Exhibit 10.1
ASSET PURCHASE AGREEMENT

 

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ASSET PURCHASE AGREEMENT
Dated as of September 19, 2008
Among
IFL Corp., d/b/a International Fight League,
and
HDNet LLC

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TABLE OF CONTENTS

              Page  
SECTION 1. DEFINITIONS
    1  
 
       
Section 1.1. Definitions
    1  
Section 1.2. Other Definitional and Interpretive Matter
    8  
 
       
SECTION 2. PURCHASE AND SALE
    8  
 
       
Section 2.1. Purchased Assets
    8  
Section 2.2. Excluded Assets
    9  
Section 2.3. Assumed Liabilities
    10  
Section 2.4. Excluded Liabilities
    10  
Section 2.5. Assignments; Cure Amounts
    11  
Section 2.6. Further Assurances
    11  
 
       
SECTION 3. PURCHASE PRICE
    12  
 
       
Section 3.1. Purchase Price
    12  
Section 3.2. Closing Date Payment
    12  
Section 3.3. Allocation of Purchase Price
    12  
Section 3.4. Closing Date
    13  
Section 3.5. Buyer’s Deliveries
    13  
Section 3.6. Seller’s Deliveries
    13  
 
       
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER
    14  
 
       
Section 4.1. Organization of Seller
    15  
Section 4.2. Subsidiaries and Investments
    15  
Section 4.3. Authority of Seller
    15  
Section 4.4. Assumed Contracts and Cure Costs
    15  
Section 4.5. Intellectual Property
    16  
Section 4.6. Title to Purchased Assets
    16  
Section 4.7. Proceedings
    16  
Section 4.8. Consent and Approvals
    17  
Section 4.9. Accuracy of Information Furnished
    17  
 
       
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BUYER
    17  
 
       
Section 5.1. Organization and Authority of Buyer
    17  
Section 5.2. No Finder
    18  
Section 5.3. Ownership of Seller
    18  

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              Page  
SECTION 6. ACTION PRIOR TO THE CLOSING DATE
    18  
 
       
Section 6.1. Investigation of the Business by Buyer
    18  
Section 6.2. Third Party Consents
    18  
Section 6.3. Governmental Approvals
    18  
Section 6.4. Conduct of Business Prior to the Closing Date
    20  
Section 6.5. Notification of Breach; Disclosure
    20  
Section 6.6. Insurance
    21  
Section 6.7. Bankruptcy Court Approval
    21  
Section 6.8. Bankruptcy Filings
    21  
 
       
SECTION 7. ADDITIONAL AGREEMENTS
    22  
 
       
Section 7.1. Taxes
    22  
Section 7.2. Adequate Assurances Regarding Assumed Contracts
    23  
Section 7.3. Certain Actions
    23  
Section 7.4. Reasonable Access to Records and Certain Personnel
    23  
 
       
SECTION 8. CONDITIONS TO CLOSING
    24  
 
       
Section 8.1. Conditions to Obligations of Each Party
    24  
Section 8.2. Conditions to Obligations of Buyer
    24  
Section 8.3. Conditions to Obligations of Seller
    25  
 
       
SECTION 9. TERMINATION
    25  
 
       
Section 9.1. Termination
    25  
Section 9.2. Break Up Fee
    26  
Section 9.3. Effect of Termination
    26  
 
       
SECTION 10. INDEMNIFICATION
    27  
 
       
Section 10.1. No Survival of Representations and Warranties
    27  
 
       
SECTION 11. GENERAL PROVISIONS
    27  
 
       
Section 11.1. Confidential Nature of Information
    27  
Section 11.2. No Public Announcement
    27  
Section 11.3. Notices
    28  
Section 11.4. Successors and Assigns
    29  
Section 11.5. Entire Agreement; Amendments; Disclosure Schedules
    29  
Section 11.6. Waivers
    29  
Section 11.7. Expenses
    30  
Section 11.8. Partial Invalidity
    30  
Section 11.9. Execution in Counterparts
    30  
Section 11.10. Governing Law
    30  
Section 11.11. No Third Party Beneficiaries
    31  

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SCHEDULES

      Section   Schedule
2.1(a)  
  Equipment
2.1(b)
  Assumed Contracts and Cure Costs
2.1(c)
  Intellectual Property
2.2
  Excluded Assets
4.7
  Proceedings
4.8
  Consents and Approvals
5.2
  Brokers

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EXHIBIT LIST
EXHIBIT A     -     FORM OF ASSUMPTION AND ASSIGNMENT AGREEMENT
EXHIBIT B     -     BIDDING PROCEDURES
EXHIBIT C     -     BIDDING PROCEDURES ORDER
EXHIBIT D     -     FORM OF BILL OF SALE
EXHIBIT E     -     FORM OF SALE ORDER
EXHIBIT F     -     FORM OF NAME USE AGREEMENT

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ASSET PURCHASE AGREEMENT
          This Asset Purchase Agreement (this “Agreement”) is made as of August
___, 2008, by and among IFL Corp., d/b/a International Fight League, a Delaware
corporation (“Seller”) and HDNet LLC, a Delaware limited liability company
(“Buyer”). Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in Section 1.1.
          WHEREAS, Seller operated a professional mixed martial arts sports
league (the “Business”);
          WHEREAS, on September 15, 2008 (the “Petition Date”), the Seller filed
a voluntary petition for relief (the “Filing”) commencing a case under chapter
11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United
States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”);
          WHEREAS, Seller desires to sell to Buyer, all of the Purchased Assets,
and Buyer desires to purchase from Seller the Purchased Assets, and assume the
Assumed Liabilities, upon the terms and conditions hereinafter set forth;
          WHEREAS, the Parties intend to effectuate the transactions
contemplated by this Agreement through a sale of the Purchased Assets pursuant
to section 363 of the Bankruptcy Code; and
          WHEREAS, the execution and delivery of this Agreement and Seller’s
ability to consummate the transactions set forth in this Agreement are subject,
among other things, to the entry of the Sale Order.
          NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties
and covenants herein contained, the Parties agree as follows:
SECTION 1.
DEFINITIONS
Section 1.1. Definitions.
          In this Agreement, the following terms have the meanings specified or
referred to in this Section 1.1 and shall be equally applicable to both the
singular and plural forms.
          “Affiliate” means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, “control” (including, with its
correlative meanings, “controlled by” and “under common control with”) shall
mean possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of such
Person.
          “Aggregate Cash Consideration” has the meaning specified in
Section 3.1.
          “Agreement” has the meaning specified in the preamble.
          “Allocation Schedule(s)” has the meaning specified in Section 3.3.

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          “Alternative Transaction” has the meaning specified in Section 9.1.
          “Ancillary Documents” means the Bill of Sale, Assumption and
Assignment Agreement, Assignment of Patents, Assignment of Trademarks,
Assignment of Copyrights, Assignment of Domain Names, Name Use Agreement, and
each other agreement, document or instrument (other than this Agreement)
executed and delivered by the parties hereto in connection with the consummation
of the transactions contemplated by this Agreement.
          “Assignment of Copyrights” has the meaning specified in
Section 3.6(b).
          “Assignment of Domain Names” has the meaning specified in
Section 3.6(b).
          “Assignment of Trademarks” has the meaning specified in
Section 3.6(b).
          “Assumed Contracts” has the meaning specified in Section 2.1(b).
          “Assumed Liabilities” has the meaning specified in Section 2.3.
          “Assumption and Assignment Agreement” means the Assumption and
Assignment Agreement in substantially the form of Exhibit A.
          “Auction” has the meaning specified in Section 6.7(a).
          “Avoidance Actions” means any and all claims for relief of Seller
under chapter 5 of the Bankruptcy Code.
          “Bankruptcy Case” means the cases commenced by the Seller under
chapter 11 of the Bankruptcy Code, styled In re IFL Corp., Case No. 08-13589
(MG) and pending before the Bankruptcy Court.
          “Bankruptcy Code” means Title 11 of the United States Code,
Sections 101 et. seq.
          “Bankruptcy Court” has the meaning specified in the recitals.
          “Bidding Procedures” means the bidding procedures in substantially the
form attached hereto as Exhibit B, together with such changes thereon, if any,
as shall have been required by the Bankruptcy Court or agreed to by the Parties.
          “Bidding Procedures Order” means an order of the Bankruptcy Court, in
substantially the form attached hereto as Exhibit C, approving the Bidding
Procedures and the amount, timing and terms of payment of the Break-Up Fee as
set forth herein.
          “Bill of Sale” means the Bill of Sale substantially in the form of
Exhibit D.
          “Break-Up Fee” has the meaning specified in 9.2(a).
          “Business” has the meaning specified in the recitals.
          “Business Day” means any day of the year on which national banking
institutions in New York are open to the public for conducting business and are
not required or authorized to close.
          “Buyer” has the meaning specified in the preamble.

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          “Closing” has the meaning specified in Section 3.4.
          “Closing Date” has the meaning specified in Section 3.4.
          “Code” means the United States Internal Revenue Code of 1986, as
amended.
          “Computers” means all computer equipment and hardware, including,
without limitation, all central processing units, terminals, disk drives, tape
drives, electronic memory units, printers, keyboards, screens, peripherals (and
other input/output devices), modems and other communication controllers, and any
and all parts and appurtenances thereto, together with all intellectual property
used in connection with the operation of such computer equipment, including,
without limitation, all software and rights under any licenses related to such
use.
          “Contract” means any agreement, contract, obligation, promise,
instrument, undertaking or other arrangements (whether written or oral), and any
amendment thereto, that is legally binding, other than a Lease, to which Seller
is party.
          “Copyrights” means all United States and foreign copyrights and
copyrightable subject matter, whether registered or unregistered, including all
United States copyright registrations and applications for registration and
foreign equivalents, all moral rights, all common-law copyright rights, and all
rights to register and obtain renewals and extensions of copyright
registrations, together with all other copyright rights accruing by reason of
any international copyright convention.
          “Cure Costs” has the meaning specified in Section 2.5(a).
          “Disclosure Schedules” means the disclosure schedules attached hereto
that Seller has prepared and delivered to Buyer pursuant to the terms of this
Agreement, setting forth information regarding the Business, the Purchased
Assets, the Assumed Liabilities and other matters with respect to Seller as set
forth therein.
          “Documents” means all books, records, files, invoices, inventory
records, product specifications, advertising materials, customer lists, cost and
pricing information, supplier lists, business plans, catalogs, customer
literature, quality control records and manuals, research and development files,
records and laboratory books and credit records of customers (including all data
and other information stored on discs, tapes or other media) to the extent used
in or to the extent relating to the assets, properties, including the
Intellectual Property, business or operations of the Business.
          “Domain Names” means any alphanumeric designation registered with or
assigned by a domain name registrar, registry or domain name registration
authority as part of an electronic address on the Internet.
          “Encumbrance” means any interest, charge, lien, claim (as defined in
section 101(5) of the Bankruptcy Code), mortgage, sublease, hypothecation, deed
of trust, pledge, security interest, option, right of use, first offer or first
refusal, easement, servitude, restrictive covenant, encroachment, encumbrance,
or other similar restriction of any kind.
          “Environmental Laws” means all Legal Requirements and programs
(including those promulgated or sponsored by industry associations, insurance
companies, and risk management companies) concerning or relating to pollution or
protection of the environment, including those relating to the presence, use,
manufacturing, refining, production, generation, handling, transportation,
treatment, recycling, transfer, storage, disposal, distribution, importing,
labeling, testing, processing, discharge,

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release, threatened release, control, or other action or failure to act
involving cleanup of any hazardous materials, substances or wastes, chemical
substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise, or
radiation, each as amended and as now or hereafter in effect and in effect at
Closing.
          “Equipment” means all furniture, fixtures, equipment, Computers,
machinery, apparatus, appliances, spare parts, signage, supplies, vehicles,
forklifts and all other tangible personal property of every kind and description
in which Seller has an interest.
          “Excluded Assets” has the meaning specified in Section 2.2.
          “Excluded Liabilities” has the meaning specified in Section 2.4.
          “Filing” has the meaning specified in the recitals.
          “Final Order” means an action taken or Order issued by the applicable
Governmental Authority as to which: (i) no request for stay of the action or
Order is pending, no such stay is in effect, and, if any deadline for filing any
such request is designated by statute or regulation, it is passed, including any
extensions thereof; (ii) no petition for rehearing or reconsideration of the
action or Order, or protest of any kind, is pending before the Governmental
Authority and the time for filing any such petition or protest is passed;
(iii) the Governmental Authority does not have the action or Order under
reconsideration or review on its own motion and the time for such
reconsideration or review has passed; and (iv) the action or Order is not then
under judicial review, there is no notice of appeal or other application for
judicial review pending, and the deadline for filing such notice of appeal or
other application for judicial review has passed, including any extensions
thereof.
          “GAAP” means generally accepted accounting principles in the United
States.
          “Governmental Authority” means any federal, state, local or foreign,
governmental entity or any subdivision, agency, instrumentality, authority,
department, commission, board, bureau, official or other regulatory,
administrative or judicial authority thereof or any federal, state, local or
foreign court, tribunal or arbitrator or any self regulatory organization,
agency or commission.
          “Hazardous Materials” means any pollutant, contaminant or waste
regulated by or subject to liability under any Environmental Laws, including
without limitation any substance defined as a “hazardous waste,” “hazardous
substance,” “pollutant” or “contaminant” under any Environmental Law, including
the Comprehensive Environmental Response Compensation and Liability Act (42
U.S.C. § 9601 et. seq.) and/or the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et. seq.
          “Indebtedness” of any Person means, without duplication, (i) the
principal of and premium (if any) in respect of (A) indebtedness of such Person
for borrowed money and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which 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 current liabilities arising
in the Ordinary Course of Business (other than the current liability portion of
any indebtedness for borrowed money)); (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 such Person under interest rate or currency swap transactions (valued at the
termination value thereof); (vi) the liquidation value, accrued and unpaid
dividends; prepayment or redemption premiums and penalties (if any), unpaid fees
or expenses and other monetary obligations in respect of any redeemable
preferred stock of such

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Person; (vii) all obligations with respect to any factoring programs of Seller;
(viii) all obligations of the type referred to in clauses (i) through (vii) of
any Persons for the payment of which such Person is responsible or liable,
directly or indirectly, as obligor, guarantor, surety or otherwise, including
guarantees of such obligations; and (ix) 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).
          “Independent Accounting Firm” has the meaning specified in
Section 3.3.
          “Intellectual Property” means all intellectual property rights of any
kind owned, used, held for use, or licensed (as licensor or licensee) by Seller,
including all Software, Copyrights, Patents, Trademarks, Trade Secrets, Domain
Names, all rights to privacy and personal information, and all rights and
remedies related thereto (including the right to sue for and recover damages,
profits and any other remedy in connection therewith) for past, present or
future infringement, misappropriation or other violation relating to any of the
foregoing.
          “IRS” means the United States Internal Revenue Service.
          “Legal Requirement” means any federal, state, provincial, local,
municipal, foreign, international, multinational, or other administrative Order,
constitution, law, ordinance, principle of common law, regulation, statute or
treaty.
          “Liability” means any debt, loss, claim (as defined in section 101(5)
of the Bankruptcy Code), damage, demand, fine, judgment, penalty, liability or
obligation (whether direct or indirect, known or unknown, absolute or
contingent, asserted or unasserted, accrued or unaccrued, matured or unmatured,
determined or determinable, liquidated or unliquidated, or due or to become due,
and whether in contract, tort, strict liability, successor liability or
otherwise), and including all costs and expenses relating thereto (including
fees, discounts and expenses of legal counsel, experts, engineers and
consultants and costs of investigations).
          “Material Adverse Effect” means any fact, condition, change,
violation, inaccuracy, circumstance, effect or event, individually or in the
aggregate, that has, or would be reasonably expected to have, a material adverse
effect on the property, business, operations, assets (tangible and intangible),
or condition (financial or otherwise) of the Business or the Purchased Assets or
the ability of Seller to perform any of its respective material obligations
under this Agreement or the Ancillary Agreements to which it is a party, which
occurs other than by reason of the filing of the Bankruptcy Case or operating in
bankruptcy.
          “Name Use Agreement” means the Name Use Agreement in substantially the
form of Exhibit F.
          “Order” means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award of a Governmental Authority.
          “Ordinary Course of Business” means the ordinary and usual course of
day-to-day operations of the Business (including acts and omissions of Seller in
the ordinary and usual course) through the date hereof, consistent with past
practice and operations in a bankruptcy.
          “Parent” has the meaning specified in Section 2.6(c).
          “Party” or “Parties” means, individually or collectively, Buyer and
each Seller.

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          “Patents” means United States and foreign patents (including
certificates of invention and other patent equivalents), patent applications,
provisional applications and patents issuing therefrom, as well as any
continuations, continuations-in-part, divisions, extensions, reexaminations,
reissues, renewals, patent disclosures, technology, inventions (whether or not
patentable or reduced to practice) or improvements thereto.
          “Permitted Encumbrances” means (i) Encumbrances that constitute
Assumed Liabilities, (ii) statutory liens for current property Taxes and
assessments not yet due and payable, including, without limitation, liens for ad
valorem Taxes and statutory liens not yet due and payable arising other than by
reason of any default by Seller that, in each case, are not material to the
Business or the value of the Purchased Assets, and (iii) landlords’, carriers’,
warehousemen’s, mechanics’, suppliers’, materialmen’s, repairmen’s liens or
other like Encumbrances arising in the Ordinary Course of Business that, in each
case, are not material to the Business with respect to amounts not yet overdue,
provided, that, in each case enumerated in this definition, such Encumbrance
shall only be a Permitted Encumbrance if it cannot be satisfied solely through
the payment of money or otherwise removed, discharged, released or transferred,
as the case may be, pursuant to section 363(f) of the Bankruptcy Code or
otherwise.
          “Person” means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization, Governmental Authority or other entity.
          “Petition Date” has the meaning specified in the recitals.
          “Proceeding” means any action, arbitration, audit, claim, cause of
action, hearing, investigation, litigation, or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Authority or arbitrator.
          “Products” means any and all products and services currently marketed
or sold by Seller.
          “Purchase Price” has the meaning specified in Section 3.1.
          “Purchased Assets” has the meaning specified in Section 2.1.
          “Representative” means with respect to a particular Person, any duly
authorized director, officer, employee, agent, consultant, advisor or other
representative of such Person, including legal counsel, accountants and
financial advisors.
          “Sale Hearing” means the hearing conducted by the Bankruptcy Court to
approve the transactions contemplated by this Agreement or a competing
transaction.
          “Sale Motion” means the motion, in form and substance satisfactory to
Buyer in its sole discretion, filed by Seller pursuant to, inter alia, sections
363 and 365 of the Bankruptcy Code to secure entry of the Sale Order by the
Bankruptcy Court.
          “Sale Order” means an Order of the Bankruptcy Court in the form
attached hereto as Exhibit E, pursuant to, inter alia, sections 105, 363 and 365
of the Bankruptcy Code (i) authorizing and approving, inter alia, the sale of
the Purchased Assets to Buyer on the terms and conditions set forth herein free
and clear of all Liabilities and Encumbrances (other than Permitted
Encumbrances), the assumption and assignment of the Assumed Liabilities, and the
assumption and assignment of the

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Assumed Contracts to Buyer and (ii) containing certain findings of facts,
including, without limitation, a finding that Buyer is a good faith purchaser
pursuant to section 363(m) of the Bankruptcy Code.
          “Seller” has the meaning specified in the preamble.
          “Software” means all computer software programs (whether in source
code, object code, or other form) and systems, databases and platforms owned,
licensed or used by Seller, including all databases, compilations, tool sets,
compilers, higher level or “proprietary” languages, related documentation,
technical manuals and materials, and any licenses to use or other rights
relating to the foregoing.
          “Subsidiary” means any Person of which (i) a majority of the
outstanding share capital, voting securities or other equity interests are
owned, directly or indirectly, by Seller or (ii) Seller is entitled, directly or
indirectly, to appoint a majority of the board of directors or managers or
comparable supervisory body of such Person.
          “Successful Bidder” has the meaning specified in the Sale Order.
          “Tax” or “Taxes” (and with correlative meaning, “Taxable” and
“Taxing”) means (i) any federal, state, provincial, local, foreign or other
income, alternative, minimum, add-on minimum, accumulated earnings, personal
holding company, franchise, capital stock, net worth, capital, profits,
intangibles, windfall profits, gross receipts, value added, sales, use, goods
and services, excise, customs duties, transfer, conveyance, mortgage,
registration, stamp, documentary, recording, premium, severance, environmental,
natural resources, real property, personal property, ad valorem, intangibles,
rent, occupancy, license, occupational, employment, unemployment insurance,
social security, disability, workers’ compensation, payroll, health care,
withholding, estimated or other similar taxes, duty, levy or other governmental
charge or assessment or deficiencies thereof (including all interest and
penalties thereon and additions thereto whether disputed or not) and (ii) any
transferee liability in respect of any items described in clause (i) above.
          “Tax Return” means any return, report or similar statement required to
be filed with respect to any Taxes (including any attached schedules), including
any information return, claim for refund, amended return or declaration of
estimated Tax.
          “Third Party Consents” has the meaning specified in Section 4.8.
          “Trademarks” means United States, state and foreign trademarks,
service marks, logos, slogans, trade dress and trade names (including all
assumed or fictitious names under which the Business is conducted), and any
other indicia of source of goods and services, designs and logotypes related to
the above, in any and all forms, whether registered or unregistered, and
registrations and pending applications to register the foregoing (including
intent to use applications), and all goodwill related to or symbolized by the
foregoing.
          “Trade Secrets” means confidential or proprietary information and
trade secrets (including, without limitation, ideas, research and development,
know-how, formulae, compositions, processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and cost
information, and business and marketing plans and proposals).
          “Transfer Taxes” has the meaning specified in Section 7.1(b).

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Section 1.2. Other Definitional and Interpretive Matter.
     Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:
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. 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 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 of this Agreement
into Articles, Sections and other subdivisions and the insertion of headings are
for convenience of reference only and shall not affect or be utilized in
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,” “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.
     (viii) No Strict Construction. The Parties participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the Parties 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.
SECTION 2.
PURCHASE AND SALE
Section 2.1. Purchased Assets.
          Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, Seller shall sell, transfer, assign, convey and
deliver, or cause to be sold, transferred, assigned, conveyed and delivered, to
Buyer, and Buyer shall purchase, free and clear of all Encumbrances (other than
Permitted Encumbrances), all right, title and interest of Seller in,

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to or under all of the properties and assets of Seller (other than the Excluded
Assets) of every kind and description, wherever located, real, personal or
mixed, tangible or intangible, owned, leased, licensed, used or held for use in
or relating to the Business (herein collectively called the “Purchased Assets”),
including, but not limited to, all right, title and interest of each Seller in,
to or under:
          (a) all Equipment listed on Schedule 2.1(a);
          (b) all Contracts listed or described on Schedule 2.1(b) (the “Assumed
Contracts”);
          (c) all Intellectual Property (including all goodwill associated
therewith) including, without limitation, Seller’s film, video and image library
listed or described on Schedule 2.1(c);
          (d) all Documents related to the Purchased Assets;
          (e) all goodwill and other intangible assets associated with the
Business or the Purchased Assets;
          (f) any proprietary rights in Internet protocol addresses, ideas,
concepts, methods, processes, formulae, models, methodologies, algorithms,
reports, data, customer lists, mailing lists, business plans, market surveys,
market research studies, websites, information contained on drawings and other
documents, information relating to research, development or testing, and
documentation and media constituting, describing or relating to the Intellectual
Property, including memoranda, manuals, technical specifications and other
records wherever created throughout the world, but excluding reports of
accountants, investment bankers, crisis managers, turnaround consultants and
financial advisors or consultants; and
          (g) all advertising, marketing and promotional materials, studies,
reports and all other printed or written materials relating to the Business;
provided, however, none of the Parties hereto intends that Buyer, or any of its
Affiliates, shall be deemed to be a successor to Seller with respect to
Purchased Assets; provided, further, that notwithstanding the foregoing or
anything to the contrary contained herein, Buyer reserves the right, in its sole
discretion, to amend and or supplement Schedule 2.1(b) (to add or remove any
contracts that are to be assigned) and/or Schedule 2.1(c) (to remove any of the
Intellectual Property) at any time prior to Closing.
Section 2.2. Excluded Assets.
          Nothing herein contained shall be deemed to sell, transfer, assign or
convey the Excluded Assets to Buyer, and Seller shall retain all right, title
and interest to, in and under the Excluded Assets. For all purposes of and under
this Agreement, the term “Excluded Assets” shall mean all assets which are not
Purchased Assets and which are set forth on Schedule 2.2.

