Exhibit 10.1

 

PURCHASE AND SALE AGREEMENT

 

AMONG

 

BOEING CAPITAL CORPORATION,

 

BCC EQUIPMENT LEASING CORPORATION,

 

MCDONNELL DOUGLAS OVERSEAS FINANCE CORPORATION,

 

BOEING CAPITAL LOAN CORPORATION

 

AND

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

Dated as of May 24, 2004

 

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TABLE OF CONTENTS

 

 

SECTION 1 PURCHASE AND SALE OF ASSETS

 

 

 

 

 

 

1.1

Purchase and Sale of Assets.

 

 

 

 

 

 

1.2

Assumption of Liabilities.

 

 

 

 

 

 

1.3

Purchase Price.

 

 

 

 

 

 

1.4

Allocation of Purchase Price.

 

 

 

 

 

 

1.5

Taxes.

 

 

 

 

 

 

1.6

Purchase Price Adjustment.

 

 

 

 

 

 

1.7

Post Closing Payments Received by Sellers

 

 

 

 

 

 

1.8

[Intentionally Omitted].

 

 

 

 

 

 

1.9

Additional Purchase Price Adjustment

 

 

 

 

 

 

1.10

Dispute Resolution — Applicable NAV, Losses/Gains, etc.

 

 

 

 

 

SECTION 2 CLOSING

 

 

 

 

 

 

2.1

Closing Date

 

 

 

 

 

 

2.2

Buyer’s Closing Date Deliveries.

 

 

 

 

 

 

2.3

Sellers’ Closing Date Deliveries.

 

 

 

 

 

SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS

 

 

 

 

 

 

3.1

General Representations and Warranties.

 

 

 

 

 

 

3.2

Representations and Warranties with Respect to Specified Portfolio Assets.

 

 

 

 

 

 

3.3

Representations and Warranties with respect to Equity Assets.

 

 

 

 

 

SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER

 

 

 

 

 

 

4.1

Organization of Buyer

 

 

 

 

 

 

4.2

Authority of Buyer

 

 

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4.3

No Violation of Law and Agreements

 

 

 

 

 

 

4.4

No Litigation or Regulatory Action.

 

 

 

 

 

 

4.5

No Brokers

 

 

 

 

 

 

4.6

Financial Ability

 

 

 

 

 

 

4.7

Accredited Investor

 

 

 

 

 

SECTION 5 ACTION PRIOR TO EACH CLOSING DATE

 

 

 

 

 

 

5.1

Access to Information

 

 

 

 

 

 

5.2

Consents of Third Parties; Governmental Approvals.

 

 

 

 

 

 

5.3

Operations Prior to each Closing Date

 

 

 

 

 

 

5.4

[Intentionally Omitted]

 

 

 

 

 

 

5.5

Confidentiality

 

 

 

 

 

SECTION 6 ADDITIONAL AGREEMENTS

 

 

 

 

 

 

6.1

Use of Names.

 

 

 

 

 

 

6.2

Employees; Employee Benefits.

 

 

 

 

 

 

6.3

Insurance

 

 

 

 

 

 

6.4

Federal Mogul Schedule

 

 

 

 

 

 

6.5

Unapplied Cash

 

 

 

 

 

 

6.6

Insurance Matters

 

 

 

 

 

 

6.7

[Intentionally Omitted]

 

 

 

 

 

 

6.8

[Intentionally Omitted].

 

 

 

 

 

 

6.9

Sellers’ Covenant

 

 

 

 

 

 

6.10

Buyer’s Covenant

 

 

 

 

 

SECTION 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

 

 

 

 

 

 

7.1

Conditions to the Initial Closing

 

 

 

 

 

 

7.2

Conditions to each Subsequent Closing

 

 

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7.3

Conditions to Transfer of each Asset

 

 

 

 

 

 

7.4

Conditions Relating to Material Adverse Effect.

 

 

 

 

 

SECTION 8 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS

 

 

 

 

 

 

8.1

Conditions to the Initial Closing

 

 

 

 

 

 

8.2

Conditions to each Subsequent Closing

 

 

 

 

 

 

8.3

Conditions to Transfer of Each Asset

 

 

 

 

 

SECTION 9 INDEMNIFICATION

 

 

 

 

 

SECTION 10 SPECIAL WARRANTY

 

 

 

 

 

SECTION 11 TERMINATION

 

 

 

 

 

 

11.1

Termination.

 

 

 

 

 

SECTION 12 GENERAL PROVISIONS

 

 

 

 

 

 

12.1

Survival of Covenants, Representations and Warranties

 

 

 

 

 

 

12.2

No Public Announcement

 

 

 

 

 

 

12.3

Notices

 

 

 

 

 

 

12.4

Successors and Assigns

 

 

 

 

 

 

12.5

Records after Closing.

 

 

 

 

 

 

12.6

Entire Agreement

 

 

 

 

 

 

12.7

Interpretation.

 

 

 

 

 

 

12.8

Amendments and Waivers

 

 

 

 

 

 

12.9

No Agency, Joint Venture or Partnership

 

 

 

 

 

 

12.10

Expenses

 

 

 

 

 

 

12.11

Partial Invalidity

 

 

 

 

 

 

12.12

Execution in Counterparts; Facsimile

 

 

 

 

 

 

12.13

Governing Law

 

 

 

 

 

 

12.14

Jurisdiction

 

 

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12.15

Attorneys’ Fees

 

 

 

 

 

 

12.16

Time of Essence

 

 

 

 

 

 

12.17

Disclaimer of Warranties

 

 

 

 

 

 

12.18

References to U.S. Dollars

 

 

 

 

 

 

12.19

Further Assurances.

 

 

 

 

 

 

12.20

No Rescission

 

 

 

 

 

 

12.21

Dispute Resolution — Generally

 

 

 

 

 

SECTION 13 DEFINITIONS

 

 

 

 

 

 

13.1

Definitions

 

 

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PURCHASE AND SALE AGREEMENT

 

PURCHASE AND SALE AGREEMENT, dated as of May 24, 2004, among Boeing Capital
Corporation, a Delaware corporation (“Boeing Capital”) and each of the other
sellers listed on Schedule 1.1 hereto (each a “Seller” and collectively,
“Sellers”) and General Electric Capital Corporation, a Delaware corporation
(“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, Sellers are engaged in the commercial lending and leasing business
(sometimes referred to as the CFS business) pursuant to which Sellers have
provided various leases and secured and unsecured credit facilities, including
loans, leases intended as security and other types of commercial finance
facilities to various borrowers, lessees and other obligors in the form of the
Portfolio Assets (the “Business”).  For the avoidance of doubt, the Business
does not include the commercial aircraft financing business or the space and
defense financing business of Boeing Capital or any of the other Sellers or
their Affiliates; and

 

WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase from
Sellers, the Assets (and excluding the Excluded Assets), and Buyer is willing to
assume the Assumed Liabilities (each as hereinafter defined), all on the terms
and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual representations, covenants and
agreements hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, it is hereby agreed among
Buyer and Sellers as follows (certain initially capitalized terms used herein
are defined in Section 13):

 

SECTION 1

PURCHASE AND SALE OF ASSETS

 

1.1           Purchase and Sale of Assets.

 

(a)           Upon the terms and subject to the conditions of this Agreement, on
the Closing Dates, Buyer shall purchase from Sellers, and Sellers shall
irrevocably sell, convey, transfer, assign and deliver to Buyer, all right,
title and interest of Sellers in and to all of the following (the “Assets”):

 

(i)            Subject to Section 5.2(d), the Specified Portfolio Assets;

 

(ii)           The tangible personal property located at the Facilities and set
forth on Schedule 1.1(a)(ii) (the “Equipment”);

 

(iii)          All Contracts related solely to the Business set forth on
Schedule 1.1(a)(iii) (the “Assigned Contracts”);

 

(iv)          All Tax refunds related to the Business that are not Excluded
Assets;

 

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(v)           All rights, claims, credits, causes of action or rights of set-off
of Sellers against third parties relating to the Specified Portfolio Assets
(subject to Section 5.2(d)), including claims pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers, contractors and
other third parties in connection with products or services purchased by or
furnished to Sellers affecting any of the Specified Portfolio Assets (subject to
Section 5.2(d)) (except, in any event, any such rights, claims, credits, or
causes of action or rights of set-off relating to Excluded Liabilities);

 

(vi)          The assets set forth on Schedule 1.1(a)(vi) (the “Other Assets”);

 

(vii)         All Retention Agreements for the Transferred Employees; and

 

(viii)        All goodwill associated with the Business.

 

(b)           Notwithstanding anything to the contrary herein, Sellers shall not
sell, contribute, convey, assign, or transfer to Buyer, and Buyer shall not
acquire or have any rights to acquire, any assets (the “Excluded Assets”) other
than those specifically set forth in Section 1.1(a).  Without limiting the
generality of the foregoing, the following shall constitute Excluded Assets:

 

(i)            All cash, cash equivalents and securities (other than Equity
Assets) owned by Sellers, including all utility, security and other deposits;

 

(ii)           All notes, drafts and accounts receivable or other obligations
for the payment of money (other than Specified Financing and Lease Assets
included as part of the Specified Portfolio Assets in Section 1.1(a)(i)),
including the Excluded Financing and Lease Assets;

 

(iii)          All bank and other depository accounts and safe deposit boxes of
Sellers;

 

(iv)          All refunds of (A) Income Taxes imposed on any Seller, (B) other
Taxes relating to any period or portion thereof ending on or prior to the
applicable Closing Date for which the lessee with respect to any Portfolio Asset
does not have the responsibility on the applicable Closing Date to indemnify the
applicable Seller, (C) Taxes that are not Assumed Liabilities and (D) sales,
use, real estate transfer, transfer and similar Taxes imposed in connection with
the transactions contemplated by this Agreement (and any such refunds received
by Buyer shall be promptly paid over by Buyer to Sellers);

 

(v)           All insurance policies of Sellers relating to the Business (other
than those which constitute Purchased Portfolio Assets), any refunds paid or
payable in connection with the cancellation or discontinuance of any such
insurance policies and any claims made with respect to such insurance policies;

 

(vi)          [intentionally omitted];

 

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(vii)         Except with respect to the Equity Assets, all internal corporate
books and records, personnel records (except with respect to the Transferred
Employees so long as Buyer obtains an appropriate waiver), corporate charter,
taxpayer and other identification numbers, records, seals, minute books, stock
transfer books used, and all other assets solely used, in connection with the
corporate functions of Sellers;

 

(viii)        All Portfolio Property related to the Excluded Financing and Lease
Assets (other than to the extent any such Portfolio Property is subject to a
Specified Financing and Lease Agreement (whether as On-Lease Equipment or
Collateral));

 

(ix)           All rights of Sellers under this Agreement, the Seller
Transaction Documents and the Purchase Price;

 

(x)            All assets of Sellers related to all Benefit Plans, except as set
forth in Section 6.2(g);

 

(xi)           Any domain names used in the Business;

 

(xii)          The Marks;

 

(xiii)         All Governmental Permits;

 

(xiv)        All Real Estate Leases; and

 

(xv)         The assets set forth on Schedule 1.1(b)(xv).

 

(c)           In addition to the Excluded Assets described in subsection (b)
above, for the avoidance of doubt, the Excluded Assets shall also include all
assets of the commercial aircraft and space and defense financing businesses of
Sellers and their Affiliates.

 

1.2           Assumption of Liabilities.

 

(a)           Upon the terms and subject to the conditions set forth herein, at
the relevant Closing or when a Business employee becomes a Transferred Employee,
Buyer shall assume from Sellers (and thereafter pay, perform, discharge or
otherwise satisfy in accordance with their respective terms), and Sellers shall
irrevocably convey, transfer and assign to Buyer, the Assumed Liabilities (as
defined below) that correspond to Assets conveyed as of that date or to
employees who become Transferred Employees as of that date.  Buyer shall not
assume at the Initial Closing any of the Assumed Liabilities that relate to any
of the Specified Portfolio Assets to be transferred at a Subsequent Closing, in
which case Buyer shall assume such Assumed Liabilities from Sellers and
thereafter pay, perform, discharge or otherwise satisfy in accordance with their
respective terms, and Sellers shall irrevocably convey, transfer and assign to
Buyer, the Assumed Liabilities that relate solely to the Purchased Portfolio
Assets transferred at such Subsequent Closing, in each case as of the date of
such Subsequent Closing.

 

(b)           For all purposes of and under this Agreement, the term “Assumed
Liabilities” shall mean, refer to and include only the following Liabilities of
Sellers and excluding the Excluded Liabilities:

 

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(i)            Liabilities arising under (A) the Purchased Portfolio Assets and
(B) the Specified Financing and Lease Assets and Equity Assets equitably
assigned to Buyer pursuant to Section 5.2(d) after the applicable Closing Date
on which a Purchased Portfolio Asset is transferred to Buyer or a Specified
Financing and Lease Asset and Equity Asset is equitably assigned to Buyer
(excluding Liabilities arising out of defaults or breaches occurring prior to
the Closing Date on which any such Purchased Portfolio Asset is transferred to
Buyer or any such Specified Financing and Lease Asset and Equity Asset is
equitably assigned to Buyer);

 

(ii)           Liabilities relating to the Transferred Employees to the extent
required by Section 6.2;

 

(iii)          Liabilities arising under the Retention Agreements for the
Transferred Employees to the extent arising after the applicable Closing Date on
which a Retention Agreement is transferred to Buyer (excluding Liabilities
arising out of defaults or breaches occurring prior to the Closing Date on which
any such Retention Agreement is transferred to Buyer);

 

(iv)          Liabilities arising under the Assigned Contracts to the extent
arising after the applicable Closing Date on which an Assigned Contract is
transferred to Buyer (excluding Liabilities arising out of Sellers’ defaults or
breaches occurring prior to the Closing Date on which any such Assigned Contract
is transferred to Buyer); and

 

(v)           Liabilities arising under any advance rents, deposits, maintenance
reserves or other payments or deposits of any Obligor under (A) the Purchased
Portfolio Assets and (B) the Specified Financing and Lease Assets and Equity
Assets equitably assigned to Buyer pursuant to Section 5.2(d), as set forth on
Schedule 1.2(b)(v) in the amounts set forth in the Final Closing Book Value of
the Assets Statement.

 

(c)           Other than the Assumed Liabilities, Buyer shall not assume, and
the term “Assumed Liabilities” shall not mean, refer to or include any other
Liabilities of any Seller, including but not limited to the following:

 

(i)            Liabilities for Income Taxes of Sellers or any sales, use, real
estate transfer, transfer or similar Tax imposed in connection with the
transactions contemplated by this Agreement;

 

(ii)           Liabilities of Sellers in respect of transaction costs payable by
it pursuant to Section 12.10 hereof;

 

(iii)          Liabilities of Sellers related to all Benefit Plans, except as
set forth in Section 6.2;

 

(iv)          Liabilities of Sellers arising or occurring (or related to or
arising out of events occurring) prior to an applicable Closing whether with
respect to the Financing and Lease Assets or Business Agreements transferred at
such Closing;

 

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(v)           Liabilities of Sellers to an Affiliate of any Seller (other than
in such Affiliate’s capacity as an Obligor); and

 

(vi)          Liabilities relating to the Excluded Assets, including any advance
rents or other payments or deposits of any Obligor thereunder and any
liabilities arising under or in respect of any such Excluded Assets.

 

1.3           Purchase Price.

 

(a)           Buyer shall pay Sellers, and Sellers shall accept, together with
the assumption of the Assumed Liabilities provided in and pursuant to Section
1.2:

 

(x)            at the Initial Closing, an amount equal to the result of:

 

(a)           the aggregate of:

 

(i)            the Purchase Premium and

 

(ii)           the Estimated Adjusted Book Value of the Assets, minus

 

(b)           the aggregate of the 4/30/04 NAV of the Deferred Assets.

 

(y)           on each Subsequent Closing Date, including the Final Closing Date,
the result of (without duplication for any amounts previously paid to Sellers by
Buyer at the Initial Closing or any prior Subsequent Closing):

 

(a)           the aggregate of the Deferred Asset Transfer Price for each
Deferred Asset transferred to Buyer at such Subsequent Closing, plus

 

(b)           an amount equal to the interest, at the Applicable Interest Rate,
for the period extending from the Initial Closing Date until such Subsequent
Closing Date, on the 4/30/04 NAV amount attributable to each such Deferred Asset
being transferred and sold at such Subsequent Closing.

 

(b)           For purposes of the foregoing, a Specified Financing and Lease
Asset or Equity Asset shall be deemed to be “transferred” on a Closing Date if
such Specified Financing and Lease Asset or Equity Asset is equitably assigned
to Buyer on such Closing Date pursuant to Section 5.2(d).  The Deferred Asset
Premium Deposits paid to Sellers at the Initial Closing as part of the Purchase
Premium shall be held by Sellers as deposits until such time as the applicable
Deferred Asset is transferred to Buyer as provided below.  The Purchase Price is
inclusive of, and out of the Purchase Price Sellers shall pay or hold Buyer
harmless from and against, all sales, use, real estate transfer, documentary
transfer and similar Taxes imposed solely by reason of the sale and purchase of
Assets hereunder (and any refund thereof shall be for the benefit of Sellers and
promptly paid over to Sellers by Buyer if received by Buyer).  The 4/30/04 NAV
of each of the Specified Financing and Lease Assets and Equity Assets (other
than those interests subject to the Option Agreement) designated on an
IER-by-IER basis is set forth on Schedule 1.3 and the 4/30/04 NAV of the Assets
Held for Sale or Lease is set forth on Schedule 1.1(a)(i).  All amounts payable
hereunder shall be paid by means of a wire transfer of

 

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immediately available U.S. funds to one or more accounts designated by the
recipient thereof in writing, to the payor.  The Deferred Asset Premium Deposit
with respect to a transferred Deferred Asset shall be deemed released and paid
to Sellers upon the date of transfer of the corresponding Deferred Assets.  Upon
sale and transfer of any Deferred Asset at a Subsequent Closing, Sellers shall
pay to Buyer at such Subsequent Closing all amounts received by Sellers since
the Initial Closing Date with respect to the Deferred Assets being transferred
at such Subsequent Closing, plus interest at the Applicable Interest Rate on
such amounts from the date of receipt by Sellers through such Subsequent
Closing.

 

1.4           Allocation of Purchase Price.

 

(a)           The Purchase Price, the Seller Section 467 Loan Balances and the
amount of any Assumed Liabilities that are liabilities for Income Tax purposes,
shall be allocated among the Purchased Portfolio Assets, any Lessee Section 467
Loan Balances and the assets purchased pursuant to Section 1.1(a)(ii)-(viii) as
set forth on Schedule 1.4 (the “Allocation Schedule”) taking into account the
requirements of Section 1.4(b) and consistent with the treatment by Sellers on
their books and records of Purchased Portfolio Assets as true leases or as
interests in partnerships for federal income tax purposes.  In addition,
Schedule 1.4 shall provide in a manner which is consistent with the allocation
set forth in the first sentence above (a) the portion of the Base Purchase Price
allocable to each of the Specified Portfolio Assets plus (b) the portion, if
any, of the Purchase Premium allocable to each such Specified Portfolio Asset. 
The allocation on the Allocation Schedule shall be adjusted to reflect any
adjustments to the Purchase Price.  Except as required by applicable Law, Buyer
and Sellers shall prepare and file all federal, state, local and foreign Tax
Returns in accordance with the Allocation Schedule (with appropriate changes, if
necessary, in the case of Tax Returns other than United States federal income
Tax Returns) and the treatment by Sellers on their books and records of
Purchased Portfolio Assets as true leases or as interests in partnerships for
federal income tax purposes.  Buyer and Sellers shall each timely file a Form
8594 (and any required amendments thereto) with the IRS in accordance with the
requirements of Section 1060 of the Code.

 

(b)           Sellers and Buyer agree that, with respect to the Purchased
Portfolio Assets, each will treat any Section 467 Loan Balance in the following
manner for federal income tax and relevant state income tax purposes:

 

(i)            Sellers will be treated as having sold the Purchased Portfolio
Assets and any Lessee Section 467 Loan Balances to Buyer for the Purchase Price
and Buyer’s assumption of the Assumed Liabilities and any Seller Section 467
Loan Balances;

 

(ii)           Buyer will be entitled to Tax basis in any Lessee Section 467
Loan Balances in an amount equal to the amount of such Lessee Section 467 Loan
Balances, and Buyer’s Tax basis in the related Purchased Portfolio Asset will be
reduced by such amount; and

 

(iii)          Buyer will be entitled to additional Tax basis in the related
Purchased Portfolio Asset to reflect its assumption of any Seller Section 467
Loan Balances.

 

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(c)           Each of the parties covenants that it shall act, and shall cause
any Affiliate to act, in a manner consistent with the express requirements of
the foregoing provisions of this Section 1.4.

 

1.5           Taxes.

 

(a)           Ad Valorem Taxes.  All state, county and local ad valorem taxes on
personal property, including the Portfolio Assets, shall be apportioned between
Buyer and Sellers as of 11:59 p.m. on each Closing Date, computed on the basis
of the fiscal year for which the same are levied, without taking into account
any increases as a result of the transactions contemplated hereunder or
post-Closing increases and payment of such Taxes shall be made as follows:

 

(i)            Sellers shall pay all state, county and local ad valorem taxes on
personal property, including the Portfolio Assets, that are assessed to
Sellers.  To the extent such Taxes are apportioned to Buyer under this Section
1.5(a) and are not permitted or required to be billed to the applicable lessee
Obligor for reimbursement pursuant to the applicable Lease Contract, Buyer shall
reimburse the applicable Seller therefor within 10 days after request by such
Seller.  Sellers shall be permitted to bill the applicable lessee Obligor for
reimbursement of any such Taxes assessed to Sellers if reimbursement is
permitted or required pursuant to the applicable Lease Contract, whether or not
the period of assessment ends before the applicable Closing Date.  Buyer shall
cooperate with Sellers in effectuating such billings to any such lessee
Obligor.  If such a lessee Obligor fails to pay any such Taxes apportioned to
Buyer under this Section 1.5(a) within 90 days after such billing, Buyer shall
reimburse the applicable Seller such Taxes so apportioned to Buyer within 10
days after request by such Seller.

 

(ii)           Buyer shall pay all state, county and local ad valorem taxes on
personal property, including the Portfolio Assets, that are assessed to Buyer
(and in this connection Buyer shall take commercially reasonable steps to notify
the relevant state, county and local ad valorem tax authorities of the sale of
Assets pursuant to this Agreement and arrange for assessments to be made to
Buyer as soon as commercially reasonably possible after the applicable Closing
Date).  To the extent such Taxes are apportioned to Seller under this Section
1.5(a) and are not permitted or required to be billed to the applicable lessee
Obligor for reimbursement pursuant to the applicable Lease Contract, Sellers
shall reimburse Buyer therefor within 10 days after request by Buyer.

 

(b)           Sales Taxes on Accrued But Unpaid Rent.  All state, county and
local sales and use Taxes (other than sales and use taxes imposed solely by
reason of the sale and purchase of Assets hereunder) shall be apportioned
between Buyer and Sellers as of 11:59 p.m. on the applicable Closing Date, based
on whether the sale or use giving rise to such sales or use Tax occurred before
or after such time; provided, however, any such sales and use Taxes imposed on
an amount included as an asset in the calculation of Closing Book Value of the
Assets shall be paid by Buyer.

 

(c)           Cooperation on Certain Tax Matters.  Buyer and Sellers shall
cooperate in minimizing Taxes and in preparing, executing and filing use, sales,
real estate, transfer and

 

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similar Tax Returns relating to the purchase and sale of the Assets.  Such Tax
Returns shall be prepared in a manner that is consistent with the Allocation
Schedule.  Buyer agrees to furnish Sellers with such documents and certificates
as Sellers may reasonably request in connection with any claims for exemption
from the payment of any use, sales, real estate, transfer and similar Taxes.

 

(d)           To the extent Buyer or any Seller receive a refund of Taxes (A)
related to periods on or prior to the applicable Closing Date and (B) related to
Taxes for which a lessee Obligor has indemnified Buyer or any Seller, then the
recipient of such refund shall return to the lessee Obligor the amount of such
refund which is properly attributable to the Taxes indemnified by the lessee
Obligor.

 

1.6           Purchase Price Adjustment.

 

(a)           Within sixty (60) calendar days after the Final Closing Date,
Buyer shall prepare and deliver to Sellers a statement setting forth, as of
11:59 p.m. PDT on the Initial Closing Date, (i) the Applicable NAV Statement
with respect to each of the Specified Financing and Lease Assets, Equity Assets
and Assets Held for Sale or Lease, (ii) the calculation of the Adjusted Book
Value of the Assets with respect to the Specified Financing and Lease Assets,
Equity Assets, Assets Held for Sale or Lease and the Book Value of the Assumed
Liabilities, in each case with respect to clauses (i) and (ii), only with
respect to those assets that were transferred (including equitable assignment
pursuant to Section 5.2(d)) to Buyer on or before the Final Closing Date and
(iii) the amount of any cash that has not been reconciled or applied as of the
date that the Draft Closing Book Value of the Assets Statement is delivered
pursuant hereto (the “Unapplied Cash”) (such statement, the “Draft Closing Book
Value of the Assets Statement”).  The Draft Closing Book Value of the Assets
Statement shall also include a statement of the Applicable NAV as of 11:59 p.m. 
PDT on the Initial Closing Date of the Opt-out Assets and those Equity Assets
and other interests subject to the Option Agreement.  Sellers shall cooperate
with Buyer in connection with, and shall furnish to Buyer all such information
as Buyer may reasonably require, in the preparation of the Draft Closing Book
Value of the Assets Statement.  The Draft Closing Book Value of the Assets
Statement will be prepared using the Accounting Principles, and will not include
any changes in assets or liabilities as a result of purchase accounting or other
adjustments arising from or resulting as a consequence of the transactions
contemplated hereby.

 

(b)           Each party shall provide the other party and its representatives
with reasonable access to books and records and relevant personnel during the
preparation of the Draft Closing Book Value of the Assets Statement and the
resolution of any disputes that may arise under this Section 1.6.

 

(c)           Buyer and Seller shall jointly retain and engage McGladrey &
Pullen LLP (“McGladrey”) to perform an audit and examination of the Draft
Closing Book Value of the Assets Statement including the Applicable NAV of the
Opt-out Assets and the Equity Assets and other interests subject to the Option
Agreement.  McGladrey will perform the audit procedures set forth on Exhibit C
in order to confirm that the Draft Closing Book Value of the Assets Statement
was prepared in accordance with the Accounting Principles and the completeness
and accuracy of the Draft Closing Book Value of the Assets Statement.  McGladrey
will deliver to

 

8

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Sellers and Buyer a detailed report (i) confirming that the Draft Closing Book
Value of the Assets Statement was prepared in accordance with the standards set
forth in the immediately preceding sentence; or (ii) setting forth any items on
the Draft Closing Book Value of the Assets Statement that do not conform to the
standard set forth in the immediately preceding sentence (the “McGladrey
Findings”).  The fees, expenses and costs of McGladrey shall be borne equally by
Buyer and Sellers. Based solely on the result of such audit and examination, if
either Buyer disagrees or Sellers disagree with the McGladrey Findings, such
party shall notify the other in writing of such disagreement within forty-five
(45) calendar days after delivery of the McGladrey Findings, which notice shall
be, to the extent practicable, based upon the documents and information of which
the party giving such notice had possession and control or to which such party
was afforded reasonable access by the other party during such forty-five (45)
calendar day period, describe the nature of any such disagreement in reasonable
detail, identify the specific items involved and the dollar amount of each such
disagreement (on an item-by-item basis and including such party’s alternative
amount) and provide reasonable supporting documentation for each such
disagreement.  During the forty-five (45) calendar day review period, Buyer and
Sellers shall have reasonable access to any documents, schedules or work papers
used in the preparation of the Draft Closing Book Value of the Assets Statement
or the McGladrey Findings.

 

(d)           Buyer and Sellers agree to negotiate in good faith to resolve any
disagreements regarding the Draft Closing Book Value of the Assets Statement or
the McGladrey Findings.  If Buyer and Sellers are unable to resolve all
disagreements within thirty (30) calendar days after delivery of written notice
of such disagreement, then such disagreements shall be submitted for final and
binding resolution to PricewaterhouseCoopers LLP, or if PricewaterhouseCoopers
LLP is not available, to another nationally recognized accounting firm
(PricewaterhouseCoopers LLP or any such other accounting firm, “PwC”), to
resolve such disagreements.  PwC will only consider those items and amounts set
forth in the Draft Closing Book Value of the Assets Statement or the McGladrey
Findings as to which Buyer and Sellers have disagreed and must resolve the
matter in accordance with the terms and provisions of this Agreement.  PwC shall
prepare and deliver to Buyer and Sellers, as promptly as practicable and in any
event within ninety (90) calendar days after its appointment, a written report
setting forth the resolution of any such disagreement and a statement setting
forth a revised Draft Closing Book Value of the Assets Statement and, if
applicable, revisions to the McGladrey Findings, which shall reflect their
resolution of any such disagreements.  PwC shall make its determination based on
presentations and supporting material provided by the parties.  The
determination of PwC shall be final and binding upon Buyer and Sellers.  The
fees, expenses and costs of PwC shall be borne equally by Buyer and Sellers. 
Other than such fees and expenses of PwC and McGladrey as provided herein, Buyer
and Sellers shall each be responsible for their own costs and expenses incurred
in connection with any actions taken pursuant to Section 1.6(c) or (d).

 

(e)           Promptly after PwC’s final determination of the resolution of any
disagreement pursuant to Section 1.6(d), Buyer and Sellers shall cause McGladrey
to revise the Draft Closing Book Value of the Assets Statement to reflect such
final determination.  Any such revised Draft Closing Book Value of the Assets
Statement or any Draft Closing Book Value of the Assets Statement which is not
submitted to PwC pursuant to Section 1.6(d) is hereinafter referred to as the
“Final Closing Book Value of the Assets Statement.”  The Adjusted Book Value of
the Assets reflected on such statement is referred to as the “Closing Book Value
of the

 

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Assets.”  The Final Closing Book Value of the Assets Statement shall set forth
the Applicable NAV for each Specified Financing and Lease Asset and each Equity
Asset and Asset Held for Sale or Lease, in each case, that is assigned to Buyer
as of the Initial Closing Date.

 

(f)            If Sellers pay any Assumed Liability on the Draft Closing Book
Value of the Assets Statement before the Final Closing Book Value of the Assets
Statement is prepared, Buyer and Sellers agree that such Assumed Liability shall
not be reflected on the Final Closing Book Value of the Assets Statement.

 

(g)           If the Purchase Price is less than the sum of (i) the Base
Purchase Price plus (ii) the Purchase Premium, Sellers shall pay to Buyer the
amount of such difference, and if the Purchase Price is greater than the sum of
(i) the Base Purchase Price plus (ii) the Purchase Premium, Buyer shall pay to
Sellers the amount of such difference.  Any payments to be made pursuant to
Section 1.6 shall be made by wire transfer of immediately available funds to an
account designated by the party receiving payment within five (5) Business Days
after the delivery of the Final Closing Book Value of the Assets Statement plus
interest, on an Asset by Asset basis, at the Applicable Interest Rate on the
amount of such reduction or increase from the respective dates of payment of the
Base Purchase Price, on an Asset by Asset basis, to the date of payment of the
amount of such reduction or increase.  Regardless of the changes that may occur
pursuant to the foregoing, in no event shall there be any adjustment to the
Purchase Premium other than as provided in Section 1.6(h) or Section 5.2.

 

(h)           The Purchase Premium shall be subject to the following adjustments
(without duplication):

 

(i)            If the aggregate of (A) the Applicable NAV of the Specified
Financing and Lease Assets, Equity Assets and Assets Held for Sale or Lease
transferred (including equitable assignments pursuant to Section 5.2(d)) to
Buyer on or before the Final Closing Date, plus (B) the Applicable NAV of the
Specified Financing and Lease Assets and Equity Assets not transferred or
otherwise equitably assigned to Buyer on or before the Final Closing Date
pursuant to Section 5.2(d)(v) (collectively, the “Opt-out Assets”), plus (C) the
Applicable NAV of those Equity Assets and other interests subject to the Option
Agreement (the assets described in the foregoing clauses (A), (B) and (C) being
collectively referred to herein as the “Total Subject Assets”), in each case
computed as of the Initial Closing Date and as set forth in the Final Closing
Book Value of the Assets Statement (in the case of clause (A)) or as otherwise
determined pursuant to Sections 1.6(c) and (d) (in the case of clauses (B) and
(C)), is less than $1,878,341,145 (the amount of such shortfall being referred
to herein as the “NAV Shortfall”), Sellers shall pay to Buyer within ten (10)
Business Days after the delivery of the Final Closing Book Value of the Assets
Statement, by wire transfer of immediately available funds to an account
designated by Buyer, an amount equal to the product of (x) the Purchase Premium
and (y) the quotient of (1) the NAV Shortfall divided by (2) $1,878,341,145,
plus interest on such product at the Applicable Interest Rate from the Initial
Closing Date to the date of such payment; and

 

(ii)           In the event there are any Opt-out Assets, Sellers shall pay to
Buyer within ten (10) Business Days after the delivery of Final Closing Book
Value of

 

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Assets Statement, by wire transfer of immediately available funds to an account
designated by Buyer the Premium Reduction Payment plus interest at the
Applicable Interest Rate on the Premium Reduction Payment from the Initial
Closing Date to the date of payment.

 

(i)            Taxes apportioned or the responsibility for which is allocated
pursuant to Section 1.5, as well as payment or liability for payment of such
Taxes, and entitlement of Sellers to any reimbursement thereof by a lessee
Obligor, shall not be taken into account as liabilities or assets in calculating
Adjusted Book Value of the Assets or Applicable NAV.

 

1.7           Post Closing Payments Received by Sellers.  All amounts received
by Sellers after any Closing Date with respect to any of the Purchased Portfolio
Assets transferred at such a Closing shall be, except as otherwise provided in
this Agreement, received as agent in trust for the account of Buyer and shall be
forwarded by the applicable Seller to Buyer within a reasonable time period not
to exceed ten (10) Business Days.  Upon each Closing, Sellers hereby irrevocably
appoint Buyer and its authorized representatives as their attorneys-in-fact to
endorse, without recourse, Sellers’ names upon any and all notes, checks, drafts
or other instruments for the payment of money received by Buyer which are
payable to Sellers in respect of the Purchased Portfolio Assets transferred at
such Closing.

 

1.8           [Intentionally Omitted].

