EXHIBIT 10.16
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ASSET PURCHASE AGREEMENT
(HEALTHCARE)
among
GENERAL ELECTRIC CAPITAL CORPORATION,
Comdisco, Inc.
and
COMDISCO HEALTHCARE GROUP, INC.
Dated as of April 2, 2002
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................................1
1.1 Definitions.......................................................................1
ARTICLE II PURCHASE OF ASSETS........................................................................19
2.1 Purchased Assets.................................................................19
2.2 The Purchase Price...............................................................20
2.3 Initial Payment..................................................................21
2.4 Settlement Payments..............................................................21
2.5 Prorations.......................................................................21
2.6 Tax Escrow.......................................................................22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER..................................................22
3.1 Organization and Good Standing...................................................22
3.2 Corporate Authority..............................................................23
3.3 No Conflicts.....................................................................23
3.4 Consents.........................................................................23
3.5 No Violations of Law.............................................................24
3.6 Financial Statements; Reports....................................................24
3.7 Absence of Certain Changes.......................................................25
3.8 [Intentionally Omitted.].........................................................26
3.9 Taxes............................................................................26
3.10 [Intentionally Omitted.].........................................................29
3.11 [Intentionally Omitted.].........................................................29
3.12 Purchased Other Contracts........................................................29
3.13 Litigation and Liabilities.......................................................30
3.14 [Intentionally Omitted.].........................................................30
3.15 [Intentionally Omitted.].........................................................30
3.16 Brokers' or Finders' Fees, etc...................................................30
3.17 Conduct of Business..............................................................30
3.18 Purchased Financing Contracts....................................................31
3.19 Portfolio Property...............................................................32
3.20 Environmental Matters............................................................33
3.21 Transactions With State and Local Governments....................................33
3.22 [Intentionally Omitted.].........................................................34
3.23 [Intentionally Omitted.].........................................................34
3.24 [Intentionally Omitted.].........................................................34
3.25 [Intentionally Omitted.].........................................................34
3.26 Purchased Discounted Financing Agreements........................................34
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................34
4.1 Organization and Good Standing...................................................34
4.2 Corporate Authority..............................................................35
4.3 No Conflicts.....................................................................35
4.4 Consents.........................................................................35
4.5 Brokers' or Finders' Fees, etc...................................................35
4.6 Financing........................................................................36
ARTICLE V CONDUCT AND TRANSACTIONS PRIOR TO CLOSING; COVENANTS; INDEMNITIES.........................36
5.1 Investigations; Certain Covenants................................................36
5.2 Pending or Threatened Litigation.................................................42
5.3 Tax Matters/Allocation of Purchase Price.........................................42
5.4 Indemnifications, Assumptions of Liability and Related Matters...................44
5.5 Preparation of Closing Date Schedule of Assets Acquired and
Liabilities Assumed; Adjusted Closing Date Schedule of Assets
Acquired and Liabilities Assumed; Special Procedures Report of
Assets Acquired and Liabilities Assumed; and Purchase Price
Certificate......................................................................55
5.6 Insurance; Risk of Loss..........................................................58
5.7 Further Assurances...............................................................58
5.8 Payment of Broker's or Finder's Fees.............................................59
5.9 Supplements to Schedules; Post-Signing Information...............................59
5.10 [Intentionally Omitted.].........................................................60
5.11 [Intentionally Omitted.].........................................................60
5.12 Certain Bankruptcy Matters.......................................................60
5.13 Tax Payments.....................................................................60
5.14 Confirmations....................................................................61
5.15 [Intentionally Omitted.].........................................................61
5.16 [Intentionally Omitted.].........................................................61
5.17 [Intentionally Omitted.].........................................................61
5.18 [Intentionally Omitted.].........................................................61
5.19 Schedule of Credit Enhancements..................................................61
5.20 [Intentionally Omitted.].........................................................61
5.21 [Intentionally Omitted.].........................................................61
5.22 Original Master Leases...........................................................62
5.23 Purchased Discounted Financing Agreements........................................62
5.24 Closing Date Portfolio Information...............................................62
5.25 Administrative Claims............................................................62
ARTICLE VI CONDITIONS TO CLOSING; ABANDONMENT OF THE TRANSACTION.....................................62
6.1 The Closing......................................................................62
6.2 Conditions to Purchaser's Obligations to Close...................................63
6.3 Conditions to Sellers' Obligations to Close......................................66
ARTICLE VII TERMINATION...............................................................................68
7.1 Termination......................................................................68
7.2 Procedure and Effect of Termination..............................................68
ARTICLE VIII GENERAL...................................................................................69
8.1 Amendments.......................................................................69
8.2 Integrated Contract..............................................................69
8.3 Governing Law....................................................................69
8.4 Notices..........................................................................69
8.5 No Assignment....................................................................70
8.6 Headings.........................................................................70
8.7 Counterparts.....................................................................70
8.8 Announcements....................................................................71
8.9 Severability.....................................................................71
8.10 Binding Effect...................................................................71
8.11 Waiver of Jury Trial.............................................................71
8.12 No Third Party Beneficiary.......................................................71
8.13 Conveyancing Documents...........................................................72
8.14 Expenses.........................................................................72
8.15 Currency.........................................................................72
ASSET PURCHASE AGREEMENT
(Healthcare)
This is an Agreement dated as of April 2, 2002 among General
Electric Capital Corporation, a Delaware corporation ("Purchaser"), among
Comdisco, Inc., a Delaware corporation ("Comdisco") and Comdisco Healthcare
Group, Inc., a Delaware corporation ("CHG", each of CHG and Comdisco, a "Seller"
and collectively, the "Sellers"), each of which agrees as follows:
Recitals
WHEREAS, the Sellers and certain of their affiliates, have
filed voluntary petitions (the "Petitions") for relief commencing cases (the
"Chapter 11 Cases") under Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") in the United States Bankruptcy Court for the Northern
District of Illinois (the "Bankruptcy Court");
WHEREAS, Purchaser and the Purchaser Affiliates (as
hereinafter defined) desire to purchase and acquire, and the Sellers desire to
sell, convey, assign and transfer to Purchaser and the Purchaser Affiliates, the
Purchased Assets (as hereinafter defined), and Purchaser and the Purchaser
Affiliates are willing to assume, and the Sellers desire to assign and delegate
to Purchaser and the Purchaser Affiliates, the Assumed Liabilities (as
hereinafter defined), all in the manner and subject to the terms and conditions
set forth herein and in accordance with Sections 105, 363 and 365 of the
Bankruptcy Code, where applicable.
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein and intending to be legally bound, Purchaser and the
Sellers do hereby agree as follows:
Agreement
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement shall have the
following meanings:
1.1 Definitions.
"Accounting Principles" shall mean the accounting principles
(including accounting methods, practices and procedures) set forth on Schedule
1.1A. When the accounting principles (including accounting methods, practices
and procedures) set forth on Schedule 1.1A do not specifically address a
particular matter necessary to prepare the Closing Date Schedule of Assets
Acquired and Liabilities Assumed, then the accounting principles (including
accounting methods, practices and procedures) set forth on Schedule 1.1A shall
be supplemented in accordance with United States generally accepted accounting
principles applied consistently with the past practices and procedures of the
applicable Seller in connection with the Purchased Assets or the Assumed
Liabilities (as applicable), but only to the extent necessary to address such
matter. To the extent that an accounting principle, method, practice or
procedure set forth on Schedule 1.1A is not in accordance with generally
accepted accounting principles as applicable in the United States, such
accounting principle, method, practice or procedure set forth on Schedule 1.1A
shall be disregarded for purposes of preparing the Closing Date Schedule of
Assets Acquired and Liabilities Assumed but shall be treated as a Special
Adjustment.
"Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed" shall mean a schedule of assets acquired and liabilities
assumed, prepared by adjusting the Closing Date Schedule of Assets Acquired and
Liabilities Assumed to the Special Adjustments, which shall be described in
reasonable detail therein.
"Advance Payment" shall mean, in respect of any Purchased
Financing Contract, any security deposit or other payment that was received as
collateral or security, or any advance rent received that would be reflected as
"deferred income" on a balance sheet of each Seller prepared in accordance with
the Accounting Principles by any Seller on or prior to the Closing Date in
respect of such Purchased Financing Contract.
"Affiliate" shall mean, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person. With respect
to Purchaser, Affiliate shall include, without limitation, General Electric
Capital Services, Inc. and any Person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, General Electric Capital Services, Inc.
"Agreement" shall mean this Asset Purchase Agreement,
including the Schedules attached hereto and made a part hereof, as the same may
be amended from time to time in accordance with the provisions hereof.
"Allocation Statement" shall have the meaning given to such
term in Section 5.3(a).
"Approval Order" shall have the meaning given to such term in
Section 5.12(a).
"Assumed Liabilities" shall mean, solely with respect to each
Seller, (i) all liabilities and obligations relating to Credit Enhancements,
excluding any Credit Enhancements that are Advance Payments, required to be paid
or performed from and after the applicable Closing, (ii) all obligations under
the Purchased Other Contracts arising from and after the applicable Closing,
(iii) all obligations under the Purchased Discounted Financing Agreements
required to be paid or performed from and after the applicable Closing and any
such obligations required to be paid prior to the applicable Closing, to the
extent such obligation relates to a rental payment that is past due with respect
to a Purchased Financing Contract, except obligations arising out of a breach by
any Seller thereunder, (iv) all accounts payable related to the Purchased
Financing Contracts required to be paid from and after the applicable Closing,
and (v) all obligations (including, without limitation, residual sharing
obligations) under the Purchased Financing Contract required to be paid or
performed from and after the applicable Closing. For the avoidance of doubt,
Assumed Liabilities shall not include any other obligations or liabilities of
any Seller (including, without limitation, any cure amounts payable to other
parties to the agreements, contracts, and commitments referenced in this
definition of Assumed Liabilities).
"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 (i) to the ownership, use, lease or operation of any of the Purchased
Assets or (ii) to permit each Seller to own or lease the Purchased Assets.
"Bankruptcy Code" shall have the meaning given to such term in
the Recitals of this Agreement.
"Bankruptcy Court" shall have the meaning given to such term
in the Recitals of this Agreement.
"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).
"Bundled Contracts" shall mean Financing Contracts that
contain service, warranty or similar obligations (except remarketing
obligations) of any Seller or any of their Affiliates.
"Business Days" 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.
"Chapter 11 Cases" shall have the meaning given to such term
in the Recitals of this Agreement.
"Closing" shall mean 11:59 p.m. local time in Chicago,
Illinois, on the day on which the Sellers transfer the Purchased Assets to
Purchaser or any of the Purchaser Affiliates pursuant to the terms of this
Agreement, and "day of the Closing" and "Closing Date" shall be deemed to mean
such day and for the avoidance of doubt the term Closing shall refer to the
initial Closing and any subsequent Closings permitted pursuant to the terms of
this Agreement. The initial Closing Date is expected to occur on May 31, 2002 or
such later date as shall be fixed by agreement among the parties hereto. The
Second Closing is expected to occur on June 30, 2002 or such later date as shall
be fixed by agreement among the parties hereto.
"Closing Date Portfolio Tape" shall mean the computer disk,
computer tape or other computer format delivered to Purchaser pursuant to
Section 5.24 setting forth, as of the Closing Date, the Portfolio Information
set forth in the same level of detail for each Purchased Financing Contract, and
with the same column headings, as is set forth in the December Portfolio Tape.
"Closing Date Schedule of Assets Acquired and Liabilities
Assumed" shall mean the schedule of assets acquired and liabilities assumed
reflecting the Purchased Assets and the Assumed Liabilities, and the respective
amounts thereof, in each case determined as of the Closing Date, and the notes
and schedules, if any, thereto, and which shall be prepared in accordance with
the provisions of Section 5.5.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
"CPR" shall have the meaning given to such term in Section
5.4(q)(ii).
"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, in each case pledged, assigned, mortgaged, charged, hypothecated,
made, delivered or transferred as security for the performance of any obligation
under or with respect to any Purchased Financing Contract.
"Cut-Off Date" shall mean with respect to any Financing
Contract, the later of either the date the Approval Order is entered and the
date on which Purchaser has completed its review of the Lease File related to
any Financing Contract and has irrevocably notified Comdisco in writing that
Purchaser has committed to purchase such Financing Contract and that such
Financing Contract shall be deemed a Purchased Financing Contract, provided,
however, that in each case, prior to the Closing Date, Purchaser receives, to
the extent required, all requisite consents and novations set forth in clause
(E) of the definition of "Purchased Financing Contracts" and Lease Confirmations
set forth in clause (H)(y) of the definition of "Purchased Financing Contracts";
provided, further, (i) in the event such notice is given with respect to a
Financing Contract with an Obligor that has multiple Financing Contracts with
the Sellers, such notice shall be given with respect to all such Financing
Contracts; and (ii) that such notice shall not be deemed a waiver of any
conditions set forth in Section 6.2 (except that conditions set forth in Section
6.2(d)(i)(1) shall be deemed satisfied with respect to a particular Purchased
Financing Contract on the applicable Cut-Off Date).
"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. With respect to Purchaser or any of
its Affiliates, Damages shall also be deemed to include, without limitation, any
and all losses resulting from the failure of Purchaser or any of its Affiliates
to receive any amounts payable with respect to any Purchased Financing Contract.
For the avoidance of doubt, nothing in this definition shall be deemed to
entitle Purchaser, any Purchaser Affiliate or any other Purchaser Indemnified
Party or any Seller or any other Seller Indemnified Party to recover any amounts
that it is not otherwise entitled to under Section 5.4.
"December Portfolio Tape" shall mean the computer disk,
computer tape or other computer format delivered to Purchaser prior to the date
hereof containing certain information as of December 31, 2001 (it being agreed
and understood that any amounts reflected on the December Portfolio Tape that
are denominated in a currency other than U.S. dollars have been deemed to be
converted into U.S. dollars as of December 31, 2001 in accordance with SFAS No.
52).
"Delinquency Contracts" shall mean all Financing Contracts for
healthcare equipment (i) under which any interim or periodic rental payment due
thereunder for equipment, including, without limitation, any deferred
maintenance costs and prepaid sales tax, is outstanding 60 days or more after
the first date on which payment of such amount was required pursuant to the
terms of such Financing Contract or (ii) under which there exists a default
(other than a payment default) of the Obligor or any provider of a Credit
Enhancement relating thereto that would give the lessor a right of acceleration
thereunder.
"Discounted Financing Agreements" shall mean all agreements,
instruments, certificates and other documents, which are listed on Schedule 1.1O
to the extent related to the Purchased Financing Contracts, relating to the
issuance of non-recourse loans to any Seller, as borrower, whether or not the
borrower grants, pursuant thereto, a security interest in the Financing Contract
or underlying Portfolio Property related to the specified Financing Contract
owned by such borrower.
"Disposition Agreement" shall mean any agreement, contract or
other arrangement (other than this Agreement) pursuant to which any interest in
any Purchased Financing Contract or any payment due under any Purchased
Financing Contract or related Credit Enhancement or with respect to any
Portfolio Property has been sold, used as collateral, transferred to or
otherwise disposed of to any Person or Persons by any Seller.
"Dispute" shall have the meaning given to such term in Section
5.4(q).
"Document" shall mean any book, record, file, paper, computer
tape, computer disk, microfilm, information storage device of any type and any
other document.
"Documentation" shall mean forms of leases, sales and
conditional sales contracts, notes, security agreements, guarantees, financing
statements, purchase agreements, purchase orders and other documents or
instruments necessary for, or used in connection with, the conduct of the
business of any Seller.
"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 Actions,
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 each
Seller, all Authorizations required by Environmental Laws to use the Purchased
Assets.
"Environmental Report" shall have the meaning given to such
term in Section 3.20.
"Estimated Closing Date" shall mean the date mutually agreed
upon by the Sellers and Purchaser immediately following the hearing seeking
entry of the Approval Order, which date the Sellers and Purchaser reasonably
believe to be the date on which the Closing shall occur.
"Estimated Payment" shall mean a dollar amount equal to the
estimated Purchase Price mutually agreed to between Purchaser and the Sellers
calculated as of the end of the month preceding, the Closing Date using the
methodology set forth in Section 2.2 and adjusted for estimated Purchased
Financing Contract payments, estimated early terminations of the Purchased
Financing Contracts, and estimated Line Adds for the Purchased Financing
Contracts after the end of such month through the Closing.
"Excluded Assets" shall mean all assets of any Seller other
than those included in the definition of Purchased Assets. Excluded Assets shall
include, without limitation, (i) any interest in owned or leased real property,
(ii) equipment (other than equipment described in Section 2.1(a)(vii)); (iii)
any Intellectual Property of any Seller, (iv) any assets that would be reflected
on a balance sheet of any Seller prepared in accordance with the Accounting
Principles as "deferred commissions," (v) any assets that would be reflected on
a balance sheet of any Seller prepared in accordance with the Accounting
Principles as "deferred lease costs" or "deferred costs" except assets that
would be reflected on such balance sheet as (1) "deferred maintenance costs,"
(2) "prepaid sales tax", (3) "loan and lease balloon rentals and residuals"
listed or identified on Schedule 1.1B or (4) any other accounts to which
payments owed by an Obligor under a Purchased Financing Contract are associated,
(vi) cash associated with Advance Payments, (vii) all capital stock, partnership
interests, and other equity interests owned by any Seller, (viii) any assets
that would be reflected on a balance sheet of any Seller prepared in accordance
with the Accounting Principles as "ventures settled equity" or "income taxes",
(ix) all rights arising under contracts, arrangements or agreements to the
extent that such contracts, arrangements or agreements are Excluded Liabilities,
(x) [Intentionally Omitted], (xi) any contracts of insurance, except (A) the
rights of any Seller as an additional insured or loss payee on any insurance
contract of an Obligor under a Purchased Financing Contract, and (B) residual
value insurance covering Portfolio Property subject to any Purchased Financing
Contract, if any, (xii) any intercompany agreements, contracts or commitments,
including agreements in respect of intercompany indebtedness and including,
without limitation, those agreements, contracts, and commitments listed on
Schedule 1.1D, (xiii) any claim, right or cause of action arising under Sections
544 through 553, inclusive, of the Bankruptcy Code, (xiv) company seal, minute
books, charter documents, stock or equity record books of any Seller and such
other books and records as pertain to the organization, existence or
capitalization of such Seller as well as any other records or materials relating
to such Seller and not involving or related to any of the Purchased Assets or
Assumed Liabilities, (xv) any right that any Seller has with respect to Tax
refunds, claims for Tax refunds and Tax attributes, (xvi) any Portfolio Property
or Financing Contract that any Seller has sold, transferred, assigned or
otherwise disposed of or has entered into an agreement to sell, transfer, assign
or dispose in accordance with Section 5.1(e)(i) and (xvii) any Portfolio
Property or Financing Contract that any Seller has sold, transferred, assigned,
or otherwise disposed of or has entered into an agreement to sell, transfer,
assign or dispose in accordance with Section 5.1(e)(ii).
"Excluded Liabilities" shall mean any liability or obligation
(whether known or unknown, contingent or absolute, or arising before, on or
after the Closing Date) of any Seller other than the Assumed Liabilities.
Excluded Liabilities shall include, without limitation, (i) any Environmental
Costs and Liabilities arising from, related to or otherwise attributable to (A)
the operation by any Seller or any of its Affiliates or any predecessors thereof
of any real property owned, operated or leased by any Seller or any of its
Affiliates prior to the Closing Date, including, without limitation,
noncompliance with or liability under Environmental Laws and Remedial Action
obligations, (B) any Excluded Asset, or (C) the operations of any Seller or any
of its Affiliates after the Closing Date, (ii) any obligation under this
Agreement of any Seller, (iii) any rights or obligations under any agreements,
contracts, commitments or guaranties in respect of any indebtedness for borrowed
money other than the Purchased Discounted Financing Agreements, (iv) any
liability with respect to employees of any Seller, (v) any liability or
obligation of any Seller or any Affiliate thereof (or any predecessor thereto)
relating to Taxes (including with respect to the Purchased Assets or otherwise)
for all periods, or portions thereof, ending on or prior to the Closing Date (or
the Second Closing in the case of Purchased Financing Contracts acquired at the
Second Closing), and (vi) any liability of any Seller related to any Excluded
Asset.
"Exemption Certificate" shall mean a form or statement from an
Obligor indicating that the transaction covered by a Financing Contract is
exempt from any sales, use or similar Tax.
"Final Order" shall mean an order or judgment the operation or
effect of which is not stayed, and as to which order or judgment (or any
revision, modification or amendment thereof), the time to appeal or seek review
or rehearing has expired, and as to which no appeal or petition for review or
motion for rehearing or reargument has been taken or made.
