In re Citation Corporation

Full title: IN RE: CITATION CORPORATION, et al., Chapter 11, Debtors

Court: United States Bankruptcy Court, N.D. Alabama, Southern Division

Date published: Sep 20, 2004

Case No. 04-08130-TOM-11, (Jointly Administered) (Bankr. N.D. Ala. Sep. 20, 2004)

Opinion

Case No. 04-08130-TOM-11, (Jointly Administered).

September 20, 2004.

Michael Leo Hall, Robert B. Rubin, Rita H. Dixon, Attorneys for Debtors and Debtors in Possession.

BURR FORMAN LLP, Birmingham, Alabama, of Counsel.

ORDER GRANTING DEBTORS' MOTION FOR EXPEDITED HEARING ON FIRST-DAY PLEADINGS

TAMARA MITCHELL, Chief Judge, Bankruptcy

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), for this Court to set an expedited hearing on the First-Day Pleadings (as defined in the Motion) as quickly as the Court's docket will allow. Upon consideration of the Affidavit of Charles P. Bloome in Support of Debtors' Motion For Expedited Hearing on First-Day Pleadings and the Affidavit of Charles P. Bloome in Support of Chapter 11 Petitions and First Day Orders; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Motion is GRANTED; and it is further

ORDERED that, due to the exigent nature of the relief requested in the First-Day Pleadings, the Court shall conduct hearings at the United States Bankruptcy Court For the Northern District of Alabama, Southern Division, 1800 Fifth Avenue North, Birmingham, Alabama 35203, on September 20, 2004, at 2 p.m. in Courtroom 2, for each of the matters set forth below, listed by the type of relief requested therein:

Final

1. Debtors' Motion For An Order Pursuant To 11 U.S.C. § 345 Authorizing The Waiver Of Investment And Deposit Requirements

2. Debtors' Motion Pursuant To 11 U.S.C. §§ 105(a), 363, 507(a)(8), And 541 For Authorization To Pay Prepetition Sales And Use Taxes

and it is further

ORDERED that counsel for the Debtors shall serve of copy of this Order on the service list of parties in interest as appears above. Such service shall be made by expeditious means (including by facsimile or electronic mail). However, to the extent a motion for expedited hearing is granted in the related cases, counsel need serve a copy of this Order in only one of the cases.

ORDER PURSUANT TO 11 U.S.C. §§ 105 AND 363 AUTHORIZING (A) CONTINUED USE OF EXISTING CASH MANAGEMENT SYSTEM, (B) MAINTENANCE OF BANK ACCOUNTS, (C) CONTINUATION OF INTERCOMPANY TRANSACTIONS, AND (D) WAIVER OF DEPOSIT AND INVESTMENT REQUIREMENTS

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), for authorization pursuant to §§ 105(a), 345 and 363 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code") to continue use of existing cash management system, maintain existing bank accounts, continue intercompany transactions, and waive deposit and investment requirements. Upon consideration of the Affidavit of Charles P. Bloome in Support Chapter 11 Petitions and First Day Orders; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Motion is GRANTED in its entirety; and it is further

ORDERED that the Debtors are authorized to continue their customary intercompany transactions and cash management procedures in the ordinary course, provided, however, that the Debtors shall: (1) maintain detailed records reflecting all transfers of funds and transactions between themselves so that all pre- and post-petition intercompany transactions can be readily ascertained; and (2) maintain records of all transactions within their cash management system so that all transfers and transactions will be documented in their books and records to the same extent such information was maintained by the Debtors prior to the commencement of their chapter 11 cases (the "Petition Date"); it is further

ORDERED that the Debtors are authorized to (i) designate, maintain, and continue to use any and all of their existing bank accounts in the names and with the account numbers existing immediately prior to the Petition Date, (ii) deposit funds in and withdraw funds from such accounts by all usual means including, without limitation, cash, checks, wire transfers, Automated Clearing House transfers, and other debits, and (iii) treat their prepetition bank accounts for all purposes as debtor in possession accounts; and it is further

ORDERED that the Debtor shall, within a reasonable period of time, (1) provide the Bankruptcy Administrator with account statements for their bank accounts for the six months immediately preceding the Petition Date; (2) add "debtor-in-possession" to the name of its bank accounts and to the signature cards for their bank accounts; and (3) provide copies of the revised signature cards to the Bankruptcy Administrator; and it is further

ORDERED that the banks and financial institutions at which the Debtors' bank accounts are maintained (collectively, the "Banks") are authorized to continue to service and administer the applicable bank accounts as accounts of the respective Debtor as a debtor-in-possession without interruption and in the usual and ordinary course, and to receive, process and honor and pay any and all checks, drafts, wires, or automated clearing house transfers ("ACH Transfers") drawn on the bank accounts after the Petition Date by the holders or makers thereof, as the case may be. The Debtors shall reimburse the Banks for any claim arising prior to or after the Petition Date in connection with customer checks deposited with the Banks which have been dishonored or returned for insufficient funds in the applicable customer account; provided, however, that, in addition to the requirements thereof, any checks, drafts, wires, or ACH Transfers drawn or issued by the Debtors before the Petition Date shall be timely honored by any such Bank to the extent necessary to comply with any order(s) of this Court authorizing payment of certain pre-petition claims, unless such Bank is instructed by the Debtors to stop payment on or otherwise dishonor such check, draft, wire, or ACH Transfer; and it is further ORDERED that, notwithstanding anything to the contrary in any other order issued by this Court, the Banks (a) are authorized to accept and honor all representations from the Debtors as to which checks, drafts, wires, or ACH Transfers should be honored or dishonored consistent with any order(s) of this Court, whether the checks, drafts, wires, or ACH Transfers are dated prior to, on, or subsequent to the Petition Date, and whether or not the Bank believes the payment is or is not authorized by any order(s) of the Court, (b) have no duty to inquire as to whether such payments are authorized by any order(s) of this Court and (c) have no liability to any party on account of following the Debtors' instructions in accordance with this order; and it is further

ORDERED that nothing contained herein shall prevent the Debtors from opening any additional bank accounts, or closing any existing bank account(s) as they may deem necessary and appropriate, and the Banks are authorized to honor the Debtors' requests to open or close, as the case may be, such bank accounts or additional bank accounts; provided, however, that any new account shall be with a bank that is insured with the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation and that is organized under the laws of the United States or any State therein; and it is further

ORDERED that within two days after opening or closing an account the Debtors shall give the Bankruptcy Administrator notice of such opening or closing and a copy of the signature card; and it is further

ORDERED that any and all accounts opened by the Debtors on or after the Petition Date at any Bank shall, for all purposes under this Order, similarly be subject to the rights and obligations of this Order; and it is further ORDERED that the Debtors and the Banks are hereby authorized to continue to perform pursuant to the terms of any pre-petition agreements that may exist between them, except and to the extent otherwise directed by the terms of this Order and the Debtors are authorized to pay the Banks any fees, expenses or other amounts due in connection with such agreements arising prior to or after the Petition Date. The parties to such agreements shall continue to enjoy the rights and remedies afforded them under such agreements, except to the extent modified by the terms of this Order or by operation of the Bankruptcy Code; and it is further

ORDERED that operation of the cash management system shall not affect any liens on the cash held in the cash management system, all of which are expressly preserved; and it is further

ORDERED that, as this Court finds cause to exist for waiving the deposit and investment requirements set forth in § 345(b) of the Bankruptcy Code, the Debtors' obligation to comply with § 345(b) is hereby waived.

ORDER AUTHORIZING JOINT ADMINISTRATION

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), for an order authorizing joint administration of the Debtors' chapter 11 cases pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). Upon consideration of the Affidavit of Charles P. Bloome in Support Chapter 11 Petitions and First Day Orders; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division (the "Bankruptcy Administrator"); (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Motion is GRANTED; and it is further

ORDERED that the chapter 11 cases shall be jointly administered pursuant to Bankruptcy Rule 1015(b); and it is further

ORDERED that joint administration of the Debtors' cases includes:

(a) The use of a single docket for administrative matters, including the list of claims filed and the filing, logging and docketing of pleadings in order;

(b) The combining of notices to creditors and other parties of interest;

(c) The scheduling of hearings;

(d) The filing of a single monthly operating report with the Bankruptcy Administrator by the Debtors;

(e) The joint handling of other administrative matters;

(f) The filing of a single proof of claim in the consolidated case with a statement therein against which of the affiliated entities the claim is filed;

and it is further ORDERED that the official caption of the jointly-administered case shall be as set forth in the attached Exhibit "1"; and it is further

ORDERED that the Debtors are to serve notice of the joint administration of these estates on all creditors and parties in interest, which notice shall substantially conform to the proposed notice attached hereto as Exhibit "2." Any creditors or parties in interest may file an objection to the entry of this Order on or before the expiration of twenty (20) days following receipt of the notice of joint administration; and it is further

ORDERED that the notice of the joint administration of these estates shall be separately filed and docketed in each of the Debtors' cases; and it is further

ORDERED that all subsequent pleadings and papers filed in these cases be filed electronically only in the joint case style and not in any of the other cases, except that proofs of claim may be filed in paper format (although electronic filing is preferred); and it is further

ORDERED that nothing contained in the Motion or this Order shall be construed to cause a substantive consolidation of the Debtors' chapter 11 cases. Exhibit "1"

Proposed Style of the Jointly-Administered Case

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

IN RE: ) ) Chapter 11 CITATION CORPORATION, et al., ) ) Case No. ____ Debtors. ) (Jointly Administered) Exhibit "2"

Proposed Notice to Creditors

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

IN RE: ) ) Chapter 11 CITATION CORPORATION, et al., ) ) Case No. ____ Debtors. ) (Jointly Administered)

NOTICE TO CREDITORS REGARDING JOINT ADMINISTRATION

TO CREDITORS AND PARTIES IN INTEREST:

PLEASE TAKE NOTICE, pursuant to Federal Rule of Bankruptcy Procedure 1015(b), the United States Bankruptcy Court for the Northern District of Alabama, Southern Division, has ordered the joint administration of the chapter 11 cases listed in the above caption and corresponding footnote.

Joint administration of the estates in each of the above-referenced cases includes:

(a). The use of a single docket for administrative matters, including the list of claims filed and the filing, logging and docketing of pleadings in order;

(b). the combining of notices to creditors and other parties of interest;

(c). the scheduling of hearings;

(d). the filing of a single monthly operating report with the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama by the Debtors; and

(e). the joint handling of other administrative matters; and

(f). the filing of a single proof of claim with a statement included therein against which of the affiliated entities the claim is filed.

