ASSET PURCHASE AGREEMENT

 

Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

by and among

 

MURRAY, INC. and

 

MURRAY CANADA CO.

 

jointly and severally as Sellers

 

and

 

BRIGGS & STRATTON POWER PRODUCTS GROUP, LLC and

 

BRIGGS & STRATTON CANADA INC.

 

as Buyers

 

January 25, 2005

 

 

TABLE OF CONTENTS

 

 

 

ii

 

iii

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

 

 

iv

 

v

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is dated as of January 25, 2005, by and among Briggs & Stratton Power Products Group, LLC, a Delaware limited liability company (“ Briggs U.S. ”) and Briggs & Stratton Canada Inc., a corporation incorporated under the laws of the Province of Ontario (“ Briggs Canada ” and together with Briggs U.S. “ Buyers ” and each a “ Buyer ”), Murray, Inc. a Tennessee corporation on behalf of itself and any of its successors and assigns, including any liquidating trust, if any, created pursuant to any plan of reorganization (“ Murray U.S. ”), Murray Canada Co., an unlimited liability company organized and subsisting under the laws of the Province of Nova Scotia, Canada (“ Murray Canada ” and together with Murray U.S. “ Sellers ” and each a “ Seller ”), on the other hand.

 

WHEREAS, Murray U.S. filed a voluntary petition (the “ Petition ”) under Title 11 of the United States Code, 11 U.S.C. §§ 101, et. seq. (the “ Bankruptcy Code ”) on November 8, 2004 (the “ Petition Date ”) through which it has commenced a chapter 11 case (the “ Case ”) in the United States Bankruptcy Court for the Middle District of Tennessee (the “ Bankruptcy Court ” );

 

WHEREAS, the Buyers desire to purchase from the Sellers and the Sellers desire to sell to the Buyers the Acquired Assets (as hereinafter defined) upon the terms and conditions set forth in this Agreement:

 

(a) Under sections 363 and 365 of the Bankruptcy Code and the applicable Federal Rules of Bankruptcy Procedure, Briggs U.S. desires to purchase from Murray U.S., and Murray U.S. desires to sell to Briggs U.S. the U.S. Acquired Assets (as hereinafter defined);

 

(b) Briggs Canada desires to purchase from Murray Canada, and Murray Canada desires to sell to Briggs Canada, the Canadian Acquired Assets (as hereinafter defined);

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the parties hereto agree as follows:

 

Article I

DEFINITIONS

 

Section 1.1 Definitions.

 

(a) As used in this Agreement, the following terms have the meanings specified in this Section 1.1(a) .

 

“ Accounts Receivable ” means all gross accounts and notes receivable of the Sellers, including trade accounts receivable (including accounts receivable for any product shipped prior to but not invoiced as of, the Closing Date) outstanding as of the Closing Date and any other rights to receive payment for sales as of the Closing Date in respect of goods shipped, products sold or services rendered prior to the Closing Date.

 

“ Acquired Assets ” means all of the Sellers’ right, title and interest of every kind and nature in and to all assets owned or leased by the Sellers as of the Closing Date (or with respect to the Assumed Contracts of Murray U.S., as of the date of assumption and assignment to Briggs U.S.) including indirect and other forms of beneficial ownership, be they real or personal, tangible or intangible, fixed or current, wherever located and by whomever possessed, including without limitation, all of the following assets, but excluding the Excluded Assets:

 

(i) except for the Delinquent Accounts Receivable, all Accounts Receivable and any other current or non-current accounts and notes receivable, including any note or right of payment with respect to sale of the Murray Suzhou Interests, trade accounts receivable or right to receive payment;

 

(ii) all Inventory, including all stock in trade, merchandise, goods, supplies and other products and all of the raw materials, work-in-process, and finished products;

 

(iii) all machinery, equipment (including all transportation equipment), fixtures, trade fixtures and computer equipment wherever located, including, without limitation, all such items which are located in any building, warehouse, office or other space leased, owned or occupied in connection with the Business, including the items listed on Section 2.1 of the Disclosure Schedules but excluding any non-operations related fixtures, furniture, office equipment and telephone systems (collectively those assets in this clause (iii) , the “ Fixed Assets ”);

 

(iv) all Assumed Contracts and the Transition Period Collections;

 

(v) all confidentiality, noncompete or nondisclosure agreements executed by current or former vendors or suppliers of the Sellers or other third parties, in each case, relating to the Business, (a) to the extent the same are held by Murray U.S. and are assignable under Section 365 of the Bankruptcy Code without the consent of the third party or parties to such agreements or (b) if not so assignable, to the extent consented to by the third party or third parties to such agreements;

 

(vi) the Sellers’ interest in all applicable approvals, certifications, registrations or listings for products currently manufactured or sold by the Sellers, including but not limited to ANSI, UL, CPSC, CE and EMC, to the extent the same are assignable (the “ Transferable Certifications and Registrations ”);

 

(vii) all books and records, engineering design plans, blueprints and as-built plans, specifications, procedures and similar items of the Sellers, including books of account, all customer lists, billing records and other customer correspondence relating to the Business;

 

(viii) all of the rights or causes of action of any of the Sellers against a third party related to the Acquired Assets, the operation of the Business or the Assumed Obligations or Assumed Contracts arising out of transactions occurring prior to the Closing Date, except where such rights or causes of action relate to Excluded Liabilities and except for the Excluded Claims and direct or derivative causes of actions of the Sellers shareholders and/or creditors against present and former officers and directors of

 

2

the Sellers for acts, omissions or events occurring prior to the Closing Date; to the extent such rights or causes of action relate to both Assumed Obligations and Excluded Liabilities, the applicable Buyer and Seller shall share such rights or causes of action in the same proportion as their respective liabilities bear to the total liability relating to those rights, claims or causes of action;

 

(ix) all Business Intellectual Property (including all Intellectual Property used in connection with the Business), together with all related income, royalties, damages and payments due or payable at the Closing or thereafter (including, without limitation, damages and payments for past or future infringements or misappropriations thereof), the right to sue and recover for past infringements or misappropriations thereof, 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;

 

(x) except for rights relating to Excluded Assets, Excluded Liabilities and/or Excluded Claims, all rights under any insurance policies which cover risks associated with the Business or the Acquired Assets other than director and officer insurance policies and any insurance policies maintained pursuant to or in connection with Employee Benefit Plans, (a) to the extent owned by Murray U.S. and assignable under Section 365 of the Bankruptcy Code or otherwise without the consent of the third party or parties to such policies; or, (b) if not so assignable, to the extent consented to by the third party or parties to such policies;

 

(xi) all Vendor Deposits, all promotional allowances, vendor rebates and similar items;

 

(xii) all office supplies, production supplies, spare parts and other miscellaneous supplies wherever located;

 

(xiii) the right to receive and retain mail, Accounts Receivable payments and other communications (other than communications between the Sellers and their outside counsel);

 

(xiv) all advertising, marketing and promotional materials and all other printed or written materials;

 

(xv) the Business Names and all goodwill as a going concern and all other intangible properties;

 

(xvi) all 1-800 telephone numbers used for product warranty purposes; and

 

(xvii) all Tax refunds, rebates, credits and similar items attributable to the Acquired Assets with respect to taxable periods beginning on or after the Closing Date and any portion of such refund, rebate, credit or similar item with respect to a Straddle Period that is attributable to the portion of such Straddle Period beginning after the Closing; and

 

(xviii) the Assumed Real Property, if any.