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Section 2.3. Assumed Liabilities.
          Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date, Buyer shall execute and deliver to Seller the
Assumption and Assignment Agreement pursuant to which Buyer shall assume and
agree to discharge, when due (in accordance with their respective terms and
subject to the respective conditions thereof), the Cure Costs (defined below),
if any, under the Assumed Contracts (collectively the “Assumed Liabilities”).
Section 2.4. Excluded Liabilities.
          Notwithstanding any provision in this Agreement to the contrary, Buyer
shall not assume and shall not be obligated to assume or be obliged to pay,
perform or otherwise discharge any Liability of Seller, and Seller shall be
solely and exclusively liable with respect to all Liabilities of Seller, other
than the Assumed Liabilities (collectively the “Excluded Liabilities”). For the
avoidance of doubt, the Excluded Liabilities include, but are not limited to,
the following:
          (a) any Liability of Seller, arising out of, or relating to, this
Agreement or the transactions contemplated by this Agreement, whether incurred
prior to, at or subsequent to the Closing Date, including, without limitation,
all finder’s or broker’s fees and expenses and any and all fees and expenses of
any Representatives of Seller;
          (b) other than as specifically set forth herein, any Liability
relating to (x) events or conditions occurring or existing in connection with,
or arising out of, the Business as operated prior to the Closing Date, or
(y) the ownership, possession, use, operation or sale or other disposition prior
to the Closing Date of any Purchased Assets (or any other assets, properties,
rights or interests associated, at any time prior to the Closing Date, with the
Business);
          (c) any Liability for Taxes (i) attributable to periods or portions
thereof as determined pursuant to Section 7.1(a) ending on or prior to the
Closing Date, (ii) any liability or obligation of Seller, or any member of any
consolidated, affiliated, combined or unitary group of which Seller is or has
been a member, for Taxes and (iii) Taxes of any other Person pursuant to an
agreement or otherwise;
          (d) any Liability incurred by Seller or their respective directors,
officers, stockholders, agents or employees (acting in such capacities) after
the Closing Date;
          (e) any Liability of Seller to any Person on account of any Order or
Proceeding;
          (f) any Liability relating to or arising out of the ownership or
operation of an Excluded Asset;
          (g) any Liability or obligation under any Assumed Contract that is
required to be set forth on Schedule 2.1(b) but is not set forth therein;
          (h) other than as specifically set forth herein, any liability or
obligation of

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Seller under any Indebtedness, including, without limitation, any Indebtedness
owed to any stockholder or other Affiliate of Seller, and any Contract
evidencing any such financing arrangement;
          (i) any liability or obligation, whether known or unknown, (i) arising
under Environmental Laws attributable to or incurred as a result of any acts,
omissions, or conditions first occurring or in existence as of or prior to the
Closing Date, including, but not limited to, any liability or obligation with
respect to the release, handling, discharge, treatment, storage, generation,
disposal, or presence of Hazardous Materials at any location, (ii) claims
relating to employee health and safety, including claims for injury, sickness,
disease or death of any Person or (iii) compliance with any Legal Requirement
relating to any of the foregoing; and
          (j) other than as specifically set forth herein, fees or expenses of
Seller incurred with respect to the transactions contemplated herein.
Section 2.5. Assignments; Cure Amounts.
          Seller shall transfer and assign all Assumed Contracts to Buyer, and
Buyer shall assume all Assumed Contracts from Seller, as of the Closing Date
pursuant to section 365 of the Bankruptcy Code and the Sale Order. In connection
with such assignment and assumption, Buyer shall cure all defaults under such
Assumed Contracts to the extent required by section 365(b) of the Bankruptcy
Code pursuant to the Sale Order (such amounts, the “Cure Costs”).
          The Sale Order shall provide that as of the Closing, Seller shall
assign to Buyer the Assumed Contracts and the Assumed Contracts shall be
identified by the name and date of the Assumed Contract, the other party to the
Assumed Contract and the address of such party for notice purposes, all included
on an exhibit attached to either the motion filed in connection with the Sale
Order or a motion for authority to assume and assign such Assumed Contracts.
Such exhibit shall also set forth the amounts necessary to cure any defaults
under each of the Assumed Contracts as determined by Seller based on Seller’
books and records or as otherwise determined by the Bankruptcy Court.
          In the case of Contracts and other commitments included in the
Purchased Assets that cannot be transferred or assigned effectively without the
consent of third parties, which consent has not been obtained prior to the
Closing (after giving effect to the Sale Order and the Bankruptcy Code), Seller
shall, subject to any approval of the Bankruptcy Court that may be required and
the terms set forth in Section 6.3, cooperate with Buyer in endeavoring to
obtain such consent.
Section 2.6. Further Assurances.
          (a) At the Closing, and at all times thereafter as may be necessary,
Seller and Buyer shall execute and deliver such other instruments of transfer as
shall be reasonably necessary to vest in Buyer title to the Purchased Assets
free and clear of all Encumbrances (other than Permitted Encumbrances), and such
other instruments as shall be reasonably necessary to evidence the assignment by
Seller and the assumption by Buyer or its designee of the Assumed Liabilities,
including the Assumed Contracts. Seller and Buyer shall cooperate with one
another to execute and deliver such other documents and instruments as may be
reasonably required to

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carryout the transactions contemplated hereby.
          (b) At the Closing, and at all times thereafter as may be necessary,
Seller shall, at the reasonable request of Buyer, execute, deliver, and file, or
cause to be executed, delivered, and filed, such other instruments of conveyance
and transfer and take such other actions as Buyer may reasonably request, in
order to more effectively consummate the transactions contemplated by this
Agreement and to vest in Buyer good and marketable title to the Intellectual
Property included in the Purchased Assets, including, without limitation,
executing, filing, and recording, with all appropriate intellectual property
registration authorities and other relevant entities, all assignment instruments
and other filings that are necessary to correctly record the prior chain of
title with respect to ownership of the Intellectual Property included in the
Purchased Assets.
          (c) From and after the Closing, International Fight League, Inc.
(“Parent”), the sole equity security owner of Seller, shall be entitled to
retain and utilize, without license, royalty, fee, assessment or other charge,
the mark “International Fight League” solely for use as Parent’s corporate name
until Parent becomes engaged in an active trade or business; provided that, from
the Closing, Parent shall utilize the mark “International Fight League” solely
for general corporate purposes and not in any trade or business in accordance
with the terms of the Name Use Agreement.
SECTION 3.
PURCHASE PRICE
Section 3.1. Purchase Price.
          Subject to the terms and conditions set forth in this Agreement and in
reliance upon the representations and warranties of the Parties set forth
herein, at the Closing, the purchase price to be paid by Buyer to the Seller in
exchange for the Purchased Assets shall be (i) $650,000.00 in immediately
available funds (the “Aggregate Cash Consideration”), and (ii) the assumption by
Buyer of the Assumed Liabilities (collectively, the “Purchase Price”), payable
at the Closing.
Section 3.2. Closing Date Payment.
          At the Closing, Buyer shall pay to Seller by wire transfer of
immediately available funds, to the account(s) designated by Seller, the
Aggregate Cash Consideration. Other than the Assumed Liabilities, Buyer shall
have no obligation to pay or otherwise satisfy any Claim (as defined in the
Bankruptcy Code) of creditors (including, without limitation, mechanics,
suppliers and material men) against Seller or the Property or any affiliate of
Seller.
Section 3.3. Allocation of Purchase Price.
          As soon as practicable after the date hereof, Buyer shall deliver to
Seller for Seller’s review and approval allocation schedule(s) (the “Allocation
Schedule(s)”) allocating the Purchase Price in accordance with the percentages
set forth on the Allocation Schedule(s), including the Assumed Liabilities that
are liabilities for federal income Tax purposes, among the Purchased Assets. The
Allocation Schedule(s) shall be reasonable and shall be prepared in accordance
with section 1060 of the Code and the regulations thereunder. Seller agree that,
following their approval of the Allocation Schedule(s), such approval not to be
unreasonably withheld or delayed, Seller shall sign the Allocation Schedule(s)
and return an executed copy thereof to Buyer, it being understood and agreed
that on or before the twentieth (20th) Business Day following their receipt of
the Allocation Schedule(s) from Buyer

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as herein provided, Seller shall either deliver an executed copy thereof to
Buyer or, in the event that Seller shall have objections to all or any portion
of the Allocation Schedule(s), Seller shall deliver to Buyer a written objection
to such Allocation Schedule(s), which written objection shall set forth in
reasonable detail the basis for the objections of Seller thereto. In the event
that Seller shall deliver a written objection to the Allocation Schedule(s),
Seller and Buyer shall thereafter work in good faith for a period of fifteen
(15) Business Days to resolve any and all objections set forth therein, and upon
the resolution of all such objections, Seller and Buyer shall execute and
deliver to the other Party or Parties a signed copy of such agreed upon
Allocation Schedule(s). In the event that Buyer and Seller are unable to resolve
such dispute within such fifteen (15) Business Day period, Buyer and Seller
shall jointly retain a nationally recognized firm of independent certified
public accountants mutually acceptable to Buyer and the Seller (an “Independent
Accounting Firm”) to resolve the disputed items and the determinations of such
Independent Accounting Firm shall be conclusive and binding upon the Parties for
the purposes of this Section 3.3. Upon resolution of the disputed items, the
allocation reflected on the Allocation Schedule(s) shall be adjusted to reflect
such resolution. The costs, fees and expenses of the Independent Accounting Firm
shall be borne equally by Buyer and Seller. Buyer and Seller will each file IRS
Form 8594, and all Tax Returns, in accordance with the Allocation Schedule(s)
that are agreed upon by the Parties pursuant to the terms of this Section 3.3.
Buyer, on the one hand, and Seller, on the other hand, each agrees to provide
the other promptly with any other information required to complete Form 8594.
Section 3.4. Closing Date.
          Upon the terms and conditions set forth in this Agreement the closing
of the sale of the Purchased Assets and the assumption of the Assumed
Liabilities contemplated hereby (the “Closing”) shall be effected by electronic
delivery and shall be deemed to take place at the offices of Lowenstein Sandler
PC, counsel for the Seller, at 1251 Avenue of the Americas, 18th Floor, New
York, New York 10022, as promptly as practicable, and at no time later than the
third Business Day following the date on which the conditions set forth in
Section 8 have been satisfied or waived (other than the conditions which by
their nature are to be satisfied at the Closing, but subject to the satisfaction
or waiver of such conditions), or at such other place or time as Buyer and
Seller may mutually agree. The date and time at which the Closing actually
occurs is hereinafter referred to as the “Closing Date.”
Section 3.5. Buyer’s Deliveries.
          At or prior to the Closing, Buyer shall deliver to Seller:
          (a) the Assumption and Assignment Agreement, and each other Ancillary
Document to which Buyer is a party, duly executed by Buyer;
          (b) the Aggregate Cash Consideration;
          (c) the officer’s certificates required to be delivered pursuant to
Sections 8.3(a) and (b); and
          (d) such other assignments and other good and sufficient instruments
of assumption and transfer, in form reasonably satisfactory to Seller, as Seller
may reasonably request to transfer and assign the Assumed Liabilities to Buyer.
Section 3.6. Seller’s Deliveries.
          At or prior to the Closing, Seller shall deliver to Buyer:
          (a) the Bill of Sale and Assumption and Assignment Agreement and each

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other Ancillary Document to which Seller is a party, duly executed by such
Seller;
          (b) instruments of assignment of the, Trademarks (the “Assignment of
Trademarks”), Copyrights (the “Assignment of Copyrights”) and Domain Names (the
“Assignment of Domain Names”) that are owned by Seller and included in the
Purchased Assets, if any, including all Trademarks, Copyrights and Domain Names
listed on Schedule 2.1(c) hereto, duly executed by Seller, in form for
recordation with the appropriate Governmental Authorities, in form reasonably
acceptable to the parties, and any other assignments or instruments with respect
to any Intellectual Property included in the Purchased Assets for which an
assignment or instrument is required to assign, transfer and convey such assets
to Buyer;
          (c) evidence of receipt of the Third Party Consents to the extent such
consents are not provided for or satisfied by the Sale Order;
          (d) a copy of the final Sale Order;
          (e) the officer’s certificates required to be delivered pursuant to
Sections 8.2(a) and (b);
          (f) certificates executed by Seller, in the form prescribed under
Treasury Regulation Section 1.1445-2(b), that Seller is not a foreign person
within the meaning of Section 1445(f)(3) of the Code;
          (g) a certificate of good standing, or equivalent document as
certified by the applicable Government Authority;
          (h) a certificate of an authorized Person of Seller, dated the Closing
Date, in form and substance reasonably satisfactory to Buyer, as to (i) no
amendments to the certificate of formation (or equivalent formation documents)
delivered pursuant to this Section 3.6, (ii) Seller authorization to execute and
perform its obligations under this Agreement and the Ancillary Documents to
which Seller are a party; and (iii) incumbency and signatures of the authorized
Persons of Seller executing this Agreement such Ancillary Documents;
          (i) all instruments and documents necessary to release any and all
Encumbrances (other than Permitted Encumbrances), including appropriate UCC
financing statement amendments (termination statements); and
          (j) such other bills of sale, deeds, endorsements, assignments and
other good and sufficient instruments of conveyance and transfer, in form
reasonably satisfactory to Buyer, as Buyer may reasonably request to vest in
Buyer all the right, title and interest of Seller in, to or under any or all the
Purchased Assets.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
          As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller represents and warrants
to Buyer and agrees as follows:

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Section 4.1. Organization of Seller.
          Seller is an entity duly organized, validly existing and in good
standing under the laws of the State of Delaware. Seller is in good standing in
each of the jurisdictions in which the ownership or leasing of its properties or
the conduct of its businesses requires such qualification, except where failure
to so qualify or be in good standing would not reasonably be expected to have a
Material Adverse Effect. Seller has full corporate or similar power and
authority to own or lease and to operate and use the Purchased Assets and to
carry on the Business as now conducted.
Section 4.2. Subsidiaries and Investments.
          Seller does not, directly or indirectly, own, of record or
beneficially, any outstanding voting securities, membership interests or other
equity interests in any Person.
Section 4.3. Authority of Seller.
          (a) Seller has full power and authority to execute, deliver and,
subject to the entry of the Sale Order, perform its obligations under, and
consummate the transactions contemplated by, this Agreement and each of the
Ancillary Documents. The execution, delivery and performance of this Agreement
and Ancillary Documents by Seller, and consummation of the transactions
contemplated hereby and thereby, have been duly authorized and approved by all
required action on the part of Seller, including by Seller’s board of directors
and, subject to the entry of the Sale Order, does not require any authorization
or consent of Seller’s shareholders or members that has not been obtained. This
Agreement has been duly authorized, executed and delivered by Seller and,
subject to the entry of the Sale Order, is the legal, valid and binding
obligation of Seller enforceable in accordance with its terms, and the Ancillary
Documents have been duly authorized by Seller and upon execution and delivery by
Seller and subject to the entry of the Sale Order, will be a legal, valid and
binding obligation of Seller enforceable in accordance with its terms.
          (b) Subject to receipt of the Third Party Consents, and after giving
effect to the Sale Order, none of the execution and delivery of this Agreement
or the Ancillary Documents by Seller, the consummation by Seller of any of the
transactions contemplated hereby or thereby, or compliance with or fulfillment
of the terms, conditions and provisions hereof or thereof by Seller, will
conflict with, result in a breach of the terms, conditions or provisions of, or
constitute a default or an event of default, or permit the acceleration of any
Liability or obligation or loss of a material benefit, or result in the creation
of any Encumbrance on any of the assets or properties of the Business (in each
case with or without notice or lapse of time or both), under (i) any charter (or
similar governing instrument) or by-laws (or similar governing document) of
Seller, (ii) any Permits, (iii) any Order to which Seller is bound or any
Purchased Asset is subject, (iv) any Legal Requirement affecting Seller or the
Purchased Assets, or (v) any Contract to which Seller or any of the Purchased
Assets is a party or otherwise bound.
Section 4.4. Assumed Contracts and Cure Costs.
          (a) Schedule 2.1(b) lists each Contract that relates to the Business
or any of the Purchased Assets. Seller has delivered to Buyer a correct and
complete copy of each written Contract (as amended to date) listed in
Schedule 2.1(b). Each such Contract is enforceable and,

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subject to the payment of any applicable Cure Costs, will continue to be
enforceable on identical terms following the consummation of the Transactions.
Other than the obligation to pay any applicable Cure Costs, neither Seller nor,
to Seller’s knowledge, any of the counter-parties to any such Contract is or has
been in (and no event has occurred that, with or without notice or lapse of
time, would create or constitute a) breach or violation of, or default under,
any of such Contract’s provisions.
          (b) Schedule 2.1(b) sets forth a true and complete list of the Cure
Costs associated with each of the Assumed Contracts. Buyer acknowledges,
understands and agrees that the Cure Costs set forth herein and in
Schedule 2.1(b) is based upon the information of the arrears and other costs due
under each Assumed Contract to cure any defaults in such Assumed Contract on the
date hereof and is subject to adjustment following each counter party to the
Assumed Contracts’ submission to the Bankruptcy Court of any objections to the
Cure Costs and adjudication by the Bankruptcy Court of the Cure Costs associated
with any Assumed Contract.
Section 4.5. Intellectual Property.
          Schedule 2.1(c) sets forth a true and complete list of all Seller’s
Intellectual Property relating to the Purchased Assets. Except as set forth in
Schedule 2.1(c), Seller owns, or possesses adequate rights to use, all
Intellectual Property used in the Business. No Third Party Consent is required
for the assignment of all interests in the Intellectual Property used in the
Business to Buyer as contemplated by this Agreement. Seller’s use of the
Intellectual Property in the Business does not, and Buyer’s use of such
Intellectual Property after Closing will not, infringe upon any rights any other
person owns or holds.
Section 4.6. Title to Purchased Assets.
          Seller has, and, upon delivery to Buyer on the Closing Date of the
instruments of transfer contemplated by Section 3.6, and subject to the terms of
the Sale Order, Seller will thereby transfer to Buyer, good and valid title to
all of the Purchased Assets, free and clear of all Encumbrances, except for the
Assumed Liabilities and for Permitted Encumbrances. Except for the Excluded
Assets there are no material assets, material properties, material rights or
material interests of any kind or nature that Seller has been using, holding or
operating in the Business that will not be used, held or owned by Buyer
immediately following the Closing.
Section 4.7. Proceedings.
          Schedule 4.7 sets forth a true and complete list of all Orders and
Proceedings by or against Seller arising from or relating to the Purchased
Assets. Except as set forth in Schedule 4.7, there are no instances in which
Seller (a) is subject to any outstanding Order or (b) is a party, the subject of
or, to Seller’s knowledge, is threatened to be made a party to or the subject
of, any Proceeding. No Order or Proceeding required to be set forth in
Schedule 4.7 questions the enforceability of this Agreement or the Ancillary
Document or the transactions contemplated hereby and thereby, or could result in
any Material Adverse Effect on the Business or Purchased Assets, and Seller has
no basis to believe that any such Proceeding may be brought or threatened
against Seller or Buyer.

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Section 4.8. Consent and Approvals.
          Schedule 4.8 sets forth a true and complete list of each material
consent, waiver, authorization or approval of any governmental or regulatory
authority, domestic or foreign, or of any other Person, and each declaration to
or filing or registration with any such governmental or regulatory authority,
that is required in connection with the execution and delivery of this Agreement
and the Ancillary Documents by the Seller or the performance by the Seller of
its obligations hereunder or thereunder (the “Third Party Consents”).
Section 4.9. Accuracy of Information Furnished.
          No representation, statement or information contained in this
Agreement, any of the Ancillary Documents or any Contract or other document made
available or furnished to Buyer or its Representatives by or on behalf of Seller
contains any untrue statement of a material fact or omits any material fact
necessary to make the information contained therein not misleading.
EXCEPT AS SET FORTH ABOVE, (A) ALL THE PURCHASED ASSETS SHALL BE TRANSFERRED ON
AN AS-IS, WHERE-IS BASIS, AND (B) SELLER MAKES NO FURTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, IN RESPECT OF THE PURCHASED ASSETS, AND ANY SUCH
REPRESENTATION AND WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF BUYER
          As an inducement to Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer hereby represents and
warrants to Seller and agrees as follows:
Section 5.1. Organization and Authority of Buyer.
          (a) Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Buyer has
full corporate power and authority to execute, deliver and perform its
obligations under this Agreement and all of the Ancillary Documents to which it
is a party. The execution, delivery and performance of this Agreement and such
Ancillary Documents by Buyer have been duly authorized and approved by Buyer’s
managers and do not require any further authorization or consent of Buyer or its
managers or members. This Agreement has been duly authorized, executed and
delivered by Buyer and is the legal, valid and binding agreement of Buyer
enforceable against Buyer in accordance with its terms, and each Ancillary
Document to which Buyer is a party has been duly authorized by Buyer and upon
execution and delivery by Buyer will be a legal, valid and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, except as
(i) enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting creditors rights generally and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses.
          (b) Neither the execution and delivery of this Agreement or any of
such Ancillary Documents or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:

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          (i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, or an event of default under (1) Buyer’s
organizational documents, (2) any Order to which Buyer is a party or by which it
is bound or (3) any Legal Requirement affecting Buyer; or
          (ii) require the approval, consent, authorization or act of, or the
making by Buyer of any declaration, filing or registration with, any Person,
other than filings with the Bankruptcy Court.
Section 5.2. No Finder.
          Except as set forth on Schedule 5.2, neither Buyer nor any Person
acting on its behalf has paid or become obligated to pay any fee or commission
to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement for which Seller is or will become liable, and
Buyer shall hold harmless and indemnify Seller from any claims with respect to
any such fees or commissions.
Section 5.3. Ownership of Seller.
          Buyer does not hold, directly or indirectly, any beneficial or other
ownership interest in Seller or its securities.
SECTION 6.
ACTION PRIOR TO THE CLOSING DATE
          The Parties covenant and agree to take the following actions between
the date hereof and the earlier of the termination of this Agreement and the
Closing Date:
Section 6.1. Investigation of the Business by Buyer.
          Seller shall permit Buyer’s authorized Representatives reasonable
access during regular business hours and upon reasonable notice, to the offices,
properties, agreements and other documentation and financial records with
respect to the Business, the Purchased Assets, and the Assumed Liabilities to
the extent Buyer reasonably requests. Any such investigation shall be conducted
in a manner so as not to interfere with the operations of the Business. Seller
shall use their commercially reasonable efforts to cause their outside
accountants and outside counsel to cooperate with Buyer in its investigation.
Section 6.2. Third Party Consents.
          Seller shall use its best efforts to obtain all Third Party Consents
to the extent such consents are not provided for or satisfied by the Sale Order.
Section 6.3. Governmental Approvals.
          (a) During the period prior to the Closing Date, Seller and Buyer
shall act diligently and reasonably, and shall cooperate with each other, to do
or cause to be done, all things necessary, proper or advisable consistent with
applicable confidentiality and Legal Requirements to cause the conditions
precedent to the Closing to be satisfied and to cause the Closing to occur,
including to secure any consents and approvals of any governmental authority

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required to be obtained by them, in order to assign or transfer any Permits to
Buyer, to permit the consummation of the transactions contemplated by this
Agreement, or to otherwise satisfy the conditions set forth in Section 8, in
each case as necessary to the extent such consents are not provided for or
satisfied by the Sale Order; provided, however, that Seller shall not make any
agreement or understanding affecting the Purchased Assets or the Business
(excluding the Excluded Assets or Excluded Liabilities) as a condition for
obtaining any such consents or approvals except with the prior written consent
of Buyer. Subject to the limitations set forth in this Section 6.3, Buyer shall
act diligently and reasonably to cooperate with Seller, to the extent
commercially reasonable, to obtain the consents and approvals contemplated by
this Section 6.3(b); provided, however, Buyer shall not be required to waive any
of the conditions to Closing set forth in Section 8.
          (b) Subject to all applicable confidentiality and Legal Requirements,
Seller and Buyer (i) shall promptly inform each other of any communication from
any Governmental Authority concerning this Agreement, the transactions
contemplated hereby, and any filing, notification or request for approval and
(ii) shall permit the other Party to review in advance any proposed written
communication or information submitted to any such Governmental Authority in
response thereto; provided, that a Party may request entry into a joint defense
agreement as a condition to providing any such materials and that, upon receipt
of that request, the Parties shall work in good faith to enter into a joint
defense agreement to create and preserve attorney-client privilege in a form and
substance mutually acceptable to the Parties. In addition, none of Parties shall
agree to participate in any meeting with any Governmental Authority in respect
of any filings, investigation or other inquiry with respect to this Agreement or
the transactions contemplated hereby, unless such Party consults with the other
Parties in advance and, to the extent permitted by any such Governmental
Authority, gives the other Parties the opportunity to attend and participate
thereat, in each case to the maximum extent practicable. Subject to any
restrictions under applicable laws, rules or regulations, each Party shall
furnish the other with copies of all correspondence, filings and communications
(and memoranda setting forth the substance thereof) between it and its
Affiliates and their respective Representatives on the one hand, and the
Governmental Authority or members of its staff on the other hand, with respect
to this Agreement, the transactions contemplated hereby (excluding documents and
communications which are subject to preexisting confidentiality agreements or to
the attorney-client privilege or work product doctrine) or any such filing,
notification or request for approval. Each Party shall also furnish the other
Party with such necessary information and assistance as such other party and its
Affiliates may reasonably request in connection with their preparation of
necessary filings, registration or submissions of information to the
Governmental Authority in connection with this Agreement, the transactions
contemplated hereby and any such filing, notification or request for approval.
Seller and Buyer shall prosecute all required requests for approval with all
necessary diligence and otherwise use their respective commercially reasonable
efforts to obtain the grant thereof by an Order as soon as possible including in
order to resolve such objections or suits which, in any case if not resolved,
could reasonably be expected to prevent, materially impede or materially delay
the consummation of the transactions contemplated hereunder or the other
transactions contemplated hereby, including by Buyer selling, holding separate
or otherwise disposing of or conducting its business in a manner which would
resolve such objections or suits or agreeing to sell, hold separate or otherwise
dispose of or conduct its business in a manner which would resolve such
objections or suits or permitting the sale, holding separate or other
disposition of, any of its assets or the assets of its subsidiaries

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or the conducting of its business in a manner which would resolve such
objections or suits.
          (c) Notwithstanding anything else to the contrary in this Agreement,
in the event that any administrative or judicial action or proceeding is
instituted (or threatened to be instituted) by a Governmental Authority or
private party challenging the transactions hereunder or any other agreement
contemplated hereby, (i) each Party shall cooperate in all respects with each
other and use its respective best efforts to contest and resist any such action
or proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement, and (ii) Buyer
must defend, at its sole cost and expense, any action or actions, whether
judicial or administrative, in connection with the transactions contemplated by
this Agreement.
Section 6.4. Conduct of Business Prior to the Closing Date.
          (a) From and after the date hereof until the earlier of the Closing
Date and the termination of this Agreement in accordance with the terms of
Section 9 hereof, Seller shall maintain the Purchased Assets and operate and
carry on the Business only in the Ordinary Course of Business, except as
otherwise expressly required by this Agreement or with the express written
consent of Buyer. Consistent with the foregoing and to the extent permitted or
required by the Bankruptcy Case, Seller shall use commercially reasonable
efforts to (i) maintain the Purchased Assets and the assets and properties of,
or used by, the Seller relating to the Business in their current condition
(ordinary wear and tear excepted), (ii) maintain the business organization of
the Business intact, (iii) maintain the Documents of the Business, and
(iv) comply with all Legal Requirements. In connection therewith, Seller not
shall (1) offer employment for any period on or after the Closing Date to any
employee or agent of the Business regarding whom Buyer makes offers of
employment in accordance with the terms set forth herein or (2) otherwise
attempt to persuade any such employee or agent to terminate his or her
relationship with the Business.
          (b) From and after the date hereof until the earlier of the Closing
Date and the termination of this Agreement in accordance with the terms of
Section 9 hereof, except (u) where the effect would be immaterial, (w) in the
Ordinary Course of Business, (x) as expressly provided in this Agreement,
including in connection with the Auction or (y) as with the express written
approval of Buyer, no Seller shall:
          (i) fail to maintain the Purchased Assets in their present condition
or permit any Encumbrances on the Purchased Assets;
          (ii) grant or acquire, agree to grant to or acquire from any Person,
or dispose of or permit to lapse any rights to, any material Intellectual
Property; or
          (iii) enter into any agreement or commitment to take any action
prohibited by this Section 6.4(b).
Section 6.5. Notification of Breach; Disclosure.
          Each Party shall promptly notify the other of any event, condition or
circumstance of which such Party becomes aware prior to the Closing Date that
would cause, or would

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reasonably be expected to cause, a violation or breach of this Agreement (or a
breach of any representation or warranty contained in this Agreement). During
the period prior to the Closing Date, each Party will promptly advise the other
in writing of any written notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement. It is acknowledged and understood
that no notice given pursuant to this Section 6.5 shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of the conditions contained herein.
Section 6.6. Insurance.
          Until the Closing, Seller shall maintain (including necessary renewals
thereof) insurance policies against risk and liabilities to the extent and in
the manner and at the levels maintained by Seller as of the date hereof with
respect to the Business and the Purchased Assets.
Section 6.7. Bankruptcy Court Approval.
          (a) Seller and Buyer acknowledge that this Agreement and the sale of
the Purchased Assets are subject to Bankruptcy Court approval. Seller and Buyer
acknowledge that (i) to obtain such approval, Seller must demonstrate that they
have taken reasonable steps to obtain the highest or otherwise best offer
possible for the Purchased Assets, including, but not limited to, giving notice
of the transactions contemplated by this Agreement to creditors and certain
other interested parties as ordered by the Bankruptcy Court, and conducting an
auction in respect of the Purchased Assets (the “Auction”), and (ii) Buyer must
provide adequate assurance of future performance under the Assumed Contracts.
          (b) As soon as reasonably possible after the Parties execute this
Agreement, but in any event no later than five Business Days after the Parties
execute this Agreement, Seller shall file the Sale Motion with the Bankruptcy
Court, together with required supporting papers and required notices.
          (c) In the event an appeal is taken or a stay pending appeal is
requested, with respect to the Sale Order, Seller shall promptly notify Buyer of
such appeal or stay request and shall promptly provide to Buyer a copy of the
related notice of appeal or order of stay. Seller shall also provide Buyer with
written notice of any motion or application filed in connection with any appeal
from either of such orders.
          (d) From and after the date hereof, Seller shall not take any action
that is intended to result in, or fail to take any action the intent of which
failure to act would result in, the reversal, voiding, modification or staying
of the Sale Order.
Section 6.8. Bankruptcy Filings.
          (a) From and after the date hereof, at least two Business Days prior
to filing any papers or pleadings in the Bankruptcy Case that relate, in whole
or in part, to this Agreement or Buyer, Seller shall provide Buyer with a copy
of such papers or pleadings.
          (b) Buyer shall provide Seller with prompt notice of any papers or
pleadings filed by a party other than the Buyer in the Bankruptcy Case that
relate, in whole or in part, to the

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Purchased Assets, this Agreement or Buyer.
SECTION 7.
ADDITIONAL AGREEMENTS
Section 7.1. Taxes.
          (a) Seller shall be liable for and shall pay, and pursuant to Section
7.1(c) shall reimburse Buyer for, all Taxes (whether assessed or unassessed)
applicable to the Business and the Purchased Assets, in each case attributable
to periods (or portions thereof) ending on or prior to the Closing Date. Without
limiting the obligations of Buyer contained elsewhere in this Agreement,
including in respect of the Assumed Liabilities, Buyer shall be liable for and
shall pay, and pursuant to Section 7.1(c) shall reimburse the applicable Seller
for, all Taxes (whether assessed or unassessed) applicable to the Business, the
Purchased Assets and the Assumed Liabilities, in each case attributable to
periods (or portions thereof) beginning after the Closing Date. For purposes of
this paragraph (a), any period beginning before and ending after the Closing
Date shall be treated as two partial periods, one ending on the Closing Date and
the other beginning on the day after the Closing Date except that Taxes (such as
property Taxes) imposed on a periodic basis shall be allocated on a daily basis.
          (b) Without limiting the other terms set forth in this Agreement, any
sales Tax, use Tax, real property transfer or gains Tax, real property records
recordation fees, documentary stamp Tax or similar Tax attributable to the sale
or transfer of the Purchased Assets and not exempted under the Sale Order or by
section 1146(c) of the Bankruptcy Code (“Transfer Taxes”) shall be borne by
Seller.
          (c) Seller or Buyer, as the case may be, shall provide reimbursement
for any Tax paid by one Party all or a portion of which is the responsibility of
the other Party in accordance with the terms of this Section 7.1. Within a
reasonable time prior to the payment of any such Tax, the Party paying such Tax
shall give notice to the other of the Tax payable and each Party’s respective
liability therefor, although failure to do so will not relieve the other Party
from its liability hereunder.
          (d) Buyer and Seller agree to furnish or cause to be furnished to each
other, upon request, as promptly as practicable, such information and assistance
relating to the Business and the Purchased Assets (including access to books and
records) as is reasonably necessary for the filing of all Tax Returns, the
making of any election relating to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax. Buyer and Seller shall retain all books and
records with respect to Taxes pertaining to the Purchased Assets for a period of
at least six years following the Closing Date. On or after the end of such
period, each party shall provide the other with at least 10 days prior written
notice before destroying any such books and records, during which period the
party receiving such notice can elect to take possession, at its own expense, of
such books and records. Seller and Buyer shall cooperate with each other in the
conduct of any audit or other proceeding relating to Taxes involving the
Purchased Assets or the Business.