Pursuant to the Court's Order, the official case caption of the Debtors' jointly-administered chapter 11 cases is the caption used in this Notice. All papers filed in the Debtors' chapter 11 cases shall use the official caption and case number as shown on this Notice and should indicate that the cases are jointly administered. No papers or pleadings shall be filed hereafter in any other case. To the extent that papers are misfiled, the Clerk of Court may — but is not required to — refile such misfiled pleading or paper in the correct case. The Debtors' estates have not been substantially consolidated.

ORDER PURSUANT TO 11 U.S.C. § 345 AUTHORIZING THE WAIVER OF DEPOSIT AND INVESTMENT REQUIREMENTS

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), for authorization pursuant to § 345 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code") to waive deposit and investment requirements. Upon consideration of the Affidavit of Charles P. Bloome in Support Chapter 11 Petitions and First Day Orders; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Motion is GRANTED in its entirety; and it is further

ORDERED that, as this Court finds cause to exist for waiving the deposit and investment requirements set forth in § 345(b) of the Bankruptcy Code, the obligation to comply with § 345(b) is hereby waived and the Bankruptcy Administrator shall have no further obligations to supervise or monitor the deposit and investment requirements of the Debtors in this respect.

ORDER ON PROPOSED CLAIMS AND NOTICING AGENT OF BANKRUPTCY COURT PURSUANT TO 28 U.S.C. § 156(c) AND FED. R. BANKR. 2002

Upon the motion (the "Motion")² of the above-captioned Debtors and debtors-in-possession, (collectively, the "Debtors") for an order pursuant to 28 U.S.C. § 156(c) and Fed.R.Bankr.P. 2002 approving the Debtors' agreement with a claims and noticing agent (the "Claims and Noticing Agent"); and upon the Affidavit of Charles P. Bloome in support of the Motion; and it appearing to the Court that due and adequate notice of the Motion having been given; the relief requested in the Motion is in the best interest of the estates and their creditors; after due deliberation thereon, it is hereby ORDERED, ADJUDGED, and DECREED as set forth below:

2 Capitalized terms shall have the meanings ascribed to them in the Motion.

1. Pursuant to Fed.R.Bankr.P. 2002 and 28 U.S.C. § 156(c), the Debtors, as a debtors-in-possession, are authorized to employ and retain a Claims and Noticing Agent to perform the services requested in the Motion. However, the Court must receive a copy of a fully-executed agreement identifying and binding, subject to Court approval, the yet-to-be-determined Claims and Noticing Agent (the "Agreement") within ten (10) days of the Order of Relief entered by this Court, along with an affidavit of disinterestedness regarding the Claims and Noticing Agent. If no objections are filed on a timely basis, the Court may enter the order approving the agreement without a hearing.

2. The Claims and Noticing Agent shall, on a monthly basis, submit detailed invoices to the Debtors for services rendered, with a copy to the Office of the Bankruptcy Administrator for the U.S. Bankruptcy Court for the Northern District of Alabama, Southern Division.

3. The fees and expenses of the Claims and Noticing Agent incurred in the performance of the services described in the Motion shall be treated as an administrative expense of the Debtors' chapter 11 estates and be paid by the Debtors in the ordinary course of business.

4. As a condition to its retention, the Claims and Noticing Agent shall meet with the Clerk's Office to agree upon such procedures for administration of the Claims and Noticing Agent's services as the Clerk of Court may request.

5. No proof of claim or proof of interest shall be filed with the Court until a Claims and Noticing Agent is appointed. If a proof of claim or proof of interest in these cases is filed with the Court prior to appointment of a Claims and Noticing Agent, then such proof of claim or proof of interest shall be date stamped, but not docketed, by the Court, and immediately forwarded to the Claims and Noticing Agent upon appointment.

6. The Clerk's Office will forward to the Claims and Noticing Agent on a weekly basis any requests for transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. The Claims and Noticing Agent will perform the noticing services required by such rule and will provide certificates of service to the Court on a weekly basis containing a list of all transfer requests served the previous week.

7. The Claims and Noticing Agent will provide to the Clerk of Court a certificate of service for mailings it performs in these cases within five (5) business days of service.

INTERIM ORDER (I) AUTHORIZING DEBTORS (A) TO OBTAIN POST-PETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) AND 364(e) AND (B) TO UTILIZE CASH COLLATERAL PURSUANT TO 11 U.S.C. § 363, (II) GRANTING ADEQUATE PROTECTION TO PRE-PETITION SECURED PARTIES PURSUANT TO 11 U.S.C. §§ 361, 362, 363 AND 364 AND (III) SCHEDULING FINAL HEARING PURSUANT TO BANKRUPTCY RULES 4001(b) AND (c)

Upon the motion (the " Motion"), dated September ___, 2004, of Citation Corporation (the " Borrower") and its affiliated debtors, each as debtor and debtor-in-possession (collectively, the " Debtors"), in the above-captioned cases (the " Cases") pursuant to sections 105, 361, 362, 363(c)(2), 364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the " Bankruptcy Code"), and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the " Bankruptcy Rules"), seeking, among other things:

(1) authorization for the Borrower to obtain post petition financing (the " Financing"), and for all of the other Debtors (the " Guarantors") to guaranty the Borrower's obligations in connection with the Financing, up to the aggregate principal amount of $45,000,000 (the actual available principal amount at any time being subject to those conditions set forth in the DIP Documents (as defined below)), from JPMorgan Chase Bank (" JPMC"), acting as Administrative Agent and Issuing Bank (in such capacities, the " Agent"), for itself and a syndicate of financial institutions (together with JPMC, the " DIP Lenders") to be arranged by J.P. Morgan Securities Inc.;

(2) authorization for the Debtors to execute and enter into the DIP Documents and to perform such other and further acts as may be required in connection with the DIP Documents;

(3) the granting of adequate protection to the "Secured Parties" (as defined in the Pre-Petition Credit Agreement), including, without limitation, the lenders (in their capacities as such, the " Pre-Petition Secured Lenders", and together with the other "Secured Parties", in their capacities as such, the " Pre-Petition Secured Parties") under or in connection with that certain Credit Agreement, dated as of November 30, 1999, as amended and restated as of December 15, 2003, (as heretofore amended, supplemented or otherwise modified, the " Pre-Petition Credit Agreement"), among the Borrower, the lenders party thereto and JPMC, as administrative agent for the Pre-Petition Secured Lenders (in its capacity as such, the " Pre-Petition Agent"), and that certain Security Agreement, dated as of November 30, 1999, as reaffirmed and amended as of December 15, 2003, between Borrower and JPMC as Administrative Agent (as heretofore amended, supplemented or otherwise modified, the " Security Agreement" and, collectively with the Pre-Petition Credit Agreement, and the mortgages and all other documentation executed in connection therewith (including any Hedging Agreement as defined in the Pre-Petition Credit Agreement), the " Existing Agreements"), whose liens and security interests are being primed by the Financing;

(4) authorization for the Debtors to use cash collateral (as such term is defined in the Bankruptcy Code) in which the Pre-Petition Secured Parties have an interest, and the granting of adequate protection to the Pre-Petition Secured Parties with respect to, inter alia, such use of their cash collateral and all use and diminution in the value of the Pre-Petition Collateral (as defined below);

(5) the granting of superpriority claims to the DIP Lenders payable from, and having recourse to, all pre-petition and post-petition property of the Debtors' estates (including any Avoidance Actions (as defined below)) and all proceeds thereof, subject to the Carve Out (as defined below);

(6) pursuant to Bankruptcy Rule 4001, that an interim hearing (the " Interim Hearing") on the Motion be held before this Court to consider entry of the proposed interim order annexed to the Motion (the " Interim Order") (a) authorizing the Borrower, on an interim basis, to forthwith borrow revolving loans or obtain letters of credit from the DIP Lenders under the DIP Documents up to an aggregate principal or face amount not to exceed $25,000,000 (subject to any limitations of borrowings under the DIP Documents), (b) authorizing the Debtors' use of cash collateral, and (c) granting the adequate protection described herein; and

(7) that this Court schedule a final hearing (the " Final Hearing") to be held within 30 days of the entry of the Interim Order to consider entry of a final order authorizing the balance of the borrowings and letter of credit issuances under the DIP Documents on a final basis, as set forth in the Motion and the DIP Documents filed with this Court.

Due and appropriate notice of the Motion, the relief requested therein and the Interim Hearing having been served by the Debtors on the Debtors' twenty largest unsecured creditors (on a consolidated basis), on the Agent, the DIP Lenders, the Pre-Petition Agent, the Pre-Petition Secured Lenders and on the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division.

The Interim Hearing having been held by this Court on September ___, 2004.

Upon the record made by the Debtors at the Interim Hearing and after due deliberation and consideration and sufficient cause appearing therefor;

IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:

1. Jurisdiction. This Court has core jurisdiction over the Cases, the Motion, and the parties and property affected hereby pursuant to 28 U.S.C. §§ 157(b) and 1334. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

2. Notice. Under the circumstances, the notice given by the Debtors of the Motion and the Interim Hearing constitutes due and sufficient notice thereof and complies with Bankruptcy Rules 4001(b) and (c).

3. Debtors' Stipulations. Without prejudice to the rights of any other party (but subject to the limitations thereon contained in paragraph 18 below), the Debtors admit, stipulate and agree that:

(a) (i) as of the filing of the Debtors' chapter 11 petitions (the " Petition Date"), the Borrower was indebted and liable to the Pre-Petition Secured Lenders, without defense, counterclaim or offset of any kind, in the aggregate principal amount of approximately $310,000,000 in respect of loans made (including capitalized interest) and in the aggregate principal amount of approximately $14,000,000 in respect of letters of credit issued (the " Pre-Petition Letters of Credit"), in each case, by the Pre-Petition Secured Lenders or Issuing Bank thereunder pursuant to, and in accordance with the terms of, the Existing Agreements, plus, in each case, interest thereon and fees (including any attorneys', accountants', appraisers' and financial advisors' fees and expenses), charges and other obligations incurred in connection therewith as provided in the Existing Agreements (collectively, the " Pre-Petition Debt"), (ii) the Pre-Petition Debt constitutes the legal, valid and binding obligation of the Debtors, enforceable in accordance with its terms (subject to the stay of enforcement arising from section 362 of the Bankruptcy Code), (iii) no portion of the Pre-Petition Debt is subject to avoidance, recharacterization, recovery or subordination pursuant to the Bankruptcy Code or applicable nonbankruptcy law and (iv) the Debtors do not have any claims, counterclaims, causes of action, defenses or setoff rights, whether arising under the Bankruptcy Code or otherwise, against the Pre-Petition Secured Parties, the Pre-Petition Agent and their respective affiliates, agents, officers, directors, employees and attorneys; and

(b) the liens and security interests granted to the Pre-Petition Agent pursuant to and in connection with the Existing Agreements (including, without limitation, all security agreements, pledge agreements, mortgages, deeds of trust and other security documents executed by any of the Debtors in favor of the Pre-Petition Agent, for its benefit and for the benefit of the Pre-Petition Secured Parties) in connection with the Existing Agreements, are (i) valid, binding, perfected, enforceable, first-priority liens and security interests in the personal and real property described in the Existing Agreements (the " Pre-Petition Collateral"), (ii) not subject to avoidance, recharacterization or subordination pursuant to the Bankruptcy Code or applicable nonbankruptcy law and (iii) subject and subordinate only to (A) the DIP Liens (as defined below), (B) the Senior Permitted Liens (as defined in the DIP Credit Agreement), (C) the Carve Out (as defined below) to which the DIP Liens are subject and (D) valid, perfected and unavoidable liens permitted under the Existing Agreements to the extent such permitted liens are senior to or pari passu with the liens of the Pre-Petition Agent on the Pre-Petition Collateral.

