ASSET PURCHASE AGREEMENT

Exhibit 2.4*

E XECUTION C OPY

 

A SSET P URCHASE A GREEMENT

DATED AS OF April 2, 2009

BY AND AMONG

RBF A CQUISITION II, LLC,

V ERA S UN E NERGY C ORPORATION ,

US B IO E NERGY C ORPORATION

AND

V ERA S UN C ENTRAL C ITY , LLC

 

 

*

In accordance with Item 601(b)(2) of Regulation S-K, the schedules and similar attachments to the asset purchase agreement in this exhibit, which schedules and similar attachments are listed in the table of contents of the asset purchase agreement, have not been filed. The registrant agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request.

T ABLE OF C ONTENTS

 

 

i

 

ii

 

iii

SCHEDULES

 

EXHIBITS

 

 

iv

A SSET P URCHASE A GREEMENT

T HIS A SSET P URCHASE A GREEMENT (this “ Agreement ”) is made as of April 2, 2009 (the “ Effective Date ”), by and among RBF Acquisition II, LLC , a Delaware limited liability company (“ Buyer ”), VeraSun Energy Corporation , a South Dakota corporation (the “ Company ”), US BioEnergy Corporation , a South Dakota corporation (“ US Bio ”), and VeraSun Central City, LLC , a Nebraska limited liability company (“ Central City ,” and together with the Company and US Bio, the “ Sellers ”). Capitalized terms used herein and not otherwise defined herein have the meanings set forth in Article 1 .

R ECITALS

W HEREAS , Sellers are engaged in the business of producing ethanol and its co-products, including distillers grains, at the Facility (such business, as conducted by Sellers, the “ Business ”);

W HEREAS , US Bio is a direct wholly-owned subsidiary of the Company and Central City is an indirect wholly-owned subsidiary of the Company;

W HEREAS , on October 31, 2008 (the “ Petition Date ”), the Company and its direct and indirect subsidiaries (including US Bio and Central City) filed a voluntary petition for relief (each a “ Filing ” and, together, the “ Filings ”) commencing cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “ Bankruptcy Court ”);

W HEREAS , Sellers desire to sell to Buyer all of the Acquired Assets, and Buyer desires to purchase from Sellers all of the Acquired Assets and assume all of the Assumed Liabilities, upon the terms and conditions hereinafter set forth;

W HEREAS , the Parties intend to effectuate the transactions contemplated by this Agreement through a sale of the Acquired Assets pursuant to Sections 363 and 365 of the Bankruptcy Code; and

W HEREAS , the execution and delivery of this Agreement and the Sellers’ ability to consummate the transactions set forth in this Agreement are subject to, among other things, the entry of an Order of the Bankruptcy Court under, inter alia , Sections 363 and 365 of the Bankruptcy Code.

N OW , T HEREFORE , in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions .

For purposes of this Agreement, the following terms have the meanings specified or referenced below.

“ 637 Registrations ” has the meaning set forth in Section 7.9 .

“ Accounts Receivable ” means, with respect to Central City, all accounts receivable, trade accounts and other rights to payment (including overdue accounts receivable) arising in connection with the sale of goods or the rendering of services by Central City (or a predecessor) and the full benefit of all security for such accounts receivable, trade accounts or rights to payment (including overdue accounts receivable), including any other miscellaneous accounts receivable of Central City (or a predecessor), and any claim, remedy or other right of Central City (or a predecessor) related to any of the foregoing.

“ Acquired Assets ” has the meaning set forth in Section 2.1 .

“ Action ” means any legal action, suit or arbitration, or any inquiry, proceeding (including any civil, criminal, administrative or appellate proceeding), hearing, audit or investigation, brought, conducted or heard by or before any court or other Governmental Authority.

“ Affiliate ” of any particular Person means any other Person or Persons controlling, controlled by, or under common control with such particular Person, where “ control ” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, contract, or otherwise.

“ Agreement ” has the meaning set forth in the introductory paragraph.

“ Alcohol Fuel Permits ” has the meaning set forth in Section 7.9 .

“ Allocation Arbiter ” has the meaning set forth in Section 3.3 .

“ Allocation Schedule(s) ” has the meaning set forth in Section 3.3 .