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Section 7.2. Adequate Assurances Regarding Assumed Contracts.
          With respect to each Assumed Contract, Buyer will use commercially
reasonable efforts to provide adequate assurance as required under the
Bankruptcy Code of the future performance by Buyer of each such Assumed
Contract. Buyer and Seller agree that they will promptly take all actions
reasonably required to assist in obtaining a Bankruptcy Court finding that there
has been an adequate demonstration of adequate assurance of future performance
under the Assumed Contracts, such as furnishing affidavits, non-confidential
financial information or other documents or information for filing with the
Bankruptcy Court and making Buyer’s and Seller’ employees and representatives
available to testify before the Bankruptcy Court.
Section 7.3. Certain Actions.
          Within ten (10) days after the Closing Date, Seller shall take such
corporate and other actions necessary to change its corporate or company name,
as the case may be, to a name that is not similar to, or confusing with, the
current name of Seller, including any necessary filings required by the general
corporation or other law of the state in which such Seller is incorporated, or
otherwise organized. Buyer and Parent shall enter into the Name Use Agreement,
permitting Parent to continue to retain “International Fight League” as its
corporate name so long as it is a dormant company and is not engaged in an
active trade or business in accordance with Section 2.6(c).
Section 7.4. Reasonable Access to Records and Certain Personnel.
          In order to facilitate Seller’ efforts to (i) administer and close the
Bankruptcy Cases, (ii) prepare tax returns (together, the “Post-Close Filings”),
and (iii) allow Parent to file reports with the Securities and Exchange
Commission, for a period of two (2) years following the Closing, the Buyer shall
permit Seller and Seller’s counsel and accountants (collectively, “Permitted
Access Parties”) during regular business hours, with reasonable notice, and
subject to reasonable rules and regulations, reasonable access to the financial
and other books and records which comprised part of the Purchased Assets that
are required to complete the Post-Close Filings, which access shall include
(x) the right of such Permitted Access Parties to copy, at such Permitted Access
Parties’ expense, such required documents and records and (y) Buyer’s copying
and delivering to the relevant Permitted Access Parties such documents or
records as they require, but only to the extent such Permitted Access Parties
furnish Buyer with reasonably detailed written descriptions of the materials to
be so copies and applicable Permitted Access Party reimburses the Buyer for the
costs and expenses thereof; provided, however, that the foregoing rights of
access shall not be exercisable in such a manner as to interfere with the normal
operations of Buyer’s business. Notwithstanding anything contained in this
Section 7.4 to the contrary, in no event shall Seller have access to any
information that, based on advice of Buyer’s counsel, could (1) reasonably be
expected to create liability under applicable law, or waive any legal privilege,
(2) result in the discharge of any Trade Secrets of Buyer, its affiliates or any
third parties or (3) violate any obligation of Buyer with respect to
confidentiality.

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SECTION 8.
CONDITIONS TO CLOSING
Section 8.1. Conditions to Obligations of Each Party.
          The respective obligations of each Party to effect the sale and
purchase of the Purchased Assets shall be subject to the fulfillment (or, if
permitted by applicable law, waiver) on or prior to the Closing Date, of the
following conditions:
          (a) Consents, shall have been obtained or expired, as the case may be;
          (b) the Sale Order shall be unstayed (other than the ten-day period
set forth in Rule 6004 of the Federal Rules of Bankruptcy Procedure); and
          (c) no Governmental Authority shall have enacted, issued, promulgated
or entered any Order that is in effect and has the effect of making illegal or
otherwise prohibiting the consummation of the transactions contemplated by this
Agreement that has not been withdrawn or terminated.
Section 8.2. Conditions to Obligations of Buyer.
          The obligation of Buyer to purchase of the Purchased Assets
contemplated by this Agreement shall be subject to the fulfillment on or prior
to the Closing Date of the following additional conditions:
          (a) the representations and warranties of Seller contained in this
Agreement shall be true and correct in all material respects when made and on
and as of the Closing Date with the same effect as if such representations and
warranties had been made on and as of such date, and Buyer shall have received a
certificate of Seller to such effect signed by a duly authorized officer
thereof;
          (b) each covenant and obligation that Seller is required to perform or
to comply with pursuant to this Agreement at or prior to the Closing shall have
been duly performed and complied with in all material respects, and Buyer shall
have received a certificate of Seller to such effect signed by a duly authorized
manager or member thereof;
          (c) Seller shall have the requisite authority to assign the
Intellectual Property set forth in Schedule 2.1(c) to Buyer;
          (d) each of the deliveries required to be made to Buyer pursuant to
Section 3.6 shall have been so delivered; and
          (e) the Sale Order shall have been entered and shall have become a
Final Order and shall be in form and substance satisfactory to Buyer in its sole
reasonable discretion.
          Any condition specified in this Section 8.2 may be waived by Buyer;
provided that no such waiver shall be effective against Buyer unless it is set
forth in a writing executed by Buyer.

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Section 8.3. Conditions to Obligations of Seller.
          The obligation of Seller to sell the Purchased Assets contemplated by
this Agreement shall be subject to the fulfillment on or prior to the Closing
Date of the following additional conditions:
          (a) the representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects when made and on
and as of the Closing Date with the same effect as if such representations and
warranties had been made on and as of such date and Seller shall have received a
certificate of Buyer to such effect signed by a duly authorized officer thereof;
          (b) each covenant and obligation that Buyer is required to perform or
to comply with pursuant to this Agreement at or prior to the Closing shall have
been duly performed and complied with in all material respects, and Seller shall
have received a certificate of Buyer to such effect signed by a duly authorized
manager or member thereof;
          (c) each of the deliveries required to be made to Seller pursuant to
Section 3.5 shall have been so delivered; and
          (d) The Sale Order shall have been entered and become a Final Order.
          Any condition specified in this Section 8.3 may be waived by Seller;
provided that no such waiver shall be effective against Seller unless it is set
forth in writing executed by Seller.
SECTION 9.
TERMINATION
Section 9.1. Termination.
          This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned, by written notice promptly given to the other parties
hereto, at any time prior to the Closing Date:
          (a) by mutual written consent of Buyer and Seller;
          (b) by either Buyer or Seller if any permanent injunction or other
order of a court or competent authority or government agency which prevents the
consummation of the transaction shall have become final and not appealable;
          (c) by either Buyer or Seller upon ten (10) days written notice of
such termination to the other parties, if the Closing shall not have occurred on
or prior to December 31, 2008; provided that the failure of the Closing to occur
by such date is not due (in whole or in part) to a material breach by the
terminating party of such party’s representations, warranties or covenants under
this Agreement; and
          (d) by Buyer if Seller (i) agrees in writing, (ii) publicly announces
its intention, or (iii) is authorized by its board of directors (or equivalent
body), to sell, transfer, lease or otherwise dispose of, directly or indirectly,
including through an asset sale, stock sale,

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merger, reorganization or other similar transaction, all or any portion of the
Purchased Assets to any Person other than Buyer whether as a result of the
proposal of a stand alone plan of reorganization or otherwise;
          (e) by Buyer if there has been a breach by Seller of any of its
representations, warranties or covenants that would result in the condition set
forth in Section 8.2(a) or Section 8.2(b) not being met, which breach is not
curable, or if curable, is not cured within thirty (30) days after notice of
such breach is given by Buyer to Seller; or
          (f) by either Buyer or Seller if the Bankruptcy Court approves an
Alternative Transaction, or an Alternative Transaction is consummated.
          (g) For purposes of this Section 9.1, “Alternative Transaction” means
any one of the following transactions with or by any person or group (other than
the Buyer): (a) a merger, consolidation or similar transaction involving Seller,
or (b) a sale, lease or other disposition directly or indirectly by merger,
consolidation, tender offer, share exchange or otherwise of any assets of
Seller, excluding the Excluded Assets and Excluded Liabilities.
Section 9.2. Break Up Fee.
          (a) Seller acknowledges (i) that Buyer has made a substantial
investment in time and incurred substantial out-of-pocket expenses in connection
with the negotiation and execution of this Agreement, its due diligence with
respect to the Purchased Assets, and its efforts to consummate the transactions
contemplated hereby, and (ii) that Buyer’s efforts have substantially benefited
Seller and will benefit Seller and will benefit the bankruptcy estate of Seller
through the submission of the offer reflected in this Agreement which will serve
as a minimum bid on which other potentially interested bidders can rely.
Therefore, as compensation for entering into this Agreement, taking action to
consummate the transactions contemplated hereby and incurring the costs and
expenses related thereto and other losses and damages, including foregoing other
opportunities, Seller agrees to pay to Buyer, in accordance with the provisions
of this Section 9.2, an amount equal to three percent (3%) of the Aggregate Cash
Consideration (the “Break-Up Fee”).
          (b) Subject to limitations set forth in the Bidding Procedures, the
Break-Up Fee shall become payable to Buyer if, at any time prior to the entry of
the Sales Order, this Agreement is terminated by Buyer pursuant to
Sections 9.1(c), (d), (e) or (f) or by Seller pursuant to
Section 9.1(f).
Section 9.3. Effect of Termination.
          (a) In the event of termination of this Agreement by either Party, all
rights and obligations of the Parties under this Agreement shall terminate
without any liability of any Party to any other Party except as otherwise
provided in this Section 9 and except that each Party shall be liable for any
willful breach of this Agreement by such Party. Notwithstanding the foregoing,
the provisions of Section 9.2, Section 10 and Section 11 shall expressly survive
the expiration or termination of this Agreement.

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SECTION 10.
INDEMNIFICATION
Section 10.1. No Survival of Representations and Warranties.
          The representations and warranties of Buyer and Seller made in this
Agreement and the covenants of Buyer and Seller contained in this Agreement
that, by their terms, are to be performed at or prior to the Closing shall not
survive the Closing Date and shall be extinguished by the Closing and the
consummation of the transaction contemplated by this Agreement. Absent fraud,
Buyer shall not have any remedy against Seller or their Affiliates, and Seller
shall not have any remedy against Buyer or its Affiliates for (i) any breach of
a representation or warranty contained in this Agreement (other than to
terminate the Agreement in accordance with the terms hereof and as provided in
Section 9.2) and (ii) if the Closing occurs, any breach of a covenant contained
in this Agreement with respect to the period prior to the Closing Date. All
covenants required to be performed after the Closing Date shall survive this
Closing Date.
SECTION 11.
GENERAL PROVISIONS
Section 11.1. Confidential Nature of Information.
          Each Party agrees that it will treat in confidence all documents,
materials and other information that it shall have obtained regarding the other
Party during the course of the negotiations leading to the consummation of the
transactions contemplated hereby (whether obtained before or after the date of
this Agreement), the investigation provided for herein and the preparation of
this Agreement and other related documents. Such documents, materials and
information shall not be disclosed or communicated to any third Person (other
than, in the case of Buyer, to its counsel, accountants, financial advisors and
potential lenders, and in the case of Seller, to their counsel, accountants and
financial advisors). No Party shall use any confidential information referred to
in the second immediately preceding sentence in any manner whatsoever except
solely for the purpose of evaluating the proposed purchase and sale of the
Purchased Assets and the enforcement of its rights hereunder and under the
Ancillary Documents; provided, however, that after the Closing, Buyer may use or
disclose any confidential information included in the Purchased Assets and may
use or disclose other confidential information that is otherwise reasonably
related to the Business or the Purchased Assets. The obligation of each Party to
treat such documents, materials and other information in confidence shall not
apply to any information that (i) is or becomes available to such Party from a
source other than the disclosing Party, provided such other source was not, and
such Party would have no reason to believe such source was, subject to a
confidentiality obligation in respect of such information, (ii) is or becomes
available to the public other than as a result of disclosure by such Party or
its agents, (iii) is required to be disclosed under applicable law or judicial
process, including the Bankruptcy Case, but only to the extent it must be
disclosed, or (iv) such Party reasonably deems necessary to disclose to obtain
any of the consents or approvals contemplated hereby.
Section 11.2. No Public Announcement.
          Neither Seller nor Buyer shall, without the approval of Seller (in the
case of a disclosure by Buyer) or Buyer (in the case of a disclosure by Seller),
make any press release or other public announcement concerning the transactions
contemplated by this Agreement, except

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as and to the extent that any such party shall be so obligated by law, including
as may be required by the Bankruptcy Case, securities laws, or the rules of any
stock exchange, in which case the other party or parties shall be advised prior
to such disclosure and the parties shall use their reasonable best efforts to
cause a mutually agreeable release or announcement to be issued.
Section 11.3. Notices.
          All notices or other communications required or permitted hereunder
shall be in writing and shall be given or delivered by personal delivery, by
facsimile or by a nationally recognized private overnight courier service
addressed as follows:
If to Buyer, to:
HDNet LLC
320 South Walton Street
Callas, Texas 75226
Attn: Robert Thoele
Facsimile: 214-571-9221
with a copy to (which shall not constitute notice):
Alvin Gump Strauss Hauer & Feld LLP
1700 Pacific Ave, Suite 4100
Dallas, Texas 75201
Attn: Robert W. Dockery, Esq. and Kevin D. Rice, Esq.
Facsimile: 214-969-4343
If to Seller, to:
IFL Corp.
38 Park Avenue, 2nd Floor
Rutherford, New Jersey 07070
Attn: Michael Keefe
Facsimile: 201-635-1801
with a copy to (which shall not constitute notice):
Lowenstein Sandler PC
1251 Avenue of the Americas, 18th Floor
New York, New York 10022
Attn: Sharon L. Levine, Esq. and S. Jason Teele, Esq.
Facsimile: 973-597-2400
or to such other address or facsimile number as such party may indicate by a
notice delivered to the other party hereto.

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          Any notice, consent, authorization, direction or other communication
delivered as aforesaid shall be deemed to have been effectively delivered and
received, if sent by a nationally recognized private overnight courier service,
on the date following the date upon which it is delivered for overnight delivery
to such courier service, if delivered personally (with written confirmation of
receipt), on the date of such delivery or, if sent via facsimile, on the date of
the transmission of the facsimile, provided that the sender thereof receives
written confirmation that the facsimile was successfully delivered to the
intended recipient.
Section 11.4. Successors and Assigns.
          (a) Except as expressly permitted in this Agreement, the rights and
obligations of the Parties under this Agreement shall not be assignable by such
parties without the written consent of the other parties hereto.
          (b) This Agreement shall be binding upon and inure to the benefit of
the Parties and their successors and permitted assigns. The successors and
permitted assigns hereunder shall include any permitted assignee as well as the
successors in interest to such permitted assignee (whether by merger,
consolidation, liquidation (including successive mergers, consolidations or
liquidations) or otherwise). Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any Person other than the parties
and successors and assigns permitted by this Section 11.4 any right, remedy or
claim under or by reason of this Agreement.
Section 11.5. Entire Agreement; Amendments; Disclosure Schedules.
          This Agreement, the Ancillary Documents and Disclosure Schedules
referred to herein contain the entire understanding of the parties hereto with
regard to the subject matter contained herein or therein, and supersede all
prior agreements, understandings or letters of intent between or among any of
the parties hereto with respect to such subject matter. This Agreement shall not
be amended, modified or supplemented except by a written instrument signed by an
authorized representative of each of the Parties.
Section 11.6. Waivers.
          Any term or provision of this Agreement may be waived, or the time for
its performance may be extended, by the party or parties entitled to the benefit
thereof. Any such waiver shall be validly and sufficiently authorized for the
purposes of this Agreement if, as to any party, it is authorized in writing by
an authorized representative of such party. Except as otherwise provided herein,
the failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute 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 right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

-29-

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Section 11.7. Expenses.
          Each party hereto will pay all costs and expenses incident to its
negotiation and preparation of this Agreement and to its performance and
compliance with all agreements and conditions contained herein on its part to be
performed or complied with, including the fees, expenses and disbursements of
its counsel and accountants.
Section 11.8. Partial Invalidity.
          Wherever possible, each provision hereof shall be interpreted in such
manner as to be effective and valid under applicable law, but in case any one or
more of the provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such provision shall be
ineffective to the extent, but only to the extent, of such invalidity,
illegality or unenforceability without invalidating the remainder of such
invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
Section 11.9. Execution in Counterparts.
          This Agreement may be executed in counterparts, each of which shall be
considered an original instrument, but all of which shall be considered one and
the same agreement, and shall become binding when one or more counterparts have
been signed by and delivered to each of the Parties hereto. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
Section 11.10. Governing Law.
          (a) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed in that State.
          (b) All actions and proceedings arising out of or relating to this
Agreement, including the resolution of any and all disputes hereunder, shall be
heard and determined in the Bankruptcy Court, and the Parties hereby irrevocably
submit to the exclusive jurisdiction of the Bankruptcy Court in any such action
or proceeding and irrevocably waive the defense of an inconvenient forum to the
maintenance of any such action or proceeding. The Parties hereby consent to
service of process by mail (in accordance with Section 11.3) or any other manner
permitted by law.
          (c) THE PARTIES HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED IN CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF
SELLER, BUYER, OR THEIR RESPECTIVE REPRESENTATIVES IN THE NEGOTIATION OR
PERFORMANCE HEREOF.

-30-

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Section 11.11. No Third Party Beneficiaries.
          This Agreement is for the sole benefit of the Parties and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person any legal or equitable benefit, claim, cause
of action, remedy or right of any kind.
[SIGNATURE PAGES FOLLOW]

-31-

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          IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be executed the day and year first above written.

            BUYER:

HDNet LLC
      By:   /s/ Robert W. Thoele       Name:  ROBERT W. THOELE      Title:  CFO
& GENERAL COUNSEL        SELLER:

IFL Corp.
      By:   /s/ Michael C. Keefe     Name:  Michael C. Keefe    
Title:  Executive Vice President     

[Signature Page to Asset Purchase Agreement]

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Schedule 2.1(a)
Equipment
4 GB P2 Cards
Tripod/Organizer
Light Kit/Access
Mixer/Microphones
G-Raid 800 GB drive for editing
1995 Fruehauf trailer (VIN: 1HV05324SE030924)
Lift Pads for Fruehauf trailer
Panasonic HD Recorder
Breakout Box
DVD Duplicator
Portable DVR
LCD 7” monitor
RIVA Pro II Kit
Fresnel Kit (portable light kit)
Wide Angle adapters Soft Light
Kit Egg Crate (light diffuser)
Fresnel Kit (portable light kit)
Phone system
Wireless microphone system
Two Knack boxes (large metal rolling storage containers)
Miscellaneous TV production hardware
Sparring padding for MMA training
5-Rope ring used at IFL events

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SCHEDULE 2.1(b)
Assumed Contracts And Cure Costs
Agreement dated February 20, 2007, between Seller and Alfred Haber Distribution,
Inc., and the Addendum thereto dated October 31, 2007. Cure cost: $0.00.
Letter Agreement dated March 20, 2008, between Seller and National Sports
Programming, owner and operator of Fox Sports Net programming service. Cure
cost: $0.00.
Production and Distribution Agreement dated November 27, 2007, between Seller
and HDNet LLC, and Amendment No. 1 thereto dated December 18, 2007. Cure cost:
$0.00.
Production and Distribution Agreement dated January 31, 2008, between Seller and
HDNet LLC. Cure cost: $0.00.

 

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Schedule 2.1(c)
Intellectual Property
     Trademarks, Trade Names and Service Marks

                                                                REG   REG    
MARK   COUNTRY   STATUS     APP NO   APP DATE     NO   DATE   CLASS
ANACONDAS*
  United States of America   Registered     78770112     09-Dec-2005     3399717
    18-Mar-2008   41 Int.
 
                                   
BATTLEGROUND
  United States of America   Published     77103709     09-Feb-2007            
  41 Int.
 
                                   
BATTLEGROUND IFL
  United States of America   Published     77103697     09-Feb-2007            
  41 Int.
 
                                   
CONDORS
  United States of America   Registered     77049856     22-Nov-2006     3300902
    02-Oct-2007   41 Int.
 
                                   
IFL
  United States of America   Registered     77179000     11-May-2007     3372084
    22-Jan-2008   25 Int., 41 Int.
 
                                   
IFL BATTLEGROUND
  United States of America   Published     77138713     23-Mar-2007            
  41 Int. 09 Int., 16 Int., 25 Int., 28 Int., 41 Int.
 
                                   
IFL INTERNATIONAL
FIGHT LEAGUE & Design
  United States of America   ALLOWED     78598351     30-Mar-2005              
 
 
                                   
IFL INTERNATIONAL
FIGHT LEAGUE & Fist
Design
  United States of America   Pending     77363137     03-Jan-2008              
 
 
                                   
INTERNATIONAL FIGHT
LEAGUE
  United States of America   Pending     77178978     11-May-2007              
25 Int., 41 Int.
 
                                   
PITBULLS*
  United States of America   Registered     78770116     09-Dec-2005     3406920
    01-Apr-2008   41 Int.
 
                                   
SCORPION*S
  United States of America   Registered     78854819     05-Apr-2006     3357718
    18-Dec-2007   41 Int.
 
                                   
THE SILVERBACKS*
  United States of America   Registered     78770114     09-Dec-2005     3304224
    02-Oct-2007   41 Int.
 
                                   
TORONTO DRAGONS*
  United States of America   Pending     78906748     13-Jun-2006              
41 Int.