 

1.9           Additional Purchase Price Adjustment.  Buyer and Seller
acknowledge their difference of opinion as to the value of the Assets purchased
hereunder and therefore have agreed to a further, and contingent, Purchase Price
adjustment in accordance with the provisions of this Section 1.9.  Buyer shall
pay to Sellers in respect of each calendar quarter following the Initial Closing
an amount necessary such that the aggregate amounts paid to Sellers pursuant to
this Section 1.9 equal the product of eighty percent (80%) multiplied by the
Cumulative Net Gain (if any) through the end of such calendar quarter (each such
payment, an “Earn Out Payment”; and such product, an “Earn Out Amount”).  Buyer
shall not be required to make an Earn Out payment until the first calendar
quarter following the calendar quarter during which Sellers stop providing any
services pursuant to the Transition Service Agreement.  The Earn Out Payment for
any calendar quarter shall be determined and paid in accordance with the
following procedures:

 

(a)           Gain/Loss Statement; Other Reporting.  Not later than thirty (30)
days following the last day of each calendar quarter commencing with the end of
the first calendar quarter following the calendar quarter during which Sellers
stop providing any transition services pursuant to the Transition Services
Agreement (each a “Determination Date”), Buyer shall prepare and deliver to
Sellers the following, each in form and substance reasonably satisfactory to
Sellers:

 

(i)            A written statement (including appropriate computations and
supporting materials) (each, a “Gain/Loss Statement”) as of such Determination
Date the form of Exhibit F (x) setting forth in reasonable detail, on an IER by
IER basis (or, in the case of SPRA’s, on an SPRA by SPRA basis), and with
respect to the CFS Portfolio for such calendar quarter, any and all (A) Realized
Losses incurred by Buyer, (B) Deemed

 

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Losses that shall have occurred, (C) Realized Gains received by Buyer, and (D)
Deemed Gains that shall have occurred and (y) setting forth (1) the Cumulative
Net Gain or Cumulative Net Loss and (2) the Quarterly Net Gain or Quarterly Net
Loss.

 

(ii)           The Applicable NAV Statement as of such Determination Date.

 

(iii)          [Intentionally omitted.]

 

(iv)          As soon as practicable, and in any event within thirty (30) days
after the end of each February, May, August and November, written reports in
substantially the form of the existing reports prepared by Buyer as set forth on
Schedule 1.9(a)(iv) as such may be modified in the ordinary course of business
by Buyer, with Sellers consent, not to be unreasonably withheld.

 

(v)           As soon as practicable, and in any event within one hundred twenty
(120) days after the end of each calendar year (commencing with the year ending
December 31, 2004), a written report prepared by Sellers’ Accountants as part of
their audit of Buyer’s annual financial statements, setting forth in reasonable
detail the information (and corresponding calculations) described in the
Specialized Audit Steps.  The fees, expenses and costs of Sellers’ Accountants
in connection with such written report shall be borne equally by Buyer and
Sellers.

 

(b)           Sellers’ Gain/Loss Statement Review Period; Settlement.  Sellers
shall have a period of not less than thirty (30) days in which to review each
Gain/Loss Statement.  On or before the end of such period, Sellers shall (i)
deliver to Buyer a Notice of Disputed Amount (if any) and/or a Notice of
Disputed Gain or Loss (if any) in accordance with Section 1.10(a) below and (ii)
in the event that an Earn Out Payment is due from Buyer to Sellers, notify Buyer
in writing to pay Sellers the Earn Out Payment in the amount set forth in such
notice, such payment to be made within seven (7) Business Days after Buyer’s
receipt of such notice.

 

(c)           Access.  Without in any way limiting the provisions of Section
6.10(f)(ii), each party shall provide the other party and its representatives
with reasonable access to books and records and relevant personnel with respect
to any applicable Gain/Loss Statement and any dispute that may arise under this
Section 1.9

 

(d)           Sellers’ Redeployed Asset Review Period.  Buyer shall deliver to
Sellers a Proposed Redeployed Asset Disclosure Package, and upon Sellers’
receipt thereof, Sellers shall have ten (10) calendar days during which Sellers
shall be permitted to meet with (whether in person or telephonically) authorized
(and appropriate) representatives of Buyer (and Buyer agrees to make such
representatives available at a reasonable time (or times) during such ten (10)
calendar days period) to discuss the particulars of any Proposed Redeployed
Asset.  On or before the end of such ten (10) calendar days review period,
Sellers shall deliver to Buyer a written notice specifying whether Sellers
exercise their option to treat such Proposed Redeployed Asset as an SPRA,
provided that if Sellers fail to deliver such notice within such period, then
Sellers shall be deemed to have elected not to exercise such option.  In the
event that Buyer changes or agrees to change materially any terms in the
Proposed Redeployed Asset Disclosure Package, then Buyer shall provide Sellers
with a new Proposed Redeployed Asset Disclosure Package for

 

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the Proposed Redeployed Asset in question, regardless of whether Sellers
exercised their option to treat such Proposed Redeployed Asset as an SPRA or
not, and Sellers shall then have a new ten (10) calendar days period (and
reasonable access to Buyer representatives) in accordance with the terms of this
Section 1.9(d) in which to decide whether to treat such Proposed Redeployed
Asset as an SPRA.

 

(e)           Imputed Remarketing Cost.  In the calculation of Portfolio Gain or
Portfolio Loss arising from Buyer’s Disposition of any Portfolio Property
relating to any CFS Portfolio Financing and Lease Asset or Equity Asset, there
shall be assumed to have been incurred a remarketing cost (the “Imputed
Remarketing Cost”) equal to five percent (5%) (the “Imputed Remarketing Cost
Percentage”) of the Net Disposition Proceeds arising from Buyer’s Disposition of
any Portfolio Property relating to any CFS Portfolio Financing and Lease Asset
or Equity Asset as and when such Net Disposition Proceeds are received by Buyer
if (i) at the time of such Disposition, the Cumulative Net Loss exceeds
$150,000,000 but is less than $275,000,000, and (ii) such Disposition is to a
Person other than (A) the Obligor (or any Affiliate of the Obligor) under such
CFS Portfolio Financing and Lease Asset or (B) Buyer (or any Affiliate of
Buyer), and (iii) such CFS Portfolio Financing and Lease Asset or Equity Asset
constituted a Defaulted Asset as of the date of such Disposition If the entire
amount of Net Disposition Proceeds is not paid in a lump sum in cash (such as
when such Disposition is pursuant to a lease, or a sale where a portion of the
purchase price includes non-cash consideration), the Imputed Remarketing Cost
shall equal the Imputed Remarketing Cost Percentage multiplied by each ensuing
payment of Net Disposition Proceeds received by Buyer prior to any other
disposition of such ensuing payment of Net Disposition Proceeds.

 

(f)            Adjustments for Changes in Cumulative Net Gain.  If as of the end
of any one or more calendar quarters there shall have occurred both a Quarterly
Net Gain and a Quarterly Net Loss, then the Earn Out Amount shall be
recalculated as of the end of each such quarter, and Sellers shall within seven
(7) Business Days refund to Buyer any excess of the aggregate amount of Earn Out
Payments made to Sellers over the Earn Out Amount as so recalculated; provided,
however, in no event shall the sum of all amounts so refunded by Sellers exceed
the sum of all Earn Out Payments previously received by Sellers under this
Section 1.9.

 

(g)           Additional Provisions Regarding Certain Assets.

 

(i)            Additional Provisions Regarding Sales of Financing and Lease
Assets.  The following provisions shall apply to Buyer’s sale or transfer (or
purported sale or transfer) of any CFS Portfolio Financing and Lease Asset that
is not a Securitization and is not a Designated Energy Financing and Lease
Asset, a Defaulted Asset or Redeployed Defaulted Asset that is Movable Equipment
(i.e., a sale or transfer of “paper” (and Buyer’s interest in the Portfolio
Property subject thereto) as opposed to a repossession and sale of Portfolio
Property separate and apart from the sale of the applicable CFS Portfolio
Financing and Lease Asset) (each, a “Paper Sale”):

 

(A)          Except for Paper Sales to Affiliates of Buyer, the consideration
received by Buyer (or any Affiliate of Buyer) in connection with any Paper Sale
for an amount greater than the then Applicable NAV of the subject CFS Portfolio
Financing and Lease Asset shall consist solely of cash.

 

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(B)           If a Paper Sale occurs (1) within the twenty-four (24) month
period prior to the Scheduled Termination Date (or any time thereafter with
respect to a First Amendment Lease) for any CFS Portfolio Financing and Lease
Asset, that portion of Paper Sale Net Proceeds in excess of the then Applicable
NAV for such asset shall be treated as a Realized Gain for the purposes of the
calculation of Net Portfolio Gains or Net Portfolio Losses for the calendar
quarter in which such Paper Sale occurs and (2) prior to such date (i.e., more
than twenty-four (24) months prior to the Scheduled Termination Date) any Paper
Sale Net Proceeds in excess of the then Applicable NAV for such asset shall be
for the sole account of Buyer (and not included in the calculation of Net
Portfolio Gains or Net Portfolio Losses for the calendar quarter in which such
Paper Sale occurs), provided, however, that in the event of any Paper Sale by
Buyer to an Affiliate of Buyer within the twenty-four month period prior to the
Scheduled Termination Date (or any time thereafter with respect to a First
Amendment Lease), a condition of such sale shall be that such Affiliate shall
execute and deliver to Sellers on or before the closing date of any such Paper
Sale, an agreement, in form and substance reasonably satisfactory to Sellers,
pursuant to which such Affiliate agrees to be bound by, and perform in
accordance with, the terms of this Agreement as if such Affiliate was an
original “Buyer” party hereto with respect to the CFS Portfolio Financing and
Lease Assets purchased by, or otherwise transferred to, such Affiliate.

 

(ii)           Additional Provisions Regarding Upgrades.  With respect to
internal purposes only for any Upgrade, (A) such Upgrade shall be covered by a
separate schedule (documented for internal purposes only in a manner
substantially equivalent to Buyer’s normal documentation policies), with its own
rental or loan payments separately identified, (B) if the applicable Obligor
makes a partial payment with respect to such Portfolio Property, such payment
shall be allocated pro rata to the original Portfolio Property and the Upgrade,
(C) the original Portfolio Property and the investment in the Upgrade shall be
amortized on a pari passu basis and (D) upon the redeployment or liquidation of
such Upgrade, Buyer will first be entitled out of the Net Disposition Proceeds
to reimbursement for the unamortized portion of the investment in the Upgrade
(which shall be subject to verification by Sellers in any audit Sellers are
entitled to conduct under the terms of this Agreement) prior to the calculation
of any Deemed Gain, Deemed Loss, Realized Gain or Realized Loss arising out of
such redeployment or liquidation.

 

(iii)          Additional Provisions Regarding Substitutions of Property.  In
the event that Buyer and any Obligor agree to replace or substitute other
property (of a material nature) for Portfolio Property relating to a CFS
Portfolio Financing and Lease Asset and the fair market value of the replacement
or substitute property at the time of such replacement or substitution does not
have a fair market value substantially equal to the fair market value of the
Portfolio Property replaced by the replacement or substitute property, then the
replacement or substitute property will be treated as a Redeployed Asset with
respect to which the particular Seller has not elected to treat as an SPRA
pursuant to Section 1.9(d), provided that any gain or loss realized as a result
of such replacement or substitution or that is realized at any time after such
replacement or substitution with respect to the property subject to such
replacement or substitution shall be disregarded in making any calculations of
Portfolio Gain and Portfolio Loss for

 

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purposes of the application of the introductory paragraph Section 1.9(a) and
Schedule 10.  In the event that Buyer and any Obligor agree to replace or
substitute other property (of a material nature) for Portfolio Property relating
to a CFS Portfolio Financing and Lease Asset and the fair market value of the
replacement or substitute property at the time of such replacement or
substitution is of substantially equal fair market value to the fair market
value of the Portfolio Property replaced by the replacement or substitute
property, then the replacement or substitute property will be treated as a
Redeployed Asset with respect to which the particular Seller has elected to
treat as an SPRA pursuant to Section 1.9(d).

 

(iv)          Additional Provisions Regarding Roll-Ups.  With respect to any
Roll-up, the promissory note, credit agreement, lease or other similar document
evidencing such Roll-up shall be treated as a Redeployed Asset with respect to
which the particular Seller has not elected to treat as an SPRA pursuant to
Section 1.9(d), provided that any gain or loss realized as a result of such
Roll-up or realized at any time after such Roll-up with respect to the property
subject to the roll-up shall be disregarded in making any calculations of any
Portfolio Gain and Portfolio Loss for purposes of the application of the
introductory paragraph of Section 1.9 and Schedule 10.

 

(h)           Additional Provision Regarding Early Buy-Outs.  In the event that
an Obligor under a CFS Portfolio Financing and Lease Asset exercises its
contractual right or option (as in effect on the Initial Closing Date) other
than as a result of a casualty to purchase the Portfolio Property encumbered by
or leased pursuant to such Asset prior to the Scheduled Termination Date of such
Asset and, as of the date of such purchase, the net purchase price for such
Portfolio Property exceeds the Applicable NAV of such Asset (the “EBO Gain”),
then, as a further, and contingent, Purchase Price adjustment, in addition to
the further, and contingent, Purchase Price adjustment provided for in the
foregoing provisions of this Section 1.9, Buyer shall pay to Seller an amount
equal to one-half of the EBO Gain within ten (10) days after the consummation of
such purchase.  EBO Gains shall not be included in any calculation of Portfolio
Gain.

 

1.10         Dispute Resolution — Applicable NAV, Losses/Gains, etc.

 

(a)           If Sellers disagree with the determination of (i) any amount shown
(whether due and owing by Sellers to Buyer or due and owing by Buyer to Sellers)
on any Applicable NAV Statement or any Gain/Loss Statement (but not with respect
to Realized Gains and Realized Losses that are not Realized Losses pursuant to
clause (d) of the definition of Realized Loss), (ii) any proposed Stipulated
Value or any proposed Restated Residual Value, (iii) any other asset valuation
of any kind submitted by Buyer to Sellers if no dispute resolution mechanism is
provided with respect to such asset valuation in this Agreement (each, a
“Disputed Amount”), (iv) any calculation by Buyer of a Deemed Gain or a Deemed
Loss (which shall include a Deemed Loss that is treated as a Realized Loss
pursuant to clause (d) of the definition of Realized Loss) (a “Disputed Gain or
Loss”) or (v) any Tentative Portfolio Performance Warranty Payment or Tentative
Portfolio Performance Warranty Payment Refund as set forth in Schedule 10,
Sellers shall notify Buyer in writing of such disagreement within thirty (30)
calendar days after receipt of the statement containing such Disputed Amount (a
“Notice of Disputed Amount”) or Disputed Gain or Loss (a “Notice of Disputed
Gain or Loss”), which

 

15

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Notice shall to the extent commercially reasonably possible based upon the
documents and information of which Sellers had possession and control or to
which Sellers were afforded reasonable access by Buyer during such thirty (30)
calendar day period, describe the nature of any such disagreement in reasonable
detail, identify the specific items involved and the dollar amount of each such
disagreement and provide reasonable supporting documentation for each such
disagreement.  During the thirty (30) calendar day period of their review,
Sellers shall have reasonable access to any documents, schedules or work papers
used in the preparation of any statement containing such Disputed Amount or
Disputed Gain or Loss.  The amount of any undisputed Deemed Gain or Deemed Loss
shall be paid in accordance with the terms of this Agreement.

 

(b)           Buyer and Sellers agree to negotiate in good faith to resolve any
such disagreement.  If the dispute relates to valuation and if Buyer and Sellers
are unable to resolve all disagreements properly identified by Sellers pursuant
to clause (a) above and relating to a Disputed Amount within thirty (30)
calendar days after delivery to Buyer of a Notice of Disputed Amount, then
within ten (10) Business Days after such thirtieth (30th) day, Buyer and Sellers
shall each deliver to the other with respect to every asset that is the subject
of a Disputed Amount the name of an appraiser who is a nationally recognized
independent appraiser experienced in valuing the type of asset (including the
relevant Portfolio Property and, if applicable, any Portfolio Contracts relating
thereto) that is the subject of the Disputed Amount (each, an “Independent
Appraiser”).  In the event that Buyer and Sellers each select the same
Independent Appraiser, such Independent Appraiser shall prepare the appraisal
described below.  In the event that Buyer and Sellers select different
Independent Appraisers, then the two Independent Appraisers shall select a third
Independent Appraiser, who shall prepare the appraisal described below.  To the
extent practicable and permitted by the applicable Financing and Lease Asset,
the selected Independent Appraiser shall have the right to physically inspect
the asset being appraised and to examine such books and records of Buyer and
Sellers as it deems necessary, and shall then prepare a written appraisal of the
value of the asset which is the subject of the Disputed Amount (which appraisal
shall include, if requested by Sellers, a Stipulated Value and/or a Restated
Residual Value for the asset being appraised and which appraisal shall be made
using the appraisal conventions described in the definition of Stipulated
Value), which value shall be final and binding.  Any payment required to be made
by one party to the other based upon the result of the appraisal shall be made
within ten (10) Business Days following the delivery of the appraisal to the
parties, and such Disputed Amount shall be deemed resolved and no longer
disputed for purposes of this Section 1.10.  The fees, expenses and costs of the
Independent Appraiser shall be borne equally by Buyer and Sellers.

 

(c)           If the dispute relates to accounting and if Buyer and Sellers are
unable to resolve all disagreements properly identified by Sellers pursuant to
clause (a) above in a Notice of Disputed Gain or Loss within thirty (30)
calendar days after delivery to Buyer of such Notice of Disputed Gain or Loss,
and such disagreement cannot be resolved through the application of the
mechanism provided for resolving disagreements relating to Disputed Amounts set
forth in clause (b)(ii) above, then within ten (10) Business Days after such
thirtieth (30th) day, such disagreement shall be submitted for final and binding
resolution to PwC.  PwC shall have the right to review such books and records of
Buyer and Sellers as it deems appropriate and shall deliver to Buyer and Sellers
a written report setting forth its determination of the correct amount of Deemed
Gain, Deemed Loss, Tentative Portfolio Performance Warranty Payment or Tentative

 

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Portfolio Performance Warranty Payment Refund, and such Disputed Gain or Loss
shall be deemed resolved and no longer disputed for purposes of this Section
1.10.  Any payment required to be made by one party to the other based upon the
result of the PwC’s determination shall be made within ten (10) Business Days
following the delivery of PwC’s report.

 

SECTION 2

CLOSING

 

2.1           Closing Date.  The Initial Closing shall actually take place at
10:00 a.m. EDT on June 1, 2004, or at such other time or date agreed upon by
Buyer and Sellers in writing (such time and date, the “Initial Closing Date”);
provided, however, that the Initial Closing shall not occur until after the
conditions set forth in Sections 7.1 and 8.1 have been waived in writing or
satisfied.  Notwithstanding the foregoing or anything to the contrary herein,
the Initial Closing and the Initial Closing Date will be deemed to have occurred
as of 11:59 p.m. PDT on May 31, 2004 for all purposes of this Agreement.  At the
Initial Closing, Sellers, in their sole discretion, may defer until Subsequent
Closings the sale of the Deferred Assets.  As a condition to the Initial
Closing, the Specified Financing and Lease Assets, Equity Assets and Assets Held
for Sale and Lease to be sold with a transfer of title, not to include equitable
assignments pursuant to Section 5.2(d), shall have an Estimated Adjusted Book
Value of the Assets of at least $1,080,000,000.  Each Subsequent Closing shall
be consummated with respect to those Deferred Assets, and on the date, set forth
in a written notice delivered by Sellers to Buyer at least two (2) Business Days
prior to the date of such proposed Subsequent Closing, which written notice may
be modified after delivery by written notice of Sellers, in Sellers’ sole
discretion, to remove any Deferred Assets otherwise to be transferred. In no
event shall the Final Closing Date be later than sixty (60) days after the
Initial Closing.  All Deferred Assets not yet transferred and sold (including
equitable assignments pursuant to Section 5.2(d)) shall be transferred and sold
by Sellers to Buyers at the Final Closing, except to the extent a Required
Consent for a Deferred Asset has not been obtained by such date.  Each Closing
shall take place at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue,
New York, New York 10166, or at such other place as shall be agreed upon by
Buyer and Sellers.  The time and date on which a Closing is actually held or
deemed to have occurred pursuant to this Section 2.1 is referred to herein as a
“Closing Date.”  Without limiting the foregoing, the time and date on which the
last Subsequent Closing is actually held is referred to herein as the “Final
Closing Date”; provided, that if there are no Subsequent Closings, the Initial
Closing Date shall be the Final Closing Date for purposes herein.

 

2.2           Buyer’s Closing Date Deliveries.

 

(a)           Subject to the waiver in writing or satisfaction of the conditions
set forth in Section 7.1, at the Initial Closing Buyer shall deliver to Sellers
all of the following:

 

(i)            The payment required by Section 1.3 to be made on the Initial
Closing Date;

 

(ii)           Each of the Buyer Transaction Documents relating to the Assets
transferred on the Initial Closing Date, executed by a duly authorized
representative of Buyer; and

 

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(iii)          The certificate contemplated by Section 8.1(a), executed by a
duly authorized representative of Buyer.

 

(b)           Subject to the waiver in writing or satisfaction of the conditions
set forth in Section 7.2, at each Subsequent Closing Buyer shall deliver to
Sellers all of the following:

 

(i)            An amount in cash equal to the portion of the Base Purchase Price
for the Assets transferred on the date of such Subsequent Closing, payable as
provided in Section 1.3; and

 

(ii)           Each of the Buyer Transaction Documents relating to the Assets
transferred on the date of such Subsequent Closing, executed by a duly
authorized representative of Buyer, in form and substance satisfactory to
Sellers.

 

2.3           Sellers’ Closing Date Deliveries.

 

(a)           Subject to the waiver in writing or satisfaction of the conditions
set forth in Section 8.1, at the Initial Closing Sellers shall deliver to Buyer
all of the following:

 

(i)            Each of the Seller Transaction Documents relating to the Assets
transferred on the Initial Closing Date, executed by a duly authorized
representative of the applicable Seller;

 

(ii)           Copies of all instruments, certificates, documents and other
filings (if applicable) necessary to release the Assets from all Encumbrances
other than Business Asset Permitted Encumbrances and Portfolio Asset Permitted
Encumbrances;

 

(iii)          The certificate contemplated by Section 7.1(a), executed by a
duly authorized representative of each Seller;

 

(iv)          Sellers’ binder of sales Tax exemption certificates as compiled on
the Initial Closing Date and in accordance with Sellers’ historic practices for
maintenance of Sellers’ books and records; and

 

(v)           A schedule (the “Schedule of Pending Non-Income Tax Contests”)
that describes any governmental charges and assessments with respect to Taxes
(other than Income Taxes) relating to the Purchased Portfolio Assets that on the
Initial Closing Date are being contested in good faith.

 

(b)           Subject to the waiver in writing or satisfaction of the conditions
set forth in Section 8.2, at each Subsequent Closing Sellers shall deliver to
Buyer each of the Seller Transaction Documents relating to the Assets
transferred on the date of such Subsequent Closing, executed by a duly
authorized representative of the applicable Seller.

 

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SECTION 3

REPRESENTATIONS AND WARRANTIES OF SELLERS

 

As an inducement to Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Sellers hereby jointly and severally represent
and warrant to Buyer as follows:

 

3.1           General Representations and Warranties.

 

(a)           Organization and Power and Authority of Sellers.  Each Seller (i)
is duly formed, validly existing and in good standing under the Laws of its
jurisdiction of formation, (ii) is duly qualified or authorized to conduct
business and is in good standing as a foreign corporation or other applicable
entity in all jurisdictions in which the character or location of its properties
owned or leased by it or the nature of the business conducted by it requires
such qualification or authorization, except where the failure to be so qualified
or authorized has not had and would not have a Material Adverse Effect, and
(iii) has the power and authority to own, lease, service and administer the
Assets and to carry on the Business conducted by them, in the manner that it was
conducted immediately prior to the date of this Agreement.

 

(b)           Authority of Sellers; Conflicts.

 

(i)            Sellers have the power and authority to execute and deliver this
Agreement and the Seller Transaction Documents and to perform their respective
obligations thereunder.  The execution and delivery of this Agreement and the
Seller Transaction Documents by Sellers and the performance of their respective
Obligations thereunder have been duly authorized and approved by all necessary
action on the part of Sellers.

 

(ii)           This Agreement has been duly authorized, executed and delivered
by Sellers and (assuming the valid authorization, execution and delivery of this
Agreement by Buyer) is the legal, valid and binding obligation of Sellers
enforceable in accordance with its terms subject to Debtor Relief Laws; and each
Seller Transaction Document has been duly authorized by Sellers and upon
execution and delivery by Sellers will be (assuming the valid authorization,
execution and delivery by each other party thereto) the legal, valid and binding
obligation of Sellers enforceable in accordance with its terms, in each case
subject to Debtor Relief Laws.

 

(iii)          Except as set forth in Schedule 3.1(b), the execution and
delivery by Sellers of this Agreement and each Seller Transaction Document, and
the performance by them of their obligations hereunder or thereunder, do not and
will not:

 

(A)          Violate any provision of the Articles of Incorporation, Certificate
of Incorporation, Operating Agreement, Certificate of Formation, Bylaws,
Partnership Agreement or other organizational or formation documents of Sellers;

 

(B)           (1) violate any provision of applicable Law relating to the
Business; (2) violate any provision of any order, arbitration award, judgment or
decree to which Sellers are subject; or (3) require a registration, filing,
application, notice, consent,

 

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approval, order, qualification or waiver with, to or from any Governmental
Authority (except any documents required to be recorded or filed with the U.S.
Coast Guard, the U.S. Federal Aviation Authority, the Surface Transportation
Board or any comparable foreign Governmental Authorities with respect to any
vessel, vehicle or aircraft that is subject to a Specified Financing and Lease
Asset); or

 

(C)           (1) require a consent, approval or waiver from, or notice to, any
party to a Business Agreement, which consent approval or waiver has not been
obtained or (2) result in a breach of or cause a default under any provision of
a Business Agreement, except in any case under this clause (C), any breach or
default that would not have a Material Adverse Effect.

 

(c)           Financial Statements.  Schedule 3.1(c) sets forth, on a
consolidated basis, (i) an unaudited balance sheet of the Business as of
December 31, 2003 (the “Balance Sheet “), and (ii) an unaudited statement of
income of the Business for the twelve month period ending December 31, 2003 (the
“Income Statement” and together, with the Balance Sheet, the “Financial
Statements”).  The Financial Statements were created specially by Sellers in
connection with the transactions contemplated hereby from Sellers’ financial
records.  The Financial Statements (i) are in accordance with the books and
records of Sellers; (ii) present fairly, in all material respects, the financial
position of the Business for the period then ended; and (iii) have been prepared
in accordance with the Accounting Principles (except (A) for the absence of
footnotes and other disclosures required by GAAP and (B) that the Financial
Statements do not present the results of operation that would have occurred if
the Business had been operated as a “stand-alone” entity).

 

(d)           Operations Since the Date of the Financial Statements.

 

(i)            Since the date of the Financial Statements, Sellers have
conducted the Business in all material respects only in the ordinary course and
there has not occurred any event which constituted or would reasonably be likely
to constitute a Material Adverse Effect, except to the extent Sellers have not
originated or sought to originate new business.

 

(ii)           Since the date of the Financial Statements, with respect to the
Business, Sellers have not:

 

(A)          Sold, leased (as lessor or lessee), transferred or otherwise
disposed of any assets except in the ordinary course of business consistent with
past practice;

 

(B)           Undertaken or committed to undertake capital expenditures
exceeding $500,000 in the aggregate per calendar quarter, other than capital
expenditures to acquire On-Lease Equipment in the ordinary course of business
consistent with past practice;

 

(C)           Instituted any material increases in any compensation of any
employee other than salary or hourly increases in the ordinary course of
business consistent with past practices or pursuant to employment or collective
bargaining agreements, or instituted any material increase in any existing, or
instituted any new,

 

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profit sharing, bonus, incentive, deferred compensation, severance, termination
arrangement, insurance, pension, retirement, medical, hospital, disability,
welfare or other benefits, except for the Retention Agreements, as required to
comply with applicable Requirements of Law or as may be provided in retention
agreements with employees retained by any Seller during the period commencing
after the Initial Closing Date (the “Additional Retention Agreements”);

 

(D)          To the Knowledge of Sellers, suffered any damage, destruction or
casualty loss with respect to any property (whether or not covered by insurance)
in excess of $250,000 in the case of any individual loss or $500,000 with
respect to the aggregate of all such losses;

 

(E)           Waived any material rights with respect to any Business Assets;

 

(F)           Permitted any Encumbrances on any Business Assets other than
Business Asset Permitted Encumbrances; or

 

(G)           Authorized, approved, agreed or committed to do any of the
foregoing.

 

(e)           Taxes.

 

(i)            Sellers have filed or will have filed on a timely basis all
material Tax Returns relating to the Business in connection with any federal,
state or local Tax required to be filed by them, all such Tax Returns are true,
correct and complete in all material respects and Sellers have or will have
timely paid all such Taxes shown thereon to be due except as contested upon
audit in good faith.

 

(ii)           None of the Assets is subject to any lien in favor of the United
States pursuant to Section 6321 of the Code for nonpayment of federal Taxes, or
any lien in favor of any state or locality pursuant to any comparable provision
of state or local Law under which transferee liability might be imposed upon
Buyer as a buyer of such Assets pursuant to Section 6323 of the Code or any
comparable provision of state or local Law except in each case liens for Taxes
and other governmental charges and assessments which are not yet due and payable
or which are being contested in good faith.

 

(iii)          All of the Purchased Portfolio Assets that are treated as true
leases for federal Income Tax purposes on the books and records of Sellers
(excluding for purposes of this representation “motor vehicle operating leases”
to which Section 7701(h) of the Code applies) are properly treated by Sellers on
the date hereof, under applicable Law in effect on the date hereof, as leases
for federal Income Tax purposes.  All of the assets of entities the interests in
which are Purchased Portfolio Assets which assets are treated as true leases for
federal Income Tax purposes on the books and records of such entities (excluding
for purposes of this representation “motor vehicle operating leases” to which
Section 7701(h) of the Code applies) are properly treated by such entities (and
by Sellers in Sellers’ capacities as members of such entities) under applicable
Law in effect on the date hereof, as leases for federal Income Tax purposes. 
With respect to (a) the lease executed on April 18, 2004 with BCC Equipment
Leasing Corporation, as lessor,

 

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and The Boeing Company, as lessee, of one Bombardier Challenger CL-600-2B16,
Variant 604 Aircraft bearing manufacturer’s serial number 5571 (“MSN 5571”), and
(b) the proposed lease with Boeing Capital Services Corporation, as lessor, and
The Boeing Company, as lessee, of one Bombardier Challenger CL-600-2B16, Variant
604 Aircraft bearing manufacturer’s serial number 5573 (“MSN 5573”; and MSN 5571
and MSN together, the “TBC Equipment”), if, in each case the date of the sale of
the relevant aircraft to Buyer is no more than three months following (A) April
27, 2004 in the case of MSN 5571 and (B) the “Acceptance Date” for such aircraft
as set forth in such lease in the case of MSN 5573, but only if the lease for
such aircraft is executed substantially in the form of, and with substantially
the same economic terms and conditions as, the lease executed for MSN 5571;
then: (1) the original use of the TBC Equipment will commence after September
10, 2001; (2) the TBC Equipment will have a recovery period of 20 years or less
under law in effect on the date hereof; (3) the TBC Equipment will be acquired
by the lessor after September 10, 2001; (4) the TBC Equipment will be placed in
service before January 1, 2005; (5) no election will have been made by or on
behalf of lessor pursuant to Section 168(k)(2)(C)(iii) of the Code with respect
to the TBC Equipment; (6) the TBC Equipment will be originally be placed in
service no earlier than 3 months prior to sale of the TBC Equipment to Buyer,
and (7) neither the lessor nor the lessee was, prior to May 6, 2003, obligated
under a binding contract to acquire MSN 5571 or MSN 5573.  With respect to the
Wing Ventures lease listed on Schedule 5.3, Sellers warrant that such lease, as
restructured, as of the applicable Closing Date, shall constitute a lease for
federal income tax purposes and that the rental income under such lease will
accrue for such purposes no sooner than as actually provided for in the rent
schedule of such lease, as so amended.

 

(iv)          Except as disclosed by Sellers in writing to Buyer at or before
the Final Closing, no Asset is a debt instrument (A) the interest on which is,
or purports to be, excludable, in whole or in part, from gross income for
federal Income Tax purposes, (B) that was issued with “original issue discount”
as that term is defined in Section 1273(a) of the Code, (C) that is an
“applicable high yield discount obligation” as defined in Section 163(i)(1) of
the Code or (D) that constitutes a “registration-required obligation” as defined
in Section 163(f)(2) of the Code and that is not in “registered form” as such
term is defined in Temporary Treasury Regulation Section 5f.103-1(c) or Section
149(b)(3) of the Code.

 

(v)           Except as disclosed on Schedule 3.2(s), no borrower under a
Portfolio Asset that is a debt obligation for federal income tax purposes is
other than a “United States person” as such term is defined in Section
7701(a)(30) of the Code.  No Person for whom any of the Sellers acts as a paying
agent for U.S. source interest payments or to whom any of the Sellers has
transferred a partial participation in an Asset that is a debt obligation for
U.S. federal income tax purposes giving rise to U.S. source interest payments is
other than a “United States person” as such term is defined in Section
7701(a)(30) of the Code.

 

(vi)          None of the Assets directly or indirectly secures any debt, the
interest on which is tax-exempt under Section 103(a) of the Code.

 

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(vii)         As of the Initial Closing Date, to the knowledge of Roger J.
Idnani (Director Tax Planning Boeing Capital Corporation), Sellers have not
received official notice (i) from GATX Marine Investors Corporation or Deep Seas
Investors L.L.C. that GATX Marine Investors Corporation has sold or transferred
its interest in the Deep Seas Investors, L.L.C. or (ii) from The CIT
Group/Equipment Financing, Inc. or Portland Tube Facility, L.L.C. that The CIT
Group/Equipment Financing, Inc. has sold or transferred its interests in
Portland Tube Facility, L.L.C., or (iii) from Mitsui Leasing (U.S.A.), Inc. or
MDFC/Mitsui Leasing Partnership that Mitsui Leasing (U.S.A.) has sold or
transferred their interests in MDFC/Mitsui Leasing Partnership.

 

(f)            Governmental Permits.  Set forth on Schedule 3.1(f) are all
Permits owned, held or possessed by Sellers relating to the Business.  To the
Knowledge of Sellers, Sellers have, and at all times have had, all Permits
necessary to entitle Sellers to own or lease, operate and use the Assets and to
carry on and conduct the Business (herein collectively called “Governmental
Permits”).

 

(g)           Real Property.  Sellers do not own any real property used in the
Business.

 

(h)           [Intentionally Omitted].

 

(i)            Software.  To the Knowledge of Sellers, except as set forth on
Schedule 3.1(i), Sellers have the right and license to use the Software used in
the conduct of the Business as presently conducted.

 

(j)            No Violation, Litigation or Regulatory Action.