 

3

“ Administrative Claims ” shall mean any and all claims (other than claims of the Buyers and their Affiliates) which are granted priority or superpriority in the Case by order of the Bankruptcy Court pursuant to Bankruptcy Code Sections 364, 503 and 507. Murray U.S.’s Administrative Claims budget has been delivered to Buyers prior to the date hereof.

 

“ Affiliate ” means, with respect to any Person, (i) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 10% or more of the stock or other interests having ordinary voting power in the election of directors of such Person, (ii) each Person that controls, is controlled by or is under common control with such Person and (iii) each of such Person’s officers, directors, joint venturers, managers and partners. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly on a current or contingent basis, of the power to direct or cause the direction of its management or policies, whether through the ownership or voting securities, by contract or otherwise.

 

“ ANSI ” means American National Standards Institute.

 

“ Assumed Contracts ” means any contract, agreement, real or personal property lease, commitment, understanding or instrument to the extent assigned under Section 365 of the Bankruptcy Code without the consent of the third party or parties to such agreements, to the extent otherwise assignable without the consent of the third party or parties to such agreement, or, if not so assignable, to the extent consented to by the third party or parties to such agreements, and any and all customer deposits, customer advances and credits, security deposits and letters of credit related to any such agreements in any case which:

 

(a) with respect to Murray U.S. is (x) listed on Exhibit A-1 or (y) which is assumed and assigned to Buyers pursuant to Section 2.5 ; and

 

(b) with respect to Murray Canada is listed on Exhibit A-2 (which Exhibit may be amended to make additions at any time prior to the Closing Date).

 

“ Assumed Obligations ” means only the following specific liabilities and obligations of the Sellers:

 

(a) amounts due and to become due on Assumed Contracts after the later of Closing Date or the date on which such Assumed Contracts are assumed by Murray U.S. and assigned to Buyers pursuant to Section 365 of the Bankruptcy Code including the Assignment Cure Amounts;

 

(b) to the extent any contract or lease on Exhibit O is designated an Assumed Contract, amounts payable as set forth on Exhibit O (which Exhibit may be amended only with the prior written consent of the Buyers), with respect to the Permitted Liens;

 

(c) amounts due and to become due to 575636 Ontario Limited operating as Global Distribution and Warehousing (“ Global ”), pursuant to that office storage agreement listed on Exhibit A-2 between Murray Canada Co. and Global for the property

 

4

located at 1195 Courtney Park Drive, Mississauga, Ontario, Canada (the “ Canadian Lease Obligations ”);

 

(d) except to the extent already addressed or agreed to be paid by Briggs U.S. under the Transition Supply Agreement, Briggs U.S. shall pay costs actually incurred by Murray U.S. due to Section 2.5 with respect to its Executory Contracts (other than the Pre-Petition Credit Agreement, the Post-Petition Credit Agreement, any pre-Closing contract or agreement with Tomkins Corporation or any of its Affiliates or relating to any Employee Benefit Plan or Foreign Plan) after the Closing Date and prior to confirmation of Murray U.S.’s bankruptcy plan that would not have been incurred had Briggs U.S. provided its consent to reject such contracts on the Closing Date; and

 

(e) any and all Taxes for which Buyer is liable under Section 7.8 .

 

“ Assumed Real Property ” means that Owned Real Property of Murray U.S. and Murray Canada which is set forth by Buyers on Exhibit F .

 

“ Avoidance Actions ” means any and all actions for relief of Murray U.S. under Chapter 5 of the Bankruptcy Code.

 

“ B&S Payables ” means any account payable, obligation, liability, or amount owed under any contract or agreement (other than this Agreement) to B&S, any Buyer (or any of their Affiliates) by either Seller or any of their Affiliates.

 

“ Bill of Sale ” means each Bill of Sale to be executed and delivered by each Seller at the Closing, substantially in the form of Exhibit B attached hereto.

 

“ Business ” means the activities carried on by the Sellers for their lawn mower, snow blower, chore products, bicycle and recreation products businesses and any other lawn, garden, snow, recreation or chore products businesses operated by the Sellers as of the date of this Agreement.

 

“ Business Day ” means any day other than Saturday, Sunday and (i) any day which is a legal holiday under the laws of the State of New York or a day on which banking institutions in such state are authorized by law or other governmental action to close; or (ii) a statutory holiday under the laws of the Province of Ontario or a day on which banking institutions in such Province are authorized by law or other governmental action to close.

 

“ Business Names ” means, to the extent owned by either Seller, any legal or trade name under which the Business is or has been conducted, including (i) any current or former legal or trade name of either Seller, including “Murray”, “Murray, Inc.”, “Murray Canada Co.” and (ii) any Prior Name of Murray U.S. or Murray Canada.

 

“ Buyer Financing Amount ” means the aggregate unpaid amount of all amounts which have been advanced by the Buyers (or their Affiliates) to the Sellers after the date hereof.

 

“ Buyer Representatives ” means the Buyers’ accountants, employees, counsel, environmental consultants, financial advisors and other authorized representatives.

 

5

“ Canadian Lease Obligations ” has the meaning assigned in the definition of Assumed Obligations.

 

“ Canadian Tax Elections ” means elections filed by Murray Canada and Briggs Canada under the Income Tax Act (Canada), Excise Tax Act (Canada), Corporations Tax Act (Ontario), and such other taxation statutes in Canada or the Province of Ontario in connection with the transfer of the Canadian Acquired Assets.

 

“ Capital Expenditure Adjustment Amount ” shall mean the amount of those capital expenditures actually made or incurred by the Sellers prior to the Closing Date with respect to their fiscal year ending 2006 “green” season (x) which, with respect to such expenditures made prior to the date hereof, the amount of such expenditures have been set forth on Exhibit N hereto (which Exhibit may be amended only with the prior written consent of the Buyers) plus (y) with respect to such expenditures made or incurred after the date hereof, the Sellers have obtained the Buyers prior written consent.

 

“ Cash and Cash Equivalents ” means with respect to any Person any cash and cash equivalents of such Person which are not Vendor Deposits, including to the extent the following are not Vendor Deposits: (i) short-term investments, (ii) uncollected checks issued to such Person and funds in transit to such Person (but only to the extent not otherwise already included in Current Assets), and excluding (i) uncollected checks issued by such Person and funds in transit from such Person.

 

“ CE ” means Certification of Conformance with EU Directives.

 

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended or any other comparable state, foreign or international law.

 

“ Claim ” or “ Claims ” shall have the meaning set forth in Section 101(5) of the Bankruptcy Code, including, without limitation, any right to receive payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, contested, uncontested, legal, equitable, secured, or unsecured; or any right to an equitable remedy for breach of performance if such breach gives rise to a right to receive payment from, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, contested, uncontested, secured, or unsecured.

 

“ COBRA ” means Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA and any similar state law.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

“ Competition Act ” means the Competition Act, R.S., 1985, c. C-34, as amended, and the relevant rules and regulations thereunder.

