Exhibit 99.1
Asset Purchase Agreement
by and between
Bay4 Capital Partners, LLC
and
Comdisco, Inc.
Dated as of August 25, 2003
Table of Contents
Page
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..........................................................................................2
ARTICLE II PURCHASED ASSETS; PURCHASE PRICE; CLOSING...........................................................2
2.1 Purchased Assets...............................................................................2
2.2 Purchase Price.................................................................................2
2.3 Payment Priorities; Contingent Payments........................................................2
2.4 The Closing....................................................................................2
2.5 Payment of Taxes...............................................................................2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER...........................................................2
3.1 Organization and Good Standing.................................................................2
3.2 Corporate Authority............................................................................2
3.3 No Conflicts...................................................................................2
3.4 Consents.......................................................................................2
3.5 No Violations of Law...........................................................................2
3.6 Taxes..........................................................................................2
3.7 Litigation and Liabilities.....................................................................2
3.8 Conduct of Business............................................................................2
3.9 Transactions With State and Local Governments..................................................2
3.10 Brokers' or Finders' Fees, etc.................................................................2
ARTICLE IV STANDARDS FOR PURCHASED ASSETS......................................................................2
4.1 Financing Contracts............................................................................2
4.2 Leased Property................................................................................2
4.3 Other Contracts................................................................................2
4.4 Purchase Price Statement; Reports..............................................................2
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................................2
5.1 Organization and Good Standing.................................................................2
5.2 Corporate Authority............................................................................2
5.3 No Conflicts...................................................................................2
5.4 Consents.......................................................................................2
5.5 Brokers' or Finders' Fees, etc.................................................................2
5.6 Financing......................................................................................2
ARTICLE VI CONDUCT AND TRANSACTIONS PRIOR TO CLOSING; COVENANTS................................................2
6.1 No Solicitation................................................................................2
6.2 Access.........................................................................................2
6.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings......................................................................2
6.4 No Changes.....................................................................................2
6.5 Conduct of Business............................................................................2
6.6 Negative Covenants.............................................................................2
6.7 Pending or Threatened Litigation...............................................................2
6.8 Tax Matters/Allocation of Purchase Price.......................................................2
6.9 Insurance; Risk of Loss........................................................................2
6.10 Further Assurances.............................................................................2
6.11 Payment of Broker's or Finder's Fees...........................................................2
6.12 Deferred Fees..................................................................................2
6.13 Employees......................................................................................2
6.14 Covenants; Enforcement of Restrictive Covenants................................................2
6.15 Restructuring Payment..........................................................................2
6.16 Radio Shack Reconciliation.....................................................................2
6.17 Ancillary Agreements...........................................................................2
6.18 Other Intellectual Property....................................................................2
6.19 Post-Closing Operations of Purchaser...........................................................2
6.20 Post-Closing Reporting Obligations.............................................................2
6.21 Books and Records..............................................................................2
6.22 Property Tax...................................................................................2
6.23 Inactive Contracts.............................................................................2
6.24 Best Efforts...................................................................................2
6.25 Headquarters Space.............................................................................2
6.26 DLR Invoicing..................................................................................2
6.27 Lockbox Cash...................................................................................2
6.28 Additional Lease Transactions..................................................................2
6.29 Purchase Price Statements......................................................................2
6.30 Canadian Transaction...........................................................................2
6.31 Transfers Not Effected as of Closing...........................................................2
ARTICLE VII CONDITIONS TO CLOSING; ABANDONMENT OF THE TRANSACTION..............................................2
7.1 Conditions to Purchaser's Obligations to Close.................................................2
7.2 Conditions to Seller's Obligations to Close....................................................2
ARTICLE VIII TERMINATION.......................................................................................2
8.1 Termination....................................................................................2
8.2 Procedure and Effect of Termination............................................................2
ARTICLE IX NO COMPETITION; No Solicitation; Confidentiality....................................................2
9.1 No Competition.................................................................................2
9.2 No Solicitation................................................................................2
9.3 Confidentiality................................................................................2
9.4 Public Announcements...........................................................................2
9.5 Miscellaneous..................................................................................2
ARTICLE X Indemnifications and Related Matters.................................................................2
10.1 Indemnification by Seller......................................................................2
10.2 Additional Indemnification by Seller...........................................................2
10.3 Sole and Exclusive Remedy......................................................................2
10.4 Indemnification by Purchaser...................................................................2
10.5 Additional Indemnification by Purchaser........................................................2
10.6 Indemnification Procedure......................................................................2
10.7 Survival of Representations and Warranties.....................................................2
ARTICLE XI GENERAL.............................................................................................2
11.1 Lock Box Reconciliation........................................................................2
11.2 Amendments.....................................................................................2
11.3 Integrated Contract............................................................................2
11.4 Governing Law..................................................................................2
11.5 Notices........................................................................................2
11.6 No Assignment..................................................................................2
11.7 Headings.......................................................................................2
11.8 Counterparts...................................................................................2
11.9 Severability...................................................................................2
11.10 Binding Effect.................................................................................2
11.11 Waiver of Jury Trial...........................................................................2
11.12 No Third-Party Beneficiary.....................................................................2
11.13 Conveyancing Documents.........................................................................2
11.14 Expenses 2
11.15 Currency 2
Exhibits
Exhibit A Form of Lease Services Agreement
Exhibit B Form of Promissory Note
Exhibit C Form of Security Agreement (Note Portion)
Exhibit D Form of Subordination Agreement
Exhibit E Form of Trademark License Agreement
Exhibit F Form of ▇▇▇▇ of Sale
Exhibit G Form of Assumption Agreement
Exhibit H Form of Transition Services Agreement
Exhibit I Form of Retention Bonus Agreement
Exhibit J Form of Seller's Counsel Opinion
Exhibit K Form of Seller's Counsel Opinion
Exhibit L Form of Purchaser's Counsel Opinion
Schedules
Schedule 1.1 Exceptions to Bankrupt Accounts Receivable
Schedule 1.2 Assumed Indebtedness
Schedule 1.3 [Intentionally Omitted]
Schedule 1.4 Credit Enhancements
Schedule 1.5 Computer Hardware
Schedule 1.6 Inventory
Schedule 1.7 Lease Exceptions
Schedule 1.8 Lease Transactions
Schedule 1.9 Marks
Schedule 1.10 Other Contracts
Schedule 1.11 Lockbox Accounts
Schedule 1.12 Telephone and Facsimile Numbers
Schedule 1.13 Residuals
Schedule 2.1(b) Excluded Assets
Schedule 2.2(b)(v) Certain Lease Transactions
Schedule 2.3 Bank One Remarketing Agreement
Schedule 3.1 Organization and Good Standing Disclosures
Schedule 3.4 Consents
Schedule 4.1(b) Financing Contract Disclosures
Schedule 4.1(c) Certain Credit Enhancements
Schedule 4.1(d) Required Consent Financing Contracts
Schedule 4.1(e) Certain Remarketing Agreements
Schedule 4.2(a) Leased Property Disclosures
Schedule 4.2(b)(ii) Financing Contracts with Seller Provided
Insurance
Schedule 4.4(a) Purchase Price Statement
Schedule 6.16 Radio Shack Leases
ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement is made and entered into on
August 25, 2003, by and between BAY4 CAPITAL PARTNERS, LLC, a Florida limited
liability company ("Purchaser"), and COMDISCO, INC., a Delaware corporation
("Seller").
WHEREAS, Purchaser desires to purchase and acquire, and Seller
desires to sell, convey, assign and transfer to Purchaser, the Purchased Assets
(as hereinafter defined), which comprise substantially all of the remaining
assets of Seller's United States information technologies equipment leasing
business (the "Business"), and Purchaser is willing to assume, and Seller
desires to assign and delegate to Purchaser, certain liabilities associated
therewith, all in the manner and subject to the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein and intending to be legally bound, Purchaser and
Seller do hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the
following meanings:
"Accounts Receivable" means the accounts receivable of Seller
existing on, and arising after, the Effective Date relating to (i) the Lease
Portfolio and (ii) any inactive master lease or master rental agreement
(including any master agreement and product supplement agreement) that has been
assigned a "leasing corp code" of 01, 10, 18 or 43 in the Books and Records of
Seller as maintained prior to the date hereof; provided, that, except for lease
agreements or rental agreements and any master leases or master rental
agreements (including any master agreements and product supplement agreements)
specifically set forth on Schedule 1.1, clause (ii) shall not include any master
lease or master rental agreement (including any master agreement and product
supplement agreement) with a counterparty that is subject to any voluntary or
involuntary bankruptcy proceeding or as to which a receiver or trustee has been
appointed to administer its insolvency.
"Advance Payment" shall mean, in respect of any Financing
Contract, any security deposit or other payment that was received by Seller as
collateral or security, or any advance rent or unapplied cash received by Seller
prior to the scheduled due date therefor, in each case to the extent existing
on, or arising after, the Effective Date in respect of such Financing Contract.
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries controls,
is controlled by, or is under common control with such Person.
"Agreement" shall mean this
Asset Purchase Agreement,
including the schedules and exhibits attached hereto and made a part hereof, as
the same may be supplemented or amended from time to time in accordance with the
provisions hereof.
"Allocation Statement" shall have the meaning given to such
term in Section 6.8(c).
"Assumed Indebtedness" shall mean the institutional
indebtedness of Seller as specifically listed on Schedule 1.2.
"Assumed Liabilities" shall mean all liabilities and
obligations of Seller and its Affiliates with respect to, arising out of or
relating to (i) the Assumed Indebtedness, (ii) the ownership, possession or use
of the Other Contracts to the extent arising on or after the Effective Date,
(iii) the ownership, possession or use of the Financing Contracts, Financing
Documents, Leased Property and Credit Enhancements (including, without
limitation, residual sharing obligations) to the extent arising on or after the
Effective Date, (iv) the ownership, possession or use of the Inventory to the
extent arising on or after the Effective Date, (v) the ownership, possession or
use of the Inactive Contracts (to the extent that Purchaser or an Affiliate of
Purchaser operate or exercise rights under or use, or seek to do any of the
foregoing, with respect to such Inactive Contracts) to the extent arising on or
after the Effective Date, (vi) accounts payable related to the Financing
Contracts to the extent arising on or after the Effective Date, (vii) any
obligations as a lessor to any Obligor under any Financing Contracts to the
extent arising on or after the Effective Date, (viii) Advance Payments, (ix) the
ownership, possession or use of the Marks to the extent arising on or after the
Effective Date (but not including any liabilities or obligations to the extent
resulting from the use by Seller as licensee (or any sublicensee of Seller) of
the Marks except to the extent such use is the result of the specific written
instruction of Purchaser) and (x) the ownership, possession or use of the
Computer Hardware to the extent arising on or after the Effective Date. Assumed
Liabilities shall not include any other liabilities or obligations of Seller.
"Authorization" shall mean any domestic or foreign, federal,
state, provincial, local or other governmental or other quasi-governmental
consent, license, permit, grant, authorization or approval, including but not
limited to any consent, license, permit, grant, authorization or approval of any
agency, instrumentality or subdivision of the foregoing, which is used in or
necessary to the ownership, use, lease or operation of any of the Purchased
Assets.
"Bankruptcy Exception" shall mean, in respect of any
agreement, contract or commitment, any limitation thereon imposed by any
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar law affecting creditors' rights and remedies generally and, with respect
to the enforceability of any agreement, contract or commitment, by general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
"Books and Records" means the books and records of Seller to
the extent specifically relating to the Lease Portfolio.
"Business" shall have the meaning given to such term in the
preamble to this Agreement.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which commercial banks in
New York City,
New York are authorized
or required by law to close.
"Buyout Value" shall mean the sum of (i) the present value of
the remaining future lease rental payments originally due under any Financing
Contract that is made subject to a Restructuring Transaction pursuant to Section
6.15 hereof discounted to the effective rental start date of such Restructuring
Transaction at a per annum rate (appropriately compounded to reflect the
frequency of such future lease rental payments) equal to the lesser of (a) the
interest rate of the Assumed Indebtedness, if any, with respect to such
Financing Contract, (b) the penalty rate of the Assumed Indebtedness, if any,
with respect to such Financing Contract or (c) 4.5% and (ii) the present value
of Residual of the Leased Property subject to such Financing Contract (reduced
by any month-to-month lease rental payments received after the scheduled
termination date of such Financing Contract) discounted to the effective rental
start date of such Restructuring Transaction at a per annum rate (compounded
annually) of 5.0%, in each case as such present values are determined
immediately prior to giving effect to any changes or modifications that would be
caused by or result from such Restructuring Transaction.
"Canadian Transaction Documents" shall have the meaning given
to such term in Section 6.30.
"Cash Portion" shall have the meaning given to such term in
Section 2.2(a)(i).
"Closing" shall mean the consummation of the transactions
contemplated hereby pursuant to the terms of this Agreement, and "Closing Date"
shall be deemed to mean the date of such Closing.
"COBRA" shall have the meaning given to such term in Section
6.13(b).
"COBRA Subsidy" shall have the meaning given to such term in
Section 6.13(b).
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor law.
"Comdisco Canada" shall have the meaning given to such term in
Section 6.30.
"Commitment Letter" shall have the meaning given to such term
in Section 5.6.
"Competitive Business" shall have the meaning given to such
term in Section 9.1.
"Computer Hardware" shall mean the personal computers and
laptops owned by Seller that are used by Hired Employees on a day-to-day basis
and the computer equipment owned by Seller that is specifically listed on
Schedule 1.5 and, to the extent transferable, any third party vendor software
contained on such personal computers, laptops and computer equipment.
"Computer Software" shall mean the CLASS, IPM, STP and LBQ
computer software (including object code and source code and documentation
related thereto to the extent available) and related Know-How owned by Seller
and used exclusively by or in connection with any Obligor; provided, however,
that the term Computer Software shall not include any third party software such
as the Imaging System or any other third party software used as a platform or
otherwise necessary to run any such computer software.
"Credit Enhancement" shall mean any (i) Advance Payment, (ii)
investment certificate, certificate of deposit, authorization to hold funds,
hypothecation, pledge or charge of account or like instrument, (iii) letter of
credit, repurchase agreement, agreement of indemnity, guarantee, lease guarantee
bond or postponement agreement, (iv) recourse agreement, (v) security agreement,
(vi) Property, (vii) certificate representing shares or the right to purchase
capital of or interests in, any Person, (viii) agreement, contract or
arrangement designed to enhance the creditworthiness of an Obligor, or (ix) bond
or debenture including, without limitation, those listed on Schedule 1.4, in
each case to the extent pledged, assigned, mortgaged, charged, hypothecated,
made, delivered or transferred as security for the performance of any obligation
under or with respect to any Financing Contract or any Other Contract
constituting Purchased Assets.
"Current Receivables" shall mean the Accounts Receivable of
Seller that are, as of the Effective Date, outstanding less than 60 days after
the first date on which payment of such amount was required pursuant to the
applicable Financing Contract; provided, however, that in no event shall Current
Receivables include any Accounts Receivable associated with (i) Lease Exceptions
or (ii) amounts for sales, use and other similar Taxes.
"Damages" shall mean any and all losses, claims, damages,
liabilities, obligations, judgments, equitable relief granted, settlements,
awards (including back pay awards), demands, offsets, defenses, counterclaims,
actions or proceedings, reasonable out-of-pocket costs, reasonable expenses and
reasonable legal or attorneys' fees (including any such reasonable costs,
reasonable expenses and reasonable legal or attorneys' fees incurred in
enforcing any right of indemnification against any Indemnitor or with respect to
any appeal), interest and penalties, if any.
"Deferred Portion" shall have the meaning given to such term
in Section 2.2(c).
"Direct Costs of Restructuring" shall mean, with respect to a
Financing Contract that is the subject of a Restructuring Transaction pursuant
to Section 6.15 hereof, the sum of (i) any costs of property or equipment newly
added to such Financing Contract as a result of such Restructuring Transaction,
(ii) soft costs financed as a part of the property or equipment financing
payments (such as prepaid maintenance or prepaid taxes) under such restructured
Financing Contract and (iii) commissions paid or payable in connection with the
completion of such Restructuring Transaction at the actual rate incurred, but in
no event greater than 20.0% of the Margin; provided, that for purposes of
calculating Margin solely with respect to this clause (iii), the amount of
Direct Costs of Restructuring utilized in such Margin calculation shall be equal
to the sum of the costs identified only in clauses (i) and (ii) of this
definition without giving effect to the amount of commissions paid or payable in
connection with the completion of such Restructuring Transaction.
"Document" shall mean any book, record, file, paper, computer
tape, computer disk, microfilm, information storage device of any type and any
other document.
"Domain Name" shall mean the domain name "▇▇▇▇▇▇▇▇.▇▇▇".
"Effective Date" shall mean 11:59 p.m. local time in Chicago,
Illinois on August 31, 2003.
"Encumbrance" shall mean any title defect, conflicting or
adverse claim of ownership, mortgage, hypothecation, security interest, lien,
pledge, claim, right of first refusal, option, charge, covenant, reservation,
lease, order, decree, judgment, stipulation, settlement, attachment,
restriction, objection or any other encumbrance of any nature whatsoever,
whether or not perfected.
"Environmental Costs and Liabilities" means, with respect to
any Person, all liabilities, obligations, responsibilities, Remedial Action,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including, but not limited to, all reasonable fees, disbursements
and expenses of counsel, experts and consultants and costs of investigation),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any other Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including any thereof
arising under any Environmental Law, Environmental Permit, order or agreement
with any Governmental Entity or other Person, which relate to any environmental,
health or safety condition or a Release or threatened Release.
"Environmental Law" means any applicable federal, state,
provincial, local, or foreign law (including common law), statute, code,
ordinance, rule, regulation or other legal requirement relating to the
environment, natural resources, or public or employee health and safety.
"Environmental Permit" shall mean, with respect to Seller, all
Authorizations required by Environmental Law to use the Purchased Assets.
"Estimated Purchase Price Statement" shall mean a statement
that sets forth the estimated Purchase Price calculation, prepared in accordance
with the Statement Methodology as of the Effective Date by adjusting the
Purchase Price Statement in the manner set forth in Section 2.2(d) hereof.
