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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PROMMIS HOLDINGS, LLC, et al.,1 Debtors. ) ) Chapter 11 ) ) Case No. 13-10551(BLS) ) ) (Jointly Administered) ) ) )

DEBTORS MOTION TO APPROVE (I) SALE OF CERTAIN ASSETS TO PITE DUNCAN, LLP PURSUANT TO 11 U.S.C. 363(b); (II) ASSUMPTION AND ASSIGNMENT OF DESIGNATED LEASES AND CONTRACTS, AND (III) RELATED BIDDING AND SALE PROCEDURES Prommis Holdings, LLC and certain of its affiliates, as debtors and debtors in possession (collectively, the Debtors), by and through their proposed undersigned counsel, file this motion (the Motion) pursuant to sections 105(a), 363, and 365 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (as amended, the Bankruptcy Code), Rules 2002, 6004, 6006, and 9014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rules 2002-1 and 6004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules), for entry of an order (the Sale Order), approving and authorizing (i) the sale (the Sale) of certain assets of the Debtors to Pite Duncan, LLP (PD), (ii) the assumption, assignment and sale of designated leases and contracts

The Debtors in these chapter 11 cases, along with the last four digits of each Debtors federal taxpayer-identification number, are: Prommis Holdings, LLC (6940); Prommis Fin Co. (2965); Prommis Solutions, LLC (9978); E-Default Services LLC (0016); Statewide Tax and Title Services LLC (0049); Statewide Publishing Services LLC (0079); Nationwide Trustee Services, Inc. (2436); Statewide Tax and Title Services of Alabama LLC (7733); Nationwide Trustee Services of Virginia, Inc. (6687); Interface Inc. (9903); and Prommis Homeownership Solutions, Inc. (0569). The location of the Debtors headquarters and the Debtors service address is 400 Northridge Road, Atlanta, Georgia, 30350.

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(the Designated Agreements),2 as to (i) and (ii), free and clear of all liens, claims, interests and encumbrances, and (iii) related bidding and sale procedures. In support of this Motion, the Debtors respectfully represent the following: I. 1. JURISDICTION AND VENUE

The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. 3. Venue in this Court is proper pursuant to 28 U.S.C. 1408 and 1409. The bases for the relief requested herein are Bankruptcy Code sections 105(a),

363(b), (f) and (m), and 365 of title 11, Bankruptcy Rules 2002(a)(2), 6004(a), (b), (c), (e), (f) and (h), 6006(a), (c) and (d), 7004, 9007, 9014, and 9019, and Local Rule 6004-1. II. 4. INTRODUCTION

On March 18, 2013 (the Petition Date), each of the Debtors filed a petition with

this Court under chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and 1108. No request for the appointment of a trustee or examiner has been made in these chapter 11 cases. On April 2, 2013, the Office of the United States Trustee appointed an Official Committee of Unsecured Creditors comprised of three (3) members. 5. A description of the Debtors businesses, the reasons for commencing these

chapter 11 cases, and the relief sought from this Court to allow for a smooth transition into chapter 11 are set forth in the Declaration of Charlie T. Piper in Support of Debtors First Day Pleadings (Docket No. 15) (the First Day Declaration).

A schedule of the Designated Agreements, with proposed cure amounts, is attached hereto as Exhibit A.

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6.

After intense negotiations with the Agents and their Lenders, the Debtors

commenced these chapter 11 cases with their Lenders support for an agreement for use of cash collateral to conduct these cases and provide the best opportunity to preserve value and jobs, and minimize disruption to the Debtors customers. In furtherance of that support, on March 19, 2013, the Court entered the Interim Order (a) Authorizing the Use of Cash Collateral; (b) Granting Adequate Protection; (c) Modifying the Automatic Stay; and (d) Scheduling a Final Hearing [D.I. 30]. 7. Consistent with these goals, the Debtors have aggressively continued their efforts

to consummate sales of their businesses and assets on a going concern basis. The proposed sale to PD described herein reflects a highly material step toward achieving the Debtors goals in these cases and to achieve it so early in these cases is a testament to the Debtors fervent pursuit of their objectives (as well as reflecting considerable efforts on the part of PD and the support of the Debtors Lenders). III. 8. RELIEF REQUESTED

By this Motion, the Debtors seek (i) authority to enter into and to close upon an

asset purchase agreement (as it may be amended, the APA or the Purchase Agreement) based upon the terms of that certain Letter of Intent dated as of April 19, 2013 (the Letter of Intent, a copy of which is attached hereto as Exhibit B) by and between PD and Prommis Holdings, LLC, providing for the sale of certain assets (the Purchased Assets) of the Debtors to PD, (ii) related authority to assume, assign and sell certain designated leases and contracts, and (iii) approval of bidding and sale procedures appropriate and necessary to maximize value for the Purchased Assets. 9. The Letter of Intent provides for a purchase price of $3,750,000.00 payable in

four installments: $1 million at closing, $1 million on the 30th day following the closing date, $1 3

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million on the 60th day following the closing date, and $750,000.00 on the 90th day following the closing date. The Debtors believe that the sale to PD at the proposed price maximizes the realizable value of the Purchased Assets for the Debtors stakeholders. The following is a summary of the material terms of the transaction:3
Purchase Price Purchase Agreement $3,750,000.00 Purchase Agreement to contain representations, warranties, and covenants that are customary for such transactions Such assets, licenses and other rights that will allow Buyer to perform the functions and services currently provided by Sellers pursuant to the Parties existing Services Agreement, including: (i) A license of software and other intellectual property currently owned by Sellers and used by Sellers to provide to Buyer the services contemplated by the Services Agreement, including, but not limited to ProLaw along with all the integrated applications owned or licensed by Sellers and designed to work together to perform business functions that include, without limitation, bankruptcy and eviction management as well as reporting and invoicing to PDs clients. All software shall include a copy of all documentation, source code (except as may be limited pursuant to third party software licenses), a copy of all other object code and a copy of all derivatives of all such software, including any modifications, improvements, and derivatives (including all copyrights, patent rights, inventions, trade secrets and other intellectual property rights) thereto. Buyer understands and agrees that Sellers shall retain ownership of all software, intellectual property, source code, object code, derivatives, and other items described in this section 2(b)(i) (other than with respect to any licenses or copies provided to Buyer pursuant to this section 2(b)(i)); (ii) A license to TESS to perform foreclosure management for a period of 180 days following the closing date; (iii) Real property leases related to office space located at 4375 Jutland Drive, San Diego, California; (iv) To the extent owned by Sellers, all office furniture and equipment primarily used by the employees of Sellers who are offered employment with Buyer; (v) Personal property leases for certain office equipment currently used by Sellers to perform the services under the Services agreement including, without limitation, computers, monitors, copiers, printers, and scanners;

Acquired Assets

The table summarizing material terms is a non-exclusive summary of the terms of the Letter of Intent. To the extent of any controversy between the summary herein and the Letter of Intent, the Letter of Intent shall control.

