Court File No. CV17-582329-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF WYNIT DISTRIBUTION, LLC, WD NAVARRE DISTRIBUTION, LLC, WD ENCORE SOFTWARE, LLC, WD NAVARRE HOLDINGS, LLC, WD HOLDINGS, LLC, WD NAVARRE DIGITAL SERVICES, LLC, WYNIT HOLDINGS, INC. AND WD NAVARRE CANADA, ULC. (the “Debtors”)
APPLICATION OF WYNIT DISTRIBUTION, LLC UNDER SECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
MOTION RECORD (Encore)
(returnable November 10, 2017)
November 3, 2017 GOLDMAN SLOAN NASH & HABER LLP 480 University Avenue, Suite 1600 Toronto ON M5G 1V2 Fax: 416-597-3370 Mario Forte (LSUC #: 27293F) Tel: 416-597-6477 Email: [email protected] Jennifer Stam (LSUC #4673J) Tel: 416-597-5017 Email: [email protected] Lawyers for the Debtors and the Foreign Representative
Court File No. CV17-582329-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF WYNIT DISTRIBUTION, LLC, WD NAVARRE DISTRIBUTION, LLC, WD ENCORE SOFTWARE, LLC, WD NAVARRE HOLDINGS, LLC, WD HOLDINGS, LLC, WD NAVARRE DIGITAL SERVICES, LLC, WYNIT HOLDINGS, INC. AND WD NAVARRE CANADA, ULC. (the “Debtors”)
APPLICATION OF WYNIT DISTRIBUTION, LLC UNDER SECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
INDEX
Tab Document Page No.
1. Notice of Motion (returnable November 10, 2017) 1-10
2. Affidavit of Greg Charleston sworn November 3, 2017 11-19
3. Affidavit of Mario Forte sworn November 3, 2017 20-245
4. Affidavit of Peter Richichi sworn September 18 , 2017 246-293
5. Draft Order 293-301
Court File No. CV17-582329-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES' CREDITORS
ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF WYNIT DISTRIBUTION, LLC, WD NAVARRE DISTRIBUTION, LLC, WD ENCORE SOFTWARE, LLC, WD NAVARRE HOLDINGS, LLC, WD HOLDINGS, LLC,
WD NAVARRE DIGITAL SERVICES, LLC, WYNIT HOLDINGS, INC. AND WD NAVARRE CANADA, ULC. (the “Debtors”)
APPLICATION OF WYNIT DISTRIBUTION LLC UNDER
SECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
NOTICE OF MOTION
(Encore) (returnable November 10, 2017)
WYNIT Distribution, LLC (“WYNIT”), in its capacity as the foreign representative of the
Debtors pursuant to Part IV the Companies' Creditors Arrangement Act, R.S.C. 1985, c. c-36, as
amended (the “CCAA”), will make a motion to a Judge of the Commercial List on Friday,
November 10, 2017 at 8:30am or as soon after that time as the motion can be heard, at 330
University Avenue, 8th Floor, Toronto, Ontario.
THE PROPOSED METHOD OF HEARING: The motion is to be heard orally via Court Call.
THE MOTION IS FOR:
1. an order providing for, amongst other things,
a. abridging the time for service of the notice of motion and motion record and
validating the service of such motion materials;
b. recognizing in Canada and enforcing following Order of the U.S. Court:
1
i. Order Granting an Expedited Hearing, Approving Bid Protections and
Procedures for the Solicitation of Offers for sale of the Debtors’ Assets Free
and Clear of Liens, Claims, Encumbrances, and Interests, and Granting
Related Relief (the “Encore Bid Procedures Order”);
c. Recognizing in Canada and enforcing such Orders as the U.S. Court may grant on
or about November 9, 2017 in connection with the Debtors’ proposed sale of the
Encore Assets (defined below):
i. Order (A) Approving the Asset Purchase Agreement between the Debtors
and the Purchaser; (B) Authorizing the Sale of Substantially all of the
Debtors’ Assets Free and Clear of all Liens, Claims, Encumbrances, and
Interests; (C) Authorizing the Distribution of Excess Sale Proceeds to
Secured Creditors; and (D) Granting Related Relief (the “Encore Sale
Order”); and
ii. Order Authorizing the Assumption and Assignment, or Rejection, of Certain
Executory Contracts and Unexpired Leases under 11 U.S.C. §365 and
Granting Related Relief (the “Encore Assignment and Assumption
Order”); and
d. Vesting any and all right, title and interest of the Sellers (defined below) in the
Canadian Assets (defined below) in the Purchaser (defined below); and
2. such further and other relief as this Court may deem just.
2
THE GROUNDS FOR THE MOTION ARE:
The Chapter 11 Proceedings
1. On September 8, 2017, each of the Debtors filed petitions pursuant to chapter 11 of title
11 of the United States Code (the “Chapter 11 Proceedings”) in the United States
Bankruptcy Court for the State of Minnesota (the “U.S. Court”);
2. On September 13 and 14, 2017, the U.S. Court granted certain “first day orders” (the
“Foreign Orders”) in respect of the Chapter 11 Proceedings;
The Canadian Proceedings
3. On September 8, 2017, this Court entered in interim stay order pursuant to Section 101 of
the Courts of Justice Act (Ontario) to provide for an interim stay of proceedings between
the filing of the petition and the return of the application to seek recognition of the Chapter
11 Proceedings pursuant to Part IV of the CCAA;
4. After the granting of the Foreign Orders, the Applicant returned to this Court on September
21, 2017 seeking recognition of the Chapter 11 Proceedings as it related to WD Navarre
Canada, ULC only as it was the only Canadian incorporated company of the Debtors;
5. On September 21, 2017, this Court grant an initial order and supplemental order (as
amended and restated, the “Supplemental Order”);
6. On October 23, 2017, this Court granted an Order expanding these proceedings to apply to
all of the Debtors;
The Encore Sale
3
7. The business of Encore consists of operations relating to the legacy Navarre software
(the “Encore Software Business”) and product distribution entity acquired by WYNIT in
2014;
8. At the outset of the proceedings, the Debtors stated their intent to sell the Encore
Software Business as a separate unit from the liquidation of their other assets;
9. The Debtors have now negotiated an asset purchase agreement (the “Stalking Horse
Agreement”) between WD Encore Software, LLC and WD Navarre Holdings, LLC as
sellers (the “Sellers”) and Avanquest North America LLC as buyer (the “Stalking Horse
Purchaser”) for the sale of the assets associated with the Encore Software Business (the
“Encore Assets”) for a purchase price of US$1,025,000;
10. Pursuant to the Stalking Horse Agreement, the Stalking Horse Purchaser is entitled to a
US$30,000 break up fee in certain circumstances;
11. The Stalking Horse Agreement also contemplates that the Debtors will provide certain
transition services pursuant to a transition services agreement for a period of time after
the closing;
12. Based on the Debtors’ books and records, there is inventory related to the Encore
Software Business located at the warehouse in Mississauga with a book value of
US$73,000 as well as a number of the contracts which may be potentially assigned under
the transaction are with counterparties that have a Canadian address (collectively, the
“Canadian Assets”);
4
13. On October 31, 2017, the U.S. Court granted the Encore Bid Procedures Order for an
expedited sale process for the Encore Assets;
14. A hearing has been scheduled by the U.S. Court for approval of the Encore Sale Order
and the Encore Assignment and Assumption Order on November 9, 2017;
15. Currently, it is anticipated that closing will occur on November 10, 2017;
16. The Sellers are required to deliver to the Stalking Horse Purchaser or other successful
buyer at auction (the “Purchaser”) the Encore Assets including the Canadian Assets free
and clear of all liens and encumbrances;
17. The contract assignment process proposed pursuant to the Encore Assignment Motion
provides the U.S. Court as a venue for any contract counterparty to object to the
assignment of its contract;
18. If the U.S. Court grants the Encore Sale Order and the Encore Assignment and
Assumption Order, the expedited granting of the recognition of these orders and the
Encore Bid Procedures Order will allow the Debtors to maximize value for the sale of the
Encore Assets and close the transaction on the contemplated timeframe;
Additional Grounds
19. section 49 of the CCAA;
20. the inherent and equitable jurisdiction of this court; and
21. such further and other grounds as counsel may advise and this Court may permit.
5
THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of the motion:
1. the affidavit of Gregory Charleston sworn November 3, 2017;
2. the affidavit of Mario Forte sworn November 3, 2017;
3. the supplemental affidavit of Mario Forte, to be filed;
4. the Affidavit of Peter Richichi sworn September 18, 2017;
5. the fourth report of the Information Officer, to be filed; and
6. Such further and other documentary evidence as counsel may advise and this Court may
accept.
DATE: November 3, 2017 GOLDMAN SLOAN NASH & HABER LLP
Barristers and Solicitors Suite 1600, 480 University Avenue Toronto, Ontario, M5G 1V2 Fax: 416-597-3370 Mario Forte LSUC #: 27293F Tel: 416-597-6477 Email: [email protected]
Jennifer Stam LSUC #46735J Tel: 416-597-5017 Email: [email protected]
Lawyers for the Debtors and the Foreign Representative
TO: THE SERVICE LIST
6
Court File No. CV17-582329-00CL
ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF WYNIT DISTRIBUTION, LLC, WD NAVARRE DISTRIBUTION, LLC, WD ENCORE SOFTWARE, LLC, WD NAVARRE HOLDINGS, LLC, WD HOLDINGS, LLC, WD NAVARRE DIGITAL SERVICES, LLC, WYNIT HOLDINGS, INC. AND WD NAVARRE CANADA, ULC. (the “Debtors”)
APPLICATION OF WYNIT DISTRIBUTION, LLC UNDER SECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
SERVICE LIST
GOLDMAN SLOAN NASH & HABER LLP 480 University Avenue, Suite 1600 Toronto ON M5G 1V2 Fax: 416-597-3370 Mario Forte (LSUC #: 27293F) Tel: 416-597-6477 Email: [email protected] Jennifer Stam (LSUC #4673J) Tel: 416-597-9922 Email: [email protected] Lawyers for the Debtors and the Foreign Representative
KSV KOFMAN INC. 150 King Street West, Suite 2308 Box 42 Toronto, ON M5H 1J9
David Sieradzki Tel: 416-932-6030 Email: [email protected]
Shelby Draper Tel: 416-932-6232 Email: [email protected]
The Proposed Information Officer
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GOODMANS LLP Bay Adelaide Centre 333 Bay Street, Suite 3400 Toronto, Ontario M5H 2S7
Joe Latham Tel: 416-597-4211 Email: [email protected]
Jason Wadden Tel: 416-597-5165 Email: [email protected]
Lawyers for Wells Fargo Bank, as agent
CHAITONS LLP 5000 Yonge Street, 10th Floor Toronto, ON M2N 7E9
George Benchetrit Tel: 416-218-1141 Email: [email protected]
Lawyers for the proposed information officer
MCMILLAN LLP Brookfield Place 4400-181 Bay Street Toronto, ON M5J 2T3
Wael Rostom LS#: 43165S Tel: 416.865.7790 [email protected] Jeffrey Levine LS#: 55582H Tel: 416.865.7791 [email protected]
Lawyers for Fitbit, Inc.
BORDEN LADNER GERVAIS Bay Adelaide Centre, East Tower 22 Adelaide Street West Toronto, ON M5H 4E3 Roger Jaipargas Tel: 416-367-6266 Email: [email protected]
Marty Sclisizzi Tel: 416.367.6027 Email: [email protected]
Lawyers for Sage Software, Inc. and Sage Software Canada Ltd.
AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park, Bank of America Tower New York, NY 10036-6745
Arik Preis Tel: 212.872.7418 Email: [email protected]
Kevin Zuzolo Tel: 212.872.1002 Email: [email protected]
U.S. Counsel to Fitbit, Inc.
DEPARTMENT OF JUSTICE CANADA 3400-130 King Street West Toronto, ON M5X 1K6
Rakhee Bhandari Tel: 416-952-8563 Email : [email protected]
CRA DOJ Liaison
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MINISTRY OF FINANCE (ONTARIO) Legal Services Branch 777 Bay Street, 11th Floor Toronto, ON M5G 2C8
Kevin O’Hara Tel: 416-327-8463 Email: [email protected]
ORLANDO CORPORATION 6205 Airport Road, Mississauga, Ontario L4V 1E3 David Stewart Tel: 905.677.5480 Email: [email protected] Leonard Lee Tel: 905.677.5480 Email: [email protected]
9
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10
Court File No. CV17-582329-00CL
ONTARIO SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST
IN THE MATTER OF THE COMPANIES' CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED
AND IN THE MATTER OF WYNIT DISTRIBUTION, LLC, WD NAVARRE DISTRIBUTION, LLC, WD ENCORE SOFTWARE, LLC, WD NAVARRE HOLDINGS, LLC, WD HOLDINGS, LLC, WD NAVARRE DIGITAL SERVICES, LLC, WYNIT HOLDINGS, INC. AND WD NAVARRE CANADA, ULC. (the “Debtors”)
APPLICATION OF WYNIT DISTRIBUTION, LLC UNDER SECTION 46 OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT
AFFIDAVIT OF GREGORY CHARLESTON
(Encore)
(sworn November 3, 2017)
I, Gregory Charleston, of the city of Alpharetta in the State of Georgia MAKE OATH AND
SAY AS FOLLOWS:
1. I am a Senior Managing Director of Conway MacKenzie, Inc. (“Conway”). Conway is the
financial advisor to WYNIT Distribution, LLC (“WYNIT”), WD Navarre Distribution, LLC, WD
Encore Software, LLC (“Encore”), WD Navarre Holdings, LLC, WD Navarre Digital Services, LLC,
WYNIT Holdings, Inc. and WD Navarre Canada, ULC (collectively, the “Debtors”) in their proceedings
pursuant to title 11, chapter 11 of the United States Code (the “Chapter 11 Proceedings”). As such, I
have personal knowledge of the matters to which I hereinafter dispose in this Affidavit. Where I do not
have personal knowledge of the matters set out herein, I have stated the source of my information and,
in all such cases, believe it to be true.
11
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2. This Affidavit is sworn in support of a motion by WYNIT for an order recognizing the following
Orders which the U.S. Court has granted or has been asked to grant in respect of the sale of the Encore
Assets (defined below):
(a) Order Granting an Expedited Hearing, Approving Bid Protections and Procedures for the
Solicitation of Offers for sale of the Debtors’ Assets Free and Clear of Liens, Claims,
Encumbrances, and Interests, and Granting Related Relief (the “Encore Bid Procedures
Order”);
(b) Order (A) Approving the Asset Purchase Agreement between the Debtors and the
Purchaser; (B) Authorizing the Sale of Substantially all of the Debtors’ Assets Free and
Clear of all Liens, Claims, Encumbrances, and Interests; (C) Authorizing the Distribution
of Excess Sale Proceeds to Secured Creditors; and (D) Granting Related Relief (the
“Encore Sale Order”); and
(c) Order Authorizing the Assumption and Assignment, or Rejection, of Certain Executory
Contracts and Unexpired Leases under 11 U.S.C. §365 and Granting Related Relief (the
“Encore Assignment and Assumption Order”).
3. Capitalized terms used herein and not otherwise defined have the meaning given to them in the
affidavit of Peter Richichi sworn September 18, 2017.
THE ENCORE SOFTWARE BUSINESS
4. The business of Encore consists of operations relating to the legacy Navarre software (the
“Encore Software Business”) and product distribution entity acquired by WYNIT in 2014. The Encore
assets consist of, among other things: (a) inventory of the Encore Software Business; (b) all of the
Debtors’ executory contracts and unexpired leases relating to the Encore Software Business; (c) all of
the Debtors’ intellectual property used by the Debtors in connection with the Encore Software Business;
(d) all of the Debtors’ customer data used or intended to be used in connection with the Encore Software
Business; (e) all of the Debtors’ personal property used or intended to be used in connection with the
12
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Encore Software Business; (f) all of the Debtors’ deposits and prepaid charges and expenses related to
the Encore Assets and any executory contracts assumed by the Purchaser (defined below); (g) to the
extent assignment, all of the Debtors’ government authorizations and all pending applications therefor
or renewals thereof with respect to the Encore Software Business; and (h) all other rights, privileges and
interest of the Debtors associated with the Encore Software Business (collectively, the “Encore Assets”).
5. Based on the Debtors’ books and records, the book value of inventory related to the Encore
Software Business located at the warehouse in Mississauga is approximately US$73,000. Additionally,
a number of the contracts which may be potentially assigned under the transaction are with counterparties
that have a Canadian address.
6. As was set out in the Richichi Affidavit, the Debtors’ intent has always been to sell the Encore
Software Business separately from the liquidation of the majority of their other inventory and accounts
receivable.
The Encore Sale Process to Date
7. Conway was first engaged by the Debtors at the end of August 2017 and has been assisting the
Debtors in its proceedings including in connection with finding a buyer for the Encore Software
Business. To date, (a) Conway has contacted approximately 12 potential strategic buyers and/or
competitors in the industry; (b) Conway was contacted by a number of unsolicited prospective
purchasers; (c) approximately nine parties initially expressed interest; (d) five non-disclosure agreements
were executed and those parties conducted further due diligence; and (e) three parties submitted letters
of intent.
The Stalking Horse Agreement and Bid Procedures Motion
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8. After consultation with the DIP Agent, Avanquest North America LLC (the “Stalking Horse
Purchaser”) was chosen as the stalking horse purchaser. The Debtors have now negotiated an asset
purchase agreement (the “Stalking Horse Agreement”) for the sale of the Encore Assets. The Stalking
Horse Agreement is or will be attached to an affidavit of Mario Forte, to be filed in connection with this
Motion.
9. Pursuant to the Stalking Horse Agreement:
(a) the Stalking Horse Purchaser has agreed to purchase the Encore Assets for a cash purchase
price of US$1,025,000;
(b) A significant component of the Stalking Horse Agreement is the assignment and
assumption of certain executory contracts (the “Encore Contracts”) given that the
inventory consists largely of different types of software for home and office use;
(c) An amount of US$300,000 will be reserved on closing for the payment of “cure costs”
associated with the Encore Contracts;
(d) The Debtors have agreed to provide certain transition services pursuant to a transition
services agreement (the “Transition Services Agreement”) to assist with the transition
and to allow the Stalking Horse Purchaser (or successful buyer) to determine which
contracts should be assigned as part of the transaction; and
(e) The Stalking Horse Purchaser is entitled to a US$30,000 break up free (the “Break Up
Fee”) in the event it is not the successful buyer after auction (and subject to the terms of
the Stalking Horse Agreement).
10. On October 26, 2017, the Debtors filed a motion (the “Encore Bid Procedures Motion”) seeking
approval of the Encore Bid Procedures Order. On October 31, 2017, the U.S. Court granted the Encore
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Bid Procedures Order. At the hearing, there were no objections to the Encore Bid Procedures Order.
Copies of the Encore Bid Procedures Motion and the Encore Bid Procedures Order is or will be attached
to an affidavit of Mario Forte, to be filed in connection with this motion.
11. Under the terms of the Bid Procedures Order, Conway is appointed as the Debtors’ sales agent
to undertake a highly expedited solicitation process to solicit additional bids for the Encore Assets. Key
dates are as follows:
(a) The bid deadline is November 7, 2017;
(b) Any auction will take place on November 8, 2017 – the initial minimum overbid
requirement will be US$55,000 with bid increments of $25,000 thereafter; and
(c) The Sale Hearing will take place on November 9, 2017.
12. Based on our discussion with other interested parties, I believe there are two or three other parties
who may participate in an auction. The Break Up Fee is approximately 3% of the total purchase price
and reasonable in the circumstances and was approved by the U.S. Court as part of the Encore Bid
Procedures Order. There is no expense reimbursement mechanism contemplated in the Stalking Horse
Agreement.
The Encore Sale Motion and Assignment and Assumption Motion
13. The Debtors have also filed a motion seeking approval of the Encore Sale Order (the “Encore
Sale Motion”) and a motion seeking approval of the Encore Assignment and Assumption Order (the
“Encore Assignment Motion”). Copies of the Encore Sale Motion and Encore Assignment Motion will
be attached to an affidavit of Mario Forte, to be filed in connection with this Motion.
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14. Pursuant to the Encore Sale Motion, the Debtors are requesting approval of the sale of the Encore
Assets free and clear of all liens and encumbrances to the Stalking Horse Purchaser or other successful
purchaser at auction (the “Purchaser”) as well as approval of the Transition Services Agreement.
15. The Encore Assignment Motion provides for the assignment of contracts pursuant to section 365
of the United States Code over a 90 day period during which the Purchaser will determine which
contracts are to be assigned. The Encore Assignment lists a number of contracts to be potentially
assigned on Exhibit A-1 (which includes the proposed “cure” amount) and Exhibit A-2 (contracts for
which no cure amount proposed).
16. The proposed procedures for assignment area as follows:
(a) During the 90 day period after the closing date, the Purchaser may designate any Encore
Contract for assumption and assignment;
(b) Where the Purchaser has designated an Encore Contract to be assigned, the Debtors will
file and serve on the applicable counterparty a notice of assignment (an “Assignment
Notice”);
(c) The Assignment Notice will contain (i) the proposed assumption and assignment of the
Encore Contract; (ii) the effective date of the proposed assumption and assignment; (iii)
the proposed cure amount to be paid to the counterparty as of the effective date of the
assumption and assignment; and (iv) the applicable Assignment Objection Deadline
(defined below);
(d) Any party seeking to object to the assumption and assignment of its Encore Contract must
(i) file a written objection in compliance with the applicable bankruptcy rules (an
“Assignment Objection”) with the U.S. Court within five business days after the date on
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which the Assignment Notice is filed with the U.S. Court (the “Assignment Objection
Deadline”); (ii) serve the Assignment Objection (by email, fax or hand delivery) so that it
is actually received by U.S. counsel for the Debtors and the Purchaser on or before the
Assignment Objection Deadline; provided however that the (x) the amounts on Exhibit A-
1 to the Encore Assignment Motion shall be binding on all parties; (y) no counterparties
shall be entitled to any additional adequate assurance of future performance; and (z) all
Encore Contracts shall be deemed assignable under applicable law;
(e) Given the potential delay between the anticipated closing date and the date of assignment,
to the extent the Purchaser elects to be assigned an Encore Contract, if further amounts are
to be paid in the period between the closing date and the assignment date, notice will be
provided of such additional cure amounts (the “Incremental Cure Amount”) and the
counterparty may be entitled to object to the calculation of the Incremental Cure Amount
only;
(f) If a proper Assignment Objection is timely filed and not withdrawn, the Debtors, the
Purchaser and the objecting counterparty shall have authority to settle or resolve any
dispute without further order of the U.S. Court. Where the parties are unable to resolve
such dispute, the objection will be determined by the U.S. Court on a day to be schedule;
and
17. In order to complete the transaction with the Purchaser the Debtors need to be able to transfer the
Encore Assets including the inventory and contracts in Canada free and clear to the Purchaser.
18. The Encore Software Business has a significant seasonal element to it and, accordingly, I believe
that the value of the Encore Software Business and Encore Assets is higher before the holidays than after
it. As such, it is important that the sale process and auction process for the Encore Software Business
17
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2
CORE/3504319.0002/135595137.6
4. The Debtors submit this motion (the "Encore Bid Procedures Motion") for an
order (the "Encore Bid Procedures Order"), pursuant to 11 U.S.C. § 363, and Fed. R. Bankr. P.
2002 and 6004 to approve a bid process and procedures for sale of certain assets primarily
involving WD Encore Software, LLC ("Encore") free and clear of all liens, interests, claims and
encumbrances, and related procedures as follows. Simultaneously, the Debtors have filed:
A. a separate motion (the "Encore Sale Motion") for an order (the "Encore Sale
Order"), pursuant to 11 U.S.C. § 363, and Fed. R. Bankr. P. 2002 and 6004 to approve a
sale of certain Encore assets free and clear of all liens, interests, claims and
encumbrances; and,
B. a separate motion (the "Encore Executory Contracts Motion") for an order (the
"Encore Executory Contracts Order"), pursuant to 11 U.S.C. § 365, and Fed. R. Bankr.
P. 2002 and 6006 to approve procedures for assumption or rejection of certain executory
contracts and unexpired leases affiliated with this Encore Sale Motion.
I. BACKGROUND
Procedural Posture
4. On September 8, 2017 (the "Petition Date"), the Debtors filed separate voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of Minnesota (the "Bankruptcy Court"). The bankruptcy cases are
referred to collectively hereafter as, the "Bankruptcy Cases".
5. By orders of this Court entered on September 13, 2017, the Bankruptcy Cases are
jointly administered under the caption set forth above which is designated as the lead case.
6. Each Debtor remains in possession of its assets and continues to operate as a
debtor-in-possession in accordance with 11 U.S.C. §§ 1107 and 1108.
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CORE/3504319.0002/135595137.6
7. As of the date of this Encore Bid Procedures Motion, an Official Committee of
Unsecured Creditors ("Committee") has been appointed.
8. This is a core proceeding pursuant to 28 U.S.C. § 157(2)(A), (M), (N), and (O).
9. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334.
10. Venue is proper in this Court pursuant to 28 U.S.C. § 1408.
11. The assets being sold pursuant to this Encore Bid Procedures Motion include
inventory, furniture fixtures and equipment, and intellectual property further defined as
Purchased Assets in the Asset Purchase Agreement (as defined herein). The assets to be sold
shall be collectively referred to as the “Encore Assets.” 1
12. The Encore Assets to be sold shall not include any Excluded Assets as defined in
the Agreement. In addition, the Encore Assets to be sold shall not include inventory sold to
Debtors on consignment or inventory allegedly sold to the Debtors on consignment, but does
include inventory sold by Debtors on consignment with third parties.
13. Because the Encore business has a significant seasonal element to it, the value of
the business is higher before the holidays that it will be after the holidays. There is also concern
that the Encore brand and business may be damaged as it is associated with the wind down of the
WYNIT distribution business. Furthermore, the Encore business costs approximately $120,000
per week to operate currently and that business can likely be run more efficiently by a buyer
outside of the current business platform and systems. Therefore, it is important to complete the
Encore sale as expeditiously as possible to maximize value for all creditors. As a result, the
Debtors are requesting that the Court consider this Bid Procedures Motion on an expedited basis.
1 To the extent there is conflict between this Motion and the Asset Purchase Agreement, the Asset PurchaseAgreement controls.
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14. The Debtors' history, operations, debt structure and corporate structure are fully
described in the declaration of Peter A. Richichi dated September 8, 2017 and in the declaration
of relatedness also dated September 8, 2017.
Pre-Petition Secured Debt
15. Each of the Debtors, other than WYNIT Holdings, Inc., is a borrower under a
Credit Agreement, dated November 29, 2016 (as amended, restated, supplemented or otherwise
modified from time to time, the "Wells Credit Agreement"), under which Wells Fargo Capital
Finance, as administrative agent for itself and other participating lenders (collectively, the
"Prepetition Lenders"), has authority to act as secured lender. WYNIT Holdings, Inc. signed a
guaranty of the other Debtors' obligations under the Wells Credit Agreement.
16. Each of the Debtors, other than WYNIT Holdings, Inc., also executed a security
agreement dated November 29, 2016 (as amended, restated, supplemented or otherwise modified
from time to time, the "Wells Security Agreement") in favor of the Prepetition Lenders to
secure performance of terms and obligations arising under the Wells Credit Agreement and,
under the Wells Security Agreement, each signing Debtor granted Wells Fargo Capital Finance,
for the benefit of itself and the Prepetition Lenders, a first priority security interest in and
continuing lien on substantially all of each such Debtor’s assets and property, and all proceeds,
products, accessions, rents, and profits thereof, in each case whether then owned or existing or
thereafter acquired or arising, including the Encore Assets to be sold pursuant to this Encore Bid
Procedures Motion.
17. The Wells Credit Agreement provided WYNIT with a revolving, operating line of
credit, subject to borrowing base restrictions, in an aggregate maximum principal amount of
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CORE/3504319.0002/135595137.6
$250,000,000.00 (the "Wells Facility"). As of the Petition Date, the balance of the Wells Facility
was in excess of $77,026,711.83.
18. In addition to the foregoing, on February 12, 2014, WYNIT Distribution, LLC,
entered into an Inventory Financing Agreement with Wells Fargo Commercial Distribution
Finance, LLC ("WFCDF"), that provided financing for the purchase of certain, specified
inventory and, in exchange, WFCDF received, among other things, a first-priority, purchase
money security interest in specific inventory purchased with the proceeds of its loan. As of
August 29, 2017, the outstanding balance on WFCDF's line of credit was in excess of
$10,356,227. After careful analysis, WYNIT Distribution, LLC, in consultation with its third-
party financial advisor, concluded that the value of the inventory subject to WFCDF's purchase
money security interest was nearly identical to the amount owed to WFCDF. As a result,
WYNIT Distribution, LLC, entered into a Voluntary Surrender Agreement with WFCDF, and
surrendered relevant inventory to WFCDF on September 5, 2017 (the “Surrendered
Inventory”). The Debtors will not include the Surrendered Inventory in this sale.
19. Within 90 days prior to the Petition Date, WYNIT also executed a security
agreement on June 12, 2017, that purports to provide FitBit, Inc. with a subordinated lien on
WYNIT's assets. FitBit filed a related UCC financing statement on June 16, 2017. As a result,
any security interest asserted by FitBit may be avoidable, any claim asserted by FitBit may be
subject to an objection pursuant to 11 U.S.C. § 502(d), and all rights with respect to any asserted
claims, security interests or liens of FitBit are reserved under § 506(d).
Material Developments After Filing of the Cases
20. After filing the Bankruptcy Cases, the Debtors have performed their duties under
the Bankruptcy Code attentively and in good faith. Among other things to date:
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CORE/3504319.0002/135595137.6
A. The Debtors filed the Motion for Authority to Obtain a Postpetition
Facility and to use Cash Collateral on September 8, 2017 (hereafter "DIP Financing
Motion"). [ECF No. 6]. Under the DIP Financing Motion, the Debtors sought Court
approval for a senior secured postpetition revolving loan facility of up to $15,000,000
(the “Postpetition Facility”) with certain of their prepetition first-lien lenders as defined
in the DIP Financing Motion (hereafter referred to as the "Postpetition Lenders"). The
Court has entered two interim Orders granting the DIP Financing Motion and the
Postpetition Facility pursuant to which up to $8 million of interim financing is being
provided by the Postpetition Lenders to the Debtors, with such financing collateralized by
a first priority priming lien on substantially all assets of the Debtors. A final hearing to
approve the $15 million of post-petition financing is set for October 26, 0217.
The Debtors’ Pre-Bankruptcy Marketing and Sales Efforts
21. After the last minute failure of a critical funding need, and after careful
consideration of available options and consultation with counsel, WYNIT determined it could no
longer operate on August 24, 2017. WYNIT stopped issuing purchase orders and stopped
accepting supplier deliveries of goods to its warehouses. In addition, to preserve as much value
as possible for its creditors, WYNIT undertook the difficult step of terminating more than 200
employees. By the end of that week, the shut-down of WYNIT was known publicly and
customers and suppliers began to scramble to find an alternate supplier/distributor for product.
22. Unfortunately, the opportunity to market WYNIT as a going concern business
evaporated immediately. Conway MacKenzie began work as WYNIT’s financial advisor in
Greenville, South Carolina, on Monday, August 28. Conway MacKenzie, working with
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CORE/3504319.0002/135595137.6
executive management, began to explore alternative methodologies to best monetize the assets of
the business.
23. As it relates to the Encore Business, Conway MacKenzie, on behalf of the
Debtors, proactively contacted about a dozen parties that would be strategic buyers and
responded to several additional unsolicited inquiries. About nine parties initially expressed
interest. Five non-disclosure agreements were executed and those parties did due diligence.
Three parties submitted letters of intent.
24. Based on all the facts and circumstances at the time, the Debtors negotiated an
Asset Purchase Agreement ("APA") for the Encore Assets with Avanquest North America LLC,
a California limited liability company ("Buyer"). However, some other parties have also
expressed an interest in possibly submitting competing bids, hence the Debtors believe this Bid
Procedures Motion is appropriate.
The Agreement and Sale Process
25. A copy of the APA is attached to the related Encore Sale Motion as Exhibit A.
The Debtors propose to effectuate a sale of the Encore Assets to Buyer2 or the highest or best
bidder, or bidders, after completion of the Auction pursuant to the APA. The sale to the Buyer,
or other highest or best bidder, will provide for, among other things, the sale of the Encore
Assets, or portions thereof, free and clear of any and all liens, claims, encumbrances, and other
interests.
2 Buyer shall be deemed a Qualified Bidder for the Auction, and the APA shall be deemed a Qualified Bid for theAuction.
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26. The Debtors propose to effectuate the sale(s) via the process and procedures
outlined in the Bid Procedures (as defined below)3 in order to determine the highest or best
bidder or bidders to enter into the sale transaction(s).
27. The Debtors propose the following timeline for execution of the Bid Procedures
and the sale transaction(s):
Event Date
Notice + NDAs + Data Room + Directcontact with buyers
Commenced Prepetition
Sale Procedures/Stalking-Horse Bid and BidProtections Approved
By October 31, 2017
Competing Bid Deadline By November 7, 2017 at noon Central
Final Auction, if necessary, and AnnounceResults
November 8, 2017 at 9 a.m. Central
Sale Motion Approved By November 9, 2017
Closing re Asset Sale(s) (outside date) By November 10, 2017
II. THE "STALKING HORSE" PROPOSAL TO PURCHASE ASSETS
28. The Debtors (through Conway MacKenzie) have received an offer to purchase the
Encore Assets from the Buyer free and clear of all liens, claims and interest in accordance with
section 363(f) of the Bankruptcy Code. The Buyer offers to purchase certain inventory,
executory contracts, intellectual property, customer data, personal property, deposits and prepaid
charges, and governmental authorizations and pending applications related to the Encore
Software Business (as defined in the APA). Excluded assets include cash, cash equivalents and
bank accounts, accounts receivables, intercompany claims, organizational records, insurance
policies, benefit plans, refunds, litigation claims, avoidance actions, consignment inventory
3 Any conflict between this sale motion and the Bid Procedures shall be governed by the Bid Procedures.
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CORE/3504319.0002/135595137.6
(where Encore is the consignee, but not where Encore is the consignor), D&O claims and any
other assets not specifically included within the Purchased Assets in the APA
29. A major component of the APA is the assumption and assignment of certain
executory contracts. This is because the inventory largely consists of hundreds of different types
of software for home and office use. This software includes such well-known items as Print
Shop, and Print Master. Given the nature of the inventory, each item requires multiple licenses
and other agreements with third parties. Any buyer, including Buyer, will need time to determine
whether a particular contract is executory and should be assumed and assigned (with or without
modifications proposed and agreed to by the non-debtor counterparty), or rejected.
30. In order to facilitate an immediate closing, but also allow 90 days to determine
whether to assume and assign certain executory contracts, Section 7.10 of the APA provides for
a transition period during which Buyer will utilize certain employees, space, equipment, records,
and related assets of Debtors pursuant to a Transition Agreement attached to the Encore Sale
Motion as Exhibit B.
31. The Sale Motion, in conjunction with the Encore Executory Contracts Motion,
provides a mechanism for the Buyer to provide notice of assumption and assignment of desired
executory contracts for 90 days from the Closing date.
32. Pursuant to the APA, the Buyer will provide gross cash proceeds for the sale of
the Encore Assets of $1,025,000 (the "Cash Amount"). An amount equal to $300,000 of the
Purchase Price shall be reserved for payment and satisfaction of Cure Costs as such Cure Costs
are established in the Cure Order or such other Orders of the Bankruptcy Court. In the event that
the total Cure Costs exceed $300,000, Buyer assumes such amounts in excess of $300,000 as an
Assumed Liability and shall pay such excess Cure Costs (“Excess Cure Costs”).
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33. The offer includes a "good faith" deposit of $50,000.00, consistent with the Bid
Procedures for any other Qualified Bids. There is no financing contingency for the Buyer to
close the purchase provided all other terms are satisfied.
34. The APA includes in Section 10.2 a "Breakup Fee" of $30,000.00,4 and an
"Overbid Requirement," requiring the first (if any) overbid at the Auction to exceed the Buyer's
offer by at least $55,000 (the Breakup Fee plus $25,000.00) and that bid increments shall
thereafter be at least $25,000 higher than the prior existing qualified bid (together the Breakup
Fee and the Overbid Requirement are the "Bid Protections"). The Breakup Fee is proposed to be
deemed to be an allowed administrative expense claim of the estate under 11 U.S.C. 503(b) and
shall be paid solely from the proceeds of a sale of all or some of the Encore Assets from a buyer
other than Buyer. The Bid Protections are reasonable and customary in an offer of this size and
complexity given that the Buyer has and will continue to accrue fees and costs in due diligence
to support its offer.
III. RELIEF REQUESTED
Introduction
35. The Debtors request that Encore Bid Procedures Motion be heard on an expedited
basis. If expedited relief is not granted, the maximum value of the Debtors' estates cannot be
realized and will result in diminished return to the Debtors' creditors. It is necessary for the
Debtors to obtain prompt approval of the Encore Bid Procedures in order to give potential
bidders adequate time under the circumstances to consider participating in the proposed auction.
4 For the avoidance of doubt, Buyer shall be entitled to the Breakup Fee if Buyer is not deemed the SuccessfulBidder and such breakup fee shall be paid solely from the sale proceeds of a winning bid.
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CORE/3504319.0002/135595137.6
36. Pursuant to Bankruptcy Code §§ 105, 363, and Rules 2002, 6004, of the Federal
Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), the Debtors request that the Court,
inter alia,
a) approve the bid procedures ("Bid Procedures") attached as Exhibit A to thismotion and the proposed Order ("Bid Procedures Order") attached as Exhibit Bto this motion;
b) establish procedures for objections to this Encore Bid Procedures Motion;
c) set a hearing on this Encore Bid Procedures Motion; and
d) grant any necessary or appropriate related relief.
Summary of Key Provisions of the Bid Procedures
37. Debtors note the following important aspects of the Encore Bid Procedures:
(a) Sale to Insider. None of the Encore Assets are contemplated to besold to an "insider" within the meaning of 11 U.S.C. §101(31).
(b) "Sale Agent" The Debtors are proposing that Conway MacKenzieact independently as the Sale Agent.
(c) Competitive Bidding. The Debtors do not anticipate any privatesale or elimination of competitive bidding, although Debtors also cannotguarantee other bidders will participate in the sale process.
(d) Bid Protections. The offer from Buyer requests a Breakup Fee of$30,000 and an Overbid Requirement requiring the first (if any) overbid atthe Auction to exceed the Buyer's offer by at least $55,000 (the BreakupFee plus $25,000.00) and that bid increments shall thereafter be at least$25,000 higher than the prior existing qualified bid.
(e) Deadlines that Effectively Limit Notice. At this time, Debtorsanticipate that the deadlines will be shortened by the Court in order tomaximize the potential value of the Encore Assets such that they are soldprior to the holiday season. These limited notice circumstances areunavoidable under the circumstances, and mitigated by the general noticebeing provided to all parties in interest.
(f) Interim Arrangements with Proposed Buyer. At this time, Debtorsdo not anticipate any interim arrangements with any proposed buyer, otherthan the post-closing Transition Agreement described above.
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CORE/3504319.0002/135595137.6
The Sale Process5
38. Pursuant to Bankruptcy Rule 6004(f)(1), sales of property outside the ordinary
course of business may be by private sale or auction.
39. Good cause exists to expose the assets to auction. Debtors and Conway
MacKenzie believe that an auction conducted substantially in accordance with the Encore Bid
Procedures Motion will enable the Debtors to obtain the highest or best offer(s) for the Encore
Assets under the circumstances, thereby maximizing the value of the Debtors’ estates.
40. Pursuant to the Bid Procedures, a "Potential Bidder" must deliver the following
to Conway MacKenzie, as the Sale Agent, prior to submitting any Bid:
a. An executed Confidentiality Agreement acceptable to the Sale Agent; and
b. Financial statements of, or other information relating to, the PotentialBidder or, if the Potential Bidder is an entity formed for the purpose of thesale transaction, financial statements of or other information relating to theequity holder(s) of the Potential Bidder, or such other form of financialdisclosure or evidence of financial capability and performance and legalauthority acceptable to the Sale Agent as requested by the Sale Agent(and, if requested by the Sale Agent, certified to by a duly authorizedrepresentative of the Potential Bidder (or equity holders thereof, asapplicable)), demonstrating such Potential Bidder’s financial capabilityand legal authority to close the proposed Transaction in a timely manner.
41. A Potential Bidder that delivers the documents described in subparagraphs (a) and
(b) above, and that the Sale Agent determines in its business judgment is financially capable of
consummating the Transaction in a timely manner, after consultation with the Prepetition Agent,
Postpetition Agent, and the Committee (the "Consultation Parties") will be permitted to further
participate in the Bidding Process.
42. A Potential Bidder who desires to make a "Bid" must deliver a written copy of its
Bid on or before the Bid Deadline to the Sale Agent. The Sale Agent may extend the Bid
5 Nothing in this Encore Bid Procedures Motion or Encore Sale Motion shall be construed to modify the APA withBuyer.
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Deadline, after consultation with the Consultation Parties, but will promptly notify all Potential
Bidders of any such extension. If the Sale Agent extends the Bid Deadline, or any other deadline
set forth in the APA, it shall not act as a waiver of the Buyer's rights under the APA to terminate
the APA.
43. A Bid received from a Potential Bidder by the Bid Deadline will constitute a
"Qualified Bid" only if it meets all of the requirements specified in the Bid Procedures, all
solely as determined by the Sale Agent, after consultation with the Consultation Parties,
including but not limited to:
(a) The Bid must provide for consideration under the Purchase Agreement forEncore Assets proposed to be purchased.
(b) The Bid must be in cash unless otherwise consented to by the Sale Agent,after consultation with the Consultation Parties.
(c) The Bid must be accompanied by satisfactory evidence of committedfinancing or other financial ability to consummate the sale transaction in atimely manner.
(d) The Bid (other than the Stalking Horse Bid by the Buyer) cannot beconditioned upon the Bankruptcy Court’s approval of any bid protections,such as a break-up fee, termination fee, expense reimbursement, workingfee or similar type of payment.
(e) The Bid must expressly acknowledge and represent that the PotentialBidder: (i) has had an opportunity to conduct any and all due diligenceregarding the assets and businesses of the Debtors and the Transactionprior to making its Bid, (ii) has relied solely upon its own independentreview, investigation and/or inspection of any documents and the assetsand businesses of the Debtors in making its Bid, and (iii) did not rely uponany written or oral statements, representations, promises, warranties orguaranties whatsoever, whether express, implied, by operation of law orotherwise, regarding the business or assets of the Debtors or the saletransaction, or the completeness of any information provided inconnection therewith, except as expressly stated in the representations andwarranties contained in the Purchase Agreement ultimately accepted andexecuted by the Debtors, and (iv) has authority to make the Bid, executeany documents to close on the Transaction, and proceed to closing on thesale transaction.
