IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:
eTOYS DIRECT 1, LLC, et al.,
1
Debtors.
) Chapter 11
)
) Case No. 08-13412(BLS)
) (Jointly Administered)
)
JOINT PLAN OF LIQUIDATION OF THE DEBTORS AND
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE
Counsel for Debtors and Debtors in
Possession:
PACHULSKI STANG ZIEHL & JONES LLP
Laura Davis Jones (Bar No. 2436)
Jeffrey W. Dulberg (CA Bar No. 181200)
Michael R. Seidl (Bar No. 3889)
919 N. Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Telephone: 302-652-4100
Facsimile: 302-652-4400
Dated: May 11,2010
Counsel for Official Committee of Unsecured
Creditors:
ARENT FOX LLP
Schuyler G. Carroll
1675 Broadway
New York, NY10019
Telephone: 212-484-3900
Facsimile: 212-484-3990
-and-
ELLIOTT GREENLEAF
Rafael X. Zahralddin-Aravena (Bar No. 4166)
11 05 Market Street, Suite 1700
Wilmington, DE 19801
Telephone: 302-384-9400
Facsimile: 302-384-9399
1
The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, if
applicable, are: eToys Direct 1, LLC (N/A); The Parent Company (7093); BabyUniverse, Inc. (7990); Dreamtime
Baby, Inc. (8047); eToys Direct, Inc. (7296); PoshTots, Inc. (8660); eToys Direct 2, LLC (N/A); eToys Direct 3,
LLC (N/A); Gift Acquisition, L.L.C. (0297); and My Twinn, Inc. (1842). The address for each of the Debtors is 717
1 ih Street, Suite 1300, Denver, CO 80202, with the exception of Posh Tots, Inc., the address for which is 5500 Cox
Road, Suite M, Glenn Allen, VA 23060.
DOCS_DE:l56322.4
JOINT PLAN OF LIQUIDATION OF THE DEBTORS AND
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE
The above-captioned debtors and debtor in possession (the "Debtors") together with the
Official Committee of Unsecured Creditors (the "Committee") in the Debtors' cases hereby
propose the following Joint Plan of Liquidation of the Debtors and the Committee pursuant to 11
U.S.C. 1121
2
:
Preliminary Statement
The Plan sets forth a proposal for the satisfaction of all Claims against the Debtors.
Along with the Plan, Creditors entitled to vote will receive a Ballot for voting on the Plan and a
Disclosure Statement that provides information concerning the Debtors and the Plan.
The Disclosure Statement accompanying the Plan, and the exhibits thereto, include a
discussion of the Debtors' history, business, results of operations and properties, the post-petition
liquidation of substantially all of the Debtors' assets, a summary of the assets and liabilities of
the Debtors, a summary of what Creditors and Interest Holders can expect to receive under the
Plan, a summary of the procedures and voting requirements necessary for confirmation of the
Plan and a discussion of certain alternatives to the Plan in the event that the Plan is not
confirmed. All Holders of Claims and Interests should read the Disclosure Statement and the
Plan carefully-and consult with their counsel and other applicable professionals-before voting
to accept or reject the Plan.
As more fully described in the Disclosure Statement, the Plan must be approved by the
requisite number of Creditors, and the Bankruptcy Court must find that the Plan meets the
applicable legal standards before it can be confirmed.
3
If the Plan is not confirmed, the
Bankruptcy Court may order the cases dismissed, or converted to liquidating cases under
Chapter 7 of the Bankruptcy Code, or the Debtors or other parties in interest may propose a
ditierent plan.
The Plan proposes to substantively consolidate the Debtors' estates and to vest all of the
assets of the consolidated Debtors into a single estate for distribution in accordance with the
Plan.
ARTICLE 1
DEFINITIONS
1.1 As used in this Plan, the following terms shall have the respective meanings
specified below. Unless otherwise indicated, the singular shall include the plural.
2
Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in
Article 1 of this Plan.
3
Interest Holders will receive nothing under the Plan, and therefore, the Class of Interests is deemed to
have rejected the Plan. Accordingly, acceptances are not being solicited from the Holders of Interests.
DOCS_DE: 156322.4
2
1.2 "Administrative Claim" shall mean a Claim under Section 503(b) of the
Bankruptcy Code that is entitled to priority under Section 507(a)(1) ofthe Bankruptcy Code, for
costs or expenses of administration of the Chapter 11 Cases, including, without limitation, any
actual and necessary expenses of operating the business of the Debtors or preserving the estates,
and any and all fees and expenses of Professionals to the extent allowed by the Bankruptcy Court
under Sections 330, 331, or 503 ofthe Bankruptcy Code.
1.3 "Allowed Claim" or "Allowed [ ] Claim" shall mean: (a) any Claim, proof
of which is/was filed with the Bankruptcy Court on or before the applicable Bar Date, or which
has been or hereafter is scheduled by the Debtors as liquidated in amount and not disputed or
contingent and which, in either case, is a Claim as to which no objection to the allowance thereof
has been filed within the applicable period of limitation (if any) for objection to Claims fixed by
the Bankruptcy Court, or as to which any objection has been determined by an order or judgment
of the Bankruptcy Court (allowing such Claim in whole or in part) that is no longer subject to
appeal or certiorari proceedings, and as to which no appeal or certiorari proceeding is pending, or
(b) a Claim that is allowed (i) in any contract, instrument, or other agreement entered into in
connection with the Plan, (ii) in a Final Order, or (iii) pursuant to the terms of the Plan. In
accordance with Section 502(d) of the Bankruptcy Code, the Claim or Claims held by any party
that is subject to an avoidance cause of action shall not be an Allowed Claim until such time as
the avoidable transfer is returned or a final determination is made by the Bankruptcy Court that
no avoidable transfer exists.
1.4 "A voidance Actions" mean all claims and causes of action that the Debtors or the
Committee have or had the power to assert pursuant to any or all of Sections 510, 544, 545, 547,
548, 549, 550, 551 and 553 ofthe Bankruptcy Code.
1.5 "Assets" means any and all real property or personal property assets, rights or
interests of Debtors, whether tangible or intangible, and any proceeds realized therefrom,
including without limitation, all cash of the Debtors and any right, claim or cause of action,
belonging to the Debtors or their estates or to the Committee.
1.6 "Ballot" shall mean the form or forms of ballot that will be distributed along with
the Disclosure Statement to Holders of Allowed Claims in classes that are Impaired under the
Plan and entitled to vote, with which the Holders of impaired Claims may use to vote to accept
or reject the Plan.
1.7 "Bankruptcy Code" shall mean the United States Bankruptcy Code, 11 U.S.C.
101 et. seq., as now in effect or hereafter amended with regard to the Chapter 11 Cases.
1.8 "Bankruptcy Court" shall mean the United States Bankruptcy Court for the
District of Delaware.
1.9 "Bankruptcy Rules" shall mean the means the Federal Rules of Bankruptcy
Procedure, as amended from time to time, as applicable to the Chapter 11 Cases, promulgated
under 28 U.S.C. 2075 and the General and Local Rules of the Bankruptcy Court.