"Final Tax Determination" shall mean (i)(A) a decision,
judgment, decree or other order by any court of competent jurisdiction, which
decision, judgment, decree or other order has become final after all allowable
appeals by either party to the action have been exhausted or the time for filing
such appeals has expired or, (B) in any case where judicial review shall at the
time be unavailable, a decision, judgment, decree or other order of an
administrative official or agency of competent jurisdiction, which decision,
judgment, decree or other order has become final after all allowable appeals by
either party to the action have been exhausted or the time for filing such
appeals has expired; (ii) a closing agreement entered into pursuant to Section
7121 of the Code or any other settlement agreement entered into in connection
with an administrative or judicial proceeding which settlement agreement is
final and binding on the parties thereto; (iii) the expiration of the time for
instituting a claim for refund, or if such a claim was filed, the expiration of
the time for instituting suit with respect thereto; or (iv) the expiration of
the time for instituting suit with respect to the claimed deficiency.
"Financial Statements" shall mean (i) the audited consolidated
balance sheets of the Sellers as of September 30, 2000 and September 30, 2001
and the related consolidated statements of income, stockholders' equity and cash
flows of the Sellers for the fiscal years ended September 30, 2000 and September
30, 2001 and (ii) the items listed on Schedule 1.1M to this Agreement.
"Financing Contract" shall mean any contract, including any
schedule or amendment thereto or assignment, assumption, renewal or novation
thereof (and delivery, acceptance or installation certificates, landlord or
mortgagee waivers, intercreditor or subordination agreements, incumbency
certificates, purchase orders, purchase order assignments, and sale and
leaseback agreements, each relating thereto), in the form of (i) a lease of or
rental agreement with respect to Property, (ii) a sale contract (including an
installment sale contract or conditional sale agreement) arising out of the sale
of Property, or (iii) a secured financing of Property, and in each case, which
with respect thereto: (A) any Seller is the lessor, seller, secured party or
obligee (whether initially or as an assignee), or (B) is between an Obligor, on
the one hand, and a lessor, seller, obligee, secured party or assignee of any of
the foregoing, on the other hand, and (1) which would be a Financing Contract if
any Seller were the lessor, seller, obligee, secured party or assignee of any of
the foregoing thereunder and (2) with respect to which any Seller is an assignee
of the revenues or claims with respect thereto.
"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.
"Healthcare Segment" shall mean the segment of any Seller's
equipment solutions business known as the "Healthcare" segment, which primarily
engages in the business of leasing healthcare equipment within the United
States.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended.
"Indemnifiable Loss" shall have the meaning given to such term
in Section 5.4(p).
"Indemnification Event" shall mean any event, action,
proceeding or claim for which a Person is entitled to indemnification under this
Agreement.
"Indemnification Rate" as of any date shall mean an interest
rate equal to the LIBOR Rate on such date, plus 50 basis points, compounded
annually.
"Indemnitor" shall mean the indemnifying person in the case of
any obligation to indemnify pursuant to the terms of this Agreement.
"Indemnity Payment" shall have the meaning given to such term
in Section 5.4(p).
"Information" shall have the meaning given to such term in
Section 5.1(g).
"Initial Payment" shall mean an amount equal to 90% of the
Estimated Payment.
"Intellectual Property" shall mean any customer lists, vendor
lists, patents, patent applications, trade names, trademarks, service marks,
trade dress, logos, domain names, symbols slogans and other source identifiers,
together with the goodwill associated therewith, including trademark
registrations and applications, service ▇▇▇▇ registrations and applications,
trade secrets, know-how, data and other confidential or proprietary technical,
business and other information, copyrights, computer software, including source
codes and documentation related thereto, copyright registrations and
applications, and rights to any of the foregoing under license.
"IRS" shall mean the United States Internal Revenue Service.
"Lease Confirmation" shall have the meaning given to such term
in Section 5.14.
"Lease File" shall have the meaning given to such term in
Section 5.1(a).
"LIBOR Rate" on any date shall mean the rate of interest
identified as the three month "London Interbank Offered Rate (LIBOR)" in the
"Money Rate" section of the Wall Street Journal published on such date (or, if
such publication is not published on such date, as published on the most
recently preceding date).
"Line Adds" shall mean an addition of equipment to a Financing
Contract that results in an increase in the periodic rental payment due
thereunder without extending the term of the Financing Contract.
"Material Adverse Effect" shall mean a material adverse effect
on the ownership, collection, enforcement, value or administration of the
Purchased Assets taken as a whole; provided, however, a Material Adverse Effect
shall not include (i) the filing of the Chapter 11 Cases, (ii) any event,
condition or matter that is generally applicable to the industries and markets
in which any Seller operates with respect to the Purchased Assets or (iii) any
event, condition or matter that relates to interest rate fluctuations.
"Material Contract" shall mean any agreement, contract or
commitment (other than a Financing Contract) which calls for the payment by or
on behalf of any Seller of $500,000 or more, or the delivery by any Seller of
goods or services with a fair market value of $500,000 or more, or provides for
any Seller to receive any payments of, or any Property (other than Portfolio
Property) with a fair market value of, $500,000 or more, or which otherwise is
material to the Purchased Assets.
"Modification" shall have the meaning given to such term in
Section 5.1(e)(i)(A).
"Net Book Value" with regard to any Purchased Financing
Contract shall be determined as follows:
(i) for each such Purchased Financing Contract treated in
accordance with the Accounting Principles as a finance lease for U.S. accounting
purposes, Net Book Value of such Purchased Financing Contract at any date shall
be equal to (A) the sum of (1) gross receivables with respect to such Purchased
Financing Contract at such date and (2) the Residual, if any, at such date less
(B) unearned income with respect to such Purchased Financing Contract at such
date;
(ii) for each Purchased Financing Contract treated in
accordance with the Accounting Principles as a loan or conditional sales
contract for U.S. accounting purposes, Net Book Value of such Purchased
Financing Contract at any date shall be equal to (A) gross receivables with
respect to such Purchased Financing Contract at such date less (B) unearned
income with respect to such Purchased Financing Contract at such date; and
(iii) for each Purchased Financing Contract treated in
accordance with the Accounting Principles as an operating lease for U.S.
accounting purposes, Net Book Value of such Purchased Financing Contract at any
date shall be equal to (A) the Original Equipment Cost of the Portfolio Property
subject to such Purchased Financing Contract at such date less (B) accumulated
depreciation with respect to such Purchased Financing Contract at such date.
In each case above, gross receivables, unearned income and
accumulated depreciation shall be determined in accordance with the Accounting
Principles.
With regard to all Purchased Assets other than Purchased
Financing Contracts, "Net Book Value" shall mean the net book value of such
Purchased Assets determined in accordance with the Accounting Principles.
"Non-Assumable Claim" shall mean any claim, action or
proceeding (i) involving any Governmental Entity, (ii) seeking injunctive
relief, (iii) involving a class action, (iv) involving allegations of criminal
activities or (v) involving allegations of violations of any domestic, foreign
or state law governing the extension of credit or of RICO, any domestic or
foreign federal or state securities laws or regulations, any domestic or foreign
federal or state antitrust laws or any laws pertaining to usury, installment or
conditional sales and financing, truth in lending, equal opportunity, credit
reporting or debt collection.
"Non-Terminable or Modifiable Financing Contracts" shall have
the meaning given to such term in Section 5.1(d)(K).
"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 Portfolio Property, the original cost of such Portfolio Property as recorded
in the books and records of any Seller in accordance with the Accounting
Principles.
"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 Portfolio Property subject to such lien,
(iii) any Encumbrance pursuant to the Purchased Discounted Financing Agreements,
(iv) any Encumbrance on any Portfolio 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 Portfolio Property subject to such
Encumbrance, or (v) any Encumbrance resulting from the terms of the applicable
Financing Contract that is reflected on the books and records of any Seller in
accordance with the Accounting Principles.
"Person" shall mean any individual, partnership, corporation,
trust, limited liability company, unincorporated organization, government or
department or agency thereof and any other entity.
"Petitions" shall have the meaning given to such term in the
Recitals of this Agreement.
"Portfolio Information" shall mean, with respect to any
Purchased Financing Contract, the following information (which information is
required to appear, and which appears, on the December Portfolio Tape, and,
which will appear, on the Closing Date Portfolio Tape): (i) the name of the
Obligor under such Purchased Financing Contract, (ii) the account schedule
number of such Purchased Financing Contract, (iii) a description of each item of
Portfolio Property relating to such Purchased Financing Contract, (iv) the
Original Equipment Cost for each item of Portfolio Property relating to such
Purchased Financing Contract, which is referred to by any Seller as the
"inception cost", (v) the stated contractual end of term thereof, (vi) the date
of the last scheduled payment under such Purchased Financing Contract, (vii) all
scheduled payments due under such Purchased 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 applicable Seller, (x) the "leasing
corp code" of such Purchased Financing Contract, (xi) the billing frequency of
such Purchased Financing Contract, (xii) the Residual amount of such Purchased
Financing Contract, (xiii) the country in which the Portfolio Property of such
Financing Contract is currently located, (xiv) the net present value of such
Purchased Financing Contract, which is referred to by the applicable Seller as
the "net book value", and (xv) whether such Purchased Financing Contract is a
month-to-month Financing Contract. Portfolio Information shall also include the
following information which is not required to appear on the December Portfolio
Tape, and which will not be required to appear on the Closing Date Portfolio
Tape: (A) the amount of any Advance Payment thereunder, (B) to the extent
available, the tax basis, remaining tax depreciation term and tax depreciation
method elected by the applicable Seller in the case of any Purchased Financing
Contract under which any Seller is treated as the owner of the Portfolio
Property subject to or governed by such Purchased Financing Contract, for Tax
purposes (other than Federal income Tax) relevant for any Seller, (C) any type
of service, and payment terms for such service, required to be performed in
connection with such Purchased Financing Contract, (D) whether such Purchased
Financing Contract is subject to a Discounted Financing Agreement, and, if so,
the lender for such financing, the interest rate for such financing, and whether
or not the applicable lender is currently located in the United States, and (E)
a delinquency report in the form attached as Schedule 1.1I.
"Portfolio Property" shall mean Property with respect to which
any Seller is the lessor, seller or secured party, as the case may be, pursuant
to the terms of a Purchased Financing Contract (whether initially or as an
assignee) or Property which is intended to be the subject of a Purchased
Financing Contract.
"Proceedings" shall have the meaning given to such term in
Section 3.13.
"Property" shall mean all property and assets of whatsoever
nature including but not limited to personal property, whether tangible or
intangible, and whether leased or owned, and claims, rights and choses in
action.
"Public Sector Financing Contract" shall mean any Purchased
Financing Contract (including any amendment thereto or any renewal, assignment,
assumption or novation thereof) to which any Governmental Entity is a party.
"Purchase Price" shall mean the amount to be paid by Purchaser
or a Purchaser Affiliate to any Seller in accordance with Section 2.2.
"Purchase Price Certificate" shall have the meaning given to
such term in Section 5.5(a)(iv).
"Purchased Assets" shall have the meaning given to such term
in Section 2.1.
"Purchased Discounted Financing Agreements" shall mean the
Discounted Financing Agreements which are secured by any Purchased Financing
Contracts.
"Purchased Financing Contracts" shall mean all Financing
Contracts listed on the December Portfolio Tape for the Healthcare Segment
(including Financing Contracts securing Discounted Financing Agreements),
together with (x) any Portfolio Property owned in connection with such Financing
Contracts, (y) all rights of any Seller with respect to Portfolio Property and
(z) all payments due or to become due thereunder (including, without limitation,
all accounts receivable attributable thereto), in each case to the extent that
both the Obligor is domiciled, and the Portfolio Property relating to such
Financing Contracts are located, in the United States; provided, however, that
Purchased Financing Contracts shall not include any Financing Contract (or the
Portfolio Property related thereto) (A) [Intentionally Omitted] (B) with any
Obligor, or a provider of a Credit Enhancement, that is subject to a United
States or foreign bankruptcy, insolvency or similar proceeding, (C)
[Intentionally Omitted], (D) with any Obligor, or a provider of a Credit
Enhancement, that is in litigation (whether as a plaintiff or defendant) with
any Seller, (E) that is a Required Consent Financing Contract of any Seller for
which the requisite third party consent, and novation, if required, has not been
obtained prior to the Closing so as to permit the applicable Seller to assign
such Required Consent Financing Contract to Purchaser or the applicable
Purchaser Affiliate, (F) that is a Delinquency Contract, (G) [Intentionally
Omitted], (H) as to which Purchaser has (x) not received at the Closing the
original master lease, applicable schedules and Credit Enhancements thereto
(excluding, for purposes of receiving such original master leases, any Financing
Contract which is the subject of a Purchased Discounted Financing Agreement,
copies of which, certified as true, correct and complete by an officer of the
applicable Seller, may be provided in lieu of original master leases and for
purposes of receiving all other original master leases, if original master
leases are not in possession of Sellers, copies of master leases, certified as
true, correct and complete by the applicable Obligor may be provided in lieu of
original master leases; provided, however, that such exclusion shall not apply
to the original schedules and Credit Enhancement related to such master lease),
(y) solely with respect to the Financing Contracts with a Top 30 Obligor and
subject to the provisions of Section 5.14, not received at the Closing a Lease
Confirmation or a facsimile copy thereof from such Obligor (confirming the
validity of information set forth on such Lease Confirmation), or (z) reasonably
determined, applying the standard with respect to a given jurisdiction that a
prudent purchaser would customarily apply, that the representations and
warranties contained in this Agreement with respect to such Financing Contract
are not true and correct in all respects and as to which Purchaser has provided
written notice at or prior to Closing; (I) [Intentionally Omitted]; (J)
[Intentionally Omitted] or (K) that are Bundled Contracts; provided, however,
that if there are multiple Financing Contracts (without giving effect to clauses
(B), (D), (E), (F), (H) or (K)), with an Obligor and its Affiliates and one or
more, but not all, of such Financing Contracts are Financing Contracts that fall
into the category of Financing Contracts listed in clauses (B), (D), (E), (F),
(H) or (K) ("Rejectable Contracts"), Purchaser shall have the option of either
(x) purchasing all of the Financing Contracts (including the Rejectable
Contracts) with such Obligor and its Affiliates or (y) excluding all of the
Financing Contracts (including the Financing Contracts that are not Rejectable
Contracts) with such Obligor and its Affiliate from the Purchased Assets.
"Purchased Other Contracts" shall have the meaning given to
such term in Section 2.1.
"Purchaser" shall have the meaning given to such term in the
Recitals.
"Purchaser Affiliates" means any one or more Affiliates of
Purchaser that Purchaser may permit (i) to purchase all or certain Purchased
Assets, (ii) to assume all or certain Assumed Liabilities or (iii) to exercise
any of Purchaser's rights under Section 8.5, subject to satisfaction of the
requirements of Section 365 of the Bankruptcy Code including the provision of
adequate assurances for future performance; provided, that Purchaser shall not
be relieved of its obligations under this Agreement; provided, further, that
nothing in this Agreement shall require Purchaser, on its own behalf in lieu of
a Purchaser Affiliate, to assume any Discounted Financing Agreements or purchase
any Portfolio Property or Financing Contracts securing any Discounted Financing
Agreements.
"Purchaser Indemnified Parties" shall have the meaning given
to such term in Section 5.4(a).
"Purchaser Related Documents" shall have the meaning given to
such term in Section 5.4(h).
"Purchaser's Accountants" shall mean Price WaterhouseCoopers
or any public accounting firm with nationally recognized auditing expertise, as
selected by Purchaser.
"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.
"Repurchase Amount" with respect to any Purchased Financing
Contract, shall mean an amount equal to 96% of the original Net Book Value of
such Purchased Financing Contract or such other Purchased Asset as of the
applicable Closing Date, plus an amount equal to the interest on such Net Book
Value at the rate of ten percent per annum from the applicable Closing Date,
through and including the date of transfer thereof pursuant to Section
5.4(b)(iii), minus all proceeds received by Purchaser or any Purchaser Affiliate
with respect to such Purchased Financing Contract or such other Purchased Asset
from the applicable Closing Date through and including the date of such
transfer.
"Required Consent Financing Contract" shall mean any Financing
Contract which requires consent (by contract or applicable law), or novation, of
the Obligor or another third party to be transferred by any Seller to Purchaser
or any Purchaser Affiliate; provided, however, that Required Consent Financing
Contracts shall not include (i) Financing Contracts that are excluded from the
definition of Purchased Financing Contracts for a reason other than the fact
that they would be Required Consent Financing Contracts and (ii) Financing
Contracts which may be transferred pursuant to this Agreement without such
consent under Section 365 of the Bankruptcy Code as provided for in the Approval
Order.
"Residual" shall mean, with respect to any item of Portfolio
Property, its estimated value upon expiration of the Financing Contract to which
it is subject, as determined by the applicable Seller, established on its books
and records at the inception of such Financing Contract and referred to by such
Sellers on such books and records as "NBV at Term."
"Sale" shall have the meaning given to such term in Section
5.1(e)(i)(A).
"Second Closing" shall have the meaning given to such term in
Section 6.1(b).
"Selected Accounting Firm" shall mean a public accounting firm
with nationally recognized auditing expertise, which shall be selected by
Purchaser's Accountants and Seller's Accountants to resolve a dispute arising
pursuant to Section 5.3 or 5.5 hereof.
"Seller" shall have the meaning given to such term in the
Recitals.
"Seller Claims" shall have the meaning given to such term in
Section 5.6(a).
"Seller Indemnified Parties" shall have the meaning given to
such term in Section 5.4(h).
"Seller Related Documents" shall have the meaning given to
such term in Section 5.4(a).
"Seller's Accountants" shall mean KPMG LLP or any public
accounting firm with nationally recognized auditing expertise, as selected by
Comdisco.
"Seller's Insurance Policies" shall have the meaning given to
such term in Section 5.6(a).
"Seller's Knowledge" or any similar expression shall mean the
knowledge which any individual set forth on Schedule 1.1G has or should
reasonably be expected to have in the prudent exercise of that individual's
duties, after inquiry.
"Settlement Date" shall mean the fifth Business Day following
the date of delivery of the final Special Procedures Report of Assets Acquired
and Liabilities Assumed and final Purchase Price Certificate as provided in
Section 5.5(a)(vi).
"Settlement Interest" shall mean the amount of accrued
interest on the Settlement Payment calculated at the Settlement Rate, as in
effect on the Settlement Date for the period from the Closing Date to, but not
including, the date upon which the Settlement Payment is made (calculated on the
basis of the actual number of days elapsed in a year of 365 or 366 days, as the
case may be).
"Settlement Payment" shall mean an amount, which shall be
expressed as a positive amount, equal to the difference between (i) the Initial
Payment and (ii) the Purchase Price.
"Settlement Rate" shall mean, on any date, the "Target"
federal funds rate reported in the "Money Rates" Section of the eastern edition
of The Wall Street Journal published for such date. In the event The Wall Street
Journal ceases publication of the federal funds rate or fails on any particular
date to publish the federal funds rate, the federal funds rate shall refer to
the rate for the last transaction in overnight federal funds arranged prior to
such date by The Chase Manhattan Bank (National Association).
"Special Adjustments" shall mean such adjustments to the
Closing Date Schedule of Assets Acquired and Liabilities Assumed as shall be
necessary to (i) reflect all assets or liabilities, which, as of the Closing
Date, were assets or liabilities (as the case may be) of any Seller of a type
properly to have been reflected on the Closing Date Schedule of Assets Acquired
and Liabilities Assumed, but which were not in fact reflected on the Closing
Date Schedule of Assets Acquired and Liabilities Assumed, including any asset or
liability which was not reflected on the Closing Date Schedule of Assets
Acquired and Liabilities Assumed because such asset or liability was not deemed
to be material, (ii) remove any asset or liability which should not have been
reflected on the Closing Date Schedule of Assets Acquired and Liabilities
Assumed but was in fact reflected thereon irrespective of whether such asset or
liability is deemed not to be material, (iii) give effect to each accounting
principle, method, practice or procedure that is to be treated as a Special
Adjustment pursuant to the last sentence of the definition of "Accounting
Principles," and (iv) eliminate any Excluded Assets and any Excluded Liabilities
reflected on the Closing Date Schedule of Assets Acquired and Liabilities
Assumed. In addition, the Special Adjustments shall include the following (a)
the Net Book Value of Financing Contracts with associated Advance Payments which
are flagged as "Z" in the "Billing Frequency" column of the December Portfolio
Tape, shall be equal to the net present value of the Residual and the discount
rate used in determining the net present value is 12%, and (b) the Net Book
Value of Financing Contracts with associated Advance Payments which are not
flagged as "Z" in the "Billing Frequency" column of the December Portfolio Tape,
shall be equal to the Net Book Value minus the amount of any "deferred income"
with respect to such Financing Contract.