4. Findings Regarding the Financing.

(a) Good cause has been shown for the entry of this Interim Order.

(b) The Debtors have an immediate need to obtain the Financing and use Cash Collateral (as defined below) in order to permit, among other things, the orderly continuation of the operation of their businesses, to maintain business relationships with vendors, suppliers and customers, to make payroll, to make capital expenditures and to satisfy other working capital and operational needs. The access of the Debtors to sufficient working capital and liquidity through the use of Cash Collateral, incurrence of new indebtedness for borrowed money and other financial accommodations is vital to the preservation and maintenance of the going concern values of the Debtors and to a successful reorganization of the Debtors.

(c) The Debtors are unable to obtain financing on more favorable terms from sources other than the DIP Lenders under the DIP Documents and are unable to obtain adequate unsecured credit allowable under section 503(b)(1) of the Bankruptcy Code as an administrative expense. The Debtors are also unable to obtain secured credit allowable under sections 364(c)(1), 364(c)(2) and 364(c)(3) of the Bankruptcy Code without the Debtors granting to the Agent (for its benefit and for the benefit of the Secured Parties as defined in the DIP Credit Agreement (defined below), the " DIP Secured Parties"), subject to the Carve Out as provided for herein, the DIP Liens and the Superpriority Claims (as defined below) under the terms and conditions set forth in this Order and in the DIP Documents.

(d) The terms of the Financing and the use of Cash Collateral are fair and reasonable, reflect the Debtors' exercise of prudent business judgment consistent with their fiduciary duties and constitute reasonably equivalent value and fair consideration.

(e) The Financing has been negotiated in good faith and at arm's length among the Debtors, the Agent and the DIP Lenders, and all of the Debtors' obligations and indebtedness arising under, in respect of or in connection with the Financing and the DIP Documents, including without limitation, (i) all loans made to, and all letters of credit issued for the account of, the Debtors pursuant to the Revolving Credit Agreement substantially in the form attached as Exhibit A to the Motion (the " DIP Credit Agreement"), and (ii) any "Obligations" (as defined in the DIP Credit Agreement), including credit extended in respect of overdrafts and related liabilities and other depository, treasury, and cash management services and other clearing services provided by JPMC or its affiliates (all of the foregoing in clauses (i) and (ii) collectively, the " DIP Obligations"), shall be deemed to have been extended by the Agent, the Issuing Bank, the DIP Lenders and their respective affiliates in good faith, as that term is used in section 364(e) of the Bankruptcy Code and in express reliance upon the protections offered by section 364(e) of the Bankruptcy Code, and shall be entitled to the full protection of section 364(e) of the Bankruptcy Code in the event that this Order or any provision hereof is vacated, reversed or modified, on appeal or otherwise.

(f) The Debtors have requested entry of this Order pursuant to Bankruptcy Rules 4001(b)(2) and 4001(c)(2). Absent granting the relief sought by this Order, the Debtors' estates will be immediately and irreparably harmed. Consummation of the Financing and the use of Cash Collateral in accordance with this Order and the DIP Documents is therefore in the best interest of the Debtors' estates.

5. Authorization of the Financing and the DIP Documents.

(a) The Debtors are hereby authorized to enter into the DIP Documents. The Borrower is hereby authorized to borrow money and obtain letters of credit pursuant to the DIP Credit Agreement, and the Guarantors are hereby authorized to guaranty such borrowings and the Borrower's obligations with respect to such letters of credit, up to an aggregate principal or face amount of $25,000,000 (plus interest, fees and other expenses and amounts provided for in the DIP Documents), in accordance with the terms of this Order and the DIP Documents, which shall be used for all purposes permitted under the DIP Documents, including, without limitation, to provide working capital for the Borrower and the Guarantors and to pay interest, fees and expenses in accordance with this Order and the DIP Documents. In addition to such loans and obligations, the Debtors are authorized to incur overdrafts and related liabilities arising from treasury, depository and cash management services including any automated clearing house fund transfers provided to or for the benefit of the Debtors by JPMC or any of its affiliates; provided, however, that nothing herein shall require JPMC or any other party to incur overdrafts or to provide any such services or functions to the Debtors.

(b) In furtherance of the foregoing and without further approval of this Court, each Debtor is authorized and directed to perform all acts, to make, execute and deliver all instruments and documents (including, without limitation, the execution or recordation of security agreements, mortgages and financing statements), and to pay all fees, that may be reasonably required or necessary for the Debtors' performance of its obligations under the Financing, including, without limitation:

(i) the execution, delivery and performance of the Loan Documents (as defined in the DIP Credit Agreement) and any exhibits attached thereto, including, without limitation, the DIP Credit Agreement, the Guarantee Agreements, the Security Documents (each as defined in the DIP Credit Agreement) and any mortgages contemplated thereby (collectively, and together with the letter agreements referred to in clause (iii) below, the " DIP Documents"),

(ii) the execution, delivery and performance of one or more amendments to the DIP Credit Agreement for, among other things, the purpose of adding additional financial institutions as DIP Lenders and reallocating the commitments for the Financing among the DIP Lenders, in each case in such form as the Debtors, the Agent and the DIP Lenders may agree (it being understood that no further approval of the Court shall be required for amendments to the DIP Credit Agreement that do not shorten the maturity of the extensions of credit thereunder or increase the commitments, the rate of interest or the letter of credit fees payable thereunder),

(iii) the non refundable payment to the Agent or the DIP Lenders, as the case may be, of the fees referred to in the DIP Credit Agreement (and in any separate letter agreements between them in connection with the Financing) and reasonable costs and expenses as may be due from time to time, including, without limitation, fees and expenses of the professionals retained as provided for in the DIP Documents, and

(iv) the performance of all other acts required under or in connection with the DIP Documents.

(c) Upon execution and delivery of the DIP Documents, the DIP Documents shall constitute valid and binding obligations of the Debtors, enforceable against each Debtor party thereto in accordance with the terms of the DIP Documents. No obligation, payment, transfer or grant of security under the DIP Documents or this Order shall be stayed, restrained, voidable, or recoverable under the Bankruptcy Code or under any applicable law (including without limitation, under section 502(d) of the Bankruptcy Code), or subject to any defense, reduction, setoff, recoupment or counterclaim.

6. Superpriority Claims.

(a) Pursuant to section 364(c)(1) of the Bankruptcy Code, all of the DIP Obligations shall (i) constitute allowed claims against the Debtors with priority over any and all administrative expenses, diminution claims (including all Adequate Protection Obligations (as defined below)) and all other claims against the Debtors, now existing or hereafter arising, of any kind whatsoever (" Superpriority Claims"), including, without limitation, all administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over any and all administrative expenses or other claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b), 726, 1113 or 1114 of the Bankruptcy Code, whether or not such expenses or claims may become secured by a judgment lien or other non-consensual lien, levy or attachment and (ii) be payable from and have recourse to all pre- and post-petition property of the Debtors and all proceeds thereof, subject only to the payment of the Carve Out to the extent specifically provided for herein.

(b) For purposes hereof, the " Carve Out" means (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the Bankruptcy Administrator under section 1930(a) of title 28 of the United States Code and (ii) after the occurrence and during the continuance of an Event of Default (as defined in the DIP Credit Agreement) an amount not exceeding $1,500,000 in the aggregate, which amount may be used subject to the terms of this Order, including, without limitation, paragraph 18 hereof, to pay any fees or expenses incurred by the Debtors and any statutory committees appointed in the Cases (each, a " Committee") in respect of (A) allowances of compensation for services rendered or reimbursement of expenses awarded by the Bankruptcy Court to the Debtors' or any Committee's professionals and (B) the reimbursement of expenses allowed by the Bankruptcy Court incurred by Committee members in the performance of their duties (but excluding fees and expenses of third party professionals employed by such members) ((A) and (B) collectively, the " Reimbursed Expenses"); provided, however, (x) that the dollar limitation in this clause 6(b)(ii) on fees and disbursements shall neither be reduced nor increased by the amount of any compensation or reimbursement of expenses incurred, awarded or paid prior to the occurrence of an Event of Default in respect of which the Carve Out is invoked or by any fees, expenses, indemnities or other amounts paid to any Agent, the Issuing Bank or any Lender or their respective attorneys and agents under the DIP Credit Agreement or otherwise, (y) that nothing herein shall be construed to impair the ability of any party to object to the allowance of any of the fees, expenses, reimbursement or compensation described in clauses (A) and (B) above, and (z) that cash or other amounts on deposit in the Letter of Credit Collateral Account (as defined in the DIP Credit Agreement), shall not be subject to the Carve Out. If any of the Reimbursed Expenses are paid out of the Carve Out, the claim of each reimbursed party against the Debtors shall survive and be deemed assigned to the Agent and the Pre-Petition Agent. The distributions payable from the estate in respect of such claims, as administrative expenses, shall be deemed to be Collateral and shall be paid to the DIP Secured Parties and the Pre-Petition Secured Parties in accordance with this Order.

