Sample Management

Severance Agreement

(Preconfirmation)

This Appendix includes a motion to approve severance agreements for members of a debtor's senior and mid-level management, a form of the severance agreement, and a bankruptcy court order approving those agreements. The severance terms are representative of the types of severance terms ordinarily given to management personnel in order to ensure their continued dedication to the debtor during a Chapter 11 restructuring. The specific terms of particular severance agreements in particular cases will almost always depend on the applicable pre-bankruptcy severance arrangements already in place, creditor confidence in the debtor's management, and what can be lengthy negotiations among the debtor and creditor constituencies. This sample is taken from the 1998 Unison Healthcare Corp. reorganization in Phoenix involving a nationwide nursing home operator, and was used primarily to retain the services of Unison's senior-most executives, but also included lower-level management. This agreement was negotiated with an Unsecured Creditors' Committee as well as an Ad Hoc Committee of Bondholders.

Executive Guide to Corporate Bankruptcy

Thomas J. Salerno, Esq.

Jordan A. Kroop, Esq.

SQUIRE, SANDERS & DEMPSEY, L.L.P.

40 North Central Avenue, Suite 2700

Phoenix, Arizona 85004

(602) 528-4000

Attorneys for Debtors

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF ARIZONA

UNISON HEALTHCARE CORPORATION ("Unison"), and its affiliated Debtors and Debtors-In-Possession in the above-captioned Chapter 11 Cases (the "Debtors"), by and through their undersigned counsel, move the Court for an Order under sections 105(a), 363(b), and 365(a) of Title 11 of the United States Code (the "Bankruptcy Code") authorizing the Debtors to adopt and implement certain severance benefit packages for certain of its senior and mid-level management as a necessary inducement for continued service during the pendency of these Chapter 11 cases and authorizing the Debtors to assume certain executory employment contracts.

Background

On January 7, 1998 (the "Britwill Petition Date"), Debtors Britwill Investments-I, Inc., Britwill Investments-II, Inc., and Britwill Indiana Partnership (the "Britwill Debtors") filed their respective petitions for relief under Chapter 11 of the Bankruptcy Code. The Britwill Debtors continue to operate their businesses and manage their properties as debtors-in-possession under Bankruptcy Code §§ 1107(a) and 1108.

On May 28, 1998 (the "Unison Petition Date"), the Debtors filed their respective petitions for relief under Chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and manage their properties as debtors-in-possession under Bankruptcy Code §§ 1107(a) and 1108.

Sample Management Severance Agreement

The Debtors are primarily engaged in the business of providing comprehensive long-term and specialty healthcare services. The majority of the Debtors' operating entities are dedicated to operating approximately 32 skilled nursing facilities located in five states clustered in the Midwest, Southwest, and Southeast. In addition, certain Debtors operate entities which act as suppliers of certain laboratory, pharmacy, and rehabilitation, respiratory, and therapy services, supplying products and services to the Debtors' healthcare facilities as well as to other, non-affiliated facilities.

Since well before the Unison Petition Date, the Debtors have been engaged in extensive restructuring negotiations with their largest creditors. The Debtors' senior management played a critical role in these prepetition negotiations, which led ultimately to the completion, shortly after the Unison Petition Date, of a consensual "term sheet," setting forth the basic terms of a plan of reorganization in these cases. While the eventual plan or plans of reorganization to be filed in these cases will undoubtedly depart from certain items set forth in the term sheet, the term sheet has remained the critical operative document driving continued negotiations of what the Debtors desire to be a fully consensual plan process. Without the tireless, expert assistance of the Debtors' senior management, these cases would not have enjoyed anything close to the progress achieved to this point.

In order to continue working toward the formulation and confirmation of a plan or plans of reorganization in these cases, the Debtors will require the continued efforts and expertise of its senior management. Moreover, in order to maintain operation of the Debtors' businesses and preserve and enhance the Debtors' estates in anticipation of plan confirmation, the Debtors must avoid to the fullest extent possible any disruption in the midlevel management ranks.

Severance Packages

Therefore, in order to induce senior and midlevel management employees to remain in the Debtors' employ and to continue to serve the creditors' interests during the pendency of these cases, the Debtors seek this Court's authorization to adopt and implement severance benefit packages (the "Severance Packages") for their key management personnel.