"Special Procedures Report of Assets Acquired and Liabilities
Assumed" shall mean the Closing Date Schedule of Assets Acquired and Liabilities
Assumed and the Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed, as to which the special procedures have been performed in
the manner provided for in Section 5.5(a)(iii).
"Special Representations" shall mean the representations or
warranties in Sections 3.6(c), 3.9, 3.18, 3.19 and 3.20.
"State and Local Governmental Entity" shall mean a state,
province, territory or possession of the United States or a foreign country, or
fully constituted political subdivision or agency of any of the foregoing, or
the District of Columbia.
"Subsidiary" shall mean a Person (other than an individual) of
which another Person owns or controls directly or indirectly more than 50% of
the stock, capital or other equity interests or more than 50% of the voting
power providing the holders thereof, ordinarily and generally in the absence of
contingencies, the right to vote for the election of directors, managers or
Persons having similar rights and duties.
"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 Benefit" shall have the meaning given to such term in
Section 5.4(p).
"Tax-Exempt Public Sector Financing Contract" shall mean a
Public Sector Financing Contract in respect of which the interest income
received by any Seller is treated on its books and records as exempt from
federal income tax pursuant to Section 103 of the Code or any predecessor
thereof.
"Tax Liability" shall have the meaning given to such term in
Section 5.4(p).
"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 any Seller or their Affiliates.
"Third Party Beneficiary" shall have the meaning given to such
term in Section 8.12.
"Top 30 Obligor" shall mean any Obligor listed on Schedule
5.14(2).
"Transfer Agreement" shall mean the transfer agreement or
other transfer documents between each Seller and Purchaser or a Purchaser
Affiliate, as applicable, in the form mutually agreed to between Purchaser and
Sellers for the transfer of Purchased Assets between any Seller and Purchaser
Affiliate, containing such provisions as may be required or necessary under
applicable law to transfer such Purchased Assets.
"Transfer Taxes" shall have the meaning given such term in
Section 5.3(c).
"Transitional Services Agreement" shall mean an agreement
among Purchaser, Sellers and each Purchaser Affiliate, whereby Sellers provide
certain services to Purchaser and each Purchaser Affiliate from and after the
Closing with respect to the Purchased Assets, substantially in the form attached
hereto as Exhibit B.
ARTICLE II
PURCHASE OF ASSETS
2.1 Purchased Assets.
(a) Purchased Assets. Upon the terms and subject to the
conditions of this Agreement, at the Closing, Purchaser, or any Purchaser
Affiliate, shall purchase from the Sellers, and each Seller shall sell, assign,
transfer and convey to Purchaser, or any Purchaser Affiliate, good, valid and
marketable title (free and clear of all Encumbrances other than Permitted
Encumbrances) to the following in existence on the Closing Date (subject to
Sections 5.1(j) and 6.2(c), the "Purchased Assets"):
(i) all Purchased Financing Contracts;
(ii) all Credit Enhancements (except cash associated with
Advance Payments) related to the Purchased Financing Contracts;
(iii) (x) (A) all alliance agreements, service provider
agreements, consulting agreements, purchase orders, residual value
insurance covering Portfolio Property or Purchased Financing Contracts,
if any, and other agreements, contracts or commitments, in each case in
this clause (x) (A) listed on Schedule 2.1(a)(iii) or (B) listed in the
supplemental Schedules delivered by the Sellers pursuant to Section 5.9
and identified by Purchaser in writing as a Purchased Other Contract,
in each case among any Seller and an Obligor of, or otherwise related
to, a Purchased Financing Contract, and (y) all remarketing agreements
from the Healthcare Segment with an Obligor of any Purchased Financing
Contract if Purchaser or a Purchaser Affiliate acquires such of the
Financing Contracts of such Obligor pursuant to the terms of this
Agreement that, in the aggregate, have a Net Book Value which is
greater than one-half of the Net Book Value of all of the Financing
Contracts in the Healthcare Segment of such Obligor (each agreement and
commitment referred to in clauses (x) and (y) above being referred to
as a "Purchased Other Contract") and all accounts receivable
attributable thereto;
(iv) to the extent transferable, all rights under
manufacturers' and vendors' warranties relating to the Purchased Assets
and all similar rights against third parties relating to the Purchased
Assets;
(v) all Authorizations, to the extent transferable, related to
the Purchased Assets;
(vi) copies of all the books and records of each Seller
relating to any of the Purchased Assets and Assumed Liabilities,
including, without limitation, all books and records relating to the
purchase of materials, supplies and services, all financial, accounting
and operational matters relating to any of the Purchased Assets and
Assumed Liabilities, all customer and vendor lists relating to the
Purchased Assets and Assumed Liabilities and all files and documents
(including credit information) relating to customers and vendors
relating to any of the Purchased Assets and Assumed Liabilities, and
all manuals, handbooks and Documents relating to policies and/or
procedures related to any of the Purchased Assets or Assumed
Liabilities;
(vii) equipment and inventory of the Healthcare Segment
consisting of healthcare equipment as to which any Seller either (A)
holds for sale or lease or (B) has a right to possession (x) as a
result of the expiration of the term or early termination of a related
Financing Contract, or (y) as a result of the exercise by any Seller of
its rights under a related Financing Contract following a default by
the Obligor thereunder; and
(viii) any assets related to the Purchased Financing Contract
that would be reflected on a balance sheet of any Seller prepared in
accordance with generally accepted accounting principles as "deferred
maintenance costs" or "prepaid sales taxes" and any other accounts to
which payments owed by an Obligor under a Purchased Financing Contract
are associated.
(b) Excluded Assets. No Seller shall sell, assign, transfer or
convey to Purchaser or any Purchaser Affiliate, nor shall Purchaser or any
Purchaser Affiliate purchase any Seller's right, title or interest in and to any
Excluded Assets.
(c) Liabilities Assumed by Purchaser. Upon the terms and
subject to the conditions of this Agreement, effective as of the Closing,
Purchaser or any Purchaser Affiliate shall assume and be obligated to pay when
due, perform, or discharge only the Assumed Liabilities.
(d) Excluded Liabilities. Neither Purchaser nor any Purchaser
Affiliate shall assume or otherwise become liable for any Excluded Liabilities.
2.2 The Purchase Price. The aggregate purchase price to be
paid by Purchaser and Purchaser Affiliates (provided that Purchaser shall not be
relieved of its obligation to pay the Purchase Price hereunder to the extent any
Purchaser Affiliate fails to pay its allocable portion of the Purchase Price
pursuant to this Agreement) for the Purchased Assets (the "Purchase Price")
shall be an amount equal to, in the case of clauses (a) and (b) below, as
reflected on the Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed, (a) 96% of the Net Book Value of all Purchased Assets,
including, without limitation, (i) the Purchased Financing Contracts assigned to
Purchaser or any Purchaser Affiliate by any Seller, (ii) the Purchased Assets
described in Section 2.1(a)(vii), and (iii) assets related to the Purchased
Financing Contracts that would be reflected on a balance sheet of any Seller
prepared in accordance with the Accounting Principles as (1) "deferred
maintenance costs," (2) "prepaid sales taxes," (3) "loan and lease balloon
rentals and residuals" listed or identified on Schedule 1.1B and (4) any other
account to which payments owed by an Obligor under a Purchased Financing
Contract are associated, minus (b) 100% of the Assumed Liabilities.
2.3 Initial Payment. Subject to Section 2.6 hereof, at the
Closing, Purchaser or a Purchaser Affiliate shall pay to the Sellers an
aggregate amount equal to the Initial Payment, by wire transfer or transfers of
immediately available funds to accounts designated to Purchaser in writing by
Comdisco prior to the Closing Date. Prior to Closing, Purchaser and Sellers
shall mutually agree upon an allocation of the Purchase Price for the Purchased
Assets between the Sellers, and the amount payable at the Closing pursuant to
this Section 2.3 and pursuant to Sections 2.4, 2.5 and 2.6 shall be allocated
and paid accordingly by Purchaser and the Purchaser Affiliates, respectively;
provided, however, that Purchaser shall not be relieved of its obligation to pay
the Purchase Price hereunder to the extent any Purchaser Affiliate fails to pay
its allocable portion of the Purchase Price pursuant hereto. Each Seller shall
be paid a portion of the aggregate Purchase Price equal to the Purchase Price of
the Purchased Assets transferred by such Seller.
2.4 Settlement Payments. On the Settlement Date, the following
amounts shall be paid, by wire transfer of immediately available funds to an
account designated in writing by the recipient thereof to the other party prior
to the Settlement Date, as follows:
(i) if the Purchase Price exceeds the Initial Payment,
Purchaser shall pay, or cause any Purchaser Affiliate to pay, to
Sellers an aggregate amount equal to the sum of (A) the Settlement
Payment, and (B) the Settlement Interest; or
(ii) if the Initial Payment exceeds the Purchase Price, the
Sellers shall pay to Purchaser or Purchaser Affiliate, as applicable,
an aggregate amount equal to the sum of (A) the Settlement Payment, and
(B) the Settlement Interest.
2.5 Prorations. Each Seller shall bear all property and ad
valorem tax liability with respect to the Purchased Assets if the lien or
assessment date (the date on which the liability becomes fixed or assignable to
the Purchased Assets) arises on or prior to the Closing Date (or the date of the
Second Closing with respect to Purchased Financing Contracts transferred at the
Second Closing) irrespective of the reporting and payment dates of such Taxes.
Each Seller shall be responsible for all other Taxes as levied by any foreign,
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) on or prior to the Closing Date (or the date of the Second Closing with
respect to Purchased Financing Contracts transferred at the Second Closing), and
Purchaser shall be responsible for all such Taxes with respect to the ownership,
use or leasing of the Purchased Assets for all periods (or portions thereof)
after the Closing Date (or the date of the Second Closing with respect to
Purchased Financing Contracts transferred at the Second Closing). All payments
to be made by Sellers in accordance with this Section 2.5 shall be made, to the
extent then determinable, at the Closing (or the date of the Second Closing with
respect to Purchased Financing Contracts transferred at the Second Closing) with
such payments deposited into escrow until due, or, to the extent not
determinable as of the Closing (or the date of the Second Closing with respect
to Purchased Financing Contracts transferred at the Second Closing), promptly
following the determination thereof, with such payments deposited into escrow
pursuant to Section 2.6 until due. Purchaser shall have the right of review and
approval of each Seller's property Tax Returns and assessments and the right to
contest any assessment for which Purchaser may be adversely affected. Each
Seller shall cooperate with Purchaser to advance any contest.
2.6 Tax Escrow. The amount of any personal property, ad
valorem, sales, use, transfer, recording or similar Tax liability, or any other
Taxes required to be withheld by any taxing authority, relating to the Purchased
Assets for which the Sellers are responsible pursuant to Section 2.5 and Section
5.3(c) and which are unpaid or not yet due and payable as of the Closing (or the
date of the Second Closing with respect to Purchased Financing Contracts
transferred at the Second Closing) shall be estimated in good faith by the
mutual agreement of Comdisco and Purchaser and a portion of the Purchase Price
which is no less than such amount shall be put by the Sellers into escrow at
Closing (or at the Second Closing with respect to Purchased Financing Contracts
transferred at the Second Closing) and such amount shall be held and used for
the sole purpose of discharging and releasing any such Taxes with respect to the
Purchased Assets pursuant to Section 5.13; provided, however that if Purchaser
and the Sellers have not agreed on the portion of the Purchase Price to be
deposited into escrow pursuant to this Section 2.6 at least 20 days prior to the
Closing (or 20 days prior to the Second Closing with respect to the Purchased
Financing Contracts to be transferred at the Second Closing), such dispute will
be resolved by KPMG LLP or any other public accounting firm with nationally
accepted auditing experience as mutually agreed upon by Purchaser and Comdisco.
The escrow to be established pursuant to this Section 2.6 shall be established
pursuant to, an escrow agreement mutually acceptable to Purchaser and Comdisco
or such other arrangement as may be mutually agreed by Purchaser and Comdisco
prior to the Closing. The escrow shall not include any unpaid Taxes which are
reimbursable or payable by an Obligor under any Purchased Financing Contract
except to the extent that the Sellers previously collected such Taxes from the
Obligor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller hereby makes as of the date of this Agreement, and
at the Closing (on a several basis, and solely to the extent applicable to such
Seller), the following representations and warranties to Purchaser:
3.1 Organization and Good Standing. Each Seller (i) is duly
organized, validly existing and in good standing (or its equivalent) under the
laws of its state, province and country of incorporation or organization, (ii)
has the corporate or other applicable power to own and lease the Purchased
Assets owned or leased by it and to carry on its business as now being conducted
and (iii) is duly qualified or authorized to conduct business and is in good
standing (or its equivalent) as a foreign corporation in all jurisdictions in
which the character or location of the Purchased Assets owned or leased by it
requires such qualification or authorization, except, in the case of clause
(iii), where the failure to be so qualified or authorized has not and would not
have a Material Adverse Effect.
3.2 Corporate Authority. Each Seller has all requisite
corporate or other applicable power and authority to execute and deliver, and to
perform its obligations under, this Agreement, the Transitional Services
Agreement and the other documents to be executed and delivered by such Seller
party thereto pursuant hereto or thereto. Each of this Agreement, the Ancillary
Agreements and the other documents to be executed and delivered by a 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 such Seller and holders of voting interests of such member 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 such Seller
party thereto and is (or, with respect to the documents to be executed and
delivered after the date hereof, will be at the Closing), subject to the entry
of the Approval Order, the valid and binding obligation of such Seller party
thereto, enforceable against such Seller in accordance with its terms.
(a) Notwithstanding anything to the contrary contained herein,
no provision of this Agreement is binding upon any Seller unless and until this
Agreement is approved by the Bankruptcy Court.
3.3 No Conflicts. Except as set forth on Schedule 3.3, neither
the execution and delivery by any Seller of this Agreement, the Transitional
Services Agreement or any other document to be executed and delivered by any
Seller in connection herewith or therewith nor compliance by any Seller with the
terms and provisions hereof or thereof nor the consummation by any 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 equivalent document) or by-laws (or equivalent document
including articles of association) of any 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 any 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 any Seller is a party or
to which any Seller or any of its Properties is subject and which is related to
the Purchased Assets or the Assumed Liabilities (including, without limitation,
any agreement, contract or commitment included in the Purchased Assets), except
in the case of clause (ii) above, only as it relates to any law, statute or
regulation, and clause (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 acceleration in the time for performance of
any obligation of any 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.
3.4 Consents. Except as set forth on Schedule 3.4 and other
than the filing of notifications pursuant to the HSR Act and any corresponding
anti-trust, competition or similar legislation in any other jurisdictions, and
the Approval Order issued or to be issued by the Bankruptcy Court, no material
notices, reports or other filings are required to be made by any Seller with,
nor are any material consents, licenses, permits, Authorizations or approvals
required to be obtained by any Seller from, (i) any Governmental Entity or (ii)
except where the failure to make such notices, reports or other filings or
obtain such consents or approvals would not have a Material Adverse Effect, any
other Person in connection with the execution and delivery by any Seller of this
Agreement or the consummation by any Seller of the transactions contemplated
hereby.
3.5 No Violations of Law. Except as set forth on Schedule 3.5
or as would not be likely to have a Material Adverse Effect, (i) each Seller
owns and operates, and at all times has owned and operated, each of the
Purchased Assets and acted with respect to the Assumed Liabilities in compliance
with all 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 Purchased Financing
Contract or Credit Enhancement in accordance with the terms thereof has resulted
or will result in the violation of any laws enacted by or regulations
promulgated or issued by any Governmental Entity, (iii) each 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 laws enacted by or regulations promulgated or issued by any
Governmental Entity and all such Authorizations, and (iv) no Seller has received
any written 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. Except as set forth on Schedule 3.5, no Seller is subject to any
judgment, writ, decree, injunction or order of any federal, state or local court
(domestic or foreign) or Governmental Entity relating to the acquisition,
collection, administration or enforcement of any Purchased Financing Contract or
Credit Enhancement or the foreclosure, acquisition or disposition of any
Portfolio Property or, in each case, any transactions or activities incidental
thereto.
3.6 Financial Statements; Reports.
(a) True and complete copies of the Financial Statements are
set forth on Schedule 3.6(a). The Financial Statements were prepared from the
books and records of each Seller, and the balance sheets included in the
Financial Statements fairly present, in all material respects, the financial
position, as it relates to the Purchased Assets and the Assumed Liabilities, of
such Seller as of the dates thereof, and the statements of income and cash flows
of such Seller included in the Financial Statements fairly present, in all
material respects, the results of income and cash flows, as the case may be, as
they relate to the Purchased Assets and Assumed Liabilities, of such Seller for
the periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which will not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles applied on a basis consistent with the Accounting Principles, except
as may be noted therein or as set forth on Schedule 3.6(a) and except that
statutory financial statements are prepared in accordance with applicable
statutory accounting principles.
(b) Except in connection with debtor-in-possession financing,
no Seller has indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise, and whether due or to become due)
related to the Purchased Assets or Assumed Liabilities which are not reflected
or adequately reserved against on the applicable balance sheet dated as of
September 30, 2001 included in the Financial Statements other than such
indebtedness, obligations or liabilities as were incurred in the ordinary course
of business consistent with past practices since September 30, 2001 and which
either will be repaid or discharged prior to the Closing or reflected on the
Closing Date Schedule of Assets Acquired and Liabilities Assumed.
(c) Except as set forth on Schedule 3.6(c), all of the
Portfolio Information and other data set forth in the December Portfolio Tape
with regard to the Purchased Financing Contracts and each Purchased Discounted
Financing Agreement is true, correct, complete and accurate in all material
respects as of December 31, 2001. All of the Portfolio Information delivered to
Purchaser prior to, at or after Closing shall be true, correct, complete and
accurate in all material respects as of its date.
(d) With respect to each Purchased Financing Contract, the
Portfolio Information described in clause (xiv) of such definition with respect
to such Purchased Financing Contract that is set forth on the December Portfolio
Tape and the Closing Date Portfolio Tape is the Net Book Value of such Purchased
Financing Contract.
3.7 Absence of Certain Changes.
(a) Except as set forth on Schedule 3.7(a), since December 31,
2001, there has not occurred any effect, result, occurrence, event, fact, set of
facts or change that constitutes a Material Adverse Effect, or any development
or combination of developments of which, to Seller's Knowledge, is reasonably
likely to result in any Material Adverse Effect.
(b) Except as set forth on Schedule 3.7(b) or as permitted
pursuant to Section 5.1(e), since December 31, 2001, no Seller has in connection
with the Purchased Assets (i) made or committed to make any capital expenditures
(excluding the purchase of Portfolio Property in connection with the origination
or funding of a Purchased Financing Contract or otherwise in the ordinary course
of business) except for those not in excess of $500,000 per capital project,
(ii) waived or committed to waive any rights which could have a Material Adverse
Effect, (iii) directly or indirectly in any way extended or otherwise
restructured the payment schedule, payment terms or any other term or condition
of any Purchased Financing Contract, or made any advance, extension, novation,
modification or other accommodation to any Obligor or provider of a Credit
Enhancement thereunder (other than extensions of the time to pay an amount due
under a Purchased Financing Contract, modification or accommodation that were
granted in the ordinary course of business by such Seller consistent with its
past practices and that, with respect to extensions of time to pay an amount due
under a Purchased Financing Contract, did not extend the time for payment to 30
days or more after the first date on which payment of such amount was required
pursuant to the terms of such Financing Contract), (iv) suffered any damage,
destruction or casualty loss to any Purchased Assets, whether or not covered by
insurance, in excess of $100,000 in the case of any individual loss or $500,000
with respect to the aggregate of all such losses, (v) except pursuant to any
debtor-in-possession financing in the Chapter 11 Cases, permitted any
Encumbrance on any of the Purchased Assets other than Permitted Encumbrances, or
(vi) deviated from or changed in any material respect its Documentation except
for deviations or changes made in the ordinary course of business and consistent
with past practice.
3.8 [Intentionally Omitted.]
3.9 Taxes.
(a) Except as set forth on Schedule 3.9(a), each Seller (i)
has timely filed (or there has been timely filed on its behalf) with the
appropriate Governmental Entities all Tax Returns required to be filed, and all
such Tax Returns are true and correct in all material respects, and (ii) has
paid (or there has been paid on its behalf) all Taxes due and payable or claimed
or asserted by any Governmental Entity to be due from it or has provided for all
such Taxes on its books and records and in accordance with the Accounting
Principles, including without limitation in the Financial Statements. With
respect to any period for which Tax Returns have not yet been filed, or for
which Taxes are not yet due or owing, each Seller has made due and sufficient
current accruals for such Taxes on its books and records and in accordance with
the Accounting Principles, including without limitation the Financial
Statements.