 

(i)            To the Knowledge of Sellers (after Reasonable Inquiry), Sellers
have complied with all applicable Requirements of Law relating to the Business;

 

(ii)           To the Knowledge of Sellers (after Reasonable Inquiry), none of
Sellers, nor any of their directors, officers, employees, agents or
representatives, nor any Person acting for or on behalf of any Seller, has
violated the Foreign Corrupt Practices Act or the USA PATRIOT Act in connection
with the Business, to the extent applicable. To the Knowledge of Sellers (after
Reasonable Inquiry), all Sellers, and employees, agents, and representatives
thereof, as well as all Persons acting for or on behalf of all Sellers, are in
compliance with the Foreign Corrupt Practices Act and the USA PATRIOT Act in
connection with the Business, to the extent applicable;

 

(iii)          To the Knowledge of Sellers (after Reasonable Inquiry), no Seller
has, within the last five years, violated any Laws governing the export,
re-export and licensing of goods, services and technology in connection with the
Business and, to the Knowledge of Sellers (after Reasonable Inquiry), each
Seller is in compliance in all material respects with all aforementioned Laws in
connection with the Business;

 

(iv)          To the Knowledge of Sellers (after Reasonable Inquiry), no Seller
has, within the last five years, violated any Laws prohibiting cooperation with
unsanctioned foreign boycotts and requiring the reporting of certain requests to
cooperate with such foreign boycotts in connection with the Business and, to the
Knowledge of

 

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Sellers (after Reasonable Inquiry),  each Seller is in compliance in all
material respects with the aforementioned Laws prohibiting cooperation with
unsanctioned foreign boycotts and requiring the reporting of certain requests to
cooperate with such foreign boycotts in connection with the Business;

 

(v)           To the Knowledge of Sellers (after Reasonable Inquiry), no Seller
has, in connection with the Business, within the last five years, violated any
Laws administered by the U.S. Department of the Treasury, Office of Foreign
Assets Control imposing economic sanctions and trade embargoes against
designated countries, persons and entities and, to the Knowledge of Sellers
(after Reasonable Inquiry),  each Seller, in connection with its operations with
respect to the Business, is in compliance in all material respects with the
foregoing Laws imposing economic sanctions and trade embargoes against
designated countries, persons and entities;

 

(vi)          To the Knowledge of Sellers (after Reasonable Inquiry), no Seller
in connection with the Business owns, in whole or in part, manages, operates,
uses, or benefits from property in or from Cuba that was nationalized by the
Cuban Governmental Authorities after January 1, 1959;

 

(vii)         Except as set forth on Schedule 3.1(j) or on the Schedule of
Pending Non-Income Tax Contests, there are no lawsuits, claims, suits,
proceedings or investigations relating to the Business pending or, to the
Knowledge of Sellers, threatened against Sellers, with respect to which (i) if
adversely determined against any Seller would reasonably be likely to result in
Liabilities and Expenses in excess of $500,000, (ii) seek equitable or
injunctive relief against one or more Seller, (iii) seek punitive, exemplary,
special, incidental or consequential damages against a Seller or (iv) allege
fraud or bad faith by one or more Seller, nor have Sellers received any written
notice of violation of any Law relating to the Business from any Governmental
Authority which if adversely determined against any Seller would reasonably be
likely to result in Liabilities and Expenses in excess of $250,000; and

 

(viii)        There is no lawsuit, claim or proceeding pending or, to the
Knowledge of Sellers, threatened, that questions the legality or propriety of
the transactions contemplated by this Agreement or any of the Seller Transaction
Documents.

 

(k)           Contracts.

 

(i)            Schedule 3.1(k) sets forth a list of each of the following
(collectively, the “Business Agreements”):

 

(A)          any Contract (including purchase orders) involving the obligation
of Sellers to purchase products or services pursuant to which the aggregate of
payments to become due from Sellers is equal to or exceeds $500,000 other than
loan and lease commitments made in the ordinary course of business;

 

(B)           any commitment of Sellers relating to the Business to make a
capital expenditure or to purchase a capital asset, not contemplated by the
capital expenditure budget of Sellers for the Business; and

 

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(C)           any Assigned Contract containing any covenant or provision
limiting the freedom of Sellers to engage in any line of business or compete
with any Person in any geographic area.

 

(ii)           Except as set forth on Schedule 3.1(k), each Contract set forth
on Schedule 3.1(k) is, with respect to Sellers, valid, binding and in full force
and effect, and with respect to any other party, to the Knowledge of Sellers,
valid, binding and in full force and effect.  Except as set forth on Schedule
3.1(k), Sellers have performed all material obligations required to be performed
by them to date under each such Contract and are not in breach or default in any
material respect thereunder and, to the Knowledge of Sellers, no other party to
any of such Contracts is in breach or default in any material respect
thereunder.

 

(l)            Status of Assigned Contracts.  Each of the Assigned Contracts is
valid, binding and in full force and effect.  Sellers are not in, have not
received written notice of, or, to the Knowledge of Sellers, alleged to be in,
breach or default under any of the Assigned Contracts in any material respect
and no event has occurred which, with notice and/or lapse of time, would
constitute a default under any of the Assigned Contracts in any material
respect.

 

(m)          No Brokers.  Except for Credit Suisse First Boston, whose fees
shall be paid by Sellers, Sellers are not obligated to pay any fee or commission
to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.

 

(n)           ERISA.

 

(i)            Each material Benefit Plan is set forth on Schedule 3.1(n-(i)).

 

(ii)           With respect to each Benefit Plan set forth on Schedule
3.1(n-(i)):  (i) to the Knowledge of Sellers, each such plan has been maintained
and operated in material compliance with the applicable requirements of the Code
and ERISA and the regulations issued thereunder and (ii) no material litigation
or asserted claims against Sellers exist with respect to any such plan other
than claims for benefits in the normal course of business.

 

(iii)          Except as set forth on Schedule 3.1(n-(iii)), each Benefit Plan
intended to qualify under Section 401(a) of the Code has received a favorable
currently effective determination letter that it is so qualified by the IRS,
and, to the Knowledge of the Sellers, no event has occurred since the date of
such determination letter that could reasonably be expected to result in the tax
disqualification of such Benefit Plan.

 

(o)           Environmental Compliance.

 

(i)            To the Knowledge of Sellers (after Reasonable Inquiry), the
Business is in compliance with all applicable Environmental Laws.

 

(ii)           Sellers have not received any written notice of violation, nor is
any claim or action pending or to the Knowledge of Sellers, threatened,
asserting actual or potential Liability under any Environmental Law in respect
to the Business.

 

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(iii)          Notwithstanding any other provisions of this Agreement, Buyer
acknowledges and agrees that the representations and warranties contained in
this Section 3.1(o) and Section 3.2(d) are the only representations and
warranties given by Sellers with respect to environmental matters or compliance
with Environmental Laws and Hazardous Substances and no other provisions of this
Agreement shall be interpreted as containing any representation or warranty with
respect thereto.

 

(p)           Employee Relations and Agreements.

 

(i)            There are not any collective bargaining agreements or other
agreements with any labor union or other bargaining unit directly relating to
the employees of the Business.

 

(ii)           Except as set forth on Schedule 3.1(p-(ii)) or for the Additional
Retention Agreements, no employee of the Business is a party to any employment
or other agreement that entitles him or her to compensation or other
consideration upon the acquisition by any Person of control of the Business.

 

(iii)          Sellers have terminated no more than ten (10) employees of the
Business within ninety (90) days prior to the Initial Closing Date.

 

(q)           No Undisclosed Liabilities.  The Business does not have any
Liabilities or obligations of a nature required by GAAP to be reflected on or
disclosed in the footnotes to a balance sheet of the Business except for (i)
Liabilities disclosed, reflected or reserved against in the Financial
Statements, (ii) Liabilities incurred after the date of the Financial Statements
in the ordinary course of business, (iii) the matters disclosed in or arising
out of matters set forth on Schedule 3.1(q) and the other Schedules to this
Agreement or which are the subject of other representations and warranties set
forth herein, (iv) Liabilities and obligations incurred in connection with this
Agreement and the transactions contemplated hereby, and (v) Liabilities which
constitute Excluded Liabilities.

 

(r)            Business Assets.  Sellers are the sole and lawful owners of the
Business Assets.  Upon Closing hereunder, Buyer shall receive good and
marketable title to the Business Assets transferred at such Closing free and
clear of all Encumbrances other than Business Asset Permitted Encumbrances.

 

3.2           Representations and Warranties with Respect to Specified Portfolio
Assets.

 

(a)           Sellers or the Investment Vehicles are the sole and lawful owners
of the Specified Portfolio Assets (other than the Portfolio Property relating to
any Specified Financing and Lease Asset) and are either the sole and lawful
owners of the Portfolio Property or have a valid perfected first priority
security interest in such Portfolio Property.  Upon each Closing hereunder,
other than Portfolio Asset Permitted Encumbrances, Buyer shall receive (i) good
and marketable title to the Specified Portfolio Assets intended to be
transferred at such Closing (other than the Portfolio Property relating to any
Specified Financing and Lease Asset) free and clear of all Encumbrances and (ii)
good and marketable title or a valid perfected first priority security interest
on the Portfolio Property transferred at such Closing free and clear of all
Encumbrances.  To the extent this transaction constitutes a secured transaction,
Sellers grant to Buyer a valid

 

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perfected first priority security interest in all of the Purchased Portfolio
Assets and all proceeds of all of the foregoing to secure any and all
obligations at any time owing by Sellers to Buyer.

 

(b)           (i) The Specified Portfolio Contracts are true, valid, genuine and
complete in all material respects; (ii) Sellers or the Investment Vehicles have
in their possession either (x) a fully executed original of any Lease Contract
or note or certificate of title (and an executed original or a true and correct
copy of all other documents) comprising each Specified Financing and Lease
Asset, Credit Enhancement and all other Portfolio Contracts required by the
applicable Seller’s or the Investment Vehicle’s credit or investment approval
with respect to each Specified Financing and Lease Asset or (y) a true and
correct electronic version of each document referred to in clause (x) above for
which Sellers or the Investment Vehicles do not have either a fully executed
original or an executed original or a true and correct copy, as called for in
clause (x) above; (iii) the documents in Sellers’ or the Investment Vehicles’
possession pursuant to clause (ii) are sufficient to enforce the Obligor’s
obligations under each Specified Financing and Lease Asset, Credit Enhancement
and all other material Portfolio Contracts and (iv) Sellers or the Investment
Vehicles have in their possession documentation sufficient to establish the
original equipment cost of all On-Lease Equipment for purposes of determining
personal property tax liability.

 

(c)           The Specified Financing and Lease Assets represent existing,
valid, binding and enforceable obligations in accordance with their written
terms, subject to any Debtor Relief Law, and constitute and arose out of bona
fide business transactions entered into in the ordinary and usual course of
business of the applicable Seller or Investment Vehicle, consistent with their
respective past practices, but in the case of any Investment Vehicle, consistent
with the applicable Seller’s past practices.

 

(d)           The Specified Financing and Lease Assets and the Asset Files
relating thereto conform in all material respects with all applicable Laws.  To
the Knowledge of Sellers (after Reasonable Inquiry), all Portfolio Property was
in compliance with Environmental Laws when each applicable Obligor took delivery
thereof.

 

(e)           Signatures, names, addresses, amounts, descriptions of Collateral
and other statements and facts contained in the Specified Financing and Lease
Assets and the Asset Files relating thereto are genuine, true and accurate in
all material respects.

 

(f)            The computation of rents, interest, fees and other charges, if
any, with respect to the Specified Financing and Lease Assets, have been
accurately made and conform with all applicable Laws, in all material respects,
and neither the billing and collection nor enforcement of any Specified
Financing and Lease Asset or Credit Enhancement in accordance with the terms
thereof has resulted or will result in the violation of any Laws in effect as of
the date hereof or as of the applicable Closing Date.

 

(g)           (i) Other than as set forth on Schedule 3.2(g)(i), each Specified
Financing and Lease Asset is not more than thirty (30) days past due with
respect to its payments and no prepayments have been made thereunder; (ii) other
than as set forth on Schedule 3.2(g)(ii), neither Sellers nor the Investment
Vehicles have received any advance rents or other payments or deposits of any
Obligor under any Specified Financing and Lease Asset; (iii) each such Specified

 

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Financing and Lease Asset requires the Obligor thereunder (and not a Seller,
Investment Vehicle or any other Person) to maintain insurance against loss or
damage with respect to the On-Lease Equipment and tangible Collateral subject to
or governed by such Specified Financing and Lease Asset in an amount in
compliance with such Seller’s or Investment Vehicle’s credit policies as of the
date of origination; (iv) such Specified Financing and Lease Asset requires the
Obligor thereunder (and not a Seller, Investment Vehicle or any other Person) to
maintain liability insurance naming the applicable Seller or Investment Vehicle,
and its successors and assigns additional insureds with respect to such
liability insurance; (v) other than as set forth on Schedule 3.2(g)(v), neither
Sellers nor the Investment Vehicles have received any notice of cancellation,
termination or non-renewal of such insurance which remains uncured, and based
thereon, Sellers further jointly and severally represent and warrant to Buyer
that all of the insurance required pursuant to such Specified Financing and
Lease Asset is in full force and effect; and (vi) neither Sellers nor the
Investment Vehicles have taken any action or omitted to take any action that has
resulted or might result in (x) the Obligor under any Specified Financing and
Lease Asset maintaining less insurance against loss or damage or liability
insurance than is required under the terms of such Specified Financing and Lease
Asset or (y) a reduction in the amount that would otherwise be payable as
proceeds with respect to a claim under any such insurance policy.

 

(h)           Other than as set forth on Schedule 3.2(h), the Specified
Portfolio Assets are in full force and effect, are not subject to any valid
defenses, setoffs or counterclaims of any kind and no suit or any legal action
or proceeding, administrative, judicial or otherwise has been brought or, to the
Knowledge of Sellers, threatened to be brought by or against Sellers or the
Investment Vehicles in connection therewith.

 

(i)            Other than as set forth on Schedule 3.2(i), the On-Lease
Equipment subject to each relevant Specified Financing and Lease Asset has been
delivered to the applicable lessee Obligor in accordance with the terms of the
applicable Lease Contract and has been accepted by such Obligor and, to the
Knowledge of Sellers, all such On-Lease Equipment is in the actual possession of
and being used by such Obligor (or a duly authorized sublessee or other agent or
designee appointed in accordance with the terms of the relevant Specified
Financing and Lease Asset) in its business operations; and no Obligor under any
Specified Financing and Lease Asset has acquired any Portfolio Property, any
interest in any Portfolio Property or the use of any Portfolio Property pursuant
to such Specified Financing and Lease Asset for any purpose that is subject to
the Truth in Lending Act and Regulation Z, as amended, or any State consumer
credit Law.

 

(j)            Unless otherwise set forth on Schedule 3.2(j), to the Knowledge
of Sellers, no Obligor under any Specified Portfolio Contract is the subject of
any proceeding under any Debtor Relief Law.

 

(k)           The Asset Files and Records relating to the Specified Portfolio
Assets are accurate in all material respects; and all information contained on
the Schedules attached to this Agreement is accurate in all material respects.

 

(l)            Other than as set forth on Schedule 3.2(l), to the Knowledge of
Sellers, no Portfolio Property relating to any of the Specified Portfolio
Contracts has been repossessed, sold

 

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or substantially damaged without being repaired (whether or not covered by
insurance) in excess of $250,000 in the case of any individual loss or $500,000
with respect to the aggregate of all such losses.

 

(m)          Neither Sellers nor the Investment Vehicles are in breach of or
default under any Specified Financing and Lease Asset or any Credit Enhancement.

 

(n)           No Obligor under any Specified Financing and Lease Asset is
required under any applicable Law to withhold from payment on any such Specified
Financing and Lease Asset any interest or other withholdings for the payment of
Taxes to any Governmental Authority, except to the extent that such Obligor is
obligated to indemnify the applicable Seller for the amount withheld.

 

(o)           Other than as set forth on Schedule 3.2(o), (i) all payments
pursuant to each Specified Financing and Lease Asset are made directly to
Sellers or the Investment Vehicles; (ii) no Specified Financing and Lease Asset
is subject to any debt subordination agreement, participation agreement (where
the applicable Seller or Investment Vehicle has granted a participation interest
to a third party), intercreditor agreement, owner trust agreement, collateral
sharing agreement, residual sharing agreement, remarketing agreement or vendor
recourse agreement and no Specified Financing and Lease Asset is subject to any
disposition agreement; and (iii) none of the Specified Financing and Lease
Assets will constitute a public sector financing contract.

 

(p)           Sellers or the Investment Vehicles have approved credit requests,
credit proposals, letters of intent and similar documents and otherwise entered
into commitments and Portfolio Contracts and documented the Specified Financing
and Lease Assets in a manner consistent with Sellers’ credit policies,
collateral eligibility standards, underwriting, origination and credit quality
classifications in effect at the time such Specified Financing and Lease Assets
were originated.

 

(q)           (i) no Person has an option to purchase any item of On-Lease
Equipment for a fixed amount less than the Booked Residual Value thereof; (ii)
the Booked Residual Value of any item of On-Lease Equipment is not less than the
amount set forth on the Data Tape; (iii)  all documents required to be recorded
or filed with the U.S. Coast Guard, the U.S. Federal Aviation Authority, the
Surface Transportation Board or any comparable foreign Governmental Authorities
with respect to any vessel, vehicle or aircraft that is subject to a Specified
Financing and Lease Asset have been duly filed or recorded, and all filing fees
and Taxes, if any, payable in connection with such filings have been paid in
full; and (iv) each vehicle, vessel and aircraft that is subject to a Specified
Financing and Lease Asset has been duly registered with the appropriate
Governmental Authorities, and legal title to or the benefits of a valid first
priority perfected mortgage with respect to each such vehicle, vessel or
aircraft is vested in a Seller or Investment Vehicle.

 

(r)            Schedule 3.2(r) sets forth a list of each Credit Enhancement that
is a letter of credit or certificate of deposit that has a maximum face amount
in excess of $75,000, along with (i) the issuer thereof, (ii) the maximum amount
drawable thereunder or principal amount

 

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thereof, (iii) the expiration or maturity date thereof, if applicable and (iv)
the physical location thereof.

 

(s)           Other than as set forth on Schedule 3.2(s) each Specified
Financing and Lease Asset and Credit Enhancement is expressly governed by the
Laws of a State of the United States.  Other than as disclosed on Schedule
3.2(s) each Obligor under a Specified Financing and Lease Asset effects payments
with respect to such Specified Financing and Lease Asset from a location in the
United States.  Except as set forth on Schedule 3.2(g)(ii), none of the Obligors
identified on Schedule 3.2(g)(ii) are located in the State of New York.

 

(t)            (i) No Specified Financing and Lease Asset that is in the form of
a Lease Contract is terminable at the option of the Obligor thereunder except to
the extent that such Obligor is required to pay to or on behalf of the
applicable Seller a termination payment in an amount not less than the present
value of all remaining scheduled payments, computed using a discount rate equal
to the contract rate, if provided for, or otherwise the implicit rate for such
Specified Financing and Lease Asset plus an amount not less than the present
value of Booked Residual Value (as proportionately reduced for the interests
subject to the Option Agreement) plus, to the extent required to be paid
pursuant to the terms of such Lease Contract, any break funding, swap breakage
or similar costs and (ii) no Specified Financing and Lease Asset that is in the
form of a Finance Obligation is terminable at the option of the Obligor
thereunder except to the extent that the Obligor is required to pay the
applicable Seller or Investment Vehicle not less than the sum of the outstanding
principal balance plus accrued and unpaid interest thereunder at the time of
termination plus, to the extent required to be paid pursuant to the terms of
such Finance Obligation, any break funding, swap breakage or similar costs.

 

(u)           All of the Portfolio Information set forth in the Data Tape is
true, correct, complete and accurate in all respects as of April 30, 2004,
subject to the following limitations and qualifications:

 

(i)            The Data Tape includes information in addition to the Portfolio
Information.  No representation or warranty is made with respect to such
additional information, except as otherwise indicated in footnote * on the
Addendum to Exhibit L.

 

(ii)           The Data Tape includes information regarding certain Financing
and Lease Assets and other Portfolio Assets that are not Specified Financing and
Lease Assets, Equity Assets or Assets held for Sale or Lease.  No representation
or warranty is made with respect to the information applicable to any such
assets.

 

(iii)          The Data Tape includes projected cash flows with respect to
certain Financing and Lease Assets that bear interest at a floating rate (or are
Lease Contracts that have an imputed floating interest rate).  In projecting
such cash flows, Sellers assumed a fixed rate of interest over the remaining
life of such assets at a rate equal to the most recent applicable contractual
index rate plus the current applicable contractual interest rate “spread” or
“margin,” if any.

 

(iv)          The Data Tape includes contractual payment amounts, Booked
Residual Values and projected cash flows with respect to Specified Financing and
Lease

 

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Assets owned by the Investment Vehicles or with respect to which the applicable
Seller owns a beneficial interest.  Such payment amounts, Booked Residual Values
and projected cash flows have not been bifurcated on the Data Tape into the
applicable portions thereof to be transferred to Buyer (pursuant to Buyer’s
acquisition of interests in the Investment Vehicles or a portion of such
beneficial interest) from those portions thereof applicable to the interests
retained by Sellers subject to the Option Agreement.

 

(v)           To the extent any of the Portfolio Information consists of
projected cash flows (or similar types of information consisting of projected
receipts with respect to the Specified Portfolio Assets), Sellers make no
representation with respect to the collectability of such cash flows.

 

(vi)          The Portfolio Information and Sellers’ representations and
warranties with respect thereto are further limited and/or qualified as set
forth on the Addendum to Exhibit L.

 

(v)           Other than as set forth in Schedule 3.2(v) or any documents
required to be recorded or filed with the U.S. Coast Guard, the U.S. Federal
Aviation Authority, the Surface Transportation Board or any comparable foreign
Governmental Authorities with respect to any vessel, vehicle or aircraft that is
subject to a Specified Financing and Lease Asset, the execution and delivery by
Sellers of this Agreement and each Seller Transaction Document, and the
performance by them of their obligations hereunder or thereunder, do not and
will not (i) require a consent, approval or waiver from, or notice to, any party
to a Specified Portfolio Contract or other Specified Financing and Lease Asset,
which consent approval or waiver has not been obtained, or (ii) result in a
breach of or cause a default under any provision of a Specified Portfolio
Contract or other Specified Financing and Lease Asset; except in any case under
clauses (i) and (ii) above, any violation, breach, default or non-compliance
that would not create a defense to enforcement or give rise to material
damages.  The consents, approvals, waivers and notices set forth on Schedule
3.2(v) shall be referred to herein as the “Required Consents”.

 

(w)          As of April 30, 2004, the total amount of Applicable NAV of
Portfolio Assets with respect to which any regularly scheduled installment of
principal, interest or base rent (as the case may be) was more than thirty (30)
days past due was not more than $75,000,000, with such delinquency determined on
a separate IER-by-IER basis such that only the Applicable NAV of delinquent IERs
shall be included in the computation of such amount.  For the avoidance of
doubt, no such amount subject to forbearance, deferral or similar agreements
shall be deemed to be past due for purposes of the foregoing.

 

(x)            Other than as set forth in Schedule 3.2(x), since the date of the
Financial Statements, with respect to the Portfolio Assets, neither the Sellers
nor the Investment Vehicles have:

 

(i)            Waived any material rights; or

 

(ii)           Except for the Portfolio Asset Permitted Encumbrances, consented
to, or otherwise, to the Knowledge of Sellers with respect to Portfolio
Property, permitted

 

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any Encumbrances on any Specified Portfolio Assets intended to be transferred at
a Closing.

 

3.3           Representations and Warranties with respect to Equity Assets.

 

(a)           The Equity Assets are duly authorized, validly issued,
outstanding, fully paid and nonassessable.

 

(b)           Schedule 3.3 accurately sets forth the names of the owners of the
Equity Assets, the percentage ownership thereof, and whether such Equity Assets
are certificated.

 

(c)           Each Seller listed on Schedule 3.3 owns the Equity Asset listed
thereon beneficially and of record, free and clear of all Encumbrances.

 

(d)           To the extent that any Equity Asset is certificated, the delivery
of a certificate or certificates at a Closing representing such Equity Asset in
the manner set forth in Section 2.3 will transfer to Buyer valid title to the
applicable Equity Asset, free and clear of all Encumbrances.  Upon each Closing,
Buyer will be the beneficial owner of record of the Equity Assets transferred at
that Closing, free and clear of all Encumbrances.

 

(e)           The Mitsui Partnership does not have any Liabilities and does not
engage in any trade, business or other activity, other than the ownership of
certain Specified Financing and Lease Assets, a portion of which are set forth
on the Data Tape.

 

SECTION 4

REPRESENTATIONS AND WARRANTIES OF BUYER

 

As an inducement to Sellers to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer hereby represents and warrants to
Sellers as follows:

 

4.1           Organization of Buyer.  Buyer (i) is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Delaware, (ii) is duly qualified or authorized to conduct business and is in
good standing as a foreign corporation in all jurisdictions in which the
character or location of its properties owned or leased by it or the nature of
the business conducted by it requires such qualification or authorization,
except where the failure to be so qualified or authorized has not had and would
not have a material adverse effect on Buyer or Buyer’s ability to perform its
obligations hereunder or under the Buyer Transaction Documents, and (iii) has
the corporate power and corporate authority to own or lease and operate its
assets and to carry on its business in the manner that they were conducted
immediately prior to the date of this Agreement.

 

4.2           Authority of Buyer.  Buyer has the corporate power and corporate
authority to execute and deliver this Agreement and each of the Buyer
Transaction Documents and to perform its obligations thereunder.  The execution
and delivery of this Agreement and the Buyer Transaction Documents by Buyer and
the performance of its Obligations thereunder have been duly authorized and
approved by all necessary corporate action and do not require any further
authorization or consent of Buyer or its stockholders.  This Agreement has been
duly authorized,

 

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executed and delivered by Buyer and (assuming the valid authorization, execution
and delivery of this Agreement by Sellers) is the legal, valid and binding
agreement of Buyer enforceable in accordance with its terms subject to Debtor
Relief Laws, and each of the Buyer Transaction Documents has been duly
authorized by Buyer and upon execution and delivery by Buyer will be (assuming
the valid authorization, execution and delivery by each other party thereto) the
legal, valid and binding obligation of Buyer enforceable in accordance with its
terms, in each case subject to Debtor Relief Laws.

 

4.3           No Violation of Law and Agreements.  The execution and delivery by
Buyer of this Agreement and each Buyer Transaction Document, and the performance
by Buyer of its obligations hereunder or thereunder, does not and will not:

 

(a)           Violate any provision of the charter or bylaws of Buyer; or

 

(b)           (i) violate any provision of applicable Law, order, arbitration
award, judgment or decree relating to Buyer or to which Buyer is subject; or
(iii) require a registration, filing, application, notice, consent, approval,
order, qualification or waiver with, to or from any Governmental Authority,
except any violation that would not have a material adverse effect on Buyer’s
ability to perform its obligations hereunder or under the Buyer Transaction
Documents.

 

4.4           No Litigation or Regulatory Action.

 

(a)           There are no lawsuits, claims, suits, proceedings or
investigations pending or, to the knowledge of Buyer, threatened against Buyer
which if determined adversely to Buyer would reasonably be expected to have a
material adverse effect on Buyer’s ability to perform in a timely manner its
obligations hereunder or under the Buyer Transaction Documents; and

 

(b)           There is no lawsuit, claim or proceeding pending or, to the
knowledge of Buyer, threatened, that questions the legality or propriety of the
transactions contemplated by this Agreement or any of the Buyer Transaction
Documents.

 

4.5           No Brokers.  Buyer is not obligated to pay any fee or commission
to any broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.

 

4.6           Financial Ability.  Buyer has, and will have on each Closing Date,
the financial ability to consummate the transactions contemplated by this
Agreement and service and administer the Specified Portfolio Assets in
accordance with the terms thereof.

 

4.7           Accredited Investor.  Buyer is an accredited investor as defined
under the Securities Act of 1933, as amended, capable of evaluating the risks
and merits relating to the purchase of the Specified Portfolio Assets and is
capable of making an informed purchase in connection therewith.

 

SECTION 5

ACTION PRIOR TO EACH CLOSING DATE

 

Buyer and Sellers covenant and agree to take the following actions between the
date hereof and each Closing Date:

 

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5.1           Access to Information.  Subject to any and all applicable Laws and
prior to the Final Closing, Sellers shall permit Buyer and its representatives
to have reasonable access to the Assets and the Business, during regular
business hours and upon reasonable advance notice, to the extent Buyer shall
reasonably deem necessary or desirable; provided, however, that Sellers shall
not be required to violate any obligation of confidentiality to which Sellers
are subject in discharging their obligations pursuant to this Section 5.1 nor
shall the foregoing require Sellers to permit any inspection, or to disclose any
information, that would violate any attorney client privilege with respect to
privileged communications of Sellers; provided, further, that Buyer and its
representatives comply with the Confidentiality Agreement.  Buyer agrees that
such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operations of Sellers, and Buyer and its representatives
shall not speak to any of the employees of Sellers other than those involved in
the negotiation of the transactions contemplated by this Agreement without the
prior written consent of Sellers.

 

5.2           Consents of Third Parties; Governmental Approvals.

 

(a)           Buyer and Sellers will act diligently and reasonably to secure,
before the Final Closing Date, the Required Consents relating to the Assets to
be transferred hereunder; provided, however, that Sellers shall not be required
to incur (unless indemnified by Buyer) any financial or other obligation in
connection therewith (other than normal and customary transaction costs and
filing fees not otherwise required hereby to be incurred by Buyer).

 

(b)           During the period prior to each Closing Date, Buyer and Sellers
shall act diligently and reasonably, and shall cooperate with each other, to
secure any consents and approvals of any Governmental Authority required to be
obtained by them in order to permit the consummation of the transactions
contemplated by this Agreement, or to otherwise satisfy the conditions set forth
in Sections 7 and 8.

 

(c)           Subject to the terms and conditions of this Agreement, each party
shall use its commercially reasonable efforts to cause each Closing to occur
(including the use of reasonable efforts to execute any documents reasonably
requested by either party hereto and to satisfy such party’s conditions to
Closing set forth herein); provided, however, that no party shall have any
obligation to dispose of, hold separate or otherwise restrict its enjoyment of
any of its assets or properties.

 

(d)

 

(i)            In the event that any Required Consent with respect to any
Specified Financing and Lease Asset or Equity Asset (excluding interests subject
to the Option Agreement), or any right or benefit arising thereunder or
resulting therefrom, is obtained at any time following the Initial Closing Date
(whether before or (unless Buyer or Sellers have elected as provided below to
refuse equitable assignment) after the Final Closing Date), Sellers shall
deliver to Buyer the related Seller Transaction Documents with regard to such
Assets, and Buyer shall deliver to Sellers the related Buyer Transaction
Documents with regard to the corresponding Assumed Liabilities.  In the event
that any Required Consent with respect to any Specified Financing and Lease
Asset or Equity Asset (other than the Deferred Assets and interests subject to
the Option

 

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Agreement), or any right or benefit arising thereunder or resulting therefrom,
shall not have been obtained prior to the Final Closing Date, then as of the
Final Closing, unless either of Sellers or Buyer elect in writing to refuse such
equitable assignment of a particular Specified Financing and Lease Asset or
Equity Asset, this Agreement shall and hereby does, to the extent permitted by
Law, constitute full and equitable assignment by Sellers to Buyer of all of
right, title and interest of Sellers in and to, and all Assumed Liabilities of
Sellers under, each such Specified Financing and Lease Assets and Equity Asset,
and Buyer shall be deemed Sellers’ agent with full power of attorney for purpose
of completing, fulfilling and discharging all Assumed Liabilities thereunder
from and after the Final Closing Date under any such Specified Financing and
Lease Asset and Equity Asset.

 

(ii)           On the Final Closing Date, Sellers shall transfer to Buyer all
amounts received by Sellers after the Initial Closing Date through the Final
Closing Date with respect to any Specified Financing and Lease Asset or Equity
Asset that is equitably assigned to Buyer plus interest at the Applicable
Interest Rate on such amounts from the date of Seller’s receipt thereof until
such Specified Financing and Lease Asset or Equity Asset is equitably assigned
to Buyer.

 

(iii)          The parties shall take all necessary steps (including entry into
subcontracts for the performance thereof as permitted) and actions to provide
Buyer with all of the benefits of such Specified Financing and Lease Assets and
Equity Assets, and to relieve Sellers of the obligations for all Assumed
Liabilities thereunder to the same extent as if the desired assignment, transfer
or novation had been effected.  Buyer agrees to pay, perform and discharge, and
indemnify Sellers against and hold Sellers harmless from, all Assumed
Liabilities thereunder relating to such performance (other than failure of
Sellers to perform unless such failure to perform was at the written request of
Buyer) under such Specified Financing and Lease Assets or Equity Assets.

 

(iv)          During the eighteen (18) month period extending from the Final
Closing Date, Buyer may, but shall have no obligation to, unwind and terminate
any equitable assignment of a Specified Financing and Lease Asset or Equity
Asset by providing written notice to Sellers during such eighteen (18) month
period (an “Unwind of Equitable Assignment”), but only to the extent the
applicable Required Consent has not yet been obtained.  If Buyer elects to cause
an Unwind of Equitable Assignment, (A) the parties shall take all necessary
steps to provide Sellers with all of the benefits of such Asset, and to relieve
Buyer of all Assumed Liabilities thereunder, from and after the date Buyer
provides Sellers with written notice of its election to cause an Unwind of
Equitable Assignment, and (B) within ten (10) Business Days following receipt of
Buyer’s written notice to cause an Unwind of Equitable Assignment, Sellers shall
pay to Buyer the then Applicable NAV of such Asset and applicable Premium
Reduction Payment reduced to reflect the amortization pursuant to Buyer’s
accounting policies with respect thereto in effect on the date Buyer provides
Sellers with such notice.

 

(v)           In the event that either Sellers or Buyer elect in writing to
refuse an equitable assignment of a particular Specified Financing and Lease
Asset or Equity Asset on or prior to the Final Closing Date, Buyer shall have no
obligation to purchase such

 

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Specified Financing and Lease Asset or Equity Asset and such Specified Financing
and Lease Asset or Equity Asset shall be deemed a Serviced Asset.

 

(e)           [Intentionally Omitted].

 

(f)            Except as otherwise provided herein, the obligations of the
parties under this Section 5.2 shall not include any requirement of Sellers or
Buyer to expend money (other than normal legal and professional fees or filing
fees), commence or participate in any litigation or offer or grant any
accommodation (financial or otherwise) to any third party.

 

5.3           Operations Prior to each Closing Date.  During the period from the
date hereof until the relevant Closing Date, except as required by Law or as
required by this Agreement, Sellers shall:

 

(a)           Use commercially reasonable efforts to do the following:

 

(i)            operate and carry on the Business and service and administer the
Specified Portfolio Assets that have not been transferred to Buyer at a previous
Closing in the ordinary course of business consistent with past practice and in
compliance with applicable Laws;

 

(ii)           preserve substantially intact the Assets, and preserve their
present Business relationships, including with Obligors;

 

(iii)          service in all material respects the Specified Portfolio Assets
and protect Sellers’ rights and interests therein in the ordinary course of
business consistent with Sellers’ practices in effect on the date hereof,
including billing, collection, administration and servicing policies, including
policies relating to renewal of insurance;

 

(iv)          maintain the Asset Files in the ordinary course of business
consistent with Sellers’ practices in effect on the date hereof and cause such
Asset Files to be true and complete in all material respects; and

 

(v)           preserve and transfer to Buyer at the Initial Closing the backlog
for the Business.

