In re:

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
) Chapter II
)
eTOYS DIRECT 1, LLC, et al.,
1 )
)
)
)
Case No. 08-13412(BLS)
(Jointly Administered)
Debtors.
Re: Docket No. 155
Hearing: February 6, 2009, at 9:00a.m. (prevailing Eastern time)
NOTICE OF FILING OF REVISED ASSET PURCHASE AGREEMENT
BY AND AMONG THE DEBTORS AND POSH VENTURES, LLC
TO: (a) the Office of the United States Trustee; (b) counsel to the Debtors' prepetition and
postpetition lenders; (c) counsel to the Official Committee of Unsecured Creditors;
(d) those persons who have requested notice pursuant to Rule 2002 of the Federal Rules
ofBankruptcy Procedure; (e) counsel to Posh Ventures, LLC.
PLEASE TAKE NOTICE THAT on January 23, 2009, the captioned debtors and debtors
in possession (the "Debtors") filed the Debtors' Motion Pursuant to Sections 105 and 363 ofthe
Bankruptcy Code for Order Approving Selection of Stalking Horse, Break-Up Fee and Expense
Reimbursement, and Related Relief in Connection With Sale of Assets of Debtor PoshTots, Inc
(the "Motion," Docket No. 155). Attached as Exhibit A to the Motion was an Asset Purchase
1
The Debtors in these cases, along with the last four digits of each Debtor's federal tax identification number, if
applicable, are: eToys Direct I, LLC (N/A); The Parent Company (7093); BabyUniverse, Inc. (7990); Dreamtime
Baby, Inc. (8047); eToys Direct, Inc. (7296); PoshTots, Inc. (8660); eToys Direct 2, LLC (N/A); eToys Direct 3,
LLC (N/A); Gift Acquisition, L.L.C. (0297); and My Twinn, Inc. (1842). The address for each of the Debtors is 717
17th Street, Suite 1300, Denver, CO 80202, with the exception ofPoshTots, Inc., the address for which is 5500 Cox
Road, Suite M, Glenn Allen, VA 23060.
68781-001 \DOCS_DE: 144563.1
Agreement (the "AP A") among the Debtors and Posh Ventures, LLC ("Posh Ventures"). You
were previously served with a copy of the Motion and the APA.
PLEASE TAKE FURTHER NOTICE THAT the Official Committee ofUnsecured
Creditors (the "Committee") interposed an objection to the Motion and, specifically, sought
certain revisions to the AP A. The Debtors, the Committee, and Posh Ventures contemplated a
consensual resolution of the objection, and an order approving Posh Ventures as the stalking
horse bidder for the assets described in the APA, authorizing break-up fee and expense
reimbursement, and granting related relief sought in the Motion was entered by the Court on
January 30, 2009.
PLEASE TAKE FURTHER NOTICE THAT attached hereto as Exhibit A is a revised
APA resolving the Committee's objection and agreed to by the Debtors and Posh Ventures .
. -,
Dated: February!/ , 2009
68781-00I\DOCS_DE:I44563.1
PACHULSKI STANG ZIEHL & JONES LLP
~
Jeffrey W. Dulberg (CA BarNo. 181200)
Michael R. Seidl (Bar No. 3889)
919 N. Market Street, 17th Floor
Wilmington, DE 19801
Telephone: 302/652-4100
Facsimile: 302/652-4400
Email: ljones@pszjlaw.com
jdulberg@pszj law.com
mseidl@pszjlaw.com
[Proposed] Counsel for eToys Direct 1, LLC, et al.,
Debtors and Debtors in Possession
2
EXHIBIT A
ASSET PURCHASE AGREEMENT
BYANDAMONG
THE PARENT COMPANY, ETOYS DIRECT, INC., ETOYS DIRECT 1,
LLC, ETOYS DIRECT 2, LLC, ETOYS DIRECT 3, LLC, BABYUNIVERSE,
INC., POSHTOTS, INC., DREAMTIME BABY, INC., MY TWINN, INC.,
AND GIFT ACQUISITION, L.L.C.
AND
POSH VENTURES, LLC
Dated as of February 2, 2009
DOCS_LA: 196006.5
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ........................................................................................................... 1
Section 1.1 Certain Definitions ...................................................................................... 1
Section 1.2 Other Definitional and Interpretive Matters ............................................... 7
ARTICLE II PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES .......... 8
Section 2.1 Purchase and Sale of Assets ........................................................................ 8
Section 2.2 Excluded Assets ........................................................................................ 10
Section 2.3 Assumption of Liabilities .......................................................................... II
Section 2.4 Purchased Assets ....................................................................................... 12
Section 2.5 Further Conveyances and Assumptions .................................................... 12
Section 2.6 Pre- and Post-Closing and Transitional Matters ....................................... 13
ARTICLE III CONSIDERATION ............................................................................................... 13
Section 3.1 Purchase Price and Payment; Assumed Liabilities ................................... 13
ARTICLE IV CLOSING AND TERMINATION ........................................................................ 13
Section 4.1 Closing Date .............................................................................................. 13
Section 4.2 Deliveries by Sellers ................................................................................. 14
Section 4.3 Deliveries by Buyer .................................................................................. 14
Section 4.4 Termination of Agreement ........................................................................ 14
Section 4.5 Procedure Upon Termination .................................................................... 15
Section 4.6 Effect ofTennination ................................................................................ 16
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS ............................... 16
Section 5.1
Section 5.2
Section 5.3
Section 5.4
Section 5.5
Section 5.6
Section 5.7
Section 5.8
Section 5.9
Authorization of Agreement ..................................................................... 16
Title to Purchased Assets .......................................................................... 17
Tangible Personal Property ....................................................................... 17
Intellectual Property .................................................................................. 17
Financial Advisors .................................................................................... 17
Litigation ................................................................................................... 17
Compliance with Laws ............................................................................. 17
Permits ...................................................................................................... 18
Sellers' Representations and Warranties Generally .................................. 18
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER ................................. 18
Section 6.1 Organization and Good Standing .............................................................. 18
Section 6.2 Authorization of .................................................................... 18
Section 6.3 Financial Advisors .................................................................................... 18
Section 6.4 Financial Capability .................................................................................. 18
Section 6.5 Condition of the Business ......................................................................... 19
ARTICLE VII BANKRUPTCY COURT APPROVAL .............................................................. 19
Section 7.1 Approval ofBreak-Up Fee ........................................................................ 19
Section 7.2 Competing Transaction ............................................................................. 19
DOCS_LA:I96006.S
TABLE OF CONTENTS
(Continued)
Page
Section 7.3 Bankruptcy Court Filings .......................................................................... 20
ARTICLE VIII COVENANTS ..................................................................................................... 20
Section 8.1
Section 8.2
Section 8.3
Section 8.4
Section 8.5
Section 8.6
Section 8.7
Section 8.8
Section 8.9
Access to Information ............................................................................... 20
Further Assurances .................................................................................... 20
Confidentiality .......................................................................................... 21
Preservation of Records ............................................................................ 21
Publicity .................................................................................................... 22
Operation of Business ............................................................................... 22
Cure Alnounts ........................................................................................... 23
Section 363(b)(l)(A) ................................................................................. 23
Adequate Assurances Regarding Purchased Contracts ............................. 23
ARTICLE IX COVENANTS .......................................................................... 24
Section 9.1 Storage of Equipment ............................................................................... 24
Section 9.2 Access to Equipment ................................................................................. 25
Section 9.3 Transportation ofEquipm ......................................................................... 25
ARTICLE X EMPLOYEES AND EMPLOYEE BENEFITS ...................................................... 24
Section 10.1 Emplo)'Jllent .............................................................................................. 24
Section 10.2 Employee Benefits .................................................................................... 25
ARTICLE X CONDITIONS TO CLOSING ................................................................................ 25
Section 11.1 Conditions Precedent to Obligations of Buyer ......................................... 25
Section 11.2 Conditions Precedent to Obligations of Sellers ........................................ 26
Section 11.3 Conditions Precedent to Obligations of Buyer and Sellers ....................... 26
Section 11.4 Frustration of Closing Conditions ............................................................. 27
ARTICLE XII NO SURVIVAL ................................................................................................... 27
Section 12.1 No Survival ofRepresentations and Warranties ....................................... 27
ARTICLE XIII TAX MA TIERS ................................................................................................. 27
Section 13 .I Transfer Taxes .......................................................................................... 27
Section 13.2 Prorations .................................................................................................. 27
Section 13.3 Purchase Price Allocation ......................................................................... 27
ARTICLE XIV MISCELLANEOUS ........................................................................................... 28
Section 14.1 Expenses .......................................................................................... ........ 28
Section 14.2 Submission to Jurisdiction; Consent to Service of Process ...................... 28
Section 14.3 Waiver ofRight to Trial by Jury ............................................................... 28
Section 14.4 Entire Agreement; Amendments and Waivers ......................................... 28
Section 14.5 Governing Law ......................................................................................... 29
Section 14.6 Notices ...................................................................................................... 29
Section 14.7 Severability ............................................................................................... 31
Section 14.8 Binding Effect; Assignment ...................................................................... 31
DOCS_LA:196006.S ii
TABLE OF CONTENTS
(Continued)
Page
Section 14.9 Counterparts .............................................................................................. 31
OOCS_LA:196006.S iii
Exhibit A
Schedule l.l(a)
Schedule 1.1 (b)
Schedule l.l{c)
Schedule l.l(d)
Schedule 2.1(e)
Schedule 2.2
Schedule 2.3(a)
Schedule 2.3(b)
Schedule 5.2
Schedule 5.3(a)
Schedule 5.3(b)
Schedule 5.5
Schedule 5.6
Schedule 5.7
Schedule 5.8
Schedule 8.6(i)
Schedule lO.l(a)
Schedule 1 0.2(a)
DOCS_LA:I96006.S
EXHIBITS
Bill of Sale and Assigmnent
SCHEDULES
Contracts
Intellectual Property
Purchased Contracts
Purchased Intellectual Property
Furniture and Equipment
Excluded Assets
Liabilities
Cure Amounts
Title to Purchased Assets
Tangible Personal Property
Defaults by Lessors on Tangible Personal Property
Financial Advisors
Litigation
Compliance with Laws
Permits
Affiliate Transactions
Employees
Benefits
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of February 2, 2009 (this
"Agreement"), is entered into by and among THE PARENT COMPANY, a Colorado
corporation ("Parent"), ETOYS DIRECT, INC., a Colorado corporation ("eToys Direct"),
ETOYS DIRECT 1, LLC, a Delaware limited liability company ("eToys 1 "), ETOYS DIRECT
2, LLC, a Delaware limited liability company ("eToys 2"), ETOYS DIRECT 3, LLC, a
Delaware limited liability company ("eToys 3"), BABYUNNERSE, INC., a Colorado
corporation ("BabyUniverse"), POSHTOTS, INC., a Colorado corporation ("PoshTots"),
DREAMTIME BABY, INC., a Colorado corporation ("Dreamtime"), MY TWINN, INC., a
Colorado corporation ("My Twinn"), GIFT ACQUISITION, L.L.C., a Delaware limited liability
company ("Gift", and collectively with Parent, eToys Direct, eToys 1, eToys 2, and eToys 3,
BabyUniverse, Posh Tots, Dreamtime, and My Twinn, "Sellers"), and POSH VENTURES, LLC,
a Virginia limited liability company ("Buyer'').
WITNESSETH:
WHEREAS, on December 28, 2008 (the "Petition Date"), Sellers filed voluntary
petitions for reorganization relief (the "Bankruptcy Cases") pursuant to chapter 11 of title 11 of
the United States Code, 11 U.S.C. 101 et seq. (the "Bankruptcy Code"), in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court");
WHEREAS, Sellers presently conduct the Business;
WHEREAS, Sellers desire to sell, transfer and assign to Buyer, and Buyer desires to
acquire and assume from Sellers, pursuant to Sections 363 and 365 of the Bankruptcy Code, the
Purchased Assets and Assumed Liabilities as more specifically provided herein; and
WHEREAS, certain terms used in this Agreement are defined in Section 1.1.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement, the following terms
shall have the meanings specified in this Section 1.1:
"Affiliate" means, with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control
with, such Person, and the term "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether through ownership
of voting securities, by contract or otherwise. Notwithstanding the foregoing, and
notwithstanding that D.E. Shaw & Co. might otherwise be considered an "affiliate" of Sellers as
such term is defined in the Bankruptcy Code, neither D.E. Shaw & Co. nor its affiliates (other
DOCS_LA:I96006.5
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than Sellers themselves) shall be deemed to be an "Affiliate" of Sellers for purposes of this
Agreement.
"Assmned Liabilities" shall have the meaning set forth in Section 2.3.
"Bankruptcy Cases" shall have the meaning set forth in the Recitals.
"Bankruptcy Code" shall have the meaning set forth in the Recitals.
"Bankruptcy Court" shall have the meaning set forth in the Recitals.
"Bidding Procedures Order" means that certain order of the Bankruptcy Court, entitled
"Order (A) Approving Sale Procedures and Bid Protections, Including Break-Up Fee(s), In
Connection With Sale Of Substantially All Assets; (B) Scheduling An Auction For And Hearing
To Approve One Or More Sales; (C) Approving Notice Of Respective Date, Time And Place For
Auction And For Hearing On Approval OfSale(s)," entered on January 16,2009.
