united states bankruptcy court eastern ......- 2 - date, time and place for auction, and (e)...

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK

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In re: Décor Holdings, Inc., et al.,1 Debtors.

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Chapter 11 Case No. 19-71020 (REG) Case No. 19-71022 (REG) Case No. 19-71023 (REG) Case No. 19-71024 (REG) Case No. 19-71025 (REG) Substantively Consolidated

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FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER (I) CONFIRMING THIRD AMENDED JOINT CHAPTER 11

PLAN OF LIQUIDATION PROPOSED BY THE DEBTORS AND (II) APPROVING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS’ ASSETS

A hearing was held before this Court on May 2, 2019 (the “Confirmation Hearing”) to

consider (i) confirmation of the Third Amended Joint Chapter 11 Plan of Liquidation Proposed by

the Debtors (the “Plan”) filed by the above-captioned debtors (the “Debtors”) and (ii) approval of

the Sale of Substantially All of the Debtors’ Assets.2

The Court having entered on March 14, 2019 (Doc. No. 145) the Order (A) Approving Bid

Procedures in Connection with the Sale of Substantially All of the Debtors’ Assets, (B)

Authorizing the Debtors to Enter Into Stalking Horse Agreements And Approving Certain Bid

Protections (C) Scheduling an Auction for Sale of Assets, (D) Approving Notice of Respective

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: Décor Holdings, Inc. (4174); Décor Intermediate Holdings LLC (5414); The Robert Allen Duralee Group, Inc. (8435); The Robert Allen Duralee Group, LLC (1798); and The Robert Allen Duralee Group Furniture, LLC (2835). The corporate headquarters and the mailing address for the Debtors listed above is 49 Wireless Boulevard, Suite 150, Hauppauge, NY 11788. The Debtors also maintain a separate corporate office at 2 Hampshire Street, Suite 300, Foxboro, MA 02035.

2 Capitalized terms used herein but not defined shall have the meanings ascribed to them in the Plan.

Case 8-19-71020-reg Doc 303 Filed 05/06/19 Entered 05/06/19 11:29:55

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Date, Time And Place for Auction, And (E) Granting Related Relief (the “Bid Procedures Order”);

and the Debtors having filed on April 12, 2019 (Doc. No. 232) a Notice of Designation of Stalking

Horse Bidder, pursuant to which the Debtors selected RADG Holdings LLC (“Stalking Horse”) as

the Stalking Horse Bidder as set forth in the Asset Purchase Agreement by and between the Debtors

and the Stalking Horse dated as of April 12, 2019 (the “Stalking Horse APA”); and the Court

having entered on April 15, 2019 (Doc. No. 239) the Order (A) Approving Procedures for the

Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (B)

Approving Form and Manner of Notice Thereof, and (C) Granting Related Relief (the

“Assumption Procedures Order”); and the Debtors having filed on April 26, 2019 (Doc. No. 276),

a Notice of (I) Cancellation of Auction And Designation of Stalking Horse Bidder As the

Successful Bidder And (II) Proposed Assumption And Assignment of Certain Executory Contracts

And Unexpired Real Property Leases (the “Assumption Notice”), pursuant to which the Debtors,

after consultation with the Consultation Parties, (a) determined in the exercise of their business

judgment that (i) the Stalking Horse Bidder should be and was designated as the Successful Bidder

for the Assets (the “Purchaser”), (ii) the Purchaser’s offer as set forth in the Stalking Horse APA

is the highest and best offer received for the purchase of substantially all of the Debtors’ assets, a

copy of which is annexed hereto as Exhibit 1 (as may be amended, the “APA”); and (iii) the

Auction scheduled for April 29, 2019 should be cancelled and (b) provided notice to the

counterparties of those contracts and unexpired real property leases listed on a schedule annexed

thereto which the Purchaser has designated for assumption by the Debtors and assignment to the

Purchaser pursuant to section 365 of the Bankruptcy Code (the “Proposed Assigned Contracts”);

and pursuant to the terms of the APA, the Debtors and the Purchaser are entering into a Transition

Services Agreement, a copy of which is being filed concurrently on the Docket (as may be


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amended, the “TSA”), pursuant to which the Debtors will be providing certain transition services

for approximately 60-90 days after the closing on the sale (the “Transition Services Period”); and

the Court having reviewed the Plan, the Disclosure Statement, the APA, the TSA and other

materials submitted in support of the Plan and the Sale; and the Court having considered the record

compiled in the Chapter 11 Cases; and the Court having considered, among other things, the

Declaration of Paul H. Deutch Regarding the Methodology for the Tabulation of Votes on And

Results of Voting With Respect to the Second Amended Joint Chapter 11 Plan of Liquidation

Proposed by the Debtors dated April 30, 2019 (Doc. No 279) (“Certification of Ballots”), the

testimony of Timothy Boates, Chief Restructuring Officer, in support of (i) confirmation of the

Third Amended Joint Chapter 11 Plan of Liquidation Proposed by the Debtors and (ii) the Sale

(the “Boates Testimony”), the testimony of J. Scott Victor, Managing Director of SSG Advisors,

LLC, investment bankers to the Debtors, in support of the Sale (the “Victor Testimony”), and the

Memorandum of Law in Support of Entry of an Order (I) Confirming the Third Amended Joint

Chapter 11 Plan of Liquidation Proposed by the Debtors and (II) Approving the Sale of the

Purchased Assets [Doc No. 290] (the “Memorandum of Law”); and this Court concurrently

entering the Final Order Pursuant to Final Order Pursuant To 11 U.S.C. §§ 105, 361, 362, 363,

364, And 507 And Fed. R. Bankr. P. 2002, 4001 And 9014 (i) Authorizing Debtors And Debtors

In Possession To Obtain Postpetition Financing, (ii) Authorizing Use Of Cash Collateral, (iii)

Granting Liens And Super-Priority Claims, (iv) Granting Adequate Protection To Prepetition

Secured Lenders, (v) Modifying The Automatic Stay; (vi) Scheduling A Final Hearing, and (vii)

Granting Related Relief (the “Final DIP Order”) ; and for the reasons stated orally and recorded in

open court, for the representations of counsel at the Confirmation Hearing, and for the following


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reasons, all of which together shall constitute the decision, findings of fact, and conclusions of law

of this Court; NOW THEREFORE,

IT IS HEREBY FOUND, DETERMINED, ORDERED, ADJUDGED AND DECREED,

AS FOLLOWS:

Findings of Fact and Conclusions of Law

a. Findings and Conclusions. The findings and conclusions set forth herein and in the

record of the Confirmation Hearing constitute this Court’s findings of fact and conclusions of law

pursuant to Rule 52 of the Federal Rules of Civil Procedure, as made applicable herein by Rules

7052 and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). 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.

b. Jurisdiction and Venue. This Court has jurisdiction over these Chapter 11 Cases,

the Sale of the Purchased Assets, and confirmation of the Plan pursuant to 28 U.S.C. § 1334. Sale

of the Purchased Assets and Confirmation of the Plan are core proceedings pursuant to 28 U.S.C.

§ 157(b) and this Court has jurisdiction to enter a final order with respect thereto. The Debtors are

eligible to be debtors under Section 109 of title 11 of the United States Code (the “Bankruptcy

Code”). Venue is proper before the Court pursuant to 28 U.S.C. §§ 1408 and 1409.

c. Judicial Notice. The Court takes judicial notice of the docket of the Debtors’

Chapter 11 Cases, which is maintained by the Clerk of the Court, including, without limitation, all

pleadings and other documents filed, all orders entered, and the transcripts of, and all evidence and

arguments made, proffered or adduced at, the hearings held before the Court during the pendency

of the Chapter 11 Cases.


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d. Solicitation and Notice. On April 15, 2019, the Court entered the Order

(I) Approving the Disclosure Statement, (II) Establishing Plan Solicitation and Voting Procedures,

(III) Scheduling a Confirmation Hearing, and (IV) Establishing Notice and Objection Procedures

for Confirmation of Debtors’ Chapter 11 Plan of Liquidation [Doc. No. 238] (the “Solicitation

Procedures Order”). The Solicitation Procedures Order, among other things, approved the

Disclosure Statement for Second Amended Plan of Liquidation Proposed by the Debtors [Doc.

No. 241] (the “Disclosure Statement”) as containing “adequate information” within the meaning

of Section 1125 of the Bankruptcy Code. Pursuant to the Solicitation Procedures Order, the

Debtors distributed certain packages of information (the “Solicitation Packages”) to all creditors

and interest holders entitled to receive the Solicitation Packages. Each Solicitation Package

contained:

i. the Confirmation Hearing Notice, which included a link to copies of the Solicitation Procedures Order, the Disclosure Statement and the Plan;

ii. to the Voting Classes, a Ballot customized for such holder and a return envelope; and

iii. to Non-Voting Classes, a Notice of Non-Voting Status.

The Solicitation Packages were served in compliance with the Bankruptcy Code, the Bankruptcy

Rules, and the Solicitation Procedures Order. As described in the Solicitation Procedures Order,

and as evidenced by the Certification of Ballots, (i) the service of the Solicitation Packages was

adequate and sufficient under the circumstances of these Chapter 11 Cases and (ii) adequate and

sufficient notice of the Confirmation Hearing and other requirements, deadlines, hearings and

other matters described in the Solicitation Procedures Order was timely provided in compliance

with the Bankruptcy Code and Bankruptcy Rules, and provided due process and an opportunity to

be heard to all parties in interest.


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Due, proper and adequate notice of the Auction and the Sale has been provided pursuant

to the Bid Procedures Order and in accordance with sections 102(1) and 363 of the Bankruptcy

Code and Bankruptcy Rules 2002, 6004, 6006 and 9014. Such notice was good, sufficient and

appropriate under the particular circumstances, and no further or other notice of the Auction or

Sale is or shall be required.

Due, proper and adequate notice of the assumption and assignment and cure amounts of

the Assigned Contracts in the Assumption Notice has been provided pursuant to the Assumption

Procedures Order in accordance with sections 102(1) and 365 of the Bankruptcy Code and

Bankruptcy Rules 2002, 6004, 6006 and 9014.

e. Voting. The Solicitation Procedures Order fixed April 26, 2019 at 4:00 p.m.

(prevailing Eastern Time) as the Voting Deadline. The Debtors, through their designated voting

agent, tabulated the Ballots accepting and rejecting the Plan. As set forth in the Certification of

Ballots, the Debtors have satisfied the ballot tabulation procedures set forth in the Solicitation

Procedures Order and properly tabulated the Ballots received with respect to the Plan.

As set forth in the Certification of Ballots, the Plan has been accepted within the meaning

of Section 1126(a) of the Bankruptcy Code by Class 1 and Class 5 Claims, rejected by Class 2

Claims, and received no votes from holders of Class 3 Claims. The holders of such Claims are

impaired under the Plan. The holders of Class 4 Claims are unimpaired under the Plan, are

conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy

Code, and therefore are not entitled to vote on the Plan. The holders of Class 6 Intercompany

Claims were not entitled to vote as these cases have been substantively consolidated and such

Claims have been expunged. The holders of Class 7 Interests shall not receive any distribution


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under the Plan, are deemed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy

Code, and therefore are not entitled to vote on the Plan.

f. Burden of Proof. The Debtors have met their burden of proving the elements of

Section 1129 of the Bankruptcy Code by a preponderance of the evidence, which is the applicable

standard.

I. Compliance with the Requirements of Section 1129 of the Bankruptcy Code

g. Plan Compliance – Section 1129(a)(1). The Plan complies with all applicable

provisions of the Bankruptcy Code. The Plan designates seven (7) Classes of Claims and/or

Interests. The Plan adequately and properly classifies all Claims and Interests required to be

classified and thus satisfies the requirements of Sections 1122 and 1123(a)(1) of the Bankruptcy

Code. Under the Plan, four Classes of Claims (i.e., Classes 1, 2, 3 and 5) are impaired and entitled

to vote. Class 4, consisting of Priority Claims are unimpaired and is therefore deemed to have

accepted the Plan. Class 7, consisting of Interests, is impaired, but shall not receive any

distributions under the Plan and is therefore deemed to reject the Plan. The Plan adequately

specifies the treatment of each impaired Class of Claims and Class of Interests and thus satisfies

the requirements of Section 1123(a)(3) of the Bankruptcy Code. The Plan provides the same

treatment for each Claim in a particular Class, unless the holder of a particular Claim agrees to less

favorable treatment of such Claim. The Plan thus satisfies the requirements of Section 1123(a)(4)

of the Bankruptcy Code. No election for application of Section 1111(b)(2) of the Bankruptcy Code

by any Class of secured creditors was made under Bankruptcy Rule 3014. Article 5 of the Plan,

along with the other provisions of the Plan, provides adequate means for implementation of the

Plan. Pursuant to Article 9.1 of the Plan, upon the Effective Date, all Estate Assets (which, for the

avoidance of doubt, exclude the Purchased Assets upon the Closing Date as defined in the APA)


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will vest in the Post-Confirmation Debtors free and clear of all Claims, liens, encumbrances,

charges and other interests, except as provided in the Plan. The Plan thus satisfies Section

1123(a)(5) of the Bankruptcy Code.

Section 1123(a)(6) of the Bankruptcy Code is inapplicable because all Interests will be

canceled pursuant to the provisions of the Plan, the Debtors are liquidating, and neither the Debtors

nor the Post-Confirmation Debtors will issue equity securities.

The Plan contains other provisions for implementation that are reasonable and otherwise

consistent with Sections 1123(a)(7) and 1123(b) of the Bankruptcy Code.

h. Proponent Compliance – Section 1129(a)(2). The Debtors, as the Plan proponents,

have complied with the applicable provisions of the Bankruptcy Code and the Bankruptcy Rules.

The Debtors solicited acceptances of the Plan in accordance with the requirements of the

Solicitation Procedures Order. The Ballots of holders of Claims entitled to vote on the Plan were

properly solicited and tabulated. The Debtors have further complied with all the provisions of the

Bankruptcy Code and the Bankruptcy Rules governing notice of the Confirmation Hearing,

approval of the Disclosure Statement and all other matters considered by the Court in these Chapter

11 Cases. The record in these Chapter 11 Cases further discloses that the Debtors have attempted

in good faith to comply with the orders of the Court entered during the pendency of these Cases

and that the Debtors have not violated any such orders.

i. Good Faith - Section 1129(a)(3). The Plan has been proposed in good faith by the

Debtors and not by any means forbidden by law. The Court has examined the totality of the

circumstances surrounding the formulation of the Plan and the evidence submitted in connection

with the Confirmation Hearing. The Plan has been accepted by the requisite holders of Claims, in

the requisite amounts, in Classes 1 and 5, and such acceptance evidences the informed judgment


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of Creditors in those classes that the Plan is in their best interests. The Plan was proposed with the

legitimate and honest purpose of maximizing the value of the Debtors’ estates and to effectuate a

distribution of such value to Creditors. Therefore, the Plan has been proposed in good faith, as

such term is used in Section 1129(a)(3) of the Bankruptcy Code.

j. Payments for Services - Section 1129(a)(4). Any payment made or to be made by

the Debtors or by a person acquiring property under the Plan for services or for costs and expenses

in connection with these Chapter 11 Cases (including all administrative expenses under Section

503 of the Bankruptcy Code) or in connection with the Plan and incident to these Chapter 11 Cases

has been approved or is subject to the approval of the Court as reasonable, satisfying Section

1129(a)(4) of the Bankruptcy Code.

k. Officer Affiliations - Section 1129(a)(5). The Debtors have complied with Section

1129(a)(5) of the Bankruptcy Code by disclosing the identities of all individuals proposed to serve

after the confirmation of the Plan as directors and officers of the Post-Confirmation Debtors.

l. Rates - Section 1129(a)(6). There are no rates applicable to the Debtors over which

any governmental regulatory commission will have jurisdiction after confirmation of the Plan.

m. Best Interests - Section 1129(a)(7). Each holder of an Allowed Claim will receive

under the Plan property of a value not less than the amount such holder would receive if the Debtors

were liquidated under chapter 7 of the Bankruptcy Code. The provisions of the Plan provide

adequate means of funding for the Plan. Confirmation of the Plan provides a superior recovery to

Creditors than conversion of the Chapter 11 Cases from chapter 11 to chapter 7. Accordingly,

confirmation of the Plan is in the best interests of creditors under Section 1129(a)(7) of the

Bankruptcy Code.


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n. Acceptance / Cramdown - Sections 1129(a)(8) and 1129(b). All holders of

impaired Claims under the Plan that are entitled to vote on the Plan have been given adequate

opportunity to vote to accept or reject the Plan. As set forth above, and in detail in the Certification

of Ballots, the Plan has been accepted by the requisite holders of Claims, in the requisite amounts,

in Classes 1 and 5, which Classes constitute the impaired Classes eligible to vote on the Plan.

Notwithstanding the rejection of the Plan by the Class 2 Claimant, the deemed rejection of the Plan

by Class 3 claimants who failed to submit any ballots and the deemed rejection of the Plan by

Class 7 Interests, which are being extinguished, the Plan satisfies the “cramdown” requirements

of Section 1129(b) of the Bankruptcy Code since the Plan does not discriminate unfairly and is

fair and equitable as to Classes 2, 3 and 7. There is insufficient value in the Debtors’ estates to

satisfy the Classes of Claims that are senior to Classes 2 and 3 Claims and 7 Interests and no senior

Creditor is being paid more than in full.

o. Administrative Expense/Priority Claims - Section 1129(a)(9). The Plan complies

with Section 1129(a)(9) of the Bankruptcy Code because it provides that each holder of an Allowed

Administrative Claim will be paid (i) the full amount thereof, without interest, in Cash, as soon as

practicable after the later of (a) the Effective Date, (b) the date on which such Claim becomes an

Allowed Claim, or (c) such other date as the holder of an Allowed Administrative Claim and the

Debtors might otherwise agree, or (ii) such lesser amount as the holder of an Allowed

Administrative Claim and the Debtors might otherwise agree on such date as the holder of an

Allowed Administrative Claim and the Debtors might otherwise agree. The Plan also provides

that each holder of an Allowed Priority Claim will be paid (i) the full amount thereof, without post-

petition interest or penalty, in Cash, as soon as practicable after the later of (a) the Effective Date,

(b) the date on which such Claim becomes an Allowed Claim, or (c) such other date as the holder


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of an Allowed Priority Claim and the Debtors might otherwise agree, or (ii) such lesser amount as

the holder of an Allowed Priority Claim and the Debtors might otherwise agree on such date as

the holder of an Allowed Priority Claim and the Debtors might otherwise agree.

p. Acceptance By At Least One Impaired Class - Section 1129(a)(l0). Classes 1 and

5 Claims, which are Impaired pursuant to the Plan and entitled to vote, voted overwhelmingly to

accept the Plan, as reflected in the Certification of Ballots, by the requisite majorities, determined

without including any acceptance of the Plan by any insider, in accordance with Section 1126 of

the Bankruptcy Code. Specifically, as set forth in the Certification of Ballots, Class 1 voted 100%

in number and 100% in total dollar amount to accept the Plan and Class 5 voted 88.24% in number

and 88.32% in total dollar amount to accept the Plan. Classes 1 and 5 qualify as Impaired accepting

Classes, thereby satisfying the requirements of Section 1129(a)(10) of the Bankruptcy Code.

q. Feasibility - Section 1129(a)(11). The information contained in the Plan and the

Disclosure Statement, together with the testimony proffered and other testimony adduced at the

Confirmation Hearing, establish that the Plan is feasible and that the Plan Administrator and

Litigation Administrator will have sufficient resources to timely meet all of the Post-Confirmation

Debtor’s obligations under the Plan. The feasibility standard of Section 1129(a)(11) of the

Bankruptcy Code is therefore satisfied.

r. Fees Payable Under 28 U.S.C. § 1930 - Section 1129(a)(12). All fees payable under

28 U.S.C. § 1930(a)(6), as determined by the court at the Confirmation Hearing, have been paid,

or will be paid when due or otherwise pursuant to an agreement between the Plan Administrator

and the United States Department of Justice Office of the United States Trustee, until the entry of

a final decree or an order converting or dismissing the Chapter 11 Cases. The Plan, therefore

satisfies Section 1129(a)(12) of the Bankruptcy Code.


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s. Retiree Benefits - Section 1129(a)(13). The Plan complies with Section

1129(a)(13) of the Bankruptcy Code because while the Debtors believe that no retiree benefits (as

defined in Section 1114(a) of the Bankruptcy Code) are owed, but to the extent they are, the Plan

provides for payment of all such retiree benefits from and after the Effective Date.

t. No Domestic Support Obligations - Section 1129(a)(l4). The Debtors are not

required by a judicial or administrative order, or by statute, to pay domestic support obligations.

Accordingly, Section 1129(a)(l4) of the Bankruptcy Code is inapplicable to these Chapter 11

Cases.

u. Debtors Are Not Individuals - Section 1129(a)(15). The Debtors are not

individuals, and accordingly, Section 1129(a)(15) of the Bankruptcy Code is inapplicable to these

Chapter 11 Cases.

v. No Applicable Non-bankruptcy Law Regarding Transfers - Section 1129(a)(16).

Any transfers under the Plan comply with applicable non-bankruptcy law, and the Plan, therefore,

satisfies the requirements of Section 1129(a)(l6).

w. Only One Plan - Section 1129(c). The Plan is the only plan filed in these Chapter

11 Cases, and, accordingly, Section 1129(c) of the Bankruptcy Code is inapplicable to these

Chapter 11 Cases.

x. Principal Purpose of the Plan - Section 1129(d). The principal purpose of the Plan

is not the avoidance of taxes or the avoidance of the application of Section 5 of the Securities Act

of 1933, thereby satisfying the requirements of Section 1129(d) of the Bankruptcy Code.

y. Not Small Business Cases - Section 1129(e). None of the Chapter 11 Cases is a

“small business case” as that term is defined in the Bankruptcy Code, and accordingly, Section

1129(e) of the Bankruptcy Code is inapplicable.


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z. Good Faith Solicitation - Section 1l25(e). Based on the record before the Court in

these Chapter 11 Cases, (a) the Debtors have solicited acceptances of the Plan in good faith and in

compliance with the applicable provisions of the Bankruptcy Code, including, without limitation,

Sections 1125(c) and (e) of the Bankruptcy Code, and any applicable nonbankruptcy law, rule or

regulation governing the adequacy of disclosure in connection with such solicitation and (b) the

Debtors, and all of their respective officers, members, directors, managers, employees, agents,

advisers, accountants, attorneys, and representatives shall be deemed to have participated in good

faith and in compliance with the applicable provisions of the Bankruptcy Code in the solicitation

of the Plan and are entitled to the protections afforded by Section 1125(e) of the Bankruptcy Code

and Article 11.6 of the Plan. The Debtors and their professionals will be acting in good faith if

they proceed to (i) consummate the Plan and (ii) take the actions authorized and directed by this

Order.

aa. Satisfaction of Confirmation Requirements. Based upon the foregoing, the Plan

satisfies the requirements for confirmation set forth in Section 1129 of the Bankruptcy Code.

bb. Releases, Exculpation, and Injunction. The Court has jurisdiction under Sections

1334(a) and (b) of title 28 of the United States Code and Sections 105, 524, and 1141 of the

Bankruptcy Code to approve the releases, the exculpation, and the injunction set forth in Sections

11.6, 11.7 and 11.8 of the Plan. Section 105(a) of the Bankruptcy Code permits issuance of the

injunction and approval of the limited releases set forth in Sections 11.6, 11.7 and 11.8 of the Plan

if, as has been established here based upon the record in these Chapter 11 Cases and the testimony

at the Confirmation Hearing, such provisions (i) are essential to the implementation of the Plan, as

provided in Section 1123 of the Bankruptcy Code, (ii) are fair, equitable, and reasonable, and (iii)

are in the best interests of the Debtors, their estates, and the parties in interest. The exculpation


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provision in the Plan does not relieve any party of liability for an act or omission to the extent such

act or omission is determined by a Final Order to have constituted gross negligence or willful

misconduct, including, without limitation, fraud and criminal misconduct. Based upon the record

of these Chapter 11 Cases and the evidence proffered, adduced, and/or presented at the

Confirmation Hearing, this Court finds that the releases, the exculpation, and the injunction set

forth in Sections 11.6, 11.7 and 11.8 of the Plan are consistent with the Bankruptcy Code and

applicable law.

II. The Sale of the Assets is a Sound Exercise of the Debtors’ Business Judgment

cc. The Debtors have conducted the sale process fairly and openly in a manner

reasonably calculated to produce the highest or otherwise best offer for the Purchased Assets under

the circumstances and in compliance with the Bid Procedures Order. The highest or otherwise

best offer received by the Debtors for the Purchased Assets at or before the Hearing was the offer

by the Purchaser, as such offer is reflected in the APA.

dd. Approval of the APA and TSA and consummation of the Sale at this time are in the

best interests of the Debtors, their estates, creditors, equity holders, and other parties in interest.

ee. The Debtors have demonstrated both good, sufficient, and sound business purposes

and justifications for approval of the Sale.

ff. The Purchaser is a good faith purchaser under section 363(m) of the Bankruptcy

Code and, as such, is entitled to all of the protections afforded thereby. The APA and TSA were

negotiated, proposed and entered into by the Debtors and the Purchaser without collusion, in good

faith, and from arm’s-length bargaining positions. The terms of the APA and TSA are fair and

reasonable. Neither the Debtors, nor the Purchaser have engaged in any conduct that would cause


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or permit the APA or TSA any part of the Sale to be avoided, or for the imposition of costs and

damages against the Purchaser under Section 363(n) of the Bankruptcy Code.

gg. The Purchaser is not an “insider” of any of the Debtors, as that term is defined in

section 101(31) of the Bankruptcy Code and no common identity of incorporators, directors or

stockholders exist between the Purchaser and the Debtors. Pursuant to the APA, the Purchaser is

not purchasing all of the Debtors’ assets in that the Purchaser is not purchasing any of the Excluded

Assets, and the Purchaser is not holding itself out to the public as a continuation of the Debtors.

The Transaction does not amount to a consolidation, merger or de facto merger of the Purchaser

and the Debtors or the Debtors’ estate, there is not substantial continuity between the Purchaser

and the Debtors, there is no continuity of enterprise between the Debtors and the Purchaser, the

Purchaser is not a mere continuation of the Debtors or the Debtors’ estates, and the Purchaser does

not constitute a successor to the Debtors or the Debtors’ estates under state law.

hh. As of the closing of the Sale (the “Closing”), and in accordance with, subject to and

as required by the terms of the APA, the transfer of the Debtors’ assets to the Purchaser will be a

legal, valid, enforceable, and effective transfer of the Debtors’ Purchased Assets, and, to the fullest

extent permitted under the Bankruptcy Code, will vest the Purchaser with all right, title and interest

of the Debtors in the Purchased Assets free and clear of all Liens and liabilities, whether known

or unknown, contingent or otherwise, whether arising prior to or subsequent to the commencement

of these bankruptcy cases, and whether imposed by agreement, understanding, law, equity or

otherwise (collectively, the “Interests”) , including but not limited to claims otherwise arising

under (i) any bulk transfer statutes and similar laws or (ii) doctrines of successor liability, with the

exception of Assumed Liabilities and Purchaser’s obligations under the APA.


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ii. The Debtors may sell the Purchased Assets free and clear of all Interests of any

kind or nature whatsoever because, in each case, one or more of the standards set forth in section

363(f)(1)-(5) of the Bankruptcy Code has been satisfied. Holders of Interests who did not object,

or who withdrew their objections, to the Sale are deemed to have consented to the Sale pursuant

to section 363(f)(2) of the Bankruptcy Code. Holders of Interests who did object fall within one

or more of the other subsections of section 363(f) of the Bankruptcy Code.

jj. All Proposed Assigned Contract counterparties have received adequate notice of

any and all Cure Costs existing under such executory contracts and unexpired leases. The Cure

Costs set forth on the Cure Cost Schedule attached hereto as Exhibit 3 (i) shall be binding upon

the respective party for all purposes, (ii) are the sole amounts necessary under sections

365(b)(1)(A) and (B) and 365(f)(2)(A) of the Bankruptcy Code to cure all monetary defaults and

pay all actual pecuniary losses under the respective contract. The counterparties to the Proposed

Assigned Contracts shall be barred from objecting to the Cure Cost set forth in the Cure Cost

Schedule, and barred from asserting any additional cure amount due with respect to their respective

Proposed Assigned Contract(s).

kk. The requirements of sections 365(b)(1) and 365(f)(2) of the Bankruptcy Code

relating to adequate assurance of future performance by the Purchaser have been satisfied with

respect to the Proposed Assigned Contracts.

ll. The APA was not entered into for the purpose of hindering, delaying or defrauding

creditors under the Bankruptcy Code and under the laws of the United States, any state, territory,

or possession thereof, or the District of Columbia. The consideration under the APA provided by

the Purchaser is the highest and otherwise best offer received by the Debtors, and such


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consideration constitutes reasonably equivalent value for the Purchased Assets under the

Bankruptcy Code and other applicable law.

Order Confirming Plan And Approving Sale

Based upon the record of the Confirmation Hearing, all the proceedings held

before this Court in these Chapter 11 Cases, and the foregoing findings of fact and conclusions of

law, IT IS HEREBY ORDERED THAT

I. Confirmation of Plan

1. Confirmation. The Plan, annexed hereto as Exhibit 2, is CONFIRMED in its

entirety. The Debtors and the Post-Confirmation Debtors after the Effective Date, are authorized

to (a) take such actions as may be necessary or appropriate to carry out the Plan, and (b) execute

such documents and instruments as may be required to implement the Plan.

2. Omission of Reference to Particular Plan Provisions. The failure to specifically

describe or include any particular provision of the Plan in this Order shall not diminish or impair

the effectiveness of such provision, as the Plan is approved and confirmed in its entirety. Each

provision of the Plan shall be deemed authorized and approved by this Order and shall have the

same binding effect of every other provision of the Plan, whether or not mentioned in this Order.

In the event of any inconsistencies between the Plan and this Order, this Order shall govern. Any

claims, demands, rights and causes of action that the Debtors or their estates hold are expressly

retained and reserved for enforcement by the Post-Confirmation Debtors in conjunction with the

Plan Administrator and Litigation Administrator, and therefore no preclusion doctrine, including,

without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, claim

preclusion, estoppel or laches shall apply to the claims, demands, rights and causes of action held

by the Debtors or their estates upon or after confirmation or consummation of the Plan.


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3. Appointment of Plan Administrator. In accordance with the Plan, as of the

Effective Date, Timothy R. Boates is appointed as Plan Administrator and shall be deemed the

sole shareholder, officer and director of the Post-Confirmation Debtors and the existing officers

and directors shall be deemed to have resigned, without the necessity of taking any further action.

The Plan will be administered by the Plan Administrator and all actions taken thereunder in the

name of the Post-Confirmation Debtors (except with respect to commencement, prosecution and

settlement of Chapter 5 Claims and Other Claims) shall be taken through the Plan Administrator.

On the Effective Date, the Plan Administrator shall begin acting for the Post-Confirmation Debtors

in the same fiduciary capacity as applicable to a board of directors, subject to the provisions of the

Plan. Without the need for further approval of this or any court, the Plan Administrator shall be

entitled to compensation and reimbursement for his actual and necessary expenses incurred in

connection with the performance of his duties in accordance with the Plan. The Plan Administrator

shall not be liable for any action he takes or omits to take that he believes in good faith to be

authorized or within his rights or powers. All distributions to be made to Creditors (other than

Class 5 Creditors) under the Plan shall be made by the Plan Administrator, who shall deposit and

hold all Cash in trust for the benefit of Creditors (including Professionals) receiving distributions

under the Plan. The duties and powers of the Plan Administrator include such duties as provided

for under Section 5.4 of the Plan. The Plan Administrator may be removed by the Bankruptcy

Court, upon application for good cause shown. In the event of the resignation or removal, death

or incapacity of the Plan Administrator, the holder of Class 1 Claims shall designate another Person

to become Plan Administrator, and thereupon the successor Plan Administrator, without any

further act, shall become fully vested with all of the rights, powers, duties and obligations of his

or her predecessor.


