ASSET PURCHASE AGREEMENT
BETWEEN
EARTHSHELL CORPORATION,
a Delaware corporation, as Debtor
and
EARTHSHELL ACQUISITION CORP.,
a Delaware corporation, as Purchaser
Dated as of January 19, 2007
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Additional Definitions . . . . . . . . . . . . . . . . . 9
1.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . 9
1.4 Schedules . . . . . . . . . . . . . . . . . . . . . . . 9
1.5 References to "Herein," or "Including" . . . . . . . . . 9
ARTICLE II PURCHASE AND SALE OF THE ACQUIRED ASSETS; PURCHASE
PRICE . . . . . . . . . . . . . . . . . . . . . . . 10
2.1 Purchase and Sale of the Acquired Assets . . . . . . . . 10
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . 11
2.3 Assumption of Liabilities . . . . . . . . . . . . . . . 12
2.4 Excluded Liabilities . . . . . . . . . . . . . . . . . . 12
2.5 Purchase Price . . . . . . . . . . . . . . . . . . . . . 12
2.6 Allocation of the Final Purchase Price . . . . . . . . . 13
2.7 Contract Rejection and Assumption . . . . . . . . . . . 13
2.8 Cure of Defaults . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III THE CLOSING . . . . . . . . . . . . . . . . . . . . 14
3.1 Time and Place of Closing . . . . . . . . . . . . . . . 14
3.2 Deliveries at Closing . . . . . . . . . . . . . . . . . 14
3.3 Sales, Use and Other Taxes, Prorations . . . . . . . . . 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF DEBTOR . . . . . . 16
4.1 Organization . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Power and Authority . . . . . . . . . . . . . . . . . . 16
4.3 No Violation . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Actions . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 Compliance with Laws . . . . . . . . . . . . . . . . . . 17
4.6 Title to Acquired Assets . . . . . . . . . . . . . . . . 17
4.7 Approvals . . . . . . . . . . . . . . . . . . . . . . . 18
4.8 Broker's or Finder's Fees . . . . . . . . . . . . . . . 18
4.9 Designated Contracts . . . . . . . . . . . . . . . . . . 18
4.10 Intellectual Property . . . . . . . . . . . . . . . . . 18
4.11 "AS IS" Transaction . . . . . . . . . . . . . . . . . . 19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . 20
5.1 Organization and Good Standing . . . . . . . . . . . . . 20
5.2 Power and Authority . . . . . . . . . . . . . . . . . . 20
5.3 No Violation . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Approvals . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Broker's or Finder's Fees . . . . . . . . . . . . . . . 21
ARTICLE VI COVENANTS OF DEBTOR . . . . . . . . . . . . . . . . 21
6.1 Conduct of Business . . . . . . . . . . . . . . . . . . 21
6.2 Acquisition Proposals . . . . . . . . . . . . . . . . . 21
6.3 Access to Debtor . . . . . . . . . . . . . . . . . . . . 22
6.4 Certificate of Service . . . . . . . . . . . . . . . . . 22
ARTICLE VII COVENANTS OF PURCHASER . . . . . . . . . . . . . . . 22
7.1 Adequate Assurance . . . . . . . . . . . . . . . . . . . 22
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ARTICLE VIII AGREEMENTS OF PURCHASER AND DEBTOR . . . . . . . . . 23
8.1 Employees . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Bankruptcy Court Orders . . . . . . . . . . . . . . . . 23
ARTICLE IX CONDITIONS TO PURCHASER'S OBLIGATIONS . . . . . . . . . 25
9.1 Representations and Warranties . . . . . . . . . . . . . 26
9.2 Performance . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Sale Order . . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Material Adverse Change . . . . . . . . . . . . . . . . 26
9.5 Compliance with Laws . . . . . . . . . . . . . . . . . . 26
ARTICLE X CONDITIONS TO DEBTOR'S OBLIGATIONS . . . . . . . . . . . 26
10.1 Representations and Warranties . . . . . . . . . . . . . 27
10.2 Performance . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Sale Order . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE XI COVENANTS AND AGREEMENTS FOLLOWING THE CLOSING . . . . . 27
11.1 Books and Records; Access . . . . . . . . . . . . . . . 27
11.2 Further Assurances . . . . . . . . . . . . . . . . . . . 27
ARTICLE XII TERMINATION . . . . . . . . . . . . . . . . . . . . 28
12.1 Termination . . . . . . . . . . . . . . . . . . . . . . 28
12.2 Effect of Termination . . . . . . . . . . . . . . . . . 28
ARTICLE XIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 30
13.1 Public Announcements . . . . . . . . . . . . . . . . . . 30
13.2 Amendment; Waiver . . . . . . . . . . . . . . . . . . . 30
13.3 No Survival of Representations and Warranties . . . . . 30
13.4 Fees and Expenses . . . . . . . . . . . . . . . . . . . 30
13.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . 31
13.6 Assignment . . . . . . . . . . . . . . . . . . . . . . . 32
13.7 Governing Laws Consent to Jurisdiction . . . . . . . . . 32
13.8 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 33
13.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . 33
13.10 Severability . . . . . . . . . . . . . . . . . . . . . . 33
13.11 No Third Party Beneficiaries . . . . . . . . . . . . . . 34
13.12 Enforcement . . . . . . . . . . . . . . . . . . . . . . 34
13.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . 34
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of January 19, 2007, is
made between EARTHSHELL CORPORATION, a Delaware corporation
("Debtor"), and EARTHSHELL ACQUISITION CORP., a Delaware corporation
("Purchaser").
RECITALS
A. Concurrently herewith, Debtor is commencing the case
entitled In Re: Earthshell Corporation, Debtor (the "Case") under
Chapter 11 of Title 11 of the United States Code (the "Bankruptcy
Code") by filing a voluntary petition in the United States Bankruptcy
Court for the District of Delaware ("Bankruptcy Court") and continues
to operate the Business.
B. Debtor is a Delaware corporation engaged in the business of
licensing of proprietary composite material technology for the
manufacture of foodservice disposable packaging (the "Business").
C. Purchaser desires to purchase from Debtor and Debtor desires
to sell, convey, assign and transfer to Purchaser, the Acquired Assets
(as herein defined), and in connection therewith Purchaser desires to
assume certain specified obligations and liabilities of Debtor related
thereto, all upon the terms and conditions set forth herein and in
accordance with Sections 105, 363, 365 and 1123 of the Bankruptcy Code
(collectively, the "Transactions").
AGREEMENT
In consideration of the premises, the mutual covenants herein
contained and other good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), the parties hereto,
subject to the terms and conditions contained herein, intending to be
legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
1.1 DEFINITIONS
The following terms, as used in this Agreement, shall have
the following meanings:
"Accounts" shall mean all rights of Debtor to payment of a
monetary obligation, whether or not earned by performance, which is
not evidenced by chattel paper or an instrument, (a) for property that
has been or is to be sold, leased, licensed, assigned, or otherwise
disposed of, (b) for services rendered or to be rendered, or (c) for a
secondary obligation incurred or to be incurred.
"Acquired Assets" shall have the meaning ascribed to such term in
SECTION 2.1 hereof.
"Acquisition Documents" shall mean, collectively, this Agreement,
the Xxxx of Sale, the Assignment and Assumption Agreement and all
agreements, instruments, certificates and other documents executed and
delivered in connection herewith or contemplated hereby.
"Action" shall mean any claim, dispute, demand, cause of action
or action asserted in any arbitration, litigation, adversary
proceeding, mediation, suit, investigation or other proceeding and any
appeal therefrom.
"Added Contracts" shall have the meaning ascribed to such term in
SECTION 2.7 hereof.
"Affiliate" shall mean, with respect to any Person, any Person
which, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
Person. As used in this definition, the term "control" (including the
terms "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to (a) vote fifty-one
percent (51%) or more of the voting power of the outstanding voting
securities of such Person, or (b) otherwise direct the management
policies of such Person, by contract or otherwise.
"Agreement" shall mean this Asset Purchase Agreement and shall
include all of the Schedules and Exhibits attached hereto.
"Allocation" shall have the meaning ascribed to such term in
SECTION 2.6, hereof.
"Alternative Transaction" shall mean any transaction occurring
after the Bidding Procedures Order is entered involving the
consummation of the sale of all or a material portion of the Business
pursuant to Section 363(b) of the Bankruptcy Code or a plan of
reorganization under Section 1123 of the Bankruptcy Code to a
purchaser or purchasers other than Purchaser and/or one or more of its
Affiliates at any time during the pendency of the Case.
"Approval" shall mean any approval, authorization, consent,
license, franchise, order or permit of or by, notice to, or filing or
registration with, a Person.
"Assets" shall mean both the Acquired Assets and the Excluded
Assets.
"Assigned Lease" shall mean any lease assigned by Debtor to
Purchaser and assumed by Purchaser hereunder.
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"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement, substantially in the form attached hereto as
EXHIBIT A.
"Assumed Liabilities" shall have the meaning ascribed to such
term in SECTION 2.3 hereof.
"Bankruptcy Code" shall have the meaning ascribed to such term
in the recitals to this Agreement.
"Bankruptcy Court" shall have the meaning ascribed to such term
in the recitals to this Agreement.
"Bidding Procedures Hearing" shall have the meaning ascribed to
such term in SECTION 8.2(b) hereof.
"Bidding Procedures Order" shall have the meaning ascribed to
such term in SECTION 8.2(b) hereof.
"Xxxx of Sale" shall mean the xxxx of sale transferring to
Purchaser the Acquired Assets, substantially in the form attached
hereto as EXHIBIT B.
"Books and Records" shall have the meaning ascribed to such term
in SECTION 2.1(h) hereof.
"Break-up Fee" shall mean cash in an amount equal to $300,000
except that if the Alternate Transaction is a sale of the Acquired
Assets to the holder(s) of the Company's senior secured indebtedness
who have credit bid, the Break-up Fee shall be zero dollars.
