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Full title: Motion /Emergency Ex Parte Motion of Debtor for Entry of Interim and Final Orders (I) Authorizing Continuation of, and Payment of Prepetition Obligations Incurred in Ordinary Course of Business in Connection with, Various Insurance Policies, (II) Authorizing Banks to Honor and Process Checks and Electronic Transfer Request Related Thereto, and (III) Preventing Insurance Companies from Giving any Notice of Termination or Otherwise Modifying any Insurance Policy Without Obtaining Relief from the Automatic Stay Filed by Debtor The Prospect-Woodward Home (Attachments: # 1 Exhibit A # 2 Exhibit B # 3 Exhibit C) (Graham, Owen) (Entered: 08/30/2021)

Document posted on Aug 29, 2021 in the bankruptcy, 12 pages and 0 tables.

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The above-captioned debtor (“Hillside Village” or the “Debtor”) hereby moves (this “Motion”) pursuant to sections 105(a), 362, 363(b), and 363(c)(1) of title 11 of the United States Code (the “Bankruptcy Code”), and Rule 6003(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) for the entry of interim and final orders (i) authorizing, but not directing, the Debtor to continue and, to the extent necessary, renew prepetition insurance policies in the ordinary course of business and pay prepetition obligations in respect thereof, (ii) authorizing banks and other financial institutions at which the Debtor holds accounts (collectively, the “Banks”) to honor and process check and electronic transfer requests related to the foregoing, and (iii)preventing insurance companies from giving any notice of termination or otherwise modifyingor cancelling any insurance policies without first obtaining relief from the automatic stay imposed by Bankruptcy Code section 362.In the ordinary course of business, the Debtor maintains approximately 8 insurance policies with various insurance providers (collectively, the “Insurers”) that provide coverage for, among other things, the Debtor’s general liability, director and officer liability, fiduciary liability, employment practices liability, workers compensation liability, automobile liability, professional liability, cyber liability, and property liability (each, an “Insurance Policy” and collectively, the “Insurance Policies”), as summarized in Exhibit C annexed hereto.2 9. It is possible that certain of the Debtor’s Insurance Policies may have been inadvertently omitted from the list of Insurance Policies attached hereto as Exhibit C. Accordingly, Exhibit C represents a non-exhaustive list of Insurance Policies and the Debtor reserves the right, pursuant to the terms and conditions of this Motion and without further order from the Court, to amend Exhibit C to add any Insurance Policies that were omitted therefrom.By this Motion, the Debtor requests entry orders, substantially in the forms of Exhibit A and Exhibit B attached hereto, authorizing the Debtor to (a) continue and renew the Insurance Policies, or obtain new insurance policies, as needed in the ordinary course of business, and (b) honor all of its prepetition and postpetition obligations, including payment of all outstanding prepetition Insurance Obligations, under and in connection with the Insurance Policies on an uninterrupted basis and in accordance with the same practices and procedures as were in effect before the Petition Date, including premiums arising under the Insurance Policies.Nothing contained herein is intended or should be construed as an admission of the validity of any claim against the Debtor, a waiver of the Debtor’s rights to dispute any claim, or an approval, assumption, or rejection of any agreement, contract, or lease under Bankruptcy Code section 365.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF NEW HAMPSHIRE In re: ) Chapter 11 ) The Prospect-Woodward Home, ) Case No. 21-10523-BAH ) Debtor.1 ) ) EMERGENCY EX PARTE MOTION OF DEBTOR FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING CONTINUATION OF, AND PAYMENT OF PREPETITION OBLIGATIONS INCURRED IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH, VARIOUS INSURANCE POLICIES, (II) AUTHORIZING BANKS TO HONOR AND PROCESS CHECKS AND ELECTRONIC TRANSFER REQUESTS RELATED THERETO, AND (III) PREVENTING INSURANCE COMPANIES FROM GIVING ANY NOTICE OF TERMINATION OR OTHERWISE MODIFYING ANY INSURANCE POLICY WITHOUT OBTAINING RELIEF FROM THE AUTOMATIC STAY The above-captioned debtor (“Hillside Village” or the “Debtor”) hereby moves (this “Motion”) pursuant to sections 105(a), 362, 363(b), and 363(c)(1) of title 11 of the United States Code (the “Bankruptcy Code”), and Rule 6003(b) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) for the entry of interim and final orders (i) authorizing, but not directing, the Debtor to continue and, to the extent necessary, renew prepetition insurance policies in the ordinary course of business and pay prepetition obligations in respect thereof, (ii) authorizing banks and other financial institutions at which the Debtor holds accounts (collectively, the “Banks”) to honor and process check and electronic transfer requests related to the foregoing, and (iii)preventing insurance companies from giving any notice of termination or otherwise modifyingor cancelling any insurance policies without first obtaining relief from the automatic stay imposed by Bankruptcy Code section 362. In support of the Motion, the Debtor relies upon the Declaration of Toby Shea, Chief Restructuring Officer, in Support of the Debtor’s First Day Pleadings (the 1 The last four digits of the Debtor’s federal taxpayer identification are 2146. The address of the Debtor’s headquarters is 95 Wyman Road, Keene, New Hampshire 03431