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CORE/3504319.0002/135595137.6
(f) The Bid must be received by the Bid Deadline.
(g) The Bid must include a good faith deposit (the "Good Faith Deposit") inthe form of a wire transfer to the Debtors or a certified or bank checkpayable to the order of the Debtors (or other form acceptable to theDebtors with approval by Lender) in the amount of 5% of the purchaseprice guaranteed amount for the Encore Assets proposed to be purchased.
(h) The Bid must comply with the Overbid Requirement set forth herein.
44. If more than one Qualified Bid is submitted for the Encore Assets in accordance
with the Bid Procedures, the Sale Agent will conduct an auction (the "Auction") on November
8, 2017, at 9:00 a.m. prevailing Central time, or at such later time as determined by the Sale
Agent, who will notify all Qualified Bidders who have submitted Qualified Bids (collectively,
the "Auction Participants") no later than November 7, 2017 by 2:00 p.m. (prevailing Central
Time). The Auction will be held at the offices of Debtors’ counsel.
45. Prior to the Auction, the Sale Agent (in consultation with the Consultation Parties
and Debtors) will evaluate the Qualified Bids and select the Qualified Bid or combination of
Qualified Bids that the Sale Agent determines in its business judgment to be the highest or best
Qualified Bid(s) (the "Initial Highest Bid") for the Encore Business. In making this
determination, the Sale Agent may consider, among other things, the amount of cash to be paid
or delivered, the net economic benefit to the Debtors' estates, the conditions to closing, the
Encore Assets being purchased, and related matters.
46. The Sale Agent will give each of the Auction Participants notice of the Initial
Highest Bid and a copy of such Bid prior to the scheduled start of the Auction.
47. At the commencement of the Auction, the Sale Agent will formally announce the
Initial Highest Bid(s) and the assets to which they relate. All Qualified Bids at the Auction will
be based on and increased therefrom, and thereafter made in minimum increments higher than
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CORE/3504319.0002/135595137.6
the previous Qualified Bid in the amount of $25,000 or such other amount to be established by
the Sale Agent, after consultation with the Consultation Parties.6
48. The Sale Agent will have the right to adopt such other rules for the Auction which
it believes in its business judgment will promote the goals of the Auction to obtain the highest
and best price for the Encore Assets, after consultation with the Postpetition Agent. However, the
Sale Agent may not modify the APA without Buyer's consent.
49. The Sale Agent, in consultation with the Consultation Parties and Debtors, may
(a) determine which Qualified Bid, if any, is the highest or otherwise best offer(s); and (b) reject
at any time before entry of an Order of the Bankruptcy Court approving the Successful Bid(s),
any bid that, in the discretion of the Sale Agent, after consultation with the Consultation Parties,
is (i) inadequate or insufficient, (ii) not in conformity with the requirements of the Bankruptcy
Code or the Bid Procedures, or (iii) contrary to the best interests of the Debtors’ estates and their
creditors.
50. The Bid Procedures provide an appropriate framework for obtaining offers for the
purchase of the Encore Assets and will enable the Sale Agent to review, analyze and compare all
Bids received to determine which Bid (or Bids) is in the best interests of the Debtors’ estates and
their creditors. Therefore, the Debtors respectfully request that this Court approve the Bid
Procedures and authorize the Debtors and Sale Agent to take any and all actions necessary or
appropriate to implement the Bid Procedures.
Credit Bid(s)
51. Section 363(k) of the Bankruptcy Code states:
At a sale under subsection (b) of this section of property that is subject toa lien that secures an allowed claim, unless the court for cause orders
6 Minimum bid increments, other than a credit bid of a Lender, must consist solely of cash consideration unlessotherwise authorized by the Sale Agent.
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otherwise the holder of such claim may bid at such sale, and, if theholder of such claim purchases such property, such holder may offsetsuch claim against the purchase price of the property.
Each of the Postpetition Agent and the Prepetition Agent, on behalf of the Postpetition Lenders
and the Prepetition Lenders, respectively, are deemed Qualified Bidders and have the right to
credit bid should they elect to do so. Either or both of the Postpetition Agent and the Prepetition
Agent may credit bid at the Auction, in their discretion, and they otherwise are not required to
comply with the Bid Procedures. However, by this Sale Motion, Debtors are asking that the
Bankruptcy Court deny credit bid rights to any other secured or allegedly secured party.
III. NO PRIOR REQUEST
52. No prior request for the relief sought herein has been requested from this Court or
any other court.
53. Pursuant to Local Rule 9013-2, this motion is verified and is accompanied by a
memorandum of law and proposed order.
54. Pursuant to Local Rule 9013-2, the Debtors give notice that they may, if
necessary, call Pete Richichi, 9700 W. 76th Street, Ste. 116, Eden Prairie, MN or Gregory A.
Charleston, of Conway Mackenzie, Inc., 1075 Peachtree Street, Ste. 3675, Atlanta Georgia
30309, to testify at the hearing on the Motion regarding the facts set forth herein.
WHEREFORE, the Debtors respectfully request the Court enter an Order granting the
requested relief, and granting such other and further relief as is necessary and appropriate in the
circumstances.
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Dated: October 26, 2017 e/Robert T. Kugler
Robert T. Kugler (#0194116)Edwin H. Caldie (#0388930)Phillip J. Ashfield (#0388990)Andrew J. Glasnovich (#0398366)STINSON LEONARD STREET LLP50 South Sixth StreetMinneapolis, MN 55402Telephone: 612.335.1500Facsimile: 612.335.1657
COUNSEL FOR THE DEBTORS
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UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MINNESOTA
In re:
WYNIT DISTRIBUTION, LLC,WD Navarre Distribution, LLC,WD Encore Software, LLC,WD Navarre Holdings, LLC,WD Navarre Digital Services, LLC,WYNIT Holdings, Inc.,WD Navarre Canada, ULC,
Debtors.
JOINTLY ADMINISTERED UNDERBKY 17-42726
BKY 17-42726BKY 17-42728BKY 17-42729BKY 17-32864BKY 17-32865BKY 17-32866BKY 17-32867
MEMORANDUM OF LAW IN SUPPORT OF DEBTORS’ MOTION FOR AN ORDER (I)GRANTING AN EXPEDITED HEARING AND (II) APPROVING BID PROCEDURES AND
PROTECTIONS FOR THE SALE OF ASSETS FREE AND CLEAR OF ALL LIENS,INTERESTS, CLAIMS AND ENCUMBRANCES PURSUANT TO 11 U.S.C. § 363, AND (III)
GRANTING OTHER RELATED RELIEF (WD ENCORE SOFTWARE)
The above-captioned debtors (collectively the "Debtors") submit this memorandum of
law in support of their corresponding motion, in accordance with Local Rule 9013-2(a).
I. BACKGROUND
The facts supporting this memorandum are set forth in the Sale Motion, verified by Pete
Richichi. All capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Sale Motion.
II. EXPEDITED RELIEF
The Debtors request expedited relief on the Sale Motion. Bankruptcy Rule 9006(c)
provides that the Court may reduce the notice period for a motion for cause. Here, cause exists to
grant the Sale Motion on an expedited basis. As described in more detail in the Sale Motion and
in the Declaration of Peter A. Richichi in Support of Chapter 11 Petitions and First Day Motions,
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due to the seasonal nature of Debtors' inventory, the value of the Debtors' estates is fleeting and
time only diminishes the ultimate return to creditors. Approval of bid procedures on an expedited
basis will allow an auction to maximize value to the Debtors' estates and their creditors by
facilitating the most competitive bids for Debtors' assets.
III. SALE UNDER 363 GENERALLY
Section 363(b)(1) of the Bankruptcy Code provides: "The Trustee, after notice and a
hearing, may use, sell, or lease, other than in the ordinary course of business, property of the
estate." 11 U.S.C. § 363(b). Section 105(a) of the Bankruptcy Code provides in relevant part:
"The Court may issue any order, process, or judgment that is necessary or appropriate to carry
out the provisions of this title." 11 U.S.C. § 105(a).
A sale of assets of a debtor should be authorized pursuant to Section 363 of the
Bankruptcy Code if a sound business purpose exists for doing so. See, e.g., Fulton State Bank v.
Schipper (In re Schipper), 933 F. 2d 513, 515 (7th Cir. 1991); Committee of Equity Sec. Holders
v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070 (2d Cir. 1993). The business judgment
rule shields a debtor’s management from judicial second-guessing. In re Farmland Indus., Inc.,
294 B.R. 903, 913 (Bankr. W.D. Mo. 2003) ("'[T]he Code favors the continued operation of a
business by a debtor and a presumption of reasonableness attaches to a Debtor’s management
decisions.'") (quoting In re Johns-Manville Corp., 60 B.R. 612, 615-16 (Bankr. S.D.N.Y. 1986)).
Once the Debtors articulate a valid business justification, "[t]he business judgment rule ‘is a
presumption that in making a business decision the directors of a corporation acted on an
informed basis, in good faith and in the honest belief that the action was in the best interests of
the company.’" In re Integrated Res., Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992) (quoting Smith v.
Van Gorkom, 488 A.2d 858, 872 (Del. 1985)).
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As explained above, the Debtors, in conjunction with their financial advisors, have
determined that a sale of the Encore Assets to the Successful Bidder(s) is the best way to
maximize the value of the Encore Assets in these Bankruptcy Cases. Maximization of asset value
is a sound business purpose, warranting authorization of the sale.
IV. The Bid Protections Have a Sound Business Purpose and Should be Approved
The Debtors also seek authority to offer customary bid protections to the Buyer, the
"Stalking Horse" bidder. In order for a bid to be a qualifying overbid, the bid must exceed the
Buyer's bid by $55,000 (a $30,000 "Breakup Fee", plus an Overbid Requirement of $25,000);
and any bid seeking to compete thereafter must exceed the prior bid by at least $25,000
(collectively, the "Bid Protections"). The use of a stalking horse in a public auction process for
sales pursuant to section 363 is a customary practice in chapter 11 cases, as the use of a stalking
horse bid is, in many circumstances, the best way to maximize value in an auction process by
"establish[ing] a framework for competitive bidding and facilitat[ing] a realization of that value."
Official Comm. of Unsecured Creditors v. Interforum Holding LLC, 2011 WL 2671254, No. 11-
CV-219, *1 n.1 (E.D. Wis. July 7, 2011). As a result, stalking horse bidders normally require
bidding protections, including a breakup fee, as an inducement for "setting the floor at auction,
exposing its bid to competing bidders, and providing other bidders with access to the due
diligence necessary to enter into an asset purchase agreement." Id. The use of bidding protections
has become an established practice in chapter 11 cases.
As one Court has stated, "It is a well-established principle of bankruptcy law that the
objective of bankruptcy rules and the [debtors'] duty with respect to such sales is to obtain the
highest price or greatest overall benefit possible for the estate." In re Atlanta Packaging
Products, Inc., 99 B.R. 124, 131 (Bankr. N.D. Ga. 1988). Additionally, courts have long
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recognized the need for competitive bidding at hearings on private sales; "[c]ompetitive bidding
yields higher offers and thus benefits the estate. Therefore, the objective is 'to maximize bidding,
not restrict it." Id.
A corollary to these principles is that the Court should not "cherry-pick" among
contractual provisions, objecting to select individual portions, if the agreement as a whole is
supported by an articulated business judgment. At least one bankruptcy court has expressly
applied this corollary to a transaction including breakup and overbid provisions in the sale of the
debtor's business. In In re Crowthers McCall Patterm, Inc., 114 B.R. 877 (Bankr. S.D.N.Y.
1990), the Court approved a transaction including provisions relating to a breakup fee and
minimum overbids. In responding to objections to other provisions of the agreement, the Court
held:
The Court is not to second guess the inclusion of some provisions as long as the
Agreement as a whole is within reasonable business judgment, and the subject provisions do not
distort the balance Congress struck in Chapter 11. Cf. In re Ames Dep't Stores, Inc., Eastern
Retailers Service Corp., et al., 115 B.R. 34, 37-38 (Bankr. S.D.N.Y. 1990) (some contractual
provisions may be justified by the need to attract a prospective investor.).
114 B.R. at 866.
In regards to break-up fees, in general, "[a] 'break-up fee' is an incentive payment to an
unsuccessful bidder who placed the estate property in a configuration mode ... to attract other
bidders to the auction." In re Financial News Network, Inc., 126 B.R.152, 154 n. 5 (Bankr.
S.D.N.Y 1991); see also In re Integrated Resources, Inc., 147 B.R. 650, 653 (S.D.N.Y. 1992),
app. dismissed on jurisdictional grounds, 3 F.3d 49 (2nd Cir. 1993)("[a] break-up fee, or more
appropriately, a termination fee, is an incentive payment to a prospective purchaser with which a
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company fails to consummate a transaction"). Agreements to provide breakup fees are designed
to compensate the potential acquirer who serves as a catalyst or "stalking horse" which attracts
more favorable offers. In re S.N.A. Nut Co., 186 b.R. 98, 101 (Bankr.N.D. Ill. 1995) In re 995
Fifth Ave. Assoc., L.P., 96 B.R. 24, 28 (Bankr. S.D.N.Y. 1989).
Outside of bankruptcy, a break-up fee is generally allowed as long as it “enhances” the
bidding. In re S.N.A. Nut Co., 186 B.R. at 102. In the bankruptcy context, a break-up fee is
generally permissible “if reasonably related to the bidder’s efforts and the transaction’s
magnitude.” Cottle v. Storer Communication Inc., 849 F.2d 570, 578 (11th Cir. 1988); In re 995
Fifth Ave., 96 B.R. at 28. Generally speaking, whether the payment of a break-up fee is
appropriate is evaluated under the “business judgment rule.” In re S.N.A. Nut Co., 186 B.R. at
102. Under this rule, there is a presumption that, in making a business decision, debtor acted on
an informed basis, in good faith and in the honest belief that the action taken was in the best
interest of the estate. Therefore, bidding procedures proposed to be utilized by a debtor with
respect to a proposed sale should be approved when the Court determines that such procedures
are fair and do not violate any of the debtor’s fiduciary duties. Id.
Courts look to nine factors to determine whether bid protections are actually necessary to
preserve the value of the estate. In re Tama Beef Packing, Inc., 290 B.R. 90, 97 (B.A.P. 8th Cir.
2003). The factors consider are as follows:
1) whether the relationship of the parties who negotiated the break-upfee is tainted by self-dealing or manipulation;
2) whether the fee hampered, rather than encouraged bidding;
3) whether the amount of the fee is unreasonable relative to theproposed purchase price;
4) whether the unsuccessful bidder placed the estate property in asales configuration mode to attract other bidders to the auction;
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5) whether the request for a break-up fee served to attract or retain apotentially successful bid, establish a bid standard or minimum forother bidders, or attract additional bidders;
6) whether the fee requested correlates with the maximization ofvalue to the debtor's estate;
7) whether the principal secured creditors and the official unsecuredcreditors committee supported the concession;
8) whether there were safeguards beneficial to the debtor's estate; and
9) whether there would be a substantial adverse impact on unsecuredcreditors from approval of the administrative expense.
Id. Here, the proposed Bid Protections are presented for the proper purpose of maximizing the
value of the Debtors' assets and constitute reasonable and customary fees for the size of this
transaction. The Debtors further believe the Overbid Requirement will allow the most robust,
competitive auction possible.
Indeed, bidding protections, including break-up fees, are a normal and, in many cases,
necessary component of significant sales conducted under section 363 of the Bankruptcy Code.
Specifically, bid protections may be legitimately necessary to convince a white knight bidder to
enter the bidding by providing some form of compensation for the risks it is undertaking. In re
Integrated Res., Inc., 147 B.R. 650, 660–61 (S.D.N.Y. 1992) (bid protections can prompt bidders
to commence negotiations and "ensure that a bidder does not retract its bid"); In re Hupp Int’l
Indus., Inc., 140 B.R. 191, 194 (Bankr. N.D. Ohio 1992) ("[W]ithout such [protections], bidders
would be reluctant to make an initial bid for fear that their first bid will be shopped around for a
higher bid from another bidder who would capitalize on the initial bidder’s ... due diligence.").
As a result, courts can approve bidding protections in connection with proposed
bankruptcy sales where proposed procedures provide benefit to the estate. See In re O’Brien
Envtl. Energy, Inc., 181 F.3d 527, 537 (3d Cir. 1999). The Debtors believe that the allowance of
the Overbid Requirement is in the best interests of the Debtors’ estates, as the Buyer will
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establish a floor for further bidding and thus may increase the consideration given in exchange
for the Encore Assets to the benefit of the Debtors’ estates.
In this case, the Buyer expended many hours in due diligence, which included review of
the Encore Assets, drafting and negotiating the APA and TSA. In this process, the Buyer
identified several issues that the Debtors believe will be important to any buyer. At the same
time, the Buyer created a mechanism to close quickly, while also addressing executory contract
issues. Accordingly, the Debtors believe that Buyer's actions have helped establish a process for
selling the Encore Assets that justifies the relief requested herein. If the Court does not approve
the Bid Protections, the Buyer may elect not to serve as the stalking horse, to the detriment of the
Debtors’ estates. The proposed Bid Protections are fair and reasonable. The Break-Up Fee and
Overbid Requirement meets the nine factor test of In re Tama, and should, accordingly, be
approved.
CONCLUSION
For the foregoing reasons, the Debtors respectfully request that the Court enter the
proposed orders granting the relief requested in the Motion.
Dated: October 26, 2017 e/Robert T. KuglerRobert T. Kugler (#0194116)Edwin H. Caldie (#0388930)Phillip J. Ashfield (#0388990)Andrew J. Glasnovich (#0398366)STINSON LEONARD STREET LLP50 South Sixth Street, Suite 2600Minneapolis, MN 55402Telephone: 612.335.1500Facsimile: 612.335.1657
COUNSEL FOR THE DEBTORS
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Exhibit A
UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MINNESOTA
In re:
WYNIT Distribution, LLC,WD Navarre Distribution, LLC,WD Encore Software, LLC,WD Navarre Holdings, LLC,WD Navarre Digital Services, LLC,WYNIT Holdings, Inc.,WD Navarre Canada, ULC,
Debtors.
JOINTLY ADMINISTERED UNDERBKY 17-42726
BKY 17-42726BKY 17-42728BKY 17-42729BKY 17-32864BKY 17-32865BKY 17-32866BKY 17-32867
BID PROCEDURES
On October 26, 2017, Debtors filed a Motion for an Order (I) Granting an ExpeditedHearing (II) Approving Bid Procedures and Bid Protections for the Sale of Certain Assets Freeand Clear of All Liens, Interests, Claims and Encumbrances Pursuant to 11 U.S.C. § 363, and(III) Granting Other Related Relief (WD Encore Software) [Docket No. _____] (the "EncoreBid Procedures Motion") pursuant to which the Debtors requested authority to sell certainAssets of WD Encore Software, LLC—Case No.17-42729, (excluding any assets Debtorsreceived on consignment or allegedly received on consignment) to the highest or best bidderssubject to the procedures outlined herein. These Bid Procedures have been approved andauthorized pursuant to the Order Approving the Procedures for the Solicitation of Offers andApproving the Form and Manner of Notice [Docket No. [___] (the "Bid Procedures Order")entered by the United States Bankruptcy Court for the District of Minnesota (the "BankruptcyCourt") on or before [date], 2017.
The Bidding Process
Subject to the conditions set forth therein, at any time on or before November 7, 2017, at2:00 p.m. (prevailing Central Time) (the "Bid Deadline"), Conway MacKenzie, the sale agentfor the Debtors (the "Sale Agent") will (i) engage in discussions and negotiations regarding asale transaction with any entity (a "Potential Bidder") that has made inquiry with the Debtors ortheir counsel regarding potential asset sales and/or that the Sale Agent reasonably believes couldlead to a bona fide written offer relating to a sale offer that would meet the requirements of these
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Bid Procedures (the "Proposal"), (ii) furnish to such Potential Bidder and its Representatives,1
and to any other party that has made a request therefor in connection with its consideration ofmaking an offer or proposal relating to a sale (each a "Bid"), public and non-public informationrelating to the Encore Debtor and their assets and businesses pursuant to a confidentialityagreement between the Debtors and such Potential Bidder (the "Confidentiality Agreement"),and (iii) afford to any such Potential Bidder who has signed a Confidentiality Agreementreasonable access to any data site, properties, assets, books or records of the Encore Debtor.Each Confidentiality Agreement entered into after the date of the entry of the Bid ProceduresOrder shall recognize that the Debtors are obligated to comply with the terms of these BidProcedures. Each confidentiality agreement previously entered into between the Debtors and aPotential Bidder in effect on the date of the entry of the Bid Procedures Order shall be deemed tobe a Confidentiality Agreement subject to this Bid Procedures Order. By participating in theBidding Process (as defined below), each Potential Bidder shall be deemed to have agreed to anyand all modifications to any previously executed confidentiality agreement as necessary topermit the Debtors and their Representatives to comply with the terms of these Bid Procedures.
The Sale Agent shall provide these Bid Procedures, together with a copy of the AssetPurchase Agreement entered into by and between the Debtors and the stalking horse bidder,Avanquest North America LLC, a California limited liability company (the "APA"), to eachPotential Bidder.
Any Potential Bidder wishing to conduct due diligence concerning a prospective saletransaction shall be granted access, subject to execution of a Confidentiality Agreement, to allrelevant business, financial and other information of the Encore Debtor as may be reasonablynecessary (to be determined at the Sale Agent's discretion) to enable such Potential Bidder toevaluate the assets of the Encore Debtor and the prospective sale transaction. The Encore Debtorshall make such access available during normal business hours as soon as reasonably practicable.Potential Bidders interested in conducting due diligence should contact MichaelCavanaugh or Greg Charleston of the Sale Agent at [email protected] [email protected] or by phone at (216) 278-0740. Notwithstanding theforegoing, the Sale Agent is not required to provide confidential or proprietary information toany person if the Sale Agent determines, after consultation with the Consultation Parties, thatsuch disclosure could be detrimental to the interests of the Debtors’ estates.
Prior to the selection of a Bid as the highest or best offer for any individual asset, portionof the Encore Debtors’ assets, or all of the Encore Debtors’ assets (the "Successful Bid(s)"), theSale Agent may: (a) receive Bids from Potential Bidders, (b) request information from PotentialBidders and engage in discussions with Potential Bidders and take such other actions todetermine whether any Bid constitutes or could lead to a superior Proposal, (c) evaluate any Bidmade by a Potential Bidder, (d) engage in discussions and negotiations with any Potential Bidderwith respect to any Bid submitted by a Potential Bidder, and (e) take any other actionscontemplated under these Bid Procedures (collectively, the "Bidding Process").
1 “Representatives” means, with respect to any person, entities, the officers, directors, employees, members,managers, partners, investment bankers, attorneys, accountants, consultants or other advisors, agents orrepresentatives of such person, when acting in such capacity on behalf of such person.
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Deliveries by Potential Bidders
In order to participate in the Bidding Process, each Potential Bidder must deliver thefollowing to the Sale Agent prior to the Bid Deadline (unless previously delivered in a formacceptable to the Debtors as provided herein or waived by the Sale Agent after consultation withthe Consultation Parties):
(a) An executed Confidentiality Agreement acceptable to the Sale Agent;and
(b) Financial statements of, or other information relating to, the PotentialBidder or, if the Potential Bidder is an entity formed for the purpose ofthe sale transaction, financial statements of or other information relating tothe equity holder(s) of the Potential Bidder, or such other form of financialdisclosure or evidence of financial capability and performance and legalauthority acceptable to the Sale Agent (and, if requested by the SaleAgent, certified to by a duly authorized representative of the PotentialBidder (or equity holders thereof, as applicable)), demonstrating suchPotential Bidder’s financial capability and legal authority to close theproposed sale transaction in a timely manner.
A Potential Bidder that delivers the documents described in subparagraphs (a) and (b)above, and that the Sale Agent determines in its business judgment after consultation with thePostpetition Agent and Committee, is financially capable of consummating the sale transactionin a timely manner shall be permitted to further participate in the Bidding Process. The SaleAgent may require an update of such information and an affirmation of any Potential Bidder’sfinancial capability to bid and consummate any sale transaction contemplated hereunder.
Due Diligence for Potential Bidders
To obtain due diligence access or additional information from the Encore Debtor, aPotential Bidder must first advise the Sale Agent of the nature and extent of additional duediligence such Potential Bidder may wish to conduct. The Sale Agent shall coordinate allrequests for additional information and due diligence access by such Potential Bidders with theDebtors. No conditions relating to the completion of due diligence will be permitted to exist afterthe Bid Deadline, except as otherwise agreed to by the Sale Agent in writing after consultationwith the Postpetition Agent.
Submission by Bid Deadline
A Potential Bidder who desires to make a Bid must deliver a written copy of its writtenpurchase or agency agreement marked to show the specific changes to the Purchase Agreementthat the Potential Bidder requires (which marked copy may be an electronic comparison of thewritten agreement submitted and the Purchase Agreement) on or before November 7, 2017 tothe Sale Agent. The Sale Agent may, after consultation with the Postpetition Agent, extend theBid Deadline, but shall promptly notify all Potential Bidders of any such extension.
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Determination of "Qualified Bid" Status
A Bid received from a Potential Bidder by the Bid Deadline will constitute a "QualifiedBid" only if it includes all of the following documents (the compliance of which shall bedetermined by the Sale Agent after consultation with the Postpetition Agent and Committee)(collectively, the "Required Bid Documents") and a Good Faith Deposit as described below andmeets all of the Bid Requirements (as defined below):
(a) A written asset purchase agreement duly executed by the Potential Bidderin substantially the same form as the APA with changes only regarding theapplicable assets and contracts being purchased and any other changesacceptable to the Sale Agent after consultation with the Postpetition Agentand Committee, together with a copy of such agreement marked to showthe specific changes to the APA that the Potential Bidder requires (whichmarked copy may be an electronic comparison of the written assetpurchase agreement submitted and the Purchase Agreement). The assetpurchase agreement submitted by a Potential Bidder shall:
i. indicate whether all Encore Assets, or a portion thereof, arebeing purchased;
ii. include a complete set of all schedules and exhibits theretowhich, to the extent practicable, will be marked to show thespecific changes to the schedules and exhibits to thePurchase Agreement, if applicable;
iii. not contain any financing or due diligence contingencies toclosing on the proposed sale transaction;
iv. not contain any condition to closing of the sale transactionon the receipt of any third party approvals (excludingrequired Bankruptcy Court approval and any requiredgovernmental and/or regulatory approvals, if any); and
v. provide that the offer of the Potential Bidder is irrevocablethrough thirty (30) days after the entry of an Orderapproving the Sale Motion and subject to the backup bidderprovisions herein.
(b) A good faith deposit (the "Good Faith Deposit") in the form of a wiretransfer to the Debtors or a certified or bank check payable to the order ofthe Debtors (or other form acceptable to the Debtors with approval byPostpetition Agent) in the amount of at least 5% of the purchase price orguaranteed amount for the Encore Assets proposed to be purchased.
Each Potential Bidder that makes a Qualified Bid shall be referred to as a "Qualified Bidder."Each of Buyer, the Postpetition Agent, and the Prepetition Agent shall be a Qualified Bidder.
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Bid Requirements
All Bids must also satisfy all of the following requirements, all as determined solely bythe Sale Agent after consultation with the Postpetition Agent:
(a) The Bid must provide for consideration under the Purchase Agreement forthe Encore Assets proposed to be purchased.
(b) The Bid must be in cash unless otherwise consented to by the Sale Agent,after consultation with the Postpetition Agent.
(c) The Bid must be accompanied by satisfactory evidence of committedfinancing or other financial ability to consummate the sale transaction in atimely manner.
(d) The Bid must satisfy the Overbid Requirement by exceeding the initial bidof the Buyer by at least $55,000 (the Break-Up Fee plus $25,000).Thereafter, each Bid must exceed the high bid by no less than $25,000.7
(e) The Bid (other than the initial bid by the Buyer) cannot be conditionedupon the Bankruptcy Court’s approval of any bid protections, such as abreak-up fee, termination fee, expense reimbursement, working fee orsimilar type of payment.
(f) The Bid must expressly acknowledge and represent that the PotentialBidder: (i) has had an opportunity to conduct any and all due diligenceregarding the assets and businesses of the Debtors and the sale transactionprior to making its Bid, (ii) has relied solely upon its own independentreview, investigation and/or inspection of any documents and the assetsand businesses of the Debtors in making its Bid, and (iii) did not rely uponany written or oral statements, representations, promises, warranties orguaranties whatsoever, whether express, implied, by operation of law orotherwise, regarding the business or assets of the Debtors or the saletransaction, or the completeness of any information provided inconnection therewith, except as expressly stated in the representations andwarranties contained in the Purchase Agreement ultimately accepted andexecuted by the Debtors, and (iv) has authority to make the Bid, executeany necessary documents to close on the sale transaction, and proceed toclosing on the sale transaction.
(g) The Bid must be received by the Bid Deadline.
7 For the avoidance of doubt, Buyer shall be entitled to credit bid in the amount of the Breakup Fee for eachsubsequent bid in any auction.
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Auction
Prior to the Auction (as defined below), the Sale Agent (in consultation with thePostpetition Agent) shall evaluate the Qualified Bids and select the Qualified Bid or combinationof Qualified Bids that the Sale Agent determines in its business judgment to be the highest orbest Qualified Bid(s) (the "Initial Highest Bid") for a sale of the Encore Assets. In making thisdetermination, the Sale Agent may consider, among other things, the amount of cash to be paidor delivered, the net economic benefit to the Debtors' estates, and the other terms and conditionsof the Qualified Bid(s). The Sale Agent shall provide copies of all Bids to the Postpetition Agentpromptly after the Bid Deadline, but not later than Midnight prevailing Central time onNovember 7, 2017.
If more than one Qualified Bid has been submitted for the particular Encore Assets of theEncore Debtor's estate in accordance with these Bid Procedures, the Sale Agent will conduct anauction (the "Auction") with respect to such Qualified Bids in order to determine, in the businessjudgment of the Sale Agent after consultation with the Postpetition Agent and Committee, theSuccessful Bid(s).
The Auction, if required, will commence at 9:00 a.m. (prevailing Central Time) onNovember 8, 2017 at the offices of Stinson Leonard Street LLP, 50 South Sixth Street, Suite2600, Minneapolis, Minnesota 55402, or at such later time or other place as agreed by the SaleAgent after consultation with the Postpetition Agent and Committee, or approved by Order of theBankruptcy Court, and of which the Sale Agent will notify all Qualified Bidders who havesubmitted Qualified Bids (collectively, the "Auction Participants").
The Sale Agent shall give each of the Auction Participants notice of the Initial HighestBid and a copy of such Bid prior to the scheduled start of the Auction.
Only the Debtors, the Sale Agent, the Auction Participants, potential financing sources ofthe Auction Participants, the Postpetition Agent, the Prepetition Agent, the Committee and theirrespective Representatives will be entitled to attend, participate and be heard at the Auction.
At the commencement of the Auction, the Sale Agent shall formally announce the InitialHighest Bid(s) and the assets to which they relate. All Qualified Bids at the Auction will bebased on and increased therefrom, and thereafter made in minimum increments higher than theprevious Qualified Bid in the amount of $25,000 or such other amount to be established by theSale Agent after consultation with the Postpetition Agent.3
The Sale Agent after consultation with the Postpetition Agent and Committee shall havethe right to adopt such other rules for the Auction which the Sale Agent believes in its businessjudgment will promote the goals of the Auction, including, without limitation, that the SaleAgent can continue to take and negotiate bids in lot or in bulk until the Successful Bid(s) havebeen selected.
3 Minimum bid increments, other than a credit bid pursuant to a Credit Bid Right, must consist solely of cashconsideration unless otherwise authorized by the Sale Agent after consultation with the Postpetition Agent andCommittee.
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Each Auction Participant shall be deemed to have agreed to keep its final Qualified Bidmade at or prior to the Auction open through thirty (30) days after the entry of an Orderapproving the Sale Motion. Bidding at the Auction will continue until such time as the highest orotherwise best Qualified Bid(s) are determined in the business judgment of the Sale Agent afterconsultation with the Committee and Postpetition Agent. To facilitate a deliberate and orderlyconsideration of competing Qualified Bids submitted at the Auction, the Sale Agent afterconsultation with the Postpetition Agent and Committee may adjourn the Auction at any timeand from time-to-time and may conduct multiple rounds of bidding. Prior to conclusion of theAuction, the Sale Agent after consultation with the Postpetition Agent may permit one or moreAuction Participants who have submitted bids for less than all Encore Assets of the Debtors tojoin together as a single Qualified Bidder for the purpose of submitting a joint Qualified Bid toacquire substantially all Encore Assets of the estates, provided that such Auction Participants sojoin without improper collusion under the Bankruptcy Code or other applicable law. Uponconclusion of the Auction, the Sale Agent, in consultation with the Postpetition Agent andCommittee, will (a) review each Qualified Bid on the basis of financial and contractual terms andother factors relevant to the sale process, including those factors affecting the speed and certaintyof consummating the sale and (b) after consultation with the Committee and the PostpetitionAgent, identify the Successful Bid(s). In making this determination, the Sale Agent, afterconsultation with the Postpetition Agent and the Committee, may consider, among other things,the amount of cash to be paid or delivered, the net economic benefit to the Debtors' estates, andthe other terms or conditions of the Qualified Bid(s), and the determination by the Sale Agent,after consultation with the Postpetition Agent and the Committee, shall be final for the purposesof these Bid Procedures.
Breakup Fee / Bidding Protections
The Buyer shall be entitled to a "Breakup Fee" of $30,000.00. The first (if any) overbid atthe Auction must exceed the Buyer's offer by at least $55,000 (the Breakup Fee plus $25,000.00)and that bid increments shall thereafter be at least $25,000 higher than the prior existing qualifiedbid (together the Breakup Fee and the Overbid Requirement are the "Bid Protections"). TheBreakup Fee shall be deemed to be an allowed administrative expense claim of the estate under11 U.S.C. 503(b) and shall be paid solely from the proceeds of the sale of all or some of theEncore Assets from a buyer other than Buyer.
Credit Bid Rights
Credit Bid Right. The right to credit bid under section 363(k) of the Bankruptcy Code isspecifically preserved. The Postpetition Agent, on behalf of the Postpetition Lenders,4 and thePrepetition Agent, on behalf of the Prepetition Lenders,5 shall each be deemed a QualifiedBidder in all respects, and shall not be required to submit a Good Faith Deposit, purchaseagreement, or any other deliverable or documentation to the Sale Agent, the Debtors, or their
4 Under the DIP Financing Motion the Debtors sought Court approval for a senior secured postpetition revolvingloan facility of up to $15,000,000 with certain of their prepetition first-lien lenders as defined in the DIP FinancingMotion (the "Postpetition Lenders").5 Each of the Debtors other than WYNIT Holdings, Inc. is a borrower under a Credit Agreement, dated November29, 2016 under which Wells Fargo Capital Finance, as administrative agent for itself and other participating lenders(collectively, the "Prepetition Lenders"), has authority to act as secured lender.
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representatives or agents and may credit bid, in their respective discretion, at the Auction.Further, each of the Postpetition Agent and the Prepetition Agent may submit a credit bid, insuch party's respective sole and absolute discretion, at any time prior to announcement of theSuccessful Bid(s), regardless of whether such party participated in prior rounds of the Auction,on any individual asset, portion of the assets, or all assets constituting its respective collateral.Credit bidding by all junior lien holders will be prohibited, but all rights, claims and objectionswill be reserved and can be asserted against the sale(s) proceeds, if any.
Sale Hearing
An evidentiary hearing to consider the Sale Motion and approval of the Successful Bid(s)(the "Sale Hearing"), will be held on or before November 9, 2017 at 9:00 a.m. prevailingCentral time (the "Sale Hearing"), in the courtroom of the Honorable Kathleen H. Sandberg,United States Bankruptcy Judge, at the United States Bankruptcy Court, District of Minnesota,300 South Fourth Street, Courtroom 8 West, Minneapolis, Minnesota 55415. The Sale Hearingmay be adjourned or rescheduled as ordered by the Bankruptcy Court without further notice tocreditors and parties in interest other than by announcement by the Debtors of the adjourned dateat the Sale Hearing.
The Debtors’ presentation to the Bankruptcy Court for approval of the Successful Bid(s)does not constitute the Debtors’ acceptance of the Bid(s). The Debtors will be deemed to haveaccepted a Bid only when the Bid has been approved by Order of the Bankruptcy Court.
Objections
Objections, if any, to the Sale Motion shall be filed on the docket of the BankruptcyCourt and served such that each objection is actually received by the following parties before5:00 p.m. on November 8, 2017 (the "Objection Deadline"): (a) counsel for the Debtors atStinson Leonard Street LLP, Attn: Robert Kugler, 50 South Sixth Street, Suite 2600,Minneapolis, Minnesota 55402 [email protected], and Paul M. Hoffmann, 1200Walnut, Suite 2900, Kansas City, Missouri 64106, [email protected], (b) counsel toWells Fargo Bank, N. A. at Greenberg Traurig, LLP, Attn: David Kurzweil, 3333 PiedmontRoad NE, Ste. 2500, Atlanta, Georgia 30305 [email protected] (c) the United StatesTrustee’s Office, attn. Michael R. Fadlovich, 300 South Fourth Street, Suite 1015, Minneapolis,MN 55402 [email protected].
If any Auction Participant whose Qualified Bid is a Successful Bid (a "SuccessfulBidder") fails to consummate the Transaction because of a breach or failure to perform on thepart of such Successful Bidder, or for any reason other than the failure of the Bankruptcy Courtto approve the terms of the sale transaction, the Auction Participant that had submitted the nexthighest or otherwise best Qualified Bid for the same asset or assets of the estates at the Auctionor prior to the Auction (the "Back-Up Bidder") will be deemed to be the Successful Bidder, andthe Debtors will be authorized to consummate the sale transaction with such Auction Participantwithout further order of the Bankruptcy Court, and such Qualified Bid shall thereupon bedeemed the Successful Bid; provided that upon being notified that its Qualified Bid has becomethe Successful Bid, the Auction Participant submitting such Qualified Bid shall within three (3)business days after such notification provide a Good Faith Deposit (unless such Auction
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Participant previously shall have provided a Good Faith Deposit that shall not have been returnedas described below). Upon providing such Good Faith Deposit, such Auction Participant shall bedeemed the Successful Bidder. If any Auction Participant fails to consummate the saletransaction because of a breach or failure to perform on the part of such Auction Participant(including, without limitation, the failure to timely deposit the Good Faith Deposit), the processdescribed above may continue with other Auction Participants in decreasing order of theQualified Bids as determined by the Sale Agent after consultation with the Postpetition Agentuntil an Auction Participant shall consummate the sale transaction.
Disposition of Good Faith Deposit
The Good Faith Deposit of the Successful Bidder(s), or a Back-Up Bidder thatconsummates a transaction in place of a Successful Bidder as provided for herein, shall beretained by the Debtors and applied toward the payment of the Successful Bid(s) at the closing ofthe sale transaction. If any Successful or Back-Up Bidder fails, for any reason other thanBankruptcy Court denial of the sale transaction, to close a sale transaction, then the Good FaithDeposit shall be retained by the Debtors as partial damages for the failure to consummate thesale transaction. The Good Faith Deposit of all Qualified Bidders (other than the SuccessfulBidder(s), a Back-Up Bidder that consummates a sale transaction in place of a Successful Bidderas provided for herein, or a Successful Bidder or a Back-Up Bidder that forfeits its deposit asliquidated damages as provided for herein) will be returned, without interest, to each suchQualified Bidder within ten business days after the closing of all proposed sale transactionsapproved by the Bankruptcy Court at the Sale Hearing.
Modifications
The Sale Agent, after consultation with the Postpetition Agent and Committee, may (a)determine which Qualified Bid, if any, is the highest or otherwise best offer(s); and (b) reject atany time before entry of an Order of the Bankruptcy Court approving the Successful Bid(s), anybid that, in the discretion of the Sale Agent, after consultation with the Postpetition Agent andCommittee is (i) inadequate or insufficient, (ii) not in conformity with the requirements of theBankruptcy Code or the Bid Procedures, or (iii) contrary to the best interests of the Debtors’estates and their creditors. At or before the conclusion of the Auction, the Sale Agent, afterconsultation with the Postpetition Agent and Committee, may impose such other terms andconditions upon Qualified Bidders as the Sale Agent determines to be in the best interests of theDebtors’ estates in these cases.
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Exhibit B
Proposed Order
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UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MINNESOTA
In re:
WYNIT Distribution, LLC,WD Navarre Distribution, LLC,WD Encore Software, LLC,WD Navarre Holdings, LLC,WD Navarre Digital Services, LLC,WYNIT Holdings, Inc.,WD Navarre Canada, ULC,
Debtors.
JOINTLY ADMINISTERED UNDERBKY 17-42726
BKY 17-42726BKY 17-42728BKY 17-42729BKY 17-32864BKY 17-32865BKY 17-32866BKY 17-32867
ORDER GRANTING AN EXPEDITED HEARING, APPROVING BID PROTECTIONSAND PROCEDURES FOR THE SOLICITATION OF OFFERS FOR SALE OF THEDEBTORS’ ASSETS FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES,
AND INTERESTS, AND GRANTING RELATED RELIEF
At a hearing on [date], 2017 (the "Encore Bid Procedures Hearing"), this Court
considered the Motion for an Order (I) Granting an Expedited Hearing and (II) Approving Bid
Procedures and Bid Protections for the Sale of Certain Assets Free and Clear of All Liens,
Interests, Claims and Encumbrances Pursuant to 11 U.S.C. § 363, and (III) Granting Other
Related Relief (WD Encore Software) [Docket No. _____] (the "Encore Bid Procedures
Motion")1 filed by Debtors. Based on the arguments and evidence at the Encore Bid Procedures
Hearing, Court hereby finds and determines that:
1. The Court has jurisdiction to consider the Sale Motion and the relief requested
therein pursuant to 28 U.S.C. §§ 157 and 1334, the consideration of the Sale Motion and the
relief requested therein is a core proceeding pursuant to 28 U.S.C. § 157(b), and venue is proper
before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
1 Capitalized terms that are not defined herein shall have the meanings given to them in the Bid Procedures.
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2. As reflected in the Certificate of Service [Docket ___] filed with respect to the
Encore Bid Procedures Hearing, notice of the Encore Bid Procedures Motion and notice of the
Encore Bid Procedures Hearing have been served on the parties identified on the service list
maintained in these cases (who do not receive electronic notice) at the addresses set forth therein
(the "Notice").