"Business" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Business Day" shall mean a day that is not a Saturday, a Sunday
or a day on which banks in the State of Illinois, Maryland or Missouri
are required or authorized to close for regular banking business.
"Case" shall have the meaning ascribed to such term in the
recitals to this Agreement.
"Claim" shall have the meaning ascribed to such term in Section
101(5) of the Bankruptcy Code so long as such Claim arises out of or
relates to the Acquired Assets, the Business or Debtor.
"Closing" shall mean the consummation of the Transactions.
"Closing Date" shall mean the Business Day that is not more than
10 days following the entry of the Sale Order if the Sale Order
contains a Rule 6004(h) waiver, otherwise the Closing Date shall be no
later than the 3rd day after the Sale Order becomes a Final Order, in
any case subject to the satisfaction or waiver of the other conditions
3
to Closing described in Articles IX and X hereof, or such other date
to which Purchaser and Debtor may mutually agree.
"Contract" shall mean each written or oral instrument, contract,
license, sublicense and other agreement, including real property
leases, operating leases, capital leases, unexpired leases of personal
property and other leases, in each case relating to the Business, to
which Debtor is a party or by which Debtor or any of the Acquired
Assets is bound.
"Cure Costs" shall have the meaning ascribed to such term in
SECTION 2.3(a)(ii) hereof.
"Debtor" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Deposit" shall mean cash in an aggregate amount equal to
$350,000.
"Designated Contracts" shall have the meaning ascribed to such
term in SECTION 2.7 hereof.
"Designated Contract List" shall have the meaning ascribed to
such term in SECTION 2.7 hereof.
"DIP Credit" shall mean the senior secured credit extended by
Purchaser to Debtor pursuant to the DIP Financing Order.
"DIP Advances" shall mean the aggregate amount of advances made
by Purchaser to or for the benefit of Debtor pursuant to (a) the DIP
Credit or (b) any other financing agreement which, in the case of this
clause (b), is advanced prior to the date the Deposit is due to be
made hereunder.
"DIP Financing Order" shall mean, collectively, the interim order
and any final order entered in the Case approving the DIP Credit.
"DIP Obligations shall mean the aggregate of all liabilities,
indebtedness and obligations owed from time to time by the Debtor to
Purchaser with respect to the DIP Credit approved pursuant to the DIP
Financing Order.
"Drop Dead Date" shall mean March 30, 2007.
"Effective Time" shall mean 12:01 a.m. on the Closing Date.
"EKI Master License Agreement" shall mean the Amended and
Restated License Agreement dated February 28, 1995, between E.
Khashoggi Industries and Debtor (formerly known as Earthshell
Container Corporation), as amended from time to time.
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"Equipment" shall mean each item of machinery, equipment
(including office equipment), parts, computer hardware, tools, dies,
jigs, patterns, molds, automobiles, trucks, and fixtures owned by
Debtor as of the date hereof or any subsequent replacements or
additions thereto, in each case which has been or is now used by
Debtor in connection with the Business.
"Equipment Leases" shall mean any and all leases of Equipment
included in the Designated Contracts pursuant to which Debtor is the
lessee.
"Escrow Account" shall mean the escrow account established with
Escrow Agent for the purposes of holding the Deposit, in accordance
with the terms hereof.
"Escrow Agent" shall mean X.X. Xxxxxx Trust Company, National
Association, as escrow agent.
"Escrow Agreement" shall mean the Escrow Agreement to be entered
into by and among Purchaser, Debtor and the Escrow Agent, in the form
reasonably acceptable to the parties thereto and consistent with the
terms hereof.
"Excluded Assets" shall have the meaning ascribed to such term in
SECTION 2.2 hereof.
"Excluded Liabilities" shall have the meaning ascribed to such
term in SECTION 2.4 hereof.
"Executory Contracts" shall mean the Contracts of a Debtor which
constitute executory contracts within the meaning of the Bankruptcy
Code.
"Final Order" shall mean an order (the finality of which may be
waived by Purchaser in writing) entered by a court of competent
jurisdiction as to which the time for appellate review has expired
without any party having sought such review or the determination of
any such review by the affirmance of such order.
"Governmental Authority" shall mean any foreign, federal, state,
local or other governmental, administrative or regulatory authority,
body, agency, court, tribunal or similar entity including any
arbitrator or arbitration panel, including the Bankruptcy Court.
"Illinois Court" shall have the meaning ascribed to such term in
SECTION 13.7(c) hereof.
"Intellectual Property" shall mean all of the following that
relate to the operation of the Business: (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice),
all improvements thereto and all United States and foreign patents of
any description, and applications therefor (whether owned or
licensed), including any continuations, continuations-in-part,
5
reissues, registrations, additions or extensions thereof; (b) United
States (federal and state) and foreign trademarks (and goodwill
associated therewith) and other trade names, service marks, domain
names, logos, labels, trade dress, advertising and package designs,
and other trade rights, whether or not registered and all applications
therefor; (c) United States and foreign copyrights, whether or not
registered and all applications therefor (including copyrights in
computer software and computer software documentation, source code.
systems documentation and websites); and (d) know-how, trade secrets,
business leads, research and results thereof, technology, techniques,
data, methods, processes, instructions, drawings and specifications,
websites, software, databases, inventions, discoveries, improvements,
designs, processes, formulae, recipes, shop rights, and other
proprietary rights, (e) license agreements and other agreements of
every kind and character relating to the Business, including the EKI
Master License Agreement and any Sublicense Agreement, and (f) all
Actions relating to any of the foregoing.
"Interest" shall mean any interest of a Person other than Debtor
in and to, or related to, any of the Acquired Assets to the fullest
extent referred to in Section 363(f) of the Bankruptcy Code other than
a Claim or Lien, including any option, right, claim of successor
liability, ownership or other property interest of any type, voting or
other restrictions, right-of-way, covenant, condition, leasehold,
license, easement, encroachment, restriction, other third-party right
or title defect or encumbrance of any nature whatsoever, whether legal
or equitable in nature, secured or unsecured, matured or unmatured,
contingent or non-contingent, liquidated or unliquidated, senior or
subordinated and whether contractual, statutory or common law in
origin.
"Inventory" shall mean, as to Debtor, all of Debtor's goods,
wherever located, which (a) are held by Debtor for sale or lease or to
be furnished under a contract of service; (b) are furnished by Debtor
under a contract of service; or (c) consist of raw materials, work in
process, finished goods, service parts, packaging materials, supplies,
or materials used or consumed in the Business.
"Knowledge" shall mean the actual knowledge (as opposed to
imputed or constructive) of Xxxxx Xxxxxx, Xxxxx Xxxxxxx and any other
individual identified by Purchaser in writing delivered to Seller
prior to the Closing.
"Law" shall mean any law, statute, rule, regulation, ordinance,
standard, requirement, administrative ruling, order or process
promulgated by any Governmental Authority as in effect from time to
time (including any zoning or land use law or ordinance, building
code, securities, blue sky, civil rights or occupational health and
safety law or regulation and any court, administrative agency or
arbitrator's order or process).
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"Liability" shall mean any debt, liability, commitment,
responsibility, cost, expense and guaranty, warranty or obligation of
any kind, character or nature whatsoever, whether based in common law
or statute or arising under written contract or otherwise, known or
unknown, primary or secondary, direct or indirect, xxxxxx or inchoate,
secured or unsecured, tangible or intangible, real or potential,
fixed, absolute, contingent or otherwise, and whether or not accrued
or due or to become due.
"Licenses" shall have the meaning ascribed to such term in
SECTION 4.10 hereof.
"Lien" shall have the meaning ascribed to such term in Section
101(37) of the Bankruptcy Code, including any statutory lien, pledge,
mortgage, security interest, charge, conditional sale or other title
retention agreement, or encumbrance of any kind or nature in or to the
Acquired Assets to secure payment of a debt or performance of an
obligation.
"Material Adverse Change" shall mean any change or effect that
is, or reasonably likely would result in, a material adverse change in
the Acquired Assets or the Business, in each case taken as a whole.
"Other Personal Property" shall mean all personal property
(including parts, furniture and furnishings), other than Equipment,
Receivables, Intellectual Property and Inventory, owned, held or
leased by Debtor, in each case in connection with the operation of the
Business.
"Person" shall mean any individual, general or limited
partnership, corporation, limited liability company, association,
business trust, joint venture, Governmental Authority, business entity
or other entity of any kind or nature.
"Petition Date" shall mean January 19, 2007 on which an order for
relief was entered in the Case.
"Post-Petition Operating Accruals" shall mean the unpaid
operating accruals of Debtor as of the Effective Time which accrued on
or following the Petition Date.
"Post-Petition Trade Debt" shall mean the unpaid trade debt of
Debtor as of the Effective Time which accrued on or following the
Petition Date.
"Purchaser" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Purchase Price" shall have the meaning ascribed to such term in
SECTION 2.5 hereof.
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"Purchase Price Offsets" means, without duplication, the sum of
(a) the DIP Obligations, (b) the Break-up Fee if Purchaser has become
the successful bidder after bidding a price in excess of a bid by
another qualified bidder, (c) Cure Costs (provided that Cure Costs
with respect to any Designated Contract, other than a license
agreement constituting a Designated Contract, shall only constitute a
Purchase Price Offset to the extent such costs do not exceed $10,000)
and (d) to the extent assumed by Purchaser pursuant to this Agreement,
the Post-Petition Trade Debt and the Post-Petition Operating Accruals.
