ORDERED in the Southern District of Florida on September 12, 2012. Laurel M. Isicoff, Judge United States Bankruptcy Court UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA www.flsb.uscourts.gov In re National Litho, LLC, Debtor. ) ) ) ) ) Case No. 12-27566-LMI Chapter 11 AMENDED 1 ORDER (A) AUTHORIZING AUCTION FOR NON-ESSENTIAL EQUIPMENT, (B) APPROVING BIDDING PROCEDURES, (C) AUTHORIZING SALE OF ASSETS TO THE SUCCESSFUL BIDDERS AT AN AUCTION FREE AND CLEAR OF ALL ENCUMBRANCES; (D) SHORTENING NOTICE PERIOD UNDER RULE 2002(a)(2); and (E) SETTING FINAL SALE HEARING FOR SEPTEMBER 21, 2012 AT 9:30 A.M. This matter came before the Court on August 29, 2012 (the Bid Hearing ), upon the Emergency Motion Pursuant to Sections 105(a) and 363 of the Bankruptcy Code, for Authority to (A) Conduct an Auction for Non-Essential Equipment, (B) Approve Bidding Procedures, (C) Sell Assets to the Successful Bidders at an Auction Free and Clear of All Encumbrances, and (D) Shorten Notice Period Under Rule 2002(a)(2) (the Motion ) (DE #86) filed by Debtor, National Litho, LLC 1 Revised to correct start time for Final Sale Hearing.
( National Litho ). A list of the Equipment 2 to be sold pursuant to the Auction Procedures set forth in the Motion are attached thereto. Based upon the argument of counsel, the representations and stipulations made on the record by the parties at the Bid Hearing; and after due deliberation thereon the Court finds that the entry of this Order is in the best interest of National Litho, its estate, its creditors and other parties in interest; and sufficient cause appearing therefor, it is ORDERED that: 1. The Auction Procedures as set forth in Exhibit A to this Order are approved. 2. The Auction shall commence at 10:00 a.m. and take place, to the extent one or more Qualified Bids have been received, on September 19, 2012 pursuant to the terms and conditions of the Auction Procedures as set forth this Order at the offices of Debtor s counsel, Salazar Jackson, Two South Biscayne Boulevard, Suite 3760, Miami, Florida 33131. 3. The Sale Hearings with respect to the proposed sale of Equipment shall be held on September 21, 2012 at 9:30 a.m. in the United States Bankruptcy Court, 51 S.W. 1 st Avenue, Miami, Florida 33130, at which time the Court shall (i) consider approval of the Sale to the bidder providing the best and highest offer for the Equipment at the Auction, (ii) consider any issues or objections that are timely interposed by any parties, and (ii) grant such other or further relief as the Court may deem just or proper. 4. Upon entry of this Order, National Litho shall serve this Order, including all exhibits thereto, upon (i) all parties entitled to notice pursuant to Bankruptcy Rule 2002, (ii) all parties who are known to have expressed an interest in acquiring the Equipment, and (iii) all parties who have asserted a lien or security interest against any of the Equipment. 2 Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Motion. 2
5. Notice as set forth in the preceding paragraphs shall constitute good and sufficient notice of the Motion, the Auction and the Sale Hearing, and no other or further notice of the Motion, the Auction and/or Sale Hearing shall be necessary or required. 6. The stay provided for in Bankruptcy Rules 6004(h) is waived and this Bidding Procedures Order shall be effective immediately upon its entry. 7. Objections, if any, to the results of the Auction or the Sales shall be filed with this Court and served no later than 5:00 p.m. Prevailing Eastern Time on September 19, 2012 (the Objection Deadline ) on: National Litho s counsel, Salazar Jackson, LLP, 2 South Biscayne Boulevard, Suite 3760, Miami, Florida 33131, Fax: (305) 397-1021, attn: Luis Salazar, Esq.; Counsel for the Committee of Unsecured Creditors, Jacqueline Calderin, Esq., Ehrenstein Charbonneau Calderin, 501 Brickell Key Drive, Third Floor, Miami, Florida 33131; and the Office of the United States Trustee, attn.: Ariel Rodriguez, Esq., 51 S.W. First Avenue, Suite 1204, Miami, Florida 33130. 8. Except as otherwise provided herein, the failure of any noticed person or entity to file an objection, on or before the Objection Deadline, to either the Motion, results of the Auction, the Sale or National Litho s consummation and performance of the transactions contemplated thereby, shall be a bar to the assertion of any such objection by such noticed person or entity. 9. National Litho is authorized and empowered to take such steps, incur such costs and expenses, and do such things as may be reasonably necessary to implement and effect the terms and requirements of this Order, with such costs and expenses to receive administrative claim treatment. 10. Notwithstanding anything to the contrary contained in the Motion, this Order or otherwise adduced at the Sale Hearing: a. GECC shall be deemed a Qualified Bidder for purposes of the Auction, the Sale Hearing, and in connection with the subject matter hereof. 3