 

“ Confidential Information ” shall have the meaning specified in the Confidentiality Agreement.

 

6

“ Confidentiality Agreement ” means the Confidentiality Agreement, dated as of July 2, 2001 (as amended on May 12, 2004), among Briggs & Stratton Corporation, D’Long International Strategic Investment Co., Ltd., Belfry Group, LLC, dba D’Long Capital Management, Summersong Investment Inc. and Murray Inc.

 

“ CPSC ” means U.S. Consumer Product Safety Commission.

 

“ Current Assets ” shall mean the Accounts Receivable and Inventory of the Sellers, in each case determined in accordance with GAAP, except that Inventory will be reflected at the gross amount thereof with no reserves and that Accounts Receivable will reflected at the full face value thereof with no reserves for uncollectible accounts or for any setoffs, reserves or deductions taken or threatened to be taken by payees under any Accounts Receivable with respect to the Sellers’ actual or perceived inability to honor any product liability, warranty or similar claim or liability. The Estimated Working Capital Statement and the October 2004 debtor in possession financing budget attached hereto as Exhibit P (the “ October DIP Budget ”) shall be prepared on a consistent basis except for the exceptions set forth on Exhibit T (the “ Consistency Exceptions ”). Current Assets shall be expressed in U.S. Dollars (using an exchange rate of CDN Dollars to U.S. Dollars as published in the Wall Street Journal five (5) Business Days prior to the Closing Date).

 

“ Delinquent Accounts Receivable ” means those Accounts Receivable of the Sellers (x) having an original scheduled maturity date of 90 days or less following the date of invoice and (y) existing as of the date of Closing which, as of the ninetieth (90 ^th ) day following the Closing, have not been collected in full or if, if partially collected, to the extent not fully collected.

 

“ D’Long ” means D’Long International Strategic Investment Co. a company registered under the laws of China.

 

“ Domain Name Assignment Agreement ” means each Domain Name Assignment Agreement substantially in the form of Exhibit J attached hereto, between each applicable Seller and each applicable Buyer dated as of the Closing Date.

 

“ EMC ” means Electromagnetic Field Certification.

 

“ Employee Benefit Plan ” means each “employee benefit plan” as defined in Section 3(3) of ERISA and each other benefit plan, program or arrangement of any kind at any time maintained, sponsored, contributed or required to be contributed to by Murray U.S., any of its Subsidiaries or any ERISA Affiliate or with respect to which Murray U.S., any of its Subsidiaries or any ERISA Affiliate has any Liability, other than a Foreign Plan.

 

“ Encumbrances ” means any mortgages, pledges, liens (statutory or other), charges, hypothecation, security interests, conditional and installment sale agreements, encumbrances and charges of any kind.

 

“ Environmental and Safety Requirements ” means all federal, state, provincial, local and foreign statutes, regulations, ordinances and other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual obligations and all common

 

7

law concerning public health and safety, worker health and safety, and pollution or protection of the environment, including, without limitation, all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, Release, threatened Release, control, or cleanup of any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

 

“ ERISA Affiliate ” means any entity that at any relevant time is treated as a single employer with any of the Sellers or any of their Affiliates pursuant to Section 414 of the Code.

 

“ Excluded Claims ” means the Avoidance Actions and the Recall Claims.

 

“ Excluded Employee Benefits Liabilities ” means any Liability whenever arising or occurring, relating to (x) any Foreign Plan, including any Foreign Plan sponsored, maintained or contributed to or for the benefit of employees or former employees of Murray Canada or its predecessors or with respect to which Murray Canada has any actual or potential Liability or (y) any Employee Benefit Plan.

 

“ Excluded Environmental Liabilities ” means any Liability or investigatory, corrective or remedial obligation, whenever arising or occurring, arising under Environmental and Safety Requirements, as amended or in effect prior to or as of the Closing, with respect to either Seller or any of their predecessor(s), Subsidiaries or Affiliate(s), their respective past or current properties or facilities, the Business or the Acquired Assets (including without limitation any such liability arising from the on-site or off-site Release, threatened Release, treatment, storage, disposal, or arrangement for disposal of Hazardous Substances) whether or not constituting a breach of any representation or warranty herein and whether or not set forth on any disclosure schedule attached hereto.

 

“ Excluded Real Property ” means all Owned Real Property of Murray U.S. or Murray Canada which is not Assumed Real Property, including the Owned Real Property of Murray U.S. located at: (a) 1165 Rochelle Road, McKenzie, TN; (b) 210 American Drive, Jackson, TN; (c) 100 Hannon Drive, Lawrenceburg, TN; (d) 219 Franklin Road, Brentwood, TN; (e) Highway 43, Lawrenceburg, TN; and (f) Grinnell Drive, Lawrenceburg, TN; provided , that , nothing in this Agreement shall designate any personal property or fixtures located on any Owned Real Property as an Excluded Asset.

 

“ Facilities ” means the Leased Real Property and the Owned Real Property.

 

“ Final Order ” means, for purposes of the consents required from any Governmental Entities, an action by any such Governmental Entity that has not been reversed, stayed, enjoined, set aside, annulled or suspended, or where the time period for any further action by such Governmental Entity has expired without further action by such Governmental Entity. Notwithstanding the foregoing, in the case of any consent required of a Governmental Entity, such consent by such Governmental Entity shall be deemed a Final Order even if there is a timely request for stay, appeal, reconsideration, review or rehearing challenging the action by

 

8

such Governmental Entity, unless (x) such challenge has a substantial probability of success on its merits or (y) such challenge, if successful, would have a Material Adverse Effect.

 

“ Financing Order ” means the Final Order (i) Authorizing Murray U.S. to Obtain Post-petition Financing Pursuant to 11 U.S.C. Section 364, (II) Authorizing Murray U.S.’ Use of Cash Collateral Pursuant to Section 363, (III) Granting Adequate Protection Pursuant to 11 U.S.C. Sections 361, 363 and 364, and (IV) Modifying the Automatic Stay Pursuant to 11 U.S.C. Section 362 dated December 6, 2004.

 

“ Fixed Assets ” has the meaning assigned in the definition of Acquired Assets.

 

“ Foreign Plan ” means any compensation or benefit plan, program or arrangement sponsored, maintained or contributed or required to be contributed to by either Seller or with respect to which either Seller has any Liability, in each case for individuals located outside the United States.

 

“ GAAP ” means United States generally accepted accounting principles as in effect from time to time.

 

“ Governmental Entity ” means any Tax Authority and any federal, state, provincial, local or foreign governmental or regulatory authority, department, agency, commission, body or other governmental entity.

 

“ GST Tax ” means, that seven percent (7%) GST tax to the extent required to be collected and remitted by Murray Canada to a Canadian Tax Authority in connection with this transaction in the event an exemption or election from such tax is not available.

 

“ Hazardous Substances ” means (i) any petrochemical or petroleum products, lead based paint, oil, coal tar, or coal ash, radioactive materials, radon gas, asbestos in any form that is or could become friable, urea formaldehyde foam insulation or other equipment that contains dielectric fluid which may contain polychlorinated biphenyls, and (ii) any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “solid wastes,” “hazardous wastes,” “hazardous materials,” “restricted hazardous materials,” “extremely hazardous substances,” “toxic substances,” “contaminants” or “pollutants” under any applicable Environmental and Safety Requirements.

