ASSET PURCHASE AGREEMENT

Exhibit 2.1

AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT

dated as of April 23, 2009

among

WORKHORSE INTERNATIONAL HOLDING COMPANY

and

NAVISTAR, INC.

(as Guarantor)

and

MONACO COACH CORPORATION

and

THE OTHER SELLERS NAMED HEREIN

 

 

TABLE OF CONTENTS

 

AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION
	1.1	Definitions
	1.2	Rules of Construction
ARTICLE II PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES
	2.1	Purchase and Sale of Assets
	2.2	Assignment and Assumption of Liabilities
	2.3	Excluded Assets
	2.4	No Other Liabilities Assumed
	2.5	Deemed Consents and Cures
	2.6	Cure Payments
	2.7	Post-Closing Assignment of Contracts
ARTICLE III BASIC TRANSACTION
	3.1	Payment of Purchase Price
	3.2	Further Assurances
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS
	4.1	Validity of Agreement
	4.2	Organization, Standing and Power
	4.3	No Conflicts or Violations
	4.4	Financial Statements and Related Matters
	4.5	Title to Assets; Assets Necessary to Do Business
	4.6	Employee Benefit Plans
	4.7	Labor Matters
	4.8	Personnel Matters
	4.9	Litigation, Orders
	4.10	Subsidiaries and Affiliates; Ownership Interests
	4.11	Real Property Assets
	4.12	Taxes
	4.13	Compliance with Law
	4.14	Cure Amounts
	4.15	Environment Matters
	4.16	Inventory
	4.17	Absence of Undisclosed Liabilities
	4.18	Affiliated Transactions
	4.19	Intellectual Property
	4.20	Insurance
	4.21	Contracts
	4.22	Relationships with Customers and Suppliers

 

 

 

 

AMENDED AND RESTATED

ASSET PURCHASE AGREEMENT

ARTICLE I

DEFINITIONS AND RULES OF CONSTRUCTION

ARTICLE II

 

PURCHASE AND SALE; ASSUMPTION OF CERTAIN LIABILITIES

2.1   Purchase and Sale of Assets .

 

(a)   Subject to the terms and conditions set forth in this Agreement, at the Closing, Sellers shall sell, convey, assign, transfer and deliver to Purchaser, free and clear of all Liens (except for the Assumed Obligations and Permitted Liens), and Purchaser shall purchase, acquire and take assignment and delivery of, for the consideration specified in Section  3.1 , all properties, assets, rights, titles and interests of every kind and nature, of Sellers (including indirect and other forms of beneficial ownership) as of the Closing Date, which are used in or related to the Business, whether tangible or intangible, real or personal and wherever located and by whomever possessed, including, without limitation, all of the following assets but excluding Excluded Assets pursuant to Section  2.3 (all of the assets to be sold, conveyed, assigned, transferred and delivered to Purchaser hereunder herein called the " Acquired Assets "):

 

(i)   all Intellectual Property used in or related to the Business (including all of the Intellectual Property set forth on Schedule  4.19 ), together with all income, royalties, damages and payments due or payable as of the Closing or thereafter (including damages and payments for past, present or future infringements or misappropriations thereof), the right to sue and recover for past infringements or misappropriations thereof, and any and all corresponding rights that, now or hereafter, may be secured throughout the world and all copies and tangible embodiments of any such Intellectual Property in Sellers' possession or control;

 

(ii)   all trademarks, service marks, logos, slogans, trade names, and corporate names (and all translations, adaptations, derivations and combinations of the foregoing) and Internet domain names incorporating "Roadmaster", "R-Sport" or any derivations therefrom and all goodwill associated with any of the foregoing, together with all income, royalties, damages and payments due or payable to Sellers as of the Closing or thereafter (including damages and payments for past, present or future infringements or misappropriations thereof), the right to sue and recover for past infringements or misappropriations thereof, and any and all corresponding rights that, now or hereafter, may be secured throughout the world;

 

(iii)   all trademarks, service marks and logos incorporating "Signature Resorts Design" logo (but excluding the word mark "Signature Resorts" within such logo) or any derivations therefrom and all goodwill associated with any of the foregoing, together with all income, royalties, damages and payments due or payable to Sellers as of the Closing or thereafter (including damages and payments for past, present or future infringements or misappropriations thereof), the right to sue and recover for past infringements or misappropriations thereof, and any and all corresponding rights that, now or hereafter, may be secured throughout the world;

 

 

(iv)   all of Sellers' rights existing under the Assumed Executory Contracts set forth on Schedule 2.1(a)(iv) ;

 

(v)   all Acquired Owned Real Property set forth on Schedule 2.1(a)(v) ;

 

(vi)   all supplier based tooling, wherever located;

 