 

(b)           Without limiting the provisions of Section 5.3(a), except as set
forth on Schedule 5.3, as expressly contemplated by this Agreement or with the
written approval of Buyer, between the date hereof and the relevant Closing
Date, Sellers shall not do any of the following:

 

(i)            Make any material change in the Business or its operations,
except such changes as may be required to comply with any applicable
Requirements of Law;

 

(ii)           Make any capital expenditure in relation to the Business or enter
into any contract or commitment therefor in excess of $500,000 in the aggregate,
except in the ordinary course of business;

 

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(iii)          Sell, lease (as lessor), transfer or otherwise dispose of any
Specified Portfolio Asset or Business Asset, mortgage or pledge or impose any
Encumbrance (other than Portfolio Asset Permitted Encumbrances or Business Asset
Permitted Encumbrances) on any of the Specified Portfolio Assets or Business
Assets;

 

(iv)          Institute any material increase in any, or adopt any new, profit
sharing, bonus, incentive, deferred compensation, insurance, pension,
retirement, medical, hospital, disability, severance, termination, welfare or
other employee benefit plan with respect to employees of the Business, other
than in the ordinary course of business as required on a non-discretionary basis
by any such existing plan, or by any employment agreements or by Requirements of
Law;

 

(v)           Make any material change in the compensation of employees of the
Business, other than increases in salary or wages made in accordance with normal
compensation practices and consistent with past practices of Sellers or
non-discretionary increases required by employment agreements or by any
Requirement of Law or as may be provided in the Additional Retention Agreements;

 

(vi)          With respect to the Business: acquire or purchase any properties
or assets (other than in the ordinary course of business consistent with past
practices including entering into Portfolio Contracts), merge or consolidate
with, or acquire all or substantially all of the assets of, or otherwise
acquire, any Person, or make any material investment in any Person;

 

(vii)         Modify any Specified Portfolio Asset from the form contained in
the applicable Asset File in any respect nor cancel, sell, or subordinate in
writing any Specified Portfolio Asset in whole or in part, nor release all or
any portion of the Portfolio Property relating to any Specified Financing and
Lease Asset from the lien in favor of the applicable Seller, except as required
by the terms of the relevant documents contained in the applicable Asset File;

 

(viii)        Directly or indirectly in any way extend or otherwise restructure
the payment schedule, payment terms or any other term or condition of any
Specified Financing and Lease Asset or make any advance, extension, novation,
modification or other accommodation to any Obligor;

 

(ix)           Solicit any Obligor in connection with any refunding or
refinancing of any Specified Portfolio Asset;

 

(x)            Take any action (or omit to take any action) that would breach
any of Sellers’ representations, warranties or covenants contained in this
Agreement or that would reasonably be likely to cause any of the conditions in
Section 7 to be materially delayed or fail to be satisfied;

 

(xi)           Except as set forth on Schedule 5.3, enter into any material
transaction that would be treated as a lease for federal Income Tax purposes
under which a Seller is a lessor and that, if entered into, would be a Portfolio
Asset (for the avoidance of doubt, for this purpose “Portfolio Asset” shall not
include any lease entered into in the

 

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course of the commercial aircraft financing business or the space and defense
financing business of Boeing Capital or any of the other Sellers or their
Affiliates); or

 

(xii)          Authorize, approve, agree or commit to do any of the foregoing.

 

5.4           [Intentionally Omitted]

 

5.5           Confidentiality.  The terms of the Confidentiality Agreement
(including, without limitation, those relating to Taxes) are hereby incorporated
by reference and shall continue in full force and effect until the Final Closing
Date, at which time such Confidentiality Agreement and the obligations of Buyer
under this Section 5.5 shall terminate.  If this Agreement is, for any reason,
terminated prior to the Initial Closing Date, the Confidentiality Agreement
shall continue in full force and effect in respect of such confidential
information in accordance with its terms.  In addition to the obligations under
the Confidentiality Agreement, Buyer and Sellers hereby agree that each of them
will not disclose, nor will they permit any of their Affiliates to disclose, to
any third party any confidential or proprietary information obtained from the
other in connection with this Agreement (including without limitation any
disclosure by Sellers or their Affiliates of any information relating to the
Assets purchased by Buyer; it being acknowledged that, except for such
confidential or proprietary information that is protected from disclosure by the
attorney-client privilege or work product doctrine, such confidential or
proprietary information does not include the (i) Tax structure or Tax treatment
of the transactions contemplated by this Agreement), except as required by
applicable Law, (ii) information which (A) is or becomes generally available to
the public other than as a result of a disclosure by the party bound hereunder
to keep such information confidential, (B) was or becomes available to the party
bound hereunder on a non-confidential basis from a source other than the other
party hereto (or its representatives), provided that, to the bound party’s
knowledge, such source is not prohibited from disclosing such information by a
contractual, legal or fiduciary obligation to other party, or (C) as required by
applicable Law.

 

SECTION 6

ADDITIONAL AGREEMENTS

 

6.1           Use of Names.

 

(a)           Nothing herein shall be construed as granting Buyer a license in
or to any trademarks, service marks or trade names belonging to Sellers or their
respective Affiliates (collectively, the “Marks”).  Notwithstanding anything to
the contrary in this Agreement, Buyer may not use the Marks, or any portion
thereof, or any mark confusingly similar thereto, except as set forth in this
Section 6.1.  If any Marks remain on Assets transferred to Buyer at any Closing,
Buyer will have the limited permission to use such Marks for so long as they
remain on such Assets; provided, however, Buyer will take commercially
reasonable steps to promptly remove such Marks (to the extent removable, it
being acknowledged that Marks are not removable from paper, documents or
records) within three (3) months from the Initial Closing Date.

 

(b)           Buyer acknowledges Sellers’ (or their respective Affiliates’)
rights in and title to the Marks and agrees that Buyer shall not acquire nor
claim any title to the Marks adverse to Sellers (or their respective Affiliates)
by virtue of this Agreement, the parties intending that all

 

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use of the Marks by Buyer permitted hereunder shall inure to the exclusive
benefit of Sellers or their respective Affiliates.

 

(c)           In the event Buyer or any Affiliate of Buyer violates any of its
obligations under this Section 6.1, Sellers may proceed against it in Law or in
equity for such damages or other relief as a court may deem appropriate.  Buyer
acknowledges that a violation of this Section 6.1 may cause Sellers irreparable
harm which may not be adequately compensated for by money damages.  Buyer
therefore agrees that in the event of any actual or threatened violation of this
Section 6.1, Sellers shall be entitled, in addition to other remedies that it
may have, to a temporary restraining order and to preliminary and final
injunctive relief against Buyer or such Affiliate of Buyer to prevent any
violations of this Section 6.1.

 

6.2           Employees; Employee Benefits.

 

(a)           Hiring of Employees.  Buyer shall use commercially reasonable
efforts to hire as of the Initial Closing Date no less than eight (8) employees
of the Business that perform asset management and collection functions, and may
hire any other employees of the Business as Buyer deems necessary, all on at
least the same base salary in effect immediately prior to the Initial Closing
Date and with employee benefits and employee compensation programs that are
substantially similar in the aggregate to those provided by Buyer to its
similarly-situated employees. Buyer has delivered to Sellers a written
description of such employee benefits and aggregate data on employee
compensation programs.  With respect to each such Business employee who accepts
Buyer’s offer of employment (a “Transferred Employee”), Buyer shall (i) maintain
for twelve (12) months after the Initial Closing Date at least the same base
salary as in effect immediately prior to the Initial Closing Date and employee
benefits and employee compensation programs provided by Buyer to its
similarly-situated employees (including severance benefits), and (ii) subject to
the approval of the Buyer’s Pension Committee which approval shall not be
unreasonably withheld (and Buyer hereby agrees to cause the Pension Committee to
consider granting such approval at its next meeting and that, promptly after
such meeting, Buyer shall notify Sellers whether such approval has been
granted), credit the Transferred Employees’ entire periods of service prior to
the Initial Closing for purposes of determining eligibility, vesting, and
benefit entitlement (but not benefit accruals under any pension plan) under
severance, vacation, pension benefits, retiree medical and life insurance
benefits, and all other compensation and benefit plans, programs and policies
maintained by Buyer for the benefit of such employees after the Initial
Closing.  Notwithstanding the foregoing, Buyer shall not be prohibited by this
Section 6.2(a) from terminating the employment of any Transferred Employee
following the Initial Closing Date, subject, however to Buyer’s compliance with
all applicable Requirements of Law or agreements to which Buyer is a party or by
which it is bound.  Employees of the Business who are on approved leaves of
absence at the time they accept an offer of employment from Buyer shall become
Transferred Employees as of the date they return from such leave of absence and
accept employment with Buyer.

 

(b)           Health Coverages; Workers’ Compensation.  Without limiting the
scope of Section 6.2(a), Buyer shall cause each Transferred Employee (and his or
her “eligible dependents”, as defined in the Benefit Plans) to be covered
following the Initial Closing by a group health plan that provides health
benefits (within the meaning of Section 5000(b)(1) of the Code) that (i) comply
with the provisions of Section 6.2(a) with respect to Transferred

 

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Employees, (ii) does not limit or exclude coverage on the basis of any
pre-existing condition of such Transferred Employee or dependent (other than any
limitation already in effect under Sellers’ group health plan), and (iii)
provides each Transferred Employee full credit, for the year during which the
Initial Closing occurs, for any deductible already incurred by the Transferred
Employee under Sellers’ group health plan and for any other out-of-pocket
expenses that count against any maximum out-of-pocket expense provision of
Sellers’ or Buyer’s group health plan or medical plan.  In addition, Buyer shall
assume responsibility for all amounts payable by reason of, or in connection
with, any and all medical and dental claims incurred by any Transferred Employee
or his or her eligible dependents after the Initial Closing, and shall assume
responsibility for workers’ compensation claims (including medical, disability,
permanency and expense claims) incurred by any Transferred Employee or his or
her eligible dependents after the Initial Closing, and shall take all necessary
and appropriate action to adopt or designate a workers’ compensation program to
cover Transferred Employees at least comparable to the one currently provided by
Sellers with respect to the Transferred Employees.  For purposes of the
foregoing, a medical/dental claim shall be considered incurred when the medical
services are rendered or medical supplies are provided, and not when the
condition arose.

 

(c)           [Intentionally Omitted].

 

(d)           [Intentionally Omitted].

 

(e)           Accrued Vacation.  Sellers shall pay the Transferred Employees all
accrued vacation upon such Transferred Employees’ terminations of employment
with Sellers.

 

(f)            Savings Plan.  Without limiting the scope of Section 6.2(a), as
of the Initial Closing, Buyer shall make available, and maintain for a period of
a least twelve (12) months, a tax-qualified defined contribution plan with a
cash or deferred feature (the “Buyer’s Savings Plan”) for the benefit of each
Transferred Employee who was eligible to participate in a tax-qualified defined
contribution plan maintained by Sellers with a cash or deferred feature (a
“Sellers’ Savings Plan”).  As soon as practicable after the Initial Closing,
Sellers’ Savings Plan shall make distributions available to Transferred
Employees as permitted by Section 401(k)(2) of the Code, and Buyer’s Savings
Plan shall accept any such distribution as a direct rollover distribution if so
directed by the Transferred Employee.  Sellers shall make any contributions to
Sellers’ Savings Plan that was due and payable by Sellers on or before the
Initial Closing Date.

 

(g)           Flexible Spending Accounts.  Without limiting the scope of
Section 6.2(a), effective as of the Initial Closing, Buyer shall establish
flexible spending accounts for health and dependent care expenses, and Sellers
shall spin-off and Buyer shall assume the health and dependent care account
balances (and related assets and liabilities) under Sellers’ flexible benefits
plan with respect to Transferred Employees to Buyer’s flexible benefit plan.  As
soon as practicable after the Initial Closing, (i) Sellers shall pay to Buyer in
cash the amount, if any, by which aggregate contributions made to accounts under
Sellers’ flexible benefits plan exceeded the aggregate benefits provided as of
the Initial Closing, or (ii) Buyer shall pay to Sellers in cash the amount, if
any, by which aggregate benefits provided from accounts under Sellers’ flexible
benefits plan exceeded the aggregate contributions made as of the Initial
Closing Date.  Subject to applicable Law, including, but not limited to, the
Health Insurance Portability and Accountability Act of 1996, Sellers will make
available to Buyer, not less than five (5) calendar

 

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days prior to the Initial Closing, a list of Transferred Employees who are
participating in or have participated in the plans described in this
subsection (g), together with the elections made prior to the Initial Closing
with respect to such accounts through the Initial Closing.

 

(h)           Sick Leave.  Sellers shall pay Transferred Employees accrued sick
leave in accordance with, and subject to, Sellers’ sick leave policy.

 

(i)            WARN Act.  Buyer agrees to provide any required notice under the
Worker Adjustment and Retraining Notification Act, as amended (the “WARN Act”),
and any similar state or other applicable law, and to otherwise comply with any
such applicable law with respect to any “plant closing” or “mass layoff” (as
defined in the WARN Act) or group termination or similar event affecting
employees of the Business (including as a result of the consummation of the
transactions contemplated by this Agreement) and occurring after the Initial
Closing Date.  Sellers shall provide any such notice with respect to any group
termination or similar event occurring on or before the Initial Closing Date.

 

(j)            No Third Party Beneficiary.  Nothing herein is intended to, and
shall not be construed to, create any third party beneficiary rights of any kind
or nature, including the right of any Transferred Employee or other individual
to seek to enforce any right to compensation, benefits, or any other right or
privilege of employment with Sellers or Buyer.

 

6.3           Insurance.  Sellers will keep (or cause to be kept) insurance
policies currently maintained by Sellers relating to the Assets and current or
former employees, or suitable replacements therefor, in full force and effect
through the Final Closing Date, except that Sellers may reduce, terminate, amend
or otherwise modify such policies to reflect that certain Assets and Assumed
Liabilities have been transferred at a Closing; provided, however, that with
respect to insurance maintained by Obligors, Sellers shall not permit any
reduction, termination, amendment or modification thereof except as required by
any Specified Portfolio Contract.

 

6.4           Federal Mogul Schedule.  In the event of any default, nonpayment
or raising of any defense to enforcement by the Obligor with respect to the
Federal Mogul Schedule, Buyer shall have the option to require Sellers by
written notice within thirty (30) days of such event to purchase the Federal
Mogul Schedule for the Applicable NAV as of the date of the consummation of such
purchase.

 

6.5           Unapplied Cash.  Sellers will use commercially reasonable efforts
to reconcile and apply all cash that is reflected on the general ledger of any
of them as of the Initial Closing Date.

 

6.6           Insurance Matters.  Sellers have disclosed on Schedule 3.2(g)(v)
that certain Obligors are not in compliance with the insurance requirements of
their respective Specified Financing and Lease Assets (the “Insurance
Deficiencies”).  Sellers shall use commercially reasonable efforts to cause each
of such Obligors to cure the Insurance Deficiencies prior to the time that
Services are no longer being provided under the Transition Services Agreement. 
With respect to each Insurance Deficiency, until Sellers certify to Buyer in
writing that such Insurance Deficiency has been cured, Sellers shall indemnify
and hold harmless each Buyer Group

 

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Member against all Indemnifiable Losses arising out of such Insurance Deficiency
without reference to any of the monetary limitations or time limitations set
forth in Schedule 9.

 

6.7           [Intentionally Omitted]

 

6.8           [Intentionally Omitted].

 

6.9           Sellers’ Covenant.  Sellers covenant and agree with Buyer as
follows, it being understood and agreed that each of the following covenants and
agreements shall survive all Closings:

 

(a)           Notice to Obligors.  Sellers shall cooperate with Buyer in
notifying the Obligors under the Purchased Portfolio Assets of the assignment of
such Purchased Portfolio Assets from Sellers to Buyer, provided, however, that
such notification shall not apply in those instances when a Required Consent is
to be obtained prior to the sale of any Specified Portfolio Asset to Buyer. 
Such notification shall be by letter in substantially the form attached hereto
as Exhibit G or as may otherwise be mutually agreed upon by the applicable
Seller and Buyer.

 

(b)           Closing Date Data Tape.  After the Initial Closing (but in no
event later than July 31, 2004), Sellers shall deliver to Buyer the Closing Date
Data Tape.  All of the Portfolio Information and other data to be set forth in
the Closing Date Data Tape shall be true, correct, complete and accurate in all
respects as of 11:59 p.m. PDT on May 31, 2004; provided, however, the parties
acknowledge that the Closing Date Data Tape will include certain interests that
are subject to the Option Agreement.

 

6.10         Buyer’s Covenant.  Buyer covenants and agrees with Sellers as
follows, it being understood that each of the following covenants shall survive
the Closing:

 

(a)           [Intentionally Omitted].

 

(b)           [Intentionally Omitted].

 

(c)           [Intentionally Omitted].

 

(d)           Separate Portfolio.  Buyer shall use commercially reasonable
efforts to maintain its assets and liabilities in such a manner that it is not
costly or difficult to ascertain or otherwise identify the CFS Portfolio and any
and all liabilities associated with the CFS Portfolio from Buyer’s other assets
and liabilities.  Buyer shall maintain separate CFS Portfolio Records with
respect to the CFS Portfolio and such CFS Portfolio Records shall be used by
Buyer in the preparation of the Applicable NAV Statements, the Gain/Loss
Statements and the reports described in Schedule 1.9(a)(iv).

 

(e)           [Intentionally Omitted].

 

(f)            Audit and Access Rights.

 

(i)            Buyer acknowledges that, in addition to their rights (and the
matters) described in Section 1.9(a)(v), Sellers shall have the right to perform
periodic

 

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audits (not to exceed one (1) in any calendar year) and examinations with
respect to the CFS Portfolio and the CFS Portfolio Records, for purposes of
verifying compliance with the covenants made in Section 1.9 and Schedule 10, and
Buyer agrees that in connection with such audits and examinations upon
reasonable (but no less than five (5) Business Days’) prior notice to Buyer, any
Seller or its authorized representatives will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the CFS
Portfolio Records and any and all other information relating to the CFS
Portfolio in the possession or under the control of Buyer and/or its
Affiliates.  Buyer also shall make available to Sellers a knowledgeable
financial, accounting and/or portfolio management officer, as reasonably
requested by Sellers, for the purpose of answering questions in respect of the
CFS Portfolio, or any applicable part thereof.  Sellers shall pay all
out-of-pocket costs and expenses incurred by Sellers in connection with Sellers’
activities pursuant to this Section 6.10(f) (“Audit Costs”).

 

(ii)           Buyer further acknowledges and agrees that (A) Buyer shall
reasonably cooperate with Sellers to enable Sellers to meet and confer with
Buyer’s Accountants in connection with the report described in Section 1.9(a)(v)
above, and (B) in connection with any such meeting, Buyer shall reasonably
cooperate with Sellers to enable Sellers to be permitted to review Buyer’s
Accountants’ work papers used to prepare the report identified in
Section 1.9(a)(v)).

 

(g)           CFS Portfolio Administration; Modification of Assets.  Buyer shall
administer, manage and otherwise conduct its operations with respect to the CFS
Portfolio in substantially the same manner as Buyer administers, manages and
conducts its operations with respect to similar assets (e.g., loans, leases and
other similar types of financing assets (and the property encumbered thereby or
subject thereto)) owned or serviced by Buyer that are not part of the CFS
Portfolio.

 

(h)           Payments Received by Buyer – Excluded Assets.  All amounts
received by Buyer with respect to any of the Excluded Assets (including with
respect to the Zero Balance Financing and Lease Assets and related Portfolio
Property), shall be forwarded by Buyer to Boeing Capital, on behalf of the
applicable Seller, within a reasonable time, provided, however, that payments
received by Buyer with respect to any Serviced Asset shall be handled in
accordance with the terms of the Servicing Agreement.  All amounts received by
Sellers with respect to any of the Assets on or after the Closing Date on which
such Asset was sold to Buyer shall be forwarded by Sellers to Buyer within a
reasonable time, provided, however, that payments received by Sellers with
respect to any Asset subject to Transition Services Agreement pursuant to the
Transition Services Agreement shall be handled in accordance therewith.

 

(i)            [Intentionally Omitted].

 

(j)            [Intentionally Omitted].

 

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SECTION 7

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

 

7.1           Conditions to the Initial Closing.  The obligations of Buyer to
consummate the Initial Closing shall, at the option of Buyer, be subject to the
satisfaction or written waiver in whole or in part, on or prior to the Initial
Closing Date, of the following conditions:

 

(a)           No Misrepresentation or Breach of Covenants and Warranties.  The
representations and warranties of Sellers made in this Agreement and the Seller
Transaction Documents shall be true and correct:  (i) in all material respects
(other than such representations and warranties which are qualified by
materiality, Material Adverse Effect or material adverse effect which shall be
true and correct in all respects) as of the date hereof; and (ii) on and as of
the Initial Closing Date, as though made on such date, (A) except for those
representations and warranties which refer to facts existing at a specific date,
and (B) except to the extent any breaches of such representations and warranties
would not in the aggregate have a Material Adverse Effect or a material adverse
effect on the transactions contemplated hereby.  Sellers shall have performed or
complied in all material respects with all obligations and covenants required by
this Agreement to be performed or complied with by Sellers on or before the
Initial Closing Date; there shall not have been any Material Adverse Effect from
the date hereof to the Initial Closing Date; and Sellers shall have delivered to
Buyer a certificate dated the Initial Closing Date and signed by an authorized
representative of each Seller confirming each of the foregoing.

 

(b)           Necessary Governmental Approvals.  All approvals and actions of or
by all Governmental Authorities which are necessary to consummate the
transactions contemplated by the Initial Closing shall have been obtained or
taken place (other than any such approvals and actions which are contemplated by
Section 7.3(b) for less than all of the Assets to be transferred at the Initial
Closing).

 

(c)           Deliveries by Sellers.  Sellers shall have delivered to Buyer at
the Initial Closing all the items specified to be delivered by Sellers in
Section 2.3(a).

 

(d)           No Injunction.  There shall not be in effect on the Initial
Closing Date any Court Order restraining or enjoining the carrying out of this
Agreement or the consummation of the transactions contemplated by the Initial
Closing.

 

7.2           Conditions to each Subsequent Closing.  The obligations of Buyer
to consummate each Subsequent Closing shall, at the option of Buyer, be subject
to the satisfaction or written waiver in whole or in part, on or prior to such
the date of such Subsequent Closing, of the following conditions:

 

(a)           No Misrepresentation or Breach of Certain Covenants and
Warranties.  The representations and warranties of Sellers set forth in Sections
3.1(a), 3.1(b), 3.1(d), 3.1(e)(iii), 3.1(j), 3.1(m), 3.1(r), 3.2, 3.3(a),
3.3(b), 3.3(c), 3.3(d) and 3.3(e)shall be true and correct on and as of the date
of such Subsequent Closing, as though made on such date, (i) except for those
representations and warranties which refer to facts existing at a specific date,
(ii) except to the extent any breaches of such representations and warranties
would not in the aggregate

 

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have a Material Adverse Effect or a material adverse effect on the transactions
contemplated hereby, (iii) except to the extent any such representations and
warranties relate to or are made for any Assets not transferred on the date of
such Subsequent Closing and (iv) except to the extent any such representations
and warranties relate to or are made with respect to any Sellers not
transferring Assets on the date of such Subsequent Closing.  Sellers shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by Sellers
on or before the date of such Subsequent Closing; there shall not have been any
Material Adverse Effect from the date of the immediately prior Closing Date to
the date of such Subsequent Closing; and Sellers shall have delivered to Buyer a
certificate dated the date of such Subsequent Closing and signed by an
authorized representative of each Seller confirming each of the foregoing.

 

(b)           Necessary Governmental Approvals.  All approvals and actions of or
by all Governmental Authorities which are necessary to consummate the
transactions contemplated by such Subsequent Closing shall have been obtained or
taken place (other than any such approvals and actions which are contemplated by
Section 7.3(b) for less than all of the Assets to be transferred at such
Subsequent Closing).

 

(c)           Deliveries by Sellers.  Sellers shall have delivered to Buyer at
such Subsequent Closing all the items specified to be delivered by Sellers in
Section 2.3(b).

 

(d)           No Injunction.  There shall not be in effect on the Closing Date
any Court Order restraining or enjoining the carrying out of this Agreement or
the consummation of the transactions contemplated by such Subsequent Closing.

 

7.3           Conditions to Transfer of each Asset.  The obligations of Buyer to
consummate the purchase of any particular Asset at any Closing shall, at the
option of Buyer, be subject to the satisfaction or written waiver in whole or in
part, on or prior to the date of such Closing, of the following conditions:

 

(a)           All Required Consents for that particular Asset shall have been
obtained; and

 

(b)           All approvals and actions of or by all Governmental Authorities
which are necessary for Buyer’s consummation of the purchase of that particular
Asset shall have been obtained or taken place.

 

Notwithstanding the failure of any one or more of the foregoing conditions in
this Section 7, Buyer may proceed with a Closing without satisfaction, in whole
or in part, of any one or more of such conditions with written waiver of such
conditions.

 

7.4           Conditions Relating to Material Adverse Effect.

 

(a)           To the extent that at or prior to any Closing Sellers deliver to
Buyer a written notice (a “Post-Signing MAE Notice”) specifying in reasonable
detail either (i) a Material Adverse Effect or (ii) breach of a representation
or warranty of Sellers as of such Closing having a Material Adverse Effect or
material adverse effect on the transactions contemplated hereby, and which
Material Adverse Effect described in clause (i) or breach described in clause
(ii) did

 

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not exist or occur on or before the date of this Agreement, and Buyer
nevertheless proceeds with such Closing following receipt of such notice, Buyer
shall be deemed to have waived for all purposes any rights or remedies it may
have against Sellers (including any rights or remedies under Section 9.1) by
reason of the occurrence of such events to the extent described in such
Post-Signing MAE Notice.

 

(b)           To the extent that at or prior to any Closing Sellers deliver to
Buyer a written notice specifying in reasonable detail either (i) a Material
Adverse Effect or (ii) breach of a representation or warranty of Sellers as of
such Closing having a Material Adverse Effect or material adverse effect on the
transactions contemplated hereby, and which Material Adverse Effect described in
clause (i) or breach described in clause (ii) existed or occurred on or before
the date of this Agreement, Sellers shall have a period of ninety (90) days from
delivery of such notice to cure such Material Adverse Effect or breach to the
extent such Material Adverse Effect or breach is curable.  Notwithstanding
anything to the contrary herein, during such 90-day cure period, Sellers shall
have no obligation to enter into any Closing.

 

SECTION 8

CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS

 

8.1           Conditions to the Initial Closing.  The obligations of Sellers to
consummate the Initial Closing shall, at the option of Sellers, be subject to
the satisfaction or written waiver in whole or in part, on or prior to the
Initial Closing Date, of the following conditions:

 

(a)           No Misrepresentation or Breach of Covenants and Warranties.  The
representations and warranties of Buyer made in this Agreement and the Buyer
Transaction Documents shall be true and correct:  (i) in all material respects
(other than such representations and warranties which are qualified by
materiality, Material Adverse Effect or material adverse effect which shall be
true and correct in all respects) as of the date hereof; and (ii) on and as of
the Initial Closing Date, as though made on such date, (A) except for those
representations and warranties which refer to facts existing at a specific date
and (C) except to the extent any breaches of such representations and warranties
of Buyer would not in the aggregate have a material adverse effect on the
transactions contemplated hereby.  Buyer shall have performed or complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by Buyer on or before the Initial Closing Date;
and Buyer shall have delivered to Sellers a certificate dated the Initial
Closing Date and signed by an authorized representative of Buyer confirming the
foregoing.

 

(b)           Necessary Governmental Approvals.  All approvals and actions of or
by all Governmental Authorities which are necessary to consummate the
transactions contemplated by the Initial Closing shall have been obtained or
taken place (other than any such approvals and actions which are contemplated by
Section 8.3(b) for less than all of the Assets to be transferred at the Initial
Closing).

 

(c)           Payment of Purchase Price.  Buyer shall have paid to Sellers the
portion of the Base Purchase Price for the Assets to be transferred at the
Initial Closing and the Purchase Premium, in each case, as required to be paid
pursuant to Section 1.3.

 

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(d)           Delivery by Buyer.  Buyer shall have delivered to Sellers at the
Initial Closing all the items specified to be delivered by Buyer in
Section 2.2(a).

 

(e)           No Injunction.  There shall not be in effect on the Initial
Closing Date any Court Order restraining or enjoining the carrying out of this
Agreement or the consummation of the transactions contemplated by this
Agreement.

 

8.2           Conditions to each Subsequent Closing.  The obligations of Sellers
to consummate each Subsequent Closing shall, at the option of Sellers, be
subject to the satisfaction or written waiver in whole or in part, on or prior
to such the date of such Subsequent Closing, of the following conditions:

 

(a)           No Misrepresentation or Breach of Certain Covenants and
Warranties.  The representations and warranties of Buyer set forth in Sections
4.1, 4.2, 4.3, 4.4, 4.5, 4.6 and  4.7 shall be true and correct on and as of the
date of such Subsequent Closing, as though made on such date, (i) except for
those representations and warranties which refer to facts existing at a specific
date and (ii) except to the extent any breaches of such representations and
warranties would not in the aggregate have a material adverse effect on the
transactions contemplated hereby.  Buyer shall have performed or complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by Buyer on or before the date of such
Subsequent Closing; and Buyer shall have delivered to Sellers a certificate
dated the date of such Subsequent Closing and signed by an authorized
representative of Buyer confirming the foregoing.

 

(b)           Necessary Governmental Approvals.  All approvals and actions of or
by all Governmental Authorities which are necessary to consummate the
transactions contemplated by such Subsequent Closing shall have been obtained or
taken place (other than any such approvals and actions which are contemplated by
Section 8.3(b) for less than all of the Assets to be transferred at such
Subsequent Closing).

 

(c)           Payment of Purchase Price.  Buyer shall have paid to Sellers the
portion of the Base Purchase Price for the Assets to be transferred at such
Subsequent Closing that is required to be paid pursuant to Section 1.3.

 

(d)           Deliveries by Buyer.  Buyer shall have delivered to Buyer at such
Subsequent Closing all the items specified to be delivered by Sellers in
Section 2.2(b).

 

(e)           No Injunction.  There shall not be in effect on the date of such
Subsequent Closing any Court Order restraining or enjoining the carrying out of
this Agreement or the consummation of the transactions contemplated to occur at
such Subsequent Closing.

 

8.3           Conditions to Transfer of Each Asset.  The obligations of Sellers
to consummate the sale of any particular Asset at any Closing shall, at the
option of Sellers, be subject to the satisfaction or written waiver in whole or
in part, on or prior to the date of such Closing, of the following conditions:

 

(a)           All Required Consents for that particular Asset shall have been
obtained.

 

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(b)           All approvals and actions of or by all Governmental Authorities
which are necessary for Sellers’ consummation of the sale of that particular
Asset shall have been obtained or taken place.

 

SECTION 9

INDEMNIFICATION

 

Sellers and Buyer hereby agree to the covenants and agreements set forth on
Schedule 9 hereto.  Reference in this Agreement or in any of the Schedules or
Exhibits hereto to any of Sections 9.1 through 9.8 shall be deemed to be
references to the corresponding Sections of Schedule 9 hereto.  Reference in
this Agreement or in any of the Schedules or Exhibits hereto to Section 9 shall
be deemed to be references to Schedule 9 hereto.

 

SECTION 10

SPECIAL WARRANTY

 

Sellers and Buyer hereby agree to the covenants and agreements set forth on
Schedule 10 hereto.  Reference in this Agreement or in any of the Schedules or
Exhibits hereto to any of Sections 10.1 through 10.4 shall be deemed to be
references to the corresponding Sections of Schedule 10 hereto.  Reference in
this Agreement or in any of the Schedules or Exhibits hereto to Section 10 shall
be deemed to be references to Schedule 10 hereto.

 

SECTION 11

TERMINATION

 

11.1         Termination.

 

(a)           Notwithstanding anything contrary in this Agreement, this
Agreement may be terminated at any time prior to the Initial Closing Date:

 

(i)            by Sellers, by giving notice to Buyer on or after ninety (90)
days after the date of this Agreement, if any of the conditions set forth in
Section 8.1 is not satisfied or waived by such date, unless such satisfaction
has been frustrated or made impossible by any act or failure to act by Sellers;

 

(ii)           by Buyer, by giving notice to Sellers on or after ninety (90)
days after the date of this Agreement, if any of the conditions set forth in
Section 7.1 is not satisfied or waived by such date, unless such satisfaction
has been frustrated or made impossible by any act or failure to act by Buyer;

 

(iii)          by Sellers by giving notice to Buyer at any time, if Buyer has
breached any material representation, warranty, covenant or agreement contained
in this Agreement (except to the extent any breaches of such representations and
warranties would not in the aggregate have a Material Adverse Effect or a
material adverse effect on Buyer’s ability to perform its obligations hereunder
or under the Buyer Transaction Documents) and such breach has not been cured
within thirty (30) calendar days after Sellers’ notice to Buyer of such breach
(“Sellers’ Breach Notice”) or, if cure is not

 

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possible within thirty (30) calendar days, if cure has not been commenced and is
not being diligently pursued within thirty (30) calendar days after Sellers’
Breach Notice;

 

(iv)          by Buyer, by giving notice to Sellers at any time, if Sellers have
breached any material representation, warranty, covenant or agreement contained
in this Agreement (except to the extent any breaches of such representations and
warranties would not in the aggregate have a Material Adverse Effect or a
material adverse effect on the transactions contemplated hereby) and such breach
has not been cured within thirty (30) calendar days after Buyer’s notice to
Sellers of such breach (“Buyer’s Breach Notice”) or, if cure is not possible
within thirty (30) calendar days, if cure has not been commenced and is not
being diligently pursued within thirty (30) calendar days after Buyer’s Breach
Notice;

 

(v)           by Buyer, by giving notice to Sellers within ten (10) Business
Days of receipt of a Post-Signing MAE Notice from Sellers; or

 

(vi)          by mutual written agreement of Sellers and Buyer.

 

(b)           In the event of termination of this Agreement pursuant to
Section 11.1(a) above:

 

(i)            Each party shall return to the other party or destroy all
documents concerning confidential information of the other party (and, upon
request, certify as to the return or destruction thereof);

 

(ii)           No party shall have any liability or further obligation to the
other party hereunder, except for obligations of confidentiality and non-use
with respect to the other party’s confidential information, which shall survive
the termination of this Agreement and no party shall be entitled to any monetary
damages or injunctive relief (including specific performance) as a result of
such termination, or any indemnification under Section 9 or 10, except as
permitted in Section 11.1(b)(iv);

 

(iii)          The provisions of Sections 5.5, 11.1(b), 12.2, 12.3, 12.4, 12.6,
12.7, 12.10, 12.13, 12.14, 12.15 and 12.21 hereof shall remain in full force and
effect; and

 

(iv)          In no event shall any termination of this Agreement limit or
restrict the rights and remedies of any party hereto against any other party
which has knowingly, willfully or intentionally breached any of the agreements
or other provisions of this Agreement prior to termination thereof.

 

SECTION 12

GENERAL PROVISIONS

 

12.1         Survival of Covenants, Representations and Warranties.  No covenant
or agreement contained herein to be performed prior to a Closing Date shall
survive that Closing Date unless otherwise expressly agreed by the parties and
any covenant and agreement to be performed after that Closing Date shall survive
the Closing occurring on that Closing Date until

 

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the expiration of the applicable statute of limitations, except as otherwise
provided herein.  Each representation and warranty contained herein and in the
Seller Transaction Documents shall survive the Initial Closing until, and will
expire and be of no force and effect, on the conclusion of the applicable time
periods specified in, and otherwise in accordance with, Schedule 9.  THEREAFTER,
THE PARTIES HERETO SHALL, BY VIRTUE HEREOF, BE RELEASED FROM ANY LIABILITY
WHATSOEVER UNDER THIS AGREEMENT, INCLUDING ANY INDEMNIFICATION OBLIGATION UNDER
SCHEDULE 9, WITH RESPECT TO ANY SUCH REPRESENTATION OR WARRANTY.

