ASSET PURCHASE AGREEMENT

Exhibit 2.6*

E XECUTION C OPY

 

A SSET P URCHASE A GREEMENT

DATED AS OF A PRIL  6, 2009,

BY AND AMONG

V ALERO R ENEWABLE F UELS C OMPANY , LLC,

V ALERO E NERGY C ORPORATION ,

V ERA S UN E NERGY C ORPORATION

AND

C ERTAIN S UBSIDIARIES OF V ERA S UN E NERGY C ORPORATION

 

 

*

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

 

iv

SCHEDULES

 

EXHIBITS

 

 

v

A SSET P URCHASE A GREEMENT

T HIS A SSET P URCHASE A GREEMENT (this “ Agreement ”), dated as of April 6, 2009 (the “ Effective Date ”), by and among Valero Renewable Fuels Company, LLC, a Texas limited liability company (“ Buyer ”), Valero Energy Corporation, a Delaware corporation (“ Parent ”), VeraSun Energy Corporation, a South Dakota corporation (the “ Company ”), and the Additional Sellers (together with the Company, collectively, “ 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 , on October 31, 2008 (the “ Petition Date ”), each Seller 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;

W HEREAS , the execution and delivery of this Agreement and 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; and

W HEREAS , as an inducement to Sellers to enter into this Agreement, Parent has agreed to guarantee the obligations of Buyer hereunder on the terms and conditions set forth herein.

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

D EFINITIONS

1.1 Definitions .

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

“ Accounts Receivable ” means, with respect to Sellers, all accounts receivable and other rights to payment from customers of Sellers, including those consisting of all accounts receivable in respect of goods shipped or products sold or services rendered to customers by Sellers, any other miscellaneous accounts receivable of Sellers, and any claim, remedy or other right of Sellers related to any of the foregoing; in all cases, however, only to the extent that such accounts receivable and other payment rights accrued prior to the Closing.

“ Accrued PTO ” has the meaning set forth in Section 8.4(d) .

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

“ Action ” means any legal action, suit or arbitration, or any inquiry, proceeding or investigation, by or before any Governmental Authority.

“ Additional Sellers ” means VeraSun Marketing, LLC, a Delaware limited liability company, US BioEnergy Corporation, a South Dakota corporation, and VeraSun Albert City, LLC, an Iowa limited liability company.

“ Administrative Expenses Account ” has the meaning set forth in Section 3.3(c) .

“ Affiliate ” has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act of 1934.

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

“ Allowed Administrative Transaction Expenses ” means, collectively, the following fees payable by Sellers solely to the extent that such fees are or become allowed administrative expense claims of Sellers’ estates pursuant to Section 503(b) of the Bankruptcy Code: (A) monthly and hourly Professional Fees, (B) Trustee Fees, (C) transaction fees payable under the Rothschild Inc. engagement letter dated as of July 31, 2008, as amended as of October 29, 2008, (D) transaction fees payable under the AP Services, LLC engagement letter dated October 31, 2008 and (E) fees and expenses payable to the Deposit Escrow Agent and the Expense Fund Agent in accordance with the applicable Transaction Documents, including any such fees and expenses paid by Buyer prior to the Closing.

“ Applicable Rate ” means, for a particular day, the prime rate as reported in The Wall Street Journal published for such day or, if such rate is regularly reported in The Wall Street Journal, but is not reported on such day, such rate as most-recently reported in The Wall

 

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Street Journal (or, if such rate is no longer reported in The Wall Street Journal, a comparable rate), calculated on a daily basis based on a 365-day year.

“ Approved Contract ” means a Contract designated as such pursuant to Section 7.8 .

“ Assigned Contracts ” means (i) the Contracts listed or described in Schedule 1.1(a) , (ii) any Contracts of Sellers listed or described in Schedule 1.1(a)-1 that are designated by Buyer to be assumed and assigned to Buyer in accordance with Section 2.5 and (iii) Approved Contracts that, as of the Closing, are executory and have not been breached by any party thereto.

“ Assigned Leases ” means (i) the Leases listed or described in Schedule 1.1(b) and (ii) any Leases listed or described in Schedule 1.1(b)-1 that are designated by Buyer to be assumed and assigned to Buyer in accordance with Section 2.5 .

“ Assignment Election ” has the meaning set forth in Section 2.5(a) .

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

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

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

“ Base Price ” means $72,000,000.

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

“ Bid Deposit ” means the sum of $2,550,000, which amount has been delivered by Buyer to Sellers in accordance with the terms of the bid procedures approved by the Bankruptcy Court pursuant to the Bidding Procedures Order.

“ Bidding Procedures Order ” means the Order of the Bankruptcy Court styled “Order Pursuant to 11 U.S.C. §§ 105(A), 363, 365 and Fed. R. Bankr. P. 2002, 6004, 6006 (A) Establishing Bidding and Auction Procedures Related to the Sale of Some or All of the Debtors’ Assets; (B) Approving Bid Protections for Sale of VSE Assets; (C) Establishing Procedures for the Debtors to Enter into Additional Stalking Horse Agreements with Bid Protections in Connection with Sale of Assets; (D) Scheduling an Auction and Sale Hearing for the Sale of the Debtors’ Assets; (E) Permitting Credit Bidding Pursuant to Bankruptcy Code Section 363(K); (F) Establishing Certain Notice Procedures for Determining Cure Amounts; (G) Approving Form and Manner of Notice of All Procedures, Protections, Schedules and Agreements; and (H)

 

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Granting Certain Related Relief” and entered on February 20, 2009 (Docket No. 699 in the Bankruptcy Case).

“ Bill of Sale ” means the Bill of Sale substantially in the form attached hereto as Exhibit C .

“ 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 to close.