7. DIP Liens.

As security for the DIP Obligations, effective and perfected upon the date of this Order and without the necessity of the execution, delivery or recordation of filings by the Debtors of mortgages, security agreements, control agreements, pledge agreements, financing statements or other similar documents, or the possession or control by the Agent of, or over, any Collateral (as defined below), the following security interests and liens are hereby granted to the Agent for its own benefit and the benefit of the DIP Secured Parties (all property identified in clauses (a), (b) and (c) below being collectively referred to as the " Collateral"), subject to (x) the Senior Permitted Liens and (y) only in the event of the occurrence and during the continuance of an Event of Default, the payment of the Carve Out (all such liens and security interests granted to the Agent, for its benefit and for the benefit of the DIP Secured Parties, pursuant to this Order and the DIP Documents, the " DIP Liens"):

(a) First Lien on Cash Balances and Unencumbered Property. Pursuant to section 364(c)(2) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior security interest in and lien upon all pre-and post-petition property of the Debtors, whether existing on the Petition Date or thereafter acquired, that, on or as of the Petition Date is not subject to valid, perfected and non-avoidable liens (collectively, " Unencumbered Property"), including without limitation, all cash and cash collateral of the Debtors (whether maintained with the Agent or otherwise) and any investment of such cash and cash collateral, inventory, accounts receivable, other rights to payment whether arising before or after the Petition Date, contracts, properties, plants, equipment, general intangibles, documents, instruments, interests in leaseholds, real properties, patents, copyrights, trademarks, trade names, other intellectual property, capital stock of subsidiaries, and the proceeds of all the foregoing. Unencumbered Property shall include the Debtors' claims and causes of action under sections 502(d), 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code, or any other avoidance actions under the Bankruptcy Code (collectively, " Avoidance Actions") and any proceeds thereof, provided, however, the right of the Official Committee of Unsecured Creditors to object to including Avoidance Actions in Unencumbered Property shall be preserved until the conclusion of the Final Hearing.

(b) Liens Priming Pre-Petition Secured Lenders' Liens. Pursuant to section 364(d)(1) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected first priority senior priming security interest in and lien upon all pre- and post-petition property of the Debtors (including, without limitation, cash collateral, inventory, accounts receivable, other rights to payment whether arising before or after the Petition Date, contracts, properties, plants, equipment, general intangibles, documents, instruments, interests in leaseholds, real properties, patents, copyrights, trademarks, trade names, other intellectual property, capital stock of subsidiaries, and the proceeds of all the foregoing), whether now existing or hereafter acquired, that is subject to the existing liens presently securing the Pre-Petition Debt (including in respect of issued but undrawn letters of credit). Such security interests and liens shall be senior in all respects to the interests in such property of the Pre-Petition Secured Parties arising from current and future liens of the Pre-Petition Secured Parties (including, without limitation, adequate protection liens granted hereunder), but shall not be senior to any valid, perfected and unavoidable interests of other parties arising out of liens, if any, on such property existing immediately prior to the Petition Date, or to any valid, perfected and unavoidable interests in such property arising out of liens to which the liens of the Pre-Petition Secured Parties become subject subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy Code.

(c) Liens Junior to Certain Other Liens. Pursuant to section 364(c)(3) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected security interest in and lien upon all pre- and post-petition property of the Debtors (other than the property described in clauses (a) or (b) of this paragraph 7, as to which the liens and security interests in favor of the Agent will be as described in such clauses), whether now existing or hereafter acquired, that is subject to valid, perfected and unavoidable liens in existence immediately prior to the Petition Date or to valid and unavoidable liens in existence immediately prior to the Petition Date that are perfected subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy Code, which security interests and liens in favor of the Agent are junior to such valid, perfected and unavoidable liens.

(d) Liens Senior to Certain Other Liens. The DIP Liens and the Adequate Protection Liens (as defined below) shall not be subject or subordinate to (i) any lien or security interest that is avoided and preserved for the benefit of the Debtors and their estates under section 551 of the Bankruptcy Code or (ii) any liens arising after the Petition Date including, without limitation, any liens or security interests granted in favor of any federal, state, municipal or other governmental unit, commission, board or court for any liability of the Debtors.

8. Protection of DIP Lenders' Rights.

(a) So long as there are any borrowings or letters of credit or other amounts (other than contingent indemnity obligations as to which no claim has been asserted when all other amounts have been paid and no letters of credit are outstanding) outstanding, or the DIP Lenders have any Revolving Commitment (as defined in the DIP Credit Agreement) under the DIP Credit Agreement, the Pre-Petition Agent and Pre-Petition Secured Parties shall (i) take no action to foreclose upon or recover in connection with the liens granted thereto pursuant to the Existing Agreements or this Order, or otherwise exercise remedies against any Collateral (including, without limitation, seeking relief from the automatic stay to take such action), except to the extent authorized by an order of this Court; (ii) be deemed to have consented to any release of Collateral authorized under the DIP Documents; and (iii) not file any further financing statements, trademark filings, copyright filings, mortgages, notices of lien or similar instruments, or otherwise take any action to perfect their security interests in the Collateral unless (solely as to this clause (iii)) the DIP Lenders file financing statements or other documents to perfect the liens granted pursuant to this Order, or as may be required by applicable state law to continue the perfection of valid and unavoidable liens or security interests as of the Filing Date.

(b) The automatic stay provisions of section 362 of the Bankruptcy Code are vacated and modified to the extent necessary to permit the Agent and the DIP Lenders to exercise, (i) immediately upon the occurrence of an Event of Default, all rights and remedies under the DIP Documents other than those rights and remedies against the Collateral as provided in clause (ii) below and (ii) upon the occurrence and during the continuance of an Event of Default and the giving of five business days prior written notice, all rights and remedies against the Collateral provided for in the DIP Documents (including, without limitation, the right to setoff monies of the Debtors in accounts maintained with the Agent or any DIP Lender). In any hearing regarding any exercise of rights or remedies, the only issue that may be raised by any party in opposition thereto shall be whether, in fact, an Event of Default has occurred and is continuing, and the Debtors and the Pre-Petition Secured Parties hereby waive their right to seek relief, including, without limitation, under section 105 of the Bankruptcy Code, to the extent such relief would in any way impair or restrict the rights and remedies of the Agent or the DIP Lenders set forth in this Order or the DIP Documents. In no event shall the Agent, the DIP Lenders, the Pre-Petition Agent or the Pre-Petition Secured Lenders be subject to the equitable doctrine of "marshaling" or any similar doctrine with respect to the Collateral.

9. Limitation on Charging Expenses Against Collateral. Except to the extent of the Carve Out, no expenses of administration of the Cases or any future proceeding that may result therefrom, including liquidation in bankruptcy or other proceedings under the Bankruptcy Code, shall be charged against or recovered from the Collateral pursuant to section 506(c) of the Bankruptcy Code or any similar principle of law, without the prior written consent of the Agent or the Pre-Petition Agent, as the case may be, and no such consent shall be implied from any other action, inaction, or acquiescence by the Agent, the DIP Lenders, the Pre-Petition Agent or the Pre-Petition Secured Lenders.

10. The Cash Collateral. To the extent any funds were on deposit with any Pre-Petition Secured Party as of the Petition Date, including, without limitation, all funds deposited in, or credited to, an account of any Debtor with any Pre-Petition Secured Party immediately prior to the filing of the Debtors' bankruptcy petitions (the " Petition Time") (regardless of whether, as of the Petition Time, such funds had been collected or made available for withdrawal by any such Debtor), such funds (the " Deposited Funds") are subject to rights of setoff. By virtue of such setoff rights, the Deposited Funds are subject to a lien in favor of such Pre-Petition Secured Parties pursuant to sections 506(a) and 553 of the Bankruptcy Code. The Pre-Petition Secured Lenders are obligated, to the extent provided in the Existing Agreements, to share the benefit of such liens and setoff rights with the other Pre-Petition Secured Lenders party to such Existing Agreements. Any proceeds of the Pre-Petition Collateral (including the Deposited Funds or any other funds on deposit at the Pre-Petition Secured Parties or at any other institution as of the Petition Date) are cash collateral of the Pre-Petition Secured Parties within the meaning of section 363(a) of the Bankruptcy Code. The Deposited Funds and all proceeds of both Pre-Petition Collateral and Collateral are referred to herein as " Cash Collateral."

11. Use of Cash Collateral. The Debtors are hereby authorized to use all Cash Collateral of the Pre-Petition Secured Lenders, and Pre-Petition Secured Lenders are directed promptly to turn over to the Debtors all Cash Collateral received or held by them, provided that the Pre-Petition Secured Lenders are granted adequate protection as hereinafter set forth. The Debtors' right to use Cash Collateral shall terminate automatically on the Termination Date (as defined in the DIP Credit Agreement). In addition, if the Borrower voluntarily terminates the Revolving Commitment prior to the Revolving Maturity Date (as each such term is defined in the DIP Credit Agreement), the Debtors shall, for the benefit of the Pre-Petition Secured Parties, continue to comply with the requirements of Articles 5 and 6 of the DIP Credit Agreement and, upon any failure by the Debtors to observe any such requirement or upon the occurrence of any event that would have constituted an Event of Default under the DIP Credit Agreement prior to the termination of the Commitment, the Pre-Petition Agent on behalf of the Pre-Petition Secured Parties shall have the immediate right unilaterally to terminate the Debtors' right to use Cash Collateral.

12. Adequate Protection. The Pre-Petition Secured Parties are entitled, pursuant to sections 361, 363(e) and 364(d)(1) of the Bankruptcy Code, to adequate protection of their interest in the Pre-Petition Collateral, including the Cash Collateral, for and equal in amount to the aggregate diminution in value of the Pre-Petition Secured Parties' Pre-Petition Collateral, including, without limitation, any such diminution resulting from the sale, lease or use by the Debtors (or other decline in value) of Cash Collateral and any other Pre-Petition Collateral, the priming of the Pre-Petition Agent's security interests and liens in the Pre-Petition Collateral by the Agent and the DIP Lenders pursuant to the DIP Documents and this Order, and the imposition of the automatic stay pursuant to section 362 of the Bankruptcy Code. As adequate protection, the Pre-Petition Agent and the Pre-Petition Secured Parties are hereby granted the following (collectively, the " Adequate Protection Obligations"):

(a) Adequate Protection Liens. The Pre-Petition Agent (for itself and for the benefit of the Pre-Petition Secured Parties) is hereby granted (effective and perfected upon the date of this Order and without the necessity of the execution by the Debtors of mortgages, security agreements, pledge agreements, financing statements or other agreements) a replacement security interest in and lien upon all the Collateral, subject and subordinate only to (i) the security interests and liens granted to the Agent for the benefit of the DIP Lenders in this Order and pursuant to the DIP Documents and any liens on the Collateral to which such liens so granted to the Agent are junior and (ii) the Carve Out (the " Adequate Protection Liens");