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“First Day Declaration”) filed with the Court contemporaneously herewith. In further support of the Motion, the Debtor respectfully represents as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b). 2. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The statutory predicates for the relief requested herein are Bankruptcy Code section 333 and Bankruptcy Rule 2007.2. BACKGROUND I. General Background 4. On the date hereof (the “Petition Date”), the Debtor commenced this case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code (the “Chapter 11 Case”). 5. The factual background regarding the Debtor, including business operations, capital and debt structure, and the events leading to the filing of the Chapter 11 Case is set forth in the First Day Declaration and incorporated herein by reference. 6. The Debtor continues to operate and manage its business as a debtor in possession pursuant to Bankruptcy Code sections 1107 and 1108. 7. No trustee, examiner, or creditors’ committee has been appointed in the Chapter 11 Case. II. The Debtor’s Insurance 8. In the ordinary course of business, the Debtor maintains approximately 8 insurance policies with various insurance providers (collectively, the “Insurers”) that provide coverage for, among other things, the Debtor’s general liability, director and officer liability, fiduciary liability, employment practices liability, workers compensation liability, automobile liability, professional

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liability, cyber liability, and property liability (each, an “Insurance Policy” and collectively, the “Insurance Policies”), as summarized in Exhibit C annexed hereto.2 9. The Debtor incurs a total of approximately $238,015.50 in the aggregate premiums on an annual basis under the terms of the existing Insurance Policies that are the subject of this Motion as well as other obligations, including other related fees and costs (collectively, the “Insurance Obligations”). In addition, the Debtor may make retroactive adjustments in the ordinary course of business with respect to one or more of the Insurance Policies, as applicable. 10. The Debtor seeks authority to pay premiums under the Insurance Policies based on a fixed amount established and billed by each Insurance Provider. Depending on the particular Insurance Policy, premiums are primarily prepaid in full at a policy’s inception or renewal. 11. Generally, these Insurance Policies require annual premium payments to be made at the beginning of the applicable policy period. In the ordinary course of business, the Debtor renews annual coverage under many of the policies, including those related to D&O and cyber liability, and the Debtor pays the full amount of the premiums owed for such policies due at renewal. Accordingly, as of the Petition Date, the Debtor does not owe unpaid premium amounts on account of policies that require payment in full at the inception of the applicable policy period. 2 The descriptions of the Insurance Policies set forth in this Motion constitute a summary only. The actual terms of the Insurance Policies and related agreements will govern in the event of any inconsistency with the descriptions in this Motion. It is possible that certain of the Debtor’s Insurance Policies may have been inadvertently omitted from the list of Insurance Policies attached hereto as Exhibit C. Accordingly, Exhibit C represents a non-exhaustive list of Insurance Policies and the Debtor reserves the right, pursuant to the terms and conditions of this Motion and without further order from the Court, to amend Exhibit C to add any Insurance Policies that were omitted therefrom. The Debtor requests that the relief requested herein apply equally to all such Insurance Policies (the “Additional Insurance Policies”). If the Debtor adds any Additional Insurance Policies to Exhibit C, the Debtor will serve this Motion, any order approving same, and a revised version of Exhibit C upon the issuer(s) of any such Additional Insurance Policies, the Office of the U.S. Trustee, counsel for the Bond Trustee, and any official committee(s) appointed in this Chapter 11 Case.