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(vi) All accounts receivable of Sellers including all affiliates and subsidiaries of Seller as of the closing date relating to services performed by Sellers prior to the closing date under the Services Agreement; and (vii) All amounts owed to Sellers for work in progress of Sellers as of the closing date relating to services performed by Sellers prior to the closing date under the Services Agreement. Excluded Assets Any servers, switches, routers or other IT hardware that Sellers do not use exclusively for the purpose of performing services under the Services Agreement and any software or intellectual property licensed to Sellers from a third party. In connection with the Purchase Agreement, Buyer and Sellers shall enter into a Transition Services Agreement, which will describe certain services to be provided by Sellers to Buyer, for which Buyer shall pay any payroll expenses or other reasonable and documented expenses associated with such Transition Services provided the parties approve said expenses in advance. Transition Services do not include services performed under the Services Agreement. Sellers will facilitate the transfer of all of Buyers data stored on Sellers document management system, ProLaw or TESS to Buyers network at Buyers expense. Such data to include but not be limited to Buyers files stored in the various ProLaw file storage locations and a copy of the ProLaw database including all custom features and tables containing historical data (solely to the extent such database relates to Buyers files). The liabilities to be assumed by Buyer shall be only those expressly assumed pursuant to the Purchase Agreement. The contracts, agreements, understandings and other liabilities and obligations (whether absolute, contingent, known or unknown, determinable or not determinable or otherwise) of Sellers that are not expressly assumed by Buyer in the Purchase Agreement shall not be assumed by the Buyer. The Parties contemplate that upon consummation of the transactions contemplated by the Purchase Agreement, Buyer shall have no further obligation to Seller under the Services agreement and Seller shall have no further obligation to Buyer under the Services Agreement. At closing, each Party shall execute a general release in favor of the other Party, as well as certain affiliates of each Party, including, without limitation, the partners, directors, managers and officers of such Party, which provides for the release of any and all claims known or unknown pertaining to the business relationship of the Parties up to and including the closing date. The release shall also be subject to the requirement that Buyer and Sellers continue to perform all obligations under the Purchase Agreement. The Parties will use their commercially reasonable efforts to close the transaction on or before May 2, 2013. (i) Approvals. The Purchase Agreement will contain customary closing conditions, including receipt of (a) all necessary and appropriate third party approvals, (b) all regulatory and government approvals, (c) and approval by

Transition Team Support

Data Transfer

Liabilities

Release

Closing

Conditions To Closing

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the United States Bankruptcy Court for the District of Delaware; (ii) Termination of Certain Agreements. Effective as of closing, the Services Agreement and any amendments or addendums thereto, including any agreements or arrangements with Cal Western Reconveyance Corp, shall have been rejected, terminated and cancelled and shall be of no further force or effect; and (iii) Dismissal and Withdrawal. Effective as of closing, all adversary proceedings or motions shall be terminated or withdrawn with prejudice. Immediately following the execution of the Letter of Intent, Buyer shall withdraw its objection to Sellers Motion Regarding the Use of Cash Collateral.

10.

While the terms of the proposed sale to PD are highly advantageous, the Debtors

are nonetheless affording a full opportunity for interested parties to submit higher or better offers for the Purchased Assets. The Debtors and PD have agreed to pursue the transaction on an expedited but reasonable time table under the circumstances. As such, the bidding procedures to be established will be very streamlined, providing for well-settled measures such as financial wherewithal qualification, minimum overbid and bid increment requirements, and a requirement that any competing bidder submit a markup of the APA. 11. The nature of the relevant assets being acquired under the transaction, and the

operating costs to the Debtors of maintaining the relevant services, warrant the pursuit of the transaction on a prompt schedule. Under the Letter of Intent, PD requires that the Debtors use their best efforts to obtain authority to close upon the transaction by May 2, 2013. 12. The sale is an essential component of the Debtors overall objectives in these

cases: achieving sale transactions that maximize value for the Debtors stakeholders, preserving jobs through the orderly transition of employees to purchasers, and thereafter conducting an orderly wind-down of the remainder of the Debtors businesses as necessary.

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IV. 13.

LOCAL RULE 6004-1 REQUIREMENTS

In accordance with Local Rule 6004-1, the following are the required disclosures

with respect to the subsections (A) through (O) of Local Rule 6004-1(b)(iv): (a) Sale to Insider: The Buyer is not an insider of the Debtors within the meaning of Bankruptcy Code section 101(31). Agreements with Management: None. Releases: Section 2(g) of the Letter of Intent provides for broad mutual releases by the Debtors, their affiliates and PD of any and all claims whether known or unknown, up to and including the Closing Date, provided that the release shall not relieve the parties of their obligations under the APA. Also, as set forth herein, the Debtors will sell the Purchased Assets which are estate assets free and clear of liens, claims, interests, and encumbrances pursuant to Bankruptcy Code section 363(f). Pursuant to Bankruptcy Code section 365(k), the Debtors are seeking to be absolved and otherwise relieved from any and all liability and obligations with respect to the any lease or contractual obligations after the assignment of the same to the Buyer. Private Sale/No Competitive Bidding: The Debtors are subjecting the proposed sale to competitive bidding and, if at least one qualified overbid is timely received, an auction prior to the Sale Hearing. Closing and Other Deadlines: As set forth in the Letter of Intent, the parties are required to use their commercially reasonable efforts to close the transaction on or before May 2, 2013. Good Faith Deposit: No good faith deposit is required by the Buyer or for a party to make a Qualified Overbid. Interim Arrangements with Proposed Buyer: Buyer and Sellers are entering into a Transition Services Agreement, which will describe certain services to be provided by Sellers to Buyer, for which Buyer shall pay any payroll expenses or other reasonable and documented expenses associated with such Transition Services provided the parties approve said expenses in advance. Transition Services do not include services performed under the Services Agreement. Use of Proceeds: The Debtors will apply net Sale proceeds in accordance with that certain Forbearance Agreement dated March 18, 2013 and that certain Stipulation and Agreed Interim Order Authorizing the Debtors use of Cash Collateral [Docket No. 14](as may be amended, supplemented or modified). 7

(b) (c)

(d)

(e)

(f)

(g)

(h)

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(i) (j)

Tax Exemption: None sought. Record Retention: Sellers will facilitate the transfer of all of Buyers data stored on Sellers document management system, ProLaw or TESS to Buyers network at Buyers expense. Such data to include but not be limited to Buyers files stored in the various ProLaw file storage locations and a copy of the ProLaw database including all custom features and tables containing historical data (solely to the extent such database relates to Buyers files). Sale of Avoidance Actions: None, but the Release provided for in the Letter of Intent would release all causes of action against the Buyer and certain of its affiliates through the closing date, including any potential Avoidance Actions. Requested Findings as to Successor Liability: The Debtors are seeking a finding from the Court that the Buyer is not, for any purposes related to the Property, a successor, as defined by any law, statute, rule, or regulation of any jurisdiction, to the Sellers. Sale Free and Clear of Unexpired Leases: No fee interest in real property is included in the assets being sold, and therefore there is no request to sell assets free and clear of leases. Credit Bid: The Debtors do not seek to affect in any manner any credit bid rights pursuant to Bankruptcy Code section 363(k). Relief from Bankruptcy Rule 6004(h) and 6006(d): The Debtors are seeking relief from the fourteen (14) day stay imposed by Bankruptcy Rules 6004(h) and 6006(d). V. BACKGROUND

(k)

(l)

(m)

(n)

(o)

14.

Prior to the Petition Date, the parties relationship was governed by that certain

Services and Technology Agreement by and between Prommis Solutions, LLC (f/k/a MR Default Services LLC) and Pite Duncan, LLP dated November 14, 2007 (the Services Agreement). PD intends to purchase the portions of the Debtors assets that are necessary for it to perform for itself the services currently performed for PD by the Debtors under the Services Agreement.