"Receivables" shall mean all of the following now owned or
hereafter arising or acquired property of Debtor: (a) all Accounts;
(b) all interest, fees, late charges, penalties, collection fees and
other amounts due or to become due or otherwise payable to Debtor in
connection with any Account; (c) all payment intangibles of such
Debtor (as said term is used in Article 9 of the Uniform Commercial
Code, as enacted in the State of Illinois); (d) letters of credit,
indemnities, guarantees, security or other deposits and proceeds
thereof payable to Debtor or otherwise in favor or for the benefit of
or delivered to Debtor in connection with any Account; or (e) all
other accounts, contract rights, chattel paper, instruments, notes,
general intangibles and other forms of obligations owing to Debtor,
whether from the sale and lease of goods or other property, licensing
of any property, rendition of services or from loans or advances by
Debtor or to or for the benefit of any third person (excluding loans
or advances to any Affiliates or Subsidiaries of Debtor) or otherwise
associated with any Accounts, Inventory or general intangibles of
Debtor (but excluding the Excluded Assets).
"Representative" shall mean, with respect to a Person, any
employee, officer, director, stockholder, partner, accountant,
attorney, investment banker, broker, finder, investor (or potential
investor), subcontractor, consultant or other authorized agent or
representative of such Person.
"Sale Hearing" shall have the meaning ascribed to such term in
SECTION 8.2(c) hereof.
"Sale Hearing Notice" shall have the meaning ascribed to such
term in SECTION 8.2(b) hereof.
"Sale Order" shall have the meaning ascribed to such term in
SECTION 8.2(c) of this Agreement.
"Schedules" shall mean the schedules annexed hereto and made a
part hereof.
"Sublicense Agreement" shall mean any Contract (as amended from
time to time) pursuant to which Debtor licenses or sublicenses to any
Person any Intellectual Property (including Intellectual Property
licensed to Debtor), including any such Contract between Debtor, as
licensor or sublicensor (as the case may be), and any of Purchaser,
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Assembly & Test Worldwide, Inc., Earthshell Xxxxxxx X.X. de C.V. or
Earthshell Asia, as licensee or sublicensee (as the case may be).
"Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company, partnership, association, or
other business entity of which (i) if a corporation, a majority of the
total voting power of shares of stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a
limited liability company, partnership, association, or other business
entity (other than a corporation), a majority of partnership or other
similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of
that Person or a combination thereof and for this purpose, a Person or
Persons owns a majority ownership interest in such a business entity
(other than a corporation) if such Person or Persons shall be
allocated a majority of such business entity's gains or losses or
shall be or control any managing director or general partner of such
business entity (other than a corporation). The term "Subsidiary"
shall include all Subsidiaries of such Subsidiary.
"Tax" or "Taxes" shall mean all taxes, assessments, charges,
duties, fees, levies, imposts or other governmental charges, including
all federal, state, local, municipal, county, foreign and other
income, franchise, profits, capital gains, capital stock, capital
structure, transfer, gross receipt, sales, use, transfer, service,
occupation, ad valorem, property, excise, severance, windfall profits,
premium, stamp, license, payroll, employment, social security,
unemployment, disability, environmental, taxes under Tax Code Section
59A, alternative, minimum, add-on, value-added, withholding and other
taxes, assessments, charges, imposts or other governmental charges of
any kind whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), and all
estimated taxes, deficiency assessments, additions to tax, additional
amounts imposed by any governmental authority (domestic or foreign),
penalties and interest.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Transactions" shall have the meaning ascribed to such term in
the recitals to this Agreement.
"Transfer" shall mean any sale, transfer, conveyance, assignment,
delivery or other disposition, and "Transfer" or "Transferred," used
as a verb, shall each have a correlative meaning.
1.2 ADDITIONAL DEFINITIONS. In addition to the foregoing
defined terms, other capitalized terms appearing in this Agreement
9
shall have the respective meanings ascribed to such terms where they
first appear in the text of this Agreement.
1.3 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof
or define, limit or otherwise affect the meaning of any of the terms
or provisions hereof.
1.4 SCHEDULES. Unless the context otherwise requires, all
capitalized terms used in the Schedules shall have the respective
meanings assigned in this Agreement.
1.5 REFERENCES TO "HEREIN," OR "INCLUDING". As used in this
Agreement, the words "herein," "hereof," "hereby" and "hereunder"
shall refer to this Agreement as a whole, and not to any particular
section, provision or subdivision of this Agreement. Whenever the
term "include" or "including" is used in this Agreement, it shall mean
"including, without limitation," (whether or not such language is
specifically set forth) and shall not be deemed to limit the range of
possibilities to those items specifically enumerated.
ARTICLE II
PURCHASE AND SALE OF THE ACQUIRED ASSETS; PURCHASE PRICE
--------------------------------------------------------
2.1 PURCHASE AND SALE OF THE ACQUIRED ASSETS. Subject to the
terms and conditions of this Agreement, at the Closing, Debtor shall
Transfer to (or cause to be Transferred to) Purchaser, and Purchaser
shall purchase and accept from Debtor, all of Debtor's right, title
and interest in and to all assets (other than Excluded Assets) held
for use or used in connection with the operation of the Business, free
and clear of all Liens, Claims and Interests (collectively, the
"Acquired Assets"). The Acquired Assets include:
(a) all Receivables of Debtor related to or arising out of
the operation of the Business;
(b) all Inventory of Debtor related to or arising out of
the operation of the Business;
(c) the Equipment and Other Personal Property;
(d) the Intellectual Property;
(e) all rights of Debtor under the Designated Contracts,
including rights with respect to security deposits, and all
rights against suppliers under warranties covering any of the
Inventory or Equipment;
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(f) all sales orders and sales contracts, purchase orders
and purchase contracts, quotations and bids;
(g) all prepaid expenses, security deposits, rebates and
other credits owed to Debtor from third parties;
(h) originals or copies of books, financial and other
records and information which has been reduced to written,
recorded or encoded form, in each case to the extent related to
the Business (collectively, the "Books and Records");
(i) licenses and permits used in the operation of the
Business, to the extent transferable; and
(j) all Claims and causes of action of Debtor against third
parties to enforce rights under any of the foregoing categories
of Acquired Assets.
2.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary
contained herein, including in Section 2.1 above, Debtor shall retain
all of Debtor's right, title and interest in and to, and Debtor shall
not Transfer to Purchaser, the following assets of Debtor
(collectively, the "Excluded Assets"):
(a) all cash, cash equivalents and marketable securities;
(b) all Contracts that are not Designated Contracts;
(c) all defenses, Claims, counter-Claims, rights of offset
and other Actions against any Person asserting or seeking to
enforce any Liability against Debtor, to the extent such
Liability is not assumed by Purchaser pursuant to this Agreement;
(d) any rights of Debtor under this Agreement;
(e) any avoidance or similar Actions, including Actions
under Sections 544, 545, 547, 548, 550 and 553 of the Bankruptcy
Code;
(f) any Tax refunds or credits arising out of the operation
of the Business prior to the Closing Date;
(g) any Books and Records related to Debtor's employees
that are not hired by Purchaser at or following the Closing;
(h) any insurance rights under or related to any contract
of insurance issued to a Debtor or any of its Affiliates,
including any insurance premium refunds; and
(i) corporate minute books, stock transfer records and Tax
returns of Debtor.
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2.3 ASSUMPTION OF LIABILITIES.
(a) Subject to the terms and conditions of this Agreement,
at the Closing, Purchaser shall assume and agree to pay, perform,
discharge and satisfy when due in accordance with their terms the
following (and only the following) Liabilities (the "Assumed
Liabilities"):
(i) Liabilities under any of the Designated Contracts
but only to the extent accruing, or arising out of or
relating to performance by Purchaser thereunder following
the Effective Time;
(ii) all amounts which may be payable according to the
Sale Order or other order of the Bankruptcy Court entered
pursuant to Sections 365(b) of the Bankruptcy Code to cure
defaults in connection with the assumption and assignment of
the Designated Contracts ("Cure Costs");
(iii) any Post-Petition Trade Debt, to the extent
included on Schedule 2.3(a)(iii) to be provided by Purchaser
prior to the Closing Date; and
(iv) any Post-Petition Operating Accruals, to the
extent included on Schedule 2.3(a)(iv) to be provided by
Purchaser prior to the Closing Date.
(b) From the date hereof through the Closing Date, Debtor
shall use commercially reasonable efforts to obtain settlements
or stipulations (but without any obligation of Debtor to pay any
material amount in respect of such settlements) with any party
that objects to the assumption and assignment of a Designated
Contract or any related cure amount.
2.4 EXCLUDED LIABILITIES. Except for the Assumed Liabilities,
Purchaser shall not assume or bear the economic burden of, and shall
have no liability or obligation for, any Claims against, or
Liabilities of, Debtor (collectively, the "Excluded Liabilities").
The Excluded Liabilities include: (a) Liabilities for Taxes of Debtor;
(b) Liabilities for any professional fees and costs incurred in
connection with the bankruptcy cases of Debtor; (c) Liabilities under
any executory contracts of Debtor which are not Designated Contracts;
and (d) Liabilities for any pre-petition liabilities or expenses of
Debtor.
2.5 PURCHASE PRICE. The aggregate purchase price for the
Acquired Assets shall be an amount equal to One Million Dollars
($1,000,000) less the aggregate amount of the Purchase Price Offsets
(the "Purchase Price"). As additional consideration for the Acquired
Assets, Purchaser shall also assume the Assumed Liabilities. Payment
of the Purchase Price shall be made as follows:
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(a) Upon the later to occur of (i) the execution and
delivery of this Agreement by Purchaser and Debtor, or (ii)
January 17, 2007, Purchaser shall deposit with Escrow Agent an
amount in cash equal to the Deposit LESS the aggregate amount of
DIP Advances made prior to the date of this Agreement, which
shall be administered in accordance with the terms of the DIP
Financing Order. The amount so deposited shall be held by Escrow
Agent pursuant to the terms of this Agreement and the Escrow
Agreement. Upon termination of this Agreement for any reason
other than by Debtor pursuant to SECTION 12.1(c), Escrow Agent
shall immediately pay to Purchaser all amounts in the Escrow
Account in accordance with the terms of the Escrow Agreement. If
this Agreement is terminated by Debtor pursuant to SECTION
12.1(c), Escrow Agent shall immediately pay to Debtor all amounts
in the Escrow Account in accordance with the terms of the Escrow
Agreement. Purchaser and Debtor, within 2 Business Days
following termination of this Agreement, shall execute and
deliver to Escrow Agent joint written instructions directing
Escrow Agent to deliver all amounts in the Escrow Account in
accordance with this SECTION 2.5(a).