"Excluded Assets" shall mean all assets of the Seller and its
subsidiaries and Affiliates except for the Purchased Assets, including, without
limitation, (i) all cash and cash equivalents (including all rights or incidents
of interest of Seller with respect to the cash or cash equivalents in Lockbox
Accounts) held by Seller or otherwise for the account of Seller prior to the
Effective Date, (ii) all Financing Contracts, Leased Property, Credit
Enhancements, manufacturers' and vendors' warranties and Accounts Receivable
that are not Purchased Assets pursuant to Section 2.1(d) hereof, (iii) all
Intellectual Property (other than Marks), except as set forth in Section 6.18
hereof, and (iv) the assets listed on Schedule 2.1(b).
"Excluded Liabilities" shall mean any liability or obligation
(whether known or unknown, contingent or absolute, or arising before, on or
after the Effective Date) of Seller other than the Assumed Liabilities. Excluded
Liabilities shall include, without limitation, (i) any Environmental Costs and
Liabilities to the extent arising from, related to or otherwise attributable to
(A) the operation by Seller or any of its Affiliates or any predecessors thereof
of any real property owned, operated or leased by Seller or any of its
Affiliates prior to the Effective Date, including, without limitation,
noncompliance with or liability under Environmental Law and Remedial Action
obligations, (B) any Excluded Asset or (C) the operations of Seller or any of
its Affiliates after the Effective Date; (ii) any obligation under this
Agreement of Seller; (iii) any rights or obligations under any agreements,
contracts, commitments or guaranties in respect of any indebtedness for borrowed
money not expressly assumed by Purchaser pursuant hereto; (iv) any liability
with respect to employees of Seller (other than as provided in Section 6.13 and
Section 10.4 hereof); (v) (A) any liability or obligation of Seller or any
Affiliate thereof (or any predecessor thereto) to the extent relating to any
Taxes imposed on or with respect to Seller or any such Affiliate (or any
predecessor thereto) other than with respect to the Purchased Assets or the
Assumed Liabilities and (B) any liability or obligation with respect to the
Purchased Assets or the Assumed Liabilities for all periods, or portions
thereof, ending on or prior to the Effective Date to the extent relating to
Taxes; and (vi) any liability of Seller to the extent related to any Excluded
Asset.
"Final Purchase Price Statement" shall mean a statement that
sets forth the final Purchase Price calculation, prepared in accordance with the
Statement Methodology by adjusting the Estimated Purchase Price Statement to
only the Special Adjustments and no others, which shall be described in
reasonable detail therein.
"Financing Contract" shall mean any lease agreement or rental
agreement and any master lease or master rental agreement (including any master
agreement and product supplement agreement), installment or conditional sales
agreement, sublease, loan and security agreement and promissory note, however
titled, in each case with respect to equipment or property owned and/or provided
by Seller, each evidencing the payment obligation of an Obligor and entered into
with respect to a Lease Transaction, together with all schedules, supplements
and addenda relative to any of the foregoing (including any assignment,
assumption, renewal or novation, delivery, acceptance or installation
certificates, purchase orders, purchase order assignments and sale and leaseback
agreements).
"Financing Documents" shall mean all applicable agreements,
arrangements, understandings and Documents, if any, entered into in connection
with or otherwise applicable to any Lease Transaction, including, without
limitation, all agreements, delivery and acceptance certificates, assignment
agreements, waivers, Uniform Commercial Code filings, certificates of title,
mortgages, commodity assignments, warranties and guarantees, together with all
schedules, supplements and addenda relative to any of the foregoing.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time in the United States consistently applied.
"Governmental Entity" shall mean a federal, state, provincial,
local, county or municipal government, governmental, regulatory or
administrative agency, department, commission board, bureau, court or other
authority or instrumentality, domestic or foreign.
"Hazardous Material" shall mean any material, substance or
waste that is classified, regulated or otherwise characterized under any
Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other
words of similar meaning or regulatory effect, including any petroleum or
petroleum-derived substance or waste, asbestos and polychlorinated biphenyls.
"Hired Employee" shall have the meaning given to such term in
Section 6.13(a).
"Hiring Affiliate" shall have the meaning given to such term
in Section 6.13(a).
"Holdback" shall mean the cash proceeds retained by ▇▇▇▇▇
Fargo in connection with the ▇▇▇▇▇ Fargo Purchase, which cash proceeds shall be
equal to two percent (2.0%) of the amount of the purchase price for the lease
receivables purchased by ▇▇▇▇▇ Fargo in connection with the ▇▇▇▇▇ Fargo
Purchase.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"HQ Building" shall have the meaning given to such term in
Section 6.25.
"HQ Purchaser" shall have the meaning given to such term in
Section 6.25.
"HQ Sale Agreement" shall have the meaning given to such term
in Section 6.25.
"Imaging System" shall mean the imaging system computer
software licensed by Seller from FileNet Corporation and the other software
licensed by Seller from FileNet Corporation and/or other third party vendors for
use in connection therewith and Seller's proprietary imaging application used in
connection therewith.
"Inactive Contract" shall mean Seller's rights to or under any
master lease or master rental agreement (including any master agreement and
product supplement agreement) that has been issued under a "leasing corp code"
of 01, 10, 18 or 43 and is or shall be inactive as of the Closing Date.
"Indemnification Event" shall mean any event, action,
proceeding or claim for which a Person is entitled to indemnification under this
Agreement.
"Indemnitor" shall mean the indemnifying person in the case of
any obligation to indemnify pursuant to the terms of this Agreement.
"Initial Allocation Statement" shall have the meaning given to
such term in Section 6.8(c).
"Intellectual Property" shall mean, collectively, all United
States and foreign registered, unregistered and pending (i) Marks, (ii) Computer
Software, (iii) copyrights (including, without limitation, those in Computer
Software and Know-How, and all registrations and applications therefor), (iv)
Know-How and (v) the Domain Name, in each case which are used by Seller in
connection with or related to the Lease Portfolio.
"Inventory" shall mean the equipment or property relating to
the Business that is either (i) set forth on Schedule 1.6 to the extent it has
not been sold or otherwise disposed of prior to Closing or (ii) is returned to
Seller or is in transit to or held on behalf of Seller, in each case as of the
Closing, to the extent related to Seller's North American information
technologies equipment leasing business.
"IRS" shall mean the United States Internal Revenue Service.
"Know-How" shall mean the trade secrets, know-how, data and
other confidential and proprietary technical, business and other information
primarily used by Seller in connection with or relating to the Lease Portfolio.
"Lease Exceptions" shall mean (i) all Financing Contracts for
which the Obligor with respect thereto has notified Seller of such Obligor's
intent not to make scheduled lease rental payments as and when such scheduled
lease rental payments become due and payable and (ii) all Financing Contracts
listed on Schedule 1.7.
"Lease File" shall have the meaning given to such term in
Section 6.2(a).
"Lease Portfolio" shall mean all of the Financing Contracts
and Leased Property.
"Lease Services Agreement" shall have the meaning given to
such term in Section 2.1(d).
"Lease Transaction" shall mean the lease or financing
arrangements provided by Seller with respect to equipment or property under
which Seller is the lessor, in each case as specifically set forth on Schedule
1.8.
"Leased Premises" shall have the meaning given to such term in
Section 6.25.
"Leased Property" shall mean equipment or property with
respect to which Seller is the lessor pursuant to the terms of a Financing
Contract.
"Lockbox Account" shall have the meaning given to such term in
Section 11.1.
"Margin" shall mean the sum, if greater than zero, of (i) the
present value of the new lease rental payments due and payable under any
restructured Financing Contract as a result of a Restructuring Transaction
pursuant to Section 6.15 hereof discounted to the effective rental start date of
such Restructuring Transaction at a per annum rate (appropriately compounded to
reflect the frequency of such new lease rental payments) equal to (a) if the
restructured Financing Contract is made subject to a non-recourse discounted
lease receivable arrangement that is the result of a bona fide, arms-length
business transaction with a third party that is not otherwise an Affiliate of
the Purchaser in connection with such Restructuring Transaction, the interest
rate of such non-recourse discounted lease receivable arrangement or (b) 4.5%,
(ii) less the Buyout Value of such Financing Contract and (iii) less any Direct
Costs of Restructuring reasonably incurred by Purchaser with respect to the
restructuring of such Financing Contract; provided, that in the case of clause
(i), the present value shall be determined after giving effect to any changes or
modifications that are caused by or have resulted from such Restructuring
Transaction.
"Marks" shall mean the name "Comdisco" and any other trade
names, trademarks, service marks, trade dress, logos, symbols, slogans and other
source identifiers set forth on Schedule 1.9, together with the goodwill
symbolized thereby. For the avoidance of doubt, Marks shall not include any
Domain Name of Seller or any domain names of its Affiliates.
"Material Adverse Effect" shall mean any state of facts,
events, changes or effects that is materially adverse to or materially impairs
(i) the ownership, collection, enforcement, value or administration of the
Purchased Assets taken as a whole, other than (A) changes in economic or
business conditions generally applicable to the United States and global
economies, (B) changes in laws and regulations impacting the information
technology equipment leasing industry generally, (C) changes or effects
resulting from the execution or announcement of this Agreement or (D) any event,
condition or matter that relates to foreign currency exchange rate or interest
rate fluctuations, or (ii) the ability of any party hereto to perform its
obligations under this Agreement.
"Monthly Cash" shall have the meaning given to such term in
Section 2.3.
"Monthly Statement" shall have the meaning given to such term
in Section 6.20.
"Note Portion" shall have the meaning given to such term in
Section 2.2(b).
"Obligor" shall mean any Person that is an obligor, borrower
or lessee under any Financing Contract.
"Original Equipment Cost" shall mean, with respect to any item
of Leased Property, the original cost or net book value of such Leased Property
as last recorded in the Books and Records of Seller in accordance with GAAP.
"Other Contracts" shall mean all alliance agreements, service
provider agreements, consulting agreements, consignment agreements, vendor
agreements, remarketing agreements and diversion agreements including, without
limitation, those listed on Schedule 1.10, in each case to the extent relating
to any Purchased Assets.
"Payment Termination Date" shall mean the date on which
Purchaser's obligation to make payments to Seller pursuant to Section 2.3(g)
shall terminate or expire pursuant to such Section 2.3(g).
"Permitted Encumbrance" shall mean (i) any Encumbrance for
Taxes not yet due and payable, (ii) any mechanic's or materialmen's lien, which
an Obligor under a Financing Contract is required to remove and which does not
materially affect the value of the Leased Property subject to such lien, (iii)
any Encumbrance on any Leased Property which is specifically permitted in
accordance with the terms of the related Financing Contract and which does not
materially affect the value of the Leased Property subject to such Encumbrance,
(iv) any Encumbrance created by, under or as a result of any Assumed
Indebtedness, (v) any Encumbrance resulting from the terms of the applicable
Financing Contract that is reflected on the books and records of Seller in
accordance with GAAP or (vi) any Encumbrance that is identified or described in
the Portfolio Information as of the Effective Date.
"Person" shall mean any individual, partnership, corporation,
trust, limited liability company, unincorporated organization, government or
department or agency thereof and any other entity.
"Portfolio Information" shall mean, with respect to any
Financing Contract, the following information: (i) the name of the Obligor under
such Financing Contract, (ii) the lease schedule number of such Financing
Contract, (iii) a description of each item of Leased Property relating to such
Financing Contract to the extent available in Seller's "leasebase" system, (iv)
the Original Equipment Cost for each item of Leased Property relating to such
Financing Contract, (v) the stated contractual end of term thereof, (vi) the
date of the last scheduled payment under such Financing Contract, (vii) all
scheduled payments due under such Financing Contract set forth on a quarterly
basis, whether billed or unbilled, (viii) the terms of any purchase options in
favor of the Obligor or any other Person, (ix) the proper accounting
classification thereof on the books of the Seller, (x) the "leasing corp code"
of such Financing Contract, (xi) the billing frequency of such Financing
Contract, (xii) the Residual value of the Leased Property subject to such
Financing Contract, (xiii) the country in which the Leased Property of such
Financing Contract is currently located, (xiv) the net book value of such
Financing Contract as recorded in Seller's book and records, (xv) the amount of
prepaid maintenance or prepaid sales tax with respect to such Financing Contract
and (xvi) whether such Financing Contract is a month-to-month Financing
Contract.
"Proceedings" shall mean any civil, criminal or administrative
actions, suits, claims, hearings, investigations or proceedings pending
(including, but not limited to, any counterclaim).
"Promissory Notes" shall have the meaning given to such term
in Section 2.2(b).
"Property" shall mean all property and assets of whatever
nature, including, but not limited, to personal property, whether tangible or
intangible, and whether leased or owned, and claims, rights and chooses in
action.
"Proposed Acquisition Transaction" shall have the meaning
given to such term in Section 6.1.
"Purchase Price" shall mean the amount to be paid by Purchaser
to Seller in accordance with Section 2.2.
"Purchase Price Statement" shall have the meaning given to
such term in Section 4.4(a).
"Purchased Assets" shall mean the following assets
constituting, used in connection with or relating to the Business in existence
as of the Effective Date (but shall not include any Excluded Assets listed on
Schedule 2.1(b)):
(i) all Financing Contracts and all Financing Documents;
(ii) all Leased Property;
(iii) all Inventory;
(iv) all Credit Enhancements (other than Advance Payments) related to the
Financing Contracts;
(v) to the extent transferable, all Other Contracts;
(vi) to the extent transferable, all Inactive Contracts;
(vii) to the extent transferable, all rights under manufacturers' and
vendors' warranties to the extent relating to the Purchased Assets and
all similar rights against third parties to the extent relating to the
Purchased Assets;
(viii) copies of all Books and Records;
(ix) all Marks;
(x) to the extent transferable, all Computer Hardware;
(xi) all Accounts Receivable;
(xii) all Lockbox Accounts listed on Schedule 1.11 (including all rights or
incidents of interest to cash or cash equivalents in such Lockbox
Accounts on and after (but not prior to) the Effective Date to the
extent such cash or cash equivalents is deposited or held in such
Lockbox Accounts otherwise than in respect of the Excluded Assets);
(xiii) to the extent transferable, the telephone and facsimile numbers listed
on Schedule 1.12; and
(xiv) any other rights to receive payments to the extent related to the
Financing Contracts that would be reflected on a balance sheet of
Seller prepared in accordance with GAAP as "prepaid maintenance costs"
or "prepaid sales taxes" and any other similar accounts to which
payments owed by an Obligor to Seller under a Financing Contract are
associated.
"Purchaser" shall mean Bay4 Capital Partners, LLC, a Florida
limited liability company.
"Purchaser Indemnified Parties" shall have the meaning given
to such term in Section 10.1.
"Purchaser Related Documents" shall have the meaning given to
such term in Section 10.4.
"Qualified Beneficiaries" shall have the meaning given to such
term in Section 6.13(b).
"Quarterly Statement" shall have the meaning given to such
term in Section 6.20.
"Radio Shack Leases" shall have the meaning given to such term
in Section 6.16.
"Reconciliation Amount" shall have the meaning given to such
term in Section 6.16.
"Release" means, with respect to any Person, any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration of Hazardous Material through or in the air,
soil, surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Hazardous Material in the indoor
or outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Hazardous Material does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"Required Consent Financing Contract" shall mean any Financing
Contract that requires consent (by contract or applicable law), or novation, of
the Obligor or another third party to be transferred by Seller to Purchaser.
"Residual" shall mean, with respect to any item of Leased
Property, the amount set forth on Schedule 1.13 as the book value of such Leased
Property at the expiration of the Financing Contract to which it is subject,
recorded on the books and records of Seller as "NBV at term" in accordance with
Seller's past accounting practices.
"Restructuring Transaction" shall mean the restructuring
(whether by "firm term" extension, renewal, upgrade or similar transaction with
an Obligor that is greater than three (3) months in duration) of any Financing
Contract by an Affiliate of Purchaser following the sale by Purchaser of the
Financing Contract and the Leased Property subject thereto, together with any
related assets or obligations, to such Affiliate of Purchaser where such
restructuring is a bona fide, arms-length business transaction with an Obligor
that is not otherwise an Affiliate of the Purchaser; provided, however, that in
no event shall a sale of the Leased Property subject to a Financing Transaction
to the Obligor pursuant to the terms thereof constitute a Restructuring
Transaction.
"Revised Allocation Statement" shall have the meaning given to
such term in Section 6.8(c).
"Seller" shall mean Comdisco, Inc., a Delaware corporation.
"Seller Claims" shall have the meaning given to such term in
Section 6.9.
"Seller Disclosure Schedules" shall have the meaning given to
such term in Article III.
"Seller Indemnified Parties" shall have the meaning given to
such term in Section 10.4.
"Seller Related Documents" shall have the meaning given to
such term in Section 10.1.
"Seller's Insurance Policies" shall have the meaning given to
such term in Section 6.9.
"Seller's Knowledge" or any similar expression shall mean the
actual knowledge of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Special Adjustments" shall mean such adjustments to the
Estimated Purchase Price Statement as shall be necessary to correct manifest
errors with respect to the estimated Purchase Price calculation, including, for
example, exclusion of Purchased Assets due to buyout or other disposition prior
to the Effective Date, addition of in-transit Inventory, reconciliation of final
month-to-month lease schedules, adjustments to Residual in excess of contractual
buyout amounts and final adjustments to Assumed Liabilities and Accounts
Receivable to reflect cash received by Seller prior to the Effective Date, but
shall not include any adjustments relating to the valuation or carrying amount
of any Purchased Asset.
"State and Local Governmental Entity" shall mean a state,
province, territory or possession of the United States, or fully constituted
political subdivision or agency of any of the foregoing, or the District of
Columbia.
"Statement Methodology" shall have the meaning given to such
term in Section 4.4(a).
"Subordination Agreement" shall have the meaning given to such
term in Section 2.2(e).
"Tax" (and, in the plural, "Taxes") shall mean any domestic or
foreign federal, state, provincial or local taxes, charges, fees, levies,
imposts, duties and governmental fees or other like assessments or charges of
any kind whatsoever, together with any interest or penalty, addition to Tax or
additional amount imposed with respect thereto or any Tax Return, whether
payable by reason of contract, assumption, transferee liability, operation of
law or otherwise (including, but not limited to, any income, net income, gross
income, receipts, windfall profit, severance, property, inventory and
merchandise, business privilege, production, sales, use, license, excise,
registration, franchise, employment, payroll, withholding, alternative or add-on
minimum, intangibles, ad valorem, transfer, gains, stamp, estimated,
transaction, title, capital, paid-up capital, profits, occupation, premium,
value-added, recording, real property, personal property, federal highway use,
commercial rent or environmental tax).
