SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest event reported): February 20, 1998
FF HOLDINGS CORPORATION
----------------
(Exact name of registrant as specified in charter)
Delaware 33-54928 23-2506294
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(State or other (Commission File (IRS Employer ID
Jurisdiction of Numbers) Number)
Incorporation)
7530 TIDEWATER DRIVE, P.O. BOX 1289, NORFOLK, VIRGINIA
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(Address of principal executive offices)
23501
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(Zip Code)
Registrant's telephone number, including area code:
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(757) 480-6700
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 3. BANKRUPTCY OR RECEIVERSHIP
On January 7, 1998, FF Holdings Corporation, a Delaware corporation
("Holdings"), and its wholly-owned subsidiary, Farm Fresh, Inc., a Virginia
Corporation (the "Company"), filed their joint plan of reorganization (the
"Plan") pursuant to Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). On February 20, 1998, subject to notice to creditors and other
interested parties, the Bankruptcy Court entered an order confirming the Plan,
as amended, a copy of which is attached to this Form 8-K as Exhibit 2.1. On
March 4, 1998, the Effective Date of the Plan, Richfood Holdings, Inc. acquired
substantially all of the operating assets of Farm Fresh, Inc. under the terms of
a previously announced purchase agreement.
A copy of the press release dated February 23, 1998 relating to the
confirmation of the Plan in the Bankruptcy Court is attached to this current
Report on Form 8-K as Exhibit 99.1; and a copy of the press release dated March
5, 1998 relating to the sale to Richfood holdings, Inc. is attached to this
current Report on Form 8-K as Exhibit 99.2.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
Exhibit Number Description
- -------------- -----------
2.1 Joint Plan of Reorganization, as amended.
99.1 Press Release dated February 23, 1998.
99.2 Press Release dated March 5, 1998.
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.
FF HOLDINGS CORPORATION
Date: March _______,1998 By: /s/ Richard D. Coleman
------------------------
Richard D. Coleman
Executive Vice President,
Chief Financial Officer
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACT: RICHARD D. COLEMAN
(757) 480-6806
FARM FRESH RECEIVES CONFIRMATION
OF ITS PLAN OF REORGANIZATION
RICHMOND, VA and NORFOLK, VA - February 23, 1998 - Richfood Holdings,
Inc. (NYSE:RFH), the leading wholesale food distributor in the Mid-Atlantic
region, and Farm Fresh, Inc., a privately-held supermarket chain based in
Norfolk, Virginia, announced today that the U.S. Bankruptcy Court for the
District of Delaware has confirmed Farm Fresh's plan of reorganization, pursuant
to which a wholly-owned subsidiary of Richfood Holdings, Inc. would acquire
substantially all of the assets, and assume certain liabilities, of Farm Fresh
under the terms of a previously announced agreement. The Farm Fresh sale to
Richfood is expected to close during the first week of March 1998.
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
FARM FRESH ANNOUNCES COMPLETION
OF SALE TO RICHFOOD
NORFOLK, VA, March 5, 1998. . .Farm Fresh, Inc., a privately-held
supermarket chain based in Norfolk, Virginia, today announced the completion of
its sale to Richfood Holdings, Inc. (NYSE:RFH). As previously announced, the
sale was effected through a prepackaged voluntary reorganization of Farm Fresh
under Chapter 11 of the U.S. Bankruptcy Code. The purchase price consisted of
$221.7 million cash plus $29.5 million in assumed capital leases, plus 1.5
million cash plus $29.5 million in assumed capital leases, plus 1.5 million
warrants for the purchase of shares of Richfood common stock at an exercise
price of $25 per share with a term of five years following issuance.
For additional information, contact:
Richard D. Coleman
Executive Vice President & Chief Financial Officer
Farm Fresh, Inc.
(757) 480-6806
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
<TABLE>
<S> <C>
)
In re: ) Chapter 11
)
)
FF HOLDINGS CORPORATION, and ) Case No. 98.37
FARM FRESH, INC., ) Case No. 98.38
)
)
Debtors. )
</TABLE>
JOINT PLAN OF REORGANIZATION PROPOSED BY
FF HOLDINGS CORPORATION AND FARM FRESH, INC.
FF Holdings Corporation and Farm Fresh, Inc., propose the following
joint plan of reorganization pursuant to Chapter 11 of the Bankruptcy Code.
ARTICLE I
DEFINITIONS
The following terms used in the Plan shall have the meanings specified
below, and such meanings shall be equally applicable to both the singular and
plural forms of such terms, unless the context otherwise requires. Terms defined
in the Disclosure Statement shall have the same meanings when used herein. Any
term used in the Plan, whether or not capitalized, that is not defined in the
Plan or in the Disclosure Statement, but that is defined in the Bankruptcy Code
or Bankruptcy Rules, shall have the meaning set forth in the Bankruptcy Code or
the Bankruptcy Rules.
1.1 Administrative Claims: The collective reference to all Claims for
costs and expenses of administration of these Cases with priority under
Bankruptcy Code ss.507(a)(1), including without limitation all Claims of the DIP
Facility Lenders arising under the DIP Facility, any adjustment to the Cash Sale
Proceeds in favor of the Buyer pursuant to Section 2.4(b) of the Purchase
Agreement, costs and expenses allowed under Bankruptcy Code ss.503(b), the
actual and necessary costs and expenses of preserving the estates of the Debtors
and operating the business of the Debtors, any indebtedness or obligations
incurred or assumed by the Debtors, professional fees and expenses of the
Debtors and the Committee, and any fees or charges assessed against the estates
of the Debtors under 28 U.S.C. ss.1930, but specifically excluding items in any
of the above categories that constitute Assumed Liabilities, which shall be the
sole responsibility of the Buyer.
1.2 Affiliate: This term shall have the meaning assigned to it in
Bankruptcy Code ss.101(2); provided, however, that where the context so
requires, the term "debtor" in such section shall mean that entity to which the
defined term "Affiliate" refers.
1.3 Allowance Date: The date a Claim or Interest becomes an Allowed
Claim or an Allowed Interest, respectively.
1.4 Allowed Administrative Claim: Any Administrative Claim that is an
Allowed Claim; provided, however, that a Holder of any Administrative Claim
arising prior to the Effective Date -- other than for goods or non-professional
services provided to the Debtors during the bankruptcy proceedings in the
ordinary course of business and Claims arising under the DIP Facility -- must
file a request for payment on or before 30 days after the Effective Date in
order to have such Administrative Claim eligible to be considered an Allowed
Administrative Claim.
1.5 Allowed Claim: Any Claim against the Debtors to the extent that (i)
such Claim has not been withdrawn, paid in full, or otherwise deemed satisfied
in full, (ii) proof of such Claim was filed on or before the Claims Filing Bar
Date (or, if not filed by such date, any Claim filed with leave of the
Bankruptcy Court, after notice and a hearing), and (iii) no objection to the
allowance of such Claim has been interposed on or before the Claims Objection
Bar Date or such objection having been so interposed, such Claim is allowed by a
Final Order. Unless otherwise specified, "Allowed Claim" shall not include (i)
punitive or exemplary damages, or (ii) any fine, penalty, or forfeiture.
1.6 Allowed Class . . . Claim: Any Allowed Claim in the particular
Class described.
1.7 Allowed Class . . . Interest: Any Allowed Interest in the
particular Class described.
1.8 Allowed Interest: Any Interest in the Debtors in the amount and of
the priority classification set forth in any proof of such Interest that has
been filed or deemed filed timely in these Cases or filed late with leave of the
Bankruptcy Court, after notice and a hearing, or in the absence of such proof,
as set forth in the Stockholder List, unless (i) such Interest has been listed
as disputed, contingent, or unliquidated, in which case such Interest shall be
allowed only in such amount and such classification as is authorized by Final
Order of the Bankruptcy Court, (ii) such Interest has been or may be objected to
on or before the Claims Objection Bar Date, in which case such Interest shall be
allowed only in such amount and such classification as is authorized by Final
Order of the Bankruptcy Court, or (iii) such Interest has been paid in full,
withdrawn, or otherwise deemed satisfied in full.
1.9 Allowed Priority Claim: Any Priority Claim that is an Allowed
Claim.
1.10 Allowed Tax Claim: Any Tax Claim that is an Allowed Claim.
1.11 Allowed Unsecured Claim: Any Unsecured Claim that is an Allowed
Claim.
1.12 Asset Sale: The sale of the Purchased Assets to, and the
assumption of the Assumed Liabilities by, the Buyer pursuant to the Purchase
Agreement.
1.13 Assets: All of the right, title, and interest of the Debtors in
any and all assets and property, whether tangible, intangible, real, or
personal, that constitute property of the Debtors' estates within the purview of
Bankruptcy Code ss.541, including without limitation, Bankruptcy Claims and any
and all claims, causes of action, or rights of the Debtors under federal or
state law.
1.14 Assumed Liabilities: All of the liabilities of Farm Fresh
assumed by the Buyer in the Purchase Agreement and as defined therein.
1.15 Available Cash: The reference to Available Farm Fresh Cash and/or
Available Holdings Cash, as appropriate.
1.16 Available Farm Fresh Cash: The sum of the following cash and
proceeds available for distribution pursuant to Section 6.5 of the Plan: all
cash or cash equivalents constituting the Assets of Farm Fresh or the proceeds
thereof including, but not limited to, the Cash Sale Proceeds, the amounts
otherwise available to Holders of Allowed Class 3A and 5A Claims (to the extent
that the Holders of Allowed Class 3B Claims have not been paid the full amount
of such Allowed Claims), and all other bank deposits, certified or cashier's
checks, and other similar items, and such additional funds thereafter received
by Farm Fresh or Reorganized Farm Fresh related to the Assets of Farm Fresh, as
the result of the liquidation of Residual Assets, or otherwise, less:
(a) Any amounts required to be reserved for or paid by Farm Fresh or
Reorganized Farm Fresh to the Holders of Allowed Administrative or Tax Claims
against Farm Fresh or the Holders of Allowed Class 1, 2A, 2B, 3C, or 3D Claims;
(b) Any payments required to be reserved for or made on account of
reasonable and necessary fees and expenses of agents, advisors, and
professionals employed or engaged by Farm Fresh or Reorganized Farm Fresh for
the benefit of the Creditors and Interest Holders of Farm Fresh, any taxes
payable by Farm Fresh or Reorganized Farm Fresh, and other expenses incurred by
Reorganized Farm Fresh in connection with the post-Effective Date activities of
Reorganized Farm Fresh related to the Assets of Farm Fresh, the litigation or
other resolution of Disputed Claims and Disputed Interests against Farm Fresh or
any remaining causes of action by or against Farm Fresh, the liquidation of the
Residual Assets, the winding up of the affairs of Farm Fresh, or otherwise; and
(c) Any other payments that Reorganized Farm Fresh is required to
make or reserve for under the Plan related to Farm Fresh.
1.17 Available Holdings Cash: The sum of the following cash and
proceeds available for distribution pursuant to Section 6.6 of the Plan: all
cash or cash equivalents constituting the Assets of Holdings or the proceeds
thereof including, but not limited to, distributions received on account of
Allowed Class 3C Claims and Class 4 Interests, and all other bank deposits,
certified or cashier's checks, and other similar items, and such additional
funds thereafter received by Holdings or Reorganized Farm Fresh related to the
Assets of Holdings, less:
(a) Any amounts required to be reserved for or paid to the
Holders of Allowed Administrative or Tax Claims against Holdings;
(b) Any payments required to be reserved for or made on account of
reasonable and necessary fees and expenses of agents, advisors, and
professionals employed or engaged by Holdings or Reorganized Farm Fresh for the
benefit of the Creditors and Interest Holders of Holdings, any taxes payable by
Holdings, and other expenses incurred by Reorganized Farm Fresh in connection
with the post-Effective Date activities of Reorganized Farm Fresh related to the
Assets of Holdings, the litigation or other resolution of Disputed Claims and
Disputed Interests against Holdings or any remaining causes of action by or
against Holdings, the winding up of the affairs of Holdings, or otherwise; and
(c) Any other payments that Reorganized Farm Fresh is required to
make or reserve for under the Plan related to Holdings.
1.18 Bankruptcy Claims: All claims, rights, and causes of action
created in favor of the Debtors under the Bankruptcy Code, including but not
limited to all preference, fraudulent conveyance, and other avoidance claims,
rights, and causes of action arising under Bankruptcy Code ss.ss.542 through
553.
1.19 Bankruptcy Code: The Bankruptcy Reform Act of 1978, Title 11,
United States Code, as amended from time to time.
1.20 Bankruptcy Court: The United States Bankruptcy Court for the
District of Delaware or any other court of competent jurisdiction exercising
jurisdiction over these Cases.
1.21 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure,
promulgated under Section 2075, Title 28, United States Code, as amended from
time to time.
1.22 Business Day: A day other than a Saturday, Sunday, or "legal
holiday" (as such term is defined in Bankruptcy Rule 9006(a)) or any other day
on which commercial banks in New York, New York are authorized or required by
law to close.
1.23 Buyer: FF Acquisition, or such other entity as may be approved by
the Debtors, by the Committee, and by the Bankruptcy Court to purchase the
Purchased Assets in accordance with the terms of Purchase Agreement.
1.24 (These) Cases: The cases for the reorganization of the Debtors
commenced by voluntary petition under Chapter 11 of the Bankruptcy Code, filed
on the Petition Date, in the Bankruptcy Court.
1.25 Cash Sale Proceeds: The cash proceeds received from the Buyer
under the Purchase Agreement, subject to the working capital adjustment
contained therein.
1.26 Chapter 11: Chapter 11 of the Bankruptcy Code.
1.27 Claim: Any right to payment from the Debtors arising, or with
respect to which the obligation giving rise to such right has been incurred,
before the Effective Date, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or any right arising, or
with respect to which the obligation giving rise to such right has been
incurred, before the Effective Date to an equitable remedy for breach of
performance if such breach gives rise to a right to payment from the Debtors,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured.
1.28 Claims Filing Bar Date: The date designated by Final Order of the
Bankruptcy Court as the last date for filing Proofs of Claim (other than with
respect to Administrative Claims).
1.29 Claims Objection Bar Date: The last date for filing an objection
in respect of any Proof of Claim (other than with respect to Administrative
Claims and Claims for damages arising out of the rejection of Executory
Contracts) or Interest, which date shall be 60 days after the later of the
Effective Date or the date such Claim or Interest is filed.
1.30 Class: A category, designated herein, of Holders of Claims or
Interests that are substantially similar to the other Claims or Interests in
such category as specified in Article II of the Plan.
1.31 Committee: The informal steering committee of Senior Noteholders,
initially composed of PPM America Special Investments Fund, LP, Moore Capital
Management, Inc., and Conseco Capital Management.
1.32 Confirmation: The entry by the Bankruptcy Court of an order
confirming the Plan in accordance with the provisions of Chapter 11.
1.33 Confirmation Date: The date upon which the Confirmation
Order is entered on the docket by the Clerk of the Bankruptcy Court.
1.34 Confirmation Order: The order of the Bankruptcy Court confirming
the Plan.
1.35 Convertible Debentures Subordination Provisions: The
subordination and related provisions contained in the Convertible Indenture.
1.36 Convertible Indenture: The Indenture dated as of March 1, 1985, as
amended, between Farm Fresh and Crestar Bank (successors to United Virginia
Bank), as trustee.
1.37 Convertible Subordinated Debentures: The 7.5% Convertible
Subordinated Debentures due in 2010, issued by Farm Fresh in March, 1985,
pursuant to the Convertible Indenture.
1.38 Creditor: Any entity that is the Holder of any Allowed Claim
against the Debtors that arose (or is based on an obligation incurred) on or
before the Petition Date, including, without limitation, any Allowed Claim
against the Debtors' estates of a kind specified in Bankruptcy Code ss.502(g),
(h), or (i).
1.39 Debtors: Holdings and Farm Fresh.
1.40 Debentureholders: Collectively, the Holders of the Convertible
Subordinated Debentures.
1.41 DIP Facility: The revolving credit facility to be provided to the
Debtors by the DIP Facility Lenders pursuant to Bankruptcy Code ss.364, together
with the documents, instruments, agreements, and orders of the Bankruptcy Court
authorizing and governing such facility.
1.42 DIP Facility Lenders: Fleet Capital Corporation, as agent and
lender, and Heller Financial, Inc., as lender, pursuant to the DIP Facility, and
their successors and assigns thereunder, or such other lenders as may be
approved by the Bankruptcy Court to provide the DIP Facility.
1.43 Disclosure Statement: The Disclosure Statement and all supplements
and exhibits thereto that relate to the Plan and that are approved by the
Bankruptcy Court pursuant to Bankruptcy Code ss.1125, as the same may be amended
or modified by the Debtors from time to time pursuant to the Bankruptcy Code and
the Bankruptcy Rules.
1.44 Disputed Claim: A Claim as to which a Proof of Claim has been
filed, or deemed filed under applicable law, as to which an objection has been
or may be timely filed and which objection, if timely filed, has not been
withdrawn on or before the Claims Objection Bar Date and has not been overruled
or denied by a Final Order. Prior to the Claims Objection Bar Date, for the
purposes of the Plan, a Claim shall be considered a Disputed Claim in its
entirety if: (i) the amount of the Claim specified in the Proof of Claim exceeds
the amount of any corresponding Claim scheduled by the Debtors in their
Schedules of Assets and Liabilities; (ii) any corresponding Claim scheduled by
the Debtors in their Schedules of Assets and Liabilities has been scheduled as
disputed, contingent, or unliquidated, irrespective of the amount scheduled; or
(iii) no corresponding Claim has been scheduled by the Debtors in their
Schedules of Assets and Liabilities.
1.45 Disputed Claims Reserve: This term shall have the meaning set
forth in Section 6.10(a) of the Plan.