(vii)   all signage and other materials incorporating the logos, trademarks, trade names, corporate names, service marks, or brand designations of Sellers, which are owned by any Seller but are leased to or otherwise held by Monaco Dealers;

 

(viii)   all Systems required to operate the Business;

 

(ix)   all leasehold improvements and all machinery, tooling (including all tooling and "old" molds for former models), equipment (including all transportation, vehicles, testing equipment and office equipment), fixtures, trade fixtures, computer equipment and hardware, telephone systems, network systems and furniture owned by Sellers and, in each case, used in or related to the Business, wherever located, including, without limitation, all such items which are located in any building, warehouse, office or other space leased, owned or occupied by Sellers or otherwise used in or related to the Business, including each of the foregoing that is set forth in the Asset Register set forth on Schedule  2.1(a)(ix) (the " Asset Register ");

 

(x)   all Inventory used in or related to the Business;

 

(xi)   all office supplies, production supplies and other supplies, spare parts, other miscellaneous supplies, and other tangible property of any kind used in or related to the Business, wherever located, including, without limitation, all property of any kind located in any building, office or other space leased, owned or occupied by Sellers or in any warehouse where any of Sellers' properties and assets may be situated;

 

(xii)   all RV show deposits related to the Business;

 

(xiii)   all claims, indemnities, warranties, guarantees, refunds, causes of action, rights of recovery, rights of set-off and rights of recoupment of every kind and nature (whether or not known or unknown or contingent or non-contingent) related to the Acquired Assets or the Business (other than those related to the Excluded Assets or the Unassumed Liabilities);

 

(xiv)   the right to receive and retain mail and other communications used in or related to the Business;

 

(xv)   all deposits and prepayments held by Third Parties pursuant to any Assumed Executory Contract;

 

 

(xvi)   all Books and Records used in or related to the Business;

 

(xvii)   all advertising, marketing and promotional materials and all other printed or written materials used in or related to the Business;

 

(xviii)   all transferable Permits, licenses, certifications and approvals from all permitting, licensing, accrediting and certifying agencies, and the rights to all data and records held by such permitting, licensing and certifying agencies, used in or related to the Business;

 

(xix)   all goodwill as a going concern and all other intangible properties used in or related to the Business;

 

(xx)   all telephone numbers and IP addresses used in or related to the Business;

 

(xxi)   all promotional allowances, vendor rebates and similar items related to the Business;

 

(xxii)   the rights to make claims and to receive proceeds under insurance policies to the extent related to an Acquired Asset or the Business or to the extent a liability is asserted against Purchaser or any of its Affiliates in connection with the Acquired Assets or the Business;

 

(xxiii)   ParentCo's membership in the Recreation Vehicle Industry Association (" RVIA ") and all deposits previously paid to RVIA associated with such membership; and

 

(xxiv)   all security deposits relating to Assumed Executory Contracts.

 

(b)   All of the Acquired Assets shall be sold, assigned, transferred, conveyed and delivered to Purchaser free and clear of all Liens pursuant to Section 363(f) of the Bankruptcy Code (other than Permitted Liens), whether arising prior to or subsequent to the date of the filing of the Chapter 11 petitions of Sellers.

 

(c)   Notwithstanding anything in this Agreement to the contrary, Purchaser may, consistent with the Order to be sought pursuant to Section  6.6(c) hereof, revise the Disclosure Schedules setting forth the Acquired Assets and the Excluded Assets to add or eliminate any lease, Contract or other asset (other than adding Facilities to Schedule  2.1(a)(v) ) at any time on or prior to the fifteenth (15th) business day prior to the Sale Hearing and require Sellers to give notice to the parties to any such lease or Contract; provided that such change shall not affect the amount of the Purchase Price except that, with respect to Contracts added to the Acquired Assets after the date hereof pursuant to this Section  2.1(c) , Purchaser shall pay (on behalf of Sellers) any Cure Payments associated with such Contracts and deduct the amount of such Cure Payments relating thereto from the Purchase Price subject to Section  2.6 hereof.

 

2.2   Assignment and Assumption of Liabilities .

 

 

(a)   Subject to the terms and conditions set forth in this Agreement, Purchaser shall only assume from Sellers and thereafter be responsible for the payment, performance or discharge of the following liabilities and obligations of Sellers (all such liabilities and obligations herein called the " Assumed Obligations "):

 

(i)   obligations under the Assumed Executory Contracts first arising after the Closing (but excluding liabilities for breaches of such contracts or commitments occurring prior to the Closing Date); and

 

(ii)   up to $2,000,000 in other liabilities (such as trade or accounts payable with key suppliers and/or certain rebates to dealers), if any, expressly set forth on Schedule  2.2(a)(ii) attached hereto (the " Section 2.2(a)(ii) Liabilities "), which shall reduce the Cash Portion on a dollar-for-dollar basis in accordance with Section  3.1(a) (i)(D) .  Notwithstanding anything in this Agreement to the contrary, Purchaser may revise Schedule  2.2(a)(ii) on or before May 15, 2009 to add (subject to the $2,000,000 cap) or remove any Section 2.2(a)(ii) Liabilities from such Schedule  2.2(a)(ii) .