b. As a Qualified Bidder, GECC shall not have to meet any of the participation requirements and shall be entitled to credit bid purchase one or more items of its Equipment listed on Exhibit 1 hereto by credit bidding any portion or all of its allowed claims. c. All cash proceeds from a third party cash sale related to GECC equipment shall be paid directly to GECC, except as provided in paragraph 11 below. d. GECC s consent to allow National Litho to sell its leased equipment may be revoked and any time prior to the Auction and in no way affects the character of the leases as leases between National Litho and GECC. 11. All amounts due the Miami-Dade County Tax Collector, including estimated 2012 ad valorem taxes, shall be paid at the closing on the sale and from the proceeds of the sale of the specific piece of Equipment. If the National Litho and the Tax Collector have not agreed to the amounts due on a specific piece of Equipment, then either the gross proceeds from the sale of that Equipment, or an amount sufficient to cover the amounts claimed to be owed by the Tax Collector, whichever is greater, shall be held by the Debtor pending agreement of the parties or a further order of this Court. 12. The Court shall retain jurisdiction over any matter or dispute arising from or relating to the implementation of this Order. 4
EXHIBIT A THE AUCTION PROCEDURES (a) (b) (c) Assets. The Auction will include all Equipment set forth on Exhibit 1 hereto; except, however, that General Electric Capital Corporation ( GECC ) reserves the absolute right to withdraw from the Auction any or all of the equipment in which it has an ownership or security interest. In the event that GECC elects to exercise its right to withdraw its equipment from the Auction, GECC will provide notice to Debtor s counsel of such withdrawal within 2 hours of the Auction. Further, in the event that GECC elects to exercise its right to withdraw its equipment from the Auction, GECC will retain responsibility for the payment of ad valorem taxes owed with respect to said equipment. Pricing. The Auction will be conducted on an asset-by-asset basis or in lots or combinations of lots as determined by National Litho in its discretion, after consultation with the designated representative of the Official Committee of Unsecured Creditors (the Committee ). National Litho will set the initial bid on each item of Equipment provided, however, that purchase offers described on Exhibit 1 may serve as the minimum bid respecting such items of equipment. The immediately succeeding bid must be five (5%) percent higher than the existing Bid and thereafter in increments of five (5%) percent, unless otherwise determined by the Debtor in its sole discretion. Sales based on cash bids, but not sales based on credit bids, are subject to a 10% buyer s premium. Participation Requirements. Except as otherwise set forth in the bidding procedures order or herein, any person that wishes to participate in the auction must become a Qualified Bidder. The purchasers who have submitted the Bids on Exhibit 1 are all deemed Qualified Bidders and each such bid is binding and without contingencies (financing, due diligence, or otherwise). As a prerequisite to becoming a Qualified Bidder, a potential Qualified Bidder and the Committee must deliver to the satisfaction of National Litho: (i) (ii) A list of Equipment for which the bidder seeks to bid and the price offered; and Sufficient information, as requested by National Litho, in consultation with the Committee, to allow National Litho and the Committee to determine that the potential Qualified Bidder has the financial wherewithal and any required authorizations to close the sale, including without limitation, such entity s current audited (if applicable) financial statements and a good faith, cash deposit equal to ten (10%) of the bid (the Good Faith Deposit ) to be delivered to National Litho s counsel via wire transfer or readily available funds. 5
In addition, GECC is deemed a Qualified Bidder on its collateral and is exempt from all requirements and prerequisites imposed on such bidders, including but not limited to the need for a Good Faith Deposit and the Buyer s Premium. (d) Auction. The auction shall commence on September 19, 2012, ( Auction ) at 10:00 a.m. Only Qualified Bidders will be permitted to participate in the auction. The auction shall be conducted on the following terms: (i) (ii) (iii) (iv) (v) (vi) Except as otherwise provided herein, in order to participate in the auction, each Qualified Bidder shall, to the satisfaction of National Litho and the Committee, register its acknowledgement of the auction terms (which shall include a statement identifying any connection the Qualified Bidders has to National Litho). Each piece of Equipment will be auctioned either separately or in lots determined by National Litho at the Auction. During the Auction, bidding shall begin at the existing bid price where a bid has been made or in an amount set by National Litho where no bid has been made (as set forth in the Motion) and subsequently continue in minimum bid increments of 5% of the suggested purchase price. Notwithstanding any bidding conducted in lots, a purchase price will be allocated to each individual item of Equipment before the auction is concluded. None