(b) [Intentionally Omitted.]
(c) Except as set forth on Schedule 3.9(c), no written claim
has been made by a taxing authority in a jurisdiction where any Seller does not
file Tax Returns to the effect that such Seller is or may be subject to taxation
by that jurisdiction with respect to any Purchased Asset.
(d) Except as set forth on Schedule 3.9(d), no audit report
has been issued prior to the date of this Agreement (or otherwise with respect
to any audit or investigation in progress) relating to Taxes due from or with
respect to any Seller with respect to taxable years for which the statute of
limitations remains open or with respect to which Taxes are not yet paid. All
deficiencies asserted or assessments made as a result of any examinations by the
IRS or any other Governmental Entity of the Tax Returns of, or covering or
including any Seller, have been fully paid, and there are no other actions,
suits, investigations, audits or claims by any Governmental Entity in progress
relating to any Seller, nor has any Seller received any notice from any
Governmental Entity that it intends to conduct such an audit or investigation.
Except as set forth on Schedule 3.9(d), no issue has been raised by a
Governmental Entity (i) in any examination with respect to federal income Taxes
for Tax years of any Seller ended 1989 through 1999 which, by application of the
same or similar principles, could reasonably be expected to result in a proposed
deficiency for any subsequent taxable period or (ii) in any examination with
respect to Taxes other than federal income Taxes of any Seller which, by
application of the same or similar principles, could reasonably be expected to
result in a proposed deficiency of at least $500,000 for any subsequent taxable
period. Except as set forth on Schedule 3.9(d), no Seller is subject to any
private letter ruling of the IRS or comparable rulings or closing agreements of
other Governmental Entities.
(e) Except as set forth on Schedule 3.9(e), each Seller has
withheld and paid over to the appropriate Governmental Entity all material
amounts of Taxes required to be withheld in connection with any amounts paid or
owing to any employee, creditor, independent contractor or other third party.
(f) 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 set forth on Schedule 3.9(f) for Taxes that are being contested in
good faith and for which adequate reserves have been set aside.
(g) (i) Except as set forth on Schedule 3.9(g), no property
having an aggregate tax basis in excess of $5 million owned by any Seller that
is a United States corporation is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) "tax-exempt use property" within
the meaning of Section 168(h)(1) of the Code, (iii) "tax-exempt bond financed
property" within the meaning of Section 168(g) of the Code, (iv) subject to
Section 168(g)(1)(A) of the Code, or (v) "limited use property" (as the term is
used in Rev. Proc. 2001-28).
(h) No Purchased Asset is (i) a debt instrument, the interest
on which is, or purports to be, excludable, in whole or in part, from gross
income for federal income tax purposes, (ii) an interest in a taxable mortgage
pool within the meaning of Section 7701(i) of the Code, or (iii) an interest in
a partnership, trust or REMIC within the meaning of Section 7701(a) of the Code.
(i) Each partnership interest which is a Purchased Asset has
in effect a valid election pursuant to Section 754 of the Code, which election
will remain in effect for the taxable year of such partnership in which the
transactions contemplated by this Agreement occur.
(j) For federal income tax purposes, none of the allocations
of income, gain, loss or deductions in respect of any partnership interest which
is a Purchased Asset for the respective partnership taxable years in which the
transactions contemplated by this Agreement occur (or prior taxable years) are
(or were) required to be determined under Section 704(c) of the Code or the
principles thereof.
(k) 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.
(l) None of the Purchased Assets is a "United States real
property interest" within the meaning of Section 897(c)(i) of the Code.
(m) [Intentionally Omitted.]
(n) (i) The interest component of any payments required to be
made under any Tax-Exempt Public Sector Financing Contracts which are Purchased
Assets is specifically and separately stated in such Tax-Exempt Public Sector
Financing Contract, (ii) such interest is not includable in the gross income of
the recipient thereof for federal income tax purposes and (iii) all filings with
the IRS or other taxing authority or Governmental Entity as are necessary to
preserve the tax-exempt nature of such interest have been made, including but
not limited to Form 8038-G or Form 8038-GC.
(o) (i) Except as set forth on Schedule 3.9(o), the
classification of each Financing Contract which constitutes a Purchased Asset
reflected on the books and records of each Seller is consistent with the manner
in which such Financing Contract has been classified on such 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) no Seller has 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.
(p) No borrower on, co-lender under, or Person holding a
participation in a Purchased Asset that is a debt obligation is other than a
"United States person" as such term is defined in Section 7701(a)(30) of the
Code.
(q) 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 the Sellers are true
leases for federal income Tax purposes without regard to Section 7701(h) of the
Code.
(r) All of the Financing Contracts which are Purchased Assets
that contain terminal rental adjustment clauses are qualified motor vehicle
operating agreements within the meaning of Section 7701(h) of the Code.
(s) Each Seller has paid, or caused 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 Purchased Financing
Contracts and Portfolio Property subject thereto to the state or other
jurisdiction (or any political subdivision thereof) where required, arising out
of, pursuant to or in connection with the Financing Contracts.
(t) [Intentionally Omitted.]
(u) There has been a Final Tax Determination with respect to
each Seller's federal income Tax liability with respect to its taxable years
ended 1989 through 1995, and any deficiencies have been paid by such Seller in
full in cash (or by way of an offset against a refund otherwise owing to such
Seller).
(v) [Intentionally Omitted.]
(w) [Intentionally Omitted.]
(x) [Intentionally Omitted.]
(y) Each Seller has served written notice of its motion
seeking entry of the Auction Order (as defined in the Approval Order) on each
applicable taxing authority in each jurisdiction in which such Seller is subject
to Tax.
3.10 [Intentionally Omitted.]
3.11 [Intentionally Omitted.]
3.12 Purchased Other Contracts.
(a) Except as set forth on Schedule 3.12(a), no Seller is,
nor, to Seller's Knowledge, is any other party in material breach of or in
material default under any Purchased Other Contract and no event has occurred
which, with notice and/or lapse of time, would constitute a material default by
such Seller or any other party thereto under any such contracts or agreements.
No Seller has 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 Purchased
Other Contract in any material respect.
(b) Except as set forth on Schedule 3.12(b) or as permitted in
Section 5.1(d), as of the date hereof, no Seller is party to, bound by or
subject to any Material Contract, or to any other agreement, contract or
commitment of the following kinds related to the Purchased Assets: (i) any
agreement, contract or commitment to which any Seller is a party relating to the
disposition or acquisition of any material portion of the Purchased Assets, (ii)
any guarantee or indemnification by any Seller included in any of the Purchased
Other Contracts running to any Person which involves, individually or in the
aggregate, a contingent liability of such Seller of $500,000 or more, (iii) any
material agreement, contract or commitment providing for the collection,
servicing or administration of leases, loans, conditional sales agreements or
financial instruments of a type included in the Purchased Financing Contracts,
by any Seller on behalf of any other Person, (iv) any agreement, contract or
commitment providing for the collection, servicing or administration by any
Person of any Purchased Financing Contract, (v) any agreement, contract or
commitment by any Person to purchase Purchased Financing Contracts, or any
interests or participations therein, or any material agreement, contract or
commitment by any Seller to sell Purchased Financing Contracts, or any material
interests or participations therein, (vi) any agreement, contract or commitment
included in the Purchased Assets containing any covenant or provision limiting
the freedom of any Seller to engage in any line of business or compete with any
Person in any geographic area, (vii) any agreement, contract or commitment which
would, if performed in accordance with its terms, have a Material Adverse
Effect, or (viii) any commitment to do any of the foregoing. Each agreement,
contract or commitment set forth on Schedule 3.12(b) (except those that may be
referred to in clauses (i), (ii), (vi) and (vii) and, in respect of clauses (i),
(ii), (vi) and (vii), clause (viii)) is valid, binding and enforceable against
the parties thereto in accordance with its terms and is in full force and
effect.
3.13 Litigation and Liabilities. Except as set forth on
Schedule 3.13, there are no (i) civil, criminal or administrative actions,
suits, claims, hearings, investigations or proceedings pending (including, but
not limited to, any counterclaims and, collectively, "Proceedings") or, to
Seller's Knowledge, threatened, against any Seller relating to or affecting any
of the Purchased Assets or Assumed Liabilities or (ii) obligations or
liabilities, whether or not accrued, contingent or otherwise, or any other fact
or circumstance to Seller's Knowledge that forms a reasonable basis for any
claim against or obligation or liability of any Seller relating to or affecting
the Purchased Assets or Assumed Liabilities except in the case of clauses (i)
and (ii) as would not be likely to have, individually or in the aggregate, a
Material Adverse Effect. Since September 30, 2001, no Seller has 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 or any Purchaser Affiliate as a
result of the transactions contemplated by this Agreement, nor to Seller's
Knowledge does any valid basis for any such investigation exist.
3.14 [Intentionally Omitted.]
3.15 [Intentionally Omitted.]
3.16 Brokers' or Finders' Fees, etc. No Person acting on
behalf of any 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.
3.17 Conduct of Business.
(a) Since December 31, 2001, each Seller has with respect to
the Purchased Assets used its commercially reasonable efforts to preserve
substantially intact the business organizations of each Seller with each Person
having any business relationships with any Seller relating to the Purchased
Assets, except to the extent the discontinuance of such relationship would
likely not have a Material Adverse Effect.
(b) Except as set forth on Schedule 3.17(b), since December
31, 2001, or, if later, the date such assets and liabilities first became assets
or liabilities, as the case may be, of a Seller, (i) each Seller has owned,
operated and serviced the Purchased Assets and acted with respect to the Assumed
Liabilities only in the ordinary course consistent with past practices and has
not deviated from or changed in any respect its credit policy or collateral
eligibility standards in any material respect; and (ii) to the extent that any
Seller has approved credit applications with respect to Financing Contracts
entered into after December 31, 2001, but prior to the date of this Agreement,
such Seller has complied with standards of evaluating, originating, underwriting
and funding new business which are in all respects consistent with its past
practices.
3.18 Purchased Financing Contracts.
(a) Except as set forth on Schedule 3.18(a), each Purchased
Financing Contract and Credit Enhancement (i) is valid, binding and enforceable
by the Seller party thereto against the Obligor or provider of such Credit
Enhancement thereunder in accordance with its written 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 and usual course of
business of such Seller, consistent with its past practices.
(b) Except as set forth on Schedule 3.18(b), (i) each
Purchased Financing Contract and Credit Enhancement is, or as of the Closing
Date will be, 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 of such Credit
Enhancement under such Purchased Financing Contract in the case of a Purchased
Financing Contract or by the obligor thereunder in the case of a Credit
Enhancement, or any Person claiming under any such right; (ii) no Seller is in
breach of or default under any Purchased Financing Contract or Credit
Enhancement, no other party is in payment breach thereof or payment 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 any Seller or any
other party thereunder; (iii) no Obligor under any Purchased Financing Contract
(A) has acquired any Portfolio Property, any interest in any Portfolio Property
or the use of any Portfolio Property pursuant to such Purchased Finance Contract
for personal, family or household use or for agricultural purposes, or (B) is
required under any applicable law to withhold from payments on any such
Purchased Financing Contract any interest or other withholdings for the payment
of Taxes to any Governmental Entity; (iv) each Seller has in its possession a
fully executed original of any lease or note (and an executed original or a true
and correct copy of all other documents) comprising each Purchased Financing
Contract (except for Purchased Financing Contracts that are the subject of a
Discounting Financing Agreement, copies of which shall be delivered to Purchaser
at Closing) and Credit Enhancement and all other documents required by each
Seller's credit or investment approval with respect to each Purchased Financing
Contract; (v) no Purchased Financing Contract is terminable at the option of the
Obligor thereunder except to the extent that such Obligor is required to pay to
such Seller a termination fee in an amount which, together with the Residual and
any payments from date of termination equals at least the Net Book Value at such
time of such Purchased Financing Contract; (vi) each Seller has in its
possession documents sufficient to establish the Original Equipment Cost of all
Portfolio Property for purposes of determining personal property tax liability;
(vii) all payments pursuant to each Purchased Financing Contract are made
directly to the applicable Seller, except Purchased Financing Contracts subject
to Discounted Financing Agreements; and (viii) each Seller has approved credit
applications and otherwise entered into commitments with respect to Purchased
Financing Contracts in a manner consistent with such Seller's credit policies,
collateral eligibility standards and credit quality classifications in effect at
the time and otherwise complied with standards of evaluating, originating,
underwriting and funding new business which are in all respects consistent with
its past practices.
(c) Except as set forth on Schedule 3.18(c), no Purchased
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, and, except in connection with the
debtor-in-possession financing under the Chapter 11 Cases and under any
Purchased Discounted Financing Agreement, no Purchased Financing Contract is
subject to any Disposition Agreement.
(d) As of the date of this Agreement, Schedule 3.18(d) sets
forth a list of each Credit Enhancement constituting a Purchased Asset that is a
letter of credit, certificate of deposit or stock certificate, along with (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.
(e) Each Seller owns and has good title to each of the
Purchased Financing Contracts that will be transferred by such Seller to
Purchaser and Purchaser Affiliates pursuant to this Agreement, free and clear of
all Encumbrances other than Permitted Encumbrances and Encumbrances created
pursuant to the Discounted Financing Agreements.
(f) Schedule 3.18(f) sets forth all of the Required Consent
Financing Contracts.
3.19 Portfolio Property.
(a) (i) Each Seller has, with respect to each item of
Portfolio Property that such Seller will be transferring to Purchaser and
Purchaser Affiliates pursuant hereto, either (A) good and valid title to such
Portfolio Property, free and clear of all Encumbrances other than Permitted
Encumbrances and Encumbrances created pursuant to the Discounted Financing
Agreements, or (B) a valid first priority security interest on such Portfolio
Property that is governed by or subject to a Financing Contract which has been
duly perfected (including but not limited to pursuant to all appropriate Uniform
Commercial Code filings); (ii) with respect to each item of Portfolio Property,
the amount of the Original Equipment Cost with respect thereto is described
accurately in the files of each Seller that relate to such item of Portfolio
Property in the same level of detail that such individual item of Portfolio
Property is identified in the applicable Purchased Financing Contract; (iii)
none of such Portfolio Property is a vessel, an aircraft or a vehicle; and (iv)
no Person has an option to purchase any item of such Portfolio Property at the
end of the lease term for a fixed amount less than the greater of (A) the
Residual thereof or (B) the amount set forth in the Financing Contract covering
such Portfolio Property.
(b) Except as set forth on Schedule 3.19(b), to Seller's
Knowledge, (i) all Portfolio Property has complied and now complies in all
respects with all laws, statutes, ordinances, rules and regulations applicable
to such Portfolio Property, except that the Sellers make no representation as to
(i) whether the use of Portfolio Property by the Obligor complies with such
laws, statutes, ordinances, rules and regulations or (ii) any defects,
violations of law, regulations or similar requirements to the extent relating to
Portfolio Property that is manufactured by Purchaser, a Purchaser Affiliate or
an Affiliate of Purchaser; and (ii) each Financing Contract requires the Obligor
thereunder (and not a Seller or any other Person) to provide insurance against
loss or damage with respect to the Portfolio Property subject to or governed by
such Financing Contract.
(c) Each Seller owns and has (i) good title to all of the
Portfolio Property related to the Purchased Financing Contracts that will be
transferred to Purchaser and Purchaser Affiliates by such Seller, free and clear
of all Encumbrances other than Permitted Encumbrances and Encumbrances created
by the Discounted Financing Agreements or (ii) a valid first priority security
interest on such Portfolio Property which has been duly perfected, including,
but not limited to, pursuant to all appropriate Uniform Commercial Code filings.
No Seller is in default in any agreement or arrangement with the third parties
which own title to the Portfolio Property related to the Financing Contracts
subject to Discounted Financing Agreements, which default would give rise to an
acceleration of payments to become due thereunder.
3.20 Environmental Matters. Except as disclosed on Schedule
3.20 (i) each Seller and each of the Purchased Assets is in compliance with all
Environmental Laws and Environmental Permits; (ii) there are no claims or
proceedings pending or, to Seller's Knowledge, threatened against any Seller
with respect to the Purchased Assets alleging the violation of or non-compliance
with Environmental Laws; (iii) to Seller's Knowledge, there are no facts,
circumstances or conditions that could result in the owner or operator of the
Purchased Assets incurring liabilities under Environmental Laws; and (iv) each
Seller has provided Purchaser with copies of all material environmental, health
and safety assessments, audits, investigations, analyses and other such reports
relating to the Purchased Assets (each, an "Environmental Report") that are, as
of the date of this Agreement, in the possession, custody and control of such
Seller, except, in respect of clauses (i), (ii) and (iii) hereof, that has not
had or is reasonably likely to have a Material Adverse Effect.
3.21 Transactions With State and Local Governments. With
respect to each Purchased Financing Contract for which the Obligor is a State
and Local Governmental Entity, (i) the Seller party to such Financing Contract
has complied with all bidding requirements applicable to such transaction and
with all requirements of any applicable request for proposal, including, without
limitation, those applicable to the Portfolio Property and all federal and state
statutes and regulations governing equal employment opportunity, affirmative
action and environmental protection; (ii) such 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 obligations arising from such
Financing Contract; and (iii) such Seller has given (or timely will give) notice
to each applicable State and Local Governmental Entity of the assignment of the
rights of such 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.
3.22 [Intentionally Omitted.]
3.23 [Intentionally Omitted.]
3.24 [Intentionally Omitted.]
3.25 [Intentionally Omitted.]
3.26 Purchased Discounted Financing Agreements. No Purchased
Discounted Financing Agreement (i) except as set forth on Schedule 3.26,
provides that the lender thereunder has recourse against any person for the
payment thereunder except the Obligor of the Financing Contract securing such
indebtedness, (ii) except as set forth on Schedule 3.26, has an amount due in
excess of the remaining rent payments under the Financing Contract securing such
indebtedness, (iii) allows the lender to retain its security interest in the
Financing Contract securing such indebtedness after the repayment of such
indebtedness, (iv) is cross collateralized to any Property other than any
Purchased Financing Contract which was discounted for such indebtedness and its
underlying Portfolio Property, (v) except as set forth on Schedule 3.26 has a
lender located, or payments due, outside of the United States, (vi) has a cross
default to any other agreement, (vii) has a representation or covenant which has
been breached by any Seller, which would give (with the giving of notice or
passage of time or both) the lender thereunder the ability to accelerate payment
to become due thereunder, (viii) would prohibit Purchaser or any Purchaser
Affiliate from receiving payments on the Financing Contract securing such
indebtedness after such indebtedness is paid in full, or (ix) gives a right of
setoff to the lender for any amounts owed thereunder. Each Purchased Discounted
Financing Agreement is substantially in the same form as the Discounted
Financing Agreements set forth on Schedule 3.26. Schedule 3.26 sets forth all
Discounted Financing Agreements to which any Seller is a party.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser makes, and at Closing will cause each Purchaser
Affiliate to make, the following representations and warranties to the Sellers:
4.1 Organization and Good Standing. Purchaser is, and each
Purchaser Affiliate will be at Closing, a duly organized entity, validly
existing and in good standing under the laws of the state of its incorporation,
and Purchaser has, and each Purchaser Affiliate will have at Closing, the
corporate or other applicable power to own and lease its Property and to carry
on its business as now being conducted.
4.2 Corporate Authority. Purchaser has, and each Purchaser
Affiliate will have at Closing, all requisite corporate or other applicable
power and authority to execute and deliver, and to perform its obligations
under, this Agreement, the Transitional Services Agreement and the other
documents to be executed and delivered by Purchaser or such Purchaser Affiliate
pursuant hereto and thereto. Each of this Agreement, the Transitional Services
Agreement and the other documents to be executed and delivered by Purchaser or
any Purchaser Affiliate pursuant hereto and thereto has been, or will be, as the
case may be, duly authorized by all necessary corporate action 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 or such
Purchaser Affiliate and 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 or such Purchaser Affiliate, enforceable against
Purchaser or such Purchaser Affiliate in accordance with its terms, except as
enforcement thereof may be limited by the Bankruptcy Exception.
