Case: swd Doc #:288 Filed: 01/18/13 Page 1 of 7 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF MICHIGAN ) ) ) ) ) )

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1 Case: swd Doc #:288 Filed: 01/18/13 Page 1 of 7 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF MICHIGAN In re: STAMP FARMS, L.L.C. et al. 1, Debtor. Case No Chapter 11 Hon. Scott. W. Dales Jointly Administered PRELIMINARY ORDER APPROVING CERTAIN SALE PROCEDURES AND ADJOURNING HEARING This matter coming before the Court on the Motion for Orders Approving (A Auction Procedures, (B the Sale of Substantially All of the Debtors' Assets Free and Clear of All Liens, Claims, Interests and Encumbrances, and (C Related Notices (Docket No. 181, as supplemented by the Debtor's First Supplement thereto (Docket No. 230 (collectively, the "Motion", filed by the above-captioned debtors and debtors in possession (the "Debtors"; the Court having reviewed the Motion and having heard statements of counsel in support of and of counsel objecting to the Motion at a hearing held before the Court on January 17, 2013 (the "Hearing"; and the Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before the Court; and after due deliberation and sufficient cause appearing therefor; THE COURT HEREBY FINDS THAT: A. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This is a core proceeding pursuant to 28 U.S.C. 157(b(2. Venue is proper in this 1 This case is being jointly administered with the following cases: In re: Stamp Farms Trucking, L.L.C. (Case No, ; In re Stamp Farms Custom AG, L.L.C. (Case No ; and In re Royal Star Farms, L.L.C. (Case No

2 Case: swd Doc #:288 Filed: 01/18/13 Page 2 of 7 District and in this Court pursuant to 28 U.S.C and B. Notice of the Motion and the Hearing was sufficient and appropriate under the circumstances and complied with the requirements of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules of the Court, and no further notice of, or hearing on, the Motion with respect to the Auction Procedures is necessary or required. C. The Debtors have articulated good and sufficient reasons for this Court to approve: (i the form of the Notice of Approval of Auction Procedures for the Sale of Substantially All of the Debtors' Assets in the form filed as a second amendment to Exhibit C to the Motion [Docket No. 285] (the "Auction Notice"; and (ii the form of the Notice of Cure Amount with Respect to Executory Contracts or Unexpired Lease to be Assumed and Assigned in Connection with Sale of Substantially All of the Assets of the Debtors in the form filed as a second amendment to Exhibit D to the Motion [Docket No. 286] (the "Cure Notice" and with the Auction Notice, the "Notices". D. Approval of the Notices and this Order is in the best interests of the Debtors, their estate, creditors, and other parties in interest. IT IS HEREBY ORDERED THAT: 1. The Motion shall be, and hereby is, granted to the limited extent described on the record at the Hearing with respect to the request for entry of this preliminary order ("Order" to provide approval of the Notices and certain dates and deadlines in connection with the Bulk Sale Auction and Parcel Sale Auction. 2. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Motion. 2

3 Case: swd Doc #:288 Filed: 01/18/13 Page 3 of 7 3. All objections to the Motion are preserved. The hearing on the Motion is adjourned to Monday, January 28, 2013, at 10:00 a.m. (EST, at the U.S. Bankruptcy Court, One Division Avenue N, Second Floor, Courtroom A, Grand Rapids, Michigan to consider approval of the stalking horse asset purchase agreement [Dkt. No. 265], to hear objections to the Motion and to consider approval of the remaining portions of the Motion relating to the sale procedures not addressed in this Order. 4. The form of the Notices are hereby approved and constitute good and sufficient notice of the Auctions, the Assumption and Assignment of Executory Contracts, and the Sale Hearing, subject to such further or other notice as may be determined by this Court at the hearing on January The Debtors are authorized to offer the Assets, or any combination thereof, for sale pursuant to the Auction Notice and are authorized to begin marketing the Assets for sale at the Auctions. The Debtors' sale of the Assets shall be subject to this Court's approval at the Sale Hearing. 6. The Debtors shall file a proposed allocation of the total consideration to be paid to the Debtors under the Stalking Horse APA (as defined in the Notice of Stalking Horse Purchase Agreement [Docket No. 265] to each of the Assets to be sold pursuant to the Stalking Horse APA grouped by each creditor asserting a Lien on the Assets and indicating which Debtor is selling each of the Assets (the "Proposed Allocation" by not later than January 22, The deadline for a Bidder's Package (as defined in the proposed Auction Procedures attached as Exhibit B to the Motion submission for the Bulk Sale Auction shall be February 1, 2013; and, the Debtors shall advise each Qualified Bidder of its approval as a Qualified Bidder by not later than February 4,