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RELIEF REQUESTED 12. By this Motion, the Debtor requests entry orders, substantially in the forms of Exhibit A and Exhibit B attached hereto, authorizing the Debtor to (a) continue and renew the Insurance Policies, or obtain new insurance policies, as needed in the ordinary course of business, and (b) honor all of its prepetition and postpetition obligations, including payment of all outstanding prepetition Insurance Obligations, under and in connection with the Insurance Policies on an uninterrupted basis and in accordance with the same practices and procedures as were in effect before the Petition Date, including premiums arising under the Insurance Policies. 13. The Debtor also seeks entry of an order authorizing the Banks to receive, process, honor, and pay checks or electronic transfers used by the Debtor to pay the foregoing and to rely on the representations of the Debtor as to which checks are issued and authorized to be paid in accordance with this Motion. 14. Lastly, by this Motion, the Debtor respectfully requests an order preventing the Insurers from giving any notice of termination or otherwise modifying or cancelling any Insurance Policies without obtaining relief from the automatic stay. BASIS FOR RELIEF REQUESTED I. Honoring the Insurance Policy Obligations is Warranted Under Bankruptcy Code Section 363(b) 15. Bankruptcy Code section 363 provides, in relevant part, that “[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate.” 11 U.S.C. § 363(b)(1). Under section 363(b), courts require only that the debtor “show that a sound business purpose justifies such actions.” Dai-Ichi Kangyo Bank, Ltd. v. Montgomery Ward Holding Corp. (In re Montgomery Ward Holding Corp.), 242 B.R. 147, 153 (D. Del. 1999) (citations omitted); see also In re Phoenix Steel Corp., 82 B.R. 334, 335–36 (Bankr.

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D. Del. 1987); In re Adelphia Commc’ns Corp., No. 02-41729 (REG), 2003 WL 22316543, at *30 (Bankr. S.D.N.Y. Mar. 4, 2003); Comm. of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070 (2d Cir. 1983). Moreover, “[w]here the debtor articulates a reasonable basis for its business decisions (as distinct from a decision made arbitrarily or capriciously), courts will generally not entertain objections to the debtor’s conduct.” Comm. of Asbestos-Related Litigants v. Johns-Manville Corp. (In re Johns- Manville Corp.), 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986) (citation omitted); see also Stanziale v. Nachtomi (In re Tower Air, Inc.), 416 F.3d 229, 238 (3d Cir. 2005) (“Overcoming the presumptions of the business judgment rule on the merits is a near-Herculean task.”). 16. The Debtor has satisfied the business judgment standard. First, the coverage provided under the Insurance Policies is essential for preserving the value of the Debtor’s assets and, such coverage is required by various regulations, laws, and contracts that govern the Debtor’s business operations. Indeed, Bankruptcy Code section 1112(b)(4)(C) provides that “failure to maintain appropriate insurance that poses a risk to the estate or to the public,” is “cause” for mandatory conversion or dismissal of a chapter 11 case. 11 U.S.C. § 1112(b)(4)(C). Moreover, maintenance of insurance policies is required by the operating guidelines established by the Office of the United States Trustee (the “U.S. Trustee”). See 3 United States Trustee Manual, § 3-3.2.3 (Oct. 1998) (“A debtor must obtain appropriate insurance coverage, and documentation regarding the existence of the coverage must be provided to the Office of the United States Trustee as early in the case as possible.”). Second, if the Debtor fails to perform the obligations under the Insurance Policies, coverage thereunder could be voided. Such a disruption of the Debtor’s insurance coverage could expose the Debtor to serious risks, including but not limited to: (a) direct liability for the payment of claims that otherwise would have been payable by the Insurers; (b) material