 

*   Debtor asserts that it is the owner of these marks, although filing with the
Patent and Trademark Office is by another entity

Schedule 2.1(c)-1

 

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Copyright Television Broadcasts
FSN Shows

          AIR DATE   EVENT DATE / VENUE   SHOW CONTENT
2006
       
 
       
5/21
  4/20 / Atlantic City   Anacondas vs. Silverbacks
5/28
  4/20 / Atlantic City   Pitbulls vs. Tiger Sharks
6/4
  6/3 / Atlantic City   Tiger Sharks vs. Silverbacks
9/24
  9/9 / Portland   Anacondas vs. Sabres
10/1
  9/9 / Portland   Superfight show w/ Horn vs. Lindland Superfight
10/2
  9/23 / Moline   Pitbulls vs. Silverbacks w/ Gracie vs. Miletich
(2-hour Best Damn Sports Show Period special)
10/8
  9/9 / Portland   Tigersharks vs. Wolfpack
11/12
  9/23 / Moline   Razorclaws vs. Dragons
11/19
  11/2 / Portland   Dragons vs. Silverbacks — Semifinal #1
9- 11/26
  11/2 / Portland   Anacondas vs. Wolfpack — Semifinal #2
10- 12/31
  12/29 / Mohegan   Silverbacks vs. Wolfpack
 
       
2007
          2/23   1/19 / Oakland   Condors vs. Tiger Sharks           3/2   1/19
/ Oakland   Lions vs. Razorclaws           3/9   2/2 / Houston   Scorpions vs.
Sabres           3/16   2/2 / Houston   Anacondas vs. Silverbacks           3/23
  2/23 / Atlanta   Dragons vs. Wolfpack           3/30   2/23 / Atlanta  
Pitbulls vs. Red Bears           4/6   3/17 / Los Angeles   Anacondas vs.
Razorclaws           4/13   4/13 Uncasville, CT   Wolfpack vs. Pitbulls (same
day show)           4/20   3/17 / Los Angeles   Condors vs. Sabres  
4/27
  4/7 / Moline   Lions vs. Silverbacks I
5/4
  4/7 / Moline   Lions vs. Silverbacks II
5/11
  4/7 / Moline   Red Bears vs. Tiger Sharks
5/18
  4/13 / Uncasville   Dragons vs. Scorpions
6/1
      IFL’s Greatest Hits- Knockout special

Schedule 2.1(c)-2

 

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          AIR DATE   EVENT DATE / VENUE   SHOW CONTENT
6/8
      SPECIAL: Meet the Stars (Highlight and background of four IFL stars-
Horodecki, Rothwell, Patterson, Hieron)
6/15
  5/19 / Chicago   Condors vs. Razorclaws
6/22
  5/19 / Chicago   Red Bears vs. Silverbacks
6/29
  6/1 / Everett, WA   Sabres vs. Wolfpack
7/6
  6/1 / Everett, WA   Anacondas vs. Tigersharks
7/13
  6/16 / Reno   Dragons vs. Pitbulls
7/20
  6/16 / Reno   Lions vs. Scorpions
7/27
      SPECIAL: Meet the Stars #2 (Highlight and background of four IFL stars-
Benji Radach, Vladimir Matyushenko, John Gunderson)
8/17
      Season recap of team finalist number one
8/24
      Season recap of team finalist number two
8/31
      Special: Meet the Stars #3 (Four best fighters backstories and highlights)
9/9
  8/2 / Meadowlands, NJ   IFL semi-final one
9/16
  8/2 / Meadowlands, NJ   IFL semi-final two
9/23
  9/20 / Florida   IFL final
 
       
2008
       
 
       
4/19/08
  11/3/07 / Chicago   Grand Prix Semi-Final Part 1
4/26/08
  11/3/07 / Chicago   Grand Prix Semi-Final Part 2
5/3/08
  12/29/07 / Uncasville   Grand Prix Final Part 1: Fabiano vs LC Davis /Hieron
vs Heleno / Radach vs Horwich
5/10/08
  12/29/07 / Uncasville   Grand Prix Final Part 2: Schultz vs. Horodecki /Nelson
vs Jaoude
5/17/08
  2/29/08 / Las Vegas   IFL Lightweight Championship — Ryan Schultz vs John
Gunderson; plus Dias vs Defranco
5/24/08
  2/29/08 / Las Vegas   IFL Heavyweight Championship — Roy Nelson vs Fabio
Scherner; plus: Ellenberger vs. Healy & Ferreira vs Polley
5/31/08
  2/29/08 / Las Vegas   IFL Middleweight Championship — Matt Horwich vs Ryan
McGivern; plus: Loveland vs Dennis Davis
6/7/08
  4/4 / Meadowlands, NJ   IFL Light Heavyweight Championship — Vladimir
Matyushenko vs Jamal Patterson
6/14/08
  4/4 / Meadowlands, NJ   IFL Featherweight Championship — Wagnney Fabiano vs.
Shad Lierley
6/21/08
  4/4 / Meadowlands, NJ   IFL Welterweight Championship — Jay Hieron vs Mark
Miller
6/28/08
  5/16 / Uncasville, CT   IFL Championship
7/5/08
  5/16 / Uncasville, CT   IFL Championship
7/12/08
  5/16 / Uncasville, CT   IFL Championship

Schedule 2.1(c)-3

 

--------------------------------------------------------------------------------

 

Copyright Television Broadcasts
MyNetwork IFL Battleground Shows

      AIRDATE   STORY
03/12/07
  The International Fight League premieres on network television. 72 of the
greatest fighters in the world, 9 mixed martial arts bouts, and the main event:
the IFL World Championship Title Fight
 
   
03/19/07
  Did a bad referee call cost Bas Rutten and his LA Anacondas their shot at the
championship? Now the Anacondas are getting their re-match. Plus, 10 mixed
martial arts bouts and the first ever IFL Superfight on network TV.
 
   
03/26/07
  The first family of Mixed Martial Arts, the legendary Gracie family, are out
to prove the dominance of Brazilian Jiu-Jitsu. Renzo Gracie’s New York Pitbulls
take on the IFL’s best teams in their climb to the top in 9 featured bouts.
 
   
04/09/07
  IFL Battleground goes to Portland to meet Olympian Matt Lindland and his
Wolfpack. The show will have a minimum of nine fights, including lightweight
Ryan Schultz’s return to the ring following his devastating knockout shown in
episode one.
 
   
04/16/07
  Cain and Able, IFL style. Meet the brotherly rivalry of world champions Ken
and Frank Shamrock and go behind the scenes as they build their teams for their
first-ever head to head match up. IFL Battleground will also go international
for the first time, as we see the multi-cultural blend Tokyo Sabres, led by
Japanese champion Ken Yasuda...a total of 11 fights.
 
   
04/23/07
  The IFL goes to the Pacific Northwest and meets the Seattle Tigersharks and
world champion kick-boxer Maurice Smith, and then goes to Orange County
California to meet the Condors and their Brazilian influence of world champion
Marco Ruas...a total of 11 bouts.
 
   
04/30/07
  Meet MMA legend, coach Don “The Predator” Frye, his Tucson Scorpions, his
family. His popular website advice column “Dear Don” becomes a weekly feature.
Also why Tokyo Sabres’ coach Ken Yasuda keeps firing players. Team “survivors”
Vladimir “The Janitor” Matuschenko, and two of LA’s own, South Central’s Savant
Young and Antonio McKee.
 
   
05/07/07
  A battle for IFL supremacy as Renzo Gracie’s first place New York Pitbulls
face last season World Champ finalists, Olympian Matt Lindland’s Portland
Wolfpack. Is Gracie’s boundless confidence any match for such unexpected
personalities as formerly homeless Matt Horwich, who uses God’s motivation to
beat his opponents? Plus Wolfpack Ryan Schultz returns after December’s
devastating knockout.
 
   
05/14/07
  Knockouts in and out of the ring...We count down the IFL’s greatest knockouts
of all time. The athletes and coaches tell what its like to both take and give
the knockout blow. Plus the nationwide auditions begin in LA for the first-ever
IFL ring-girl search. You won’t believe who shows up...

Schedule 2.1(c)-4

 

--------------------------------------------------------------------------------

 

      AIRDATE   STORY
05/21/07
  The IFL goes to America’s heartland as Ken Shamrocks Nevada Lions battle Pat
Miletich’s Quad Cities Silverbacks with a spot in the IFL semi-finals at stake.
The event will feature undefeated heavyweight Ben Rothwell against once beaten
Roy Nelson in a meeting of two of the IFL’s best, along with two of top
lightweights Bart Palaczewski and John Gunderson doing battle.
 
   
06/04/07
  The IFL takes you to the Windy City to meet world champion Igor Zinoviev and
his Red Bears, led by military sharp shooter and Chicago native Mark Miller. We
will also go indepth to meet some of the IFL’s biggest stars, including New
York’s Jamal Patterson, Orange County’s submission expert Jeremy Williams and
the Anacondas knock out artist Chris Horodecki.
 
   
06/11/07
  IFL Battleground goes to Portland to meet Olympian Matt Lindland and his
Wolfpack. The show will have a minimum of nine fights, including lightweight
Ryan Schultz’s return to the ring following his devastating knockout shown in
episode one.
 
   
06/18/07
  IFL Greatest Knockouts In and Out of the Ring...Knockouts in and out of the
ring...We count down the IFL’s greatest knockouts of all time. The athletes and
coaches tell what it’s like to both take and give the knockout blow. Plus the
nationwide auditions begin in LA for the first-ever IFL ring-girl search. You
won’t believe who shows up...
 
   
06/25/07
  The Orange County Condors return to the ring against Frank Shamrock’s
Razorclaws, the first match since the tragic death of Jeremy Williams. It’s also
a match-up of the coaches as world champion Maurice Smith meets Marco Ruas in a
superfight.
 
   
07/02/07
  The Silverbacks look to stay alive in the playoff hunt as they battle the
revitalized Chicago Red Bears. Undefeated heavyweight Ben “North Star” Rothwell
and once-beaten lightweight Bart Palazcewski return to the ring for Quad Cities,
while Igor Zinoviev’s Red Bears bring Chicago native Mike Miller in to meet UFC
veteran Josh Neer.
 
   
07/09/07
  The Tokyo Sabres, looking to finish the regular season undefeated, take on
Matt Lindland’s Portland Wolfpack, who need a big win to stay alive. Tokyo’s
Savant Young slugs it out with Ryan Schultz and Kaz Hamanaka looks for his first
win against eccentric Wolfpack star Matt Horwich. We also take to the seas for
the IFL’s trip to Fleet Week aboard the USS Wasp, and the IFL Ring Card Girl
competition continues.
 
   
07/16/07
  The IFL’s top team, the Los Angeles Anacondas, looks to grab momentum heading
into the playoffs, facing off against the hometown Seattle Tiger Sharks. The
Tiger Sharks, needing a convincing win to reach the postseason, send tough-nosed
Shad Lierley against rising superstar Chris Horodecki and local hero Brad
Blackburn versus dangerous Jay Hieron. The second segment of the IFL’s work with
the USO also airs this week.
 
   
07/23/07
  The IFL makes it’s first trip to Las Vegas and the stakes are high as Carlos
Newton’s Dragon’s led by undefeated lightweight Waggney Fabiano try to send
Renzo Gracie’s Pitbulls, led by star middleweight Delson Heleno from the ranks
of the unbeaten and knock them from playoff contention. The IFL’s ring girl
search enters its final stages in a special show from Las Vegas as well.

Schedule 2.1(c)-5

 

--------------------------------------------------------------------------------

 

      AIRDATE   STORY
08/13/07
  The first IFL regular season comes to an end as the homestanding Nevada Lions,
coached by Ken Shamrock, meet the Tucson Scorpions, led by world champion Don
Frye. The final spots for the IFL’s Grand Prix are on the line as Lions stars
Roy “Big Country” Nelson, lightweight star and Houston native John Gunderson try
to grab spots for the individual belt competition. Undefeated light heavyweight
Mike Whitehead and Lions welterweight Pat Healy also have spots on the line for
the Grand Prix. The IFL also goes back to sea to visit with the Marines on board
the Winston Churchil as they head into new York for Fleet Week.
 
   
08/20/07
  SEASON RECAP
 
   
08/27/07
  Grand Prix preview show
 
   
09/10/07
  Semi-final number one: Undefeated heavyweight Ben Rothwell leads the Quad
Cities Sliverbacks against the Los Angeles Anacondas, led by undefeated Benji
Radich with a berth in the IFL finals on the line.
 
   
09/17/07
  Semi- final number Two: The last berth in the IFL finals is on the line as the
New York Pitbulls, led by heavyweight Bryan Vitell, go up against the Tokyo
Sabres, led by the undefeated duo of Antonio Mckee and Vladimir “The Janitor”
Matyuschenko
 
   
09/24/07
  Season Final: The first full IFL season concludes, as the two greatest schools
in the sport of Mixed Martial Arts, the Miletich Fighting System, the Quad
Cities Silverbacks goes head to head with the Gracie Jiu-Jitsu system, the New
York Pitbulls, for worldwide team supremacy. See if undefeated heavyweight Ben
Rothwell can continue his run, or if the Pitbulls can bring the New York area
their first team title of any kind since the 2000 New York Yankees

Copyright DVDs

      RELEASE DATE   TITLE
2007
  IFL Greatest Knockouts & Extreme Action
 
   
2007
  IFL Championship 2007

In addition, Seller has numerous other tapes or events, interviews and
background material used as the source for the edited shows televised on FSN and
MyNetwork. Seller has numerous still images and photos of athletes, coaches and
events.
Schedule 2.1(c)-6

 

--------------------------------------------------------------------------------

 

Schedule 2.2
Excluded Assets

1.   Cash, investments, bank accounts and security deposits;   2.   Amounts due
from Alfred Haber Distributions, Inc. for the period of June 30, 2008 to
September 30, 2008;   3.   Existing accounts receivable;   4.   Any rights or
amounts that may be recovered or recoverable on Seller’s claim against ProElite,
Inc. and its affiliates and CBS Corporation and its affiliates related to the
agreement and discussion between Seller and its affiliates and ProElite, Inc.
and CBS Corporation and their respective affiliates that occurred in June and
July 2008;   5.   All tax refunds;   6.   Office equipment and supplies,
including servers and computer equipment;   7.   Books and records other than
those relating directly to the purchased assets; and   8.   Prepaid expenses.

Schedule 2.1(c)-7

 

--------------------------------------------------------------------------------

 

Schedule 4.7
Proceedings
     None.
Schedule 2.1(c)-8

 

--------------------------------------------------------------------------------

 

Schedule 4.8
Consents and Approvals
Entry of an order by the United States Bankruptcy Court for the Southern
District of New York approving the sale of the Assets as set forth herein.
Schedule 2.1(c)-9

 

--------------------------------------------------------------------------------

 

Schedule 5.2
Brokers
     None.
Schedule 2.1(c)-10

 

--------------------------------------------------------------------------------

 

EXHIBIT A
ASSUMPTION AND ASSIGNMENT AGREEMENT

 

--------------------------------------------------------------------------------

 

ASSUMPTION AND ASSIGNMENT AGREEMENT
          THIS ASSUMPTION AND ASSIGNMENT AGREEMENT (this “Assumption and
Assignment Agreement”) is entered into as of October ___, 2008, by and among IFL
Corp., d/b/a International Fight League, a Delaware corporation (“Seller”) and
HDNet LLC, a Delaware limited liability company (“Buyer”). All capitalized words
and terms used in this Assumption and Assignment Agreement and not defined
herein shall have the respective meanings ascribed to them in the Asset Purchase
Agreement, dated as of September 19, 2008, by and between the Seller and the
Buyer (the “Agreement”).
          WHEREAS, pursuant to the Agreement, the Seller has agreed to sell,
convey, assign, transfer and deliver to the Buyer all of the Seller’s right,
title and interest, as of the Closing Date hereof, in and to the Assets; and
          WHEREAS, Buyer has, pursuant to the Asset Purchase Agreement, agreed
to assume the Assumed Liabilities of the Seller.
          NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto, intending to be legally bound hereby, agree
as follows:
          1. Pursuant to and in accordance with the terms of the Agreement,
Seller hereby sells, conveys, transfers and delivers over unto the Buyer and its
successors and assigns, all of the right, title and interest of the Seller in,
to and under all Assigned Agreements.
          2. Pursuant to and in accordance with the terms of the Agreement, the
Buyer hereby assumes (a) all of the obligations of the Seller under the Assigned
Agreements that are included in the Assets and (b) the Assumed Liabilities.
          3. This Assumption and Assignment Agreement is not intended to create
any broader obligations of the Buyer or the Seller than those contained in the
Agreement and in the event of any ambiguity or conflict between the terms hereof
and the Agreement, the terms of the Agreement shall govern and be controlling.
          4. This Assumption and Assignment Agreement and the covenants and
agreements set forth herein shall be binding upon, inure to the benefit of, and
be enforceable by the Buyer and the Seller, respectively, and their respective
successors and assigns.
          5. This Assumption and Assignment Agreement shall be construed,
interpreted and governed in accordance with the Laws of the State of Delaware
regardless of the Laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
          6. In case at any time after the Closing Date any further action is
necessary or desirable to transfer or record the transfer of any of the Assets
to the Buyer or to otherwise carry out the purposes of the Agreement and this
Assumption and Assignment Agreement, the proper officers and directors of the
Buyer and the Seller shall execute, acknowledge, deliver and perform, or cause
to be executed, acknowledged, delivered and performed, all such further acts,
transfers, conveyances, assurances and documents (including assignments,
acknowledgements and consents and other instruments of transfer) and shall take,
or cause to be taken, such further action, in each case to the extent consistent
with the Agreement and this Assumption and Assignment Agreement and not
inconsistent with applicable Laws.

A-1

--------------------------------------------------------------------------------

 

          7. This Assumption and Assignment Agreement may be executed in
multiple counterparts, all of which, when executed and delivered, shall be
considered one and the same agreement.
          IN WITNESS WHEREOF, each of the parties hereto has caused this
Assumption and Assignment Agreement to be executed by one of its duly authorized
officers as of the date first above written.

            BUYER:

HDNet LLC
      By:         Name:         Title:           SELLER:

IFL Corp.
      By:         Name:         Title:        

A-2

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EXHIBIT B
BIDDING PROCEDURES

 

--------------------------------------------------------------------------------

 

Assets To Be Sold
          The assets proposed to be sold are the Assets (as defined in the
Agreement and as more fully set forth in section 2.1 of the Agreement), that
comprise substantially all of the Seller’s assets.
As Is, Where Is
          The sale of the Assets shall be on an “as is, where is” basis and
without representations or warranties of any kind, nature, or description by the
Debtor, its agents, or estate, except, with respect to the Purchaser, to the
extent set forth in the Agreement and, with respect to a Successful Bidder, to
the extent set forth in the relevant purchase agreement of such Successful
Bidder approved by the Bankruptcy Court.
Free Of Any And All Claims And Interests
          The Assets shall be sold free and clear of all pledges, liens,
security interests, encumbrances, claims, charges, options, and interests
thereon (collectively, the “Claims and Interests”) and the Claims and Interests,
if any, shall attach to the net proceeds of the sale of such Assets.
Participation Requirements
          Any person who wishes to participate in the Bidding Process (a
“Potential Bidder”) must become a Qualified Bidder. As a prerequisite to
becoming a Qualified Bidder, a Potential Bidder, other than the Purchaser, must
deliver (unless previously delivered) to the Seller, who shall promptly deliver
copies to the Official Committee of Unsecured Creditors (the “Committee”), if
one is appointed in the Debtor’s case: (i) an executed confidentiality agreement
substantially in the form attached hereto as Exhibit 2, (ii) current audited
financial statements of the Potential Bidder, or, if the Potential Bidder is an
entity formed for the purpose of acquiring the Assets, current audited financial
statements of the equity holders of the Potential Bidder who shall guarantee the
obligations of the Potential Bidder, or such other form of financial disclosure
and credit-quality support or enhancement acceptable to the Seller, and (iii) a
preliminary (non-binding) written proposal regarding (a) the purchase price
range, (b) any Assets expected to be

 

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excluded, (c) the structure and financing of the transaction (including, but not
limited to, the sources of financing of the Purchase Price (as defined in the
Agreement) and the requisite deposit, (d) any anticipated regulatory approvals
required to close the transaction, the anticipated time frame and any
anticipated impediments for obtaining such approvals, (e) any conditions to
closing that it may wish to impose in addition to those set forth in the
Agreement, and (f) the nature and extent of additional due diligence it may wish
to conduct and the date by which such due diligence will be completed.
          A Potential Bidder who delivers the documents described in the
previous subparagraphs above and whose financial information and credit-quality
support or enhancement demonstrate the financial capability of such Potential
Bidder to consummate the Sale, if selected as the successful bidder, and who the
Seller, in consultation with the Committee (if one is appointed in the Debtor’s
case), determine (based on availability of financing, experience, and other
considerations) to be able to consummate the Sale within the time frame provided
by the Agreement shall be deemed a “Qualified Bidder.” As promptly as
practicable, after a Potential Bidder delivers all of the materials required
above, the Seller, in consultation and with the Committee (if one is appointed
in the Debtor’s case), shall determine, and shall notify the Potential Bidder,
whether such Potential Bidder is a Qualified Bidder. At the same time that the
Seller notifies the Potential Bidder that it is a Qualified Bidder, the Seller
shall allow the Qualified Bidder to begin to conduct due diligence with respect
to the Assets as provided below. Notwithstanding the foregoing, the Purchaser
for itself or on behalf of its designee, assignee or affiliate, shall be deemed
a Qualified Bidder for purposes of the Bidding Process.
Due Diligence
          All due diligence shall be coordinated by the Seller, and all requests
for due diligence materials and related information shall be made to counsel for
the Seller, Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th Floor, New
York, New York 10022, Attention: Sharon Levine, Esq. (slevine@lowenstein.com)
and S. Jason Teele, Esq.

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(steele@lowenstein.com), or any other professional retained by the Seller and as
directed by the Seller.
          The Seller shall afford each Qualified Bidder access to due diligence
materials reasonably requested; provided, however, that the Seller, in its
reasonable discretion, may permit Potential Bidders to conduct limited due
diligence, provided such Potential Bidders execute a confidentiality agreement
substantially in the form attached hereto as Exhibit 1, for the limited purpose
of permitting such Potential Bidders to determine whether or not they desire to
submit a Qualified Bid.
          The Seller shall coordinate all reasonable requests for information
and due diligence access from Qualified Bidders. Any additional due diligence
shall not continue after the Bid Deadline, except as otherwise consented to by
the Seller. The Seller may, in its discretion, coordinate diligence efforts such
that multiple Qualified Bidders have simultaneous access to due diligence
materials. The Seller shall not be obligated to furnish any information relating
to the Assets to any person other than to Qualified Bidders.
          Each Qualified Bidder shall be deemed to acknowledge and represent
that it has had an opportunity to conduct any and all due diligence regarding
the Assets prior to making its offer, that it has relied solely upon its own
independent review, investigation, and/or inspection of any documents and/or the
Assets in making its bid, and that it did not rely upon any written or oral
statements, representations, promises, warranties, or guaranties whatsoever,
whether express, implied, by operation of law or otherwise, regarding the
Assets, or the completeness of any information provided in connection therewith,
the Bidding Process or the Auction (as defined herein), except, as to the
Successful Bidder, as expressly stated in the definitive agreement with such
Successful Bidder approved by the Bankruptcy Court.
Bid Deadline
          All Bids (as defined below) must be submitted in writing so that they
are actually received no later than 5:00 p.m. (prevailing Eastern time) on
October 23, 2008 (the “Bid Deadline”). Each Qualified Bidder (as defined below)
must deliver copies of its Bid to

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Lowenstein Sandler PC, counsel for the Debtor, 1251 Avenue of the Americas, 18th
Floor, New York, New York 10022, Attention: Sharon Levine, Esq. and S. Jason
Teele, Esq., or by e-mail to slevine@lowenstein.com and steele@lowenstein.com.
The Debtor’s counsel shall serve copies of all Bids received on (i) counsel for
the Purchaser, Akin Gump Strauss Hauer & Feld LLP, 1700 Pacific Ave, Suite 4100,
Dallas, Texas 75201, Attention: Robert W. Dockery, Esq. and Kevin D. Rice, Esq.,
(ii) counsel for any official committees appointed in the Debtor’s case, and
(iii) the Office of the United States Trustee.
Bid Requirements
          All bids must include the following documents: (i) a letter stating
that the bidder’s offer is irrevocable for the period set forth in the Bidding
Procedures, (ii) an executed copy of the Agreement marked to show amendments and
modifications to the Agreement, purchase price, and proposed schedules, (iii) a
good faith deposit of ten percent (10%) of the aggregate bid amount (the “Good
Faith Deposit”), and (iv) satisfactory written evidence of a commitment for
financing or other ability to consummate the proposed transaction.
Qualified Bids
          To be deemed a “Qualified Bid,” a bid must be received by the Bid
Deadline and, among other things, (i) must be on terms and conditions (other
than the amount of the consideration and the particular liabilities being
assumed) that are substantially similar to, and are not materially more
burdensome or conditional to Seller than those contained in the Agreement,
(ii) must not be contingent on obtaining financing or the outcome of unperformed
due diligence beyond the contingencies set forth in the Agreement, (iii) must
have a value (inclusive of any credit bid component) greater than the purchase
price reflected in the Agreement plus the amount of the Break-Up Fee, (iv) must
not be conditioned on bid protections, other than those contemplated in the
Bidding Procedures, (v) must contain acknowledgements and representations as set
forth in the Bidding Procedures, and (vi) include a commitment to consummate the
Sale within not more than fifteen (15) days after entry of a Bankruptcy Court
order approving such purchase. The Seller, in consultation with the

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Committee (if one is appointed in the Debtor’s case), shall have the right to
deem a bid a Qualified Bid, if such bid does not conform to one or more of the
aforementioned requirements, provided however, that such bid must have a value
greater than or equal to the sum of the Purchase Price plus the amount of the
Break-Up Fee, taking into account all material terms of any such bid. Each
Qualified Bid other than that of the Purchaser shall be called a “Subsequent
Bid.”
Bid Protection
          Recognizing the Purchaser’s expenditure of time, energy, and
resources, the Seller has agreed to provide certain bid protections to the
Purchaser. Specifically, the Seller has determined that the Agreement will
further the goals of the Bidding Procedures by setting a floor which all other
Qualified Bids must exceed and, therefore, is entitled to be selected as the
Purchaser. As a result, the Seller has agreed that if the Seller sell the Assets
to a Successful Bidder other than the Purchaser, the Seller shall, in certain
circumstances, pay to the Purchaser a Break-Up Fee equal to three percent (3%)
of the Aggregate Cash Consideration (as defined in the Agreement). The payment
of the Break-Up Fee shall be governed by the provisions of the Agreement and the
Bidding Procedures Order.
Conduct Of Auction
          If the Debtor receives at least one Qualified Bid in addition to the
Agreement, the Debtor will conduct an auction (the “Auction”) on October 27,
2008, at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th
Floor, New York, New York, at 10:00 a.m. (prevailing Eastern time). At least two
(2) business days prior to the Auction, each Qualified Bidder with a Qualified
Bid must inform the Seller whether it intends to participate in the Auction and
at least one (1) business day prior to the Auction, the Seller will provide such
bidders copies of the Qualified Bid which the Seller believes is the highest or
otherwise best offer for the Assets, (iii) all Qualified Bidders will be
entitled to be present for all Subsequent Bids, and (iv) bidding at the Auction
will begin with the highest or otherwise best Qualified Bid,

B-5

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continue in minimum increments of at least $25,000, and conclude after each
participating bidder has had the opportunity to submit one or more additional
Subsequent Bids.
Participation in the Auction
     Only Qualified Bidders who have submitted Qualified Bids will be eligible
to participate in the Auction. Only the authorized representatives of each of
the Qualified Bidders, the Purchaser, the Committee (if one is appointed in the
Debtor’s case), the Office of the United States Trustee, and the Seller shall be
permitted to attend the Auction. At the Auction, Qualified Bidders will be
permitted to increase and/or improve their bids. Unless otherwise agreed to by
the Seller, no Qualified Bidder will be permitted more than one-half hour to
respond to the previous bid at Auction and, at the expiration of such time
(unless extended), the Auction shall conclude.
Selection of Successful Bid
          As soon as practicable after the conclusion of the Auction, the Seller
will, in consultation with its attorneys and financial advisors, review each
Qualified Bid and identify the highest or otherwise best offer for the Assets
(the “Successful Bid”) and the bidder making such bid (the “Successful Bidder”).
The Seller will sell the Assets for the highest or otherwise best Qualified Bid
to the Successful Bidder upon the approval of such Qualified Bid by the
Bankruptcy Court after the hearing (the “Sale Hearing”).
Sale Hearing
          The Sale Hearing is currently scheduled for October 28, 2008 at 10:00
a.m. (prevailing Eastern time) before the Honorable Martin Glenn, United States
Bankruptcy Judge, in the United States Bankruptcy Court for the Southern
District of New York, located at One Bowling Green, Room 501, New York, New York
10004. The Sale Hearing may be adjourned or rescheduled by the Seller without
notice other than by an announcement of the adjourned date at the Sale Hearing.
          If no Qualified Bids other than that of the Purchaser are received,
the Seller will proceed with the sale of the Assets to the Purchaser following
entry of the order approving the

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Sale. If the Seller receives additional Qualified Bids, then, at the Sale
Hearing, the Seller shall seek approval of the Successful Bid, as well as the
second highest or best Qualified Bid (the “Alternate Bid” and such bidder, the
“Alternate Bidder”). A bid will not be deemed accepted by the Seller unless and
until approved by the Bankruptcy Court. Following approval of the sale to the
Successful Bidder, if the Successful Bidder fails to consummate the sale for
specified reasons, then the Alternate Bid will be deemed to be the Successful
Bid and the Seller will effectuate a sale to the Alternate Bidder without
further order of the Bankruptcy Court.
Return Of Good Faith Deposits
          Good faith deposits of all Qualified Bidders (except for the
Successful Bidder) shall be held in an interest-bearing escrow account and all
Qualified Bids shall remain open until two (2) business days following the
closing of the Sale (the “Return Date”). Notwithstanding the foregoing, the good
faith deposit submitted by the Successful Bidder, together with interest
thereon, shall be applied against the payment of the Purchase Price upon closing
of the Sale to the Successful Bidder. If a Successful Bidder fails to consummate
an approved sale, the Seller will not have any obligation to return such good
faith deposit and it shall irrevocably become property of the Seller. On the
Return Date, the Seller will return the good faith deposits of all other
Qualified Bidders, together with the accrued interest thereon.
Reservation of Rights
          The Seller (i) may determine which Qualified Bid, if any, is the
highest or otherwise best offer, and (ii) may reject at any time, any bid (other
than the Purchaser’s bid) that is: (a) inadequate or insufficient, (b) not in
conformity with the requirements of the Bankruptcy Code, the Bidding Procedures,
or the terms and conditions of the Sale, or (c) contrary to the best interests
of the Seller, its estate and creditors as determined by the Seller in its sole
discretion.

