<PAGE>
CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 1, 1997
WHIRLPOOL CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-3932 38-1490038
- ---------------------------- --------------- -------------------
(State or other jurisdiction (Commision File (I.R.S. Employer
of incorporation) number) Identification No.)
2000 M63 North, Benton Harbor, Michigan 49022-2692
----------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
(616)-923-5000
--------------------------------------------------
Registrant's telephone number, including area code
<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
On November 1, 1997, the registrant completed the sale of certain
European factoring assets to Transamerica Distribution Finance Corporation
("TDF") for approximately $168 million as part of the transaction contemplated
under the parties' Asset Purchase Agreement dated September 17, 1997 (the
"Agreement"). Under the Agreement, TDF agreed to purchase certain inventory,
consumer, and international financing receivable assets from the registrant's
financing subsidiary, Whirlpool Financial Corporation, subject to TDF obtaining
appropriate government approvals. In addition, the parties agreed to enter into
a strategic alliance agreement under which the registrant agreed to promote TDF
as the preferred financing source for domestic trade partners of the registrant
who require inventory floor plan financing.
This transaction, when combined with a previous purchase of certain
inventory floor planning financing assets and international factoring assets for
approximately $759 million by TDF results in a disposition of significant assets
in a series of related transactions.
Under the Agreement, the parties expect to complete the remaining
sales of certain international and consumer financing receivable assets for
approximately $400 million during the fourth quarter of 1997 or the first
quarter of 1998, depending upon the buyer's ability to obtain certain clearances
required under various governmental regulations.
Item 5. Other Events
------------
On November 3, 1997, the registrant acquired all corporate interests
held by the Bradesco Group of Brasmotor S.A. for approximately $217 million
(U.S.). The acquired interests are 302,433,522 shares of common stock and
63,000,000 shares of preferred stock. Funds for this purchase were generated
from the previous sales of assets described above.
The registrant's acquisition of the common stock of Brasmotor S.A.
from the Bradesco Group results in the registrant holding, through various
subsidiaries, approximately 66% of the voting shares of Brasmotor. Accordingly,
financial results of Brasmotor will be reported in the registrant's financial
statements on a consolidated basis.
Item 7. Financial Statements and Exhibits
---------------------------------
(b) Proforma financial information
The registrant's unaudited pro forma condensed consolidated
balance sheet as of September 30, 1997 and unaudited pro forma
condensed consolidated statements of earnings for the year ended
December 31, 1996 and the nine months ended September 30, 1997
giving effect to the disposition by the registrant of the
financing receivable assets described in Item 2.
(c) Exhibits
1. Asset Purchase Agreement by and among Whirlpool Financial
Corporation, Transamerica Distribution Finance Corporation, Whirlpool
Corporation and Transamerica Commercial Finance Corporation, Inc., dated
September 17, 1997.
2. Press Release dated November 7, 1997 reporting the purchase of
Brasmotor stock by the registrant from the Bradesco Group.
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
NINE MONTHS ENDED SEPTEMBER 30, 1997
(millions of dollars except share and dividend data)
<TABLE>
<CAPTION>
Whirlpool Corporation
(Consolidated)
-------------------------------------------
Historical Adjustments Pro-forma
---------- ----------- ---------
<S> <C> <C> <C>
Net sales $6,107 $ - $ 6,107
EXPENSES:
Cost of products sold 4,717 - 4,717
Selling and administrative 1,152 - 1,152
Intangible amortization 25 - 25
Restructuring costs 308 - 308
------ ----- ------
6,202 - 6,202
------ ----- ------
OPERATING PROFIT (LOSS) (95) - (95)
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (10) - (10)
Interest expense (110) - (110)
------ ----- ------
EARNINGS (LOSS) BEFORE INCOME TAXES
AND OTHER ITEMS (215) - (215)
Income taxes (26) - (26)
------ ----- ------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS (189) - (189)
Equity earnings of affiliated companies 61 - 61
Minority interests 32 (5) 27
------ ----- ------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS (96) (5) (101)
Discontinued operations less applicable taxes (11) 11 -
------ ----- ------
NET EARNINGS (LOSS) $ (107) $ 6 $ (101)
====== ===== ======
Per share of common stock:
Primary earnings (loss) from continuing operations $(1.30) $0.08 $(1.22)
Primary earnings (loss) from discontinued operations (0.14) - (0.14)
------ ----- ------
Primary earnings (loss) $(1.44) $0.08 $(1.36)
====== ===== ======
Cash dividends $1.02 $ - $ 1.02
====== ===== ======
Adjustments:
Minority interests: WFC preferred stock dividend
Discontinued operations: WFC year-to-date earnings, net of preferred
stock dividends
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
TWELVE MONTHS ENDED DECEMBER 31, 1996
(millions of dollars except share data) Whirlpool Corporation
(Consolidated)
---------------------------------------------
Historical Adjustments Pro-forma
--------- ----------- ---------
<S> <C> <C> <C>
Net sales $8,523 $ - $8,523
EXPENSES
Cost of products sold 6,623 - 6,623
Selling and administrative 1,557 - 1,557
Intangible amortization 35 - 35
Restructuring costs 30 - 30
------ ------ ------
8,245 - 8,245
------ ------ ------
OPERATING PROFIT 278 - 278
OTHER INCOME (EXPENSE)
Interest and sundry (23) - (23)
Interest expense (155) - (155)
------ ------ ------
EARNINGS BEFORE TAXES
AND OTHER ITEMS 100 - 100
Income taxes 70 - 70
------ ------ ------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 30 - 30
Equity in affiliated companies 93 - 93
Minority interests 18 (4) 14
------ ------ ------
EARNINGS FROM CONTINUING OPERATIONS 141 (4) 137
Discontinued Operations Less Applicable Taxes 15 (15) -
NET EARNINGS $ 156 $ (19) $ 137
====== ====== ======
Per share of Common Stock:
Primary earnings from continuing operations $ 1.88 $(0.26) $ 1.62
Primary earnings from discontinued operations 0.20 - 0.20
------ ------ ------
Primary earnings $ 2.08 $(0.26) $ 1.82
====== ====== ======
Cash dividends $ 1.36 $ 1.36
====== ======
</TABLE>
Adjustments:
Minority interests: WFC preferred stock dividend
Discontinued operations: WFC year-to-date earnings, net of preferred stock
dividends
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
September 30, 1997
(millions of dollars)
Historical Adjustments Pro-forma
---------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $90 $318 $408
Trade receivables, less allowances
(1997: $63) 1,312 - 1,312
Inventories 911 - 911
Other current assets 380 - 380
Net assets of discontinued
operations 1,594 (1,594) -
---------------------------------
TOTAL CURRENT ASSETS 4,287 (1,276) 3,011
Investments and other assets 1,026 - 1,026
Intangibles, net 757 - 757
---------------------------------
1,783 - 1,783
Property, plant and equipment 3,683 - 3,683
Accumulated depreciation (2,119) - (2,119)
---------------------------------
1,564 - 1,564
---------------------------------
TOTAL ASSETS $7,634 ($1,276) $6,358
=================================
Historical Adjustments Pro-forma
---------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $2,055 ($1,370) $ 685
Accounts payable 810 - 810
Other current liabilities 1,128 39 1,167
---------------------------------
TOTAL CURRENT LIABILITIES 3,993 (1,331) 2,662
Long-term debt 900 - 900
Postemployment benefits 573 - 573
Other liabilities 326 - 326
---------------------------------
1,799 - 1,799
Minority interests 131 - 131
STOCKHOLDERS' EQUITY
Common stock 82 - 82
Paid-in capital 271 - 271
Retained earnings 1,735 55 1,790
Unearned restricted stock (6) - (6)
Currency translation adjustments (134) - (134)
Treasury stock - at cost (237) - (237)
---------------------------------
TOTAL STOCKHOLDERS' EQUITY 1,711 55 1,766
---------------------------------
TOTAL LIABILITIES AND EQUITY $7,634 ($1,276) $6,358
=================================
Adjustments:
Cash: cash proceeds from sale of WFC assets, before tax payment
Net assets of discontinued operations: WFC assets held for disposition
Notes payables: WFC notes payable
Other current liabilties: tax payable on gain from sale of assets
Retained earnings: estimated gain on sale of WFC assets $55 million, net of
related tax of $39 million
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHIRLPOOL CORPORATION
Registrant
Date: November 14, 1997 By: /s/ Daniel F. Hopp
--------------------------------------
Name: Daniel F. Hopp
Title: Vice President, General
Counsel and Secretary
<PAGE>
EXHIBIT 1
---------
_______________________________
Asset Purchase Agreement
by and among
WHIRLPOOL FINANCIAL CORPORATION
-------------------------------
(the "Seller")
TRANSAMERICA DISTRIBUTION FINANCE CORPORATION
---------------------------------------------
(the "Purchaser")
WHIRLPOOL CORPORATION
---------------------
(the "WFC Parent")
and
TRANSAMERICA COMMERCIAL FINANCE CORPORATION, I
----------------------------------------------
(the "Purchaser's Parent")
Date: September 17, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS 1
ARTICLE II
PURCHASE AND SALE.......................................... 11
<S> <C> <C>
2.1 Purchase and Sale 11
2.2 The Assets 11
2.3 Excluded Assets 15
2.4 Assumed Liabilities 18
2.5 Excluded Liabilities 19
2.6 Closing 20
2.7 WFNB Purchase 21
2.8 Foreign Purchases 23
ARTICLE III
PURCHASE PRICE ADJUSTMENT.................................. 25
3.1 Closing Statement of Net Assets 25
3.2 Determination of Closing Adjustments; Dispute
Resolution 25
(a) Cooperation 25
(b) Review by Purchaser; Disagreement 25
(c) Resolution of Disagreements 26
(d) Final Closing Net Asset Value 26
3.3 Post-Closing Adjustment 27
(a) Closing Payment 27
(b) Method of Payment 27
(c) Purchase Price Adjustment 27
(d) Additional Adjustments 28
3.4 Repurchase of Excluded Assets 28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
AND WFC PARENT............................................ 29
4.1 Organization and Existence 29
4.2 Authority and Approval 30
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.3 No Conflict 30
4.4 Contracts 31
4.5 Financial Statements 31
4.6 Title to Properties; Encumbrance; Sufficiency
of Assets 32
4.7 WFC Stock Companies 32
4.8 Contracts and Receivables 33
4.9 Leases 34
4.10 Litigation 35
4.11 Tax Matters 35
4.12 Insurance 36
4.13 Benefit Plans 36
4.14 Contracts and Commitments 38
4.15 Permits and Other Operating Rights 39
4.16 Compliance with Laws 40
4.17 No Illegal or Improper Transactions 40
4.18 Certain Environmental Matters 40
4.19 Brokers' Fees or Commissions 41
4.20 Disclosure 41
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
AND PURCHASER'S PARENT.......................................... 42
5.1 Organization and Existence 42
5.2 Authority and Approval 42
5.3 No Conflict 43
5.4 Funds Available 44
5.5 Litigation 44
5.6 Securities 44
5.7 Brokers' Fees or Commission 44
ARTICLE VI
COVENANTS OF THE SELLER......................................... 45
6.1 Conduct of Business 45
6.2 Access 48
6.3 HSR Act Notification; Other Governmental Consents 48
6.4 Reasonable Efforts 49
6.5 Accounts and Powers of Attorney; Insurance Matters 49
6.6 Other Confidentiality Agreements 49
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
6.7 Non-Transferability 50
6.8 Permit Transfer 51
6.9 Acquired Unsettled Accounts 52
6.10 Liabilities and Assets 52
6.11 Balance Sheet 53
6.12 Insurance Rebates 53
6.13 Post-Signing Delivery 53
6.14 Recourse Arrangements 53
ARTICLE VII
COVENANTS OF THE PURCHASER.................................... 53
7.1 HSR Notification; Other Governmental Consents 53
7.2 Reasonable Efforts 53
7.3 Parent Guaranties 54
7.4 Access; Retention of Records 54
7.5 Confidentiality 54
7.6 Permits 54
ARTICLE VIII
CONDITIONS TO CLOSING......................................... 55
8.1 Conditions to the Obligations of the Purchaser 55
(a) Compliance; Warranties True 55
(b) Seller Certificates 55
(c) Legal Opinions 55
(d) HSR Act 55
(e) Governmental Consents, Approvals, etc. 56
(f) Related Agreements 56
(g) Material Adverse Change 56
(h) Resolutions and Related Documents 56
(i) No Orders 56
(j) Untitled 57
8.2 Conditions to the Obligations of the Seller 57
(a) Compliance; Warranties True 57
(b) Purchaser's Certificate 57
(c) Legal Opinion 57
(d) HSR Act 57
(e) Related Instruments 57
(f) No Orders 57
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(g) Resolutions and Related Documents 58
(h) Other Closing Transactions 58
ARTICLE IX
NONCOMPETITION COVENANT........................................ 58
9.1 Noncompetition Covenant 58
9.2 Scope 60
9.3 Remedy for Breach 60
ARTICLE X
EMPLOYEES; EMPLOYEE BENEFITS...................................
10.1 Offer of Employment 60
10.2 Service Crediting 62
10.3 401(k) Plan 62
10.4 Medical, Dental and Life Insurance Program 63
10.5 Long Term and Short Term Disability Programs 63
10.6 Educational Assistance 64
10.7 Amendment or Termination Plans 64
10.8 Bonus 64
ARTICLE XI
TERMINATION.................................................... 64
11.1 Grounds for Termination 64
11.2 Effect of Termination 65
ARTICLE XII
EXTENT AND SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS; INDEMNIFICATION...................... 66
12.1 Survival; Remedy for Breach 66
12.2 Indemnification by the Seller 66
12.3 Indemnification by the Purchaser 68
12.4 Procedures Governing Indemnification 69
ARTICLE XIII
DISPUTE RESOLUTION............................................. 72
13.1 General 72
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
13.2 Procedures Governing Dispute Resolution 72
13.3 Continuation of Commitments; Specific
Performance 74
ARTICLE XIV
MISCELLANEOUS.......................................................................................... 74
14.1 Notices 74
14.2 Expenses . 75
14.3 Bulk Sales 75
14.4 Successors and Assigns 75
14.5 No Third Party Beneficiaries 76
14.6 Entire Agreement; Waiver; Amendment 76
14.7 Public Statements 76
14.8 Severability 77
14.9 Certain Expenses; Transfer Taxes; Recording and
Filing Fees; Proration of Certain Taxes 77
14.10 Counterparts 78
14.11 Necessary and Desirable Actions 78
14.12 Tax Matters 78
(a) Section 338 Elections and Forms 78
(b) Tax Indemnification by Seller 79
(c) Tax Indemnity by Purchaser 79
(d) Allocation of Certain Taxes 80
(e) Filing Responsibility 80
(f) Refunds 81
(g) Cooperation and Exchange of Information 81
(h) Definitions 82
14.13 Forum Selection and Consent to Jurisdiction 83
14.14 Governing Law 83
14.15 Waiver of Jury Trial 83
ARTICLE XV
GUARANTIES............................................................................................. 84
15.1 Guaranty of the WFC Parent 84
15.2 Guaranty of the Purchaser's Parent 84
</TABLE>
-5-
<PAGE>
EXHIBITS
Exhibit A - Shared Facilities and Transition Services
Agreement
Exhibit B - Trademark License Agreement
Exhibit 12.2 - Section 4.8
SCHEDULES
Schedule 1.12 - Client Contracts
Schedule 1.16 - Closing Payment Example
Schedule 1.49 - Owned Property
Schedule 1.55 - Premium Amount Methodology
Schedule 1.55(a) - Premium Amount Example
Schedule 1.66 - Knowledge of Seller and WFC Parent
Schedule 1.71 - WFC Asset Companies
Schedule 1.73 - WFC Stock Companies
Schedule 2.2(a)(ix) - Prepaid Expenses Example
Schedule 2.3(g) - Excluded Real Property
Schedule 2.3(h) - Excluded Contracts
Schedule 2.3(i) - Excluded Receivables
Schedule 2.3(j) - Excluded Accounts
Schedule 2.3(p) - Excluded Employee Arrangements
Schedule 2.3(y) - Other Excluded Assets
Schedule 2.4(a)(ii) - Certain Liabilities
Schedule 2.4(a)(iv) - Lease Liabilities
Schedule 3.1 - Adjustments
Schedule 4.1 - Foreign Qualifications
Schedule 4.3 - Conflicts
Schedule 4.4 - Contracts
Schedule 4.5 - Financial Statements
Schedule 4.5(b) - Certain Transactions
Schedule 4.6 - Permitted Encumbrances
Schedule 4.7 - Matters Relating to WFC Stock Companies
Schedule 4.8 - Contracts and Receivables
Schedule 4.9 - Leases
Schedule 4.10 - Litigation
Schedule 4.12 - Insurance
Schedule 4.13 - Benefit Plans
Schedule 4.14 - Contracts and Commitments
-6-
<PAGE>
Schedule 4.15 - Permits
Schedule 4.16 - Compliance with Laws
Schedule 4.18 - Environmental Matters
Schedule 5.3 - Conflicts
Schedule 6.1 - Conduct of Business
Schedule 8.1(j) - Consents
Schedule 10.1(a) - Employees relating to the Business
Schedule 10.1(b) - Employees on Short Term Disability
Schedule 12.2 - Certain Contract and Receivable Matters
Schedule 14.12 - Allocation of Trademark License Agreement
-7-
<PAGE>
Asset Purchase Agreement
------------------------
This Asset Purchase Agreement, dated September 17, 1997, is entered
into by and among Whirlpool Financial Corporation (the "Seller"), Transamerica
Distribution Finance Corporation (the "Purchaser"), Whirlpool Corporation ("WFC
Parent"), and Transamerica Commercial Finance Corporation, I ("Purchaser's
Parent") (Purchaser's Parent is a party solely for the purposes of being bound
by the provisions of Articles V and XV hereof and WFC Parent is a party solely
for the purposes of being bound by the provisions of Articles IV, VI and XV
hereof).
W I T N E S S E T H:
-------------------
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller certain of the assets of the
Business (as hereinafter defined), including (1) the assets of the Seller's
inventory finance division and consumer finance division, (2) certain assets of
the Seller's international finance group and (3) certain other assets of the
Seller and to assume certain liabilities of the Seller;
WHEREAS, the WFC Parent and the Purchaser's Parent desire to guaranty
the obligations and liabilities of the Seller and the Purchaser, respectively,
under this Agreement;
WHEREAS, the WFC Parent and the Purchaser intend to enter into a
Strategic Alliance Services Agreement which is an integral part of and is
essential to the acquisition contemplated by this Agreement; and
NOW, THEREFORE, in consideration of the premises and of the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties agree as follows:
ARTICLE I
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "AAA" is defined in Section 13.2(e).
1.2 "Account Debtor" means, with respect to a Receivable, the obligor
thereunder.
<PAGE>
1.3 "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlled by, controlling or under common control with
such Person, including but not limited to majority-owned subsidiaries.
1.4 "Agreement" means this Asset Purchase Agreement, including the
Schedules and Exhibits attached hereto, and any restatement hereof and any
supplement, amendment or modification hereto made in accordance with the terms
hereof.
1.5 "Asia" means the continent of Asia and the islands located in the
Pacific Ocean west of (and exclusive of) Hawaii, including the countries of
Australia, Japan, China, India, Pakistan, New Zealand, Thailand, Korea, the
Philippines, Sri Lanka, Taiwan and Vietnam, but excluding any United States
territories and Russia.
1.6 "Assets" are defined in Section 2.1.
1.7 "Assumed Liabilities" are defined in Section 2.4(a).
1.8 A Person shall be deemed "Bankrupt" if it commences a voluntary case
concerning it under Title 11 of the United States Code as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code") or any similar foreign
law; or an involuntary case is commenced against the Person under the Bankruptcy
Code or any similar foreign law and relief is ordered against such customer or
the petition is controverted but is not dismissed within 90 days after the
commencement of the case; such Person becomes insolvent or is unable to pay its
debts within the meaning of applicable Law or stops making payments generally or
declares a moratorium or suspension of payments with respect to all or a
substantial part of its debts or ceases to conduct its business or enters into
any composition or other arrangement with its creditors generally (or any class
of them); or a custodian (as defined in the Bankruptcy Code or any similar
foreign law) is appointed for, or takes charge of, all or a substantial part of
the property of the Person; or the Person commences any other proceeding under
any reorganization, arrangement, readjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar Law of any jurisdiction
whether now or hereafter in effect relating to such Person or there is commenced
against the Person any such proceeding which remains undismissed for a period of
90 days or the Person is adjudicated insolvent or bankrupt; or the Person fails
to controvert in a timely manner any petition or action filed against it under
the Bankruptcy Code or any similar foreign law or any such proceeding or any
order of relief or other order approving any such case or proceeding or the
appointment of any custodian or the like of or for it or any substantial part of
its property or suffers any such appointment to continue undischarged or
unstayed for a period of 90 days; or the Person makes a general assignment for
the benefit of creditors; or any action is taken by such Person for the purpose
of effecting any of the foregoing.
<PAGE>
1.9 "Benefit Plan" is defined in Section 4.13(a).
1.10 "Business" means the following business of the Seller and its
Affiliates: (a) inventory finance division, including the business of providing
floorplan financing and display programs to manufacturers, retailers,
distributors and dealers; (b) consumer finance division, including the business
of providing revolving charge, private label credit cards and installment
contract programs, the operation of WFNB and any commercial credit card program;
and (c) the factoring, receivable management and inventory and display financing
services business in Europe and, to the extent in existence, Argentina and
Mexico, as conducted by the Seller's international finance group and the WFC
Companies. The term "Business" excludes the Excluded Assets and the Excluded
Businesses and the operation thereof.
1.11 "Business Day" means any day other than a Saturday or Sunday or any
legal holiday on which banks in Chicago, Illinois are authorized or required to
be closed.
1.12 "Client Contract" means a Contract or a set of Contracts between the
Seller, WFNB or a WFC Company and a manufacturer, distributor, dealer or
retailer client thereof which establishes the relationship (including with
respect to recourse against such client) pursuant to which the Seller, WFNB, or
a WFC Company agrees to extend credit to such client or such client's
distributors, dealers, retailers or consumers, including in connection with the
acquisition of goods from or by such client, or to purchase retail installment
sale contracts held by such client or such client's distributors, dealers or
retailers and which may include early payment discounts, free floor plan, rate
participation, volume rebate and any other incentive arrangements. Schedule 1.12
has been provided to Purchaser and is an accurate and complete listing, as of
August 31, 1997, of the Persons who are parties to Client Contracts.
1.13 "Closing" and "Closing Date" are defined in Section 2.6.
1.14 "Closing Balance Sheet" is defined in Section 3.1.
1.15 "Closing Net Asset Value" is defined in Section 3.1.
1.16 "Closing Payment" means the book value at September 30, 1997 of the
Assets minus the book value of the Assumed Liabilities at September 30, 1997
plus the Premium Amount. An example of how the Closing Payment would have been
calculated if the Closing Date were June 30, 1997 is attached, for illustrative
purposes only, as Schedule 1.16 hereto.
1.17 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
<PAGE>
1.18 "Competitive Activity" is defined in Section 9.1.
1.19 "Confidentiality Agreement" means the Confidentiality Agreement dated
August 19, 1997 between the Seller and Transamerica Corporation.
