ASSET PURCHASE AGREEMENT
by and among
Amana Appliance Company, L.P.
Goodman Global Holdings, Inc.
Maytag Corporation
and
Maytag Worldwide N.V.
dated as of
June 4, 2001
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS................................................... 1
ARTICLE II PURCHASE AND SALE OF ASSETS................................... 13
Section 2.1 Purchase and Sale........................................... 13
Section 2.3 Excluded Assets............................................. 15
Section 2.3 Assumed Liabilities......................................... 16
Section 2.4 Excluded Liabilities........................................ 17
Section 2.5 Purchase Price.............................................. 18
Section 2.6 Determination of Change in Adjusted Working Capital......... 19
Section 2.7 Payment of Adjusted Purchase Price.......................... 20
Section 2.8 Allocation of Purchase Price................................ 20
Section 2.9 Certain Costs, Fees and Expenses............................ 21
Section 2.1 Conveyances of Real Property................................ 21
Section 2.1 Disclaimer of Warranties.................................... 21
Section 2.1 Receipts After Closing...................................... 22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND GLOBAL........... 22
Section 3.1 Organization, Authority and Good Standing................... 22
Section 3.2 Absence of Conflicts and Consent Requirements............... 24
Section 3.3 Environmental Matters....................................... 24
Section 3.4 Ownership of Assets......................................... 26
Section 3.5 Litigation.................................................. 27
Section 3.6 Permits and Compliance With Law............................. 27
Section 3.7 Intellectual Property Rights................................ 28
Section 3.8 Computer Hardware and Software.............................. 29
Section 3.9. Receivables; Inventories.................................... 29
Section 3.10 Material Contracts.......................................... 30
Section 3.11 Labor and Employment Matters; ERISA......................... 31
Section 3.12 Brokers, Finders, etc....................................... 35
Section 3.13 Taxes....................................................... 35
Section 3.14 No Preemptive Rights........................................ 36
Section 3.15 Transactions With Affiliates................................ 36
Section 3.16 Financial Statements and Information........................ 36
Section 3.17 Absence of Changes.......................................... 37
Section 3.18 No Undisclosed Liabilities.................................. 38
Section 3.19 Utilities................................................... 38
Section 3.20 Government Contracts........................................ 39
Section 3.21 Insurance................................................... 39
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Section 3.22 Customers and Suppliers...................................... 33
Section 3.23 Warranties................................................... 40
Section 3.24 Product Defects.............................................. 40
Section 3.25 Bifurcation.................................................. 40
Section 3.26 Investment Representations................................... 41
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER........................ 41
Section 4.1. Organization and Authority................................... 41
Section 4.2. Absence of Conflicts and Consent Requirements................ 42
Section 4.3. Litigation Affecting Buyer or Maytag Worldwide............... 42
Section 4.4. Fees......................................................... 42
Section 4.5. Available Funds.............................................. 43
Section 4.6. Valid Shares................................................. 43
Section 4.7. Securities and Exchange Commission Filings................... 43
Section 4.8. No Material Adverse Change................................... 43
ARTICLE V COVENANTS OF SELLER AND BUYER.................................. 44
Section 5.1 Investigation of Business; Access to Properties and Records.. 44
Section 5.2 Reasonable Efforts........................................... 45
Section 5.3 Further Assurances........................................... 46
Section 5.4 Conduct of Business.......................................... 46
Section 5.5 Preservation of Business..................................... 48
Section 5.6 Public Announcements......................................... 48
Section 5.7 No Implied Representation.................................... 48
Section 5.8 Construction of Certain Provisions........................... 49
Section 5.9 Inventory.................................................... 49
Section 5.10 Bulk Transfer Compliance..................................... 49
Section 5.11 Assignment of Contracts...................................... 49
Section 5.12 Post-Closing Cooperation..................................... 50
Section 5.13 Employees.................................................... 50
Section 5.14 Right to Update.............................................. 58
Section 5.15 Tax Matters.................................................. 58
Section 5.16 Agreement Not to Compete..................................... 61
Section 5.17 Commitments for Title Insurance.............................. 61
Section 5.18 Change in Entity Names....................................... 62
Section 5.19 Collection of Receivables.................................... 62
Section 5.20 Registration of the Maytag Shares............................ 63
Section 5.21 Resales by Shareholders...................................... 64
ARTICLE VI CLOSING........................................................ 65
Section 6.1 Time and Place of Closing.................................... 65
Section 6.2 Conditions to Buyer's and Maytag Worldwide's Obligations..... 65
Section 6.3 Conditions to Seller's Obligations........................... 68
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ARTICLE VII SURVIVAL; INDEMNIFICATION...................................... 70
Section 7.1 Survival..................................................... 70
Section 7.2 Indemnification.............................................. 70
Section 7.3 Environmental Indemnification................................ 74
Section 7.4 Arbitration.................................................. 76
Section 7.5 Exclusive Remedy............................................. 76
Section 7.6 Adjustment to Purchase Price................................. 77
ARTICLE VIII TERMINATION.................................................... 77
Section 8.1 Termination.................................................. 77
Section 8.2 Procedure and Effect of Termination.......................... 78
Section 8.3 Wrongful Termination......................................... 78
ARTICLE IX MISCELLANEOUS.................................................. 78
Section 9.1 Counterparts................................................. 78
Section 9.2 Governing Law................................................ 78
Section 9.3 No Third Party Beneficiaries................................. 78
Section 9.4 Entire Agreement............................................. 79
Section 9.5 Expenses..................................................... 79
Section 9.6 Notices...................................................... 79
Section 9.7 Successors and Assigns....................................... 80
Section 9.8 Headings; Interpretation..................................... 81
Section 9.9 Amendments and Waivers....................................... 81
Section 9.10 Specific Performance......................................... 81
Section 9.11 Severability of Provisions................................... 81
Section 9.12 Consent to Jurisdiction...................................... 82
Section 9.13 Joint Preparation............................................ 82
Section 9.14 Time......................................................... 82
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Exhibit Description
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A Trademark License Agreement
B Indemnification
Schedule Description
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6.2(f) Required Consents
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT ("Agreement") dated as of the 4th day of
---------
June, 2001, is made and entered into by and among: (a) Amana Appliance Company,
L.P., a Texas limited partnership ("Seller"), of which Amana Holding Company, a
------
Texas corporation ("Holding"), is the sole general partner; (b) Goodman Global
-------
Holdings, Inc., a Texas corporation ("Global"); (c) Maytag Corporation, a
------
Delaware corporation ("Buyer"), and (d) Maytag Worldwide N.V., a Netherlands
-----
Antilles corporation and an indirect wholly-owned subsidiary of Buyer ("Maytag
------
Worldwide").
---------
WHEREAS, Seller (i) manufactures, markets, sells, distributes and services
a full range of refrigerators, freezers, washers, dryers, freestanding, built-in
and cooktop cooking equipment, dishwashers and microwave ovens for commercial
and consumer use (the "Appliance Business") and (ii) markets, sells and
------------------
distributes, through the same channels as the Appliance Business, and services
certain room air conditioners and dehumidifiers (the "Transferred Room A/C
--------------------
Business") (the Appliance Business and the Transferred Room A/C Business being
--------
collectively referred to as the "Business"); and
--------
WHEREAS, Seller, Holding, Amana Company, L.P., a Delaware limited
partnership and the former owner of the Business ("Former Owner"), and others
------------
recently consummated the transactions contemplated by a Restated Bifurcation
Agreement dated as of March 16, 2001, as amended ("Bifurcation Agreement"),
---------------------
pursuant to which the Business was transferred by the Former Owner to Seller and
the limited partnership interests in Seller and the shares in Holding were
distributed in a series of transactions to persons who currently own equity
interests in Global; and
WHEREAS, Seller, Global, Buyer and Maytag Worldwide desire to enter into
this Agreement pursuant to which Seller is agreeing to sell to Buyer and Maytag
Worldwide, and Buyer and Maytag Worldwide are agreeing to purchase from Seller,
substantially all of the assets and properties of Seller, and Buyer is agreeing
to assume certain obligations and liabilities of Seller applicable to the
Business; and
WHEREAS, the Board of Directors of Global has concluded that the execution
and delivery of this Agreement by Global and its commitment to become jointly
and severally liable for Seller's obligations hereunder may reasonably be
expected to benefit, directly or indirectly, Global and its shareholders;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
meanings:
"ABO" has the meaning set forth in Section 5.13(c)(ii)(B).
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<PAGE>
"Access Period" means the longer of: (a) a period of three (3) years from
-------------
and after the Closing Date; or (b) the period of time, commencing on the Closing
Date and ending on the date on which Taxes may no longer be assessed against
Seller or Former Owner with respect to the operations of the Business under
applicable statutes of limitation, including the period covered by any waivers
or extensions thereof.
"Accounts Payable" means all of Seller's accounts payable (excluding
----------------
accounts payable to Former Owner and its Affiliates), accrued expenses and other
current liabilities (including prepaid sales and accrued freight) with respect
to the Business as of the Closing Date.
"Adjourned Date" has the meaning set forth in Section 5.17.
-------------- ------------
"Adjusted Working Capital" means the excess of the current assets over the
------------------------
current liabilities reflected on the December 31 Pro Forma Balance Sheet or the
Closing Date Pro Forma Balance Sheet, as the case may be.
"Affiliate" means, with respect to any person: (a) any person directly or
---------
indirectly owning all of the outstanding voting securities or other voting
interests or general partnership interests of such other person; (b) any person
all of whose outstanding voting securities or other voting interests or general
partnership interests are directly or indirectly owned by such other person; and
(c) any person all of whose outstanding voting securities or other voting
interests are directly or indirectly owned by a person referred to in clause (a)
above. By way of illustration, Seller's Affiliates include Holding and AFSI;
Global's Affiliates include Former Owner and all of Global's direct and indirect
wholly-owned Subsidiaries.
"AFSI" means Amana Financial Services, Inc., a Delaware corporation.
----
"Agreement" has the meaning set forth in the introductory paragraph.
---------
"Agreed Adjustments" has the meaning set forth in Section 2.6(d).
------------------ --------------
"Allocation Schedule" has the meaning set forth in Section 2.8.
------------------- -----------
"Amana Finance" means the Illinois general partnership in which AFSI and
-------------
Transamerica Joint Venture, Inc. each owns a 50% interest.
"Amana Finance Partnership Documents" means (i) the Joint Venture
-----------------------------------
Agreement dated as of April 26, 1995 between Amana Refrigeration, Inc. and
Transamerica Commercial Finance Corporation, as amended by Agreement dated as of
July 1, 1998 between Amana Company, L.P. and Transamerica Commercial Finance
Corporation, and (ii) the Partnership Agreement dated as of April 26, 1995
between AFSI and Transamerica Joint Ventures, Inc.