4.3 No Conflicts. Neither the execution and delivery by
Purchaser or any Purchaser Affiliate of this Agreement, the Transitional
Services Agreement or any other document to be executed and delivered by
Purchaser or such Purchaser Affiliate in connection herewith or therewith nor
compliance by Purchaser or such Purchaser Affiliate with the terms and
provisions hereof or thereof nor 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 articles of incorporation (or equivalent
document) or by-laws (or equivalent document, including Articles of Association)
of Purchaser or such Purchaser Affiliate, 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 or such Purchaser Affiliate or any
of its Properties is subject.
4.4 Consents. Other than the filing of notifications pursuant
to the HSR Act and any other filings pursuant to any corresponding anti-trust,
competition or similar legislation in any other jurisdictions, and the Approval
Order issued by the Bankruptcy Court, no notices, reports or other filings are
required to be made by Purchaser or any Purchaser Affiliate with, nor are any
consents, licenses, permits, Authorizations or approvals required to be obtained
by Purchaser or any Purchaser Affiliate from, any Governmental Entity or any
other Person in connection with the execution and delivery by Purchaser or any
Purchaser Affiliate of this Agreement, the Transitional Services Agreement or
any other document to be executed and delivered by Purchaser pursuant hereto or
thereto or the consummation by Purchaser or such Purchaser Affiliate of the
transactions contemplated hereby or thereby.
4.5 Brokers' or Finders' Fees, etc. No Person acting on behalf
of Purchaser or any Purchaser Affiliate or any of their 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 any Seller
or any of its Affiliates in connection with any of the transactions contemplated
herein.
4.6 Financing. As of the date hereof, Purchaser has, and on
the Closing Date, Purchaser and each Purchaser Affiliate will have, sufficient
funds available to deliver Purchase Price to the Sellers and consummate the
transactions contemplated by this Agreement. Upon the Closing, (i) neither
Purchaser nor any Purchaser Affiliate will be insolvent, (ii) neither Purchaser
nor any Purchaser Affiliate will be left with unreasonably small capital, (iii)
neither Purchaser nor any Purchaser Affiliate will have incurred debts beyond
its ability to pay such debts as they mature and (iv) the capital of Purchaser
and each Purchaser Affiliate will not be impaired.
ARTICLE V
CONDUCT AND TRANSACTIONS PRIOR TO
CLOSING; COVENANTS; INDEMNITIES
Each Seller agrees and covenants with Purchaser as follows:
5.1 Investigations; Certain Covenants. Between the date of the
Approval Order and the Closing (or, with respect to Sections
5.1(a), 5.1(b), 5.1(c) and 5.1(d), during the period set forth
therein):
(a) Within six (6) Business Days after the date of this
Agreement, the Sellers 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 all the Sellers' premises in Rosemont, Illinois,
personnel and books and records (located in Rosemont, Illinois) of each Seller,
including, but not limited to, all accounting books and records, all financial
records and statements, and all Tax Returns and Tax records, in each case
pertaining to any Purchased Financing Contract, any Portfolio Property or any
Assumed Liability, or any other Purchased Asset; provided, however, in the event
any book and records of any Seller pertaining to any Purchased Asset or Assumed
Liability is not located at Sellers' premises in Rosemont, Illinois, copies of
such book and records shall be made available at Sellers' premises in Rosemont,
Illinois. Within six (6) Business Days after the date of this Agreement but in
no event earlier than April 10, 2002, the Sellers shall use their reasonable
best efforts to assemble, and make available for Purchaser's review, at the
Sellers' offices in Rosemont, Illinois, a lease file for each Purchased
Financing Contract (each, a "Lease File"), which shall contain, to the extent in
the possession of any Seller, the credit file, the correspondence file, the
document file and the documents set forth on Schedule 5.1(a), each organized so
that all such documents relating to a specific Purchased Financing Contract are
located in a single Lease File. Each Seller shall use its reasonable best
efforts to assemble originals or copies, to the extent in the possession of any
Seller, in the Lease File for each Financing Contract intended to be included in
the Purchased Financing Contracts, of the credit file, the correspondence file,
the document file and the documents set forth on Schedule 5.1(a); provided,
however, the Sellers shall deliver original master leases (or, if not in the
Sellers' possession, copies of such master leases, if such master leases are the
subject of a Purchased Discounted Financing Agreement, certified as true,
correct and complete by an officer of the applicable Seller and in all other
cases by the applicable Obligor), original applicable schedules, original Credit
Enhancements and original confirmations of filings of all UCC financing
statements (or if not in the Sellers' possession, a copy thereof). Purchaser and
the Sellers shall use commercially reasonable efforts to observe and comply with
the review procedures and processes set forth on Schedule 5.1(a).
(b) As soon as practicable following the date of the Approval
Order, each of Purchaser and each Seller shall make or cause to be made all
filings required to be made by it or on its behalf under the HSR Act and any
corresponding anti-trust, competition or similar legislation in any other
jurisdictions relating to the transactions contemplated hereby 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
pursuant to the laws of any other jurisdictions) as soon as practicable.
However, neither Purchaser nor any of its Affiliates shall 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 pay the filing fees for all filings required
pursuant to this Section 5.1(b).
(c) Except as otherwise expressly provided in this Agreement,
between the date of this Agreement and Closing, each Seller shall use
commercially reasonable efforts under the circumstances to preserve
substantially intact the Purchased Assets and shall use its commercially
reasonable efforts under the circumstances 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.
(d) Except as otherwise expressly permitted by this Agreement
or consented to in writing by Purchaser and except as prohibited by the
Bankruptcy Code or the Bankruptcy Court in the Chapter 11 Cases prior to the
date hereof, each Seller shall, between the date of this Agreement and Closing:
(i) own, operate 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, any Seller may prepay
any of its indebtedness if such prepayment does not otherwise violate
any provision of this Agreement except that no Seller shall prepay any
Discounted Financing Agreement related to a Purchased Financing
Contract;
(ii) maintain its books, accounts and records relating to the
Purchased Assets in the ordinary course of business consistent with
past practices, and cause such books, accounts and records to be true
and complete in all material respects;
(iii) [Intentionally Omitted.]
(iv) [Intentionally Omitted.]
(v) 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; and
(vi) use commercially reasonable efforts to maintain the
goodwill associated with its business, as such business relates to the
Purchased Assets, including, without limitation, preserving the
relationship of customers, suppliers and others having business
dealings with any Seller.
Except as otherwise expressly permitted by this Agreement,
between the date of this Agreement and Closing, no Seller, without the written
consent of Purchaser, shall, 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) with respect to the Healthcare Segment, modify
the policies or practices for (x) evaluating, originating,
underwriting or funding business, (y) collection, or (z)
valuing Portfolio Property;
(C) [Intentionally Omitted];
(D) make any advance, novation, modification or other
accommodation (other than those described in clause (A) above)
to any Obligor or provider of a Credit Enhancement other than
in the ordinary course of business consistent with past
practices;
(E) except as required by any debtor-in-possession
financing in the Chapter 11 Cases, mortgage, pledge or
otherwise encumber any assets;
(F) sell, lease (other than leases or conditional
sales of Portfolio Property pursuant to the Financing
Contracts), transfer or otherwise dispose of any assets
included in the Purchased Assets, except sales of inventory in
the ordinary course of business consistent with past
practices;
(G) [Intentionally Omitted];
(H) make any change in financial or tax accounting
methods, principles or practices applicable to the Purchased
Assets or Assumed Liabilities unless permitted by the
Accounting Principles;
(I) [Intentionally Omitted];
(J) take any action that would breach any Seller's
representations, warranties or covenants contained in this
Agreement if such representation, warranty or covenant were
made at the time of the action;
(K) with respect to any Financing Contract of a type
that would be included within the definition of Purchased
Financing Contracts (without considering clauses (E) or (H) of
the proviso thereof) (a "Non-Terminable or Modifiable
Financing Contract"), (x) terminate, or permit the termination
of such Financing Contract prior to the expiration of the
scheduled term thereof (except for terminations, without a
violation of clause (z) below, at the election of an Obligor
as contractually permitted under such Financing Contract), (y)
directly or indirectly extend or otherwise restructure the
payment schedule or payment terms of any such Financing
Contract beyond 30 days from the original due date of a
payment, or extend or otherwise restructure any other term or
condition of any such Financing Contract (except modifications
or amendments to reflect equipment additions or upgrades and
lease term extensions related to such additions or upgrades),
or (z) encourage or induce an Obligor under such Financing
Contract to elect to terminate such Financing Contract prior
to the expiration of the scheduled term thereof; or
(L) enter into an agreement, contract or commitment
(other than this Agreement) to do any of the things prohibited
by the foregoing clauses (A) through (K).
(e) Notwithstanding anything to the contrary in Section
5.1(d),
(i) (A) any Seller may, during the period from December 31,
2001 to but excluding April 1, 2002, (1) sell, transfer or otherwise
dispose of, or enter into an agreement to sell, transfer or otherwise
dispose of, any Portfolio Property or Financing Contract (selling,
transferring, disposing of or entering into an agreement to sell,
transfer or dispose of any Portfolio Property or Financing Contract
being referred to as a "Sale") or (2) directly or indirectly extend or
otherwise restructure the payment schedule, payment terms or any other
terms or conditions of any Purchased Financing Contract, or make any
other extension, modification or other accommodation to any Obligor
(any such modification of a Purchased Financing Contract being referred
to as a "Modification"); provided, however, that the sum of (x) the
aggregate Net Book Value as of the date of this Agreement of Portfolio
Property and Financing Contracts that are Sold pursuant to clause (1)
above and (y) the aggregate Net Book Value as of the date of this
Agreement of Purchased Financing Contracts that have been subject to
Modification pursuant to clause (2) above shall not exceed $7,000,000.
Sellers agree to deliver to Purchaser on or prior to April 30, 2002, a
schedule containing a true, correct and complete list of all Sales and
Modifications entered into by the Sellers from December 31, 2001 to but
excluding April 1, 2002.
(B) In the event any Seller Sells any Portfolio
Property or any Financing Contract in accordance with clause
(A) above, such Portfolio Property and/or Financing Contract
shall constitute an Excluded Asset for purposes hereof (and
consequently such Portfolio Property and Financing Contract
shall be excluded from the Closing Date Portfolio Tape and the
Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed and such Seller shall be entitled to the
proceeds of such Sale (irrespective of whether such Sale is
effected prior, on or after the Closing).
(C) In the event any Modification is made to any
Purchased Financing Contract in accordance with clause (A)
above, the Net Book Value for such Purchased Financing
Contract set forth on the Closing Date PortfolioTape shall
give effect to such Modification.
(ii) (A) Each Seller may, between April 1, 2002 and the
applicable Cut-Off Date with respect to any Financing Contract, (1)
Sell any Financing Contract or (2) make a Modification to any Purchased
Financing Contract; provided, however, that a copy of a definitive
agreement with respect to such Sale or Modification shall have been
furnished to Purchaser on or prior to the Cut-Off Date; and, provided,
further, that the sum of (x) the aggregate Net Book Value as of the
date of this Agreement of Portfolio Property and Financing Contracts
that are the subject of a Sale pursuant to clause (1) above and (y) the
aggregate Net Book Value as of the date of this Agreement of Purchased
Financing Contracts that have been subject to Modification pursuant to
clause (2) above shall not, if taken together, exceed (i) $7,500,000
with respect to the Sales or Modifications that are effected pursuant
to definitive agreements that are executed on or after April 1, 2002
but prior to May 31, 2002 and (ii) $10,000,000 with respect to Sales or
Modifications that are effected pursuant to the definitive agreements
that are executed on or after May 31, 2002 but prior to June 30, 2002
(minus the aggregate Net Book Value with respect to the Sales and
Modifications that are effected pursuant to the definitive Agreements
that are executed on or after April 1, 2002 but prior to May 31, 2002).
(B) In the event any Seller Sells any Portfolio
Property or any Financing Contract in accordance with clause
(A) above, such Portfolio Property and/or Financing Contract
shall constitute an Excluded Asset for purposes hereof (and
consequently such Portfolio Property and Financing Contract
shall be excluded from the Closing Date Portfolio Tape and the
Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed and such Seller shall be entitled to the
proceeds of such Sale (irrespective of whether such Sale is
effected prior, on or after the Closing)).
(C) In the event any Modification is made to any
Purchased Financing Contract in accordance with clause (A)
above, the Net Book Value for such Purchased Financing
Contract set forth on the Closing Date Portfolio Tape shall
give effect to such Modification.
(iii) after the Cut-Off Date with respect to any Financing
Contract, no Seller shall directly or indirectly in any way enter into
any Sale or any Modification with respect any Purchased Financing
Contract, or make any advance or novation to any Obligor or provider of
a Credit Enhancement thereunder or issue any quotes for any Sale of any
Portfolio Property subject to such Purchased Financing Contract without
prior written consent of Purchaser.
(f) Each Seller shall use commercially reasonable efforts to
obtain (i) all Authorizations, consents and approvals referred to in Section 3.4
hereof and (ii) the written consent, and any required novation, of the required
third parties to transfer the Required Consent Financing Contracts to Purchaser,
or any Purchaser Affiliate designated by Purchaser, at the Closing.
(g) Prior to Closing but after the signing of the Approval
Order by the Bankruptcy Court, and for a period not to exceed four months
following the Closing Date, each Seller shall, reasonably cooperate with
Purchaser and each Purchaser Affiliate by providing reasonable access (during
normal business hours) to (subject to a non-disclosure agreement), (i) available
information regarding, and (ii) available personnel who are knowledgeable
regarding, the systems, hardware and software used by the Seller to collect,
service and operate the Purchased Assets as and to the extent reasonably
requested by Purchaser solely in connection with the conversion of data with
respect to the Purchased Financing Contracts onto the systems, hardware and
software of the Purchaser or applicable Purchaser Affiliate. Effective as of the
Closing Date, each Seller hereby grants to Purchaser and each Purchaser
Affiliate, to the extent owned by any Seller, a perpetual, royalty free,
non-transferable, non-exclusive license (in the jurisdictions in which the
applicable grantor has such rights) to use all information provided under this
Section 5.1(g) (the "Information") solely for their internal business purposes
related to the Purchased Financing Contracts. "Information" shall not include
any computer programs, including, but not limited to, any and all software
implementations of algorithms, models and methodologies in source code or object
code form, databases and compilations. Purchaser and the Purchaser Affiliates
may not rent, lease, sublicense or otherwise transfer any of the Information or
provide access to the Information to any third party. All rights in the
Information not explicitly granted under this Section 5.1(g) are reserved.
(h) (i) Approximately five Business Days prior to any Cut-Off
Date intended to be established by Purchaser with respect to any Financing
Contract, Purchaser shall provide a preliminary non-binding list of Financing
Contracts with respect to which Purchaser has completed its review of the Lease
Files and, subject to the conditions set forth in the definition of the "Cut-Off
Date" and the receipt of the listing set forth in clause (ii) below, Purchaser
proposes to issue a notice on the Cut-Off Date.
(ii) Two Business Days prior to the proposed Cut-Off Date,
each Seller shall deliver to Purchaser listings as of such date of all
Financing Contracts identified by Purchaser pursuant to clause (i)
above on a non-binding basis as proposed to be included in the notice
to be issued on the Cut-Off Date that fall under the definition of
Purchased Financing Contracts (without giving effect to clauses (B),
(D), (E), (F), (H)(z) or (K) of the proviso in the definition thereof)
and that either (x) fall under any of clauses (B), (D), (F) or (K) of
the proviso in the definition of Purchased Financing Contracts, (y)
fall under clause (i) of the definition of Delinquency Contracts or (z)
to Seller's Knowledge, do not satisfy the representations and
warranties of Article III (which listing shall identify the breach of
such representations and warranties).
(iii) Five Business Days prior to Closing, each Seller shall
deliver to Purchaser a listing of all Financing Contracts with respect
to which Purchaser has given a notice to Seller on the Cut-Off Date
electing to deem such Financing Contract a "Purchased Financing
Contract" that fall under clause (E) of the proviso in the definition
of Purchased Financing Contracts.
(i) Each Seller shall deliver to Purchaser, at least five
Business Days prior to Closing, all Environmental Reports that come to its
possession, custody or control between the date hereof and Closing.
(j) Within 20 days after the date of the Approval Order, each
Seller shall deliver to Purchaser or the applicable Purchaser Affiliate a list
of all third party consents required to transfer each Purchased Other Contract.
Each Seller shall use its commercially reasonable efforts to obtain such
consents prior to Closing. To the extent that any Seller does not obtain such
consents prior to Closing for a Purchased Other Contract, Purchaser may elect to
exclude such Purchased Other Contract from the Purchased Assets notwithstanding
that it is described as a Purchased Asset in Section 2.1.
5.2 Pending or Threatened Litigation. Between the date of this
Agreement and the Closing, Sellers 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 any 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 any Seller or Purchaser of their respective obligations
hereunder.
5.3 Tax Matters/Allocation of Purchase Price.
(a) Within 90 days after the completion of the final
determination of the Special Procedures Report of Assets Acquired and
Liabilities Assumed, Purchaser shall provide to Comdisco copies of a schedule
allocating the Purchase Price (and any other items required to be treated as
additional Purchase Price at such time) among the Sellers and the Purchased
Assets (the "Allocation Statement"); provided, that the Allocation Statement
shall not be inconsistent with the allocation of the Purchase Price agreed to by
Purchaser and the Sellers pursuant to Section 2.3, except to the extent any
inconsistencies relate to or arise out of the final determination of the Special
Procedures Report of Assets Acquired and Liabilities Assumed. Within 60 days
after the receipt of such Allocation Statement, Comdisco shall propose to
Purchaser any changes to such Allocation Statement or shall indicate its
concurrence therewith, which concurrence shall not be unreasonably withheld. The
failure by Comdisco to propose any such change or to indicate its concurrence
within such 60 days shall be deemed to be an indication of its concurrence with
such Allocation Statement. Purchaser and each Seller shall file, and shall cause
their Affiliates to file, all Tax Returns and statements (including Form 8594),
forms and schedules in connection therewith in a manner consistent with such
allocation of the Purchase Price and shall take no position contrary thereto
unless required to do so by applicable Tax laws. Any disputes with respect to
the items on the Allocation Statement which Purchaser and Comdisco, acting in
good faith, are unable to resolve shall be resolved by the Selected Accounting
Firm. Each of the parties to this Agreement shall be bound by the decision
rendered by the Selected Accounting Firm.
(b) Cooperation with Respect to Tax Returns. Purchaser and
each 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. Each 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 (or the
date of the Second Closing with respect to Purchased Financing Contracts
transferred at the Second Closing) until the relevant statute of limitations has
expired. After such time, each Seller may dispose of such materials, provided
that prior to such disposition such Seller shall give Purchaser a reasonable
opportunity to take possession of such materials. Purchaser shall retain in its
possession, and shall provide the Sellers reasonable access to (including the
right to make copies of), such supporting books and records and any other
materials that the Sellers may specify with respect to Tax matters relating to
any taxable period ending on or prior to the Closing Date (or the date of the
Second Closing with respect to Purchased Financing Contracts transferred at the
Second Closing) until 60 days after the relevant statute of limitations has
expired.
(c) Transfer Taxes. The Sellers shall be liable for and shall
pay (and the Sellers shall indemnify and hold Purchaser and each Purchaser
Affiliate 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 documentation (including, but not limited to, all Tax Returns) with
respect to all such Taxes in a timely manner. Purchaser shall co-operate with
the Sellers and otherwise shall use its commercially reasonable efforts to
obtain (at the Sellers' expense) any available refunds of, or credits for, any
Transfer Taxes, and to the extent Purchaser or the applicable Purchaser
Affiliate actually receives any such refunds or credits, net of any Taxes
payable with respect thereto, Purchaser or the applicable Purchaser Affiliate
shall remit to the applicable Seller the amount of such refund (to the extent
such Seller previously paid such Transfer Taxes), promptly following receipt
thereof (provided such Seller has otherwise complied with its obligations
pursuant to the first sentence of this Section 5.3(c)). Notwithstanding the
foregoing, the Approval Order shall contain a provision that the Sellers' sale,
transfer, assignment and conveyance of the Purchased Assets to Purchaser
hereunder shall be entitled to the protections afforded under Section 1146(c) of
the Bankruptcy Code. Purchaser and the Sellers shall co-operate in providing
each other any applicable resale exemption certificate.
5.4 Indemnifications, Assumptions of Liability and Related
Matters.