1.20 "Contract" means any contract, lease, finance lease, operating lease,
sales order, purchase order, security agreement, indenture, mortgage, note,
bond, software license agreement, installment sales contract, dealer stocking
agreement, chattel paper, factoring agreement, invoice discounting agreement,
revolving loan credit application, funding approval, invoice, transaction
statement, EDI agreement, lockbox agreement, instrument, license agreement or
other agreement or binding undertaking and any amendment, modification,
forbearance or supplement to any of the foregoing.
1.21 "Employees" are defined in Section 10.1.
1.22 "Employment Contract" means any employment contract, retention
agreement, employee non-competition agreement, employee confidentiality
agreement and collective bargaining agreement.
1.23 "Encumbrance" means any lien, pledge, charge, mortgage, security
interest or other adverse claim of any kind or description, whether or not of
record.
1.24 "Environmental Law" means any Law relating to environmental protection
or occupational safety or health or the use, generation, manufacture, storage,
treatment, management, discharge, release, disposal, transportation or other
handling of any substance, chemical, waste or other material which is listed,
defined or otherwise identified in such Law as hazardous, toxic or dangerous,
including asbestos, PCBs, petroleum, petroleum products or by-products, crude
oil, natural gas, natural gas liquids or synthetic gas usable for fuel.
1.25 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.26 "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is a member of a "controlled group" of which the Seller is a
member or under "common control" with the Seller (within the meaning of Section
414(b) and (c) of the Code).
1.27 "Europe" means all of the countries listed on Schedule 2.1 of the
Strategic Alliance Services Agreement.
<PAGE>
1.28 "Excluded Accounts" are defined in Section 2.3(j).
1.29 "Excluded Assets" are defined in Section 2.3.
1.30 "Excluded Businesses" mean (a) the contracts, accounts, operations,
businesses and other rights and obligations arising from or in connection with
the operation of the Excluded Assets, (b) open accounts and consumer finance
liquidating receivables, including all accounts, activities, operations,
liabilities and obligations relating thereto, and (c) all accounts, plans,
proposals, activities, opportunities and operations, liabilities and obligations
constituting or necessary to the operation of the Seller's aerospace finance
division, asset management division and Asian finance division, including the
provision of accounts receivable management, factoring and retailer financial
marketing programs (including stock and display plans) and the provision of
consumer financing in or to customers located in Asia.
1.31 "Excluded Contracts" are defined in Section 2.3(h).
1.32 "Excluded Liabilities" are defined in Section 2.5.
1.33 "Excluded Real Property" is defined in Section 2.3(g).
1.34 "Excluded Receivables" are defined in Section 2.3(i).
1.35 "Financial Statements" mean the balance sheet of the Business, dated
June 30, 1997, the Consolidated Statement of Earnings of the Seller, dated
December 31, 1996, and the Consolidated Statement of Earnings of the Business
for the period January 1, 1997 through June 30, 1997, each attached hereto as
Schedule 4.5.
1.36 "Foreign Approvals" is defined in Section 2.8(a).
1.37 "GAAP" means United States generally accepted accounting principles.
1.38 "Governmental Authority" means any foreign or domestic federal, state,
provincial, local or other governmental subdivision, department, commission,
board, bureau, court, legislature, agency, instrumentality or other governmental
authority.
1.39 "Hazardous Material" means any substance, material, waste, pollutant
or contaminant listed or defined as hazardous or toxic under any Environmental
Law.
1.40 "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
<PAGE>
1.41 "Independent Accounting Firm" is defined in Section 3.2(c).
1.42 "Insurance Collateral" means any credit life, casualty or similar
insurance policies (including credit unemployment, credit disability, inventory
finance property and casualty and keyman policies) obtained by Persons who are
provided financing by the Seller or any WFC Company or WFNB or pursuant to any
financing arrangement purchased by the Seller or any WFC Company or WFNB
(including consumers required to obtain insurance under retail installment sale
contracts purchased by the Seller or any WFC Company or WFNB).
1.43 "Law" means any foreign or domestic federal, state, provincial or
local or other statute, law, ordinance, rule, published administrative
interpretation, regulation, order, writ, injunction, directive, judgment, decree
or other requirement of any Governmental Authority.
1.44 "Leased Property" means the Real Property subject to the leases listed
on Schedule 4.9.
1.45 "Loss" or "Losses" means any and all damages, losses, actions,
proceedings, causes of action, obligations, liabilities, claims, encumbrances,
penalties, demands, assessments, judgments, costs and expenses including,
without limitation, court costs and reasonable attorneys' and consultants' fees
and costs of litigation, but shall not include consequential, punitive or
special damages.
1.46 "Material Adverse Effect" means any change in or effect on the
Business, the Seller, WFNB or any of the WFC Companies that is, individually or
in the aggregate, materially adverse to the business, assets, liabilities,
financial condition or results of operations of the Business, taken as a whole.
1.47 "Operating Assets" mean all equipment, computer software and hardware,
vehicles, furniture, phone, facsimile, imaging equipment, office equipment and
other communication systems and equipment.
1.48 "Operating Data" means all records, marketing materials and
information, financial data, credit, pricing and payment terms, floor checks,
portfolio control comments and codes, policies and procedures, credit and
collection information, pass codes, source codes, object codes, technical
information, confidential information, price lists, sales records, customer
lists and files and other proprietary information.
1.49 "Owned Property" means the Real Property listed on Schedule 1.49.
<PAGE>
1.50 "Parent Guarantees" mean all guarantees, agreements, pledges,
mortgages, letters of credit, bonds or other instruments of the Seller
guaranteeing, securing or becoming otherwise obligated with respect to any
actual or contingent liabilities of the Business, the WFC Companies or WFNB.
1.51 "Permit" means any permit, license, authorization, registration,
qualification, approval or franchise issued or granted by or effected with any
Governmental Authority that is necessary under applicable Law to conduct the
Business or operate the Assets.
1.52 "Permitted Encumbrances" is defined in Section 4.6(a).
1.53 "Person" means any individual, sole proprietorship, firm,
corporation, partnership, limited liability company, trust, unincorporated
association or other entity.
1.54 "Post-Closing Interest Rate" means 5.5%.
1.55 "Premium Amount" means the sum of (A) (i) the aggregate Receivables
in each of the three Receivables Categories (less all unearned finance charges
(fees and discount income), FAS 91 balances and allowance for loss and consumer
deferred adjustments) as of September 30, 1997, times (ii) the Relevant
Receivable Premium, plus (B) one-half of the sum of the FAS 91 balances as of
September 30, 1997 for each Receivable Category. Schedule 1.55 demonstrates the
methodology pursuant to which the Premium Amount is determined. Schedule 1.55(a)
sets forth, for illustrative purposes only, how the Premium Amount would have
been calculated as of June 30, 1997.
1.56 "Real Property" means real property, including all privileges and
easements appurtenant thereto, and any and all buildings, plants, facilities,
installations, fixtures and other structures and improvements situated thereon
or attached thereto.
1.57 "Receivable" means an account receivable, trade receivable, floorplan
receivable, retail installment sale contract receivable, note receivable,
finance lease receivable, operating lease receivable or other account or right
to payment (whether of principal, interest or other charges) generated through
the extension of credit to distributors, dealers, retailers, consumers and other
Persons, or through the purchase of retail installment sales contracts from
dealers, whether conditional or unconditional, or through the leasing of
equipment, but not any amount due or other right under or with respect to the
Excluded Accounts, the Excluded Receivables, the Excluded Assets and the
Excluded Businesses.
1.58 "Receivable Collateral Document" means any Contract, instrument or
other document pursuant to which any Encumbrance was granted or any other
collateral was furnished by or on behalf of an Account Debtor.
<PAGE>
1.59 "Receivable Credit Support Document" means, with respect to any
Receivable and Receivable Document, any guaranty, letter of credit, security
agreement, mortgage or other form of credit support given or any other
collateral which was furnished by or on behalf of a Person other than the
Account Debtor, but not including any Client Contract.
1.60 "Receivable Document" means any Contract, instrument or other
document evidencing a Receivable owed to the Seller or any of its Subsidiaries
or pursuant to which a Receivable owing to the Seller or any of its Subsidiaries
was or may be generated.
1.61 "Relevant Receivable Premium" means (a) for Receivables arising from
the inventory finance division of the Business, 18.4026%; (b) for Receivables
arising from the consumer finance division of the Business, 5.5255%; and (c) for
Receivables arising from the international finance group of the Business,
15.5255%. Each of clauses (a), (b) and (c) of the preceding sentence refers to a
separate "Receivables Category" for purposes of the definition of "Premium
Amount."
1.62 "Shared Facilities and Transition Services Agreement" means the
shared facilities and transition services agreement substantially in the form
set forth on Exhibit A.
1.63 "Subsidiary" means with respect to any Person, any corporation,
partnership, joint venture, limited liability company, business trust or other
entity, of which such Person, directly or indirectly, owns or controls at least
50% of the securities or other interests entitled to vote in the election of
directors or others performing similar functions with respect to such
corporation, partnership, joint venture, limited liability company, business
trust or other entity.
1.64 "Taxes" mean all taxes, charges, fees, duties, levies or other
assessments, including income, gross receipts, net proceeds, ad valorem,
turnover, real and personal property (tangible and intangible), sales, use,
franchise, excise, value added, stamp, leasing, lease, user, transfer, excess
profits, occupational, interest equalization, windfall profits, severance and
employees' income withholding, unemployment and Social Security taxes, which are
imposed by any Governmental Authority, including any interest, penalties or
additions to tax related thereto, whether or not disputed.
1.65 "Territory" is defined in Section 9.1(c).
1.66 "to the knowledge", of the Seller and/or WFC Parent means the actual
knowledge of the Persons listed on Schedule 1.66 after due inquiry.
<PAGE>
1.67 "Trademark License Agreement" means the trademark license agreement
substantially in the form of Exhibit B to be entered into at Closing between WFC
Parent (or a wholly-owned subsidiary of WFC Parent having ownership rights in
the trademarks subject thereto) and the Purchaser, which provides for limited
use by the Purchaser and its Affiliates of certain trademarks.
1.68 "Transfer Instrument" means such customary bills of sale,
assignments, assignment and assumption agreements, special warranty deeds with
respect to the Owned Property, notice filings, tax declarations and other
statements or filings with any Governmental Authority as may be required for the
sale of the Assets and assumption of the Assumed Liabilities, each as
contemplated by Article II, and other instruments of sale, conveyance, transfer,
assignment and assumption and, if applicable, limited powers of attorney as may
be necessary or appropriate for the execution, delivery and recordation or
filing of Transfer Instruments, as prepared by the Purchaser (or, as to matters
relating to assumption of the Assumed Liabilities, by the Seller), in form and
substance reasonably satisfactory to the Seller (or, as to matters relating to
assumption of the Assumed Liabilities, to the Purchaser), and as shall be
required to vest in the Purchaser title to the Assets and as shall be required
to evidence the Purchaser's agreements to assume, pay, perform, fulfill and
discharge the Assumed Liabilities.
1.69 "WARN" means the federal Worker Adjustment and Retraining
Notification Act of 1988, as amended.
1.70 "Transferred Employees" is defined in Section 10.1.
1.71 "WFC Asset Company" means any of, and "WFC Asset Companies" means all
of the entities set forth on Schedule 1.71.
1.72 "WFC Company" means any of, and "WFC Companies" means all of, the WFC
Assets Companies and the WFC Stock Companies.
1.73 "WFC Stock Company" means any of, and "WFC Stock Companies" means all
of the entities set forth on Schedule 1.73.
1.74 "WFNB" means Whirlpool Financial National Bank, a nationally
chartered bank based in Delaware.
1.75 "WFNB Premium" is defined in Section 2.7(a).
1.76 "WFNB Purchase" is defined in Section 2.7(a).
<PAGE>
1.77 "WFNB Shares" means 1,000 shares, $100 par value per share, of common
stock of WFNB.
Interpretation. The headings preceding the text of Articles, Sections and
subsections and Schedules included in this Agreement are for convenience only
and shall not be deemed part of this Agreement or be given any effect in
interpreting this Agreement. The use of the terms "including" or "include"
shall, in all cases, mean "including, without limitation," and "include, without
limitation," respectively. The language in all parts of this Agreement shall be
construed, in all cases, according to its fair meaning. The parties acknowledge
that each party and its counsel have reviewed and revised this Agreement and
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale. Upon the terms, and subject to the conditions, of
this Agreement, the Seller agrees to sell, assign, transfer, convey and deliver
to the Purchaser, and the Purchaser agrees to purchase from the Seller, all of
the Business and assets related to the Business, as a going concern, together
with all of the properties, rights, interests, shares of stock or other equity
interests in the WFC Stock Companies and goodwill of the Seller and the
Affiliates of the Seller associated therewith, tangible and intangible, real,
personal and mixed, wherever located, whether now existing or hereafter
acquired, to the extent of their respective ownership interests as the same
exist on the Closing Date (except for the Excluded Assets), which, together with
the assets, properties, interests and rights (other than any which are Excluded
Assets) of the WFC Companies are herein collectively referred to as the
"Assets," free and clear of Encumbrances, other than Permitted Encumbrances, and
the Purchaser agrees to assume the Assumed Liabilities of the Seller, at and as
of the Closing.
2.2 The Assets.
----------
(a) Subject to Section 2.2(b) and Section 2.3, the Assets shall
include, without limitation, the right, title and interest of Seller and the WFC
Companies in and to any of the following, but in each case excluding the
Excluded Assets:
(i) all assets of, or used in, the inventory finance division of
the Seller and the WFC Asset Companies, tangible or intangible, real or
personal, including all Contracts, Client Contracts, Operating Assets,
Operating Data (except to the extent transfer is restricted by Law),
Receivables, all accounts that
<PAGE>
have been charged off, Receivable Credit Support Documents, Receivable
Collateral Documents, Receivable Documents, Permits, goodwill and Insurance
Collateral;
(ii) all assets of or used in the consumer finance division of
the Seller and the WFC Asset Companies, tangible or intangible, real or
personal, including all Contracts, Client Contracts, Operating Assets,
Operating Data (except to the extent transfer is restricted by Law),
Receivables, all accounts that have been charged off, Receivable Credit
Support Documents, Receivable Documents, Receivable Collateral Documents,
Permits, goodwill, Insurance Collateral, if any, rights as licensee with
respect to any private label credit card program and the WFNB Shares;
(iii) all assets of or used in the international finance group
of the Seller and the WFC Asset Companies, tangible or intangible, real or
personal, to the extent, and only to the extent, used in the conduct of the
Business in Europe, Mexico and Argentina, including all Contracts, Client
Contracts, Employment Contracts, Operating Assets, Operating Data (except
to the extent transfer is restricted by applicable law), Receivables, all
accounts that have been charged off, Receivable Credit Support Documents,
Receivable Collateral Documents, Receivable Documents, Permits, goodwill,
Insurance Collateral and all of the outstanding capital stock of the WFC
Stock Companies;
(iv) the Receivables, Receivable Credit Support Documents,
Receivable Collateral Documents and Receivable Documents;
(v) all furniture, fixtures and equipment; all computers,
computer hardware and peripherals; office supplies; and vehicles, in each
case that are related to the Business (other than 140 pieces of artwork);
(vi) the Leased Property;
(vii) any and all insurance claims and rights with respect to
injury, damage or loss occurring on or prior to the Closing Date under all
current and past insurance policies and contracts of the Seller or its
Affiliates and proceeds thereof, to the extent assignable and relating to
an Assumed Liability;
(viii) any claim (other than insurance claims which are covered
by clause (vii)), counterclaim, cross claim, set-off and other claim in the
nature of indemnification or contribution, and rights to the extent
relating to any Assets or Assumed Liabilities;
<PAGE>
(ix) all prepaid and similar items, including without
limitation, deferred charges, deposits, rebates and discounts from
customers and advance payments related to the Business. (An example of such
prepaid and similar items, as of June 30, 1997, is set forth, for
illustrative purposes only, on Schedule 2.2(a)(ix));
(x) all legal and credit files pertaining to all Contracts
and Client Contracts, including all financial analyses, credit
applications, internal memos and external correspondence (to the extent
permitted by law);
(xi) all unapplied credit memos with respect to, among other
matters, a right of credit or set off provided by a manufacturer in respect
of products or services supplied to a dealer but not utilized as at the
Closing Date to reduce the balance owing by the dealer;
(xii) all balances owing to the Seller or any WFC Asset Company
under any Contract or any Client Contract, in each case with respect to the
Business;
(xiii) all unapplied funds of the Seller or any WFC Asset
Company (including funds received by the Seller or any WFC Asset Company
and not yet applied to a specific amount owing by a dealer or
manufacturer);
(xiv) all returns (i.e., inventory identified by the Seller or
any WFC Asset Company as returned by a dealer to a manufacturer for credit
and for which credit or payment has not yet been received in full by the
Seller or WFC Asset Company from the manufacturer as at the Closing Date);
(xv) all deferred income (i.e., the amount in respect of any
discounts which were deducted from invoices purchased from a manufacturer
to cover some or all of the carrying cost for any free floor period or
otherwise, in respect of any dealers);
(xvi) all open approvals (conditional obligations of the Seller
or any WFC Asset Company for approved but not yet funded invoices from
manufacturers);
(xvii) any contract under which the Seller or any WFC Asset
Company may arrange for dealers to obtain insurance coverage from a
licensed insurer;
<PAGE>
(xviii) all manufacturer invoices and rights granted to the
Seller or any WFC Asset Company in inventory supplied by a manufacturer to
the dealer;
(xix) all rights under any and all confidentiality agreements
entered into by the Seller or any WFC Asset Company with any third party
(other than exclusively relating to the Excluded Businesses);
(xx) the unsettled accounts with respect to the Business which
the parties agree have a reasonable prospect of being paid in full (the
"Acquired Unsettled Accounts");
(xxi) the goodwill and going concern value and other intangible
assets, if any, that are related to the Business;
(xxii) the contra liability offsetting the certificate of
deposit and short-term debt of WFNB described in Section 6.10;
(xxiii) the Visionplus software and other software that is
included in the Financial Statements; and
(xxiv) any other assets related to or primarily used in the
Business.
(b) Anything in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Contract or Client
Contract, or any claim, right or benefit of the Seller or any of its Affiliates
thereunder or resulting therefrom, if an assignment thereof, without the consent
of a third Person, would constitute a breach or violation thereof. If a consent
to the assignment of a Contract or Client Contract is not obtained prior to the
Closing or if an attempted assignment of a Contract or Client Contract is
ineffective for any other reason, the Seller shall cooperate with the Purchaser
in continuing to attempt to obtain such consent or otherwise procure an
effective assignment of such Contract or Client Contract and, pending the
obtaining of such consent or the procurement of such assignment, shall implement
any commercially reasonable arrangement requested by the Purchaser to provide
the Purchaser the benefits under any such Contracts or Client Contracts;
provided, however, that the Seller shall bear the costs and expenses incurred in
connection with establishing any such arrangement and thereafter the Purchaser
shall, insofar as is reasonable, otherwise assume the economic burdens of such
Contract or Client Contract (either directly or by reimbursement of the Seller).
If, with respect to any such Contract or Client Contract, the consent to
assignment is obtained or an effective assignment can otherwise be made
following the Closing, the Seller shall promptly assign or cause to be assigned
to the
<PAGE>
Purchaser all of its right, title and interest in and to such Contract or Client
Contract pursuant to a Transfer Instrument substantially similar in form and
substance to the Transfer Instrument used for the assignment of similar
Contracts or Client Contracts at the Closing. If a consent to the assignment of
a Contract or Client Contract is not obtained prior to the Closing or if an
attempted assignment is ineffective for any other reason and the Purchaser
requests that it not receive the benefits thereof, or if an arrangement to
provide such benefits is not feasible, the Seller, in consultation with the
Purchaser, shall terminate or wind-up such Contract or Client Contract and the
Seller shall be responsible for all costs and expenses incurred by the Seller as
a result thereof.
The Purchaser acknowledges that all or some of the Permits used by the
Seller and its Affiliates in the Business may not be transferable. Subject to
the conditions set forth herein, the Purchaser assumes (i) the risk that any or
all such Permits are not transferable and (ii) the obligation to obtain all
requisite authorizations, approvals and permits for its operation of the
Business, performance of the Assumed Liabilities and ownership of the Assets.
2.3 Excluded Assets. Notwithstanding Section 2.2(a) or anything in this
Agreement to the contrary, the right, title and interest of the Seller and its
Affiliates in and to the following (the "Excluded Assets") shall be retained by
the Seller and are not being sold, assigned, transferred, conveyed or delivered
to the Purchaser (whether or not held by the Seller or an Affiliate thereof,
including any WFC Stock Company or WFNB):
(a) any claim (including any claim for Tax refunds with respect to
any Tax return of the Seller), counterclaim, cross claim, setoff and other claim
in the nature of indemnification or contribution, and rights to the extent
relating to any Excluded Asset, the Excluded Receivables, the Excluded
Businesses or any Excluded Liability;
(b) any Permit and, subject to Section 2.2(b), any Contract or Client
Contract that cannot be effectively assigned to the Purchaser at the Closing, to
the extent and for so long as it is not assigned to the Purchaser;
(c) all copyrights, service marks, trademarks, trade names, trade
dress, logos, product names, service names and all applications therefor and
registrations thereof, other than the Purchaser's rights under the Trademark
License Agreement and any copyright or other rights of the Seller or any of its
Affiliates in the any software which is an Asset set forth in Section
2.2(a)(xxii).
