EXHIBIT 99.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
IN RE: (S)
(S) CASE NO. 03-34762-HDH-11
DAISYTEK, INCORPORATED, et al., (S)
(S) (Chapter 11)
DEBTORS. (S) (Jointly Administered)
ORDER AUTHORIZING AND APPROVING (i) SALE OF
SUBSTANTIALLY ALL OF THE ASSETS OF ARLINGTON INDUSTRIES, INC.
FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT
OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES
On July 25, 2003, the above-referenced debtors (the "Debtors") filed their
Expedited Motion for Order (A) Authorizing Certain Debtors to Sell Assets and to
Assume, Assign and Sell Certain Executory Contracts and Unexpired Leases That
Relate Thereto Free and Clear of All Liens, Claims, Encumbrances, and Interests;
and (B) Establishing Cure Amounts Related to Assumed and Assigned Executory
Contracts and Unexpired Leases (the "Sale Motion") [Docket No. 519]. BASED UPON
THE PLEADINGS ON FILE WITH THE COURT AND THE RECORD MADE AT THE HEARING ON THE
SALE MOTION, THE COURT MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF
LAW:
Jurisdiction
A. This Court has jurisdiction over the Sale Motion pursuant to 28 U.S.C.
(S) 1334. This proceeding is a core proceeding pursuant to 28 U.S.C. (S)
157(b)(2)(A) and (N). Venue is proper in the Northern District of Texas pursuant
to 28 U.S.C. (S)(S) 1408 and 1409.
Procedural Background
B. On May 7, 2003 (the "Initial Petition Date"), Daisytek, Incorporated
("Inc."), Arlington Industries, Inc. ("Arlington"); B.A. Pargh Company; Daisytek
Latin America, Inc.;
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 1 OF 15
Digital Storage, Inc. ("DSI"); Tapebargains.com, Inc.; The Tape Company
("Tape"); and Virtual Demand, Inc. each filed a voluntary petition for relief
under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code").
Thereafter, on June 3, 2003, Daisytek International Corporation
("International") filed a voluntary petition for relief under chapter 11 of the
Bankruptcy Code. The Debtors continue to operate their businesses and manage
their properties as debtors-in-possession pursuant to Bankruptcy Code (S)(S)
1107 and 1108.
C. On July 30, 2003 this Court entered its Order Establishing Procedures
for Sale of Substantially All the Assets of the Selling Debtors (the "Bid
Procedures Order") [Docket No. 538]. The Bid Procedures Order established, inter
alia, the procedure whereby the Debtors could solicit competing bids for the
purchase of substantially all of the assets of Arlington.
Factual Background
D. International was founded in 1977 as a computer supplies reseller in
Richardson, Texas. Today, International is a holding company that, by and
through its U.S. subsidiaries (the "Other Debtors") and certain direct and
indirect foreign subsidiaries (together with International, and the Other
Debtors, "Daisytek"), was a leading global distributor of (a) computer supplies;
and (b) professional tape products. Daisytek's total revenue for fiscal year
2003 was in excess of $1,500,000,000. As of the Petition Date, the Debtors had
approximately 393 full-time and 4 part-time employees within the United States.
E. The Debtors are borrowers under a working capital credit facility (the
"BOA Credit Facility") with Bank of America, N.A., as agent ("BOA"), and certain
other lenders that are parties thereto (the "Lenders"). As of the date of this
Order, the outstanding principal amount of the BOA Credit Facility was
approximately $36,000,000.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 2 OF 15
F. The Debtors, in the exercise of their business judgment, have decided to
sell the assets of Arlington, Tape, and the capital stock of certain non-debtor
subsidiaries. The Debtors have taken steps, subject to necessary Bankruptcy
Court approvals and as set forth in the Bid Procedures Order, as is reasonably
necessary to maximize the value of the Debtors' assets.
G. The Debtors' marketing efforts were adequate and appropriate under the
circumstances.
Terms of the Proposed Sale to the Buyer
H. The Debtors engaged in extensive and vigorous, arm's length negotiations
with respect to the terms and conditions for the sale of substantially all of
the assets of Arlington. The specific terms and conditions of the proposed
purchase are set out in an Asset Sale and Purchase Agreement among Carolina
Wholesale Office Machine Company Inc. (the "Buyer"), Arlington and International
dated August 20, 2003 (the "Asset Purchase Agreement"), a copy of which is
attached as Exhibit "A" to and made a part of this Order./1/ Pursuant to the
Asset Purchase Agreement, the Buyer will, inter alia, purchase the assets of
Arlington described therein and certain executory contracts and unexpired leases
(the "Transferred Assets"). The Buyer has made the highest and best offer to
purchase the Transferred Assets, subject to approval of this Court.
