Exhibit 2.1
EXECUTION VERSION
This
ASSET PURCHASE AGREEMENT, dated as of April 1, 2006, is by and
between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (the “ Purchaser ”), and IKON OFFICE
SOLUTIONS, INC., an Ohio corporation (including as successor by
merger to IOS Capital, LLC, the “ Seller ”),
each of which agrees as follows:
Section 1.01.
Certain Defined Terms . Capitalized terms used in
this Agreement shall have the meanings specified in
Exhibit A to, or elsewhere in, this
Agreement.
Section 1.02.
Interpretation and Rules of Construction . In this
Agreement, except to the extent that the context otherwise
requires:
(a) when
a reference is made in this Agreement to an article, section,
exhibit or schedule, such reference is to an Article or Section of,
or an Exhibit or a Schedule to, this Agreement unless otherwise
indicated;
(b) whenever
the words “include”, “includes” or
“including” are used in this Agreement, they are deemed
to be followed by the words “without
limitation”;
(c) the
words “the date hereof” and words of similar import,
when used in this Agreement, refer to April 1,
2006;
(d) the
words “hereof”, “herein” and
“hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any
particular provision of this Agreement; and
(e) the
definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms.
Section 2.01.
Purchased Assets .
(a)
Purchased Assets . Upon the terms and subject to the
conditions set forth in this Agreement, as of the date hereof, the
Purchaser shall purchase (or shall cause one or more Acquiring
Entities to purchase) from the Seller, and the Seller shall sell,
assign, transfer and convey (or shall cause one or more of its
Affiliates to sell, assign, transfer and convey) to the Purchaser
(or one or more Acquiring Entities) the Purchased
Assets.
(b)
Excluded Assets . The Seller shall not sell, assign,
transfer or convey (or cause any Affiliate to sell, assign,
transfer or convey) to the Purchaser or any Acquiring Entity, and
neither the Purchaser nor any Acquiring Entity shall purchase, any
Excluded Assets.
(c)
Assumed Liabilities . Upon the terms and subject to the
conditions set forth in this Agreement, effective as of the date
hereof, the Seller shall assign and delegate to the Purchaser (or
one or more Acquiring Entities), and the Purchaser shall (or shall
cause one or more Acquiring Entities to) assume and be obligated to
pay when due, perform, or otherwise discharge, only the Assumed
Liabilities.
(d)
Excluded Liabilities . Neither the Purchaser nor any
Acquiring Entity shall assume or otherwise become liable for any
Excluded Liabilities.
Section 2.02.
The Purchase Price . The purchase price to be paid by
the Purchaser for the Purchased Assets shall be an amount equal to
(a) the aggregate book value of the Purchased Assets
(determined in accordance with Sections 2.05 and
5.05 ) minus (b) the aggregate amount of the
Assumed Liabilities, in each case, as reflected on the Final
Adjusted Closing Date Schedule plus (c) the Premium
(the “ Purchase Price ”).
Section 2.03.
The Closing . The Closing of the sale of the
Purchased Assets and the assumption of the Assumed Liabilities
hereunder shall be held at the New York City offices of Weil,
Gotshal & Manges LLP.
Section 2.04.
Closing Deliveries and Payments .
(a) Effective
as of the Closing, the Seller shall deliver or cause to be
delivered to the Purchaser:
(i) one or more
bills of sale and assignment and assumption agreements, each
substantially in the form attached hereto as Exhibit D
(the “ Bills of Sale ”), duly executed by the
Seller and each of its Affiliates that has any right, title or
interest in the Purchased Assets, pursuant to which (A) the
Purchaser (or one or more Acquiring Entities) shall acquire all of
their right, title and interest in, to and under the Purchased
Assets, and (B) the Seller or its applicable Affiliate shall
delegate to the Purchaser (or one or more Acquiring Entities) the
Assumed Liabilities, together with such other transfer instruments
or documents as may be necessary or desirable to transfer, or
evidence the transfer, of each Purchased Financing Contract and
each other Purchased Asset to the Purchaser or the applicable
Acquiring Entity, as may be reasonably requested by the Purchaser
in a form mutually agreeable to the Seller and the
Purchaser;
(ii) a receipt or
receipts for the Initial Payment;
(iii) opinions,
dated as of the date hereof, from Cravath, Swaine & Moore LLP
and Vorys, Sater, Seymour and Pease LLP, legal counsel to the
Seller;
2
(iv) (A) each
of the Ancillary Agreements, executed by the Seller and each
Affiliate party thereto, and (B) any and all escrows,
deposits, security, impounds, accounts or other Credit Enhancements
or additional collateral relating to any Purchased
Asset;
(v) (A) the
amendments set forth on Schedule 5.08(a) executed by
the parties thereto (including Ambac) and the Seller, if a party
thereto and (B) any ratings confirmations from any rating
agencies required under the Securitization Documents;
and
(vi) an affidavit
of non-foreign status of the Seller that complies with
Section 1445 of the Code.
(i) the Purchaser
shall (and/or shall cause one or more Acquiring Entities to) pay to
the Seller the Initial Payment, by wire transfer of immediately
available funds, to an account designated to the Purchaser in
writing by the Seller; and
(ii) the Purchaser
shall deliver or cause to be delivered to the Seller:
(A) one or more
Bills of Sale providing for the assumption of the Assumed
Liabilities, duly executed by the Purchaser (or one or more
Acquiring Entities), pursuant to which the Purchaser (or one or
more Acquiring Entities) shall accept the Purchased Assets and
assume the Assumed Liabilities, together with such other transfer
instruments or documents as may be necessary or desirable to
transfer, or evidence the transfer, of the Assumed Liabilities to
the Purchaser or the applicable Acquiring Entity, as may be
reasonably requested by the Seller in a form mutually agreeable to
the Seller and the Purchaser;
(B) opinions,
dated as of the date hereof, from in—house counsel to
Purchaser and Weil, Gotshal & Manges LLP; and
(C) each of the
other Ancillary Agreements, executed by the Purchaser and each
Acquiring Entity party thereto.
Section 2.05.
Settlement Payments .