- 19 -

4. Appointment of Litigation Administrator. In accordance with the Plan, prior to the

sixtieth (60th) day after the Effective Date, the Committee shall appoint and file a notice of the

appointment of a Litigation Administrator. On such appointment date, the Litigation Administrator

will be vested with the sole authority with respect to the commencement, prosecution, and

settlement of Chapter 5 Claims and Other Claims. The Litigation Administrator is granted all the

rights of the Debtors to pursue such Chapter 5 Claims and Other Claims. All distributions to be

made to Class 5 Creditors under the Plan shall be made by the Litigation Administrator. The

Litigation Administrator shall be entitled to compensation and reimbursement for his or her actual

and necessary expenses incurred in connection with the performance of his duties but such fees

and expenses shall only be paid out of the Remaining Assets after all Senior Claims have been

paid or reserved for in full. The Litigation Administrator shall not be liable for any action he takes

or omits to take that he believes in good faith to be authorized or within his rights or powers.

5. Dissolution of the Committee. The Committee shall dissolve upon the date of the

appointment of the Litigation Administrator and its members shall be released and discharged from

all further authority, duties, responsibilities and obligations relating to or arising from the Chapter

11 Cases.

6. Professional Fees and Expenses Incurred Prior to the Effective Date. Each

Professional Person retained or requesting compensation in these Chapter 11 Cases, pursuant to

Section 327, 328, 330, 331 or 503(b) of the Bankruptcy Code, in connection with fees incurred

prior to the Effective Date, shall file an application for allowance of final compensation and

reimbursement of expenses in the Chapter 11 Case before the forty fifth (45th) day after the

Effective Date. Objections to such applications, if appropriate, must be filed on or before the

twentieth (20th) day after the date such application is filed.


- 20 -

7. Professional Fees and Expenses Incurred Subsequent to the Effective Date.

Professionals that perform post-Effective Date services for the Plan Administrator shall provide

monthly invoices to the Plan Administrator and counsel to the Debtors describing the services

rendered, and the fees and expenses incurred in connection therewith, on or before the 20th day

following the end of the calendar month during which such services were performed. Professionals

who timely tender such invoices shall be paid by the Plan Administrator for such services from the

amounts provided for in the Budget not less than fifteen (15) days after the submission of said

monthly invoices, unless, within said fifteen (15) day period, a written objection to such payment

is made by the Plan Administrator or counsel to the Debtors. To the extent a written objection to

a Professional’s monthly invoice cannot be resolved by the parties, payment of such invoice, shall

be made only upon Final Order of the Bankruptcy Court.

8. Preservation of Rights of Action. On the Effective Date, any right, Claim or cause

of action, belonging to the Debtors or their estates against any Person or Entity, including without

limitation, Chapter 5 Claims and Other Claims, that was not previously released by the Debtors or

released under the Plan, shall be retained by the Post-Confirmation Debtors, to the extent not

previously adjudicated, assigned and/or released. The Litigation Administrator with respect to

Chapter 5 Claims and Other Claims (excluding any claims under the APA) and the Plan

Administrator with respect to Other Claims under the APA, if any, shall pursue, settle or release

all retained rights of action, as appropriate, in accordance with the best interests of and for the

benefit of the Creditors entitled to receive distributions under the Plan. In so doing, the Plan

Administrator and the Litigation Administrator shall be vested with the full authority of the

Debtors with respect to all retained rights of action subject to the terms of this provision. The Plan

Administrator and Litigation Administrator, shall be entitled to settle any such rights of action


- 21 -

without further order of the Bankruptcy Court, but shall be entitled to seek such authorization in

his or her discretion, provided however, that the Plan Administrator and/or Litigation

Administrator shall be required to file on the docket of the Chapter 11 Cases, a notice of a proposed

settlement of any right of action in which the proposed settlement is greater than $20,000. Such

notice shall set forth the details of such settlement, set a deadline for objections and schedule a

hearing to consider entry of the proposed order (without need of filing a motion to approve such

settlement). In the event no objections are filed by the deadline, the Court may cancel the

scheduled hearing and enter the propose order without further notice.

9. Plan Classification Controlling. The classification of Claims and Interests for

purposes of distributions to be made under the Plan shall be governed solely by the terms of the

Plan. The classifications set forth on the Ballots tendered to or returned by the holders of Claims

in connection with voting on the Plan (a) were set forth on the Ballots solely for the purpose of

voting to accept or reject the Plan, (b) do not necessarily represent, and in no event shall be deemed

to modify or otherwise affect, the actual classification of such Claims under the Plan for

distribution purposes, (c) may not be relied upon by any Creditors as representing the actual

classification of such Claims under the Plan for distribution purposes, and (d) shall not be binding

on the Debtors and, after the Effective Date, the Plan Administrator or the Post-Confirmation

Debtors, for purposes other than voting on the Plan.

10. Distributions and Disputed Claims. The provisions in the Plan governing

Distributions (including, without limitation, Article 6 of the Plan) and the resolution of any

Disputed Claims are found to be fair and reasonable and are approved. All distributions under the

Plan shall be made in accordance with the terms of the Plan.


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11. Treatment Is in Full Satisfaction. The treatment of and consideration to be received

by holders of Allowed Claims and Interests pursuant to the Plan shall be in full and complete

satisfaction, settlement, release and discharge of such Claims and Interests, but shall not impact

the ability of the holder of such claim or interest to assert such claim or interest against any non-

Debtor. The Debtors’ obligations in respect of such Claims and Interests shall be satisfied in

accordance with the terms of the Plan.

12. Unclaimed Property. If any distribution remains unclaimed for a period of ninety

(90) days after it has been delivered (or attempted to be delivered) in accordance with the Plan to

the holder entitled thereto, such unclaimed property shall be deemed forfeited by such holder,

whereupon all right, title and interest in and to the unclaimed property as well as any further

distribution to such Creditor shall be forfeited by the Creditor and held by the Plan Administrator

to be distributed to other Creditors in accordance with this Plan.

13. Extinguishment of Claims and Interests. Except as provided in the Plan, the rights

afforded in and the payments and distributions to be made under the Plan shall terminate all

Interests and discharge all existing debts and Claims of any kind, nature or description whatsoever

against or in the Debtors or any of their assets or properties to the fullest extent permitted by

Section 1141 of the Bankruptcy Code. Except as provided in the Plan, upon the Effective Date,

all existing Claims against the Debtors and Interests shall be, and shall be deemed to be, discharged

and terminated, and all holders of such Claims and Interests shall be precluded and enjoined from

asserting against the Post-Confirmation Debtors, their successors or assignees, or any of their

assets or properties, any other or further Claim or Interest based upon any act or omission,

transaction, or other activity of any kind or nature that occurred prior to the Effective Date, whether


- 23 -

or not such holder has filed a proof of claim or proof of interest and whether or not the facts or

legal bases therefor were known or existed prior to the Effective Date.

14. Assumption and Assignment or Rejection of Executory Contracts and

Unexpired Leases Pursuant to Confirmation Order and Plan. Any and all pre-Petition Date

unexpired leases and executory contracts not previously rejected by the Debtors, or whose

disposition is provided for in Section III, paragraphs 56-60 below, shall be deemed rejected

by the Debtors on the Effective Date, unless any such unexpired leases or executory contracts

are (i) specifically assumed pursuant to order(s) of the Bankruptcy Court prior to the Effective

Date or under the Plan, (ii) identified on Exhibit 3 annexed hereto (the “Schedule of Assumed

Contracts”), or (iii) identified on Exhibit 4 annexed hereto (the “Schedule of Rejected

Executory Contracts and Unexpired Leases”), which shall be deemed rejected as of the

rejection date set forth therein (the “Rejection Date”). With respect to unexpired leases and

executory contracts listed on Exhibit 4 annexed hereto, the Debtors shall satisfy all obligations

thereunder as they come due in the ordinary course until the applicable Rejection Date. To

the extent that the Debtors default on any such obligations, the applicable landlord shall have

the right to make a motion in this Court seeking to compel the Debtors to comply with its

obligations.

15. Pursuant to Article 7.3 of the Plan, all proofs of claim with respect to claims

arising from the rejection of executory contracts or leases shall, unless another order of this

Court provides for an earlier date, be filed with this Court within thirty (30) days after the

Effective Date or, where applicable, the rejection date set forth in the Schedule of Rejected

Executory Contracts and Unexpired Leases. Any proof of claim that is not timely filed shall

be released, discharged and forever barred from assertion against the Debtors, their estate or


- 24 -

property, or the Post-Confirmation Debtors. Notwithstanding the foregoing, all of the

Debtors’ insurance policies and contracts are expressly assumed by the Post-Confirmation

Debtors as of the Effective Date.

16. Binding Effect of Plan. Subject to the occurrence of the Effective Date, on and

after the Confirmation Date, the provisions of the Plan shall bind the Debtors, the Post-

Confirmation Debtors and any holder of a Claim against, or Interest in, the Debtors and such

holder’s respective successors and assigns, whether or not the Claim or Interest of such holder is

Impaired under the Plan and whether or not such holder has accepted the Plan. This Order and the

Plan shall also bind any taxing authority, recorder of deeds or similar official for any county, state,

or governmental unit in which any instrument related to the Plan or related to any transaction

contemplated under the Plan is to be recorded with respect to any taxes of the kind specified in

Section 1146(a) of the Bankruptcy Code.

17. Vesting of Assets Free and Clear. Upon the Effective Date, pursuant to section

1141(b) and (c) of the Bankruptcy Code, all Estate Assets, including, but not limited to, the rights

of the Debtors pursuant to the APA and the TSA, shall vest in the Post-Confirmation Debtors free

and clear of all Claims, liens, encumbrances, charges and other interests, except as provided in the

Plan and except for the liens under the Final DIP Order of Wells Fargo Bank, National Association

as Agent (“Wells Fargo”), if any. From and after the Effective Date, the Post-Confirmation

Debtors may use, acquire and dispose of Estate Assets free of any restrictions of the Bankruptcy

Code or the Bankruptcy Rules and in all respects as if there were no pending case under any chapter

or provision of the Bankruptcy Code.

18. Release of Liens. Except as otherwise provided in the Plan or in any contract,

instrument or other agreement or document created in connection with the Plan, on the Effective


- 25 -

Date, all mortgages, deeds of trust, liens or other security interests against the Estate Assets shall

be released, and all the right, title and interest of any holder of such mortgages, deeds of trust, liens

or other security interests shall revert to the Post-Confirmation Debtors and its successors and

assigns (it being understood that the liens and security interests of Wells Fargo under the Final

DIP Order on the Excluded Assets (as defined in the APA), including, without limitation, all cash

and cash equivalents of the Sellers (as defined in the APA), shall not be released).

19. Dallas County and Harris County Claims. Notwithstanding any other provisions

contained herein, Dallas County and Harris County are holders of pre-petition claims for ad

valorem property taxes for the 2017-2019 tax years. The Debtors shall pay these claims in full or

file objections to the claims within 90 days of entry of the order Effective Date. In the event an

objection is filed, the allowed claim shall be paid within 30 days of the entry of an order resolving

the objection. Payment of these tax claims shall include interest from the petition date through the

Effective Date and from the Effective Date through the date of payment in full at the applicable

state statutory rate of 1% per month pursuant to 11 U.S.C. §§ 506(b), 511, and 1129. The Counties

shall retain their liens for pre-petition taxes with the same validity, extent and priority upon the

proceeds from the sale of their collateral until all taxes and related interest, penalties, and fees (if

any) have been paid in full. In the event that the Debtors fail to comply with the terms of this

provision, the Counties shall send notice of such default to counsel for the post confirmation

Debtor via facsimile or electronic mail, and the Debtors shall have 15 days from the date of such

notice to cure said default. In the event of failure to cure the default within such 15 day period,

the Counties shall be entitled to pursue collection of all the allowed amount of such claim to the

extent previously allowed, or to the extent of objection is filed upon notice and opportunity to cure,


- 26 -

the filed amount of such claim pursuant to applicable nonbankruptcy law without further recourse

to the Bankruptcy Court.

20. Tax Exemption. Pursuant to Section 1146 of the Bankruptcy Code, the issuance,

transfer or exchange of any security under the Plan or the making or delivery of any instrument of

transfer pursuant to, in implementation of, or as contemplated by, the Plan or the revesting, transfer

or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as

contemplated by, the Plan shall not be taxed under any state or local law imposing a stamp tax,

transfer tax or similar tax or fee.

21. Setoffs and Recoupment. The Plan Administrator and the Litigation Administrator

may, but shall not be required to, set off against any Claim and the payments to be made pursuant

to this Plan in respect of such Claim, Claims of any nature whatsoever that the Debtors or their

estate may have against the Creditor, but neither the failure to do so nor the allowance of a Claim

hereunder shall constitute a waiver or release by the Debtors or their estate of any Claim it may

have against the Creditor.

22. Cancelation of Securities, Instruments, and Any Other Agreements Evidencing

Claims and Interests. Upon the occurrence of the Effective Date, except as otherwise provided in

the Plan or this Order, all promissory notes, shares, certificates, instruments, indentures, stock or

agreements evidencing, giving rise to or governing any Claim or Interest shall be deemed canceled

and annulled without further act or action under any applicable agreement, law, regulation, order

or rule; the obligations of the Debtors under such promissory notes, share certificates, instruments,

indentures or agreements shall be discharged and the holders thereof shall have no rights against

the Debtors, the estates, the Plan Administrator, the Litigation Administrator, and/or the Post-

Confirmation Debtors; and such promissory notes, share certificates, instruments, indentures or


- 27 -

agreements shall evidence no such rights, except the right to receive the distributions provided for

in the Plan.

23. Effectuating Documents; Further Transactions. The Debtors, the Plan

Administrator, the Litigation Administrator, and/or the Post-Confirmation Debtors are authorized

and directed to execute, deliver, file or record any documents, contracts, instruments, releases

and/or other agreements and take such other action as may be necessary to effectuate and further

evidence the terms and conditions of the Plan, the APA, the TSA, and/or the Security Agreement,

as applicable.

24. United States Trustee Fees. All outstanding amounts due under 28 U.S.C. § 1930

shall be paid by the Debtors on or before the Effective Date. Thereafter, the Post-Confirmation

Debtors (by the Plan Administrator during Phase I and the Litigation Administrator during Phase

II), shall file Quarterly Disbursement Reports and shall pay any statutory fees due pursuant to,

inter alia, 28 U.S.C. § 1930(a)(6) when due or otherwise pursuant to an agreement with the United

States Department of Justice Office of the United States Trustee and such Quarterly Disbursement

Reports shall be filed and such fees shall be paid until entry of a Final Decree or an order converting

or dismissing the Chapter 11 Cases.

25. No Interference. No Person will be permitted to commence or continue any action

or proceeding or perform any act to interfere with the implementation and consummation of the

Plan or the payments or other distributions required to be made thereunder.

26. Conditions Precedent to Effectiveness of the Plan. The Plan shall not become

effective unless and until the conditions set forth in Section 8.1 of the Plan are satisfied or waived

pursuant to Section 8.2 of the Plan.


- 28 -

27. Exculpation. Except as otherwise provided by the Plan or this Confirmation Order,

on the Effective Date to the extent permitted by applicable law, the Released Parties shall be

deemed released by each of them against the other, and by all holders of Claims or Equity Interests,

of and from any claims, obligations, rights, causes of action and liabilities for any act or omission

in connection with, or arising out of, the Chapter 11 Case, including, without limiting the generality

of the foregoing, all retentions, motions and applications, sales of assets, the Disclosure Statement,

the pursuit of approval of the Disclosure Statement, the pursuit of confirmation of the Plan, the

consummation of the Plan or the administration of the Plan or the property to be distributed under

the Plan provided, however, no such parties shall be discharged from obligations under the Plan

or of any claim or cause of action arising from or related to acts or omissions which constitute

willful misconduct, gross negligence, fraud or criminal conduct under the laws of the United States

or any state or local authority. All such Persons, in all respects, shall be entitled to rely upon the

advice of counsel with respect to their duties and responsibilities under the Plan and under the

Bankruptcy Code.

28. Release By the Debtors and Their Estates. Notwithstanding anything contained in

the Plan to the contrary, as of the Effective Date, for the good and valuable consideration provided

by each of the Debtors, each of the Debtors and their current and former affiliates and

representatives and the Estates shall be deemed to have provided a full, complete, unconditional

and irrevocable release to the Released Parties and each such Released Party so released shall be

deemed released by the Debtors and their current and former affiliates and representatives and the

Estates from any and all claims, causes of action and any other debts, obligations, rights, suits,

damages, actions, remedies and liabilities whatsoever, whether accrued or unaccrued, whether

known or unknown, foreseen or unforeseen, existing before the Effective Date, as of the Effective


- 29 -

Date or arising thereafter, in law, at equity, whether for tort, contract, violations of statutes

(including but not limited to the federal or state securities laws), or otherwise, based in whole or

in part upon any act or omission, transaction, or other occurrence or circumstances existing or

taking place prior to or on the Effective Date arising from or related in any way to the Debtors,

including, without limitation, those that any of the Debtors would have been legally entitled to

assert or that any holder of a claim or equity interest or other Entity would have been legally

entitled to assert for or on behalf of any of the Debtors or the Estates, including without limitation

those in any way related to the Chapter 11 Cases or the Plan; provided, however, that the foregoing

release shall not prohibit the Debtors, the Estates, or the Plan Administrator from asserting any

and all defenses and counterclaims in respect of any Disputed Claim asserted by any Released

Parties; provided further that the foregoing release shall not prohibit the Post-Confirmation

Debtors, the Plan Administrator or Litigation Administrator from asserting any and all claims

based upon, arising out of or in consequence of any actual or alleged error, misstatement,

misleading statement, act, omission, neglect or breach of duty of the Released Parties solely in

their capacity as current or former duly elected or appointed director, officer, manager or employee

of the Debtors, but only to the extent such claims would be covered by available insurance, if any;

provided further, that the foregoing provisions of this Paragraph 28 shall have no effect on the

liability of the Debtors' current directors and officers, the Debtors' directors and officers that served

in such capacity as of the Petition Date, the Chief Restructuring Officer, the Debtors' Professionals,

and the representatives of each of the foregoing that results from any act or omission that is

determined in a Final Order to have constituted gross negligence or willful misconduct.

29. Injunction. Except as otherwise provided in the Plan, on and after the Confirmation

Date, all Entities and Persons who have held, hold or may hold Claims against the Debtors or


- 30 -

Equity Interests in the Debtors are, with respect to any such Claims or Equity Interests,

permanently enjoined from and after the Confirmation Date from: (a) commencing, conducting or

continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind

(including, without limitation, any proceeding in a judicial, arbitral, administrative or other forum)

against or affecting the Debtors, the Post-Confirmation Debtors, any of their property, or any direct

or indirect transferee of any property of, or direct or indirect successor in interest to, any of the

foregoing Entities, or any property of any such transferee or successor; (b) enforcing, levying,

attaching (including, without limitation, any pre-judgment attachment), collecting or otherwise

recovering by any manner or means whether directly or indirectly, of any judgment, award, decree

or order against the Debtors, the Post-Confirmation Debtors, any of their property, or any direct

or indirect transferee of any property of, or direct or indirect successor in interest to any of the

foregoing Entities; (c) creating, perfecting or otherwise enforcing in any manner, directly or

indirectly, any encumbrance of any kind against the Debtors, the Post-Confirmation Debtors, any

of their property, or any direct or indirect transferee of any property of, or direct or indirect

successor in interest to any of the foregoing Entities and (d) taking any actions in any place and in

any manner whatsoever that do not conform to or comply with the provisions of the Plan. Nothing

contained in this Paragraph 29 shall impact the rights of a holder of an Allowed Claim to receive

and enforce distributions on account of its Allowed Claim in accordance with Article 4 of the Plan.

30. Notice of Entry of Confirmation Order. As soon as practicable after the Effective

Date, the Debtors shall mail notice of the entry of this Order and of the occurrence of the Effective

Date to all Creditors that received the Solicitation Package, all Professionals retained in this case,

and any known party affected by the rejection of executory contracts and unexpired leases

addressed herein who had not previously had their executory contract and unexpired lease rejected


- 31 -

by the Debtors. The notice shall set forth the Final Administrative Claims Bar Date, the deadlines

for filing Professional Fee Claims and claims for rejection damages, identify the date that is the

Effective Date, and provide such other information as may be appropriate to implement the Plan,

and such notice shall constitute adequate and sufficient notice of the post-Confirmation filing

deadlines set forth herein.

31. Post-Confirmation Modifications of the Plan. The Debtors, or following the

Effective Date, the Plan Administrator, may, subject to approval of the Bankruptcy Court without

notice to holders of Claims and Interests, insofar as it does not materially and adversely affect the

interest of holders of Claims, alter, amend or modify the Plan in such a manner and to such extent

as may be necessary to expedite consummation of this Plan. The Plan may be altered or amended

after the Confirmation Date by the Plan Administrator, in a manner which materially and adversely

affects holders of Claims, provided that such alteration or modification is made after a hearing as

provided in Section 1127 of the Bankruptcy Code.

32. Withdrawal or Revocation of the Plan. The Debtors shall have the right to revoke

or withdraw the Plan prior to the Effective Date. If the Debtors revoke or withdraw the Plan, then

the result shall be the same as if this Order had not been entered as it relates to the Plan and the

Effective Date had not occurred.

II. Approval of Sale

33. The APA, the TSA and the Security Agreement (and all ancillary Sale documents)

and all of the terms and conditions thereof are hereby approved.

34. Pursuant to section 363(b) of the Bankruptcy Code, the Debtors are authorized to

perform their obligations under and comply with the terms of the APA and TSA, and consummate

the Sale, subject to and in accordance with the terms and conditions of the APA.


- 32 -

35. The Debtors and their affiliates, officers, employees, and agents are authorized to

execute and deliver, and empowered to perform under, consummate and implement, the APA and

TSA, together with all additional instruments, documents, and agreements that may be reasonably

necessary or desirable to implement the APA or TSA, and to take all further actions as may be

requested by the Purchaser for the purpose of assigning, transferring, granting, conveying and

conferring to the Purchaser or reducing to possession, free and clear of all Interests, the Purchased

Assets, or as may be necessary or appropriate to the performance of the obligations as

contemplated by the APA and/or TSA.

36. This Order and the APA shall be binding in all respects upon all Creditors (whether

known or unknown) of the Debtors, all Persons or Entities claiming an Interest in the Debtors'

property, all successors and assigns of the Purchaser, the Debtors and their affiliates and

subsidiaries, and any subsequent trustees appointed in the Debtors' Chapter 11 Cases or upon a

conversion to chapter 7 under the Bankruptcy Code, and shall not be subject to rejection.

37. The APA, the TSA and any related agreements, documents, or other instruments

may be modified, amended or supplemented by the parties thereto in a writing signed by both

parties and in accordance with the terms thereof, without further order of the Court, provided that

(a) with respect to any such modification, amendment, or supplement which does not have a

material adverse effect on the Debtors' estates, the Debtors shall provide notice to the Committee

and Wells Fargo of any such modification, amendment, or supplement; and (b) with respect to

any such modification, amendment, or supplement which does have a material adverse effect on

the Debtors' estates the Debtors shall obtain prior consent of Wells Fargo and shall provide notice

to the Committee of any such modification, amendment, or supplement and the Committee shall

have two (2) business day to object thereto.


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38. Except as specifically provided for in the APA or this Order, pursuant to sections

105(a) and 363(f) of the Bankruptcy Code, the Debtors are authorized to transfer the Purchased

Assets to the Purchaser, on the Closing Date (as defined in the APA) and, upon such Closing Date,

the Purchased Assets shall be free and clear of all Interests of any kind or nature whatsoever (other

than Assumed Liabilities and Permitted Encumbrances, and any security Interests arising out of

the Security Agreement as each term in defined in the APA and as and to the extent set forth in the

APA) with all such Interests to attach to the Sale Proceeds to the fullest extent required by law in

the order of their priority, with the same validity, force and effect which they now have in or

against the Purchased Assets, subject to any claims and defenses the Debtors may possess with

respect thereto other than as provided in Paragraph 39 below.

39. In connection with the Closing of the Sale provided for under the APA and this

Order, the Debtors are authorized and directed to pay Wells Fargo, for the benefit of itself and the

DIP Loan Lenders (as such term is defined in the Final DIP Order), the net proceeds of the sale as

provided under the APA (including any good faith deposit(s) previously received by the Debtors)

as and to the extent provided in the Final DIP Order, which payment shall be in partial satisfaction

of the Obligations under the Prepetition Credit Agreement (as defined in the Final DIP Order).

40. In connection with the Closing, the Purchaser shall provide the Debtors with a list

of employees that the Purchaser will be extending employment offers to.

41. Except as expressly provided by the APA or this Order, to the fullest extent

permitted by law, all Persons and Entities, including, but not limited to, all equity security holders,

governmental, tax, and regulatory authorities, parties to executory contracts, customers, lenders,

trade and other Creditors, holding Interests (other than Assumed Liabilities) of any kind or nature

whatsoever against or in the Purchased Assets (whether legal or equitable, secured or unsecured,


- 34 -

matured or unmatured, contingent or non-contingent, senior or subordinated), arising under or out

of, in connection with, or in any way relating to, the Debtors or the Debtors' assets, hereby are

forever barred, estopped, and permanently enjoined from asserting such Interests against the

Purchaser, affiliates of the Purchaser, its successors or assigns, its property, or the Purchased

Assets.

42. The transfer of the Purchased Assets to the Purchaser pursuant to the APA shall

constitute a legal, valid, and effective transfer of the Purchased Assets, and shall vest the Purchaser

with all right, title, and interest of the Debtors in and to the Purchased Assets free and clear of all

Interests of any kind or nature whatsoever (other than Assumed Liabilities).

43. On the Closing Date, the Debtors and each of the Debtors' Creditors are hereby

authorized and directed to execute and file termination statements, instruments of satisfaction, or

other proper releases of all Interests (other than with respect to (i) the Security Agreement and (ii)

Permitted Encumbrances and Assumed Liabilities as each term is defined in the APA, as and to

the extent set forth in the APA) relating to filed financing statements, mortgages, mechanic's liens,

lis pendens, or other documents or agreements evidencing Interests in the Purchased Assets, and

the Purchaser (and its designee) is hereby authorized to file, register, or otherwise record a certified

copy of this Order, which, once filed, registered or otherwise recorded, shall constitute conclusive

evidence of the release of all such Interests. If any Person or Entity which has filed statements or

other documents or agreements evidencing liens on, or Interests in, any portion of the Purchased

Assets (other than with respect to the Security Agreement and Permitted Encumbrances and

Assumed Liabilities) shall not have delivered to the Debtors prior to the Closing Date, in proper

form for filing and executed by the appropriate parties, termination statements, instruments of

satisfaction, releases of liens and easements, and any other document necessary for the purpose of


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documenting the release of all such Interests which the Person or Entity has or may assert with

respect to any portion of the Purchased Assets, then the Debtors are hereby authorized and directed,

and the Purchaser (or any of its successors, assignees or designees) is hereby authorize to execute

and file such statements, instruments, releases and other documents on behalf of such Person or

Entity with respect to the Purchased Assets.

44. All Entities that are presently, or on the Closing Date may be, in possession of some

or all of the Purchased Assets are hereby directed, upon the written request of the Purchaser, to

promptly surrender possession of the Purchased Assets to the Purchaser.

45. The requirements of sections 365(b)(1) and 365(f)(2) of the Bankruptcy Code are

hereby deemed satisfied with respect to the Proposed Assigned Contracts listed on the annexed

Schedule of Assumed Contracts (the “Assigned Contracts”), upon the Purchaser's satisfaction of

the Cure Costs in connection with such Assigned Contracts. The Debtors are hereby authorized,

in accordance with sections 105(a), 363 and 365 of the Bankruptcy Code, to: (a) assume and assign

and transfer, free and clear of all Interests, to the Purchaser the Assigned Contracts; and (b) execute

and deliver to the Purchaser such assignment documents as may be necessary to confirm such

assignment and transfer. The Purchaser will cure, and have provided adequate assurance of cure,

of any default or breaches required to be cured under any of the Assigned Contracts, if any, within

the meaning of section 365(b)(1)(A) and (B) of the Bankruptcy Code as of the Closing Date. The

Purchaser has provided adequate assurance of its future performance of and under the Assigned

Contracts, within the meaning of section 365(b)(1)(C) of the Bankruptcy Code.

46. Notwithstanding any provision in a Assigned Contract that prohibits or restricts

assignment (including those of the type described in sections 365(b)(2), (e)(1) and (f)(1) of the

Bankruptcy Code), the Assigned Contracts shall be assumed by the Debtors and assigned to the


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Purchaser in accordance with their respective terms. There shall be no rent accelerations,

assignment fees, increases (including, but not limited to, increases in the amount of security,

restoration, or other deposits) or any other fees charged to the Purchaser as a result of the

assumption and assignment of the Assigned Contracts. Any provisions in any Assigned Contract

that prohibit or condition the assignment of such Assigned Contract or allow the party to such

Assigned Contract to terminate, recapture, impose any penalty, require or increase the amount of

a security, restoration, or other deposit, condition on renewal or extension, or modify any term or

condition upon the assignment of such Assigned Contract, constitute unenforceable anti-

assignment provisions that are void and of no force and effect. Any party that may have had the

right to consent to the assignment of its Assigned Contract is determined to have consented for the

purposes of Section 365(e)(2)(A)(ii) of the Bankruptcy Code. After the Assigned Contracts are

assigned to the Purchaser, pursuant to section 365(k) of the Bankruptcy Code, the Debtors shall be

relieved from any further liability with respect to such Assigned Contracts. Upon the Closing, the

Purchaser shall be fully and irrevocably vested in all right, title and interest of each Assigned

Contract.

47. Upon assignment of the Assigned Contracts to the Purchaser, no default shall exist

under any Assigned Contracts and no non-Debtor party to any Assigned Contract shall be

permitted to declare a default by the Purchaser under such Assigned Contract or otherwise take

action against the Purchaser as a result of the Debtors' financial condition, bankruptcy or failure to

perform any of their obligations under the Assigned Contracts. Upon entry of this Order and

assumption and assignment of the Assigned Contracts, the Purchaser shall be deemed in

compliance with all terms and provisions of the Assigned Contracts, including, but not limited to,

any provision in any assigned Lease that requires the tenant, or the tenant's assignee, to provide a


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security deposit to the landlord, or security for any other of the tenant's obligations (including, but

not limited to, restoration obligations) under the Lease.

48. The Court hereby determines that the Cure Costs set forth in the Assumption Notice

constitute all of the cure amounts that are required to be paid in order to assume and assign the

Assigned Contracts. Except for the right to payment of the Cure Costs, pursuant to sections 105(a),

363 and 365 of the Bankruptcy Code, all parties to the Assigned Contracts are forever barred and

enjoined from raising or asserting against the Debtors and the Purchaser any assignment fee,

default, breach or claim or pecuniary loss, or condition to assignment, arising under or related to

the Assigned Contracts existing as of the Closing or arising by reason of the Closing. Any party

that may have had the right to consent to the assignment of its Assigned Contract is deemed to

have consented to such assignment for purpose of section 365(e)(2)(A)(ii) of the Bankruptcy Code

and otherwise if it failed to object to the assumption and assignment.

49. Gaffney Lease. With respect to the nonresidential real property lease with STAG

Industrial Holdings LLC for the premises located in Gaffney, South Carolina (the “Gaffney

Lease”), pursuant to section 365(l) of the Bankruptcy Code, Black Swan Holdings, LLC, the parent

of the Purchaser, will at Closing deliver to the landlord an unconditional guaranty of Purchaser’s

obligations under the Gaffney Lease. The guaranty will further provide that on or after the 4th

anniversary of the guaranty, provided at the time of the election there is no default (that would

give rise to an event of Default after the passage of time) or Event of Default under the Lease, the

guarantor may elect to terminate the guaranty and replace it with a letter of credit in the amount of

$666,569 in form and substance and from an issuing bank reasonably acceptable to the landlord.

In addition, notwithstanding anything herein to the contrary, (i) any claims of the landlord against

the Debtors under the Gaffney Lease for indemnification arising prior to Closing (an


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“Indemnification Claim”) shall be preserved provided that the landlord shall look only to proceeds

of the Debtors’ insurance coverage for satisfaction of any such Indemnification Claim, and (ii)

consistent with Section 2.7 of the APA, Assumed Liabilities of the Purchaser with respect to the

Gaffney Lease will include the payment of obligations under the Gaffney Lease as and when they

become due thereunder notwithstanding that a portion of such obligations may cover the period

prior to the Closing.

50. The consideration to be provided to the Debtors for the Purchased Assets under the

APA is reasonably equivalent value and fair consideration under the Bankruptcy Code.

51. Except as otherwise expressly provided in the APA, the Purchasers shall not assume

or have any responsibility for the Excluded Liabilities (as defined in the APA).