(d) except as provided in Section 2.2(a), all insurance policies
other than those constituting assignable Insurance Collateral, if any;
<PAGE>
(e) all securities representing an ownership interest in any entity
other than the WFC Stock Companies and WFNB;
(f) all cash and amounts on deposit with banks or other financial
institutions, except to the extent reflected on the Closing Balance Sheet or to
the extent constituting collateral for the obligations of any Account Debtor in
respect of an Asset;
(g) the Real Property listed or described on Schedule 2.3(g) (the
"Excluded Real Property");
(h) the Client Contracts and other Contracts listed on Schedule
2.3(h) (the "Excluded Contracts") and any rights thereunder, including the right
to receive any payments thereunder;
(i) the receivables listed on Schedule 2.3(i) (and related Receivable
Documents, Receivable Collateral Documents and Receivable Credit Support
Documents) (the "Excluded Receivables");
(j) all rights, goodwill or opportunities with respect to the
accounts and business opportunities listed on Schedule 2.3(j) (the "Excluded
Accounts") and all Client Contracts, Operating Data, Receivables, Receivable
Credit Support Documents and Receivable Documents relating thereto;
(k) the tax records of the Seller and its Affiliates relating to the
Excluded Assets or Excluded Liabilities, in whatever form or media embodied, and
the historical financial records relating to the Excluded Assets or Excluded
Liabilities, in whatever form or media embodied (provided, that the Seller shall
provide copies of all such records to the Purchaser as reasonably available and
necessary or appropriate for the Purchaser to comply with applicable Law and
financial reporting requirements);
(l) all assets of the Seller and its Affiliates' international
finance group, tangible or intangible, real or personal, to the extent, and only
to the extent, primarily used in the conduct by the Seller and its Affiliates of
the Seller's Asian finance division, including the factoring, receivable
management and inventory and display financing services business in Asia,
including all accounts that should have been, but were not, charged off in
accordance with the Seller's policies and practices, all nonearning accounts and
accounts relating to goods sold out of trust, Contracts, Client Contracts,
Employment Contracts, Owned Property, Operating Assets, Operating Data,
Receivables, Receivable Credit Support Documents, Receivable Collateral
Documents, Receivable Documents, Permits and goodwill thereof;
<PAGE>
(m) with respect to the inventory finance division of the Seller and
its Affiliates and the international finance group of the Seller and its
Affiliates: all nonearning accounts; all accounts that should have been, but
were not, charged off in accordance with the Seller's policies and practices;
all accounts with respect to which the counterparty is Bankrupt; all accounts
with respect to which an unreconcilable dispute exists between the Seller or its
Affiliates, on the one hand, and the counterparty thereto, on the other hand;
all accounts on which the counterparty currently refuses to pay; all accounts
with respect to which Seller, WFC Parent or a WFC Company, as applicable, has
begun legal proceedings or taken similar steps; and all accounts relating to
goods sold out of trust;
(n) with respect to the consumer finance division of Seller and its
Affiliates: all nonearning accounts; all accounts with respect to which the
counterparty is Bankrupt; all accounts that are blocked in accordance with the
Seller's practice; all accounts that should have been, but were not, charged off
in accordance with the Seller's policies and practices; and all accounts
relating to goods sold out of trust;
(o) any assets, properties and rights of the Seller and its
Affiliates (including all Operating Data), to the extent primarily related to
the Excluded Businesses, including all right, title and interest in and to
Whirlpool Financial India (Private) Limited, Whirlpool Financial (Mauritius)
Limited, Whirlpool Apple Consumer Credit (Private) Limited, and WFC (Thailand)
Co., Ltd.;
(p) the employee Contracts, arrangements and plans listed on Schedule
2.3(p) and all bonus accruals with respect to employees of the Business;
(q) any unamortized prepaid pension expense as of the Closing Date;
(r) this Agreement and the Schedules, Exhibits and other instruments
contemplated herein;
(s) all prepaid and similar items, including without limitation all
prepaid expenses, deferred charges, deposits, rebates and discounts from
customers and advance payments related to the Business made or incurred in
respect of any Excluded Asset or Excluded Liability;
(t) all Operating Data relating to the Excluded Assets or extension
of credit terms by WFC Parent or its Affiliates on open account;
(u) any and all claims of Seller or any of its Affiliates for
refunds, credits, carrybacks or carryforwards in connection with any Taxes for
tax periods ending on or prior to the Closing Date and proceeds thereof;
<PAGE>
(v) all insurance rebates net of any losses with respect to the
consumer finance division of the Business and the inventory finance division of
the Business relating to periods prior to Closing paid following Closing;
(w) the unsettled accounts with respect to the Business which the
parties do not agree have a reasonable prospect of being paid in full;
(x) 140 pieces of artwork; and
(y) the assets listed in Schedule 2.3(y).
2.4 Assumed Liabilities. (a) On the Closing Date, the Purchaser shall
assume and agree to pay, perform and discharge as and when due all of the
following liabilities and obligations, whether fixed, absolute or contingent,
material or immaterial, matured or unmatured, incurred by the Seller and the WFC
Asset Companies, as the same exist on the Closing Date (except for the Excluded
Liabilities), which are herein collectively referred to as the "Assumed
Liabilities", and the Purchaser shall not assume any other liabilities or
obligations, whether fixed, absolute or contingent, material or immaterial,
matured or unmatured, whatsoever of the Seller or any of its Affiliates:
(i) except as specified in Section 2.5, all obligations and
liabilities of the Seller, whenever performable or arising, under any
Client Contracts or other Contracts, whether in effect on the date hereof
or entered into in accordance with Section 6.1 and in effect on the Closing
Date, which shall have been assigned to the Purchaser or as to which
satisfactory arrangements shall have been made in accordance with Section
2.2(b) to provide the Purchaser the benefits under such Client Contracts or
other Contracts;
(ii) all liabilities of the Seller in the categories specified
in Schedule 2.4(a)(ii) which are set forth in the Closing Balance Sheet to
the extent set forth thereon;
(iii) the obligations of the Seller expressly assumed or
otherwise undertaken by the Purchaser pursuant to Article X; and
(iv) all liabilities and obligations relating to the leases set
forth on Schedule 2.4(a)(iv) which arise (i) after the Closing or (ii) on
or before the Closing, only to the extent of any accrual therefor on the
Closing Balance Sheet.
2.5 Excluded Liabilities. Notwithstanding Section 2.4, the liabilities
and obligations of the Seller and its Affiliates (including the WFC Stock
Companies) which
<PAGE>
are not Assumed Liabilities (the "Excluded Liabilities") and thus which shall be
retained by the Seller and its Affiliates (excluding the WFC Stock Companies)
and shall not be assumed by the Purchaser (whether or not held by Purchaser or
an Affiliate thereof, including any WFC Stock Company) shall include, without
limitation:
(a) any liability or obligation of the Seller, the WFC Companies and
WFNB for any Taxes, other than any Taxes which the Purchaser has expressly
agreed to pay pursuant to this Agreement;
(b) any liability or obligation under or with respect to any debt or
equity securities including the Series A, Series B and Series C Preferred Stock
issued by the Seller;
(c) any liability or obligation arising in respect of any Excluded
Assets, including any existing or future liability or obligation resulting from
any legal, administrative or arbitration proceeding, suit or action of any
nature (collectively, an "Action") with respect thereto;
(d) any liability or obligation (i) to any Person as a result of any
personal injury sustained by such Person in connection with the conduct of the
Business prior to the Closing, (ii) to any employee of WFNB or any WFC Company
who is offered employment with the Purchaser in accordance with Section 10.1 and
who does not accept such employment and (iii) to any employee as a result of any
breach of the terms and conditions of employment of such employee with the
Seller, WFNB or any WFC Company occurring prior to the Closing or, to the extent
not related to a breach of such terms and conditions of employment, related to
the conduct of the Business prior to the Closing;
(e) the obligations of the Seller that are being retained pursuant to
Article X;
(f) all liabilities and obligations under Contracts and Client
Contracts which are not assigned or transferred to the Purchaser at the Closing
Date pursuant to this Agreement, except with respect to those Contracts and
Client Contracts as to which satisfactory arrangements shall have been made in
accordance with Section 2.2(b) to provide the Purchaser the benefits under such
Contracts and Client Contracts;
(g) all liabilities and obligations of or incurred by the Seller or
any of its Affiliates to the extent (i) arising out of the current or former
facilities or operations that are not included as an Asset, or (ii) not related
to the Business;
<PAGE>
(h) all liabilities and obligations relating to charitable
contributions and pledges of the Seller, WFC Parent, WFNB or any WFC Company;
(i) all liabilities and obligations to the extent arising out of
circumstances or events occurring or existing on or prior to the Closing Date
with respect to which written claims or Actions are made, presented or filed,
whether on or prior to or following the Closing Date, including, without
limitation, the claims and Actions identified on any of the Schedules and any
other Actions pending on or prior to the Closing Date, other than those arising
out of any Contract or Client Contract which is an Assumed Liability unless
arising out of an asserted violation of Law; and
(j) all liabilities and obligations (except to the extent
specifically provided with respect to severance pay in Section 10.1) under any
Benefit Plan (including, without limitation, any Benefit Plan in which the WFC
Stock Companies are a sponsor or participating employer).
2.6 Closing. The closing (the "Closing") of the purchase and sale of the
Assets hereunder shall, subject to the satisfaction of the conditions set forth
in Article VIII, take place at the offices of Mayer, Brown & Platt in Chicago,
Illinois, on the date that is the sooner of (x) the 15th of the month (or, if
not a Business Day, the next Business Day) during which satisfaction of the
conditions set forth in Article VIII occurs or (y) the last Business Day of the
month during which satisfaction of the conditions set forth in Article VIII
occurs, but in no event shall the parties be obligated to close until three
Business Days have transpired since the satisfaction of such conditions (the
date of the Closing being hereinafter called the "Closing Date"). At the Closing
(subject to Sections 2.7 and 2.8):
(i) The Purchaser shall pay to the Seller an amount in cash
equal to the Closing Payment less the sum of (a) $500,000 and, if Section
2.7 is inapplicable, (b) an amount (the "Delinquency Payment") equal to 40%
of the amount by which the Consumer Receivables that are delinquent 60 days
or more have increased from the date hereof to the applicable Closing Date
at which there shall occur the sale of the Consumer Receivables, if such
amount is a positive number by wire transfer of immediately available funds
to such bank account or accounts as may be designated in a writing
delivered to the Purchaser by the Seller, such writing to be delivered at
least two (2) Business Days prior to the Closing.
(ii) The Seller and the WFC Asset Companies shall execute and
deliver to the Purchaser such Transfer Instruments as may be required by
the Purchaser to be executed and delivered by the Seller and the WFC Asset
Companies and the Purchaser shall execute and deliver to the Seller and the
WFC Asset
<PAGE>
Companies such Transfer Instruments as may be required by the Seller to be
executed and delivered by the Purchaser.
(iii) The Seller and the WFC Asset Companies shall deliver to
the Purchaser stock certificates representing the shares of the outstanding
capital stock of the WFC Stock Companies and the WFNB Shares duly endorsed
in blank or accompanied by stock powers duly executed in blank and adequate
to transfer such shares.
(iv) The other executions, deliveries and actions contemplated
in Sections 8.1 and 8.2 shall be made.
2.7 WFNB Purchase
-------------
(a) If, at the time all other conditions to the consummation of the
transactions contemplated by this Agreement contained in Article VIII have been
satisfied or waived (other than those conditions or portions thereof applicable
to Section 2.8), the Purchaser has not obtained the approvals of the Office of
the Comptroller of the Currency and the Federal Deposit Insurance Corporation
which are required for the acquisition of the WFNB Shares (collectively, the
"OCC Approval"), then the parties agree promptly to take all actions necessary
to (i) consummate pursuant to this Article II the Closing and all other
transactions contemplated hereby (other than as contemplated by Section 2.8)
except the WFNB Purchase (as defined below), and reduce the Closing Payment by
an amount equal to the book value of WFNB and of the Receivables of the consumer
finance division of the Business (the "Consumer Receivables") included on the
balance sheet of the Business, dated September 30, 1997, reduced by the Assumed
Liabilities of WFNB and which arise in connection with the Consumer Receivables
as reflected on such balance sheet, plus an amount equal to the product of (x)
the Consumer Receivables included in the balance sheet of the Business, dated
September 30, 1997, multiplied by (y) the Relevant Receivable Premium (the "WFNB
Premium"), and (ii) delay the consummation of the purchase and sale of the WFNB
Shares and the Consumer Receivables and the transfer of the employees related to
the consumer finance division of the Business (the "WFNB Purchase") until such
time as the OCC Approval has been obtained. For purposes of the Closing referred
to in clause (i) of the preceding sentence, if, in addition to the failure to
obtain the OCC Approval, one of more other conditions to the Closing
contemplated by this Agreement contained in Article VIII as they relate to WFNB
(an "Other WFNB Condition") has not been satisfied as of the date on which all
such other conditions have been satisfied or waived, the parties shall
nevertheless consummate the Closing and the transactions contemplated hereby
other than the WFNB Purchase in accordance with this Article II. The
consummation of the WFNB Purchase shall be conditioned on the OCC Approval
having been obtained and
<PAGE>
the satisfaction or waiver of all Other WFNB Conditions, and no other conditions
to the Closing contained in Article VIII, and at such consummation the Purchaser
shall pay the Seller by wire transfer of immediately available funds to the
Seller's account an amount equal to the WFNB Premium plus the book value of WFNB
and of the Consumer Receivables as reflected on a balance sheet prepared by the
Seller as of the last day of the month immediately preceding the date of such
consummation ("Prior Month End Balance Sheet"), reduced by the Assumed
Liabilities of WFNB and which arise in connection with the Consumer Receivables,
as reflected on such Prior Month End Balance Sheet, and further reduced by the
amount of the Delinquency Payment, and Seller shall deliver the WFNB Shares. The
consummation of the WFNB Purchase after consummation of the Closing and other
transactions contemplated hereby shall be subject to the same representations,
warranties, covenants and conditions contained herein as applied on the Closing
Date to the Seller, on the one hand, and the Purchaser, on the other hand,
applying to the Seller and WFNB and the Purchaser, respectively, on the date on
which the WFNB Purchase is consummated, with only such modifications as are
necessary to reflect the Closing of all transactions contemplated hereby other
than the WFNB Purchase.
(b) If the consummation of the WFNB Purchase is delayed pursuant to
Section 2.7(a), (i) the WFNB Shares and the Consumer Receivables shall
constitute and be treated as Excluded Assets, and all Assumed Liabilities of
WFNB and which arise in connection with the Consumer Receivables shall
constitute and be treated as Excluded Liabilities until such time as the WFNB
Purchase and (ii) the Employees relating to the consumer finance division of the
Business shall not be transferred until the time of the WFNB Purchase.
(c) The failure of the consummation of the WFNB Purchase to occur for
any reason shall affect neither the Closing of the other transactions
contemplated hereby nor any rights or obligations of the parties under Section
12.2, 12.3 or 14.13.
2.8 Foreign Purchases
-----------------
(a) If, at the time all other conditions to the consummation of the
transactions contemplated by this Agreement contained in Article VIII have been
satisfied or waived (other than those conditions or portions thereof applicable
to Section 2.7), the Purchaser has not obtained certain regulatory approvals of
foreign Governmental Authorities which are required for consummation of the
transactions contemplated hereby in accordance with the laws of, or for the
conduct of the Business in, one or more foreign countries (the "Foreign
Approvals"), then the parties agree promptly to take all actions necessary to
(i) consummate pursuant to this Article II the Closing and all other
transactions contemplated hereby (other than as contemplated by Section 2.7) and
except the Delayed Foreign Purchases (as defined below), and reduce the Closing
Payment by an amount equal to (A)
<PAGE>
the book value of the Assets, as reduced by the Assumed Liabilities of the
Business, in each case which are located in or attributable to the country or
countries as to which all Foreign Approvals have not been obtained (the
"Unapproved Country or "Unapproved Countries") as reflected on the balance sheet
of the Business, dated September 30, 1997, plus (B) an amount equal to the
portion of the total Premium Amount which the Balance Sheet of the Business as
of September 30, 1997 shows to be allocable to each of the countries included
thereon which at such time are Unapproved Countries (the "Relevant Country
Premium"), and (ii) delay the consummation of the purchase and sale of the
Assets and the assumption of the Assumed Liabilities and the transfer of the
employees in each case which are located in or attributable to each Unapproved
Country (including, if applicable, the sale of the stock of the WFC Stock
Company domiciled in such Unapproved Country) (the "Delayed Foreign Purchase")
until such time as the applicable Foreign Approval has been obtained. For
purposes of the Closing referred to in clause (i) of the preceding sentence, if,
in addition to the failure to obtain any Foreign Approval, one of more other
conditions to the Closing contemplated by this Agreement contained in Article
VIII as they relate to an Unapproved Country (an "Other Foreign Condition") has
not been satisfied as of the date on which all such other conditions have been
satisfied or waived, the parties shall nevertheless consummate the Closing and
the transactions contemplated hereby other than the applicable Delayed Foreign
Purchase in accordance with this Article II. The consummation of each Foreign
Purchase shall be conditioned on the applicable Foreign Approval having been
obtained and the satisfaction or waiver of all Other Foreign Conditions, and no
other conditions to the Closing contained in Article VIII, and at such
consummation the Purchaser shall pay the Seller by wire transfer of immediately
available funds to the Seller's account an amount equal to the book value of the
Assets located in or attributable to each theretofore Unapproved Country as
reflected on the Prior Month End Balance Sheet, reduced by the Assumed
Liabilities of the Unapproved Country and which arise in connection with the
Receivables relating to the applicable Unapproved Country, as reflected on such
Balance Sheet, plus an amount equal to the relevant Country Premium. The
consummation of any Foreign Purchase after consummation of the Closing and other
transactions contemplated hereby shall be subject to the same representations,
warranties, covenants and conditions contained herein as applied on the Closing
Date to the Seller, on the one hand, and the Purchaser, on the other hand,
applying to the Seller and the Purchaser, respectively, with respect to the
Business in the relevant Unapproved Country on the date on which the applicable
Foreign Purchase is consummated, with only such modifications as are necessary
to reflect the Closing of all transactions contemplated hereby other than the
applicable Foreign Purchase.
(b) If the consummation of a Foreign Purchase is delayed pursuant to
Section 2.8(a), the Assets located in each Unapproved Country shall constitute
and be treated as Excluded
<PAGE>
Assets, and all Assumed Liabilities which arise in connection with such Assets
and the employees related thereto (including those which are to become Assumed
Liabilities) shall constitute and be treated as Excluded Liabilities until such
time as the closing of the relevant Foreign Purchase.
(c) The failure of the consummation of a Foreign Purchase to occur
for any reason shall affect neither the Closing of the other transactions
contemplated hereby nor any rights or obligations of the parties under Sections
12.2, 12.3 or 14.13.
(d) Each Foreign Purchase shall be completed as promptly as
practicable after the Foreign Approval relevant thereto shall have been
obtained.
ARTICLE III
PURCHASE PRICE ADJUSTMENT
3.1 Closing Statement of Net Assets.
-------------------------------
Preparation. As promptly as practicable after the Closing Date, the
Seller will cause to be prepared (a) a statement of the book value of the Assets
and the Assumed Liabilities that were assumed by the Purchaser pursuant to this
Agreement as of the close of business on the Closing Date (the "Closing Balance
Sheet"), and (b) the calculation of Closing Net Asset Value based upon the
Closing Balance Sheet and the adjustments set forth in Schedule 3.1
(collectively, the "Adjustment Statements"). The Closing Balance Sheet shall be
prepared in accordance with GAAP as consistently applied by the Seller and shall
be prepared on a basis consistent with the preparation of the Balance Sheet of
the Business dated June 30, 1997, and shall present fairly in all material
respects the financial position of the Business. The Purchaser and its
representatives and accountants shall have the right to participate in and
observe the process of the preparation of the Adjustment Statements, and such
access as they may reasonably request to any books, records, workpapers or other
information. The "Closing Net Asset Value" shall mean an amount equal to the
remainder of (i) the book value of the Assets on the Closing Date, as reflected
on the Closing Balance Sheet, less (ii) the Assumed Liabilities on the Closing
Date, as reflected on the Closing Balance Sheet, as each of the foregoing
amounts shall be finally and conclusively determined as specified in Section
3.2(d). The Adjustment Statements shall be prepared at the Seller's expense with
the assistance, to the extent reasonably necessary, of former personnel of the
Business, which the Purchaser shall use commercially reasonable efforts to
provide to the Seller at no cost to the Seller. As promptly as practicable, but
no later than ninety (90) days after the Closing Date, the Seller will cause the
Adjustment Statements to be delivered to the Purchaser and the Purchaser's
accountants.
3.2 Determination of Closing Adjustments; Dispute
---------------------------------------------
<PAGE>
Resolution.
(a) Cooperation. The parties hereto agree that they will cooperate and
assist in the preparation and review of the Adjustment Statements including
making available all relevant books, records, work papers and personnel.
(b) Review by Purchaser; Disagreement. If the Purchaser disagrees with
the calculation of the Closing Net Asset Value, the Purchaser may, within 60
days after receipt of the Adjustment Statements, deliver a written notice to the
Seller disagreeing with such calculation or calculations, setting forth its
calculation of such amount or amounts in accordance with the terms of this
Agreement. Any such notice of disagreement shall specify those items or amounts
or calculation methods as to which the Purchaser disagrees. If the Purchaser
fails to object within the time period required by this Section 3.2(b), the
Closing Balance Sheet and the Closing Net Asset Value, as prepared and
determined by the Seller, shall be conclusive and binding, absent manifest
error.
(c) Resolution of Disagreements. If a notice of disagreement shall be
delivered within the time period specified in Section 3.2(b), and if the Seller
does not agree with the Purchaser's objections, if any (it being agreed that the
failure of the Seller to deliver written notice to the Purchaser of the Seller's
disagreement with the Purchaser's objection within 10 days of receipt of such
objection shall be deemed acceptance by the Seller), or such objections are not
resolved on a mutually agreeable basis within thirty (30) days after the
Seller's receipt thereof, any disagreement between the parties regarding the
same shall be resolved within an additional sixty (60) day period by the Chicago
office of Arthur Andersen LLP, or another independent accounting firm of
nationally recognized standing reasonably satisfactory to, and mutually agreed
upon by, the Seller and the Purchaser (who shall not have any material
relationship with the Seller or the Purchaser) (the "Independent Accounting
Firm"), promptly to review this Agreement and the remaining items or amounts
disputed by the parties hereto. The Seller and the Purchaser shall furnish the
Independent Accounting Firm such documents and other materials as each finds
relevant and such other documents and materials requested by the Independent
Accounting Firm. The Independent Accounting Firm shall apply the terms of this
Agreement and adopt either the Seller's position or the Purchaser's position for
each separate item in dispute. The Independent Accounting Firm will be required
to adopt either the position of the Seller or the Purchaser for each separate
item in dispute, and will not have the authority to modify the position it
adopts. No later than sixty (60) days following its commencement of its review,
the Independent Accounting Firm shall deliver to the Seller and the Purchaser a
written report setting forth the positions adopted by the Independent Accounting
Firm. Such report shall be conclusive and binding on the parties, absent
manifest error. The fees and
<PAGE>
charges of the Independent Accounting Firm in making such review and preparing
such report shall be borne equally by the Seller and the Purchaser.
(d) Final Closing Net Asset Value. For purposes hereof, the final and
conclusive Closing Net Asset Value shall be the amount (i) set forth as the
Seller's calculation thereof in the Adjustment Statements if no notice of
disagreement with respect thereto is delivered within the time period specified
in Section 3.2(b) or (ii) if such a notice of disagreement is delivered, (A) as
agreed by the parties pursuant to Section 3.2(c) (including a deemed acceptance
by the Seller pursuant to said Section) or (B) in the absence of such agreement,
as adopted in the report of the Independent Accounting Firm delivered pursuant
to Section 3.2(c).
3.3 Post-Closing Adjustment.
(a) Closing Payment. If the Closing Payment minus the Premium Amount
exceeds the Closing Net Asset Value, the Seller shall pay to the Purchaser, in
the manner and with interest as provided in Section 3.3(b), the amount of such
excess. If the Closing Net Asset Value exceeds the Closing Payment minus the
Premium Amount, the Purchaser shall pay to the Seller, in the manner and with
interest as provided in Section 3.3(b), the amount of such excess. Any such
payment pursuant to this Section 3.3(a) shall be made at a mutually convenient
time and place (i) within thirty (30) days after the Seller's delivery of the
Adjustment Statements if no notice of disagreement is delivered pursuant to
Section 3.2(b) or (ii) if a notice of disagreement is delivered pursuant to
Section 3.2(b) then within ten (10) days after the earlier of (A) agreement
between the parties pursuant to Section 3.2(c) with respect to the Closing Net
Asset Value (including a deemed acceptance by the Seller pursuant to said
Section) and (B) delivery of the report of the Independent Accounting Firm
referred to in Section 3.2(c).
