OLD TIME POTTERY, LLC, ) Chapter 11 ) Judge Harrison Debtor

IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

IN RE: ) ) Case No. 3:20-bk-03138 OLD TIME POTTERY, LLC, ) Chapter 11 ) Judge Harrison Debtor. )

IN RE: ) ) Case No. 3:20-bk-03139 OTP HOLDINGS, LLC, ) Chapter 11 ) Judge Harrison Debtor. )

DISCLOSURE STATEMENT FOR THE JOINT CHAPTER 11 PLAN OF OLD TIME POTTERY, LLC AND ITS DEBTOR AFFILIATES

THIS IS NOT YET A SOLICITATION OF AN ACCEPTANCE OR REJECTION OF THE PLAN. ACCEPTANCES OR REJECTIONS MAY NOT BE SOLICITED UNTIL THIS DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT. THE INFORMATION IN THIS DISCLOSURE STATEMENT IS SUBJECT TO CHANGE. THIS DISCLOSURE STATEMENT IS NOT AN OFFER TO SELL ANY SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY ANY SECURITIES.

AFTER OBTAINING COURT APPROVAL, THE DEBTORS WILL PROVIDE THE INFORMATION IN THIS DISCLOSURE STATEMENT TO HOLDERS OF CLAIMS FOR PURPOSES OF SOLICITING VOTES TO ACCEPT OR REJECT THE JOINT CHAPTER 11 PLAN OF OLD TIME POTTERY, LLC AND ITS DEBTOR AFFILIATES. NOTHING IN THIS DISCLOSURE STATEMENT MAY BE RELIED UPON OR USED BY ANY ENTITY FOR ANY OTHER PURPOSE. BEFORE DECIDING WHETHER TO VOTE FOR OR AGAINST THE PLAN, EACH HOLDER ENTITLED TO VOTE SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION IN THIS DISCLOSURE STATEMENT, INCLUDING THE RISK FACTORS DESCRIBED IN ARTICLE XIII HEREIN.

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IN PREPARING THIS DISCLOSURE STATEMENT, THE DEBTORS RELIED ON FINANCIAL DATA DERIVED FROM THE DEBTORS’ BOOKS AND RECORDS AND ON VARIOUS ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES. WHILE THE DEBTORS BELIEVE THAT SUCH FINANCIAL INFORMATION FAIRLY REFLECTS THE FINANCIAL CONDITION OF THE DEBTORS AS OF THE DATE HEREOF AND THAT THE ASSUMPTIONS REGARDING FUTURE EVENTS REFLECT REASONABLE BUSINESS JUDGMENTS, NO REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES AND THEIR FUTURE RESULTS AND OPERATIONS. THE DEBTORS EXPRESSLY CAUTION READERS NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD LOOKING STATEMENTS CONTAINED HEREIN.

THE DEBTORS URGE EACH HOLDER OF A CLAIM TO CONSULT WITH ITS OWN ADVISORS WITH RESPECT TO ANY LEGAL, FINANCIAL, SECURITIES, TAX, OR BUSINESS ADVICE IN REVIEWING THIS DISCLOSURE STATEMENT, THE PLAN, AND THE PROPOSED TRANSACTIONS CONTEMPLATED THEREBY. FURTHERMORE, THE BANKRUPTCY COURT’S APPROVAL OF THE ADEQUACY OF THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE THE BANKRUPTCY COURT’S APPROVAL OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS, AMONG OTHER THINGS, SUMMARIES OF THE PLAN, CERTAIN STATUTORY PROVISIONS, AND CERTAIN ANTICIPATED EVENTS IN THE DEBTORS’ CHAPTER 11 CASES. ALTHOUGH THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE, THESE SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT THAT THEY DO NOT SET FORTH THE ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH ANTICIPATED EVENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR ANY OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THE PLAN OR SUCH OTHER DOCUMENTS WILL GOVERN FOR ALL PURPOSES. FACTUAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS’ MANAGEMENT EXCEPT WHERE OTHERWISE SPECIFICALLY NOTED. THE DEBTORS DO NOT REPRESENT OR WARRANT THAT THE INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS WITHOUT ANY MATERIAL INACCURACY OR OMISSION.

THE DEBTORS ARE MAKING THE STATEMENTS AND PROVIDING THE FINANCIAL INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AS OF THE DATE HEREOF, UNLESS OTHERWISE SPECIFICALLY NOTED. ALTHOUGH THE DEBTORS MAY SUBSEQUENTLY UPDATE THE INFORMATION IN THIS DISCLOSURE STATEMENT, THE DEBTORS HAVE NO AFFIRMATIVE DUTY TO DO SO, AND EXPRESSLY DISCLAIM ANY DUTY TO PUBLICLY UPDATE ANY FORWARD LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW

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INFORMATION, FUTURE EVENTS, OR OTHERWISE. HOLDERS OF CLAIMS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER THAT, AT THE TIME OF THEIR REVIEW, THE FACTS SET FORTH HEREIN HAVE NOT CHANGED SINCE THIS DISCLOSURE STATEMENT WAS FILED. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION, MODIFICATION, OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT TO FILE AN AMENDED OR MODIFIED PLAN AND RELATED DISCLOSURE STATEMENT FROM TIME TO TIME, SUBJECT TO THE TERMS OF THE PLAN AND CONSISTENT WITH THE PLAN SUPPORT AGREEMENT.

CONFIRMATION AND CONSUMMATION OF THE PLAN ARE SUBJECT TO CERTAIN MATERIAL CONDITIONS PRECEDENT DESCRIBED IN THE PLAN. THERE IS NO ASSURANCE THAT THE PLAN WILL BE CONFIRMED OR, IF CONFIRMED, THAT SUCH MATERIAL CONDITIONS PRECEDENT WILL BE SATISFIED OR WAIVED. YOU ARE ENCOURAGED TO READ THIS DISCLOSURE STATEMENT IN ITS ENTIRETY, INCLUDING BUT NOT LIMITED TO THE PLAN AND ARTICLE XIII OF THIS DISCLOSURE STATEMENT ENTITLED “RISK FACTORS,” BEFORE SUBMITTING YOUR BALLOT TO VOTE TO ACCEPT OR REJECT THE PLAN.

THE DEBTORS HAVE NOT AUTHORIZED ANY ENTITY TO GIVE ANY INFORMATION ABOUT OR CONCERNING THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. THE DEBTORS HAVE NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT.

IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS AND INTERESTS (INCLUDING THOSE HOLDERS OF CLAIMS AND INTERESTS WHO DO NOT SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN, OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND THE RESTRUCTURING TRANSACTION CONTEMPLATED THEREBY.

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TABLE OF CONTENTS

I. INTRODUCTION...... 1

II. PRELIMINARY STATEMENT, PURPOSE OF CHAPTER 11, & DESCRIPTION OF DEBTORS’ BUSINESS ...... 2

III. PROGRESS OF THE CHAPTER 11 CASE ...... 3 A. Filing of Petition ...... 3 B. First Day Administration ...... 3 1. Applications to Retain Professionals ...... 3 2. Motion to Pay Pre-Petition Secured Lender and Obtain Post-Petition Financing...... 4 3. Extension to File Statements and Schedules ...... 4 4. Designation of Additional Person ...... 4 5. Employee Wages and Benefits Motion ...... 4 6. Key Employee Incentive Plan ...... 4 7. Store Closure Sales ...... 5 C. Schedules of Assets and Liabilities and Monthly Operating Reports...... 5 D. Committee of Unsecured Creditors ...... 5

IV. DEBTORS’ ASSETS ...... 5 A. Cash...... 5 B. Deposits and Cash Reserves ...... 5 C. Receivables ...... 6 D. Inventory & Supplies ...... 6 E. Office Furniture & Fixtures ...... 6 F. Vehicles...... 6 G. Real Property ...... 6 H. Intangibles and Intellectual Property ...... 6 I. Cash Collateral held by PNC National Bank ...... 6 J. Other Assets ...... 7 K. Reservation of Causes of Action/Authority to Pursue, Settle or Abandon ...... 7

V. LIABILITIES OF THE DEBTOR ...... 7 A. Administrative Expenses ...... 7 1. Ordinary Course Expenses ...... 8 2. DIP Obligations ...... 8 3. Professionals ...... 8 4. Fees Due to the Office of the United States Trustee ...... 8 5. Administrative Tax Claims ...... 9 B. Secured Claims ...... 9 C. Priority Claims ...... 9 D. Unsecured Claims ...... 9 E. Reclamation Claims...... 10

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VI. FINANCIAL INFORMATION AND FUTURE OPERATIONS...... 10 A. Historical and Post-Petition Financial Information and Results of Operations ...... 10 B. Debtors’ Future Operations...... 10 C. Officers & Management ...... 11 D. Employment of Insiders ...... 11 E. Ownership of the Debtors ...... 12

VII. DISCUSSION OF THE PLAN ...... 12 A. Summary of the Plan ...... 12 B. Classification and Estimation of Claims ...... 12 1. Unclassified Claims ...... 12 2. Classified Claims ...... 13 C. Treatment of Unclassified Claims ...... 13 1. Administrative Claims...... 13 2. Secured and Priority Tax Claims...... 15 D. Treatment of Classified Claims ...... 15 E. Means of Execution and Implementation of the Plan ...... 18 F. Executory Contracts & Unexpired Leases ...... 19 G. Treatment of Claims and Distributions on Claims ...... 20 H. Effect of Confirmation, Discharge, and Injunction ...... 22 I. Miscellaneous and General Provisions of the Plan ...... 23

VIII. CONFIRMATION OF THE PLAN ...... 26 A. Confirmation Hearing...... 26 B. Requirements for Confirmation of the Plan...... 26 C. The Plan Meets All of the Requirements for Confirmation ...... 28

IX. LIQUIDATION ANALYSIS...... 28

X. SOLICITATION AND VOTING PROCEDURES ...... 29 A. Holders of Claims and Interests Entitled to Vote on the Plan...... 29 B. Voting by Holders of Disputed Claims ...... 30 C. Vote Required for Class Acceptance ...... 30 D. Voting Instructions...... 30 1. Ballots and Voting ...... 30 2. Returning Ballots and Voting Deadline ...... 30 3. Incomplete or Irregular Ballots ...... 31 4. Changing Votes ...... 31 E. Contested and Unliquidated Claims...... 31 F. Possible Reclassification of Creditors ...... 31

XI. REQUEST FOR RELIEF UNDER SECTION 1129(B) ...... 32 A. Requirements for “Cramdown” ...... 32 B. The Plan is Confirmable Under Section 1129(b) of the Bankruptcy Code ...... 33 1. The Plan Meets the “Best Interest of Creditors” Test ...... 33 2. The Plan is Feasible ...... 33

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3. The Plan Meets the Cramdown Standard With Respect to Any Impaired Class of Claims Rejecting the Plan...... 33

XII. IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT .....33 A. Additional Important Information...... 33

XIII. RISK FACTORS ...... 35 A. Bankruptcy Law Considerations...... 35 1. Parties in Interest May Object to the Plan’s Classification of Claims and Interests...... 36 2. The Debtors May Fail to Satisfy Vote Requirements...... 36 3. The Debtors May Not Be Able to Secure Confirmation of the Plan...... 36 4. Nonconsensual Confirmation...... 37 5. Continued Risk Upon Confirmation...... 37 6. The Chapter 11 Case May Be Converted to Cases Under Chapter 7 of the Bankruptcy Code...... 38 7. The Debtors May Object to the Amount or Classification of a Claim...... 38 8. Risk of Non-Occurrence of the Effective Date...... 38 9. Contingencies Could Affect Votes of Impaired Classes to Accept or Reject the Plan...... 38 B. Risks Related to Recoveries under the Plan...... 39 1. The Debtors May Not Be Able to Achieve Their Financial Projections...... 39 C. Risks Related to the Debtors’ Business...... 39 1. The Debtors May Not Be Able to Generate Sufficient Cash to Service All of Their Indebtedness...... 39 2. The Debtors Will Be Subject to the Risks and Uncertainties Associated with the Chapter 11 Case...... 39 3. Recent Global Economic Trends, ESPECIALLY IN RESPONSE TO THE COVID-19 OUTBREAK, Could Adversely Affect the Debtors’ Business, Results of Operations and Financial Condition, Primarily Through Disruption of the Debtors’ Retail Stores...... 40 4. Operating in Bankruptcy for a Long Period of Time May Harm the Debtors’ Business...... 41 5. Financial Results May Be Volatile and May Not Reflect Historical Trends...... 41 6. The Reorganized Debtors May Be Adversely Affected by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases...... 42 7. The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations...... 42 8. Business Risks...... 43 9. Notices and Disclaimers...... 43

XIV. TAX CONSEQUENCES ...... 44 A. Tax Consequences to Debtors ...... 44 B. Tax Consequences to Claimants ...... 44

XV. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND THE PLAN...... 45 A. What is Chapter 11? ...... 45

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B. Why are the Debtors sending this Disclosure Statement? ...... 45 C. Am I entitled to vote on the Plan? ...... 45 D. What classes are created under the Plan? ...... 46 E. What will I receive if I have an allowed claim in one of the classes above? ...... 47 F. How are executory contracts and unexpired leases treated under the Plan? ...... 50 G. What will I receive from the Debtors if I hold an Administrative Claim or a Priority Tax Claim?...... 51 1. Administrative Claims...... 51 H. Are any regulatory approvals required to consummate the Plan? ...... 52 I. What happens to my recovery if the Plan is not confirmed or does not go effective? ...... 52 J. If the Plan provides that I get a distribution, do I get it upon Confirmation or when the Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and “Consummation?” ...... 52 K. Will there be releases and exculpation granted to parties in interest as part of the Plan? ...... 53 L. What impact does a potential Claims Bar Date have on my Claim? ...... 53 M. What is the deadline to vote on the Plan? ...... 54 N. How do I vote for or against the Plan? ...... 54 O. Who do I contact if I have additional questions with respect to this Disclosure Statement or the Plan? ...... 54 P. Do the Debtors recommend voting in favor of the Plan? ...... 54 Q. What is the effect of the Plan on the Debtors’ ongoing business? ...... 54

XVI. RECOMMENDATION ...... 55

Exhibits & Attachments

Exhibit A: Plan of Reorganization Exhibit B: Financial Projections Exhibit C: Schedule of Contracts Exhibit D: Liquidation Analysis Exhibit E: Sources & Uses Exhibit

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I. INTRODUCTION

Old Time Pottery, LLC (“OTP”) and its debtor affiliates, as debtors and debtors in possession (collectively, the “Debtors”, “Debtor”, or “OTP”), submit this disclosure statement (as amended, modified, or supplemented, from time to time, the “Disclosure Statement”) pursuant to section 1125 of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) to Holders of Claims against and Interests in the Debtors in connection with the solicitation of acceptances with respect to the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the Bankruptcy Code (as amended, modified, or supplemented, from time to time, the “Plan”). A copy of the Plan is attached hereto as Exhibit A and incorporated herein by reference.

This Disclosure Statement and the accompanying ballot (“Ballot”) are being furnished by Debtors to the holders of Claims against Debtors pursuant to section 1125 of the United States Bankruptcy Code in connection with the solicitation of ballots for the acceptance of Debtors’ Plan of Reorganization dated August 10, 2020.

The purpose of this Disclosure Statement is to enable those persons whose Claims against Debtors are Impaired and who are entitled to vote under the Plan to make an informed decision with respect to the Plan before exercising their rights to vote to accept or reject the Plan. By Order dated ______, 2020, after notice and a hearing, this Disclosure Statement was approved by the Bankruptcy Court as containing information, of a kind and in sufficient detail, to enable persons whose votes are being solicited to make an informed judgment with respect to acceptance or rejection of the Plan. The Bankruptcy Court’s approval of this Disclosure Statement does not constitute either a guarantee of the accuracy or completeness of the information contained herein or an endorsement of any of the information contained in this Disclosure Statement or the Plan.

Holders of Claims should read this Disclosure Statement and the Plan in their entirety before voting on the Plan. No solicitation of votes with respect to the Plan may be made except pursuant to this Disclosure Statement. No statement or information concerning Debtors (particularly as to results of operations or financial condition, or with respect to distributions to be made under the Plan) or any of the assets or properties of Debtors that is given for the purpose of soliciting acceptances or rejections of the Plan is authorized, other than as set forth in this Disclosure Statement. In the event of any inconsistencies between the provisions of the Plan and this Disclosure Statement, the provisions of the Plan shall control.

After carefully reviewing this Disclosure Statement, the Plan and all exhibits and any schedules attached hereto, please indicate your acceptance or rejection of the Plan by voting in favor of or against the Plan on the enclosed Ballot. Then, RETURN THE BALLOT IN SUFFICIENT TIME TO BE RECEIVED BY NO LATER THAN _____ P.M., CENTRAL TIME, ON ______, 2020 (THE “VOTING DEADLINE”) AT THE FOLLOWING ADDRESS:

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Michelle Harding Bass, Berry & Sims, PLC 150 Third Ave. South, Suite 2800 Nashville, Tennessee 37201 Phone: (615) 259-6762 Fax: (615) 742-2848 Email: [email protected]

DEBTORS BELIEVE THAT ACCEPTANCE OF THE PLAN IS IN THE BEST INTEREST OF ALL CLAIMANTS AND, CONSEQUENTLY, THE DEBTORS URGE ALL CLAIMANTS TO VOTE TO ACCEPT THE PLAN.

Any Ballots received after the Voting Deadline will not be counted unless otherwise ordered by the Bankruptcy Court. Ballots that are received after the Voting Deadline may not be used in connection with the Debtors’ request for confirmation of the Plan or any modification thereof, except to the extent allowed by the Bankruptcy Court.

Should you have any questions regarding the voting procedures, your ballot, or the ballot instructions, or if your ballot is damaged or lost, contact Paul G. Jennings, counsel for the Debtors.

The Court has set ______, 2020, at 9:00 a.m. Central Time, in Courtroom Three, United States Bankruptcy Court for the Middle District of Tennessee, Nashville Division, Customs House, 701 Broadway, Nashville, Tennessee 37203, as the date, time, and place for the hearing on Confirmation of the Plan, and has set ______, 2020, as the date by which all objections to Confirmation of the Plan must be filed with the Bankruptcy Court and received by counsel for the Debtors and certain other persons. The Debtors will request Confirmation of the Plan at the Confirmation Hearing. The hearing will be held using Zoom, and Persons interested in participating should contact the Judge’s Courtroom Deputy.

II. PRELIMINARY STATEMENT, PURPOSE OF CHAPTER 11, & DESCRIPTION OF DEBTORS’ BUSINESS

Old Time Pottery is a retailer headquartered in Murfreesboro, Tennessee focused on selling home décor and seasonal items. As of the Petition Date, the Company operated 43 retail locations located in 11 states. Old Time Pottery was performing well prior to the shutdown of American retailers caused by the COVID-19 pandemic; however, the COVID-19 related shutdown caused Company sales to decline precipitously beginning in mid-March 2020. As a result, the Company furloughed most of its employees and took immediate steps to conserve cash. The Company’s business has improved as stay-at-home restrictions ease and more home décor shoppers venture out, but the Company believes that reorganizing under Chapter 11 of the Bankruptcy Code will be in the best long-term interest of all constituencies and allow Old Time Pottery to emerge stronger. The Debtors’ Chapter 11 voluntary petitions were filed on June 28, 2020 (the “Petition Date”).

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. The commencement of a Chapter 11 case creates an “estate” comprised of all the legal and equitable interests of the debtor. Sections 1101, 1107, and 1108 of the Bankruptcy Code provide that a

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debtor may remain in possession of its property and continue to operate its business as a “debtor in possession.”

Formulation of a plan of reorganization is the principal purpose of a Chapter 11 case. The plan is the vehicle for satisfying the holders of claims against and equity interests in a debtor.

Under the Bankruptcy Code, when soliciting acceptance or rejection of a plan of reorganization, a debtor must transmit to the holders of claims a disclosure statement approved by the court as containing “adequate information.” On ______, 2020, the Bankruptcy Court found that this Disclosure Statement contains information that is in compliance with the adequate information requirement of the Bankruptcy Code. The Disclosure Statement describes various transactions contemplated under the Plan and is supplied to you for purposes of assisting in your evaluation of, and your decision of how to vote on, the Plan.

The Plan is a comprehensive proposal by Debtors that provides for the continuation of Debtors’ business and payment in full over time of all Allowed Claims. The Plan is a significant achievement for the Debtors in the wake of a historically challenging operating environment. The Debtors strongly believe that the Plan is in the best interests of the Debtors’ estates, and represents the best available alternative at this time. The Debtors are confident that they can implement the Plan to maximize stakeholder recoveries and ensure that OTP can efficiently emerge from chapter 11 and continue to operate profitably and efficiently. For these reasons, the Debtors strongly recommend that Holders of Claims or Interests entitled to vote on the Plan vote to accept the Plan.

III. PROGRESS OF THE CHAPTER 11 CASE

A. Filing of Petition

On June 28, 2020, the Petition Date, Debtors filed a voluntary petition seeking relief under title 11 of the Bankruptcy Code.

B. First Day Administration

Immediately after Petition Date, Debtors filed several motions, including, but not necessarily limited to, the following:

1. Applications to Retain Professionals

Immediately after Petition Date, Debtors filed an application seeking to retain Bass, Berry & Sims, PLC (“Bass Berry”) as its attorneys in the bankruptcy case. The Bankruptcy Court approved the application and Debtors’ retention of Bass Berry by order dated July 24, 2020 (Docket No. 201).

Immediately after Petition Date, Debtors filed an application to employ FTI Consulting, Inc. as financial advisors to the Debtor. This application was approved by order of the Bankruptcy Court (Docket No. 202).

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Immediately after Petition Date, Debtors filed an application to employ Keen-Summit Capital Partners, LLC as real estate advisors to the Debtors. This application was approved by order of the Bankruptcy Court (Docket No. 203).

2. Motion to Pay Pre-Petition Secured Lender and Obtain Post-Petition Financing

Immediately after Petition Date, Debtors sought authorization to obtain post-petition financing from a new lender pursuant to the terms of the DIP Credit Agreement (Docket No. 16). The Debtors’ pre-petition secured lender was PNC National Bank, and PNC’s debt was secured by substantially all of the Debtors’ assets. Because the Debtors’ assets are primarily inventory and receivables, the validity of PNC’s liens was easily confirmed. As of the Petition Date, PNC was over-secured by millions of dollars. PNC will continue to provide post-petition credit to the Debtors with respect to Cash Management Products and Services. The proceeds from the DIP Credit Agreement were used to pay in full the amounts owed to PNC National Bank and to fund the Debtors’ on-going operations. The Court approved the motion for financing on an interim basis on July 2, 2020 (Docket No. 100) and on a final basis on July 21, 2020 (Docket No. 182). Debtors continue to have good availability under the DIP Credit Agreement.

3. Extension to File Statements and Schedules

Debtors filed a motion requesting additional time to file its schedules and statement of financial affairs. The Bankruptcy Court granted the motion, and the Debtors filed their statement and schedules in accordance with the order on July 29, 2020 and July 30, 2020.

4. Designation of Additional Person

Debtors filed a motion requesting that Jonathan Tyburski, OTP’s chief financial officer, be designated as an additional person to act on behalf of Debtors. The Bankruptcy Court granted this motion.

5. Employee Wages and Benefits Motion

Debtors requested authority to pay certain prepetition wages, reimbursements, and withholding taxes owed to its employees and to continue existing employee benefit plans. Specifically, Debtors sought authority to pay its employees’ wages earned before the Petition Date, and pay related withholding taxes. Debtors also sought authority to continue all benefit plans available to Debtors’ employees, and pay all related amounts that came due in the ordinary course of business. Debtors also sought permission to reimburse business expenses incurred by employees. Debtors did not seek to pay any amounts in excess of the priority limit set by 11 U.S.C. § 507(a)(4) and (5). The Bankruptcy Court approved Debtors’ motion, and all wages due to the Debtors’ employees as of the Petition Date have been paid.

6. Key Employee Incentive Plan

On July 1, 2020, the Debtors filed a motion for approval of a key employee incentive plan (Docket No. 64). The purpose of this plan is to provide monetary incentives for certain bankruptcy- related EBITDA milestones to accrue value to the estate. The Bankruptcy Court approved this plan on July 29, 2020 (Docket No. 218). Neither the Chief Executive Officer nor the Chief Financial

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Officer participates in this incentive program. If the Debtors hit all of their metrics, then the total annualized cost of the plan would be less than $500,000.

7. Store Closure Sales

Debtors submitted a plan to close some of its retail locations in accordance with the recommendations of its financial advisers (Docket No. 17). Shortly after the Petition Date, the Debtors commenced store closing sales at four locations, namely Rockford, Illinois; Orlando, Florida; North Charleston, South Carolina; and Fayetteville, North Carolina. Debtors currently expect to commence closing sales at additional locations before the Confirmation Date. The Plan includes provisions that will allow the Debtors to make decisions up to the date of the Confirmation Hearing on other retail locations that may close, a dispute resolution procedure, and the assumption of a consulting agreement with SB360 Capital Partners, LLC, a store closure expert. The Bankruptcy Court approved these procedures on July 21, 2020 (Docket No. 183).

C. Schedules of Assets and Liabilities and Monthly Operating Reports

Pursuant to the Bankruptcy Rules, the requirements of the United States Trustee’s Office and order of the Bankruptcy Court extending its deadline, Debtor Old Time Pottery, LLC filed on July 29, 2020, its Schedules and Statement of Financial Affairs (Docket No. 219 and 220). Debtor Old Time Pottery Holdings, LLC filed on July 30, 2020, its Schedules and Statement of Financial Affairs (Docket No. 63, Case No. 3:20-bk-03139).

D. Committee of Unsecured Creditors

An Official Committee of Unsecured Creditors (the “Committee”) was appointed in this bankruptcy case on July 8, 2020 (Docket No. 134). The Committee engaged the firm of Gullett, Sanford, Robinson & Martin, PLLC as its legal counsel and Tortola Advisors, LLC as its financial advisor.

IV. DEBTORS’ ASSETS

The following is a summary description of Debtors’ principal assets. Each of the assets identified below is the property of OTP. The information has been compiled from Debtors’ unaudited records as reflected in the Debtors’ Schedules (See Docket No. 219). The only asset of OTP’s co-debtor, OTP Holdings, LLC, is the equity in OTP. (See Docket No. 64).

A. Cash

As of the Petition Date, OTP had various bank accounts with cash balances totaling $4,996,046.19. Since the closing of the DIP Loan, substantially all of the Debtor’s cash is applied on a daily basis to the amounts owed on the DIP Obligations.

B. Deposits and Cash Reserves

As of the Petition Date, OTP had security deposits on file with numerous electric services utilities, totaling $399,660.00. OTP also had $1,409,788.33 in deposits on file with various legal

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utilities, insurance, and other entities. Since the Petition Date, Debtor has made additional cash deposits to utility companies in the total amount of $116,564.32.

C. Receivables

As of the Petition Date, OTP had gross trade accounts receivable of $970,248.00, prior to any deduction for doubtful or uncollectible accounts.

D. Inventory & Supplies

As of the Petition Date, OTP had inventory, supplies of stores, warehouses, and home office valued at (lower of cost (average cost method) or net realizable value) $46,250,723.83.

E. Office Furniture & Fixtures

As of the Petition Date, OTP had office furniture with a net book value of $3,588,801.41, and computer, software, and equipment material with a net book value of $1,599,044.57.

F. Vehicles

As of the Petition Date, OTP had ten vehicles, valued at (lower of carrying amount or the sum of expected future cash flows) of $241,321.75.