 

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the relevant rules and regulations thereunder.

 

“ Indebtedness ” of any entity means without duplication: (i) all obligations of such entity for borrowed money (including, without limitation, any indebtedness owed to any shareholder) or which has been incurred in connection with the acquisition of property, assets or services, (ii) obligations secured by any Encumbrance upon property or assets owned by such entity, even though such entity has not assumed or become liable for the payment of such obligations, (iii) obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such entity, whether or not the rights and remedies of the lender or lessor under such agreement in the event of default are limited to repossession or sale of the

 

9

property, (iv) capitalized rentals under any capitalized lease, and (v) any obligations of such entity resulting from such entity guaranteeing any other entity’s indebtedness.

 

“ Instrument of Assignment and Assumption ” means each Instrument of Assignment and Assumption to be executed and delivered by the applicable Buyer and the applicable Seller at the Closing, substantially in the form of Exhibit C attached hereto.

 

“ Intellectual Property ” means all of the following in any jurisdiction throughout the world: (i) patents, patent applications and patent disclosures, (ii) trademarks, service marks, trade dress, trade names, corporate names, logos and internet domain names, together with all goodwill associated with each of the foregoing, (iii) copyrights and copyrightable works, (iv) registrations and applications for any of the foregoing, (v) trade secrets, confidential information and inventions and (vi) rights under any license agreements for any of the foregoing.

 

“ Intellectual Property Documents ” means each of the Trademark Assignment Agreements, the Domain Name Assignment Agreements and the Patent Assignment Agreements.

 

“ Inventory ” shall mean the Sellers’ gross inventory.

 

“ Investment Canada Act ” means the Investment Canada Act, R.S., 1985, c. 38 (1st Supp.), as amended, and the relevant rules and regulations thereunder;

 

“ Key Executives ” means each of the following executives: G. Alan Shaw, Brian P. Callahan, David Guilbert, Randy Ballard, Danny Nelms, Fred Selman, Derek Boulton, Gary Watts and Kenneth Shropshire.

 

“ Knowledge ” means, with respect to each Seller, as to a particular matter, the knowledge of the Key Executives, it being understood that such knowledge may be established (i) by producing documentation existing prior to the Closing Date (including in e-mail, computer files and the like) that was sent or received by any of the Key Executives, (ii) by an admission by any of the Key Executives that he had actual knowledge of the matter in question or (iii) by establishing that either Seller or any of their Affiliates received written notice prior to the Closing Date with respect to the matter in question addressed to any of the Key Executives or to one of their respective direct reports.

 

“ Liability ” means any liability, obligation or potential liability or obligation (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 and regardless of when asserted), including, without limitation, any liability for levies, premiums or Taxes or under any Environmental and Safety Requirement.

 

“ Material Adverse Effect ” means any change or changes in, or effect on Murray U.S., Murray Canada, the Business or the Acquired Assets taken as a whole, regardless of whether known by either Buyer at any time, that is individually, or in the aggregate, is or could reasonably be expected to be materially adverse the Business or the Acquired Assets taken as a whole other than (i) any change or effect in any way resulting from or arising in connection with this Agreement or any of the transactions contemplated hereby (including any announcement

 

10

with respect to this Agreement or any of the transactions contemplated hereby and the need, if any, of the Sellers to serve notices on employees required to eliminate or mitigate the Sellers’ liabilities under the WARN Act); or (ii) any change or effect resulting from or arising in connection with Murray U.S.’ current status as a filer under Chapter 11 of the Bankruptcy Code.

 

“ Multiemployer Plan ” has the meaning set forth in Section 3(37) of ERISA.

 

“ Murray Europe ” means Murray Europe Limited, a company registered under the laws of England and Wales with company number 04063818.

 

“ Murray Suzhou Interests ” means those limited partnership interests in the Murray Suzhou Joint Venture representing Murray U.S.’ previously held twenty five percent (25%) ownership interest.

 

“ October DIP Budget ” has the meaning assigned in the definition of Current Assets.

 

“ Murray Suzhou Joint Venture ” means that joint venture between Murray U.S. and Shen Yang Hejin Holding Investment Co. Ltd. created pursuant to that Joint Venture Agreement dated February 24, 2002, in which Murray U.S. previously held a twenty five percent (25%) limited partnership interest.

 

“ Parent ” means Summersong Investment Inc., a company established under the laws of the British Virgin Islands.

 

“ Patent Assignment Agreement ” means each Patent Assignment Agreement substantially in the form of Exhibit K attached hereto, between each applicable Seller and each applicable Buyer dated as of the Closing Date.

 

“ Permitted Liens ” means those certain liens and other security interests identified in Exhibit O attached hereto. Such Exhibit may only be amended with the prior written consent of the Buyers.

 

“ Person ” means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, bank or banking association or any Governmental Entity.

 

“ Real Property ” means all land and all buildings, and all easements, rights of way and servitudes with respect thereto.

 

“ Recall Claims ” means any and all claims, other than any claims under any Assumed Contract or any other Acquired Asset, of the Sellers against third parties which refer, relate or pertain in any way to Murray U.S.’ product recalls in 2002, 2003 and March of 2004.

 

“ Release ” means release, spill, leak, discharge, dispose of, pump, pour, emit, empty, inject, leach, dump or allow to escape into or through the environment.

 

“ Required Consents ” means, collectively, (i) the Sale Order, (ii) the filings by the Sellers and the Buyers required by the HSR Act and the expiration or earlier termination of all waiting

 

11

periods under the HSR Act and (iii) the filings of the Sellers and the Buyers, if any, required under the Investment Canada Act; and (iv) the Third Party Consents.

 

“ Sale Hearing ” means the hearing of the Bankruptcy Court during which the Bankruptcy Court considers the entry of the Sale Order.

 

“ Sale Motion ” means the motion or motions of Murray U.S. seeking approval of the Sale Order, which motion shall be acceptable, in form and substance to the Buyers.

 

“ Sale Order ” means an order which contains all of the provisions set forth in Section 8.1(c) and (a) is otherwise in form reasonably acceptable to the Buyers and the Sellers, and (b) which is not stayed as of the Closing.

 

“ Sale Order Approval Date ” means the date on which the Bankruptcy Court enters the Sale Order.

 

“ SEC ” means the Securities and Exchange Commission.

 

“ Sellers’ Representatives ” means the Sellers’ accountants, employees, counsel, environmental consultants, financial advisors and other authorized representatives.

 

“ Shared Contracts ” means any contract to which the Parent, Murray Europe or any of their Subsidiaries or Affiliates (other than Murray U.S. and Murray Canada) are a party that relate to the Business to which Murray U.S. or Murray Canada is a party.

 

“ Straddle Period ” means any taxable year or period beginning before and ending after the Closing.

 

“ Subsidiary ” means, with respect to any particular Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more subsidiaries of that Person. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing director or general partner of such limited liability company, partnership, association or other business entity.

 

“ Target Administrative Claims ” means Twenty Three Million Dollars ($23,000,000).

 

“ Target Working Capital ” means One Hundred and Seventy Five Million Dollars ($175,000,000).