(a) Without
prejudicing in any manner the rights or obligations of the parties
pursuant to Section 5.05 (including the preparation of
the Final Adjusted Closing Date Schedule, the settlement of the
Purchase Price in accordance with Section 2.05(b) and
the dispute resolution procedures in respect of the Draft Closing
Statements and the Final Closing Statements in accordance with
Section 5.05(a)(iv) and Section 5.05(b) ),
within two (2) Business Days following the date of the delivery by
the Purchaser of the Interim Balance Sheet pursuant to
Section 5.05(a)(iii) , the following amounts shall be
paid, by wire transfer of immediately available funds, to an
account designated in writing
3
prior to such
payment date by the recipient thereof to the party required to make
such payment:
(i) if the Interim
Purchase Price exceeds the Initial Payment, the Purchaser shall
(and/or shall cause the applicable Acquiring Entity to) pay to the
Seller the absolute value of the amount of such excess, together
with accrued interest thereon, calculated at the Settlement Rate as
from time to time in effect, for the period from the date hereof to
and including the date upon which such 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); and
(ii) if the
Initial Payment exceeds the Interim Purchase Price, the Seller
shall pay, or shall cause to be paid, to the Purchaser (and/or one
or more Acquiring Entities, as directed by the Purchaser) the
absolute value of the amount of such excess, together with accrued
interest thereon, calculated at the Settlement Rate as from time to
time in effect, for the period from the date hereof to and
including the date upon which such 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);
provided , however , that notwithstanding any
provision of Section 5.05 , any disputes in respect of
the preparation of the draft Closing Date Schedule, the Interim
Balance Sheet or the calculation of the Interim Purchase Price and
any proposals for adjustments to any of the foregoing shall be
reserved (and not waived) by the parties and deferred until the
conclusion of the settlement in accordance with this
Section 2.05(a) and the delivery of the draft of the
audited Closing Date Schedule.
(b) In
the event the parties settle certain amounts in accordance with
Section 2.05(a) , then on the Settlement Date, the following
amounts shall be paid, by wire transfer of immediately available
funds, to an account designated in writing prior to the Settlement
Date by the recipient thereof to the party required to make such
payment:
(i) if the
Purchase Price exceeds the Interim Purchase Price, the Purchaser
shall (and/or shall cause the applicable Acquiring Entity to) pay
to the Seller an amount equal to the absolute value of the amount
of such excess, together with accrued interest thereon, calculated
at the Settlement Rate as from time to time in effect, for the
period from the date hereof to and including the Settlement Date
(calculated on the basis of the actual number of days elapsed in a
year of 365 or 366 days, as the case may be); or
(ii) if the
Interim Purchase Price exceeds the Purchase Price, the Seller shall
pay to the Purchaser (and/or one or more Acquiring Entities, as
directed by the Purchaser) an amount equal to the absolute value of
the amount of such excess, together with accrued interest thereon,
calculated at the Settlement Rate as from time to time in effect,
for the period from the date hereof to and including
4
the Settlement
Date (calculated on the basis of the actual number of days elapsed
in a year of 365 or 366 days, as the case may be).
(c) In
the event the parties do not settle any amounts in accordance with
Section 2.05(a) , then on the Settlement Date, the following
amounts shall be paid, by wire transfer of immediately available
funds, to an account designated in writing prior to the Settlement
Date by the recipient thereof to the party required to make such
payment:
(i) if the
Purchase Price exceeds the Initial Payment, the Purchaser shall
(and/or shall cause the applicable Acquiring Entity to) pay to the
Seller an amount equal to the Settlement Payment plus the
Settlement Interest in respect thereof; or
(ii) if the
Initial Payment exceeds the Purchase Price, the Seller shall pay to
the Purchaser (and/or one or more Acquiring Entities, as directed
by the Purchaser) an amount equal to the Settlement Payment
plus the Settlement Interest in respect thereof.
Section 2.06.
Post-Closing Amounts Received and Paid . After the
date hereof, all amounts which are received by the Seller or any of
its Affiliates in respect of any of the Purchased Assets shall be
received by such Person as agent, in trust for and on behalf of the
Purchaser, and following the Closing the Seller shall, on a weekly
basis, pay, or cause to be paid to the Purchaser, by wire transfer
of immediately available funds (in the same currency such amounts
are received) to an account designated by the Purchaser to the
Seller in writing (or such other account as the Purchaser may, from
time to time, designate upon no less than five Business Days’
written notice to the Seller), all such amounts received by or paid
to the Seller or any of its Affiliates, and shall provide the
Purchaser information as to the nature and source of all such
payments, including any invoice related thereto. After the date
hereof, all amounts which are received by the Purchaser or any of
its Affiliates in respect of any of the Excluded Assets shall be
received by such Person as agent, in trust for and on behalf of the
Seller, and the Purchaser shall, on a weekly basis, pay, or cause
to be paid to the Seller, by wire transfer of immediately available
funds (in the same currency such amounts are received) to an
account designated by the Seller to the Purchaser in writing (or
such other accounts as the Seller may, from time to time, designate
upon no less than five Business Days’ written notice to the
Purchaser), all such amounts received by or paid to the Purchaser
or any of its Affiliates, and shall provide the Seller information
as to the nature and source of all such payments, including any
invoice relating thereto.
Section 2.07.
Consents; Administration Pending Consent .
(a)
(i) Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute an agreement to
transfer or assign any Purchased Asset (other than the Capital
Stock of the Purchased ABS Entities) or any claim or right or any
benefit arising under or resulting from such Purchased Asset that
is included in the Purchased Assets but is not assignable or
transferable
5
without the
consent of any Person (other than the Purchaser or any of its
Affiliates, or the Seller or any of its Affiliates) or for which
assignment without such consent would constitute a breach
thereunder, to the extent that such consent shall not have been
obtained prior to the Closing; provided , however ,
that upon request by the Purchaser after the date hereof, the
Seller shall use all commercially reasonable efforts obtain all
necessary consents to the assignment thereof and, upon obtaining
the requisite third party consents thereto, such Purchased Asset or
any claim or right or any benefit arising under or resulting from
such Purchased Asset shall be transferred and assigned to the
Purchaser or the applicable Acquiring Entity hereunder in
accordance with Section 2.04(a)(i) , at no additional
consideration from the Purchaser or such Acquiring
Entity.
(b) With
respect to any Purchased Asset or any claim or right or any benefit
arising under or resulting from such Purchased Asset included in
the Purchased Assets that is not assigned to the Purchaser or an
Acquiring Entity at the Closing by reason of
Section 2.07(a) , after the Closing and until the
applicable requisite consents are obtained and the foregoing sold
and assigned to the Purchaser or the applicable Acquiring Entity,
the Seller shall provide in any lawful and reasonable manner to the
Purchaser or the applicable Acquiring Entity, in accordance with
this Section 2.07(b) , the benefits under each such
Purchased Asset or right or any benefit arising under or resulting
from such Purchased Asset (with the Purchaser responsible for all
Assumed Liabilities thereunder to the extent it would be liable
under the applicable Purchased Asset if the requisite consent had
been obtained and such Purchased Asset or right had been assigned
to the Purchaser). In particular, in the event that any requisite
consent is not obtained prior to Closing, then the Purchaser or the
applicable Acquiring Entity and Seller shall enter into such lawful
and reasonable arrangements (including sublicensing, subleasing or
subcontracting, if permitted) to provide to the Purchaser or such
Acquiring Entity the economic and operational equivalent of
obtaining such requisite consent and assigning such Purchased Asset
or right, including enforcement for the benefit of the Purchaser or
such Acquiring Entity of all claims or rights arising thereunder,
and the performance by the Purchaser or such Acquiring Entity of
the obligations thereunder. The Seller shall take all actions
reasonably requested by the Purchaser or the applicable Acquiring
Entity to enforce the rights of the Purchaser or such Acquiring
Entity under any such Purchased Assets, including the assertion and
enforcement of any right, claim, presentation, demand or draw under
or with respect to any such Purchased Assets. The Seller hereby
authorizes the Purchaser and the Acquiring Entities, to the extent
permitted by applicable Law, at the Purchaser’s expense to
(x) perform all of the Assumed Liabilities under each of the
contracts and agreements that comprise the Purchased Assets but
that are not assigned to the Purchaser or an Acquiring Entity after
giving effect to Section 2.07(a) and (y) amend,
modify or waive any such contract or agreement in the
Seller’s name and in such manner as the Purchaser or the
applicable Acquiring Entity may reasonably desire. On the date
hereof, or as requested from time to time hereafter, the Seller
shall provide to the Purchaser and the Acquiring Entities such
powers of attorney as the Purchaser may reasonably request in order
to enable the Purchaser and the Acquiring Entities to effectuate
the foregoing provisions; provided , however , that
any and all liabilities or obligations incurred by the Seller
arising out of, resulting from, based upon, in
6
connection with
or relating to any action taken by the Purchaser or the applicable
Acquiring Entity pursuant to any such power of attorney shall be
Assumed Liabilities.