"Break-Up Fee" shall have the meaning set forth in Section 7 .1.
"Business" means the business of PoshTots, including the delivery of Products, content
and new media resources to expectant parents and families.
"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" shall have the meaning set forth in the Recitals.
"Buyer Documents" shall have the meaning set forth in Section 6.1.
"Buyer Plans" shall have the meaning set forth in Section 9.2(a).
"Cash Payment" shall have the meaning set forth in Section 3 .1.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Bid" shall have the meaning set forth in Section 7.2(a).
"Contracf' means any oral or written contract, indenture, note, bond, lease, real property
l ~ a s ~ ur other agreement (including, without limitation, employment and consulting agreements
and the Personal Property Leases) to which any Seller is a party relating to the Business, as set
forth on Schedule l.l(a).
"Deposit" shall have the meaning set forth in Section 3 .1.
DOCS_LA:I96006.S 2
"Documents" means all files, documents, instruments, papers, books, reports, records,
. tapes, microfilms, photographs, letters, budgets, forecasts, ledgers, journals, title policies,
customer lists, regulatory filings, operating data and plans, technical documentation (design
specifications, functional requirements, operating instructions, logic manuals, flow charts, etc.),
user documentation (installation guides, user manuals, training materials, release notes, working
papers, etc.), marketing documentation (sales brochures, flyers, pamphlets, web pages, etc.), and
other similar materials related primarily to the Business and the Purchased Assets in each case
whether or not in electronic form.
"Employee Claims" means any claim, demand, action, cause of action, damage, loss,
cost, liability or expense, including legal costs, made or brought by any Employee, including, but
not limited to, any Employment Claim made pursuant to any applicable Laws relating to
employment standards, occupational health and safety, labor relations, workers compensation,
pay equity, employment equity, the Americans with Disabilities Act, the Civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act of 1967, the Older Workers
Benefit Protection Act, the Family and Medical Leave Act or the Fair Labor Standards Act or
any other federal, state or local, statutory or decisional Law regarding employment
discrimination.
"Employee Obligations" means all wages, bonuses, vacation pay, sick time, pension
payments, overtime pay, change of control payments, severance pay and any other termination or
severance obligations and any other compensation or obligation which may be due by statute,
contract or Law relating to the employment of the Employees.
"Employees" means all individuals, as of the date hereof, whether or not actively at work
as of the date hereof, who are employed by Sellers in connection with the Business, together with
individuals who are hired in respect of the Business after the date hereof and prior to the Closing.
"Excluded Assets" shall have the meaning set forth in Section 2.2.
"Excluded Contracts" means all Contracts other than the Purchased Contracts.
"Excluded Liabilities" shall have the meaning set forth in Section 2.3.
"Expense Reimbursement" shall have the meaning set forth in Section 7.1.
"Final Order" means an Order, judgment, or other decree of the Bankruptcy Court that
has not been vacated, reversed, modified, amended, or stayed, and for which the time to further
appeal or seek review or rehearing bas expired; provided, however, that any such Order,
judgment or other decree of the Bankruptcy Court shall be deemed to be a Final Order upon its
entry (without reference to the expiration of the time for appeal or review) if no objection to such
Order, judgment or other decree is received by the Bankruptcy Court prior to its entry by the
Bankruptcy Court.
"Furniture and Equipment" means all furniture, fixtures, furnishings, equipment,
vehicles, leasehold improvements, and other tangible personal property owned or used by Sellers
in the conduct of the Business, including all such artwork, desks, chairs, tables, computer and
computer-related hardware (including, computers, file servers, facsimile servers, scanners, color
DOCS_!.A:I96006.S 3
printers, laser printers and networks), copiers, telephone lines and numbers, telecopy machines
and other telecommunication equipment, cubicles and miscellaneous office furnishings and
supplies.
"GAAP" means generally accepted accounting principles in the United States.
"Governmental Body'' means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether foreign, federal, state, or local, or any agency,
instrumentality or authority thereof, or any court or arbitrator (public or private).
"Indebtedness" of any Person means, without duplication, (i) the principal and interest of,
and premium (if any) in respect of, (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the
payment ofwhich such Person is responsible or liable; (ii) all obligations of such Person issued
or assumed as the deferred purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement (but excluding
trade accounts payable and other accrued liabilities arising in the Ordinary Course of Business);
(iii) all obligations of such Person under leases required to be capitalized in accordance with
GAAP; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction; (v) all obligations of the type referred to
in clauses (i) through (iv) of other Persons for the payment of which such Person is responsible
or liable, directly or indirectly, as obligor, guarantor or otherwise, including guarantees of such
obligations; and (vi) all obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person).
"Initial Minimum Overbid" means Five Hundred Sixty Thousand Dollars ($560,000).
"Intellectual Property'' means all inteJlectual property rights used or useful in the conduct
of the Business by Sellers, including (i) patents, patent applications and inventions,
(ii) trademarks, service marks, trade names, trade dress and domain names, together with the
goodwill associated therewith, (iii) copyrights, including copyrights in computer software,
(iv) confidential and proprietary information, including trade secrets and know-how (''Trade
Secrets"), (v) licenses relating to any of the foregoing and (vi) registrations and applications for
registration ofthe foregoing, as set forth on Schedule l.l(b).
"Law" means any federal, state, local or foreign law, statute, code, ordinance, rule or
regulation.
"Legal Proceeding" means any judicial, administrative or arbitral actions, suits,
proceedings (public or private) or claims or any proceedings by or before a Governmental Body.
"Liability'' means any debt, liability or obligation (whether direct or indirect, known or
unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to
become due), and including all costs and expenses relating thereto.
DOCS_LA:I96006.5 4
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"Lien" means any lien, encumbrance, pledge, mortgage, deed of trust, security interest,
claim, lease, option, right of first refusal, easement, servitude, proxy, voting trust or agreement,
or transfer restriction under any shareholder or similar agreement or encumbrance.
"Material Adverse Effect" means (i) a material adverse effect on the business or assets of
Sellers or the Business (except for the Bankruptcy Cases), or (ii) a material adverse effect on the
ability of Sellers to consununate the transactions contemplated by this Agreement or perform
their respective obligations under this Agreement, other than the effect of any change resulting
from any action taken by Buyer or its Affiliates with respect to the transactions contemplated
hereby or with respect to Sellers, or any effect resulting from the filing of the Bankruptcy Case
(including the failure or delay of vendors to deliver goods without a reasonable assurance of
payment therefor), or from Orders of the Bankruptcy Court or other courts of competent
jurisdiction, and reasonably anticipated effects thereof.
"Order'' means any order, injunction, judgment, decree, ruling, writ, assessment or
arbitration award of a Governmental Body.
"Ordinarv Course ofBusiness" means the ordinary and usual course of normal day-to-
day operations of the Business consistent with the past practice of the Business through the date
hereof, subject to any duties and restrictions imposed on Sellers under the Bankruptcy Code.
"Overbid Protection" shall have the meaning set forth in Section 7.1.
"Parties" means Sellers and Buyer.
"Permits" means any approvals, authorizations, consents, licenses, permits or
certifications of a Governmental Body.
"Permitted Exceptions" means (i) all defects, exceptions, restrictions, easements, rights of
way, encumbrances and Liens reflected in policies oftitle insurance which have been made
available to or are obtained by Buyer; (ii) statutory Liens for current Taxes, assessments or other
govennnental charges not yet delinquent or the amount or validity of which is being contested in
good faith by appropriate proceedings provided an appropriate reserve is established therefor;
(iii) mechanics', carriers', workers', repairers' and similar Liens arising or incurred in the
Ordinary Course of Business; (iv) zoning, entitlement and other land use and environmental
regulations by any Governmental Body provided that such regulations have not been violated;
(v) title of a lessor under a capital or operating lease, (vi) the Assumed Liabilities as pertain to
particular Purchased Assets, and (vii) such other imperfections in title which would not
materially interfere with the use of the Purchased Assets.
"Person" means any individual, corporation, partnership, firm, joint venture, association,
joint-stock company, trust, unincorporated organization, Governmental Body or other entity.
"Personal Property Leases" shall have the meaning set forth in Section 5.3.
"Petition Date" shall have the meaning set forth in the Recitals.
DOCS_LA:I96006.5 5
"Products" means any and all products developed, manufactured, procured, marketed or
sold by Sellers, whether work in progress or in final form, in connection with the business
conducted by Posh Tots.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Purchased Contracts" means the Contracts to which Sellers are a party relating to the
Purchased Assets and the Business, which are set forth on Schedule l.l(c).
''Purchased Intellectual Property" means (i) all Intellectual Property and (ii) all Software
and Teclm.ology set forth on Schedule l.l(d).
"Sale Motion" means the motion or motions of Sellers filed with the Bankruptcy Court
seeking approval and entry of the Sale Order.
"Sale Order" shall be an Order of the Bankruptcy Court in form and substance acceptable
to Buyer and Sellers approving this Agreement and all of the terms and conditions hereof,
approving the sale and assignment to Buyer of all of the Purchased Assets (assuming Buyer is
the winning bidder at the auction contemplated hereby); approving the Break-Up Fee; approving
the Expense Reimbursement; approving the Overbid Protection; and approving and authorizing
Sellers to consummate the transactions contemplated hereby. Without limiting the generality of
the foregoing, such order shall find and provide, among other things, that (i) the Purchased
Assets sold to Buyer pursuant to this Agreement shall be transferred to Buyer free and clear of
all Liens (other than Liens specifically assumed or created by Buyer and Permitted Exceptions},
claims (other than Assumed Liabilities), encumbrances and interests (including Liens, claims,
encumbrances and interests of any Governmental Body}, such Liens, claims, encumbrances and
interests to attach to the proceeds of sale of the Purchased Assets; (ii) Buyer has acted in "good
faith" within the meaning of Section 363(m) of the Bankruptcy Code; (iii) this Agreement was
negotiated, proposed and entered into by the Parties without collusion, in good faith and from
arm's length bargaining positions; (iv) the Bankruptcy Court shall retain jurisdiction to resolve
any controversy or claim arising out of or relating to this Agreement, or the breach hereof as
provided in Section 13.2 hereof; and (v) this Agreement and the transactions contemplated
hereby are not subject to rejection or avoidance by any chapter 7 or chapter 11 trustee of Sellers.
"Sellers" shall have the meaning set forth in the Recitals.
"Sellers Documents" shall have the meaning set forth in Section 5.1.
"Software" means, except to the extent generally available for purchase from third
Persons, any and all (i) computer programs, including any and all software implementations of
algorithms, models and methodologies, whether in source code or object code, (ii) databases and
compilations, including any and all data and collections of data, whether machine readable or
otherwise, (iii) descriptions, flow-charts a."ld other work product used to design, plan, organize
and develop any of the foregoing, screens, user interfaces, report formats, firmware,
development tools, templates, menus, buttons and icons and (iv) all documentation including
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user manuals and other training documentation related to any of the foregoing, in each case,
relating to the Business.
"Stalking Horse Motion" means the motion of Sellers filed with the Bankruptcy Court
seeking approval and entry of the Stalking Horse Order.
"Stalking Horse Order'' means an Order of the Bankruptcy Court in torm and substance
acceptable to Buyer and Sellers approving the Break-Up Fee; approving the Expense
Reimbursement; and approving the Initial Minimum Overbid.
"Tax Return" means all returns, declarations, reports, estimates, information returns and
statements required to be filed in respect of any Taxes.
"Taxes" means (i) all federal, state, local or foreign taxes, charges or other assessments,
including, without limitation, alJ net income, gross receipts, capital, sales, use, ad valorem, value
added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, and (ii) all interest, penalties, fines, additions to tax or additional amounts
imposed by any taxing authority in connection with any item described in clause (i).
"Technology" means, collectively, all designs, formulae, algorithms, procedures,
methods, techniques, ideas, know-how, research and development, technical data, programs,
subroutines, tools, materials, specifications, processes, inventions (whether patentable or
unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works
of authorship and other similar materials, and all recordings, graphs, drawings, reports, analyses,
and other writings, and other tangible embodiments of the foregoing, in any form whether or not
specifically listed herein, and all related technology, that are used in, incorporated in, embodied
in, displayed by or relate to, or are used or useful in the Business or in the design, development,
reproduction, maintenance or modification of, any of the Products.
"Termination Date" shall have the meaning set forth in Section 4.4(a).
''Trade Secrets" shall have the meaning set forth in Section 1.1 (in the definition of
Intellectual Property).
"Transfer Taxes" shall have the meaning set forth in Section 12.1.
''Transferred Employees" shall have the meaning set forth in Section 10.1 (a).
"WARN" means the Worker Adjustment and Retraining Notification Act of 1988, as
amended.
Section 1.2 Other Definitional and Interpretive Matters.
(a) Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:
DOCS_LA:J96006.5 7
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 non-Business Day, the period in question shall end on the next succeeding
Business Day.
Dollars. Any reference in this Agreement to$ shall mean U.S. dollars.
Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement. All Exhibits and
Schedules 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 matter or item disclosed on one Schedule shall not
be deemed to have been disclosed on any other Schedule. 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 shall include all
genders, and words imparting the singular number only shall include the plural and vice versa.