 

(b)   Notwithstanding anything in this Agreement to the contrary, Sellers hereby acknowledge and agree that Purchaser is not assuming from Sellers, or is in any way responsible for, the Unassumed Liabilities.

 

(c)   Section 2.2(a) shall not limit any claims or defenses Purchaser may have against any party other than Sellers.  The transactions contemplated by this Agreement shall in no way expand the rights or remedies of any Third Party against Purchaser or Sellers as compared to the rights and remedies which such Third Party would have had against Sellers absent the Chapter 11 Cases had Purchaser not assumed such Assumed Obligations.

 

2.3   Excluded Assets .  Notwithstanding anything to the contrary in this Agreement, the following assets of Sellers shall be retained by Sellers and are not being sold or assigned to Purchaser hereunder (all of the following are referred to collectively as the " Excluded Assets "):

 

(a)   any and all rights under this Agreement and avoidance claims or causes of action arising under the Bankruptcy Code or applicable state law, including, without limitation, all rights and avoidance claims of Sellers arising under chapter 5 of the Bankruptcy Code;

 

(b)   all Owned Real Property and any other interests in real property, in each case other than the Acquired Owned Real Property;

 

(c)   all leases of Sellers other than the Assumed Equipment Leases (the " Excluded Leases ") and all Contracts other than the Assumed Executory Contracts (the " Excluded Contracts ");

 

(d)   any asset or Contract set forth on Schedule  2.3(d) attached hereto; provided that Purchaser may amend the Disclosure Schedules setting forth the Acquired Assets and the Excluded Assets attached hereto at any time on or before five (5) days prior to the Closing Date in order to exclude from the definition of Acquired Asset, and include in the definition of Excluded Asset, any other asset, lease or Contract not otherwise excluded, as the case may be; provided , however , that such exclusion shall not serve to reduce or otherwise affect the amount of the Purchase Price;

 

 

(e)   all cash (including, without limitation, checking account balances, certificates of deposit and other time deposits and petty cash) (" Cash ") and marketable and other securities;

 

(f)   prepayments and deposits other than those included in Section  2.1(a) and all claims, indemnities, warranties, guarantees, refunds, causes of action, rights of recovery, rights of set-off and rights of recoupment other than those included in Section  2.1(a) ;

 

(g)   all of Sellers' accounts and notes receivable (whether current or noncurrent) and all causes of action specifically pertaining to the collection of the foregoing;

 

(h)   all assets, properties, rights, titles and interests, all Inventory and all Intellectual Property, used exclusively in connection with the operation of the Roadmaster Cargo Trailer Business;

 

(i)   any aircraft hangers or related assets (including any aircraft) owned, leased or guaranteed by any Seller, wherever located;

 

(j)   all assets, rights, titles and interests, all Inventory and all Intellectual Property, used exclusively in connection with the operation of the Motorhome Resorts Business, including land held as inventory, wherever located

 

(k)   all machinery, tooling, equipment, trade fixtures, computer equipment and hardware, telephone systems, network systems and furniture owned by Sellers and not used in or related to the Business or set forth on Schedule  2.3(k) (if any);

 

(l)   all of Sellers' Tax refunds, rebates, credits and similar items relating to any period, or any portion of any period, on or prior to the Closing Date;

 

(m)   U.S. intent-to-use trademark application for NAUTICA (serial number 77/188276 filed on 5/23/2007) and all goodwill associated therewith;

 

(n)   all real and tangible personal property presently located at the 4505 Monaco Way, Wildwood, Florida 34785 Owned Real Property (the " Wildwood Assets "); provided , however, that the Wildwood Assets shall not include any Intellectual Property of Sellers used in or related to the Business;

 

(o)   income Tax Returns of Sellers and related materials;

 

(p)   the equity securities or other ownership interest of any Seller; and

 

(q)   the equity securities or other ownership interest of any of Sellers' Affiliates.