3. The Notice is reasonable and sufficient in light of the circumstances and nature of
the relief requested in the Sale Motion, and no other or further notice of the Encore Bid
Procedures Motion for the Encore Bid Procedures Hearing is necessary. A reasonable and fair
opportunity to object to the Encore Bid Procedures Motion and the relief granted in this Order
has been afforded under the circumstances.
4. The Debtors have articulated good and sufficient reasons for this Court to grant
the relief requested in the Encore Bid Procedures Motion. Such good and sufficient reasons were
set forth in the Encore Bid Procedures Motion and on the record at the Encore Bid Procedures
Hearing and are incorporated by reference herein and, among other things, form the basis for the
findings of fact and conclusions of law set forth herein.
5. The bid procedures in the form attached hereto as Exhibit A (the "Bid
Procedures"), are fair, reasonable, and appropriate and are designed to maximize the value of
the Debtors’ estates. The Credit Bid Rights (as defined in the Bid Procedures) are permissible
under § 363(k) of the Bankruptcy Code and are fair and reasonable in light of the nature of these
Bankruptcy Cases.
6. The service of the notice of the Bid Procedures, the Sale Hearing (as defined
below), the Objection Deadline (as defined below), the respective dates, times and places for an
Auction (as defined below), if required under the Bid Procedures, is adequate and reasonably
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calculated to provide due, proper, and timely notice to all interested parties of, among other
things, the entry of this Order, the Bid Procedures, the Auction (if required under the Bid
Procedures), the Sale Hearing, the Sale Motion, including the sale of the Debtors’ estates’ right,
title and interest in, to and under the Debtors’ assets free and clear of any and all liens, claims,
encumbrances, and interests, and the procedure for objecting thereto. Except as otherwise set
forth herein, no other or further notice is necessary.
7. The findings of fact and conclusions of law herein constitute the Court’s findings
of fact and conclusions of law for the purposes of Bankruptcy Rule 7052, made applicable
pursuant to Bankruptcy Rule 9014. To the extent any findings of facts are conclusions of law,
they are adopted as such. To the extent any conclusions of law are findings of fact, they are
adopted as such.
8. The Debtors (through Conway MacKenzie) have received an initial offer to
purchase the Encore Assets from Avanquest North America LLC, a California limited liability
company ("Buyer") in the form of an Asset Purchase Agreement ("APA"). The terms of the
APA are described in the Encore Bid Procedures Motion and a copy of the APA is attached to
the related Encore Sale Motion identified in the Encore Bid Procedures Motion.
9. The offer includes a "good faith" deposit of $50,000.00, consistent with the Bid
Procedures for any other Qualified Bids. There is no financing contingency for the Buyer to
close the purchase provided all other terms are satisfied.
10. The Buyer shall be entitled to a "Breakup Fee" of $30,000.00. The first (if any)
overbid at the Auction must exceed the Buyer's offer by at least $55,000 (the Breakup Fee plus
$25,000.00) and that bid increments shall thereafter be at least $25,000 higher than the prior
existing qualified bid (together the Breakup Fee and the Overbid Requirement are the "Bid
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Protections.") The Breakup Fee shall be deemed to be an allowed administrative expense claim
of the estate under 11 U.S.C. 503(b) and shall be paid solely from the proceeds of the sale of all
or some of the Encore Assets from a buyer other than Buyer. In the event that the Buyer is
entitled to the Breakup Fee, the Buyer shall be entitled credit bid the Break-Up Fee at the
Auction. The Bid Protections are reasonable and customary in an offer of this size and
complexity given that the Buyer has and will continue to accrue fees and costs in due diligence
to support its offer.
NOW, THEREFORE, IT IS HEREBY ORDERED THAT:
The Motion is GRANTED as set forth herein.
i. All objections to the relief requested in the Motion, if any, that have not been withdrawn,
waived, or settled as announced to the Court at the Encore Bid Procedures Hearing are
denied and overruled in their entirety on the merits.
ii. The Buyer's offer is an offer to purchase the Encore Assets, is submitted by a true third
party, and such offer will be subjected to the Bid Procedures approved by this Court.
iii. The Debtors may proceed with a sale and auction process in accordance with the Bid
Procedures, which procedures are hereby approved in their entirety in the form attached
hereto as Exhibit A. However, the consummation of the sale of the Encore Assets (as
provided in the APA) shall remain subject to the entry of an Order granting the Encore
Sale Motion.
iv. Potential bidders must comply with all terms of the Bid Procedures in order to participate
in the bidding process. All bids must satisfy all of the requirements contained in the Bid
Procedures. Notwithstanding the foregoing, the Postpetition Agent and the Prepetition
Agent, on behalf of the Postpetition Lenders and the Prepetition Lenders, respectively, (a)
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shall be deemed Qualified Bidders entitled to participate in the Auction and credit bid at
the Auction and (b) shall not be required to comply with the Bid Procedures.
v. The Debtors and Sale Agent are authorized and directed to take any and all actions
necessary or appropriate to implement the Bid Procedures. The process for submitting
Qualified Bids is fair, reasonable, and appropriate and is designed to maximize recoveries
for the benefit of the Debtors’ estates, their creditors and other parties in interest. Any
disputes as to the selection of a Qualified Bid, Initial Highest Bid, and/or Successful Bid
shall be resolved by this Court.
vi. As further described below, the key dates for this Order and the Bid Procedures are as
follows, with each of such dates being subject to extension by the Debtors with the
consent of the Postpetition Agent:
Event Date and Time (if applicable)
Notice Within 3 days of the entry of this Order
Bid Deadline November 7, 2017 at 5:00 p.m. prevailing Central Time
Auction November 8, 2017 at 9:00 a.m. prevailing Central time
Sale Hearing ObjectionDeadline
November 8, 2017 at 5:00 p.m. prevailing Central Time
Sale Hearing November 9, 2017 at 9:00 a.m. prevailing Central Time
vii. Any person desiring to submit a bid for the Debtors’ assets must comply with the Bid
Procedures and shall not be permitted to participate at the Auction unless such person is
an Auction Participant or is otherwise permitted to participate at the Auction under the
Bid Procedures; provided that, as set forth in Paragraph (iv) of this Order, the Postpetition
Agent and the Prepetition Agent shall be deemed Qualified Bidders entitled to participate
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at the Auction, including to credit bid for some or all of the Encore Assets, and shall not
be required to comply with the Bid Procedures.
viii. If a bid has been submitted for the Debtors’ assets in accordance with the Bid Procedures,
the Sale Agent will conduct an auction as to the Encore Assets (the "Auction") on
November 8, 2017, at 9:00 a.m., prevailing Central time, at the offices of Stinson
Leonard Street LLP, 50 South Sixth Street, Suite 2600, Minneapolis, Minnesota 55402.
The Sale Agent will notify all Qualified Bidders who have submitted Qualified Bids of
such Auction.
ix. A final hearing (the "Sale Hearing") to consider the Sale Motion shall be held on
November 9, 2017 at 9:00 a.m. prevailing Central Time in the courtroom of the
Honorable Kathleen Sandberg, United States Bankruptcy Judge, at the United States
Bankruptcy Court, District of Minnesota, 300 South Fourth Street, Courtroom 8 West,
Minneapolis, MN 55415, Minneapolis, Minnesota.
x. Any person failing to timely file an objection to the Sale Motion shall be barred from
objecting to the Sale Motion, including the sale of the Debtors’ assets in accordance with
the Agreement, free and clear of any and all liens, claims, encumbrances, and interests
and will be deemed to consent to the sale of the Debtors’ assets to the Successful
Bidder(s) free and clear of any and all liens, claims, encumbrances, and other interests.
xi. Notwithstanding the foregoing, the Debtors, after consultation with the Postpetition
Agent, may cancel the Auction or remove certain of the Encore Assets from the Auction.
xii. For cause shown, notwithstanding Bankruptcy Rules 6004, or otherwise, this Order shall
be effective and enforceable immediately upon entry and its provisions shall be self-
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executing. To the extent applicable, the stay described in Bankruptcy Rules 6004(h) is
hereby waived.
xiii. The terms of this Order shall control to the extent of any conflict with the Motion or the
Bid Procedures.
xiv. This Order shall become effective immediately upon its entry.
xv. The Court shall retain jurisdiction over any matter or dispute arising from or relating to
the implementation of this Order.
Dated: October ___, 2017
_________________________________United States Bankruptcy Judge
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Exhibit A
Bid Procedures
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4. The Debtors submit this motion (the "Encore Sale Motion") for an order (the
"Encore Sale Order"), pursuant to 11 U.S.C. § 363, and Fed. R. Bankr. P. 2002 and 6004 to
approve a sale of certain assets free and clear of all liens, interests, claims and encumbrances,
and related procedures as follows. Simultaneously, the Debtors have filed
A. a separate motion (the "Encore Bid Procedures Motion") for an order (the
"Encore Bid Procedures Order"), pursuant to 11 U.S.C. § 363, and Fed. R. Bankr. P.
2002 and 6004 to approve bid procedures for a sale of certain Encore Assets free and
clear of all liens, interests, claims and encumbrances; and,
B. a separate motion (the "Encore Executory Contracts Motion") for an order (the
"Encore Executory Contracts Order"), pursuant to 11 U.S.C. § 365, and Fed. R. Bankr.
P. 2002 and 6006 to approve procedures for assumption or rejection of certain executory
contracts and unexpired leases affiliated with this Encore Sale Motion.
I. BACKGROUND
Procedural Posture
5. On September 8, 2017 (the "Petition Date"), the Debtors filed separate voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the District of Minnesota (the "Bankruptcy Court"). The bankruptcy cases are
referred to collectively hereafter as, the "Bankruptcy Cases".
6. By orders of this Court entered on September 13, 2017, the Bankruptcy Cases are
jointly administered under the caption set forth above which is designated as the lead case.
7. Each Debtor remains in possession of its assets and continues to operate as a
debtor-in-possession in accordance with 11 U.S.C. §§ 1107 and 1108.
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8. As of the date of this Encore Sale Motion, an Official Committee of Unsecured
Creditors ("Committee") has been appointed.
9. This is a core proceeding pursuant to 28 U.S.C. § 157(2)(A), (M), (N), and (O).
10. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334.
11. Venue is proper in this Court pursuant to 28 U.S.C. § 1408.
12. The assets being sold pursuant to this Encore Sale Motion include inventory,
accounts receivable, furniture fixtures and equipment, and intellectual property further defined as
Purchased Assets in the Asset Purchase Agreement (as defined herein). The assets to be sold
shall be collectively referred to as the “Encore Assets.”
13. Specifically, the Encore Assets include:
(a) all of the Debtors’ inventory of the Encore Software business including finishedgoods, work in process, raw materials, operating supplies, packaging and shippingmaterials, and replacement, spare and component parts;
(b) all of the Debtors’ executory contracts and unexpired leases relating to the EncoreSoftware business assumed and assigned to the Buyer;
(c) all of the Debtors’ intellectual property used by the Debtors in connection withthe Encore Software business, including all documentation relating to,constituting or describing the intellectual property and all rights thereunder;
(d) all of the Debtors’ customer data used or intended to be used in connection withthe Encore Software business;
(e) all of the Debtors’ personal property used or intended to be used in connectionwith the Encore Software business, including, personal computers, servers,hardware and other tangible property;
(f) all of the Debtors’ deposits and prepaid charges and expenses related to theEncore Assets and any executory contracts assumed by the Buyer;
(g) to the extent assignable, all of the Debtors’ governmental authorizations and allpending applications therefor or renewals thereof with respect to the EncoreSoftware business; and
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(h) all other rights, privileges and interests of the Debtors associated with the EncoreAssets used or intended for use in connection with, or necessary to the continuedoperation of, the Encore Software business.
14. The Encore Assets to be sold shall not include any Excluded Assets as defined in
the Agreement. In addition, the Encore Assets to be sold shall not include inventory sold to
Debtors on consignment or inventory allegedly sold to the Debtors on consignment, but does
include inventory sold by Debtors on consignment with third parties.
15. Because the Encore business has a significant seasonal element to it, the value of
the business is higher before the holidays than it will be after the holidays. There is also concern
that the Encore brand and business may be damaged as it is associated with the wind down of the
WYNIT distribution business. Furthermore, the Encore business costs approximately $120,000
per week to operate currently and that business can likely be run more efficiently by a buyer
outside of the current business platform and systems. Therefore, it is important to complete the
Encore sale as expeditiously as possible to maximize value for all creditors. As a result, the
Debtors are requesting that the Court consider this Encore Sales Motion on an expedited basis.
16. The Debtors' history, operations, debt structure and corporate structure are fully
described in the declaration of Peter A. Richichi dated September 8, 2017 and in the declaration
of relatedness also dated September 8, 2017.
Pre-Petition Secured Debt
17. Each of the Debtors, other than WYNIT Holdings, Inc., is a borrower under a
Credit Agreement, dated November 29, 2016 (as amended, restated, supplemented or otherwise
modified from time to time, the "Wells Credit Agreement"), under which Wells Fargo Capital
Finance, as administrative agent for itself and other participating lenders (collectively, the
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"Prepetition Lenders"), has authority to act as secured lender. WYNIT Holdings, Inc. signed a
guaranty of the other Debtors' obligations under the Wells Credit Agreement.
18. Each of the Debtors, other than WYNIT Holdings, Inc., also executed a security
agreement dated November 29, 2016 (as amended, restated, supplemented or otherwise modified
from time to time, the "Wells Security Agreement") in favor of the Prepetition Lenders to
secure performance of terms and obligations arising under the Wells Credit Agreement and,
under the Wells Security Agreement, each signing Debtor granted Wells Fargo Capital Finance,
for the benefit of itself and the Prepetition Lenders, a first priority security interest in and
continuing lien on substantially all of each such Debtor’s assets and property, and all proceeds,
products, accessions, rents, and profits thereof, in each case whether then owned or existing or
thereafter acquired or arising, including the Encore Assets to be sold pursuant to this Encore Sale
Motion.
19. The Wells Credit Agreement provided WYNIT with a revolving, operating line of
credit, subject to borrowing base restrictions, in an aggregate maximum principal amount of
$250,000,000.00 (the "Wells Facility"). As of the Petition Date, the balance of the Wells Facility
was in excess of $77,026,711.83.
20. In addition to the foregoing, on February 12, 2014, WYNIT Distribution, LLC,
entered into an Inventory Financing Agreement with Wells Fargo Commercial Distribution
Finance, LLC ("WFCDF"), that provided financing for the purchase of certain, specified
inventory and, in exchange, WFCDF received, among other things, a first-priority, purchase
money security interest in specific inventory purchased with the proceeds of its loan. As of
August 29, 2017, the outstanding balance on WFCDF's line of credit was in excess of
$10,356,227. After careful analysis, WYNIT Distribution, LLC, in consultation with its third-
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party financial advisor, concluded that the value of the inventory subject to WFCDF's purchase
money security interest was nearly identical to the amount owed to WFCDF. As a result,
WYNIT Distribution, LLC, entered into a Voluntary Surrender Agreement with WFCDF, and
surrendered relevant inventory to WFCDF on September 5, 2017 (the “Surrendered
Inventory”). The Debtors will not include the Surrendered Inventory in this sale.
21. Within 90 days prior to the Petition Date, WYNIT also executed a security
agreement on June 12, 2017, that purports to provide FitBit, Inc. with a subordinated lien on
WYNIT's assets. FitBit filed a related UCC financing statement on June 16, 2017. As a result,
any security interest asserted by FitBit may be avoidable, any claim asserted by FitBit may be
subject to an objection pursuant to 11 U.S.C. § 502(d), and all rights with respect to any asserted
claims, security interests or liens of FitBit are reserved under § 506(d).
Material Developments After Filing of the Cases
22. After filing the Bankruptcy Cases, the Debtors have performed their duties under
the Bankruptcy Code attentively and in good faith. Among other things to date:
A. The Debtors filed the Motion for Authority to Obtain a Postpetition
Facility and to use Cash Collateral on September 8, 2017 at [ECF No. 6] (hereafter "DIP
Financing Motion"). Under the DIP Financing Motion, the Debtors sought Court
approval for a senior secured postpetition revolving loan facility of up to $15,000,000
(the “Postpetition Facility”) with certain of their prepetition first-lien lenders as defined
in the DIP Financing Motion (hereafter referred to as the "Postpetition Lenders"). The
Court has entered two interim Orders granting the DIP Financing Motion and the
Postpetition Facility pursuant to which up to $8 million of interim financing is being
provided by the Postpetition Lenders to the Debtors, with such financing collateralized by
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a first priority priming lien on substantially all assets of the Debtors. A final hearing on
the DIP Financing Motion was held on October 26, 2017, and the Court granted the relief
requested on a final basis subject to submission of an order consistent with the Court's
ruling.
B. Among the other terms set forth fully in the DIP Financing Motion
and Exhibits thereto, the Postpetition Facility requires the compliance with certain
"Milestones", as defined in the DIP Financing Motion and Exhibits thereto. This
Encore Sale Motion, and the related Encore Bid Procedures Motion, are filed in
conjunction with other sale pleadings and documents in these cases to satisfy the
Milestones.
The Debtors’ Pre-Bankruptcy Marketing and Sales Efforts
23. After the last minute failure of a critical funding need, and after careful
consideration of available options and consultation with counsel, WYNIT determined it could no
longer operate on August 24, 2017. WYNIT stopped issuing purchase orders and stopped
accepting supplier deliveries of goods to its warehouses. In addition, to preserve as much value
as possible for its creditors, WYNIT undertook the difficult step of terminating more than 200
employees. By the end of that week, the shut-down of WYNIT was known publicly and
customers and suppliers began to scramble to find an alternate supplier/distributor for product.
24. Unfortunately, the opportunity to market WYNIT as a going concern business
evaporated immediately. Conway MacKenzie began work as WYNIT’s financial advisor in
Greenville, South Carolina, on Monday, August 28. Conway MacKenzie, working with
executive management, began to explore alternative methodologies to best monetize the assets of
the business. A parallel path approach to selling assets was developed.
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25. As it relates to the Encore Business, Conway MacKenzie, on behalf of the
Debtors, proactively contacted about a dozen parties that would be strategic buyers and
responded to several additional unsolicited inquiries. About nine parties initially expressed
interest. Five non-disclosure agreements were executed and those parties did due diligence.
Three parties submitted letters of intent.
26. Ultimately, Conway MacKenzie located and negotiated an Asset Purchase
Agreement ("APA") for the Encore Assets with Avanquest North America LLC, a California
limited liability company ("Buyer"). However, some other parties have also expressed an
interest in possibly submitting competing bids, hence Conway MacKenzie believes the separate
Encore Bid Procedures Motion is appropriate.
The Agreement and Sale Process
27. A copy of the APA is attached as Exhibit A. The Debtors propose to
effectuate a sale of the Encore Assets to Buyer or the highest or best bidder, or bidders, after
completion of the Auction pursuant to the APA. The sale to the Buyer, or other highest or best
bidder, will provide for, among other things, the sale of the Encore Assets, or portions thereof,
free and clear of any and all liens, claims, encumbrances, and other interests.
28. The Debtors propose to effectuate the sale(s) via the process and procedures
outlined in the Encore Bid Procedures Motion and any related Encore Bid Procedures Order in
order to determine the highest or best bidder or bidders to enter into the sale transaction(s).
29. The Debtors propose the following timeline for execution of the Bid Procedures
and the sale transaction(s):
Event Date
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Event Date
Notice + NDAs + Data Room + Directcontact with buyers
Commenced Prepetition
Sale Procedures/Stalking-Horse Bid and BidProtections Approved
By October 31, 2017
Competing Bid Deadline By November 7, 2017 at 5 p.m.
Final Auction, if necessary, and AnnounceResults
November 8, 2017 at 9 a.m.
Sale Motion Approved November 9, 2017
Closing re Asset Sale(s) (outside date) November 10, 2017
II. THE "STALKING HORSE" PROPOSAL TO PURCHASE ASSETS
30. The Debtors (through Conway MacKenzie) have received an offer to
purchase the Encore Assets from the Buyer free and clear of all liens, claims and interest in
accordance with section 363(f) of the Bankruptcy Code.. The Buyer offers to purchase certain
inventory, executory contracts, intellectual property, customer data, personal property, deposits
and prepaid charges, and governmental authorizations and pending applications related to the
Encore Software Business (as defined in the APA). Excluded assets include cash, cash
equivalents and bank accounts, accounts receivables, intercompany claims, organizational
records, insurance policies, benefit plans, refunds, litigation claims, avoidance actions,
consignment inventory (where Encore is the consignee, but not where Encore is the consignor),
D&O claims and any other assets not specifically included within the Encore Assets in the APA
31. A major component of the APA is the assumption and assignment of certain
executory contracts. This is because the inventory largely consists of hundreds of different types
of software for home and office use. This software includes such well-known items as Print Shop
and Print Master,. Given the nature of the inventory, each item requires multiple licenses and
other agreements with third parties. Any buyer, including Buyer, will need time to determine
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whether a particular contract is executory and should be assumed and assigned (with or without
modifications proposed and agreed to by the non-debtor counterparty), or rejected.
32. In order to facilitate an immediate closing, but also allow 90 days to
determine whether to assume and assign certain executory contracts, Section 7.10 of the APA
provides for a transition period during which Buyer will utilize certain employees, space,
equipment, records, and related assets of Debtors pursuant to a Transition Agreement attached as
Exhibit B. As part of the Transition Agreement, the Debtor requests that the Court approve a
sub-license of all intellectual property rights in the Encore Assetss to the Buyer, to enable the
Buyer to use the intellectual property in the executory contracts until a decision is made to
assume and assign any executory contract to Buyer. Additional details on the executory contract
issues are addressed in the separate Encore Executory Contracts Motion.
33. This Sale Motion, in conjunction with the Encore Executory Contracts
Motion, provides a mechanism for the Buyer to provide notice of assumption and assignment of
desired executory contracts for 90 days from the Closing date.
34. Pursuant to the APA, the Buyer will provide gross cash proceeds for the sale of
the Encore Assets of $1,025,000 (the "Cash Amount")1. An amount equal to $300,000 of the
Purchase Price shall be reserved by the Debtors for payment and satisfaction of Cure Costs as
such Cure Costs are established in the Cure Order or such other Orders of the Bankruptcy Court.
In the event that the total Cure Costs are less than $300,000, the Debtor shall promptly pay to the
Prepetition Lenders and the Postpetition Lenders the difference between $300,000 minus the
total Cure Costs. In the event that the total Cure Costs exceed $300,000, Buyer assumes such
1 A portion of this Cash Amount will be used for cure costs in connection with the related Encore ExecutoryContracts Motion.
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amounts in excess of $300,000 as an Assumed Liability and shall pay such excess Cure Costs
(“Excess Cure Costs”).
35. The offer includes a "good faith" deposit of $50,000.00, consistent with the
Bid Procedures for any other Qualified Bids. There is no financing contingency for the Buyer to
close the purchase provided all other terms are satisfied.
36. As discussed in the Encore Bid Procedures Motion, the APA includes in
Section 10.2 a "Breakup Fee" of $30,000.00,2 and an "Overbid Requirement," requiring the
first (if any) overbid at the Auction to exceed the Buyer's offer by at least $55,000 (the Breakup
Fee plus $25,000.00) and that bid increments shall thereafter be at least $25,000 higher than the
prior existing qualified bid (together the Breakup Fee and the Overbid Requirement are the "Bid
Protections." The Breakup Fee shall be deemed to be an allowed administrative expense claim
of the estate under 11 U.S.C. 503(b) and shall be paid from the close of escrow from the sale of
all or some of the Encore Assets from a buyer other than Buyer. In the event that the Buyer is
entitled to the Breakup Fee, the Buyer shall be entitled to a one-time credit of the Break-Up Fee
if the Buyer is the Successful Bidder of the Encore Assets. The Bid Protections are reasonable
and customary in an offer of this size and complexity given that the Buyer has and will continue
to accrue fees and costs in due diligence to support its offer.
III. RELIEF REQUESTED
Introduction
37. The Debtors request that this Encore Sale Motion be heard on an expedited basis.
If expedited relief is not granted, the maximum value of the Debtors' estates cannot be realized
2 For the avoidance of doubt, Buyer shall be entitled to the Breakup Fee if Buyer is not deemed the SuccessfulBidder as provided herein.
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and will result in diminished return to the Debtors' creditors. It is necessary for the Debtors to
obtain prompt approval of this Encore Sale Motion in order to give potential bidders adequate
time under the circumstances to consider participating in the proposed auction.
38. The Debtors further request this Court waive the stay required by Bankruptcy
Rule 6004(h). Given the exigencies described in this motion, delaying the sale of Encore Assets
will have a detrimental effect on the value of the Debtors' estates and diminish returns to their
creditors.
39. Pursuant to Bankruptcy Code §§ 105, 363, and Rules 2002, 6004, of the Federal
Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), the Debtors request that the Court,
inter alia,
a) find that notice of this Sale Motion was proper, timely, adequate, appropriate andsufficient and that no other or further notice of this Motion, the hearing on thisMotion, or the assumption and assignment of the designated contracts is or shallbe required;
b) find good, sufficient, and sound business purposes and justification andcompelling circumstances for the Debtors’ sale of the Encore Assets andassumption and assignment of the Designated Contracts to Purchaser (or to asuccessful overbidder) prior to, and outside of, a plan of reorganization;
c) find the consideration provided by Purchaser (or a successful overbidder) for theEncore Assets: (i) to be fair and reasonable, (ii) to be the highest or otherwise bestoffer for the Encore Assets that was received by the Debtors in accordance withthe Bidding Procedures Order, (iii) provides a greater recovery for the Debtors’creditors and shareholders than would be provided by any other practicalavailable alternative, and (iv) constitutes reasonably equivalent value and fairconsideration under the circumstances of these cases, and find that prospectiveoverbidders were provided an adequate opportunity to participate in the Auctionand to submit a higher or otherwise better bid;
d) find that one or more of the standards set forth in 11 U.S.C. § 363(f)(1)-(5) hasbeen satisfied for selling the Encore Assets free and clear of all liens, claims,interests and encumbrances (the "Encumbrances");
e) find that approval of the APA and the consummation of the Debtors’ sale of theEncore Assets and the Debtors’ assumption and assignment of the DesignatedContracts to Purchaser (or to a successful overbidder) as set forth in the separately
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filed Encore Executory Contracts Motion are in the best interests of the Debtors’estates;
f) authorize the Debtors to sell the Encore Assets to Buyer (or to a successfuloverbidder) free and clear of all Encumbrances with all liens existing against theEncore Assets at the time of the Closing to attach to the net sale proceeds in thesame order of priority, and with the same validity, force and effect, as such lienshad against the Encore Assets immediately before the Closing, subject to anyrights, claims and defenses of the Debtors and their bankruptcy estates;
g) find that the APA (or the asset purchase agreement with the successfuloverbidder)3 was negotiated, proposed and entered into without collusion, in goodfaith, and from arm’s-length bargaining positions and that Purchaser (or asuccessful overbidder) is acting as a good faith purchaser and is, accordingly,entitled to the protections set forth in section 363(m) of the Bankruptcy Codemake a finding that the Buyer is a good faith purchaser under 11 U.S.C. 363(m);and,
h) waive the 14-day stay periods set forth in Bankruptcy Rules 6004(h) and 6006(d);and,
i) grant any necessary or appropriate related relief.
Summary of Key Provisions of the Sale Transaction
40. Debtors note the following important aspects of the Sale Motion and Bid
Procedures:
(a) Sale to Insider. None of the Encore Assets are contemplated to besold to an "insider" within the meaning of 11 U.S.C. §101(31).
(b) "Sale Agent" The Debtors are proposing that Conway MacKenzieact independently as the Sale Agent.
(c) Competitive Bidding. As discussed in the Encore Bid ProceduresMotion, the Debtors do not anticipate any private sale or elimination ofcompetitive bidding.
(d) Bid Protections. As discussed in the Encore Bid ProceduresMotion, the offer from Buyer requests a Breakup Fee of $30,000 and anOverbid Requirement which is defined as follows: If there is an initialoverbid it must exceed the Buyer offer plus the Breakup Fee by at least$55,000; and thereafter, each bid must exceed the prior existing bid by at
3 References herein to “APA” shall in each case include the successful overbidder’s form of asset purchaseagreement which shall be submitted to the Court for approval.
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least $25,000. All bidding is conducted under the supervision of the SalesAgent.
(e) Deadlines that Effectively Limit Notice. At this time, Debtorsanticipate that the deadlines will be shortened by the Court in order tomaximize the potential value of the Encore Assets such that they are soldprior to the holiday season. These limited notice circumstances areunavoidable under the circumstances, and mitigated by the general noticebeing provided to all parties in interest.
(f) Interim Arrangements with Proposed Buyer. At this time, Debtorsdo not anticipate any interim arrangements with any proposed buyer, otherthan the post-closing Transition Agreement described above.
(g) Use of Proceeds. Debtors are proposing to release sale proceeds onand after the closing(s) with any Successful Bidder(s) to the PostpetitionLender and Prepetition Lenders (both of which are hereafter referred to as"Lender") which are both represented by Wells Fargo Bank, N.A, as theirrespective agent, without further order of the Bankruptcy Court. Debtorsdo not currently propose a release of proceeds to other creditors without aseparate order of the Court.
(h) Tax Exemption. At this time, Debtors are not requesting to havethe sale declared exempt from taxes under 11 U.S.C. §1146(a). If thatchanges, then Debtors will provide supplemental notice to the relevanttaxing authorities.
(i) Record Retention. At this time, Debtors do not anticipate sellingtheir business records as part of the sale process.
(j) Sale of Avoidance Actions. The Sale will not include the transferof any avoidance actions or related rights.
(k) Relief from Bankruptcy Rules 6004(h). By this Sale Motion,Debtors do seek relief from the fourteen-day stay imposed by Fed. R.Bankr. P. 6004(h) for the reasons noted herein.
The Sale Process4
41. Pursuant to Bankruptcy Rule 6004(f)(1), sales of property outside the ordinary
course of business may be by private sale or auction. Good cause exists to expose the assets to
auction. Debtors and Conway MacKenzie believe that an auction conducted substantially in
4 Nothing in this Encore Sale Motion or the Encore Bid Procedures Motion shall be construed to modify the APAwith Buyer.
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accordance with the Bid Procedures will enable the Debtors to obtain the highest or best offer(s)
for the Encore Assets under the circumstances, thereby maximizing the value of the Debtors’
estates.
Credit Bid(s)
42. Section 363(k) of the Bankruptcy Code states:
At a sale under subsection (b) of this section of property that is subject toa lien that secures an allowed claim, unless the court for cause ordersotherwise the holder of such claim may bid at such sale, and, if theholder of such claim purchases such property, such holder may offsetsuch claim against the purchase price of the property.
Each of the Postpetition Agent and the Prepetition Agent, on behalf of the Postpetition Lenders
and the Prepetition Lenders, respectively, are deemed Qualified Bidders and have the right to
credit bid should they elect to do so. Either or both of the Postpetition Agent and the Prepetition
Agent may credit bid at the Auction, in their discretion, and they otherwise are not required to
comply with the Bid Procedures. However, by this Sale Motion, Debtors are asking that the
Bankruptcy Court deny credit bid rights to any other secured or allegedly secured party.
III. NO PRIOR REQUEST
43. No prior request for the relief sought herein has been requested from this Court or
any other court.
44. Pursuant to Local Rule 9013-2, this motion is verified and is accompanied by a
memorandum of law and proposed order.
45. Pursuant to Local Rule 9013-2, the Debtors give notice that they may, if
necessary, call Pete Richichi, 700 W. 76th Street, Ste. 116, Eden Prairie, MN or Gregory A.
Charleston, of Conway Mackenzie, Inc., 1075 Peachtree Street, Ste. 3675, Atlanta Georgia
30309, to testify at the hearing on the Motion regarding the facts set forth herein.
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WHEREFORE, the Debtors respectfully request the Court enter an Order granting the
requested relief, and granting such other and further relief as is necessary and appropriate in the
circumstances.
Dated: October 26, 2017 e/Robert T. Kugler
Robert T. Kugler (#0194116)Edwin H. Caldie (#0388930)Phillip J. Ashfield (#0388990)Andrew J. Glasnovich (#0398366)STINSON LEONARD STREET LLP50 South Sixth StreetMinneapolis, MN 55402Telephone: 612.335.1500Facsimile: 612.335.1657
COUNSEL FOR THE DEBTORS
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UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF MINNESOTA
In re:
WYNIT DISTRIBUTION, LLC,WD Navarre Distribution, LLC,WD Encore Software, LLC,WD Navarre Holdings, LLC,WD Navarre Digital Services, LLC,WYNIT Holdings, Inc.,WD Navarre Canada, ULC,
Debtors.
JOINTLY ADMINISTERED UNDERBKY 17-42726
BKY 17-42726BKY 17-42728BKY 17-42729BKY 17-32864BKY 17-32865BKY 17-32866BKY 17-32867
MEMORANDUM OF LAW IN SUPPORT OF DEBTORS’ MOTION FOR AN ORDER(I) GRANTING AN EXPEDITED HEARING AND (II) APPROVING THE SALE OF
ASSETS FREE AND CLEAR OF ALL LIENS, INTERESTS, CLAIMS ANDENCUMBRANCES, PURSUANT TO 11 U.S.C. § 363, AND (III) GRANTING OTHER
RELATED RELIEF (WD ENCORE SOFTWARE)
The above-captioned debtors (collectively the "Debtors") submit this memorandum of
law in support of their corresponding motion, in accordance with Local Rule 9013-2(a).
I. BACKGROUND
The facts supporting this memorandum are set forth in the Sale Motion, verified by Pete
Richichi. All capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Sale Motion.
II. EXPEDITED RELIEF
The Debtors request expedited relief on the Sale Motion. Bankruptcy Rule 9006(c)
provides that the Court may reduce the notice period for a motion for cause. Here, cause exists to
grant the Sale Motion on an expedited basis. As described in more detail in the Sale Motion and
in the Declaration of Peter A. Richichi in Support of Chapter 11 Petitions and First Day Motions,
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due to the seasonal nature of Debtors' inventory, the value of the Debtors' estates is fleeting and
time only diminishes the ultimate return to creditors. Approval of the sale on an expedited basis
will allow the Debtors to maximize value to the Debtors' estates and their creditors by facilitating
the best price for Debtors' assets.
III. SALE UNDER 363 GENERALLY
Section 363(b)(1) of the Bankruptcy Code provides: "The Trustee, after notice and a
hearing, may use, sell, or lease, other than in the ordinary course of business, property of the
estate." 11 U.S.C. § 363(b). Section 105(a) of the Bankruptcy Code provides in relevant part:
"The Court may issue any order, process, or judgment that is necessary or appropriate to carry
out the provisions of this title." 11 U.S.C. § 105(a).
A sale of assets of a debtor should be authorized pursuant to Section 363 of the
Bankruptcy Code if a sound business purpose exists for doing so. See, e.g., Fulton State Bank v.
Schipper (In re Schipper), 933 F. 2d 513, 515 (7th Cir. 1991); Committee of Equity Sec. Holders
v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1070 (2d Cir. 1993). The business judgment
rule shields a debtor’s management from judicial second-guessing. In re Farmland Indus., Inc.,
294 B.R. 903, 913 (Bankr. W.D. Mo. 2003) ("'[T]he Code favors the continued operation of a
business by a debtor and a presumption of reasonableness attaches to a Debtor’s management
decisions.'") (quoting In re Johns-Manville Corp., 60 B.R. 612, 615-16 (Bankr. S.D.N.Y. 1986)).
Once the Debtors articulate a valid business justification, "[t]he business judgment rule ‘is a
presumption that in making a business decision the directors of a corporation acted on an
informed basis, in good faith and in the honest belief that the action was in the best interests of
the company.’" In re Integrated Res., Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992) (quoting Smith v.
Van Gorkom, 488 A.2d 858, 872 (Del. 1985)).
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As explained above, the Debtors, in conjunction with their financial advisors, have
determined that a sale of the Encore Assets to the Successful Bidder(s) is the best way to
maximize the value of the Encore Assets in these Bankruptcy Cases. Maximization of asset value
is a sound business purpose, warranting authorization of the sale.
Sale Free of Liens, Interests, Claims and Encumbrances Under 363(f)
Section 363(f) of the Bankruptcy Code provides:
The trustee may sell property under subsection (b) or (c) of this section free andclear of any interest in such property of an entity other than the estate, only if –
(1) applicable nonbankruptcy law permits sale of such property free and clearof such interest;
(2) such entity consents;
(3) such interest is a lien and the price at which such property is to be sold isgreater than the aggregate value of all liens on such property;
(4) such interest is in bona fide dispute; or
(5) such entity could be compelled, in a legal or equitable proceeding, toaccept a money satisfaction of such interest.
Section 363(f) is drafted in the disjunctive. Thus, satisfaction of any of the requirements
enumerated therein will suffice to warrant the Debtors’ sale of the Encore Assets free and clear
of all liens, claims, interests and encumbrances. The Debtors are not aware of any lien, claim,
interest or encumbrance on the Encore Assets other than the liens of the Prepetition Lenders and
Postpetition Lenders. Moreover, if any other lien, claim, interest or encumbrance exists, the
Debtors submit that it is not superior to the Prepetition Lenders and Postpetition Lenders.
Accordingly, the Debtors request that the Encore Assets be transferred to the Successful
Bidder(s) free and clear of all liens, claim, interests, and encumbrances, if the Prepetition
Lenders and Postpetition Lenders consent to the sale.
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IV. GOOD FAITH PURCHASER UNDER 363(M)
Section 363 (m) of the Bankruptcy Code provides:
The reversal or modification on appeal of an authorization under subsection (b) or(c) of this section of a sale or lease of property does not affect the validity of asale or lease under such authorization to an entity that purchased or leased suchproperty in good faith, whether or not such entity knew of the pendency of theappeal, unless such authorization and such sale or lease were stayed pendingappeal.
11 U.S.C. § 363(m). While the Bankruptcy Code does not define "good faith," the Seventh
Circuit in In the Matter of Andy Frain Services, Inc., 798 F.2d 1113 (7th Cir. 1986) held that:
The requirement that a purchaser act in good faith . . . speaks to the integrity ofhis conduct in the course of the sale proceedings. Typically, the misconduct thatwould destroy a purchaser’s good faith status at a judicial sale involves fraud,collusion between the purchaser and other bidders or the trustee, or an attempt totake grossly unfair advantage of other bidders.
798 F.2d at 1125 (emphasis omitted) (quoting In re Rock Indus. Machinery Corp., 572 F.2d
1195, 1198 (7th Cir. 1978) (interpreting Bankruptcy Rule 805, the precursor of section 363(m))).
Neither Buyer nor any of Buyer’s representatives or affiliates is an “insider” of the
Debtors. The Debtors are not aware of any insider who is contemplating being a potential
overbidder. The Debtors are not aware of any fraud, collusion or attempt to take unfair
advantage of other bidders. Additionally, the Purchase Price and consideration for the sale of the
Encore Assets is fair and reasonable, which was determined after the Encore Assets were
exposed to the marketplace. The APA was intensively negotiated at arm’s length with all parties
involved acting in good faith. Based on the foregoing, and the testimony of Buyer to be offered
at the hearing describing its good-faith conduct throughout the sale process, the Debtors submit
that the Court should find that Buyer (or a successful overbidder) constitutes a good faith
purchaser entitled to all of the protections afforded by Section 363(m) of the Bankruptcy Code.
See In re Trism, 328 F.3d 1003, 1006 (8th Cir. 2003).
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V. WAIVER OF 14-DAY FINALITY FOR ORDERS
Bankruptcy Rule 6004(h) provides that an "order authorizing the use, sale, or lease of
property…is stayed until the expiration of fourteen (14) days after entry of the order, unless the
court orders otherwise." Fed. R. Bankr. P. 6004(h). [Bankruptcy Rule 6006(d) further provides
that an "order authorizing the trustee to assign an executory contract or unexpired lease under §
365(f) is stayed until the expiration of fourteen (14) days after the entry of the order, unless the
court orders otherwise." Fed. R. Bankr. P. 6006(d).
In light of the current circumstances and financial condition of the Debtors, the Debtors
believe that in order to maximize value and preserve jobs, the sale of the Encore Assets should
be consummated as soon as practicable. Accordingly, the Debtors request that each Sale Order
be effective immediately upon entry of such order and that the fourteen (14) day stay under
Bankruptcy Rules 6004(h) and 6006(d) be waived.
CONCLUSION
For the foregoing reasons, the Debtors respectfully request that the Court enter the
proposed orders granting the relief requested in the Motion.
Dated: October 26, 2017 e/Robert T. KuglerRobert T. Kugler (#0194116)Edwin H. Caldie (#0388930)Phillip J. Ashfield (#0388990)Andrew J. Glasnovich (#0398366)STINSON LEONARD STREET LLP150 South Fifth Street Suite 2300, Minneapolis,MN 55402Telephone: 612.335.1500Facsimile: 612.335.1657
COUNSEL FOR THE DEBTORS
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CORE/3504319.0002/135589054.4
Exhibits A & B
Pursuant to Local Rule 9013-2(e), a moving party may provide, for service purposes only, asummary of exhibits in excess of 50 pages. Exhibits A & B to this Motion contain the assetpurchase and transition agreement, respectively. The asset purchase agreement contains theterms and conditions to effectuate the sale of Encore Assets. The terms of the asset purchaseagreement are more fully summarized in the motion. The transition agreement outlines the termsand conditions by which the Buyer will utilize certain employees, space, equipment, records, andrelated assets of the Debtors. The terms of the transition agreement are outlined in the agreement.The full exhibits and this summary were attached to the original motion filed with the clerk ofthe bankruptcy court. Parties may request a copy of Exhibits A & B in writing by addressing:
Attn:Ed Caldie
Stinson Leonard Street50 South Sixth Street, Ste. 2600
Minneapolis, MN [email protected]
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CORE/3504319.0002/135589054.4
Exhibit A
[Asset Purchase Agreement – see attached]
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CORE/3504319.0002/135589054.4
Exhibit B
[Transition Agreement – see attached]
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CORE/3504319.0002/135589054.4
Exhibit C
[Proposed Order – to be filed as a supplement to this Motion prior to the hearing]
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated as of October 26, 2017 is made by and between WD Encore Software, LLC, a New York limited liability company, and WD Navarre Holdings, LLC, a New York limited liability company (collectively, "Seller"), and Avanquest North America LLC, a California limited liability company ("Buyer").
RECITALS
A. Seller is engaged in the business of publishing the Encore Software, which it distributes through retail and other channels (the "Encore Software Business").