"Amana 401K Plan" has the meaning set forth in Section 5.13(d).
--------------- ---------------
Amana Finance 4/30 Balance Sheet" has the meaning set forth in Section
-------------------------------- -------
3.16(c).
-------
"Antitrust Division" means the Antitrust Division of the United States
------------------
Department of Justice.
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"Appliance Business" has the meaning set forth in the first recital to this
------------------
Agreement.
"Assumed Liabilities" has the meaning set forth in Section 2.3.
------------------- -----------
"AsureCare" means AsureCare Corp., a Florida corporation and indirect
---------
wholly owned subsidiary of Global.
"AsureCare Agreement" means an agreement between Buyer and AsureCare
-------------------
relating to the servicing by Buyer after the Closing of certain warranties
written by AsureCare, such agreement to be in form and substance reasonably
acceptable to Buyer and Global.
"Bankruptcy Exceptions" means the extent to which enforcement of an
---------------------
agreement, instrument or other document (a) may be limited by bankruptcy,
insolvency (including all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally; and (b) is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
"Bargaining Unit Employees" has the meaning set forth in Section
------------------------- -------
5.13(a)(i).
----------
"Bifurcation" has the meaning set forth in Section 3.25.
----------- ------------
"Bifurcation Agreement" has the meaning set forth in the second recital to
---------------------
this Agreement.
"Black-out Period" has the meaning set forth in Section 5.21(b).
---------------- ---------------
"Bulk Sales Laws" has the meaning set forth in Section 5.10.
--------------- ------------
"Business" has the meaning set forth in the first recital to this
--------
Agreement.
"Business Agreements" has the meaning set forth in Section 3.10(c).
------------------- ---------------
"business day" means each day other than a Saturday, Sunday or other day in
------------
the City of Wilmington, Delaware on which national banks are authorized by law
or regulation not to open for business.
"Buyer" has the meaning set forth in the introductory paragraph of this
-----
Agreement.
"Buyer Indemnifiable Losses" means, as of any date, the sum of (i)
--------------------------
Indemnifiable Damages incurred by Buyer Indemnified Parties prior to such date
for which they would be entitled to indemnification under Section 7.2(a)(ii)(A)
---------------------
but for Section 7.2(f)(i) plus (ii) the Uncollected Receivables Amount that
----------------- ----
would have been payable but for the first proviso of Section 5.19(c).
---------------
"Buyer Indemnified Parties" has the meaning set forth in Section 7.2(a).
------------------------- --------------
"Buyer SEC Filings" has the meaning set forth in Section 4.7.
----------------- -----------
"Buyer Welfare Plans" has the meaning set forth in Section 5.13(b)(iii).
------------------- --------------------
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"Buyer's Actuary" has the meaning set forth in Section 5.13(c)(ii)(B).
--------------- ----------------------
"Buyer's FSA" has the meaning set forth in Section 5.13(e).
----------- ---------------
"Buyer's Savings Plan" has the meaning set forth in Section 5.13(d).
-------------------- ---------------
"CERCLA" has the meaning set forth in the definition of "Environmental
------
Law."
"Change in Adjusted Working Capital" means the positive or negative
----------------------------------
difference, if any, between the Adjusted Working Capital reflected on the
December 31 Pro Forma Balance Sheet and the Adjusted Working Capital reflected
on the Closing Date Pro Forma Balance Sheet, but in no event shall the December
31 Pro Forma Balance Sheet, the Closing Date Pro Forma Balance Sheet, or the
Statement of Change in Adjusted Working Capital include any provision for any
Taxes, except that the Closing Date Pro Forma Balance Sheet shall include
accrued liabilities with respect to employment taxes and real and personal
property taxes, in each case to the extent set forth in Section 5.15.
------------
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1985.
-----
"Claim Notice" has the meaning set forth in Section 7.2(c).
------------ --------------
"Claim of Environmental Liability" means any and all claims, liabilities,
--------------------------------
obligations, judgments, penalties, expenses, losses or damages (including
natural resource damages) relating to the Purchased Assets or the Business,
resulting from: (a) any suit, action, administrative proceeding, notice,
investigation or demand asserted or threatened by any third-party (including any
governmental agency or authority) arising under any Environmental Law; (b)
requirements imposed by any Environmental Law, including costs of remediation or
costs incurred in obtaining applicable permits or complying with any
Environmental Law; or (c) the presence or release into the environment of any
Hazardous Substances, in each case where the resulting loss, claim or demand
arises from or relates to conditions existing or events occurring on or prior to
the Closing Date.
"Closing" has the meaning set forth in Section 6.1.
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"Closing Date" means the date and effective time at which the Closing
------------
occurs.
"Closing Date Pro Forma Balance Sheet" means the pro forma consolidated
------------------------------------
balance sheet of Seller reflecting the Purchased Assets and the Assumed
Liabilities as of the Closing Date, which shall be prepared in accordance with
GAAP consistently applied, except as provided in the footnotes to the December
31 Pro Forma Balance Sheet and in the definition of Change in Adjusted Working
Capital.
"Closing Date Receivables" has the meaning set forth in Section 5.19(a).
------------------------ ---------------
"Code" means the Internal Revenue Code of 1986.
----
"Collection Report" has the meaning set forth in Section 5.19(b).
----------------- ---------------
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"Collective Bargaining Agreements" means the collective bargaining
--------------------------------
agreements relating to the Business to which Seller is a party and which are
listed in Section 3.11(a) of the Disclosure Schedule.
---------------
"Confidentiality Agreements" means the Confidentiality Agreement dated
--------------------------
December 18, 2000, by and between Former Owner and Buyer and the Confidentiality
Agreement dated May 31, 2001 by and among Buyer, Seller and Global.
"Contracts" means all contracts, agreements, commitments, and leases of
---------
personal property (including computer equipment and programs) with customers,
suppliers, vendors, lessors, lessees, utilities, providers or others entered
into by Seller, Seller's Affiliates or Former Owner primarily for or on behalf
of the Business, including those Contracts listed in the Disclosure Schedule.
"Credit Agreement" means the Second Amended and Restated Credit Agreement
----------------
dated as of March 26, 2001 among Global and certain of its Affiliates, the
Lenders and the other parties thereto.
"December 31 Pro Forma Balance Sheet" means the pro forma consolidated
-----------------------------------
balance sheet of Seller reflecting the Purchased Assets and the Assumed
Liabilities as of December 31, 2000, in the form included in Section 3.16 of the
------------
Disclosure Schedule and prepared in accordance with GAAP, except as provided in
the footnotes thereto.
"Disclosed Claim of Environmental Liability" means any Claim of
------------------------------------------
Environmental Liability set forth in Section 3.3 of the Disclosure Schedule.
-----------
"Disclosure Schedule" means the Disclosure Schedule, dated as of the date
-------------------
of this Agreement, delivered to Buyer by Seller, as amended and updated pursuant
to Section 5.14.
------------
"Employees" has the meaning set forth in Section 5.13(a)(i).
--------- ------------------
"Encumbrances" means any mortgages, liens, security interests, claims,
------------
pledges, assignments, charges, options, rights of tenants or others, rights of
first refusal or other title retention agreements, easements, defects in title,
covenants, conditions or other restrictions of any nature whatsoever.
"Environmental Claims Period" means the period commencing on the Closing
---------------------------
Date and ending on the day immediately preceding the eighth (8/th/) anniversary
of the Closing Date.
"Environmental Exposure Claim" shall mean any third party lawsuits, claims
----------------------------
or demands alleging bodily injury, adverse health effects or death, or seeking
medical monitoring, arising out of or related to an exposure to any Release of
Hazardous Substance on or emanating from the Purchased Assets or related to the
operations of the Business, in each case where the resulting loss, demand or
claim arises from or relates to conditions existing or events occurring on or
prior to the Closing Date.
"Environmental Law" means any federal, state, or local law (including
-----------------
common law), rule, regulation, order, ordinance, writ, judgment, injunction,
decree, or determination applicable
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<PAGE>
to the Business as in effect on the Closing Date to the extent relating to the
protection of the environment, the release or threatened release of any
Hazardous Substances into the environment, the generation, management,
transportation, storage, treatment and disposal of Hazardous Substances, or the
pollution of air, soil, groundwater or surface water (including the Clean Air
Act, the Toxic Substance Control Act, the Clean Water Act, the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), and the
------
Resource Conservation and Recovery Act ("RCRA"), or their state counterparts or
----
analogues, but excluding the Occupational Safety and Health Act).
"Environmental Matters" means (a) any obligation or liability arising under
---------------------
any Environmental Law; (b) any Claim of Environmental Liability; or (c) any
Environmental Exposure Claim.
"Equipment" means all of the machinery, equipment, vehicles, including
---------
tractors, trailers and other transportation equipment, office furniture and
office equipment located on or in transit to, the Real Property and the Leased
Property that are used or held for use primarily in connection with the
Business.
"ERISA" means the Employee Retirement Income Security Act of 1974.
-----
"Estimated Change in Adjusted Working Capital" has the meaning set forth in
--------------------------------------------
Section 2.5(b)(i)(B).
--------------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
"Excluded Assets" has the meaning set forth in Section 2.2.
--------------- -----------
"Excluded Liabilities" has the meaning set forth in Section 2.4.
-------------------- -----------
"Extraordinary Distributive Item" has the meaning set forth in Section
-------------------------------
5.15(e).
"FTC" means the United States Federal Trade Commission.
---
"Financial Statements" has the meaning set forth in Section 3.16(b).
-------------------- ---------------
"Fixtures and Improvements" means the buildings, structures, fixtures and
-------------------------
other fixed assets and personalty of a permanent nature annexed, affixed or
attached to the Real Property or the Leased Property.
"Former Employees" has the meaning set forth in Section 5.13(a)(i).
---------------- ------------------
"Former Owner" has the meaning set forth in the second recital to this
------------
Agreement.
"General Basket Amount" means an amount equal to Two Million Dollars
---------------------
($2,000,000.00).
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"Generally Accepted Accounting Principles" or "GAAP" means generally
---------------------------------------- ----
accepted accounting principles in the United States (as such term is used in the
American Institute of Certified Public Accountants Professional Standards).
"Global" has the meaning set forth in the introductory paragraph of this
------
Agreement.
"Goodman 401K Plan" has the meaning set forth in Section 5.13(d).
----------------- ---------------
"Government Contract" has the meaning set forth in Section 3.20.