52. To the maximum extent permitted under applicable law, except for the Assumed

Liabilities or as specifically provided for in the APA or this Order, the Purchaser shall have no

liability or responsibility for any liability or other obligation of the Debtors arising under or related

to the Purchased Assets. Without limiting the generality of the foregoing, and except as otherwise

specifically provided herein and in the APA, the Purchaser shall not be liable for any Claims (as

such term is defined in section 101(5) of the Bankruptcy Code) against the Debtors or any of their

predecessors or affiliates, and the Purchaser shall have no successor liabilities of any kind or

character, including, but not limited to, any theory of antitrust, environmental, successor or

transferee liability, labor law, de facto merger or substantial continuity, whether known or

unknown as of the Closing Date, now existing or hereinafter arising, whether asserted or

unasserted, fixed or contingent, liquidated or unliquidated, with respect to the Debtors or any

obligations of the Debtors arising prior to the Closing Date, including, but not limited to, liabilities


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on account of any taxes arising, accruing, or payable under, out of, or in connection with, or in any

way relating to the operation of the business prior to the Closing Date.

53. Notwithstanding Bankruptcy Rules 6004(h) and 6006(d), this Order shall be

effective and enforceable immediately upon entry and its provisions shall be self-executing. In the

absence of any entity obtaining a stay pending appeal, the Debtors and the Purchaser are free to

close under the APA at any time, subject to the restrictions and requirements of the APA.

54. Pursuant to section 363(m) of the Bankruptcy Code, 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 Purchaser, unless such authorization is duly stayed

pending such appeal.

55. The terms and provisions of the APA and this Order: (a) shall be binding in all

respects upon, and shall inure to the benefit of the Debtors, their estates, and their Creditors and

equity holders, the Purchaser, and its respective affiliates, successors and assigns, and any affected

third parties including, but not limited to, all persons asserting Interests in the Purchased Assets,

notwithstanding any subsequent appointment of any trustee(s) under any chapter of the Bankruptcy

Code, as to which trustee(s) such terms and provisions likewise shall be binding; and (b) shall be

binding upon and shall govern the acts of all entities including without limitation, all filing agents,

filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars

of deeds, administrative agencies, governmental departments, 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.


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III. Employee Health Benefits

56. Under an Administrative Services Only Agreement (“ASO Agreement”), Cigna

Health and Life Insurance Company (“Cigna”) provides administrative services for Debtors’ self-

insured employee healthcare benefits plan (“Benefits Plan”). Under the ASO Agreement, Cigna

processes healthcare claims of Debtors’ employees and their dependents (“Benefits Claims”), and

causes the Benefits Claims that are eligible for payment under the Plan (“Payable Claims”) to be

funded through Debtors’ segregated Plan bank account at Citibank, Account No. XXXXXX9872,

held in the name of Debtor The Robert Allen Group, Inc. (n/k/a TRADG, Inc.) (“Benefits Plan

Bank Account”).

57. The Debtors intend on closing on the sale of the Purchase Assets to the Purchaser

on May 3, 2019 or a date not later than ten (10) days after the date of this Order (the “Closing

Date”). In accordance with the Debtors’ direction, coverage under the Benefits Plan shall

terminate on the earlier of (i) the date that is at least 30 days after Debtors provide written notice

of termination to Cigna, or (ii) sixty days after the Closing Date, or (iii) July 15, 2019, unless

otherwise extended in writing by the Debtors, Purchaser and Cigna (“Termination Date”). Debtors

have elected to provide for Benefits Claims incurred, but not submitted, processed and paid prior

to the Termination Date (“Run-Out Claims”), to be processed by Cigna and paid for a twelve (12)

month period following the Termination Date.

58. To fund the payment of (a) the Run-Out Claims, Debtors shall, on the Effective

Date, irrevocably deposit funds into the Benefits Plan Bank Account sufficient to bring the balance

of the Plan Bank Account to no less than $490,186 and (b) the Benefits Claims received between

the Closing Date and the Termination Date, the Purchaser shall, on the Effective Date, irrevocably

deposit funds into the Benefits Plan Bank Account the sum of $490,186. Any COBRA payments


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collected from former employees from and after the Closing Date, net of the cost of administering

such COBRA plan, shall also be deposited into the Benefits Plan Bank Account to be used to cover

Benefits Claims and Run-Off Claims. From and after the Closing Date, the Debtors shall be

prohibited from withdrawing any funds held in the Benefits Plan Bank Account. Conditioned

upon such deposits, Cigna shall process the Benefits Claims received between the Closing Date

and the Termination Date and, beginning on the Termination Date, in accordance with the terms

of the ASO Agreement, process Run-Out Claims that are received by Cigna prior to the last day

of the month that is twelve (12) months from the Termination Date (“Run-Out Claims Termination

Date”), and shall cause such Benefits Claims and Run-Out Claims that are Payable Claims to be

paid to the extent that a sufficient balance remains in the Plan Bank Account to fund such payment.

Cigna shall not be required to process Run-Out Claims received after the Run-Out Claims

Termination Date, or to cause the payment of any Payable Claims to the extent that the balance of

the Benefits Plan Bank Account is insufficient to fund the payment of such claims. Other than

making its share of the deposit, the Purchaser shall have no further obligation or liability with

respect to the payment of any Run-Out Claims.

59. If, at any time, there are insufficient funds in the Plan Bank Account to fund the

continued payment of Payable Claims, Cigna shall cease processing Run-Out Claims, and Cigna

shall promptly provide the Plan Administrator (or a successor thereto, whose identity and contact

information have been provided to Cigna in writing by the Plan Administrator) with written notice

of the amount reasonably expected by Cigna to be necessary to fund the payment of remaining

Run-Out Claims (“Supplemental Funding Amount”). If the Supplemental Funding Amount is not

deposited into the Plan Bank Account within ten (10) calendar days of such notice, then the date

of such notice shall be deemed the Run-Out Claims Termination Date.


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60. Not later than 45 days following the Run-Out Termination Date, the Plan

Administrator shall take action necessary to transfer any balance remaining in the Plan Bank

Account, less any outstanding check liability, to a bank account designated by the Purchaser, and

Cigna shall cooperate as necessary to facilitate that transfer. Any such balance shall be the property

of Purchaser.

61. Provided that Cigna has completed its obligations hereunder, Cigna’s

responsibilities under the ASO Agreement shall be deemed fully performed as of the Run-Out

Termination Date, and Cigna shall be deemed released from any liability, including liability under

11 U.S.C. § 547, 548, 549 and 550, arising from or relating to the ASO Agreement.

62. Notwithstanding anything in the Plan or this Order to the contrary, the ASO

Agreement, as well as the Debtors’ Stop Loss Policy, the Group Dental Policies, and the Life,

Accident, Short and Long Term Disability Policies with Cigna (collectively, “Benefits Policies”),

shall not be assumed or rejected under the Plan, but shall be deemed to have passed through

confirmation of the Plan and validly terminated effective as of the Termination Date; provided,

however, that Debtors shall, on or before the Effective Date, to the extent not previously paid, pay

the $28,430.31 due under the Benefits Polices, and shall continue to cause all premiums due under

the Benefit Polices for the period through the Termination Date to be paid.

IV. Other

63. Retention of Jurisdiction. Following the Confirmation Date and until such time as

all payments and distributions required to be made and all other obligations required to be

performed under this Plan have been made and performed by the Plan Administrator, the

Bankruptcy Court shall retain jurisdiction as is legally permissible, including, without limitation,

for the following purposes, in each case to the greatest extent permitted by applicable law:


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(a) Claims. To determine the allowability, classification or priority of Claims against the Debtors upon objection by the Plan Administrator or any other party in interest. (b) Injunctions, etc. To issue injunctions or take such other actions or make such other orders as may be necessary or appropriate to restrain interference with the Plan or its execution or implementation by any Person, to construe and to take any other action to enforce and execute the Plan, the Confirmation Order, or any other order of the Bankruptcy Court, to issue such orders as may be necessary for the implementation, execution, performance and consummation of the Plan and all matters referred to herein, and to determine all matters that may be pending before the Bankruptcy Court in the Chapter 11 Cases on or before the Effective Date with respect to any Entity. (c) Professional Fees. To determine any and all applications for allowance of compensation and expense reimbursement of Professionals for periods before the Effective Date, as provided for in the Plan. (d) Certain Priority Claims. To determine any Priority Claims, Administrative Claims, or any request for payment of Administrative Claims. (e) Adversary Proceedings. To adjudicate any and all adversary proceedings, applications and contested matters that may be commenced or maintained pursuant to the Bankruptcy Code or this Plan. (f) Dispute Resolution. To resolve any dispute arising under or related to (i) the implementation, execution, consummation or interpretation of the Plan and the making of distributions thereunder, including, without limitation, any dispute concerning payment of professional fees and expenses of the Plan Administrator and (ii) the Sale of Assets, APA, and the TSA, including without limitation the right to collect the Purchase Price and any Receivables under the APA and TSA. (g) Leases and Executory Contracts. To determine any and all motions for the rejection, assumption or assignment of executory contracts or unexpired leases, and to determine the allowance of any Claims resulting from the rejection of executory contracts and unexpired leases. (h) Actions. To determine all applications, motions, adversary proceedings, contested matters, actions, and any other litigated matters instituted prior to the closing of the Chapter 11 Cases, including any remands. (i) General Matters. To determine such other matters, and for such other purposes, as may be provided in the Confirmation Order or as may be authorized under provisions of the Bankruptcy Code. (j) Plan Modification. To modify the Plan under Section 1127 of the Bankruptcy Code, remedy any defect, cure any omission, or reconcile any inconsistency in the Plan or the Confirmation Order so as to carry out its intent and purposes.


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(k) Aid Consummation. To issue such orders in aid of consummation of the Plan and the Confirmation Order notwithstanding any otherwise applicable non-bankruptcy law, with respect to any Entity, to the full extent authorized by the Bankruptcy Code. (l) Implementation of Confirmation Order. To enter and implement such orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified or vacated. (m) Final Order. To enter a Final Order closing of any Chapter 11 Case.

64. Modification of Confirmation Order. If any or all of the provisions of this Order

are hereafter modified, vacated, or reversed by subsequent order of this or any other court, such

reversal, modification, or vacation shall not affect the validity of the obligations incurred or

undertaken under or in connection with the Plan prior to the Debtors’ and the Plan Administrator’s

receipt of written notice of any such order; nor shall such reversal, modification or vacation of this

Order affect the validity or enforceability of such obligations. Notwithstanding any reversal,

modification or vacation of this Order, any such obligation incurred or undertaken pursuant to and

in reliance on this Order prior to the effective date of such reversal, modification or vacation shall

be governed in all respects by the provisions of this Order, the Plan and all documents, instruments

and agreements related thereto or any amendments or modifications thereto.

65. Waiver of Bankruptcy Rules 6004(h) and 6006(d) and Effectiveness of this Order.

The sale of the Purchased Assets must be approved and consummated promptly in order to

preserve the value of the Purchased Assets. The Debtors have demonstrated compelling

circumstances and a good, sufficient, and sound business purpose and justification for the

immediate approval and consummation of the transactions as contemplated by the APA.

Accordingly, there is sufficient cause to lift the stay contemplated by Bankruptcy Rules 6004(h)

and 6006(d) with regards to the transactions contemplated by this Order. Notwithstanding


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Bankruptcy Rules 3020(e) and 6004(h) or any other provision of the Bankruptcy Code or

Bankruptcy Rules, this Order shall be effective immediately upon its entry, and the period in

which an appeal must be filed shall commence immediately upon the entry hereof.

____________________________Robert E. Grossman

United States Bankruptcy JudgeDated: Central Islip, New York May 6, 2019


EXHIBIT 1

Asset Purchase Agreement

Case 8-19-71020-reg Doc 303-1 Filed 05/06/19 Entered 05/06/19 11:29:55

EXECUTION COPY

872120/001-7087998.13

ASSET PURCHASE AGREEMENT

AMONG

DÉCOR HOLDINGS, INC., DÉCOR INTERMEDIATE HOLDINGS LLC,

THE ROBERT ALLEN DURALEE GROUP, LLC,

THE ROBERT ALLEN DURALEE GROUP, INC.

THE ROBERT ALLEN DURALEE GROUP FURNITURE, LLC, AS SELLERS

AND

RADG HOLDINGS, LLC, AS PURCHASER

DATED AS OF APRIL 12, 2019

Case 8-19-71020-reg Doc 232 Filed 04/12/19 Entered 04/12/19 15:31:36Case 8-19-71020-reg Doc 303-1 Filed 05/06/19 Entered 05/06/19 11:29:55

i

TABLE OF CONTENTS

Page

Article I. DEFINITIONS .................................................................................................................2 Section 1.1 Definitions....................................................................................................2

Article II. SALE AND PURCHASE OF PURCHASED ASSETS AND ASSUMPTION OF ASSUMED LIABILITIES ......................................................................................................10

Section 2.1 Purchase and Sale of Purchased Assets .....................................................10 Section 2.2 Purchase Price ............................................................................................11 Section 2.3 Assumption of Liabilities ...........................................................................13 Section 2.4 Adjustment of Receivables Purchase Price................................................14 Section 2.5 Deposit .......................................................................................................15 Section 2.6 Allocation of Purchase Price ......................................................................15 Section 2.7 Apportionments..........................................................................................15 Section 2.8 Casualty and Condemnation ......................................................................16 Section 2.9 Disclaimer of Additional Representations and Warranties;

Schedules ...................................................................................................16

Article III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS ...........................17 Section 3.1 Organization and Authority of Sellers .......................................................17 Section 3.2 No Conflict or Violation ............................................................................17 Section 3.3 Consents and Approvals ............................................................................17 Section 3.4 Compliance with Law ................................................................................18 Section 3.5 Title to the Purchased Assets .....................................................................18 Section 3.6 Assigned Contracts and Assigned Leases ..................................................18 Section 3.7 Intellectual Property ...................................................................................18 Section 3.8 Litigation ....................................................................................................19 Section 3.9 Brokers .......................................................................................................19 Section 3.10 Subsidiaries ................................................................................................19 Section 3.11 Labor Relations ..........................................................................................19 Section 3.12 No Other Representations or Warranties ...................................................19

Article IV. REPRESENTATIONS AND WARRANTIES OF PURCHASER ............................20 Section 4.1 Authority of Purchaser ...............................................................................20 Section 4.2 No Conflict or Violation ............................................................................20 Section 4.3 Consents and Approvals ............................................................................20 Section 4.4 Availability of Funds .................................................................................20 Section 4.5 Litigation ....................................................................................................21 Section 4.6 Brokers .......................................................................................................21 Section 4.7 Adequate Assurances Regarding Executory Contracts ..............................21 Section 4.8 Purchaser’s Acknowledgment ...................................................................21 Section 4.9 Purchased Assets “AS IS”; Purchaser’s Acknowledgment

Regarding Same .........................................................................................21


ii

Article V. CERTAIN COVENANTS OF THE SELLERS ...........................................................22 Section 5.1 Conduct of Business Before the Closing Date ...........................................22 Section 5.2 Information and Access .............................................................................22 Section 5.3 Further Assurances.....................................................................................23 Section 5.4 Reasonable Efforts .....................................................................................23 Section 5.5 Internet Address/Domain Name/Social Media; Name Change

Filings ........................................................................................................23 Section 5.6 Schedules ...................................................................................................24

Article VI. CERTAIN COVENANTS OF PURCHASER ............................................................24 Section 6.1 Reasonable Efforts .....................................................................................24 Section 6.2 Consents and Approvals ............................................................................24 Section 6.3 Adequate Assurances Regarding Assigned Contracts ...............................24 Section 6.4 Performance Under Assigned Contracts and Assigned Leases .................24 Section 6.5 Further Assurances.....................................................................................24 Section 6.6 Privacy Policies ..........................................................................................24 Section 6.7 Schedules ...................................................................................................25

Article VII. CONDITIONS TO THE SELLERS’ OBLIGATIONS .............................................25 Section 7.1 Representations and Warranties .................................................................25 Section 7.2 Compliance with Agreement .....................................................................25 Section 7.3 Higher or Better Offers ..............................................................................25 Section 7.4 Entry of the Confirmation Order................................................................25 Section 7.5 No Legal Impediment to Closing ...............................................................25 Section 7.6 Consents and Approvals ............................................................................26 Section 7.7 Purchaser Deliveries ..................................................................................26 Section 7.8 Payment of Purchase Price.........................................................................26

Article VIII. CONDITIONS TO PURCHASER’S OBLIGATIONS ............................................26 Section 8.1 Representations and Warranties .................................................................26 Section 8.2 Compliance with Agreement .....................................................................26 Section 8.3 Entry of the Confirmation Order................................................................26 Section 8.4 Material Adverse Change ..........................................................................27 Section 8.5 No Legal Impediment to Closing ...............................................................27 Section 8.6 Consents and Approvals ............................................................................27 Section 8.7 Sellers Deliveries .......................................................................................27 Section 8.8 Stalking Horse Designation .......................................................................27

Article IX. THE CLOSING; TERMINATION .............................................................................27 Section 9.1 The Closing ................................................................................................27 Section 9.2 Deliveries by Sellers ..................................................................................27 Section 9.3 Deliveries by Purchaser .............................................................................28 Section 9.4 Termination ................................................................................................28 Section 9.5 Effects of Termination ...............................................................................29

Article X. TAXES; RECORDS; COOPERATION .......................................................................30 Section 10.1 Taxes Related to Purchase of Assets .........................................................30


iii

Section 10.2 Proration of Personal Property Taxes ........................................................31 Section 10.3 Cooperation on Tax and Other Matters .....................................................31

Article XI. EMPLOYEES AND EMPLOYEE BENEFITS ..........................................................32 Section 11.1 New Employees .........................................................................................32 Section 11.2 Terms of Employment of New Employees ................................................32 Section 11.3 No Successor Employer Liability ..............................................................32

Article XII. MISCELLANEOUS PROVISIONS ..........................................................................32 Section 12.1 Survival of Representations, Warranties and Covenants ...........................32 Section 12.2 Notices .......................................................................................................32 Section 12.3 Amendments and Waivers ........................................................................34 Section 12.4 Assignment ................................................................................................34 Section 12.5 Announcements..........................................................................................35 Section 12.6 Expenses ....................................................................................................35 Section 12.7 Entire Agreement .......................................................................................35 Section 12.8 Descriptive Headings .................................................................................35 Section 12.9 Counterparts ...............................................................................................35 Section 12.10 Governing Law; Jurisdiction......................................................................35 Section 12.11 Other Definitions and Interpretive Matters ................................................36 Section 12.12 Sellers’ Schedules ......................................................................................37 Section 12.13 Third Party Beneficiaries ...........................................................................37 Section 12.14 Severability ................................................................................................37 Section 12.15 Non-Recourse ............................................................................................38


iv

SCHEDULE NUMBER SCHEDULE NAME

1.1 Permitted Encumbrances 1.2 Consignment Goods 1.3.1 Showroom Leases 1.3.2 Warehouse Leases 1.4 Greige Goods Subject to Liens 2.1(k) Assigned Contracts 2.1(l) Assigned Leases 2.3 Assumed Liabilities 2.4(d) Adjustment Calculation 3.6 Assigned Contract and Lease Exceptions 3.7 Sellers’ Intellectual Property 3.10 Subsidiaries of Décor Holdings, Inc.


ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of April 12, 2019 by and among Décor Holdings, Inc., a Delaware corporation, Décor Intermediate Holdings LLC, a Delaware limited liability company, The Robert Allen Duralee Group, LLC, a Delaware limited liability company, The Robert Allen Duralee Group, Inc. a Delaware corporation, and The Robert Allen Duralee Group Furniture, LLC, a Delaware limited liability company (each a “Seller” and collectively, “Sellers”), and RADG Holdings, LLC, a Delaware limited liability company, or its permitted designees and assigns (the “Purchaser”).

PRELIMINARY STATEMENTS

WHEREAS, The Robert Allen Duralee Group, LLC, The Robert Allen Duralee Group, Inc. and The Robert Allen Duralee Group Furniture, LLC collectively design, manufacture and sell decorative fabrics, wall coverings, trimmings, upholstered furniture, drapery hardware and accessories for both residential and commercial applications (the “Business”);

WHEREAS, Décor Holdings, Inc. is a Delaware corporation that owns 100% of Décor Intermediate Holdings, LLC. Décor Intermediate Holdings, LLC owns 100% of The Robert Allen Duralee Group, Inc., a Delaware corporation, and 100% of The Robert Allen Duralee Group, LLC, a Delaware limited liability company. The Robert Allen Duralee Group, LLC owns 100% of The Robert Allen Duralee Group Furniture, LLC, a Delaware limited liability company;

WHEREAS, Décor Intermediate Holdings, LLC owns 100% of Robert Allen Fabrics (Canada) Ltd.;

WHEREAS, on February 12, 2019 (the “Petition Date”), each of the Sellers filed a voluntary petition with the Bankruptcy Court initiating cases under chapter 11 of the Bankruptcy Code and have continued in the possession of their assets and in the management of their businesses pursuant to sections 1107 and 1108 of the Bankruptcy Code;

WHEREAS, the Purchaser has deposited with the Sellers the amount of $500,000.00 (the “Deposit”);

WHEREAS, as part of this Agreement, Purchaser shall be denominated the stalking horse in the Cases and shall be entitled to the bid protections set forth more fully in this Agreement and the Bid Procedures;

WHEREAS, Purchaser desires to purchase from the Sellers, and the Sellers desire to sell to Purchaser, substantially all of the assets of the Business, and Purchaser will assume certain liabilities, all on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


2

ARTICLE I.

DEFINITIONS

Section 1.1 Definitions. Unless otherwise defined herein, the terms defined in the introductory paragraph and the Preliminary Statements to this Agreement shall have the respective meanings specified therein; capitalized terms used herein and not defined herein shall have the meanings ascribed to such terms in the Bid Procedures; and the following terms shall have the meanings specified below:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such other Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings.

“Agreement” has the meaning set forth in the preamble and shall include all Schedules and Exhibits hereto.

“Allocation Statement” has the meaning set forth in Section 2.6.

“Ancillary Documents” means, collectively, the Transition Services Agreement and the Assignment and Assumption Agreements.

“Apportionment Date” has the meaning set forth in Section 2.7.

“Assignment and Assumption Agreements” means the Bill of Sale, Assignment and Assumption Agreement, the IP Assignments and any other document or instrument of transfer executed at the Closing in order to evidence the transfer any Purchased Assets to the Purchaser or to evidence Purchaser’s assumption of any Assumed Liabilities.

“Assigned Contracts” means the contracts described in Schedule 2.1(k). Notwithstanding anything herein to the contrary, “Assigned Contracts” shall not include any contracts that are Excluded Assets.

“Assigned Leases” means the leases described in Schedule 2.1(l). Notwithstanding anything herein to the contrary, “Assigned Leases” shall not include any leases that are Excluded Assets.

“Assumed Liabilities” has the meaning set forth in Section 2.3.

“Auction” has the meaning set forth in the Bid Procedures.

“Avoidance Actions” means any and all claims for relief or causes of action of Sellers (i) under chapter 5 of the Bankruptcy Code and (ii) against the Sellers’ former or current officers, directors and shareholders.


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“Bankruptcy Code” means The Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Sections 101, et seq.

“Bankruptcy Court” means the United States Bankruptcy Court for the Eastern District of New York, or any other court, having jurisdiction over the Cases from time to time.

“Bid Procedures” means the bid procedures attached as an exhibit to the Bid Procedures Order.

“Bid Procedures Order” means the order of the Bankruptcy Court entered on March 15, 2019, that approved, among other things, the Bid Procedures.

“Bill of Sale, Assignment and Assumption Agreement” means the bill of sale, assignment and assumption agreement to be executed at Closing by Purchaser and the Sellers in form and substance reasonably satisfactory to Sellers and Purchaser.

“Break-Up Fee” has the meaning set forth in Section 9.5(c).

“Business” has the meaning set forth in the Preliminary Statements hereto.

“Business Day” means any day of the year, other than a Saturday or Sunday, on which national banking institutions in New York, New York, are open to the public for conducting business and are not required or authorized by Law to close.

“Cases” means the Chapter 11 cases of the Sellers pending in the Bankruptcy Court and being jointly administered for procedural purposes as Case Nos. 19-71020(REG), 19-71022(REG), 19-71023(REG), 19-71024(REG) and 19-71025(REG).

“Closing” has the meaning set forth in Section 9.1.

“Closing Cash Purchase Price” has the meaning set forth in Section 2.2.

“Closing Date” has the meaning set forth in Section 9.1.

“Code” means the Internal Revenue Code of 1986, as heretofore or hereafter amended.

“Committee” means the Official Committee of Unsecured Creditors in the Cases, as appointed by the United States Trustee and reconstituted from time to time.

“Confidentiality Agreement” has the meaning set forth in Section 5.2.

“Confirmation Hearing” has the meaning ascribed to it in the Bid Procedures Order.

“Confirmation Order” means an order of the Bankruptcy Court, in form and substance reasonably satisfactory to Sellers, the DIP Lenders and Purchaser, authorizing, among other things, the execution of this Agreement by the Sellers, the sale of the Purchased Assets to the Purchaser, the assignment of the Assigned Contracts and Assigned Leases to the Purchaser and the other transactions contemplated herein in each case in accordance with the terms and


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conditions of this Agreement and pursuant to, among others, sections 363, 365 and 1141 of the Bankruptcy Code.

“Consultation Parties” means DIP Lenders, Corber Corp., and the Committee.

“Cure Costs” means amounts that must be paid and obligations that otherwise must be satisfied under sections 365(b)(1)(A) and (B) of the Bankruptcy Code in connection with the assumption and/or assignment of any Assigned Contract or Assigned Lease to Purchaser as provided herein.

“Current Customer Credits” means customer credits and balances owed for returns of purchased merchandise to Sellers and Robert Allen Fabrics (Canada) Ltd. incurred in the ordinary course of the Business and recorded on the Sellers’ books and records after July 31, 2018.

“Damages” means losses, amounts paid in settlement, Taxes, claims, damages, Liabilities, obligations, judgments, settlements and reasonable out-of-pocket costs and reasonable expenses and attorneys’ fees; provided, however, that Damages shall not include (i) any incidental or consequential damages or (ii) any special or punitive damages.

“Deposit” means the five hundred thousand dollars ($500,000) deposited by the Purchaser in escrow with Sellers’ counsel on the date hereof pursuant to the Bid Procedures.

“DIP Lenders” means Wells Fargo and PNC.

“Encumbrance” means any charge, lien, claim, mortgage, lease, hypothecation, deed of trust, pledge, security interest, option, right of use, first offer or first refusal, easement, servitude, restrictive covenant, encroachment, encumbrance, or other similar restriction of any kind.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Excluded Assets” means (a) any cash, cash equivalents and marketable securities of the Sellers and Robert Allen Fabrics (Canada) Ltd. (including for this purpose all (i) collected funds received in bank accounts of the Sellers and (ii) amounts in the process of collection charged on credit cards, in each case through 11:59 p.m., Eastern Time, on the date preceding the Closing Date, (ii) cash collateralizing outstanding letters of credit, and (iii) cash held in escrow, including the Deposit and any other escrow established hereunder), all bank accounts of Sellers and Robert Allen Fabrics (Canada) Ltd., and all books and records related thereto, (b) any capital stock or equity interest held by any Seller in any other Seller or any other Person except for the Purchased Equity, (c) Tax refunds and Tax attributes related to any taxable period (or portion thereof) ending on or prior to the Closing Date, (d) any assets of any Plan maintained by any Seller or any of its Affiliates, unless such Plan is to be assumed by Purchaser or to the extent that any assets relating to any Plan are transferred to any plan maintained by Purchaser, in each case on terms mutually agreed upon by Sellers and Purchaser prior to the Closing Date, (e) all insurance policies and other agreements and, except as set forth in Section 2.8, all rights thereunder with respect to occurrences (such as casualties) prior to the Closing Date, (f) all rights under contracts and leases other than Assigned Contracts or Assigned Leases, (g) all rights, claims and causes of action of the Sellers under this Agreement, any Ancillary Document or any other agreement


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between any Seller and Purchaser, (h) intercompany claims of Sellers, (i) any asset of any Seller that would constitute Purchased Assets if owned by such Seller on the Closing Date that is conveyed or otherwise disposed of during the period from the date hereof until the Closing Date (A) in the ordinary course of the Business and not in violation of the terms of this Agreement, including Section 5.1 hereof or (B) as otherwise expressly permitted by the terms of this Agreement, (j) all rights, including the rights of offset and recoupment, claims or causes of action that relate solely to any Excluded Assets, any Excluded Liability or any contract or agreement that either is not assumed by or assigned to the Purchaser or which has expired prior to the Closing Date, (k) any Permits that are not legally assignable and any non-assignable licenses or user or other agreements granted to any Seller with respect to Sellers’ Intellectual Property, (l) all Tax Returns of Sellers and all books and records (including working papers) related thereto, other than any such Tax documents related to the Purchased Assets, all books and records which Sellers are required by law to retain (provided, however, that Purchaser shall be entitled to access to such excluded books and records upon reasonable request to the Sellers), all documents and agreements relating to the Cases, and copies of any other books and records made at the request of the Sellers or the Committee (i.e., the originals shall constitute Purchased Assets but not any such requested copies thereof), (m) all security deposits and utility deposits (in each case, other than with respect to the Assigned Contracts, for which apportionment shall be made pursuant to Section 2.7), instruments, other prepaid assets and deposits, letters of credit proceeds, unbilled costs and fees, tax assets and accounts, in each case, that relate to any Excluded Asset or any Excluded Liability, (n) Avoidance Actions, (o) all of Sellers’ certificates of incorporation, certificates of formation, by-laws, operating agreements and other organizational documents, qualifications to conduct business as a foreign entity, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, stock certificates and other documents relating to the organization, maintenance and existence of any Seller as a corporation, limited liability company or other entity (Seller shall, however, allow Purchaser access to and use of the records as needed in conducting Purchaser’s business after reasonable notice and during normal business hours), (p) any loans or notes payable to any Seller from any employee of any Seller other than a New Employee, (q) goods that have been placed in the Showrooms on consignment as more particularly described in Schedule 1.2 attached hereto and (r) greige fabric and other goods that are subject to a possessory or other statutory lien of a vendor, supplier, shipper or warehouseman, as described in Schedule 1.4 attached hereto, and are not included in Inventory.

“Excluded Liabilities” has the meaning set forth in Section 2.3.

“Executory Contracts” means all Assigned Contracts and Assigned Leases entered into by or assigned to a Seller which are executory or unexpired as of the Closing Date.

“Exhibits” means the various exhibits attached to this Agreement.

“Expense Reimbursement” has the meaning set forth in Section 9.5(c).

“GAAP” means United States generally accepted accounting principles, as in effect from time to time.


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“Governmental Authority” means (a) any international, foreign, federal, state, county, local or municipal governmental or administrative agency or political subdivision thereof, (b) any governmental authority, board, bureau, commission, department or instrumentality, (c) any court or administrative tribunal, (d) any non-governmental agency, tribunal or entity that is vested by a governmental agency with applicable jurisdiction or (e) any arbitration tribunal or other non-governmental authority with applicable jurisdiction.

“Independent Accounting Firms” has the meaning set forth in Section 2.6.

“Intellectual Property” means, collectively, patents, trademarks, service marks, trade names, trademark registrations, service mark registrations, domain names, social media accounts, copyrights, licenses and know-how (including, without limitation, trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures, as well as other inventions, works of authorship, confidential information, technology, software, excluding licenses to off the shelf software, and documentation, data and databases, and web sites), and any registrations or applications to register the foregoing and all goodwill associated therewith.

“Inventory” means all inventory and all finished goods, merchandise, work in progress, samples and raw materials that are related to the Business, reflected as inventory on the Sellers’ or Robert Allen Fabrics (Canada) Ltd.’s books and records and maintained, held or stored by or for Sellers and Robert Allen Fabrics (Canada) Ltd. as of the Closing Date, wherever located, and any prepaid deposits for any of the same, except for (i) goods that have been placed in the Showrooms on consignment and (ii) greige fabric and other goods that are subject to a possessory or other statutory lien of a vendor, supplier, shipper or warehouseman, as described in Schedule 1.4 attached hereto, and are not included in Inventory.

“IP Assignments” means the Intellectual Property assignments to be executed at Closing by Purchaser and the Sellers in in form and substance reasonably satisfactory to Sellers and Purchaser.

“IRS” means the Internal Revenue Service of the United States Department of the Treasury.

