Document:

Filed by sedaredgar.com - Candev Resource  Exploration, Inc. - Exhibit 10.1

TERMINATION AGREEMENT AND MUTUAL RELEASE

THIS AGREEMENT dated as of December 3, 2008 and effective as of
the 31st day of October, 2008.

	BETWEEN: 
	               
                         
         CANDEV RESOURCE EXPLORATION INC., a company 
	               
                         
         with an address c/o 2200 – 1177 West Hasting Street, 
	               
                         
         Vancouver, British Columbia V6E 2K3 
	               
                         
         (the “Company”) 
	AND: 
	               
                         
         CARL VON EINSIEDEL, an individual with a mailing
      address 
	               
                         
         at 8888 Shook Road, Mission, British Columbia V2V 7N1 
	               
                         
         (“Einsiedel”) 

WHEREAS:

A.          
The Company and Einsiedel entered into a Property Option Agreement dated August
25, 2006, as amended on January 15, 2008 (collectively, the “Property Option
Agreement”), whereby the Company acquired the right to earn a 100% interest in
and to five (5) mineral claims that make up the King Claims North and South
located in the Iskut region, northwestern British Columbia, as more particularly
described in Schedule “A” hereto;

B.          
The Company and Einsiedel have agreed that it would be in the best interests of
the parties to mutually terminate the Property Option Agreement; and

C.          
The Company and Einsiedel wish to enter into this Agreement to confirm the
termination of the Property Option Agreement effective as of October 31, 2008,
and to release each other from any and all obligations and liabilities pursuant
to the Property Option Agreement.

NOW THEREFORE in consideration of the premises and of the
mutual covenants and agreements herein set forth, the parties covenant and agree
as follows:

1.          
Termination of the Agreement and Mutual Release. The Property Option
Agreement is hereby terminated effective as of October 31, 2008, and the parties
hereby release each other from all further liabilities and legal obligations of
whatsoever kind and howsoever arising which either of them may now have or at
any time hereafter can, shall or may have in any way resulting or arising from
any cause, matter or thing existing up to the present time in connection with
the Property Option Agreement.

2.          
Further Assurances. The parties will execute such further assurances and
other documents and instruments and do such further and other acts and things as
may be necessary to implement and carry out the intent of this Agreement.

2

3.          
Successors and Assigns. This Agreement will enure to the benefit of and
be binding upon the parties and their respective heirs, executors,
administrators, successors, and assigns.

4.          
Headings and Division. The headings in this Agreement and the division of
this Agreement into sections are for convenience of reference only and will not
affect the interpretation of this Agreement.

5.          
Independent Legal Advice. Einsiedel hereto hereby acknowledges and agrees
that he has had the opportunity to obtain independent legal advise with respect
to this Agreement.

6.          
Governing Law. This Agreement and the application or interpretation
hereof will be governed exclusively by its terms and by the laws of the Province
of British Columbia.

7.          
Counterparts. This Agreement may be executed in two or more counterparts
all of which together will constitute one and the same instrument.

8.          
Electronic Means. Delivery of an executed copy of this Agreement by
electronic facsimile transmission or other means of electronic communication
capable of producing a printed copy will be deemed to be execution and delivery
of this Agreement as of the date set forth above.

IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.

CANDEV RESOURCE EXPLORATION INC.

	Per: 	/s/ Mark McLeary	 
	  	Authorized Signatory 	 

	WITNESSED BY: 	 )	
	  	 )	 
	/s/ Dorian Leslie	 )	 
	Name 	 )	 
	  	 )	 
	Address 	 )	/s/
      Carl von Einsiedel 
	  	 )	CARL VON EINSIEDEL 
	  	 )	 
	  	 )	 
	Occupation 	 )	 

3

Schedule “A”

King Claims North and South

	King Claims North Tenure Number 	King Claims South Tenure Number 
	528276 	552025 
	508287 	552026 
	531518ex10-1_metaverseapa.htm

    

      Exhibit
10.1

       

      

       

      ASSET PURCHASE
AGREEMENT

       

      THIS
ASSET PURCHASE AGREEMENT (the “Agreement”) is made
as of the 3rd day of December, 2008, by and between ArtSelect, Inc, a Delaware
corporation (“Seller”) and
Metaverse Corporation, a New Jersey corporation (“Purchaser”). Each of
Seller and Purchaser may hereafter be referred to as a “Party” and
collectively as the “Parties”.

       

      RECITALS

       

      WHEREAS,
Seller is engaged in the business of selling home and office framed and unframed
wall décor to retailers, catalogers, membership organizations and consumers
through both online and traditional retail and wholesale distribution
channels;

       

      WHEREAS,
Seller’s primary business assets include inventory consisting primarily of print
reproductions and picture frames, website and technology that permits business
partners to create branded sub-domains on Seller’s website, and two leased
facilities in Fairfield, Iowa;

       

      WHEREAS,  Seller
and a21, Inc, (“Parent”) have experienced substantial financial difficulties and
have determined that it is in the best interest of Seller and Parent to file for
bankruptcy protection and sell the business and assets of Seller as a going
concern free and clear of all liens and encumbrances.

       

      WHEREAS,
the Seller anticipates filing a petition for bankruptcy protection on or about
December 4, 2008 (the actual date of the filing is referred to
as  “Filing
Date” and Seller’s Bankruptcy case is referred to as (the “Bankruptcy Case”),
under Chapter 11 of Title 11, United States Code (the “Bankruptcy Code”), in
the United States Bankruptcy Court for the Middle District of Florida (the
“Bankruptcy
Court”);

       

      WHEREAS,
Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, selected assets free and clear of all debts, claims, liens, taxes,
mortgages, and any other liabilities of the Seller pursuant to 11 U.S.C. §363(b)
and (f).

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows:

       

      ARTICLE
1

       

      

       

      Definitions
and References

       

      “Affiliate” has the
meaning ascribed to such term in the Bankruptcy Code.

       

      “Agreement Date” means
the first date upon which this Agreement has been mutually executed and
delivered by Seller and Purchaser.

       

      
        
           

        

        
          Page
1

          
            

          

        

        
           

        

      

      “Ancillary Documents”
means all documents, instruments and agreements executed and delivered pursuant
to the terms of this Agreement including, without limitation, the Bill of Sale
and the Assignment of Intellectual Property described in Section 4.4(a)

       

      “Bankruptcy Case” is
defined in the recitals.

       

      “Bankruptcy Code” is
defined in the recitals.

       

      “Bankruptcy Court” is
defined in the recitals.

       

      “Bid Procedure Order”
means the order of the Bankruptcy Court approving the Bid Procedure Motion
containing, among other things, provisions substantially the same as those set
forth in Exhibit B attached hereto and reasonably satisfactory to Purchaser and
its counsel.

       

      “Business Day” means
any day that is not a Saturday, Sunday or a day on which the commercial banks in
Jacksonville, Florida are required or permitted to; be closed.

       

      “Claims” has the
meaning set forth in Section
2.1.

       

      “Closing” means the
consummation of the sale of certain assets to Purchaser pursuant to Section 4.2 hereof.

       

      “Closing Date” means
the date upon which a Closing occurs as set forth in Section 4.2 of this Agreement.