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3
1.10 "Bar Date" shall mean the date (or dates) set by the Bankruptcy Court as the last
day for filing proofs of Claim and Administrative Claims against the Debtors.
1.11 "Business Day" shall mean any day other than a Saturday, Sunday, legal holiday
(as such term is defined in Bankruptcy Rule 9006), or any other day that the Bankruptcy Court is
closed.
1.12 "Cash" shall mean cash and cash equivalents, including, but not limited to, wire
transfers, checks and other readily marketable direct obligations of the United States of America
and certificates of deposit issued by banks.
1.13 "Chapter 11 Cases" shall mean the above-captioned Chapter 11 Cases pending
for the Debtors.
1.14 "Claim" shall mean a claim as defined in Section 101(5) ofthe Bankruptcy Code,
or any portion thereof.
1.15 "Claims Agent" means Omni Management Group, LLC, which was appointed as
the Debtors' claims, notice, and balloting agent.
1.16 "Class" shall mean a category of Claims or Interests that are substantially similar
in nature to each other, as classified pursuant to the Plan.
1.17 "Committee" shall mean the Official Committee of Unsecured Creditors
appointed by the Office of the United States Trustee on January 8, 2009.
1.18 "Confirmation" shall mean the entry of the Confirmation Order on the docket of
the Bankruptcy Court.
1.19 "Confirmation Date" shall mean the date of entry of an order of the Bankruptcy
Court confirming this Plan in accordance with the provisions of the Bankruptcy Code.
1.20 "Confirmation Order" shall mean the order of the Bankruptcy Court confirming
the Plan pursuant to Section 1129 of the Bankruptcy Code.
1.21 "Creditor" shall mean any person or entity having a Claim against the Debtors,
including without limitation a Claim that arose on or before the Petition Date or a Claim against
the Debtors' estates of any kind specified in Sections 502(g), 502(h), or 502(i) of the Bankruptcy
Code.
1.22 "Debtors" shall mean, collectively, eToys Direct 1, LLC; The Parent Company;
BabyUniverse, Inc.; Dreamtime Baby, Inc.; eToys Direct, Inc.; PoshTots, Inc.; eToys Direct 2,
LLC; eToys Direct 3, LLC; Gift Acquisition, L.L.C.; and My Twinn, Inc. The Parent Company
is the direct or indirect 1 00% shareholder of each of the Debtors. The Parent Company is the
direct 100% shareholder of debtors BabyUniverse, Inc.; Dreamtime Baby, Inc.; eToys Direct,
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4
Inc.; and PoshTots, Inc. Etoys Direct, Inc., in turn, is the 100% shareholder of eToys Direct 1,
LLC; eToys Direct 2, LLC; eToys Direct 3, LLC; Gift Acquisition, L.L.C.; and MyTwinn, Inc.
1.23 "Debtors in Possession" shall mean the Debtors in their capacity and with the
status and rights conferred by Sections 1107 and 1108 ofthe Bankruptcy Code.
1.24 "Disclosure Statement" shall mean the disclosure statement respecting the Plan,
as approved by the Bankruptcy Court as containing adequate information in accordance with
Section 1125 of the Bankruptcy Code, all exhibits and annexes thereto and any amendments or
modifications thereof.
1.25 "Disputed Claim" or "Disputed [ ] Claim" shall mean any Claim (i) as to
which an objection, unless withdrawn, has been interposed and (ii) that has not been allowed or
disallowed pursuant to a Final Order.
1.26 "Effective Date" shall mean the date designated by the Debtors in a notice filed
with the Bankruptcy Court, which is at least eleven days after the date on which each of the
conditions set forth in Section 8.1 of the Plan have been satisfied or waived (if waivable ).
1.27 "Entity" shall have the meaning set forth in Section 101 ofthe Bankruptcy Code.
1.28 "Final Order" shall mean an order entered by the Bankruptcy Court or any other
court exercising jurisdiction over the subject matter and the parties, as to which (i) no appeal,
certiorari proceeding, or other review or rehearing has been requested or is still pending, and
(ii) the time for filing a notice of appeal or petition for certiorari or further review or rehearing
has expired.
1.29 "General Unsecured Claim" shall mean any Claim against the Debtors other
than an Administrative Claim, Priority Tax Claim, Priority Claim, or Secured Claim.
1.30 "Holder" means an Entity holding a Claim or Interest.
1.31 "Intercompany Claim" means a Claim held by any ofthe Debtors against any of
the other Debtors.
1.32 "Interest" shall mean, with respect to any of the Debtors, any equity interest
therein.
1.33 "Litigation" means the interest of the Debtors, the Plan Administrator, or the
Committee, as applicable, in any and all claims, rights and causes of action that have been or
may be commenced by the Debtors, the Plan Administrator, or the Committee, as applicable.
Litigation includes, without limitation, any: (i) A voidance Action; (ii) any causes of actions
against Ernst & Young LLP and any of its officers or directors; (iii) any causes of action against
Posh Ventures, LLC, its affiliates or subsidiaries and its officers or directors. (iv) action for the
turnover of property to the Debtors, the Plan Administrator, or the Committee, as applicable;
(v) for the recovery of property or payment of money that belongs to or can be asserted by the
DOCS_ DE: 156322.4
5
Debtors, the Plan Administrator, or the Committee, as applicable; (vi) for compensation for
damages incurred by the Debtors; and (vii) equitable subordination actions against Creditors.
1.34 "Person" means a natural person or any legal entity or organization including,
without limitation, any corporation, partnership (general or limited), limited liability company,
business trust, unincorporated organization or association, joint stock company, trust,
association, governmental body (or any agency, instrumentality or political subdivision thereof),
or any other form oflegal entity.
1.35 "Petition Date" shall mean December 28, 2008, the date upon which the Debtors
each filed a petition under Chapter 11 ofthe Bankruptcy Code.
1.36 "Plan" shall mean this Joint Plan of Liquidation of the Debtors and the
Committee, all exhibits hereto, and any amendments or modifications hereof.
1.37 "Plan Administrator" shall mean Steven Sass or such successor thereto
approved by the Bankruptcy Court in the Confirmation Order as the representative of the estates
for purposes of administering the Plan.
1.38 "Plan Expenses" shall mean all actual and necessary costs and expenses to be
incurred after the Effective Date in connection with the administration of the Plan at the direction
of the Plan Administrator, including the fees and expenses of the Plan Administrator and any
professionals retained by the Plan Administrator.
1.39 "Plan Objection Deadline" shall mean the deadline established by the
Bankruptcy Court for filing and serving objections to Confirmation of the Plan.
1.40 "Post-Confirmation Debtors" shall mean the Debtors in their post-Effective
Date status as provided for in this Plan.
1.41 "Priority Claim" shall mean any Claim against the Debtors other than an
Administrative Claim or Priority Tax Claim entitled to priority in payment under Section 507(a)
of the Bankruptcy Code.