G. Real Property

The Debtors own no real property, but as of the Petition Date, OTP held leasehold improvements valued at (lower of carrying amount or the sum of expected future cash flows) at $6,777,923.2.

H. Intangibles and Intellectual Property

As of the Petition Date, OTP held certain patents, an Internet Domain name, and a VIP Program customer list, the values of which are unknown.

As of the Petition Date, OTP also held a trade name on purchase price allocation at Comvest acquisition, valued at (lower of carrying amount or fair value) $4.9 million.

As of the Petition Date, OTP also held goodwill acquisition value valued at (lower of carrying amount or fair value) $6,368,573.00.

I. Cash Collateral held by PNC National Bank

Pursuant to the terms of the payoff letter approved by this Court as part of the DIP financing, PNC holds cash collateral in the approximate amount of $2,500,000.00 to secure certain contingent obligations of PNC that remain outstanding, including a letter of credit securing certain of the Debtors’ obligations owed to its workers compensation carrier in the approximate amount of $1,900,000.00. To the extent these contingent obligations do not become actual liabilities, the cash collateral will be paid to the DIP Lender for application to the DIP Obligations.

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J. Other Assets

As of the Petition Date, OTP also held a tax refund for tax year 2017 from the State of Tennessee valued at $18,146.00.

OTP also holds an unliquidated claim against Designer Greeting arising from fraudulent billings. That claim is currently not liquidated.

In addition, OTP is still reconciling records relating to prepayments and offsets arising under certain real property leases. The value of these offsets is unknown.

K. Reservation of Causes of Action/Authority to Pursue, Settle or Abandon

Debtors retain all rights to commence and pursue, as appropriate, any and all Causes of Action and Avoidance Actions, whether arising before or after the Petition Date, in any court or other tribunal including, without limitation, in an adversary proceeding filed in this Chapter 11 Case, including without limitation the Cause of Action against Designer Greeting described above. Debtors have broad discretion to pursue, settle or abandon Causes of Action and Avoidance Actions; however, the Debtors shall not be required to pursue Causes of Action or Avoidance Actions and may in their sole discretion determine not to pursue any Causes of Action or Avoidance Action. After the Effective Date, Debtors shall have the exclusive right, authority, and discretion to institute, prosecute, abandon, settle, or compromise any and all such Causes of Action and Avoidance Actions without the consent or approval of any third party and without any further order of Court. Any settlement may be for any consideration that Debtors believe to be in their best interest (and not necessarily in the best interest of the creditors) including, inter alia, the right to permit Debtors to accept zero-cash or non-cash benefits. Any creditor determined to have received a transfer that is voidable pursuant to sections 544, 547, 548, 549, and/or 550 of the Bankruptcy Code or any other applicable law shall be required to remit to Debtors the determined amount of the avoided transfer prior to receiving any distribution under the Plan. Without limiting any of the foregoing, all Persons listed in the response to questions 3 and 4 of Statement of Financial Affairs (Docket No. 220) as having received a payment are hereby notified that the Debtors have, and may pursue a Cause of Action, against them.

V. LIABILITIES OF THE DEBTOR

The following is a summary description of Debtors’ principal liabilities. The information has been compiled from Debtors’ unaudited records as reflected in the Schedules for Debtor Old Time Pottery, LLC (See Docket No. 219).

A. Administrative Expenses

Administrative Claims are any claim that is defined in section 503(b) of the Bankruptcy Code as being an “administrative expense” and granted priority under section 507(a)(2) of the Bankruptcy Code, including:

 a Claim for any cost or expense of administration in connection with the Case, including, without limitation, any actual, necessary cost or expense of preserving

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Debtors’ estate and of operating the business of Debtors incurred on or before the Effective Date;  the full amount of all Allowed Claims for compensation for legal, accounting and other services or reimbursement of costs under sections 330, 331 or 503 of the Bankruptcy Code;  all fees and charges assessed against the Debtors’ estate under chapter 123 of title 28 of the United States Code; and  any allowed post-petition taxes and related items, including any interest and penalties on such post-petition taxes.

1. Ordinary Course Expenses

All amounts incurred by Debtors for goods or services provided or materials or goods purchased in the ordinary course of its business are entitled to administrative expense priority. Debtors pay these amounts on a regular basis in the ordinary course of its business. Debtors will continue to pay ordinary course business expense claims after the Effective Date, unless disputed by Debtors.

2. DIP Obligations

All DIP Obligations are administrative expenses that must be paid in full on the Effective Date. The Debtors estimate that the total amount owed on the DIP Obligations as of the Effective Date will be approximately $24,675,500.

3. Professionals

The fees of the Debtors’ and the Committee’s professionals are entitled to administrative expense treatment, subject to Court approval. Pursuant to the terms of an Order entered on July 24, 2020 (Docket Nos. 201, 202), the Debtors are authorized to pay on a monthly basis the fees of each of these professionals. Also, the Debtors’ bankruptcy counsel, Bass, Berry & Sims, holds a retainer in the amount of $68,194.10, and FTI Consulting, Inc. (“FTI”), Debtors’ financial advisor, holds a retainer in the amount of $17,000. These retainers can be used to satisfy in part the final fee applications of these professionals. Considering all of these factors, the Debtors estimate that they will owe total professional fees to their and the Committee’s professionals in the approximate amount of $950,000 as of the Effective Date.

4. Fees Due to the Office of the United States Trustee

All fees payable under 28 U.S.C. § 1930 shall be paid in cash in full when due unless the Office of the United States Trustee and the Debtors agree otherwise. Fees for the third quarter of 2020 will have been paid prior to the Effective Date, so no fees are expected to be due on the Effective Date. The Debtors intend to ask the Court to close this Chapter 11 Case shortly after the Effective Date, but the Debtors will continue to owe quarterly fees until the bankruptcy case is closed.

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5. Administrative Tax Claims

Each holder of an Administrative Claim for Taxes for which either Debtor is responsible and any other Taxes of either Debtor payable pursuant to section 507(a)(1) of the Bankruptcy Code shall be paid the Allowed Amount of such holder’s Claim in cash, in full, on the latest of: (i) the Effective Date, (ii) if Contested or unknown to Debtors, the date such Claim is Allowed by Final Order, or (iii) the date such payment is due under applicable law. Any Person that asserts an Administrative Claim for Taxes due prior to, but that is not paid on the Effective Date, shall be required to file with the Court an application for payment of such asserted Administrative Claim and to serve notice thereof on all parties entitled to such notice. Any such claims must be filed within sixty (60) days from the Effective Date. The failure to file timely the application as required under section 2.1(c) of the Plan shall result in the Claim being forever barred and discharged. An Administrative Claim for Taxes with respect to which an application has been properly Filed pursuant to section 2.1(c) of the Plan and to which no objection has been filed or an objection has been Filed but overruled by the Court, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order. The Debtors believe that the only material taxes that will be owed on the Effective Date will be employee withholding and social security taxes and sales taxes that are incurred and paid in the ordinary course of their business.

B. Secured Claims

Prior to the Petition Date, the Internal Revenue Service filed a lien in the Registers Office for Rutherford County, Tennessee a secured claim on all property of the Debtors in the amount of $36,990.00. This lien relates to an alleged failure to comply with certain requirements of the Affordable Care Act and is disputed by the Debtors, who believe they did comply with this act’s requirements.

As of the Petition Date, PNC National Bank held a secured claim on all assets in the amount of $28,258,676.35, of which approximately $2.5 million is contingent. This debt was paid in full upon the Closing of the DIP Loan. As of the Petition Date, the only liability of Debtor Old Time Pottery Holdings, LLC was its guaranty of the indebtedness owed to PNC National Bank.

C. Priority Claims

The Debtors scheduled four priority unsecured claims, two to Accrued Payroll for a total of $775,848.11, one for sales and use tax in the amount of $1,572,691.14 owed to various jurisdictions, and one for $210,000.00 to the Tennessee Department of Revenue for franchise and excise tax. All of these Claims have been paid pursuant to Orders entered in this Chapter 11 Case, except for the amount owed to the Tennessee Department of Revenue. Debtors anticipate that after payment by Debtor Old Time Pottery, LLC, most of the amount paid to the Tennessee Department of Revenue will be recoverable by Debtor Old Time Pottery Holdings, LLC through the filing of an amended return.

D. Unsecured Claims

The general Claims Bar Date has not yet occurred, so Debtors cannot be sure that all unsecured claims have been scheduled or filed.

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The Debtors scheduled total unsecured claims totaling $17,215,578.03. Some of the scheduled amounts owed to certain shippers of goods were paid pursuant to an Order entered in this Chapter 11 Case on July 2, 2020 (Docket No. 102). Also, Debtors anticipate that approximately $1,200,000 of the scheduled amounts will qualify as administrative expenses pursuant to section 503(b)(9) of the Bankruptcy Code and will be paid on the Effective Date. The amount of scheduled claims will also be materially affected by the Debtors’ decisions with respect to assumption and rejection of leases, as assumption of a lease will reduce the scheduled liability and rejection of a lease has the potential to increase the amount of unsecured claims. Approximately $5,684,143 of the scheduled claims is owed to an insider of the Debtors, Comvest Realty Partners IV, L.P. The Debtors reserve the right to object to any filed claims and to amend their statements and schedules.

E. Reclamation Claims.

The Debtors have received at least two claims for reclamation of goods pursuant to section 546(c) of the Bankruptcy Code. The Debtors contest the validity of these reclamation claims and assert that the Persons holding these claims are Unsecured Creditors.

VI. FINANCIAL INFORMATION AND FUTURE OPERATIONS

THE FINANCIAL INFORMATION DESCRIBED BELOW WAS COMPILED BY DEBTORS. THIS FINANCIAL INFORMATION HAS NOT BEEN SUBJECTED TO AN AUDIT. Creditors and other interested parties should see the below “Risk Factors” for a discussion of certain factors that may affect the future financial performance of the Reorganized Debtors.

A. Historical and Post-Petition Financial Information and Results of Operations

The Debtors’ operating results in 2018 and 2019 are summarized below:

Historical and Post‐Petition Financial Information Date 2018 2019 ($ in thousands) P&L Summary Net Sales 182,973 168,746 % Growth YoY (5.9%) (7.8%) Total Expenses 179,673 163,027 EBITDA1 $3,300 $5,719 % Growth YoY (44.5%) 73.3%

Other Expenses 11,792 8,898 Net Income ($8,492) ($3,180) Note 1: EBITDA is a non‐GAAP metric that excludes items that management does not believe are representative of the recurring operations of the business.

B. Debtors’ Future Operations

Attached as Exhibit B to this Disclosure Statement are certain financial projections of Debtors’ future performance for a period of five years following the Effective Date of the Plan. These projections reflect that the Debtors will have the ability to make the payments due under the Plan.

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Exhibit B is based on historical revenues, expenses, and operating trends, as adjusted for changes and improvements made to Debtors’ operations after the Petition Date. The Debtors believe that this Exhibit reflects a fair and reasonable representation of its anticipated future operations, but there can be no guarantee that the projections will prove accurate. THE FINANCIAL PROJECTIONS ARE FORWARD-LOOKING PROJECTIONS AND ARE BASED UPON NUMEROUS ASSUMPTIONS, INCLUDING BUSINESS, ECONOMIC, AND OTHER MARKET CONDITIONS. MANY OF THESE ASSUMPTIONS ARE BEYOND DEBTORS’ CONTROL AND ARE INHERENTLY SUBJECT TO UNCERTAINTY. SUCH ASSUMPTIONS INVOLVE ELEMENTS OF SUBJECTIVE JUDGMENT THAT MAY OR MAY NOT PROVE TO BE ACCURATE, AND CONSEQUENTLY, NO ASSURANCES CAN BE MADE REGARDING THE ANALYSES OR CONCLUSIONS DERIVED FROM ANALYSES BASED UPON SUCH ASSUMPTIONS.

Some of the key assumptions used in the development of Exhibit B are as follows:  Moderate growth is assumed going forward beyond 2020 as the business expects growth in its high performing stores and contraction in some of the underperforming stores – year over year change is 0.5% except for 2021. Sales are projected to be lower in 2021 because of a surge in sales occurring after stores re-opened in May 2020, which management does not expect to continue into 2021.  Effective Date is assumed to be October 31, 2020 with assumptions as follows: o Class 3 and 503(b)9 claims are paid by the Effective Date o Class 4 and 5 claims are paid on March 31, 2021 and each and every March 31 from 2022 to 2025. o Cure costs are assumed to equal half of the pre-petition rent amounts in Class 5.  Capital expenditures is budgeted at $3.5 million for 2021 and 2022 to address backlog of required improvements at stores.  Store count of 39.

C. Officers & Management

Debtors do not anticipate any change in its management or its compensation of management after Confirmation. Jason Schmitt has served as the President and Chief Executive Officer of Old Time Pottery since August 2019, and his annual base salary is $450,000. Jonathan Tyburski has served as the Chief Financial Officer of Old Time Pottery, LLC since 2017, and he is paid on a weekly basis at the rate of $10,500 per week. The members of the board of directors of the Debtors are Thomas Clark, Kevin LaHatte, and Jason Schmitt. The directors receive no individual pay for their service in this capacity, and Comvest is presently waiving its management fees, which may be reinstated after the Effective Date.

D. Employment of Insiders

Post-Confirmation, Debtors intend to continue to employ all “insiders” under 11 U.S.C. § 101(31) that were employed as of the Petition Date.

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E. Ownership of the Debtors

Debtor Old Time Pottery Holdings, LLC owns 100% of the equity in Debtor Old Time Pottery, LLC. The equity of Old Time Pottery Holdings, LLC is owned by Comvest IV OTP Holdings, LLC (90.19%, Class A Voting), Comvest IV-A (OTP), LLC (9.71%, Class A Voting), Comvest IV-Co OTP Holdings, LLC (0.10%, Class A Voting), and Management Incentive Equity Pool (100%, Class B Non-Voting) (Docket No. 65, Case No. 3:20-bk-03139. Members of management also have a 10% non-voting equity stake in Old Time Pottery Holdings, LLC.

VII. DISCUSSION OF THE PLAN

FOR CONVENIENCE OF ALL PARTIES, MATERIAL TERMS OF THE PLAN ARE SUMMARIZED IN THIS DISCLOSURE STATEMENT. ALTHOUGH DEBTORS BELIEVE THAT THIS DISCLOSURE STATEMENT ACCURATELY DESCRIBES THE MATERIAL PROVISIONS OF THE PLAN, ALL SUMMARIES OF THE PLAN CONTAINED IN THIS DISCLOSURE STATEMENT ARE QUALIFIED BY THE PLAN, THE EXHIBITS THERETO, AND THE DOCUMENTS DESCRIBED THEREIN, WHICH CONTROL IN THE EVENT OF ANY INCONSISTENCY OR INCOMPLETENESS. ACCORDINGLY, DEBTORS STRONGLY URGE EACH RECIPIENT ENTITLED TO VOTE ON THE PLAN TO REVIEW CAREFULLY THE CONTENTS OF THIS DISCLOSURE STATEMENT, THE PLAN, AND THE OTHER DOCUMENTS THAT ACCOMPANY OR ARE REFERENCED IN THIS DISCLOSURE STATEMENT OR THE PLAN IN THEIR ENTIRETY BEFORE MAKING A DECISION TO ACCEPT OR REJECT THE PLAN.

A. Summary of the Plan

The Plan is a comprehensive proposal by Debtors that provides for the continuation of Debtors’ business and payment in full over time of all Allowed Claims.

The Effective Date of the Plan will be (i) the first business day of the first month that is more than fifteen days (15) days following the date on which the Confirmation Order is entered; or (ii) in the event the Confirmation Order is appealed or a motion to reconsider is filed, any date selected by the Debtors not later than the fifteenth (15th) day after the entry of the Confirmation Order, but not later than the fifteenth (15th) day after entry of a Final Order denying the motion, dismissing such appeal or affirming the Bankruptcy Court’s Confirmation Order. In the event there is an appeal of the Confirmation Order, then Debtors shall file notice of the Effective Date with the Court.

B. Classification and Estimation of Claims

1. Unclassified Claims

Under the Bankruptcy Code, the payment of certain types of Claims is accomplished without the requirement of classification of those Claims into Classes. Administrative Claims, which include professional fees and fees to the Office of the U.S. Trustee, and Priority Tax Claims are not classified under section 1123(a)(1) of the Bankruptcy Code for purposes of voting or

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receiving distributions under the Plan. The procedures for payment of Administrative Claims and Priority Tax Claims are discussed later in this Disclosure Statement and are detailed in the Plan.

2. Classified Claims

Section 1122 of the Bankruptcy Code states in part that “a plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class.” The Plan classifies Claims into 6 separate Classes pursuant to sections 1122 and 1123 of the Bankruptcy Code. The classification and treatment of Claims pursuant to the Plan is detailed below:

a) Class 1 – Priority Claims Other Than Priority Tax Claims. Class 1 consists of all Allowed Priority Claims against the Debtors, excluding any such Claims that were paid prior to the Effective Date. This class of claims is unimpaired under the Plan. Debtors are not aware of any Allowed Claims in this Class.

b) Class 2 - Secured Claims. This Class consists of separate subclasses for any Allowed Secured Claim against either of the Debtors, other than the amounts owed to the DIP Lenders. Debtors are not aware of any Allowed Claims in this Class. This Class of claims is Impaired under the Plan.

c) Class 3 - Unsecured Convenience Claims. This Class consists of all Allowed Unsecured Claims against either of the Debtors in an amount not greater than Two Thousand Dollars ($2,000.00) and any other Allowed Unsecured Claims electing to participate in this Class. This Class of Claims is not Impaired under the Plan. The amount of class 3 claims is estimated to be less than $50,000.00 total.

d) Class 4 – Unsecured Claims of Insiders. This Class consists of all Allowed Claims owing to any Insiders. This Class includes the debt owed by Debtors to Comvest Investment Partners IV, L.P. in the principal amount of $5,150,000. This Class of Claims is Impaired under the Plan.

e) Class 5 – Unsecured Claims Not in Class 3 or Class 4. This Class consists of all Allowed Unsecured Claims against the Debtors, other than those in Class 3 and Class 4. This Class of Claims is Impaired under the Plan.

f) Class 6 - Ownership Interests in the Debtors. This Class consists of Ownership Interests in the Debtors. This class of claims is not Impaired under the Plan.

C. Treatment of Unclassified Claims

Administrative Claims and Priority Tax Claims are not classified under section 1123(a)(1) of the Code for purposes of voting or receiving distributions under the Plan.

1. Administrative Claims.

(a) Amounts Due to the DIP Lenders. Unless the DIP Lenders consent otherwise in writing, all amounts owed to the DIP Lenders for DIP Obligations shall be paid in full on the

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Effective Date, and the DIP Lenders and the DIP Agent shall be released from any and all claims related to or arising from their loans to, and their relationship with, the Debtors.

(b) General Allowed Administrative Claims. Each holder of an Administrative Claim, except as otherwise set forth in sections (a) (c), (d), and (e) of section 2.1 of the Plan shall receive either: (i) with respect to Administrative Claims which are not Contested by the Debtors, the amount of such holder’s Administrative Claim in cash on the Effective Date; (ii) with respect to Administrative Claims which become Allowed Claims after the Effective Date, the amount of such holder’s Allowed Claim in one cash payment as soon as practicable after such claim becomes an Allowed Administrative Claim; or (iii) such other treatment agreed upon by the Debtors and such holder; provided, however, that any such Administrative Claim representing a liability incurred in the ordinary course of business after the Petition Date by the Debtors shall be paid in accordance with the terms and conditions of the particular transaction giving rise to such liability and any agreements relating thereto. Any Person that asserts an Administrative Claim that is due but not paid on the Effective Date shall be required to file with the Court an application for allowance and payment of such asserted Administrative Claim and to serve notice thereof on all parties entitled to such notice. Any such claims must be filed within sixty (60) days after the Effective Date. The failure to file timely the application as required under section 2.1(b) of the Plan shall result in the Claim being forever barred and discharged. An Administrative Claim with respect to which an application has been properly Filed pursuant to section 2.1(a) of the Plan and to which no objection has been filed or an objection has been filed but overruled by Final Order of the Bankruptcy Court, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order.

(c) Fee Claims of Professionals. Each professional person whose retention with respect to this Chapter 11 Case has been approved by the Bankruptcy Court or who holds, or asserts, an Administrative Claim that is a Fee Claim shall be required to file with the Bankruptcy Court a final fee application within sixty (60) days after the Effective Date and to serve notice thereof on all parties entitled to such notice pursuant to applicable Bankruptcy Rules and in accordance with any orders entered in these cases regarding the compensation of professionals. Payments of Court-approved compensation shall be made promptly after the order approving such compensation becomes a Final Order. Debtors will not have any obligation for any Fee Claim that is disallowed or not approved by the Court.

(d) Administrative Tax Claims. Each holder of an Administrative Claim for Taxes for which either Debtor is responsible and any other Taxes of either Debtor payable pursuant to section 507(a)(1) of the Bankruptcy Code shall be paid the Allowed Amount of such holder's Claim in cash, in full, on the latest of: (i) the Effective Date, (ii) if Contested or unknown to Debtors, the date such Claim is Allowed by Final Order, or (iii) the date such payment is due under applicable law. Any Person that asserts an Administrative Claim for Taxes due prior to, but that is not paid on the Effective Date, shall be required to file with the Court an application for payment of such asserted Administrative Claim and to serve notice thereof on all parties entitled to such notice. Any such claims must be filed within sixty (60) days from the Effective Date. The failure to file timely the application as required under section 2.1(c) of the Plan shall result in the Claim being forever barred and discharged. An Administrative Claim for Taxes with respect to which an application has been properly Filed pursuant to section 2.1(c) of the Plan and to which no objection

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has been filed or an objection has been Filed but overruled by the Court, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order.

(e) Payment of Fees to U.S. Trustee. All fees payable under 28 U.S.C. § 1930 shall be paid in cash in full when due unless the Office of the United States Trustee and the Debtors agree otherwise.

2. Secured and Priority Tax Claims.

(a) Secured and Priority Tax Claims. Unless otherwise agreed to by Debtors and any taxing authority, Debtors shall pay in full all Allowed Tax Claims over a period ending not later than five years after Petition Date. Debtors may in their sole discretion choose to make partial payments on Allowed Tax Claims, which payments shall be applied as indicated by Debtors. Any unpaid portion of such Allowed Priority Claims shall bear interest from the Effective Date until the date of payment at the minimum rate required by the Bankruptcy Code.

(b) Liens Arising from Secured and Priority Tax Claims. All Pre-Petition liens arising from Secured Tax Claims and Priority Tax Claims shall continue until such Claims are paid in full.

(c) Penalties and Allowed Claims. Except as provided herein, no Governmental Authority shall be entitled to receive any penalties for any period of time after the Petition Date nor shall any Allowed Tax Claim include any post-petition interest or pre-petition or post-petition penalties except as provided herein. Any potion of a Tax Claim that qualifies as a Penalty Claim shall be disallowed. Each Contested Tax Claim shall become an Allowed Tax Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order or agreement of the Debtors.

D. Treatment of Classified Claims

The Claims as classified in Article III of the Plan shall be satisfied in the manner set forth in Article IV of the Plan. The treatment of, and the consideration to be received by each Person holding an Allowed Claim against the Debtors pursuant to the Plan shall be in full settlement, release, and discharge of their respective Allowed Claims against the Debtors.

a) Class 1 -- Priority Claims Other Than Priority Tax Claims. Each Person holding a Class 1 Claim shall be paid the Allowed Amount of such Claim in cash, in full, on the latest of: (i) the Effective Date; (ii) the date such Claim is allowed by Final Order; or (iii) the date such payment is due under applicable law. Each Contested Priority Claim shall become an Allowed Priority Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order. This class is Not Impaired under the Plan.

b) Class 2 -- Other Secured Claims. Except to the extent that a Class 2 Claimant may otherwise agree, each holder of an Allowed Secured Class 2 Claim shall be fully satisfied, at the Debtors’ option, by one of the following:

(a) Note Option: Each holder of a Class 2 Claim shall retain all Liens securing such Claim until such Claim is fully paid or until such

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holder otherwise agrees. The terms and provisions relating to such Liens shall be set forth in appropriate documents agreed to between the parties, or, in the event of disagreement, as directed by the Court. The obligated Debtor or Debtors shall execute a note payable to the Class 2 Claimant and deliver it to the holder of such Claim, along with an appropriate mortgage and/or security agreement, no later than the tenth (10th) Business Day after the later of the Effective Date or the date that such Claim becomes an Allowed Claim. The initial principal amount of each Class 2 Claim shall be equal to the lesser of (i) the amount which the Court shall determine is equal to the value of the assets securing such Claim or (ii) the amount of the Class 2 Claim. To the extent that any Creditor has a Deficiency Claim in addition to its Class 2 Claim, the Deficiency Claim shall be treated under the Plan as an Unsecured Claim against the Debtors. Any note executed pursuant to section of the Plan shall bear interest at the rate of five percent (5.0%) per annum and be paid in annual equal installments in the amount required to fully pay the note in seven annual payments, with the first such payment being on February 1, 2020.

(b) Unimpairment Option: At the option of the obligated Debtor or Debtors, any Class 2 Claim may be deemed unimpaired. If such election is to be made, it must be made on or before the Effective Date. Any arrearage or other amounts owed as of the Effective Date (and any other payments which may at such date be required to make each such Claim unimpaired) shall be paid in cash, in full, on or before the forty-fifth (45th) Business Day after the Effective Date or as shall otherwise be agreed to in writing by the holder of such Claim, and all other defaults with respect to such Claim required to be cured by Section 1124(2) of the Code shall be cured on or prior to the forty-fifth (45th) Business Day after the Effective Date as shall be agreed to in writing by the holder of such Claim, and from and after the date of such cure any previously accelerated indebtedness shall be reinstated and any default rate of interest shall no longer apply, but shall be deemed waived (not forgiven). Each Class 2 claimant whose claim is unimpaired pursuant to the terms hereof shall retain such lien as such Creditor held prior to the Petition Date. After the reinstatement of its Class 3 Claim, each Class 2 Creditor will receive payments in accordance with the instruments governing such Claim or as such Creditor may otherwise in writing agree. Furthermore, after such unimpairment, each Class 2 Creditor will be entitled to exercise all rights, privileges, and remedies available to it under the instruments governing its Class 2 Claim in accordance with the terms for such instruments, without need for any application to or order of the Court.

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(c) Cash Option: The obligated Debtor or Debtors may also elect, at any time on or before the Effective Date, to pay a Class 2 Secured Claim in full, in cash, on or promptly after the Effective Date.

(d) Abandonment Option: The obligated Debtor or Debtors may also elect, at any time on or before the Effective Date, to fully satisfy a Class 2 Claim by abandoning the collateral securing such Claim to the holder of such Claim.

(e) Release of Lien: Promptly upon the satisfaction of any Allowed Class 2 Claim, the holder of such Class 2 Secured Claim shall execute all instruments and documents necessary to release its Lien securing such Claim or note. If any such Creditor fails to promptly file all such releases, the Debtors may file documents necessary to release all such Liens.

c) Class 3 -- Unsecured Convenience Class Claims. Each holder of an Allowed Class 3 Claim in an amount no greater than Two Thousand Dollars ($2,000.00) will be paid in full cash on the Effective Date of the Plan. Any holder of an Allowed Class 3 Claim in excess of $2,000 may elect to receive $2,000.00 on the Effective Date in full satisfaction of its claim. Any holder of an Unsecured Claim in excess of $2,000.00 electing this option must notify Debtors’ counsel by no later than ten (10) days after entry of the Confirmation Order of its intent to participate in this Class. Any person or Entity having a Contested Class 3 Claim shall be entitled to payment only after that Claim becomes an Allowed Claim pursuant to a Final Order.

d) Class 4 -- Claims of Insiders. Except to the extent that a Class 4 Claimant may otherwise agree, each holder of an Allowed Class 4 Claim shall be fully satisfied in the same manner as Allowed Class 5 Claims are satisfied.

e) Class 5 -- Unsecured Claims other than Claims in Class 3 or 4. Class 5 Claims shall be satisfied as follows:

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Allowed Claim. The payment due on March 1, 2023 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2022 on the amount of the Allowed Claim. The payment due on March 1, 2024 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2023 on the amount of the Allowed Claim. All amounts remaining due on Allowed Class 4 and 5 Claims shall be paid in full on March 1, 2025.