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15.

The Debtors and PD memorialized in writing their intent to enter into the APA by

executing the Letter of Intent, providing for the sale and purchase of the Purchased Assets. 16. No later than April 24, 2013, the Debtors intend to file the APA setting forth with

specificity all terms of parties transaction. VI. 17. SUMMARY OF THE DEBTORS MARKETING EFFORTS

The Debtors, with the assistance of their advisors, have actively and broadly

marketed the Purchased Assets. Indeed, the markets knowledge of the viability of the Debtors business for sale is widely know, as only one year before the Petition Date, the Debtors were subject to an extensive capital raise and sale process with the assistance of an investment banking. 18. In light of the Debtors substantial experience with efforts to market to and sell

their businesses, spanning close to two years, the Debtors were able to identify a tailored list of potentially interested parties with a very high confidence level of having included all likely prospective buyers. The Debtors industry has a finite number of well-known participants, and thus a readily identifiable body of prospective purchasers. 19. The Debtors have contacted approximately 21 parties to seek their expressions of

interest in the Debtors assets as well as the assets of the CWR Subsidiaries. In addition, several parties have contacted the Debtors seeking to pursue due diligence. The Debtors entered into nine non-disclosure agreements (NDAs) allowing such parties to conduct due diligence. The Debtors have maintained a comprehensive data room for the use of parties under NDAs, and throughout the marketing process, there has been robust activity in the dataroom. Of the parties (and joint ventures) that entered into NDAs, six met with management and performed on-site diligence with their own management and advisory teams.

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20.

Several of the parties who remain in the sale process are pursuing assets other

than the Purchased Assets. As of the time of filing this motion, the Debtors have received no other letters of intent with regard to the Purchased Assets. VII. 21. PROPOSED OVERBID PROCESS

In order to assure that the proposed sale will yield the maximum realizable value

to the Debtors estates, the transaction will be subject to higher and better offers prior to the hearing on this Motion. The Debtors are establishing bidding procedures, which will be subject to modification in consultation with the Committee and the Debtors Lenders, which provide a procedure for interested parties to seek qualification as a competing bidder, a deadline to submit a competing offer, and ultimately conduct an auction (the Auction) in the event a qualified overbid is timely received. Proposed bidding procedures are set forth in the Bidding Procedures for Alternative Proposals for Sale of Certain Assets of the Debtors (the Bidding Procedures and the Bidding Procedures Notice), attached hereto as Exhibit C. VIII. BASIS FOR RELIEF A. The Relief Sought in the Sale Motion is in the Bests Interests of the Debtors Estates and Should be Approved (1) 22. The Bidding Procedures are Appropriate and Will Maximize the Value Received for the Assets

The paramount goal in any proposed sale of estate property is to maximize the

proceeds received by the estate. See, e.g., In re Mushroom Transp. Co., Inc., 382 F.3d 325, 339 (3d Cir. 2004) (debtor-in-possession has fiduciary duty to protect and maximize the estates assets); Official Comm. of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548, 573 (3d Cir. 2003) (same); Four B. Corp. v. Food Barn Stores, Inc. (In re Food Barn Stores, Inc.), 107 F.3d 558, 56465 (8th Cir. 1997) (in bankruptcy sales, a primary objective of the Code [is] to enhance the value of the estate at hand). 10

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23.

Courts uniformly recognize that procedures intended to enhance competitive

bidding are consistent with the goal of maximizing the value received by the estate and, therefore, are appropriate in the context of bankruptcy sales. See In re Fin. News Network, Inc., 126 B.R. 152, 156 (S.D.N.Y. 1991) (as amended) (court-imposed rules for the disposition of assets . . . [should] provide an adequate basis for comparison of offers, and [should] provide for an [sic] fair and efficient resolution of bankrupt estates); In re OBrien Envtl. Energy, 181 F.3d at 537; Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650, 659 (S.D.N.Y. 1992) (bidding procedures encourage bidding and maximize the value of the debtors assets); In re Edwards, 228 B.R. 552, 561 (Bankr. E.D. Pa. 1998) (purpose of procedural bidding orders is to facilitate open and fair public sale designed to maximize value for estate). 24. The Debtors believe that the proposed Bidding Procedures will establish the

parameters under which the value of the Purchased Assets may be tested at the Auction and approved at the hearing on the Sale (the Sale Hearing). The Bidding Procedures will increase the likelihood that the Debtors receive the most consideration for the Purchased Assets because they encourage competitive and fair bidding. The Bidding Procedures will also allow the

Debtors to undertake the Auction process in as expeditious a manner as possible, which the Debtors believe is essential to maximizing the value to their estates and overall enterprise. 25. Specifically, the proposed Bidding Procedures will allow the Debtors to conduct

the Auction in a controlled, fair and open fashion that will encourage participation by financially capable bidders who demonstrate the ability to close a transaction. The Debtors believe that the Bidding Procedures will encourage active bidding from interested parties and thus dispel any doubts as to the highest or best offer available for the Purchased Assets. Moreover, the Debtors

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believe the Bidding Procedures are appropriate in light of their marketing process, and the need to implement a proposed sale transaction as quickly as possible to maximize value for all stakeholders. The Bidding Procedures are similar to other procedures previously approved by this Court, and are appropriate under the relevant standards governing auction proceedings and bidding incentives in bankruptcy proceedings. See In re OBrien Envtl. Energy, 181 F.3d at 537; In re Palm Harbor Homes, Inc., Case No. 10-13850 (Bankr. D. Del. Jan. 6, 2011) [Docket No. 187]; In re Ultimate Escapes Holdings, LLC, Case No. 10-12915 (Bankr. D. Del. Oct. 8, 2010) [Docket No. 133]; In re PTC Alliance Corp., Case No. 09-13395 (Bankr. D. Del. Nov. 6, 2009) [Docket No. 226]; In re Hayes Lemmerz Intl, Inc., Case No. 09-11655 (Bankr. D. Del. Sept. 22, 2009) [Docket No. 644]; In re VeraSun Energy Corp., Case No. 08-12606 (Bankr. D. Del. Feb. 19, 2009) [Docket No. 699]; In re Hines Horticulture, Inc., Case No. 08-11922 (Bankr. D. Del. Dec. 9, 2008) [Docket No. 355].4 26. Under Bankruptcy Rule 2002(a) and (c), the Debtors are required to notify

creditors of the proposed Sale. Fed. R. Bankr. P. 2002(a), (c). Additionally, Bankruptcy Rules 6004, 7004, and 9014 provide specific requirements with respect to providing notice of a sale of assets free and clear of claims, liens and encumbrances. Fed. R. Bankr. P. 6004, 7004, 9014. B. The Proposed Sale is Appropriate Outside of a Plan of Reorganization and is Authorized by Section 363 as a Sound Exercise of the Debtors Business Judgment Bankruptcy Code section 363 provides that a debtor, after notice and a hearing,

27.

may use, sell, or lease, other than in the ordinary course of business, property of the estate. 11 U.S.C. 363(b). It is well-established in this jurisdiction that a debtor may sell assets outside of

Because of the voluminous nature of the orders cited herein, such orders are not attached to this motion. Copies of these orders are available upon request to the Debtors counsel.