REPRESENTATIONS AND WARRANTIES OF
THE SELLER
The
Seller makes the representations and warranties set forth on
Exhibit B to the Purchaser on and as of the date
hereof. Reference in this Agreement or in any of the Schedules or
Exhibits hereto to any of Sections 3.01 through
3.22 shall be deemed to be references to the corresponding
Sections of Exhibit B .
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER
The
Purchaser makes the representations and warranties set forth on
Exhibit C to the Seller on and as of the date hereof.
Reference in this Agreement or in any of the Schedules or Exhibits
hereto to any of Sections 4.01 through 4.06
shall be deemed to be references to the corresponding Sections of
Exhibit C .
The
Seller agrees and covenants with the Purchaser as
follows:
Section 5.01.
[Intentionally Omitted] .
Section 5.02.
[Intentionally Omitted] .
Section 5.03.
Tax Matters .
(a)
Allocation of Purchase Price . As soon as practicable
following the signing of this Agreement, but in no event later than
120 days after the date hereof, the Purchaser shall provide to
the Seller copies of IRS Form 8594 and any required exhibits
thereto with the Purchaser’s proposed allocation of the
Purchase Price, including the Assumed Liabilities, among the
Purchased Assets and the Acquired ABS Assets. Within 60 days
after the receipt of such Form 8594, the Seller shall propose
to the Purchaser any changes to such Form 8594 or shall
indicate its concurrence therewith. The failure by the Seller 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 Form 8594. The Purchaser and the Seller shall file,
and shall cause their Affiliates to file, all Tax Returns and
statements, 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
Form 8594 which the Purchaser and the Seller, acting in good
faith, are unable to resolve
7
shall be
resolved pursuant to Section 5.05(b) . Each of the
parties to this Agreement shall be bound by the decision rendered
in accordance with Section 5.05(b) .
(b)
Property Taxes . The Seller shall bear all property and ad
valorem Tax liability with respect to the Purchased Assets and the
Acquired ABS Assets if the lien or assessment date arises prior to
the date hereof irrespective of the reporting and payment dates of
such Taxes. For Tax Returns with respect to such property and ad
valorem Taxes which have an assessment date prior to the date
hereof, the Seller will file such Tax Returns. For Tax Returns with
respect to such property and ad valorem Taxes which have an
assessment date on or after the date hereof, the Purchaser will
file such Tax Returns. It will be the responsibility of the Seller
to ensure that the Purchaser receives the Tax bills that the Seller
receives from the taxing authority in a timely fashion with respect
to property and ad valorem Taxes, which are to be paid by the
Seller. Except with respect to cost per copy leases or other leases
that include property or ad valorem Taxes in the monthly payment
and do not separately invoice such Taxes, the Purchaser will
invoice the lessee and remit the funds received with respect to
property and ad valorem Taxes which are to be paid by the Seller
promptly upon receipt to the Seller. The Purchaser shall bear all
property and ad valorem Tax liability with respect to the Purchased
Assets or the Acquired ABS Assets if the lien or assessment date
arises on or after the date hereof.
(c)
Cooperation with Respect to Tax Returns . The Purchaser and
the Seller agree to furnish or cause to be furnished to each other,
and each at its own expense, in a timely manner, 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 or
Action relating to any adjustment or proposed adjustment with
respect to Taxes or any appraisal of the Purchased Assets. The
Seller or the Purchaser, as the case may be, shall retain in its
possession all Tax Returns and Tax records, relating to the
Purchased Assets, held by such party immediately after the Closing
that might be relevant to any taxable period ending on or prior to
the date hereof until the relevant statute of limitations has
expired. After such time, the Seller or the Purchaser, as the case
may be, may dispose of such materials; provided ,
however , that prior to such disposition the Seller or the
Purchaser, as the case may be, shall give the other party a
reasonable opportunity to take possession of such materials, at
such other party’s expense.
(d)
Erroneous Tax Payments . If the Purchaser determines that
any Taxes in respect of any Purchased Financing Contract are due
and the Seller erroneously paid such Taxes at the inception of such
Purchased Financing Contract and the Purchaser is unable to collect
such Taxes from the Obligor under such Purchased Financing
Contract, at the Purchaser’s request the Seller shall
initiate a timely and proper refund claim for the relevant Taxes.
The Seller shall promptly pay any such refund and the interest
actually received thereon to the Purchaser upon receipt thereof by
the Seller, net of any reasonable out of pocket expenses incurred
by the Seller in connection with such refund claim. For the
avoidance of doubt, the Seller shall be deemed to actually receive
a
8
refund to the
extent that the making of a claim for a refund results in a
reduction of any Tax liability of the Seller.
Section 5.04.
Indemnifications, Assumptions of Liability and Related
Matters .
(a)
Indemnification by the Seller for Breach . Following the
Closing, the Seller shall indemnify and hold harmless each of the
Purchaser, its Affiliates, and 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
(i) any breach of any representation or warranty made by the
Seller in this Agreement that, as of the Closing, has not been
cured by Seller or waived by the Purchaser in accordance with
Section 8.01 ; or (ii) any failure to perform any
covenant, agreement or undertaking on the part of the Seller
contained in this Agreement. For purposes of this
Section 5.04(a) , a breach of a representation or
warranty contained in this Agreement (other than in
Section 3.07(a) ) 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, knowledge or Knowledge in any such
representation or warranty or any limitation expressed as a
monetary amount contained in Section 3.13 , 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 to be true, correct and complete in any
respect, determined in each case without regard to any
qualification as to materiality, Material Adverse Effect, knowledge
or Knowledge in any such representation or warranty or any
limitation expressed as a monetary amount contained in
Section 3.13 with respect thereto.
(b)
Limitation on Liability .
