IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ELECTROGLAS, INC., et al., 1 Debtors.

--------------------------------~

Chapter 11 Case No. 09-12416 (PJW) Jointly Administered Re: D.I. 512, 591

FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING DEBTORS' PLAN OF LIQUIDATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE Electroglas, Inc., and Electroglas International, Inc. the debtors (collectively, the "Debtors") in these Chapter 11 cases, having proposed and filed with the Court their Plan of Liquidation Under Chapter 11 of the Bankruptcy Code (the "Plan") dated April8, 2010 at Docket Number 512; and the Debtors having timely disseminated copies of the Plan, the accompanying Disclosure Statement, and solicitation materials in connection therewith to, among others, the known holders of claims against, and equity security interests in, the Debtors and the Office of the United States Trustee, pursuant to and in accordance with this Court's Order entered on April 13, 2010 at Docket Number 513 approving the Debtors' Disclosure Statement under section 1125 of the Bankruptcy Code; and the Debtors having made certain non-material modifications to the Plan as reflected in the Amended Plan, which modifications are hereby approved pursuant to section 1127 of the Bankruptcy Code and Rule 3019 of the Federal Rules of Bankruptcy Procedure, and the Amended Plan having been filed with this Court on May 26, 2010 (the "Amended Plan"); and the confirmation hearing having been held before this Court on May 26, 2010, and the appearance of all interested parties having been noted on the record (the

The Debtors are Electroglas, Inc. and Electroglas International, Inc.

#12617539 v7

record (the "Hearing"); and this Court having heard the statements of counsel in support of and in opposition to confirmation of the Amended Plan; and this Court having considered all testimony presented and evidence admitted at the Hearing; and the Court having taken judicial notice of the docket of the Chapter 11 cases maintained by the Clerk of the Court, and all pleadings and other documents filed, orders entered, and evidence adduced at the hearings held before the Court during the pendency of these Chapter 11 cases; and after due deliberation and sufficient cause appearing therefor, the Court hereby makes the following findings of fact and conclusions of law, under Federal Rule of Civil Procedure 52, as made applicable by Rules 7052 and 9014 ofthe Federal Rules of Bankruptcy Procedure:

Recitals
A. The Debtors, by and through OMNI Management Group, LLC ("Omni" or the

"Voting Agent"), commenced the plan solicitation process on or about April 19, 2010, by distributing a solicitation package (the "Solicitation Package(s)") that included the Plan and the Disclosure Statement with Respect to the Plan (the "Disclosure Statement"), notice of the Confirmation Hearing, a ballot, a postage paid return envelope and a copy of the Order (A) Approving the Disclosure Statement, (B) Fixing the Voting Record Date, (C) Approving Solicitation and Voting Procedures With Respect to Debtors' Chapter 11 Plan, (D) Approving Form of Solicitation Package and Notices, and (E) Scheduling Certain Dates in Connection Therewith (D.I. No. 513) (the "Disclosure Statement Order") to all parties entitled to vote to accept or reject the Plan. The Disclosure Statement Order established (i) April 8, 2010 (the "Voting Record Date"), as the record date for determining (a) the creditors and interest holders entitled to receive the Solicitation Package pursuant to the Solicitation Procedures (as defined herein); (b) the creditors and interest holders entitled to vote to accept or reject the Plan; and

-2#12617539 v7

(c) whether claims or interests have been properly transferred to an assignee pursuant to Bankruptcy Rule 3001(e) such that the assignee can vote as the holder ofthe claim or equity interest, and (ii) May 19, 2010 (the "Voting Deadline"), as the voting deadline for creditors and interest holders entitled to vote to accept or reject the Plan, or their nominees (collectively, the "Eligible Voters"), to submit votes to accept or reject the Plan. B. The transmission of the Solicitation Packages to holders of Claims and Interests

entitled to vote to accept or reject the Plan was made pursuant to the procedures (the "Solicitation Procedures") set forth in the Disclosure Statement Order. C. On April 13, 2010, the Debtors filed the Disclosure Statement and Plan (D.I. No.

512), which Plan and Disclosure Statement revised earlier versions of such document(s) filed on March 4, 2010. On April23, 2010 and April27, 2010, the Debtors filed four Affidavits of Service (the "Affidavits of Service") on behalf ofOmni (D.I. Nos. 546, 547, 548 and 549). The Affidavits of Service detailed all service matters related to solicitation of the Plan, including the Affidavit of Service of the Notice of (A) Hearing to Confirm Plan of Reorganization, (B) Objection and Voting Deadlines, (C) Solicitation and Voting Procedures and (D) Certain Other Information (D.I. No. 525). On May 24,2010, the Debtors filed the Declaration of Brian Osborne ofOmni Regarding The Tabulation of and Results of Voting With Respect To Debtors' Plan of Liquidation Under Chapter 11 ofthe Bankruptcy Code (D.I. No. 589) (the "Voting Declaration").