1.46 Disputed Interest: An Interest as to which a Proof of Interest has
been filed, or deemed filed under applicable law, as to which an objection has
been or may be timely filed and which objection, if timely filed, has not been
withdrawn on or before the Claims Objection Bar Date and has not been overruled
or denied by a Final Order. Prior to the Claims Objection Bar Date, for the
purposes of the Plan, an Interest shall be considered a Disputed Interest in its
entirety if: (i) the amount of the Interest specified in the Proof of Interest
exceeds the amount of any corresponding Interest set forth in the Stockholder
List; (ii) the priority classification of the Interest specified in the Proof of
Interest is higher than the priority classification of any corresponding
Interest set forth in the Stockholder List; (iii) any corresponding Interest set
forth in the Stockholder List has been listed as disputed, contingent, or
unliquidated either as to amount or to priority classification; or (iv) no
corresponding Interest has been set forth in the Stockholder List.
1.47 Effective Date: The first Business Day: (a) that is at least 13
days after the Confirmation Date; (b) on which no stay of the Confirmation Order
is in effect; and (c) on which all conditions in Article VIII of the Plan have
been satisfied or have been waived as provided in the Plan.
1.48 Executory Contract: Any executory contract or unexpired lease,
subject to Bankruptcy Code ss.365, between one of the Debtors and any other
Person or Persons, specifically excluding contracts and agreements entered into
pursuant to the Plan.
1.49 Farm Fresh: Debtor Farm Fresh, Inc., a Virginia corporation.
1.50 Farm Fresh Common Stock: The common stock, par value $.01 per
share, of Farm Fresh, which has constituted and shall constitute the sole class
of capital stock in Farm Fresh at all times during these Cases prior to and on
the Effective Date, and any options, warrants, or rights, contractual or
otherwise, to acquire such shares of common stock.
1.51 Farm Fresh Employees: The present and former employees
(including retirees) of Farm Fresh.
1.52 FF Acquisition: FF Acquisition, L.L.C., a Virginia limited
liability company, wholly-owned by Richfood.
1.53 Final Order: An order or judgment entered by the Bankruptcy Court
that has not been reversed, stayed, modified, or amended and that has not been
and may no longer be appealed from or otherwise reviewed or reconsidered, as a
result of which such order or judgment shall have become final and
non-appealable in accordance with Bankruptcy Rule 8002.
1.54 Holder: The beneficial owner of any Claim or Interest, which, in
the case of an investment company, shall be the investment company and not its
stockholders, and in the case of an insurance company, shall be the insurance
company and not its insureds.
1.55 Holdings: Debtor FF Holdings Corporation, a Delaware corporation
that owns 100% of the Farm Fresh Common Stock.
1.56 Holdings Common Stock: The Class A, Class B, and Class C common
stock, par value $.01 per share, of Holdings, which, along with the Holdings
Preferred Stock, have constituted and shall constitute the sole classes of
capital stock in Holdings at all times during these Cases prior to and on the
Effective Date, and any options, warrants, or rights, contractual or otherwise,
to acquire such shares of common stock.
1.57 Holdings Indenture: The Indenture dated as of October 1, 1992, as
amended, between Holdings and First Bank, National Association, as Trustee.
1.58 Holdings Noteholders: Collectively, the Holders of the Holdings
Notes.
1.59 Holdings Notes: The 14.25% Senior Notes due October 1, 2002,
issued by Holdings on October 9, 1992, and those provided in an exchange offer
in early 1993, in either case pursuant to the Holdings Indenture.
1.60 Holdings Notes Subordination Provisions: The subordination
and related provisions contained in the Holdings Indenture.
1.61 Holdings Preferred Stock: The 14.25% cumulative preferred stock of
Holdings, with a liquidation value of $100 per share, and any options, warrants,
or rights, contractual or otherwise, to acquire such preferred stock.
1.62 Initial Distribution Date: The first Business Day that is 5
Business Days after the Effective Date or such other date as the Bankruptcy
Court may order.
1.63 Interest: An ownership interest in the Debtors as evidenced by
capital stock of the Debtors and any rights to any dividends or distributions as
a result of such ownership.
1.64 New Common Stock: The common stock, par value $.01 per share, of
Reorganized Farm Fresh to be issued on the Effective Date and distributed in the
manner provided by the Plan.
1.65 Notes: Collectively, the Senior Notes, the Convertible
Subordinated Debentures, and the Holdings Notes.
1.66 Old Credit Agreement: The Revolving Credit Agreement, dated as of
December 10, 1993, as amended, among Farm Fresh, as borrower, Holdings, as
guarantor, and the Old Credit Agreement Banks, together with all documents,
instruments, and agreements related thereto or entered into in connection
therewith.
1.67 Old Credit Agreement Banks: Fleet Bank, N.A. (as successor
to NatWest USA Credit Corp.), as agent and lender, and Heller Financial, Inc.,
as lender, pursuant to the Old Credit Agreement, and their successors and
assigns thereunder.
1.68 Old Credit Agreement Claims: All Claims of the Old Credit
Agreement Banks arising under or relating to the Old Credit Agreement, which,
for purposes of the Plan, shall be deemed to be Allowed and fully Secured
Claims, less the sum of all payments made in cash by the Debtors to the Old
Credit Agreement Banks prior to the Effective Date on account of such Claims
pursuant to the interim order approving the DIP Facility under Bankruptcy Code
ss.364.
1.69 Person: An individual, a corporation, a partnership, an
association, a joint stock company, a joint venture, an estate, a trust, an
unincorporated organization, a government or any political subdivision thereof,
or any other entity.
1.70 Petition Date: The date upon which the petitions for relief
under Chapter 11 with respect to the Debtors were filed.
1.71 Plan: The Plan of Reorganization proposed by the Debtors set forth
herein, and all supplements and exhibits thereto, as the same may be amended or
modified by the Debtors from time to time pursuant to the Plan, the Bankruptcy
Code, and the Bankruptcy Rules.
1.72 Priority Claims: All Claims that are entitled to priority pursuant
to Bankruptcy Code ss.507(a) or (b) and that are not Administrative Claims or
Tax Claims.
1.73 Proof of Claim: Any written statement filed under oath in these
Cases by a Creditor in which such Creditor sets forth the amount owed and
sufficient detail to identify the basis for a Claim.
1.74 Proof of Interest: Any written statement filed under oath in these
Cases by an Interest Holder in which such Interest Holder sets forth the amount
and priority of such Interest with sufficient detail to identify the basis for
an Interest.
1.75 Pro Rata: Proportionately, so that a Pro Rata distribution with
respect to an Allowed Claim or an Allowed Interest of a particular Class bears
the same ratio to all distributions (and, in the case of Disputed Claims or
Disputed Interests, allocations) on account of a particular Class or Classes, as
the dollar amount of such Allowed Claim or Allowed Interest bears to the dollar
amount of all Allowed Claims or Allowed Interests and Disputed Claims or
Disputed Interests in such Class or Classes.
1.76 Purchase Agreement: The Asset Purchase Agreement, dated as of
November 26, 1997, by and among Farm Fresh, Richfood, and FF Acquisition
(without giving effect to any modifications thereof or amendments thereto), or
(i) such modifications thereof or amendments thereto as may be approved by the
Debtors, Richfood, FF Acquisition, the Committee, and the Bankruptcy Court, or
(ii) such other agreement for the purchase of the Purchased Assets by a party
other than FF Acquisition as may be approved by the Debtors, the Committee, and
the Bankruptcy Court.
1.77 Purchased Assets: Those Assets of Farm Fresh sold and assigned to,
and purchased by, the Buyer pursuant to the Asset Sale.
1.78 Rejection Claims: All Claims arising as a result of the Debtors'
rejection of Executory Contracts pursuant to Bankruptcy Code ss.ss.365 and 1123,
subject to the limitations provided in Bankruptcy Code ss.502(b).
1.79 Reorganized Farm Fresh: Farm Fresh, as reorganized pursuant to the
Plan and the Confirmation Order.
1.80 Residual Assets: Collectively, all of the Assets of Farm Fresh
other than the Purchased Assets, including without limitation the Excluded
Assets (as defined in the Purchase Agreement) and the Bankruptcy Claims, if any.
1.81 Richfood: Richfood Holdings, Inc., a Virginia corporation.
1.82 Secured Claims: All Claims that are secured by a valid, perfected,
enforceable, and non-avoidable lien on any of the Assets of one of the Debtors
or that are subject to setoff under Bankruptcy Code ss.553, to the extent of the
value of the interest of each Holder of such Claim in such Debtor's interest in
the liened Assets or to the extent of the amount of the setoff, as applicable,
provided, however, that if the Holder's Class timely elects application of
Bankruptcy Code ss.1111(b)(2), each Holder's Claim in such Class shall be a
Secured Claim in the full amount of the Holder's Allowed Claim.
1.83 Senior Noteholders: Collectively, the Holders of the Senior Notes.
1.84 Senior Notes: The 12.25% Senior Notes due October 1, 2000, issued
by Farm Fresh on October 9, 1992, and December 13, 1993 (Series A), and those
provided in an exchange offer in May, 1994 (Series A), pursuant to those certain
Indentures dated as of October 1, 1992, and December 13, 1993, respectively.
1.85 Stockholder List: The listing of stockholders of the Debtors filed
by the Debtors in these Cases, as the same may be amended or modified by the
Debtors from time to time.
1.86 Tax Claims: All Claims that are entitled to priority under
Bankruptcy Code ss.507(a)(8) (excluding Assumed Liabilities).
1.87 Trade Claims: All Unsecured Claims of ordinary course suppliers of
goods and services to Farm Fresh.
1.88 Unsecured Claims: All Claims that are neither Secured Claims nor
entitled to priority under the Bankruptcy Code or an order of the Bankruptcy
Court, excluding Claims that are subordinated pursuant to Bankruptcy Code
ss.510.
1.89 Warrants: Warrants to purchase shares of Richfood, as more fully
defined in the Purchase Agreement.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
In accordance with Bankruptcy Code ss.1123(a)(1), Administrative Claims and Tax
Claims have not been classified and are excluded from the following Classes.
(Article III describes the treatment of Administrative Claims and Tax Claims.)
For the purposes of the Plan, Holders of Claims against, or Interests in, the
Debtors are grouped as follows in accordance with Bankruptcy Code ss.1122(a):
2.1 Class 1 - Priority Claims. Class 1 consists of all Allowed
Priority Claims.
2.2 Class 2 - Secured Claims Against Farm Fresh.
(a) Class 2A - Old Credit Agreement Claims. Class 2A consists of
all Old Credit Agreement Claims.
(b) Class 2B - Other Secured Claims Against Farm Fresh. Class 2B
consists of all Allowed Secured Claims against Farm Fresh other than the Old
Credit Agreement Claims.
2.3 Class 3. Unsecured Claims Against Farm Fresh.
(a) Class 3A - Convertible Subordinated Debentures Claims. Class
3A consists of all Allowed Claims of the Debentureholders under or in connection
with the Convertible Subordinated Debentures, to the extent that such Debentures
are outstanding and have not been canceled.
(b) Class 3B - Senior Notes Claims. Class 3B consists of all
Allowed Claims of the Senior Noteholders under or in connection with the Senior
Notes.
(c) Class 3C - General Unsecured Claims Against Farm Fresh. Class 3C
consists of all Allowed Unsecured Claims against Farm Fresh not otherwise
classified in this Article II, including without limitation Rejection Claims
against Farm Fresh; Claims of Debentureholders under or in connection with the
Convertible Subordinated Debentures, to the extent that such Debentureholders
have exercised their conversion privilege in accordance with the terms of the
Convertible Subordinated Debentures prior to the Petition Date; and Holdings'
Claims against Farm Fresh.
(d) Class 3D - Trade Claims Against Farm Fresh. Class 3D consists of
all Allowed Trade Claims against Farm Fresh.
2.4 Class 4 - Farm Fresh Common Stock Interests. Class 4 consists of all
Allowed Interests of the Holder of Farm Fresh Common Stock under or in
connection with such Farm Fresh Common Stock.
2.5 Class 5. Unsecured Claims Against Holdings.
(a) Class 5A - Holdings Notes Claims. Class 5A consists of all
Allowed Claims of the Holders of the Holdings Notes under or in connection with
the Holdings Notes.
(b) Class 5B - General Unsecured Claims Against Holdings. Class 5B
consists of all Allowed Unsecured Claims against Holdings not otherwise
classified in this Article II.
2.6 Class 6 - Holdings Preferred Stock Interests. Class 6 consists of all
Allowed Interests of the Holders of Holdings Preferred Stock under or in
connection with such Holdings Preferred Stock.
2.7 Class 7 - Holdings Common Stock Interests. Class 7 consists of all
Allowed Interests of the Holders of Holdings Common Stock under or in connection
with such Holdings Common Stock.
ARTICLE III
TREATMENT OF ADMINISTRATIVE AND TAX CLAIMS
3.1 Administrative Claims. Each Holder of an Allowed Administrative Claim
shall receive in full satisfaction of such Allowed Claim cash equal to the
amount of such Claim on the later of (i) the Initial Distribution Date and (ii)
the date that is 10 days after the Allowance Date, unless such Holder shall have
agreed to different treatment of such Allowed Claim; provided, however, that
Allowed Administrative Claims representing obligations incurred in the ordinary
course of business and assumed by the Debtors shall be paid or performed in
accordance with the terms and conditions of the particular transactions and any
agreements relating thereto, and the Allowed Claims of the DIP Facility Lenders
under the DIP Facility shall be paid the full amount of their Allowed Claims on
the Effective Date.
3.2 Tax Claims. Each Holder of an Allowed Tax Claim shall receive in full
satisfaction of such Allowed Claim cash equal to the amount of such Claim on the
later of (i) the Initial Distribution Date and (ii) the date that is 10 days
after the Allowance Date, unless such Holder shall have agreed to different
treatment of such Allowed Claim.
ARTICLE IV
TREATMENT OF CLASSES THAT ARE NOT IMPAIRED UNDER THE PLAN
4.1 Unimpaired Classes. Classes 1, 2A, 2B, and 3D are unimpaired. Therefore,
pursuant to Bankruptcy Code ss.1126(f), the Holders of Allowed Claims in such
Classes are conclusively presumed to have accepted the Plan.
4.2 Class 1 - Priority Claims. Each Holder of an Allowed Class 1 Claim shall
receive in full satisfaction of such Allowed Claim cash equal to the amount of
such Allowed Claim on the latest of (i) the Initial Distribution Date, (ii) the
date that is 10 days after the Allowance Date, and (iii) the date when such
Allowed Claim becomes due and payable according to its terms and conditions.
4.3 Class 2A - Old Credit Agreement Claims. Each Holder of an Allowed Class
2A Claim shall be paid in full in cash the amount of its Allowed Class 2A Claim
on the Effective Date if it has not been paid off in full prior to that date.
4.4 Class 2B - Secured Claims Against Farm Fresh. Each Holder of an Allowed
Class 2B Claim shall receive in full satisfaction of such Allowed Claim either
(i) cash equal to the amount of such Allowed Claim on the Effective Date, or
(ii) if included in the Assumed Liabilities, payments by the Buyer in accordance
with the original terms of the underlying obligations.
4.5 Class 3D - Trade Claims Against Farm Fresh. Each Holder of an Allowed
Class 3D Claim shall either (i) have been paid by Farm Fresh during the pendency
of the Cases pursuant to an order or orders of the Bankruptcy Court authorizing
Farm Fresh to pay certain creditors under certain circumstances, (ii) be paid in
full by Farm Fresh on the Effective Date or when such payments become due by
their terms after the Effective Date, if such Claims are not included in the
Assumed Liabilities, or (iii) be paid in full by the Buyer on the Effective Date
or when such payments become due by their terms after the Effective Date, if
such Claims are included in the Assumed Liabilities. To the extent that the
Trade Claims covered by subpart (ii), above, exceed $300,000 in the aggregate,
the excess portion(s) of all such Claims shall be treated as Class 3C Claims,
unless the Committee agrees, in writing, to permit such Claims to be treated as
Class 3D Claims.
ARTICLE V
TREATMENT OF CLASSES THAT ARE IMPAIRED UNDER THE PLAN
5.1 Impaired Classes. Classes 3A, 3B, 3C, 4, 5A, 5B, 6, and 7 are impaired
and, therefore, the Holders of Allowed Claims in such Classes are entitled to
vote to accept or reject the Plan.
5.2 Class 3A - Convertible Subordinated Debentures Claims. Each Holder of an
Allowed Class 3A Claim shall be entitled to receive in full satisfaction of such
Allowed Claim a percentage of such Allowed Claim in cash, on the later of (i)
the Initial Distribution Date and (ii) the date that is 10 days after the
Allowance Date, which percentage shall equal the percentage that Holders of
Allowed Class 3B Claims are anticipated, as of the Effective Date, to receive
(taking into account the value -- determined in good faith by Farm Fresh and the
Committee, or in the absence of an agreement, by the Bankruptcy Court -- of the
New Common Stock, the Warrants, and anticipated Available Farm Fresh Cash (but
without deducting therefrom cash distributions to Holders of Allowed Class 3A
Claims), but excluding any amounts included in such Available Farm Fresh Cash by
virtue of the Convertible Debentures Subordination Provisions and the Holdings
Notes Subordination Provisions). However, because of the existence of the
Convertible Debentures Subordination Provisions, until the Holders of Allowed
Class 3B Claims have been paid the full amount of such Allowed Claims, all such
cash shall not be paid to the Holders of Allowed Class 3A Claims, but rather
shall be included with Available Farm Fresh Cash to be distributed to the
Holders of Allowed Class 3B Claims, in accordance with Section 6.5 of the Plan.