I. Pursuant to the Asset Purchase Agreement, the Buyer proposes to close on
the transaction as soon as possible after the entry of this Order.
J. The Transferred Assets shall be sold free and clear of any and all
liens, claims, encumbrances and other interests pursuant to Bankruptcy Code (S)
363(f). Any liens which have been asserted against all or any portion of the
Transferred Assets shall attach to the net sale
- ----------
/1/ Capitalized terms used herein that are not otherwise defined herein shall
have the meaning set forth in the Asset Purchase Agreement.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 3 OF 15
proceeds. If a dispute arises over the priority or validity of a particular lien
asserted against the Transferred Assets, this Court retains jurisdiction to
adjudicate such disputes. The Buyer is not acquiring or assuming any "claims"
(as that term is defined in Bankruptcy Code (S) 101(5)) against any of the
Debtors except as otherwise specifically provided in the Asset Purchase
Agreement.
Notice of Sale to Creditors
K. Notice of the Sale Motion and the hearing on the Sale Motion was
provided on or about August 1, 2003 via United States mail, postage prepaid,
upon: (i) every non-debtor party to an executory contract and unexpired lease
with Arlington; (ii) each person or entity known to the Debtors to assert a
secured claim against the Transferred Assets; (iii) the Office of the United
States Trustee for the Northern District of Texas; (iv) counsel for the
Committee; (v) counsel for the Lenders; (vi) each entity that has filed a notice
of appearance in the Cases; (vii) upon every holder of a claim against Arlington
that is known to the Debtors; and (viii) all other persons and entities upon
whom the Debtors were otherwise to provide service as required by the Bid
Procedures Order.
L. Notice of the schedule of the Assumed Contracts (the "Contracts
Schedule"), which included the proposed cure amounts related thereto, was
provided by service of the Contracts Schedule on or about August 1, 2003, via
United States mail, postage prepaid, upon every non-debtor party to an Assumed
Contract. Such Contracts Schedule was amended two times and provided by service
of the amended Contracts Schedule on August 5, 2003 and August 8, 2003,
respectively, via United States mail, postage prepaid, upon every non-debtor
party to an Assumed Contract.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 4 OF 15
M. The foregoing notice of the Sale Motion and assumption and assignment of
Assumed Contracts was adequate under the circumstances and complies with the
requirement of the Bid Procedures Order.
Sale Procedures
N. With the Court's approval, the Debtors employed Houlihan Lokey Howard
Zukin Capital ("HLHZ") to, among other things, identify and negotiate with
potential bidders for the capital stock or assets of the Debtors and affiliates
of the Debtors.
O. HLHZ identified and contacted certain parties that HLHZ determined might
have an interest in acquiring such stocks or assets. After contacting such
parties and inviting them to submit bids, HLHZ assisted the conduct of due
diligence by interested parties.
P. Buyer timely submitted a bid for the purchase of certain of Arlington's
assets.
Q. After further negotiations among the Debtors, by and through the
professionals, Buyer and other parties-in-interest, the Debtors designated Buyer
as a Qualified Bidder (as such term is defined in the Sale Motion) for
Arlington's assets.
R. The auction for Arlington's assets was conducted in the offices of
Vinson & Elkins L.L.P. at 12:00 p.m., Central Time, on August 25, 2003. No other
Qualified Bidders appeared; and, with the consent of counsel for the Unsecured
Creditors' Committee and of counsel for the Lenders, Debtors accepted Buyer's
offer.
Justification for Sale
S. The Debtors have exercised sound business judgment in connection with
the proposed sale to the Buyer. After considering the circumstances relating to
the sale of the Transferred Assets, the Court has determined that the Buyer's
offer presents the best opportunity
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 5 OF 15
for these bankruptcy estates to realize the highest value for the Transferred
Assets and distribution possible to all creditors.
T. The Debtors have carried the burden of demonstrating that the proposed
sale on the terms and conditions of the Asset Purchase Agreement is in the best
interest of these estates, and the Court further finds that the Debtors have met
the standards set out in In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983)
to approve the expedited sale of a substantial percentage of their assets.