(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) a breach of any representation or
warranty in Sections 3.01 , 3.02 , 3.03 ,
3.16 , 3.18(b)(iii)(B) , 3.19(a) ,
3.21(h) and 3.22 (individually a “ Seller
Special Representation ” and collectively, the “
Seller Special Representations ”), or (B) a
failure to perform any covenant, agreement or undertaking of the
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 under
Section 5.04(a)(i) or Section 5.04(a)(iii) for
any Damages suffered or incurred by such Person resulting from,
arising out of, based on or relating to a breach of any
representation or warranty made by the Seller in this Agreement
other than a Seller Special Representation, shall be entitled to
indemnification from the Seller for the full amount of all such
Damages in excess of $2,500,000;
9
provided , however , that in no event shall the
Seller’s indemnification obligations in respect of Damages
resulting from, arising out of, based on or relating to any such
breach of representation or warranty exceed $400,000,000 (the
“ Liability Cap ”).
(iii) With respect
to any breach of the agreements and covenants contained in
Section 5.01(a) and Section 5.02 , to the
extent that the Damages claimed by a Purchaser Indemnified Party in
respect of any such breach result from, arise out of or are based
on or relate to facts, events and circumstances that would give
rise to a claim for indemnification under
Section 5.04(a)(i) for a breach of representation or
warranty that is not a Special Representation, such claim for
breach of Section 5.01(a) and 5.02 shall be subject
to the limitation on liability set forth in
Section 5.04(b)(ii) to the same extent, if any, as a
claim for breach of such representation or warranty. Subject only
to the foregoing sentence, in the event that a claim or demand for
indemnification may be made under more than one provision of this
Section 5.04 , the Person making such claim or demand
shall have the right to elect the provision of this
Section 5.04 pursuant to which such claim or demand for
indemnification is made.
(iv) In
calculating the amount of Taxes that are indemnifiable for Damages
resulting from a breach of a representation for the purposes of
Section 5.04(a)(i) , Section 5.04(b)(i) or
Section 5.04(b)(ii) , the amount of such Damages shall
be an amount equal to the excess of (i) the Tax liability
actually incurred by the Purchaser and its Affiliates over
(ii) the Tax liability that the Purchaser and its Affiliates
would have incurred if such representation was true and correct
(the “ Tax Differential ”). The Tax director of
the Purchaser’s Capital Solutions business unit (the “
Tax Director ”) shall make a good faith effort to
establish the Tax Differential and shall certify such amount and
the rationale for such calculation to the Seller (the “
Tax Certification ”). The Seller shall pay such Tax
Differential to the Purchaser within 30 days of receipt of the
Tax Certification. In the event that any item giving rise to the
Tax Differential will reverse itself in future years or otherwise
result in any Tax savings to the Purchaser and its Affiliates in
future years, the Tax Certification shall provide the Tax
Director’s best estimate of when the Tax Differential will
reverse itself. In addition, the Tax Director shall make a good
faith effort to calculate the actual amount of such Tax benefit and
shall certify such amount and the rationale for such calculation to
the Seller within 30 days of the filing of any of its Tax
Returns which reflect the realization of any such Tax benefit, and
shall pay such amount to the Seller at the time of such
certification.
(v) Upon a breach
of a representation or warranty contained in
Section 3.21(e) that under the terms of the relevant
Securitization Documents will require a repurchase of a Purchased
Financing Contract from a Purchased ABS Entity, the Seller shall
(on the required date for remittance of the repurchase price)
repurchase from the applicable Purchased ABS Entity or the
Purchaser, as applicable, each Purchased Financing Contract and
related Portfolio Property to which such breach relates at the
price specified in the applicable Securitization
10
Document for
such repurchase. Upon the consummation by the Seller of such
repurchase, each repurchased Purchased Financing Contract and
related Portfolio Property shall be deemed to be an Excluded Asset
for purposes hereof.
(vi) The Purchaser
acknowledges that the Amendment Agreements provide that the
remedies available thereunder in respect of a breach by Seller of
its Equipment Service Obligations (as such term is defined in the
Amended and Restated Program Agreement) under the Purchased
Financing Contracts apply to the exclusion of any indemnification
remedy under this Agreement for Damages arising out of the failure
of an Obligor to make one or more payments under a Purchased
Financing Contract as a consequence of any such actual (or
asserted) breach.
(c) Survival of
Representations and Warranties of the Seller .
(i) The Seller
Special Representations and indemnifications with respect to their
breach shall survive until 60 days after the expiration of the
applicable statute of limitations.
(ii) The
representations and warranties of the Seller in this Agreement
which are not Seller Special Representations shall survive the
Closing until the expiration of 18 months after the Closing;
provided that the representations and warranties in
Section 3.21 (other than Section 3.21(g)
and Section 3.21(h) ) shall survive until the maturity
or redemption of any indebtedness of the Purchased ABS
Entities.
(iii) The
representations and warranties of the Seller which are contained in
Section 3.09 and Section 3.21(g) shall
survive until 60 days after the expiration of the applicable
statute of limitations.
(d)
Additional Indemnification by the Seller . Following the
Closing, the Seller shall indemnify and hold harmless all Purchaser
Indemnified Parties from and against any and all Damages suffered
or incurred by any of them resulting from, arising out of, based on
or relating to:
(i) any of the
Excluded Assets or the ownership, operation, servicing, lease or
use thereof, or any action taken with respect thereto, by the
Seller or any other Person (other than the Purchaser or any of its
Affiliates);
(ii) any of the
Excluded Liabilities or the Specified Liabilities;
(iii) the failure
of the Purchaser to receive any amounts due from an Obligor
pursuant to a Purchased Financing Contract due to the misconduct or
misrepresentation by the Seller in the sourcing, negotiation,
documentation, credit analysis, underwriting of a Purchased
Financing Contract or otherwise in connection with the origination
of such Purchased Financing Contract, including misrepresentations
by any employee, representative or agent of the Seller to an
Obligor, customer or the Seller;
11
(iv) the failure
of the Seller to comply with the provisions of any applicable
“bulk sales” or “bulk transfer” or similar
Laws of any jurisdiction that may be applicable to the sale or
transfer of any or all of the Purchased Assets to the
Purchaser;
(v) the provision,
administration or servicing of collateral protection insurance to
an Obligor in respect of the related equipment under a Financing
Contract; or
(vi) any claim by
a Person (other than the Purchaser, the Seller or any of their
respective Affiliates) relating to the failure of the Seller or its
Affiliates to obtain any consent, approval or Authorization
necessary to sell, assign, transfer and convey any Purchased Asset
or any claim, right or benefit arising under or resulting from such
Purchased Asset; provided, however, that the Damages
suffered or incurred by any Purchaser Indemnified Party in respect
of any such claim shall be calculated as net of any amount paid by
Seller under Section 6.1(f) of the Amended and Restated
Program Agreement for such Purchased Asset.