------------------- ------------
"Hazardous Substances" means any hazardous or toxic materials, substances
--------------------
or wastes, including any petroleum or petroleum product or derivative thereof
and any pollutants or contaminants, as defined in or regulated as such pursuant
to any Environmental Law.
"Holding" has the meaning set forth in the introductory paragraph of this
-------
Agreement.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
-------
"HVAC Business" means the manufacture or distribution of heating,
-------------
ventilating and air conditioning equipment and related products of every type
and description, including room air conditioning units, other than the
Transferred Room A/C Business.
"Inactive Employee" has the meaning set forth in Section 5.13(a)(i).
----------------- ------------------
"Indemnifiable Damages" means any and all liabilities, losses, claims,
---------------------
judgments, damages, fines, penalties, environmental response costs, natural
resource damages, expenses and costs (including reasonable counsel fees and
costs and expenses incurred in connection therewith), together with interest
thereon from the date such damages are incurred at an interest rate equal to the
prime rate in effect on the Closing Date as reported in The Wall Street Journal
-----------------------
and as revised on each anniversary of the Closing Date by reference to the prime
rate reported in The Wall Street Journal for such anniversary date or, if the
-----------------------
anniversary date falls on a Saturday, Sunday or other day on which The Wall
--------
Street Journal is not published, the next day on which The Wall Street Journal
-------------- -----------------------
is published.
"Indemnitor" has the meaning set forth in Section 7.2(c).
---------- --------------
"Intellectual Property" means all: (a) patents, patent applications,
---------------------
continuations, continuations-in-part, divisions, reissues, patent disclosures,
inventions (whether patentable or unpatentable and whether or not reduced to
practice) and improvements thereto; (b) trademarks, service marks, trade dress,
logos, trade names, and corporate names, and any other source-identifying
designations or devices, including Internet domain names and registrations
thereof, along with the good will associated with the foregoing and
registrations and applications for registration thereof ("Trademarks"); (c)
----------
copyrights and registrations and applications for registration thereof; (d) mask
works and registrations and applications for registration thereof; (e) computer
software, data and documentation; (f) trade secrets and confidential business
information (including ideas, formulas, and compositions, know-how,
manufacturing and production processes and techniques, research and development
information, software products in development, drawings, specifications,
designs, plans, proposals, technical data, financial
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<PAGE>
(excluding employee benefit plans), marketing, and business data, pricing and
cost information, business and marketing plans, and customer and supplier lists
and information) and other proprietary information; and (g) copies and tangible
embodiments thereof (in whatever form or medium).
"Interim Services Agreement" means an agreement between Buyer and Global
--------------------------
relating (i) to interim computer and administrative services to be provided
after the Closing by Buyer to Global and its Affiliates for a fixed price of
$250,000 per month and a period ending no later than December 31, 2001 and (ii)
if necessary, the sharing by Buyer of space at certain Leased Properties with
Global and its Affiliates for a term and consideration to be agreed upon by
Buyer and Global, such agreement to be otherwise in form and substance
reasonably acceptable to Buyer and Global.
"Inventory" means all of the inventory of raw materials, work-in-process,
---------
finished goods, parts, scrap, wrapping, operating supplies and packaging items
and finished goods used or to be used primarily in the Business (including any
in-transit or mill direct inventory, except for: (a) such finished goods as have
been purchased by customers of Seller and are being held, stored or retained for
such customers; and (b) all supplies and raw materials owned by third parties
and stored at any parcel of Real Property or Leased Property).
"Knowledge" as used in the phrases "to the knowledge of Seller," "to the
---------
best knowledge of Seller" or "to Seller's knowledge" or similar references to
the knowledge of Seller means the actual knowledge of those persons set forth in
Section 1 of the Disclosure Schedule.
---------
"Leased Property" means the parcels of real property leased by Seller (as
---------------
tenant) pursuant to the Leases, together with: (a) all of Seller's right, title
and interest in and to the Fixtures and Improvements and any other tenant
improvements located on such real property, if any; and (b) all of Seller's
right, title and interest in and to all easements, rights, and privileges
appurtenant thereto, if any.
"Leases" means all leases and subleases of real property listed in Section
------ -------
3.4(b) of the Disclosure Schedule, including all of Seller's rights and options
------
under such leases and subleases.
"Lenders" means the lending institutions that are parties to the Credit
-------
Agreement.
"Material Adverse Effect" means any condition, circumstance, change or
-----------------------
effect that is or is reasonably likely to be materially adverse to the Purchased
Assets, the Business or the results of operations, profits, prospects or
condition (financial or otherwise) of Seller, with respect to the Business,
considered as a whole, but excluding the effect of any factors affecting the
major appliance manufacturing and distributing businesses generally.
"Maytag Common Stock" means Common Stock, $1.25 par value, of Buyer.
-------------------
"Maytag Shares" has the meaning set forth in Section 2.5(a).
------------- --------------
"Maytag Stock Valuation" means the product of (i) 500,000 times (ii) $33.00
---------------------- -----
(being the closing price per share of Maytag Common Stock on the New York Stock
Exchange on June 4, 2001).
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<PAGE>
"Maytag Worldwide" has the meaning set forth in the introductory paragraph
----------------
of this Agreement.
"Net Amount of Receivables" has the meaning set forth in Section 5.19(c).
------------------------- ---------------
"Neutral Accountants" means the Chicago office of KPMG, independent
-------------------
certified public accountants. If KPMG is unable or unwilling to serve in such
capacity, the Chicago office of an independent certified public accounting firm
agreed upon by the parties shall be the Neutral Accountants.
"Other Current Assets" means all prepaid and deferred items (including
--------------------
prepaid rent and other prepaid expenses) or credits and deposits, rights of
offset and credits and claims for refund (other than Tax refunds arising from or
pertaining to periods prior to the Closing Date) generated or incurred by or in
connection with the Business.
"Overlap Period" shall mean any taxable year or period beginning on or
--------------
before and ending after the Closing Date.
"Past Service" has the meaning set forth in Section 5.13(b)(i).
------------ ------------------
"Pension Plan" has the meaning set forth in Section 5.13(c)(i).
------------ ------------------
"Permits" means governmental licenses, certificates, permits, franchises,
-------
approvals, authorizations, exemptions, registrations, and rights relating to the
Business.
"Permitted Exceptions" means:
--------------------
(a) all liens for Taxes and assessments, both general and special, and
other governmental charges which are not yet due and payable as of the Closing
Date;
(b) with respect to each parcel of Real Property, the exceptions to title
reflected in the title commitments previously delivered to Buyer with respect to
the real property located in Searcy, Arkansas and Florence, South Carolina
(other than Encumbrances which can be removed by the payment of money);
(c) with respect to each parcel of Real Property and Leased Property,
other imperfections of title, easements and encumbrances (other than items for
the payment of indebtedness which encumber the leasehold interests, if any),
which do not individually or in the aggregate materially detract from the value
of or materially interfere with the present use of such parcel; and
(d) any Encumbrances arising under the Credit Agreement that will not
survive the Closing.
"Permitted Encumbrances" means: (a) all Encumbrances arising under the
----------------------
Credit Agreement that will not survive the Closing, and (b) inchoate mechanic's
and materialmen's liens for construction in progress and workmen's, repairmen's,
warehousemen's, carrier's and
-9-
<PAGE>
other similar statutory liens arising in the ordinary course of business in
respect of obligations that are not yet due.
"Permitted Transferee" means (i) any shareholder of Holding or any limited
--------------------
partner of Seller to whom Seller transfers Maytag Shares and that confirms in
writing the representations set forth in Section 3.26 and agrees in writing to
------------
be bound by Section 5.21 and (ii) any other person or entity to whom Seller
------------
transfers Maytag Shares pursuant to an exemption from the registration
requirements of the Securities Act prior to the first anniversary of the
Closing.
"Product Basket Amount" means $10,000,000.
---------------------
"Product Liability Claims" means any and all product liability claims or
------------------------
other claims for injury to person or property relating to products of the
Business, whether based on theories of tort, contract, strict liability, express
or implied warranty of otherwise.
"Product Warranty Claims" means any and all (a) demands for refunds,
-----------------------
returns or allowances pertaining to products of the Business, without regard to
the date of manufacture, shipment or sale of the product or the design of the
product in question; and (b) claims (other than Product Liability Claims)
asserted in accordance with the warranties and guarantees referred to in Section
-------
3.23 of the Disclosure Schedule.
----
"Prospectus" has the meaning set forth in Section 5.20(b).
---------- ---------------
"Purchase Price" has the meaning set forth in Section 2.5(a).
-------------- --------------
"Purchased Assets" has the meaning set forth in Section 2.1(a).
---------------- --------------
"Raytheon Agreements" means the Agreement and Plan of Merger dated as of
-------------------
July 11, 1997 by and between Raytheon Company, Raytheon Appliances, Inc.,
Goodman Manufacturing Company, L.P. and RAI Merger Limited Partnership, the
Cross License Agreement dated as of September 10, 1997 between Raytheon
Commercial Laundry LLC and Former Owner, the Trademark License Agreement dated
as of September 10, 1997 between Raytheon Commercial Laundry LLC and Former
Owner and all other agreements and instruments delivered pursuant thereto, in
each case as modified by the Settlement Agreement dated as of December 15, 1999
among Goodman Manufacturing Company, L.P., Goodman Holding Company, Former Owner
and Raytheon Company and the Settlement Agreement dated as of December 15, 1999
among Goodman Manufacturing Company, L.P., Goodman Holding Company, Former Owner
and Alliance Laundry Holdings LLC, Alliance Laundry Systems LLC and Bain
Capital, Inc.
"RCRA" has the meaning set forth in the definition of "Environmental Law."
----
"Real Property" means the parcels of real property owned by Seller and used
-------------
or held for use primarily in connection with the Business, including those more
particularly described in Section 3.4(a) of the Disclosure Schedule, together
--------------
with: (a) the Fixtures and Improvements located thereon; (b) all easements,
rights and privileges appurtenant thereto; (c) any land in the bed of any street
or road in front of or adjoining such real property; and (d) any reversionary
rights attributable thereto.
-10-
<PAGE>
"Receivables" means all of the accounts receivable, notes receivable and
-----------
advance payments generated or incurred primarily by or in connection with the
Business (including allowances for deductions from remittances, airline travel
advances, employee advances, rebates receivable, deposits on bids, other
receivables and claims receivables, but excluding receivables from Affiliates of
Seller or Global).
"Registration Statement" has the meaning set forth in Section 5.20(a).
---------------------- ---------------
"Release" means any actual or threatened spilling, leaking, pumping,
-------
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, abandoning or migrating into the environment.
"Salaried/Non-Bargaining Unit Employees" has the meaning set forth in
--------------------------------------
Section 5.13(a)(i).
