Case Doc 506 Filed 02/06/19 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF NORTH CAROLINA DURHAM DIVISION

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1 Case Doc 506 Filed 02/06/19 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF NORTH CAROLINA DURHAM DIVISION In re: ) Chapter 11 ) Advanced Sports Enterprises, Inc., et al., 1 ) ) Case No ) (Jointly Administered) ) Debtors. ) ) SECOND OMNIBUS MOTION TO AUTHORIZE THE DEBTORS TO REJECT CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES The above-captioned debtors-in-possession (collectively, the Debtors ), file this Second Omnibus Motion to Authorize the Debtors to Reject Certain Executory Contracts and Unexpired Leases (the Motion ). In support of this Motion, the Debtors respectfully represent as follows: CONTRACTS SOUGHT TO BE REJECTED This motion seeks authority to reject certain executory contracts and unexpired leases. The names of the parties, and the associated contracts and leases sought to be rejected pursuant to this Motion, are attached hereto as Exhibit A. JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C Consideration of this Motion is a core proceeding pursuant to 28 U.S.C. 157(b). Venue of this proceeding is proper before this Court pursuant to 28 U.S.C and The Debtors in this case, along with each Debtor s case number, are: (i) Advanced Sports Enterprises, Inc., Case No ; (ii) Advanced Sports, Inc., Case No ; (iii) Performance Direct, Inc., Case No ; (iv) Bitech, Inc., Case No ; and (v) Nashbar Direct, Inc., Case No Each Debtor is a North Carolina Corporation.

2 Case Doc 506 Filed 02/06/19 Page 2 of 7 2. The predicates for the relief requested herein are sections 365 and 1107 of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code ), and Rule 6006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ). BACKGROUND 3. On November 16, 2018 (the Petition Date ), each of the Debtors filed a voluntary petition with the Court under Chapter 11 of the Bankruptcy Code. 4. The factual background relating to the Debtors commencement of these cases is set forth in detail in the Declaration of Patrick Cunnane in Support of First Day Motions and Applications filed on the Petition Date and incorporated herein by reference. 5. The Debtors have continued in possession of their properties and have continued to manage their businesses as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 6. On November 21, 2018, the Court entered an order in each Debtors case jointly administering the Debtors cases under a single docket. 7. An Official Unsecured Creditors Committee was appointed on November 27, BikeCo, LLC, K&BB Investment Corporation and Amain.com, Inc. (collectively, the Buyers ) were determined to be the successful bidders of the sale of all of the Debtors assets as approved in Court at the hearing on February 1, 2019, subject to Order of the Court approving such sale (the Sale Order ). The Sale Order is expected to be entered on or about

3 Case Doc 506 Filed 02/06/19 Page 3 of 7 February 6, 2019 and the transactions should close on or about the next business day (the Closing ). 2 RELIEF REQUESTED 9. The Debtors have identified certain executory contracts and unexpired leases that are no longer necessary in connection with the operation of their businesses and are not needed for the assets being bought by the Buyers (the Contracts ). As a result, the Debtors seek to reject the Contracts nunc pro tunc to the date of the Closing. 10. Prior to Buyers being named the successful bidders, other potential purchasers expressed a potential desire to continue to operate portions of the Debtors business as a going concern which might have included the Contracts. Given the fluidity of the Sale, it was impossible for the Debtors to establish which executory contracts it should reject prior to the Closing. 11. After the Closing, the Contracts will provide no benefit to the Debtors estates and should be rejected as soon as possible. Every day of delay potentially accrues unnecessary and burdensome administrative expenses to the estates. As a result, the Debtors should be permitted to reject the Contracts as soon as the date of the Closing in order to preserve the estates assets. 12. The Debtors are also requesting expedited consideration of this Motion with a motion to shorten notice and schedule and expedited hearing, filed contemporaneously with this Motion. 13. Exhibit A contains an alphabetical listing by Debtor of the parties and the corresponding contracts and leases to be rejected, in compliance with Fed. R. Bankr. 6006(f). 2 The Debtors reserve the right to withdraw this Motion in the event that the Closing does not occur.