B. Seller and certain related parties, including Wynit Distribution, LLC ("Wynit Distribution"), Seller's ultimate parent company, have filed voluntary petitions (the "Bankruptcy Cases") under Chapter 11 of Title 11 of the United States Code, as amended, and the rules and regulations promulgated thereunder (the "Bankruptcy Code").
C. The Bankruptcy Cases are pending as Case Nos. 17-42729 and 17-32864, which are being jointly administered with Wynit Distribution's bankruptcy case (Case No. 17-42726) in the United States Bankruptcy Court for the District of Minnesota (the "Bankruptcy Court"). No trustee has been appointed in the Bankruptcy Case and Seller is operating as a debtor-in-possession under the Bankruptcy Code.
D. WD Navarre Holdings, LLC is a party to this Agreement as Seller solely with respect to certain registered trademarks it holds related to the Encore Software Business, which are identified in the schedules of assets to be sold to Buyer hereunder.
E. Seller desires to sell to Buyer substantially all of Seller's assets, and Buyer desires to purchase from Seller such assets, on the terms and subject to the conditions set forth in this Agreement and in accordance with the Bankruptcy Code, including Sections 363 and 365 thereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, agree as follows:
ARTICLE I CERTAIN DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following terms have the following meanings:
"Action" means any claim, action, injunction, complaint, counterclaim, joinder, investigation, suit, order, notice of violation, arbitration, audit or other proceeding, whether civil or criminal, in law or in equity, whether or not before any court, arbitrator or other Governmental Authority, by any Governmental Authority or by any other Person.
"Affiliate" means any Person that directly, or indirectly through one of more intermediaries, controls or is controlled by or is under common control with the Person specified. Without limiting the foregoing and for avoidance of doubt, all direct and indirect parents or
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subsidiaries of Seller shall be Affiliates of Seller, whether or not involved in the Bankruptcy Case.
"Applicable Law" means, collectively, all foreign, federal, state, provincial, local or municipal laws, statutes, ordinances, regulations, common law and rules, and all orders, writs, injunctions, awards, judgments and decrees applicable to Seller or any of its assets, properties or business.
"Benefit Plan" means a benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and every other written or oral contract, arrangement, program or policy concerning employment services, severance benefits, life insurance coverage, medical benefits, workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, deferred compensation, profit sharing, bonuses, stock options, incentive compensation, post-retirement medical benefits or other similar benefits, that is or was at any time during the last five years maintained, administered or contributed to by Seller or any of its Affiliates for the benefit of any employee or former employee of Seller or of the Encore Software Business.
"Contract" means any agreement, evidence of indebtedness, bond, commitment, indemnity, indenture, instrument, lease, license, mortgage, statement of work, security agreement or other contract, commitment, undertaking or understanding, whether or not in writing.
"Cure Order" means an Order of the Bankruptcy Court, in form and substance acceptable to Buyer in its sole and absolute discretion, specifying the Cure Costs.
"Customer Data" means all of the information, including any related database, collected or held by Seller regarding customers and distribution partners of the Encore Software Business, including customer name, physical address, email address and product purchasing and/or registration history.
"Documentation" means, collectively, programmers' notes or logs, source code annotations, user guides, manuals, passwords, credentials, computer programs, white papers, proprietary information and invention agreements, non-disclosure agreements, assignment agreements, instructions, software architecture designs, layouts, any know-how, and any other designs, plans, drawings, documentation, materials, supplier lists, customer and prospect lists, software source code and object code, net lists, photographs, development tools, blueprints, media, memoranda, electronic mail and records that are primarily related to or otherwise necessary for the Encore Software Business or use and exploitation of any products of Seller, whether in tangible or intangible form, whether owned by Seller or held by Seller under any licenses or sublicenses or similar grants of rights.
"Encore Software" means the software titles set forth on Schedule 1.1, together with any other software published or distributed by Seller and any software titles published or distributed by Seller that are based on the foregoing.
"Final Sale Order" shall mean the Sale Order at such time as (i) the operation or effect of such Order is not stayed and (ii) no appeal or motion to reconsider such Order has been filed or is pending that alleges the Buyer is not a good faith purchaser.
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"Governmental Authority" means any authority, agency, commission, official, court, tribunal, arbitrator or other instrumentality of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision.
"Governmental Authorization" means any Consent issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any legal requirement, as well as all Permits that are held by Seller and necessary and/or legally required to conduct the Encore Software Business and that are used or held for use by Seller in connection with the Encore Software Business.
"Intellectual Property" means, collectively, all worldwide industrial and intellectual property rights, including patents, patent applications, patent rights, trademarks, trademark registrations and applications therefor, trade dress rights, trade names, service marks, service mark registrations and applications therefor, Internet domain names, Internet and World Wide Web URLs or addresses, copyrights, copyright registrations and applications therefor, franchises, licenses, ideas, inventions, trade secrets, know-how, data and metadata, customer and prospect lists, Personal Data, supplier lists, sales pipeline, proprietary processes and formulae, technology, software source code and object code, algorithms, net lists, architectures, structures, screen displays, photographs, images, layouts, names, characters, voices, likenesses, story lines, text, dialogue, settings, design and plot elements, artwork, music, sound recordings, graphics, literary and dramatic works, development tools, designs, blueprints, specifications, technical drawings (or similar information in electronic format), moral rights (including rights of paternity or integrity, rights to claim authorship or to object to any distortion, mutilation or other derogatory action in relation to a work of authorship), and all documentation and media constituting, describing or relating to the foregoing, including manuals, programmers' notes, memoranda and records and all goodwill associated therewith.
"Liabilities" means all indebtedness, obligations and other liabilities of any kind of a Person (whether absolute or contingent, accrued or unaccrued, known or unknown, fixed or otherwise, due or to become due, matured or unmatured, liquidated or unliquidated).
"Liens" means any claim whatsoever (including any secured, unsecured, contingent or disputed claims), and any lien, pledge, option, charge, security interest, easement, deed of trust, mortgage, conditional sales agreement, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease, other than (a) liens on property underlying any real property lease that is included in the Purchased Assets; and (b) liens for Taxes not yet delinquent or which are being contested in good faith through appropriate proceedings.
"Order" means any writ, judgment, decree (including consent decrees), injunction or similar order of any Governmental Authority (in each such case whether preliminary or final).
"Permits" all permits, licenses, variances, clearances, consents, commissions, franchises, exemptions, orders and approvals from Governmental Authorities.
"Person" means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental Authority.
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"Personal Data" means personal information about an identifiable individual (including a natural person's name, street address, telephone number, e-mail address, photograph, social security number, driver's license number, passport number or customer or account number, or any other piece of information that allows the identification of a natural person, other than their business contact information when used or disclosed for the purpose of contacting such individual in that individual's capacity as an employee or an official of an organization and for no other purpose), and includes all personal information disclosed or conveyed to Buyer or any of its representatives or agents by or on behalf of Seller as a result of or in conjunction with the Transactions.
"Sale Order" means an Order of the Bankruptcy Court, in form and substance acceptable to Buyer in its sole and absolute discretion, pursuant to the Bankruptcy Code, including Sections 363 and 365 thereof, authorizing and approving, among other things (a) the sale of the Purchased Assets to Buyer on the terms and conditions set forth herein, free and clear of all Liens to the fullest extent permissible under the Bankruptcy Code, (b) the assumption and assignment of the Assumed Liabilities and (c) the assumption by and assignment to Buyer of the Assumed Contracts.
"Tax" (and, with correlative meaning, "Taxes") means (a) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, capital, use, ad valorem, transfer, franchise, profits, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom duty or other tax, governmental fee or other like assessment or charge, pension plan contributions, health plan contributions, employment insurance contributions, parental insurance premiums, worker's compensation and deductions at source, together with any interest or any penalty, addition to tax or additional amount imposed or required to be withheld by any governmental entity responsible for the imposition or withholding of any such tax (domestic or foreign), (b) any liability for the payment of any amounts of the type described in clause (a) of this sentence as a result of being a member of an affiliated, consolidated, combined, unitary or aggregate group for any taxable period, and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) of this sentence as a result of being a transferee of or successor to any Person or all liability of Seller for Taxes for periods ending on or prior to the Closing Date of any other Person pursuant to any contractual agreement.
"Tax Return" means any return (including any information return), report, statement, schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any applicable Law or other legal requirement relating to any Tax, including any schedule, exhibit or other attachment thereto.
Section 1.2 Other Definitions. Each of the following terms is defined in the section of this Agreement set forth opposite such term:
Term Section Agreement Preamble Assumed Contracts Section 2.1(b)
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Assumed Liabilities Section 2.3 Bankruptcy Cases Recital B Bankruptcy Code Recital B Bankruptcy Court Recital C Bidding Procedures Order Section 10.2(a) Bill of Sale Section 2.6 Break-Up Fee Section 10.2(b) Buyer Preamble Cash Consideration Section 3.1 Closing Section 4.1 Closing Date Section 4.1 Consent Section 5.3 Cure Costs Section 10.1 Deposit Section 3.2(a) Disclosure Schedule Article V Encore Software Business Recital A Excess Cure Costs Section 3.2(b) Excluded Assets Section 2.2 Executory Contracts Section 2.5 Purchased Assets Section 2.1 Purchased Deposits Section 2.1(f) Purchase Price Section 3.1 Seller Preamble Sublicense Period Section 7.10 Transactions Section 2.4 Transferred Intellectual Property Section 2.1(c) Transition Services Agreement Section 4.2(b) Wynit Distribution Recital B
Section 1.3 Construction. Unless the context of this Agreement otherwise clearly requires, (a) references to the plural include the singular, and references to the singular include the plural; (b) references to one gender include the other gender; (c) the words "include," "includes" and "including" do not limit the preceding terms or words and shall be deemed to be followed by the words "without limitation"; (d) the terms "hereof," "herein," "hereunder," "hereto" and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (e) the terms "day" and "days" mean and refer to calendar day(s); and (f) the terms "year" and "years" mean and refer to calendar year(s). Unless otherwise set forth herein, references in this Agreement to (i) any document, instrument or agreement (including this Agreement) (A) include and incorporate all exhibits, schedules and other attachments thereto, (B) include all documents, instruments or agreements issued or executed in replacement thereof and (C) mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified or supplemented from time to time in accordance with its terms and in effect at any given time, (ii) a particular Law means such Law as amended, modified, supplemented or succeeded, prior to the Closing, and (iii) accounting terms not specifically defined herein have the meanings applied under GAAP. All Article, Section, Exhibit and Schedule references herein are to Articles, Sections, Exhibits and Schedules of this Agreement, unless otherwise specified. In the event an ambiguity or question of intent or interpretation arises under this Agreement, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party as a result of the authorship or drafting of any provision of this Agreement.
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ARTICLE II PURCHASE AND SALE OF ASSETS
Section 2.1 Purchased Assets. On the terms and subject to the conditions set forth in this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from Seller, free and clear of all Liens, to the fullest extent permissible under Section 363(f) of the Bankruptcy Code, all of Seller's right, title and interest in and to the assets of Seller (other than the Excluded Assets) used or held for use by Seller in connection with the operation of the Encore Software Business, of every kind and description and wherever located (collectively, the "Purchased Assets"):
(a) all inventory of the Encore Software Business set forth on Schedule 2.1(a), which includes (i) finished goods, (ii) work in process, raw materials, operating supplies, packaging and shipping materials, and (iii) replacement, spare and component parts;
(b) all of Seller's rights under any Executory Contract expressly assumed by Buyer pursuant to Section 2.5 (the "Assumed Contracts");
(c) all of Seller's right, title and interest in, to and under all of the Intellectual Property used or held for use by Seller in connection with the Encore Software Business and all related assets expressly set forth on Schedule 2.1(c) (collectively, the "Transferred Intellectual Property"), including all Documentation relating to, constituting or describing the Transferred Intellectual Property and all rights thereunder;
(d) all Customer Data and other data, records and other materials and Documentation, whether in tangible or intangible form, owned or held by Seller and used or intended to be used for or in connection with the Encore Software Business;
(e) all personal property owned or held by Seller, including the personal computers, servers, hardware and other tangible property expressly set forth on Schedule 2.1(e);
(f) all deposits and prepaid charges and expenses (including prepaid royalties, customer deposits and security deposits for rent, utilities and otherwise) related to the Assumed Contracts and other Purchased Assets expressly set forth on Schedule 2.1(f) (the "Purchased Deposits");
(g) to the extent assignable, all Governmental Authorizations and all pending applications therefor or renewals thereof, in each case with respect to the Encore Software Business; and
(h) all other or additional rights, privileges and interests associated with the Purchased Assets that are used or intended for use in connection with, or that are necessary to the continued operation of, the Encore Software Business.
Section 2.2 Excluded Assets. The Purchased Assets shall not include, and Seller shall retain, all of its existing right, title and interest in, to and under the Excluded Assets. For all purposes of and under this Agreement, "Excluded Assets" means all of the assets of Seller other than the Purchased Assets, including:
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(a) all of the rights arising under those Contracts that are not Assumed Contracts and are not specifically included in the Assumed Liabilities;
(b) all of Seller's cash, cash equivalents and bank accounts;
(c) all accounts receivable, advances, letters of credit and other rights to receive payments, in each case arising prior to the Closing Date;
(d) all rights of Seller relating to deposits and prepaid expenses other than the Purchased Deposits;
(e) all assets sold to a third party pursuant to an Order of the Bankruptcy Court.
(f) all of Seller's intercompany claims;
(g) all of Seller's minute books and similar organizational records, and its Tax Returns (and any notes, work papers, files or documents relating thereto);
(h) all of Seller's insurance policies and all rights to claims and proceeds thereunder, except to the extent pertaining to or arising out of the Encore Software Business or the Purchased Assets;
(i) all Benefit Plans and any trusts or other assets attributable thereto, and all associated records;
(j) all of Seller's rights under this Agreement and the consideration to be paid to Seller hereunder;
(k) all refunds, including all Tax refunds;
(1) all litigation claims and specifically any settlement recovery due and payable prior to the Closing Date (but excluding any settlement recovery due and payable on or after the Closing Date and the right to enforce the terms of the settlement agreement against third parties) related to WD Encore Software, LLC v. The Software Mackiev Company, No. 1:16-cv-11490 (D. Mass.);
(m) any claims, causes of action, disputes or litigation, whether asserted or unasserted, known or unknown, of or affecting Seller or its rights and obligations, other than with respect to the Purchased Assets, but, in no event, any claims, rights, defenses, or other causes of action arising under. Chapter 5 of the Bankruptcy Code, including under Bankruptcy Code Sections 502, 510, 541, 542, 543, 544, 545, 547, 548, 549, 550, 551 or 553, or under similar or related state or federal statutes and common law, including state fraudulent transfer laws;
(n) all consignment inventory, except for consignment inventory that is included within the Purchased Assets pursuant to the express terms of Section 2.1;
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(o) all claims, causes of action, disputes or litigation, whether asserted or unasserted, known or unknown, of or affecting current or former directors or officers of Seller or its Affiliates; and
(p) any other assets set forth on Schedule 2.2(p).
Section 2.3 Assumed Liabilities. Buyer shall assume no Liabilities of Seller or any of its Affiliates, other than the Liabilities arising under and with respect to: (i) the Assumed Contracts after the Closing Date; (ii) Excess Cure Costs provided in Section 3.2(b); and (iii) such Liabilities set forth in the Transition Services Agreement (the "Assumed Liabilities").
Section 2.4 Excluded Liabilities. Other than the Assumed Liabilities, Buyer shall not assume pursuant to this Agreement or the transactions contemplated hereby (the "Transactions"), or otherwise, any Liabilities of Seller or any of its Affiliates, and Seller and its Affiliates shall retain all such Liabilities, including any Liabilities of Seller or any of its Affiliates (a) arising from the breach or infringement or alleged breach or alleged infringement of third party intellectual property rights as a result of the conduct of the Encore Software Business or the use of the Seller IP prior to the Closing Date; (b) relating to any current or former employees, consultants, contractors or advisors of Seller or arising under or relating to the Benefit Plans; (c) for any Taxes, including any and all pre-closing Taxes and Taxes applicable to Seller or any of its Affiliates resulting from the consummation of the Transactions; (d) related to any litigation involving the Purchased Assets arising as a result of the conduct of the Encore Software Business or use of any Purchased Assets by Seller or its Affiliates prior to the Closing; (e) for accounts payable and accrued Liabilities of Seller as of the Closing, including royalties under the Assumed Contracts that have been incurred in connection with pre-Closing periods or events but that have not yet been paid by Seller; and (f) any other Liabilities, other than under. Assumed Contracts, relating to the Purchased Assets or arising out of the operation or ownership of the Encore Software Business (including the employment of the employees of the Encore Software Business) prior to the Closing Date, regardless of when such Liabilities are known by a Person.
Section 2.5 Assumption/Rejection of Executory Contracts. Buyer may from time to time within 90 days after the Closing Date add to or remove from the Purchased Assets any executory Contract of Seller, which Contracts are set forth on Schedule 2.5 (the "Executory Contracts"), by providing written notice thereof to Seller and the party to the Executory Contract, in accordance with the Sale Order. Such designations shall not modify the Purchase Price. Buyer will be responsible in accordance with the Cure Orders for the Cure Costs related to Executory Contracts assumed by Buyer hereunder.
Section 2.6 Transfer of Purchased Assets and Assumption of Contracts. The Purchased Assets shall be sold, conveyed, transferred, assigned and delivered, and the Assumed Contracts shall be assumed, pursuant to a bill of sale and assignment and assumption agreement in substantially the form of Exhibit A attached hereto (the "Bill of Sale"), or pursuant to other instruments in such form as is necessary to effect a conveyance of the Purchased Assets and the assumption of the Assumed Contracts in the jurisdictions in which such transfers and assumptions are to be made, and which in all instances shall be reasonably satisfactory to Buyer and Seller, each to be executed by Seller and/or Buyer, as appropriate.
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Section 2.7 "AS IS" TRANSACTION. BUYER HEREBY ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY MATTER RELATING TO THE BUSINESS OR TO THE PURCHASED ASSETS. 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. IF THE CLOSING OCCURS, BUYER WILL ACCEPT THE PURCHASED ASSETS ON THE CLOSING DATE "AS IS," "WHERE IS," SUBJECT TO THE PROVISIONS OF THIS AGREEMENT AND THE SALE ORDER PROVIDING, AMONG OTHER THINGS, THAT THE SALE OF THE PURCHASED ASSETS IS FREE AND CLEAR OF ALL LIENS.
ARTICLE III CONSIDERATION
Section 3.1 Purchase Price. Subject to the limitations and restrictions contained in this Agreement, the aggregate consideration for Seller's sale, transfer, conveyance, assignment and delivery of the Purchased Assets to Buyer (the "Purchase Price") shall be (a) $1,025,000 payable in cash (the "Cash Consideration") plus (b) the assumption by Buyer of the Assumed Liabilities.
Section 3.2 Delivery of Cash Consideration.
(a) Deposit. Within two business days of the execution of this Agreement, Buyer will deposit with Seller $50,000 in cash (the "Deposit"). The Deposit shall be refundable until such time as the Sale Order has become a Final Sale Order; provided, however, that Seller shall in all events return the Deposit to Buyer promptly following November 10, 2017 if the Closing has not occurred by such date. If the Closing has occurred as provided herein on or before November 10, 2017, then the Deposit shall be credited against the Cash Consideration and deemed paid by Buyer to Seller on the Closing Date.
(b) Closing Date Delivery. On the Closing Date, Buyer shall deliver to Seller, by wire transfer of immediately available funds in accordance with wire transfer instructions provided by Seller to Buyer not later than the date on which the Sale Order is entered by the Bankruptcy Court, an amount equal to $675,000 of the Purchase Price shall be paid to Seller. On the Closing Date, Buyer shall provide Seller with a deposit in the amount equal to $300,000 of the Purchase Price, by wire transfer of immediately available funds to be held in an escrow account acceptable to Buyer and Seller, subject to an escrow agreement acceptable to Buyer and Seller, which amount shall be reserved for payment and satisfaction of Cure Costs as such Cure Costs are established in the Cure Order or such other Orders of the Bankruptcy Court. To the extent possible, Buyer will wire transfer the closing cash on November 9, 2017 to the Agent for the Pre-Petition and Post-Petition lenders to be held in trust pending a Closing in accordance with this Agreement. If for any reason the Closing does not occur by midnight on November 10th (prevailing Central Time), then the cash shall be wired to Buyer on the next business day. In the event that the total Cure Costs are less than $300,000, Buyer shall promptly pay to Seller by wire transfer of immediately available funds in accordance with wire transfer instructions provided by Seller to Buyer the difference between $300,000 minus the total Cure Costs. In the
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event that the total Cure Costs exceed $300,000, Buyer assumes such amounts in excess of $300,000 as an Assumed Liability and shall pay such excess Cure Costs ("Excess Cure Costs").
Section 3.3 Allocation of Purchase Price. The Purchase Price shall be allocated among the Purchased Assets in a manner prescribed by Buyer by notice given to Seller not more than 90 days after the Closing Date. Each of Buyer and Seller will (and will cause its Affiliates to) (a) file all Tax Returns (including, as applicable, Internal Revenue Service Form 8594) in a manner consistent in all respects with Buyer's allocation and (b) not take (and will cause its Affiliates not to take) any position that is inconsistent with Buyer's allocation. Buyer and Seller acknowledge that such allocation shall be without prejudice to the valuation ascribed to specific assets for federal bankruptcy purposes; provided, however, that any such valuation of specific assets shall be limited in scope, extent and applicability to that which is necessary to achieve confirmation by the Bankruptcy Court of Seller's (including its Affiliates) plan of reorganization in connection with the Bankruptcy Cases.
ARTICLE IV THE CLOSING
Section 4.1 Closing. Subject to the earlier termination of this Agreement pursuant to Article IX, the closing of the Transactions contemplated by this Agreement (the "Closing") shall take place by electronic delivery of executed versions of all documents required to be delivered at the Closing pursuant to this Agreement as soon as practicable following (but no later than three Business Days after) the satisfaction or waiver (to the extent permitted by Applicable Law) of the conditions set forth in Article VIII, or at such other time that the parties hereto agree in writing (the actual date of the Closing, the "Closing Date"). Within the earlier to occur of (i) 10 days of the Closing Date or (ii) prior to any lease renewal period with respect to Seller facilities where Purchased Assets are located (but only if Seller has notified Buyer in writing prior to the Closing Date of any such earlier lease renewal period), Buyer, at its sole cost and expense, will cause all of Seller's inventory that is included within the Purchased Assets to be removed from Seller's warehouses and transferred to a location designated by Buyer.
Section 4.2 Seller's Deliveries at Closing. At the Closing, Seller will deliver or cause to be delivered to Buyer all of the Purchased Assets and the following documents:
(a) the Bill of Sale duly executed by Seller;
(b) a transition services agreement, in substantially the form of Exhibit B, duly executed by Seller (the "Transition Services Agreement");
(c) a trademark assignment, in substantially the form of Exhibit C, and such other Intellectual Property assignments (if any) in forms acceptable to Buyer, duly executed by Seller, as necessary to convey to Buyer all of Seller's right, title, and interest in and to the Transferred Intellectual Property;
(d) all passwords and credentials, including administrator credentials, required to afford Buyer full access to all of Seller's computer and other systems; and
(e) such other documents or instruments as may be reasonably required by Buyer to consummate the Closing or to effect the conveyance to Buyer of good and marketable
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title to the Purchased Assets, all in accordance with and subject to the terms and conditions of this Agreement.
Section 4.3 . Buyer's Closing Deliveries. At the Closing, Buyer will deliver or cause to be delivered to Seller, in addition to the portion of the Purchase Price specified in Section 3.3(b), the following:
(a) the Bill of Sale, duly executed by Buyer;
(b) a certified copy of the resolutions adopted by the managers and/or member of Buyer, as appropriate; and
(c) such other documents or instruments as may be reasonably required by Seller to consummate the Closing or to effect the Transactions, all in accordance with and subject to the terms and conditions of this Agreement.
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement and to consummate the Transactions, Seller represents and warrants to Buyer that the statements contained in this Article V are correct and complete as of the date hereof and the Closing Date, except as set forth in the disclosure schedule attached to this Agreement (the "Disclosure Schedule"). The Disclosure Schedule will be arranged in sections corresponding to the lettered and numbered sections and subsections contained in this Article V.
Section 5.1 Organization. Seller is validly existing and in good standing under the laws of the State of New York and, to Seller's knowledge, in each other jurisdiction where the operation of the Business requires such qualification.
Section 5.2 Authority Relative to this Agreement. Subject to the Sale Order having been entered by the Bankruptcy Court and having become a Final Sale Order, this Agreement has been duly and validly authorized, executed and delivered by Seller and constitutes a valid and binding agreement of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium, and other laws affecting creditors' rights generally from time to time in effect and subject to general equitable principles.
Section 5.3 Consents and Approvals. Other than Bankruptcy Court approval, no consent, approval, authorization, waiver, declaration, filing or registration from or with any Governmental Authority or other Person (each, a "Consent") is required to be made or obtained in connection with the execution, delivery and performance of this Agreement by Seller and the consummation of the Transactions.
Section 5.4 No Violations. Neither the execution, delivery or performance of this Agreement by Seller, nor the consummation the Transactions, will, to Seller's knowledge, (a) violate any Order applicable to Seller or its properties or assets, or (b) cause the suspension or revocation of any Permit required to conduct the Business as currently conducted.
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Section 5.5 Title to Purchased Assets. Seller owns good and valid title to all of the Purchased Assets, free and clear of all Liens. Upon the Sale Order having been entered by the Bankruptcy Court and in accordance with the terms thereof and the Bankruptcy Code, Seller (a) shall have the power and right to sell, assign, transfer and deliver to Buyer the Purchased Assets and (b) on the Closing Date shall sell, assign, transfer and deliver to Buyer the Purchased Assets free and clear of all Liens (with all such Liens on the Purchased Assets attaching to the Purchase Price received by Seller.
Section 5.6 Contracts. True and complete copies of each Assumed Contract (or written summaries of the terms of any oral Assumed Contract) have been made available to Buyer.
Section 5.7 Subsidiaries and Investments. Seller does not, directly or indirectly, own of record or beneficially any outstanding voting securities or other equity interests of any other Person.
Section 5.8 Litigation. Except for the Bankruptcy Case, to Seller's knowledge, there is no material Action pending, threatened or anticipated in connection with the Transactions, the Encore Software Business or the Purchased Assets.
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement and to consummate the Transactions, Buyer represents and warrants to Seller and agrees as follows:
Section 6.1 Organization. Buyer is a limited liability company validly existing and in good standing under the Laws of California.
Section 6.2 Authority Relative to this Agreement. Buyer has the requisite limited liability company power and authority to enter into this Agreement and to carry out its obligations hereunder. This Agreement has been duly and validly executed and delivered by Buyer and constitutes a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other Applicable Laws affecting creditors' rights generally from time to time in effect and subject to general equitable principles.
Section 6.3 Consents and Approvals. Except as required by the Bankruptcy Court, no Consents are required to be obtained by Buyer in connection with its execution, delivery and performance of this Agreement.
Section 6.4 No Violations. Neither the execution, delivery or performance of this Agreement by Buyer, nor the consummation by Buyer of the Transactions, will (a) conflict with or result in any breach of any provisions of the Articles of Organization or limited liability company operating agreement of Buyer, or (b) violate any Order applicable to Buyer or its properties or assets, except for conflicts or violations that could not reasonably be expected to have a material adverse effect on Buyer's ability to consummate the Transactions.
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Section 6.5 Availability of Funds. Buyer has available cash on hand or funds available pursuant to one or more written financing arrangements sufficient, in the aggregate, for the payment of the Purchase Price.
Section 6.6 Good Faith and Full Disclosure. Prior to Bankruptcy Court approval of this Agreement and the Transactions, Buyer will have disclosed to the Bankruptcy Court all material facts relating to this Agreement. There is no collusion pertaining to this Agreement and the Transactions. Buyer is a good faith purchaser within the meaning of 11 U.S.C. § 363(m). Buyer has no agreements, understandings or contracts with, and has not had any negotiations with, any other bidder with respect to the Purchased Assets. To the best of Buyer's knowledge, there is no basis for the Bankruptcy Court's refusal to approve this Agreement or for the Transactions to be reversed or modified.
Section 6.7 Obligation to Close. Buyer will take or cause to be taken all actions necessary or advisable to consummate the Transactions, including the purchase and sale of the Purchased Assets, and to ensure that as of the Closing Date Buyer will not be under any restriction that will delay the timely consummation of the Transactions.
ARTICLE VII COVENANTS
Section 7.1 Access and Information. Seller shall afford to Buyer and its financial advisors, legal counsel, accountants, consultants, financing sources and other authorized representatives reasonable access during normal business hours throughout the period prior to the Closing to all books and records, assets and properties, and personnel of Seller that pertain to the Purchased Assets or the Assumed Liabilities and, during such period, shall furnish as promptly as practicable to Buyer any and all such information as Buyer may reasonably request in connection with the Purchased Assets or the Assumed Liabilities (including copies of the Assumed Contracts and any books and records of Seller).
Section 7.2 Further Assurances. After the Closing Date, Seller and Buyer will each use all commercially reasonable efforts to execute and deliver such other instruments of conveyance, transfer or assumption, as the case may be, and take such other actions, as may be reasonably requested to carry out the purposes and intent of this Agreement and to effect the Transactions.
Section 7.3 Third Party Consents. To the extent that Seller's rights under any Purchased Asset may not be assigned to Buyer without the Consent of another Person which has not been obtained, this Agreement shall not constitute an agreement to assign such rights if an attempted assignment would constitute a breach thereof or be unlawful.
Section 7.4 Payments Post-Closing. If, following the Closing Date, Seller receives any payment or other proceeds, any portion of which relates to an obligation that arose on or after the Closing Date with respect to any of the Purchased Assets or Assumed Contracts, Seller shall promptly remit to Buyer such portion of any such payments. If, following the Closing Date, Buyer receives any payment or other proceeds, any portion of which relates to an obligation that arose prior to the Closing Date with respect to any of the Purchased Assets or Assumed Contracts, Buyer shall promptly remit to Seller such portion of any such payments.
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Section 7.5 Transfer Taxes. All sales, use, registration and other Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other documents and agreements contemplated shall be borne and paid by Buyer when due. Buyer shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Seller shall reasonably cooperate with respect thereto as necessary).
Section 7.6 Communications to Retailers and Other Customers. Prior to the Closing, the parties will agree on a joint communication plan pursuant to which retailers and other customers of the Encore Software Business will be notified of the Transactions and related matters. Seller will cooperate with Buyd, as reasonably requested by Buyer, in implementing the communication plan on and after the Closing Date.
Section 7.7 Transition Period for Executory Contracts. As of the Closing Date and until the first to occur of (i) the 90th day following the Closing Date and (ii) the date on which a specific Executory Contract is assumed and assigned or rejected as provided in this Agreement and the Sale Order, Seller shall sublicense to Buyer each Executory Contract. During the term of the foregoing sublicense (the "Sublicense Period"), Buyer shall administer all such Contracts and shall be entitled to all of the rights and benefits thereunder (including the right to collect and retain the gross revenues accruing thereunder during the Sublicense Period), and shall also be subject to all of the duties and obligations thereunder (including the obligation to pay all royalties, fees and other amounts incurred thereunder during the Sublicense Period).
ARTICLE VIII CONDITIONS PRECEDENT TO CLOSING
Section 8.1 Conditions Precedent to Obligation of Seller and Buyer. The respective obligations of each party to effect the transactions contemplated by this Agreement shall be subject to the satisfaction of the following conditions:
(a) the Sale Order shall have been entered by the Bankruptcy Court, shall not then be stayed and shall not have been reversed, modified or amended by any Order of a court with jurisdiction to do so; and
(b) no action or injunction shall be pending or threatened by any party, including any Governmental Authority, that if successful would prevent the consummation of the transactions contemplated by this Agreement.
Section 8.2 Conditions Precedent to Obligation of Seller. The obligation of Seller to effect the Transactions shall be subject to the satisfaction or waiver at or prior to the Closing Date of the following additional conditions:
(a) Buyer shall have performed in all material respects its covenants and obligations under this Agreement required to be performed by Buyer at or prior to the Closing Date, and the representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the Closing Date as if made at and as of such date, except as otherwise contemplated by this Agreement; and
(b) Buyer shall have delivered each agreement or instrument specified in Section 4.3.
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Section 8.3 Conditions Precedent to Obligation of Buyer. The obligation of Buyer to effect the Transactions shall be subject to the satisfaction or waiver at or prior to the Closing Date of the following additional conditions:
(a) Between the date of execution of this Agreement and the first to occur of the Closing or the termination of this Agreement, Seller operated the Encore Software Business in substantially the same manner it operated such business since the commencement of the Bankruptcy Case, consistent with the Bankruptcy Code and Orders of the Bankruptcy Court, and used reasonable efforts to preserve its relationships with and the goodwill of its customers and suppliers in a manner so as to preserve the value of the Purchased Assets;
(b) Seller shall have performed in all material respects all of its covenants and obligations under this Agreement required to be performed by Seller at or prior to the Closing Date and the representations and warranties of Seller contained in this Agreement shall be true and correct in all material respects as of the Closing Date as if made at and as of such date;
(c) Seller shall have delivered each agreement or instrument specified in Section 4.2, in form and substance reasonably satisfactory to Buyer;
(d) Seller shall have delivered Schedule 2.2(p), in form and substance satisfactory to Buyer;
(e) Seller and Buyer shall have mutually agreed on the fee amounts to be set forth in Schedule A to the Transition Services Agreement;
(f) Seller shall have delivered to Buyer a certificate of an officer or other authorized person of Seller certifying that to such person's knowledge, Seller (i) is in compliance in all material respects with all Applicable Laws related to the operation of the Encore Software Business or the use or ownership of the Purchased Assets and (ii) has not received any notice of Intellectual Property infringement claims;
(g) the Bankruptcy Court has entered a Bidding Procedures Order reasonably acceptable to Buyer and Buyer has been determined to be the successful bidder thereunder;
(h) the .Bankruptcy Court has entered a Cure Order reasonably acceptable to Buyer; and
(i) there shall not be in effect any temporary restraining, preliminary or permanent injunction or other Order or other legal or regulatory action issued by a Governmental Authority restraining, enjoining or otherwise prohibiting the consummation of the Transactions.
ARTICLE IX TERMINATION
Section 9.1 Termination. This Agreement may be terminated: (a) by the mutual written agreement of Seller and Buyer at any time prior to the Closing Date; (b) by either Seller or Buyer if the Bankruptcy Court approves a Person other than Buyer as the successful bidder for the Purchased Assets and Buyer is not a back-up bidder; (c) by Buyer if (i) the Bankruptcy Court denies approval of the bidding procedures approved by Buyer, including the Break-up Fee, (ii)
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Seller accepts any bid for the Purchased Assets other than from Buyer, or otherwise enters into any agreement(s) to sell, transfer or assign the Purchased Assets (whether through an asset sale or sale of stock or other securities of Seller or of any of Seller's direct or indirect parent companies or subsidiaries or other business combination involving Seller) to any Person other than Buyer, (iii) if any of the conditions set forth in Section 8.1 and Section 8.3 or any of the covenants set forth in Section 7.1, Section 7.2 and Section 7.7 shall not have been satisfied by the end of the business day on November 9, 2017, or by such earlier date expressly specified in such conditions or such covenants, and shall not have been waived by Buyer; or (d) by Seller if any of the conditions set forth in Section 8.1 or Section 8.2 shall not have been satisfied by the end of the business day on November 9, 2017.
Section 9.2 Effect of Termination. If this Agreement is validly terminated pursuant to Section 9.1, this Agreement will immediately become null and void, and there will be no liability or obligation on the part of Seller, Buyer or their respective Affiliates (or any of their respective officers, directors, employees, agents or other Representatives), except that the provisions of this Agreement with respect to the Break-Up Fee and expenses of the parties will continue to apply following any such termination.
Section 9.3 Return of Deposit. Seller shall return the Deposit to Buyer as provided in Section 3.3(a), and in all events no later than one business day following (a) the termination of this Agreement in accordance with Section 9.1, or (b) the failure by Seller to consummate the Transactions for any reason (other than a material breach by Buyer of this Agreement). Seller shall retain the Deposit if Seller terminates this Agreement due to a material breach by Buyer.
ARTICLE X BANKRUPTCY MATTERS
Section 10.1 Cure of Defaults. Subject to the prior approval of the Bankruptcy Court and as set forth in the Cure Order, Buyer shall pay directly to the party subject to the assumption and assignment of an Assumed Contract the aggregate amount necessary to cure any and all monetary defaults and breaches thereunder (the "Cure Costs"), pursuant to 11 U.S.C. § 365 and within the time frame set forth in the Sale Order.
Section 10.2 Bankruptcy Court Orders.
(a) Seller shall use its reasonable efforts to schedule hearings on and obtain the Bankruptcy Court's entry of (A) an Order approving the sale and bidding procedures in a form acceptable to Buyer (the "Bidding Procedures Order") on or before November 3, 2017, (B) the Cure Order on or before November 7, 2017, and (C) the Sale Order on or before November 9, 2017.
(b) The Bidding Procedures Order shall provide, among other things, that (i) a break-up fee in the amount of $30,000 (the "Break-Up Fee") and all other payments to Buyer arising under this Agreement shall be obligations of Seller with priority as administrative expenses in the Bankruptcy Case, (ii) the first competing bid must be in an amount of at least $55,000 in excess of the Purchase Price; (iii) any subsequent competing bid must be in increments of no less than $25,000; (iv) all competing bids must be in cash and may not be contingent on financing necessary to consummate the Transactions; (v) each competing bidder
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must qualify to Seller's satisfaction at least one day prior to the sale date; and (vi) Seller shall provide notice of the hearing with respect to the Sale Order to Seller's creditors.
(c) In the event an appeal is taken, or a stay pending appeal is requested or reconsideration is sought, with respect to the Sale Order, Seller shall immediately notify Buyer of such appeal or stay request and shall provide to Buyer within one business day a copy of the related notice of appeal or Order of stay or application for reconsideration. Seller shall also provide Buyer with copies of any other or further notice of appeal, motion or application filed in connection with any appeal from or application for reconsideration of any Order related to the Bankruptcy Case and any related briefs.
(d) Seller shall use its reasonable efforts to file a motion or motions to reject any Contracts so designated for rejection by the Buyer prior to the Closing Date.
(e) The Sale Order shall provide for, among other things, the express preservation of any restrictive covenants and/or confidentiality protections (including non-disclosure agreements) entered into by Seller for the benefit of the Encore Software Business.
ARTICLE XI GENERAL PROVISIONS
Section 11.1 Survival. Neither the representations and warranties contained in this Agreement nor the covenants in Section 7.1, Section 7.3 or Section 7.6 of this Agreement shall survive the Closing and shall terminate thereon; provided, however, the foregoing shall not apply to any breach of any representation or warranty occurring as a result of Seller's knowing misrepresentation, fraud or bad faith, in which case Buyer's recourse for such breach shall survive the Closing indefinitely.
Section 11.2 Notices. All notices, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given upon confirmation of receipt of an email or facsimile transmission, upon confirmed delivery by a standard overnight carrier or when delivered by hand, in each case addressed to the respective parties at the following addresses (or such other address for a party as shall be specified by like notice):
If to Buyer, to:
Avanquest North America LLC 23801 Calabasas Road Calabasas, California 91302 Attention: Roger Bloxberg and Todd Helfstein
with required copies to (which shall not constitute notice to Buyer):
Bryan Cave LLP 120 Broadway, Suite 300 Santa Monica, California 90401 Attention: David Andersen and Sharon Weiss
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If to Seller, to:
WD Encore Software, LLC c/o Wynit Distribution, LLC 9700 W. 76ffi St., Suite 116 Eden Prairie, MN 55344 Attention: Greg Charleston
with a required copy to:
Stinson Leonard Street LLP 50 South Sixth Street, Suite 2600 Minneapolis, MN 55402 Attention: Robert Kugler, Esq.
Section 11.3 Descriptive Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
Section 11.4 Entire Agreement. This Agreement (including the schedules and the other documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and negotiations with respect to the subject matter of this Agreement.
Section 11.5 Assignment. Seller may not assign this Agreement without the written consent of Buyer. Buyer may, in its sole discretion, assign this Agreement and the rights and obligations hereunder (i) to one or more of its Affiliates, or (ii) in connection with a merger or consolidation involving Buyer or in connection with a sale of all or substantially all of the stock or assets of Buyer or other disposition of all or any portion of Buyer's business.
Section 11.6 Governing Law; Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the Laws of the State of Minnesota and the Bankruptcy Code and Applicable Federal Rules of Bankruptcy Procedure, irrespective of conflicts of law principles. In the event of any conflict between the laws of the State of Minnesota and the Bankruptcy Code, the Bankruptcy Code will prevail. Jurisdiction and venue shall be with the Bankruptcy Court, which may apply federal bankruptcy law and procedure in its discretion, and the parties hereby irrevocably consent to such venue and submit to such jurisdiction.
Section 11.7 Expenses. Whether or not the Transactions are consummated, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses. The foregoing shall not affect the legal right, if any, that any party may have to recover expenses from any other party that breaches its obligations under this Agreement. Without limiting the foregoing, Seller shall be responsible for the Break-Up Fee and any brokerage, financial advisory, finder's or similar fee or commission payable in connection with the Transactions and based upon arrangements made by or on behalf of Seller or its Affiliates. Buyer shall be responsible for any brokerage, financial advisory, finder's or similar fee or commission payable in connection with the Transactions and based upon arrangements made by or on behalf of Buyer.
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Section 11.8 Amendment. This Agreement may not be amended, except by an instrument in writing signed on behalf of all the parties.
Section 11.9 Waiver. At any time prior to the Closing Date, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other parties, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant to this Agreement, or (c) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.
Section 11.10 Counterparts; Facsimile. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile transmission, and a facsimile of this Agreement or of a signature of a party will be effective as an original.
Section 11.11 Parties in Interest. Nothing in this Agreement, express or implied, is intended to confer upon any Person not a party to this Agreement any rights or remedies of any nature whatsoever under or by reason of this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, Seller and Buyer have caused this Asset Purchase Agreement to be duly executed on their behalf, as of the date first above written.