Findings of Fact and Conclusions of Law2

Capitalized terms used but not otherwise defined herein shall have the same meanings ascribed to them in the Amended Plan. If there is any direct conflict between the terms of the Amended Plan and the terms of this Order, the terms of this Order shall control. Any and all findings of fact shall constitute findings of fact even ifthey are stated as conclusions of law, and any and all conclusions of law shall constitute conclusions of law even if they are stated as findings of fact.

-3#12617539 v7

D.

This Court has jurisdiction over the Debtors, their Chapter 11 Cases and these

proceedings pursuant to 28 U.S.C. Sections 1334 and 157(a). This is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2). Venue in the District of Delaware was proper at the

Commencement Date and continues to be proper under 28 U.S.C. Sections 1408 and 1409. E. The Amended Plan complies with each applicable provision of the Bankruptcy

Code, for the reasons set forth below. F. The Solicitation Packages were transmitted and served in compliance with the

Bankruptcy Code, the Solicitation Procedures, the Disclosure Statement Order, the Bankruptcy Rules and applicable nonbankruptcy law. Such transmittal and service and the Solicitation Procedures were adequate and sufficient. Adequate and sufficient notice of the Confirmation Hearing was given in compliance with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Statement Order, and no other or further notice is or shall be required. G. The period during which the Debtors solicited acceptances to the Plan was a

reasonable period of time for Eligible Voters to make an informed decision to accept or reject the Plan. Votes for acceptance and rejection of the Plan were solicited in good faith and such solicitation complied with sections 1125 and 1126 ofthe Bankruptcy Code, Rules 3017 and 3018 of the Bankruptcy Rules, the Disclosure Statement Order, all other applicable provisions of the Bankruptcy Code and all other applicable rules, laws and regulations. All procedures used to distribute solicitation materials to the Eligible Voters and to tabulate the ballots were fair and conducted in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules and all other applicable rules, laws and regulations. H. In accordance with sections 1126 and 1129 ofthe Bankruptcy Code, the Amended

Plan has been duly accepted in writing by each class of creditors whose acceptances are required

-4#12617539v7

by law for confirmation of the Amended Plan (i.e., Classes 2, 3, 4, 5A, 5B and 6), with the exception of Class 1, which is unimpaired and is deemed to have accepted the Amended Plan, and with the exception of Classes 7 and 8, which will receive no distribution under the Amended Plan and are deemed to reject the Amended Plan. In accordance with sections 1122(a) and

1123(a)(l) ofthe Bankruptcy Code, the Amended Plan designates separate classes of Claims and Equity Interests, each of which contains only Claims or Equity Interests that are substantially similar to the other Claims or Equity Interests within that class. A reasonable basis exists for the classifications in the Amended Plan.
I.

In accordance with sections 1123(a)(2), 1123(a)(3) and 1123(a)(4) of the

Bankruptcy Code, the Amended Plan specifies each class that is unimpaired, the Amended Plan identifies and specifies the treatment of each class that is impaired thereunder, and the Amended Plan provides the same treatment for each Claim or Equity Interest within a particular class, unless the holder of a particular Claim or Equity Interest has agreed to a less favorable treatment of such Claim or Equity Interest.

J.

In accordance with section 1123(a)(5) ofthe Bankruptcy Code, the Amended Plan

provides adequate means for its implementation, including, without limitation, (a) the appointment of the Plan Administrator as of the Effective Date with those duties and responsibilities enumerated in Section 9.6 of the Amended Plan, and (b) provisions for the Debtors to (i) wind up their affairs, (ii) liquidate, by conversion to Cash or other methods, any remaining assets of their bankruptcy estates, as expeditiously as reasonably possible, (iii) enforce and prosecute claims, interests, rights and privileges ofthe Debtors and their bankruptcy estates, including, without limitation, Causes of Action, (iv) resolve Disputed Claims, (v) administer the Plan and take such actions as are necessary to effectuate the Plan, and (vi) file appropriate tax

-5#12617539v7

returns, all pursuant to Section 9.1 ofthe Amended Plan. K. Section 1123(a)(6) of the Bankruptcy Code is not applicable here as the Debtors

are not issuing any publicly-traded securities under the Amended Plan.
L.