1.42 "Priority Tax Claim" shall mean any Claim for taxes against the Debtors,
including without limitation any interest and penalties due thereon, entitled to priority in
payment pursuant to Section 507(a)(8) of the Bankruptcy Code.
1.43 "Professionals" shall mean those Persons (i) employed pursuant to an order of
the Bankruptcy Court in accordance with Sections 327 and 1103 of the Bankruptcy Code and to
be compensated for services rendered prior to the Effective Date, pursuant to Sections 327, 328,
329, 330 and 331 of the Bankruptcy Code, or (ii) for which compensation and reimbursement
has been allowed by the Bankruptcy Court pursuant to Section 503(b)(4) of the Bankruptcy
Code.
DOCS_DE:156322.4
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1.44 "Property" means all property of the Debtors' estates of any nature whatsoever,
real or personal, tangible or intangible, previously or now owned by the Debtors, or acquired by
the Debtors' estates, as defined in section 541 ofthe Bankruptcy Code.
1.45 "Pro Rata" means, as of any certain date, with respect to any Allowed Claim in
any Class, the proportion that such Allowed Claim bears to the aggregate amount of all Claims,
including Disputed Claims, in such Class.
1.46 "Reserve Fund" shall mean the segregated interest bearing account(s) into which
all reserved cash provided for in the Plan shall be deposited on the Effective Date, or as soon
thereafter as is practicable.
1.47 "Schedules" shall mean the Debtors' Schedules of Assets and Liabilities filed
with the Bankruptcy Court pursuant to Bankruptcy Rule 1007 as they may be amended from
time to time.
1.48 "Secured Claim" means all or that portion of a debt existing on the Petition
Date, as finally allowed and approved by the Bankruptcy Court, to the extent that such debt is
not greater than the value of the assets of the Debtors that the Bankruptcy Court finds are valid
security for such debt.
1.49 "Unimpaired" means any Claim that is not impaired within the meaning of
Section 1124 of the Bankruptcy Code.
1.50 "Voting Deadline" means the deadline established by Final Order of the
Bankruptcy Court for receipt of Ballots voting to accept or reject the Plan.
1.51 "Voting Record Date" means the date as of which the identity of Holders of
Claims is set for purposes of determining the Entities entitled to receive and vote on the Plan.
Pursuant to Bankruptcy Rules 3017(d) and 3018(a). The Voting Record Date shall be the date of
entry of the Bankruptcy Court's order approving the Disclosure Statement or such other date as
the Bankruptcy Court may set.
1.52 All terms not expressly defined herein shall have the respective meanings given
such terms in Section 101 of the Bankruptcy Code or as otherwise defined in applicable
provisions of the Bankruptcy Code, the Plan, or the Disclosure Statement. Defined terms
importing the plural only shall also include the singular where the context requires. Unless
otherwise specified herein, any reference to an Entity as a Holder of a Claim includes that
Entity's successors, assigns, and affiliates. The rules of construction set forth in Section 102 of
the Bankruptcy Code will apply. In computing any period of time prescribed or allowed by the
Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
DOCS_DE: 156322.4
7
ARTICLE2
PROVISIONS FOR PAYMENT OF ALLOWED
ADMINISTRATIVE AND PRIORITY TAX CLAIMS
2.1 Administrative Claims and Priority Tax Claims are not classified in this Plan.
The treatment of and consideration to be received by Holders of Allowed Administrative Claims
and Allowed Priority Tax Claims pursuant to this Article II of the Plan shall be in full and
complete satisfaction, settlement, release and discharge of such Claims. The Debtors'
obligations in respect of such Allowed Administrative and Priority Tax Claims shall be satisfied
in accordance with the terms of this Plan.
2.2 Treatment of Administrative Claims. Except to the extent the Holder of an
Allowed Administrative Claim agrees otherwise, each Holder of an Allowed Administrative
Claim shall be paid in respect of such Allowed Claim the full amount thereof, without interest, in
Cash, as soon as practicable after the later of (i) the Effective Date or (ii) the date on which such
Claim becomes an Allowed Claim.
2.3 Treatment of Priority Tax Claims. Each Holder of an Allowed Priority Tax Claim
will be paid in respect of such Allowed Priority Tax Claim either (a) the full amount thereof,
without post-petition interest or penalty, in Cash, as soon as practicable after the later of (i) the
Effective Date or (ii) the date on which such Priority Tax Claim becomes an Allowed Claim or
(b) such lesser amount as the Holder of an Allowed Priority Tax Claim and the Debtors might
otherwise agree.
ARTICLE3
CLASSIFICATION OF CLAIMS AND INTERESTS
3.1 Administrative Claims and Priority Tax Claims are unclassified. For purposes of
this Plan, all other Claims and Interests are classified as follows:
Class
/.
StatUs'> ' : ,
;
. .' (,:'. -.,..;
-.:.
..
'
.,
' ': ..
Class 1 - Priority Claims Unimpaired Not Entitled to Vote
Class 2- Secured Claims (if anyt Unimpaired Not Entitled to Vote
Class 3- General Unsecured Claims Impaired Entitled to Vote
Class 4 - Equity Interests Impaired Not Entitled to Vote
4
Each Holder of a Class 2 Claim constitutes a separate subclass under the Plan.
DOCS_DE:l56322.4
8
ARTICLE4
TREATMENT OF CLAIMS AND INTERESTS
4.1 The treatment of and consideration to be received by Holders of Allowed Claims
and Interests pursuant to this Article IV of the Plan shall be in full and complete satisfaction,
settlement, release, and discharge of such Claims and Interests. The Debtors' obligations in
respect of such Claims and Interests shall be satisfied in accordance with the terms of this Plan.
4.2 Treatment of Class 1 Claims -Priority Claims. Class 1 Claims are Unimpaired.
The legal, contractual, and equitable rights of each Allowed Class 1 Claim shall be left unaltered.
Payment in full in Cash shall be made to the Holders of Allowed Class 1 Claims as soon as
practicable after the later of (i) the Effective Date, and (ii) the date on which such Claim
becomes an Allowed Claim. The Holders of Claims in this Class are not entitled to vote.
4.3 Treatment of Class 2 Claims - Secured Claims. Class 2 Secured Claims are
Unimpaired. The Debtors believe that all valid Secured Claims were paid in full or otherwise
released or satisfied during the course of the Chapter 11 Cases and that there are no valid
Allowed Claims in this class. To the extent there are any Claims in this class, each such Claim
shall be deemed to be a separate subclass. To the extent there are any Allowed Class 2 Claims,
at the option of the Debtors, either (i) the legal, equitable, and contractual rights to which such
Claim entitles the Holder thereof shall be left unaltered, (ii) the Claim shall be left Unimpaired in
the manner described in Section 1124(2) of the Bankruptcy Code, or (iii) the Holder of such
Claim shall receive or retain the collateral securing such Claim. The Holders of Claims in this
Class, if any, are not entitled to vote.