(b) Method of Payment. Any payment pursuant to this Section 3.3 shall
be made by wire transfer by the Purchaser or the Seller, as the case may be, of
immediately available funds to such account of the party or parties to receive
such payment as may be designated by such party or parties. The amount of any
payment to be made pursuant to this Section 3.3 shall bear interest from the
Closing Date until the date of payment at a rate per annum equal to the Post-
Closing Interest Rate. Such interest shall be payable at the same time as the
payment to which it relates and shall be calculated daily on the basis of a year
of 365 days and the actual number of days for which due.
(c) Purchase Price Adjustment. The purchase price shall be increased
by the amount that the Closing Net Asset Value is greater, or shall be reduced
by the amount that the Closing
<PAGE>
Net Asset Value is less, than the Closing Payment minus the Premium Amount.
(d) Additional Adjustments. (i) If Section 2.7 shall be applicable,
the provisions of Sections 3.1, 3.2 and this Section 3.3 shall apply to
ascertain and to adjust for the differences in the book value of the WFNB Shares
and the Consumer Receivables, reduced by the Assumed Liabilities of WFNB and
which arise in connection with the Consumer Receivables, between the amounts
reflected on the Prior Month End Balance Sheet and the book values thereof as of
the close of business on the date on which the WFNB Purchase is consummated,
with a payment to be made as a result thereof (including interest thereon) to
the party which is owed the same.
(ii) If Section 2.8 shall be applicable, the provisions of Sections
3.1, 3.2 and this Section 3.3 apply with respect to each Foreign Purchase to
ascertain and to adjust for the differences in the book value of the Assets as
reduced by the Assumed Liabilities located in or attributable to the theretofore
Unapproved Country which are the subject of the applicable Foreign Purchase, as
reflected on the Prior Month End Balance Sheet, and the book values thereof as
of the close of business on the date on which the applicable Foreign Purchase is
consummated, with a payment to be made as a result thereof (including interest
thereon) to the party which is owed the same.
3.4 Repurchase of Excluded Assets.
(a) In the event that any receivable, loan or other asset indirectly
transferred to the Purchaser through the purchase of the WFC Stock Companies is
an Excluded Asset, or any receivable, loan or other asset transferred to the
Purchaser pursuant to this Agreement is an Excluded Asset, the Purchaser shall
promptly provide the Seller with written notice identifying such Excluded Asset,
and the Seller shall be obligated to repurchase such Excluded Asset to the
extent set forth in this Section 3.4.
(b) On the fifteenth (15th) day of each month (or the following
Business Day, if such day is not a Business Day), the Seller shall deliver to
Purchaser an amount equal to the aggregate Repurchase Price for all Excluded
Assets for which Purchaser has given notice in the preceding calendar month. The
Repurchase Price for any receivable or loan which is an Excluded Asset shall be
(i) the sum of the outstanding balance thereof as of the date of repurchase,
plus (ii) Purchaser's documented recording or transfer costs of conveying such
receivable or loan to the Seller, plus (iii) accrued interest thereon in
accordance with the terms of the applicable loan documentation, plus (iv) the
product of the outstanding balance as of the date of repurchase multiplied by
the Relevant Receivable Premium. The Repurchase Price for any other Excluded
Asset shall be (x) the book value of such Excluded Asset as of the Closing Date,
plus
<PAGE>
(y) interest on such amount from the Closing Date until the date such Repurchase
Price is received by Purchaser at the Post-Closing Interest Rate, plus (z)
documented recording or transfer costs of conveying such Excluded Asset to
Seller. Upon payment of the Repurchase Price as set forth herein, Purchaser
shall deliver any and all documentation relating to each repurchased loan and
shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the Seller title to such
loan or other Excluded Asset.
(c) The period within which the Purchaser may assert the right to
require the Seller to repurchase Excluded Assets as provided in this Section
shall expire nine months after the applicable closing date, provided, however,
that such expiration shall have no effect on the obligations of the Seller and
WFC Parent with respect to any Excluded Asset that is the subject of a
repurchase demand made prior to such expiration, nor upon any representation and
warranty relating to Excluded Assets and indemnification.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER AND WFC PARENT
The Seller and WFC Parent hereby jointly and severally represent and
warrant to the Purchaser (i) as set forth in Sections 4.1, 4.2 and 4.7, clause
(a) of Section 4.3 and clause (a) of Section 4.5, and, (ii) except for
circumstances that, taken in the aggregate, would not reasonably be expected to
have a Material Adverse Effect, in the case of all other representations and
warranties herein, as follows:
4.1 Organization and Existence. Each of the Seller, WFC Parent, WFNB and
each WFC Company is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of organization. Each of the
Seller, WFC Parent, WFNB, and the WFC Companies has full corporate power and
authority to own and operate the Assets and to carry on the Business as and
where such Assets are now owned and the Business is now conducted. Each of the
Seller, WFC Parent, WFNB, and the WFC Companies is duly licensed or qualified to
do business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the Assets or the nature of the Business
requires it to be so licensed or qualified and, in the case of WFC Parent, in
which failure to be so licensed, qualified and in good standing would reasonably
be expected to have a Material Adverse Effect. Schedule 4.1 sets forth each
jurisdiction in which any of the Seller, WFNB, and the WFC Companies is licensed
or qualified to do business as a foreign corporation. Complete and correct
copies of the articles of incorporation and by-laws, as amended, of the Seller,
each WFC Company and WFNB have been made available to Purchaser. Seller has made
available to Purchaser the minute books of Seller, each WFC Company and
<PAGE>
WFNB from date of incorporation through the date hereof, and such minute books
contain complete and accurate records of all meetings held by the board of
directors and stockholders of Seller, each WFC Company and WFNB and of all
corporate actions authorized at such meetings since the respective dates of
incorporation.
4.2 Authority and Approval. Each of the Seller and WFC Parent has the
corporate power and authority to execute, deliver and perform this Agreement and
the applicable agreements, documents and instruments contemplated herein and to
consummate the transactions contemplated hereby and thereby. All corporate
(including shareholder) acts and proceedings required to be taken by or on the
part of the Seller and the WFC Parent to authorize it to execute, deliver and
perform this Agreement and the applicable agreements, documents and instruments
contemplated herein and to consummate the transactions contemplated hereby have
been duly and validly taken and remain in full force and effect. This Agreement
constitutes the legal, valid and binding agreement of the Seller and WFC Parent,
enforceable against the Seller and WFC Parent in accordance with its terms
except as such enforcement may be limited by bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally or by
judicial discretion as to the availability of equitable remedies or by general
equitable principles.
4.3 No Conflict. The execution, delivery and performance by the Seller and
WFC Parent of this Agreement and the applicable agreements, documents and
instruments contemplated herein do not, and the consummation by the Seller and
WFC Parent of the transactions contemplated hereby and thereby will not: (a)
violate or conflict with the certificate of incorporation or by-laws of the
Seller, WFC Parent, WFNB or any WFC Company; (b) assuming satisfaction of the
matters referred to in the following clause (c), violate, contravene or conflict
with any order, writ, injunction, directive, judgment, award or decree of any
Governmental Authority to which the Seller, WFC Parent, WFNB or any WFC Company
is a party, or to which any of the Assets is subject or, to the knowledge of the
Seller, any statute, law, ordinance, rule or regulation of any Governmental
Authority applicable to it or any of the Assets; or (c) require, to the
knowledge of the Seller or WFC Parent, any filing or registration by the Seller
or WFC Parent with, or approval, consent, authorization or other action with
respect to any Governmental Authority other than (i) the notification under the
HSR Act referred to in Section 6.3, (ii) the filings, registrations,
authorizations, approvals, consents and other actions listed in Schedule 4.3,
and (iii) any such filing, registration, authorization, approval, consent or
other action that would not be required if any Person other than the Purchaser
were to acquire the Assets hereunder or (d) result in the creation or imposition
of any Encumbrance on any of the Assets or equity of any of the WFC Companies or
WFNB.
<PAGE>
4.4 Contracts. Except as set forth on Schedule 4.4, the execution, delivery
and performance of this Agreement and the agreements, documents and instruments
contemplated herein by the Seller and WFC Parent do not, and the consummation of
the transactions contemplated hereby and thereby will not: (a) violate or
conflict with, result in a breach of, constitute a default under (whether with
notice or the lapse of time or both), accelerate or permit the acceleration of
the performance required by, or require the consent under or notice with respect
to, any Contract or Client Contract (other than Excluded Contracts) to which the
Seller, WFC Parent, any WFC Company, or WFNB is a party or by which it is bound
or by which any of its assets or property is bound, or (b) result in the
creation of any Encumbrance upon the Assets (other than Permitted Encumbrances).
4.5 Financial Statements.
(a) Schedule 4.5 sets forth a true and complete copy of the Financial
Statements. The Financial Statements were prepared in accordance with GAAP as
applied by the Seller on a consistent basis throughout the period involved and
fairly present the financial position of the Business in all material respects
as at the date thereof and the results of the operation of the Business for the
period then ended which are reflected therein. Between June 30, 1997 and the
date hereof, there has not been a Material Adverse Effect with respect to the
Business.
(b) Since June 30, 1997 through the date hereof, the Seller, WFNB and
the WFC Companies have not engaged in any transaction which, if done after the
execution hereof, would violate Section 6.1 except as described in Schedule
4.5(b).
4.6 Title to Properties; Encumbrance; Sufficiency of Assets.
(a) The Seller has legal and beneficial title to the Assets, which
title may be sold, assigned or otherwise conveyed as contemplated in this
Agreement, provided, that no representation or warranty is being made as to the
effectiveness of any arrangement to convey the benefits and burdens of any
Contract, Client Contract or Permit pursuant to Section 2.2(b). None of the
Assets is subject to any Encumbrance, except any Encumbrances which shall be
removed prior to the Closing and except the following: (a) Encumbrances securing
specified liabilities or obligations immaterial in amount, individually and in
the aggregate, and with respect to which no default exists (or event that, with
notice or lapse of time, or both, would constitute a default); (b) mechanics',
carriers', workers', suppliers', and other similar liens arising in the ordinary
course of business and consistent with past practice for any amount the payment
of which is not delinquent; (c) exceptions disclosed in Schedule 4.6; (d) minor
imperfections of title, if any, none of which, individually or in the aggregate,
is substantial in amount, substantially detracts from the value or substantially
impairs
<PAGE>
the use of the property subject thereto, or materially impairs the operations of
the Business as conducted immediately prior to the Closing; and (e) liens for
current taxes not yet due and payable (collectively, the "Permitted
Encumbrances"). The WFC Companies, including WFNB, together with the Seller, are
all of the entities that currently conduct the Business and together hold all of
the Assets.
(b) The Assets, together with the Excluded Assets and the rights of
Purchaser under the Strategic Alliance Agreement, the Trademark License
Agreement, the Transition Services Agreement and any Permits which Purchaser is
required to obtain due to the fact that it is not a subsidiary of a
manufacturing company constitute, and upon consummation of the transactions
contemplated hereby will constitute, all of the rights, assets, properties and
interests which are sufficient for, the operation of the Business as the
Business is currently being operated and conducted.
4.7 WFC Stock Companies.
All of the outstanding shares of capital stock of the WFC Stock
Companies and the WFNB Shares are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. The shares of outstanding capital
stock of the WFC Stock Companies to be purchased hereunder constitute all of the
issued and outstanding capital stock of such WFC Stock Companies. The WFNB
Shares constitute all of the issued and outstanding capital stock of WFNB. None
of WFNB or the WFC Stock Companies is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the transfer, purchase or issuance of any shares of its capital stock or any
securities representing the right to purchase, subscribe, or otherwise receive
any such shares. Except as set forth on Schedule 4.7, Seller is the owner,
beneficially and of record, directly or indirectly, of all of the outstanding
shares of capital stock of the WFC Stock Companies and the WFNB Shares, free of
all Encumbrances other than Permitted Encumbrances. At the applicable Closing,
the Purchaser shall receive legal, beneficial, good and marketable title to the
outstanding shares of capital stock of the WFC Stock Companies and the WFNB
Shares, free and clear of all Encumbrances. Except as set forth on Schedule 4.7,
there is no corporation in which any WFC Stock Company or WFNB has any direct or
indirect equity interest. There are no proxies or voting agreements with respect
to any shares of stock of any WFC Stock Company or WFNB.
4.8 Contracts and Receivables. For purposes of this Section 4.8, "Seller"
shall be deemed to refer to Seller, WFNB and the WFC Companies. The Seller
believes that, in all material respects and to the best of its knowledge, except
as set forth on Schedule 4.8(a):
<PAGE>
(a) Each Contract, Client Contract, Receivable Collateral Document and
Receivable Credit Support Document was originated in the ordinary course of
business. Each security or other interest created or intended to be created
thereunder in inventory the purchase of which is financed by the Seller is
valid, subsisting, binding and enforceable and is intended to be a first
priority interest in favor of the grantee thereof. Each Contract, Client
Contract, Receivable Collateral Document and Receivable Credit Support Document
is valid, genuine, binding and enforceable against the counterparty thereto in
accordance with its terms except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors rights generally or by judicial discretion as to the availability of
equitable remedies or by general equitable principles, is absolute and
unconditional, is fully transferable and assignable, and is not and shall not be
(due to acts or omissions committed or omitted by or on behalf of the Seller)
subject to any defenses, setoffs, off-sets, adjustments, rescission or
counterclaims of any kind or nature. Each Contract, Client Contract, Receivable
Collateral Document and Receivable Credit Support Document was in compliance
with all applicable Laws at the time of its execution, subject to the
enforceability of the choice of law provisions contained in such documents. No
Contract, Client Contract, Receivable Collateral Document and Receivable Credit
Support Document is subject to any Law under which the sale, transfer or
assignment thereof is unlawful, void, voidable or otherwise prohibited. Each
Contract, Client Contract, Receivable Collateral Document and Receivable Credit
Support Document was fully and properly executed with genuine signatures and is
in proper order.
(b) Schedule 4.8(b) has been previously provided to the Purchaser and
accurately and completely sets forth, as of August 31, 1997 and with respect to
each Receivable, the amount owing and the aging of such Receivable and the name
of the party from whom such Receivable is owing, and the coding of the
Receivable (e.g., bankruptcy or litigation). Seller has made available, and at
Closing shall deliver, to Purchaser complete and correct copies of all
Contracts, Client Contracts, Receivable Collateral Documents and Receivable
Credit Support Documents evidencing or otherwise relating to the Receivables and
of all Contracts, Client Contracts, Receivable Collateral Documents and
Receivable Credit Support Documents creating security in the collateral as
described therein. Seller has not expressly or by its conduct or inaction waived
or prejudiced the binding effect or priority or enforceability of any Receivable
or any Contracts, Client Contracts, Receivable Collateral Documents or
Receivable Credit Support Documents evidencing or otherwise relating to the
Receivables, and none of the Receivables has been waived or amended in a manner
adverse to Seller since June 30, 1997. Security interests (i) in inventory the
purchase of which has been financed by Seller and (ii) to the extent required
under the Seller's credit policies and procedures, or individual credit
decisions, or WFC Parent decisions or if an attempt is made to
<PAGE>
create a security interest, in all other collateral, for each Receivable have
been, and remain, validly and properly perfected in accordance with the
applicable state's Uniform Commercial Code or, outside the United States, in
accordance with applicable local law. No Receivables are owing by any
Governmental Authority.
4.9 Leases. Schedule 4.9 contains an accurate and complete list of each
lease for Leased Property used in the Business (other than leases that are
Excluded Contracts), including such lease's expiration date. Each such lease is
in full force and effect and is a valid and binding obligation of the Seller,
the respective WFC Company or WFNB, enforceable against the Seller, the
respective WFC Company or WFNB and, to the knowledge of the Seller, the
counterparty thereto, in accordance with its terms. Each such lease has been
duly authorized and validly executed by the Seller, the respective WFC Company
or WFNB. Except as set forth in Schedule 4.9, none of the Seller, WFNB, WFC
Parent, any WFC Company or, to the knowledge of Seller, any party to any such
lease is in violation thereof or in default thereunder. None of the Seller, WFNB
or any WFC Company has received any notice of default under any other such lease
which has not been remedied or waived. None of the Seller or any WFC Company or
WFNB has received any notice or has any knowledge of any pending or threatened
condemnation proceeding or assessment for public improvements affecting any
Leased Property or of any sale or other disposition thereof in lieu of
condemnation. The leased Real Estate is adequate in all respects to conduct the
Business as it is currently being conducted.
4.10 Litigation. Except as set forth in Schedule 4.10, there is no legal,
administrative or arbitration proceeding, suit or action of any nature pending
or, to the knowledge of the Seller or WFC Parent, threatened against (i) the
Seller (with respect to the Business) or any WFC Company or WFNB which involves
claims against such party exceeding $250,000 or could reasonably be expected to
have a Material Adverse Effect, or (ii) the Seller, WFC Parent or any of the
Seller's Affiliates which questions or challenges the validity of this Agreement
or any action taken or to be taken by the Seller, WFC Parent or any of the
Seller's Affiliates pursuant to this Agreement or in connection with the
transactions contemplated hereby. Schedule 4.10 sets forth as of the date hereof
a true and complete list of all proceedings, suits or actions of which the
Seller (with respect to the Business), WFC Parent (with respect to the
Business), WFNB or any WFC Company is a plaintiff and which is material to the
applicable plaintiff. Except as set forth in Schedule 4.10, there is no order,
agreement, memorandum of understanding or similar instrument issued by a
Governmental Authority or to which a Governmental Authority is a party in effect
specifically with respect to the Business. Except as set forth in Schedule 4.10,
there are no pending or, to the knowledge of the Seller, threatened disputes,
investigations or controversies between the Seller (with respect to the
Business), WFC Parent
<PAGE>
(with respect to the Business), any WFC Company or WFNB and any Governmental
Authority. At the date of this Agreement, the Seller, WFC Parent (with respect
to the Business), any WFC Company or WFNB has not received any communication
from any Governmental Authority that such authority would oppose or refuse to
grant or issue its consent or approval to, if required, or would impose a
materially burdensome condition on, the Seller or WFC Parent with respect to the
transactions contemplated by this Agreement.
4.11 Tax Matters. All Tax returns with respect to the WFC Companies and
WFNB that are required to have been filed through the date hereof have been duly
filed, and all material Taxes shown to be due on such Tax returns or otherwise
required to be paid have been paid in full. None of the Seller, the WFC
Companies or WFNB are delinquent in the payment of any Taxes, the failure of
which to pay would result in an Encumbrance on all or a substantial part of the
Assets or a liability to the Purchaser as a matter of law.
4.12 Insurance. Schedule 4.12 contains a summary of all policies of fire,
liability, worker's compensation and other forms of insurance maintained for the
benefit of the Business (other than insurance policies relating to the benefit
plans listed on Schedule 4.13 and credit life, casualty or similar insurance
policies, credit unemployment, credit disability, inventory finance property and
casualty, Insurance Collateral, if any, and keyman policies obtained by Persons
who are provided financing by the Business). Such insurance policies are of the
kinds, covering such risks and in such amounts and with such deductibles and
exclusions as are consistent with past business practices of the Business.
Except as set forth in Schedule 4.12, none of the Seller, WFC Parent, WFNB or
any WFC Company has received any notice of cancellation or termination with
respect to any material insurance policy.
4.13 Benefit Plans.
(a) With respect to the Business, the Seller does not maintain,
administer or contribute to, and with respect to any Employee or any employee of
WFNB, no ERISA Affiliate maintains, administers or contributes to: (i) any
employee benefit plan (as defined in Section 3(3) of ERISA), including, without
limitation, any multiemployer plan as defined in Section 3(37) of ERISA or (ii)
any bonus, deferred compensation, performance compensation, stock purchase,
stock option, stock appreciation, severance, salary continuation, vacation, sick
leave, holiday pay, fringe benefit, personnel policy, reimbursement program,
incentive, insurance, welfare or similar plan, program, policy or arrangement
("Benefit Plan"), other than those Benefit Plans described on Schedule 4.13. All
Benefit Plans, including the Whirlpool 401(k) Plan and the Whirlpool 401(k)
Trust comply in all material respects with and are and have been operated in all
material respects in accordance with ERISA, the Code, and all other
<PAGE>
applicable Federal statutes, state law and the regulations and rules promulgated
pursuant thereto or in connection therewith. All contributions required to be
made to any Benefit Plan have been made, and there does not exist an accumulated
funding deficiency (within the meaning of Section 302 of ERISA or Section 412 of
the Code) with respect to any Benefit Plan. Seller has made available to
Purchaser true and complete copies of each Benefit Plan, and all documents
relating thereto, including, but not limited to, plan documents, summary plan
descriptions, trust agreements, insurance contracts, the most recent Annual
Report (Form 5500 Series) and IRS determination letter and accountant or trustee
reports, if any.
(b) The Seller shall fully indemnify and hold harmless Purchaser and
its Affiliates with respect to any liability or obligation under any Benefit
Plan for life insurance, medical or other employee welfare benefits to any
employee (or beneficiary) upon such employee's retirement or termination of
employment.
(c) None of the Seller, WFC Parent, WFNB or any of the WFC Companies
maintains nor has entered into any document, plan or agreement which contains,
directly or indirectly, any change in control provisions which could cause an
increase or acceleration of benefits or benefit entitlement to employees or
former employees of the Business or of the Seller, WFNB or any of the WFC
Companies which would create a liability to the Purchaser as a result of the
transactions contemplated by this Agreement.
(d) All contributions required to be made to any Benefit Plan have
been made, and there does not exist an accumulated funding deficiency (within
the meaning of Section 302 or ERISA or Section 412 of the Code) with respect to
any Benefit Plan. Seller shall fully indemnify and hold harmless Purchaser and
its Affiliates for any liability to the Pension Benefit Guaranty Corporation or
to a multiemployer plan (as defined in Section 3(37) of ERISA) with respect to
any Benefit Plan listed on Schedule 4.13.
(e) The Internal Revenue Service has issued a favorable determination
letter with respect to each Benefit Plan that is intended to be a "qualified
plan" under Section 401(a) of the Code, and, to the knowledge of the Seller,
there are no existing circumstances nor any events that have occurred which
could reasonably be expected to affect the qualified status of any such Benefit
Plan.
(f) Neither the Seller nor any ERISA Affiliate, at any time within the
last six years, has contributed to or been obligated to contribute to any
multiemployer plan (as defined in Section 3(37) of ERISA).
(g) There are no pending or threatened claims (other than routine
benefit claims), lawsuits or arbitrations which have been asserted or instituted
against any Benefit Plan, any of the
<PAGE>
fiduciaries thereof or the Seller, WFNB or any WFC Company with respect to their
duties under the Benefit Plans.
(h) All Benefit Plans that are group health plans, within the meaning
of Section 5000(b)(1) of the Code or Section 607(1) of ERISA, have been operated
in substantial compliance with the provisions of Section 4980B and Sections 9801
through 9806 of the Code and Sections 601 through 734 of ERISA, and to the
knowledge of Seller, no liability under Sections 4980B or Sections 9801 through
9806 of the Code or Sections 601 through 734 of ERISA has been incurred by
Seller, WFNB or any WFC Company or any ERISA Affiliate.
(i) To the knowledge of the Seller, there has not occurred a nonexempt
"prohibited transaction" (within the meaning of Section 4975 of the Code or
Sections 406 or 407 of ERISA) with respect to the Seller or any Benefit Plan.
