Table of Contents

 

		Page
ARTICLE I. Purchase and Sale		2
Section 1.1.	Assets to Be Transferred	2
Section 1.2.	Excluded Assets	4
Section 1.3.	Assumed Liabilities	6
Section 1.4.	Excluded Liabilities	7
Section 1.5.	Purchase Price	9
Section 1.6.	Determination of Final Purchase Price	10
Section 1.7.	Closing	12
Section 1.8.	Closing Deliveries by the Seller	12
Section 1.9.	Closing Deliveries by the Purchaser	13
Section 1.10.	Allocation of Proceeds	13
Section 1.11.	Form of Instruments	14
Section 1.12.	Assignment and Assumption of the Assumed Contracts	14
ARTICLE II. Representations and Warranties of the Sellers		14
Section 2.1.	Due Incorporation and Authority	15
Section 2.2.	No Conflicts	15
Section 2.3.	Organizational Documents	16
Section 2.4.	Compliance with Laws	16
Section 2.5.	Permits	16
Section 2.6.	Contracts	16
Section 2.7.	Real Property	17
Section 2.8.	Intellectual Property	18
Section 2.9.	Litigation	18
Section 2.10.	Title to Assets	19
Section 2.11.	Inventory	19
Section 2.12.	Brokers	19
Section 2.13.	Financial Statements and Related Matters	19
Section 2.14.	Employee Benefit Plans	20
Section 2.15.	Labor Matters	20
Section 2.16.	Personnel Matters	20
Section 2.17.	Environmental Matters	20
Section 2.18.	Affiliated Transactions	21
Section 2.19.	Insurance	21
Section 2.20.	Relationships with Customers and Suppliers	21
Section 2.21.	Product Liability; Product Warranties	21
Section 2.22.	Fleetwood Dealers	22
Section 2.23.	Absence of Certain Developments	22
Section 2.24.	Credit Support	23
Section 2.25.	Non-Seller Subsidiaries	23
Section 2.26.	Disclaimer	23

 

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ARTICLE III. Representations and Warranties of the Purchaser		23
Section 3.1.	Due Incorporation and Authority	23
Section 3.2.	No Conflicts	24
Section 3.3.	Litigation	24
Section 3.4.	Purchaser’s Financial Capability	24
Section 3.5.	Brokers	24
ARTICLE IV. Covenants and Agreements		25
Section 4.1.	Operation of the Business	25
Section 4.2.	Confidentiality	26
Section 4.3.	Expenses	27
Section 4.4.	Public Announcements	27
Section 4.5.	Access to Information; Preservation of Records; Litigation Support	27
Section 4.6.	Regulatory and Other Authorizations; Consents	28
Section 4.7.	Further Action; Additional Assignments of Transferred Intellectual Property	29
Section 4.8.	Bankruptcy Court Approval	30
Section 4.9.	Books and Records	30
Section 4.10.	Tax Matters	30
Section 4.11.	Notification of Certain Matters	31
Section 4.12.	Update of Schedules and Disclosure Schedules; Knowledge of Breach	31
Section 4.13.	Co-Existence and License	32
Section 4.14.	Employment Arrangements	33
Section 4.15.	Diligence Period	34
Section 4.16.	Transition Services Agreement	34
Section 4.17.	Insurance	34
Section 4.18.	Title Commitments and Surveys	34
Section 4.19.	Joint Post-Closing Covenant of Purchaser and Sellers	35
Section 4.20.	Assignment of Domain Names	35
Section 4.21.	Cooperation Regarding Product Liability Claims	35
Section 4.22.	Pre-Closing Statement	35
Section 4.23.	Deposit	35
ARTICLE V. Conditions Precedent to the Obligation of the Purchaser to Close.		36
Section 5.1.	Representations and Warranties; Covenants	36
Section 5.2.	No Order	36
Section 5.3.	Bankruptcy Filing Condition	36
Section 5.4.	Closing Documents	36
Section 5.5.	Real Estate Matters	36
Section 5.6.	Material Adverse Change	37
Section 5.7.	Approvals	37
Section 5.8.	Permits and Third Party Consents	37
Section 5.9.	Rejection of Dealer Agreements	37

 

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Section 5.10.	Transition Services Agreement, Escrow Agreement and Co-Existence Agreement		37
ARTICLE VI. Conditions Precedent to the Obligation of the Sellers to Close			37
Section 6.1.	Representations and Warranties; Covenants		37
Section 6.2.	No Order		37
Section 6.3.	Sale Approval Order		38
Section 6.4.	Closing Documents		38
Section 6.5.	Escrow Agreement		38
ARTICLE VII. Termination of Agreement			38
Section 7.1.	Termination Prior to Closing		38
Section 7.2.	Break-up Fee; Expense Reimbursement		40
Section 7.3.	Survival After Termination		41
ARTICLE VIII. Miscellaneous			42
Section 8.1.	Certain Definitions		42
Section 8.2.	Consent to Jurisdiction; Service of Process; Waiver of Jury Trial		50
Section 8.3.	Notices		51
Section 8.4.	Entire Agreement		51
Section 8.5.	Amendments		52
Section 8.6.	Waiver		52
Section 8.7.	Governing Law		52
Section 8.8.	Binding Effect; Assignment		52
Section 8.9.	Interpretation; Headings		52
Section 8.10.	Severability of Provisions		53
Section 8.11.	Counterparts		53
Section 8.12.	No Third Party Beneficiaries		53
Section 8.13.	Closing Actions		53
Section 8.14.	Conflict between Transaction Documents		53
Section 8.15.	Nonsurvival of Representations, Warranties and Covenants		53
ANNEX I
Instructions for the Calculation of Current Assets
SCHEDULES
Schedule 1.1(a)(i)		Assumed Contracts
Schedule 1.1(a)(ii)		Transferred Real Property
Schedule 1.1(a)(iii)		Transferred IP
Schedule 1.1(a)(iv)		Equipment
Schedule 1.1(a)(v)		Tangible Personal Property
Schedule 1.1(a)(vi)		Inventory
Schedule 1.1(a)(vii)		Transferred Permits

 

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Schedule 1.1(a)(xii)	Business IT Systems
Schedule 1.1(a)(xiii)	Business Computer Software
Schedule 1.1(a)(xix)	Additional Transferred Assets
Schedule 1.1(a)(xx)	Certain Avoidance Actions
Schedule 1.2(a)(iii)	Excluded Assets
Schedule 1.2(a)(v)	Excluded Intellectual Property
Schedule 1.2(a)(xii)	Excluded Actions
Schedule 1.2(a)(xiv)	Excluded Tangible Personal Property
Schedule 1.3(a)(ii)	Closing Liabilities
Schedule 1.4(a)(xxiv)	Certain Excluded Liabilities
Schedule 3.5	Brokers
Schedule 5.8	Third Party Consents
Schedule 5.9	Rejection of Dealer Agreements
DISCLOSURE SCHEDULES
Schedule 2.5	Permits
Schedule 2.6(a)	Contracts
Schedule 2.7(a)	Owned Real Property
Schedule 2.8(a)	Intellectual Property
Schedule 2.10(b)	Title to Assets
Schedule 2.13	Financial Statements
Schedule 2.14(a)	Employee Benefit Plans
Schedule 2.19	Insurance
Schedule 2.21	Product Liability; Product Warranties
Schedule 2.23	Absence of Certain Developments
And any other Schedule or Disclosure Schedule delivered pursuant to this Agreement.
EXHIBITS
Exhibit A	Bidding Procedures Order
Exhibit B	Form of Sale Approval Order

 

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ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of May 29, 2009, by and between Fleetwood Enterprises, Inc., a Delaware corporation (“ ParentCo ”) and each of its subsidiaries listed on the signature pages hereto (together with ParentCo, each a “ Seller ” and collectively the “ Sellers ”), and AIP RV Acquisition Company LLC, a Delaware limited liability company (the “ Purchaser ”).  Capitalized terms used are defined or cross-referenced in Section 8.1 .