5.3 Class 3B - Senior Notes Claims. Each Holder of an Allowed Class 3B Claim
shall receive in full satisfaction of such Allowed Claim such Holder's Pro Rata
share of the New Common Stock, the Warrants, and Available Farm Fresh Cash to be
allocated or distributed to the Holders of all Allowed Class 3B Claims, until
each such Holder is paid the full amount of its Allowed Class 3B Claim. Such
distributions of Available Farm Fresh Cash shall be made from time to time in
accordance with the terms of Section 6.5 of the Plan. However, if any such
Holder was not an "accredited investor," as defined in Regulation D under the
Securities Act of 1933, at any time between November 24, 1997, and the Petition
Date, such Holder shall receive in full satisfaction of such Allowed Claim cash
of a percentage equal to the aggregate percentage recovery that "accredited
investor" Holders of Allowed Class 3B Claims receive (taking into account the
value -- determined in good faith by Farm Fresh and the Committee, or in the
absence of an agreement, by the Bankruptcy Court -- of the New Common Stock, the
Warrants, and anticipated Available Farm Fresh Cash).
5.4 Class 3C - General Unsecured Claims Against Farm Fresh. Each Holder of
an Allowed Class 3C Claim shall receive in full satisfaction of such Allowed
Claim a percentage of such Allowed Claim in cash, on the later of (i) the
Initial Distribution Date and (ii) the date that is 10 days after the Allowance
Date, which percentage shall equal the percentage that Holders of Allowed Class
3B Claims are anticipated, as of the Effective Date, to receive (taking into
account the value -- determined in good faith by Farm Fresh and the Committee,
or in the absence of an agreement, by the Bankruptcy Court -- of the New Common
Stock, the Warrants, and anticipated Available Farm Fresh Cash (but without
deducting therefrom cash distributions to Holders of Allowed Class 3C Claims),
but excluding any amounts included in such Available Farm Fresh Cash by virtue
of the Convertible Debentures Subordination Provisions and the Holdings Notes
Subordination Provisions). With respect to the Debentureholders included in this
Class 3C, all such cash shall be paid directly to such Debentureholders. To the
extent that the Allowed Claims of such Debentureholders aggregate $750,000 or
less, they shall not be subject to the Claims of the Holders of Allowed Class 3B
Claims pursuant to the Convertible Debentures Subordination Provisions or
otherwise. To the extent that the Allowed Claims of such Debentureholders
aggregate in excess of $750,000, the Holders of Allowed Class 3B Claims reserve
all of their rights under the Convertible Debentures Subordination Provisions to
pursue remedies against the Debentureholders receiving payments pursuant to the
terms of the Plan for such amounts in excess of $750,000.
5.5 Class 4 - Farm Fresh Common Stock Interests. The Holder of Allowed Class
4 Interests shall receive in full satisfaction of such Allowed Interests all
Available Farm Fresh Cash, if any, after each Holder of Allowed Class 1, 2A, 2B,
3A, 3B, 3C, and 3D Claims has been paid the full amount of such Claim, in
accordance with Section 6.5 of the Plan, and such Interests shall be canceled.
5.6 Class 5A - Holdings Notes Claims. Each Holder of an Allowed Class 5A
Claim shall receive in full satisfaction of such Allowed Claim such Holder's Pro
Rata share, along with the Holders of Class 5B Claims, of Available Holdings
Cash, if any, until each such Holder is paid (directly or as provided below) the
full amount of its Allowed Class 5A Claim; however, because of the existence of
the Holdings Notes Subordination Provisions, until the Holders of Allowed Class
3B Claims are paid the full amount of such Allowed Claims, all such cash shall
not be paid to the Holders of Allowed Class 5A Claims, but rather shall be
included with Available Farm Fresh Cash to be distributed to the Holders of
Allowed Class 3B Claims, in accordance with Sections 6.5 and 6.6 of the Plan.
5.7 Class 5B - Unsecured Claims Against Holdings. Each Holder of an Allowed
Class 5B Claim shall receive in full satisfaction of such Allowed Claim such
Holder's Pro Rata share, along with the Holders of Class 5A Claims, of Available
Holdings Cash, if any, until each such Holder is paid the full amount of its
Allowed Class 5B Claim.
5.8 Class 6 - Holdings Preferred Stock Interests. Each Holder of an Allowed
Class 6 Interest shall receive in full satisfaction of such Allowed Interest
such Holder's Pro Rata share of Available Holdings Cash, if any, after each
Holder of an Allowed Class 5A and 5B Claim has been paid the full amount of such
Claim, until each such Holder is paid the full amount of any liquidation
preference to which it is entitled by the terms of the Holdings Preferred Stock
that it holds and all accrued and unpaid dividends thereon, if any, in
accordance with Section 6.6 of the Plan, and such Interests shall be canceled.
5.9 Class 7 - Holdings Common Stock Interests. Each Holder of an Allowed
Class 7 Interest shall receive in full satisfaction of such Allowed Interest
such Holder's Pro Rata share of Available Holdings Cash, if any, after each
Holder of an Allowed Class 5A and 5B Claim has been paid the full amount of such
Claim, and after each Holder of an Allowed Class 6 Interest has been paid the
full amount of any liquidation preference to which it is entitled by the terms
of the Holdings Preferred Stock that it holds and all accrued and unpaid
dividends thereon, if any, in accordance with Section 6.6 of the Plan, and such
Interests shall be canceled.
5.10 Distribution Limitations. Notwithstanding any other provision of the
Plan to the contrary, no distribution shall be made on account of any Claim or
Interest, or part thereof, (i) that is not an Allowed Claim or an Allowed
Interest or (ii) that has been avoided or is subject to any objection.
ARTICLE VI
MEANS FOR IMPLEMENTATION OF THE PLAN
6.1 Dissolution. After the Confirmation Date, but prior to the Effective
Date, the Board of Directors of Holdings shall take such actions as are
necessary and appropriate to cause, as of the Effective Date, the dissolution of
Holdings, including but not limited to the designation and authorization of an
officer to file certificates of dissolution with the appropriate secretaries of
state and to take such other actions as such officer deems appropriate to effect
such dissolution. Pursuant to such dissolution, any Assets of dissolved Holdings
shall be distributed to Reorganized Farm Fresh to be administered in accordance
with the terms of the Plan.
6.2 Asset Sale.
(a) Confirmation of the Plan is premised on the consummation of the
transactions contemplated to occur on the Closing Date (as defined in the
Purchase Agreement) under the Purchase Agreement.
(b) Pursuant to the procedures set forth in the Purchase Agreement,
or such other procedures as may be approved or ordered by the Bankruptcy Court
that are not inconsistent in any material respect with the Purchase Agreement,
Farm Fresh and the Buyer shall consummate the Asset Sale on the Effective Date.
(c) As part of the consummation of the Asset Sale, pursuant to the
Purchase Agreement and the Plan, on the Effective Date, except to the extent
provided in the Purchase Agreement, the Buyer shall acquire the Purchased Assets
free and clear of all claims, debts, liens, security interests, encumbrances,
and interests, whether such claims, debts, liens, security interests,
encumbrances, or interests are against the Purchased Assets or against the
Debtors, with such claims, debts, liens, security interests, encumbrances, and
interests to attach to the proceeds of such Purchased Assets, to be distributed
in accordance with the Plan.
(d) Other than the Assumed Liabilities, or as specifically set
forth in the Purchase Agreement, the Buyer, in acquiring the Purchased Assets,
is not assuming any of the Debtors' liabilities for any expenses, debts,
obligations, liabilities, claims, demands, fines, or penalties arising out of or
in any way related to the Purchased Assets or the operation of the Debtors'
business.
(e) If the consummation of the Asset Sale does not occur on the
Effective Date, then the Confirmation Order shall be deemed vacated and of no
further force or effect.
6.3 Boards of Directors of the Debtors Pre- and Post-Effective Date. Those
members of the Debtors' Boards of Directors who are serving as of the
Confirmation Date shall continue to serve in such capacities until the Effective
Date (or the date of dissolution, in the case of Holdings). On the Effective
Date, the members of the Farm Fresh Board of Directors shall be deemed to have
resigned. On the date of Holdings' dissolution, the members of the Holdings
Board of Directors shall be deemed to have resigned. As of the Effective Date,
the Board of Directors of Reorganized Farm Fresh shall consist of those
individuals selected by the Committee and disclosed to the Bankruptcy Court
pursuant to Bankruptcy Code ss.1129(a)(5) on or before the Confirmation Date.
6.4 Administration of the Plan.
(a) After the Effective Date, Reorganized Farm Fresh shall perform
those responsibilities, duties, and obligations set forth herein, including
without limitation to liquidate any Residual Assets in accordance with the terms
of a budget and guidelines to be approved by its Board of Directors, to make
distributions as provided under the Plan, to object to the Allowance of any
Claim and to prosecute any litigation pertaining thereto, to pay such Claims as
may be later Allowed, all as contemplated by the dispute resolution procedures
contained in Section 6.10 of the Plan, and to wind up the remaining affairs of
Reorganized Farm Fresh.
(b) Reorganized Farm Fresh may retain such management, law firms,
accounting firms, experts, advisors, agents, consultants, investigators,
appraisers, auctioneers, or other professionals as it may deem necessary,
including without limitation a disbursing agent, to aid it in the performance of
its responsibilities pursuant to the terms of the Plan. Reorganized Farm Fresh
shall pay such management and professionals reasonable compensation for services
rendered and expenses incurred on its behalf.
(c) The compensation and reimbursement of expenses to be paid to the
management of Reorganized Farm Fresh and to those Persons employed or engaged by
Reorganized Farm Fresh pursuant to Section 6.4(b) of the Plan shall be paid
prior to each distribution of Available Cash. These rights to payment shall be
prior and superior to the rights of all Holders of Allowed Claims who are
entitled to receive distributions of Available Cash.
(d) The Board of Directors and the management of the Debtors and
Reorganized Farm Fresh shall perform the duties and obligations imposed on them
by the Plan with reasonable diligence and care under the circumstances.
(e) The Board of Directors and management of the Debtors and
Reorganized Farm Fresh, and any of the professionals employed or engaged by
such entities, shall be defended, held harmless, and indemnified by Reorganized
Farm Fresh, against any and all losses, claims, costs, expenses, and liabilities
to which such indemnified parties may be subject by reason of such indemnified
parties' execution of the duties of the Debtors and Reorganized Farm Fresh under
the Plan.
(f) Reorganized Farm Fresh shall be responsible for filing all
federal, state, and local tax returns for the Debtors and for Reorganized Farm
Fresh.
(g) To the extent the manner of performance is not specified, the
Debtors and Reorganized Farm Fresh will have the discretion to carry out and
perform all other obligations or duties imposed on them by the Plan or by law in
any manner their respective Board of Directors so chooses, as long as such
performance is consistent with the intents and purposes of the Plan.
6.5 Obtaining and Distributing Available Farm Fresh Cash.
(a) Reorganized Farm Fresh shall reserve funds in an amount estimated
to be sufficient for the satisfaction of anticipated Administrative Claims
against Farm Fresh and for reasonable compensation and reimbursement of expenses
to Persons it employs related to Farm Fresh. In the event that any amount
reserved for such payments is in excess of actual Allowed Administrative Claims
and actual allowed compensation and expenses to Persons employed by Reorganized
Farm Fresh related to Farm Fresh, such excess amount shall then be included in
Available Farm Fresh Cash and distributed in accordance with the Plan.
(b) To the extent there exists sufficient Available Farm Fresh Cash
from time to time, Reorganized Farm Fresh shall make Pro Rata distributions of
such Available Farm Fresh Cash to the Holders of Allowed Class 3B Claims at
least quarterly beginning with the Initial Distribution Date; provided, however,
that Reorganized Farm Fresh shall not be required to make any such quarterly
distribution in the event that Available Farm Fresh Cash then available for
distribution is less than $250,000.
(c) To the extent there exists Available Farm Fresh Cash after payment
in full of all Allowed Class 3B Claims, Reorganized Farm Fresh shall make a
distribution or distributions of such Available Farm Fresh Cash to the Holder of
Allowed Class 4 Interests.
6.6 Obtaining and Distributing Available Holdings Cash.
(a) Reorganized Farm Fresh shall reserve funds in an amount estimated
to be sufficient for the satisfaction of anticipated Administrative Claims
against Holdings and for reasonable compensation and reimbursement of expenses
to Persons it employs related to Holdings. In the event that any amount reserved
for such payments is in excess of actual Allowed Administrative Claims and
actual allowed compensation and expenses to Persons employed by Reorganized Farm
Fresh related to Holdings, such excess amount shall then be included in
Available Holdings Cash and distributed in accordance with the Plan.
(b) To the extent there exists sufficient Available Holdings Cash from
time to time, Reorganized Farm Fresh shall make Pro Rata distributions of such
Available Holdings Cash to the Holders of Allowed Class 5A and 5B Claims
(provided, however, that pursuant to the Holdings Notes Subordination
Provisions, until the Holders of Allowed Class 3B Claims have been paid the full
amount of such Claims, any amounts payable to the Holders of Allowed Class 5A
Claims shall not be paid to the Holders of Allowed Class 5A Claims, but rather
shall be included with Available Farm Fresh Cash) at least quarterly beginning
with a calendar quarter that is not later than the end of the second calendar
quarter after the Effective Date; provided, however, that Reorganized Farm Fresh
shall not be required to make any such quarterly distribution in the event that
Available Holdings Cash then available for distribution is less than $250,000.
(c) To the extent there exists Available Holdings Cash after all
Holders of Allowed Class 5A and 5B Claims have been paid in full (taking into
account amounts paid to Holders of Class 3B Claims on behalf of Holders of Class
5A Claims pursuant to the Holdings Notes Subordination Provisions), Reorganized
Farm Fresh shall make a distribution or distributions of such Available Holdings
Cash to the Holders of Allowed Class 6 Interests until each such Holder is paid
the full amount of any liquidation preference to which it is entitled by the
terms of the Holdings Preferred Stock that it holds and all accrued and unpaid
dividends thereon, if any.
(d) To the extent there exists Available Holdings Cash after all
Holders of Allowed Class 6 Interests have been paid the full amount of any
liquidation preference to which they are entitled by the terms of the Holdings
Preferred Stock that they hold and all accrued and unpaid dividends thereon, if
any, Reorganized Farm Fresh shall make a distribution or distributions of such
Available Holdings Cash to the Holders of Allowed Class 7 Interests.
6.7 Provisions Relating to Existing Notes and Existing Stock.
(a) As of the Effective Date, each of the Notes shall be of no further
force and effect, without any further action on the part of the Debtors, and the
Holders thereof shall have no rights, and such instruments shall evidence no
rights, except the right to receive distributions in accordance with the Plan.
(b) No Holder of any of the Notes shall be entitled to any
distribution under the Plan unless and until such Holder has first surrendered
or caused to be surrendered to Reorganized Farm Fresh the original Notes held by
it or, in the event that such original Notes have been lost, destroyed, stolen,
or mutilated, has first executed and delivered an affidavit of loss and
indemnity with respect thereto in form customarily utilized for such purposes
that is reasonably satisfactory to Reorganized Farm Fresh and, in the event
Reorganized Farm Fresh so requests, has first furnished a bond in form and
substance (including, without limitation, amount) reasonably satisfactory to
Reorganized Farm Fresh. As soon as practicable after such surrender or such
delivery of an affidavit of loss and indemnity and such furnishing of a bond as
provided in this Section 6.7(b), Reorganized Farm Fresh shall make the
distributions, if any, provided in the Plan. Promptly upon surrender of such
instruments, Reorganized Farm Fresh shall cancel the applicable Notes.
(c) As of the Effective Date, the Farm Fresh Common Stock, the
Holdings Common Stock, and the Holdings Preferred Stock shall be of no further
force and effect, without any further action on the part of the Debtors.
6.8 Delivery of Distributions; Unclaimed Property; Undeliverable
Distributions.
(a) Except as provided in Section 6.8(c), distributions to Holders of
Allowed Claims and Allowed Interests shall be made: (i) at the addresses set
forth on the respective Proofs of Claim filed by such Holders; or (ii) at the
addresses set forth in any written notices of address change delivered to the
Debtors or Reorganized Farm Fresh (if after the Effective Date) after the date
of any related Proof of Claim.
(b) In accordance with Bankruptcy Code ss.1143, any Holder of any Note
that fails to surrender the applicable security or deliver an affidavit of loss
and indemnity as provided herein within one year from and after the later of the
Effective Date or the applicable Allowance Date with respect to such Claim,
shall be deemed to have forfeited all rights and claims and shall be forever
barred from receiving any distributions under the Plan. In such cases, any
property held for distribution by Reorganized Farm Fresh on account of an
Allowed Claim based on such Note shall be redistributed in accordance with the
provisions of the Plan.
(c)If the distribution to the Holder of any Allowed Claim or Allowed
Interest is returned to Reorganized Farm Fresh as undeliverable, no further
distribution shall be made to such Holder unless and until Reorganized Farm
Fresh is notified in writing of such Holder's then current address. Reorganized
Farm Fresh shall retain undeliverable distributions to be redistributed in
accordance with the provisions of the Plan. Unclaimed distributions shall be
held in trust in a segregated bank account in the name of Reorganized Farm
Fresh, for the benefit of the potential claimants of such funds, and shall be
accounted for separately.
(d) Any Holder of an Allowed Claim or Allowed Interest who does not
assert a claim for an undeliverable distribution within one year after the date
by which such Holder was first entitled to such distribution shall no longer
have any claim to or interest in such undeliverable distribution and shall be
forever barred from receiving any distribution under the Plan. In such cases,
any property held for distribution on account of such Claims or Interests shall
be redistributed in accordance with the provisions of the Plan as if such Claims
or Interests were not Allowed Claims or Allowed Interests.
(e) Nothing contained in the Plan shall require the Debtors or
Reorganized Farm Fresh to attempt to locate any Holder of an Allowed Claim or
Allowed Interest.