In accordance with section 1123(a)(7) ofthe Bankruptcy Code, the Amended Plan

contains only provisions that are consistent with the interests of creditors, equity security holders and with public policy with respect to the selection of the Plan Administrator who shall serve, on and after the Effective Date, as the sole officer and director of the Debtors and with respect to Mr. Thomas Brunton, the former Chief Financial Officer of the Debtors, who will assist with implementation ofthe Amended Plan and winding down the Debtors' affairs. M. In accordance with section 1123(b)( 1) of the Bankruptcy Code, Article 4 of the

Amended Plan impairs or leaves unimpaired, as the case may be, each class of Claims and Equity Interests. N. In accordance with section 1123(b)(2) ofthe Bankruptcy Code, Section 8.1 ofthe

Amended Plan provides that all executory contracts and unexpired leases that exist between the Debtors and any Person or Entity shall be deemed rejected by the Debtors on the Confirmation Date and effective as of the Confirmation Date, except for any executory contract or unexpired lease (i) that has been assumed or rejected pursuant to an order of the Bankruptcy Court entered prior to the Confirmation Date, or (ii) as to which a motion for approval of the assumption or rejection of such executory contract or unexpired lease has been filed and served prior to the Confirmation Date.

0.

In accordance with section 1123(b)(3) of the Bankruptcy Code, Section 10.3 of

the Amended Plan provides any and all Causes of Action accruing to the Debtors and Debtors in Possession shall be preserved and retained by the Debtors. who shall have the exclusive right

-6#l2617539v7

(including through the Plan Administrator) to enforce any such Causes of Action. P. In accordance with section 1123(b)(5) of the Bankruptcy Code, Article 4 of the

Amended Plan modifies or leaves unaffected, as the case may be, the rights of holders of Claims in each class.

Q.

In accordance with section 1123(b)(6) of the Bankruptcy Code, the Amended

Plan includes only provisions that are not inconsistent with applicable provisions of the Bankruptcy Code. R. In accordance with section 1129(a)(l) ofthe Bankruptcy Code, the Amended Plan

properly identifies the Debtors as plan proponents and complies with all applicable provisions of the Bankruptcy Code and applicable law. S. In accordance with section 1129(a)(2) ofthe Bankruptcy Code, the Debtors have

complied with all applicable provisions of the Bankruptcy Code, including, without limitation, sections 1125 and 1126 and Federal Rules of Bankruptcy Procedure 3017, 3018 and 3019. The solicitation of acceptances of the Plan was in compliance with all applicable laws and rules governing the adequacy of disclosure in connection with such solicitation, and solicited after disclosure to the holders of Claims and Equity Interests of adequate information as defined in section 1125 ofthe Bankruptcy Code. T. In accordance with section 1129(a)(3) ofthe Bankruptcy Code, the Amended Plan

has been proposed in good faith and not by any means forbidden by law. In determining that the Amended Plan has been proposed in good faith, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases and the formulation of the Amended Plan. The Chapter 11 Cases were filed and the Amended Plan was proposed with the legitimate and honest purposes of liquidating the Debtors and expeditiously making distributions

-7#12617539v7

to the Debtors' creditors. The Debtors, the Official Committee of Unsecured Creditors (the "Committee"), and their respective agents, accountants, business consultants, representatives, attorneys and advisors, through their participation in arms-length negotiations and preparation of the Amended Plan and related documents, have participated in the Chapter II Cases in good faith and in compliance with the applicable provisions ofthe Bankruptcy Code. U. The Amended Plan has the support of the Committee. Consistent with the

overriding purpose of Chapter II of the Bankruptcy Code, the Amended Plan enables holders of Allowed Claims to potentially realize reasonable recoveries under the circumstances. V. In accordance with section II29( a)( 4) of the Bankruptcy Code and section 2.3 of

the Amended Plan, any payment made or promised by the Debtors or by any person acquiring property under the Amended Plan, for services or for costs and expenses in, or in connection with, the Chapter I1 Cases, or in connection with the Amended Plan and incident to the Chapter 11 Cases, has been disclosed to the Court and approved by the Court as reasonable. If any such payment is to be made to a professional retained pursuant to order of this Court and such payment is to be fixed after confirmation of the Amended Plan for pre-Effective Date services, such payment is subject to approval of the Court as reasonable, pursuant to sections 330 and 331 of the Bankruptcy Code. W. The Debtors have disclosed the identity of the Plan Administrator proposed to

serve from and after the Effective Date. Thomas Brunton, Debtors' former Chief Financial Officer, shall continue to serve as a consultant to assist with Amended Plan implementation and winddown efforts, as set forth in section 9.9 of the Amended Plan. The Debtors have satisfied section 1129(a)(5) ofthe Bankruptcy Code. X. The Amended Plan does not contain any rate changes subject to the jurisdiction of

-8# 12617539 v7

any governmental regulatory commission, thus satisfying section 1129(a)(6) of the Bankruptcy Code. Y. In accordance with section 1129(a)(7) of the Bankruptcy Code, with respect to

each impaired class of Claims or Equity Interests, each holder of a Claim or Equity Interest in such class has accepted or is deemed to have accepted the Amended Plan, or will receive or retain under the Amended Plan on account of such Claim or Equity Interest, property of a value, as of the Effective Date of the Amended Plan, that is not Jess than the amount that such holder would so receive or retain if the Debtors were liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code. See Disclosure Statement at Exhibit B. Z. The holders of Equity Interests in Classes 7 and 8 are deemed to have rejected the Notwithstanding the lack of compliance with section 1129(a)(8) of the

Amended Plan.