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

“ Buyer Inventory Adjustment Amount ” has the meaning set forth in Section 3.5(e) .

“ Buyer Objection Notice ” has the meaning set forth in Section 3.5(b) .

“ Buyer Obligations ” has the meaning set forth in Section 8.6 .

“ Buyer Parties ” means Buyer, Parent, their respective Affiliates and the former, current or future equityholders and Representatives of each of the foregoing.

“ Buyer Plans ” has the meaning set forth in Section 8.4(b) .

“ Buyer Statement ” has the meaning set forth in Section 3.3(a) .

“ Buyer Termination Notice ” has the meaning set forth in Section 11.1(b)(i) .

“ Buyer’s Additional Deposit ” has the meaning set forth in Section 3.2 .

“ Buyer’s Interim Access Manager ” has the meaning set forth in Section 7.1 .

“ Cash Consideration ” means the Base Price plus (i) (A) the Inventory Final Amount, (B) Pre-Paid Expenses and (C) the dollar amount of Sales Taxes allocated to Buyer pursuant to Section 8.1(a) , minus (ii) (A) the dollar amount of real and personal property Taxes allocated to Sellers pursuant to Section 8.1(b) , ¹ (B) the dollar amount of Transfer Taxes allocated to Sellers pursuant to Section 8.1(a) , (C) any Restoration Costs pursuant to Section 8.10(c) and (D) any amounts mutually agreed pursuant to Section 8.10(b) .

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

1	For the avoidance of doubt, this includes any real or personal property Taxes for any Pre-Closing Tax Period that Buyer, pursuant to Section 8.1(b), either pays at the Closing or assumes and agrees to pay after the Closing.

 

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

“ Closing Date Payment ” has the meaning set forth in Section 3.3(d) .

“ Closing Direct Payment ” has the meaning set forth in Section 3.3(b) .

“ Closing Statement ” has the meaning set forth in Section 3.3(a) .

“ 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 or undertaking (in each case whether written or oral), other than a Lease, 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.

“ Cure Costs ” means amounts that must be paid, including pursuant to Sections 365(b)(1)(A) and (B) of the Bankruptcy Code, in connection with the assumption and/or assignment of the Assigned Contracts and the Assigned Leases in respect of any Liabilities that arose thereunder prior to the filing of the Filings.

“ Deeds ” means the deeds transferring title to the Owned Real Property.

“ Deposit ” has the meaning set forth in Section 3.2 .

“ Deposit Escrow Agent ” has the meaning set forth in Section 3.2 .

“ Deposit Escrow Agreement ” has the meaning set forth in Section 3.2 .

“ Designation Deadline ” means 5:00 p.m., Central Time, on the day that is thirty (30) days after the Closing Date.

“ Documents ” means all books, records, files, invoices, Inventory records, product specifications, advertising materials, 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 and credit records of customers (including all data and other information stored on discs, tapes or other media), plans, specifications, studies, surveys, maps, plats, drawings, analyses, reports, training materials, and ownership and operating manuals; in all cases to the extent used in or to the extent relating to the assets, properties, business or operations of the Business.

“ 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

 

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first offer or first refusal, easement, servitude, restrictive covenant, encroachment, encumbrance, third party interest or other restriction or limitation of any kind.

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

“ Equipment ” means all furniture, trade fixtures, equipment, computers, machinery, apparatus, appliances, implements, signage, supplies and all other tangible personal property of every kind and description owned by Sellers and used or held for use exclusively in the Business, other than 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 .

“ Estimated Cash Consideration ” means the Base Price plus (i) (A) the Inventory Estimated Amount, (B) Pre-Paid Expenses and (C) the dollar amount of Sales Taxes allocated to Buyer pursuant to Section 8.1(a) , minus (ii) (A) the dollar amount of real and personal property Taxes allocated to Sellers pursuant to Section 8.1(b) , (B) the dollar amount of Transfer Taxes allocated to Sellers pursuant to Section 8.1(a) , (C) any Restoration Costs pursuant to Section 8.10(c) and (D) any amounts mutually agreed pursuant to Section 8.10(b) .

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

“ Excluded Deposits ” means all deposits (including customer deposits and security deposits for rent and electricity) and prepaid charges and expenses of Sellers, other than Pre-Paid Expenses.

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

“ Expense Fund ” has the meaning set forth in Section 3.3(c) .

“ Expense Fund Agent ” has the meaning set forth in Section 3.3(c) .

“ Facility Software ” has the meaning set forth in Section 2.1 .

“ Facility ” means the production facility listed on Exhibit D .

“ Facility Employee ” means any of the individuals listed on Schedule 1.1(d) , as updated pursuant to Section 7.6(b) .

“ 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: (i) no request for stay of the action or order is pending, no such stay is in effect, and, if any deadline for filing any such request is designated by statute or regulation, it is passed, including any extensions thereof; (ii) no petition for rehearing or

 

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reconsideration of the action or order, or protest of any kind, is pending before the Governmental Authority and the time for filing any such petition or protest is passed; (iii) the Governmental Authority does not have the action or order under reconsideration or review on its own motion and the time for such reconsideration or review has passed; and (iv) the action or order is not then under judicial review, there is no notice of appeal or other application for judicial review pending, and the deadline for filing such notice of appeal or other application for judicial review has passed, including any extensions thereof.

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

“ 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.

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

“ Inactive Employee ” has the meaning set forth in Section 8.4(a) .

“ Initial Resolution Period ” has the meaning set forth in Section 3.5(c) .

“ Intellectual Property ” means all intellectual property, including all Copyrights, Patents, Trademarks and Trade Secrets, owned, used or licensed by Sellers and used or held for use exclusively in the Business.