The Debtors may prepay in whole or in part at any time without penalty, and any partial prepayments made shall reduce and be a credit against any mandatory payments coming due after the time of the prepayment, provided however, that any such prepayments must be made on a Pro Rata basis to the holders of all Allowed Class 4 and Class 5 Claims.

(b) Option 2. Holders of an Allowed Claims in Class 5 may expressly elect to receive on March 1, 2021 in full satisfaction of the Allowed Claim sixty percent (60%) of the Allowed Claim up to a maximum amount of Twenty-Five Thousand Dollars ($25,000.00). Holders of Allowed Claims in excess of $41,666.00 who elect to participate in this Class will receive on March 1, 2021 Twenty Five Thousand Dollars ($25,000.00) in full satisfaction of the Allowed Claim. Any holder of an Unsecured Claim electing this option must notify Debtors’ counsel by no later January 31, 2021 of its intent to participate in Option 2. Any Person or entity having a Contested Class 5 Claim shall be entitled to payment only after that Claim becomes an Allowed Claim pursuant to a Final Order.

f) Class 6 -- Ownership Interests in the Debtors. This Class consists of the Ownership Interests in Debtors. The Interests in the respective Debtors will continue in the same amount as in existence as of the Petition Date.

E. Means of Execution and Implementation of the Plan

(a) Payments due on the Effective Date and Thereafter. The Debtors will use proceeds from the Exit Financing to make the payments due on the Effective Date, and the Debtors have made changes to their business including renegotiated lease terms, lease rejections, staff reductions and other changes that are expected to generate cash flow sufficient to make the payments due under the Plan and on the Exit Financing on an on-going basis. The Exit Financing will also provide the Reorganized Debtors with access to the working capital needed to operate their business successfully.

(b) Exit Financing. With the assistance of their financial advisor, the Debtors have contacted several lenders regarding their interest in providing Exit Financing to the Debtors, and

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are confident that such financing will be available on the Effective Date. The terms of the financing are expected to be similar to, but slightly better than, the terms set forth in the DIP Loan. The Debtors believe that the Exit Financing will provide the Debtors with up to $40.0 million in available financing, with the amount available for borrowing based on the Debtor’ eligible inventory and receivables. The Debtors expect the financing to be for a term of three to five years and to bear interest at the rate of approximately six percent (6.0%) per annum.

(c) Debtors’ Obligation to Close. Debtors will have no obligation to proceed with Consummation of the Plan unless the Closing Conditions are satisfied. If Debtors elect not to proceed with Consummation of the Plan, they shall file with the Court a notice of the election and this Chapter 11 Case shall proceed as if no plan of reorganization had been filed by Debtors prior to that date.

(d) Causes of Action. Debtors will be responsible for evaluating, funding and pursuing any or none of the Causes of Action based on its reasonable business judgment and shall fund such amounts as the Debtors, in their sole and absolute discretion, shall deem appropriate and reasonable.

(e) Authority for Settlement of Causes of Action. After the Effective Date, Debtors shall, in their sole and absolute discretion, be authorized to compromise and settle any of the Causes of Action, without Court approval or notice to any party, at any time, and for any consideration that Debtors believe to be in their best interest (and not necessarily in the best interest of the Creditors) including, inter alia, the right to permit the Debtors to accept zero-cash or non- cash benefits.

(f) Recovery from Causes of Action. Any recovery from any Cause of Action, including Avoidance Actions, either from litigation or settlement, will be used by the Reorganized Debtors for operations and/or to fund the payments due under the Plan.

(g) Retention of the Debtors’ Property. On the Effective Date, all property of each of the Debtors shall vest in that entity as a Reorganized Debtor, free and clear of all Liens, claims and encumbrances except for those Liens expressly created or preserved under the Plan.

F. Executory Contracts & Unexpired Leases

(a) General Rejection of Executory Contracts. All leases of real or personal property and all other executory contracts to which either Debtor is a party that have not, as of the Confirmation Date, been specifically identified in a Filing to be agreements that the Debtors intend to assume shall be rejected. Unless otherwise specified in a Filing with the Bankruptcy Court, the effective date of the rejection of each of these contracts shall be the Effective Date.

(b) Procedure for Resolving Disputed Cure Claims. Exhibit C hereto sets forth a non-exhaustive list of executory contracts and unexpired leases that Debtors may assume. Should Debtors choose to assume any of the leases or contracts identified on Exhibit C, Debtors assert that the Allowed Cure Claim is the amount stated on that Exhibit C or such other amount as may be agreed to by the Debtors and the counterparty to the agreement. For any lease or contract not identified on Exhibit C hereto, Debtors assert that no cure is owed or required. Any party to an unexpired lease or executory contract that asserts that Debtors defaulted under that contract or

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lease and whose cure amount is not stated on Exhibit C or who disagrees with the proposed cure amount set forth on Exhibit C shall be required to File with the Court an application for allowance and payment of Cure Claim, identifying the amount allegedly required to cure any such defaults in accordance with section 365(b)(1)(A) of the Code. Any such application must be filed by no later than 21 days after the Confirmation Date. The failure to file timely the application as required under section 7.2 of the Plan shall result in the Cure Claim being forever barred and discharged; the Cure Claim related to the executory contract shall be deemed to be the greater of zero or the amount proposed by the Debtors on Exhibit C hereto, if any; and the related executory contract shall be deemed assumed as of the Effective Date. Each Contested Cure Claim shall become an Allowed Cure Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order. All Allowed Cure Claims shall be paid promptly unless otherwise agreed by a counterparty.

(c) Debtors’ Right to Rescind Notice of Assumption. Notwithstanding anything herein to the contrary, the Debtors shall not be obligated to assume a lease or other executory contract if it disagrees with any Cure Claim Amount determined by Final Order. In the event that the Debtors and the other party to an agreement or lease cannot reach agreement on the Allowed Cure Claim, and the counterparty Files an application as required in section 7.2 hereof, then the Debtors shall have a period of thirty (30) days after the date on which the order establishing the Cure Claim becomes a Final Order in which to rescind their notice of assumption of the lease or executory contract. If the Debtors File a notice of their intent not to assume any such lease or contract during this period, then the contract shall be rejected upon Filing of the notice, and the other party to any rejected contract shall be entitled to file a Claim for damages arising from the rejection, if any.

(d) Assumption or Rejection of Executory Contracts Prior to Effective Date. Nothing in the Plan precludes the Debtors from Filing at any time prior to the Confirmation Date a separate motion or notice to assume or reject one or more leases or executory contracts, which motions or notice may require resolution of the Cure Claim prior to the deadlines set forth in this Article VII of the Plan.

(e) Claims for Damages. Each Person who is a party to an executory contract or release rejected pursuant to Article VII the Plan shall be entitled to File, not later than thirty (30) days after entry of the Confirmation Order, a Claim for damages alleged to arise from the rejection of the executory contract or lease to which such Person is a party. Any such Claims that ultimately become Allowed Claims shall be treated as Class 5 Unsecured Claims.

G. Treatment of Claims and Distributions on Claims

(a) No Distributions Pending Allowance or Estimation of Claims. No payments or distributions shall be made with respect to all or any portion of a Contested Claim unless and until such Claim becomes an Allowed Claim as determined by Final Order.

(b) Deadline for Objections to Claims. Debtors or any other party in interest may file with the Bankruptcy Court, within 120 days after the Effective Date, which date may be extended by Bankruptcy Court order, a written objection to the allowance or classification of any Claim in any Class, which objection shall be served upon the Claimant and any other known parties in interest. The failure to object to or to examine any Claim for the purposes of voting on the Plan

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shall not be deemed a waiver of such party’s right to object to, or re-examine, the Claim in whole or in part within the above-described time period.

(c) Automatically Disallowed Claims. With respect to any Claim for which the Debtors have insurance coverage, the Claim will be treated as an Allowed Claim only to the extent that the Holder of the Claim can establish that such Claim is not recoverable to any extent under the Debtors’ insurance. Unless the Holder obtains a Final Order establishing that the Claim is not recoverable to any extent under the Debtors’ insurance, such Claim is automatically disallowed and will be entitled to no distribution.

(d) Distribution Address and Mailing Method. Any distribution or payment to a Creditor shall be sent by first class mail to the Creditor's address indicated on the proof of claim filed by that Creditor in the Case or, if no proof of claim has been filed, to that Creditor's most recent address indicated on the Debtors’ Schedules or known to Debtors. If a Creditor holds an Allowed Claim by virtue of a transfer of such Claim pursuant to Rule 3001 of the Federal Rules of Bankruptcy Procedure, then distributions to the holder of such Claim shall be sent to the address set forth in evidence of the transfer filed with the Bankruptcy Court. Creditors may change the address to which distributions are sent through amendment of their proof of claim or written notice delivered to Debtors’ counsel. Creditors are responsible for keeping the Debtors informed of their current address for receipt of distributions or other payments under the Plan.

(e) Unclaimed Property/Forfeit Distributions. If any distribution remains unclaimed and/or uncashed for a period of ninety (90) days after it is sent by Debtors, then the Creditor to whom such distribution was sent will be deemed to have forfeited the distribution and all future distributions, and such person’s Claim shall no longer be deemed to be Allowed, but rather, such Claim shall be deemed disallowed and expunged for all purposes, and such person shall be deemed to have no further Claim in respect of such distribution and shall not participate in any further distributions under the Plan. Likewise, if any Creditor’s distribution is returned as undeliverable, no further distributions to such Creditor shall be made and such Creditor shall be deemed to have forfeited any and all further distributions. Any undeliverable or forfeit distribution shall be returned to the Debtors to be used in accordance with the terms of the Plan.

(f) Precluded Distributions. No distribution shall be made in violation of Bankruptcy Code § 502(d) (to a Person or transferee liable for recoverable property for an avoidable transfer). Debtors shall notify each affected Creditor of any contention that Bankruptcy Code § 502(d) prohibits any distribution to such Creditor. If such notice is given, the Claim held by such creditor will be treated as a Disputed Claim hereunder.

(g) Treatment of Contingent or Unliquidated Claims. Until such time as a contingent Claim becomes fixed and Allowed, such Claim shall be treated as a Contested Claim for purposes related to voting, allowance, and distributions under the Plan. Upon request by Debtors or any other party in interest, the Bankruptcy Court shall, in a summary proceeding for each such contingent Claim or unliquidated Claim, by estimation determine the allowance of each such contingent or unliquidated Claim for purposes of voting on the Plan.

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(h) Payment Dates. Whenever any payment or distribution to be made under the Plan shall be due on a day other than a Business Day, such payment or distribution shall instead be made, without interest, on the next business day.

(i) Nominal Distributions. With respect to any distribution prior to the Final Distribution, if the Holder of an Allowed Claim would receive less than $50.00, the Debtors may choose not to distribute such lesser amount to such Holder, but may instead defer the distribution thereof until the cumulative amount to be distributed to such Holder at any subsequent distribution is $50.00 or more. No interest on any such deferred amount shall be paid to such Holder. If the Final Distribution to the Holder of an Allowed Claim would be less than $25.00, the Debtors are not required to make such distribution, and such distribution is deemed waived.

H. Effect of Confirmation, Discharge, and Injunction

(a) Vesting of Property. Except as otherwise expressly provided in the Plan, Confirmation of the Plan shall vest all of the property of the Debtors’ Estate into the Debtor that owns that property.

(b) Property Free and Clear. Except as otherwise provided in the Plan, all property dealt with by the Plan shall be free and clear of all claims, Liens and interests of any party as of the Confirmation of the Plan. The Plan will evidence the release of any and all Liens or encumbrances against all property dealt with by the Plan, unless such Lien or encumbrance is specifically retained in the Plan.

(c) Legal Binding Effect. The provisions of the Plan shall bind all Claimants, whether or not they accept the Plan or whether or not their Claim is Impaired.

(d) Effect on Third Parties. Nothing contained in the Plan or in the documents to be executed in connection with the Plan shall affect any Creditor’s or party in interest’s rights against any third party, except as otherwise expressly provided in the Plan and except that any Creditor or party in interest may only recover from any third-party guarantor or co-obligor the amount owed to it in excess of the amount to be paid on the underlying obligation pursuant to the Plan.

(e) Release of Claims. The consideration to be distributed under the Plan shall be in exchange for, and in complete satisfaction and release of, all Claims against Debtors or any of their assets or properties, including without limitation any Claim accruing after the Petition Date and prior to the Effective Date.

(f) Permanent Injunction. Except as otherwise expressly provided in, or permitted under, the Plan, the Confirmation Order shall provide, among other things, that all Creditors who have held, hold or may hold Claims that existed prior to the Effective Date and all Persons who have had any dealings with either of the Debtors, are permanently enjoined on and after the Effective Date against the: (i) commencement or continuation of any judicial, administrative, or other action or proceeding against either Debtor or any of its assets or owned entities on account of Claims against either Debtor, or on account of claims released pursuant to section 10.5 of the Plan; (ii) enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree, or order against either Debtor or any assets or property of

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same; or (iii) creation, perfection or enforcement of any encumbrance of any kind against either Debtor arising from a Claim. This provision does not enjoin the prosecution of any claims that arise on or after the Effective Date nor does it enjoin the determination in the Bankruptcy Court of the Allowed Amount of any Claims that arose prior to the Effective Date. Parties asserting entitlement to payment of Administrative Expenses incurred Prior to the Confirmation Date and Holders of Claims shall be permanently enjoined from asserting any Claim against the Debtors or their Retained Assets based upon any act or omission, transaction or other activity that occurred prior to the Confirmation Date, except as otherwise provided in the Plan, whether or not a proof of claim or interest was filed and whether or not such Claim or Interest is allowed under section 502 of the Bankruptcy Code.

(g) Exculpation. Except as otherwise provided in the Plan or Confirmation Order, the Debtors, the Committee, the DIP Lenders, the DIP Agent and each of their officers, members, and all their professionals shall neither have nor incur any liability to any Person for any act taken or omitted to be taken (exclusive of an act constituting fraud, gross negligence or intentional misconduct) in connection with or related to this Chapter 11 Case, including without limitation actions related to the formulation, preparation, dissemination, implementation, administration, Confirmation or consummation of the Plan, the DIP Loan, the Disclosure Statement or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan. Notwithstanding anything herein to the contrary, neither the Plan nor the Confirmation Order affects any claims or causes of action against current or former officers, members or employees of the Debtors arising prior to or as of the Petition Date under 11 U.S.C. §§ 544, 547, 548, 549 or 550.

(h) Releases. The Debtors, the Committee, the DIP Lenders, the DIP Agent and all of their respective officers, directors, and employees are released and discharged from any and all claims, lawsuits or demands that have been, could have been, or which may in the future be asserted by the Debtors, by any creditor or by any other Person for any act or omission in connection with or arising out of transactions, relationships, or dealings relating to the negotiation or implementation of the Plan, the DIP Loan the settlement of Claims and releases incorporated in the Plan, the solicitation of votes for or confirmation of the Plan, any Pre-Petition or Post-Petition Claim of any kind, and any other matter pertaining to the administration or existence of Debtors’ Chapter 11 cases, except for willful misconduct or gross negligence as determined by a Final Order.

I. Miscellaneous and General Provisions of the Plan

(a) Post-Confirmation Security Interests. Secured Class 2 shall retain their security interests without the need for execution of new security agreements or financing statements, and as of the Confirmation Date, existing security and other agreements between either Debtor and creditors holding claims in Class 2 shall be of no force or effect, and the terms of the Plan shall supersede any such agreements and shall control the lending relationship between either Debtor and its lenders. Notwithstanding this provision, Debtors shall have the option of proposing form documents, which shall be provided to Class 2 not less than five days prior to the Confirmation Hearing. Any Class 2 creditor that fails to notify Debtors’ counsel of objections to the proposed security documents by no later than the date for objections to confirmation of the Plan shall be deemed to have agreed to and executed the documents, and the terms and conditions of the proposed documents shall control. If the parties cannot agree on the terms of the security

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documents, then the determination shall be made by the Court. Should Debtors choose not to exercise this option, the terms of the Plan shall control the lending relationship between Reorganized Debtors and the Class 2 lender, provided however that all properly perfected prepetition security interests shall continue to be valid in accordance with applicable non-bankruptcy law.

(b) Request for Relief under Section 1129(b). In the event any Impaired Class of Claims shall fail to accept the Plan in accordance with section 1129(a) of the Bankruptcy Code, Debtors request the Bankruptcy Court to confirm the Plan in accordance with the provisions of section 1129(b) of the Bankruptcy Code.

(c) Security Deposits. To the extent Debtors have posted security deposits (with utilities or otherwise) prepetition, those amounts may be set off against Allowed Claims only upon the written consent of Debtors, as set forth in the Plan or upon entry of a Final Order authorizing such offset. To the extent Debtors have posted security deposits (with utilities or otherwise) Post- Petition, the deposits shall be returned to Debtors or otherwise applied as directed by Debtors upon its request.

(d) Quarterly Fees. All fees payable under 28 U.S.C. § 1930, for quarters ending prior to the entry of the order Closing this Chapter 11 Case shall be paid in full by the Reorganized Debtors.

(e) Confirmation Order and Plan Control. To the extent the Confirmation Order and/or the Plan is inconsistent with the Disclosure Statement, any other agreement entered into between the Debtors and any third party, the Plan controls the Disclosure Statement and any such agreements and the Confirmation Order (and any other Orders of the Court) shall be construed together and consistent with the terms of the Plan.

(f) Consent to Jurisdiction. By accepting any distribution or payment under or in connection with the Plan, by filing any Proof of Claim, by filing any Cure Claim or objection to the assumption or assignment of any assumed contract, by voting on the Plan, or by entering an appearance in the Case, all Creditors and other parties in interest have consented, and will be deemed to have expressly consented to the jurisdiction of the Bankruptcy Court for all purposes with respect to any and all matters relating to, arising under or in connection with the Plan or the Case, including the matters and purposes set forth in the Plan.

(g) Post-Confirmation Notice. After the Confirmation Date, no Creditor or other party-in-interest shall be entitled to general notice of pleadings filed in the Chapter 11 Case or other notices required by the Bankruptcy Code or Bankruptcy Rules, unless such party already receives notice through the Court’s CM/ECF system or such party requests post-confirmation notice by filing a request with the Court and serving same on Debtors’ counsel. All pre- Confirmation requests for notice and orders requiring or limiting notice shall have no effect post- Confirmation, except with regard to continued service through the Court’s CM/ECF system.

(h) Case Closing. Debtors shall be responsible for preparing and filing any required motion to close the Chapter 11 Case. Debtors intend to seek closure of its Chapter 11 Case as soon as possible after the Effective Date, and this Chapter 11 Case may be closed

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notwithstanding the pendency of any claims objections, other contested motions, Causes of Action or Avoidance Actions, over which the Court shall retain jurisdiction.

(i) Destruction of Records. After the Effective Date, Debtors shall have the right to destroy or cause to be destroyed records that it determines to no longer be needed. Any objection to the destruction of such records must be raised as an objection to confirmation of the Plan or shall be deemed to be waived.

(j) Headings. All heading utilized in the Plan are for convenience and reference only, and shall not constitute a part of the Plan for any other purpose.

(k) Due Authorization. Each and every Claimant who elects to participate in the distributions provided for herein warrants that such Claimant is authorized to accept, in consideration of such Claim against the Debtors, the distributions provided for in the Plan and that there are not outstanding commitments, agreements, or understandings, expressed or implied, that may or can in any way defeat or modify the rights conveyed or obligations undertaken by such Claimant under the Plan.

(l) Further Assurances and Authorizations. Debtors, if and to the extent necessary, shall seek such orders, judgments, injunctions, and rulings that may be required to carry out further the intentions and purposes, and to give full effect to the provisions, of the Plan. All terms and provisions of the Plan shall be construed in favor of the Debtors.

(m) Additional Acts or Actions. Debtors may, but shall not be obligated to, take any action or commit any act that they determine to be necessary to facilitate the consummation, implementation, effectuation and execution of the Plan.

(n) Applicable Law. Except to the extent that the Bankruptcy Code or other federal law is applicable, the rights, duties and obligations arising under the Plan shall be governed by and construed and enforced in accordance with the internal laws of the State of Tennessee without reference to the laws of other jurisdictions.

(o) No Interest. Except as expressly provide for in the Plan, or allowed by Final Order, no interest, penalty or late charge is to be Allowed on any Claim subsequent to the Petition Date.

(p) No Attorneys’ Fees. No attorneys’ fees will be paid with respect to any Claim except as specified herein or as allowed by a prior order of the Court.

(q) Post-Confirmation Actions. After Confirmation, Debtors may, so long as it does not materially or adversely affect the interest of Creditors, remedy any defect or omission, or reconcile any inconsistencies in the Plan or in the Order of Confirmation, in such manner as may be necessary to carry out the purposes and effect of the Plan. Debtors may also, but shall not be obligated to, take any action or commit any act that they may deem to be necessary to facilitate the consummation, implementation, effectuation and execution of the Plan. Nothing contained in the Plan shall be construed so as to limit the rights of the Debtors to commence or prosecute any claim in any court of competent jurisdiction.

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(r) Severability. Should any provisions in the Plan be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any other provisions of the Plan.

(s) Setoff. Except as specifically provided in the Plan, no Creditor shall retain any contractual or statutory right to set off any asset in which either Debtor has an interest in satisfaction of that Creditor’s prepetition Claim.

(t) Notice of Default. In the event of any alleged default under the Plan, any Creditor or party-in-interest must give a written default notice to Debtors, with copies to counsel of record for Debtors, specifying the nature of the default. Upon receipt of the default notice, Debtors shall have ten (10) days to cure such default from the time of receipt of the default notice. If such default has not been cured within the applicable time period, the default may be brought to the attention of the Court or any other court of competent jurisdiction.

(u) No Tax or Filing Fee. No governmental entity may tax any transfer of property pursuant to or in furtherance of the Plan, or charge any tax or fee for the recording of, any release, deed, transaction or other document executed pursuant to or in furtherance of the Plan.

(v) Notices. All notices, requests, elections or demands in connection with the Plan shall be in writing and shall be deemed to have been given when received or, if mailed, five (5) days after the date of mailing provided such writing shall have been sent by registered or certified mail, postage prepaid, return receipt requested.

VIII. CONFIRMATION OF THE PLAN

A. Confirmation Hearing.

The Court has scheduled the Confirmation Hearing for ______, 2020 (prevailing Central Time). The Confirmation Hearing may be adjourned from time to time without further notice and may be conducted by Zoom conference.

Objections to Confirmation of the Plan must be filed and served on the Debtors, and certain other parties, by no later than ______, 2020 in accordance with the notice of the Confirmation Hearing.

B. Requirements for Confirmation of the Plan.

At the Confirmation Hearing, the Bankruptcy Court will determine whether the provisions of section 1129 of the Code have been satisfied. Section 1129(a) of the Bankruptcy Code, as applicable here, provides generally as follows:

 The Plan must comply with the applicable provisions of the Code, including section 1123 which specifies the mandatory contents of a plan and section 1122 which requires that Claims and Interests be placed in Classes with “substantially similar” Claims.

 The proponents of the Plan must comply with the applicable provisions of the Code.

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 The Plan must have been proposed in good faith and not by any means forbidden by law.

 Any payment made or to be made by Debtors or by a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in or in connection with the Case, or in connection with the Plan and incident to the Case, must be disclosed to the Bankruptcy Court and approved or be subject to the approval of the Bankruptcy Court as reasonable.

 Debtors must disclose the identity of any insider that will be employed or retained by the Reorganized Debtors and the nature of any compensation for such insider.

 The Plan must meet the “best interest of creditors” test which requires that each holder of a Claim of a Class of Claims that is Impaired under the Plan either accept the Plan or 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 receive or retain if the Debtors were liquidated on such date under Chapter 7 of the Code. If the holders of a Class of Secured Claims make an election under section 1111(b) of the Code, each holder of a Claim in such electing Class must receive or retain under the Plan on account of its Claim property of a value, as of the Effective Date of the Plan, that is not less than the value of its interest in Debtors’ interest in the property that secures its Claim. To calculate what non-accepting holders would receive if Debtors were liquidated under Chapter 7, the Bankruptcy Court must determine the dollar amount that would be generated upon disposition of the Debtors’ assets and reduce such amount by the costs of liquidation. Such costs would include the fees of a Trustee (as well as those of counsel and other professionals) and all expenses of sale.

 Each Class of Claims or Interests must either accept the Plan or not be Impaired under the Plan. Alternatively, as discussed herein, a Plan may be confirmed over the dissent of a Class of Claims or Interests if the “cramdown” requirements of section 1129(b) of the Code are met.

 Except to the extent that the holder of a particular Claim has agreed to a different treatment of such Claim, the Plan must provide that holders of Administrative Claims and Priority Claims (other than tax claims) will be paid in full in cash on the Effective Date of the Plan, and that holders of priority tax Claims will receive on account of such Claims deferred cash payments, over a period not exceeding five (5) years after the Petition Date, of a value, as of the Effective Date of the Plan, equal to the Allowed amount of such Claim.

 At least one Impaired Class must accept the Plan, determined without including the acceptance of the Plan by any insider holding a Claim of such Class.

 The Plan must be “feasible.” In other words, it cannot be likely that confirmation of the Plan will be followed by the liquidation, or the need for further financial reorganization of Debtors, unless such liquidation is proposed in the Plan; and

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 All fees required to be paid under the Code have been paid or the Plan provides for such payment on its Effective Date.

C. The Plan Meets All of the Requirements for Confirmation

Debtors believe that the Plan satisfies all of the statutory requirements of Chapter 11 of the Code and therefore should be confirmed. More specifically:

1. The Plan complies with all of the applicable provisions of the Code;

2. Debtors have complied with the Code and has proposed the Plan in good faith.

3. Debtors have proposed the Plan in a good-faith attempt to reorganize its finances and continue operation of its business pursuant to the Bankruptcy Code. Debtors’ Plan provides that all Priority and Secured Claims be paid in full, and provides for greater payments to unsecured creditors than would be realized under Chapter 7. Additionally, Debtors have made timely adequate protection payments for the duration of this Chapter 11 case to secured creditors requesting them. Debtors assert that the Plan has been proposed in a good-faith effort to maximize value of the Estate for all creditors and for Debtors moving forward. The Plan will fairly achieve a result consistent with the objectives and purposes of the Bankruptcy Code, to preserve the Debtors’ business as a going concern and maximize property to satisfy creditor’s claims

4. All disclosure requirements concerning payments made or to be made for services rendered in connection with the Chapter 11 case or the Plan; and

5. Administrative Claims, Priority Claims, and fees required to be paid under the Code are appropriately treated under the Plan.

IX. LIQUIDATION ANALYSIS

If any Holder of an Allowed Claim in any Impaired Class does not accept the Plan, then Debtors must establish that the Plan affords that Class of creditors an amount that is not less than the amount that would be received by that creditor if Debtors were liquidated under Chapter 7 of the Bankruptcy Code. Because the Plan offers the potential for the greatest realization from its assets, Debtors are confident that this test is met and that the Plan, therefore, is in the best interests of creditors. Debtors do not believe that liquidation in the context of a Chapter 7 case would afford the holders of Claims a return as great as may be achieved under the Plan.