"Tax Return" shall mean any return, report or statement
required to be filed with respect to any Tax (including any attachments thereto,
and any amendment thereof) including, but not limited to, any information
return, claim for refund, amended return or declaration of estimated Tax, and
including, where permitted or required, combined, unitary or consolidated
returns for any group of entities that includes Seller or their Affiliates.
"Trademark License" shall have the meaning given to such term
in Section 6.17.
"Transfer Taxes" shall have the meaning given to such term in
Section 6.8(b).
"Transition Services Agreement" shall have the meaning given
to such term in Section 6.17.
"Unidentified Receipts" shall have the meaning given to such
term in Section 11.1.
"▇▇▇▇▇ Fargo" shall mean ▇▇▇▇▇ Fargo Equipment Finance, Inc.
"▇▇▇▇▇ Fargo Purchase" shall mean the purchase by ▇▇▇▇▇ Fargo
of certain lease payment receivables from Purchaser in connection with the
financing by Purchaser of the Cash Portion of the Purchase Price, the net cash
proceeds of which purchase shall be equal in aggregate amount to the total Cash
Portion amount set forth on the Estimated Purchase Price Statement and shall be
subject to adjustment as provided herein to reflect the Final Purchase Price
Statement.
ARTICLE II
PURCHASED ASSETS; PURCHASE PRICE; CLOSING
2.1 Purchased Assets.
(a) Purchased Assets. Upon the terms and subject to the conditions of this
Agreement, at the Closing, Purchaser shall purchase and acquire from Seller, and
Seller shall sell, assign, transfer and convey to Purchaser, good, valid and
marketable title (free and clear of all Encumbrances other than Permitted
Encumbrances) in and to the Purchased Assets other than the Other Contracts and
Inactive Contracts, which shall be sold, assigned, transferred and conveyed to
an Affiliate of Purchaser identified by Purchaser no later than three (3) days
prior to Closing.
(b) Excluded Assets. Seller shall not sell, assign, transfer or convey to
Purchaser, nor shall Purchaser purchase or acquire Seller's right, title or
interest in and to, any Excluded Assets.
(c) Assumed; Excluded Liabilities. Upon the terms and subject to the conditions
of this Agreement, effective as of the Closing, Purchaser shall assume and be
obligated to pay when due, perform, or discharge only the Assumed Liabilities.
Purchaser shall not assume or otherwise become liable for any Excluded
Liabilities.
(d) Retained Liabilities and Financing Contracts. Subject to the terms of
Section 6.31 hereof, if any approval or consent of a third party that may be
necessary in connection with the assignment and assumption of any Assumed
Indebtedness or Required Consent Financing Contract hereunder is not obtained on
or prior to Closing, then, solely for purposes of Section 2.1(c) hereof, all
liabilities and obligations related to such Assumed Indebtedness or Required
Consent Financing Contract (including, without limitation, all liabilities and
obligations with respect to the Leased Property, Credit Enhancements,
manufacturers' and vendors' warranties and Accounts Receivable associated with
such Required Consent Financing Contract) shall not be Assumed Liabilities (but
shall remain Assumed Liabilities for all other purposes of this Agreement
including, without limitation, calculation of the Purchase Price in accordance
with this Article II, the Purchase Price Statement, Estimated Purchase Price
Statement and Final Purchase Price Statement, representations and warranties of
Seller set forth in Article III, standards for Purchased Assets set forth in
Article IV and indemnification by Seller pursuant to Article X) and, solely for
purposes of Section 2.1(a) and Section 2.1(b) hereof, the Financing Contracts,
Leased Property, Credit Enhancements, manufacturers' and vendors' warranties and
Accounts Receivable associated with such Assumed Indebtedness and any such
Required Consent Financing Contract shall not be Purchased Assets (but shall
remain Purchased Assets for all other purposes of this Agreement including,
without limitation, calculation of the Purchase Price in accordance with this
Article II, the Purchase Price Statement, Estimated Purchase Price Statement and
Final Purchase Price Statement, representations and warranties of Seller set
forth in Article III, standards for Purchased Assets set forth in Article IV and
indemnification by Seller pursuant to Article X); provided, however, that,
notwithstanding the foregoing, the master leases or master rental agreements
(including any master agreements and product supplement agreements) associated
with such Financing Contracts (including any such Required Consent Financing
Contracts) shall remain Purchased Assets hereunder. At the Closing, Seller and
an Affiliate of Purchaser shall execute and deliver a lease services agreement
in the form attached hereto as Exhibit A (the "Lease Services Agreement") to
authorize and permit such Affiliate of Purchaser to service and manage such
Financing Contracts (including any such Required Consent Financing Contracts) on
behalf of Seller. From and after the Closing, Purchaser and Seller shall use
their reasonable best efforts to obtain the approval or consent of any third
party that may be necessary in connection with the assignment and assumption of
any such Assumed Indebtedness or Required Consent Financing Contract. To the
extent any such approval or consent is obtained following the Closing, then the
Seller shall promptly assign to Purchaser (or an Affiliate of Purchaser) without
payment of consideration all rights and obligations under the Financing
Contracts, Leased Property, Credit Enhancements, manufacturers' and vendors'
warranties and Accounts Receivable associated with such Assumed Indebtedness and
any such Required Consent Financing Contract and Purchaser (or an Affiliate of
Purchaser) shall, without the payment of any consideration therefor, assume all
rights and obligations related to such Assumed Indebtedness or Required Consent
Financing Contract (including, without limitation, all liabilities and
obligations with respect to the Leased Property, Credit Enhancements,
manufacturers' and vendors' warranties and Accounts Receivable associated with
such Required Consent Financing Contract). The parties shall execute such
instruments as may be necessary to evidence such assignment and assumption.
2.2 Purchase Price. The aggregate purchase price to be paid by Purchaser for the
Purchased Assets (the "Purchase Price") shall be paid in the following manner:
(a) Cash Portion. At Closing, Purchaser shall pay to Seller, by wire transfer of
immediately available funds to an account designated by Seller in writing, a
portion of the Purchase Price in cash (the "Cash Portion") in an amount equal to
the total Cash Portion amount set forth on the Estimated Purchase Price
Statement, which amount shall be subject to adjustment as provided herein to
reflect the Final Purchase Price Statement.
(b) Note Portion. At Closing, Purchaser shall pay to Seller, subject to Section
2.3 below, a portion of the Purchase Price (the "Note Portion") by executing and
delivering non-interest bearing promissory notes (the "Promissory Notes"), in
the form attached hereto as Exhibit B, with a tranche A portion and a tranche B
portion in an amount equal to the total Note Portion amount set forth on the
Estimated Purchase Price Statement, which amount shall be subject to adjustment
to reflect the Final Purchase Price Statement. The Note Portion of the Purchase
Price shall be divided into three tranches as follows: tranche A, consisting of
the sum of those Note Portion amounts set forth on the Estimated Purchase Price
Statement, and as adjusted as provided herein as set forth on the Final Purchase
Price Statement, with a "Tranche A" designation; tranche B, consisting of the
sum of that Note Portion amount set forth on the Estimated Purchase Price
Statement, and as adjusted as provided herein as set forth on the Final Purchase
Price Statement, with a "Tranche B" designation; and tranche C, consisting of
the amount of the Deferred Portion. Solely tranche A and tranche C of the Note
Portion (and not tranche B) shall be subject to reduction by way of offset
pursuant to Section 10.3 of this Agreement; provided, however, that in no event
shall tranche C of the Note Portion of the Purchase Price be subject to offset
pursuant to Section 10.3 hereof at any time prior to the complete satisfaction
and discharge (whether as a result of repayment pursuant to Section 2.3 or
reduction by offset pursuant to Section 10.3 or any combination thereof) of
tranche A of the Note Portion of the Purchase Price. Tranche B of the Note
Portion shall be absolute and unconditional and not subject to offset.
(c) Deferred Portion. Subject to the payment priorities set forth in Section 2.3
hereof, Purchaser shall also pay Seller, as tranche C of the Note Portion of the
Purchase Price for the Purchased Assets hereunder, the amounts calculated and
payable pursuant to Sections 2.3(f) and 2.3(g) (collectively, the "Deferred
Portion").
(d) Purchase Price Statement. Following the execution of this Agreement, each of
Purchaser and Seller shall cooperate in good faith to update from time to time
the Purchase Price Statement referenced in Section 4.4(a). Not later than five
(5) days prior to the Closing Date, Seller and Purchaser shall prepare and agree
upon the Estimated Purchase Price Statement, which shall be used to determine
the relative portions of the Purchase Price payable at the Closing pursuant to
this Section 2.2. Not later than 25 days following the Closing Date, Seller and
Purchaser shall prepare and agree upon the Special Adjustments necessary to
adjust the Estimated Purchase Price Statement to the Final Purchase Price
Statement. Any adjustments to either part of the Purchase Price resulting from
the application of the Special Adjustments to the Estimated Purchase Price
Statement shall be made, as applicable, to the Cash Portion and/or the Note
Portion of the Purchase Price. If the Final Purchase Price Statement would
result in an increase to the Cash Portion or the Note Portion of the Purchase
Price, the Cash Portion and/or the applicable Note Portion of the Purchase Price
shall be increased, as applicable, and paid by Purchaser to Seller by wire
transfer of immediately available funds or added to the applicable Note Portion
to adjust for the difference in amount between the Cash Portion or the Note
Portion of the Purchase Price reflected on the Final Purchase Price Statement
and the Estimated Purchase Price Statement. If the Final Purchase Price
Statement would result in a decrease to the Cash Portion or the Note Portion of
the Purchase Price, the Cash Portion and/or the applicable Note Portion of the
Purchase Price shall be decreased, as applicable, and refunded by Seller to
Purchaser by wire transfer of immediately available funds or subtracted from the
applicable Note Portion to adjust for the difference in amount between the Cash
Portion or the Note Portion of the Purchase Price reflected on the Final
Purchase Price Statement and the Estimated Purchase Price Statement.
(e) Subordination. Seller acknowledges and agrees that the Cash Portion of the
Purchase Price shall be financed by the ▇▇▇▇▇ Fargo Purchase and secured by the
Purchased Assets (other than Inactive Contracts, the Other Contracts and the
Financing Contracts associated with Assumed Indebtedness). Further, Seller
acknowledges and agrees that the Promissory Notes to be delivered to it will be
secured by the Purchased Assets (other than Inactive Contracts, the Other
Contracts and the Financing Contracts associated with Assumed Indebtedness)
pursuant to a security agreement, in substantially form attached hereto as
Exhibit C, but shall be subordinated to the ▇▇▇▇▇ Fargo Purchase pursuant to a
subordination agreement (the "Subordination Agreement"), in substantially the
form attached hereto as Exhibit D. The sale and transfer of the Purchased Assets
(other than Inactive Contracts, the Other Contracts and the Financing Contracts
associated with Assumed Indebtedness) to Purchaser shall be subject to a
subordinated lien and security interest in favor of Seller to secure Purchaser's
obligations under this Agreement and the Promissory Notes.
(f) New Leases. Except as provided in Section 6.12 and Section 6.15 hereof, any
financing contract entered into by an Affiliate of Purchaser after the Closing
Date pursuant to a master lease or master rental agreement (including any master
agreement and product supplement agreement) acquired from Seller as part of the
Purchased Assets and all equipment or property associated with such financing
contracts shall be excluded for purposes of calculating any part of the Purchase
Price payable to Seller hereunder.
2.3 Payment Priorities; Contingent Payments. The parties expressly agree that,
from and after the Closing Date, all cash received in a particular month in
connection with the management and operation of the Purchased Assets (other than
with respect to the Inactive Contracts and the Other Contracts except for that
certain remarketing agreement with Bank One set forth on Schedule 2.3 hereto)
("Monthly Cash"), which shall be set forth on a Monthly Statement prepared by
Purchaser in accordance with Section 6.20 hereof, shall be applied and paid in
the following order of priority in the month following receipt no later than the
tenth (10th) Business Day of the month beginning with the month immediately
following the Closing and no later than the tenth (10th) Business Day of each
subsequent month; provided, that for purposes of calculating Monthly Cash for
the month of the Closing only (to be paid no later than the tenth (10th)
Business Day in the month immediately following the Closing), Monthly Cash shall
also include all cash or cash equivalents held in Lockbox Accounts constituting
Purchased Assets arising between the Effective Date and the Closing Date
inclusive:
(a) First, 100% of the Monthly Cash shall be applied to the payment of all
amounts due and payable during the relevant month in respect of the ▇▇▇▇▇ Fargo
Purchase and the Assumed Indebtedness, in accordance with the respective terms
thereof as they exist on the Closing Date; provided, however, that Assumed
Indebtedness shall be repaid solely from Monthly Cash received in respect of the
Financing Contracts subject to such Assumed Indebtedness.
(b) Second, 100% of the remaining Monthly Cash, if any, shall be applied to the
repayment of all costs, fees, and expenses, if any, paid by Seller on behalf of
Purchaser with respect to the Assumed Liabilities arising between the Effective
Date and the Closing Date inclusive, which costs, fees and expenses shall be set
forth on a reasonably detailed invoice delivered by Seller to Purchaser in
connection with the Final Purchase Price Statement.
(c) Third, 100% of the remaining Monthly Cash, if any, shall be applied to the
payment of only (i) the required sales, personal property, ad valorem and other
similar Taxes due and payable during the relevant month with respect to the
Financing Contracts and/or the Leased Property in accordance with Section 2.5
hereof and (ii) freight charges incurred by Purchaser with respect to Leased
Property that has been returned, or is in the process of being returned, to
Purchaser by an Obligor during the relevant month to the extent such freight
charges are billed to and payable by such Obligor.
(d) Fourth, 100% of the remaining Monthly Cash, if any, shall be applied to
payment of only the service fees to Purchaser's members in respect of servicing
provided by such members during the previous month at the rate of (i) $375,000
per month for the nine-month period beginning with the month immediately
following the Closing, (ii) $275,000 per month for the nine-month period
subsequent thereto, and (iii) $100,000 per month thereafter until the Payment
Termination Date; provided, however, that solely in respect of this clause
(iii), if the amount of Monthly Cash remaining from a particular month after
giving effect to the aggregate sum of the payments made or to be made pursuant
to Section 2.3(a), Section 2.3(b) and Section 2.3(c) is less than $200,000, the
service fees to be paid to Purchaser's members pursuant to this subsection (d)
for the previous month's service shall be one-half of the amount of the
remaining Monthly Cash.
(e) Then, 95.0% of the remaining Monthly Cash, if any, shall be applied only to
the payment of tranche A of the Note Portion of the Purchase Price and the
remaining 5.0% of the Monthly Cash, if any, shall be applied to pay a
distribution to Purchaser's members as income in excess of operating costs;
provided, that during the month in which tranche A of the Note Portion of the
Purchase Price is paid in full from the application of 95.0% of the remaining
Monthly Cash, the Monthly Cash in excess of the amount necessary to so repay
tranche A of the Note Portion of the Purchase Price shall be applied in the
manner provided in Section 2.3(f) below.
(f) Beginning on the date after tranche A of the Note Portion of the Purchase
Price is paid in full and for a period of 180 days thereafter, 50.0% of the
remaining Monthly Cash, if any, for the relevant month shall be paid to Seller
and 50.0% of the remaining Monthly Cash, if any, for the relevant month shall be
distributed to Purchaser's members as income in excess of operating costs.
(g) Beginning on the date immediately following the date in which the payment
obligation referenced in Section 2.3(f) shall expire and for a period of 270
days thereafter, 20.0% of the remaining Monthly Cash, if any, for the relevant
period shall be paid to Seller and 80.0% of the remaining Monthly Cash, if any,
shall be distributed to Purchaser's members as income in excess of operating
costs. Notwithstanding the foregoing, Purchaser shall have the option, at any
time during the 270 day period described in this Section 2.3(g), to fully
satisfy and discharge all of Purchaser's remaining payment obligations pursuant
to this Section 2.3(g) by paying Seller a one-time payment equal in amount to
20.0% of the fair market value of the Lease Portfolio (in the amount mutually
agreed by the parties hereto) as of the date of any such payment after taking
into consideration the expected future payments that would otherwise be required
pursuant to Section 2.3(a), Section 2.3(b), Section 2.3(c) and Section 2.3(d).
Immediately upon the making of any such payment by Purchaser to Seller pursuant
to the immediately preceding sentence, the Payment Termination Date shall be
deemed to have occurred.
(h) From and after the Payment Termination Date, 100% of the balance of the
Monthly Cash, if any, for the relevant month shall be distributed to Purchaser's
members as income in excess of operating costs.
(i) Notwithstanding anything to the contrary contained in this Section 2.3, an
amount equal to the Holdback shall be promptly paid by Purchaser to Seller, by
wire transfer of immediately available funds, on the earlier to occur of (i) the
release of the Holdback by ▇▇▇▇▇ Fargo or (ii) the full and final payment of the
▇▇▇▇▇ Fargo Purchase. Such payment by Purchaser shall fully satisfy and
discharge the indebtedness represented by tranche B (and not tranche A or
tranche C) of the Note Portion.
2.4 The Closing. Unless this Agreement has been terminated and the transactions
herein abandoned pursuant to Article VIII, the Closing shall (subject to
Sections 7.1 and 7.2 of this Agreement) be held at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as the parties may mutually agree upon,
at 10:00 a.m., Chicago, Illinois time, on the later to occur of (i) September 2,
2003, or (ii) as soon as reasonably practical following the day on which all of
the conditions to Closing set forth in Sections 7.1 and 7.2 of this Agreement
have been satisfied or waived (other than the conditions that by their nature
cannot be satisfied until the Closing, but subject to all such conditions having
been satisfied or waived at the time of the Closing), or such other time and
date as the parties may mutually agree.