“Liability” means any liability or obligation (whether known or unknown, asserted or unasserted, fixed or contingent, accrued or unaccrued, liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

“Material Adverse Change” means any fact, condition, change, violation, inaccuracy, circumstance, effect or event (each, a “Change”), individually or in the aggregate, that (i) has, or would reasonably be likely to have, a material adverse effect on the assets, liabilities, properties, results of operations or financial condition of the Business (excluding the Excluded Assets and the Excluded Liabilities) and the Purchased Assets and the Assumed Liabilities, taken as a whole, or (ii) has or would reasonably be likely to prevent, materially delay or materially impair the ability of the Sellers to perform their respective obligations hereunder or to consummate the transactions contemplated hereby; provided, however, that “Material Adverse Change” shall not include the following, nor shall any of the following be taken into account in determining


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whether there has been a Material Adverse Change: (a) events or conditions that generally affect the industry in which Sellers operate; (b) general business or economic conditions; (c) national or international political or social conditions, including the engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any actual or threatened military or terrorist attack; (d) the conditions of any financial, banking, or securities markets; (e) changes in GAAP made after the date hereof; (f) acts or omissions of any Seller carried out (or omitted to be carried out) in accordance with this Agreement or upon the written consent of Purchaser in accordance with this Agreement; or (g) any condition arising by reason of the commencement of the Cases; unless, in the case of clause (a), (b), (c), (d) or (e) above, such Change would reasonably be expected to result in a materially disproportionate adverse effect on, or change in, the Purchased Assets, the Assumed Liabilities or the Business (other than the Excluded Assets and Excluded Liabilities), taken as a whole, relative to the businesses of other comparable companies in the industries in which the Business operates.

“Make-Whole Date” has the meaning set forth in Section 2.2.

“New Employees” has the meaning set forth in Section 11.1.

“No Recourse Party” has the meaning set forth in Section 12.15.

“On-Order Inventory” means goods that have previously been ordered in the ordinary course of business but have neither been paid for nor received at the Showrooms and the Warehouse as of the Closing Date.

“Outside Date” has the meaning set forth in Section 9.4(b)(ii).

“Party” or “Parties” means, individually or collectively, Purchaser and Sellers.

“Permit” means any permit, approval, authorization, license, variance or permission required by a Governmental Authority under any applicable law that are now or hereafter held by the Sellers pertaining to the operation by the Sellers of the Business.

“Permitted Encumbrances” means (i) statutory liens for current property Taxes and assessments (A) not yet due and payable or (B) being contested in good faith by appropriate proceedings for which adequate reserves have been made in accordance with GAAP, including liens for ad valorem Taxes and statutory liens not yet due and payable arising other than by reason of any default by Sellers, (ii) easements, covenants, conditions, restrictions and other similar matters of record on real property, leasehold estates or personalty that do not in any material respect detract from the value thereof and do not individually or in the aggregate in any material respect interfere with the present use of the property subject thereto, (iii) Encumbrances that constitute or secure Assumed Liabilities (including Encumbrances arising under the Assigned Contracts or Assigned Leases), (v) landlords’, carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s liens or other like Encumbrances arising in the ordinary course of business with respect to amounts not yet overdue or amounts being contested in good faith by appropriate Proceedings, and (vii) the other Encumbrances listed in Schedule 1.1.

“Person” means any individual, partnership, corporation, trust, association, limited liability company, Governmental Authority or other entity.


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“Plan” or “Plans” means all “employee benefit plans”, as defined in Section 3(3) of ERISA, and all other material employee benefit arrangements or payroll practices including, without limitation, any such arrangements or payroll practices providing severance pay, sick leave, vacation pay, salary continuation for disability, retirement benefits, deferred compensation, bonus pay, incentive pay, hospitalization insurance, medical insurance, life insurance, scholarships or tuition reimbursements, maintained by the Sellers or to which the Sellers are obligated to contribute thereunder for current or former Sellers’ Employees.

“PNC” means PNC Bank, N.A.

“Proceeding” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative or investigative) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority.

“Purchase Price” has the meaning set forth in Section 2.2.

“Purchased Assets” has the meaning set forth in Section 2.1.

“Purchased Equity” means all of the ownership interest of the Debtors in Robert Allen Fabrics (Canada) Ltd.

“Purchaser” has the meaning set forth in the preamble.

“Purchaser’s Knowledge” shall mean the actual knowledge of the Chief Executive Officer and Chief Financial Officer of Purchaser.

“Receivables” means any and all “Accounts” (as defined in the New York Uniform Commercial Code) of or owing to Sellers or Robert Allen Fabrics (Canada) Ltd. arising prior to the Closing Date, including, without limitation, all accounts receivable, notes and other amounts receivable from third parties, including customers, arising from the business conducted by the Sellers or by Robert Allen Fabrics (Canada) Ltd. prior to the Closing Date, whether or not in the ordinary course of business, together with any unpaid financing charges accrued thereon.

“Receivables Purchase Price” has the meaning set forth in Section 2.2.

“Schedules” means the various schedules attached to this Agreement.

“Schedules Completion Date” means April 23, 2019.

“Sellers” has the meaning set forth in the preamble.

“Sellers’ Employees” means the employees of the Sellers.

“Sellers’ Intellectual Property” means all Intellectual Property owned or used by Sellers in connection with the Business.

“Sellers’ Knowledge” shall mean the actual knowledge of Timothy Boates, Lee Silberman and William Fuchs.


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“Showrooms” means the premises described in the Showroom Leases and all fixtures or leasehold improvements thereon, used or held for use by any of the Sellers in the Business.

“Showroom Leases” means those real property leases more particularly described on Schedule 1.3.1.

“Subsidiary” means, when used with reference to any Person, any corporation, partnership, limited liability company, joint venture, stock company or other entity of which such Person (either acting alone or together with its other Subsidiaries), directly or indirectly, owns or has the power to vote or to exercise a controlling influence with respect to 50% of more of the capital stock or other voting interests, the holders of which are entitled to vote for the election of a majority of the board of directors or any similar governing body of such corporation, partnership, limited liability company, joint venture, stock company or other entity.

“Tangible Personal Property” means tangible personal property, including, without limitation, archives, samples, furniture, fixtures, furnishings, screens, artwork, equipment (including, without limitation, warehouse, office and computer equipment), machinery, tools, supplies, spare parts, molds, trucks, cars, other vehicles and rolling stock, furniture, fixtures, trade fixtures, leasehold improvements, office materials and supplies.

“Tax Return” means any report, return, information return or other information required to be supplied to a taxing authority in connection with Taxes.

“Tax” or “Taxes” means all federal, state, local and foreign taxes, including income, gross receipts, excise, employment, sales, use, transfer, license, payroll, franchise, severance, stamp, withholding, Social Security, unemployment, disability, real property, personal property, registration, alternative or add-on minimum, estimated or other tax, including any interest, penalties or additions thereto, whether disputed or not.

“Total Working Capital” means (i) the gross amount of Receivables as of the Closing Date plus (ii) the gross value of the Inventory, in each case calculated based on the Sellers’ books and records and in a manner consistent with Sellers’ past practices and Schedule 2.4(d).

‘‘Transaction Taxes” has the meaning set forth in Section 10.1.

“Transition Services Agreement” means a transition services agreement by and among the Sellers and Purchaser, which shall be in form and substance reasonably acceptable to Sellers and Purchaser.

“Unfulfilled Customer Orders” means outstanding unfulfilled customer orders (including, without limitation, firm orders, cutting for approvals, custom orders, regular orders and reserve orders).

“Warehouses” means the premises described in the Warehouse Leases and all fixtures or leasehold improvements thereon, used or held for use by any of the Sellers in the Business

“Warehouse Leases” means those real property leases more particularly described on Schedule 1.3.2.


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“Wells Fargo” means Wells Fargo Bank, N.A., as administrative agent and co-lender.

ARTICLE II.

SALE AND PURCHASE OF PURCHASED ASSETS AND

ASSUMPTION OF ASSUMED LIABILITIES

Section 2.1 Purchase and Sale of Purchased Assets. On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser shall purchase from the Sellers, and the Sellers shall sell, transfer, assign, convey and deliver to Purchaser, all of the Sellers’ right, title and interest in and to the Business, properties, assets, goodwill, rights and claims of whatever kind and nature, real or personal, tangible or intangible, known or unknown, actual or contingent and wherever situated, as the same may exist on the Closing Date and are related to the Business, other than the Excluded Assets, free and clear of all Encumbrances thereon (other than Permitted Encumbrances or as set forth on any of the Schedules hereto). Without limiting the generality of the foregoing, the “Purchased Assets” shall include, without limitation, all right, title, and interest of the Sellers in, to and under the following (other than the Excluded Assets):

(a) the Inventory (except for any Excluded Inventory);

(b) the Receivables;

(c) all Tangible Personal Property related to, or used or useful in or held for use in the conduct of, the Business (except for any such Tangible Personal Property that is an Excluded Asset);

(d) all goodwill associated with the Business or the Purchased Assets, including rights under any confidentiality agreements executed by any third party for the benefit of Sellers to the extent relating to the Business;

(e) all telephone numbers used in connection with the Business;

(f) the sales and promotional literature, customer lists and other sales related materials related to the Business;

(g) the Purchased Equity;

(h) all Unfulfilled Customer Orders;

(i) all of the Sellers’ Intellectual Property;

(j) all files, operating data, books of account, invoices, shipping records, supplier lists, price lists, vendor lists, mailing lists, catalogs, sales promotion literature, advertising materials, brochures, standard forms of documents, manuals of operations or business procedures, research materials, instruments, filings, administrative and pricing manuals, correspondence, memoranda, drawings, plans and specifications, maintenance or service records,


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operating records, operating safety manuals, and other material and documents, books financial statements, records and files (whether stored in hardcopy form or on magnetic, optical or other media) and any rights thereto owned, associated with or employed by Sellers in the conduct of the Business or otherwise related to the Purchased Assets or the Assumed Liabilities;

(k) all right, title and interest in, to and under the Assigned Contracts;

(l) all right, title and interest in, to and under the Assigned Leases;

(m) to the extent legally assignable, all Permits;

(n) the amount of, and all rights to any, insurance proceeds to be assigned to Purchaser pursuant to Section 2.8;

(o) the following, to the extent that they relate to any Assumed Liability or Purchased Asset: claims, deposits under Assigned Contracts or Assigned Leases (for which apportionment shall be made pursuant to Section 2.7), prepayments, prepaid assets, landlord build out allowances, refunds (excluding Tax refunds), causes of action, rights of recovery, rights of setoff and rights of recoupment as of the Closing Date;

(p) to the extent transferable and to the extent related to the Purchased Assets, or in connection with the Business, the full benefit of all representations, warranties, guarantees, indemnities, undertakings, certificates, covenants, agreements and all security therefor received by Sellers on the purchase or other acquisition of the Purchased Assets; and

(q) any rights, demands, claims, credits (excluding Tax refunds and similar credits and benefits), allowances, rebates, or rights of setoff arising out of or relating to any of the Purchased Assets.

(r) Notwithstanding anything in this Section 2.1 to the contrary, nothing herein shall be deemed to sell, transfer, assign or convey the Excluded Assets to Purchaser; the Purchaser shall have no rights with respect to the Excluded Assets; and Sellers shall retain all of their respective rights, title and interests in, to and under the Excluded Assets. At any time not later than one (1) business day prior to the Bid Deadline (as defined in the Bid Procedures), Purchaser, in its sole discretion by written notice to Sellers, may amend Schedule 2.1(k) or Schedule 2.1(l) to exclude from being assigned any contract or lease, respectively, whereupon such contract or lease so excluded shall not constitute an “Assigned Contract” or “Assigned Lease”, respectively (and shall therefore constitute an Excluded Asset), and Purchaser shall not acquire any rights, or assume any Liabilities, with respect thereto. Purchaser acknowledges and agrees that there shall be no reduction in the Purchase Price if it elects to exclude from being assigned any contracts or leases pursuant to the preceding sentence.

Section 2.2 Purchase Price. The purchase price for the Purchased Assets (the “Purchase Price”) is comprised of (i) a cash payment at Closing of $8,000,000.00 (the “Closing Cash Purchase Price”), plus (ii) an amount in cash payable after the Closing of not less than $10,000,000.00 and not more than $11,000,000.00 (the “Receivables Purchase Price”), payable as set forth below and subject to adjustment pursuant to Sections 2.4 and 2.7 hereof, for a total cash purchase price of up to $19,000,000.00, plus (iii) the amount of Assumed Liabilities.


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(a) The Closing Cash Purchase Price shall be paid to the Sellers, subject to the conditions set forth in this Agreement, at the Closing (i) by wire transfer of immediately available funds to the “Collateral Account” (as defined in the Deposit Account Control Agreement (Access Restricted Immediately), dated March 31, 2017, by and among Sellers, Wells Fargo, as Secured Party, and Wells Fargo Bank, National Association, as depositary bank), in an amount equal to $7,500,000.00, less any interest earned on the Deposit and (ii) by payment of the Deposit to the “Collateral Account”, together with any interest earned thereon, in immediately available funds

(b) The Receivables Purchase Price shall be paid to the Sellers, on a daily basis out of the first $11,000,000.00 of Receivables collected by the Purchaser by remitting such collections and proceeds of Receivables to the “Collateral Account”, less any out of pocket costs of collection (including attorneys’ fees and expenses) related to the first $11,000,000.00 of Receivables, provided that Purchaser obtains the Sellers’ prior written consent before incurring such costs of collection. At the election of the DIP Lenders, in their sole and absolute discretion, on the date that is the six (6) month anniversary of the Closing Date (the “Make-Whole Date”), the Purchaser shall pay the Sellers (by remitting such amount to the “Collateral Account”) an amount (the “Make Whole Amount”) equal to the difference, if any, between (x) $10,000,000.00 (the amount guaranteed to the Sellers) and (y) the total amount previously paid to the Sellers after the Closing Date and prior to the Make-Whole Date in respect of the Receivables Purchase Price from the Receivables included in the Purchased Assets. The DIP Lenders shall provide the Purchaser with written notice at least thirty (30) days prior to the Make-Whole Date in the event that they elect that the Purchaser pay the Make-Whole Amount. If the Purchaser pays the Make Whole Amount at the election of the DIP Lenders, any Receivables collected by the Purchaser after the Make-Whole Date shall be the property of the Purchaser. If the DIP Lenders do not elect to receive the Make Whole Amount, the Purchaser shall continue to be obligated to pay the Receivables Purchase Price out of the first $11,000,000.00 of Receivables collected by the Purchaser. Notwithstanding the foregoing, in the event that the amount of net Receivables included in the Purchased Assets is less than $11,000,000.00, the amount guaranteed to the Sellers by the Purchaser shall be reduced on a dollar for dollar basis; provided that in no event shall duplicative adjustments be made pursuant to this Agreement.

(c) From the Closing Date through the Make-Whole Date, Purchaser shall (i) maintain in place the existing lockbox between the Sellers and the DIP Lenders and Purchaser until payment in full of the Receivables Purchase Price and (ii) shall not permit any Encumbrance to be placed on the Receivables. Purchaser and Sellers will agree on the content of communications to be sent to customers after the Closing to advise the customers of the correct payment instructions should be made with respect to the Receivables. In addition, the Purchaser and the DIP Lenders shall agree on mutually acceptable documentation, to be delivered at Closing, (A) pursuant to which the Purchaser will grant to Wells Fargo (as agent for the DIP Lenders) a first priority security interest in the Receivables (together with all related assets, including books and records related thereto and any inventory that gave rise to any such Receivables which is returned by the account debtor) included in the Purchased Assets (but on no other assets of the Purchaser) to secure the Receivables Purchase Price and (B) otherwise required for Wells Fargo to perfect such first priority security interest (the items in clauses (A) and (B) above collectively referred to herein as, the “Purchaser Security Documents”), and Purchaser agrees to deliver such other documents (including a legal opinion), instruments and


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lien searches required by DIP Lenders in connection with the perfection of such security interest. As will be set forth more fully in the Transition Services Agreement, in cases of misdirected and misapplied payments on the Receivables (“Mistaken Payments”), Sellers and Purchaser will work together in good faith to ensure that proper credit is given. Payments made to Sellers with respect to Receivables before payment in full of the Receivables Purchase Price may be retained by Sellers and applied to payment of the Receivables Purchase Price. If payments are made to Sellers with respect to Receivables after payment in full of the Receivables Purchase Price, the amount of such Mistaken Payment that is made to Sellers shall not be deemed the property of Sellers, but, rather, shall be deemed property held by Sellers for the benefit of Purchaser (but need not be segregated by Sellers for such purpose). The reconciliation and payment mechanism with respect to Mistaken Payments shall be set forth more fully in the Transition Services Agreement. However, should DIP Lenders receive any payment that is not for and attributable to the Receivables, then the DIP Lenders shall remit such funds to the Purchaser within one (1) Business Day of the receipt of such funds.

Section 2.3 Assumption of Liabilities. On the terms and subject to the conditions set forth in this Agreement, from and after the Closing, Purchaser will assume and pay, perform, discharge and be responsible solely for the following liabilities of the Sellers (the “Assumed Liabilities”):

(a) all Liabilities arising after the Closing Date in connection with the ownership, operation and use of the Purchased Assets or the operation of the Business after the Closing Date;

(b) all Liabilities for On-Order Inventory;

(c) all Liabilities under the Assigned Contracts and Assigned Leases arising after the Closing Date;

(d) the Cure Costs for the Assigned Contracts and Assigned Leases;

(e) all Liabilities of Sellers under any Unfulfilled Customer Orders, including without limitation Liabilities with respect to deposits made by customers;

(f) all Current Customer Credits;

(g) payroll and payroll related obligations, including any employment-related benefits owed to any of the New Employees, on the day after the Closing;

(h) in addition to and not in limitation of Section 2.3(b) above, accounts payable obligations incurred for services rendered and goods sold to the Sellers after the Closing Date which are incurred in the ordinary course of the Business;

(i) Transaction Taxes as provided in Section 10.1;

(j) Liabilities of Sellers after the, which were incurred in the ordinary course of the Business, under the Sellers’ Rebate Program, Customer Credit Program and Free Shipping Program; and


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(k) any Liabilities set forth on Schedule 2.3.

All such Liabilities of the Sellers, of whatever kind or nature, known or unknown, fixed or contingent, accrued or unaccrued, other than the Assumed Liabilities, are hereinafter referred to as the “Excluded Liabilities.” Purchaser shall not assume or pay, perform, discharge or be responsible for any of the Excluded Liabilities.

In addition, in the event that a deposit with respect to an Assumed Lease takes the form of a letter of credit under the existing credit facility among the Sellers and the DIP Lenders (referred to herein as, the “Existing Wells Letters of Credit”), then within 10 Business Days after Closing the Purchaser shall either (i) replace the letter of credit with an alternative form of deposit; (ii) assume the obligations of the applicable Seller with respect to such letter of credit (which will then become an Assumed Liability) and either (A) provide Wells Fargo with cash collateral in the amount equal to 105% of the face amount of such Existing Wells Letters of Credit on terms acceptable to Wells Fargo or (B) provide Wells Fargo with an original supporting letter of credit in favor of Wells Fargo in the amount of 105% of the face amount of such Existing Wells Letters of Credit, in form and substance satisfactory to Wells Fargo and issued by a bank acceptable to Wells Fargo; or (iii) negotiate an alternative mutually satisfactory arrangement with Wells Fargo.

Section 2.4 Adjustment of Receivables Purchase Price.

The Purchase Price shall be decreased as follows:

(a) Total Working Capital is estimated to be approximately $48,000,000.00 on May 3, 2019. Subject to the last sentence of Section 2(b), if Total Working Capital of the Sellers is less than $47.5 million on the Closing Date, then the shortfall will be a dollar for dollar adjustment downwards in the Receivables Purchase Price that shall be netted from the amount paid from the Receivables pursuant to Section 2.2 (b);

(b) Customer deposits for Unfulfilled Customer Orders is estimated to be approximately $1,900,000.00 on May 3, 2019. If customer deposits for Unfulfilled Customer Orders total above $2,150,000.00, there will be a dollar for dollar adjustment downwards in the Receivables Purchase Price that shall be netted from the amount paid pursuant to Section 2.2 (b).

(c) Current Customer Credits are estimated to be $1.1 million on May 3, 2019. If Current Customer Credits of the Sellers total above $1.4 million, there will be a dollar for dollar adjustment downwards in the Receivables Purchase Price that shall be netted from the amount paid pursuant to Section 2.2 (b). There will be no adjustment pursuant to this Section 2.4 (d) for customer credits and balances owed for returns of purchased merchandise to Sellers and Robert Allen Fabrics (Canada) Ltd. incurred in the ordinary course of the Business and recorded on the Sellers’ books and records on or before July 31, 2018.

(d) All adjustments pursuant to this Section 2.4 shall be calculated by Sellers and delivered to the Purchaser on the Business Day prior to the Closing Date based on the Sellers’ books and records and in a manner consistent with Sellers’ past practices and Schedule 2.4(d). The manner in which the adjustments pursuant to this Section 2.4 shall be determined


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(and any disputes resolved) is more fully set forth on Schedule 2.4(d), which includes the calculation of projected Total Working Capital as of May 4, 2019.

Section 2.5 Deposit. The Deposit shall be held pursuant to the terms of the Bid Procedures and this Agreement.

Section 2.6 Allocation of Purchase Price. As soon as practicable after the Closing Date, Purchaser will deliver to Sellers a statement setting forth an allocation of the Purchase Price in accordance with applicable law (the “Allocation Statement”). Sellers shall notify Purchaser within thirty (30) days after the receipt of the draft Allocation Statement if Sellers considers the amount allocated to any Purchased Assets to be inconsistent with applicable Tax law (including any determination of fair market value). Sellers and Purchaser shall attempt to resolve any disagreement in good faith. If Sellers and Purchaser fail to reach agreement as to an alternative allocation in the ten (10) days following such notice, the dispute with respect to the Allocation Statement shall promptly be presented to an accounting firm mutually chosen by the Parties (the “Independent Accounting Firm”) for a decision that shall be rendered in a timely manner in order to permit the timely filing of all applicable forms with the IRS and other Tax authorities. The Independent Accounting Firm’s review shall be final and binding on all parties. The fees, costs and expenses incurred in connection therewith shall be shared equally by Sellers and Purchaser. Each of Sellers and Purchaser shall (i) timely file all forms (including IRS Form 8594) and Tax Returns required to be filed in connection with the Allocation Statement, (ii) be bound by such allocation for purposes of determining Taxes, (iii) prepare and file, and cause its Affiliates to prepare and file, its Tax Returns on a basis consistent with such allocation and (iv) take no position, and cause its Affiliates to take no position, inconsistent with such allocation on any applicable Tax Return, in any audit or proceeding before any taxing authority, in any report made for Tax, financial accounting or any other purposes, or otherwise, unless otherwise required pursuant to a final determination. Each of Purchaser, on the one hand, and Sellers, on the other hand, will provide the other with copies of IRS Form 8594 and any required exhibits thereto, consistent with the allocation determined pursuant to this Section 2.6 upon request. In the event that the allocation set forth on the Allocation Statement is disputed by any taxing authority, the Party receiving notice of such dispute shall promptly notify the other Party hereto concerning the existence of, material developments regarding, and resolution of such dispute.

Section 2.7 Apportionments. The following are to be apportioned as of 12:00 midnight on the day preceding the Closing Date (the “Apportionment Date”) to the extent such are valid post-petition claims or are subject to non-avoidable liens: rent (including percentage rent and additional rent) under any of the Assigned Leases, water, sewer and utility charges and real estate taxes, to the extent payable under the Assigned Leases and such other apportionment and adjustments as are customarily apportioned in transactions of this nature, including insurance premiums payable to landlords under any of the Assigned Leases, any merchant association dues and amounts payable under Assigned Leases. To the extent items of apportionment such as percentage rent based on sales are dependent on performance variables subsequent to the Closing Date, then apportionment shall be calculated based upon results in the prior year. The Cash Purchase Price shall be adjusted by the net aggregate amount of such other apportionment, with such net adjustment, if any, being paid in cash to the Party entitled to it. Further, the Cash Purchase Price shall be increased by the amount of any deposits (including security deposits) and


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pre-payments by Sellers under any Assigned Contracts or Assigned Leases. Except as otherwise provided herein, all apportionment shall be made on the basis of actual bills, to the extent available after commercially reasonable efforts by Sellers to obtain the same, or, in the absence of such actual bills, on good faith estimates of Sellers based on the most recent bill received by Sellers. All apportionment shall be final and there shall be no re-apportionment based upon subsequent receipt of the final bills. Any apportionments that are not made on the Closing Date shall be made promptly after the Closing Date. Any apportionments for which Sellers seek payment at the Closing shall be identified by Sellers in writing at least two (2) Business Days prior to the Closing Date.

Section 2.8 Casualty and Condemnation. To the extent applicable and not otherwise adjusted for pursuant to Section 2.4 hereof, in the event of any damage or destruction by reason of any casualty to any of the Purchased Assets after the date hereof and prior to the Closing Date, or if prior to the Closing Date there shall be any taking by condemnation or eminent domain of any of the Purchased Assets, the Sellers shall (i) in the case of damage or destruction, pay over to Purchaser at Closing any insurance proceeds received by the Sellers prior to the Closing Date and assign to Purchaser all of the Sellers’ right, title and interest in and to any additional proceeds related to such damage or destruction and (ii) in the case of condemnation or eminent domain, pay over to Purchaser all awards received by the Sellers on account of such condemnation or eminent domain prior to the Closing Date and assign to Purchaser all of the Sellers’ right to receive any additional awards related to such condemnation or eminent domain; provided, that if all such casualties and takings by condemnation or eminent domain constitute, collectively, a Material Adverse Change, Purchaser shall have the right to terminate this Agreement prior to the Closing Date.

Section 2.9 Disclaimer of Additional Representations and Warranties; Schedules. The Purchaser acknowledges and agrees that except as expressly set forth in Article III of this Agreement and the Schedules hereto and in the filings by the Sellers in the Cases, the Sellers: (i) make no representations or warranties whatsoever, express or implied, with respect to the Business, or its operations, assets (including, without limitation, the Purchased Assets), liabilities (including, without limitation, the Assumed Liabilities) or conditions, including, with respect to the Purchased Assets; and (ii) make no representations or warranties whatsoever, express or implied, of merchantability, suitability or fitness for a particular purpose, or quality as to the Purchased Assets, or any part thereof, or as to the condition or workmanship thereof, or the absence of any defects therein, whether latent or patent. Purchaser further acknowledges that the Purchaser has conducted an independent inspection and investigation of the physical condition of all portions of the Purchased Assets and all such other matters relating to or affecting the Purchased Assets and the Business as Purchaser deemed necessary or appropriate and that in proceeding with its acquisition of the Purchased Assets, Purchaser is doing so based solely upon such independent inspections and investigations. Accordingly, Purchaser will accept the Purchased Assets at the Closing “AS IS”, “WITH ALL FAULTS” and “WHERE IS” on the date hereof and in their present condition, subject to reasonable use, wear and tear between the date hereof and the Closing Date.

(a) Notwithstanding anything to the contrary contained in this Agreement, no matter primarily relating to any of the Excluded Assets or Excluded Liabilities is required to be disclosed on any Schedule. In addition, any item disclosed on any one Schedule shall be deemed


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to be disclosed on each Schedule, where relevant. Disclosure of an item in any Schedule shall not be deemed to be an admission that such item is material.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Subject to Sections 2.9 and 12.1, the Sellers represent and warrant to the Purchaser as follows:

Section 3.1 Organization and Authority of Sellers. Each Seller is duly organized, and validly existing under the laws of its state of incorporation or organization, and will be in good standing on the Closing Date. Subject to issuance of the Confirmation Order and final approval of the Sellers’ Board of Directors, which shall occur prior to April 17, 2019: each Seller has full corporate or other organizational power and authority to execute and deliver this Agreement and each of the Ancillary Documents to which it is a party; the execution and delivery by each Seller of this Agreement and the Ancillary Documents and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate or other organizational action on the part of each Seller; and this Agreement constitutes, and each of the Ancillary Documents upon its execution will constitute, the legal, valid and binding obligation of each Seller enforceable in accordance with its terms.

Section 3.2 No Conflict or Violation. The execution, delivery and performance by each of the Sellers of this Agreement and the Ancillary Documents to which such Seller is a party do not and will not violate or conflict with any provision of the Certificate of Incorporation or By-laws (or equivalent documents) of such Seller and do not and will not (i) violate, in any material respect, any provision of law, or any order, judgment or decree of any court or other Governmental Authority applicable to such Seller, or (ii) violate or result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any Assigned Contract.

Section 3.3 Consents and Approvals. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Sellers or any of their properties is required for the execution and delivery by the Sellers of this Agreement or the Ancillary Documents and performance of and compliance by the Sellers with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein, except the entry of the Confirmation Order. No consent, approval or authorization of any Person (other than a court or governmental agency) is required in connection with the execution and delivery of this Agreement or the Ancillary Documents or the consummation by the Sellers of the transactions contemplated herein and therein, except for (i) any consent, approval, authorization, order, registration or qualification which, if not made or obtained, has not and would not reasonably be expected, individually or in the aggregate, to prohibit, materially delay or materially and adversely impact the Sellers’ performance of their obligations under this Agreement or the Ancillary Documents and (ii) the consent of the DIP Lenders, which has been obtained.


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Section 3.4 Compliance with Law. The Sellers (i) have complied in all material respects with all laws, regulations, orders and other legal requirements applicable to the Business or the Purchased Assets, (ii) to Sellers’ Knowledge, have not received written notice of any material violation of any law, regulation, order or other legal requirement and (iii) to Sellers’ Knowledge, are not in default in any material respect under any order, writ, judgment, award, injunction or decree of any Governmental Authority, applicable to the Business or the Purchased Assets.

Section 3.5 Title to the Purchased Assets. The Sellers have good and valid title to each of the Purchased Assets that are owned by the Sellers. The entry of the Confirmation Order and the delivery to the Purchaser of the instruments of transfer of ownership contemplated by this Agreement will vest good and valid title to the Purchased Assets in the Purchaser, free and clear of all Encumbrances thereon, other than Permitted Encumbrances or as set forth on any of the Schedules hereto.

Section 3.6 Assigned Contracts and Assigned Leases. Except as set forth on Schedule 3.6, true and complete copies of all of the Assigned Leases and Assigned Contracts have been provided by the Sellers to Purchaser. At the Closing, the Sellers shall have cured any and all defaults or have provided adequate assurance that they will cure any and all defaults with respect to Assigned Leases and Assigned Contracts as provided in section 365 of the Bankruptcy Code and as required by the Bankruptcy Court so that at the Closing, there shall be no material defaults under any of the Assigned Leases and Assigned Contracts, it being understood that the Purchaser shall pay the Cure Costs for the Assigned Leases and Assigned Contracts. Except as set forth on Schedule 3.6 and for Cure Costs, which shall be paid by Sellers or Purchaser as provided herein, neither the Sellers nor, to the Sellers’ Knowledge, any other party under any of the Assigned Leases and Assigned Contracts has commenced any action against the other or given or received any written notice of any material default or violation under any Assigned Lease or Assigned Contract which was not withdrawn or dismissed, except only for those defaults which will be cured prior to the Closing in accordance with the Confirmation Order (or which need not be cured under the Bankruptcy Code to permit the assumption and assignment of Assigned Leases and Assigned Contracts). Except for the Assigned Contracts, Assigned Leases and any other contract that is listed on Schedule G to the Amended Schedules and Statement of Financial Affairs filed by the Sellers with the Bankruptcy Court, as they may be amended on or before the Schedules Completion Date, no Seller is a party to or bound by any material contract relating to the Business.

Section 3.7 Intellectual Property. The Sellers own or possess valid and enforceable rights to use, all Sellers’ Intellectual Property. Schedule 3.7 sets forth a true, correct and complete list of all material U.S. and foreign (i) issued patents and pending applications for patents; (ii) registered trademarks and pending applications for trademarks; (iii) registered copyrights and pending applications for copyrights; and (iv) domain names and social media accounts, in each case which are owned by any Seller. Schedule 3.7 sets forth a true, correct and complete list of all material licenses, sublicenses or other material contracts to which any Seller is a party or otherwise bound pursuant to which any Seller has granted to a third party or has been granted or have obtained by or from a third party any right to use any Intellectual Property that is material to the Business (other than contracts granting rights to use readily available commercial software that is generally available on nondiscriminatory pricing terms and having


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an acquisition price of less than $50,000 in the aggregate for all such related contracts. To Sellers’ Knowledge: (a) no Seller is infringing, misappropriating or otherwise violating the Intellectual Property of any other Person and no such claims or Proceedings have been asserted or threatened in writing against any Seller by any other Person in the past three (3) years and (b) no Person is infringing, misappropriating or otherwise violating any Sellers’ Intellectual Property and no such claims or Proceedings have been asserted or threatened in writing against any Person by Sellers in the past three (3) years.