       

      “Encumbrances” shall
mean any mortgage, pledge, lien (statutory or otherwise), security interest,
warehouseman’s lien, landlord’s lien, easement, right of way, covenant, claim,
restriction, right, option, conditional sale or other title retention agreement,
charge or encumbrance of any kind or nature.

       

      “Equipment” has the
meaning set forth in Section
2.2(a).

       

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

       

      “Filing Date” is
defined in the recitals.

       

      “Governmental Entity”
means any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign.

       

      “Intellectual
Property” has the meaning set forth in Section 2.2(a).

       

      “Inventory” has the
meaning set forth in Section
2.2(c).

       

      “Knowledge” of a
Person which is not an individual means the actual knowledge (as of the date(s)
of the relevant representation) of the executive officers and directors of such
Person.

       

      “Landlord” has the
meaning set forth in Section
2.3.

       

      
        
           

        

        
          Page
2

          
            

          

        

        
           

        

      

      “Law” means any
federal, state, local or foreign law, statute, rule, regulation or ordinance of
any Governmental Entity.

       

      “Lease” has the
meaning set forth in Section 2.3,
including, without limitation, all of Seller’s right, title and interest of
whatever type or nature thereunder, including without limitation, all occupancy
and possessory rights, and all rights to leasehold improvements, guarantees,
insurance proceeds (exclusive of deductibles or self-insured retention amounts)
credits, prepaid expenses, security deposits, subrent, refunds, escrow accounts,
condemnation rights and awards and all proceeds therefrom, reciprocal easement
agreements, nondisturbance agreements, development and other ancillary
agreements relating to such Lease, and all other interests of Seller
thereunder.

       

       “Permitted
Encumbrances” means (A) statutory liens for current taxes or other
governmental charges with respect to Seller’s real property not yet due and
payable or the amount or validity of which is being contested; (B) mechanics,
carriers, workers, repairers and similar statutory liens arising or incurred in
the ordinary course of business for amounts which are not delinquent and which
could not, individually or in the aggregate, have a material adverse effect; (C)
zoning, entitlement, building and other land use regulations imposed by
governmental agencies having jurisdiction over Seller’s real property which are
not violated by the current use and operation of such real property; (D)
covenants, conditions, restrictions, easements and other matters of record
affecting title to Seller’s real property which do not unreasonably interfere
with the current use, occupancy, or value, or the marketability of title, of
such real property; and (E) any other Encumbrances which will be discharged in
connection with the Sale Order or any other actions of the Bankruptcy
Court.

       

      “Person” means any
individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other enterprise, or any government or political
subdivision or any agency, department or instrumentality thereof.

       

      “Premises” has the
meaning set forth in Section
2.3.

       

      “Price Allocation” has
the meaning set forth in Section
4.5.

       

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

       

      “Sale Order” means the
order of the Bankruptcy Court approving this Agreement and the sale by Seller to
Purchaser of the Purchased Assets, free and clear of all liens and interests in
the property pursuant to Bankruptcy Code Section 363(f) and (m) and authorizing
the assumption and assignment of the Assumed Contracts pursuant to Bankruptcy
Code Section 365 and containing, among other things, provisions substantially
the same as those set forth on Exhibit A attached
hereto and reasonably satisfactory to Purchaser and its counsel.

       

      “Taxes” means all
taxes, charges, fees, duties, levies or other assessments, including, without
limitation, income, gross receipts, net proceeds, ad valorem, real and personal
property (tangible and intangible), sales, use, franchise, excise, value added,
payroll, unemployment, stamp, leasing, lease, user, transfer, occupational,
employees’ income withholding and Social Security taxes imposed on the Sale by
the United States or any other country or by any state,

       

      
        
           

        

        
          Page
3

          
            

          

        

        
           

        

      

      municipality,
subdivision or instrumentality of the United States or of any other country or
by any other tax authority, including all applicable penalties and
interest.

       

      “Tax Return” means any
report, return or other information required to be supplied by Seller to a
taxing authority in connection with Taxes.

       

      “Termination Date” has
the meaning set forth in Section
4.5.

       

      ARTICLE
2

       

      

       

      Purchase
and Sale of Assets

       

      Section
2.1. Agreement to Purchase and
Sell. On the terms and subject to the conditions contained in this
Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell
to Purchaser, all of Seller’s right, title and interest in and to the Purchased
Assets (as hereinafter defined). The Purchased Assets shall be sold to Purchaser
free and clear of any and all debts, liens, taxes, claims (as claim is defined
in Section 101(5) of the Bankruptcy Code) and other Encumbrances and liabilities
of Seller or its bankruptcy estate of whatever kind or nature, including but not
limited to any and all security interests, landlord’s liens, warehouseman’s
liens, mortgages, pledges, charges, suits, licenses, options, rights of
recovery, judgments, rights of first refusal, orders and decrees of any court or
foreign or domestic governmental entity, interest, covenants, restrictions,
indentures, instruments, leases, options, contracts, agreements, claims for
reimbursement, contribution, indemnity or exoneration, successor, products
liability, environmental, taxes, labor, alter ego and other liabilities
(collectively, “Claims”), it being understood and agreed that Purchaser does not
and shall not assume or become liable for any of the debts, liabilities or
Claims of Seller in connection with the prior operation of Seller’s business,
including any claims for negligence, products, liability, breach of contract or
labor related obligations arising out of collective bargaining agreements or
otherwise.

       

      Section
2.2. Enumeration of Purchased
Assets. The following assets of the Seller used in connection with the
Business shall constitute the “Purchased Assets”:

       

      (a) all
existing operating equipment, manufacturing equipment, office equipment,
furniture, computers, computer files and books at the Premises, together with
related spare parts and accessories, all as set forth on Schedule 2.2(a) attached
hereto and made a part hereof (collectively, the
“Equipment”).  

       

      (b) all of
Seller’s trademarks (including, without limitation, the federal trademarks
“ArtSelect” (Serial Number 78487711 – Registration Number 3084598), “ArtSelect”
(Serial Number 75452318 – Registration Number 2327273), “Poster Z” (Serial
Number 77235000) and “Art Gazebo” (Serial Number 78491642 – Registration Number
3015652), copyrights, trade names (including, without limitation, the trade name
“ArtSelect”), service marks, and service names, internet domain names, including
“artselect.com,”, trade secrets (all both registered and common law), and all
rights associated therewith and appurtenant thereto,

       

      
        
           

        

        
          Page
4

          
            

          

        

        
           

        

      

      and all
assorted goodwill all as set forth on Schedule 2.2(b) attached
hereto and made a part hereof (collectively “Intellectual
Property”);

       

      (c) all
remaining inventory of Seller (collectively, the “Inventory”).

       

      (d) All
customer lists, customer relationships, customer files, customer product
specifications, historical sales and price information, vendor and supplier
lists, historical vendor and supplier purchase and price information, marketing
plans, market studies, customer proposals and all other files and records and
business records relating to the production, marketing and sale of Seller’s
products (collectively, “Business Records”).  Purchaser agrees to
retain all such records for three years and to give the Seller and any
bankruptcy trustee subsequently appointed for Seller reasonable access and the
right to copy(at the expense of Seller or such trustee, as applicable) all such
records for their business purposes.