4.4 Treatment of Class 3 Claims - General Unsecured Claims. Class 3 General
Unsecured Claims are impaired. Each Holder of an Allowed Class 3 Claim shall receive in
respect of such Claim its Pro Rata distribution of the liquidated assets of the estates after the
payment or reserve for Administrative Claims, Priority Tax Claims, Priority Claims, Secured
Claims, and Plan Expenses. The Holders of Claims in this Class are entitled to vote.
4.5 Treatment of Class 4 Interests. Class 4 Interests are impaired. The Holders of
Class 4 Interests shall receive no distribution. On the Effective Date, all Class 4 Interests shall
be deemed canceled, null and void, and of no force and effect. The Holders of Class 4 Interests
are deemed to reject the Plan and are not entitled to vote
4.6 Voting Classes. Each Holder of an Allowed Claim in Class 3 is entitled to vote
either to accept or to reject the Plan. Only those votes cast by Holders of Allowed Claims shall
be counted in determining whether acceptances have been received sufficient in number and
amount to obtain Confirmation.
4.7 Acceptance by Impaired Classes. An Impaired Class of Claims shall have
accepted the Plan if: (a) the Holders (other than any Holder designated under section 1126(e) of
the Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually voting in
such Class have voted to accept the Plan, and (b) the Holders (other than any Holder designated
DOCS_DE:l56322.4
9
under section 1126(e) of the Bankruptcy Code) of more than one-half in number ofthe Allowed
Claims actually voting in such Class have voted to accept the Plan. Classes 1 and 2 are each
deemed to have accepted the Plan and are not entitled to vote thereon.
4.8 Presumed Rejection of Plan. The Holders of Class 4 Interests shall not receive
any distributions under the Plan and are therefore deemed to reject the Plan and are not entitled
to vote.
4.9 Nonconsensual Confirmation. Because Class 4 is deemed to reject the Plan by
operation of law, the Debtors will request that the Bankruptcy Court confirm the Plan in
accordance with section 1129(b) of the Bankruptcy Code. Without limiting the foregoing, in the
event that any Class of Claims entitled to vote on the Plan fails to accept the Plan as required by
section 1129(a) of the Bankruptcy Code, the Plan may be amended and, in any event, the
Debtors reserve the right to seek confirmation of the Plan over such rejection pursuant to section
1129(b) ofthe Bankruptcy Code.
4.10 How to Vote. A form of Ballot is being provided to Creditors in Class 3 that hold
Allowed Claims by which Creditors in such Class may vote their acceptance or rejection of the
Plan. The Ballot for voting on the Plan gives you one important choice to make with respect to
the Plan-you can vote for or against the Plan. To vote on the Plan, please complete the Ballot,
as indicated thereon by, (1) indicating on the enclosed Ballot that (a) you accept the Plan or
(b) you reject the Plan and (2) signing your name and mailing the Ballot in the envelope
provided for this purpose. The Claims Agent will count the Ballots.
IN ORDER TO BE COUNTED, BALLOTS MUST BE COMPLETED, SIGNED AND
RECEIVED NO LATER THAN 4:00 P.M. PREVAILING EASTERN TIME ON
______ , 2010, AT THE FOLLOWING ADDRESS:
If by first class mail, overnight mail, or hand delivery:
eToys Direct 1, LLC-Ballot Processing
c/o Omni Management Group LLC
16161 Ventura Blvd.
Suite C, PMB 439
Encino, CA 91436-2522
DO NOT SEND YOUR BALLOT VIA FACSIMILE OR E-MAIL.
IF YOUR BALLOT IS NOT PROPERLY COMPLETED, SIGNED AND RECEIVED
AS DESCRIBED, IT WILL NOT BE COUNTED. IF YOUR BALLOT IS DAMAGED OR
LOST, YOU MAY REQUEST A REPLACEMENT BY ADDRESSING A WRITTEN
REQUEST TO THE ADDRESS SHOWN ABOVE. FACSIMILE OR ELECTRONICALLY
SUBMITTED BALLOTS WILL NOT BE COUNTED.
DOCS_DE:156322.4
10
ARTICLES
MEANS FOR IMPLEMENTATION OF THE PLAN
5.1 Corporate Action. On the Effective Date and automatically and without further
action, (i) each existing member of the Board of Directors of the Debtors will resign or be
terminated by the Plan Administrator and (ii) the Plan Administrator shall be deemed the sole
shareholder, officer, and director of the Post-Confirmation Debtors. The Plan will be
administered by the Plan Administrator, and all actions taken thereunder in the name of the Post-
Confirmation Debtors shall be taken through the Plan Administrator.
5.2 Plan Administrator. On the Effective Date, the Plan Administrator shall begin
acting for the Post-Confirmation Debtors in the same fiduciary capacity as applicable to a board
of directors, subject to the provisions hereof. The Plan Administrator shall be compensated at
the rate of $450 per hour and may be paid without further order of the Bankruptcy Court. The
Plan Administrator shall be entitled to reimbursement for his actual, reasonable, and necessary
expenses incurred in connection with the performance of his duties, without the need for further
Bankruptcy Court approval. The Plan Administrator shall not be liable for any action he takes or
omits to take that he believes in good faith to be authorized or within his rights or powers, absent
gross negligence or willful misconduct on his/her part. All distributions to be made to Creditors
under the Plan shall be made by the Plan Administrator, who shall deposit and hold all Cash in
trust for the benefit of Creditors (including Professionals) receiving distributions under the Plan.
The duties and powers of the Plan Administrator shall include the following:
(a) To exercise all power and authority that may be exercised, to commence all
proceedings (including the power to continue any actions and proceedings that may have been
commenced by the Debtors or the Committee prior to the Effective Date) that may be
commenced, and to take all actions that may be taken by any officer, director, or shareholder of
the Post-Confirmation Debtors with like effect as if authorized, exercised, and taken by
unanimous action of such officers, directors, and shareholders, including consummating the Plan
and all transfers thereunder on behalf of the Post-Confirmation Debtors;
(b) To maintain all accounts, make distributions, and take other actions consistent
with the Plan, including the maintenance of appropriate reserves, in the name of the Post-
Confirmation Debtors;
(c) To take all steps necessary to terminate the corporate existence of the Debtors;
(d) To prosecute objections to Claims and compromise or settle any Claims
(Disputed or othe1wise );
(e) To prosecute any and all Litigation and compromise or settle any Litigation;
(f) To employ and compensate any and all such professionals as the Plan
Administrator, in his sole discretion, deems reasonably necessary to perform his duties under the
Plan without further order of the Bankruptcy Court; and
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(g) To take all other actions not inconsistent with the provisions of the Plan that the
Plan Administrator deems reasonably necessary or desirable in connection with the
administration of the Plan.
5.3 Resignation, Death, or Removal. The Plan Administrator may be removed by the
Bankruptcy Court upon application for good cause shown. In the event of the resignation,
removal, death, or incapacity of the Plan Administrator, the Committee shall be deemed
reconstituted for the sole purpose of designating another Person to become Plan Administrator,
subject to Bankruptcy Court approval, and thereupon the successor Plan Administrator without
any further act shall become fully vested with all of the rights, powers, duties, and obligations of
his or her predecessor.