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a plan of reorganization pursuant to Bankruptcy Code section 363(b) if there is a sound business reason for doing so. See, e.g., Meyers v. Martin (In re Martin), 91 F.3d 389, 395 (3d Cir. 1996); In re Montgomery Ward Holding Corp., 242 B.R. 147, 153 (Bankr. D. Del. 1999); In re Delaware & Hudson Ry. Co., 124 B.R. 169, 175 (Bankr. D. Del. 1991); In re Trans World Airlines, Inc., No. 01-00056, 2001 Bankr. LEXIS 980, at *29 (Bankr. D. Del. Apr. 2, 2001). 28. Courts typically consider the following factors in determining whether a proposed

sale satisfies this standard: (a) whether a sound business justification exists for the sale; (b) whether adequate and reasonable notice of the sale was given to interested parties; (c) whether the sale will produce a fair and reasonable price for the property; and (d) whether the parties have acted in good faith. See In re Delaware & Hudson Ry., 124 B.R. at 176; In re Phoenix Steel Corp., 82 B.R. 334, 33536 (Bankr. D. Del. 1987); In re United Healthcare Sys., Inc., No. 97-1159, 1997 U.S. Dist. LEXIS 5090, at * 1314 and n.2 (D.N.J. Mar. 26, 1997). Delaware & Hudson Railway court further held that: [O]nce a court is satisfied that there is a sound business reason or an emergency justifying the pre-confirmation sale, the court must also determine that the trustee has provided the interested parties with adequate and reasonable notice, that the sale price is fair and reasonable and that the or [proposed] purchaser is proceeding in good faith. In re Delaware & Hudson Ry., 124 B.R. at 176. 29. With respect to the first Abbotts Dairies factor, a sound business purpose for the The

sale of a debtors assets outside the ordinary course of business may be found where such a sale is necessary to preserve the value of assets for the estate, its creditors, or interest holders. See, e.g., In re Abbotts Dairies of Penn., Inc., 788 F.2d 143 (3d Cir. 1986); In re Lionel Corp., 722 F.2d 1063 (2d Cir. 1983). In fact, the paramount goal in any proposed sale of property of the estate is to maximize the proceeds received by the estate. See, e.g., In re Food Barn Stores, Inc., 107 F.3d 558, 56465 (8th Cir. 1997); In re Integrated Res., 147 B.R. at 659. 13

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30.

Furthermore, once the debtor articulates a reasonable basis for its business

decisions (as distinct from a decision made arbitrarily or capriciously), courts generally will not entertain objections to the debtors conduct. Committee of Asbestos-Related Litigants and/or Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986). There is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company. In re Integrated Res., 147 B.R. at 656 (quoting Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985)). Thus, if a debtors actions satisfy the business judgment rule, then the transaction in question should be approved under Bankruptcy Code section 363(b)(1). Indeed, when applying the business judgment standard, courts show great deference to a debtors business decisions. See Pitt v. First Wellington Canyon Assocs. (In re First Wellington Canyon Assocs.), 1989 WL 106838, at *3 (N.D. Ill. 1989) (Under this test, the debtors business judgment . . . must be accorded deference unless shown that the bankrupts decision was taken in bad faith or in gross abuse of the bankrupts retained discretion.). 31. The Debtors proposed Sale clearly satisfies the sound business purpose test of

Abbotts Dairies. The Sale will preserve and maximize the value of the Purchased Assets for the benefit of all stakeholders in these chapter 11 cases, and reflects a sound exercise of the Debtors business judgment. The proposed Sale also satisfies the remaining three Abbotts Dairies factors. The Debtors have provided adequate and reasonable notice of the Sale to interested parties, under the circumstances. The Sale will produce a fair and reasonable price for the Purchased Assets, whether in the form of the consideration already set forth in the Letter of Intent, or any higher consideration achieved following an auction. Finally, the parties have acted in good faith and at arms length at all relevant times. Accordingly, the Debtors submit that they have satisfied

14

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the requirements of Bankruptcy Code section 363(b) to proceed with the Sale and should be permitted to proceed with the Sale contemplated by the Bidding Procedures. C. 32. The Sale of the Assets Free and Clear of Liens is Authorized by Section 363(f) The Debtors further submit that it is appropriate to sell the Purchased Assets

which are estate assets free and clear of claims, liens, and encumbrances (other than any assumed liabilities that the Purchaser agrees to assume in connection with the Sale as will be further described in the APA) pursuant to Bankruptcy Code section 363(f), with any such claims, liens, and encumbrances attaching to the net sale proceeds of the Purchased Assets, as and to the extent applicable. Bankruptcy Code section 363(f) authorizes a debtor to sell assets free and clear of liens, claims, interests and encumbrances if: (a) applicable nonbankruptcy law permits sale of such property free and clear of such interests; (b) such entity consents; (c) such interest is a lien and the price at which such property is to be sold is greater than the value of all liens on such property; (d) such interest is in bona fide dispute; or (e) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. 11 U.S.C. 363(f). 33. This provision is supplemented by Bankruptcy Code section 105(a), which

provides that [t]he Court may issue any order, process or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code]. 11 U.S.C. 105(a).5

Even courts concluding that Bankruptcy Code section 363(f) does not empower them to convey assets free and clear of claims have nevertheless found that Bankruptcy Code section 105(a) of the Bankruptcy Code provides such authority. See Volvo White Truck Corp. v. Chambersburg Beverage, Inc. (In re White Motor Credit Corp.), 75 B.R. 944, 948 (Bankr. N.D. Ohio 1987) (stating that the absence of specific authority to sell assets free and clear of claims poses no impediment to such a

15

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34.

Because Bankruptcy Code section 363(f) is drafted in the disjunctive, satisfaction

of any one of its five requirements will suffice to permit the sale of the Purchased Assets free and clear of liens and interests. See In re Thompson Publishing Holding Co., Inc., Case No. 1013070 (Bankr. D. Del. Nov. 19, 2010) [Docket No. 178] ([t]he [d]ebtors may sell the [p]urchased [a]ssets free and clear of all [l]iens of any kind or nature whatsoever as long as one or more of the standards set forth in section 363(f) of the Bankruptcy Code has been satisfied.); In re Advanta Corp., Case No. 09-13931 (Bankr. D. Del. June 1, 2010) [Docket No. 602] ([P]ursuant to section 363(f) of the Bankruptcy Code, the [s]ale shall be free and clear of any and all liens, claims and encumbrances against the [a]ssets, with such liens, claims and encumbrances, if any, to attach to the proceeds of the [s]ale with the same force, effect and priority as such liens, claims and encumbrances have on the [a]ssets...); In re Aegis Mortgage Corp., Case No. 07-11119 (Bankr. D. Del. Aug. 17, 2010) [Docket No. 5447] (same); In re Foamex Intl Inc., Case No. 09-10560 (Bankr. D. Del. May 27, 2009) [Docket No. 483] ([t]he [p]urchaser would not have entered into the [f]inal APA . . . if the sale of the [p]urchased [a]ssets . . . were not free and clear of all [l]iens and [c]laims . . .); In re Dundee Equity Corp., 1992 Bankr. LEXIS 436, at *12 (Bankr. S.D.N.Y. March 6, 1992) ([s]ection 363(f) is in the disjunctive, such that the sale free of the interest concerned may occur if any one of the conditions of 363(f) have been met.); Citicorp Homeowners Servs., Inc. v. Elliot (In re Elliot), 94 B.R. 343, 345 (E.D. Pa. 1998) (same); Michigan Employment Sec. Commn v. Wolverine Radio Co. (In re Wolverine Radio Co.), 930 F.2d 1132, 1147 n.24 (6th Cir. 1991) (holding that the court may approve the sale free and clear provided at least one of the subsections of Bankruptcy Code section 363(f) is met).
sale, as such authority is implicit in the courts equitable powers when necessary to carry out the provisions of title 11).