“ Inventory ” means all of the following:

 

(i)

all Finished Ethanol stored at the Facility;

 

(ii)

all corn stored at the Facility;

 

(iii)

all dry distillers grain and wet distillers grain located at the Facility;

 

(iv)

all spare parts located at the Facility; and

 

(v)

all yeast, enzymes, chemicals and denaturant located at the Facility.

“ Inventory Adjustment Payment Date ” has the meaning set forth in Section 3.5(f) .

“ Inventory Arbiter ” has the meaning set forth in Section 3.5(d) .

 

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“ Inventory Closing Value ” means the value of Sellers’ Inventory, determined in accordance with Schedule 1.1(e) , as of the Closing.

“ Inventory Estimated Amount ” means 90% of Sellers’ good-faith estimate of the Inventory Closing Value.

“ Inventory Final Amount ” means the Inventory Closing Value, as determined pursuant to Section 3.5 .

“ Knowledge ” means, with respect to any matter in question, in the case of Sellers, the actual knowledge of any of the individuals listed on Schedule 1.1(f) with respect to such matter.

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

“ Leases ” has the meaning set forth in Section 5.4(a) .

“ 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.

“ Lessor Leases ” has the meaning set forth in Section 5.4(a) .

“ 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 any change, event or occurrence that individually or in the aggregate (taking into account all other such changes, events or occurrences) has had, or would be reasonably likely to have, (x) 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, or (y) a material adverse change in or to the ability of Sellers to consummate the transactions contemplated by this Agreement, but excluding, in either case, (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 consummation of the transactions contemplated hereby; (iii) changes in (or proposals to change) Legal Requirements or accounting regulations or principles; or (iv) any action contemplated by this Agreement or taken at the request of Parent or Buyer; and (b) any change or effect generally applicable to (i) the industries and markets in which any Sellers operate or (ii) economic or political conditions or the securities or financial markets in any country or region, in the case of each of clauses (b)(i) and (b)(ii), to the extent that such change or effect does not affect the Business, taken as a whole, in a disproportionate manner relative to 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) .

 

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

“ Parent Guarantee ” has the meaning set forth in Section 8.6 .

“ Party ” or “ Parties ” means, individually or collectively, Parent, Buyer and Sellers.

“ 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.

“ Paying Party ” has the meaning set forth in Section 8.1(c) .

“ Permits ” means all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals, clearances and Orders that are necessary for Sellers to own, lease and operate their properties and assets or to carry on the Business as it is now being conducted.

“ 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 Parent or Buyer or any of their respective 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(g) .

“ 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.

“ Post-Closing Tax Period ” has the meaning set forth in Section 8.1(b) .

“ Post-Petition Cure Costs ” means amounts that must be paid, including pursuant to Sections 365(b)(1)(A) and (B) of the Bankruptcy Code, in connection with the assumption and/or assignment of the Assigned Contracts and the Assigned Leases in respect of any Liabilities that arise thereunder after the filing of the Filings.

“ Pre-Closing Designated Contract or Lease ” has the meaning set forth in Section 2.5(c) .

“ Pre-Closing Determined Cure Amount ” has the meaning set forth in Section 2.5(c) .

“ Pre-Closing Tax Period ” has the meaning set forth in Section 8.1(b) .

 

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“ Pre-Paid Expenses ” means all (i) prepaid charges and expenses of Sellers solely to the extent that such prepaid charges and expenses (A) relate to natural gas, denaturant, chemicals, utilities and rail, (B) were deposited or paid pursuant to the Contracts set forth on Schedule 1.1(h) and (C) relate to goods to be provided or services to be performed to or for the benefit of Buyer or any of its Affiliates at any time after Closing, and (ii) cash deposits paid by Sellers under any of the Contracts set forth on Schedule 1.1(h) , which deposits will be transferred to Buyer or its designated Affiliates at Closing.

“ 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 Section 327, 363 or 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 listed or described on Schedule 2.1(d) and the Leased Real Property as to which Sellers are lessees (or the equivalent) pursuant to Leases included on Schedule 1.1(b) or Schedule 1.1(b)-1 .

“ Reimbursing Party ” has the meaning set forth in Section 8.1(c) .

“ 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 (including the abandonment or discharging of barrels, containers and other closed receptacles containing any Hazardous Substance).

“ 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.

“ Restoration Costs ” has the meaning set forth in Section 8.10 .

“ Sale Motion ” means the motion styled “Motion Pursuant to 11 U.S.C. §§ 105(a), 363, 365 and Fed. R. Bankr. P. 2002, 6004, 6006 for (I) Entry of an Order (A) Establishing Bidding and Auction Procedures Related to the Sale of Some or All of the Debtors’ Assets; (B) Approving Bid Protections for Sale of VSE Assets; (C) Establishing Procedures for the Debtors to Enter into Additional Stalking Horse Agreements with Bid Protections in Connection with Sale of Assets; (D) Scheduling an Auction and Sale Hearing for the Sale of the Debtors’ Assets; (E) Permitting Credit Bidding Pursuant to Bankruptcy Code Section 363(K); (F) Establishing Certain Notice Procedures for Determining Cure Amounts; (G) Approving Form and Manner of Notice of All Procedures, Protections, Schedules and Agreements; and (H) Granting Certain Related Relief; and (II) Entry of an Order (A) Approving the Sale of Debtors’ Assets Free and

 

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Clear of All Liens, Claims, Encumbrances and Interests; (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases; and (C) Granting Certain Related Relief” and filed with the Bankruptcy Court on February 6, 2009 (Docket No. 622 in the Bankruptcy Case).