WD ENCORE SOFTWARE, LLC
By: Name: Title:
WD NAVARRE HOLDINGS, LLC
By: Name: Title:
AVANQUEST NORTH AMERICA LLC
By: lief*—' Name: Tod e stein Title: PreSident
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1200522.2 1
SCHEDULES
PURSUANT TO
ASSET PURCHASE AGREEMENT
By and Between
WD ENCORE SOFTWARE, LLC
and
AVANQUEST NORTH AMERICA LLC
Dated as of October 26, 2017
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SCHEDULE 1.1
ENCORE SOFTWARE
The following software titles, together with any other software published or distributed by Seller and any software titles published or distributed by Seller or its affiliates that are based on any such software titles, comprise the Encore Software:
101 PREMIUM GAMES 155K GAMES 250000 GAMES 3 ADDICTING 3D HOME ARCHITECT 4 ELEMENTS 4 GREAT GAMES 500K GAMES 6 GREAT GAMES 7 WONDERS 700K GAMES 9 CLUES ACTIVATION CODE ADV PRE K-8 ADVANTAGE ADVENTURE WORKSHOP AGENCY OF ANOMALIES ALEX HUNTER AMAZING JOURNEYS AMAZINGLY ADDICTIVE PUZZLE AMERICAN CIVIL WAR AMERICAN GREETINGS AMERICAN PICKERS ANCIENT SECRETS ANGELICA WEAVER ARCH SERIES ARTHUR'S MATH ARTS ESSENTIALS ASSASSINS CREED AVENUE FLO AWAKENING GOBLIN SKYWARD AXIS & ALLIES AZADA BATMAN TOXIC CHILL BEYOND GOOD BEYOND MYSTERY BICYCLE BIG BOX OF ART BIG BUCK HUNTER BRAID BRAIN FOOD BRAIN SPA
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BRAINIVERSITY BRINK OF CONSCIOUSNESS BRODERBUND ULTIMATE PRINT BROTHER BEAR BROTHERS IN ARMS BUBBLE BURST REMIX BUILDER & HOSTING BUMPS BUSINESS CARD STUDIO CABELAS BIG GAME CAILLOU READY CAKE MANIA CALENDAR CREATOR CALL OF JUAREZ CAMPFIRE LEGENDS CARNIVAL OF CRIME CASTLE CHAINZ GALAXY CHAMPION DREAMS CHESSMASTER CHOCOLATIER CHOPLIFTER CHRONICLES OF WITCHES CIM 2 CLICKART CLOCKWORK TALES CLUB VEGAS CLUE CLASSIC COGNITION COMP COLLAPSE COOKIE DOMINATION COOKING ACADEMY COOL TOOLS CRAZY MACHINES CREATING KEEPSAKES CREATIVE FONTS CRUEL GAMES CRYPTIC ENCOUNTERS CSI CURSE OF BLACKMOOR CURSE OF THE PHARAOH CURSE OF THE WEREWOLVES DAIRY DASH DARK ARCANA DARK PARABLES DARK SANCTUARIES DARK SECRETS DARK STROKES DARK TALES DEADLY PUZZLES DEADLY VOLTAGE DEER HUNT LEGENDS
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DEFCON GLOBAL NUCLEAR DEMON HUNTER CHRONICLES DEPTHS OF BETRAYAL DIAMOND DROP DIGITAL PHOTO PROTECTION DINER DASH DISCIPLES DISNEY DOGGIE DASH DOGZ AND CATS DOLPHINS SCREENSAVER DR. SEUSS'S CAT DRAWN 2 PACK DREAM CHRONICLES DREAM DAY WEDDING DRESS SHOP HOP DRIVECLONE PRO EASY BUSINESS IMPRINTS ECHOES OF SORROW ELEMENTARY ADVANTAGE EMERGENCY ROOM ENCORE ENGMATIS MISTS ETERNAL JOURNEY EUROPA UNIVERSALIS EURPAC CASUAL EURPAC MUMBOJUMBO EVERYTHING PDF EXORCIST FAIRING POINT FAMILY FEUD FAMILY TALES FAMILY TREE FAMILY VACATION FAR CRY FARM FRENZY FASHION DASH FAST FOOD FATE FICTION FIXERS FINANCIAL FORECASTER FIREHOUSE HOUNDS FISHDOM FLUX FAMILY FOOD FRENZY FORBIDDEN SOULS FOREST LEGENDS FORM TOOL FORTUNE HUNTERS FORTUNES 20PK FOUND FORTUNES FRITZ CHESS
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FUN AND SKILLS GALAXY OF WORD GAMES GAMES FOR GIRLS GHOST ENCOUNTERS GHOST HUNTERS GHOST RECON GLOWFISH GOOSEBUMPS GRACES QUEST GRAND AGES GREAT BARRIER GRIM LEGENDS GUN H&R BLOCK HALLMARK CARD HASBRO HAUNTED DEATH HAUNTED HOTEL HAUNTED MANOR HEROES OF MIGHT HEXAGON MAHJONGG HGTV HOME HIDDEN MYSTERIES HIDDEN OBJECT HIDE AND SECRET HIGH SCHOOL ADVANTAGE HOLIDAY 2009 HOME & LAND HOME AND BUSINESS HOME DESIGN STUDIO HORSE LOVERS HOTEL HOTEL DASH HOUSE BEAUTIFUL HOUSE OF 1000 HOWLVILLE THE DARK HOYLE ICE ROAD TRUCKERS IDEVICE MAGIC IGT IGT SLOTS INS INSIDER CHRONICLES INTERIOR DESIGN INTO THE HAZE ISLE OF DEAD SHIPS JACKPOT GAMES XX JAGGED ALLIANCE JEOPARDY JEWEL QUEST JOJOS FASHION SHOW KEY CODES
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KID PIX KISSING CANINES KUROS WITH L2P CHESS LAKE HOUSE LANDSCAPE, DECK & PATIO LAPTOP COP LEAGUE OF LIGHT LEARN TO PLAY LEFT IN THE DARK LEGENDS LIFE AND CLUE LIGHTER SIDE LITTLE SHOP ROAD LIVING LEGENDS LOCK ON MODERN LOGO DESIGN STUDIO LOST CHRONICLES LOST SECRETS LOST VIA DOMUS LOVE ALCHEMY LUXOR MAC TUNEUP MAGIC ENCYCLOPEDIA MAH JONG MAHJONGG PLATINUM MARGRAVE MANOR MARINE AQUARIUM MAROONED MARVEL MARY KAY MASTER LANDSCAPE MASTERS AMBER'S MATCH3 MASTER MATH ADVANTAGE MATH ESSENTIALS MAVIS BEACON MCF MEDIASHOP MESSAGE IN A HAUNTED MANSION MEXICANA DEADLY MICROIDS DRACULA MIDDLE SCHOOL ADVANTAGE MIDNIGHT MYSTERIES MILLIE'S MATH MILLION DOLLAR MIND QUIZ MOLE CONTROL MONOPOLY MORTIMER BECKETT MOTOR TOWN MOUNT AND BLADE
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MOVAVI VIDEO MUMBOJUMBO MURDER SHE WROTE MY SIM AQUARIUM MYMEMORIES MYSTERIES OF THE UNDEAD MYSTERIOUS CITY MYSTERY MYSTERY CASE FILES MYSTERY MASTERS MYSTERY TRACKER MYSTERYVILLE NANCY DREW NATALIE BROOKS NEARWOOD CE NETWORK NOW! NICK CHASE NIGHTMARES FROM THE DEEP NIGHTMARES SIRENS NIGHTSHIFT CODE NOVEMBER 1963 GRACELAND OFFICE SUITE OMINOUS PATHS OREGON TRAIL PACIFIC STORM PAINTSHOPPRO PARABLES9 QUEEN PARANORMAL PURSUIT PC GHOSTS PC TOOLS PET SHOP PET VET PETZ HORSEZ PHOTOSHOW DELUXE PICKERS ADVENTURES PICTUREKA AND PIGLETS BIG PILLARS OF ETERNITY PLANTS VS. ZOMBIES PLAY POLAR POOH ACTIVITY PORTAL OF EVIL POSTER STRONGHOLD CRUSADER PRICE IS RIGHT PRINCE OF PERSIA PRINCESS ROYAL PRINTMASTER PRINTSHOP PROF HOME PROFESSOR TEACHES WINDOWS PUNCH
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PUPPET SHOW PURE HIDDEN XX Q*BERT QUEST TRIO QUICKEN WILLMAKER RAINBOW 6 RANCH RUSH RAVENHURST RAYMAN 3 READER RABBIT REC ROOM REDEMPTION CEMETERY REDRUM REEL DEAL REGISTRY MECHANIC REGISTRY REPAIR RESTAURANT EMPIRE RESUME MAKER PRO RFH&G,RFS,CCB RFP TRAVEL RIDDLE OF THE SPHINX RINGPLUS RISK RUSH FOR SACRA TERRA SACRED GOLD SAGAS SAMANTHA SWIFT SAMS SCOOBY-DOO! LIGHTS! SCRABBLE SCRAPBOOK BOUTIQUE SCRAPBOOK FACTORY SEASONAL SNACK SECRET OF THE OLD CLOCK SECRET VISIONS SECRETS OF THE DARK SERIOUS SAM SHADES OF FEAR SHADOW CHRONICLES SHADOW WOLF MYSTERIES SHADOWS PRICE SHARKS SHIVER MOONLIT SHIVER POLTERGEIST SHOP 4.0 SILENT HUNTER SIMPLE SCRAPBOOKS SIMULATION 101 SINKING ISLAND SLEEPY HOLLOW SLINGO 7 PACK
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SMALL TOWN TERRORS SMILEBOX SNARKBUSTERS 3-PACK SON OF NOR SONIA WITH INBETWEEN SPACE LEGENDS SPANISH ADVANTAGE SPELL JAM SPHERA THE INNER JOURNEY SPLINTER CELL SPONGEBOB SQUAREPANTS SPYWARE DOCTOR SQUARELOGIC STALKER STILL LIFE STRANGE CASES STRAY SOULS2 STRONGHOLD CRUSADER STRURMOVIK SUPER GRANNY SUPER HOME SUPERMARKET MANIA SYNCABLES 360 SYSTEM MECHANIC TANK BRIGADE TESTPREPMATH ESSENT TEXT TWIST THE CLOCKWORK MAN THE GIFT THE INSTITUTE THE LEGENDS THE LOST THE PRINT SHOP THE ROME COLLECTION THE WITCHER ENHANCED THE WORLD LEGENDS KASHCHEY TITANIC AND HOLLYWOOD TLC TOM CLANCY TORCHLIGHT TOTAL DEFENSE TOWER OF SOUL TPS TREASURE MASTERS TREASURES OF MYSTERY TROPICO TRILOGY TUMBLEJUMBLE TUNE PLUS TURBOCAD DESIGNER TWISTED LANDS ULTIMATE GAME PACK ULTIMATE HIDDEN
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ULTIMATE SEEK UNLIKELY SUSPECTS UP IN HARLEM V4 BONUS VACATION QUEST VAMPIRE MANSION VAMPIRE SAGA VAMPIRE SECRETS VAMPIRES V VEIL OF MYSTERY VIACAD VIACAD 2D/3D VIRTUAL DJ VIRTUAL VILLAGERS W/EVERTHING PDF WANDERING WILLOWS WAR BIRDS WARLOCK WEBSHOTS ULTIMATE WEBWATCHER WEDDING DASH WEEKEND PROJECT WEIRD PARK WESTWARD WHEEL OF FORTUNE WHERE IN THE WORLD IS CARMEN SANDIEGO WHISPERED STORIES WHO WANTS TO BE A MILLIONAIRE WILDLIFE PARK WITCHES LEGACY WORD MANIA WORLD IN CONFLICT WORLD OF MAHJONGG WRAP YAHTZEE ZOOMBINIS
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SCHEDULE 2.1(a)
INVENTORY
(a) Consigned Inventory:
Name of Retailer Material # Title Quantity
BEST BUY 8077715 VIRTUAL DJ DSA CS 1615
BEST BUY 8098924 IDEVICE MAGIC PLATINUM AMR CS 4
BEST BUY 8110848 MAVIS BEACON BY ULTRA KEY PLAT AMR CS 22
BEST BUY 8129776 PUNCH HOME LAND DESIGN PRE V18 DSA CS 2833
BEST BUY 8131547 OFFICE SUITE 2.0 AMR CS 2932
BEST BUY 8134295 MAVIS BEACON ULTRAKEY 2-FAMILY AMR CS 2621
BEST BUY CANADA (CAD) 8086134 PUNCH VIACAD 2D 3D PC MAC V8 DSA FCN CS 448
BEST BUY CANADA (CAD) 8108857 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 1
BEST BUY CANADA (CAD) 8113697 THE PRINT SHOP 3.5 DELUXE DSA FCN CS 19
BEST BUY CANADA (CAD) 8129780 PRINTMASTER V7 CALENDAR CREAT DSA FCN CS 429
BEST BUY CANADA (CAD) 8129782 THE PRINT SHOP DLX 4 WITH EVP DSA FCN CS 436
BEST BUY CANADA (CAD) 8130949 THE PRINT SHOP PRO 4.0 EASY B DSA FCN CS 450
BEST BUY CANADA (CAD) 8133170 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 456
BEST BUY CANADA (CAD) 8133172 PUNCH HOME LAND DESIGN PRE V1 DSA FCN CS 444
BEST BUY CANADA (CAD) 8133261 MOVAVI VIDEO SUITE DRONE ED DSA FCN CS 458
OFFICE DEPOT 2138430 PRINTSHOP 20 PRO PUBLISHER DELUXE (CONSI 1
OFFICE DEPOT 2190111 MEDIASHOP TOTAL MEDIA PLUS (CONSIGNM XX 11
OFFICE DEPOT 8032570 HOME&LAND DESIGN STUDIO NEXGEN (CONSIGN) 2
OFFICE DEPOT 8051494 CALENDAR CREATOR DELUXE V12.1 SB CS 18
OFFICE DEPOT 8052061 MAVIS BEACON KEYBOARDING KID SB CS 4
OFFICE DEPOT 8063868 PRINT MASTER1 JC CS 1
OFFICE DEPOT 8065923 CLUB VEGAS 3 PACK JC CS 5
OFFICE DEPOT 8070647 PUNCH HOME LAND STUDIO NEXGE SB CS 1
OFFICE DEPOT 8074514 HOME AND BUSINESS LAWYER V4 AMR CS 1
OFFICE DEPOT 8074589 GALAXY OF WORD GAMES JC CS 1
OFFICE DEPOT 8075193 ELEMENTARY ADVANTAGE 2012 AMR CS 12
OFFICE DEPOT 8085583 HIDDEN MYSTERIES TITANIC 2 AMR CS 4
OFFICE DEPOT 8086132 PUNCH VIACAD 2D 3D PC MAC V8 DSA CS 18
OFFICE DEPOT 8086139 MYSTERY MASTERS MEGA COLL V2 AMR CS 2
OFFICE DEPOT 8087602 WILDLIFE PARK TYCOON SB OMAX CS 11
OFFICE DEPOT 8087603 MYSTERY MASTERS MEGA COLL V2 DSA OMAX CS 4
OFFICE DEPOT 8089200 FISHDOM 3 PACK JC CS 5
OFFICE DEPOT 8090576 4 GREAT GAMES JC CS 1
OFFICE DEPOT 8091294 PUNCH HOMELANDPREMIUM V17 DSA CS 67
OFFICE DEPOT 8092062 MYSTERY ADVENTURE PACK JC CS 0
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OFFICE DEPOT 8092578 SLEEPY HOLLOW JC CS 1
OFFICE DEPOT 8095162 PUNCH HOME LANDSCAPE PRO V17 DSA CS 75
OFFICE DEPOT 8095165 PUNCH HOME LANDSCAPE DESIGN V17 DSA CS 1
OFFICE DEPOT 8097125 PUNCH INTERIOR DESIGN SUITE V17 DSA CS 75
OFFICE DEPOT 8097146 MYSTERY PACK CRYSTAL MOONSTONE JC CS 1
OFFICE DEPOT 8097803 4 ELEMENTS II AMR CS 2
OFFICE DEPOT 8097821 HOYLE 3 PACK JC CS 1
OFFICE DEPOT 8097927 MAHJONGG PLATINUM 5 DLX ED JC CS 1
OFFICE DEPOT 8097951 CASTLE AMR CS 3
OFFICE DEPOT 8098924 IDEVICE MAGIC PLATINUM AMR CS 7
OFFICE DEPOT 8103819 BRINK OF CONSCIOUSNESS 4PK JC CS 10
OFFICE DEPOT 8103930 ANGELICA WEAVER AMR CS 1
OFFICE DEPOT 8107931 CHOPLIFTER JC CS 5
OFFICE DEPOT 8107933 MORTIMER BECKETT COLLECTION JC CS 1
OFFICE DEPOT 8109511 LEGENDS OF TERROR 6PK JC CS 3
OFFICE DEPOT 8109512 MYSTERY 6PK JC CS 1
OFFICE DEPOT 8110668 LEGENDS OF THE MIST JC CS 0
OFFICE DEPOT 8110669 NOVEMBER 1963 GRACELAND 2 PK JC CS 2
OFFICE DEPOT 8110681 DEER HUNT LEGENDS JC CS 1
OFFICE DEPOT 8110848 MAVIS BEACON BY ULTRA KEY PLAT AMR CS 18
OFFICE DEPOT 8111901 THE PRINT SHOP 3.5 DELUXE DSA CS 6
OFFICE DEPOT 8111903 THE PRINT SHOP 3.5 PROFESSIONAL DSA CS 1
OFFICE DEPOT 8113822 IGT SLOTS PARADISE GARDEN AMR CS 3
OFFICE DEPOT 8115778 DARK STROKES 4PK JC CS 10
OFFICE DEPOT 8115781 MYSTERY LEGENDS PACK JC CS 10
OFFICE DEPOT 8115782 OMINOUS PATHS 6 PACK JC CS 10
OFFICE DEPOT 8116797 THE ULTIMATE HOYLE COLLECTION AMR CS 7
OFFICE DEPOT 8117438 ADVANTAGE EDUCATION AMR CS 2
OFFICE DEPOT 8121682 PUNCH VIACAD 2D3D PC AND MAC V DSA OD CS 4431
OFFICE DEPOT 8122191 IGT SLOTS 100 PANDAS AMR CS 6
OFFICE DEPOT 8125877 EASY BUSINESS IMPRINTS AMR CS 5429
OFFICE DEPOT 8129160 THE PRINT SHOP DLX 4 WITH EVPDF DSA CS 4010
OFFICE DEPOT 8129162 THE PRINT SHOP PRO 4.0 EASY BIZ DSA CS 4400
OFFICE DEPOT 8129191 PRINTMASTER V7 CREATIVITY COL DSA CS 3669
OFFICE DEPOT 8129776 PUNCH HOME LAND DESIGN PRE V18 DSA CS 5332
OFFICE DEPOT 8132568 PUNCH INTERIOR DESIGN SUITE V18 DSA CS 5009
OFFICE DEPOT 8134293 CALENDAR CREATOR WITH BONUS CLIP DSA CS 3371
OFFICE DEPOT 8134295 MAVIS BEACON ULTRAKEY 2-FAMILY AMR CS 3052
OFFICEMAX 8098924 IDEVICE MAGIC PLATINUM AMR CS 2
STAPLES 8098446 MAVIS BEACON TYPING DELUXE UNK PBHK CS 57
STAPLES 8110841 MAVIS BEACON BY ULTRA KEY DLX AMR CS 0
STAPLES 8129160 THE PRINT SHOP DLX 4 WITH EVPDF DSA CS 1848
STAPLES 8129162 THE PRINT SHOP PRO 4.0 EASY BIZ DSA CS 2611
STAPLES 8129191 PRINTMASTER V7 CREATIVITY COL DSA CS 2534
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STAPLES 8134295 MAVIS BEACON ULTRAKEY 2-FAMILY AMR CS 2090
STAPLES 8135739 VIACAD 2D3D V9 WPOWERPACK LT DSA STAP CS 2811
STAPLES CANADA 2186276 CLICKART 400K JC DVD CS 1
STAPLES CANADA 8081098 PRINTMASTER 2012 PLATINUM DSA FCN CS 1
STAPLES CANADA 8083642 THE PRINT SHOP 3.0 PRO DSA FCN CS 4
STAPLES CANADA 8086134 PUNCH VIACAD 2D 3D PC MAC V8 DSA FCN CS 682
STAPLES CANADA 8091287 ASSASSINS CREED 2 JC CS 7
STAPLES CANADA 8091296 PUNCH HOMELANDPREMIUM V17 DSA FCN CS 7
STAPLES CANADA 8096665 LUXOR VARIETY PACK JC CS 6
STAPLES CANADA 8097927 MAHJONGG PLATINUM 5 DLX ED JC CS 2
STAPLES CANADA 8108857 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 4
STAPLES CANADA 8110413 MIDDLE SCHOOL ADVANTAGE AMR CS 3
STAPLES CANADA 8110842 MUMBOJUMBO 10 PACK AMR CS 1
STAPLES CANADA 8111951 IGT SLOTS KITTY GLITTER 8PK JC CS 10
STAPLES CANADA 8112192 700K GAMES AMR CS 1
STAPLES CANADA 8113695 MAVIS BEACON BY ULTRA KEY PLA AMR FCN CS 5
STAPLES CANADA 8113696 PRINTMASTER V6 PLATINUM DSA FCN CS 7
STAPLES CANADA 8113697 THE PRINT SHOP 3.5 DELUXE DSA FCN CS 3
STAPLES CANADA 8113822 IGT SLOTS PARADISE GARDEN AMR CS 9
STAPLES CANADA 8116797 THE ULTIMATE HOYLE COLLECTION AMR CS 3
STAPLES CANADA 8117438 ADVANTAGE EDUCATION AMR CS 8
STAPLES CANADA 8121445 MYSTERY MASTERS SUPERNATURAL ST AMR CS 5
STAPLES CANADA 8122191 IGT SLOTS 100 PANDAS AMR CS 5
STAPLES CANADA 8124354 700K GAMES VERSION 2 AMR CS 8
STAPLES CANADA 8129175 HOYLE OFFICIAL CARD GAMES AMR CS 3
STAPLES CANADA 8129781 PRINTMASTER V7 CREATIVITY COL DSA FCN CS 517
STAPLES CANADA 8129782 THE PRINT SHOP DLX 4 WITH EVP DSA FCN CS 749
STAPLES CANADA 8130949 THE PRINT SHOP PRO 4.0 EASY B DSA FCN CS 921
STAPLES CANADA 8133170 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 721
STAPLES CANADA 8133172 PUNCH HOME LAND DESIGN PRE V1 DSA FCN CS 613
STAPLES CANADA 8133261 MOVAVI VIDEO SUITE DRONE ED DSA FCN CS 1496
STAPLES CANADA 8136109 MAVIS BEACON ULTRAKEY 2-FAMIL AMR FCN CS 464
TARGET 8098623 PUNCH MASSMERCHANT HLD GREEN DSA TGT CS 12
TARGET 8098924 IDEVICE MAGIC PLATINUM AMR CS 1
(b) On Hand Components – Technicolor
VENDOR Part# Description Quantity TECHNICOLOR 31542-WRP HOME LAND DESGN PREMIUM V17 WRAP PANE 898
TECHNICOLOR 32707A-DVD INTERIOR DESIGN SUITE V17 DVD ON SPINDLE 424
TECHNICOLOR 35620-CD CD-ROM - MAVIS BEACON ULTRAKEY PLATINUM 2,130
TECHNICOLOR 35740-DVD DVD - MAVIS BEACON ULTRAKEY DLX 1,275
TECHNICOLOR 36450-DVD DVD - ULTIMATE HOYLE COLLECTION 491
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TECHNICOLOR V01305-DVD DVD - 700,000 GAMES 200
TECHNICOLOR 14296-DVD HOYLE CARD GAMES 08 DVD 1,010
TECHNICOLOR 26630-CDS VIRTUAL DJ CD ON SPINDLES 707
TECHNICOLOR 27830A-DVD DVD - HOYLE CARD GAMES 2012 505
TECHNICOLOR 14296-SLV HOYLE CARD GAMES 08 GREEN JC SLEEVE 1,517
TECHNICOLOR 15341-SLV MAVIS TYPING 18 SLEEVE 626
TECHNICOLOR 42030-STK STK - RFH&G,RFS,CCB 1,434
TECHNICOLOR 70646-STK STK - $10 REBATE 2,648
TECHNICOLOR 41290-STK STK-TPS DLX V4 BONUS STK EVERYTHING PDF 182
TECHNICOLOR 41310-STK STK - EASY IMPRINTS BONUS STICKER 2,219
TECHNICOLOR 41320-STK STK - CALENDAR CREATOR BONUS STICKER 1,548
TECHNICOLOR 26630-WRP VIRTUAL DJ AMARAY WRAP 2,449
TECHNICOLOR 27830-SLV SLEEVE - HOYLE CARD GAMES 2012 870
TECHNICOLOR 31540-SLV SLEEVE - HOME & LAND DESIGN PREMIUM V17 280
TECHNICOLOR 31540-WRP WRAP - HOME & LAND DESIGN PREMIUM V17 1,225
TECHNICOLOR 31540A-INS-1770 ACTIVATION CODE INSERT HOME & LANDSCAPE 130
TECHNICOLOR 20051-WRP WRP - CALENDAR CREATOR V2 290
TECHNICOLOR 33830-OCARD OCARD - OFFICE SUITE 200
TECHNICOLOR 35620-INS INS - MAVIS BEACON ULTRAKEY PLATINUM 1,950
TECHNICOLOR 35622-WRP WRAP - MAVIS BEACON ULTRAKEY FAMILY FNC 831
TECHNICOLOR 35740-INS INS - MAVIS BEACON ULTRAKEY DLX 204
TECHNICOLOR 36460-OCARD OCARD - OFFICE SUITE 3,339
TECHNICOLOR 36460-WRP WRP - OFFICE SUITE 3,004
TECHNICOLOR 37360-OCARD OCARD - MYSTERY MASTERS: MAZE OF MYSTERY 2,141
TECHNICOLOR 37360-WRP WRP - MYSTERY MASTERS: MAZE OF MYSTERY 2 3,661
TECHNICOLOR 37400-SLV SLV - DARK SANCTUARIES 6-PK 2,750
TECHNICOLOR 37880-KEY KEY CODES 5,000
TECHNICOLOR 37880-POSTER POSTER - STRONGHOLD CRUSADER 2 1,012
TECHNICOLOR 38730-WRP WRP - MM FOUND FORTUNES 20PK 1,270
TECHNICOLOR 39660-WRP WRAP - MYSTERY MASTERS GRIM LEGENDS 2: S 190
TECHNICOLOR 39760-OCARD O-CARD - EASY BUSINESS IMPRINTS 1,390
TECHNICOLOR 41260-INS INS - PRINTMASTER V7 PLATINUM 955
TECHNICOLOR 41260-WRP WRAP PRINTMASTER PLATINUM 1,550
TECHNICOLOR 41290-INS INS - TPS DLX 4.0 WITH PDF KEY CODE 550
TECHNICOLOR 41310-INS INS - TPS PRO 4.0 WITH EBI KEY CODE 1,480
TECHNICOLOR 41372-SLV SLV - FIREHOUSE HOUNDS 8PK 3,210
TECHNICOLOR 41390-INS INS - TPS DLX 4.0 KEY CODE 3,480
TECHNICOLOR 41400-INS INS - TPS PRO 4.0 KEY CODE 2,510
TECHNICOLOR 41470-INS2 INS2 - H&L DESIGN PREM NO DISC NO PROBLE 775
TECHNICOLOR 41517-INS2 INS2 - INTERIOR DESIGN SUITE V18 NO DISC 2,493
TECHNICOLOR 41528-INS INS - ACT CODE INSERT PUNCH LANDSCAPE, D 1,032
TECHNICOLOR 41528-INS2 INS2 - LS, DECK & PATIO DESIGNER V18 NO 930
TECHNICOLOR 41890-SLV SLV - CASTLE W/TITANIC & BUCKINGHAM PALA 4,304
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TECHNICOLOR 42010-INS INS - OFFICE STE W/EVERTHING PDF & LDS4 415
TECHNICOLOR 42190-INS INS - OFFICE SUITE 2.0 KEY CODE 1,622
TECHNICOLOR 42780-WRP WRP - MOVAVI VIDEO SUITE DRONE EDITION 1,640
TECHNICOLOR 43150-INS INS - BIG BUCK HUNTER ARCADE 2,500
TECHNICOLOR 43160-WRP WRP - SHADOW WOLF MYSTERIES: TRACKS OF T 3,146
TECHNICOLOR 43350-INS INS - AGENCY OF ANOMALIES 3RD FREE GAME 62
TECHNICOLOR 43350-SLV SLV - AGENCY OF ANOMALIES 447
TECHNICOLOR 43360-INS INS - REDEMPTION CEMETARY 3RD FREE GAME 2
TECHNICOLOR 43540-INS INS - MYSTERY TRACKER 3RD GAME FREE CODE 790
TECHNICOLOR 43560-INS INS - WITCHES LEGACY 3RD GAME FREE CODE 460
TECHNICOLOR 43570-INS INS - HAUNTED HOTEL 3RD GAME FREE CODE 460
TECHNICOLOR ENC9900-BB INSERT INS - ENC BOUNCE BACK INSERT 832
TECHNICOLOR V00979-WRP WRP- LEARN TO PLAY CHESS W/F&C: 3PK 223
TECHNICOLOR V01013-OCARD OCARD - TREASURES OF MYSTERY COLLECTION 1,092
TECHNICOLOR V01013-WRP WRP - TREASURES OF MYSTERY COLLECTION 1,896
TECHNICOLOR V01305-WRP WRP - 700,000 GAMES 324
TECHNICOLOR V9900-BB INSERT INS - BOUNCE-BACK INSERT 24,740
TECHNICOLOR 20051-OCARD O-CARD CALENDAR CREATOR V2 387
TECHNICOLOR 23410-SLV THE PRINT SHOP 23 SLEEVE - NAV705 1,730
TECHNICOLOR 26630-SLV VIRTUAL DJ O-CARD WITH FLAP 1,395
TECHNICOLOR 26732-SLV SLEEVE - ASSASIN'S CREED COLLECTION 1,057
TECHNICOLOR 31960-SLV SLV - MYSTERY MASTERS TREASURES OF MYSTE 2,516
TECHNICOLOR 32921-SLV AMR SLEEVE - HOYLE CARD GAMES AND HOYLE 1,685
TECHNICOLOR 32921-WRP AMR WRAP - HOYLE CARD GAMES AND HOYLE PU 1,727
TECHNICOLOR 32980-SLV AMR SLEEVE - HOYLE CASINO GAMES WITH SLO 2,127
TECHNICOLOR 32980-WRP AMR WRAP - HOYLE CASINO GAMES WITH SLOTS 270
TECHNICOLOR 33830-WRP WRP - OFFICE SUITE 2,789
TECHNICOLOR 35230-OCARD O-CARD PRINTMASTER PLATINUM 990
TECHNICOLOR 35230-WRP WRAP PRINTMASTER PLATINUM 1,067
TECHNICOLOR 35620-OCARD OCARD - MAVIS BEACON ULTRAKEY PLATINUM 2,566
TECHNICOLOR 35620-WRP WRP - MAVIS BEACON ULTRAKEY PLATINUM 2,425
TECHNICOLOR 35622-OCARD O-CARD - MAVIS BEACON ULTRAKEY FAMILY FN 4,237
TECHNICOLOR 35740-WRP WRAP - MAVIS BEACON ULTRAKEY DLX 192
TECHNICOLOR 36450-OCARD AMR O-CARD WITH BOOKFOLD - ULTIMATE HOYL 930
TECHNICOLOR 36450-WRP AMR WRAP - ULTIMATE HOYLE COLLECTION 4,820
TECHNICOLOR 37050-SLV SLV - PLAY! MATCH 3 MASTER 5,456
TECHNICOLOR 37140-SLV SLV - PLAY! MAHJONG TITANIUM COLLECTION 5,680
TECHNICOLOR 37160-SLV SLV - PLAY FARMS AND GARDENS 2,024
TECHNICOLOR 37880-OCARD OCARD - STRONGHOLD CRUSADER 2 1,391
TECHNICOLOR 37880-WRP WRP - STRONGHOLD CRUSADER 2 965
TECHNICOLOR 38600-WRP WRAP 375
TECHNICOLOR 38730-OCARD OCARD-MM FOUND FORTUNES 20PK 1,190
TECHNICOLOR 38790-OCARD OCARD - MYSTERY MASTERS: MYSTERIES OF TH 3,182
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TECHNICOLOR 38790-WRP WRP - MYSTERY MASTERS: MYSTERIES OF THE 3,393
TECHNICOLOR 38800-OCARD OCARD - MYSTERY MASTERS: SUPERNATURAL ST 2,509
TECHNICOLOR 38800-WRP WRP - MYSTERY MASTERS: SUPERNATURAL STOR 2,909
TECHNICOLOR 38910-WRP WRP - ASSASSIN CREED 3 COLLECTION 594
TECHNICOLOR 38920-OCARD O-CARD - IGT SLOTS 100 PANDAS 5,586
TECHNICOLOR 38920-WRP WRAP - IGT SLOTS 100 PANDAS 6,245
TECHNICOLOR 39420-OCARD OCARD - 700,000 GAMES V2.0 1,125
TECHNICOLOR 39420-WRP WRP - 700,000 GAMES V2.0 1,225
TECHNICOLOR 39760-WRP WRAP - EASY BUSINESS IMPRINTS 1,235
TECHNICOLOR 39840-OCARD O-CARD - IGT SLOTSPARADISE GARDEN 2,157
TECHNICOLOR 39840-WRP WRAP - IGT SLOTS PARADISE GARDEN 2,015
TECHNICOLOR 40041-SLV SLV - AMAZING JOURNEYS 6,162
TECHNICOLOR 40190-WRP WRP -MM HOUSE OF 1000 DOORS: EVIL INSIDE 200
TECHNICOLOR 40790-OCARD OCARD - PILLARS OF ETERNITY 667
TECHNICOLOR 40790-WRP WRP - PILLARS OF ETERNITY 776
TECHNICOLOR 40980-OCARD OCARD - MM CARNIVAL OF CRIME CE 3,751
TECHNICOLOR 40980-WRP WRP - MM CARNIVAL OF CRIME CE 3,925
TECHNICOLOR 41250 - OCARD OCARD - HOYLE ULT CARD GAMES COLLECTION 7,998
TECHNICOLOR 41250 - WRP WRP- HOYLE ULT CARD GAMES COLLECTION 201 8,362
TECHNICOLOR 41254-WRP WRP- HOYLE ULT CARD GAMES COLLECTION 201 5,220
TECHNICOLOR 41260-OCARD O-CARD PRINTMASTER PLATINUM 75
TECHNICOLOR 41290-WRP WRP - PRINT SHOP 4.0 DELUXE with PDF 2,351
TECHNICOLOR 41292-OCARD O-CARD - PRINT SHOP 4.0 DELUXE FCN 96
TECHNICOLOR 41300-WRP WRP - PRINTMASTER PLATINUM V7 w/Creative 1,165
TECHNICOLOR 41310-WRP WRP - The Print Shop Pro 4.0 with EBI 3,261
TECHNICOLOR 41320-INS INS - PRINTMASTER PLATINUM W/CALENDAR CR 2,480
TECHNICOLOR 41320-WRP WRP - PRINTMASTER PLATINUM W/CALENDAR CR 3,157
TECHNICOLOR 41390-WRP WRAP - PRINT SHOP 4.0 DELUXE 3,568
TECHNICOLOR 41400-OCARD O-CARD - THE PRINT SHOP PROF 4.0 2,122
TECHNICOLOR 41400-WRP WRP - THE PRINT SHOP PRO 4.0 2,930
TECHNICOLOR 41460-INS INS - HOME & LAND DESIGN V18 1,430
TECHNICOLOR 41460-OCARD OCARD - HOME & LAND DESIGN V18 2,080
TECHNICOLOR 41460-WRP WRP - HOME & LAND DESIGN V18 2,190
TECHNICOLOR 41470-INS INS - H&L DESIGN PREM V18 ACT CODE 773
TECHNICOLOR 41470-OCARD OCARD - HOME & LANDSCAPE DESIGN PREM V18 2,098
TECHNICOLOR 41470-WRP WRP - HOME & LANDSCAPE DESIGN PREM V18 2,225
TECHNICOLOR 41480-OCARD O-CARD - GOOSEBUMPS 1,132
TECHNICOLOR 41480-WRP WRAP - GOOSEBUMPS 1,191
TECHNICOLOR 41517-INS INS - ACT CODE INSERT PUNCH INTERIOR DES 2,493
TECHNICOLOR 41517-OCARD OCARD - PUNCH INTERIOR DESIGN SUITE 2,736
TECHNICOLOR 41517-WRP WRP - PUNCH INTERIOR DESIGN SUITE 2,757
TECHNICOLOR 41528-OCARD OCARD - PUNCH LANDSCAPE, DECK & PATIO 990
TECHNICOLOR 41528-WRP WRP - PUNCH LANDSCAPE, DECK & PATIO 1,045
TECHNICOLOR 41536-OCARD O-CARD - VIACAD 2D/3D V9 + PPLT 531
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TECHNICOLOR 41536-WRP WRP - VIACAD 2D/3D V9 + PPLT 2,095
TECHNICOLOR 41705-OCARD O-CARD - ZOOMBINIS 1,728
TECHNICOLOR 41705-WRP WRAP - ZOOMBINIS 1,730
TECHNICOLOR 41900-OCARD OCARD - SIMULATION 101 2,650
TECHNICOLOR 41900-WRP WRAP - SIMULATION 101 3,020
TECHNICOLOR 41910-SLV SLV - PLAY! BEACH GETAWAY 1,580
TECHNICOLOR 42010-OCARD OCARD - OFFICE SUITE 2.0 W/PDF AND LOGO 958
TECHNICOLOR 42010-WRP WRAP - OFFICE SUITE 2.0 W/PDF AND LOGO 1,080
TECHNICOLOR 42020-OCARD OCARD - ADV PRE K-8 W/ZOOMBINIS AND CHES 2,400
TECHNICOLOR 42020-WRP WRP - ADV PRE K-8 W/ZOOMBINIS AND CHESS 2,100
TECHNICOLOR 42030-INS INS - THE PRINT SHOP DELUXE 4.0 W/RFH&G, 1,025
TECHNICOLOR 42030-WRP WRP -THE PRINT SHOP DELUXE 4.0 W/RFH&G,R 203
TECHNICOLOR 42190-OCARD OCARD - OFFICE SUITE 2.0 2,602
TECHNICOLOR 42190-WRP WRAP - OFFICE SUITE 2.0 2,341
TECHNICOLOR 42370-OCARD O-CARD - IGT SLOTS 3 PACK 5,150
TECHNICOLOR 42370-WRP WRAP - IGT SLOTS 3 PACK 5,530
TECHNICOLOR 42410-SLV SLV - SAGAS OF SHADOW 4,889
TECHNICOLOR 42420-SLV SLV - SAGAS OF MAGIC 43
TECHNICOLOR 42610-SLV SLV - SAGAS OF DISCOVERY 4,372
TECHNICOLOR 42620-SLV SLV- SAGAS OF SORCERY 6,984
TECHNICOLOR 42780-INS INS - MOVAVI VIDEO SUITE DRONE ED ACT CO 690
TECHNICOLOR 42780-OCARD OCARD - MOVAVI VIDEO SUITE DRONE EDITION 1,580
TECHNICOLOR 42782-INS INS - MOVAVI VIDEO SUITE DRONE ED ACT CO 930
TECHNICOLOR 42782-INS2 INS2 - MOVAVI VIDEO SUITE DRONE ED ND-NP 930
TECHNICOLOR 42782-OCARD OCARD - MOVAVI VIDEO SUITE DRONE EDITION 1,370
TECHNICOLOR 42782-WRP WRP - MOVAVI VIDEO SUITE DRONE EDITION F 1,415
TECHNICOLOR 42870-SLV SLV - SAGAS OF SECRETS 2,482
TECHNICOLOR 42960-OCARD OCARD - HOYLE CASINO AND CARD 664
TECHNICOLOR 42960-WRP AMR WRAP - HOYLE CASINO AND CARD 857
TECHNICOLOR 42980-INS1 ACTIVATION CODE INSERT MAVIS BEACON ULTR 1,970
TECHNICOLOR 42980-INS2 NDNP INSERT MAVIS BEACON ULTRAKEY FAMILY 1,940
TECHNICOLOR 42980-WRP WRAP MAVIS BEACON ULTRAKEY FAMILY 3,867
TECHNICOLOR 43070-OCARD OCARD-DARK PARABLES9: QUEEN OF THE SANDS 6,720
TECHNICOLOR 43070-WRP WRP-DARK PARABLES9: QUEEN OF THE SANDS C 6,735
TECHNICOLOR 43110-OCARD OCARD SAGAS OF SHADOW AND MAGIC 1,690
TECHNICOLOR 43110-WRP WRP SAGAS OF SHADOW AND MAGIC 1,105
TECHNICOLOR 43120-OCARD OCARD - SAGAS OF SECRETS AND SORCERY 1,190
TECHNICOLOR 43120-WRP WRP - SAGAS OF SECRETS AND SORCERY 1,555
TECHNICOLOR 43130-SLV SLV - SAGAS OF DREAMS 2,745
TECHNICOLOR 43150-OCARD OCARD - BIG BUCK HUNTER ARCADE 3,754
TECHNICOLOR 43150-WRP WRP - BIG BUCK HUNTER ARCADE 3,852
TECHNICOLOR 43160-OCARD OCARD - SHADOW WOLF MYSTERIES: TRACKS OF 1,930
TECHNICOLOR 43360-SLV SLV- REDEMPTION CEMETERY 2,841
TECHNICOLOR 43540-SLV SLV - MYSTERY TRACKER NIGHTSVILLE & WINT 1,940
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 38 of 101 129
1200522.2 18
TECHNICOLOR 43550-OCARD OCARD - REDEMPTION CEMETERY 5 W/ PUPPET 1,114
TECHNICOLOR 43550-WRP WRP - REDEMPTION CEMETERY 5 W/ PUPPET SH 1,157
TECHNICOLOR 43560-SLV SLV - WITCHES LEGACY SLUMBERING AND DARK 1,844
TECHNICOLOR 43570-SLV SLV - HAUNTED HOTEL DEATH & ETERNITY 2,297
TECHNICOLOR 43580-OCARD OCARD - MYSTERY TRACKER 14 W/BLACK ISLE 1,354
TECHNICOLOR 43580-WRP WRP - MYSTERY TRACKER 14 W/BLACK ISLE 1,157
TECHNICOLOR 43690-INS INS-FREE GAME 3,480
TECHNICOLOR 43690-SLV SLV-MCF RAVENHEARST 2 PACK 4,980
TECHNICOLOR 43700-INS INS - FREE GAME 3,480
TECHNICOLOR 43700-SLV SLV- LEAGUE OF LIGHT 2 PACK 5,150
TECHNICOLOR 43810-OCARD O-CARD PRINTMASTER V8 PLATINUM 1,200
TECHNICOLOR 43810-WRP WRAP PRINTMASTER V8 PLATINUM 1,350
TECHNICOLOR 43880-INS INS - OFFICE STE W/EVERTHING PDF & LDS4 557
TECHNICOLOR 43880-OCARD OCARD-OFFICE STE W/EVERTHING PDF & LDS4 2,820
TECHNICOLOR 43880-WRP WRAP-OFFICE STE W/EVERTHING PDF & LDS4 3,035
TECHNICOLOR 70646-INS INS - PUNCH VIACAD V9 KEY CODED INSERT 2,312
TECHNICOLOR 70646-INS2 INS2 - PUNCH VIACAD V9 REBATE 3,257
TECHNICOLOR 70646-OCARD OCARD - PUNCH VIACAD V9 1,046
TECHNICOLOR 70646-WRP WRAP - PUNCH VIACAD V9 1,133
TECHNICOLOR SLV012015PRE SLV - 012015PRE ISS 225
TECHNICOLOR V01305-OCARD OCARD - 700,000 GAMES 256
TECHNICOLOR 36460-CD CD - OFFICE STE W/LD/PDF 2,509
TECHNICOLOR 37360-DVD2 DVD2(9) - MYSTERY MASTERS: MAZE OF MYSTE 1,023
TECHNICOLOR 41528-DVD DVD9 - PUNCH LANDSCAPE, DECK & PATIO 1,062
TECHNICOLOR 41890-DVD DVD - CASTLE W/TITANIC & BUCKINGHAM PALA 1,470
TECHNICOLOR 41900-DVD2 DVD2 - SIMULATION 101 2,484
TECHNICOLOR V01013-DVD DVD - TREASURES OF MYSTERY COLLECTION 1,062
TECHNICOLOR 31960-DVD DVD - MYSTERY MASTERS TREASURES OF MYSTE 2,798
TECHNICOLOR 37050-DVD DVD(9) - PLAY! MATCH 3 MASTER 3,021
TECHNICOLOR 37140-DVD DVD - PLAY! MAHJONG TITANIUM COLLECTION 4,110
TECHNICOLOR 37360-DVD1 DVD1(9) - MYSTERY MASTERS: MAZE OF MYSTE 1,023
TECHNICOLOR 37880-DVD DVD - STRONGHOLD CRUSADER 2 101
TECHNICOLOR 38600A-DVD DVD-MYSTERY MASTERS: AMBER'S TALES: THE 353
TECHNICOLOR 38730-DVD DVD - MM FOUND FORTUNES 20PK (DVD9) 441
TECHNICOLOR 38790-DVD1 DVD1(9) - MYSTERY MASTERS: MYSTERIES OF 1,818
TECHNICOLOR 38790-DVD2 DVD2(9) - MYSTERY MASTERS: MYSTERIES OF 1,818
TECHNICOLOR 38800-DVD1 DVD1(9) - MYSTERY MASTERS: SUPERNATURAL 1,202
TECHNICOLOR 38800-DVD2 DVD2(9) - MYSTERY MASTERS: SUPERNATURAL 1,202
TECHNICOLOR 38920-DVD DVD - IGT SLOTS 100 PANDAS 4,494
TECHNICOLOR 39420-DVD DVD - 700,000 GAMES V2.0 505
TECHNICOLOR 39760-CD CD - EASY BUSINESS IMPRINTS 1,903
TECHNICOLOR 39840-DVD DVD - IGT SLOTS PARADISE GARDEN 1,553
TECHNICOLOR 40041-DVD DVD - AMAZING JOURNEYS 2,814
TECHNICOLOR 40980-DVD1 DVD 1 (9) - MM CARNIVAL OF CRIME CE 2,500
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 39 of 101 130
1200522.2 19
TECHNICOLOR 40980-DVD2 DVD2(9) - MM CARNIVAL OF CRIME CE 2,500
TECHNICOLOR 41250-CD CD -HOYLE ULT CARD GAMES COLLECTION 2015 4,935
TECHNICOLOR 41290-DVD DVD - PRINT SHOP 4.0 DELUXE with PDF 441
TECHNICOLOR 41310-DVD DVD - The Print Shop Pro 4.0 with EBI 1,623
TECHNICOLOR 41372-DVD DVD - FIREHOUSE HOUNDS 8PK 2,844
TECHNICOLOR 41390-DVD DVD-PRINT SHOP 4.0 DELUXE 79
TECHNICOLOR 41400-DVD DVD - THE PRINT SHOP PRO 4.0 2,503
TECHNICOLOR 41460-DVD DVD - HOME & LAND DESIGN V18 1,459
TECHNICOLOR 41470-DVD DVD - HOME & LANDSCAPE DESIGN PREM V18 1,224
TECHNICOLOR 41480-DVD CD - GOOSEBUMPS 557
TECHNICOLOR 41517-DVD DVD - PUNCH INTERIOR DESIGN SUITE 2,466
TECHNICOLOR 41705-DVD DVD - ZOOMBINIS 1,515