 

Recitals

 

WHEREAS, on March 10, 2009 (the “ Petition Date ”), ParentCo and certain of its Affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “ Bankruptcy Code ”) with the United States Bankruptcy Court for the Central District of California, Riverside Division (the “ Bankruptcy Court ”).  ParentCo’s bankruptcy case is being jointly administered with those of certain of its Affiliates under Case No. 09-14254-MJ (such case, together with all cases so jointly administered, being collectively referred to herein as the “ Bankruptcy Case ”).

 

WHEREAS, the Sellers are engaged in activities relating to the design, manufacture, marketing, distribution and sale of motorized recreational vehicles and related parts and services thereto and the RV Supply Business (the “ Business ”);

 

WHEREAS, the Purchaser desires to purchase certain assets of the Sellers and to assume certain liabilities of the Sellers, and the Sellers desire to sell such assets to the Purchaser and to assign such liabilities to the Purchaser, all on the terms and conditions set forth in this Agreement and in accordance with sections 105, 363, 365 and other applicable provisions of the Bankruptcy Code;

 

WHEREAS, the Transferred Assets will be sold free and clear of all Encumbrances (other than Permitted Encumbrances) pursuant to an order of the Bankruptcy Court approving such sale under section 363 of the Bankruptcy Code, and such sale will include the assumption by the Seller and concurrent assignment to the Purchaser of the Assumed Contracts under section 365 of the Bankruptcy Code and the terms and conditions of this Agreement; and

 

WHEREAS, the Sellers desire to sell the Transferred Assets and to assign the Assumed Contracts to further its reorganization efforts and to enable it to consummate a plan of reorganization in the Bankruptcy Case.

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

 

Agreement

 

ARTICLE I.                                                                                 PURCHASE AND SALE

 

Section 1.1.            Assets to Be Transferred .

 

(a)           On the terms and subject to the conditions set forth in this Agreement, at the Closing, the Sellers shall sell, assign, transfer, convey and deliver to the Purchaser free and clear of all Encumbrances (except for Permitted Encumbrances), and the Purchaser shall purchase, assume and accept from the Sellers, all of Sellers’ right, title and interest in and to all of the Sellers’ properties, assets and rights (including indirect and other forms of beneficial ownership) which are used in or otherwise necessary for the conduct of the Business (except in the cases of telephone numbers, IT Systems and Computer Software, the transfer of which shall be solely subject to Sections 1.1(a)(ix), 1.1(a)(xii) and 1.1(a)(xiii) and Section 4.6(c)) or as otherwise set forth below, other than the Excluded Assets (such rights, title and interests in and to such assets, properties and rights, being collectively referred to herein as the “ Transferred Assets ”), in accordance with, and with all of the protections afforded by, sections 363 and 365 of the Bankruptcy Code, including all of the following to the extent used in or otherwise necessary for the conduct of the Business:

 

(i)            all Contracts listed on or described in Schedule 1.1(a)(i) (the “ Assumed Contracts ”);

 

(ii)           all leasehold, if any, and other interests in the real property listed on or described in Schedule 1.1(a)(ii) , comprising the properties known as Plant 43, Plant 44, Plant 52, Plant 90 and Plant 91, together in each case with the Seller’s right, title and interest in and to all structures, facilities or improvements located thereon and all easements, licenses, rights and appurtenances relating to the foregoing (the “ Transferred Real Property ”);

 

(iii)          all Intellectual Property, to the extent assignable or otherwise transferable, (including all of the Intellectual Property listed on or described in Schedule 1.1(a)(iii) but excluding all of the Shared IP), together with all income, royalties, damages and payments due or payable as of the Closing or thereafter (including damages and payments for past, present or future infringements or misappropriations thereof, the right to sue and recover for past infringements or misappropriations thereof (in each case, other than (A) Claims asserted by a Seller prior to the Closing Date and (B) counterclaims with respect to a Claim asserted against a Seller prior to the Closing Date) and any and all corresponding rights that, now or hereafter, may be secured throughout the world) and all copies and tangible embodiments of any such Intellectual Property in the Sellers’ possession or control (collectively, the “ Transferred IP ”);

 

(iv)          all leasehold improvements, if any, all machinery, equipment, parts, spare parts, vehicles and similar tangible personal property, all tooling (including all tooling and “old” molds for former models), fixtures, trade fixtures, wherever located, including, without limitation, all such items which are located in any building, warehouse, office or other space leased, owned or occupied by Sellers, including all machinery and equipment located at Plant 47 and including each of the foregoing that is set forth on Schedule 1.1(a)(iv) (the “ Equipment ”);

 

(v)           all furniture, furnishings, office equipment (including owned computer equipment and hardware) and supplies (office, production or otherwise) and similar tangible personal property, wherever located, including, without limitation, all such items which are located in any building, warehouse, office or other space leased, owned or occupied by

 

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Sellers, including each of the foregoing that is set forth on Schedule 1.1(a)(v) (together with the Equipment, the “ Tangible Personal Property ”);

 

(vi)          all raw materials, work-in-progress, semi-finished and finished goods, supplies, packaging materials and all other inventories, wherever located, including those listed on or described in Schedule 1.1(a)(vi) (the “ Inventory ”);

 

(vii)         all Permits listed on or described in Schedule 1.1(a)(vii) , to the extent assignable (the “ Transferred Permits ”);

 

(viii)        all books of account, general, financial, accounting and personnel records, files, invoices, customers’ and suppliers’ lists and records (including mailing lists, e-mail address lists, recipient lists, sales records, correspondence with customers, customer files and account histories, supply lists and records of purchases from and correspondence with suppliers), other distribution lists, billing records, sales and promotional literature, manuals and customer and supplier correspondence, analysis reports, marketing reports and creative material, all records relating to all product, business and marketing plans of the Business, and all books, ledgers, files, reports, plans, drawings and operating records of every kind, in each case, related to the Transferred Assets; provided, however, “Books and Records” shall not include any: (u) information prohibited from being transferred or disclosed pursuant to applicable Law; (v) privileged communications or information of any Seller (including any attorney work product); (x) non-public information primarily related to or prepared in connection with the Bankruptcy Case; (y) of Seller’s minute books, stock books and Tax Returns; or (z) the Sellers’ books and records relating exclusively to the Excluded Assets (the “ Books and Records ”);

 

(ix)           all telephone numbers exclusively used in the Business (to the extent assignable at Purchaser’s expense);

 

(x)            all credits, prepaid expenses and deposits (including all RV show deposits);

 

(xi)           all rights to causes of action, lawsuits, judgments, claims, counterclaims, indemnities, warranties, refunds, rights of recovery, rights of set-off and rights of recoupment of every kind and nature (whether known or unknown or contingent or non-contingent) and demands of any nature in favor of a Seller, in each case, other than (A) any Claims asserted by a Seller prior to the Closing Date, (B) any counterclaims with respect to a Claim asserted against a Seller prior to the Closing Date and (C) to the extent listed or described on Schedule 1.2(a)(xii) ;