“ Sale Order ” means the Order of the Bankruptcy Court styled “Order (A) Approving the Sale of Assets of VeraSun Albert City, LLC Free and Clear of all Liens, Claims, Encumbrances and Interests; (B) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases; and (C) Granting Certain Related Relief” and entered by the Bankruptcy Court on March 31, 2009 (Docket No. 951 in the Bankruptcy Case).

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

“ Scheduled Contracts and Leases ” means the Contracts of Sellers listed or described in Schedule 1.1(a)-1 and the Leases listed or described in Schedule 1.1(b)-1 .

“ Seller Inventory Adjustment Amount ” has the meaning set forth in Section 3.5(e) .

“ Seller Inventory Statement ” has the meaning set forth in Section 3.5(a) .

“ Seller Parties ” means Sellers, their respective Affiliates and the former, current or future equityholders and Representatives of each of the foregoing.

“ Seller Termination Notice ” has the meaning set forth in Section 11.1(c)(i) .

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

“ Sellers’ Interim Access Manager ” has the meaning set forth in Section 7.1 .

“ Specified Trade Payables ” means accounts payable obligations of Sellers incurred after the Petition Date, solely to the extent that such obligations (i) relate to natural gas, utilities and corn, (ii) will not be payable by Buyer following the Closing pursuant to any Assigned Contract and (iii) would have an administrative priority claim attached to them under Section 503(b) of the Bankruptcy Code.

“ Straddle Period ” has the meaning set forth in Section 8.1(b) .

“ 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.

“ 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,

 

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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 liability in respect of any items described in clause (i) above.

“ 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.

“ Title Company ” means First American Title Insurance Company, 30 North LaSalle Street, Suite 310, Chicago, Illinois 60602, Attention: Jim McIntosh.

“ Trade Payables Account ” has the meaning set forth in Section 3.3(c) .

“ Trade Secrets ” means trade secrets and other confidential and proprietary information and know-how.

“ 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.

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

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

“ Transferred Employees ” has the meaning set forth in Section 8.4(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.

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

“ WARN List ” has the meaning set forth in Section 8.4(c) .

1.2 Other Definitions and Interpretive Matters .

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

 

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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.

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

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.

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.

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.

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.

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 and Parent, 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 and Parent, 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

P URCHASE AND S ALE

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

 

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Encumbrances (other than Permitted Encumbrances), all right, title and interest of Sellers in, to or under the following (herein collectively called the “ Acquired Assets ”): (i) 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, owned, leased, licensed, used or held for use exclusively in or relating exclusively to the Business, as the same shall exist on the Closing Date, and (ii) without limiting the generality of clause (i) of this Section 2.1 , all of the following properties and assets of Sellers, whether they relate exclusively to the Business or not (except where so noted in the following list or in any definition used in the following list):

(a) all Inventory;

(b) all Equipment;

(c) the Assigned Contracts;

(d) the Owned Real Property listed or described on Schedule 2.1(d) ;

(e) the Assigned Leases;

(f) all Permits and pending applications therefor, in each case to the extent assignable, used exclusively in connection with the Business;

(g) all Intellectual Property other than Intellectual Property included in the Excluded Assets;

(h) all Pre-Paid Expenses;

(i) all goodwill associated with the Business or the Acquired Assets;

(j) to the extent available and permitted by applicable law, all Documents that relate to any Acquired Assets, provided that Sellers may retain copies of such Documents;

(k) all assets set forth in Schedule 2.1(k) ;

(l) all rights under or pursuant to all warranties, representations and guarantees made by suppliers, manufacturers, contractors or others to the extent relating to the operation of the Business or affecting the Equipment, Inventory or other tangible Acquired Assets;

(m) all bonds, notes and other similar securities with respect to which Sellers or any of their Affiliates is the holder, payee or other beneficiary (but not an obligor), to the extent issued by any Governmental Authority or other issuer to fund infrastructure improvements or other economic development activities related to the Facility, or the repayment of which is otherwise to be made, directly or indirectly, through any tax payments or other payment obligations that, with respect to any of the foregoing, will become the responsibility (directly or indirectly, whether contractually or otherwise) of Buyer or any successor owner of the Facility;

 

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

(o) all other or additional privileges, rights and interests associated with the Acquired Assets of every kind and description and wherever located to the extent that they are used or intended for use exclusively in connection with the Business.

The Intellectual Property transferred pursuant to Section 2.1(ii)(g) specifically includes “seat/concurrent user licenses” related to the Microsoft Great Plains software and the Intellego Cinch software in each case in a number reasonably necessary for use at the Facility as licensed to Sellers for the Facility and otherwise consistent with Sellers’ past practices (the “ Facility Software ”); provided , however , such transfer (A) shall not include Sellers’ corporate server licenses related to the Microsoft Great Plains software and the Intellego Cinch software and (B) shall occur only if such transfer is consented to in writing by Microsoft and Intellego Cinch (and any other necessary third-party licensor), as applicable, on terms that will not interfere in any material respect with Sellers’ use of their corporate server licenses related to the Microsoft Great Plains software and the Intellego Cinch software or Sellers’ remaining “seat/concurrent user licenses” related to the Microsoft Great Plains software and the Intellego Cinch software or impose costs upon Sellers not reimbursed by Buyer. Sellers shall have no liability to Buyer in the event that Microsoft or Intellego Cinch (or any other necessary third-party licensor) does not consent to such transfer. To the extent the transfer of the Facility Software is permitted as provided in this paragraph, Sellers agree to, at Buyer’s reasonable request, provide Buyer such instruments of transfer as shall be reasonably necessary or appropriate to effect the transfer of the Facility Software to Buyer.