(a) Indemnification by Sellers for Breach. Each Seller shall
indemnify and hold harmless to indemnify and hold harmless (provided, however,
CHG shall indemnify and hold harmless solely to the extent applicable to CHG)
any Purchaser and its Affiliates, and in each such case their respective
directors, 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, without duplication (i) any breach of any representation or
warranty made by any Seller in this Agreement (without duplication as to matters
indemnified pursuant to Section 5.4(d), Section 5.4(e) and Section 5.4(g)); or
(ii) any failure to perform duly and punctually any covenant, agreement or
undertaking on the part of any Seller contained in this Agreement (without
duplication as to matters indemnified pursuant to Section 5.4(d), Section 5.4(e)
and Section 5.4(g)); or (iii) any breach of a representation or warranty
included in any certificate, Schedule or other agreement, instrument or
document, in each case delivered by any Seller, or any of their respective
Affiliates to Purchaser pursuant to the terms of this Agreement (collectively,
the "Seller Related Documents") or (iv) any employees of any Seller or any
benefit plans or payroll practices of any Seller; provided, however, that (A) in
the event Purchaser waives in writing its condition to Closing pursuant to
Section 6.2(a) as such condition relates to a breach of the representation and
warranty contained in Section 3.7(a), Purchaser shall not be entitled after
Closing to seek indemnification from any Seller in respect of such breach of the
representation and warranty contained in Section 3.7(a), (B) Purchaser shall not
be entitled to indemnification pursuant to clause (i) of this Section 5.4(a) as
a result of any breach of any representation or warranty made by any Seller in
Section 3.7(a) hereof to the extent, but solely to the extent, that a matter
causing a breach of Section 3.7(a) is the subject of a specific representation
or warranty in Article III made by such Seller breaching Section 3.7(a), and (C)
in the event that a Seller notifies Purchaser pursuant to Section 5.1(h)(iii)
that a Financing Contract does not satisfy the representations and warranties of
Article III (a "Section 5.1(h)(iii) Notice") and Purchaser does not notify such
Seller that it is excluding such Financing Contract from the Purchased Financing
Contracts pursuant to clause (H)(z) of the proviso of the definition thereof,
Purchaser shall not be entitled to indemnification for such Purchased Financing
Contract pursuant to clause (i) of this Section 5.4(a) with regard to the
circumstances giving rise to the breach of the representation and warranty
identified in the Section 5.1(h)(iii) Notice. For purposes of this Section
5.4(a), a breach of a representation or warranty contained in this Agreement or
a Seller Related Document shall be deemed to exist either if such representation
or warranty is actually inaccurate or breached or if such representation or
warranty would have been breached or would have been inaccurate if such
representation or warranty had not contained any limitation or qualification as
to materiality, Material Adverse Effect or Seller's Knowledge, 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 upon or relating
to the failure of any such representation or 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;
provided, however, that for the purposes of Section 5.4(a), the representations
and warranties contained in Sections 3.7(a) and 3.13(ii) hereof shall not be
without regard to any qualification as to materiality, Material Adverse Effect
or Seller's Knowledge set forth with respect thereto and; provided further,
however, that for the purposes of Section 5.4(a), the representation and
warranty contained in Section 3.19(b) hereof shall not be without regard to any
qualification as to Seller's Knowledge set forth with respect thereto.
Notwithstanding anything to the contrary contained herein, neither Seller shall
be liable in respect of any amounts or losses (of the type described in the
definition of Damages) suffered or incurred by a Purchaser Indemnified Party
resulting from, arising out of, based on or relating to breaches of
representations or warranties made by any Seller to the extent that such amounts
or losses are actually reflected in the calculation of the Purchase Price, as
determined pursuant to Section 2.2 hereof (whether through a decrease in the
amount of the Purchased Assets or an increase in the amount of Assumed
Liabilities, in each case as reflected on the Special Procedures Report of
Assets Acquired and Liabilities Assumed).
(b) Limitation on Liability of Sellers.
(i) Each Purchaser Indemnified Party entitled to
indemnification for any Damages suffered or incurred by such Person
resulting from, arising out of, based on or relating to a failure to
perform any covenant, agreement or undertaking of any Seller shall be
entitled to such indemnification for the full amount of such Damages
regardless of the amount of the Damages.
(ii) Each Purchaser Indemnified Party entitled to
indemnification for any Damages suffered or incurred by such Person
resulting from, arising out of, based on or relating to (A) a breach of
any representation or warranty made by any Seller in this Agreement or
(B) any breach of any representation or warranty in any Seller Related
Document shall be entitled to indemnification from any Seller for the
full amount of all such Damages which in the aggregate are in excess of
an amount that equals to the greater of (1) 1.1 percent of the
aggregate Purchase Price as of the Closing Date and (2) $1,000,000;
provided, however, that no Seller will be liable for any such Damages
to the extent, and only to the extent, of the excess of the aggregate
amount thereof over an amount that equals to the lesser of (x) 12
percent of the aggregate Net Book Value of the Purchased Assets as of
the Closing Date and (y) $20,000,000; provided, further that, without
limiting the liability of Comdisco for such Damages, CHG will not be
liable for any such Damages to the extent, and only to the extent, that
the aggregate amount thereof exceeds the portion of the Purchase Price
allocated to CHG pursuant to Section 2.3.
(iii) (A) Subject at all times to the limitations of Section
5.4(b)(ii) and Section 5.4(c), any Seller may satisfy its obligations
pursuant to Section 5.4(a) with respect to any claim by Purchaser or
any Purchaser Affiliate for Damages by the payment to Purchaser or
Purchaser Affiliate, as applicable, of the Repurchase Amount and the
assumption of all rights and obligations of such Purchaser or Purchaser
Affiliate under the applicable Purchased Financing Contract or with
respect to other applicable Purchased Asset, as the case may be, as set
forth in clause (B) below; provided, however, any obligation of any
Seller pursuant to Section 5.4(a) with respect to any Purchased
Financing Contract or other Purchased Asset with respect to which the
Obligor or any other third party has asserted a written claim for
Damages against any Purchaser Indemnified Party shall survive such
repurchase and assumption. Notwithstanding anything contrary in this
Agreement, (1) any obligation of Purchaser pursuant to Sections 5.4(h)
and 5.4(k), with respect to the repurchased Purchased Financing
Contract or other Purchased Asset, which obligation arises after the
applicable Closing Date and prior to the repurchase, shall survive such
repurchase and assumption and (2) Purchaser shall not have any further
obligation under Sections 5.4(h) or 5.4(k) in respect of any
repurchased Purchased Financing Contract or other Purchased Asset for
Damages to the extent such Damages result from, arise out of, are based
on or relate to, actions taken or failed to be taken after the date of
such repurchase. Nothing set forth in this clause (A) shall be deemed a
reaffirmation or revival of any claim for Damages of any Obligor or any
other third party which has been barred or discharged against any
Seller pursuant to the implementation of any provisions of the
Bankruptcy Code and the applicable Seller and the Purchaser or
Purchaser Affiliate shall be entitled to assert, to the fullest extent
possible, such bar or discharge in connection with any claim asserted
by such Obligor or third party.
(B) Upon receipt of the Repurchase Amount by
Purchaser or Purchaser Affiliate, as applicable, Purchaser or
Purchaser Affiliate shall transfer and assign to the
applicable Seller all of such Purchaser's or Purchaser
Affiliate's rights and obligations with respect to such
Purchased Financing Contract or such other Purchased Asset
after the consummation of such transfer and assumption and
such Seller shall assume all obligations of such Purchaser or
Purchaser Affiliate arising after the consummation of such
transfer and assumption except for obligations arising out of
a breach by any Purchaser or Purchaser Affiliate prior to the
consummation of such transfer and assumption. Purchaser shall
and shall cause Purchaser Affiliate, as applicable, to remit
all proceeds received by Purchaser or applicable Purchaser
Affiliate to the applicable Seller with respect to such
Purchased Financing Contract or such other Purchased Asset
after such transfer. Sellers agree that Sellers shall
indemnify and hold harmless Purchaser Indemnified Parties with
respect to any Transfer Taxes arising out of or caused by such
transfer.
(c) Survival of Representations and Warranties of Sellers.
(i) The Special Representations and indemnifications with
respect to their breach shall survive until three months after the
expiration of the applicable statute of limitations (including
extensions) applicable to Purchaser and/or the Purchaser Indemnified
Parties potentially incurring Damages arising from, or relating to, any
circumstances giving rise to any breach thereof.
(ii) The representations and warranties of each Seller in (A)
this Agreement which are not Special Representations and (B) the Seller
Related Documents shall survive the Closing until the expiration of 12
months after the Closing.
(d) [Intentionally Omitted.]
(e) Tax Indemnification. Each Seller shall indemnify and hold
harmless, (provided, however, CHG shall indemnify and hold harmless solely to
the extent applicable to CHG) 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 and all sales, use or other similar Taxes
required to be collected in respect of any Purchased Financing
Contract during the 12 months following the Closing Date if
(i) such Tax is not being collected by Purchaser or the
applicable Purchaser Affiliate in respect of the Purchased
Financing Contract pursuant to (x) Purchaser's or the
applicable Purchaser Affiliate's reliance on an applicable
exemption from such Tax and (y) any Seller's reliance on such
exemption for periods on or prior to the Closing Date, and
(ii) such exemption from Tax is dependent upon receipt of a
properly executed Exemption Certificate; provided, that in no
event shall any Seller be required to indemnify Purchaser
under this Section 5.4(e)(A) to the extent such Damage arises
out of a change in law after the Closing Date affecting
Purchaser's obligation to collect such Tax;
(B) any liability for sales, use or other similar
Taxes assessed in respect of any Purchased Financing Contract
after the Closing where such Taxes were erroneously paid at
the inception of such Purchased Financing Contract;
(C) any claim by any Person in respect of sales, use
or other similar Tax paid on or prior to the Closing Date (or
the date of the Second Closing with respect to Purchased
Financing Contracts transferred at the Second Closing);
(D) any Taxes for which any Seller is liable pursuant
to Section 2.5 or Section 5.3(c) hereof; and
(E) any Taxes asserted against Purchaser or any of
its Affiliates 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.
(f) [Intentionally Omitted.]
(g) Additional Indemnification by Sellers. Each Seller shall
indemnify and hold harmless, (provided, however, CHG shall indemnify and hold
harmless solely to the extent applicable to CHG), 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:
(i) any of the Excluded Assets or the ownership, operation,
servicing, lease or use thereof, or any action taken with respect
thereto, by any Seller or any other Person;
(ii) 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); or
(iii) the failure to comply with any "bulk sales" or similar
laws promulgated by any Governmental Entity.
(h) Indemnification by Purchaser for Breach. Purchaser shall
indemnify and hold harmless the Sellers and Sellers' Affiliates and their
respective 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; or
(ii) any failure to perform duly and punctually any covenant, agreement or
undertaking on the part of Purchaser contained in this Agreement; or (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 or any Purchaser Affiliate to the Sellers pursuant to the
terms of this Agreement (collectively, the "Purchaser Related Documents"). For
purposes of this Section 5.4(h), a breach of a representation or warranty
contained in this Agreement or a Purchaser Related Document shall be deemed to
exist either if such representation or warranty is actually inaccurate or
breached or 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, 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.
(i) [Intentionally Omitted.]
(j) Survival of Representations and Warranties of Purchaser.
The representations and warranties of Purchaser in this Agreement and the
Purchaser Related Documents shall survive the Closing until the expiration of 24
months after the Closing.
(k) 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:
(i) 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 Purchaser Affiliate or any other Person, 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 any Seller pursuant to this Agreement; or
(ii) the Assumed Liabilities.
(l) Indemnification Procedure. For the purposes of
administering the indemnification provisions of this Section 5.4, the following
procedures shall apply from and after the Closing Date:
(i) 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 or director 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 Section 5.4 (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.
(ii) 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; provided, however, that,
subject to clause (iv) hereof, Purchaser shall have the sole right,
with counsel of its choice, to defend, settle or otherwise dispose of,
in its sole discretion, any action, claim or proceeding that
constitutes a Non-Assumable Claim, and the Sellers shall not be
entitled to assume the defense thereof, except that the Sellers shall
be entitled (but not obligated) to assume the defense, settlement or
other disposition of any Non-Assumable Claim of the type described in
clause (i) of the definition thereof that relates to Tax items of any
Seller and does not involve Tax items of Purchaser or any Purchaser
Affiliate. 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).
In the event the indemnified party elects to defend, settle or
otherwise dispose of a Non-Assumable Claim, it shall pursue such
defense, settlement or other disposition in good faith. Promptly upon
the reasonable request of the Indemnitor the indemnified party shall
provide the Indemnitor with information summarizing any material
developments in any Non-Assumable Claim that is being defended by the
indemnified party and shall make available a designated representative
to consult with or otherwise discuss any such Non-Assumable Claim with
the Indemnitor (at mutually convenient times). Nothing herein shall be
deemed to require the indemnified party (A) to make any disclosure
that, in its judgment, could prejudice its position or waive any
privilege or (B) to take or refrain from taking any action; it being
understood that, subject to clause (iv) hereof, the defense, settlement
or other disposition of any Non-Assumable Claim shall be conducted in
the indemnified party's sole discretion. An Indemnitor's liability for
any costs and attorneys' fees and disbursements incurred by an
indemnified party in respect of a Non-Assumable Claim shall be limited
to the amount of such costs and attorneys' fees and disbursements
incurred up to and including (i) entry of one or more judgments that,
in the aggregate, resolve all issues, claims, counter-claims, actions
or proceedings resulting from, arising out of, based on or relating to,
such Non-Assumable Claim and (ii) if an indemnified party elects to
appeal any portion of such judgment(s), the entry of one or more
judgments, rulings, opinions or other orders (that, in the aggregate,
resolve all issues, claims, counter-claims, actions or proceedings that
are appealed) by the judicial forum that conducts the first level of
appellate review of such issues, claims, counter-claims, actions or
proceedings.
(iii) 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 (except as provided below) 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).
(iv) In the event indemnification is requested, the relevant
Indemnitor, its representatives and agents shall have access to the
premises, books and records of the indemnified party or parties seeking
such indemnification and their Affiliates to the extent reasonably
necessary (A) for the Indemnitor to determine if the indemnification
claim relates to an Indemnification Event and (B) to assist it in
defending or settling any action, proceeding or claim; provided,
however, that such access shall be conducted in such manner as not to
interfere unreasonably with the operation of the business of the
indemnified party or parties. Except as reasonably necessary (A) for
the Indemnitor to determine if the indemnification claim relates to an
Indemnification Event and (B) to assist it in defending or settling
such action, proceeding or claim, the indemnified party shall not be
required to disclose any information with respect to itself or any of
its Affiliates (or former Affiliates), and the indemnified party shall
not be required to participate in the defense of any claim to be
indemnified hereunder (except as otherwise expressly set forth herein),
unless otherwise required or reasonably necessary in the defense of any
claim to be indemnified hereunder.
(v) Notwithstanding anything to the contrary in this Section
5.4, the Indemnitor shall continue to pay the reasonable attorneys'
fees and disbursements and other costs of separate legal counsel for
the indemnified parties (as a group) (A) relating to their
participation in the defense of any Indemnification Event (whether or
not the Indemnitor shall have assumed the defense of such
Indemnification Event) to the extent such participation relates to a
claim or defense that the Indemnitor does not have, may not assert on
behalf of the indemnified party or that the indemnified party shall
have reasonably concluded (based on advice of outside counsel) relates
to a claim or defense as to which the Indemnitor may have a conflict of
interest, or (B) relating to discovery against or testimony of such
indemnified party and for participation of such indemnified party's own
counsel in such discovery and testimony.
(vi) 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 notice thereof to the Indemnitor. If
the Indemnitor does not respond to such notice within 45 days after
receipt of notice, it shall have no further right to contest the
validity of such claim.
(vii) With respect to any Non-Assumable Claim, upon the
receipt by the indemnified party of an offer of compromise relating to
such Non-Assumable Claim that includes an unconditional release of the
indemnified party or upon entry of a final judgment with respect to
such Non-Assumable Claim (and such offer to compromise or judgment
requires only the payment of money), the Indemnitor shall have the
right to terminate its liability for subsequent legal fees and
disbursements in respect of such Non-Assumable Claim upon its
irrevocable offer to the indemnified party to pay (and establishment of
ability to pay as described in clause (iii) above) the amount contained
in such offer to compromise or judgment; upon receipt, in the form of
immediately available funds by the indemnified party of the amount
contained in such offer to compromise or judgment and payment of all
other Damages suffered or incurred by the indemnified party in respect
of such Non-Assumable Claim, the Indemnitor shall have no further
liability to the indemnified party in respect of such Non-Assumable
Claim.
(m) Any payments under Section 5.3 or 5.4 of this Agreement
shall be treated by the parties hereto for federal, state and local income tax
purposes (whether foreign or domestic) as a non-taxable reimbursement or
purchase price adjustment, except to the extent that a contrary treatment is
required by law.
(n) [Intentionally Omitted.]
(o) Purchaser may satisfy any claims for the payment of
liabilities on behalf of any Seller for which Purchaser is entitled to
indemnification pursuant to this Section 5.4 without being required to pursue a
right of subrogation against such Seller in lieu of claiming indemnification
therefor.
(p) Notwithstanding anything to the contrary in this
Agreement, the amount of Damages which an Indemnitor is required to pay to, for
or on behalf of any indemnified party pursuant to this Section 5.4 shall be
adjusted (including, without limitation, retroactively) (i) by any insurance
proceeds actually recovered by such indemnified party in reduction of the
related indemnifiable loss (the "Indemnifiable Loss"), (ii) to take account of
any net actual reduction of Tax liability that is actually realized by such
indemnified party as a result of any Indemnifiable Loss (a "Tax Benefit") and
(iii) to take into account any actual increase in Tax liability that is imposed
on the indemnified party as a result of the receipt of the Indemnity Payment (as
defined below) pursuant to this Section 5.4 (a "Tax Liability"); provided that
although an indemnified party shall be under no obligation to seek or pursue any
such insurance recovery or Tax Benefit an Indemnitor shall be entitled to reduce
payments otherwise required pursuant to this Section 5.4 (or, as the case may
be, if such payments have been made, promptly receive reimbursement therefor) in
respect of Indemnifiable Loss to the extent insurance proceeds actually are
recovered, or a Tax Benefit is actually realized, by such indemnified party in
reduction of such Indemnifiable Loss (but only to the extent that such insurance
recovery or Tax Benefit was not already taken into account in determining the
amount of such Indemnifiable Loss); and provided, further, that the
determination as to whether an indemnified party has actually realized a Tax
Benefit or a Tax Liability, and the amount thereof, shall be determined by such
indemnified party in its sole discretion and the Indemnitor shall not have the
right to review or comment thereon. Amounts required to be paid, as reduced or
increased pursuant to this Section 5.4(p), are hereafter sometimes called an
"Indemnity Payment." If an indemnified party shall have received or shall have
had paid on its behalf an Indemnity Payment in respect of an Indemnifiable Loss
and shall subsequently receive insurance proceeds in respect of such
Indemnifiable Loss, or actually realize any Tax Benefit as a result of such
Indemnifiable Loss as determined by such indemnified party as provided above, or
actually realize any Tax Liability in respect of such Indemnity Payment, then
the indemnified party shall pay to the Indemnitor the amount of such insurance
proceeds or Tax Benefit or, if lesser, the amount of the Indemnity Payment or
the Indemnitor shall pay to the indemnified party the amount of such Tax
Liability, as the case may be. To the extent that Purchaser or any Purchaser
Affiliate may obtain recovery from any insurance policy of an Obligor for any
Damages incurred by Purchaser or any Purchaser Affiliate giving rise to an
indemnity claim hereunder, Purchaser shall use its commercially reasonable
efforts to, or to cause such Purchaser Affiliate to use its commercially
reasonable efforts to, seek such recovery from such insurance policy.
(q) Any dispute, controversy or claim arising out of or
relating to this Section 5.4 (a "Dispute") shall be resolved in accordance with
the procedure set forth herein.
(i) All communications between the parties or their
representatives in connection with the attempted resolution of any
Dispute shall be deemed to have been delivered in furtherance of a
Dispute settlement and shall be exempt from discovery and production,
and shall not be admissible in evidence (whether as an admission or
otherwise), in any arbitral or other proceeding for the resolution of
the Dispute.
(ii) After completion of any prior procedures required hereby,
either party may submit the Dispute for resolution by arbitration
pursuant to the Rules of the Center for Public Resources ("CPR") for
Non-Administered Arbitration of Business Disputes as in effect at the
time of the arbitration. The parties consent to a single, consolidated
arbitration for all Disputes existing at the time such Dispute arises
initially for which arbitration is permitted.
(iii) The neutral organization for purposes of the CPR rules
will be the CPR. The arbitral tribunal shall be composed of one
arbitrator selected by agreement of the parties or, in the absence of
such agreement within 60 days after either party first proposes an
arbitrator, by the CPR. Any arbitration hereunder shall be conducted in
Chicago, Illinois. Each party shall be permitted to present its case,
witnesses and evidence, if any, in the presence of the other party. A
written transcript of the proceedings shall be made and furnished to
the parties. The arbitrator shall determine the Dispute in accordance
with the law of Illinois, without giving effect to any conflict of law
rules or other rules that might render such law inapplicable or
unavailable, and shall apply this Agreement according to its terms.