------------------
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Seller" has the meaning set forth in the introductory paragraph of this
------
Agreement.
"Seller Group" means Seller and Global who shall be jointly and severally
------------
liable for any obligation undertaken by the Seller Group.
"Seller Indemnified Parties" has the meaning set forth in Section 7.2(b).
-------------------------- --------------
"Seller Welfare Plans" has the meaning set forth in Section 5.13(b)(iii).
-------------------- --------------------
"Seller's Account" has the meaning set forth in Section 2.5(b)(i)(B).
---------------- --------------------
"Seller's Actuary" has the meaning set forth in Section 5.13(c)(ii)(B).
---------------- ----------------------
"Seller's Benefit Plans" has the meaning set forth in Section 3.11(b).
---------------------- ---------------
"Seller's Compensation Commitments" has the meaning specified in Section
--------------------------------- -------
3.11(a)(i).
----------
"Seller's ERISA Plans" has the meaning specified in Section 3.11(b).
-------------------- ---------------
"Seller's FSA" has the meaning set forth in Section 5.13(e).
------------ ---------------
"Seller's Non-ERISA Plans" has the meaning specified in Section 3.11(b).
------------------------ ---------------
"Shareholder" means Seller, for so long as it holds Maytag Shares, and any
-----------
Permitted Transferees, if any.
"Statement of Change in Adjusted Working Capital" has the meaning set forth
-----------------------------------------------
in Section 2.6(a).
--------------
"Subsidiaries" means AFSI and AMANA Finance.
------------
-11-
<PAGE>
"Surveys" means, for each parcel of Real Property, a minimum ALTA/ACSM plat
-------
of survey dated no earlier than March 1, 2001 and certified to Buyer and the
Title Company which shall be sufficient to enable the Title Company to delete
the standard survey exceptions (if such deletion is available in the relevant
state) from the Title Policies and otherwise to provide the title endorsements
and coverages contemplated by this Agreement and available in the relevant state
and otherwise reasonably satisfactory to Buyer.
"Taxes" means any income, alternative or add on minimum, gross receipts,
-----
sales, use, ad valorem, value-added, employment, franchise, profits, property,
excise, occupation, capital, environmental (including taxes under Code Section
59A), severance, production, property, transfer, workers' compensation, social
security, stamp, withholding or similar taxes and any other tax or other
governmental fee, duty, assessment or charge of any kind whatsoever imposed by
any country or political subdivision thereof (whether payable directly or by
withholding), together with all interest and all penalties, additions to tax or
additional amounts imposed with respect thereto.
"Third Party Claim" has the meaning set forth in Section 7.2(c).
----------------- --------------
"Title Commitments" means, for each parcel of Real Property, a commitment
-----------------
to issue to Buyer a current 1992 ALTA Owner's Policy of Title Insurance (or
other similar form of policy if the Title Company is unable to issue the ALTA
1992 form) issued by the Title Company, covering such Real Property, showing
title vested in Seller and showing Buyer as the proposed insured. Each Title
Commitment shall be in an amount reasonably determined by Buyer and shall
contain the following additional coverages and endorsements to the extent such
coverages and endorsements are available in the relevant state: (i) extended
coverage over the general exceptions (including affirmative coverage over any
mechanics' lien exceptions), (ii) waiver of the creditors' rights exception,
(iii) a contiguity endorsement, if applicable, (iv) endorsement insuring
compliance with any covenants, conditions and restrictions affecting the Real
Property, (v) a survey accuracy endorsement, (vi) legal description equivalency
endorsement, (vii) zoning 3.1 endorsement, with parking and loading docks (or,
if zoning endorsements are not generally available in any applicable
jurisdiction, an opinion of counsel reasonably acceptable to Buyer stating that
the Real Property in question complies with all applicable zoning, parking and
loading dock requirements), (viii) a tax parcel endorsement (insuring that the
tax parcel(s) affecting the Real Property do/does not affect any property which
is not included in such Real Property), and (ix) a plat act and subdivision
endorsement (insuring that the Real Property in question has been legally
subdivided).
"Title Company" means (i) for the parcels of Real Property located in Iowa,
-------------
Allegiance Title Company and (ii) for all other parcels of Real Property, First
American Title Insurance Company.
"Title Objection Notice" has the meaning set forth in Section 5.17.
---------------------- ------------
"Title Policies" means the ALTA 1992 title insurance policies (or other
--------------
similar form of policy if the Title Company is unable to issue the ALTA 1992
form) issued by the Title Company at the Closing in favor of the Buyer, in the
form of the Title Commitments and
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<PAGE>
including all coverages and endorsements specified in the definition of Title
Commitment to the extent such coverages and endorsements are available in the
relevant state.
"Trademark License Agreement" means the Trademark License Agreement between
---------------------------
Maytag Worldwide and Global substantially in the form of Exhibit A.
---------
"Trademarks" has the meaning set forth in the definition of "Intellectual
----------
Property."
"Transferred Room A/C Business" has the meaning set forth in the first
-----------------------------
recital to this Agreement.
"Transferring Bargaining Unit Employees" has the meaning set forth in
--------------------------------------
Section 5.13(a)(i).
------------------
"Transferring Employees" has the meaning set forth in Section 5.13(a)(i).
---------------------- ------------------
"Uncollected Receivables Amount" has the meaning set forth in Section
------------------------------ -------
5.19(c).
-------
"Undisclosed Claim of Environmental Liability" means any Claim of
--------------------------------------------
Environmental Liability that was not specifically set forth in the Disclosure
Schedule in response to Section 3.3.
-----------
"valid title/survey objections" has the meaning set forth in Section 5.17.
----------------------------- ------------
"Validation Date" has the meaning set forth in Section 5.13(c)(iii)(B).
--------------- -----------------------
"Viking Agreements" means the Asset Purchase Agreement dated as of February
-----------------
16, 2000 by and between Former Owner and Viking Range Corporation, and all other
agreements and instruments delivered pursuant thereto.
"Violation" has the meaning set forth in Exhibit B.
--------- ---------
"WARN" means the Worker Adjustment and Retraining Notification Act (Pub. L.
----
100-379, 102 Stat. 890 (1988)).
"Worker's Compensation Claims" means any and all claims under worker's
----------------------------
compensation laws in respect of or arising in connection with occurrences
involving employees of Seller engaged in the Business prior to the Closing Date.
ARTICLE II
PURCHASE AND SALE OF ASSETS
---------------------------
Section 2.1 Purchase and Sale.
-----------------
(a) On the terms and subject to the satisfaction or waiver of the
conditions set forth herein, at the Closing, Seller will sell and convey to
Buyer and Maytag Worldwide, and Buyer and Maytag Worldwide will purchase and
acquire from Seller, free and clear of all Encumbrances (except for Permitted
Exceptions and Permitted Encumbrances), all of the assets and properties of
Seller of every kind and description, wherever located, real, personal or mixed,
tangible or intangible, related to the Business as the same exist on the Closing
Date, other than
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<PAGE>
the Excluded Assets identified in Section 2.2 (collectively, the "Purchased
----------- ---------
Assets"), including all right, title and interest of Seller in, to and under:
------
(i) all of the assets reflected on the December 31 Pro Forma
Balance Sheet except those disposed of or converted into cash after
December 31, 2000 in the ordinary course of business;
(ii) the Real Property;
(iii) the Equipment;
(iv) the Inventory;
(v) all other tangible assets used in connection with the
Business, including office furniture, office equipment and office supplies;
(vi) all Intellectual Property relating to the Business and the
goodwill associated therewith, including those intellectual property rights
listed in Section 3.7(a) of the Disclosure Schedule and the name "Amana"
--------------
and any derivations thereof and associated logos, subject to the Trademark
License Agreement;
(vii) the Receivables;
(viii) the Other Current Assets;
(ix) all of the books, records, manuals, documents, books of
account, correspondence, sales and credit reports, supplier lists, customer
lists, distributor lists, bid and quote information, literature, catalogs,
brochures, advertising material and the like which are used primarily in
the Business, except for employee records of persons who do not become
employees of Buyer at the Closing (including personnel files, employee
medical files, and workers' compensation files), and affirmative action
plans of Seller;
(x) the Leases and Leased Property;
(xi) the Contracts;
(xii) all computer equipment and all computer programs and
documentation used primarily in the Business;
(xiii) all Permits, other than those that cannot be lawfully
transferred;
(xiv) all emission offset credits, if any, arising from or
attributable to the operation of the Business;
(xv) all the outstanding capital stock of AFSI;
(xvi) all goodwill associated with the Business;
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<PAGE>
(xvii) all rights of Seller, Former Owner or any of their Affiliates
under the Raytheon Agreements, to the extent directly related to the
Business;
(xviii) except as specified in Section 2.2, all other assets,
-----------
tangible or intangible, owned by Seller and relating to the Business,
including all past, present and future claims, choses in action and rights
of action by Seller against third parties relating to the Business or any
of the Purchased Assets arising from events, acts, omissions or
circumstances on or prior to the Closing Date.
(b) At the Closing, the Purchased Assets shall be allocated between Buyer
and Maytag Worldwide as follows:
(i) to Maytag Worldwide, all Trademarks relating to the Business
and containing or consisting of the term "Amana," including the name
"Amana," as well as any derivations thereof and associated logos, and all
goodwill associated therewith, subject to the Trademark License Agreement;
and
(ii) to Buyer, all other Purchased Assets.
Section 2.2 Excluded Assets.