B-7

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EXHIBIT 1 TO BIDDING PROCEDURES
(Nondisclosure Agreement)

 

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NONDISCLOSURE AGREEMENT
          This Nondisclosure Agreement (this “Agreement”) by and between
              , a                corporation (the “Recipient”), and IFL Corp.
(the “Provider”) is dated as of the latest date set forth on the signature page
hereto. Recipient and Provider are each a “Party” and collectively, the
“Parties”).
          1. General. In connection with the consideration of a possible
negotiated transaction (a “Possible Transaction”) between the Parties, Provider
is prepared to make available to the Recipient certain “Diligence Material” (as
defined in Section 2 below) in accordance with the provisions of this Agreement,
and both Parties agree to take or abstain from taking certain other actions as
hereinafter set forth.
          2. Definitions. (a) The term “Diligence Material” means information
concerning the Provider which has been or is furnished to the Recipient or its
Representatives in connection with the Recipient’s evaluation of a Possible
Transaction, including its business, financial condition, operations, assets and
liabilities, and includes all notes, analyses, compilations, studies,
interpretations or other documents prepared by the Recipient or its
Representatives which contain or are based upon, in whole or in part, the
information furnished by the Recipient hereunder. The term Diligence Material
does not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Recipient or its
Representatives in breach of this Agreement, (ii) was within the Recipient’s
possession prior to its being furnished to the Recipient by or on behalf of the
Provider, provided that the source of such information was not bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the Provider with respect to such information,
or (iii) is or becomes available to the Recipient on a non-confidential basis
from a source other than the Provider or its Representatives, provided that such
source is not bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, the Provider with respect
to such information.

 

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          (b) The term “Representatives” shall include the directors, officers,
employees, agents, partners or advisors (including, without limitation,
attorneys, accountants, consultants, bankers and financial advisors) of the
Recipient or the Provider, as applicable.
          (c) The term “Person” includes the media and any corporation,
partnership, group, individual or other entity.
          3. Use of Diligence Material. The Recipient shall, and it shall cause
its Representatives to, use the Diligence Material solely for the purpose of
evaluating a Possible Transaction, keep the Diligence Material confidential,
and, subject to Section 5, will not, and will cause its Representatives not to,
disclose any of the Diligence Material in any manner whatsoever; provided,
however, that any of such information may be disclosed to the Recipient’s
Representatives who need to know such information for the sole purpose of
helping the Recipient evaluate a Possible Transaction. The Recipient agrees to
be responsible for any breach of this Agreement by any of the Recipient’s
Representatives. This Agreement does not grant the Recipient or any of its
Representatives any license to use the Provider’s Diligence Material except as
provided herein.
          4. Legally Required Disclosure. If the Recipient or its
Representatives are requested or required (by oral questions, interrogatories,
other requests for information or documents in legal proceedings, subpoena,
civil investigative demand or other similar process) to disclose any of the
Diligence Material, the Recipient shall provide the Provider with prompt written
notice of any such request or requirement together with copies of the material
proposed to be disclosed so that the Provider may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Provider, the Recipient or its Representatives are
nonetheless legally compelled to disclose Diligence Material or otherwise be
liable for contempt or suffer other censure or penalty, the Recipient or its
Representatives may, without liability hereunder, disclose to such requiring
person only that portion of such Diligence Material or any such facts which the
Recipient or its Representatives is legally required to

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disclose, provided that the Recipient and/or its Representatives cooperate with
the Provider to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded such Diligence Material
or such facts by the person receiving the material.
          5. Return or Destruction of Diligence Material. If Recipient decides
that it does not wish to proceed with a Possible Transaction, it will promptly
inform the Provider of that decision. In that case, or at any time upon the
request of the Provider for any reason, the Recipient will, and will cause its
Representatives to, within five (5) business days of receipt of such notice,
destroy or return all Diligence Material in any way relating to the Provider or
its products, services, employees or other assets or liabilities, and no copy or
extract thereof (including electronic copies) shall be retained, except that
Recipient’s outside counsel may retain one copy to be kept confidential and used
solely for archival purposes. The Recipient shall provide to the Provider a
certificate of compliance with the previous sentence signed by an executive
officer of the Recipient. Notwithstanding the return or destruction of the
Diligence Material, the Recipient and its Representatives will continue to be
bound by the Recipient’s obligations hereunder with respect to such Diligence
Material.
          6. Maintaining Privilege. If any Diligence Material includes materials
or information subject to the attorney-client privilege, work product doctrine
or any other applicable privilege concerning pending or threatened legal
proceedings or governmental investigations, the Recipient understands and agrees
that the Recipient and the Provider have a commonality of interest with respect
to such matters and it is the desire, intention and mutual understanding of the
Parties that the sharing of such material by Provider is not intended to, and
shall not, waive or diminish in any way the confidentiality of such material or
its continued protection under the attorney-client privilege, work product
doctrine or other applicable privilege. All Diligence Material provided by the
Recipient that is entitled to protection under the attorney-client privilege,
work product doctrine or other applicable privilege shall remain entitled to
such protection under these privileges, this Agreement, and under the joint
defense doctrine.

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          7. Not a Transaction Agreement. The Recipient understands and agrees
that no contract or agreement providing for a Possible Transaction exists
between the Parties unless and until a final definitive agreement for a Possible
Transaction has been executed and delivered, and the Recipient hereby waives, in
advance, any claims (including, without limitation, breach of contract) relating
to the existence of a Possible Transaction unless and until the Parties shall
have entered into a final definitive agreement for a Possible Transaction. The
Recipient also agrees that, unless and until a final definitive agreement
regarding a Possible Transaction has been executed and delivered, neither Party
will be under any legal obligation of any kind whatsoever with respect to such
Possible Transaction by virtue of this Agreement except for the matters
specifically agreed to herein. Either Party may terminate discussions and
negotiations with the other Party at any time.
          8. No Representations or Warranties; No Obligation to Disclose. The
Recipient understands and acknowledges that neither the Provider nor its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of the Diligence Material furnished by or on behalf
of the Provider and shall have no liability to the Recipient, its
Representatives or any other Person relating to or resulting from the use of the
Diligence Material furnished to the Recipient or its Representatives or any
errors therein or omissions therefrom. As to the information delivered to the
Recipient, the Provider will only be liable for those representations or
warranties which are made in a final definitive agreement regarding a Possible
Transaction, when, as and if executed, and subject to such limitations and
restrictions as may be specified therein. Nothing in this Agreement shall be
construed as obligating a the Provider to provide, or to continue to provide,
any information to any Person.
          9. Modifications and Waiver. No provision of this Agreement can be
waived or amended in favor of either Party except by written consent of the
other Party, which consent shall specifically refer to such provision and
explicitly make such waiver or amendment. No failure or delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or

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future exercise thereof or the exercise of any other right, power or privilege
hereunder.
          10. Remedies. Recipient understands and agrees that money damages
would not be a sufficient remedy for any breach of this Agreement by Recipient
or any of its Representatives and that Provider shall be entitled to equitable
relief, including injunction and specific performance, as a remedy for any such
breach or threat thereof. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement, but shall be in addition to all other
remedies available at law or equity to Provider.
          11. Legal Fees. In the event of litigation relating to this Agreement,
if a court of competent jurisdiction determines that either Recipient or its
Representatives has breached this Agreement, then the Recipient shall be liable
and pay to the Provider the reasonable legal fees and costs incurred in
connection with such litigation, including any appeal therefrom.
          12. Governing Law. This Agreement is for the benefit of the Provider
and shall be governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed entirely within
such State.
          13. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by any court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants or restrictions contained in this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and if a
covenant or provision is determined to be unenforceable by reason of its extent,
duration, scope or otherwise, then the Parties intend and hereby request that
the court or other authority making that determination shall only modify such
extent, duration, scope or other provision to the extent necessary to make it
enforceable and enforce it in its modified form for all purposes of this
Agreement.
          14. Term. This Agreement shall terminate one (1) year after the date
of this Agreement.
          15. Entire Agreement. This Agreement contains the entire agreement
between the Parties regarding the subject matter hereof and supersedes all prior
agreements,

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understandings, arrangements and discussions between the Parties regarding such
subject matter.
          16. Counterparts. This Agreement may be signed in counterparts, each
of which shall be deemed an original but all of which shall be deemed to
constitute a single instrument.
          IN WITNESS WHEREOF, each of the undersigned entities has caused this
Agreement to be signed by its duly authorized representatives as of the date
written below.

                  PROVIDER:   RECIPIENT:    
 
                IFL CORP.   [COMPANY NAME]    
 
               
 
      [Address]                      
By:
 
 
  By:  
 
   
Name:
 
 
  Name:  
 
   
Title
 
 
  Title  
 
   

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EXHIBIT C
BIDDING PROCEDURES ORDER

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

         
 
      Chapter 11
In re:
       
 
      Case No. 08-13589 (MG)
IFL Corp.,
       
 
       
 
  Debtor.    

ORDER UNDER 11 U.S.C. § 105(a) AND FED. R. BANKR. P. 2002 AND 9014
APPROVING (I) BIDDING PROCEDURES, (II) CERTAIN BID PROTECTIONS, (III)
FORM AND MANNER OF SALE NOTICES, AND (IV) SETTING OF A SALE
HEARING
          Upon the motion, dated September 19, 2008 (the “Motion”),1 of the
above-captioned debtor and debtor-in-possession (the “Debtor” or “Seller”) for
orders under 11 U.S.C. §§ 363 and 365 and Fed. R. Bankr. P. 2002, 6004, 6006,
and 9014 (a) approving (i) bidding procedures, (ii) certain bid protections,
(iii) the form and manner of sale notices, and (iv) the sale hearing date (the
“Sale Hearing”), and (b) authorizing and approving (i) the sale of substantially
all of the Debtor’s assets (the “Assets”) free and clear of liens, claims, and
encumbrances (the “Sale”) to the Purchaser, (ii) the assumption by the Seller
and assignment to the Purchaser of certain executory contracts and unexpired
leases (collectively, the “Assumed Contracts”), and (iii) the assumption of
certain liabilities (collectively, the “Assumed Liabilities”) by the Purchaser;
and the Court having reviewed the Motion; and the Court having considered the
arguments of counsel at the hearing held on October 10, 2008 (the “Hearing”);
and upon the record of the Hearing; and after due deliberation thereon, and
sufficient cause appearing therefor,
          IT IS HEREBY FOUND AND DETERMINED THAT:2
          A. The Court has jurisdiction over this matter and over the property
of the
 

1   Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Motion.   2   Findings of fact shall be
construed as conclusions of law and conclusions of law shall be construed as
findings of fact when appropriate. See Fed. R. Bankr. P. 7052.

 

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Debtor and its bankruptcy estate pursuant to 28 U.S.C. §§ 157(a) and 1334.
          B. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A),
(N), and (O).
          C. The notice given by the Debtor of the Motion and the Hearing
constitutes due and sufficient notice thereof.
          D. The Debtor has articulated good and sufficient reasons for
approving (i) the Bidding Procedures, (ii) the granting of certain bid
protections as provided in the Agreement, (iii) the manner of notice of the
Motion, the Sale Hearing, and the assumption and assignment of the Assumed
Contracts, (iv) the form of notice of the Motion and the Sale Hearing to be
distributed to creditors and other parties in interest, including prospective
bidders, (v) the form of notice of the Cure Amounts and the assumption of the
Assumed Contracts to be filed with the Court and served on parties to each
Assumed Contract, and (vi) the scheduling of the Sale Hearing.
          E. The Debtor’s payment to the Purchaser (as set forth in the
Agreement), of the Break-Up Fee (the “Bid Protection”) (i) is an actual and
necessary cost and expense of preserving the Debtor’s estate, within the meaning
of section 503(b) of the Bankruptcy Code, (ii) is of substantial benefit to the
Debtor’s estate, (iii) is reasonable and appropriate, including in light of the
size and nature of the Sale and the efforts that have been and will be expended
by the Purchaser notwithstanding that the proposed Sale is subject to higher or
better offers for the Assets, (iv) was negotiated by the parties at arm’s length
and in good faith, and (v) is necessary to ensure that the Purchaser will
continue to pursue its proposed acquisition of the Assets. The Bid Protection
was a material inducement for, and condition of, the Purchaser’s entry into the
Agreement. The Purchaser is unwilling to commit to hold open its offer to
purchase the Assets under the terms of the Agreement unless it is assured of
payment of the Bid Protection. Further, because the Bid Protection induced the
Purchaser to research the value of the Assets and submit a bid that will serve
as a minimum or floor bid on which other bidders can rely, the Purchaser has
provided a benefit to the Debtor’s estate which the Debtor believes will
increase the likelihood

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that the price at which the Assets are sold will reflect their true worth.
Finally, absent authorization of the Bid Protection, the Debtor believes that it
may lose the opportunity to obtain the highest or otherwise best available offer
for the Assets.
          F. The Bidding Procedures are reasonable and appropriate and represent
the best method for maximizing the realizable value of the Assets.
          THEREFORE, IT IS ORDERED, ADJUDGED, AND DECREED THAT:
          2. The Bidding Procedures, as set forth on Exhibit 1 attached hereto
and incorporated herein by reference as if fully set forth in this Order, are
hereby approved and shall govern all proceedings relating to the Agreement and
any Subsequent Bids (as defined in the Bidding Procedures) for the Assets in the
Bidding Process.
          3. The Debtor, in consultation with the Committee (if one is appointed
in the Debtor’s case): (i) may determine which Qualified Bid, if any, is the
highest or otherwise best offer, and (ii) may reject at any time, any bid (other
than the Purchaser’s bid) that is: (a) inadequate or insufficient, (b) not in
conformity with the requirements of the Bankruptcy Code, the Bidding Procedures,
or the terms and conditions of the Sale, or (c) contrary to the best interests
of the Debtor, its estate and creditors as determined by the Debtor and
Committee (if one is appointed in the Debtor’s case). Notwithstanding the
foregoing, the Debtor, in consultation with the Committee (if one is appointed
in the Debtor’s case), may in the exercise of its reasonable discretion,
determine that a bid that is not otherwise a Qualified Bid is the highest and
best bid for the Assets. The Debtor, in consultation with the Committee (if one
is appointed in the Debtor’s case), is authorized to terminate the Bidding
Process or the Auction at any time if it determines that the Bidding Process
will not maximize the value of the Assets to be realized by the Debtor’s estate.
          4. The Sale Hearing shall be held before the undersigned United States
Bankruptcy Judge on October 28, 2008 at 10:00 a.m. (prevailing Eastern time) in
the United States Bankruptcy Court for the Southern District of New York, One
Bowling Green, Room 501, New York, New York 10004, at which time the Court shall
consider the Motion, the Successful

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Bidder, and confirm the results of the Auction, if any.
          5. Objections to the Sale of the Assets shall be filed and served no
later than 4:00 p.m. (prevailing Eastern time) on October 23, 2008 (the
“Objection Deadline”).
          6. The failure of any objecting person or entity to timely file its
objection by the Objection Deadline shall be a bar to the assertion, at the Sale
Hearing or thereafter, of any objection to the Motion, the Sale, or the Debtor’s
consummation and performance of the Agreement (including the transfer of the
Assets, Assumed Contracts free and clear of all Liens and Claims), if authorized
by the Court.
          7. The Sale Hearing may be adjourned from time to time without further
notice to creditors or parties in interest other than by announcement of the
adjournment in open court or on the Court’s calendar on the date scheduled for
the Sale Hearing or any adjourned date.
          8. The Bid Protection, as more fully described in the Agreement is
hereby approved. The Debtor’s obligation to pay the Bid Protection, as provided
by the Agreement, shall survive termination of the Agreement and, until paid,
shall constitute an administrative expense pursuant to Bankruptcy Code Section
507(b) and the Debtor shall be authorized to pay the Bid Protection to the
Purchaser in accordance with the terms of the Agreement without further order of
this Court.
          9. Notice of (a) the Motion, (b) the Sale Hearing, and (c) the
proposed assumption and assignment of the Assumed Contracts to the Purchaser
pursuant to the Agreement or to a Successful Bidder shall be good and
sufficient, and no other or further notice shall be required, if given as
follows:
          (a) Notice Of Sale Hearing. Within five (5) business days after entry
of this Order (the “Mailing Date”), the Debtor shall serve the Motion, the
Agreement, the proposed Sale Order, the Bidding Procedures, and a copy of the
Bidding Procedures Order by first-class mail, postage prepaid, upon (i) all of
the Debtor’s known creditors, (ii) all entities known to have expressed a bona
fide interest in acquiring the Assets, (iii) any party known to have or to
assert a lien on any of the Assets, (iv) the Securities and Exchange Commission,
(v) the Office of the

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United States Trustee, (vi) counsel for the Committee, if any is appointed,
(vii) all federal, state and local regulatory authorities with jurisdiction over
the Debtor, (viii) the office of the United States Attorney for the Southern
District of New York, (ix) all non-debtor parties to the Assumed Contracts,
(x) all parties who entered a notice of appearance and request for service of
pleadings pursuant to Fed. R. Bankr. P. 2002, and (xi) any parties identified by
the Debtor as having an interest in bidding on the Assets.
          (b) Sale Notice. On or before the Mailing Date, the Debtor shall serve
by first-class mail, postage prepaid, a notice of the Sale (the “Sale Notice”),
substantially in the form annexed hereto as Exhibit 2, upon all known creditors
of the Debtor.
          (c) Cure Notice. No later than fifteen (15) business days after the
entry of this Order, the Debtor shall file with the Court and serve on all
nondebtor parties to the Assumed Contracts a notice (the “Cure Notice”),
substantially in the form annexed hereto as Exhibit 3, of the cure amount
necessary to assume each Assumed Contract (the “Cure Amount”). The nondebtor
party to the Assumed Contract shall have ten (10) days from the service of the
Cure Notice to object to the Cure Amount and must state in its objection with
specificity what Cure is required (with appropriate documentation in support
thereof). If no objection is timely received, the Cure Amount set forth in the
Cure Notice shall be controlling, notwithstanding anything to the contrary in
any Assumed Contract or any other document, and the nondebtor party to the
Assumed Contract shall be forever barred from asserting any other claims against
the Debtor, the Purchaser, or the Successful Bidder (as appropriate), or the
property of either of them, as to such Assumed Contract. The inclusion of any
Assumed Contract in the Cure Notice shall not constitute an assumption by the
Debtor of any such Assumed Contract, nor shall it constitute an admission or a
waiver with respect to the Debtor’s right to assume or reject any such Assumed
Contract.
          (d) Assumption Notice. Only if the Purchaser is not the Successful
Bidder, within two (2) business days of the conclusion of the Auction, the
Debtor shall cause a notice, substantially in the form of the notice attached
hereto as Exhibit 4, to be sent to each nondebtor

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party to an Assumed Contract identifying the Successful Bidder and the executory
contracts and/or unexpired leases to be assumed as part of the Sale. Any
objection to the assumption and assignment of any Assumed Contract shall be
filed no later than 4:00 p.m. (prevailing Eastern time) two (2) business days
prior to the Sale Hearing.
          10. This Court shall retain jurisdiction to hear and determine all
matters arising from the implementation of this Order.
          11. Except as otherwise specifically set forth in this Order, the
rights of all parties-in-interest are hereby preserved in all respects.
          12. The requirement under Rule 9013-1(b) of the Local Bankruptcy Rules
for the United States Bankruptcy Court for the Southern District of New York for
the service and filing of a separate memorandum of law is deemed satisfied by
the Motion.
Dated:                      ___, 2008
            New York, New York

     
 
   
 
  Honorable Martin Glenn
 
  United States Bankruptcy Judge

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Exhibit 1
Bidding Procedures

 

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BIDDING PROCEDURES
Assets To Be Sold
          The assets proposed to be sold are the Assets (as defined in the
Agreement and as more fully set forth in section 2.1 of the Agreement), that
comprise substantially all of the Seller’s assets.
As Is, Where Is
          The sale of the Assets shall be on an “as is, where is” basis and
without representations or warranties of any kind, nature, or description by the
Debtor, its agents, or estate, except, with respect to the Purchaser, to the
extent set forth in the Agreement and, with respect to a Successful Bidder, to
the extent set forth in the relevant purchase agreement of such Successful
Bidder approved by the Bankruptcy Court.
Free Of Any And All Claims And Interests
          The Assets shall be sold free and clear of all pledges, liens,
security interests, encumbrances, claims, charges, options, and interests
thereon (collectively, the “Claims and Interests”) and the Claims and Interests,
if any, shall attach to the net proceeds of the sale of such Assets.
Participation Requirements
          Any person who wishes to participate in the Bidding Process (a
“Potential Bidder”) must become a Qualified Bidder. As a prerequisite to
becoming a Qualified Bidder, a Potential Bidder, other than the Purchaser, must
deliver (unless previously delivered) to the Seller, who shall promptly deliver
copies to the Official Committee of Unsecured Creditors (the “Committee”), if
one is appointed in the Debtor’s case: (i) an executed confidentiality agreement
substantially in the form attached hereto as Exhibit 2, (ii) current audited
financial statements of the Potential Bidder, or, if the Potential Bidder is an
entity formed for the purpose of acquiring the Assets, current audited financial
statements of the equity holders of the Potential Bidder who shall guarantee the
obligations of the Potential Bidder, or such other form of financial disclosure

 

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and credit-quality support or enhancement acceptable to the Seller, and (iii) a
preliminary (non-binding) written proposal regarding (a) the purchase price
range, (b) any Assets expected to be excluded, (c) the structure and financing
of the transaction (including, but not limited to, the sources of financing of
the Purchase Price (as defined in the Agreement) and the requisite deposit,
(d) any anticipated regulatory approvals required to close the transaction, the
anticipated time frame and any anticipated impediments for obtaining such
approvals, (e) any conditions to closing that it may wish to impose in addition
to those set forth in the Agreement, and (f) the nature and extent of additional
due diligence it may wish to conduct and the date by which such due diligence
will be completed.
          A Potential Bidder who delivers the documents described in the
previous subparagraphs above and whose financial information and credit-quality
support or enhancement demonstrate the financial capability of such Potential
Bidder to consummate the Sale, if selected as the successful bidder, and who the
Seller, in consultation with the Committee (if one is appointed in the Debtor’s
case), determine (based on availability of financing, experience, and other
considerations) to be able to consummate the Sale within the time frame provided
by the Agreement shall be deemed a “Qualified Bidder.” As promptly as
practicable, after a Potential Bidder delivers all of the materials required
above, the Seller, in consultation and with the Committee (if one is appointed
in the Debtor’s case), shall determine, and shall notify the Potential Bidder,
whether such Potential Bidder is a Qualified Bidder. At the same time that the
Seller notifies the Potential Bidder that it is a Qualified Bidder, the Seller
shall allow the Qualified Bidder to begin to conduct due diligence with respect
to the Assets as provided below. Notwithstanding the foregoing, the Purchaser
for itself or on behalf of its designee, assignee or affiliate, shall be deemed
a Qualified Bidder for purposes of the Bidding Process.
Due Diligence
          All due diligence shall be coordinated by the Seller, and all requests
for due diligence materials and related information shall be made to counsel for
the Seller, Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th Floor, New
York, New York 10022, Attention:

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Sharon Levine, Esq. (slevine@lowenstein.com) and S. Jason Teele, Esq.
(steele@lowenstein.com), or any other professional retained by the Seller and as
directed by the Seller.
          The Seller shall afford each Qualified Bidder access to due diligence
materials reasonably requested; provided, however, that the Seller, in its
reasonable discretion, may permit Potential Bidders to conduct limited due
diligence, provided such Potential Bidders execute a confidentiality agreement
substantially in the form attached hereto as Exhibit 1, for the limited purpose
of permitting such Potential Bidders to determine whether or not they desire to
submit a Qualified Bid.
          The Seller shall coordinate all reasonable requests for information
and due diligence access from Qualified Bidders. Any additional due diligence
shall not continue after the Bid Deadline, except as otherwise consented to by
the Seller. The Seller may, in its discretion, coordinate diligence efforts such
that multiple Qualified Bidders have simultaneous access to due diligence
materials. The Seller shall not be obligated to furnish any information relating
to the Assets to any person other than to Qualified Bidders.
          Each Qualified Bidder shall be deemed to acknowledge and represent
that it has had an opportunity to conduct any and all due diligence regarding
the Assets prior to making its offer, that it has relied solely upon its own
independent review, investigation, and/or inspection of any documents and/or the
Assets in making its bid, and that it did not rely upon any written or oral
statements, representations, promises, warranties, or guaranties whatsoever,
whether express, implied, by operation of law or otherwise, regarding the
Assets, or the completeness of any information provided in connection therewith,
the Bidding Process or the Auction (as defined herein), except, as to the
Successful Bidder, as expressly stated in the definitive agreement with such
Successful Bidder approved by the Bankruptcy Court.
Bid Deadline
          All Bids (as defined below) must be submitted in writing so that they
are actually received no later than 5:00 p.m. (prevailing Eastern time) on
October 23, 2008 (the “Bid

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Deadline”). Each Qualified Bidder (as defined below) must deliver copies of its
Bid to Lowenstein Sandler PC, counsel for the Debtor, 1251 Avenue of the
Americas, 18th Floor, New York, New York 10022, Attention: Sharon Levine, Esq.
and S. Jason Teele, Esq., or by e-mail to slevine@lowenstein.com and
steele@lowenstein.com. The Debtor’s counsel shall serve copies of all Bids
received on (i) counsel for the Purchaser, Akin Gump Strauss Hauer & Feld LLP,
1700 Pacific Ave, Suite 4100, Dallas, Texas 75201, Attention: Robert W. Dockery,
Esq. and Kevin D. Rice, Esq., (ii) counsel for any official committees appointed
in the Debtor’s case, and (iii) the Office of the United States Trustee.
Bid Requirements
          All bids must include the following documents: (i) a letter stating
that the bidder’s offer is irrevocable for the period set forth in the Bidding
Procedures, (ii) an executed copy of the Agreement marked to show amendments and
modifications to the Agreement, purchase price, and proposed schedules, (iii) a
good faith deposit of ten percent (10%) of the aggregate bid amount (the “Good
Faith Deposit”), and (iv) satisfactory written evidence of a commitment for
financing or other ability to consummate the proposed transaction.
Qualified Bids
          To be deemed a “Qualified Bid,” a bid must be received by the Bid
Deadline and, among other things, (i) must be on terms and conditions (other
than the amount of the consideration and the particular liabilities being
assumed) that are substantially similar to, and are not materially more
burdensome or conditional to Seller than those contained in the Agreement,
(ii) must not be contingent on obtaining financing or the outcome of unperformed
due diligence beyond the contingencies set forth in the Agreement, (iii) must
have a value (inclusive of any credit bid component) greater than the purchase
price reflected in the Agreement plus the amount of the Break-Up Fee, (iv) must
not be conditioned on bid protections, other than those contemplated in the
Bidding Procedures, (v) must contain acknowledgements and representations as set
forth in the Bidding Procedures, and (vi) include a commitment to consummate the
Sale within not more than fifteen (15) days after entry of a