5.4 Winding Up Affairs. Following the Confirmation Date, the Post-Confirmation
Debtors shall not engage in any business activities or take any actions, except those necessary to
effectuate the Plan and wind up the affairs of the Debtors. On and after the Effective Date, the
Plan Administrator may, in the name of the Post-Confirmation Debtor, take such actions without
supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy
Code or the Bankruptcy Rules, other than any restrictions expressly imposed by the Plan or the
Confirmation Order. Without limiting the foregoing, the Plan Administrator may, without
application to or approval of the Bankruptcy Court, pay the charges that he or she incurs after the
Effective Date for professional fees and expenses that, but for the occurrence of the Effective
Date, would constitute Allowed Administrative Claims.
5.5 Release of Liens. Except as otherwise provided in the Plan or in any contract,
instrument or other agreement or document created in connection with the Plan, on the Effective
Date, all mortgages, deeds of trust, liens or other security interests against the Property of the
Debtors' estates shall be released, and all the right, title, and interest of any Holder of such
mortgages, deeds of trust, liens, or other security interests shall revert to the Post-Confirmation
Debtors and their successors and assigns.
5.6 Rights of Actions. On the Effective Date, any right, claim or cause of action,
belonging to the Debtors or their estates or to the Committee against any Person or Entity,
including without limitation, any Litigation, and including specifically preference actions that, by
agreement of the Debtors and the Committee approved by the Bankruptcy Court on June 5, 2009,
were previously assigned to the Committee shall be vested in and retained by the Post-
Confirmation Debtors. The Plan Administrator shall pursue, settle, or release all reserved
Litigation, as appropriate, in accordance with the best interest of and for the benefit of the
Creditors entitled to receive distributions under the Plan.
5.7 Professional Fees and Expenses.
(a) Each Professional retained or requesting compensation in the Chapter 11
Cases, pursuant to sections 327, 328, 330, 331 or 503(b) ofthe Bankruptcy Code, in connection
with fees incurred prior to the Effective Date shall file an application for allowance of final
compensation and reimbursement of expenses in the Chapter 11 Case before the forty-fifth (45th)
DOCS_DE:156322.4
12
day after the Effective Date. Objections to such applications may be filed on or before the sixty-
fifth (65th) day after Effective Date.
(b) Professionals that perform post-Confirmation Date services for the Post-
Confirmation Debtors or the Plan Administrator shall provide monthly invoices to the Plan
Administrator describing the services rendered and the fees and expenses incurred in connection
therewith, on or before the 20th day following the end of the calendar month during which such
services were performed. Professional Persons who tender such invoices shall be paid by the
Plan Administrator for such services from the Plan Expense Reserve Fund created under Section
6.1 of the Plan on or after the date that is fifteen (15) days after the submission to the Plan
Administrator by such Professional Persons of said monthly invoices, unless, within said fifteen
(15) day period, a written objection to said payment is made, in which event such payment shall
be made only upon either (a) agreement of the parties or (b) Order of the Bankruptcy Court.
5.8 Dissolution of Committee. Upon the occurrence of the Effective Date, the
Committee shall be dissolved, and each individual member and any retained Professional shall
be discharged from any further activities in the Chapter 11 Cases. The professionals retained by
the Committee and the members thereof will not be entitled to assert any fee claims for services
rendered or expenses incurred after the Effective Date, except for reasonable fees for (i) services
rendered, and actual and necessary expenses incurred, in connection with any applications for
allowance of compensation and reimbursement of expenses pending on the Effective Date or
filed and served after the Effective Date for services provided prior to the Effective Date or
(ii) services rendered, and actual and necessary expenses incurred, in connection the selection of
any successor Plan Administrator pursuant to Section 5.3 of the Plan.
5.9 Dissolution. As soon as practicable after the Effective Date, the Debtors shall be
dissolved for all purposes without the necessity for any other or further actions to be taken by or
on behalf of the Debtors or payments to be made in connection therewith, provided, however,
that pursuant to sections 1124(b) of the Bankruptcy Code, the Plan Administrator shall be
authorized to file the Debtors' final tax returns and shall be authorized to file and shall file with
the official public office for keeping corporate records in the Debtors' states of incorporation a
certificate of dissolution or equivalent document. From and after the Effective Date, the Debtors
(i) for all purposes shall be deemed to have withdrawn their business operations from any state in
which there were previously conducting or are registered or licensed to conduct their business
operations, and the Debtors shall not be required to file any document, pay any sum or take any
other action, in order to effectuate such withdrawal, (ii) shall not be liable in any manner to any
taxing authority for franchise, business, license or similar taxes accruing on or after the Effective
Date.
5.1 0 On or as soon as practicable after the Effective Date, the Post-Confirmation
Debtors and the Plan Administrator may obtain a fidelity bond or similar insurance in the
estimated amount of the Assets on the Effective Date. In addition, the Plan Administrator may
obtain (if available) directors' and officers' liability insurance or errors and omission insurance
(or equivalent insurance), provided that such insurance is available at a reasonable price.
DOCS_DE:l56322.4
13
ARTICLE6
DISTRIBUTIONS
6.1 Reserve for Plan Expenses. Prior to making any distributions, the Plan
Administrator shall set aside, deduct and reserve an amount of Cash equal to the estimated
amount of Plan Expenses. Any Cash in such Plan Expense reserve that the Plan Administrator
deems to be excess prior to the closing of the Chapter 11 Case shall be distributed to Holders of
Allowed Claims and Interests pursuant to Article 4 of the Plan.
6.2 Objections to Claims. Objections to Claims shall be filed with the Bankruptcy
Court and served upon affected Creditors no later than one hundred twenty (120) days after the
Effective Date, provided, however, that this deadline may be extended by the Bankruptcy Court
upon motion of the Plan Administrator. Notwithstanding the foregoing, in the event that a party
filing any Claim after the applicable Bar Date shall obtain the written consent of the Plan
Administrator to file such Claim late or obtains an order of the Bankruptcy Court upon notice to
the Plan Administrator that permits the late filing of the Claim, then the Plan Administrator and
Post-Confirmation Debtors shall have one hundred twenty (120) days from the date of such
written consent or order to object to such Claim, which deadline may be extended by the
Bankruptcy Court upon motion of the Plan Administrator. Subject to Bankruptcy Court
approval, objections to Claims may be litigated to judgment, settled, or withdrawn by the Plan
Administrator consistent with Article 5.2 of this Plan.
6.4 Distributions on Disputed Claims. Distributions with respect to and on account of
Disputed Claims will be made as soon as practicable after an order, judgment, decree or
settlement agreement with respect to such Claim becomes a Final Order rendering such Claim
and Allowed Claim, provided that (a) the applicable Creditor shall not receive interest on its
Allowed Claim, despite anything contained herein to the contrary, from the date the objection is
filed and served to the date of allowance of such Claim and (b) nothing herein shall require the
Plan Administrator to make a distribution other than in accordance with Article 6.1 of this Plan.