2.5 Payment of Taxes.
(a) Lien Date Taxes. Seller shall be responsible for all personal property, ad
valorem and other similar Taxes with respect to the Purchased Assets if the lien
or assessment date (the date on which the Tax becomes fixed or assignable to the
Purchased Assets) arises prior to the Effective Date, irrespective of the
reporting and payment dates of such Taxes. Purchaser shall be responsible for
all personal property, ad valorem and other similar Taxes with respect to the
Purchased Assets if the lien or assessment date arises on or after the Effective
Date.
(b) Other Taxes. Except as provided in Section 6.8(b), Seller shall be
responsible for all sales, use and other similar Taxes (other than Taxes
described in Section 2.5(a) hereof) as levied by any federal, state or local
taxing authority in any jurisdiction with respect to the ownership, use or
leasing of the Purchased Assets for all periods (or portions thereof) ending
prior to the Effective Date, and Purchaser shall be responsible for all sales,
use and other similar Taxes (other than Taxes described in Section 2.5(a)
hereof) with respect to the ownership, use or leasing of the Purchased Assets
for all periods (or portions thereof) beginning on or after the Effective Date.
(c) A party's obligation to pay Taxes under this Section 2.5 shall arise only to
the extent that an Obligor under a particular Financing Contract has not paid
the amount of such Taxes and the amount of such Taxes has not otherwise been
collected from such Obligor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as disclosed in the disclosure schedules delivered by Seller to
Purchaser in connection with the execution of this Agreement (the "Seller
Disclosure Schedules"), Seller hereby makes as of the date hereof, and shall be
deemed to be make again at the Closing, the following representations and
warranties to Purchaser:
3.1 Organization and Good Standing. Seller is duly organized, validly existing
and in good standing under the laws of Delaware and has the corporate power to
own and lease the Purchased Assets owned or leased by it and to carry on its
business in the manner currently conducted. Seller is duly qualified or
authorized to conduct business in the manner currently conducted and is in good
standing as a foreign corporation in all jurisdictions in which the character or
location of the Purchased Assets requires such qualification or authorization,
except where the failure to be so qualified or authorized would not have a
Material Adverse Effect.
3.2 Corporate Authority. Seller has the requisite corporate power and authority
to execute and deliver, and to perform its obligations under, this Agreement and
the other documents, instruments and agreements to be executed and delivered by
Seller pursuant hereto and thereto. Each of this Agreement and the other
documents, instruments and agreements to be executed and delivered by Seller
pursuant hereto or thereto has been or will be, as the case may be, duly
authorized by all necessary corporate, stockholder or other required action on
the part of Seller and has been (or, with respect to the documents, instruments
and agreements to be executed and delivered after the date hereof, will be at
the Closing) duly executed and delivered by Seller and (assuming this Agreement
constitutes a valid and binding obligation of Purchaser and each of the other
documents, instruments and agreements to be executed and delivered by parties
pursuant hereto other than Seller constitute a valid and binding obligation of
such other parties) is (or, with respect to the documents, instruments and
agreements to be executed and delivered after the date hereof, will be at the
Closing) the valid and binding obligation of Seller, enforceable against Seller
in accordance with its terms.
3.3 No Conflicts. Neither the execution and delivery by Seller of this Agreement
or any other document, instrument or agreement to be executed and delivered by
Seller in connection herewith or therewith nor compliance by Seller with the
terms and provisions hereof or thereof nor the consummation by Seller of the
transactions contemplated hereby or thereby will conflict with or result in a
breach of any of the terms, conditions or provisions of (i) the certificate of
incorporation or by-laws of Seller, (ii) any judgment, order, injunction, decree
or ruling of any court or of any other Governmental Entity or any law, statute
or regulation to which Seller or any of its Properties is subject and which is
related to the Purchased Assets or the Assumed Liabilities or (iii) any
agreement, contract or commitment to which Seller is a party or to which Seller
or any of its Properties is subject and which is related to the Purchased Assets
or the Assumed Liabilities, except in the case of clauses (ii) and (iii) above,
for such conflicts or breaches that would not be likely to have a Material
Adverse Effect; nor will such execution, delivery and compliance result in any
acceleration in the time for performance of any obligation of Seller relating to
or affecting any of the Purchased Assets or Assumed Liabilities or in the
creation of any Encumbrance on any of the Purchased Assets, except in each case
as would not be likely to have a Material Adverse Effect.
3.4 Consents. Other than the filing of notifications pursuant to the HSR Act, no
notices, reports or other filings are required to be made by Seller with, nor
are any consents, licenses, permits, Authorizations or approvals required to be
obtained by Seller from, (i) any Governmental Entity or (ii) except where the
failure to make such notices, reports or other filings or obtain such consents,
licenses, permits, Authorizations or approvals would not have a Material Adverse
Effect, any other Person in connection with the execution and delivery by Seller
of this Agreement or any of the documents, instruments or agreements to be
executed and delivered by Seller pursuant hereto or thereto or the consummation
by Seller of the transactions contemplated hereby or thereby.
3.5 No Violations of Law. Except as would not be likely to have a Material
Adverse Effect, (i) Seller has at all times owned each of the Purchased Assets
and acted with respect to the Assumed Liabilities in compliance with all
applicable laws enacted, and all regulations promulgated or issued, by any
Governmental Entity, including, but not limited to, Environmental Laws and laws
pertaining to usury, installment or conditional sales and sales financing, truth
in lending, equal credit opportunity, credit reporting or debt collection, (ii)
neither the billing and collection nor enforcement of any Financing Contract or
Credit Enhancement in accordance with the terms thereof has resulted in the
violation of any laws enacted by or regulations promulgated or issued by any
Governmental Entity, (iii) Seller has had at all times all Authorizations
required to own, operate, lease and/or service the Purchased Assets and has
owned and operated its Properties at all times in compliance with all such
Authorizations, and (iv) Seller has not received any notice of violation of any
law or regulation from any Governmental Entity relating to any of the Purchased
Assets or the ownership or operation thereof.
3.6 Taxes.
(a) Seller (i) has timely filed with the appropriate Governmental Entities all
material Tax Returns required to be filed with respect to any Purchased Asset,
and all such Tax Returns are true and correct in all material respects, and (ii)
has paid all material Taxes due and payable with respect to any Purchased Asset
and has paid all material Taxes claimed or asserted in writing by any
Governmental Entity to be due from it with respect to any Purchased Asset or has
provided for all such Taxes on its Books and Records and in accordance with
GAAP. With respect to any period for which any material Tax Returns have not yet
been filed with respect to any Purchased Asset, or for which material Taxes with
respect to any Purchased Asset are not yet due or owing or are being contested
in good faith, Seller has made due and sufficient current accruals for such
Taxes on its Books and Records and in accordance with GAAP.
(b) No written claim has been made by a taxing authority in a jurisdiction where
Seller does not file Tax Returns to the effect that Seller is or may be subject
to taxation by that jurisdiction with respect to any Purchased Asset.
(c) Seller has withheld and paid over to the appropriate Governmental Entity all
material amounts of Taxes required to be withheld with respect to any Purchased
Asset in connection with any amounts paid or owing to any employee, creditor,
independent contractor or other third party.
(d) There are no liens for Taxes upon the Purchased Assets except for liens
arising as a matter of law relating to current Taxes not yet due and liens for
Taxes that are being contested in good faith and for which adequate reserves
have been set aside.
(e) None of the contracts, agreements or other arrangements included in the
Purchased Assets contains any tax sharing or similar agreement (whether or not
written) which provides an obligation to make payments after the Closing.
(f) None of the Purchased Assets is a "United States real property interest"
within the meaning of Section 897(c)(i) of the Code.
(g) (i) The classification of each Financing Contract which constitutes a
Purchased Asset reflected on the Books and Records of Seller is consistent with
the manner in which such Financing Contract has been classified on Seller's Tax
Returns (as a loan or as a lease for Tax purposes), (ii) such classification (as
a loan or as a lease for Tax purposes) has not been challenged by the IRS or any
other Governmental Entity in a notice of proposed adjustments or notice of
deficiency and (iii) Seller has not reported its status under any Financing
Contract which constitutes a Purchased Asset as that of a partner or member of
any other association for Tax purposes.
(h) All of the Financing Contracts which are Purchased Assets which are treated
as true leases for federal income Tax purposes without regard to Section 7701(h)
of the Code on the Books and Records of Seller are true leases for federal
income tax purposes without regard to Section 7701(h) of the Code.
(i) Seller has paid or caused to be paid, or will pay or cause to be paid, any
and all license fees, stamp taxes, excise, sales, use, transfer or property
taxes or similar fees or taxes due and payable with respect to all Financing
Contracts which are Purchased Assets and the Leased Property subject thereto to
the state or other jurisdiction or political subdivision where required, arising
out of, pursuant to or in connection with the Financing Contracts which are
Purchased Assets.
3.7 Litigation and Liabilities. There are no Proceedings pending or, to Seller's
Knowledge, threatened, against Seller relating to or affecting any of the
Purchased Assets or Assumed Liabilities except as would not be likely to have,
individually or in the aggregate, a Material Adverse Effect. Since January 1,
2003, Seller has not been the subject of any Proceeding nor, to Seller's
Knowledge, have there been any investigations by or before any Governmental
Entity, in either case relating to any of the Purchased Assets or Assumed
Liabilities or liabilities that will be transferred by operation of law to
Purchaser as a result of the transactions contemplated by this Agreement.
3.8 Conduct of Business. Since June 27, 2003, Seller has owned the Purchased
Assets and acted with respect to the Assumed Liabilities only in the ordinary
course consistent with past practices.
3.9 Transactions With State and Local Governments. With respect to each
Financing Contract for which the Obligor is a State and Local Governmental
Entity, (i) Seller has complied with all material bidding requirements
applicable to such transaction and with all material requirements of any
applicable request for proposal, including, without limitation, those applicable
to the Leased Property and any applicable federal and state statutes and
regulations governing equal employment opportunity, affirmative action and
environmental protection; (ii) to Seller's Knowledge, Seller is the Person, or
assignee of the Person, named in and subject to the request for proposal and
will continue to perform or cause to be performed any material obligations
arising from such Financing Contract; and (iii) Seller has given or timely will
give notice to each applicable State and Local Governmental Entity of the
assignment of the rights of Seller in the Purchased Assets to Purchaser and has
obtained the consent of such State and Local Governmental Entity if required by
the terms of the Financing Contract, except in each as would not be reasonably
likely to have a Material Adverse Effect.
3.10 Brokers' or Finders' Fees, etc. No Person acting on behalf of Seller or any
of its Affiliates or under the authority of any of them is or will be entitled
to any brokers' or finders' fee or any other commission or similar fee, directly
or indirectly, from Purchaser or any of its Affiliates in connection with any of
the transactions contemplated hereby.
ARTICLE IV
STANDARDS FOR PURCHASED ASSETS
Except as disclosed in the Seller Disclosure Schedules, Seller agrees
that the Purchased Assets shall be subject to the following standards as of the
Closing Date:
4.1 Financing Contracts.
(a) Each Financing Contract and Credit Enhancement (i) is valid, binding and
enforceable by Seller against the Obligor or provider of such Credit Enhancement
thereunder in accordance with its terms, except as may be limited by the
Bankruptcy Exception, and (ii) constitutes and arose out of a bona fide business
transaction entered into in the ordinary course of business of Seller.
(b) (i) Each Financing Contract and Credit Enhancement is in full force and
effect, free and clear of Encumbrances other than Permitted Encumbrances, and
not subject to any defense, offset, claim, right of rescission or counterclaim
by the Obligor or provider thereof, or any Person claiming under any such right,
(ii) Seller is not in breach of or default under any Financing Contract or
Credit Enhancement, no other party is in breach or default thereunder and, to
Seller's Knowledge, no other event has occurred which, with notice and/or lapse
of time, would constitute a default by Seller or any other party thereunder,
(iii) no Obligor under any Financing Contract is required under any applicable
law to withhold from payments on any such Financing Contract any interest or
other withholdings for the payment of Taxes to any Governmental Entity, (iv)
Seller has in its possession a fully executed original (or, if not in Seller's
possession, copies certified as true and correct by an officer of the Seller as
available) of any lease or note (and an executed original or a true and correct
copy of all other documents) comprising each Financing Contract and Credit
Enhancement and all other documents required by Seller's credit or investment
approval with respect to each Financing Contract, (v) no Financing Contract is
terminable at the option of the Obligor thereunder except to the extent that
such Obligor is required to pay to Seller a termination fee, (vi) Seller has in
its possession Documents reasonably sufficient to establish the Original
Equipment Cost of all Leased Property, and (vii) except with respect to Lease
Exceptions, no Obligor with respect to any Financing Contract has notified
Seller of such Obligor's intent not to make scheduled lease rental payments as
and when such scheduled lease rental payments become due and payable.
(c) As of the date of this Agreement, Schedule 4.1(c) sets forth a list of each
Credit Enhancement constituting a Purchased Asset that is a letter of credit,
guarantee, certificate of deposit or stock certificate, along with, to the
extent applicable to such Credit Enhancement, (i) the issuer thereof, (ii) the
maximum amount drawable thereunder, principal amount thereof or number of shares
represented thereby, (iii) the expiration or maturity date thereof, if
applicable, and (iv) the physical location thereof.
(d) Schedule 4.1(d) sets forth all of the Required Consent Financing Contracts.
(e) No Financing Contract is subject to any debt subordination agreement,
participation agreement, intercreditor agreement, owner trust agreement,
purchase agreement, collateral sharing agreement, residual sharing agreement,
remarketing agreement or vendor recourse agreement.
4.2 Leased Property.
(a) (i) Seller has either (A) good and valid title to each item of Leased
Property, free and clear of all Encumbrances other than Permitted Encumbrances,
or (B) a valid first priority security interest on each item of Leased Property
that is governed by or subject to a Financing Contract which has been duly
perfected and (ii) except as listed in the Portfolio Information and on Schedule
4.2(a)(ii), no Person has an option to purchase any item of such Leased Property
at the end of the lease term for a fixed amount less than the Residual value
thereof.
(b) (i) All Leased Property complies in all respects with all laws, statutes,
ordinances, rules and regulations applicable to such Leased Property and (ii)
except with respect to the Financing Contracts set forth on Schedule 4.2(b)(ii),
each Financing Contract requires the Obligor thereunder to provide insurance (or
self insure) against loss or damage with respect to the Leased Property subject
to or governed by such Financing Contract.
4.3 Other Contracts. To Seller's Knowledge, (i) Seller is not in material breach
of or in material default under any Other Contract and no event has occurred
which, with notice and/or lapse of time, would constitute a material default by
Seller under any such Other Contract and (ii) Seller has not received any
written notice from or given any written notice to any other party thereto
indicating that it or such other party, as the case may be, is presently in
default under or in breach or violation of any Other Contract.
4.4 Purchase Price Statement; Reports.
(a) Included in Schedule 4.4(a) is a statement that sets forth an estimated
Purchase Price calculation as of June 30, 2003 (the "Purchase Price Statement"),
which Purchase Price Statement has been derived from Seller's financial records
and prepared as of such date in accordance with the pricing methodology,
accounting principles, procedures, policies and methods set forth and described
in the notes to such Purchase Price Statement (the "Statement Methodology"). The
Purchase Price Statement has been prepared as of the date of such statement (or,
in the case of the Final Purchase Price Statement, will be prepared as of the
Effective Date) on a basis consistent with the financial information provided to
Purchaser during its due diligence investigation of Seller and its Business. The
Purchase Price Statement is (or, in the case of the Final Purchase Price
Statement, will be) consistent with the financial records of Seller as of the
date of such statement and is (or, in the case of the Final Purchase Price
Statement, will be) prepared in accordance with the Statement Methodology.
(b) The amounts set forth on the Purchase Price Statement with respect to
Inventory, Current Receivables and Advance Payments are (or, in the case of the
Final Purchase Price Statement, will be) complete and accurate in all material
respects.
(c) The Portfolio Information as of the Effective Date, as such Portfolio
Information is set forth on a data tape to be delivered by Seller to Purchaser
in connection with the Final Purchase Price Statement, will be complete and
accurate in all material respects.
(d) To Seller's Knowledge, the Purchase Price Statement (including the notes,
schedules and exhibits thereto) delivered by Seller to Purchaser in connection
with the execution of this Agreement sets forth all of the lease agreements or
rental agreements with respect to equipment or property owned and/or provided by
Seller (to the extent not Excluded Assets) that relate to Seller's Business as
of June 30, 2003.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as disclosed in the disclosure schedules delivered by Purchaser
to Seller in connection with the execution of this Agreement, Purchaser makes,
as of the date hereof and shall be deemed to make again at Closing, the
following representations and warranties to Seller:
5.1 Organization and Good Standing. Purchaser is a duly organized limited
liability company, validly existing and in good standing under the laws of the
State of Florida, and Purchaser has, and will have at Closing, the corporate or
other applicable power to own and lease its Property and the Purchased Assets
and to carry on its business as now being conducted and as will be conducted
from and after Closing. Purchaser is, and will be at Closing, duly qualified to
do business as a foreign limited liability corporation and is, and will be at
Closing, in good standing in each jurisdiction where the character of the
Property owned or leased by it (including, at Closing, the Purchased Assets) or
the nature of its activities makes such qualification necessary.
5.2 Corporate Authority. Purchaser has, and will have at Closing, the requisite
corporate or other applicable power and authority to execute and deliver, and to
perform its obligations under, this Agreement and the other documents,
instruments and agreements to be executed and delivered by Purchaser pursuant
hereto and thereto. Each of this Agreement and the other documents, instruments
and agreements to be executed and delivered by Purchaser pursuant hereto or
thereto has been, or will be, as the case may be, duly authorized by all
necessary corporate, stockholder, member, partner or other required action on
the part of Purchaser and has been (or, with respect to the documents to be
executed and delivered after the date hereof, will be at the Closing) duly
executed and delivered by Purchaser and (assuming this Agreement constitutes a
valid and binding obligation of Seller and each of the other documents,
instruments and agreements to be executed and delivered by parties pursuant
hereto other than Purchaser constitute a valid and binding obligation of such
other parties) is (or, with respect to the documents to be executed and
delivered after the date hereof, will be at the Closing) the valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms.