Moreover, the sale to the Buyer on the terms and conditions of the Asset
Purchase Agreement does not constitute a sub rosa plan of reorganization or
violate any provision of the Bankruptcy Code or Bankruptcy Rules.
U. The transactions contemplated in the Sale Motion, as approved and
implemented herein, are in compliance with and satisfy all applicable provisions
of the Bankruptcy Code, including but not limited to Bankruptcy Code (S) 363(b),
(f) and (o). The terms and conditions of the sale of the Transferred Assets to
the Buyer, as set out in the Asset Purchase Agreement, together with any other
transactions described in the Asset Purchase Agreement, are approved by this
Order as fair and reasonable.
V. The Buyer's offer, as approved herein, is the highest and best offer for
the Transferred Assets. The aggregate purchase price offered by the Buyer
constitutes full and adequate consideration and reasonably equivalent value for
the Transferred Assets.
W. The transfer of the Transferred Assets to the Buyer on the Closing Date,
for the consideration set forth in the Asset Purchase Agreement, is in the best
interest of the Debtors' estates, their creditors and all parties-in-interest.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 6 OF 15
Good Faith
X. The transfer of the Transferred Assets to the Buyer represents an arm's
length transaction and has been negotiated in good faith between the parties.
The Buyer, as transferee of the Debtors' property, is a good faith purchaser
under Bankruptcy Code (S) 363(m) and, as such, is entitled to the full
protection of Bankruptcy Code (S) 363(m).
Sale Free and Clear of Liens, Claims and Encumbrances
Y. The Debtors may sell the Transferred Assets free and clear of all liens,
claims, encumbrances and other interests pursuant to Bankruptcy Code (S) 363(f).
Assumption and Assignment of Executory Contracts and Unexpired Leases
Z. The payment to each of the counterparties to each of the Assumed
Contracts of the cure amount as set forth in the Contracts Schedule, which was
filed with the Court on August 8, 2003, is in full and final satisfaction of all
obligations and is full compensation to the counterparties for any pecuniary
losses under such contracts or leases pursuant to Bankruptcy Code (S) 365(b)(1).
The cure amounts for each Assumed Contract is accurate and binding upon all
parties. Pursuant to the terms of the Asset Purchase Agreement, the payment of
all cure amounts with respect to the assumption and assignment of the Assumed
Contracts shall be made by Buyer.
AA. The Buyer has demonstrated adequate assurance of future performance of
the Assumed Contracts.
BASED UPON THE FOREGOING, IT IS HEREBY ORDERED, ADJUDGED AND DECREED:
1. The Sale Motion is hereby granted and the sale of the Transferred Assets
to the Buyer, on the terms and subject to the conditions set forth in the Asset
Purchase Agreement (together with the attached schedules and exhibits), hereby
is APPROVED in its entirety.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 7 OF 15
2. The Debtors are and shall be authorized and directed to fully perform
all terms and conditions of the Asset Purchase Agreement, together with all
additional instruments and documents which may be reasonably necessary,
convenient or desirable in performing under the Asset Purchase Agreement, and to
take any and all further actions (including any prorations, adjustments and the
like provided for in the Asset Purchase Agreement) as may be necessary or
appropriate in performing the obligations as contemplated by the Asset Purchase
Agreement. Any objections to the Sale Motion that were not withdrawn or settled
on the record are overruled.
3. Subject to the fulfillment of the terms and conditions of the Asset
Purchase Agreement, at the Closing, Arlington, as is required under the Asset
Purchase Agreement, shall sell, transfer, assign and convey to the Buyer all
right, title and interest in and to the Transferred Assets. Arlington and the
other Debtors are authorized, empowered and hereby directed to execute and
deliver to Buyer all bills of sale, assignments and such other documentation
that may be reasonably necessary or reasonably requested by the Buyer to
evidence the transfers under the Asset Purchase Agreement.
4. This Order is and shall be effective as a determination that, upon the
Closing, and except to the limited extent otherwise provided in the Asset
Purchase Agreement, all Claims (as defined below) existing as to all or any part
of the Transferred Assets have been and are adjudged and declared to be
unconditionally released, discharged and terminated, with such Claims attaching
to the net sale proceeds from the sale of the Transferred Assets to the Buyer.
