SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 29, 1996
STORAGE TECHNOLOGY CORPORATION
------------------------------------------------------
(Exact Name of Registrant As Specified In Its Charter)
Delaware 1-7534 84-0593263
---------------- ----------------- ---------------
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
2270 South 88th Street, Louisville, Colorado 80028-4309
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 673-5151
Not applicable
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
PAGE
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 29, 1996, the Registrant sold all of the issued and
outstanding stock (the "Stock") of its wholly owned lease financing
subsidiary, StorageTek Financial Services Corporation ("SFSC"), a Delaware
corporation, to Leasetec Corporation, a Delaware corporation ("Leasetec"),
pursuant to the terms and conditions of the Stock Purchase Agreement dated
as of March 29, 1996, between the Registrant and Leasetec. On March 20,
1996, the Registrant entered into a Portfolio Purchase Agreement with
Leasetec pursuant to which certain foreign subsidiaries of the Registrant
sold their respective net investment in sales-type lease assets (the "Lease
Assets") to certain foreign subsidiaries of Leasetec. The Registrant
received cash consideration for the Stock and the Lease Assets in the
aggregate amount of approximately $253,538,000 and the assumption of certain
associated nonrecourse borrowings in the amount of $5,600,000 (applying
foreign currency exchange rates in effect in March 1996). The Registrant
used a portion of these proceeds to retire certain associated nonrecourse
borrowings and other debt in the amount of $89,795,000. The consideration
paid for the Stock and Lease Assets was determined as a result of arms
length negotiations between the Registrant and Leasetec, after considering
various factors, including the investment return, the nature of the assets,
the fair market value of the assets, the prevailing interest rates,
prospects for growth and strategic plans.
In connection with the sale of the Stock and Lease Assets, the
Registrant and Leasetec formed a worldwide lease financing alliance.
Pursuant to the terms and conditions of an operating agreement dated as of
March 20, 1996, Leasetec, through SFSC, will offer financing to customers of
the Registrant under the StorageTek Financial Services Corporation name.
Except for the operating agreement and the transactions contemplated
thereunder, and a transition agreement between the Registrant and SFSC dated
as of March 20, 1996, pursuant to which the Registrant will furnish certain
services to SFSC for an interim period, the Registrant is not aware of any
material relationship between it, or any of its directors or officers or any
of its affiliates, and Leasetec existing on the date of the disposition of
the Stock and Lease Assets.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements, pro forma financial
information and exhibits are filed as a part of this report:
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable
(B) PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma consolidated financial
information gives effect to the sale of the Stock and Lease Assets to
Leasetec, and the retirement of the associated debt, as if the transaction
had occurred on December 29, 1995, for balance sheet purposes, and at the
beginning of the year ended December 29, 1995, for statement of operations
purposes. Any gain resulting from the sale of the Stock and Lease Assets is
excluded from the unaudited pro forma consolidated statement of operations.
The unaudited pro forma consolidated financial information
relating to StorageTek is based on the audited historical consolidated
financial statements for the year ended December 29, 1995, and the effects
of the sale of the Stock and Lease Assets. The related pro forma
adjustments are described in the accompanying notes. The pro forma
information should be read in conjunction with the consolidated financial
statements of StorageTek which are included in StorageTek's Annual Report on
Form 10-K for the year ended December 29, 1995.
The following unaudited pro forma consolidated financial
statements are presented for informational purposes only and do not purport
to be indicative of the financial position which would actually have existed
or the results of operations which would actually have been obtained if the
transaction had occurred in the dates specified above or which may be
obtained in the future.
PAGE
<PAGE>
STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(In Thousands of Dollars)
<TABLE>
<CAPTION>
December 1995
----------------------------------------
Pro Forma
Historical Adjustments Pro Forma
----------------------------------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash, including cash equivalents $ 264,502 $ 277,099 (a) $ 451,806
(89,795)(b)
Accounts receivable, net 396,499 396,499
Notes and installment receivables 10,766 10,766
Net investment in sales-type leases 88,668 (88,668)(a)
Inventories 214,553 214,553
--------- --------- ---------
Total current assets 974,988 98,636 1,073,624
Notes and installment receivables 10,113 10,113
Net investment in sales-type leases 150,751 (150,751)(a)
Equipment held for sale or lease,
at cost (net) 139,629 (11,149)(a) 128,480
Spare parts for field service, at
cost (net) 29,468 29,468
Property, plant and equipment, at
cost (net) 333,021 (275)(a) 332,746
Deferred income tax assets, net of
valuation allowance 74,902 10,900 (a) 85,802
Other assets 175,757 (539)(a) 175,218
--------- -------- ---------
$1,888,629 $ (53,178) $1,835,451
========= ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities:
Nonrecourse borrowings secured
by lease commitments $ 19,415 $ (5,600)(a)
(13,815)(b)
Current portion of other
long-term debt 65,844 (55,000)(b) $ 10,844
Accounts payable and accrued
liabilities 454,415 12,402 (a) 466,817
Income taxes payable 9,963 18,300 (a) 28,263
--------- -------- ---------
Total current liabilities 549,637 (43,713) 505,924
Convertible subordinated debentures 316,850 316,850
Nonrecourse borrowings secured by
lease commitments 20,980 (20,980)(b)
Other long-term debt 26,133 26,133
Deferred income tax liabilities 12,196 1,600 (a) 13,796
--------- -------- --------
Total liabilities 925,796 (63,093) 862,703
--------- -------- --------
STOCKHOLDERS' EQUITY
Common stock, $.10 par value 5,335 5,335
Capital in excess of par value 1,414,551 1,414,551
Accumulated deficit (445,761) 9,915(a) (435,846)
Other stockholders' equity (11,292) (11,292)
--------- -------- ---------
Total stockholders' equity 962,833 9,915 972,748
--------- -------- ---------
$1,888,629 $ (53,178) $1,835,451
========= ======== =========
</TABLE>
The accompanying notes are an integral part of the unaudited
pro forma consolidated balance sheet
PAGE
<PAGE>
STORAGE TECHNOLOGY CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Year Ended December 1995
-----------------------------------------
Pro Forma
Historical Adjustments Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
Sales $1,345,260 $1,345,260
Service and rental revenue 584,225 584,225
--------- ---------
Total revenue 1,929,485 1,929,485(a)
--------- ---------
Cost of sales 841,583 841,583
Cost of service and rental revenue 376,039 376,039
--------- ---------
Total cost of revenue 1,217,622 1,217,622(a)
--------- ---------
Gross profit 711,863 711,863
Research and product development costs 187,275 187,275
Marketing, general, administrative
and other income and expense, net 445,889 $ (1,595)(b) 444,294
Restructuring and other charges 212,207 212,207
--------- ------- ---------
Operating loss (133,508) 1,595 (131,913)
Interest income 43,325 (20,371)(c) 22,954
Interest expense (34,347) 9,728 (d) (24,619)
--------- ------- ---------
Loss before income taxes (124,530) (9,048) (133,578)
Provision for income taxes (17,800) 2,200 (e) (15,600)
--------- ------- ---------
Net loss (142,330) (6,848) (149,178)
Preferred stock dividend (11,544) (11,544)
--------- ------- ---------
Loss applicable to common shares $ (153,874) $ (6,848) $ (160,722)
========= ======= =========
Loss per common share $ (2.91) $ (3.04)
========= =========
Weighted average common shares
and equivalents 52,798 52,798
========= =========
</TABLE>
The accompanying notes are an integral part of the unaudited
pro forma consolidated statement of operations
PAGE
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS
(a) The pro forma extraordinary gain, net of income tax, on the sale of the
Stock of SFSC, all of the Company's net investment in sales-type leases, and
equipment subject to operating leases is calculated as follows (in
thousands):
Cash proceeds $277,099
Nonrecourse borrowings assumed
by Leasetec 5,600
Book value of net investment in
sales-type leases sold (239,419)
Book value of equipment subject to leases (11,149)
Fixed assets write-down (275)
Write-off of debt offering costs (539)
Property tax expenses (4,279)
Accrued transaction costs and expenses (8,123)
-------
Extraordinary gain before income taxes 18,915
Income tax provision (9,000)
-------
Extraordinary gain, net of income taxes $ 9,915
=======
(b) Cash proceeds used to reduce the remaining nonrecourse borrowings and
the 9.53% Senior Secured Notes of $34,795,000 and $55,000,000, respectively.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS
(a) No adjustments have been made to revenue and cost of revenue to reflect
the sale of the Company's Lease Assets as there is no reasonable method to
measure the possible effect on revenue and cost of revenue. Accordingly, the
unaudited pro forma consolidated statement of operations do not purport to
be indicative of the results of operations which would actually have been
obtained if the transaction had occurred at the beginning of the year ended
December 29, 1995.
(b) The adjustment to marketing, general, administrative and other reflects
salaries and other costs directly attributable to the Lease Assets and
associated business operations sold.
(c) The adjustment to interest income reflects interest earned during the
year ended December 29, 1995, on sales-type leases. This adjustment does
not reflect any investment or interest earnings on the cash proceeds
received on the sale of the Lease Assets.
(d) The adjustment to interest expense reflects the interest expense during
the year ended December 29, 1995, on the nonrecourse borrowings and the
9.53% Senior Secured Notes which were retired utilizing the proceeds from
the sale.
(e) The adjustment to provision for income taxes results from the tax
effects of the pro forma adjustments to the loss before income taxes.
(C) EXHIBITS.
2.1 Stock Purchase Agreement dated as of March 29, 1996 between
Storage Technology Corporation and Leasetec Corporation. Storage Technology
Corporation agrees to furnish the Commission supplementally with a copy of
the omitted schedules upon request.
2.2 Portfolio Purchase Agreement dated as of March 20, 1996
between Storage Technology Corporation and Leasetec Corporation. Storage
Technology Corporation agrees to furnish the Commission supplementally with
a copy of the omitted schedules upon request.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- -----------------------------
2.1 Stock Purchase Agreement dated as of March 29, 1996 between
Storage Technology Corporation and Leasetec Corporation.
2.2 Portfolio Purchase Agreement dated as of March 20, 1996
between Storage Technology Corporation and Leasetec
Corporation.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Storage Technology Corporation
By: /s/ David E. Lacey
----------------------------
David E. Lacey
Corporate Vice President and
Interim Chief Financial Officer
Date: April 15, 1996
STOCK PURCHASE AGREEMENT
between
LEASETEC CORPORATION
and
STORAGE TECHNOLOGY CORPORATION
dated as of March 29, 1996
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement) is made as of March 29,
1996, by LEASETEC CORPORATION, a Delaware corporation (Buyer),
and STORAGE TECHNOLOGY CORPORATION, a Delaware corporation
(Seller).
RECITALS
Seller desires to sell, and Buyer desires to purchase, all of the issued and
outstanding shares of capital stock of STORAGETEK FINANCIAL
SERVICES CORPORATION, a Delaware corporation (the Acquired
Company), for the consideration and on the terms set forth in this
Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, capitalized terms used herein have the
meanings specified or referred to in the Glossary attached hereto as
Exhibit A ("Glossary").
ARTICLE 2 - SALE AND TRANSFER OF SHARES; PURCHASE PRICE; CLOSING
2.1 Shares. Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell, transfer, assign
and deliver to Buyer, and Buyer will purchase from Seller
185,810 shares of common stock, $.10 par value per share,
of the Acquired Company (the "Shares").
2.2 Purchase Price. The purchase price (the "Purchase
Price") for the Shares will be equal to $200,700,000.00,
subject to the provisions of Section 2.5 below.
2.3 Closing. The consummation of the purchase and sale of
the Shares (the "Closing") will take place at the offices of
Storage Technology Corporation at 2270 S. 88th Street,
Louisville, Colorado 80028, at 9:00 a.m. (Denver time), on
March 29, 1996 or at such time and place as the parties
may agree.