“ Assigned Contracts ” means (i) the Contracts listed or described in Schedule 1.1(a) (as amended prior to the Closing in accordance with Section 2.3(b) , or as otherwise amended by Buyer prior to the Closing to add Contracts relating primarily to the Business, in its sole discretion; provided , however , that the Cure Costs associated with any such Contracts added by Buyer to Schedule 1.1(a) after the Effective Date shall not be included for purposes of calculating the Cure Cost Limit in accordance with Section 2.3(b) ) and (ii) any Contracts that arise in the ordinary course of business after the date hereof and are entered into in accordance with Section 7.2 .

“ Assumed Liabilities ” has the meaning set forth in Section 2.3 .

“ Avoidance Actions ” means any and all claims for relief of Sellers under chapter 5 of the Bankruptcy Code.

“ Bankruptcy Case ” means the cases commenced by Sellers under chapter 11 of the Bankruptcy Code in the Bankruptcy Court, styled In re VeraSun Energy Corporation, et al. , jointly administered under Case No. 08-12606 (BLS), and pending before the Bankruptcy Court.

“ Bankruptcy Court ” has the meaning set forth in the recitals.

“ Bankruptcy Code ” means Title 11 of the United States Code, Sections 101 et seq .

“ Benefit Plan ” has the meaning set forth in Section 5.11 .

“ Bill of Sale ” means the bill of sale substantially in the form attached hereto as Exhibit A .

“ Business ” has the meaning set forth in the recitals.

“ Business Day ” means any day of the year on which national banking institutions in New York are open to the public for conducting business and are not required or authorized by law to close.

 

2

“ Buyer ” has the meaning set forth in the introductory paragraph.

“ Capitalized Leases ” means any unexpired capitalized leases for real property under which Central City is a lessee (or the equivalent).

“ Central City ” has the meaning set forth in the introductory paragraph.

“ Closing ” has the meaning set forth in Section 4.1 .

“ Closing Date ” means the date and time as of which the Closing occurs as set forth in Section 4.1 .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Company ” has the meaning set forth in the introductory paragraph.

“ Contract ” means any agreement, contract, obligation, promise, license, note, lease or undertaking (whether written or oral) that is legally binding.

“ Copyrights ” means all United States and foreign copyright rights in any original works of authorship, whether registered or unregistered, including all copyright registrations and applications.

“ Credit Agreement ” means that certain Master Loan Agreement (as amended, supplemented or otherwise modified prior to the date hereof), dated as of November 15, 2005, by and among Central City and the DIP Lender pursuant to which the DIP Lender made loans and other extensions of credit to Central City from time to time, which loans and other Loan Obligations (as defined in the Credit Agreement) were secured by first priority liens on, among other things, the assets of Central City.

“ Credit Bid and Release ” has the meaning set forth in Section 3.1(b) .

“ Cure Costs ” means amounts that must be paid pursuant to Section 365(b)(1)(A) and (B) of the Bankruptcy Code, to cure all monetary defaults under the Assigned Contracts as set forth in the Sale Order.

“ Cure Costs Limit ” has the meaning set forth in Section 2.3(b) .

“ Deeds ” means the deeds transferring title to the Owned Real Property to be delivered pursuant to Section 4.3(a) .

“ DIP Budget ” shall have the meaning ascribed to it in the DIP Order, as amended from time to time, including through variance waivers by the DIP Lender.

“ DIP Credit Agreement ” means that certain Senior Secured Superpriority Debtor in Possession Credit Agreement (as amended, supplemented or otherwise modified prior to the date hereof), dated January 14, 2009, by and between Central City and the DIP Lender pursuant to which the DIP Lender made loans and other extensions of credit to Central City from time to time, which loans and other Postpetition Obligations (as defined in the DIP Credit Agreement) were secured in part by first priority liens on, among other things, the assets of Central City.

“ DIP Order ” means that certain Final Order (I) Authorizing Debtors to Use Cash Collateral and Obtain Secured Postpetition Financing from AgStar Financial Services, PCA, Pursuant to Sections 363 and 364 of the Bankruptcy Code, and (II) Providing Adequate Protection to Prepetition Lenders Pursuant to Sections 361, 363 and 364 of the Bankruptcy Code entered by the Bankruptcy Court on February 10, 2009 pursuant to which AgStar Financial Services, PCA provided post-petition financing to the Central City.

 

3

“ DIP Lender ” means AgStar Financial Services, PCA.

