (the "Pearl Ridge Shopping
Center Fashion Direction Lease"), the term of which expires January 31, 1998.
The Debtor's assumption of the Pearl Ridge Shopping Center Fashion Direction
Lease is subject to entry of an order herein, on or before the Effective Date of
the Plan, approving the Amendment to Lease Agreement dated May 19, 1995 by and
between the Debtor and Watercress Associates-Joint Venture 315089.
91. The lease dated January 27, 1987 with Metropolitan Life Insurance
Company, as lessor, of premises located at the Columbia Mall, 2800 South
Columbia Road, No. 314, Grand Forks, North Dakota, known as Store No. 249, the
term of which expires December 31, 1996.
92. The lease dated January 21, 1985, between the United States Shoe
Corporation, as lessee, and Flagstaff Mall Associates Limited Partnership,
successor-in-interest to Flagstaff Mall Associates, as lessor, assigned to the
Debtor, as lessee, on July 10, 1991, of premises located at North Highway 89,
4650-F18, Flagstaff, Arizona, known as Store No. 250, the term of which expires
December 31, 1995.
EXHIBIT B - PAGE 11
<PAGE>
93. The lease dated July 15, 1986 between The United States Shoe
Corporation, as lessee, and Westminster Mall Company, as lessor, assigned to the
Debtor, as lessee, on July 2, 1991 of premises located at Westminster Mall, 5491
West 88th Street, No. 115, Westminster, Colorado, known as Store No. 254, the
term of which expires October 31, 1996.
94. The lease dated December 13, 1983, between the United States Shoe
Corporation, as lessee, and Aetna Life Insurance Company, as lessor, assigned to
the Debtor, as lessee, on June, 26, 1991, as amended by Amendment to Lease dated
August 12, 1994, and Second Amendment to Lease, dated April 20, 1995, approved
by order entered herein on July 21, 1995, with Tristate Joint Venture,
successor-in-interest to the Aetna Life Insurance Company, of premises located
at The Citadel, 750 Citadel Drive East, No. 1132, Colorado Springs, Colorado,
known as Store No. 257, the term of which expires on December 31, 1995.
95. The lease dated September 20, 1985 between the United States Shoe
Corporation, as lessee, and Santa Rosa Venture, as lessor, assigned to the
Debtor, as lessee, on July 12, 1991, with the State of California Public
Employees' Retirement System, successor-in-interest to Santa Rosa Venture, of
premises located at Santa Rosa Mall, 300 Mary Esther Cutoff, Mary Esther,
Florida, known as Store No. 264, the term of which expires on December 31, 1998.
96. The lease dated July 8, 1986 between The United States Shoe
Corporation, as lessee, and Pensacola Associates, as lessor, assigned to the
Debtor, as lessee, on July 3, 1991, of premises located at Cordova Mall, 5100
North Ninth Avenue, Pensacola, Florida, known as Store No. 275, the term of
which expires December 31, 1998.
97. The lease dated July 3, 1986 between the United States Shoe
Corporation, as lessee, and Sarasota Mall Corporation, successor-in-interest to
Provident Life and Accident Insurance Company, as lessor, of premises located at
Sarasota Square Mall, 8201 South Tamiami Trail, Sarasota, Florida, known as
Store No. 278 (the "Sarasota Mall Women's Store Lease"), the term of which
expires September 30, 1996. The Debtor's assumption of the Sarasota Mall
Women's Store Lease is subject to entry of an order herein, on or before the
Effective Date of the plan, approving the amendment to Lease to be entered into
by and between the Debtor and Sarasota Mall Corporation.
98. The lease dated November 12, 1985 between The United States Shoe
Corporation, as lessee, and University Square Associates, as lessor, assigned to
the Debtor, as lessee, on May 13, 1991, of premises located at University Square
Mall, 2255 East Fowler Avenue, Tampa, Florida, known as Store No. 283, the term
of which expires June 30, 1996.
99. The lease dated April 2, 1986 between The United States Shoe
Corporation, as lessee, and Corporate Property Investors, as lessor, assigned to
the Debtor, as lessee, on July 1, 1991 of premises located at Lenox Square, 3393
Peachtree Road N.E., B34, Atlanta, Georgia, known as Store No. 286, the term of
which expires April 30, 1996.