4.14 Contracts and Commitments.
(a) Except for this Agreement, the agreements, documents and
instruments contemplated herein and the Excluded Assets and except as set forth
in Schedule 4.14:
(i) none of the Seller or WFC Parent (each with respect to the
Business) nor any of the WFC Companies or WFNB has any Employment Contract
with any officer or employee, or any Contract that contains any severance
or termination pay liabilities or obligations to any officer or employee in
excess of $100,000;
(ii) neither the Seller or WFC Parent (each with respect to the
Business) nor any of the WFC Companies or WFNB has any employee to whom it
is paying aggregate direct remuneration at the annual rate of more than
$150,000 for services rendered or commissions at a rate, which, based on
the performance by such employee during the last fiscal year, would exceed
$150,000;
(iii) neither the Seller or WFC Parent (each with respect to the
Business) nor any of the WFC Companies or WFNB has any collective
bargaining or union Contracts;
(iv) neither the Seller or WFC Parent (each with respect to the
Business) nor any of the WFC Companies or WFNB is restricted by Contract
from carrying on its business or any part thereof anywhere in the world or
from competing in any line of business;
(v) none of the WFC Companies or WFNB has any direct debt
obligation for borrowed money;
(vi) except as described in subsection (v), neither the Seller
(with respect to the Business) nor any of
<PAGE>
the WFC Companies or WFNB has any obligation or liability pursuant to
Contract as guarantor, surety, co-signer, endorser, co-maker, indemnitor or
otherwise in respect of the obligation of any other Person under which the
exposure of Seller, such WFC Company or WFNB would exceed $50,000, other
than in respect of the obligations of another WFC Company;
(vii) except as described in subsections (v) and (vi), neither
the Seller nor any of the WFC Companies or WFNB is subject to any
obligation or requirement to provide funds to or make any investment (in
the form of a loan, capital contribution or otherwise) in any Person
whether under a loan agreement, note or otherwise in excess of $100,000;
and
(viii) neither the Seller or WFC Parent (with respect to the
Business) nor any of the WFC Companies or WFNB has given any irrevocable
power of attorney to any Person for any purpose whatsoever, except the
appointment of agents to accept service of process.
(b) True and complete copies of all documents (including all
amendments thereto) identified on Schedule 4.14 have been made available for
inspection by the Purchaser.
(c) Each Contract set forth on Schedule 4.14 or otherwise material to
the Business (collectively, the "Material Contracts") is in full force and
effect and is a valid and binding obligation of the Seller or the respective WFC
Company or WFNB, enforceable in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws from time to time in effect
affecting creditors' rights generally or by principles governing the
availability of equitable remedies. Each Material Contract has been duly
authorized and validly executed by the Seller or the respective WFC Company or
WFNB. None of Seller, WFNB, WFC Parent, any WFC Company or, to the knowledge of
Seller or WFC Parent, any other party to any Material Contract is in violation
thereof or in default thereunder, and no Material Contract is currently under
negotiation or renegotiation.
4.15 Permits and Other Operating Rights. Each of the Seller, WFNB and the
WFC Companies possesses, and is in good standing and not subject to any
suspension, adverse modification, revocation or adverse proceeding with respect
to, any Permit which is necessary for the Seller, such WFC Company or WFNB to
engage in its respective business as currently conducted. All material Permits
possessed by the Seller, the WFC Companies or WFNB are listed on Schedule 4.15.
4.16 Compliance with Laws. Except as disclosed in Schedule 4.16, the
Business and the Assets has been, and is being conducted in all respects in
compliance with all applicable Laws,
<PAGE>
including, without limitation, as applicable, bankruptcy, insolvency and debtor
relief laws (including, without limitation, the provisions thereof relating to
reaffirmation agreements), usury laws, the Federal Truth-in-Lending Act, the
Federal Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair
Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-
Moss Warranty Act, Regulations B, M and Z of the Federal Reserve Board, the
Federal Bankruptcy Code, state adaptations of the National Consumer Act, of the
Uniform Commercial Code and of the Uniform Consumer Credit Code, and all other
banking, usury, consumer credit laws, sales finance agency acts, consumer credit
sales laws, small loan acts, equal credit opportunity, disclosure laws, laws
governing the collection of amounts owing under consumer obligations and laws
relating to unfair and deceptive practices, the ability of an entity to charge
interest or a time price differential and discrimination. Except as set forth on
Schedule 4.16, none of Seller, WFC Parent, WFNB or any WFC Company has received
any notice from any Governmental Authority that, or has any basis to believe
that, the Business is being conducted in violation of any applicable Laws.
4.17 No Illegal or Improper Transactions. None of WFC Parent (with respect
to the Business), the Seller, WFNB or any WFC Company has, nor has any director,
officer, or employee of the Seller, any WFC Company or WFNB, directly or
indirectly, used funds or other assets of the Seller, any WFC Company or WFNB,
or made any promise or undertaking in such regard, for (a) illegal
contributions, gifts, entertainment or other expenses relating to political
activity; (b) illegal payments to or for the benefit of governmental officials
or employees, whether domestic or foreign; (c) illegal payments to or for the
benefit of any Person, or any director, officer, employee, agent or
representative thereof; or (d) the establishment or maintenance of a secret or
unrecorded fund. There have been no intentionally false or intentionally
fictitious entries made in the books or records of the Seller, WFC Parent (with
respect to the Business), any WFC Company or WFNB.
4.18 Certain Environmental Matters. Except as disclosed on Schedule 4.18:
(a) The Seller, WFC Parent, WFNB or any of the WFC Companies has not
used the Owned Property or the Leased Property, or any part thereof, for
the generation, treatment, storage, handling or disposal of any Hazardous
Materials in violation of any Environmental Laws.
(b) There is not now pending or, to the knowledge of the Seller,
threatened any action, suit, or proceeding by or before any Governmental
Authority (i) alleging violation by any of the Seller, WFNB, WFC Parent
(with respect to the Business) or any WFC Company of (with respect to the
Business) or any liability of any of the Seller, WFNB, WFC
<PAGE>
Parent or any WFC Company under, any Environmental Law in connection with
the conduct of its business, (ii) alleging failure by any of the Seller,
WFNB, WFC Parent (with respect to the Business) or any WFC Company to have
any permit, certificate, license or authorization required under any
Environmental Law in connection with the conduct of its business or (iii)
with respect to the release, disposal, transportation or storage of any
Hazardous Material by any of the Seller, WFNB, WFC Parent or any of the WFC
Companies at, upon, or under any Owned Property or Leased Property.
Except as disclosed in Schedule 4.18, there are no past or present actions,
circumstances, conditions, or events that could reasonably be expected to result
in a notice, demand, request for information, citation, claim, action,
proceeding, summons, or complaint against any of the Seller, WFNB, WFC Parent
(with respect to the Business) or any WFC Company with respect to any violation
by any of the Seller, WFNB, WFC Parent (with respect to the Business) or any WFC
Company of, or liability of any of the Seller, WFNB, WFC Parent (with respect to
the Business) or any WFC Company under, any Environmental Law in connection with
the conduct of its business.
4.19 Brokers' Fees or Commissions. Except for Goldman, Sachs & Co., neither
the Seller nor any of its Affiliates has employed any investment banker, broker
or finder in connection with the transactions contemplated thereby who might be
entitled to a fee or any commission upon consummation of the transactions
contemplated hereby.
4.20 Disclosure. No representations or warranties made by the Seller or WFC
Parent in this Agreement contain or will contain any untrue statement of
material fact or omit or will omit to state any material fact necessary to make
the statements herein, in light of the circumstances under which they were made,
not misleading.
EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND
WARRANTIES BY THE SELLER IN THIS AGREEMENT, THE SELLER EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESSED OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE
PURCHASER WAIVES ANY RIGHTS TO INDEMNIFICATION OR CONTRIBUTION PURSUANT TO THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT AND ANY
SIMILAR STATE LAWS.
Except as set forth in this Agreement the Seller is not hereby making any
representation with respect to (a) the information set forth in (i) the
Confidential Memorandum distributed by Goldman, Sachs & Co. with respect to the
Seller and the Business, or (ii) that certain slide presentation given to the
Purchaser or copies of such slides delivered to Purchaser or (b) any financial
projection or forecast relating to the Assets, the
<PAGE>
Business, WFNB or the WFC Companies. With respect to any such projection or
forecast delivered by or on behalf of the Seller to the Purchaser, the Purchaser
acknowledges that (x) there are uncertainties inherent in such projections and
forecasts and that no assurance can be given as to whether such projections and
forecasts can be realized and (y) the Purchaser is familiar with such
uncertainties and takes full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts. The Purchaser shall
have no claim against the Seller, and the Seller shall have no liability to the
Purchaser, with respect to any such disclaimed information, including, without
limitation, the Confidential Information Memorandum, the slide presentation
given to the Purchaser or copies of such slides delivered to the Purchaser or
any financial projection or forecast relating to the Assets, the Business, WFNB
or the WFC Companies.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
AND PURCHASER'S PARENT
The Purchaser and Purchaser's Parent hereby jointly and severally
represents and warrants to the Seller:
5.1 Organization and Existence. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware.
5.2 Authority and Approval. Each of the Purchaser and Purchaser's
Parent has the corporate power and authority to execute, deliver and perform
this Agreement and the agreements, documents and instruments contemplated herein
and to consummate the transactions contemplated hereby. All corporate acts and
proceedings required to be taken by or on the part of each of the Purchaser and
the Purchaser's Parent to authorize it to execute, deliver and perform this
Agreement and the agreements, documents and instruments contemplated herein and
to consummate the transactions contemplated hereby have been duly and validly
taken and remain in full force and effect. This Agreement constitutes the legal,
valid and binding agreement of each of the Purchaser and the Purchaser's Parent,
enforceable against the Purchaser and the Purchaser's Parent in accordance with
its terms except as such enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally or
by judicial discretion as to the availability of equitable remedies or by
general equitable principles.
5.3 No Conflict. The execution, delivery and performance of this
Agreement by each of the Purchaser and the Purchaser's Parent and the
agreements, documents and instruments contemplated herein do not, and the
consummation of the transactions contemplated hereby and thereby will not: (a)
violate or conflict with the certificate or articles of incorporation or by-laws
of the Purchaser and the Purchaser's Parent; (b) except as would not be expected
to materially adversely affect the ability of the Purchaser
<PAGE>
or the Purchaser's Parent to consummate the transactions contemplated hereby or
thereby, (i) assuming satisfaction of the matters referred to in the following
clause (c), violate, contravene or conflict with any order, writ, injunction,
directive, judgment, award or, to the knowledge of the Purchaser, decree of any
Governmental Authority to which the Purchaser or the Purchaser's Parent is a
party or to which any of its property or assets is subject or, to the knowledge
of the Purchaser, any statute, law, ordinance, rule or regulation of any
Governmental Authority applicable to it or any of its property or assets; or
(ii) violate or conflict with, result in a breach of, constitute a default under
(whether with notice or the lapse of time or both), or accelerate or permit the
acceleration of the performance required by, any Contract to which the Purchaser
or the Purchaser's Parent is a party or by which it is bound or by which any of
its property or assets is bound; or (c) require any filing or registration with,
or approval, consent, authorization or other action with respect to any
Governmental Authority other than (i) the notification under the HSR Act
referred to in Section 7.1, (ii) the filings, registrations, authorizations,
approvals, consents and other actions listed in Schedule 5.3 and (iii) any such
filings or registrations the failure of which to make, and any such approvals,
consents, authorizations or actions the failure of which to obtain, would not be
expected to materially adversely affect the ability of the Purchaser or the
Purchaser's Parent to consummate the transactions contemplated hereby or
thereby.
5.4 Funds Available. The Purchaser has sufficient cash, lines of
credit or other sources of available funds to enable it to make the payments
contemplated by this Agreement.
5.5 Litigation. There is no legal, administrative or arbitration
proceeding, suit or action of any nature pending or, to Purchaser's knowledge,
threatened against the Purchaser or the Purchaser's Parent or any of its
Affiliates which questions or challenges the validity of this Agreement or any
of the agreements, documents and instruments contemplated herein or any action
taken or to be taken by the Purchaser or the Purchaser's Parent pursuant to this
Agreement or in connection with the transactions contemplated hereby. There are
no pending or, to the knowledge of Purchaser, threatened disputes or
controversies between the Purchaser or the Purchaser's Parent or any of their
respective Affiliates and any Governmental Authority that would reasonably be
expected to materially adversely affect the ability of Purchaser or the
Purchaser's Parent to consummate the transactions contemplated by this
Agreement. As of the date of this Agreement, none of the Purchaser, Purchaser's
Parent nor any of its Affiliates has received any written communication from any
Governmental Authority that such authority would oppose or refuse to grant or
issue its consent or approval to, if required, or would impose a materially
burdensome condition on the Purchaser or the Purchaser's Parent with respect to,
the transactions contemplated by this Agreement.
5.6 Securities. The Purchaser hereby acknowledges that the shares of
the WFC Stock Companies and the WFNB Shares are not registered under the
Securities Act of 1933, as amended, or registered or qualified for sale under
any state or foreign securities Law and cannot be resold without registration
thereunder or exemption therefrom. The Purchaser is acquiring the shares of the
WFC Stock Companies and the WFNB Shares for its own
<PAGE>
account as principal, for investment and not with a view toward the sale or
distribution thereof except with respect to any sale or distribution for which
an exemption from registration is or hereafter becomes available. The Purchaser
has sufficient knowledge and experience in financial and business matters to
enable it to evaluate the risks of investment in the shares of the WFC Stock
Companies and the WFNB Shares and has the ability to bear the economic risks of
such investment.
5.7 Brokers' Fees or Commission. Neither the Purchaser nor any of its
Affiliates has employed any investment banker, broker or finder in connection
with the transactions contemplated hereby who would have a valid claim to a fee
or any commission upon consummation of the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF THE SELLER
Each of the Seller and WFC Parent covenants and agrees with the Purchaser
as follows:
6.1 Conduct of Business.
(a) Except as otherwise contemplated by this Agreement, and except as
described in Schedule 6.1, or as otherwise consented to in writing by the
Purchaser, from the date hereof until the Closing, the Seller will conduct, and
shall cause the WFC Companies and WFNB to conduct, their businesses in the usual
and ordinary course in compliance with all applicable Laws and shall, and shall
cause the WFC Companies and WFNB to:
(i) use commercially reasonable efforts to preserve satisfactory
relationships with its suppliers, clients, borrowers and others having
business relations with it;
(ii) use commercially reasonable efforts to preserve its business
organization and goodwill intact and retain the services of its present
officers, key employees and agents;
(iii) notify the Purchaser of any notice received by it of, or
any other information received which gives a reasonable basis to believe
that there has been, any default or breach or alleged default or breach
under any material Contract or Client Contract to which it is a party or by
which it is bound;
(iv) notify the Purchaser of any notice received by it of the
commencement of any proceeding, suit or action of the type described in
clause (ii) of Section 4.10 or the threat to commence any such proceeding,
suit or action;
<PAGE>
(v) maintain its books and records in all material respects in
the same manner and with the same care that such books and records have
been maintained prior to the execution of this Agreement; and
(vi) use commercially reasonable efforts to maintain in full
force and effect through the Closing Date the insurance policies listed in
Schedule 4.12.
(b) Except as otherwise contemplated hereby, and except as described
in Schedule 6.1, from the date hereof until the Closing, the Seller will not,
and shall cause the WFC Companies and WFNB not to, without the consent of the
Purchaser:
(i) enter into or amend any Material Contract or Client Contract
except in the ordinary course of business consistent with past practice and
except for such amendments to existing Contracts or Client Contracts the
effect of which would be expected to be advantageous to the Seller or the
WFC Company in question or WFNB;
(ii) declare or pay any dividend on, or make any other
distribution with respect to, any capital stock of any WFC Company or WFNB;
(iii) except in the ordinary course of business consistent with
past practice, borrow or agree to borrow any funds or incur, assume or
become subject to, whether directly or by way of guaranty or otherwise, any
obligation or liability with respect to borrowed money;
(iv) loan or advance any material amount to directors or
officers, except pursuant to existing programs, or make any loans or
advances to any other person other than in the ordinary course of the
Business;
(v) merge or consolidate with any other corporation or acquire,
except in the ordinary course of collection, a material amount of assets
constituting all or substantially all of the business or assets of any
Person;
(vi) amend or modify its credit policies or procedures in any
material respect;
(vii) other than pursuant to this Agreement, sell, lease or
otherwise dispose of any of the Assets except in the ordinary course of
business;
(viii) permit or allow any of the Assets to be subjected to any
Encumbrances of any kind, other than the Permitted Encumbrances and the
other Encumbrances referred to in Section 4.6;
<PAGE>
(ix) other than as required by applicable Law or with respect to
the Whirlpool 401(k) Plan, take any action to amend or terminate any
Benefit Plan or adopt any other plan, program, Contract or practice
providing benefits for or compensation to or on behalf of employees or
former employees of Seller (with respect to the Business), any WFC Company
or WFNB, or permit any Affiliate of Seller, any WFC Company or WFNB to take
any such action if such action could subject any WFC Company or WFNB to an
obligation or liability except for increases in employee compensation or
benefits in the ordinary course of business; provided, that such increases
do not exceed $10,000 with respect to any individual employee;
(x) make any capital expenditure or commitment therefor in excess
of $25,000 individually or in excess of $100,000 in the aggregate;
(xi) other than in the ordinary course or to protect the
Business, enter into or amend or cancel or agree to the amendment or
cancellation of any insurance Contract;
(xii) change any provision of its articles of incorporation or
by-laws or similar governing documents;
(xiii) directly or indirectly redeem, purchase or otherwise
acquire, any shares of its outstanding capital stock (other than preferred
stock of the Seller), change the number of shares of its authorized or
issued capital stock, permit any shares of its capital stock held in
treasury to become outstanding, or issue any capital stock or issue or
grant any option, warrant, call, commitment, subscription, right to
purchase or contract of any character relating to its authorized or issued
capital stock or any securities convertible into, relating to or based on
shares of such stock;
(xiv) purchase any Real Property or personal property or
purchase or sell any options to purchase any Real Property or personal
property, with a market value in excess of $50,000 in the aggregate;
(xv) permit any insurance policy naming it as a beneficiary or a
loss payable payee to be canceled or terminated or any of the coverage
thereunder to lapse unless (1) simultaneously with such termination or
cancellation substantially similar replacement policies reasonably
satisfactory to Purchaser are in full force and effect, (2) the cost of
renewal is commercially unreasonable or (3) such coverage is not
commercially reasonably available;
(xvi) hire any employees (other than executive employees) other
than in connection with filling a vacancy;
<PAGE>
(xvii) sell or otherwise transfer to any third party any list of
customers, past customers or prospects; or
(xviii) enter any Contract to do any of the foregoing.
(c) As used in this Section 6.1, "ordinary course of business" shall
be determined by reference to the practices of the Seller, the WFC Companies and
WFNB.
(d) Anything to the contrary in this Agreement notwithstanding, the
covenants of the Seller in this Section 6.1 shall not be deemed to apply to the
extent otherwise applicable in respect of any Excluded Assets (other than
Contracts that are subject to an arrangement to convey the benefit thereof
pursuant to Section 2.2(b)), Excluded Liabilities or the Excluded Businesses.
6.2 Access. The Seller will afford to the Purchaser and its authorized
representatives and agents reasonable access from the date hereof until the
Closing, during normal business hours, to its properties, books, records and
employees of the Seller, WFNB and the WFC Companies to the extent relating to
the Assets or the Business and furnish to the Purchaser such additional
financial and operating data and other information as it may reasonably request
(including, without limitation, obtaining landlord estoppel certificates) to the
extent that such access and disclosure would not violate the terms of any
agreement to which the Seller is bound or any applicable Law. The Seller will,
at and after the Closing, furnish the Purchaser with such additional financial
and operating data and other information about the Assets and the Business as
may be reasonably available and necessary or appropriate for the Purchaser to
comply with applicable Law and financial reporting requirements.
6.3 HSR Act Notification; Other Governmental Consents. If required under
the HSR Act, the Seller shall cause to be filed as promptly as practicable with
the Federal Trade Commission and the Department of Justice the notification and
report form required for the transactions contemplated by this Agreement and the
agreements, documents and instruments contemplated herein and any supplemental
information that may be reasonably requested in connection therewith, which
notification and report form and supplemental information will comply with the
requirements of the HSR Act; provided, that the Purchaser shall pay all filing
fees in connection therewith. The Seller will make the filings with, and take
all reasonable steps to obtain the authorizations, approvals, consents and other
actions of, Governmental Authorities described in Schedule 4.3.
6.4 Reasonable Efforts. The Seller shall use commercially reasonable
efforts to cause the conditions set forth in Section 8.1 to be satisfied as soon
as practicable after the date hereof. To the extent that any Asset requires the
consent of any third
<PAGE>
Person for its assignment or any Assumed Liability requires the consent of any
third Person for its assumption, in each case as contemplated in this Agreement,
the Seller shall use all commercially reasonable efforts to obtain such consents
or to cause such other actions to be taken prior to the Closing Date; provided,
that the Seller shall not be required to incur out-of-pocket expenses in
connection therewith.
6.5 Accounts and Powers of Attorney; Insurance Matters.
(a) Prior to Closing, Seller shall provide Purchaser with a complete and
correct description of all banking, safe deposit box and lock-box arrangements
with respect to the Business or Assets maintained at such time by any WFC Asset
Company or WFNB, maintained at such time by any WFC Stock Company or otherwise
used in connection with the Business, all powers of attorney in connection with
such arrangements, and the names of all persons authorized to draw thereon or to
have access thereto. Except as disclosed to Purchaser in writing prior to
Closing, no WFC Company or WFNB will enter into any power of attorney that will
survive the Closing.
(b) Prior to the Closing and, if Section 2.7 and/or 2.8 shall be
applicable, any closing effected pursuant thereto, the Seller shall report all
known claims for insurance and notices of occurrence for claims-made insurance
policies which will no longer be in effect with respect to the WFC Companies and
WFNB following the Closing or the closings contemplated by Sections 2.7 and 2.8.
6.6 Other Confidentiality Agreements. Promptly following the date hereof,
WFC Parent shall request each party to a confidentiality agreement entered into
in connection with the exploration of an acquisition of the Business or any
material portion thereof or the WFC Companies and/or WFNB (collectively, the
"Other Confidentiality Agreements") to (i) return to WFC Parent all materials
and documents received from WFC Parent, Seller, WFNB or any WFC Company in
connection with such exploration or (ii) destroy such materials and documents
and certify such destruction to WFC Parent in writing. From and after the
Closing, WFC Parent shall, upon the request of Purchaser, use commercially
reasonable efforts to enforce any covenants relating to confidentiality and non-
solicitation contained in any Other Confidentiality Agreements. To the extent
permitted under the Other Confidentiality Agreements, WFC Parent hereby assigns
to Purchaser its rights relating to confidentiality and non-solicitation
contained in the Other Confidentiality Agreements.
6.7 Non-Transferability.
-------------------
(a) To the extent that any of the Assets is not capable of being
sold, assigned, transferred, delivered or subleased without the consent or
waiver of any third Person, or if such sale, assignment, transfer, delivery or
sublease or attempted sale, assignment, transfer, delivery or sublease would
<PAGE>
constitute a breach thereof or a violation of any Law, subject to the provisions
of clause (b) below, this Agreement shall not constitute a sale, assignment,
transfer, delivery or sublease thereof, or an attempted sale, assignment,
transfer, delivery or sublease thereof.