The management employees eligible for one of the Severance Packages are set forth on the attached Exhibit A. The identities of these employees are subject to minor change pending final approval of this Motion by the Court.

Senior Severance Packages. The Debtors propose that the five senior management employees identified as "Group 1" on Exhibit A ("Senior Management") receive, subject to the conditions below, a Senior Severance Package comprised of one year's salary payable in the event of an involuntary termination without cause on or before three months after the effective date of a plan or plans of reorganization in these cases (the

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"Effective Date"):

1. The board of directors of reorganized Unison (or a committee appointed by the board), as it exists after the Effective Date, will evaluate the Senior Management within three months after the Effective Date to determine:

a) which members of Senior Management will be given employment contracts ("New Contracts") after the Effective Date, which must be in substantially the same form as the existing employment contracts between the Debtors and Senior Management, at substantially similar compensation terms as currently existing, and contain not less than twelve months severance (specifically excluding any terms or provisions contained in the executive severance agreements dated as of April 30, 1998 (the "Severance Agreements"), the Court's approval for which is sought in this Motion;

b) the terms of those New Contracts; and

c) the terms of participation in certain options and cash bonuses arising under the terms of an eventual plan of reorganization;

2. If any member of Senior Management declines to accept an offered New Contract, that member may be terminated without a Severance Package;

3. On the Court's approval of the Senior Severance Packages, each member of Senior Management will have waived and released all other claims for severance or other termination payments as may have existed before the Unison Petition Date or the Britwill Petition Date, as applicable, other than the Closing Costs Reimbursement, and the terms of the Senior Severance Packages as set forth here supersede and replace, in their entirety, any prepetition severance or termination agreements or arrangements.

Mid-Level Severance Packages. The Debtors propose that the individuals identified on Exhibit A as "Group 2" (the "Mid-Level Management") receive, subject to the following modifications and provided they agree to remain through the Interim Period, the one-year's salary severance payment provided in their existing employment contracts, which will remain in full force and effect in accordance with their assumption under Bankruptcy Code § 365(a) by the Debtors (authorization for which is also sought in this Motion):

1. A sale of Quest Pharmacies, Inc. ("Quest") will not constitute an involuntary termination for purposes of entitlement to Mid-Level Severance Package benefits for Mr. Wayne Oberfield or Mr. Dan Roberts.

2. No severance payments will be made, and any severance rights will expire:

Sample Management Severance Agreement

a) for Mr. Robert Oberfield, on Unison's purchase of the 25% interest in Quest from Mr. Robert Oberfield; and

b) for Mr. Paul Henderson and Mr. Paige Plash, on the sale of Sunbelt Therapy Management Services, Inc.

3. On the Court's approval of the Mid-Level Severance Packages, each member of Mid-Level Management will have waived and released all other claims for severance or any other termination payments (whether contained in employment contracts or otherwise) as may have existed before the Unison Petition Date or the Britwill Petition Date, as applicable, and the terms of the Mid-Level Severance Packages supersede and replace, in their entirety, any prepetition severance or termination agreements or arrangements.

Other Management. The Debtors propose that the individuals identified on Exhibit A as "Group 3" through "Group 6" (the "Other Management") receive, provided they agree to remain through the Interim Period, the severance rights set forth on Exhibit A.

Maintenance Of Status Quo. Other than the revisions to severance rights as set forth above, the basic terms of employment of Senior Management, Mid-Level Management and Other Management (such as compensation, insurance and other benefits, etc.) will remain in full force and effect throughout the Interim Period (specifically excluding the Severance Agreements).

Severance Agreements. The Severance Packages described above are incorporated and constitute the terms of the Severance Agreements, a form of which is attached as Exhibit B, and as a means of adoption and implementation of the Severance Packages, the Debtors seek authority to execute and enter into the Severance Agreements.

Severance Packages are Necessary and Appropriate

Without the immediate adoption of the Severance Packages as a necessary incentive, the Debtors believe, in their best business judgment, that certain of these critical management employees will refuse to remain with the Debtors during the difficult period between now and the confirmation of a plan or plans of reorganization (the "Interim Period") still ahead in these cases. If a large number of management employees were to resign before the Debtors are able to fully implement the restructuring of their operations, the Debtor's efforts to successfully reorganize would be severely undermined.