(iv) The parties agree to be bound by any award or order
resulting from any arbitration conducted hereunder and further agree
that:
(A) any monetary award shall include preaward
interest, to the extent appropriate, and shall be made and
payable in U.S. dollars through a bank selected by the
recipient of such award, free of any withholding tax or other
deduction, together with interest thereon at the
Indemnification Rate (as of the date of such award) from the
date the award is granted to the date it is paid in full;
(B) in the context of an attempt by either party to
enforce an arbitral award or order, any defenses relating to
the parties' capacity or the validity of this Agreement or any
related agreement under any law are hereby waived; and
(C) judgment on any award or order resulting from an
arbitration conducted under this Section may be entered and
enforced in any court, in any country, having jurisdiction
thereof or having jurisdiction over any of the parties or any
of their assets.
(v) Except as expressly permitted by this Agreement, no party
will commence or voluntarily participate in any court action or
proceeding concerning a Dispute, except for enforcement as contemplated
by Section 5.4(q)(iv)(C) above. For purposes of enforcement of any
undisputed obligation, the parties hereto submit to the non-exclusive
jurisdiction of the courts of the Northern District of Illinois.
(vi) In addition to the authority otherwise conferred on the
arbitral tribunal, the tribunal shall have the authority to make such
orders for interim relief, including injunctive relief, as it may deem
just and equitable.
(r) The indemnification obligations of the Sellers pursuant to
this Section 5.4 shall survive the confirmation of a plan in, or dismissal or
conversion to a case under Chapter 7 of the Bankruptcy Code of, the Chapter 11
Cases.
(s) Exclusive Remedy. The indemnification provided for in this
Section 5.4 shall be the exclusive remedy for asserting claims for monetary
Damages as a result of (i) the breach of any representation or warranty made by
any Seller or Purchaser in this Agreement, the Seller Related Documents or the
Purchaser Related Documents or (ii) the failure to perform any covenant,
agreement or undertaking on the part of all such parties contained in this
Agreement, the Seller Related Documents and the Purchaser Related Documents, in
each case other than as a result of fraud or intentional misconduct.
5.5 Preparation of Closing Date Schedule of Assets Acquired
and Liabilities Assumed; Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed; Special Procedures Report of Assets Acquired and
Liabilities Assumed; and Purchase Price Certificate.
(a) Preparation of Schedules of Assets Acquired and
Liabilities Assumed.
(i) As soon as practicable following each Closing, the Sellers
shall prepare a draft of the Closing Date Schedule of Assets Acquired
and Liabilities Assumed and a draft of the Adjusted Closing Date
Schedule of Assets Acquired and Liabilities Assumed with respect to the
Purchased Assets acquired at such Closing. The draft Closing Date
Schedule of Assets Acquired and Liabilities Assumed shall be prepared
in accordance with the Accounting Principles and the draft Adjusted
Closing Date Schedule of Assets Acquired and Liabilities Assumed shall
reflect the Special Adjustments. At a minimum, the Adjusted Closing
Date Schedule of Assets Acquired and Liabilities Assumed shall
differentiate the assets among those described in Sections 2.2(a)(i),
2.2(a)(ii) and 2.2(b) for purposes of calculating the Purchase Price.
The Sellers shall use their commercially reasonable efforts to cause
the draft Closing Date Schedule of Assets Acquired and Liabilities
Assumed and the draft Adjusted Closing Date Schedule of Assets Acquired
and Liabilities Assumed to be completed within 30 days following the
applicable Closing Date and, upon completion, such draft schedules
shall promptly be provided to Seller's Accountants.
(ii) Within 30 days following the delivery of the draft
Closing Date Schedule of Assets Acquired and Liabilities Assumed and
the draft Adjusted Closing Date Schedule of Assets Acquired and
Liabilities Assumed to Seller's Accountants as set forth in clause (i)
above, the Sellers will cause Seller's Accountants to inform
Purchaser's Accountants of the scope and nature of the special
procedures that will be performed by Seller's Accountants on the
Closing Date Schedule of Assets Acquired and Liabilities Assumed and
the Adjusted Closing Date Schedule of Assets Acquired and Liabilities
Assumed.
(iii) Immediately following the delivery of the draft Closing
Date Schedule of Assets Acquired and Liabilities Assumed and the draft
Adjusted Closing Date Schedule of Assets Acquired and Liabilities
Assumed to Seller's Accountants, as set forth in clause (i) above,
Sellers shall cause Seller's Accountants to perform the special
procedures to review the draft Closing Date Schedule of Assets Acquired
and Liabilities Assumed and the draft Adjusted Closing Date Schedule of
Assets Acquired and Liabilities Assumed, and such special procedures
shall be sufficient to permit Seller's Accountants to state that the
Closing Date Schedule of Assets Acquired and Liabilities Assumed fairly
presents the Purchased Assets and Assumed Liabilities, as of the
Closing Date in accordance with the Accounting Principles, and that the
Adjusted Closing Date Schedule of Assets Acquired and Liabilities
Assumed accurately reflects the Special Adjustments.
(iv) The Sellers shall use their commercially reasonable
efforts to cause Seller's Accountants to deliver the Special Procedures
Report of Assets Acquired and Liabilities Assumed, together with its
report of the special procedures utilized to develop the Special
Procedure Report of Assets Acquired and Liabilities Assumed, to each of
the Sellers, Purchaser and Purchaser's Accountants within 60 days
following the date of delivery of the draft Closing Date Schedule of
Assets Acquired and Liabilities Assumed and the draft Adjusted Closing
Date Schedule of Assets Acquired and Liabilities Assumed to the
Seller's Accountants as set forth in clause (i) above. Concurrent with
the delivery to the Sellers, Purchaser and Purchaser's Accountants of
the Special Procedures Report of Assets Acquired and Liabilities
Assumed, the Sellers shall cause Seller's Accountants to deliver to the
Sellers, Purchaser and Purchaser's Accountants a certificate (the
"Purchase Price Certificate") showing in reasonable detail the
calculations used to derive the Purchase Price. During the 30 days
following their receipt of the Special Procedures Report of Assets
Acquired and Liabilities Assumed and Purchase Price Certificate, the
Sellers, Seller's Accountants, Purchaser and Purchaser's Accountants
shall have the opportunity to review the Special Procedures Report of
Assets Acquired and Liabilities Assumed and Purchase Price Certificate
(together with Seller's Accountants' working papers) and, during such
30-day period, the Sellers, Seller's Accountants, Purchaser and
Purchaser's Accountants shall have the right to propose those changes
to the Special Procedures Report of Assets Acquired and Liabilities
Assumed and Purchase Price Certificate, the Sellers, Seller's
Accountants, Purchaser or Purchaser's Accountants determine to be
appropriate in order to cause the Special Procedures Report of Assets
Acquired and Liabilities Assumed to conform to clause (iii) above and
the Purchase Price Certificate to reflect the calculation of the
Purchase Price in accordance with to Section 2.2. Items, procedures and
calculations associated with the Special Procedure Report of Assets
Acquired and Liabilities Assumed and the Purchase Price Certificate as
to which no change is proposed in the 30-day period will be deemed to
have been accepted and become final.
(v) Following the delivery of the Special Procedures Report of
Assets Acquired and Liabilities Assumed referred to in clause (iv)
above, Purchaser's Accountants shall be entitled to perform all
procedures and take any other steps that Purchaser's Accountants, in
the exercise of their professional judgment, deem appropriate to
confirm that the Special Procedures Report of Assets Acquired and
Liabilities Assumed has been prepared in accordance with clause (iii)
above and the Purchase Price Certificate reflects the calculation of
the Purchase Price in accordance with Section 2.2.
(vi) In the event of any dispute between Purchaser and
Purchaser's Accountants, on the one hand, and the Sellers and Seller's
Accountants, on the other hand, regarding any of the adjustments
proposed by Purchaser or Purchaser's Accountants, on the one hand, or
the Sellers or Seller's Accountants, on the other hand, with respect to
the Special Procedures Report of Assets Acquired and Liabilities
Assumed or the Purchase Price Certificate, which Purchaser and
Purchaser's Accountants, on the one hand, and the Sellers and Seller's
Accountants, on the other hand, cannot resolve within 15 days after
expiration of the 30-day period referred to in clause (iv) above, each
of the Sellers or Purchaser shall have the right, upon delivery of
written notice to the other party, to require that such dispute be
resolved in accordance with the provisions set forth in Section 5.5(b).
Promptly following the resolution of all disputes with respect to any
proposed adjustments to the Special Procedures Report of Assets
Acquired and Liabilities Assumed and Liabilities Assumed or the
Purchase Price Certificate, the Sellers shall cause Seller's
Accountants to prepare and deliver to the Sellers, Purchaser and
Purchaser's Accountants the final Special Procedures Report of Assets
Acquired and Liabilities Assumed and the final Purchase Price
Certificate, each of which shall reflect all adjustments thereto which
have been agreed upon by Purchaser and Purchaser's Accountants, on the
one hand, and the Sellers and Seller's Accountants, on the other hand,
and which have been resolved pursuant to Section 5.5(b).
(vii) Each of the Sellers, Purchaser, Seller's Accountants and
Purchaser's Accountants shall have full access to all relevant
accounting, financial and other records reasonably requested by it in
connection with the preparation, confirmation or review of the Special
Procedures Report of Assets Acquired and Liabilities Assumed and the
Purchase Price Certificate as well as Seller's Accountants' working
papers with respect thereto, and each party shall make available to the
other party and its accountants such personnel as they may reasonably
request in connection with the preparation or confirmation of the
Special Procedures Report of Assets Acquired and Liabilities Assumed
and the Purchase Price Certificate or the review of Seller's
Accountants' report of the special procedures utilized to develop the
Special Procedure Report of Assets Acquired and Liabilities Assumed.
(b) Conflict Resolution Mechanism. Any dispute involving any
of the adjustments to the Special Procedures Report of Assets Acquired and
Liabilities Assumed and the Purchase Price Certificate proposed by the Sellers,
Seller's Accountants, Purchaser or Purchaser's Accountants including, without
limitation, any interpretation or application of any provision of this Agreement
affecting the preparation of the Special Procedures Report of Assets Acquired
and Liabilities Assumed, and the Purchase Price Certificate, not resolved by the
Sellers, Seller's Accountants, Purchaser and Purchaser's Accountants within 15
days after the expiration of the 30-day period referred to in clause (iv) above,
upon the election of any Seller or Purchaser, shall be resolved by the Selected
Accounting Firm. The Selected Accounting Firm shall resolve only issues upon
which Purchaser, Purchaser's Accountants, the Sellers and Seller's Accountants
have been unable to agree. The decision of such Selected Accounting Firm shall
be rendered within 45 days after appointment of the Selected Accounting Firm.
The decision of the Selected Accounting Firm shall be final and binding upon the
parties. Notwithstanding the foregoing, if the aggregate of all amounts in
dispute with respect to all disputes referred to in this Section 5.5(b) shall be
less than $250,000, such disputes shall not be resolved by the Selected
Accounting Firm but shall instead be resolved as follows: 50% of the aggregate
of all amounts in dispute shall be deemed to have been resolved in Sellers'
favor and 50% of the aggregate of all amounts in dispute shall be deemed to have
been resolved in Purchaser's favor.
(c) Payment of Fees. The Sellers shall pay all of the fees of
Seller's Accountants and all expenses incurred by such firm, and Purchaser shall
pay all of the fees of Purchaser's Accountants and all expenses incurred by such
firm, and each of the Sellers and Purchaser shall pay one half of the fees of
the Selected Accounting Firm and all expenses incurred by such firm, each in
connection with the tasks outlined in this Section 5.5.
(d) Cooperation. The Sellers and Purchaser shall use their
respective commercially reasonable efforts to cause Purchaser's Accountants and
Seller's Accountants to cooperate with each other in connection with all of
their activities undertaken in connection with this Section 5.5. After delivery
to Purchaser and the Purchaser's Accountants of the Special Procedures Report of
Assets Acquired and Liabilities Assumed, the Sellers shall instruct Seller's
Accountants to make available to Purchaser's Accountants their work papers from
the special procedures performed on the Closing Date Schedule of Assets Acquired
and Liabilities Assumed and Adjusted Closing Date Schedule of Assets Acquired
and Liabilities Assumed.
5.6 Insurance; Risk of Loss. To the extent that any insurance
policies owned or controlled by any Seller (collectively, the "Seller's
Insurance Policies") (i) cover any Damages as to which the Purchaser Indemnified
Parties are entitled to indemnification under Section 5.4 (subject to the
limitations on indemnification contained in Section 5.4, including Section
5.4(s)) and (ii) permit claims to be made thereunder with respect to such
Damages ("Seller Claims"), each 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 (subject to the limitations on indemnification contained in
Section 5.4, including Section 5.4(s)). Purchaser shall bear the out-of-pocket
expenses of the Sellers and their respective Affiliates in the preparing,
submitting or pursuing such Seller Claims.
5.7 Further Assurances.
(a) All amounts which are received by any Seller in respect of
the Purchased Assets (including, without limitation, account receivable and
other payments) which are properly allocable to period after the Closing Date
shall be received by each Seller as agent, in trust for and on behalf of
Purchaser and Purchaser Affiliates, as applicable, and, following the Closing
applicable to the Purchased Assets to which such amounts relate, the Sellers
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 included in the Excluded Assets (or which are paid in respect of
Excluded Assets) received by Purchaser or any Purchaser Affiliate following the
Closing shall be received by Purchaser or such Purchaser Affiliate as agent, in
trust for and on behalf of the applicable Seller, and Purchaser shall promptly
pay or cause to be promptly paid all of such amounts over to such Seller and
shall provide to such Seller information as to the nature, source and
classification of such payments, including any invoice relating thereto.
(b) In addition to the foregoing, after the Closing, each
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 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) Purchaser will, after the Closing, whenever and as often
as reasonably requested to do so by any 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 necessary or
proper in order to complete, ensure and perfect the consummation of the
transactions contemplated hereby.
5.8 Payment of Broker's or Finder's Fees. The Sellers shall
pay any and all brokers' or finders' fees, and any other commissions or similar
fees, payable to any Person acting on behalf of the Sellers 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.
5.9 Supplements to Schedules; Post-Signing Information. Not
earlier than ten nor later than five Business Days prior to the Closing, the
Sellers and Purchaser will supplement or amend the schedules relating to such
party's respective representations and warranties in this Agreement with respect
to any matter, condition or occurrence hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such schedules or would otherwise have been inconsistent
with such party's representations herein. Each Seller shall deliver to Purchaser
copies of any Environmental Reports prepared between the date of this Agreement
and the Closing Date promptly following receipt thereof. No supplement or
amendment to the schedules hereto by either party, and no information contained
in any Environmental Report delivered pursuant hereto, shall be deemed to cure
(or affect the rights of any party with respect to) any breach of any
representation or warranty made in this Agreement or have any effect for the
purpose of determining satisfaction of the conditions set forth in Sections 6.2
and 6.3.
5.10 [Intentionally Omitted.]
5.11 [Intentionally Omitted.]
5.12 Certain Bankruptcy Matters.
(a) On or before three Business Days after the execution of
this Agreement, the Sellers shall file a motion with the Bankruptcy Court
seeking entry of an order in the form attached hereto as Exhibit A (with such
changes thereto as Purchaser shall approve in its reasonable discretion, the
"Approval Order"). Each Seller agrees to file an affidavit of service with the
Bankruptcy Court within three days thereafter that indicates the name and
address of each Person upon whom notice of the motions seeking entry of the
Approval Order was served, the method of service and includes any and all proofs
of such service.
(b) [Intentionally Omitted.]
(c) Purchaser and the Sellers agree to make promptly any
filings, to take all actions and to use their reasonable best efforts to obtain
entry of the Approval Order and any and all other approvals and orders necessary
or appropriate for the consummation of the transactions contemplated hereby;
provided, however neither Purchaser nor any Purchaser Affiliate shall be
required to cease operating or divest itself of any of its businesses or assets.
Each Seller shall provide each applicable taxing authority in each jurisdiction
in which it is subject to Tax with copies of any motion for entry of the
Approval Order or any other order relating to the transactions contemplated by
this Agreement at least 10 days prior to the hearing on such motion.
(d) If the Approval Order or any other orders of the
Bankruptcy Court relating to this Agreement shall be appealed by any Person (or
a petition for certiorari or motion for rehearing, reargument or stay shall be
filed with respect thereto), each Seller agrees to take all steps as may be
reasonable and appropriate to defend against such appeal, petition or motion,
and Purchaser agrees to cooperate in such efforts. Each party hereto agrees to
use its reasonable best efforts to obtain an expedited resolution of such
appeal, provided that nothing herein shall preclude the parties hereto from
consummating the transactions contemplated herein if the Approval Order shall
have been entered and have not been stayed and Purchaser has waived in writing
the requirement that the Approval Order be a Final Order in which event
Purchaser shall be able to assert the benefits of Section 363(m) of the
Bankruptcy Code as a consequence of which such appeal shall become moot.
5.13 Tax Payments. From and after the Closing Date, the
Sellers shall use that portion of the Purchase Price placed in escrow pursuant
to Section 2.6 to pay and discharge all personal property, ad valorem and other
Tax payments for which any Seller is responsible pursuant to Section 2.5 and
Section 5.3(c).
5.14 Confirmations. Between the date of this Agreement and the
Closing, the Sellers shall engage an independent accounting firm, acceptable to
Purchaser, that shall attempt to obtain from each of the Top 30 Obligors
identified on Schedule 5.14(2) under the Financing Contracts of the type
specified in the definition of Purchased Financing Contracts, without giving
effect to clause (H)(y) of the proviso thereof, a confirmation in the form
attached hereto as Schedule 5.14 (that has been completed with the appropriate
data) (a "Lease Confirmation"), or a confirmation of such information by the
Obligor verbally to the extent deemed satisfactory to Purchaser in its sole
discretion, of the validity of the data set forth in such Lease Confirmation,
and each Seller shall use its commercially reasonable efforts to cooperate with
such accounting firm to obtain such Lease Confirmations; provided, however, the
Sellers shall not be required to request or obtain a Lease Confirmation with
respect to any Financing Contract that (i) has a remaining unexpired term of
twelve (12) months or less from May 31, 2002, (ii) has reached the end of its
original lease term and is being billed on a month-to-month basis or pursuant to
an extension or renewal of the lease term which does not have a fixed renewal or
extension term of more than twelve (12) months remaining from May 31, 2002. The
Sellers' shall, or shall cause such accounting firm to, deliver to Purchaser,
true and correct copies of the Lease Confirmations sent to and received from Top
30 Obligors. The Sellers and Purchaser hereby agree that the process of
obtaining Lease Confirmations pursuant to this Section 5.14 with respect to the
Top 30 Obligors shall be substantially similar to the process agreed to by the
parties and in effect, as of the date of this Agreement, for the obtaining of
Lease Confirmations pursuant to that certain Asset Purchase Agreement
(Electronics), dated as of January 23, 2002 (as amended, restated or otherwise
modified), between Purchaser and Comdisco and that certain Asset Purchase
Agreement (Lab and Scientific), dated as of January 23, 2002 (as amended,
restated or otherwise modified), between Purchaser and Comdisco. Purchaser
acknowledges and agrees that the Sellers shall not be required to obtain Lease
Confirmations with respect to any Financing Contracts between any Seller and any
Obligor other than the Top 30 Obligors.
5.15 [Intentionally Omitted.]
5.16 [Intentionally Omitted.]
5.17 [Intentionally Omitted.]
5.18 [Intentionally Omitted.]
5.19 Schedule of Credit Enhancements. The Sellers shall have
delivered an updated Schedule 3.18(d) (updated as of the date of delivery
thereof) not more than 10 days and not less than 3 days prior to Closing.
5.20 [Intentionally Omitted.]
5.21 [Intentionally Omitted.]