2.4 Closing Obligations. At the Closing:
(A) Seller will deliver to Buyer:
(1) certificates representing the Shares,
accompanied by duly executed stock powers, for
transfer to Buyer;
(2) releases obtained by Seller with respect to any
cancelled or extinguished debt;
(3) the certificate of the Secretary or an assistant
secretary of Seller dated the Closing Date, in
form and substance reasonably satisfactory to
Buyer; as to (i) the resolutions of the Board of
Directors (or a duly authorized committee
thereof) of Seller authorizing the execution and
performance of this Agreement and the
transactions contemplated hereby (including a
copy thereof); and (ii) incumbency and
signature certificates for the officers of Seller
executing this Agreement and any ancillary
agreements;
(4) opinion of W. Russell Wayman substantially in
the form of Exhibit B;
(5) certificates of good standing of Seller issued as
of a recent date by the Secretary of State of
Delaware and Colorado;
(6) resignations signed by each Director of the
Acquired Company, and certain officers,
including David E. Lacey, W. Russell Wayman
and Lizbeth J. Stenmark; and
(7) documentation evidencing the termination,
effective as of March 20, 1996, of each of the
Operating and Support Agreements dated April
2, 1994, between Seller and the Acquired
Company.
(B) Buyer will deliver to Seller:
(1) the Purchase Price by wire transfer of
immediately available funds to Seller, in
accordance with the instructions set forth in
Schedule 2.4(B);
(2) The Guaranty of Leasetec;
(3) the Certificate of the Secretary or an assistant
Secretary of Buyer, dated the Closing Date, in
form and substance reasonably satisfactory to
Seller; as to (i) the resolutions of the Board of
Directors (or a duly authorized committee
thereof) of Buyer authorizing the execution and
performance of this Agreement and the
transactions contemplated hereby (including
copies thereof); and (ii) incumbency and
signature certificates for the officers of Buyer
executing this Agreement and any ancillary
agreements;
(4) opinion of William H. Nikkel, substantially in
the form of Exhibit C; and
(5) certificates of good standing of Buyer issued as
of a recent date issued by the Secretary of
State of Delaware and Colorado.
2.5 Post-Closing Purchase Price Adjustments.
(A) Purchase Price Adjustment. The Purchase Price will
be adjusted for sales, terminations, and other
dispositions occurring during the period of March 1
through March 29, 1996, and renewals, upgrades and
extensions occurring between the period of January 1,
1996 through March 29, 1996, in the manner described
in subsections (B) and (C) below. The net adjustment,
as mutually agreed to by Seller and Buyer as soon as
practicable following the Closing, will be paid to the
other party within 72 hours of reaching such
agreement.
(B) Sales, Terminations and Other Dispositions. The
Purchase Price will be reduced by (i) the aggregate
price as identified on the diskette provided by Leasetec
on February 8, 1996 (the "Leasetec Disk") for all
Equipment and Lease sales, terminations and other
dispositions that occur during the period of March 1
through March 29, 1996; plus (ii) interest on the
amount in (i) at a rate of 6.25% through March 29,
1996; minus (iii) the rents due on such Equipment
from January 1, 1996 through March 29, 1996.
(C) Renewals, Upgrades, and Extensions. The Purchase
Price will be increased for Equipment and Lease
renewals, upgrades, and extensions that occur during
the period of January 1 through March 29, 1996. The
values shall be based on the underlying economics for
the specific products detailed in the Leasetec Disk,
adjusted for a valuation as of March 29, 1996.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization and Good Standing.
(A) Section 3.1(A) of the Disclosure Letter attached hereto
as Exhibit D contains a complete and accurate list for
the Acquired Company of its name, its jurisdiction of
incorporation, other jurisdictions in which it is
qualified to do business, and its capitalization
(including the identity of each stockholder and the
number of shares held by each). The Acquired
Company is a corporation duly organized, validly
existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate power
and authority to conduct its business as it is now
being conducted, to own or use the properties and
assets that it purports to own or use, and to perform
all its obligations under Applicable Contracts. The
Acquired Company is duly qualified to do business as
a foreign corporation in such jurisdictions in the
United States and is in good standing under the laws
of each state or other jurisdiction in the United States
in which either the ownership or use of the properties
owned or used by it, or the nature of the activities
presently conducted by it, requires such qualification,
except where the failure to do so would not have a
material adverse effect.
(B) Seller has delivered to Buyer copies of the charter and
bylaws of the Acquired Company, as currently in
effect.
3.2 Authority; No Conflict.
(A) Upon execution and delivery by Seller, this Agreement
will constitute the legal, valid, and binding obligation
of Seller, enforceable against Seller in accordance with
its terms. Seller has full power and authority to
execute and deliver this Agreement and to perform its
obligations under this Agreement.
(B) Except as set forth in Section 3.2(B) of the Disclosure
Letter, neither the execution and delivery of this
Agreement nor the consummation or performance of
any of the transactions contemplated by this
Agreement will, directly or indirectly (with or without
notice or lapse of time):
(1) contravene, conflict with, or result in a
violation of (A) any provision of the charter or
bylaws of the Acquired Company; or (B) any
resolution adopted by the board of directors or
the stockholders of the Acquired Company;
(2) contravene, conflict with, or result in a
violation of any Order or any material Legal
Requirement to which the Acquired Company
or Seller, or any of the assets currently owned
or used by the Acquired Company, may be
subject;
(3) contravene, conflict with, or result in a
violation of any of the terms or requirements
of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate,
or modify, any Governmental Authorization
that is held by the Acquired Company or that
otherwise relates to the current business of, or
any of the assets owned or used by, the
Acquired Company;
(4) contravene, conflict with, or result in a
violation or breach of any provision of, or give
any Person the right to declare a default or
exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel,
terminate, or modify, any material Contract; or
(5) result in the imposition or creation of any
Encumbrance upon or with respect to any of
the assets owned or used by the Acquired
Company other than any Encumbrance in favor
of Buyer or any Affiliate of Buyer.
Except as set forth in Section 3.2(B) of the Disclosure
Letter, neither Seller nor the Acquired Company is or will
be required to give any notice to or obtain any consent from
any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of
any of the transactions contemplated in this Agreement,
which has not already been obtained.
3.3 Capitalization. The authorized equity securities of the
Acquired Company consist of 200,000 shares of common
stock, $0.10 par value per share, of which 185,810 shares
are issued and outstanding as of the date hereof and
constitute the Shares. Seller is and will be on the Closing
Date the record and beneficial owner and holder of the
Shares, free and clear of all Encumbrances. No legend or
other reference to any purported Encumbrance appears
upon any certificate representing equity securities of the
Acquired Company. All of the outstanding equity securities
of the Acquired Company have been duly authorized and
validly issued and are fully paid and nonassessable. There
are no Contracts relating to the issuance, sale, or transfer
of any equity securities or other securities of the Acquired
Company. None of the outstanding equity securities or
other securities of the Acquired Company was issued in
violation of the Securities Act of 1933 or any other Legal
Requirement. The Acquired Company does not own, nor is
it a party to any Contract to acquire, any equity securities
or other securities of any Person or any direct or indirect
equity or ownership interest in any other business or
relating to the issuance of any of its securities.
3.4 Assets of the Acquired Company. The assets of the
Acquired Company consist of Leases, Equipment, certain
non-Lease Contracts and Intellectual Property (the Leases,
Equipment, non-Lease Contracts and Intellectual Property
collectively referred to herein as the "Assets"). Seller
herewith is delivering to Buyer a list of all of the Acquired
Company's Leases and Equipment as of the Closing Date,
attached hereto as Schedule 3.4. The Acquired Company's
non-Lease Contracts are identified in Section 3.12(A) of the
Disclosure Letter and the Intellectual Property is described
in Section 3.17(A) of this Agreement.
3.5 Books and Records. The books of account, minute books,
stock record books, and other records of the Acquired
Company, all of which have been made available to Buyer,
are complete and correct and have been maintained in
accordance with reasonable and customary business
practices, including the maintenance of an adequate system
of internal controls. The minute books of the Acquired
Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the
stockholders, the Board of Directors, and committees, if any
of the Board of Directors of the Acquired Company, and no
meeting of any such stockholders, Board of Directors, or
committee has been held for which minutes have not been
prepared and are not contained in such minute books. At
the Closing, all of those books and records will be in the
possession of the Acquired Company.
3.6 Title to Properties; Encumbrances. The Acquired
Company owns (with good and marketable title) all the
Assets. All Assets are free and clear of all Encumbrances,
except as disclosed in Section 3.6 of the Disclosure Letter,
and liens for current taxes not yet due.
3.7 No Undisclosed Liabilities. Except as set forth in
Section 3.7 of the Disclosure Letter and obligations under
Leases, the Acquired Company has no liabilities or
obligations of any nature which are material to the
Acquired Company taken as a whole. The Acquired
Company will pay the liabilities associated with the Third
Party Agreements identified in Section 3.7 of the Disclosure
Letter. Seller agrees to reimburse the Acquired Company
promptly following receipt of an invoice, an amount equal
to the amount paid by the Acquired Company thereunder.
3.8 Taxes.
(A) Except as disclosed in Section 3.8 of the Disclosure
Letter, the Acquired Company has filed or caused to
be filed (on a timely basis since the date of its
incorporation) all Tax Returns that are or were
required to be filed by or with respect to it, pursuant
to applicable Legal Requirements, except with respect
to 1995 income tax returns which as of the date of this
Agreement have not been filed. Seller has made
available to Buyer copies of all such Tax Returns
relating to income or franchise taxes filed since the
date of incorporation of the Acquired Company. The
Acquired Company has paid, or made provision for the
payment of, all Taxes that have or may have become
due pursuant to those Tax Returns or otherwise, or
pursuant to any assessment received by Seller or the
Acquired Company.
(B) The United States federal and state income Tax
Returns of the Acquired Company subject to such
Taxes have not been audited by the IRS or relevant
state tax authorities and the applicable statute of
limitations for the taxable years remain open; Seller
believes that it is reasonably likely that the applicable
statute of limitations will be extended for the
consolidated federal income tax returns and combined
state income tax filings which the Acquired Company
has been included.
(C) There exists no proposed tax assessment against the
Acquired Company. All Taxes that the Acquired
Company is or was required by Legal Requirements to
withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to
the proper Governmental Body or other Person.
(D) All Tax Returns filed by the Acquired Company are
true, correct, and complete in all material respects.
There is no tax sharing agreement that will require
any payment by the Acquired Company after the date
of this Agreement.
(E) The Acquired Company is not and, since its formation,
has not been an "S" corporation.
3.9 Employee Benefits.
(A) Set forth in Section 3.9(A)(i) of the Disclosure Letter is
an accurate and complete list of all "employee benefit
plans" (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA")) maintained, sponsored or contributed to by
Seller, the employees of which are treated as employed
by a single employer, for any purposes, along with
employees of the Acquired Company, in accordance
with Sections 414(b),(c),(m) or (o) of the IRC ("ERISA
Affiliate") and which are maintained for the benefit of
employees, former employees or retirees of Seller and
the Acquired Company ("Company Plans"). There are
no "employee benefit plans" (as defined in Section 3(3)
of ERISA) maintained, sponsored or contributed to or
to which there is, or during the preceding five (5)
years, was an obligation to contribute to by Seller or
any ERISA Affiliate which is subject to Title IV of
ERISA.
(B) Each Company Plan has been maintained in material
compliance with applicable law, including the IRC and
ERISA.
3.10 Compliance with Legal Requirements;
Governmental Authorizations.