(b) At the Closing, Purchaser shall deliver to Debtor, by
wire transfer of immediately available funds, to the account or
accounts designated by Debtor, an amount equal to the Purchase
Price LESS the amount of the Deposit.
2.6 ALLOCATION OF THE FINAL PURCHASE PRICE. Following the
Closing, Purchaser will submit to Debtor Purchaser's allocation of the
Purchase Price for the Acquired Assets (including the cash purchase
price and the assumption of the Assumed Liabilities) subject to the
approval of Debtor, which approval shall not be unreasonably withheld,
and pursuant to Section 1060 of the Tax Code and the regulations
promulgated thereunder (the "Allocation"). Except as otherwise
required by law, Purchaser and Debtor agree to use such Allocation in
filing all required forms under Section 1060 of the Tax Code and not
take any position inconsistent with such Allocation upon any
examination of any such Tax Return, in any refund claim or in any tax
litigation. Debtor and Purchaser shall also file IRS form 8594 in a
manner consistent with this SECTION 2.6.
2.7 CONTRACT REJECTION AND ASSUMPTION. SCHEDULE 2.7 sets forth
a complete and accurate list prepared by Debtor of all Executory
Contracts of Debtor as of the date of this Agreement, including (for
each) Debtor's good faith estimate of the aggregate amount of Cure
Costs as of the date hereof or other actions required to cure any
defaults or breaches under such Contracts at the Closing. The
agreements identified on SCHEDULE 2.7 (collectively, the "Designated
Contracts List") with an asterisk are referred to in this Agreement
collectively as the "Designated Contracts." The Designated Contracts
are included within the Acquired Assets, and at the Closing, subject
to Section 365 of the Bankruptcy Code, Debtor shall assign all of the
Designated Contracts to Purchaser, on the terms and subject to the
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conditions of this Agreement. At least five Business Days prior to
the Sale Hearing, Debtor shall update the Designated Contracts List
and its good faith estimate of Cure Costs for the Contracts on
SCHEDULE 2.7. Purchaser shall have the option, exercisable no later
than two Business Days prior to the Closing Date, to exclude from the
Acquired Assets any Contract or pending proposal, whether or not
previously identified as a Designated Contract, or to add to the
Acquired Assets as a Designated Contract, any Contract, whether or not
previously identified as a Designated Contract, or pending proposals.
Upon exercise of the option in the preceding sentence, the Designated
Contracts List shall be deemed to be modified to give effect to such
change as of the date hereof; provided that notwithstanding anything
herein to the contrary, Debtor shall, pursuant to Section 365 of the
Bankruptcy Code and the terms of this Agreement, move the Bankruptcy
Court for the entry of a Final Order authorizing Debtor to assign to
Purchaser at the Closing any Contract added to the Acquired Assets by
Purchaser pursuant to the exercise of the option in the previous
sentence that was not previously included on the Designated Contracts
List ("Added Contracts"). If any Added Contract cannot be assigned to
Purchaser at the Closing, Debtor shall use reasonable efforts
following the Closing to obtain that relief expeditiously.
2.8 CURE OF DEFAULTS. Subject to the prior approval of the
Bankruptcy Court, Purchaser shall, on or prior to the Closing or such
later date as may be set forth in the Sale Order, any other Final
Order of the Bankruptcy Court with respect to Added Contracts or in a
written agreement between Purchaser and the Person entitled thereto,
pay to such Person the amount necessary to cure any and all monetary
defaults (in an aggregate amount not to exceed the aggregate Cure
Costs included in the Purchase Price Offsets) and breaches under and
satisfy (or, with respect to any Assumed Liability or obligation that
cannot be rendered non-contingent and liquidated prior to the Closing
Date, make effective provision reasonably satisfactory to the
Bankruptcy Court for satisfaction from funds of Purchaser) any Assumed
Liability with respect to each Designated Contract or Added Contract
with such Person as may be assumed by Debtor and assigned to Purchaser
in accordance with the provisions of Section 365 of the Bankruptcy
Code and this Agreement.
ARTICLE III
THE CLOSING
-----------
3.1 TIME AND PLACE OF CLOSING. The Closing shall take place at
10:00 a.m., Central time, on the Closing Date at the offices of Xxxxxx
Xxxxxx LLP, 000 X. Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, or remotely
by facsimile or other electronic means. The Closing, the Transfer of
the Acquired Assets, the effectiveness of the other Acquisition
Documents, and the consummation of the Transactions shall be deemed to
occur at the Effective Time.
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3.2 DELIVERIES AT CLOSING.
(a) DELIVERIES BY PURCHASER. At the Closing, Purchaser
shall deliver to Debtor (or the party indicated below) the
following:
(i) the amount set forth in SECTION 2.5(b) by wire
transfer of immediately available funds;
(ii) the Assignment and Assumption Agreement;
(iii) a certificate of an executive officer of
Purchaser to evidence compliance with the conditions set
forth in SECTIONS 10.1 and 10.2 hereof;
(iv) any Cure Costs required pursuant to SECTION 2.8
hereof (said Cure Costs to be paid to the Person entitled
thereto as set forth in SECTION 2.8 above); and
(v) such other documents as reasonably requested by
Debtor, including certificates of good standing, resolutions
of the Board of Directors of Purchaser and certificates of
incumbency and specimen signatures.
(b) Deliveries by Debtor. At or prior to the Closing,
Debtor shall deliver to Purchaser the following:
(i) the Xxxx of Sale;
(ii) the Assignment and Assumption Agreement;
(iii) a certificate of Debtor to evidence
compliance with the conditions set forth in SECTIONs 9.1 and
SECTIONs 9.2 hereof and any other certificates to evidence
compliance with the conditions set forth in ARTICLE IX
hereof as may be reasonably requested by Purchaser or its
counsel;
(iv) a certificate of good standing of Debtor, issued
not earlier than ten days prior to the Closing Date by the
Secretary of States of Delaware and Maryland;
(v) a certificate of amendment to Debtor's certificate
of incorporation changing Debtor's corporate name to any
name other than (or that is not confusingly similar to)
Earthshell;
(vi) the Sale Order and the Confirmation Order, duly
entered; and
(vii) such other documents as reasonably requested by
Purchaser, including resolutions of the Board of Directors
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of Debtor and certificates of incumbency and specimen
signatures.
3.3 SALES, USE AND OTHER TAXES, PRORATIONS. Any sales, use,
purchase, transfer, stamp, or documentary stamp Taxes which may be
payable by reason of the sale of the Acquired Assets under this
Agreement for the Transactions and any and all claims, charges,
interest or penalties assessed, imposed or asserted in relation to any
such Taxes, shall be the responsibility and obligation of and timely
paid by Debtor. Notwithstanding the foregoing, Debtor shall use
reasonable efforts to include within the Sale Order a provision that
Debtor's sale, transfer, assignment and conveyance of the Acquired
Assets to Purchaser hereunder shall be free of Tax liability. In no
event shall any party to this Agreement be responsible for the income
Taxes of any other party that may arise as a consequence of the
Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF DEBTOR
----------------------------------------
With respect to the representations and warranties of Debtor,
Purchaser specifically acknowledges and agrees that Purchaser will not
have any recourse to Debtor, or any of its officers, shareholders,
directors, or employees if any of the representations and warranties
made in this Agreement or deemed made are untrue as of time of
expression thereof. The only remedy for a breach of such
representations and warranties shall be Purchaser's option, under
certain circumstances, not to consummate the Transactions in
accordance with and subject to the limitations set forth herein and,
without limiting the foregoing, Purchaser shall have no remedy
whatsoever for any such breach following the Closing.
As an inducement to Purchaser to enter into this Agreement,
subject to the foregoing, Debtor represents and warrants, as of the
date hereof and as of the Closing Date as follows:
4.1 ORGANIZATION. Debtor is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware and except as affected by the pendency of the Case, has the
requisite power and authority to own, operate and lease its properties
and assets and to conduct the Business as it is now being owned,
operated, leased and conducted. Debtor has qualified as a foreign
corporation and is in good standing in the jurisdictions set forth on
SCHEDULE 4.1.
4.2 POWER AND AUTHORITY. Subject to Bankruptcy Court approval
pursuant to the Sale Order, (i) Debtor has the requisite corporate
power and authority to execute and deliver this Agreement and the
other Acquisition Documents to which it is a party and to perform its
obligations hereunder and thereunder and consummate the Transactions,
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(ii) the execution and delivery by Debtor of this Agreement and the
other Acquisition Documents to which it is a party, the performance of
its obligations hereunder and thereunder and the consummation by it of
the Transactions have been duly authorized by all necessary actions on
the part of Debtor, and (iii) this Agreement and each other
Acquisition Document to which Debtor is a party will constitute, upon
the mutual execution and delivery thereof, the legal, valid and
binding obligation of Debtor, enforceable against Debtor in accordance
with its terms.
4.3 NO VIOLATION. Neither the execution and delivery by Debtor
of this Agreement or any of the other Acquisition Documents to which
Debtor is a party, the performance by Debtor of its obligations
hereunder or thereunder, nor the consummation by Debtor of the
Transactions, will (A) contravene any provision of the certificate of
incorporation or bylaws of Debtor, (B) result in the creation or
imposition of any Lien, Claim or Interest upon any of the properties
or assets of Debtor, or (C) violate or conflict with any Law or any
judgment, decree or order of any Governmental Authority to which
Debtor is subject or by which Debtor or any of its assets or
properties are bound.