(e)
Indemnification by the Purchaser . Following the Closing,
the Purchaser shall indemnify and hold harmless each of the Seller,
its Affiliates and their respective directors, officers, employees
and agents (collectively, the “ Seller Indemnified
Parties ”) from and against and in respect of any and all
Damages suffered or incurred by any of them resulting from, arising
out of, based on or relating to (i) any breach of any
representation or warranty made by the Purchaser in this Agreement
that, as of the Closing, has not been cured by the Purchaser or
waived by the Seller in accordance with Section 8.01 ;
(ii) any failure to perform any covenant, agreement or
undertaking on the part of the Purchaser contained in this
Agreement; (iii) the Assumed Liabilities; or (iv) subject in
all respects to the terms and conditions set forth in the Amended
and Restated Program Agreement and the other Amendment Agreements
(including the obligations (including any standard of care) of the
Purchaser and its Affiliates, on the one hand, and the Seller and
its Affiliates, on the other hand, and the remedies for breach by a
party thereto of its obligations thereunder), Third Party Actions
arising out of the ownership, servicing and administration by the
Purchaser of the Purchased Assets or the Acquired ABS Assets after
the Closing. For purposes of this Section 5.04(e) , a
breach of a representation or warranty contained in this Agreement
or any certificate delivered by the Purchaser pursuant to the terms
of this Agreement 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 or resulting from, arising out of, based on or
relating to the failure of any such representation or warranty, to
be true, correct and complete 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.
12
(f)
Survival of Representations and Warranties of the Purchaser;
Limitation on Liability .
(i) Each Seller
Indemnified Party entitled to indemnification under Section
5.04(e)(i) and Section 5.04(e)(iii) for any Damages
suffered or incurred by such Person resulting from, arising out of,
based on or relating to a breach of any representation or warranty
in Sections 4.01 , 4.02 , 4.03 ,
4.05 and 4.06 (individually a “ Purchaser
Special Representation ” and collectively the “
Purchaser Special Representations ”) shall be entitled
to indemnification from the Purchaser for the full amount of all
such Damages regardless of the amount of the Damages.
(ii) Each Seller
Indemnified Party entitled to indemnification under Section
5.04(e)(i) and Section 5.04(e)(iii) for any Damages
suffered or incurred by such Person resulting from, arising out of,
based on or relating to a breach of any representation or warranty
made by the Purchaser or Acquiring Entity in this Agreement other
than a Purchaser Special Representation shall be entitled to
indemnification from the Purchaser for the full amount of all such
Damages in excess of $2,500,000; provided , however ,
that in no event shall the Purchaser’s indemnification
obligations in respect of Damages resulting from, arising out of,
based on or relating to any such breach of representation or
warranty exceed the Liability Cap.
(iii) The
Purchaser Special Representations and indemnifications with respect
to their breach shall survive until 60 days after the
expiration of the applicable statute of limitations.
(iv) The
representations and warranties of the Purchaser in this Agreement
which are not Purchaser Special Representations shall survive the
Closing until the expiration of 18 months after the
Closing.
(v) The Seller
acknowledges that the Amendment Agreements provide that the
remedies available thereunder in respect of a breach by Seller of
its Equipment Service Obligations (as such term is defined in the
Amended and Restated Program Agreement) under the Purchased
Financing Contracts apply to the exclusion of any indemnification
remedy under this Agreement for Damages arising out of the failure
of an Obligor to make one or more payments under a Purchased
Financing Contract as a consequence of any such actual (or
asserted) breach.
(g)
Indemnification Procedure for Third Party Actions . For the
purposes of administering the indemnification provisions of this
Section 5.04 , the following procedures shall apply to
Third Party Actions after the date hereof:
(i) An Indemnitee
shall notify the Indemnitor in writing within 30 days
following the receipt of notice of any Third Party Action against
such Indemnitee that gives rise to a claim for indemnity pursuant
to this Section 5.04
13
(any 30-day
notification requirement shall begin to run, in the case of a Third
Party Action which is amended so as to give rise to an
Indemnification Event, from the first day such Third Party Action
is amended to include any claim for indemnity pursuant to this
Section 5.04 ), such notice shall describe in
reasonable detail the basis of such Third Party Action. The failure
to give notice as required by this Section 5.04(g)(i) in a
timely fashion shall not result in a waiver of any right to
indemnification hereunder unless the Indemnitor’s ability to
defend against such Third Party Action is materially and adversely
affected by the failure of the Indemnitee to give notice in a
timely fashion as required by this Section 5.04(g)(i)
.
(ii) The
Indemnitor shall be entitled (but not obligated) to assume the
defense or settlement of any such Third Party Action, or to
participate in any negotiations or proceedings to settle or
otherwise eliminate any such Third Party Action, if it shall
provide the Indemnitee a written acknowledgement of its liability
for the indemnity against Damages relating to such Third Party
Action. 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 15 Business Days of the notification referred to
above to assume the defense, the Indemnitee may engage counsel to
defend, settle or otherwise dispose of such Third Party Action
which counsel shall be reasonably satisfactory to the Indemnitor;
provided , however , that the Indemnitee shall not
settle or compromise any such Third Party Action without the prior
written consent or agreement of the Indemnitor (which consent shall
not be unreasonably withheld or delayed).
(iii) In cases
where the Indemnitor has assumed the defense or settlement with
respect to a Third Party Action, the Indemnitor shall be entitled
to assume the defense or settlement thereof with counsel of its own
choosing; provided , however , that: (A) the
Indemnitee (and its counsel) shall be entitled to continue to
participate at its own cost (except as provided below) in such
Third Party Action and to participate in any negotiations or
proceedings to settle or otherwise eliminate, any such Third Party
Action; (B) the Indemnitor shall not be entitled to settle or
compromise any such Third Party Action without the consent or
agreement of the Indemnitee (which consent shall 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 and
provides an unconditional release of the Indemnitee, 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 Indemnitee and the Indemnitee 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 Indemnitee (as provided above) of its election to assume
control of the defense or settlement of any claim, the Indemnitor
shall not be liable to such Indemnitee hereunder for any
attorneys’ fees and disbursements
14
subsequently
incurred by such Indemnitee 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 Indemnitee or parties seeking such
indemnification and their Affiliates to the extent reasonably
necessary to assist it in defending or settling any such Third
Party Action; provided , however , that such access
shall be conducted in such manner as not to interfere unreasonably
with the operation of the business of the Indemnitee or
Indemnitees. Except as reasonably necessary to assist it in
defending or settling such Third Party Action, the Indemnitee shall
not be required to disclose any information with respect to itself
or any of its Affiliates (or former Affiliates) , and the
Indemnitee 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 reasonably required
or necessary in the defense of any claim to be indemnified
hereunder. Notwithstanding anything in this Agreement to the
contrary, in no event shall any Indemnitee be obligated to make any
disclosure, or to take or refrain from taking any action, that in
its reasonable judgment, could prejudice its position or waive any
privilege in respect of any claim for indemnification against the
Indemnitor pursuant to this Section 5.04 . All costs
and expenses incurred by an Indemnitee in connection with any
access or cooperation requested by the Indemnitor shall be borne by
the Indemnitor. The Purchaser and the Seller shall reasonably
cooperate to attempt to resolve or mitigate Damages with respect to
any such Third Party Action; provided , however ,
that in no event shall a party’s compliance with the
foregoing obligation to reasonably cooperate be a basis for any
claim that any such party shall have waived, limited, relinquished
or otherwise impaired, any rights such party may have pursuant to
this Agreement or be raised as a defense to any such
rights.