(A) Except as set forth in Section 3.10 of the Disclosure
Letter:
(1) the Acquired Company is, and at all times
since its organization has complied in all
material respects with each Legal Requirement
that is or was applicable to it or to the conduct
or operation of its business or the ownership or
use of any of its assets;
(2) no event has occurred or circumstance exists
that (with or without notice or lapse of time)
would constitute or result in a violation by the
Acquired Company of, or a failure on the part
of the Acquired Company to comply in all
material respects with, any Legal Requirement;
and
(3) the Acquired Company is not subject to any
pending action, suit or proceeding by any
Governmental Body or any other Person
regarding (a) any alleged violation of, or failure
to comply with, any Legal Requirement, or (b)
any alleged obligation on the part of the
Acquired Company to undertake, or to bear all
or any portion of the cost of, any remedial
action of any nature imposed by any
Governmental Body.
(B) The Acquired Company has all Governmental
Authorizations which are material to its business as
currently conducted. Except as set forth in Section
3.10(B) of the Disclosure Letter, the Acquired
Company is, and at all times since its organization has
complied in all material respects with all of the terms
and requirements of each Governmental Authorization
identified in Section 3.10(B) of the Disclosure Letter no
event has occurred or circumstance exists that may
(with or without notice or lapse of time) result directly
or indirectly in the revocation, withdrawal, suspension,
cancellation, or termination of, or any modification to,
any such Governmental Authorization; and
3.11 Legal Proceedings; Orders.
(A) Except as set forth in Section 3.11(A) of the Disclosure
Letter, there is no pending Proceeding:
(1) that has been commenced by or against the
Acquired Company or that otherwise relates to
or may affect the business of, or any of the
assets owned or used by, the Acquired
Company; or
(2) that challenges, or that may have the effect of
preventing, delaying, making illegal, or
otherwise interfering with, any of the
transactions contemplated in this Agreement.
To Seller's Knowledge; (i) no such Proceeding has been
Threatened; and (ii) no event has occurred or
circumstance exists that will give rise to or serve as a
basis for the commencement of any such Proceeding.
Seller has delivered to Buyer copies of all pleadings,
correspondence, and other documents relating to each
Proceeding listed in Section 3.11(A) of the Disclosure
Letter.
(B) There is no Order to which the Acquired Company, or
any of the assets owned or used by the Acquired
Company, is subject, nor is Seller subject to any Order
that relates to the business of, or any of the assets
owned or used by, the Acquired Company. To Seller's
Knowledge, no officer, director, or employee of the
Acquired Company is subject to any Order that
prohibits such officer, director, or employee from
engaging in or continuing any conduct, activity, or
practice relating to the business of the Acquired
Company.
3.12 Contracts and Leases.
(A) Section 3.12(A) of the Disclosure Letter contains a
complete and accurate list of the Acquired Company's
non-Lease Contracts. Seller has made available for
inspection by Buyer the Acquired Company's original
or, if approved by Buyer, true and complete copies, of
the following:
(1) all Contracts that constitute financing
agreements or that involve performance of
services for or delivery of goods or materials to
the Acquired Company, which were effective for
any period or transaction since its organization;
(2) each licensing agreement or other Contract
with respect to patents, trademarks,
copyrights, or other intellectual property;
(3) each employment agreement with any
employee of the Acquired Company;
(4) all Contracts (however named) involving a
sharing of profits, losses, costs, or liabilities by
the Acquired Company with any other Person;
(5) all Contracts containing covenants that in any
way purport to restrict the business activity of
the Acquired Company or limit the freedom of
the Acquired Company to engage in any line of
business or to compete with any Person;
(6) each Contract providing for payments to or by
any Person based on sales, purchases, or
profits, other than direct payments for
Equipment;
(7) each power of attorney that is currently
effective and outstanding, except powers of
attorney included in any Leases;
(8) each Contract that contains or provides for an
express undertaking by the Acquired Company
to be responsible for consequential damages;
(9) each Contract for capital expenditures in excess
of $50,000;
(10) each written warranty, other than warranties
directly pertaining to Leases and Equipment,
guaranty, and or other similar undertaking
with respect to contractual performance
extended by the Acquired Company (either by
itself or jointly or severally with others); and
(11) each amendment, supplement, and modification
(whether oral or written) in respect of any of
the foregoing.
(B) Except as set forth in Section 3.12(B) of the Disclosure
Letter, no officer or employee of the Acquired
Company is bound by any Contract that purports to
limit the ability of such officer or employee to engage
in or continue any conduct, activity, or practice
relating to the business of the Acquired Company.
(C) Except as set forth in Section 3.12(C) of the Disclosure
Letter, each material Contract held by the Acquired
Company is in full force and effect and is valid and
enforceable in accordance with its terms.
(D) Except as set forth in Section 3.12(D) of the Disclosure
Letter, with respect to non-Lease Contracts:
(1) the Acquired Company is, and at all times
since its organization has been, in full
compliance with all applicable terms and
requirements of each material Contract under
which the Acquired Company has or had any
obligation or liability or by which the Acquired
Company or any of the assets owned or used by
the Acquired Company is or was bound;
(2) to Seller's Knowledge, each other Person that
has or had any obligation or liability under any
Contract under which the Acquired Company
has rights is in full compliance with all
applicable terms and requirements of such
Contract;
(3) to Seller's Knowledge, no event has occurred or
circumstance exists that (with or without notice
or lapse of time) may contravene, conflict with,
or result in a violation or breach of, or give the
Acquired Company or other Person the right to
declare a default or exercise any remedy under,
or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any material
Contract; and
(4) the Acquired Company has not given to or
received from any other Person, any notice or
other communication (whether oral or written)
regarding any actual, alleged, possible, or
potential violation or breach of, or default
under, any material Contract.
(E) With respect to Leases held by the Acquired Company
as of the time of Closing:
(1) With regard to the Equipment associated with
such Leases, each unit:
(i) was program compatible with Obligor's
computer systems;
(ii) conformed with any warranties actually
given to the Obligor by Seller or its
subsidiaries;
(iii) was qualified for Seller's standard
maintenance/service contract;
(iv) to Seller's Knowledge, had not suffered
any loss or damage, except for
Equipment that had been restored to its
original condition, ordinary wear and
tear excepted;
(v) all necessary licenses for use of the
Software provided by Seller on, for, or
with such Equipment had been obtained
from the supplier having the right to
grant such license;
(vi) the Equipment and Leases were subject
to the representations, warranties and
indemnities contained in Seller's
standard form of purchase agreement
("Purchase Agreement"), attached hereto
as Exhibit F;
(vii) to the extent the files do not contain a
certificate of acceptance from an Obligor
(or a certificate is otherwise unavailable),
all associated items of Equipment and
Software have been delivered to and are
in the possession of any such Obligors
and have been installed, tested (pursuant
to Seller's standard installation
procedures and any special test
procedures agreed to in writing by Seller)
and accepted for use by any such
Obligors; and
(viii)no agreement has been made by Seller or
the Acquired Company with the Obligor
concerning the price or terms on which
the Equipment can be purchased by the
Obligor during or upon the expiration of
the Lease term, except for written
agreements that have been previously
provided to Buyer, nor has any
agreement been made with the Obligor
with respect to the continued use of the
Equipment after the expiration of the
stated Lease term.
(2) With respect to Leases held by the Acquired
Company as of the time of Closing:
(i) with respect to Leases containing special
terms, notwithstanding such special
terms, the obligation of each Obligor to
make payments required by its Lease
throughout the term thereof is
unconditional, without any right of setoff
by Obligor and without regard to the
obsolescence of the underlying
Equipment, any claim or defense of such
Obligor against Seller or the Acquired
Company or any change in circumstance
of such Obligor;
(ii) neither the Acquired Company nor Seller
have collected, nor are they holding any
security deposit or rental payments on
any Lease;
(iii) Seller has no actual knowledge of any
material breach by an Obligor of any of
its material obligations under any Lease,
except as have been previously disclosed
to Buyer in writing;
(iv) each Lease is duly authorized and validly
executed by the Obligor and constitutes
a legally valid, binding and effective
agreement enforceable against such
Obligor in accordance with its terms;
each Lease constitutes the entire
understanding between the Acquired
Company or Seller, as the case may be,
and the Obligor with respect to the lease
of the Equipment and has not been
modified in any way, revoked, or
rescinded and remains in full force and
effect; and
(v) all of the executed originals (whether
manually signed or carbon originals) of
each Lease are in the possession of the
Acquired Company (other than those
executed originals of the Lease in
Obligor's possession).
(3) There are no UCC filings now in effect which
evidence, indicate or provide notice of any
claims, liens, encumbrances or other security
interest on or against any Equipment or any
Leases or the proceeds of any of them, except
those in favor of the Acquired Company and
Buyer, and any UCC releases and termination
statements concerning the Leases and
Equipment which shall be delivered to Buyer
(in form and substance satisfactory to Buyer)
within 30 days following the Closing Date.
(F) All Leases have been entered into in the Ordinary
Course of Business and have been entered into
without the commission of any act alone or in concert
with any other Person, or any consideration having
been paid or promised, that is or would be in violation
of any Legal Requirement.
3.13 Insurance.
(A) Seller has delivered to Buyer:
(1) true and complete copies of all policies of
insurance to which the Acquired Company is a
party or under which the Acquired Company,
or any director of the Acquired Company, or
any Assets of the Acquired Company, is or has
been covered at any time since its organization;
and
(2) any statement by the auditor of the Acquired
Company's financial statements with regard to
the adequacy of such entity's coverage or of the
reserves for claims.
(B) Except as set forth on Section 3.13(B) of the Disclosure
Letter:
(1) All policies to which the Acquired Company is
a party or that provide coverage to the
Acquired Company, or any director or officer of
the Acquired Company:
(i) are valid, outstanding, and enforceable;
(ii) taken together, provided through the
time of the Closing, but not thereafter,
adequate insurance coverage for the
Assets and the operations of the
Acquired Company for all risks normally
insured against by a Person carrying on
the same business as the Acquired
Company; and
(iii) are sufficient for compliance with all
Legal Requirements and Contracts to
which the Acquired Company is a party
or by which it is bound.
(2) Neither Seller nor the Acquired Company has
received (A) any refusal of coverage or any notice
that a defense will be afforded with reservation of
rights with respect to the Acquired Company; or
(B) any notice of cancellation or any other
indication that any insurance policy is no longer
in full force or effect or will not be renewed or
that the issuer of any policy is not willing or able
to perform its obligations thereunder with respect
to the Acquired Company through the time of the
Closing, but not thereafter.
(3) Seller or the Acquired Company has paid all
premiums due, and has otherwise performed all
of its obligations, under each policy to which the
Acquired Company is a party or that provides
coverage to the Acquired Company or director
thereof.
(4) Seller or the Acquired Company has given notice
to the insurer of all claims that may be insured
thereby.
3.14 Environmental Matters. Except as set forth in
Section 3.14 of the Disclosure Letter:
(A) The Acquired Company is, and at all times has been,
in full compliance with, and has not been and is not in
violation of or liable under, any Environmental Law,
nor is the Acquired Company subject to any pending
claim, suit, action or proceeding, relating to any
Environmental Law or Hazardous Materials a
violation of which could reasonably be expected to
have a material adverse effect on the business of the
Acquired Company.
(B) Seller is not subject to any pending claim, suit, action
or proceeding relating to any Environmental Law or
Hazardous Materials and, to Seller's Knowledge, no
such proceedings have been Threatened with respect
to or affecting any properties or facilities in which the
Acquired Company has an interest, a violation of
which could reasonably be expected to have a material
adverse effect on the business of the Acquired
Company.