Section 3.8 Litigation. Other than in connection with the Cases, there are no material actions, causes of action, claims, suits or proceedings pending or, to Sellers’ Knowledge, threatened against any of the Sellers that (i) seek to restrain or enjoin the consummation of or would materially and adversely affect, the transactions contemplated hereby or (ii) could reasonably be expected to result in a Material Adverse Change.

Section 3.9 Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by the Sellers without the intervention of any other Person acting on the Sellers’ behalf (except for SSG Capital Advisors, LLC, whose fee shall be borne by the Sellers subject to Bankruptcy Court approval) in such manner as to give rise to any valid claim by any such Person against the Purchaser for a finder’s fee, brokerage commission or other similar payment based on an arrangement with the Sellers.

Section 3.10 Subsidiaries. Schedule 3.10 sets forth a complete and accurate list of all Subsidiaries of Décor Holdings, Inc., together with the jurisdiction of organization of each such Subsidiary.

Section 3.11 Labor Relations. The Sellers are not parties to, or bound by, any material collective bargaining agreement, contract or other agreement or understanding with a labor union or labor organization; there are no material current or, to the Sellers’ Knowledge, threatened organizational activities or demands for recognition by a labor organization seeking to represent Sellers’ Employees.

Section 3.12 No Other Representations or Warranties. Except for the representations and warranties contained in this Article III (subject to the disclosures set forth on the Schedules), none of Sellers nor any other Person makes any other express or implied representation or warranty with respect to Sellers, the Purchased Assets or Assumed Liabilities or the transactions contemplated by this Agreement, and each Seller disclaims any other representations or warranties, whether made by Sellers, any Affiliate of Sellers, or any of Sellers’ or their Affiliates’ respective representatives. Except for the representations and warranties contained in this Article III (subject to the disclosures set forth on the Schedules), each Seller (a) expressly disclaims and negates any representation or warranty, expressed or implied, at common law, by statute, or otherwise, relating to the condition of the Purchased Assets (including any implied or expressed warranty of merchantability or fitness for a particular purpose, or of conformity to models or samples of materials) and (b) disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Purchaser or its Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Purchaser by any representative of Sellers or any of its Affiliates). Sellers


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make no representations or warranties to Buyers regarding the probable success or profitability of the Purchased Assets or the use thereof.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to the Sellers as follows:

Section 4.1 Authority of Purchaser. Purchaser is a limited liability company, validly existing, and in good standing under the laws of the State of Delaware. Purchaser has full corporate or other organizational power and authority to execute and deliver this Agreement, and the execution and delivery by Purchaser of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary limited liability company action on the part of Purchaser, and this Agreement constitutes the legal, valid and binding obligation of Purchaser enforceable in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium, or similar laws from time to time in effect which affect creditors’ rights generally, and by legal and equitable limitations on the enforceability of specific remedies.

Section 4.2 No Conflict or Violation. The execution, delivery and performance by Purchaser of this Agreement and the Ancillary Documents do not and will not violate or conflict with any provision of the Certificate of Formation or Limited Liability Company Operating Agreement of Purchaser and do not and will not violate any provision of law, or any order, judgment or decree of any court or other Governmental Authority applicable to Purchaser, or violate or result in a material breach of or constitute (with due notice or lapse of time or both) a default under any loan agreement, mortgage, security agreement, indenture or other instrument to which Purchaser is a party or by which it is bound.

Section 4.3 Consents and Approvals. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body or other entity or Person, other than the Bankruptcy Court, is required to be obtained or made by the Purchaser for the execution and delivery by the Purchaser of this Agreement or the Ancillary Documents to which it is a party and performance of and compliance by the Purchaser with all of the provisions hereof and thereof and the consummation of the transactions contemplated herein and therein, except for any consent, approval, authorization, order, registration or qualification which, if not made or obtained, has not and would not reasonably be expected, individually or in the aggregate, to prohibit, materially delay or materially and adversely impact the Purchaser’s performance of its obligations under this Agreement.

Section 4.4 Availability of Funds. Purchaser has and will at Closing have freely available funds sufficient to allow it to pay the Purchase Price at the times and in the manner set forth in this Agreement and to satisfy all its other obligations under this Agreement. The financial information provided to Sellers by Purchaser in accordance with the Bid Procedures Order is true and correct.


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Section 4.5 Litigation. There are no actions, causes of action, claims, suits, proceedings, orders, writs, injunctions, or decrees pending or, to the Purchaser’s Knowledge, threatened against Purchaser at law or in equity or before or by any Governmental Authority, which seeks to restrain or enjoin the consummation of the transactions contemplated hereby or that shall otherwise materially adversely affect the ability of Purchaser to perform its obligations hereunder.

Section 4.6 Brokers. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried on by Purchaser without the intervention of any other Person acting on its behalf in such manner as to give rise to any valid claim by any such Person against the Sellers or their Affiliates for a finder’s fee, brokerage commission or other similar payment based on an arrangement with Purchaser.

Section 4.7 Adequate Assurances Regarding Executory Contracts. Purchaser believes in good faith that it is and will be capable of satisfying the conditions contained in sections 365(b)(1)(c) and (f) of the Bankruptcy Code with respect to the Executory Contracts.

Section 4.8 Purchaser’s Acknowledgment. Purchaser is not aware of any facts or circumstance, which (with or without notice or lapse of time or both) would cause any representations or warranties of any Seller to be untrue or incorrect in any respect.

Section 4.9 Purchased Assets “AS IS”; Purchaser’s Acknowledgment Regarding Same. Purchaser acknowledges, agrees, warrants, and represents that, except as set forth in this Agreement, (a) Purchaser is purchasing the Purchased Assets on an “AS IS”, “WITH ALL FAULTS” and “WHERE IS” basis based solely on Purchaser’s own investigation of the Purchased Assets and (b) none of the Sellers nor any broker, agent, officer, employee, servant, attorney, or representative of any Seller has made any warranties, representations or guarantees, express, implied or statutory, written or oral, respecting the Purchased Assets or the Assumed Liabilities, any part of the Purchased Assets or the Assumed Liabilities, relating to the financial performance of the Purchased Assets or the Business, or the physical condition of the Purchased Assets. Purchaser further acknowledges that the consideration for the Purchased Assets specified in this Agreement has been agreed upon by Sellers and Purchaser after good-faith arms-length negotiation in light of Purchaser’s agreement to purchase the Purchased Assets “AS IS”, “WITH ALL FAULTS” and “WHERE IS”. Purchaser confirms that Sellers have made available to Purchaser the opportunity to ask questions of the officers and management of Sellers and to acquire additional information about the Business, the Purchased Assets and the Assumed Liabilities. Purchaser agrees, warrants, and represents that, except as set forth in this Agreement, Purchaser has relied, and shall rely, solely upon Purchaser’s own investigation of all such matters, and that Purchaser assumes all risks with respect thereto. PURCHASER ACKNOWLEDGES, AGREES, WARRANTS, AND REPRESENTS THAT, EXCEPT AS SET FORTH IN THIS AGREEMENT, NO SELLER MAKES ANY EXPRESS WARRANTY, ANY WARRANTY OF MERCHANTABILITY, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR ANY IMPLIED OR STATUTORY WARRANTY WHATSOEVER WITH RESPECT TO ANY REAL OR PERSONAL PROPERTY OR ANY FIXTURES OR THE PURCHASED ASSETS, THE ASSUMED LIABILITIES OR THE BUSINESS.


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ARTICLE V.

CERTAIN COVENANTS OF THE SELLERS

Section 5.1 Conduct of Business Before the Closing Date. Without the prior written consent of Purchaser or unless otherwise ordered by the Bankruptcy Court, between the date hereof and the Closing Date, except as required or expressly permitted pursuant to the terms hereof, the Sellers (i) shall not make any material change in the Purchased Assets or the Business as it relates to the Purchased Assets, (ii) shall not enter into any transaction respecting the Business other than in any such case in the ordinary course of the Business consistent with the Sellers’ past practices taking into account Sellers’ status as debtors and debtors in possession, and (iii) shall continue to operate the Business as it relates to the Purchased Assets in the ordinary course of the Business and consistent with past practices taking into account Sellers’ status as debtors and debtors-in-possession and consistent with the Sellers debtor-in-possession operating budgets as approved in the Cases. Without limiting the generality of, but subject to, the foregoing, unless otherwise consented to in writing by Purchaser the Sellers shall, consistent with their past practices taking into account Sellers’ status as debtors and debtors-in-possession, where applicable:

(a) Perform all of their material post-petition obligations under the Assigned Leases and Assigned Contracts in accordance with their terms, except for obligations which are not required to be performed under the Bankruptcy Code or which are being disputed by the Sellers in good faith;

(b) Comply in all material respects with all statutes, laws, ordinances, rules and regulations applicable to the Purchased Assets and Assumed Liabilities except where compliance is being disputed by the Sellers in good faith or excused by the Bankruptcy Code or other applicable law;

(c) Not amend or modify, in any material respect, or terminate any of the Assigned Leases or Assigned Contracts or agree or consent to any material amendments or modifications or terminations thereof;

(d) Promptly notify Purchaser of any order of the Bankruptcy Court entered in the Cases that affects or will affect the operation of the Business or the Purchased Assets in any material respect and promptly deliver a copy of any such order to Purchaser; and

(e) Not sell, lease, license, transfer or dispose of any assets, properties, rights and claims that would otherwise constitute Purchased Assets if owned by the Sellers on the Closing Date, other than in the ordinary course of business and consistent with the Sellers debtor-in-possession operating budgets as approved in the Cases.

Section 5.2 Information and Access. From and after the date hereof through the Closing Date, the Sellers will permit representatives of Purchaser to have reasonable access during normal business hours after reasonable notice from Purchaser to the Sellers, and in a manner so as not to interfere with the Sellers’ normal operations, to all premises, properties, personnel, accountants, books, records, contracts and documents of or pertaining to the Business.


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Purchaser and each of its representatives will treat and hold as confidential such information in accordance with the terms and provisions of that certain Confidentiality Agreement, entered into on February 14, 2019, between Henry and Wallace LLC and the Sellers (the “Confidentiality Agreement”), which Confidentiality Agreement remains in full force and effect. Purchaser shall reimburse the Sellers for any out-of-pocket costs incurred by the Sellers in providing such access. Purchaser shall indemnify, defend and hold harmless the Sellers, the lessors under the leases and their respective Affiliates from and against any and all claims, demands, causes of action, losses, damages, liabilities, cost and expenses (including, without limitation, attorneys’ fees and disbursements), suffered or incurred by such Persons in connection with (i) Purchaser’s or Purchaser’s representatives’ entry upon any Showroom, Warehouse or other premises pertaining to the Business or (ii) any and all other activities undertaken by Purchaser or Purchaser’s representatives with respect to the Showrooms, Warehouses or other premises pursuant to this Section 5.2. The Parties agree and acknowledge that the provisions of this Section 5.2 shall in no way affect the conditions set forth in Article VIII of this Agreement.

Section 5.3 Further Assurances. Upon the request of the Purchaser at any time after the Closing Date, the Sellers shall forthwith execute and deliver such documents and take such actions as Purchaser or its counsel may reasonably request to effectuate the purposes of this Agreement, in each case at Purchaser’s cost and expense.

Section 5.4 Reasonable Efforts. Upon the terms and subject to the conditions of this Agreement, the Sellers will use commercially reasonable efforts to (i) take, or cause to be taken, all action, and to do, or cause to be done, all things necessary or proper consistent with applicable law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby and (ii) obtain entry of the Confirmation Order by the Bankruptcy Court.

Section 5.5 Internet Address/Domain Name/Social Media; Name Change Filings. At the Closing or as soon thereafter as is practicable, but in no event later than thirty (30) days after the Closing Date, Sellers will cooperate with Purchaser and perform all steps reasonably necessary to transfer to Purchaser all the domain name registrations and social media accounts in which Sellers have an interest, including the domain names and social media accounts set forth on Schedule 3.7. Within thirty (30) days after the Closing Date, The Robert Allen Duralee Group, LLC, The Robert Allen Duralee Group, Inc. and The Robert Allen Duralee Group Furniture, LLC shall file with the Secretary of State of the state of organization of such Seller an amendment to its each applicable Seller’s certificate of formation or certificate of incorporation, as the case may be, to change its name to a name which does not contain “Robert Allen” or “ Duralee”, and shall promptly provide Purchaser with evidence of such filing. In addition, The Robert Allen Duralee Group, LLC, The Robert Allen Duralee Group, Inc. and The Robert Allen Duralee Group Furniture, LLC shall, within ninety (90) days after the Closing Date, take such actions and file such documents as are necessary to reflect such name change in all states in which such Seller is qualified to do business as a foreign limited liability company and will deliver to Purchaser copies of such documents evidencing such name change filings. Sellers shall not use the corporate names and trade names that include “Robert Allen” or “Duralee” after the Closing, except (i) as required for the Cases or to pursue rights and claims against third parties, (ii) in connection with filing of Tax Returns, insurance claims and any other necessary filings and (iii) in connection with publishing any notices required by the Bankruptcy Court. Purchaser


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hereby grants to Sellers a limited license and right to use the corporate names, trade names, logos and customer lists relating to and used in connection with the operation of the Business, solely for the purposes set forth in the preceding sentence.

Section 5.6 Schedules. Sellers shall deliver each schedule to this Agreement not provided to Purchaser prior to the execution of this Agreement, other than Schedules 2.1 (k) and 2.1(l) which shall be provided by Purchaser, on or prior to 5:00 p.m. EDT on the Schedules Completion Date and Purchaser either shall provide its consent to the inclusion of such schedules or terminate in accordance with Section 9.4(c) (ii) on or prior to 5:00 p.m. EDT on April 24, 2019.

ARTICLE VI.

CERTAIN COVENANTS OF PURCHASER

Section 6.1 Reasonable Efforts. Upon the terms and subject to the conditions of this Agreement, Purchaser will use commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary or proper consistent with applicable law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby.

Section 6.2 Consents and Approvals. Purchaser shall use commercially reasonable efforts to provide, at the Sellers’ request, assistance in obtaining the Confirmation Order.

Section 6.3 Adequate Assurances Regarding Assigned Contracts. With respect to each Assigned Contract and Assigned Lease, Purchaser shall use its best efforts to provide adequate assurance as required under the Bankruptcy Code of the future performance of such Assigned Contract or Assigned Lease by Purchaser. Purchaser agrees that it will promptly take all actions as are reasonably required by the Sellers to assist in obtaining the Bankruptcy Court’s entry of the Confirmation Order, such as furnishing affidavits, non-confidential financial information or other documents or information for filing with the Bankruptcy Court and making Purchaser’s employees and representatives available to testify before the Bankruptcy Court, with respect to demonstrating adequate assurance of future performance by Purchaser under the Assigned Contracts and Assigned Leases.

Section 6.4 Performance Under Assigned Contracts and Assigned Leases. Purchaser agrees that from and after the Closing Date it shall take all actions necessary to satisfy its obligations under the terms and conditions of each of the Assigned Contracts and Assigned Leases.

Section 6.5 Further Assurances. Upon the request of the Sellers at any time after the Closing Date, the Purchaser shall forthwith execute and deliver such documents and take such actions as the Sellers or their counsel may reasonably request to effectuate the purposes of this Agreement.

Section 6.6 Privacy Policies. Purchaser hereby covenants and agrees to adopt and comply with the Sellers’ privacy policies and practices, as provided by Sellers to Purchaser.


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Section 6.7 Schedules. Subject to Section 2.1(r), Purchaser shall deliver Schedules 2.1 (k) and 2.1(l) to Sellers on or prior to 5:00 p.m. EDT on the Schedules Completion Date.

ARTICLE VII.

CONDITIONS TO THE SELLERS’ OBLIGATIONS

The obligations of the Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction (unless waived in writing by the Sellers) of each of the following conditions on or prior to the Closing Date:

Section 7.1 Representations and Warranties. All of the representations and warranties made by Purchaser in this Agreement shall be true and correct in all material respects (other than those representations and warranties that are qualified by materiality, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, which shall be true and correct as of such date). Purchaser shall have delivered to the Sellers a certificate signed by an officer of Purchaser, dated the Closing Date, to the foregoing effect.

Section 7.2 Compliance with Agreement. Purchaser shall have performed and complied in all material respects (and in all respects in the case of Article II hereof) with all covenants and conditions to be performed or complied with by it on or prior to the Closing Date. Purchaser shall have delivered to the Sellers a certificate signed by managing member of Purchaser, dated the Closing Date, to the foregoing effect.

Section 7.3 Higher or Better Offers. Sellers shall not have received and accepted an offer or offers for a sale of the Purchased Assets, the Excluded Assets or any combination thereof to any Person, which offer or offers are submitted in accordance and compliance with the terms and conditions of the Bid Procedures Order, is (are) found by the Bankruptcy Court to be higher or better, either individually or in the aggregate, than any other offer(s) for the sale of the Purchased Assets, including without limitation the Purchase Price and any higher or better offer of Purchaser, and is (are) approved by the Bankruptcy Court.

Section 7.4 Entry of the Confirmation Order. (i) The Bankruptcy Court shall have entered the Confirmation Order; (ii) notwithstanding Bankruptcy Rules 3020(e), 6004(h) and 6006(d) the terms and conditions of the Confirmation Order will be effective and enforceable immediately upon entry; (iii) the Confirmation Order shall not be stayed pursuant to an appeal or any other such order; and (iv) the Confirmation Order as entered by the Bankruptcy Court shall not modify the terms and conditions of this Agreement or the transactions contemplated hereby in any way that adversely affects the Sellers or the DIP Lenders.

Section 7.5 No Legal Impediment to Closing. There shall not be pending or threatened by any Governmental Authority any Proceeding challenging or seeking to enjoin or otherwise prohibit any of the transactions contemplated by this Agreement or seeking to obtain from Purchaser in connection with the transactions contemplated by this Agreement any damages or to impose any restrictions or conditions.


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Section 7.6 Consents and Approvals. All consents from any Person (including any Governmental Authority) which are necessary to consummate the transactions contemplated hereby shall have been filed, been obtained or occurred and such consents shall not have expired or been withdrawn.

Section 7.7 Purchaser Deliveries. Each of the deliveries required to be made to Sellers pursuant to Section 9.3 shall have been so delivered.

Section 7.8 Payment of Purchase Price. Purchaser shall have paid the Purchase Price in accordance with Section 2.2.

ARTICLE VIII.

CONDITIONS TO PURCHASER’S OBLIGATIONS

The obligation of Purchaser to consummate the transactions contemplated by this Agreement is subject to the satisfaction (unless waived in writing by Purchaser) of each of the following conditions on or prior to the Closing Date:

Section 8.1 Representations and Warranties. All of the representations and warranties made by Sellers in this Agreement shall be true and correct in all material respects (other than those representations and warranties that are qualified by materiality or Material Adverse Change, which shall be true and correct in all respects) as of the date hereof and as of the Closing Date as though made at and as of the Closing Date (except to the extent such representations and warranties expressly speak as of an earlier date, which shall be true and correct as of such date); provided, however, that in the event of a breach of a representation or warranty, other than a representation or warranty qualified by a Material Adverse Change, the condition set forth in this Section 8.1 shall be deemed satisfied unless the effect of all such breaches of representations and warranties taken together result in a Material Adverse Change. The Sellers shall have delivered to Purchaser a certificate signed by an officer of the Sellers, dated the Closing Date, to the foregoing effect; provided, that none of such individuals shall have any personal liability arising out of or resulting from such certificate.

Section 8.2 Compliance with Agreement. The Sellers shall have performed and complied in all material respects with all covenants and conditions to be performed or complied with by them on or prior to the Closing Date. The Sellers shall have delivered to Purchaser a certificate signed by an executive officer of each of the Sellers, dated the Closing Date, to the foregoing effect; provided, that none of such individuals shall have any personal liability arising out of or resulting from such certificate.

Section 8.3 Entry of the Confirmation Order. (i) The Bankruptcy Court shall have entered the Confirmation Order; (ii) notwithstanding Bankruptcy Rules 3020(e), 6004(h) and 6006(d) the terms and conditions of the Confirmation Order will be effective and enforceable immediately upon entry; (iii) the Confirmation Order shall not be stayed pursuant to an appeal or any other such order; and (iv) the Confirmation Order as entered by the Bankruptcy Court shall not modify the terms and conditions of this Agreement or the transactions contemplated hereby in any way that adversely affects Purchaser.


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Section 8.4 Material Adverse Change. No Material Adverse Change shall have occurred since the date of this Agreement arising from causes outside the control of Purchaser and which could not have been avoided by Purchaser’s exercise of reasonable care.

Section 8.5 No Legal Impediment to Closing. There shall not be pending or threatened by any Governmental Authority any Proceeding challenging or seeking to enjoin or otherwise prohibit any of the transactions contemplated by this Agreement or seeking to obtain from Purchaser in connection with the transactions contemplated by this Agreement any damages or to impose any restrictions or conditions.

Section 8.6 Consents and Approvals. All consents from any Person (including any Governmental Authority) which are necessary to consummate the transactions contemplated hereby shall have been filed, been obtained or occurred and such consents shall not have expired or been withdrawn.

Section 8.7 Sellers Deliveries. Each of the deliveries required to be made to Purchaser pursuant to Section 9.2 shall have been so delivered.

Section 8.8 Stalking Horse Designation. Purchaser shall be designated as the stalking horse in the Cases, whose bid for the acquisition of the Purchased Assets as contemplated under this Agreement will be subject to (i) the right of overbid and topping bid by potential third-party purchasers as provided in the Bid Procedures and (ii) and the bid protections set forth in Section 9.5.

ARTICLE IX.

THE CLOSING; TERMINATION

Section 9.1 The Closing. The Closing of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities contemplated hereby (the “Closing”) shall be held no later than three (3) Business Days after entry of the Confirmation Order, provided that each of the conditions precedent set forth in Articles VII and VIII have been satisfied or waived (other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction of such conditions). The date on which the Closing occurs shall be the “Closing Date” and the Closing shall be deemed to have occurred at 12:01 a.m., Eastern Time, on the Closing Date. The Closing shall be held at 10:00 am. Eastern Time at the offices of Hahn & Hessen LLP, 488 Madison Avenue, New York, New York 10022, or at such other time and place as the Parties may mutually agree in writing. At the Closing, all of the transactions provided for in Article II hereof shall be consummated on a substantially concurrent basis.

Section 9.2 Deliveries by Sellers. At or prior to the Closing, Sellers will deliver or cause to be delivered:

(a) all of the Ancillary Documents to be executed and delivered by it and any other document contemplated by this Agreement to be executed and delivered by Sellers;

(b) such other bills of sale, assignments, deeds, endorsements and other good and sufficient instruments of conveyance, assumption and transfer, in form reasonably


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satisfactory to Purchaser, as Purchaser may reasonably request in order to consummate the transactions contemplated hereby; the certificates required to be delivered pursuant to Section 7.1 and Section 7.2.

Section 9.3 Deliveries by Purchaser. At or prior to the Closing, Purchaser will deliver or cause to be delivered:

(a) the Cash Purchase Price payable pursuant to and in accordance with Section 2.2;

(b) all of the Ancillary Documents to be executed and delivered by it and any other document contemplated by this Agreement to be executed and delivered by Purchaser;

(c) such other bills of sale, assignments, deeds, endorsements and other good and sufficient instruments of conveyance, assumption and transfer, in form reasonably satisfactory to Sellers, as Sellers may reasonably request in order to consummate the transactions contemplated hereby; and

(d) the certificates required to be delivered pursuant to Section 8.1 and Section 8.2.

Section 9.4 Termination. Anything contained in this Agreement to the contrary notwithstanding, this Agreement may be terminated at any time prior to the Closing Date:

(a) by mutual written consent of the Sellers and Purchaser; or

(b) by either the Sellers or Purchaser:

(i) if the Bankruptcy Court does not approve this Agreement for any reason; provided, however, that the right to terminate this Agreement pursuant to this Section 9.4(b)(i) shall not be available to any Party whose breach of any of its representations, warranties, covenants or agreements contained herein has resulted in such failure to approve this Agreement;

(ii) if the Closing shall not have occurred by the close of business on May 3, 2019 (the “Outside Date”); provided, however, that the right to terminate this Agreement pursuant to this Section 9.4(b)(ii) shall not be available to any Party whose breach of any of such Party’s representations, warranties, covenants, or agreements contained herein results in the failure of the Closing to be consummated by such time; or

(iii) if the Confirmation Order is vacated.

(c) by Purchaser:

(i) in the event of any breach of any of Sellers’ agreements, covenants, representations or warranties contained herein that would result in the failure of a condition set forth in Section 8.1 or 8.2 to be satisfied, and Sellers have failed to cure such breach by the later of: (A) the Outside Date and (B) the date that is fifteen (15) days after receipt


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of Purchaser’s written notice of such breach; provided, however, that Purchaser is then not in material breach of any of Purchaser’s representations, warranties, covenants or agreements contained in this Agreement; or

(ii) if Purchaser elects not to consent to the inclusion in the Schedules to this Agreement of any schedules delivered by or on behalf of Sellers to Purchaser pursuant to Section 5.6 of this Agreement.

(d) by the Sellers:

(i) except as provided in Section 9.4(d)(ii), in the event of any breach of any of Purchaser’s agreements, covenants, representations or warranties contained herein that would result in the failure of a condition set forth in Section 7.1 or 7.2 to be satisfied, and the failure of Purchaser to cure such breach by the earlier of (A) the Outside Date and (B) the date that is fifteen (15) days after receipt of Sellers’ written notice of such breach; provided, however, that Sellers are not then in material breach of any of their representations, warranties, covenants or agreements contained in this Agreement; or

(ii) if (A) the conditions to Closing in Article VIII have been satisfied (or waived by Purchaser), other than those conditions that by their nature can only be satisfied at Closing, (B) Sellers have provided Purchaser with written notice that Sellers are prepared to consummate the transactions contemplated by this Agreement, and (C) the Closing does not occur within three (3) Business Days following Sellers’ delivery of such notice to Purchaser; or

(iii) to the extent applicable, at any time prior to the Auction in the Sellers’ discretion, with consultation with the Consultation Parties, for any reason as provided in the Bid Procedures Order; or

(iv) to the extent applicable, after the Auction occurs and (a) a higher or better offer is received at the Auction from another Qualified Bidder who is designated by the Sellers as the Successful Bidder and (b) either (x) Purchaser is not designated as the Next-Highest Bidder at the conclusion of the Auction or (y) Purchaser is designated as the Next-Highest Bidder but the sale of the Purchased Assets is consummated with the Successful Bidder.

Section 9.5 Effects of Termination.

(a) In the event this Agreement is terminated pursuant to Section 9.4, except as provided in this Section 9.5 all further obligations of the Parties hereunder shall terminate. If this Agreement is terminated as permitted by Section 9.4, termination shall be without liability of any Party (or any stockholder, director, officer, employee, agent, consultant or representative or such Party) to any other Party to this Agreement other than as set forth in Section 9.5(d). The provisions of this Section 9.5 shall survive any termination hereof pursuant to Section 9.4.

(b) Except as specifically provided in Section 9.5(d) below, if this Agreement is terminated, the Sellers shall return the Deposit (including any interest earned thereon) to Purchaser within 3 Business Days. In addition, if the Purchaser is selected as the Next-Highest Bidder and the sale of the Purchased Assets is not consummated with the Successful Bidder or


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the Purchaser within fifteen (15) days after the Sale Order has been entered, the Deposit shall be returned to the Purchaser.

(c) The Purchaser shall be entitled to payment of (i) a termination fee of $330,000.00 (the “Break-Up Fee”) and (ii) reimbursement of all of Purchaser’s documented, out of pocket costs and expenses (including financing fees, loan commitment fees, third party fees, legal fees and expenses, travel costs, and other out of pocket expenses) reasonably incurred in connection with the transactions contemplated hereby, in an aggregate amount not to exceed $250,000.00 (the “Expense Reimbursement”), which Break-up Fee and Expense Reimbursement shall be payable to Purchaser only if: (w) with respect to the Expense reimbursement, Purchaser provides documentation evidencing such out of pocket costs and expenses prior to the Closing (x) Purchaser is not in material breach of its obligations under this Agreement, which breach or default has not been waived in writing by Sellers; (y) Purchaser and Sellers have not otherwise terminated this Agreement pursuant to Section 9.4(a); and (z) following the Auction, either (1) Purchaser is not the Successful Bidder at the Confirmation Hearing pursuant to the Bid Procedures Order, and the Purchased Assets are sold to the Successful Bidder, or (2) Purchaser is the Successful Bidder, the conditions set forth in Article VII and Article VIII have been satisfied or waived on or prior to the Outside Date, and the Purchaser has represented to Sellers that it is ready, willing and able to consummate the transactions contemplated hereby, but any of the Sellers fail to so consummate the transactions contemplated hereby. Any Break-Up Fee and Expense Reimbursement to which the Purchaser may be entitled hereunder shall be deemed an allowed and immediately payable administrative claim in the Cases and shall be payable from the first proceeds of the third party sale that gives rise to such entitlement.

(d) The Parties agree that if the Purchaser breaches or fails to comply with any of its covenants, representations or warranties hereunder or if the transactions provided for in this Agreement are not consummated due to the breach or default of Purchaser, Sellers shall be entitled to the Deposit. The Parties agree that the Deposit shall not preclude Sellers from seeking specific performance of this Agreement.

ARTICLE X.

TAXES; RECORDS; COOPERATION

The parties hereto hereby covenant and agree as follows:

Section 10.1 Taxes Related to Purchase of Assets. Purchaser shall bear the cost of all state and local transfer, recording, stamp, sales or other similar taxes (collectively, “Transaction Taxes”) that may be imposed by reason of the sale, transfer, assignment and delivery of the Purchased Assets, along with any recording and filing fees. Purchaser and the Sellers agree to cooperate to determine the amount of Transaction Taxes payable in connection with the transactions contemplated under this Agreement. Transaction Taxes shall not include any Taxes for which the Sellers are responsible under Section 10.2. Purchaser and the Sellers agree to cooperate in the preparation and filing of any and all required returns for or with respect to such Transaction Taxes with any and all appropriate taxing authorities.


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Section 10.2 Proration of Personal Property Taxes. Personal property taxes and assessments on the Purchased Assets shall be prorated between Purchaser and the Sellers as of the Apportionment Date with respect to a taxable period that includes (but does not end on) the date preceding the Closing Date, provided, however, that the Sellers shall not be responsible for any increased assessments on personal property resulting from the transactions contemplated hereby. All such prorations shall be allocated so that items relating to time periods ending prior to the Closing Date shall be allocated to the Sellers and items related to time periods beginning on or after the Closing Date shall be allocated to Purchaser. The amount of all such prorations shall be settled and paid on the Closing Date unless, with respect to Sellers’ obligations hereunder, otherwise ordered by the Bankruptcy Court.

Section 10.3 Cooperation on Tax and Other Matters. Purchaser and the Sellers agree to furnish or cause to be furnished to each other, as promptly as practicable, such information and assistance relating to the Business as is reasonably necessary for the preparation and filing of any Tax Return, claim for refund or other required or optional filings relating to Tax matters, for the preparation for and proof of facts during any Tax audit, for the preparation for any Tax protest, for the prosecution or defense of any suit or other proceeding relating to Tax matters and for the answer of any governmental or regulatory inquiry relating to Tax matters.

(a) Purchaser agrees to retain possession of all files and records delivered to Purchaser by the Sellers for a period of at least six (6) years from the Closing Date. In addition, from and after the Closing Date, Purchaser agrees that it will provide access to the Sellers, the Committee and their respective attorneys, accountants and other professionals and representatives (after reasonable notice and during normal business hours) to Purchaser’s personnel and to such files and records as the Sellers or the Committee may reasonably deem necessary to (i) properly prepare for, file, prove, answer, prosecute or defend any such return, filing, audit, protest, claim, suit, inquiry or other proceeding, (ii) resolve any claim against the Sellers, or (iii) facilitate the administration of the Cases and other administrative activities. Sellers shall reimburse Purchaser for any reasonable out-of-pocket costs incurred by Purchaser (but not for overhead or cost of salaries or benefits of Purchaser’s personnel) in providing such access. Purchaser shall not dispose of any such documents and records except as shall be consistent with applicable law; provided, further, Purchaser shall provide Sellers with reasonable advance notice prior to the disposal of any such documents or records, together with the opportunity for Sellers to preserve such documents or records at Sellers’ cost.