5.3 No Conflicts. Neither the execution and delivery by Purchaser of this
Agreement or any other document, instrument or agreement to be executed and
delivered by Purchaser in connection herewith or therewith nor compliance by
Purchaser with the terms and provisions hereof or thereof nor the consummation
of the transactions contemplated hereby or thereby will conflict with or result
in a breach of any of the terms, conditions or provisions of (i) the
organizational documents of Purchaser or (ii) any judgment, order, injunction,
decree or ruling of any court or of any Governmental Entity or any law, statute
or regulation to which Purchaser is subject.
5.4 Consents. Other than the filing of notifications pursuant to the HSR Act and
any corresponding anti-trust, competition or similar legislation in any other
jurisdictions, no notices, reports or other filings are required to be made by
Purchaser with, nor are any consents, licenses, permits, Authorizations or
approvals required to be obtained by Purchaser from, any Governmental Entity or
any other Person in connection with the execution and delivery by Purchaser of
this Agreement or any other documents, instruments or agreements to be executed
and delivered by Purchaser pursuant hereto or thereto or the consummation by
Purchaser of the transactions contemplated hereby or thereby.
5.5 Brokers' or Finders' Fees, etc. No Person acting on behalf of Purchaser or
any of its Affiliates or under the authority of them is or will be entitled to
any brokers' or finders' fee or any other commission or similar fee, directly or
indirectly, from Seller or any of its Affiliates in connection with any of the
transactions contemplated hereby.
5.6 Financing. Purchaser has received a commitment letter addressed to Purchaser
regarding secured financing in an amount sufficient to finance the Cash Portion
of the Purchase Price to be available to Purchaser at Closing (the "Commitment
Letter"). A true and complete copy of the Commitment Letter has been delivered
to Seller as of the date hereof under separate cover. The Commitment Letter is
not subject to any conditions other than as set forth therein, has been duly
executed by Purchaser and by all other parties thereto, is in full force and
effect on the date hereof and, to Purchaser's knowledge, there is no reason that
the Commitment Letter cannot continue in effect in accordance with its terms.
All commitment and other fees required to be paid under the Commitment Letter
prior to the date hereof have been paid and, as of the date hereof, to the
knowledge of Purchaser, there is no fact or occurrence existing that would make
any of the stated assumptions or any of the other statements set forth in the
Commitment Letter materially inaccurate. Assuming no breach or default by Seller
under this Agreement and to the knowledge of Purchaser, the conditions to the
funding of the secured financing contemplated by the Commitment Letter will be
satisfied on or prior to Closing and there is no fact or event known to the
Purchaser as of the date of this Agreement that would cause such conditions to
funding not to be satisfied.
ARTICLE VI
CONDUCT AND TRANSACTIONS PRIOR TO
CLOSING; COVENANTS
6.1 No Solicitation. From the date hereof until the earlier of (i) the Closing
Date or (ii) termination of this Agreement under Article VIII, Seller shall not,
directly or indirectly, enter into, solicit, initiate, conduct or continue any
discussions or negotiations with, or encourage or respond to any inquiries or
proposals by, or provide any information to, or otherwise cooperate in any other
way with, any Person or group, other than Purchaser and Purchaser's
representatives, concerning any sale of all or substantially all of the Lease
Portfolio or similar transaction involving Seller (each such transaction being
referred to herein as a "Proposed Acquisition Transaction"). Seller hereby
represents that it presently is not engaged in discussions or negotiations with
any party other than Purchaser with respect to any Proposed Acquisition
Transaction which is not being terminated immediately upon execution of this
Agreement. Seller shall not release any third party from, or waive any provision
of, any confidentiality or standstill agreement to which Seller is a party to
the extent such agreement is related to the Lease Portfolio.
6.2 Access.
(a) Following the execution of this Agreement until Closing, Seller shall give
or cause to be given to Purchaser and its representatives and agents reasonable
access during normal business hours and upon reasonable prior notice to Seller's
premises, personnel and books and records, in each case to the extent available
and pertaining to any Financing Contract, Financing Document, Leased Property,
Assumed Liability, or any other Purchased Asset which books and records shall be
made available by Seller at the location(s) designated by Seller. Seller shall
use its reasonable best efforts to assemble, and make available for Purchaser's
review, at Seller's offices in Rosemont, Illinois, a lease file for each
Financing Contract (each, a "Lease File"), which shall contain, to the extent
available, relevant Financing Documents, the credit file, the correspondence
file and the document file, each organized (whether manually or electronically)
so that all such documents relating to a specific Financing Contract are located
in a single Lease File.
(b) Unless and until the Closing has been consummated, Purchaser shall hold, and
shall cause its counsel, accountants and other representatives to hold, in
confidence all data and information relating to Seller made available to
Purchaser, together with all analyses, compilations, studies and other documents
and records prepared by Purchaser or any of its representatives which contain or
otherwise reflect or are generated from such information. If the transactions
contemplated by this Agreement are not consummated, Purchaser agrees to hold in
confidence all data and information relating to the Seller or the Lease
Portfolio, and upon written request of Seller, to return or cause to be returned
to Seller all written materials and all copies that contain any such
confidential data or to certify to Seller that such materials have been
destroyed.
(c) As used herein, "data and information" does not include such data and
information already known to Purchaser prior to its disclosure by or on behalf
of Seller or such data and information that becomes publicly available through
no fault of Purchaser receiving such data and/or information. Notwithstanding
the foregoing, (i) Purchaser may disclose this Agreement and the information and
data in its possession in connection therewith to its representatives or any
other party with a legitimate need to know and (ii) the Purchaser (and each
employee, representative, or other agent of the Purchaser) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are or have been
provided to the Purchaser (or any employee, representative, or other agent of
the Purchaser) relating to such tax treatment and tax structure beginning on the
earliest of (x) the date of the public announcement of discussions relating to
the transactions contemplated by this Agreement, (y) the date of public
announcement of the transactions contemplated by this Agreement or (z) the date
of the execution of this Agreement (with or without conditions); provided,
however, that neither Purchaser nor any employee, representative or other agent
of Purchaser may disclose any other information that is not relevant to
understanding the tax treatment and tax structure of the transactions
contemplated by this Agreement (including, without limitation, any data and
information and the identity of any party and any information that could lead
another to determine the identity of any party, each to the extent not relevant
to the tax treatment or tax structure of the transactions contemplated by this
Agreement), or any other information to the extent that such disclosure could
result in a violation of any federal or state securities law.
6.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Filings. If not made prior to the date of this Agreement,
as soon as practicable following the date of this Agreement, each of Purchaser
and Seller shall make or cause to be made all filings required to be made by it
or on its behalf under the HSR Act, if required, and shall use its commercially
reasonable efforts to cause an early termination under the waiting period under
the HSR Act (and to obtain the requisite approvals or consents of Governmental
Entities and to cause any applicable waiting periods to expire) as soon as
practicable. However, Purchaser shall not have any obligation to dispose of,
hold separate or otherwise restrict its enjoyment of any of its assets or
properties (including, without limitation, after the Closing, the Purchased
Assets). Purchaser shall bear all of the filing fees in compliance with the HSR
Act; provided, however, that Seller shall promptly reimburse Purchaser for all
such filing fees in an amount not to exceed $45,000 in the aggregate.
6.4 No Changes. Except as otherwise expressly provided in Sections 6.5 or 6.6 or
elsewhere in this Agreement, between the date of this Agreement and Closing,
Seller shall use commercially reasonable efforts under the circumstances and
otherwise in accordance with Seller's (and Comdisco Holding Company, Inc.'s)
limited business purpose to preserve substantially intact the Purchased Assets
and shall use its commercially reasonable efforts under the circumstances and
otherwise in accordance with Seller's (and Comdisco Holding Company, Inc.'s)
limited business purpose to preserve its present business relationships,
including, but not limited to, those with the Obligors under Financing
Contracts, where the discontinuance of such relationships would have a Material
Adverse Effect.
6.5 Conduct of Business. Except as otherwise expressly permitted by this
Agreement or consented to in writing by Purchaser, Seller shall, between the
date of this Agreement and Closing:
(a) own and service the Purchased Assets and act with respect to the Assumed
Liabilities, in the ordinary and usual course consistent with past practices;
provided, that, Seller may prepay any of its indebtedness if such prepayment
does not otherwise violate any provision of this Agreement;
(b) maintain its accounts and Books and Records relating to the Purchased Assets
in the ordinary course of business consistent with past practices; and
(c) use commercially reasonable efforts to keep available the services of the
present employees necessary to maintain (without deterioration in any material
respect) its business as such business relates to the Purchased Assets.
6.6 Negative Covenants. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and Closing, Seller, without the
written consent of Purchaser (such consent not to be unreasonably withheld or
delayed), shall not, with respect to any of the Purchased Assets:
(a) waive or commit to waive any right that could have, individually or in the
aggregate, a Material Adverse Effect;
(b) make any advance, novation, modification or other accommodation to any
Obligor or provider of a Credit Enhancement other than in the ordinary course of
business consistent with past practices;
(c) mortgage, pledge or otherwise encumber any assets;
(d) sell, lease (other than leases or conditional sales of Leased Property
pursuant to the Financing Contracts), transfer or otherwise dispose of any
assets included in the Purchased Assets, except for sales, leases, transfers and
other dispositions of assets in the ordinary course of business consistent with
past practices;
(e) make any change in financial accounting methods, principles or practices
applicable to the Purchased Assets or Assumed Liabilities which is otherwise
inconsistent with GAAP;
(f) take any action that would breach Seller's representations, warranties or
covenants contained in this Agreement if such representation, warranty or
covenant were made at the time of the action; or
(g) enter into an agreement, contract or commitment (other than this Agreement)
to do any of the things prohibited by the foregoing.
6.7 Pending or Threatened Litigation. Between the date of this Agreement and the
Closing, Seller and Purchaser shall inform each other, promptly upon obtaining
knowledge thereof, of any pending or threatened litigation which reasonably
could be anticipated to (i) render inaccurate in any material respect any
representation or warranty made by Seller or Purchaser (as the case may be) or
(ii) prohibit or restrain or materially and adversely affect the consummation of
the transactions contemplated hereby or the performance by Seller or Purchaser
of their respective obligations hereunder.
6.8 Tax Matters/Allocation of Purchase Price.
(a) Cooperation with Respect to Tax Returns. Purchaser and Seller agree to
furnish or cause to be furnished to each other, each at their own expense, as
promptly as practicable, such information (including access to Books and
Records) and assistance, including making employees available on a mutually
convenient basis to provide additional information and explanations of any
material provided relating to the Purchased Assets as is reasonably necessary
for the filing of any Tax Return, for the preparation for any audit, and for the
prosecution or defense of any claim, suit or proceeding relating to any
adjustment or proposed adjustment with respect to Taxes or any appraisal of the
Purchased Assets. Seller shall retain in its possession all Tax Returns and Tax
records relating to the Purchased Assets that might be relevant to any taxable
period ending on or prior to the Closing Date until the relevant statute of
limitations has expired. After such time, Seller may dispose of such materials,
provided that prior to such disposition Seller shall give Purchaser a reasonable
opportunity to take possession of such materials. Purchaser shall retain in its
possession, and shall provide Seller reasonable access to (including the right
to make copies of), such supporting Books and Records and any other materials
that Seller may specify with respect to Tax matters relating to any taxable
period ending on or prior to the Closing Date until 60 days after the relevant
statute of limitations has expired.
(b) Transfer Taxes. Purchaser shall be liable for and shall pay (and Purchaser
shall indemnify and hold Seller harmless from and against) any sales, use,
transfer, stamp duty, registration duty, recording or similar taxes
(collectively "Transfer Taxes") due as a result of the transactions provided
herein and agrees to file all necessary documents (including, but not limited
to, all Tax Returns) with respect to all such Transfer Taxes in a timely manner.
Seller shall cooperate with Purchaser and otherwise shall use its commercially
reasonable efforts to obtain (at Purchaser's expense) any available refunds of,
or credits for, any Transfer Taxes, and to the extent Seller actually receives
any such refunds or credits, net of any Taxes payable with respect thereto,
Seller shall remit to Purchaser the amount of such refund (to the extent
Purchaser previously paid such Transfer Taxes), promptly following receipt
thereof (provided Purchaser has otherwise complied with its obligations pursuant
to the first sentence of this Section 6.8(b)). Purchaser and Seller shall
cooperate in providing each other any applicable resale exemption certificate.
(c) Allocation of Purchase Price. Purchaser shall provide to Seller (i) within
90 days after the completion of the Final Purchase Price Statement, a copy of a
statement allocating the Purchase Price (and any other items required to be
treated as additional Purchase Price at such time) and the Assumed Liabilities
among the Purchased Assets and the covenant not to compete set forth in Section
9.1 (the "Initial Allocation Statement") and (ii) in the event that Purchaser
pays to Seller any amount of Deferred Portion of the Purchase Price described in
Section 2.2(c) or deferred fees described in Section 6.12, within 120 days
before the earlier of (x) the due date (with extension) for filing any income
Tax Return of Seller and (y) the due date (with extension) for filing any income
Tax Return of Purchaser, a copy of a statement reflecting the payment of such
amount (a "Revised Allocation Statement" and together with the Initial
Allocation Statement, an "Allocation Statement"). Within 60 days after receiving
any Allocation Statement, Seller shall propose to Purchaser any changes to such
Allocation Statement or shall indicate its concurrence therewith. Seller's
failure to propose any change or to indicate its concurrence within such 60-day
period shall be deemed to be an indication of its concurrence with such
Allocation Statement. Purchaser and Seller shall file, and shall cause their
respective Affiliates to file, all Tax Returns and statements (including IRS
Form 8594), forms and schedules in connection therewith in a manner consistent
with the applicable Allocation Statement and shall take no position contrary
thereto unless required to do so by applicable Tax laws. Any disputes with
respect to the items on any Allocation Statement which Purchaser and Seller,
acting in good faith, are unable to resolve shall by resolved by a public
accounting firm with nationally recognized auditing expertise mutually
acceptable to Purchaser and Seller. Each of the parties hereto shall be bound by
the decision rendered by such accounting firm.
6.9 Insurance; Risk of Loss. To the extent that any insurance policies owned or
controlled by Seller (collectively, the "Seller's Insurance Policies") (i) cover
any Damages as to which the Purchaser Indemnified Parties are entitled to
indemnification under Section 10.1 or 10.2 of this Agreement and (ii) permit
claims to be made thereunder with respect to such Damages ("Seller Claims"),
Seller shall cooperate, and shall cause its Affiliates to cooperate, with
Purchaser in submitting Seller Claims (or pursuing Seller Claims previously
made) on behalf of Purchaser under the Seller's Insurance Policies. Purchaser
shall bear the out-of-pocket expenses of Seller and its respective Affiliates in
the preparing, submitting or pursuing of such Seller Claims.
6.10 Further Assurances.
(a) All amounts which are received after the Closing Date by Seller that are
Purchased Assets (including, without limitation, Accounts Receivable and all
other payments with respect to any Financing Contract that has been assigned a
"leasing corp code" of 01, 10, 18 or 43 in the books and records of Seller as
maintained prior to the date hereof) shall be received by Seller as agent, in
trust for and on behalf of Purchaser, and, Seller shall promptly pay or cause to
be paid promptly all of such amounts over to Purchaser and shall provide to
Purchaser information as to the nature, source and classification of such
payments, including any invoice relating thereto. All amounts which are received
after the Closing Date by Purchaser that are Excluded Assets (or which are paid
in respect of Excluded Assets) shall be received by Purchaser as agent, in trust
for and on behalf of the Seller, and Purchaser shall promptly pay or cause to be
promptly paid all of such amounts over to Seller and shall provide to Seller
information as to the nature, source and classification of such payments,
including any invoice relating thereto.
(b) After the Closing, Seller will, whenever and as often as reasonably
requested to do so by Purchaser, do, execute, acknowledge and deliver any and
all such other and further acts, assignments, transfers and any instruments of
further assurance, approvals and consents as are reasonably necessary or proper
in order to complete, ensure and perfect the sale, transfer and conveyance to
Purchaser contemplated hereby of the Purchased Assets and the consummation of
the other transactions contemplated hereby.
(c) After the Closing, Purchaser will, whenever and as often as reasonably
requested to do so by Seller, do, execute, acknowledge and deliver any and all
such other and further acts, assignments, transfers and any instruments of
further assurance, approvals and consents as are reasonably necessary or proper
in order to complete, ensure and perfect the assumption and assignment to
Purchaser contemplated hereby of the Assumed Liabilities and the consummation of
the other transactions contemplated hereby.
6.11 Payment of Broker's or Finder's Fees. Seller shall pay any and all brokers'
or finders' fees, and any other commissions or similar fees, payable to any
Person acting on behalf of Seller or any of its Affiliates or under the
authority of any of them, in connection with any of the transactions
contemplated herein, and Purchaser shall pay any and all brokers' or finders'
fees, and any other commissions or similar fees, payable to any Person acting on
behalf of Purchaser or any of its Affiliates or under the authority of any of
them, in connection with any of the transactions contemplated herein, in each
case regardless of whether any claim for payment is asserted before or after the
Closing or before or after any termination of this Agreement.
6.12 Deferred Fees. Purchaser shall cause the relevant Affiliate of Purchaser to
pay Seller an amount equal to 0.25% of the original cost of the equipment newly
leased by an Affiliate of Purchaser (other than in connection with a
Restructuring Transaction) during the 12-month period immediately following the
Closing (i) pursuant to any master lease or master rental agreement (including
any master agreement and product supplement agreement) constituting Purchased
Assets hereunder or (ii) pursuant to any master lease or master rental agreement
(including any master agreement and product supplement agreement) entered into
by an Affiliate of Purchaser (under the "Comdisco" name) after the date of this
Agreement with any Obligor existing as of the date hereof. Such amounts shall be
paid, without duplication, to Seller in cash by wire transfer of immediately
available funds no later than 30 days following the end of each fiscal quarter
comprising such 12-month period.