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costs and other losses that otherwise would have been reimbursed by the Insurers under the Insurance Policies; (c) the loss of good standing certification in jurisdictions that require the Debtor to maintain certain levels of insurance coverage; (d) the inability to obtain similar types of insurance coverage; and (e) higher costs for re-establishing lapsed policies or obtaining new insurance coverage. Any or all of these consequences could cause serious harm to the Debtor’s business. Granting the relief requested herein will enhance the likelihood of the Debtor’s successful rehabilitation, thereby furthering the goals of chapter 11: “facilitating the continued operation and rehabilitation of the debtor.” In re Ionosphere Clubs, 98 B.R. 174, 176 (Bankr. S.D.N.Y. 1989). 17. The Debtor may also need to renew or replace certain of the Insurance Policies during the course of this Chapter 11 Case or enter into new policies. If the Debtor does not pay prepetition amounts owing, including upward and/or downward adjustments, in respect of the Insurance Policies, there is a risk that the Insurers will refuse to renew the Insurance Policies. 18. Although the Debtor believes that the renewal, modification, or new execution of the Insurance Policies would constitute ordinary course transactions not requiring Court approval, the Debtor nevertheless seeks authority to continue to renew and modify the Insurance Policies in order to assure the Debtor’s Insurers that the Debtor has full authority with respect to new or modified arrangements without the need to obtain further approval from the Court. II. Honoring the Insurance Policy Obligations is Warranted Under Bankruptcy Code Section 363(c)(1) 19. Bankruptcy Code section 363(c)(1) expressly grants the Debtor the authority to “enter into transactions . . . in the ordinary course of business” and “use property of the estate in the ordinary course of business without notice or a hearing.” 11 U.S.C. § 363(c)(1). Therefore, the Debtor believes it is permitted to pay all postpetition amounts due pursuant to the Insurance

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Policies and to renew or obtain new insurance policies as such actions are in the ordinary course of the Debtor’s business. However, out of an abundance of caution, the Debtor seeks entry of an order granting the relief requested herein to avoid any disruptions to its business operations. 20. Moreover, bankruptcy courts in this district and others have granted relief similar to that requested herein in other chapter 11 cases. See, e.g., In re Kimball Hill, Inc., Case No. 08-10095 (SPS) (Bankr. N.D. Ill. Apr. 24, 2008); In re Sentinel Mgmt. Grp., Inc., Case No. 07-14987 (JHS) (Bankr. N.D. Ill. Aug. 30, 2007); see also In re Dura Auto. Sys., Inc., Case No. 06-11202 (Bankr. D. Del. Nov. 21, 2006); In re Calpine Corp., Case No. 05-60200 (Bankr. S.D.N.Y. Jan. 4, 2006). As in the above-cited cases, maintenance of the Insurance Policies is critical to the Debtor’s rehabilitation efforts. If the Insurance Policies are allowed to lapse, the Debtor will face substantial exposure for any damages or losses resulting from the operation of the Debtor’s business. III. The Court Should Authorize Applicable Banks to Honor Checks and Electronic Fund Transfers in Accordance with the Motion 21. In connection with the foregoing, the Debtor respectfully requests that the Court (a) authorize all applicable Banks to receive, process, honor, and pay all checks and transfers issued by the Debtor in accordance with this Motion, without regard to whether any checks or transfers were issued before or after the Petition Date, (b) provide that all Banks may rely on the representations of the Debtor with respect to whether any check or transfer issued or made by the Debtor before the Petition Date should be honored pursuant to this Motion (such banks and other financial institutions having no liability to any party for relying on such representations by the Debtor provided for herein), and (c) authorize the Debtor to issue replacement checks or transfers to the extent any checks or transfers that are issued and authorized to be paid in accordance with this Motion are dishonored or rejected by the Banks.