TECHNICOLOR 41900-DVD1 DVD1 - SIMULATION 101 2,484
TECHNICOLOR 41910-DVD DVD - PLAY! BEACH GETAWAY 1,010
TECHNICOLOR 42010-CD CD - OFFICE SUITE 2.0 W/PDF AND LOGO 913
TECHNICOLOR 42020-DVD DVD - ADV PRE K-8 W/ZOOMBINIS AND CHESS 1,466
TECHNICOLOR 42030 - DVD DVD -TPS DLX 4.0 W/RFH&G,RFS, CCB 1,037
TECHNICOLOR 42190-CD CD - OFFICE SUITE 2.0 611
TECHNICOLOR 42370-DVD DVD - IGT SLOTS 3 PACK 2,495
TECHNICOLOR 42410-DVD DVD - SAGAS OF SHADOW 2,955
TECHNICOLOR 42420-DVD DVD - SAGAS OF MAGIC 25
TECHNICOLOR 42610-DVD DVD - SAGAS OF DISCOVERY 1,945
TECHNICOLOR 42620-DVD DVD- SAGAS OF SORCERY 5,088
TECHNICOLOR 42780-CD CD - MOVAVI VIDEO SUITE DRONE EDITION 969
TECHNICOLOR 42780-INS2 INS2 - MOVAVI VIDEO SUITE DRONE ED ND-NP 690
TECHNICOLOR 42870-DVD DVD- SAGAS OF SECRETS 1,972
TECHNICOLOR 42960-DVD DVD - HOYLE CASINO AND CARD 541
TECHNICOLOR 42970-DVD2 DVD2 - CALENDAR CREATOR V13 BONUS ART CO 2,171
TECHNICOLOR 43070-DVD DVD-DARK PARABLES9: QUEEN OF THE SANDS C 6,120
TECHNICOLOR 43110-DVD DVD SAGAS OF SHADOW AND MAGIC 441
TECHNICOLOR 43120-DVD DVD - SAGAS OF SECRETS AND SORCERY 441
TECHNICOLOR 43150-DVD DVD - BIG BUCK HUNTER ARCADE 127
TECHNICOLOR 43160-DVD DVD - SHADOW WOLF MYSTERIES: TRACKS OF T 1,663
TECHNICOLOR 43350-DVD DVD- AGENCY OF ANOMALIES 25
TECHNICOLOR 43360-DVD DVD - REDEMPTION CEMETERY 76
TECHNICOLOR 43540-DVD DVD - MYSTERY TRACKER NIGHTSVILLE & WINT 910
TECHNICOLOR 43550-DVD DVD - REDEMPTION CEMETERY 5 W/ PUPPET SH 657
TECHNICOLOR 43560-DVD DVD - WITCHES LEGACY SLUMBERING AND DARK 617
TECHNICOLOR 43570-DVD DVD - HAUNTED HOTEL DEATH & ETERNITY 758
TECHNICOLOR 43580-DVD DVD - MYSTERY TRACKER 14 W/BLACK ISLE 657
TECHNICOLOR 43690-DVD DVD-MCF RAVENHEARST 2 PACK 3,779
TECHNICOLOR 43880-CD CD-OFFICE STE W/EVERTHING PDF & LDS4 3,348
TECHNICOLOR 70646-DVD DVD - PUNCH VIACAD V9 1,111
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 40 of 101 131
1200522.2 20
(c) Other On Hand
3PL Part # On Hand
SPA WDE553800F004 705381429814 Mavis Beacon Family 2016 AMR 1,983
SPA WDE553800F005 705381438113 PrintMaster V8 Platinum 6,500
SPA WDE553800F006 705381415374 Punch! ViaCAD 2D/3D V9 + PowerPack LT DSA 2,677
SPA WDE553800F007 705381413110 The Print Shop Pro 4 w/Bonus Easy Business Imprints 2,573
SPA WDE553800F009 705381412915 The Print Shop Deluxe V4 w/Bonus Everything PDF 1,658
SPA WDE553800F015 705381413011 PrintMaster V7 Creativity Collection 48
SPA WDE553800F001 705381438809 Office Suite 2.0 w/Everything 268
(d) Finished Goods
Warehouse Material Title Quantity
4000 2218918 3D HOME ARCHITECT HOME DESIGN DELUXE V 9 1
4000 2202133 HOYLE BRIDGE CLUB (CONSIGNMENT) 1
4000 2202503 AXIS & ALLIES COLLECTOR'S EDITION (CONSI 1
4000 2215798 WESTWARD (CONSIGNMENT) 1
4000 2183169 SHARKS 2.0 (CONSIGNMENT) 1
4000 2202622 HOYLE: CLASSIC COLLECTION 2006 1
4000 2191407 ZOOMBINIS 3RD GRADE LEARNING SYSTEM XX 1
4000 2189489 CREATING KEEPSAKES SCRPBK DESIGNR DLX XX 1
4000 2208902 MEDIASHOP TUNEPLUS 2.0 (CONSIGNMENT) 1
4005 8122062 ASSASSINS CREED 3 COLLECTION AMR 1
4005 8061299 LUXOR 5: ANNIVERSERY EDITION 1
4040 8063494 PUNCH HOME AND LAND PRO V2 SB 1
4040 8122192 IGT SLOTS 100 PANDAS AMR 1
4000 2215796 SUPER GRANNY 3 (CONSIGNMENT) 2
4000 2186035 CLICKART 950K 2006 DVD (CONSIGNMENT) 2
4040 8104227 HIDDEN OBJECT ADVENTURE 5 PACK JC CS 2
4040 8127217 TREASURES OF MYSTERY COLLECTION JC 2
4040 8129781 PRINTMASTER V7 CREATIVITY COL DSA FCN CS 2
4040 8131270 IGT 100 WOLVES DELUXE 8PK JC 2
4000 2199578 SCOOBY-DOO! LIGHTS! CAMERA! MYSTERY (CON 3
4005 8063867 PRINT SHOP 23 DELUXE JC 3
4005 8066432 CSI 3 DIMENSIONS OF MURDER J AMR BBY 3
4005 8110849 MAVIS BEACON BY ULTRA KEY PLAT AMR 3
4000 2215801 DEFCON: GLOBAL NUCLEAR DOMINATION GAME ( 4
4000 2189494 PC TOOLS REGISTRY MECHANIC 5.1 (CONSIGNM 4
4000 2164885 PRINT SHOP 21 ESSENTIALS, THE (CONSIG XX 4
4005 8036867 CHAMPION DREAMS JC 4
4005 8084842 NANCY DREW GHOST DOGS MOON LAKE JC TRTN 4
4040 8120573 IGT GOLD BAR 7S 8PK DLX JC 4
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 41 of 101 132
1200522.2 21
4000 2186037 CLICKART FONTS VERSION 4 (2006) (CONSIGN 5
4000 2198916 FAMILY TREE MAKER V 16 STANDARD (CON) XX 5
4005 8115665 MYSTERY MASTERS: TWISTED TALES AMR AMZN 5
4040 8058410 PRINTMASTER 2011 PLATINUM SB FCN 5
4040 8129195 PRINTMASTER 7.0 DSA 5
4005 8097952 CASTLE AMR 6
4005 8099154 THE WITCHER ENHANCED EDITION JC CS 6
4005 8129192 PRINTMASTER V7 CREATIVITY COL DSA 6
4040 8044163 PRINT SHOP 2.0 EN/FR 6
4005 8124628 MM WEIRD PARK 3 FINAL SHOW CE AMR AMZN 7
4000 8129162 THE PRINT SHOP PRO 4.0 EASY BIZ DSA CS 8
4040 8046438 HOME & LANDSCAPE DESIGN PRO NEXGEN FR/EN 8
4005 8057542 JOJOS FASHION SHOW 1AND2 BUN JC 9
4005 8106411 MYSTERY ADVENTURE 4 PACK VOL 2 AMR 9
4005 8133263 MOVAVI VIDEO SUITE DRONE ED DSA FCN 9
4005 8115679 TWISTED LANDS: ORIGIN - TRILOG AMR AMZN 9
4000 8129776 PUNCH HOME LAND DESIGN PRE V18 DSA CS 10
4005 2186276 CLICKART 400K JC DVD CS 10
4005 8106922 OFFICE SUITE AMR CS 10
4005 8124629 MYSTERY MASTERS 9 CLUES 2 WARD AMR AMZN 10
4005 8129162 THE PRINT SHOP PRO 4.0 EASY BIZ DSA CS 10
4005 8130244 GOOSEBUMPS THE GAME AMR 10
4005 8095162 PUNCH HOME LANDSCAPE PRO V17 DSA CS 10
4040 8011275 CHESSMASTER 10TH EDITION JC 10
4040 8011288 SPLINTER CELL/PLINTER CELL PANDORA DJC 10
4040 8042322 HOYLE PUZZLE BOARD GAMES 2010 EN/FR 10
4040 8077802 PUNCH! HOME LAND PREMIUM NEXGEN3 SB(FCN) 10
4000 8070375 HAUNTED HOTEL 2 PACK JC CS 10
4000 8070376 HIDDEN OBJECT ADVENTURE 2 PA JC CS 10
4005 8110677 PRINTMASTER V6 PLATINUM DSA CS 11
4005 8113179 HOUSE OF 1K DOORS SERP FLAME CE AMR 11
4040 8129636 THE PRINT SHOP PRO 4.0 DSA 11
4000 2202139 BRAIN FOOD GAMES: CRANIUM COLLECTION 200 12
4005 8087000 SPHERA THE INNER JOURNEY JC 12
4040 8083623 PUNCH HOME LAND PRO NEXGEN3 SB FCN CS 12
4005 8060601 MAGIC ENCYCLOPEDIA JC 13
4000 8129781 PRINTMASTER V7 CREATIVITY COL DSA FCN CS 14
4000 2198831 PRINT SHOP 22 (CONSIGNMENT) 15
4005 8121959 MM TOWER OF SOULS DLX AMR 15
4005 8104229 HIDDEN OBJECT ADVENTURE 5 PACK JC 16
4040 8110564 CIM 2 WITH BONUS CIM 1 AMR 17
4040 8044158 PRINT SHOP 2.0 PROFESSIONAL EN/FR 18
4040 8043084 PRINTMASTER 18 SILVER JC 19
4000 8121682 PUNCH VIACAD 2D3D PC AND MAC V DSA OD CS 20
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 42 of 101 133
1200522.2 22
4005 8087990 HIDDEN MYSTERIES SALEM SECRETS JC 20
4005 8120574 CHRONICLES OF WITCHES AND WARLO AMR AMZN 20
4005 8093176 PUNCH WEEKEND PROJECTS DSA 20
4005 8115680 WEIRD PARK: BROKEN TUNE - COLL AMR AMZN 20
4040 8053722 MAVIS BEACON KEYBOARDING KID DSA FCN 20
4040 8044159 PRINT SHOP 2.0 PROFESSIONAL EN/FR 20
4040 8113696 PRINTMASTER V6 PLATINUM DSA FCN CS 20
4040 8119696 SON OF NOR AMR 20
4005 8083622 PUNCH HOME LAND PRO NEXGEN3 SB 21
4040 8124354 700K GAMES VERSION 2 AMR CS 21
4005 8053662 CAKE MANIA 4 JC 22
4005 8091294 PUNCH HOMELANDPREMIUM V17 DSA CS 22
4005 8025043 THE PRINT SHOP 22 STANDARD JC 23
4005 8083934 RAVENHURST AND HIDDEN EXPED JC 23
4005 8117018 HOWLVILLE THE DARK PAST AMR AMZN 24
4040 8081103 THE PRINT SHOP 3.0 DSA FCN CS 25
4005 8117259 MEXICANA DEADLY HOLIDAY AMR AMZN 27
4005 8077812 TOM CLANCY END WAR JC 28
4005 8066199 QUEST TRIO AMR BBY 28
4040 8032911 HOYLE SLOTS 2010 EN/FR 28
4040 8091296 PUNCH HOMELANDPREMIUM V17 DSA FCN CS 28
4040 8115536 MYSTERY MASTERS SPECSAGA 20PK AMR 29
4005 8129641 LOGO DESIGN STUDIO SB 30
4005 8084838 FAMILY FEUD JC TRTN 31
4040 8053332 HOME & LANDSCAPE DSGN STE NG2 FR/EN (CON 31
4005 8084867 SERIOUS SAM JC TRTN 32
4000 2200188 CALENDAR CREATOR PLATINUM (CONSIGNMENT) 33
4005 8058400 RINGPLUS JC JC 33
4005 8087426 MUMBOJUMBO PREMIUM PACK 33
4005 8054178 BROTHERS IN ARMS HELL S HIGH JC 34
4005 8115664 LOST CHRONICLES OF ZERZURA AMR AMZN 34
4040 8086150 HOYLE PUZZLE BOARD GAMES 2012 AMR FCN 34
4005 8020683 FATE UNDISCOVERED REALMS SB 36
4005 8031726 HOYLE CARD GAMES 2008 37
4040 8110842 MUMBOJUMBO 10 PACK AMR CS 38
4005 8060612 MAGIC ENCYCLOPEDIA JC 38
4005 8081093 PRINTMASTER 2012 GOLD DSA FCN 40
4005 8057540 JEWEL QUEST 3 JC 40
4005 8083602 VAMPIRE SECRETS A VAMPIRES TALE JC CS 40
4005 8086150 HOYLE PUZZLE BOARD GAMES 2012 AMR FCN 40
4005 8096905 PRINTMASTER PLATINUM DSA CS 40
4005 8086426 TREASURES OF MYSTERY ISLAND 2 JC CS 40
4005 8077817 PUNCH HOME LAND NEXGEN3 DSA 41
4005 8074595 GHOST HUNTERS JC CS 42
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 43 of 101 134
1200522.2 23
4005 8063869 PRINT MASTER1 JC 44
4040 8058411 PRINTMASTER 2011 PLATINUM SB FCN CS 44
4005 8121604 PUNCH HOMELAND DESIGN 17.5 SAMS AMR 45
4040 8136109 MAVIS BEACON ULTRAKEY 2-FAMIL AMR FCN CS 45
4040 8129634 THE PRINT SHOP DELUXE 4.0 DSA 46
4005 8091118 PUNCH VIACAD 2D PC MAC V8 DSA 47
4005 8094434 M4 TANK BRIGADE AMR 47
4005 8100676 BFG 2 PK HAUNTED MANOR 1AND 2 JC 47
4005 8077808 BROTHERS IN ARMS HELLS HIGHWAY AMR 48
4005 8065757 HOYLE SWASHBUCKLIN SLOTS SB 48
4005 8085293 HOYLE CLASSIC CARD GAMES JC CS 48
4040 8049427 HR BLOCK DELUXE 2009 SB 48
4005 8049108 JEWEL QUEST SOLITAIRE 3 JC CS 49
4005 8111979 THE PRINT SHOP 3.5 DELUXE DSA FCN 49
4005 8126490 MM SONIA WITH INBETWEEN AMR 49
4005 8015790 CSI DJC 50
4005 8116832 DEMON HUNTER CHRONICLES BEY DLX AMR AMZN 50
4005 8120211 DARK ROMANCE VAMPIRE IN LOVE CE AMR AMZN 50
4005 8121639 DEADLY PUZZLES: TOYMAKER AMR AMZN 50
4005 8115656 FORBIDDEN SECRETS: ALIEN TOWN AMR AMZN 50
4040 8050012 TORCHLIGHT DSA FCN 50
4005 8011277 GHOST RECON ADVANCED WARFIGHTER 51
4005 8117258 LOVE ALCHEMY A HEART IN WINTER AMR AMZN 51
4005 8014397 MB TEACHES TYPING 18 JC 53
4005 8076566 RESTAURANT EMPIRE JC 54
4005 8084848 FAST FOOD FEVER JC TRTN 55
4005 8049119 QUEST TRIO JC 56
4005 8114704 HORSE LOVERS ULT COMP AMR AMZN 56
4040 8058414 PRINTMASTER 2011 GOLD SB FCN 56
4005 8132569 PUNCH INTERIOR DESIGN SUITE V18 DSA 58
4005 8097330 TPS 35 DLX LDS CC DSA SAMS 58
4040 8058581 MAVIS BEACON 25 ANNIV PLATIN SB FCN 59
4005 2164670 HOYLE MAHJONGG (CONSIGNMENT) 60
4005 8089798 SPLINTER CELL MEGA PACK AMR CS 60
4005 8044152 PRINT SHOP 2.0 DELUXE 60
4005 8024160 MIND QUIZ JC 61
4005 8084841 WORD MANIA 2 JC TRTN 61
4005 8129161 THE PRINT SHOP DLX 4 WITH EVPDF DSA 62
4005 8050966 JEWEL QUEST SOLITAIRE 2 AND 3 JC CS 63
4005 8049109 MYSTERYVILLE JC 64
4040 8038323 LANDSCAPE, DECK & PATIO NEXGEN (CAN) XX 64
4005 8058644 PLAY 2 MBX AMR AMZN 65
4005 8090148 MYSTERY ADVENTURE PACK JC 65
4040 8057837 HOYLE CARD GAMES 2011 SB FCN CS 65
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 44 of 101 135
1200522.2 24
4005 8063866 PRINT SHOP 23 DELUXE JC CS 66
4005 8114039 FAMILY TALES THE SISTERS DEL ED AMR AMZN 66
4005 8085288 HOYLE CLASSIC CASINO JC 69
4005 8109512 MYSTERY 6PK JC CS 69
4005 8125491 GRIM LEGENDS SONG OF THE DARK AMR AMZN 70
4005 8115675 MOTOR TOWN: SOUL OF THE MACHIN AMR AMZN 70
4005 8117447 GHOST ENCOUNTERS DEADWOOD GFW AMR AMZN 70
4040 8130244 GOOSEBUMPS THE GAME AMR 70
4005 8086133 PUNCH VIACAD 2D 3D PC MAC V8 DSA 71
4005 8077810 CSI DEADLY INTENT JC 71
4005 8092129 3 ADDICTING GAMES PUZZLE PACK JC 71
4005 8115663 L2P CHESS FRITZ COMPLETE 3 PACK AMR AMZN 74
4040 8044127 PRINTMASTER PLATINUM 2.0 EN/FR 74
4005 8074233 TREASURES OF MYSTERY ISLAND 2 JC 76
4005 8083634 THE PRINT SHOP 3.0 DELUXE DSA 78
4005 8059737 THE TREASURES OF MYSTERY ISL JC 79
4000 8131547 OFFICE SUITE 2.0 AMR CS 80
4000 8134293 CALENDAR CREATOR WITH BONUS CLIP DSA CS 80
4005 8084843 NANCY DREW HAUNTED CAROUSEL JC TRTN 80
4005 8093652 REEL DEAL SLOTS ADVENTURE 2 PK JC 81
4005 8114702 LIVING LEGENDS ICE ROSE CE AMR AMZN 81
4040 8044134 PRINTMASTER GOLD 2.0 EN/FR 81
4005 8015799 SPLINTER CELL CHAOS THEORY JC 83
4005 8058587 HOYLE CASINO GAMES 2011 SB FCN 85
4005 8125335 MYSTERY MASTERS PSYCHO TRAIN DE AMR AMZN 85
4005 8115655 ETERNAL JOURNEY: NEW ATLANTIS AMR AMZN 85
4040 2186276 CLICKART 400K JC DVD CS 87
4005 8012218 DOGZ AND CATS DJC 88
4005 8122589 MYSTERY MASTERS FROZEN HOPE AMR AMZN 90
4040 8014398 MB TEACHES TYPING 18 JC 90
4005 8083601 VAMPIRE SECRETS A VAMPIRES TALE JC 91
4005 8115659 HOUSE OF 1,000 DOORS: PALM OF AMR AMZN 91
4005 8115660 NIGHTMARES FROM THE DEEP: THE AMR AMZN 92
4005 8092523 PAINTSHOPPROX4PRO SB DTC 92
4005 8077683 REEL DEAL SLOTS MYSTIC FORES JC CS 96
4005 8134296 MAVIS BEACON ULTRAKEY 2-FAMILY AMR 96
4005 8097126 PUNCH INTERIOR DESIGN SUITE V17 DSA 97
4005 8095846 SAMS HSA 2012 WITH BONUS MATH DSA SAMS 99
4005 8095629 THE LEGENDS 5 GAME PACK SB 99
4005 8115667 VEIL OF MYSTERY: SEVEN LITTLE AMR AMZN 99
4005 8081094 PRINTMASTER 2012 PLATINUM DSA CS 100
4005 8092128 LUXOR 5TH PASSAGE JC CS 100
4005 8103820 DARK SECRETS 4PK JC CS 100
4005 8135739 VIACAD 2D3D V9 WPOWERPACK LT DSA STAP CS 100
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4005 8095871 TPS 3 0 DLX WITH CLICKART 2MIL DSA SAMS 100
4005 8113216 SNARKBUSTERS 3-PACK AMR AMZN 100
4005 8100680 DARK SECRETS 4PK JC 100
4040 8011276 CHESSMASTER 10TH EDITION JC 100
4040 8031725 HOYLE CASINO 2008 100
4005 8087604 RAVENHURST AND HIDDEN EXPED JC CS 100
4005 8087001 SPHERA THE INNER JOURNEY JC CS 101
4005 8061297 UNLIKELY SUSPECTS 102
4005 8083562 VAMPIRE MANSION A LINDA HYDE JC 103
4005 8095845 SAMS ESA 2012 WITH BONUS MB KK AMR SAMS 104
4005 8120082 MYSTERY MASTERS NIGHTMARES CE AMR AMZN 105
4005 8009966 MAVIS BEACON TEACHES TYPING PLATINUM 20 106
4005 8044125 PRINTMASTER PLATINUM 2.0 106
4040 8108857 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 109
4005 8107933 MORTIMER BECKETT COLLECTION JC CS 110
4005 8050969 MYSTERIOUS CITY ADV VEGAS CA JC 110
4040 8020700 HOYLE ENCHANTED PUZZLES JC CS 110
4040 8063413 TORCHLIGHT MAC SB 110
4040 8050968 MAH JONG QUEST 1 AND 2 JC CS 112
4005 8090153 EURPAC MUMBOJUMBO JC ASSORTMENT 113
4005 8081104 THE PRINT SHOP 3.0 DSA FCN 114
4005 8116893 INTO THE HAZE AMR 115
4005 8085712 FOOD FRENZY 10 TASTY GAMES JC 116
4005 8115537 COGNITION COMP SAGA 4PK AMR AMZN 116
4005 8049131 VIRTUAL VILLAGERS JC 118
4005 8081089 PRINTMASTER 2012 GOLD DSA 119
4005 8126639 MM FAMILY VACATION BONUS BUNDLE AMR 119
4005 8111419 HEROES OF MIGHT MAGIC 4 & 5 AMR 120
4005 8124627 MM PARANORMAL PURSUIT THE GIFTE AMR AMZN 120
4005 8115668 BRINK OF CONSCIOUSNESS: DORIAN AMR AMZN 120
4040 8064073 DISNEY FUN SKILLS 1 TO 3 201 SB FCN 120
4040 8044119 ANCIENT SECRETS QUEST FOR THE GO 128
4005 8120014 THE WORLD LEGENDS KASHCHEY AMR AMZN 130
4040 8044164 PRINT SHOP 2.0 EN/FR 130
4005 8025109 FAR CRY JC 131
4005 8093668 LOST SECRETS 4 PACK JC 132
4005 8096974 HOYLE CASINO GAMES 2013 AMR 138
4040 8058449 HOME & LANDSCAPE DSGN NXGN (WALMART CAN) 138
4000 2188618 PRINTMASTER PLATINUM V 17 (CONSIGNMENT) 140
4040 8053730 MATH ADVANTAGE 2011 DSA FCN 140
4005 8089354 CHAINZ GALAXY JC 143
4005 8052315 ASSASSINS CREED JC JC 146
4005 8083585 AMERICAN CIVIL WAR JC 147
4005 8094592 MYSTERY VAULT EGAMES JC 148
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 46 of 101 137
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4040 8111951 IGT SLOTS KITTY GLITTER 8PK JC CS 148
4005 8116264 FAR CRY 3 BLOOD DRAGON AMR 149
4005 8009962 MAVIS BEACON 20 DELUXE 150
4005 8125877 EASY BUSINESS IMPRINTS AMR CS 150
4040 8111978 PRINTMASTER V6 PLATINUM DSA FCN 150
4005 8084956 EURPAC CASUAL J/C ASSORTMENT 151
4040 8081093 PRINTMASTER 2012 GOLD DSA FCN 151
4040 8058585 MAVIS BEACON 25 ANNIV DELUXE SB FCN 155
4005 8075146 500K GAMES AMR 155
4005 8115661 SACRA TERRA: KISS OF DEATH - C AMR AMZN 157
4005 8085286 HOYLE CLASSIC PUZZLE BOARD JC 159
4000 2189492 CREATING KEEPSAKES SCRAPBOOK DESIGNER PL 160
4000 8132568 PUNCH INTERIOR DESIGN SUITE V18 DSA CS 160
4040 8086148 HOYLE CARD GAMES 2012 AMR FCN 160
4000 8106922 OFFICE SUITE AMR CS 161
4005 8110845 MAVIS BEACON BY ULTRA KEY DLX AMR 161
4005 8099263 MIDNIGHT MYSTERIES 4 PACK AMR 163
4005 8057596 HOYLE SLOTS 2011 SB FCN 164
4040 8086134 PUNCH VIACAD 2D 3D PC MAC V8 DSA FCN CS 165
4040 8108858 PUNCH INTERIOR DESIGN SUITE V17 DSA FCN 165
4005 8088391 CHOPLIFTER AMR 168
4005 8108473 HOYLE CHESS JC 168
4005 8086281 MARGRAVE MANOR 3 170
4005 8089363 FICTION FIXERS 2 JC 172
4005 8092064 TREASURES OF MYSTERY COLLECTION AMR 172
4005 8091288 LEGENDS OF DREAMS JC 173
4040 8091287 ASSASSINS CREED 2 JC CS 175
4040 8053330 HOME & LANDSCAPE DESIGN SUITE NG2 FR/EN 175
4005 8086136 FARM FRENZY FOREVER AMR 175
4005 8083633 THE PRINT SHOP 3.0 DELUXE DSA CS 177
4005 8099155 4 GREAT GAMES DIAMOND JC 178
4005 8135734 VIACAD 2D3D V9 WPOWERPACK LT DSA STAP 178
4005 8107420 TWISTED LANDS ORIGIN BONUS 4PK JC 178
4040 8097927 MAHJONGG PLATINUM 5 DLX ED JC CS 178
4005 8052303 RAINBOW 6 VEGAS 2 JC JC 179
4005 8086148 HOYLE CARD GAMES 2012 AMR FCN 179
4005 8114703 SACRA TERRA ANGELIC NIGHT CE AMR AMZN 180
4000 2173494 MAVIS BEACON 17 STANDARD (CONSIGNMENT) 181
4005 8115548 LEFT IN THE DARK NO ONE ONBOARD AMR AMZN 181
4005 8106931 EXORCIST III BONUS EDITION 4PK JC 181
4005 8057833 CALENDAR CREATOR DELUXE V12. SB FCN 182
4005 8092522 PAINTSHOPPROX4ULTIMATE SB DTC 182
4040 8063487 PUNCH INTERIOR DESIGN NEXGEN SB FCN 182
4005 8057575 HOYLE SLOTS 2011 SB 184
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 47 of 101 138
1200522.2 27
4005 8083640 THE PRINT SHOP 3.0 PRO DSA 184
4005 8101813 REC ROOM GAMES JC 186
4005 8085292 HOYLE CLASSIC CARD GAMES JC 187
4005 8116260 LIVING LEGENDS FROZEN BEAUTY CE AMR AMZN 190
4005 8087870 REEL DEAL CASINO GOLD RUSH JC 191
4005 8125878 EASY BUSINESS IMPRINTS AMR 191
4005 8131032 PLAY SIMULATIONS 101 AMR 192
4005 8081436 STALKER JC 195
4005 8086430 LEGENDS 2 HIDDEN RELICS JC 197
4000 8111904 THE PRINT SHOP 3.5 PROFESSIONAL DSA 198
4040 8096681 HOYLE 2013 CARD, PUZZLE, BOARD AMR CS 199
4000 8133172 PUNCH HOME LAND DESIGN PRE V1 DSA FCN CS 200
4005 8009967 MAVIS BEACON 20 PLATINUM 200
4005 8107936 MORTIMER BECKETT COLLECTION JC 200
4005 8052316 ASSASSINS CREED JC JC CS 200
4005 8074541 MYSTERY 4 PACK 200
4005 8086280 GLOWFISH AMR 200
4005 8086282 7 WONDERS 4 AMR 200
4005 8085299 IGT SLOTS CLEOPATRA AMR CS 200
4005 8086149 HOYLE CARD GAMES 2012 AMR FCN CS 200
4005 8086427 250000 GAMES JC CS 200
4005 8115654 DARK STROKES: SINS OF THE FATH AMR AMZN 200
4040 8057833 CALENDAR CREATOR DELUXE V12. SB FCN 200
4005 8100681 NIGHTMARES FROM THE DEEP 4PK JC 205
4005 8120080 MM AT ISLE OF DEAD SHIPS PLT ED AMR AMZN 206
4005 8116272 DREAM DAY WEDDING COLLECTION JC 208
4005 8077731 HIDDEN GEMS JC CS 211
4005 8050971 JEWEL QUEST 4 AMR 212
4005 8059736 WORLD OF MAHJONGG JC 212
4005 8110842 MUMBOJUMBO 10 PACK AMR CS 213
4005 8120876 MYSTERY MASTERS PANOPTICON AMR AMZN 216
4005 8108472 HOYLE CHESS JC CS 217
4005 8089797 SPLINTER CELL MEGA PACK AMR 227
4005 8087601 ASSASSINS CREED 2 JC 227
4005 2186275 CLICKART 400K DVD 229
4000 8110686 WORLD IN CONFLICT JC CS 230
4005 8085582 HIDDEN MYSTERIES TITANIC 2 AMR 232
4005 8081095 PRINTMASTER 2012 PLATINUM DSA 232
4005 8104266 THE ULTIMATE 25 GAME PACK JC 232
4005 2164669 HOYLE MAHJONGG 234
4005 8116263 CALL OF JUAREZ 3 PACK AMR 236
4005 8089371 MIDNIGHT MYSTERIES 4 AMR 246
4005 8110671 LEGENDS OF THE MIST JC 247
4005 8068217 PRINTMASTER 2011 GOLD DSA WMRT 247
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 48 of 101 139
1200522.2 28
4005 8092127 LUXOR 5TH PASSAGE JC 250
4005 8114714 WHISPERED STORIES SANDMAN AMR AMZN 250
4040 8031726 HOYLE CARD GAMES 2008 250
4005 8127613 LIVING LEGENDS WRATHOFTHE BEAST AMR 253
4005 8089203 6 GREAT GAMES AMR 255
4005 8110850 SHADOW CHRONICLES 6PK JC 256
4005 8093759 HIDE AND SECRET BONUS ED 4 PACK JC 257
4040 8064063 PUNCH HOME AND LAND DESIGNER SB FCN 258
4005 8085290 HOYLE CLASSIC SLOT GAMES JC 259
4005 8109249 ELEMENTARY ADVANTAGE AMR 260
4005 8092062 MYSTERY ADVENTURE PACK JC CS 260
4005 8085296 HIDDEN MYSTERIES FORBIDDEN CITY AMR 263
4005 8116852 MYSTERY HERITAGE COLLECTORS ED AMR 264
4040 8075204 MATH ADVANTAGE 2012 AMR FCN 267
4005 8124779 JAGGED ALLIANCE FLASHBACK AMR AMZN 270
4005 8109131 EVERYTHING PDF AMR 272
4005 8076232 PUNCH HOMELAND WEEKEND PROJE JC 274
4005 8083582 PACIFIC STORM JC 278
4005 8092126 VAMPIRES V ZOMBIES BONUS ED JC CS 278
4040 8057836 HOYLE CARD GAMES 2011 SB FCN 280
4040 8058587 HOYLE CASINO GAMES 2011 SB FCN 280
4040 8058415 PRINTMASTER 2011 GOLD SB FCN CS 281
4005 8129195 PRINTMASTER 7.0 DSA 283
4005 8052060 MAVIS BEACON KEYBOARDING KID SB 287
4005 8090113 MARGRAVE MANOR 1 AND 2 JC 287
4005 8057841 HOYLE SWASHBUCKLIN SLOTS SB 288
4005 8090579 4 GREAT GAMES GOLD JC 289
4000 8108857 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 290
4005 8089205 MAVIS BEACON KEYBOARDING KIDS JC 290
4005 8110688 BEYOND GOOD AND EVIL JC 290
4005 8124630 RUSH FOR GLORY BONUS EDITION AMR AMZN 290
4005 8110692 RAYMAN 3 WITH RAYMAN 2 BONUS JC 292
4000 8097951 CASTLE AMR CS 297
4005 8097927 MAHJONGG PLATINUM 5 DLX ED JC CS 298
4005 8073059 CAMPFIRE LEGENDS COLLECTION SB 299
4005 8100677 BFG 2PK DARK PARABLES1AND 2 JC 299
4000 8133490 TPS DLX 4.0 HSN BUNDLE LIC OEM 300
4005 8081100 THE PRINT SHOP 3.0 DSA CS 300
4005 8115526 CLOCKWORK TALES CE AMR AMZN 300
4005 8061300 SAMANTHA SWIFT 4 300
4040 8052315 ASSASSINS CREED JC JC 300
4005 8038494 HEROS EPIC EDITION 301
4040 8044135 PRINTMASTER GOLD 2.0 EN/FR 301
4005 8097906 LEGENDS OF THE PAST JC 302
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 49 of 101 140
1200522.2 29
4000 2213214 MAVIS BEACON TEACHES TYPING 17 STANDARD 310
4005 8100678 BFG 2PK MYSTERY CASE FILES RRR JC 310
4040 8044154 PRINT SHOP 2.0 DELUXE EN/FR 310
4005 8097899 PRINTMASTER GOLD DSA 318
4005 8110994 PRINTMASTER V6 PLATINUM DSA 320
4005 8115547 ECHOES OF SORROW 2 AMR AMZN 320
4005 8104452 OFFICE SUITE AMR 327
4000 8110841 MAVIS BEACON BY ULTRA KEY DLX AMR CS 332
4005 8110846 MUMBOJUMBO 10 PACK AMR 332
4040 8133261 MOVAVI VIDEO SUITE DRONE ED DSA FCN CS 332
4005 8107419 REEL DEAL SLOTS CLEO FAR EAST JC 335
4005 8107417 DARK STROKES 4PK JC 335
4005 8110693 REEL DEAL SLOTS 4 PACK JC 339
4005 8131487 PRINTSHOP 4 DLX WRFHG RFS CCB DSA SAMS 341
4005 8057563 MYMEMORIES WEDDING STUDIO SB 347
4005 8120081 DARK STROKES 2 AMR AMZN 348
4005 8093937 REDRUM AMR 359
4005 8113217 THE GIFT AMR 360
4005 8089370 PICKERS ADVENTURES IN RUST AMR 361
4005 8094914 SLEEPY HOLLOW JC 363
4005 8116894 MYSTERIES OF THE UNDEAD AMR 363
4005 8127614 HOUSE OF 1000 DOORS 4 AMR AMZN 364
4005 8097907 LEGENDS OF THE SHADOWS JC 366
4005 8116889 PORTAL OF EVIL COLLECTORS ED AMR 369
4005 8090575 4 GREAT GAMES JC 370
4005 8121446 MYSTERY MASTERS MYS OFTHE HEART AMR 374
4005 8098253 PC GHOSTS AND DEMONS 6 PK JC WMRT 376
4040 8063488 PUNCH INTERIOR DESIGN NEXGEN SB FCN CS 376
4005 8091298 LUXOR EVOLVED AMR 383
4005 8036813 CSI 3 DIMENSIONS OF MURDER JC 385
4005 8110565 COOKING ACADEMY COMPENDIUM AMR 385
4005 8093938 4 ELEMENTS II AMR 387
4005 8115672 DEPTHS OF BETRAYAL - COLLECTOR AMR AMZN 388
4040 8064062 PUNCH HOME AND LAND PRO V2 SB FCN CS 389
4005 8116888 ALEX HUNTER LORD OF THE MIND PE AMR 391
4005 8100596 LEGENDS OF FATE JC CS 398
4005 8107716 HID MYS LOST SECRET MEGA PK V2 AMR AMR 399
4005 8087991 HIDDEN MYSTERIES SALEM SECRETS JC CS 400
4040 8057595 HOYLE PUZZLE AND BOARD 2011 SB FCN CS 400
4000 8095162 PUNCH HOME LANDSCAPE PRO V17 DSA CS 403
4005 8106928 ASSASSINS CREED BROTHERHOOD JC 403
4040 8129782 THE PRINT SHOP DLX 4 WITH EVP DSA FCN CS 404
4005 8076548 TITANIC AND HOLLYWOOD MYSTER JC 409
4040 8064064 PUNCH HOME AND LAND DESIGNER SB FCN CS 412
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 50 of 101 141
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4005 8107934 CHOPLIFTER JC 419
4005 8119696 SON OF NOR AMR 419
4005 8077685 REEL DEAL SLOTS GHOST TOWN JC CS 423
4005 8116496 HID MYS LOST SECRET MEGA P KV2 AMR 424
4040 8081098 PRINTMASTER 2012 PLATINUM DSA FCN CS 424
4005 8106935 MATCH3 MASTER 10PK JC 426
4005 8113210 LAKE HOUSE CHILDREN SILENCE CE AMR AMZN 426
4040 8081099 PRINTMASTER 2012 PLATINUM DSA FCN 426
4005 8103819 BRINK OF CONSCIOUSNESS 4PK JC CS 429
4005 8115546 9 CLUES SCRT OF SERP CREEK AMR AMZN 431
4005 8110835 OMINOUS PATHS 6 PACK JC 439
4005 8115669 CRAZY MACHINES 2 AMR AMZN 439
4000 8077715 VIRTUAL DJ DSA CS 446
4040 8083638 THE PRINT SHOP 3.0 DELUXE DSA FCN 449
4005 8090576 4 GREAT GAMES JC CS 453
4000 8117438 ADVANTAGE EDUCATION AMR CS 460
4005 8115671 DEADLY VOLTAGE: RISE OF THE IN AMR AMZN 462
4005 8085578 HIDDEN MYSTERIES ROYAL FAMILY S AMR 463
4005 8092063 LEGENDS OF TERROR COLLECTION AMR 463
4005 8131344 PLAY MAXIMUM FUN COLLECTION AMR 464
4005 8106924 MYSTERY MASTERS WICKED WORLDS AMR 471
4005 8129636 THE PRINT SHOP PRO 4.0 DSA 473
4005 8115530 NIGHTMARES SIRENS CALL CE AMR AMZN 480
4005 8115670 CURSE OF THE WEREWOLVES - DELU AMR AMZN 480
4040 8121445 MYSTERY MASTERS SUPERNATURAL ST AMR CS 485
4040 8111418 ICE ROAD TRUCKERS SWAMP PEOPLE AMR CS 490
4040 8133170 PUNCH INTERIOR DESIGN SUITE V DSA FCN CS 492
4005 8087603 MYSTERY MASTERS MEGA COLL V2 DSA OMAX CS 492
4000 8133260 MOVAVI VIDEO SUITE DRONE ED DSA CS 500
4000 8133261 MOVAVI VIDEO SUITE DRONE ED DSA FCN CS 500
4005 8086134 PUNCH VIACAD 2D 3D PC MAC V8 DSA FCN CS 500
4040 8097951 CASTLE AMR CS 500
4040 8064061 PUNCH HOME AND LAND PRO V2 SB FCN 500
4040 8085299 IGT SLOTS CLEOPATRA AMR CS 500
4040 8097146 MYSTERY PACK CRYSTAL MOONSTONE JC CS 500
4005 8106933 FARM FRENZY 4 BONUS PACK JC 506
4040 8077803 PUNCH! HOME LAND PREM NEXGEN3 SB(CS)(FCN 509
4005 8115782 OMINOUS PATHS 6 PACK JC CS 510
4005 8114711 MM LIGHTER SIDE OF ADVENTURE AMR AMZN 515
4005 8086132 PUNCH VIACAD 2D 3D PC MAC V8 DSA CS 518
4000 8110677 PRINTMASTER V6 PLATINUM DSA CS 519
4005 8083711 MIDNIGHT MYSTERIES 3 AMR 522
4005 8115527 ENGMATIS MISTS OF RNWD CE AMR AMZN 524
4005 8111903 THE PRINT SHOP 3.5 PROFESSIONAL DSA CS 528
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 51 of 101 142
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4040 8122191 IGT SLOTS 100 PANDAS AMR CS 528
4005 8130945 CASTLE W/TITANIC 1&2 BUCKINGHAM JC WMRT 540
4040 8072887 PUNCH VIACAD 2D PC MAC V7 SB FCN 540
4040 8033319 HOME&LAND DESIGN NEXGEN FR/EN (CONSIGN) 540
4005 8110847 SLINGO 7 PACK AMR 541
4005 8114709 DARK ARCANA THE CARNIVAL BE AMR AMZN 544
4005 8115532 STRAY SOULS2 STOLENMEM CE AMR AMZN 551
4005 8094360 AMERICAN PICKERS AMR 553
4005 8077684 REEL DEAL SLOTS GHOST TOWN JC 558
4005 8115528 FOREST LEGENDS CALLOFLOVE CE AMR AMZN 561
4005 8114712 SHIVER POLTERGEIST CE AMR AMZN 566
4005 8094739 LOST SECRETS 4 PACK JC CS 581
4005 8115542 DARK SANCTUARIES 6 PK JC 584
4005 8100598 LEGENDS OF FATE JC 594
4005 8129777 PUNCH HOME LAND DESIGN PRE V18 DSA 595
4040 8044128 PRINTMASTER PLATINUM 2.0 EN/FR 600
4005 8114708 CRUEL GAMES RED RIDING HOOD AMR AMZN 604
4005 8110668 LEGENDS OF THE MIST JC CS 620
4005 8095161 PUNCH HOME LANDSCAPE PRO V17 DSA 623
4005 8093760 HOUSE OF 1000 DOORS JC 636
4005 8111024 MYSTERY MASTERS MYSTICAL REALM AMR 636
4040 8044153 PRINT SHOP 2.0 DELUXE EN/FR 639
4005 8091291 PUNCH LAND DECK PATIO NEXGEN3 DSA 644
4005 8135880 SHADOW WOLF MYSTERIES 5 AMR 653
4040 8113822 IGT SLOTS PARADISE GARDEN AMR CS 663
4005 8097821 HOYLE 3 PACK JC CS 697
4005 8129196 PRINTMASTER V7 CALENDAR CREATOR DSA 697
4005 8115529 NEARWOOD CE AMR AMZN 720
4040 8058588 HOYLE CASINO GAMES 2011 SB FCN CS 730
4005 8114103 OFFICE SUITE PDF LOGO DESIGN AMR 732
4040 8117438 ADVANTAGE EDUCATION AMR CS 748
4005 8100679 BRINK OF CONSCIOUSNESS 4PK JC 752
4005 8121562 THE PRINT SHOP 3.5 DELUXE SAMS AMR 777
4005 8127217 TREASURES OF MYSTERY COLLECTION JC 797
4040 8086146 HOYLE CASINO GAMES 2012 AMR FCN 799
4005 8109513 TREASURES OF MYSTERY 6PK JC CS 800
4040 8111979 THE PRINT SHOP 3.5 DELUXE DSA FCN 803
4005 8115676 SHADOWS: PRICE FOR OUR SINS - AMR AMZN 826
4005 8089199 FISHDOM 3 PACK JC 837
4040 8130949 THE PRINT SHOP PRO 4.0 EASY B DSA FCN CS 840
4005 8110689 DEER HUNT LEGENDS JC 847
4005 8110672 NOVEMBER 1963 GRACELAND 2 PK JC 851
4000 8129191 PRINTMASTER V7 CREATIVITY COL DSA CS 852
4000 8097893 PRINTMASTER GOLD DSA CS 855
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 52 of 101 143
1200522.2 32
4000 8113822 IGT SLOTS PARADISE GARDEN AMR CS 871
4005 8098285 PLAY 101 COLLECTION JC 871
4005 8092125 VAMPIRES V ZOMBIES BONUS ED JC 874
4005 8106925 ASSASSINS CREED BROTHERHOOD JC CS 901
4000 8091294 PUNCH HOMELANDPREMIUM V17 DSA CS 910
4005 8104228 AMAZINGLY ADDICTIVE PUZZLE PACK JC 940
4005 8104263 THE ULTIMATE 25 GAME PACK JC CS 949
4040 8080267 VIRTUAL DJ DSA FCN 950
4005 8097928 MAHJONGG PLATINUM 5 DLX ED JC 983
4000 8121449 PLAY FARMS AND GARDENS 25 PACK JC 1,000
4005 8101812 REC ROOM GAMES JC CS 1,000
4005 8110669 NOVEMBER 1963 GRACELAND 2 PK JC CS 1,000
4040 8057594 HOYLE PUZZLE AND BOARD 2011 SB FCN 1,000
4005 8106998 BFG 2PK DARK PARABLES1AND 2 JC CS 1,002
4005 8121449 PLAY FARMS AND GARDENS 25 PACK JC 1,005
4040 8057596 HOYLE SLOTS 2011 SB FCN 1,009
4005 8111023 700K GAMES AMR 1,029
4005 8138846 MYSTERY CASE 14 WITH BLACK ISLE AMR 1,037
4040 8078278 PUNCH HOME LAND NEXGEN3 DSA FCN 1,037
4005 8086138 MYSTERY MASTERS MEGA COLL V2 AMR 1,072
4005 8117766 STRONGHOLD CRUSADER 2 AMR 1,141
4005 8124355 700K GAMES VERSION 2 AMR 1,180
4005 8111778 THE ULTIMATE HOYLE COLLECTION AMR 1,195
4005 8085583 HIDDEN MYSTERIES TITANIC 2 AMR CS 1,200
4005 8138781 REDEMPTION CEMETERY 5 AMR 1,207
4005 8137030 AGENCY OF ANOMALIES JC 1,212
4005 8099264 THE ULTIMATE MYSTERY GAME PACK JC CS 1,229
4005 8129227 MM CARNIVAL OF CRIME AMR 1,237
4005 8109511 LEGENDS OF TERROR 6PK JC CS 1,252
4000 8110848 MAVIS BEACON BY ULTRA KEY PLAT AMR CS 1,268
