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Case 2:14-bk-12028-NB Doc 419 Filed 07/11/14 Entered 07/11/14 18:19:53 Desc Main Document Page 1 of 67 Attorney or Party Name, Address, Telephone & FOR COURT USE ONLY FAX Nos., State Bar No. & Email Address J. BENNETT FRIEDMAN, ESQ., State Bar No. 147056 [email protected] STEPHEN F. BIEGENZAHN, ESQ., State Bar No. 60584 [email protected] MICHAEL D. SOBKOWIAK, ESQ., State Bar No. 242718 [email protected] FRIEDMAN LAW GROUP, P.C. 1900 Avenue of the Stars, 11th Floor Los Angeles, California 90067 Telephone: (310) 552-8210 Facsimile: (310) 733-5442 Individual appearing without an attorney Attorney for: HDOS Enterprises UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA - Los Angeles DIVISION In re: CASE NO.: 2:14-bk-12028-NB CHAPTER: 11 HDOS Enterprises, a California corporation, NOTICE OF LODGMENT OF DEBTOR’S ASSET PURCHASE AGREEMENT (WITH EXHIBITS) Debtor(s) PLEASE TAKE NOTE that the document titled ASSET PURCHASE AGREEMENT is attached. This order relates to the motion which is docket numbers 409, 410, 338. This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. December 2012 Page 1 F 9021-1.2.BK.NOTICE.LODGMENT Case 2:14-bk-12028-NB Doc 419 Filed 07/11/14 Entered 07/11/14 18:19:53 Desc Main Document Page 2 of 67 ASSET PURCHASE AGREEMENT Case 2:14-bk-12028-NB Doc 419 Filed 07/11/14 Entered 07/11/14 18:19:53 Desc Main Document Page 3 of 67 EXECUTION VERSION ASSET PURCHASE AGREEMENT THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of this 9th day of July, 2014 (“Execution Date”), by and between HDOS Acquisition, LLC, a Delaware limited liability company (“Buyer”), on the one hand, and HDOS Enterprises, a California corporation, on the other (“Seller”), a debtor and debtor in possession in Bankruptcy Case No. 2:14-bk-12028-NB (the “Case”), pending in the United States Bankruptcy Court, Central District of California (the “Bankruptcy Court”). Buyer and Seller are sometimes referred to collectively as “Parties,” or, as appropriate, a “Party.” RECITALS Seller wishes to sell to Buyer substantially all of its assets at the price and on the other terms and conditions specified in detail below and Buyer wishes to so purchase and acquire such assets from Seller. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows: I. Transfer of Assets A. Purchase and Sale of Assets. On the Closing Date (defined in Section III.A below), in consideration of the covenants, representations and obligations of Buyer hereunder, and subject to the conditions set forth in this Agreement, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all liens, claims, encumbrances and other interests (“Free and Clear”), all of Seller’s businesses and assets (the “Assets”), wherever located, whether or not identified or disclosed on Seller’s books and records, including those assets set forth below, but excluding the “Excluded Assets” as defined below in Section I.B: 1. Leases and Agreements. Seller’s right, title and interest in: (a) All rights as lessee under all unrejected non- residential real property leases, including those non-residential real property leases described on Exhibit A to this Agreement; (b) All rights as lessee under those motor vehicle leases described on Exhibit B to this Agreement and incorporated herein by this reference (collectively, with the non-residential real property leases, the “Leases”); (c) All rights as counter-parties to those certain personal property installment purchase agreements described on Exhibit C to this Agreement and incorporated herein by this reference (the “Installment Agreements”); 151428.5 -1- Case 2:14-bk-12028-NB Doc 419 Filed 07/11/14 Entered 07/11/14 18:19:53 Desc Main Document Page 4 of 67 EXECUTION VERSION (d) Security deposits relating to any of the Leases and catalogued on Exhibit D to this Agreement and other deposits (including, without limitation, all deposits in transit, customer deposits and security deposits for electricity, telephone, utilities or otherwise) and other prepaid charges and expenses of Seller; (e) Seller’s rights in and under that certain license agreement between Seller and Hot Dog on a Stick Fair Company, a California corporation, for the use of Seller’s intellectual property and trade names, a copy of which is attached as Exhibit E (“License Agreement”); and (f) Seller’s rights as franchisor under all unrejected franchise agreements, including those written franchise agreements listed on Exhibit F attached to this Agreement (the “Franchise Agreements”). 