3.15 Employees.
(A) A list containing the following information for each
employee of the Acquired Company has previously
been supplied to the Buyer: name; job title; current
compensation; and accrued vacation. In addition,
Seller has provided Buyer summaries of all employee
benefit plans.
(B) Each employee of the Acquired Company is a party to,
or is otherwise bound by a nondisclosure/proprietary
information agreement concerning the confidentiality
of certain information and the proprietary rights of
Seller substantially in the form attached to the
Disclosure Letter as Schedule 3.15(B) (the
"Nondisclosure Agreement"). No employee of the
Acquired Company is a party to or bound by any non-
compete agreement with the Seller.
3.16 Labor Relations; Compliance. Since its
organization, the Acquired Company has not been and
is not now a party to any collective bargaining
Agreement. Since the Acquired Company's
organization, there has not been, there is not presently
pending or existing, and to Seller's Knowledge there is
not Threatened, (a) any strike, slowdown, picketing,
work stoppage, or employee grievance process, (b) any
Proceeding against or affecting the Acquired Company
relating to the alleged violation of any Legal
Requirement pertaining to labor relations or
employment matters, including any charge or
complaint filed by an employee or union with the
National Labor Relations Board, the Equal
Employment Opportunity Commission, or any
comparable Governmental Body, organizational
activity, or other labor or employment dispute against
or affecting any of the Acquired Company or their
premises, or (c) any application for certification of a
collective bargaining agent.
3.17 Intellectual Property.
(A) Intellectual Property Assets. For purposes of this
Agreement, "Intellectual Property Assets" means:
(1) the name "StorageTek Financial Services
Corporation", "SFSC", all fictional business
names, trading names, registered and
unregistered trademarks, service marks, and
applications (collectively, "Marks"); and
(2) all know-how, trade secrets, confidential
information, customer lists, software, technical
information, data, process technology, plans,
drawings, and blue prints (collectively, "Trade
Secrets"), owned, used, or licensed by the
Acquired Company as licensee or licensor.
(B) Intellectual Property Contracts. Section 3.17(B) of the
Disclosure Letter contains a summary description of
any royalties paid or received by the Acquired
Company, of all Contracts relating to the Intellectual
Property Assets to which the Acquired Company is a
party or by which the Acquired Company is bound,
except for any license implied by the sale of
Equipment , the Nondisclosure Agreements and
perpetual, paid-up licenses for commonly available
software programs with a value of less than $5,000
under which the Acquired Company is the licensee,
and confidential information and customer lists, which
have previously been made available to Buyer. There
are no outstanding and, to Seller's Knowledge, no
Threatened disputes or disagreements with respect to
any such agreements.
(C) Know-How Necessary for the Business. The
Intellectual Property Assets are all those necessary for
the operation of the Acquired Company's business as
it is currently conducted. The Acquired Company is
the owner of all right, title, and interest in and to each
of the Marks and Trade Secrets, free and clear of all
liens, security interests, charges, encumbrances,
equities, and other adverse claims, and has the right
to use without payment to a third party all of the
Intellectual Property Assets; provided, however, the
name "StorageTek" is owned by Seller and will be used
by the Acquired Company in the future only in
conformance with terms of the license set forth in the
Operating Agreement of even date herewith between
Seller and the Acquired Company. The Acquired
Company does not hold any marks registered with the
U.S. Patent and Trademark Office or any copyrights.
(D) Trade Secrets.
(1) The Acquired Company has taken reasonable
precautions to protect the secrecy and
confidentiality of its Trade Secrets;
(2) The Acquired Company has the right to use the
Trade Secrets. The Trade Secrets are not part of
the public knowledge or literature, and, to Seller's
Knowledge, have not been used, divulged, or
appropriated either for the benefit of any Person
other than Seller or the Acquired Company, or to
the detriment of the Acquired Company.
3.18 Certain Payments. To Seller's Knowledge, neither
the Acquired Company nor any director, officer, agent,
or employee of the Acquired Company, nor any other
Person acting for the Acquired Company, has directly
or indirectly (1) made any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or other
payment to any Person, private or public, regardless of
form, whether in money, property, or services (i) to
obtain favorable treatment in securing business; (ii) to
pay for favorable treatment for business secured; (iii)
to obtain special concessions or for special concessions
already obtained, for or in respect of the Acquired
Company or, (2) established or maintained any fund or
asset that has not been recorded in the books and
records of the Acquired Company.
3.19 Disclosure. None of the representations or
warranties of Seller in this Article 3 and none of the
statements in the Disclosure Letter intentionally omits
to state a material fact necessary to make the
statements herein or therein, in light of the
circumstances in which they were made, misleading in
any material respect.
3.20 Brokers or Finders. Seller and its agents have
incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection
with this Agreement.
<PAGE>
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization and Good Standing. Buyer is a corporation
duly organized, validly existing, and in good standing under
the laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct its business as it
is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its
obligations under its Contracts. Buyer is duly qualified to
do business as a foreign corporation in such jurisdictions in
the United States and is in good standing under the laws
of each state or other jurisdiction in the United States in
which either the ownership or use of the properties owned
or used by it, or the nature of the activities presently
conducted by it, requires such qualification, except where
the failure to do so would not have a material adverse
effect.
4.2 Authority; No Conflict.
(A) Upon execution and delivery by Buyer, this Agreement
will constitute the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with
its terms subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws relating
to creditors rights and to general principals of equity.
Buyer has full power and authority to execute and
deliver this Agreement and to perform its obligations
under this Agreement.
(B) Neither the execution and delivery of this Agreement
by Buyer nor the consummation or performance of any
of the transactions contemplated by this Agreement
will, directly or indirectly (with or without notice or
lapse of time):
(1) contravene, conflict with, or result in a violation
of (A) any provision of the charter or bylaws of
Buyer; or (B) any resolution adopted by the board
of directors or the stockholders of Buyer;
(2) contravene, conflict with, or result in a violation
of any Order or any material Legal Requirement
to which the Buyer, or any assets currently
owned or used by Buyer may be subject;
(3) contravene, conflict with, or result in a violation
of any of the terms or requirements of, or give
any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify,
any Governmental Authorization that is held by
Buyer or that otherwise relates to the business of,
or any of the assets owned or used by Buyer;
(4) contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person
the right to declare a default or exercise any
remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify,
any material Applicable Contract; or
(5) result in the imposition or creation of any
Encumbrance upon or with respect to any of the
assets owned or used by Buyer other than any
Encumbrance in favor of Buyer.
Buyer is not and will not be required to obtain any Consent
from any Person in connection with the execution and
delivery of this Agreement or the consummation or
performance of any of the transactions contemplated by
this Agreement, which has not already been obtained.
4.3 Investment Intent. Buyer is acquiring the Shares for its
own account and not with a view to their distribution
within the meaning of Section 2(11) of the Securities Act of
1933.
4.4 Certain Proceedings. There is no pending Proceeding
that has been commenced against Buyer that challenges, or
may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions
contemplated in this Agreement, and to Buyer's Knowledge,
no such Proceeding has been Threatened.
4.5 Brokers or Finders. Buyer and its officers and agents
have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with
this Agreement.
ARTICLE 5 - ADDITIONAL AGREEMENTS
5.1 Certain Service Obligations. Seller and Buyer agree
that certain Contracts listed on Schedule 5.1 hereto,
contain certain obligations which Seller will not reasonably
be in a position to perform after the Closing Date and agree
that the performance of these certain obligations will be
provided in accordance with a separate agreement between
Seller and the Acquired Company.
5.2 Tax Matters.
(A) Section 338(h)(10) Election. Seller will join with the
Buyer in making an election under Section 338(h)(10)
of the IRC (and any corresponding elections under
state or local tax law) (collectively a "Section
338(h)(10) Election") with respect to the purchase and
sale of the Shares of the Acquired Company
hereunder. Seller will pay any income tax attributable
to the making of the Section 338(h)(10) Election and
will indemnify Buyer and the Acquired Company
against any adverse consequences arising out of any
failure to pay such tax.
(B) Allocation of Purchase Price. The parties agree that
the Purchase Price and the liabilities of the Acquired
Company (plus other relevant items) will be allocated
to the Assets of the Acquired Company for all purposes
(including Tax and financial accounting purposes) in
accordance with Section 338(h)(10)(c) of the IRC.
Buyer, the Acquired Company and Seller will file all
Tax Returns (including amended returns and claims
for refund) and information reports in a manner
consistent with such allocation. As soon as practicable
after the Closing, but no later than one hundred eighty
(180) days following the Closing Date, Buyer shall
deliver to Seller a schedule (the "Proposed Allocation
Schedule") in accordance with the above allocation at
the serial number level. Subject to agreement between
Buyer and Seller regarding the Proposed Allocation
Schedule, Buyer shall prepare, and Buyer and Seller
agree to file Internal Revenue Service Form 8023-A
and required attachments by the 15th day of the ninth
month following the month that includes the Closing
Date, and all federal, state, local and other Tax
Returns, in accordance with the Allocation Schedule.
Buyer and Seller each agree to provide the other party
with any other information required to complete Form
8023-A.
(C) Tax Returns. Seller will include the income of the
Acquired Company on the Seller's and the Acquired
Company's federal and state income Tax Returns for
all periods through the Closing Date and pay any Tax
attributable to such income. The Acquired Company
will furnish all required Tax information to Seller for
inclusion in Seller's and the Acquired Company's
federal and state income Tax Returns for the period
which includes the Closing Date. The Acquired
Company will arrange for an officer of the Acquired
Company to sign any Tax Returns, extensions,
settlement agreements, court filings or any other
documents requested by Seller with respect to tax
audits or Taxes for which Seller is liable. The income
and income tax liabilities of the Acquired Company
will be calculated for the period up to and including
the Closing Date and the period after the Closing Date
by closing the books of the Acquired Company as of
the end of the Closing Date. The Acquired Company
is responsible for remitting taxes and filing separate
state income Tax Returns for years beginning
subsequent to December 30, 1995 for those states that
do not recognize the Section 338(h)(10) Election or do
not terminate the taxable year of the Acquired
Company at the Closing Date.
(D) Personal Property Taxes. Seller shall be liable for and
shall pay all personal property taxes applicable to the
Acquired Company's fixed Assets, excluding all leased
Equipment, for which the lien date (i.e., the date on
which the relevant Governmental Body assesses such
Tax) is on or prior to the Closing Date (whether or not
billed on or prior to the Closing Date), and Buyer shall
file renditions, be liable for and shall pay all other
personal property taxes applicable to the Acquired
Company's Assets payable after the Closing Date.
(E) Sales; Use; Transfer; Stamp Taxes. Any sales tax, use
tax, real property transfer or gains tax, documentary
stamp tax or similar tax directly attributable to the
sale, deemed sale (including Section 338(h)(10)
Election) or transfer of the Acquired Company or its
Assets or the assumed debt shall be paid by Buyer.
Buyer and Seller agree to timely sign and deliver such
certificates or forms as Buyer or Seller may request
and as may be necessary and appropriate to establish
an exemption from (or otherwise reduce), or make a
report with respect to, such Taxes. If, as a result of
the imposition of such Taxes, Seller is entitled to claim
a refund or credit of any Tax (or is entitled to pass
through to Buyer a refund or credit of any Tax), Seller
shall promptly pay to Buyer the amount of such
refund or credit upon receipt thereof by Seller (or shall
pass through to Buyer such refund or credit).
(F) Unpaid Taxes. There are no Taxes assessed or due
and unpaid on the Acquired Company, its Assets or
operations, except as disclosed in Section 3.8 of the
Disclosure Letter. Any sales/use taxes on purchase,
lease or rental of the Acquired Company's Assets
which have been billed by Seller prior to the Closing
Date and collected by Seller will be reported and paid
by Seller, with copies of such records and reports being
made available to Buyer on request after the Closing
Date. The terms of certain Leases negotiated by Seller
or the Acquired Company prior to the Closing Date
("Lease Tax Provisions") do not provide for payment by
the Obligor of property taxes on the Equipment. Such
Leases have been reviewed by both Buyer and Seller
and are listed by serial number on Schedule 5.2(F).