“ Documents ” means all books, records, files, invoices, Inventory records, product specifications, advertising materials, employment records, customer lists, cost and pricing information, supplier lists, business plans, catalogs, customer literature, quality control records and manuals, research and development files, records and laboratory books, plans, specifications, studies, surveys, maps, drawings, analysis, reports, training materials, ownership and operating manuals, credit records of customers, correspondence with Governmental Authorities and modeling, testing and monitoring data and reporting, notifications and plans relating to environmental health and safety matters (including, in each case, all data and other information stored on discs, tapes or other media).

“ Effective Date ” has the meaning set forth in the introductory paragraph.

“ Encumbrance ” means any charge, lien, claim, mortgage, lease, sublease, hypothecation, deed of trust, pledge, security interest, option, right of use or possession, right of first offer or first refusal, easement, servitude, restrictive covenant, encroachment, encumbrance, judgment, conditional sale or other similar restriction of any kind or nature.

“ Environmental, Health and Safety Laws ” has the meaning set forth in Section 5.5(a) .

“ Equipment ” means all furniture, trade fixtures, equipment, computers, machinery, vehicles, apparatus, appliances, implements, signage, supplies and all other tangible personal property of every kind and description owned by Central City, including spare parts.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ ERISA Affiliate ” has the meaning set forth in Section 5.11 .

“ Excluded Assets ” has the meaning set forth in Section 2.2 .

“ Excluded Liabilities ” has the meaning set forth in Section 2.4 .

“ Facility ” means the dry mill ethanol plant located near Central City, Nebraska including the Owned Real Property on which such facility is located and all buildings, structures, improvements, easements and other property related thereto.

“ Facility Employee ” means any employee who is employed at the Facility immediately prior to the Closing.

“ Filing ” and “ Filings ” have the respective meanings set forth in the recitals.

“ Final Order ” means an action taken or order issued by the applicable Governmental Authority as to which no stay of the action or order is in effect.

“ Finished Ethanol ” means 190 proof ethanol, 200 proof ethanol and denatured ethanol.

 

4

“ Governmental Authority ” means any United States federal, state or local or any foreign government, governmental authority or regulatory or administrative authority or any court, tribunal or judicial body having jurisdiction.

“ Governmental Authorization ” means any approval, consent, license, permit, waiver or other authorization issued, granted or otherwise made available by or under the authority of any Governmental Authority.

“ Hazardous Substance ” means any “pollutant,” “contaminant,” “hazardous waste,” “hazardous material” or “hazardous substance” under any Environmental, Health and Safety Laws.

“ House Marks ” means the following Trademarks: (i) VERASUN; (ii) the VeraSun logo; and (iii) the slogan AMERICA’S SOURCE FOR RENEWABLE FUELS, as owned and used by the Sellers and their Affiliates.

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the relevant rules and regulations thereunder.

“ Intellectual Property ” means, with respect to any Seller, all intellectual property and proprietary rights of any kind, including the following: (i) Trademarks; (ii) Patents; (iii) Copyrights; (iv) Trade Secrets; (v) computer software, computer programs, and databases (whether in source code, object code or other form); and (vi) all rights to sue for past, present and future infringement, misappropriation, dilution or other violation of any of the foregoing and all remedies at law or equity associated therewith.

“ Inventory ” means (i) all Finished Ethanol stored at the Facility; (ii) all Work in Progress; (iii) all Finished Ethanol produced at the Facility and in transit via truck or railcar; (iv) all corn stored at the Facility; (v) all corn stored at third-party facilities, but only to the extent such corn is exclusively for use at the Facility; (vi) all dry distillers grain and wet distillers grain located at the Facility; and (vii) all yeast, enzymes, chemicals and denaturant located at the Facility.

“ Knowledge ” means, with respect to any matter in question, in the case of each Seller, the actual knowledge of any of the individuals listed on Schedule 1.1(b) with respect to such matter, including facts of which such individuals should be aware in the reasonable prudent exercise of their duties and after due inquiry.

“ Legal Requirement ” means any federal, state, provincial, local, municipal, foreign, international, multinational, or other administrative Order, constitution, law, ordinance, principle of common law, regulation, statute or treaty.

“ Liability ” means any debt, losses, claim, damage, demand, fine, judgment, penalty, liability or obligation (whether known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due).