       

      Section
2.3. Leased Premises.
Subject to the terms and conditions set forth in this Agreement, the Purchaser
shall assume the Lease Agreement by and between Seller and Nathan Zenack, Mary
K. Miller, Johnson Children Irrevocable Trust, Clair M. and Mary K. Johnson
Revocable Trust, Robert C. and Dorothy A. Johnson as lessors (the “185th Landlord”) dated
November 16, 2007 (the “185th Lease”) for the
premises located at 2094 185th Street,
Suite H-2, Fairfield, Iowa 52556 (the “185th Premises”) and
the Lease Agreements by and between Seller and Jack H. Kulp and Suzanne Kulp,
Trustees of the Kulp  Family Trust (the “South 23rd-Landlord) last
dated July 10, 2007 (the “South 23rd Leases”) for the
premises located at 502-508 South 23rd Street,
Fairfield, Iowa 52556 (the “South 23rd Premises”) (and the
185th Lease
and the South 23rd Leases
shall be deemed included in the term “Purchased Assets” as
used herein) provided that Purchaser shall have no liability with respect to any
pre-closing liabilities under the Lease.

       

      Section
2.4. Assumed Executory
Contracts.  Subject to the terms and conditions set forth in
this Agreement, the Purchaser shall assume and agree to perform all the
following: (i) all Seller’s outstanding, unfilled customer orders entered into
in the ordinary course of business consistent with past practice as of the
Closing Date, provided that Seller shall deliver to Buyer all deposits and
payments received with respect to the unperformed  portion of such
customer orders; (ii)   the Consultant Agreement, dated August
12, 2005, between Seller and Haydn’s Consulting, Inc. and the Consultant
Agreement, dated April 1, 2005, between Seller and P.C. Harlan, Inc.; and
(iii)  all contracts listed on Schedule 2.4
(collectively, together with the 185th Lease
and the South 23rd Leases,
the  “Assumed Contracts”), provided that Purchaser shall have no
liability for preclosing liabilities and obligations under the Assumed Contracts
except for customer orders.

       

      Section
2.5. Excluded Assets. The
Purchased Assets shall only include the assets set forth in Section 2.2 and Section 2.3 and Section 2.4, and shall not include any
other asset of Seller or its bankruptcy estate, or the assets of Parent and its
bankruptcy estate, including, without limitation, the following “Excluded
Assets”:

       

      
        
           

        

        
          Page
5

          
            

          

        

        
           

        

      

      

       

      (a) all cash
and cash equivalents (including the Purchase Price) or similar investments, bank
accounts, commercial paper, certificates of deposit, Treasury bills and other
marketable securities;

       

      (b) all
accounts receivable and other receivables, whether or not billed;

       

      (c) all of
Seller’s credits, prepaid expenses, deferred charges, advance payments, security
deposits (other than security deposit under the Lease), returns to and rebates
from vendors, and prepaid items arising prior to the Closing;

       

      (d) all other
tangible property (other than Inventory, Equipment, Intellectual Property and
Business Records) and all warranties and guarantees, if any, express or implied,
in connection therewith to the extent transferable

       

      (e) the
rights of Seller under this Agreement and all cash and non-cash consideration
payable or deliverable to Seller under this Agreement;

       

      (f) all
rights which accrue or will accrue to the benefit of the Seller under this
Agreement or any document executed and delivered in connection
herewith;

       

      (g) all
rights to refunds or recoupment of taxes of the Seller for periods ending on or
before the Closing Date;

       

      (h) all of
Seller’s corporate and tax books and records, including, without limitation, the
corporate charter, seals, minute books, stock transfer books and other documents
relating exclusively to the organization and existence of the Seller as a
limited liability company and accounts receivable records (excluding Business
Records, provided Seller and its bankruptcy trustee shall have the right to copy
(at the expense of Seller or such trustee, as applicable) any Business Records
for Trustee’s business purposes);

       

      (i) all
causes of action belonging to Seller or its bankruptcy estate, including, but
not limited to, any causes of action (i) against any Affiliates of Seller,
and/or (ii) arising under Chapter 5 of the Bankruptcy Code;

       

      (j) all
materials subject to any attorney-client or other privilege as well as any
information concerning employees, the disclosure of which would violate an
employee’s reasonable expectation of privacy; and

       

      (k) all
insurance policies and all rights thereunder.

       

      Section
2.6. Deemed Consents and
Cures.  For all purposes of this Agreement (including all
representations and warranties of Seller contained herein), Seller shall be
deemed to have obtained all required consents in respect of the assignment of
any Assumed Contract and to have cured all defaults thereunder if, and to the
extent that, pursuant to the Sale Order, Seller is authorized to assume and
assign Assumed Contracts and/or Assumed Leases to Purchaser pursuant to section
365 of the Bankruptcy Code.

       

      
        
           

        

        
          Page
6

          
            

          

        

        
           

        

      

      

       

      ARTICLE
3

       

      

       

      Liabilities

       

      Section
3.1. Excluded
Liabilities.  Purchaser shall not assume and shall not be
deemed to have assumed or otherwise be liable for any debts, Claims, obligations
or other liability of Seller or its bankruptcy estate whatsoever, except of post
closing obligations under Assumed Contracts and obligations to customers under
customer orders (the “Excluded
Liabilities”), all of which shall remain the sole responsibility and
obligation of Seller.

       

      ARTICLE
4

       

      

       

      Purchase
Price; Manner of Payment and Closing

       

      Section
4.1. Consideration. The
purchase price (the “Purchase Price”) for
the Purchased Assets shall be Seven Hundred Thousand Dollars
($700,000.00).  Solely for the purposes of the evaluation by Seller of
any competing bids, no additional value shall be attributed to the
Inventory.  The Purchaser agrees to pay the Purchase Price in the
manner described in Section 4.2 below.
The Purchase Price shall be allocated among the Purchased Assets in the manner
described in Section 4.4.

       

      Section
4.2. Time and Place of the
Closing. The closing of the transactions contemplated by this Agreement
shall take place at 10:00 a.m., Eastern Standard Time, at the offices Foley
& Lardner LLP, Jacksonville Florida (the “Foley Firm”), (a)
within three (3) Business Days after all of the conditions set forth in Article 7 have been satisfied or waived (or
such longer period after such conditions have been satisfied as may be required
by the Sale Order under the provisions of the Federal Rules of Bankruptcy
Procedure 6004(g) or 6006(d)), or (b) on such other date as the Parties mutually
agree upon so long as Purchaser is deemed a good faith purchaser under 11 U.S.C.
§ 363(m), but no later than sixty (60) days from the Filing Date, time being of
the essence (the “Closing”). The date
on which the Closing occurs in accordance with the foregoing and effective upon
receipt of the Purchase Price is referred to in this Agreement as the “Closing
Date.”

       

      Section
4.3. Manner of Payment of the
Consideration. Contemporaneous with the execution of this Agreement,
Purchaser shall deliver to Foley Firm, acting as escrow agent,  a
cashier’s check for $50,000 (the “Deposit”), to be held
by the Foley Firm in escrow in a non-interest bearing trust account subject to
the terms hereof. At the Closing, Purchaser shall authorize the release of the
Deposit to Seller and pay the balance of the Purchase Price to the
Seller  by wire transfer of immediately available funds to an account
designated by Seller, which Seller shall designate by written notice delivered
to Purchaser not later than two (2) Business Days prior to the Closing
Date.  If the sale does not close and the Purchaser is not in default
of this Agreement, the Deposit shall be returned to Purchaser.