4005 8085298 IGT SLOTS CLEOPATRA AMR 1,273
4005 8097904 LEGENDS OF THE PAST JC CS 1,329
4005 8092578 SLEEPY HOLLOW JC CS 1,348
4005 8137031 REDEMPTION CEMETERY JC 1,357
4005 8132629 PUNCH LAND DECK PATIO V18 DSA 1,360
4005 8109650 ELEMENTARY ADVANTAGE AMR CS 1,370
4005 8110249 HAUNTED HOTEL 3AND4 DBL PK JC CS 1,399
4040 8072888 PUNCH VIACAD 2D PC MAC V7 SB FCN CS 1,400
4005 8096623 MYSTERY VAULT EGAMES JC CS 1,424
4005 8120572 IGT 100 WOLVES DELUXE 8PK JC WMRT 1,445
4005 8058344 HOYLE MAHJONG JC 1,460
4040 8096664 HOYLE MAHJONGG AND PUZZLE BOARD JC CS 1,488
4005 8133947 SAGAS OF SECRETS JC 1,490
4040 8129780 PRINTMASTER V7 CALENDAR CREAT DSA FCN CS 1,520
Case 17-42726 Doc 295 Filed 10/27/17 Entered 10/27/17 09:09:02 Desc Main Document Page 53 of 101 144
1200522.2 33
4040 8081092 PRINTMASTER 2012 GOLD DSA FCN CS 1,521
4005 8102351 LEGENDS OF TERROR COLLECTION AMR 1,522
4005 8110018 SHADOW CHRONICLES 6PK JC WMRT 1,523
4040 8104226 AMAZINGLY ADDICTIVE PUZZLE PACK JC CS 1,536
4005 8107418 HAUNTED HOTEL 3AND4 DBL PK JC 1,569
4005 8115536 MYSTERY MASTERS SPECSAGA 20PK AMR 1,590
4005 8063868 PRINT MASTER1 JC CS 1,607
4005 8123231 PLAY MATCH MASTER JC 1,607
4005 8110684 RAYMAN 3 WITH RAYMAN 2 BONUS JC CS 1,630
4005 8096666 HOYLE 3 PACK JC 1,630
4005 8115544 MYSTERY 101 JC 1,701
4000 2196860 TURBOCAD DESIGNER V 12.0 (STAPLES) 1,708
4005 8133262 MOVAVI VIDEO SUITE DRONE ED DSA 1,776
4005 8110017 OMINOUS PATHS 6PK JC WALMART WMRT 2,000
4005 8116274 HOYLE ILLUSIONS ADVENTURE 6PK JC 2,011
4005 8074393 FATE THE CURSED KING AMR 2,069
4005 8076549 TITANIC AND HOLLYWOOD MYSTER JC CS 2,159
4005 8085713 FOOD FRENZY 10 TASTY GAMES JC CS 2,184
4005 8130977 MM AMAZING JOURNEYS JC 2,294
4005 8134232 HOYLE CASINO AND CARD COLL AMR 2,314
4005 8103931 ANGELICA WEAVER AMR 2,381
4000 8125913 TOTAL DEFENSE PREMIUM ISS V10 HHG 2,430
4005 8110834 MYSTERY LEGENDS PACK JC 2,511
4005 8138764 HAUNTED DEATH ETERNITY JC 2,607
4005 8131343 OFFICE SUITE 2 EPDF LOGO DESIGN AMR SAMS 2,635
4005 8135309 DARK PARABLES 9 CE AMR 2,649
4005 8138765 MYSTERY TRACKERS NIGHT WINTER JC 2,667
4005 8136123 SAGAS OF DREAMS JC 2,829
4000 8151881 PRINTMASTER V8 AMR FCN CS 2,850
4005 8096903 PRINTMASTER PLATINUM DSA 2,897
4005 8115535 MYSTERY MASTERS MZOFMYS 20PK AMR 2,932
4005 8135818 BIG BUCK HUNTER ARCADE WMRT AMR WMRT 2,946
4000 8129779 HOYLE OFFICIAL CARD GAMES AMR FCN CS 2,960
4005 8126107 IGT CLEO PARADISE 2PK AMR 3,007
4005 8129775 PUNCH HOME LAND DESIGN V18 SAMS DSA SAMS 3,084
4005 8138766 WITCHES LEGACY SLUMBERING THRON JC 3,197
4000 8126106 IGT CLEO PARADISE 2PK AMR CS 3,290
4005 8132693 SAGAS OF SORCERY JC 3,330
4005 8120573 IGT GOLD BAR 7S 8PK DLX JC 3,392
4005 8130947 IGT FIREHOUSE HOUNDS 8PK JC 3,560
4005 8122192 IGT SLOTS 100 PANDAS AMR 3,619
4005 8113823 IGT SLOTS PARADISE GARDEN AMR 3,974
4005 8131052 PLAY BEACH GETAWAY JC 3,980
4005 8132692 SAGAS OF DISCOVERY JC 4,009
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4005 8114102 OFFICE SUITE PDF LOGO DESIGN AMR CS 4,500
4005 2140164 ENCORE J/C ASSORTMENT (RETAILER SPECIFIC 4,520
4005 8128640 PLAY MAHJONG TITANIUM COLLECT JC WMRT 4,606
4005 8121447 MYSTERY MASTERS SUPERNATURAL ST AMR 4,628
4005 8132309 IGT 3 PACK PANDAS CLEO PARADISE AMR 4,650
4000 8139268 MYMEMORIES7 WEBI CC2 HSN LIC OEM 4,999
4005 8140079 LEAGUE OF LIGHT 2 PACK JC 5,060
4005 8140080 MCF RAVENHEARST 2 PACK JC 5,300
4005 8115545 SECRET VISIONS 6 PK JC 5,609
4005 8132427 SAGAS OF SHADOW JC WMRT 5,630
4005 8116275 PLAY MORE 101 JC 5,865
4005 8115543 FORBIDDEN SOULS 7 PK JC 6,005
4005 8132426 SAGAS OF MAGIC JC 7,140
4005 8116499 IGT SLOTS AZTEC TEMPLE 8 PACK JC 9,988
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SCHEDULE 2.1(c)
TRANSFERRED INTELLECTUAL PROPERTY
(a) Trademarks:
(i) Owned Trademarks:
Navarre & Navarre (Stylized)(x7) Advantage (Stylized)(x2) PrecisionPoint Sharkcad (Stylized) Viva Media Viacad Slot City SharkCAD Pro (& Design) RealModel Punch! Software Design PrecisionPoint Mystery Masters Logicursor High School Advantage Fun & Skills Pack Encore Software & Design Encore Education Encore A Navarre Corporation Company & Design Encore A Navarre Corporation Company Encore (x2) Elementary Advantage Architectural Series 3d Customer Workshop Punch! Software Robot Arena Encore Mystery Masters Viva Media 3D Home Architect Encore Software & Design (in Canada) Encore Software (in Canada) Encore Software (in Australia) Encore Software (DEAD) Punch! University (DEAD) Master Landscape & Home Design (DEAD) Design Unlimited (DEAD) Technology That Thinks as You Draw (DEAD) Nexgen (DEAD) Professor Fuji’s Kakuro (DEAD)
(ii) Co-Owned Trademarks (50% ownership in each by Seller):
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Goliath (reg. no. 5,241,958) co-owned with Alawar Media S.A. of Luxembourg Robot Arena (reg. no. 5, 276,834) co-owned with Gabriel Interactive of Decatur, Alabama Buildanauts (serial no. 86381973) co-owned with Touchtilt Games of Halifax, Nova Scotia (b) Copyrights
(i) Owned Copyrights:
COPYRIGHT REGISTRATION NO. DATE Hoyle Puzzle A Board 2011 TX0007263234 11/26/10 CADD Pro user manual TX0006059071 9/8/04 CADD Pro Software/interfaces TX0006037788 9/8/04 Home design complete TX0005917849 4/14/04 Super home suite TX0005945216 4/16/04 5 in a home design TX0005917845 4/16/04 Professional Home Design suite TX0005926219 4/16/04 Professional home design suite plat TX0005926175 4/16/04 Master Landscape & home design TX0005926235 4/13/04 Home design Architectural Series 18 TX0005926788 4/16/04 Home design architectural TX0005917846 4/16/04 Ultimate deck & landscape TX0005917848 4/17/04 Master Landscape Pro & home design: 12 integrated programs that work as one TX0005926253 4/13/04 3D Home Design Suite Deluxe 4.0 TX0005601112 8/30/02 Personal Home Invent V 3.0 Vols 1-2 TX0004332739 7/16/96
(ii) Co-owned Unregistered Copyrights with Fakt Software GmbH of Leipzig Germany:
Crazy Machines Golden Gears (software) Back to the Shop Add-on to Crazy Machines II (software) Liquid Force Add-on to Crazy Machines II (software) Time Travel Add-on to Crazy Machines II (software) Happy New Year Add-on to Crazy Machines II (software) Halloween Add-on to Crazy Machines II (software) Invaders from Space Add-on to Crazy Machines II (software) Invaders from Space - Second Wave Add-on to Crazy Machines II (software) Crazy Machines (Mac Appstore version), including Inventor's Workshop lab and New Challenge’s lab (software)
(c) Domain Names:
(i) Owned Domain Names:
3dhaonline.com 3dhomedesign.com calendar-creator.com calendarcreatoronline.com clickartonline.com crazymachinesgame.com
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crazymachinesgoldengears.com elementaryadvantage.com elementaryadvantage.net encore.com encoreadvantage.com encoreeurope.com encoresoftware.com encoresoftware.net encoreusa.com encoureusa.com goliath-game.com highschooladvantage.net housebeautifulsoftware.com hoylegamesonline.com hoylegamesonline.net hoylegaming.net interior59.com interiors59.com Jewelcasegames.com kingofcheapgames.com landscapeandpatiodesign.com magnumgames.com mathadvantage.com mavisbeacon.co.uk mavisbeaconteachestyping.com MavisBeaconTeachesTyping.net MavisBeaconTyping.net mediashopringplus.com middleschooladvantage.com middleschooladvantage.net mysteryadventuregames.com mystery-masters.com octopus-tree.com octopustreedigital.com octopustreegames.com playhoyle.com printmaster19.com printmasterpack.com printmasterpacks.com printmastersweepstake.com printmastersweepstakes.com printshoppacks.com printyourproject.com printyourprojects.com punch58.com punch59.com punchaffiliates.com punchcad.com punchhomedesign.com punchinteriorhomedesign.com punchinteriorhomedesign.us punchinteriors.com
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punchinteriors.us punchpowertools.com punchregistration.com punchsoftware.co.uk punchsoftware.com punch-software.com punchsoftware.info punchsoftware.net punchsoftware.org punchsoftwarestore.com punchsoftwaresucks.com punchsoftwaresux.com punchuniversity.com slots-store.com viva-media.com weekendprojectsoftware.com
(ii) Licensed Domain Names:
broderbund.com (licensed by Houghton Mifflin Harcourt) hoyle.com (licensed by United States Playing Cards) mavisbeacon.com (licensed by Houghton Mifflin Harcourt)
(d) Source Code:
Brand/Property Royalty Detail Description
Punch Home Design No Royalties - owned IP All IP, including source code
The Print Shop 10% Royalty to HMH; 7.5% to Allen Williams and Hughes (dev)
All IP, including source code
Hoyle 20% to USPC, 25% to Webfoot (dev) All IP, including source code
Punch CAD 20% royalty to Evolution (code maintenance and tech support) Technical components: ~14% to Spatial ~6% to Lightworks
All IP, including source code
IGT 27.5% royalty to IGT All IP, including source code
Calendar Creator 10% royalty to HMH; 30% to Storyrock (dev)
All IP, including source code
Broderbund 10% royalty to HMH (brand only) All IP, including source code
Creativity Collections No Royalties - owned IP All IP, including source code
Goliath Co-owned with Alawar Media Source code (co-owned)
Robot Arena Co-owned with Gabriel Interactive Source code (co-owned)
Buildanauts Co-owned with Touchtilt Games, Inc Source code (co-owned)
Crazy Machines Unregistered copyrights with Fakt Source code (co-owned)
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1200522.2 39
Golden Gears Software GmbH
Back to the Shop Add-on
Unregistered copyrights with Fakt Software GmbH (Crazy Machines 2) Source code (co-owned)
Liquid Force Add-on Unregistered copyrights with Fakt Software GmbH (Crazy Machines 2) Source code (co-owned)
Used in the Business
Viva Media Average 30% licensing royalty to various partners Brands and source code
PrintMaster 10% Royalty to HMH; 9% to Story Rock (dev) Brands and source code
Mavis Beacon 10% Royalty to HMH; 17.5% to Bytes of Learning (dev) Brands and source code
IGT 27.5% royalty to IGT Brand
Game Mill 30% royalty to Game Mill Brands and source code
Calendar Creator 10% royalty to HMH; 30% to Storyrock (dev) Brand
Mystery Masters 30% royalty to Alawar and various partners Brands and source code
Office Suite 35% royalty to Binary Now Brands and source code
Broderbund 10% royalty to HMH (brand only) Brand
Big Fish 2016 Agreement
35% retail box; 25% jewel case; COGS allowable deduction Brands and source code
Assassin's Creed $3.00 box, $1.00 jewel case per unit to Ubisoft Brands and source code
Hidden Mysteries 30% royalty to Game Mill Brands and source code
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1200522.2 40
SCHEDULE 2.1(e)
PERSONAL PROPERTY
Asset Tag# Current Assignment Type & Subtype Manufacturer Model Part # Serial # Warranty Expires
10531 Jason Carver Computer Desktop Apple Mac Mini (Late 2009) YM9364TM9G6
2000393 Chris Grote Monitor 19 Samsung SyncMaster 910T GH19PS MJ19HCHX701762
2000405 Diane Heiken Monitor 19 Samsung Syncmaster 910T MJ19BSABV MJ19HMEX600509
2000433 General Use Monitor 17 Planar PX171M-BK A593439A0121K0320
2000434 General Use Monitor 17 Planar PX171M-BK A593442A0121K0199
2000439 General Use Monitor 17 Planar PX171M-BK 997-2443-00 A593442A0121K0195
2000448 General Use Monitor 17 Planar PX171M-BK 997-2443-00 A593439A012K0324
2000478 James Robrahn Monitor 21 Dell 2405FPW 0T6133 CN0T61334663361B19HS
2000489 General Use Computer Desktop Dell XPS410 Dimension 9200 DCTA b142qc1
2000490 General Use Computer Desktop Dell Dimension E521 DCSM 2g7xpc1
2000491 James Robrahn Computer Desktop Gigabyte AMD Phenom X4 790GX GA-MA790GP-UD4H
2007109 Chris Grote Computer Desktop Gigabyte AMD Phenom X4 790GX GA-MA790GP-DS4H
2007125 Todd Quinlan Monitor 19 Samsung SyncMaster 943BX 7.29508E+11 MY19H9NQ220529
2009003 Ed Kautsch Computer Desktop Dell Precision T3400 DCTA 38645368849
2009011 Todd Quinlan Computer Desktop Dell Precision T3400 5QYSGH1
2009014 General Use Computer Desktop Dell Precision T3400 DCTA 9zp0kh1
2009018 Patti Masad Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16424
2009020 Wayne Rutherford Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16542
2009021 General Use Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16446
2009022 General Use Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16554
2009023 Sandra Aswegan Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16553
2009024 Diane Heiken Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16545
2009025 Kathy Howe Monitor 19 Samsung 943BX 7.29508E+11 MY19H9LQA16541
2009038 General Use Computer Desktop Dell Inspiron 530S 9Z0CLH1
2009039 Diane Heiken Computer Desktop Dell Dimension 2350 D5DZJ21
2009042 General Use Computer Desktop Dell Precision 380 BVP38B1
2009044 Wayne Rutherford Computer Desktop Dell Optiplex 170L BJZLS91 4/11/2009
2009058 General Use Other DVD Replicator 72016-C-160 S50224224910
2009070 General Use Computer Desktop Apple iMac (24-inch, Early 2009) 8.85909E+11 W89126SX0TG
2009082 Nicole Wilson Monitor 21 Apple 30" Cinema Display 1PM9179LL/A C472604JXMP
2009084 General Use Monitor 19 Samsung 943BT MY19H9NS908286F
2009088 General Use Computer Desktop Gigabyte AMD Phenom X4 9650 890GPA6UD3H
2009090 General Use Computer Desktop Gigabyte AMD Phenom X4 9650 890GPA6UD3H
2009092 Todd Quinlan Computer Desktop Gigabyte AMD Phenom X4 890GPA 890GPA-UD3H
2009093 General Use Computer Desktop Gigabyte AMD Phenom X4 890GPA 890GPA-UD3H
2009094 Bruce James Monitor 19 Samsung SyncMaster 940BX HA19HVBLC046960
2009097 Todd Quinlan Monitor 19 Samsung 943BT-1 MY19H9NZ400750T
2009099 Todd Quinlan Monitor 19 Samsung 943BT-1 943BT-1 MY19H9NZ400590H
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2010102 Jason Carver Monitor 19 Samsung 943BT-1 MY19H9NZ400751
2010104 General Use Computer Desktop Apple Mac Mini (Mid 2010) 8.85909E+11 C07CQ6A5DD6H 6/30/2013
2010110 David Stengel Monitor 21 Apple 30" Cinema Display A1083 8w7461b6ymd
2010113 Matt Hopkins Monitor 21 Apple 30" Cinema Display 1PM9179LL/A RM53304NPKM
2010130 General Use Monitor 21 Apple Cinema Display (20-inch DVI) 2A4311S2PKK
2010133 Bruce James Other Seagate FreeAgent Go 500GB 2GE6ETCA
2010141 Bruce James Computer Desktop Apple Mac Pro (Mid 2010) H003628BEUG
2010142 Todd Quinlan Computer Desktop Apple iMac (21.5-inch, Mid 2010) QP03612YDNN 9/7/2013
2010146 General Use Computer Desktop Dell Inspiron 537s FD5QML1 2/18/2011
2010147 Jeff Steinke Computer Desktop Gigabyte GA X58A-UD7 8.18313E+11 SN103400051833
2010157 General Use Computer Desktop Apple Mac Mini (Early 2006) YM620030U35
2010158 Matt Hopkins Computer Desktop HP Pavilion Media Center m8120n MXF73206J6
2010162 Matt Hopkins Other Monitor, 22" LG L226WTQ-BF 703NDMT1A291
2010164 Rae Lynn Walters Computer Desktop Apple
iMac (21.5-inch, Late 2009) W8946133B9S
2010168 Jeff Steinke Other Monitor, 23" Apple Cinema Display A1082 2A5162D7PKL
2010193 Jeff Steinke Computer Desktop Apple Mac Pro (Mid 2010) A1289 H01200B5EUG 5/9/2014
2010194 David Riebe Computer Desktop Apple Mac Pro (Mid 2010) A1289 H01200B6EUG 5/9/2014
2011002 Bruce James Computer Laptop Apple MacBook Pro (15-inch, Early 2011) A1286 C2VF5E6UDF8V 4/3/2012
2011012 General Use Computer Desktop Gigabyte AMD Phenom X4 890GPA 890GPA-UD3H
2011016 David Stengel Other Seagate GoFlex 100612578
2011030 Ed Kautsch Other Evga Nvidia Nvidia GeForce GTX640 v2 8.43368E+11 1.11243E+15
2011031 James Robrahn Printer Epson C381A LJDY0
20130822 David Stengel Other Verbatim USB250 JH9319
2017001 Jeff Steinke Computer Desktop Apple iMac (Retina 5K, 27-inch, Late 2015) A1419 D25RV0AHGQ17 6/6/2019
2017002 Rae Lynn Walters Monitor 21 Samsung SyncMaster 2243BWT MY22H9LS903606T
2017003 Ed Kautsch Monitor 19 Hyundai X90 X90WIAB081L08219
2017004 Ed Kautsch Monitor 19 Hyundai X90 X90WIAB091L08233
2017005 Ed Kautsch Monitor 21 Dell U2415B CN-OCFV9-74261-64F-0431-A02
2017006 Ed Kautsch Computer Desktop Apple Mac Mini (Late 2014) C07RC1EJG1HW 6/5/2019
2017007 Greg Stutsman Monitor 19 Hannspree HSG1280 3497W3CS01610
2017008 David Riebe Monitor 21 ViewSonic VS14880 TA9125103874
2017009 David Riebe Printer CANON MG3222 LXEA23178
2017010 James Robrahn Computer Desktop Cyberpower (Clone) 462222-D4LFE5
2017011 James Robrahn Computer Desktop Apple Mac mini (Late 2014) C07SH4NEG1HW 11/13/2019
2017012 James Robrahn Monitor 21 Dell U2410
2017013 Sheri Thomsen Printer HP OfficeJet Pro 8500 CN09LAK1D6
2017014 Bruce James Monitor 21 Hannspree HT231
2017015 Bruce James Monitor 21 Asus VS228H-P F4LMTF0011655
2017016 Roy Smith Monitor 21 Dell E228WFP CN0KU3116418083646GL
2017017 Jeff Steinke Monitor 21 Dell E2414H CN-0V2MFT-74445-449-AQDU
2017018 Matt Hopkins Computer Desktop Dell XPS 8700 B5BHQ22 11/13/2015
2017019 Cory Johnson Monitor 21 ASUS V9247 D3LMTF088295
2017020 Cory Johnson Monitor 21 Dell E23011C CN-019K59-64180-15q-232M
2017021 Diane Heiken Monitor 21 Dell IN1910NF CN-0H361N-72872-987-2Y2I
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2017022 Eric Tiedeken Monitor 21 Hannspree HSG 1280 4067W3CS02649
2017023 Eric Tiedeken Monitor 21 Hannspree HSG 1280 3497W3CS01677
2017024 General Use Monitor 21 Acer V213HL ETLSJ0D00120045D98510
2017025 General Use Monitor 21 Acer V213HL ETLSJ0D00120045AC8510
2017026 Jason Carver Monitor 21 Hanspree HT231DPBUFT02
2017027 General Use Printer HP Pagewide Pro MFP 477dn D3Q19-80030
2017028 Michael Merson Monitor 19 Samsung SyncMaster 910T MJ19HMEX600796D
2017029 Chase Erickson Monitor 21 HANNSPREE HT231
COMPUCOM2 Todd Quinlan Computer Desktop Apple iMac (Early 2006 17-inch) W86272L5U2N
ID10527 Bruce James Computer Desktop Gigabyte Z97X
N00000044 Sean Hendrickson Monitor 21 Dell P2314Ht CN67R1K3-74445-4B6-AB38
N00000045 Sean Hendrickson Monitor 21 Dell P2314Ht CN07481K-74445-4AK-8H35
N0000048 Roy Smith Monitor 21 Dell P2314H CN-07R1K3-74445-49P-CGKL
N0000049 Roy Smith Monitor 21 Dell P2314H CN-07R1K3-74445-4AK-BJ4S
N0000050 Tracy Magnuson Monitor 21 Dell P2314HT CN-07R1K3-74445-4AK-BHZS
N0000051 Tracy Magnuson Monitor 21 DELL P2314HT CN-07R1K3-74445-4AK-BHRS
N000021 Sheri Thomsen Monitor 21 Dell P2314H CN-07R-1K374445-49P-CGRL
N10109 Cindy Swanson Monitor 21 Acer V203H A ETLJ20W004944094514320
N10162 Cindy Swanson Monitor 21 Acer V203H A ETLF408032007030994201
N10223 General Use Computer Laptop Dell Latitude E6410 7QBRRM1 7/3/2013
N10254 General Use Computer Desktop Dell Optiplex 780 61L5NN1
N10256 Jason Carver Computer Laptop Dell Precision M2800 DS8KY52 8/13/2018
N10266 Greg Stutsman Computer Laptop Dell Latitude E6410 PP27LA JHBRRM1 7/3/2013
N10285 James Robrahn Computer Laptop Dell Latitude E6410 6731476669
N10286 Sandra Aswegan Computer Laptop Dell Latitude E6410 16DQWN1 11/11/2013
N10297 James Robrahn Monitor 19 Dell E2010 CN-OC201R-74445-01P-BG6S
N10315 General Use Computer Desktop Dell Optiplex 790 2ZJWXQ1
N10333 Cindy Swanson Computer Laptop Dell Latitude E6420 JN446R1 1/20/2015
N10379 Al Schilling Computer Desktop Apple iMac (27-inch, Mid 2011) DCPH91BYDHJP
N10411 General Use Computer Desktop Dell Optiplex 790 2ZKWXQ1
N10444 Bruce James Computer Laptop Dell Latitude E5430 Core i5
N10448 General Use Computer Desktop Dell Optiplex 790 DGF7NS1
N10460 Rae Lynn Walters Computer Laptop HP EliteBook 8570p 5CB30622MW
N10482 James Robrahn Computer Desktop Dell Optiplex 3010 38923410673
N10496 Patti Masad Computer Desktop Dell OptiPlex 3010 HVS0SW1 2/20/2016
N10497 David Riebe Computer Desktop Dell Optiplex 3010 HVQZRW1
N10509 Diane Heiken Computer Laptop Lenovo Thinkpad T440
N10517 Greg Stutsman Computer Laptop Lenovo Y50-70 CB32217511
N10525 Eric Tiedeken Computer Desktop Dell XPS 8700 1P58122 9/19/2015
N10526 David Riebe Computer Desktop Gigabyte i7-5820K 3.3GHz 8GB R9 200
N10528 Greg Stutsman Computer Desktop Apple iMac (Retina 5K, 27-inch, Late 2014) C02NP4UHFY14
N10532 Cory Johnson Computer Laptop Apple Macbook Pro (Retina, 15-inch, Mid 2014) C02P30K7G3QN 1/15/2018
N10534 Chase Erickson Computer Laptop MSI GE70 2PE APACHE PRO GE70 2PE-012USK1410001158
N14370 Greg Stutsman Computer Desktop Dell Optiplex 790 2ZKYXQ1
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NAV2856 Kathy Howe Computer Desktop HP/Compaq DC5000SFF MXL43903HQ
NAV5394 David Riebe Monitor 21 ACER AL2216W ETL9208055728035AA4231
NAV5396 David Riebe Monitor 21 ACER AL2216W ETL92080557280359B4231
NAV5402 Greg Stutsman Monitor 19 Acer AL2016W B ETL640C17273904EE34054
NAV5407 Greg Stutsman Monitor 19 Acer AL2016W B ETL640C1727390509B4054
NAV5423 Rae Lynn Walters Monitor 21 Acer Al2216W 74200110963
NAV5432 General Use Computer Desktop Dell XPS OptiPlex 755 DB26HF1 1/17/2011
W0001068 Chris Smith Monitor 21 Dell P2314H CN-07R1K3-74445-54N-861
W0001123 Sean Hendrickson Computer Laptop Dell Latitude E6440 JKYCL12 1/4/2018
W0001139 Jennifer Mortensen Computer Laptop Dell Latitude E6440 GQB5N12 3/31/2018
W0001158 Kathy Howe Computer Laptop Dell Latitude E6440 9PQRN32 6/25/2018
W0001167 Rae Lynn Walters Computer Laptop Dell Latitude E6440 9725N12 1/17/2018
W0001186 Tracy Magnuson Computer Laptop Dell Latitude E6440 CX05N12 1/17/2018
W0001206 Roy Smith Computer Laptop Dell Latitude E6440 6M05N12 1/17/2018
W0001319 Sheri Thomsen Computer Laptop Dell Latitude E6440 B2MRN32 6/25/2018
W0001349 Chris Smith Monitor 21 Dell P2314H CN-07R1K3-74445-54N-872B
W0001382 Chris Smith Computer Laptop Dell Precision M2800 7ZTKY52 8/13/2018
W0001619 Jason Carver Computer Laptop Dell Latitude E6410 35DQWN1 11/11/2013
W0001981 Michael Merson Computer Laptop Dell Latitude E6440 1B5YP32 9/30/2018
W0002020 Cory Johnson Computer Laptop MSI GS60 MS-16H7 6QE-053USK1511000695
W0002021 David Stengel Computer Laptop Apple MacBook Pro (Retina, 15-inch, Mid 2015) MJLT2LL/A C02RR9RMG8WP 8/11/2019
W0002023 Nicole Wilson Computer Laptop Apple MacBook Pro (Retina, 15-inch, Mid 2015) C02SKGJXG8WN 11/8/2019
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SCHEDULE 2.1(f)
PREPAID ROYALTIES AND OTHER ASSETS
Partner Name Credit Balance
AWH $ 51,657.65 Big Fish $ 89,696.84 Fakt $ 8,553.99 Freeverse Dev $ 1,065,981.81 Gabriel $ 237,578.91 Promcast Limited $ 78,095.01 Houghton Mifflin Harcourt $ 5,094,527.00 Tik $ 70,020.06 Webfoot $ 27,517.05
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SCHEDULE 2.5
EXECUTORY CONTRACTS
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1200522.2 49
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1200522.2 50
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10784650.1
BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT (this “Bill of Sale”) is entered into as of November __, 2017 by and between WD Encore Software, LLC, a New York limited liability company (“Seller”), and Avanquest North America LLC, a Delaware limited liability company (“Buyer”).
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. All capitalized terms used herein without definition shall have the meanings assigned thereto in the Asset Purchase Agreement dated as of October __, 2017 by and between Seller and Buyer (as the same has been, and may be, amended and assigned from time to time, collectively, the “Purchase Agreement”), for the sale by Seller to Buyer of the Purchased Assets described therein.
2. Seller hereby unconditionally gives, grants, bargains, sells, assigns, contributes, transfers, conveys and delivers to Buyer, and Buyer hereby accepts, all of Seller’s right, title and interest (whether now existing or hereafter acquired) in, to and under the Purchased Assets, as set forth in the Purchase Agreement and the schedules attached thereto.
3. This Bill of Sale shall be governed by the laws of the State of Minnesota.
4. This Bill of Sale shall inure to the benefit of the parties hereto and their respective successors and assigns. This Bill of Sale may be executed in separate counterparts, none of which need contain the signatures of all parties, each of which shall be deemed to be an original, and all of which taken together constitute one and the same instrument. It shall not be necessary in making proof of this Bill of Sale to produce or account for more than the number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.
IN WITNESS WHEREOF, Seller and Buyer have executed this Bill of Sale and Assignment as of the date first written above.
WD ENCORE SOFTWARE, LLC
By: Name: Title:
AVANQUEST NORTH AMERICA LLC
By: Name: Title:
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT (this “Agreement”) is made as of ____________, 2017 by and between WD Encore Software, LLC, a New York limited liability company (“Seller”), and Avanquest North America LLC, a California limited liability company (“Buyer”). Seller and Buyer are sometimes referred to in this Agreement collectively as the “Parties” and individually as a “Party.”
RECITALS
A. Pursuant to that certain Asset Purchase Agreement dated as of October 26, 2017 (the “Purchase Agreement”) by and between Seller and Buyer, Seller sold to Buyer, and Buyer purchased from Seller, on or about the date hereof, certain specified assets of Seller, which assets comprise the all or a substantial portion of the Encore Software Business.
B. The Encore Software Business was, prior to the Closing, operated by Seller utilizing services provided by certain of its Affiliates and other shared resources.
C. In connection with the transactions contemplated by the Purchase Agreement, Seller has agreed to provide, or cause to be provided, certain transition services to Buyer on a transitional basis and upon the terms and subject to the conditions set forth herein.
D. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement.
AGREEMENT
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 agree as follows:
1. Transition Services.
(a) During the Term (as defined below) and subject to the terms and conditions of this Agreement, Seller shall provide, or cause to be provided, the services set forth on Schedule A attached hereto (the “Transition Services”) to Buyer in support of the Encore Software Business. All of the Transition Services shall be provided in accordance with the terms, limitations and conditions set forth herein and on Schedule A. Buyer shall not resell or assign any of the Transition Services to any third party or permit the use of the Transition Services by any Person other than the Buyer and its Affiliates, in each case in connection with the conduct of the Encore Software Business.
(b) Subject to Seller not incurring any additional expenses not reimbursed by Buyer hereunder, Seller shall perform, or shall cause to be performed, the Transition Services in a timely and professional manner, at a level of service consistent with that provided by Seller or its Affiliates to the Encore Software Business prior to the commencement of the Bankruptcy Case, and in accordance with the specifications set forth with respect to such Transition Service on Schedule A. Subject to the foregoing, Seller shall assign, or shall cause to be assigned, as applicable, such sufficient resources and qualified personnel as may be available and reasonably
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required to perform the Transition Services in accordance with the terms and conditions of this Agreement.
(c) Buyer acknowledges and agrees that Seller’s performance of the Transition Services is subject to the cooperation of Buyer, and that the timely performance of actions by Buyer is necessary to allow performance of the Transition Services. In furtherance of the foregoing, Buyer agrees that Seller shall not be deemed to be in breach of its obligations hereunder to the extent a failure to perform such obligations is caused by any failure or delay of Buyer to satisfy the foregoing obligations or due to a Force Majeure Event. Neither Seller nor any of its Affiliates shall be liable for any action or inaction to the extent taken or omitted to be taken by it pursuant to the instructions received from Buyer.
(d) Subject to Seller not incurring any additional expenses not reimbursed by Buyer hereunder, Seller represents, warrants and agrees that the Transition Services shall be provided to Buyer in good faith, in accordance with Applicable Law and with the same standard of care as historically provided when the services were rendered on behalf of Seller or its Affiliates, which shall be no less than a reasonable standard of care.
(e) During the Term, Seller and Buyer shall, and shall cause their respective Affiliates, as applicable, to cooperate reasonably and in good faith in all matters relating to the provision and receipt of the Transition Services. Buyer acknowledges and agrees that Seller and its Affiliates are not in the business of providing services to third parties, and the Transition Services provided hereunder are transitional in nature and are furnished by Seller and its Affiliates solely for the purpose of facilitating the orderly transition of the Encore Software Business to Buyer. Buyer acknowledges and agrees that the Transition Services provided hereunder shall not be deemed to be exclusive, and Seller or its Affiliates may be providing similar services, and/or services that involve the same resources as those used to provide the Transition Services, to other Persons.