 

(xii)          all IT Systems exclusively used in the Business and all IT Systems listed on Schedule 1.1(a)(xii) ;

 

(xiii)         CAD Computer Software exclusively used in the Business (to the extent assignable at Purchaser’s expense), and all Computer Software (to the extent assignable or otherwise transferable or licensable, at Purchaser’s expense) listed on Schedule 1.1(a)(xiii) ;

 

(xiv)        all signage and other materials incorporating the logos, trademarks, trade names, corporate names, service marks, or brand designations of the Sellers leased to or otherwise held by Fleetwood Dealers;

 

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(xv)         all goodwill as a going concern;

 

(xvi)        all promotional allowances, vendor rebates and similar items;

 

(xvii)       ParentCo’s membership in the Recreation Vehicle Industry Association (“ RVIA ”), to the extent assignable, and all deposits previously paid to RVIA associated with such membership;

 

(xviii)      all assets to be included in the calculation of Current Assets pursuant to Annex I;

 

(xix)         any other assets of the Sellers or their Affiliates set forth on Schedule 1.1(a)(xix) ; and

 

(xx)          all rights and avoidance claims of the Sellers arising under chapter 5 of the Bankruptcy Code, solely to the extent set forth on Schedule 1.1(a)(xx) .

 

(b)           All of the Transferred Assets shall be sold, assigned, transferred, conveyed and delivered to the Purchaser free and clear of all Encumbrances (other than Permitted Encumbrances) pursuant to section 363(f) of the Bankruptcy Code, whether arising prior to or subsequent to the Petition Date.  The sale of the Transferred Assets to the Purchaser constitutes a single, indivisible transaction and the Transferred Assets are intended to be sold to the Purchaser in a single, indivisible group of assets.

 

(c)           Notwithstanding anything in this Agreement to the contrary, the Purchaser may revise the Schedules setting forth the Transferred Assets and the Excluded Assets to add a Contract (to the extent not otherwise rejected) within five (5) Business Days prior to the Closing Date and require the Sellers to give notice to the parties to any such Contract within two (2) Business Days of delivery of such notice to Seller; provided that such change shall not affect the amount of the Purchase Price except that, with respect to Contracts added to the Transferred Assets after the date hereof and prior to the Closing Date pursuant to this Section 1.1(c), the Purchaser shall pay (on behalf of the Sellers) any Cure Costs associated with such Contracts and deduct the amount of such Cure Costs relating thereto from the Purchase Price, subject to the Closing Liability Cap.

 

Section 1.2.            Excluded Assets .

 

(a)           The Sellers are not selling, and the Purchaser is not purchasing, any assets other than the Transferred Assets, and without limiting the generality of the foregoing, the term “Transferred Assets” shall expressly exclude the following assets of the Sellers (including all of the Sellers’ right, title and interest therein and thereto), all of which shall be retained by the Sellers (collectively referred to as the “ Excluded Assets ”):

 

(i)            all of the Sellers’ cash, bank deposits and cash equivalents;

 

(ii)           all of the Sellers’ bank accounts;

 

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(iii)          all of the assets of any Seller listed or described in Schedule 1.2(iii) ;

 

(iv)          all of the Contracts to which any Seller is a party or by which its assets are bound (other than the Assumed Contracts);

 

(v)           all Intellectual Property not primarily used in or otherwise necessary for the conduct of the Business, including all trademarks, service marks, logos, slogans, trade names, and corporate names (and all translations, adaptations, derivations and combinations of the foregoing) and internet domain names, incorporating “Fleetwood Homes,” brand names of the ParentCo’s housing group products, “Fleetwood Enterprises” or “Fleetwood Travel Trailers” or products of the travel trailer division, or any derivations therefrom together with all income, royalties, damages and payments due or payable (and all goodwill associated with any of the foregoing), and any and all corresponding rights that, now or hereafter, may be secured throughout the world and all copies and tangible embodiments of any such Intellectual Property in the Sellers’ possession or control, including all Intellectual Property listed on or described in Schedule 1.2(v) and all Shared IP;

 

(vi)          all notes receivable due to any Seller that arose or arise out of the operation of the Business prior to the Closing, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto;

 

(vii)         all rights of the Sellers under this Agreement and any other Contract entered into in connection with the transactions contemplated hereby;

 

(viii)        all accounting records (including records relating to Taxes) and internal reports relating to the business activities of any Seller that are not Transferred Assets;

 

(ix)           any interest or right to any refund of Taxes relating to the Transferred Assets or the Assumed Liabilities for, or applicable to, any taxable period (or any portion thereof), ending on or prior to the Closing Date, or, as to any assets of the Business which are not Transferred Assets, for or applicable to, any taxable period;

 

(x)            all corporate books and records, board minutes and organizational documents of the Sellers that are not Transferred Assets, and any other records that any Seller is required to retain by Law; provided that the Purchaser shall be entitled to receive copies of any such items to the extent that they relate to the Transferred Assets;

 

(xi)           all of the rights and claims of any Seller to avoidance actions available to the Seller under chapter 5 of the Bankruptcy Code, of whatever kind or nature, including avoidance actions under sections 544, 545, 547, 548, 549 and 553 of the Bankruptcy Code, and any related claims and actions arising under such sections by operation of law or otherwise, including any and all proceeds of the foregoing, except as set forth on Schedule 1.1(a)(xx) ;

 

(xii)          all rights to causes of action, lawsuits, judgments, claims, counterclaims, indemnities, warranties, refunds, rights of recovery, rights of set-off and rights of recoupment of every kind and nature (whether known or unknown or contingent or

 

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non-contingent) and demands of any nature in favor of a Seller, in each case, to the extent (1) asserted by a Seller prior to the Closing Date, (2) asserted as a counterclaim with respect to a Claim asserted against a Seller prior to the Closing Date or (3) listed on or described in Schedule 1.2(a)(xii) ;

 

(xiii)         all interest in real property that are not Transferred Assets, including real property interests at Plant 47 in Riverside, CA and Plant 71 in Paxinos, PA;

 

(xiv)        all leasehold improvements, furniture, furnishings, fixtures, trade fixtures, telephones, supplies and other tangible personal property located at Plants 1 and 71, and all machinery and equipment located at Plant 71 that are not Transferred Assets; all leasehold improvements, furniture, furnishings, fixtures, trade fixtures, telephones, supplies and other tangible personal property located at Plant 47 and set forth on Schedule 1.2(a)(xiv) ;

 

(xv)         all insurance policies of the Sellers;

 

(xvi)        all IT Systems and Computer Software not exclusively used in the Business and not listed on Schedule 1.1(a)(xii) or Schedule 1.1(a)(xiii) , respectively, and ParentCo’s efdn software;

 

(xvii)       Accounts Receivable that are subject to a right of set off or other dispute (other than such Accounts Receivable related to a Closing Liability); and

 

(xviii)      the equity securities or other ownership interest of any Seller or the Sellers’ Affiliates.

 

Section 1.3.            Assumed Liabilities .