(v) In the event
the Indemnitor shall request that an Indemnitee participate in the
defense or settlement of an Indemnification Event, the Indemnitor
shall pay the costs incurred by the Indemnitee.
(vi)
(A) Notwithstanding anything to the contrary in this
Agreement, the Purchaser shall, with counsel reasonably acceptable
to the Seller, have the sole right to (x) defend any Action in
respect of a Non-Assumable Claim and (y) settle or otherwise
dispose of any Non-Assumable Claim; provided ,
however , that the Purchaser shall conduct the defense or
settlement of Non-Assumable Claims diligently and in good faith.
With respect to any Non-Assumable Claim that the Purchaser is
defending, settling or otherwise disposing of, the Seller shall be
permitted to participate at its own expense in the defense of such
Non-Assumable Claims but shall not be entitled to assume the
defense thereof.
(B) The Purchaser
shall keep the Seller timely apprised of the status of all
Non-Assumable Claims and shall notify the Seller promptly of any
material
15
developments
(including any material developments relating to settlements and
proposed settlements) relating to a Non-Assumable Claim. Without
limiting the foregoing, no more frequently than once a fiscal
quarter, the Purchaser shall provide the Seller with a written
report summarizing in reasonable detail the status of any pending
Non-Assumable Claims (including a summary of any material
settlement discussions). Without limitation of the foregoing,
promptly after the receipt by the Purchaser of a Qualifying Offer
relating to a Non-Assumable Claim, the Purchaser shall promptly
provide the Seller with a copy of such Qualifying Offer or, in the
case of an oral Qualifying Offer, a written summary thereof. In the
event that the Purchaser receives a Qualifying Offer relating to a
Non-Assumable Claim that (1) includes a full, final and
unconditional release of the Purchaser from all Damages with
respect thereto and (2) requires only (a) the payment of
money for which, as between the Purchaser Indemnified Parties, on
the one hand, and the Seller, on the other hand, the Seller has
sole liability under this Agreement (a “ Monetary
Settlement ”) or (b) a Monetary Settlement and any
action by the Seller or any of its Affiliates (any such offer of
compromise, a “ Non-Assumable Claim Offer ”),
then the Seller shall have no further liability to the Purchaser
Indemnified Parties with respect to such Non-Assumable Claim upon
receipt by the Purchaser of (x) the amount contained in such
Non-Assumable Claim Offer and all other Damages suffered or
incurred by any Purchaser Indemnified Party in respect of such
Non-Assumable Claim, in the form of immediately available funds
from the Seller, (y) a fully executed agreement of the Seller
and its Affiliates agreeing to the terms of the actions to be taken
by the Seller or any of its Affiliates pursuant to such
Non-Assumable Claim Offer, if any, and (z) if the Purchaser
has accepted the terms of such Non-Assumable Claim Offer, a full,
final and unconditional release, as applicable, of each of the
Purchaser Indemnified Parties from all liabilities or obligations
with respect thereto, executed by each of the third party claimants
in such Non-Assumable Claim; provided , however , if
the Purchaser has not accepted the terms of such Non-Assumable
Claim Offer, the Seller shall have no further liability to the
Purchaser Indemnified Parties with respect to such Non-Assumable
Claim upon receipt by the Purchaser from the Seller of the amounts
and agreements set forth in the foregoing clauses (x) and
(y).
(C) At any time
during the defense by the Purchaser of a Non-Assumable Claim, the
Seller shall have the right to require the Purchaser (1) to
proffer to the third party claimants under such Non-Assumable
Claim, a written offer of compromise that consists solely of the
payment of money for which, as between the Purchaser Indemnified
Parties, on the one hand, and the Seller, on the other hand, the
Seller has sole liability under this Agreement and/or any action by
the Seller or any of its Affiliates in exchange for a full, final
and unconditional release from such claimants of the Purchaser from
all Liability with respect thereto, and (2) if such offer of
compromise is accepted by such third party claimants, to settle
such Non-Assumable Claim on the terms contained in such offer of
compromise, including the full, final and unconditional release of
the Purchaser from all liabilities and obligations with respect
thereto.
16
(h) Any
payments under Section 5.04, and any payments made
after the date hereof pursuant to the provisions of
Section 6.1(f) of the Amended and Restated Program
Agreement (to the extent related to any Purchased Assets
hereunder), 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.
(i)
Exclusive Remedy . Except with respect to claims based on
fraud and/or claims seeking non-monetary equitable remedies, and
except for the remedies contained in the Amended and Restated
Program Agreement with respect to Property constituting Purchased
Assets hereunder, the indemnification remedies set forth in this
Agreement (including the repurchase rights in respect of
Section 5.04(b)(v) and the remedies provided for in
Section 5.27 ), shall constitute the sole and exclusive
monetary remedies of the parties hereto after the Closing with
respect to any breach of representation, warranty or obligation
under this Agreement. Except for the representations and warranties
contained in Exhibit B , Exhibit C , the
Amended and Restated Program Agreement and the other Amendment
Agreements and except for the matters referred to in the
Information Letter, none of the Purchaser or any of its Affiliates
or the Seller or any of its Affiliates makes or has made any
representations or warranties, whether express or implied, oral or
written, with respect to the Purchased Assets, the Acquired ABS
Assets, the Assumed Liabilities or the transactions contemplated by
this Agreement.
Section 5.05.
Preparation of Closing Date Schedule and Final Adjusted
Closing Date Schedule .
(a) Preparation
of Closing Date Schedule .
(i) As soon as
practicable following the Closing, the Purchaser shall prepare,
with the cooperation and assistance of the Seller, a draft of the
Closing Date Schedule. The Closing Date Schedule shall reflect the
Purchased Assets and the Assumed Liabilities. The draft of the
Closing Date Schedule shall be prepared in accordance with the
Accounting Principles. Notwithstanding the foregoing, (A) if
the Accounting Principles do not specifically address a particular
matter necessary to prepare the Closing Date Schedule, then the
Accounting Principles shall be supplemented in accordance with
GAAP, applied consistently with the past practices and procedures
of the Seller, but only to the extent necessary to address such
matter and (B) to the extent that any accounting principle,
method, practice or procedure included in the Accounting Principles
is not in accordance with GAAP, such accounting principle, method,
practice or procedure shall be disregarded for purposes of
preparing the Closing Date Schedule but shall be treated as a
Special Adjustment for purposes of preparing the Final Adjusted
Closing Date Schedule. The Purchaser and the Seller shall each use
their respective commercially reasonable efforts to cause the draft
of the Closing Date Schedule to be completed as soon as reasonably
practicable (which the parties hereto anticipate shall, in no
event, be later than 60 days after the date hereof)
17
and, upon
completion, such draft schedule shall promptly be provided to the
Purchaser’s Accountants, the Seller and the Seller’s
Accountants.