(b) Notwithstanding anything in this Agreement to the contrary, with
respect to any Asset referred to in clause (a) hereof, none of Seller, WFNB or
any WFC Company shall be obligated to sell, assign, transfer, deliver or
sublease to Purchaser (and Purchaser shall not be required to accept) such Asset
without first having obtained all necessary consents and waivers with respect to
such Asset. Seller shall use all commercially reasonable efforts, and Purchaser
shall cooperate with Seller, to obtain said consents and waivers and to resolve
the impediments to the sale, assignment, transfer, delivery or subleases
required by this Agreement and to obtain any other consents and waivers and
necessary to convey to Purchaser any of the Assets; provided, however, that
Seller shall not be obligated to pay any consideration therefor to the party
from whom any such consent or waiver is requested in order to obtain any consent
or waiver.
(c) To the extent that the consents or waivers referred to in clause
(b) hereof are not obtained by Seller, or until the impediments to the sale,
assignment, transfer, delivery or sublease referred to therein are resolved,
Seller shall use all commercially reasonable efforts, with the costs of Seller
related thereto to be promptly reimbursed by Purchaser, to (i) provide, at the
request of Purchaser, to Purchaser the benefits of any Asset referred to in
clause (a) hereof, to the extent related to the Business, (ii) cooperate in any
reasonable and lawful arrangement designed to provide such benefits to
Purchaser, without incurring any material financial obligation to Purchaser, and
(iii) enforce, at the request of and for the account of Purchaser, any rights of
Seller arising from any Asset referred to in clause (a) hereof against any third
Person, including the right to elect to terminate in accordance with the terms
thereof upon the advice of Purchaser. Purchaser shall not be required by this
clause (c) to enter into any arrangement that would impose any additional cost,
expense or liability upon the Purchaser than if such Assets had been transferred
to the Purchaser or that would deprive Purchaser of any benefits or profits
arising out of the Asset in question. Nothing in this Section 6.7 shall affect
the conditions to Purchaser's obligations set forth in Article VIII.
(d) To the extent that Purchaser is provided the benefits of any Asset
referred to in clause (a) hereof (whether from Seller or otherwise) in
accordance with clause (c) hereof, Purchaser shall perform at the direction of
Seller and for the benefit of any third Person the obligations of Seller
thereunder or in connection therewith; provided that if Purchaser shall fail to
perform to the extent required herein, Purchaser shall hold
<PAGE>
Seller harmless and indemnify it therefor, and in the event of a failure of such
indemnity Seller shall cease to be obligated under this Section 6.7 in respect
of the Asset which is the subject of such failure to perform.
6.8 Permit Transfer.
(a) Except for those Permits that are not transferable by law,
Seller, WFNB, and the WFC Companies shall, with the Purchaser's assistance and
cooperation, to the extent possible under applicable Law, and unless necessary
for the operation of the Excluded Business, cause the issuance or transfer of
the Permits to Purchaser upon the Closing Date in form and substance the same as
the Permits which were held by Seller, WFNB or any WFC Company; provided, that
none of Seller, WFNB or the WFC Companies shall be required to transfer any
Permit which it has by virtue of its status as a subsidiary of a manufacturing
company and is not transferable to Purchaser under applicable Law. Seller, with
Purchaser's assistance and cooperation, shall give and make all required notices
and reports to the appropriate Persons with respect to the Permits that may be
necessary for the ownership, operation and use of the Assets by Purchaser after
the Closing.
(b) Seller shall assist and cooperate with Purchaser in obtaining the
issuance in the name of Purchaser of any Permit that is not transferable, and
Seller, WFNB and the WFC Companies, as applicable, shall with Purchaser's
assistance and cooperation, take all actions reasonably requested by Purchaser
to facilitate that issuance, including but not limited to the preparation of any
Permit application or necessary documents, whether for signature by Seller or by
Purchaser.
(c) If any Permit to be transferred or issued to Purchaser under
clauses (a) or (b) of this Section 6.8 is not transferred or issued to Purchaser
on or before the Closing, Seller, WFNB, and the WFC Companies, with the
assistance and cooperation of Purchaser, shall take all reasonable necessary
steps to implement such transfer or issuance, without delay. Pending any delayed
transfer or issuance, Seller, WFNB and the WFC Companies undertake to maintain
in force, and authorize Purchaser to operate under and utilize, the Permits in
question, to the extent permitted by applicable Law, and provided Purchaser
operates in compliance with the Permits, for the period from and after the
Closing until such Permits are issued or transferred to Purchaser.
(d) Nothing in this Section 6.8 shall affect the conditions to
Purchaser's obligations set forth in Article VIII.
6.9 Acquired Unsettled Accounts. To the extent any of the Acquired
Unsettled Accounts have not been paid in full by the date that is six months
following the Closing Date, the Seller shall pay to Purchaser an amount equal to
the extent such Acquired Unsettled Accounts have not been paid in full. Any
<PAGE>
amounts with respect to the Acquired Unsettled Accounts paid to the Purchaser
after such date that is six months following the Closing Date that have been
theretofore paid to the Purchaser by the Seller shall be refunded to the Seller.
6.10 Liabilities and Assets. At or prior to Closing, Seller and WFC Parent
shall cause all indebtedness (except the certificate of deposit and short-term
debt of WFNB to the Seller), and, to the extent practicable, all other
liabilities and obligations of each WFC Stock Company and of WFNB to be removed
or otherwise satisfied such that, immediately following the Closing, the WFC
Stock Companies and WFNB shall have no liabilities or obligations other than
Assumed Liabilities. Prior to the applicable closing, Seller and WFC Parent
shall cause the WFC Companies to retain assets held by the WFC Companies which
constitute Assets and shall transfer all Excluded Assets to the Seller or
Affiliates of the Seller which are not WFC Companies or WFNB.
6.11 Balance Sheet. WFC and the Parent shall prepare and deliver to
Purchaser as promptly as practicable the Balance Sheet of the Business as of
September 30, 1997, but in no event later than October 14, 1997.
6.12 Insurance Rebates. The Purchaser shall pay over to the Seller any
insurance rebates received by the Purchaser or any Affiliate thereof with
respect to the Business relating to periods prior to the Closing.
6.13 Post-Signing Delivery. Prior to Closing, Seller shall deliver to
Purchaser a true and complete list of all noncorporate borrowers (excluding
Consumer Receivables) borrowing at a rate of 15% or more per annum and setting
forth in each case the applicable rate and the amount borrowed.
6.14 Recourse Arrangements. To the extent recourse arrangements for
Receivables arising from the international finance group of the Business are in
place with the Seller, WFNB or any WFC Company, WFC Parent will continue to
honor such arrangements with Purchaser.
ARTICLE VII
COVENANTS OF THE PURCHASER
The Purchaser covenants and agrees with the Seller as follows:
7.1 HSR Notification; Other Governmental Consents. If required under the
HSR Act, the Purchaser will cause to be filed as promptly as practicable with
the Federal Trade Commission and the Department of Justice the notification and
report form required for the transactions contemplated hereby and any
supplemental information that may be reasonably requested in
<PAGE>
connection therewith, which notification and report form and supplemental
information will comply with the requirements of the HSR Act and pay all filing
fees in connection with such filing. The Purchaser shall make as promptly as
practicable the filings with, and take all commercially reasonable steps to
obtain the authorizations, approvals, consents and other actions of,
Governmental Authorities described in Schedule 5.3.
7.2 Reasonable Efforts. The Purchaser shall use all commercially
reasonable efforts to cause the conditions set forth in Section 8.2 to be
satisfied as soon as practicable, after the date hereof. To the extent that any
Asset requires the consent of any third Person for its assignment or any Assumed
Liability requires the consent of any third Person for its assumption, in each
case as contemplated in this Agreement, the Purchaser shall cooperate with the
Seller in attempting to obtain such consents or to cause such other actions to
be taken prior to the Closing Date; provided, that the Seller shall not be
required to incur out-of-pocket expenses in connection therewith.
7.3 Parent Guaranties. The Purchaser agrees that it will, effective upon
the Closing, use commercially reasonable efforts to cause the release of WFC
Parent from any liability under, and assume in writing on terms reasonably
satisfactory to WFC Parent, (a) all guaranties by WFC Parent or any of its
Affiliates of the indebtedness and other obligations of the Seller which are
Assumed Liabilities and (b) all Contracts and Client Contracts under which WFC
Parent or any of its Affiliates has agreed to be jointly and severally liable or
otherwise liable for any indebtedness or other obligations of the Seller which
are Assumed Liabilities.
7.4 Access; Retention of Records. The Purchaser will, upon prior notice,
at and after the Closing, afford promptly to the Seller and its agents
reasonable access during normal business hours to the properties, books,
records, employees and auditors of the Business, to the extent reasonably
available and necessary or appropriate for the Seller to comply with applicable
Law and financial reporting requirements. Without limiting the foregoing, the
Purchaser shall also cooperate, at Seller's sole cost and expense, with the
Seller in connection with claims, suits, actions and proceedings of the types
referred to in Section 12.2(a), including making available the personnel of the
Purchaser, whether as witnesses or for informational purposes. The Seller will
hold all information provided to it pursuant to this Section 7.4 in confidence
and will not disclose any such information other than (a) as may be reasonably
necessary to determine, exercise or perform its rights or obligations under this
Agreement and (b) as required by applicable Law.
7.5 Confidentiality. The Purchaser reaffirms its obligations under the
Confidentiality Agreement.
<PAGE>
7.6 Permits. On or prior to the Closing, the Purchaser shall, at its sole
expense, use commercially reasonable efforts to obtain any and all Permits which
are necessary for the Purchaser to engage in the Business as conducted by the
Seller and the WFC Companies immediately prior to the Closing, other than such
Permits, the failure of which to possess, would not impair in any manner the
Purchaser's ability to consummate the transactions contemplated herein or to
conduct the Business thereafter.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions to the Obligations of the Purchaser. The obligations of
the Purchaser to proceed with the Closing contemplated hereby are subject to the
satisfaction at or prior to the Closing of all of the following conditions, any
one or more of which may be waived, in whole or in part, by the Purchaser:
(a) Compliance; Warranties True. The Seller and WFC Parent shall have
performed and complied in all material respects with all of its covenants,
obligations and agreements contained herein to be performed or complied with by
it on or prior to the Closing Date. The representations and warranties of the
Seller and WFC Parent contained herein (giving effect to the preamble to Article
IV) shall be (a) accurate, true and correct on and as of the date of this
Agreement (except to the extent that they specifically relate to another date,
in which case they need only be accurate, true and correct as of such other
date), and (b) shall also be accurate, true and correct on and as of the Closing
Date (except to the extent that they specifically relate to another date, in
which case they shall be accurate, true and correct as of such other date);
provided, that for all purposes of this Section 8.1(a), Section 4.8 shall be
deemed to read in its entirety as set forth in Exhibit 12.2.
(b) Seller Certificates. The Purchaser shall have received a
certificate, dated the Closing Date, of the Seller certifying as to the matters
specified in Section 8.1(a).
(c) Legal Opinions. The Purchaser shall have received a legal
opinion, dated the Closing Date, from Mayer, Brown & Platt, counsel to the
Seller, with respect to the matters covered in (i) Section 4.2 and (ii) clause
(a) of Section 4.3 with respect to Seller, WFC Parent and WFNB. The Purchaser
shall have received a legal opinion, dated the Closing Date, from the Assistant
General Counsel of WFC Parent with respect to (i) the first three sentences of
Section 4.1 as they relate to the Domestic WFC Companies; (ii) clause (a) of
Section 4.3 with respect to the WFC Companies which are incorporated or
organized in a state of the United States (the "Domestic WFC Companies"); (iii)
clauses (b) and (c) of Section 4.3 to such Assistant General Counsel's
knowledge; and (iv) the first three sentences and the
<PAGE>
fifth sentence of Section 4.7 with respect to Domestic WFC Companies.
(d) HSR Act. The waiting period under the HSR Act relating to the
transactions contemplated hereby, if applicable, shall have expired or been
terminated.
(e) Governmental Consents, Approvals, etc. There shall have been
received all of the required material (on a country-by-country basis) consents,
authorizations and approvals from Governmental Authorities, including all
consents, authorizations and approvals of anti-competition, acquisition or
similar authorities and consents, authorizations and approvals which are
necessary for the Purchaser or its Affiliates to own or operate the Business in
each jurisdiction where it is currently operated and the OCC Approval.
(f) Related Agreements. The Seller and, where applicable, its
Affiliates shall have executed and delivered the Transfer Instruments, the
Shared Facilities and Transition Services Agreement and the Trademark License
Agreement. The WFC Parent and the Purchaser shall have entered into the
Strategic Alliance Services Agreement, dated as of the Closing Date.
(g) Material Adverse Change. There shall not have occurred since June
30, 1997 any event or circumstance that has or may reasonably be expected to
have a Material Adverse Effect.
(h) Resolutions and Related Documents. The Purchaser shall have
received (i) a certified copy of the Seller's Certificate of Incorporation, as
amended to date; (ii) certified Bylaws of the Seller, as amended to date; (iii)
a certified copy of resolutions of the Board of Directors of the Seller and WFC
Parent, or a duly authorized committee thereof, giving any necessary approval or
authorization with respect to this Agreement; and (iv) an incumbency certificate
as to officers of the Seller executing documents on behalf of the Seller and WFC
Parent.
(i) No Orders. The consummation of the transactions contemplated
hereby shall not violate any order or decree of any Governmental Authority
having competent jurisdiction entered after the date hereof or any law or
regulation applicable to the Seller or the Purchaser and no suit or action by
any Governmental Authority shall have been instituted that questions the
validity or legality of the transactions contemplated hereby. No Governmental
Authority having jurisdiction over the Seller or the Purchaser or any of their
respective Affiliates shall have communicated any concern, formally or
informally, in writing or orally, with respect to the transactions contemplated
hereunder, which is reasonably likely to make consummation of such transactions
unfeasible or materially burdensome for the Seller or the Purchaser or any of
their respective Affiliates.
<PAGE>
(j) The Seller shall have received the consents to the consummation of
the transactions contemplated hereby set forth on Schedule 8.1(j).
8.2 Conditions to the Obligations of the Seller. The obligations of the
Seller to proceed with the Closing contemplated hereby are subject to the
satisfaction at or prior to the Closing of all of the following conditions, any
one or more of which may be waived, in whole or in part, by the Seller:
(a) Compliance; Warranties True. The Purchaser shall have performed
and complied in all material respects with each of its covenants, obligations
and agreements contained herein to be performed or complied with by it on or
prior to the Closing Date. The representations and warranties of the Purchaser
contained herein shall be (a) accurate, true and correct on and as of the date
of this Agreement (except to the extent that they specifically relate to another
date, in which case they shall be accurate, true and correct as of such other
date), and (b) shall also be accurate, true and correct on and as of the Closing
Date (except to the extent that they specifically relate to another date, in
which case they shall be accurate, true and correct as of such other date).
(b) Purchaser's Certificate. The Seller shall have received a
certificate, dated the Closing Date, of the Purchaser certifying as to the
matters specified in Section 8.2(a).
(c) Legal Opinion. The Seller shall have received an opinion, dated
the Closing Date, from Wachtell, Lipton, Rosen & Katz, counsel to the Purchaser,
with respect to the matters covered in Section 5.1, Section 5.2 and clause (a)
of Section 5.3.
(d) HSR Act. The waiting period under the HSR Act relating to the
transactions contemplated hereby, if applicable, shall have expired or been
terminated.
(e) Related Instruments. The Purchaser shall have executed and
delivered the Transfer Instruments, the Shared Facilities and Transition
Services Agreement, the Trademark License Agreement and the Strategic Alliance
Services Agree ment, dated as of the date hereof, between the WFC Parent and the
Purchaser.
(f) No Orders. The consummation by the Seller of the transactions
contemplated hereby shall not violate any order or decree of any Governmental
Authority having competent jurisdiction entered after the date hereof or any law
or regulation applicable to the Seller and no suit or action by any Governmental
Authority shall have been instituted that questions the validity or legality of
the transactions contemplated hereby. No Governmental Authority having
jurisdiction over the Seller or Purchaser or any of their respective Affiliates
shall have
<PAGE>
communicated any concern, formally or informally, in writing or orally, with
respect to the transactions contemplated hereunder, which is reasonably likely
to make consummation of such transactions unfeasible or materially burdensome
for the Seller or the Purchaser or any of their respective Affiliates.
(g) Resolutions and Related Documents. The Seller shall have received
(i) certified Articles of Incorporation of the Purchaser, as amended to date;
(ii) certified Bylaws of the Purchaser, as amended to date; (iii) a certified
copy of the resolutions of the Board of Directors of the Purchaser or a duly
authorized committee thereof, giving any necessary approval or authorization
with respect to this Agreement; and (iv) an incumbency certificate as to
officers of the Purchaser executing documents on behalf of the Purchaser.
(h) Other Closing Transactions. Subject to Sections 2.7 and 2.8
hereof, the Purchaser shall have paid the Closing Payment in accordance with
Section 2.6.
ARTICLE IX
NONCOMPETITION COVENANT
9.1 Noncompetition Covenant.
-----------------------
(a) The Seller agrees that for a period equal to the term of the
Strategic Alliance Agreement neither the Seller, WFC Parent nor any of WFC
Parent's majority-owned Subsidiaries shall engage in any Competitive Activity in
the Territory. "Competitive Activity" means: (i) providing floor plan financing
and display programs to manufacturers, retailers, distributors and dealers; (ii)
providing revolving charge, private label credit cards and retail installment
contract purchase programs to consumers; or (iii) providing factoring,
receivable management and inventory and display financing services, it being
understood that such services are not intended to encompass the management of
the in-house credit function of any of WFC Parent and its Subsidiaries,
including the provision or management of WFC Parent and its Subsidiaries open
accounts to retailers, distributors or dealers purchasing the products of WFC
Parent and its Subsidiaries.
(b) Notwithstanding the foregoing, "Competitive Activity" does not
include (i) the sale by WFC Parent and its Subsidiaries of its products to
retailers, distributors and dealers on open account terms; (ii) the ownership,
operation, servicing or sale of any or all of the Excluded Assets, Excluded
Accounts, Excluded Receivables and Excluded Businesses, regardless of where
conducted; (iii) any operations in Asia, including the provision of floorplan
financing and display programs, the provision of revolving charge, private label
credit cards and installment contract programs and the provision of factoring,
receivable management and inventory and display fi-
<PAGE>
nancing services; (iv) acquiring or investing in (including through a joint
venture or similar arrangement) any theretofore unrelated Person (including its
other subsidiaries or Affiliates), or business thereof, that is engaged in a
Competitive Activity if not more than 20% of such Person's or such business'
average net earnings or average net revenues over the prior three years (in each
case excluding businesses that were sold or discontinued) on a consolidated or
combined basis arises from such Competitive Activity; (v) acquiring or investing
in (including through a joint venture or similar arrangement) any theretofore
unrelated Person (including its other subsidiaries or Affiliates), or business
thereof, that is engaged in a Competitive Activity if more than 20% and less
than 50% of such Person's or such business' average net earnings or average net
revenues over the prior three years (in each case excluding businesses that were
sold or discontinued) on a consolidated or combined basis arises from such
Competitive Activity so long as WFC Parent or its Subsidiary, as applicable,
agrees to hold such Person or business separate and apart from its other
businesses and those of its affiliates (with no integration of businesses,
operations or personnel) and to offer Purchaser the opportunity to purchase such
Person or business and, if Purchaser declines such opportunity, to dispose of
such Person or business as soon as reasonably practicable and in any case within
eighteen months of the date of such acquisition or investment on terms no more
favorable to WFC Parent or its Subsidiary than those offered to Purchaser; (vi)
engaging in any business engaged in by WFC Parent or its Subsidiaries (other
than WFNB, Seller or the WFC Companies) on the date of this Agreement; and (vii)
owning securities of up to five percent (5%) of the total shares of all classes
of voting securities outstanding of any entity having securities listed on a
national securities exchange or NASDAQ.
(c) Notwithstanding anything contained herein, the provisions of this
Article IX shall not apply to the Seller, WFC Parent or any Subsidiary of WFC
Parent with respect to any portion of the Business or to any Assets which have
not been subject to closing provided for in Article II until such closing has
occurred.
"Territory" means any locality, state or territory in the United States and
Mexico and any locality, state, territory or country in Europe.
9.2 Scope. The parties understand and agree that the scope of the covenants
contained in this Article IX, as to activities, time and area covered, are
necessary and are intended to protect the interests of the Purchaser in the
Business and the Assets while protecting the interest of the Seller and its
Affiliates in the continuing business of the Seller and its Affiliates. It is
the parties' intention that these covenants be enforced to the greatest extent
(but to no greater extent) in time, area and degree of participation as is
permitted by applicable Law.
<PAGE>
9.3 Remedy for Breach. The parties agree that, in the event of a breach or
threatened breach of the Seller's covenants in Section 9.1, the damage to the
value of the Assets will be irreparable and extremely difficult to estimate,
making any relief under Article XII inadequate. Accordingly, the parties agree
that the Purchaser shall be entitled to injunctive relief against the Seller (or
applicable Affiliate thereof), upon making an adequate showing of a breach or
threatened breach of any of such covenants by the Seller or by the Purchaser (or
applicable Affiliate thereof), respectively, in addition to any other relief
available under Article XII of this Agreement.
ARTICLE X
EMPLOYEES; EMPLOYEE BENEFITS
10.1 Offer of Employment. Schedule 10.1(a) contains a list of all employees
of the Seller, WFC Parent, WFC Companies and their Affiliates who were actively
performing services in connection with the Business as of August 31, 1997.