(b) Purchaser shall render all reasonable assistance that Sellers may reasonably request, at no cost to Sellers (provided, the Purchaser shall not be required to incur unreimbursed out of pocket expenses to third parties to provide such assistance), in (a) bringing or defending litigation or claims and/or (b) facilitating the administration of the Cases, the administration of and/or realization on the Excluded Assets or Excluded Liabilities, and other administrative activities, and shall make available to Sellers, for and at reasonable times, Purchaser’s personnel most knowledgeable about the matter in question. Any other provision of this Agreement notwithstanding, Sellers’ rights under this Section 10.3 are fully assignable by Sellers to any estate representative, including without limitation an official committee, trustee, liquidating trust, litigation trust or similar Person empowered by the Bankruptcy Court or applicable law to discharge any administrative rights or duties in the Cases.


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ARTICLE XI.

EMPLOYEES AND EMPLOYEE BENEFITS

Section 11.1 New Employees. Effective as of the Closing, Purchaser may, in its sole discretion offer employment to any and all of Sellers’ Employees. All employees who accept Purchaser’s offer of employment are referred to herein collectively as the “New Employees”. Purchaser shall have access to and the right to meet with all of Sellers’ Employees during normal business hours prior to the Closing Date.

Section 11.2 Terms of Employment of New Employees. To the extent an employee becomes a New Employee, Purchaser agrees to:

(a) provide such New Employees with any benefits accruals, including the amount of accrued but unused vacation time and sick leave time up to three (3) weeks;

(b) be responsible for all health insurance claims relating to any New Employees if the occurrence giving rise to the claim occurred after the Closing Date; and

(c) grant such New Employees a credit for the amount of months and years of service of such New Employee for purposes of eligibility, vesting of benefits, calculation of severance pay, determination of vacation time up to three (3) weeks, sick leave, or other approved or statutory leave of absence, or for purposes of determining the amount of benefit coverage under any plan of Purchaser providing for medical, dental, and prescription drug coverage and accrual of other benefits.

Section 11.3 No Successor Employer Liability. Purchaser shall not, for any purposes, be deemed a successor employer of any of the Sellers’ Employees, and Purchaser expressly does not assume any liabilities as a successor employer.

ARTICLE XII.

MISCELLANEOUS PROVISIONS

Section 12.1 Survival of Representations, Warranties and Covenants. The representations and warranties of Sellers and Purchaser contained in this Agreement or in any certificate delivered hereunder shall not survive the Closing. The covenants and agreements contained herein that are required to be performed on or prior to the Closing Date shall terminate on the Closing Date and the covenants that require performance after the Closing Date shall survive in accordance with the terms thereof

Section 12.2 Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) on the same Business Day, if delivered personally to the recipient, (b) one (1) Business Day after the date when sent to the recipient by reputable express courier service (charges prepaid, receipt requested) or (c) on the same Business Day, if sent by e-mail transmission (with written confirmation of receipt) prior to 5:00 pm Eastern Time or the following Business Day, if sent by e-mail transmission (with written confirmation of receipt)


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after 5:00 pm Eastern Time. Such notices, demands and other communications will be sent to the Sellers and to Purchaser at the addresses indicated below (or to such other address as a Party may designate by written notice to the other Party given in accordance with this Section 12.2):

If to Purchaser: RADG Holdings, LLC 312 S. Gay Street Knoxville, TN 37902 Attention: Brant Enderle Email: [email protected]

And With a copy (which shall not constitute notice) to:

Winchester, Sellers, Foster & Steele, P.C. 800 S. Gay Street, Suite 1000 Knoxville, TN 37929 Attention: Walter N. Winchester Email: [email protected] Telephone: 865-637-1980

If to Sellers:

The Robert Allen Duralee Group, Inc. 49 Wireless Boulevard, Suite 150 Hauppauge, NY 11788 Attention: Lee Silberman Chief Executive Officer Email: [email protected] Telephone: 631-273-8800 ext. 4255

With a copy (which shall not constitute notice) to:

Don D. Grubman, Esq. Mark T. Power, Esq. Hahn & Hessen LLP 488 Madison Avenue New York, NY 10022 Email: [email protected] Email: [email protected] Telephone: 212-478-7200

And the Chief Restructuring Officer of Sellers:

Timothy Boates RAS Management Advisors, LLC 1285 Sharps Cove Road Gurley, AL 35748] Email: [email protected] Telephone: 256-776-4989

All notices from Purchaser or Sellers shall also be sent to counsel for DIP Lenders:


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Jonathan N. Helfat, Esq. Otterbourg, P.C. 230 Park Avenue New York, New York 10169-0075 Email: [email protected] Telephone: 212-905-3626

All notices from Purchaser or Sellers shall also be sent to counsel for the Committee:

Schuyler Carroll, Esq. Perkins Coie LLP 30 Rockefeller Plaza 22nd Floor New York, NY 10112-0015 Email: [email protected] Telephone: 212-262-6905

Section 12.3 Amendments and Waivers.

(a) The terms, provisions and conditions of this Agreement may not be changed, modified or amended in any manner except by an instrument in writing duly executed by each of the parties hereto; provided however that the Sellers must obtain prior consent of any such change from the DIP Lenders and/or approval of the Bankruptcy Court after notice and hearing.

(b) Neither the failure nor any delay by any Party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power, or privilege shall preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (i) no waiver that may be given by a Party shall be applicable except in the specific instance for which it is given; and (ii) no notice to or demand on one Party shall be deemed to be a waiver of any right of the Party giving such notice or demand to take further action without notice or demand.

Section 12.4 Assignment. This Agreement is binding upon and inures to the benefit of the successors and assigns of each Party to this Agreement (including any trustee appointed in respect of the Sellers under the Bankruptcy Code), but no rights, obligations or liabilities under this Agreement may be assigned by any Party without the prior written consent of the other parties hereto, provided, however, that, (a) prior to Closing, Purchaser shall be permitted, upon prior notice to Sellers, to assign all or part of its rights or obligations hereunder to an Affiliate, whereupon, references to “Purchaser” herein shall be deemed to refer to such Affiliate; provided that any such assignment shall not relieve Purchaser of any of its financial obligations to Sellers hereunder and (b) the Sellers may assign some or all of their rights or delegate some or all of their obligations hereunder to the DIP Lenders (and, upon the request of the DIP Lenders, the Sellers shall provide any such assignment to the DIP Lenders as requested by the DIP Lenders, in form and substance acceptable to the DIP Lenders) or successor entities (including any liquidating trust) pursuant to a Chapter 11 plan confirmed by the Bankruptcy Court.


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Section 12.5 Announcements. Unless ordered by the Bankruptcy Court or otherwise required by applicable law or by obligations of the parties hereto or any of their Affiliates pursuant to any listing agreement with or rules of any securities exchange, the parties hereto shall consult with each other before issuing any other press release or otherwise making any public statement with respect to this Agreement, the transactions contemplated hereby or the activities and operations of the other Party and shall not issue any such release or make any such statement without the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed).

Section 12.6 Expenses. Except as otherwise set forth in this Agreement, each Party to this Agreement shall bear all of its legal, accounting, investment banking and other expenses incurred by it or on its behalf in connection with the transactions contemplated by this Agreement, whether or not such transactions are consummated.

Section 12.7 Entire Agreement. This Agreement and the Ancillary Documents constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede and are in full substitution for any and all prior agreements and understandings between them relating to such subject matter (other than the Confidentiality Agreement, which shall remain in full force and effect). The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement.

Section 12.8 Descriptive Headings. The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 12.9 Counterparts. This Agreement may be executed in two or more counterparts (delivery of which may occur via facsimile or as an attachment to an electronic mail message in “pdf” or similar format), each of which shall be binding as of the date first written above, and, when delivered, all of which shall constitute one and the same instrument. This Agreement and any documents delivered pursuant hereto, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or as an attachment to an electronic mail message in “pdf” or similar format, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. Each such copy shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

Section 12.10 Governing Law; Jurisdiction. This Agreement shall be construed, performed and enforced in accordance with, and governed by, the laws of the State of New York, without giving effect to the principles of conflicts of laws thereof. For so long as the Sellers are subject to the jurisdiction of the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent to the jurisdiction of, the Bankruptcy Court. After the Sellers are no longer subject to the jurisdiction of the Bankruptcy Court, the parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with


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this Agreement, and consent to the jurisdiction of, the courts of the County of New York, State of New York or of the United States of America for the Eastern District of New York.

Section 12.11 Other Definitions and Interpretive Matters.

(a) Unless otherwise indicated to the contrary in this Agreement by the context or use thereof:

(i) When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a day other than a Business Day, the period in question shall end on the next succeeding Business Day.

(ii) Any reference in this Agreement to $ means U.S. dollars.

(iii) Unless the context otherwise requires, all capitalized terms used in the Exhibits and Schedules shall have the respective meanings assigned in this Agreement. No reference to or disclosure of any item or other matter in the Exhibits and Schedules shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in the Exhibits and Schedules. No disclosure in the Exhibits and Schedules relating to any possible breach or violation of any contract or law shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. Any information, item, or other disclosures set forth in any Schedule shall be deemed to have been set forth in all other applicable Schedules if the relevance of such disclosure to such other Schedule is reasonably apparent from the facts specified in such disclosure. All Exhibits and Schedules attached or annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.

(iv) Any reference in this Agreement to gender includes all genders, and words importing the singular number also include the plural and vice versa.

(v) The division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation of this Agreement. All references in this Agreement to any “Section,” “Article,” “Schedule,” or “Exhibit” are to the corresponding Section, Article, Schedule, or Exhibit of or to this Agreement unless otherwise specified.

(vi) Words such as “herein,” “hereof and “hereunder” refer to this Agreement as whole and not merely to a subdivision in which such words appear, unless the context otherwise requires.

(vii) The word “including” or any variation thereof means “including, without limitation,” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(b) Purchaser, on the one hand, and Sellers, on the other hand, participated jointly in the negotiation and drafting of this Agreement, and, in the event an ambiguity or


37

question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by Purchaser, on the one hand, and Sellers, on the other hand, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. Without limitation as to the foregoing, no rule of strict construction construing ambiguities against the draftsperson shall be applied against any Person with respect to this Agreement.

Section 12.12 Sellers’ Schedules. The Sellers’ Schedules are qualified in their entirety by reference to the specific provisions of this Agreement and are not intended to constitute, and shall not be construed as constituting, representations or warranties of Sellers, except as and to the extent provided in this Agreement. The specification of any dollar amount in the representations and warranties contained in this Agreement or the inclusion of any specific item in the Sellers’ Schedules is not intended to imply that such amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed or are within or outside of the ordinary course of business, and none of the Parties shall use the fact of the setting forth of such amounts or the fact of the inclusion of any such item in the Sellers’ Schedules in any dispute or controversy with any Party as to whether any obligation, item or matter not included in a section of the Sellers’ Schedules is or is not required to be disclosed (including whether such amounts or items are required to be disclosed as material) or in the ordinary course of business for the purposes of this Agreement. If and to the extent any information required to be furnished in any Schedule is contained in this Agreement or in any other Schedule, such information shall be deemed to be included in all of the Sellers’ Schedules to the extent the relevance of such disclosure to such other Schedule or Schedules is reasonably apparent on its face. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. In no event shall any disclosure of such additional matters be deemed or interpreted to broaden or otherwise amend any of the covenants or representations or warranties in this Agreement. The information contained in the Sellers’ Schedules is disclosed solely for purposes of this Agreement, and no information contained therein shall be deemed to be an admission by Sellers to any third party of any matter whatsoever, including of any violation of law or breach of any contract.

Section 12.13 Third Party Beneficiaries. Except for the DIP Lenders, who are third party beneficiaries of this Agreement, this Agreement is for the sole benefit of the Parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any Person (other than the DIP Lenders) any legal or equitable benefit, claim, cause of action, remedy or right of any kind.

Section 12.14 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party in any material respect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to


38

herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

Section 12.15 Non-Recourse. No past, present or future director, officer, manager, employee, incorporator, member, partner, stockholder, agent, attorney or representative of the respective Parties to this Agreement, in such capacity (any such Person in such capacity, a “No Recourse Party”), shall have any Liability with respect to this Agreement or the transactions contemplated hereby, or with respect to any claim or cause of action that may arise based on, in respect of or by reason of this Agreement or the transactions contemplated hereby, or the negotiation, execution or performance of this Agreement or the transactions contemplated hereby.

[Signature Pages to Follow]


EXHIBIT 2

Third Amended Joint Chapter 11 Plan of Liquidation


708056.v8

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF NEW YORK

------------------------------------------------------------------------ X

In re: : Chapter 11

:

Décor Holdings, Inc., et al.,1 : :

: :

: :

Case No. 19-71020 (REG) Case No. 19-71022 (REG)

Case No. 19-71023 (REG) Case No. 19-71024 (REG)

Case No. 19-71025 (REG)

:

Debtors. : Substantively Consolidated

:

------------------------------------------------------------------------ X

THIRD AMENDED JOINT CHAPTER 11 PLAN OF

LIQUIDATION PROPOSED BY THE DEBTORS

HAHN & HESSEN LLP Mark T. Power, Esq.

Janine M. Figueiredo, Esq. Alison M. Ladd Esq. 488 Madison Avenue

New York, NY 10022 T: (212) 478-7200

F: (212) 478-7400

Counsel to the Debtors and Debtors-In-Possession

Dated: May 2, 2019 New York, New York

1 The Debtors in these Chapter 11 cases, along with the last four digits of their respective federal taxpayer

identification numbers are as follows: Décor Holdings, Inc. (4174); Décor Intermediate Holdings LLC

(5414); The Robert Allen Duralee Group, Inc. (8435); The Robert Allen Duralee Group, LLC

(1798););The Robert Allen Duralee Group Furniture, LLC (2835). The corporate headquarters and

mailing address for the Debtors listed above is 49 Wireless Blvd, Ste, 150 Hauppauge, New York 11788.

The Debtors also maintain a separate corporate office at 2 Hampshire St., Suite 300, Foxboro, MA 02335.


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Table of Contents

Page

ARTICLE 1 DEFINITIONS AND RULES OF INTREPRETATION ......................... 1

A. Definitions .................................................................................................. 1

B. Rules of Interpretation ................................................................................ 8

ARTICLE 2 PROVISIONS FOR PAYMENT OF ALLOWED UNCLASSIFIED CLAIMS ..................................................................... 9

ARTICLE 3 CLASSIFICATION OF CLAIMS AND INTERESTS ........................... 10

ARTICLE 4 TREATMENT OF CLAIMS AND EQUITY INTERESTS ................... 11

ARTICLE 5 MEANS FOR IMPLEMENTATION OF THE PLAN ........................... 14

ARTICLE 6 RESOLUTION OF CLAIMS AND DISTRIBUTIONS ......................... 19

ARTICLE 7 UNEXPIRED LEASES AND EXECUTORY CONTRACTS ................ 21

ARTICLE 8 CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE PLAN ..................................................................................... 22

ARTICLE 9 EFFECT OF CONFIRMATION ........................................................... 22

ARTICLE 10 RETENTION OF JURISDICTION ....................................................... 23

ARTICLE 11 MISCELLANEOUS PROVISIONS ....................................................... 24

ARTICLE 12 CONFIRMATION REQUEST .............................................................. 28


INTRODUCTION

Décor Holdings, Inc., et al., as debtors and debtors-in-possession in the above-

captioned chapter 11 cases, respectfully submit the following Third Amended Plan of Liquidation pursuant to Chapter 11, Title 11 of the United States Code:

ARTICLE 1

DEFINITIONS AND RULES OF INTREPRETATION

A. Definitions

1.1 As used in the Plan, the following terms shall have the respective meanings

specified below.

1.2 “Administrative Claim” shall mean a Claim under Section 503(b) of the

Bankruptcy Code that is entitled to priority under Section 507(a)(1) of the Bankruptcy Code, for costs or expenses of administration of the Chapter 11 Cases, including, without limitation, any actual and necessary expenses of operating the business of the Debtors or

preserving the estate, and any and all fees and expenses of Professionals to the extent allowed by the Bankruptcy Court under Sections 330, 331 or 503 of the Bankruptcy Code.

1.3 “Administrative Claim Bar Date” shall mean (a) in accordance with the Bar Date Order, April 17, 2019 for all Administrative Claims accruing for the period from the Petition Date through March 31, 2019; and (b) for all Administrative Claims accruing on or

after April 1, 2019, the first Business Day that is thirty (30) days after the Effective Date.

1.4 “Allowed Claim” or “Allowed [ ] Claim” shall mean: (a) any Claim,

proof of which is/was filed with this Court on or before the applicable Bar Date, or which has been or hereafter is scheduled by the Debtors as liquidated in amount and not disputed

or contingent and which, in either case, is a Claim as to which no objection to the allowance thereof has been filed within the applicable period of limitation (if any) for objection to Claims fixed by the Court, or as to which any objection has been determined by an order or

judgment of the Court (allowing such Claim in whole or in part) that is no longer subject to appeal or certiorari proceedings, and as to which no appeal or certiorari proceeding is

pending, or (b) a Claim that is allowed (i) in any contract, instrument, or other agreement entered into in connection with the Plan, (ii) in a Final Order, or (iii) pursuant to the terms

of the Plan. In accordance with Section 502(d) of the Bankruptcy Code, the Claim or Claims held by any party that is subject to an avoidance cause of action which has not otherwise been waived or released herein or by prior order of the Court, shall not be an

Allowed Claim or Claims until such time as the avoidable transfer is returned or a final determination is made by the Bankruptcy Court that no avoidable transfer exists.


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1.5 “APA” shall mean the Asset Purchase Agreement entered between the Debtors, as sellers, and Purchaser dated as of April 12, 2019, all exhibits and supplemental

documents thereto and any amendments or modifications thereto.

1.6 “Assumption Notice” shall mean the notice provided to all Non-Debtor

Counterparties to executory contracts and unexpired leases pursuant to the Bidding Procedures Order, which notice identifies the Purchaser as the successful bidder at the auction and identifies the list of executory contracts and unexpired leases that have been

designated for assumption and assignment.

1.7 “Ballot” shall mean the form or forms that will be distributed along with the

Disclosure Statement to holders of Allowed Claims in classes that are Impaired under the Plan and entitled to vote, which the holders of Impaired Claims may use to vote to accept or

reject the Plan.

1.8 “Bankruptcy Code” shall mean the United States Bankruptcy Code, 11 U.S.C. §§ 101, et seq., as now in effect or hereafter amended.

1.9 “Bankruptcy Court” shall mean the United States Bankruptcy Court for the Eastern District of New York, or such other court as may hereafter be granted primary

jurisdiction over these Chapter 11 Cases.

1.10 “Bankruptcy Rules” shall mean the Federal Rules of Bankruptcy Procedure and the local rules of the Bankruptcy Court, as now in effect or hereafter amended.

1.11 “Bar Date” shall mean the applicable bar date by which a proof of claim or a request for payment of Administrative Claim must be or must have been filed, in

accordance with the procedures established by an order of the Bankruptcy Court, including the Bar Date Order and Confirmation Order.

1.12 “Bar Date Order” shall mean that certain order of the Bankruptcy Court

dated as of March 13, 2019 (Docket No. 142), establishing, among other things, (a) April 17, 2019 as the general bar date for filing proofs of Claim in the Chapter 11 Cases, (b) April

17, 2019 as the Administrative Claims Bar Date for all 503(b)9) Claims and all Administrative Claims accruing for the period from the Petition Date through March 31, 2019 and (c) August 11, 2019 as the deadline for all Governmental Units (as such term is

defined in section 101(27) of the Bankruptcy Code) for filing proofs of Claim in the Chapter 11 Cases, subject in each case to only those exceptions permitted thereby

1.13 “Bidding Procedures Order” means that certain Order (A) Approving Bid Procedures in Connection with the Sale of Substantially All of the Debtors’ Assets, (B)

Authorizing the Debtors to Enter into Stalking Horse Agreements and Approving Certain Customary Bid Protections for Any Stalking Horse Bidder(s) in Connection With a Sale Transaction, (C) Scheduling an Auction for Sale of Assets, (D) Approving Notice of

Respective Date, Time and Place for Auction, and (E) Granting Related Relief, entered by the Bankruptcy Court on March 15, 2019 (Docket No. 145).


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1.14 “Budget” shall mean the budget established by the Debtors on the Effective Date in consultation with the DIP Lenders that establishes (i) the amounts necessary to fund

the Plan Expense Reserve Fund, (ii) the amounts necessary to fund the Senior Claims Reserve Fund, and (iii) the amounts necessary to Fund the Cure Cost Reserve Fund.

1.15 “Business Day” shall mean any day other than a Saturday, Sunday, legal holiday (as such term is defined in Bankruptcy Rule 9006), and any other day that the Bankruptcy Court is closed.

1.16 “Cash” shall mean cash and cash equivalents, including, but not limited to, wire transfers, checks and other readily marketable direct obligations of the United States of

America and certificates of deposit issued by banks.

1.17 “Chapter 5 Claim” shall mean any right of action to avoid or recover a

transfer of property of the Estates or an interest of any of the Debtors in property, including,

without limitation, actions arising under sections 506, 510, 541, 542, 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code and any other applicable federal or common law.

1.18 “Chapter 5 Claim Proceeds” shall mean the proceeds, net of any fees and expenses incurred, from the sale, liquidation, pursuit or other disposition of the Chapter 5

Claims, including the fees and expenses of the Litigation Administrator and his or her professionals.

1.19 “Chapter 11 Cases” shall mean the above-captioned Chapter 11 Cases,

jointly administered under Case No. 19-71020 (REG).

1.20 “Claim” shall mean a claim as defined in Section 101(5) of the Bankruptcy

Code, or any portion thereof.

1.21 “Class” shall mean a category of Claims or Equity Interests which are substantially similar in nature to each other, as classified pursuant to the Plan.

1.22 “Confirmation” shall mean the entry of the Confirmation Order on the docket of the Bankruptcy Court.

1.23 “Confirmation Date” shall mean the date of entry of the Confirmation Order, inter alia, confirming this Plan in accordance with the provisions of the Bankruptcy Code.

1.24 “Confirmation Order” shall mean the order of the Bankruptcy Court confirming the Plan pursuant to Section 1129 of the Bankruptcy Code, in a form reasonably

satisfactory to the Debtors.

1.25 “Creditor” shall mean any person or entity having a Claim against the Debtors, including, without limitation, a Claim that arose on, before or after the Petition

Date or a Claim against the Debtors’ estate of any kind specified in Sections 502(g), 502(h) or 502(i) of the Bankruptcy Code.


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1.26 “Cure Cost Reserve Fund” shall mean the reserve established by the Debtors on the Effective Date in accordance with Article 7.4.

1.27 “Debtors” shall mean, collectively, Décor Holdings, Inc., Décor Intermediate Holdings LLC, The Robert Allen Duralee Group, Inc., The Robert Allen

Duralee Group, LLC and the Robert Allen Duralee Group Furniture, LLC.

1.28 “Debtors-in-Possession” shall mean the Debtors in their capacity, and with the status and rights, conferred by Sections 1107 and 1108 of the Bankruptcy Code.

1.29 “Disclosure Statement” shall mean the disclosure statement respecting the Plan, as approved by the Bankruptcy Court as containing adequate information in

accordance with Section 1125 of the Bankruptcy Code, all exhibits and annexes thereto and any amendments or modifications thereof.

1.30 “Deficiency Claim” shall mean a General Unsecured Claim representing the

amount, if any, by which the Allowed amount of the Claim exceeds the value of the property owned or held by the Debtors which collateralizes the Claim subject to a valid

unavoidable security interest.

1.31 “DIP Loan Claim” shall mean a claim for all obligations arising and outstanding under the DIP Orders.

1.32 “DIP Loan Lenders” shall mean Wells Fargo Bank, National Association, as agent and co-collateral agent, and the lenders party to the Prepetition Credit Agreement.

1.33 “DIP Orders” shall mean, collectively, the interim and final orders entered by the Bankruptcy Court authorizing the Debtors to incur postpetition obligations under the Pre-Petition Credit Agreement and to enter into the Ratification Agreement.

1.34 “Disputed Claim” or “Disputed [ ] Claim” shall mean any Claim (i) as to which an objection has been interposed as of the Effective Date or any later deadline fixed

by the Bankruptcy Court and (ii) which has not been allowed or disallowed pursuant to a Final Order.

1.35 “Disputed Claim Reserve” shall mean the reserve to be established by the Debtors on the Effective Date in accordance with Article 6.4.

1.36 “Effective Date” shall mean the date that is a Business Day designated by

the Debtors in a notice filed with the Bankruptcy Court on which (a) each of the conditions set forth in Section 8.1 of the Plan have been satisfied or waived (if waivable), and (b) no

stay of the Confirmation Order is in effect.

1.37 “Entity” shall have the meaning set forth in Section 101 of the Bankruptcy Code.

1.38 “Estate Assets” shall mean all property of the Debtors’ estates of any nature whatsoever, real or personal, tangible or intangible, previously or now owned by the


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Debtors, or acquired by the Debtors’ estates, as defined in section 541 of the Bankruptcy Code.

1.39 “Equity Holder” shall mean the holder of any Equity Interests.

1.40 “Equity Interest” shall mean, with respect to the Debtors, any equity interest

therein.

1.41 “Equity Proofs of Claim” shall mean the proofs of claim filed by the Equity Holders in the Chapter 11 Cases.

1.42 “Excess Reserves” shall mean the amount outstanding in the Reserve Funds after all obligations to be paid out of the Reserve Funds have been paid or satisfied in full.

1.43 “Final Order” shall mean an order entered by the Bankruptcy Court or any other court exercising jurisdiction over the subject matter and the parties, as to which (i) no appeal, certiorari proceeding or other review, rehearing or motion for reconsideration has

been requested or is still pending, and (ii) the time for filing a notice of appeal or petition for certiorari or further review or rehearing has expired.

1.44 “General Unsecured Claim” shall mean any Claim against the Debtors, other than an Administrative Claim, Priority Tax Claim, Priority Claim, DIP Loan Claim or Secured Claim.

1.45 “Impaired” when used as an adjective preceding the words “Class of Claims” or “Class of Equity Interests,” shall mean that thelan alters the legal, equitable or

contractual rights of the member(s) of that Class or as otherwise provided in Section 1124 of the Bankruptcy Code.

1.46 “Junior Secured Loan Claim” shall mean the Allowed Claim for all obligations arising and outstanding under that certain Amended and Restated Term Note and Security Agreement, dated as of March 31, 2017 (as amended, modified or

supplemented from time to time), by and among The Robert Allen Duralee Group, Inc., as Borrower, the guarantors that are party thereto (which, as of the Petition Date, include the

remainder of the Debtors and certain other affiliates of the Debtors), the lenders party thereto from time to time, and Corber Corp., as Agent.

1.47 “Litigation Administrator” shall mean the Person or Entity designated by

the Creditors Committee within sixty (60) days of the Effective Date who shall be

responsible for pursuing Chapter 5 Claims and Other Claims (excluding any claims under

the APA) in accordance with Article 5.8 hereof.

1.48 “Other Claims” shall mean any right, claim or cause of action, belonging to the Debtors or their estates against any Person or Entity that was not previously sold or

released by the Debtors or released under this Plan including claims to recover property held by third parties, other than the Chapter 5 Claims.


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1.49 “Person” means a natural person, or any legal entity or organization including, without limitation, any corporation, partnership (general or limited), limited

liability company, business trust, unincorporated organization or association, joint stock company, trust, association, governmental body (or any agency, instrumentality or political

subdivision thereof), or any other form of legal entity.

1.50 “Petition Date” shall mean February 12, 2019, the date upon which each of the Debtors filed their petitions under Chapter 11 of the Bankruptcy Code.

1.51 “Phase I” shall mean the period of time beginning on the Effective Date and ending on the date that is the later of (i) when all Allowed Senior Claims have been paid in

full pursuant to this Plan and (ii) when the TSA has terminated.

1.52 “Phase II” shall mean the period of time beginning when Phase I ends and

continuing throughout the duration of these Chapter 11 Cases.

1.53 “Plan” shall mean this Third Amended Plan of Liquidation, all exhibits hereto and any amendments or modifications hereof.

1.54 “Plan Administrator” shall mean Timothy R. Boates or such successor designated by the Debtors as the representative of the estate for purposes of administering the Plan.

1.55 “Plan Expenses” shall mean all actual and necessary costs and expenses to be incurred after the Effective Date in connection with the administration of the Plan at the

direction of the Plan Administrator, including the reasonable fees and expenses of the Plan Administrator and any Professionals retained by the Plan Administrator.

1.56 “Plan Expense Reserve Fund” shall mean the reserve created on the Effective Date in accordance with Article 5.10, with Cash sufficient to fund the amounts necessary to wind down the Estates and close these Chapter 11 Cases.

1.57 “Post-Confirmation Debtors” shall mean the Debtors in their post-Confirmation Order status as provided for in this Plan.

1.58 “Pre-Petition Credit Agreement” shall mean the Amended and Restated Credit and Security Agreement, dated as of March 31, 2017, by and among the Debtors, the Debtors’ subsidiaries, Wells Fargo Bank National Association and PNC Bank National

Association, as amended by Amendment No. 1 to Amended and Restated Credit and

Security Agreement, dated April 13, 2018, Amendment No. 2 to Amended and Restated

Credit and Security Agreement, dated July 10, 2018, and otherwise as in effect immediately prior to the Petition Date.

1.59 “Priority Claim” shall mean any Claim against the Debtors entitled to

priority in payment under Section 507(a) of the Bankruptcy Code, other than an Administrative Claim.


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1.60 “Professional Fee Claim” shall mean a Claim for any and all fees and expenses of Professionals to the extent allowed by the Bankruptcy Court under Sections

330, 331 or 503 of the Bankruptcy Code.

1.61 “Professionals” shall mean those Persons (i) employed pursuant to an order

of the Bankruptcy Court in accordance with Sections 327, 328 and 1103 of the Bankruptcy Code and to be compensated for services rendered prior to the Effective Date, pursuant to Sections 327, 328, 329, 330 and 331 of the Bankruptcy Code, or (ii) for which compensation

and reimbursement has been allowed by the Bankruptcy Court pursuant to Section 503(b)(4) of the Bankruptcy Code.

1.62 “Pro Rata” means, as of any certain date, with respect to any Allowed Claim in any Class, the proportion that such Allowed Claim bears to the aggregate amount

of all Claims, including Disputed Claims, in such Class.

1.63 “Purchaser” shall mean RADG Holdings, LLC.

1.64 “Purchased Assets” shall mean the assets purchased by the Purchaser under

the APA.

1.65 “Ratification Agreement” shall mean that certain Ratification and Amendment, dated as of March 12, 2019, which ratifies, modifies and amends the Pre-

Petition Credit Agreement.

1.66 “Record Date” shall mean the date to be established by the Bankruptcy

Court for purposes of determining those holders of allowed claims that are entitled to vote to accept or reject the Plan.

1.67 “Released Parties” shall mean the Debtors’ former and current directors, officers, chief restructuring officer, members, shareholders, employees and agents, attorneys, financial advisors (including such attorneys’ and financial advisors’ successors or assigns,

and any direct or indirect members, managing members, owners, employees, officers, shareholders or directors), and RAS Management, (including its successors or assigns, and

any direct or indirect members, managing members, owners, employees, officers, shareholders or directors), and any court appointed Plan Administrator and Litigation Administrator of the Debtors.

1.68 “Remaining Assets” shall mean the net Estate Assets available after payment in full of the DIP Loan and funding the Reserve Funds in full.

1.69 “Reserve Funds” shall mean collectively the Cure Cost Reserve Fund, the Senior Claim Reserve Fund, and the Plan Expense Reserve Fund.

1.70 “Sale” shall mean the sale of the Purchased Assets to the Purchaser pursuant

to the APA.


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1.71 “Schedules” shall mean the Debtors’ Schedules of Assets and Liabilities filed with the Bankruptcy Court pursuant to Bankruptcy Rule 1007 as they may be amended

from time to time.

1.72 “Secured Claim” means any Claim that is secured by a valid lien, security

interest, or other interest in property in which the Debtors have an interest that has been perfected properly as required by applicable law, but only to the extent of the value of the Debtors’ interest in such property, determined in accordance with Section 506(a) of the

Bankruptcy Code.

1.73 “Senior Claims” shall mean Administrative Claims, Professional Fee

Claims, Secured Claims, Priority Tax Claims, and Other Priority Claims.