Bankruptcy Code, the Amended Plan is confirmable because, as more fully set forth in this Order, the Amended Plan satisfies section 1129(b) of the Bankruptcy Code with respect to Classes 7 and 8. AA. In accordance with section 1129(a)(9) of the Bankruptcy Code, except to the

extent that the holder of a particular Claim has agreed to different treatment of such Claim, the Amended Plan provides that: a. with respect to a Claim of a kind specified in sections 507(a)(2) or

507(a)(3) of the Bankruptcy Code, the holder of such Claim, if any, will receive on account of such Claim, Cash equal to the allowed amount of such Claim on the later of the allowance date and the Effective Date, or as soon as practicable thereafter; b. with respect to a class of Claims of a kind specified in sections

507(a)(l), 507(a)(4), 507(a)(5), 507(a)(6) or 507(a)(7) of the Bankruptcy Code, each holder of a

-9# 12617539 v7

Claim, if any, of such class will receive Cash equal to the allowed amount of such Claim on the later of the allowance date and the Effective Date, or as soon as practicable thereafter; and c. with respect to a Claim of a kind specified in section 507(a)(8) of

the Bankruptcy Code, except to the extent that the holder of such a Claim has been paid by the Debtors prior to the Effective Date or agrees to a different treatment, each holder of such Claim, if any, shall receive, in full and complete settlement and satisfaction of its Claim, at the option of the Debtors, (a) Cash in an amount equal to such Claim on the later of the Effective Date and the date such Claim becomes an Allowed Claim, or as soon thereafter as is practicable, or (b) in accordance with section 1129(a)(9)(C) of the Bankruptcy Code, equal annual Cash payments commencing on the first anniversary of the Effective Date in an aggregate amount equal to such Allowed Claim, together with interest on any outstanding balance from the Effective Date at the applicable rate under non-bankruptcy law, over a period not exceeding five years from the Commencement Date. BB. In accordance with section 1129(a)(IO) ofthe Bankruptcy Code, at least one class

of Claims that is impaired under the Amended Plan has accepted the Amended Plan determined without including any acceptance of the Amended Plan by an "insider" holding a Claim in such class. Specifically, Classes 2, 3, 4, 5A, 5B and 6 voted to accept the Amended Plan by the requisite number and dollar amounts pursuant to section 1126(c) of the Bankruptcy Code, not counting the votes of any "insiders" in such classes. CC. The Amended Plan complies with section 1129(a)(ll) of the Bankruptcy Code

based on evidence introduced at the Hearing that demonstrates that the Debtors reasonably anticipate that they will have, on the Effective Date, sufficient Available Cash to satisfy those Administrative Expense Claims, Priority Tax Claims (if any), Professional Compensation and

-10#l2617539v7

Reimbursement Claims and Other Priority Claims which are Allowed Claims. DO. In accordance with section 1129(a)(l2) ofthe Bankruptcy Code, all fees payable

under 28 U .S.C. Section 1930 have been paid or the Amended Plan provides for the payment of all such fees on or as soon as practicable after the Effective Date of the Amended Plan. The Debtors have adequate means to pay such fees. EE. The Amended Plan does not address the continuation of retiree benefits since the

Debtors are not a party to any retirement benefit plans as defined in section 1114 of the Bankruptcy Code, thereby rendering compliance with section 1129(a)(l3) of the Bankruptcy Code unnecessary. FF. The Debtors are not required by a judicial or administrative order, or by statute, to

pay a domestic support obligation. Accordingly, section 1129(a)(l4) of the Bankruptcy Code is inapplicable to these Chapter II Cases. Furthermore, the Debtors are not individuals, and, in view ofthis, section 1129(a)(l5) ofthe Bankruptcy Code is also inapplicable to these Chapter II Cases. GG. In accordance with section 1129(b)(l) of the Bankruptcy Code, the Amended