 

(a)           At the Closing, and subject to the terms and conditions set forth in this Agreement, the Purchaser shall assume and pay, discharge, perform or otherwise fully satisfy in due course the following Liabilities of the Sellers arising out of the Business or the Transferred Assets (the “ Assumed Liabilities ”):

 

(i)            all Liabilities of the Sellers under the Assumed Contracts and the Transferred Permits, solely to the extent to be performed on or after the Closing Date; and

 

(ii)           other Liabilities as set forth on Schedule 1.3(a)(ii) attached hereto (the “ Closing Liabilities ”); provided that the Purchaser may revise Schedule 1.3(a)(ii) on or before the Closing Date to remove any Closing Liabilities from such Schedule.

 

(b)           For the avoidance of doubt, Closing Liabilities shall include all pre- or post Petition Date costs and expenses required by the Sale Approval Order to be paid to cure all monetary defaults under all applicable Assumed Contracts (the “ Cure Costs ”).

 

(c)           Section 1.3(a) shall not limit any claims or defenses the Purchaser may have against any party other than the Sellers.  The transactions contemplated by this Agreement shall in no way expand the rights or remedies of any Third Party against the Purchaser or the

 

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Sellers as compared to the rights and remedies which such Third Party would have had against the Sellers absent the Bankruptcy Case had the Purchaser not assumed such Assumed Liabilities.

 

Section 1.4.            Excluded Liabilities .

 

(a)           Notwithstanding anything to the contrary contained in this Agreement, the parties expressly acknowledge and agree that the Purchaser shall not assume or be liable or responsible for any Liability of the Sellers, whether relating to or arising out of the Business, the Excluded Assets or the Transferred Assets or otherwise, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, other than the Assumed Liabilities (collectively, the “ Excluded Liabilities ”).  In furtherance and not in limitation of the foregoing, “ Excluded Liabilities ” shall include the following (to the extent they are not an Assumed Liability pursuant to Section 1.3 of this Agreement):

 

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

 

(ii)           any amounts due or which may become due or owing under the Assumed Contracts with respect to the period prior to Closing other than any Cure Costs;

 

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

 

(iv)          (a) Except as specified in Section 4.10, all obligations, Claims, or Liabilities of the Sellers relating to Taxes accrued or due and payable at or prior to the Closing (including with respect to the Transferred Assets or otherwise) except to the extent included in the Closing Liabilities; and (b) all obligations, Claims, or Liabilities of any predecessor or Affiliate of any Seller or of any other Person relating to Taxes for which the Sellers or any predecessor or Affiliate of any Seller could be liable including, without limitation, any Taxes that will arise as a result of the sale of the Transferred Assets or the assumption of the Assumed Liabilities pursuant to this Agreement and any deferred Taxes of any nature;

 

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

 

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

 

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

 

(viii)        all obligations and Liabilities of the Sellers or any predecessor or Affiliate of any Seller resulting from, caused by or arising out of, or which relate to, directly or

 

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indirectly, the Assumed Contracts with respect to the period prior to Closing (except for Cure Costs), whether known or unknown on the date hereof;

 

(ix)           all obligations and Liabilities of the Sellers or any predecessor or Affiliate of any Seller resulting from or caused by the conduct of the Sellers or any predecessor or Affiliate of any Seller anywhere (including their development, manufacturing, marketing, sale or distribution activities) and which (i) constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of any rule, Law, treaty or other similar authority or (ii) relate to any and all Claims or Liabilities against the Sellers or any predecessor or Affiliate of any Seller, whether past, present, future, known or unknown, liquidated or unliquidated, accrued or unaccrued, pending or threatened;

 

(x)            all obligations, Claims or Liabilities with respect to the employees or former employees, or both (or their representatives) of the Sellers or any predecessor or Affiliate of any Seller arising prior to the Closing Date;

 

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

 

(xii)          all accounts payable of the Sellers or any predecessor or Affiliate of any Seller arising prior to the Closing except to the extent included in the Closing Liabilities;

 

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

 

(xiv)        any obligation or Liability under any Contract of the Sellers or any predecessor or Affiliate of any Seller not assumed by the Purchaser hereunder;

 

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

 

(xvi)        any and all warranty obligations to customers and/or dealers of the Sellers or any of their Affiliates, or to retail consumers or to any other Person except to the extent included in the Assumed Liabilities;

 

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

 

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

 

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

 

(xx)          any obligation or Liability arising out of or resulting from non-compliance with any Law by the Sellers or any predecessor or Affiliate of any Seller;

 

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

 

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

 

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

 

(xxiv)       the Liabilities set forth on Schedule 1.4(a)(xxiv) attached hereto.

 

(b)           The parties acknowledge and agree that disclosure of any obligation or Liability on any Schedule to this Agreement shall not create an Assumed Liability or other Liability of the Purchaser, except where such disclosed obligation has been expressly assumed by the Purchaser as an Assumed Liability in accordance with the provisions of Section 1.3 hereof.

 

Section 1.5.            Purchase Price .    The “ Purchase Price ” shall be an amount equal to (i) $53,000,000 minus (ii) an amount equal to the Closing Liabilities, up to the Closing Liability Cap minus (iii) an amount by which Closing Current Assets is less than Target Current Assets, if any, plus (iv) an amount by which Closing Current Assets exceeds Target Current Assets, if any, minus (v) any amounts the Purchaser is entitled to deduct from the Purchase Price pursuant to Section 4.18 hereof.

 

(b)           No later than seven (7) days prior to the Closing Date, ParentCo shall deliver to the Purchaser a schedule (the “ Closing Statement ”), setting forth a good faith estimate of the Closing Current Assets and the Closing Liabilities and a certificate setting forth in reasonable detail (including, but not limited to, supporting information and calculations) the resulting Purchase Price calculated with reference to such amounts (the “ Estimated Purchase

 

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Price ”).  The Closing Statement shall be prepared in a manner consistent with Annex I, Schedule 1.3(a)(ii) and the Final Pre-Closing Statement (including the accounting policies, practices, methodologies and judgments used therein) and shall be subject to the Purchaser’s reasonable review and approval.

 

(c)           Subject to the terms and conditions hereof, in full consideration for the sale and purchase of the Transferred Assets, at the Closing, the Purchaser shall be assigned the Transferred Assets, assume the Assumed Liabilities and pay by wire transfer to the Sellers an amount in cash equal to the Estimated Purchase Price, as set forth on the Closing Statement, minus the Escrow Amount and minus the Deposit Amount.  At the Closing, the Purchaser shall pay by wire transfer to the Escrow Agent an amount in cash equal to the Escrow Amount.

 

(d)           Within ten (10) Business Days of the execution of this Agreement by all parties hereto, the Purchaser shall pay by wire transfer to the Escrow Agent an amount in cash equal to the Deposit Amount, to be held as a good faith deposit pursuant to the terms of the Deposit Escrow Agreement and the Bidding Procedures Order.

 

(e)           Payments made pursuant to this Section 1.5, an amount equal to the Closing Liabilities and an amount equal to any other Cure Costs shall be allocated among the assets purchased in accordance with Section 1.10.

 

Section 1.6.            Determination of Final Purchase Price .

 

(a)           Within thirty (30) days after the Closing Date, the Purchaser will prepare and deliver to the ParentCo a schedule setting forth the calculation of Closing Current Assets and Closing Liabilities and a certificate setting forth in reasonable detail (including, but not limited to, supporting information and calculations) the final Purchase Price calculated with reference to such amounts (the “ Post-Closing Statement ”).  The Post-Closing Statement will be prepared by the Purchaser in accordance with the Final Pre-Closing Statement (including the accounting policies, practices, methodologies and judgments used therein), Annex I and Schedule 1.3(a)(ii), and will be used to determine the final Purchase Price.