---------------
The assets listed below shall be retained by Seller or Former Owner, as the
case may be, and shall not be transferred to or purchased by Buyer (except for
the assets set forth in Section 2.2(c) which shall be transferred to, but not
--------------
purchased by, Buyer) (the "Excluded Assets"):
---------------
(a) any cash, bank deposits and cash equivalents;
(b) any asset relating primarily to Former Owner's HVAC Business;
(c) (i) all finished goods located at any Real Property or Leased Property
that are being held, stored or retained for a customer who previously purchased
such goods and (ii) all supplies and raw materials owned by third parties and
stored at any Real Property or Leased Property, none of which are reflected on
the December 31 Pro Forma Balance Sheet and none of which shall be included in
the determination of Change in Adjusted Working Capital;
(d) all computer equipment, computer programs and documentation located at
Global's Houston, Texas headquarters and Former Owner's Fayetteville, Tennessee
plant;
(e) all intangible assets relating to or arising under the Credit
Agreement and all past, present or future claims, choses in action and rights or
actions by Seller against third parties relating to (i) any Excluded Asset, (ii)
the Business or any of the Purchased Assets arising from events, acts, omissions
or circumstances after the Closing Date to the extent such claim or action
relates to or arose out of any matter for which Seller remains liable, including
any Excluded Liability, and (iii) any matter for which Seller Group is obligated
to indemnify Buyer Indemnified Parties pursuant to the terms of this Agreement;
(f) Permits, to the extent not lawfully transferable;
-15-
<PAGE>
(g) all of the books, records, tax returns, manuals, documents, books of
account, correspondence, sales and credit reports, supplier lists, customer
lists, distributor lists, bid and quote information, literature, catalogs,
brochures, advertising material and the like which (i) relate primarily to the
businesses of the Former Owner other than the Business, including those located
in the Fixtures and Improvements after the Closing, and (ii) constitute the
employee records of persons who do not become employees of Buyer at the Closing
(including personnel files, employee medical files and workers' compensation
files);
(h) any rights of reimbursement or otherwise of Seller in respect of
expenditures made by Seller in connection with Environmental Matters;
(i) all refunds of Taxes for which Seller Group is liable pursuant to
Section 5.15;
------------
(j) all rights and obligations arising under contracts, leases or
agreements constituting Excluded Liabilities;
(k) all rights of Seller, Former Owner or any of their Affiliates under
the Raytheon Agreements, to the extent not directly related to the Business; and
(l) all rights of Seller pursuant to this Agreement and the instruments
delivered hereunder.
Section 2.3 Assumed Liabilities.
-------------------
As partial consideration for consummation of the transactions contemplated
hereby, at the Closing, Buyer shall assume and agree to thereafter perform when
due and discharge, the following debts, obligations and liabilities of Seller
relating to the Business or the Purchased Assets (the "Assumed Liabilities") and
-------------------
no other liabilities or obligations of Seller:
(a) those liabilities, obligations, costs and expenses which arise out of
the performance of the Contracts, Leases and Permits on or after the Closing
Date to the extent that such Contracts, Leases and Permits are assigned to Buyer
hereunder in compliance with any required consents of other parties or consents
or approvals of governmental authorities, except (A) in each case, to the extent
such liabilities and obligations, but for a breach or default by Seller would
have been paid, performed or otherwise discharged on or prior to the Closing
Date or to the extent the same arise out of any such breach or default and (B)
in each case, to the extent such liabilities and obligations would be required
to be reflected on a balance sheet as of Closing Date with respect to the
Purchased Assets prepared in accordance with GAAP and were not so reflected in
the Closing Date Pro Forma Balance Sheet and not taken into account as a
deduction in determining the Change in Adjusted Working Capital in connection
with the determination of the Purchase Price pursuant to Section 2.6;
------------
(b) all liabilities in respect of Taxes for which Buyer is liable pursuant
to Section 5.15;
------------
(c) the Accounts Payable and all other liabilities of Seller included as
dollar amounts in the Closing Date Pro Forma Balance Sheet (including any
uncleared checks included in the dollar amount of accounts payable reflected in
the Closing Date Pro Forma Balance Sheet);
-16-
<PAGE>
(d) all liabilities or obligations explicitly undertaken or assumed by
Buyer pursuant to the other provisions of this Agreement;
(e) all Disclosed Claims of Environmental Liability;
(f) the obligations of Seller incurred in the ordinary course of business
to hold, store or retain finished goods located at any facility of the Business
for customers who have previously purchased such goods;
(g) any liabilities in respect of the claims or proceedings listed or
referred to in Section 3.5 of the Disclosure Schedule, other than the case
-----------
referred to as "Campbell, Dale" on Annex B-2 to the Disclosure Schedule (it
being understood that Buyer is assuming only an obligation to cooperate and
assist with the Raytheon litigation listed on Annex B-1 thereto); and
(h) any liabilities of Seller, Former Owner or any of their Affiliates
under the Raytheon Agreements, but only to the extent directly related to the
Business.
Section 2.4 Excluded Liabilities.
--------------------
Seller shall retain all debts, obligations and liabilities (known, unknown,
fixed, contingent or otherwise) other than the Assumed Liabilities (the
"Excluded Liabilities"), and notwithstanding anything to the contrary in Section
-------------------- -------
2.3, none of the following shall be Assumed Liabilities for the purposes of this
---
Agreement:
(a) all liabilities in respect of Taxes for which Seller Group is liable
pursuant to Section 5.15;
------------
(b) those liabilities retained by Seller pursuant to Section 5.13;
------------
(c) obligations or expenses of Seller in connection with the transactions
contemplated hereby, including legal and accounting fees and expenses and
investment banking fees due (except such fees and expenses as Seller is entitled
to receive from Buyer and that arise out of a breach of this Agreement,
enforcement of this Agreement, indemnification pursuant to this Agreement, and
similar matters);
(d) all Environmental Matters relating to or arising from the ownership or
operation by Seller, Former Owner or any of their Affiliates of any tangible
Excluded Assets or any other tangible asset or property at any time owned or
operated by Seller, Former Owner or any of their Affiliates or predecessors,
other than the Purchased Assets;
(e) all intercompany accounts and other liabilities or obligations to
Holding, Global or any of their respective Affiliates;
(f) all amounts payable pursuant to the Promissory Note referred to in
Section 3.1 of the Bifurcation Agreement and all other liabilities and
obligations of Seller under the Bifurcation Agreement (other than those
specifically included in the definition of Assumed Liabilities);
-17-
<PAGE>
(g) all amounts payable by Seller to the Lenders or otherwise under the
Credit Agreement;
(h) all amounts payable under or other liabilities or obligations relating
to the Amana Appliance Phantom Appreciation Rights Plan;
(i) all liabilities or obligations undertaken by Seller pursuant to this
Agreement and the instruments delivered hereunder;
(j) any liabilities or obligations in respect of any Excluded Assets;
(k) accrued liabilities of any kind required to be reflected on the
Closing Date Pro Forma Balance Sheet which were not reflected thereon as a
dollar amount;
(l) all liabilities or obligations of Seller, Former Owner or any of their
Affiliates under the Viking Agreements; and
(m) all liabilities or obligations of Seller, Former Owner or any of their
Affiliates under the Raytheon Agreements that are not directly related to the
Business.
Section 2.5 Purchase Price.
--------------
(a) Subject to adjustment in accordance with Section 2.6, the aggregate
-----------
purchase price (the "Purchase Price") payable in consideration for the Purchased
--------------
Assets (in addition to assuming the Assumed Liabilities) shall be (i) 500,000
shares of Maytag Common Stock (the "Maytag Shares") and (ii) the excess of Three
Hundred Twenty-Five Million ($325,000,000) over the Maytag Stock Valuation, as
increased or decreased, as the case may be, by the Change in Adjusted Working
Capital. Payment of the Purchase Price shall be made as provided in Section
-------
2.5(b) and Section 2.7.
------ -----------
(b) Subject to fulfillment or waiver of the conditions set forth in
Article VI,
----------
(i) Buyer will deliver to Seller at Closing:
(A) one or more certificates representing the Maytag Shares
registered in the name of Seller, and
(B) immediately available funds by wire transfer to an account
designated by Seller in writing no less than three (3) business days prior
to the Closing Date ("Seller's Account"), in the amount equal to the excess
----------------
of (x) Two Hundred Ninety Million Dollars ($290,000,000), as increased or
decreased, as the case may be, by Seller's good faith estimate of the
Change in Adjusted Working Capital, which estimate shall be delivered to
Buyer not less than three (3) business days prior to the Closing Date and
shall be subject to approval by Buyer, which shall not be unreasonably
withheld (the "Estimated Change in Adjusted Working Capital"), over (y) the
--------------------------------------------
Maytag Stock Valuation; and
-18-
<PAGE>
(ii) Maytag Worldwide will deliver to Seller at Closing immediately
available funds by wire transfer to Seller's Account in the amount equal to
Thirty-Five Million Dollars ($35,000,000).
SECTION 2.6 Determination of Change in Adjusted Working Capital.
---------------------------------------------------
(a) As promptly as practicable after the Closing Date, and in any event no
later than forty-five (45) days thereafter, Buyer shall prepare and deliver to
Seller an unaudited statement reflecting the determination of the Change in
Adjusted Working Capital (the "Statement of Change in Adjusted Working Capital")
-----------------------------------------------
to which statement shall be appended a copy of the Closing Date Pro Forma
Balance Sheet. Seller and its representatives shall have the right to
participate in the preparation of the Statement of Change in Adjusted Working
Capital, it being understood that Buyer shall be ultimately responsible for the
preparation thereof.
(b) After delivery to Seller of the Statement of Change in Adjusted
Working Capital, Seller and its representatives shall be afforded the
opportunity to review and inspect all of the financial records, work papers,
schedules and other supporting papers relating to the preparation of the
Statement of Change in Adjusted Working Capital and the Closing Date Pro Forma
Balance Sheet and to consult with Buyer, and its representatives, if necessary,
regarding the methods used in the preparation of those documents.
(c) The Closing Data Pro Forma Balance Sheet and the Change in Adjusted
Working Capital as shown on the Statement of Change in Adjusted Working Capital
prepared by Buyer, shall be final, conclusive and binding for purposes of this
Agreement, unless Seller shall give written notice of disagreement with any
values thereon or in the Closing Date Pro Forma Balance Sheet within thirty (30)
days following its receipt of the Statement of Change in Adjusted Working
Capital, specifying in reasonable detail the nature and extent of such
disagreement. Seller shall not be permitted to give a notice of disagreement
with respect to the Statement of Change in Adjusted Working Capital prepared by
Seller unless the aggregate amount in dispute exceeds One Hundred Thousand
Dollars ($100,000.00).
(d) If Buyer so objects within such 30-day period, Buyer and Seller shall
use their reasonable efforts to resolve by written agreement (the "Agreed
------
Adjustments") any differences as to the Closing Date Pro Forma Balance Sheet and
-----------
the Change in Adjusted Working Capital and, if Seller and Buyer so resolve all
such differences, the Closing Date Pro Forma Balance Sheet and the Change in
Adjusted Working Capital set forth in the Statement of Change in Adjusted
Working Capital as adjusted by the Agreed Adjustments shall be final and binding
as the Closing Date Pro Forma Balance Sheet and the Change in Adjusted Working
Capital, respectively, for purposes of this Agreement.