(b) Section 507(b) Claim. The Pre-Petition Agent and the Pre-Petition Secured Parties are hereby granted, subject to the payment of the Carve Out, a superpriority claim as provided for in section 507(b) of the Bankruptcy Code, immediately junior to the claims under section 364(c)(1) of the Bankruptcy Code held by the Agent and the DIP Lenders; provided, however, that the Pre-Petition Agent and the Pre-Petition Secured Parties shall not receive or retain any payments, property or other amounts in respect of the superpriority claims under section 507(b) of the Bankruptcy Code granted hereunder or under the Existing Agreements unless and until the DIP Obligations have indefeasibly been paid in cash in full;

(c) Interest, Fees and Expenses. (i) The Pre-Petition Agent shall receive from the Debtors (x) immediate cash payment in an amount equal to all accrued and unpaid interest on the Pre-Petition Debt (other than Supplemental Interest) and letter of credit fees at the non-default rates provided for in the Existing Agreements, and all other accrued and unpaid fees and disbursements (including, but not limited to, fees owed to the Pre-Petition Agent) owing to the Pre-Petition Agent under the Existing Agreements and incurred prior to the Petition Date, (y) current cash payments of all fees and expenses payable to the Pre-Petition Agent under the Existing Agreements, including, but not limited to, the reasonable fees and disbursements of counsel, financial and other consultants for the Pre-Petition Agent and (z) on the first business day of each month, an amount equal to all accrued but unpaid interest on the Pre-Petition Debt (other than Supplemental Interest), and letter of credit and other fees at the non-default contract rate applicable on the Petition Date (including LIBOR pricing options) under the Existing Agreements, provided that (A) the Pre-Petition Secured Lenders reserve their rights to assert claims for the payment of post-petition interest calculated at any applicable rate of interest (including, without limitation, default rates), or on any other basis, provided for in the Existing Agreements and (B) other parties reserve their right to assert that the adequate protection payments made pursuant to this Order should be applied to the principal of, and not to post-petition interest on, the Pre-Petition Debt;

(ii) If any Debtor is obligated to pay to any Pre-Petition Secured Party any amount upon the termination of any Hedging Agreement (a " Termination Amount"), such Pre-Petition Secured Party shall receive from the relevant Debtor, on the first business day of each month, an amount equal to all accrued but unpaid interest on such Termination Amount at the rate such Pre-Petition Secured Party is entitled to pursuant to the terms of such Hedging Agreement.

(d) Monitoring of Collateral. Subject to the provisions of Section 9.12 of the Pre-Petition Credit Agreement, the Pre-Petition Secured Parties shall be permitted to retain expert consultants and financial advisors at the expense of the Debtors, which consultants and advisors shall be given reasonable access for purposes of monitoring the business of the Debtors and the value of the Collateral;

(e) Information. The Debtors shall provide the Pre-Petition Agent with any written financial information or periodic reporting that is provided to, or required to be provided to, the Agent or the DIP Lenders; and

(f) Payment from Proceeds of Collateral. The Debtors are authorized and directed to pay to the Pre-Petition Agent, for the benefit of the Pre-Petition Secured Parties, 100% of the Net Proceeds (as defined in the DIP Credit Agreement), in each case limited to the Net Proceeds that are not required to be paid in respect of the DIP Obligations.

(g) Termination of Hedging Agreements. JPMC shall be permitted to exercise its rights of termination with respect to any Hedging Agreement entered into between JPMC and any Debtor and its right of setoff (subject to the sharing provisions of the Pre-Petition Credit Agreement) pursuant to the Existing Agreements, to setoff any obligations owed by JPMC to such Debtor upon such termination in accordance with the provisions thereof against an equal amount of Pre-Petition Obligations owed by such Debtor to JPMC pursuant to the Existing Agreements and as a result of such setoff the Pre-Petition Obligations then outstanding would be reduced by such amount on a dollar for dollar basis, and the automatic stay is hereby modified and vacated to the extent necessary to permit such setoff.

13. Reservation of Rights of Pre-Petition Secured Lenders. Under the circumstances and given that the above described adequate protection is consistent with the Bankruptcy Code, including section 506(b) thereof, the Court finds that the adequate protection provided herein is reasonable and sufficient to protect the interests of the Pre-Petition Secured Parties. However, the Pre-Petition Agent and the Pre-Petition Secured Parties may request further or different adequate protection, and the Debtors or any other party may contest any such request. Except as expressly provided herein, nothing contained in this Order (including, without limitation, the authorization of the use of any Cash Collateral) shall impair or modify any rights, claims or defenses available in law or equity to the Pre-Petition Agent, any Pre-Petition Secured Party, the Agent or any DIP Lender including, without limitation, rights of a party to a swap agreement, securities contract, commodity contract, forward contract or repurchase agreement with a Debtor to assert rights of setoff or other rights with respect thereto as permitted by law (or the right of a Debtor to contest such assertion).

14. Pre-Petition Secured Parties Obligations. In consideration of the benefits afforded to them pursuant to this Order, with respect to any Pre-Petition Letters of Credit, notwithstanding any provision to the contrary in the Pre-Petition Credit Agreement:

(i) the Issuing Bank under the Pre-Petition Credit Agreement (the " Pre-Petition Issuing Bank") is hereby authorized (but not required) and permitted to extend, renew, amend or replace any Pre-Petition Letter of Credit with a new letter of credit issued to the same beneficiary, with an expiration date no later than March 31, 2006 and in an amount no greater than the applicable Pre-Petition Letter of Credit (such extended, renewed, amended or replacement Pre-Petition Letter of Credit, a " New Pre-Petition Letter of Credit") and such New Pre-Petition Letter of Credit shall be deemed to constitute a Letter of Credit issued under the Pre-Petition Credit Agreement, with each existing Revolving Lender under the Pre-Petition Credit Agreement (a " Pre-Petition Revolving Lender") holding the same participation in such New Pre-Petition Letter of Credit as it had held in the applicable Pre-Petition Letter of Credit;

(ii) such Pre-Petition Revolving Lender shall be obligated to reimburse the Pre-Petition Issuing Bank for any payment made on any New Pre-Petition Letter of Credit and any other amounts due in respect thereof under the Pre-Petition Credit Agreement on the same terms as contained in the Pre-Petition Credit Agreement for the Pre-Petition Letters of Credit;

(iii) any claims (as defined in the Bankruptcy Code) that the Pre-Petition Issuing Bank or any Pre-Petition Revolving Lender may have against any Debtor in respect of any New Pre-Petition Letter of Credit (including for the reimbursement of any payment made on such New Pre-Petition Letter of Credit) shall constitute Pre-Petition Obligations, entitled to treatment as pre-petition claims, pari passu with the Loans outstanding under the Pre-Petition Credit Agreement, and as such shall be entitled to the adequate protection as provided herein;

(iv) The Borrower shall retire or replace all New Pre-Petition Letters of Credit on or prior to the effective date of any plan of reorganization.

15. Perfection of DIP Liens and Adequate Protection Liens.

(a) Subject to the provisions of paragraph 8(a) above, the Agent, the DIP Lenders, the Pre-Petition Agent and the Pre-Petition Secured Parties are hereby authorized, but not required, to file or record financing statements, trademark filings, copyright filings, mortgages, notices of lien or similar instruments in any jurisdiction, or take possession of or control over, or take any other action in order to validate and perfect the liens and security interests granted to them hereunder. Whether or not the Agent on behalf of the DIP Lenders or the Pre-Petition Agent on behalf of the Pre-Petition Secured Parties shall, in their sole discretion, choose to file such financing statements, trademark filings, copyright filings, mortgages, notices of lien or similar instruments, or take possession of or control over, or otherwise confirm perfection of the liens and security interests granted to them hereunder, such liens and security interests shall be deemed valid, perfected, allowed, enforceable, non-avoidable and not subject to challenge dispute or subordination, at the time and on the date of entry of this Order. Upon the request of the Agent, each of the Pre-Petition Agent and Pre-Petition Secured Parties, without any further consent of any party, is authorized to take, execute, deliver and file such instruments (in each case without representation or warranty of any kind) to enable the Agent to further validate, perfect, preserve and enforce DIP Liens.

(b) A certified copy of this Order may, in the discretion of the Agent, be filed with or recorded in filing or recording offices in addition to or in lieu of such financing statements, mortgages, notices of lien or similar instruments, and all filing offices are hereby authorized to accept such certified copy of this Order for filing and recording.

(c) Any provision of any lease or other license, contract or other agreement that requires (i) the consent or approval of one or more landlords or other parties or (ii) the payment of any fees or obligations to any governmental entity, in order for any Debtor to pledge, grant, sell, assign, or otherwise transfer any such leasehold interest, or the proceeds thereof, or other post-petition collateral related thereto, is hereby deemed to be inconsistent with the applicable provisions of the Bankruptcy Code. Any such provision shall have no force and effect with respect to the transactions granting post-petition liens, in such leasehold interest or the proceeds of any assignment and/or sale thereof by any Debtor, in favor of the DIP Lenders in accordance with the terms of the DIP Credit Agreement or this Order.

16. Preservation of Rights Granted Under the Order.

(a) No claim or lien having a priority superior to or pari passu with those granted by this Order to the Agent and the DIP Lenders or to the Pre-Petition Agent and the Pre-Petition Secured Parties, respectively, shall be granted or allowed while any portion of the Financing (or any refinancing thereof) or the Revolving Commitments or any letters of credit thereunder or the DIP Obligations or the Adequate Protection Obligations remain outstanding, and the DIP Liens and the Adequate Protection Liens shall not be (i) subject or junior to any lien or security interest that is avoided and preserved for the benefit of the Debtors' estates under section 551 of the Bankruptcy Code or (ii) subordinated to or made pari passu with any other lien or security interest, whether under section 364(d) of the Bankruptcy Code or otherwise.

(b) Unless all DIP Obligations shall have been paid in full (and, with respect to outstanding letters of credit issued pursuant to the DIP Credit Agreement, cash collateralized in accordance with the provisions of the DIP Credit Agreement) and the Adequate Protection Obligations shall have been paid in full, the Debtors shall not seek, and it shall constitute an Event of Default and a termination of the right to use Cash Collateral if any of the Debtors seek, or if there is entered, (i) any modifications or extensions of this Order without the prior written consent of the Agent, and no such consent shall be implied by any other action, inaction or acquiescence by the Agent, or (ii) an order converting or dismissing any of the Cases. If an order dismissing any of the Cases under section 1112 of the Bankruptcy Code or otherwise is at any time entered, such order shall provide (in accordance with sections 105 and 349 of the Bankruptcy Code) that (i) the Superpriority Claims, priming liens, security interests and replacement security interests granted to the Agent and, as applicable, the Pre-Petition Agent pursuant to this Order shall continue in full force and effect and shall maintain their priorities as provided in this Order until all DIP Obligations and Adequate Protection Obligations shall have been paid and satisfied in full (and that such Superpriority Claims, priming liens and replacement security interests, shall, notwithstanding such dismissal, remain binding on all parties in interest) and (ii) this Court shall retain jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the claims, liens and security interests referred to in (i) above.