Seller agrees to reimburse Buyer for property taxes
paid on such serial numbers for the assessment
periods designated in that Schedule. Buyer will
invoice Seller annually for such property taxes which
are paid by Buyer and are not collectible, except that
Seller's obligation to reimburse such property taxes
with respect to a Lease shall not be increased by any
modification of such Lease occurring after the Closing
Date.
(G) Tax Reimbursements. Each party hereto shall provide
reimbursement for any Tax which is the responsibility
of such party in accordance with the terms of this
Section 5.2 and which is paid by any other party
hereto. Within a reasonable time prior to the payment
of any such Tax, the party or parties paying such Tax
shall give notice to the other party or parties of the
Tax payable and the portion which is the liability of
each party, although failure to do so will not relieve
the other party from its liability hereunder.
5.3 Employee Benefit Matters.
(A) Buyer agrees to provide, or cause the Acquired
Company to provide, those persons employed by the
Acquired Company immediately prior to the Closing,
including any employees on vacation, leave of absence,
disability or sick leave (the "Acquired Company
Employees"), with employment benefits that in the
aggregate are substantially equivalent to, and no less
favorable than, those provided by Buyer to its
employees at the time of the Closing.
(B) Buyer agrees to provide each Acquired Company
Employee with the following:
(1) the amount of accrued but unused vacation hours
(the "Unused Vacation") reflected in Section 3.7 of
the Disclosure Letter, excluding any amounts
reflected on the records as accrued but unused
paid-time-off; and
(2) credit for service with Seller, the Acquired
Company or any Affiliate of Seller prior to the
Closing Date for purposes of determining
eligibility, vesting or benefit accrual under any
and all benefit plans offered by Buyer or the
Acquired Company following the Closing, and
Buyer agrees to waive any waiting periods with
respect to participation in any benefit plans or
programs other than with respect to participation
in Buyer's 401(k) plan, except to the extent
provided in Section 5.3(D) below.
(C) Buyer shall offer certain employees of the Acquired
Company temporary employment commencing on the
date following the Closing Date through June 30,
1996, and has previously identified these employees to
Seller ("Temporary Employees") and, with respect to
Temporary Employees, Buyer shall be responsible for
any and all severance liabilities and obligations
including employer payroll taxes ("Severance
Payments"). Buyer agrees to compute Severance
Payments, if any, in accordance with Seller's severance
policy as in effect on the Closing Date. Buyer further
agrees that no Severance Payments will be made to
any Temporary Employee terminated for cause or in
connection with a voluntary termination. Seller agrees
to reimburse Buyer within thirty (30) days following
receipt of an invoice, an amount equal to the amount
of the Severance Payments.
(D) With respect to each Acquired Company Employee,
Buyer agrees to accept all loan balances outstanding
under Seller's 401(k) benefit plans within thirty (30)
days following the Closing Date, as described on
Schedule 5.3 attached hereto, and all direct rollovers
from Seller's 401(k) plan at any time following the
Closing Date.
(E) Buyer agrees to pay to certain Acquired Company
Employees retention bonuses, as contemplated by the
Short-Term Retention Letters which have previously
been provided to Buyer. Seller agrees to reimburse
Buyer within thirty (30) days following receipt of an
invoice, an amount equal to the sum of all retention
bonuses paid to such Acquired Company Employees.
5.4 Remittances After Closing. Buyer agrees to promptly
remit, by wire transfer to Seller, amounts equal to all
payments received by Buyer or the Acquired Company, on
account of amounts attributable to any period prior to
March 29, 1996, under any Leases or maintenance or
service agreements. Buyer agrees to apply any Lease
payments as follows:
(A) In the event that the payment received is accompanied
by an invoice, or Obligor's remittance advice specifies
the invoice number or payment period to which the
payment is to be applied, the payment shall be applied
as stated in such remittance advice or invoice; or
(B) In the event that the payment received is not
accompanied by an invoice, or Obligor's remittance
advice does not specify the invoice number or payment
to which the payment is to be applied, Buyer or the
Acquired Company shall contact the customer by
telephone to obtain customer instructions on the
application of the payment.
ARTICLE 6 - THIRD PERSON CLAIMS
6.1 Patent Claims. Seller will indemnify and agree to defend
the Acquired Company and Buyer for patent and
proprietary right infringements arising out of Equipment
held by the Acquired Company at the time of Closing in
accordance with such terms of Seller's proprietary rights
indemnity as are set forth in the standard Seller Purchase
Agreement, attached hereto as Exhibit F.
6.2 Other Claims. Seller agrees that it will, at its own
expense, indemnify and hold harmless the Acquired
Company and Leasetec from other claims arising from the
Equipment or Software held by the Acquired Company at
the time of Closing in accordance with the provisions of
Section 8.2(b) of the Operating Agreement.
6.3 Employment Related Claims. Buyer agrees that it will
indemnify and hold harmless Seller from and against any
and all losses, liabilities, claims, damages and expenses
incurred by Seller in connection with or arising from any
action taken by or failure to act on the part of Buyer or the
Acquired Company following the Closing Date, in respect
of any Acquired Company Employee.
ARTICLE 7 - GENERAL PROVISIONS
7.1 Expenses. Each party to this Agreement will bear its
respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement
and the transactions contemplated herein, including all fees
and expenses of agents, representatives, counsel, and
accountants.
7.2 Public Announcements. Any public announcement or
similar publicity with respect to this Agreement or the
transactions contemplated herein, will be issued, if at all,
at such time and in such manner as the parties determine.
7.3 Confidentiality. Each party agrees that it will treat in
confidence all documents, materials and other information
which it shall have obtained regarding the other party
during the course of the negotiations leading to the
consummation of the transactions contemplated hereby and
which such other party considers and treats as confidential
(whether obtained before or after the date of this
Agreement), the investigation provided for herein and the
preparation of this Agreement and other related
documents. Such documents, materials and information
shall not be communicated to any third Person (other than,
in the case of Buyer, to its counsel, accountants, financial
advisors or lenders, and in the case of Seller, to its counsel,
accountants or advisors). The obligation of each party to
treat such documents, materials and other information in
confidence shall not apply to any information which (a) is
or becomes available to such party from a source other than
such party, (b) is or becomes available to the public other
than as a result of disclosure by such party or its agents,
(c) is required to be disclosed under applicable law or
judicial process, but only to the extent it must be disclosed,
or (d) such party reasonably deems necessary to disclose to
obtain any of the consents or approvals contemplated
hereby.
7.4 Limitation of Liability/Claim Amounts.
(A) IN NO EVENT SHALL SELLER OR BUYER BE
LIABLE TO THE OTHER PARTY FOR LOSS OF
PROFITS, INDIRECT, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF
ANY BREACH OF THIS AGREEMENT OR
OBLIGATIONS UNDER THIS AGREEMENT UNDER
ANY LEGAL THEORY, WHETHER OR NOT THE
PARTY CHARGED WAS MADE AWARE OF THE
POSSIBILITY OF THEIR OCCURRENCE. NO
ACTION ARISING OUT OF ANY CLAIMED BREACH
OF THIS AGREEMENT OR TRANSACTIONS
UNDER THIS AGREEMENT MAY BE BROUGHT BY
EITHER PARTY MORE THAN THREE (3) YEARS
AFTER THE CAUSE OF ACTION HAS ACCRUED.
(B) In no event shall Buyer assert any claim against
Seller's or the Acquired Company's officers, employees,
advisors or members of the Board of Directors for
actions taken prior to the Closing Date.
(C) Buyer may not make any claim for damages due to the
breach of any representation or warranty by Seller
hereunder except to the extent Buyer has been either
unable after reasonable efforts to collect monies due
under a Lease, or to secure rights to Equipment and
such inability is due to Seller's breach. Buyer will not
make any such claims until the aggregate amount of
such claims, together with any claims made pursuant
to the Portfolio Purchase Agreement, reaches
$100,000.00. Each time such claims aggregate to that
amount, Buyer may invoice Seller for the amounts of
such claims and thereafter pursue its legal rights with
respect to such claims.
7.5 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing
and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return
receipt requested, or (c) when received by the addressee, if
sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth below (or to
such other addresses and telecopier numbers as a party
may designate by notice to the other parties):
SELLER:
Storage Technology Corporation
2270 South 88th Street
Louisville, Colorado 80028-4309
Attention: General Counsel
Facsimile No.: 303/673-4151
WITH A COPY TO:
Storage Technology Corporation
2270 South 88th Street
Louisville, Colorado 80028-4311
Attention: Director, Corporate Development
Facsimile No.: 303/673-6196
BUYER:
Leasetec Corporation
1401 Pearl Street
Boulder, Colorado 80302
Attention: President
Facsimile No.: 303/473-0290
WITH A COPY TO:
Leasetec Corporation
1401 Pearl Street
Boulder Colorado 80302
Attention: General Counsel
Facsimile No.: 303/443-1298
7.6 Further Assurances. The parties agree (a) to furnish
upon request to each other such further information, (b) to
execute and deliver to each other such other documents,
and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying
out the intent of this Agreement and the documents
referred to in this Agreement.
7.7 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or
the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed
by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one
party will be deemed to be a waiver of any obligation of
such party or of the right of the party giving such notice or
demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in
this Agreement.
7.8 Entire Agreement and Modification. This Agreement,
together with the Schedules and Exhibits hereto,
supersedes all prior agreements between the parties with
respect to its subject matter and constitutes the entire and
exclusive statement of the terms of the agreement between
the parties with respect to its subject matter. This
Agreement may not be amended except by a written
agreement executed by the party to be charged with the
amendment.
7.9 Disclosure Letter.
(A) The disclosures in the Disclosure Letter, and those in
any supplement thereto, are incorporated herein by
reference. Such disclosures shall relate only to the
provisions of the Section of the Agreement which are
expressly referenced and not to any other provisions of
this Agreement.
(B) In the event of any inconsistency between any
provision in this Agreement and disclosures in the
Disclosure Letter, other than an exception expressly
set forth as such in the Disclosure Letter with respect
to a specifically identified provision, the provisions in
this Agreement will control.
7.10 Assignments and Transfers.
(A) Assignment. This Agreement shall be binding upon
and inure to the benefit of the successors and
permitted assigns of the parties hereto. No
assignment of this Agreement is valid unless
consented to in writing by the nonassigning party,
except as provided in Section 7.10(B).
(B) Transfers. Buyer may sell, assign or grant a security
interest (collectively, a "Transfer") of any or all of its
rights, title or interest in all, or any part of the,
Leases, the related Equipment, or its rights (but none
of its obligations) under this Agreement to one or more
Persons (each, a "Transferee"). Notwithstanding any
such Transfer, this Agreement shall remain in full
force and effect, and Buyer shall remain liable for the
performances of all of its obligations hereunder, and
agrees to indemnify and hold Seller harmless from and
against loss, cost, damage or expense (including
reasonable attorney fees) suffered by Seller and
arising from (i) Buyer's failure to perform its
obligations hereunder after such Transfer; or (ii)
claims by such Transferee that exceed Seller's
obligations hereunder to Buyer; or (iii) any such
Transfer, other than the liabilities and obligations
specifically undertaken by Seller in this Agreement.