 

12.2         No Public Announcement.  From the date of this Agreement, neither
Buyer nor Sellers shall, without the written approval of the other (such
approval not to be unreasonably withheld or delayed), make any press release or
other public announcement concerning the transactions contemplated by this
Agreement, except as and to the extent that any such party shall be so obligated
by applicable Requirements of Law, in which case such party shall use reasonable
efforts to coordinate with the other party with respect to the timing, form and
content of such release or announcement and the parties shall use their
reasonable efforts to cause a mutually agreeable release or announcement to be
issued; provided, however, that the foregoing shall not preclude communications
or disclosures necessary to implement the provisions of this Agreement or with
respect to the reporting and list maintenance provisions of Temp. Treas. Reg.
§ 1.6011-4 and Treas. Reg. § 301.6112-1, any successor thereto and any
comparable provision of state or local tax Law.

 

12.3         Notices.  All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed given or delivered (a) when
delivered personally against written receipt, (b) if sent by registered or
certified mail, return receipt requested, postage prepaid, when received, (c)
when received by facsimile transmission if confirmed by the other means
described in clause (a), or (b), and (d) when delivered by a nationally
recognized overnight courier service, prepaid, and shall be addressed as
follows:

 

If to Sellers, to:

 

Boeing Capital Corporation

500 Naches Avenue SW

3rd Floor

Renton, WA 98055

Attention:  Chief Financial Officer

Facsimile:  (425) 393-1002

 

with a copy to:

 

Sheppard, Mullin, Richter & Hampton LLP

333 South Hope Street, 48th Floor

Los Angeles, CA  90071

Attention:  Lawrence M. Braun, Esq.

Facsimile:  (213) 620-1398

 

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If to Parent, to:

 

The Boeing Company

Corporate Headquarters

M/C 5003-1001

100 North Riverside

Chicago, IL  60606-1596

Attention:  Corporate Secretary

Facsimile:  (312) 544-2829

 

with a copy to:

 

Sheppard, Mullin, Richter & Hampton LLP

 

333 South Hope Street, 48th Floor

Los Angeles, CA  90071

Attention:  Lawrence M. Braun, Esq.

Facsimile:  (213) 620-1398

 

If to Buyer, to:

 

GE Commercial Finance

260 Long Ridge Road

Stamford, CT  06927

Attention:  Senior Strategic Transactions Counsel

Facsimile:  (203) 602-9305

 

with a copy to:

 

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, New York  10166-0193

Attention:  Steven R. Shoemate, Esq.

Facsimile:  (212) 351-4035

 

or to such other address as such party may indicate by a written notice
delivered to the other parties hereto.

 

12.4         Successors and Assigns.  The rights of a party under this Agreement
shall not be assignable by such party without the written consent of the other
parties hereto, provided that (i) Buyer may designate any one or more of its
Affiliates to take title to and/or accept assignment or transfer of any one or
more Specified Portfolio Assets from Sellers, (ii) Buyer may assign its rights
hereunder to one or more of its Affiliates and (iii) Buyer may assign its rights
hereunder to any Person in connection with any securitization or assignment of
the Financing and Lease Assets.  Notwithstanding the foregoing, no assignment
otherwise permitted hereunder shall, without the written consent of Sellers,
relieve Buyer from any of its Liabilities hereunder. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their successors
and permitted assigns.  Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any Person, other than the parties
and successors and assigns

 

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permitted by this Section 12.4, and the Indemnified Parties under Schedule 9,
any right, remedy or claim under or by reason of this Agreement.

 

12.5         Records after Closing.

 

(a)           Access.  During the period from the Initial Closing Date until
three years following the last to occur of the Termination Date of the last
remaining CFS Portfolio Financing and Lease Asset or the sale or disposition of
the last remaining Equity Asset or the dissolution or expiration of the term (or
similar event) of the entity in which the last remaining Equity Asset
represented an ownership interest, Sellers and their representatives shall have
reasonable access to all of the books and records of the Business (including the
Asset Files), to the extent that such access may reasonably be required by
Sellers in connection with matters relating to or affected by the operations of
the Business prior to the Initial Closing Date, including Excluded Liabilities
and/or Excluded Assets, the preparation of Sellers’ financial reports or Tax
returns, any Tax audits, the defense or prosecution of litigation (including
arbitration or mediation), and any other reasonable need of Sellers to consult
such books and records.  Such access shall be afforded by Buyer upon receipt of
reasonable advance notice and during normal business hours in a manner so as to
not unreasonably interfere with the conduct of Buyer’s business.  Sellers shall
be exclusively responsible for any costs or expenses incurred by it pursuant to
this Section 12.5(a).  If any such books or records, Asset Files, or any other
documents relating to the Business prior to the Initial Closing Date which
Sellers have the right to have access to pursuant to this Section 12.5(a) are
produced by Buyer to an actual or potentially adverse party (e.g., in litigation
or in connection with a government investigation), Buyer shall endeavor to, as
soon as commercially reasonable, make all such books, records, Asset Files,
and/or documents produced available for inspection and copying by Sellers
concurrently with the production of such books, records, Asset Files and/or
documents.  In addition, if Buyer shall desire to dispose of any of such books
or records prior to the expiration of the period specified in the first sentence
of this Section 12.5(a), Buyer shall, prior to such disposition, give Sellers a
reasonable opportunity, at Sellers’ expense, to segregate and remove such books,
records and Asset Files as Sellers may select.  Buyer shall provide Sellers with
reasonable assistance, at Sellers’ actual expense, by providing employees to act
as witnesses and preparing documents, reports and other information reasonably
requested by Sellers in support of the activities described in this
Section 12.5(a).  In no event shall Buyer dispose of any such books, records or
Asset Files pertaining to the Serviced Assets without the prior written consent
of Sellers not to be unreasonably withheld.

 

(b)           Retention.  Buyer agrees that, subject to any confidentiality
obligations applicable to Sellers, Sellers may retain (i) copies of all
materials made available to Buyer in the course of its investigation of the
Business, together with a copy of all documents referred to in such materials,
(ii) all books and records prepared in connection with the transactions
contemplated by this Agreement, including bids received from others and
information relating to such bids, (iii) copies of any books and records which
may be relevant in connection with the defense of (A) the matters referred to in
Section 9 or (B) disputes or proceedings arising under the transactions
contemplated by this Agreement, with Governmental Authorities or with other
third Persons, (iv) all financial information and all other accounting books and
records prepared or used in connection with the preparation of financial
statements of Sellers, (v) copies of any Assigned Contracts or records, and (vi)
originals of all Asset Files relating to the Serviced Assets.

 

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(c)           Tax Audits.  Subject to the provisions of Section 9.4(c), Buyer
and Sellers shall provide reasonable assistance to each other with any tax
audits or other administrative or judicial proceedings involving the Business at
no cost to the other.  Neither party shall, without the prior written consent of
the other, unless required by applicable Law, initiate any contact or
voluntarily enter into any agreement with, or volunteer any information to, any
taxing authorities with regard to Tax Returns or declarations of the other
party.  A change by either party in the method of tax reporting or the contents
of Tax Returns shall not be considered a voluntary disclosure of information
regarding Tax Returns or declarations of the other party.

 

(d)           Tax Return Information.  Buyer and Sellers shall furnish, at no
cost to the other, such data in their possession and control relating to the
Assets as the other party may reasonably require to prepare Tax Returns.  Such
data shall be made available to support the Allocation Schedule; provided,
however, that if additional data in their possession and control is reasonably
required by Sellers or Buyer for preparation of Tax Returns or tax examinations,
such additional information (including reproduction of tax assessments and
records) shall be furnished, at no cost within a reasonable time after requested
in writing.

 

12.6         Entire Agreement.  This Agreement, the Schedules and the Exhibits
referred to herein and the documents delivered pursuant hereto and the
Confidentiality Agreement contain the entire understanding of the parties hereto
with regard to the subject matter contained herein or therein, and supersede all
other prior agreements, understandings, term sheets, heads of terms or letters
of intent between or among any of the parties hereto.  No provision contained in
any conveyancing document delivered pursuant to this Agreement shall affect in
any manner whatsoever any of the indemnification provisions contained herein.

 

12.7         Interpretation.

 

(a)           Titles and headings to sections and subsections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.

 

(b)           The Schedules referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.  Neither the specification of any dollar amount in any
representation or warranty contained in this Agreement nor the inclusion of any
specific item in any Schedule hereto is intended to vary the definition of
“Material Adverse Effect” or to imply that such amount, or higher or lower
amounts, or the item so included or other items, are or are not material, and no
party shall use the fact of the setting forth of any such amount or the
inclusion of any such item in any dispute or controversy between the parties as
to whether any obligation, item or matter not described herein or included in
any Schedule is or is not material for purposes of this Agreement.  Unless this
Agreement specifically provides otherwise, neither the specification of any item
or matter in any representation or warranty contained in this Agreement nor the
inclusion of any specific item in any Schedule hereto is intended to imply that
such item or matter, or other items or matters, are or are not in the ordinary
course of business, and no party shall use the fact of the setting forth or the
inclusion of any such item or matter in any dispute or controversy between the
parties as to whether any obligation, item or matter not described herein or
included in any Schedule is or is not in the ordinary course of business for
purposes of this Agreement.  Sellers shall, no later than

 

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two (2) Business Days prior to any Closing, by notice in accordance with the
terms of this Agreement, supplement, amend or create any Schedule to Section 3,
in order to add information or correct previously supplied information.  No such
amendment shall be evidence, in and of itself, that the representations and
warranties in the corresponding Section are no longer true and correct in all
material respects.  It is specifically agreed that such Schedules may be amended
to add immaterial, as well as material, items thereto.  No such supplemental,
amended or additional Schedule shall be deemed to cure any breach or affect the
rights of any party with respect thereto for purposes of Sections 7.1, 7.2 or
9.1(a).

 

(c)           For the purposes of this Agreement, (i) words in the singular
shall be held to include the plural and vice versa and words of one gender shall
be held to include the other gender as the context requires, (ii) the terms
“hereof”, “herein” and “herewith” and words of similar import shall be construed
to refer to this Agreement in its entirety and to all of the Schedules and not
to any particular provision, unless otherwise stated, and (iii) the term
“including” shall mean “including without limitation.”  Where the plural version
of the word “Sellers” has been used in this Agreement, if an obligation under
this Agreement is not applicable to a particular Seller, such Seller shall not
be required to satisfy those obligations.

 

(d)           This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted.

 

12.8         Amendments and Waivers.  This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by each of the parties or, in the case of a waiver, by
the party waiving compliance.  Any such waiver, including any waiver of this
Section 12.8, shall be validly and sufficiently authorized for the purposes of
this Agreement if, as to any party, it is authorized in writing by an authorized
representative of such party.  The failure of any party hereto to enforce at any
time any provision of this Agreement shall not be construed to be a waiver of
such provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of any party thereafter to enforce each and every such
provision.  No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.

 

12.9         No Agency, Joint Venture or Partnership.  Buyer and Sellers each
agree and confirm that (a) they do not intend to create any form of partnership
or joint venture with the other party hereto with respect to any of the Assets,
(b) they will not hold themselves out to the public as a partner with the other
party hereto or any other person with respect to any of the Assets, (c) they do
not have, or intend to form, a joint profit motive with the other party hereto
or any other person with respect to any of the Assets, (d) they are not
authorized to act as, or to hold themselves out as, the agent of or to otherwise
bind the other party hereto with respect to any of the Assets, (e) unless
otherwise required by the Internal Revenue Service or like governmental
authority with jurisdiction over income tax matters, they will not file any
partnership or other joint income tax return reflecting the other party as a
partner or joint venturer with respect to items of income, loss, deduction, or
credit attributable to any of the Assets, and (f) they will report all items of
income, loss, deduction and credit attributable to Assets on their own tax
returns in a manner consistent with the terms of this Agreement.  Sellers
further agree and acknowledge that Buyer (w) intends to, and will, exercise its
rights and carry out its obligations

 

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with respect to its interest in the Assets solely with a view to further its own
best interests, (x) except as expressly provided herein, has not waived, and
does not intend to waive, either (i) their right to encumber, alienate,
mortgage, and otherwise control its interest in each of the Assets or (ii) its
right to partition each of the Assets, (y) is not, and will not be deemed to be,
under the control of the Sellers with respect to any of the Assets, and (z) will
conduct any and all business with respect to the Assets in its own name and not
in a joint name or in the name of the Sellers.

 

12.10       Expenses.  Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel, accountants, advisors and consultants.

 

12.11       Partial Invalidity.  Wherever possible, each provision hereof shall
be interpreted in such a manner as to be effective and valid under applicable
Law.  In case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision or provisions shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.

 

12.12       Execution in Counterparts; Facsimile.  This Agreement may be
executed in two or more counterparts and via facsimile, each of which shall be
considered an original instrument, but all of which shall be considered one and
the same agreement, and shall become binding when one or more counterparts have
been signed by each of the parties hereto and delivered to Sellers and Buyer.

 

12.13       Governing Law.  This Agreement and all Disputes or controversies
arising hereunder or with respect to the transactions contemplated hereby shall
be governed by and construed in accordance with the Laws of the State of New
York (excluding principles of conflicts of law that would apply the law of
another jurisdiction).

 

12.14       Jurisdiction.  The parties hereby agree that any action, suit,
arbitration or other proceeding arising out of or related to this Agreement
shall be conducted only in New York, New York.  Without limiting Section 12.21,
each party hereby irrevocably consents and submits to the exclusive personal
jurisdiction of and venue in the federal and state courts located in New York,
New York and waives any claim as to such venue being an inconvenient forum.

 

12.15       Attorneys’ Fees.  If any action, suit, arbitration or other
proceeding for the enforcement of this Agreement is brought, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions hereof, the successful or prevailing party shall be entitled to
recover reasonable attorneys’ fees and other costs incurred in that proceeding,
in addition to any other relief to which it may be entitled.

 

12.16       Time of Essence.  Time is of the essence for each and every
provision of this Agreement.

 

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12.17       Disclaimer of Warranties.  Sellers make no representations or
warranties with respect to any projections, forecasts or forward-looking
information provided to Buyer.  There is no assurance that any projected or
forecasted results will be achieved.  EXCEPT AS TO THOSE MATTERS EXPRESSLY
COVERED BY THE REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT, DOCUMENTS,
DELIVERIES OR CERTIFICATIONS REQUIRED TO BE DELIVERED HEREBY ON OR AFTER THE
INITIAL CLOSING DATE AND THE SELLER TRANSACTION DOCUMENTS, SELLERS ARE SELLING
THE ASSETS AND THE BUSINESS OF SELLERS AND ASSIGNING THE ASSUMED LIABILITIES ON
AN “AS IS, WHERE IS” BASIS AND SELLERS DISCLAIM ALL OTHER WARRANTIES,
REPRESENTATIONS AND GUARANTIES WHETHER EXPRESS OR IMPLIED.  SELLERS MAKE NO
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE AND NO IMPLIED WARRANTIES WHATSOEVER.  Without limiting the generality
of the foregoing, Buyer agrees to take title to the Assets Held for Sale or
Lease and the On-Lease Equipment “AS IS” “WHERE IS” in their current conditions
and state of repair, subject to reasonable use, wear and tear and natural
deterioration between the date hereof and the Closing Date on which such asset
is purchased by Buyer.

 

12.18       References to U.S. Dollars.  All references in this Agreement to
amounts of money expressed in dollars are references to United States dollars,
unless otherwise indicated.

 

12.19       Further Assurances.

 

(a)           At and after each applicable Closing Date, and without further
consideration therefore, (i) Sellers shall execute and deliver to Buyer such
further instruments and certificates of conveyance and transfer as Buyer may
reasonably request in order to more effectively convey and transfer the Assets
purchased by Buyer on each Closing Date and to put Buyer in operational control
of the Business, or for aiding, assisting, collecting and reducing to possession
any of the Assets purchased by Buyer on each Closing Date and exercising Buyer’s
rights with respect thereto, and (ii) Buyer shall execute, or shall arrange the
execution of, and deliver to Sellers such further instruments and certificates
of assumption, novation and release as Sellers may reasonably request in order
to effectively make Buyer responsible for all Assumed Liabilities and release
Sellers and its Affiliates therefrom to the fullest extent permitted under
applicable Law.

 

(b)           In addition, Buyer and Sellers shall cooperate to ensure prompt
conveyance by (i) Sellers to Buyer of any Asset not conveyed to Buyer at any
applicable Closing, subject to the provisions of Section 5.2(d) and (ii) Buyer
to Sellers of any asset conveyed to Buyer at any Closing that is not an Asset.

 

12.20       No Rescission.  Neither Buyer nor Sellers shall be entitled to
rescind the purchase of the Business and the Assets by Buyer by virtue of any
failure of any party’s representations and warranties herein to have been true
or any failure by any party to perform its obligations hereunder.

 

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12.21       Dispute Resolution — Generally.  Except with regard to disputes
regarding the matters described in Sections 1.4, 1.6 and 1.10(a) and Tax
Contests, which shall be resolved in accordance with the respective terms
provided elsewhere in this Agreement, resolution of any and all disputes arising
from or in connection with this Agreement, whether based on contract, tort, or
otherwise (collectively, “Disputes”), shall be exclusively governed by and
settled in accordance with the provisions of this Section 12.21; provided,
however, that this Section 12.21 shall not preclude any party from seeking
injunctive or other equitable relief in a court of competent jurisdiction.  The
parties hereto shall use all commercially reasonable efforts to settle all
Disputes without resorting to mediation, arbitration or otherwise.  The party
asserting a Dispute shall deliver to the other party a written notice setting
forth the basis for the issue in detail, and identifying the section of this
Agreement (the “Dispute Notice”).  Within ten (10) Business Days of receipt of a
Dispute Notice, the issue shall be elevated to a designated panel of four
individuals, two representatives from each party (one who shall be a business
representative, and the other who shall be a technical or accounting
representative, as appropriate).  Such representatives shall be empowered and
authorized to bind their respective companies with respect to the matter in
dispute, and to settle the issue on behalf of their respective companies.  These
representatives shall, within thirty (30) Business Days of receipt of the
Dispute Notice, confer and in good faith make a reasonable effort to resolve the
issue.  If any Dispute remains unsettled, a party hereto may commence
proceedings hereunder by delivering a written notice from a Senior Vice
President or comparable representative of such party (the “Demand”) to the other
parties providing reasonable description of the Dispute to the others and
expressly requesting arbitration hereunder.  Such Dispute shall be submitted to
arbitration under the terms hereof, which arbitration shall be final, conclusive
and binding upon the parties, their successors and assigns.  The arbitration
shall be conducted by three neutral arbitrators acting by majority vote (the
“Panel”) selected by agreement of the parties not later than ten (10) Business
Days after delivery of the Demand or, failing such agreement, appointed from the
New York statewide panel of full-time neutral arbitrators of the American
Arbitration Association, and pursuant to the commercial arbitration rules of the
American Arbitration Association (including the supplementary procedures for
large complex disputes), as amended from time to time (the “AAA Rules”),
applying the governing law as set forth in Section 12.13.  If an arbitrator so
selected becomes unable to serve, his or her successors shall be similarly
selected or appointed.  The arbitration shall be conducted pursuant to the
Federal Arbitration Act and such procedures as the parties subject to such
arbitration (each, a “Party”) may agree, or, in the absence of or failing such
agreement, pursuant to the AAA Rules.  The Panel shall have case management
authority and shall resolve the Dispute in final within one hundred eighty (180)
days from the commencement of the arbitration.  Notwithstanding the foregoing: 
(a) each Party shall have the right to audit the books and records of the other
Party that are reasonably related to the Dispute; (b) each Party shall provide
to the other, reasonably in advance of any hearing, copies of all documents
which a Party intends to present in such hearing; (c) each Party shall be
allowed to conduct reasonable discovery through written document requests and
depositions, the nature and extent of which discovery shall be determined by the
Parties; provided, that if the Parties cannot agree on the terms of such
discovery, the nature and extent thereof shall be determined by the Panel which
shall take into account the needs of the Parties and the purposes of arbitration
to make discovery expeditious and cost effective; and (d) each Party shall be
entitled to make an oral presentation to the Panel.  The award shall be in
writing and shall specify the factual and legal basis for the award.  Under no
circumstances shall the Panel be entitled to award special,

 

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exemplary, punitive or consequential damages (including the loss of profit or
revenue) except to the extent that any such damages are asserted by a third
Person against a party hereto.  The Panel shall apportion all costs and expenses
of arbitration, including the Panel’s fees and expenses and fees and expenses of
experts, between the prevailing and non-prevailing Party as the Panel deems fair
and reasonable.  The parties hereto agree that monetary damages may be
inadequate and that any party by whom this Agreement is enforceable shall be
entitled to seek specific performance of the arbitrators’ decision from a court
of competent jurisdiction.  Any arbitration award shall be binding and
enforceable against the parties hereto and judgment may be entered thereon in
any court of competent jurisdiction.

 

SECTION 13

DEFINITIONS

 

13.1         Definitions.  In this Agreement, the following terms have the
meanings specified or referred to in this Section 13.1 and shall be equally
applicable to both the singular and plural forms.  Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement.

 

“4/30/04 NAV” means, with respect to each Specified Financing and Lease Asset
and Equity Asset (other than interests subject to the Option Agreement), that
amount set forth on Schedule 1.3 opposite such asset under the column entitled
“4/30/04 NAV” and with respect to each Asset Held for Sale or Lease, that amount
set forth with regard to such asset on Schedule 1.1(a)(i).

 

“AAA Rules” is defined in Section 12.21.

 

“Accounting Principles” means the accounting principles (including accounting
methods, policies, practices and procedures) described in Exhibit A.

 

“Accrued Vacation” is defined in Section 6.2(e).

 

“Additional Retention Agreements” is defined in Section 3.1(d)(ii)(C).

 

“Adjusted Book Value of the Assets” means, as of any date, an amount equal to
(x) the aggregate of, (i) the Applicable NAV of the Specified Financing and
Lease Assets, including those equitably assigned to Buyer pursuant to
Section 5.2(d), (ii) the Applicable NAV of the Equity Assets and (iii) the
Applicable NAV of the Assets Held for Sale or Lease, minus (y) the aggregate
Book Value of the Assumed Liabilities, in each case as determined in accordance
with the Accounting Principles.  The Adjusted Book Value of the Assets shall not
include the Excluded Assets and the Excluded Liabilities.

 

“Affected Portfolio Property” means, in the context of determining Insurance
Gain or Insurance Loss, Portfolio Property which relates to a CFS Portfolio
Financing and Lease Asset that has suffered a casualty (whether total or
partial).

 

“Affiliate” means, with respect to any Person, any other Person, which directly
or indirectly controls, is controlled by or is under common control with such
Person.

 

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“Agreement” means this Purchase and Sale Agreement, as amended, modified or
supplemented from time to time, together with the Schedules and Exhibits
attached hereto.

 

“Allocation Schedule” is defined in Section 1.4.

 

“Applicable Interest Rate” means the per annum rate equal to the rate announced
by Citibank, N.A. in the city of New York as its base rate in effect on the
Initial Closing Date.

 

“Applicable NAV” means as of any date of determination:

 

(i)            with respect to any CFS Portfolio Financing and Lease Asset that
qualifies on such date as a Finance Obligation the sum of the following amounts,
as reflected on the general ledger as of such date:  (A) all unpaid scheduled
contractual payments under such Finance Obligation (whether or not due); plus
(B) the Booked Residual Value, if any, of any Portfolio Property that is subject
to or governed by such Finance Obligation; plus (C) any other amounts due and
owing under such Finance Obligation, any Taxes, any amounts owed by the Obligor
thereunder in respect of any claims for any breach or default by such Obligor
under such Finance Obligation or any unpaid late charges, out-of-pocket costs or
expenses (including collection costs), in each case attributable to, or incurred
in connection with, such Finance Obligation; plus (D) after the Initial Closing
Date, any unamortized amounts incurred in connection with the origination or
acquisition of such Finance Obligation, including commissions, incentive
compensation, expenses or bonuses, but not including any portion of the Purchase
Premium; minus (E) the unearned finance charges, interest or other charges in
the nature of finance charges related to such Finance Obligation; minus (F) any
funds held as collateral or security for the Obligor’s performance under such
Finance Obligation; and

 

(ii)           with respect to any CFS Portfolio Financing and Lease Asset that
qualifies on such date as an Operating Lease, the sum of the following amounts,
as of such date:  (A) the applicable Seller’s original cost of the Portfolio
Property, subject to or governed by such Operating Lease; plus (B) all billed
and unpaid scheduled contractual payments under such Operating Lease as of such
date; minus (C) the accumulated depreciation attributed to such Operating Lease
and any related Portfolio Property, as of such date; plus (D) after the Initial
Closing Date, any unamortized amounts incurred in connection with the original
or acquisition of such Operating Lease, including commissions, incentive
compensation, expenses or bonuses, but not including any portion of the Purchase
Premium; plus (E) any other amounts due and owing under such Operating Lease as
of such date, including, any Taxes, any amounts owed by the Obligor thereunder
in respect of any claims for any breach or default by such Obligor under such
Operating Lease or any unpaid late charges, out-of-pocket costs or expenses
(including collection costs) in each case attributable to, or incurred in
connection with, such Operating Lease; minus (F) any funds held as of such date
as collateral or security for the Obligor’s performance under such Operating
Lease.

 

“Applicable NAV Statement” means a statement in form and substance reasonably
satisfactory to Sellers prepared by Buyer with respect to the CFS Portfolio
Financing and Lease Assets, Assets Held for Sale or Lease and Equity Assets
(other than interests subject to the Option Agreement) specifying (a) for each
CFS Portfolio Financing and Lease Asset and Equity Asset (other than interests
subject to the Option Agreement) its Applicable NAV as of the

 

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relevant Determination Date and (b) for any applicable CFS Portfolio Financing
and Lease, Assets Held for Sale or Lease or Equity Asset (other than interests
subject to the Option Agreement) any change in its Applicable NAV from the date
of Buyer’s previously delivered Applicable NAV Statement which change occurred
as a result of Buyer reducing the Booked Residual Value of the Portfolio
Property relating thereto.

 

“Assets” is defined in Section 1.1(a).

 

“Asset Files” means, collectively, all files in possession or control of Sellers
(or as applicable under Section 3.2, the Investment Vehicles) or their
Affiliates relating to the Portfolio Assets, including each of the Financing and
Lease Assets and all Records with respect thereto, but in each case excluding
any contents of such files that (i) contain proprietary or confidential
information and originals of internal corporate records not related to the
Business or (ii) are Tax Returns.

 

“Assets Held for Sale or Lease” means the Assets set forth on
Schedule 1.1(a)(i).

 

“Assigned Contracts” is defined in Section 1.1(a)(iii).

 

“Assignment and Assumption Agreement” means a master assignment and assumption
agreement substantially in the form of Exhibit B.

 

“Assumed Liabilities” is defined in Section 1.2(b).

 

“Audit Costs” is defined in Section 6.10(f).

 

“Balance Sheet “ is defined in Section 3.1(c).

 

“Base Purchase Price” means the aggregate of the payments made from Buyer to
Sellers pursuant to Section 1.3 (including payments with respect to Deferred
Assets) other than (i) the Purchase Premium and (ii) the interest being paid to
the Sellers from Buyer pursuant to Section 1.3(a)(y)(b) thereof, provided that
for avoidance of doubt interest payments received by Sellers shall not reduce
the amount hereof.

 

“Benefit Plan” means each compensation or benefits plan, program or arrangement
(including, but not limited to, those subject to ERISA, employment agreements,
cash or equity-based bonus or incentive arrangements, severance arrangements and
vacation policies) sponsored, maintained or contributed to or by Sellers for the
benefit of any Business employee or former Business employee.

 

“Bill of Sale” means a bill of sale substantially in the form of Exhibit D.

 

“Boeing Capital” is defined in the Preamble of this Agreement.

 

“Book Value of Assumed Liabilities” means the book value of the Assumed
Liabilities determined in accordance with the Accounting Principles.

 

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“Booked Residual Value” means, with respect to any item of Portfolio Property
relating to any Specified Financing and Lease Asset or Equity Asset (other than
interests subject to the Option Agreement), its estimated value upon the
Scheduled Termination Date of such Financing and Lease Asset or Equity Asset
(other than interests subject to the Option Agreement), in each case as
established and reflected on the books and records of Sellers, or the applicable
Investment Vehicle, at the inception of such Specified Financing and Lease Asset
or Equity Asset (other than interests subject to the Option Agreement), as
reduced for any write down or reductions by Sellers, or the applicable
Investment Vehicle, on or prior to the Initial Closing Date.

 

“Business” is defined in the first “WHEREAS” clause of this Agreement.

 

“Business Agreements” is defined in Section 3.1(k).

 

“Business Asset Permitted Encumbrances” means (a) liens for Taxes and other
governmental charges and assessments which are not yet due and payable or which
are being contested in good faith, (b) liens of landlords and liens of carriers,
warehousemen, mechanics and materialmen and other like liens arising in the
ordinary course of business for sums not yet due and payable or which are being
contested in good faith, (c) other liens or imperfections on property which are
not material in amount or do not materially detract from the value of or
materially impair the continued use, operation or marketability of the property
affected by such lien or imperfections, (d) liens relating to deposits made in
the ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security or to secure the
performance of leases, trade contracts or other similar agreements, (e) purchase
money liens on personal property acquired in the ordinary course of business,
(f) liens specifically identified in the Financial Statements, (g) liens
securing executory obligations under any lease that constitutes a “capital
lease” under GAAP, (h) any and all Requirements of Law including those affecting
the Facilities relating to zoning and land use, (i) any utility company rights,
easements and franchises, and (j) the other liens set forth on Schedule 13.1.

 

“Business Assets” means Assets other than the Specified Portfolio Assets.

 

“Business Day” means a day other than Saturday, Sunday or any day on which banks
located in the State of New York are authorized or obligated to close.

 

“Buyer” is defined in the preamble of this Agreement.

 

“Buyer Group Member” means Buyer, its Affiliates, and their respective
directors, officers, employees, agents, attorneys and consultants and their
successors and assigns.

 

“Buyer Transaction Documents” means all agreements, instruments and documents
being or to be executed and delivered by Buyer under this Agreement or in
connection herewith, including each of the documents listed on Schedule 2.2
hereto.

 

“Buyer’s Accountants” means KPMG LLP or any public accounting firm with
nationally recognized auditing experience (other than Sellers’ Accountants),
selected by Buyer.

 

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“Buyer’s Asset Restructuring Policy” means Buyer’s written asset restructuring
policy attached as Exhibit E as in effect on the Initial Closing Date and as
modified from time to time.

 

“Buyer’s Breach Notice” is defined in Section 11.1(a)(iv).

 

“Buyer’s Costs of Disposition” means, with respect to a Disposition, the
aggregate (without duplication) of (a) any transfer, sales, lease or similar
taxes payable as a result of such Disposition that are paid by Buyer and which
are not reimbursable by the purchaser or lessee of such Portfolio Property, (b)
reasonable professional fees and expenses, fees due to any Governmental
Authority, broker’s commissions paid to third parties unaffiliated with Buyer or
the applicable purchaser or lessee, and other reasonable out-of-pocket costs of
sale or lease actually paid by Buyer (and not reimbursable by the applicable
purchaser or lessee) attributable to such Disposition, (c) Imputed Remarketing
Costs (if applicable), (d) Buyer’s Cost of Possession of the Portfolio Property
and (e) reasonable costs of Refurbishment.

 

“Buyer’s Cost of Possession” means an amount calculated by multiplying (i)
Buyer’s Possession Period Percentage associated with the Disposition of an item
of Portfolio Property times (ii) an amount equal to the 3-month LIBOR rate on
the first day of Buyer’s Possession Period as quoted by the British Bankers’
Association and appearing on the relevant Bloomberg quotation screen (or, if
such a rate is not then quoted by the British Bankers’ Association, the similar
rate quoted by Reuters) multiplied by the Applicable NAV for such item of
Portfolio Property on the first day of Buyer’s Possession Period.

 

“Buyer’s Possession Period” means the period commencing on the date Buyer or its
agent takes actual or constructive possession (whether by way of foreclosure by
Buyer, surrender or delivery by the applicable Obligor or otherwise) of an item
of Portfolio Property to be subject to Disposition, and ending on the date such
item of Portfolio Property becomes either a Liquidated Asset or a Redeployed
Asset, but in no event to exceed one hundred twenty (120) days.

 

“Buyer’s Possession Period Percentage” means a fraction, the numerator of which
is the number of days in Buyer’s Possession Period and the denominator of which
is three hundred sixty-five (365).

 

“Buyer’s Savings Plan” is defined in Section 6.2(f).

 

“CFS Portfolio” means, collectively, the Purchased Portfolio Assets and the
Seller Postponed Redeployed Assets, in each case, as the same may be amended,
modified, restated or extended from time to time, unless as a result of any such
amendment, modification, restatement or extension, such asset becomes either a
Liquidated Asset or a Redeployed Asset that is itself not a Seller Postponed
Redeployed Asset.

 

“CFS Portfolio Financing and Lease Asset” means, as of any date, a Purchased
Financing and Lease Asset or Seller Postponed Redeployed Asset that is on such
date maintained in and as part of the CFS Portfolio.

 

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“CFS Portfolio Records” means, as of any date following the Initial Closing
Date, all Records of Buyer pertaining to the CFS Portfolio.

 

“Claim Notice” is defined in Section 9.3(a).

 

“Closing” means the Initial Closing and each Subsequent Closing.

 

“Closing Book Value of the Assets” is defined in Section 1.6(e).

 

“Closing Date” is defined in Section 2.1.

 

“Closing Date Data Tape” means the computer disk, computer tape or other
computer format delivered to Buyer pursuant to Section 6.9(c) setting forth, as
of 11:59 p.m. PDT May 31, 2004, the Portfolio Information for each Purchased
Financing and Lease Asset and Equity Asset (other than interests subject to the
Option Agreement).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means all property, whether tangible or intangible, in which a
Seller (or, as applicable under Section 3.2, any Investment Vehicle) was granted
a security interest for the purpose of securing the payment or performance of
any Obligor under a Financing and Lease Asset, including any On-Lease Equipment
under a Lease Contract intended as a secured transaction for purposes of the
Uniform Commercial Code or similar purposes.

 

“Confidentiality Agreement” means the Confidentiality Agreement dated
November 24, 2003 between GE Commercial Finance and Boeing Capital.

 

“Contract” means any written contract, agreement, license, lease, sales or
purchase order or other commitment in the nature of a contract, pertaining
solely to the Business, to which any Seller is a party or by which any of the
Facilities are bound, but shall specifically exclude all Portfolio Contracts.

 

“Court Order” means any judgment, order, award or decree of any foreign,
federal, state, local or other court or tribunal and any ruling or award in any
arbitration proceeding.

 

“Credit Enhancement” means, with respect to any CFS Portfolio Financing and
Lease Asset, any certificate of deposit, letter of credit, guaranty or capital
stock or other equity interest pledged, assigned, mortgaged, made or delivered
as security or other credit support for the performance of any obligation under
or with respect to such CFS Portfolio Financing and Lease Asset.

 

“Cumulative Net Gain” as of the relevant date means the amount (if any) by which
Portfolio Gains exceed Portfolio Losses as determined on a cumulative basis for
all periods from the Initial Closing through the end of the relevant date.

 

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“Cumulative Net Loss” as of the relevant date means the amount (if any) by which
Portfolio Losses exceed Portfolio Gains as determined on a cumulative basis for
all periods from the Initial Closing through the end of the relevant date.

 

“Data Tape” means the following spreadsheets dated as of April 30, 2004:  (i)
“CFS Port Data Tape Incl 1.3 and 1.4 Sch. - 4.30.04 Sent 5.21.04.xls” delivered
by Sellers to Buyer via electronic mail by Terrence Johnson (of Boeing Capital)
to Sergey Sherman (of Buyer) at 7:21 p.m. PDT on May 21, 2004; and (ii)
“Adjusted Work Out 5.22.04.xls” delivered by Sellers to Buyer via electronic
mail by Stephen N. Gray (of Boeing Capital) to Sergey Sherman (of Buyer) at 3:08
p.m. PDT on May 22, 2004.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
as amended from time to time, any similar Law of any foreign (i.e., non-U.S.)
jurisdiction, and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws or other Laws relating to general equity principles from time
to time in effect affecting the rights of creditors generally.

 

“Deemed Gain” means:

 

(a)           with respect to a Redeployed Defaulted Asset that is not a SPRA,
WHERE the result of

 

(i) the Stipulated Value for such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s Disposition of the
Portfolio Property giving rise to such Redeployed Defaulted Asset, plus any
Insurance Loss (if any) not previously treated as a Deemed Loss applicable to
the Affected Portfolio Property

 

is greater than the amount equal to

 

(x) the Applicable NAV of the applicable Replaced Asset as of the First Default
Date minus

 

(y) any and all Recoveries and Return Condition Payments received by Buyer in
respect of such Replaced Asset from and after the First Default Date up to and
including the date on which such Replaced Asset was converted into such
Redeployed Asset (the “Redeployment Period”), minus

 

(z) to the extent not already deducted in the determination of such Applicable
NAV, the aggregate amount of Deemed Losses theretofore attributable to such
Replaced Asset,

 

the amount of such excess;

 

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(b)           with respect to a Redeployed Non-Defaulted Asset that is not an
SPRA, WHERE the result of

 

(i) the Stipulated Value for such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s Disposition of the
Portfolio Property giving rise to such Redeployed Non-Defaulted Asset, minus any
Insurance Gain (if any) or plus any Insurance Loss (if any) that was not
previously treated as a Deemed Gain (in the case of an Insurance Gain) or a
Deemed Loss (in the case of an Insurance Loss) applicable to the Affected
Portfolio Property

 

is greater than the amount equal to

 

(x) the Applicable NAV of such Redeployed Non-Defaulted Asset as of the
Termination Date therefor, minus

 

(y) any and all Return Condition Payments received by Buyer in respect of such
Redeployed Non-Defaulted Asset,

 

the amount of such excess;

 

(c)           with respect to an Insurance Gain on Affected Portfolio Property
not previously treated as a Deemed Gain and where the CFS Portfolio Financing
and Lease Asset to which such Affected Portfolio Property relates remains in
effect,

 

the amount of such Insurance Gain; and

 

(d)           with respect to an Insurance Gain on Affected Portfolio Property
not previously treated as a Deemed Gain and where the Replaced Asset to which
such Affected Portfolio Property relates is replaced by a Redeployed Asset,

 

the amount of such Insurance Gain.

 

“Deemed Loss” means:

 

(a)           with respect to a Redeployed Defaulted Asset WHERE the result of

 

(i) the Stipulated Value for such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s Disposition of the
Portfolio Property giving rise to such Redeployed Defaulted Asset, plus any
Insurance Loss (if any) not previously treated as a Deemed Loss and applicable
to the Affected Portfolio Property

 

is less than the amount equal to

 

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(x) the Applicable NAV of the applicable Replaced Asset as of the First Default
Date minus

 

(y) any and all Recoveries and Return Condition Payments received by Buyer in
respect of such Replaced Asset during the Redeployment Period, minus

 

(z) to the extent not already deducted in the determination of such Applicable
NAV, the aggregate amount of Deemed Losses theretofore attributable to such
Replaced Asset,

 

the amount of such shortfall;

 

(b)           with respect to a Redeployed Non-Defaulted Asset, WHERE the result
of

 

(i) the Stipulated Value for such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s Disposition of the
Portfolio Property giving rise to such Redeployed Non-Defaulted Asset, minus any
Insurance Gain (if any) or plus any Insurance Loss (if any) that was not
previously treated as a Deemed Gain (in the case of an Insurance Gain) or a
Deemed Loss (in the case of an Insurance Loss) applicable to the Affected
Portfolio Property

 

is less than the amount equal to

 

(x) the Applicable NAV of such Replaced Asset as of the Termination Date
therefor, minus

 

(y) any Return Condition Payments received by Buyer in respect of such Replaced
Asset,

 

the amount of such shortfall;

 

(c)           with respect to an Insurance Loss on Affected Portfolio Property
not previously treated as a Deemed Loss and where the CFS Portfolio Financing
and Lease Asset to which such Affected Portfolio Property relates remains in
effect,

 

the amount of such Insurance Loss;

 

(d)           with respect to an Insurance Loss on Affected Portfolio Property
not previously treated as a Deemed Loss and where the Replaced Asset to which
such Affected Portfolio Property relates is replaced by a Redeployed Asset,

 

the amount of such Insurance Loss; and

 

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(e)           for any Defaulted Asset with respect to which a Triggering Event
has occurred, an amount equal to (i) in the case of an asset that is not an
operating lease, either (x) the amount of the specific reserve established by
Buyer or (y) the amount of Buyer’s write-down or write-off of the Applicable NAV
of such asset in each case, as a result of such Triggering Event or (ii) in the
case of an operating lease, the amount of Buyer’s write-down or write-off of the
Applicable NAV of such lease as a result of such Triggering Event.

 

“Defaulted Asset” means a CFS Portfolio Financing and Lease Asset with respect
to which (a) the Obligor thereunder shall have failed to pay any principal,
interest, rental expense or other material monetary amount payable to Buyer when
due and such failure remains uncured (or is not waived) for more than ninety
(90) days or, in the event a notice of default is required under such CFS
Portfolio Financing and Lease Asset, for more than ninety (90) days following
delivery to Obligor of such notice of default, (b) the Obligor thereunder has
become subject to any Debtor Relief Law, (c) Buyer has repossessed the related
Portfolio Property (and any available redemption period has expired), (d) the
Obligor thereunder shall have committed fraud in a manner detrimental to the
holder of such Financing and Lease Asset, (e) the Obligor thereunder has ceased
operations, (f) the Obligor thereunder has asserted a defense or claim with
respect to its obligations under such Financing and Lease Asset, (g) in the
event that a payment guaranty, letter of credit or similar Credit Enhancement is
in place with respect to such Financing and Lease Asset, a written demand under
any such guaranty, letter of credit or similar Credit Enhancement has been
delivered to the applicable Obligor or issuer and such Obligor or issuer has
failed to comply with its obligations under such demand for a period of thirty
(30) days following such demand, or (h) an event of default (after giving effect
to any applicable notice and cure periods) other than as set forth in clause (a)
above has occurred under such Financing and Lease Asset and remains uncured (or
is not waived) for more than ninety (90) days.

 

“Deferred Asset” means any Asset set forth on Schedule 2.1.

 

“Deferred Asset Premium Deposit” means an amount equal to the product of (x) the
Purchase Premium and (y) the quotient of (i) the aggregate 4/30/04 NAV of the
Deferred Assets divided by (ii) the Estimated Adjusted Book Value of the Assets.

 

“Deferred Asset Transfer Price” means with respect to each Deferred Asset, the
4/30/04 NAV of such Deferred Asset.

 

“Demand” is defined in Section 12.21.

 

“Designated Energy Financing and Lease Assets” means, collectively, the
Specified Financing and Lease Assets described on Schedule 13.2.

 

“Destroyed Asset” means any Portfolio Property owned by Buyer for purposes of
the Code for which the representations and warranties set forth in
Section 3.2(g)(iii)-(vi) were true and correct on the Closing Date when title to
such Portfolio Property (or the Specified Financing and Lease Asset for which
such Portfolio Property served as On-Lease Equipment) was transferred to Buyer
and that is sufficiently destroyed by a casualty event as to be rendered,

 

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in the judgment of the insurance company insuring such Portfolio Property
against loss or damage, a total loss.

 

“Determination Date” is defined in Section 1.9(a).

 

“Disposition” means Buyer’s or any Investment Vehicle’s sale, lease, transfer or
other disposition of any Portfolio Property encumbered by or leased pursuant to
a CFS Portfolio Financing and Lease Asset.

 

“Dispute” is defined in Section 12.21.

 

“Dispute Notice” is defined in Section 12.21.

 

“Disputed Amount” is defined in Section 1.10(a).

 

“Disputed Gain or Loss” is defined in Section 1.10(a).

 

“Draft Closing Book Value of Assets Statement” is defined in Section 1.6(a).

 

“EBO Gain” is defined in Section 1.9(h).

 

“Earn Out Amount” is defined in Section 1.9.

 

“Earn Out Payment” is defined in Section 1.9.

 

“Encumbrance” means any lien, encumbrance, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
defect in title or other restriction of a similar kind.

 

“Environmental Laws” means all federal, state, local or foreign Laws, statutes,
ordinances, regulations, rules, judgments, orders, notice requirements, court
decisions, agency guidelines or principles of law, restrictions and licenses,
which (a) regulate or relate to the protection or clean-up of the environment;
the use, treatment, storage, transportation, handling, disposal or release of
Hazardous Substances, the preservation or protection of waterways, groundwater,
drinking water, air, wildlife, plants or other natural resources; or the health
and safety of persons or property, including protection of the health and safety
of employees; or (b) impose liability with respect to any of the foregoing,
including the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.),
Resource Conservation & Recovery Act (42 U.S.C. § 6901 et seq.), Safe Drinking
Water Act (21 U.S.C. § 349, 42 U.S.C. §§ 201, 300f), Toxic Substances Control
Act (15 U.S.C. § 2601 et seq.), Clean Air Act (42 U.S.C. § 7401 et seq.), and
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9601 et seq.), or any other similar federal, state or local Law of similar
effect, each as amended.

 

“Equipment” is defined in Section 1.1(a)(ii).

 

“Equity Assets” means each of the partnership interests, membership interests,
shares or other equity owned by one or more Sellers in any Investment Vehicle.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Estimated Adjusted Book Value of the Assets” means (i) the aggregate of the
4/30/04 NAV of the Financing and Lease Assets, Equity Assets set forth on
Schedule 1.3 and Assets Held for Sale or Lease set forth on Schedule 1.1(a)(i).

 

“Excluded Assets” is defined in Section 1.1(b).

 

“Excluded Financing and Lease Assets” means, collectively, the Serviced Assets
and the Zero Balance Financing and Lease Assets.

 

“Excluded Liabilities” means any Liability (whether known or unknown, contingent
or absolute, or arising before, on or after the Closing Date) of any Seller or
any of their Affiliates other than the Assumed Liabilities, including, but not
limited to, the Liabilities set forth in any of clauses (c)(i) through (c)(vii)
of Section 1.2.

 

“Expenses” means any and all reasonable expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including court filing
fees, court costs, arbitration fees or costs, witness fees and reasonable fees
and disbursements of legal counsel, investigators, expert witnesses, accountants
and other professionals).

 

“Facilities” means the Leasehold Property.

 

“Federal Mogul Schedule” shall mean that certain Other Asset labeled as “Federal
Mogul – Unsigned Schedule 5” on Schedule 1.1(a)(vi).

 

“Final Closing Book Value of the Assets Statement” is defined in Section 1.6(e).

 

“Final Closing Date” is defined in Section 2.1.

 

“Final Closing” means the last occurring Subsequent Closing.

 

“Finance Lease” means any CFS Portfolio Financing and Lease Asset that, as a
particular date, would be classified as a “finance lease” under Financial
Standards Board Statement No. 13, as amended from time to time.

 

“Finance Obligation” means any CFS Portfolio Financing and Lease Asset that is a
promissory note, loan or credit agreement, installment sale contract, financing
agreement, Finance Lease or similar financing arrangement (which is not, in any
event, an Operating Lease).

 

“Financial Statements” is defined in Section 3.1(c).

 

“Financing and Lease Assets” means, collectively, all Lease Contracts, loan
agreements, promissory notes, financing agreements, security agreements, other
Portfolio Contracts and chattel paper in the CFS Portfolio, together with all
rights with respect thereto, including rights to receive payments and other
receivables whether by installments, deferred

 

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payments, tax indemnification obligations of Obligors (except to the extent (i)
relating to amounts actually incurred or paid by a Seller (or, as applicable
under Section 3.2, any Investment Vehicle) at any time prior to the Initial
Closing or (ii) of the rights of Sellers (or, as applicable under Section 3.2,
any Investment Vehicle) to indemnification or reimbursement in accordance with
an express provision of this Agreement, including Section 1.5), or otherwise,
and including (a) any rights in Collateral, guaranties and other agreements or
arrangements of whatever character from time to time supporting or securing
payments thereunder and (b) all property and assets of any Obligor in which any
Seller (or, as applicable under Section 3.2, any Investment Vehicle) has or may
have an ownership interest, or a security interest, lien, mortgage, encumbrance,
claim or any other interest.

 

“First Amendment Lease” means a Lease Contract in existence as of the Initial
Closing Date which, pursuant to its terms (i) provides the applicable lessee
Obligor thereunder the right to purchase the On-Lease Equipment at either (a) a
fixed purchase option price, or (b) a price equal to the greater of a stated
price or the then applicable fair market value (but not both (a) and (b)), and
(ii) provides that if the lessee Obligor does not exercise the purchase option
described in (i) above the lease shall automatically extend for a term and
rental stated in the lease.

 

“First Default Date” means, with respect to any Defaulted Asset, the first date
on which such Asset became a Defaulted Asset.

 

“Fixed Asset” means any asset that is not Movable Equipment.

 

“GAAP” means United States generally accepted accounting principles,
consistently applied.

 

“Gain/Loss Statement” is defined in Section 1.9(a).

 

“Governmental Authority” means any foreign, domestic, federal, territorial,
state or local governmental authority, quasi-governmental authority, court,
commission, board, bureau, agency or instrumentality, or any regulatory,
administrative or other department, agency, or any political or other
subdivision, department or branch of any of the foregoing.

 

“Governmental Permits” is defined in Section 3.1(f).

 

“Hazardous Substances” shall mean any quantity of asbestos in any form, urea
formaldehyde, PCB’S, radon gas, crude oil or any fraction thereof, all forms of
natural gas, petroleum products or by-products, any radioactive substance, any
toxic, infectious, reactive, corrosive, ignitable or flammable chemical or
chemical compound and any other hazardous substance, material or waste (as
defined in or for purposes of any Environmental Law), whether solid, liquid or
gas.

 

“IER” means an “individual equipment record” as customarily used by Sellers in
connection with their documentation of Financing and Lease Assets.

 

“Imputed Remarketing Cost” is defined in Section 1.9(e).

 

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“Imputed Remarketing Cost Percentage” is defined in Section 1.9(e).

 

“Income Statement” is defined in Section 3.1(c).

 

“Income Taxes” means Taxes imposed on or measured with respect to net income.

 

“Indemnifiable Losses” mean losses, expenses, costs, damages, fines, penalties,
claims, obligations, judgments, equitable relief granted, settlements, awards,
demands, offsets, defenses, counter-claims, actions, proceedings, interest and
Expenses.

 

“Indemnified Party” is defined in Section 9.3(a).

 

“Indemnitor” is defined in Section 9.3(a).

 

“Independent Appraiser” is defined in Section 1.10(b).

 

“Initial Closing” means the initial consummation of the transactions
contemplated by this Agreement.

 

“Initial Closing Date” is defined in Section 2.1.

 

“Insurance Benefits” is defined in Section 9.3(b).

 

“Insurance Deficiencies” is defined in Section 6.6.

 

“Insurance Gain” means the excess resulting from the insurance proceeds retained
by Buyer (i.e., not released to, or for the benefit of, the Obligor) as a result
of casualty damage to Portfolio Property owned by Buyer for which the
representations and warranties set forth in Section 3.2(g)(iii)-(vi) were true
and correct on the Closing Date when title to such Portfolio Property (or the
Specified Financing and Lease Asset for which such Portfolio Property served as
On-Lease Equipment) was transferred to Buyer being greater than Buyer’s
out-of-pocket costs incurred to repair such Portfolio Property to the same
condition it was in prior to such casualty damage; provided, however, that in
the event that Buyer has taken any action or omitted to take any action that
resulted in the Obligor under any Specified Financing and Lease Asset
maintaining less insurance against loss or damage or liability insurance than is
required under the terms of such Specified Financing and Lease Asset (the
“Insurance Gap”), then the Insurance Gain shall be increased by the difference
between (i) the amount of insurance proceeds that Buyer would have retained
resulting from casualty damage to Portfolio Property owned by Buyer had there
been no Insurance Gap with respect to such Portfolio Property, and (ii) the
insurance proceeds, if any, actually retained by Buyer.

 

“Insurance Gap” is defined in the definition of “Insurance Gain.”

 

“Insurance Loss” means the shortfall resulting from the insurance proceeds
retained by Buyer (i.e., not released to, or for the benefit of, the Obligor)
resulting from casualty damage to Portfolio Property owned by Buyer for which
the representations and warranties set forth in Section 3.2(g)(iii)-(vi) were
true and correct on the Closing Date when title to such

 

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Portfolio Property (or the Specified Financing and Lease Asset for which such
Portfolio Property served as On-Lease Equipment) was transferred to Buyer being
less than Buyer’s out-of-pocket costs incurred to repair such Portfolio Property
to the same condition it was in prior to such casualty damage, provided,
however, that in the event that Buyer has taken any action or omitted to take
any action that resulted in an Insurance Gap, then the Insurance Loss shall be
decreased by the difference between (i) the amount of insurance proceeds that
Buyer would have retained resulting from casualty damage to Portfolio Property
owned by Buyer had there been no Insurance Gap with respect to such Portfolio
Property, and (ii) the insurance proceeds, if any, actually retained by Buyer. 
In the event that the calculation set forth in the foregoing proviso results in
a negative Insurance Loss, such negative amount shall be treated as zero.

 

“Insurance Proceeds” means (i) the proceeds paid by a casualty insurer to Buyer
and retained by Buyer (i.e., not released to, or for the benefit of, the
Obligor) with respect to the destruction of a Destroyed Asset for which the
representations and warranties set forth in Section 3.2(g)(iii)-(vi) were true
and correct on the Closing Date when title to such Portfolio Property (or the
Specified Financing and Lease Asset for which such Portfolio Property served as
On-Lease Equipment), provided, however, that in the event that Buyer has taken
any action or omitted to take any action that resulted in an Insurance Gap, the
Insurance Proceeds shall be increased by the difference between (i) the amount
of insurance proceeds that Buyer would have retained resulting from the
destruction of a Destroyed Asset had there been no Insurance Gap with respect to
such Destroyed Asset, and (ii) the insurance proceeds, if any, actually retained
by Buyer.

 

“Intellectual Property” consists of all items that are either (a) all computer
software and databases (the “Software”) and all related documentation;
(b) worldwide web pages and the contents thereof; or (c) Patents, trademarks,
copyrights, trade secrets, know-how, processes, procedures, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial, marketing, and business data, pricing and cost information, business
and marketing plans, customer and supplier lists and information, other
confidential and proprietary information, manufacturing and production processes
and techniques, molds, dies, casts and product configurations.

 

“Investment Vehicle” means each of the entities set forth in the first column on
Schedule 3.3 hereto.

 

“IRS” means the United States Internal Revenue Service.

 

“Knowledge of Sellers” means, as to a particular matter, the actual current
knowledge of Stephen N. Gray, James C. Hammersmith, Steven W. Vogeding, Steven
D. Williamson, Joseph Corff, Doby Rose, Louis Seno and Ramon Seranio (without
any duty of inquiry).

 

“Law” means any law, statute, treaty, rule, regulation, ordinance, order,
decree, consent decree or similar instrument or determination or award of an
arbitrator or a court or any other Governmental Authority.

 

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“Lease Contract” means each lease contract, bareboat charter or document of
similar nature together with all rights with respect thereto, including rights
to receive payments, rents, penalties, late charges and extension fees and other
receivables whether by installments, deferred payments, tax indemnification
obligations of Obligors (except to the extent (i) relating to amounts actually
incurred or paid by a Seller (or, as applicable under Section 3.2, any
Investment Vehicle ) at any time prior to the time such Asset is transferred or
equitably assigned or (ii) inconsistent with an express provision of this
Agreement, including Section 1.5), or otherwise, and including any guaranties
and other agreements or arrangements of whatever character from time to time
supporting or securing payments of any Lease Contract and all rights with
respect to any agreements or arrangements with its vendors, dealers and
manufacturers of the On-Lease Equipment to the extent specifically related to
the Lease Contract.

 

“Lessee Section 467 Loan Balance” means (a) a Section 467 Loan balance owed to
any Seller by any lessee Obligor as of any applicable Closing Date or (b) any
rents that are owed in arrears to any Seller by any lessee Obligor for the
rental period that includes such Closing Date.

 

“Liabilities” means all indebtedness, obligations and other liabilities (or
contingencies that have not yet become liabilities), whether absolute, accrued,
matured, contingent (or based upon any contingency), known or unknown, fixed or
otherwise, or whether due or to become due, including any fines, penalties,
judgments, awards or settlements respecting any judicial, administrative or
arbitration proceedings or any damages, losses, claims or demands with respect
to any Law.

 

“Liquidated Asset” means, as the context may require, a Liquidated Defaulted
Asset, a Liquidated Non-Defaulted Asset or an Asset Held for Sale or Lease with
respect to which a Disposition has occurred (and has not resulted in a SPRA).

 

“Liquidated Defaulted Asset” means a Defaulted Asset with respect to which
(a) Buyer has repossessed the related Portfolio Property and (b) has sold,
whether by foreclosure sale or otherwise, such related Portfolio Property.

 

“Liquidated Non-Defaulted Asset” means a CFS Portfolio Financing and Lease Asset
with respect to which (a) the Obligor thereunder has returned such related
Portfolio Property to Buyer and (b) Buyer has sold such related Portfolio
Property.

 

“Liquidation Proceeds” means, with respect to a Liquidated Asset, all amounts
(including all cash and non-cash consideration) received by Buyer with respect
to the Disposition of such Liquidated Asset, including the purchase price paid
for the applicable related Portfolio Property, and any and all fees, charges and
other amounts paid by the purchaser of such related Portfolio Property (or by
the applicable Obligor in connection with such Disposition) less any amounts so
received that are required to be refunded to the Obligor or any other Person
legally entitled thereto on such Liquidated Asset.  For purposes of determining
the value of Liquidation Proceeds when all or a portion of such proceeds
consists of non-cash consideration, Buyer and Sellers shall attempt to mutually
agree on the present fair market value of such non-cash consideration, provided,
however, that if Buyer and Sellers cannot mutually agree on such present fair
market value, then such value shall be determined by an Independent Appraiser
with

 

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experience in making such determination, such Independent Appraiser to be
selected in a manner consistent with Section 1.10(a) and with such Independent
Appraisers fees paid as set forth in Section 1.10(a).

 

“Marks” is defined in Section 6.1.

 

“Material Adverse Effect” means any change, circumstance or effect that has a
material adverse effect on the Business, financial condition or results of
operations of the Business or on the Purchased Portfolio Assets, provided,
however, that Material Adverse Effect shall exclude any adverse changes or
conditions as and to the extent such changes or conditions relate to or result
from (i) public or industry knowledge of the transactions contemplated by this
Agreement (including but not limited to any action or inaction by the Business’
employees and vendors), (ii) general economic conditions or other conditions
generally affecting the industry in which the Business competes (other than
changes, effects, occurrences or developments specifically relating to or having
a disproportionate effect on the Business taken as a whole) or (iii) the NAV
Shortfall, if any.  Sellers may, however, at their option, include in the
Schedules of this Agreement or elsewhere items that would not have a Material
Adverse Effect within the meaning of the previous sentence in order to avoid any
misunderstanding, and such inclusion shall not be deemed to be an
acknowledgement by Sellers that such items would have a Material Adverse Effect
or further define the meaning of such term for the purposes of this Agreement.

 

“McGladrey” is defined in Section 1.6(c).

 

“McGladrey Findings” is defined in Section 1.6(c).

 

“Mitsui Partnership” means that certain partnership between the Sellers and
Mitsui.

 

“Monetary Settlement” is defined in Section 9.4(b).

 

“Movable Equipment” means property that is (a) Movable Equipment by Valuation,
(b) property title for which is registered with the United States Federal
Aviation Authority or a comparable foreign civil aviation authority,
(c) property title for which is registered with the United States Coast Guard or
a comparable foreign ship registry authority, or (d)  property registered with
the Surface Transportation Board or a comparable foreign registration authority,
or (e) property title for which is registered with a state motor vehicle
authority.

 

“Movable Equipment by Valuation” means property the value of which, based upon
an open market sale between a willing seller and a willing buyer who will be
required to pay for the cost of shipping the property to the location of its
intended use and to pay for the cost of installation of the property, is equal
to or greater than 85% of the value of the same property, based upon an open
market sale between a willing seller and a willing buyer who will use the
property in its then current location.

 

“NAV Shortfall” is defined in Section 1.6(h)(i).

 

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“Net Disposition Proceeds” means the proceeds arising from Buyer’s Disposition
of any Portfolio Property for which an Imputed Remarketing Cost applies, less
Buyer’s Costs of Disposition (other than any Imputed Remarketing Cost included
therein).  In the event that such proceeds are not payable in a lump sum in
cash, Buyer’s Costs of Disposition will be allocated equally to every payment of
proceeds anticipated to be received by Buyer at the time of such Disposition.

 

“Net Portfolio Gain” means the amount, either per Gain/Loss Statement or
cumulatively, by which Undisputed Portfolio Gains exceeds Undisputed Portfolio
Losses.

 

“Net Portfolio Loss” means the amount, either per Gain/Loss Statement or
cumulatively, by which Undisputed Portfolio Losses exceeds Undisputed Portfolio
Gains.

 

“Non-Assumable Claim” means any civil, criminal or administrative claim, action,
suit, arbitration hearing, investigation, inquiry or proceeding by or before any
Governmental Authority (a) in which one or more of the following legal theories
have been asserted:  (i) violations of (1) any criminal Law, (2) RICO (the
Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § § 1961-1968) or
any state or federal Laws relating to securities, antitrust or competition (or
any comparable foreign Laws), or (3) any Environmental Law or (ii) fraud by any
Buyer Group Member other than allegations of fraud by an Obligor pursuant to a
counterclaim against a Buyer Group Member in litigation arising out of the
ordinary course of such Buyer Group Member’s business, (b) in which any
Governmental Authority has instituted or asserted a claim against a Buyer Group
Member, whether directly or indirectly (including by counterclaim, cross-claim,
interpleader or otherwise) which could reasonably be expected to (i) interfere
in any material respect with the operation of any Buyer Group Member’s business
in the ordinary course, consistent with its past practices, (ii) result in any
Indemnifiable Losses, forfeiture, fine, penalty or fee in excess of $200,000 or
(iii) damage, in any material respect, the reputation or public image of any
Buyer Group Member, or (c) in connection with which injunctive relief is sought;
provided, however, that the term “Non-Assumable Claim” shall not include any
such third Person Claim to the extent such third Person Claim (A) relates to
breach of a warranty or representation set forth in Section 3.1(e) or
Section 3.2(n), (B) relates to matters described in Section 9.1(a)(iii)(A)-(D),
or (C) is governed by the provision of Section 9.4(c).

 

“Non-Assumable Claim Offer” is defined in Section 9.4(b).

 

“Notice of Disputed Amount” is defined in Section 1.10(a).

 

“Notice of Disputed Gain or Loss” is defined in Section 1.10(a).

 

“Obligor” means any borrower, lessee, buyer, debtor, guarantor or any other
obligor with respect to obligations owed to any Seller (or, as applicable under
Section 3.2, any Investment Vehicle) with respect to the Portfolio Assets.

 

“On-Lease Equipment” means all aircraft, vessels, equipment and other property
leased to a lessee Obligor under a Lease Contract together with any replacement
parts, additions and repairs thereto, any replacements thereof, and any
accessories incorporated therein and/or affixed thereto.

 

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“Operating Lease” means any Lease Contract that, as of a particular date, is
classified as an “operating lease” under Financial Standards Board Statement No.
13, as amended from time to time.

 

“Option Agreement” means each of the certain Option Agreements between Buyer and
certain Sellers in substantially the forms attached hereto as Exhibit K.

 

“Opt-out Assets” is defined in Section 1.6(h)(i).

 

“Other Assets” is defined in Section 1.1(a)(vii).

 

“Panel” is defined in Section 12.21.

 

“Paper Sale” is defined in Section 1.9(g).

 

“Paper Sale Net Proceeds” means, with respect to a Paper Sale, the cash
consideration received by Buyer in connection with such Paper Sale less Buyer’s
Costs of Disposition (not reimbursable by the purchaser in such Paper Sale).

 

“Parent” means The Boeing Company, a Delaware corporation.

 

“Party” is defined in Section 12.21.

 

“Patents” means issued U.S. and foreign patents and pending patent applications,
patent disclosures, and any and all divisions, continuations,
continuations-in-part, reissues, reexaminations, and extensions thereof, any
counterparts claiming priority therefrom, utility models, patents of
importations/confirmation, certificates of invention and similar statutory
rights.

 

“Permits” means all licenses, permits, franchises, approvals, authorizations,
consents or orders of, or filings with, any Governmental Authority, or any other
person, necessary or desirable for the past, present or anticipated conduct of,
or relating to the operation of the Business and the servicing and
administration of the Portfolio Assets.

 

“Person” means an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

 

“Portfolio Asset Permitted Encumbrances” means, with respect to any Portfolio
Property, (a) liens for Taxes and other governmental charges and assessments
which are not yet due and payable or which are being contested in good faith
(and, if such contest involves Taxes other than Income Taxes that are being so
contested as of the Initial Closing Date, which are described on the Schedule of
Pending Non-Income Tax Contests), (b) any other Encumbrance on the related
Obligor’s interest in such Portfolio Property that is specifically permitted in
accordance with the terms of the related Financing and Lease Asset (or any
applicable Portfolio Contract), (c) any Encumbrance created by any Law
applicable to real property including rights of way, easements, sewer rights,
zoning ordinances and other similar restrictions, (d) any other imperfections of
title, licenses or encumbrances, if any, which do not materially impair the

 

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continued use, operation or marketability of such Portfolio Property, (e) liens
of carriers, warehousemen, mechanics and materialmen and other like liens
arising in the ordinary course of business for sums not yet due and payable or
which are being contested in good faith, (f) liens or reservations of title
permitted under the related Financing and Lease Asset (or any applicable
Portfolio Contract), and (g) the rights of the Obligors under the Financing and
Lease Assets (or any applicable Portfolio Contracts).

 

“Portfolio Assets” means, collectively, (i) the Financing and Lease Assets, (ii)
the Equity Assets, (iii) the Assets Held for Sale or Lease, and (iv) the
Portfolio Property relating to the assets described in the foregoing clauses
(i), (ii) and (iii), together with (a) all rentals, lease payments, installments
of principal, interest, residual and renewal proceeds, penalties, late charges
and extension fees or other payments due or to become due thereunder, (b) all
rights and remedies of Sellers thereunder, (c) all insurance policies of Sellers
relating specifically to the Portfolio Assets, any refunds paid or payable in
connection with the cancellation or discontinuance of any such insurance
policies and any claims made with respect to such insurance policies, (d) all
rights, claims, credits, causes of action or rights of set-off of Sellers
against third parties relating to the Portfolio Assets, including claims
pursuant to all warranties, representations, indemnities and guarantees made by
suppliers, manufacturers, contractors and other third parties in connection with
products or services purchased by or furnished to Sellers affecting any of the
Portfolio Assets, (e) supplier, vendor franchisor, manufacturer and contractor
agreements, or other separate agreements with respect to the remarketing or
disposition of Portfolio Property or Assets Held for Sale or Lease, and (f) all
products and proceeds with respect to any of the foregoing in clauses (a)
through (e).

 

“Portfolio Contract” means any written contract, agreement, license, lease, loan
agreement, sales or purchase order or other legally binding commitment in the
nature of a contract, or security for any of the Portfolio Assets, to which any
Seller is a party or by which any of the On-Lease Equipment or Collateral is
bound, including any owner trust agreement, intercreditor agreement, collateral
sharing agreement, security agreement, assignment of rents, pledge agreement,
guaranty, indemnification agreement, letter of credit agreement, letters of
credit, other credit enhancements and instruments and documents of similar
nature and import.

 

“Portfolio Gain” means a Deemed Gain or Realized Gain as the context may
require.  Any gain realized by Buyer from an early termination by the Obligor
pursuant to the contractual provisions of a CFS Portfolio Financing and Lease
Asset shall not constitute a Portfolio Gain under this Agreement (although, if
applicable, such gain may constitute an EBO Gain pursuant to Section 1.9(h)). 
For the avoidance of doubt, any gain realized by Buyer (or otherwise deemed to
occur) with respect to a CFS Portfolio Financing and Lease Asset in connection
with (a) any early termination of such asset at the election of Buyer (i.e.,
Buyer consents to a non-contractual early termination of a CFS Portfolio
Financing and Lease Asset prior to its Scheduled Termination Date) or (b) any
property replacement or substitution or Roll-up described in
Sections 1.9(g)(iii) and (iv) shall not constitute a Portfolio Gain under this
Agreement.

 

“Portfolio Information” means that information set forth in Exhibit L.

 

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“Portfolio Loss” means a Deemed Loss or a Realized Loss, as the context may
require.  For the avoidance of doubt, any loss incurred by Buyer (or otherwise
deemed to occur) with respect to a CFS Portfolio Financing and Lease Asset in
connection with (a) any early termination of such asset at the election of Buyer
(i.e., Buyer consents to a non-contractual early termination of a CFS Portfolio
Financing and Lease Asset prior to its Scheduled Termination Date as such
Scheduled Termination Date exists as of the Initial Closing Date (in the case of
a Specified Financing and Lease Asset) or (b) any Roll-up or property
replacement or substitution described in Section 1.9(g)(iv) shall not constitute
a Portfolio Loss under this Agreement.

 

“Portfolio Performance Warranty” is defined in Section 10.1.

 

“Portfolio Property” means all On-Lease Equipment and Collateral.

 

“Post-Signing MAE Notice” is defined in Section 7.2.

 

“Premium Reduction Payment” means an amount equal to the Purchase Premium
multiplied by the Retained Portfolio Asset Percentage.

 

“Proposed Redeployed Asset” means a proposed Finance Obligation or Operating
Lease with respect to which Buyer, upon redeployment of such Asset, will be the
lender (or equivalent) or lessor.

 

“Proposed Redeployed Asset Disclosure Package” means with respect to any
Proposed Redeployed Asset, the following:  (a) copies of the proposed promissory
note, loan or credit agreement, installment sale contract or other financing
agreement or lease and all material financial terms of such proposed transaction
(together with, in each case, to the extent available, all applicable exhibits,
riders and annexes thereto and all ancillary documents, instruments and
agreements pertaining thereto); (b) written information identifying (with
supporting calculations and underlying data) Buyer’s proposed Stipulated Value,
Restated Residual Value (if any) and, if applicable, the present fair market
value of any non-cash consideration; (c) to the extent available, any appraisal
or other property valuation report or study obtained (or prepared) by Buyer in
connection with such Proposed Redeployed Asset (whether the value set forth in
such appraisal or other report or study was used by Buyer as its proposed
Stipulated Value or otherwise); and (d) any and all other existing documentation
and information in Buyer’s possession pertaining to such Proposed Redeployed
Asset as may be reasonably requested by Sellers.

 

“Purchase Premium” means One Hundred Forty Million Dollars ($140,000,000).

 

“Purchase Price” means an amount equal to the sum of:  (a) the Closing Book
Value of the Assets as reflected on the Final Closing Book Value of the Assets
Statement plus (b) the Purchase Premium (subject to adjustment pursuant to
Section 1.6(h)) minus (c) the Unapplied Cash (in the amount set forth on the
Final Closing Book Value of the Assets Statement).

 

“Purchased Financing and Lease Assets” means all Specified Financing and Lease
Assets actually purchased by Buyer pursuant to this Agreement.

 

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“Purchased Portfolio Assets” means all Specified Portfolio Assets actually
purchased by Buyer pursuant to this Agreement.

 

“Purchased Portfolio Contracts” means all Specified Portfolio Contracts actually
purchased by Buyer pursuant to this Agreement.

 

“PwC” is defined in Section 1.6(d).

 

“Quarterly Net Gain” for a particular calendar quarter means the amount (if any)
by which Portfolio Gains exceed Portfolio Losses for such quarter.

 

“Quarterly Net Loss” for a particular calendar quarter means the amount (if any)
by which Portfolio Losses exceed Portfolio Gains for such quarter.

 

“Real Estate Lease” is defined in Section 3.1(g)(i)(A).

 

“Realized Gain” means:

 

(a)           with respect to a Liquidated Defaulted Asset, WHERE the result of

 

(i) the Liquidation Proceeds received by Buyer in respect of such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s liquidation of such
asset, plus any Insurance Loss (if any) not previously treated as a Deemed Loss
applicable to the Affected Portfolio Property

 

is greater than the amount equal to

 

(x) the Applicable NAV of such asset as of the First Default Date minus

 

(y) any and all Recoveries and Return Condition Payments received by Buyer in
respect of such asset from and after the First Default Date up to and including
the date on which such asset was liquidated minus

 

(z) to the extent not already deducted in the determination of such Applicable
NAV, the aggregate amount of Deemed Losses theretofore attributable to such
Replaced Asset,

 

the amount of such excess;

 

(b)           with respect to a Liquidated Non-Defaulted Asset, WHERE the result
of

 

(i) the Liquidation Proceeds received by Buyer in respect of such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s liquidation of such
asset, minus any Insurance Gain (if any) or plus any Insurance Loss (if any)
that was not previously treated as a Deemed Gain (in the case of

 

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an Insurance Gain) or a Deemed Loss (in the case of an Insurance Loss)
applicable to the Affected Portfolio Property

 

exceeds the amount equal to

 

(x) the Applicable NAV of such asset as of the Termination Date therefor, minus

 

(y) any Return Condition Payments received by Buyer in respect of such asset
from and after the Termination Date up to and including the date on which such
asset was liquidated,

 

the amount of such excess;

 

(c)           with respect to an Asset Held for Sale or Lease that has become a
Liquidated Asset WHERE

 

(i) the Liquidation Proceeds received by Buyer in connection with such sale

 

exceed an amount equal to

 

(x) the Applicable NAV of such asset as of the date such asset was liquidated
minus

 

(y) Buyer’s Costs of Disposition with respect to Buyer’s Disposition of such
asset,

 

the amount of such excess;

 

(d) with respect to a Redeployed Asset for which there is a Deemed Gain and as
to which Sellers have elected not to exercise their option to treat such asset
as an SPRA pursuant to Section 1.9(d), an amount equal to the applicable Deemed
Gain for such asset;

 

(e)           with respect to a Paper Sale occurring within the twenty-four (24)
month period prior to the Scheduled Termination Date of the applicable CFS
Portfolio Financing and Lease Asset (or at any time thereafter in the case of a
First Amendment Lease), WHERE the Paper Sale Net Proceeds plus any Insurance
Gain or minus any Insurance Loss not previously treated as Deemed Gain (in the
case of Insurance Gain) or Deemed Loss (in the case of Insurance Loss) exceed
the Applicable NAV of such asset as of the date of such sale, the amount of such
excess; and

 

(f)            with respect to a Destroyed Asset, WHERE the Insurance Proceeds
relating to such Destroyed Asset exceed the Applicable NAV for the Destroyed
Asset at the time of destruction of the Destroyed Asset, the amount of such
excess.

 

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“Realized Loss” means:

 

(a)           with respect to a Liquidated Defaulted Asset WHERE the result of

 

(i) the Liquidation Proceeds received by Buyer in respect of such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s liquidation of such
asset plus any Insurance Loss (if any) not previously treated as a Deemed Loss
applicable to the Affected Portfolio Property

 

is less than the amount equal to

 

(x) the Applicable NAV of such asset as of the First Default Date minus

 

(y) any and all Recoveries and Return Condition Payments received by Buyer in
respect of such asset from and after the First Default Date up to and including
the date on which such asset was liquidated minus

 

(z) to the extent not already deducted in the determination of such Applicable
NAV, the aggregate amount of Deemed Losses theretofore attributable to such
asset,

 

the amount of such shortfall;

 

(b)           with respect to a Liquidated Non-Defaulted Asset WHERE the result
of

 

(i) the Liquidation Proceeds received by Buyer in respect of such asset minus

 

(ii) Buyer’s Costs of Disposition with respect to Buyer’s liquidation of such
asset, minus any Insurance Gain (if any) or plus any Insurance Loss (if any)
that was not previously treated as a Deemed Gain (in the case of an Insurance
Gain) or a Deemed Loss (in the case of an Insurance Loss) applicable to the
Affected Portfolio Property

 

is less than the amount equal to

 

(x) the Applicable NAV of such asset as of the Termination Date therefor, minus

 

(y) any and all Return Condition Payments received by Buyer in respect of such
asset from and after the Termination Date up to and including the date on which
such asset was liquidated,

 

the amount of such shortfall;

 

(c)           with respect to an Asset Held for Sale or Lease that has become a
Liquidated Asset WHERE

 

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(i) the Liquidation Proceeds received by Buyer in connection with such sale

 

are less than an amount equal to

 

(x) the Applicable NAV of such asset as of the date such asset was liquidated
minus

 

(y) Buyer’s Cost of Disposition with respect to Buyer’s Disposition of such
asset,

 

the amount of such shortfall;

 

(d)           with respect to a Redeployed Asset for which there is a Deemed
Loss and as to which Sellers have elected not to exercise their option to treat
such Asset as an SPRA pursuant to Section 1.9(d), an amount equal to the
applicable Deemed Loss for such asset;

 

(e)           with respect to a Destroyed Asset, WHERE the Insurance Proceeds
relating to such Destroyed Asset are less than the Applicable NAV for the
Destroyed Asset at the time of destruction of the Destroyed Asset, the amount of
such shortfall; and

 

(f)            with respect to a Paper Sale of (i) any Designated Energy
Financing and Lease Asset or (ii) any Defaulted Asset, or Redeployed Defaulted
Asset that is a Fixed Asset, WHERE the Paper Sale Net Proceeds are less than the
Applicable NAV of such asset as of the date of such sale, the amount of such
shortfall.

 

For the avoidance of doubt, except as set forth above regarding losses on Paper
Sales of the Designated Energy Financing and Lease Assets, Redeployed Defaulted
Assets that are Fixed Assets and Defaulted Assets, Sellers shall have no
obligation to reimburse Buyer or any of its successors, assignees or transferees
for any loss on any Paper Sale.

 

“Reasonable Inquiry” means reasonable inquiry of Sellers’ employees who would
reasonably be expected to have facts and information relating to the underlying
question at issue.

 

“Records” means, with respect to the CFS Portfolio (or any applicable part
thereof), all the ledgers, journals, bookkeeping memoranda, account cards,
reports, computer listings, indexes, stored computer data cards, Obligor files,
credit files, collateral records, an original or copy of all client lists and
vendor (including suppliers, manufacturers, contractors, customers, borrowers
and lenders) lists, if any, certificates of title (including vehicle titles,
ownership certificates and the like) and all other correspondence, memoranda,
books and records with respect to the CFS Portfolio or applicable part thereof
(including with respect to Financing and Lease Assets, Collateral, Equity
Assets, On-Lease Equipment, Assets Held for Sale or Lease and, from and after
the Initial Closing Date, any Seller Participating Renegotiated Assets), of
Sellers or of Buyer, as the context shall require.

 

“Recoveries” means, with respect to any Defaulted Asset, monies collected in
respect thereof, from whatever source (including payments made under or
collected in respect of

 

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Credit Enhancements but excluding liability insurance or indemnities), net of
any amounts required by Law to be remitted to the related Obligor or its
Affiliates; provided that Recoveries with respect to any Defaulted Asset shall
in no event be less than zero.  “Recoveries” shall not include Deemed Loss
payments.

 

“Redeployed Asset” means a Redeployed Defaulted Asset or a Redeployed
Non-Defaulted Asset, as applicable.

 

“Redeployed Defaulted Asset” means a promissory note, loan or credit agreement
or other financing agreement or lease or similar rental or use arrangement with
respect to which Buyer is the lender (or equivalent) or lessor, which note,
agreement, lease or arrangement arose in connection with the Disposition of
Portfolio Property theretofore subject to a Defaulted Asset at the time of such
Disposition.

 

“Redeployed Non-Defaulted Asset” means a promissory note, loan or credit
agreement or other financing agreement or lease or similar rental or use
arrangement with respect to which Buyer is the lender (or equivalent) or lessor,
which note, agreement, lease or arrangement arose in connection with the
Disposition of Portfolio Property (a) theretofore subject to a CFS Portfolio
Financing and Lease Asset that was not a Defaulted Asset at the time of such
Disposition or (b) constituting an Asset Held for Sale or Lease.

 

“Redeployment Period” is defined in the definition of “Deemed Gain.”

 

“Refurbishment” means, with respect to any Portfolio Property subject to a CFS
Portfolio Financing and Lease Asset, cleaning, painting or similar costs in
connection with placing such Portfolio Property in a readily marketable
condition or an improvement thereof, whether such improvement is accomplished by
the incorporation of replacement components, parts or other property, by
“adding-on” supplemental components or other property, or otherwise, which
improvement is expensed by Buyer in accordance with Buyer’s normal and customary
accounting policies in accordance with GAAP.

 

“Replaced Asset” means, with respect to any Redeployed Asset, the CFS Portfolio
Financing and Lease Asset that, due to the termination thereof (for any reason)
gave rise to Buyer’s Disposition of the related Portfolio Property and thereby
resulted in the creation of such Redeployed Asset.

 

“Required Consents” is defined in Section 3.2(v).

 

“Requirements of Law” means any foreign, federal, state and local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Authority or any stock exchange or national
market system.

 

“Restated Residual Value” means, with respect to any item of Portfolio Property
relating to any Redeployed Asset, its estimated value upon the Scheduled
Termination Date of such Redeployed Asset, in each case as determined in
accordance with the provisions of Section 1.9(d).

 

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“Retained Portfolio Asset Percentage” means an amount (expressed as a
percentage) equal to (i) the aggregate Applicable NAV as of the Initial Closing
Date of the Opt-out Assets divided by (ii) the aggregate Applicable NAV of the
Total Subject Assets, in each case as the Applicable NAV for such assets is set
forth in the Final Closing Book Value of Assets Statement.

 

“Retention Agreements” means the agreements set forth on Schedule 3.1(p-(ii)).

 

“Return Condition Payments” means payments received by Buyer from or on behalf
of an Obligor in connection with such Obligor’s return to Buyer (or Buyer’s
designee) of the Portfolio Property relating to a CFS Portfolio Financing and
Lease Asset in the nature of amounts due and payable as a result of such
Obligor’s failure to deliver such Portfolio Property in compliance with required
return conditions (e.g., deferred maintenance liability).

 

“Roll-up” means, with respect to any Portfolio Property relating to an IER or
SPRA (constituting, in either case, a CFS Portfolio Financing and Lease Asset),
a transaction or series of related transactions as a result of which such IER or
SPRA is terminated and immediately replaced with a new schedule or other similar
document (of a similar nature to an IER or SPRA), which schedule or other
document covers (whether as a lease or financing device) such Portfolio Property
and other separately identifiable (i.e. non-integrated) property.

 

“Scheduled Termination Date” means, with respect to (a) any Finance Obligation
(other than a Finance Lease) the date set forth therein as the scheduled
maturity date for the obligations of the Obligor thereunder and (b) any Lease
Contract, the date set forth therein as the scheduled lease termination date
(whether referred to as the “maturity date,” “expiration date,” “termination
date” or words of similar meaning, in each case without, however, giving effect
to any option to extend (or automatic extension of) such scheduled lease
termination date or any “early buy-out” (i.e, an optional equipment purchase)
right).  For the avoidance of doubt, the Scheduled Termination Date of any First
Amendment Lease shall be the first contractually scheduled termination date
thereof.

 

“Section 467 Loan” has the meaning specified in Treas. Reg. 1.467-4 (without
regard to 1.467-4(a)(2)).

 

“Section 467 Loan Balance” means a Lessee Section 467 Loan Balance or a Seller
Section 467 Loan Balance.

 

“Securitization” means any sale or assignment by Buyer of the revenue stream
attributable to a CFS Portfolio Financing and Lease Asset (but not the related
Portfolio Property) in which the accounting for Applicable NAV and Booked
Residual Value pursuant to this Agreement shall not be affected as a result of
such sale or assignment.  For the avoidance of doubt, entering into a
Securitization by Buyer shall not be considered to be a Disposition and shall
not, as a result of such transaction, affect the calculation of Deemed Gain,
Deemed Loss, Realized Gain or Realized Loss.

 

“Seller Group Member” means Sellers, their Affiliates and their respective
directors, officers, employees, agents, attorneys and consultants and their
successors and assigns.

 

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“Seller Postponed Redeployed Asset” means a Redeployed Asset with respect to
which the applicable Seller has elected to postpone the measurement of the Earn
Out Amount pursuant to Section 1.9(d). 

 

“Seller Section 467 Loan Balance” means (i) a Section 467 Loan balance owed by
any Seller to any lessee Obligor as of any applicable Closing Date or (ii) any
rents that are paid in advance to any Seller by any lessee Obligor for the
rental period that includes such Closing Date.

 

“Seller Transaction Documents” means all agreements, instruments and documents
being or to be executed and delivered by Sellers under this Agreement or in
connection herewith, including each of the documents listed on Schedule 2.3
hereto, but specifically excluding the Portfolio Assets.

 

“Sellers” is defined in the preamble of this Agreement.

 

“Sellers’ Accountants” means Deloitte & Touche LLP or any public accounting firm
with nationally recognized auditing expertise (other than Buyer’s Accountants),
as selected by Sellers.

 

“Sellers’ Breach Notice” is defined in Section 11.1(a)(iii).

 

“Sellers’ Savings Plan” is defined in Section 6.2(f).

 

“Serviced Assets” mean, collectively, the Financing and Lease Assets (including
those held by Investment Vehicles) subject to the Servicing Agreement from time
to time.

 

“Servicing Agreement” means a servicing agreement between Buyer and Boeing
Capital and any of the Sellers as indicated thereon substantially in the form of
Exhibit H.

 

“Software” is defined in the definition of “Intellectual Property”.

 

“Specialized Audit Steps” means the annual audit steps to be taken by Buyer’s
Accountants as more particularly described in Exhibit I.

 

“Specified Financing and Lease Assets” means the Financing and Lease Assets in
existence as of the Initial Closing Date related to the IERs identified on
Schedule 1.3 and, in addition, Federal Mogul Schedule.

 

“Specified Portfolio Assets” means (i) the Specified Financing and Lease Assets,
(ii) the Equity Assets, (iii) the Assets Held for Sale or Lease and (iv) any and
all Portfolio Assets relating to the assets described in the foregoing
clauses (i), (ii) and (iii).

 

“Specified Portfolio Contracts” means the Portfolio Contracts relating to the
Specified Financing and Lease Assets.

 

“SPRA” means Seller Postponed Redeployed Asset.

 

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“Stipulated Value” means:

 

(a)           with respect to any SPRA, the net asset value for such SPRA as
mutually agreed upon among Buyer and Sellers (pursuant to Sellers’ election to
treat the applicable Redeployed Asset as a SPRA pursuant to Section 1.9(d)),
which net asset value shall be recorded in Buyer’s Records as the Applicable NAV
for such SPRA as of the date of its inception.

 

(b)           with respect to any Redeployed Asset that is not a SPRA where the
property subject to such Redeployed Asset constitutes Movable Equipment, the
fair market value of such property as may be mutually agreed upon among Buyer
and Sellers, provided that if Buyer and Sellers are unable to agree upon a fair
market value for such property within thirty (30) days of Buyer’s delivery of
the applicable Proposed Redeployed Asset Disclosure Package therefor, then such
fair market value shall be determined by the Independent Appraiser in accordance
with Section 1.10(b).  In determining the fair market value for such property,
the Independent Appraiser shall value the property based upon an open market
sale between a willing buyer and willing seller, assuming the present condition
of the property and that it will be sold in “as is” condition within 270 days.

 

(c)           with respect to any Redeployed Asset that is not a SPRA where the
property subject to such Redeployed Asset constitutes a Fixed Asset or group of
Fixed Assets, the orderly liquidation value of such property as may be mutually
agreed upon among Buyer and Sellers, provided that if Buyer and Sellers are
unable to agree upon a orderly liquidation value for such property within thirty
(30) days of Buyer’s delivery of the Proposed Redeployed Asset Disclosure
Package therefor, then such orderly liquidation value shall be determined by the
Independent Appraiser in accordance with Section 1.10(b).  In determining the
orderly liquidation value for such property, the Independent Appraiser shall
value the property based on an open market sale between a willing buyer and
willing seller from its present location on an “as is” condition, “where is”
location basis in which the buyer assumes the cost to dismantle and remove the
property and that the property is sold within 150 days.

 

“Subsequent Closings” means the date or dates of the consummation of the
transactions contemplated by this Agreement with respect to all or some of the
Portfolio Assets not sold, conveyed, transferred, assigned and delivered to
Buyer at the Initial Closing.

 

“Tax” (and, with correlative meaning, “Taxes”) means any federal, state, local
or foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any Governmental Authority.

 

“Tax Return” means any return, report or similar statement required to be filed
with respect to any Tax (including any attached schedules and related
workpapers), including any information return, claim for refund, amended return
or declaration of estimated Tax and any affiliated, consolidated, combined,
unitary or similar return.

 

“Tentative Portfolio Performance Warranty Amount” is defined in Section 10.2(a).

 

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“Tentative Portfolio Performance Warranty Payment” is defined in Section 10.1.

 

“Tentative Portfolio Performance Warranty Payment Refund” is defined in
Section 10.2(b).

 

“Termination Date” means, with respect to any CFS Portfolio Financing and Lease
Asset, the date upon which either (a) all of the applicable Obligor’s
obligations thereunder shall have been discharged (or deemed by Buyer to have
been discharged) in full or (b) such asset shall have become a Liquidated Asset
or a Redeployed Asset.

 

“Total Subject Assets” is defined in Section 1.6(h)(i).

 

“Transferred Employee” is defined in Section 6.2(a).

 

“Transition Services Agreement” means a transition services agreement
substantially in the form of Exhibit J.

 

“Triggering Event” means (a) with respect to a Defaulted Asset (i) if such asset
is not an Operating Lease, Buyer’s (A) posting of a specific reserve on its
books and records against the Applicable NAV of such asset or (B) ”writedown” or
“write-off” of all or any part of the Applicable NAV of such asset and (ii) if
such asset is an Operating Lease, Buyer’s “writedown” or “write-off” of all or
any part of the Applicable NAV of such asset, and (b) with respect to any CFS
Portfolio Financing and Lease Asset (whether a Defaulted Asset or otherwise),
Buyer posts a specific reserve on its books against the Applicable NAV of such
asset or to “writedown” or “write-off” all or any part of the Applicable NAV of
such asset, in each case, to the extent any such specific reserve, “writedown”
or “write-off” is posted or made as required or permitted by GAAP and consistent
with Buyer’s accounting principles, as in effect from time to time.

 

“Undisputed Portfolio Gain” means any Portfolio Gain reflected on a Gain/Loss
Statement with respect to which Sellers do not submit a Notice of Disputed Gain
or Loss in accordance with Section 1.10(a).

 

“Undisputed Portfolio Loss” means any Portfolio Loss reflected on a Gain/Loss
Statement with respect to which Sellers do not submit a Notice of Disputed Gain
or Loss in accordance with Section 1.10(a).

 

“Upgrade” means, with respect to any Portfolio Property subject to a CFS
Portfolio Financing and Lease Asset (including those held by any Investment
Vehicle), an improvement thereof, whether such improvement is accomplished by
the incorporation of replacement components, parts or other property, by
“adding-on” supplemental components or other property, or otherwise, which
improvement is capitalized by Buyer in accordance with Buyer’s normal and
customary accounting policies in accordance with GAAP.

 

“Zero Balance Financing and Lease Assets” means, collectively, the Financing and
Lease Assets described on Schedule 1.1(b)(ii), which, as of the date hereof, the
applicable Sellers carry on their respective books of account as “written-off”
assets (i.e., assets written-down to zero) together with any and all property
encumbered by or leased pursuant to such Financing and Lease Assets.

 

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[THIS SPACE INTENTIONALLY LEFT BLANK -
SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Purchase and Sale
Agreement to be executed as of the day and year first above written.

 

 

 

BOEING CAPITAL CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Walter E. Skowronski

 

 

 

Name:

Walter E. Skowronski

 

 

Title:

President

 

 

 

 

 

 

 

 

BCC EQUIPMENT LEASING
CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Walter E. Skowronski

 

 

 

Name:

Walter E. Skowronski

 

 

Title:

President

 

 

 

 

 

 

 

 

MCDONNELL DOUGLAS OVERSEAS
FINANCE CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Walter E. Skowronski

 

 

 

Name:

Walter E. Skowronski

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

BOEING CAPITAL LOAN
CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Walter E. Skowronski

 

 

 

Name:

Walter E. Skowronski

 

 

Title:

President

 

 

 

 

 

 

 

 

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Mark H.S. Cohen

 

 

 

Name:

Mark H.S. Cohen

 

 

Title:

Vice President

 

1

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For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, The Boeing Company, a Delaware corporation (“Parent”),
hereby irrevocably and unconditionally promises to pay each of the payment
obligations of the Sellers (including those related to indemnity claims) set
forth in this Agreement (each an “Obligation” and altogether the “Obligations”).

 

Parent will pay all Obligations hereunder upon any one or more of the following:

 

(a) Sellers shall have failed to satisfy their payment obligations pursuant to
this Agreement for at least thirty (30) Business Days;

 

(b)  Boeing Capital dissolves or otherwise ceases to exist; or

 

(c) Boeing Capital institutes or consents to the institution of any proceeding
under a Debtor Relief Law relating to it or to all or any material part of its
property, or is unable or admits in writing its inability to pay its debts as
they mature, or makes an assignment for the benefit or creditors; or Boeing
Capital applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or
for all or any material part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of Boeing Capital and the
appointment continues undischarged or unstayed for sixty (60) calendar days; or
any proceeding under a Debtor Relief Law relating to Boeing Capital or to all or
any part of its property is instituted without its consent and continues
undismissed or unstayed for sixty (60) calendar days.

 

2

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Buyer Group Members will provide notice to Parent of a claim hereunder by
delivering to Parent a written notice stating (i) that the Buyer Group Member
has delivered a claim for an Obligation to Sellers and attaching a copy thereof
and (ii) the amount of the Obligation unpaid by Sellers with respect to such
claim; provided, however, that following the occurrence of (b) or (c) above, all
claims for Obligations may be delivered directly to Parent.

 

 

 

THE BOEING COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Joseph T. Lower

 

 

 

Name:

Joseph T. Lower

 

 

Title:

Vice President – Corporate & Strategic
Development

 

1

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Schedules

 

 

1.1

 

Sellers

1.1(a)(i)

 

Assets Held for Sale or Lease (included in Specified Portfolio Assets)

1.1(a)(ii)

 

Equipment

1.1(a)(iii)

 

Assigned Contracts

1.1(a)(vi)

 

Other Assets

1.1(b)(ii)

 

Zero Balance Financing and Lease Assets

1.1(b)(xv)

 

Designated Excluded Assets

1.2(b)(v)

 

Advance Rents, Deposits, Maintenance, Reserves or Other Payments or Deposits

1.3

 

Specified Financing and Lease Assets and Equity Assets (including 4/30/04 NAV
Table)

1.4

 

Allocation of Purchase Price

1.9(a)(iv)

 

Reports

2.1

 

Deferred Assets

2.2

 

Buyer Transaction Documents

2.3

 

Seller Transaction Documents

3.1(b)

 

Sellers’ Conflicts

3.1(c)

 

Financial Statements

3.1(f)

 

Governmental Permits

3.1(i)

 

Software Contracts

3.1(j)

 

Litigation – Seller

3.1(k)

 

Contracts

3.1(n-(i))

 

Benefit Plans

3.1(n-(iii))

 

Exceptions to Benefits

3.1(p-(ii))

 

Retention Agreements

3.1(q)

 

Undisclosed Liabilities

3.2(g)(i)

 

Late Payments/Prepayments

3.2(g)(ii)

 

Advance Rents, Other Payments or Deposits

3.2(g)(v)

 

Exceptions to Insurance Portfolio Property Coverage

3.2(h)

 

Claims/Proceedings

3.2(i)

 

Undelivered Specified Financing and Lease Assets; Undelivered Portfolio Property

3.2(j)

 

Obligor Bankruptcy

3.2(l)

 

On-Lease Equipment Casualty

3.2(o)

 

Non-Direct Payments; Other Agreements

3.2(r)

 

Designated Credit Enhancements

3.2(s)

 

Foreign Specified Financing and Lease Assets/Credit Enhancement/Foreign Obligors

3.2(v)

 

Required Consents

3.2(x)

 

Waiver of Material Rights

3.3

 

Equity Assets

5.3

 

Operations Prior to the Closing Date

9

 

Indemnification

9.1(a)(iii)(B)

 

Interests Treated as Partnerships

 

i

--------------------------------------------------------------------------------

 

10

 

Special Warranty

13.1

 

Business Asset Permitted Encumbrances

13.2

 

Designated Energy Financing and Lease Assets

 

ii

--------------------------------------------------------------------------------

 

Exhibits

 

Exhibit A

 

Accounting Principles

 

 

 

Exhibit B

 

Assignment and Assumption Agreement

 

 

 

Exhibit C

 

Agreed Audit Procedures

 

 

 

Exhibit D

 

Bill of Sale

 

 

 

Exhibit E

 

Buyer’s Asset Restructuring Policy

 

 

 

Exhibit F

 

Gain/Loss Statement

 

 

 

Exhibit G

 

Notice to Obligors

 

 

 

Exhibit H

 

Servicing Agreement

 

 

 

Exhibit I

 

Specialized Audit Steps

 

 

 

Exhibit J

 

Transition Services Agreement

 

 

 

Exhibit K

 

Option Agreement

 

 

 

Exhibit L

 

Portfolio Information

 

iii

--------------------------------------------------------------------------------

 

 

Schedule 1.1

 

Sellers

 

Legal Name

 

Jurisdiction of Organization

 

 

 

BCC Equipment Leasing Corporation

 

Delaware

 

 

 

McDonnell Douglas Overseas Finance Corporation

 

Delaware

 

 

 

Boeing Capital Loan Corporation

 

Delaware

 

--------------------------------------------------------------------------------

 

Schedule 1.1(a)(i)

 

Assets Held for Sale or Lease

 

ASSETS HELD FOR SALE OR LEASE

NAV as of 4/30/04

 

Customer Name

 

Lease
Sched

 

Property Class Long

 

Equipment Desc Short

 

NAV  as of
4/30/04

 

AMERICAN STANDARD INC.

 

0031203-025

 

MACHINE TOOLS MACHINING CENTER

 

MACHINE TOOLS

 

25,000.00

 

AMERICAN STANDARD INC.

 

0031203-045

 

MFG EQUIP OTHER

 

WELDING ROBOT

 

5,742.34

 

AMERICAN STANDARD INC.

 

0031203-047

 

MFG EQUIP OTHER

 

WELDING ROBOT

 

2,464.49

 

AMERICAN STANDARD INC.

 

0031203-125

 

MACHINE TOOLS MACHINING CENTER

 

MACHINE TOOLS

 

25,000.00

 

CARGILL, INC.

 

0030411-072

 

MATL HNDLG EQ FORKLIFT TRUCK

 

FORKLIFT

 

1.00

 

GALVPRO L.P.

 

0035259-005

 

MATL HNDLG EQ OTHER

 

CASTER TRAILOR

 

2,400.00

 

GLOBAL AIR CHARTER, INC

 

0042045-001

 

1982 LEARJET 35A S/N472

 

LEARJET 35A

 

2,847,295.51

 

GREAT DANE AIRLINE, INC.

 

0040541-001

 

1979 LEARJET 35A S/N237

 

LEARJET 35A

 

2,535,673.63

 

STONE CONTAINER CORP.

 

0030791-022

 

TRLRS SINGLE DRY VAN 48’ X102’

 

DRY VAN TRAILERS

 

6,510.00

 

STONE CONTAINER CORP.

 

0030791-095

 

1998 VOLVO WG42T 4X2 TRACTORS

 

TRACTORS

 

19,678.92

 

STONE CONTAINER CORP.

 

0030791-195

 

1998 VOLVO WG42T 4X2 TRACTORS

 

TRACTORS

 

19,678.92

 

STONE CONTAINER CORP.

 

0030791-295

 

1998 VOLVO WG42T 4X2 TRACTORS

 

TRACTORS

 

9,839.46

 

TRANSAMERICA EQUIPMENT LEASING

 

0027474-001

 

TRLRS PIGGYBACK 45’ X 102’

 

TRAILERS

 

139,724.38

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-017

 

MACHINE TOOLS GRINDERS

 

MACHINE TOOLS

 

10,145.40

 

UNITED STATES STEEL CORP

 

0035204-106

 

WALDON 6000C FORKLIFT

 

FORKLIFT

 

5,500.00

 

 

 

 

 

 

 

 

 

 

 

TOTAL*

 

 

 

 

 

 

 

5,654,654.05

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

*Excludes “Excluded Asset” RAFIK KHALIFA with NAV of

 

 

 

36,691,096.50

 

 

--------------------------------------------------------------------------------

 

Schedule 1.1(a)(ii)

 

Equipment

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 1.1(a)(iii)

 

Assigned Contracts

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 1.1(a)(vi)

 

Other Assets

 

Acct Description

 

Buyer

 

Property Tax Receivable

 

208,556

 

 

 

 

 

Sales Tax Rec - CLAS

 

156,481

 

 

 

 

 

Federal Mogul - Unsigned Schedule 5

 

103,772

 

 

 

 

 

Total

 

468,809

 

 

--------------------------------------------------------------------------------

 

Schedule 1.1(b)(ii)

 

ZERO BALANCE FINANCING ASSETS

As of 4/30/04

 

Customer Name

 

Lease Sched

 

Property Class Long

 

Equipment Desc Short

 

NAV

 

 

 

 

 

 

 

 

 

 

 

CSU TRANSPORT INC.

 

0039171-013

 

TRACTORS PETERBILT OCNV/NONSLP

 

TRACTOR

 

—

 

CSU TRANSPORT INC.

 

0039171-020

 

TRACTORS PETERBILT OCNV/NONSLP

 

TRACTOR

 

—

 

CSU TRANSPORT INC.

 

0039171-022

 

CHEVROLET SERVICE TRUCK

 

TRUCK

 

—

 

CSU TRANSPORT INC.

 

0039171-023

 

TRACTORS PETERBILT OCNV/NONSLP

 

TRACTORS

 

—

 

PROFICIENT FOODS

 

0030387-016

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-017

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-018

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-019

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-029

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-030

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-031

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-032

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-033

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-034

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-035

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-036

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-044

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-045

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-046

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-047

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-048

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-050

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-051

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-052

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-053

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-054

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-056

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-058

 

TRLRS REEFER OTHER

 

REEFER TRAILERS

 

—

 

PROFICIENT FOODS

 

0030387-061

 

MATL HNDLG EQ WAREHOUSE EQUIP

 

RACKING

 

—

 

PROFICIENT FOODS

 

0030387-063

 

WHITE GMC COE 6X4 SLEEPER TRAC.

 

TRACTORS

 

—

 

PROFICIENT FOODS

 

0030387-068

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-070

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-071

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-072

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-073

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-074

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-075

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-076

 

TRLRS REEFER OTHER

 

REFRIGERATED TRAILER

 

—

 

PROFICIENT FOODS

 

0030387-085

 

TRACTORS WHITE GMC CONV/NONSLP

 

TRACTORS

 

—

 

PROFICIENT FOODS

 

0030387-183

 

TRACTORS NAVISTAR COE SLEEPER

 

TRACTORS

 

—

 

STONE CONTAINER CORP.

 

0030213-005

 

TRLRS SINGLE DRY VAN 48’ X102’

 

DRY VAN TRAILERS

 

—

 

STONE CONTAINER CORP.

 

0030213-009

 

TRACTORS KENWORTH CONV/NON-SLP

 

TRACTOR

 

—

 

STONE CONTAINER CORP.

 

0030213-012

 

TRLRS SINGLE DRY VAN 48’ X102’

 

DRY VAN TRAILERS

 

—

 

STONE CONTAINER CORP.

 

0030213-015

 

TRACTORS NAVISTAR CONV/NON-SLP

 

TRACTOR

 

—

 

STONE CONTAINER CORP.