Schedule 10.1(b) contains a list of all employees of the Seller, WFC Parent, WFC
Companies and their Affiliates who would have been actively performing services
in connection with the Business as of August 31, 1997 but for the fact that they
were on short term disability leave pursuant to the short term disability plan
of the Seller, WFC Parent, WFC Companies or their Affiliates. Schedule 10.1(a)
shall be updated by the Seller immediately prior to the Closing Date (and, if
Section 2.8 shall be applicable immediately prior to each closing provided for
thereunder) (a "Subsequent Closing Date") to reflect new employees of the
Seller, WFC Parent, WFC Companies and their Affiliates hired after such date in
the normal course who performed services in connection with the Business, and
employees who recover from short term disability and return to active employment
by said Closing Date (and any Subsequent Closing Date), and to remove any
individual who becomes entitled to short term disability benefits under any
Benefit Plan after August 31, 1997. Schedule 10.1(b) shall be updated by the
Seller immediately prior to the Closing Date (and any Subsequent Closing Date)
to add employees who were previously listed on Schedule 10.1(a) who suffer a
short term disability prior to the Closing Date (or any Subsequent Closing Date)
and to delete employees who recover from a short term disability prior to the
Closing Date (or a Subsequent Closing Date). On the Closing Date and on any
Subsequent Closing Date, as applicable, the Purchaser shall offer employment to
all persons on Schedule 10.1(a) other than WFNB employees who were employees of
the Seller, WFC Parent, WFC Companies or their Affiliates on the day immediately
preceding the Closing Date or such Subsequent Closing Date, at which the portion
of the Business in which such person was primarily engaged is to be acquired by
the Purchaser. In addition, the Purchaser shall offer employment, as of the date
Purchaser confirms in accordance with Purchaser's standard personnel policies
that each such person has recovered from said disability, to those persons
listed on
<PAGE>
Schedule 10.1(b) who recover from their short term disability on or before six
months after the relevant Closing Date or Subsequent Closing Date. Persons who
are offered employment by the Purchaser pursuant to the immediately preceding
two sentences hereto shall be referred to hereto as the "Employees." The offer
of employment shall be at substantially the same compensation and upon the same
terms and conditions as those under which they were employed by the Seller, WFC
Parent, WFC Companies or their Affiliates, as applicable; except that Employees
who are hired by Purchaser and WFNB employees ("Transferred Employees") shall
generally be eligible to participate in the Purchaser's employee benefit plans
available to Purchaser's similarly situated employees on such terms and
conditions as are customarily employed by Purchaser. The Purchaser shall pay any
Transferred Employee (except any Transferred Employee who has entered into a
written employment agreement with WFC Parent, WFC Companies or their Affiliates
and is designated as a "senior manager" on Schedule 10.1(a) or Schedule 10.1(b))
whose employment is terminated on or before the first anniversary of the Closing
Date severance pay in cash in an amount equal to 0.28% of such Employee's annual
base salary as of the date of termination of employment multiplied by the number
of full months of such Employee's service with Seller, WFC Parent, WFC Companies
or their Affiliates, as applicable. Any other obligations and liabilities with
respect to severance pay, however incurred, whether by contract, law or
otherwise, shall be the sole responsibility of the Seller.
The parties agree that any WARN liability (including the duty to issue
WARN notices) and any liability under similar foreign or state Laws, including
the Michigan employee-owned corporation act, which is attributable to
terminations of employees of the Seller, WFC Parent, WFC Companies or their
Affiliates before the Closing Date or the relevant Subsequent Closing Date, as
applicable, is the responsibility of the Seller, WFC Parent, WFC Companies or
their Affiliates in connection with the Business or the transaction contemplated
by the Agreement and that any WARN liability (including the duty to issue WARN
notices) and any liability under similar foreign or state Laws, including the
Michigan employee-owned corporation act, which is attributable to terminations
of employment on or after the Closing Date or the relevant Subsequent Closing
Date, as applicable, is the responsibility of the Purchaser. The Purchaser
covenants and agrees to honor any reinstatement rights of the Employees under
any federal, foreign and state law.
10.2 Service Crediting. Effective as of the Closing Date or the
relevant Subsequent Closing Date, as applicable, the Purchaser will count the
service of each Transferred Employee with Seller, WFC Parent, WFC Companies and
their Affiliates under Purchaser's vacation policy and welfare benefit Plans
applicable to such Transferred Employee. On or prior to the Closing Date or the
relevant Subsequent Closing Date, as applicable, Seller shall pay each
Transferred Employee, in cash, the full amount of his or
<PAGE>
her accrued vacation under all plans or policies of Seller, WFC Parent, WFC
Companies and its Affiliates. In addition, such service shall be counted by
Purchaser in terminations determining each Transferred Employee's eligibility to
participate in, and each such Transferred Employee's vested percentage in, each
of Purchaser's employee benefit plans (as defined in Section 3(3) of ERISA)
applicable to such Transferred Employee.
10.3 401(k) Plan. Immediately following the retirement or other
termination of employment with Purchaser and all of its Affiliates of each
Transferred Employee, Purchaser shall notify the sponsor of the Whirlpool 401(k)
Trust in writing of such fact in order to enable the Whirlpool 401(k) Trust to
make distribution to such Transferred Employee. In addition, Purchaser shall use
its reasonable best efforts to facilitate the transmission to each such
Transferred Employee of information about the Whirlpool 401(k) Trust and the
Whirlpool 401(k) Plan including but not limited to the transmission of summary
plan descriptions, summaries of material modification, and summary annual
reports.
10.4 Medical, Dental and Life Insurance Programs. Transferred
Employees shall generally be eligible to participate in the Purchaser's medical,
dental and life insurance programs available to Purchaser's similarly situated
employees on such terms and conditions as are customarily employed by Purchaser.
Seller and WFC Parent shall retain or assume all liabilities for active and
retiree medical, dental and life insurance benefits for all disabled, former or
retired employees of Seller, WFC Companies or WFC Parent, including all
Employees who are not Transferred Employees. With respect to Transferred
Employees (i) Purchaser and its medical, dental and life insurance programs will
be liable only for claims covered under the terms of Purchaser's plans that are
incurred after the Closing Date or the relevant Subsequent Closing Date, as
applicable, (ii) Purchaser's medical plan shall take into account expenses
incurred by Transferred Employees during the plan year in which the Closing Date
or the relevant Subsequent Closing Date, as applicable, occurs, for purposes of
determining deductibles and out-of-pocket limits under Purchaser's medical plan
for the remainder of the plan year under Purchaser's medical plan, and (iii)
Purchaser and its medical plan shall waive all limitations as to pre-existing
condition exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Transferred Employees that were not
satisfied as of the close of business on the date preceding the Closing Date or
the relevant Subsequent Closing Date, as applicable. Purchaser shall have no
liability for any continuation coverage under Part 6 of Title I of ERISA or
under Code Section 4980B under any Benefit Plan maintained by Seller or an ERISA
Affiliate. All such liabilities shall be Seller's exclusively.
10.5 Long Term and Short Term Disability Programs. Transferred
Employees shall generally be eligible to participate
<PAGE>
in the Purchaser's long term and short term disability programs available to
Purchaser's similarly situated employees on such terms and conditions as are
customarily employed by Purchaser. Seller and WFC Parent shall retain all
liabilities for long term and short term disability benefits for all former,
disabled or retired employees of Seller, WFC Parent and WFC Companies, including
all Employees who are not Transferred Employees. With respect to Transferred
Employees, Purchaser and its long and short term disability programs will be
liable only for claims covered under the terms of Purchaser's plans that are
incurred after the Closing Date or the relevant Subsequent Closing Date, as
applicable.
10.6 Educational Assistance Programs. Transferred Employees shall
generally be eligible to participate in the Purchaser's educational assistance
program for similarly situated employees on such terms and conditions as are
customarily employed by Purchaser. Purchaser's educational assistance programs
will only be liable for claims covered under the terms of Purchaser's plans that
are incurred after the Closing Date or the relevant Subsequent Closing Date, as
applicable.
10.7 Amendment or Termination Plans. Nothing in this Article X shall
be construed to limit or restrict the Purchaser, Purchaser's Parent or any of
the Purchaser's Affiliates in any way from amending or terminating any employee
benefit or compensation plan program or arrangement that it maintains or to
which it contributes, except to the extent that such amendment or termination
would cause the Purchaser to violate any of the obligations imposed upon it
under this Article X.
10.8 Bonuses. Seller shall pay all bonuses owed to employees of the
Business with respect to which there shall be an accrual on the books of Seller,
such payments to be made in accordance with the Seller's customary policies and
practices.
ARTICLE XI
TERMINATION
11.1 Grounds for Termination. This Agreement may be terminated, and the
transactions contemplated hereby abandoned, at any time prior to the Closing:
(a) by the mutual written agreement of the Seller and the Purchaser;
(b) by the Seller or by the Purchaser if the Closing contemplated by
Section 2.6 shall not have been consummated on or before January 31, 1998, or
such other date, if any, as the Seller and the Purchaser shall agree to in
writing (the "Termination Date"), provided, however, that a party shall not have
the right to so terminate this Agreement if the failure of the purchase and sale
to have occurred shall be due to a breach by
<PAGE>
such party (or an Affiliate of such party) of any of its agreements or covenants
contained herein required to be performed by it at or prior to the Closing
pursuant to the terms hereof; and
(c) by the Seller or the Purchaser, respectively, in the event of a
material breach by the other parties, of any representation, warranty, covenant
or agreement contained herein, material to the overall transaction contemplated
hereby, which is not cured or cannot be cured within thirty (30) days after
written notice of such proposed termination has been delivered to the breaching
party.
Any party desiring to terminate this Agreement pursuant to any of the foregoing
clauses (b) and (c) shall give notice of such proposed termination to the other
parties.
11.2 Effect of Termination.
---------------------
(a) If this Agreement is terminated as permitted by Section 11.1,
such termination shall be without liability of any party (or any shareholder,
Affiliate, director, officer, employee, agent, consultant or representative of
such party) to the other party; (a) provided, that if such termination shall
result from a willful breach by a party of its representations, warranties,
agreements or covenants set forth in this Agreement, such party which has so
willfully breached shall be fully liable for, subject to any applicable
limitations in Article XII, any and all Losses sustained or incurred by the
other party as a result of such breach. Notwithstanding anything in this Section
11.2 or any other provision in this Agreement to the contrary, neither the
Purchaser nor the Seller shall have any liability to the other if the
transactions contemplated hereunder are not consummated by virtue of the failure
to obtain any approval, consent or other clearance from any Governmental
Authority required by either of them to be obtained by it in order to consummate
the transactions contemplated hereunder, except if such failure is caused by a
willful breach by such party of its representations, warranties, agreements or
covenants hereunder, in which case the proviso of the immediately preceding
sentence shall apply. Article XII and Sections 14.3, 14.8, 14.13, 14.14 and
14.15 shall survive any termination of this Agreement.
(b) If the Seller terminates this Agreement pursuant to Section
11.1(c), then, in addition to the retention of the $500,000 specified in the
following sentence, the Purchaser shall pay the Seller the amount of $10 million
as liquidated damages and not as a penalty. The Seller shall retain the $500,000
paid by Purchaser or an Affiliate thereof prior to the date hereof, plus accrued
interest thereon, as partial payment of the liquidated damages provided for in
the preceding sentence. Recovery of such liquidated damages shall be the sole
and exclusive remedy of the Seller against the Purchaser, the Purchaser's Parent
and any Affiliate thereof. The Seller shall be entitled to recover such
liquidated damages regardless of the amount of
<PAGE>
damages actually incurred, the parties agreeing that actual damages would be
difficult to determine and that the amount set forth herein is a fair and
equitable amount to compensate the Seller.
ARTICLE XII
EXTENT AND SURVIVAL OF REPRESENTATIONS,WARRANTIES,
COVENANTS AND AGREEMENTS; INDEMNIFICATION
12.1 Survival; Remedy for Breach.
---------------------------
(a) The representations and warranties contained in this Agreement or
in any agreement, certificate or other document delivered at the Closing
(collectively, the "Closing Documents") shall survive the Closing until the
first anniversary of the Closing Date, at which time they shall expire, except
that the representations and warranties set forth in Sections 4.2, 4.6(a), 4.11
and 5.2 shall survive the Closing and not expire until the expiration of the
applicable statutes of limitation. No claim regarding a breach of any such
representation or warranty shall be made for the first time after the date such
representation or warranty expires. The agreements and covenants of the parties
contained in this Agreement or in any Closing Document shall survive the
Closing).
(b) Except as provided otherwise in Articles VII, IX and XI, the sole
and exclusive monetary remedy of the Purchaser and the Seller for any breach of
any covenant or agreement, or any inaccuracy or other breach of any
representation or warranty, contained in this Agreement or any Closing Document
(but excluding the Shared Facilities and Transition Services Agreement, the
Trademark License Agreement and the Strategic Alliance Services Agreement) shall
be the indemnities contained in Sections 12.2 and 12.3, respectively.
12.2 Indemnification by the Seller.
-----------------------------
(a) Subject to Sections 12.1, 12.2(b) and 12.2(c), the Seller hereby
agrees to indemnify and defend the Purchaser, its Affiliates, officers,
directors, employees, agents, successors and assigns and related entities
against, and agrees to hold the Purchaser, its Affiliates, officers, directors,
employees, agents, successors and assigns and related entities harmless from,
any Losses incurred or suffered by them arising out of:
(i) any inaccuracy or other breach of any representation or
warranty made by the Seller or WFC Parent in this Agreement or any Closing
Document;
(ii) any breach of any covenant or agreement to be performed
by the Seller pursuant to this Agreement or any Closing Document;
<PAGE>
(iii) the Excluded Liabilities, the Excluded Assets and the
Excluded Business and any legal, administrative or arbitration proceeding,
suit or action of any nature with respect thereto (including, without
limitation, with respect to reaffirmation agreements relating to
bankruptcy, insolvency and debtor relief laws);
(iv) the fees of Goldman, Sachs & Co. owed by the Seller as a
result of the transactions contemplated hereunder; and
(v) the waiver set forth in Section 14.3 hereof.
(b) The liability of the Seller to provide indemnification
pursuant to Section 12.2 shall be limited as follows:
(i) the aggregate of all Losses for breaches of Section 4.8
shall be reduced by the specific reserves related to the accounts covered
thereby which are set forth on the Closing Balance Sheet, to the extent
applicable.
(ii) The Seller shall not be liable with respect to any matter
referred to in Section 12.2(a)(i), except to the extent that the aggregate
Losses (after giving effect to clause (i) above, to the extent applicable)
exceed $1 million and, in such event, only for aggregate Losses in excess
of such $1 million. The Seller's aggregate liability under Section
12.2(a)(i) shall not exceed $150 million.
(iii) Notwithstanding anything to the contrary in this Section
12.2(b), the limits on liability set forth in this Section 12.2(b) shall
not apply to any payments required to be made under Section 3.3.
(c) The amount for which the Seller shall be liable in respect of any
Loss pursuant to Section 12.2(a) shall be reduced to the extent that the
Purchaser or any Affiliate thereof shall realize: (i) any net Tax benefit
arising from the Loss and (ii) any net proceeds recovered from insurers or other
third parties with respect to such Loss. If the Purchaser shall have received or
shall have had paid on its behalf an indemnity payment in respect of a Loss and
shall subsequently receive directly or indirectly such proceeds, then the
Purchaser shall promptly pay to the Seller, the net amount of such proceeds or,
if less, the amount of such indemnity payment. The Purchaser shall promptly
recover insurance proceeds or net Tax benefits that may be due to the Purchaser.
If a net Tax benefit is realized through a reduction of Taxes or a credit
against Taxes due, such benefit shall be considered realized upon the earlier of
the filing date or the due date of the Tax return or report on which such
reduction or credit is reflected or upon the due date of the payment against
which such credit is offset. If a net Tax
<PAGE>
benefit is realized by the receipt of a refund of Taxes, such benefit shall be
considered realized upon the date such refund is received. Such net Tax benefit
shall be calculated by taking into account the effect of any event giving rise
to a Loss and the effect of any payment pursuant to this Section 12.2.
(d) For purposes of determining if an Indemnified Party is entitled to
indemnification hereunder and the amount thereof, (i) all representations and
warranties contained herein shall be considered without reference to
materiality, material adverse effect or knowledge qualifiers and (ii) Section
4.8 shall be deemed to read in its entirety as set forth in Exhibit 12.2.
12.3 Indemnification by the Purchaser.
--------------------------------
(a) Subject to Sections 12.1 and 12.3(b), the Purchaser hereby agrees
to indemnify and defend the Seller and its Affiliates against, and agrees to
hold it and them harmless from, any Losses incurred or suffered by it arising
out of:
(i) any inaccuracy or other breach of any representation or
warranty made by the Purchaser in this Agreement or any of the Closing
Documents;
(ii) any breach of any covenant or agreement to be performed
by the Purchaser pursuant to this Agreement or any Closing Document;
(iii) any Assumed Liability;
(iv) any liability or obligation arising with respect to an
arrangement requested by the Purchaser to provide the Purchaser the
benefits under a Contract or Client Contract pursuant to Section 2.2(b);
(v) any liability or obligation arising from the operation of
the Business or the Assets by the Purchaser (or any of its Affiliates, or
their respective successors or assigns) after the Closing;
(vi) the claims of any Employees arising out of the
Purchaser's failure to offer employment as required in Section 10.1, and if
such offer is subsequently accepted, failure to hire, that person or
persons; and
(vii) any liability or obligation assumed by the Purchaser
pursuant to Article X.
(b) The Purchaser shall not be liable with respect to any matter
referred to in Section 12.3(a)(i), except to the extent that the aggregate
Losses exceed $1 million and, in such event, only for aggregate Losses in
excess of such $1 million. The Purchaser's aggregate
<PAGE>
liability under Section 12.3(a)(i) shall not exceed $150 million.
(c) The amount for which the Purchaser shall be liable in respect of
any Loss pursuant to Section 12.3(a) shall be reduced to the extent that the
Seller or any Affiliate thereof shall realize: (i) any net Tax benefit arising
from the Loss, and (ii) any net proceeds recovered from insurers or other third
parties with respect to such Loss. If the Seller shall have received or shall
have had paid on its behalf an indemnity payment in respect of a Loss and shall
subsequently receive directly or indirectly such proceeds, then the Seller shall
promptly pay to the Purchaser, as applicable, the net amount of such proceeds
or, if less, the amount of such indemnity payment. The Seller shall promptly
recover insurance proceeds or net Tax benefits that may be due to the Seller. If
a net Tax benefit is realized through a reduction of Taxes or a credit against
Taxes due, such benefit shall be considered realized upon the earlier of the
filing date or the due date of the Tax return or report on which such reduction
or credit is reflected or upon the due date of the payment against which such
credit is offset. If a net Tax benefit is realized by the receipt of a refund of
Taxes, such benefit shall be considered realized upon the date such refund is
received. Such net Tax benefit shall be calculated by taking into account the
effect of any event giving rise to a Loss and the effect of any payment pursuant
to this Section 12.3.
12.4 Procedures Governing Indemnification.
------------------------------------
(a) Except as provided in Sections 12.4(b) and 12.4(e), as soon as is
reasonably practicable after becoming aware of a claim for indemnification under
this Article XII and of any actual or reasonably likely Loss in connection
therewith, the party hereto seeking such indemnification (an "Indemnified
Person") shall promptly give notice to the party hereto against whom such
indemnification is sought (the "Indemnifying Person") of such claim and, if
known, the amount of the Loss the Indemnified Person will be entitled to receive
hereunder from the Indemnifying Person (together with such information, if
available, as may be necessary for the Indemnifying Person to determine that the
limitations contained in Section 12.2(b), as applicable, have been satisfied or
do not apply). The failure of the Indemnified Person to give such notice shall
not relieve the
<PAGE>
Indemnifying Person of its obligations with respect to such
claim for indemnification except to the extent (if any) that the Indemnifying
Person shall have been materially prejudiced thereby.
(b) This Section 12.4(b) shall apply if a Person not a party hereto
(or an Affiliate of such party) shall assert any claim, or commence any suit,
action or proceeding against an Indemnified Person in respect of which indemnity
may be sought under this Article XII. The Indemnified Person shall give notice
as promptly as is reasonably practicable to the Indemnifying Person of the
assertion of such claim, or the commencement of any such suit, action or
proceeding (together with such information, if available, as may be necessary
for the Indemnifying Person to determine that the limitations contained in
Section 12.2(b) have been satisfied or do not apply). The failure of the
Indemnified Person to give notice shall not relieve the Indemnifying Person of
its obligations under this Article XII except to the extent (if any) that the
Indemnifying Person shall have been materially prejudiced thereby. The
Indemnifying Person may, at its own expense, (i) participate in the defense of
any such claim, suit, action or proceeding and (ii) within 15 business days of
receipt of such notice and upon notice to the Indemnified Person, assume the
defense thereof; provided, however, that the Indemnifying Person shall
thereafter consult with the Indemnified Person upon the Indemnified Person's
reasonable request for such consultation from time to time with respect to such
claim, suit, action or proceeding. If the Indemnifying Person assumes such
defense, the Indemnified Person shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Person. If, however, the
Indemnified Person reasonably determines in its judgment that representation by
the Indemnifying Person's counsel of both the Indemnifying Person and the
Indemnified Person would present such counsel with a material conflict of
interest, then such Indemnified Person may employ separate counsel to represent
or defend it in any such claim, action, suit or proceeding and the Indemnifying
Person shall, subject to the limitations contained in Section 12.2, pay the
reasonable fees and disbursements of such separate counsel.
(c) Any settlement or compromise made or caused to be made by the
Indemnified Person or the Indemnifying Person, as the case may be, of any such
claim, suit, action or proceeding of the kind referred to in Section 12.4(b)
being defended by such Person shall be binding upon the other Person, in the
same manner as if a final judgment or decree had been entered by a court of
competent jurisdiction in the amount of such settlement or compromise.
Notwithstanding the foregoing, (i) no obligation, restriction or expense shall
be imposed on the Indemnified Person as a result of such settlement without its
prior written consent and (ii) the Indemnified Person will give the Indemnifying
Person at least thirty (30) days' notice of any proposed settlement or
compromise of any claim, suit,action or proceeding it is
<PAGE>
defending, during which time the Indemnifying Person may reject such proposed
settlement or compromise; provided, however, that from and after such rejection,
the Indemnifying Person shall be obligated to assume the defense of such claim,
suit, action or proceeding (subject to any limitations on the Indemnifying
Person's obligation to indemnify the Indemnified Person set forth in this
Agreement).
(d) In the event that the Indemnifying Person, after written notice
thereof, does not elect to assume the defense of any claim, suit, action or
proceeding of the type referred to in Section 12.4(b), then any failure of the
Indemnified Person to defend or to participate in the defense of any such claim,
suit, action or proceeding, or to cause the same to be done, shall not relieve
the Indemnifying Person of its obligations hereunder.
(e) With respect to any claim, suit, action or proceeding of the type
referred to in Section 12.4(b), and whether or not the Indemnifying Person
chooses to defend or prosecute any such claim, suit, action or proceeding, the
Indemnifying Person shall cooperate with the Indemnified Person, including, as
may be reasonably requested by the Indemnifying Person, making available all
relevant records and files with respect to any such claim, suit, action or
proceeding, providing access to counsel of the Indemnified Person, if
applicable, and making available the personnel of such Indemnified Person,
whether as witnesses or for informational purposes; provided, that (i) such
access shall only take place in the presence of a representative of the
Indemnified Party, (ii) the Indemnified Party shall not be required to disclose
any information with respect to itself or any of its Affiliates and shall not be
required to participate in the defense of any claim to be indemnified hereunder
unless otherwise required or reasonably necessary to the defense of any claim to
be indemnified hereunder and (iii) the Indemnifying Party shall keep any
information of which it has come into possession confidential and not use such
information except in connection with indemnification hereunder.
ARTICLE XIII
DISPUTE RESOLUTION
13.1 General. Except as set forth in Sections 3.2 and 11.2(b), the
procedures for arbitration set forth in this Article XIII will be the sole
remedies of the parties under this Agreement. In the event any dispute arises in
connection with this Agreement or the services provided hereunder, the parties
agree to use all commercially reasonable efforts to settle such dispute by
consulting and negotiating with each other, in good faith and understanding of
their mutual interest, to reach an equitable solution satisfactory to both
parties. In the event the parties are unable to resolve a dispute, either party
may request in writing that the dispute be referred to senior executives. If
such two senior executives of each party cannot
<PAGE>
resolve the dispute within 15 days of the matter being referred to them, the
disputes or differences shall be finally settled by arbitration in accordance
with the provisions of this Article XIII.