 

(b)           Within thirty (30) days of the date on which the Purchaser shall have delivered the proposed Post-Closing Statement to ParentCo (during which period the Purchaser shall provide to the representatives designated by ParentCo access to the appropriate personnel of the Purchaser or its Affiliates, during normal business hours, and all such records, Books and Records, information and documentation as may be reasonably requested by ParentCo, and the Purchaser shall cooperate with ParentCo to enable ParentCo to evaluate the Post-Closing Statement), ParentCo shall either accept such proposed Post-Closing Statement or shall object to such Post-Closing Statement, in each case by delivering a notice in writing to the Purchaser (provided, however, that if no such written notice is provided within such period, ParentCo shall be deemed to have accepted such Post-Closing Statement in its entirety) and shall specify in reasonable detail (including, but not limited to, supporting information and calculations) the nature and dollar amount of any disagreement so asserted.  If ParentCo’s calculation of the final Purchase Price is within $400,000 of Purchaser’s calculation, the final Purchase Price shall be the average of ParentCo’s calculation and Purchaser’s calucaltion.  If ParentCo’s calculation of the final Purchase Price is not within $400,000 of Purchaser’s calculation, and the parties are

 

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unable to agree on the Post-Closing Statement within thirty (30) days (which may be extended by the mutual agreement of the Purchaser and ParentCo) of the date the Purchaser delivers the proposed Post-Closing Statement to ParentCo, the disputed items of the Post-Closing Statement shall be determined, with the cooperation of the Purchaser and ParentCo, by the Reviewing Accountants; provided that any settlement negotiations will not be discoverable by or communicated to the Reviewing Accountants.

 

(c)           The parties shall instruct the Reviewing Accountants to select one of their partners experienced in purchase price adjustment disputes to make a final determination of the final Purchase Price with reference to such amounts to the extent such amounts are in dispute, solely in accordance with the Final Pre-Closing Statement (including the accounting policies, practices, methodologies and judgments used therein), Annex I and Schedule 1.3(a)(ii) and the procedures set forth in this Agreement.  In making such determination with respect to any disputed amount, the Reviewing Accountants shall be required to accept either the aggregate amount proposed by the Purchaser or the amount proposed by ParentCo, and the party whose proposed amount is not accepted by the Reviewing Accountants shall pay for the reasonable fees of the Reviewing Accountant.  The parties shall also instruct the Reviewing Accountants to make its determination based solely on written submissions by the Purchaser and ParentCo which are in accordance with the Final Pre-Closing Statement (including the accounting policies, practices, methodologies and judgments used therein), Annex I and Schedule 1.3(a)(ii) and the procedures set forth in this Agreement (i.e., not on the basis of an independent review).  The determination of the final Purchase Price shall become final and binding on the parties on the date the Reviewing Accountants deliver its final resolution in writing to the parties (which final resolution shall be requested by the parties to be delivered not more than sixty (60) days following submission of such disputed matters), absent fraud or manifest error.

 

(d)           If the final Purchase Price as determined pursuant to this Section 1.6 (the “ Final Purchase Price ”) is less than the Estimated Purchase Price (the “ Closing Deficiency ”), then the Purchaser and the Sellers shall deliver a joint written authorization to the Escrow Agent within five (5) business days from the date on which the Post-Closing Statement is agreed to or finally determined in accordance with this Section 1.6, instructing the Escrow Agent (i) to pay to the Purchaser an amount equal to the Closing Deficiency (together with any interest earned on such amount through the date of the release of the funds), and (ii) after payment of the Closing Deficiency (together with such interest) to the Purchaser pursuant to clause (i), to pay the remaining portion of the Escrow Amount, if any (together with any interest earned on such amount through the date of the release of the funds) to the Sellers.  If the amount of the Closing Deficiency exceeds the amount of the Escrow Amount, the Sellers will pay the Purchaser in immediately available funds via wire transfer to an account designated by the Purchaser, within five (5) business days from the date on which the Post-Closing Statement is agreed to or finally determined in accordance with Section 1.6, an amount equal to such excess in accordance with Bankruptcy Code Section 364(c)(1), and such obligation shall receive super-priority administrative claim status having priority over any and all administrative expenses of the kinds specified in Bankruptcy Code Section 503(b), 506(c), 507(a) or 507(b).  If the Final Purchase Price is greater than the Estimated Purchase Price (the “ Closing Overage ”), then (x) the Purchaser will pay the Sellers or as the Sellers may direct in immediately available funds via wire transfer to an account or accounts designated in writing by the Sellers an amount equal to the Closing Overage, within five (5) business days from the date on which the Post-Closing

 

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Statement is agreed to or finally determined in accordance with this Section 1.6, and (y) the Purchaser and the Sellers shall deliver a joint written authorization to the Escrow Agent within five (5) business days from the date on which the Post-Closing Statement is agreed to or finally determined in accordance with this Section 1.6, instructing the Escrow Agent to pay to the Sellers the Escrow Amount (together with all interest earned on such amount).

 

Section 1.7.            Closing .  Subject to the terms and conditions of this Agreement and the Sale Approval Order, the sale and purchase of the Transferred Assets and the assignment and assumption of the Assumed Liabilities contemplated by this Agreement shall take place at a closing (the “ Closing ”) to be held at the offices of Gibson, Dunn & Crutcher LLP, 3161 Michelson Drive, Irvine, California at 10:00 A.M., California time, on June 30, 2009 or as soon as possible thereafter following the satisfaction or waiver of all conditions to the obligations of the parties set forth in Sections 5 and 6 (other than those conditions which by their nature can only be satisfied at the Closing), or at such other place or at such other time or on such other date as ParentCo and the Purchaser may mutually agree upon in writing (the day on which the Closing takes place being the “ Closing Date ”).

 

Section 1.8.            Closing Deliveries by the Seller .  At the Closing, unless otherwise waived in writing by the Purchaser, the Seller shall deliver or cause to be delivered to the Purchaser:

 

(a)           a duly executed Bill of Sale;

 

(b)           a duly executed counterpart to the Assignment and Assumption Agreement;

 

(c)           duly executed Assignments of Intangible Property with respect to the Transferred IP;

 

(d)           an affidavit from each Seller (or, with respect to any Seller treated as a disregarded entity for federal income tax purposes, the Person treated as the owner of such Seller’s assets for such purposes), dated as of the Closing Date, in form and substance required under the Treasury Regulations issued pursuant to section 1445 of the Code stating such Person’s taxpayer identification number and that such Person is not a foreign person pursuant to section 1445(b)(2) of the Code;

 

(e)           limited warranty deeds with respect to the Transferred Real Property, in form and substance reasonably satisfactory to the Purchaser, subject only to the Permitted Encumbrances;

 

(f)            certificates of title and title transfer documents to all titled motor vehicles;

 

(g)           the Sellers’ Title Deliverables;

 

(h)           the Transition Services Agreement, the Escrow Agreement and the Co-Existence Agreement, duly executed by the applicable Seller(s);

 

(i)            exclusive possession of the Transferred Assets, to the extent located at the Transferred Real Property;

 

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(j)            a duly executed Seller’s Certificate pursuant to Section 5.1;

 

(k)           a receipt for the payment of the Estimated Purchase Price;

 

(l)            a copy of the resolutions of the each Seller’s board of directors authorizing the execution, delivery and performance of this Agreement and the other agreements contemplated hereby and the consummation of the transactions contemplated hereby and thereby;

 

(m)          originals (or, to the extent originals are not reasonably available, copies) of all Assumed Contracts; and

 

(n)           such other duly executed bills of sale, assignments and other instruments of assignment, transfer or conveyance, in form and substance reasonably satisfactory to the Purchaser, as the Purchaser may reasonably request or as may be otherwise necessary or reasonably appropriate to evidence and effect the sale, assignment and transfer of the Transferred Assets to the Purchaser.