Moreover, the implementation of the Severance Packages is essential in helping to alleviate the natural anxiety of the Debtors' management employees attendant to these cases and the potentially different management agendas of creditor groups engaged in plan negotiations with the Debtors. Only if these key employees realize that the Debtors will con

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tinue to value their contributions in the post-petition period will those employees continue to dispatch their responsibilities with the same dedication and commitment as they did before the Petition Date. Accordingly, authorizing the Debtors to adopt the Severance Packages for management-level employees will enable all of the Debtors' employees to focus their attention on performing their duties during the pendency of these cases without the worry that the Debtors' management employees will resign, creating organizational lapses and inefficiencies.

Assumption of Mid-Level Management Contracts

As indicated above, the Debtors also seek authorization under Bankruptcy Code § 365(a) to assume the executory employment contracts of the members of Mid-Level Management. It is settled law that the decision to assume or reject an executory contract or unexpired lease under Bankruptcy Code § 365(a) is within the debtor's reasonable business judgment, a test that requires a showing that either assumption or rejection of the executory contract at issue will benefit the debtor's estate. NLRB v. Bildisco & Bildisco, 465 U.S. 513 (1984).

The Debtors submit that assumption of the Mid-Level Management employment contracts, which govern the terms and conditions of employment for members of Mid-Level Management, as well as their severance and termination benefits, represents the sound exercise of the Debtors' best business judgment. The continued service and dedication of Mid-Level Management is critical to the ongoing operation of the Debtors' businesses, which ultimately inures to the benefit of all creditors. Without the ability to maintain the status quo with respect to the employment terms of these employees, the Debtors will be unable to induce these employees to remain with the Debtors during the difficult stage ahead before the Effective Date. Assumption of these employment contracts indicates to these employees that the Debtors do not intend this reorganization to imperil their continued employment, allowing the employees to focus their attention solely on their responsibilities to continuing operations. Moreover, because the Debtors believe that certain members of Mid-Level Management have at very most minor prepetition claims for compensation, any cure payments arising from the assumption of the employment contracts will be insignificant when compared to the benefit to ongoing operations and the Debtors' estates and creditors. Accordingly, the Debtors request that the Court authorize the assumption of the Mid-Level Management employment contracts.

Conclusion and Relief Requested

Accordingly, the Debtors respectfully request that the Court:

1) Enter the proposed "Order Approving Management Severance Packages and Granting Related Relief," attached as Exhibit C; and

Sample Management Severance Agreement

2) Grant any additional relief as the Court deems just and proper.

RESPECTFULLY SUBMITTED this 10th day of August, 1998.

SQUIRE, SANDERS & DEMPSEY, L.L.P.

By: /s/ Thomas J. Salerno Thomas J. Salerno, Esq.

Jordan A. Kroop, Esq.

40 North Central Avenue, Suite 2700

Phoenix, Arizona 85004

(602) 528-4000

Attorneys for Debtors

Executive Guide to Corporate Bankruptcy

EXHIBIT A

Sample Management Severance Agreement

EXECUTIVE SEVERANCE AGREEMENT

THIS EXECUTIVE SEVERANCE AGREEMENT ("Agreement") is made and entered into as of April 30, 1998, by and among UNISON HEALTHCARE CORPORATION, a Delaware corporation (the "Company"), and [NAME] ("Executive").

WHEREAS, the Company desires to retain Executive, and Executive desires to continue to serve, as an officer and employee of the Company, on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.Definitions. For purposes of this Agreement, the following terms are defined:

(a) "Company" means and includes the Company and any subsidiary thereof and any successor or assign unless the context indicates otherwise.

(b) "Effective Date" means the last to occur of:

(i) the first business day that is at least eleven (11) days after the date on which the United States Bankruptcy Court enters an order (the "Confirmation Order") confirming a plan or reorganization (the "Plan") in the Company's Chapter 11 case and on which no stay of the Confirmation Order is in effect; and

(ii) the business day on which all conditions to confirmation and effectiveness of the Plan have been satisfied or waived.

(c) "Cause" means:

(i) the Executive has been convicted of (or pleads guilty to) a felony; or

(ii) the Executive has engaged in willful misconduct or gross negligence in the performance of his employment duties to the Company.