Debtors’ liquidation analysis is attached as Exhibit D, which was prepared by FTI with material assistance from the Debtors and legal counsel. Debtors’ primary assets are receivables, inventory and deposits. Exhibit D reflects that after payment of Administrative Claims, including the DIP Obligations, the costs of the Chapter 7 case, and the increased amount of Unsecured Claims resulting from the rejection of all leases and executory contracts, the recovery on Allowed Unsecured Claims would range between a high of 35% and a low of 19%.

For these reasons, among others, Debtors do not believe a Chapter 7 Trustee would be able to generate funds for distribution equal in amount to the funds expected to be paid on account of Allowed Secured, Priority or Unsecured Claims under the Plan. For these reasons, Debtors assert

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that all creditors of the Debtors will receive substantially more under the Plan than they would receive in a Chapter 7 case.

X. SOLICITATION AND VOTING PROCEDURES

ACCEPTANCE OR REJECTION OF THE PLAN WILL BE DETERMINED, PURSUANT TO THE BANKRUPTCY CODE, BASED UPON THE ALLOWED CLAIMS THAT ACTUALLY VOTE ON THE PLAN. THEREFORE, IT IS IMPORTANT THAT CLAIMANTS EXERCISE THEIR RIGHT TO VOTE TO ACCEPT OR REJECT THE DEBTORS’ PLAN OF REORGANIZATION.

This Disclosure Statement, which is accompanied by a Ballot or Ballots to be used for voting on the Plan, is being distributed to the Holders of Claims and Interests in those Classes that are entitled to vote to accept or reject the Plan.

A. Holders of Claims and Interests Entitled to Vote on the Plan.

Under the provisions of the Bankruptcy Code, not all holders of claims against or interests in a debtor are entitled to vote on a chapter 11 plan. The table below provides a summary of the status and voting rights of each Class (and, therefore, of each Holder within such Class absent an objection to the Holder’s Claim or Interest) under the Plan.

Each Class’s respective voting status is set forth below.

Class Claim / Equity Interests Status Voting Rights

1 Priority Claims other than Priority Tax Unimpaired Not Entitled to Vote Claims 2 Secured Claims Impaired Entitled to Vote 3 Unsecured Convenience Claims Impaired Not Entitled to Vote 4 Unsecured Claims of Insiders Impaired Not Entitled to Vote 5 Unsecured Claims Not in Class 3 or 4 Impaired Entitled to Vote 6 Ownership Interests in the Debtors Unimpaired Not Entitled to Vote

As shown in the table, the Debtors are soliciting votes to accept or reject the Plan only from Holders of Claims in Classes 2 and 5 (collectively, the “Voting Classes”). Holders of Claims in the Voting Classes are Impaired under the Plan, but will be paid in full over time unless electing otherwise. Accordingly, Holders of Claims and Interests in the Voting Classes have the right to vote to accept or reject the Plan.

The Debtors are not soliciting votes from Holders of Claims and Interests in Classes 1, 3 and 4.

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B. Voting by Holders of Disputed Claims

For purposes of the Plan, an Allowed Claim is a Claim against the Debtors that (a) has been scheduled by Debtors pursuant to the Code as undisputed, noncontingent, and liquidated and as to which no objection has been filed, (b) as to which a timely proof of claim or application for payment has been filed and as to which no objection has been filed within the time allowed for filing of objections, (c) has been Allowed by Final Order, or (d) has been Allowed under the Plan. Therefore, although the holders of Disputed Claims will receive ballots, these votes will not be counted unless such Claims become Allowed Claims as provided under the Plan or are temporarily allowed for voting purposes by the Bankruptcy Court.

C. Vote Required for Class Acceptance

During the Confirmation Hearing, the Bankruptcy Court will determine whether the Classes voting on the Plan have accepted the Plan by determining whether sufficient acceptances have been received from the holders of Allowed Claims actually voting in such Classes. A Class of Claims will be determined to have accepted the Plan if the holders of Allowed Claims in the Class casting votes in favor of the Plan (i) hold at least two thirds of the total amount of the Allowed Claims of the holders in such Class who actually vote and (ii) constitute more than one half in number of holders of the Allowed Claims in such Class who actually vote on the Plan.

As a condition to Confirmation, the Bankruptcy Code requires that each Impaired Class of Claims accept the Plan, subject to the exception of section 1129(b) of the Code described herein. At least one Impaired Class of Claims must accept the Plan.

D. Voting Instructions

1. Ballots and Voting

Holders of Allowed Claims entitled to vote on the Plan have been sent a Ballot, together with instructions for voting, with this Disclosure Statement. Claimants should read the Ballot carefully and follow the instructions contained therein. In voting for or against the Plan, please use only the Ballot(s) that accompanies this Disclosure Statement.

If you are a member of a class entitled to vote on the Plan and did not receive a ballot for such Class, or if your ballot is damaged or lost, or if you have any questions concerning voting procedures, you should contact counsel for the Debtors.

BALLOTS OF CLAIMANTS THAT ARE SIGNED AND RETURNED, BUT NOT EXPRESSLY VOTED FOR EITHER ACCEPTANCE OR REJECTION OF THE PLAN, SHALL BE COUNTED AS BALLOTS CAST FOR THE ACCEPTANCE OF THE PLAN IF SO PERMITTED BY THE BANKRUPTCY COURT.

2. Returning Ballots and Voting Deadline

You should complete and sign each Ballot that you receive and return it in the pre- addressed envelope enclosed with each Ballot to Michelle Harding, by the Voting Deadline (as

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hereinafter defined). All Ballots will be tabulated and the tabulation of voting presented to the Bankruptcy Court at the Confirmation Hearing.

THE VOTING DEADLINE IS ______P.M., CENTRAL STANDARD TIME, ON ______, 2020. IN ORDER TO BE COUNTED, BALLOTS MUST BE ACTUALLY RECEIVED ON OR BEFORE ______P.M., CENTRAL STANDARD TIME, ON THE VOTING DEADLINE AT THE ADDRESS SET FORTH BELOW:

Michelle Harding Bass, Berry & Sims, PLC 150 Third Ave. South, Suite 2800 Nashville, Tennessee 37201 Fax: (615) 742-0564 Email: [email protected]

EXCEPT TO THE EXTENT ALLOWED BY THE BANKRUPTCY COURT, BALLOTS RECEIVED AFTER THE VOTING DEADLINE MAY NOT BE ACCEPTED OR USED IN CONNECTION WITH THE DEBTORS’ REQUEST FOR CONFIRMATION OF THE PLAN OR ANY MODIFICATION THEREOF.

3. Incomplete or Irregular Ballots

Ballots which fail to designate the Class to which they apply shall be counted in the appropriate Class as determined by the Debtors, subject only to contrary determinations by the Bankruptcy Court.

BALLOTS OF CLAIMANTS THAT ARE SIGNED AND RETURNED, BUT DO NOT INDICATE A VOTE EITHER FOR ACCEPTANCE OR REJECTION OF THE PLAN SHALL BE COUNTED AS BALLOTS FOR THE ACCEPTANCE OF THE PLAN UNLESS THE BANKRUPTCY COURT RULES OTHERWISE.

4. Changing Votes

Bankruptcy Rule 3018(a) permits a Claimant, for cause, to move the Bankruptcy Court to permit such claimant to change or withdraw its acceptance or rejection of a plan of reorganization.

E. Contested and Unliquidated Claims

Contested Claims are not entitled to vote to accept or reject the Plan. If you are the holder of a Contested Claim, you may ask the Bankruptcy Court pursuant to Bankruptcy Rule 3018 to have your Claim temporarily Allowed for the purpose of voting.

F. Possible Reclassification of Creditors

Debtors are required pursuant to section 1122 of the Bankruptcy Code to place Claims into Classes that contain substantially similar Claims. While Debtors believe that the Plan has classified all Claims in compliance with section 1122 of the Bankruptcy Code, it is possible that a

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Claimant may challenge the classification of its Claim. If Debtors are required to reclassify any Claims of any Claimants under the Plan, Debtors, to the extent permitted by the Bankruptcy Court, intend to continue to use the acceptances received from such Claimants pursuant to the solicitation of acceptances using this Disclosure Statement for the purpose of obtaining the approval of the Class or Classes of which such Claimants are ultimately deemed to be a member. Any reclassification of Claimants could affect the Class in which such Claimants were initially a member, or any other Class under the Plan, by changing the composition of such Class and the required vote thereof for approval of the Plan.

XI. REQUEST FOR RELIEF UNDER SECTION 1129(B)

A. Requirements for “Cramdown”

In the event any Impaired Class of Claims shall fail to accept the Plan in accordance with section 1129(a) of the Bankruptcy Code, Debtors shall request the Bankruptcy Court to confirm the Plan in accordance with the provisions of section 1129(b) of the Bankruptcy Code.

The Bankruptcy Court may confirm a plan, even if it is not accepted by all Impaired Classes, if the Plan has been accepted by at least one Impaired Class of Claims and the Plan meets the “cramdown” provisions set forth in section 1129(b) of the Code. The “cramdown” provisions require that the Bankruptcy Court find that a plan “does not discriminate unfairly” and is “fair and equitable” with respect to each non-accepting Impaired Class. In the event that all Impaired Classes do not vote to accept the Plan, Debtors will request that the Bankruptcy Court nonetheless confirm the Plan pursuant to the provisions of section 1129(b) of the Code.

The Bankruptcy Court may find that the Plan is “fair and equitable” with respect to a Class of non-accepting Secured Claims, only if, under the Plan, (a) the holder of each Secured Claim in such Class retains such holder’s lien and receives deferred cash payments totaling at least the Allowed amount of such Secured Claim and having a value, as of the Effective Date of the Plan, equal to or in excess of the value of such holder’s interest in the estate’s interest in the collateral for the Secured Claim, (b) the collateral for such Secured Claim is sold, the lien securing such Claims attached to the proceeds, and such liens on proceeds are afforded the treatment described under clause (a) or (c) of this sentence, or (c) the holders of such Secured Claims realize the “indubitable equivalent” of their claims.

Debtors assert that the rate of interest proposed to be paid on Secured Claims provides secured creditors with a future payment stream having a present value equal to each creditor’s Allowed Secured Claim.

In Chapter 11 cases, the Bankruptcy Court may find that the Plan is “fair and equitable” with respect to a Class of non-accepting impaired Unsecured Claims only if (a) each impaired unsecured creditor receives or retains under the Plan property of a value as of the Effective Date of such Plan equal to the amount of its Allowed Claim, or (b) the holder of any Claim or Interest that is junior to the Claims of the dissenting Class will not receive or retain any property under the Plan.

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If all of the provisions of section 1129(b) of the Code are met, the Bankruptcy Court may enter an order confirming the Plan.

B. The Plan is Confirmable Under Section 1129(b) of the Bankruptcy Code

Debtors assert that the Plan also meets the “best interest of creditors” test and is “feasible”. In addition, if any Class of Claims rejects the Plan, the Plan can nevertheless be confirmed because it meets the “cramdown” standard with respect to such Class.

1. The Plan Meets the “Best Interest of Creditors” Test

The “best interest of creditors” test requires that the Bankruptcy Court find that the Plan provides to each non-accepting holder of a Claim treated under the Plan a recovery which has a present value at least equal to the present value of the distribution that such person would receive if Debtors’ assets were liquidated under Chapter 7 of the Code. An analysis of the likely recoveries and effect on creditors in the event of liquidation under Chapter 7 of the Code is contained herein at Article IX.

2. The Plan is Feasible

The Code requires that, as a condition to Confirmation of a plan, the Bankruptcy Court find that Confirmation is not likely to be followed by a liquidation or a need for further financial reorganization except as proposed in that plan. Debtors have proven their ability to pay the amounts that will be due under the Plan on the Effective Date and thereafter (see Exhibit B hereto). Additionally, Exhibit E to this Disclosure Statement verifies that the Debtors will have the cash needed on the Effective Date, as it reflects sources and uses of cash available to the Debtors as of the Effective Date. Debtors also believe that the information contained in Exhibit B realistically reflects anticipated future operations, and provides creditors with a reasonable snapshot from which to evaluate the prospects for Debtors’ long-term success.

3. The Plan Meets the Cramdown Standard With Respect to Any Impaired Class of Claims Rejecting the Plan

In the event any Impaired Class of Claims rejects the Plan, the Plan can nevertheless be confirmed. The Plan satisfies the provisions for cramdown under section 1129(b)(2) of the Bankruptcy Code. Secured, Priority and Unsecured Creditors are either retaining their liens and receiving the value of their interest in the Debtors’ property in deferred cash payments totaling the allowed amount of their Claims or receiving all property secured by their Liens. In the event an Impaired Class rejects the Plan, the Plan shall be deemed a motion for cramdown of such Class under section 1129(b)(2) of the Bankruptcy Code.

XII. IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT

A. Additional Important Information.

The confirmation and effectiveness of the Plan are subject to certain material conditions precedent described herein and set forth in the Plan. There is no assurance that the Plan will be

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confirmed, or if confirmed, that the conditions required to be satisfied for the Plan to go effective will be satisfied (or waived).

You are encouraged to read this Disclosure Statement in its entirety, including the section entitled “Risk Factors” and the Plan before submitting your ballot to vote on the Plan.

The Court’s approval of this Disclosure Statement does not constitute a guarantee by the Court of the accuracy or completeness of the information contained herein or an endorsement by the Court of the merits of the Plan.

Summaries of the Plan and statements made in this Disclosure Statement are qualified in their entirety by reference to the Plan. The summaries of the financial information and the documents annexed to this Disclosure Statement or otherwise incorporated herein by reference are qualified in their entirety by reference to those documents. The statements contained in this Disclosure Statement are made only as of the date of this Disclosure Statement, and there is no assurance that the statements contained herein will be correct at any time after such date. Except as otherwise provided in the Plan or in accordance with applicable law, the Debtors are under no duty to update or supplement this Disclosure Statement.

The information contained in this Disclosure Statement is included for purposes of soliciting acceptances to, and Confirmation of, the Plan and may not be relied on for any other purpose. In the event of any inconsistency between the Disclosure Statement and the Plan, the relevant provisions of the Plan will govern.

This Disclosure Statement has not been approved or disapproved by the SEC or any similar federal, state, local or foreign regulatory agency, nor has the SEC or any other agency passed upon the accuracy or adequacy of the statements contained in this Disclosure Statement.

The Debtors have sought to ensure the accuracy of the financial information provided in this Disclosure Statement; however, the financial information contained in this Disclosure Statement or incorporated herein by reference has not been, and will not be, audited or reviewed by the Debtors’ independent auditors unless explicitly provided otherwise.

Upon Confirmation of the Plan, certain of the securities described in this Disclosure Statement will be issued without registration under the Securities Act, or similar federal, state, local, or foreign laws, in reliance upon the exemption set forth in (a) section 1145 of the Bankruptcy Code or (b) section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. Other securities may be issued pursuant to other applicable exemptions under the federal securities laws, if any. All securities issued pursuant to the exemption from registration set forth in section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder will be considered “restricted securities” and may not be transferred except pursuant to an effective registration statement under the Securities Act or an available exemption therefrom.

The Debtors make statements in this Disclosure Statement that are considered forward- looking statements under federal securities laws. The Debtors consider all statements regarding anticipated or future matters, to be forward-looking statements. Forward-looking statements may include statements about:

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 the Debtors’: o business strategy, plans, objectives, and expectations; o financial condition, revenues, cash flows, and expenses; o financial strategy, budget, projections, and operating results; o access to financing and terms of such financing; o cost savings as a result of the closing the Debtors’ stores; o capital resources and liquidity, including access to additional borrowing capacity under the DIP Loan and the Exit Financing, and ability to satisfy future cash obligations; and  general economic and business conditions;  the competitive nature of the retail industry;  uncertainty regarding the Debtors’ future operating results;  variations in the market demand for, and prices of, the Debtors’ key product lines; and  the impact of regional or global pandemics or other public health issues.

Statements concerning the foregoing and other matters are not guarantees of the Reorganized Debtors’ future performance. There are risks, uncertainties, and other important factors that could cause the Debtors’ actual performance or achievements to be different from those they may project, and the Debtors undertake no obligation to update the projections made herein. These risks, uncertainties, and factors may include: the Debtors’ ability to confirm and consummate the Plan; the Debtors’ ability to reduce its overall financial leverage; the potential adverse impact of the Chapter 11 Case on the Debtors’ operations, management, and employees, and the risks associated with operating the Debtors’ business during the Chapter 11 Case; customer and vendor responses to the Chapter 11 Case; the Debtors’ inability to discharge or settle Claims during the Chapter 11 Case; general economic, business and market conditions and the impact of the recent COVID-19 outbreak; currency fluctuations; interest rate fluctuations; price increases; exposure to litigation; a decline in the Debtors’ market share due to competition or price pressure by customers; the Debtors’ ability to implement cost reduction initiatives in a timely manner; the Debtors’ ability to divest existing businesses; financial conditions of the Debtors’ customers; adverse tax changes; limited access to capital resources; changes in domestic and foreign laws and regulations; trade balance; natural disasters; geopolitical instability; and the effects of governmental regulation on the Debtors’ businesses.

XIII. RISK FACTORS

Holders of Claims and Interests should read and consider carefully the risk factors set forth below before voting to accept or reject the Plan. Although there are many risk factors discussed below, these factors should not be regarded as constituting the only risks present in connection with the Debtors’ business or the Plan and its implementation.

A. Bankruptcy Law Considerations.

The occurrence or non-occurrence of any or all of the following contingencies, and any others, could affect distributions available to Holders of Allowed Claims and Interests under the Plan but will not necessarily affect the validity of the vote of the Impaired Classes to accept or

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reject the Plan or necessarily require a re-solicitation of the votes of Holders of Claims and Interests in such Impaired Classes.

1. Parties in Interest May Object to the Plan’s Classification of Claims and Interests.

Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity interest in a particular class only if such claim or equity interest is substantially similar to the other claims or equity interests in such class. The Debtors believe that the classification of the Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code because the Debtors created Classes of Claims and Interests each encompassing Claims or Interests, as applicable, that are substantially similar to the other Claims or Interests, as applicable, in each such Class. Nevertheless, there can be no assurance that the Court will reach the same conclusion.

2. The Debtors May Fail to Satisfy Vote Requirements.

If votes are received in number and amount sufficient to enable the Court to confirm the Plan, the Debtors intend to seek, as promptly as practicable thereafter, Confirmation of the Plan. In the event sufficient votes are not received, the Debtors may seek to confirm an alternative chapter 11 plan of reorganization. There can be no assurance that the terms of any such alternative chapter 11 plan of reorganization would be similar or as favorable to the Holders of Allowed Claims and Interests as those proposed in the Plan.

3. The Debtors May Not Be Able to Secure Confirmation of the Plan.

Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a chapter 11 plan, and requires, among other things, a finding by the Court that: (a) such plan “does not unfairly discriminate” and is “fair and equitable” with respect to any non-accepting classes; (b) confirmation of such plan is not likely to be followed by a liquidation or a need for further financial reorganization unless such liquidation or reorganization is contemplated by the plan; and (c) the value of distributions to non-accepting holders of claims and equity interests within a particular class under such plan will not be less than the value of distributions such holders would receive if the debtors were liquidated under chapter 7 of the Bankruptcy Code.

Even though the Debtors believe these conditions can be met, there can be no assurance that the requisite acceptances to confirm the Plan will be received. Even if the requisite acceptances are received, there can be no assurance that the Court will confirm the Plan. A non-accepting Holder of an Allowed Claim might challenge whether the balloting procedures and voting results satisfy the requirements of the Bankruptcy Code or Bankruptcy Rules. Even if the Court determines that this Disclosure Statement, the balloting procedures, and voting results are appropriate, the Court could still decline to confirm the Plan if it finds that any of the statutory requirements for Confirmation are not met. If a chapter 11 plan of reorganization is not confirmed by the Court, it is unclear whether the Debtors will be able to reorganize their business and what, if anything, Holders of Allowed Claims and Interests against them would ultimately receive on account of such Allowed Claims and Interests.

The Debtors, subject to the terms and conditions of the Plan, reserve the right to modify the terms and conditions of the Plan as necessary for Confirmation. Any such modifications could

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result in less favorable treatment of any non-accepting Class, as well as any Class junior to such non-accepting Class, than the treatment currently provided in the Plan. Such a less favorable treatment could include a distribution of property with a lesser value than currently provided in the Plan or no distribution whatsoever under the Plan.

4. Nonconsensual Confirmation.

In the event that any impaired class of claims or interests does not accept a chapter 11 plan, a bankruptcy court may nevertheless confirm a plan at the proponents’ request if at least one impaired class (as defined under section 1124 of the Bankruptcy Code) has accepted the plan (with such acceptance being determined without including the vote of any “insider” in such class), and, as to each impaired class that has not accepted the plan, the bankruptcy court determines that the plan “does not discriminate unfairly” and is “fair and equitable” with respect to the dissenting impaired class(es). The Debtors believe that the Plan satisfies these requirements, and the Debtors may request such nonconsensual Confirmation in accordance with subsection 1129(b) of the Bankruptcy Code. Nevertheless, there can be no assurance that the Court will reach this conclusion. In addition, the pursuit of nonconsensual Confirmation or Consummation of the Plan may result in, among other things, increased expenses relating to professional compensation.

5. Continued Risk Upon Confirmation.

Even if a chapter 11 plan of reorganization is consummated, the Debtors will continue to face a number of risks, including certain risks that are beyond their control, such as further deterioration or other changes in economic conditions, changes in the industry, potential revaluing of their assets due to chapter 11 proceedings, changes in consumer demand for, and acceptance of, their products, and increasing expenses. Some of these concerns and effects typically become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the case may be completed. As a result of these risks and others, there is no guarantee that a chapter 11 plan of reorganization reflecting the Plan will achieve the Debtors’ stated goals.

In addition, at the outset of the Chapter 11 Case, the Bankruptcy Code gives the Debtors the exclusive right to propose the Plan and will prohibit creditors and others from proposing a plan. The Debtors will have retained the exclusive right to propose the Plan upon filing their petitions for chapter 11 relief. If the Court terminates that right, however, or the exclusivity period expires, the Debtors’ ability to achieve confirmation of the Plan and achieve the Debtors’ stated goals may be adversely affected.

Furthermore, even if the Debtors’ debts are reduced and/or discharged through the Plan, the Debtors may need to raise additional funds through public or private debt or equity financing or other various means to fund the Debtors’ business after the completion of the proceedings related to the Chapter 11 Case. Additional financing, if required, may not be available on commercially reasonable terms, if at all.

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6. The Chapter 11 Case May Be Converted to Cases Under Chapter 7 of the Bankruptcy Code.

If the Court finds that it would be in the best interest of creditors and/or the debtor in a chapter 11 case, the Court may convert a chapter 11 bankruptcy case to a case under chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be appointed or elected to liquidate the debtors’ assets for distribution in accordance with the priorities established by the Bankruptcy Code. The Debtors believe that liquidation under chapter 7 would result in significantly smaller distributions being made to creditors than those provided for in a chapter 11 plan because of (a) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion over a short period of time rather than reorganizing or selling in a controlled manner affecting the business as a going concern, (b) additional administrative expenses involved in the appointment of a chapter 7 trustee, and (c) additional expenses and Claims, some of which would be entitled to priority, that would be generated during the liquidation, and including Claims resulting from the rejection of leases and other Executory Contracts in connection with cessation of operations.

7. The Debtors May Object to the Amount or Classification of a Claim.

Except as otherwise provided in the Plan, the Debtors reserve the right to object to the amount or classification of any Claim or Interest under the Plan. The estimates set forth in this Disclosure Statement cannot be relied upon by any Holder of a Claim or Interest where such Claim or Interest is subject to an objection. Any Holder of a Claim or Interest that is subject to an objection thus may not receive its expected share of the estimated distributions described in this Disclosure Statement.

8. Risk of Non-Occurrence of the Effective Date.

Although the Debtors believe that the Effective Date may occur quickly after the Confirmation Date, there can be no assurance as to such timing or as to whether the Effective Date will, in fact, occur.

9. Contingencies Could Affect Votes of Impaired Classes to Accept or Reject the Plan.

The distributions available to Holders of Allowed Claims and Interests under the Plan can be affected by a variety of contingencies, including, without limitation, whether the Court orders certain Allowed Claims or Interests to be subordinated to other Allowed Claims or Interests. The occurrence of any and all such contingencies, which could affect distributions available to Holders of Allowed Claims and Interests under the Plan, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any sort of revote by the Impaired Classes.

The estimated Claims, Interests, and creditor recoveries that will be forth in this Disclosure Statement are based on various assumptions, and the actual Allowed amounts of Claims and Interests may significantly differ from the estimates. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual Allowed amounts of Claims or Interests may vary from the estimated Claims and Interests contained in this Disclosure Statement. Moreover, the Debtors cannot determine with any certainty at this time, the number or amount of

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Claims that will ultimately be Allowed. Such differences may materially and adversely affect, among other things, the percentage recoveries to Holders of Allowed Claims and Interests under the Plan.

B. Risks Related to Recoveries under the Plan.

1. The Debtors May Not Be Able to Achieve Their Financial Projections.

The Financial Projections attached hereto as Exhibit B represent the Debtors’ management team’s best estimate of the Debtors’ future financial performance, which is necessarily based on certain assumptions regarding the anticipated future performance of the Reorganized Debtors’ operations, as well as the United States and world economies in general and the retail industry, which has been particularly affected by the recent COVID-19 outbreak and actions taken in response thereto. While the Debtors believe that the Financial Projections attached hereto as Exhibit B are reasonable, there can be no assurance that they will be realized. If the Debtors do not achieve their projected financial results, (a) the Debtors may lack sufficient liquidity to continue operating as planned after the Effective Date and (b) the Debtors may be unable to service their debt obligations as they come due. Moreover, the financial condition and results of operations of the Reorganized Debtors from and after the Effective Date may not be comparable to the financial condition or results of operations reflected in the Debtors’ historical financial statements.

C. Risks Related to the Debtors’ Business.

1. The Debtors May Not Be Able to Generate Sufficient Cash to Service All of Their Indebtedness.

The Debtors’ ability to make scheduled payments due under the Plan and in the ordinary course of their business depends on their on-going operating performance, which are subject to prevailing economic, industry, and competitive conditions and to certain financial, business, legislative, regulatory, and other factors beyond their control. For example, if the Debtors are mandated or recommended to close retail stores and/or distribution centers to contain the spread of the COVID-19 outbreak, cash flows may significantly be limited. The Debtors may be unable to maintain a level of cash flow from operating activities sufficient to permit them to pay the principal, premium, if any, and interest on their indebtedness.

2. The Debtors Will Be Subject to the Risks and Uncertainties Associated with the Chapter 11 Case.

For the duration of the Chapter 11 Case, the Debtors’ ability to operate, develop, and execute a business plan, and continue as a going concern, will be subject to the risks and uncertainties associated with bankruptcy. These risks include the following: (a) ability to develop, confirm, and consummate the restructuring transactions specified in the Plan or an alternative restructuring transaction; (b) ability to obtain court approval with respect to motions filed in the Chapter 11 Case from time to time; (c) ability to maintain relationships with suppliers, service providers, customers, employees, and other third parties; (d) ability to maintain contracts that are critical to the Debtors’ operations; (e) ability of third parties to seek and obtain court approval to terminate contracts and other agreements with the Debtors; (f) ability of third parties to seek and obtain court approval to terminate or shorten the exclusivity period for the Debtors to propose and

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confirm a chapter 11 plan, to appoint a chapter 11 trustee, or to convert the Chapter 11 Case to chapter 7 proceedings; and (g) the actions and decisions of the Debtors’ creditors and other third parties who have interests in the Chapter 11 Case that may be inconsistent with the Debtors’ plans.