(e) If within thirty (30) days following receipt by Buyer of a notice of
the type referred to in subsection (c) above, Seller and Buyer are unable to
resolve any disagreement with respect to the Statement of Change in Adjusted
Working Capital and the Closing Date Pro Forma Balance Sheet so that the amount
then disputed by Seller does not exceed One Hundred Thousand Dollars, the
disagreement shall be submitted for resolution to the Neutral Accountants. The
Neutral Accountants shall act as an arbitrator to determine and resolve only
those issues still in dispute based solely on the presentations by Buyer and
Seller. The Neutral Accountants'
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<PAGE>
resolution of such dispute: (i) shall be made within thirty (30) days of the
submission of the dispute, based solely on the presentations by Buyer and
Seller; (ii) shall be in accordance with this Agreement; (iii) shall be effected
in a manner which is consistent with GAAP, except as provided in the footnotes
to the December 31 Pro Forma Balance Sheet and in the definition of Change in
Adjusted Working Capital; (iv) shall be set forth in a written statement
delivered to Seller and Buyer; and (v) shall be final, conclusive and binding on
Seller and Buyer.
(f) The fees and expenses of the Neutral Accountants in connection with
any such determination shall be apportioned equally between Seller and Buyer.
Buyer and Seller shall each pay their other respective costs incurred in
connection with this Section 2.6, including the fees and expenses of their
-----------
respective attorneys and accountants, if any.
(g) The Closing Date Pro Forma Balance Sheet and the Change in Adjusted
Working Capital, as adjusted if applicable, shall not limit the representations,
warranties, covenants and agreements of the parties set forth elsewhere in this
Agreement.
Section 2.7 Payment of Adjusted Purchase Price.
----------------------------------
Promptly following the final determination of Change in Adjusted Working
Capital as provided in Section 2.6, but in no event later than ten (10) days
-----------
after such determination, either:
(a) Buyer shall wire transfer to Seller immediately available funds in the
amount by which the Change in Adjusted Working Capital exceeds the Estimated
Change in Adjusted Working Capital; or
(b) Seller shall wire transfer to Buyer immediately available funds in the
amount by which the Estimated Change in Adjusted Working Capital exceeds the
Change in Adjusted Working Capital.
Any payment required to be made pursuant to this Section 2.7 shall be made
-----------
together with interest thereon from the Closing Date to the date of payment at
the rate of interest per annum equal to the prime rate in effect on the Closing
Date as reported in The Wall Street Journal. All wire transfers hereunder shall
-----------------------
be to such accounts in the United States as the recipient thereof may designate
in writing for that purpose.
Section 2.8 Allocation of Purchase Price.
----------------------------
The parties agree that the Purchase Price shall be allocated among the
Purchased Assets and the covenant not to compete granted pursuant to Section
-------
5.16 in accordance with a schedule (the "Allocation Schedule"), which shall be
---- -------------------
agreed upon by Seller and Buyer at least five (5) days prior to the Closing
Date. The Allocation Schedule shall be reasonable and shall be prepared in
accordance with Section 1060 of the Code and the Treasury Regulations
promulgated thereunder; provided, however, that the Allocation Schedule shall
-------- -------
reflect an allocation of the assets acquired by Buyer and those acquired by
Maytag Worldwide consistent with Sections 2.1(b) and 2.5. Seller and Buyer
--------------- ---
agree to complete and timely file Internal Revenue Service Form 8594 in
accordance with the Allocation Schedule (as agreed upon by the Buyer and Seller
pursuant to this Section 2.8) and to furnish each other with a copy of such form
-----------
prepared in draft form at least forty-five (45) days prior to the filing due
date of such form.
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<PAGE>
Neither Seller nor Buyer shall file any return or take a position with any
taxing authority that is inconsistent with the Allocation Schedule. Seller and
Buyer also agree to revise such Form 8594 after all adjustments, if any, have
been made to the Purchase Price in accordance with Section 2.6.
-----------
Section 2.9 Certain Costs, Fees and Expenses.
--------------------------------
Seller shall pay the title examination fees for the Title Commitments, the
costs of the Surveys relating to the Real Property and all costs and expenses
relating to all necessary waivers, consents, releases and approvals relating to
the Credit Agreement. Each of Seller and Buyer shall pay one-half of: (a) all
other premiums, costs, fees and expenses of the Title Policies and all
endorsements and reinsurance issued in connection therewith and all other costs
of the Title Company relating to the issuance of the foregoing and all costs and
expenses of the Title Policies; (b) all costs and expenses relating to any
estoppel agreements from the lessors of the Leased Property required by Buyer,
including, to the extent so required, consents from such lessors to the granting
of liens against such Leases to Buyer's lenders; (c) all costs and expenses
relating to all necessary waivers, consents, releases and approvals from other
parties to Leases, guarantees and Contracts (other than the Credit Agreement)
and all necessary consents and approvals required for the transfer of any
Intellectual Property; and (d) any sales, use, transfer, stock, documentary and
real property transfer Tax, fees or similar charges assessed against or incurred
by any party to this Agreement as a result of the transactions contemplated
hereby; provided, however, that (i) the parties to this Agreement shall fully
--------
cooperate with each other to minimize the aggregate amounts that would otherwise
be due under this Section 2.9 (including the filing of any bulk or occasional
-----------
sales notification or similar filings with the appropriate taxing authorities),
and (ii) this Section 2.9 shall not (but Section 5.15 shall) apply to any sales,
----------- ------------
use, transfer, stock, documentary and real property transfer Tax, fees or
similar charges assessed or assessable against or incurred as a result of the
transactions contemplated by the Bifurcation Agreement.
Section 2.10 Conveyances of Real Property.
----------------------------
Each deed and instrument of assignment relating to Real Property shall
contain a covenant and warranty by Seller that the granted property is free from
all Encumbrances made by Seller, the Former Owner or any person or entity
claiming by, through or under Seller or Former Owner, and that Seller does
warrant and will defend the same to Buyer, its successors and assigns, against
the lawful claims and demands of all persons claiming by, through or under
Seller, but against none other; the conveyance and the foregoing warranty being
subject to the Permitted Exceptions.
Section 2.11 Disclaimer of Warranties.
------------------------
EXCEPT WITH RESPECT TO THE WARRANTIES AND REPRESENTATIONS SPECIFICALLY SET
FORTH IN THIS AGREEMENT AND THE DEEDS CONVEYING, TRANSFERRING AND ASSIGNING THE
REAL PROPERTY, SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, WHETHER OF
MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, (INCLUDING THE
OPERATION OF THE BUSINESS), OR QUALITY AS TO THE PURCHASED ASSETS, OR
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ANY PART THEREOF, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF, OR THE ABSENCE
OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT,
EXCEPT AS PROVIDED IN THIS AGREEMENT AND THE DEEDS CONVEYING, TRANSFERRING AND
ASSIGNING THE REAL PROPERTY, THE PURCHASED ASSETS ARE TO BE CONVEYED HEREUNDER
"AS IS" ON THE CLOSING DATE AND IN THEIR CONDITION AS OF THE CLOSING DATE.
Section 2.12 Receipts After Closing.
----------------------
After the Closing, Seller or Former Owner may receive funds, proceeds,
contributions, refunds, rebates, payments or receipts that are attributable to
the Purchased Assets. Seller and Global agree to remit or cause to be remitted
any of the foregoing to Buyer promptly upon receipt. Buyer agrees to remit to
Seller promptly upon Buyer's receipt, any funds, proceeds, contributions,
rebates, payments or receipts that are attributable to the Excluded Assets.
After the Closing, Seller may receive invoices, bills, statements and other
claims for the costs attributable to the operation of the Business after the
Closing Date. Any of the foregoing received by Seller will be promptly forwarded
to Buyer, and Buyer agrees to pay on a timely basis all such invoices, bills,
statements and other claims forwarded by Seller for amounts for which Buyer has
indemnified Seller under Section 7.2(b).
--------------
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER AND GLOBAL
---------------------------------------------------
Seller and Global, recognizing that Buyer and Maytag Worldwide are relying
on the contents of this Article III as a material inducement to their execution,
-----------
delivery and performance of this Agreement, hereby jointly and severally
represent and warrant to and covenant and agree with Buyer and Maytag Worldwide
as follows:
Section 3.1 Organization, Authority and Good Standing.
-----------------------------------------
(a) Formation and Authority of Seller. Seller has been duly formed and is
---------------------------------
validly existing and in good standing as a limited partnership under the Texas
Revised Limited Partnership Act, with the partnership power and authority
necessary to own its property and to conduct the Business as currently conducted
and to consummate the transactions contemplated by this Agreement. This
Agreement has been duly authorized, executed and delivered by Holding, on behalf
of Seller, and constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, and each of the other
agreements, instruments and documents being or to be executed and delivered by
Seller under this Agreement or in connection herewith has been duly authorized
and upon execution and delivery by Holding, on behalf of Seller, will constitute
a legal, valid and binding obligation of Seller enforceable against Seller in
accordance with its terms, in each case, subject to the effects of the
Bankruptcy Exceptions. Holding is the sole general partner of Seller, and owns a
1.2668% general partnership interest in Seller, and the persons listed in
Section 3.1(a) of the Disclosure Schedule own an aggregate 98.7332% limited
--------------
partnership interest in Seller.
(b) Foreign Qualification of Seller. Seller is duly qualified to transact
-------------------------------
business as a foreign limited partnership and is in good standing in any of
those jurisdictions in the United
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States in which such qualification is necessary to conduct the Business (except
to the extent that the failure to so qualify or be in good standing would not
have a Material Adverse Effect).
(c) Incorporation and Good Standing of Holding. Holding has been duly
------------------------------------------
incorporated, is validly existing and in good standing under the laws of the
State of Texas, is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which its ownership of properties or
the conduct of its business requires such qualification (except to the extent
that the failure to be so qualified or be in good standing would not have a
Material Adverse Effect), and has the corporate power and authority necessary to
own or hold its properties and to conduct the businesses in which it is engaged
and to consummate the transactions contemplated by this Agreement on behalf of
Seller.
(d) Incorporation, Authority, Good Standing and Affiliates of Global.
----------------------------------------------------------------
Global has been duly incorporated, is validly existing and in good standing
under the laws of the State of Texas, is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction in which its
ownership of properties or the conduct of its business requires such
qualification (except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on its ability to perform
its obligations hereunder), and has the corporate power and authority necessary
to own or hold its properties and to conduct the businesses in which it is
engaged and to consummate the transactions contemplated by this Agreement. This
Agreement has been duly authorized, executed and delivered by Global and
constitutes the legal, valid and binding obligation of Global, enforceable
against Global in accordance with its terms, and each of the other agreements,
instruments and documents being or to be executed and delivered by Global under
this Agreement or in connection herewith has been duly authorized and upon
execution and delivery by Global will constitute a legal, valid and binding
obligation of Global, enforceable against Global in accordance with its terms,
in each case subject to the effects of the Bankruptcy Exceptions. Except for its
Affiliates, Global does not, directly or indirectly own, of record or
beneficially, any outstanding voting securities or other equity interests in, or
otherwise control, any corporation, partnership, joint venture or other entity.