(d) "Good Reason" means any of the following:

(i) The Company's failure to elect or reelect, or to appoint or reappoint, Executive to offices or positions involving duties, responsibilities, authority and dignity of a scope comparable to those of Executive's most significant offices or positions held at any time during the 90-day period immediately pre

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ceding the Effective Date;

(ii) Material change by the Company in the Executive's function, duties or responsibilities (including reporting responsibilities) to a scope less than that associated with Executive's most significant position with the Company during the 90-day period immediately preceding the Effective Date;

(iii) Executive's base salary is reduced by the Company;

(iv) Relocation of the Company's corporate headquarters or Executive's principal place of employment to a place located outside of the greater Phoenix metropolitan area; provided that required travel on the Company's business shall not be deemed a relocation so long as Executive is not required to be outside of the greater Phoenix metropolitan area for a period of time that is greater than the period of time he was required to be outside of the greater Phoenix metropolitan area for the twelve month period immediately preceding the Effective Date.

(e) Unless specifically stated to the contrary, all references to "days" and "months" mean calendar days and calendar months, respectively.

(f) "Board" means the Board of Directors of the Company, or a Committee of the Board designated by the Board to fulfill one or more of the Board's responsibilities under this Agreement.

2. Termination by the Company for Cause.

(a) The Company retains the right to terminate Executive's employment for Cause on or before three (3) months after the Effective Date. If Executive's employment is terminated for Cause, Executive will not be entitled to the Severance Benefits described in Paragraph 5 of this Agreement and the Company will have no further liability or obligation to Executive except for amounts earned or accrued under Company sponsored benefit plans before such termination.

(b) No later than three (3) months after the Effective Date, the post-Effective Date Board, if it wishes to continue Executive employment, must present Executive with a new employment contract (the "New Contract"), substantially in the same form and with substantially similar compensation terms (including not less than twelve (12) months severance benefits but specifically excluding any terms or provisions contained in this Agreement) as Executive's then-existing employment contract. If Executive refuses to accept an offered New Contract, the Company retains the right to terminate Executive's employment at any time after Execu

Sample Management Severance Agreement

tive's refusal of the New Contract and Executive waives the right to receive the Severance Benefits described in Paragraph 5 of this Agreement.

3. Termination by the Company Without Cause. The Company retains the right to terminate Executive's employment on or before three (3) months after the Effective Date without Cause upon written notice to Executive. In such event, Executive will be entitled to the Severance Benefits described in Paragraph 5 of this Agreement.

4. Termination By Executive for Good Reason.

(a) If Executive does not receive a new contract of employment on or before three (3) months after the Effective Date, Executive will have the right to terminate his employment with the Company at any time after three (3) months after the Effective Date and such termination will be deemed a termination for Good Reason, entitling Executive to receive Severance Benefits described in Paragraph 5 of this Agreement as if the Company had terminated Executive without Cause.

(b) Executive retains the right to terminate his employment with the Company at any time on or before three (3) months after the Effective Date for Good Reason. In such event, subject to the provisions set forth in subparagraph (c) of this paragraph, Executive will receive Severance Benefits described in Paragraph 5 of this Agreement as if the Company had terminated Executive without Cause.

(c) Any termination by the Company without Cause or by the Executive for Good Reason must be communicated by written notice (the "Notice of Termination") to the other party. The Executive's Termination Date will be the date specified in the Notice of Termination where required or in any other case the date upon which the Executive ceases to perform services for the Company; provided that if within thirty days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Termination Date will be the date finally determined to be the Termination Date, either by mutual written agreement of the parties or by binding arbitration in the manner provided in Paragraph 5 below; provided further that the Termination Date will be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue to pay the Executive his full compensation in effect when the notice giving rise to the dispute was given and

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continue the Executive as a participant in all compensation, benefit and insurance plans in which he was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved in accordance with this subparagraph. Amounts paid under this subparagraph are in addition to all other amounts due under this Agreement and are not to be offset against or used to reduce any other amounts due under this Agreement. However, if the arbitrator determines that the Executive did not terminate for Good Reason or that the Company terminated the Executive for Cause, the Executive must repay the Company the amount of compensation paid to the Executive pursuant to this subparagraph from the Termination Date specified in the Notice of Termination, plus interest thereon at the applicable federal rate provided for in Section 1274(d) of the Internal Revenue Code of 1986, as amended (the "Code") or any successor provision thereof, for an obligation with a term equal to the period from the date of payment to the date of repayment pursuant to this subparagraph.