6.13 Employees.
(a) Purchaser shall identify no later than five (5) days prior to Closing an
Affiliate of Purchaser (the "Hiring Affiliate") that shall be entitled, but not
obligated, to offer employment to any employee of Seller on such terms and
conditions as the Hiring Affiliate may determine. In connection therewith,
Purchaser shall cause such Hiring Affiliate to execute an agreement with Seller
in which such Hiring Affiliate accepts and agrees to be bound by the terms and
conditions set forth in this Section 6.13. Seller shall provide the Hiring
Affiliate with a reasonable opportunity to interview and select the employees of
the Seller to whom binding written offers of employment will be made. Any
employee of Seller who accepts the Hiring Affiliate's offer of employment within
(5) days of the Closing Date and is employed by the Hiring Affiliate on the
first Business Day following the later of (x) the September 30, 2003 or (y) the
employee's termination of employment from Seller (each a "Hired Employee") shall
(i) be deemed to have terminated employment with Seller in a manner that will
entitle such Hired Employee to be paid by Seller any amount accrued under
Seller's existing Stay Bonus Plan or Management Incentive Plan subject to the
terms and conditions of Hired Employee's Stay Bonus Plan and/or Management
Incentive Plan, and (ii) not be eligible for or receive any benefits under
Seller's Severance Benefits Plan. Hired Employees who are not covered by
Seller's Upside Sharing Plan shall be eligible to receive from the Hiring
Affiliate a retention bonus equal to the amount of the cash severance pay that
the Hired Employee would have received under Seller's Severance Benefits Plan
had the Hired Employee not been offered employment by the Hiring Affiliate;
provided that such retention bonus shall be paid only if the Hired Employee
remains in the continuous employ of the Hiring Affiliate from the Hired
Employee's date of hire until the earliest of (A) the date the Hired Employee's
employment with the Hiring Affiliate is terminated by the Hiring Affiliate for
any reason other than for cause, (B) the Payment Termination Date or (C) the
date which is twelve (12) months after the Closing Date. A Hired Employee's
right to receive any such retention bonus shall be subject to the terms, and
conditioned upon execution by the Hired Employee and the Hiring Affiliate, of a
written agreement in the form attached hereto as Exhibit I. As soon as
practicable after the Closing Date, but in no event later than 30 days following
the Closing Date, Purchaser shall cause Bay4 Capital, LLC to establish a trust
in form and substance specified by Seller, in its sole discretion, for the
payment of such retention bonuses to Hired Employees and Seller shall cause such
trust to be funded with an amount sufficient to pay all such retention bonuses.
Bay4 Capital, LLC shall be the grantor of the trust and shall be responsible for
the employer's share of all taxes payable in connection with payments made from
the trust pursuant to retention bonus agreements. All funds remaining in such
trust following the date which is thirteen (13) months after the Closing Date
shall be promptly refunded to Seller.
(b) Hiring Affiliate shall (i) waive the standard ninety (90) day waiting period
for Hiring Affiliate's healthcare benefits to begin the first day of the
following month, (ii) offer healthcare coverage effective on the Hired
Employee's date of hire with the Hiring Affiliate to each Hired Employee and/or
the Hired Employee's spouse and dependents (collectively the "Qualified
Beneficiaries") if the Qualified Beneficiaries were covered under any medical
plan on the date immediately preceding the Hired Employee's date of hire with
the Hiring Affiliate and (iii) reimburse on a monthly basis any Hired Employee
who is terminated by the Hiring Affiliate without cause an amount equal to the
monthly COBRA Subsidy, as defined under Seller's Severance Benefit Plan ("COBRA
Subsidy"), expressed as a monthly benefit, payable under Seller's Severance
Benefit Plan for the period provided under Seller's Severance Benefit Plan as of
the date the Hired Employee's employment with Seller terminated, assuming the
Hired Employee's eligibility for such COBRA Subsidy, but reduced by the number
of weeks of the Hired Employee's employment with the Hiring Affiliate, and
conditioned upon the Hired Employee's election of healthcare continuation
coverage pursuant to the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), under the Hiring Affiliate's
medical and dental plan or continuous coverage under the Seller's medical and
dental plan.
6.14 Covenants; Enforcement of Restrictive Covenants. From and after the Closing
Date, Seller will use its reasonable best efforts to fully enforce the
provisions of any non-disclosure, non-competition and confidentiality agreement
to the extent relating to the Lease Portfolio to which Seller is a party.
6.15 Restructuring Payment. In connection with any Restructuring Transaction by
an Affiliate of Purchaser with respect to any single Financing Contract or group
of Financing Contracts (but not all or a substantial part of the Lease
Portfolio, which is prohibited by Section 6.19 hereof or the terms of the
Promissory Notes), Purchaser shall cause such Affiliate of Purchaser to promptly
pay Purchaser a purchase price for such Financing Contract or group of Financing
Contracts equal in amount to the sum of (i) the Buyout Value and (ii) the
Margin. Such amount shall be payable to Purchaser and shall constitute Monthly
Cash, which shall be paid in accordance with the payment priorities set forth in
Section 2.3 hereof.
6.16 Radio Shack Reconciliation. On or prior to the Closing, the parties shall
use mutually agreeable methods and procedures to reconcile the amount of the
Assumed Indebtedness in respect of the Financing Contracts set forth on Schedule
6.16 (the "Radio Shack Leases") with the amount of the future "minimum rentals"
due in respect of the Radio Shack Leases. At or prior to the Closing, Seller
shall pay to the lender on the Assumed Indebtedness in respect of the Radio
Shack Leases such amount of cash (the "Reconciliation Amount") as may be
necessary to result in (i) the present value of the then outstanding amount of
Assumed Indebtedness in respect of the Radio Shack Leases (after giving pro
forma effect to Seller's payment at or prior to Closing) discounted to the
Closing Date at a rate (appropriately compounded to reflect the frequency of
payments with respect to such Assumed Indebtedness) of 7.7% per annum to be
equal to (ii) the present value of the future "minimum rentals" due under the
Radio Shack Leases (as determined by the parties in accordance with the
preceding sentence) discounted to the Closing Date at a rate (appropriately
compounded to reflect the frequency of such future "minimum rentals") of 7.7%
per annum. It is the intention of the parties hereto that, following such
payment by Seller of the Reconciliation Amount, the remaining balance on the
Assumed Indebtedness in respect of the Radio Shack Leases will be amortized and
fully paid and satisfied solely from the remaining future "minimum rentals" due
under the Radio Shack Leases.
6.17 Ancillary Agreements. Purchaser (or an Affiliate of Purchaser, as
applicable) and Seller shall enter into: (i) the trademark license agreement
(the "Trademark License") substantially in the form attached hereto as Exhibit
E; (ii) the Lease Services Agreement in substantially the form attached hereto
as Exhibit A; (iii) the transition services agreement (the "Transition Services
Agreement") substantially in the form attached hereto as Exhibit H.
6.18 Other Intellectual Property.
(a) Licensed Computer Software and Know-How. Effective on the Closing Date,
Seller does hereby grant a royalty-free, sublicensable, non-exclusive license to
the Affiliate of Purchaser to which the Other Contracts and the Inactive
Contracts are assigned to use the Computer Software and Know-How owned by Seller
and specifically related to the Business, such license to include the right to
modify and create derivative works to the Computer Software and Know-How;
provided, however, that such Computer Software and Know-How is provided on an
"as is" basis and without representations or warranties of any kind and Seller
shall have no duty or obligation to update or maintain such Computer Software or
Know-How following the Closing. The rights granted under this Section 6.18 shall
not be assigned by the Affiliate of Purchaser or Purchaser without Seller's
prior written consent (which consent shall not be unreasonably withheld) except
as specifically set forth in Section 11.6 hereof.
(b) Imaging System. Following the date hereof, Seller shall use commercially
reasonable efforts to assist an Affiliate of Purchaser in obtaining at such
Affiliate of Purchaser's cost new license(s) from the third party vendor(s) of
the Imaging System for the use by such Affiliate of Purchaser of such Imaging
System from and after the Closing.
(c) Link from Seller's Website. The home page of Seller's website located at the
URL ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ shall, from the Closing Date and until such time as Seller
shall no longer operate such website, include a link and a notice with the same
or substantially the same language as follows: "Comdisco, Inc. recently
completed a transaction for the sale of its remaining North American information
technologies leasing equipment business to Bay4 Capital. For information
technologies leasing information, please visit Bay4 Capital's website at its URL
at ▇▇▇.▇▇▇▇.▇▇▇." After the Closing, the parties shall mutually agree on
reasonable procedures to implement such link.
(d) Assignment of Computer Software and Know-How. Upon the discontinuance of the
operations of Seller's business, Seller shall sell, assign, transfer and convey
to Purchaser all of Seller's right, title and interest in the Computer Software
and Know-How owned by Seller and related to the Business, subject to any and all
pre-existing rights granted by Seller to any Person before the date of this
Agreement and as provided in the following sentence. From the date of this
Agreement, Seller agrees not to sell, lease, further license, transfer or
otherwise dispose of any Computer Software and/or any Know-How related thereto,
except that Seller may license any such Computer Software and/or any Know-How
related thereto to the acquirer (or any affiliate of such acquirer) of any lease
portfolio or leasing portfolio assets of Seller and any of its Affiliates for
the purpose of running-off or otherwise liquidating any such lease portfolio or
leasing portfolio assets by such acquirer (or any affiliate of such acquirer).
Immediately prior to its final acts in liquidation and wind-up of its affairs
following dissolution, Seller shall sell, assign, transfer and convey to
Purchaser all of Seller's right, title and interest in the Domain Name;
provided, however, that Seller shall not abandon or fail to renew the Domain
Name at any time prior to such date.
6.19 Post-Closing Operations of Purchaser. Purchaser covenants and agrees that,
until full and final payment of the ▇▇▇▇▇ Fargo Purchase and the Promissory
Notes, Purchaser shall not do any of the following: (i) create, incur, assume,
permit, guarantee, or otherwise become or remain, directly or indirectly, liable
with respect to any indebtedness, except for the ▇▇▇▇▇ Fargo Purchase and the
Promissory Notes; (ii) create, incur, assume or permit to exist, directly or
indirectly, any Encumbrance with respect to any of the Purchased Assets, except
for Encumbrances to secure payment obligations under the ▇▇▇▇▇ Fargo Purchase
and the Promissory Notes or otherwise in connection with the consummation of the
transactions contemplated hereby; (iii) (A) enter into any merger,
consolidation, reorganization, or recapitalization, or reclassify its membership
interests, (B) liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution) or (C) convey, sell, lease, license, assign, transfer, or
otherwise dispose of any of the Purchased Assets, except as expressly permitted
under this Agreement, the ▇▇▇▇▇ Fargo Purchase or otherwise in connection with
the consummation of the transactions contemplated hereby; (iv) change its
limited liability company structure or incorporate or reorganize itself under
the laws of any jurisdiction; (v) make any change in the nature of its business;
(vi) cause, permit, or suffer, directly or indirectly, any change in control;
(vii) except as expressly permitted under this Agreement, make any distributions
(in cash or other property) or purchase, acquire, redeem or retire any of
Purchaser's membership interests, whether now or hereafter outstanding; (viii)
materially modify or change its method of accounting (other than as may be
required to conform to GAAP); (ix) form any subsidiaries or make or acquire,
directly or indirectly, any investment in any other Person (including
Affiliates) in any form, including without limitation through loans, guarantees,
advances or capital contributions; (x) directly or indirectly enter into or
permit to exist any transaction with any Affiliate or non-Affiliate of
Purchaser, except as expressly permitted under this Agreement; (xi) have, hire,
employ, take on or retain any employees; (xii) own, purchase, buy, obtain or
otherwise acquire, directly or indirectly, any assets other than the Purchased
Assets; (xiii) enter into any agreement, contract or commitment (other than this
Agreement) except as necessary to run-off and sell the Purchased Assets in an
orderly manner; or (xiv) enter into an agreement, contract or commitment (other
than this Agreement) to do any of the things prohibited by the foregoing;
provided, however, that in the event there shall then exist a Potential Event of
Servicer Termination (as defined in the Subordination Agreement) or an Event of
Servicer Termination (as defined in the Subordination Agreement), Purchaser may
take any action that would otherwise be prohibited by this Section 6.19 if, and
only if (A) ▇▇▇▇▇ Fargo has consented thereto in writing and (B) Seller has
received at least fifteen (15) days' prior written notice of such proposed
action.
6.20 Post-Closing Reporting Obligations. No later than 10 days following the
last day of each calendar month ending after the Closing Date and until the
Payment Termination Date, Purchaser shall deliver to Seller an accounts
receivable aging report, cash receipts (by Financing Contract) report, cash
reconciliation report and any other statements or reports reasonably necessary
to determine the Monthly Cash during such calendar month (collectively, the
"Monthly Statement"). No later than 30 days following the last day of each
calendar month ending after the Closing Date and until the Payment Termination
Date, Purchaser shall deliver to Seller unaudited financial statements or
reports of the Purchaser consisting of a balance sheet and income statement. In
addition, no later than 45 days following the end of each calendar quarter
ending after the Closing Date and until the Payment Termination Date, Purchaser
shall deliver to Seller an unaudited portfolio report containing Portfolio
Information (including, without limitation, the maturity date, net book value,
book residual, lease receivable amounts and future firm term cash flows by
period) for each active Financing Contract (the "Quarterly Statement"). Each
Monthly Statement, Quarterly Statement and any other statement or report
delivered by Purchaser in accordance with this Section 6.20 shall be prepared in
accordance with GAAP. At Seller's request, Purchaser shall provide Seller any
information reasonably requested in connection with the preparation of such
Monthly Statement, Quarterly Statement and any other statement or report
delivered by Purchaser in accordance with this Section 6.20 and shall further
provide Seller and its counsel, accountants and other representatives with
access at all reasonable times during regular business hours and upon reasonable
notice to personnel and the books and records of Purchaser for such purpose.
6.21 Books and Records.
(a) From and after the Closing, Seller shall make reasonable provision to store
copies (whether manually or electronically) of the Books and Records on behalf
of Purchaser with the same degree of care used in storing Seller's own books and
records and shall reasonably cooperate and assist Purchaser in accessing all
such Books and Records as Purchaser may reasonably request; provided, however,
in no event shall Seller have any obligation to (i) store copies (whether
manually or electronically) of the Books and Records for a period of more than
two (2) years following the Closing Date or (ii) maintain the Imaging System for
a period of more than six (6) months following the Closing Date. Notwithstanding
the foregoing, Seller shall have the option to discard and/or destroy any or all
manual copies of such Books and Records upon two (2) weeks' prior written notice
to Purchaser. During any such two (2) week period, Seller shall, upon the
request of Purchaser make reasonable provision to allow Purchaser (at
Purchaser's sole cost and expense) to take possession of any or all manual
copies of such Books and Records. In addition, Seller shall have the option, at
any time after October 1, 2003, to discard and/or destroy any or all electronic
copies of such Books and Records upon two (2) weeks' prior written notice to
Purchaser. During any such two (2) week period, Seller shall, upon the request
of Purchaser, make reasonable provision to allow Purchaser (at Purchaser's sole
cost and expense) to take possession of any or all electronic copies of such
Books and Records.
(b) From and after the Closing Date, Purchaser shall allow Seller (and any of
Seller's employees, representatives, accountants and auditors) reasonable access
to personnel, representatives and employees of Purchaser or any Purchaser
Affiliate and all Books and Records and the other business records and files of
Purchaser or any Affiliate of Purchaser that are reasonably required by Seller
for audit purposes and Tax matters.
6.22 Property Tax. From and after the Closing Date, at the reasonable request of
Seller, Purchaser shall prepare and mail invoices to Obligors under any
Financing Contract for personal property, ad valorem and other similar Taxes
paid or payable on behalf of such Obligors by Seller prior to the Effective Date
or otherwise paid or payable by Seller prior to the Effective Date in respect of
Leased Property or Inventory and for which invoices in respect of such personal
property, ad valorem and other similar Taxes were not prepared or mailed by
Seller prior to the Closing but only to the extent that such personal property,
ad valorem and other similar Taxes are not reflected in the Accounts Receivable.
Any and all amounts remitted to Purchaser in respect of such invoices shall be
received by Purchaser as agent, in trust for and on behalf of Seller, and
Purchaser shall promptly pay all of such amounts over to the Seller and shall
provide the Seller information as to the nature and source of such payments. In
no event shall amounts remitted to Purchaser in respect of such invoices be
deemed Monthly Cash or subject to the payment priorities set forth in Section
2.3 hereof. At Purchaser's request, Seller shall provide Purchaser any
information reasonably requested in connection with the preparation and mailing
of invoices by Purchaser pursuant to this Section 6.22.
6.23 Inactive Contracts. Seller shall use its reasonable efforts to deliver
originals or certified copies, to the extent available, of all Inactive
Contracts to the designated Affiliate of Purchaser within 60 days of the Closing
Date. From and after the end of such 60 day period, Seller shall have no further
obligation, liability or duty under this Section 6.23 to deliver originals or
certified copies of the Inactive Contracts to the designated Affiliate of
Purchaser.
6.24 Best Efforts. Purchaser and Seller shall use their reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Purchaser and Seller
shall also refrain from taking, directly or indirectly, any action contrary to
or inconsistent with the provisions of this Agreement, including action which
would impair Purchaser's ability to consummate the transactions contemplated by
this Agreement. In addition to the foregoing, Purchaser shall use its reasonable
best efforts (a) to take all action necessary to secure the ▇▇▇▇▇ Fargo Purchase
and (b) in the event that the ▇▇▇▇▇ Fargo Purchase shall not be secured on or
prior to the Closing, to secure alternate financing sufficient to pay the Cash
Portion of the Purchase Price hereunder at Closing.
6.25 Headquarters Space. Purchaser acknowledges that Seller is a party to an
agreement (the "HQ Sale Agreement") pursuant to which Seller has agreed to (i)
sell and convey to the purchaser under the HQ Sale Agreement (the "HQ
Purchaser") all of its right, title and interest in and to the land and
improvements that currently comprise Seller's headquarters located in Rosemont,
Illinois as more particularly described in the HQ Sale Agreement (the "HQ
Building") and (ii) lease from the HQ Purchaser a portion of the HQ Building
(the "Leased Premises"). Seller hereby covenants that promptly after Closing,
Seller shall negotiate in good faith with Purchaser the terms and conditions of
a sublease, as mutually agreed upon by the parties, for a portion of the Leased
Premises not to exceed the greater of (A) 5,500 rentable square feet or (ii)
one-quarter (1/4) of the rentable square feet of any floor leased by Seller on
the Leased Premises, and Seller shall use its reasonable best efforts (which
shall not include the payment of any fee or the expenditure of any amounts) to
obtain any consent required from the HQ Purchaser.
