Case 10-44748-KCF

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UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY

Caption in Compliance with D.N.J. LBR 9004-2(c)

NORRIS, McLAUGHLIN & MARCUS, PA 721 Route 202-206, Suite 200 P.O. Box 5933 Bridgewater, New Jersey 08807-5933 (908) 722-0700 (Tel) (908) 722-0755 (Fax) Morris S. Bauer, Esq. Joseph R. Zapata, Jr., Esq. Counsel for the Debtor/Debtor-In-Possession In Re: VISUAL MANAGEMENT SYSTEMS, INC., et. al., Debtors. Chapter 11 Case No.: 10-44748(KCF) Hearing Date: October 24, 2011

ORDER AUTHORIZING THE DEBTORS TO SELL PROPERTY FREE AND CLEAR OF ALL LIENS, CLAIMS AND INTERESTS TO VIRTUAL MOBILE SECURITY, INC. PURSUANT TO 11 U.S.C. 363 AND WAIVING THE TEN DAY REQUIREMENT PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 6004(h) The relief set forth on the following page(s) numbered two (2) through six (6) is hereby ORDERED.

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Page 2 of Debtor: Visual Management Systems, Inc., et. al. Case No.: 10-44748 (KCF) Caption of Order: Order Authorizing the Debtors to Sell Property Free and Clear of all Liens, Claims and Interests to Virtual Mobile Security, Inc. Corporation Pursuant to 11 U.S.C. 363 and Waiving the Ten Day Requirement Pursuant to Federal Rule of Bankruptcy Procedure 6004(h)

THIS MATTER having been opened to the Court on the Motion of Visual Management Systems, Inc. (VMS, Inc.), Visual Management Systems Holding, Inc. (VMSH, Inc.), Visual Management Systems, LLC (VMS, LLC) and Intelligent Product Development Group, LLC (IPDG), the above-captioned debtors and debtors-in-possession (collectively, the Debtors), by and through counsel, Norris, McLaughlin & Marcus, P.A., for entry of an order authorizing the Debtors to sell property free and clear of all liens, claims and interests to Virtual Mobile Security Inc. o/b/o Adaptive Visual Applications, Corp. (the Motion); and due and proper notice of the Motion having been given to all parties entitled to notice thereof; and the Court having considered the pleadings and arguments in support of the Motion as well as in opposition thereto, if any; and the Court having heard oral argument on the motion; and all objections to the motion having either been withdrawn or overruled; and good and sufficient cause existing for entering the within Order; it is hereby ORDERED as follows: 1. 2. The Motion is hereby granted in all respects. Due and proper notice of the Motion has been given to all parties who are entitled

to notice under the circumstances. 3. Upon entry of this Order, the Debtors are hereby authorized pursuant to 11 U.S.C.

363(b) to sell to Virtual Mobile Security Inc. o/b/o Adaptive Visual Applications, Corp. (VMSI) assets (the Assets) as more particularly referenced in that certain Asset Purchase Agreement (the APA) attached hereto and incorporated herein by reference as Exhibit A, for an aggregate
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Page 3 of Debtor: Visual Management Systems, Inc., et. al. Case No.: 10-44748 (KCF) Caption of Order: Order Authorizing the Debtors to Sell Property Free and Clear of all Liens, Claims and Interests to Virtual Mobile Security, Inc. Corporation Pursuant to 11 U.S.C. 363 and Waiving the Ten Day Requirement Pursuant to Federal Rule of Bankruptcy Procedure 6004(h)

purchase price of $180,000 plus Common Stock of Virtual Mobile Security, Inc. and the assumption of certain liabilities (the Sale), and to thereafter disburse the proceeds of such sale (the Purchase Price) pursuant to the terms of the APA. 4. Assets of the Debtors excluded from the Sale include, without limitation, any and all

cash on hand and any and all causes of action. 5. All of the proceeds from the Sale shall be indefeasibly paid directly to Enable Growth

Partners LP, Enable Opportunity Partners LP and Pierce Diversified Strategy Master Fund LLC ENA (collectively, Enable) and Enable shall be responsible for making certain payments in accordance with Section 2.3(b) of the APA. 6. For avoidance of doubt, Enable shall have no liability to pay the amounts set forth in