Headings. The provision of a Table of Contents, the division ofthis 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 construing or interpreting this Agreement.
All references in this Agreement to any "Section" are to the corresponding Section of this
Agreement unless otherwise specified.
Herein. The words such as ''herein," ''hereinafter," "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) The Parties hereto have participated jointly in the negotiation and drafting
of this Agreement and, in the event an ambiguity or question ofintent or interpretation arises,
this Agreement shall be construed as jointly drafted by the Parties hereto 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.
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
Section 2.1 Purchase and Sale of Assets. On the terms and subject to the conditions set
forth in fro.is Agreement, at the Closing Buyer shall purchase, acquire and accept from Sellers,
and Sellers shall sell, transfer, assign, convey and deliver to Buyer, all of Sellers' right, title and
interest in, to and under the Purchased Assets. "Purchased Assets" shall mean all of the assets of
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Sellers used or held for use in connection with the Business as of the Closing (but excluding
Excluded Assets), including, without limitation, the following:
(a) all inventory, related to or used in connection with the Business, located at
5500 Cox Road, Suite M, Glen Allen, Virginia 23060;
(b) all deposits (including, with respect to Purchased Assets, customer
deposits and security deposits for rent, electricity, telephone or otherwise) and other prepaid
charges and expenses of Sellers as they relate to Purchased Assets; and excluding any deposits or
prepaid charges and expenses paid exclusively in connection with or relating exclusively to any
Excluded Assets;
(c) all rights to payment and obligations related to any customer order or
purchase where the customer's credit card merchant has authorized current or future payment
and the goods subject to such customer order or purchase are shipped on the Closing Date or
thereafter;
(d) the Furniture and Equipment (excluding any Furniture and Equipment
held by any Seller pursuant to a lease, rental agreement, contract or similar arrangement where
Buyer does not assume the underlying lease, rental agreement, contract or similar arrangement at
Closing) used in connection with the Business and located at 5500 Cox Road, Suite M, Glen
Allen, Virginia 23060, including but not limited to the Furniture and Equipment set forth on
SchedUle 2.1(e), and the servers and related hardware located in Denver, Colorado and set forth
on Schedule 2.1(e);
(e) all Purchased Intellectual Property;
(f) all Purchased Contracts;
(g) all Documents that are used in, held for use in or intended to be used in, or
that arise out of, the Business, including Documents relating to Products, services, marketing,
advertising, promotional materials, Purchased Intellectual Property, personnel files for
Transferred Employees and all files, customer files and documents (including credit
information), supplier lists, records, literature and correspondence, whether or not physically
located on any of the premises referred to in clause (d) above, but excluding (i) personnel files
for Employees of Sellers who are not Transferred Employees, (ii) such files as may be required
under applicable Law regarding privacy, and (iii) any Documents exclusively related to any
Excluded Assets;
(h) all Permits granted to, held or used by Sellers in the conduct of the
Business necessary to conduct the Business after Closing, to the extent transferable;
(i) all supplies owned by Sellers and used in connection with the Business;
G) all rights ofSellers under or pursuant to all warranties, representations,
indemnities and guarantees made by suppliers, manufacturers and contractors to the extent
relating to Products sold, or services provided, to Sellers affecting any of the Purchased Assets
other than any warranties, representations and guarantees pertaining to any Excluded Assets;
DOCS_LA: 196006.5 9
(k) subject to the provisions of Section 363(b XI )(A) of the Bankruptcy Code,
all goodwill and other intangible assets associated with the Business, including customer and
supplier lists and the goodwill associated with the Purchased Intellectual Property owned by
Sellers; and
(I) all of Sellers' rights to rebates and discounts payable by manufacturers,
vendors, suppliers or others in connection with the Purchased Assets.
Section 2.2 Excluded Assets. Nothing herein contained shall be deemed to sell,
transfer, assign or convey the Excluded Assets to Buyer, and Sellers shall retain all right, title
and interest to, in and under the Excluded Assets. "Excluded Assets" shall mean all assets,
properties, interests and rights of Sellers other than the Purchased Assets, including without
limitation each of the following assets:
(a) all cash, cash equivalents, bank deposits or similar cash items of Sellers;
(b) the Cash Payment;
(c) all of Sellers' deposits or prepaid charges and expenses paid exclusively in
connection with or relating exclusively to any Excluded Assets;
(d) any owned or leased real property interest pertaining to the Business,
including, but not limited to those leases, and the rights and obligations thereunder, listed on
Schedule 2.2;
(e) all Excluded Contracts;
(f) any accounts receivable and proceeds arising out of or exclusively in
connection with any Excluded Contract or Excluded Asset (for purposes of clarity and the
avoidance of doubt, any right to payment and obligations related to any customer order or
purchase where the customer's credit card merchant has authorized current or future payments
and the goods subject to such customer order or purchase are shipped on the Closing Date or
thereafter, is not an Excluded Asset); and all of Sellers' rights under this Agreement and/or other
documents and agreements executed in connection with the transactions provided for herein;
(g) all intercompany obligations, liabilities and Indebtedness, including any
note Indebtedness, owed to or by Sellers to or by any Affiliates of Sellers;
(h) any Inte11ectual Property rights of Sellers other than the Purchased
Intellectual Property;
(i) any (i) confidential personnel and medical records pertaining to any
Employee who is not a Transferred Employee; (ii) other books and records that Sellers is
required by Law to retain or that Sellers detennine are necessary or advisable to retain including,
without Jimitation, Tax Returns, financial statements, and corporate or other entity filings;
provided, however, that Buyer shall have, to the extent allowed by applicable Law, the right to
make copies of any portions of such retained books and records that relate to the Business or any
of the Purchased Assets; (iii) minute books, stock or membership interest records and corporate
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seals; and (iv) documents relating to proposals to acquire the Business by Persons other than
Buyer;
G) any claim, right or interest of Sellers in or to any refund, rebate, abatement
or other recovery for Taxes of Sellers, together with any interest due thereon or penalty rebate
arising therefrom, and all Tax credits and other Tax attributes of Sellers;
(k) any rights, claims or causes of action of Sellers against third parties
relating to assets, properties, business or operations of Sellers arising out of events occurring on
or prior to the Closing Date and causes of action under Chapter 5 of Title 11 of the United States
Code, and proceeds deriving therefrom;
(1) any stock or other equity interests in Sellers or any subsidiaries of Sellers;
and
(m) all benefit plans;
(n) the assets set forth on Schedule 2.2;
( o) all insurance policies or rights to proceeds thereof relating to the
Purchased Assets, Excluded Assets or Excluded Contracts;
(p) all rights of Sellers under non-disclosure or confidentiality, non-compete,
or non-solicitation agreements with employees and agents of Sellers or with third parties to the
extent relating to the Business or the Purchased Assets; and
( q) all intercompany receivables.
Section 2.3 Assumption of Liabilities. On and subject to the terms and conditions of
this Agreement, Buyer shall assume and become responsible for all of the Assumed Liabilities at
the Closing. Buyer will not assume or have any responsibility, however, with respect to any
other obligation or liability of Sellers not included within the definition of Assumed Liabilities,
including but not limited to: (i) Taxes related to the Business or the Purchased Assets for all Tax
periods (or portions thereof) ending on or prior to the Closing; (ii) any costs or expenses incurred
in connection with, or related to, the administration of the Bankruptcy Case, including, without
limitation, any accrued professional fees and expenses of attorneys, accountants, financial
advisors and other professional advisors related to the Bankruptcy Case; (iii) liabilities to the
extent relating to the Excluded Assets, jncluding Liabilities relating to Excluded Contracts;
(iv) liabilities and obligations of Sellers under this Agreement; (v) all liabilities and obligations
arising under any Purchased Contract (and all liabilities for any breach, act or omission under
any Purchased Contract) arising prior to the Closing; subject to Buyer's obligation to pay cure
costs as provided in subsection (b) below; (vi) all intercompany obligations, liabilities and
Indebtedness, including any note Indebtedness, owed by Sellers to any Affiliates of Sellers, and
all intercompany rights to payments from any Affiliates of Sellers; (vii) any Employee
Obligations to any Employee who is not a Transferred Employee; (viii) any Employee Claim of
any Employee who is not a Transferred Employee or any Employee Claim of any Transferred
Employee arising from the period prior to Closing, in each case other than Employee Claims
based on WARN relating to the transactions contemplated by this Agreement; and (ix) all other
DOCS_LA:196006.5 11
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liabilities and obligations for which Buyer does not expressly assume any liability (collectively,
the "Excluded Liabilities"). Buyer's assumption of the Assumed Liabilities shall in no way
expand the rights or remedies of third parties against Buyer as compared to the rights and
remedies which such parties would have had against Sellers had this Agreement not been
consummated. From and after the Closing Date, Buyer shall pay, perform and discharge, as and
when due or as may otherwise be agreed between Buyer and the obligee, all of the Assumed
Liabilities. The "Assumed Liabilities" are specifically limited to the following:
(a) all Liabilities of Sellers set forth on Schedule 2.3(a);
(b) all Liabilities under the Purchased Contracts arising after the Closing,
together with the "cure amounts" associated therewith, estimates of which cure amounts are set
forth on Schedule 2.3(b);
(c) all Liabilities arising from the sale of Products after the Closing pursuant
to product warranties, product returns and rebates;
(d) all Liabilities with respect to the Business, the Purchased Assets or the
Transferred Employees arising after the Closing;
(e) all Liabilities relating to amounts required to be paid by Buyer hereunder;
(f) to the extent arising with respect to events occurring after the Closing
Date, all Employee Obligations to the Transferred Employees and any Employee Claims of any
Transferred Employee; and
(g) any WARN Liabilities related to the transactions contemplated by this
Agreement, but excluding any such Liabilities arising from any actions of the Sellers or their
Affiliates.
Section 2.4 Purchased Assets. At Closing, and pursuant to Section 365 of the
Bankruptcy Code, Sellers shall assume and assign to Buyer and Buyer shall assume from Sellers,
the Purchased Assets and Assumed Liabilities. The cure amounts, as determined by the
Bankruptcy Court, if any, necessary to cure all defaults, if any, and to pay all actual or pecuniary
losses that have resulted from such defaults under the Purchased Contracts and/or Personal
Property Leases assumed at Closing, shall be paid by Buyer on or before Closing, and Sellers
shall have no liability therefor.
Section 2.5 Further Conveyances and Assumptions. From time to time following the
Closing, Sellers and Buyer shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions, releases and
acquaintances and such other instruments, and shall take such further actions, as may be
reasonably necessary or appropriate to assure fully to Buyer and its respective successors or
assigns, all of the properties, rights, titles, interests, estates, remedies, powers and privileges
intended to be conveyed to Buyer under this Agreement and the Sellers Documents and to assure
fully to Sellers and their respective Affiliates and their respective successors and assigns, the
assumption of the liabilities and obligations intended to be assumed by Buyer under this
OOCS_LA:l96006.S 12
Agreement and the Sellers Documents, and to otherwise make effective the transactions
contemplated hereby and thereby.
Section 2.6 Pre- and Post-Closing and Transitional Matters.
(a) From and after Closing, Sellers shall retain full right and authority to use,
enforce, pursue remedies and take actions with respect to any of the Excluded Assets.
(b) Buyer will retain and make available to Sellers, for a period of three (3)
years following the Closing Date, the Documents delivered by Sellers to Buyer, if reasonably
needed by Sellers for liquidation, winding up, tax reporting or other proper purposes; provided
that Sellers will use reasonable efforts to retain copies of Documents and the Parties otherwise
will reasonably cooperate to minimize inconvenience to Buyer.
(c) From and after Closing, Buyer will be solely responsible for compliance
with the requirements of COBRA (if and as applicable), with respect to Transferred Employees.
ARTICLE III
CONSIDERATION
Section 3.1 Purchase Price and Payment; Assumed Liabilities. In consideration ofthe
transfer of the Purchased Assets to Buyer and the other undertakings set forth herein, Buyer will
pay to Sellers Five Hundred Thousand Dollars ($500,000), (the "Cash Payment"). On the date
hereof, Buyer shall wire Fifty Thousand Dollars ($50,000) (the "Dwosit") into a client trust
account maintained by Pachulski Stang Ziehl & Jones LLP. At Closing, Buyer will pay Sellers,
by wire transfer of immediately available funds to an account designated by Sellers, an amount
equal to the Cash Payment, less the Deposit. As additional consideration for the transfer of the
Purchased Assets and the undertakings set forth herein, at Closing Buyer will assume the
Assumed Liabilities. The Cash Payment plus all amounts owed in respect of the Assumed
Liabilities is referred to in this Agreement as the "Purchase Price." The Purchase Price will be
paid to Seller as provided hereunder, without offset or reduction.
ARTICLE IV
CLOSING AND TERMINATION
Section 4.1 Closing Date. Subject to the satisfaction of the conditions set forth in
Section 11.1, Section 11.2 and Section 11.3 hereof(or the waiver thereofby the Party entitled to
waive that condition), the closing of the purchase and sale of the Purchased Assets and the
assumption of the Assumed Liabilities provided for in Article II herecif (the "Closing") shall take
place at the Wilmington, Delaware offices ofPachulski Stang Ziehl & Jones LLP (or at such
other place as the Parties may designate in writing) as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article X (other than conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such
conditions) and no later than a date that is two (2) Business Days after the Sale Order becomes a
Final Order, unless another time or date, or both, are agreed to in writing by the Parties hereto.