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Bankruptcy Court order approving such purchase. The Seller, in consultation with
the Committee (if one is appointed in the Debtor’s case), shall have the right
to deem a bid a Qualified Bid, if such bid does not conform to one or more of
the aforementioned requirements, provided however, that such bid must have a
value greater than or equal to the sum of the Purchase Price plus the amount of
the Break-Up Fee, taking into account all material terms of any such bid. Each
Qualified Bid other than that of the Purchaser shall be called a “Subsequent
Bid.”
Bid Protection
          Recognizing the Purchaser’s expenditure of time, energy, and
resources, the Seller has agreed to provide certain bid protections to the
Purchaser. Specifically, the Seller has determined that the Agreement will
further the goals of the Bidding Procedures by setting a floor which all other
Qualified Bids must exceed and, therefore, is entitled to be selected as the
Purchaser. As a result, the Seller has agreed that if the Seller sell the Assets
to a Successful Bidder other than the Purchaser, the Seller shall, in certain
circumstances, pay to the Purchaser a Break-Up Fee equal to three percent (3%)
of the Aggregate Cash Consideration (as defined in the Agreement). The payment
of the Break-Up Fee shall be governed by the provisions of the Agreement and the
Bidding Procedures Order.
Conduct Of Auction
          If the Debtor receives at least one Qualified Bid in addition to the
Agreement, the Debtor will conduct an auction (the “Auction”) on October 27,
2008, at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas, 18th
Floor, New York, New York, at 10:00 a.m. (prevailing Eastern time). At least two
(2) business days prior to the Auction, each Qualified Bidder with a Qualified
Bid must inform the Seller whether it intends to participate in the Auction and
at least one (1) business day prior to the Auction, the Seller will provide such
bidders copies of the Qualified Bid which the Seller believes is the highest or
otherwise best offer for the Assets, (iii) all Qualified Bidders will be
entitled to be present for all Subsequent Bids, and (iv) bidding at the Auction
will begin with the highest or otherwise best Qualified Bid,

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continue in minimum increments of at least $25,000, and conclude after each
participating bidder has had the opportunity to submit one or more additional
Subsequent Bids.
Participation in the Auction
          Only Qualified Bidders who have submitted Qualified Bids will be
eligible to participate in the Auction. Only the authorized representatives of
each of the Qualified Bidders, the Purchaser, the Committee (if one is appointed
in the Debtor’s case), the Office of the United States Trustee, and the Seller
shall be permitted to attend the Auction. At the Auction, Qualified Bidders will
be permitted to increase and/or improve their bids. Unless otherwise agreed to
by the Seller, no Qualified Bidder will be permitted more than one-half hour to
respond to the previous bid at Auction and, at the expiration of such time
(unless extended), the Auction shall conclude.
Selection of Successful Bid
          As soon as practicable after the conclusion of the Auction, the Seller
will, in consultation with its attorneys and financial advisors, review each
Qualified Bid and identify the highest or otherwise best offer for the Assets
(the “Successful Bid”) and the bidder making such bid (the “Successful Bidder”).
The Seller will sell the Assets for the highest or otherwise best Qualified Bid
to the Successful Bidder upon the approval of such Qualified Bid by the
Bankruptcy Court after the hearing (the “Sale Hearing”).
Sale Hearing
          The Sale Hearing is currently scheduled for October 28, 2008 at
10:00 a.m. (prevailing Eastern time) before the Honorable Martin Glenn, United
States Bankruptcy Judge, in the United States Bankruptcy Court for the Southern
District of New York, located at One Bowling Green, Room 501, New York, New York
10004. The Sale Hearing may be adjourned or rescheduled by the Seller without
notice other than by an announcement of the adjourned date at the Sale Hearing.
          If no Qualified Bids other than that of the Purchaser are received,
the Seller will proceed with the sale of the Assets to the Purchaser following
entry of the order approving the

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Sale. If the Seller receives additional Qualified Bids, then, at the Sale
Hearing, the Seller shall seek approval of the Successful Bid, as well as the
second highest or best Qualified Bid (the “Alternate Bid” and such bidder, the
“Alternate Bidder”). A bid will not be deemed accepted by the Seller unless and
until approved by the Bankruptcy Court. Following approval of the sale to the
Successful Bidder, if the Successful Bidder fails to consummate the sale for
specified reasons, then the Alternate Bid will be deemed to be the Successful
Bid and the Seller will effectuate a sale to the Alternate Bidder without
further order of the Bankruptcy Court.
Return Of Good Faith Deposits
          Good faith deposits of all Qualified Bidders (except for the
Successful Bidder) shall be held in an interest-bearing escrow account and all
Qualified Bids shall remain open until two (2) business days following the
closing of the Sale (the “Return Date”). Notwithstanding the foregoing, the good
faith deposit submitted by the Successful Bidder, together with interest
thereon, shall be applied against the payment of the Purchase Price upon closing
of the Sale to the Successful Bidder. If a Successful Bidder fails to consummate
an approved sale, the Seller will not have any obligation to return such good
faith deposit and it shall irrevocably become property of the Seller. On the
Return Date, the Seller will return the good faith deposits of all other
Qualified Bidders, together with the accrued interest thereon.
Reservation of Rights
          The Seller (i) may determine which Qualified Bid, if any, is the
highest or otherwise best offer, and (ii) may reject at any time, any bid (other
than the Purchaser’s bid) that is: (a) inadequate or insufficient, (b) not in
conformity with the requirements of the Bankruptcy Code, the Bidding Procedures,
or the terms and conditions of the Sale, or (c) contrary to the best interests
of the Seller, its estate and creditors as determined by the Seller in its sole
discretion.

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EXHIBIT 1 TO BIDDING PROCEDURES
(Nondisclosure Agreement)

 

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NONDISCLOSURE AGREEMENT
          This Nondisclosure Agreement (this “Agreement”) by and between
                    , a                      corporation (the “Recipient”), and
IFL Corp. (the “Provider”) is dated as of the latest date set forth on the
signature page hereto. Recipient and Provider are each a “Party” and
collectively, the “Parties”).
          1. General. In connection with the consideration of a possible
negotiated transaction (a “Possible Transaction”) between the Parties, Provider
is prepared to make available to the Recipient certain “Diligence Material” (as
defined in Section 2 below) in accordance with the provisions of this Agreement,
and both Parties agree to take or abstain from taking certain other actions as
hereinafter set forth.
          2. Definitions. (a) The term “Diligence Material” means information
concerning the Provider which has been or is furnished to the Recipient or its
Representatives in connection with the Recipient’s evaluation of a Possible
Transaction, including its business, financial condition, operations, assets and
liabilities, and includes all notes, analyses, compilations, studies,
interpretations or other documents prepared by the Recipient or its
Representatives which contain or are based upon, in whole or in part, the
information furnished by the Recipient hereunder. The term Diligence Material
does not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Recipient or its
Representatives in breach of this Agreement, (ii) was within the Recipient’s
possession prior to its being furnished to the Recipient by or on behalf of the
Provider, provided that the source of such information was not bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the Provider with respect to such information,
or (iii) is or becomes available to the Recipient on a non-confidential basis
from a source other than the Provider or its Representatives, provided that such
source is not bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, the Provider with respect
to such information.

 

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          (b) The term “Representatives” shall include the directors, officers,
employees, agents, partners or advisors (including, without limitation,
attorneys, accountants, consultants, bankers and financial advisors) of the
Recipient or the Provider, as applicable.
          (c) The term “Person” includes the media and any corporation,
partnership, group, individual or other entity.
          3. Use of Diligence Material. The Recipient shall, and it shall cause
its Representatives to, use the Diligence Material solely for the purpose of
evaluating a Possible Transaction, keep the Diligence Material confidential,
and, subject to Section 5, will not, and will cause its Representatives not to,
disclose any of the Diligence Material in any manner whatsoever; provided,
however, that any of such information may be disclosed to the Recipient’s
Representatives who need to know such information for the sole purpose of
helping the Recipient evaluate a Possible Transaction. The Recipient agrees to
be responsible for any breach of this Agreement by any of the Recipient’s
Representatives. This Agreement does not grant the Recipient or any of its
Representatives any license to use the Provider’s Diligence Material except as
provided herein.
          4. Legally Required Disclosure. If the Recipient or its
Representatives are requested or required (by oral questions, interrogatories,
other requests for information or documents in legal proceedings, subpoena,
civil investigative demand or other similar process) to disclose any of the
Diligence Material, the Recipient shall provide the Provider with prompt written
notice of any such request or requirement together with copies of the material
proposed to be disclosed so that the Provider may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Provider, the Recipient or its Representatives are
nonetheless legally compelled to disclose Diligence Material or otherwise be
liable for contempt or suffer other censure or penalty, the Recipient or its
Representatives may, without liability hereunder, disclose to such requiring
person only that portion of such Diligence Material or any such facts which the
Recipient or its Representatives is legally required to

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disclose, provided that the Recipient and/or its Representatives cooperate with
the Provider to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded such Diligence Material
or such facts by the person receiving the material.
          5. Return or Destruction of Diligence Material. If Recipient decides
that it does not wish to proceed with a Possible Transaction, it will promptly
inform the Provider of that decision. In that case, or at any time upon the
request of the Provider for any reason, the Recipient will, and will cause its
Representatives to, within five (5) business days of receipt of such notice,
destroy or return all Diligence Material in any way relating to the Provider or
its products, services, employees or other assets or liabilities, and no copy or
extract thereof (including electronic copies) shall be retained, except that
Recipient’s outside counsel may retain one copy to be kept confidential and used
solely for archival purposes. The Recipient shall provide to the Provider a
certificate of compliance with the previous sentence signed by an executive
officer of the Recipient. Notwithstanding the return or destruction of the
Diligence Material, the Recipient and its Representatives will continue to be
bound by the Recipient’s obligations hereunder with respect to such Diligence
Material.
          6. Maintaining Privilege. If any Diligence Material includes materials
or information subject to the attorney-client privilege, work product doctrine
or any other applicable privilege concerning pending or threatened legal
proceedings or governmental investigations, the Recipient understands and agrees
that the Recipient and the Provider have a commonality of interest with respect
to such matters and it is the desire, intention and mutual understanding of the
Parties that the sharing of such material by Provider is not intended to, and
shall not, waive or diminish in any way the confidentiality of such material or
its continued protection under the attorney-client privilege, work product
doctrine or other applicable privilege. All Diligence Material provided by the
Recipient that is entitled to protection under the attorney-client privilege,
work product doctrine or other applicable privilege shall remain entitled to
such protection under these privileges, this Agreement, and under the joint
defense doctrine.

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          7. Not a Transaction Agreement. The Recipient understands and agrees
that no contract or agreement providing for a Possible Transaction exists
between the Parties unless and until a final definitive agreement for a Possible
Transaction has been executed and delivered, and the Recipient hereby waives, in
advance, any claims (including, without limitation, breach of contract) relating
to the existence of a Possible Transaction unless and until the Parties shall
have entered into a final definitive agreement for a Possible Transaction. The
Recipient also agrees that, unless and until a final definitive agreement
regarding a Possible Transaction has been executed and delivered, neither Party
will be under any legal obligation of any kind whatsoever with respect to such
Possible Transaction by virtue of this Agreement except for the matters
specifically agreed to herein. Either Party may terminate discussions and
negotiations with the other Party at any time.
          8. No Representations or Warranties; No Obligation to Disclose. The
Recipient understands and acknowledges that neither the Provider nor its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of the Diligence Material furnished by or on behalf
of the Provider and shall have no liability to the Recipient, its
Representatives or any other Person relating to or resulting from the use of the
Diligence Material furnished to the Recipient or its Representatives or any
errors therein or omissions therefrom. As to the information delivered to the
Recipient, the Provider will only be liable for those representations or
warranties which are made in a final definitive agreement regarding a Possible
Transaction, when, as and if executed, and subject to such limitations and
restrictions as may be specified therein. Nothing in this Agreement shall be
construed as obligating a the Provider to provide, or to continue to provide,
any information to any Person.
          9. Modifications and Waiver. No provision of this Agreement can be
waived or amended in favor of either Party except by written consent of the
other Party, which consent shall specifically refer to such provision and
explicitly make such waiver or amendment. No failure or delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or

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future exercise thereof or the exercise of any other right, power or privilege
hereunder.
          10. Remedies. Recipient understands and agrees that money damages
would not be a sufficient remedy for any breach of this Agreement by Recipient
or any of its Representatives and that Provider shall be entitled to equitable
relief, including injunction and specific performance, as a remedy for any such
breach or threat thereof. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement, but shall be in addition to all other
remedies available at law or equity to Provider.
          11. Legal Fees. In the event of litigation relating to this Agreement,
if a court of competent jurisdiction determines that either Recipient or its
Representatives has breached this Agreement, then the Recipient shall be liable
and pay to the Provider the reasonable legal fees and costs incurred in
connection with such litigation, including any appeal therefrom.
          12. Governing Law. This Agreement is for the benefit of the Provider
and shall be governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed entirely within
such State.
          13. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by any court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants or restrictions contained in this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and if a
covenant or provision is determined to be unenforceable by reason of its extent,
duration, scope or otherwise, then the Parties intend and hereby request that
the court or other authority making that determination shall only modify such
extent, duration, scope or other provision to the extent necessary to make it
enforceable and enforce it in its modified form for all purposes of this
Agreement.
          14. Term. This Agreement shall terminate one (1) year after the date
of this Agreement.
          15. Entire Agreement. This Agreement contains the entire agreement
between the Parties regarding the subject matter hereof and supersedes all prior
agreements,

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understandings, arrangements and discussions between the Parties regarding such
subject matter.
          16. Counterparts. This Agreement may be signed in counterparts, each
of which shall be deemed an original but all of which shall be deemed to
constitute a single instrument.
          IN WITNESS WHEREOF, each of the undersigned entities has caused this
Agreement to be signed by its duly authorized representatives as of the date
written below.

              PROVIDER:   RECIPIENT:
 
            IFL CORP.   [COMPANY NAME]
 
                    [Address]  
By:
      By:    
 
           
Name:
      Name:    
 
           
Title
      Title    
 
           

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Exhibit 2
Sale Notice

 

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LOWENSTEIN SANDLER PC
Sharon L. Levine, Esq.
S. Jason Teele, Esq.
Timothy R. Wheeler, Esq.
1251 Avenue of the Americas, 18th Floor
New York, New York 10020
(212) 262-6700 (Telephone)
(212) 262-7402 (Facsimile)
-and-
65 Livingston Avenue
Roseland, New Jersey 07068
(973) 597-2500 (Telephone)
(973) 597-2400 (Facsimile)
Proposed Counsel to the Debtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

         
 
      Chapter 11
In re:
       
 
      Case No. 08-13589 (MG)
IFL Corp.,
       
 
       
 
  Debtor.    

NOTICE OF SALE OF CERTAIN ASSETS AT AUCTION
          PLEASE TAKE NOTICE OF THE FOLLOWING:
          1. Pursuant to the Order Under 11 U.S.C. § 105(a) And Fed. R. Bankr.
P. 2002 And 9014 Approving (i) Bidding Procedures, (ii) Certain Bid Protections,
(iii) Form And Manner Of Sale Notices, And (iv) Sale Hearing Date (the “Bidding
Procedures Order”) entered by the United States Bankruptcy Court for the
Southern District of New York (the “Bankruptcy Court”) on October 10, 2008, the
above-captioned debtor and debtor-in-possession (the “Debtor”) is offering
substantially all of its assets (the “Assets”) for sale. Capitalized terms used
but not otherwise defined in this notice shall have the meanings ascribed to
them in the Bidding Procedures.

 

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          2. All interested parties are invited to make an offer to purchase the
Assets in accordance with the terms and conditions approved by the Bankruptcy
Court (the “Bidding Procedures”). Pursuant to the Bidding Procedures, the Debtor
may conduct an auction for the Assets (the “Auction”) beginning at 10:00 a.m. on
October 27, 2008 at the offices of Lowenstein Sandler PC, 1251 Avenue of the
Americas, 18th Floor, New York, New York 10022
          3. Participation at the Auction is subject to the Bidding Procedures
and the Bidding Procedures Order. A copy of the Bidding Procedures is attached
hereto as Exhibit 1.
          4. The Debtor has accepted a bid only when the bid has been approved
by the Bankruptcy Court at the Sale Hearing. Notwithstanding Bankruptcy Court
approval of a sale pursuant to the terms of a bid by a Qualified Bidder, the
Good Faith Deposits of all bidders will be retained by the Debtor, and all bids
will remain open until two (2) business days following the closing of the Sale
(the “Return Date”); provided, however, that if the Debtor determines not to
sell the Assets, the Good Faith Deposits of all Qualified Bidders will be
returned by the Debtor within forty-eight (48) hours of the Auction. Upon
failure to consummate the sale of the Assets because of a breach or failure on
the part of the Successful Bidder, the Debtor may select in its business
judgment the next highest or otherwise best Qualified Bid to be the Successful
Bid without further order of the Court. On the Return Date, the Debtor will
return the Good Faith Deposits of all Qualified Bidders, except the Successful
Bidder, with accrued interest.
          5. The Debtor may: (a) determine, in its business judgment, which
Qualified Bid is the highest or otherwise best offer and (b) reject at any time
before entry of an order of the Bankruptcy Court approving a Qualified Bid any
bid which, in the Debtor’s sole discretion, is (i) inadequate or insufficient,
(ii) not in conformity with the requirements of the Bankruptcy Code, the Bidding
Procedures, or the terms and conditions of sale, or (iii) contrary to the best
interests of the Debtor, its estate, and its creditors.
          6. A hearing to approve the Sale of the Assets to the highest and best
bidder will be held on October 28, 2008 at 10:00 a.m. Prevailing Eastern Time at
the United States Bankruptcy Court for the Southern District of New York, One
Bowling Green, Room 501, New

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York, New York 10004, before the Honorable Martin Glenn, United States
Bankruptcy Judge. The hearing on the Sale my be adjourned without notice other
than an adjournment in open court.
          7. This notice is qualified in its entirety by the Bidding Procedures
Order.

     
 
  LOWENSTEIN SANDLER PC
 
   
 
  /s/ S. Jason Teele
 
   
 
  Sharon L. Levine, Esq.
 
  S. Jason Teele, Esq.
 
  Timothy R. Wheeler, Esq.
 
  1251 Avenue of the Americas, 18th Floor
 
  New York, New York 10020
 
  (212) 262-6700 (Telephone)
 
  (212) 262-7402 (Facsimile)
 
   
 
  -and-
 
   
 
  65 Livingston Avenue
 
  Roseland, New Jersey 07068
 
  (973) 597-2500 (Telephone)
 
  (973) 597-2400 (Facsimile)
 
   
 
  Proposed Counsel to the Debtor and Debtor in Possession

Dated:                     , 2008
            New York, New York

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EXHIBIT 1
BIDDING PROCEDURES
Assets To Be Sold
          The assets proposed to be sold are the Assets (as defined in the
Agreement and as more fully set forth in section 2.1 of the Agreement) which
comprise substantially all of the Seller’s assets.
As Is, Where Is
          The sale of the Assets shall be on an “as is, where is” basis and
without representations or warranties of any kind, nature, or description by the
Debtor, its agents, or estate, except, with respect to the Purchaser, to the
extent set forth in the Agreement and, with respect to a Successful Bidder, to
the extent set forth in the relevant purchase agreement of such Successful
Bidder approved by the Bankruptcy Court.
Free Of Any And All Claims And Interests
          The Assets shall be sold free and clear of all pledges, liens,
security interests, encumbrances, claims, charges, options, and interests
thereon (collectively, the “Claims and Interests”) and the Claims and Interests,
if any, shall attach to the net proceeds of the sale of such Assets.
Participation Requirements
          Any person who wishes to participate in the Bidding Process (a
“Potential Bidder”) must become a Qualified Bidder. As a prerequisite to
becoming a Qualified Bidder, a Potential Bidder, other than the Purchaser, must
deliver (unless previously delivered) to the Seller, who shall promptly deliver
copies to the Official Committee of Unsecured Creditors (the “Committee”), if
one is appointed in the Debtor’s case: (i) an executed confidentiality agreement
substantially in the form attached hereto as Exhibit 2, (ii) current audited
financial statements of the Potential Bidder, or, if the Potential Bidder is an
entity formed for the purpose of acquiring the Assets, current audited financial
statements of the equity holders of the Potential Bidder who

 

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shall guarantee the obligations of the Potential Bidder, or such other form of
financial disclosure and credit-quality support or enhancement acceptable to the
Seller, and (iii) a preliminary (non-binding) written proposal regarding (a) the
purchase price range, (b) any Assets expected to be excluded, (c) the structure
and financing of the transaction (including, but not limited to, the sources of
financing of the Purchase Price (as defined in the Agreement) and the requisite
deposit, (d) any anticipated regulatory approvals required to close the
transaction, the anticipated time frame and any anticipated impediments for
obtaining such approvals, (e) any conditions to closing that it may wish to
impose in addition to those set forth in the Agreement, and (f) the nature and
extent of additional due diligence it may wish to conduct and the date by which
such due diligence will be completed.
          A Potential Bidder who delivers the documents described in the
previous subparagraphs above and whose financial information and credit-quality
support or enhancement demonstrate the financial capability of such Potential
Bidder to consummate the Sale, if selected as a successful bidder, and who the
Seller, in consultation with the Committee (if one is appointed in the Debtor’s
case), determine (based on availability of financing, experience, and other
considerations) to be able to consummate the Sale within the time frame provided
by the Agreement shall be deemed a “Qualified Bidder.” As promptly as
practicable, after a Potential Bidder delivers all of the materials required
above, the Seller, in consultation and with the Committee (if one is appointed
in the Debtor’s case), shall determine, and shall notify the Potential Bidder,
whether such Potential Bidder is a Qualified Bidder. At the same time that the
Seller notify the Potential Bidder that it is a Qualified Bidder, the Seller
shall allow the Qualified Bidder to begin to conduct due diligence with respect
to the Assets as provided below. Notwithstanding the foregoing, the Purchaser
for itself or on behalf of its designee, assignee or affiliate, shall be deemed
a Qualified Bidder for purposes of the Bidding Process.
Due Diligence
          All due diligence shall be coordinated by the Seller, and all requests
for due diligence materials and related information shall be made to counsel for
the Seller, Lowenstein

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Sandler PC, 1251 Avenue of the Americas, 18th Floor, New York, New York 10022,
Attention: Sharon Levine, Esq. (slevine@lowenstein.com) and S. Jason Teele, Esq.
(steele@lowenstein.com), or any other professional retained by the Seller and as
directed by the Seller.
          The Seller shall afford each Qualified Bidder access to due diligence
materials reasonably requested; provided, however, that the Seller, in its
reasonable discretion, may permit Potential Bidders to conduct limited due
diligence, provided such Potential Bidders execute a confidentiality agreement
substantially in the form attached hereto as Exhibit 1, for the limited purpose
of permitting such Potential Bidders to determine whether or not they desire to
submit a Qualified Bid.
          The Seller shall coordinate all reasonable requests for information
and due diligence access from Qualified Bidders. Any additional due diligence
shall not continue after the Bid Deadline, except as otherwise consented to by
the Seller. The Seller may, in its discretion, coordinate diligence efforts such
that multiple Qualified Bidders have simultaneous access to due diligence
materials. The Seller shall not be obligated to furnish any information relating
to the Assets to any person other than to Qualified Bidders.
          Each Qualified Bidder shall be deemed to acknowledge and represent
that it has had an opportunity to conduct any and all due diligence regarding
the Assets prior to making its offer, that it has relied solely upon its own
independent review, investigation, and/or inspection of any documents and/or the
Assets in making its bid, and that it did not rely upon any written or oral
statements, representations, promises, warranties, or guaranties whatsoever,
whether express, implied, by operation of law or otherwise, regarding the
Assets, or the completeness of any information provided in connection therewith,
the Bidding Process or the Auction (as defined herein), except, as to the
Successful Bidder, as expressly stated in the definitive agreement with such
Successful Bidder approved by the Bankruptcy Court.