Section 2.3(b) of the APA, except from payments actually received from VMSI. 7. The sale of the Assets to VMSI is found to be for fair value and to have a

substantial business justification. 8. VMSI is found to be a good faith purchaser pursuant to 11 U.S.C. 363(m) and

entitled to the protections set forth therein. The sale of the Assets by the Debtors to VMSI shall be free and clear of all liens, claims, interests and encumbrances, including any and all claims for successor liability arising out of or relating to the business conducted by the Debtors at any time prior to consummation of the sale of the Assets or arising out of or relating to the Assets, provided, however that Enable and the Debtors shall retain a first priority, duly perfected and preferred lien on and solely limited to the Assets in accordance with the Sale Order without the
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Page 4 of Debtor: Visual Management Systems, Inc., et. al. Case No.: 10-44748 (KCF) Caption of Order: Order Authorizing the Debtors to Sell Property Free and Clear of all Liens, Claims and Interests to Virtual Mobile Security, Inc. Corporation Pursuant to 11 U.S.C. 363 and Waiving the Ten Day Requirement Pursuant to Federal Rule of Bankruptcy Procedure 6004(h)

need of recording a UCC statement until such date that the Purchase Price has been paid in full. Enable shall be solely allowed to enforce the lien and any remedies under the Bankruptcy Code or applicable non-bankruptcy law to recover the Purchase Price or the Assets, as applicable. 9. Enable shall retain its first priority, duly perfected liens and security interests on the

Debtors non-Sale Assets in accordance with that certain Security Agreement dated as of November 30, 2007 and filed UCC-1 financing statements. 10. Enable shall retain the full amount of its secured claim against the Debtors non-Sale Assets, less the Purchase Price actually received by Enable in accordance with the terms of the APA. 11. The Court hereby intends that the general rule that the acquirer of the Debtors Assets shall not be liable for the debts or liabilities of the Debtors shall apply. VMSI has not expressly or impliedly assumed any liabilities of the Debtors, except as set forth in the APA; is not engaged in an actual or defacto merger with the Debtors; is not affecting a fraud upon the Debtors creditors; and is not engaging in conduct which justifies the application of the product line exception to the general rule that successor liability shall not apply. These determinations shall be deemed to have been litigated, actually determined and essential to this Order such that all of the Debtors creditors and parties in interest shall be collaterally estopped from asserting otherwise. Any liens, claims, interests and encumbrances on the Assets shall be transferred to and attach to the proceeds of the sale thereof to the same extent and with the same priority, force, validity,

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Page 5 of Debtor: Visual Management Systems, Inc., et. al. Case No.: 10-44748 (KCF) Caption of Order: Order Authorizing the Debtors to Sell Property Free and Clear of all Liens, Claims and Interests to Virtual Mobile Security, Inc. Corporation Pursuant to 11 U.S.C. 363 and Waiving the Ten Day Requirement Pursuant to Federal Rule of Bankruptcy Procedure 6004(h)

status and effect as they had against the Assets prior to the sale thereof, and shall be promptly disbursed by the Debtors pursuant to the provisions of paragraph 3 herein. 12. The Debtors have full corporate power and authority to, and are hereby authorized and directed to, execute, acknowledge and deliver such certificates, deeds, assignments, conveyances, bills of sale and other assurances, documents, and instruments of transfer and take such other actions as may be reasonably necessary to consummate the sale of the Assets to VMSI and shall take any other action that may reasonably be requested by VMSI for the purpose of transferring and conveying the Assets to VMSI without further order of this Court. 13. The provisions of this Order shall be self-executing and neither the Debtors nor VMSI shall be required to execute or file any releases, termination statements, assignments or other instruments in order to effectuate consummation of the transfer of the Assets or to implement the foregoing provisions hereof. 14. This Order shall be binding upon the Debtors estate(s), successors and assigns, including without limitation, any trustees hereafter appointed for the Debtors, whether appointed under Chapter 11 or Chapter 7 of the Bankruptcy Code. 15. This Order is a final order in accordance with Rule 8001(a) of the Federal Rules of Bankruptcy Procedure. 16. Notwithstanding the provisions of Rule 6004(h) of the Federal Rules of Bankruptcy Procedure, this Order shall be effective immediately and shall not be stayed for any reason.

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Page 6 of Debtor: Visual Management Systems, Inc., et. al. Case No.: 10-44748 (KCF) Caption of Order: Order Authorizing the Debtors to Sell Property Free and Clear of all Liens, Claims and Interests to Virtual Mobile Security, Inc. Corporation Pursuant to 11 U.S.C. 363 and Waiving the Ten Day Requirement Pursuant to Federal Rule of Bankruptcy Procedure 6004(h)

17. This Court shall retain jurisdiction with respect to the enforcement of any and all of the terms and/or provisions of the Sale, the Letter Agreement and this Order.

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