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The date on which the Closing shall be held is referred to in this Agreement as the "Closing
Date," and the Closing shall be deemed effective at the close of business on the Closing Date.
Section 4.2 Deliveries by Sellers. At the Closing, Sellers shall deliver to Buyer:
(a) a duly executed bill of sale and assignment in the form ofExhibit A
hereto;
(b) duly executed assignments of the U.S. trademark registrations and
applications included in the Purchased Intellectual Property, in a fonn suitable for recording in
the U.S. trademark office, and general assignments of all other Purchased Intellectual Property;
(c) the officer's certificate required to be delivered pursuant to Section ll.l(a)
and Section 11.1 (b);
(d) a certified copy of the Sale Order; and
(e) all other instruments of conveyance and transfer, in fonn and substance
reasonably acceptable to Buyer, as may be necessary to convey the Purchased Assets to Buyer.
Section 4.3 Deliveries by Buyer. At the Closing, Buyer shall deliver to Sellers:
(a) a duly executed bill of sale and assignment in the form ofExhibit A
hereto;
(b) the Cash Payment, less the Deposit, in immediately available funds, as set
forth in Section 3 .1 hereof;
(c) duly executed assignments of the U.S. trademark registrations and
applications included in the Purchased Intellectual Property, in a form suitable for recording in
the U.S. trademark office, and general assignments of all other Purchased Intellectual Property;
(d) the officer's certificate required to be delivered pursuant to Section 11.2(a)
and Section 11.2(b) hereof;
(e) a copy of resolutions of the managers of Buyer, authorizing the execution,
delivery and performance hereofby Buyer, certified by an authorized officer of Buyer and dated
as of the Closing Date;
(f) a copy of a certificate of the Secretary of the Commonwealth of Virginia
dated no earlier than ten (1 0) days before the Closing, certifying that Buyer is in good standing
under the Laws of the Commonwealth ofVirginia; and
(g) all other instruments of conveyance and transfer, in form and substance
reasonably acceptable to Sellers, as may be necessary to convey the Purchased Assets to Buyer.
Section 4.4 Termination of Agreement. This Agreement may be terminated prior to
the Closing as follows:
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(a) by mutual written consent of Sellers and Buyer or solely by the Buyer in
the event the Bankruptcy Court has not entered the Stalking Horse Order on or before January
30, 2009;
(b) by Sellers or Buyer if there shall be in effect a final nonappealable Order
of a Governmental Body of competent jurisdiction restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated hereby; it being agreed that the Parties hereto
shall promptly appeal any adverse determination which is not nonappealable (and pursue such
appeal with reasonable diligence);
(c) with no further action by either Party, if the Bankruptcy Court shall enter
an Order approving a Competing Bid and the transaction contemplated by such Competing Bid is
thereafter consummated;
(d) by Buyer, if the Closing shall not have occurred by the close ofbusiness
on the date which is five (5) Business Days after the Sale Order becomes a Final Order (the
"Termination Date"); provided, however, that if the Closing shall not have occurred on or before
the Termination Date due to a material breach of any representations, warranties, covenants or
agreements contained in this Agreement by Buyer, then Buyer may not terminate this Agreement
pursuant to this Section 4.4(a);
(e) by Buyer, if any ofthe conditions to the obligations ofBuyer set forth in
Section 11.1 and Section 11.3 shall have become incapable of fulfillment other than as a result of
a breach by Buyer of any covenant or agreement contained in this Agreement, and such
condition is not waived by Buyer;
(f) by Buyer, if there shall be a breach by Sellers of any representation or
warranty, or any covenant or agreement contained in this Agreement which would result in a
failure of a condition set forth in Section 11.1 or Section 11.3 and which breach cannot be cured
or has not been cured by the earlier of (i) 10 (ten) Business Days after the giving of written
notice by Buyer to Sellers of such breach and (ii) the Termination Date;
(g) by Sellers, if any condition to the obligations of Sellers set forth in
Section 11.2 or Section 11.3 shall have become incapable of fulfillment other than as a result of
a breach by Sellers of any covenant or agreement contained in this Agreement, and such
condition is not waived by Sellers; or
(h) by Sellers, if there shall be a breach by Buyer of any representation or
warranty, or any covenant or agreement contained in this Agreement which would result in a
failure of a condition set forth in Section 11.2 or Section 11.3 and which breach cannot be cured
or has not been cured by the earlier of (i) 10 (ten) Business Days after the giving of written
notice by Sellers to Buyer of such breach and (ii) the Termination Date.
Section 4.5 Procedure Upon Termination. In the event oftennination and
abandonment by Buyer or Sellers, or both such Parties, pursuant to Section 4.4 hereof, written
notice thereof shall forthwith be given to the other Party or Parties, and this Agreement shall
terminate, and the purchase of the Purchased Assets hereunder shall be abandoned, without
further action by Buyer or Sellers. If this Agreement is terminated as provided herein each Party
DOCS_LA:l96006.S 15
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shall redeliver all documents, work papers and other material of any other Party relating to the
transactions contemplated hereby, Whether so obtained before or after the execution hereof, to
the Party furnishing the same. If this Agreement is terminated pursuant to Sections 4.4(a), .(hl,
.ill, the Deposit shall be returned to Buyer, and the Parties shall have no further
obligations to one another except for any obligations that, by their terms, survive the termination
of this Agreement. If this Agreement is terminated pursuant to Sections 4.4(g), with respect to
Section 11.2. but not Section 11.3, or Section 4.4@, the Deposit shall be retained by Sellers,
without prejudice to any other remedies that may be available to Sellers in law or in equity. If
this Agreement is terminated pursuant to Section 4.4(c), Sellers shall also pay the Break-Up Fee
and the Expense Reimbursement to Buyer promptly upon the effective date of termination of this
Agreement in accordance with the provisions thereof, and the Parties shall have no further
obligations to one another except for any obligations that, by their terms, survive the termination
of this Agreement.
Section 4.6 Effect of Termination.
(a) In the event that this Agreement is validly terminated in accordance with
Section 4.4, this Agreement shall terminate and each of the Parties shall be relieved of its
respective duties and obligations arising under this Agreement after the date of such termination
and such termination shall be without liability to Buyer or Sellers; provided, however, that the
obligations of the Parties set forth in Section 4.5, Section 7.1 and Article XIII hereof shall
survive any such termination and shall be enforceable hereunder.
(b) Except for fraud or willful misconduct by Sellers, Buyer acknowledges
and agrees that the return of the Deposit, if applicable pursuant to the provisions of Section 4.5,
and the payment of the Break-Up Fee and the Expense Reimbursement, if applicable pursuant to
the provisions of Section 4.5 and Section 7.1, shall be the sole and exclusive remedy of Buyer
with respect to any failure by Sellers to consummate the transactions contemplated by this
Agreement.
ARTICLEV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to Buyer that:
Section 5.1 Authorization of Agreement. Subject to the entry of the Sale Order:
(a) Sellers each have all requisite power, authority and legal capacity to execute and deliver this
Agreement and Sellers each have all requisite power, authority and legal capacity to execute and
deliver each other agreement, document, or instrument or certificate contemplated by this
Agreement or to be executed by Sellers in connection with the consummation of the transactions
contemplated by this Agreement (the "Sellers Documents"), to perform their respective
obligations hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby; and (b) this Agreement has been, and each of the Sellers Documents wi11 be at or
prior to the Closing, duly and validly executed and delivered by Sellers and (assuming the due
authorization, execution and delivery by the other Parties hereto and thereto and the entry of the
Sale Order) this Agreement constitutes, and each of the Sellers Documents when so executed and
DOCS_LA:l96006.S 16
delivered will constitute, legal, valid and binding obligations of Sellers, enforceable against
Sellers in accordance with their respective terms.
Section 5.2 Title to Purchased Assets. Except as set forth in Schedule 5.2, and other
than the personal property subject to the Personal Property Leases, Sellers own each of the
Purchased Assets, and Buyer will be vested with good title to such Purchased Assets, free and
clear of all Liens, other than Permitted Exceptions, to the fullest extent permissible under Section
363(f) of the Bankruptcy Code. The Purchased Assets include all of the properties and assets
required to operate, in all material respects, the Business in the Ordinary Course of Business.
Section 5.3 Tangible Personal Property. Schedule 5.3(a} sets forth all leases of
personal property ("Personal Property Leases") relating to personal property used by Sellers in
the Business or to which Sellers are a party or by which the properties or assets of Sellers are
bound. Each Seller has a valid and enforceable leasehold interest under each Personal Property
Lease under which it is a lessee; subject to defaults by the lessors thereunder set forth on
Schedule 5.3(b).
Section 5.4 Intellectual Property. To Sellers' knowledge, Sellers own all right, title
and interest to, or are licensees with respect to, the Purchased Intellectual Property, and can
convey such property free and clear of Liens, other than Permitted Exceptions, pursuant to the
Sale Order. To the knowledge of Sellers, (i) no Person is engaging in any activity that infringes
any Purchased Intellectual Property and (ii) no claim has been asserted to any Seller that the use
of any Purchased Intellectual Property or the operation of the Business infringes or violates the
Intellectual Property of any third party. The Purchased Intellectual Property and the rights under
the Purchased Contracts include the rights to use all Intellectual Property required to operate the
Business.
Section 5.5 Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for Sellers in connection with the transactions contemplated by
this Agreement, and no Person is entitled to any fee or commission or like payment from Buyer
or Sellers in respect thereof, in each case other than as set forth on Schedule 5.5.
Section 5.6 Litigation. Except for the Bankruptcy Cases and except as set forth on
Schedule 5.6, there is no suit, action, litigation, arbitration proceeding or governmental
proceeding, including appeals and applications for review, in progress, pending or, to the best of
Sellers' knowledge, threatened against or relating to Sellers or any judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency, instrumentality or
arbitrator which, in any case, might adversely affect the ability of Sellers to enter into this
Agreement or to consummate the transactions contemplated hereby and Sellers are not aware of
any existing ground on which any such action, suit or proceeding may be commenced with any
reasonable likelihood of success.
Section 5. 7 Compliance with Laws. Except as set forth on Schedule 5. 7 and to
Sellers' knowledge, Sellers have conducted and are presently conducting the Business in
material compliance with all applicable Laws.
DOCS_LA:I96006.S 17
Section 5.8 Permits. Schedule 5.8 sets forth all Permits used by Sellers in the
Business. Sellers are in compliance with the material terms of all such Permits, and all such
Permits are valid and in full force and effect, and no proceeding is pending or, to the knowledge
of Sellers, threatened, the object of which is to revoke, limit or otherwise affect any such Permit.
Section 5.9 Sellers' Representations and Warranties Generally. Sellers'
representations and warranties herein (including as made or qualified in the Schedules hereto)
are made by the respective Sellers in a corporate or limited liability company capacity, without
personal liability to Sellers' directors, officers, members or counsel, or Sellers' signatory, other
than with respect to fraudulent or criminal activity with respect to the transactions contemplated
hereby.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers that:
Section 6.1 Organization and Good Standing. Buyer is a limited liability company
duly organized, validly existing and in good standing under the Laws of the Commonwealth of
Virginia.
Section 6.2 Authorization of Agreement. Buyer has full limited liability company
power and authority to execute and deliver this Agreement and each other agreement, document,
instrument or certificate contemplated by this Agreement or to be executed by Buyer in
connection with the consummation of the transactions contemplated hereby and thereby (the
"Buyer Documents"), and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance by Buyer of this Agreement and each Buyer Document
have been duly authorized by all necessary limited liability company action on behalf of Buyer.
This Agreement has been, and each Buyer Document will be at or prior to the Closing, duly
executed and delivered by Buyer and (assuming the due authorization, execution and delivery by
the other parties hereto and thereto) this Agreement constitutes, and each Buyer Document when
so executed and delivered will constitute, legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally, and subject, as to enforceability, to general principles of equity,
including principles of commercial reasonableness, good faith and fair dealing (regardless of
whether enforcement is sought in a proceeding at law or in equity).
Section 6.3 Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial auvisur for Buyer in c01mection with the transactions contemplated by
this Agreement and no person is entitled to any fee or commission or like payment in respect
thereof.
Section 6.4 Financial Capability. Buyer (i) has, as of the date hereof, and will have as
of the Closing, sufficient funds available to pay the Purchase Price and any expenses incurred by
Buyer in connection with the transactions contemplated by this Agreement; (ii) has, as of the
DOCS_lA: 196006.5 18
date hereof, and will have at Closing, the resources and capabilities (financial or otherwise) to.
perform its obligations hereunder and (iii) has not, as of the date hereof, and will not have as of
the Closing, incurred any obligation, commitment, restriction or Liability of any kind which
would impair or adversely affect such resources and capabilities.
Section 6.5 Condition of the Business. Notwithstanding anything contained in this
Agreement to the contrary, Buyer acknowledges and agrees that Sellers are not making any
representations or warranties whatsoever, express or implied, beyond those expressly given by
Sellers in Article V hereof (as modified by the Schedules hereto), and Buyer acknowledges and
agrees that, except for the representations and warranties contained therein, the Purchased Assets
and the Business are being transferred on a ''WHERE IS" and, as to condition, "AS IS" basis and
"WITH ALL FAULTS." Without in any way limiting the foregoing, Sellers hereby disclaim any
warranty (express or implied) of merchantability or fitness for any particular purpose as to any
portion of the Purchased Assets.