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 cash and cash equivalents, including checks, commercial paper, treasury bills, certificates of deposit and other bank deposits as of the Closing Date, in each case excluding any item described in Section 2.1(ii)(m) and excluding any deposit amounts included in Pre-Paid Expenses;

(c) all Owned Real Property not listed or described on Schedule 2.1(d) and not otherwise comprising any portion of the Facility (it being understood that it is the intention of Sellers to convey to Buyer all real property and interests in real property comprising any portion of the Facility);

(d) all Trade Secrets;

(e) the intellectual property listed or described on Schedule 2.2(e) ;

(f) all capitalized leases;

 

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

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

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

(j) any Lease that is not an Assigned Lease;

(k) any refunds of Taxes paid by Sellers with respect to a Pre-Closing Tax Period and not otherwise reimbursed by Buyer hereunder;

(l) all Accounts Receivable;

(m) all insurance policies and rights to proceeds thereof;

(n) all telephone, telex and telephone facsimile numbers and other directory listings, other than telephone, telex and facsimile numbers specific exclusively to the Facility and included in Acquired Assets pursuant to Section 2.1(ii)(n) ;

(o) all Permits and pending applications therefor other than those specified in Section 2.1(ii)(f) ;

(p) any properties and assets of the Company or VeraSun Marketing, LLC, a Delaware limited liability company, not related exclusively to, used exclusively in or held for use exclusively in the Business, other than those (if any) specifically identified as included in “Acquired Assets” in Section 2.1(ii) ;

(q) all Excluded Deposits;

(r) subject to Section 8.9 , the Avoidance Actions; and

(s) 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 execute and deliver to Sellers the Assumption Agreement in the form attached hereto as Exhibit F (the “ Assumption Agreement ”) pursuant to which 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) Assigned Contracts . All Liabilities under the Assigned Contracts relating to events or circumstances first arising and accruing after the Closing Date.

 

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(b) Assigned Leases . All Liabilities under the Assigned Leases relating to events or circumstances first arising and accruing after the Closing Date.

(c) Cure Costs . All Cure Costs.

The assumption by Buyer of the Assumed Liabilities shall not, in any way, enlarge the rights of any third parties relating thereto.

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 ”). For the purpose of clarity, and without limitation of the generality of the foregoing, the “ Excluded Liabilities ” shall include, without limitation, each of the following Liabilities of Sellers other than the Assumed Liabilities:

(a) all indebtedness for borrowed money of Sellers;

(b) all guarantees of third party obligations by Sellers and reimbursement obligations to guarantors of Sellers’ obligations or under letters of credit;

(c) subject to Section 8.1 , all Taxes imposed (i) on the Business or the Acquired Assets that are properly attributable to any Pre-Closing Tax Period and (ii) on Sellers regardless of whether attributable to a Pre-Closing Tax Period or a Post-Closing Tax Period;

(d) all Actions and Proceedings pending against Sellers on or before the Closing Date or to the extent relating to the Business or the Acquired Assets prior to the Closing Date even if instituted after the Closing Date;

(e) all Liabilities of Sellers to any owner or former owner of capital stock or warrants, holder of indebtedness for borrowed money, or current or former officer or director of any Seller;

(f) except as provided in Section 8.4 , all Liabilities of Sellers to any of their former or current employees (including, but not limited to, Facility Employees and Transferred Employees), including, without limitation: (i) for salary, wages, benefits, vacation, supplies or overhead, (ii) arising out of acts or omissions with respect to any Benefit Plan, employee practices or programs, including employee claims of wrongful discharge or discrimination, (iii) severance liabilities, (iv) obligations of Sellers under employment contracts and (v) any change of control amounts payable to any employees as a result of the transactions contemplated by this Agreement;

(g) drafts or checks outstanding at the Closing;

(h) any claims to the extent related to Excluded Assets, including Contracts that are not Assigned Contracts and Leases that are not Assigned Leases;

 

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(i) all Liabilities under each Assigned Contract and each Assigned Lease to the extent based on facts and circumstances arising or accruing on or prior to the Closing Date;

(j) all Post-Petition Cure Costs;

(k) obligations under any futures contracts, options on futures, swap agreements or forward sale agreements entered into by Sellers;

(l) Liabilities arising out of the use, storage or Release of any Hazardous Substance at or from the Real Property at any time prior to Closing, and Liabilities arising out of any violation by Sellers of any Environmental, Health and Safety Laws; and

(m) other Liabilities relating to the conduct of the Business or to the Acquired Assets (and the use thereof) arising or accruing at any time on or prior to the Closing Date.

2.5 Designation of Assigned Contracts and Assigned Leases; Cure Costs .

(a) Prior to the Designation Deadline, Buyer shall designate by notice to Sellers (such notice to be signed and dated by Buyer) each of the Scheduled Contracts and Leases, if any, that Buyer elects to have assumed and assigned to it as an Assigned Contract or Assigned Lease effective as of the Designation Deadline (each, an “ Assignment Election ”). Buyer and Sellers shall cause each of the Scheduled Contracts and Leases for which Buyer delivers an Assignment Election prior to the Designation Deadline to be assumed and assigned to Buyer pursuant to one or more contract assignment and assumption agreements, in the form attached hereto as Exhibit G or Exhibit K , as applicable, duly executed by the applicable Sellers and Buyer.

(b) Sellers shall be responsible for the verification of all Cure Costs for each Assigned Contract and Assigned Lease and for the Scheduled Contracts and Leases, including all administrative responsibilities associated therewith, in the Bankruptcy Case and otherwise, and shall use reasonable best efforts to establish the proper Cure Cost, if any, for each Assigned Contract and Assigned Lease (as soon as practicable and in all events prior to the Designation Deadline, where possible), including taking all reasonable actions with respect to the filing and prosecution of any pleadings and proceedings in the Bankruptcy Court and the service and delivery of any related notices or pleadings. Sellers shall promptly share with Buyer all relevant information forming the basis for Sellers’ determination of Cure Costs, as well as any objections or other correspondence from contract counterparties related thereto.