(ii) Immediately
following the preparation and distribution of the draft of the
Closing Date Schedule, the Purchaser shall cause the
Purchaser’s Accountants to audit the draft Closing Date
Schedule, and such audit shall be conducted in accordance with
generally accepted auditing standards and shall be sufficient to
permit the Purchaser’s Accountants to deliver a special
report certifying that the Closing Date Schedule fairly presents
the Purchased Assets and Assumed Liabilities as of the Closing in
accordance with the Accounting Principles, qualified only to the
extent, if any, that the Purchaser’s Accountants deem such
qualification necessary on account of any dispute between the
Purchaser’s Accountants and the Seller’s Accountants
that is resolved by the conflict resolution mechanism set forth in
Section 5.05(b) or agreed by the Purchaser and the
Seller, in either case, in a manner that in the Purchaser’s
Accountants’ sole judgment precludes the Purchaser’s
Accountants from issuing an unqualified certification. The
Purchaser shall use reasonable efforts to cause the
Purchaser’s Accountants to deliver the draft audited Closing
Date Schedule to each of the Seller, the Seller’s Accountants
and the Purchaser as soon as reasonably practicable (which the
parties hereto anticipate shall, in no event, be later than
60 days after the date of their receipt of the draft of the
Closing Date Schedule).
(iii) Concurrently
with the preparation and delivery to the Purchaser’s
Accountants, the Seller and the Seller’s Accountants of the
draft Closing Date Schedule, the Purchaser shall, or shall cause
the Purchaser’s Accountants to, prepare and deliver to the
Purchaser or the Purchaser’s Accountants, as applicable, the
Seller and the Seller’s Accountants, a draft of the adjusted
Closing Date Schedule that reflects the Special Adjustments (the
“ Interim Balance Sheet ”). During the
30 day period following their receipt of each of the draft
audited Closing Date Schedule and the draft adjusted Closing Date
Schedule reflecting the Special Adjustments (collectively, the
“ Draft Closing Statements ”), both the
Purchaser (in consultation with the Purchaser’s Accountants)
and the Seller (in consultation with the Seller’s
Accountants) shall have the opportunity to review the Draft Closing
Statements (together with the Purchaser’s Accountants’
working papers, including any portion thereof pertaining to any
proposed adjustment) and, during such 30 day period, the
Seller, the Purchaser and the Seller’s Accountants shall have
the right to propose to the Purchaser’s Accountants those
changes to the Draft Closing Statements that the Seller, the
Purchaser or the Seller’s Accountants determine to be
appropriate in order to cause the Draft Closing Statements to
conform, in all respects, to the standards set forth in
Section 5.5(a)(i) and 5.5(a)(iii) , as
applicable.
(iv) In the event
of any dispute between the Seller and the Seller’s
Accountants, on the one hand, and the Purchaser and the
Purchaser’s Accountants, on the other hand, regarding any of
the adjustments proposed by the Seller or the Seller’s
Accountants, on the one hand, or the Purchaser or the
18
Purchaser’s Accountants, on the other
hand, with respect to any item of the Draft Closing Statements,
which the Seller and the Seller’s Accountants, on the one
hand, and the Purchaser and the Purchaser’s Accountants, on
the other hand, cannot resolve within 45 days after the
receipt thereof, as the case may be, either the Seller or the
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 5.05(b) . Promptly following the resolution of
any disputes with respect to any proposed adjustments to the Draft
Closing Statements, the Purchaser shall cause the Purchaser’s
Accountants to prepare and deliver to the Seller and the Purchaser
the final audited Closing Date Schedule and the Final Adjusted
Closing Date Schedule (collectively, the “ Final Closing
Statements ”), each of which shall reflect all
adjustments thereto which have been agreed upon by the Seller and
the Seller’s Accountants, on the one hand, and the Purchaser
and the Purchaser’s Accountants, on the other hand, or which
have been resolved pursuant to Section 5.5(b) ,
together with the Purchaser’s Accountants’ special
report on each Final Closing Statement.
(v) Each of the
Purchaser, the Seller, the Purchaser’s Accountants and the
Seller’s Accountants shall have full access to all relevant
accounting, financial and other records and personnel reasonably
requested by it in connection with the preparation, confirmation or
review of the Draft Closing Statements, as well as to the
Purchaser’s Accountants’ working papers with respect
thereto and special report thereon.
(b)
Conflict Resolution Mechanism . Any dispute involving any
adjustment to the Draft Closing Statement proposed by the Seller,
the Seller’s Accountants, the Purchaser or the
Purchaser’s Accountants (including any interpretation or
application of any provision of this Agreement affecting the
preparation of the Draft Closing Statement) not resolved by the
Seller, the Seller’s Accountants, the Purchaser and the
Purchaser’s Accountants within 45 days of the relevant
date of receipt thereof, shall upon the election of the Seller or
the Purchaser, be resolved by the Selected Accounting Firm. The
Selected Accounting Firm shall resolve only issues upon which the
Purchaser, the Purchaser’s Accountants, the Seller and the
Seller’s Accountants have been unable to agree. The Selected
Accounting Firm shall be prohibited from changing any item of the
Draft Closing Statements expressly agreed among the Purchaser, the
Purchaser’s Accountants, the Seller and the Seller’s
Accountants. The Selected Accounting Firm (i) in resolving any
issue with respect to the Closing Date Schedule, shall apply the
Accounting Principles in all instances, including whether or not
the Selected Accounting Firm believes the Accounting Principles are
or are not in accordance with the historic practices of the Seller
with respect to the Purchased Assets or (subject to the Special
Adjustments) are or are not in accordance with GAAP and
(ii) in resolving any issue with respect to the adjusted
Closing Date Schedule, the Selected Accounting Firm shall apply the
Special Adjustments, whether or not the Selected Accounting Firm
believes the Special Adjustments are or are not in accordance with
the historic practices of the Seller with respect to the Purchased
Assets or are or are not in accordance with GAAP. The Purchaser and
the Seller shall each use their reasonable best efforts to cause
the decision of such Selected Accounting Firm to be rendered within
20 Business Days
19
after
appointment of the Selected Accounting Firm. The decision of the
Selected Accounting Firm shall be submitted in writing and 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 5.05(b) shall be
less than $100,000, 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 the Seller’s favor and 50% of the
aggregate of all amounts in dispute shall be deemed to have been
resolved in the Purchaser’s favor.
(c) Payment of
Fees . The Purchaser shall pay all of the fees of the
Purchaser’s Accountants and all expenses incurred by such
firm in connection with the tasks outlined in this
Section 5.05 , and the Seller shall pay all fees of the
Seller’s Accountants and all expenses incurred by such firm
in connection with the tasks outlined in this
Section 5.05 . The Purchaser and the Seller shall each
pay one-half of the fees and expenses incurred in connection with
any disputes that are resolved by the Selected Accounting Firm
pursuant to Section 5.05(b) .