100. The lease dated October 31, 1986 between The United States Shoe
Corporation, as lessee, and Bellwether Properties of Georgia Limited
Partnership, assigned to the Debtor, as lessee, on July 1, 1991, as amended by
Modification of Lease dated February, 1995, approved by order entered July 20,
1995, of premises located at Northlake Mall, No. 2044, 1501 Northlake Mall,
Atlanta, Georgia, known as Store No. 288, the term of which expires May 31,
1997.
EXHIBIT B - PAGE 12
<PAGE>
101. The lease dated June 10, 1986 between The United States Shoe
Corporation, as lessee, and Southlake Retail Venture, as lessor, assigned to the
Debtor, as lessee, on July 11, 1991, of premises located at Southlake Mall, No.
213, 1217 Southlake Mall Drive, No. 1218, Morrow, Georgia, known as Store
No. 291, the term of which expires June 30, 1996.
102. The lease dated December 21, 1984 between The United States Shoe
Corporation, as lessee, and Marathon U.S. Realties, Inc., successor-in-interest
to Mesilla Valley Mall Company, as lessor, of premises located at Mesilla Valley
Mall, 700 South Tellshore, No. 1174, Las Cruces, New Mexico, known as Store
No. 298, the term of which expires January 1, 1998.
103. The lease dated June 28, 1985 between The United States Shoe
Corporation, as lessee, and Villa Linda Mall, Ltd., as lessor, assigned to the
Debtor, as lessee, on July 22, 1991, of premises located at 1144 Villa Linda
Mall, Santa Fe, New Mexico, known as Store No. 299, the term of which expires
December 31, 1997.
104. The lease dated March 1, 1983 between The United States Shoe
Corporation, successor-in-interest to Ups 'N Down Stores, Inc., as lessee, and
O'Connor Realty Investors, L.P., successor-in-interest to the Mall of Abilene
Company, as lessor, assigned to the Debtor, as lessee, of premises located at
the Mall of Abilene, 4310 Buffalo Gap Road, Abilene, Texas, known as Store
No. 300 (the Mall of Abilene Women's Store Lease"), the term of which expires
December 31, 1995. The Debtor's assumption of the Mall of Abilene Women's Store
Lease is subject to entry of an order herein, on or before the Effective Date of
the Plan, approving the Modification and Five Year Extension of Lease to be
entered into by and between the Debtor and O'Connor Realty Investors, L.P.
extending the Mall of Abilene Women's Store Lease until December 31, 2000.
105. The lease dated December 3, 1985 between The United States Shoe
Corporation, as lessee, and Golden Triangle Mall Associates, as lessor, assigned
to the Debtor, as lessee, on June 7, 1991, as amended by the Supplemental Lease
Agreement dated March 15, 1995, approved by order entered May 2, 1995, of
premises located at Golden Triangle Mall, 2201 Interstate 35 East, Denton,
Texas, known as Store No. 307, the term of which expires January 31, 1997.
106. The lease dated January 20, 1986 between The United States Shoe
Corporation, as lessee, and Simon Property Group, the successor-in-interest to
Celina Development Company, as lessor, assigned to the Debtor, as lessee, on
July 7, 1991, of the premises located at Cielo Vista Mall, 8401 Gateway Blvd.
West, El Paso, Texas, known as Store No. 308, the term of which expires January
31, 1997.
107. The lease dated February 17, 1983 between The United States Shoe
Corporation, successor-in-interest to Ups N' Downs Stores, Inc., as lessee, and
Central Mall Joint Venture, as lessor, assigned to the Debtor, as lessee, on
June 10, 1991, as amended by the Lease Extension and Modification Agreement #1
dated June 13, 1995, approved by order entered July 28, 1995, of premises
located at 59 Central Mall, Port Arthur, Texas, known as Store No. 320, the term
of which expires December 31, 1995.
108. The lease dated October 13, 1987 between The United States Shoe
Corporation, as lessee, and Keystone-Texas Property Holding Corp., successor-in-
interest to Rivercenter Associates, as lessor, assigned to the Debtor, as
lessee, on May 13, 1991 of premises
EXHIBIT B - PAGE 13
<PAGE>
located at Rivercenter Mall, 849, East Commerce Street, San Antonio, Texas,
known as Store No. 321, the term of which expires July 31, 1998.