(c) At the Closing, Buyer shall pay any and all Pre-Closing Determined Cure Amounts. “ Pre-Closing Determined Cure Amount ” means the Cure Cost of a Pre-Closing Designated Contract or Lease for which the Cure Cost thereof has been finally established prior to the Closing Date (whether by Order of the Bankruptcy Court or agreement among Buyer, Sellers and the applicable counterparty thereto). “ Pre-Closing Designated Contract or Lease ” means (i) each Contract listed or described on Schedule 1.1(a) , (ii) each Lease listed or described on Schedule 1.1(b) and (iii) each of the Scheduled Contracts and Leases for which Buyer has delivered an Assignment Election to Sellers prior to the Closing Date.

 

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(d) With respect to each Assigned Contract and Assigned Lease, (i) Buyer shall pay, satisfy or otherwise discharge all Cure Costs related thereto, and such Cure Costs shall be an Assumed Liability for which Buyer is solely responsible and for which none of Sellers shall have any liability whatsoever, and (ii) Sellers shall pay, satisfy or otherwise discharge all Post-Petition Cure Costs related thereto, and such Post-Petition Cure Costs shall be an Excluded Liability for which Sellers are solely responsible and for which Buyer shall have any liability whatsoever.

(e) With respect to any Scheduled Contract and Lease for which Buyer has not delivered an Assignment Election on or prior to the Closing Date, Buyer shall pay to the counterparty under such Scheduled Contract and Lease (or reimburse Sellers for any such payment made by Sellers) any amounts due and payable for services rendered, goods provided or benefits obtained by Buyer thereunder after the Closing Date and prior to the Designation Deadline. After the Designation Deadline, Sellers may in their sole and absolute discretion, subject to applicable Legal Requirements, assume, assign or reject any Contract or Lease other than an Assigned Contract or Assigned Lease.

(f) From the Effective Date through and including the Designation Deadline, (i) Sellers shall maintain and perform all Liabilities required to be performed under each Assigned Contract, each Assigned Lease or each of the Scheduled Contracts and Leases, subject to Section 2.5(e) , and (ii) Sellers shall not reject any Assigned Contract, any Assigned Lease or any of the Scheduled Contracts and Leases unless otherwise agreed to in writing by Buyer.

(g) From the Effective Date through the date that is seven (7) Business Days prior to Closing, Buyer shall have the right to elect, by written notice to Sellers, to (i) move any Contract other than an Approved Contract from Schedule 1.1(a) to Schedule 1.1(a)-1 and (ii) move any Lease from Schedule 1.1(b) to Schedule 1.1(b)-1 .

(h) Each of the Scheduled Contracts and Leases as to which Buyer has not delivered an Assignment Election prior to the Designation Deadline shall be deemed rejected effective as of the Designation Deadline.

2.6 Assignment of Acquired Assets .

To the maximum extent permitted by the Bankruptcy Code, the Acquired Assets shall be assumed and assigned to Buyer pursuant to Section 365 of the Bankruptcy Code as of the Closing Date or such other date as specified in the Sale Order or this Agreement, as applicable. 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 be legally invalid. 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 (other than Cure Costs to be paid by Buyer pursuant to Section 2.5 ), 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

 

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Purchase Price. In the case of licenses, certificates, approvals, authorizations, leases, Contracts and other commitments included in the Acquired Assets (i) that cannot be transferred or assigned 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 2.6 shall (x) require Sellers to make any expenditure or incur any obligation on their own or on behalf of Buyer or Parent for which funds in the full amount of such expenditure or obligation are not provided to Sellers by Buyer in advance in cash or (y) prohibit any Seller from ceasing operations or winding up its affairs following the Closing.

2.7 Covenant Not to Sue .

The Parties acknowledge that certain Trade Secrets owned by Sellers may exist in the Facility or other Acquired Assets 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’ (or any of their respective successors’ or assigns’) use of such Trade Secrets for any purpose. Buyer and Parent acknowledge that Sellers may use or permit others to use such Trade Secrets for any purpose, and Buyer and Parent shall not challenge such use. Each of Buyer and Parent, on the one hand, and Sellers, on the other hand, expressly (i) releases the other from any Liabilities arising out of the use of the Trade Secrets, and (ii) waives, disclaims, and releases any rights in and to any improvements or enhancements made to the Trade Secrets by or on behalf of the other after the Closing Date.

2.8 Further Assurances .

(a) At the Closing, and at all times thereafter as may be necessary, Sellers shall execute and deliver to Buyer such other instruments of transfer as shall be reasonably necessary or appropriate to vest in Buyer good and indefeasible title to the Acquired Assets free and clear of all Encumbrances other than Permitted Encumbrances and to comply with the purposes and intent of this Agreement and such other instruments as shall be reasonably necessary or appropriate to evidence the assignment by Sellers and assumption by Buyer of the Assigned Contracts and the Assigned Leases, and each of Sellers, on the one hand, and Buyer and Parent, on the other hand, shall use its reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable law, and execute and deliver such documents and other papers, as may be required to consummate the transactions contemplated by this Agreement; provided that nothing in this Section 2.8 shall prohibit any Seller from ceasing operations or winding up its affairs following the Closing.

 

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(b) Each Party shall be entitled to the remedy of specific performance to enforce the covenants and agreements set forth in this Section 2.8 . This Section 2.8 shall survive the Closing.

ARTICLE 3

P URCHASE P RICE

3.1 Purchase Price .

The purchase price (the “ Purchase Price ”) for the purchase, sale, assignment and conveyance of Sellers’ right, title and interest in, to and under the Acquired Assets shall consist of:

(a) cash in the amount of the Cash Consideration; and

(b) the assumption of the Assumed Liabilities.