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IV. The Automatic Stay 22. The Debtor also requests that the Court prevent the Insurers from giving any notice of termination or otherwise modifying or canceling any Insurance Policies without obtaining relief from the automatic stay imposed by Bankruptcy Code section 362. The purpose of this relief is to aid in the administration of the Debtor’s bankruptcy case and to preserve the value of its business operations. The Debtor’s Insurers may be unfamiliar with the protections afforded chapter 11 debtors under Bankruptcy Code section 362, and thus, an order of this Court affirming these protections would help avoid costly and unnecessary litigation. 23. As a result of the commencement of the Debtor’s Chapter 11 Case, and by operation of law pursuant to Bankruptcy Code section 362, the automatic stay prevents all persons from, inter alia, (a) commencing or continuing any judicial, administrative, or other proceeding against the Debtor, (b) taking any action to exercise control over property of the estates, or (c) taking any action to collect, assess or recover a claim against the Debtor that arose before the commencement of such case. See 11 U.S.C. § 362(a). 24. The appropriate procedure for obtaining Court approval of termination under an insurance policy is to seek relief from the automatic stay under the provisions of Bankruptcy Code section 362(d)(1), which require the Court to grant relief for “cause.” In re Adana Mortg. Bankers, Inc., 12 B.R. 983, 988 (Bankr. N.D. Ga. 1980). 25. The injunctions contained in Bankruptcy Code section 362 are self-executing and constitute fundamental debtor protections, which, in combination with other provisions of the Bankruptcy Code, provides the Debtor with a “breathing spell” that is essential to the Debtor’s ability to reorganize. See, e.g., Mar. Elec. Co., Inc. v. United Jersey Bank, 959 F.2d 1194, 1204 (3d Cir. 1991).

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V. Immediate Relief is Justified 26. Pursuant to Bankruptcy Rule 6003, the Court may grant relief within 21 days after the filing of the petition regarding a motion to “use, sell, lease, or otherwise incur an obligation regarding property of the estate” only if such relief is necessary to avoid immediate and irreparable harm. Fed. R. Bankr. P. 6003(b). Immediate and irreparable harm exists where the absence of relief would impair a debtor’s ability to reorganize or threaten the debtor’s future as a going concern. See In re Ames Dep’t Stores, Inc., 115 B.R. 34, 36 n.2 (Bankr. S.D.N.Y. 1990) (discussing the elements of “immediate and irreparable harm” in relation to Bankruptcy Rule 4001). 27. Moreover, Bankruptcy Rule 6003 authorizes the Court to grant the relief requested herein to avoid harm to the Debtor’s customers and other third parties. Unlike Bankruptcy Rule 4001, Bankruptcy Rule 6003 does not condition relief on imminent or threatened harm to the estate alone. Rather, Bankruptcy Rule 6003 speaks of “immediate and irreparable harm” generally. Cf. Fed. R. Bankr. P. 4001(b)(2), (c)(2) (referring to “irreparable harm to the estate”). Indeed, the “irreparable harm” standard is analogous to the traditional standards governing the issuance of preliminary junctions. See 9 Alan N. Resnick & Henry J. Sommer, Collier on Bankruptcy ¶ 4001.07[b][3] (16th ed.) (discussing source of “irreparable harm” standard under Rule 4001(c)(2)). Courts will routinely consider third-party interests when granting such relief. See, e.g., Capital Ventures Int’l v. Argentina, 443 F.3d 214, 223 n.7 (2d Cir. 2006); see also Linnemeir v. Bd. of Trs. of Purdue Univ., 260 F.3d 757, 761 (7th Cir. 2001). 28. As described herein, the Debtor will suffer immediate and irreparable harm without Court authorization for the relief requested herein. Accordingly, Bankruptcy Rule 6003 has been satisfied and the relief requested herein should be granted.