4 Case Doc 506 Filed 02/06/19 Page 4 of Sections 365(a) and 1107 of the Bankruptcy Code authorize a debtor-in-possession to reject any executory contract or unexpired lease, subject to bankruptcy court approval. 15. Although section 365(a) does not provide a standard for determining when rejection is appropriate, bankruptcy courts have traditionally applied the business judgment standard in determining whether to permit the rejection of an executory contract or unexpired lease. See NLRB v. Bildisco & Bildisco, 465 U.S. 513, 523 (1984); Lubrizol Enterprises., Inc., v. Richmond Metal Finishers (In re Richmond Metal Finishers, Inc.), 756 F. 2d 1043, (4 th Cir. 1985), cert. denied, 475 U.S (1986); In re Minges, 602 F. 2d 38, 42 (2d Cir. 1979). The decision to reject a lease or executory contract is to be accepted unless it is shown that the debtor s decision was one taken in bad faith or in gross abuse of the debtor s retained business discretion. Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, supra. 16. The contracts and leases sought to be rejected in this motion include various service and sponsorship agreements, printer leases, website and data management agreements, and other contracts, as well as the real estate lease for Performance Direct, Inc. s West Virginia call center. These contracts and leases are not necessary in connection with the Debtors operations, nor will they be necessary in connection with any sale of the Debtors assets. Therefore, the Debtors have satisfied the business judgment standard in seeking rejection of these Contracts. NOTICE Pursuant to this Court s Order Establishing Notice and Administrative Procedures, notice of this Motion shall be provided to the Master Service List and all parties identified in Exhibit A. In light of the nature of the relief requested, the Debtors submit that no further notice is necessary.

5 Case Doc 506 Filed 02/06/19 Page 5 of 7 CONCLUSION WHEREFORE, the Debtors respectfully request that the Court enter an Order: (a) authorizing the Debtors to reject, pursuant to 11 U.S.C. 365, the executory contracts and unexpired leases identified in Exhibit A attached hereto, nunc pro tunc to the date of the Closing; and (b) granting the Debtors such other and further relief as is just and proper. Dated: February 6, 2019 Respectfully submitted, NORTHEN BLUE LLP /s/ John A. Northen John A. Northen North Carolina State Bar No jan@nbfirm.com Vicki L. Parrott North Carolina State Bar No vlp@nbfirm.com John Paul H. Cournoyer North Carolina State Bar No jpc@nbfirm.com 1414 Raleigh Road, Suite 435 Chapel Hill, North Carolina Telephone: (919) COUNSEL FOR THE DEBTORS-IN-POSSESSION FLASTER/GREENBERG P.C. William J. Burnett (PA Bar No ) (pro hac vice) Harry J. Giacometti (PA Bar No ) (pro hac vice) Damien Nicholas Tancredi (PA Bar No ) (pro hac vice) 1835 Market Street, Suite 1050 Philadelphia, PA (215) Telephone (215) Facsimile william.burnett@flastergreenberg.com

6 Case Doc 506 Filed 02/06/19 Page 6 of 7 EXHIBIT A

7 Case Doc 506 Filed 02/06/19 Page 7 of 7 Debtor Name Other identified debtor(s) Counter-Party Address 1 Address 2 City State Zip Nature of Agreement Bitech, Inc. Amazon Services, LLC 410 Terry Avenue North Seattle WA Retail store bike build service agreement Bitech, Inc. American Cancer Society, Inc. 250 Williams Street Atlanta GA Corporate sponsorship agreement Advanced Sports Enterprises, Inc Performance Inc. American Diabetes Association 2451 Crystal Drive Suite 900 Arlington VA Corporate sponsorship agreement Advanced Sports Enterprises, Inc Performance Inc. CA Washington, LLC 3216 NE 45th Place Suite 306 Seattle WA Website CSE management Performance Direct, Inc. Carolina Pure Water Systems, LLC 5617 Departure Drive Ste 102 Raleigh NC Drinking water system Bitech, Inc. Cisco Systems Capital Corp Old Eagle School Road Wayne PA CISCO SYSTEMS (LEASE TFV126113) - WAREHOUSE PRINTERS Advanced Sports Enterprises, Inc Performance Inc. Commission Junction, Inc. 530 East Montecito Street Santa Barbara CA Website affiliate marketing management Performance Direct, Inc. envista Interactive Solutions, LLC dba Enspire Commerce N. Meridian Street Suite 300 Carmel IN SaaS agreement drop-ship management Advanced Sports Enterprises, Inc. Performance Inc. IBM Corporation/Sirius Computer Solutions Inc Highland Parkway Smyrna GA IBM service extension support i Series Advanced Sports Enterprises, Inc Performance Inc. Quad Graphics Inc. N61 W23044 Harry's Way Sussex WI Printing of marketing flyers Bitech, Inc. Performance Inc. Synchrony Bank 950 Forrer Boulevard Kettering OH Retail store customer financing program Advanced Sports Enterprises, Inc Performance Inc. Yext, Inc. Dept CH Palatine IL Data management of business locations Real Estate Lease for West Virginia Call Center Performance Direct, Inc. Lester Development Corp PO Drawer 4991 Martinsville VA CONTACT CENTER LEASE BECKLEY, WV