 

12

“ Tax ” and “ Taxes ” means (i) all taxes, stamp duties, charges, fees, levies, penalties or other assessments of any kind whatsoever imposed by any federal, state, provincial, local or foreign taxing authority, including, but not limited to, income, excise, property, stamp, sales, transfer, franchise, payroll, value added, withholding, social security or other taxes, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, including any interest, penalties or additions attributable thereto or (ii) liability for the payment of any amounts of the type described in clause (i) above as a result of being party to any agreement or any express or implied obligation to indemnify or otherwise succeed to the liability of any other Person or as a result of being a member of a combined, consolidated, affiliated or unitary group with any person.

 

“ Tax Authority ” means any authority or body, in any jurisdiction and whether federal, state, local or foreign or otherwise having the power or authority or other function in relation to Tax.

 

“ Tax Return ” means any return, report, information return notice, registration or other document (including any related or supporting information) required to be supplied to any Governmental Entity with respect to Taxes.

 

“ Trademark Assignment Agreement ” means each Trademark Assignment Agreement substantially in the form of Exhibit I attached hereto, between each applicable Seller and each applicable Buyer dated as of the Closing Date.

 

“ Transaction Documents ” means this Agreement, each Bill of Sale, each Instrument of Assignment and Assumption Agreement, the Transition Supply Agreement, the Bailment Agreement the Escrow Agreement and the Intellectual Property Documents.

 

“ Transferable Certifications and Registrations ” has the meaning assigned in the definition of Acquired Assets.

 

“ Transition Period Contracts ” means those contracts, agreements, real or personal property leases, commitments, understandings or instruments of Murray U.S. which are not listed on Exhibit A-1 and which as of the date of confirmation of Murray U.S.’s bankruptcy plan have not been rejected or assumed and are not being sought to be rejected or assumed pursuant to a motion or notice filed by the Debtor pursuant to this Agreement.

 

“ UL ” means Underwriters Laboratory.

 

“ Vendor Deposits ” means all deposits and pre-payments made by either Seller to vendors as advance payments with respect to services or merchandise to be received.

 

“ WARN Act ” means the Worker Adjustment Retraining and Notification Act of 1988, as amended.

 

“ Working Capital ” shall mean for any date of determination, the Sellers’ Current Assets.

 

13

(b) Each of the following terms has the meaning specified in the Section set forth opposite such term:

 

 

14

 

15

 

Section 1.2 Construction .

 

The headings and captions of the various Articles and Sections of this Agreement have been inserted solely for purposes of convenience, are not part of this Agreement, and shall not be deemed in any manner to modify, explain, expand or restrict any of the provisions of this Agreement. Unless stated to the contrary, all references to Articles, Sections, paragraphs or clauses herein shall be to the specified Article, Section, paragraph, or clause of this Agreement, and all references to Exhibits and Schedules shall be to the specified Exhibits and Schedules attached hereto. All Exhibits and Schedules referred to herein or attached hereto are intended to be and hereby are specifically made a part of this Agreement. All terms defined herein shall have the same meaning in the Exhibits and Schedules, except as otherwise provided therein. All references in this Agreement to “this Agreement” shall be deemed to include the Exhibits and Schedules attached hereto. The terms “hereby,” “hereto,” “hereunder” and any similar terms as used in this Agreement, refer to this Agreement in its entirety and not only to the particular portion of this Agreement where the term is used. The term “including” when used herein without the qualifier, “without limitation,” shall mean “including, without limitation.” Wherever in this Agreement the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context shall require. The word, “or,” shall not be construed to be exclusive. Provisions shall apply, when appropriate, to successive events and transactions.

 

16

Article II

PURCHASE AND SALE

 

Section 2.1 The Sale.

 

(a) Murray U.S. Asset Purchase . Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, at the Closing, Murray U.S. shall sell, assign, convey, transfer and deliver to Briggs U.S. and Briggs U.S. shall purchase and acquire from Murray U.S., free and clear of all Encumbrances, all of Murray U.S.’s right, title and interest of every kind and nature in and to all assets owned or leased (under an Assumed Contract) by Murray U.S. as of the Closing Date (including indirect and other forms of beneficial ownership), be they real or personal, tangible or intangible, fixed or current, wherever located and by whomever possessed, including without limitation, any such right, title or interest in any of the Acquired Assets, but excluding the Excluded Assets (all of the assets to be sold, conveyed, transferred, assigned and delivered to Briggs U.S. hereunder, the “ U.S. Acquired Assets ”).

 

(b) Murray Canada Asset Purchase . Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, at the Closing, Murray Canada shall sell, assign, convey, transfer and deliver to Briggs Canada and Briggs Canada shall purchase and acquire from Murray Canada, free and clear of all Encumbrances, all of Murray Canada’s right, title and interest of every kind and nature in and to all assets owned or leased (under an Assumed Contract) by Murray Canada as of the Closing Date (including indirect and other forms of beneficial ownership), be they real or personal, tangible or intangible, fixed or current, wherever located and by whomever possessed, including without limitation, any such right, title or interest in any of the Acquired Assets, but excluding the Excluded Assets (all of the assets to be sold, conveyed, transferred, assigned and delivered to Briggs Canada hereunder, the “ Canadian Acquired Assets ”).

 

Section 2.2 Excluded Assets.

 

The Sellers shall retain and the Buyers shall not purchase any of the Sellers right, title or interest in the following (the “ Excluded Assets ”):

 

(a) except for any Vendor Deposit, all Cash and Cash Equivalents which are owned by the Sellers on the Closing Date;

 

(b) the corporate charter, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, blank stock certificates, and other documents relating to the organization, maintenance, and existence of the Sellers as a corporation, any books, records or the like of the Sellers;

 

(c) the Excluded Real Property;

 

(d) except for the Buyers’ rights to receive payments made to or for the account of Sellers on the Transition Period Contracts and other amounts specified in Section 7.19(a) (the “ Transition Period Collections ”), the Transition Period Contracts;

 

17

(e) the rights of each Seller under this Agreement;

 

(f) any assets maintained pursuant to or in connection with any Employee Benefit Plan of Murray U.S. or any Foreign Plan sponsored, maintained or contributed to by Murray Canada;

 

(g) copies of all books and records relating to the conduct of the Business prior to the Closing Date, the originals of which will be conveyed to the Buyers, provided that the Buyers shall acquire, and the Sellers shall not retain or obtain copies of customer lists, marketing materials and related information;

 

(h) all confidentiality, noncompete or nondisclosure agreements executed by current or former vendors or suppliers of the Sellers or other third parties, in each case, relating to the Business which are excluded pursuant to clause (v) of the definition of Acquired Assets;

 

(i) except for the Transferable Certifications and Registrations, all Permits and Environmental Permits;

 

(j) all approvals, certifications, registrations or listings for products which are excluded pursuant to clause (vi) of the definition of Acquired Assets;

 

(k) all of the rights or causes of action of any of the Sellers against a third party related to the operation of the Business arising out of transactions occurring prior to the Closing Date which are excluded pursuant to clause (viii) of the definition of Acquired Assets;

 

(l) all rights under any insurance policies which cover risks associated with the Business which are excluded pursuant to clause (x) of the definition of Acquired Assets;

 

(m) the Avoidance Actions;

 

(n) all non-operations related fixtures, office equipment, telephone systems and furniture of the Sellers which are excluded pursuant to clause (iii) of the definition of Acquired Assets;

 

(o) all Tax refunds, rebates, credits and similar items with respect to taxable periods ending on or prior to the Closing Date and any portion of such refund, rebate, credit or similar item with respect to a Straddle Period that is attributable to the portion of such Straddle Period ending at the Closing;

 

(p) the Recall Claims;

 

(q) the Delinquent Accounts Receivable; and

 

(r) any collective bargaining agreement.