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35.

Here, to the extent the Sale is implemented, the Debtors will demonstrate at the

Sale Hearing (to the extent necessary) that one or more of the tests of Bankruptcy Code section 363(f) is satisfied with respect to the Sale. The Debtors Lenders have indicated their likely consent to the sale free and clear of their claims and liens, subject to a final determination based on the APA. The Debtors have no reason to believe that other holders of claims, liens, and encumbrances on the Purchased Assets would withhold their consent to the terms of the Sale pursuant to Bankruptcy Code section 363(f)(2). Alternatively, the Debtors believe that all

holders of claims, liens, and encumbrances on the Purchased Assets could be compelled to accept a money satisfaction of their interests in legal or equitable proceedings in accordance with Bankruptcy Code section 363(f)(5), to the extent that such interests are sought to be discharged in the order approving the relief sought in this motion. Accordingly, the Debtors submit that any claims, liens, and encumbrances on the Purchased Assets will attach to the net proceeds (if any) recognized at the Sale. 36. Based upon the foregoing, the Debtors submit that the Sale, free and clear of

claims, liens, and encumbrances on the Purchased Assets, should be approved by the Court upon the terms requested at the Sale Hearing under Bankruptcy Code section 363(f). D. 37. Assumption and Assignment of the Designated Agreements is Warranted Bankruptcy Code section 105(a) provides that the Court may issue any order,

process or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a). Bankruptcy Code section 365(a) authorizes a debtor in possession to assume an unexpired executory contract subject to the bankruptcy courts approval. 11 U.S.C. 365(a).6

Bankruptcy Code section 365(a) provides: (a) Except as provided in sections 765 and 766 of this title and in subsections (b), (c), and (d) of this section, 38. the trustee, subject to

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Bankruptcy Code section 365(b) requires a debtor in possession to satisfy certain requirements at the time of assumption if a default exists under the subject contract, lease or agreement to be assumed. 11 U.S.C. 365(b).7 Where a debtor is seeking to assume and assign an executory contract, Bankruptcy Code section 365(f) requires the debtor to assume the executory contract in accordance with section 365 and requires the assignee of the executory contract to provide adequate assurance of future performance. 11 U.S.C. 365(f)(2).8

the courts approval, may assume or reject any executory contract or unexpired lease of the debtor.
7

Bankruptcy Code section 365(b) provides, in relevant part: (b)(1) If there has been a default in an executory contract or unexpired lease of the debtor, the trustee may not assume such contract or lease unless, at the time of assumption of such contract or lease, the trustee - (A) cures, or provides adequate assurance that the trustee will promptly cure, such default; (B) compensates, or provides adequate assurance that the trustee will promptly compensate, a party other than the debtor to such contract or lease, for any actual pecuniary loss to such party resulting from such default; and (C) provides adequate assurance of future performance under such contract or lease.

Bankruptcy Code section 365(f) provides, in relevant part: (f) (1) Except as provided in subsections (b) and (c) of this section, notwithstanding a provision in an executory contract or unexpired lease of the debtor, or in applicable law, that prohibits, restricts, or conditions the assignment of such contract or lease, the trustee may assign such contract or lease under paragraph (2) of this subsection. (2) The trustee may assign an executory contract or unexpired lease of the debtor only if (A) the trustee assumes such contract or lease in accordance with the provisions of this section; and (B) adequate assurance of future performance by the assignee of such contract or lease is provided, whether or not there has been a default in such contract or lease.

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38.

In this circuit, courts apply the business judgment rule to determine whether an

executory contract or unexpired lease should be assumed. E.g., Sharon Steel Corp. v. Natl Fuel Gas Distrib. Corp. (In re Sharon Steel Corp.), 872 F.2d 36, 40 (3d Cir. 1989); see NLRB v. Bildisco & Bildisco, 465 U.S. 513, 523 (1984) (describing the business judgment test as the traditional test); In re III Enterprises, Inc. V, 163 B.R. 453, 469 (Bankr. E.D. Pa. 1994) (citations omitted) (Generally, a court will give great deference to a debtors decision to assume or reject the contract. A debtor need only show that its decision to assume or reject the contract is an exercise of sound business judgment- - a standard which we have concluded many times is not difficult to meet.). So long as assumption of the contract or lease is an exercise of the debtors sound business judgment and the debtor otherwise satisfies the requirements of section 365(b), the assumption should be approved. See id. 39. With respect to the Designated Agreements, the Debtors have either remained

current on the obligations associated with such agreements, or timely cure of any monetary defaults will be provided for pursuant to the Purchase Agreement. Under the circumstances of these cases, the requirements of section 365(b)(1)(A)(B) have been or will be satisfied. 40. In addition, PD shall have provided adequate assurance of future performance of

the future obligations related to the Designated Agreements and through further evidence to be provided, as necessary. See Carlisle Homes. Inc. v. Azzari (In re Carlisle Homes, Inc.), 103 B.R. 524, 538 (Bankr. D.N.J. 1989) (holding that the meaning of adequate assurance of future performance depends on the facts and circumstances of each case, but should be given practical, pragmatic construction.); In re Bygaph, Inc., 56 B.R. 596, 60506 (Bankr. S.D.N.Y. 1986) (finding adequate assurance of future performance present when the prospective assignee

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of a lease from the debtors has the financial resources and has expressed a willingness to devote sufficient funding to the business in order to give it a strong likelihood of succeeding; chief determinant of adequate assurance of future performance is whether rent will be paid). Accordingly, Debtors submit that the requirements of the Bankruptcy Code section 365(b)(1)(C) and (f)(2) have been satisfied. E. 41. Relief from the Fourteen-Day Waiting Period under Bankruptcy Rules 6004(h) and 6006(d) is Appropriate. Bankruptcy Rule 6004(h) provides that [a]n order authorizing the use, sale, or

lease of property. . . is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. Similarly, Bankruptcy Rule 6006(d) provides that [a]n order

authorizing the trustee to assign an executory contract or unexpired lease under 365(f) is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. The Debtors respectfully request that the Sale Order be effective immediately by waiving the fourteen (14) day stay periods under Bankruptcy Rules 6004(h) and 6006(d). 42. The purpose of Bankruptcy Rule 6004(h) is to provide sufficient time for an

objecting party to appeal before an order can be implemented. See Advisory Committee Notes to Fed. R. Bankr. P. 6004(h). Although Bankruptcy Rule 6004(h) and the Advisory Committee Notes are silent as to when a court should order otherwise and eliminate or reduce the fourteen (14) day stay period, a leading treatise suggests that the fourteen (14) day stay period should be eliminated to allow a sale or other transaction to close immediately where there has been no objection to the procedure. 10 COLLIER ON BANKRUPTCY 6004.10 (Alan N. Resnick & Henry J. Sommer eds., 15th ed. rev. 2009). Furthermore, if an objection is filed and overruled, and the objecting party informs the court of its intent to appeal, the stay may be reduced to the amount of time actually necessary to file such appeal. Id. 20

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43.