4.4 ACTIONS. Except as set forth on SCHEDULE 4.4 and except for
Actions to be filed in the Bankruptcy Court with respect to the Case,
there is no litigation or proceeding, in law or in equity, and there
are no proceedings or governmental or other investigations before any
Governmental Authority, pending or, to Debtor's Knowledge, threatened,
against Debtor or their directors, officers, shareholders or partners
related to the Business or any Acquired Asset, or that questions or
challenges the validity of this Agreement or the other Acquisition
Documents or any action taken or proposed to be taken by Debtor
pursuant hereto or thereto or in connection with the consummation of
the transaction contemplated hereby.
4.5 COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE 4.5
and except as excused by the Bankruptcy Code or in connection with the
Case: (A) Debtor is not in violation of any Laws relating to the
Business or the Acquired Assets, (B) Debtor has not been charged with
or, to Debtor's Knowledge, been threatened with, any charge concerning
any violation of any provision of any Law relating to the Business or
the Acquired Assets that has not already been resolved, and (C) Debtor
is not in violation of, or in default under, and no event has occurred
which, with the lapse of time or the giving of notice, or both, would
result in the violation of or default under, the terms of any
judgment, decree, order, injunction or writ of any Governmental
Authority relating to the Acquired Assets or the Business.
4.6 TITLE TO ACQUIRED ASSETS. Except as set forth on SCHEDULE
4.6, Debtor has, and at the Closing Debtor will Transfer to Purchaser,
good title to, or a valid leasehold interest in, all of the Acquired
Assets, free and clear of all Liens, Claims and Interests.
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4.7 APPROVALS. Except (i) for Approval of the Bankruptcy Court,
and (ii) as otherwise set forth on SCHEDULE 4.7, no Approval of any
Governmental Authority or other Person is required to be made,
obtained or given by or with respect to Debtor in connection with the
execution or delivery by Debtor of this Agreement and the other
Acquisition Documents to which it is a party, the performance by
Debtor of its obligations hereunder or thereunder or the consummation
by Debtor of the Transactions, including the Transfer of the Acquired
Assets to Purchaser.
4.8 BROKER'S OR FINDER'S FEES. Neither Debtor nor any of its
Affiliates has authorized any Person to act as broker, finder, banker,
consultant, intermediary or in any other similar capacity which would
entitle such Person to any investment banking, brokerage, finder's or
similar fee in connection with the Transactions, except where any fee
or payment due such persons would be solely the obligation of
Purchaser or its Affiliates.
4.9 DESIGNATED CONTRACTS. SCHEDULE 2.7 is complete and accurate
as of the date of this Agreement, and as amended in accordance with
SECTION 2.7, will be complete and accurate as of the Closing Date.
Complete and accurate copies of each written Contract (or written
summaries of the terms of any oral Contract), including any amendment
or modification thereto, included in the Acquired Assets have been
previously delivered to Purchaser, including the EKI Master License
Agreement and any Sublicense Agreement. All Contracts to which a
Debtor is a party that are material to the Intellectual Property of
such Debtor or otherwise material to the Business are set forth on
SCHEDULE 2.7, including the EKI Master License Agreement and any
Sublicense Agreement. All Designated Contracts as of the date hereof
are valid and binding obligations of Debtor and, upon entry of the
Sale Order or the Final Order regarding the Added Contracts, as the
case may be, and assuming duly authorized execution by the other party
thereto, will be enforceable in accordance with their terms, and such
Designated Contracts are in full force and effect (subject to payment
of any Cure Costs with respect thereto). Upon the cure of defaults in
accordance with SECTION 2.7 and SECTION 2.8, Debtor will have cured
all obligations required pursuant to each Designated Contract and the
Bankruptcy Court to have been performed by Debtor through the Closing
Date. Other than the defaults to be cured in accordance with SECTION
2.8, there is not as of the date hereof, and will not be as of the
Closing Date, any default under any of the Designated Contracts by
Debtor or, to Debtor's Knowledge, any other party to the Designated
Contracts. No event, occurrence or condition exists which, with the
lapse of time, the giving of notice, or both, or the happening of any
further event or condition, would become a material default by Debtor
thereunder.
4.10 INTELLECTUAL PROPERTY. As disclosed on SCHEDULE 4.10, (a)
Debtor is the owner of all right, title and interest in and to each
item of Intellectual Property, and/or has the valid right to use such
Intellectual Property, (b) the Intellectual Property is valid and
18
enforceable and has not been abandoned, canceled or adjudicated
invalid, or is subject to any outstanding order, judgment, decree or
consent or settlement agreement restricting its use or adversely
affecting Debtor's rights thereto, (c) SCHEDULE 4.10 sets forth a list
of all registrations and grants, and applications therefor, for any
Intellectual Property, including domain names ("Registered IP"), (d)
Debtor is the owner of record of all Registered IP and has filed all
documents and paid all taxes, fees, and other financial obligations
required to maintain in force and effect all such Registered IP until
the Closing Date, (e) SCHEDULE 4.10 sets forth all licenses or other
agreements (other than licenses for desktop or off-the-shelf software)
under which Debtor is granted rights in intellectual property or has
granted rights in the Intellectual Property to others (including the
EKI Master License Agreement and all Sublicense Agreements)
("Licenses"), (f) all Licenses and Registered IP are part of the
Acquired Assets and will be acquired, free and clear of all Liens,
Claims and Interests, (g) Debtor's ownership and/or use of the
Intellectual Property and its operation of the Business does not
infringe the rights of any Person, (h) neither the conduct of any
other person's or entity's business, nor the nature of any of the
products it sells or services it provides, infringes upon or is
inconsistent with any Intellectual Property, (i) except as disclosed
on SCHEDULE 4.10, all Licenses or other agreements relating to
Intellectual Property are in full force and effect, and there is no
default by any party thereto, and (j) no third party has asserted
ownership rights in any of the Intellectual Property, and Debtor has
not licensed or sublicensed any third party to use the Intellectual
Property except as set forth on SCHEDULE 4.10.
4.11 "AS IS" TRANSACTION. Purchaser hereby acknowledges and
agrees that, except as otherwise expressly provided in this Agreement,
Debtor make no representations or warranties whatsoever, express or
implied, with respect to any matter relating to the Business, the
Acquired Assets or the Transactions, including, income to be derived
or expenses to be incurred in connection with the Acquired Assets, the
physical condition of any personal property comprising a part of the
Acquired Assets or which is the subject of any Designated Contract to
be assumed by Purchaser at the Closing, the value or transferability
of the Acquired Assets (or any portion thereof), the terms, amount,
validity or enforceability of any Assumed Liabilities, the
merchantability or fitness of the Acquired Assets (or any portion
thereof for any particular purpose, or any other matter or thing
relating to the Business or the Acquired Assets or any portion
thereof). Without in any way limiting the foregoing, Debtor hereby
disclaims any warranty (express or implied) of merchantability or
fitness for any particular purpose as to any portion of the Acquired
Assets. Purchaser further acknowledges that Purchaser has conducted
an independent inspection and investigation of the physical condition
of the Acquired Assets and all such other matters relating to or
affecting the Acquired Assets as Purchaser deemed necessary or
appropriate and that in proceeding with its acquisition of the
Acquired Assets, Purchaser is doing so based solely upon such
19
independent inspections and investigations. Accordingly, Purchaser
will accept the Acquired Assets at the Closing "AS IS," "WHERE IS,"
and "WITH ALL FAULTS."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
As an inducement to Debtor to enter into this Agreement,
Purchaser hereby represents and warrants as of the date hereof and as
of the Closing Date as follows:
5.1 ORGANIZATION AND GOOD STANDING. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and
authority to own, operate and lease its properties and assets and to
conduct its business as they are now being owned, operated, leased and
conducted.
5.2 POWER AND AUTHORITY. Purchaser has the requisite corporate
power and authority to execute and deliver this Agreement and the
other Acquisition Documents to which it is a party and to perform its
obligations hereunder and thereunder and consummate the Transactions.
The execution and delivery by Purchaser of this Agreement and the
other Acquisition Documents to which it is a party, the performance of
its obligations hereunder and thereunder and the consummation by it of
the Transactions have been duly authorized by all necessary actions on
the part of Purchaser. This Agreement and each other Acquisition
Document to which Purchaser is a party will constitute, upon the
mutual execution and delivery thereof, the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance
with its terms.
5.3 NO VIOLATION. Neither the execution and delivery by
Purchaser of this Agreement or any of the other Acquisition Documents
to which it is a party, the performance by it of its obligations
hereunder or thereunder, nor the consummation by it of the
Transactions contemplated hereby or thereby, will (A) contravene any
provision of the certificate of incorporation or bylaws of Purchaser,
(B) result in the creation or imposition of any Lien, Claim or
Interest in or upon any of the properties or assets of Purchaser, or
(C) violate or conflict with any Law or any judgment, decree or order
of any Governmental Authority to which Purchaser is subject or by
which Purchaser or any of its assets or properties are bound.
5.4 APPROVALS. Except as set forth on SCHEDULE 5.4, no Approval
of any Governmental Authority or other Person is required to be made,
obtained or given by or with respect to Purchaser in connection with
the execution or delivery by it of this Agreement and the other
20
Acquisition Documents, the performance by it of its obligations
hereunder or thereunder or the consummation by it of the Transactions.
5.5 BROKER'S OR FINDER'S FEES. Neither Purchaser nor any of its
Affiliates has authorized any Person to act as broker, finder, banker,
consultant, intermediary or in any other similar capacity which would
entitle such Person to any investment banking, brokerage, finder's or
similar fee in connection with the Transactions, except where any fee
or payment due such persons would be solely the obligation of
Purchaser or its Affiliates.