 

2.4   No Other Liabilities Assumed .

 

 

(a)   Each Seller acknowledges and agrees that pursuant to the terms and provisions of this Agreement, Purchaser will not assume, or in any way be liable or responsible for, any Liability or obligation of any Seller (including Liabilities relating to (x) the Excluded Assets and (y) the pre-petition or post-petition (but pre-Closing) operation of the Business or the Acquired Assets (and the use thereof)), whether relating to or arising out of the Business, the Excluded Assets or the Acquired Assets or otherwise, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, other than the Assumed Obligations.  In furtherance and not in limitation of the foregoing, except as specifically set forth in Section  2.2 , neither Purchaser nor any of its Affiliates shall assume, and shall not be deemed to have assumed, any Indebtedness, Claim, Liability or other obligation of any Seller or any predecessor or Affiliate of any Seller whatsoever (other than the Assumed Obligations), including, but not limited to the following (collectively, the " Unassumed Liabilities "):

 

(i)   all obligations, Claims, or Liabilities of Sellers or any predecessor or Affiliate of any Seller that relate to any of the Excluded Assets or Excluded Contracts;

 

(ii)   any amounts due or which may become due or owing under the Assumed Executory Contracts with respect to the period prior to Closing (including, without limitation, any Cure Payments);

 

(iii)   the Excluded Environmental Liabilities (regardless of whether such Liabilities accrue in the first instance to Purchaser or to any Seller or Affiliate of any Seller) to the fullest extent permitted by any Regulation;

 

(iv)   subject to Section  6.10 , all obligations, Claims, or Liabilities of Sellers or any predecessor or Affiliate of any Seller or for which Sellers or any predecessor or Affiliate of any Seller could be liable relating to Taxes accrued or due and payable at or prior to the Closing (including with respect to the Acquired Assets or otherwise) including, without limitation, any Taxes that will arise as a result of the sale of the Acquired Assets or the assumption of the Assumed Obligations pursuant to this Agreement and any deferred Taxes of any nature;

 

(v)   all obligations, Claims, or Liabilities for any legal, accounting, investment banking, brokerage or similar fees or expenses incurred by any Seller or any predecessor or Affiliate of any Seller in connection with, resulting from or attributable to the transactions contemplated by this Agreement or otherwise;

 

(vi)   all Indebtedness of any Seller or any predecessor or Affiliate of any Seller;

 

(vii)   all obligations and Liabilities of Sellers related to the right to or issuance of any capital stock or other equity interest of any Seller or any predecessor or Affiliate of any Seller, including, without limitation, any stock options or warrants;

 

(viii)   all obligations and Liabilities of Sellers or any predecessor or Affiliate of any Seller resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of Sellers or ownership or lease of any properties or assets or any properties or assets previously used by Sellers or any predecessor or Affiliate of any Seller, or other actions or omissions of Sellers or any predecessor or Affiliate of any Seller, including, without limitation, any amounts due or which may become due or owing under the Assumed Executory Contracts with respect to the period prior to Closing (except for Cure Payments), whether known or unknown on the date hereof;

 

 

(ix)   all obligations and Liabilities of Sellers or any predecessor or Affiliate of any Seller resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of Sellers or any predecessor or Affiliate of any Seller anywhere (including their development, manufacturing, marketing, sale or distribution activities) or the ownership or lease of any properties or assets or any properties or assets previously used by Sellers or any predecessor or Affiliate of any Seller at any time, or other actions, omissions or events occurring prior to the Closing and which (i) constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of any rule, Regulation, treaty or other similar authority or (ii) relate to any and all Claims, disputes, demands, actions, Liabilities, damages, suits in equity or at law, administrative, regulatory or quasi-judicial proceedings, audits, investigations, arbitrations, complaints, grievances, proceedings, accounts, costs, expenses, setoffs, contributions, attorneys' fees and/or causes of action of whatever kind or character (" Proceeding ") against Sellers or any predecessor or Affiliate of any Seller, whether past, present, future, known or unknown, liquidated or unliquidated, accrued or unaccrued, pending or threatened;

 

(x)   any obligation or Liability arising out of any Proceeding commenced against Sellers or any predecessor or Affiliate of any Seller after the Closing and arising out of, or relating to, any occurrence or event happening prior to the Closing;

 

(xi)   all obligations, Claims or Liabilities (whether known or unknown) with respect to the employees or former employees, or both (or their representatives) of Sellers or any predecessor or Affiliate of any Seller arising prior to the Closing Date, including, without limitation, payroll, vacation, sick leave, worker's compensation, unemployment benefits, pension benefits, employee stock option or profit sharing plans, health care plans or benefits, or any other employee plans or benefits or other compensation of any kind to any employee, and obligations of any kind including, without limitation, any Liability pursuant to the WARN Act for any action or inaction prior to the Closing;

 

(xii)   any obligation or Liability arising under any Employee Benefit Plan or any other employee benefit plan, program or arrangement at any time maintained, sponsored or contributed to by Sellers or any predecessor or Affiliate of any Seller or any ERISA Affiliate, or with respect to which Sellers or any predecessor or Affiliate of any Seller or any ERISA Affiliate has any Liability;

 