The Debtors submit that the same reasons for waiving Bankruptcy Rule 6004(h)

justify waiving the 14-day stay period under Bankruptcy Rule 6006(d). 44. Therefore, the Debtors respectfully request that the Court waive the fourteen (14)

day stay periods under Bankruptcy Rules 6004(h) and 6006(d) or, in the alternative, if an objection to the Motion is filed, reduce the stay period to the minimum amount of time needed by the objecting party to file its appeal. IX. 45. RESERVATION OF RIGHTS TO SUPPLEMENT THIS MOTION The Debtors hereby expressly reserve their rights to supplement this motion with

respect to any of the relief sought herein, including with respect to the following: providing a copy of the APA, as required by Local Rule 6004-1(b)(i); amending the proposed form of the Sale Order, as required by Local Rule 6004-1(b)(ii); providing any supporting legal and factual justification supporting those provisions that the Debtors are required to highlight pursuant to Local Rule 6004-1, including any provisions that may have the effect of limiting successor liability or requesting relief from Bankruptcy Rule 6004(h); and providing any supporting legal or factual justification to support a finding that the ultimate Purchaser is a good faith purchaser and is entitled to the full protection of Bankruptcy Code section 363(m). X. 46. NOTICE

The Debtors have provided notice of this motion to: (a) the Office of the United

States Trustee for the District of Delaware; (b) proposed counsel to the Committee; (c) counsel to the Agents; (d) counterparties to the Designated Agreements; (e) litigation counterparties; (f) relevant state, county, and municipal taxing authorities; (g) the Delaware Secretary of State; (h) the Delaware Secretary of Treasury; (i) the Delaware State Attorney General; (j) the Office of the United States Attorney General for the State of Delaware; (k) the Internal Revenue Service; 21

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(l) the Securities and Exchange Commission; and (m) parties that have requested notice pursuant to Bankruptcy Rule 2002. In light of the nature of the relief requested in this motion, the Debtors respectfully submit that no further notice is necessary. XI. 47. court. NO PRIOR NOTICE

No prior motion for the relief requested herein has been made to this or any other

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WHEREFORE, for the reasons set forth herein, the Debtors respectfully request that the Court enter an order (a) granting the relief requested herein and (b) granting such other and further relief as may be appropriate. Dated: April 19, 2013 WOMBLE CARLYLE SANDRIDGE & RICE, LLP /s/ Steven K. Kortanek Steven K. Kortanek (DE Bar No. 3106) Thomas M. Horan (DE Bar No. 4641) Ericka F. Johnson (DE Bar No. 5024) 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Telephone: (302) 252-4320 Facsimile: (302) 252-4330 E-mail: skortanek@wcsr.com E-mail: thoran@wcsr.com E-mail: erjohnson@wcsr.com -andKIRKLAND & ELLIS LLP Christopher Marcus, P.C. (admitted pro hac vice) David S. Meyer (admitted pro hac vice) 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 E-mail: christopher.marcus@kirkland.com E-mail: david.meyer@kirkland.com Proposed Counsel to the Debtors and Debtors-inPossession

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: PROMMIS HOLDINGS, LLC, et al.,1 Debtors. ) ) ) ) ) ) ) ) ) Chapter 11 Case No. 13-10551(BLS) (Jointly Administered) Re: D.I. ______________

ORDER APPROVING DEBTORS MOTION TO APPROVE (I) SALE OF CERTAIN ASSETS TO PITE DUNCAN, LLP PURSUANT TO 11 U.S.C. 363(b); (II) ASSUMPTION AND ASSIGNMENT OF DESIGNATED LEASES AND CONTRACTS, AND (III) RELATED BIDDING AND SALE PROCEDURES Upon the motion (the Motion) pursuant to sections 105(a), 363, and 365 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (as amended, the Bankruptcy Code), Rules 2002, 6004, 6006, 9014, and 9019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rules 2002-1 and 6004-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules), for entry of an order (the Sale Order), approving and authorizing (i) the sale (the Sale) of certain assets of the Debtors to Pite Duncan, LLP (the Buyer), (ii) the assumption, assignment and sale of designated leases and contracts (the Designated Agreements, and together with all other purchased assets, the Purchased Assets), as to (i) and (ii), free and clear of all liens, claims, interests and
2

The Debtors in these chapter 11 cases, along with the last four digits of each Debtors federal taxpayeridentification number, are: Prommis Holdings, LLC (6940); Prommis Fin Co. (2965); Prommis Solutions, LLC (9978); E-Default Services LLC (0016); Statewide Tax and Title Services LLC (0049); Statewide Publishing Services LLC (0079); Nationwide Trustee Services, Inc. (2436); Statewide Tax and Title Services of Alabama LLC (7733); Nationwide Trustee Services of Virginia, Inc. (6687); Interface Inc. (9903); and Prommis Homeownership Solutions, Inc. (0569). The location of the Debtors headquarters and the Debtors service address is 400 Northridge Road, Atlanta, Georgia, 30350. Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Motion.

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encumbrances, and (iii) related bidding and sale procedures; and it appearing that due and proper notice of the Motion has been given under the circumstances; and a hearing having been held to consider the relief requested in the Motion (the Hearing); and upon consideration of the record of the Hearing and all proceedings had before the Court; and the Court having found and determined that the relief sought in the Motion is in the best interests of the Debtors estates, their creditors and other parties in interest, and that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and any objections to the requested relief having been withdrawn or overruled on the merits; and after due deliberation and sufficient cause appearing therefor, IT IS HEREBY FOUND AND DETERMINED THAT: A. The findings and conclusions set forth herein constitute the Courts findings of fact

and conclusions of law pursuant to Bankruptcy Rules 7052 and 9014. B. To the extent any of the following findings of fact constitute conclusions of law,

they are adopted as such. To the extent any of the following conclusions of law constitute findings of fact, they are adopted as such. C. The Court has jurisdiction over the Motion and the transactions contemplated by the

Purchase Agreement (the Transactions) pursuant to 28 U.S.C. 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and (N). Venue of these cases and the Motion in this district is proper under 28 U.S.C. 1408 and 1409. D. Proper, timely, adequate, and sufficient notice of the Motion, the Sale Hearing, the

sale of the Purchased Assets, the assumption and assignment of any and all rights with respect to the Designated Agreements (the Assignments), the terms and conditions of the Purchase Agreement, and all of the other Transactions has been provided in accordance with Bankruptcy Code sections 102(1), 363, 365, and 1146(a), Bankruptcy Rules 2002, 6004, 6006, and 9014, and 2

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the Local Rules, such notice was good, sufficient, and appropriate under the particular circumstances, and except as otherwise set forth in this Order, no other or further notice of the Motion, the Sale Hearing, the sale of the Purchased Assets, or the Assignments, is or shall be required. E. F. G. A true and correct copy of the Purchase Agreement was filed on April [____], 2013. The Debtors have extensively marketed the Purchased Assets. The Bidding Procedures were appropriate and necessary in order to maximize value

for the Purchase Assets, and provided proper procedures for the qualification of competing bidders, the submission of qualified overbids, and for the conduct of the auction (the Auction) to determine the highest and best bidder. H. The Administrative Agent (at the direction of the Requisite First Lien Lenders (as

defined in the Credit Agreement)) has had at all relevant times the right to credit bid the full amount of its claims on behalf of the Lenders in connection with the sale of the Purchased Assets contemplated in the Motion. I. The Debtors (i) have full entity governance power and authority to execute the

Purchase Agreement and all other documents contemplated thereby (collectively, the Sale Documents), and the sale of the Purchased Assets by the Debtors has been duly and validly authorized by all necessary entity governance actions, (ii) have the requisite entity power and authority necessary to consummate the Transactions and the Assignments, (iii) have taken all entity governance action necessary to authorize and approve the Sale Documents and the consummation by the Debtors of the Transactions contemplated thereby, and (iv) require no consents or approvals, other than as set forth in this Order or as expressly provided for in the Purchase Agreement, to consummate the Transactions.