(e) Incorporation, Good Standing and Ownership of AFSI. AFSI has been duly
--------------------------------------------------
incorporated, is validly existing and in good standing under the laws of the
State of Delaware, is duly qualified to do business and in good standing as a
foreign corporation in all fifty states (except as set forth in Section 3.1(e)
--------------
of the Disclosure Schedule and except to the extent that the failure to be so
qualified or in good standing would not have a material adverse effect on the
assets, business, results of operations, profits, prospects or condition
(financial or otherwise) of AFSI and Amana Finance, taken as a whole), and has
the corporate power and authority necessary to own or hold its properties and to
conduct the business in which it is engaged. The only business in which AFSI has
ever engaged is the ownership of, and its only asset is, a 50% general
partnership interest in Amana Finance. The outstanding capital stock of AFSI
consists of 1,000 shares of common stock, $1.00 par value, all of which have
been validly issued and fully paid and are nonassessable and all of which are
beneficially owned by Seller, free and clear of any Encumbrances other than
Permitted Encumbrances. There are no agreements, arrangements, options,
warrants, calls, rights or commitments of any character relating to the
issuance, sale, purchase or redemption of any shares of capital stock in AFSI.
True and complete copies of the
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certificate of incorporation of AFSI and all amendments thereto and of the By-
laws of AFSI as amended to date have been made available to Buyer.
(f) Organization, Good Standing and Ownership of Amana Finance. Amana
----------------------------------------------------------
Finance has been duly formed as a general partnership pursuant to the Illinois
Uniform Partnership Act, with the partnership power and authority necessary to
own or hold its property and to conduct its business as currently conducted.
AFSI owns a 50% general partnership interest in Amana Finance, free and clear of
any Encumbrances other than Permitted Encumbrances. There are no agreements,
arrangements, options, warrants, calls, rights or commitments of any character
relating to the issuance, sale, purchase or redemption of any partnership
interests in Amana Finance. Except for the Amana Finance Partnership Documents
and except for the Contracts listed in Section 3.10(a) of the Disclosure
---------------
Schedule, there are no agreements between Seller or either Subsidiary and
Transamerica Finance Commercial Corporation or its Affiliates. True and complete
copies of the Amana Finance Partnership Documents as amended to date have been
made available to Buyer. Neither Seller nor AFSI has any obligation to make any
further capital contributions to Amana Finance.
(g) No Other Subsidiaries. Except for the Subsidiaries, Seller does not,
---------------------
directly or indirectly (A) own, of record or beneficially, any outstanding
voting securities or other equity interests in any corporation, partnership,
joint venture or other entity which is involved in or relates to the Business or
(B) control any corporation, partnership, joint venture or other entity which is
involved in or relates to the Business.
Section 3.2 Absence of Conflicts and Consent Requirements.
---------------------------------------------
Except as set forth in Section 3.2 of the Disclosure Schedule, each of
-----------
Seller's and Global's execution and delivery of this Agreement, and the
performance of their respective obligations hereunder, do not: (a) conflict with
or violate, the partnership formation documents of Seller, the charter documents
or bylaws of Global or AFSI or the Amana Finance Partnership Documents; (b)
violate or, alone or with notice or the passage of time, result in the breach or
the termination of, or otherwise give any contracting party the right to
terminate, declare a default or declare an acceleration under, the terms of any
material agreement relating to the Business to which Seller or either Subsidiary
is a party or by which any of the Purchased Assets or the Subsidiaries' assets
may be bound or (c) violate any judgment, order, decree or any material law,
statute, regulation or other judicial or governmental restriction to which
Seller, either Subsidiary or Global is subject. Except for compliance with the
HSR Act and as otherwise noted in Section 3.2 of the Disclosure Schedule, there
-----------
is no requirement applicable to Seller or Global to make any filing with, or to
obtain any Permit, authorization, consent or approval of, any governmental or
regulatory authority or any third party, as a condition to the lawful
performance by Seller or Global of its obligations hereunder.
Section 3.3 Environmental Matters.
---------------------
Except as set forth in Section 3.3 of the Disclosure Schedule:
-----------
(a) the operations of the Business by Seller and Former Owner comply and
have complied in all material respects with all applicable Environmental Laws;
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<PAGE>
(b) Seller has, in respect of the Business, obtained all environmental,
health and safety Permits necessary for its operation as currently conducted,
and all such Permits are in good standing and Seller is in material compliance
with all terms and conditions of such permits;
(c) none of Seller or Former Owner, with respect to the Business, nor any
of their present property or operations, or their past property or operations
with respect to the Business, is subject to any on-going investigation by, order
from or agreement with any person or entity (including any prior owner or
operator of Seller's property) respecting any Claim of Environmental Liability
except where any resulting liability would not, individually or in the aggregate
have a Material Adverse Effect;
(d) neither Seller nor Former Owner is, with respect to the Business,
subject to any pending judicial or administrative proceeding, or to any order,
judgment, decree or settlement all liabilities and obligations under which have
not been fully resolved, in each case alleging or addressing a material
violation of or liability under any Environmental Law;
(e) except where any resulting liability would not, individually or in the
aggregate, give rise to a Material Adverse Effect, neither Seller nor Former
Owner has, with respect to the Business:
(i) reported a Release of a hazardous substance pursuant to Section
103(a) of the CERCLA or any state equivalent;
(ii) filed a notice pursuant to Section 103(c) of CERCLA;
(iii) filed any notice under any applicable Environmental Law
reporting a material violation of any applicable Environmental Law;
(f) there is not now, nor to the best knowledge of Seller or Global has
there ever been, on or in any of Seller's properties:
(i) any treatment, recycling, storage or disposal of any hazardous
waste, as that term is defined under 40 CFR Part 261 or any state
equivalent, that requires or required a Permit pursuant to Section 3005 of
RCRA; or
(ii) any underground storage tank or surface impoundment or landfill
or waste pile;
(g) except where any resulting liability would not, individually or in the
aggregate, give rise to a Material Adverse Effect, there is not now on or in any
of Seller's properties any polychlorinated biphenyls (PCB) used in pigments,
hydraulic oils, electrical transformers or other equipment;
(h) neither Seller nor Former Owner has in respect of the Business
received any notice or claim to the effect that it is or may be liable in any
material respect to any person or entity (including any governmental authority)
as a result of the Release or threatened Release of a Hazardous Substance;
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<PAGE>
(i) no Encumbrance has attached to any of Seller's or Former Owner's
property in favor of any governmental body for (i) any liability under any
Environmental Law, or (ii) damages arising from, or costs incurred by such
governmental body in response to, a Release or threatened Release of a Hazardous
Substance into the environment;
(j) any asbestos-containing material which is on or part of any of
Seller's property is in good repair according to the current standards and
practices governing such material, and its presence or condition does not
violate in any material respect any applicable Environmental Law; and
(k) none of the products manufactured, distributed or sold by Seller or
Former Owner in connection with the Business, now or in the past, contains
asbestos or asbestos-containing material.
Section 3.4 Ownership of Assets.
-------------------
(a) Real Property. Section 3.4(a) of the Disclosure Schedule sets forth a
------------- --------------
true and complete list and legal description of all the Real Property. Neither
Subsidiary owns or has ever owned any real property. Seller has good and
indefeasible title to the Real Property, free and clear of any Encumbrances,
except for Permitted Exceptions and Permitted Encumbrances. Seller does not hold
any option to acquire any real property and is not lessor of any of the Real
Property.
(b) Leases and Leased Property. Section 3.4(b) of the Disclosure Schedule
-------------------------- --------------
sets forth a true and complete list of all leases and subleases of real property
under which Seller is lessee or sublessee of any real property owned by any
other person and which is used primarily in connection with the Business, and,
except as set forth in Section 3.4(b) of the Disclosure Schedule, Seller has not
--------------
encumbered the Leases or assigned the Leases to any other person. Except as set
forth in Section 3.4(b) of the Disclosure Schedule, all Leases are in full force
--------------
and effect and constitute the legal, valid and binding obligations of Seller
and, to the best knowledge of Seller and Global, the other respective parties
thereto. Except as set forth in Section 3.4(b) of the Disclosure Schedule, all
--------------
rent and other payments due under the Leases have been paid and there are no
existing material defaults (or events or conditions which, with notice or lapse
of time or both, would constitute a material default) of Seller with respect to
the Leases. To the best knowledge of Seller and Global, there are no existing
material defaults of any of the other parties thereto (or events or conditions
which, with notice or lapse of time, or both, would constitute a material
default). Except as set forth in Section 3.4(b) of the Disclosure Schedule,
--------------
Seller has the right to quiet enjoyment of all the Leased Property for the full
term of the related Lease (and any renewal option related thereto) relating
thereto, and the leasehold or other interest of Seller in the Leased Property is
not subject or subordinate to any Encumbrance except for Permitted Encumbrances.
Complete and correct copies of all Leases, together with any title opinions,
surveys and appraisals in Seller's possession or any policies of title insurance
currently in force and in the possession of Seller with respect to each parcel
of Leased Property have heretofore been made available to Buyer by Seller.
Neither Subsidiary is lessee or sublessee of any real property owned by any
other person.
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<PAGE>
(c) Condemnation. Neither the whole nor any part of the Real Property or
------------
the Leased Property is subject to any pending suit for condemnation or other
taking by any governmental body, and, to the knowledge of Seller, no such
condemnation or other taking is threatened or contemplated.
(d) Personal Property. Seller has previously delivered to Buyer a
-----------------
representative list, dated as of April 30, 2001, of all Equipment and other
tangible personal property owned by Seller and used in or relating to the
Business. Except as set forth in Section 3.4(d) of the Disclosure Schedule,
--------------
Seller has good and indefeasible title to all Equipment and other items of
tangible personal property and all items of intangible property which are
included in the Purchased Assets, free and clear of any Encumbrances, except for
Permitted Encumbrances and minor Encumbrances that in the aggregate are not
substantial in amount and do not materially detract from the value of the assets
subject thereto or materially interfere with the present use thereof.
(e) Sufficiency of Purchased Assets. Except for the Excluded Assets
-------------------------------
specified in subsections (c) through (k) of Section 2.2, the Purchased Assets
-----------
(i) constitute all of the assets and properties reasonably necessary for the
operation of the Business after the Closing Date, consistent with the operations
of the Business as conducted as of December 31, 2000 and (ii) are in good
condition (subject to normal wear and tear) and serviceable condition and are
suitable for the uses for which they are intended.