ARTICLE VII
BANKRUPTCY COURT APPROVAL
Section 7.1 Approval ofBreak-Up Fee, Expense Reimbursement, Overbid Protection.
In consideration for Buyer having expended considerable time and expense in connection with
this Agreement and the negotiation thereof and the identification and quantification of assets of
Sellers, Sellers shall pay to Buyer promptly upon the effective date of termination of this
Agreement in accordance with the provisions of Section 4.4Cc) (i) a break-up fee in the amount
of Fifteen Thousand Dollars {$15,000) (the "Break-Up Fee") and (ii) the Buyer's reasonable
expenses incurred in connection with the transactions contemplated by this Agreement, provided
the amount of such expense reimbursement does not exceed Twenty Thousand Dollars ($20,000)
(the "Expense Reimbursement") (provided, however, that the Expense Reimbursement shall not
be payable to Buyer if termination ofthis Agreement occurred because of a material breach of
any representations, warranties, covenants or agreements contained in this Agreement by Buyer).
In addition, the Stalking Horse Motion shall provide for an overbid protection in the amount of
Twenty-Five Thousand Dollars ($25,000) over and above the aggregate of the Purchase Price,
the Break-Up Fee and the Expense Reimbursement (the "Overbid Protection").
Section 7.2 Competing Transaction.
(a) This Agreement is subject to approval by the Bankruptcy Court and the
consideration by Sellers of higher or better competing bids (each a "Competing Bid"). From the
date hereof (and any prior time) and until the completion of the auction contemplated hereby or
as otherwise directed by the Bankruptcy Court, Sellers are permitted to cause their respective
representatives and Affiliates to initiate contact with, solicit or encourage submission of any
inquiries, proposals or offers by, any Person (in addition to Buyer and its Affiliates, agents and
representatives) in connection with any sale or other disposition of the Purchased Assets. Each
Competing Bid submitted subsequent to the execution of this Agreement must include a bid price
of at least $560,000 in accordance with the Overbid Protection. In addition, Sellers shall have
the responsibility and obligation to respond to any inquiries or offers to purchase all or any part
of the Purchased Assets and perform any and all other acts related thereto which are required
DOCS_LA: 196006.5 19
under the Bankruptcy Code or other applicable law, including supplying information relating to
the Business and the assets of Sellers to prospective buyers.
(b) Following completion of the auction contemplated hereby, Sellers are not
permitted to cause their respective representatives and Affiliates to initiate contact with, solicit or
encourage submission of any inquiries, proposals or offers by, any Person (in addition to Buyer
and its Affiliates, agents and representatives) in connection with any sale or other disposition of
the Purchased Assets. In addition, unless otherwise directed by the Bankruptcy Court, Sellers
shall not after completion of the auction contemplated herein respond to any inquiries or offers to
purchase all or any part of the Purchased Assets or perform any other acts related thereto,
including supplying information relating to the Business and the assets of Sellers to prospective
buyers.
Section 7.3 Bankruptcy Court Filings. Sellers shall file the Sale Order with the
Bankruptcy Court and seek entry thereof. Buyer agrees that it will promptly take such actions as
are reasonably requested by Sellers to assist in obtaining the Sale Order, including furnishing
affidavits or other documents or information for filing with the Bankruptcy Court for the
purposes, among others, of providing necessary assurances of performance by Buyer under this
Agreement and demonstrating that Buyer is a "good faith" Buyer under Section 363(m) ofthe
Bankruptcy Code. In the event the entry of the Sale Order shall be appealed, Sellers shall use its
reasonable efforts to defend such appeal.
ARTICLE VIII
COVENANTS
Section 8.1 Access to Information. Sellers agree that, prior to the Closing Date, Buyer
shall be entitled, through its officers, employees and representatives (including its legal advisors
and accountants), to make such investigation of the properties, businesses and operations of the
Business and such examination of the books, records and financial condition of the Business, the
Purchased Assets and the Assumed Liabilities as it reasonably requests and to make extracts and
copies of such books and records. Any such investigation and examination shall be conducted
during regular business hours upon reasonable advance notice and under reasonable
circumstances and shall be subject to restrictions under applicable Law. Sellers shall cause their
respective officers, employees, consultants, agents, accountants, attorneys and other
representatives to cooperate with Buyer and Buyer's representatives in connection with such
investigation and examination, and Buyer and its representatives shall cooperate with Sellers and
their respective representatives and shall use their reasonable efforts to minimize any disruption
to the Business. Notwithstanding anything herein to the contrary, no such investigation or
examination shall be permitted to the extent that it would require Sellers or any of their
respective Affiliates to disclose information subject to attorney-client privilege or conflict with
any confidentiality obligations to which Sellers or any of their respective Affiliates is bound.
Section 8.2 Further Assurances. Each of Sellers and Buyer shall use reasonable
efforts to (a) take all actions necessary or appropriate to consummate the transactions
contemplated by this Agreement and (b) cause the fulfillment at the earliest practicable date of
DOCS_LA:I96DD6.5 20
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all of the conditions to their respective obligations to consmnmate the transactions contemplated
by this Agreement.
Section 8.3 Confidentiality.
(a) Buyer acknowledges that the confidential information provided to it in
connection with this Agreement, including under Section 8.1, and the consummation of the
transactions contemplated hereby, is subject to the terms and conditions of that certain letter
agreement, by and among Buyer and The Parent Company, dated as of January 22, 2009.
(b) Following the completion of the auction contemplated hereby, Sellers
agree to maintain, and shall cause their respective Affiliates to maintain, unless disclosure is
required by applicable Law, the confidentiality of any confidential information regarding the
Business which is in SeUers' or any of their respective Affiliate's possession or which Sellers or
any of their respective Affiliates are aware of. Sellers hereby further agree, unless disclosure is
required by applicable Law, to take all appropriate steps, and to cause each of their respective
Affiliates to take all appropriate steps, to safeguard such confidential information and to protect
it against disclosure, misuse, espionage, loss and theft. In furtherance and not in limitation of the
foregoing, Sellers shall not, and shall cause their respective Affiliates not to, unless required by
applicable Law, disclose to any Person (a) any confidential information regarding the Business
or (b) any ofthe discussions or negotiations conducted in connection with this Agreement. In
the event Sellers or any of their respective Affiliates are obligated by a Law or an Order to
disclose any confidential information regarding the Business or the Buyer, Sellers, on their own
behalf and on behalf of their respective Affiliates, as the case may be, shall promptly notify
Buyer in writing, which notification shall include the nature of the applicable Law or Order and
the extent of the required disclosure, so that the Buyer may seek an appropriate protective order
at its own expense or waive compliance with the provisions of this Section 8.3. Notwithstanding
anything in this Section 8.3 to the contrary, unless disclosure is required by applicable Law, the
confidentiality of any Trade Secrets of the Business or Buyer shall be maintained for so long as
such Trade Secrets continue to be entitled to protection as Trade Secrets of the Business and
Buyer, respectively.
Section 8.4 Preservation ofRecords. Sellers and Buyer agree that each of them shall
preserve and keep the records held by it or their respective Affiliates relating to the Business for
a period of three (3) years from the Closing Date and shall make such records and personnel
available to the other as may be reasonably required by such party in connection with, among
other things, any insurance claims by, Legal Proceedings or Tax audits against or governmental
investigations of Sellers or Buyer or any of their Affiliates or in order to enable Sellers or Buyer
to comply with their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby. In the event Sellers, on the one hand,
or Buyer, on the other hand, wish to destroy such records after that time, such Party shall first
give ninety (90) days' prior written notice to the other and such other Party shall have the right at
its option and expense, upon prior written notice given to such Party within that ninety (90) day
period, to take possession of the records within one hundred and eighty (180) days after the date
of such notice.
DOCS_LA:I96006.5 21
Section 8.5 Publicity. Neither Sellers, on the one hand, nor Buyer, on the other hand,
shall issue any press release or public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of the other Party
hereto, which approval will not be unreasonably withheld or delayed, unless, in the sole
judgment of Buyer or Sellers, disclosure is otherwise required by applicable Law or with respect
to filings to be made with the Bankruptcy Court in connection with this Agreement.
Notwithstanding the foregoing, the Parties may publicly disclose the existence of this
Agreement.
Section 8.6 Operation of Business. Until the Closing, Sellers shall use commercially
reasonable efforts, except as otherwise required, authorized or restricted pursuant to an Order of
the Bankruptcy Court, to operate the Business in the Ordinary Course of Business. Sellers shall
use commercially reasonable efforts to (A) preserve intact their respective business
organizations, (B) maintain the Business, (C) keep available the services of their respective
officers and employees, (D) maintain satisfactory relationships with licensors, licensees,
suppliers, contractors, distributors, consultants, customers and others having business
relationships with Sellers in connection with the operation of the Business and (E) pay all of their
post-petition obligations in the Ordinary Course of Business. Without limiting the generality of
the foregoing, and except (i) as otherwise expressly provided in or contemplated by this
Agreement, or (ii) required, authorized or restricted pursuant to an Order of the Bankruptcy
Court, on or prior to the Closing Date, Sellers may not, without the prior written consent of
Buyer:
(a) modify in any manner the compensation of any of the Employees, or
accelerate the payment of any such compensation (other than in the Ordinary Course of Business
or such that the liability associated with such modification is excluded from the Asswned
Liabilities);
(b) engage any new Employee other than in the Ordinary Course of Business;
(c) remove or permit to be removed from any building, facility, or real
property any Purchased Asset (other than in the Ordinary Course of Business);
(d) sell, lease or otherwise dispose of, mortgage, hypothecate or otherwise
encwnber any Purchased Asset (other than in the Ordinary Course of Business);
(e) amend, terminate or renew any Purchased Contract, once identified as
such by Buyer in writing to Sellers;
(f) fail to pay any required filing, processing or other fee, and use
commercially reasonable efforts to maintain the validity of Sellers' righls in, lo or under any
Purchased Intellectual Property;
(g) fail to use commercially reasonable efforts to maintain all Permits of
Sellers, including those used in the operation of the Business;
(h) make any unusual or extraordinary efforts to collect any outstanding
accounts receivable or intercompany obligation, liability or Indebtedness, give any discounts or
DOCS_ LA: 196006.5 22
concessions for early payment of such accounts receivable or intercompany obligation, liability
or Indebtedness, other than the usual discounts given by the Business in the Ordinary Course of
Business and make any sales of, or convey any interest in, any accounts receivable or
intercompany obligation, liability or Indebtedness to any third party;
(i) other than transactions pursuant to agreements or arrangements in effect
on the Petition Date as set forth on Schedule 8.6(i), engage in any transaction with any Affiliate,
subsidiary, shareholder, officer or director of any Seller (other than in the Ordinary Course of
Business), incur or assume any long tenn or short tenn debt with or on behalf of any such Person
or guarantee, endorse or otherwise be liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any such Person;
(j) make any change in their method of accounting, except in accordance with
GAAP;
(k) enter into any Contract, other than an Excluded Contract, that would
survive the Closing;
(1) return inventory to any vendor; and
(m) agree, whether in writing or otherwise, to do any of the foregoing.
Section 8. 7 Cure Amounts. On the second Business Day prior to the Closing Date,
Sellers shall deliver to Buyer a copy of Schedule 2.3(b) updated as of such date.
Section 8.8 Section 363(b)(l)(A). Buyer shall honor and observe any and all policies
of Sellers in effect on the Petition Date prohibiting the transfer of personally identifiable
information about individuals and otherwise comply with the requirements of
Section 363(b)(I)(A) ofthe Bankruptcy Code.
Section 8.9 Adequate Assurances Regarding Purchased Contracts. With respect to
each Purchased Contract set forth on Schedule 1.1 (c), Buyer shaH provide adequate assurance of
the future performance of such Purchased Contract by Buyer as required by Sections
365(b)(l)(C) and/or 365(f)(2)(B) of the Bankruptcy Code, as applicable.
DOCS_LA:196006.S 23
ARTICLE IX
POST-CLOSING COVENANTS
Section 9.1 Storage of Equipment. The Sellers shall permit the Equipment and
Inventory to be stored on its premises undisturbed by the Sellers or its Affiliates for a period of
up to ten (1 0) days after the Closing Date. After the Closing, the Sellers shall have no obligation
to maintain the Equipment or carry any insurance related to the Equipment and the Buyer
acknowledges and agrees that all risk of loss related to the Equipment passes to the Buyer at the
Effective Time, except in the case of the gross negligence or willful or intentional misconduct of
the Sellers or any of its or its Affiliates' employees, contractors, agents or representatives.
Section 9.2 Access to Equipment. Upon no less than five (5) Business Days' notice,
the Sellers shall permit the Buyer or its contractors to have reasonable access to the Sellers'
facilities for the purposes of selling or moving the Equipment and Inventory. The Buyer will
exercise commercially reasonable efforts to conduct the selling process with respect to, and
move, the Equipment in a safe manner.