109. The lease dated December 15, 1987 between The United States Shoe
Corporation, as lessee, and Sherman Mall Associates, as lessor, assigned to the
Debtor, as lessee, on June 7, 1991, as amended by the Supplemental Lease
Agreement dated March 15, 1995, approved by order entered May 2, 1995, of
premises located at Midway Mall, 4800 North Texoma Parkway, Sherman, Texas,
known as Store No. 322, the term of which expires January 31, 1998.
110. The lease dated December 11, 1992 with Fund A Rogue Valley, Inc., as
lessor, of premises located at Rogue Valley Mall-2099, 1600 North Riverside,
Medford, Oregon, known as Store No. 325, the term of which expires January 31,
2003.
111. The lease dated July 15, 1993 with Grove Farm Land Corp., as lessor,
of premises located at Kukui Grove Center, 3-2600 Kaumualii Highway, No. 2032,
Lihue, Hawaii, known as Store No. 327 (the Kukui Grove Center Women's Store
Lease"), the term of which expires November 30, 1998. The Debtor's assumption
of the Kukui Grove Center Women's Store Lease is subject to entry of an order
herein, on or before the Effective Date of the Plan, approving the Letter
Agreement dated August 8, 1995 between the Debtor and Grove Farm Land Corp.
112. The lease dated January 15, 1993, as amended by the Modification
Agreement dated February 28, 1995, approved by order entered May 2, 1995, with
RBO Mall Associates, as lessor, of premises located at Roseburg Valley Mall,
1444 N.W. Garden Valley Blvd. 420, Roseburg, Oregon, known as Store No. 329, the
term of which expires February 28, 2003.
113. The lease dated July 15, 1993 and Letter Agreement dated December 20,
1996 with Alscott Real Estate, LLC, successor-in-interest to Alscott, Inc., as
lessor, of premises located at West Park Plaza, 1431 S.W. Fourth Avenue,
Ontario, Oregon, known as Store No. 333, the term of which expires April 13,
1993.
EXHIBIT B - PAGE 14
<PAGE>
Mark Charles Paben THE HONORABLE THOMAS T. GLOVER
Lynne Brown Ellis Thursday, November 16, 1995
BOGLE & GATES P.L.L.C. at 9:30 a.m.
Two Union Square
601 Union Street
Seattle, WA 98101-2346
(206) 682-5151
UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
In Re: ) Chapter 11
) Case No. 94-03993
JAY JACOBS, INC., )
)
Debtor. )
)
- ----------------------------------------
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION
THIS MATTER having come before the Court on the 16th day of November, 1995
for hearing on the Debtor's First Amended Chapter 11 Plan Of Reorganization (the
"First Amended Plan") filed herein by Jay Jacobs, Inc. (the "Debtor"); the
Debtor's Second Amended Chapter 11 Plan Of Reorganization (the "Second Amended
Plan" or the "Plan") having been filed by the Debtor on the date hereof; the
Court having (a) compared the First Amended Plan and the Second Amended Plan,
and
[BOGLE & GATES LETTERHEAD]
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 1
<PAGE>
(b) determined that no additional notice or hearing is required in connection
with the Second Amended Plan; the Court having reviewed the Plan, the Report Of
Ballots filed pursuant to Local Rule 3018, the Debtor's Preconfirmation Report
filed pursuant to Local Rule 3020(a), and the other files and records herein;
any and all objections having been resolved or withdrawn;
NOW, THEREFORE, the Court finds as follows:
1. The First Amended Plan, the Debtor's First Amended Chapter 11
Disclosure Statement Regarding Its Chapter 11 Plan Of Reorganization, and the
notice of hearing on such First Amended Plan have been transmitted to the
Debtor, United States Trustee, and all creditors, equity security interest
holders, beneficial owners of equity security interests, and other parties-in-
interest herein, as required.
2. The Plan complies with the applicable provisions of the Bankruptcy
Code.
3. The Debtor, the plan proponent, has complied with the applicable
provisions of the Bankruptcy Code.
4. The Plan has been proposed in good faith and not by any means forbidden
by law.
5. Any payments made or promised to be made by the Debtor in connection
with the Plan have been fully disclosed to the Court and are reasonable.
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 2
<PAGE>
6. The Debtor has disclosed the identity of any insider that will be
employed or retained by the Reorganized Debtor and the nature of any
compensation for such insider.