6.5 Disputed Claim Reserves. On and after the Effective Date, the Plan
Administrator shall establish and maintain reserves for all Disputed Claims. For purposes of
establishing a reserve, Cash will be set aside equal to the amount that would have been
distributed to the Holders of Disputed Claims in such Class had their Disputed Claims been
deemed Allowed Claims on the Effective Date or such other amount as may be approved by the
Bankruptcy Court upon motion of the Plan Administrator. If, when, and to the extent any such
Disputed Claim becomes an Allowed Claim by Final Order or by settlement by the Plan
Administrator, the relevant portion of the Cash held in reserve therefor shall be distributed by the
Plan Administrator to the Creditor. The balance of such Cash, if any, remaining after all
Disputed Claims have been resolved, shall be distributed Pro Rata to all Holders of Allowed
Claims in accordance with Article 4 of the Plan. No payments or distributions shall be made
with respect to a Claim which is a Disputed Claim pending the resolution of the dispute by
settlement or Final Order.
DOCS_DE:156322.4
14
6.6 Unclaimed Property. Within forty ( 40) days after any distribution, the Plan
administrator shall file with the Bankruptcy Court and serve upon all parties requesting notice a
report of undeliverable distributions. If any distribution remains unclaimed for a period of
sixty (60) days after it has been delivered (or attempted to be delivered) in accordance with the
Plan to the Holder entitled thereto, or if such distribution is returned to the Plan Administrator by
the United States Postal Service marked as undeliverable, such unclaimed property shall be
forfeited by such Holder absent further order of the Bankruptcy Court. Furthermore, all right,
title and interest in and to the unclaimed property shall be held in reserve by the Plan
Administrator to be distributed to other Creditors in accordance with this Plan. Any distribution
that remains unclaimed for a period of sixty (60) days after the Plan Administrator's making of
the final distribution under the Plan shall, after satisfaction of any accrued but unpaid Plan
Expenses, be contributed by the Plan Administrator to a charitable organization to be selected by
the Plan Administrator.
6.7 Withholding Taxes. Any federal, state, or local withholding taxes or other
amounts required to be withheld under applicable law shall be deducted from distributions
hereunder. All Persons holding Claims shall be required to provide any information necessary to
effect the withholding of such taxes. Allowed Claims of Holders otherwise entitled to receive a
distribution under the Plan but who fail to provide a complete IRS W-9 form within thirty (30)
days after request is made by the Plan Administrator shall be entitled to no distribution without
further order of the Bankruptcy Court; provided, however, that where any such Holder would be
entitled to receive a distribution of $10,000 or more, the Plan Administrator shall seek an order
of the Bankruptcy Court expunging the Claim.
6.8 Fractional Cents. Any other provlSlon of this Plan to the contrary
notwithstanding, no payment of fractions of cents will be made. Whenever any payment of a
fraction of a cent would otherwise be called for, the actual payment shall reflect a rounding down
of such fraction to the nearest whole cent.
6.9 Payments of Less than Twenty-Five Dollars. If a cash payment otherwise
provided for by this Plan with respect to an Allowed Claim or Interest would be less than twenty-
five ($25.00) dollars (whether in the aggregate or on any payment date provided in this Plan),
notwithstanding any contrary provision of this Plan, the Plan Administrator shall not be required
to make such payment and such funds shall be otherwise distributed to Holders of Allowed
Claims in accordance with Article 4 of the Plan. The Plan Administrator may decide to make a
charitable donation with undistributed funds if in the reasonable judgment of the Plan
Administrator the cost of calculating and making the final distribution of the remaining
distributable funds is excessive in relation to the benefits to Creditors who would otherwise be
entitled to such funds, and the Claims of any such Holders shall be entitled to no further
distribution without further order of the Bankruptcy Court.
6.10 Setoffs. Except as otherwise provided for herein, the Plan Administrator may, but
shall not be required to, set off against any Claim and the payments to be made pursuant to this
Plan in respect of such Claim, claims of any nature whatsoever that the Debtors or their estates
may have against the Creditor, but neither the failure to do so nor the allowance of a Claim
DOCS_DE:156322.4
15
hereunder shall constitute a waiver or release by the Debtors or their estates of any claim it may
have against the Creditor.
ARTICLE7
UNEXPIRED LEASES AND EXECUTORY CONTRACTS
7.1 Any and all pre-petition leases or executory contracts not previously rejected by
the Debtors, unless specifically assumed pursuant to order(s) of the Bankruptcy Court prior to
the Confirmation Date or the subject of a motion to assume or assume and assign pending on the
Confirmation Date, shall be deemed rejected by the Debtors on the Confirmation Date; provided,
however, that nothing in this Article shall cause the rejection, breach, or termination of any
contract of insurance benefiting the Debtors and their estates.
7.2 All proofs of claim with respect to claims arising from the rejection of executory
contracts or leases shall, unless another order of the Bankruptcy Court provides for an earlier
date, be filed with the Bankruptcy Court within thirty (30) days after the mailing of notice of
entry ofthe Confirmation Order.
ARTICLES
CONDITIONS PRECEDENT EFFECTIVENESS OF THE PLAN
8.1 Conditions to Consummation. The Plan shall not become effective unless and
until each of the following conditions has been satisfied:
(a) The Bankruptcy Court shall have entered the Confirmation Order; and
(b) The Confirmation Order shall have become a Final Order.
8.2 Waiver of Conditions. The Debtors, in their sole discretion, may at any time,
without notice or authorization of the Bankruptcy Court, waive the conditions set forth in Section
8.1 (b) above. The failure of the Debtors to satisfy or waive such condition may be asserted by
the Debtors regardless of the circumstances giving rise to the failure of such condition to be
satisfied (including any action or inaction by the Debtors). The Debtors reserve the right to
assert that any appeal from the Confirmation Order shall be moot after consummation of the
Plan.
8.3 Effect ofFailure of Condition. In the event that the condition specified in Section
8.1 (b) of the Plan has not occurred or been waived on or before ninety (90) days after the
Confirmation Date, the Confirmation Order may be vacated upon order of the Bankruptcy Court
after motion made by the Debtors or any party in interest.
8.4 Substantive Consolidation Order. The Plan shall serve as a motion seeking entry
of an order substantively consolidating these Chapter 11 Cases for distribution and voting
purposes. Unless an objection to substantive consolidation is made in writing by any Creditor
DOCS_DE:I56322.4
16
affected by the Plan as herein provided on or before the Plan Objection Deadline, an order
substantively consolidating these Chapter 11 Cases for distribution and voting purposes may be
entered by the Bankruptcy Court, which order may be the Confirmation Order. In the event any
such objections are timely filed, a hearing with respect thereto shall be scheduled by the
Bankruptcy Court, which hearing may, but need not, coincide with the Confirmation Hearing.