 

Section 1.9.            Closing Deliveries by the Purchaser .  At the Closing, unless otherwise waived in writing by the Seller, the Purchaser shall deliver or cause to be delivered to ParentCo:

 

(a)           an amount equal to the Estimated Purchase Price minus the Escrow Amount and minus the Deposit Amount by wire transfer of immediately available funds to account (or accounts) to be designated by ParentCo at least two (2) Business Days prior to the Closing Date;

 

(b)           a duly executed counterpart to the Transition Services Agreement and the Co-Existence Agreement;

 

(c)           a duly executed counterpart to the Escrow Agreement;

 

(d)           a duly executed counterpart to the Assignment and Assumption Agreement; and

 

(e)           a duly executed the Purchaser’s Certificate pursuant to Section 6.1.

 

Section 1.10.          Allocation of Proceeds .  The Purchaser shall within 120 days after the Closing Date prepare and deliver to the Sellers a schedule reasonably allocating the Final Purchase Price (plus any Cure Costs and Closing Liabilities and any other items that are required for the Purchaser’s federal income tax purposes to be treated as part of the purchase price, but excluding any Assumed Liabilities that are or would be expected to give rise to the Purchaser’s current deductions or capitalized expenditures for tax purposes after the Closing Date) among the respective Sellers and the Transferred Assets in accordance with Section 1060 of the Code and the Treasury Regulations promulgated thereunder, which shall be subject to review and approval by ParentCo, such approval not to be unreasonably withheld (such schedule, as approved by ParencCo, the “ Allocation ”).  The Purchaser and the Sellers shall report and file all Tax Returns (including amended Tax Returns and claims for refund) in all respects and for all purposes in a manner consistent with the Allocation.  Neither the Purchaser nor the Sellers shall take any

 

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position contrary thereto or inconsistent therewith (including, without limitation, in any audits or examinations by any Governmental Body or any other proceeding) unless otherwise required by applicable law; and provided that each party to this Agreement agrees to notify the other parties in the event that any Governmental Body takes or proposes to take a position for Tax purposes that is inconsistent with such Allocation.  The Purchaser and the Sellers shall cooperate in the filing of any forms (including Form 8594 under Section 1060 of the Code) with respect to such Allocation, including any amendments to such forms required pursuant to this Agreement with respect to any adjustment to the Purchase Price.  Notwithstanding any other provision of this Agreement, the terms and provisions of this Section 1.10 shall survive the Closing without limitation.

 

Section 1.11.          Form of Instruments .  To the extent that a form of any document to be delivered hereunder is not attached as an Exhibit hereto, such documents shall be in form and substance, and shall be executed and delivered in a manner, reasonably satisfactory to ParentCo and the Purchaser.

 

Section 1.12.          Assignment and Assumption of the Assumed Contracts .  Without limiting Sections 1.1(a)(i) and 1.3(a)(i), (a) as of the Closing, the Seller shall assume pursuant to section 365(a) of the Bankruptcy Code and concurrently assign to the Purchaser pursuant to sections 363(b), (f) and (m) and section 365(f) of the Bankruptcy Code each of the Assumed Contracts that may be assumed pursuant to the Sale Approval Order, and (b) the Purchaser shall assume and thereafter in due course pay, discharge, perform and fully satisfy all of the obligations under such Assumed Contracts pursuant to section 365 of the Bankruptcy Code from and after the Closing, and shall pay the Cure Costs so that all applicable Assumed Contracts may be assigned to the Purchaser pursuant to section 365 of the Bankruptcy Code.  After the Closing, with respect to any Contract primarily related to the Business, which is not set forth on Schedule 1.1(a)(i) attached hereto, and provided such Contract has not been rejected by the Sellers pursuant to section 365 of the Bankruptcy Code, upon written notice(s) from the Purchaser, as soon as practicable, the Sellers shall take all actions reasonably necessary to assume and assign to the Purchaser pursuant to section 365 of the Bankruptcy Code any Contract(s) set forth in the Purchaser’s notice(s); provided that any applicable Cure Cost shall be satisfied by the Purchaser at its own cost and expense.  Notwithstanding anything in this Agreement to the contrary, on the date any Contract is assumed and assigned to the Purchaser pursuant to this Section 1.12, such Contract shall be deemed an Assumed Contract and deemed scheduled on Schedule 1.1(a)(i), under the appropriate heading for all purposes under this Agreement.

 

ARTICLE II.                      REPRESENTATIONS AND WARRANTIES OF THE SELLERS .  Except as set forth in the Disclosure Schedules to this Agreement (the “ Disclosure Schedules ”) delivered (or to be delivered) by the Sellers, which shall specify the Section to which each exception or disclosure relates and shall be deemed to qualify the representations and warranties contained in such Section as well as all other representations and warranties in this Section 2 to which the applicability of such exception or disclosure is reasonably apparent on its face, the Sellers jointly and severally represent and warrant to the Purchaser that the statements contained in this Section 2 are true and correct as of the date of this Agreement and as of the Closing Date.  The specification of any dollar amount in the representation or warranties contained in this Agreement or the inclusion of any specific item in any Section of the Disclosure Schedules is not intended to imply that such amounts, or higher or lower amounts or the items so included or

 

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other items, are or are not material, or do or do not violate or breach, any applicable Law or Contract, and no party shall use the fact of the setting of any such amounts or the inclusion of any such item in any dispute or controversy as to whether any obligation, item or matter not described herein or included in the Disclosure Schedules is or is not material, or does or does not violate or breach, any applicable Law or Contract, for purposes of this Agreement.

 

Section 2.1.            Due Incorporation and Authority .  Each Seller is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and the Sellers have all necessary corporate power and authority to own, lease and operate the Transferred Assets and to carry on the Business as it is now being conducted.  Subject to the entry of the Sale Approval Order, (a) the Sellers have all requisite corporate power and authority to enter into this Agreement and the other Transaction Documents, carry out their obligations hereunder and consummate the transactions contemplated hereby and (b) the execution and delivery by the Sellers of this Agreement and the other Transaction Documents, the performance by the Sellers of their respective obligations hereunder and the consummation by the Sellers of the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action on the part of the Sellers.  This Agreement and the other Transaction Documents have been duly executed and delivered by the Sellers, and, upon entry of the Sale Approval Order (assuming the due authorization, execution and delivery hereof by the Purchaser and satisfaction of all conditions to the Closing), this Agreement and the other Transaction Documents will constitute the legal, valid and binding obligation of the Sellers, enforceable against the Sellers in accordance with their terms, except to the extent enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting creditors rights generally or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).  Each Seller is in good standing and is qualified to do business in every jurisdiction in which it is required to be qualified, except where the failure to be in good standing or to obtain such qualification would not have a Material Adverse Effect or materially impede the ability of the Sellers to consummate the transactions contemplated hereby.