5.22 Original Master Leases. From and after the Closing (or
Second Closing, if applicable), Purchaser shall hold, and shall cause the
applicable Purchaser Affiliate to hold, all original master lease agreements and
applicable schedules and Credit Enhancements thereto delivered to Purchaser or
the applicable Purchaser Affiliate at the Closing for the benefit of the
applicable Sellers solely to the extent such original documents relate to a
Financing Contract that is an Excluded Asset. Purchaser shall permit, and shall
cause the applicable Purchaser Affiliate to permit, upon the written request of
the Sellers, any Seller to use such original master lease agreements or
applicable schedules and Credit Enhancements thereto for the purposes of
enforcing such Seller's rights under any Financing Contract that is an Excluded
Asset. Such Seller shall return to Purchaser or the applicable Purchaser
Affiliate any original master lease or applicable schedules and Credit
Enhancements thereto promptly following such time as such Seller no longer
requires such master lease, schedule or Credit Enhancement for the purposes
described herein. In the event Purchaser (or any Purchaser Affiliate) and any
Seller require an original master lease agreement or schedule or Credit
Enhancement thereto in order to commence, pursue or enforce concurrent actions
against a particular Obligor or guarantor (or such Obligor's Affiliates or any
provider of such Credit Enhancement) under a Financing Contract, Purchaser and
shall cause its Purchaser Affiliates and the Sellers shall to cooperate with one
another in connection with the use of such original documents pursuant to such
concurrent actions.
5.23 Purchased Discounted Financing Agreements. At the
Closing, the Sellers shall deliver to Purchaser all original documents
evidencing the Purchased Discounted Financing Agreements.
5.24 Closing Date Portfolio Information. Within 30 days after
each Closing Date, the Sellers shall deliver to Purchaser the Closing Date
Portfolio Tape, and the Portfolio Information, as of the Closing Date, described
in items (A) through (E) of the definition thereof.
5.25 Administrative Claims. All amounts to be paid to
Purchaser pursuant to this Agreement shall constitute an allowed administrative
expense claim with priority over any and all administrative expenses of the kind
specified in Sections 503, 507 and 1114 of the Bankruptcy Code, and shall be, at
Purchaser's option and as otherwise permitted by this Agreement, (i) immediately
payable if and when any such obligation of any Seller arises under this
Agreement or (ii) credited against any amounts owed by Purchaser to any Seller
pursuant to this Agreement.
ARTICLE VI
CONDITIONS TO CLOSING;
ABANDONMENT OF THE TRANSACTION
6.1 The Closing.
(a) Unless this Agreement has been terminated and the
transactions herein abandoned pursuant to Article 7, the Closing of the sale of
the Purchased Assets hereunder shall (subject to Sections 6.2 and 6.3) be held
at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) or such other
location as the parties may mutually agree upon, on the last Business Day in the
month that the conditions to Closing have been satisfied or waived (other than
those 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 at such other times as the parties may mutually agree. If any
of the conditions specified in Section 6.2 hereof have not been satisfied,
Purchaser may nevertheless at its election waive such conditions and proceed
with the transactions contemplated hereby, and, if any of the conditions
specified in Section 6.3 hereof have not been satisfied, the Sellers may
nevertheless at their election waive such conditions and proceed with the
transactions contemplated hereby. Any such election to proceed shall be
evidenced by a certificate executed on behalf of the electing party by its
authorized representative.
(b) Purchaser and the Sellers shall hold a second closing (the
"Second Closing") on the last Business Day of the month immediately following
the month in which the initial Closing occurs or at such other date as the
parties may mutually agree. At the Second Closing, provided the conditions in
Section 6.2 and 6.3 have been satisfied or waived, the Sellers shall transfer to
Purchaser, or a Purchaser Affiliate, such Financing Contracts that did not meet
the requirements of a Purchased Financing Contract on the Closing Date (and
accordingly were not transferred on the Closing Date) but which do meet the
requirements of a Purchased Financing Contract at such Second Closing.
Notwithstanding anything to the contrary contained in this Section 6.1(b), in
the event that the Second Closing shall not have occurred on or before June 30,
2002, either party hereto, by written notification to the other, may terminate
the obligations hereunder to effect the Second Closing and the transactions
contemplated thereby. In the event of the termination of such obligations
pursuant to this Section 6.1(b), no party hereto shall have any liability or
further obligation to any other party to this Agreement resulting from such
termination except no party waives any claim or right against a breaching party
to the extent that such termination results from the breach by a party hereto of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
6.2 Conditions to Purchaser's Obligations to Close. The
obligations of Purchaser or the Purchaser Affiliates to purchase the Purchased
Assets and to otherwise consummate the Closing shall be subject to the following
conditions:
(a) Except to the extent waived in writing by Purchaser
hereunder, (i) the representations and warranties of each Seller contained
herein (other than the representation and warranty contained in Section 3.7(a))
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 and
(ii) there shall not have occurred any effect, result, occurrence, event, fact,
set of facts or change that would constitute a Material Adverse Effect between
the date of this Agreement and the Closing; each 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
such Seller at or prior to the Closing (except to the extent waived hereunder in
writing by Purchaser); and each Seller shall have delivered to Purchaser a
certificate of such Seller in form and substance reasonably satisfactory to
Purchaser, dated the Closing Date, and signed on behalf of such Seller by its
authorized representative, in his (or her) respective representative capacity,
and not individually, to all such effects and certifying the satisfaction of the
conditions set forth in this Section 6.2 (except to the extent waived hereunder
in writing by Purchaser). For the avoidance of doubt, the Sellers and Purchaser
agree that for the purpose of determining whether representations and warranties
are true and correct in all respects at Closing, any Purchased Assets
transferred to Purchaser or any Purchaser Affiliate at a prior Closing shall not
be deemed a Purchased Asset at a subsequent Closing.
(b) (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) (A) No action or proceeding shall have been instituted
and, at what would otherwise have been the Closing Date, remain pending
before a Governmental Entity, (1) to restrain, prohibit or otherwise
challenge the sale of the Purchased Assets to Purchaser or the
performance of the material obligations of the parties hereto, or (2)
seeking substantial damages from Purchaser or any of its Affiliates as
a result of the sale of the Purchased Assets to the Purchaser or the
performance of the material obligations of the parties hereto;
provided, that, damages of $10 million or more with respect to Taxes or
any indemnities with respect thereto shall be deemed substantial
damages for purposes of this clause (2), and (B) and 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, to force divestiture if the same are
consummated or to materially modify the terms or results of such
transactions unless such Governmental Entity shall have withdrawn such
notice, or has otherwise indicated in writing that it will not take any
action, prior to what would otherwise have been the Closing Date;
provided, further, if any such action or proceeding shall have been
instituted and, at what would otherwise have been the Closing Date,
remain pending before a Governmental Entity, Purchaser may, at its
option, elect to exclude such assets (and related liabilities) from the
Purchased Assets and Assumed Liabilities notwithstanding the
definitions thereof to the extent necessary to enable the conditions
set forth in this subparagraph (b)(ii)(B) to be satisfied.
(c) 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 each Seller and Purchaser of the transactions contemplated by
this Agreement (including, without limitation, the expiration of any applicable
waiting period under the HSR Act and similar legislation in other jurisdictions
shall have been obtained; provided, however, if any requisite Authorizations,
consents and approvals of any Governmental Entity required for the acquisition
by Purchaser or a Purchaser Affiliate of a portion of the Purchased Assets shall
not have been obtained by the Closing, Purchaser may, at its option, elect to
exclude such assets (and related liabilities) from the Purchased Assets and
Assumed Liabilities notwithstanding the definitions thereof to the extent
necessary to enable the conditions set forth in this subparagraph (c) to be
satisfied.
(d) On the Closing Date, the Seller shall have (i) delivered
to Purchaser or any Purchaser Affiliate (1) the original master lease, original
applicable schedules and original Credit Enhancements thereto (other than master
leases, schedules and Credit Enhancements related to any Purchased Discounted
Financing Agreement to the extent copies thereof certified as true, correct and
complete by an officer of the applicable Seller, have been provided to Purchaser
and in the case of master leases that are not the subject of any Purchased
Discounted Financing Agreement, to the extent copies of master leases certified
as true, correct and complete by the applicable Obligor have been provided to
Purchaser, in all cases if such original master leases are not in Sellers'
possession) and the documents, to the extent in the possession of any Seller
described on Schedule 5.1(a) with respect to each Purchased Financing Contract
that Seller has in its possession, and (2) any and all escrows, deposits,
security, impounds, accounts or other or additional collateral relating to each
Purchased Financing Contract (in each case that is a Purchased Asset); and (ii)
executed, acknowledged and delivered to Purchaser or any Purchaser Affiliate the
Transfer Agreements and such other transfer instruments or documents as may be
necessary to transfer, or evidence the transfer, of each Purchased Financing
Contract and each other Purchased Asset to Purchaser or any Purchaser Affiliate,
all in such form as Purchaser or its counsel may reasonably request specifically
identified to the Sellers by Purchaser at least 60 days prior to Closing; and
(iii) executed and delivered to Purchaser or any Purchaser Affiliate UCC-1
financing statements naming Purchaser, and/or an applicable Purchaser Affiliate,
as the "purchaser" and each Seller as the "seller" and describing the Purchased
Assets in the United States, to be filed with the Secretary of State of the
State of Illinois and the Secretary of State of the State of Delaware. Delivery
to Purchaser of any document described on Schedule 5.1(a) other than the
original master lease, applicable schedules and Credit Enhancements thereto
described above shall not be a condition to Closing.
(e) Since the date of the Approval Order, there shall not have
occurred any effect, result, occurrence, event, fact, set of facts or change
that constitutes a Material Adverse Effect.
(f) Each Seller shall have executed the Transitional Services
Agreement.
(g) [Intentionally Omitted.]
(h) [Intentionally Omitted.]
(i) The Approval Order and any other orders of the Bankruptcy
Court with respect to this Agreement shall have been entered, shall be
in form and substance reasonably satisfactory to Purchaser, and shall
have each become a Final Order.
(j) Each Seller that is domiciled in the United States shall
have delivered a certificate of non-foreign status in accordance with Section
1445 of the Code, and any similar state required documents requested by the
Purchaser.
(k) [Intentionally Omitted.]
(l) At the Closing, the Sellers shall provide Purchaser with
(i) a copy of the Approval Order that has been certified by the Clerk of the
Bankruptcy Court and (ii) a copy of the Bankruptcy Court's docket for the
eleven-day period subsequent to entry of the Approval Order that has been
certified by the Clerk of the Bankruptcy Court or, if the Closing has not
occurred on the thirteenth day following entry of the Approval Order on the
Bankruptcy Court's docket, a copy of the Bankruptcy Court's docket certified by
the Clerk of the Bankruptcy Court for the period commencing on and including the
date of entry of the Approval Order through and including the date that is two
days before the Closing.
6.3 Conditions to Sellers' Obligations to Close. The
obligations of the Sellers to sell the Purchased Assets and to otherwise
consummate the Closing shall be subject to the following conditions:
(a) Except to the extent waived in writing by the Sellers
hereunder, the representations and warranties of Purchaser contained herein
shall be true and correct in all material respects at the Closing, in each case
with the same effect as though made at and as of such time with the same effect
as though made at and as of such time (without giving effect to any materiality
or Material Adverse Effect qualifications or exceptions contained therein);
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 it at or prior to the Closing (except to the
extent waived hereunder in writing by the Sellers); and Purchaser shall have
delivered to the Sellers a certificate of Purchaser in form and substance
reasonably satisfactory to the Sellers, dated the Closing Date, and signed on
its behalf by its authorized representative, in his (or her) representative
capacity, and not individually, to all such effects and certifying the
satisfaction of the conditions set forth in this Section 6.3 (except to the
extent waived hereunder in writing by the Sellers).
(b) (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 or the
performance of the material obligations of the parties hereto.
(iii) Except to the extent Purchaser elects to exercise its
option set forth in Section 6.2(b)(ii), 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 the laws of any state thereof or the
laws of any foreign country, 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, to force
divestiture if the same are consummated or to materially modify the
terms or results of such transactions unless such Governmental Entity
shall have withdrawn such notice, or has otherwise indicated in writing
that it will not take any action, prior to what would otherwise have
been the Closing Date.
(c) Except to the extent Purchaser elects to exercise its
option set forth in Section 6.2(c), all Authorizations, consents and approvals
of any Governmental Entity required for the valid consummation by the Sellers
and Purchaser of the transactions contemplated by this Agreement in respect of
the Purchased Assets (including, without limitation, the expiration of any
applicable waiting period under the HSR Act and similar legislation in other
jurisdictions shall have been obtained, as determined after taking into account
any exclusion by Purchaser, at its option, of assets or liabilities from the
Purchased Assets and Assumed Liabilities pursuant to Section 6.2(c).
(d) Purchaser shall have made the payments required by the
provisions of Section 2.3 hereof.
(e) [Intentionally Omitted.]
(f) [Intentionally Omitted.]
(g) Purchaser (or, as applicable, the Purchaser Affiliates)
shall have executed the Transitional Services Agreement.
(h) The Approval Order shall have been entered.
(i) Purchaser and all Purchaser Affiliates shall have
executed, acknowledged and delivered to the appropriate the Seller
instruments of assumption and/or foreign instruments of assumption, as
the case may be, as may be necessary to assume, or evidence the
assumption of each Assumed Liability or other liability which Purchaser
or Purchaser Affiliates have expressly agreed to assume or be
responsible for pursuant to the terms of this Agreement, all in such
form as the Sellers or their counsel may reasonably request.
ARTICLE VII
TERMINATION
7.1 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 the Sellers and Purchaser;
(b) by either of the Sellers or Purchaser:
(i) if the Bankruptcy Court enters an order or orders
approving a sale of Seller, all, substantially all or a material
portion of the Purchased Assets to a Person (or group of Persons),
other than Purchaser or an Affiliate of Purchaser, pursuant to a higher
or otherwise better offer submitted by such Person (or group of
Persons);
(ii) 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
(iii) if the initial Closing shall not have occurred on or
before May 31, 2002; or
(c) by Purchaser, if the Approval Order in the form attached
hereto as Exhibit A (or if changes are made by the Bankruptcy Court to the
Approval Order in the form attached hereto as Exhibit A, such changes shall be
reasonably acceptable to Purchaser and Sellers) shall not have been entered by
April 30, 2002.
7.2 Procedure and Effect of Termination. In the event of
termination and abandonment of the transactions contemplated hereby pursuant to
Section 7.1, written notice thereof shall forthwith be given to the other
parties to this Agreement and this Agreement shall terminate (subject to the
provisions of this Section 7.2) 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) that the provisions of this Section 7.2,
Section 5.8, and the provisions of Article 8 hereof shall remain in full force
and effect and (ii) no party waives any claim or right against a breaching party
to the extent that such termination results from the breach by a party hereto of
any of its representations, warranties, covenants or agreements set forth in
this Agreement.
ARTICLE VIII
GENERAL
8.1 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.
8.2 Integrated Contract. Except for the Confidentiality
Agreement dated October 5, 2001, as amended, between Purchaser and Comdisco,
this Agreement and the Exhibits and Schedules hereto, and any written amendments
to this Agreement satisfying the requirements of Section 8.1 hereof, together
with the Transitional Services Agreement (i) constitute the entire agreement
among the Sellers 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.
8.3 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 Illinois, without regard to the
principles regarding the choice of law. The parties hereby agree that, without
limitation of any party's right to appeal any order of the Bankruptcy Court, and
except as provided in Section 5.4 hereof, (a) the Bankruptcy Court shall retain
exclusive jurisdiction to enforce the terms of this Agreement and to decide any
claims or disputes that may arise or result from, or be connected with, this
Agreement, any breach or default hereunder, or the transactions contemplated
herein, and (b) any and all claims, causes of action, suits and proceedings
relating to the foregoing shall be filed and maintained only in the Bankruptcy
Court, and the parties hereby consent and submit to the jurisdiction of the
Bankruptcy Court.
8.4 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 the Sellers, to:
Comdisco, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇. ▇▇▇▇▇▇, Jr., Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Esq.
and if to Purchaser, to:
General Electric Capital Corporation -
Commercial Equipment Financing
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as shall be furnished in writing by Purchaser or any
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).
8.5 No Assignment. This Agreement may not be assigned, except
by operation of law; provided that (i) any obligations of Purchaser may be
performed by a Purchaser Affiliate and any rights of Purchaser may be exercised
by a Purchaser Affiliate, (ii) 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. Notwithstanding the foregoing, however, no
assignment otherwise permitted hereunder shall, without the written consent of
the Sellers, relieve Purchaser from any of its liabilities hereunder. References
to Purchaser in this Agreement shall be deemed to include or refer to each
Purchaser Affiliate, unless the context otherwise requires.
8.6 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.
8.7 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.
8.8 Announcements. Purchaser and the Sellers agree to consult
with each other prior to issuing any press release or otherwise making any
public statement with respect to the transactions contemplated hereby, and shall
not issue any such press release or make any such public statement in such
regard prior to such consultation and without the prior consent of the other
party (which consent shall not be unreasonably withheld or delayed), except as
may be required by any law or pursuant to any listing agreement with any
securities exchange or any stock exchange regulations. 8.9 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.
8.10 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.
8.11 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.
8.12 No Third Party Beneficiary. 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 except that the parties hereto
agree and acknowledge that the agreements and covenants contained in Section 5.4
are, subject to Articles 7 and 8 hereof, intended for the benefit of the
indemnified parties referred to therein (each such Person, a "Third Party
Beneficiary"), and that, subject to Articles 7 and 8 hereof, each such
indemnified party, although not a party to this Agreement, shall be and is
hereby constituted a direct and irrevocable third-party beneficiary of the
agreements and covenants contained in Section 5.4 and shall have the right to
enforce such agreements and covenants against the applicable party thereto in
all respects fully and to the same extent as if such Third Party Beneficiary
were a party hereto. Notwithstanding the foregoing, this Agreement (including
but not limited to Section 5.4 hereof) may be amended or waived by Purchaser and
the Sellers at any time and from time to time in accordance with Section 8.1
hereof and any such amendment or waiver shall be fully effective with respect to
the rights of the Third Party Beneficiaries under Section 5.4 hereof.
8.13 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.
8.14 Expenses. Except as otherwise specifically set forth in
this Agreement, the Sellers 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. For the avoidance of doubt, Purchaser
shall bear and be responsible for the payment of all filing fees pursuant to the
HSR Act or any corresponding anti-trust, competition or similar legislation in
any other jurisdictions.
8.15 Currency. All of the dollar amounts mentioned in this
Agreement or in the Schedules or Exhibits annexed hereto shall be in U.S. 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.
COMDISCO, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chairman and Chief Executive Officer
COMDISCO HEALTHCARE GROUP, INC., a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:
(HEALTHCARE)
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Attorney-in-Fact
List of Schedules
Schedule 1.1A Accounting Principles
Schedule 1.1B Loan and Lease Balloon Rentals and Residuals
Schedule 1.1D Excluded Intercompany Agreements, Contracts and
Commitments
Schedule 1.1G Individuals with Seller's Knowledge
Schedule 1.1I Form of Delinquency Report
Schedule 1.1M Financial Statements of Assigning Subsidiaries
Schedule 1.1O Discounted Financing Agreements
Schedule 2.1(a)(iii) Purchased Other Contracts
Schedule 3.3 Conflicts
Schedule 3.4 Required Consents
Schedule 3.5 Violations of Law
Schedule 3.6(a) Financial Statements
Schedule 3.6(c) Portfolio Tape Information
Schedule 3.7(a) Absence of Certain Changes
Schedule 3.7(b) Capital Expenditures; Waivers; Modifications
Schedule 3.9(a) Disclosures Regarding Tax Returns
Schedule 3.9(c) Taxing Authority Claims
Schedule 3.9(d) Audit Reports
Schedule 3.9(e) Tax Withholdings
Schedule 3.9(f) Tax Liens
Schedule 3.9(g) Other Tax Disclosures
Schedule 3.9(o) Consistent Tax Reporting Standards
Schedule 3.12(a) Disclosures Regarding Purchased Other Contracts
Schedule 3.12(b) Disclosures Regarding Material Contracts
Schedule 3.13 Litigation
Schedule 3.17(b) Conduct of Business
Schedule 3.18(a) Purchased Financing Contracts and Credit
Enhancements
Schedule 3.18(b) Additional Disclosure Regarding Purchased
Financing Contracts and Credit Enhancements
Schedule 3.18(c) Purchased Financing Contracts subject to residual
and other agreements
Schedule 3.18(d) Certain Credit Enhancements
Schedule 3.18(f) Required Consent Financing Contracts
Schedule 3.19(b) Portfolio Property - Compliance with Laws
Schedule 3.20 Environmental Matters
Schedule 3.26 Disclosures Regarding Purchased Discounted
Financing Agreements
Schedule 5.1(a) Required Purchased Financing Documentation and
Pre-Closing Procedures
Schedule 5.14 Form of Lease Confirmation
Schedule 5.14(2) Top 30 Obligors
Exhibit A
Approval Order
[See Attached]
Exhibit B
Transitional Services Agreement
[See Attached]