6.9 Manner of Payments Under the Plan. Any cash payment to be made by
Reorganized Farm Fresh pursuant to the Plan may be made by a check on a United
States bank selected by Reorganized Farm Fresh; provided, however, that cash
payments made to foreign Holders of Allowed Claims may be paid, at the option of
Reorganized Farm Fresh, in such funds and by such means as are necessary or
customary in a particular foreign jurisdiction.
6.10 Disputed Claims and Interests.
(a) No distribution or payment shall be made on a Disputed Claim or
Disputed Interest until such Disputed Claim or Disputed Interest becomes an
Allowed Claim or Allowed Interest. On each distribution date, the distributions
reserved for the Holders of Disputed Claims or Disputed Interests in each Class
under the Plan shall be deposited in reserve accounts segregated by the
respective Classes in which the Disputed Claims or Disputed Interests exist
(each a "Disputed Claims Reserve").
(b) Notwithstanding any other provisions of the Plan, Reorganized Farm
Fresh shall withhold from the property to be distributed under the Plan, in each
Disputed Claims Reserve, a sufficient Pro Rata share of the property to be
distributed on account of the face amount of Claims or Interests that are
Disputed Claims or Disputed Interests in such Class as of the date of the
initial distribution of such Class under the Plan. For the purposes of this
provision, the "face amount" of a Claim is (i) the amount set forth on the Proof
of Claim or such lower amount as may be determined in accordance with Section
6.10(c), unless the Claim is filed in an unliquidated amount; or (ii) if a Proof
of Claim has been filed in an unliquidated amount, the amount determined in
accordance with Section 6.10(c). For the purposes of this provision, the "face
amount" of an Interest is (i) the amount set forth on the Proof of such Interest
or such lower amount as may be determined in accordance with Section 6.10(c),
unless the Proof of Interest is filed in an unliquidated amount; or (ii) if a
Proof of Interest has been filed in an unliquidated amount, the amount
determined in accordance with Section 6.10(c). In determining the amount of the
Pro Rata distributions to the Holders of Allowed Claims or Allowed Interests in
any Class for which a Disputed Claims Reserve has or will be established, the
calculation of the amount of Pro Rata distribution to each Holder of an Allowed
Claim or Allowed Interest in such Classes shall be made as if all Disputed
Claims or Disputed Interests in the applicable Class were Allowed Claims or
Allowed Interests in their respective face amounts.
(c) As to any Disputed Claim or Disputed Interest (including, without
limitation, any unliquidated Claim or Interest), the Bankruptcy Court shall,
upon motion by the Debtors or Reorganized Farm Fresh, estimate the maximum
allowable amount of such Disputed Claim or Disputed Interest and the amount to
be placed in the Disputed Claims Reserve on account of such Disputed Claim or
Disputed Interest. Any Creditor or Interest Holder whose Claim or Interest is so
estimated by an Order of the Bankruptcy Court shall not have recourse to the
Debtors or to Reorganized Farm Fresh, any assets theretofore distributed on
account of any Allowed Claim or Allowed Interest, or any other entity or
property if the finally Allowed Claim or Allowed Interest of that Creditor or
Interest Holder exceeds that maximum. Instead, such Creditor or Interest Holder
shall have recourse only to the undistributed assets (if any) in the applicable
Disputed Claims Reserve for the Claim or Interest of that Creditor or Interest
Holder and (on a Pro Rata basis with other Creditors or Interest Holders of the
same Class who are similarly situated) to those portions (if any) of the
Disputed Claims Reserve for other disputed and unliquidated Claims or Interests
of the same Class that exceed the ultimately allowed amount of such Claims or
Interests.
(d) All cash held in the Disputed Claims Reserve accounts shall be
invested in such investments as are described in Bankruptcy Code ss.345. All
earnings on such cash shall be held in trust in the Disputed Claims Reserve
accounts and shall be distributed only in the manner described in the Plan.
(e) At such time as all or any portion of a Disputed Claim or
Disputed Interest becomes an Allowed Claim or Allowed Interest, the
distributions reserved for such Disputed Claim or Disputed Interest or such
portion, plus any earnings thereon, shall be released from the appropriate
Disputed Claims Reserve account and delivered to the Holder of such Allowed
Claim or Allowed Interest. At such time as all or any portion of any Disputed
Claim or Disputed Interest is determined not to be an Allowed Claim or Allowed
Interest, the distribution reserved for such Disputed Claim or Disputed Interest
or such portion, plus any earnings thereon, shall be released from the
appropriate Disputed Claims Reserve account and made available for
redistribution as Available Cash in the manner described in the Plan.
(f) (i) After the Confirmation Date, the Debtors, and (ii) after the
Effective Date, Reorganized Farm Fresh, shall have the authority to object to,
settle, compromise, withdraw, or litigate Disputed Claims and Disputed Interests
without Bankruptcy Court approval.
(g) Notwithstanding anything contained in this Section 6.10 to the
contrary, if there exists any Disputed Administrative or Tax Claim, or any
Disputed Class 1, 2A, 2B, or 3D (if not part of the Assumed Liabilities) Claim,
Reorganized Farm Fresh shall withhold in a separate reserve account the "face
amount" (as calculated under Section 6.10(b)) of any such Disputed Claim until
and to the extent such Claims are determined to be Allowed.
6.11 Bar Date for Objections to Claims and Interests. Unless an earlier time
is set by Final Order of the Bankruptcy Court, all objections to Claims (other
than with respect to Administrative Claims and Rejection Claims) or Interests
must be filed by the Claims Objection Bar Date; provided, however, that no such
objections may be filed against any Claim or Interest after the Bankruptcy Court
has determined that such Claim or Interest is an Allowed Claim or Allowed
Interest, as applicable. The failure by any party in interest, including the
Debtors, to object to any Claim, whether or not unpaid, for purposes of voting
shall not be deemed a waiver of such party's rights to object to, or re-examine,
any such Claim or Interest, as applicable, in whole or in part.
6.12 New Common Stock. On the Effective Date (or as soon thereafter as is
possible), 1,000,000 shares of New Common Stock, which shall constitute all of
the then issued and outstanding shares of New Common Stock, shall be issued and
distributed Pro Rata to the Holders of Allowed Class 3B Claims. As of such
issuance of New Common Stock, it shall be the only class of equity securities of
Reorganized Farm Fresh issued under the Plan or authorized by the Articles of
Incorporation of Reorganized Farm Fresh, which shall be amended on or prior to
the Effective Date to satisfy the provisions of the Plan and Bankruptcy Code
ss.1123(a)(6). Upon issuance of the shares of New Common Stock pursuant to the
Plan, all such shares of New Common Stock will be deemed fully paid and
nonassessable.
6.13 Warrants. On the Effective Date (or as soon thereafter as is possible),
the Warrants shall be issued and distributed Pro Rata to certain Holders of
Allowed Class 3B Claims in accordance with Section 5.3 of the Plan.
6.14 Direction to Parties. From and after the Effective Date, Reorganized
Farm Fresh may apply to the Bankruptcy Court for an order directing any
necessary party to execute or deliver or to join in the execution or delivery of
any instrument required to effect a transfer of property dealt with by the Plan,
and to perform any other act, including the satisfaction of any lien, that is
necessary for the consummation of the Plan, pursuant to Bankruptcy Code
ss.1142(b).
6.15 Setoffs. The Debtors shall, pursuant to Bankruptcy Code ss.553, setoff
against any Allowed Claim and the distributions to be made pursuant to the Plan
on account of such Claim, the claims, rights, and causes of action of any nature
that the Debtors may hold against the Holder of such Allowed Claim that are not
otherwise waived, released, or compromised in accordance with the Plan;
provided, however, that neither the failure to effect such a setoff nor the
allowance of any Claim hereunder shall constitute a waiver or release by the
Debtors of any such claims, rights, and causes of action that either of the
Debtors may possess against such Holder.
6.16 Preservation of Rights of Action. Except as otherwise specified in the
Plan, in accordance with Bankruptcy Code ss.1123(b), as of the Effective Date,
Reorganized Farm Fresh shall have the power (i) to institute and present in the
name of the Debtors, or otherwise, all proceedings which it may deem proper in
order to collect, assert, or enforce any claim, right, or title of any kind in
or to any of the Debtors' assets, and (ii) to defend and compromise any and all
actions, suits, or proceedings in respect of such assets.
ARTICLE VII
EXECUTORY CONTRACTS
7.1 Assumption of Executory Contracts. Executory Contracts will be deemed
assumed by Farm Fresh and assigned to the Buyer in accordance with the
provisions and requirements of Bankruptcy Code ss.ss.365 and 1123 and the
Purchase Agreement, except those Executory Contracts that (i) are assumed and
retained by Farm Fresh pursuant to the terms of the Plan or pursuant to an order
of the Bankruptcy Court, (ii) have been rejected by order of the Bankruptcy
Court, (iii) are the subject of a motion to reject pending on the Confirmation
Date, (iv) are identified as "to be rejected" on the list attached to the Plan
as Exhibit A-1, (v) are identified as "Non-Assumed Contracts" on Schedule 2.3D
of the Purchase Agreement, or (vi) are rejected pursuant to the terms of the
Plan. Rejection shall be effective as of the Confirmation Date or as of the
Effective Date, at the option of the Debtors.
7.2 Claims for Damages. Each Person who is a party to an Executory Contract
rejected pursuant to this Article VII shall be entitled to file, not later than
30 days after such rejection (or as otherwise provided by Final Order of the
Bankruptcy Court), a Proof of Claim for alleged Rejection Claims. If no such
Proof of Claim for Rejection Claims is timely filed, any such Claim shall be
forever barred and shall not be enforceable against the Debtors or their
estates. Objections to any such Proof of Claim shall be filed not later than 90
days after such Proof of Claim is filed (or as otherwise provided by Final Order
of the Bankruptcy Court), and the Bankruptcy Court shall determine any such
objections. Payment of such Claims (consistent with the payments received by
Holders of other Claims in the Class into which such Claims fall, as determined
by Section 7.4 hereof) shall be made no earlier than the later of (a) 10 days
after the expiration of the 90-day period for filing an objection in respect of
any Proof of Claim filed pursuant to this Section 7.2 and (b) 10 days after the
Claim has been allowed by a Final Order, provided that no such payments shall be
made before the Effective Date.
7.3 Classification of Claims. Except as otherwise provided under the Plan,
Rejection Claims against Farm Fresh shall be treated as Class 3C Claims, and
Rejection Claims against Holdings shall be treated as Class 5B Claims.
7.4 Insurance Policies. All insurance policies of the Debtors providing
coverage to the Debtors' directors, officers, shareholders, agents, employees,
representatives, and others for conduct in connection with the Debtors, to the
extent such policies are Executory Contracts, shall be deemed assumed by the
Debtors as of the Confirmation Date. Whether such policies are Executory
Contracts or not, if they have not done so already, on or prior to the Effective
Date, the Debtors (i) shall cure any defaults under such insurance policies and
(ii) shall purchase "tail" coverage for a period of six years with respect to
any such policies, all as a cost and expense of administering these Cases and
preserving the Debtors' estates, provided that the aggregate cost of such
assumption, cure, and "tail" does not exceed $600,000.
ARTICLE VIII
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS
8.1 Conditions to Confirmation. Confirmation of the Plan shall not occur
unless and until each of the following conditions has been satisfied or waived,
subject to Section 8.3, in writing by the Debtors and the Committee:
(a) The Confirmation Order shall be acceptable in form and substance
(i) to the debtors and the Committee, (ii) to the Buyer, subject to the
qualifications contained in Section 8.4(a)(ii)(A) of the Purchase Agreement, and
(iii) to the DIP Facility Lenders, insofar as it relates to the transactions
contemplated by the DIP Facility; however, the Committee, the Buyer, and the DIP
Facility Lenders shall not be permitted to unreasonably withhold their consent
to the form and substance of the Confirmation Order.
(b) The Purchase Agreement shall be in full force and effect and
binding on the parties thereto.
8.2 Conditions to Effectiveness. Notwithstanding any other provision of the
Plan or the Confirmation Order, the Effective Date of the Plan shall not occur,
and the Plan shall not be binding on any party, unless and until each of the
following conditions has been satisfied or waived, subject to Section 8.3, in
writing by the Debtors and the Committee:
(a) The Confirmation Order shall have been entered on the docket by
the Clerk of the Bankruptcy Court, and shall not have been reversed, stayed,
modified, or amended, and as to which the time for filing a notice of appeal, or
petition for certiorari, or request for reargument or further review or
rehearing shall have expired.
(b) All other documents provided for under the Plan shall have been
executed and delivered by the parties thereto, unless such execution or delivery
has been waived by the parties benefited by such documents.
(c) Provided that the remaining conditions of this Section 8.2 have
been duly satisfied or waived, the Asset Sale shall have been consummated.
(d) The Debtors shall have filed statements with the Bankruptcy Court
certifying that, in the Debtors' good faith belief, Allowed Rejection Claims
against Farm Fresh shall not exceed $7,000,000, in the aggregate, excluding, in
the case of nonresidential real property leases, any taxes, insurance premiums,
common area maintenance charges, cost escalators, and any other non-rent charges
that may arguably be due under such leases, and the Committee, after having had
a reasonable opportunity to review such statements and the basis therefor, shall
not have objected to the same on the sole ground that the Debtors' good faith
belief is incorrect.
(e) The Debtors shall have satisfied all of their Obligations (as
defined under the DIP Facility) under the DIP Facility, and the DIP Facility
shall have been terminated.
(f) The election by Farm Fresh under Section 5.11(f)(ii) of the
Purchase Agreement, regarding the retention of either or both of Farm Fresh
Stores 210 and 295, shall be reasonably acceptable to the Committee, it being
understood that (i) at least one of the two alternatives for election will be
reasonably acceptable to the Committee, and (ii) within five days after Farm
Fresh's notification of the Committee of its election, the Committee shall
inform Farm Fresh whether its election is reasonably acceptable to the
Committee, and if not, that the alternative election is reasonably acceptable to
the Committee.
(g) The Effective Date shall occur no later than March 5, 1998.
The Confirmation Order shall be deemed annulled at such time as a
condition to the Effective Date that has not been waived in a writing executed
by the Debtors and the Committee can no longer occur. If the Effective Date does
not occur for any reason, then the Plan shall be null and void and, in such
event, nothing contained herein shall be deemed to constitute a waiver or
release of any Claims by or against, or any Interests in, the Debtors or any
other Person or to prejudice in any manner the rights of the Debtors or any
Person in any further proceedings (whether or not such proceedings involve the
Debtors).
8.3 Waiver of Conditions. The Debtors and the Committee may, but shall have
no obligation to, waive any conditions set forth in this Article at any time,
without notice, without leave of or order of the Bankruptcy Court, and without
any formal action other than proceeding to consummate the Plan, with the
exception of Sections 8.1(a) and 8.2(e), the waiver of which will also require
the consent of the DIP Facility Lenders, and with the exception of Sections
8.1(a) and (b) and 8.2(a), (c), and (g), the waiver of which will also require
the consent of the Buyer. The failure to satisfy or waive any condition may be
asserted by the Debtors and the Committee regardless of the circumstances giving
rise to the failure of such conditions to be satisfied (including any action or
inaction by the Debtors).
ARTICLE IX
TITLE TO PROPERTY AND RELEASES
9.1 Vesting of Property. Except as otherwise provided in the Plan or the
Confirmation Order, upon the Effective Date, but retroactive to the Confirmation
Date, (a) Reorganized Farm Fresh shall continue to exist as a separate corporate
entity, with all the powers of a corporation under applicable law and without
prejudice to any right to alter or terminate such existence (whether by merger
or otherwise) under applicable state law, and (b) all property of the estates of
the Debtors, wherever situated, shall vest in Reorganized Farm Fresh, subject to
the provisions of the Plan and the Confirmation Order. After the Effective Date,
but retroactive to the Confirmation Date, all property retained by Reorganized
Farm Fresh pursuant hereto shall be free and clear of all claims, debts, liens,
security interests, encumbrances, and interests of creditors and security
holders of the Debtors, except the obligation to perform according to the Plan,
the Confirmation Order, and the Purchase Agreement, and the claims, debts,
liens, security interests, encumbrances, and interests of Creditors and Interest
Holders arising in connection with or preserved by the Plan with respect to the
Cash Sale Proceeds.
9.2 Non-Discharge. Pursuant to Bankruptcy Code ss.1141(d)(3), the
Confirmation Order shall not discharge Claims against the Debtors. However, no
Creditor or Interest Holder of the Debtors may receive any payment from, or seek
recourse against, any Assets that are to be distributed under the terms of the
Plan, except for those distributions expressly provided for under the Plan. All
Persons are precluded from asserting, against any property that is to be
distributed under the terms of the Plan, any claims, obligations, rights, causes
of action, liabilities, or equity interests based upon any act, omission,
transaction, or other activity of any kind or nature that occurred prior to the
Confirmation Date, other than as expressly provided for in the Plan, the
Confirmation Order, or the Purchase Agreement, whether or not (a) a Proof of
Claim based upon such debt is filed or deemed filed under Bankruptcy Code
ss.501; (b) a Claim based upon such debt is allowed under Bankruptcy Code
ss.502; or (c) the Holder of a Claim based upon such debt has accepted the Plan.
Except as otherwise provided in the Plan, the Confirmation Order, or the
Purchase Agreement, all Holders of Allowed Claims and Allowed Interests arising
prior to the Effective Date shall be permanently barred and enjoined from
asserting against the Debtors, their successors, or the Assets, any of the
following actions on account of such Allowed Claim or Interest: (a) commencing
or continuing in any manner any action or other proceeding on account of such
Claim or Interest against property to be distributed under the terms of the
Plan, other than to enforce any right to distribution with respect to such
property under the Plan; (b) enforcing, attaching, collecting, or recovering in
any manner any judgment, award, decree, or order against any of the property to
be distributed under the terms of the Plan, other than as permitted under
sub-paragraph (a) above; and (c) creating, perfecting, or enforcing any lien or
encumbrance against any property to be distributed under the terms of the Plan.