The transfer of the Transferred Assets to the Buyer as of the Closing shall be
free and clear of any and all liens, claims, encumbrances, charges and other
interests thereon and there against of whatever type or description, including,
but not limited to, mortgages, security interests, pledges,
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 8 OF 15
judgments, reclamation claims, leases, subleases, licenses, options, easements,
deeds of trust, conditional sales agreements, title retention arrangements
intended as security, interests of consignment creditors, guarantees,
hypothecations, charges, obligations, rights, restrictions and other interests
and encumbrances, and other claims and interests (all such claims and interests
described in this paragraph shall be referred to collectively as "Claims"),
having arisen, existed or accrued prior to and through the Closing Date, whether
such Claims are direct or indirect, absolute or contingent, choate or inchoate,
fixed or contingent, matured or unmatured, liquidated or unliquidated,
voluntarily incurred or arising by operation of law, against (a) Arlington, (b)
any of the other Debtors; or (c) the Transferred Assets.
5. All Claims in or against the Transferred Assets shall attach to the net
proceeds arising from the sale of the Transferred Assets to the Buyer with the
same force, validity, effect, priority and enforceability as such Claims had
prior to such sale. Any issues regarding the extent, validity, perfection,
priority and enforceability of such Claims with respect to any Transferred
Assets or the net sale proceeds shall be determined by the Court upon
application by Arlington, any other Debtor, any successor or
successor-in-interest to the foregoing, any creditor or any other
party-in-interest (including Buyer) at a later date.
6. Except as expressly provided in the Asset Purchase Agreement, the Buyer
shall not be deemed to have assumed any "claims" (as that term is defined in
Bankruptcy Code (S) 101(5)) against any of the Debtors, including Arlington, or
that may be asserted against any of the Transferred Assets. Except as expressly
provided in the Asset Purchase Agreement, the Buyer shall not be deemed a
successor of or to any of the Debtors, including Arlington, for any liability of
any or all of the Debtors (whether direct or indirect, known or unknown,
liquidated or unliquidated, choate or inchoate, or contingent or fixed),
including, without limitation, any
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 9 OF 15
products liability claims, any employee rights or benefits claims, or any alter
ego or successor liability claims.
7. All of the Debtors' interests in the Transferred Assets shall be, as of
the Closing, transferred to, and vested in, the Buyer. Subject to the
fulfillment of the terms and conditions of the Asset Purchase Agreement, as of
the Closing, this Order shall be considered and constitute for all purposes a
full and complete general assignment, conveyance and transfer of the Transferred
Assets and/or a bill of sale transferring good and marketable, indefeasible
title and interest in the Transferred Assets to the Buyer. All governmental
recording offices and all other parties, persons or entities are hereby directed
to accept this Order as such an assignment and/or bill of sale, and, if
necessary, this Order shall be accepted for recordation on or after the Closing
as conclusive evidence of the free and clear, unencumbered transfer of title to
the Transferred Assets conveyed to the Buyer at the Closing.
8. If any one or more of the Transferred Assets is in the care, custody or
possession of a non-debtor party, such party following the Closing shall
immediately upon request of the Buyer surrender the Transferred Asset(s) which
it is holding to the Buyer.
9. Without limiting the foregoing Paragraph 5 of this Order, this Court
shall have exclusive jurisdiction to implement and enforce the terms and
provisions of the Asset Purchase Agreement and this Order, including any
disputes or controversies relating hereto or with respect to the sale, the
proceeds of sale, the transfer and/or assignment and delivery of the Transferred
Assets to the Buyer, and the Buyer's peaceful use and enjoyment thereof after
the Closing, free and clear of any Claims, regardless of whether a plan of
reorganization or liquidation has been confirmed in these Cases and irrespective
of the provisions of any such plan or order confirming such plan.
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 10 OF 15
10. The terms and provisions of this Order shall be binding in all respects
upon the Debtors, their employees, officers, and directors, their creditors, any
parties having received notice of these proceedings or the sale of the
Transferred Assets (actual or constructive), any affected third parties and
other parties in interest, any persons or entities asserting a Claim against, or
an interest in, the Debtors' estates or to any of the Transferred Assets sold,
conveyed and assigned pursuant to this Order, the Buyer, and all successors,
transferees or assigns of the above-mentioned parties, including, but not
limited to, a chapter 11 trustee or chapter 7 trustee that may be appointed for
Arlington or any of the other Debtors.