Section 9.3 Transportation of Equipment. The Buyer shall be responsible for all
transportation costs and related expenses associated with moving the Equipment and Inventory
from its location on the Sellers' premises other than those attributable to the personnel of the
Sellers involved in such process, if any. The Sellers acknowledge that there may be certain
support structures connected to or abutting the Equipment (such as electrical conduits or building
infrastructure) that must necessarily be disturbed in order to move the Equipment. The Buyer
shall use commercially reasonable efforts to cause as little disturbance as possible to the structure
of the Sellers' facility and the Sellers' operations thereat in the Buyer's removal of the
Equipment, and the Buyer shall be responsible for any damages caused thereby.
ARTICLE X
EMPLOYEES AND EMPLOYEE BENEFITS
Section 10.1 Employment.
(a) Employees. Buyer agrees that prior to the Closing Date it shall offer jobs
to those employees listed on Schedule 10.1 (a). Such individuals who accept such offer by the
Closing Date are hereinafter referred to as the "Transferred Employees." Buyer shall be
obligated to provide payment to the Transferred Employees on such substantially similar terms
so as not to trigger any Employee Obligations, including, but not limited to, severance
obligations under the Law with respect to the Transferred Employees. Sellers agree that between
the date hereof and the Closing Date it shall take no action so as to trigger any WARN Liabilities
in respect of Sellers or Buyer.
(b) Standard Procedure. Pursuant to the "Standard Procedure" provided in
Section 4 of Revenue Procedure 2004-53, 2004-34 IRB 320, (i) Buyer and Sellers shall report on
a predecessor/successor basis as set forth therein, (ii) Sellers will not be relieved from filing a
Form W-2 with respect to any Transferred Employees, and (iii) Buyer will undertake to file (or
DOCS_LA:I96006.S 24
cause to be filed) a Fonn W-2 for each such Transferred Employee with respect to the portion of
the year during which such Employees are employed by Buyer that includes the Closing Date,
excluding the portion of such year that such Employee was employed by Sellers.
Section 10.2 Employee Benefits.
(a) Benefits. Set forth on Schedule 10.2(a) is a correct and complete list for
each Employee (including and denoting any Employee who is on a leave of absence or on layoff
status): (i) the name and title of such Employee; (ii) the aggregate dollar amounts of the current
base annualized compensation; (iii) severance amounts (subject to court approval) that would be
payable to such Employee if such Employee were tenninated as of the Closing Date.
ARTICLE XI
CONDITIONS TO CLOSING
Section 11.1 Conditions Precedent to Obligations of Buyer. The obligation of Buyer to
consummate the transactions contemplated by this Agreement is subject to the fulfillment, on or
prior to the Closing Date, of each of the following conditions (any or all of which may be waived
by Buyer in whole or in part to the extent pennitted by applicable Law):
(a) The representations and warranties of Sellers set forth in this Agreement
qualified as to materiality shall be true and correct, and those not so qualified shall be true and
correct in all material respects, at and as of the Closing, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such representations and
warranties qualified as to materiality shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier date); and Buyer shall have
received a certificate signed by an authorized officer of each Seller, dated the Closing Date, to
the foregoing effect in his or her corporate (not personal) capacity (it being acknowledged and
agreed that the signatory to such certificate shall have no personal liability as a result of signing
such certificate); provided, however, notwithstanding the foregoing, this condition shall be
deemed satisfied, and Buyer shall not have the right to terminate this Agreement, with respect to
any representation or warranty that was untrue as of the date of this Agreement and which Buyer
knew or shOl.lld have reasonnbly known was untrue at any time prior to the execution of this
Agreement;
(b) Sellers shall have perfonned and complied in all material respects with all
obligations and agreements required in this Agreement to be perfonned or complied with by
them prior to the Closing Date, and Buyer shall have received a certificate signed by an
authorized officer of each Seller, dated the Closing Date, to the.forgoing effect in his or her
corporate (not personal) capacity (it being acknowledged and agreed that the signatory to such
certificate shall have no personal liability as a result of signing such certificate);
(c) Sellers shall have delivered, or caused to be delivered, to Buyer all of the
items set forth in Section 4.2;
(d) Buyer shall have received all Pennits necessary or useful for the conduct
of the Business (which Buyer shall use commercially reasonable efforts to timely obtain); and
DOCS_ LA: 196006.5 25
(e) From the date hereof through the Closing Date, (i) there shall have been
no Material Adverse Effect and (ii) Sellers shall have delivered to Buyer a certificate (executed
in corporate or limited liability company capacity, without liability to Sellers' signatory), dated
as of the Closing Date, to such effect.
Section 11.2 Conditions Precedent to Obligations of Sellers. The obligations of Sellers
to consummate the transactions contemplated by this Agreement are subject to the fulfillment,
prior to or on the Closing Date, of each of the following conditions (any or all of which may be
waived by Sellers in whole or in part to the extent permitted by applicable Law):
(a) The representations and warranties of Buyer set forth in this Agreement
qualified as to materiality shall be true and correct, and those not so qualified shall be true and
correct in all material respects, at and as of the Closing, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such representations and
warranties qualified as to materially shall be true and correct, and those not so qualified shall be
true and correct in all material respects, on and as of such earlier date); and Sellers shall have
received a certificate signed by an authorized officer of Buyer, dated the Closing Date, to the
foregoing effect in his or her corporate (not personal) capacity (it being acknowledged and
agreed that the signatory to such certificate shall have no personal liability as a result of signing
such certificate);
(b) Buyer shall have performed and complied in all material respects with all
obligations and agreements required by this Agreement to be performed or complied with by
Buyer on or prior to the Closing Date, and Sellers shall have received a certificate signed by an
authorized officer of Buyer, dated the Closing Date, to the foregoing effect in his or her
corporate (not personal) capacity (it being acknowledged and agreed that the signatory to such
certificate shall have no personal liability as a result of signing such certificate);
(c) Sellers shall have received the Deposit; and
(d) Buyer shall have delivered, or caused to be delivered, to Sellers the Cash
Payment in accordance with Section 3.1.
Section 11.3 Conditions Precedent to Obligations of Buyer and Sellers. The respective
obligations of Buyer and Sellers to consummate the transactions contemplated by this Agreement
are subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions
(any or all of which may be waived by Buyer and Sellers in whole or in part to the extent
permitted by applicable Law):
(a) there shall not be in effect any Order by a Governmental Body of
competent jurisdiction restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby;
(b) the Bankruptcy Court shall have entered the Sale Order, in form and
substa11ce acc....optable to Sellers and Buyer, by no later than Febnl<U7 6, 2009; and
(c) the Sale Order shall have become a Final Order (unless this condition shall
have been waived in writing by Buyer).
DOCS_LA:I96006.S 26
Section 11.4 Frustration of Closing Conditions. Neither Sellers nor Buyer may rely on
the failure of any condition set forth in Section 11.1, Section 11.2 or Section 11.3, as the case
may be, if such failure was caused by such Party's failure to comply with any provision of this
Agreement.
ARTICLE XII
NOSURVNAL
Section 12.1 No Survival of Representations and Warranties. The Parties hereto agree
that the representations and warranties contained in this Agreement shall not survive the Closing
hereunder, and none of the Parties shall have any liability to each other after the Closing for any
breach thereof. The Parties hereto agree that the covenants contained in this Agreement to be
performed at or after the Closing shall survive the Closing hereunder, and each Party hereto shall
be liable to the other after the Closing for any breach thereof.
ARTICLE XIII
TAXMATIERS
Section 13.1 Transfer Taxes. Buyer and Sellers shall seek to include in the Sale Order
a provision that provides that the transfer of the Purchased Assets shall be free and clear of any
sales, use, stamp, documentary stamp, filing, recording, transfer or similar fees or taxes or
governmental charges (including any interest and penalty thereon) payable in connection with
the transactions contemplated by this Agreement ("Transfer Taxes") under Bankruptcy Code
Section 1146( c). If not included, Buyer shall be responsible for all Transfer Taxes.
Section 13.2 Prorations. All real and personal property Taxes or similar ad valorem
obligations levied with respect to the Purchased Assets for any taxable period that includes the
Closing Date and ends after the Closing Date, whether imposed or assessed before or after the
Closing Date, shall be prorated between Sellers and Buyer as of 12:01 a.m. (New York time) on
the day following the Closing Date. Such Taxes that first become payable in calendar year 2009
shall be apportioned between Sellers and Buyer using the calendar" year method. Under the
calendar-year method, any Tax bill that first becomes due and payable during a calendar year is
deemed to be related to that entire calendar year. Sellers' share of the Tax bills first becoming
due and payable during 2009 shall be determined by multiplying the sum ofthe 2009 Tax bills
by a fraction, the numerator of which shall be the number of days from and including January 1
to, and including, the Closing Date, and the denominator of which shall be 365. Buyer's share
shall be the aggregate amount of all such bills less Sellers' share. If the exact amount of any real
or personal property Taxes is not known on the Closing Date, the apportionment shall be based
upon a reasonable amount, without subsequent adjustment.
Section 13.3 Purchase Price Allocation. Within sixty (60) days after the Closing Date,
Buyer and Sellers will agree to a certificate of allocation detailing the allocation of the Purchase
Price among the Purchased Assets. Buyer and Sellers will each file an Internal Revenue Service
Form 8594 "Asset Acquisition Statement under Section 1 060" at the times and in the manner as
required by Treasury Regulation 1.1060-1 consistent with such certificate of allocation. The
DOCS_LA:l95006.5 27
certificate of allocation will be conclusive and binding on the Parties for all purposes, including
reporting and disclosure requirements under the Code and any foreign, state, or local Tax
authority.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Expenses. Except for the Expense Reimbursement owed by Sellers to
Buyer, each of Sellers and Buyer shall bear their own expenses incurred in connection with the
negotiation and execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions contemplated hereby
and thereby.
Section 14.2 Submission to Jurisdiction: Consent to Service of Process.
(a) Without limiting any Party's right to appeal any order of the Bankruptcy
Court, (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the tenns of this
Agreement and to decide any claims or disputes which may arise or result from, or be connected
with, this Agreement, any breach or default hereunder, or the transactions contemplated hereby,
and (ii) any and all proceedings related to the foregoing shall be filed and maintained only in the
Bankruptcy Court, and the parties hereby consent to and submit to the jurisdiction and venue of
the Bankruptcy Court and shall receive notices at such locations as indicated in Section 13.7
hereof; provided, however, that if the Bankruptcy Case has closed, the Parties agree to
unconditionally and irrevocably submit to the exclusive jurisdiction of the United States District
Court for the District of Delaware and any appellate court thereof, for the resolution of any such
claim or dispute. The Parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying of venue of
any such dispute brought in such court or any defense of inconvenient forum for the maintenance
of such dispute. Each of the Parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
(b) Each of the Parties hereto hereby consents to process being served by any
Party to this Agreement in any suit, action or proceeding by delivery of a copy thereof in
accordance with the provisions of Section 13.7.
Section 14.3 Waiver of Right to Trial by Jury. Each Party to this Agreement waives
any right to trial by jury in any action, matter or proceeding regarding this Agreement or any
provision hereof.
Section 14.4 Entire Agreement: Amendments and Waivers. This Agreement (including
the Schedules and Exhibits hereto) represents the entire understanding and agreement between
the Parties hereto with respect to the subject matter hereof This Agreement can be amended,
supplemented or changed, and any provision hereof can be waived, only by written instrument
making specific reference to this Agreement signed by the Party against whom enforcement of
any such amendment, supplement, modification or waiver is sought or, if such amendment,
supplement, modification or waiver can be so construed, by both Parties. No action taken
DOCS _LA:J96006.S 28
pursuant to this Agreement, including any investigation by or on behalf of any Party, shall be
deemed to constitute a waiver by the Party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by any Party
hereto of a breach of any provision of this Agreement shall not operate or be construed as a
further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any Party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such Party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.
Section 14.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State ofDelaware applicable to contracts made and performed in
Delaware, and, to the extent applicable, the Bankruptcy Code.
Section 14.6 Notices. All notices and other communications under this Agreement shall
be in writing and shall be deemed given (i) when delivered personally by hand (with written
confirmation of receipt), (ii) when sent by facsimile (with written confirmation of transmission)
or electronic mail (and no notice of failure of delivery was received within a reasonable time
after such message was sent) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following addresses, facsimile
numbers and e-mail addresses (or to such other address, facsimile number or e-mail address as a
Party may have specified by notice given to the other Party pursuant to this provision):
If to Sellers, to:
The Parent Company
717 17th Street, Suite 1300
Denver, CO 80202
Attention: ChiefRestructuring Officer
Telecopier: (303) 226-8650
E-mail: -------
With a copy (which shall not constitute notice) to:
OOCS_LA:196006.S
Pachulski Stang Ziehl & Jones LLP
10100 Santa Monica Boulevard, 11th Floor
Loa Angeles, CA 90067-4100
Attention: Jeffrey W. Dulberg
Telecopier: (310) 201-0760
E-mail: jdulberg@pszjlaw .com
29
With a copy (which shall not constitute notice) to:
D.E. Shaw Laminar Lending 3 (C), L.L.C.
c/o D.E. Shaw & Co., L.P.