(xiii)   all accounts payable of Sellers or any predecessor or Affiliate of any Seller arising prior to the Closing;

 

(xiv)   any obligation or Liability arising out of or relating to products and/or services of Sellers or any predecessor or Affiliate of any Seller to the extent provided, developed, made, manufactured, marketed, sold or distributed prior to the Closing, including any obligation or Liability for (a) infringement or misappropriation of Intellectual Property of any Person, (b) Product Liabilities and (c) product recalls or similar actions;

 

 

(xv)   any obligation or Liability under any Assumed Executory Contract which arises after the Closing but which arises out of or relates to any breach that occurred prior to the Closing;

 

(xvi)   any obligation or Liability under any contract, agreement, lease, mortgage, indenture or other instrument of Sellers or any predecessor or Affiliate of any Seller not assumed by Purchaser hereunder;

 

(xvii)   any obligation or Liability under any employment, collective bargaining, severance, change of control, retention or termination agreement with any employee or former employee, union, labor organization or other employee representative, consultant or contractor (or their representatives) of Sellers or any predecessor or Affiliate of any Seller (including, without limitation, any obligations to pay bonuses, change of control payments or similar payment obligations, or other forms of compensation arising, vesting (whether fully or partially) or payable (whether or not at the Closing), to any current or former directors, officers, employees, consultants or agents of Sellers or any of their Affiliates as a result of the consummation of the transactions contemplated by the Agreement);

 

(xviii)   any obligation or Liability arising out of or relating to any grievance by current or former employees of Sellers or any predecessor or Affiliate of any Seller, whether or not the aggrieved employees are hired by Purchaser;

 

(xix)   any and all warranty obligations to customers and/or dealers of Sellers or any of their Affiliates, or to retail consumers or to any other Person;

 

(xx)   all obligations and Liabilities of Sellers or any predecessor or Affiliate of any Seller resulting from, caused by or arising out of, or which relates to, (1) the business dealings or relationship between Sellers and the Monaco Dealers under contract, statute, Regulation or otherwise, or (2) the termination of any Monaco Dealer Agreement or other arrangement or understanding with a Monaco Dealer;

 

(xxi)   any obligation or Liability of Sellers or any predecessor or Affiliate of any Seller to any shareholder or Affiliate of any Seller;

 

(xxii)   any obligation or Liability to indemnify, reimburse or advance amounts to any officer, director, employee or agent of Sellers or any predecessor or Affiliate of any Seller;

 

(xxiii)   any obligation or Liability to distribute to any Seller's shareholders or otherwise apply all or any part of the consideration received hereunder;

 

(xxiv)   any obligation or Liability arising out of or resulting from non-compliance with any law, ordinance, Regulation or treaty by Sellers or any predecessor or Affiliate of any Seller;

 

 

(xxv)   any obligation or Liability for infringement or misappropriation arising from the development, modification or use of any Intellectual Property on or before the Closing;

 

(xxvi)   any obligation or Liability of Sellers under this Agreement or any other document executed in connection herewith;

 

(xxvii)   any obligation or Liability of Sellers or any predecessor or Affiliate of any Seller based upon such Person's acts or omissions occurring after the Closing; and

 

(xxviii)   the Liabilities set forth on Schedule  2.4(a)(xxviii) attached hereto.

 

(b)   The parties acknowledge and agree that disclosure of any obligation or Liability on any Schedule to this Agreement shall not create an Assumed Obligation or other Liability of Purchaser, except where such disclosed obligation has been expressly assumed by Purchaser as an Assumed Obligation in accordance with the provisions of Section  2.2 hereof.

 

2.5   Deemed Consents and Cures .  For all purposes of this Agreement (including all representations and warranties of Sellers contained herein), Sellers shall be deemed to have obtained all required consents in respect of the assignment of any Assumed Executory Contract if, and to the extent that, pursuant to the Sale Order or other Bankruptcy Court Order, Sellers are authorized to assume and assign Assumed Executory Contracts to Purchaser pursuant to Section 365 of the Bankruptcy Code and any applicable Cure Payments have been satisfied by Purchaser, on behalf of Sellers, as provided in this Agreement.