9.3 Post-Consummation Effect of Evidences of Claims or Interests. Notes,
stock certificates, and other evidences of Claims against or Interests in the
Debtors shall, effective upon the Effective Date, represent only the right to
participate in the distributions contemplated by the Plan, if any.
9.4 Term of Injunctions or Stays. Unless otherwise provided, all
injunctions or stays provided for in these Cases pursuant to Bankruptcy Code
ss.105, ss.362, or otherwise, and in effect on the Confirmation Date, shall
remain in full force and effect until the Effective Date.
9.5 Releases.
(a) On the Effective Date, the rights afforded to Holders of
Allowed Claims and Allowed Interests (collectively, the "Releasing Parties") by
and in the Plan and the Exhibits thereto shall be in exchange for and in
complete release, satisfaction, and discharge of any and all claims of any kind
or nature arising on or prior to the Effective Date against the Debtors or the
Assets and any and all claims arising out of or related to Claims or Interests
that any Releasing Party has or may have against any Person who at the Effective
Date is, or at the Petition Date was, an Affiliate of the Debtors or any Holder
of an Allowed Claim or Allowed Interest (including without limitation, the Old
Credit Agreement Banks and the DIP Facility Lenders) or any member of the
Committee or any present or former shareholders, directors, officers, employees,
agents, advisors, attorneys, professional persons, and representatives of the
Debtors, each such Affiliate, each such Holder, and each such member of the
Committee, and their respective heirs, representatives, successors, and assigns,
in whatever capacity (collectively, with the Debtors, the "Released Parties"),
including without limitation, claims arising from ownership of securities under
fraudulent conveyance or other laws relating to creditors' rights generally,
claims with respect to securities laws, and claims related to fiduciary
obligations. The Releasing Parties deemed to have released claims pursuant to
this Section 9.5(a) shall be forever precluded from directly or indirectly
asserting any such claims against any of the Released Parties, or their assets,
or any of their Affiliates, or any of their present or former directors,
officers, employees, agents, advisors, attorneys, professional persons, or
representatives, or their respective heirs, representatives, successors, or
assigns. To the extent that any of the Releasing Parties may be entitled to
recover from any of the Released Parties, whether through the Convertible
Debentures Subordination Provisions, the Holdings Notes Subordination
Provisions, or otherwise, the proceeds of any claims released herein (other than
any such claims against the Debtors), whether brought by one of the Releasing
Parties or by any other Person, such Releasing Parties hereby assign all of
their right, title, and interest in such proceeds to the Released Party against
whom such proceeds are recovered. In addition, the Senior Noteholders hereby
assign all of their right, title, and interest in the Convertible Debentures
Subordination Provisions and the Holdings Notes Subordination Provisions to such
of the Released Parties who may be affected by any action covered thereby.
(b) Except with respect to the rights under the Holdings Notes
Subordination Provisions and the proceeds assigned pursuant to Section 9.5(a)
hereof, on the Effective Date, the Released Parties and the Debtors shall hereby
be deemed to completely release any Releasing Party from any and all claims of
any kind or nature arising on or prior to the Effective Date against any such
Releasing Party or its assets or any of its Affiliates, or any present or former
shareholders, directors, officers, employees, agents, advisors, attorneys,
professional persons, or representatives, and their respective heirs,
representatives, successors, and assigns, in whatever capacity; provided,
however, that no such right or claim shall be deemed released in connection with
any and all Bankruptcy Claims, or in connection with any adversary proceeding or
contested matter pending on the Confirmation Date. The Released Parties deemed
to have released claims pursuant to this Section 9.5(b) shall be forever
precluded from asserting any such claims against any Releasing Party, or its
assets, or any of its Affiliates, or any of its present or former directors,
officers, employees, agents, advisors, attorneys, professional persons, or
representatives, or their respective heirs, representatives, successors, or
assigns.
(c) On the Effective Date, provided that FF Acquisition is the Buyer,
except with respect to obligations under the Purchase Agreement, the Debtors on
the one hand and Richfood and its Affiliates on the other shall be deemed to
have each released the other from any and all claims of any kind or nature
arising on or prior to the Effective Date. From and after the Effective Date,
the Debtors on the one hand and Richfood on the other shall be forever precluded
from directly or indirectly asserting any such released claims against the
other, their assets, or any of their Affiliates or any of their present or
former directors, officers, employees, agents, advisors, attorneys, professional
persons, or representatives, or their respective heirs, representatives,
successors, or assigns.
(d) Notwithstanding any provision of the Plan to the contrary, the
releases contained in this Section 9.5 shall not be construed as or operate as a
release of or limitation on (i) claims between and among the Releasing Parties
and the Released Parties that do not relate to or involve the Debtors, or (ii)
objections to Claims or Interests.
9.6 Release of Directors, Officers, Etc. On the Effective Date, the Debtors,
on their own behalf, and on behalf of all the Debtors' stockholders and
Creditors derivatively, hereby waive, release, and discharge all present or
former shareholders, directors, officers, employees, agents, advisors,
attorneys, professional persons, and representatives of the Debtors, and their
respective heirs, representatives, successors, and assigns, from all liability
based upon any act or omission related to past service with, for, or on behalf
of the Debtors or their Affiliates. The immediately preceding sentence shall
not, however, apply to (i) any indebtedness of any Person to the Debtors for
money borrowed by such Person, or (ii) any setoff or counterclaim that the
Debtors may have or assert against any Person, provided that the aggregate
amount thereof shall not exceed the aggregate amount of any Claims held or
asserted by such Person against the Debtors. Holders of Claims and Interests
against the Debtors shall be enjoined from commencing or continuing any action,
employment of process, or act to collect, offset, or recover any such claim that
could be brought on behalf of or in the name of the Debtors.
9.7 Preservation of Insurance. Notwithstanding anything provide herein to
the contrary, the Plan shall not be deemed in any way to diminish or impair the
enforceability of any insurance policies that may cover claims against the
Debtors or any other Person.
ARTICLE X
MODIFICATION AND RESERVATION OF RIGHTS IN THE
EVENT OF NONACCEPTANCE OF THE PLAN
The Debtors hereby reserve the right to request that the Bankruptcy Court
confirm the Plan over the objection of any impaired Class or Interest in
accordance with the applicable provisions of Bankruptcy Code ss.1129(b). In the
event that any impaired Class or Classes of Allowed Claims or Allowed Interests
shall not accept the Plan, upon the written request of the Debtors filed with
the Bankruptcy Court, the Plan shall be modified, revised, and amended to
provide such treatment as set forth in such request, to assure that the Plan
does not discriminate unfairly, and is fair and equitable, with respect to the
Classes rejecting the Plan, and, in particular, the treatment necessary to meet
the requirements of Bankruptcy Code ss.1129(a) and (b) with respect to (i) the
rejecting Classes and (ii) any other Classes adversely affected by the
modifications caused by this Article, provided that such requested treatment is
reasonably acceptable to the Committee. In particular, the treatment of any
rejecting Classes or adversely affected Classes shall be modified and amended
from that set forth in Article V, even if less favorable, to the minimum
treatment necessary to meet the requirements of Bankruptcy Code ss.1129(a) and
(b). These modifications may include, but not be limited to, cancellation of all
amounts otherwise payable under the Plan to the rejecting Classes and to any
junior Classes affected thereby (even if such Classes previously accepted the
Plan) consistent with Bankruptcy Code ss.1129(b)(2)(B)(ii) and (C)(ii).
ARTICLE XI
RETENTION OF JURISDICTION
11.1 Claims and Actions. Following the Effective Date, the Bankruptcy Court
shall retain such jurisdiction over these Cases as is legally permissible,
including without limitation, such jurisdiction as is necessary to ensure that
the purposes and intent of the Plan are carried out. The Bankruptcy Court shall
also expressly retain jurisdiction: (a) to hear and determine all Claims against
the Debtors and (b) to enforce all causes of action that may exist on behalf of
the Debtors.
11.2 Retention of Additional Jurisdiction. Following the Effective Date, the
Bankruptcy Court shall also retain jurisdiction for the purpose of
classification of Claims and Interests, the re-examination of Claims and
Interests that have been allowed, and the determination of such objections as
may be filed to the Claims and Interests, including Bankruptcy Code ss.502(c)
proceedings for estimation of Claims. The Bankruptcy Court shall further retain
jurisdiction for the following additional purposes:
(a) to determine all questions and disputes regarding title to the
respective assets of the Debtors, all causes of action, controversies, disputes,
or conflicts, whether or not subject to any pending action as of the Effective
Date, between either of the Debtors and any other party, including, without
limitation, any right to recover assets pursuant to the provisions of the
Bankruptcy Code;
(b) to modify the Plan after the Effective Date pursuant to the
Bankruptcy Code and the Bankruptcy Rules;
(c) to enforce and interpret the terms and conditions of the
Plan and the Purchase Agreement;
(d) to enter such orders, including, but not limited to, such future
injunctions as are necessary to enforce the respective title, rights, and powers
of the Debtors, and to impose such limitations, restrictions, terms, and
conditions on such title, rights, and powers as the Bankruptcy Court may deem
necessary;
(e) to enter an order closing these Cases;
(f) to correct any defect, cure any omission, or reconcile any
inconsistency in the Plan, the Purchase Agreement, or the Confirmation Order as
may be necessary to implement the purposes and intent of the Plan and the Asset
Sale;
(g) to determine any and all objections to the allowance of Claims or
Interests;
(h) to determine any and all applications for allowances of
compensation and reimbursement of expenses and the reasonableness of any fees
and expenses authorized to be paid or reimbursed under the Bankruptcy Code, the
Purchase Agreement, or the Plan;
(i) to determine any applications or motions pending on the Effective
Date for the rejection of any Executory Contract and to hear and determine,
and, if need be, to liquidate any and all Claims arising therefrom;
(j) to determine any and all applications, adversary proceedings,
and contested matters that may be pending on the Effective Date;
(k) to consider any modification of the Plan, whether or not the
Plan has been substantially consummated, and to remedy any defect or omission or
to reconcile any inconsistency in any order of the Bankruptcy Court, to the
extent authorized by the Plan or the Bankruptcy Court;
(l) to determine all controversies, suits, and disputes that may arise
in connection with the interpretation, enforcement, or consummation of the Plan,
the Purchase Agreement, or the Asset Sale;
(m) to consider and act on the compromise and settlement of any Claim
against or cause of action by or against the Debtors arising under or in
connection with the Plan, the Purchase Agreement, or the Asset Sale;
(n) to issue such orders in aid of execution of the Plan as may be
authorized by Bankruptcy Code ss.1142; and
(o) to determine such other matters or proceedings as may be provided
for under Title 28 or any other title of the United States Code, the Bankruptcy
Code, the Bankruptcy Rules, other applicable law, the Plan, or in any order or
orders of the Bankruptcy Court, including, but not limited to, the Confirmation
Order or any order that may arise in connection with the Plan or the
Confirmation Order.
11.3 Failure of Bankruptcy Court to Exercise Jurisdiction. If the Bankruptcy
Court abstains from exercising or declines to exercise jurisdiction, or is
otherwise without jurisdiction over any matter arising out of these Cases,
including the matters set forth in this Article, this Article shall not prohibit
or limit the exercise of jurisdiction by any other court having competent
jurisdiction with respect to such matter.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Governing Law. Except to the extent the Bankruptcy Code or Bankruptcy
Rules are applicable, and subject to the provisions of any contract, instrument,
release, indenture, or other agreement or document entered into in connection
with the Plan, the rights and obligations arising under the Plan shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without giving effect to the principles of conflicts of law
thereof.
12.2 Headings. The headings of the Articles and Sections of the Plan are
inserted for convenience only and shall not affect the interpretation hereof.
12.3 Revocation. The Debtors reserve the right to revoke or withdraw the
Plan prior to the Confirmation Date. If the Debtors revoke or withdraw the Plan,
then the Plan shall be null and void and, in such event, nothing contained
herein shall be deemed to constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtors or any other Person or to prejudice in
any manner the rights of the Debtors or any Person in any further proceedings
involving the Debtors.
12.4 Successors and Assigns. The rights, benefits, and obligations of any
Person named or referred to in the Plan shall be binding upon, and shall inure
to the benefit of, the heir, executor, administrator, successor, or assign of
such Person.
12.5 Time. In computing any period of time prescribed or allowed by the
Plan, the day of the act, event, or default from which the designated period of
time begins to run shall not be included. The last day of the period so computed
shall be included, unless it is not a Business Day or, when the act to be done
is the filing of a paper in court, a day on which weather or other conditions
have made the clerk's office inaccessible, in which event the period runs until
the end of the next day which is not one of the aforementioned days. When the
period of time prescribed or allowed is less than eight calendar days,
intermediate days that are not Business Days shall be excluded in the
computation.
12.6 Construction. The rules of construction set forth in Bankruptcy Code
ss.102 shall apply to the construction of the Plan.
12.7 Amendments. The Plan may be amended, modified, or supplemented by the
Debtors before or after the Confirmation Date in the manner provided for by
Bankruptcy Code ss.1127.
12.8 No Penalty or Late Charges. Except as expressly stated in the Plan, or
allowed by a Final Order of the Bankruptcy Court, no penalty or late charge is
to be allowed on any Claim or Interest subsequent to the Petition Date.
12.9 No Attorneys' Fees. No attorneys' fees shall be paid with respect to
any Claim or Interest except as specified herein or as allowed by a Final Order
of the Bankruptcy Court.
12.10 Amounts of Claims and Interests. All references to Claims and
Interests and amounts of Claims and Interests refer to the amount of the Claim
or Interest allowed by Final Order of the Bankruptcy Court or by the Plan;
provided, however, that Claims and Interests that have been objected to and that
have not been allowed or disallowed prior to the day set for return of ballots
shall be voted and counted at the amount as estimated by the Bankruptcy Court.
The Debtors and other interested parties reserve the right, both before and
after Confirmation, to object to Claims and Interests so as to have the
Bankruptcy Court determine or estimate the Allowed amount of such Claim or
Interest under the Plan.
12.11 Exculpation. The Debtors, Reorganized Farm Fresh, and the Committee,
and their present and former shareholders, officers, directors, employees,
attorneys, accountants, consultants, professional persons, and agents, shall not
have or incur any liability to any Person for any act or omission in connection
with or arising out of their administration of the Plan or the property to be
distributed under the Plan, and in all respects shall be entitled to rely upon
the advice of counsel with respect to their duties and responsibilities under
the Plan and shall be fully protected in acting or in refraining from action in
accordance with such advice.
12.12 Waiver of Subordination. Except as provided in the Plan, all Creditors
and Interest Holders shall be deemed to have waived any and all equitable and
contractual subordination rights that they may have with respect to the
distributions made pursuant to the Plan, and the Bankruptcy Court in the
Confirmation Order shall permanently enjoin, effective as of the Effective Date,
all Creditors and Interest Holders from enforcing or attempting to enforce any
such rights against any Person receiving distributions under the Plan.
12.13 Amendments to Articles of Incorporation and Bylaws. From and after the
Effective Date, amendments to the articles of incorporation and bylaws of
Reorganized Farm Fresh shall be carried out in accordance with applicable state
law.
12.14 Section 1145 Exemption. Pursuant to Bankruptcy Code ss.1145(a)(1), the
issuance of any securities under the Plan, including without limitation the New
Common Stock and the Warrants, shall be exempt from the registration
requirements of the Securities Act of 1933, as amended, and any state or local
laws requiring registration for the sale of securities. Such securities, when
issued or sold, shall be freely transferable by the recipients thereof, subject
to: (i) the provisions of Bankruptcy Code ss.1145(b) relating to "underwriters,"
as defined therein, (ii) any restrictions contained in the terms of the
securities themselves; and (iii) any restriction on the securities that has been
agreed to by the holder of the securities with respect thereto.
12.15 Section 1146 Exemption. Pursuant to Bankruptcy Code ss.1146(c), the
issuance, transfer, or exchange of any security under the Plan; the making or
delivery of any instrument of transfer pursuant to, in implementation of, or as
contemplated by the Plan or the Purchase Agreement; and the revesting, transfer,
or sale of any real or personal property of the Debtors pursuant to, in
implementation of, or as contemplated by the Plan or the Purchase Agreement
shall not be taxed under any state or local law imposing a stamp tax, transfer
tax, or similar tax or fee.
12.16 Dissolution of the Committee. On the Effective Date, the Committee
shall dissolve and the members of the Committee shall be released and discharged
from all rights and duties arising from or related to these Cases. Unless
otherwise agreed by Reorganized Farm Fresh, the professionals retained by the
Committee and the members thereof shall not be entitled to compensation or
reimbursement of expenses for any services rendered after the Effective Date,
except for services rendered and expenses incurred in connection with any
applications for allowance of compensation and reimbursement of expenses pending
on the Effective Date and approved by the Bankruptcy Court.
<PAGE>
12.17 Further Actions. The Debtors and Reorganized Farm Fresh shall be
authorized to execute, deliver, file, or record such documents, contracts,
instruments, releases, and other agreements and to take such other action as may
be necessary to effectuate and further evidence the terms and conditions of the
Plan and the Asset Sale.
Dated: January 7, 1998
FF HOLDINGS CORPORATION
Debtor and Debtor-in-Possession
By: ________________________
Chairman and Chief
Executive Officer
FARM FRESH, INC.