 

Section 2.3 Assumed Obligations.

 

(a) Murray U.S. Obligations Assumption . Subject to the conditions set forth in this Agreement, as additional consideration for the U.S. Acquired Assets, at the Closing Briggs U.S.

 

18

shall assume and agree to pay, discharge or perform when due the obligations and liabilities of Murray U.S. which are Assumed Obligations.

 

(b) Murray Canada Obligations Assumption . Subject to the conditions set forth in this Agreement, as additional consideration for the Canadian Acquired Assets, at the Closing Briggs Canada shall assume and agree to pay, discharge or perform when due the obligations and liabilities of Murray Canada which are Assumed Obligations.

 

Section 2.4 Excluded Liabilities.

 

(a) Notwithstanding anything herein to the contrary, the Buyers shall not assume or be obligated to pay, perform or otherwise discharge any Liabilities or obligations of any of the Sellers other than the Assumed Obligations (collectively, the “ Excluded Liabilities ”).

 

(b) In furtherance and not in limitation of the foregoing, except for the Buyers obligation to pay Assignment Cure Amounts as provided in Section 2.5 , the Buyers expressly are not assuming any of the following Liabilities, whether accrued or fixed, absolute or contingent, known or unknown, determined or determinable, and whenever or wherever arising, including, without limitation, the following:

 

(i) all Claims or Liabilities of either Seller that relate to any of the Excluded Assets;

 

(ii) any Liability for any cure obligations, costs and fees (pursuant to section 365 of the Bankruptcy Code or otherwise), relating to any Existing Contracts of Murray U.S. and Murray Canada which is not an Assumed Contract;

 

(iii) except as provided in Section 7.8 , all Claims or Liabilities of either Seller or for which either Seller could be liable relating to Taxes (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;

 

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

 

(v) all Indebtedness of either Seller;

 

(vi) all Liabilities of either Seller related to the issuance of any capital stock or other equity interest of the Sellers, including, without limitation, any stock options or warrants;

 

(vii) except for the Canadian Lease Obligations, all Liabilities of either Seller or any predecessor(s) or Affiliate(s) of either Seller resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of either Seller or ownership or lease of any properties or assets or any properties or assets previously used by either

 

19

Seller or any predecessor(s) or Affiliate(s) of either Seller, or other actions or omissions of either Seller or any predecessor(s) or Affiliate(s) of either Seller, whether known or unknown on the date hereof;

 

(viii) except for the Canadian Lease Obligations, all Liabilities of either Seller resulting from, caused by or arising out of, or which relate to, directly or indirectly, the conduct of either Seller anywhere or ownership or lease of any properties or assets or any properties or assets previously used by either Seller at any time, or other actions, omissions or events occurring prior to the Closing which (i) constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of any law, 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, accounts, costs, expenses, setoffs, contributions, attorneys’ fees and/or causes of action of whatever kind or character (“ Proceeding ”) against either Seller whether past, present, future, known or unknown, liquidated or unliquidated, accrued or unaccrued, pending or threatened;

 

(ix) any Liability arising out of any Proceeding against either Seller after the Closing;

 

(x) subject to Section 7.9(d) with respect to Transferred Employees, all Claims or Liabilities (whether known or unknown) relating to the current or former employees, officers or directors (or their representatives) of either Seller, including, without limitation, Claims or Liabilities related to notice of termination, pay in lieu of such notice, severance pay, termination pay, wrongful dismissal damages, and any Claims or Liabilities related to payroll, vacation, sick leave, worker’s compensation, occupational health and safety, unemployment benefits, pension benefits, grievances, complaints, employee stock option or profit sharing plans, health care plans or other welfare benefits, or any other compensation or benefit plans, programs or arrangements of any kind;

 

(xi) any Liability arising pursuant to the WARN Act or any similar foreign, state or local law, regulation or ordinance relating to the termination of employment;

 

(xii) any Liability arising under or in connection with (x) any Foreign Plan sponsored, maintained or contributed to by Murray Canada or with respect to which Murray Canada has any actual or potential Liability or (y) any Employee Benefit Plan;

 

(xiii) all accounts payable and other accrued expenses arising prior to the Closing;

 

(xiv) any Liability arising out of or relating to services and/or products developed, designed, manufactured, marketed, sold or distributed by or for the benefit of either Seller or any predecessor(s) or Affiliate(s) of either Seller (including any product liability and product warranty Claims and any product certification Claims or liabilities) (“ Excluded Product Liability and Product Warranty Claims ”);

 

20

(xv) except for the Canadian Lease Obligations, any Liability under any Assumed Contract which arises after the Closing Date but which arises out of or relates to any breach that occurred prior to the Closing Date;

 

(xvi) except for the Liabilities due and to become due on Assumed Contracts which are expressly included in the definition of Assumed Obligations, any Liability under any contract, agreement, lease, mortgage, indenture or other instrument of the Sellers;

 

(xvii) any Liability of either Seller to any creditor, shareholder, other equity holder, Subsidiary or Affiliate other than those Liabilities expressly included in the definition of Assumed Obligations;

 

(xviii) any Liability arising out of or relating to any grievance, complaint or Claim by current or former employees, officers or directors of the Sellers;

 

(xix) any Liability to indemnify, reimburse or advance amounts to any officer, director, employee or agent of either Seller;

 

(xx) any Liability to distribute all or any part of the consideration received hereunder to either Seller’s shareholders or creditors, or otherwise apply all or any part of the consideration received hereunder;

 

(xxi) any Liability arising out of or resulting from non-compliance with any law, ordinance, regulation, injunction or treaty by either Seller;

 

(xxii) any Liability of either Seller under the Transaction Documents or any other document executed in connection therewith;

 

(xxiii) any Excluded Employee Benefits Liabilities and Excluded Environmental Liabilities;

 

(xxiv) any Liability of either Seller based upon such Person’s acts or omissions occurring after the Closing;

 

(xxv) any accounts payable, or other Liability, arising from or relating to the Murray Suzhou Joint Venture (the “ Murray Suzhou Liabilities ”); and

 

(xxvi) any Liability based on any act, omission or event occurring prior to the Closing Date not otherwise expressly assumed hereunder.

 

The parties acknowledge and agree that disclosure of any Liability on any Schedule to this Agreement shall not create an Assumed Obligation of any Buyer, except where such disclosed obligation has been expressly listed in the definition of Assumed Obligations.

 

21

Section 2.5 Assumption of Certain Leases and Other Contracts.