(c) If any or all of the provisions of this Order are hereafter reversed, modified, vacated or stayed, such reversal, stay, modification or vacation shall not affect (i) the validity of any DIP Obligations or Adequate Protection Obligations incurred prior to the actual receipt of written notice by the Agent or Pre-Petition Agent, as applicable, of the effective date of such reversal, stay, modification or vacation or (ii) the validity or enforceability of any lien or priority authorized or created hereby or pursuant to the DIP Credit Agreement with respect to any DIP Obligations or Adequate Protection Obligations. Notwithstanding any such reversal, stay, modification or vacation, any use of Cash Collateral, or DIP Obligations or Adequate Protection Obligations incurred by the Debtors to the Agent, the DIP Lenders, the Pre-Petition Agent or the Pre-Petition Secured Parties prior to the actual receipt of written notice by the Agent and Pre-Petition Agent of the effective date of such reversal, stay, modification or vacation shall be governed in all respects by the original provisions of this Order, and the Agent, DIP Lenders, Pre-Petition Agent and Pre-Petition Secured Lenders shall be entitled to all the rights, remedies, privileges and benefits granted in section 364(e) of the Bankruptcy Code, this Order and pursuant to the DIP Documents with respect to all uses of Cash Collateral, DIP Obligations and Adequate Protection Obligations.

(d) Except as expressly provided in this Order or in the DIP Documents, the DIP Liens, the Superpriority Claims and all other rights and remedies of the Agent and the DIP Lenders granted by the provisions of this Order and the DIP Documents shall survive, and shall not be modified, impaired or discharged by (i) the entry of an order converting any of the Cases to a case under chapter 7, dismissing any of the Cases, terminating the joint administration of these Cases or by any other act or omission, or (ii) the entry of an order confirming a plan of reorganization in any of the Cases and, pursuant to section 1141(d)(4) of the Bankruptcy Code, the Debtors have waived any discharge as to any remaining DIP Obligations. The terms and provisions of this Order and the DIP Documents shall continue in these Cases, in any successor cases if these Cases cease to be jointly administered, or in any superceding chapter 7 cases under the Bankruptcy Code, and the DIP Liens, the Superpriority Claims and all other rights and remedies of the Agent and the DIP Lenders granted by the provisions of this Order and the DIP Documents shall continue in full force and effect until the DIP Obligations are indefeasibly paid in full.

17. Effect of Stipulations on Third Parties. The stipulations and admissions contained in this Order, including, without limitation, in paragraph 3 of this Order, shall be binding upon the Debtors in all circumstances. The stipulations and admissions contained in this Order, including, without limitation, in paragraph 3 of this Order, shall be binding upon all other parties in interest, including, without limitation, any Committee, unless (a) a party in interest has timely filed an adversary proceeding or contested matter (subject to the limitations contained herein, including, inter alia, in paragraph 18) by no later than the date that is 60 days after the initial selection of counsel by the Official Committee of Unsecured Creditors (the " Creditors' Committee") in the Cases (or such later date (x) as has been agreed to, in writing, by the Pre-Petition Agent in its sole discretion or (y) as has been ordered by the Court) (i) challenging the validity, enforceability, priority or extent of the Pre-Petition Debt or the Pre-Petition Agent's or the Pre-Petition Secured Parties' liens on the Pre-Petition Collateral or (ii) otherwise asserting or prosecuting any action for preferences, fraudulent conveyances, other avoidance power claims or any other any claims, counterclaims or causes of action, objections, contests or defenses (collectively, " Claims and Defenses") against the Pre-Petition Agent or any of the Pre-Petition Secured Parties or their affiliates, representatives, attorneys or advisors in connection with matters related to the Existing Agreements, the Pre-Petition Debt, the Pre-Petition Collateral, and (b) there is a final order in favor of the plaintiff sustaining any such challenge or claim in any such timely filed adversary proceeding or contested matter, provided that, as to the Debtors, all such Claims and Defenses are hereby irrevocably waived and relinquished as of the Petition Date. If no such adversary proceeding or contested matter is timely filed, (x) the Pre-Petition Debt and all related obligations of the Debtors (the " Pre-Petition Obligations") shall constitute allowed claims, not subject to counterclaim, setoff, subordination, recharacterization, defense or avoidance, for all purposes in the Cases and any subsequent chapter 7 cases, (y) the Pre-Petition Agent's and the Pre-Petition Secured Parties' liens on the Pre-Petition Collateral shall be deemed to have been, as of the Petition Date, legal, valid, binding and perfected, not subject to recharacterization, subordination or avoidance and (z) the Pre-Petition Obligations, the Pre-Petition Agent's and the Pre-Petition Secured Parties' liens on the Pre-Petition Collateral and the Pre-Petition Agent and the Pre-Petition Secured Parties shall not be subject to any other or further challenge by any party in interest seeking to exercise the rights of the Debtors' estates, including, without limitation, any successor thereto (including, without limitation, any chapter 7 or 11 trustee appointed or elected for any of the Debtors). If any such adversary proceeding or contested matter is timely filed, the stipulations and admissions contained in paragraph 3 of this Order shall nonetheless remain binding and preclusive (as provided in the second sentence of this paragraph) on any official committee (including the Creditors' Committee) and on any other person or entity, except to the extent that such findings and admissions were expressly challenged in such adversary proceeding or contested matter. Nothing in this Order vests or confers on any Person (as defined in the Bankruptcy Code), including any Committee, standing or authority to pursue any cause of action belonging to the Debtors or their estates, including, without limitation, Claims and Defenses with respect to the Existing Agreements or the Pre-Petition Obligations.

18. Limitation on Use of Financing Proceeds and Collateral.

Notwithstanding anything herein or in any other order by this Court to the contrary, no borrowings, letters of credit, Cash Collateral, Collateral or the Carve Out may be used to (a) object, contest or raise any defense to, the validity, perfection, priority, extent or enforceability of any amount due under the DIP Documents or the Existing Agreements, or the liens or claims granted under this Order, the DIP Documents or the Existing Agreements, (b) assert any Claims or Defenses or causes of action against the Agent, the DIP Lenders, the Pre-Petition Agent or the Pre-Petition Secured Parties or their respective agents, affiliates, representatives, attorneys or advisors, (c) prevent, hinder or otherwise delay the Agent's or the Pre-Petition Agent's assertion, enforcement or realization on the Cash Collateral or the Collateral in accordance with the DIP Documents, the Existing Agreements or this Order, (d) seek to modify any of the rights granted to the Agent, the DIP Lenders, the Pre-Petition Agent or the Pre-Petition Secured Parties hereunder or under the DIP Documents or the Existing Agreements, in each of the foregoing cases without such parties' prior written consent or (e) pay any amount on account of any claims arising prior to the Petition Date unless such payments are (i) approved by an Order of this Court, (ii) in accordance with the Approved 13-Week Cash Forecast (as defined in the DIP Credit Agreement) and (iii) permitted under the DIP Credit Agreement.

19. JPMC as Administrative Agent. To the extent JPMC, in its role as Administrative Agent under the Existing Agreements, is the secured party under any Security Documents (as defined in the Existing Agreements), listed as loss payee under the Debtors' insurance policies as required under the Security Agreement or is the secured party under any other Existing Agreement, JPMC, in its role as Administrative Agent under the DIP Credit Agreement, is also deemed to be the secured party under such Security Documents, loss payee under the Debtors' insurance policies and the secured party under any other Existing Agreement and shall act in that capacity and distribute any proceeds recovered or received first, for the benefit of the DIP Lenders in accordance with the DIP Credit Agreement and second, subsequent to indefeasible payment in full of all DIP Obligations, for the benefit of the Pre-Petition Secured Parties under the Existing Agreements.

20. Maintenance of Accounts. The Debtors shall maintain all of their deposit, checking, concentration, operating, disbursement and other accounts with the Agent (or any Affiliate thereof) or another financial institution acceptable to the DIP Lenders in their sole discretion.

21. Order Governs. In the event of any inconsistency between the provisions of this Order and the DIP Documents, the provisions of this Order shall govern.

22. Binding Effect; Successors and Assigns. The DIP Documents and the provisions of this Order, including all findings herein, shall be binding upon all parties in interest in these Cases, including, without limitation, the Agent, the DIP Lenders, the Pre-Petition Agent, the Pre-Petition Secured Parties, any Committee appointed in these Cases, and the Debtors and their respective successors and assigns (including any chapter 7 or chapter 11 trustee hereinafter appointed or elected for the estate of any of the Debtors) and shall inure to the benefit of the Agent, the DIP Lenders, the Pre-Petition Agent, the Pre-Petition Secured Parties and the Debtors and their respective successors and assigns; provided, however, that the Agent and the DIP Lenders shall have no obligation to extend any financing to any chapter 7 trustee or similar responsible person appointed for the estates of the Debtors. In determining to make any loan under the DIP Credit Agreement or in exercising any rights or remedies as and when permitted pursuant to this Order or the DIP Documents, the Agent and the DIP Lenders shall not be deemed to be in control of the operations of the Debtors or to be acting as a "responsible person" or "owner or operator" with respect to the operation or management of the Debtors (as such terms, or any similar terms, are used in the United States Comprehensive Environmental Response, Compensation and Liability Act, 29 U.S.C. §§ 9601 et seq. as amended, or any similar federal or state statute).

23. Additional Debtors. In the event any subsidiary of the Borrower that is not a Debtor on the date of this Order shall become a Debtor (an " Additional Debtor"), (i) such Additional Debtor shall automatically and without further action of the court become a "Debtor" for purposes of this Order and (ii) all provisions of this Order, including, without limitation, those pertaining to the liens and the priority of the Financing, shall automatically and without further action of the Court become applicable to such Additional Debtor and its pre- and post-petition property as a Debtor herein, and, to the extent such Additional Debtor has guaranteed the Financing or granted any liens securing the Financing, or has borrowed since the Borrower's Petition Date any funds from the Borrower, all such Additional Debtor's obligations in respect of such guaranty and such borrowings shall be deemed secured and shall have priority in respect of such Additional Debtor as Debtor and its pre- and post-petition property identical to the liens and priorities applicable to the Financing. As used herein, the "Petition Date" with respect to any Additional Debtor shall be the date of the filing of such Additional Debtor's chapter 11 petition.