1.74 “Senior Claim Reserve Fund” shall mean the reserve created on the

Effective Date in accordance with the Budget with Cash sufficient to pay (i) Administrative

Claims, (ii) Professional Fee Claims, (iii) Priority Tax Claims and (iv) Other Priority Claims. Any Cash in such Senior Claim Reserve Fund that the Plan Administrator deems to

be excess prior to the closing of these Chapter 11 Cases shall first be available to fund any shortfall of any of the other Reserve Funds and then, once all obligations of the other

Reserve Funds are paid or satisfied in full, such excess cash shall become Excess Reserves to be distributed in accordance with Article 4.

1.75 “Senior Secured Loan Claims” shall mean the Allowed Claim for all

obligations arising and outstanding under the Pre-Petition Credit Agreement.

1.76 “TSA” shall mean the Transition Services Agreement as such term is defined

in the APA.

1.77 “Unimpaired” means any Class of Claims or Class of Interests that is not Impaired within the meaning of Section 1124 of the Bankruptcy Code.

1.78 “Voting Deadline” means the deadline established by Order of the Bankruptcy Court for receipt of Ballots voting to accept or reject the Plan.

B. Rules of Interpretation

Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include both the singular and the plural, and pronouns stated in

the masculine, feminine, or neither gender shall include the masculine, feminine, and neuter

gender. For purposes of the Plan, (a) any reference in the Plan to a contract, instrument,

release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such

form or substantially on such terms and conditions (b) any reference in the Plan to an existing document or exhibit filed or to be filed means such document or exhibit as it may have been or may be amended, modified, or supplemented and (c) unless otherwise

specified, all referenced in the Plan to Sections, Articles, Schedules and Exhibits are references to Sections, Articles, Schedules and Exhibits of or to the Plan. The words


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“herein,” “hereof,” “hereto,” “hereunder,” and other words of similar means refer to the Plan as a whole and not to any particular section, subsection or clause contained in the

Plan. A capitalized term used herein that is not defined herein shall have the meaning assigned to that term in the Bankruptcy Code or in the Exhibits hereto. The rules of

construction contained in Section 102 of the Bankruptcy Code shall apply to the construction of the Plan. The headings n the Plan are for convenience of reference only and

shall not limit or otherwise affect the provisions of the Plan. Unless otherwise indicated herein, all references to dollars means United States dollars. In computing any period of time prescribed or allowed by the Plan, unless otherwise expressly provided, the provisions

of Bankruptcy Rule 9006 shall apply.

ARTICLE 2

PROVISIONS FOR PAYMENT OF ALLOWED UNCLASSIFIED CLAIMS

2.1 In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Fee Claims, DIP Loan Claims and Priority Tax Claims

are not classified herein.

2.2 Administrative Claims.

(a) On or before 5:00 p.m., prevailing Eastern time, on the first Business

Day that is thirty days after the Effective Date, each holder of an Administrative Claim (except for Professional Fee Claims) that accrued on or after April 1, 2019, shall file with the

Bankruptcy Court and serve on counsel for the Debtors, any request for payment of an Administrative Claim. Requests for payment of an Administrative Claim must include at a

minimum: (i) the name of the holder of the Administrative Claim; (ii) the amount of the Administrative Claim; (iii) the basis of the Administrative Claim; and (iv) all supporting documentation for the Administrative Claim.

(b) Except to the extent the holder of an Allowed Administrative Claim agrees otherwise, each holder of an Allowed Administrative Claim shall be paid in respect

of such Allowed Claim out of the Senior Claim Reserve Fund (i) the full amount thereof, without interest, in Cash, as soon as practicable after the later of (a) the Effective Date, (b)

the date on which such Claim becomes an Allowed Claim, or (c) such other date as the holder of an Allowed Administrative Claim and the Debtors might otherwise agree, or (ii) such lesser amount as the holder of an Allowed Administrative Claim and the Debtors

might otherwise agree on such date as the holder of an Allowed Administrative Claim and the Debtors might otherwise agree.

2.3 Professional Fee Claims.

(a) Each Professional retained or requesting compensation in the Chapter

11 Cases, pursuant to Section 327, 328, 330, 331 or 503(b) of the Bankruptcy Code, in connection with fees incurred prior to the Effective Date, shall file an application for


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allowance of final compensation and reimbursement of expenses in the Chapter 11 Cases before the forty fifth (45th) day after the Effective Date. Objections to such applications, if

appropriate, must be filed on or before the twentieth (20th) day after the date such application is filed.

(b) The Plan Administrator shall pay, out of the Senior Claim Reserve Fund, all Professional Fee Claims as soon as practicable after a Final Order has awarded

such compensation and reimbursement of expenses. In the event any Disputed Professional Fee Claims exist on the Effective Date, the Plan Administrator shall hold and maintain Cash in an amount equal to the amount asserted in the Disputed Claims Reserve Fund until

such dispute is resolved consensually or by order of the Bankruptcy Court.

2.4 The DIP Loan Claim. The DIP Loan Lenders will receive one or more

distributions of Cash, out of the Estate Assets, equal to the Allowed amount of the DIP Loan Claim as soon as practicable following the (a) the Effective Date, or (b) the date on

which collateral securing the DIP Loan Claim is liquidated or reduced to Cash.

2.5 Priority Tax Claims. On the Effective Date, or as soon thereafter as is reasonably practical, in full and final satisfaction of such Allowed Priority Tax Claim, each

holder of an Allowed Priority Tax Claim shall be paid out of the Senior Claim Reserve Fund (a) an amount in Cash equal to the Allowed amount of such Priority Tax Claim, or

(b) such other treatment as to which the Debtors and the holder of such Allowed Priority Tax Claim shall have agreed upon in writing.

ARTICLE 3

CLASSIFICATION OF CLAIMS AND INTERESTS

3.1 The following table classifies Claims against and Equity Interests in the Debtors for all purposes, including voting, confirmation and Distribution pursuant to

sections 1122 and 1123(a)(1) of the Bankruptcy Code. The Plan deems a Claim or Equity Interest to be classified in a particular Class only to the extent that the Claim or Equity

Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Equity Interest qualifies

within the description of such different Class. A Claim or Equity Interest is in a particular Class only to the extent that any such Claim or Equity Interest is Allowed in that Class and has not been paid or otherwise settled prior to the Effective Date.


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Class Claim Status Voting Rights

1 Senior Secured Loan Claims Impaired Entitled to Vote

2 Junior Secured Loan Claims Impaired Entitled to Vote

3 Other Secured Claims Impaired Entitled to Vote

4 Other Priority Claims Unimpaired Deemed to Accept

5 General Unsecured Claims Impaired Entitled to Vote

6 Intercompany Claims Impaired

and No Distribution

Deemed to Reject

7 Equity Interests Impaired and No

Distribution

Deemed to Reject

ARTICLE 4

TREATMENT OF CLAIMS AND EQUITY INTERESTS

4.1 The treatment of and consideration to be received by holders of Allowed

Claims and Equity Interests pursuant to this Article IV of the Plan shall be in full and complete satisfaction, settlement, release and discharge of such Claims and Equity Interests,

but shall not impact the ability of the holder of such claim or interest to assert such claim or interest against any non-Debtor.

4.2 Treatment of Class 1 Claims – Senior Secured Loan Claims.

(a) On the Effective Date, or as soon thereafter as is reasonably practicable, the Holders of the Senior Secured Loan Claims shall receive out of the

Remaining Assets (i) the net proceeds, if any, from the Sale or other disposition of the Assets which secure such claims, or (ii) such other, less favorable treatment as my be agreed

to in writing by the Holders of the Senior Secured Loan Claims and the Plan Administrator. Any deficiency claim which may arise on account of the lack of collateral or otherwise

resulting from the aforesaid treatment shall be treated as a Class 5 General Unsecured

Claim.

(b) In addition, the Holders of the Senior Secured Loan Claims shall

receive all funds available as Excess Reserves after all obligations to be paid out of the Reserve Funds have been paid or satisfied in full.


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(c) Class 1 Claims are impaired and holders of Class 1 Claims are entitled to vote to accept or reject the Plan.

4.3 Treatment of Class 2 Claims – Junior Secured Loan Claims.

(a) On the Effective Date, or as soon thereafter as is reasonably

practicable, the holders of the Junior Secured Loan Claims shall receive out of the Remaining Assets (i) the net proceeds, if any, from the Sale or other disposition of the

Estate Assets which secure such Claims, after payment, in full, of any other claims that hold a security interest in the Estate Assets that is senior to the Junior Secured Loan Claims’ interests; or (ii) such other, less favorable treatment as my be agreed to in writing by the

holders of the Junior Secured Loan Claims and the Plan Administrator. Any Deficiency Claim which may arise on account of the lack of collateral or otherwise resulting from the

aforesaid treatment shall be treated as a Class 5 General Unsecured Claim.

(b) Class 2 Claims are impaired and holders of Class 2 Claims are entitled

to vote to accept or reject the Plan.

4.4 Treatment of Class 3 Claims – Other Secured Claims.

(a) On the Effective Date, or as soon thereafter as is reasonably

practicable, the holders of Other Secured Claims shall receive out of the Remaining Assets (i) the net proceeds, if any, from the Sale or other disposition of the Estate Assets which

secure such claims, after payment, in full, of any other claims that hold a security interest in the Estate Assets that is senior to the Other Secured Claims’ interest; or (ii) such other, less

favorable treatment as my be agreed to in writing by the holders of the Junior Secured Loan Claims and the Plan Administrator. Any Deficiency Claim which may arise on account of the lack of collateral or otherwise resulting from the aforesaid treatment shall be treated as a

Class 5 General Unsecured Claim.


to vote to accept or reject the Plan.

4.5 Treatment of Class 4 Claims – Priority Claims.

(a) On the Effective Date, or as soon thereafter as is reasonably practicable, each holder of an Allowed Other Priority Claim will receive in full and final satisfaction of such Allowed Other Priority Claim, except to the extent that such holder

agrees to a less favorable treatment, payment in full in Cash out of the Senior Claims

Reserve Fund or other treatment rendering such Claim Unimpaired.

(b) Class 4 Claims are unimpaired and are conclusively presumed to have accepted the Plan under section 1126(f) of the Bankruptcy Code. Holders of Class 4 Claims

are not entitled to vote to accept or reject the Plan.

4.6 Treatment of Class 5 Claims - General Unsecured Claims.


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(a) Each holder of an Allowed Class 5 Claim shall receive in respect of such Claim its Pro Rata distribution of Cash out of the Remaining Assets after the payment

in full of Class 1 through Class 3 Claims.


to vote to accept or reject the Plan

4.7 Treatment of Class 6 Claims – Intercompany Claims.

(a) In connection with, and as a result of, order approving the substantive consolidation of the Debtors' Estates and the Chapter 11 Cases, all Intercompany Claims have been be eliminated and the holders of Intercompany Claims shall not be entitled to,

and shall not receive or retain, any property or interest in property on account of such Claims.

(b) Class 6 Claims are Impaired and are conclusively presumed to have rejected the Plan under section 1126(f) of the Bankruptcy Code. Holders of Class 6 Claims

are not entitled to vote to accept or reject the Plan.

4.8 Treatment of Class 7 Equity Interests.

(a) Holders of Equity Interests will neither receive any Distribution nor

retain any property under the Plan. All equity interest/shares of stock in the Debtors shall be deemed canceled upon the Effective Date.

(b) Class 7 Equity Interests are Impaired and are conclusively presumed to have rejected the Plan under section 1126(f) of the Bankruptcy Code. Holders of Class 7

Equity Interests are not entitled to vote to accept or reject the Plan.

4.9 Distribution of Chapter 5 Claim Proceeds and Proceeds from Other Claims

The proceeds, net of any fees and expenses, arising out of the prosecution by

the Litigation Administrator of Chapter 5 Claims shall be distributed as follows: (1) First to cover any shortfall in any of the Reserve Funds, (2) then, a sharing between the Holders of

Class 5 Claims and the Holders of Senior Secured Claims (if they have not been paid in full) in a priority order and percentage as follows:

(a) any Chapter 5 Claim proceeds pursuant to 11 U.S.C. §§ 549 and 550 shall be distributed as follows: (x) the first $150,000 to the DIP lenders under Class 1 of the Chapter 11 Plan, and thereafter (y) 70% to General Unsecured Creditors under Class 5 of

the Chapter 11 Plan and (z) 30% to DIP Lenders under Class 1 of the Chapter 11 Plan;

(b) any Chapter 5 Claim proceeds pursuant to Chapter 5 of the

Bankruptcy Code (other than 11 U.S.C. §§ 549) shall be distributed as follows: (x) the first $700,000 to the General Unsecured Creditors under Class 5 of the Chapter 11 Plan, and

thereafter (y) 70% to General Unsecured Creditors under Class 5 of the Chapter 11 Plan and (z) 30% to DIP Lenders under Class 1 of the Chapter 11 Plan, provided, however, that


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Holders of Senior Secured Claims shall not participate in such distribution on account of any Class 5 deficiency claims they may hold.

The proceeds, net of any fees and expenses, arising out of the prosecution by the Litigation Administrator of Other Claims (excluding any claims under the APA and

any claims of any nature or description that could be asserted against Wells Fargo Bank National Association or PNC Bank National Association, jointly or severally, and or

against the Collateral) shall be distributed as follows: (1) First to cover any shortfall in any of the Reserve Funds, (2) then, 100% of such proceeds to Holders of Class 5 Claims; provided, however, that Holders of Senior Secured Claims shall not participate in such

distribution on account of any Class 5 deficiency claims they may hold.

ARTICLE 5

MEANS FOR IMPLEMENTATION OF THE PLAN

5.1 Substantive Consolidation. As a result of the entry of the order of the Bankruptcy Court approving the substantive consolidation of these Chapter 11 Cases, (i) all

Intercompany Claims among the Debtors have been be eliminated, (ii) any obligation of a Debtor and any guarantee thereof by any other Debtor is deemed to be one obligation, and any such guarantee is eliminated, (iii) each Claim filed or to be filed against more than one

Debtor shall be deemed filed only against one consolidated Debtor and shall be deemed a single Claim against and a single obligation of the Debtors, and (vi) any joint or several

liability of the Debtors are deemed one obligation of the Debtors. Because of the consolidation of the assets and liabilities of the Debtors, all Claims based upon guarantees

of collection, payment or performance made by one Debtor as to the obligations of another Debtor shall be released and of no further force and effect.

5.2 Sale Approval. The Post-Confirmation Debtors shall consummate the Sale of

the Purchased Assets to the Purchaser, as selected at the Auction conducted pursuant to the Bid Procedures and Bid Procedures Order. As a part of the Sale under the Plan, and in order

to ensure consummation of the Plan, the Confirmation Order shall contain the following findings of fact and conclusions of law: (a) that the terms and conditions of the Sale and the

APA are fair and reasonable, (b) that the Debtors’ sale, and the Purchaser’s purchase, of the Purchased Assets pursuant to the Plan, is non-collusive, fair and reasonable and was conducted openly and in good faith, (c) that the transfer of the Purchased Assets to the

Purchaser represents an arm’s-length transaction and was negotiated in good faith between the parties, (d) that the Purchaser, as transferee of the Purchased Assets, is a good faith

purchaser under Bankruptcy Code § 363(m) and, as such, is entitled to the full protection of Bankruptcy Code § 363(m) and, as such, is entitled to the full protection of Bankruptcy

Code § 363(m), (e) that the Purchased Assets are sold free and clear of all claims, interests, and encumbrances pursuant to Bankruptcy Code § 1141 (c), (f) that the Sale was not

controlled by an agreement among potential purchasers, (g) that no cause of action exists against the Purchaser or with respect to the Sale of the Purchased Assets to the Purchaser


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under § 363(n), and (h) that any claims under § 363(n) or any other claims as against the Purchaser are released, waived and discharged.

5.3 Stamp Tax. Under the Plan, pursuant to Bankruptcy Code § 1146(c), (a) the issuance, transfer or exchange of any securities, instruments or documents, (b) the creation

of any other Lien, mortgage, deed of trust or other security interest, (c) the making or assignment of any lease or sublease or the making or delivery of any deed or other

instrument of transfer under, pursuant to, in furtherance of, or in connection with, the Plan, including, without limitation, any deeds, bills of sale or assignments executed in connection with the purchase of the Purchased Assets by the Purchaser and any other transaction

contemplated under the Plan or the re-vesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated in the Plan,

and (d) the issuance, renewal, modification or securing of indebtedness by such means, and the making, delivery or recording of any deed or other instrument of transfer under, in

furtherance of, or in connection with, the Plan, including, without limitation, the Confirmation Order, shall not be subject to any applicable document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, or other

similar tax or governmental assessment.

5.4 Plan Administrator. On the Effective Date and automatically and without

further action, the Plan Administrator shall be deemed the sole shareholder, officer and director of the Post-Confirmation Debtors. The Plan will be administered by the Plan

Administrator and all actions taken thereunder in the name of the Post-Confirmation Debtors shall be taken through the Plan Administrator. Without the need for further Bankruptcy Court approval, the initial Plan Administrator shall be entitled to compensation

and reimbursement for his or her actual and necessary expenses incurred in connection with the performance of his duties in accordance with retention order previously approved by the

Bankruptcy Court. The Plan Administrator shall not be liable for any action he or she takes or omits to take that he or she believes in good faith to be authorized or within his or her

rights or powers. All distributions to be made to Creditors (other than Class 5 Creditors) under the Plan shall be made by the Plan Administrator, who shall deposit and hold all Cash in trust for the benefit of Creditors (including Professionals) receiving distributions

under the Plan. The duties and powers of the Plan Administrator shall include the following:

(a) To exercise all power and authority that may be exercised, commence all proceedings (except with respect to Chapter 5 Claims and Other Claims) (including the

power to continue any actions and proceedings that may have been commenced by the Debtors prior to the Effective Date) that may be commenced and take all actions that may be taken by any officer, director or shareholder of the Post-Confirmation Debtors with like

effect as if authorized, exercised and taken by unanimous action of such officers, directors and shareholders, including consummating the Plan and all transfers thereunder on behalf

of the Post-Confirmation Debtors;

(b) To consummate the Sale of the Purchased Assets pursuant to this Plan

and the Confirmation Order;


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(c) To prepare and file Federal and State tax returns for the Debtors and to pursue any rights and refunds arising thereunder during Phase I;

(d) To maintain all accounts, make distributions and take all other actions consistent with the Plan, including the maintenance of appropriate reserves, in the name of

the Debtors or Post-Confirmation Debtors during Phase I;

(e) When appropriate, to take all steps necessary to terminate the

corporate existence of the Debtors during Phase I;

(f) To prosecute objections to Claims and compromise or settle any Claims (Disputed Claims or otherwise) during Phase I;

(g) To retain and/or engage Professionals or other Persons selected to

assist the Plan Administrator in connection with the above duties, including any

professionals retained in the Chapter 11 Case, and to pay all fees and expenses incurred by such Professionals consistent with Article 5.9 of this Plan; and

(h) To take all other actions not inconsistent with the provisions of the Plan which the Plan Administrator deems reasonably necessary or desirable in connection with the administration of the Plan during Phase I.

5.5 Litigation Administrator. On the Effective Date the Litigation Administrator will be vested with the sole authority with respect to the commencement, prosecution, and

settlement of Chapter 5 Claims and Other Claims. The Litigation Administrator shall be entitled to compensation and reimbursement for his or her actual and necessary expenses

incurred in connection with the performance of his duties but such fees and expenses shall only be paid out of the Remaining Assets after all Senior Claims have been paid in full. The Litigation Administrator shall not be liable for any action he or she takes or omits to take

that he or she believes in good faith to be authorized or within his or her rights or powers. All distributions to be made to Class 5 Creditors under the Plan shall be made by the

Litigation Administrator. The duties and powers of the Litigation Administrator shall include the following:

(a) To commence all proceedings (including the power to continue any actions and proceedings that may have been commenced by the Debtors prior to the Effective Date) that may be commenced and take all actions that may be necessary to

pursue Chapter 5 Claims and Other Claims;

(b) To prepare and file Federal and State tax returns for the Debtors and

to pursue any rights and refunds arising thereunder during Phase II; provided, however, that any proceeds shall become Estate Assets;

(c) To maintain all accounts, make distributions and take all other actions consistent with the Plan, including the maintenance of appropriate reserves, in the name of the Debtors or Post-Confirmation Debtors during Phase II;


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(d) When appropriate, to take all steps necessary to terminate the corporate existence of the Debtors during Phase II;

(e) To prosecute objections to Class 5 Claims and compromise or settle any Class 5 Claims (Disputed Claims or otherwise);

(f) To retain and/or engage Professionals or other Persons selected to assist the Litigation Administrator in connection with the above duties, including any

professionals retained in the Chapter 11 Case, and to pay all fees and expenses incurred by such Professionals; provided, however, that such fees and expenses shall only be paid out of the Remaining Assets after all Senior Claims have been paid in full.

(g) To take all other actions not inconsistent with the provisions of the Plan which the Litigation Administrator deems reasonably necessary or desirable in

connection with the administration of the Plan during Phase II.

5.6 Resignation, Death or Removal. The Plan Administrator may be removed by

the Bankruptcy Court, upon application for good cause shown. In the event of the resignation or removal, death or incapacity of the Plan Administrator, the Bankruptcy Court, upon application of the Debtors’ counsel, shall designate another Person to become

Plan Administrator, and thereupon the successor Plan Administrator, without any further act, shall become fully vested with all of the rights, powers, duties and obligations of his or

her predecessor.

5.7 Winding Up Affairs. Following the Confirmation Date, the Post-

Confirmation Debtors shall not engage in any business activities or take any actions, except those necessary to effectuate the Plan and wind up the affairs of the Debtors. On and after the Effective Date, the Plan Administrator may, in the name of the Post-Confirmation

Debtors, take such actions without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, other than any

restrictions expressly imposed by the Plan or the Confirmation Order. Without limiting the foregoing, the Plan Administrator may, without application to or approval of the

Bankruptcy Court, pay the charges that the Post-Confirmation Debtors incur after the Effective Date for Professional fees and expenses related to the winding up of the Debtors’ affairs and administration and implementation of the Plan. The Post-Confirmation Debtors

shall indemnify and hold the Plan Administrator harmless from and against any and all claims, actions, investigations or liabilities incurred in the performance of his or her duties

under this Plan other than as a result of the Plan Administrator’s willful misconduct, gross negligence, or malfeasance.

5.8 Release of Liens. Except as otherwise provided in the Plan or in any contract, instrument or other agreement or document created in connection with the Plan, on the Effective Date, all mortgages, deeds of trust, liens or other security interests against the

property of the Debtors’ estate shall be released, and all the right, title and interest of any holder of such mortgages, deeds of trust, liens or other security interests shall revert to the

Post-Confirmation Debtor and its successors and assigns.


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5.9 Rights of Action. Pursuant to Section 1123(b)(3)(B) of the Bankruptcy Code, on the Effective Date, any right, claim or cause of action, belonging to the Debtors or their

estates against any Person or Entity, including without limitation, Chapter 5 Claims and Other Claims that was not previously released by the Debtors or released under this Plan

shall be retained by the Post-Confirmation Debtors, to the extent not previously adjudicated, assigned and/or released or released under this Plan. The Litigation

Administrator with respect to Chapter 5 Claims and Other Claims and the Plan Administrator with respect to Other Claims under the APA, if any, belonging to the Debtors or their estates against any Person or Entity, shall (i) pursue, settle or release all retained

rights of action, as appropriate, in accordance with the best interests of and for the benefit of the Creditors entitled to receive distributions under the Plan and (ii) be entitled to settle any

such rights of action without further order of the Bankruptcy Court, but shall be entitled to seek such authorization in his or her discretion.

5.10 Post-Effective Date Professional Fees and Expenses. Professionals that perform post-Effective Date services for the Plan Administrator shall provide monthly invoices to the Plan Administrator and counsel to the Debtors describing the services

rendered, and the fees and expenses incurred in connection therewith, on or before the 20th day following the end of the calendar month during which such services were performed.

Professionals who timely tender such invoices shall be paid by the Plan Administrator for such services from the Plan Expense Reserve Fund not less than fifteen (15) days after the

submission of said monthly invoices, unless, within said fifteen (15) day period, a written objection to such payment is made by the Plan Administrator or counsel to the Debtors. To the extent a written objection to a Professional’s monthly invoice cannot be resolved by the

parties, payment of such invoice, shall be made only upon Final Order of the Bankruptcy Court.

5.11 Plan Expense Reserve Fund. Prior to making any distributions, the Plan Administrator shall set aside and reserve in the Plan Expense Reserve Fund an amount of

Cash equal to the estimated amount of Plan Expenses in accordance with the Budget. Any Cash in such Plan Expense Reserve Fund that the Plan Administrator deems to be excess prior to the closing of these Chapter 11 Cases shall first be available to fund any shortfall of

any of the other Reserve Funds and then, once all obligations of the other Reserve Funds are paid or satisfied in full, such excess cash shall become Excess Reserves to be distributed

pursuant to Article 4 of the Plan.

5.12 Cramdown Under Section 1129(b) of the Bankruptcy Code. If all applicable

requirements for confirmation of this Plan are met as set forth in section 1129(a) of the Bankruptcy Code except an impaired Class of Claims has voted to reject the Plan, the Debtors will request that the Bankruptcy Court confirm this Plan in accordance with section

1129(b) of the Bankruptcy Code on the bases that this Plan is fair and equitable and does not discriminate unfairly with respect to each Class of Claims or Interests that is Impaired

under, and has not accepted or is deemed to reject, this Plan.


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ARTICLE 6

RESOLUTION OF CLAIMS AND DISTRIBUTIONS

6.1 Objections to Claims.

(a) Except as provided herein, objections to Claims shall be filed with the Bankruptcy Court and served upon Creditors no later than ninety (90) days after the

Effective Date, provided, however, that this deadline may be extended by the Bankruptcy Court upon motion of the Plan Administrator or Litigation Administrator, without notice or

a hearing. Notwithstanding the foregoing, unless an order of the Bankruptcy Court specifically provides for a later date, any proof of claim filed after the applicable Bar Date

shall be automatically disallowed as a late filed claim, without any action by the Post-

Confirmation Debtors, unless and until the party filing such Claim obtains the written consent of the Post-Confirmation Debtors to file such Claim late or obtains an order of the

Bankruptcy Court upon notice to the Post-Confirmation Debtors that permits the late filing of the Claim, in which event, the Post-Confirmation Debtors shall have sixty (60) days from

the later of (i) the date of such written consent or order; or (ii) the date the Claim is filed to object to such Claim, which deadline may be extended by the Bankruptcy Court upon motion of the Post-Confirmation Debtor, without notice or a hearing.

(b) Subject to Bankruptcy Court approval, objections to Claims may be litigated to judgment, settled or withdrawn by the Plan Administrator and by the Litigation

Administrator (only with respect to Class 5 Claims).

(c) Distributions with respect to and on account of Claims to which

objections have been filed will be made as soon as practicable after an order, judgment, decree or settlement agreement with respect to such Claim becomes a Final Order provided that the applicable Creditor shall not receive interest on its Allowed Claim, despite anything

contained herein to the contrary, from the date the objection is filed and served to the date of allowance of such Claim.

6.2 Record Date. As of the close of business on the Record Date, the various transfer and claims registers for each of the Classes of Claims as maintained by the Debtors

or their respective agents shall be deemed closed, and there shall be no further changes in the record holders of any of the Claims. The Debtors, the Plan Administrator, the Litigation Administrator and the Post-Confirmation Debtors shall have no obligation to

recognize any transfer of the Claims occurring after the close of business on the Record Date. The Debtors, the Plan Administrator and the Litigation Administrator shall be

entitled to recognize and deal hereunder only with those record holders stated on the transfer ledgers as of the close of business on the Record Date, to the extent applicable.

6.3 Manner of Payment Under the Plan. Unless the Person receiving a payment agrees otherwise, any payment in Cash to be made by the Plan Administrator, the Litigation

Administrator or the Post-Confirmation Debtors shall be made, at the election of the Plan


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Administrator the Litigation Administrator or the Post-Confirmation Debtors (as the case may be), by check drawn on a domestic bank or a wire transfer from a domestic bank.

6.4 Disputed Claim Reserves. During Phase I, the Plan Administrator shall establish and maintain reserves for all Disputed Claims and during Phase II such Disputed

Claims Reserve shall be maintained by the Litigation Administrator. For purposes of establishing a reserve, Cash will be set aside equal to the amount that would have been

distributed to the holders of Disputed Claims had their Disputed Claims been deemed Allowed Claims on the Effective Date or such other amount as may be approved by the Bankruptcy Court upon motion of the Plan Administrator or the Litigation Administrator.

If, when, and to the extent any such Disputed Claim becomes an Allowed Claim by agreement of the parties or by Final Order, the relevant portion of the Cash held in reserve

therefor shall be distributed by the Plan Administrator or Litigation Administrator, as applicable, to the Creditor. The balance of such Cash, if any remaining after all Disputed

Claims have been resolved, shall be distributed Pro Rata to all holders of Claims in accordance with Article 4 of the Plan. No payments or distributions shall be made with respect to a Claim that is a Disputed Claim pending the resolution of the dispute by Final

Order or stipulation of the parties.

6.5 Unclaimed Property. If any distribution remains unclaimed for a period of

ninety (90) days after it has been delivered (or attempted to be delivered) in accordance with the Plan to the holder entitled thereto, such unclaimed property shall be deemed forfeited by

such holder, whereupon all right, title and interest in and to the unclaimed property as well as any further distribution to such Creditor shall be forfeited by the Creditor and held by the Plan Administrator or the Litigation Administrator, as applicable, to be distributed to other

Creditors in accordance with this Plan.

6.6 Withholding Taxes. Any federal, state, or local withholding taxes or other

amounts required to be withheld under applicable law shall be deducted from distributions hereunder. All Persons holding Claims shall be required to provide any information

necessary to effect the withholding of such taxes.

6.7 Fractional Cents. Any other provision of this Plan to the contrary notwithstanding, no payment of fractions of cents will be made. Whenever any payment of

a fraction of a cent would otherwise be called for, the actual payment shall reflect a rounding down of such fraction to the nearest whole cent.

6.8 Payments of Less than Twenty Dollars. If a Cash payment otherwise provided for by this Plan with respect to an Allowed Claim would be less than twenty

($20.00) dollars, notwithstanding any contrary provision of this Plan, the Plan Administrator or the Litigation Administrator, as applicable, shall not be required to make such payment. If such Cash payment is on account of an interim distribution, then such

amount shall be held in the Disputed Claims Reserve until such time as the aggregate amount of Cash payments with respect to such Allowed Claim exceeds twenty ($20.00)

dollars. If the aggregate Cash payments with respect to an Allowed Claim is less than twenty ($20.00) dollars, the affected Creditor’s Claim shall be deemed disallowed solely for


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distribution purposes, and such funds shall be otherwise distributed to holders of other Allowed Claims in accordance with Article 4 of the Plan.

6.9 Setoffs. Except as otherwise provided for herein, the Plan Administrator and the Litigation Administrator may, but shall not be required to, set off against any Claim and

the payments to be made pursuant to this Plan in respect of such Claim, Claims of any nature whatsoever that the Debtors or their estate may have against the Creditor, but neither

the failure to do so nor the allowance of a Claim hereunder shall constitute a waiver or release by the Debtors or their estate of any Claim it may have against the Creditor.

ARTICLE 7

UNEXPIRED LEASES AND EXECUTORY CONTRACTS

7.1 Subject to the occurrence of the Effective Date, entry of the Confirmation Order shall constitute approval, pursuant to sections 365(a) and 1123(b)(2) of the

Bankruptcy Code, of (i) the assumption of the leases and executory contracts listed on the Assumption Notice and (ii) the assignment of such leases and executory contracts to the

Purchaser.

7.2 Subject to the occurrence of the Effective Date, entry of the Confirmation Order shall constitute approval, pursuant to sections 365(a) and 1123(b)(2) of the

Bankruptcy Code, of the assumption by the Post-Confirmation Debtors of all of the Debtors’ insurance policies, including, without limitation the Chubb D & O Insurance

Policy.

7.3 Any and all leases or executory contracts not listed on the Assumption Notice

and not previously rejected by the Debtors, shall be deemed rejected by the Debtors on the Confirmation Date.

7.4 All proofs of claim with respect to claims arising from the rejection of

executory contracts or leases shall, unless another order of the Bankruptcy Court provides for an earlier date, be filed with the Bankruptcy Court within thirty (30) days after the entry

of the Confirmation Order. Any proof of claim that is not timely filed shall be released, discharged and forever barred from assertion against the Debtors, their estate or property, or

the Post-Confirmation Debtor.