(f) Buyer acknowledges and agrees that certain of the Transition Services have been, and will continue to be, provided (in accordance with this Agreement) to Buyer by third parties designated by Seller. To the extent so provided, Seller shall use commercially reasonable efforts and shall reasonably consult and cooperate with Buyer to (i) cause such third parties to provide such Transition Services under this Agreement, and/or (ii) enable Buyer to avail itself of such Transition Services; provided, however, that if any such third party is unable or unwilling to provide any such Transition Services notwithstanding such efforts by Seller, Seller shall use its commercially reasonable efforts to determine the alternative manner in which such Transition Services can best be provided.
(g) During the Term, if Buyer desires Seller or any of its Affiliates to perform or cause to be performed a service that is not described on Schedule A as of the Closing Date which (i) was provided by Seller or its Affiliates to the Encore Software Business prior to the Closing, and (ii) is reasonably necessary for the continued conduct of the Encore Software Business by Buyer consistent with the manner in which such Business was conducted by Seller and its Affiliates prior to the Closing (a “Requested Service”), Buyer shall deliver a written notice to Seller requesting the Requested Service, including a reasonable description of the Requested Service. Seller may, solely at its option, determine whether any Requested Service will be provided and, if Seller agrees that the Requested Service will be provided, the terms and
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conditions (including applicable fees) of such Requested Service shall be negotiated in good faith by the Parties. Any such Requested Service so provided by Seller shall constitute Transition Services under this Agreement and shall be subject in all respect to the provisions of this Agreement as if fully set forth on Schedule A as of the Closing.
(h) Seller shall make available on a timely basis to Buyer all information and materials reasonably requested by Buyer, to the extent that such information and materials are readily available and reasonably necessary for the operation of the Encore Software Business or relate to the receipt of the Transition Services by Buyer.
2. Third Party Consents and Notices. If there is either a notice required to be given to any third party or any consent from any third party is needed, in each case in connection with the provision of any Transition Service (including in connection with granting Buyer a license or sublicense to any third-party intellectual property or software) (any such notice or consent, a “Necessary Notice and Consent”), Seller shall use commercially reasonable efforts to provide such notices and obtain such Necessary Notice and Consent in order to provide such Transition Service and in the event that any such Necessary Notice and Consent is not obtained then, unless and until such Necessary Notice and Consent is obtained, the Parties shall cooperate with each other in achieving a reasonable alternative arrangement to the affected Transition Services that does not materially increase the costs to Seller or its Affiliates or Buyer in providing or receiving such Transition Services, as applicable, provided that Seller shall not be required to commence or participate in any litigation to obtain any Necessary Notice and Consent or pay any additional amounts that materially increase the cost of providing the Transition Services.
3. Fees; Expenses.
(a) With respect to each Transition Service, Buyer shall pay Seller the service fee or other fees (“Fees”), if any, specified for such Transition Service on Schedule A at the Closing by cashiers’ check or by wire transfer of immediately available funds in accordance with wire transfer instructions provided by Seller to Buyer. Buyer agrees to pay to Seller amounts equal to any sales, services or other Taxes that Buyer (or its Affiliates) is required to withhold from the Fees and remit to a Governmental Authority. The Parties hereto further agree that no Party hereto shall be required to pay any personal property Taxes of the other Party hereto on property owned or leased by a Party hereto.
(b) Buyer shall pay Seller in advance for any pre-approved reasonable documented out-of-pocket expenses payable to third parties, including all travel expenses, which are to be incurred by Seller or its Affiliates in connection with its provision of the Transition Services (“Expenses”).
(c) In addition to any amounts otherwise due Seller as set forth on Schedule A, prior to the provision of any services by Seller not specified on Schedule A and prior to Seller incurring any cost or expense hereunder, Seller shall submit an accounting and invoice to Buyer for all other amounts due to Seller pursuant to this Section 3 in advance of the provision of services or incurring of any cost or expense. Promptly following Buyer’s receipt of an invoice, Buyer shall determine whether such proposed services and/or cost or expense is to be provided by Seller and, if so, shall pay such amounts. Upon receipt of payment, Seller shall provide such services and/or pay such costs or expenses as reflected in the invoice..
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4. Term and Termination.
(a) The term of this Agreement shall commence on the Closing Date and shall terminate as of the date that the provision of all Transition Services has expired (including any extension), unless earlier terminated in accordance with the terms of this Agreement, including Schedule A (the “Term”).
(b) Schedule A sets forth the term for each Transition Service, which in each case shall apply unless the specific Transition Service is extended or terminated as provided herein.
(c) Buyer may terminate any individual Transition Service upon 10 days’ prior written notice to Seller. After termination of such Transition Services, Buyer shall remain obligated to pay any Fees owed in connection with terminated Transition Services rendered but not paid prior to termination.
(d) Seller may terminate any individual Transition Service by giving written notice to Buyer if Buyer has taken any action or made any omission making it impossible or commercially unreasonable for Seller to provide such Transition Service and Buyer shall have failed to remedy such situation within 10 days after receipt of written notice thereof from Seller.
(e) Ether Party may terminate this Agreement by giving written notice to the other Party if such other Party is in material breach hereof and shall have failed to cure such breach within 15 days after receipt of written notice thereof from the non-breaching Party. Any termination of this Agreement pursuant to Sections 4(c)-(e) shall be without prejudice to any rights or obligations of the Parties hereto accruing prior to such termination, including the right to payment of unpaid Fees and reimbursable Expenses owing for Transition Services performed prior to termination.
(f) Sections 5 (Intellectual Property Rights), 8 (Confidentiality) and 11 through 20 (Miscellaneous) shall survive any termination or expiration of this Agreement.
5. Intellectual Property Rights.
(a) Except as otherwise expressly set forth herein, as among Buyer and Seller (and their respective Affiliates), Buyer and Seller (and their respective Affiliates) shall each remain the exclusive owner of all right, title and interest throughout the world in and to all their respective intellectual property provided to, or made available to, one another in connection with the performance of the Transition Services, including without limitation, any information system, software, computer network, database or data file owned, licensed, leased or provided by or for a Party or any of its Affiliates which is used by a Party or any of its Affiliates or any third party on behalf of such Party, each as modified, maintained or enhanced from time to time. Notwithstanding anything to the contrary hereunder, each Party agrees to cooperate with the other (and shall cause its Affiliates and third party suppliers to so cooperate) to cause the orderly return of the other Party’s intellectual property upon the termination of this Agreement or upon written request consistent with this Agreement, whichever is earlier.
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(b) Buyer, for itself and on behalf of its Affiliates, hereby grants to Seller and its Affiliates (to the extent they are providing Transition Services), and Seller hereby accepts, a royalty-free, fully-paid up, non-exclusive, non-transferable, non-sublicensable, right and license during the Term to use all intellectual property and proprietary rights owned or controlled (to the extent sublicenseable without consent from a third party) by Buyer or any of its Affiliates, solely to the extent necessary to permit Seller and its Subsidiaries to perform its obligations under this Agreement.
(c) Seller hereby grants to Buyer and its Affiliates, and Buyer hereby accepts,
a royalty-free, fully-paid up, non-exclusive, non-transferable, non-sublicensable, right and license during the Term to use all intellectual property and proprietary rights owned or controlled (to the extent sublicenseable without consent from a third party) by Seller or any of its Affiliates, solely as necessary to receive the Transition Services.
(d) Buyer and its Affiliates shall own all right, title and interest in and to or
otherwise have the right to use any data, information, records, reports and other deliverables (i) provided by Buyer and/or its Affiliates to Seller and/or its Affiliates, or (ii) generated, transmitted or maintained pursuant to a Transition Service on behalf of Buyer and/or its Affiliates (the data, information, records, reports and other deliverables described in clauses (i) and (ii), collectively, “Service Data”). Seller hereby, on its behalf and on behalf of its Affiliates, assigns to Buyer or its designee any and all right, title and interest that Seller may have or acquire in or to any such Service Data. As soon as is reasonably practicable following the reasonable request of Buyer or its Affiliates or the termination of any Transition Service pursuant to the terms of this Agreement, Seller shall use commercially reasonable efforts to deliver to Buyer or its designee in a commercially reasonable manner the Service Data reasonably requested or related to such terminated Service that remains in the possession of Seller.
6. Insurance. Seller shall maintain, during the Term, such insurance policies issued by reputable insurance providers in types and amounts that it reasonably believes are customary for companies in the same or similar businesses of similar size operating in the same or similar locations as Seller.
7. Employees.
(a) All employees and representatives of a Party hereto and any of its Affiliates will be deemed for all purposes of employment, including for purposes of compensation and employee benefits, to be employees or representatives of such Party or its Affiliates (or its subcontractors) and not employees or representatives of the other Party hereto or any of the other Party’s Affiliates. In providing the Transition Services, Seller’s employees and representatives will be under the direction, control and supervision of Seller or its Affiliates, and shall be solely the common law employees of Seller or its Affiliates, and not of Buyer. Unless agreed to otherwise by the Parties or otherwise expressly set forth herein, Seller or its Affiliates will have the sole right to exercise all authority with respect to the employment, assignment and direction of its employees and representatives, and Seller shall be solely responsible for the acts or omissions of such employees and representatives when acting in the course of their employment. Seller or its Affiliates shall be exclusively responsible for the payment of all direct
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or indirect compensation for any such employees and representatives assigned to perform Transition Services.
(b) Seller and its Affiliates will assign to the performance of the Transition Services such of its employees and other Persons as are required to cause the Transition Services to be performed in accordance with the standards and level of service specified in Section 1(b). Nothing in this Agreement shall affect the right of Seller to terminate the employment or services of any such Person for any reason or at any time during the Term and Seller shall have the right at all times to make such employment decisions as it shall deem appropriate, provided that Seller will use reasonable efforts to consult with Buyer regarding such employment decisions with respect to the employees providing Transition Services and to provide prior written notice of the removal and replacement of the personnel performing Transition Services.
8. Confidentiality. Each Party agrees that all information of a confidential or proprietary nature disclosed to such Party (or any of its partners, officers, directors, employees or agents) by or on behalf of the other Party or any of its Affiliates in connection with the provision of the Transition Services hereunder is confidential information, and the receiving Party will hold in confidence all confidential information identified as such by, and obtained from, the disclosing Party, except as otherwise required by Applicable Law. Notwithstanding the foregoing, “confidential information” shall not include any information that the receiving Party can demonstrate: (i) was publicly known at the time of disclosure to it, or has become publicly known through no wrongful act of the receiving Party or its Affiliates, (ii) was rightfully received from a third party without a duty of confidentiality (after due inquiry), or (iii) was developed by them independently without any reliance on the confidential information of the disclosing Party.
9. Services “As Is”. Except as expressly set forth in this Agreement, the Transition Services to be provided are furnished “as is” with all faults and without warranty of any kind, express or implied, including any warranty of merchantability, non-infringement or fitness for any particular purpose. Buyer assumes all risks and liabilities arising from or relating to its use of and reliance upon the Transition Services and neither Seller nor any of its Affiliates makes any representation or warranty with respect thereto, except as expressly set forth in this Agreement.
10. Force Majeure. Each Party will be excused for any failure or delay in performing any of its obligations under this Agreement if such failure or delay is caused by any reason beyond its reasonable control, including any act of God, accident, explosion, fire, act of war or terrorism, storm, earthquake, flood, statutory or other laws, regulations, rules, or orders, or any similar circumstance or event outside of the reasonable control of such Party (a “Force Majeure Event”). Seller shall notify Buyer as soon as practicable upon discovering any event which may result in a Force Majeure Event, including a description of circumstances preventing its performance. The obligations of Seller or its Affiliates seeking to be excused shall then be suspended for the duration of the Force Majeure Event to the extent that the Force Majeure Event prevents it from performing its obligations hereunder and, Seller and its Affiliates shall have no liability to Buyer, its Affiliates or any other Person in connection therewith, except in the case of their bad faith, gross negligence, or willful misconduct; provided that Seller shall use commercially reasonable efforts to resume, with the least possible delay, the performance as
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soon as reasonably practicable. Should a Force Majeure Event continue for 30 consecutive days, Buyer may thereafter, during the continuance of such Force Majeure Event, terminate this Agreement immediately upon delivery of written notice of termination to Seller. Buyer shall have no obligation to pay any fees or other amounts to Seller, except for amounts already due and owed to Seller for Transition Services actually rendered prior to the occurrence of the Force Majeure Event, for so long as Seller is unable to provide the Transition Services in compliance with this Agreement.
11. Assignment. This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, that Seller may, in its sole discretion and without any consent of Buyer, but subject to continued compliance with Section 1(b) and the other terms and conditions of this Agreement, assign, delegate or otherwise transfer (whether by operation of law or otherwise) any of its rights or obligations under this Agreement to one or more of its Affiliates. No assignment shall relieve the assigning Party of any of its obligations hereunder.
12. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under Applicable Law, but if any provisions of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction so as to best give effect to the intent of the Parties.
13. Amendment; Entire Agreement. This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by each of the Parties. This Agreement, together with Schedule A hereto, contains the entire agreement of the Parties with respect to the subject matter hereof, superseding all negotiations, discussions and preliminary agreements with respect to the transactions contemplated hereby, whether written or oral, made prior to the date hereof.
14. No Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties and no provision of this Agreement will be deemed to confer upon third parties any remedy, claim, liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement.
15. Waiver. The failure of any Party to enforce any condition or part of this Agreement at any time will not be construed as a waiver of that condition or part, nor will it forfeit any rights to future enforcement thereof. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving Party.
16. Governing Law; Jurisdiction and Venue. This Agreement shall be governed by and construed in accordance with the Laws of the State of Minnesota and the Bankruptcy Code and Applicable Federal Rules of Bankruptcy Procedure, irrespective of conflicts of law principles. In the event of any conflict between the laws of the State of Minnesota and the Bankruptcy Code, the Bankruptcy Code will prevail. Jurisdiction and venue shall be with the Bankruptcy Court, which may apply federal bankruptcy law and procedure in its discretion, and the parties hereby irrevocably consent to such venue and submit to such jurisdiction.
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17. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Signed counterparts of this Agreement may be delivered by facsimile and by scanned .pdf image.
18. Notices. Except as otherwise provided herein, all notices, requests, claims, demands, waivers and other communications hereunder shall be given to the pPersons and in the manner provided in the Purchase Agreement.
19. Relationship of the Parties. It is expressly agreed that the relationship between Buyer and Seller shall not constitute a partnership, joint venture, or agency. The Parties are independent contractors. Each Party retains control over its personnel, and the employees of any Party shall not be considered employees of the other Parties. None of Buyer or Seller shall have the authority to make any statements, representations, or commitments of any kind, or to take any action, which shall be binding on the other, without the prior consent of the other Party to do so.
20. Construction. Section 1.3 of the Purchase Agreement is incorporated herein by reference, except that “Agreement” shall have the definition given it hereunder.
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10846461.2
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed on their respective behalf, by their respective officers thereunto duly authorized, all as of the day and year first above written.
WD ENCORE SOFTWARE, LLC
By: Name: Title:
AVANQUEST NORTH AMERICA LLC
By: Name: Title:
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SCHEDULE A TRANSITION SERVICES
1.
Service Title: Merchant Services
Seller’s Point Person:
Service Description:
The following merchant services will be maintained for 60 days following Closing:
Seller shall maintain all merchant and PayPal accounts following Closing so that Buyer may migrate all sales activities through Seller’s websites to Buyer’s merchant accounts.
Fees and timing of Payment of Fees: $_________ paid at Closing
2.
Service Title: IT
Seller’s Point Person:
Service Description:
Transition Services shall consist of reasonable assistance with project management of Buyer’s overall technical and asset transition activities and reasonable assistance related to the following: A. Short-term IT Services: The following services will be maintained for 30 days following Closing:
Seller to maintain (a) Level 3 Minnetonka colocation center and internet connections and (b) internet connection and dedicated line to Greenville datacenter
B. Mid-term IT Services: The following services will be maintained until the earlier of 45 days following the Closing Date or Buyer’s having taken the steps necessary to take ownership of the particular service:
Customer Contact Services: Seller to maintain all customer service email, telephone and chat services
Amazon Web Services: Seller to maintain AWS hosting account.
CCH Tax Service: Seller to maintain the CCH sales tax service license.
Asknet: Seller to keep service in effect for ESD downloads and serial number activation.
C. Other IT Services: The following services will be maintained for 30 days following Closing:
Describing IT system and IT use of the Business, including:
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o Provision of background information on the IT application platforms used in the Business and discussion of Buyer’s potential system transition approaches
o Provision of information and explanations regarding current data structures, and business and application processes used in the Business
Transferring data and identifying data management and other related assets, including:
o Determination of requirements for transfer of data and other related assets of the Business, and administration of data management and/or other system(s), as applicable
o Development and applicable testing and execution of the data extraction and transfer utilities identified by Buyer and agreed to by Seller
o Facilitation of introductions for the licensing of related software and / or SaaS platforms used in the Business
o For the avoidance of doubt, Seller may remove any attorney-client privileged communications and materials from any email files prior to their transfer to Buyer hereunder
These Transition Services are provided using various third party software and information technology solutions. Seller will identify to Buyer all such third party service providers as promptly as practicable.
Fees and timing of Payment of Fees: $_________ paid at Closing.
3.
Service Title: Staffing/Human Resources
Seller’s Point Person:
Service Description:
Transition Services shall consist of reasonable assistance related to the following human resources activities:
Providing the personnel to perform the Transition Services Providing for 30 days of full-time employment for Adam
Rebholz, whose exclusive job it will be to help with server/e-commerce transition
Fees and timing of Payment of Fees: $_________ paid at Closing.
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TRADEMARK ASSIGNMENT
This TRADEMARK ASSIGNMENT (this “Assignment”) is entered into as of November __, 2017 by and between WD Encore Software, LLC, a New York limited liability company (“Seller”), and Avanquest North America LLC, a Delaware limited liability company (“Assignee”). All capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Purchase Agreement (as defined below).
WHEREAS, Seller and Assignee have entered into an Asset Purchase Agreement, dated
as of October __, 2017 (as may be amended or modified from time to time in accordance with its terms, the “Purchase Agreement”), pursuant to which Seller has agreed to sell, convey, assign, transfer and deliver to Assignee all of its right, title and interest in and to Purchased Assets, including the Trademarks set forth in Schedule A attached hereto, including all common law rights held by Seller with respect thereto and all goodwill associated with and appurtenant thereto (the “Assigned Trademarks”); and
WHEREAS, pursuant to the Purchase Agreement, Seller and Assignee have agreed to the assignment of the Assigned Trademarks by Seller to Assignee by entering into this Assignment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. Conveyance. Seller does hereby sell, convey, assign, transfer and deliver to Assignee all of its right, title and interest in and to: (i) the Assigned Trademarks and all renewals and extensions thereof, and (ii) all benefits, privileges, causes of action and remedies relating thereto throughout the world, including, without limitation, all of its rights to: (a) apply for and maintain all registrations, renewals and/or extensions thereof, (b) claim priority under United States law or international convention, (c) bring actions and recover damages for past, present and future infringement or other violation thereof, and (d) grant licenses or other interests therein.
2. Recordation. Seller hereby authorizes the United States Commissioner of Patents and Trademarks to record Assignee as the owner of the Assigned Trademarks as assignee of its entire right, title and interest in, to and under the same. Assignee shall have the right to record this Assignment with all applicable governmental authorities and registrars so as to perfect its ownership of the Assigned Trademarks.
3. Further Assurances. Seller shall provide Assignee and its successors and assigns reasonable cooperation and assistance at Assignee’s request and expense (including the execution and delivery of any and all affidavits, declarations, oaths, exhibits, assignments or other documentation as may be reasonably required) as are reasonably requested in writing by Assignee to effect, register or maintain the rights assigned herein, including: (i) the preparation and prosecution by Assignee of any applications or registrations assigned herein and (ii) the prosecution or defense by Assignee of any interference, opposition, infringement or other proceeding that may arise in connection with any of the rights assigned herein.
4. Successors and Assigns. This Assignment shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns.
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5. Counterparts. This Assignment may be executed in counterparts, each of which shall be considered an original instrument, but both of which shall be considered one and the same agreement, and shall become binding when both counterparts have been signed by each of the parties and delivered to Seller and Assignee.
6. Governing Law. This Assignment shall be governed by the laws of the state of Minnesota.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have caused this Assignment to be executed as of the date above first written.
ASSIGNOR:
WD ENCORE SOFTWARE, LLC
By: Name: Title:
Acknowledged and Accepted:
ASSIGNEE:
AVANQUEST NORTH AMERICA LLC
By: Name: Title:
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Schedule A
Assigned Trademarks
[To be provided by Seller]
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EXHIBIT B
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TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES Agreement____________, 2017 by and between WD Encore Software, LLC, a New York limited liabilitycompany Seller and Avanquest North America LLC, a California limited liability company
Buyer . Seller and Buyer are sometimes referred to in this Agreement collectively as theParties Party.
RECITALS
A. Pursuant to that certain Asset Purchase Agreement dated as of October 26, 2017Purchase Agreement between Seller and Buyer, Seller sold to Buyer, and Buyer
purchased from Seller, on or about the date hereof, certain specified assets of Seller, which assetscomprise the all or a substantial portion of the Encore Software Business.
B. The Encore Software Business was, prior to the Closing, operated by Sellerutilizing services provided by certain of its Affiliates and other shared resources.
C. In connection with the transactions contemplated by the Purchase Agreement,Seller has agreed to provide, or cause to be provided, certain transition services to Buyer on atransitional basis and upon the terms and subject to the conditions set forth herein.
D. Capitalized terms used but not otherwise defined herein shall have the meaningsascribed thereto in the Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the Parties heretoagree as follows:
1. Transition Services.
(a) During the Term (as defined below) and subject to the terms andconditions of this Agreement, Seller shall provide, or cause to be provided, the services set forth onSchedule A Transition Services Buyer in support of the EncoreSoftware Business. All of the Transition Services shall be provided in accordance with theterms, limitations and conditions set forth herein and on Schedule A. Buyer shall not resell orassign any of the Transition Services to any third party or permit the use of the TransitionServices by any Person other than the Buyer and its Affiliates, in each case in connection withthe conduct of the Encore Software Business.
(b) Subject to Seller not incurring any additional expenses not reimbursed byBuyer hereunder, Seller shall perform, or shall cause to be performed, the Transition Services ina timely and professional manner, at a level of service consistent with that provided by Seller orits Affiliates to the Encore Software Business prior to the commencement of the BankruptcyCase, and in accordance with the specifications set forth with respect to such Transition Serviceon Schedule A. Subject to the foregoing, Seller shall assign, or shall cause to be assigned, asapplicable, such sufficient resources and qualified personnel as may be available and reasonably
EXHIBIT B
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required to perform the Transition Services in accordance with the terms and conditions of thisAgreement.
(c) Buyer acknowledges and agrees that Seller s performance of theTransition Services is subject to the cooperation of Buyer, and that the timely performance ofactions by Buyer is necessary to allow performance of the Transition Services. In furtherance ofthe foregoing, Buyer agrees that Seller shall not be deemed to be in breach of its obligationshereunder to the extent a failure to perform such obligations is caused by any failure or delay ofBuyer to satisfy the foregoing obligations or due to a Force Majeure Event. Neither Seller norany of its Affiliates shall be liable for any action or inaction to the extent taken or omitted to betaken by it pursuant to the instructions received from Buyer.
(d) Subject to Seller not incurring any additional expenses not reimbursed byBuyer hereunder, Seller represents, warrants and agrees that the Transition Services shall beprovided to Buyer in good faith, in accordance with Applicable Law and with the same standardof care as historically provided when the services were rendered on behalf of Seller or itsAffiliates, which shall be no less than a reasonable standard of care.
(e) During the Term, Seller and Buyer shall, and shall cause their respectiveAffiliates, as applicable, to cooperate reasonably and in good faith in all matters relating to theprovision and receipt of the Transition Services. Buyer acknowledges and agrees that Seller andits Affiliates are not in the business of providing services to third parties, and the TransitionServices provided hereunder are transitional in nature and are furnished by Seller and itsAffiliates solely for the purpose of facilitating the orderly transition of the Encore SoftwareBusiness to Buyer. Buyer acknowledges and agrees that the Transition Services providedhereunder shall not be deemed to be exclusive, and Seller or its Affiliates may be providingsimilar services, and/or services that involve the same resources as those used to provide theTransition Services, to other Persons.
(f) Buyer acknowledges and agrees that certain of the Transition Serviceshave been, and will continue to be, provided (in accordance with this Agreement) to Buyer bythird parties designated by Seller. To the extent so provided, Seller shall use commerciallyreasonable efforts and shall reasonably consult and cooperate with Buyer to (i) cause such thirdparties to provide such Transition Services under this Agreement, and/or (ii) enable Buyer toavail itself of such Transition Services; provided, however, that if any such third party is unableor unwilling to provide any such Transition Services notwithstanding such efforts by Seller,Seller shall use its commercially reasonable efforts to determine the alternative manner in whichsuch Transition Services can best be provided.
(g) During the Term, if Buyer desires Seller or any of its Affiliates to performor cause to be performed a service that is not described on Schedule A as of the Closing Datewhich (i) was provided by Seller or its Affiliates to the Encore Software Business prior to theClosing, and (ii) is reasonably necessary for the continued conduct of the Encore SoftwareBusiness by Buyer consistent with the manner in which such Business was conducted by Sellerand its Affiliates prior to the Closing Requested Service Buyer shall deliver a writtennotice to Seller requesting the Requested Service, including a reasonable description of theRequested Service. Seller may, solely at its option, determine whether any Requested Servicewill be provided and, if Seller agrees that the Requested Service will be provided, the terms and
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conditions (including applicable fees) of such Requested Service shall be negotiated in goodfaith by the Parties. Any such Requested Service so provided by Seller shall constituteTransition Services under this Agreement and shall be subject in all respect to the provisions ofthis Agreement as if fully set forth on Schedule A as of the Closing.
(h) Seller shall make available on a timely basis to Buyer all information andmaterials reasonably requested by Buyer, to the extent that such information and materials arereadily available and reasonably necessary for the operation of the Encore Software Business orrelate to the receipt of the Transition Services by Buyer.
2. Third Party Consents and Notices. If there is either a notice required to be given to anythird party or any consent from any third party is needed, in each case in connection with theprovision of any Transition Service (including in connection with granting Buyer a license orsublicense to any third-party intellectual property or software) (any such notice or consent, aNecessary Notice and Consent Seller shall use commercially reasonable efforts to provide
such notices and obtain such Necessary Notice and Consent in order to provide such TransitionService and in the event that any such Necessary Notice and Consent is not obtained then, unlessand until such Necessary Notice and Consent is obtained, the Parties shall cooperate with eachother in achieving a reasonable alternative arrangement to the affected Transition Services thatdoes not materially increase the costs to Seller or its Affiliates or Buyer in providing or receivingsuch Transition Services, as applicable, provided that Seller shall not be required to commenceor participate in any litigation to obtain any Necessary Notice and Consent or pay any additionalamounts that materially increase the cost of providing the Transition Services.
3. Fees; Expenses.
(a) With respect to each Transition Service, Buyer shall pay Seller the serviceFees e on Schedule A at the
Closing accordance withwire transfer instructions provided by Seller to Buyer. Buyer agrees to pay to Seller amountsequal to any sales, services or other Taxes that Buyer (or its Affiliates) is required to withholdfrom the Fees and remit to a Governmental Authority. The Parties hereto further agree that noParty hereto shall be required to pay any personal property Taxes of the other Party hereto onproperty owned or leased by a Party hereto.
(b) Buyer shall pay Seller in advance for any pre-approved reasonabledocumented out-of-pocket expenses payable to third parties, including all travel expenses, whichare to be incurred by Seller or its Affiliates in connection with its provision of the Transition
Expenses
(c) In addition to any amounts otherwise due Seller as set forth on ScheduleA, prior to the provision of any services by Seller not specified on Schedule A and prior to Sellerincurring any cost or expense hereunder, Seller shall submit an accounting and invoice to Buyerfor all other amounts due to Seller pursuant to this Section 3 in advance of the provision ofservices or incurring of any cost or expense. Promptly following Buyer n invoice,Buyer shall determine whether such proposed services and/or cost or expense is to be providedby Seller and, if so, shall pay such amounts. Upon receipt of payment, Seller shall provide suchservices and/or pay such costs or expenses as reflected in the invoice..
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4. Term and Termination.
(a) The term of this Agreement shall commence on the Closing Date and shallterminate as of the date that the provision of all Transition Services has expired (including anyextension), unless earlier terminated in accordance with the terms of this Agreement, includingSchedule A Term
(b) Schedule A sets forth the term for each Transition Service, which in eachcase shall apply unless the specific Transition Service is extended or terminated as providedherein.
(c) Buyer may terminate any individual Transition Service upon 10 daysprior written notice to Seller. After termination of such Transition Services, Buyer shall remainobligated to pay any Fees owed in connection with terminated Transition Services rendered butnot paid prior to termination.
(d) Seller may terminate any individual Transition Service by giving writtennotice to Buyer if Buyer has taken any action or made any omission making it impossible orcommercially unreasonable for Seller to provide such Transition Service and Buyer shall havefailed to remedy such situation within 10 days after receipt of written notice thereof from Seller.
(e) Ether Party may terminate this Agreement by giving written notice to theother Party if such other Party is in material breach hereof and shall have failed to cure suchbreach within 15 days after receipt of written notice thereof from the non-breaching Party. Anytermination of this Agreement pursuant to Sections 4(c)-(e) shall be without prejudice to anyrights or obligations of the Parties hereto accruing prior to such termination, including the rightto payment of unpaid Fees and reimbursable Expenses owing for Transition Services performedprior to termination.
(f) Sections 5 (Intellectual Property Rights), 8 (Confidentiality) and 11through 20 (Miscellaneous) shall survive any termination or expiration of this Agreement.
5. Intellectual Property Rights.
(a) Except as otherwise expressly set forth herein, as among Buyer and Seller(and their respective Affiliates), Buyer and Seller (and their respective Affiliates) shall eachremain the exclusive owner of all right, title and interest throughout the world in and to all theirrespective intellectual property provided to, or made available to, one another in connection withthe performance of the Transition Services, including without limitation, any information system,software, computer network, database or data file owned, licensed, leased or provided by or for aParty or any of its Affiliates which is used by a Party or any of its Affiliates or any third party onbehalf of such Party, each as modified, maintained or enhanced from time to time.Notwithstanding anything to the contrary hereunder, each Party agrees to cooperate with theother (and shall cause its Affiliates and third party suppliers to so cooperate) to cause the orderlyreturn of the other Party intellectual property upon the termination of this Agreement or uponwritten request consistent with this Agreement, whichever is earlier.
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(b) Buyer, for itself and on behalf of its Affiliates, hereby grants to Seller andits Affiliates (to the extent they are providing Transition Services), and Seller hereby accepts, aroyalty-free, fully-paid up, non-exclusive, non-transferable, non-sublicensable, right and licenseduring the Term to use all intellectual property and proprietary rights owned or controlled (to theextent sublicenseable without consent from a third party) by Buyer or any of its Affiliates, solelyto the extent necessary to permit Seller and its Subsidiaries to perform its obligations under thisAgreement.
(c) Seller hereby grants to Buyer and its Affiliates, and Buyer hereby accepts,a royalty-free, fully-paid up, non-exclusive, non-transferable, non-sublicensable, right andlicense during the Term to use all intellectual property and proprietary rights owned or controlled(to the extent sublicenseable without consent from a third party) by Seller or any of its Affiliates,solely as necessary to receive the Transition Services.
(d) Buyer and its Affiliates shall own all right, title and interest in and to orotherwise have the right to use any data, information, records, reports and other deliverables (i)provided by Buyer and/or its Affiliates to Seller and/or its Affiliates, or (ii) generated,transmitted or maintained pursuant to a Transition Service on behalf of Buyer and/or itsAffiliates (the data, information, records, reports and other deliverables described in clauses (i)
Service Data Seller hereby, on its behalf and on behalf of its Affiliates,assigns to Buyer or its designee any and all right, title and interest that Seller may have oracquire in or to any such Service Data. As soon as is reasonably practicable following thereasonable request of Buyer or its Affiliates or the termination of any Transition Service pursuantto the terms of this Agreement, Seller shall use commercially reasonable efforts to deliver toBuyer or its designee in a commercially reasonable manner the Service Data reasonablyrequested or related to such terminated Service that remains in the possession of Seller.
6. Insurance. Seller shall maintain, during the Term, such insurance policies issued byreputable insurance providers in types and amounts that it reasonably believes are customary forcompanies in the same or similar businesses of similar size operating in the same or similarlocations as Seller.
7. Employees.
(a) All employees and representatives of a Party hereto and any of itsAffiliates will be deemed for all purposes of employment, including for purposes ofcompensation and employee benefits, to be employees or representatives of such Party or itsAffiliates (or its subcontractors) and not employees or representatives of the other Party hereto or
Seller s employees andrepresentatives will be under the direction, control and supervision of Seller or its Affiliates, andshall be solely the common law employees of Seller or its Affiliates, and not of Buyer. Unlessagreed to otherwise by the Parties or otherwise expressly set forth herein, Seller or its Affiliateswill have the sole right to exercise all authority with respect to the employment, assignment anddirection of its employees and representatives, and Seller shall be solely responsible for the actsor omissions of such employees and representatives when acting in the course of theiremployment. Seller or its Affiliates shall be exclusively responsible for the payment of all direct
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or indirect compensation for any such employees and representatives assigned to performTransition Services.
(b) Seller and its Affiliates will assign to the performance of the TransitionServices such of its employees and other Persons as are required to cause the Transition Servicesto be performed in accordance with the standards and level of service specified in Section 1(b).Nothing in this Agreement shall affect the right of Seller to terminate the employment or servicesof any such Person for any reason or at any time during the Term and Seller shall have the rightat all times to make such employment decisions as it shall deem appropriate, provided that Sellerwill use reasonable efforts to consult with Buyer regarding such employment decisions withrespect to the employees providing Transition Services and to provide prior written notice of theremoval and replacement of the personnel performing Transition Services.
8. Confidentiality. Each Party agrees that all information of a confidential or proprietarynature disclosed to such Party (or any of its partners, officers, directors, employees or agents) byor on behalf of the other Party or any of its Affiliates in connection with the provision of theTransition Services hereunder is confidential information, and the receiving Party will hold inconfidence all confidential information identified as such by, and obtained from, the disclosingParty, except as otherwise required by Applicable Law. Notwithstanding the foregoing,
that the receiving Party candemonstrate: (i) was publicly known at the time of disclosure to it, or has become publiclyknown through no wrongful act of the receiving Party or its Affiliates, (ii) was rightfullyreceived from a third party without a duty of confidentiality (after due inquiry), or (iii) wasdeveloped by them independently without any reliance on the confidential information of thedisclosing Party.
9. . Except as expressly set forth in this Agreement, the TransitionServicesexpress or implied, including any warranty of merchantability, non-infringement or fitness forany particular purpose. Buyer assumes all risks and liabilities arising from or relating to its useof and reliance upon the Transition Services and neither Seller nor any of its Affiliates makesany representation or warranty with respect thereto, except as expressly set forth in thisAgreement.
10. Force Majeure. Each Party will be excused for any failure or delay in performing any ofits obligations under this Agreement if such failure or delay is caused by any reason beyond itsreasonable control, including any act of God, accident, explosion, fire, act of war or terrorism,storm, earthquake, flood, statutory or other laws, regulations, rules, or orders, or any similar
Force MajeureEvent . Seller shall notify Buyer as soon as practicable upon discovering any event which mayresult in a Force Majeure Event, including a description of circumstances preventing itsperformance. The obligations of Seller or its Affiliates seeking to be excused shall then besuspended for the duration of the Force Majeure Event to the extent that the Force Majeure Eventprevents it from performing its obligations hereunder and, Seller and its Affiliates shall have noliability to Buyer, its Affiliates or any other Person in connection therewith, except in the case oftheir bad faith, gross negligence, or willful misconduct; provided that Seller shall usecommercially reasonable efforts to resume, with the least possible delay, the performance as
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soon as reasonably practicable. Should a Force Majeure Event continue for 30 consecutive days,Buyer may thereafter, during the continuance of such Force Majeure Event, terminate thisAgreement immediately upon delivery of written notice of termination to Seller. Buyer shallhave no obligation to pay any fees or other amounts to Seller, except for amounts already dueand owed to Seller for Transition Services actually rendered prior to the occurrence of the ForceMajeure Event, for so long as Seller is unable to provide the Transition Services in compliancewith this Agreement.
11. Assignment. This Agreement may not be assigned or otherwise transferred by eitherParty without the prior written consent of the other Party; provided, however, that Seller may, inits sole discretion and without any consent of Buyer, but subject to continued compliance withSection 1(b) and the other terms and conditions of this Agreement, assign, delegate or otherwisetransfer (whether by operation of law or otherwise) any of its rights or obligations under thisAgreement to one or more of its Affiliates. No assignment shall relieve the assigning Party ofany of its obligations hereunder.
12. Severability. Whenever possible, each provision of this Agreement shall be interpretedin such manner as to be effective and valid under Applicable Law, but if any provisions of thisAgreement is held to be invalid, illegal or unenforceable in any respect under any applicable Lawor rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any otherprovision in such jurisdiction, and this Agreement shall be reformed, construed and enforced insuch jurisdiction so as to best give effect to the intent of the Parties.
13. Amendment; Entire Agreement. This Agreement may not be amended, supplementedor otherwise modified except by an instrument in writing signed by each of the Parties. ThisAgreement, together with Schedule A hereto, contains the entire agreement of the Parties withrespect to the subject matter hereof, superseding all negotiations, discussions and preliminaryagreements with respect to the transactions contemplated hereby, whether written or oral, madeprior to the date hereof.
14. No Third Party Beneficiaries. This Agreement is solely for the benefit of the Partiesand no provision of this Agreement will be deemed to confer upon third parties any remedy,claim, liability, reimbursement, claim of action or other right in excess of those existing withoutreference to this Agreement.
15. Waiver. The failure of any Party to enforce any condition or part of this Agreement atany time will not be construed as a waiver of that condition or part, nor will it forfeit any rightsto future enforcement thereof. No waiver shall be effective unless it is in writing and signed byan authorized representative of the waiving Party.
16. Governing Law; Jurisdiction and Venue. This Agreement shall be governed by andconstrued in accordance with the Laws of the State of Minnesota and the Bankruptcy Code andApplicable Federal Rules of Bankruptcy Procedure, irrespective of conflicts of law principles. Inthe event of any conflict between the laws of the State of Minnesota and the Bankruptcy Code,the Bankruptcy Code will prevail. Jurisdiction and venue shall be with the Bankruptcy Court,which may apply federal bankruptcy law and procedure in its discretion, and the parties herebyirrevocably consent to such venue and submit to such jurisdiction.
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17. Counterparts. This Agreement may be executed in several counterparts, each of whichshall be deemed to be an original, and all of which together shall be deemed to be one and thesame instrument. Signed counterparts of this Agreement may be delivered by facsimile and byscanned .pdf image.
18. Notices. Except as otherwise provided herein, all notices, requests, claims, demands,waivers and other communications hereunder shall be given to the pPersons and in the mannerprovided in the Purchase Agreement.
19. Relationship of the Parties. It is expressly agreed that the relationship between Buyerand Seller shall not constitute a partnership, joint venture, or agency. The Parties areindependent contractors. Each Party retains control over its personnel, and the employees of anyParty shall not be considered employees of the other Parties. None of Buyer or Seller shall havethe authority to make any statements, representations, or commitments of any kind, or to takeany action, which shall be binding on the other, without the prior consent of the other Party to doso.
20. Construction. Section 1.3 of the Purchase Agreement is incorporated herein byreference, given it hereunder.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executedon their respective behalf, by their respective officers thereunto duly authorized, all as of the dayand year first above written.
WD ENCORE SOFTWARE, LLC
By:Name:Title:
AVANQUEST NORTH AMERICA LLC
By:Name:Title:
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SCHEDULE A
TRANSITION SERVICES
1.
Service Title: Merchant Services
Seller Point Person:
Service Description:
The following merchant services will be maintained for 60 daysfollowing Closing:
Seller shall maintain all merchant and PayPal accountsfollowing Closing so that Buyer may migrate all sales
es toaccounts.
Fees and timing ofPayment of Fees:
$_________ paid at Closing
2.
Service Title: IT
Seller Point Person:
Service Description:
Transition Services shall consist of reasonable assistance withproject management of overall technical and asset transitionactivities and reasonable assistance related to the following:
A. Short-term IT Services: The following services will bemaintained for 30 days following Closing:
Seller to maintain (a) Level 3 Minnetonka colocation centerand internet connections and (b) internet connection anddedicated line to Greenville datacenter
B. Mid-term IT Services: The following services will bemaintained until the earlier of 45 days following the Closing Date orBuyer having taken the steps necessary to take ownership of theparticular service:
Customer Contact Services: Seller to maintain all customerservice email, telephone and chat servicesAmazon Web Services: Seller to maintain AWS hostingaccount.CCH Tax Service: Seller to maintain the CCH sales taxservice license.Asknet: Seller to keep service in effect for ESD downloadsand serial number activation.
C. Other IT Services: The following services will be maintainedfor 30 days following Closing:
Describing IT system and IT use of the Business, including:
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o Provision of background information on the ITapplication platforms used in the Business anddiscussion of Buyer potential system transitionapproaches
o Provision of information and explanations regardingcurrent data structures, and business and applicationprocesses used in the Business
Transferring data and identifying data management andother related assets, including:
o Determination of requirements for transfer of dataand other related assets of the Business, andadministration of data management and/or othersystem(s), as applicable
o Development and applicable testing and executionof the data extraction and transfer utilities identifiedby Buyer and agreed to by Seller
o Facilitation of introductions for the licensing ofrelated software and / or SaaS platforms used in theBusiness
o For the avoidance of doubt, Seller may remove anyattorney-client privileged communications andmaterials from any email files prior to their transferto Buyer hereunder
These Transition Services are provided using various thirdparty software and information technology solutions. Sellerwill identify to Buyer all such third party service providersas promptly as practicable.
Fees and timing ofPayment of Fees:
$_________ paid at Closing.
3.
Service Title: Staffing/Human Resources
Seller Point Person:
Service Description:
Transition Services shall consist of reasonable assistance related tothe following human resources activities:
Providing the personnel to perform the Transition ServicesProviding for 30 days of full-time employment for AdamRebholz, whose exclusive job it will be to help withserver/e-commerce transition
Fees and timing ofPayment of Fees:
$_________ paid at Closing.
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