Plan does not unfairly discriminate against Classes 2 through 8, inclusive. The legal rights of holders of Claims in Classes 2 through 6, inclusive and the holders of Equity Interests (Classes 7 and 8) are treated consistently with the treatment of other classes whose legal rights are substantially similar, if any, and such holders shall not receive more than they are legally entitled to receive for their respective Claims and Equity Interests. HH. The Amended Plan is fair and equitable as to Classes 2 through 8, inclusive and,

therefore, satisfies Code section 1129(b)(2)(A) and (C)(ii), as applicable. Although all Equity Interests will be canceled and extinguished and the holders of Equity Interests in Classes 7 and 8

-11#12617539v7

will not receive or retain any property under the Amended Plan, there are no classes junior to such classes that receive or retain any property under the Amended Plan. II. The Amended Plan is the only plan that has been filed in these Chapter 11 Cases

that has been found to satisfy the requirements of subsections (a) and (b) of section 1129 ofthe Bankruptcy Code. Accordingly, the requirements of section I129(c) of the Bankruptcy Code have been satisfied.

JJ.

Pursuant to section 1129(d) of the Bankruptcy Code, the principal purpose of the

Amended Plan is not the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act of I933. Accordingly, the Amended Plan satisfies the requirements of section II29(d) ofthe Bankruptcy Code. a. The releases, injunctions and limited exculpation of claims

described in Sections I 0.4, I 0.6 and 13.4 of the Amended Plan and in this Order constitute good faith compromises and settlements of the matters covered thereby. Such compromises and

settlements are made in exchange for consideration and are in the best interest of the holders of Claims, are fair, equitable, and reasonable and are integral elements of the Debtors' liquidation and resolution ofthe Debtors' Chapter 11 Cases in accordance with the Amended Plan.
KK.

The conditions precedent to the Effective Date set forth in Section 11.1 of the

Amended Plan have either been satisfied, waived, or the Debtors have demonstrated will be satisfied by the Effective Date.
LL.

The modifications to the Plan, as filed on May 26, 2010 at Docket Number 590,

constitute technical changes and do not materially adversely affect or change the treatment of any Claims or Equity Interests. Accordingly, pursuant to Bankruptcy Rule 30 I9, such

modifications do not require additional disclosure under section 1125 of the Bankruptcy Code or

-12# 12617539 v7

re-solicitation of votes under section 1126 of the Bankruptcy Code, and they do not require that holders of Claims be afforded an opportunity to change previously cast acceptances or rejections on the Plan.

Confirmation Order
Based upon the foregoing findings of fact and conclusions of law, it is hereby Ordered and Decreed that:

1.

The Amended Plan meets all of the requirements of section 1129(a) of the

Bankruptcy Code save only section 1129(a)(8). The Amended Plan satisfies section 1129(b) of the Bankruptcy Code and, accordingly, the Amended Plan, and each of its provisions, is hereby confirmed in all respects. All objections and responses to, and statements and comments

regarding, the Amended Plan, to the extent not already resolved or withdrawn pursuant to representations made on the record at the Hearing, shall be, and hereby are, overruled. 2. 3. The record of the confirmation Hearing is closed. The solicitation of votes to accept or reject the Plan from Holders of

Impaired Claims as ofthe Voting Record Date satisfies Bankruptcy Rule 3018(a). 4. The injunctions and releases set forth in Sections 10.4 and 10.6 of the

Amended Plan are hereby approved. 5. hereby approved. 6. Pursuant to section 1142(b) of the Bankruptcy Code, the Debtors are The limited exculpation set forth in section 13.4 of the Amended Plan is

authorized and directed to execute and deliver all documents and agreements, and to take any and all lawful actions, necessary to consummate and implement the Amended Plan and the transactions contemplated therein.

-13# 12617539 v7

7.

Based upon the record before the Court, the Debtors and their agents and

counsel have solicited votes on the Plan in good faith and in compliance with the applicable provisions ofthe Bankruptcy Code and are entitled to the protections afforded by section 1125(e) of the Bankruptcy Code and the exculpatory and injunctive provisions set forth in the Amended Plan. 8. On the Effective Date, all property of the estates of the Debtors, including

all claims and Causes of Action and any property acquired by the Debtors under or in connection with the Amended Plan, shall vest in each respective Debtor free and clear of all Claims, Liens and other encumbrances, in each case consistent with the terms ofthe Amended Plan. From and after the Effective Date, without further Bankruptcy Court approval and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Amended Plan, the Debtors through the Plan Administrator may: (i) use, sell, transfer,

assign, abandon or otherwise dispose of any of the Debtors' remaining assets for the purpose of liquidating and converting such assets to Cash, making distributions and fully consummating the Amended Plan; (ii) compromise or settle any Claims or Interests; and may (iii) pay the charges that it incurs on or after the Effective Date for Plan Administrator expenses, professionals' fees, disbursements, expenses or related support services (including the fees related to the preparation of applications on account of Professional Compensation and Reimbursement Claims) without application to this Court. 9. The Plan Administrator, on behalf of the Debtors, is authorized to employ,

without further order of this Court, employees and professionals to assist in carrying out its duties and may compensate and reimburse the expenses of these employees and professionals without further order of this Court from the Plan Administrator Reserve in accordance with the