 

2.6   Cure Payments .  To the extent that any Assumed Executory Contract is subject to a cure pursuant to Section 365 of the Bankruptcy Code, Purchaser shall pay, on behalf of Sellers, the amount of the Cure Payments set forth on Schedule  4.14 , and pursuant to Section  3.1(a) such payment shall reduce dollar-for-dollar the Purchase Price by such Cure Payments up to an amount not to exceed in the aggregate $550,000.  If a Cure Payment is not set forth on Schedule  4.14 , or if any Assumed Executory Contract is subject to a cure in excess of the amount set forth next to such Assumed Executory Contract on Schedule  4.14 , Sellers shall pay the amount of such Cure Payment or the excess of such Cure Payment over the amount set forth on Schedule  4.14 and shall fully indemnify for and hold Purchaser harmless from any costs, expenses or other Liabilities resulting from such cure obligations.  In the event that Sellers fail to pay such amount(s), Purchaser may pay such amount(s) (on behalf of itself and Sellers) and offset such amount(s) against any amount(s) Purchaser may owe Sellers.  Sellers hereby agree and acknowledge that the foregoing provision is in addition to, and not in derogation of, any statutory or other remedy that Purchaser may have against Sellers.  With respect to Contracts added to the Acquired Assets after the date hereof pursuant to Section  2.1(c) , Purchaser shall pay any Cure Payments associated with such Contract and deduct the amount of such Cure Payments relating thereto from the Purchase Price, provided , however , that the total amount of Cure Payments that can be deducted from the Purchase Price shall in no event exceed $550,000.

 

2.7   Post-Closing Assignment of Contracts .  After the Closing, with respect to any Contract which is not set forth on Schedule  2.1(a)(iv) attached hereto and provided such Contract has not been rejected by Sellers pursuant to Section 365 of the Bankruptcy Code, upon written notice(s) from Purchaser, as soon as practicable, Sellers shall take all actions reasonably necessary to assume and assign to Purchaser pursuant to Section 365 of the Bankruptcy Code any Contract(s) set forth in Purchaser's notice(s); provided that any applicable cure cost shall be satisfied by Purchaser at its own cost and expense.  Sellers agree and acknowledge that (i) they shall provide Purchaser with reasonable advance notice of any motion(s) to reject any Contract and (ii) the covenant set forth in this Section  2.7 shall survive the Closing.  Notwithstanding anything in this Agreement to the contrary, on the date any Contract is assumed and assigned to Purchaser pursuant to this Section  2.7 , such Contract shall be deemed an Assumed Executory Contract and deemed scheduled on Schedule  2.1(a)(iv) , under the appropriate heading for all purposes under this Agreement.

 

 

ARTICLE III

 

BASIC TRANSACTION

 

3.1   Payment of Purchase Price .

 

(a)   The aggregate purchase price for the Acquired Assets (the " Purchase Price ") shall be (i) an amount equal to $52,000,000 (the " Estimated Cash Portion ") minus (A) the sum of (x) sixty percent (60%) of the amount (if any) by which the RV Finished Goods Inventory of Sellers as of the Closing Date as shown on the Closing Statement (as defined in Section 3.1(c) below and as prepared in accordance with the provisions thereof) (the " Closing RV Finished Goods Inventory ") is less than the Baseline RV Finished Goods Inventory, (y) sixty-three percent (63%) of the amount (if any) by which the Chassis Inventory of Sellers as of the Closing Date as shown on the Closing Statement (the " Closing Chassis Inventory ") is less than the Baseline Chassis Inventory, and (z) twenty-nine percent (29%) of the sum of (I) the amount (if any) by which the RV Raw Material Inventory of Sellers as of the Closing Date as shown on the Closing Statement (the " Closing RV Raw Material Inventory ") is less than the Baseline RV Raw Material Inventory and (II) the amount (if any) by which the RV WIP Inventory of Sellers as of the Closing Date as shown on the Closing Statement (the " Closing RV WIP Inventory ") is less than the Baseline RV WIP Inventory (the sum of the amounts described in subclauses (I) and (II) being referred to as the " Combined Raw and WIP Shortfall "), minus (B) the net book value of any Missing Equipment as shown on the Closing Statement, minus (C) the amount of Cure Payments made by Purchaser on behalf of Sellers pursuant to Section  2.6 ; provided , however , that the aggregate amount of such Cure Payments shall not exceed $550,000, minus (D) the Section  2.2(a)(ii) Liabilities minus (E) the amounts Purchaser is entitled to deduct from the Purchase Price under Section  6.10 , Section  6.16 or any other Section of this Agreement (the amount in subsection (i) above, the " Cash Portion "), and (ii) the assumption of the Assumed Obligations.  

 

(b)   Notwithstanding anything to the contrary in Section  3.1(a) (i) , the Estimated Cash Portion shall be reduced (i) in the case of the Closing RV Raw Material Inventory and the Closing RV WIP Inventory, only if and to the extent that the Combined Raw and WIP Shortfall exceeds $500,000 (on a gross basis before application of the 29% factor referred to in Section  3.1(a) (i)(z) above) and (ii) in the case of Missing Equipment, only if and to the extent that the net book value of the Missing Equipment exceeds $500,000.