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WAIVER OF BANKRUPTCY RULES 29. To the extent that any aspect of the relief sought herein is subject to Bankruptcy Rule 6003, the Debtor submits that the Court may grant such relief within twenty-one (21) days after the Petition Date because it is necessary to avoid immediate and irreparable harm. See Fed. R. Bankr. P. 6003. 30. In addition, to the extent that any aspect of the relief sought herein constitutes a use of property under Bankruptcy Code section 363(b), the Debtor seeks a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the fourteen (14)-day stay under Bankruptcy Rule 6004(h), to the extent applicable. See Fed. R. Bankr. P. 6004(a), (h). As described above, the relief that the Debtor seeks in this Motion is immediately necessary in order for the Debtor to be able to continue to operate its business and preserve the value of the estate. The Debtor respectfully requests that the Court waive the notice requirements imposed by Bankruptcy Rule 6004(a) and the fourteen (14)-day stay imposed by Bankruptcy Rule 6004(h), as the exigent nature of the relief sought herein justifies immediate relief. RESERVATION OF RIGHTS 31. Nothing contained herein is intended or should be construed as an admission of the validity of any claim against the Debtor, a waiver of the Debtor’s rights to dispute any claim, or an approval, assumption, or rejection of any agreement, contract, or lease under Bankruptcy Code section 365. The Debtor expressly reserves the right to contest any invoice or claim on account of any Insurance Policy under applicable law and to assume or reject any agreements with Insurance Policy providers in accordance with the applicable provisions of the Bankruptcy Code. Likewise, if this Court grants the relief sought herein, any payment made pursuant to the Court’s order is not intended and should not be construed as an admission as to the validity of any claim or a waiver of the Debtor’s rights to dispute such claim subsequently.

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WAIVER OF MEMORANDUM OF LAW 32. The Debtor requests that the Court waive and dispense with the requirement set forth in LBR 7102(b)(2) that any motion filed shall have an accompanying memorandum of law. The legal authorities upon which the Debtor relies are set forth in the Motion. Accordingly, the Debtor submits that a waiver of the requirements set forth in LBR 7102(b)(2) is appropriate under the circumstances. NOTICE 33. Notice of the Motion has been provided to: (a) the Office of the United States Trustee for the District of New Hampshire; (b) counsel to the New Hampshire Insurance Department; (c) the United States Attorney’s Office for the District of New Hampshire; (d) counsel to UMB Bank, as indenture trustee; (e) the Debtor’s twenty (20) largest unsecured creditors; and (f) any party filing a notice of appearance in this Chapter 11 Case. 34. The Debtor submits that, in light of the nature of the relief requested, no further notice of this Motion is required. NO PRIOR REQUEST 35. No prior request for the relief sought herein has been made to this Court or any other court.

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WHEREFORE, the Debtor respectfully requests entry of interim and final orders, substantially in the forms attached hereto as Exhibit A and Exhibit B, granting the relief requested herein and granting such other relief as is just and proper. Dated: August 30, 2021 /s/ Owen R. Graham HINCKLEY, ALLEN & SNYDER LLP Daniel M. Deschenes (Bar No. 14889) Owen R. Graham (Bar No. 266701) 650 Elm Street Manchester, New Hampshire 03101 Telephone: (603) 225-4334 Facsimile: (603) 224-8350 ddeschenes@hinckleyallen.com -and- Jennifer V. Doran (Pro Hac Vice Pending) 28 State Street Boston, Massachusetts 02109 Telephone: (617) 345-9000 Facsimile: (617) 345-9020 jdoran@hinckleyallen.com -and- POLSINELLI PC Jeremy R. Johnson (Pro Hac Vice Pending) Stephen J. Astringer (Pro Hac Vice Pending) 600 Third Avenue, 42nd Floor New York, New York 10016 Telephone: (212) 684-0199 Facsimile: (212) 684-0197 jeremy.johnson@polsinelli.com sastringer@polsinelli.com Proposed Counsel to the Debtor and Debtor in Possession

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