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Bid Deadline
          All Bids (as defined below) must be submitted in writing so that they
are actually received no later than 5:00 p.m. (prevailing Eastern time) on
October 23, 2008 (the “Bid Deadline”). Each Qualified Bidder (as defined below)
must deliver copies of its Bid to Lowenstein Sandler PC, counsel for the Debtor,
1251 Avenue of the Americas, 18th Floor, New York, New York 10022, Attention:
Sharon Levine, Esq. and S. Jason Teele, Esq., or by e-mail to
slevine@lowenstein.com and steele@lowenstein.com. Debtor’s counsel shall serve
copies of all Bids received on (i) counsel for the Purchaser, Akin Gump Strauss
Hauer & Feld LLP, 1700 Pacific Ave, Suite 4100, Dallas, Texas 75201, Attention:
Robert W. Dockery, Esq. and Kevin D. Rice, Esq., (ii) counsel for any official
committees appointed in the Debtor’s case, and (iii) the Office of the United
States Trustee.
Bid Requirements
          All bids must include the following documents: (i) a letter stating
that the bidder’s offer is irrevocable for the period set forth in the Bidding
Procedures, (ii) an executed copy of the Agreement marked to show amendments and
modifications to the Agreement, purchase price, and proposed schedules, (iii) a
good faith deposit of ten percent (10%) of the aggregate bid amount (the “Good
Faith Deposit”), and (iv) satisfactory written evidence of a commitment for
financing or other ability to consummate the proposed transaction.
Qualified Bids
          To be deemed a “Qualified Bid,” a bid must be received by the Bid
Deadline and, among other things, (i) must be on terms and conditions (other
than the amount of the consideration and the particular liabilities being
assumed) that are substantially similar to, and are not materially more
burdensome or conditional to Seller than those contained in the Agreement,
(ii) must not be contingent on obtaining financing or the outcome of unperformed
due diligence beyond the contingencies set forth in the Agreement, (iii) must
have a value (inclusive of any credit bid component) greater than the purchase
price reflected in the Agreement plus the amount of the Break-Up Fee, (iv) must
not be conditioned on bid protection,

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other than those contemplated in the Bidding Procedures, (v) must contain
acknowledgements and representations as set forth in the Bidding Procedures, and
(vi) include a commitment to consummate the Sale within not more than 15 days
after entry of a Bankruptcy Court order approving such purchase. The Seller, in
consultation with the Committee (if one is appointed in the Debtor’s case),
shall have the right to deem a bid a Qualified Bid, if such bid does not conform
to one or more of the aforementioned requirements, provided however, that such
bid must have a value greater than or equal to the sum of the Purchase Price
plus the amount of the Break-Up Fee, taking into account all material terms of
any such bid. Each Qualified Bid other than that of the Purchaser shall be
called a “Subsequent Bid.”
Bid Protection
          Recognizing the Purchaser’s expenditure of time, energy, and
resources, the Seller has agreed to provide certain bidding protections to the
Purchaser. Specifically, the Seller has determined that the Agreement will
further the goals of the Bidding Procedures by setting a floor which all other
Qualified Bids must exceed and, therefore, is entitled to be selected as the
Purchaser. As a result, the Seller has agreed that if the Seller sell the Assets
to a Successful Bidder other than the Purchaser, the Seller shall, in certain
circumstances, pay to the Purchaser a Break-Up Fee equal to three percent (3%)
of the Aggregate Cash Consideration (as defined in the Agreement). The payment
of the Break-Up Fee shall be governed by the provisions of the Agreement and the
Bidding Procedures Order.
Conduct Of Auction
          If the Debtor receives at least one Qualified Bid in addition to the
Agreement, the Debtor will conduct an auction (the “Auction”) on October 27,
2008, 2008 at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas,
18th Floor, New York, New York, at 10:00 a.m. (prevailing Eastern time). At
least two business days prior to the Auction, each Qualified Bidder with a
Qualified Bid must inform the Seller whether it intends to participate in the
Auction and at least one business day prior to the Auction, the Seller will
provide such bidders copies of the Qualified Bid which the Seller believes is
the highest or otherwise best

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offer for the Assets, (iii) all Qualified Bidders will be entitled to be present
for all Subsequent Bids, and (iv) bidding at the Auction will begin with the
highest or otherwise best Qualified Bid, continue in minimum increments of at
least $25,000, and conclude after each participating bidder has had the
opportunity to submit one or more additional Subsequent Bids.
Participation in the Auction
          Only Qualified Bidders who have submitted Qualified Bids will be
eligible to participate in the Auction. Only the authorized representatives of
each of the Qualified Bidders, the Purchaser, the Committee (if one is appointed
in the Debtor’s case), the Office of the United States Trustee, and the Seller
shall be permitted to attend the Auction. At the Auction, Qualified Bidders will
be permitted to increase and/or improve their bids. Unless otherwise agreed to
by the Seller, no Qualified Bidder will be permitted more than one-half hour to
respond to the previous bid at Auction and, at the expiration of such time
(unless extended), the Auction shall conclude.
Selection of Successful Bid
          As soon as practicable after the conclusion of the Auction, the Seller
will, in consultation with its attorneys and financial advisors, review each
Qualified Bid and identify the highest or otherwise best offer for the Assets
(the “Successful Bid”) and the bidder making such bid (the “Successful Bidder”).
The Seller will sell the Assets for the highest or otherwise best Qualified Bid
to the Successful Bidder upon the approval of such Qualified Bid by the
Bankruptcy Court after the hearing (the “Sale Hearing”).
Sale Hearing
          The Sale Hearing is currently scheduled for October 28, 2008 at
10:00 a.m. (prevailing Eastern time) before the Honorable Martin Glenn, United
States Bankruptcy Judge, in the United States Bankruptcy Court for the Southern
District of New York, located at One Bowling Green, Room 501, New York, New York
10004. The Sale Hearing may be adjourned or rescheduled by the Seller without
notice other than by an announcement of the adjourned date at the Sale Hearing.

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          If no Qualified Bids other than that of the Purchaser are received,
the Seller will proceed with the sale of the Assets to the Purchaser following
entry of the order approving the Sale. If the Seller receives additional
Qualified Bids, then, at the Sale Hearing, the Seller shall seek approval of the
Successful Bid, as well as the second highest or best Qualified Bid (the
“Alternate Bid” and such bidder, the “Alternate Bidder”). A bid will not be
deemed accepted by the Seller unless and until approved by the Bankruptcy Court.
Following approval of the sale to the Successful Bidder, if the Successful
Bidder fails to consummate the sale for specified reasons, then the Alternate
Bid will be deemed to be the Successful Bid and the Seller will effectuate a
sale to the Alternate Bidder without further order of the Bankruptcy Court.
Return Of Good Faith Deposits
          Good faith deposits of all Qualified Bidders (except for the
Successful Bidder) shall be held in an interest-bearing escrow account and all
Qualified Bids shall remain open until two business days following the closing
of the Sale (the “Return Date”). Notwithstanding the foregoing, the good faith
deposit submitted by the Successful Bidder, together with interest thereon,
shall be applied against the payment of the Purchase Price upon closing of the
Sale to the Successful Bidder. If a Successful Bidder fails to consummate an
approved sale, the Seller will not have any obligation to return such good faith
deposit and it shall irrevocably become property of the Seller. On the Return
Date, the Seller will return the good faith deposits of all other Qualified
Bidders, together with the accrued interest thereon.
Reservation of Rights
          The Seller (i) may determine which Qualified Bid, if any, is the
highest or otherwise best offer, and (ii) may reject at any time, any bid (other
than the Purchaser’s bid) that is: (a) inadequate or insufficient, (b) not in
conformity with the requirements of the Bankruptcy Code, the Bidding Procedures,
or the terms and conditions of the Sale, or (c) contrary to the best interests
of the Seller, its estate and creditors as determined by the Seller in its sole
discretion.

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EXHIBIT 1 TO BIDDING PROCEDURES
(Nondisclosure Agreement)

 

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NONDISCLOSURE AGREEMENT
          This Nondisclosure Agreement (this “Agreement”) by and between
                    , a                      corporation (the “Recipient”), and
IFL Corp. (the “Provider”) is dated as of the latest date set forth on the
signature page hereto. Recipient and Provider are each a “Party” and
collectively, the “Parties”).
          1. General. In connection with the consideration of a possible
negotiated transaction (a “Possible Transaction”) between the Parties, Provider
is prepared to make available to the Recipient certain “Diligence Material” (as
defined in Section 2 below) in accordance with the provisions of this Agreement,
and both Parties agree to take or abstain from taking certain other actions as
hereinafter set forth.
          2. Definitions. (a) The term “Diligence Material” means information
concerning the Provider which has been or is furnished to the Recipient or its
Representatives in connection with the Recipient’s evaluation of a Possible
Transaction, including its business, financial condition, operations, assets and
liabilities, and includes all notes, analyses, compilations, studies,
interpretations or other documents prepared by the Recipient or its
Representatives which contain or are based upon, in whole or in part, the
information furnished by the Recipient hereunder. The term Diligence Material
does not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Recipient or its
Representatives in breach of this Agreement, (ii) was within the Recipient’s
possession prior to its being furnished to the Recipient by or on behalf of the
Provider, provided that the source of such information was not bound by a
confidentiality agreement with, or other contractual, legal or fiduciary
obligation of confidentiality to, the Provider with respect to such information,
or (iii) is or becomes available to the Recipient on a non-confidential basis
from a source other than the Provider or its Representatives, provided that such
source is not bound by a confidentiality agreement with, or other contractual,
legal or fiduciary obligation of confidentiality to, the Provider with respect
to such information.

 

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          (b) The term “Representatives” shall include the directors, officers,
employees, agents, partners or advisors (including, without limitation,
attorneys, accountants, consultants, bankers and financial advisors) of the
Recipient or the Provider, as applicable.
          (c) The term “Person” includes the media and any corporation,
partnership, group, individual or other entity.
          3. Use of Diligence Material. The Recipient shall, and it shall cause
its Representatives to, use the Diligence Material solely for the purpose of
evaluating a Possible Transaction, keep the Diligence Material confidential,
and, subject to Section 5, will not, and will cause its Representatives not to,
disclose any of the Diligence Material in any manner whatsoever; provided,
however, that any of such information may be disclosed to the Recipient’s
Representatives who need to know such information for the sole purpose of
helping the Recipient evaluate a Possible Transaction. The Recipient agrees to
be responsible for any breach of this Agreement by any of the Recipient’s
Representatives. This Agreement does not grant the Recipient or any of its
Representatives any license to use the Provider’s Diligence Material except as
provided herein.
          4. Legally Required Disclosure. If the Recipient or its
Representatives are requested or required (by oral questions, interrogatories,
other requests for information or documents in legal proceedings, subpoena,
civil investigative demand or other similar process) to disclose any of the
Diligence Material, the Recipient shall provide the Provider with prompt written
notice of any such request or requirement together with copies of the material
proposed to be disclosed so that the Provider may seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of a waiver by the Provider, the Recipient or its Representatives are
nonetheless legally compelled to disclose Diligence Material or otherwise be
liable for contempt or suffer other censure or penalty, the Recipient or its
Representatives may, without liability hereunder, disclose to such requiring
Person only that portion of such Diligence Material or any such facts which the
Recipient or its Representatives is legally required to

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disclose, provided that the Recipient and/or its Representatives cooperate with
the Provider to obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded such Diligence Material
or such facts by the Person receiving the material.
          5. Return or Destruction of Diligence Material. If Recipient decides
that it does not wish to proceed with a Possible Transaction, it will promptly
inform the Provider of that decision. In that case, or at any time upon the
request of the Provider for any reason, the Recipient will, and will cause its
Representatives to, within five business days of receipt of such notice, destroy
or return all Diligence Material in any way relating to the Provider or its
products, services, employees or other assets or liabilities, and no copy or
extract thereof (including electronic copies) shall be retained, except that
Recipient’s outside counsel may retain one copy to be kept confidential and used
solely for archival purposes. The Recipient shall provide to the Provider a
certificate of compliance with the previous sentence signed by an executive
officer of the Recipient. Notwithstanding the return or destruction of the
Diligence Material, the Recipient and its Representatives will continue to be
bound by the Recipient’s obligations hereunder with respect to such Diligence
Material.
          6. Maintaining Privilege. If any Diligence Material includes materials
or information subject to the attorney-client privilege, work product doctrine
or any other applicable privilege concerning pending or threatened legal
proceedings or governmental investigations, the Recipient understands and agrees
that the Recipient and the Provider have a commonality of interest with respect
to such matters and it is the desire, intention and mutual understanding of the
Parties that the sharing of such material by Provider is not intended to, and
shall not, waive or diminish in any way the confidentiality of such material or
its continued protection under the attorney-client privilege, work product
doctrine or other applicable privilege. All Diligence Material provided by the
Recipient that is entitled to protection under the attorney-client privilege,
work product doctrine or other applicable privilege shall remain entitled to
such protection under these privileges, this Agreement, and under the joint
defense doctrine.

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          7. Not a Transaction Agreement. The Recipient understands and agrees
that no contract or agreement providing for a Possible Transaction exists
between the Parties unless and until a final definitive agreement for a Possible
Transaction has been executed and delivered, and the Recipient hereby waives, in
advance, any claims (including, without limitation, breach of contract) relating
to the existence of a Possible Transaction unless and until the shall have
entered into a final definitive agreement for a Possible Transaction. The
Recipient also agrees that, unless and until a final definitive agreement
regarding a Possible Transaction has been executed and delivered, neither Party
will be under any legal obligation of any kind whatsoever with respect to such
Possible Transaction by virtue of this Agreement except for the matters
specifically agreed to herein. Either Party may terminate discussions and
negotiations with the other Party at any time.
          8. No Representations or Warranties; No Obligation to Disclose. The
Recipient understands and acknowledges that neither the Provider nor its
Representatives makes any representation or warranty, express or implied, as to
the accuracy or completeness of the Diligence Material furnished by or on behalf
of the Provider and shall have no liability to the Recipient, its
Representatives or any other Person relating to or resulting from the use of the
Diligence Material furnished to the Recipient or its Representatives or any
errors therein or omissions therefrom. As to the information delivered to the
Recipient, the Provider will only be liable for those representations or
warranties which are made in a final definitive agreement regarding a Possible
Transaction, when, as and if executed, and subject to such limitations and
restrictions as may be specified therein. Nothing in this Agreement shall be
construed as obligating a the Provider to provide, or to continue to provide,
any information to any Person.
          9. Modifications and Waiver. No provision of this Agreement can be
waived or amended in favor of either Party except by written consent of the
other Party, which consent shall specifically refer to such provision and
explicitly make such waiver or amendment. No failure or delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or

-4-

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future exercise thereof or the exercise of any other right, power or privilege
hereunder.
          10. Remedies. Recipient understands and agrees that money damages
would not be a sufficient remedy for any breach of this Agreement by Recipient
or any of its Representatives and that Provider shall be entitled to equitable
relief, including injunction and specific performance, as a remedy for any such
breach or threat thereof. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement, but shall be in addition to all other
remedies available at law or equity to Provider.
          11. Legal Fees. In the event of litigation relating to this Agreement,
if a court of competent jurisdiction determines that either Recipient or its
Representatives has breached this Agreement, then the Recipient shall be liable
and pay to the Provider the reasonable legal fees and costs incurred in
connection with such litigation, including any appeal therefrom.
          12. Governing Law. This Agreement is for the benefit of the Provider
and shall be governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed entirely within
such State.
          13. Severability. If any term, provision, covenant or restriction
contained in this Agreement is held by any court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants or restrictions contained in this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and if a
covenant or provision is determined to be unenforceable by reason of its extent,
duration, scope or otherwise, then the Parties intend and hereby request that
the court or other authority making that determination shall only modify such
extent, duration, scope or other provision to the extent necessary to make it
enforceable and enforce them in their modified form for all purposes of this
Agreement.
          14. Term. This Agreement shall terminate one year after the date of
this Agreement.
          15. Entire Agreement. This Agreement contains the entire agreement
between the Parties regarding the subject matter hereof and supersedes all prior
agreements,

-5-

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understandings, arrangements and discussions between the Parties regarding such
subject matter.
          16. Counterparts. This Agreement may be signed in counterparts, each
of which shall be deemed an original but all of which shall be deemed to
constitute a single instrument.
          IN WITNESS WHEREOF, each of the undersigned entities has caused this
Agreement to be signed by its duly authorized representatives as of the date
written below.

              PROVIDER:   RECIPIENT:
 
            IFL CORP.   [COMPANY NAME]
 
                    [Address]  
By:
      By:    
 
           
Name:
      Name:    
 
           
Title
      Title    
 
           

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Exhibit 3
Cure Notice

 

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LOWENSTEIN SANDLER PC
Sharon L. Levine, Esq.
S. Jason Teele, Esq.
Timothy R. Wheeler, Esq.
1251 Avenue of the Americas, 18th Floor
New York, New York 10020
(212) 262-6700 (Telephone)
(212) 262-7402 (Facsimile)
-and-
65 Livingston Avenue
Roseland, New Jersey 07068
(973) 597-2500 (Telephone)
(973) 597-2400 (Facsimile)
Proposed Counsel to the Debtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

         
 
      Chapter 11
In re:
       
 
      Case No. 08-13589 (MG)
IFL Corp.,
       
 
       
 
  Debtor.    

NOTICE OF CURE AMOUNT WITH RESPECT TO EXECUTORY
CONTRACT OR UNEXPIRED LEASE TO BE ASSUMED AND ASSIGNED
          PLEASE TAKE NOTICE THAT:
          Pursuant to the Order Under 11 U.S.C. § 105(a) And Fed. R. Bankr. P.
2002 And 9014 Approving (i) Bidding Procedures, (ii) Certain Bid Protections,
(iii) Form And Manner Of Sale Notices, And (iv) Sale Hearing Date (the “Bidding
Procedures Order”) entered by the United States Bankruptcy Court for the
Southern District of New York (the “Bankruptcy Court”) on October 10, 2008, the
above-captioned debtor and debtor-in-possession (the “Debtor”), hereby provides
notice of its intent to assume and assign the executory contracts or unexpired
leases (the “Assumed Contracts”) listed on Exhibit 1 hereto to the Purchaser or
Successful

 

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Bidder with respect to the Debtor’s Assets. Capitalized terms used but not
otherwise defined in this notice shall have the meanings ascribed to them in the
Bidding Procedures Order.
          On the Closing Date, or as soon thereafter as reasonably practicable,
the Debtor will pay the amount that the Debtor’s records reflect is owing for
pre-petition arrearages as set forth on Exhibit 1 (the “Cure Amount”). The
Debtor’s records reflect that all post-petition amounts owing under each Assumed
Contract have been paid and will continue to be paid until the assumption and
assignment of each Assumed Contract and that, other than the Cure Amount, there
are no other defaults under any Assumed Contract.
          Objections, if any, to the proposed Cure Amount must (a) be in
writing, (b) state with specificity the cure asserted to be required,
(c) include appropriate documentation thereof, (d) conform to the Federal Rules
of Bankruptcy Procedure, the Local Bankruptcy Rules for the Southern District of
New York, (e) be filed with the Bankruptcy Court in accordance with General
Order M-242 (as amended) – registered users of the Bankruptcy Court’s case
filing system must file electronically, and all other parties-in-interest must
file on a 3.5 inch disk (preferably in Portable Document Format (PDF),
WordPerfect, or any other Windows-based word processing format), (f) be
submitted in hard-copy form directly to the chambers of the Honorable Martin
Glenn, United States Bankruptcy Judge, United States Bankruptcy Court for the
Southern District of New York, One Bowling Green, Room 501, New York, New York
10004, and (g) be served in hard copy form within ten days of service of this
Notice upon (i) the Debtor, 38 Park Avenue, 2nd Floor, Rutherford, New Jersey
07070 (Attn: Michael C. Keefe, Esq.), (ii) counsel for the Debtor, Lowenstein
Sandler PC, 1251 Avenue of the Americas, 18th Floor, New York, New York 10022
(Attn: Sharon Levine, Esq. and S. Jason Teele, Esq.), (iii) counsel for the
Purchaser, Akin Gump Strauss Hauer & Feld LLP, 1700 Pacific Ave, Suite 4100,
Dallas, Texas 75201 (Attn: Robert W. Dockery, Esq. and Kevin D. Rice, Esq.), and
(vii) the United States Trustee for Region 2, 33 Whitehall Street, Suite 2100,
New York, New York 10004 (Serene Nakano, Esq.).

-2-

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          To be considered timely, all objections must be filed and served in
accordance with the foregoing paragraph on or before ten (10) days from the date
of this Notice.
          If an objection to the Cure Amount is timely filed, a hearing with
respect to the objection will be held before the Honorable Martin Glenn, United
States Bankruptcy Judge, United States Bankruptcy Court for the Southern
District of New York, One Bowling Green, Room 501, New York, New York 10004, at
such date and time as the Court may schedule. A hearing regarding the Cure
Amount, if any, may be continued at the sole discretion of the Debtor until
after the Closing Date.
          The failure of any objecting person or entity to timely file its
objection shall be a bar to the assertion, at the Sale Hearing or thereafter, of
any objection to the Motion, the sale of the Assets, or the Debtor’s
consummation and performance of the Agreement (including the transfer of the
Assets and the Assumed Contracts free and clear of all Liens and Claims), if
authorized by the Court.
          Prior to the Closing Date, the Debtor or Successful Bidder may amend
its decision with respect to the assumption and assignment of the Assumed
Contracts and provide a new notice amending the information provided in this
Notice.

     
 
  LOWENSTEIN SANDLER PC  
 
   
 
  Sharon L. Levine, Esq.
 
  S. Jason Teele, Esq.
 
  Timothy R. Wheeler, Esq.
 
  1251 Avenue of the Americas, 18th Floor
 
  New York, New York 10020
 
  (212) 262-6700 (Telephone)
 
  (212) 262-7402 (Facsimile)
 
   
 
  -and-
 
   
 
  65 Livingston Avenue
 
  Roseland, New Jersey 07068
 
  (973) 597-2500 (Telephone)
 
  (973) 597-2400 (Facsimile)

-3-

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  Proposed Counsel to the Debtor and Debtor in Possession

Dated:                     , 2008
      New York, New York

-4-

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Exhibit 4
Assumption Notice

 

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LOWENSTEIN SANDLER PC
Sharon L. Levine, Esq.
S. Jason Teele, Esq.
Timothy R. Wheeler, Esq.
1251 Avenue of the Americas, 18th Floor
New York, New York 10020
(212) 262-6700 (Telephone)
(212) 262-7402 (Facsimile)
-and-
65 Livingston Avenue
Roseland, New Jersey 07068
(973) 597-2500 (Telephone)
(973) 597-2400 (Facsimile)
Proposed Counsel to the Debtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

         
 
      Chapter 11
In re:
       
 
      Case No. 08-13589 (MG)
IFL Corp.,
         
 
  Debtor.    

NOTICE OF ASSUMPTION AND ASSIGNMENT
OF EXECUTORY CONTRACT OR UNEXPIRED LEASE
          PLEASE TAKE NOTICE THAT:
          Pursuant to the Order Under 11 U.S.C. § 105(a) And Fed. R. Bankr. P.
2002 And 9014 Approving (i) Bidding Procedures, (ii) Certain Bid Protections,
(iii) Form And Manner Of Sale Notices, And (iv) Sale Hearing Date (the “Bidding
Procedures Order”) entered by the United States Bankruptcy Court for the
Southern District of New York (the “Bankruptcy Court”) on October 10, 2008, the
above-captioned debtor and debtor-in-possession (the “Debtor”) has accepted the
bid of                      (the “Successful Bidder”) for the purchase of
substantially all of the Debtor’s assets (the “Assets”). The terms of the bid
are set forth in the Asset Purchase Agreement, dated as of                     
___, 2008 between the Debtor and the Successful Bidder

 

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(the “Agreement”). Capitalized terms used but not otherwise defined in this
notice shall have the meaning ascribed to them in the Bidding Procedures Order.
          Pursuant to the terms of the Agreement, the Debtor will seek to assume
and assign the contracts and leases listed on Exhibit 1 hereto (the “Assumed
Contracts”) at the hearing to be held at 10:00 a.m. (Prevailing Eastern Time) on
October 28, 2008 (the “Sale Hearing”) before the Honorable Martin Glenn, United
States Bankruptcy Judge, United States Bankruptcy Court for the Southern
District of New York, One Bowling Green, Room 501, New York, New York 10004.
          Objections, if any, to the assumption and assignment of any Assumed
Contract must (a) be in writing, (b) state with specificity the asserted
objection, (c) conform to the Federal Rules of Bankruptcy Procedure, the Local
Bankruptcy Rules for the Southern District of New York, (e) be filed with the
Bankruptcy Court in accordance with General Order M-242 (as amended) —
registered users of the Bankruptcy Court’s case filing system must file
electronically, and all other parties-in-interest must file on a 3.5 inch disk
(preferably in Portable Document Format (PDF), WordPerfect, or any other
Windows-based word processing format), (f) be submitted in hard-copy form
directly to the chambers of the Honorable Martin Gless, United States Bankruptcy
Judge, United States Bankruptcy Court for the Southern District of New York, One
Bowling Green, Room 501, New York, New York 10004, and (g) be served in hard
copy form within ten (10) days of service of this Notice upon (i) the Debtor, 38
Park Avenue, 2nd Floor, Rutherford, New Jersey 07070 (Attn: Michael C. Keefe,
Esq.), (ii) counsel for the Debtor, Lowenstein Sandler PC, 1251 Avenue of the
Americas, 18th Floor, New York, New York 10022 (Attn: Sharon Levine, Esq. and S.
Jason Teele, Esq., (iii) counsel for the Purchaser, Akin Gump Strauss Hauer &
Feld LLP, 1700 Pacific Ave, Suite 4100, Dallas, Texas 75201 (Attn: Robert W.
Dockery, Esq. and Kevin D. Rice, Esq.), and (vii) the United States Trustee for
Region 2, 33 Whitehall Street, Suite 2100, New York, New York 10004, (Serene
Nakano, Esq.).
          If an objection to the assumption or assignment of an Assumed Contract
is timely filed, a hearing with respect to the objection will be held before the
Honorable Martin Glenn,

-2-

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United States Bankruptcy Judge, United States Bankruptcy Court for the Southern
District of New York, One Bowling Green, Room 501, New York, New York 10004, at
the Sale Hearing or such date and time as the Court may schedule.
          Objections to the assumption or assignment of an Assumed Contract must
be filed and served in accordance with the foregoing paragraph on or before two
(2) days prior to the Sale Hearing.

     
 
  LOWENSTEIN SANDLER PC  
 
   
 
   
 
  Sharon L. Levine, Esq. S.
 
  Jason Teele, Esq.
 
  Timothy R. Wheeler, Esq.
 
  1251 Avenue of the Americas, 18th Floor
 
  New York, New York 10020
 
  (212) 262-6700 (Telephone)
 
  (212) 262-7402 (Facsimile)
 
   
 
  -and-
 
   
 
  65 Livingston Avenue
 
  Roseland, New Jersey 07068
 
  (973) 597-2500 (Telephone)
 
  (973) 597-2400 (Facsimile)
 
   
 
  Proposed Counsel to the Debtor and Debtor in Possession

Dated:                     , 2008 New York,
            New York

-3-

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EXHIBIT D
BILL OF SALE

 

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BILL OF SALE
          This Bill of Sale dated                      ___, 2008 is executed and
delivered by and among IFL Corp., d/b/a International Fight League, a Delaware
corporation (“Seller”) and HDNet LLC, a Delaware limited liability company
(“Buyer”). All capitalized words and terms used in this Bill of Sale and not
defined herein shall have the respective meanings ascribed to them in the Asset
Purchase Agreement, dated as of September 19, 2008, by and between the Seller
and the Buyer (the “Agreement”).
          WHEREAS, pursuant to the Agreement, the Seller has agreed to sell,
transfer, convey, assign and deliver to the Buyer the Assets for the
consideration specified in the Agreement; and
          WHEREAS, the Agreement and the transactions contemplated therein were
approved by the Bankruptcy Court on October ___, 2008.
          NOW, THEREFORE, in consideration of the mutual promises set forth in
the Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Seller hereby agrees as
follows:
          1. The Seller hereby sells, transfers, conveys, assigns and delivers
to the Buyer, its successors and assigns, to have and to hold forever, all
right, title and interest in, to and under all of the Assets.
          2. The Seller hereby covenants and agrees that it will, at the request
of the Buyer and without further consideration, execute and deliver such other
instruments of sale, transfer, conveyance and assignment, and take such other
action, as may reasonably be necessary to more effectively sell, transfer,
convey, assign and deliver to, and vest in, the Buyer, its successors and
assigns, good, clear, record and marketable title to the Assets hereby sold,
transferred, conveyed, assigned and delivered, or intended so to be, and to put
the Buyer in actual possession and operating control thereof, to assist the
Buyer in exercising all rights with respect thereto and to carry out the purpose
and intent of the Agreement.
          3. The Seller does hereby irrevocably constitute and appoint the
Buyer, its successors and assigns, its true and lawful attorney, with full power
of substitution, in its name or otherwise, and on behalf of the Seller, or for
its own use, to claim, demand, collect and receive at any time and from time to
time any and all of the Assets, and to prosecute the same at law or in equity
and, upon discharge thereof, to complete, execute and deliver any and all
necessary instruments of satisfaction and release as set forth in the Agreement.
          4. The Seller, by its execution of this Bill of Sale, and the Buyer,
by its acceptance of this Bill of Sale, each hereby acknowledges and agrees that
neither the representations and warranties nor the rights, remedies or
obligations of any party under the Agreement shall be deemed to be enlarged,
modified or altered in any way by this instrument.
          5. This Bill of Sale may be executed in multiple counterparts, all of
which, when executed and delivered, shall be considered one and the same
agreement.