6.26 DLR Invoicing. From and after Closing, in respect of all Financing
Contracts that are subject to Assumed Indebtedness, Purchaser shall invoice the
Obligors with respect to such Financing Contracts as required by the terms of
the applicable Financing Contracts and otherwise in accordance with the terms of
the applicable Assumed Indebtedness.
6.27 Lockbox Cash. From and after the Effective Date, Seller shall not remove
any cash or cash equivalents constituting Purchased Assets from Lockbox Accounts
referred to on Schedule 1.11.
6.28 Additional Lease Transactions. From and after the Closing, to the extent
that Purchaser identifies a lease or financing arrangement provided by Seller
with respect to equipment or property under which Seller is the lessor that (i)
was not set forth on Schedule 1.8, (ii) was not otherwise a Purchased Asset
hereunder and (iii) specifically relates to the Business, Purchaser and Seller
shall negotiate in good faith to effect a sale from Seller to Purchaser of such
lease or financing arrangement (and the equipment or property with respect
thereto) and the assumption by Purchaser of all liabilities and obligations
related to such lease or financing arrangement (and the equipment or property
with respect thereto) on economic terms as would most closely resemble those
contained in this Agreement had such lease or financing arrangement been
included as a Lease Transaction on Schedule 1.8 as of the Effective Date.
6.29 Purchase Price Statements. The Estimated Purchase Price Statement shall be
prepared by Seller and Purchaser in accordance with the Statement Methodology.
The Final Purchase Price Statement shall be prepared by Seller and Purchaser in
accordance with the Statement Methodology by adjusting the Estimated Purchase
Price Statement to only the Special Adjustments.
6.30 Canadian Transaction. Prior to the Closing, Seller and Purchaser shall
prepare definitive documentation on mutually agreeable terms and conditions (the
"Canadian Transaction Documents") pursuant to which an Affiliate of Purchaser
(which Affiliate of Purchaser shall be duly organized, validly existing and in
good standing under the laws of Canada on and after the Closing Date) shall
purchase and acquire certain information technologies equipment leasing business
assets and the liabilities associated therewith from Comdisco Canada Limited, a
company incorporated in Ontario, Canada under corporation number 863624
("Comdisco Canada") and an Affiliate of Seller.
6.31 Transfers Not Effected as of Closing. To the extent any approval or consent
of a third party that may be necessary in connection with the assignment and
assumption of any Assumed Indebtedness or Required Consent Financing Contract
hereunder is not obtained on or prior to Closing, Seller shall continue to be
subject to any liabilities or obligations that would be Assumed Liabilities but
for the failure to obtain the consent or approval of a third party as
contemplated by Section 2.1(d) hereof and Purchaser shall pay, perform and
discharge fully all of the liabilities and obligations of Seller that otherwise
would be Assumed Liabilities from and after the Closing subject to the terms and
in accordance with Section 2.3 hereof. Seller shall, without consideration
therefor, pay, assign and remit to Purchaser promptly all monies, rights and
other consideration received in respect of the asset that would be a Purchased
Asset but for the failure to obtain the consent or approval of a third party as
contemplated by Section 2.1(d) hereof and all such monies, rights and other
consideration shall be received by Purchaser and treated for all purposes as
Monthly Cash subject to the terms and in accordance with Section 2.3 hereof.
Seller shall exercise or exploit its rights in respect of such Assumed
Indebtedness or Required Consent Financing Contract only as reasonably directed
by Purchaser and at Purchaser's sole cost and expense.
ARTICLE VII
CONDITIONS TO CLOSING;
ABANDONMENT OF THE TRANSACTION
7.1 Conditions to Purchaser's Obligations to Close. The obligations of
Purchaser to purchase the Purchased Assets and to otherwise consummate the
Closing shall be subject to the satisfaction (or waiver by Purchaser) of
following conditions:
(a) The representations and warranties of Seller contained herein shall be true
and correct in all respects at the Closing (without giving effect to any
materiality, Seller's Knowledge or Material Adverse Effect qualifications or
exceptions contained in such representations and warranties), in each case with
the same effect as though made at and as of such time (other than
representations and warranties that are made as of a specific date, which need
be true and correct as of such date), except where the failure to be true and
correct has not had, and is not likely to have, a Material Adverse Effect.
(b) Seller shall have performed in all material respects all obligations and
complied in all material respects with all covenants required by this Agreement
to be performed or complied with by Seller at or prior to the Closing (except to
the extent waived hereunder by Purchaser).
(c) Seller shall have delivered to Purchaser a certificate, dated as of the
Closing Date, of an officer of Seller to the effect that the conditions set
forth in Sections 7.1(a) and (b) of this Agreement have been fulfilled.
(d) (i) On the Closing Date, there shall be no injunction, writ, preliminary
restraining order or other order in effect of any nature issued by a
Governmental Entity of competent jurisdiction directing that the transactions
provided for herein or any portion thereof not be consummated as provided
herein, (ii) no action or proceeding shall have been instituted and, at what
would otherwise have been the Closing Date, remain pending before a Governmental
Entity, to restrain, prohibit or otherwise challenge the sale of the Purchased
Assets to Purchaser and (iii) no Governmental Entity shall have notified either
party to this Agreement that the consummation of the transactions contemplated
hereby would constitute a violation of the laws of the United States or any
State thereof or the laws of the jurisdiction to which such Governmental Entity
is subject and that it intends to commence proceedings to restrain the
consummation of such transactions unless such Governmental Entity shall have
withdrawn such notice prior to what would otherwise have been the Closing Date.
(e) All Authorizations, consents and approvals referred to in Section 5.4 hereof
(without giving effect to any qualifications for materiality with regard to
Authorizations, consents or approvals from any Governmental Entity), shall have
been obtained and all Authorizations required for the valid consummation by
Seller and Purchaser of the transactions contemplated by this Agreement,
including, without limitation, the expiration or early termination of any
applicable waiting period under the HSR Act shall have been obtained.
(f) Seller shall have delivered duly authorized resolutions of each of Seller's
board of directors and stockholder approving the execution and delivery of this
Agreement and the documents, instrument or agreements to be executed and
delivered by Seller pursuant hereto and thereto and the consummation by Seller
of transactions contemplated herein and therein.
(g) Seller shall have executed and delivered to Purchaser (or an Affiliate of
Purchaser in the case of Inactive Contracts and Other Contracts) a ▇▇▇▇ of sale
in substantially the form attached hereto as Exhibit F evidencing the transfer
of the Purchased Assets to Purchaser (or an Affiliate of Purchaser in the case
of Inactive Contracts and Other Contracts).
(h) Seller and ▇▇▇▇▇ Fargo shall have duly executed and delivered to the other
party the Subordination Agreement in substantially the form attached hereto as
Exhibit D.
(i) ▇▇▇▇▇ Fargo shall have funded its commitment under the Commitment Letter.
(j) Seller shall have duly executed and delivered to Purchaser the Trademark
License in substantially the form attached hereto as Exhibit E.
(k) Seller shall have duly executed and delivered to the other party thereto the
Lease Services Agreement in substantially the form attached hereto as Exhibit A
required pursuant to Section 2.1(d) hereunder.
(l) Seller shall have duly executed and delivered to the other party thereto the
Transition Services Agreement substantially in the form attached hereto as
Exhibit H.
(m) Seller shall have delivered to Purchaser a duly completed and executed
certification of non-foreign status pursuant to Section 1.1445-2(b)(2) of the
Treasury regulations promulgated under the Code.
(n) Seller shall have delivered opinions of Seller's counsel substantially in
the form attached hereto as Exhibit J and Exhibit K.
7.2 Conditions to Seller's Obligations to Close. The obligations of Seller to
sell the Purchased Assets and to otherwise consummate the Closing shall be
subject to the satisfaction (or waiver by Seller) of the following conditions:
(a) The representations and warranties of Purchaser contained herein shall be
true and correct in all respects at the Closing (without giving effect to any
materiality, knowledge or Material Adverse Effect qualifications or exceptions
contained in such representations and warranties), in each case with the same
effect as though made at and as of such time (other than representations and
warranties that are made as of a specific date, which need be true and correct
as of such date), except where the failure to be true and correct has not had,
and is not likely to have, a Material Adverse Effect.
(b) Purchaser shall have performed in all material respects all obligations and
complied in all material respects with all covenants required by this Agreement
to be performed or complied with by Purchaser at or prior to the Closing (except
to the extent waived hereunder in writing by Seller).
(c) Purchaser shall have delivered to Seller a certificate, dated as of the
Closing Date, from a manager of Purchaser to the effect that the conditions set
forth in Sections 7.2(a) and (b) of this Agreement have been fulfilled.
(d) (i) On the Closing Date, there shall be no injunction, writ, preliminary
restraining order or other order in effect of any nature issued by a
Governmental Entity of competent jurisdiction directing that the transactions
provided for herein or any portion thereof not be consummated as provided
herein, (ii) no action or proceeding shall have been instituted and, at what
would otherwise have been the Closing Date, remain pending before a Governmental
Entity, to restrain, prohibit or otherwise challenge the sale of the Purchased
Assets to Purchaser and (iii) no Governmental Entity shall have notified either
party to this Agreement that the consummation of the transactions contemplated
hereby would constitute a violation of the laws of the United States or any
State thereof or the laws of the jurisdiction to which such Governmental Entity
is subject and that it intends to commence proceedings to restrain the
consummation of such transactions unless such Governmental Entity shall have
withdrawn such notice prior to what would otherwise have been the Closing Date.
(e) All Authorizations, consents and approvals referred to in Section 3.4 hereof
(without giving effect to any qualifications for materiality with regard to
Authorizations, consents or approvals from any Governmental Entity), shall have
been obtained and all Authorizations required for the valid consummation by
Seller and Purchaser of the transactions contemplated by this Agreement,
including, without limitation, the expiration or early termination of any
applicable waiting period under the HSR Act and similar legislation in other
jurisdictions shall have been obtained.
(f) Purchaser and ▇▇▇▇▇ Fargo shall have duly executed and delivered to the
other party the Subordination Agreement in substantially the form attached
hereto as Exhibit D.
(g) Purchaser (or an Affiliate of Purchaser in respect of Assumed Liabilities
arising from or under Inactive Contracts and Other Contracts) shall have
executed and delivered to the Seller an assumption agreement in substantially
the form attached hereto as Exhibit G evidencing the assumption of the Assumed
Liabilities by Purchaser (or an Affiliate of Purchaser in respect of Assumed
Liabilities arising from or under Inactive Contracts and Other Contracts).
(h) On behalf of Purchaser, ▇▇▇▇▇ Fargo shall have paid the Cash Portion of the
Purchase Price to Seller.
(i) Purchaser shall have duly executed and delivered to Seller the Promissory
Notes in substantially the form attached hereto as Exhibit B.
(j) Purchaser shall have duly executed and delivered to Seller the Trademark
License in substantially the form attached hereto as Exhibit E.
(k) Purchaser shall have caused an Affiliate of Purchaser to have duly executed
and delivered the Lease Services Agreement in substantially the form attached
hereto as Exhibit A required pursuant to Section 2.1(d) hereunder.
(l) Purchaser shall have duly executed and delivered to Seller a security
agreement in substantially the form attached hereto as Exhibit C.
(m) Purchaser shall have caused an Affiliate of Purchaser to have duly executed
and delivered to Seller the Transition Services Agreement substantially in the
form attached hereto as Exhibit H.
(n) In accordance with Section 6.30 hereof, Purchaser shall have caused an
Affiliate of Purchaser to have duly executed and delivered the Canadian
Transaction Documents to Comdisco Canada and the transactions contemplated
thereby shall have been consummated concurrently herewith.
(o) Purchaser shall have delivered an opinion of Purchaser's counsel
substantially in the form attached hereto as Exhibit L.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to any Closing:
(a) by mutual consent of each of Seller and Purchaser;
(b) by either Seller or Purchaser, if a Governmental Authority shall have issued
an order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become final
and nonappealable; or
(c) by either Seller or Purchaser, if the Closing shall not have occurred on or
before September 15, 2003, provided the terminating party is not in breach.
8.2 Procedure and Effect of Termination. In the event of termination and
abandonment of the transactions contemplated hereby pursuant to Section 8.1,
written notice thereof shall forthwith be given to the other party to this
Agreement and this Agreement shall terminate (subject to the provisions of this
Section 8.2) and the transactions contemplated hereby shall be abandoned,
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein, no party hereto shall have any liability or
further obligation to any other party to this Agreement resulting from such
termination except (i) as provided in this Section 8.2, (ii) that the provisions
of Sections 6.2(b) and 9.2 hereof shall remain in full force and effect and
(iii) no party waives any claim or right against a breaching party to the extent
that such termination results from the material breach by a party hereto of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.
ARTICLE IX
NO COMPETITION; No Solicitation; Confidentiality
9.1 No Competition. For a period of five years following the Closing Date (the
"Restricted Period"), Seller shall not, within the United States, directly or
indirectly, in any capacity, render services, engage or have a financial
interest in, any business that shall be engaged in a Competitive Business. If
any Governmental Entity determines that the foregoing restrictions are too broad
or otherwise unreasonable under applicable Law, including with respect to time
or space, such Governmental Entity is hereby requested and authorized by the
parties to revise the foregoing restriction to include the maximum restrictions
allowable under applicable law. Each party hereto acknowledges, however, that
this Article IX has been negotiated by the parties and that the geographical and
time limitations, as well as the limitation on activities, are reasonable in
light of the circumstances pertaining to the Lease Portfolio. "Competitive
Business" means any business of commercial equipment leasing or financing;
provided, however, in no event shall the term Competitive Business be deemed to
include the orderly runoff of the remaining assets and operations of Seller and
its Affiliates in accordance with the business purposes of Comdisco Holding
Company, Inc.
9.2 No Solicitation. During the Restricted Period, Seller will not, without the
prior written consent of Purchaser (which consent shall not be unreasonably
withheld or delayed), solicit any employee of Purchaser or induce or attempt to
induce any such employees out of the employ of Purchaser; provided, however,
that Seller shall not be prohibited from employing any such employee who
contacts Seller on his or her own initiative and without any direct solicitation
by Seller.
9.3 Confidentiality. Seller recognizes and acknowledges that by reason of its
involvement with the Lease Portfolio, it has had access to trade secrets
relating to the Lease Portfolio. Seller acknowledges that such trade secrets are
a valuable and unique asset and agrees that it will not disclose, and shall use
reasonable best efforts not to allow the disclosure of, any such trade secrets
to any Person for any reason whatsoever, unless (i) such information becomes
generally available to the public other than as a result of a disclosure by
Seller or (ii) such disclosure is required by applicable law.
9.4 Public Announcements. Purchaser and Seller will consult with each other
before issuing any press release or otherwise making any written public
statement or making any presentations with respect to the transactions
contemplated by this Agreement, and shall not issue any such press release or
make any such written public statement or such presentation prior to such
consultation and the reasonable approval of such press release, public statement
or presentation by the other party, except as either party may determine is
required by applicable law or by obligations pursuant to any listing agreement
with any securities exchange or national trading system. The parties agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in a form reasonably agreed by the
parties. Notwithstanding the foregoing, each party (and each employee,
representative, or other agent of such party) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are or have been provided to
such party (or any employee, representative, or other agent of such party)
relating to such tax treatment and tax structure beginning on the earliest of
(x) the date of the public announcement of discussions relating to the
transactions contemplated by this Agreement, (y) the date of public announcement
of the transactions contemplated by this Agreement or (z) the date of the
execution of this Agreement (with or without conditions); provided, however,
that neither party (nor any employee, representative or other agent thereof) may
disclose any other information that is not relevant to understanding the tax
treatment and tax structure of the transactions contemplated by this Agreement
(including, without limitation, the existence or status of any negotiations, any
materials and the identity of any party and any information that could lead
another to determine the identity of any party, each to the extent not relevant
to the tax treatment or tax structure of the transactions contemplated by this
Agreement), or any other information to the extent that such disclosure could
result in a violation of any federal or state securities law.
9.5 Miscellaneous. Seller understands that Purchaser would not have entered into
this Agreement absent the provisions of this Article IX. In the event of any
breach or threatened breach by Seller of any provision of this Article IX, the
Purchaser shall be entitled to injunctive or other equitable relief, restraining
Seller from disclosing any trade secrets in whole or in part, or from engaging
in conduct that would constitute a breach of the obligations of Seller under
this Article IX. Such relief shall be in addition to and not in lieu of any
other remedies that may be available, including an action for the recovery of
Damages.
ARTICLE X
Indemnifications and Related Matters
10.1 Indemnification by Seller. Subject to the terms of Section 10.3 hereto,
Seller shall indemnify and hold harmless Purchaser, and its managers, members,
officers, employees and agents (collectively, the "Purchaser Indemnified
Parties"), from and against and in respect of any and all Damages suffered or
incurred by any of them resulting from, arising out of, based on or relating to
(i) any breach of any representation or warranty made by Seller in this
Agreement; (ii) any failure to perform duly and punctually any covenant,
agreement or undertaking on the part of Seller contained in this Agreement;
(iii) any breach of a representation or warranty included in any certificate,
schedule or other agreement, instrument or document, in each case delivered by
Seller to Purchaser pursuant to the terms of this Agreement (collectively, the
"Seller Related Documents"); or (iv) liabilities of Seller with respect to
Seller's actions relating to employees of Seller or benefit plans or payroll
practices of Seller; provided, however, that Purchaser Indemnified Parties shall
not be entitled to indemnification pursuant to this Section 10.1 (A) for Damages
resulting from, arising out of, based on or relating to any breach of any
representation or warranty made by Seller or an Affiliate of Seller in, or any
failure to perform duly and punctually any covenant, agreement or undertaking on
the part of Seller or an Affiliate of Seller contained in, any Seller Related
Documents with respect to the sale of any Canadian information technologies
equipment leasing assets by Seller (or an Affiliate of Seller) to Purchaser (or
an Affiliate of Purchaser) or (B) as a result of any breach of any
representation or warranty made by Seller in Section 4.2(b)(ii) to the extent
that a matter causing a breach of Section 4.2(b)(ii) is the result of an
Obligor's failure to provide insurance (or self insure) or, on and after the
Closing, Purchaser's failure to insure (but only with respect to Financing
Contracts that are listed on Schedule 4.2(b)(ii)) against loss or damage with
respect to any Leased Property subject to or governed by a Financing Contract.