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J.

The Debtors have demonstrated and proven to the satisfaction of this Court good,

sufficient, and sound business purposes and justifications for the sale of the Purchased Assets, the Assignment, and consummation of the Transactions contemplated by the Purchase Agreement and this Order, pursuant to Bankruptcy Code sections 363(b) and 365(f)(2). Entry into the Purchase Agreement, the Assignment, and consummation of the Transactions constitutes the exercise by the Debtors of sound business judgment and such acts are in the best interests of the Debtors estates. The business reasons justifying the sale of the Purchased Assets include, but are not limited to, the following facts: (a) the Purchase Agreement constitutes the highest and best offer for the Purchased Assets; (b) the Purchase Agreement and the closing of the Transactions will present the best opportunity to realize the maximum value of the Purchased Assets; and (c) the consideration provided by the Buyer for the purchase of the Purchased Assets pursuant to the Sale Documents exceeds what the Debtors would otherwise be able to realize in a separate liquidation of the Purchased Assets. K. The Sale Documents and the Transactions contemplated by the Sale Documents

were negotiated and have been and are undertaken by the Debtors and the Buyer at arms-length, without collusion or fraud, and in good faith within the meaning of Bankruptcy Code section 363(m). As a result of the foregoing, the Debtors and the Buyer are entitled to the protections of Bankruptcy Code section 363(m). Neither the Debtors nor the Buyer has engaged in any conduct that would cause or permit the Purchase Agreement or any other Sale Document to be avoided under Bankruptcy Code section 363(n). The Buyer has not otherwise violated Bankruptcy Code section 363(n) by any action or inaction, and the Transactions do not violate the provisions of Bankruptcy Code section 363(n). The Buyer is not an insider of the Debtors, as that term is defined in Bankruptcy Code section 101(31).

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L.

The aggregate consideration provided by the Buyer for the Purchased Assets and the

Assignments pursuant to the Sale Documents (i) is fair and reasonable, (ii) is the highest or best offer for the Purchased Assets, and (iii) will provide a greater recovery for the Debtors estates than would be provided by any other practical, available alternative. The terms and conditions of each of the Sale Documents are fair and reasonable. Therefore, the sale contemplated by the Purchase Agreement is in the best interests of the Debtors, their estates, and other parties in interest, and is an exercise of the Debtors sound business judgment. M. The transfer of the Purchased Assets to the Buyer will be a legal, valid, and effective

transfer of the Purchased Assets and, except as otherwise set forth in the Sale Documents, will vest the Buyer with all right, title, and interest of the Debtors in and to the Purchased Assets, free and clear of all Liens and Interests of any kind or nature whatsoever. N. The Debtors may sell the Purchased Assets free and clear of all Liens and Interests

of any kind or nature whatsoever because, in each case, one or more of the standards set forth in Bankruptcy Code sections 363(f)(1)(5) has been satisfied. Specifically, each entity with a security interest in the Purchased Assets, if any such entity exists other than the Agents and the Lenders, has consented to the sale, is deemed to have consented to the sale, or could be compelled in a legal or equitable proceeding to accept a money satisfaction of such interest, or the sale of the Purchased Assets otherwise satisfies the requirements of Bankruptcy Code section 363(f). To that end, those nondebtor parties with Interests in the Purchased Assets who did not object, or who withdrew their objections, to the Purchase Agreement or the Motion are deemed to have consented to such sale pursuant to Bankruptcy Code section 363(f)(2). Those nondebtor parties with Interests in the Purchased Assets who did object fall within one or more of the other subsections of Bankruptcy Code section 363(f) and are adequately protected by having their Interests, if any, attach to the cash proceeds of the Transactions ultimately attributable to the Purchased Assets against or in which 5

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they assert an Interest with the same validity, force, and effect which they now have, subject to any claims and defenses the Debtors and/or other parties in interest possess with respect thereto. O. Approval of the Sale Documents, the Assignments, and consummation of the sale of

the Purchased Assets at this time are in the best interests of the Debtors, their estates, their stakeholders, and other parties in interest. For all of the foregoing reasons and after due deliberation, the Court hereby ORDERS, ADJUDGES, AND DECREES that: General Provisions 1. 2. respects. Bidding Procedures Approved 3. 4. The Bidding Procedures Notice attached hereto as Exhibit 1 is approved. The Debtors actions in implementing the Bidding Procedures are approved and The Motion is GRANTED as set forth herein. The Sale of the Purchased Assets to the Buyer is approved and authorized in all

ratified in all respects. Objections Overruled 5. Any and all objections and responses concerning the Motion are resolved in

accordance with the terms of this Order. To the extent any such objections or responses were not otherwise withdrawn, waived, or settled, all such objections, and all reservations of rights or relief requested therein, are hereby overruled on the merits and denied with prejudice. Fair Consideration; Good Faith Purchaser 6. The consideration provided by the Buyer for the Purchased Assets shall be

deemed for all purposes to constitute value and fair consideration under the Bankruptcy Code and

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any other applicable law, and the Sale may not be avoided, or costs or damages imposed or awarded, under section 363(n) or any other provision, of the Bankruptcy Code. 7. The Sale is undertaken by the Buyer in good faith, the Buyer is a purchaser in

good faith of the Purchased Assets as that term is used in Bankruptcy Code section 363(m), and the Buyer is entitled to all of the protections afforded by Bankruptcy Code section 363(m); accordingly, the reversal or modification on appeal of the authorization provided herein to consummate the Sale shall not affect the validity of the Sale of the Purchased Assets to the Buyer, unless such authorization is duly stayed pending such appeal. Approval of the Agreements and Authority to Close 8. The Debtors are authorized and directed to take any and all actions necessary or

appropriate to: (i) consummate the sale of the Purchased Assets to the Buyer (including, without limitation, to convey to the Buyer any and all of the Purchased Assets) and the closing of the Sale in accordance with the Motion, the Purchase Agreement, and this Order; and (ii) perform, consummate, implement and close fully the Purchase Agreement together with all additional instruments and documents that may be reasonably necessary or desirable to implement the Purchase Agreement. The parties shall have no obligation to proceed with the closing of the Purchase Agreement and Sale until all conditions precedent to their obligations to do so as set forth therein have been met, satisfied or waived. 9. The Buyer is authorized and directed at closing and thereafter as scheduled to

remit or cause to be remitted the pecuniary consideration required in the Purchase Agreement to the Agents for the benefit of the Lenders, to be applied to the Obligations in accordance with the Loan Documents.