8.5 Effect/Extent of Substantive Consolidation. In effectuation of such substantive
consolidation, on the Effective Date: (a) no Distributions will be made under the Plan on
account of the Intercompany Claims; (b) the guarantees of the Debtors will be deemed
eliminated so that any Claim against the Debtors and any guarantee thereof executed by any
Debtor and any joint and several liability of the Debtors with one another will be deemed to be
one obligation of these Debtors; (c) each and every Claim against the Debtors will be deemed
asserted as a single Claim against the Debtors as a whole, and will be treated in the same Class
regardless of the Debtor; and (d) all distributions on account of Allowed Claims will be made
from The Parent Company. Additionally, notwithstanding the substantive consolidation herein,
substantive consolidation shall not affect the obligation of each and every one of the Debtors
under 28 U.S.C. 1930(a)(6) until a particular case is closed, converted, or dismissed.
. 8.6 Reservation of Rights. The Debtors reserve the right at any time up to the
conclusion of the Confirmation Hearing to withdraw their request for substantive consolidation
of these Chapter 11 Cases, to seek Confirmation of the Plan as if there were no substantive
consolidation, and to seek Confirmation of the Plan with respect to one Debtor even if
Confirmation with respect to the other Debtors is denied.
ARTICLE9
RETENTION OF JURISDICTION
9.1 Following the Confirmation Date and until such time as all payments and
distributions required to be made and all other obligations required to be performed under this
Plan have been made and performed by the Plan Administrator, the Bankruptcy Court shall
retain jurisdiction as is legally permissible, including, without limitation, for the following
purposes:
(a) Claims. To determine the allowability, classification, or priority of
Claims against the Debtors upon objection by the Plan Administrator or any other party in
interest.
(b) Injunction, etc. To issue injunctions or take such other actions or make
such other orders as may be necessary or appropriate to restrain interference with the Plan or its
execution or implementation by any Person, to construe and to take any other action to enforce
and execute the Plan, the Confirmation Order, or any other order of the Bankruptcy Court, to
issue such orders as may be necessary for the implementation, execution, performance and
consummation of the Plan and all matters referred to herein, and to determine all matters that
may be pending before the Bankruptcy Court in the Chapter 11 Cases on or before the Effective
Date with respect to any Entity.
DOCS_DE:l56322.4
17
(c) Professional Fees. To determine any and all applications for allowance of
compensation and expense reimbursement of Professionals for periods before or after the
Effective Date, as provided for in the Plan.
(d) Dispute Resolution. To resolve any dispute arising under or related to the
implementation, execution, consummation or interpretation of the Plan and the making of
distributions thereunder, including, without limitation, any dispute concerning payment of
professional fees and expenses of the Plan Administrator.
(e) Leases and Executory Contracts. To determine any and all motions for
the rejection, assumption, or assignment of executory contracts or unexpired leases, and to
determine the allowance of any Claims resulting from the rejection of executory contracts and
unexpired leases.
(f) Actions. To determine all applications, motions, adversary proceedings,
contested matters, actions, and any other litigated matters instituted prior to the closing of the
Chapter 11 Cases, including any remands.
(g) Litigation. To determine any and all "Litigation" as defined under
Section 1.33, including, but not limited to, any causes of action against Ernst & Young LLP and
its officers and directors, and Posh Ventures, LLC, and any of its affiliates or subsidiaries and its
officers or directors.
(h) General Matters. To determine such other matters, and for such other
purposes, as may be provided in the Confirmation Order or as may be authorized under
provisions of the Bankruptcy Code.
(i) Plan Modification. To modify the Plan under Section 1127 of the
Bankruptcy Code, remedy any defect, cure any omission, or reconcile any inconsistency in the
Plan or the Confirmation Order so as to carry out its intent and purposes.
G) Aid Consummation. To issue such orders in aid of consummation of the
Plan and the Confirmation Order notwithstanding any otherwise applicable non-bankruptcy law,
with respect to any Entity, to the full extent authorized by the Bankruptcy Code.
(k) Implementation of Confirmation Order. To enter and implement such
orders as may be appropriate in the event the Confirmation Order is for any reason stayed,
revoked, modified or vacated.
(1) Final Decree. To enter a Final Decree closing these Chapter 11 Cases.
DOCS_DE:I56322.4
18
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Pre-Confirmation Modification. The Plan may be altered, amended or modified
by the Debtors before the Confirmation Date as provided in Section 1127 of the Bankruptcy
Code.
10.2 Post-Confirmation Immaterial Modification. The Plan Administrator and/or Post-
Confirmation Debtors may, with the approval of the Bankruptcy Court and without notice to all
Holders of Claims and Interests, insofar as it does not materially and adversely affect the interest
of Holders of Claims, correct any defect, omission or inconsistency in the Plan in such manner
and to such extent as may be necessary to expedite consummation of this Plan.
10.3 Post-Confirmation Material Modification. The Plan may be altered or amended
after the Confirmation Date by the Plan Administrator and/or Post-Confirmation Debtors in a
manner which, in the opinion of the Bankruptcy Court, materially and adversely affects Holders
of Claims, provided that such alteration or modification is made after a hearing as provided in
Section 1127 ofthe Bankruptcy Code.
10.4 Withdrawal or Revocation of the Plan. The Debtors reserve the right to revoke or
withdraw the Plan prior to the Effective Date. If the Debtors revoke or withdraw the Plan, then
the result shall be the same as if the Confirmation Order had not been entered and the Effective
Date had not occurred.
10.5 Successors and Assigns. The rights, benefits and obligations of any Entity named
or referred to in the Plan shall be binding on, and shall inure to the benefit of, the heirs,
executors, administrators, successors and/or assigns of such Entities.
10.6 Exculpation. Except as otherwise provided by the Plan or the Confirmation
Order or other Final order of the Bankruptcy Court, on the Effective Date, the Debtors,
certain of the Debtors' officers and directors expressly limited to Charles Goodrich, Philip
Manoff and Michael Miyaki, the Committee and its individual members, the Plan
Administrator, and their respective bankruptcy professionals including attorneys and
financial advisors, and their successors and assigns, shall be deemed released by each of
them against the other of and from any claims, obligations, rights, causes of action and
liabilities for any act or omission in connection with, or arising out of, the Chapter 11
Cases, including, without limiting the generality of the foregoing, all sales of assets, the
Disclosure Statement, the pursuit of approval of the Disclosure Statement, the pursuit of
confirmation of the Plan, tbe consummation of tbe Plan or tbe administration of the Plan
or the property to be distributed under the Plan, except for acts or omissions that
constitute willful misconduct, gross negligence or fraud, and all such Persons, in all
respects, shall be entitled to rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan and under the Bankruptcy Code.