4 Case: swd Doc #:288 Filed: 01/18/13 Page 4 of 7 8. The Bulk Sale Auction shall be conducted at the offices of Varnum LLP, Bridgewater Place, Grand Rapids, Michigan at 10:00 a.m. (EST on February 5, 2013, or at such other time and location as may be designated by the Debtors. 9. On February 5, 2013, after the conclusion of the Bulk Sale Auction, the Debtors shall file with this Court a supplement, which shall report to the Court the results of the Bulk Sale Auction (the "Supplement". The Supplement shall identify, among other things: (a the bidder (the "Prevailing Bidder" that presented the highest or otherwise best offer (the "Prevailing Bid"; (b the bidder(s that presented the next highest or otherwise best offer(s (the "Back-Up Bid(s"; (c the total consideration to be paid for the Assets; (d a detailed list of each of the Assets indicating which Debtor is selling each of the Assets; (e a proposed allocation of the total consideration to each of the Assets grouped for each creditor asserting a Lien in the Assets so that each creditor asserting a Lien against any of the Assets can determine the proposed portion of the total consideration allocable to such creditor on account of such creditor's Lien; (f the executory contracts or leases to be assumed and assigned to the Prevailing Bidder in connection with the sale of the Assets and the cure amounts, if any, required for such assumption; and (g the Debtors' proposed Bulk Sale Order. 10. The Sale Hearing will be held on February 7, 2013 at such time as the Court shall determine or at such other later date and time as the Court shall determine. 11. At the Sale Hearing, the Debtors may request approval by the Court of the sale of the Assets pursuant to the Bulk Sale Auction to the Prevailing Bidder as the "Winning Bidder", and the designation by the Debtors of one or more Back-Up Bids, all pursuant to the Bulk Sale Order. 4

5 Case: swd Doc #:288 Filed: 01/18/13 Page 5 of At the Sale Hearing, the Debtors may request that the Court enter the Parcel Sale Order authorizing the Debtors to sell the Remaining Assets at the Parcel Sale Auction at the Debtors' offices, 201 S. George Street, Decatur, Michigan on or about March 1 March 15, Objections to the sales of Assets pursuant to the Bulk Sale Auction or the sale of the Remaining Assets pursuant to the Parcel Sale Auction and/or Private Sales shall be in writing, filed and served so as to be actually received on or prior to February 6, 2013 at 5:00 p.m. or such other date and time as the Court shall determine (the "Objection Deadline" by the Debtors, Wells Fargo, and the Creditors' Committee, provided that service of any such objection electronically through the Court's CM/ECF system on or before the Objection Deadline on counsel to the Debtors, counsel to Wells Fargo, and counsel to the Creditors' Committee will be deemed to be sufficient service on the Debtors, Wells Fargo, and the Creditors' Committee, respectively. The failure of any objecting person or entity to timely file and serve its objection by the Objection Deadline shall be a bar to the assertion, at the Sale Hearing or thereafter, of any objection to the Motion, the Sale, or the Debtors' consummation and performance of the Agreement (including the transfer of the Assets and the assumed and assigned Contracts free and clear of liens, claims, and encumbrances, with the exception of any objection to the conduct of the Auctions or the Debtors' selection of the Prevailing Bidder, which may be made at the Sale Hearing. 14. If a non-debtor party to any Pre-Petition Contract that is proposed to be an assumed and assigned fails to file and serve an objection to the Cure Notice in accordance with the instructions in the Cure Notice, (a the Court may authorize the assumption and assignment of the applicable Pre-Petition Contract at the Sale Hearing and (b the non-debtor party to such 5

6 Case: swd Doc #:288 Filed: 01/18/13 Page 6 of 7 Pre-Petition Contract shall be entitled to recover only its cure amounts listed in the Cure Notice and shall be barred and enjoined from asserting at the Sale Hearing or otherwise that any other amounts are owing. Cure amounts recovered by non-debtor parties to Pre-Petition Contracts are made only for purposes of satisfying the requirements of Bankruptcy Code section 365 and are without prejudice to the Debtors rights to assert any causes of action arising under or preserved pursuant to chapter 5 of the Bankruptcy Code (including, without limitation, the right to challenge amounts claimed due in respect of such cure amounts before or after any sales effectuated as part of the Bulk Sale Auction or pursuant to the Parcel Sale Order. 15. On or before 5:00 p.m. (EST on January 22, 2013 (the "Mailing Date", the Debtors shall serve this Order and the Auction Notice upon (i the Office of the United States Trustee for the Western District of Michigan, (ii counsel for Wells Fargo, (iii counsel for the Committee of Creditors appointed in these Cases, (iv counsel to all other parties who have appeared in these Chapter 11 cases; (v all entities known to have expressed an interest in a transaction with respect to the Assets, (vi all entities known to have asserted any Lien in or upon the Assets, (vii all federal, state, and local regulatory or taxing authorities or recording offices, including but not limited to environmental regulatory authorities, which have a reasonably known interest requested in the Motion; (viii all counter-parties to the Pre-Petition Contracts; (ix all other entities requesting notice in these chapter 11 cases; and (x all parties listed on the matrix, in the same manner as required in this Court's order authorizing the expedited hearing on the Motion. 16. The Debtors shall also serve all counter-parties to the Pre-Petition Contracts with the applicable Cure Notice by the Mailing Date. 6

7 Case: swd Doc #:288 Filed: 01/18/13 Page 7 of Pursuant to Fed. R. Bankr. P. 2002(l and 2002(d, the Debtors shall cause the Auction Notice to be published in the Kalamazoo Gazette and the Grand Rapids Press by the Mailing Date or as soon as practicable thereafter, which shall be deemed proper notice to any other interested parties whose identities are unknown to the Debtors. 18. This Court shall retain jurisdiction over any matters related to or arising from the implementation of this Order, including, but not limited to, any matter, claim or dispute arising from or relating to the Notices and the implementation of this Order. IT IS SO ORDERED. Dated January 18,