These risks and uncertainties could affect the Debtors’ business and operations in various ways. For example, negative events associated with the Chapter 11 Case could adversely affect the Debtors’ relationships with brand partners, service providers, customers, employees, and other third parties, which in turn could adversely affect the Debtors’ operations and financial condition. In addition, the Debtors will need the prior approval of the Court for transactions outside the ordinary course of business, which may limit the Debtors’ ability to respond timely to certain events or take advantage of certain opportunities. Because of the risks and uncertainties associated with the Chapter 11 Case, the Debtors cannot accurately predict or quantify the ultimate impact of events that occur during the Chapter 11 Cases that may be inconsistent with the Debtors’ plans.

3. Recent Global Economic Trends, ESPECIALLY IN RESPONSE TO THE COVID-19 OUTBREAK, Could Adversely Affect the Debtors’ Business, Results of Operations and Financial Condition, Primarily Through Disruption of the Debtors’ Retail Stores.

Recent global economic conditions, including disruption of financial markets, could adversely affect the Debtors’ business, results of operations and financial condition, primarily through disrupting their customers’ businesses. Higher rates of unemployment and lower levels of business activity generally adversely affect the level of demand for certain of the Debtors’ products and services. In addition, continuation or worsening of general market conditions in the U.S. economy or other national economies important to the Debtors’ business may adversely affect the Debtors’ customers’ level of spending, ability to obtain financing for purchases and ability to make timely payments to the Debtors for their products and services, which could require the Debtors to increase the Debtors’ allowance for doubtful accounts, negatively impact their days sales outstanding and adversely affect their results of operations.

The recent outbreak of COVID-19 has significantly disrupted financial markets. This outbreak and the actions taken by federal, state and local governments in response to the outbreak have significantly affected virtually all facets of the U.S. and global economies. Restrictions on and public concern regarding travel and public interaction have materially curtailed retail and hospitality activity. The COVID-19 outbreak resulted in the temporary closure of several of the Debtors’ retail stores. A substantial majority of the Debtors’ merchandise is manufactured in numerous locations, primarily in Asia. The timely delivery of merchandise to the Debtors’ by their brand partners could be adversely affected by supply chain disruptions and travel restrictions which could, in turn, negatively impact the Debtors’ ability to meet customers’ demand.

THE RISKS TO THE ECONOMY AND RETAIL BUSINESSES IN PARTICULAR AS A RESULT OF THE COVID-19 PANDEMIC OR ITS COLLATERAL ECONOMIC DAMAGES CANNOT BE PREDICTED WITH CERTAINTY.

The Debtors are closely monitoring developments in connection with this outbreak. Restrictions on travel, quarantines and other measures imposed in response to the COVID-19 outbreak, as well as ongoing concern regarding the virus’ potential impact, have had and will likely

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continue to have a negative effect on economies and financial markets, including supply chain shortages and other business disruptions. The Debtors expect the outbreak will materially affect results in the current and potentially future operating periods; however, the duration and extent of potential supply chain, demand and other disruptions is highly uncertain and will depend on future developments with respect to the spread and severity of the virus. An extended period of further economic deterioration could exacerbate the other risks described herein.

Additional effects of the recent conditions in the global economy include higher rates of unemployment, consumer hesitancy, and limited availability of credit, each of which may constrict the Debtors’ business operations. These have had an effect on the Debtors’ revenue growth and incoming payments, and the impact may continue. If these or other conditions limit the Debtors’ ability to grow revenue or cause the Debtors’ revenue to decline and the Debtors cannot reduce costs on a timely basis or at all, the Debtors’ operating results may be materially and adversely affected.

4. Operating in Bankruptcy for a Long Period of Time May Harm the Debtors’ Business.

The Debtors’ future results will be dependent upon the successful confirmation and implementation of a plan of reorganization in a prompt fashion. A long period of operations under Court protection could have a material adverse effect on the Debtors’ business, financial condition, results of operations, and liquidity. So long as the proceedings related to the Chapter 11 Case continue, senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations. A prolonged period of operating under Court protection also may make it more difficult to retain management and other key personnel necessary to the success and growth of the Debtors’ businesses. In addition, the longer the proceedings related to the Chapter 11 Case continue, the more likely it is that customers and brand partners will lose confidence in the Debtors’ ability to reorganize their business successfully and will seek to establish alternative commercial relationships.

So long as the proceedings related to the Chapter 11 Case continue, the Debtors will be required to incur substantial costs for professional fees and other expenses associated with the administration of the Chapter 11 Case.

Furthermore, the Debtors cannot predict the ultimate amount of all settlement terms for the liabilities that will be subject to a plan of reorganization. Even after a plan of reorganization is approved and implemented, the Debtors’ operating results may be adversely affected by the possible reluctance of prospective lenders and other counterparties to do business with a company that recently emerged from bankruptcy protection and operates in the retail industry which has been dramatically affected by the recent COVID-19 outbreak.

5. Financial Results May Be Volatile and May Not Reflect Historical Trends.

During the Chapter 11 Case, the Debtors expect that their financial results will continue to be volatile as asset impairments, asset dispositions, restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact the Debtors’ consolidated

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financial statements. Moreover, there have been mandates from federal, state and local authorities requiring forced closures of non-essential retailers in response to the recent COVID-19 outbreak. The duration of such closures and the extent of the outbreak’s effects on the Debtors’ business is highly uncertain and will depend on future developments with respect to the spread and severity of COVID-19. As a result, the Debtors’ historical financial performance likely will not be indicative of their financial performance after the Petition Date.

In addition, if the Debtors emerge from chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to historical consolidated financial statements, including as a result of revisions to the Debtors’ operating plans pursuant to a plan of reorganization. The Debtors also may be required to adopt fresh start accounting, in which case their assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on the Debtors’ consolidated balance sheets. The Debtors’ financial results after the application of fresh start accounting also may be different from historical trends.

6. The Reorganized Debtors May Be Adversely Affected by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases.

In the future, the Debtors may become party to litigation. Any claims against the Debtors, whether meritorious or not, could be time-consuming, result in costly litigation, damage the Debtors’ reputation, require significant amounts of management time and divert significant resources. If any of these legal proceedings were to be determined adversely to the Debtors, or the Debtors were to enter into a settlement arrangement, the Debtors could be exposed to monetary damages or limits on the Debtors’ ability to operate their business, which could have an adverse effect on the Debtors’ business, financial condition and results of operations. It is also possible that certain parties will commence litigation with respect to the treatment of their Claims or Interests under the Plan. It is not possible to predict the potential litigation that the Debtors may become party to, nor the final resolution of such litigation. The impact of any such litigation on the Debtors’ businesses and financial stability, however, could be material.

7. The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations.

The Debtors’ operations are dependent on a relatively small group of key management personnel, including the Debtors’ executive officers. The Debtors’ recent liquidity issues and the Chapter 11 Case have created distractions and uncertainty for key management personnel and employees. Because competition for experienced personnel in the retail industry can be significant, the Debtors may be unable to find acceptable replacements with comparable skills and experience and the loss of such key management personnel could adversely affect the Debtors’ ability to operate their business. In addition, a loss of key personnel or material erosion of employee morale at the corporate and/or field levels could have a material adverse effect on the Debtors’ ability to meet customer and counterparty expectations, thereby adversely affecting the Debtors’ businesses and the results of operations.

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8. Business Risks.

As with any business venture, risks are an inherent part of the process and success cannot be guaranteed. The Plan contains projections that are estimations of future revenues and expenses that may not be realized. All risk factors cannot be anticipated, some events develop in ways that were not foreseen and many or all of the assumptions that have been used in connection with this Disclosure Statement and the Plan will not transpire exactly as assumed. Some or all of such variations may be material. While significant efforts have been made to be reasonable in this regard, there can be no assurance that subsequent events will bear out the analysis set forth herein. While Debtors believe it has taken prudent measures to address and insure the success of its future business operations, no assurance of future success can be made.

9. Notices and Disclaimers.

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(B) AND IS NOT NECESSARILY PREPARED IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER SIMILAR LAWS.

THE PLAN AND DISCLOSURE STATEMENT HAVE NEITHER BEEN FILED WITH, NOR APPROVED OR DISAPPROVED, BY UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY STATE SECURITIES COMMISSION AND NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS DISCLOSURE STATEMENT OR THE MERITS OF THE PLAN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THIS DISCLOSURE STATEMENT CONTAINS “FORWARD LOOKING STATEMENTS” WITHIN THE MEANING OF UNITED STATES SECURITIES LAWS. SUCH STATEMENTS CONSIST OF ANY STATEMENT OTHER THAN A RECITATION OF HISTORICAL FACT AND CAN BE IDENTIFIED BY THE USE OF FORWARD LOOKING TERMINOLOGY SUCH AS “MAY,” “EXPECT,” “ANTICIPATE,” “ESTIMATE,” OR “CONTINUE,” OR THE NEGATIVE THEREOF, OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. YOU ARE CAUTIONED THAT ALL FORWARD LOOKING STATEMENTS ARE NECESSARILY SPECULATIVE AND THERE ARE CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE REFERRED TO IN SUCH FORWARD LOOKING STATEMENTS.

THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE CONSTRUED AS, AN ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER. THE DEBTORS MAY SEEK TO INVESTIGATE, FILE, AND PROSECUTE CLAIMS AND MAY OBJECT TO CLAIMS AFTER THE CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF WHETHER THIS

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DISCLOSURE STATEMENT IDENTIFIES ANY SUCH CLAIMS OR OBJECTIONS TO CLAIMS.

XIV. TAX CONSEQUENCES

The following discussion summarizes certain anticipated federal income tax consequences of implementation of the Plan to Holders of Claims and to Debtors. It does not address all federal income tax consequences of the Plan nor does it address the state or local income tax or other state or local tax consequences of implementation of the Plan to Holders of Claims or to Debtors.

The description of the federal income tax consequences of implementing the Plan is based on the Internal Revenue Code of 1986 (the “Tax Code”), the existing Treasury Regulations and Proposed Regulations thereunder, judicial decisions and current published administrative rulings generally available prior to the date of the filing of the Plan, all of which are subject to change at any time. Any such change may have a retroactive effect. DEBTORS HAVE NOT RECEIVED, NOR WILL THEY REQUEST, A RULING FROM THE IRS AS TO ANY OF THE TAX CONSEQUENCES OF THE PROPOSED PLAN WITH RESPECT TO HOLDERS OF CLAIMS. NO ASSURANCE IS OR CAN BE GIVEN THAT THE IRS WILL CONCUR WITH, NOR IS THE IRS BOUND BY, THIS DISCUSSION. Debtors have not obtained an opinion of counsel with respect to any of these matters. The discussion below is general in nature and is not directed to the specific tax situation of any particular interested taxpayer.

FOR THESE REASONS, ALL HOLDERS OF CLAIMS SHOULD CONSULT WITH THEIR OWN ADVISORS AS TO THE TAX CONSEQUENCES OF IMPLEMENTATION OF THE PLAN TO THEM UNDER APPLICABLE FEDERAL, STATE AND LOCAL TAX LAWS.

A. Tax Consequences to Debtors

Confirmation of the Plan is not expected to have any material tax consequence for Debtors.

B. Tax Consequences to Claimants

Generally, bad debts arising from a taxpayer’s trade or business may be deducted from gross income to the extent of their worthlessness when such debts become partially or totally worthless. A cash basis taxpayer can deduct a bad debt only if an actual cash loss has been sustained or if the amount deducted was included in income. All accrual-basis taxpayers must use the specific charge-off method to deduct business bad debts.

Holders of Claims may be required to report income or entitled to a tax deduction as a result of implementation of the Plan. The exact tax treatment depends on, among other things, each Claim Holder’s method of accounting, the nature of each Claim Holder’s Claim, and whether and to what extent such Claim Holder has taken a bad debt deduction in prior taxable years with respect to the particular debt owed to them by Debtor. EACH HOLDER OF A CLAIM IS URGED TO CONSULT WITH ITS OWN TAX ADVISOR REGARDING THE PARTICULAR TAX CONSEQUENCES OF THE TREATMENT OF ITS CLAIM UNDER THE PLAN. DEBTORS HAVE NO MEANS TO DETERMINE THE POTENTIAL INDIVIDUALIZED TAX CONSEQUENCES TO ANY HOLDER OF CLAIMS.

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PERSONS READING THIS DISCLOSURE STATEMENT SHOULD BE AWARE THAT NEITHER DEBTORS NOR THEIR COUNSEL HAVE INTENDED TO ANSWER THE ABOVE TAX-RELATED ISSUES BUT RATHER ARE ONLY ATTEMPTING TO IDENTIFY SOME, BUT NOT ALL, OF THE TAX-RELATED ISSUES WHICH SHOULD BE CONSIDERED BY CREDITORS IN VOTING ON THE PLAN. FURTHERMORE, CREDITORS SHOULD CONSULT WITH THEIR OWN INDEPENDENT TAX ADVISOR WITH RESPECT TO ANY TAX IMPACT THAT MAY RESULT THROUGH THE IMPLEMENTATION OF THE PLAN.

XV. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND THE PLAN

A. What is Chapter 11?

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly situated equity interest holders, subject to the priority of distributions prescribed by the Bankruptcy Code.

The commencement of a chapter 11 case creates an estate that comprises all of the legal and equitable interests of the debtor as of the date the chapter 11 case is commenced. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.” Consummating a chapter 11 plan is the principal objective of a chapter 11 case. A bankruptcy court’s confirmation of a plan binds the debtor, any person acquiring property under the plan, any creditor or equity interest holder of the debtor, and any other entity as may be ordered by the bankruptcy court. Subject to certain limited exceptions, the order issued by a bankruptcy court confirming a plan provides for the treatment of the debtors’ liabilities in accordance with the terms of the confirmed plan.

B. Why are the Debtors sending this Disclosure Statement?

The Debtors are seeking to obtain Court approval of the Plan. Before soliciting acceptances of the Plan, section 1125 of the Bankruptcy Code requires the Debtors to prepare a disclosure statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding acceptance of the Plan and to share such disclosure statement with all holders of claims or interests whose votes on the Plan are being solicited. This Disclosure Statement is being submitted in accordance with these requirements.

C. Am I entitled to vote on the Plan?

Your ability to vote on, and your distribution under, the Plan, if any, depends on what type of Claim or Interest you hold. Each category of Holders of Claims or Interests, as set forth in Article III of the Plan pursuant to section 1122(a) of the Bankruptcy Code, is referred to as a “Class.” Each Class’s respective voting status is set forth below.

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Class Claim / Equity Interests Status Voting Rights

1 Priority Claims other than Priority Tax Not impaired Not Entitled to Vote Claims 2 Secured Claims Impaired Entitled to Vote 3 Unsecured Convenience Claims Not Impaired Not Entitled to Vote 4 Unsecured Claims of Insiders Impaired Not Entitled to Vote 5 Unsecured Claims Not in Classes 3 or Impaired Entitled to Vote 4 6 Ownership Interests in the Debtors Unimpaired Not Entitled to Vote

D. What classes are created under the Plan?

Pursuant to section 1123 of the Bankruptcy Code, the Debtors designates the following Classes of Claims and Interests.

f) Class 6 - Ownership Interests in the Debtors. This Class consists of Ownership Interests in the Debtors. This class of claims is not impaired under the Plan.

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E. What will I receive if I have an allowed claim in one of the classes above?

The Claims as classified in Article III of the Plan shall be satisfied in the manner set forth in Article IV. The treatment of, and the consideration to be received by each Person holding an Allowed Claim against the Debtors pursuant to the Plan shall be in full settlement, release, and discharge of their respective Allowed Claims against the Debtors.

(a) Note Option: Each holder of a Class 2 Claim shall retain all Liens securing such Claim until such Claim is fully paid or until such holder otherwise agrees. The terms and provisions relating to such Liens shall be set forth in appropriate documents agreed to between the parties, or, in the event of disagreement, as directed by the Court. The obligated Debtor or Debtors shall execute a note payable to the Class 2 Claimant and deliver it to the holder of such Claim, along with an appropriate mortgage and/or security agreement, no later than the tenth (10th) Business Day after the later of the Effective Date or the date that such Claim becomes an Allowed Claim. The initial principal amount of each Class 2 Claim shall be equal to the lesser of (i) the amount which the Court shall determine is equal to the value of the assets securing such Claim or (ii) the amount of the Class 2 Claim. To the extent that any Creditor has a Deficiency Claim in addition to its Class 2 Claim, the Deficiency Claim shall be treated under the Plan as an Unsecured Claim against the Debtors. Any note executed pursuant to this section of the Plan shall bear interest at the rate of five percent (5.0%) per annum and be paid in annual equal installments in the amount required to fully pay the note in seven annual payments, with the first such payment being on February 1, 2020.

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with respect to such Claim required to be cured by Section 1124(2) of the Code shall be cured on or prior to the forty-fifth (45th) Business Day after the Effective Date as shall be agreed to in writing by the holder of such Claim, and from and after the date of such cure any previously accelerated indebtedness shall be reinstated and any default rate of interest shall no longer apply, but shall be deemed waived (not forgiven). Each Class 2 claimant whose claim is unimpaired pursuant to the terms hereof shall retain such lien as such Creditor held prior to the Petition Date. After the reinstatement of its Class 3 Claim, each Class 2 Creditor will receive payments in accordance with the instruments governing such Claim or as such Creditor may otherwise in writing agree. Furthermore, after such unimpairment, each Class 2 Creditor will be entitled to exercise all rights, privileges, and remedies available to it under the instruments governing its Class 2 Claim in accordance with the terms for such instruments, without need for any application to or order of the Court.

(c) Cash Option: The obligated Debtor or Debtors may also elect, at any time on or before the Effective Date, to pay a Class 2 Secured Claim in full, in cash, on or promptly after the Effective Date.

d) Class 4 -- Claims of Insiders. Except to the extent that a Class 2 Claimant may otherwise agree, each holder of an Allowed Class 4 Claim shall be fully satisfied in the same manner as Allowed Class 5 Claims are satisfied.

e) Class 5 -- Unsecured Claims other than Claims in Class 3 or 4. Class 5 Claims shall be satisfied as follows:

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(a) Option 1. Debtors shall make annual payments on Allowed Class 4 and 5 Claims, commencing on March 1, 2021 and continuing on March 1 of each year thereafter until March 1, 2025, when all amounts remaining due on Allowed Class 4 and 5 Claims shall be paid in full. Interest will accrue on each Allowed Class 4 and 5 Claim from the later of the Effective Date or the date on which the Claim becomes an Allowed Claim at the rate of four percent (4.0%) per annum. The payment due on March 1, 2021 shall be in the amount of ten (10.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2020 on the amount of the Allowed Claim. The payment due on March 1, 2022 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2021 on the amount of the Allowed Claim. The payment due on March 1, 2023 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2022 on the amount of the Allowed Claim. The payment due on March 1, 2024 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2023 on the amount of the Allowed Claim. All amounts remaining due on Allowed Class 4 and 5 Claims shall be paid in full on March 1, 2025.

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f) Class 6 - Ownership Interests in the Debtors. This Class consists of the Ownership Interests in Debtors. The Interests in the respective Debtors will continue in the same amount as in existence as of the Petition Date.

F. How are executory contracts and unexpired leases treated under the Plan?

(b) Procedure for Resolving Disputed Cure Claims. Exhibit C to this Disclosure Statement sets forth a non-exhaustive list of executory contracts and unexpired leases that Debtors may assume. Should Debtors choose to assume any of the leases or contracts identified on Exhibit C to the Disclosure Statement, Debtors assert that the Allowed Cure Claim is the amount stated on that Exhibit C or such other amount as may be agreed to by the Debtors and the counterparty to the agreement. For any lease or contract not identified on Exhibit C to the Disclosure Statement, Debtors assert that no cure is owed or required. Any party to an unexpired lease or executory contract that asserts that Debtors defaulted under that contract or lease and whose cure amount is not stated on Exhibit C or who disagrees with the proposed cure amount set forth on Exhibit C to the Disclosure Statement shall be required to File with the Court an application for allowance and payment of Cure Claim, identifying the amount allegedly required to cure any such defaults in accordance with section 365(b)(1)(A) of the Code. Any such application must be filed by no later than 21 days after the Confirmation Date. The failure to file timely the application as required under section 7.2 of the Plan shall result in the Cure Claim being forever barred and discharged; the Cure Claim related to the executory contract shall be deemed to be the greater of zero or the amount proposed by the Debtors on Exhibit C to the Disclosure Statement, if any; and the related executory contract shall be deemed assumed as of the Effective Date. Each Contested Cure Claim shall become an Allowed Cure Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order. All Allowed Cure Claims shall be paid promptly unless otherwise agreed by a counterparty.

(d) Assumption or Rejection of Executory Contracts Prior to Effective Date. Nothing in the Plan precludes the Debtors from Filing at any time prior to the Confirmation Date

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a separate motion or notice to assume or reject one or more leases or executory contracts, which motions or notice may require resolution of the Cure Claim prior to the deadlines set forth in this Article VII of the Plan.

G. What will I receive from the Debtors if I hold an Administrative Claim or a Priority Tax Claim?

Administrative Claims and Priority Tax Claims are not classified under section 1123(a)(1) of the Code for purposes of voting or receiving distributions under the Plan.

1. Administrative Claims.

(a) Amounts Due to the DIP Lenders. Unless the DIP Lenders consent otherwise in writing, all amounts owed to the DIP Lenders for DIP Obligations shall be paid in full on the Effective Date, and the DIP Lenders and the DIP Agent shall be released from any and all claims related to or arising from their loans to, and their relationship with, the Debtors.

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Court a final fee application within sixty (60) days after the Effective Date and to serve notice thereof on all parties entitled to such notice pursuant to applicable Bankruptcy Rules and in accordance with any orders entered in these cases regarding the compensation of professionals. Payments of Court-approved compensation shall be made promptly after the order approving such compensation becomes a Final Order. Debtors will not have any obligation for any Fee Claim that is disallowed or not approved by the Court.

(e) Payment of Fees to U.S. Trustee. All fees payable under 28 U.S.C. § 1930 shall be paid in cash in full when due unless the Office of the United States Trustee and the Debtors agree otherwise.

H. Are any regulatory approvals required to consummate the Plan?

No. There are no known regulatory approvals that are required to consummate the Plan.

I. What happens to my recovery if the Plan is not confirmed or does not go effective?

In the event that the Plan is not confirmed or does not go effective, there is no assurance that the Debtors will be able to reorganize their businesses. It is possible that any alternative to the Plan may provide Holders of Claims and Interests with less than they would have received pursuant to the Plan. For a more detailed description of the consequences of an extended chapter 11 case, or of a liquidation scenario, see and the Liquidation Analysis attached as Exhibit D.

J. If the Plan provides that I get a distribution, do I get it upon Confirmation or when the Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and “Consummation?”

“Confirmation” of the Plan refers to approval of the Plan by the Court. Confirmation of the Plan does not guarantee that you will receive the distribution indicated under the Plan. After Confirmation of the Plan by the Court, there are conditions that need to be satisfied or waived so that the Plan can go effective. Initial distributions to holders of Allowed Claims will only be made on the date the Plan becomes effective/is consummated—the “Effective Date”—or as soon as practicable thereafter, as specified in the Plan.

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K. Will there be releases and exculpation granted to parties in interest as part of the Plan?

Yes, the Plan proposes that the Debtors, the Committee, the DIP Lenders, the DIP Agent, the equity holders of Old Time Pottery Holdings, LLC and all of their respective officers, directors, and employees be released and discharged from any and all claims, lawsuits or demands that have been, could have been, or which may in the future be asserted by the Debtors, by any creditor or by any other Person for any act or omission in connection with or arising out of transactions, relationships, or dealings relating to the negotiation or implementation of the Plan, the DIP Loan the settlement of Claims and releases incorporated in the Plan, the solicitation of votes for or confirmation of the Plan, any Pre-Petition or Post-Petition Claim of any kind, and any other matter pertaining to the administration or existence of Debtors’ Chapter 11 cases, except for willful misconduct or gross negligence as determined by a Final Order.

The Plan also provides that, except as otherwise provided in the Plan or Confirmation Order, the Debtors, the Committee, the DIP Lenders, the DIP Agent, the equity holders of Old Time Pottery Holdings, LLC and each of their officers, members, and all their professionals shall neither have nor incur any liability to any Person for any act taken or omitted to be taken (exclusive of an act constituting fraud, gross negligence or intentional misconduct) in connection with or related to this Chapter 11 Case, including without limitation actions related to the formulation, preparation, dissemination, implementation, administration, Confirmation or consummation of the Plan, the DIP Loan, the Disclosure Statement or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan. Notwithstanding anything herein to the contrary, neither the Plan nor the Confirmation Order affects any claims or causes of action against current or former officers, members or employees of the Debtors arising prior to or as of the Petition Date under 11 U.S.C. §§ 544, 547, 548, 549 or 550.

The Debtors believe that the releases and exculpations in the Plan are necessary and appropriate and meet the requisite legal standard promulgated by the United States Court of Appeals for the Sixth Circuit.

L. What impact does a potential Claims Bar Date have on my Claim?

The Debtors have Filed a motion asking the Court to set September 25, 2020 as the Bar Date for all prepetition Claims, except for Claims held by governmental entities and for administrative Claims allowed under section 503(b)(9) of the Bankruptcy Code. The Bar Date will be December, 28, 2020, for all prepetition Claims held by governmental entities. With respect to Claims based on an executory contract or unexpired lease rejected prior to the Effective Date, the Bar Date is expected to be the later of September 25, 2020 or 30 days after entry of the Confirmation Order or another Order approving such rejection. Should Debtors amend their Schedules in the future to change the amount of any claim or change a claim to disputed, contingent, or unliquidated, “Bar Date” shall also mean, only with respect to those claims affected by the amendment, the later of the date set by the Court described in the preceding sentences, as applicable to the particular Claim, or the date that is 30 days from service of notice of the amendment to the Schedules, provided that if the 30th day falls on a day that is not a Business Day, then the deadline shall be extended to the first Business Day after the 30th day, and any Holder of an amended Claim shall file a proof of claim with the Clerk of the Court by such date or be forever barred from doing so.

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In accordance with Bankruptcy Rule 3003(c)(2), if any person or entity that is required, but fails, to file a proof of claim on or before the applicable Bar Date: (a) such person or entity may be forever barred, estopped, and enjoined from asserting such Claim against the Debtors (or filing a proof of claim with respect thereto); (b) the Debtors and their property may be forever discharged from any and all indebtedness or liability with respect to or arising from such Claim; (c) such person or entity may not receive any distribution in the Chapter 11 Case on account of that Claim; and (d) such person or entity may not be permitted to vote on any plan or plans of reorganization for the Debtors on account of these barred Claims or receive further notices regarding such Claim. Except in the cases of governmental units and certain other exceptions expressly set forth in the Bar Date Order, all proofs of claims of any person or entity that is required to file a proof of claim must have been filed so that they were actually received on or before September 25, 2020. All governmental units holding claims that arose prior to the Petition Date must file proofs of claims so they are actually received on or before December 28, 2020.

M. What is the deadline to vote on the Plan?

The Voting Deadline is ______.

N. How do I vote for or against the Plan?

Detailed instructions regarding how to vote on the Plan are contained on the Ballots distributed to holders of Claims and Interests that are entitled to vote on the Plan. For more detail on voting and solicitation procedures, see Article X of this Disclosure Statement.