DOCS_DE: 156322.4
19
10.7 Injunction. Except as otherwise provided in the Plan, on and after the
Confirmation Date, all Entities who have held, hold or may hold Claims against the
Debtors or Interests in the Debtors are, with respect to any such Claims or Interests,
permanently enjoined from and after the Confirmation Date from: (a) commencing,
conducting or continuing in any manner, directly or indirectly, any suit, action or other
proceeding of any kind (including, without limitation, any proceeding in a judicial,
arbitral, administrative or other forum) against or affecting the Debtors, the Post-
Confirmation Debtors, any of their property, or any direct or indirect transferee of any
property of, or direct or indirect successor in interest to, any of the foregoing Entities, or
any property of any such transferee or successor; (b) enforcing, levying, attaching
(including, without limitation, any pre-judgment attachment), collecting or otherwise
recovering by any manner or means whether directly or indirectly, of any judgment,
award, decree or order against the Debtors, the Post-Confirmation Debtors, any of their
property, or any direct or indirect transferee of any property of, or direct or indirect
successor in interest to any of the foregoing Entities; (c) creating, perfecting or otherwise
enforcing in any manner, directly or indirectly, any encumbrance of any kind against the
Debtors, the Post-Confirmation Debtors, any of their property, or any direct or indirect
transferee of any property of, or direct or indirect successor in interest to any of the
foregoing Entities; (d) asserting any right of setoff, of any kind, directly or indirectly,
against any obligation due the Debtors, the Post-Confirmation Debtors, any of their
property, or any direct or indirect transferee of any property of, or successor in interest to,
any of the foregoing Entities; and (e) taking any actions in any place and in any manner
whatsoever that do not conform to or comply with the provisions of the Plan.
10.8 Cramdown. To the extent any Impaired Class of Claims or Interest Holders
entitled to vote on the Plan votes to reject the Plan, the Debtors reserves the right to request
confirmation of the Plan under Section 1129(b) of the Bankruptcy Code with respect to such
Class(es).
10.9 Governing Law. Except to the extent that the Bankruptcy Code is applicable, the
rights and obligations arising under this Plan shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware.
10.10 United States Trustee Fees. All outstanding amounts due under 28 U.S.C. 1930
that have not been paid shall be paid by the Debtors on or before the Effective Date. Thereafter,
the Plan Administrator shall pay any statutory fees due pursuant to 28 U.S.C. 1930(a)(6) and
such fees shall be paid until entry of a final decree or an order converting or dismissing these
Chapter 11 Cases.
10.11 Notices. Any notice required or permitted to be provided under the Plan shall be
in writing and served by either (a) certified mail, return receipt requested, postage prepaid,
(b) hand delivery or (c) reputable overnight courier service, freight prepaid, to be addressed as
follows:
DOCS_DE:IS6322.4
20
To: The Post-Confirmation Debtors
and Plan Administrator:
Steven D. Sass LLC
Plan Administrator
P.O. Box45
Clarksville, MD 21029
Email: [email protected]
[email protected]
With a copy to:
Pachulski Stang Ziehl & Jones LLP
Laura Davis Jones
Jeffrey W. Dulberg
Michael R. Seidl
919 N. Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Email: [email protected]
[email protected]
[email protected]
To: The Committee:
ARENT FOX LLP
Schuyler G. Carroll
1675 Broadway
New York, NY 10019
Telephone: 212-484-3900
Facsimile: 212-484-3990
Email: [email protected]
10.12 Non-Voting Equity Securities. To the extent applicable, the Debtors shall comply
with the provisions of Section 1123(a)(6) of the Bankruptcy Code.
10.13 Retiree Benefits. From and after the Effective Date, to the extent required by
Section 1129(a)(13) of the Bankruptcy Code, the Post-Confirmation Debtors shall continue to
pay all retiree benefits (as defined in Section 1114 of the Bankruptcy Code), if any, established
or maintained by the Debtors prior to the Effective Date. The Debtors believe that there are no
such benefits.
10.14 Saturday, Sunday, or Legal Holiday. If any payment or act under the Plan is
required to be made or performed on a date that is not a Business Day, then the making of such
payment or the performance of such act may be completed on the next succeeding Business Day
but shall be deemed to have been completed as of the required date.
DOCS_DE:156322.4
21
1 0.15 Section 1146 Exemption. Pursuant to Section 1146( c) of the Bankruptcy Code,
the issuance, transfer, or exchange of any security under the Plan or the making or delivery of
any instrument of transfer pursuant to, in implementation of, or as contemplated by, the Plan or
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 shall not be taxed under any state or local law
imposing a stamp tax, transfer tax, or similar tax or fee.
10.16 Severability. If any term or provision of the Plan is held by the Bankruptcy Court
prior to or at the time of Confirmation to be invalid, void, or unenforceable, the Bankruptcy
Court shall have the power to alter and interpret such term or provision to make it valid or
enforceable to the maximum extent practicable, consistent with the original purpose of the term
or provision held to be invalid, void, or unenforceable, and such term or provision shall then be
applicable as so altered or interpreted. In the event of any such holding, alteration, or
interpretation, the remainder of the terms and provisions of the Plan may, at the Debtors' option
remain in full force and effect and not be deemed affected. However, the Debtors reserve the
right not to proceed to Confirmation or consummation of the Plan if any such ruling occurs. The
Confirmation Order shall constitute a judicial determination and shall provide that each term and
provision of the Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
10.17 Headings. The headings used in this Plan are inserted for convenience only and
neither constitute a portion of the Plan nor in any manner affect the provisions of the Plan.
10.18 Waiver of Stay. The Debtors request as part of the Confirmation Order a waiver
from the Bankruptcy Court of the ten day stay of Bankruptcy Rule 3020(e) and, to the extent
applicable, a waiver of the ten day stay of Bankruptcy Rule 6004(g).
10.19 Substantial Consummation. On the Effective Date, the Plan shall be deemed
substantially consummated for voting and distribution purposes under Bankruptcy Code sections
1101 and 1127(b).
DOCS_DE:l56322.4
22
ARTICLE 11
CONFIRMATION REQUEST
11.1 The Debtors and the Committee hereby request confirmation of the Plan pursuant
to Section 1129(a) and Section 1129(b) ofthe Bankruptcy Code.
Dated: May 11, 2010
DOCS_DE:I56322.4
eToys Direct 1, LLC; The Parent Company; BabyUniverse,
Inc.; Dreamtime Baby, Inc.; eToys Direct, Inc.; PoshTots,
Inc.; eToys Direct 2, LLC; eToys Direct 3, LLC; Gift
Acquisition, L.L.C.; and My Twinn, Inc.
By: Is/ Charles A. Goodrich
Name: Charles A. Goodrich
Title: CEO
23
Submitted by:
Counsel for Debtors and Debtors in
Possession:
Is/ Michael R. Seidl
PACHULSKI STANG ZIEHL & JONES LLP
Laura Davis Jones (Bar No. 2436)
Jeffrey W. Dulberg (CA Bar No. 181200)
Michael R. Seidl (Bar No. 3889)
919 N. Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Telephone: 302-652-4100
Facsimile: 302-652-4400
DOCS_DE: 156322.4
Counsel for Official Committee ofUnsecured
Creditors:
Is/ Schuyler G. Carroll
ARENT FOX LLP
Schuyler G. Carroll
1675 Broadway
New York, NY 10019
Telephone: 212-484-3900
Facsimile: 212-484-3990
-and-
ELLIOTT GREENLEAF
Rafael X. Zahralddin-Aravena (Bar No. 4166)
1105 Market Street, Suite 1700
Wilmington, DE 19801
Telephone: 302-384-9400
Facsimile: 302-384-9399
24