3.2 Deposit .

Not later than the first (1st) Business Day after the Effective Date, Sellers shall transfer $1,445,850 of the Bid Deposit to U.S. Bank National Association, or such other Person as may be mutually agreed upon by Sellers and Buyer (the “ Deposit Escrow Agent ”), and Buyer shall deposit $2,154,150 (“ Buyer’s Additional Deposit ”) with the Deposit Escrow Agent, such transfer and deposit to be made by wire transfer of immediately available funds. The Bid Deposit plus Buyer’s Additional Deposit (collectively, the “ Deposit ”) shall be held by the Deposit Escrow Agent in a segregated account pursuant to an escrow agreement substantially in the form of Exhibit I (the “ Deposit Escrow Agreement ”). Moneys held pursuant to the Deposit Escrow Agreement shall be free and clear of all Encumbrances. All interest or other earnings, if any, on amounts held pursuant to the Deposit Escrow Agreement shall automatically become a part of the Deposit as such interest or earnings, if any, accrue. Sellers shall be entitled to disbursement of the Deposit only (a) at the Closing, which disbursement shall be to the credit of Buyer as provided in Section 3.3(d)(ii)(A) , or (b) in the event of the termination of this Agreement pursuant to Section 11.1(c)(i) or Section 11.1(c)(ii) , as provided in Section 11.2(b) . In the event of the termination of this Agreement other than pursuant to Section 11.1(c)(i) or Section 11.1(c)(ii) , Buyer shall be entitled to disbursement of the Deposit, as provided in Section 11.2(c) .

3.3 Payments on the Closing Date .

(a) Not later than 12:00 noon, Central Time, on the Business Day immediately prior to the Closing Date, Sellers shall deliver to Buyer a written statement, reasonably satisfactory to Buyer and signed by an officer of each Seller (the “ Closing Statement ”), (i) setting forth the Inventory Estimated Amount, together with reasonable supporting documentation regarding the determination and calculation of such amount, (ii) itemizing each Pre-Paid Expense and the amount thereof, and setting forth the aggregate amount of the Pre-Paid Expenses, (iii) itemizing each Specified Trade Payable and indicating for each the applicable vendor or supplier, the dollar amount thereof that has become fixed, the

 

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estimated dollar amount thereof that has not become fixed and the contractual date on which payment thereof shall be due, together with invoices or other reasonable supporting documentation therefor, (iv) itemizing each Allowed Administrative Transaction Expense and indicating for each the applicable vendor or payee, the dollar amount thereof that has become fixed and the estimated dollar amount therefor that has not become fixed, together with invoices or other reasonable supporting documentation therefor, and (v) setting forth the dollar amount of Sales Taxes allocated to Buyer pursuant to Section 8.1(a) , together with reasonable supporting documentation regarding the determination and calculation of such amount. Not later than 12:00 noon, Central Time, on the Business Day immediately prior to the Closing Date, Buyer shall deliver to Sellers a written statement, reasonably satisfactory to Sellers (the “ Buyer Statement ”), (i) setting forth the dollar amount of real and personal property Taxes allocated to Sellers pursuant to Section 8.1(b) , together with reasonable supporting documentation regarding the determination and calculation of such amount, (ii) setting forth the dollar amount of Transfer Taxes allocated to Sellers pursuant to Section 8.1(a) , together with reasonable supporting documentation regarding the determination and calculation of such amount, (iii) setting forth all Restoration Costs relating to any Acquired Assets purchased pursuant to Section 8.10(c) , together with reasonable supporting documentation regarding the determination and calculation of such amounts, and (iv) setting forth any amounts mutually agreed pursuant to Section 8.10(b) . Should Buyer object to any of the amounts or calculations in the Closing Statement, or should Sellers object to any of the amounts or calculations in the Buyer Statement, Buyer and Sellers shall cooperate in a diligent good faith manner to resolve such objections prior to the Closing, and the Closing Statement or Buyer Statement, as applicable, shall be adjusted prior to the Closing to reflect any changes agreed to by Buyer and Sellers prior to the Closing.

(b) At the Closing, Buyer shall pay to the Persons entitled thereto, as shown on the Closing Statement, (i) all Specified Trade Payables that have been fixed in amount and that are due and payable on or before the Closing Date, as shown on the Closing Statement, and (ii) all Allowed Administrative Transaction Expenses that have been fixed in amount, as shown on the Closing Statement (the payments specified in the immediately-preceding clauses (i) and (ii), the “ Closing Direct Payments ”). Each Closing Direct Payment shall be made by wire transfer of immediately available funds to the recipient’s account specified therefor in the Closing Statement.

(c) Prior to the Closing, U.S. Bank National Association, or such other Person as may be mutually agreed upon by Sellers and Buyer (the “ Expense Fund Agent ”), shall establish an expense fund (the “ Expense Fund ”) consisting of the following two segregated accounts: a Trade Payables Account (the “ Trade Payables Account ”) and an Administrative Expenses Account (the “ Administrative Expenses Account ”). The Expense Fund shall be maintained pursuant to an Expense Fund Escrow Agreement substantially in the form of Exhibit J . At the Closing, Buyer shall deposit the following amounts, by wire transfer of immediately available funds, with the Expense Fund Agent for deposit into the following accounts of the Expense Fund, and such amounts shall be deducted from the Cash Consideration payable to Sellers:

(i) into the Trade Payables Account, the sum of (A) the aggregate amount of Specified Trade Payables that have been fixed in amount but that are not due and payable on or before the Closing Date plus (B) the estimated

 

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aggregate amount of all Specified Trade Payables that have not been fixed in amount, in each case as shown on the Closing Statement; and

(ii) into the Administrative Expenses Account, the estimated aggregate amount of all Allowed Administrative Transaction Expenses that have not been fixed in amount, as shown on the Closing Statement.