13.2 Procedures Governing Dispute Resolution. (a) Subject to Section
13.1, Any party may demand that any unresolved dispute hereunder be resolved by
binding arbitration. Notice of the demand for arbitration by one party shall be
given in writing to the other party to this Agreement. Upon such demand, the
dispute will be decided by arbitrators in accordance with the rules set forth in
this Section 13.2.
(b) A notice of demand for arbitration by one party given as set forth
in Section 13.2(a) shall include the appointment of an arbitrator named therein.
Within 30 days after such notice of demand for arbitration is given, the party
to which such notice is given shall similarly appoint an arbitrator by giving
written notice to the initiating party. If such party fails to appoint an
arbitrator within such time period, the initiating party may apply to any court
having jurisdiction over the parties and the controversy to compel arbitration,
and such court shall be empowered to select the failing party's arbitrator.
(c) The two arbitrators appointed in accordance with Section 13.2(b)
shall, within thirty (30) days after the appointment of the later of them to be
appointed, select a third arbitrator who shall act as chairman of the
arbitration panel. In the event that the arbitrators so appointed do not, within
thirty (30) days after the appointment of the later of them to be appointed,
agree on the selection of a third arbitrator, either party may apply to any
court having jurisdiction over the parties and the controversy to select the
third arbitrator. The arbitration panel shall set a time for the hearing of the
dispute which shall not be later than sixty (60) days after the date of
appointment of the third arbitrator, and the final decision of the arbitrators
shall be rendered in writing to the parties not later than sixty (60) days after
the last hearing date, unless otherwise agreed by the parties in writing.
(d) The place of any arbitration hereunder shall be Chicago, Illinois,
or at such other place as agreed to by the parties.
(e) Any arbitration hereunder shall be conducted in accordance with
the rules of the American Arbitration Association ("AAA") then prevailing, and
the decision of the arbitrators shall be final and binding on the parties, and
shall be enforceable in any court having jurisdiction over the parties.
Compliance with the provisions of this Agreement concerning arbitration of
disputes is a condition precedent to the commencement of any suit, action or
proceeding in any federal, state or local court with respect to any controversy
or dispute under
<PAGE>
this Agreement, except a suit, action or proceeding which challenges the
validity of any provision of this Agreement.
(f) Any party may send out requests to compel document production from
the other party. Disputes concerning the scope of document production and
enforcement of the document production requests will be determined by written
agreement of the parties or, failing such agreement, will be referred to the
arbitration panel for resolution. All discovery requests shall be subject to the
proprietary rights and rights of privilege of the parties, and the arbitrators
shall adopt procedures to protect such rights. Except where contrary to the
provisions set forth in this Agreement, the rules of the AAA for commercial
arbitration shall be applied to all matters of procedure, including discovery;
provided, however, that the arbitration shall not be conducted under the
auspices of the AAA and the fee schedule of the AAA shall not apply. The
arbitrators may obtain independent legal counsel to aid in their resolution of
legal questions presented in the course of arbitration, to the extent they
consider that such counsel is absolutely necessary to a fair resolution of the
dispute, and to the extent that it is economical to do so considering financial
consequences of the dispute. The arbitrators shall be limited to interpreting or
construing the applicable provisions of this Agreement, and shall have no
authority or power to alter, amend, modify, revoke or suspend any condition or
provision of this Agreement; it being understood, however, that the arbitrators
shall have full authority to implement the provisions of this Agreement,
including provisions requiring further agreement of the parties hereunder, and
to fashion appropriate remedies for breaches of this Agreement, provided that
the arbitrators shall not have any authority in excess of the authority a court
having jurisdiction over the parties and the controversy or dispute would have
absent these arbitration provisions.
(g) If a party fails or refuses to appear at and participate in an
arbitration hearing after due notice, the arbitration panel may hear and
determine the controversy upon evidence produced by the appearing party.
(h) The arbitration costs will be borne one-half by the Seller and
one-half by the Purchaser, except that each party will be responsible for its
own expenses and the costs of witnesses selected by such party.
13.3 Continuation of Commitments; Specific Performance. Unless otherwise
agreed in writing, the parties will continue to provide service and honor all
other commitments under this Agreement during the course of dispute resolution
pursuant to the provisions of this Article XIII. In addition, each party shall
be entitled to obtain specific performance of the obligations of the other
parties hereunder.
<PAGE>
ARTICLE XIV
MISCELLANEOUS
14.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given (a) when delivered, if delivered personally,
(b) when sent and receipt is confirmed, if sent by facsimile transmission and
(a) five (5) Business Days after mailing, if mailed by registered or certified
mail, return receipt requested, to the parties at the following addresses (or
such other addresses as they may hereafter specify by a notice complying
herewith):
(a) If to the Seller, to:
Whirlpool Corporation
2000 M 63 North
Benton Harbor, Michigan 49022
Attention: General Counsel
Facsimile No.: (616) 923-3722
with a copy to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: John R. Sagan
Facsimile No.: (312) 701-7711
(b) If to the Purchaser, to:
Transamerica Corporation
600 Montgomery Street
San Francisco, California 94111
Attention: Richard H. Fearon
Facsimile No.: (415) 983-4165
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff
Facsimile No.: (212) 403-2000
14.2 Expenses. Except as otherwise specifically provided in this
Agreement, including Section 14.10, all legal and other costs and expenses
incurred in connection with the preparation, execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby shall be
paid by the party that incurred such costs and expenses.
14.3 Bulk Sales. The parties hereby waive compliance with the
requirements of: (a) all applicable state Tax laws that may require
notification of state taxing authorities and related
<PAGE>
actions in respect of bulk sales of assets outside of the ordinary course of
business, and (b) any bulk transfer laws (such as Article 6 of the Uniform
Commercial Code as enacted in any state).
14.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
assigns. Neither this Agreement, any agreement, document or instrument
contemplated herein nor any right or obligation hereunder or thereunder may be
assigned by any party without the consent of the other; provided, however that
any party may, without the consent of the other, assign this Agreement, any
agreement, document or instrument contemplated herein or any right or obligation
hereunder or thereunder to (i) one or more of its wholly-owned, direct or
indirect subsidiaries or (ii) one or more of its direct or indirect parent
entities. Notwithstanding the foregoing, no party shall have the right to assign
any right or obligation under this Agreement or any agreement, document or
instrument contemplated herein if such assignment may reasonably be expected to
result in (a) any material increase in the obligations of the other party under
this Agreement or any agreement, document or instrument contemplated herein, or
(b) the failure of the Closing to occur or a delay in the occurrence of the
Closing.
14.5 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and no provision of this Agreement shall be deemed
to confer upon any other third party any remedy, claim, liability,
reimbursement, cause of action or other right; provided, however that those
Persons expressly set forth in Section 12.2 are intended beneficiaries of
Article XII.
14.6 Entire Agreement; Waiver; Amendment.
(a) This Agreement, together with any agreement, document or
instrument contemplated herein, embodies the entire agreement of the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements with respect thereto.
(b) This Agreement may not be amended except upon the written
agreement of the parties. Any failure of the Seller or the Purchaser to comply
with any provision of this Agreement may be expressly waived by the Purchaser or
the Seller, respectively, but any such waiver or failure to insist upon full
compliance with such provision shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No failure to exercise and no
delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy or
power hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy or power provided herein or by law or in equity. The
waiver by either party of the time for performance
<PAGE>
of any act or condition hereunder does not constitute a waiver of the act or
condition itself.
14.7 Public Statements. Prior to the Closing Date, except as required by
law (including in connection with any other transactions in which the Seller or
the Purchaser or any of their respective Affiliates is a participant, with
respect to filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended) or the rules of any stock exchange, no public announcement or other
publicity regarding the transactions referred to herein shall be made by the
Purchaser or the Seller or any of their respective Affiliates without the prior
agreement of the parties as to content, form, timing and publication; provided,
that nothing in this Section 14.7 shall prevent such parties from discussing
such transactions with, or making such announcements to, those Persons the
notification of whom or whose approval, waiver, consent, agreement or opinion,
as the case may be, is required for consummation of such particular transaction
or transactions. Such parties shall exercise all reasonable efforts to assure
that such Persons will agree to keep confidential any information relating to
this Agreement or any agreement, document or instrument contemplated herein.
14.8 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid and enforceable provision
as similar as possible to the provision at issue.
14.9 Certain Expenses; Transfer Taxes; Recording and Filing Fees;
Proration of Certain Taxes.
(a) The Purchaser and the Seller shall share equally all sales, use,
stamp, transfer and like Taxes, if any, excluding income and capital gains Taxes
of the Seller, which may become due and payable and are required to be paid in
connection with the transfer of the Assets pursuant hereto and shall share
equally all recording, filing, transfer and other fees (and the fees and costs
of any agent retained to effect any such recordations, filings or transfers)
required to be paid in connection with the transfer of the Assets pursuant to
this Agreement or any agreement, document or instrument contemplated herein.
All real estate, personal property and ad valorem Taxes relating to the
Assets which shall have accrued and become payable prior to the latest of the
Closing Date, the date of the WFNB Purchase or the date on which all Foreign
Purchases have been consummated shall be paid by the Seller. All such taxes
which shall be accrued but unpaid shall be prorated to the date of the
applicable closing. All such Taxes accruing on or after the latest of the
Closing Date, the date of the WFNB Purchase or
<PAGE>
the date on which all Foreign Purchases have been consummated shall be paid by
the Purchaser. In connection with such proration of taxes, in the event that
actual Tax figures are not available at the date of the applicable closing,
proration of Taxes shall be based upon the actual Taxes for the preceding year
for which actual Tax figures are available. The amount due one party as the
result of such proration shall be paid to the other party at the time of the
delivery of the Closing Statement.
14.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall together constitute one and the same original
instrument, and shall become effective when one or more counterparts hereof have
been signed by the Purchaser and delivered to the Seller and one or more
counterparts hereof have been signed by the Seller and delivered to the
Purchaser.
14.11 Necessary and Desirable Actions. The Seller and the Purchaser agree
to cooperate fully with each other in connection with obtaining the satisfaction
of the conditions set forth in Article VIII. The Seller and the Purchaser agree
to execute and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be reasonable, and necessary or
desirable, in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and any agreement, document or instrument
contemplated herein.
14.12 Tax Matters.
For purposes of this Section 14.12, "Closing Date" shall mean, with
respect to each of WFNB and each WFC Company, the date on which the closing with
respect to such entity occurs.
(a) Section 338 Elections and Forms. (i) With respect to Purchaser's
acquisition of the WFNB Shares and the shares of capital stock of the WFC Stock
Companies (together, the "Acquired Shares"), Purchaser shall properly make all
available Section 338(g) Elections in accordance with applicable Tax Laws. With
respect to Seller's sale of the Acquired Shares hereunder, Seller and Purchaser
shall jointly make all available Section 338(h)(10) Elections in accordance with
applicable Tax Laws and as set forth herein. Purchaser and Seller agree to
report the transfers under this Agreement consistent with the Section 338
Elections, and shall take no position contrary thereto unless required to do so
by applicable Tax Laws pursuant to a Determination.
Purchaser shall be responsible for the preparation and filing of all
Section 338 Forms in accordance with applicable Tax Laws and the terms of this
Agreement. Seller shall execute and deliver to Purchaser such documents or forms
as are reasonably requested and are required by any Tax Laws properly to
complete the Section 338 Forms, at least 20 days prior to the date such Section
338 Forms are required to be filed.
<PAGE>
Purchaser and Seller agree that they shall use their best efforts to
enter into an agreement (the "Allocation Agreement") as soon as practicable
after the Closing Date concerning the computation of the Modified Aggregate
Deemed Sale Price (as defined under applicable Treasury Regulations) of the
Assets and (x) the allocation of such Modified Aggregate Deemed Sale Price and
(y) amounts allocable to the other assets of the Business among such assets in
accordance with Section 1060 of the Code. Purchaser shall deliver to Seller a
proposed Allocation no later than 75 days after the Closing Date. If Seller has
not objected to such Allocation Agreement within thirty (30) days of receipt,
such agreement shall be deemed accepted and shall be the Allocation Agreement.
If Seller objects to Purchaser's proposed Allocation Agreement, Seller shall
give Purchaser notice of its objections (the "Seller Notice") and Seller and
Purchaser shall use all reasonable efforts to resolve their differences. If,
sixty days after delivery of the Seller Notice, Purchaser and Seller have not
adopted the Allocation Agreement as described above, any disputed aspects of the
Allocation Agreement or such revision shall be resolved within 30 days by the
Independent Accounting Firm. The costs, expenses and fees of the Independent
Accounting Firm shall be borne equally by Purchaser and Seller. Purchaser and
Seller agree to act in accordance with the allocations contained in the
Allocation Agreement in any relevant Tax returns or similar filings.
Notwithstanding the foregoing, the parties hereto agree to allocate the amount
set forth on Schedule 14.12 to the Trademark License Agreement.
(b) Tax Indemnification by Seller. Seller shall be liable for, and
shall hold Purchaser and its Affiliates and any successor corporations thereto
harmless from and against the following Taxes with respect to the Seller, the
WFC Companies and WFNB or the Business:
(i) any and all Taxes for any taxable period ending (or deemed,
pursuant to Section 14.12(d) hereof, to end) on or before the Closing Date,
including any Taxes incurred as a result of making the Section 338(h)(10)
Election or Elections other than Taxes properly reflected as liabilities on the
Closing Balance Sheet; and
(ii) any several liability of any WFC Stock Company or WFNB for Taxes
attributable to any taxable period ending on or before the Closing Date under
Treasury Regulations Section 1.1502-6 or under any comparable or similar
provision under state, local or foreign laws or regulations.
(c) Tax Indemnity by Purchaser. Purchaser shall be liable for, and
shall hold Seller harmless from and against any and all Taxes for any taxable
period beginning (or deemed pursuant to Section 14.12(d) hereof, to begin) on or
after the Closing Date incurred by the WFC Companies or WFNB or the Business.
<PAGE>
(d) Allocation of Certain Taxes. (i) Purchaser and Seller agree
that if any of the WFC Companies or WFNB is permitted but not required under
applicable state or local Tax laws to treat the day before the Closing Date or
the Closing Date as the last day of a taxable period, Purchaser and Seller shall
treat the Closing Date as the last day of a taxable period.
(ii) Any Taxes based on income, gain or similar items ("Income Taxes")
for a taxable period beginning before the Closing Date and ending after the
Closing Date (a "Straddle Period") shall be apportioned between Seller and
Purchaser based on the actual operations of the WFC Companies and WFNB, as the
case may be, during the portion of such period ending on the Closing Date and
the portion of such period beginning on the day following the Closing Date, and
for purposes of the provisions of paragraphs (b), (c), (d) and (f) of this
Section 14.12, each portion of such period shall be deemed to be a taxable
period (whether or not it is in fact a taxable period). All Taxes other than
Income Taxes ("Other Taxes") relating to a Straddle Period shall be apportioned
between Purchaser and Seller based on the number of days during the portion of
such period occurring on and before the Closing Date, and the number of days
during such period occurring after the Closing Date and for purposes of
paragraphs (b), (c), (d) and (f) of this Section 14.12 each portion of such
period shall be deemed to be a taxable period (whether or not it is in fact a
taxable period). To the extent estimated Taxes have been paid prior to the
Closing Date or are accrued on the Balance Sheet with respect to a Straddle
Period, Seller's liability, with respect thereto shall be reduced by that
amount; provided, further that if such payment or accrual of Taxes exceeds
Seller's liability as calculated pursuant to the apportionment described in this
paragraph (d), Purchaser shall promptly pay Seller the amount of such excess.
Upon timely notice from Purchaser, Seller shall pay to Purchaser at least 10
days prior to the date any payment for Taxes as described in this paragraph (d)
is due, Seller's share of such Taxes as described in this paragraph (d).
(e) Filing Responsibility. (i) Seller shall prepare and file or
shall cause the WFC Companies and WFNB to prepare and file the following returns
with respect to the WFC Companies and WFNB:
(x) all Income Tax returns for any taxable period ending on or before
the Closing Date (including, without limitation, any deemed sale
return resulting from the filing of a Section 338 Election) other
than returns for Straddle Periods referred to in paragraph (d);
(y) all other returns with respect to Other Taxes required to be
filed (taking into account extensions) prior to the Closing Date;
and
<PAGE>
(ii) Purchaser shall file all other returns with respect to the WFC
Companies and WFNB.
(f) Refunds. (i) Seller shall be entitled to any refunds or credits
of Taxes with respect to the Business attributable to or arising in taxable
periods ending (or deemed, pursuant to Section 14(d), to end) on or before the
Closing Date.
(ii) Purchaser shall be entitled to any refunds or credits of Taxes
with respect to the Business attributable to or arising in taxable periods
beginning (or deemed, pursuant to Section 14(d), to begin) on or after the
Closing Date.
(iii) Purchaser shall promptly forward to Seller or to reimburse
Seller for any refunds or credits due Seller (pursuant to the terms of this
Section 14.12) after receipt thereof, and Seller shall promptly forward to
Purchaser or reimburse Purchaser for any refunds or credits due Purchaser
(pursuant to the terms of this Section 14.12) after receipt thereof.
(g) Cooperation and Exchange of Information. (i) For a period of six
(6) years after the Closing Date, Purchaser shall retain all returns, books and
records (including computer files) of, or with respect to the activities of the
Business for all taxable periods ending on or prior to the Closing Date.
Thereafter, Purchaser shall not dispose of any such returns, books or records
unless it first offers such returns, books and records to Seller and Seller
fails to accept such offer within sixty (60) days of its being made.
(ii) Purchaser and Seller and their respective Affiliates shall
cooperate in the preparation of all returns relating in whole or in part to
taxable periods ending on or before or including the Closing Date that are
required to be filed after such date. Such cooperation shall include, but not
be limited to, furnishing prior years' returns or return preparation packages
illustrating previous reporting practices or containing historical information
relevant to the preparation of such returns, and furnishing such other
information within such party's possession requested by the party filing such
returns as is relevant to their preparation. In the case of any state, local or
foreign joint, consolidated, combined, unitary or group relief system returns,
such cooperation shall also relate to any other taxable periods in which one
party could reasonably require the assistance of the other party in obtaining
any necessary information.
(iii) Seller shall have the right, at its own expense, to control any
audit or examination by any Taxing Authority ("Tax Audit"), initiate any claim
for refund, contest, resolve and defend against any assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to any and all
Taxes for any taxable period ending on or before the Closing Date with respect
to the Business. Purchaser shall have the right, at its
<PAGE>
own expense, to control any other Tax Audit, initiate any other claim for
refund, and contest, resolve and defend against any other assessment, notice of
deficiency, or other adjustment or proposed adjustment relating to the following
Taxes with respect to the Business.
(h) Definitions. For purposes of this Section 14.13, the following
terms shall have the meanings ascribed to them below:
(i) "Determination" means a "determination" as defined by Section
1313(a) of the Code.
(ii) "IRS" means the United States Internal Revenue Service.
(iii) "Returns" means returns, reports and forms required to be
filed with any domestic or foreign Taxing authority.
(iv) "Section 338 Forms" means all returns, documents, statements,
and other forms that are required to be submitted to any federal, state,
county, or other local Taxing Authority in connection with a Section 338(g)
Election or a Section 338(h)(10) Election. Section 338 Forms shall
include, without limitation, any "statement of section 338 election" and
IRS Form 8023-A (together with any schedules or attachments thereto) that
are required pursuant to Treas. Reg. Section 1.338-1 or Treas. Reg. Section
1.338(h)(10)-1.
(v) "Section 338 Elections" shall mean both a Section 338(g)
Election and a Section 338(h)(10) Election.
(vi) "Section 338(g) Election" means an election described in
Section 338(g) of the Code with respect to Purchaser's acquisition of the
Acquired Shares and any "target affiliate". Section 338(g) Election shall
include any corresponding election under any other applicable Tax Laws that
requires a separate election with respect to Purchaser's acquisition of the
Acquired Shares.
(vii) "Section 338(h)(10) Election" means an election described in
Section 338(h)(10) of the Code with respect to Seller's sale of the
Acquired Shares to Purchaser pursuant to this Agreement. Section
338(h)(10) Election shall include any corresponding election under any
other relevant Tax Laws for which a separate election is permissible with
respect to Purchaser's acquisition of the Acquired Shares from Seller under
this Agreement.
(viii) "Tax Laws" means the Code, federal, state, county, local, or
foreign laws relating to Taxes and any regulations
<PAGE>
or official administrative pronouncements released thereunder.
(ix) "Taxing Authority" means any governmental authority, domestic
or foreign, having jurisdiction over the assessment, determination,
collection, or other imposition of Tax.
14.13 Forum Selection and Consent to Jurisdiction. EACH OF THE PARTIES
HERETO AGREE THAT ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE COURTS OF THE STATE OF DELAWARE OR IN THE UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF DELAWARE. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND
OF THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE. EACH OF THE
PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
14.14 Governing Law. THIS AGREEMENT IS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, APPLICABLE TO CONTRACTS MADE
AND TO BE ENTIRELY PERFORMED IN SAID STATE.
14.15 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
ARTICLE XV
GUARANTIES
15.1 Guaranty of the WFC Parent. The WFC Parent hereby irrevocably and
unconditionally guarantees the full and prompt performance of all of the
covenants and agreements made by the Seller under this Agreement and by
Whirlpool Properties, Inc. under the Trademark License Agreement, and the prompt
and full payment of all of the obligations and liabilities of the Seller arising
from or assumed under this Agreement.
15.2 Guaranty of the Purchaser's Parent. The Purchaser's Parent hereby
irrevocably and unconditionally guarantees the full and prompt performance of
all of the covenants and agreements made by the Purchaser under this Agreement
and by the Purchaser under the Trademark License Agreement, and the prompt and
full payment of all of the obligations and liabilities of the Purchaser arising
from or assumed under this Agreement.
<PAGE>
EXHIBIT 2
---------
Whirlpool Corporation
Christopher Wyse
616/923-3417
[email protected]
Brasmotor S.A.
Rodolfo Guttilla
55-11-3039-5563
WHIRLPOOL CORPORATION COMPLETES PURCHASE OF
BRASMOTOR S.A. SHARES
BENTON HARBOR, Mich. -- November 7, 1997 -- Whirlpool Corporation (NYSE:WHR)
announced today that it completed the purchase of approximately 33 percent of
the voting shares, as well as preferred, or non-voting shares, of the company's
partner in Brazil and Latin America for 40 years, Brasmotor S.A.
As previously announced in Sept., Whirlpool reached a definitive agreement
to purchase controlling interest in Brasmotor. The shares, combined with
Whirlpool's existing 33 percent voting share holdings in the company, extend
Whirlpool's position to 66 percent of the voting shares of the company. The
purchase price for the transaction totaled $217 million.
Brasmotor is the holding company that controls Multibras S.A.
Eletrodomesticos, an approximately $2 billion appliance company with the leading
market share position in Latin America, and Embraco, the world's second largest
hermetic compressor manufacturer with annual sales of approximately $750
million. Embraco supplies compressors to the leading manufacturers of
refrigeration systems worldwide, including Whirlpool and Multibras S.A.
Whirlpool Corporation is the world's leading manufacturer and marketer of
major home appliances. Headquartered in Benton Harbor, the company manufactures
in 13 countries and markets products under 11 major brand names in about 140
countries.
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