“ Material Adverse Effect ” means a material adverse change in or material adverse effect on the Acquired Assets or the Business (excluding the Excluded Assets and the Excluded Liabilities), in each case taken as a whole, but excluding (a) any change or effect to the extent that it results from or arises out of (i) the Filings; (ii) the execution and delivery of this Agreement or the announcement thereof or the pendency or consummation of the transactions contemplated hereby; (iii) geopolitical conditions or any outbreak or escalation of hostilities or acts of terrorism or war; (iv) any hurricane, tornado, flood, earthquake or other natural disaster; (v) changes in (or proposals to change) Legal Requirements or accounting regulations or principles; (vi) any action contemplated by this Agreement or taken at the

 

5

request of Buyer; (vii) changes in prices or costs of commodities or supplies; (viii) failure of any Seller to meet any internal or published projections, forecasts, estimates or predictions in respect of financial or operating metrics; or (ix) any motion, application, pleading or Order filed under or in connection with the Bankruptcy Case; and (b) any change or effect generally applicable to (i) the industries and markets in which any Seller operates or (ii) economic or political conditions or the securities or financial markets in any country or region, provided, however, that in the case of clauses (b)(i) and (b)(ii), only to the extent such change or effect does not affect the Business or Acquired Assets, taken as a whole, in a disproportionate manner relative to the other participants in the industries and markets in which the Business operates.

“ Order ” means any award, writ, injunction, judgment, order or decree entered, issued, made, or rendered by any Governmental Authority.

“ Owned Real Property ” has the meaning set forth in Section 5.4(a) .

“ Party ” or “ Parties ” means, individually or collectively, Buyer, the Company, US Bio and Central City.

“ Patents ” means United States and foreign patents and patent applications, as well as any continuations, continuations-in-part, divisions, extensions, reexaminations, reissues, renewals and patent disclosures related thereto.

“ Periodic Taxes ” has the meaning set forth in Section 8.1(b) .

“ Permits ” means all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances and Orders.

“ Permitted Encumbrances ” means: (i) easements, leases, reservations, or other rights of others in, or minor defects and irregularities in title that do not materially impair the use of, the encumbered property or assets for the purposes for which they are held; (ii) any Encumbrance or privilege vested in any lessor, licensor or permittor for rent or other obligations solely related to the period after the Closing; (iii) licenses of or other grants of rights to use Intellectual Property entered into in the ordinary course of business that do not materially impair the conduct of the Business; (iv) Encumbrances, title exceptions or other imperfections of title caused by or resulting from the acts of Buyer or any of its Affiliates, employees, officers, directors, agents, contractors, invitees or licensees; (v) liens for Taxes not yet due and payable; and (vi) Encumbrances set forth on Schedule 1.1(c) .

“ Person ” means any individual, corporation (including any non-profit corporation), partnership, limited liability company, joint venture, estate, trust, association, organization or other entity or Governmental Authority.

“ Petition Date ” has the meaning set forth in the recitals.

“ Phase-Out Period ” has the meaning set forth in Section 2.7 .

“ Pre-Paid Expenses ” means all deposits and prepaid charges and expenses of Central City as of the Closing Date to the extent primarily related to the Business, including (i) security deposits with third party suppliers, vendors or service providers, ad valorem taxes and lease and rental payments (other than in connection with any Excluded Assets), (ii) rebates, (iii) refunds, (iv) tenant reimbursements and (v) pre-payments, and in each case, the rights thereto.

 

6

“ Proceeding ” means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative or investigative) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Authority.

“ Professional ” means any Person retained by Sellers or a statutory committee of unsecured creditors in the Bankruptcy Case pursuant to an Order of the Bankruptcy Court under Sections 327, 363 and 1103 of the Bankruptcy Code.

“ Professional Fees ” means fees and disbursements of Professionals relating to services rendered or expenses incurred after the Petition Date.

“ Purchase Price ” has the meaning set forth in Section 3.1 .

“ Real Property ” means the Owned Real Property.

“ Release ” means any past or present spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of a Hazardous Substance into the environment.

“ Representative ” means, with respect to a particular Person, any director, officer, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

“ Sale Order ” means an Order of the Bankruptcy Court approving this Agreement and the transactions contemplated hereby.

“ Sellers ” has the meaning set forth in the introductory paragraph.

“ Subsidiary ” means any entity with respect to which a specified Person (or a Subsidiary thereof) has the power, through the ownership of securities or otherwise, to elect a majority of the directors or similar managing body.

“ Successful Bidder ” has the meaning set forth in the Bidding Procedures.