O. Who do I contact if I have additional questions with respect to this Disclosure Statement or the Plan?

If you have any questions regarding this Disclosure Statement or the Plan, please contact Michelle Harding or LeAnn Lewis by email at [email protected] or [email protected]. They can also be reached by phone at (615)742-6200.

Copies of the Plan, this Disclosure Statement, and any other publicly filed documents in the Chapter 11 Cases are available upon written request to the Notice and Claims Agent at the address above or by downloading the exhibits and documents from the website of the Debtors’ notice, claims, and solicitation agent at http://cases.stretto.com/OldTimePottery (free of charge) or the Court’s website at https://ecf.tnmb.uscourts.gov/ (for a fee).

P. Do the Debtors recommend voting in favor of the Plan?

Yes. The Debtors believe the Plan provides for a larger distribution to the Debtors’ creditors than would otherwise result from any other available alternative. The Debtors believe the Plan is in the best interest of all Holders of Claims and Interests and that other alternatives fail to realize or recognize the value inherent under the Plan.

Q. What is the effect of the Plan on the Debtors’ ongoing business?

The Debtors are seeking to reorganize under chapter 11 of the Bankruptcy Code. Confirmation means that the Debtors will not be liquidated or forced to go out of business.

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Following Confirmation, the Plan will be consummated on the Effective Date, which is a date selected by the Debtors that is a Business Day on which: (a) no stay of the Confirmation Order is in effect; (b) all conditions precedent specified in the Plan have been satisfied or waived; and (c) the Plan is declared effective. On or after the Effective Date, and unless otherwise provided in the Plan, the Reorganized Debtors may operate or wind-down their businesses, as applicable, and, except as otherwise provided by the Plan, may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. Additionally, upon the Effective Date, all actions contemplated by the Plan will be deemed authorized and approved.

XVI. RECOMMENDATION

In the opinion of the Debtors, the Plan is preferable to all other available alternatives and provides for a larger distribution to the Debtors’ creditors than would otherwise result in any other scenario. Accordingly, the Debtors recommend that Holders of Claims entitled to vote on the Plan vote to accept the Plan and support Confirmation of the Plan.

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DATED: August 10, 2020

OLD TIME POTTERY, LLC

/s/ Jason Schmitt By: Jason Schmitt Its: President and Chief Executive Officer

OLD TIME POTTERY HOLDINGS, LLC

/s/ Jason Schmitt By: Jason Schmitt Its: President and Chief Executive Officer

BASS, BERRY & SIMS PLC

/s/ Paul G. Jennings Paul G. Jennings Glenn B. Rose Gene L. Humphreys Michael C. Tackeff 150 Third Avenue South, Suite 2800 Nashville, TN 37201 Telephone (615) 742-6200 Facsimile (615) 742-6293 [email protected] [email protected] [email protected] [email protected]

ATTORNEYS FOR DEBTORS

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

IN RE: ) ) Case No. 3:20-bk-03138 OLD TIME POTTERY, LLC, ) Chapter 11 ) Judge Harrison Debtor. )

IN RE: ) ) Case No. 3:20-bk-03139 OTP HOLDINGS, LLC, ) Chapter 11 ) Judge Harrison Debtor. )

DEBTORS’ JOINT PLAN OF REORGANIZATION (Dated: August 10, 2020)

Debtors propose the following Joint Plan of Reorganization (the “Plan”) pursuant to the United States Bankruptcy Code (the “Bankruptcy Code”) for Debtors and their Estates.

SUMMARY OVERVIEW

This Plan is a comprehensive proposal by Debtors that provides for the continuation of Debtors’ business and payment in full over time of all Allowed Claims.

ARTICLE I DEFINITIONS

Unless the context otherwise requires, the following terms shall have the following meanings when used in initially capitalized form in this Plan. Such meanings shall be equally applicable to both the singular and plural forms of such terms. Any term used in initially capitalized form in this Plan that is not defined herein, but that is defined in the Bankruptcy Code, shall have the meaning assigned to such term in the Bankruptcy Code.

1.1. Administrative Claim means an administrative expense Claim under sections 503(a) and (b) of the Bankruptcy Code, including Fee Claims, whenever incurred and irrespective of whether any payment or transfer has been made on behalf of such administrative expense Claim, and the fees payable to the United States Trustee under 28 U.S.C. § 1930.

1.2. Allowed Amount means the amount in lawful currency of the United States of any Allowed Claim, or the number of shares representing any Allowed Interest.

1.3. Allowed Claim means, with reference to any Claim: (i) a Claim against either Debtor, proof of which, if required, was Filed on or before the Bar Date, which is not a

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Contested Claim; (ii) if no proof of claim or interest was so Filed, a Claim against either Debtor that has been or hereafter is listed by either Debtor in its Schedules as liquidated in amount and not disputed or contingent and that has not been paid since the Petition Date pursuant to an Order of the Court; (iii) a Claim allowed hereunder or by Final Order; or (iv) a Contested Claim that Debtors decide to allow to become an Allowed Claim by initiating payments on its account pursuant to the Plan. An Allowed Claim does not include any Claim or portion thereof which is a Disallowed Claim or which has been subsequently withdrawn, disallowed, released or waived by the holder thereof, by this Plan, or pursuant to a Final Order.

1.4. Avoidance Actions means any and all Causes of Action arising under Chapter 5 of the Bankruptcy Code, including without limitation any and all actions to avoid and recover overpayments, preferential transfers, fraudulent transfers, and any and all turnover actions to recover money or property due to either Debtor, regardless of whether they arise prepetition or after the Petition Date.

1.5. Bankruptcy Code means title 11 of the United States Code, as amended.

1.6. Bankruptcy Court means the United States Bankruptcy Court for the Middle District of Tennessee, Nashville Division.

1.7. Bar Date means the deadline by which a Claim must be Filed. As of the Filing of this Plan, the deadline has not been set, but the Debtors intend to request that the Bar Date be September 25, 2020 for all prepetition Claims, except for Claims held by governmental entities and for administrative Claims allowed under section 503(b)(9) of the Bankruptcy Code. The Bar Date will be December 28, 2020 for all prepetition Claims held by governmental entities. With respect to Claims based on an executory contract or unexpired lease rejected prior to the Effective Date, the Bar Date is the later of September 25, 2020 or 30 days after entry of the Confirmation Order or another Order approving such rejection. Should Debtors amend their Schedules in the future to change the amount of any claim or change a claim to disputed, contingent, or unliquidated, “Bar Date” shall also mean, only with respect to those claims affected by the amendment, the later of the date set by the Court described in the preceding sentences, as applicable to the particular Claim, or the date that is 30 days from service of notice of the amendment to the Schedules, provided that if the 30th day falls on a day that is not a Business Day, then the deadline shall be extended to the first Business Day after the 30th day, and any Holder of an amended Claim shall file a proof of claim with the Clerk of the Court by such date or be forever barred from doing so.

1.8. Business Day means any day, other than a Saturday, Sunday, or legal holiday (as that term is defined in Bankruptcy Rule 9006(a)).

1.9. Causes of Action means all claims or causes of action that belong to either Debtor and/or that could have been brought by either Debtor under state or federal law, including the Bankruptcy Code, but not including any actions released under the Plan. Such claims and causes of actions include, but are not limited to, any claim or cause of action under a policy of insurance, Avoidance Actions, and any and all claims, causes of action, counterclaims, demands, controversies, against third parties on account of costs, debts, sums of money, accounts, reckonings, bonds, bills, damages, obligations, liabilities, objections, and executions of any

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nature, type, or description which either Debtor has or may come to have, including, but not limited to, negligence, gross negligence, usury, fraud, deceit, misrepresentation, conspiracy, unconscionability, duress, economic duress, defamation, interference with contractual or business relationships, concealment, misuse of collateral, wrongful release of collateral, failure to inspect, environmental due diligence, negligent loan processing and administration, wrongful setoff, violations of statutes and regulations of governmental entities, instrumentalities and agencies (both civil and criminal), deceptive trade practices, breach or abuse of fiduciary duty, breach of any alleged special relationship, course of conduct or dealing, obligation of fair dealing, obligation of good faith, and obligation of good faith and fair dealing, at law or in equity, in contract in tort, or otherwise, known or unknown, suspected or unsuspected.

1.10. Chapter 11 Case means the above entitled and numbered bankruptcy cases filed by Debtors pursuant to the provisions of Chapter 11 of the Bankruptcy Code.

1.11. Claim means: (i) right of payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii) a right to an equitable remedy for breach of performance if such breach gives rise to a right of payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

1.12. Claimant means a holder of a Claim.

1.13. Class means all of the holders of Claims against Debtors that have been designated as a class in Article III hereof.

1.14. Closing Conditions means that (i) Debtors shall have closed, or be in a position to close immediately, on the Exit Financing, (ii) the Confirmation Order shall have been entered, and (iii) there shall have been no Material Adverse Change.

1.15. Confirmation means the entry by the Bankruptcy Court of the Confirmation Order.

1.16. Confirmation Date means the date of entry by the Court of an order confirming the Plan.

1.17. Confirmation Hearing means the hearing or hearings to be held before the Bankruptcy Court in which Debtors shall seek Confirmation of this Plan.

1.18. Confirmation Order means the Order confirming this Plan, together with any supplements, amendments, or modifications thereto.

1.19. Consummation shall mean that substantially all payments required to be made under the Plan on the Effective Date have been made.

1.20. Contested when used with respect to a Claim, means a Claim against either Debtor that is: (i) listed in either Debtor’s Schedules as disputed, contingent, or unliquidated and as to which a proof of Claim has been timely Filed; (ii) listed in either Debtor’s Schedules as

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undisputed, liquidated, and not contingent and as to which a proof of Claim has been Filed with the Bankruptcy Court, to the extent the proof of Claim amount exceeds the amount or seeks better treatment than that provided for in either Debtor’s Schedules; (iii) not listed in either Debtor’s Schedules and as to which a proof of Claim has been timely Filed; or (iv) the subject of an objection which has been or may be timely Filed and which Claim has not been allowed or disallowed by Final Order.

1.21. Creditor means holder of a Claim as of the Petition Date.

1.22. Cure Claim means the amount owed to cure all defaults under any lease or executory contract, as set forth on Exhibit B to the Disclosure Statement or as determined by agreement of the Debtors and the counterparty to the agreement or by Final Order.

1.23. Debtor means either Old Time Pottery, LLC, a Tennessee limited liability company, or Old Time Pottery Holdings, LLC, a Delaware limited liability company

1.24. Debtors, Old Time Pottery and OTP mean Old Time Pottery, LLC and Old Time Pottery Holdings, LLC, collectively.

1.25. Deficiency Claim means an Allowed Claim of a Creditor, equal to the amount by which the aggregate Allowed Claims of such Creditor exceed the sum of (a) any set off rights of the Creditor permitted under section 553 of the Bankruptcy Code, plus (b) the Secured Claim of such Creditor; provided, however, that if the holder of a Secured Claim or the Class of which such Claim is a member makes the election provided in section 1111(b)(2) of the Code, there shall be no Deficiency Claim in respect of such Claim.

1.26. DIP Agent means Second Avenue Capital Partners, LLC, as Administrative Agent and Collateral Agent.

1.27. DIP Loan means that certain senior secured super-priority financing obtained by the Debtors pursuant to the terms of that certain Debtor-In-Possession Credit Agreement (as amended, supplemented, restated, or otherwise modified from time to time, the “DIP Credit Agreement”) by and among the Debtors, the lenders party thereto and Second Avenue Capital Partners, LLC, as administrative agent and collateral agent for the DIP Lenders substantially in the form attached to the Final Order approving such financing (Docket No, 182), and other DIP loan documents.

1.28. DIP Loan Claims mean any Claim against any Debtor on account of, arising under or relating to the DIP Loan, the other DIP Loan Documents, the DIP Loan Obligations, or the DIP Orders, which includes, without limitation, all “DIP Obligations” thereunder and all Claims for all principal amounts outstanding, interest, fees, and reasonable and documented fees, expenses, costs and other charges of the DIP Agent and the DIP Lenders that have arisen or may arise at any time prior to the occurrence of the Effective Date.

1.29. DIP Lenders means lenders who are a party to the DIP Credit Agreement, which is the basis for the DIP Loan.

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1.30. DIP Obligations means all obligations owing under the DIP Credit Agreement and the other DIP loan documents to the DIP Agent and the DIP Lenders (collectively, and including all “Obligations” as described in the DIP Credit Agreement).

1.31. Disallowed Claim means a Claim against either Debtor, or any portion thereof, (i) that has been disallowed by Final Order, (ii) proof of which has been untimely Filed and as to which no Order of allowance has been entered by the Bankruptcy Court, or (iii) listed as disputed, contingent, or unliquidated in either Debtors’ Schedules and as to which no proof of claim or proof of interest has been timely Filed.

1.32. Disclosure Statement means the Disclosure Statement filed on August 10, 2020 in the Chapter 11 Case pursuant to section 1125 of the Bankruptcy Code to accompany this Plan.

1.33. Effective Date means (i) the first business day of the first month that is more than fifteen (15) days following the date on which the Confirmation Order is entered; or (ii) in the event the Confirmation Order is appealed or a motion to reconsider is filed, any date selected by the Debtors not later than the fifteenth (15th) day after the entry of the Confirmation Order, but not later than the fifteenth (15th) day after entry of a Final Order denying the motion, dismissing such appeal or affirming the Bankruptcy Court's Confirmation Order. In the event there is an appeal of the Confirmation Order, then Debtors shall file notice of the Effective Date with the Court.

1.34. Estate mean the bankruptcy estate of the Debtors created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Case.

1.35. Estimated Claim means any Contested Claim which is estimated in accordance with section 502(c) of the Bankruptcy Code. For purposes of voting and distribution under the Plan, the estimated amount of such Contested Claim shall be deemed the Allowed Amount of such Claim. For the full satisfaction of its Contested Claim and its related Allowed Claim, a Claimant shall have, as its sole and exclusive remedy, the rights to payment provided under this Plan and shall have no other rights or remedies and may not, following Consummation, assert any other right against Debtors, Claimant’s estimated and Allowed Claim being fully satisfied by the Debtors’ payment obligations described in this Plan, and any amount in excess thereof being fully released, voided and discharged by the confirmation of this Plan.

1.36. Exit Financing means the senior secured credit facility to be closed on the Effective Date, which financing will be provided by the existing DIP Lenders or another lender identified prior to the Confirmation Hearing.

1.37. Fee Claim means a Claim for fees and expense reimbursements under sections 330 or 503(b) of the Bankruptcy Code.

1.38. Filed, File and Filing mean filed with the Bankruptcy Court through its electronic filing procedure.

1.39. Final Distribution shall mean the last distribution required by the Plan to be made to any particular Class of Creditors.

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1.40. Final Order means: (i) an order of the Bankruptcy Court as to which the time to appeal, petition for certiorari, or move for re-argument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for re-argument or rehearing, shall then be pending; or (ii) in the event that an appeal, writ of certiorari, re-argument or rehearing thereof has been sought, such order of the Bankruptcy Court shall have been affirmed by the highest court to which such order may be appealed, or certiorari has been denied, and the time to take any further appeal, petition for certiorari or move for re-argument or rehearing shall have expired; provided, however, that the Confirmation Order may be treated as a Final Order at the option of the Debtors if no stay pending appeal has been obtained.

1.41. Governmental Authority means any agency of the United States, any state, or any municipality, including without limitation, any governmental agency designated to collect taxes on behalf of the United States, any state, or any municipality.

1.42. Impaired means the treatment of an Allowed Claim under this Plan unless, with respect to such Claim, either: (i) this Plan leaves unaltered the legal, equitable, and contractual rights to which such Claim entitles the holder of such Claim; or (ii) notwithstanding any contractual provision or applicable law that entitles the holder of such Claim to demand or receive accelerated payment of such Claim after occurrence of a default, Debtors (A) cure any default that occurred before, on or after the commencement of the Chapter 11 Case other than default of the kind specified in section 365(b)(2) of the Bankruptcy Code; (B) reinstate the maturity of such Claim as such maturity existed before such default; (C) compensate the holder of such Claim for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or such applicable law; and (D) do not otherwise alter the legal, equitable or contractual rights to which such Claim entitles the holder of such Claim or Interest.

1.43. Lien means all liens, security interests, claims and encumbrances against any property of the Debtors’ Estate.

1.44. Material Adverse Change means a change in the enterprise value, business operations or financial condition of the Debtors that existed as of the Confirmation Date or any time prior to the Effective Date, which, in the sole judgment of the Debtors, materially and adversely diminishes the value of the business.

1.45. Order means an order or judgment of the Bankruptcy Court or any higher level Court with respect to the Chapter 11 Case.

1.46. Penalty Claims means those Claims referenced in Bankruptcy Code section 726(a)(4), including without limitation any claims for punitive, liquidated or exemplary damages.

1.47. Person includes any individual, partnership, corporation, estate, trust, governmental unit, person, and the United States Trustee.

1.48. Petition Date means June 28, 2020.

1.49. Plan means this Plan of Reorganization, as it may be amended or modified from time to time as permitted herein or in accordance with section 1127 of the Bankruptcy Code.

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1.50. Plan Documents means this Plan, the Disclosure Statement, and any and all other documents necessary to effectuate this Plan, and all exhibits and attachments to any of the foregoing.

1.51. Priority Claim means all Claims entitled to priority under section 507(a)(2)- (a)(7) and (a)(9) of the Bankruptcy Code.

1.52. Pro Rata means in the same proportion that the amount of an Allowed Claim in any Class or Classes of Claims bears to the aggregate amount of all Claims in such Class(es), including in such aggregate amount both the Allowed Claims and any then unresolved Disputed Claims which may apply to that Class(es) of Claims as of the date of any distribution payment made pursuant to this Plan.

1.53. Reorganized Debtors shall mean the Debtors as of the Effective Date, reorganized pursuant to this Plan.

1.54. Retained Assets means all property of the estate of the Debtors that is not expressly abandoned by Debtors pursuant to the Plan, the Confirmation Order or another Final Order of the Court.

1.55. Schedules means those schedules and statements of financial affairs Filed by Debtors under Federal Rule of Bankruptcy Procedure 1007 on July 29, 2020 by Debtor Old Time Pottery, LLC (Docket Nos. 219) and on July 30, 2020 by Debtor Old Time Pottery Holdings, LLC Docket No. 63, Case No. 3:20-bk-03139)), as same may be amended from time to time.

1.56. Secured means an Allowed Claim that is secured by a properly perfected, enforceable lien on or security interest in property in which the Estate has an interest, or that is subject to setoff under section 553 of the Bankruptcy Code, to the extent of the value of a Claimant's interest in Estate's interest in such property, or to the extent of the amount subject to setoff, as the case may be.

1.57. Taxes means and includes all federal, state, county and local income, ad valorem, excise, stamp and other taxes of any type or nature whatsoever.

1.58. Tax Claims mean any and all Secured or Priority Claims of any Person for the payment of any Taxes (a) accorded a priority pursuant to section 507(a)(8) of the Bankruptcy Code (but excluding all Claims for post-petition interest and prepetition and post-petition penalties), or (b) secured by valid Liens on assets of the Debtors existing on the Confirmation Date (but excluding all Claims for post-petition interest and post-petition penalties).

1.59. Unsecured Claim means any Claim that is not an Administrative Claim, a Priority Claim, a Priority Tax Claim, or a Secured Claim, including but not limited to: (a) Claims under executory contracts and unexpired leases that have heretofore been rejected, that are rejected under this Plan or that may be rejected in accordance with the terms of this Plan (but not including administrative expenses arising from an executory contract or unexpired lease which has heretofore been rejected); (b) Claims for unpaid wages or benefits (including claims for vacation, sick and holiday pay) to the extent not entitled to be Priority Claims as provided herein; and (c) any other obligations, liabilities, damages or any other Claim held against either

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Debtor of every type and nature whatsoever incurred on or before the date of filing of this Chapter 11 Case.

ARTICLE II TREATMENT OF NON-CLASSIFIED CLAIMS

Administrative Claims and Priority Tax Claims are not classified under section 1123(a)(1) of the Code for purposes of voting or receiving distributions under the Plan.

2.1. Administrative Claims.

(a) Amounts Due to the DIP Lenders. As of the Effective Date, all amounts owed to the DIP Lenders for DIP Obligations shall be paid in full, the DIP Loan Claims shall be Allowed and deemed to be Allowed Claims in the full amount outstanding under the DIP Credit Agreement and the other DIP Loan documents, including for any amounts constituting DIP Obligations thereunder. Except if a holder of a DIP Loan Claim agrees to a less favorable treatment of such Claim, on the Effective Date, in full satisfaction, settlement, discharge and release of, and in exchange for, such DIP Loan Claims, (i) all DIP Loan Claims will be indefeasibly paid and satisfied in full in Cash or, with the consent of such Holder of a DIP Loan Claim , deemed outstanding under a post-Effective Date credit facility or loan agreement; and (ii) all issued and undrawn letters of credit shall be replaced or cash collateralized in an amount to be determined by the DIP Agent in its sole discretion. Except as otherwise expressly provided for under the DIP Loan documents, upon indefeasible payment and satisfaction in full of all DIP Loan Claims, the DIP Loan documents and all related loan documents, the existing commitments under the DIP Loan and all Liens and security interests granted to secure the DIP Loan Claims, will be immediately terminated, extinguished and released, and the DIP Agent will promptly execute and deliver to the Reorganized Debtors such instruments of termination, release, satisfaction and/or assignment (in recordable form) as may be reasonably requested by the Reorganized Debtors to effectuate the foregoing; provided, that DIP Loan Claims shall not be deemed satisfied as set forth herein until the DIP Agent has received a countersigned payoff letter in form and substance satisfactory to the DIP Agent in its sole discretion.

(b) General Allowed Administrative Claims. Each holder of an Administrative Claim, except as otherwise set forth in sections (a) (c), (d), and (e) of this section 2.1 of the Plan shall receive either: (i) with respect to Administrative Claims which are not Contested by the Debtors, the amount of such holder’s Administrative Claim in cash on the Effective Date; (ii) with respect to Administrative Claims which become Allowed Claims after the Effective Date, the amount of such holder’s Allowed Claim in one cash payment as soon as practicable after such claim becomes an Allowed Administrative Claim; or (iii) such other treatment agreed upon by the Debtors and such holder; provided, however, that any such Administrative Claim representing a liability incurred in the ordinary course of business after the Petition Date by the Debtors shall be paid in accordance with the terms and conditions of the particular transaction giving rise to such liability and any agreements relating thereto. Any Person that asserts an Administrative Claim that is due but not paid on the Effective Date shall be required to file with the Court an application for allowance and payment of such asserted Administrative Claim and to serve notice thereof on all parties entitled to such notice. Any such claims must be filed within sixty (60) days after the Effective Date. The failure to file timely the

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application as required under this section 2.1(b) of the Plan shall result in the Claim being forever barred and discharged. An Administrative Claim with respect to which an application has been properly Filed pursuant to this section 2.1(a) of this Plan and to which no objection has been filed or an objection has been filed but overruled by Final Order of the Bankruptcy Court, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order.

(d) Administrative Tax Claims. Each holder of an Administrative Claim for Taxes for which either Debtor is responsible and any other Taxes of either Debtor payable pursuant to section 507(a)(1) of the Bankruptcy Code shall be paid the Allowed Amount of such holder's Claim in cash, in full, on the latest of: (i) the Effective Date, (ii) if Contested or unknown to Debtors, the date such Claim is Allowed by Final Order, or (iii) the date such payment is due under applicable law. Any Person that asserts an Administrative Claim for Taxes due prior to, but that is not paid on the Effective Date, shall be required to file with the Court an application for payment of such asserted Administrative Claim and to serve notice thereof on all parties entitled to such notice. Any such claims must be filed within sixty (60) days from the Effective Date. The failure to file timely the application as required under this section 2.1(c) of the Plan shall result in the Claim being forever barred and discharged. An Administrative Claim for Taxes with respect to which an application has been properly Filed pursuant to this section 2.1(c) of this Plan and to which no objection has been filed or an objection has been Filed but overruled by the Court, shall become an Allowed Administrative Claim to the extent such claim is allowed by Final Order.

(e) Payment of Fees to U.S. Trustee. All fees payable under 28 U.S.C. § 1930 shall be paid in cash in full when due unless the Office of the United States Trustee and the Debtors agree otherwise.

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2.2. Secured and Priority Tax Claims.

(b) Liens Arising from Secured and Priority Tax Claims. All Pre- Petition liens arising from Secured Tax Claims and Priority Tax Claims shall continue until such Claims are paid in full.

ARTICLE III DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS

Pursuant to section 1123 of the Bankruptcy Code, the Debtors designates the following Classes of Claims and Interests.

3.1. Class 1 – Priority Claims Other Than Priority Tax Claims. Class 1 consists of all Allowed Priority Claims against the Debtors, excluding any such Claims that were paid prior to the Effective Date. This class of claims is not Impaired under the Plan.

3.2. Class 2 - Secured Claims. This Class consists of separate subclasses for any Allowed Secured Claim against either of the Debtors, other than the amounts owed to the DIP Lenders. Debtors are not aware of any Allowed Claims in this Class. This Class of claims is Impaired under the Plan.

3.3. Class 3 - Unsecured Convenience Claims. This Class consists of all Allowed Unsecured Claims against either of the Debtors in an amount not greater than Two Thousand Dollars ($2,000.00) and any other Allowed Unsecured Claims electing to participate in this Class. This Class of Claims is not Impaired under the Plan.

3.4. Class 4 – Unsecured Claims of Insiders. This Class consists of all Allowed Claims owing to any Insiders. This Class includes the debt owed by Debtors to Comvest Investment Partners IV, L.P. in the principal amount of $5,150,000. This Class of Claims is Impaired under the Plan.

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3.5. Class 5 – Unsecured Claims Not in Class 3 or Class 4. This Class consists of all Allowed Unsecured Claims against the Debtors, other than those in Class 3 and Class 4. This Class of Claims is Impaired under the Plan.

3.6. Class 6 - Ownership Interests in the Debtors. This Class consists of ownership interests in the Debtors. This class of claims is not Impaired under the Plan

ARTICLE IV PROVISIONS FOR SATISFACTION OF CLASSIFIED CLAIMS

The Claims as classified in Article III hereof shall be satisfied in the manner set forth in this Article IV. The treatment of, and the consideration to be received by each Person holding an Allowed Claim against the Debtors pursuant to this Plan shall be in full settlement, release, and discharge of their respective Allowed Claims against the Debtors.

4.1. Class 1 -- Priority Claims Other Than Priority Tax Claims. Each Person holding a Class 1 Claim shall be paid the Allowed Amount of such Claim in cash, in full, on the latest of: (i) the Effective Date; (ii) the date such Claim is allowed by Final Order; or (iii) the date such payment is due under applicable law. Each Contested Priority Claim shall become an Allowed Priority Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order. This Class is not Impaired.