(f) Excluded Services. Section 3.4(f) of the Disclosure Schedule sets
----------------- --------------
forth a description of all material services provided by Seller or any Affiliate
of Seller or Global with respect to the Business utilizing either (i) assets not
included in the Purchased Assets or (ii) employees other than Transferring
Employees and the manner in which the costs of providing such services have been
allocated to the Business.
Section 3.5 Litigation.
----------
Except as set forth in Section 3.5 of the Disclosure Schedule, there is no
-----------
claim, action, proceeding or investigation pending or, to Seller's or Global's
knowledge, threatened, and there is no outstanding writ, order, decree,
injunction, award or judgment (a) against, affecting or relating to the Business
or any of the Purchased Assets, (b) that calls into question the authority or
right of Seller or Global to enter into this Agreement and consummate the
transactions contemplated hereby; or (c) which would otherwise prevent or delay
the transactions contemplated by this Agreement.
Section 3.6 Permits and Compliance With Law.
-------------------------------
Except as set forth in Section 3.6 of the Disclosure Schedule and as
-----------
provided in Section 3.3 of the Disclosure Schedule with respect to environmental
-----------
matters and in Section 3.11 of the Disclosure Schedule with respect to labor and
------------
employment matters:
(a) Seller holds all material Permits which are necessary to conduct the
Business as presently carried on by it;
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(b) Seller is presently conducting and has conducted, and Former Owner
conducted, the Business so as to comply in all material respects with all
material applicable statutes, ordinances, rules, regulations and orders of any
governmental authority; and
(c) Each of Seller and Former Owner has fulfilled and performed in all
material respects its obligations under each material Permit, and (i) no event
has occurred or condition or state of facts exists which constitutes or, after
notice or lapse of time or both, would constitute a material breach or default
under any such material Permit or which permits or, after notice or lapse of
time or both, would permit revocation or termination of any such material
Permit, or which might materially adversely affect the rights of Seller or
either Subsidiary under any such material Permit; (ii) no notice of
cancellation, of default or of any dispute concerning any material Permit, or of
any event, condition or state of facts described in the preceding clause, has
been received by, or is known to, Seller; and (iii) each material Permit is
valid, subsisting and in full force and effect and may be assigned and
transferred to Buyer in accordance with this Agreement.
Section 3.7 Intellectual Property Rights.
----------------------------
(a) Section 3.7(a) of the Disclosure Schedule sets forth a true and
--------------
correct list of:
(i) all Intellectual Property owned by, licensed to or used by
Seller or Former Owner in conduct of the Business (other than computer
software that is licensed to Seller or Former Owner and that is generally
available to consumers at retail and licensed pursuant to "shrink-wrap,"
"click-through" or other similar standard license agreement), including the
owner, owner of record if registered or registration has been applied for,
registration or application date, registration or application number, and
other information sufficient to identify and distinguish it;
(ii) all contracts, licenses, assignments, royalty agreements,
settlements, judgments and decrees dealing with or affecting the
Intellectual Property relating to the Business and to which Seller or
Former Owner is a party or by which it is bound, including the parties,
effective date, term, statutes, subject and Intellectual Property to which
it relates; and
(iii) pending or threatened litigation with respect to any of the
foregoing, including the Intellectual Property at issue, actual or
potential parties to the litigation, nature of the litigation and the claim
asserted, when litigation was first threatened or filed, and status.
(b) To Seller's knowledge and except as set forth in Section 3.7(b) of the
--------------
Disclosure Schedule, there are no pending claims or allegations, and no basis
for any such claims or allegations, against Seller or either Subsidiary of
infringement, misappropriation or misuse of any Intellectual Property of any
other person.
(c) Except for the unregistered marks and trademarks referred to in
Section 3.7(a) of the Disclosure Schedule, Seller either owns all of the right,
--------------
title, and interest in the Intellectual Property included in the Purchased
Assets or has the perpetual, royalty-free right to use it. To the extent that
Seller has the right to use such Intellectual Property, such right is freely
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transferable to Buyer. Except as set forth in Section 3.7(c) of the Disclosure
--------------
Schedule, Seller is listed in the records of the appropriate United States,
state or foreign registry as the sole current owner of record for each
application or registration identified in Section 3.7(a) as being owned by
--------------
Seller.
(d) Except as set forth in Section 3.7(d) of the Disclosure Schedule, (i)
--------------
the Intellectual Property owned by Seller is in good standing and, to the
knowledge of Seller, is valid and enforceable; (ii) all registrations for
copyrights, patent rights and trademarks identified in Section 3.7(a) of the
--------------
Disclosure Schedule are in full force and, to the knowledge of Seller, valid and
all applications to register any unregistered copyrights, patent rights or
trademarks so identified are pending and in good standing, all without challenge
of any kind by any third party; and (iii) Seller has the sole and exclusive
right to bring actions for infringement, misappropriation or unauthorized use of
Intellectual Property owned by it, and, to the knowledge of Seller, there is no
basis for any such action. Copies of all registrations or current applications
relating to the Intellectual Property identified in Section 3.7(a) of the
--------------
Disclosure Schedule have been made available to Buyer.
(e) Each of the employees, agents, contractors or consultants who have
contributed to or participated in the discovery, creation or development of
Intellectual Property on behalf of Seller: (i) has assigned or is under a valid
obligation to assign all right, title, and interest thereto to Seller; (ii) is a
party to a valid "work for hire" agreement under which Seller is deemed to be
the author and original owner of the copyright to the Intellectual Property; or
(iii) has by operation of law vested in Seller all right, title, and interest in
the Intellectual Property by virtue of his or her employment with Seller.
(f) Seller has provided to Buyer true and complete copies of all documents
relating to (i) Seller's acquisition of and right to use the word "AMANA" as, or
as part of, a Trademark have been provided to Buyer, and (ii) any disputes
concerning or objections to the use by Seller, the Former Owner or any
predecessor of the word "AMANA" as, or as part of, a Trademark.
Section 3.8 Computer Hardware and Software.
------------------------------
Section 3.8 of the Disclosure Schedule sets forth a true and complete list
-----------
of all computer equipment, computer programs and documentation, and computer
services which are material to the continued operation of the Business in a
manner consistent with current operations and designates which equipment,
programs, documentation and services are Excluded Assets.
Section 3.9 Receivables; Inventories.
------------------------
(a) Except to the extent reserved for on the December 31 Pro Forma Balance
Sheet and except as set forth in Section 3.9 of the Disclosure Schedule, all
-----------
Receivables reflected on the December 31 Pro Forma Balance Sheet arose from, and
the Receivables to be reflected on the Closing Date Pro Forma Balance Sheet will
have arisen from, the sale of inventory or services to persons not affiliated
with Seller or Global and in the ordinary course of the Business and, except as
reserved against on the December 31 Pro Forma Balance Sheet or on the Closing
Date Pro Forma Balance Sheet determined on a basis consistent with the basis
used in determining reserves in the December 31 Pro Forma Balance Sheet, are or
will be good and collectible and
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constitute or will constitute, as the case may be, only valid, undisputed claims
of Seller not subject to valid claims of set-off or other defenses or
counterclaims.
(b) The inventories of the Business (including raw materials, supplies,
work-in-process, finished goods and other materials) (i) are in good,
merchantable and useable condition and (ii) are, in the case of finished goods,
of a quality and quantity saleable in the ordinary course of business and, in
the case of all other inventories, of a quality and quantity useable in the
ordinary course of business. The inventory obsolescence policies of Seller with
respect to the Business are appropriate for the nature of the products sold and
the marketing methods used by the Business, and the reserve for inventory
obsolescence contained in the December 31 Pro Forma Balance Sheet fairly
reflects the amount of obsolete inventory as of December 31, 2000. Section
-------
3.9(b) of the Disclosure Schedule sets forth a list of places where material
------
inventories of the Business were located as of April 30, 2001.
Section 3.10 Material Contracts.
------------------
(a) Section 3.10(a) of the Disclosure Schedule lists or describes the
---------------
following agreements relating to the Business and the Purchased Assets
(including leases of personal property, purchase contracts and commitments but
excluding purchase orders entered into in the ordinary course of business) to
which Seller is a party or by which it is bound, or by which the Business or any
of the Purchased Assets may be bound:
(i) all contracts involving future obligations on the part of
Seller in an amount which are, individually or in the aggregate, reasonably
expected to exceed One Hundred Thousand Dollars ($100,000);
(ii) all partnerships and joint ventures;
(iii) all Leases;
(iv) all notes, bonds, mortgages, security agreements, guarantees
and other agreements and instruments for or relating to any lending by
Seller of any amount (exclusive of advances to employees for expenses in
the ordinary course of business) or any borrowing (including assumed debt
but excluding Excluded Liabilities) by Seller, which is reasonably expected
to exceed One Hundred Thousand Dollars ($100,000) or more and which relates
to the Business;
(v) all forms of Contracts used with dealers, together with a list
of any dealers who are not parties to such form Contracts;
(vi) all distributor, manufacturers representative and sales agency
Contracts, together with a list of any distributors, manufacturers
representatives or sales agents of the Business who are not parties to
written Contracts;
(vii) all material advertising representative or advertising or
public relations Contracts;
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(viii) all guarantees by Seller or any Subsidiary of the obligations
of any of its customers, suppliers, officers, directors, employees,
Affiliates or others (including Global and its Affiliates);
(ix) all Contracts which limit or restrict where Seller may conduct
the Business or the type or line of business in which Seller may engage;
(x) all Contracts not made in the ordinary course; and
(xi) all other contracts, agreements, commitments, understandings
or instrument which are material to the Business or the Purchased Assets.
(b) Except as set forth in Section 3.10(b) of the Disclosure Schedule,
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AFSI is not a party to, or bound by, any contract of the type referred to in
Section 3.10(a).
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(c) Except as set forth in Section 3.10(c) of the Disclosure Schedule: (i)
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each agreement referred to in subsection (a) or (b) above, Section 3.7(a) of the
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Disclosure Schedule and Section 3.11 of the Disclosure Schedule (the "Business
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Agreements") is valid, binding and enforceable in accordance with its terms,
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subject to the Bankruptcy Exceptions; (ii) Seller (or the Former Owner) or AFSI,
as the case may be, has fulfilled and performed its obligations under each of
the Business Agreements; (iii) to Seller's and Global's knowledge, no other
party to any such agreement is in material breach or default of the terms of
such instrument; and (iv) there does not exist under any provision thereof, any
event that, with the giving of notice or the passage of time or both, would
constitute a breach or default thereunder. A true complete copy of each Business
Agreement has been made available to Buyer by Seller.
Section 3.11 Labor and Employment Matters; ERISA.
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(a) Except as set forth in Section 3.11(a) of the Disclosure Schedule:
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(i) Except for