“ Tax ” or “ Taxes ” (and with correlative meaning, “ Taxable ” and “ Taxing ”) means (i) any federal, state, provincial, local, foreign or other income, alternative, minimum, add-on minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, intangibles, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental (including taxes under Section 59A of the Code), natural resources, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar tax, duty, levy or other governmental charge or assessment or deficiency thereof (including all interest and penalties thereon and additions thereto whether disputed or not) and (ii) any transferee or successor liability (by law, contract or otherwise) in respect of any items described in clause (i) above.

“ Tax Refunds ” has the meaning set forth in Section 2.1(a)(x) .

“ Tax Return ” means any return, declaration, report, claim for refund, information return or other document (including any related or supporting estimates, elections, schedules, statements, or information) filed or required to be filed in connection with the determination, assessment or collection of any Tax or the administration of any laws, regulations or administrative requirements relating to any Tax.

 

7

“ Trademarks ” means United States, state and foreign trademarks, service marks, logos, slogans, trade dress and trade names, Internet domain names and any other similar designations of source of goods or services, whether registered or unregistered, and registrations and pending applications to register the foregoing, and all goodwill related to or symbolized by the foregoing.

“ Trade Secrets ” means trade secrets and other confidential and proprietary business information (including confidential and proprietary manufacturing and production processes and techniques, research and development information, technology, drawings, specifications, designs, plans, proposals, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, customer and supplier lists and information), know how, proprietary processes, formulae, algorithms, models, and methodologies.

“ Transaction Documents ” means this Agreement and any other agreements, instruments or documents entered into pursuant to this Agreement.

“ Transfer ” has the meaning set forth in Section 2.9 .

“ Transfer Taxes ” has the meaning set forth in Section 8.1(a) .

“ Treasury Regulations ” means the regulations promulgated by the U.S. Treasury Department pursuant to the Code.

“ Trustee Fees ” means the fees payable by Sellers to the United States Trustee pursuant to 28 U.S.C. § 1930.

“ US Bio ” has the meaning set forth in the introductory paragraph.

“ WARN Act ” means the Worker Adjustment and Retraining Notification Act of 1988, as amended, any similar Legal Requirement, and the rules and regulations thereunder.

“ Work in Progress ” means all unfinished ethanol (or ethanol components) still involved in the production process (i.e., not Finished Ethanol) and located in fermentation devices, distillation devices, piping or elsewhere within the Facility, as well as all grains and grain products still involved in the production process (i.e., not yet ready to be marketed as dry, modified or wet distillers grains), located anywhere and used in the Business.

1.2 Other Definitions and Interpretive Matters .

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(i) Calculation of Time Period . When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a day other than a Business Day, the period in question shall end on the next succeeding Business Day.

(ii) Dollars . Any reference in this Agreement to $ means U.S. dollars.

 

8

(iii) Exhibits/Schedules . All Exhibits and Schedules attached or annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise defined therein shall be defined as set forth in this Agreement.

(iv) Gender and Number . Any reference in this Agreement to gender includes all genders, and words imparting the singular number only include the plural and vice versa.

(v) Headings . The provision of a table of contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in the construction or interpretation of this Agreement. All references in this Agreement to any “ Section ” or “ Article ” are to the corresponding Section or Article of this Agreement unless otherwise specified.

(vi) Herein . Words such as “ herein ,” “ hereof ” and “ hereunder ” refer to this Agreement as a whole and not merely to a subdivision in which such words appear, unless the context otherwise requires.

(vii) Including . The word “ including ” or any variation thereof means “ including, without limitation, ” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(b) No Strict Construction . Buyer, on the one hand, and Sellers, on the other hand, participated jointly in the negotiation and drafting of this Agreement, and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by Buyer, on the one hand, and Sellers, on the other hand, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. Without limitation as to the foregoing, no rule of strict construction construing ambiguities against the draftsperson shall be applied against any Person with respect to this Agreement.