From time to time after the Closing, (1) Sellers shall draw on the Trade Payables Account solely for the purpose of paying Specified Trade Payables that become fixed in amount and/or become due and payable on or after the Closing Date and (2) Sellers shall draw on the Administrative Expenses Account solely for the purpose of paying Allowed Administrative Transaction Expenses that become fixed in amount on or after the Closing Date. After the payment in full of all amounts to be paid from the Trade Payables Account or the Administrative Expenses Account, Sellers shall be entitled, subject to the approval of the Bankruptcy Court, to cause any funds remaining in such account (together with all interest accrued thereon) to be released from escrow and disbursed to Sellers. To the extent that any amounts in either the Trade Payables Account or Administrative Expenses Account are insufficient to pay any amounts for which such accounts are earmarked, Sellers shall be solely and exclusively responsible for any such deficits or shortfalls.

(d) At the Closing, Buyer shall pay to Sellers in cash by wire transfer of immediately available funds to the account of the Company set forth in the Closing Statement an amount equal to (i) the Estimated Cash Consideration minus (ii) the sum of (A) the Deposit, (B) the aggregate amount of the Closing Direct Payments and (C) the aggregate amount of the deposits made by Buyer at the Closing into the accounts of the Expense Fund pursuant to Section 3.3(c) (such amount to be paid to Sellers, the “ Closing Date Payment ”). Sellers shall be solely responsible for allocating the Closing Date Payment among themselves (and any Affiliates, creditors or other third parties entitled to any portion thereof), and agree that Buyer shall have no responsibility or Liability whatsoever for or with respect to the allocation or distribution of the Closing Date Payment beyond Buyer’s duty to wire the same to the account designated in the Closing Statement.

3.4 Discharge of Assumed Liabilities After Closing .

Buyer shall pay, perform or satisfy the Assumed Liabilities from time to time and as such Assumed Liabilities become due and payable or are required to be performed or satisfied in accordance with their respective terms.

3.5 Inventory Adjustment .

(a) Sellers and/or Sellers’ Representatives shall, commencing on the Closing Date, conduct a physical count of the Inventory as of the Closing in accordance with the methodology prescribed by Schedule 1.1(e) . Sellers shall use commercially reasonable efforts to cause such physical count of the Inventory to be completed not later than the first (1st) Business Day following the Closing Date, and Buyer may have its Representatives present during such physical count of the Inventory. Within ten (10) Business Days after the date of completion of such physical count of the Inventory, Sellers shall deliver to Buyer a written statement (the

 

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“ Seller Inventory Statement ”) setting forth Sellers’ determination, together with supporting data and calculations, of the Inventory Closing Value. Buyer and Parent shall afford Sellers and Sellers’ Representatives such access to the properties, assets and books and records of the Business and of Buyer and its Affiliates as is necessary, in Sellers’ reasonable judgment, in connection with the physical count of the Inventory, preparation of the Seller Inventory Statement pursuant to this Section 3.5(a) and resolution of any dispute hereunder with respect to the Inventory Closing Value.

(b) Unless on or before the third (3rd) Business Day after Buyer’s receipt of the Seller Inventory Statement, Buyer delivers to Sellers notice disputing the Inventory Closing Value set forth in the Seller Inventory Statement and setting forth in reasonable detail Buyer’s determination of the Inventory Closing Value and the basis therefor (such notice, the “ Buyer Objection Notice ”), the Inventory Final Amount shall be the Inventory Closing Value as set forth in the Seller Inventory Statement.

(c) If Buyer timely delivers to Sellers the Buyer Objection Notice, Buyer and Sellers shall, during the period commencing upon Sellers’ receipt of the Buyer Objection Notice and ending at 5:00 p.m., Central Time, on the fifth (5th) Business Day thereafter (such period, the “ Initial Resolution Period ”), work in good faith to resolve any and all disputes with respect to the Inventory Closing Value; provided that items not disputed in the Buyer Objection Notice shall be deemed not to be in dispute at any time during the Initial Resolution Period or thereafter. If all disputes with respect to the Inventory Closing Value are resolved during the Initial Resolution Period, the Inventory Final Amount shall be the Inventory Closing Value as agreed upon by Buyer and Sellers during the Initial Resolution Period.

(d) If, immediately after the Initial Resolution Period, any of the items comprising the Inventory Closing Value remain in dispute, Buyer and Sellers shall promptly engage an independent certified public accounting firm or independent certified appraisal firm (the “ Inventory Arbiter ”) mutually agreed upon by Buyer and Sellers (such agreement not to be unreasonably withheld or delayed by Buyer or Sellers) to decide such items and shall instruct the Inventory Arbiter to render such decision no later than the tenth (10th) Business Day following the date of commencement of such engagement. The Inventory Arbiter shall act as an expert and not as an arbitrator to determine, based solely on the written submissions of Sellers and Buyer, and not by independent investigation, only the specific items under dispute by Sellers, on the one hand, and Buyer, on the other hand. The decision of the Inventory Arbiter shall include a statement of the Inventory Arbiter’s determination of each disputed item and a statement of the Inventory Closing Value reflecting the Inventory Arbiter’s determination of all disputed items, shall be set forth in a written report delivered to Sellers and Buyer and shall, absent manifest error, be conclusive and binding on the Parties. In resolving any disputed item, the Inventory Arbiter shall be bound by the provisions of this Agreement, including Schedule 1.1(e) , and may not assign a value to any item greater than the grea