(d)
Cooperation . Each of the Seller and the Purchaser shall use
their respective commercially reasonable efforts to cause the
Seller’s Accountants and the Purchaser’s Accountants to
cooperate with each other in connection with all of their
activities undertaken in connection with this
Section 5.05 .
Section 5.06.
Insurance; Risk of Loss . (a) Except in the
ordinary course of business, consistent with past practices, the
Seller shall neither terminate nor cause to terminate or allow to
be terminated (subject to applicable Law) any occurrence liability
policies with respect to the Purchased Assets or the Acquired ABS
Assets so as to prevent the Purchaser from recovering under such
policies for losses from events occurring prior to the Closing, to
the extent that coverage for such losses was otherwise provided by
any such policy.
(b) Notwithstanding
Section 5.06(a) , to the extent that (i) any
insurance policies owned or controlled by the Seller (collectively,
the “ Seller’s Insurance Policies ”) cover
any loss, liability, claim, damage or expense resulting from,
arising out of, based on or relating to, any Purchased Asset or
Acquired ABS Asset (the “ Seller Liabilities ”)
and resulting from, arising out of, based on or relating to
occurrences prior to the Closing and (ii) the Seller’s
Insurance Policies permit claims to be made thereunder with respect
to Seller Liabilities resulting from, arising out of, based on or
relating to occurrences prior to the Closing (the “ Seller
Claims ”), the Seller shall cooperate and shall cause its
Affiliates to cooperate with the Purchaser, in submitting Seller
Claims (or pursuing Seller Claims previously made) on behalf of the
Purchaser under any Seller’s Insurance Policies.
Section 5.07.
[ Intentionally Omitted ] .
Section 5.08.
Amendments to Securitization Documents . Effective as
of any time prior to the Closing, the Seller shall (a) execute
the amendments set forth on Schedule 5.08(a) and
(b) obtain or cause to be obtained, all consents, approvals
and rating
20
agency
confirmations required pursuant to the Securitization Documents in
respect of such amendments. The Purchaser shall reasonably
cooperate with the Seller in respect thereof.
Section 5.09.
[Intentionally Omitted] .
Section 5.10.
Further Assurances .
(a) The
Seller shall, whenever and as often as reasonably requested to do
so by the Purchaser, execute, acknowledge and deliver any and all
such other and further acts, assignments, endorsements, transfers
and any instruments of further assurance, approvals and consents as
are necessary or proper in order to complete, ensure and perfect
(i) the sale, transfer and conveyance of the Purchased Assets
to the Purchaser or the applicable Acquiring Entity as contemplated
hereby, and (ii) the consummation of the other transactions
contemplated hereby.
(b) The
Purchaser shall, whenever and as often as reasonably requested to
do so by the Seller, do, execute, acknowledge and deliver any and
all such other and further acts, assignments, endorsements,
transfers and any instruments of further assurance, approvals and
consents as are necessary or proper in order to complete, ensure
and perfect (i) assumption of the Assumed Liabilities by the
Purchaser or the applicable Acquiring Entity, and (ii) the
consummation of the transactions contemplated hereby.
Section 5.11.
Payment of Brokers’ or Finders’ Fees .
The Seller shall pay any and all brokers’ or finders’
fees, and any other commissions or similar fees, payable to any
Person acting on behalf of the Seller or any of its Affiliates or
under the authority of any of them, in connection with any of the
transactions contemplated herein, and the 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 the Purchaser or any of its Affiliates or under the authority of
any of them, in connection with any of the transactions
contemplated hereby, 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.
Section 5.12.
[Intentionally Omitted] .
Section 5.13.
[Intentionally Omitted] .
Section 5.14.
Transfer Taxes . The Seller shall be liable for and
shall pay (and shall indemnify and hold the Purchaser harmless
against any Damages in respect of) any and all sales, use, value
added, stamp, documentary, filing, recording, transfer or similar
fees or Taxes, UCC-3 filing fees, UCC, DOT, real estate and title
recording or filing fees and other amounts payable in respect of
transfer filings) as levied by any Governmental Entity in
connection with the transactions contemplated by this Agreement
(collectively, the “ Transfer Taxes ”). The
Purchaser agrees to provide the Seller with any Exemption
Certificate reasonably requested by the Seller. The Seller hereby
agrees to file all necessary documents (including all Tax Returns)
with respect to
21
all such
amounts in a timely manner. The Seller agrees to utilize its sales
or use Tax credits relating to the Purchased Assets to minimize the
Transfer Taxes.
(a) The
Purchaser recognizes that certain records may contain incidental
information relating to Subsidiaries or divisions of the Seller
other than the Purchased Assets and that the Seller may retain
copies of the relevant portions thereof. All information relating
to the Purchased Assets retained by the Seller pursuant to the
foregoing sentence shall be subject to, and the Seller shall hold
all such information in confidence in accordance with, the
provisions of the Amended and Restated Program
Agreement.
(b) Until
the termination of the Program (as defined in the Amended and
Restated Program Agreement) in accordance with the Amended and
Restated Program Agreement, the Seller agrees to keep confidential
all nonpublic information in its possession regarding the Purchased
Assets (including any information made available to the Seller
pursuant to Section 5.15(a) ); provided ,
however , that each the Seller shall not be required to
maintain as confidential any information that (i) is or
becomes generally available to the public other than as a result of
a disclosure by the Seller, (ii) is or becomes available to
the Seller or any of its Affiliates on a non-confidential basis
from a source other than the Purchaser or its Affiliates,
provided , however , that the source of such
information is not known by the Seller or any of its Affiliates to
be bound by a confidentiality agreement with the Purchaser or any
of its Affiliates or other contractual, legal or fiduciary
obligation of confidentiality to the Purchaser or any of its
Affiliates with respect to such material, (iii) has been
independently acquired or developed by the Seller or any of its
representatives without violating any of the provisions of this
Agreement, (iv) was available to the Seller or any of its
Affiliates on a non-confidential basis prior to its disclosure by
the Purchaser or any of its Affiliates or (v) is required to
be disclosed pursuant to the terms of an Order by a Governmental
Entity or any other legal requirement.
(c) Notwithstanding
anything to the contrary set forth herein or in any other agreement
to which the parties hereto are parties or by which they are bound,
the obligations of confidentiality contained herein and therein, as
they relate to the transactions contemplated by this Agreement (the
“ Transaction ”), shall not apply to the tax
structure or tax treatment of the Transaction, and each party
hereto (and any employee, representative, or agent of any party
hereto) may disclose to any and all persons, without limitation of
any kind, the tax structure and tax treatment of the Transaction
and all materials of any kind (including opinions or other tax
analysis) that are provided to such party relating to such tax
treatment and tax structure; provided , however ,
that s
|