 

The Sellers shall assist the Buyers in preparing Exhibit A-1 and Exhibit A-2 , which shall set forth the Assumed Contracts on the date hereof, the date of each such Assumed Contract, the other party or parties to each Assumed Contract and the address of such party or parties (if available). Exhibit A-1 and Exhibit A-2 shall also set forth the approximate amounts necessary to cure defaults, if any, under each such Assumed Contract as determined by the Sellers based on the Sellers’ books and records.

 

(a) Murray U.S. Until confirmation of Murray U.S.’s bankruptcy plan, either Buyer, in its sole discretion, by delivery of written notice to Murray U.S., may compel Murray U.S. to seek to assume and assign to Buyers or reject, pursuant to section 365 of the Bankruptcy Code or otherwise, any contract, agreement, real or personal property lease, commitment, understanding or instrument, other than Assumed Contracts set forth on Exhibit A-1 . In furtherance of the preceding sentence and subject to the Buyers performance of any obligations assumed by Buyers pursuant to clause (d) of the definition of “Assumed Obligations”, Murray U.S. shall not seek to assume and assign to Buyers or seek to reject or seek Bankruptcy Court approval to assume or reject any contract, agreement, real or personal property lease, commitment, understanding or instrument without the prior written consent of the Buyers. Neither Buyer shall acquire any rights or assume any liabilities with respect to any such contract, agreement real or personal property lease, commitment, understanding or instrument that is not assumed by the Sellers and assigned to the Buyers. The Sale Order and any subsequent order (the “ Assumption Order ”) providing for the assumption and assignment to Briggs U.S. as of a certain date (the “ Assumption Date ”) of one or more Assumed Contracts shall provide for the assumption by Murray U.S. and assignment to Briggs U.S., of the Assumed Contracts set forth on Exhibit A-1 or subsequently designated by Briggs U.S., to which Murray U.S. is a party on the following terms and conditions:

 

(i) Pursuant to the Sale Order or the Assumption Order (as applicable), on the Closing Date or the Assumption Date (as applicable), Murray U.S. shall assume and shall assign to Briggs U.S. the Assumed Contracts to which Murray U.S. is a party;

 

(ii) Intentionally Omitted;

 

(iii) Briggs U.S. shall, at or before the Closing Date or the Assumption Date, as appropriate, and in respect of the applicable Assumed Contracts to which Murray U.S. is a party, pay cure amounts to the appropriate parties (or establish reserves as ordered by the Bankruptcy Court) so as to permit assignment by Murray U.S. of the applicable Assumed Contracts pursuant to Section 365 of the Bankruptcy Code (which payments shall be referred to as the “ Assignment Cure Amount ”); and

 

(iv) Briggs U.S. shall be responsible for providing adequate assurance of future performance with respect to the Assumed Contracts to which Murray U.S. is a party and shall be responsible for demonstrating and establishing adequate assurance of future performance before the Bankruptcy Court with respect to the Assumed Contracts to which Murray U.S. is a party.

 

(b) Murray Canada . At the Closing, Murray Canada shall assign to Briggs Canada the Assumed Contracts to which Murray Canada is a party pursuant to a Bill of Sale.

 

22

(c) If requested by Buyers, at any time prior or subsequent to confirmation of the Bankruptcy Plan, Sellers shall execute any additional instruments necessary to effect or record the assignment to either Buyer of any Assumed Contract.

 

Section 2.6 Non-Assignable Contracts.

 

To the extent that the assignment hereunder by either Seller to any Buyer of any Assumed Contract is not permitted or is not permitted without the consent of any other party to such Assumed Contract, this Agreement shall not be deemed to constitute an assignment of any such Assumed Contract if such consent is not given or if such assignment otherwise would constitute a material breach of, or cause a material loss of contractual benefits under such Assumed Contract. Without in any way limiting the Sellers’ relevant representations and warranties or their obligation to obtain all consents and waivers necessary for the sale, transfer, assignment and delivery of the Assumed Contracts to the Buyers hereunder, if any such consent is not obtained or if such assignment is not permitted irrespective of consent and the Closing hereunder is consummated, the Sellers shall cooperate with the Buyers following the date of Closing Date in any reasonable arrangement designed to provide the Buyers with the rights and benefits under any such Assumed Contract, including enforcement for the benefit of the Buyers of any and all rights of either Seller against any other party arising out of any breach or cancellation of any such Assumed Contract by such other party and, if requested by the Buyers, acting as an agent on behalf of the Buyers or as the Buyers shall otherwise reasonably require, at the Buyers’ expense.

 

Article III

PURCHASE PRICE

 

Section 3.1 Purchase Price.

 

(a) The aggregate cash purchase price to be paid by the Buyers for the Acquired Assets pursuant to this Agreement shall be One Hundred and Twenty Five Million Dollars ($125,000,000) (the “ Purchase Price ”) which shall be subject to adjustment as set forth herein.

 

(b) On the Closing Date, the Buyers shall wire transfer to the Sellers the sum of:

 

(i) the Purchase Price, plus or minus

 

(ii) the Initial Working Capital Purchase Price Adjustment (if any) set forth in Section 3.3(c)(i) ; plus

 

(iii) the Capital Expenditure Adjustment Amount, minus

 

(iv) the Escrow Amount, minus

 

(v) the Earnest Money Deposit, minus

 

(vi) the Buyer Financing Amount, minus

 

23

(vii) the amount of any pro-rated taxes to be deducted from the Purchase Price pursuant to Section 7.8(c) .

 

The Purchase Price, as so adjusted pursuant to this Section 3.1(b) is referred to herein as the “ Adjusted Purchase Price .”

 

(c) Prior to the date hereof, the Buyers wire transferred an amount equal to Five Million Dollars ($5,000,000) to the Sellers (the “ Earnest Money Deposit ”). On the date hereof the Sellers shall wire transfer the Earnest Money Deposit to the Escrow Account maintained with the Escrow Agent pursuant to the Escrow Agreement. If the transactions contemplated by this Agreement are consummated, the Buyers and the Sellers shall deliver a joint written notice instructing the Escrow Agent to deliver the Earnest Money Deposit plus accrued interest thereon to the Sellers on the Closing Date.

 

(d) On the Closing Date, the Buyers shall wire transfer an amount equal to Six Million and Nine Hundred Thousand Dollars ($6,900,000) (the “ Escrow Amount ”) to an interest bearing trust account (the “ Escrow Account ”) maintained with U.S. Bank National Association (the “ Escrow Agent ”) pursuant to an escrow agreement substantially in the form attached as Exhibit H (the “ Escrow Agreement ”) among the Buyers, the Sellers and the Escrow Agent.

 

(e) No portion of the Purchase Price shall become property of any of the Sellers or any of their Affiliates or of the estate of Murray U.S. under Section 541 of the Bankruptcy Code unless and until all conditions to Closing have been satisfied or waived prior to Closing and with respect to any amounts in the Escrow Account, until such amount has been released to the Sellers.

 

Section 3.2 Allocation of Purchase Price.

 

Prior to the Closing, the Buyers shall prepare and deliver to the Sellers Exhibit L . The Buyers and the Sellers agree to allocate the Purchase Price, the Assumed Obligations (plus all other capitalizable costs) and any adjustments to such Purchase Price among the Acquired Assets in the manner set forth on the Exhibit L . The Buyers and the Sellers shall prepare and file all Tax Returns and Canadian Tax Elections in a manner consistent with Exhibit L , except as otherwise required by any Tax Authority. The Buyers agree to cooperate in the filing of Canadian Tax Elections as may be necessary or desirable to give effect to the allocations set forth in Exhibit L .