120 West 45th Street, 39th Floor
New York, New York 10036
Attention: Sarah Johnson
E-mail: Sarah.Johnson@deshaw .com
Telecopier: (212)845-1833
Attention: Debbie Blank
Telecopier: (713) 292-5454
E-mail: ------
With a copy (which shall not constitute notice) to:
Klee, Tuchin, Bogdanoff & Stem LLP
1999 Avenue of the Stars, 39th Floor
Los Angeles, California 90067
Attn: Michael L. Tuchin
Telecopier: (31 0) 407-9090
E-mail: MTuchin@ktbslaw.com
Ifto Buyer, to:
Posh Ventures, LLC
9510 Osborne Turnpike
Riclnnond, Virginia 23231
Attn: Andrea Edmunds
Telecopier: -----
E-mail: ------
With a copy (which shall not constitute notice) to:
DOCS_LA:l96006.S
McGuireWoods LLP
901 E. Cary Street
Riclnnond, Virginia 23219
Attn: Michael J. Schewel
Telecopier: (804) 698-2120
E-mail: mschewel@mcguirewoods.com
Arent Fox LLP
1675 Broadway
New York, New York 10019
Attn: Adrienne W. Blankley
Telecopier: (212) 484-3990
E-mail: blankley.adrienne@arentfox.com
30
Each Party entitled to notice may change the address to which notices, requests, demands, claims
and other communications hereunder are to be delivered by giving the other Party notice in the
manner herein set forth.
Section 14.7 Severability. If any tenn or other provision of this Agreement is invalid,
illegal, or incapable of being enforced by any Law or public po1icy, all other terms or provisions
of this Agreement shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such detennination that any term or other provision is invalid,
illegal, or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as possible in an
acceptable manner in order that the transactions contemplated hereby are consununated as
originally contemplated to the greatest extent possible.
Section 14.8 Binding Effect; Assignment Tills Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and pennitted assigns. Nothing
in this Agreement shall create or be deemed to create any third party beneficiary rights in any
person or entity not a party to this Agreement except as provided below. No assignment of this
Agreement or of any rights or obligations hereunder may be made by either Sellers, on the one
hand, or Buyer, on the other hand, (by operation oflaw or otherwise) without the prior written
consent of the other Parties hereto and any attempted assignment without the required consents
shall be void; provided, however, that Buyer may assign any or all of its rights, interests, and
obligations hereunder to one or more of its Affiliates, provided, further, however, no such
assignment shall relieve Buyer of its obligations hereunder. No assignment of any obligations
hereunder shall relieve the Parties hereto of any such obligations. Upon any such pennitted
assignment, the references in this Agreement to Buyer shall also apply to any such assignee
unless the context otherwise requires.
Section 14.9 Counterparts. This Agreement may be executed in one or more
counterparts (including by facsimile or electronic mail), each of which will be deemed to be an
original copy of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement
[Signature Page Follows]
DOCS_LA:I96006.S 31
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first written above.
SELLERS: eTOYS DIRECT 1, LLC
By: eToys Direct, Inc.,
its Managing Member
By:
Name: /11 t. ._.l.. .... _f v.la.,s,.,. ... r
Title:
THE PARENT COMPANY
By:
Name: Jh1 e c.cL.-- I Wt...;- ......-
Title:
BABYUNNERSE, INC.
By:
Name:
Title:
eTOYS DIRECT, INC.
By:
Name: PI ._I w'J,., ._
Title: c..t o
POSHTOTS, INC.
By:
Name: m I C.. J,. _, Wo..j ..I ........
Title: o
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
PAGEl
DREAMTIME BABY, INC.
By:
Name: I!L._ 1.. ...... 1 W4' .......
Title: o
MY TWINN, INC.

Name: l!lt.ce J,._._._ I v..lo..;, , ,-
Title: c. . a
eTOYS DIRECT 2, LLC
By: eToys Direct, Inc.,
its Managing Member
By:
eTOYS DIRECT 3, LLC
By: eToys Direct, Inc.,
its Managing Member

N.ame: /Ylu ... J.. ..... J
T1tle:
GIFT ACQUISITION, L.L.C.
By: eToys Direct, Inc.,
its Managing Member
By:
Name: /Yl.
6
'"'t.. c... I w.,..; ... , ,.
Title: C-&d
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
PAGE2
'-- - ~ - - - - ~ - - - - ~ - - ..
DOCS.J.A:I!Ifi006..S
[SIGNA TIJRB PAGE TO ASSET PURCHASE AGREEMENT]
PAGE3
Exhibit A
BILL OF SALE AND ASSIGNMENT
TIIiS BILL OF SALE AND ASSIGNMENT (this "Bill of Sale and Assignment") is
made and entered into as of 2009 by and among THE PARENT
COMPANY, a Colorado corporation ("Parent"), ETOYS DIRECT, INC., a Colorado corporation
("eToys Direct"), ETOYS DIRECT 1, LLC, a Delaware limited liability company ("eToys 1"),
ETOYS DIRECT 2, LLC, a Delaware limited liability company ("eToys 2"), ETOYS DIRECT
3, LLC, a Delaware limited liability company ("eToys 3"), BABYUNIVERSE, INC., a Colorado
corporation ("BabyUniverse"), POSHTOTS, INC., a Colorado corporation ("PoshTots"),
DREAMTIME BABY, INC., a Colorado corporation ("Dreamtime"), MY TWINN, INC., a
Colorado corporation ("My Twinn"), GIFT ACQUISITION, L.L.C., a Delaware limited liability
company ("Gift", and collectively with Parent, eToys Direct, eToys 1, eToys 2, and eToys 3,
BabyUniverse, PoshTots, Dreamtime, and My Twinn, "Sellers"), and POSH VENTURES, LLC,
a Virginia limited liability company ("Buyer").
WITNESSETH
WHEREAS, Sellers and Buyer are parties to that certain Asset Purchase Agreement
dated as of January__, 2009 (the "Purchase Agreement"), whereby Sellers have agreed to sell,
transfer, convey, assign and deliver to Buyer the Purchased Assets (as defined in the Purchase
Agreement), and Buyer has agreed to purchase and acquire from Sellers the Purchased Assets;
WHEREAS, pursuant to the Purchase Agreement, Sellers have agreed to assign and
transfer the Assumed Liabilities and Buyer has agreed to assume the Assumed Liabilities; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the same
meaning as in the Purchase Agreement unless specifically defined in this Bill of Sale and
Assignment.
NOW, THEREFORE, pursuant to and in accordance with the terms and provisions of the
Purchase Agreement, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:
1. Transfer of Purchased Assets. Upon and subject to the terms and conditions set
forth in the Purchase Agreement, Sellers do hereby sell, assign, convey, transfer and deliver to
Buyer, and Buyer does hereby purchase and acquire from Sellers the Purchased Assets, as the
same shall exist on the Closing Date, free and clear of all Liens, other than Permitted Exceptions.
2. Assumption of Liabilities. Sellers do hereby assign and Buyer hereby accepts,
assumes, and agrees to perform and discharge when due the Assumed Liabilities.
3. Purchase Agreement. This Bill of Sale and Assignment is subject to the terms
and conditions set forth in the Purchase Agreement and nothing herein shaH be deemed to
modify, expand or diminish the representations, warranties, covenants, rights and obligations of
the Parties under the Purchase Agreement.
4. Exclusivity. Nothing contained herein, express or implied, shall be construed, nor
is intended, to confer upon any Person other than the Parties and their respective successors and
permitted assigns, any remedy or claim under or by reason of this Bill of Sale and Assignment or
any term, covenant and condition thereof, and such terms, covenants and conditions shall be for
the exclusive benefit of Buyer, its respective successors and permitted assigns, and Sellers, their
successors and assigns.
5. Governing Law. This Bill of Sale and Assignment and all matters arising from or
relating to this Bill of Sale and Assignment will be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the conflict of laws principles thereof.
6. Counterparts. This Bill of Sale and Assignment may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which together will
constitute one and the same instrument. Execution of this Bill of Sale and Assignment via
facsimile will be effective, and signatures received via facsimile or email will be binding upon
the Parties and effective as originals.
[Signature Page to Follow)
2
IN WITNESS WHEREOF, this Bill of Sale and Assignment has been executed and
delivered on the date first above written.
SELLERS: ETOYS DIRECT 1, LLC
By: eToys Direct, Inc.,
its Managing Member
By:
Name:
Title:
THE PARENT COMPANY
By:
Name:
Title:
BABYUNIVERSE, INC.
By:
Name:
Title:
ETOYS DIRECT, INC.
By:
Name:
Title:
POSHTOTS, INC.
By:
Name:
Title:
Signature Page to Bill of Sale and Assignment and Assumption Agreement
DREAMTIME BABY, INC.
By:
Name:
Title:
MYTWINN, INC.
By:
Name:
Title:
ETOYS DIRECT 2, LLC
By: eToys Direct, Inc.,
its Managing Member
By:
Name:
Title:
ETOYS DIRECT 3, LLC
By: eToys Direct, Inc.,
its Managing Member
By:
Name:
Title:
Signature Page to Bill of Sale and Assignment and Assumption Agreement
GIFT ACQUISITION, L.L.C.
By: eToys Direct, Inc.,
its Managing Member
By:
Name:
Title:
BUYER: POSH VENTURES, LLC
By:
Name:
Title:
Signature Page to Bill of Safe and Assignment and Assumption Agreement
SCHEDULE l.l(a)
Contracts
DESCRIPTION RECORD FTOT AMOUNT CREDITOR I ADDRESS! ADDRESS2 ADDRESS3
__ ::.:C_=--_-_
I;;--;-----_ --:- .. _--_ ___ 18329 West Sunset Rd Suite 220 ___ 891.!1_
1
Employment 22225 $0.00 Andrea Edmunds !ssoocoxRdSuiteM GlenAllen, VA
23060
----- _____

Transportation and 16113 $0.00 Bekins Worldwide Solutions, Inc. 330 South Mannheim Hillside, IL 60162
Logistic Road,
Transportation and 16113 $6,416.28 Bekins/HomeDirect 1624 Paysphere Circle Chicago, IL 60674-
Logistic 1624
Protective Smice I 6479 $0.00 Brinks Business Security 1000 Athens Avenue Su::;:it:-'-e-=c:-----t;R:-:-ic'h_m_o_n_d::-, :-:V"'"A-::2""32::.:2::7-
Agreement __ -------------'=":--------- ___ --------------
Media Notification 22051 $355.88 Cision US, Inc./Bacon's Info I P.O. Box 98869 Chicago, IL 60693-
__j 8869
Credit Agreement and 16492 $0.00 CIT GROUP/BUSINESS CRED!l'PO BOX I 036 CHARLOTTE, NC- ----------
Consent INC.


ASSET PURCHASE 22161 so.oofori'funERS,lNC. - .7500W.J60th Street-- Stilwell, KS 66085 --j
--- . _ .
16718 $0.00Jexacttargetinc. DeptCH 17808 Palatine,IL 60055- j
' 7808 ..J
DNS hosting and 7026 ------ $0.00 Global Web --7484 Lee Davis Road Mechanicsville, VA-------------,
email filtering --1--
6987
___ _ _______ j
Pest Control $0.00 Hometeam Defense 5737 Charles City Circle Richmond, VA 1
Posh Tots Purchase-- --165391-- so.oo Karen Booth Adams and Micii8ellsiTn Flamingo Drive t---- J
Agreement DruAdarns ------- 33301
5511 $0.00 Liberty Property Limired !'P.O. Box 828438 Philadelphia, PAF __ _
Partnership 19182-8438
16ffi1------- so.oo --p:isoulhThirdStrei;i VA- ------
Video provider - 7031 ... $0.00 MULTICFrMEDlA ATLANTA, GA --r---------
TECHNOLOGIES,INC. 30339
Membership Contract 16368 ---------SOOW Next Action ----- I 0075 Westmoor Drive Suite 100 Westminster, CO
80021-2714
Advenising 22052
S-1
SCHEDULE 1.1 (b)
Intellectual Property
Software and Software Licenses:
1. The following software licenses related to the Servers located in Denver, Colorado
and listed on Schedule 2.l(e):
a. Microsoft Windows Server 2003 R2 (6 each)
b. Microsoft SQL Server 2005 (2 each)
c. Telligent Community Server (1 each)
2. All Software, Software licenses and Technology located and maintained at 5500
Cox Road, Suite M, Glen Allen, Virginia 23060.
Internet Domains
Domain Name
poshadmin.com
poshads.com
poshadvertising.com
poshcraving.com
poshcraving.net
poshcraving.org
poshcravings.com
poshcravings.net
poshcravings. org
poshliving.com
posh newsletters. com
poshshare.com
poshtots.com
poshtots.net
poshtots.tv
poshtween.com
poshtweens.com
babyparade.com
Trademarks
TRADEMARK COUNTRY CLASS(ES)
POSHLIVINO us 35
APPL.NO
Registrar
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domain monger
Domain monger
Domain monger
Domain monger
Domain monger
Domain monger
Domain monger
Domain monger
Domain monger
Domainmonger
Domain monger
REGNO.
Fll.lNG DATE ISSUE DATE
77/508211
Expiration
8/4/2010
6/5/2009
6/5/2009
2/19/2010
2119/2010
2119/2010
1/10/2018
2119/2010
2119/2010
1/11/2011
6/26/2009
10/31/2009
3/23/2015
10/4/2013
10/3/2011
8/21/2009
12118/2009
STATUS AND REMARKS TTCREF.