7. With respect to each impaired class of claims or interests under the
Plan, each holder of a claim or interest of such class has accepted the Plan or
will receive or retain under the Plan property of a value as of the Effective
Date (as defined in the Plan) of the Plan that is not less than the amount such
holder would so receive or retain if the Debtor were liquidated under chapter 7
of the Bankruptcy Code on such date.
8. Each class of claims or interests that is impaired under the Plan has
accepted the Plan.
9. Except to the extent that the holder of a particular claim has agreed
to a different treatment of such claim, the Plan provides that with respect to
each claim of a kind specified in section 507(a)(1) of the Bankruptcy Code, on
the Effective Date of the Plan, the holder of such claim will receive on account
of such claim cash equal to the allowed amount of such claim.
10. The Plan has been accepted in writing by at least one class of claims
that is impaired under the Plan, determined without including any acceptance of
the Plan by any insider.
11. Confirmation of the Plan is not likely to be followed by the
liquidation, or the need for further financial reorganization
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 3
<PAGE>
of the Debtor, except to the extent such liquidation or reorganization is
proposed in the Plan.
12. All fees payable under 28 U.S.C. Section 1930, as determined by the
Court at the hearing on confirmation of the Plan, have been paid or the Plan
provides for the payment of all such fees on the Effective Date of the Plan.
13. Any and all other additional findings and conclusions of law announced
by this Court at the confirmation hearing are incorporated herein by reference.
NOW, THEREFORE, it is HEREBY ORDERED:
1. The Plan is CONFIRMED, PROVIDED, HOWEVER, that this confirmation order
shall be vacated if postconfirmation financing acceptable to the Unsecured
Creditors Committee and the Debtor is not approved by order entered prior to the
Effective Date.
2. Pursuant to Article IX of the Plan, the entry of this order shall
operate as a discharge of any debt, other than allowed or allowable
administrative expense claims under Section 503 of the Bankruptcy Code, against
the Debtor or Debtor-in-Possession that arose any time prior to the date of the
entry of this order, and any debt of a kind specified in Sections 502(g),
502(h), or 502(i) of the Bankruptcy Code whether or not (a) the claim was
scheduled by the Debtor, (b) a proof of claim was filed by the creditor, (c) the
claim is allowed under Section 502 of the Bankruptcy Code, or (d) the holder of
such has accepted the Plan, as described in Article IX of the Plan.
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 4
<PAGE>
3. As provided in Article V(E) of the Plan, pursuant to Section 1145(d)
of the Bankruptcy Code, the issuance of Note(s) (as defined in the Plan), if
any, under the Plan to Class 3 Claimants is exempt from the requirements of
Section 5 of the Securities Act of 1933 and any state or local law requiring
registration for offer or sale of a security.
4. As provided in Article VIII of the Plan, on the Effective Date, the
1995 Stock Option Plan attached to the Plan as Exhibit C shall become effective.
Approval of the Plan by the holders and beneficial owners of the Debtor's common
stock voting for the Plan (as indicated in the Report Of Ballots) and entry of
this order shall constitute approval of the 1995 Stock Option Plan for purposes
of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and sections
162(m) and 422 of the Internal Revenue Code of 1986, as amended.
5. In light of the thirteen quarterly payments to all tax claimants
mandated under the Second Amended Plan rather than the four annual payments
proposed in the First Amended Plan, the Debtor shall serve a notice of
confirmation of the Plan, along with a copy of the Second Amended Plan, by
regular mail to all holders of Priority Tax
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 5
<PAGE>
Claims and Secured Tax Claims (Class 2) (as defined under the Plan) promptly
following the Effective Date.
6. All rights of Heitman Retail Properties to seek allowance of its claim
for arrearages on seven certain unexpired leases identified in its claim dated
November 14, 1995, as well as all rights of the Debtor, the Unsecured Creditors
Committee or the Postconfirmation Creditors Committee to object to same, are
expressly reserved.
DATED this 16TH day of November, 1995.
/s/ The Honorable Thomas T. Glover
------------------------------------
THE HONORABLE THOMAS T. GLOVER
United States Bankruptcy Judge
PRESENTED BY:
BOGLE & GATES P.L.L.C.
/s/ Mark Charles Paben
- ------------------------------
Mark Charles Paben
WSBA No. 17710
Attorneys for Jay Jacobs, Inc.
ORDER CONFIRMING DEBTOR'S SECOND AMENDED
CHAPTER 11 PLAN OF REORGANIZATION - 6