 

Section 2.2.            No Conflicts .  Subject to the entry of the Sale Approval Order, the execution and delivery by the Sellers of this Agreements, the consummation of the transactions contemplated hereby and thereby, and the performance by the Sellers of this Agreement and the other Transaction Documents in accordance with their terms will not:

 

(a)           violate the certificate of incorporation or by-laws (or comparable instruments) of any Seller;

 

(b)           violate any Law to which the Seller, the Business or any of the Transferred Assets are bound or subject in any material respect;

 

(c)           violate, result in any breach of, constitute a default (or an event that, with notice or lapse of time or both, would become a default) under, give any Third Party the right to modify, terminate or accelerate any obligation under, or require any consent, authorization, approval or any other action of any Person (including Governmental Bodies) pursuant to, any Assumed Contract or Transferred Permit material to the Business, except (i) to the extent that any such violation, breach or default is cured, remedied or otherwise accounted for pursuant to the Sale Approval Order, (ii) for consents, approvals or authorizations of, or declarations or

 

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filings with, the Bankruptcy Court, (iii) for any such violation under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”); or

 

(d)           result in the creation of any material Lien upon the Transferred Assets.

 

provided, however, that each of the cases set forth in clauses (b) and (c) above is subject to exceptions that arise as a result of any facts or circumstances relating to the Purchaser or any of its Affiliates.

 

Section 2.3.            Organizational Documents .  Sellers have previously made available to the Purchaser true, accurate and complete copies of the certificate of incorporation and bylaws, or comparable instruments, of each Seller as in effect on the date hereof.

 

Section 2.4.            Compliance with Laws .  To the Knowledge of the Sellers, the Business is being and has (within the past 2 years) been conducted in compliance with all applicable Laws in all material respects and, to the Knowledge of the Sellers, no claims have been filed against (and no written notice has been received by) any Seller alleging a material violation of any such Law.

 

Section 2.5.            Permits .  Schedule 2.5 of the Disclosure Schedules sets forth a list of all of the Sellers’ material licenses, franchises, permits, variances, exemptions, orders, approvals and authorizations of Governmental Bodies, including any applications therefor, that are used for the conduct of the Business as currently conducted (collectively, the “ Permits ”).  The Seller is in compliance, in all material respects, with the terms of all Transferred Permits, and such Transferred Permits are valid and in full force and effect.

 

Section 2.6.            Contracts .

 

(a)           Except as set forth on Schedule 2.6(a) attached hereto, no Seller is a party to or bound by, whether written or oral, any:

 

(i)            agreement relating to the licensing of Transferred IP by any Seller to a Third Party;

 

(ii)           management, consulting, advertising, marketing, promotion, technical services, advisory or other contract or other similar arrangement primarily relating to the design, marketing, promotion, management or operation of the Business involving more than $100,000 annually;

 

(iii)          lease or agreement under which it is lessee of, or holds or operates, any personal property owned by any other party calling for payments in excess of $100,000 annually, primarily used in the Business;

 

(iv)          lease or agreement under which it is lessor of or permits any Third Party to hold or operate any property, real or personal, owned or controlled by it involving more than $100,000 annually, primarily used in the Business;

 

(v)           contract or group of related contracts with the same party continuing over a period of more than six (6) months from the date or dates thereof, not

 

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terminable by it on ninety (90) days or less notice without penalties or involving more than $100,000 annually; or

 

(vi)          other agreement material to the Business.

 

(b)           To the Knowledge of the Sellers, (i) each Assumed Contract, is valid and binding on the applicable Seller and the counterparties thereto, and is in full force and effect (ii) no Seller is (except to the extent that any such breach or default is cured in connection with the Sale Approval Order), and no other party is, in material breach of, or material default under, any Assumed Contract.

 

(c)           The Sellers have provided the Purchaser with a true and correct copy of all Assumed Contracts disclosed on Schedule 2.6(a) attached hereto, in each case together with all amendments, waivers or other changes thereto.  To the Knowledge of the Sellers, Schedule 2.6(a) contains, a true and accurate description of all material terms of all oral Contracts referred to therein.

 

Section 2.7.            Real Property .

 

(a)           Schedule 2.7(a) of the Disclosure Schedules lists the street address of each parcel of real property owned by any Seller and used in connection with the Business (“ Owned Real Property ”).  The Sellers have indefeasible fee title to all Transferred Real Property that constitutes Owned Real Property, free and clear of all Encumbrances (except Permitted Encumbrances and Encumbrances that will be removed at or prior to Closing), which shall be transferred to the Purchaser free and clear of all Encumbrances, other than Permitted Encumbrances at the Closing upon the entry of the Sale Approval Order.  Except for Permitted Encumbrances, there are no leases, subleases, licenses, concessions, or other agreements, written or oral, granting to any Person the right of use or occupancy of any portion of such Transferred Real Property.  There are no outstanding options or rights of first refusal to purchase such Transferred Real Property (other than the right of the Purchaser pursuant to this Agreement), or any portion thereof or interest therein.

 

(b)           No Seller leases any real property used in connection with the Business.

 

(c)           All material Permits required by any Governmental Body having jurisdiction over the Transferred Real Property have been paid for and are in full force and effect.

 

(d)           To the Knowledge of the Sellers, the Sellers have not received, during the two (2) year period prior to the date of this Agreement, any written notice alleging that the operation and use of the buildings and other improvements constituting the Transferred Real Property violates, in any material respect, any zoning, subdivision, building or similar Law or recorded plot or any certificate of occupancy issued with respect to the Transferred Real Property.

 

(e)           To the Knowledge of Sellers, there are no defects in the buildings, improvements and structures and fixtures located on or at the Transferred Real Property which would reasonably be expected to materially impair the conduct of the Business.

 

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Section 2.8.            Intellectual Property .

 

(a)           Schedule 2.8(a)  attached hereto sets forth a complete and correct list of all of the following that are owned by any Seller and constitute Transferred IP:

 

(i)            patented or registered Intellectual Property and pending patent applications or other applications for registrations of Intellectual Property; and

 

(ii)           to the Knowledge of the Sellers, material unregistered trademarks, unregistered service marks, trade names, corporate names, and Internet domain names, including fleetwoodrv.com.

 

(b)           The Transferred IP and the Shared IP constitutes all Intellectual Property necessary for the conduct of the Business.  To the Knowledge of the Sellers, each Seller owns and possesses all right, title and interest in and to all of the Intellectual Property set forth on Schedule 2.8(a) attached hereto and owns and possesses all, right, title and interest in and to the Transferred IP and the Shared IP.  The Transferred IP and the Shared IP is not subject to any Encumbrances (other than Encumbrances that will be removed at or prior to Closing), and is not subject to any material restrictions or limitations regarding use or disclosure other than pursuant to a written license agreement.  The Sellers are not party to any license agreements pursuant to which a Seller licenses any Transferred IP to any Third Party.

 

(c)           To the Knowledge of the Sellers, no Seller has infringed, misappropriated, diluted or otherwise conflicted with, with respect to the operation of the Business, any Intellectual Property of any Third Party during the last two (2) years.  To the Knowledge of the Sellers, no Seller has received any written notice regarding any of the foregoing (including any demands or offers to license any Intellectual Property from any Third Party) during the last two (2) years.

 

(d)           To the Knowledge of the Sellers, each Seller has taken reasonable action to maintain and protect all of the material Transferred IP and Shared IP.  To the Knowledge of the Sellers, no Third Party has infringed, misappropriated, diluted or otherwise conflicted with any of the Transferred IP or Shared IP during the last two (2) years.