ATTY(S) HANDLING
CLIENT REF.
027263-000 I 0 I US Pending (Published)
06/25/2008 Publication Date: I 0/28/2008
. (DES)
POSHLIVINO us 11, 16,20 78/665819 3486252 Registered 027263-0001 oous
07/07/2005 08/1212008 Next Due Date: Section 8 & IS Open 08/12/2013 (DES)
POSHTOTS CAN 1417572 Pending 027263-000300CA
11/07/2008 (DES)
POSHTOTS us 35 77/486738 Pending 027263-000303US
05129/2008 Publication Date: 11/18/2008 S4M(DES)
S-2
TRADEMARK COUNfRY CLASS(ES) APPL.NO REGNO. STATUS AND REMARKS TTCREF.
FILING DATE ISSUE DATE ATTY(S)HANDLING
CLIENT REF.
POSlffOTS us 25 77/486737 Pending (Published) 027263-000302US
05/29/2008 Publication Date: 11118/2008 S4M(DES)
POSlfTOTS us 24 77/486735 Pending 027263-000301US
05129/2008 S4M_ffi_EID_
POSlffOTS us 20 77/486734 Pending (Published) 027263-000300US
05/29/2008 Publication Date: 11/18/2008 (DES)
POSlffOTS& us 20,24,25 781243917 3092160 Registered 027263-000200US
Design 04/30/2003 05/16/2006 Next Due Date: Section 8 & IS .0Qiln 05116/2011 (DES)
POSHCRA VING us 41 771211749 3470601 Registered 027262-000300US
s 06/21/2007 07/2212008 Next Due Date: Section 8 & 15 Open 07/2212013 (DES)
S-3
SCHEDULE l.l(c)
Purchased Contracts
FTot
Descrietion Record Amt Creditor Address 1 AddressZ Address3 DEBTOR CASE
I. 5371 S3t2.n Bancof Lease PO Box 371992 Pittsburgh, Posh Tots, 08-13417
America Administration PA 15250- Inc.
Leasing Center 7992
2. Phone 6992 $2,204.51 Paetec flea US PO Box 601310 Charlotte, NC PoshTots, 08-13417
System LECCorp 28260-1310 Inc.
3. Postage 6982 $0.00 Pitney Bowes Attn: Joey PO Box 856460 Louisville, PoshTots, 08-13417
Meter Privitera KY40285 Inc.
6460
4. Janitorial $793.88 PM Building POBoxS0008 Richmond, VA PoshTots, 08-13417
Service Maintenance 23250 Inc.
Corp
s. Copier 6988 $0.00 Stones Office POBox7023 Troy, M148007- PoshTots, 0813417
Equipment 7023 Inc.
S-4
SCHEDULE 1.1 (d)
Purchased Intellectual Property
Software and Software Licenses:
1. The following software licenses related to the Servers located in Denver,
Colorado aud listed on Schedule 2.l(e):
a. Microsoft Windows Server 2003 R2 (6 each)
b. Microsoft SQL Server 2005 (2 each)
c. Telligent Community Server (1 each)
2. All Software, Software licenses and Technology located and maintained at 5500
Cox Road, Suite M, Glen Allen, Virginia 23060.
Domain Names:
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Trademarks:
Domain Name
poshadmin.com
poshads.com
poshadvertising.com
poshcraving.com
poshcraving.net
poshcraving.org
poshcravings.com
poshcravings.net
poshcravings.org
poshliving.com
poshnewsletters.com
poshshare.com
poshtots.com
poshtots.net
poshtots.tv
poshtween.com
poshtweens.com
babyparade.com
TRADEMARK COUNTRY CLASS(ES) APPL.NO
FILING
DATE
POSHLIVING us 35 77/508211
0612512008
POSHLIVING us 11, 16,20 78/665819
07/0712005
POSHTOTS Canada 1417572
11/0712008
Registrar
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Domainmonger
Expiration
8/4/2010
6/5/2009
6/5/2009
2/19/2010
2/19/2010
2/19/2010
1/10/2018
2/19/2010
2/19/2010
1/11/2011
6/26/2009
10/3112009
3/23/2015
10/4/2013
10/3/2011
8/21/2009
12/18/2009
REGNO. STATUS AND REMARKS
ISSUE DATE
Pending (Published)
Publication Date: I 012812008
3486252 Registered
08/1212008 Next Due Date: Section 8 & IS Open 08/12/2013
Pending
S-5
TIC REF.
ATIY(S) HANDLING
CLIENT REF.
027263000JOIUS
(DESj_
027263-0001 oous
(DES)
027263-000300CA
(DES)
POSIITOTS us 35 77/486738 Pending 027263-000303US
05/29/2008 Publication Date: 11/18/2008 S4M(I>ES)
POSIITOTS us 25 77/486737 Pending (Published) 027263000302US
05/2912008 Publication Date: ll/1812008 S4M(DES)
POSHTOTS us 24 77/486735 Pending 027263-00030 IUS
0512912008 S4M(DES)
POSIITOTS us 20 77/486734 Pending (Published) 027263-000300US
05129/2008 Publication Date: 11/1812008 (DES)
POSHTOTS& us 20,24,25 78/243917 3092160 Registered 027263-000200US
Design 04/30/2003 05/16/2006 Next Due Date: Section 8 & IS QpenOS/1612011 (DES)
POSHCRA VJNGS us 41 771211749 3470601 Registered 027262..000300US
0612112007 07122/2008 Next Due Date: Section 8 & I S Open 07122/2013 (DES)
S-6
SCHEDULE 2.1(e)
Furniture and Equipment
1. The following servers and associated hardware (e.g. all cables, hard drives,
memory, CPUs, elc.) located in Denver, Colorado and related to the operation of
the Business:

SVRBUNWEB03

COPTWEBPRD2

COPTDBPRDl

COPTDBPRD2

COPTCMSPRDl

COPTCMSPRD2
2. The following PC's located at 5500 Cox Road, Suite M, Glen Allen, VA 23060:
Make Model Location Quantity
Glen
Dell Dell DXP051 Allen
Glen
Dell Dimension 1100 Allen
Glen
Dell Dimension 3000 Allen 1
Glen
Dell Dimension 4550 Allen 2
Glen
Dell Dimension 9150 Allen 1
Glen
Dell OptiPiex 170L Allen 1
Glen
Dell OptiPiex GX240 Allen 1
Glen
Dell OptiPiex GX260 Allen 1
Glen
Dell OptiPiex GX620 Allen 39
3. The following laptops located at 5500 Cox Road, Suite M, Glen Allen, VA
23060:
Make Model Location Quantity
Glen
Dell XPS M1530 Allen 3
Glen
Dell XPS M1710 Allen 1
Glen
Toshiba M105-S3031 Allen 3
S-7
4. The following monitors located at 5500 Cox Road, Suite M, Glen Allen, VA
23060:
Make Model Location Quantity
Glen
Acer 77e Allen 1
Glen
Dell 1907FP Allen 38
Glen
Dell P780 Allen 2
Glen
Dell P991 Allen 1
Glen
Envision EN-980e Allen 1
Norwood Glen
Micro M19BBK Allen 1
Glen
Viewsonlc A72f Allen 1
Glen
VJewsonic A91f+ Allen 1
Glen
Viewsonic E171fp Allen 1
Glen
Viewsonic E771p Allen 1
Glen
Viewsonic E772p Allen 3
Glen
Viewsonic E773c Allen 1
Glen
Viewsonlc E773s Allen 2
Glen
Viewsonic G220fb Allen 1
Glen
Viewsonic G90F Allen 9
Glen
Viewsonic M992 Allen 1
Glen
Viewsonic PS775 Allen 1
5. The following printers located at 5500 Cox Road, Suite M, Glen Allen, VA
23060:
Make Model Location Quantity
Dell OptiPiex 170L GlenAllen 1
Dell PowerEdge 1800 GlenAllen 1
Dell PowerEdge 2800 GlenAllen 1
Dell PowerEdge 2850 GlenAllen 5
PowerEdge
Dell 600SC GlenAllen 2
S-8
6. The following network equipment located at 5500 Cox Road, Suite M, Glen
Allen, VA 23060:
Make Model Device Type Location Quantity
Glen
Adtran NetVanta 4305 Allen 1
Glen
Belkin F5D 7230-4 Allen
Glen
Cisco 2851 with 2 2MFT-T1 Allen 1
Glen
Cisco 3600 with 31FE-TX Allen 1
Glen
Cisco Catalyst 3500 XL Allen 1
Catalyst 3560 PoE- Glen
Cisco 48 Allen
Glen
Cisco PIX 506E Allen 1
Glen
Cisco PIX 515E Allen
Glen
Dell PowerConnect 2624 Allen 2
Glen
SMC EZ SWitch 1016DT Allen 1
7. The following storage equipment located at 5500 Cox Road, Suite M, Glen Allen,
VA23060:
Device
Make Model Type Controllers Cache Drives Location
PowerVault Tape
Dell TL2000 Library n/a n/a 1 X LT04 GlenAllen
8. The following printers located at 5500 Cox Road, Suite M, Glen Allen, VA
23060:
Make Model Location Quantity
Brother MFC9420CN GlenAllen 1
Dell 3100cn Glen Allen 2
Dell 5100cn Glen Allen 1
HP DeskJet 3650 GlenAllen 1
HP DeskJet 5150 GlenAllen 3
HP DeskJet 5440 Glen Allen 2
HP DeskJet 5650 Glen Allen 1
HP DeskJet 57 40 Glen Allen 1
HP DeskJet 6540 GlenAllen 2
HP Laser Jet 1 020 GlenAllen 1
HP Laser Jet 2600N GlenAllen 1
HP Laser Jet 3015 GlenAllen 1
HP OfficeJet 7410 GlenAllen 1
HP OfficeJet J5780 GlenAllen 1
S-9
HP
HP
OfficeJet K80
OfficeJet v40
GlenAllen
GlenAllen
1
1
9. The following phone systems located at 5500 Cox Road, Suite M, Glen Allen, VA
23060:
Make Model Device Type Location Quantity
Digital Station
Avaya DIGDCPx30 Interface GlenAllen
Digital Station
Avaya DIG DCPxJO VZ Interface Glen Allen
Avaya JP 406DS with I PRI card and I Dual-PRJ card PBX GlenAllen
10. The following phones located at 5500 Cox Road, Suite M, Glen Allen, VA 23060:
Make Model Location Quantity
Glen
Avaya 5410 Allen 39
Glen
Avaya 5420 Allen 4
Glen
Avaya 44120+ Allen 22
11. The following other equipment located at 5500 Cox Road, Suite M, Glen Allen,
VA23060:
Description Make Model Location Quantity
Glen
UPS APC Back-UPS 1000 Allen 57
Glen
UPS APC Back-UPS 650 Allen 1
Glen
UPS APC Smart-UPS RT 3000 Allen 3
Glen
UPS Co next 700AVR Allen 2
Glen
Multi-Function Copier Sharp MX-3501N Allen 1
S-10
SCHEDULE 2.2
Excluded Assets
Excluut:U Lt:ases:
1. Real property lease between PoshTots and Liberty for the property located at
5500 Cox Road, Suite M, Glen Allen, Virginia 23060.
S-11
None.
SCHEDULE 2.3(a)
Liabilities
S-12
SCHEDULE 2.3(b)
Cure Amounts
Contract
1. Agreement between Bank o(America Leasing and
PoshTots, Inc. (Record- 5371; Case 08-13417)
Cure Amount
$312.72
2. Agreement between Paetec fka US LEC Corp and $2,204.51
PoshTots, Inc. (Record- 6992; Case 08-13417)
3. Agreement between PM Building Maintenance Corp $793.88
and PoshTots, Inc. (Case 08-13417)
None.
SCHEDULE 5.2
Title to Purchased Assets
S-14
See Schedule l.l(c)
SCHEDULE 5.3(a)
Tangible Personal ProRefiY
S-15
SCHEDULE 5.3(b)
Defaults by Lessors on Tangible Personal Property
See Schedule l.l(c) and 2.3(b)
S-16
SCHEDULE 5.5
Financial Advisors
Oppenheimer & Co. LLC
S-17
None.
SCHEDULE 5.6
Litigation
S-18
SCHEDULE 5.7
Compliance with Laws
None.
S-19
SCHEDULE 5.8
Pennits
[Parties to provide at closing]
S-20
None.
SCHEDULE 8.6(i)
Affiliate Transactions
S-21
SCHEDULE 10.1(a)
Employees
1. Baker, Jessica L
2. Blankenship, Ronald
3. Cook, Jennie
4. Dengel, Sarah
5. Edmunds, Andrea H
6. Edwards, Susan E
7. Elko, Angie
8. Ellis, Alexander
9. Herring, Cathy S
10. Hetrick, Katherine H
11. Hinson, Jeffrey A
12. Iacone, Kristin
13. J olmson, Stephanie
14. Lippincott, Branin
15. Roberts, Lucy
16. Robertson, Katherine P.
17. Robinson, Troy
18. Taylor, Ashley
19. Welk, Nancy
20. Wiber, Ashley G
S-22
[Redacted from filed copy.]
SCHEDULE 10.2(a)
Benefits
S-23