For purposes of this Section 10.1, a breach of a representation or warranty
contained in this Agreement or any Seller Related Document shall be deemed to
exist either if such representation or warranty is actually inaccurate or
breached, if such representation or warranty would have been breached or been
inaccurate if such representation or warranty had not contained any limitation
or qualification as to materiality, Material Adverse Effect or Seller's
Knowledge, or, with respect to representations and warranties set forth in
Article IV only, if such representation or warranty would have been breached or
been inaccurate if disclosures with respect to such representation or warranty
had not been made in the Seller Disclosure Schedules, it being the intention of
the parties hereto that the Purchaser Indemnified Parties shall be indemnified
and held harmless from and against any and all Damages suffered or incurred by
any of them resulting from, arising out of, based on or relating to the failure
of any such representation, warranty, certificate, schedule or other agreement,
instrument or document to be true and correct in any respect, determined in each
case without regard to any qualification as to materiality, Material Adverse
Effect or Seller's Knowledge set forth with respect thereto or, with respect to
representations and warranties set forth in Article IV only, any disclosures
contained in the Seller Disclosure Schedules with respect thereto.
10.2 Additional Indemnification by Seller. Subject to the terms of Section 10.3
hereto, Seller shall indemnify and hold harmless, all Purchaser Indemnified
Parties from and against any and all Damages suffered or incurred by any of them
resulting from, arising out of, based on or relating to:
(a) any of the Excluded Assets or the ownership, operation, servicing, lease or
use thereof, or any action taken with respect thereto, by Seller or any other
Person; or
(b) the Excluded Liabilities (including, without limitation, any such
liabilities arising by operation of law, statute, common law or otherwise or
under successor liability or similar theories that would impose liability on
Purchaser as a result of its purchase of the Purchased Assets pursuant hereto).
10.3 Sole and Exclusive Remedy. Notwithstanding anything contained in this
Agreement to the contrary, the Purchaser Indemnified Parties' sole and exclusive
remedy for any and all claims for Damages resulting from, arising out of, based
on or relating to any breach of any representation or warranty or any failure to
perform any covenant, agreement or undertaking under this Agreement or any of
the certificates, schedules or other agreements, instruments or documents
executed and delivered in connection herewith shall be the indemnification
provided under the terms and subject to conditions of this Article X; provided,
however, that Damages shall not include lost profits or loss of expected value
including by way of the incurrence of a liability or obligation that would
otherwise be subject to an indemnification claim by Purchaser Indemnified
Parties pursuant to Section 10.1 or Section 10.2 with respect to any Purchased
Asset as to which no specific value is ascribed for purposes of calculating the
Cash Portion or Note Portion of the Purchase Price. Purchaser Indemnified
Parties' sole recourse for indemnification pursuant to Section 10.1 and Section
10.2 shall be limited solely to a right of offset by way of a reduction against
the remaining amounts to be paid to Seller under tranche A and tranche C of the
Note Portion (and not tranche B) of the Purchase Price; provided, however, that
in no event shall tranche C of the Note Portion of the Purchase Price be subject
to offset pursuant to this Section 10.3 at any time prior to the complete
satisfaction and discharge (whether as a result of repayment pursuant to Section
2.3 or reduction by offset pursuant to this Section 10.3 or any combination
thereof) of tranche A of the Note Portion of the Purchase Price; provided
further, that in no event shall amounts previously paid to Seller in respect of
tranche A and/or tranche C of the Note Portion be subject to or eligible for any
offset pursuant to this Section 10.3. In no event shall Seller be liable for
Damages suffered or incurred by Purchaser Indemnified Parties to the extent that
the aggregate amount thereof exceeds the sum of the remaining amounts to be paid
to Seller under tranche A and tranche C of the Note Portion of the Purchase
Price. Further, in no event shall Purchaser Indemnified Parties be entitled to
any right of offset pursuant to this Section 10.3 for Damages resulting from,
arising out of, based on or relating to any breach of any representation or
warranty made by Seller or an Affiliate of Seller in, or any failure to perform
duly and punctually any covenant, agreement or undertaking on the part of Seller
or an Affiliate of Seller contained in, any Seller Related Documents with
respect to the sale of any Canadian information technologies equipment leasing
assets by Seller (or an Affiliate of Seller) to Purchaser (or an Affiliate of
Purchaser).
10.4 Indemnification by Purchaser. Purchaser shall indemnify and hold harmless
Seller and its directors, officers, employees and agents (collectively, "Seller
Indemnified Parties") from and against any and all Damages suffered or incurred
by any of them resulting from, arising out of, based on or relating to (i) any
breach of any representation or warranty made by Purchaser in this Agreement;
(ii) any failure to perform duly and punctually any covenant, agreement or
undertaking on the part of Purchaser contained in this Agreement; (iii) any
breach of a representation or warranty included in any certificate, schedule or
other agreement, instrument or document, in each case delivered or to be
delivered by Purchaser to the Seller pursuant to the terms of this Agreement
(collectively, the "Purchaser Related Documents"); (iv) any offer to, and
subsequent employment of, any employee of Seller; or (v) offset to tranche C of
the Note Portion of the Purchase Prior at any time prior to the complete
satisfaction and discharge of tranche A of the Note Portion of the Purchase
Price. For purposes of this 10.4, a breach of a representation or warranty
contained in this Agreement or any Purchaser Related Document shall be deemed to
exist either if such representation or warranty is actually inaccurate or
breached, if such representation or warranty would have been breached or been
inaccurate if such representation or warranty had not contained any limitation
or qualification as to materiality, material adverse effect or knowledge, or if
such representation or warranty would have been breached or been inaccurate if
disclosures with respect to such representation or warranty had not been made in
the disclosure schedules (if any) delivered by Purchaser to Seller in connection
with the execution of this Agreement, it being the intention of the parties
hereto that the Seller Indemnified Parties shall be indemnified and held
harmless from and against any and all Damages suffered or incurred by any of
them resulting from, arising out of, based on or relating to the failure of any
such representation, warranty, certificate, schedule or other agreement,
instrument or document to be true and correct in any respect, determined in each
case without regard to any qualification as to materiality, material adverse
effect or knowledge set forth with respect thereto or any disclosures contained
in the disclosure schedules (if any) delivered by Purchaser to Seller in
connection with the execution of this Agreement.
10.5 Additional Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless all Seller Indemnified Parties from and against any and all Damages
suffered or incurred by any of them resulting from, arising out of, based on or
relating to:
(a) the Purchased Assets or the ownership, operation, servicing, lease or use
thereof, or any action taken with respect thereto after the Closing, by
Purchaser or any Affiliate of Purchaser, other than with respect to any matter,
circumstance Damage or event which is the subject of, or gives rise to, an
indemnification, payment or similar obligation of Seller pursuant to this
Agreement; provided, however, that in no event shall Purchaser indemnify or hold
harmless the Seller Indemnified Parties from and against any Damages suffered or
incurred by any of them resulting from, arising out of, based on or relating to
the use by Seller as licensee (or any sublicensee of Seller) of the Marks except
to the extent such use is the result of the specific written instruction of
Purchaser; or
(b) the Assumed Liabilities.
10.6 Indemnification Procedure. For the purposes of administering the
indemnification provisions of this Article X, the following procedures shall
apply from and after the Closing Date:
(a) An indemnified party shall notify the Indemnitor of any Indemnification
Event arising from an action or proceeding by a third party against such
Indemnitor in writing within 15 days following the receipt by any officer,
director, manager or member of the indemnified party of notice of the
commencement of such action or proceeding or within 30 days of the assertion of
any claim against such indemnified party giving rise to indemnity pursuant to
this Article X (any 15 or 30-day notification requirement shall begin to run, in
the case of a claim which is amended so as to give rise to an amended
Indemnification Event, from the first day such claim is amended to include any
claim which is an Indemnification Event hereunder). Such notice shall describe
in reasonable detail the basis of such Indemnification Event. Notwithstanding
anything to the contrary, the failure to give notice in a timely fashion shall
not result in a waiver of any right to indemnification hereunder except to the
extent that the Indemnitor's ability to defend against the event with respect to
which indemnification is sought is adversely affected by the failure of the
indemnified party to give notice in a timely fashion.
(b) The Indemnitor shall be entitled (but not obligated) to assume the defense
or settlement of any such action or proceeding, or to participate in any
negotiations or proceedings to settle or otherwise eliminate any claim, if it
shall provide the indemnified parties a written acknowledgement of its liability
for the indemnity against Damages relating to such claim. If the Indemnitor
assumes any such defense or settlement or any such negotiations, it shall pursue
such defense, settlement or negotiations in good faith. If the Indemnitor fails
to elect in writing within 30 days of the notification referred to above to
assume the defense, the indemnified party may engage counsel to defend, settle
or otherwise dispose of such action or proceeding, which counsel shall be
reasonably satisfactory to the Indemnitor; provided, however, that the
indemnified party shall not settle or compromise any such action, proceeding or
claim without the prior written consent or agreement of the Indemnitor (which
consent shall not be unreasonably withheld or delayed).
(c) In cases where the Indemnitor has assumed the defense or settlement with
respect to an Indemnification Event, the Indemnitor shall be entitled to assume
the defense or settlement thereof with counsel of its own choosing; provided,
however, that: (A) the indemnified party (and its counsel) shall be entitled to
continue to participate at its own cost in any such action or proceeding or in
any negotiations or proceedings to settle or otherwise eliminate any claim for
which indemnification is being sought; (B) the Indemnitor shall not be entitled
to settle or compromise any such action, proceeding or claim without the consent
or agreement of the indemnified party (which consent will not be unreasonably
withheld or delayed); provided, further, that if and only if such consent is
withheld and the settlement or compromise involves only the payment of monetary
damages (as to which the Indemnitor has established to the indemnified party, in
the indemnified party's reasonable discretion, that such Indemnitor is capable
of funding) and provides an unconditional release of the indemnified person, the
Indemnitor's liability shall be limited to the amount for which the Indemnitor
agreed with the claimant to settle and the Indemnitor shall remain responsible
for its costs and attorneys' fees to the date such settlement was rejected by
the indemnified party and the indemnified party shall be responsible for the
attorneys' fees and disbursements in respect of such claim thereafter; and (C)
after written notice by the Indemnitor to the indemnified party (as provided
above) of its election to assume control of the defense of any claim, the
Indemnitor shall not be liable to such indemnified party hereunder for any
attorneys' fees and disbursements subsequently incurred by such indemnified
party in connection therewith (except as provided below).
(d) Any claim for indemnification hereunder that does not arise out of a
third-party claim shall be asserted by the Purchaser Indemnified Party by
delivering written notice thereof to the Indemnitor promptly after the Purchaser
Indemnified Party becomes aware of the basis for such claim. Such written notice
shall contain (i) a reasonably detailed description of the facts and
circumstances giving rise to such claim for indemnification, (ii) the basis for
such claim for indemnification pursuant to this Article X and (iii) the amount
and the type and nature of Damages suffered or incurred by such Purchaser
Indemnified Party. If the Indemnitor does not object to such written notice
within 60 days after actual receipt of such written notice, Indemnitor shall
have no further right to contest the validity of such indemnification claim and
Purchaser may, following the expiration of such 60 day period, exercise a right
of offset in accordance with the terms of Section 10.3 hereof for the amount of
Damages to which a Purchaser Indemnified Party is entitled pursuant to this
Article X not to exceed the amount set forth in such written notice. At
Indemnitor's request, the Purchaser Indemnified Party shall provide Indemnitor
any information reasonably requested by Indemnitor with respect to any claim for
indemnification pursuant to this Section 10.6(d) and shall further provide
Indemnitor and its counsel with access at all reasonable times during regular
business hours and upon reasonable notice to personnel and the books and records
of such Purchaser Indemnified Party for such purpose.
10.7 Survival of Representations and Warranties. The representations and
warranties made by either Purchaser or Seller hereunder shall survive the
consummation of the transactions contemplated hereby until the Payment
Termination Date.
ARTICLE XI
GENERAL
11.1 Lock Box Reconciliation. From and after the Effective Date, all sums
received pursuant to a lockbox account identified in Schedule 1.11 (a "Lockbox
Account") shall be applied in the following manner:
(a) Any sums received pursuant to any Financing Contract constituting a
Purchased Asset shall be applied in the manner described in Section 2.3 of this
Agreement.
(b) Notwithstanding subsection (a) above, any sums received in respect of
property, ad valorem and other similar Taxes paid by Seller, but not included in
Accounts Receivables in the Final Purchase Price Statement, shall be payable to
Seller. All such amounts shall not be considered Monthly Cash and shall be
remitted to Seller as soon as reasonably practical, but in any case, not later
than 10 days after receipt under a Lockbox Account.
(c) Any sums received in respect of an Excluded Asset shall be payable to
Seller. All such sums received shall not be considered Monthly Cash and shall be
remitted as soon as reasonably practical, but in any case, not later than 10
days after receipt under a Lockbox Account.
(d) Any sums received which are not readily identifiable as receipts
("Unidentified Receipts") in respect of either the Purchased Assets or the
Excluded Assets shall be retained under the Lockbox Account, subject to the
terms of this subsection (d). All Unidentified Receipts shall be reported in the
applicable Monthly Statement but shall not be considered Monthly Cash. The
parties hereto agree to use good faith efforts to identify the account to which
any Unidentified Receipts relate. If, within 30 days of the date a Monthly
Statement is delivered to Seller, Seller shall deliver written documentation
evidencing its right to receive any Unidentified Receipts set forth in such
Monthly Statement, such amount shall not be considered Monthly Cash and shall be
remitted to Seller as soon as reasonably practical thereafter; otherwise, the
Unidentified Receipts shall be deemed Monthly Cash and applied in the manner
provided in Section 2.3 of this Agreement. If, prior to the Payment Termination
Date, Seller shall deliver written documentation (which may be in the form of a
letter certified as true and correct by an officer of Seller) substantiating its
right to receive any Unidentified Receipts previously applied pursuant to
Section 2.3, Purchaser shall remit such amount to Seller as soon as reasonably
practical thereafter.
(e) As part of each Monthly Statement, Purchaser shall also provide a list of
all Unidentified Receipts that previously were applied in the manner provided in
Section 2.3 of this Agreement pursuant to Section 11.1(d) and that have not been
specifically associated with either Purchased Assets or Excluded Assets.
11.2 Amendments. This Agreement may only be amended, modified, superseded or
canceled and any of the terms, covenants, representations, warranties or
conditions hereof may be waived only by an instrument in writing signed by each
of the parties hereto or, in the case of a waiver, by or on behalf of the party
waiving compliance.
11.3 Integrated Contract. This Agreement and the exhibits and schedules hereto,
and any written amendments to this Agreement satisfying the requirements of
Section 11.2 hereof (i) constitute the entire agreement among Seller and
Purchaser with respect to the subject matter hereof or thereof, and (ii)
supersede and replace all correspondence, understandings and communications
between the parties hereto with respect to the transactions contemplated by this
Agreement.
11.4 Governing Law. This Agreement and the legal relations between the parties
hereto arising thereunder shall be governed by and construed in accordance with
the laws of the State of
New York.
11.5 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if sent by registered mail or certified
mail, postage prepaid, by overnight courier service, or by telecopy or other
written form of electronic communication:
If to Seller, to: Comdisco, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 847.518.5440
Attention: General Counsel
with a copy to: Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 312.407.0411
Attention: L. ▇▇▇▇▇ ▇▇▇▇▇ III
and if to Purchaser, to: Bay4 Capital Partners, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 727.216.4001
Attention: General Counsel
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
5300 Wachovia Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 305.415.3001
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
or to such other address as shall be furnished in writing by Purchaser or
Seller, as the case may be, to the other, and any such notice or communication
shall be deemed to have been given as of the date so mailed, dispatched or
transmitted (except that a notice of change of address shall not be deemed to
have been given until received by the addressees).
11.6 No Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder may be assigned by either of the parties hereto (whether
by operation of law or otherwise) without the prior written consent (which
consent shall not be unreasonably withheld or delayed) of the other party
hereto; provided, however, that Purchaser may assign its rights, but not its
obligations, hereunder to any Person in connection with (A) any securitization
or assignment of the Financing Contracts or (B) any other transfer or sale of
any of the Purchased Assets; provided further, however, that all right, title
and interest of Seller in, to and under the Promissory Notes and the right to
receive amounts payable to Seller in accordance with Section 6.12 hereof (but
not including any of Seller's rights to information of Purchaser with respect to
the Promissory Notes or otherwise pursuant to Section 6.20) shall be freely
assignable by Seller without the consent, written or otherwise, of Purchaser.
Notwithstanding the foregoing, no assignment otherwise permitted hereunder
shall, without the written consent of Seller, relieve Purchaser from any of its
liabilities hereunder.
11.7 Headings. The descriptive headings of the several Articles and Sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
11.8 Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when such counterparts have been signed by each party hereto and
delivered to the other party hereto.
11.9 Severability. If at any time subsequent to the date hereof, any provision
of this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or unenforceability of such provision shall have no effect
upon and shall not impair the enforceability of any other provision of this
Agreement.
11.10 Binding Effect. This Agreement and the covenants, terms and conditions set
forth herein shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
11.11 Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO
THIS AGREEMENT.
11.12 No Third-Party Beneficiary. Except with respect to Hired Employees
pursuant to Section 6.13, this Agreement is not intended and shall not be
construed to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
11.13 Conveyancing Documents. No provision contained in any conveyancing
document delivered pursuant to this Agreement shall affect in any manner
whatsoever any of the indemnification provisions contained herein.
11.14 Expenses. Except as otherwise specifically set forth in this Agreement,
Seller and Purchaser will each be responsible for the payment of their own
respective costs and expenses incurred in connection with the negotiations
leading up to and the performance of their respective obligations pursuant to
this Agreement.
11.15 Currency. All of the dollar amounts mentioned in this Agreement or in the
schedules or exhibits annexed hereto shall be in United States funds.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its officers or representatives
thereunto duly authorized, as of the date first above written.
BAY4 CAPITAL PARTNERS, LLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: President and CEO
COMDISCO, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: CEO and President