ARTICLE VI
COVENANTS OF DEBTOR
-------------------
Debtor hereby covenants and agrees that, subject to the orders
and direction of the Bankruptcy Court and except as otherwise
consented to in writing by Purchaser or as otherwise contemplated by
this Agreement, from and after the date hereof until the Closing:
6.1 CONDUCT OF BUSINESS. Debtor shall, subject to the
requirements and obligations under the Bankruptcy Code, (i) carry on
the Business in the ordinary course and comply in all material respect
with all applicable Laws and regulations; (ii) use all reasonable
efforts to preserve intact Debtor's Business organization and
relationships (including all vendors, customers and employees) and
preserve the current value of the Acquired Assets and keep such assets
in the same condition as on the date hereof, ordinary wear and tear
excepted; (iii) not acquire, sell, assign, transfer, license, lease,
encumber or dispose of any Acquired Assets outside the ordinary course
of Business (including Intellectual Property); (iv) not take any
action that would result in the failure of Debtor to satisfy the
closing condition set forth in SECTION 9.4; (v) cause Debtor to comply
in all material respects with all applicable laws; (vi) not reject any
Designated Contracts; and (vii) promptly give Purchaser copies of a
notice of any event of default or termination received from any
counter-party to any Designated Contract so that Purchaser may
intervene to protect any rights that it has under this Agreement in
any proceeding to resolve any such notice; provided that, the
foregoing shall not obligate Debtor to pay any Claim arising prior to
the Petition Date, and provided further that, the foregoing shall not
prevent Debtor from rejecting Contracts that are not Designated
Contracts being assumed by Purchaser hereunder.
6.2 ACQUISITION PROPOSALS. Anything herein to the contrary
notwithstanding, at or prior to a hearing in the Bankruptcy Court on
the motion to approve the Sale Order, Debtor may furnish information
concerning the Business to any qualified Person in order to permit
such Person to determine whether to make a higher and better offer for
the Acquired Assets at such hearing or at such time prior to the
hearing as the Bankruptcy Court may direct and Debtor and Debtor's
21
Representatives may solicit, encourage and negotiate with any Persons
to make offers for the Acquired Assets at or prior to such hearing, as
the case may be; provided all potential bidders agree to be subject to
substantially the same restrictions and limitations on the use of such
information as those imposed on Purchaser. Any other prospective
purchaser or Person who receives proprietary information regarding
Debtor shall also agree to execute a separate non-disclosure agreement
in form and substance acceptable to Purchaser. Debtor shall inform
Purchaser of the terms and conditions of any competing offer made for
any portion of the Business or the Acquired Assets immediately upon
receipt of such offer, but no later than three Business Days prior to
an auction of the Acquired Assets.
6.3 ACCESS TO DEBTOR. Debtor shall use reasonable efforts to
afford Purchaser and its Representatives reasonable access during
normal business hours throughout any period from and after the date
hereof until the Closing Date, upon two Business Day's prior notice,
to the Books and Records, files, pleadings, data base, documents,
properties, facilities, employees and customers of Debtor's relating
to the Business or the Acquired Assets, as Purchaser may reasonably
request; provided that such reasonable access shall not unduly
interfere with Debtor's ongoing business, operations or obligations
relating to the Case.
6.4 CERTIFICATE OF SERVICE Within three Business Days following
the date hereof, Debtor shall deliver to Purchaser a certificate of
service, which certificate shall include (i) all parties entitled to
notice of Debtor's intent to sell the Acquired Assets (and assume and
assign the Designated Contracts) under Bankruptcy Rule 2002, the
Bankruptcy Code or other applicable nonbankruptcy law, and (ii) all
parties owning, claiming or asserting a Lien, Claim or other Interest
in or to any of the Acquired Assets, including every other party to a
Designated Contract.
ARTICLE VII
COVENANTS OF PURCHASER
----------------------
Purchaser hereby covenants and agrees that, except as otherwise
consented to in writing by Debtor or as otherwise contemplated by this
Agreement, from and after the date hereof until the Closing:
7.1 ADEQUATE ASSURANCE. Purchaser shall provide evidence and
argument in support of the Sale Order in order to establish its
ability to provide "adequate assurance of future performance" (within
the meaning of Section 365(f)(2)(B) of the Bankruptcy Code) of any
Contract identified as a Designated Contract or Added Contract.
Debtor agrees to use its commercially reasonable efforts to cooperate
with Purchaser in the presentation of such evidence and argument.
22
ARTICLE VIII
AGREEMENTS OF PURCHASER AND DEBTOR
----------------------------------
8.1 EMPLOYEES. Purchaser shall have the right, but not the
obligation, to make offers of employment to the employees of Debtor,
subject to the consummation of the Transactions.
8.2 BANKRUPTCY COURT ORDERS.
(a) Debtor hereby confirms that it is critical to the
process of arranging an orderly sale of Debtor's assets to proceed by
selecting Purchaser to enter into this Agreement in order to present
the Bankruptcy Court with arrangements for obtaining the highest
realizable prices for the Acquired Assets and that, without Purchaser
having committed substantial time and effort to such process, the
estate of Debtor would have to employ a less orderly process of sale
and thereby both incur higher costs and risk attracting lower prices.
Accordingly, the contributions of Purchaser to the process have
indisputably provided very substantial benefit to the estate of
Debtor. Debtor acknowledges that Purchaser would not have invested
the effort in negotiating and documenting the proposed Transactions
and incurring duties to pay its outside advisors if Purchaser were not
entitled to the Break-up Fee incurred as a result of Purchaser's
attempt to purchase the Acquired Assets, if Purchaser is not the
successful bidder for the Acquired Assets or otherwise does not close
on the Acquired Assets under the circumstances described herein.
(b) On or before two Business Days following the execution
and delivery of this Agreement, Debtor shall file a motion or motions
with the Bankruptcy Court to set a hearing (the "Bidding Procedures
Hearing") to consider entry of an order in a form and substance
reasonably acceptable to Purchaser (the "Bidding Procedures Order")
approving the Sale Hearing Notice (as defined below) and bidding
procedures applicable to all bidders. Among other things, such
Bidding Procedures shall include: (i) authorization of the Break-up
Fee and providing that such Break-up Fee shall be entitled to priority
over all other pre- and post-petition Claims under Section 364(c)(l)
of the Bankruptcy Code, a senior Lien on the Acquired Assets under
Section 364(d)(l) of the Bankruptcy Code and free of any surcharge
under Section 506 of the Bankruptcy Code; (ii) the requirement that
all qualified bidders must provide assurance adequate to Debtor (in
Debtor's sole discretion) of their ability to perform the obligations
pursuant to any bid, including a deposit equal to the amount of the
Deposit in immediately available funds; (iii) the requirement that any
qualified competing bid for all of the Acquired Assets must be in an
amount of at least $500,000 in excess of the sum of the Purchase Price
plus the Assumed Liabilities and must provide for the direct payment
to Purchaser on or before the closing of the other sale of the Break-
up Fee; (iv) the requirement that any subsequent qualified competing
bid, including by Purchaser, must be in increments of no less than
23
$50,000; (v) the requirement that all qualified competing bids must be
for all of the Acquired Assets, but may also include any other assets
of Debtor, and on the same or different terms; PROVIDED THAT that no
such qualified competing bids may be accepted by Debtor unless the
aggregate deposit and the aggregate consideration payable to Debtor
thereunder complies with, and the other terms are subject to, the
other provisions set forth in this SECTION 8.2(b); (vi) a provision
entitling Purchaser to reduce, by the amount of the Break-up Fee and
any outstanding DIP Obligations the amount of the cash portion of the
Purchase Price otherwise payable by Purchaser, in the event that it
elects to overbid any competing offer; (vii) the requirement that
Debtor provide notice of the Sale Hearing to Debtor's creditors or
their counsel and the other parties to the Designated Contracts (the
"Sale Hearing Notice"); (viii) the requirement that all qualified
competing bids be received no later than three Business Days before
the date of the auction; (ix) the requirement that Debtor provide
Purchaser (and the holder(s) of the Company's senior secured
indebtedness who are credit bidding) with copies of any competing bids
reasonably promptly after receipt of such bids but in no event later
than two Business Days before the date of the auction; (x) the
requirement that such qualified competing bids contain no financing or
due diligence conditions; and (xi) the requirement that all qualified
initial bids be on substantially the same terms and conditions as set
forth in this Agreement or be accompanied by a xxxx-up of this
Agreement showing all variations therefrom. The Bidding Procedures
Hearing shall specify the notice to be given to creditors and other
parties in interest in respect of the sale of the Acquired Assets and
otherwise be in form and substance satisfactory to Purchaser in its
reasonable discretion. Debtor, in accordance with applicable law and
in consultation with Debtor's creditors, shall determine whether
competing offers submitted pursuant to this SECTION 8.2(b) shall be
deemed to be higher and better offers. It is anticipated that the
auction shall occur within 30-45 days after execution of this
Agreement.
(c) On or before two Business Days following the execution
and delivery of this Agreement, Debtor shall file with the Bankruptcy
Court a motion to set a hearing (the "Sale Hearing") to consider entry
of an order approving the sale of the Acquired Assets and the
assumption and assignment of the Designated Contracts to Purchaser or
an alternate purchaser ("Sale Order"), on an expedited basis, which
may be the same motion as the motion seeking the Bidding Procedures
Order;
(d) Debtor shall use reasonable efforts to obtain the
Bankruptcy Court's entry of (i) the Bidding Procedures Order on or
before February 15, 2007, and in any event as soon as is reasonably
practicable, and (ii) a Sale Order on or before March 16, 2007
approving of this proposed Transaction. The Sale Order shall be in
form and substance reasonably acceptable to Purchaser and shall
provide, among other things, that: (i) adequate notice of Debtor's
motion to sell the Acquired Assets outside of the ordinary course of
24
Debtor's business and to assume and assign the Designated Contracts
has been duly given to all parties entitled thereto; (ii) Debtor is
authorized to consummate the Transactions and to perform any other act
that is necessary or appropriate for the consummation of the transfer
of the Acquired Assets and to assign the Designated Contracts to
Purchaser; (iii) except for the Assumed Liabilities, the Acquired
Assets shall be conveyed and delivered to Purchaser upon Closing, free
and clear of all Liens, Claims or Interests (other than Claims related
to Assumed Liabilities), with all such Liens, Claims and Interests to
attach to the proceeds payable to Debtor; (iv) that Purchaser has
acted in "good faith" in connection with the Transactions, as provided
in Section 363(m) of the Bankruptcy Code and that all conditions and
terms of Section 363(f) of the Bankruptcy Code and the Bankruptcy
Rules that are applicable thereto have been satisfied; and (v) any
commissions or fees due to Debtor's brokers and investment bankers
shall be paid out of the net proceeds of the sale of the assets.