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Sale Free and Clear 10. In accordance with Bankruptcy Code section 363(f), upon the closing of the Sale,

(a) the Debtors are hereby authorized and directed to consummate, and shall be deemed for all purposes to have consummated, the sale, transfer and assignment of the assets to the Buyer free and clear of any and all liens, claims, and encumbrances, and (b) except as otherwise expressly provided in the Purchase Agreement, all such liens, claims, and encumbrances in Purchased Assets which are estate assets shall be and hereby are released, terminated, and discharged as to the Buyer and such Purchased Assets. 11. Subject to the occurrence of the closing of the Sale, this Order (a) is and shall be

effective as a determination that, upon closing, all liens, claims, and encumbrances existing as to the Purchased Assets which are estate assets conveyed to the Buyer have been and hereby are adjudged and declared to be unconditionally released, discharged, and terminated, and (b) is and shall be binding upon and govern the acts of all entities, including, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies or units, governmental departments or units, secretaries of state, federal, state and local officials and all other persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of the Purchased Assets conveyed to the Buyer. All such entities described above in this paragraph are authorized and specifically directed to strike all recorded liens, claims, and encumbrances against the Purchased Assets from their records, official and otherwise and including without limitation those liens, claims, and encumbrances listed in the applicable schedules to the Purchase Agreement, if any.

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12.

If any person or entity, which has filed statements or other documents or

agreements evidencing liens, claims, and encumbrances on or in the Purchased Assets shall not have delivered to the Debtors prior to the closing, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, releases of liens, claims, and encumbrances, and any other documents necessary for the purpose of documenting the release of all liens, claims, and encumbrances which the person or entity has or may assert with respect to the Purchased Assets, the Debtors and Purchased Assets are hereby authorized and directed to execute and file such statements, instruments, releases and other documents on behalf of such person or entity with respect to the Purchased Assets. 13. Except as expressly permitted or otherwise specifically provided by the Purchase

Agreement or this Order, all persons and entities, including, but not limited to, all debt security holders, equity security holders, governmental, tax, and regulatory authorities, lenders, employees, and other creditors, holding Liens and Interests of any kind or nature whatsoever (whether legal or equitable, secured or unsecured, matured or unmatured, contingent or noncontingent, senior or subordinated), arising under or out of, in connection with, or in any way relating to, the Debtors, the Purchased Assets, the operation of the Debtors business prior to the Effective Date of the Plan or the closing, the transfer of the Purchased Assets to the Buyer, or the Assignments to the Buyer, are forever barred, estopped, and permanently enjoined from asserting against the Buyer, its successors or assigns, its property, or the Purchased Assets, such persons or entities Liens and Interests. Assignment and Assumption of Assumed Contracts 14. The Debtors are hereby authorized and directed, in accordance with section

365(b) of the Bankruptcy Code, which shall include the authorization to permit the Debtors to: (i) assume and assign to Buyer, the Assigned Agreements, with payment of all cure amounts 9

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thereunder through the Closing Date (the Cure Amounts) being made in accordance with terms of the Purchase Agreement; and (ii) execute and deliver to Buyer such assignment documents as may be necessary to sell, assign, and transfer the Assigned Agreements. 15. Pursuant to Bankruptcy Code section 365(f)(2), the Assignments are authorized

and approved, and following consummation of the Assignments, the Debtors shall be absolved, released, and otherwise free from any and all liability and obligations arising from or related to the Assigned Agreements pursuant to Bankruptcy Code section 365(k). 16. Buyers adequate assurance of future performance under the Assigned Agreement

shall consist solely of its promise to perform pursuant to the terms and conditions of those agreements. 17. Upon the Closing of the Purchase Agreement in accordance with this Sale Order,

any and all defaults under the Assigned Agreements shall be deemed cured in all respects. 18. All provisions limiting the assumption and/or assignment of any of the Assigned

Agreements are invalid and unenforceable pursuant to Bankruptcy Code section 365(f). The foregoing shall also apply to any transfer of the Purchased Assets to one or more of Buyers affiliates or designees in connection with the Purchase Agreement. 19. Upon the request of the Debtors or the Buyer, each party to an Assigned

Agreement that is subject to a lease or prime lease is hereby directed to promptly deliver to Buyer a copy of such lease or prime lease. 20. Each of the counterparties to the Assigned Agreements is hereby directed to

promptly and fully cooperate with respect to the consummation of the Purchase Agreement and the transactions contemplated thereby. Such counterparties shall, if requested by the Debtors or Buyer, deliver true and complete copies of all Assigned Agreements and any information relating thereto and shall further execute and deliver memoranda of lease in recordable form, estoppel 10

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certificates and all other agreements, documents, certificates, and other instruments that may be requested by the Debtors or Buyer. Services Agreement 21. Upon the Closing, the Services Agreement shall be deemed rejected, terminated

and/or cancelled. 22. The Debtors and their estates, and Buyer, together with their successors and

assigns, partners, directors, managers and officers, effective upon closing under the Purchase Agreement, waive and release each other from any and all claims, known or unknown, arising from the business relationship of the Debtors and Buyer up to and including the closing date, which release shall be binding upon any trustee appointed in any of the Debtors cases; provided, however, that such release shall be subject to the requirement that Buyer and Sellers continue to perform all obligations under the Purchase Agreement, and such release. Additional Provisions 23. This Order and the Purchase Agreement shall be binding in all respects upon all

creditors and equity holders of any of the Debtors, all successors and assigns of the Debtors and their affiliates and subsidiaries, and any trustees, examiners, responsible persons, or other fiduciaries appointed in the Debtors bankruptcy cases or upon a conversion to chapter 7 under the Bankruptcy Code, and the Purchase Agreement shall not be subject to rejection or avoidance under any circumstances. 24. Under no circumstances shall the Buyer be deemed a successor of or to the

Debtors or their bankruptcy estates for any claims, Liens, or Interests against or in the Debtors, or the Purchased Assets, of any kind or nature whatsoever other than as provided for in the Purchase Agreement or this Order.

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25.

The Purchase Agreement and any related agreements, documents, or other

instruments may be modified amended, or supplemented by the parties thereto, in a writing signed by the parties, and in accordance with the terms thereof, without further order of the Court, provided that any such modification, amendment, or supplement does not have a material adverse effect on the Debtors estates. 26. The releases of PD by the Debtors provided for in the Purchase Agreement are

approved under Bankruptcy Rule 9019. 27. Nothing contained in any order entered in the Debtors bankruptcy cases

subsequent to entry of this Order, or in any chapter 11 plan confirmed in these chapter 11 cases, shall conflict with or derogate from the provisions of the Purchase Agreement or the terms of this Order. 28. This Order shall be effective immediately upon entry, and any stay of orders

provided for in Bankruptcy Rules 6004(h), 6006(d), and any other provision of the Bankruptcy Code or Bankruptcy Rules is expressly lifted. 29. 30. The provisions of this Order are nonseverable and mutually dependent. The failure specifically to include or make reference to any particular provisions

of the Purchase Agreement in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of the Court that the Purchase Agreement is authorized and approved in its entirety. 31. All time periods set forth in this Order shall be calculated in accordance with

Bankruptcy Rule 9006(a). 32. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Motion.

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33.

The Court retains jurisdiction with respect to all matters arising from or related to

the interpretation or implementation of this Order.

Dated: _________________, 2013

_______________________________________ The Honorable Brendan Linehan Shannon United States Bankruptcy Judge

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