       

      
        
           

        

        
          Page
7

          
            

          

        

        
           

        

      

      

       

      Section
4.4. Closing Deliveries.
At the Closing:

       

      (a) Seller
shall execute and deliver to Purchaser a Bill of Sale, and an Assignment of
Intellectual Property, substantially in the forms attached as Exhibits C-1 and C-2
and such other bills of sale, endorsements, assignments and such other
instruments of transfer and conveyance, in form and substance reasonably
satisfactory to Purchaser’s counsel, as shall be effective, together with the
Sale Order, to vest in Purchaser as of the Closing Date good title, free and
clear, in accordance with the terms of the Sale Order, of any Claims to all of
the Purchased Assets as provided herein and in the Sale Order;

       

      (b) Purchaser
shall deliver to Seller, a certificate, dated the Closing Date and signed by
Purchaser’s President, Chief Executive Officer or Chief Operating Officer,
certifying that the representations and warranties of Purchaser contained in Section 5.1 are accurate and complete both
when made and at and as of the Closing Date with the same effect as though made
at and as of such time and that all covenants required by the terms hereof to be
performed by Purchaser on or before the Closing Date, to the extent not waived
by Seller in writing, have been so performed in all material respects (or, if
any such covenant has not been so performed, indicating that such covenant has
not been performed); and

       

      (c) Purchaser
shall deliver to Seller, a certificate, dated the Closing Date and signed by
Purchaser’s President, Chief Executive Officer or Chief Operating Officer
attaching (A) a certified copy of the resolutions of the board of directors of
Purchaser authorizing the execution, delivery and performance of this Agreement
and all documents associated herewith; and (B) a certified copy of the
certificate of incorporation and by-laws of Purchaser and all amendments
thereto.

       

      Section
4.5. Allocation of
Consideration. The Purchase Price shall be allocated among the Purchased
Assets in the manner required by Section 1060 of the Internal Revenue Code of
1986, as amended (the “Price Allocation”).
The Purchase Price shall be allocated among the Purchased Assets in accordance
with Schedule
4.5. Each Party
agrees to timely file an IRS Form 8594 reflecting the Price Allocation for the
taxable year that includes the Closing Date and to make any timely filing
required by applicable state or local laws. Each Party hereto shall adopt and
utilize the Price Allocation for purposes of all tax returns filed by them and
shall not voluntarily take any position inconsistent with the foregoing in
connection with any examination of any tax return, any refund claim, any
litigation proceeding or otherwise. In the event that the Price Allocation is
disputed by any taxing authority, the Party receiving notice of the dispute
shall promptly notify the other Party of such dispute and the Parties shall
cooperate in good faith in responding to such dispute in order to preserve the
effectiveness of the Price Allocation.

       

      Section
4.6. Prorations. All
obligations due with respect to the Purchased Assets for periods prior to the
Closing Date shall be paid in full or otherwise satisfied by Seller, and all
obligations due with respect to the Purchased Assets for periods from and after
the Closing Date shall be paid in full or otherwise satisfied by
Purchaser.  The covenant under this Section 4.6 shall survive the termination
of this Agreement.

       

      
        
           

        

        
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8

          
            

          

        

        
           

        

      

      

       

      ARTICLE
5

       

      

       

      Representations
and Warranties

       

      Section
5.1. Purchaser’s Representations
and Warranties. Purchaser represents and warrants to Seller
that:

       

      (a) Purchaser
is a corporation validly existing and in good standing under the laws of the
jurisdiction of its organization. Purchaser is duly qualified and in good
standing in each jurisdiction in which the nature of its business requires it to
be so qualified.

       

      (b) Purchaser
has full power and authority to enter into and perform this Agreement and all
documents and instruments to be executed by Purchaser pursuant to this
Agreement. The execution and delivery of this Agreement by Purchaser, and the
performance by Purchaser of all of its obligations hereunder, have been duly
authorized and approved prior to the date hereof by all necessary entity action.
This Agreement has been duly executed and delivered by Purchaser and constitutes
its legal, valid and binding agreement, enforceable against it in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.

       

      (c) Except
for the Court’s entry of the Sale Order, no consent, authorization, order or
approval of, or filing or registration with, any governmental authority or other
Person is required for the execution and delivery by Purchaser of this Agreement
and the consummation by Purchaser of the transactions contemplated by this
Agreement.

       

      (d) Neither
the execution and delivery of this Agreement by Purchaser, nor the consummation
by Purchaser of the transactions contemplated hereby, will conflict with or
result in a breach of any of the terms, conditions or provisions of the
certificate of formation or operating agreement of Purchaser, or of any
agreement or instrument to which Purchaser is a party or any of its properties
is subject or bound or any statute or administrative regulation, or of any
order, writ, injunction, judgment or decree of any court or governmental
authority or of any arbitration award that is binding upon Purchaser, which
breach or conflict would materially affect Purchaser’s ability to perform its
obligations hereunder.

       

      (e) Purchaser
has not dealt with any person or entity who is or may be entitled to a broker’s
commission, finder’s fee, investment banker’s fee or similar payment from Seller
for arranging the transactions contemplated hereby or introducing the Parties to
each other.

       

      (f) Purchaser
has and, at Closing, shall have sufficient cash on hand to pay the Purchase
Price and to make all other necessary payments of fees and expenses in
connection with the transactions contemplated by this Agreement, if
any.

       

      
        
           

        

        
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9

          
            

          

        

        
           

        

      

      

       

      (g) PURCHASER
HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
SECTION 5.2 BELOW AND OTHERWISE
EXPRESSLY STATED IN THIS AGREEMENT OR THE ANCILLARY DOCUMENTS, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY MATTER RELATING TO THE PURCHASED ASSETS INCLUDING, WITHOUT LIMITATION,
INCOME TO BE DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE PURCHASED
ASSETS, THE VALUE OF THE PURCHASED ASSETS (OR ANY PORTION THEREOF), THE
TRANSFERABILITY OF THE PURCHASED ASSETS, TITLE TO THE PURCHASED ASSETS (OR ANY
PORTION THEREOF), OR ANY OTHER MATTER OR THING RELATING TO THE PURCHASED ASSETS
OR ANY PORTION THEREOF. WITHOUT IN ANY WAY LIMITING THE FOREGOING, SELLER HEREBY
DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE AS TO ANY PORTION OF THE PURCHASED ASSETS. PURCHASER
FURTHER ACKNOWLEDGES THAT PURCHASER HAS CONDUCTED AN INDEPENDENT INSPECTION AND
INVESTIGATION OF THE PHYSICAL CONDITION OF THE PURCHASED ASSETS AND ALL SUCH
OTHER MATTERS RELATING TO OR AFFECTING THE PURCHASED ASSETS AS PURCHASER DEEMED
NECESSARY OR APPROPRIATE AND THAT IN PROCEEDING WITH ITS ACQUISITION OF THE
PURCHASED ASSETS, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES EXPRESSLY SET
FORTH IN SECTION 5.2, PURCHASER IS DOING
SO BASED SOLELY UPON SUCH INDEPENDENT INSPECTIONS AND INVESTIGATIONS.
ACCORDINGLY, PURCHASER WILL ACCEPT THE PURCHASED ASSETS AT THE CLOSING “AS IS,”
“WHERE IS,” AND “WITH ALL FAULTS” INCLUDING THE INVENTORY WHICH IS PURCHASED
STRICTLY WITHOUT ANY POSSIBLE REPRESENTATIONS OR WARRANTIES.