24. Final Hearing. The Final Hearing is scheduled for ____, 2004 at ____ __.m. before this Court.

The Debtors shall promptly mail copies of this Order (which shall constitute adequate notice of Final Hearing) to the parties having been given notice of the Interim Hearing, and to any other party that has filed a request for notices with this Court and to any Committee after the same has been appointed, or Committee counsel, if the same shall have been appointed. Any party in interest objecting to the relief sought at the Final Hearing shall serve and file written objections; which objections shall be served upon (a) Michael L. Hall, Esq., Burr Forman LLP, 3100 SouthTrust Tower, 420 North 20th Street, Birmingham, Alabama 35203 attorneys for the Debtors; (b) Donald S. Bernstein, Esq., Davis Polk Wardwell, 450 Lexington Avenue, New York, NY 10017, attorneys for JPMC as Pre-Petition Agent and DIP Agent; (c) Charles L. Denaburg, Esq., Najjar Denaburg P.C., 2125 Morris Avenue, Birmingham, Alabama 35203, attorneys for JPMC as Pre-Petition Agent and DIP Agent; and (d) J. Thomas Corbett at the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; and shall be filed electronically with the Clerk of the United States Bankruptcy Court, Northern District of Alabama, Southern Division, in each case to allow actual receipt by the foregoing no later than 3:00 p.m., prevailing Central time, five business days prior to the date of the Final Hearing.

ORDER PURSUANT TO 11 U.S.C. §§ 105(A) AND 363(B) AND (C) AUTHORIZING DEBTORS TO CONTINUE THE DEBTORS' WORKERS' COMPENSATION PROGRAMS, ALL OTHER INSURANCE POLICIES, ALL AGREEMENTS RELATING THERETO, AND PAY ALL OBLIGATIONS IN RESPECT THEREOF

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), pursuant to §§ 105(a) and 363(b) and (c) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code") for authorization to: (a) continue to pay all prepetition amounts, if any, related to the Insurance Programs (unless otherwise defined, capitalized terms shall be used herein as they are defined in the Motion) and Workers' Compensation Claims, including, among other things: premiums, deductibles, and other amounts due, including retroactive adjustments; provided that such payments shall not exceed $4,000,000 in the aggregate; (b) to maintain and continue on an uninterrupted basis prepetition practices with respect to such Insurance Programs and Workers' Compensation Claims, including, among other things, allowing claimants to proceed directly against the Insurance Carriers to the extent that such claimants have valid Workers' Compensation Claims; (c) maintain and continue to make post-petition payments with respect to the Insurance Programs, including, among other things, premiums, deductibles, and other amounts due, on an uninterrupted basis; and (d) continue to maintain the Workers' Compensation Security, the Loss Fund Deposits, and any other security maintained in respect of the Insurance Programs.

Upon consideration of the Affidavit of Charles P. Bloome in Support Chapter 11 Petitions and First Day Order; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to the (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before the Court; and after due deliberation and sufficient cause appearing therefore, it is hereby ORDERED, ADJUDGED, and DECREED:

1. That the Debtors may, on account of those matters described in the Motion and in the manner described in the Motion, without prejudice to the Debtors' right to seek additional or further relief in the future, in the ordinary course of business: (a) continue to pay all prepetition amounts, if any, related to the Insurance Programs, including, among other things: premiums, deductibles, and other amounts due, including retroactive adjustments; provided that such payments shall not exceed $4,000,000 in the aggregate; (b) maintain and continue on an uninterrupted basis prepetition practices with respect to such Insurance Programs, including, among other things, allowing claimants to proceed directly against the Insurance Carriers to the extent that such claimants have valid Workers' Compensation Claims; (c) maintain and continue to make post-petition payments with respect to the Insurance Programs, including, among other things, premiums, deductibles, and other amounts due, on an uninterrupted basis; and (d) continue to maintain the Workers' Compensation Security, the Loss Fund Deposits, and any other Insurance Security; and further

2. That the Debtors are authorized to maintain and continue on an uninterrupted basis any and all prepetition practices and payments on a postpetition basis with respect to the Insurance Programs, including without limitation, renewal and/or continuation, if Debtors so elect in the exercise of their business judgment, of any of the Insurance Programs that may expire postpetition; and further

3. The Debtors are authorized to issue new postpetition checks, or effect new fund transfers, on account of the Prepetition Insurance Program Obligations to replace any prepetition checks or fund transfer requests that may be dishonored or rejected; and further

4. That the Debtors' banks and financial institutions that process, honor and pay any and all checks, or fund transfers, on account of obligations to be paid pursuant to this Order are authorized to do so and may rely on the representations of the Debtors as to which checks are issued and authorized to be paid in accordance with this Order without any duty of further inquiry and without liability for following the Debtors' instructions; and further

5. That to the extent that the Insurance Programs, or any related contract or agreement, are deemed executory contracts, the relief granted hereby shall not be deemed an assumption of any such contract pursuant to Bankruptcy Code § 365; and further

6. That nothing in this Order or the Motion is intended or shall be construed to constitute relief from the automatic stay pursuant to Bankruptcy Code § 362.

ORDER PURSUANT TO 11 U.S.C. §§ 105(a), 363, 507(a)(8), AND 541 AUTHORIZING DEBTORS TO PAY PREPETITION SALES AND USE TAXES

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), for authorization to pay prepetition amounts owing in respect of prepetition sales and use taxes pursuant to §§ 105(a), 363, 507(a)(8), and 541 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code"); upon consideration of the Affidavit of Charles P. Bloome in Support of Chapter 11 Petitions and First Day Orders; the court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to the Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama; and it appearing that no other notice or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefor, it is hereby

ORDERED that the Debtors are authorized and empowered to pay, in their sole discretion, prepetition sales and use tax obligations due and owing to all state and local taxing authorities up to an aggregate amount of $400,000, including, but not limited to, those taxing authorities set forth on Exhibit "A" to the Motion (the "Taxing Authorities"), consistent with the practices and policies in effect as of the commencement of the Debtors' chapter 11 cases, including, without limitation, through the issuance of postpetition checks or wire transfer requests; and it is further

ORDERED that the Debtors are authorized to pay their unpaid sales and use taxes without prejudice to the Debtors' right to seek additional or further relief in the future; and it is further

ORDERED that the Debtors are authorized (consistent with this Order) to issue postpetition checks, or to effect postpetition fund transfer requests, in replacement of any checks or fund transfer requests in respect of prepetition sales and use tax obligations dishonored or rejected as of the commencement of these chapter 11 cases; and it is further ORDERED that nothing in this Order or the Motion shall be construed as prejudicing any rights the Debtors may have to contest the amount or basis of any sales or use tax obligations allegedly due any Taxing Authority; and it is further

ORDERED that the banks and financial institutions that process, honor, and pay any and all checks or wire transfer requests on account of obligations to be paid pursuant to this Order are authorized to do so and may rely on the representations of the Debtors as to which checks are issued and authorized to be paid in accordance with this Order without any duty of further inquiry and without liability for following the Debtors' instructions.

ORDER PURSUANT TO 11 U.S.C. §§ 105(a) AND 363(b) AUTHORIZING PAYMENT OF PREPETITION WAGES, COMPENSATION, AND EMPLOYEE BENEFITS

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), pursuant to §§ 105(a) and 363(b) of 11 U.S.C. § 101 et seq. (the "Bankruptcy Code") for:

a. authorization to pay to its employees (the "Employees") prepetition (1) wages, salaries, commissions, and other compensation earned prior to the date of commencement of the Debtors' chapter 11 cases (the "Petition Date"), including, without limitation, the amounts which the Debtors are required by law to withhold from employee payroll cheeks in respect of federal, state, and local income taxes, including unemployment contributions and taxes, and social security and Medicare taxes, and amounts that the Debtors are required to directly pay in respect of state unemployment taxes and contributions on behalf of employees (collectively, the "Compensation Obligations"), (2) amounts that the Debtors are required to pay or withhold with respect to medical and health insurance, prescription insurance, life insurance, dental insurance, cafeteria plans, flexible spending accounts, defined contribution/401(k) plans, defined benefit/pension plans, disability benefits and coverage, other welfare benefit plans, and other such similar benefits (the "Employee Benefits"), (3) vacation and other paid-time-off obligations, including, without limitation, vacation pay, sick time, and personal days that have accrued as of the Petition Date (the "Vacation Obligations"), (4) amounts that the Debtors are required to pay with respect to a variety of business expenses incurred by their employees, including travel and relocation expenses, in the ordinary course of performing their duties on behalf of the Debtors (the "Reimbursement Obligations"), and (5) amounts that the Debtors are required to pay to compensate certain payroll processors in respect of the Compensation Obligations and administrators, consultants, actuaries, recordkeepers, and other service providers in the ordinary course of their businesses in order to facilitate the administration, record keeping, and maintenance of certain Employee Benefits (the "Administrative Obligations" and, together with the Compensation Obligations, the Employee Benefits, the Vacation Obligations, and the Reimbursement Obligations, the "Prepetition Employee Obligations");

b. authorization to satisfy and continue the Employee-Requested Payroll Deductions;

c. authorization to continue to honor the Debtors' plans, policies, and programs with respect to Vacation Obligations and Employee Benefits, as such plans, policies, and programs were in effect as of the Petition Date;

d. authorization for the banks in which the Debtors maintain their accounts in respect of the Prepetition Employee Obligations to honor all checks issued and kind instructions in respect of the Prepetition Employee Obligations; and

e. authorization to issue new postpetition checks or to effect new fund transfer requests, to replace any dishonored or rejected prepetition checks or kind transfer requests on account of the Prepetition Employee Obligations, all as more fully set forth in the Motion.