5. Post-Termination Severance Benefits.

(a) If Executive terminates his employment for Good Reason under Paragraph 4 above, or if the Company terminates Executive's employment without Cause under Paragraph 3 above, the Company must pay to Executive "Severance Benefits," constituting liquidated damages, comprised of:

(i) A lump sum amount equal to twelve (12) months of base salary at the Executive's salary rate in effect as of the Termination Date (as defined below). In addition, the Company must pay to Executive all compensation that Executive earned but remains unpaid as of the Termination Date. All such amounts are to be paid in one lump sum on the Termination Date;

(ii) The Company must maintain in full force and effect for the Executive's continued benefit and the benefit of his eligible beneficiaries, for a period of twelve (12) months following the Termination Date, the employee benefits under the Company's health plan(s) that he or they were eligible to receive immediately before the Termination Date, subject to the terms and conditions of such plan(s); provided that his continued participation or the participation of such eligible dependents or beneficiaries is possible under the general terms and provisions of such plan(s). In the event that the Executive's participation or the participation of such eligible dependents or beneficiaries in any such plan(s) is barred, the Company must arrange to provide him or such eligible dependents or beneficiaries for such period with health benefits substantially similar to those that the Executive and such eligible dependents or

Sample Management Severance Agreement

beneficiaries are entitled to receive under such plan(s) as of the Termination Date;

(iii) Executive will have the right to exercise, for a period of twelve (12) months following the Termination Date, all vested unexercised stock options and any restricted stock awards outstanding at the Termination Date. Such exercise will be limited by and in accordance with the terms of the plans and agreements pursuant to which such options were issued; and

(iv) If at the Termination Date Executive holds stock options and/or restricted stock awards not then vested or exercisable, all such options and restricted stock awards will immediately vest and become exercisable in accordance with their terms for a period of twelve (12) months from the Termination Date.

6. No Right of Set-Off; No Obligation to Mitigate; Indemnification.

(a) The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement are not to be affected by any set-off, counterclaim, recoupment, defense or other claim, right, or action which the Company may have against the Executive or others. In no event will the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of the Agreement and such amounts are not to be reduced whether or not the Executive obtains other employment.

(b) The Company intends that Executive should not be required to incur the expenses associated with the enforcement of his rights under this Agreement because the such expenses would substantially detract from the benefits intended to be extended to him under this Agreement, nor be bound to negotiate any settlement of his rights under this Agreement under threat of incurring all of such expenses. Accordingly, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, the Company must indemnify Executive for all legal costs and fees (including without limitation, attorneys' fees, retainers, arbitration costs, charges for transcripts, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage and delivery service fees, and all other disbursements or out-of-pocket expenses) that Executive incurs by asserting or defending his rights under this Agreement. The Company will be obligated to reimburse Executive for the fees and expenses of his chosen counsel on a regular, periodic basis upon presentment by him of a

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statement or statements prepared by such counsel in accordance with its customary practices, but in no event later than 45 days after such presentment. If such fees and expenses are not reimbursed within 45 days of presentment, the Company must pay Executive interest running from the date of such presentment at the applicable federal rate provided for in Section 1274(d) of the Code, or any successor provision thereof, for an obligation with a term equal to the length of such delay.

7. Arbitration. Any dispute or controversy arising under or in connection with this Agreement must be settled exclusively by arbitration in Phoenix, Arizona in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Executive is entitled to seek specific performance of his right to be paid during the pendency of any dispute or controversy arising under or in connection with this Agreement pursuant to Paragraph 4(c) above.

8. Miscellaneous.

(a) This Agreement and all rights provided for under this Agreement are personal to Executive and may not be assigned by him. Any purported assignment is null and void and not binding on the Company. This Agreement is binding upon, and inures to the benefit of, Executive and the Company and their respective successors and assigns.

(b) Except as required by law, no right to receive payments under this Agreement is subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect such action is null, void, and of no effect.

(c) This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. No term or condition of this Agreement is to be deemed to have been waived, nor is there to be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver is to be deemed a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and will not constitute a waiver of such term or condition for the future or as to any act other than specifically waived. This Agreement represents the entire agreement of the parties with respect to the subject matter contained herein.