Debtor and Debtor-in-Possession
By: ________________________
Chairman and Chief
Executive Officer
Submitted By:
Robert A. Baime, Esquire
Joel H. Levitin, Esquire
DECHERT PRICE & RHOADS
30 Rockefeller Plaza
New York, NY 10112
(212) 698-3558
Attorneys for the Debtors and
Debtors-in-Possession
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
) CHAPTER 11
In re: )
)
FF HOLDINGS CORPORATION, and ) Case No. 98-37 (JJF)
FARM FRESH, INC., ) Case No. 98-38 (JJF)
)
Debtors. ) Jointly Administered
ORDER APPROVING DISCLOSURE STATEMENT,
CONFIRMING DEBTORS' JOINT PLAN OF REORGANIZATION,
AND APPROVING ASSET PURCHASE AGREEMENT
FF Holdings Corporation ("Holdings") and Farm Fresh, Inc. ("Farm Fresh"),
the above-captioned debtors and debtors-in-possession (collectively, the
"Debtors"), having filed with this Court separate, voluntary petitions under
Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") on
January 7, 1998 (the "Petition Date"), and having previously solicited votes to
accept or reject their proposed joint plan of reorganization (the "Plan")1 from
parties-in-interest who are impaired under the Plan in accordance with the
requirements of Section 1126(b) of the Bankruptcy Code, by means of a disclosure
statement (the "Disclosure Statement") and ballots; and the Debtors having filed
with this Court the Plan, dated January 7, 1998, a true and correct copy of
which is attached hereto as Exhibit A and incorporated by reference herein,
which provides, among other things, for the sale (the "Asset Sale") of certain
assets (the "Purchased Assets"), including the assumption and assignment of
certain executory contracts and unexpired leases (the "Transferred Executory
Contracts") to FF Acquisition, L.L.C. ("FF Acquisition"), a subsidiary of
Richfood Holdings, Inc. ("Richfood"), in accordance with the terms of a purchase
agreement dated November 26, 1997 (the "Purchase Agreement"), a true and correct
copy of which was attached to the Disclosure Statement as Exhibit C and is
incorporated by reference herein, and the administration and distribution of the
proceeds thereof and of the other assets of the Debtors' estates; and the
Debtors having also filed with this Court the Disclosure Statement; and the
Debtors having supplied notice of the date, time, and place for the hearing to
consider approval of the Disclosure Statement and confirmation of the Plan and
the deadline for objecting to same; and a hearing to consider approval of the
Disclosure Statement and confirmation of the Plan and other matters relating to
confirmation having been held before this Court on February 10, 1998 (the
"Hearing"), after due notice, and parties-in-interest having had an opportunity
to appear and be heard at the Hearing; and this Court having considered the
Disclosure Statement, the Plan, and the Purchase Agreement; and based upon all
other pleadings and papers heretofore filed herein, all proceedings heretofore
had herein, and the record of the Hearing; and after due deliberation and good
and sufficient cause appearing therefor, including those reasons set forth in
the Opinion of this Court dated February 17, 1998; and
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1 Capitalized terms not otherwise defined in this Order shall have the meaning
ascribed to such terms in the Plan.
IT APPEARING and the Court having found and determined that:
Jurisdiction and Notice
A. This Court has jurisdiction of these Cases, the Disclosure Statement,
the Plan, the Purchase Agreement, and the approval and confirmation of same
pursuant to 28 U.S.C. ss. 1334. Approval of the Disclosure Statement is a
core proceeding pursuant to 28 U.S.C. ss. 157(b)(1); confirmation of the Plan
is a core proceeding pursuant to 28 U.S.C. ss. 157(b)(1) and (2)(L); and
approval of the Purchase Agreement and the assignment and assumption of the
Transferred Executory Contracts is a core proceeding pursuant to 28 U.S.C.
ss. 157(b)(1) and (2)(N) and (O). Venue of these cases in this district is
proper pursuant to 28 U.S.C. ss.ss. 1408 and 1409.
B. Due, proper, and adequate notice of the time for objections and the
hearing on approval of the Disclosure Statement and confirmation of the Plan
and the Asset Sale pursuant to the Purchase Agreement was given in accordance
with: (1) Rule 2002(b)(2) of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules"); (2) the Notice of (i) Hearing to Consider Approval of the
Debtors' Disclosure Statement and Form of Ballots and Solicitation Procedures,
and (ii) Hearing to Consider Confirmation of the Debtors' Joint Plan of
Reorganization, approved by this Court on January 7, 1998; (3) the publication
of such Notice in The Wall Street Journal (national edition), and in local
newspapers in the markets in which Farm Fresh has stores, including, the
Virginia Pilot, Daily Press, Richmond Times Dispatch, Daily News Records, and
News Leader; (4) the Order Reducing Required Notice Periods, dated January 15,
1998; and (5) the Order Approving Notice of Proposed Assumption and Assignment
of Executory Contracts and Unexpired Leases Pursuant to Joint Plan of
Reorganization, dated February 20, 1998.
C. The Plan, the Disclosure Statement, and the ballots for voting for or
against the Plan were properly and timely transmitted to holders of impaired
Claims and Interests in these cases in accordance with the requirements of the
Bankruptcy Code, and votes on the Plan were properly solicited and tabulated.
Responses and Objections
D. The following parties filed responses and/or objections to approval of
the Disclosure Statement, confirmation of the Plan, and/or related matters:
Objecting Party Approximate Date Filed
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Edith Poetzschke January 26, 1998
The Fresh Market, Inc. January 28, 1998
Alma and Gabriel Elias February 4, 1998
Sea Fin Holding Corporation February 5, 1998
John Knox Limited Partnership February 5, 1998
First Bank National Association,
as Indenture Trustee February 6, 1998
Crestar Bank, as Indenture
Trustee February 6, 1998
The United States of America February 6, 1998
Carol Martin, Sharon A. Barish,
and Opal Bowman February 6, 1998
Buckroe Associates,
Churchland Farm Fresh Associates,
Commonwealth Associates,
Commonwealth Associates/York
County, L.L.C., and
Summit Realty, L.L.C. February 6, 1998
E. All objections that have been filed were resolved, are granted
to the extent reflected herein, or are hereby overruled and denied, in
accordance with, among other things, the Opinion of this Court dated February
17, 1998.
<PAGE>
Disclosure Statement
F. The Disclosure Statement complies with the requirements of
Section 1125 of the Bankruptcy Code and Bankruptcy Rule 3017(b).
G. The Disclosure Statement contains information of a kind, and in
sufficient detail, as far as is reasonably practicable in light of the nature
and history of the Debtors and the condition of the Debtors' books and records,
that would enable a hypothetical reasonable investor typical of Holders of
Claims or Interests of the relevant Classes to make an informed judgment about
the Plan.
H. The same disclosure statement was transmitted to each holder of a Claim
or Interest of each particular Class whose vote on the Plan was solicited, and,
although not required by the Bankruptcy Code, the same disclosure statement was
transmitted to all Classes whose votes on the Plan were solicited.
Plan of Reorganization
I. The Plan complies with the applicable provisions of the Bankruptcy
Code, including sections 1122 and 1123, in accordance with 11 U.S.C. ss.
1129(a)(1).
J. The classification of Claims and Interests in Article II of the Plan
satisfies the requirements of 11 U.S.C. ss. 1122.
K. Article II of the Plan adequately designates classes of Claims and
Interests, in accordance with 11 U.S.C. ss. 1123(a)(1).
L. Section 4.1 of the Plan specifies the unimpaired Classes, in
accordance with 11 U.S.C. ss. 1123(a)(2).
M. Article V of the Plan specifies the treatment of each impaired Class,
in accordance with 11 U.S.C. ss. 1123(a)(3).
N. The Plan provides the same economic treatment for each Claim or Interest
of a particular Class, except to the extent that Holders of particular Claims or
Interests have agreed to less favorable treatment, in accordance with 11 U.S.C.
ss. 1123(a)(4).
O. Article VI of the Plan provides adequate means for the implementation
thereof, including, among other things, providing for the sale of substantially
all of Farm Fresh's assets to FF Acquisition, the liquidation of any remaining
assets of the Debtors, and the distribution of the proceeds thereof, in
accordance with 11 U.S.C. ss. 1123(a)(5).
P. Section 6.12 of the Plan provides that on or prior to the Effective Date,
the Articles of Incorporation of Reorganized Farm Fresh will be amended to
satisfy the provisions of the Plan and 11 U.S.C.ss.1123(a)(6).
Q. The Plan provides for the selection of officers and directors and
successors thereto in a manner consistent with the interests of creditors and
equity security holders and with public policy, in accordance with 11 U.S.C.
ss. 1123(a)(7).
R. The proponents of the Plan (i.e., the Debtors) have complied with the
applicable provisions of the Bankruptcy Code, in accordance with 11 U.S.C. ss.
1129(a)(2).
S. The Plan has been proposed in good faith and not by any means forbidden
by law, in accordance with 11 U.S.C. ss. 1129(a)(3).
T. Any payment made or to be made by the Debtors, or any person issuing
securities or acquiring property under the Plan, for services or for costs and
expenses in or in connection with the Debtors' Chapter 11 Cases or in connection
with the Plan and incident to the Debtors' Chapter 11 Cases to be paid by the
Debtors, has been approved by, or is subject to the approval of, the Court as
reasonable, in accordance with 11 U.S.C. ss. 1129(a)(4).
U. Prior to the Effective Date, the Committee shall disclose the identity
and affiliations of any individual proposed to serve, after confirmation of the
Plan, as a director, officer, or voting trustee of the Debtors and Reorganized
Farm Fresh; and the appointment to, or continuance in such office of such
individuals, shall be consistent with the interests of creditors and equity
security holders and with public policy, in accordance with 11 U.S.C. ss.
1129(a)(5)(A).
V. The Debtors have disclosed the identity of any insider that may be
employed or retained by Reorganized Farm Fresh, and the nature of any
compensation for such insider, in accordance with 11 U.S.C. ss. 1129(a)(5)(B).
W. There are no rate changes provided for in the Plan, and there is no
governmental regulatory commission with jurisdiction, after confirmation of the
Plan, over any rates of the Debtors in any event, pursuant to 11 U.S.C. ss.
1129(a)(6).
X. With respect to each impaired Class of Claims and each Class of Interests
under the Plan, each Holder of a Claim or Interest of such Class (i) has
accepted the Plan, or (ii) will receive or retain under the Plan on account of
such Claim or Interest property of a value, as of the Effective Date of the
Plan, that is not less than the amount that such Holder would so receive or
retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code, in
accordance with 11 U.S.C. ss. 1129(a)(7). No Creditor has made an election
pursuant to 11 U.S.C. ss. 1111(b)(2).
Y. With respect to 11 U.S.C. ss. 1129(a)(8), each Class of Claims and
Interests under the Plan, other than Classes 3A and 3C, has voted to accept the
Plan or such Class is not impaired under the Plan, and Classes 3B, 4, 5A, 6, and
7 are impaired and voted to accept the Plan. Classes 1, 2A, 2B, and 3D are not
impaired under the Plan, and are thus conclusively presumed to have voted to
accept the Plan.
Z. The Plan does not discriminate unfairly and is fair and equitable with
respect to Classes 3A and 3C in that no Holders of any Claim or Interest junior
to the Claims of such Classes of unsecured creditors will receive or retain any
property under the Plan on account of such junior Claim or Interest, in
accordance with 11 U.S.C. ss. 1129(b)(2)(B).
AA. Except to the extent that the Holder of a particular Claim has agreed to
different treatment of such Claim, the Plan provides that:
(a) each Holder of a Claim of a kind specified in Section 507(a)(1)
and (2) of the Bankruptcy Code, shall receive on account of such Claim cash
equal to the value of the Allowed amount of such Claim, in accordance with 11
U.S.C. ss. 1129(a)(9)(A);
(b) each Holder of a Claim arising under Section 507(a)(3), (4), (5),
(6), and (7) of the Bankruptcy Code, if any, shall receive on account of such
Claim a cash payment of a value equal to the Allowed amount of such Claim, in
accordance with 11 U.S.C. ss. 1129(a)(9)(B);
(c) each Holder of a Claim arising under Section 507(a)(8) of the
Bankruptcy Code shall receive on account of such Claim a cash payment equal to
the Allowed amount of such Claim, in accordance with 11 U.S.C. ss.
1129(a)(9)(C).
BB. At least one Class of Claims that is impaired has accepted the Plan,
determined without including any acceptance of the Plan by any insider, in
accordance with 11 U.S.C. ss. 1129(a)(10).
CC. The Plan is feasible. Confirmation of the Plan is not likely to be
followed by the liquidation, or the need for further financial reorganization,
of the Debtors or any successors thereof, except to the extent such liquidation
is proposed in the Plan, in accordance with 11 U.S.C. ss. 1129(a)(11). There is
a reasonable prospect that the Debtors will meet their financial obligations
under the Plan.
DD. All fees payable under 28 U.S.C.ss. 1930 have been paid or will be paid
pursuant to the Plan, in accordance with 11 U.S.C. ss. 1129(a)(12).
EE. The Plan provides for the continuation after the Effective Date of
payment of all retiree benefits, if any, as that term is defined in Section
1114 of the Bankruptcy Code, to the extent required by 11 U.S.C. ss.
1129(a)(13).
FF. The Debtors' decisions regarding the rejection, assumption, and
assignment of executory contracts as provided in and contemplated by the Plan
and herein are based on and are within the sound business judgment of the
Debtors and are in the best interests of the Debtors and their respective
estates.
GG. Each of the settlements provided in and contemplated by the Plan and
herein, if any, falls within a range of reasonableness for the resolution of
complex litigation and is fair and equitable and in the best interests of the
Debtors and their estates, Creditors, and Interest Holders.
HH. The conditions to confirmation set forth in Section 8.1 of the Plan have
been satisfied, unless otherwise waived, in that this Order is acceptable in
form and substance to the Debtors, to the Committee, to FF Acquisition, and to
the DIP Facility Lenders, and the Purchase Agreement is in full force and effect
and is binding on the parties thereto.
Purchase Agreement
II. Time is of the essence in consummating the sale of the Purchased Assets
to FF Acquisition as contemplated by the Purchase Agreement, including but not
limited to, the assumption by Farm Fresh and assignment to FF Acquisition of the
Transferred Executory Contracts in accordance with the Purchase Agreement, the
Plan, and this Order.
JJ. The Purchase Agreement represents a fair and reasonable offer to
purchase the Purchased Assets under the circumstances of these Chapter 11
Cases.
KK. The terms of the transactions contemplated by the Purchase Agreement, as
set forth therein, are fair and reasonable under the circumstances of these
Chapter 11 Cases.
LL. The Asset Sale is in the best interests of the Debtors' prepetition
and postpetition creditors, the Debtors, the DIP Facility Lenders, and other
parties-in-interest, and is supported by the DIP Facility Lenders, the
Committee, the classes of Creditors and Interest Holders that voted to accept
the Plan, the Debtors, and other parties-in-interest.
MM. FF Acquisition has entered into the Purchase Agreement in good faith and
is a good faith purchaser within the m eaning of 11 U.S.C. ss. 363(m), and is
therefore entitled to the protection of that provision with respect to the
Purchase Agreement, and otherwise has proceeded in good faith in all respects in
connection with the Purchase Agreement and the transactions contemplated therein
in that:
(a) FF Acquisition recognized that the Debtors were free to deal with
any other party interested in purchasing assets of the Debtors;
(b) All payments to be made by FF Acquisition and other agreements or
arrangements entered into by FF Acquisition have been disclosed;
(c) All material post-closing employment arrangements made by FF
Acquisition with Farm Fresh's senior management have been disclosed;
(d) FF Acquisition has not violated 11 U.S.C.ss. 363(n) by any action
or inaction; and
(e) The negotiation and execution of the Purchase Agreement and all
other aspects of the transactions contemplated therein were in good faith.
NN. The transactions contemplated within the Purchase Agreement are not
being entered into to escape liability for the Debtors' debts. The Debtors'
estates are unable to satisfy the Debtors' debts.
OO. FF Acquisition is not merely a continuation of Farm Fresh in that:
(a) Except for certain executive employment agreements that are
assumed pursuant to Section 6.1(a) of the Purchase Agreement, those of Farm
Fresh's employees who are to be retained by FF Acquisition are being hired under
new employment contracts and/or other employment arrangements to be entered into
or to become effective at or after the time of the Closing. As set forth in the
Purchase Agreement, FF Acquisition is not assuming any of Farm Fresh's
obligations to its employees, except as may be part of the Assumed Liabilities
(as defined in the Purchase Agreement).
(b) No common identity of incorporators, officers, directors, or
stockholders exists among FF Acquisition and Farm Fresh;
(c) FF Acquisition is not purchasing all of Farm Fresh's assets. The
assets that FF Acquisition is not purchasing include, but are not limited to, a
number of Farm Fresh's executory contracts and unexpired leases (and all
inventory, cash, accounts receivable, and prepaid expenses owned by Farm Fresh
and related thereto), certain licenses and permits that are not legally
transferable and assignable to FF Acquisition, and all letters of credit.
PP. FF Acquisition has provided adequate assurance of future performance
under the Transferred Executory Contracts, as required by 11 U.S.C. ss.
365(b), and there are no legal impediments to the assumption and assignment of
such Transferred Executory Contracts, pursuant to 11 U.S.C. ss. 365(c).
THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that:
1. The findings of this Court as set forth herein shall constitute
findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, which
is applicable to this matter by virtue of Bankruptcy Rule 9014.
2.The Disclosure Statement is hereby approved in all respects.
3.The Plan is hereby confirmed in all respects, except to the extent
specifically modified herein.
4. The Purchase Agreement, including the Asset Sale and all transactions
contemplated therein and thereby, is hereby approved in all respects.