       

      Section
5.2. Seller’s Representations and
Warranties. Seller represents and warrants to Purchaser
that:

       

      (a) Organization, Standing and
Power.  Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.  Seller has the requisite power and authority to own, lease
and operate their properties, including the Purchased Assets, and to conduct the
Business as currently conducted.

       

      (b) Authority.  Seller
has all corporate power and authority necessary to execute this Agreement and
Ancillary Documents to which it is or will be a party (the “Seller Ancillary
Agreements”) and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Seller has been duly
authorized by all necessary corporate action, and the execution and performance
of the Seller Ancillary Documents by Seller will be authorized by all necessary
corporate action prior to the Closing.  This Agreement constitutes,
and upon execution of each of the Seller Ancillary Agreements such agreements
will constitute, valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective

       

      
        
           

        

        
          Page
10

          
            

          

        

        
           

        

      

      terms.  Notwithstanding
anything to the contrary contained herein, no provision of this Agreement is
binding upon Seller unless and until the entry of the Sale Order.

       

      (c) No Breach or
Conflict.  Except in connection with the Bankruptcy Case and
subject to the Sale Order, neither the execution, delivery or performance of
this Agreement and the Seller Ancillary Documents, nor the consummation of the
transactions contemplated hereby and thereby, will (a) cause Seller to breach
any material Law or Order that is applicable to the Business, except for such
breaches that would not be likely to have a material adverse effect, or (b)
conflict with or result in a violation of any Seller’s organizational documents.

       

      (d) Assets.  On
the Closing Date, Purchaser will acquire title to, or a valid leasehold interest
in, as applicable, all of Seller’s right, title and interest in the Purchased
Assets, free and clear of any and all Encumbrances other than Encumbrances
disclosed on Schedule 5.2(d).

       

      (e) Leased Real
Property.  

       

      (1) Seller
has delivered to Purchaser a true and complete copy of the 185th Lease and the
South 23rd Leases and all amendments thereto, including, without limitation all
superior leases.  Seller is not party to any oral real property leases
with respect to any facility.  To the knowledge of Seller, Seller has
not assigned, subleased, mortgaged, deeded in trust or otherwise transferred or
encumbered the 185th Lease or the South 23rd Leases or any interest therein,
except for any Permitted Encumbrances or except in connection with the
Bankruptcy Case. 

       

      (2) To the
knowledge of Seller, there are no pending condemnation or eminent domain
proceedings with respect to the 185th Premises or the South 23rd Premises.

       

      (3) To the
knowledge of Seller, the current use of the 185th Premises and the South 23rd
Premises does not violate in any material respect the 185th Lease or the South
23rd Leases, respectively, or any instrument of record or agreement affecting
the 185th Premises or South 23rd Premises. To the knowledge of Seller, there is
no violation of any covenant, condition, restriction, easement, agreement or
Order of any Governmental Entity having jurisdiction over the 185th Premises or
the South 23rd Premises that materially affects the use or occupancy thereof.

       

      (f) Claims, Litigation and
Disputes.  To Seller’s knowledge, except (i) as set forth on
Schedule 5.2(f) and (ii) for the
Bankruptcy Case, there is no pending proceeding before a Governmental Entity
adversely affecting (A) Seller’s ability to perform its obligations hereunder or
(B) the ownership, use, maintenance or operation of the Purchased Assets by
Seller, that in any such case if determined adversely to Seller, would
reasonably be expected to have a material adverse effect. 

       

      
        
           

        

        
          Page
11

          
            

          

        

        
           

        

      

      

       

      (g) Purchased
Contracts.  Except as would not have a material adverse effect,
(i) to Seller’s knowledge, each Assumed Contract is valid, binding upon Seller
and in full force and effect, and (ii) except for any breach or default in
connection with or as a result of the Bankruptcy Case, neither Seller, nor, to
Seller’s knowledge, any other party to any Assumed Contract is in material
breach thereof or default thereunder and there does not exist, to Seller’s
knowledge, any event, occurrence, condition, or act that, with the giving of
notice, the lapse of time, or the happening of any further event or condition,
would become a material breach or default under any Assumed
Contract.  As of the date hereof, to Seller’s knowledge, Seller has
not received any written notice of the intention of any party to terminate any
Assumed Contract.

       

      (h) Compliance With
Laws.  The Seller is in compliance with all material Laws
applicable to the Business, except in any  such case where the failure
to be in compliance would not have a material adverse effect.  To
Seller’s knowledge, Seller has not received any written notice within the past
12 months relating to violations or alleged violations or defaults under any
applicable Law or Order, where the failure to cure would result in a material
adverse effect.

       

      (i) Brokers.  Seller
has not dealt with any Person who is or may be entitled to a broker’s
commission, finder’s fee, investment banker’s fee or similar payment from
Purchaser for arranging the transaction contemplated hereby or introducing the
Parties to each other.

       

      ARTICLE
6

       

      

       

      Conduct
Prior to the Closing

       

      Section
6.1. Access and
Information. Subject to the right of Seller to limit access to certain
proprietary or confidential information prior to entry of the Sale Order and
satisfaction of all conditions to Closing, upon prior written notice to Seller,
Seller shall afford to Purchaser and to Purchaser’s financial advisors, legal
counsel, accountants, consultants, financing sources, and other authorized
representatives, access during normal business hours throughout the period prior
to the Closing Date, upon reasonable written notice, to its books, records,
properties, plants and personnel relating to the Purchased Assets and, during
such period, shall furnish as promptly as practicable to Purchaser, at
Purchaser’s expense, copies of such books and records as Purchaser shall
reasonably request.

       

      Section
6.2. Conduct of the
Business
Pending the Closing.  Subject to any obligations as debtors in
possession under the Bankruptcy Code and except as otherwise expressly
contemplated by this Agreement or the Orders of the Bankruptcy Court or except
as described on Schedule 6.2 hereto,
from the date hereof until the Closing Date, Seller shall use commercially
reasonable efforts to conduct the Business substantially in the manner as
conducted on the date of this Agreement.  Without limiting the
generality of the foregoing, subject to any obligations as debtors in possession
under the Bankruptcy Code and except as otherwise expressly contemplated by this
Agreement or the Orders of the Bankruptcy Court or with the prior written
consent of Purchaser (which consent shall not be unreasonably withheld or
delayed) or except as described in Section
6.6 hereto, from the date hereof until the Closing Date, Seller
shall:

       

      
        
           

        

        
          Page
12

          
            

          

        

        
           

        

      

      

       

      (a) Use,
preserve and maintain the Purchased Assets in the ordinary course of business
and not cause material damage to or destruction or loss of any of such Purchased
Assets;

       

      (b) Continue
to maintain the insurance covering the Purchased Assets in effect as of the date
of this Agreement;

       

      (c) Not
commit any act or omit to do any act, nor permit any act or omission to act,
which causes a material breach of any Assumed Contract except for any act or
omission in connection with or as a result of the Bankruptcy Case or the
holdback of payments to vendors on or after November 1, 2008;

       

      (d) Except in
the ordinary course of business and except for sales of Equipment, not enter
into any agreement or agreements for the sale of a material amount of any of the
Purchased Assets unless any such item of Equipment is no longer necessary for
the operation of the Business; and

       

      (e) Not,
without prior consent of Purchaser, grant any raises or bonuses to employees,
except (i) in the ordinary course of business, (ii) the raises or bonuses set
forth on Schedule 6.2(e), or (iii) raises,
bonuses, or other fringe benefits provided in any key employee retention plan or
other employee incentive or severance plan that has been or may be approved by
the Bankruptcy Court prior to the Closing.

