US Magnesium - Chapter 11 APA Summary

Sale Process Summary

Parties Involved

• Seller: US Magnesium LLC, Debtor and Debtor in Possession (Case No. 25-11696 (BLS), U.S. Bankruptcy Court for the District of Delaware)
• Purchaser: Total Energy Corp.

Asset Being Sold

• A 26MW GE Frame SPA (MS5001) gas turbine generator package (the "Turbine"), including but not limited to the turbine, generator, gearbox, starting system, lubrication system, control system, exhaust system, inlet air filtration, and all ancillary equipment and components as depicted and detailed in drawing SOM6645548.
• The Turbine is sold "as is" and "where is" and with all faults, and the Seller makes no representation or warranty whatsoever with respect to the Turbine, including, without limitation, any (a) warranty of merchantability; (b) warranty of fitness for a particular purpose; (c) warranty of title; (d) warranty against infringement of intellectual property rights of a third party; or (e) warranty that the transfer complies with the provisions of the Uniform Commercial Code. By accepting the Turbine and the Bill of Sale, Purchaser acknowledges that it has not relied on any representation or warranty made by the Seller or any other person on its behalf.
• Purchaser, at its own expense, is required to pick up, load, and remove the Turbine within ninety (90) days following entry of the Sale Order.

Purchase Price and Consideration

• Purchase Price: $7,511,010.19 (Seven Million Five Hundred Eleven Thousand Ten Dollars and Nineteen Cents), to be paid within thirty (30) days of approval by the Bankruptcy Court.
• The Purchaser is to submit a good faith deposit of $2,000,000.00 (Two Million Dollars) in conjunction with signing the Bill of Sale, to be applied toward the Purchase Price.
  • If payment of the Purchase Price is not made within thirty (30) days of Bankruptcy Court approval, the deposit will be deemed non-refundable and retained by the Seller.

Sale Free and Clear

• Pursuant to section 363(f) of the Bankruptcy Code, the Turbine is sold free and clear of all liens, claims, encumbrances, and interests.
• Wells Fargo Bank, N.A. ("Wells Fargo") shall retain a lien on the net sale proceeds (net of costs and expenses directly incurred to transfer title and deliver the Turbine to Purchaser). Such net proceeds shall be paid to Wells Fargo as soon as practicable after the Debtor's receipt thereof, and in no event later than three (3) business days after receipt.
• Upon the Debtor's payment of the sale proceeds to Wells Fargo in good funds, any valid or asserted lien, claim, encumbrance, or interest on the Turbine or sale proceeds shall be deemed waived and released, and shall automatically no longer attach to the Turbine.
• All persons or entities holding liens, claims, encumbrances, or interests against the Turbine are permanently enjoined from asserting such claims against the Purchaser or its successors, assigns, or property.
• For the avoidance of doubt, except with respect to its asserted lien or interest in the Turbine and related sale proceeds, nothing in this Order shall affect or impair Tooele County's other rights reserved under paragraph 43 of the separate, prior Sale Order [D.I. 583].

No Contingencies

• There are no diligence contingencies, financing contingencies, or other contingencies applicable to the Bill of Sale and Purchaser's obligations to perform, other than the entry of the Sale Order.

Good Faith Purchaser

• The transaction was negotiated, proposed, and entered into by the Debtor and Purchaser in good faith, without collusion, and from arm's length bargaining positions.
• Purchaser is a "good faith" purchaser within the meaning of section 363(m) of the Bankruptcy Code and is entitled to all protections afforded thereby.

Sale Order Effectiveness

• The Sale Order is effective and enforceable immediately upon entry. The fourteen (14)-day stay provided under Bankruptcy Rule 6004(h) is expressly waived.
• Time is of the essence in closing the Sale, and the Debtor and Purchaser intend to close as soon as practicable.

Governing Law and Jurisdiction

• The Bill of Sale is governed by and construed in accordance with the laws of the State of Delaware. All disputes are subject to the jurisdiction of the U.S. Bankruptcy Court for the District of Delaware.
• The Bankruptcy Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of the Sale Order and the Revised Bill of Sale.

Additional Provisions

• No bulk sales, bulk transfer, or similar law of any state or jurisdiction applies to the Sale; the Debtor and Purchaser waive any requirement of compliance with, and any claims related to noncompliance with, such laws.
• This Order is good and sufficient evidence of the transfer of title in the Turbine to the Purchaser, and a certified copy may be filed or recorded with the appropriate clerks, recorders, and governmental agencies to evidence the cancellation of all liens, claims, encumbrances, and interests.
• The Order and the Revised Bill of Sale are binding upon the Debtor and its successors and assigns, all creditors and interest holders (whether known or unknown), the Purchaser and its successors and permitted assigns, and any subsequent trustee appointed in the chapter 11 case or upon conversion to chapter 7.
• All objections to the Motion or the relief granted that have not been withdrawn, waived, or settled are overruled and denied on the merits.