Upon any Transfer, Seller shall be required to honor
notices from and report only to Buyer with respect to
Seller's rights, duties and obligations under this
Agreement, the Transition Agreement or the
Operating Agreement, unless otherwise directed in
writing by Buyer and its Transferee jointly. To the
extent of a Transfer, the Transferee shall have all of
the rights, privileges and benefits of Buyer hereunder;
but a Transferee shall have none of the duties or
obligations of Buyer and shall not have any liability
for Buyer's failure to perform such duties or
obligations.
7.11 Submission to Jurisdiction. SELLER AND BUYER
(AND BUYER IN ITS CAPACITY AS GUARANTOR)
EACH HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF ANY COLORADO STATE OR
FEDERAL COURT SITTING IN DENVER,
COLORADO OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE GUARANTY, AND
HEREBY (a) IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH COLORADO STATE OR
FEDERAL COURT; AND (b) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING.
7.12 Severability. If any provision of this Agreement is
held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or
unenforceable.
7.13 Section Headings, Construction. The headings of
Sections in this Agreement are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be
construed to be of such gender or number as the
circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the
preceding words or terms.
7.14 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time
is of the essence.
7.15 Governing Law. This Agreement will be governed by
the laws of the State of Colorado without regard to
conflicts of laws principles.
7.16 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
LEASETEC CORPORATION STORAGE TECHNOLOGY
CORPORATION
By: /s/ George Merriman, Jr. By: /s/ David E. Lacey
__________________________ _______________________________
George Merriman, Jr. David E. Lacey
President Corporate Vice President and
Interim Chief Financial Officer
<PAGE>
EXHIBIT A
GLOSSARY
"Acquired Company" -- means StorageTek Financial Services
Corporation, a Delaware corporation.
"Acquired Company Employees" -- as defined in Section 5.3.
"Allocation Schedule" -- as defined in Section 5.2(B).
"Assets" -- as defined in Section 3.4.
"Buyer" -- as defined in the first paragraph of this Agreement.
"Closing" -- as defined in Section 2.3.
"Closing Date" -- the date and time as of which the Closing actually
takes place.
"Contract" -- any written agreement, contract, obligation, promise, or
undertaking.
"Damages" -- as defined in Section 6.1.
"Disclosure Letter" -- the letter delivered by Seller to Buyer
concurrently with the execution and delivery of this Agreement, in the
form of Exhibit D attached to this Agreement.
"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right
of first refusal, or restriction of any kind, including any restriction on
use, voting, transfer, receipt of income, or exercise of any other attribute
of ownership.
"Environmental Law" -- any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the public of intzended or
actual releases of pollutants or hazardous substances or materials,
violations of discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction,
that could have significant impact on the Environment;
(b) preventing or reducing to acceptable levels the release of pollutants or
hazardous substances or materials into the Environment;
(c) reducing the quantities, preventing the release, or minimizing the
hazardous characteristics of wastes that are generated;
(d) assuring that products are designed, formulated, packaged, and used so that
they do not present unreasonable risks to human health or the Environment
when used or disposed of;
(e) protecting resources, species, or ecological amenities;
(f) reducing to acceptable levels the risks inherent in the transportation of
hazardous substances, pollutants, oil, or other potentially harmful
substances;
(g) cleaning up pollutants that have been released, preventing the threat of
release, or paying the costs of such clean up or prevention; or
(h) making responsible parties pay private parties, or groups of them, for
damages done to their health or the Environment, or permitting self-
appointed representatives of the public interest to recover for injuries
done to public assets.
"Equipment" -- means the equipment described in any Lease, but
excluding any Software.
"ERISA" -- as defined in Section 3.9.
"Governmental Authorization" -- any approval, consent, license,
permit, waiver, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or other jurisdiction
of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of
any nature.
"Guaranty of Leasetec" -- means the guaranty of Buyer in the form of
Exhibit E attached to this Agreement.
"Hazardous Materials" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be,
hazardous, radioactive, or toxic or a pollutant or a contaminant under or
pursuant to any Environmental Law, including any admixture or
solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-
containing materials.
"Intellectual Property Assets" -- as defined in Section 3.17.
"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Lease" -- means a Contract for lease or rental of Equipment, including
a master lease agreement and the schedules attached thereto, and
installment and conditional sales agreements.
"Leasetec Disk" -- as defined in Section 2.5(B).
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution,
law, ordinance, regulation or statute.
"Lender" -- a Person acting as a debt financing source for Equipment,
Leases, and/or their proceeds, regardless of whether such Person takes
title to the Equipment, Leases and/or their proceeds.
"Nondisclosure Agreement" -- as defined in Section 3.15.
"Obligor" -- means the obligor under a Lease.
"Operating Agreement" -- means the Operating Agreement dated as of
March 20, 1996 among Storage Technology Corporation and the Acquired
Company.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if
such action is consistent with the past practices of such Person, or is
taken in the normal day-to-day operations of such Person.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, or other entity or
Governmental Body.
"Portfolio Purchase Agreement" -- means the Portfolio Purchase
Agreement dated as of March 20, 1996, between StorageTek Financial
Services Corporation and Seller.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative,
or informal) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Proposed Allocation Schedule" -- as defined in Section 5.2(B).
"Purchase Price" -- as defined in Section 2.2.
"Section 338(h)(10) Election" -- as defined in Section 5.2(A).
"Seller" -- as defined in the first paragraph of this Agreement.
"Seller's Knowledge" -- means the actual knowledge of the board
elected corporate officers of Seller, Benjamin Brussell, Robert Kali, Steve
McGrath, Joseph Rinehart and Lizbeth Stenmark
"Shares" -- as defined in Section 2.1.
"Software" -- means any computer programs, program products, data
bases and documentation relating to, and utilized in the operation of
Equipment.
"Standard Purchase Agreement" -- means the Seller's standard form
of Purchase Agreement attached to this Agreement as Exhibit F.
"Tax" -- means any federal, state, local or foreign net income, alternative
or add-on minimum, gross income, gross receipts, property, sales, use,
transfer, gains, license, excise, employment, payroll, goods and services,
value-added, document, stamp, withholding or minimum tax, or any
other tax, custom, duty, governmental fee or other like assessment or
charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any
Governmental Body.
"Tax Return" -- any return (including any information return), report,
statement, schedule, notice, form, or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with
any Legal Requirement relating to any Tax.
"Third Party Lessor" -- a purchaser of Equipment (with or without
related leases), for the purpose of leasing such Equipment to a customer
of the Acquired Company or the Seller.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has
been made (orally or in writing) or any notice has been given (orally or
in writing), or if any other event has occurred or any other circumstances
exist, that would lead a prudent Person to conclude that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"Transfer" -- as defined in Section 7.10.
"Transferee" -- as defined in Section 7.10.
"Unused Vacation" -- as defined in Section 5.3.
PORTFOLIO PURCHASE AGREEMENT
between STORAGE TECHNOLOGY CORPORATION and
LEASETEC CORPORATION
Dated March 20, 1996
<PAGE>
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . .-1-
TERMS OF AGREEMENT . . . . . . . . . . . . . . . . . . . .-1-
1. PURCHASE AND SALE . . . . . . . . . . . . . . . . . .-1-
1.1. Purchased Assets . . . . . . . . . . . . . . . .-1-
1.2. Assumed Liabilities. . . . . . . . . . . . . . .-2-
1.3. Non-Assignable Leases. . . . . . . . . . . . . .-2-
2. PURCHASE PRICE AND NET PURCHASE PRICE . . . . . . . .-3-
2.1. Purchase Price . . . . . . . . . . . . . . . . .-3-
2.2. Net Purchase Price . . . . . . . . . . . . . . .-3-
2.3. Effective Date Calculations. . . . . . . . . . .-3-
2.4. Taxes. . . . . . . . . . . . . . . . . . . . . .-3-
3. CLOSING . . . . . . . . . . . . . . . . . . . . . . .-3-
3.1. Closing Date . . . . . . . . . . . . . . . . . .-3-
3.2. Payment on the Closing Date. . . . . . . . . . .-3-
3.3. Leasetec's Deliveries. . . . . . . . . . . . . .-4-
3.4. StorageTek's Deliveries. . . . . . . . . . . . .-4-
4. INCORPORATED TERMS/DEFINITIONS. . . . . . . . . . . .-5-
5. REPRESENTATIONS AND WARRANTIES BY STORAGETEK. . . . .-5-
6. REPRESENTATIONS AND WARRANTIES BY LEASETEC/CLAIMS
BY LEASETEC. . . . . . . . . . . . . . . . . .-7-
7. ADOPTION BY SUBSIDIARIES/AFFILIATES . . . . . . . . .-7-
8. ARBITRATION . . . . . . . . . . . . . . . . . . . . .-8-
8.1. Arbitration Generally. . . . . . . . . . . . . .-8-
8.2. Actual Damages . . . . . . . . . . . . . . . . .-8-
8.3. Equitable Relief . . . . . . . . . . . . . . . .-8-
8.4. No Disclosure. . . . . . . . . . . . . . . . . .-8-
8.5. Prior Notice . . . . . . . . . . . . . . . . . .-8-
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . -8-
9.1. Further Actions. . . . . . . . . . . . . . . . -8-
9.2. Modification . . . . . . . . . . . . . . . . . -8-
9.3. Limitation of Liability. . . . . . . . . . . . -9-
9.4. Notices. . . . . . . . . . . . . . . . . . . . -9-
9.5. Nature of Relationship . . . . . . . . . . . . -9-
9.6. Interest on Overdue Payments . . . . . . . . . -9-
9.7. Severability . . . . . . . . . . . . . . . . . -9-
9.8. Governing Law. . . . . . . . . . . . . . . . . -9-
9.9. Entire Agreement . . . . . . . . . . . . . . .-10-
9.10. Counterparts. . . . . . . . . . . . . . . . . -10-
9.11. Headings. . . . . . . . . . . . . . . . . . . -10-
9.12. Expenses. . . . . . . . . . . . . . . . . . . -10-
9.13. Effect. . . . . . . . . . . . . . . . . . . . -10-
EXHIBIT A - COUNTRY PORTFOLIO APPENDIX. . . . . . . . .A-1
EXHIBIT B - BILL OF SALE AND ASSIGNMENT . . . . . . . .B-1
<PAGE>
PORTFOLIO PURCHASE AGREEMENT THIS AGREEMENT is entered
into and effective as of March 20, 1996 by and between STORAGE
TECHNOLOGY CORPORATION ("StorageTek"), and LEASETEC CORPORATION
("Leasetec"). It is intended that this Agreement will be adopted by the
respective subsidiaries of StorageTek and Leasetec with respect to the
Designated Territories with such modifications as may be agreed by the
respective subsidiaries.
RECITALS
A. Leasetec Corporation, as parent, and Storage Technology Corporation, as
parent, have entered into a Stock Purchase Agreement, under which
Leasetec Corporation will purchase all of the issued and outstanding
shares of StorageTek Financial Services Corporation ("SFSC"), which is
the subsidiary of Storage Technology Corporation which currently does
all of the leasing activity with third parties for equipment
manufactured or sold by Storage Technology Corporation in the United
States. Completion of the transaction contemplated by the Stock
Purchase Agreement will transfer to Leasetec Corporation all of Storage
Technology Corporation's U.S. leasing activity.
B. Leasetec Corporation and Storage Technology Corporation also desire
that their subsidiaries agree to transfer to Leasetec Corporation all
of Storage Technology Corporation's subsidiaries' leasing activity for
the countries in the Designated Territories, including the current
leases and/or lease receivables for StorageTek's equipment and title to
such equipment. Because leasing activity in the Designated Territories
is conducted by Storage Technology Corporation's operating subsidiary
in each country, the assets associated with such activity must be
transferred in each country by the subsidiary in that country.