11. This Order is a final order (as opposed to an interlocutory order) and
is enforceable upon entry. To the extent necessary under Bankruptcy Rules 5003,
9014, 9021 and 9022, this Court expressly finds that there is no just reason for
delay in the implementation of this Order and expressly directs entry of
judgment as set forth herein. In addition, as no unresolved objections to the
Sale Motion remained at the time of the hearing on the Sale Motion, the Court
orders that the ten-day automatic stay imposed by Bankruptcy Rules 6004(g) and
6006(d) does not apply. Accordingly, this Order and the proposed sale to Buyer
are subject to immediate execution and fulfillment by the Debtors and the Buyer.
12. The Buyer, as transferee of Arlington's property, is a good faith
purchaser under Bankruptcy Code (S) 363(m) and, as such, is entitled to the full
protection of Bankruptcy Code (S) 363(m) with respect to the Buyer's purchase of
the Transferred Assets.
13. Pursuant to Bankruptcy Code (S) 363(m), the reversal or modification of
this Order on appeal will not affect the validity of the transfer of the
Transferred Assets to the Buyer, as well as the transactions contemplated and/or
authorized by this Order, unless the same is stayed pending appeal prior to the
Closing on the Asset Purchase Agreement. The Debtors, either
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 11 OF 15
individually or collectively, may close on the Asset Purchase Agreement as soon
as practicable after entry of this Order into the Court's docket.
14. Each and every federal, state and local government agency or department
is hereby directed to accept any and all documents and instruments necessary and
appropriate to consummate the transactions contemplated by the Asset Purchase
Agreement, including, but not limited to, documents and instruments for
recording in any governmental agency or department required to transfer to the
Buyer the names and any and all other licenses or permits under the Debtors'
ownership necessary, for the operations that are associated with the Transferred
Assets. All county and state offices are further directed to accept any and all
termination statements under the Uniform Commercial Code for release of any
liens or encumbrances against any of the Transferred Assets. Pursuant to section
1146(c) of the Bankruptcy Code, the execution, delivery and/or recordation of
any and all documents or instruments necessary or desirable to consummate the
transactions contemplated by the Asset Purchase Agreement and the transfer of
the Transferred Assets pursuant thereto shall be, and hereby is, exempt from the
imposition and payment of any and all recording, transfer, sales and use, stamp
or other similar taxes.
15. Any and all parties asserting liens or encumbrances against the
Transferred Assets shall, to the extent necessary, execute contemporaneously
with Closing on the Asset Purchase Agreement (or as soon as reasonably practical
thereafter as requested by the Buyer), any and all documents, releases or
instruments as may be reasonably necessary to release, remove or terminate the
lien, liens or encumbrances which have been asserted against any one or all of
the Transferred Assets.
16. The Debtors are authorized and directed to pay to Houlihan Lokey Howard
& Zukin Capital Group, its fees for serving as investment bankers for the
Debtors in accordance
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 12 OF 15
with the terms of their engagement previously approved by the Court from the net
sale proceeds. Thereafter, the Debtors are authorized and directed to pay the
balance of the net sale proceeds to the Lenders for application to the Lenders'
debt without prejudice to the Committee's pending objections to the claims of
the Lenders.
17. The rights of the Debtors under the Asset Purchase Agreement may be
vested in a representative of the bankruptcy estate under any plan of
reorganization or liquidation confirmed in the Bankruptcy Cases.
Dated: August 28, 2003
/s/ Harlin D. Hale
----------------------------------------
THE HONORABLE HARLIN D. HALE
UNITED STATES BANKRUPTCY JUDGE
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 13 OF 15
Agreed to and Accepted by:
VINSON & ELKINS L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Tel: 214-220-7700
Fax: 214-220-7716
By: /s/ Holly J. Warrington
------------------------------------
Daniel C. Stewart, SBT # 19206500
Paul E. Heath, SBT # 09355050
Richard H. London, SBT # 24032678
Holly J. Warrington, SBT # 24037671
ATTORNEYS FOR THE DEBTORS
- -AND-
KMZ ROSENMANN
401 South Tryon Street
Suite 2600
Charlotte, NC 28202
By: /s/ Bradley E. Pearce (signed with permission HJW)
--------------------------------------------------
Bradley E. Pearce, admitted pro hac vice
ATTORNEYS FOR THE BUYER
ORDER AUTHORIZING AND APPROVING (i) SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF
ARLINGTON INDUSTRIES, INC. FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND
OTHER INTERESTS AND (ii) ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES
PAGE 14 OF 15
[Exhibit Omitted]