-14# 12617539 v7

Amended Plan. 10. On the Effective Date, all agreements and other documents evidencing the

Claims or rights of any holder of a Claim against the Debtors, including options or warrants to purchase Equity Interests, obligating the Debtors to issue, transfer or sell Equity Interests or any other capital stock of the Debtors, shall be cancelled and immediately after all remaining assets of the Debtors' estates are liquidated and distributed, and the Plan Administrator completes the wind-up of the Debtors' estates and the Plan is fully consummated, the Debtors shall be dissolved; provided, however, that the capital stock of the Debtors will not be cancelled prior to their dissolution. Notwithstanding the foregoing, the Debtors shall be deemed dissolved and their business operations withdrawn for all purposes without any necessity of filing any document, taking any further action or making any payment to any governmental authority in connection therewith. 11. Pursuant to section 1146(c) of the Bankruptcy Code, and as provided for

in Section 13.3 of the Amended Plan, the making or assignment of any lease or sublease, or the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with the Amended Plan, shall not be subject to any stamp or similar tax. 12. This Order shall be binding upon and govern the acts of all Persons and

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, 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. Each and every federal, state, and local government agency is hereby directed to accept any and

-15#12617539v7

all documents and instruments necessary, useful, or appropriate (including Uniform Commercial Code financing statements) to effectuate, implement, and consummate the transactions contemplated by the Amended Plan and this Order without payment of any recording tax, stamp tax, transfer tax, or similar tax imposed by state or local law. 13. In accordance with Section 2.3 ofthe Amended Plan, any Person or Entity

seeking allowance of compensation and reimbursement of expenses for professional services rendered to the Debtors, to the Committee or in relation to the Chapter 11 Cases pursuant to sections 327, 328, 331, 503 and/or 1103 of the Bankruptcy Code, shall file with the Court an application for allowance of compensation and reimbursement of expenses incurred on or before

May 26, 2010 and serve such application on, among others, counsel to the Plan Administrator
and the Office of the United States Trustee, no later than twenty (20) days after the occurrence of the Effective Date. 14. The appointment of Howard Bailey as Plan Administrator under the

Amended Plan is hereby approved. 15. After the Confirmation Date but before "substantial consummation" ofthe

Amended Plan within the meaning of section 1101 (2) of the Bankruptcy Code, the Debtors may institute proceedings before the Bankruptcy Court pursuant to section 1127(b) of the Bankruptcy Code to remedy any defect or omission or reconcile any inconsistencies in the Amended Plan, the Disclosure Statement or this Order, and to take such other actions as may be necessary to carry out the purposes and effects of the Amended Plan, by filing a motion on notice to the United States Trustee, the Committee (to the extent in existence), the Noteholders and the 2002 List (defined below), and the solicitation of all creditors and other parties in interest shall not be required.

-16#12617539v7

16.

The bar date for the filing of Administrative Expense Claims (other than

for professional compensation and reimbursement of expenses incurred prior to the Effective Date and any Claims asserted under section 503(b )(9) of the Bankruptcy Code, for which a bar date has previously been set by Court order and has passed) shall be June 30, 2010 at 5:00p.m.
(ET).

Within five (5) business days of the entry of this Order, the Debtors shall serve a Notice

of Entry of Confirmation Order, which shall include, among other things, notice of the bar date for filing Administrative Claims, upon all known creditors of the Debtors. Any Administrative Expense Claim that is not timely filed on or before said bar date shall be disallowed in its entirety, and such claimant shall be forever barred, estopped, and permanently enjoined from asserting any Administrative Expense Claim against the Debtors and/or any of their assets or properties, and such claimant shall not be entitled to receive any distribution in these Chapter 11 Cases on account thereof. 17. Pursuant to section 1141 of the Bankruptcy Code, effective as of and

subject to the occurrence of the Effective Date and subject to the terms of the Amended Plan and this Order, all prior orders entered in the Chapter 11 Cases, all documents and agreements executed by the Debtors as authorized and directed thereunder, and all motions or requests for relief by the Debtors pending before the Court as ofthe Effective Date shall be binding upon and shall inure to the benefit ofthe Debtors. 18. This Court hereby retains jurisdiction of these Chapter 11 Cases pursuant

to, and for the purposes of, the Amended Plan and such other purposes as may be necessary and useful to aid the confirmation, consummation and implementation of the Amended Plan, to the extent that the Court may legally retain jurisdiction of such matters. All injunctions or stays provided for under Bankruptcy Code sections 105 or 362, or otherwise, and in existence on the