 

Section 3.3 Working Capital Purchase Price Adjustment.

 

(a) Estimated and Closing Date Working Capital Statements .

 

(i) Not less than five (5) Business Days prior to the Closing Date, the Sellers with the cooperation of the Buyers, will prepare and deliver to the Buyers a statement (the “ Estimated Working Capital Statement ”) showing the Sellers good faith calculation of Working Capital as of the close of business on the Closing Date (“ Estimated Working Capital ”). For purposes of the Working Capital Purchase Price Adjustments (as defined below), such Estimated Working Capital Statement shall be determined as of the close of business on the Closing Date and shall be determined in accordance with GAAP applied

 

24

on a basis consistent with the October 2004 DIP Budget except for the Consistency Exceptions.

 

(ii) As promptly as practicable, but no later than ninety (90) days after the Closing Date, the Buyers will prepare and deliver to the Sellers a calculation of Working Capital as of the close of business on the Closing Date (the “ Closing Date Working Capital Statement ”). For purposes of the Final Working Capital Purchase Price Adjustment (as defined below), such Closing Date Working Capital Statement shall be determined as of the close of business on the Closing Date and shall be determined in accordance with GAAP applied on a basis consistent with the October DIP Budget except for the Consistency Exceptions.

 

(iii) For purposes of preparing the Closing Date Working Capital Statement, the Buyers and the Sellers shall jointly take a physical count of all Inventory included in the Acquired Assets as of the Closing, conducted in accordance with the Sellers’ past practices and procedures.

 

(b) Independent Accounting Firm, Determination of Final Working Capital .

 

(i) Within fifteen (15) days after receipt of the Closing Date Working Capital Statement, the Sellers may deliver to the Buyers, a written statement describing their questions or objections (if any) to the Closing Date Working Capital Statement. If the Sellers do not raise any questions or objections within such period, the Buyers’ calculation of the Working Capital as of the Closing Date as set forth in the Closing Date Working Capital Statement will become final and binding upon all of the parties. If the Sellers do raise any such questions or objections, the Buyers and the Sellers and their respective accountants, counsel and advisors shall attempt to resolve such matters within 45 days after receipt of the same by the Sellers, and if unable to do so, the Buyers and the Sellers shall refer all remaining disputes concerning the Closing Date Working Capital Statement to the Milwaukee, Wisconsin office of a nationally recognized independent accounting firm reasonably acceptable to the Buyers and the Sellers (the “ Independent Accounting Firm ”) which shall be instructed to resolve such disputes within thirty (30) days of the referral, acting as an expert and not as an arbitrator. The Buyers and the Sellers will make available to the Independent Accounting Firm the work papers and back-up materials used in preparing the Closing Date Working Capital Statement and the books and records of the Sellers. The Buyers and the Sellers shall have the right to meet jointly with the Independent Accounting Firm during this period and to present their respective positions. The resolution of disputes by the Independent Accounting Firm and its determination of the Working Capital as of the Closing Date for the Final Working Capital Purchase Price Adjustment will be set forth in writing and will be conclusive and binding upon the parties. The determination of the Working Capital as of the Closing Date for the Final Working Capital Purchase Price Adjustment by the Independent Accounting Firm will become final and binding upon the date of such resolution.

 

(ii) Each party will make available to the other and their accountants and other representatives the work papers and back-up materials used in preparing the Estimated Working Capital Statement and the Closing Date Working Capital Statement (and copies

 

25

thereof at Sellers’ sole cost and expense), at any time during (A) the review by the Sellers of the Closing Date Working Capital Statement under Section 3.3(b)(i) above and (B) the pendency of any dispute under Section 3.3(b)(i) above.

 

(iii) For purposes of this Agreement, “ Final Working Capital ” means Working Capital as of the Closing Date (i) as shown in the Buyers’ calculation in the Closing Date Working Capital Statement delivered pursuant to Section 3.3(a)(ii) above if no notice of disagreement with respect thereto is duly delivered pursuant to Section 3.3(b)(i) above; or (ii) if such a notice of disagreement is delivered, (A) as agreed by the Buyers and the Sellers pursuant to Section 3.3(b)(i) above or (B) in the absence of such agreement, as shown in the Independent Accounting Firm’s calculation delivered pursuant to Section 3.3(b)(i) above.

 

(iv) The Sellers and the Buyers will each pay their own fees and expenses (including without limitation any fees and expenses of their accountants, counsel and other representatives) in connection with the determination of the Working Capital Purchase Price Adjustments. Notwithstanding the foregoing, (i) if Working Capital as of the Closing Date as finally determined by the Independent Accounting Firm is equal to or greater than the Working Capital as of the Closing Date as set forth in the Closing Date Working Capital Statement delivered by the Buyers pursuant to Section 3.3(a)(ii) above, then the Buyers will pay the fees and expenses of the Independent Accounting Firm incurred in connection with the resolution of any disputes arising under this Section 3.3 , and (ii) if Working Capital as of the Closing Date as finally determined by the Independent Accounting Firm is less than the Working Capital as of the Closing Date as set forth in the Closing Date Working Capital Statement delivered by the Buyers pursuant to Section 3.3(a)(ii) above, then the Sellers will pay the fees and expenses of the Independent Accounting Firm incurred in connection with the resolution of any disputes arising under this Section 3.3 .

 

(c) Initial and Final Working Capital Purchase Price Adjustments .

 

(i) Any adjustment to the Purchase Price pursuant to this Section 3.3(c)(i) is referred to herein as the “ Initial Working Capital Purchase Price Adjustment .”

 

(A) If Estimated Working Capital exceeds Target Working Capital, then at the Closing Date, the Buyers shall pay to Sellers an additional amount of cash equal to such excess.

 

(B) If Estimated Working Capital is less than Target Working Capital, then the amount of cash to be paid by the Buyers on the Closing Date will be reduced by an amount equal to such deficiency.

 

(ii) Any adjustment to the Purchase Price pursuant to this Section 3.3(c)(ii) is referred to herein as the “ Final Working Capital Purchase Price Adjustment ” (and collectively with the Initial Working Capital Purchase Price Adjustment, the “ Working Capital Purchase Price Adjustments ”). The Final Working Capital minus the outstanding

 

26

balance of the Delinquent Accounts Receivable on the ninetieth (90 ^th ) day after the Closing Date is referred to herein as the “ Final Amount ”.

 

(A) If the Final Amount equals Estimated Working Capital, then within three (3) Business Days of the later of the Closing Date or the final determination of such amount pursuant to this Section 3.3 the Buyers and the Sellers shall deliver a joint written notice to the Escrow Agent instructing the Escrow Agent to pay the amount remaining on deposit in the Escrow Account plus the accrued interest on such amount (by wire transfer of immediately available funds) to the Sellers.

 

(B) If the Final Amount exceeds Estimated Working Capital, then within three (3) Business Days of the later of the Closing Date or the final determination of such amount pursuant to this Section 3.3 , (x) the Buyers shall pay the amount of such excess (by wire transfer of immedia