C. This Agreement constitutes the basic agreement under which the
lease assets will be transferred in each country, by Storage Technology
Corporation's subsidiary to Leasetec Corporation's subsidiary. No
assets or liabilities of Storage Technology Corporation are being
transferred hereunder. It is intended that this Agreement will be
adopted by the subsidiaries in each of the Designated Territories with
appropriate modifications as agreed by such subsidiaries.
TERMS OF AGREEMENT
1. PURCHASE AND SALE
1.1. Purchased Assets. Upon the terms and subject to the conditions of
this Agreement, on the Closing Date, StorageTek shall sell,
transfer, assign, convey and deliver to Leasetec, and Leasetec
shall purchase from StorageTek, all right, title and interest of
StorageTek in, to and under:
(A) subject to Section 1.3, all of StorageTek's Leases identified
in the individual Country Portfolio Appendices;
(B) all files relating to such Leases;
(C) the Equipment sold hereunder or leased pursuant to the Leases
and identified in the individual Country Portfolio
Appendices, together with a license to the internal code in
such Equipment;
(D) all Proceeds derived or produced from or generated with
respect to such Equipment and Leases (including without
limitation sale proceeds, Rental Payments, insurance
proceeds, Financed Software fees and Financed Service Fees,
but not including other maintenance or software fees) from
and after the Effective Date; and
(E) the Assumed Debt Documents related to the Assumed Debt as of
the Effective Date for which StorageTek has obtained from the
applicable lenders, and delivered to Leasetec, consents as
contemplated by Section 3.4(f).
The assets referred to in this Section are collectively referred to as
the "Purchased Assets." Notwithstanding the transfer of such Purchased
Assets to Leasetec, Leasetec agrees that it shall do nothing to prevent
StorageTek from performing its obligations with respect to such Purchased
Assets.
1.2. Assumed Liabilities. On the Closing Date, Leasetec shall deliver
to StorageTek the assumption agreements pursuant to which Leasetec
shall assume and agree to pay, perform or otherwise discharge, in
accordance with their respective terms and subject to the
respective conditions thereof, all the liabilities and obligations
of StorageTek to be paid or performed after the Effective Date
under the Assumed Debt Documents for Assumed Debt identified in
Schedule C to each Country Portfolio Appendix.
1.3. Non-Assignable Leases. Notwithstanding anything to the contrary
appearing elsewhere herein, StorageTek does not assign or transfer
(i) any Lease which is not assignable by the lessor; or (ii) any
Lease requiring consent of the Obligor for assignment by the
lessor, unless in either case a written consent of the Obligor is
now or hereafter delivered to Leasetec (all such Leases prior to
delivery of an Obligor consent being called the ("Non-Assigned
Leases"). In lieu of such assignment and transfer, StorageTek
assigns to Leasetec all Payments when collected under the Non-
Assigned Leases, and authorizes Leasetec to bill and collect all
such Payments, and undertakes to deliver to Leasetec any such
Payments which StorageTek receives.
With respect to Leases which are not assignable or are only
assignable with Obligor's consent, StorageTek indemnifies SFSC and
its Transferees under the terms of Section 8.2(b) of the Operating
Agreement for any claim, loss, cost, damage or expense suffered or
incurred as a result or arising out of the lack of ownership and
lack of a security interest in such Leases and the inability to
enforce the terms of such Leases against the Obligors.
2. PURCHASE PRICE AND NET PURCHASE PRICE.
2.1. Purchase Price. The purchase price shall be as identified in each
Country Portfolio Appendix ("Purchase Price") of the Country
Portfolio Appendices (the "Purchase Price").
2.2. Net Purchase Price. Net Purchase Price shall be the Purchase
Price less the principal amount of the Assumed Debt as of the
Effective Date.
2.3. Effective Date Calculations. The Purchase Price for the Purchased
Assets is calculated as of the Effective Date. There are no
adjustments to be made to the Purchase Price. Leasetec is
entitled to all Payments and other Proceeds from the Leases and
Equipment which are attributed to periods after the Effective
Date. StorageTek is entitled to all such Payments and other
Proceeds which are attributed to periods before the Effective
Date. All Assumed Debt becomes the responsibility of Leasetec as
of the day following the Effective Date; and all sales, use and
other taxes which are assessed on or concerning the Equipment and
Leases on or after the day following the Effective Date are the
responsibility of Leasetec, except as otherwise provided herein or
in the Operating Agreement.
2.4. Taxes. Leasetec acknowledges that it is liable for and that the
Purchase Price for Equipment, Financed Software and Financed
Services purchased hereunder will be exclusive of any applicable
sales, use, VAT, transfer, property, and/or other taxes howsoever
designated or levied upon the sale, delivery or use of the related
products. Leasetec shall be responsible for, and shall indemnify
and hold harmless StorageTek from and against, reporting and
payment of any and all such taxes, interest and penalties;
provided Leasetec is responsible and indemnifies for only those
property taxes which are assessed on Equipment after its title
passes to Leasetec. The parties agree to cooperate to minimize
the incidence of tax on the Equipment, Financed Software and
Financed Services, their purchase and financing hereunder, their
ownership, possession, use, or lease, and this Agreement.
Leasetec will reimburse StorageTek for any such taxes which
StorageTek is required to pay a taxing authority.
3. CLOSING.
3.1. Closing Date. The closing shall be occur under each Country
Portfolio Appendix as agreed with respect to time and date by the
parties, but no later than March 27, 1996. The time and date on
which the closing is actually held is sometimes referred to herein
as the "Closing Date."
3.2. Payment on the Closing Date. On the Closing Date, Leasetec shall
pay to StorageTek an amount equal to the Net Purchase Price, plus
interest on the Net Purchase Price, computed at a rate of 7% per
annum from the Effective Date through the Closing Date, by wire
transfer of immediately available funds to the account specified
in the applicable Country Portfolio Appendix.
3.3. Leasetec's Deliveries. On the Closing Date, Leasetec shall
deliver to StorageTek all the following:
(A) Certificate of the Secretary or an assistant secretary of
Leasetec, dated the Closing Date, in form and substance
reasonably satisfactory to StorageTek, as to (i) the resolutions
of the Board of Directors (or a duly authorized committee
thereof) of Leasetec authorizing the execution and performance
of this Agreement and the transactions contemplated hereby
(including a copy thereof); and (ii) incumbency and signature
certificates for the officers of Leasetec executing this
Agreement, the applicable Country Portfolio Appendix and any
ancillary agreements;
(B) An assumption agreement with respect to Assumed Debt duly
executed by Leasetec;
(C) The Transition Agreement and the Operating Agreement, each
duly executedby SFSC, and appropriate Appendices for the
relevant Designated Territories; and
(D) Such other instruments and documents as may be reasonably
required in the applicable Country Portfolio Appendix.
3.4. StorageTek's Deliveries. On the Closing Date, StorageTek shall
deliver to Leasetec all of the following:
(A) Certificate of the Secretary or an assistant secretary of
StorageTek, dated the Closing Date, in form and substance
reasonably satisfactory to Leasetec, as to (i) the
resolutions of the Board of Directors (or a duly authorized
committee thereof) of StorageTek authorizing the execution
and performance of this Agreement and the transactions
contemplated hereby (including copies thereof); and (ii)
incumbency and signature certificates for the officers of
StorageTek executing this Agreement, the applicable Country
Portfolio Appendix and any ancillary agreements;
(B) A Bill of Sale and Assignment (unless waived by Leasetec for
a particular Designated Territory) duly executed by
StorageTek in the form attached hereto as Exhibit B or as
otherwise agreed by StorageTek and Leasetec. If the Bill of
Sale and Assignment is waived, the provisions set forth in
Exhibit B shall be deemed included in the Invoice issued by
StorageTek to Leasetec for the Leases and Equipment;
(C) A Limited Power of Attorney duly executed by StorageTek in a
form mutually acceptable to StorageTek and Leasetec;
(D) The Transition Services Agreement and the Operating
Agreement, each duly executed by StorageTek, and appropriate
Appendices for the relevant Designated Territories, together
with consents to the assignment of any Assumed Debt and the
related Assumed Debt documents;
(E) The additional items required for the Closing Package as
applicable for the Purchased Assets;
(F) The Assumed Debt Documents; and
(G) Such other instruments and documents as may be reasonably
required in the applicable Country Portfolio Appendix.
4. INCORPORATED TERMS/DEFINITIONS.
4.1. Sections 3.3, 3.6, 3.7, 3.8, 3.9, 3.11, 3.12, 7.1, 7.2, 7.3, 7.4,
8.2, 8.3, 9.1, 9.2, and 9.3 of the Operating Agreement between
StorageTek and SFSC apply to the sale and assignment of the
Purchased Assets hereunder, such terms and conditions of the
Operating Agreement being incorporated herein by this reference.
The terms and conditions of the abovereferenced sections of the
Operating Agreement shall apply to the Equipment purchased and
Leases assigned hereunder.
4.2. Unless otherwise provided herein, capitalized terms used herein
shall have the definitions set forth in the Operating Agreement.
The references to "SFSC" in the Operating Agreement, including the
Glossary attached thereto, shall be deemed to mean Leasetec for
the purposes of this Agreement.
4.3. For purposes of the transactions contemplated by this Agreement,
the provisions of the Operating Agreement Section 3.3 (Closing
Package) is amended by the addition of clauses (j) and (k) to read
as follows:
(j) Notice Letter in the form of Exhibit C attached hereto for
each Lease assigned, such letter to be signed by StorageTek
but undated. (This letter may be delivered by SFSC to the
Obligor at such time as SFSC undertakes billing and
collection with respect to the related Lease pursuant to the
Operating Agreement.)
(k) Releases of all liens, encumbrances and other security
interests on the Equipment and Leases, unless the same are
related to Assumed Debt.
5. REPRESENTATIONS AND WARRANTIES BY STORAGETEK. As an inducement to
Leasetec to enter into this Agreement and to consummate the transactions
contemplated hereby, and without limiting the applicability of the Operating
Agreement as aforesaid, StorageTek represents and warrants to Leasetec as
follows:
5.1. StorageTek has no actual knowledge of any material breach by an
Obligor of any of its material obligations under the Lease, except
as have been previously disclosed to Leasetec in writing.
5.2. StorageTek does not require the approval, consent or waiver of any
party (including its lenders) to enter into this Agreement and
sell Equipment hereunder, other than any such consents and
approvals that have been or will be obtained as of the Closing
Date.
5.3. StorageTek has the absolute right to assign all of the Leases to
Leasetec; each Lease is duly authorized and validly executed by
the Obligor and constitutes a legally valid, binding and
effective agreement enforceable against such Obligor in accordance
with its terms; each Lease constitutes the entire understanding
between StorageTek and the Obligor with respect to the lease of
the Equipment and has not been modified in any way, revoked, or
rescinded and remains in full force and effect.
5.4. All of the executed originals (whether manually signed or carbon
originals) of each Lease have been delivered to Leasetec (other
than those executed originals of the Lease in Obligor's
possession).
5.5. Upon the assignment of the Leases to Leasetec, Leasetec will
acquire good and marketable title to such Leases, free and clear
of all liens, security interests and encumbrances, except for the
interest of the Obligor under the applicable Lease and any
security interest identified in Exhibit A to the applicable
Country Portfolio Appendix; and there are no taxes with respect to
the Equipment which are due and unpaid, other than those arising
as a result of the sale of the Equipment hereunder, and such title
shall effectively pass and shall be effectively evidenced by the
Bill of Sale and Assignment and any other documents reasonably
required by Leasetec.