ARTICLE 2

PURCHASE AND SALE

2.1 Purchase and Sale . Upon the terms and subject to the conditions of this Agreement, on the Closing Date, Sellers shall sell, transfer, assign, convey and deliver, or cause to be sold, transferred, assigned, conveyed and delivered, to Buyer, and Buyer shall purchase, free and clear of all Encumbrances (other than Permitted Encumbrances), all right, title and interest of Sellers in, to or under the following (collectively, the “ Acquired Assets ”):

(a) all of the properties and assets of Sellers (other than the Excluded Assets) of every kind and description, wherever located, real, personal or mixed, tangible or intangible, to the extent owned, leased, licensed, used or held for use primarily in or relating primarily to the Business, as the same shall exist on the Closing Date, including all right, title and interest of Sellers in, to or under:

(i) Inventory;

 

9

(ii) Equipment;

(iii) the Assigned Contracts;

(iv) the Owned Real Property;

(v) all Permits held by, or otherwise used by, Central City and pending applications therefor;

(vi) the Pre-Paid Expenses;

(vii) all goodwill associated with the Business;

(viii) all Accounts Receivable;

(ix) all cash and cash equivalents of Central City, including checks, commercial paper, treasury bills, certificates of deposit and other bank deposits;

(x) any claim, right or interest of Central City in or to any refund, rebate, abatement or other recovery for Taxes not already received or utilized (collectively, “ Tax Refunds ”) payable to Central City, together with any interest due thereon or penalty rebate arising therefrom, for any Tax period (or portion thereof) ending on or before the Closing Date; provided , that Buyer shall at its own cost be responsible for obtaining, and Central City shall cooperate in good faith in obtaining, all such Tax Refunds;

(xi) all rights, claims, credits, causes of action or rights of set off against Persons other than Central City relating to the Acquired Assets or the Business (including, for the avoidance of doubt, those arising under, or otherwise relating, to the Assigned Contracts) or Assumed Liabilities, including rights under vendors’ and manufacturers’ warranties, indemnities, guaranties other than (A) Avoidance Actions and (B) other avoidance claims and causes of action under applicable state law;

(xii) any counterclaims, setoffs or defenses that Sellers may have with respect to any Assumed Liabilities;

(xiii) to the extent assignable, any bonds, obligations or other instruments of indebtedness owed to Central City;

(xiv) to the extent assignable or transferable in accordance with the terms and conditions of the applicable insurance policies, applicable law or the Sale Order, (A) all of Central City’s insurance policies and rights and benefits thereunder (including, without limitation, (1) all rights pursuant to and proceeds from such insurance policies, including unearned premiums, and (2) all claims, demands, proceedings and causes of action asserted by Central City under such insurance policies relating directly to any Acquired Asset or Assumed Liability) and (B) any letters of credit related thereto;

(xv) to the extent reasonably practicable, all telephone, telex and telephone facsimile numbers and other directory listings relating exclusively to the Facility; and

 

10

(xvi) all other or additional privileges, rights and interests associated with the Acquired Assets described in this Section 2.1(a) of every kind and description and wherever located to the extent that they are used or intended for use primarily in connection with the Business as presently being operated.

(b) to the extent available and permitted by applicable Legal Requirements, all Documents that relate primarily to any of the Acquired Assets specified in Section 2.1(a) or the Business, provided that Sellers may retain one copies of such Documents.

2.2 Excluded Assets . The Acquired Assets shall not include any of the following (collectively, the “ Excluded Assets ”):

(a) the Purchase Price delivered to Sellers pursuant to this Agreement;

(b) all Intellectual Property of Sellers (other than any Intellectual Property rights granted to, or obtained by, Sellers pursuant to any Assigned Contract);

(c) all Capitalized Leases;

(d) any shares of capital stock or other equity interest of any Seller or any Seller’s Subsidiaries or any securities convertible into, exchangeable or exercisable for shares of capital stock or other equity interest of any Seller or any Seller’s Subsidiaries;

(e) all cash and cash equivalents of the Company and US Bio, including checks, commercial paper, treasury bills, certificates of deposit and other bank deposits

(f) all minute books, stock ledgers, corporate seals and stock certificates of Sellers;

(g) any Contract that is not an Assigned Contract;

(h) all Permits and pending applications therefor other than those specified in Section 2.1(a)(v) ;

(i) any Avoidance Actions;

(j) the membership units of Big River Resources Grinnel, LLC, an Iowa limited liability company, owned by US Bio;

(k) any claim, right or interest of the Company or US Bio in or to any refund, rebate, abatement or other recovery for Taxes payable to the Company or US Bio, together with any interest due thereon or penalty rebate arising therefrom, for any Tax period (or portion thereof) ending on or before the Closing Date;

(l) the Executive Liability and Entity Securities Liability Policy issued by Federal Insurance Company (Chubb) to the Company, Policy Number 6804-6508 and the Excess Executive Liability Policies issued by St. Paul Mercury Insurance Company (Travelers), Policy Number EC06900746; National Union Fire Insurance Company of Pittsburgh, Pa. (AIG), Policy Number 00-600-06-79; Underwriters at Lloyd’s, London, Policy Number B066465107A08; and, Old Republic Insurance Company, Policy Number CUG 32421 to the Company, including any and all claims, demands, proceedings and causes of action asserted by Sellers under such insurance policies;

 

11

(m) any properties or assets of Sellers not related primarily to, used primarily in or held for use primarily in the Business; and

(n) any rights, claims or causes of action of Sellers under this Agreement or any other Transaction Document.