(e) In the event an appeal is taken, or a stay pending
appeal is requested or reconsideration is sought, from the Bidding
Procedures Order, the Sale Order or the Confirmation Order, Debtor
shall immediately notify Purchaser of such appeal or stay request and
shall provide to Purchaser, within two Business Days of receipt, a
copy of the related notice of appeal or order of stay or application
for reconsideration. Debtor shall also provide Purchaser with copies
of any other or further notice of appeal, motion or application filed
in connection with any appeal from or application for reconsideration
of any of such Orders and any related briefs. Debtor agrees to take
all steps as may be reasonable and appropriate to defend against such
appeal, petition or motion and to use its reasonable efforts to obtain
an expedited resolution of such appeal, provided that nothing herein
shall preclude the parties hereto from consummating the Transactions
if the Sale Order shall have been entered and not been stayed.
(f) Debtor further agree to include Purchaser on the
service list for all notices, motions, applications, pleadings and
other documents filed in the Case or any related adversary
proceedings, and any notices given pursuant to Debtor's debtor in
possession financing arrangements, if any, and to support the entry of
an order of the Bankruptcy Court approving such service by all parties
in interest.
ARTICLE IX
CONDITIONS TO PURCHASER'S OBLIGATIONS
-------------------------------------
The obligations of Purchaser to purchase and accept transfer and
delivery of the Acquired Assets are subject to the satisfaction on or,
where appropriate, prior to, the Closing Date, of the following
conditions, except to the extent that any such condition may have been
waived in writing by Purchaser on or prior to the Closing Date:
25
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Debtor contained in ARTICLE IV of this Agreement shall
have been true and correct when made and shall be true and correct in
all material respects at and as of the Closing Date.
9.2 PERFORMANCE. Debtor shall have performed and complied in
all material respects with the covenants and obligations required by
this Agreement to be performed or complied with by Debtor at or prior
to the Closing Date.
9.3 SALE ORDER.
(a) The Sale Order shall have become a Final Order in form
reasonably acceptable to Purchaser and be in full force and
effect and not stayed as of the Closing Date and shall provide
that (i) Debtor is authorized and directed to enter into the
Transactions and the Acquisition Documents and to execute and
deliver all documents and perform all acts necessary or
appropriate to effectuate the sale of the Acquired Assets to
Purchaser; and (ii) the Transactions are undertaken by Purchaser
in good faith, as that term is used in Section 363(m) of the
Bankruptcy Code, and Purchaser shall have all of the benefits of
such section.
(b) Notice of the hearing on the Sale Order shall have been
duly given to (i) all parties entitled to notice of Debtor's
intent to sell the Acquired Assets (and assume and assign the
Designated Contracts) under Bankruptcy Rule 2002, the Bankruptcy
Code or other applicable nonbankruptcy law, and (ii) all parties
owning, claiming or asserting a Lien, Claim or Interest in or to
any of the Acquired Assets, including all other parties to
Designated Contracts.
9.4 MATERIAL ADVERSE CHANGE. Following the date hereof, Debtor
shall not have suffered or, to Debtor's Knowledge, been threatened
with, any Material Adverse Change.
9.5 COMPLIANCE WITH LAWS. As of the Closing Date, there shall
not be issued and outstanding an order, decree, ruling or injunction
of a Governmental Authority having competent jurisdiction restraining,
enjoining or otherwise prohibiting the Transactions contemplated by
this Agreement or the other Acquisition Documents.
ARTICLE X
CONDITIONS TO DEBTOR'S OBLIGATIONS
----------------------------------
The obligations of Debtor to sell, transfer and deliver the
Acquired Assets are subject to the satisfaction on or, where
appropriate, prior to the Closing Date, of the following conditions,
26
except to the extent that any such condition may have been waived in
writing by Debtor on or prior to the Closing Date:
10.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Purchaser contained in ARTICLE V of this Agreement shall
have been true and correct when made and shall be true and correct in
all material respects at and as of the Closing Date.
10.2 PERFORMANCE. Purchaser shall have performed and complied in
all material respects with the covenants and obligations required by
this Agreement to be performed or complied with by Purchaser at or
prior to the Closing Date.
10.3 SALE ORDER. The Sale Order shall have been entered and
shall constitute Final Orders.
ARTICLE XI
COVENANTS AND AGREEMENTS FOLLOWING THE CLOSING
----------------------------------------------
11.1 BOOKS AND RECORDS; ACCESS. After the Closing Date, the
parties hereto shall afford the other parties and their
Representatives reasonable access to their books, records, personnel
and other information with respect to the Business that is necessary
for the purpose of obtaining information related to the Case or to
other litigation or investigations, winding up the Case, Taxes and
other reasonable business purposes, and shall cooperate with the other
parties with respect to such matters. The right of access described in
the immediately preceding sentence shall include the right to make and
retain copies at the reviewing party's expense.
11.2 FURTHER ASSURANCES. In addition to the actions, documents,
files, pleadings and instruments specifically required to be taken or
delivered by this Agreement or the other Acquisition Documents,
whether on or before or from time to time after the Closing, and
without further consideration, each party hereto shall make
commercially reasonable efforts to take such other actions, and
execute and/or deliver such other documents, data, pleadings, files,
information and instruments, as the other party hereto or its counsel
may reasonably request in order to effectuate and perfect the
Transactions and the other Acquisition Documents, including (a) such
actions as may be necessary to Transfer to Purchaser and to place
Purchaser in possession or control of, all of the rights, properties,
assets and businesses intended to be sold, Transferred, conveyed,
assigned and delivered hereunder; (b) to permit Debtor or their
representatives to assess and prosecute such claims and rights as they
may deem appropriate with respect to events or circumstances relating
to Debtor, any assets of Debtor not included within the Acquired
Assets or the conduct of the Business prior to the Closing Date; or
(c) to assist in the collection of any and all such rights, properties
27
and assets or to enable Purchaser to exercise and enjoy all rights and
benefits of Debtor with respect thereto.
ARTICLE XII
TERMINATION
-----------
12.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by the mutual written consent of Purchaser and Debtor;
(b) by Purchaser upon written notice in the event of a
material breach of any covenant or agreement to be performed or
complied with by Debtor pursuant to the terms of this Agreement
or any of the Acquisition Documents, which breach would result in
a condition to Closing set forth in ARTICLE IX hereof becoming
incapable of fulfillment or cure (which condition has not been
waived by Purchaser in writing) prior to the Drop Dead Date;
provided, that Debtor shall have ten (10) days following such
written notice in which to cure such breach before the Agreement
shall be terminated;
(c) by Debtor upon written notice in the event of a
material breach of any covenant or agreement to be performed or
complied with by Purchaser pursuant to the terms of this
Agreement or any of the Acquisition Documents, which breach would
result in a condition to Closing set forth in ARTICLE X hereof
becoming incapable of fulfillment or cure (which condition has
not been waived by Debtor in writing) prior to the Drop Dead
Date; PROVIDED, THAT Purchaser shall have ten days following such
written notice in which to cure such breach before the Agreement
shall be terminated if, and only if, such breach occurs prior to
the entry of the Sale Order;
(d) by either Purchaser or Debtor if any Governmental
Authority having competent jurisdiction shall have issued a Final
Order, decree, ruling or injunction restraining, enjoining or
otherwise prohibiting the transactions contemplated by this
Agreement or the other Acquisition Documents or vacating the Sale
Order or the DIP Financing Order;
(e) by Debtor or Purchaser upon the earlier of (i) a March
31, 2007 or (ii) the consummation of an Alternative Transaction;
(f) by either Debtor or Purchaser if the Closing shall not
have occurred on or before the Drop Dead Date; PROVIDED, HOWEVER
that the right to terminate this Agreement under this SECTION
12.1(f) shall not be available to any party whose failure to
fulfill any obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the Closing
28
to occur on or prior to such date (for purposes of this
subsection (f) the failure or refusal by any party to provide any
waiver that under the terms hereof may be given or withheld in
such party's discretion shall not be deemed a failure to fulfill
any obligation under this Agreement);
(g) by Purchaser if the Bankruptcy Court has not entered
the Bidding Procedures Order on or before February 15, 2007;
(h) by Purchaser if any of the Designated Contracts shall
have been rejected pursuant to Section 365 of the Bankruptcy Code
or if any of the Designated Contracts are not assumed by Debtor
and assigned pursuant to the terms of this Agreement;
(i) by Purchaser if the Case shall have been dismissed or
converted to a case under Chapter 7 of the Bankruptcy Code; or
(j) by Purchaser if the Sale Order has not been entered on
or before March 16, 2007.
12.2 EFFECT OF TERMINATION.
(a) In the event of the termination of this Agreement under
SECTIONs 12.1, except with respect to this SECTION 12.2, SECTION
13.1, SECTION 13.2, SECTION 13.3, SECTION 13.4 and SECTIONs 13.7
through 13.12 hereof, (i) this Agreement shall forthwith become
void, and (ii) subject to SECTION 12.2(b), there shall be no
liability on the part of Debtor, Purchaser or any of their
respective Representatives and, to the extent set forth in
SECTION 2.5(a), Purchaser shall be entitled to the return of the
Deposit in accordance with SECTION 2.5(a) (PROVIDED THAT Debtor
shall be entitled to the Deposit if this Agreement is terminated
by Debtor pursuant to SECTION 12.1(c) hereof).