2. Personal Property. All furniture, equipment, hardware, fixtures, motor vehicles, documents, copies and tangible embodiments of Intangible Property, and other tangible personal property (collectively, the “Personal Property”), including all property listed in Exhibit G attached to this Agreement. As used in this Agreement, the Personal Property shall also include Seller’s Inventory (defined in Section I.A.4.) on the Closing Date. Notwithstanding the foregoing, the Personal Property shall expressly exclude any Personal Property held by the Debtor pursuant to a lease, rental agreement, contract, license or similar arrangement (“Personal Property Contract”) where Buyer does not assume the underlying Personal Property Contract relating to such personal property at the Closing. 3. Intangible Property. All intangible property (collectively, the “Intangible Property”), including all property listed on Exhibit H and all other intangible property owned or held by Seller, but in all cases only to the extent of Seller’s interest therein, together with all books, records and like items pertaining thereto, including the goodwill of Seller’s business, all franchises, permits, licenses, registrations, qualifications, agreements, waivers, and authorizations from, issued, or granted by any governmental authority, all patents, inventions, copyrights, intellectual property, trade secrets, manufacturing processes and production techniques, trademarks, trade names, and service marks of Seller, all catalogues, customer lists and other data bases, correspondence with present or prospective customers and suppliers, advertising materials, software programs, software code, IP addresses, websites, URLs, domain names, mobile applications, email addresses, and telephone and facsimile numbers identified with the business of Seller as well as other intellectual property of Seller, registrations and applications for registration and renewal of the foregoing, and any past, present or future claims or causes of action arising out of or related to any infringement or misappropriation of any of the foregoing. As used in this Agreement, Intangible Property shall in all events exclude (i) any materials containing privileged communications or information about employees, disclosure of which would violate an employee's reasonable expectation of privacy and any other material which is subject to attorney-client or any other privilege, and (ii) any software or other item of Intangible Property held by the Seller pursuant to a contract where Buyer does not assume the underlying contract relating to such Intangible Property on the Closing Date. 151428.5 -2- Case 2:14-bk-12028-NB Doc 419 Filed 07/11/14 Entered 07/11/14 18:19:53 Desc Main Document Page 5 of 67 EXECUTION VERSION 4. Inventory. All supplies, goods, materials, inventory, work in progress, and stock in trade owned by Seller on the Closing Date (the “Inventory”). 5. Cash, Cash Equivalents and Accounts Receivable. All cash, cash equivalents, bank deposits, accounts receivable, and similar items, other than the Cash Component of the Purchase Price. 6. Claims. All claims, causes of actions, royalty rights, deposits, and rights and claims to refunds (including tax refunds) and adjustments of any kind (including rights to set-off and recoupment), and insurance proceeds, except as set forth in Section I.B.2 and Section I.B.4 below. 7. Third Party License Rights. All licenses to assets and properties of third parties (including licenses with respect to intellectual property rights owned by third parties). 8. Books and Records. All books and records, including general and financial records, budgets, forecasts, regulatory filings, operating data, marketing and sale information, plans, pricing and cost information, and customer lists except as excluded pursuant to the provisions of Section I.A.3. above. 9. Equity and Joint Venture Interests. All securities and other ownership and joint venture interests in other entities (excluding Seller). 10. Prepaid Rent, Taxes and Tax Credits. Prepaid rent and, to the extent transferable, all prepaid taxes and tax credits of Seller. 11. Warranties, Indemnities, Representations and Guarantees. All rights of Seller under or pursuant to all warranties, indemnities representations and guarantees made by suppliers, manufacturers and contractors except as set forth in Section I.B.4. 12. Additional Contracts. Seller shall provide a list of all contracts and unexpired leases of Seller other than the contracts and unexpired leases set forth in this Agreement and the Exhibits hereto on the date hereof and the cure amounts for all such contracts and unexpired leases within five (5) business days after the date hereof or such later date as approved by Buyer (the “Additional Contracts”). Buyer shall provide Seller with written