2.3 Assumed Liabilities . Upon the terms and subject to the conditions of this Agreement, on the Closing Date, Buyer shall assume and agree to discharge, when due (in accordance with their respective terms and subject to the respective conditions thereof), only the following Liabilities (collectively, the “ Assumed Liabilities ”) and no others:

(a) all Liabilities under the Assigned Contracts relating to events or circumstances first arising and accruing after the Closing Date, other than those described in Section 2.3(b) ;

(b) all Cure Costs; provided , however , that in the event the Parties determine after the Effective Date and prior to the Closing that the Cure Costs of the Assigned Contracts set forth on Schedule 1.1(a) on the Effective Date exceed $425,000 in the aggregate (the “ Cure Costs Limit ”), Buyer may amend Schedule 1.1(a) to remove one or more Contracts listed thereon in order to reduce Buyer’s aggregate Liability under this Section 2.3(b) by an amount such that the Cure Costs of the Contracts on Schedule 1.1(a) , as amended, are as close to as reasonably practicable, but not in excess of, the Cure Cost Limit;

(c) Sellers’ Liability for Taxes to the extent provided in Section 8.1 ;

(d) (i) Central City’s Liability for accrued, but unpaid Professional Fees and Trustee Fees through the Closing Date, in each case only to the extent that such Professional Fees or Trustee Fees are set forth in the DIP Budget, plus, to the extent the amount exceeds the amount budgeted therefore in the DIP Budget, Central City’s Allocable Share (as defined in the DIP Order) of such excess Professional Fees and Trustee Fees up to the amount of the Carve-Out (as defined in the DIP Order), and (ii) the amount of accrued and unpaid administrative expenses, other than the Professional Fees and Trustee Fees described in clause (i), set forth in the DIP Budget through and including the Closing Date; and

(e) Sellers’ Liability for mechanics liens on the Facility with priority over the DIP Lender under the DIP Credit Agreement and the lenders under the Credit Agreement.

2.4 Excluded Liabilities . Notwithstanding any provision in this Agreement to the contrary, Buyer shall not assume and shall not be obligated to assume or be obliged to pay, perform or otherwise discharge any Liability of Sellers, and Sellers shall be solely and exclusively liable with respect to all Liabilities of Sellers, other than the Assumed Liabilities (such Liabilities other than Assumed Liabilities, collectively, the “ Excluded Liabilities ”), including the following Liabilities:

(a) all Liabilities of Sellers relating to or otherwise arising, whether before, on or after the Closing, out of, or in connection with the Excluded Assets;

(b) other than the Liabilities described in Section 2.3(b) and except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , all Liabilities under each Assigned Contract to the extent based on facts and circumstances arising or accruing on or prior to the Closing Date;

(c) except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , any and all Liabilities relating to any environmental, health or safety matter (including any Liability or obligation under any Environmental Law), arising out of or relating to Sellers’ operation of the Business or its leasing, ownership or operation of real property on or prior to the Closing Date no matter when raised;

 

12

(d) all Liabilities relating to noncompliance with Permits, Governmental Authorizations, Environmental Health and Safety Laws, and other Legal Requirements that occurred on or before the Closing;

(e) except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , any indebtedness for borrowed money of any Seller and all guarantees of third party obligations by any Seller and reimbursement obligations to guarantors of any Seller’s obligations under letters of credit;

(f) except to the extent that the Liabilities are assumed pursuant to Section 2.3(c) or Section 2.3(d) , all Taxes imposed (i) on the Business or the Acquired Assets that are properly attributable to any tax period (or portion thereof) ending on or before the Closing Date, and (ii) on Sellers regardless of whether attributable to a taxable period ending prior to, on or after the Closing Date ;