7.5 If (i) at the time the Confirmation Order is entered there is a dispute regarding the appropriate cure amount for any executory contract or unexpired lease and (ii) the APA

does not require the Purchaser to pay all cure amounts, then Cash equal to the amount of all cure Claims in dispute shall be held in the Cure Claim Reserve Fund for the benefit of the

applicable counterparties. If, when, and to the extent any such cure Claim becomes an Allowed Claim by agreement of the parties or by Final Order, the relevant portion of the

Cash held in reserve therefor shall be distributed by the Plan Administrator to the applicable counterparty. The balance of such Cash, if any remaining after all disputed cure Claims


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have been resolved, shall be available to cover any shortfall in the other Reserve Funds. Once all obligations of the other Reserve Funds have been paid or satisfied in full, any

remaining Cash in the Cure Claim Reserve Fund shall become Excess Reserves to be distributed in accordance with Article 4 of the Plan.

ARTICLE 8

CONDITIONS PRECEDENT TO EFFECTIVENESS OF THE PLAN

8.1 Conditions to Consummation. The Plan shall not become effective unless

and until each of the following conditions has been satisfied:

(a) The Bankruptcy Court shall have entered the Confirmation Order; and

(b) The Confirmation Order shall have become a Final Order; and

(c) There are sufficient liquid assets to make the requisite distributions in full to holders of Administrative Claims, Priority Tax Claims and Priority Other Claims and

fund the Plan Expense Reserve Fund.

8.2 Waiver of Conditions. The Debtors, in their sole discretion, may at any time,

without notice or authorization of the Bankruptcy Court, waive the condition set forth in Section 8.1(b) above, by a writing signed by an authorized representative of the Debtors. The Debtors reserve the right to assert that any appeal from the Confirmation Order shall be

moot after consummation of the Plan.

ARTICLE 9

EFFECT OF CONFIRMATION

9.1 Vesting of Assets. Upon the Effective Date, pursuant to section 1141(b) and (c) of the Bankruptcy Code, all Estate Assets shall vest in the Post-Confirmation Debtors

free and clear of all Claims, liens, encumbrances, charges and other interests, except as provided in the Plan. From and after the Effective Date, the Post-Confirmation Debtors

may use, acquire and dispose of property free of any restrictions of the Bankruptcy Code or

the Bankruptcy Rules and in all respects as if there were no pending case under any chapter or provision of the Bankruptcy Code.

9.2 Binding Effect. Subject to the occurrence of the Effective Date, on and after the Confirmation Date, the provisions of the Plan shall bind the Debtors, the Post-

Confirmation Debtors and any holder of a Claim against, or Equity Interest in, the Debtors and such holder’s respective successors and assigns, whether or not the Claim or Equity

Interest of such holder is Impaired under the Plan and whether or not such holder has accepted the Plan.


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9.3 Preservation of Rights of Action by the Debtors and Post-Confirmation Debtors. Except as provided in the Plan or in any contract, instrument, release or other

agreement entered into or delivered in connection with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code and to the fullest extent possible under applicable law, the

Post-Confirmation Debtors shall retain and may enforce, in conjunction with the Plan Administrator (and the Litigation Administrator with respect to Chapter 5 Claims and

Other Claims) any claims, demands, rights and causes of action that the Debtors or their estates holds or may hold against any Entity or Person, including any recovery actions and any currently pending actions other than as previously released or released under this Plan.

The Post-Confirmation Debtors or their successors may pursue such retained claims, demands, rights or causes of action, as appropriate, in accordance with the best interests of

the Post-Confirmation Debtors or their successors holding such claims demands, rights or causes of action. Further, to the extent retained under the APA, the Post-Confirmation

Debtors retain their right to file and pursue any adversary proceedings against any creditor or vendor related to debit balances or deposits owed to any Debtors.

ARTICLE 10

RETENTION OF JURISDICTION

10.1 Following the Confirmation Date and until such time as all payments and distributions required to be made and all other obligations required to be performed under

this Plan have been made and performed, the Bankruptcy Court shall retain jurisdiction as is legally permissible, including, without limitation, for the following purposes:

(a) Claims. To determine the allowability, classification or priority of Claims against the Debtors upon objection by the Plan Administrator, the Litigation Administrator or any other party in interest.

(b) Injunctions, etc. To issue injunctions or take such other actions or make such other orders as may be necessary or appropriate to restrain interference with the

Plan or its execution or implementation by any Person, to construe and to take any other action to enforce and execute the Plan, the Confirmation Order, or any other order of the

Bankruptcy Court, to issue such orders as may be necessary for the implementation, execution, performance and consummation of the Plan and all matters referred to herein, and to determine all matters that may be pending before the Bankruptcy Court in the

Chapter 11 Cases on or before the Effective Date with respect to any Entity.

(c) Professional Fees. To determine any and all applications for

allowance of compensation and expense reimbursement of Professionals for periods before the Effective Date, as provided for in the Plan.

(d) Adversary Proceedings. To adjudicate any and all adversary proceedings, applications and contested matters that may be commenced or maintained

pursuant to the Bankruptcy Code or this Plan.


-24-

(e) Dispute Resolution. To resolve any dispute arising under or related to (i) the implementation, execution, consummation or interpretation of the Plan and the

making of distributions thereunder, including, without limitation, any dispute concerning payment of professional fees and expenses of the Plan Administrator and the Litigation

Administrator and (ii) the APA, TSA or the Sale.

(f) Leases and Executory Contracts. To determine any and all motions

for the rejection, assumption or assignment of executory contracts or unexpired leases, and to determine the allowance of any Claims resulting from the rejection of executory contracts and unexpired leases.

(g) Actions. To determine all applications, motions, adversary proceedings, contested matters, actions, and any other litigated matters instituted prior to

the closing of the Chapter 11 Cases, including any remands.

(h) General Matters. To determine such other matters, and for such other

purposes, as may be provided in the Confirmation Order or as may be authorized under provisions of the Bankruptcy Code.

(i) Plan Modification. To modify the Plan under Section 1127 of the

Bankruptcy Code, remedy any defect, cure any omission, or reconcile any inconsistency in the Plan or the Confirmation Order so as to carry out its intent and purposes.

(j) Aid Consummation. To issue such orders in aid of consummation of the Plan and the Confirmation Order notwithstanding any otherwise applicable non-

bankruptcy law, with respect to any Entity, to the full extent authorized by the Bankruptcy Code.

(k) Implementation of Confirmation Order. To enter and implement such

orders as may be appropriate in the event the Confirmation Order is for any reason stayed, revoked, modified or vacated.

(l) Final Order. To enter a Final Order closing the Chapter 11 Case.

ARTICLE 11

MISCELLANEOUS PROVISIONS

11.1 Pre-Confirmation Modification. The Plan may be altered, amended or modified before the Confirmation Date as provided in Section 1127 of the Bankruptcy Code.

11.2 Post-Confirmation Immaterial Modification. The Debtors, or following the Effective Date, the Plan Administrator, may, subject to approval of the Bankruptcy Court

without notice to holders of Claims and Equity Interests, insofar as it does not materially and adversely affect the interest of holders of Claims, alter, amend or modify the Plan in


-25-

such a manner and to such extent as may be necessary to expedite consummation of this Plan.

11.3 Post-Confirmation Material Modification. The Plan may be altered or amended after the Confirmation Date by the Plan Administrator in a manner which, in the

opinion of the Bankruptcy Court, materially and adversely affects holders of Claims, provided that such alteration or modification is made after a hearing as provided in Section

1127 of the Bankruptcy Code.

11.4 Withdrawal or Revocation of the Plan. The Debtors reserve the right to revoke or withdraw the Plan prior to the Effective Date. If the Debtors revoke or withdraw

the Plan, then the result shall be the same as if the Confirmation Order had not been entered.

11.5 Successors and Assigns. The rights, benefits and obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of, the

heirs, executors, administrators, successors and/or assigns of such Entities.

11.6 Exculpation. Except as otherwise provided by the Plan or the Confirmation Order, on the Effective Date to the extent permitted by applicable law, the Released Parties

shall be deemed released by each of them against the other, and by all holders of Claims or Equity Interests, of and from any claims, obligations, rights, causes of action and liabilities

for any act or omission in connection with, or arising out of, the Chapter 11 Case, including, without limiting the generality of the foregoing, all retentions, motions and

applications, sales of assets, the Disclosure Statement, the pursuit of approval of the Disclosure Statement, the pursuit of confirmation of the Plan, the consummation of the Plan or the administration of the Plan or the property to be distributed under the Plan

provided, however, no such parties shall be discharged from obligations under the Plan or of any claim or cause of action arising from or related to acts or omissions which constitute

willful misconduct, gross negligence, fraud or criminal conduct under the laws of the United States or any state or local authority. All such Persons, in all respects, shall be entitled to

rely upon the advice of counsel with respect to their duties and responsibilities under the Plan and under the Bankruptcy Code.

11.7 RELEASES BY THE DEBTORS AND THEIR ESTATES.

NOTWITHSTANDING ANYTHING CONTAINED IN THE PLAN TO THE CONTRARY, AS OF THE EFFECTIVE DATE, FOR THE GOOD AND VALUABLE

CONSIDERATION PROVIDED BY EACH OF THE DEBTORS, EACH OF THE DEBTORS AND THEIR CURRENT AND FORMER AFFILIATES AND

REPRESENTATIVES AND THE ESTATES SHALL BE DEEMED TO HAVE PROVIDED A FULL, COMPLETE, UNCONDITIONAL AND IRREVOCABLE RELEASE TO THE RELEASED PARTIES AND EACH SUCH RELEASED PARTY

SO RELEASED SHALL BE DEEMED RELEASED BY THE DEBTORS AND THEIR CURRENT AND FORMER AFFILIATES AND REPRESENTATIVES AND THE

ESTATES FROM ANY AND ALL CLAIMS, CAUSES OF ACTION AND ANY OTHER DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, ACTIONS,

REMEDIES AND LIABILITIES WHATSOEVER, WHETHER ACCRUED OR


-26-

UNACCRUED, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, EXISTING BEFORE THE EFFECTIVE DATE, AS OF THE

EFFECTIVE DATE OR ARISING THEREAFTER, IN LAW, AT EQUITY, WHETHER FOR TORT, CONTRACT, VIOLATIONS OF STATUTES (INCLUDING

BUT NOT LIMITED TO THE FEDERAL OR STATE SECURITIES LAWS), OR OTHERWISE, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION,

TRANSACTION, OR OTHER OCCURRENCE OR CIRCUMSTANCES EXISTING OR TAKING PLACE PRIOR TO OR ON THE EFFECTIVE DATE ARISING FROM OR RELATED IN ANY WAY TO THE DEBTORS, INCLUDING, WITHOUT

LIMITATION, THOSE THAT ANY OF THE DEBTORS WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT OR THAT ANY HOLDER OF A CLAIM OR

EQUITY INTEREST OR OTHER ENTITY WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT FOR OR ON BEHALF OF ANY OF THE DEBTORS OR

THE ESTATES, INCLUDING WITHOUT LIMITIATION THOSE IN ANY WAY RELATED TO THE CHAPTER 11 CASES OR THE PLAN; PROVIDED, HOWEVER, THAT THE FOREGOING RELEASE SHALL NOT PROHIBIT THE DEBTORS, THE

ESTATES, OR THE PLAN ADMINISTRATOR FROM ASSERTING ANY AND ALL DEFENSES AND COUNTERCLAIMS IN RESPECT OF ANY DISPUTED CLAIM

ASSERTED BY ANY RELEASED PARTIES; PROVIDED FURTHER THAT THE FOREGOING RELEASE SHALL NOT APPY TO ANY CLAIM TO THE EXTENT

SUCH CLAIM IS COVERED BY AND WILL BE PAID UNDER THE DEBTORS’ D&O POLICY WITH CHUBB (EXCLUSIVE OF ANY RETAINAGE) (ALL RIGHTS OF CHUBB AND THE INSURED UNDER SUCH POLICY ARE PRESERVED),

PROVIDED FURTHER, THAT THE FOREGOING PROVISIONS OF THIS SECTION 11.7 SHALL HAVE NO EFFECT ON THE LIABILITY OF THE DEBTORS’

CURRENT DIRECTORS AND OFFICERS, THE DEBTORS’ DIRECTORS AND OFFICERS THAT SERVED IN SUCH CAPACITY AS OF THE PETITION DATE,

THE CHIEF RESTRUCTURING OFFICER, THE DEBTORS’ PROFESSIONALS, AND THE REPRESENTATIVES OF EACH OF THE FOREGOING THAT RESULTS FROM ANY ACT OR OMISSION THAT IS DETERMINED IN A FINAL ORDER TO

HAVE CONSTITUTED GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

11.8 Injunction. Except as otherwise provided in the Plan, on and after the

Confirmation Date, all Entities and Persons who have held, hold or may hold Claims against the Debtors or Equity Interests in the Debtors are, with respect to any such Claims

or Equity Interests, permanently enjoined from and after the Confirmation Date from: (a) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, any proceeding in a

judicial, arbitral, administrative or other forum) against or affecting the Debtors, the Post-Confirmation Debtors, any of their property, or any direct or indirect transferee of any

property of, or direct or indirect successor in interest to, any of the foregoing Entities, or any property of any such transferee or successor; (b) enforcing, levying, attaching (including,

without limitation, any pre-judgment attachment), collecting or otherwise recovering by any manner or means whether directly or indirectly, of any judgment, award, decree or order against the Debtors, the Post-Confirmation Debtors, any of their property, or any direct or

indirect transferee of any property of, or direct or indirect successor in interest to any of the


-27-

foregoing Entities; (c) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Post-Confirmation

Debtors, any of their property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to any of the foregoing Entities and (d) taking any

actions in any place and in any manner whatsoever that do not conform to or comply with the provisions of the Plan. Nothing contained in this Section 11.9 shall impact the rights of

a holder of an Allowed Claim to receive and enforce distributions on account of its Allowed Claim in accordance with Article 4 hereof or to enforce the provisions of this Plan.

11.9 Cramdown. To the extent any Impaired Class of Claims entitled to vote on

the Plan votes to reject the Plan, the Debtors reserve the right to request confirmation of the Plan under Section 1129(b) of the Bankruptcy Code with respect to such Class.

11.10 Governing Law. Except to the extent that the Bankruptcy Code is applicable, the rights and obligations arising under this Plan shall be governed by and construed and

enforced in accordance with the laws of the State of New York.

11.11 Notices. Any notice required or permitted to be provided under the Plan shall be in writing and served by either (a) certified mail, return receipt requested, postage

prepaid, (b) hand delivery or (c) reputable overnight courier service, freight prepaid, to be addressed as follows:

(a) To the Plan Administrator:

Timothy Boates

RAS Management Advisors, LLC 1285 Sharps Cove Road Gurley, AL 35748

[email protected]

(b) To the Debtors, c/o:

Mark T. Power, Esq. Janine M. Figueiredo, Esq.

HAHN & HESSEN, LLP 488 Madison Avenue New York, NY 10022

[email protected] [email protected]

11.12 Non-Voting Equity Securities. To the extent applicable, the Debtors shall

comply with the provisions of Section 1123(a)(6) of the Bankruptcy Code.

11.13 Retiree Benefits. From and after the Effective Date, to the extent required by Section 1129(a)(13) of the Bankruptcy Code, the Post-Confirmation Debtors shall continue

to pay all retiree benefits (as defined in Section 1114 of the Bankruptcy Code), if any,


mailto:[email protected]

mailto:[email protected]

-28-

established or maintained by the Debtors prior to the Effective Date. The Debtors believe there are no such benefits.

11.14 Saturday, Sunday or Legal Holiday. If any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of

such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date.

11.15 Section 1146 Exemption. Pursuant to Section 1146(c) of the Bankruptcy Code, the issuance, transfer or exchange of any security under the Plan or the making or delivery of any instrument of transfer pursuant to, in implementation of, or as contemplated

by, the Plan or the revesting, transfer or sale of any real or personal property of the Debtors pursuant to, in implementation of, or as contemplated by, the Plan shall not be taxed under

any state or local law imposing a stamp tax, transfer tax or similar tax or fee.

11.16 Severability. If any term or provision of the Plan is held by the Bankruptcy

Court prior to or at the time of Confirmation to be invalid, void or unenforceable, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original

purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as so altered or interpreted. In the event of any such

holding, alteration or interpretation, the remainder of the terms and provisions of the Plan may, at the Debtors’ option remain in full force and effect and not be deemed affected;

provided, however, that the Debtors retain the right not to proceed to Confirmation or consummation of the Plan if any such ruling occurs. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the

Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms.

11.17 Headings. The headings used in this Plan are inserted for convenience only and neither constitute a portion of the Plan nor in any manner affect the provisions of the

Plan.

ARTICLE 12

CONFIRMATION REQUEST

12.1 Request for Confirmation Pursuant to Bankruptcy Code Sections 1129(a) and

1129(b). The Debtors request entry of the Confirmation Order under Bankruptcy Code section 1129(a) and, to the extent necessary, Bankruptcy Code section 1129(b).

[Remainder of Page Intentionally Left Blank]


-29-

Dated: May 2, 2019 New York, New York

Respectfully submitted,

/s/ Mark T. Power HAHN & HESSEN LLP 488 Madison Avenue New York, New York

Telephone: (212) 478-7200 Facsimile: (212) 478-7400

Mark T. Power, Esq. Janine M. Figueiredo, Esq. Alison M. Ladd, Esq.

Jeremiah P. Ledwidge, Esq. Jacob T. Schwartz, Esq.

Counsel to the Debtors and Debtors in Possession


EXHIBIT 3

Schedule of Assumed Contracts & Cure Costs


Counterparty Contract Description Final Cure Amount

Unexpired Leases of Real Property

Canal Center Properties LLCNonresidential Real Property Lease for Premises Located at 7725 Granger Rd., Ste A, Valley View, OH 44125

$1,400.00

DD Dunhill LLCNonresidential Real Property Lease for Premises Located at 1250 Slocum St., Ste 742, Dallas, TX 75207

$9,320.00

STAG Industrial Holdings LLCNonresidential Real Property Lease for Premises Located at 50 Peachview Blvd., Gaffney, SC 29341

$203,492.42

Decorative Center of Houston LP

Nonresidential Real Property Lease for Premises Located at Decorative Center of Houston, 5120 Woodway Dr., Ste 132, Houston, TX 77056

$18,944.00

D&D Building CoNonresidential Real Property Lease for Premises Located at 979 Third Ave., Ste 620, New York, NY 10022

$106,231.00

Michael Drive Partners LLCNonresidential Real Property Lease for Premises Located at 125 Michael Dr., Ste 101, Syosset, NY 11791

$59,873.00

License Agreements

Ankasa International License Agreement $3,745.14

Bespoke Trimmings by MJ-Ramos License Agreement $4,287.84

Camille Shaheen-Tunberg License Agreement $33.33

CPW Designs d/b/a LL Designs License Agreement $16,548.73

Dwell Home Furnishings LLC n/k/a Wayfair LLC License Agreement $42,981.80

Eileen Katheryn Boyd Interiors (EKB Design) License Agreement $19,292.55

Jalenekanani, Inc. License Agreement $137.19

John Loecke Inc. d/b/a Madcap Cottage License Agreement $17,943.17

John Robshaw, Inc. License Agreement - May 2014 $24,734.30

John Robshaw, Inc. License Agreement - September 2013 $0.00

KNA Interior Design (Kirk Nix) License Agreement $12,275.78

Lillian August Designs, Inc. License Agreement $24.08

LKD Acquisition LLC (Laura Kirar) License Agreement $29,523.63

Lonni Paul Design LLC License Agreement $27,282.59



Multiply Media LLC (Domino) License Agreement $2,323.72

Thomaspaul, LLC License Agreement - May 2016 $19,801.66

Thomaspaul, LLC License Agreement - July 2013 $0.00

Tilton Fenwick, Inc. License Agreement $38,429.67

Tobi Fairley Interior Design (TFID) License Agreement $3,361.56

IT and Equipment ContractsAmerican Registry of Internet NumbersLtd. Service Agreement IP Addresses $0.00

Applied Relevance LLC Software License Agreement SWL $0.00

AT&T Corp. Internet/Phone Master Services Agreement $0.00

AT&T Mobility National Accounts LLC Corporate Digital Advantage Agreement $0.00

Cablevision Lightpath, Inc. Service Agreement VOIP support $9,259.77Carousel Industries of North America,Inc.

Service Agreement TelecommunicationsSupport $0.00

Carousel Industries of North America,Inc.


Carousel Industries of North America,Inc.


CISCO systems Capital Corp. Agreement to Lease Equipment No. 13156- MM001 - Computer Hardware Equipment $17,386.40

CISCO systems Capital Corp. Equipment Lease HP Computer Hardware $0.00

CISCO systems Capital Corp. Meraki Maintenance Agreement - TFV133996 $0.00

CIT Finance LLC Equipment Lease copier/printer $14,915.56CIT Finance LLC Equipment Lease copier/printer $0.00CIT Finance LLC Equipment Lease copier/printer $0.00

DDI Capital Equipment Lease Gaffney HVAC Equipment $5,575.51

DDI Leasing, Inc. Equipment Lease Gaffney HVAC Equipment $8,991.00

Hosted Services Corp. Master Service Agreement IT support $96,495.00Hudson Integrated, Inc. Digital Marketing Service Agreement $25,266.24IBM Credit LLC Equipment Lease IBM Tape Drives $3,897.93IBM Credit LLC Equipment Lease IBM AS400 $0.00Jules & Associates, Inc. Equipment Lease Thin Client Computers $6,856.73

Jules & Associates, Inc. Equipment Lease Server and Meraki Cloud $0.00

Konica Minolta (All Covered Service) Service Agreement IT support $64,112.00

Konica Minolta Premier Finance Equipment Lease copier/printer $0.00Konica Minolta Premier Finance Equipment Lease copier/printer $10,246.47Konica Minolta Premier Finance Equipment Lease copier/printer $0.00



Pitney Bowes, Inc. Service Agreement Mailstream On Demand $1,394.00

Pitney Bowes, Inc. Equipment Lease Equipment Lease $0.00Regents Capital Corporation Equipment Lease Warehouse Equipment $0.00Something Digital.com LLC d/b/a/Something Digital Master Services Agreement IT support $0.00

SPS Commerce Service Agreement IT - SPS/EDI $0.00Distribution and Sale Agreements

American Hotel Registry Company Rebate Agreement $4,770.68Chltex Purchasing Agent Agreement $0.00Direct Supply Rebate Agreement $4,282.41Hilton Supply Management Supplier Agreement $105,865.34James Hare, Ltd. Distribution Agreement $61,724.04Worldwide Sourcing Solutions, Inc.(Wyndham) Worldwide Sourcing Agreement $36,872.42

Miscellaneous AgreementsCarolina Building Services Cleaning Agreement $0.00Dotmailer, Inc. Mailing Service Agreement $7,680.00Kourt Security Partners, LLC d/b/aSelect Security Security Installation & Services Agreement $3,617.83

Staffmasters Background & Drug Screening $0.00United Parcel Service, Inc. Carrier Agreement TBD in an amount not to

exceed $60,000.00United Parcel Services General ServicesCo. Data Access Agreement

Independent Contractor Agreements

A Hoke Ltd. - Charlotte Independent Agent Showroom Agreement $28,874.32

A Hoke Ltd. - Raleigh Independent Agent Showroom Agreement $0.00

Area West International Independent Agent Showroom Agreement $5,155.83

Award Fabrics Charleston Independent Agent Showroom Agreement $2,811.49

Bartex Fabric Independent Agent Showroom Agreement $2,964.50

Baumann and Associates Independent Sales Rep. Agreement $0.00Boyer Design Source, Inc. Independent Sales Rep. Agreement $0.00Bradley Scott Hospitality Independent Sales Rep. Agreement $0.00

Brook Park Design Center Independent Agent Showroom Agreement $4,110.27

Chicago Design Team Independent Agent Showroom Agreement $2,587.44

Chuck Wells & Associates Independent Sales Rep. Agreement $119,100.33

Croce, Inc. Independent Agent Showroom Agreement $11,603.77

Crossover Products, Inc. Independent Sales Rep. Agreement $0.00

D.S.R. Inc. Independent Agent Showroom Agreement $3,144.90



Design Mart Silicone Valley LLC Independent Agent Showroom Agreement $2,688.66

Design Resource NJ Independent Agent Showroom Agreement $0.00

Design Source CT Independent Agent Showroom Agreement $4,037.93

Designers Buying Group Independent Agent Showroom Agreement $15,776.66

Designers Gallery Independent Agent Showroom Agreement $7,140.89

Designers Market of Richmond Independent Agent Showroom Agreement $7,672.25

ECO Dzn Independent Sales Rep. Agreement $0.00

Egg & Dart Ltd. Independent Agent Showroom Agreement $8,060.66

FARRAR ET CIE, LLC Independent Sales Rep. Agreement $0.00

Flynn Furniture, Inc. (Frances King) Independent Agent Showroom Agreement $2,568.22

Gepfert & Associates, LLC Independent Sales Rep. Agreement $0.00

Gina B and Company Independent Agent Showroom Agreement $12,801.45

Gorman's Furniture Independent Agent Showroom Agreement $443.98

Gregory Alonso of OH Independent Agent Showroom Agreement $5,603.33

Harsey & Harsey San Diego Independent Agent Showroom Agreement $8,198.76

HG Striker Hospitality Group (HarrisGorab) Independent Sales Rep. Agreement $0.00

Interior Trade Cartel Independent Agent Showroom Agreement $1,681.32

Interior Trading Company -Jacksonville, Orlando, and Tampa Independent Agent Showroom Agreement $7,504.54

International Design Source - Naples &Sarasota Independent Agent Showroom Agreement $4,823.55

JB Smith Co. (Joe Smith) Independent Sales Rep. Agreement $0.00JC Hospitality, Inc. Independent Sales Rep. Agreement $0.00Jill Draper Independent Sales Rep. Agreement $0.00

Joseph Craig Showroom Independent Agent Showroom Agreement $9,472.83

Julie Francis Associates Independent Sales Rep. Agreement $0.00

Kenny Design Resource - St. Louis Independent Agent Showroom Agreement $0.00

Kenny Design Resources - Lenexa Independent Agent Showroom Agreement $13,991.32

Mannisto Enterprises, Inc. d/b/aDesigners Only Independent Agent Showroom Agmt $1,559.18

Manshel Design LLC Independent Sales Rep. Agreement $0.00Marilyn M Grivich & Associates Independent Sales Rep. Agreement $0.00

MET Design Center Independent Agent Showroom Agreement $1,158.82



Mimosa Cove Design Resources (CarolRanno) Independent Sales Rep. Agreement $0.00

Mind.Full Connections Independent Sales Rep. Agreement $0.00

MP Interiors Independent Agent Showroom Agreement $4,750.49

Nettleton Associates Independent Sales Rep. Agreement $444.11Overlees Contract Resources, LLC Independent Sales Rep. Agreement $0.00

Peyton Home Furniture Independent Agent Showroom Agreement $4,557.63

Rafferty Design Resource, LLC d/b/aJosin Desginer Showroom Independent Agent Showroom Agreement $3,744.85

Right-Brain Endeavors LLC (MattSchenk) Independent Sales Rep. Agreement $0.00

Ronkonkoma Operations LLC d/b/aScalamandre Independent Agent Showroom Agreement $6,500.00

Rountry Associates (Bill Rountry) Independent Sales Rep. Agreement $0.00

Ruth Wilson Showroom Independent Agent Showroom Agreement $6,540.18

Rye Associates Independent Sales Rep. Agreement $0.00Sari Polinger and Associates Independent Sales Rep. Agreement $0.00

Stark Carpet Independent Agent Showroom Agreement $11,268.36

StephanieP LLC (Stephanie Poliakoff) Independent Sales Rep. Agreement $0.00

Stockton Hicks Laffey Independent Agent Showroom Agreement $7,981.44

Susan Dunn & Associates Independent Sales Rep. Agreement $0.00Techstyle Contract Fabrics Independent Sales Rep. Agreement $0.00

The Dixon Group Independent Agent Showroom Agreement $3,681.55

The Ferlin Group (Phyllis Steiber) Independent Sales Rep. Agreement $0.00The Grant Hospitality Group Independent Sales Rep. Agreement $0.00

The Trade Resource Independent Agent Showroom Agreement $172.64

The Trump Group Inc. (Sue Trump) Independent Sales Rep. Agreement $0.00The Weber Team Partnership Independent Sales Rep. Agreement $1,534.85Torrilhon Ltd. Independent Sales Rep. Agreement $703.99Updates Group Independent Sales Rep. Agreement $0.00Vcontract LLC Independent Sales Rep. Agreement $0.00

Willow Grove Showroom Independent Agent Showroom Agreement $2,177.70

Wulff Contract (Bob Wulff) Independent Sales Rep. Agreement $0.00


EXHIBIT 4

Schedule of Rejected Executory Contracts and Unexpired Leases


Counterparty Contract Description Effective Date of RejectionUnexpired Leases of Real Property

ADAC LP

Nonresidential Real Property Lease for Premises Located at ADAC 349 & 351 Peachtree Hills Ave., Ste. 125, Atlanta, GA 30305

The date, after providing the applicable landlord with not less than ten (10) days written notice of the intent to vacate, that the Purchaser (i) has vacated the premises and (ii) returned possession to the landlord, which date shall not be later than July 31, 2019.

Jamestown 1 Design Place LP

Nonresidential Real Property Lease for Premises Located at Boston Design Center, One Design Center Place, Ste. 317, Boston, MA 02210


Merchandise Mart LLC

Nonresidential Real Property Lease for Premises Located at The Merchandise Mart, Ste 632, 633 & 634, Chicago, IL 60654


49 Wireless H LLC

Nonresidential Real Property Lease for Premises Located at 49 Wireless Blvd., Suite 150, Hauppauge, NY 11788


Market Square AC IV LLC

Nonresidential Real Property Lease for Premises Located at Market Square Tower, 305 West High Street, Ste 780, High Point, NC 27260


Pacific Design Center 1 LLC

Nonresidential Real Property Lease for Premises Located at Pacific Design Center, 8687 Melrose Ave., Ste B-601, West Hollywood, CA 90069

The date, after providing the applicable landlord with not less than ten (10) days written notice of the intent to vacate, that the Purchaser (i) has vacated the premises and (ii) returned possession to the landlord, which date shall not be later than May 31, 2019.

Morgan Realty Company LLC

Nonresidential Real Property Lease for Premises Located at 647 Hopewell Rd., Morganton, NC 28655



Counterparty Contract Description Effective Date of Rejection

BSD 80 Broad LLC

Nonresidential Real Property Lease for Premises Located at 80 Broad Street, 10th & 11th Floors, New Yok, NY 10004


34 South 11th St LP

Nonresidential Real Property Lease for Premises Located at 34 South 11th Street, Ste 306, Philadelphia, PA 19107


Quincy Foxboro LLC

Nonresidential Real Property Lease for Premises Located at 2 Hampshire St., Suite 300, Foxboro, MA 02035


SF Design Center Investors LLC

Nonresidential Real Property Lease for Premises Located at 101 Henry Adams St., Ste 100, San Francisco, CA 94103


Michigan Design Center Limited Partnership

Nonresidential Real Property Lease for Premises Located at Michigan Design Center, 1700 Stutz Dr., Ste 38, Troy, MI 48064


Franklin Court Inc.

Nonresidential Real Property Lease for Premises Located at 1099 14th St., Ste 400, Washington, DC 20005


Distribution and Sale Agreements

Thibaut, Inc. Distribution Agreement - Furniture

The earlier of (i) ten (10) business days after the date on which buyer provides counterparty written notice of buyer's intention to terminate the agreement, or (ii) July 31, 2019

Thibaut, Inc. Distribution Agreement - Fabric



Counterparty Contract Description Effective Date of Rejection

Miscellaneous Agreements

Ceridian HCM, Inc. HR Payroll Services Agreement


Republic Services Waste Removal Agreement


Employee Benefits Corporation

BESTFlex Plan Premium Only Plan Adoption and Service Agreement - Executed October 24, 2018



Commute Ease Plan Adoption and Service Agreement - Executed September 12, 2018



COBRA Secure Service Agreement - Executed January 4, 2017


Fidelity Management Trust Company

Fidelity Investments Retirement Plan Service Agreement - Executed May 14, 2015


Eastern Vision Service Plan, Inc.

Client Vision Care Policy - Policy No. 30086012