5.Notwithstanding anything to the contrary contained in this Order or in the
Plan, the Obligations (as defined under the DIP Facility) under the DIP
Facility and the rights, liens, priorities, and other protections provided to
the DIP Facility Lenders under the DIP Facility and the Final Order (1)
Authorizing Incurrence of Indebtedness with Administrative Super-Priority,
Secured by Liens On and Security Interests in all Assets of Farm Fresh and
Guaranteed by FF Holdings and (2) Granting Other Relief, dated January 28, 1998
(the "Final Financing Order"), shall survive the occurrence of the Confirmation
Date and continue in full force and effect until the Effective Date.
6. The Debtors are authorized and directed, on the Effective Date, to pay in
full in cash to Fleet Capital Corporation, as agent for the DIP Facility Lenders
("Fleet Capital"), all Obligations (as defined under the DIP Facility) owing
under the DIP Facility on the Effective Date. Upon the Effective Date and the
receipt by Fleet of all such amounts, Fleet's and the DIP Facility Lenders'
commitments to make loans or issue letters of credit under the DIP Facility
and/or the Final Financing Order shall be terminated.
7. Upon the Effective Date and the payment by the Debtors in full in cash
of all Obligations (as defined under the DIP Facility) under the DIP Facility
owing to the DIP Facility Lenders, as provided above, the Purchased Assets shall
be transferred, sold, and delivered to FF Acquisition free and clear of all
liens, encumbrances, obligations, liabilities, contractual commitments, and
claims, including, without limitation, any theory of successor liability, de
facto merger, or substantial continuity, whether based in law or equity,
employee benefit obligations (including, without limitation, ERISA), any
security interest, mortgage, lien, charge against or interest in property,
adverse claim, claim of possession, right of way, license, easement, or
restriction of any kind, including, but not limited to, any restriction on the
use, voting, transfer, receipt of income, or other exercise of any attributes of
ownership or any option to purchase, option, charge, retention agreement which
is intended as security, or other matters (collectively, the "Liens") of any
person or entity that encumber or relate to or purport to encumber or relate to
the Purchased Assets, and all such Liens shall attach to the proceeds of the
Purchased Assets, to be distributed in accordance with the Plan; provided,
however, that the Purchased Assets are transferred subject to the Assumed
Liabilities (as defined in the Purchase Agreement) and the post-Effective Date
closing liabilities under any Transferred Executory Contract, pursuant to the
express terms of the Purchase Agreement.
8. The Debtors (and their respective directors and officers), Reorganized
Farm Fresh, FF Acquisition, Richfood, any other entity created or Persons
designated pursuant to the Plan and the Purchase Agreement, and any other
party-in-interest, shall be, and they hereby are, authorized, empowered, and
directed forthwith (a) to take all actions and to issue, execute, deliver, file,
and record all documents as may be necessary or appropriate to implement,
effectuate, and consummate, inter alia, (i) the Plan, as the same may be
modified by this Order, (ii) the Asset Sale, including without limitation, the
assumption and assignment of the Transferred Executory Contracts and the
assumption of the Assumed Liabilities, and the payment therefor, in accordance
with the terms of the Purchase Agreement, and (iii) the dissolution of Holdings,
and (b) to take any other action and to issue, execute, deliver, file, and
record all documents contemplated by the Plan, by the Purchase Agreement, or by
this Order, whether or not any such document is specifically referred to in the
Plan or the Purchase Agreement or any exhibits thereto and without further
application to or order of this Court.
9. All Persons holding Interests or Claims, including those arising from the
rejection of any Executory Contract, that are dealt with under or addressed in
the Plan, the Purchase Agreement, or herein be, and they hereby are, directed to
issue, execute, deliver, file, and record any document, and to take any action
necessary to implement, effectuate, and consummate the Plan and the Purchase
Agreement in accordance with their terms, as may be modified herein, and all
such Persons shall be bound by the terms and provisions of all documents to be
executed by them in connection with the Plan and the Purchase Agreement, whether
or not such documents actually have been executed by such Persons. Pursuant to
11 U.S.C. ss. 1142, the Debtors, Reorganized Farm Fresh, FF Acquisition,
Richfood, and any other entity created or Person designated pursuant to the Plan
or the Purchase Agreement be, and they hereby are, authorized and empowered to
apply to the Bankruptcy Court for entry of an order directing any Person to
issue, execute, deliver, file, or record any document or to perform any other
act necessary to implement, effectuate, and consummate the Plan or the Purchase
Agreement in accordance with their terms, as the same may be modified herein.
10. Upon the consummation of the Purchase Agreement, FF Acquisition shall
take full responsibility and shall assume all liabilities for the Assumed
Liabilities, without any recourse whatever by FF Acquisition or any other party
to the Debtors or Reorganized Farm Fresh, and the Debtors and Reorganized Farm
Fresh shall have no further liability or responsibility related to any of the
Assumed Liabilities in any manner or respect.
11. With respect to any litigation included in the Assumed Liabilities,
including, without limitation, all liabilities associated with that certain
action styled The Fresh Market, Inc. v. Farm Fresh, Inc., Civil Action No.
1:97CV00945, pending in the United States District Court for the Middle District
of North Carolina, Greensboro Division, and the Claims of Carol Martin, Sharon
A. Barish, and Opal Bowman against Farm Fresh, to the extent such Claims arise
out of injuries sustained at Store No. 168, located at Western Branch Boulevard,
Chesapeake, Virginia 23321, or Store No. 197, located at 1615 General Boothe
Boulevard, Virginia Beach, Virginia 23454, upon the consummation of the Purchase
Agreement, FF Acquisition shall assume the prosecution and defense of any such
litigation, shall be deemed substituted for Farm Fresh as a plaintiff,
defendant, or other party, as the case may be, in such litigation, and shall
bear all responsibility for the satisfaction of any and all judgments rendered
against FF Acquisition, as substituted for Farm Fresh, arising from such
litigation.
12. Other than the Assumed Liabilities, or as otherwise specifically set
forth in the Purchase Agreement, FF Acquisition, in acquiring the Purchased
Assets, is not assuming any of the Debtors' liabilities for any expenses, debts,
obligations, liabilities, claims, demands, fines, or penalties arising out of or
in any way related to the Purchased Assets or the operation of the Debtors'
business.
13. As of the Effective Date, the Transferred Executory Contracts, including
all leases, subleases, brokerage and management agreements, and contracts
relating solely to Store #299, located at 460 Wythe Creek Road, Poquoson, VA
23662, notwithstanding their inclusion on Exhibit A-1 to the Plan, shall be
deemed assumed by Farm Fresh and assigned to FF Acquisition in accordance with
the Bankruptcy Code, the Plan, and the Purchase Agreement. The Purchase Price
(as defined in the Purchase Agreement) shall be reduced by $149,202 as a result
of the assumption and assignment of Store #299 to FF Acquisition.
14. All Executory Contracts that are not Transferred Executory Contracts (i)
have been or are to be assumed and retained by Farm Fresh, pursuant to the terms
of the Plan or pursuant to an order of this Court; (ii) are to be assigned to a
party other than FF Acquisition pursuant to a motion to be filed with this
Court, notwithstanding their inclusion on Exhibit A-1 to the Plan and/or
Schedule 2.3D of the Purchase Agreement (a list of such Executory Contracts is
attached hereto as Exhibit B); (iii) are to be rejected pursuant to a motion to
be filed with this Court, notwithstanding any previous characterization (a list
of all such Executory Contracts is attached hereto as Exhibit C); (iv) are
identified as "to be rejected" on the list attached to the Plan as Exhibit A-1
and not included on Exhibit B hereto; (v) are identified as "Non-Assumed
Contracts" on Schedule 2.3D of the Purchase Agreement (Farm Fresh reserves the
right to file a motion with this Court requesting assumption or rejection of the
Executory Contracts listed on Exhibit D attached hereto within 30 days of the
date hereof; if no such motion is filed, such Executory Contracts shall be
deemed rejected); or (vi) are rejected pursuant to the terms of the Plan. All
other Executory Contracts not specifically addressed by paragraph 13 and the
first sentence of paragraph 14 hereof are hereby deemed rejected.
15. For all Transferred Executory Contracts on which there has been default
and which are assumed by Farm Fresh and assigned to FF Acquisition pursuant to
the Plan and hereunder, FF Acquisition shall promptly cure or provide adequate
assurance that it will promptly cure any such default.
16. Upon consummation of the Asset Sale pursuant to the Purchase Agreement,
FF Acquisition shall become obligated on all of the Transferred Executory
Contracts, and shall perform all of the obligations thereunder in accordance
with their terms and conditions, without any recourse whatever by FF Acquisition
or any other party to the Debtors or Reorganized Farm Fresh, and the Debtors and
Reorganized Farm Fresh shall have no further liability or responsibility related
to any of the Transferred Executory Contracts in any manner or respect.
17. To the extent that any party to a Transferred Executory Contract has not
been given notice of the assumption and assignment of such Transferred Executory
Contract prior to the date hereof, notwithstanding any findings contained
herein, such party shall be permitted, on or before March 31, 1998, to file with
this Court an objection to such assumption and assignment and request a hearing
thereon. If no such objection and request for hearing is timely filed, the
assumption and assignment shall be deemed final.
18. Should an order be entered, which is no longer subject to modification
or appeal, sustaining an objection to the assumption and assignment of a
Transferred Executory Contract of nonresidential real property, then Farm Fresh
and Reorganized Farm Fresh shall indemnify and hold FF Acquisition harmless from
any loss, costs, expenses, or damages that FF Acquisition may incur as a result
of such order, which indemnification claim shall, as to Farm Fresh, be an
Administrative Claim.
19. Pursuant to 11 U.S.C. ss. 363(m), the reversal or modification of the
Asset Sale, including the assumption and assignment of the Transferred
Executory Contracts, as provided for in this Order, as well as any order
appointing a trustee or examiner, dismissing these Chapter 11 Cases, or
converting these Cases to Cases under Chapter 7, shall not affect the validity
of any transfer or conveyance pursuant hereto entered into in good faith prior
to such reversal or modification unless, prior to the transfer or conveyance,
this Order and such transfer or conveyance is stayed pending appeal.
20. All insurance policies of the Debtors providing coverage to the Debtors'
directors, officers, shareholders, agents, employees, representatives, and
others for conduct in connection with the Debtors, to the extent such policies
are Executory Contracts, are hereby deemed assumed by the Debtors as of the
Confirmation Date. Whether such policies are Executory Contracts or not, if they
have not done so already, on or prior to the Effective Date, the Debtors (i)
shall cure any defaults under such insurance policies and (ii) shall purchase
"tail" coverage for a period of six years with respect to any such policies, all
as a cost and expense of administering these Cases and preserving the Debtors'
estates, provided that the aggregate cost of such assumption, cure, and "tail"
does not exceed $600,000.
21. The Executory Contracts identified as "to be rejected" on the list
attached to the Plan as Exhibit A-1, with the exception of those associated with
Store #299 and those Executory Contracts listed on Exhibit B attached hereto
(the "Rejected Executory Contracts"), are hereby deemed rejected as of the date
hereof.
22. Each party to a Rejected Executory Contract shall file a proof of claim
related to any damages alleged to be suffered on account of such rejection on or
before March 31, 1998, or shall be forever barred from asserting any claim for
such damages. Parties filing such proofs of claim shall be forever barred from
filing amended proofs of claim asserting additional or increased damages after
March 31, 1998.
23. To the extent that any party to a Rejected Executory Contract has not
received notice of such rejection prior to the date hereof, notwithstanding any
findings contained herein, such party shall be permitted, on or before March 31,
1998, to file with this Court an objection to such rejection and request a
hearing thereon. If no such objection and request for hearing is timely filed,
the rejection shall be deemed final.
24. Each rejection, assumption, and assignment of an Executory Contract
pursuant to the Plan and hereunder is hereby found to be in the best interest of
the Debtors, their estates, and their creditors.
25. Except as otherwise provided in the Plan or in this Order, on the
Effective Date, but retroactive to the Confirmation Date, all property of the
Debtors' respective bankruptcy estates, with the exception of the Purchased
Assets, shall vest in Reorganized Farm Fresh, pursuant to the terms of the Plan,
and is deemed to be free and clear of all Claims against or Interests in the
Debtors, and any liens or encumbrances securing same.
26. Except for those distributions expressly provided for under the Plan, no
Creditor or Interest Holder of the Debtors may receive any payment from, or seek
recourse against, any Assets that are to be distributed under the terms of the
Plan. All Persons are precluded from asserting, against any property that is to
be distributed under the terms of the Plan, any claims, obligations, rights,
causes of action, liabilities, or equity interests based upon any act, omission,
transaction, or other activity of any kind or nature that occurred prior to the
Effective Date, other than as expressly provided for in the Plan, this Order, or
the Purchase Agreement, whether or not (a) a proof of claim based upon such debt
is filed or deemed filed under Section 501 of the Bankruptcy Code; (b) a Claim
based upon such debt is allowed under Section 502 of the Bankruptcy Code; or (c)
the Holder of a Claim based upon such debt has accepted the Plan. Except as
otherwise provided in the Plan, this Order, or the Purchase Agreement, all
Holders of Allowed Claims and Allowed Interests arising prior to the Effective
Date shall be permanently barred and enjoined from asserting against the
Debtors, their successors, or the Assets, any of the following actions on
account of such Allowed Claim or Interest: (a) commencing or continuing in any
manner any action or other proceeding on account of such Claim or Interest
against property to be distributed under the terms of the Plan, other than to
enforce any right to distribution with respect to such property under the Plan;
(b) enforcing, attaching, collecting, or recovering in any manner any judgment,
award, decree, or order against any of the property to be distributed under the
terms of the Plan, other than as permitted under sub-paragraph (a) above; and
(c) creating, perfecting, or enforcing any lien or encumbrance against any
property to be distributed under the terms of the Plan.
27. (a) On the Effective Date, the rights afforded to Holders of Allowed
Claims and Allowed Interests (collectively, the "Releasing Parties") by and in
the Plan and the exhibits thereto shall be in exchange for and in complete
release, satisfaction, and discharge of any and all claims of any kind or nature
arising on or prior to the Effective Date against the Debtors or the Assets and
any and all claims arising out of or related to Claims or Interests that any
Releasing Party has or may have against any Person who at the Effective Date is,
or at the Petition Date was, an Affiliate of the Debtors or any Holder of an
Allowed Claim or Allowed Interest (including without limitation, the Old Credit
Agreement Banks and the DIP Facility Lenders) or any member of the Committee or
any present or former shareholders, directors, officers, employees, agents,
advisors, attorneys, professional persons, and representatives of the Debtors,
each such Affiliate, each such Holder, and each such member of the Committee,
and their respective heirs, representatives, successors, and assigns, in
whatever capacity (collectively, with the Debtors, the "Released Parties"),
including without limitation, claims arising from ownership of securities, under
fraudulent conveyance or other laws relating to creditors' rights generally,
claims with respect to securities laws, and claims related to fiduciary
obligations. The Releasing Parties deemed to have released claims pursuant to
Section 9.5(a) of the Plan and herein shall be forever precluded from directly
or indirectly asserting any such claims against any of the Released Parties, or
their assets, or any of their Affiliates, or any of their present or former
directors, officers, employees, agents, advisors, attorneys, professional
persons, or representatives, or their respective heirs, representatives,
successors, or assigns. To the extent that any of the Releasing Parties may be
entitled to recover from any of the Released Parties, whether through the
Convertible Debentures Subordination Provisions, the Holdings Notes
Subordination Provisions, or otherwise, the proceeds of any claims released
herein (other than any such claims against the Debtors), whether brought by one
of the Releasing Parties or by any other Person, such Releasing Parties are
deemed to have assigned all of their right, title, and interest in such proceeds
to the Released Party against whom such proceeds are recovered. In addition, the
Senior Noteholders are deemed to have assigned all of their right, title, and
interest in the Convertible Debentures Subordination Provisions and the Holdings
Notes Subordination Provisions to such of the Released Parties who may be
affected by any action covered thereby. Notwithstanding anything to the contrary
contained in the Plan, the United States of America and the Debentureholders
shall not constitute Releasing Parties with respect to Released Parties other
than the Debtors, as defined in the Plan or in this Order, and the foregoing
release shall not apply to any Claims of such parties, except with respect to
the Debtors and the Assets.
(b) Except with respect to the rights under the Holdings Notes
Subordination Provisions and the proceeds assigned pursuant to Section 9.5(a) of
the Plan, on the Effective Date, the Released Parties and the Debtors shall be
deemed to have completely released any Releasing Party from any and all claims
of any kind or nature arising on or prior to the Effective Date against any such
Releasing Party or its assets or any of its Affiliates, or any present or former
shareholders, directors, officers, employees, agents, advisors, attorneys,
professional persons, or representatives, and their respective heirs,
representatives, successors, and assigns, in whatever capacity; provided,
however, that no such right or claim shall be deemed released in connection with
any and all Bankruptcy Claims, or in connection with any adversary proceeding or
contested matter pending on the Confirmation Date. The Released Parties deemed
to have released claims pursuant to Section 9.5(b) of the Plan and herein shall
be forever precluded from asserting any such claims against any Releasing Party,
or its assets, or any of its Affiliates, or any of its present or former
directors, officers, employees, agents, advisors, attorneys, professional
persons, or representatives, or their respective heirs, representatives,
successors, or assigns.
(c) On the Effective Date, provided that FF Acquisition consummates the
transactions contemplated in the Purchase Agreement, except with respect to
obligations under the Purchase Agreement, the Debtors on the one hand and
Richfood and its Affiliates on the other shall be deemed to have each released
the other from any and all claims of any kind or nature arising on or prior to
the Effective Date. From and after the Effective Date, the Debtors on the one
hand and Richfood on the other shall be forever precluded from directly or
indirectly asserting any such released claims against the other, their assets,
or any of their Affiliates or any of their present or former directors,
officers, employees, agents, advisors, attorneys, professional persons, or
representatives, or their respective heirs, representatives, successors, or
assigns.