-17#12617539v7

Confirmation Date, shall remain in full force and effect until the Effective Date, unless the Amended Plan or this Order provides otherwise. 19. This Order shall constitute all approvals and consents required, if any, by

the laws, rules or regulations of any state or any other governmental authority with respect to the implementation or consummation of the Amended Plan and any documents, instruments or agreements thereto, and any other acts referred to in or contemplated by the Amended Plan and any documents, instruments or agreements thereto. 20. The Amended Plan and its provisions shall be binding upon the Debtors

and any holder of a Claim against or Equity Interest in the Debtors, including all governmental Entities, whether or not the Claim or Equity Interest of such holder is impaired under the Amended Plan and whether or not such holder or Entity has accepted the Amended Plan. The failure to reference any particular provision of the Amended Plan in this Order shall have no effect on the validity, binding effect and enforceability of such provision, and such provision shall have the same validity, binding effect and enforceability as every other provision of the Amended Plan. 21. If the Effective Date does not occur as provided in Section 11.1 of the

Amended Plan, this Order may be vacated by this Court in accordance with the provisions of such Section, provided that, notwithstanding the filing of a motion to vacate, this Order shall not be vacated if all of the conditions to consummation set forth in Section 11.1 of the Amended Plan are either satisfied or duly waived before this Court enters an order granting the relief requested in such motion. If this Order is vacated pursuant to Section 11.1, the Amended Plan shall be null and void in all respects, and nothing contained in the Amended Plan shall: (a) constitute a waiver or release of any Claims against or Equity Interests in the Debtors; (b)

-18#12617539v7

prejudice in any manner the rights of the holder of any Claim or Equity Interest in the Debtors; or (c) constitute an admission, acknowledgment, offer or undertaking by any Debtor or any other Entity with respect to any matter set forth in the Amended Plan. 22. The provisions of the Amended Plan and this Order, including the findings

of fact and conclusions of law set forth herein, are non-severable and mutually dependent. The classification of Claims and Equity Interests for purposes of any distributions to be made under the Amended Plan shall be governed solely by the terms of the Amended Plan. Under

Bankruptcy Code sections II23(a) and II42(a) and the provisions of this Order, the Amended Plan shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law. 23. The treatment set forth in the Amended Plan is in full and complete

satisfaction of the legal, contractual, and equitable rights (including any Liens) that each Person or Entity holding a Claim or an Equity Interest may have in or against the Debtors, the Debtors' estates, the Plan Administrator or their respective property. This treatment supersedes and

replaces any agreements or rights that any Person or Entity may have in or against the Debtors, the estates, the Plan Administrator or their respective property. 24. Allowed Administrative Expense Claims of any kind or nature (including

those for professional compensation and reimbursement of expenses) shall maintain their priority status notwithstanding confirmation of the Amended Plan and any subsequent conversion of these Chapter II Cases to cases under Chapter 7 of the Bankruptcy Code. 25. Except as provided in the Amended Plan or in any contract (including

without limitation the Noteholders' consultation rights set forth in section I 0.3 of the Amended Plan), instrument, release or other agreement entered into or delivered in connection therewith,

-I9#!2617539v7

in accordance with section 1123(b) of the Bankruptcy Code, the Debtors through the Plan Administrator shall retain and may enforce any claims, demands, rights and Causes of Action that any Estate may hold against any person or Entity to the extent not released under the Plan or otherwise. The Plan Administrator may pursue such retained claims, demands, rights or causes of action, as appropriate, in accordance with the best interests of the Estate or Estates that held such claims, demands, rights or causes of action. Any recovery of Cash by the Plan

Administrator on account of such actions will be distributed pursuant to the terms of the Plan. 26. Except as otherwise expressly provided in the Plan, this Confirmation

Order or a separate order of this Court, all injunctions or stays provided for in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect through and including the Effective Date. 27. Section 10.6 ofthe Amended Plan is hereby revised as follows:

10.6. General Releases In OfDebtors, Bankruptcy Estates, Noteholders and Committee. Subject to the preservation of setoff and recoupment rights as set forth in section 10.5 hereof, supra, upon the Effective Date: A. Releases of claims Debtors To the extent the Debtors have not sold such claims and such claims remain property of the estates, the Debtors shall be deemed to have been conclusively, absolutely, unconditionally, irrevocably and forever released from any and all claims, interests, obligations, rights, suits, damages, causes of action, remedies and liabilities whatsoever, including without limitation any derivative claims asserted on behalf of a debtor, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the purchase, sale or rescission of the purchase or sale of any Interest of the Debtors, the subject matter of, or the transactions or events giving rise to, any Claim against or Interest in the Debtor, the business or contractual arrangements involving any Debtor, the restructuring of Claims -20#12617539v7