D-1

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     IN WITNESS WHEREOF, the Seller and the Buyer have caused this instrument to
be duly executed under seal as of and on the date first above written.

            SELLER:

IFL CORP.
      By:           Name:           Title:        

          ACCEPTED:    
 
        BUYER:    
 
        HDNet LLC    
 
       
By:
       
 
       
 
  Name:    
 
  Title:    

D-2

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EXHIBIT E
SALE ORDER

 

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

         
 
      Chapter 11
In re:
         
 
      Case No. 08-13589 (MG)
IFL Corp.,
         
 
  Debtor.    

ORDER UNDER 11 U.S.C. §§ 363 AND 365 AND FED. R. BANKR. P. 2002, 6004, 6006,
AND 9014 (A) AUTHORIZING AND APPROVING (I) SALE OF SUBSTANTIALLY
ALL ASSETS OF THE DEBTOR FREE AND CLEAR OF LIENS, CLAIMS, AND
ENCUMBRANCES, (II) ASSUMPTION AND ASSIGNMENT OF CERTAIN
EXECUTORY CONTRACTS AND UNEXPIRED LEASES, AND (III) ASSUMPTION OF
CERTAIN LIABILITIES; AND (B) APPROVING RELATED COMPROMISES
          Upon the motion, dated September 19, 2008 (the “Motion”),1 of the
above-captioned debtor and debtor-in-possession (the “Debtor” or “Seller”) for
orders under 11 U.S.C. §§ 363 and 365 and Fed. R. Bankr. P. 2002, 6004, 6006,
and 9014 (a) approving (i) bidding procedures, (ii) certain bid protections,
(iii) the form and manner of sale notices, and (iv) the sale hearing date (the
“Sale Hearing”), and (b) authorizing and approving (i) the sale of substantially
all of the Debtor’s assets (the “Assets”) free and clear of liens, claims, and
encumbrances (the “Sale”) to the Purchaser, (ii) the assumption by the Seller
and assignment to the Purchaser of certain executory contracts and unexpired
leases (collectively the “Assumed Contracts”), and (iii) the assumption of
certain liabilities (collectively, the “Assumed Liabilities”) by the Purchaser;
and the Court having reviewed the Motion; and the Court having entered on
                     ___, 2008 an Order approving (i) bidding procedures,
(ii) certain bid protections, and (iii) the form and manner of sale notices
(Docket No. ___) (the “Bidding Procedures Order”); and upon the record of the
sale hearing (the “Sale Hearing”) conducted on                      ___, 2008;
and upon the record in this chapter 11 case; and the Debtor, Purchaser and the
Committee having reviewed and agreed to
 

1   Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Motion.

E-1

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the terms of this Order; and it appearing that the relief sought by the Debtor,
as modified by this Order, is necessary and in the best interests of the Debtor,
its creditors and bankruptcy estate and other parties in interest; and due
deliberation having been had, and sufficient cause appearing therefor;
THE COURT HEREBY FINDS AND DETERMINES THAT: 2
          A. On September 15, 2008, (the “Petition Date”), the Debtor filed a
voluntary petition for reorganization under chapter 11 of title 11 of the United
States Code (the “Bankruptcy Code”).
          B. Since the Petition Date, the Debtor has continued in possession and
management of its assets and properties as a debtor in possession pursuant to
sections 1107(a) and 1108 of the Bankruptcy Code.
          C. No trustee or examiner has been appointed in the Debtor’s chapter
11 case.
          D. On                      ___, the United States Trustee appointed an
Official Committee of Unsecured Creditors (the “Committee”).
          E. The Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§
157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. §
157(b)(2)(A), (M) and (O). Venue of this case and the Motion in this District is
proper under 28 U.S.C. §§ 1408 and 1409.
          F. The statutory predicates for the relief sought in the Motion are
sections 105(a), 363 and 365 of the Bankruptcy Code and Fed. R. Bankr. P. 2002,
6004, 6006 and 9014.
          G. As evidenced by the certificate of service previously filed with
the Court, and based on the representations of counsel for the Debtor at the
Sale Hearing: (i) proper, timely, adequate and sufficient notice of the Motion
and the Sale Hearing has been provided in accordance with sections 102(1), 363
and 365 of the Bankruptcy Code, Fed. R. Bankr. P. 2002, 6004, 6006, 9007 and
9014, and the Bidding Procedures Order; (ii) such notice was good and sufficient
and appropriate under the particular circumstances; and (iii) no other or
further notice
 

2   Findings of fact shall be construed as conclusions of law and conclusions of
law shall be construed as findings of fact where appropriate. See Fed. R. Bankr.
P. 7052.

E-2

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of the Motion, the Sale Hearing or the entry of this Order is required.
          H. A reasonable opportunity to object or be heard regarding the relief
requested in the Motion has been afforded to all interested persons and
entities.
          I. The Seller is the sole and lawful owner of the Assets to be sold
pursuant to the Agreement.
          J. Pursuant to the Bidding Procedures Order, on October 27, 2008 the
Debtor conducted an auction to receive and consider competing offers to purchase
the Assets. No competing bids were submitted.
          K. The offer of Purchaser to purchase the Assets is the highest and
best offer received for the sale of the Assets.
          L. The purchase price to be paid by Purchaser is fair and constitutes
reasonably equivalent value and reasonable market value for the Assets.
          M. Purchaser is a good faith purchaser with respect to the Assets, as
that term is used in section 363(m) of the Bankruptcy Code. The Agreement was
negotiated, proposed and entered into by the parties in good faith, from arm’s
length bargaining positions and without collusion, and the Purchaser therefore
is entitled to the protections of section 363(m) of the Bankruptcy Code with
respect to the Assets. Neither the Debtor nor the Purchaser have engaged in any
conduct that would cause or permit the Agreement to be voided under section
363(n) of the Bankruptcy Code.
          N. Except as specifically provided in the Agreement or this Order,
Purchaser shall not assume or become liable for any Pre-Closing Date liens,
claims, interests and/or encumbrances relating to the Assets being sold by the
Seller unless expressly stated in the Agreement or this Order. Any valid and
enforceable liens, claims, interests and/or encumbrances shall attach to the
proceeds of the sale with the same priority, validity, and enforceability as
they had immediately before the closing of the sale.
          O. The Debtor has articulated sound business reasons for entering into
the Agreement and selling the Assets as set forth in the Motion outside of a
chapter 11 plan, and it is

E-3

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a reasonable exercise of the Debtor’s business judgment to execute, deliver and
consummate the Agreement with the Purchaser and consummate the transactions
contemplated by the Agreement and as set forth in this Order.
          P. The Seller may sell the Assets free and clear of all liens, claims,
interests and/or encumbrances because, in each case, one or more of the
standards set forth in section 363(f)(1)-(5) of the Bankruptcy Code has been
satisfied. The Assets are not encumbered by any liens, claims, interests and/or
encumbrances. No party asserted any liens, claims, interests and/or encumbrances
in or to the Assets and no such party objected to the sale or the Motion (any
such objections having been withdrawn or resolved). Thus, all such holders are
deemed to have consented to the sale and the Motion pursuant to section
363(f)(2) of the Bankruptcy Code.
          Q. The terms and conditions of the Agreement, including the total
consideration to be realized by the Seller pursuant to the Agreement, are fair
and reasonable, and the transactions contemplated by the Agreement, as modified
by this Order, are in the best interests of the Debtor, its creditors and
estate.
          R. A valid business purpose exists for approval of the transactions
contemplated by the Motion pursuant to sections 105, 363(b), (f), and (m) of the
Bankruptcy Code. The Seller may sell, transfer and assign the Assets free and
clear of all liens, claims, interests and/or encumbrances in accordance with
sections 105 and 363 of the Bankruptcy Code. As a condition to purchasing the
Assets, the Purchaser requires that (a) the Assets be sold free and clear of all
liens, claims, encumbrances, options, rights of first refusal and other
interests; and (b) the Purchaser shall have no liability whatsoever for any
obligations of or claims (including without limitation as defined in section
101(5) of the Bankruptcy Code) against the Seller except those expressly assumed
in the Agreement or by this Order. Purchaser would not enter into the Agreement
and consummate the transactions contemplated by the Agreement, thus adversely
affecting the Debtor’s estate, if the sale to Purchaser was not free and clear
of all such liens, claims, encumbrances, options, rights of first refusal and
other interests or if Purchaser was or would be liable for any such obligations
of or claims (including, without limitation, as defined

E-4

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in section 101(5) of the Bankruptcy Code) against the Seller, except as
otherwise explicitly provided in the Agreement or this Order.
          S. The transfer of the Assets to the Purchaser is or will be a legal,
valid and effective transfer of the Assets, and will vest the Purchaser with all
right, title and interest in and to the Assets, free and clear of all liens,
claims, interests and/or encumbrances, except those explicitly and expressly
excluded by the Purchaser in the Agreement or this Order.
          T. A valid business purpose exists for approval of the assumption and
assignment of the Assumed Contracts by the Seller to the Purchaser in accordance
with section 365 of the Bankruptcy Code.
          U. The requirements of sections 363(b) and 363(f) of the Bankruptcy
Code and any other applicable law relating to the sale of the Assets have been
satisfied.
          V. The Court takes judicial notice of the record in this case
including, without limitation, the Bidding Procedures Order.
          NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
A. Sale of Assets Approved; Transactions Authorized.
          1. The Motion is granted.
          2. All objections to the Motion or the relief requested therein that
have not been withdrawn, waived, or settled, and all reservations of rights
included in such objections, are overruled on the merits and denied.
          3. The Motion, Agreement and the transactions contemplated thereby are
approved as modified by this Order, and the Seller is hereby authorized and
empowered to enter into, and to perform their obligations under, the Agreement
and to act as necessary to effectuate the terms of the Agreement, without
further corporate authorization or Order of this Court.
          4. The Seller is hereby authorized and empowered, pursuant to sections
105 and 363(b) and (f) of the Bankruptcy Code, to sell the Assets to the
Purchaser pursuant to and in accordance with the terms and conditions of the
Agreement and this Order; and pursuant to

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sections 105 and 363 of the Bankruptcy Code, title to the Assets shall pass to
Purchaser at the closing free and clear of any and all liens (including
mechanics’, materialmens’ and other consensual and non-consensual liens and
statutory liens), security interests, encumbrances and claims (including, but
not limited to, any “claim” as defined in section 101(5) of the Bankruptcy
Code), reclamation claims, mortgages, deeds of trust, pledges, covenants,
restrictions, hypothecations, charges, indentures, loan agreements, instruments,
contracts, leases, licenses, options, rights of first refusal, rights of offset,
recoupment, rights of recovery, judgments, orders and decrees of any Court or
foreign or domestic governmental entity, claims for reimbursement, contribution,
indemnity or exoneration, assignment, debts, charges, suits, rights of recovery,
interests, products liability, alter-ego, environmental, successor liability,
tax and other liabilities, causes of action and claims, to the fullest extent of
the law, in each case whether secured or unsecured, choate or inchoate, filed or
unfiled, scheduled or unscheduled, noticed or unnoticed, recorded or unrecorded,
perfected or unperfected, allowed or disallowed, contingent or non-contingent,
liquidated or unliquidated, matured or unmatured, material or non-material,
disputed or undisputed, or known or unknown, whether arising prior to, on, or
subsequent to the Petition Date and through the Closing Date, whether imposed by
agreement, understanding, law, equity or otherwise (collectively, the “Liens and
Claims”), with all such Liens and Claims upon the Assets to be unconditionally
released, discharged and terminated; provided that all such Liens and Claims
shall attach to the proceeds of the transaction with the same priority,
validity, force and effect as they existed with respect to the Assets prior to
closing, except as may be expressly set forth herein.
          5. The Seller and Purchaser are authorized to modify, amend and/or
supplement the Agreement to conform to the terms of this Order and any
modifications stated on the record at the Sale Hearing.
B. Transfer Of The Assets To Purchaser.
          6. The transfer of the Assets to Purchaser pursuant to the Agreement
constitutes a legal, valid and effective transfer and shall vest Purchaser with
all right, title and

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interest of the Seller in and to the Assets so transferred.
          7. This Order and the Agreement shall be binding upon, and shall inure
to the benefit of, the Seller and Purchaser and their respective successors and
assigns, including, without limitation, any chapter 11 trustee hereinafter
appointed for the Seller or any trustee appointed in a chapter 7 case if the
Debtor’s case is converted from chapter 11.
          8. On the date of the closing of the transactions contemplated by the
Agreement (the “Closing Date”), each of the creditors of the Debtor is
authorized and directed to execute such documents and take all other actions as
may be necessary to release its Liens and Claims against or in the Assets, if
any, as such Liens and Claims may have been recorded or may otherwise exist.
          9. If any person or entity that has filed financing statements,
mortgages, mechanic’s liens, lis pendens, or other documents or agreements
evidencing Liens and Claims against or in the Assets shall not have delivered to
the Debtor prior to the Closing Date, in proper form for filing and executed by
the appropriate parties, termination statements, instruments of satisfaction,
and releases of all Liens and Claims that the person or entity has with respect
to the Assets, the Debtor is hereby authorized and directed to execute and file
such statements, instruments, releases and other documents on behalf of the
person or entity with respect to the Assets.
          10. Effective upon the Closing Date, all parties and/or entities
asserting Liens and Claims and contract rights against the Seller and/or any of
the Assets are hereby permanently enjoined and precluded from, in each case only
with respect to such Liens and Claims: (i) asserting, commencing or continuing
in any manner any action against the Purchaser or any of its current or former
directors, officers, agents, representatives or employees (collectively, the
“Protected Parties”) or against any Protected Party’s assets or properties,
including without limitation the Assets; (ii) the enforcement, attachment,
collection or recovery, by any manner or means, of any judgment, award, decree
or order against the Protected Parties or any properties or assets of the
Protected Parties, including without limitation the Assets; (iii) creating,
perfecting

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or enforcing any encumbrance of any kind against the Protected Parties or any
properties or assets of the Protected Parties, including without limitation the
Assets; (iv) asserting any setoff, right of subrogation or recoupment of any
kind against any obligation due the Protected Parties; and (v) taking any
action, in any manner, in any place whatsoever, that does not conform to or
comply with the provisions of this Order or the Agreement.
          11. The provisions of this Order authorizing the sale of the Assets
free and clear of Liens and Claims (with such Liens and Claims to attach to the
proceeds of the sale of the Assets as provided in this Order) shall be
self-executing, and neither the Seller, the Purchaser nor any other party shall
be required to execute or file releases, termination statements, assignments,
cancellations, consents or other instruments to effectuate, consummate and/or
implement the provisions hereof with respect to such sale; provided, however,
that this paragraph shall not excuse such parties from performing any and all of
their respective obligations under the Agreement or this Order. Without in any
way limiting the foregoing, Purchaser is empowered to execute and file releases,
termination statements, assignments, consents, cancellations or other
instruments to effectuate, consummate and/or implement the provisions hereof
with respect to such sale.
          12. Consummation of the Agreement and the transactions contemplated
therein and thereby will not effect a de facto merger or consolidation of the
Seller and the Purchaser or result in the continuation of the Seller’s business
under the Purchaser’s control.
          13. All entities who are presently, or on the Closing Date may be, in
possession of some or all of the Assets are hereby directed to surrender
possession of the Assets to the Purchaser on the Closing Date.
C. Assumption And Assignment Of Assumed Contracts Authorized.
          14. The requirements of section 365(b) of the Bankruptcy Code having
been satisfied, the Seller is hereby authorized and empowered to assume and
assign and sell the Assumed Contracts to the Purchaser under the Agreement free
and clear of all Liens and Claims pursuant to sections 363 and 365 of the
Bankruptcy Code.

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          15. Pursuant to section 365(k) of the Bankruptcy Code, effective upon
the assignment of the Assumed Contracts to the Purchaser hereunder, the Seller
shall be relieved from any further obligations under or related to the Assumed
Contracts.
D. Good Faith Purchase.
          16. The purchase by Purchaser is a purchase in good faith for fair
value within the meaning of section 363(m) of the Bankruptcy Code, and Purchaser
is entitled to all of the protections afforded good faith purchasers by section
363(m) of the Bankruptcy Code.
          17. The sale approved by this Order is not subject to avoidance
pursuant to section 363(n) of the Bankruptcy Code. The consideration provided by
Purchaser for the Assets under the Agreement shall be deemed to constitute
reasonably equivalent value and fair consideration.
E. Maintenance Of Financial Records; Access Thereto.
          18. Notwithstanding anything to the contrary contained in the
Agreement, all financial books and records of Seller which remain in the
possession of Purchaser after the Closing Date (the “Financial Records”), are
subject to the right of the Debtor, the Committee and any subsequently appointed
trustee (including without limitation a trustee appointed pursuant to a plan of
reorganization to liquidate the Debtor’s remaining assets) to review and copy
the Financial Records, at such trustee’s sole cost and expense, during normal
business hours and upon reasonable notice until the date the Debtor’s bankruptcy
case are closed or dismissed by Order of the Court.
          19. The Purchaser agrees that prior to destroying or otherwise
disposing of any of the Financial Records, Purchaser shall provide written
notice to the Debtor (as provided for in the Agreement) and/or the Committee or
any trustee appointed, of its intent to dispose of or destroy the Financial
Records. The Seller and/or Committee or trustee appointed shall have thirty
(30) days from the date notice is given to take possession of or copy the
Financial Records, at their sole cost and expense.

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F. Additional Decretals.
          20. The recitals and findings of facts set forth above are hereby
incorporated as a part of this Order.
          21. As provided by Fed. R. Bankr. P. 6004(h), 6006(d) and 7062, this
Order shall be effective and enforceable immediately upon entry.
          22. The provisions of this Order are nonseverable and mutually
dependent.
          23. Nothing contained in any plan of reorganization (or liquidation)
confirmed in this case or the order of confirmation confirming any such plan
shall conflict with or derogate from the provisions of the Agreement or the
terms of this Order.
          24. This Order shall be binding upon and inure to the benefit of the
Debtor, Purchaser, Committee, and each of their respective former, present, and
future assigns, predecessors, successors, affiliates, parent companies,
subsidiaries, controlled companies, employees, officers, directors,
shareholders, principals, members or agents, whether a signatory hereto or not,
including, but not limited to, any subsequently appointed trustee (including
without limitation a chapter 7 trustee).
          25. This Court shall retain exclusive jurisdiction to enforce the
provisions of this Order and the Agreement and to resolve any dispute concerning
this Order, the Agreement, or the rights and duties of the parties hereunder or
thereunder or any issues relating to the Agreement and this Order, including,
but not limited to, interpretation of the terms, conditions and provisions
thereof, and the status, nature and extent of the Assets, and all issues and
disputes arising in connection with the relief authorized herein, inclusive of
those concerning the transfer of the Assets free and clear of Liens and Claims.
          26. The Debtor, Purchaser, and Committee expressly understand and
agree that the Agreement and this Order, together, constitute the entire
understanding and agreement between the parties, and supersede and replace all
other prior negotiations, agreements or understandings between the parties,
whether written or oral, relating to the subject matter hereof. Each of the
parties acknowledges and represents that no other party or agent or attorney of
any

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other party has made a promise, representation, or warranty whatsoever, express
or implied, not contained herein concerning the subject matter of the Agreement
or this Order. Each party acknowledges and represents that it has not agreed to
this Order in reliance upon any promise, representation or warranty whatsoever
not expressly set forth in the Agreement or this Order.
          27. The division of this Order into sections or 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 Order.
          28. Each person signing this Order as an agent or representative of
any party hereby covenants and warrants to the Court and the other parties that
he or she is fully authorized to sign this Order on behalf of the party he or
she represents and is fully authorized to bind that Party to all of the terms of
this Order.
Agreed To By:

              Dated:                      __, 2008   IFL CORP.         Debtor
and Debtor-in-Possession    
 
           
 
  By:   /s/ DRAFT    
 
                Sharon L. Levine, Esq.         S. Jason Teele, Esq.        
Timothy R. Wheeler, Esq.         LOWENSTEIN SANDLER PC         1251 Avenue of
the Americas, 18th Floor New         York, New York 10020         Tel:
(212) 262-6700    

              Dated:                      __, 2008   HD NET LLC        
Purchaser    
 
           
 
  By:   /s/ DRAFT    
 
                Robert W. Dockery, Esq.         Kevin D. Rice, Esq.         AKIN
GUMP STRAUSS HAUER & FELD LLP         1700 Pacific Ave, Suite 4100        
Dallas, Texas 75201    

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              Dated:                      __, 2008   OFFICIAL COMMITTEE OF
UNSECURED         CREDITORS FOR IFL CORP.    
 
           
 
  By:   /s/ DRAFT    
 
                [To Be Inserted As Appropriate]    
 
           
THE FOREGOING IS HEREBY ORDERED:
             
Dated:                      ___, 2008
            New York, New York
                            Honorable Martin Glenn         United States
Bankruptcy Judge    

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EXHIBIT F
NAME USE AGREEMENT

 

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NAME USE AGREEMENT
          This Name Use Agreement is dated as of October ___, 2008 is executed
and delivered by and among IFL Corp., d/b/a International Fight League, a
Delaware corporation (“Seller”), International Fight League, Inc. (“Parent”) and
HDNet LLC, a Delaware limited liability company (“Buyer”). All capitalized words
and terms used in this Trade Name Use Agreement and not defined herein shall
have the respective meanings ascribed to them in the Asset Purchase Agreement,
dated as of September ___, 2008, by and between the Seller and the Buyer (the
“Agreement”).
          WHEREAS, pursuant to the Agreement, on the Closing Date, Buyer is the
sole and exclusive owner of the trademark “International Fight League” (the
“Mark”);
          WHEREAS, Seller, Parent and Buyer have agreed that, from and after the
Closing Date, Parent shall be entitled to retain and utilize, without license,
royalty, fee, assessment or other charge, the Mark solely for use as Parent’s
corporate name until Parent becomes engaged in an active trade or business;
provided that, from and after the Closing Date, Parent shall utilize the Mark
solely for general corporate purposes and not in any trade or business.
          NOW, THEREFORE, in consideration of the premises and the mutual
promises and undertakings herein contained, and for other good and valuable
consideration, the parties agree as follows:
          1. Grant of Mark By Buyer. Buyer grants to Parent the non-exclusive,
non-transferrable right to use the Mark as its corporate name during the Term
(defined below), provided that Parent shall utilize the Mark solely for general
corporate purposes and not in any trade or business.
          2. Term. This Name Use Agreement shall commence on the Closing Date
and terminate on the earlier of (i) the date on which Parent becomes engaged in
any active trade or business other than activities constituting general
corporate purposes and (ii) two (2) years after the date hereof (the “Term”).
          3. Reservation of Rights. Except for the limited rights herein
expressly granted to Parent, all rights in the Mark are reserved to Buyer
throughout the world for the sale and exclusive use or other disposition by
Buyer at anytime, and from time to time, without any obligation to Seller or
Parent.
          4. Transfer Prohibited. Neither the Mark nor the use of the Mark
granted hereunder shall be assigned, sublicensed, or otherwise transferred by
Parent without the prior written consent of Buyer. In the event of a prohibited
transfer, Buyer shall have the right to terminate this Name Use Agreement
forthwith by written notice to Grantee.
          5. Rights Upon Termination. Upon the termination (by expiration or
otherwise) of this Name Use Agreement, for any reason, all rights granted to
Parent hereunder shall automatically revert to Buyer for its use or disposition.
Upon termination, Parent shall promptly cease use of the Mark. Without limiting
the foregoing, upon termination or expiration of this Name Use Agreement for any
reason, Buyer shall have no liability for reimbursement or for damages for loss
of goodwill, or on account of any expenditures, investments, leases, or
commitments made by Parent. Parent acknowledges and agrees that it has no
expectation and

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has received no assurances that its relationship with Buyer will continue beyond
the Term or its earlier termination as set forth herein, that any investment in
the Mark by Parent will be recovered or recouped, or that Parent shall obtain
any anticipated amount of profits by virtue of this Name Use Agreement.
          6. No Franchise or Joint Venture. The parties expressly acknowledge
that this Name Use Agreement shall not be deemed to create an agency,
partnership, franchise, employment, or joint venture relationship between Parent
and Buyer. Nothing in this Name Use Agreement shall be construed as a grant of
authority to Parent to waive any right, incur any obligation or liability, enter
into any agreement, grant any release or otherwise purport to act in the name of
Buyer.
          7. Ownership; Form of Use. Parent acknowledges that Buyer owns all
right, title, and interest in and to the Mark and agrees that it will do nothing
inconsistent with such ownership. Parent agrees that nothing in this Name Use
Agreement shall give it any right, title, or interest in the Mark other than the
right to use it in accordance with this Name Use Agreement, and Parent agrees
that it will not attack the title of Buyer to the Mark or attack the validity of
this Name Use Agreement.
          8. Waiver; Modification. No wavier or modification of any of the terms
of this Name Use Agreement shall be valid unless in writing. No waiver by any
party of a breach hereof or a default hereunder shall be deemed a waiver by such
party of a subsequent breach or default of like or similar nature.
          9. Notices. Notices and other communications required or permitted to
the given under this Agreement shall be in writing and delivered by hand or
overnight delivery, or placed in certified or registered mail, return receipt
requested, at the addresses specified below or such other address as either
party may, by notice to the other, designate:
If to Buyer, to:
HDNet LLC
320 South Walton Street
Dallas, Texas 75226
Attn: Robert Thoele
Facsimile: 214-571-9221
with a copy to (which shall not constitute notice):
Alvin Gump Strauss Hauer & Feld LLP
1700 Pacific Ave, Suite 4100
Dallas, Texas 75201
Attn: Robert W. Dockery, Esq. and Kevin D. Rice, Esq.
Facsimile: 214-969-4343
If to Seller, to:
IFL Corp.
38 Park Avenue, 2nd Floor

F-2

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Rutherford, New Jersey 07070
Attn: Michael Keefe
Facsimile: 201-635-1801
with a copy to (which shall not constitute notice):
Lowenstein Sandler PC
1251 Avenue of the Americas, 18th Floor
New York, New York 10022
Attn: Sharon L. Levine, Esq. and S. Jason Teele, Esq.
Facsimile: 973-597-2400
If to Parent, to:
International Fight League, Inc.
38 Park Avenue, 2nd Floor
Rutherford, New Jersey 07070
Attn: Michael Keefe
Facsimile: 201-635-1801
Notices and other communications shall be deemed given when delivered by hand or
overnight delivery to the proper address or the date of the return receipt, as
provided above.
          10. Governing Laws. This Name Use Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.
          11. This Name Use Agreement may be executed in multiple counterparts,
all of which, when executed and delivered, shall be considered one and the same
agreement.
          IN WITNESS WHEREOF, the parties hereto have caused this Name Use
Agreement to be executed the day and year first above written.

                  BUYER:    
 
                HDNet LLC    
 
           
 
  By:        
 
                Name:         Title:    

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                  SELLER:    
 
                IFL Corp.    
 
           
 
  By:        
 
                Name:         Title:    
 
                PARENT:           INTERNATIONAL FIGHT LEAGUE, INC.    
 
           
 
  By:        
 
                Name:         Title:    

F-4