of the bids, including any of the deemed qualified Bids set forth in the Motion may contain any financing, due diligence or material adverse change contingencies and the bid of any Successful Bidder will be binding whether or not (a) the Successful Bidder has obtained financing or completed its due diligence investigation, or (b) a material adverse change has occurred. Pre-Auction Bidding. All bidding after the Minimum Bid for the Equipment will occur only at the Auction and only pursuant to the procedures set forth herein. The auction may be either transcribed or videotaped. The auction shall be conducted openly and all creditors, parties in interest and other parties who have expressed an interest in the Equipment will be permitted to attend. Terms of Sale. The Equipment are being sold, (i) AS IS, WHERE IS, AND WITH ALL FAULTS AND WITH NO LICENSE, and National Litho expressly disclaims all warranties, including (but not limited to) warranties of merchantability, warranties of noninfringement, and fitness for a particular purpose or use, and (ii) THERE IS NO WARRANTY RELATING TO QUIET ENJOYMENT, OR THE LIKE IN THE DISPOSITION OF ANY OF THE ASSETS. Bidders are advised, and by submitting a bid 6
each bidder is deemed to acknowledge, that National Litho and each of its respective directors, officers, managers, employees, agents, advisors and attorneys have no knowledge with respect to, and have no obligation to investigate, the merchantability or fitness for any particular purpose or use of any of the Equipment. NO WARRANTY OR REPAIR PROGRAM FOR THE EQUIPMENT IS BEING OFFERED AS PART OF THE SALE. (vii) (viii) (ix) (x) (xi) (xii) Bid(s); Backup Bid(s). Upon the conclusion of the Auction, National Litho, after consultation with the Committee s designated representative, shall (a) identify and certify the bid or bids that constitutes the highest or best offer or offers for the Equipment (each bid a Prevailing Bid and each person submitting such bid a Successful Bidder ) and (b) identify and certify the bid or bids that constitute the next highest or best offer or offers for the Equipment (each bid a Backup Bid and each person submitting such a bid a Backup Bidder ), and, in each case, notify the Successful Bidder(s) and Backup Bidder(s). For the purpose of evaluating which bid or bids constitutes the highest or best offer or offers, a credit bid shall equate dollar for dollar to a cash bid, and any increase in cost or loss of Buyer s Premium shall bear no consequence. Within twenty-four (24) hours of the conclusion of the auction Period and prior to the hearing on the sale, the Successful Bidder shall deliver to a third party escrow to be determined by the Court or agreed to by the parties the purchase price in full by wire transfer. No later than two (2) business days after the hearing on the sale, National Litho shall be permitted to close each sale with each Successful Bidder. No Successful Bid will be subject to higher and better offers. The highest cash bid at the Auction is the Successful Bid; provided, however, cash shall include any credit bid submitted by any secured creditor on account of its secured claim. All sales of Equipment shall be, subject to section 363(b)(1)-(5) of the Bankruptcy Code, free and clear of all third party liens, claims, encumbrances and security interests (each an Encumbrance and collectively, Encumbrances ); provided, that such Encumbrances shall attach to the net proceeds of the sale of such Equipment with the same enforceability, validity, and priority as such Encumbrances had against the Equipment. For any sale of Equipment that is subject to a lien that secures an allowed claim, unless the court for cause orders otherwise, the holder of such claim may bid at such sale, and, if the holder of such claim purchases such property, such holder may offset the amount of the 7
credit bid against the purchase price of such property on a dollar-fordollar basis. (e) Closing Deadline Asset Removal Deadline. The sale(s) contemplated by the Successful Bid(s) shall be closed within two (2) business days after the hearing to approve the sale or by such other deadline agreed to between National Litho and the Successful Bidder(s) (the Closing Deadline ). AtExcept with respect to prevailing credit bids by one or more secured creditors, and unless otherwise provided herein, at the closing of the sale of any Equipment, the purchaser shall (a) pay National Litho with a wire transfer for the full outstanding cash balance of the purchase price and National Litho shall deliver a bill of sale. Any Successful Bidder that is purchasing any Equipment shall be required to remove such Equipment from National Litho s facility by no later than ten (10) days after the auction or by such other deadline agreed to between National Litho and such Successful Bidder and shall pay all costs of removal. Each Successful Bidder shall be solely responsible for any and all fees, costs and expenses associated with any purchased Equipment on and immediately after that Deadline, including, without limitation, any costs and expenses attributable to rent and related expenses for the period