 

(c)   Prior to the Closing, ParentCo, Purchaser and their respective representatives shall jointly, at a time or times determined by Purchaser and reasonably acceptable to ParentCo, conduct a physical count of the Inventory and an inspection and audit of the machinery, tooling and equipment of the Business (wherever located) (the " Pre-Closing Audit ").  Purchaser and ParentCo shall confer in good faith with each other in the conduct of the Pre-Closing Audit.  Purchaser shall pay the reasonable actual costs incurred by Sellers in conducting the Pre-Closing Audit (but not in connection with any dispute related thereto, except to the extent set forth in Section  3.1(e) below).  No later than seven (7) days prior to the Closing Date, Purchaser shall deliver to ParentCo a schedule (the " Closing Statement "), setting forth the Closing RV Finished Goods Inventory, the Closing Chassis Inventory, the Closing RV Raw Material Inventory, the Closing RV WIP Inventory, the Missing Equipment, the Cure Payments and the Section  2.2(a)(ii) Liabilities and a certificate setting forth the resulting Cash Portion calculated with reference to such amounts (together with the Closing Statement, the " Purchase Price Calculation ").  The Closing Statement shall be prepared in a manner consistent with GAAP and the methodologies used for valuing the Baseline RV Finished Goods Inventory, the Baseline Chassis Inventory, the Baseline RV Raw Materials Inventory and the Baseline RV WIP Inventory, each as set forth in the Baseline Inventory Schedule attached hereto.

 

 

(d)   If within four (4) days following the delivery of the Purchase Price Calculation, ParentCo has not given Purchaser written notice of objection as to the Closing Statement and the resulting Cash Portion calculated with reference to the Closing RV Finished Goods Inventory, the Closing Chassis Inventory, the Closing RV Raw Material Inventory, the Closing RV WIP Inventory, the Missing Equipment, the Cure Payments and the Section  2.2(a)(ii) Liabilities, which notice of objection shall specify in reasonable detail the nature and dollar amount of any disagreement so asserted and shall be delivered only if (and to the extent that) ParentCo reasonably and in good faith determines that the Purchase Price Calculation and the resulting Cash Portion calculated with reference thereto delivered by Purchaser is incorrect or has not been determined in accordance with the guidelines and procedures set forth in this Agreement (the " Objection Notice "), then the Purchase Price Calculation as determined by Purchaser pursuant to Section  3.1(c) above shall be binding and conclusive on the parties hereto.

 

(e)   If ParentCo timely delivers to Purchaser an Objection Notice and within three (3) days of such delivery ParentCo and Purchaser fail to resolve in writing any differences which they have with respect to the matters specified in the Objection Notice, then ParentCo and Purchaser shall submit all matters (but only such matters) that remain in dispute and that were properly included in the Objection Notice to independent public accountants reasonably agreeable to Purchaser and ParentCo (the " Independent Accountants ") for review and resolution of such matters.  ParentCo and Purchaser shall instruct the Independent Accountants to make a final determination (the " Final Determination ") of the Closing RV Finished Goods Inventory, the Closing Chassis Inventory, the Closing RV Raw Material Inventory, the Closing RV WIP Inventory, the Missing Equipment, the Cure Payments and the Section  2.2(a)(ii) Liabilities and the resulting Cash Portion calculated with reference to such amounts to the extent such amounts are in dispute, in accordance with the guidelines and procedures set forth in this Agreement.  If issues are submitted to the Independent Accountants for resolution, ParentCo and Purchaser shall cooperate with the Independent Accountants during the term of its engagement and shall furnish or cause to be furnished to the Independent Accountants such work papers and other documents and information relating to the disputed issues as the Independent Accountants may request and are available to that party or its agents and shall be afforded the opportunity to present to the Independent Accountants any material relating to the disputed issues and to discuss the issues with the Independent Accountants.  Notwithstanding the foregoing, Purchaser and ParentCo shall instruct the Independent Accountants to not assign a value to any item in dispute greater than the greatest value for such item assigned by Purchaser, on the one hand, or ParentCo , on the other hand, or less than the smallest value for such item assigned by Purchaser, on the one hand, or ParentCo , on the other hand.  Purchaser and ParentCo shall also instruct the Independent Accountants to make the Final Determination based solely on presentations by Purchaser and ParentCo which are in accordance with the guidelines and procedures set forth in this Agreement (i.e., not on the basis of an independent review).  The Purchase Price Calculation and the determination of the of the Closing RV Finished Goods Inventory, the Closing Chassis Inventory, the Closing RV Raw Material Inventory, the Closing RV WIP Inventory, the Missing Equipment, the Cure Payments and the Section  2.2(a)(ii) Liabilities and the resulting Purchase Price calculated with reference thereto shall become final and binding on the parties on the date the Independent Accountants deliver the Final Determination in writing to Purchaser and ParentCo, which shall be requested by Purchaser and ParentCo to be delivered not more than seven (7) days following submission of such disputed matters.  The fees and expenses of the Independent Accountants shall be allocated to the parties as determined (and set forth in the Final Determination) by the Independent Accountants based upon the relative success (in terms of percentages) of each party's claim.  For example, if the Final Determination reflects a 60-40 compromise of the parties' claims, the Independent Accountants would allocate expenses 40% to the party whose claim was determined to be 60% successful and 60% to the party whose claim was determined to be 40% successful.