5.6. There are no filings, recordings or registrations (including,
without limitation, UCC and PPSA filings and registrations of
charges) now in effect which evidence, indicate or provide notice
of any claims, liens, encumbrances or other security interests on
or against the Equipment, the Leases, this Agreement or the
proceeds of any of them, except (i) those security interests for
which releases (satisfactory in form and substance to Leasetec)
have been delivered herewith and (ii) those security interests
identified in Exhibit A to the applicable Country Portfolio
Appendix. If any filings, recordings or registrations are found
to exist in violation of the foregoing warranty, StorageTek will
exercise best efforts to obtain their release as soon as possible
after they are discovered; but notwithstanding such efforts and
any resultant releases, any claim, loss, cost, damage or expense
incurred by SFSC as a result of such filings, recordings or
registrations are subject to the indemnity under Section 8.2 of
the Operating Agreement.
6. REPRESENTATIONS AND WARRANTIES BY LEASETEC/CLAIMS BY LEASETEC. As an
inducement to StorageTek to enter into this Agreement and to consummate the
transactions contemplated hereby, Leasetec represents and warrants to
StorageTek as follows:
6.1. It is a corporation duly organized, validly existing and duly
qualified to conduct its business as it is presently conducted in
such jurisdictions in the United States where the failure to so
qualify would have a material adverse impact on the business of
the corporation or the enforceability of this Agreement, and has
full corporate power to enter into this Agreement and to carry out
the transactions contemplated hereby.
6.2. The execution and delivery of this Agreement and the performance
by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action and this Agreement
constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, subject to any bankruptcy, insolvency
or similar laws.
6.3. Neither the execution or delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict
with or result in a breach of any other agreement or instrument to
which it is a party or by which it is bound or be in violation or
default of any applicable statute, rule, regulation or decree of
any court, administrative agency or governmental body to which it
may be subject; except for conflicts, breaches, violations or
defaults which would not (i) have a material, adverse affect on
the business of Leasetec; or (ii) restrict Leasetec's ability to
perform this Agreement.
6.4. Leasetec may not make any claim for damages due to the breach of
any warranty by StorageTek hereunder except to the extent Leasetec
has been either unable after reasonable efforts to collect monies
due under a lease, or secure rights to Equipment and such
inability is due to StorageTek's breach. Leasetec will not make
any such claims until the aggregate amount of such claims
(domestically and internationally) reaches $100,000.00. Each time
such claims aggregate to that amount, Leasetec ma;y invoice
StorageTek or its appropriate subsidiaries for the amounts of such
claims and thereafter pursue its legal rights with respect to such
claims.
7. ADOPTION BY SUBSIDIARIES/AFFILIATES. Each party agrees to arrange for
the adoption of the terms and conditions of this Agreement for their lease
financing programs, Equipment sales and operations in the Designated
Territories. The subsidiaries and affiliates of the parties in the
Designated Territories will adopt this Agreement by execution of a Country
Appendix in the form of Exhibit A hereto, with such additions and changes as
local law necessitates.
8. ARBITRATION.
8.1. Arbitration Generally. Subject to Sections 8.2 through 8.5, any
controversy or claim arising out of or relating to this Agreement
or the breach thereof will be settled by arbitration before three
arbitrators in accordance with the Rules or the American
Arbitration Association ("AAA") then in effect, and judgment upon
the award rendered by the arbitrators may be entered in any court
having jurisdiction. Any such arbitration will be conducted in
the city nearest Leasetec's main U.S. office having an AAA
regional office. The arbitrators will be selected from a panel of
persons having experience with and knowledge of electronic
computers and the computer leasing business, and at least one of
the arbitrators selected will be an attorney.
8.2. Actual Damages. The arbitrators will have no authority to award
punitive damages nor any other damages not measured by the
prevailing party's actual damages, and may not, in any event, make
any ruling, finding or award that does not conform to the terms
and conditions of this Agreement. Where a specific exclusive
remedy (such as repurchase of Equipment) is provided herein, that
remedy shall be awarded, regardless of any determination of actual
damages.
8.3. Equitable Relief. Either party, before or during any arbitration,
may apply to a court having jurisdiction for a temporary
restraining order or preliminary injunction where such relief is
necessary to protect its interests pending completion of the
arbitration proceedings. Arbitration will not be required for
actions for recovery of specific property such as replevin.
8.4. No Disclosure. Except as required by law, neither party nor the
arbitrators may disclose the existence or results of any
arbitration hereunder without the prior written consent of both
parties.
8.5. Prior Notice. Prior to initiation of arbitration or any other
form of legal or equitable proceedings, the aggrieved party will
give the other party written notice by certified mail, return
receipt requested, to the address set forth in Section 9.4,
describing the claim and amount as to which it intends to initiate
action.
9. MISCELLANEOUS.
9.1. Further Actions. Each party will take such actions and execute,
acknowledge and deliver all further instruments and assurances
reasonably requested by the other party in order to give effect to
or to more fully perfect the purchase of Equipment hereunder and
provisions hereof.
9.2. Modification. The terms of this Agreement may not be altered,
except by written agreement of Leasetec and StorageTek.
9.3. Limitation of Liability. IN NO EVENT SHALL STORAGETEK OR LEASETEC
BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFITS, INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY
BREACH OF THIS AGREEMENT OR OBLIGATIONS UNDER THIS AGREEMENT UNDER
ANY LEGAL THEORY, WHETHER OR NOT THE PARTY CHARGED WAS MADE AWARE
OF THE POSSIBILITY OF THEIR OCCURRENCE. NO ACTION ARISING OUT OF
ANY CLAIMED BREACH OF THIS AGREEMENT OR TRANSACTIONS UNDER THIS
AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN THREE (3) YEARS
AFTER THE CAUSE OF ACTION HAS OCCURRED.
9.4. Notices. Any notices or other communication with respect to the
matters set forth in this Agreement shall be in writing and shall
be delivered to the parties at the following addresses, or such
other address or addresses as may be specified in a notice served
in accordance herewith:
To Leasetec: Leasetec Corporation
1401 Pearl Street
Boulder, Colorado 80302
Attention: President
To StorageTek: Storage Technology Corporation
2270 S. 88th Avenue
Louisville, Colorado 80028
Attention: General Counsel
Except as required in Section 8.5, all notices may be hand-
delivered to the addressee, sent by U.S. mail (postage prepaid),
or sent by a nationally recognized overnight courier service.
9.5. Nature of Relationship. The parties acknowledge that each party
hereto shall perform its obligations hereunder as an independent
contractor, and that at no time will this Agreement be deemed to
create a partnership, joint venture or employment contract. There
shall be no restriction on StorageTek's or Leasetec's independent
business judgment, including, but not limited to, decisions
regarding selection of Obligors, pricing, market or credit
decisions.
9.6. Interest on Overdue Payments. Any non-payment of any amount due
hereunder shall result in the obligation on the part of the party
obligated to make such payment promptly to pay interest at a rate
equal to the lesser of the Prime Rate or the highest rate as may
be legally enforceable on the overdue obligations for the period
of time during which they are overdue.
9.7. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be, as to
such jurisdiction, ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
9.8. Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the applicable Country Portfolio
Appendix.
9.9. Entire Agreement. This Agreement and the Exhibits hereto reflect
the complete agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior written and oral
agreements with respect to the subject matter hereof.
9.10.Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto on separate
counterparts, but all of such counterparts shall constitute a
single instrument.
9.11.Headings. The headings of Articles and Sections contained in
this Agreement are provided for convenience only. They form no
part of this Agreement and shall not affect its construction or
interpretation. All references to Sections refer to the
corresponding Sections of this Agreement unless otherwise
specified.
9.12.Expenses. Each party hereto shall bear its own legal and
professional fees and expenses incurred in the negotiation,
preparation, review and approval of this Agreement and related
documentation.
9.13.Effect. This Agreement shall take effect as of the date first
above written and shall govern the sale of the Purchased Assets as
set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized officers as of the date first above written.
STORAGE TECHNOLOGY CORPORATION STORAGETEK FINANCIAL
SERVICES CORPORATION
By: /s/ DAVID E. LACEY By: /s/ DAVID E. LACEY
-------------------- -----------------------
David E. Lacey David E. Lacey
Corporate Vice President Corporate Vice President
Accepted and Agreed:
LEASETEC CORPORATION
By: /s/ GEORGE M. MERRIMAN, JR.
------------------------------
George M. Merriman, Jr.
President
PORTFOLIO PURCHASE AGREEMENT EXHIBIT A
COUNTRY PORTFOLIO APPENDIX
Effective as of ___________________ 1996, ______________________ ("Seller")
and _____________________ ("Buyer") hereby agree that Seller will sell and
Buyer will buy the Purchased Assets under the terms and conditions set forth
in the Portfolio Purchase Agreement executed by Storage Technology
Corporation and Leasetec Corporation, dated _______________________, 1996
(the "Portfolio Agreement"), subject to the following:
1. The Equipment and Leases being sold and assigned hereunder are
identified on Schedule A hereto.
2. The Closing Date shall be ______________________________.
3. The term "StorageTek" as used in the Portfolio Agreement shall mean
Seller; and the term "Leasetec" as used therein shall mean Buyer.
4. References in the Portfolio Agreement to the "United States" shall
mean ______________ (name the country or countries to which this Country
Portfolio Appendix applies), hereinafter referred to as the "Territory".
5. For purposes of this Country Portfolio Appendix, the Portfolio
Agreement is amended as follows:_____________________________________ (if
no amendments, so state).
6. The Purchase Price for such Purchased Assets is ___________________,
the Assumed Debt is _______________ and the Net Purchase Price is
_________________.
7. The Leases and Equipment which are the subject of this Country Portfolio
Appendix are subject to certain third party interests, as described on
Schedule C. Buyer acknowledges the interests thus described and agrees to
purchase the Leases and Equipment subject to such third party interests
or, if so indicated on Schedule C, assumes and agrees to pay the debt and
perform the obligations of Seller referenced in the agreements identified
therein.
8. The official language of this Country Portfolio Appendix is English except
to the extent otherwise required by law; no amendment, order, waiver,
notice, consent or other writing shall be effective unless provided in
that language.
9. All monetary amounts under this Country Portfolio Appendix shall be
stated and paid in the lawful currency of the Territory, which is
_____________.
10. This Country Portfolio Appendix shall be binding and effective on Seller
and Buyer as of the date first set forth above.
Executed the date first written above.
- --------------------------- ----------------------------
("Seller") ("Buyer")
By: By:
Title: Title:
<PAGE>
Schedule A to Country Portfolio Appendix
Description of Leases and Equipment
<PAGE>
Schedule B to Country Portfolio Appendix
Wire Transfer Instructions
<PAGE>
Schedule C to Country Portfolio Appendix
Limitations on Right to Sell Equipment; Liens on Leases and Equipment
<PAGE>
EXHIBIT B
BILL OF SALE AND ASSIGNMENT
This Bill of Sale is given pursuant to the Portfolio Purchase Agreement dated
, 19 (the "Portfolio Agreement") between STORAGE
TECHNOLOGY CORPORATION ("StorageTek") and LEASETEC CORPORATION ("Leasetec"),
and shall be governed by all of its terms and conditions, which are deemed
incorporated herein by this reference. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Portfolio
Agreement.
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, StorageTek hereby assigns, sells, transfers title and sets over
unto Leasetec all of StorageTek's right, title and interest in and to the
Leases (as described in Schedule A hereto) and all Equipment (as described in
Schedule B hereto) covered by the Leases and all Software and Service fees
included in or payable under the Leases (unless excluded in Schedule A) and the
proceeds (including insurance proceeds) of all of them, free and clear of any
claims, liens or encumbrances of any kind except the rights of the Obligors
under the Leases and the security interest of any party providing financing
arrangements referenced in Schedule C hereto. IN WITNESS WHEREOF, StorageTek
has caused this Bill of Sale and Assignment to be executed as
of , 19 .
STORAGE TECHNOLOGY CORPORATION
By: __________________________
Name:
Title:
