Blog of Intellectual Capital

Sale of ClearEdge Power, Inc.

Further to Gerbsman Partners emails of June 9, 2014, May 21, 2014, May 14, 2014 and May 1, 2014, regarding the sale of Assets and Intellectual Property of ClearEdge Power, Inc. (“ClearEdge”), ClearEdge and two of its subsidiaries (collectively, “ClearEdge Power”) filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code (“Bankruptcy Code”) in the United States Bankruptcy Court for Northern District of California, San Jose Division (such cases are jointly administered under Case No. 14-51955)

Gerbsman Partners – http://gerbsmanpartners.com – has been retained by ClearEdge (http://www.clearedgepower.com) to solicit interest for the acquisition of all or substantially all of ClearEdge’s assets, including its Intellectual Property in whole or in part (collectively, the “ClearEdge Assets”) and equipment, inventory, executory contract rights and work-in-progress located at ClearEdge Power’s various facilities. Attached is a draft Asset Purchase Agreement, Bankruptcy Court Order on June 27, 2014 regarding Bidding Procedures (the Court approved these on June 26 and the actual Court Order is expected to be entered this weekend), Asset Purchase Agreement from the “stalking horse” and Wire Transfer information for the refundable deposit.

Please be advised that the ClearEdge Assets are being offered for sale pursuant Section 363 of the United States Bankruptcy Code. All matters relative to the bid procedures that will govern the sale were developed in consultation with the Official Committee of Unsecured Creditors. The bid deadline for specific assets is July 7, 2014, for any bid to be considered. These bids must be accompanied by an “executed APA, refundable deposit and proof of financial capability to support any bid in order to be a qualified bidder. Their will be a “live auction” for qualified bidders on July 9, 2014 at the offices of Dorsey & Whitney LLP, 305 Lytton Ave., Palo Alto, CA commencing at 9am PDT. Please see attached “Bidding Procedures Order” for full details on the process, timing and qualifications.

On June 26, 2014, a “stalking horse bid” was executed with Doosan Corporation for all the assets of ClearEdge. Please refer to the attached APA regarding the details of the “stalking horse” bid. Basically, the components of the bid are (1) base price of $ 20 million, (2) payment of executory contract cure costs of up to $ 12.899 million; and plus (3) payment of secured creditor claims on a discounted basis of up to $ 15 million in regard to secured claims against certain energy service agreements.

I would encourage all bidders for all assets to compete with the “stalking horse” bid, as well as bidders to make bids for separate assets or pools of assets, specifically for the service agreements.

Please contact Stephen O’Neill, Esq. 408 843 2719 oneill.stephen@dorsey.com and/or John WalsheMurray, Esq. 408 843 2718 murray.john@dorsey.com regarding legal questions about the Bid Procedures and Asset Purchase Agreement, Stalking Horse Bid and other legal questions.

IMPORTANT LEGAL NOTICE:

The information in this memorandum does not constitute the whole or any part of an offer or a contract.

The information contained in this memorandum relating to the ClearEdge Power Assets has been supplied by ClearEdge, by third parties and obtained from a variety of sources. It has not been independently investigated or verified by Gerbsman Partners or their respective agents.

Potential purchasers should not rely on any information contained in this memorandum or provided by Gerbsman Partners (or their respective staff, agents, and attorneys) in connection herewith, whether transmitted orally or in writing as a statement, opinion, or representation of fact. Interested parties should satisfy themselves through independent investigations as they or their legal and financial advisors see fit, as the Fixed Asset, Inventory and Patent lists may not be accurate.

Gerbsman Partners, and their respective staff and agents, (i) disclaim any and all implied warranties concerning the truth, accuracy, and completeness of any information provided in connection herewith and (ii) do not accept liability for the information, including that contained in this memorandum, whether that liability arises by reasons of ClearEdge Power’s or Gerbsman Partners’ negligence or otherwise.

Any sale of the ClearEdge Power Assets will be made pursuant to the Bankruptcy Code and will require approval of the United States Bankruptcy Court. All sales will be “as-is,” “where-is,” and on a “with all faults” basis, without any warranties, representations, or guarantees, either express or implied, of any kind, nature, or type whatsoever from, or on behalf of Gerbsman Partners. Without limiting the generality of the foregoing, Gerbsman Partners and their respective staff and agents, hereby expressly disclaim any and all implied warranties concerning the condition of the ClearEdge Power’s Assets and any portions thereof, including, but not limited to, environmental conditions, compliance with any government regulations or requirements, the implied warranties of habitability, merchantability, or fitness for a particular purpose.

For additional information, please see below and/or contact:

Steven R. Gerbsman
Gerbsman Partners
(415) 505-4991
steve@gerbsmanpartners.com

Kenneth Hardesty
Gerbsman Partners
(408) 591-7528
ken@gerbsmanpartners.com