 

(f)   At the Closing, Purchaser shall be assigned the Acquired Assets and Assumed Obligations and shall pay by wire transfer to Sellers (i) an amount in cash equal to the Cash Portion, as set forth on the Purchase Price Calculation determined by Purchaser, if ParentCo does not deliver an Objection Notice, or, in the alternative, (ii) an amount in cash equal to the Cash Portion, as set forth on the Purchase Price Calculation determined by the Independent Accountants pursuant to Section  3.1(e) , if ParentCo timely submitted an Objection Notice to Purchaser, ParentCo and Purchaser were unable to resolve their differences and the Independent Accountants were requested to make a Final Determination pursuant to Section  3.1(e) .

 

3.2   Further Assurances .  From time to time after the Closing and without further consideration, (i) Sellers, upon the request of Purchaser, shall execute and deliver such documents and instruments of conveyance and transfer as Purchaser may reasonably request in order to consummate more effectively the purchase and sale of the Acquired Assets as contemplated hereby and to vest in Purchaser title to the Acquired Assets transferred hereunder, or to otherwise more fully consummate the transactions contemplated by this Agreement, and (ii) Purchaser, upon the request of Sellers, shall execute and deliver such documents and instruments of assumption as Sellers may reasonably request in order to confirm Purchaser's Liability for the obligations specifically assumed hereunder or otherwise to more fully consummate the transactions contemplated by this Agreement.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Sellers jointly and severally represent and warrant to Purchaser that the statements contained in this Article IV are true and correct as of the date of this Agreement, except as expressly set forth in the disclosure schedules delivered by Sellers to Purchaser on the date hereof (the " Disclosure Schedule ").  For the avoidance of doubt, if any section of the Disclosure Schedule discloses an item or information in such a way as to make its relevance to the disclosure required by another section of the Disclosure Schedule reasonably apparent based on the substance of such disclosure, the matter shall be deemed to have been disclosed in such other section of the Disclosure Schedule, notwithstanding the omission of an appropriate cross reference to such other section.

 

4.1   Validity of Agreement .  Subject to any necessary authorization from the Bankruptcy Court, each Seller has full power and authority to execute and deliver the Transaction Documents   to which it is a party and to consummate the transactions contemplated hereby and thereby.  The board of directors (or similar governing body) of each Seller has duly approved the Transaction Documents to which such Person is a party and has duly authorized the execution and delivery of such Transaction Documents and the consummation of the transactions contemplated thereby.  No other corporate or organizational proceedings on the part of any Seller are necessary to approve and authorize the execution and delivery of the Transaction Documents to which such Person is a party and the consummation of the transactions contemplated thereby.  All Transaction Documents to which any Seller is a party have been duly executed and delivered by such Person, except such Transaction Documents that are required by the terms hereof to be executed and delivered by such Person after the date hereof, in which case such Transaction Documents will be duly executed and delivered by such Person at or prior to the Closing, and, subject to any necessary authorization from the Bankruptcy Court, all Transaction Documents constitute, or will constitute, as the case may be, the valid and binding agreements of Sellers, enforceable against Sellers in accordance with their terms.

 

4.2   Organization, Standing and Power .  Each Seller is a corporation or limited liability company duly organized, validly existing and in good standing under the laws of the state of its incorporation,  Each Seller is in good standing and is qualified to do business in every jurisdiction in which it is required to be qualified, except where the failure to be in good standing or to obtain such qualification would not reasonably be expected to have a Material Adverse Effect or materially impede the ability of the Sellers to consummate the transactions contemplated hereby.  Each Seller has full power and authority and all material licenses, Permits and authorizations necessary to own and operate its properties and to carry on the Business as now conducted by it.  Subject to any necessary authorization from the Bankruptcy Court, each Seller has all requisite corporate power and authority to own, lease and operate its properties (including, without limitation, the Acquired Assets), to carry on the Business as now being conducted and to execute and deliver this Agreement and all agreements, instruments and other documents referred to herein, and, subject to the entry of the Sale Order, to perform its obligations hereunder and thereunder.

 

 

4.3   No Conflicts or Violations .  Except as set forth on Schedule  4.3 attached hereto, and to the extent any of the following is not enforceable due to operation of applicable bankruptcy law or the Sale Order, the execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby by Sellers do not and shall not: (a)(i) conflict with