 

(e)           To the Knowledge of the Sellers, all of the registered Transferred IP or Shared IP is valid and enforceable and no claim by any Third Party contesting the validity, enforceability, use or ownership of any registered Transferred IP or Shared IP has been made during the last two (2) years or is currently outstanding.

 

Section 2.9.            Litigation .  Except for the Bankruptcy Case and other matters on the docket related thereto (including information included in the Sellers’ Schedules of Assets and Liabilities and Statements of Financial Affairs filed with the Bankruptcy Court), (i) there are no material Claims (including products liability Claims) pending or, to the Knowledge of the Sellers, threatened against a Seller with respect to the Business, the Assumed Liabilities or any Transferred Asset and (ii) there are no Claims pending or, to the Knowledge of the Sellers, threatened that question the validity of this Agreement, the other Transaction Documents or any of the transactions contemplated hereby or thereby.

 

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Section 2.10.          Title to Assets .

 

(a)           The Sellers have good and marketable title to, or a valid and enforceable right by Contract to use, the Transferred Assets, which shall be transferred to the Purchaser free and clear of all Encumbrances, other than Permitted Encumbrances at the Closing upon entry of the Sale Approval Order.  The Transferred Assets, taken as a whole, are in good operating condition and repair (ordinary wear and tear excepted) and are fit for use in the Ordinary Course of Business.

 

(b)           Except as set forth on Schedule 2.10(b) , attached hereto, the Sellers own or have a valid right to use pursuant to Contract all buildings, machinery, equipment, and other tangible assets necessary for the conduct of the Business in the Ordinary Course of Business.  The Transferred Assets, together with any assets or services provided to the Purchaser under the Transition Services Agreement and Shared IP, constitute all of the assets, agreements, licenses and properties (other than the Excluded Assets) that are primarily used in or otherwise necessary for the conduct of the Business.  Except as set forth on Schedule 2.10(b) , none of the Transferred Assets are located outside of the Transferred Real Property, Plant 47 or Plant 71.

 

Section 2.11.          Inventory .  The Inventory substantially consists of, and as of the close of business on the day immediately preceding the Closing Date the Inventory will substantially consist of, items which are (i) free of any material defect; (ii) of a quality usable and salable in the Ordinary Course of Business; and (iii) fit and merchantable for their particular use. None of the Inventory is subject to any consignment, bailment, warehousing or similar agreement.

 

Section 2.12.          Brokers .  Except for the fees payable by the Seller to Greenhill & Co., LLC, the Seller has not paid or agreed to pay, or received any Claim with respect to, any brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated hereby.

 

Section 2.13.          Financial Statements and Related Matters .

 

(a)           Schedule 2.13(a) contains correct and complete copies of (i) the unaudited consolidated balance sheets and related consolidated income statements for the Business (other than the RV Supply Business) as of, and for the year ended April 27, 2008, together with the notes thereto (the “ 2008 RV Financial Statements ”) and (ii) the unaudited consolidated balance sheet of the Business and the related unaudited consolidated income statements for the year ended April 26, 2009 (the “ 2009 RV Financial Statements ”).

 

(b)           Schedule 2.13(b) contains correct and complete copies of (i) the unaudited balance sheets and related income statements for the RV Supply Business as of, and for the year ended April 27, 2008, together with the notes thereto (the “ 2008 RV Supply Financial Statements ”) and (ii) the unaudited balance sheet of the RV Supply Business and the related unaudited income statements for the year ended April 26, 2009 (the “ 2009 RV Supply Financial Statements ”, and together with the 2008 RV Supply Financial Statements, 2009 RV Financial Statements, and 2008 RV Financial Statements, the “ Financial Statements ”).

 

(c)           The Financial Statements present fairly, in all material respects, the financial results and balance sheets of the Business, at the dates and for the time periods

 

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indicated have been prepared in accordance with GAAP, applied on a consistent basis throughout the periods covered thereby (subject to normal year-end audit adjustments and to the omission of footnotes required by GAAP and to the omission of statements of cash flows and shareholders’ equity).  The Financial Statements were derived from the Books and Records, which are accurate and complete.

 

Section 2.14.          Employee Benefit Plans .

 

(a)           Schedule 2.14(a) attached hereto, sets forth a complete and accurate list of each Employee Benefit Plan the Sellers maintain, contribute to or which is maintained by any other Person for the benefit of any of the Sellers’ employees or under which the Sellers have any Liability or potential Liability to any employee or former employee or any other individual Employee Benefit Plan.  The Sellers have made available to the Purchaser true and correct copies, if applicable, of each Employee Benefit Plan.

 

(b)           None of the Employee Benefit Plans is a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or is subject to Sections 4063 and 4064 of ERISA.

 

Section 2.15.          Labor Matters .  To the Knowledge of the Sellers, employees of the Sellers have not been, and currently are not, represented by any union or labor organization or group whatsoever or covered by any collective bargaining agreement.  No Seller has been a signatory to any collective bargaining agreement.

 

Section 2.16.          Personnel Matters .  Except as otherwise prohibited by applicable Law, ParentCo has delivered to the Purchaser, to the Knowledge of the Sellers, an accurate list of the names, job classifications, dates of hire, wage rates, base compensation, commission rates, and any supplemental or bonus compensation (including, without limitation, any retention or stay bonus arrangements and deferred compensation arrangements) for all persons currently employed by, or providing consultant or independent contractor services to, the Sellers, primarily associated with the Business.

 

Section 2.17.          Environmental Matters .

 

(a)           The Sellers have all material Permits required under Environmental Laws to conduct the Business in the Ordinary Course of Business and to own and operate the material Transferred Assets in the Ordinary Course of Business (collectively, the “ Environmental Permits ”).  All material Environmental Permits of the Sellers used primarily in the Business are in full force and effect, and no suspension or cancellation of any such material Environmental Permits is pending or to the Knowledge of the Sellers threatened.  The Sellers (other than with respect to activities not primarily related to the Business), the Business, and the Transferred Assets are in compliance in all material respects with all Environmental Permits and all Environmental Laws.

 

(b)           To the Knowledge of the Sellers, no Seller is currently required to undertake any corrective or remedial obligation under any Environmental Law with respect to the Business or the Transferred Assets.

 

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(c)           To the Knowledge of the Sellers, no Seller nor any predecessor or Affiliate of any Seller has received any written notice regarding any unresolved actual or alleged violation of Environmental Laws, or any current material Liabilities or potential material Liabilities, including any investigatory, remedial or corrective obligations, relating to the Transferred Assets or the Business arising under Environmental Laws.

 

(d)           The Sellers have provided to the Purchaser all Phase I and Phase II environmental reports and any other material documents relating to any environmental, health or safety matters, relating to the Transferred Assets.

 

(e)           To the Knowledge of the Sellers, none of the following exists at any of the Transferred Real Property: (1) leaking underground storage tanks, (2) asbestos-containing material which in its present condition requires abatement under Environmental Laws, (3) materials or equipment containing polychlorinated biphenyls, or (4) landfills, surface impoundments, or disposal areas.

 

(f)            The representations contained in this Section 2.17 shall be the only representations covering environmental matters, including matters relating to Environmental Laws and Hazardous Substances.

 

Section 2.18.          Affiliated Transactions .  To the Knowledge of the Sellers, no Insider has any interest in the Transferre