Sample Management Severance Agreement

9. Severability. If for any reason any provision of this Agreement is held invalid, such invalidity does not affect any other provision of this Agreement not held so invalid, and each such other provision will, to the full extent consistent with law, continue in full force and effect. If any provision of this Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, will, to the full extent consistent with law, continue in full force and effect. The parties desire and intend that, if any provision in this Agreement is adjudicated to be invalid or unenforceable by reason of its scope in terms of area, length of time or otherwise, but may be enforceable by limitations thereon, a reviewing court is authorized and empowered by the parties to re-write any such provision to make it enforceable to the maximum extent permissible under law.

10. Notices. All notices, requests, demands and other communications that are required or may be given pursuant to this Agreement must be in writing and will be deemed to have been duly given if delivered personally or sent by certified mail, postage prepaid, as follows:

(a) If to the Company:

UNISON HEALTHCARE CORPORATION

8800 North Gainey Center Drive, Suite 245

Scottsdale, Arizona 85258

(b) If to Executive, to him at:

____________________________________

____________________________________

____________________________________

or such other address as any party hereto designates by notice in writing to the other party. All such notices, requests, demands and communications are to be deemed to have been given on the date of delivery, or, if given by certified mail, on the second business day after mailing.

11. Amendment of Prior Agreements. All prior agreements between the Company and Executive relating to Executive's employment are amended to the extent necessary to be consistent with the terms and conditions of this Agreement, with the terms and conditions of this Agreement controlling in the event of any inconsistency.

12. Headings. The headings of paragraphs herein are included solely for convenience of reference and do not control the meaning or interpretation of any provision of this Agreement.

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13. Governing Law. This Agreement has been executed and delivered in the State of Arizona, and its validity, interpretation, performance, and enforcement are governed by the internal laws of Arizona.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officers, and Executive has signed this Agreement, all as of the day and year first written above.

COMPANY:

UNISON HEALTHCARE CORPORATION, a Delaware corporation

By _________________________________________

Its ________________________________

EXECUTIVE:

____________________________________________

(Signature)

_________________________________________

(Printed Name)

Sample Management Severance Agreement

FOR THE DISTRICT OF ARIZONA

This matter is before the Court on the "Motion For Order Approving Management Severance Packages And Granting Related Relief" of UNISON HEALTHCARE CORPORATION ("Unison"), and its affiliated Debtors and Debtors-In-Possession indicated above (the "Debtors"), dated August 10, 1998 (the "Motion"); the Court having reviewed the Motion; the Court being apprised of the "Kremser Group Response to Motion for Order Approving Management Severance Packages," dated August 28, 1998 (the "Kremser Objection"), the sole objection filed to the Motion; the Kremser Objection having been withdrawn at a hearing before the Court on October 8, 1998; the Court being satisfied that the relief requested in the Motion is necessary and appropriate under the circumstances and under Bankruptcy Code §§ 105(a), 363(b) and 365(a); and after due consideration and reasonable cause appearing therefor,

THE COURT FINDS as follows:

A. The Motion and relief requested therein constitute a "core proceedings" in which this Court may enter final and dispositive orders under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (O) and Bankruptcy Code §§ 105, 363 and 365.

B. Assumption of the employment contracts for the Debtors' Mid-Level Management employees, as described more fully in the Motion, is a valid exercise of the Debtors' reasonable business judgment and is in the best interests of the Debtors' estates and creditors.

C. Adoption and implementation of the Severance Packages described in the Motion and set forth in the Severance Agreements, the form of which is attached to the Motion as Exhibit B, constitute a valid exercise of the Debtors' reasonable business judgment and is essential to the continued operation of the Debtors' businesses, thereby inuring to the benefit of the Debtors' estates and creditors.

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ACCORDINGLY, IT IS HEREBY ORDERED as follows:

1. The Motion is granted in all respects.

2. The Debtors are authorized to adopt and implement the Severance Packages for the individuals identified on Exhibit A to this Order by executing and entering into the Severance Agreements, the form of which, attached as Exhibit B to the Motion, is approved.

3. The Debtors are authorized to assume the employment contracts applicable to all Mid-Level Management employees listed in "Group 2" on Exhibit A to the Motion.

DATED: October 28, 1998

/s/ George B. Nielsen, Jr.

HON. GEORGE B. NIELSEN, JR.

CHIEF UNITED STATES BANKRUPTCY JUDGE