F:J:I

a~

and Interests before or during the Chapter II Cases, the negotiation, formulation or preparation of the Plan, Disclosure Statement or relating agreements, instruments or other documents, or any other act or omission, transaction, agreement, event or other occurrence relating to the Debtors taking place on or before the Confirmation Date of the Plan (collectively, the "Released Claims"), that could have been asserted against the Debtors and/or the bankruptcy estates. B. Releases of claims Non-Debtors Only those entities that cast a ballot voting to accept the Plan and that did not indicate on such ballot an election to 'opt out' of granting the releases to non-Debtors shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever released any and all Released Claims that could have been asserted against (i) Debtors' successors, assigns, agents, employees, officers, directors, partners, affiliates, subsidiaries, parents, holding companies, and/or attorneys and other professionals; (ii) the Noteholders, Indenture Trustee and/or their successors, assigns, agents, employees, officers, directors, partners, affiliates, subsidiaries, parents, holding companies, and/or attorneys and other professionals; (iii) the Committee and/or its attorneys and/or other professionals. Notwithstanding the foregoing, nothing herein shall operate to release obligations and rights under the Plan and the contracts, instruments, and/or any other agreements or documents assumed, passed through or delivered in connection with such Plan. Further, nothing herein shall operate to release liability for or waive claims arising from willful misconduct or fraud. In no event shall the release provisions of the Plan result in any waiver or release by any entity of any and all claims such entity might have against Peter Schleider and any entities with which he is affiliated in any and all capacities or with which he otherwise has a relationship, contractual or otherwise, including, but not limited to, Peninsula Master Fund, Ltd., Peninsula Capital Management LP, Peninsula Technology Fund LP and Advanced Inquiry Systems, Inc. (the "Peninsula Parties"). No Peninsula Party shall have or receive any benefit from the releases granted by any entity and such releases shall not be used as a defense by any of the Peninsula Parties to any claim any entity may elect to assert against the Peninsula Parties. 28. On and after the Effective Date, the Debtors and/or OMNI Management

a~t

-21#I 26 I 7539 v7

Group, LLC ("Omni") the Debtors' claims, noticing and balloting agent, shall maintain the list of parties entitled to receive notices in the Chapter 11 Cases in accordance with Del. Bankr. LR 2002-1 (b) (the "2002 List"). Any party that desires to remain on the 2002 List in the Chapter 11 Cases shall, within twenty (20) days after entry of this Order, file a renewed request for receipt of notices and serve copies of such request by mail upon the Plan Administrator and the United States Trustee. The Debtors and/or Omni may remove from the 2002 List any party that does not file and serve a renewed request within 20 days after entry of this Order. Any party removed from the 2002 List in accordance with this paragraph shall be added back to the 2002 List promptly upon the filing and service of a renewed request by such party in accordance with this paragraph. The following parties in interest shall remain on the 2002 list without the need to file a renewed request as set forth herein: (i) counsel to the Debtors; (ii) counsel to FormFactor, Inc.; (iii) counsel to Advanced Inquiry Systems, Inc.; (iv) the Office ofthe United States Trustee; and (v) counsel to the Official Committee of Unsecured Creditors. 29. All fees payable pursuant to section 1930 of title 28 of the United States

Code shall be paid on the earlier of when due or the Effective Date, or as soon thereafter as practicable. From and after the Effective Date, the Debtors shall be liable for and shall pay the fees under 28 U.S.C. 1930 assessed against the Debtors' estates under 28 u.S.C. 1930 until entry of a final decree closing the Chapter 11 Cases. In addition, the Debtors shall file postconfirmation quarterly reports or any pre-confirmation monthly operating reports not filed as of the Confirmation hearing in conformity with the U.S. Trustee guidelines, until entry of an order closing or converting the Chapter 11 Cases. The U.S. Trustee shall not be required to file a request for payment of the quarterly fees, which shall be deemed an administrative claim against the Debtors and their estates.

-22#12617539 v7

30.

Notwithstanding Bankruptcy Rule 3020(e), this Order shall take effect

immediately upon its entry and the Debtors are authorized to consummate the Amended Plan immediately after entry of this Order in accordance with the terms ofthe Amended Plan.

Dated: May.2__C.2010 Wilmington, Delaware

HONOtsJ:ir:RIM JA_
UNITED STATES BANKRUPTCY JUDGE

-23#12617539v7