4.2. Class 2 -- Other Secured Claims. Except to the extent that a Class 2 Claimant may otherwise agree, each holder of an Allowed Secured Class 2 Claim shall be fully satisfied, at the Debtors’ option, by one of the following:

(a) Note Option: Each holder of a Class 2 Claim shall retain all Liens securing such Claim until such Claim is fully paid or until such holder otherwise agrees. The terms and provisions relating to such Liens shall be set forth in appropriate documents agreed to between the parties, or, in the event of disagreement, as directed by the Court. The obligated Debtor or Debtors shall execute a note payable to the Class 2 Claimant and deliver it to the holder of such Claim, along with an appropriate mortgage and/or security agreement, no later than the tenth (10th) Business Day after the later of the Effective Date or the date that such Claim becomes an Allowed Claim. The initial principal amount of each Class 2 Claim shall be equal to the lesser of (i) the amount which the Court shall determine is equal to the value of the assets securing such Claim or (ii) the amount of the Class 2 Claim. To the extent that any Creditor has a Deficiency Claim in addition to its Class 2 Claim, the Deficiency Claim shall be treated under this Plan as an Unsecured Claim against the Debtors. Any note executed pursuant to this section of the Plan shall bear interest at the rate of five (5.0%) percent per annum and be paid in annual equal installments in the amount required to fully pay the note in seven annual payments, with the first such payment being on February 1, 2020.

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shall be paid in cash, in full, on or before the forty-fifth (45th) Business Day after the Effective Date or as shall otherwise be agreed to in writing by the holder of such Claim, and all other defaults with respect to such Claim required to be cured by Section 1124(2) of the Code shall be cured on or prior to the forty-fifth (45th) Business Day after the Effective Date as shall be agreed to in writing by the holder of such Claim, and from and after the date of such cure any previously accelerated indebtedness shall be reinstated and any default rate of interest shall no longer apply, but shall be deemed waived (not forgiven). Each Class 2 claimant whose claim is unimpaired pursuant to the terms hereof shall retain such lien as such Creditor held prior to the Petition Date. After the reinstatement of its Class 3 Claim, each Class 2 Creditor will receive payments in accordance with the instruments governing such Claim or as such Creditor may otherwise in writing agree. Furthermore, after such unimpairment, each Class 2 Creditor will be entitled to exercise all rights, privileges, and remedies available to it under the instruments governing its Class 2 Claim in accordance with the terms for such instruments, without need for any application to or order of the Court.

(c) Cash Option: The obligated Debtor or Debtors may also elect, at any time on or before the Effective Date, to pay a Class 2 Secured Claim in full, in cash, on or promptly after the Effective Date.

(e) Release of Lien: Promptly upon the satisfaction of any Allowed Class 2 Claim, the holder of such Class 2 Secured Claim shall execute all instruments and documents necessary to release its Lien securing such Claim or note. If the holder of a satisfied Claim fails to record documents necessary to release all such Liens, then the Debtors are hereby authorized to file all such releases.

4.3. Class 3 - Unsecured Convenience Claims. Each holder of an Allowed Class 3 Claim in an amount no greater than Two Thousand Dollars ($2,000.00) will be paid in full cash on the Effective Date of the Plan. Any holder of an Allowed Class 3 Claim in excess of $2,000.00 may elect to receive $2,000.00 on the Effective Date in full satisfaction of its claim. Any holder of an Unsecured Claim in excess of $2,000.00 electing this option must notify Debtors’ counsel by no later than ten (10) days after entry of the Confirmation Order of its intent to participate in this Class. Any Person or entity having a Contested Class 3 Claim shall be entitled to payment only after that Claim becomes an Allowed Claim pursuant to a Final Order.

4.4. Class 4 -- Claims of Insiders. Except to the extent that a Class 4 Claimant may otherwise agree, each holder of an Allowed Class 4 Claim shall be fully satisfied in the same manner as Allowed Class 5 Claims are satisfied.

4.5. Class 5 -- Unsecured Claims other than Claims in Class 3 or 4. Class 5 Claims shall be satisfied as follows:

(a) Option 1: For all holders of Allowed Claims in Class 5 who do not expressly elect to participate in Option 2 as set forth in section 4.5(b) of this Plan,

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Debtors shall make annual payments on Allowed Class 4 and 5 Claims, commencing on March 1, 2021 and continuing on March 1 of each year thereafter until March 1, 2025, when all amounts remaining due on Allowed Class 4 and 5 Claims shall be paid in full. Interest will accrue on each Allowed Class 4 and 5 Claim from the later of the Effective Date or the date on which the Claim becomes an Allowed Claim at the rate of four percent (4.0%) per annum. The payment due on March 1, 2021 shall be in the amount of ten (10.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2020 on the amount of the Allowed Claim. The payment due on March 1, 2022 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2021 on the amount of the Allowed Claim. The payment due on March 1, 2023 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2022 on the amount of the Allowed Claim. The payment due on March 1, 2024 shall be in the amount of twenty (20.0%) percent of the principal amount of such Allowed Claim together with accrued interest through December 31, 2023 on the amount of the Allowed Claim. All amounts remaining due on Allowed Class 4 and 5 Claims shall be paid in full on March 1, 2025. The Debtors may prepay in whole or in part at any time without penalty, and any partial prepayments made shall reduce and be a credit against any mandatory payments coming due after the time of the prepayment, provided however, that any such prepayments must be made on a Pro Rata basis to the holders of all Allowed Class 4 and Class 5 Claims. Any Person or entity having a Contested Class 5 Claim shall be entitled to payment only after that Claim becomes an Allowed Claim pursuant to a Final Order.

(b) Option 2: Holders of an Allowed Claims in Class 5 may expressly elect to receive on March 1, 2021 in full satisfaction of the Allowed Claim sixty percent (60%) of the Allowed Claim up to a maximum amount of Twenty-Five Thousand Dollars ($25,000.00). Holders of Allowed Claims in excess of $41,666.00 who elect to participate in this Class will receive on March 1, 2021 Twenty Five Thousand Dollars ($25,000.00) in full satisfaction of the Allowed Claim. Any holder of an Unsecured Claim electing this option must notify Debtors’ counsel by no later January 31, 2021 of its intent to participate in Option 2. Any Person or entity having a Contested Class 5 Claim shall be entitled to payment only after that Claim becomes an Allowed Claim pursuant to a Final Order.

4.6. Class 6 - Ownership Interests in the Debtors. This Class consists of the ownership interests in Debtors. The interests in the respective Debtors will continue to be held by the same Persons in the same amount as in existence as of the Petition Date.

ARTICLE V DESIGNATION OF THE CLASSES OF CLAIMS IMPAIRED UNDER THIS PLAN

5.1. Voting Classes. For purposes of Plan solicitation, Classes 2 and 5 are Impaired, Non-Insider Classes and, therefore, are entitled to cast ballots on this Plan.

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5.2. Non-Voting Classes. For purposes of Plan solicitation, Classes 1 and 3 are not Impaired and thus not entitled to vote. Class 4 is Impaired, but ineligible to vote because it consists of Insiders.

ARTICLE VI MEANS FOR IMPLEMENTATION OF THE PLAN

6.1. Payments due on the Effective Date and Thereafter. The Debtors will use proceeds from the Exit Financing to make the payments due on the Effective Date, and the Debtors have made changes to their business including renegotiated lease terms, lease rejections, staff reductions and other changes that are expected to generate cash flow sufficient to make the payments due under the Plan and on the Exit Financing on an on-going basis. The Exit Financing will also provide the Reorganized Debtors with access to the working capital needed to operate their business successfully. The Exit Financing will be secured by a Lien on substantially all assets of the Debtors.

6.2. Debtors’ Obligation to Close. Debtors will have no obligation to proceed with Consummation of the Plan unless the Closing Conditions are satisfied. If Debtors elect not to proceed with Consummation of the Plan, they shall file with the Court a notice of the election and this Chapter 11 Case shall proceed as if no plan of reorganization had been filed by Debtors prior to that date.

6.3. Causes of Action. Debtors will be responsible for evaluating, funding and pursuing any or none of the Causes of Action based on its reasonable business judgment and shall fund such amounts as the Debtors, in their sole and absolute discretion, shall deem appropriate and reasonable.

6.4. Authority for Settlement of Causes of Action. After the Effective Date, consistent with the terms of the DIP Loan, Debtors shall, in their sole and absolute discretion, be authorized to compromise and settle any of the Causes of Action, without Court approval or notice to any party, at any time, and for any consideration that Debtors believe to be in their best interest (and not necessarily in the best interest of the Creditors) including, inter alia, the right to permit the Debtors to accept zero-cash or non-cash benefits.

6.5. Recovery from Causes of Action. Any recovery from any Cause of Action, including Avoidance Actions, either from litigation or settlement, will be used by the Reorganized Debtors for operations and/or to fund the payments due under the Plan.

6.6. Retention of the Debtors’ Property. On the Effective Date, all property of each of the Debtors shall vest in that entity as a Reorganized Debtor, free and clear of all Liens, claims and encumbrances except for those Liens expressly created or preserved under this Plan.

ARTICLE VII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

7.1. General Rejection of Executory Contracts. All leases of real or personal property and all other executory contracts to which either Debtor is a party that are not

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specifically identified in a Filing to be an agreement that the Debtors intend to assume shall be rejected. Unless otherwise specified in a Filing with the Bankruptcy Court, the effective date of the rejection of each of these contracts shall be the Effective Date. Debtors reserve the right to alter and amend their list of assumed contracts up to the Confirmation Date.

7.2. Procedure for Resolving Disputed Cure Claims. Exhibit B to the Disclosure Statement sets forth a non-exhaustive list of executory contracts and unexpired leases that Debtors may assume. Should Debtors choose to assume any of the leases or contracts identified on Exhibit B to the Disclosure Statement, Debtors assert that the Allowed Cure Claim is the amount stated on that Exhibit B or such other amount as may be agreed to by the Debtors and the counterparty to the agreement. For any lease or contract not identified on Exhibit B to the Disclosure Statement, Debtors assert that no cure amount is owed or required. Any party to an unexpired lease or executory contract that asserts that Debtors defaulted under that contract or lease and whose cure amount is not stated on Exhibit B or who disagrees with the proposed cure amount set forth on Exhibit B to the Disclosure Statement shall be required to File with the Court an application for allowance and payment of Cure Claim, identifying the amount allegedly required to cure any such defaults in accordance with section 365(b)(1)(A) of the Code. Any such application must be filed by no later than 21 days after the Confirmation Date. The failure to file timely the application as required under this section 7.2 of the Plan shall result in the Cure Claim being forever barred and discharged; the Cure Claim related to the executory contract shall be deemed to be the greater of zero or the amount proposed by the Debtors on Exhibit B to the Disclosure Statement, if any; and the related executory contract shall be deemed assumed as of the Effective Date. Each Contested Cure Claim shall become an Allowed Cure Claim only upon entry of, and only to the extent such claim is allowed by, a Final Order. All Allowed Cure Claims shall be paid promptly unless otherwise agreed by a counterparty.

7.3. Debtors’ Right to Rescind Notice of Assumption. Notwithstanding anything herein to the contrary, the Debtors shall not be obligated to assume a lease or other executory contract if it disagrees with any Cure Claim Amount determined by Final Order. In the event that the Debtors and the other party to an agreement or lease cannot reach agreement on the Allowed Cure Claim, and the counterparty Files an application as required in section 7.2 hereof, then the Debtors shall have a period of thirty (30) days after the date on which the order establishing the Cure Claim becomes a Final Order in which to rescind their notice of assumption of the lease or executory contract. If the Debtors File a notice of their intent not to assume any such lease or contract during this period, then the contract shall be rejected upon Filing of the notice, and the other party to any rejected contract shall be entitled to file a Claim for damages arising from the rejection, if any.

7.4. Assumption or Rejection of Executory Contracts Prior to Effective Date. Nothing in this Plan precludes the Debtors from Filing at any time prior to the Confirmation Date a separate motion or notice to assume or reject one or more leases or executory contracts, which motions or notice may require resolution of the Cure Claim prior to the deadlines set forth in this Article VII of the Plan.

7.5. Claims for Damages. Each Person who is a party to an executory contract or release rejected pursuant to Article VII the Plan shall be entitled to File, not later than thirty (30) days after the entry of the Confirmation Order, a Claim for damages alleged to arise from the

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rejection of the executory contract or lease to which such Person is a party. Any such Claims that ultimately become Allowed Claims shall be treated as Class 5 Unsecured Claims.

ARTICLE VIII PROVISIONS FOR THE PAYMENT, SETTLEMENT, AND ADJUSTMENT OF CLAIMS

8.1. No Distributions Pending Allowance or Estimation of Claims. No payments or distributions shall be made with respect to all or any portion of a Contested Claim unless and until such Claim becomes an Allowed Claim as determined by Final Order.

8.2. Deadline for Objections to Claims. Debtors or any other party in interest may file with the Bankruptcy Court, within 120 days after the Effective Date, which date may be extended by Bankruptcy Court order, a written objection to the allowance or classification of any Claim in any Class, which objection shall be served upon the Claimant and any other known parties in interest. The failure to object to or to examine any Claim for the purposes of voting on this Plan shall not be deemed a waiver of such party's right to object to, or re-examine, the Claim in whole or in part within the above-described time period.

8.3. Automatically Disallowed Claims. With respect to any Claim for which the Debtors have insurance coverage, the Claim will be treated as an Allowed Claim only to the extent that the Holder of the Claim can establish that such Claim is not recoverable to any extent under the Debtors’ insurance. Unless the Holder obtains a Final Order establishing that the Claim is not recoverable to any extent under the Debtors’ insurance, such Claim is automatically disallowed and will be entitled to no distribution.

8.4. Distribution Address and Mailing Method. Any distribution or payment to a Creditor shall be sent by first class mail to the Creditor's address indicated on the proof of claim filed by that Creditor in the Case or, if no proof of claim has been filed, to that Creditor's most recent address indicated on the Debtors’ Schedules or known to Debtors. If a Creditor holds an Allowed Claim by virtue of a transfer of such Claim pursuant to Rule 3001 of the Federal Rules of Bankruptcy Procedure, then distributions to the holder of such Claim shall be sent to the address set forth in evidence of the transfer filed with the Bankruptcy Court. Creditors may change the address to which distributions are sent through amendment of their proof of claim or written notice delivered to Debtors’ counsel. Creditors are responsible for keeping the Debtors informed of their current address for receipt of distributions or other payments under the Plan.

8.5. Unclaimed Property/Forfeit Distributions. If any distribution remains unclaimed and/or uncashed for a period of ninety (90) days after it is sent by Debtors, then the Creditor to whom such distribution was sent will be deemed to have forfeited the distribution and all future distributions, and such person’s Claim shall no longer be deemed to be Allowed, but rather, such Claim shall be deemed disallowed and expunged for all purposes, and such person shall be deemed to have no further Claim in respect of such distribution and shall not participate in any further distributions under this Plan. Likewise, if any Creditor’s distribution is returned as undeliverable, no further distributions to such Creditor shall be made and such Creditor shall be deemed to have forfeited any and all further distributions. Any undeliverable or forfeit distribution shall be returned to the Debtors to be used in accordance with the terms of this Plan.

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8.6. Precluded Distributions. No distribution shall be made in violation of Bankruptcy Code § 502(d) (to a Person or transferee liable for recoverable property for an avoidable transfer). Debtors shall notify each affected Creditor of any contention that Bankruptcy Code § 502(d) prohibits any distribution to such Creditor. If such notice is given, the Claim held by such creditor will be treated as a Disputed Claim hereunder.

8.7. Treatment of Contingent or Unliquidated Claims. Until such time as a contingent Claim becomes fixed and Allowed, such Claim shall be treated as a Contested Claim for purposes related to voting, allowance, and distributions under this Plan. Upon request by Debtors or any other party in interest, the Bankruptcy Court shall, in a summary proceeding for each such contingent Claim or unliquidated Claim, by estimation determine the allowance of each such contingent or unliquidated Claim for purposes of voting on this Plan.

8.8. Payment Dates. Whenever any payment or distribution to be made under the Plan shall be due on a day other than a Business Day, such payment or distribution shall instead be made, without interest, on the next business day.

8.9. Nominal Distributions. With respect to any distribution prior to the Final Distribution, if the Holder of an Allowed Claim would receive less than $50.00, the Debtors may choose not to distribute such lesser amount to such Holder, but may instead defer the distribution thereof until the cumulative amount to be distributed to such Holder at any subsequent distribution is $50.00 or more. No interest on any such deferred amount shall be paid to such Holder. If the Final Distribution to the Holder of an Allowed Claim would be less than $25.00, the Debtors are not required to make such distribution, and such distribution is deemed waived.

ARTICLE IX RETENTION AND PURSUIT OF CAUSES OF ACTION

9.1. Preservation of Claims and Causes of Action. Debtors retain and reserve all Causes of Action, which include Avoidance Actions, for pursuit, settlement or abandonment by Debtors post-confirmation and after the Effective Date. It is the intent of the Debtors that this reservation of claims shall be as broad as permitted by applicable law and shall include all claims, whether or not disclosed in the Debtors’ Schedules or the Disclosure Statement.

Unless an Avoidance Action or other Cause of Action against a Creditor or other Person is expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order, Debtors expressly reserve such Avoidance Action or Cause of Action for later adjudication (including, without limitation, Avoidance Actions and Causes of Actions not specifically identified or of which Debtors may presently be unaware or which may arise or exist by reason of additional facts or circumstances unknown to Debtors at this time or facts or circumstances which may change or be different from those which Debtors now believe to exist) and, therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches shall apply to such Avoidance Action or Cause of Action upon or after the Confirmation or consummation of the Plan based on the Disclosure Statement, the Plan or the Confirmation Order, except where such Avoidance Action or Cause of Action has been expressly released in the Plan or other Final Order. In addition, Debtors expressly reserve the right

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pursuant to the Bankruptcy Code to assert or adopt as a defense any claims in any lawsuit in which either Debtor is a defendant or an interested party, irrespective of whether a Cause of Action has been commenced based upon such claim.

Except as otherwise provided in the Plan or Confirmation Order, any person to whom the Debtors have incurred an obligation (whether on account of services, purchase or sale of goods or otherwise), or who has received services from either Debtor or a transfer of money or property of either Debtor, or who has transacted business with either Debtor, or leased equipment or property from either Debtor should assume that such obligation, transfer, or transaction will be reviewed by Debtors subsequent to the Effective Date and will, if appropriate, be the subject of a Cause of Action after the Effective Date, whether or not (i) such Person has filed a proof of Claim in this Chapter 11 Case; (ii) such Person’s proof of Claim has been objected to by Debtors; (iii) such person’s Claim was included in Debtors’ Schedules; or (iv) such Person’s scheduled Claim has been objected to by Debtors or has been identified by Debtors as Disputed, contingent, or unliquidated. Except as expressly provided in the Plan, the Confirmation Order shall not bar Debtors by res judicata, collateral estoppel or otherwise from collecting, prosecuting or defending any matter, Avoidance Action or Cause of Action.

The Plan also retains and reserves for pursuit by Debtors all Avoidance Actions arising under Chapter 5 of the Bankruptcy Code. Known Avoidance Actions include claims against Designer Greetings arising from their former business relationship and preference claims pursuant to section 547, claims for turnover of funds payable to the estate, claims for avoidance of prepetition overpayments or improper payments, including as fraudulent transfers pursuant to section 548, and claims for avoidance of post-petition overpayments or other unauthorized post- petition transfers pursuant to section 549 of the Bankruptcy Code. Debtors shall have the widest possible latitude in deciding whether or not to pursue any possible Cause of Action, including without limitation any preference or other Avoidance Action.

All creditors identified in Questions 3 and 4 to Debtors’ Statement of Financial Affairs, filed at Docket No. 219 in this Chapter 11 Case, which includes all creditors receiving payments from either Debtor in the 90 days preceding the Petition Date and insiders receiving payments in the year preceding the Petition Date that aggregated at least $6,825.00, may be the defendant of an Avoidance Action or other Cause of Action, and Debtors reserve and retain the right to pursue any and all such claims after the Confirmation Date. These identified claims are in no way intended to be an exhaustive list, and Debtors may add to or amend the identified claims after the Confirmation Date and reserves its right to do so.

Each creditor and party in interest is advised to review closely the Plan, the Disclosure Statement, and Debtors’ filed Schedules and Statement of Financial Affairs to determine whether any Cause of Action or Avoidance Action may be pursued against it. Avoidance Actions to recover preferences pursuant to section 547 of the Bankruptcy Code may exist against every person who received a payment from either Debtor within ninety (90) days prior to the Petition Date. The failure to list or expressly identify in the Plan or the Disclosure Statement any potential or existing Avoidance Action or Cause of Action is not intended to limit the rights of Debtors to pursue any Avoidance Action or Cause of Action.

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Without limiting the foregoing, Debtors also retain and reserve the following types of Causes of Action: (i) collection of accounts receivable; (ii) collection of loans receivable; and (iii) release of excess cash reserves by insurance companies and release of any other deposits.

9.2. Pursuit and Settlement of Causes of Action. Debtors retain all rights to commence and pursue, as appropriate, any and all Causes of Action and Avoidance Actions, whether arising before or after the Petition Date, in any court or other tribunal including, without limitation, in an adversary proceeding filed in this Chapter 11 Case. Debtors have broad discretion to pursue, settle or abandon Causes of Action and Avoidance Actions; however, the Debtors shall not be required to pursue Causes of Action or Avoidance Actions and may in their sole discretion determine not to pursue any Causes of Action or Avoidance Action. After the Effective Date, Debtors shall have the exclusive right, authority, and discretion to institute, prosecute, abandon, settle, or compromise any and all such Causes of Action and Avoidance Actions without the consent or approval of any third party and without any further order of Court. Any settlement may be for any consideration that Debtors believe to be in their best interest (and not necessarily in the best interest of the creditors) including, inter alia, the right to permit Debtors to accept zero-cash or non-cash benefits. Any creditor determined to have received a transfer that is voidable pursuant to sections 544, 547, 548, 549, and/or 550 of the Bankruptcy Code or any other applicable law shall be required to remit to Debtors the determined amount of the avoided transfer prior to receiving any distribution under the Plan.

ARTICLE X EFFECT OF CONFIRMATION, DISCHARGE, INJUNCTION AND RELEASES

10.1. Vesting of Property. Except as otherwise expressly provided in the Plan, Confirmation of the Plan shall vest all of the property of the Debtors’ Estate into the Debtor that owns that property.

10.2. Property Free and Clear. Except as otherwise provided in the Plan, all property dealt with by the Plan shall be free and clear of all claims, Liens and interests of any party as of the Confirmation of the Plan. This Plan will evidence the release of any and all Liens or encumbrances against all property dealt with by the Plan, unless such Lien or encumbrance is specifically retained in the Plan.

10.3. Legal Binding Effect. The provisions of this Plan shall bind all Claimants, whether or not they accept this Plan or whether or not their Claim is Impaired.

10.4. Effect on Third Parties. Nothing contained in the Plan or in the documents to be executed in connection with the Plan shall affect any Creditor’s or party in interest’s rights against any third party, except as otherwise expressly provided in this Plan and except that any Creditor or party in interest may only recover from any third-party guarantor or co-obligor the amount owed to it in excess of the amount to be paid on the underlying obligation pursuant to the Plan.

10.5. Release of Claims. The consideration to be distributed under the Plan shall be in exchange for, and in complete satisfaction and release of, all Claims against Debtors or any of

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their assets or properties, including without limitation any Claim accruing after the Petition Date and prior to the Effective Date.

10.6. Permanent Injunction. Except as otherwise expressly provided in, or permitted under, this Plan, the Confirmation Order shall provide, among other things, that all Creditors who have held, hold or may hold Claims that existed prior to the Effective Date and all Persons who have had any dealings with either of the Debtors, are permanently enjoined on and after the Effective Date against the: (i) commencement or continuation of any judicial, administrative, or other action or proceeding against either Debtor or any of its assets or owned entities on account of Claims against either Debtor, or on account of claims released pursuant to section 10.5 of the Plan; (ii) enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree, or order against either Debtor or any assets or property of same; or (iii) creation, perfection or enforcement of any encumbrance of any kind against either Debtor arising from a Claim. This provision does not enjoin the prosecution of any claims that arise on or after the Effective Date nor does it enjoin the determination in the Bankruptcy Court of the Allowed Amount of any Claims that arose prior to the Effective Date. Parties asserting entitlement to payment of Administrative Expenses incurred Prior to the Confirmation Date and Holders of Claims shall be permanently enjoined from asserting any Claim against the Debtors or their Retained Assets based upon any act or omission, transaction or other activity that occurred prior to the Confirmation Date, except as otherwise provided in the Plan, whether or not a proof of claim or interest was filed and whether or not such Claim or Interest is allowed under section 502 of the Bankruptcy Code.

10.7. Exculpation. Except as otherwise provided in the Plan or Confirmation Order, the Debtors, the Committee, the DIP Lenders, the DIP Agent, the equity holders of Old Time Pottery Holdings, LLC and each of their officers, members, and all their professionals shall neither have nor incur any liability to any Person for any act taken or omitted to be taken (exclusive of an act constituting fraud, gross negligence or intentional misconduct) in connection with or related to this Chapter 11 Case, including without limitation actions related to the formulation, preparation, dissemination, implementation, administration, Confirmation or consummation of the Plan, the DIP Loan, the Disclosure Statement or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan. Notwithstanding anything herein to the contrary, neither this Plan nor the Confirmation Order affects any claims or causes of action against current or former officers, members or employees of the Debtors arising prior to or as of the Petition Date under 11 U.S.C. §§ 544, 547, 548, 549 or 550.

10.8. Releases. The Debtors, the Committee, the DIP Lenders, the DIP Agent, the equity holders of Old Time Pottery Holdings, LLC and all of their respective officers, directors, and employees are released and discharged from any and all claims, lawsuits or demands that have been, could have been, or which may in the future be asserted by the Debtors, by any creditor or by any other Person for any act or omission in connection with or arising out of transactions, relationships, or dealings relating to the negotiation or implementation of the Plan, the DIP Loan the settlement of Claims and releases incorporated in the Plan, the solicitation of votes for or confirmation of the Plan, any Pre-Petition or Post-Petition Claim of any kind, and any other matter pertaining to the administration or existence of Debtors’ Chapter 11 Case, except for willful misconduct or gross negligence as determined by a Final Order.

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ARTICLE XI MISCELLANEOUS PROVISIONS

11.1. Post-Confirmation Security Interests. Secured Class 2 shall retain their security interests without the need for execution of new security agreements or financing statements, and as of the Confirmation Date, existing security and other agreements between either Debtor and creditors holding claims in Class 2 shall be of no force or effect, and the terms of the Plan shall supersede any such agreements and shall control the lending relationship between either Debtor and its lenders. Notwithstanding this provision, Debtors shall have the option of proposing form documents, which shall be provided to Class 2 not less than five days prior to the Confirmation Hearing. Any Class 2 creditor that fails to notify Debtors’ counsel of objections to the proposed security documents by no later than the date for objections to confirmation of the Plan shall be deemed to have agreed to and executed the documents, and the terms and conditions of the proposed documents shall control. If the parties cannot agree on the terms of the security documents, then the determination shall be made by the Court. Should Debtors choose not to exercise this option, the terms of the Plan shall control the lending relationship between Reorganized Debtors and the Class 2 lender, provided however that all properly perfected pre-petition security interests shall continue to be valid in accordance with applicable non-bankruptcy law.

11.2. Request for Relief under Section 1129(b). In the event any Impaired Class of Claims shall fail to accept this Plan in accordance with section 1129(a) of the Bankruptcy Code, Debtors request the Bankruptcy Court to confirm this Plan in accordance with the provisions of section 1129(b) of the Bankruptcy Code.

11.3. Security Deposits. To the extent Debtors have posted security deposits (with utilities or otherwise) prepetition, those amounts may be set off against Allowed Claims only upon the written consent of Debtors, as set forth in this Plan or upon entry of a Final Order authorizing such offset. To the extent Debtors have posted security deposits (with utilities or otherwise) Post-Petition, the deposits shall be returned to Debtors or otherwise applied as directed by Debtors upon its request.