(g) except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , all Liabilities of any Seller to any former or current employee (including any Facility Employee), including (i) for salary, wages, commissions, bonus, severance, vacation pay, holiday pay and any other employee payroll obligations (including accrued payroll Taxes); arising out of acts or omissions with respect to any Benefit Plan, employee practices or programs, including employee claims of wrongful discharge or discrimination, (ii) severance liabilities, (iii) obligations of any Seller under employment contracts, (iv) any change of control amounts payable to any employees as a result of the transactions contemplated by this Agreement and (v) all Liabilities that may arise under the WARN Act as a result of the transactions contemplated in this Agreement, including all such Liabilities to any employee employed by Sellers at the Facility immediately prior to the Closing;

(h) except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , drafts or checks outstanding at the Closing;

(i) except to the extent that the Liabilities are assumed pursuant to Section 2.3(d) , obligations under any futures contracts, options on futures, swap agreements or forward sale agreements entered into by any Seller; and

(j) except to the extent that the Liabilities are assumed pursuant to Section 2.3 , any other Liabilities arising out of or in connection with events occurring prior to the Closing Date, regardless of when raised.

2.5 Assignments; Cure Costs .

(a) Sellers shall transfer and assign all Assigned Contracts to Buyer, and Buyer shall assume all Assigned Contracts from Sellers, as of the Closing Date pursuant to Section 365 of the Bankruptcy Code and the Sale Order. In connection with such assumption and assignment, Buyer shall pay and discharge all Cure Costs.

(b) To the maximum extent permitted by the Bankruptcy Code, the Acquired Assets shall be assumed by and assigned to Buyer pursuant to Section 365 of the Bankruptcy Code as of the Closing Date or such other date as specified in an Order or this Agreement, as applicable.

 

13

Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any asset or any right thereunder if an attempted assignment without the consent of a third party, which consent has not been obtained prior to the Closing (after giving effect to the Sale Order and the Bankruptcy Code), would constitute a breach or in any way adversely affect the rights of Buyer or Sellers thereunder. If with respect to any Acquired Asset such consent is not obtained or such assignment is not attainable pursuant to Sections 105, 363 or 365 of the Bankruptcy Code other than as a result of the failure to pay Cure Costs that are not Assumed Liabilities, then such Acquired Asset shall not be transferred hereunder and the Closing shall proceed with respect to the remaining Acquired Assets without any reduction in the Purchase Price. In the case of licenses, certificates, approvals, authorizations, Permits and pending applications therefor, Contracts and other commitments included in the Acquired Assets (i) that cannot be transferred or assigned effectively without the consent of third parties, which consent has not been obtained prior to the Closing (after giving effect to the Sale Order and the Bankruptcy Code), Sellers shall, at Buyer’s sole expense and subject to any approval of the Bankruptcy Court that may be required, reasonably cooperate with Buyer in endeavoring to obtain such consent and, if any such consent is not obtained, Sellers shall, following the Closing, at Buyer’s sole expense and subject to any approval of the Bankruptcy Court that may be required, cooperate with Buyer in all reasonable respects to provide to Buyer the benefits thereof in some other manner, or (ii) that are otherwise not transferable or assignable (after giving effect to the Sale Order and the Bankruptcy Code), Sellers shall, following the Closing, at Buyer’s sole expense and subject to any approval of the Bankruptcy Court that may be required, reasonably cooperate with Buyer to provide to Buyer the benefits thereof in some other manner (including the exercise of the rights of Sellers thereunder); provided that nothing in this Section 2.5(b) shall (x) require Sellers to make any expenditure or incur any obligation on their own or on behalf of Buyer or (y) prohibit any Seller from ceasing operations or winding up its affairs following the Closing.

2.6 Covenant Not to Sue . The Parties acknowledge that certain Trade Secrets owned by Sellers exist in the Facility or in the knowledge of the individuals employed at the Facility as of the Closing Date. Sellers shall not challenge Buyer’s or its Affiliates’ use of such Trade Secrets for any purpose. Buyer acknowledges that Sellers may use or permit others to use such Trade Secrets for any purpose, and Buyer shall not challenge such use.

2.7 Trademark Phase-Out License . Sellers hereby grant to Buyer, effective as of the Closing Date, a non-exclusive, royalty free license to use the House Marks for a period of one (1) year after the Closing Date (the “ Phase-Out Period ”) solely for phase-out purposes in connection with the Acquired Assets. Buyer shall not hold itself out as having any affiliation with Sellers or any of their Affiliates. By no later than the end of the Phase-Out Period, Buyer shall cease to make any use of any House