       

      Section
6.3. Bankruptcy
Action.

       

      (a) This
Agreement shall be subject to the consideration of higher or better offers
submitted at an auction ( the “Auction”) to be conducted in the Bankruptcy Case
in accordance with Sale Procedures set forth in the Sale Procedure Motion
attached as Exhibit
B, which Seller shall promptly submit to the Bankruptcy Court for
approval upon commencement of the Bankruptcy Case.  Any competing
offer ( a “Competing
Offer”) must be submitted to the Seller, in writing, in accordance with
the Sale Procedures.  No Competing Offer shall qualify as a bid at the
Auction unless, among other things, any requested changes in the terms and
conditions from those contained in this Agreement shall have been approved by
Seller in writing prior to the Auction.

       

      (b) Purchaser
hereby confirms the Sale Order and Bid Procedure Order containing the provisions
annexed hereto as Exhibit A and Exhibit B, respectively, are acceptable to
Purchaser. Seller shall use all reasonable efforts to obtain entry of the Sale
Order;

       

      (c) Seller
shall give appropriate notice, and provide appropriate opportunity for hearing,
to all parties entitled thereto, of all motions, orders, hearings or other
proceedings relating to this Agreement or the transactions contemplated
thereby.

       

      
        
           

        

        
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13

          
            

          

        

        
           

        

      

      

       

      Section
6.4. Break-up
Fee.  In the event that, at the Auction, a Person presents a
Competing Offer which constitutes a higher or better offer in accordance with
the Bid Procedure Order and Seller subsequently consummates a sale of all or
substantially all the Purchased Assets to such Person, Purchaser shall be
entitled to a payment of a break-up fee (the “Break-up Fee”) in the amount of
$21,000, as may be permitted and paid in accordance with the Bid Procedure
Order.  The Break-up Fee shall be paid in cash from the proceeds of
and concurrent with the closing of any Competing Offer or as otherwise ordered
by the Bankruptcy Court.  The Break-up Fee shall be paid as, and
constitute an administrative expense, of Seller under Sections 503(b)(1) and
507(a)(1) of the Bankruptcy Code.  

       

      Section
6.5. Expense Reimbursement
Fee.  In the event that, at the Auction, a Person presents a
Competing Offer which constitutes a higher or better offer in accordance with
the Bid Procedure Order and Seller subsequently consummates a sale of all or
substantially all the Purchased Assets to such Person, Purchaser shall be
entitled to a payment of an expense reimbursement fee ( the “Expense
Reimbursement Fee”) in the amount of $50,000, as may be permitted and paid in
accordance with the Sale Procedures Order.  The Expense Reimbursement
Fee shall be paid in cash from the proceeds of and concurrent with the closing
of any Competing Offer or as otherwise ordered by the Bankruptcy
Court.  The Expense Reimbursement Fee shall be paid as, and constitute
an administrative expense, of Seller under Sections 503(b)(1) and 507(a)(1) of
the Bankruptcy Code.

       

      Section
6.6. Schedules. The
Schedules hereto may be updated by Seller up to the Closing Date, and shall be
updated by Seller on the Closing Date; provided that such revised Schedules do
not materially affect the terms of this Agreement or the consummation of the
transactions contemplated hereby.

       

      Section
6.7. Commercially Reasonable
Efforts; Transfer of Assets.  Seller will use commercially
reasonably efforts to obtain the Sale Order required for the consummation of the
transactions contemplated by this Agreement subject to Seller’s right to accept
higher or better offers at the Auction.

       

      ARTICLE
7

       

      

       

      Conditions
to Closing

       

      Section
7.1. Conditions to Seller’s
Obligations. The obligation of Seller to consummate the transactions
contemplated hereby is subject to the satisfaction at or prior to the Closing
Date of the following conditions:

       

      (a) The
representations and warranties made by Purchaser in Section 5.1 shall have been true and
correct in all material respects when made and shall be true and correct in all
material respects as if originally made on and as of the Closing
Date;

       

      (b) All
obligations of Purchaser to be performed hereunder on or prior to the Closing
Date shall have been duly performed in all material respects;

       

      
        
           

        

        
          Page
14

          
            

          

        

        
           

        

      

      

       

      (c) No action
or proceeding before any court, government body or other tribunal shall have
been commenced or threatened (by a party other than Seller) wherein an
unfavorable judgment, decree or order would (i) prevent the carrying out of this
Agreement or any of the transactions contemplated hereby, (ii) declare unlawful
any of the transactions contemplated by this Agreement or (iii) cause any of
such transactions to be rescinded as reasonably determined by Purchaser and
Purchaser’s counsel;

       

      (d) The Bid
Procedure Order shall have been entered by the Bankruptcy Court and the
effectiveness of the Bid Procedure Order shall not have been modified, reversed,
vacated, stayed, restrained or enjoined.

       

      (e) The Sale
Order containing, among other things, provisions substantially the same as those
described in Exhibit
A hereto, shall have been entered by the Bankruptcy Court and the
effectiveness of the Sale Order shall not have been modified, reversed, vacated,
stayed, restrained or enjoined on the Closing Date; .

       

      (f) To the
extent not addressed or covered by the Sale Order, Seller shall have received
the consent of all third parties holding Encumbrances, Claims or interests
against the Purchased Assets to the release of all such Encumbrances, Claims and
interests in the Purchased Assets as required under 11 U.S.C. § 363(b) and
(f);

       

      (g) Seller’s
receipt of Purchaser’s closing deliveries pursuant to Section 4.3;

       

      (h) Seller’s
receipt of the Deposit and the balance of the Purchase Price pursuant to Section 4.2.  Each of the
foregoing conditions is for the benefit of Seller, which may waive any of such
conditions at, or prior to, the Closing.

       

      Section
7.2. Conditions to Purchaser’s
Obligations. The obligation of Purchaser to consummate the transaction
contemplated hereby is subject to the satisfaction at or prior to the Closing
Date of the following conditions:

       

      (a) The
representations and warranties made by Seller in Section 5.2 shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects as if originally made on and as of the Closing
Date;

       

      (b) All
obligations of Seller to be performed hereunder on or prior to the Closing Date
shall have been duly performed in all material respects;

       

      (c) No action
or proceeding before any court, government body or other tribunal shall have
been commenced or threatened which seeks to (i) nullify, restrict or modify the
rights and protections afforded Purchaser in this Agreement and the Sale Order,
(ii) prevent the carrying out of this Agreement or any of the transactions
contemplated hereby, (iii) declare unlawful the transactions contemplated by
this Agreement, (iv) cause such transactions to be rescinded or (v) materially
affect the right of Purchaser to own, operate or control the Purchased Assets
following the Closing as reasonably determined by Purchaser and Purchaser’s
counsel;

       

      
        
           

        

        
          Page
15

          
            

          

        

        
           

        

      

      

       

      (d) The Bid
Procedure Order shall have been entered by the Bankruptcy Court and the
effectiveness of the Bid Procedure Order shall not have been modified, reversed,
vacated, stayed, restrained or enjoined.

       

      (e) The Sale
Order containing, among other things, provisions substantially the same as those
described in Exhibit
A hereto, shall have been entered by the Bankruptcy Court and the
effectiveness of the Sale Order shall not have been modified, reversed, vacated,
stayed, restrained or enjoined on the Closing Date;

       

      (f) To the
extent not addressed or covered by the Sale Order, Seller shall have received
the consent of all third parties holding Encumbrances, Claims or interests
against the Purchased Assets to the release of all such Encumbrances, Claims and
interests in the Purchased Assets as required under 11 U.S.C. § 363 (b) and
(f);

       

      (g) Purchaser’s
receipt of Seller’s closing deliveries pursuant to Section 4.3. Each of the foregoing
conditions is for the benefit of Purchaser, which may waive any of such
conditions at, or prior to, the Closing.

       

      (h) Seller
shall have delivered to Purchaser such bills of sale, endorsements, assignments,
and other good and sufficient instruments of conveyance and transfer, in form
and substance reasonably satisfactory to Purchaser and its counsel, as are
effective to vest in Purchaser good and marketable title to all of Seller’s
interest in the Purchased Assets free and clear of any encumbrances or
Claims.

       

      ARTICLE
8

       

      

       

      Other
Agreements

       

      Section
8.1. Further Assurances.
The Parties shall execute such further documents, and perform such further acts,
as may be reasonably necessary to transfer and convey the Purchased Assets to
Purchaser, on the terms herein contained, and to otherwise comply with the terms
of this Agreement and. consummate the transaction contemplated
hereby.

       

      Section
8.2. Post-Closing Access.
Purchaser agrees to store the Business Records and computers, computerbooks,
records and files, for 3 years following Closing and to permit Seller to have
access to the Business Records for 3 years following the Closing Date, without
cost or expense.

       

      Section
8.3. Efforts and Actions to Cause
Closings to Occur. Upon the terms and subject to the conditions of this
Agreement, each of Seller and Purchaser shall use their respective commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done and cooperate with each other in order to do, all things
necessary, proper or advisable (subject to any applicable laws) to consummate
the Closing as promptly as practicable, including, but not limited to, the
preparation and filing of all motions, forms, registrations and notices required
to be filed to consummate the Closing and the taking of such actions as are
reasonably necessary to obtain any requisite approvals, authorizations,
consents, orders, licenses,

       

      
        
           

        

        
          Page
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       permits,
exemptions or waivers by any third party or governmental entity. In addition, no
Party shall take any action after the date hereof that could reasonably be
expected to materially delay the obtaining of, or result in not obtaining, any
permission, approval or consent from any governmental entity or other Person
required to be obtained prior to Closing.

       

      Section
8.4. Collection of Accounts
Receivable Following the Closing.  Purchaser shall promptly
remit to Seller any payments received by Purchaser following the Closing Date
with respect to Seller’s accounts receivable.

       

      Section
8.5. Survival. Except as
specifically provided to the contrary in this Agreement, the representations,
warranties, covenants and agreements of the Parties contained in this Agreement
or any agreement delivered in connection herewith shall not survive the Closing
Date.

       

      ARTICLE
9

       

      

       

      Termination

       

      Section
9.1. Termination by Mutual
Consent. This Agreement may be terminated at any time prior to the
Closing Date by mutual written agreement of Seller and Purchaser.

       

      Section
9.2. Termination by
Seller. Seller may terminate this Agreement at any time prior to the
Closing Date if:

       

      (a) there has
been a material breach by Purchaser of any of its representations or warranties
contained in this Agreement which breach is not cured within ten (10) Business
Days after written notice thereof;

       

      (b) there has
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of Purchaser, which breach is not curable or, if curable,
is not cured within ten (10) days after written notice of such breach is given
by Seller to Purchaser;

       

      (c) the
conditions to the obligations of Seller set forth in Section 7.1 shall not have been waived or
satisfied on or before the Termination Date or such earlier date as may be
specified therefor, including, without limitation, as a result of an overbid by
a third party that results in an Sale Order for the transactions contemplated
hereby not being entered by the Bankruptcy Court;

       

      (d) there
shall be in effect a final non-appealable court order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
or

       

      (e) the
Closing Date shall not have occurred on or prior to sixty (60) days from the
Filing Date (the “Termination Date”);
provided, however, that the right to terminate shall not be available under this
Section 9.2(e) if the Closing shall not
have occurred by such date as a result of the failure of Seller to fulfill any
of its obligations under this Agreement.

       

      
        
           

        

        
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17

          
            

          

        

        
           

        

      

      

       

      Section
9.3. Termination by
Purchaser. Purchaser may terminate this Agreement at any time prior to
the Closing Date if:

       

      (a) there has
been a material breach by Seller of any of its representations or warranties
contained in this Agreement which breach is not cured within ten (10) Business
Days after written notice thereof;

       

      (b) there has
been a material breach of any of the covenants or agreements set forth in this
Agreement on the part of Seller, which breach is not curable or, if curable, is
not cured within. ten (10) days after written notice of such breach is given by
Purchaser to Seller;

       

      (c) the
conditions to the obligations of Purchaser set forth in Section 7.2 shall not have been waived or
satisfied on or before the Termination Date or such earlier date as may be
specified therefore;

       

      (d) the Bid
Procedure Order, including the Break-up Fee and the Expense Reimbursement Fee,
is not approved by the Bankruptcy Court within twenty (20) days of the Filing
Date;

       

      (e) the Sale
Order, including the Break-up Fee and the Expense Reimbursement Fee, is not
approved by the Bankruptcy Court within forty (40) days of the Filing
Date;

       

      (f) there
shall be in effect a final non-appealable court order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated
hereby;

       

      (g) the entry
of an order by the Bankruptcy Court authorizing the sale of the Purchased Assets
of Seller to any entity other than Buyer; or

       

      (h) the
Closing Date shall not have occurred on or prior to the Termination Date;
provided, however, that the right to terminate shall not be available under this
Section 9.3(h) if the Closing shall not
have occurred by such date as a result of the failure of Purchaser to fulfill
any of its obligations under this Agreement.

       

      Section
9.4. Effect of Termination and
Abandonment. In the event of termination of the Agreement pursuant to
this Article 9, written notice thereof shall as promptly as practicable be given
to the other Party to this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
either of the Parties, and the Deposit shall (i) in the event of a termination
under Section 9.2(d) or 9.3, be returned to Purchaser without the
requirement of Purchaser’s delivery of a written instruction or authorization to
the Foley Firm concerning the same which instruction and authorization is hereby
granted, and (ii) in the event of a termination under Section 9.2(a), (b), (c) or (e), be delivered to Seller without the
requirement of Seller’s delivery of a written instruction or authorization to
the Foley Firm concerning the same which instruction and authorization is hereby
granted. If this Agreement is terminated as provided herein upon delivery of the
Deposit in accordance with this Section
9.4, all obligations of the Parties shall terminate.

       

      
        
           

        

        
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      ARTICLE
10

       

      

       

      Miscellaneous

       

      Section
10.1. Publicity. Except as
otherwise required by law or in connection with Seller’s bankruptcy filings with
the Bankruptcy Court and the publication of requisite notices of sale in
national and regional publications in connection with the sale of the Purchased
Assets in the bankruptcy proceedings, press releases concerning this transaction
shall be made only with the prior approval of Seller and Purchaser, which
approval shall not be unreasonably withheld.  Notwithstanding the
forgoing, the Parties acknowledge that Seller will advertise the proposed sale
as part of the Bankruptcy auction process.

       

      Section
10.2. Notices. All notices
required or permitted to be given hereunder shall be in writing and may be
delivered by hand, by facsimile or by nationally recognized private courier.
Notices delivered by hand, by facsimile or by nationally recognized private
carrier shall be deemed given on the first business day following receipt;
provided, however, that a notice delivered by facsimile shall only be effective
if such notice is also delivered by hand, or deposited in the United States
mail, postage prepaid, registered or certified mail on or before two (2)
Business Days after its delivery by facsimile. All notices shall be addressed as
follows:

       

      
        	
                if
      to Purchaser:

              	
                Metaverse
      Corporation

                277
      Whitehead Road

                Hamilton,
      NJ 08619

                Attention:
      President

                Fax:
      (609) 689-6608

                 

                 

              
	
                with
      a copy to:

              	
                Sonnenschein
      Nath & Rosenthal LLP

                1221
      Avenue of the Americas

                New
      York, NY  10020

                Fax:  (212)
      768-6800

                Attention:                                Peter
      L. Korn, Jr., Esq.

                Farrington Yates,
      Esq.

                 

              

      

      
        
           

        

        
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19

          
            

          

        

        
           

        

      

      

      
        	
                if
      to Seller to:

              	
                ArtSelect,
      Inc.

                7660
      Centurion Parkway

                Jacksonville,
      FL  32256

                Fax:  (904)
      641-4480

                Attention:                                John
      Z. Ferguson

                 

              
	
                with
      a copy to Seller’s counsel:

              	
                Foley
      & Lardner LLP

                One
      Independent Drive, Suite 1300

                Jacksonville,
      FL 32202

                Fax:
      (904) 359-8700

                Attention:                                Michael
      Kirwan, Esq.

                Gardner F. Davis,
      Esq.

              

      

      

       

      or, in
each case, at such other address as may be specified in writing to the other
party.

       

      Section
10.3. Expenses. Other than
as set forth in this Agreement, each of Seller and Purchaser will bear their
respective costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby.

       

      Section
10.4. Entire Agreement.
This Agreement and the instruments to be delivered by the Parties pursuant to
the provisions hereof constitute the entire agreement between the Parties. Each
Exhibit and Schedule attached hereto shall be considered incorporated into this
Agreement.

       

      Section
10.5. Applicable Law. This
Agreement shall be governed and controlled as to validity, enforcement,
interpretation, construction, effect and in all other respects by the internal
laws of the State of Florida applicable to contracts made therein, without
regard to rules of conflicts of law.

       

      Section
10.6. Binding Effect; No Third
Party Beneficiaries. This Agreement shall inure to the benefit of and be
binding upon the Parties hereto, and their successors and permitted assigns. The
parties specifically acknowledge and agree that the Seller as
debtor-in-possession under the Bankruptcy Code and any trustee appointed for
Seller under the Bankruptcy Code shall be specifically entitled to the benefit
of this Agreement.  Nothing in this Agreement, express or implied, is
intended to confer on any person other than the Parties hereto, and their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.

       

      Section
10.7. Assignability. This
Agreement shall not be assignable by either Party without the prior written
consent of the other Party, except that at or prior to the Closing, Purchaser
may assign its rights and delegate its duties under this Agreement to one or
more Affiliates; provided that such assignment shall not discharge the
obligations and liabilities of Purchaser hereunder.

       

      
        
           

        

        
          Page
20

          
            

          

        

        
           

        

      

      

       

      Section
10.8. Amendments. This
Agreement shall not be modified or amended except pursuant to an instrument in
writing executed and delivered on behalf of each of the Parties
hereto.

       

      Section
10.9. Headings. The
headings contained in this Agreement are for convenience of reference only and
shall not affect the meaning or interpretation of this Agreement.

       

      Section
10.10. Counterparts. This
Agreement maybe executed in counterparts, each of which shall constitute an
original and both of which taken together shall constitute one and the same
Agreement. Delivery of an electronic counterpart shall be effective as delivery
of a manually executed counterpart.

       

      Section
10.11. Exclusive
Jurisdiction. Purchaser and Seller agree that upon Seller’s filing
bankruptcy, all disputes arising hereunder shall, prior to the issuance of a
final decree from the Bankruptcy Court closing the Bankruptcy Case, be resolved
by the Bankruptcy Court which shall have exclusive jurisdiction over all
disputes and other matters relating to the interpretation and enforcement of
this Agreement or any ancillary document executed pursuant hereto, and Purchaser
expressly consents to and agrees not to contest such exclusive jurisdiction. If
the Bankruptcy Court does not have or abstains from exercising such
jurisdiction, Purchaser expressly consents to and agrees not to contest the non
exclusive jurisdiction of the courts of the State of Florida and, to the extent
permitted by applicable law, of any Federal Court, in each case located in
Jacksonville, Florida.

       

      Section
10.12. Tax
Matters.  In the event that Section 1146(c) of the Bankruptcy
Code does not apply to the transactions contemplated hereby, Purchaser shall be
responsible for the timely payment of all sales, use, transfer (including,
without limitation, documentary transfer stamp and like taxes) and similar taxes
payable in connection with the consummation of the transactions contemplated by
this Agreement and the sale and transfer of the Purchased Assets to Purchaser or
its designee.

       

      
        
           

        

        
          Page
21

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement as of
the date first above written.

       

      ARTSELECT,
INC.

      

      

      By:                 /s/ John Z.
Ferguson

      Name: John Z. Ferguson

      Title: President

      

      

      

      METAVERSE
CORPORATION

      

      

      By:                 /s/ Doug
Kerwin

      Name: Doug Kerwin

      Title: President

      

      

      

      
        
           

        

        
          Page
22

          
            

          

        

        
           

        

      

      TABLE
OF EXHIBITS AND SCHEDULES

       

      EXHIBIT A
– Sale Order

      

      EXHIBIT B
– Sale Procedures Order

      

      EXHIBIT
C-1 – Bill of Sale

      

      EXHIBIT
C-2 - Assignment of Intellectual Property

      

      SCHEDULE
2.2(a) – List of existing operating
equipment, manufacturing equipment, office equipment, furniture, computers,
computer files and books

      

      SCHEDULE
2.2(b) – List of trademarks, trade
names, service marks

      

      SCHEDULE
2.4 – Partner Contracts

      

      SCHEDULE
4.5 – Price Allocation

      

      SCHEDULE
5.2(d) – Encumbrances on Purchased
Assets

      

      SCHEDULE
5.2(f)- Claims, Litigation and
Disputes

      

      SCHEDULE
6.2 – Conduct of Business Pending the
Closing

      

      SCHEDULE
6.2(e) – Raises or Bonuses to
Employees

      

      

Page
23

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