(b) If: (i) there is a termination of this Agreement
pursuant to SECTION 12.1(e) and (ii) Purchaser is not in material
breach of this Agreement or any other Acquisition Document,
Debtor shall, concurrent with the consummation of the Alternative
Transaction that gave rise to such termination, pay to Purchaser
in immediately available funds an amount equal to the Break-up
Fee, as a liability entitled to priority over all other pre-and
post-petition Claims under Section 364(c)(1) of the Bankruptcy
Code, a senior Lien in the Acquired Assets and the proceeds
thereof under Section 364(d)(l) of the Bankruptcy Code and not
subject to any surcharge under Section 506 of the Bankruptcy
Code, in lieu of any losses Purchaser may suffer, and not as a
penalty, as Purchaser's sole and exclusive remedy as a result of
such a termination.
29
ARTICLE XIII
MISCELLANEOUS
-------------
13.1 PUBLIC ANNOUNCEMENTS. Other than statements made in the
Bankruptcy Court (or in pleadings filed therein), Purchaser and Debtor
shall consult with each other before issuing any press release or
making any public statement or other public communication with respect
to this Agreement or the Transactions. Purchaser and Debtor shall not
issue any such press release or make any such public statement without
the prior written consent of the other party, which shall not be
unreasonably withheld or delayed; provided, however, that a party may,
without the prior consent of the other party, issue such press release
or make such public statement as may, upon the advice of counsel, be
required by applicable Law, any Governmental Authority with competent
jurisdiction or any listing agreement with any national securities
exchange. Notwithstanding the foregoing, Debtor shall not be
prohibited from negotiating an Alternate Transaction, and marketing
the Business in connection therewith; provided that Debtor does not
utilize DIP Advances to fund such negotiation or marketing.
13.2 AMENDMENT; WAIVER. Neither this Agreement, nor any of the
terms or provisions hereof, may be amended, modified, supplemented or
waived except by a written instrument signed by all of the parties
hereto (or, in the case of a waiver, by the party granting such
waiver). No waiver of any of the terms or provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any
other term or provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver. No failure of a party
hereto to insist upon strict compliance by another party hereto with
any obligation, covenant, agreement or condition contained in this
Agreement shall operate as a waiver of, or estoppel with respect to,
any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of a party hereto, such consent shall
be given in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 14.2.
13.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Debtor and Purchaser set forth in
Articles IV and V hereof shall not survive the Closing.
13.4 FEES AND EXPENSES. Except as otherwise expressly provided
in this Agreement, each of the parties hereto shall bear and pay all
fees, costs and expenses incurred by it or any of its Affiliates in
connection with the origin, preparation, negotiation, execution and
delivery of this Agreement and the other Acquisition Documents and the
Transactions (whether or not such Transactions are consummated) and
the performance of their respective obligations under this Agreement,
including any fees, expenses or commissions of any of its
Representatives.
30
13.5 NOTICES.
(a) All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing
and mailed or facsimiled or delivered by hand or courier service:
(i) IF TO DEBTOR, TO:
EarthShell Corporation
0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Fax: : (000)000-0000
Attn: Xxxx Xxxxxx
WITH A COPY, WHICH SHALL NOT CONSTITUTE
NOTICE, TO:
Xxxxxxxxx, Xxxxxx & Preston LLP
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000)000-0000
Attn: Xxxxx X. Xxxxxxxxxx
(ii) IF TO PURCHASER, TO:
ReNewable Products, Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Fax:
Attn: Xxxxx X. Xxxxxx
WITH A COPY, WHICH SHALL NOT CONSTITUTE
NOTICE, TO:
Xxxxxx Xxxxxx LLP
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxx and J. Xxxx Xxxxxx
(b) All notices required or permitted to be given hereunder
shall be in writing and may be delivered by hand, by facsimile,
by nationally recognized private courier, or by United States
mail. Notices delivered by mail shall be deemed given three (3)
Business Days after being deposited in the United States mail,
postage prepaid, registered or certified mail. Notices delivered
by hand, by facsimile, or by nationally recognized private
carrier shall be deemed given on the day of receipt; PROVIDED,
HOWEVER, that a notice delivered by facsimile shall only be
effective if such notice is also delivered by hand, nationally
recognized private courier or deposited in the United States
mail, postage prepaid, registered or certified mail, on or before
two (2) Business Days following its delivery by facsimile.
31
13.6 ASSIGNMENT. This Agreement and all of the terms and
provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns. Prior to the Effective Time, neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by
Debtor or Purchaser, except Purchaser may assign its rights to an
Affiliate of Purchaser or any entity in which Purchaser has an
interest. Any assignment made in contravention of the terms of this
SECTION 13.6 shall be void AB INITIO.
13.7 GOVERNING LAWS CONSENT TO JURISDICTION.
(a) This Agreement and the legal relations among the
parties hereto shall be governed by and interpreted in accordance
with the laws of the State of Delaware applicable to agreements
made and to be performed entirely within such State.
(b) Until the entry of an order either closing or
dismissing the Case, each party hereto: (i) irrevocably elects
as the sole judicial forum for the adjudication of any matters
arising under or in connection with the Agreement, and consents
to the exclusive jurisdiction of, the Bankruptcy Court; (ii)
expressly waives any defense or objection to jurisdiction or
venue based on the doctrine of forum non conveniens; and (iii)
stipulates that the Bankruptcy Court shall have in personam
jurisdiction and venue over such party.
(c) After the entry of an order either closing or
dismissing the Case, each party to this Agreement hereby
irrevocably submits to the exclusive jurisdiction of any Illinois
state or federal court (an "Illinois Court") in any Action
arising out of or relating to this Agreement or the other
Acquisition Documents, and each such party hereby irrevocably
agrees that all claims in respect of such Action shall be heard
and determined in such Illinois Court. Each party, to the extent
permitted by applicable Laws, hereby expressly waives any defense
or objection to jurisdiction or venue based on the doctrine of
forum non conveniens, and stipulates that any Illinois Court
shall have in personam jurisdiction and venue over such party for
the purpose of litigating any dispute or controversy between the
parties arising out of or related to this Agreement or the other
Acquisition Documents. in the event any party shall commence or
maintain any Action arising out of or related to this Agreement
in a forum other than an Illinois Court, the other party shall be
entitled to request the dismissal or stay of such Action, and
each such party stipulates for itself that such Action shall be
dismissed or stayed. To the extent that any party to this
Agreement has or hereafter may acquire any immunity from
jurisdiction of any Illinois Court or from any legal process
(whether through service or notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to
32
itself or its property, each such party hereby irrevocably waives
such immunity.
(d) After the entry of an order either closing or
dismissing the Case, each party irrevocably consents to the
service of process of any of the Illinois Courts in any such
Action by any means permitted by the rules applicable in such
Illinois Court including, if permissible, personal delivery of
the copies thereof or by the mailing of the copies thereof by
certified mail, return receipt requested, postage prepaid, to it
as its address specified in accordance with SECTION 13.5 above,
such service to become effective upon the earlier of (i) the date
ten calendar days after such mailing or (ii) any earlier date
permitted by applicable Law.
13.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF
THE OTHER ACQUISITION DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER ACQUISITION
AGREEMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 13.8.
13.9 ENTIRE AGREEMENT. This Agreement and the other Acquisition
Documents embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede
all prior agreements, commitments, arrangements, negotiations or
understandings, whether oral or written, between the parties hereto,
their respective Affiliates or any of the Representatives of any of
them with respect thereto. There are no agreements, covenants or
undertakings with respect to the subject matter of this Agreement and
the other Acquisition Documents other than those expressly set forth
or referred to herein or therein and no representations or warranties
of any kind or nature whatsoever, express or implied, are made or
shall be deemed to be made herein by the parties hereto except those
expressly made in this Agreement and the other Acquisition Documents.
13.10 SEVERABILITY. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or
provision hereof. In the event that any term or provision of this
Agreement shall be determined to be unenforceable, invalid or illegal
in any respect, such unenforceability, invalidity or illegality shall
not affect any other term or provision hereof; but this Agreement
shall be construed as if such unenforceable, invalid or illegal term
or provision had never been contained herein. Moreover, if any term
or provision of this Agreement shall for any reason be held to be
excessively broad as to time, duration, activity, scope or subject,
33
the parties request that it be construed, by limiting and reducing it,
so as to be enforceable to the fullest extent permitted under
applicable Law.
13.11 NO THIRD PARTY BENEFICIARIES. Except as and to the extent
otherwise provided herein, nothing in this Agreement is intended, nor
shall anything herein be construed, to confer any rights, legal or
equitable, in any Person other than the parties hereto and their
respective successors and permitted assigns.
13.12 ENFORCEMENT. If a party shall be in breach of this
Agreement, such party shall pay on demand all costs and expenses of
enforcement of this Agreement, including reasonable legal fees and
expenses.
13.13 COUNTERPARTS. This Agreement may be executed in one or
more counterparts and by facsimile or other electronic means, each of
which shall be deemed an original, but all of which, when taken
together, shall constitute one and the same instrument.
* * * * *
34
IN WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase Agreement to be duly executed as of the day and year first
above written.
DEBTOR
EARTHSHELL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: CEO
PURCHASER
EARTHSHELL ACQUISITION CORP.
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: President
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
---------
Exhibit A Form of Assignment and Assumption
Agreement
Exhibit B Form of Xxxx of Sale
Schedule 2.3(a)(iii) Assumed Post-Petition Trade Debt
Schedule 2.3(a)(iv) Assumed Post-Petition Operating Accruals
Schedule 2.7 Designated Contracts
Schedule 4.1 Foreign Qualification
Schedule 4.4 Actions
Schedule 4.5 Compliance with Laws
Schedule 4.6 Title to Acquired Assets
Schedule 4.7 Debtor Approvals
Schedule 4.10 Intellectual Property
Schedule 5.4 Purchaser Approvals