11.4. Quarterly Fees. All fees payable under 28 U.S.C. § 1930, for quarters ending prior to the entry of the Order closing this Chapter 11 Case.

11.5. Confirmation Order and Plan Control. To the extent the Confirmation Order and/or the Plan is inconsistent with the Disclosure Statement, any other agreement entered into between the Debtors and any third party, the Plan controls the Disclosure Statement and any such agreements and the Confirmation Order (and any other Orders of the Court) shall be construed together and consistent with the terms of the Plan.

11.6. Consent to Jurisdiction. By accepting any distribution or payment under or in connection with the Plan, by filing any Proof of Claim, by filing any Cure Claim or objection to the assumption or assignment of any assumed contract, by voting on the Plan, or by entering an appearance in the Case, all Creditors and other parties in interest have consented, and will be deemed to have expressly consented to the jurisdiction of the Bankruptcy Court for all purposes

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with respect to any and all matters relating to, arising under or in connection with the Plan or the Case, including the matters and purposes set forth in the Plan.

11.7. Post-Confirmation Notice. After the Confirmation Date, no Creditor or other party-in-interest shall be entitled to general notice of pleadings filed in the Chapter 11 Case or other notices required by the Bankruptcy Code or Bankruptcy Rules, unless such party already receives notice through the Court’s CM/ECF system or such party requests post-confirmation notice by filing a request with the Court and serving same on Debtors’ counsel. All pre- Confirmation requests for notice and orders requiring or limiting notice shall have no effect post- Confirmation, except with regard to continued service through the Court’s CM/ECF system.

11.8. Case Closing. Debtors shall be responsible for preparing and filing any required motion to close the Chapter 11 Case. Debtors intend to seek closure of its Chapter 11 Case as soon as possible after the Effective Date, and this Chapter 11 Case may be closed notwithstanding the pendency of any claims objections, other contested motions, Causes of Action or Avoidance Actions, over which the Court shall retain jurisdiction.

11.9. Destruction of Records. After the Effective Date, Debtors shall have the right to destroy or cause to be destroyed records that it determines to no longer be needed. Any objection to the destruction of such records must be raised as an objection to confirmation of the Plan or shall be deemed to be waived.

11.10. Headings. All heading utilized in this Plan for convenience and reference only, and shall not constitute a part of this Plan for any other purpose.

11.11. Due Authorization. Each and every Claimant who elects to participate in the distributions provided for herein warrants that such Claimant is authorized to accept, in consideration of such Claim against the Debtors, the distributions provided for in this Plan and that there are not outstanding commitments, agreements, or understandings, expressed or implied, that may or can in any way defeat or modify the rights conveyed or obligations undertaken by such Claimant under this Plan.

11.12. Further Assurances and Authorizations. Debtors, if and to the extent necessary, shall seek such orders, judgments, injunctions, and rulings that may be required to carry out further the intentions and purposes, and to give full effect to the provisions, of this Plan. All terms and provisions of this Plan shall be construed in favor of the Debtors.

11.13. Additional Acts or Actions. Debtors may, but shall not be obligated to, take any action or commit any act that they determine to be necessary to facilitate the consummation, implementation, effectuation and execution of this Plan.

11.14. Applicable Law. Except to the extent that the Bankruptcy Code or other federal law is applicable, the rights, duties and obligations arising under this Plan shall be governed by and construed and enforced in accordance with the internal laws of the State of Tennessee without reference to the laws of other jurisdictions.

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11.15. No Interest. Except as expressly provide for in this Plan, or allowed by the Court, no interest, penalty or late charge is to be Allowed on any Claim subsequent to the Petition Date.

11.16. No Attorneys’ Fees. No attorneys’ fees will be paid with respect to any Claim except as specified herein or as allowed by a prior order of the Court.

11.17. Post-Confirmation Actions. After Confirmation, Debtors may, so long as it does not materially or adversely affect the interest of Creditors, remedy any defect or omission, or reconcile any inconsistencies in the Plan or in the Order of Confirmation, in such manner as may be necessary to carry out the purposes and effect of the Plan. Debtors may also, but shall not be obligated to, take any action or commit any act that they may deem to be necessary to facilitate the consummation, implementation, effectuation and execution of this Plan. Nothing contained in the Plan shall be construed so as to limit the rights of the Debtors to commence or prosecute any claim in any court of competent jurisdiction.

11.18. Severability. Should any provisions in the Plan be determined to be unenforceable, such determination shall in no way limit or affect the enforceability and operative effect of any other provisions of the Plan.

11.19. Setoff. Except as specifically provided in the Plan, no Creditor shall retain any contractual or statutory right to set off any asset in which either Debtor has an interest in satisfaction of that Creditor’s prepetition Claim.

11.20. Notice of Default. In the event of any alleged default under the Plan, any Creditor or party-in-interest must give a written default notice to Debtors, with copies to counsel of record for Debtors, specifying the nature of the default. Upon receipt of the default notice, Debtors shall have ten (10) days to cure such default from the time of receipt of the default notice. If such default has not been cured within the applicable time period, the default may be brought to the attention of the Court or any other court of competent jurisdiction.

11.21. No Tax or Filing Fee. No governmental entity may tax any transfer of property pursuant to or in furtherance of the Plan, or charge any tax or fee for the recording of, any release, deed, transaction or other document executed pursuant to or in furtherance of the Plan.

11.22. Notices. All notices, requests, elections or demands in connection with the Plan shall be in writing and shall be deemed to have been given when received or, if mailed, five (5) days after the date of mailing provided such writing shall have been sent by registered or certified mail, postage prepaid, return receipt requested.

ARTICLE XII RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order or the occurrence of the Effective Date, the Court shall retain exclusive jurisdiction over this Chapter 11 Case and any of the proceedings related to this Chapter 11 Case pursuant to section 1142 of the Code and 28 U.S.C. § 1334 to the fullest extent permitted by the Code and other applicable law, including, without

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limitation, such jurisdiction as is necessary to implement the Plan. Without intending to limit the generality of the foregoing, the Court shall have exclusive jurisdiction:

(a) To determine any and all objections to the allowance, extent, priority or nature of any Claims, the amount and proper classification of the Claim of any Holder and the determination of such objections as may be filed to any Claims.

(b) To determine any and all applications for compensation and reimbursement pursuant to section 330 of the Code.

(c) To determine any and all applications for the assumption or rejection of executory contracts and unexpired leases, and the allowance of any Claims resulting from rejection thereof.

(d) To determine any and all applications, adversary proceedings and contested matters that may be filed in this Court.

(e) To interpret, enter Final Orders relating to, and otherwise act upon or in regard to the terms and provisions of the Plan and to hear and determine all controversies, suits and disputes that arise in connection with the interpretation, implementation, effectuation, consummation or enforcement of this Plan

(f) To cause the correction of any defect, the curing of any omission, or the reconciliation of any inconsistency in this Plan or the Confirmation Order as may be necessary to carry out the purposes and intent of the Plan.

(g) Except as otherwise provided in the Plan, to make any determinations and to issue any Final Orders to enforce, interpret or effectuate the Plan.

(h) To determine all questions and disputes regarding title to Debtors’ Assets, and determination of all Causes of Action, controversies, disputes, or conflicts, whether or not subject to action pending as of the Confirmation Date, between either Debtor and any other person, including but not limited to, any rights of the Debtors to recover assets pursuant to the provisions of the Code or applicable state or federal law and the rights, obligations, and liabilities of the respective parties under any asset purchase agreements relating to the sale of the Debtors’ Assets.

(i) To exercise the jurisdiction granted pursuant to section 505(a) and (b) of the Code to determine any and all federal, state, Commonwealth, local and foreign tax liabilities of, and any and all refunds of such taxes paid by the Debtors.

(j) To enforce all injunctions and mandatory acts provided for in this Plan or in the Bankruptcy Code.

(k) To enter a Final Order concluding and terminating this case; and

(l) To determine such other matters as may be provided for in the Confirmation Order.

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DATED: August 10, 2020

OLD TIME POTTERY, LLC

/s/ Jason Schmitt By: Jason Schmitt Its: President and Chief Executive Officer

OLD TIME POTTERY HOLDINGS, LLC

/s/ Jason Schmitt By: Jason Schmitt Its: President and Chief Executive Officer

BASS, BERRY & SIMS PLC

ATTORNEYS FOR DEBTORS

25 Case 3:20-bk-03138 Doc 236 Filed 08/10/20 Entered 08/10/20 17:58:48 Desc Main Document Page 89 of 102 EXHIBIT B

Case 3:20-bk-03138 Doc 236 Filed 08/10/20 Entered 08/10/20 17:58:48 Desc Main Document Page 90 of 102 Old Time Pottery ‐ Financial Summary Projected Projected Projected Projected Projected Projected 2020 2021 2022 2023 2024 2025 Projected figures are based on assumptions and subject to change

($ in thousands) P&L Summary Net Sales $165,755 $154,494 $155,219 $155,973 $156,758 $157,573 % Growth YoY (1.8%) (6.8%) 0.5% 0.5% 0.5% 0.5% Total Expenses 156,710 145,453 145,939 146,447 146,975 147,525 EBITDA1 $9,045 $9,041 $9,279 $9,527 $9,783 $10,048 % Growth YoY (0.0%) 2.6% 2.7% 2.7% 2.7% Note 1: EBITDA is a non‐GAAP metric that excludes items that management does not believe are representative of the recurring operations of the business. Restructuring / Filing Related Costs 7,211 150 – – – –

Cash Flow Summary

Interest Expense & Fees (2,443) (2,231) (2,255) (2,159) (2,060) (1,882) Taxes (1) (989) (1,149) (1,243) (1,341) (1,463) Change in Net Working Capital 1,567 (219) 191 (574) (603) (1,139) Capital Expenditures (876) (3,500) (3,500) (2,500) (2,000) (2,000) Unsecured Claim Payments (51) (1,441) (1,976) (1,976) (1,976) (2,963)

Operating Cash Flow $31 $512 $591 $1,074 $1,804 $601

Unsecured Claims Unsecured Claims balances are subsequent to emergence from Chapter 11 Unsecured Claims, opening balance 10,381 10,331 8,890 6,915 4,939 2,963 Payment of Amounts: Class 3 (51) – – – – – Class 5 Option 1–(453) – – – – Class 4, Class 5 Option 2–(988) (1,976) (1,976) (1,976) (2,963) Unsecured Claim Payments (51) (1,441) (1,976) (1,976) (1,976) (2,963) Unsecured Claims, endng balance 10,331 8,890 6,915 4,939 2,963 –

Balance Sheet Summary

Cash 3,000 3,000 3,000 3,000 3,000 3,000 Accounts Receivable 1,383 1,289 1,295 1,301 1,308 1,315 Inventory On‐Hand 45,348 47,890 49,051 50,171 51,327 52,536 Inventory In‐Transit 1,925 2,033 2,083 2,130 2,179 2,230 Eligible On‐Hand Inventory 44,618 47,120 48,262 49,365 50,502 51,692 Accounts Payable 6,481 8,090 8,459 8,498 8,538 8,580 Accrued Expenses 5,703 4,813 5,317 5,827 6,342 6,374

Net Working Capital 35,582 35,801 35,610 36,184 36,787 37,926

Debt Overview ABL Balance ‐ Post Emergence 23,361 22,850 22,259 21,185 19,381 18,780

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Case 3:20-bk-03138 Doc 236 Filed 08/10/20 Entered 08/10/20 17:58:48 Desc Main Document Page 92 of 102 Contract Party & Mailing Address Class of Agreement Term Cure Costs

AMCAP BONITA, LLC Store Lease 31-Jan-25 $144,488.84 333 LUDLOW STREET - SOUTH TOWER FLOOR 8 STAMFORD, CT 06902-0000 ATC REALTY SIXTEEN INC Store Lease Month to $284,762.46 333 MARKET STREET Month FLOOR 17 SAN FRANCISCO, CA 91405-2102 AVAYA Phone Switch 30-Jun-21 $25,069.60 MERIDIAN GROUP 9 PARKWAY NORTH Maintenance SUITE 500 DEERFIELD, IL 60015-0000 AVE INVESTMENTS POS Hardware 30-Dec-20 $0 14100 REDFIELD DRIVE Maintenance EUGENE, MO 65032-0000 BEAZLEY INS. CO., INC. Commercial crime 3-Oct-20 $0 141 TREMONT STREET insurance BOSTON, MA 02111-0000 BENDERSON DEVELOPMENT COMPANY, Store Lease 31-May-23 $227,908.62 LLC 7978 COOPER CREEK BLVD SUITE 100 UNIVERSITY PARK, FL 34201-0000 BLUECROSS BLUESHIELD OF TN Healthcare insurance 31-Dec-20 $0 1 CAMERON HILL CIRCLE CHATTANOOGA, TN 37402-0002 BRANDON CROSSINGS, LLC Store Lease 28-Feb-24 $0 140 N. FEDERAL HIGHWAY SUITE 200 BOCA RATON, FL 33432-0000 BROADWAY SYCAMORE PARTNERS, LLC Store Lease 31-Mar-23 $118,774.47 9 WEST 57TH STREET 31st FLOOR NEW YORK, NY 10019-0000 BZA FH SAND LAKE, LLC Store Lease 31-Dec-23 $141,628.62 C/O OLYMPIC PROPERTY MGMT 1400 BUFORD HWY, SUITE R-3 SUGAR HILL, GA 30518-0000 C & A, LTD. L.C. Store Lease 31-Aug-21 $89,664.88 11501 NORTHLAKE DRIVE CINCINNATI, OH 45249-0000 CCBCC Operations, LLC Beverage supplier Month to $0 P.O. BOX 744010 contract Month ATLANTA, GA 30384-4010 CEVA FREIGHT LLC Freight forwarder Month to $209,481.00 DEPT 2309 contract Month CAROL STREAM, IL 60132-2309 COLUMBUS PACIFIC PROPERTIES Store Lease 31-Oct-26 $151,653.78 C/O COLUMBUS PACIFIC 1313 FOOTHILL BLVD., SUITE 2 LA CANADA FLINTRIDGE, CA 91011-0000

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CR TOWNE SQUARE, LLC Store Lease 31-Jan-22 $170,414.61 C/O CONTINENTAL REALTY CORPORATION 1427 CLARKVIEW RD. , SUITE 500 BALTIMORE, MD 21209-0000 CROSS CREEK PLAZA, INC. Store Lease 28-Feb-28 $104,778.78 C/O GFD MANAGEMENT, INC. 6350 QUADRANGLE DR., SUITE 205 CHAPEL HILL, NC 27517-0000 DEERFIELD MYRTLE BEACH Store Lease 31-May-26 $116,316.96 SODI Inc., 8402 SIX FORKS ROAD SUITE 201 RALEIGH, NC 27615-0000 DULOC, LLC Store Lease 31-May-23 $7,557.00 ATTN: NEYER REAL ESTATE MANAGEMENT 3927 BROTHERTON RD. STE 200 CINCINNATI, OH 45209-0000 EIFFEL TOWER INVESTMENTS LLC Store Lease 31-Dec-22 $130,424.34 P.O. BOX 954053 LAKE MARY, FL 32795-4053 ENDURANCE RISK SOLUTIONS Excess directors and 3-Dec-20 $0 ASSURANCE CO. officers liability P.O. BOX 29207 insurance NEW YORK, NY 10087-9207 EVEREST INDEMNITY INS. CO. Commercial property 31-Mar-21 $0 461 5th AVENUE insurance NEW YORK, NY 10017-0000 FEDERAL INS. CO. Business Travel 2-Oct-20 $0 1133 AVENUE OF THE AMERICAS accident insurance NEW YORK, NY 10036-0000 FIREMAN'S FUND INS. CO. Commercial umbrella 1-Oct-20 $0 P.O. BOX 29207 insurance NEW YORK, NY 10087-9207 G & I IX SOUTHGATE SHOPPING CENTER Store Lease 31-Oct-22 $246,652.76 LLC C/O WOOLBRIGHT DEVELOPMENT INC 3200 NORTH MILITARY TR, 4TH FL BOCA RATON, FL 33431-0000 GATEWAY ARTHUR, INC. Store Lease 31-Jul-23 $189,211.56 P.O. BOX 57021 NEWARK, NJ 07101-7021 GATOR DAYTONA PARTNERS, LTD. Store Lease 31-Aug-28 $124,806.35 C/O GATOR INVESTMENTS 7850 NW. 146TH ST, 4TH FL MIAMI LAKES, FL 33016-0000 GENESYS AS/400 Maintenance 31-Oct-20 $0 3401 MALLORY LANE SUITE 200 FRANKLIN, TN 37067-0000 INDIAN HARBOR INSURANCE COMPANY Cyber and technology 3-Dec-20 $0 P.O. BOX 29207 liability insurance NEW YORK, NY 10087-9207

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IP-TL CENTURY PLAZA, LLC Store Lease 30-Sep-25 $149,312.67 C/O TRI-LAND PROPERTIES INC ONE EAST OAK HILL DR, STE 302 WESTMONT, IL 60559-0000 IRC RETAIL CENTERS, INC Store Lease 31-Oct-23 $141,947.13 ATTN: GENERAL COUNSEL 814 COMMERCE DR, STE 300 OAK BROOK, IL 60523-0000 JBS OF PRATTVILLE, LLC Store Lease 30-Apr-24 $125,631.00 P.O. BOX 207 HARPERSVILLE, AL 35078-0000 K & H HAWTHORNE, LLC Store Lease 31-Dec-23 $172,586.07 46459 ROADRUNNER ROAD FREMONT, CA 94539-0000 KIMCO DEVELOPMENT CORPORATION Store Lease 31-Aug-24 $202,447.44 3333 NEW HYDE PARK ROAD SUITE 100 NEW HYDE PARK, NY 11042-0000 KIMCO DEVELOPMENT CORPORATION Store Lease 31-Jul-27 $125,609.76 3333 NEW HYDE PARK ROAD SUITE 100 NEW HYDE PARK, NY 11042-0000 KUEHNE + NAGEL INC. Freight forwarder Indefinite $95,949.32 555 MARRIOTT DRIVE contract SUITE 180 NASHVILLE, TN 37214-0000 L L & T PROPERTIES, LTD. Store Lease Month to $134,850.76 8081 COTTAGE HILL ROAD, P.O BOX 143 Month WILMER, AL 36587-0000 Lakeworth Town Plaza, LLC Store Lease 31-Aug-25 $56,160.63 696 NE 125TH STREET P. O. BOX 611030 NORTH MIAMI, FL 33161-0000 LOOMIS Healthcare insurance 31-Dec-20 $0 PO BOX 7011 WYOMISSING, PA 19610-6011 MARKET PLACE SHOPPING CENTER DBA Store Lease 31-Jan-25 $160,009.42 VERDAE 124 VERDAE BLVD SUITE 502 GREENVILLE, SC 29607-0000 MARKETPLACE OF ROCKFORD, LLC Store Lease 31-Oct-21 $57,554.52 ATTN: CBRE ASSET SERVICES, 700 COMMERCE DR, STE 450 OAKBROOK, IL 60523-0000 MC-NC, LLC, AS MORTGAGOR, FOR Store Lease 30-Sep-21 $112,513.98 INTELICA C PO BOX 713805 CINCINNATI, OH 45271-3805 MONARCH INVESTMENTS GROUP, LLC Store Lease 30-Sep-27 $148,893.51 C/O STAR COMMERCIAL, LLC 4828 ASHFORD DUNWOODY RD, STE 300 ATLANTA, GA 30338-0000

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MUFFREY LLC & MASCOT LLC Store Lease 30-Apr-26 $10,926.54 185 NW SPANISH RIVER BLVD SUITE 100 BOCA RATON, FL 33431-0000 NITEL Telecom contract Varies by $46,320.17 1101 W. LAKE STREET Store 6th FLOOR CHICAGO, IL 60607-1640 ORACLE AMERICA INC. IT Cloud Support Lease 14-Nov-20 $39,100.63 500 ORACLE PARKWAY REDWOOD SHORES, CA 94065-0000 PA MANUFACTURERS' ASSOCIATION INS. Workman’s 1-Oct-20 $0 CO. compensation, P.O. BOX 29207 commercial general NEW YORK, NY 10087-9207 liability and commercial auto liability and physical damage insurance PIGEON RIVER CROSSINGS, LLC Store Lease 31-May-22 $134,406.32 3928 MALONEY ROAD KNOXVILLE, TN 37920-0000 PLAZA 66, LLC Store Lease 31-Jan-29 $195,143.73 C/O IN-REL PROPERTIES, INC. 200 LAKE AVENUE, 2ND FL WORTH BEACH, FL 33460-0000 ROBSON PROPERTIES Store Lease 31-Aug-24 $95,680.77 310 S. MISSOURI, P.O. BOX 986 CLAREMORE, OK 74018-0000 RTC GROUP JDA/MMS Support 30-Aug-23 $0 7606 PRESIDENTS DRIVE ORLANDO, FL 32809-0000 SERITAGE SRC FINANCE LLC Store Lease 31-Jul-30 $130,858.16 ATTN: CTO REALTY GROUP, INC. 1140 N.WILLIAMSON BLVD, STE 140 DAYTONA BEACH, FL 32114-0000 SERVICE EXPRESS Store Hardware 30-Jun-21 $4,670.57 3854 BROADMOAR AVE SE Maintenance GRAND RAPIDS, MI 49512-0000 SHANRI HOLDINGS CORPORATION C/O Store Lease Month to $123,105.00 THE PELI Month 917 WESTERN AMERICA CIRCLE SUITE 503 MOBILE, AL 36609-4110 SHOPIFY INC Hosted Commerce 10-Jul-21 $0 150 ELGIN STREET Service Lease OTTAWA, CANADA K2P 1L4, SPIRIT MASTER FUNDING IX, LLC Store Lease 29-Feb-24 $284,224.16 2727 NORTH HARWOOD ST SUITE 300 DALLAS, TX 75201-0000

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SPIRIT MASTER FUNDING IX, LLC Store Lease 31-May-24 $101,676.00 2727 NORTH HARWOOD ST SUITE 300 DALLAS, TX 75201-0000 SPIRIT MASTER FUNDING IX, LLC Store Lease 28-Feb-20 $171,777.31 2727 NORTH HARWOOD ST SUITE 300 DALLAS, TX 75201-0000 STEBRI ENTERPRISES, INC. Store Lease 30-Jun-21 $128,170.10 C/O JAZ MANAGEMENT 4062 PEACHTREE ROAD, UNIT A287 ATLANTA, GA 30319-0000 STRETTO Claims administration, Until $0 410 EXCHANGE noticing and solicitation Terminated SUITE 100 services contract IRVINE, CA 92602-0000 SUNLAND PROPERTIES, INC. Store Lease 31-Jan-21 $73,216.24 300 WEST SUMMIT AVENUE SUITE 250 CHARLOTTE, NC 28203-0000 SUNSHINE MZL, LLC Store Lease 31-Dec-26 $130,648.92 C/O KATZ PROPERTIES RETAIL 254 WEST 31ST STREET, 4TH FL NEW YORK, NY 10001-0000 TRAVELERS PROPERTY CASUALTY CO. Marine Cargo and 2-Oct-20 $0 OF AMERI inland insurance 485 LEXINGTON AVE FLOOR 5 NEW YORK, NY 10017-0000 UCG Data Backup / Disater 30-Dec-20 $0 7100 E PLEASANT VALLEY ROAD Recovery SUITE 250 INDEPENDENCE, OH 44131-0000 V. ALEXANDER & CO. INC Customer broker Indefinite $113,163.41 51 GERMANTOWN COURT contract SUITE 300 MEMPHIS, TN 38018-0000 VIGILANT INS. CO. (CHUBB) Foreign package 2-Oct-20 $0 17200 WEST 119th STREET insurance OLATHE, KS 66061-0000 VISHAL, INC Store Lease 30-Nov-21 $83,517.00 5675 JIMMY CARTER BLVD SUITE 500 NORCROSS, GA 30071-0000 WESTCHESTER SURPLUS LINES Executive Risk 3-Dec-20 $0 INSURANCE CO Insurance P.O. BOX 29207 NEW YORK, NY 10087-9207 WINDSOR 15, LLC Store Lease 31-Dec-24 $82,519.60 C/O TARANTINO PROPERTIES, INC. P. O. BOX 714278 CINCINNATI, OH 45271-4278

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ZOFTEC, LLC dba VERAS RETAIL POS Software 30-Aug-20 $0 2325 W. UTOPIA ROAD Maintenance PHOENIX, AZ 85027-0000 ZP NO. 183, LLC Store Lease 31-Aug-21 $125,462.88 111 PRINCESS STREET WILMINGTON, NC 28401-0000

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Case 3:20-bk-03138 Doc 236 Filed 08/10/20 Entered 08/10/20 17:58:48 Desc Main Document Page 99 of 102 DRAFT FOR DISCUSSION PURPOSES Old Time Pottery Liquidation Analysis The figures below are based on forecast amounts and subject to change. 31‐Oct‐20 Realization % Realization Value USD in $000s Book Value Low High Low High Current Assets Cash 3,000 100% 100% 3,000 3,000 Accounts Receivable ‐ CC Float 862 100% 100% 862 862 Inventory 47,210 75% 85% 35,407 40,128 In‐Transit Inventory 1,019 40% 60% 407 611 Other Current Assets 2,118 10% 20% 212 424 Non‐Current Assets Note 1 Furniture and Fixtures 13,050 8% 10% 1,044 1,305 Machinery and Equipment 14,670 5% 10% 733 1,467 Land & Building (Tenant Improvements) 19,246 ‐ ‐ ‐ ‐ Other Non‐Current Assets 472 ‐ ‐ ‐ ‐ Goodwill 10,769 ‐ ‐ ‐ ‐ Total 112,415 41,666 47,797 Liquidation Costs (2,000) (3,000) Post‐Petition Accounts Payable (4,370) (4,830) Sales and Use Tax Payable (1,573) (1,573) (1,573) 503(b)9 Claims (1,271) (1,271) (1,271) Accrued Payroll and Taxes (1,019) (1,019) (1,019) Outstanding Professional Fees (1,100) (1,100) (1,100) Liquidation Proceeds 30,333 35,004 less: DIP ABL Balance (24,676) (24,676) (24,676) Note 2 Available for Distribution 5,657 10,328 Unsecured Claims Lease Rejection Claims (14,902) (14,902) Note 3 Prepetition Accrued and unpaid Rent (5,708) (5,708) Comvest Partners ‐ Subordinated Debt (5,684) (5,684) Merchandise Payables and Operations (3,297) (3,297) Total Unsecured Claims (29,591) (29,591) Percentage of Recovery 19% 35% Note 1: Certain figures shown at Acquisition Cost and do not account for accumulated depreciation. Note 2: Forecast DIP ABL Balance at October 31, 2020 prior to any anticipated refinancing and payment of unsecured claims. Note 3: Figure assumes all 43 OTP stores are closed and represents the approximate maximum claim amount.

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Case 3:20-bk-03138 Doc 236 Filed 08/10/20 Entered 08/10/20 17:58:48 Desc Main Document Page 101 of 102 Sources and Uses available to the Debtors as of the Effective Date

Assumed Effective Date October 31

Sources Uses Draws Under New Credit Facility $30,001,211 Debtor in Possession Operating Line $24,675,502 Cure Costs on Assumed Leases 2,853,947 503(b)9 Claims 1,271,217 Outstanding Professional Fees 950,000 New Credit Facility Fees 200,000 Class 3 Claims 50,544

Total Sources $30,001,211 Total Uses $30,001,211

Key Assumptions: All figures are estimates and subject to change Class 3 and 503(b)9 claims are paid on the Effective Date Half of pre-petition rent amounts in Class 5 claims are assumed to be paid on the Effective Date as Cure Costs

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