(d) Notwithstanding any provision of the Plan to the contrary, the
releases contained in Section 9.5 of the Plan and herein shall not be construed
as or operate as a release of or limitation on (i) claims between and among the
Releasing Parties and the Released Parties that do not relate to or involve the
Debtors, or (ii) objections to Claims or Interests.
28. On the Effective Date, the Debtors, on their own behalf, and on behalf
of all the Debtors' stockholders and Creditors derivatively, shall be deemed to
have waived, released, and discharged all present or former shareholders,
directors, officers, employees, agents, advisors, attorneys, professional
persons, and representatives of the Debtors, and their respective heirs,
representatives, successors, and assigns, from all liability based upon any act
or omission related to past service with, for, or on behalf of the Debtors or
their Affiliates; provided, however, that notwithstanding anything contrary
contained in the Plan, such waiver, release, and discharge shall not affect any
claims of the United States of America or the Debentureholders, and such parties
shall not be foreclosed from pursuing derivative claims, if any. The immediately
preceding sentence shall not, however, apply to (i) any indebtedness of any
Person to the Debtors for money borrowed by such Person, or (ii) any setoff or
counterclaim that the Debtors may have or assert against any Person, provided
that the aggregate amount thereof shall not exceed the aggregate amount of any
Claims held or asserted by such Person against the Debtors. Holders of Claims
and Interests against the Debtors, other than the United States of America and
the Debentureholders, shall be enjoined from commencing or continuing any
action, employment of process, or act to collect, offset, or recover any such
claim that could be brought on behalf of or in the name of the Debtors.
29. As provided in the Plan, any Person deemed to have released Claims under
Section 9.5 or 9.6 of the Plan, as modified hereunder, shall be forever enjoined
from commencing or continuing any action, employment of process, or act to
collect, offset, or recover any such Released Claim from any Released Party.
30. Except for proceedings brought in this Court as contemplated by Article
XI of the Plan or by further order of this Court, each Holder of a Claim, each
Holder of an Interest, the Debtors, and any other party-in-interest, and any
Person or entity acting or purporting to act by, through, under, or on behalf of
any of the foregoing shall be, and they hereby are, forever enjoined from
commencing any action in any court or other forum seeking to modify any term of
the Plan or any related document, including this Order, or to interfere with any
act taken or to be taken thereunder, any distribution or transfer of assets or
property made or to be made thereunder, or any payment or performance of
obligations thereunder, provided, however, that the foregoing injunction shall
not affect, restrict, or override the reservation of rights of the Holders of
Class 3B Claims set forth in Section 5.4 of the Plan.
31. (a) Those members of the Debtors' Boards of Directors who are serving
as of the Confirmation Date shall continue to serve in such capacity until the
Effective Date, or the date of dissolution in the case of Holdings. On the
Effective Date, the members of the Farm Fresh Board of Directors shall be deemed
to have resigned. On the date of Holdings' dissolution, the members of the
Holdings Board of Directors shall be deemed to have resigned. As of the
Effective Date, the Board of Directors of Reorganized Farm Fresh shall consist
of one or more of the following persons -- Richard D. Coleman, a representative
or representatives of PPM America Special Investments Fund LP, Moore Capital
Management, Inc., and/or Conseco Capital Management, and an unrelated party or
parties, each of whom shall be, and hereby is, authorized and empowered to serve
on such Board. The Committee shall file with the Court prior to the Effective
Date a notice of the initial members of the Reorganized Farm Fresh Board of
Directors.
(b) On the Effective Date, the only possible insider who may be employed
or retained by Reorganized Farm Fresh is Richard D. Coleman, and the nature of
his compensation has been previously disclosed in papers filed with this Court.
The principal executive officers of Reorganized Farm Fresh may include Mr.
Coleman and/or one or more unrelated party or parties. The Committee shall file
with the Court prior to the Effective Date a notice of the initial officers of
Reorganized Farm Fresh.
32. As of the Effective Date, each of the Notes shall be of no further
force or effect, without any further action on the part of the Debtors, and the
Holders thereof shall have no rights, and such instruments shall evidence no
rights, except the right to receive distributions in accordance with the Plan.
33. No Holder of any of the Notes shall be entitled to any distribution
under the Plan unless and until such Holder has first surrendered or caused to
be surrendered to Reorganized Farm Fresh the original Notes held by it or, in
the event that such original Notes have been lost, destroyed, stolen, or
mutilated, has first executed and delivered an affidavit of loss and indemnity
with respect thereto in form customarily utilized for such purposes that is
reasonably satisfactory to Reorganized Farm Fresh and, in the event Reorganized
Farm Fresh so requests, has first furnished a bond in form and substance
(including, without limitation, amount) reasonably satisfactory to Reorganized
Farm Fresh. As soon as practicable after such surrender or such delivery of an
affidavit of loss and indemnity and such furnishing of a bond as provided in
Section 6.7(b) of the Plan, Reorganized Farm Fresh shall make the distributions,
if any, provided under the Plan. Promptly upon surrender of such instruments,
Reorganized Farm Fresh shall cancel the applicable Notes.
34. As of the Effective Date, the Farm Fresh Common Stock, the Holdings
Common Stock, and the Holdings Preferred Stock shall be of no further force and
effect, without any further action on the part of the Debtors.
35. On the Effective Date (or as soon thereafter as is possible),
1,000,000 shares of common stock of Reorganized Farm Fresh (the "New Common
Stock"), which shall constitute all of the then issued and outstanding shares of
New Common Stock, shall be issued and distributed in accordance with Section
6.12 of the Plan.
36. On the Effective Date (or as soon thereafter as is possible), Richfood
shall issue and distribute in accordance with the Purchase Agreement and
Sections 5.3 and 6.13 of the Plan the warrants (the "Warrants") to purchase
shares of Richfood common stock, without par value ("Richfood Common"). Richfood
is a successor to Farm Fresh within the meaning of Section 1145(a)(1) of the
Bankruptcy Code.
37. Pursuant to Sections 5.2, 5.3, and 5.4 of the Plan, prior to the
Effective Date, Farm Fresh and the Committee shall attempt in good faith to
agree to the value of the New Common Stock, the Warrants, and anticipated
Available Farm Fresh Cash. To the extent such parties cannot agree on the value
of such items, this Court shall hold a hearing to determine such value on March
3, 1998, at 11:00 a.m., or as soon thereafter as counsel may be heard.
38. Any securities to be issued under the Plan (the "Securities")
including, without limitation, the New Common Stock and the Warrants, shall be
issued in exchange or principally in exchange for Claims against or Interests in
Farm Fresh. Pursuant to Section 1145(a)(1) of the Bankruptcy Code, the issuance
of the Securities under the Plan, including without limitation the New Common
Stock, the Warrants, and shares of Richfood Common to be issued upon exercise of
the Warrants, shall be exempt from the registration requirements of the
Securities Act of 1933, as amended, and any state or local laws requiring
registration for the sale of securities. Pursuant to Section 1145(c) of the
Bankruptcy Code, such Securities, when issued or sold, shall be freely
transferable by the recipients thereof, subject to: (i) the provisions of
Section 1145(b) of the Bankruptcy Code relating to "underwriters," as defined
therein: (ii) any restrictions contained in the terms of the Securities
themselves; and (iii) any restriction on the Securities that has been agreed to
by the holder of the Securities with respect thereto.
39. Persons receiving the Securities who are "underwriters," as defined
in Section 1145(b)(1) of the Bankruptcy Code, are hereby prohibited from
distributing, selling, or otherwise disposing of the Securities, except: (i)
pursuant to an effective registration statement under the Securities Act of
1933, as amended; (ii) with respect to those "underwriters" who are not
"issuers," in "ordinary trading transactions," as provided in Section 1145(b)(1)
of the Bankruptcy Code; (iii) with respect to those "underwriters" who are
"affiliates," as defined in Rule 144(a)(1) under the Securities Act of 1933, as
amended, in compliance with Rule 144 (other than as to the holding period of
Rule 144(d)); or (iv) pursuant to an applicable exemption from registration
requirements and subject to fulfillment of terms and conditions as to securities
law compliance (including upon subsequent transfer) reasonably satisfactory to
the issuer of the respective Securities. For the purposes of this Order,
"ordinary trading transactions" shall mean any sale or distribution of the
Securities that does not involve: (i) concerted action by the recipients of the
Securities in connection with the disposition of such Securities, or concerted
action on behalf of one or more such recipients in connection with such
disposition; (ii) use of informational documents concerning the Securities
prepared or used to assist in the resale of the Securities, other than the
Disclosure Statement, supplements thereto, if any, and any documents filed by
the issuer of such Securities with the Securities and Exchange Commission
pursuant to the Securities Act of 1934, as amended; and (iii) special
compensation to brokers and dealers in connection with the disposition of the
Securities designed as a special incentive to resell the Securities, other than
the compensation that would normally be paid pursuant to arms length
negotiations between a seller and a broker or dealer, each acting unilaterally,
and in amount not greater than compensation that would be paid for a routine
similar-size sale of similar securities of a similar issuer.
40. Upon issuance pursuant to the Plan, the New Common Stock and the
Warrants will be duly and validly issued and will be fully paid and
non-assessable. The shares of Richfood Common issuable upon the exercise of the
Warrants, when issued in accordance with the terms thereof, will be duly and
validly issued, fully paid, and non-assessable.
41. The solicitation of votes on the Plan, and the offer, issuance, and
sale of the New Common Stock and the Warrants, were conducted in good faith
within the meaning of Section 1125(e) of the Bankruptcy Code.
42. Pursuant to Section 1146(c) of the Bankruptcy Code, the issuance,
transfer, or exchange of any security under the Plan; the making or delivery of
any instrument of transfer pursuant to, in implementation of, or as contemplated
by the Plan or the Purchase Agreement; and the revesting, transfer, or sale of
any real or personal property of the Debtors pursuant to, in implementation of,
or as contemplated by the Plan or the Purchase Agreement shall not be taxed
under any state or local law imposing a stamp tax, transfer tax, or similar tax
or fee.
43. On the Effective Date, the Committee shall dissolve, and the members
of the Committee shall be released and discharged from all rights and duties
arising from or related to these Cases, if any. Unless otherwise agreed by
Reorganized Farm Fresh, the professionals retained by the Committee and the
members thereof shall not be entitled to compensation or reimbursement of
expenses for any services rendered after the Effective Date, except for services
rendered and expenses incurred in connection with any applications for allowance
of compensation and reimbursement of expenses pending on the Effective Date and
approved by the Bankruptcy Court.
44. Following the Effective Date, Reorganized Farm Fresh hereby is ordered
and appointed to represent the Debtors' estates, assume the Debtors' authority
in respect thereof, and complete the Debtors' responsibilities in regard to
matters in relation to these Cases including, but not limited to, with respect
to objections to any Claim, post-confirmation notices, reports, and the Final
Report and Decree in accordance with 11 U.S.C. ss. 1106(a)(7), Bankruptcy Rule
3022, and Local Bankruptcy Rule 58; and Reorganized Farm Fresh may select its
own counsel(s) and advisor(s) with respect to the foregoing without further
order of this Court. Except with respect to Administrative Claims, any and all
objections to the allowance of any Claim or Interest not heretofore objected to
shall be filed within 60 days after the later of the Effective Date and the date
such Claim or Interest is filed, unless such period of time is extended by the
Bankruptcy Court.
45. All distributions or other consideration required to be made by
Reorganized Farm Fresh pursuant to the Plan shall be made within such time
periods as provided by the Plan, and all such distributions shall be deemed
timely and proper if mailed by first class mail on or before the distribution
dates set forth in the Plan, or as soon thereafter as practicable, to the last
known address of the Person entitled thereto.
46. This Court hereby retains jurisdiction of the business and assets of the
Debtors until the Effective Date. From and after the Effective Date, this Court
shall retain and have exclusive jurisdiction over the Debtors, Reorganized Farm
Fresh, and these Chapter 11 Cases pursuant to and for the purposes of Sections
105(a), 1127, and 1142 of the Bankruptcy Code and for such purposes as may be
necessary or useful to aid the confirmation, consummation, and implementation of
the Plan and the Purchase Agreement as provided for in Article XI of the Plan
and as permitted under the Bankruptcy Code.
47. The provisions of the Plan and this Order shall be binding on the
Debtors, Reorganized Farm Fresh, FF Acquisition, Richfood, each Creditor, each
Interest Holder, and every other party-in-interest in these Cases.
48. The stay in effect in these Cases pursuant to 11 U.S.C.ss. 362(a) shall
continue inffect until the Effective Date, and at that time shall be dissolved
and of no further force or effect, subject to the injunctions provided for
herein and in the Plan.
49. Notwithstanding any other provision of the Plan or this Order, the
Effective Date of the Plan shall not occur and shall not be binding on any party
unless and until each of the following conditions has been satisfied or waived
as provided in Section 8.3 of the Plan: (i) this Order has been entered on the
docket by the Clerk of this Court and has not been reversed, stayed, modified,
or amended, and the time for filing a notice of appeal, or petition for
certiorari, or request for reargument or further review or rehearing shall have
expired, (ii) all other documents provided for under the Plan and herein have
been executed and delivered by the parties thereto, unless such execution or
delivery has been waived by the parties benefited by such documents, (iii)
provided the remaining conditions of Section 8.2 of the Plan have been duly
satisfied or waived, the Asset Sale has been consummated, (iv) the Debtors have
filed with this Court statements as required by Section 8.2(d) of the Plan and
the Committee has not objected pursuant to the terms thereof, (v) the Debtors
have satisfied all of their Obligations (as defined under the DIP Facility)
under the DIP Facility, and the DIP Facility has been terminated, and (vi) the
Effective Date occurs no later than March 5, 1998. Notwithstanding Section 1.47
of the Plan, the Effective Date may occur as soon as eleven days after the date
of this Order.
50. Notwithstanding Section 12.9 of the Plan, to the extent that Sea Fin
Holding Corporation or John Knox Limited Partnership prove that they are
entitled to attorneys' fees as part of their Allowed Claims, if any, such
Allowed Claims may include such attorneys' fees.
51. Notwithstanding Section 1.5 of the Plan, Sea Fin Holding Corporation
shall not be precluded from asserting punitive damage claims as part of its
Allowed Claim, if any, and Farm Fresh and Reorganized Farm Fresh shall be
permitted to oppose the inclusion of such punitive damage claims as part of such
Allowed Claim, if any.
52. This Order shall be deemed annulled at such time prior to consummation
of the Asset Sale as a condition to the Effective Date that has not been waived
in a writing executed by the Debtors and the Committee can no longer be
satisfied. If the Effective Date does not occur for any reason, then the Plan
shall be null and void and, in such event, nothing contained in the Plan or
herein shall be deemed to constitute a waiver or release of any Claims by or
against, or any Interests in, the Debtors or any other Person or to prejudice in
any manner the rights of the Debtors or any Person in any further proceedings
(whether or not such proceedings involve the Debtors).
53. All applications for final allowances of compensation and
reimbursement of expenses pursuant to 11 U.S.C. ss.ss. 330 and 503(b) in
connection with these Chapter 11 Cases and of any other Administrative Claims
not incurred in the ordinary course of the Debtors' business prior to the
Confirmation Date shall be filed with the Court and served upon and received by
(i) Dechert Price & Rhoads, Co-Counsel for the Debtors, 30 Rockefeller Plaza,
New York, NY 10112 (Attn: Joel H. Levitin), (ii) Klehr, Harrison, Harvey,
Branzburg & Ellers LLP, Co-Counsel for the Debtors, 919 Market Street, Suite
1000, Wilmington, DE 19801 (Attn: Joanne B. Wills), (iii) Wachtell, Lipton,
Rosen & Katz, Counsel for the Informal Steering Committee of Holders of 12.25%
Senior Notes, 51 West 52nd Street, New York, NY 10019 (Attn: Chaim J. Fortgang),
(iv) Kaye, Scholer, Fierman, Hays & Handler, LLP, Counsel for Fleet Capital
Corporation, as Agent, 425 Park Avenue, New York, NY 10022-3598 (Attn: Herbert
Edelman), and (v) Office of the United States Trustee, 601 Walnut Street, Curtis
Center, Suite 950 W, Philadelphia, PA 19106 (Attn: John D. McLaughlin), on or
before March 31, 1998 at 4:00 p.m. A hearing on all such applications shall be
held before the Honorable Joseph J. Farnan, Jr., Chief United States District
Judge, on April 22, 1998 at 11:00 a.m., at the United States District Court, 844
King Street, Wilmington, DE 19801, or as soon thereafter as counsel may be
heard. Objections, if any, to such applications shall be filed with this Court
and served upon and received by the above-referenced parties and the party whose
application is the subject of such objection, on or before April 15, 1998 at
4:00 p.m.
54. Notwithstanding the foregoing paragraph, FF Acquisition shall file any
Administrative Claims it may have arising under the Purchase Agreement, the
Plan, or this Order within 60 days of the Effective Date.
55. Nothing herein, nor in the Plan, shall be deemed, interpreted, or
otherwise construed as a waiver of JLW Produce, Inc.'s rights under the trust
provisions of the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. ss.
499a et seq.
56. The Claims Filing Bar Date (as defined in the Plan) shall be March 31,
1998 at 4:00 p.m. The Indenture Trustee for the Senior Notes may file a
single proof of claim on behalf of all of the Senior Noteholders.
57. The Debtors shall mail to all parties-in-interest in these Cases
notice of the entry of this Order, together with notice of the Claims Filing Bar
Date and the last day for filing Administrative Claims and Rejection Claims and
for filing objections in certain limited circumstances (i) to the assumption and
assignment of Transferred Executory Contracts and (ii) to the rejection of other
Executory Contracts, all as contained herein.
Wilmington, DE
February 20, 1998
----------------------------
Hon. Joseph J. Farnan, Jr.
Chief United States District Judge