Upon consideration of the Affidavit of Charles P. Bloome in Support of Chapter 11 Petitions and First Day Orders filed on the Petition Date; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Debtors are authorized to honor and pay the Prepetition Employee Obligations in a manner consistent with the Debtors' prepetition business practices and policies, as set forth below:

a. the Debtors are authorized to pay accrued and unpaid Compensation Obligations up to $4,090,000, excluding amounts owed on checks issued prepetition that have not cleared the Debtors' banks (the "Outstanding Payroll Checks");

b. the Debtors are authorized to pay amounts owed in respect of the Outstanding Payroll Checks;

c. the Debtors are authorized to pay accrued and unpaid Vacation Obligations, as such obligations become due under the Debtors' pre-Petition Date paid time off policies, up to $5,600,000;

d. the Debtors are authorized to pay accrued and unpaid Employee Benefits up to $4,554,000;

e. the Debtors are authorized to pay accrued and unpaid Reimbursements Obligations up to $150,000; and

f. the Debtors are authorized to pay accrued and unpaid Administrative Obligations up to $215,000; and it is further

ORDERED that the Debtors are authorized to pay the requested prepetition obligations without prejudice to the Debtors' right to seek additional or further relief in the future; and it is further

ORDERED that the Debtors are authorized to satisfy and continue the Employee-Requested Payroll Deductions; and it is further

ORDERED that the relief granted herein shall not constitute or be deemed an assumption or an authorization to assume any of such policies, plans, programs, practices, and procedures pursuant to Bankruptcy Code § 365; and it is further

ORDERED that the Debtors' banks and financial institutions are authorized to honor and pay all prepetition and postpetition checks issued, and fund transfer requests made, by the Debtors in respect of payroll, salary, bonus, compensation, Employee Benefits, and other Prepetition Employee Obligations, to the extent sufficient funds are on deposit in such accounts; and it is further ORDERED that Debtors' banks and financial institutions may rely on the representations of the Debtors as to which checks and fund transfer requests are issued and authorized to be paid in accordance with this Order without any duty of further inquiry and without liability for following the Debtors' instructions; and it is further

ORDERED that the Debtors are authorized (consistent with this Order) to issue postpetition checks, or to effect postpetition fund transfer requests, in replacement of any checks or fund transfer requests in respect of Prepetition Employee Obligations dishonored or rejected as a consequence of the commencement of these chapter 11 cases.

ORDER PURSUANT TO 11 U.S.C. §§ 105(a) AND 363(b) AUTHORIZING PAYMENT OF PREPETITION CLAIMS OF CERTAIN CRITICAL TRADE VENDORS

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), pursuant to §§ 105(a) and 363(b) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code") for authorization to pay, in the Debtors' sole discretion through reasonable exercise of their business judgment, the prepetition claims of certain critical vendors that are essential to the uninterrupted functioning of the Debtors' business operations (the "Critical Vendors," whose prepetition claims shall be identified as the "Critical Vendor Claims"). Upon consideration of the Affidavits of Larry Tackett and Charles P. Bloome, each filed on the Petition Date; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of the Internal Revenue Service for the Northern District of Alabama; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Debtors are authorized to pay the Critical Vendor Claims, up to $20 million in the aggregate, as determined by the Debtors in their sole discretion (subject to the conditions of the Debtors' postpetition financing arrangements) to continue receiving the vital goods and services provided by the Critical Vendors; and it is further

ORDERED that the Debtors condition the payment of Critical Vendor Claims on the agreement of individual Critical Vendors to continue supplying goods and services to the Debtors on trade terms that are as favorable or more favorable than those upon which such Critical Vendor provided goods and/or services to the Debtors prior to the Petition Date; and it is further

ORDERED that the Debtors reserve the right to negotiate new trade terms with any Critical Vendor as a condition to payment of any Critical Vendor Claim; and it is further ORDERED that the Debtors shall disclose such payments in their monthly operating report, including a description of the payments made and the reason for each payment; and it is further

ORDERED that as a condition to paying any Critical Vendor, the Debtors must (a) send a letter, substantially in the same form as that attached to the Motion as Exhibit "A," to the Critical Vendors along with a copy of this Order and the letter be executed and returned to the Debtors, and (b) that the check used to pay the holder of a Critical Vendor's claim contain a legend substantially in the following form:

By accepting this check, the payee agrees to the terms of the Order of the United States Bankruptcy Court for the Northern District of Alabama, dated ____, 2004, in the Company's Chapter 11 Consolidated Case, Case No ____, entitled "Order Pursuant to 11 U.S.C. §§ 105(a) and 363(b) Authorizing Payment of Prepetition Claims of Certain Critical Trade Vendors" and submits to the jurisdiction of that Court for enforcement thereof.

ORDERED that nothing in this Motion should be construed as a waiver by any of the Debtors of their rights to contest any invoice of a Critical Vendor, whether paid or unpaid, under applicable nonbankruptcy law; and it is further

ORDERED that, if a Critical Vendor at any later time refuses to supply goods and/or services to the Debtors on trade terms that are as favorable or more favorable than those upon which such Critical Vendor provided goods and/or services to the Debtors prior to the Petition Date following receipt of payment on its Critical Vendor Claim, the Debtors are authorized to, in their discretion and without further order of the Court, declare that provisional payments made to Critical Vendors on account of Critical Vendor Claims be deemed to have been in payment of then outstanding postpetition claims of such vendors without further order of the Court or action by any person or entity. In the event that such occurs, the relevant Critical Vendor shall then immediately repay to the Debtors any payment made to it on account of its Critical Vendor Claims to the extent that payments on account of such Critical Vendor Claims exceed the postpetition claims of such Critical Vendors then outstanding without giving effect to any rights of setoff, claims, provision for payment of reclamation or trust find claims, or otherwise and it is further

ORDERED that, those Critical Vendors that assert or may assert any mechanics' liens, possessory liens, or other similar State law trade liens ("Trade Liens") on the Debtors' property need not comply with any of the terms and conditions set forth in this Order, except for those in this paragraph. The Critical Vendor Claim of any Critical Vendor who asserts or who may assert a Trade Lien on the Debtors' property may be paid immediately in exchange for such Critical Vendor (i) agreeing, to the extent such Critical Vendor has not previously perfected its interest in the Debtors' property, to forbear from pursuing perfection; (ii) releasing the Trade Lien; and (iii) releasing, to the extent such Critical Vendor is in possession of the Debtors' property, the Debtors' property; provided that payments in respect of Critical Vendor Claims made to Critical Vendors who assert or who may asserts Trade Liens shall not exceed $1 million in the aggregate (which limit is included in the $20 million aggregate limit for all Critical Vendor Claims). To the extent that any payment of a Critical Vendor Claim of a Critical Vendor who asserts or who may assert a Trade Lien is made that would exceed the $1 million aggregate limit, such Critical Vendor must comply with all terms and conditions set forth in this Order; and it is further

ORDERED that the banks and financial institutions that process, honor and pay any and all checks on account of obligations to be paid pursuant to this Order are authorized to do so and may rely on the representations of the Debtors as to which checks are issued and authorized to be paid in accordance with this Order without any duty of further inquiry and without liability for following the Debtors' instructions.

ORDER DEEMING UTILITY COMPANIES ADEQUATELY ASSURED OF FUTURE PERFORMANCE AND ESTABLISHING PROCEDURES FOR DETERMINING REQUESTS FOR ADDITIONAL ADEQUATE ASSURANCES PURSUANT TO BANKRUPTCY CODE § 366

This matter came to be heard upon the motion (the "Motion") of Citation Corporation ("Citation"), its holding company, and certain of its direct and indirect subsidiaries (the "Subsidiaries"), as debtors and debtors in possession (collectively, the "Debtors"), pursuant to § 366(b) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code") for an order (i) deeming utility companies adequately assured of future performance, and (ii) establishing procedures for determining requests for additional adequate assurances pursuant to § 366, all as more fully set forth in the Motion. Upon consideration of the Affidavit of Charles P. Bloome in Support Chapter 11 Petitions and First Day Orders; the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; due notice of the Motion having been provided to (1) the Office of the Bankruptcy Administrator for the United States Bankruptcy Court for the Northern District of Alabama, Southern Division; (2) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' prepetition lenders; (3) counsel to JPMorgan Chase Bank as Administrative Agent for the Debtors' proposed postpetition lenders; (4) the Debtors' twenty (20) largest unsecured creditors (on a consolidated basis); and (5) the District Director of Internal Revenue Service for the Northern District of Alabama; and it appearing that no other or further notice need be provided; the Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their creditors, and all parties in interest; upon the Motion and all of the proceedings before this Court; and after due deliberation and sufficient cause appearing therefore, it is hereby

ORDERED that the Debtors are authorized to pay any unpaid prepetition amounts for Utility Services (as defined in the Motion) as same become due, provided that such payments shall not exceed $7 million in the aggregate; and it is further

ORDERED that the Debtors are authorized to pay on a timely basis in accordance with their prepetition practices all undisputed invoices for postpetition Utility Services rendered by the Utility Companies (as defined in the Motion) to the Debtors; and it is further

ORDERED that any undisputed charge for Utility Services furnished by a Utility Company to the Debtors following the commencement of these cases shall constitute an administrative expense of the Debtors' chapter 11 cases in accordance with §§ 503(b) and 507(a)(1); and it is further

ORDERED that absent a further order of this Court, the Utility Companies are prohibited from altering, refusing, or discontinuing service to, or discriminating against, any of the Debtors, or requiring the payment of a deposit or other security in connection with a prepetition invoice for Utility Services, including, but not limited to, the furnishing of gas, electric, water, telephone, trash removal, or any other utility of like kind, furnished to the Debtors; and it is further

ORDERED that the Debtors shall serve a copy of this Order and the Motion upon each of the Utility Companies by first-class mail within five (5) business days after entry hereof; and it is further

ORDERED that this Order is without prejudice to the rights of any Utility Company to request, within twenty (20) days from the date hereof, additional assurance in the form of deposits or other security, and the burden of proof shall remain unaffected by the entry of this order; and it is further

ORDERED that any Utility Company which does not timely request additional assurance shall be deemed to have adequate assurance under Bankruptcy Code § 366; and it is further

ORDERED that in the event that a Utility Company timely requests additional adequate assurance, which the Debtors believe to be unreasonable despite a reasonable period for discussion and negotiation, the Debtors shall file a Motion for the Determination of' Adequate Assurance of Payment and request that this Court set such Determination Motion for a hearing (the "Determination Hearing") within twenty (20) days of receipt of the request for additional adequate assurance; and it is further

ORDERED that in the event a Determination Hearing is scheduled, the objecting Utility Company shall be deemed to have adequate assurance of payment pursuant to this Order unless and until this Court enters a final order to the contrary resolving the Determination Hearing; and it is further

ORDERED that nothing in this Order shall be deemed to affect any burden of proof that either the Debtors or any Utility Company may have at the Determination Hearing; and it is further

ORDERED that the banks and financial institutions that process, honor and pay any and all checks on account of obligations to be paid pursuant to this Order are authorized to do so and may rely on the representations of the Debtors as to which checks are issued and authorized to be paid in accordance with this Order without any duty of further inquiry and without liability for following the Debtors' instructions; and it is further

ORDERED that the provider(s) of cellular telephone services shall not be deemed Utility Company, and no payments shall be made to provider(s) of cellular telephone services by the Debtors for any unpaid prepetition amounts; and it further

ORDERED that nothing in this Order or the Motion shall be deemed to constitute postpetition assumption or adoption of any agreement pursuant to Bankruptcy Code § 365.