of time following the Closing Deadline (regardless of when payment of such rent became due or related expenses of National Litho were incurred in connection with such Non- Core Asset following the Closing Deadline). Each Successful Bidder must further agree to indemnify National Litho for any loss or damages to National Litho s real or personal property caused in connection with the removal of any purchased Equipment, and provide proof of insurance or bond, in form and substance satisfactory to National Litho, for itself or any agent used by the purchaser for removal of any Equipment. Each Sucessful Bidder shall further be responsible for: (i) properly containerizing any oil or liquids and removing them from the premises; (ii) ensuring that the area from which the Equipment is left in broom swept condition and void of any debris; (iii) ensuring that any interconnecting wires will be disconnected at the press and not removed by the Successful Bidder; (iv) ensuring that; (v) ensuring that any disconnects of electrical, gas or water are to be properly capped by licensed personnel; and (vi) ensuring that any ventilation or duct work is to be capped and sealed. (f) (g) No Break-Up Fee. No Bidder shall be entitled to any break-up fee in connection with the Auction or Auction Procedures set forth herein. Customs and Taxes. Purchasers of the Equipment shall be solely responsible for paying any customs duties and taxes due and owing on any of the Equipment including, without limitation, any sales taxes, stamp taxes, recording taxes or transfer taxes. The payment of ad valorem taxes owed on the Equipment shall be made at closing, or as otherwise provided by the Court s Order authorizing the Auction. 8
(h) (i) (j) Notice. National Litho will serve this Motion on all persons who have previously shown an interest in purchasing the Equipment or whom National Litho has identified as a potential bidder. The notice will include, among other things, a listing of the Equipment, the associated suggested pricing, and a copy of the Order specifying the date and time of the Auction, the participation requirements, and acknowledgement that GECC may withdraw from the Auction certain items of Equipment. National Litho may publish a notice of the Auction in at least one auction section of a widely circulated newspaper and at least one appropriate trade journal or similar publication of its choosing at least five (5) business days prior to the Auction. Return of Good Faith Deposit. All Good Faith Deposits will be held in a non-interest-bearing account and will be returned to any Qualified Bidder who is not a Successful Bidder; provided, however, that if a Successful Bidder fails to consummate a transaction within five (5) days of the conclusion of the Auction with respect to a Successful Bid (other than as a result of the failure of National Litho to convey title to the applicable Non- Core Asset to the applicable Successful Bidder), National Litho will not have any obligation to return the Good Faith Deposit and such Good Faith Deposit shall irrevocably become the property of National Litho. Modification. Subject to Court approval at the hearing to approve the Auction results and the Sale, and with the sole exception of secured creditor credit bids, National Litho may, after consultation with the Committee s designated representative, determine, in its reasonable business judgment, which bid or bids, if any, constitute the highest or otherwise best offer(s) for the Equipment, and may reject at any time any bid that, in National Litho s discretion, is (a) inadequate or insufficient, (b) not in conformity with the requirements of the Auction Procedures or the terms and conditions of sale, or (c) contrary to the best interests of National Litho. National Litho may move the Court prior to the Auction and the Sale Hearing seeking to, (i) may impose such other bidding procedures and terms and conditions as it may determine are in the best interests of National Litho and other parties in interest, and (ii) modify or amend these Auction Procedures. 9
EXHIBIT 1 Equipment Proposed Equipment Sales Lender/Secured Creditor Location Proposed Sales Price (Subject to Higher/ Better Offers and Buyer s Premium) 2003 Ryobi 524 HE, s/n 1080 None Miami Lakes $60,000.00 2000 Muller Presto 1550 Presto Saddler Stitcher s/n NN4082, including 3 Knife Trimmer Model 1522, 3 Compact Twin Feeders Model 1551 (6 Pockets) Great Atlantic Capital Graham property $35,000.00 2002 MBO B30 444c, s/n 13819, 16 page Great Atlantic Capital Graham property $12,000.00 1999 Muller Bravo T6 Pockets, no Cover Feeder, 3 Knife Trimmer 2008 Komori Lithrone, LS640/C Series 4045, s/n 430 2007 Saber 46"6 116 cm paper cutter s/n 616697 2002 MBO Model B26 s/n 14351 General Electric Capital Corporation General Electric Capital Corporation Graham property $35,000.00 Miami Lakes $1,025,000.00 Great Atlantic Capital Graham property $15,000.00 Great Atlantic Capital Graham property $10,000.00 Harris 110 5 Color General Electric Capital Hialeah $75,000.00 Harris 110 8 Color All Points Capital Hialeah $125,000.00 Goss World 16E None Miami Lakes $250,000 10