 

0030791-061

 

TRACTORS NAVISTAR CONV/NON-SLP

 

TRACTOR

 

—

 

WEIRTON STEEL CORPORATION

 

0031484-019

 

MATL HNDLG EQ FORKLIFT TRUCK

 

MATERIAL HANDLING

 

—

 

WEIRTON STEEL CORPORATION

 

0031484-020

 

MATL HNDLG EQ OTHER

 

MATERIAL HANDLING

 

—

 

 

--------------------------------------------------------------------------------

*Excludes “Excluded Asset” Guardian Savings and Loan

 

--------------------------------------------------------------------------------

 

ACCOUNTS WITH POTENTIAL RECOVERIES OR WHERE PREFERENCE CLAIMS (P) ARE BEING
DEFENDED AGAINST

As of 4/30/04

 

Customer Name

 

Lease Sched

 

 

 

 

 

NAV

 

 

 

 

 

 

 

 

 

 

 

ALLIED PRODUCTS

 

0036859

 

 

 

 

 

—

 

AMERICAN STANDARD

 

0031203

 

 

 

 

 

—

 

AMERISERVE

 

0035604

 

 

 

 

 

—

 

BALDWINS LEASING

 

0039728

 

 

 

 

 

—

 

BULK MATERIALS

 

0028860

 

 

 

 

 

—

 

FURR’S SUPERMARKET

 

0032524

 

 

 

 

 

—

 

GALVPRO

 

0035259

 

 

 

 

 

—

 

GLENIOT

 

0035559

 

 

 

 

 

—

 

GUARDIAN SAVINGS

 

0029058

 

 

 

 

 

—

 

JODA PARTNERSHIP

 

0035493

 

 

 

 

 

—

 

JOHNSTON INDUSTRIES (P)

 

0035048

 

 

 

 

 

—

 

LOS CIPRESES

 

0035726

 

 

 

 

 

—

 

NATIONAL PICTURE FRAME

 

0034496

 

 

 

 

 

—

 

NATIONAL STEEL (P)

 

0035204

 

 

 

 

 

—

 

NEUVANT

 

0035266

 

 

 

 

 

—

 

PROGRESSIVE DAIRIES

 

0034819

 

 

 

 

 

—

 

SHELDAHL EQUIPMENT

 

0031229

 

 

 

 

 

—

 

TRISM EQUIPMENT

 

0034129

 

 

 

 

 

—

 

TYLER JET

 

0034861

 

 

 

 

 

—

 

VALLEY MEDIA (P)

 

0034418

 

 

 

 

 

—

 

WELDED TUBE (LTV)

 

0036682

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

 

 

 

 

 

 

 

—

 

 

--------------------------------------------------------------------------------

 

As of April 30, 2004

 

Schedule 1.1(b)(xv)

Designated Excluded Assets

 

Customer Name

 

Lease Sched

 

Property Class Long

 

Equipment Desc Short

 

NAV as of
4/30/04

 

BNJ SALES COMPANY, LLC

 

1002511

 

AIRCRAFT JET UNSECURED

 

191QS

 

23,335,982

 

BOEING COMPANY, THE

 

0037137-001

 

AIRCRAFT JET

 

BBJ

 

43,129,552

 

BOEING COMPANY, THE

 

0037137-002

 

AIRCRAFT JET

 

BBJ

 

1,110,750

 

BOEING COMPANY, THE

 

0037459-001

 

AIRCRAFT JET

 

BBJ

 

26,226,387

 

BOEING COMPANY, THE

 

0037459-002

 

AIRCRAFT JET

 

BBJ

 

20,680,875

 

BOEING COMPANY, THE

 

0037459-003

 

AIRCRAFT JET

 

BBJ

 

3,889,464

 

BOEING SPACE AND

 

0040985-001

 

AIRCRAFT NON-PRODUCT HELICOPTE

 

EUROCOPTER

 

3,201,514

 

BOEING SPACE AND

 

0040985-002

 

AIRCRAFT NON-PRODUCT HELICOPTE

 

EUROCOPTER

 

3,195,212

 

CITRUS WORLD, INC.

 

0040774-001

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

962,423

 

CITRUS WORLD, INC.

 

0040774-002

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

459,581

 

CITRUS WORLD, INC.

 

0040774-003

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

7,960,910

 

CITRUS WORLD, INC.

 

0040774-004

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

8,478,197

 

CITRUS WORLD, INC.

 

0040774-005

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

8,379,195

 

CITRUS WORLD, INC.

 

0040774-006

 

FOOD PROCESSING EQUIPMENT

 

LAND AND EQUIPMENT

 

16,121,203

 

WARREN DISTRIBUTION

 

0034529-001

 

MISCELLANEOUS

 

OIL STORAGE TANKS

 

43,087

 

GUARDIAN SAVINGS AND LOAN

 

1004811

 

NON-EQUIPMENT

 

MARKETABLE SECURITY

 

—

 

GOLDEN GEMS

 

1004511

 

FOOD PROCESSING EQUIPMENT

 

E TANK FARM

 

503,729

 

GOLDEN GEMS

 

1004512

 

FOOD PROCESSING EQUIPMENT

 

FOR GOLDEN GEM GROWERS

 

—

 

RAFIK A. KHALIFA

 

0041407-101

 

AIRCRAFT JET

 

BBJ

 

36,691,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total NAV

 

204,369,157

 

 

Please note that the following interests are also excluded:

 

(1)  A 1% partnership interest in MDFC/Mitsui Leasing Partnership, a California
general partnership.

 

(2)  A 1% membership interest in Portland Tube Facility, L.L.C., a Delaware
limited liability company.

 

(3)  A 13% beneficial interest in Bethlehem Steel Corp 2000 Equipment Trust No.
1.

 

(4)  A 12.684% partnership interest in Cylinder Head Line Partnership,
consisting of a portion of the “Seller’s Interest” as referenced in the
Participation Agreement, dated as of August 26, 2002, by and between
Transamerica Equipment Financial Services Corporation and BCC Equipment Leasing
Corporation, a Delaware corporation, and the Participation Agreement, dated as
of August 27, 2002, by and between UPS Capital Corporation, a Delaware
corporation, and BCC Equipment Leasing Corporation, a Delaware corporation.

 

(5)  The Color Line and Gateway interests referenced on Exhibit A to the
Servicing Agreement.

 

--------------------------------------------------------------------------------

 

Schedule 1.2(b)(v)

 

Advance Rents, Deposits, Maintenance, Reserves or Other Payments or Deposits

 

See Schedule 3.2(g)(ii).

 

--------------------------------------------------------------------------------

Schedule 1.3

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

ACCESS LEASING CORPORATION

 

1000111

 

1,842,067

 

 

 

ADELPHIA COMMUNICATIONS CORP.

 

0035171-001

 

245,148

 

63,581

 

ADELPHIA COMMUNICATIONS CORP.

 

0035171-002

 

3,089,255

 

801,921

 

ADELPHIA COMMUNICATIONS CORP.

 

0035171-003

 

561,220

 

135,124

 

AERO TOY STORE, INC.

 

1000311

 

8,615,783

 

 

 

AERO TOY STORE, INC.

 

1000312

 

5,951,131

 

 

 

AERO TOY STORE, INC.

 

1000313

 

13,719,832

 

 

 

AERO TOY STORE, INC.

 

1000316

 

2,040,110

 

 

 

AERO TOY STORE, INC.

 

1000317

 

13,920,779

 

 

 

AERO TOY STORE, INC.

 

1000318

 

4,522,377

 

 

 

AERODYNAMICS, INC

 

0043021-001

 

3,974,391

 

3,832,448

 

AEROSERVICIOS CORPORATIVOS

 

0039482-001

 

9,347,862

 

6,037,500

 

AEROSERVICIOS DINAMICOS, S.A.

 

0034185-001

 

5,761,920

 

—

 

AEROSERVICIOS VANGUARDIA, S.A.

 

1000211

 

6,364,515

 

 

 

AEROVITRO. S.A. DE C.V.

 

0038971-001

 

37,789,492

 

25,500,000

 

ALL ERECTION & CRANE RENTAL CO

 

1000912

 

178,356

 

 

 

ALL ERECTION & CRANE RENTAL CO

 

1000921

 

808,861

 

 

 

ALL ERECTION & CRANE RENTAL CO

 

1000922

 

241,694

 

 

 

ALL ERECTION & CRANE RENTAL CO

 

1000923

 

523,241

 

 

 

ALL ERECTION & CRANE RENTAL CO

 

1000924

 

452,439

 

 

 

ALL ERECTION & CRANE RENTAL CO

 

1000925

 

47,668

 

 

 

AMERICAN COLOR GRAPHICS

 

0032684-107

 

2,309,252

 

—

 

AMERICAN COLOR GRAPHICS

 

0032684-108

 

107,575

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-103

 

80,670

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-301

 

192,556

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-401

 

63,751

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-402

 

2,029,931

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-501

 

47,232

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-502

 

8,967

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-602

 

15,152

 

—

 

AMERICAN COLOR GRAPHICS

 

0033365-702

 

112,576

 

—

 

AMERICAN RAILCAR INDUSTRIES

 

1001211

 

6,896,017

 

 

 

AMERICAN RAILCAR INDUSTRIES

 

1001222

 

10,021,354

 

 

 

AMERICAN STANDARD INC.

 

0031203-009

 

66,541

 

50,278

 

AMERICAN STANDARD INC.

 

0031203-013

 

38,192

 

8,450

 

AMERICAN STANDARD INC.

 

0031203-027

 

39,104

 

24,525

 

AMERICAN STANDARD INC.

 

0031203-032

 

6,937

 

7,078

 

AMERICAN STANDARD INC.

 

0031203-035

 

27,497

 

23,946

 

AMERICAN STANDARD INC.

 

0031203-036

 

36,666

 

22,400

 

AMERICAN STANDARD INC.

 

0031203-038

 

106,444

 

112,582

 

AMERICAN STANDARD INC.

 

0031203-042

 

17,875

 

6,492

 

AMERICAN STANDARD INC.

 

0031203-046

 

6,256

 

6,384

 

AMERICAN STANDARD INC.

 

0031203-050

 

26,913

 

27,463

 

AMERICAN STANDARD INC.

 

0031203-051

 

55,506

 

35,861

 

AMERICAN STANDARD INC.

 

0031203-053

 

374,143

 

363,882

 

AMERICAN STANDARD INC.

 

0031203-054

 

93,092

 

88,433

 

AMERICAN STANDARD INC.

 

0031203-055

 

93,090

 

88,431

 

AMERICAN STANDARD INC.

 

0031203-056

 

53,024

 

50,370

 

AMERICAN STANDARD INC.

 

0031203-057

 

53,024

 

50,370

 

AMERICAN STANDARD INC.

 

0031203-058

 

125,263

 

116,077

 

AMERICAN STANDARD INC.

 

0031203-059

 

512,030

 

492,940

 

AMERICAN STANDARD INC.

 

0031203-060

 

31,889

 

28,000

 

AMERICAN STANDARD INC.

 

0031203-063

 

422,602

 

367,479

 

AMERICAN STANDARD INC.

 

0031203-064

 

139,562

 

116,060

 

AMERICAN STANDARD INC.

 

0031203-065

 

106,557

 

88,426

 

AMERICAN STANDARD INC.

 

0031203-066

 

59,193

 

50,493

 

AMERICAN STANDARD INC.

 

0031203-067

 

57,335

 

47,679

 

AMERICAN STANDARD INC.

 

0031203-068

 

183,341

 

153,125

 

AMERICAN STANDARD INC.

 

0031203-069

 

177,594

 

145,471

 

AMERICAN STANDARD INC.

 

0031203-070

 

59,773

 

47,687

 

AMERICAN STANDARD INC.

 

0031203-072

 

118,092

 

90,895

 

AMERICAN STANDARD INC.

 

0031203-073

 

210,487

 

161,875

 

AMERICAN STANDARD INC.

 

0031203-074

 

65,323

 

50,493

 

AMERICAN STANDARD INC.

 

0031203-075

 

51,657

 

39,200

 

AMERICAN STANDARD INC.

 

0031203-076

 

456,528

 

346,500

 

AMERICAN STANDARD INC.

 

0031203-077

 

27,678

 

5,005

 

AMERICAN STANDARD INC.

 

0031203-078

 

126,383

 

94,500

 

AMERICAN STANDARD INC.

 

0031203-079

 

845,672

 

684,424

 

AMERICAN STANDARD INC.

 

0031203-080

 

60,413

 

9,672

 

AMERICAN STANDARD INC.

 

0031203-081

 

880,892

 

686,834

 

AMERICAN STANDARD INC.

 

0031203-082

 

471,016

 

323,750

 

AMERICAN STANDARD INC.

 

0031203-105

 

(4,771

)

1

 

 

1

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

AMERICAN STANDARD INC.

 

0031203-452

 

160,748

 

161,000

 

ASSOCIATED HYGIENIC PRODUCTS

 

0034085-101

 

1,175,456

 

—

 

ATOLL HOLDINGS LIMITED

 

0037304-001

 

2,219,793

 

2,339,956

 

AUTOCAM CORPORATION

 

1001811

 

3,355,085

 

 

 

AVPRO, INC.

 

1001911

 

1,265,005

 

 

 

BELLEVUE JET PARTNERS LLC

 

1002111

 

3,399,200

 

 

 

BENDER SHIPBUILDING & REPAIR

 

1002211

 

11,844,419

 

 

 

BENDER SHIPBUILDING & REPAIR

 

1002222

 

2,814,085

 

 

 

BETHLEHEM STEEL CORP.

 

0037515-001

 

10,363,395

 

3,843,000

 

BETTER MATERIALS CORPORATION

 

0039182-001

 

91,134

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-002

 

91,134

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-003

 

89,598

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-004

 

89,598

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-005

 

101,184

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-006

 

188,513

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-007

 

94,533

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-008

 

226,116

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-009

 

171,803

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-010

 

298,887

 

—

 

BETTER MATERIALS CORPORATION

 

0039182-011

 

213,692

 

—

 

BISON AIR CORPORATION

 

0034942-001

 

3,263,522

 

2,950,000

 

BISON AIR CORPORATION

 

0034942-002

 

238,907

 

190,000

 

BISON AIR CORPORATION

 

0034942-003

 

274,870

 

203,572

 

BOEING COMPANY, THE

 

0038060-001

 

17,607,627

 

14,977,270

 

BOEING COMPANY, THE

 

0038060-002

 

4,966,078

 

4,150,725

 

BOEING COMPANY, THE

 

0038360-001

 

17,847,355

 

14,977,270

 

BOEING COMPANY, THE

 

0038360-002

 

4,771,328

 

3,949,286

 

BOEING COMPANY, THE

 

0043675-001

 

24,786,787

 

17,766,154

 

BONHAM C-P-D-J-E, INC.

 

0040296-001

 

443,200

 

443,200

 

BRASPETRO OIL SERVICES CO.

 

1011211

 

28,906,721

 

 

 

BRASPETRO OIL SERVICES CO.

 

0035659-001

 

37,220,178

 

27,869,410

 

BRASPETRO OIL SERVICES CO.

 

0035659-002

 

9,585,502

 

7,473,133

 

BUCYRUS INTERNATIONAL, INC.

 

0033729-001

 

512,063

 

284,270

 

BUCYRUS INTERNATIONAL, INC.

 

0039940-001

 

7,351,321

 

—

 

CAE USA, INC.

 

0032678-001

 

4,009,118

 

3,220,000

 

CAMROSE PIPE CORPORATION

 

0043143-001

 

11,548,120

 

4,133,704

 

CENTROBE, INC.

 

0033929-104

 

10,323

 

—

 

CERIDIAN INC.

 

0034485-003

 

10,309,698

 

9,195,240

 

CHI AVIATION

 

0042401-001

 

5,695,107

 

4,950,514

 

CHIQUITA PROCESSED FOODS, LLC

 

0034141-001

 

34,026

 

7,000

 

CHIQUITA PROCESSED FOODS, LLC

 

0034141-002

 

116,148

 

116,667

 

CHIQUITA PROCESSED FOODS, LLC

 

0034141-102

 

116,148

 

116,667

 

CHIQUITA PROCESSED FOODS, LLC

 

0034141-202

 

116,148

 

116,667

 

CITATION CORPORATION

 

1002811

 

4,778,197

 

 

 

COASTAL TOWING, INC.

 

1002913

 

1,723,775

 

 

 

COASTAL TOWING, INC.

 

1002914

 

5,067,109

 

 

 

COASTAL TOWING, INC.

 

1002915

 

643,131

 

 

 

COASTAL TOWING, INC.

 

1002916

 

1,507,506

 

 

 

COLEMAN CABLE ACQUISITION, INC

 

1003011

 

6,862,806

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED CONTAINER CO.

 

0033985-001

 

3,922,418

 

—

 

CONTAINER APPLICATION INTL,INC

 

0032631-001

 

859,951

 

627,162

 

CONTAINER APPLICATION INTL,INC

 

0032631-002

 

862,772

 

580,309

 

CONTAINER APPLICATION INTL,INC

 

0032631-003

 

829,605

 

451,699

 

CONTAINER APPLICATION INTL,INC

 

0032631-004

 

209,754

 

115,367

 

CONTAINER APPLICATION INTL,INC

 

0032631-005

 

3,698,450

 

1,351,216

 

CONTAINER APPLICATION INTL,INC

 

0032631-006

 

1,938,869

 

683,377

 

CORPORATE JETS, INC.

 

0037360-001

 

583,174

 

350,000

 

CORPORATE JETS, INC.

 

0037360-002

 

583,174

 

350,000

 

CORPORATE JETS, INC.

 

0037360-003

 

1,104,828

 

715,000

 

CORPORATE JETS, INC.

 

0037360-004

 

3,143,314

 

1,811,143

 

CORPORATE JETS, INC.

 

0037360-005

 

538,683

 

323,750

 

CORPORATE JETS, INC.

 

0037360-006

 

1,062,234

 

687,500

 

CORPORATE JETS, INC.

 

0037360-007

 

2,608,414

 

1,665,400

 

CORPORATE JETS, INC.

 

0037360-008

 

2,713,157

 

1,711,446

 

CREATIVE GOLF MANAGEMENT, INC.

 

0037893-001

 

459,887

 

407,750

 

CREDENCE CAPITAL CORPORATION

 

1003311

 

627,201

 

 

 

CREDENCE CAPITAL CORPORATION

 

1003312

 

603,365

 

 

 

CREDENCE CAPITAL CORPORATION

 

1003313

 

577,193

 

 

 

CRONOS CONTAINER

 

0032591-001

 

1,358,741

 

1,072,614

 

CRONOS CONTAINER

 

0032591-005

 

496,114

 

280,325

 

 

2

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

CRONOS CONTAINER

 

0032591-006

 

468,944

 

295,417

 

CRONOS CONTAINER

 

0032591-007

 

1,658,910

 

1,134,231

 

CRONOS CONTAINER

 

0032591-008

 

794,610

 

507,259

 

CRONOS CONTAINER

 

0032591-009

 

1,753,070

 

891,470

 

CRONOS CONTAINER

 

0032591-010

 

2,072,395

 

1,078,528

 

CRONOS CONTAINER

 

0032591-011

 

1,055,752

 

671,617

 

CRONOS CONTAINER

 

0032591-012

 

2,936,301

 

1,863,905

 

CRONOS CONTAINER

 

0032591-013

 

528,849

 

267,998

 

CRONOS CONTAINER

 

0032591-014

 

423,921

 

214,825

 

CSU TRANSPORT INC.

 

1011711

 

118,144

 

 

 

CSU TRANSPORT INC.

 

0039171-001

 

16,332

 

—

 

CSU TRANSPORT INC.

 

0039171-002

 

19,851

 

—

 

CSU TRANSPORT INC.

 

0039171-003

 

142,584

 

—

 

CSU TRANSPORT INC.

 

0039171-004

 

32,194

 

—

 

CSU TRANSPORT INC.

 

0039171-005

 

4,194

 

—

 

CSU TRANSPORT INC.

 

0039171-006

 

66,059

 

—

 

CSU TRANSPORT INC.

 

0039171-007

 

79,764

 

—

 

CSU TRANSPORT INC.

 

0039171-008

 

46,062

 

—

 

CSU TRANSPORT INC.

 

0039171-009

 

74,108

 

—

 

CSU TRANSPORT INC.

 

0039171-010

 

69,726

 

—

 

CSU TRANSPORT INC.

 

0039171-011

 

17,214

 

—

 

CSU TRANSPORT INC.

 

0039171-012

 

9,927

 

—

 

CSU TRANSPORT INC.

 

0039171-014

 

9,926

 

—

 

CSU TRANSPORT INC.

 

0039171-015

 

80,232

 

—

 

CSU TRANSPORT INC.

 

0039171-018

 

4,964

 

—

 

CSU TRANSPORT INC.

 

0039171-019

 

19,855

 

—

 

CSU TRANSPORT INC.

 

0039171-021

 

87,016

 

—

 

CSU TRANSPORT INC.

 

0039171-024

 

67,748

 

—

 

CSU TRANSPORT INC.

 

0039171-025

 

16,444

 

—

 

CSU TRANSPORT INC.

 

0039171-026

 

8,010

 

—

 

DALLAS AIRMOTIVE, INC

 

0033907-001

 

3,343,524

 

2,776,043

 

DAN RIVER, INC.

 

0034752-001

 

1,160,554

 

995,904

 

DAN RIVER, INC.

 

0034752-002

 

653,605

 

534,911

 

DAN RIVER, INC.

 

0034752-003

 

1,140,754

 

933,660

 

DAN RIVER, INC.

 

0034752-004

 

66,851

 

45,838

 

DAN RIVER, INC.

 

0034752-005

 

132,986

 

104,975

 

DAN RIVER, INC.

 

0034752-006

 

396,888

 

313,300

 

DAN RIVER, INC.

 

0034752-007

 

382,092

 

301,860

 

DAN RIVER, INC.

 

0034752-008

 

263,512

 

201,240

 

DAN RIVER, INC.

 

0034918-001

 

4,030,860

 

3,835,250

 

DAYCO PRODUCTS, INC.

 

1003511

 

10,987,131

 

 

 

DEL MONTE FOODS CORP

 

0034096-001

 

42,092

 

42,092

 

DEL MONTE FOODS CORP

 

0034096-002

 

22,081

 

11,486

 

DEL MONTE FOODS CORP

 

0034096-003

 

8,056

 

3,560

 

DEL MONTE FOODS CORP

 

0034096-004

 

54,183

 

39,378

 

DEL MONTE FOODS CORP

 

0034096-006

 

30,789

 

16,700

 

DEL MONTE FOODS CORP

 

0034096-008

 

11,920

 

9

 

DEL MONTE FOODS CORP

 

0034096-009

 

63,287

 

17,467

 

DEL MONTE FOODS CORP

 

0034096-011

 

9,422

 

1,777

 

DEL MONTE FOODS CORP

 

0034096-012

 

45,837

 

38,619

 

DEL MONTE FOODS CORP

 

0034096-013

 

50,195

 

38,368

 

DEL MONTE FOODS CORP

 

0034096-014

 

92,615

 

52,522

 

DEL MONTE FOODS CORP

 

0034096-015

 

83,561

 

47,387

 

DEL MONTE FOODS CORP

 

0034096-016

 

60,316

 

21,352

 

DEL MONTE FOODS CORP

 

0034096-017

 

32,845

 

8,754

 

DELTA AIRLINES

 

0043408-001

 

14,854

 

2,900

 

DELTA AIRLINES

 

0043408-002

 

153,176

 

54,092

 

DELTA AIRLINES

 

0043408-003

 

439,423

 

144,066

 

DELTA AIRLINES

 

0043408-004

 

72,556

 

21,371

 

DELTA AIRLINES

 

0043408-005

 

33,265

 

5,956

 

DELTA AIRLINES

 

0043408-006

 

83,808

 

14,807

 

DELTA AIRLINES

 

0043408-007

 

138,623

 

23,318

 

DELTA AIRLINES

 

0043408-008

 

189,791

 

32,065

 

DELTA AIRLINES

 

0043408-009

 

1,064,383

 

170,831

 

DELTA AIRLINES

 

0043408-010

 

79,241

 

12,759

 

DELTA AIRLINES

 

0043408-011

 

127,098

 

27,092

 

DELTA AIRLINES

 

0043408-012

 

236,772

 

49,182

 

DELTA AIRLINES

 

0043408-013

 

52,787

 

10,895

 

DELTA AIRLINES

 

0043408-014

 

237,683

 

48,020

 

DELTA AIRLINES

 

0043408-015

 

55,071

 

10,942

 

DELTA AIRLINES

 

0043408-016

 

44,414

 

8,677

 

DELTA AIRLINES

 

0043408-017

 

11,209

 

840

 

 

3

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

DELTA AIRLINES

 

0043408-018

 

199,168

 

25,193

 

DELTA AIRLINES

 

0043408-019

 

25,534

 

4,572

 

DELTA AIRLINES

 

0043408-020

 

50,916

 

8,172

 

DELTA AIRLINES

 

0043408-021

 

19,457

 

3,133

 

DELTA AIRLINES

 

0043408-022

 

14,824

 

2,367

 

DELTA AIRLINES

 

0043408-023

 

25,219

 

3,803

 

DELTA AIRLINES

 

0043408-024

 

3,594

 

261

 

DELTA AIRLINES

 

0043408-025

 

5,025

 

359

 

DELTA AIRLINES

 

0043408-026

 

28,742

 

5,807

 

DELTA AIRLINES

 

0043408-027

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-028

 

55,648

 

8,931

 

DELTA AIRLINES

 

0043408-029

 

18,056

 

2,896

 

DELTA AIRLINES

 

0043408-030

 

17,724

 

2,981

 

DELTA AIRLINES

 

0043408-031

 

50,916

 

8,172

 

DELTA AIRLINES

 

0043408-032

 

11,595

 

2,263

 

DELTA AIRLINES

 

0043408-033

 

108,033

 

17,339

 

DELTA AIRLINES

 

0043408-034

 

29,204

 

4,663

 

DELTA AIRLINES

 

0043408-035

 

30,964

 

6,152

 

DELTA AIRLINES

 

0043408-036

 

8,211

 

606

 

DELTA AIRLINES

 

0043408-037

 

118,677

 

13,030

 

DELTA AIRLINES

 

0043408-038

 

15,020

 

2,900

 

DELTA AIRLINES

 

0043408-039

 

102,124

 

20,291

 

DELTA AIRLINES

 

0043408-040

 

60,081

 

11,600

 

DELTA AIRLINES

 

0043408-041

 

62,430

 

11,629

 

DELTA AIRLINES

 

0043408-042

 

42,494

 

7,508

 

DELTA AIRLINES

 

0043408-043

 

29,178

 

5,797

 

DELTA AIRLINES

 

0043408-044

 

16,762

 

2,961

 

DELTA AIRLINES

 

0043408-045

 

40,681

 

6,862

 

DELTA AIRLINES

 

0043408-046

 

42,804

 

6,860

 

DELTA AIRLINES

 

0043408-047

 

64,122

 

10,286

 

DELTA AIRLINES

 

0043408-048

 

70,387

 

10,557

 

DELTA AIRLINES

 

0043408-049

 

46,923

 

9,480

 

DELTA AIRLINES

 

0043408-050

 

10,182

 

861

 

DELTA AIRLINES

 

0043408-051

 

10,404

 

868

 

DELTA AIRLINES

 

0043408-052

 

10,564

 

869

 

DELTA AIRLINES

 

0043408-053

 

21,761

 

1,740

 

DELTA AIRLINES

 

0043408-054

 

375,186

 

48,277

 

DELTA AIRLINES

 

0043408-055

 

189,084

 

24,320

 

DELTA AIRLINES

 

0043408-056

 

18,523

 

2,973

 

DELTA AIRLINES

 

0043408-057

 

28,742

 

5,807

 

DELTA AIRLINES

 

0043408-058

 

54,341

 

9,141

 

DELTA AIRLINES

 

0043408-059

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-060

 

30,167

 

4,842

 

DELTA AIRLINES

 

0043408-061

 

33,150

 

6,476

 

DELTA AIRLINES

 

0043408-062

 

27,856

 

5,786

 

DELTA AIRLINES

 

0043408-063

 

54,810

 

16,144

 

DELTA AIRLINES

 

0043408-064

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-065

 

74,092

 

11,892

 

DELTA AIRLINES

 

0043408-066

 

33,565

 

5,404

 

DELTA AIRLINES

 

0043408-067

 

58,357

 

11,595

 

DELTA AIRLINES

 

0043408-068

 

27,305

 

5,945

 

DELTA AIRLINES

 

0043408-069

 

16,785

 

2,966

 

DELTA AIRLINES

 

0043408-070

 

18,195

 

3,513

 

DELTA AIRLINES

 

0043408-071

 

95,677

 

16,166

 

DELTA AIRLINES

 

0043408-072

 

79,352

 

12,736

 

DELTA AIRLINES

 

0043408-073

 

49,296

 

7,937

 

DELTA AIRLINES

 

0043408-074

 

136,115

 

21,733

 

DELTA AIRLINES

 

0043408-075

 

64,402

 

12,796

 

DELTA AIRLINES

 

0043408-076

 

65,354

 

12,767

 

DELTA AIRLINES

 

0043408-077

 

33,152

 

6,401

 

DELTA AIRLINES

 

0043408-078

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-079

 

58,357

 

11,595

 

DELTA AIRLINES

 

0043408-080

 

25,534

 

4,572

 

DELTA AIRLINES

 

0043408-081

 

30,040

 

5,800

 

DELTA AIRLINES

 

0043408-082

 

13,052

 

2,195

 

DELTA AIRLINES

 

0043408-083

 

2,575

 

199

 

DELTA AIRLINES

 

0043408-084

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-085

 

38,914

 

6,266

 

DELTA AIRLINES

 

0043408-086

 

50,788

 

15,247

 

DELTA AIRLINES

 

0043408-087

 

18,773

 

2,107

 

DELTA AIRLINES

 

0043408-088

 

59,912

 

10,123

 

DELTA AIRLINES

 

0043408-089

 

16,294

 

2,973

 

 

4

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

DELTA AIRLINES

 

0043408-090

 

59,912

 

10,123

 

DESOTO JORDAN

 

0040241-001

 

521,613

 

423,500

 

DOANE PET CARE COMPANY

 

1003711

 

2,271,566

 

 

 

DOANE PET CARE COMPANY

 

1003712

 

2,406,179

 

 

 

DOANE PET CARE COMPANY

 

0034982-001

 

416,703

 

231,533

 

DOANE PET CARE COMPANY

 

0034982-002

 

406,553

 

225,173

 

DOANE PET CARE COMPANY

 

0034982-003

 

181,854

 

101,082

 

DOANE PET CARE COMPANY

 

0034982-004

 

153,747

 

85,464

 

DOANE PET CARE COMPANY

 

0034982-005

 

520,510

 

288,197

 

DOANE PET CARE COMPANY

 

0034982-006

 

280,390

 

153,783

 

DOANE PET CARE COMPANY

 

0034982-007

 

126,900

 

69,506

 

DOANE PET CARE COMPANY

 

0034982-008

 

101,217

 

54,726

 

DOANE PET CARE COMPANY

 

0034982-009

 

246,121

 

132,617

 

DOANE PET CARE COMPANY

 

0034982-010

 

134,924

 

71,604

 

DOANE PET CARE COMPANY

 

0034982-011

 

102,528

 

54,318

 

DOANE PET CARE COMPANY

 

0034982-012

 

4,179

 

2,882

 

DOANE PET CARE COMPANY

 

0034982-013

 

3,444

 

2,375

 

DOANE PET CARE COMPANY

 

0034982-014

 

8,159

 

5,628

 

DOANE PET CARE COMPANY

 

0034982-015

 

3,407

 

2,351

 

DOANE PET CARE COMPANY

 

0034982-016

 

8,387

 

5,785

 

DOANE PET CARE COMPANY

 

0034982-017

 

5,922

 

4,085

 

DOANE PET CARE COMPANY

 

0034982-018

 

4,110

 

2,835

 

DOANE PET CARE COMPANY

 

0034982-019

 

3,974

 

2,741

 

DOANE PET CARE COMPANY

 

0034982-020

 

11,820

 

8,153

 

DOANE PET CARE COMPANY

 

0034982-021

 

4,119

 

2,841

 

DOANE PET CARE COMPANY

 

0034982-022

 

11,811

 

8,147

 

DOANE PET CARE COMPANY

 

0034982-023

 

491,965

 

252,283

 

DOANE PET CARE COMPANY

 

0034982-024

 

8,751

 

5,225

 

DOANE PET CARE COMPANY

 

0034982-025

 

80,656

 

41,629

 

DOANE PET CARE COMPANY

 

0034982-102

 

296,813

 

157,341

 

EDWARDS BAKING COMPANY

 

0033752-003

 

23,847

 

18,491

 

EDWARDS BAKING COMPANY

 

0033752-005

 

284,783

 

220,825

 

EDWARDS BAKING COMPANY

 

0033752-006

 

316,195

 

245,182

 

EDWARDS BAKING COMPANY

 

0033752-007

 

21,514

 

16,682

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-001

 

125,816

 

111,932

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-003

 

41,625

 

41,237

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-006

 

721,474

 

723,856

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-009

 

46,718

 

44,992

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-012

 

178,444

 

225,987

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-013

 

43,513

 

44,980

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-014

 

350,801

 

362,158

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-015

 

180,683

 

127,630

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-016

 

255,288

 

243,083

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-017

 

180,421

 

171,043

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-018

 

553,245

 

513,130

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-019

 

351,499

 

235,875

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-020

 

856,833

 

631,748

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-021

 

108,209

 

78,968

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-022

 

432,938

 

315,874

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-023

 

757,642

 

552,779

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-024

 

651,382

 

440,434

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-025

 

184,163

 

121,774

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-026

 

368,279

 

243,547

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-027

 

197,595

 

127,849

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-028

 

1,071,494

 

670,000

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-029

 

896,042

 

549,456

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-030

 

604,402

 

366,304

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-031

 

601,203

 

366,304

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-032

 

1,226,109

 

747,065

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-033

 

901,688

 

549,456

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-034

 

1,482,712

 

894,229

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-035

 

696,890

 

444,906

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-036

 

707,201

 

451,506

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-037

 

238,403

 

150,502

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-038

 

238,773

 

150,736

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-039

 

238,412

 

150,502

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-040

 

2,546,482

 

1,025,101

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-041

 

1,596,442

 

642,657

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-042

 

1,258,851

 

501,417

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-043

 

240,447

 

150,502

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-044

 

370,431

 

226,454

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-045

 

247,446

 

150,970

 

 

5

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-046

 

249,527

 

150,970

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-047

 

125,596

 

75,485

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-048

 

311,083

 

185,102

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-049

 

155,536

 

92,551

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-050

 

479,657

 

203,929

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-051

 

156,804

 

92,551

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-052

 

316,153

 

185,102

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-053

 

316,161

 

185,102

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-054

 

316,161

 

185,102

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-055

 

3,711,285

 

1,374,616

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-056

 

2,561,313

 

125,618

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-101

 

7,538

 

3,320

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-112

 

52,338

 

39,001

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-115

 

12,564

 

1,107

 

EMBRY-RIDDLE AERONAUTICAL

 

0035407-128

 

72,163

 

—

 

EMBRY-RIDDLE AERONAUTICAL

 

0037559-001

 

2,993,732

 

2,929,921

 

EQUISTAR CHEMICALS

 

0042610-001

 

18,022,824

 

10,112,256

 

EQUISTAR CHEMICALS

 

0042610-002

 

19,482,470

 

9,531,414

 

ESSAR SHIPPING LTD

 

1003911

 

14,556,841

 

 

 

FANCIA INVESTMENTS

 

0037026-001

 

8,176,556

 

—

 

FANCIA INVESTMENTS

 

0037026-002

 

1,878,119

 

—

 

FANCIA INVESTMENTS

 

0037026-003

 

3,030,142

 

—

 

FANCIA INVESTMENTS

 

0037026-004

 

3,975,950

 

—

 

FANCIA INVESTMENTS

 

0037026-005

 

1,884,406

 

—

 

FANCIA INVESTMENTS

 

0037026-006

 

933,101

 

—

 

FEDERAL-MOGUL CORPORATION

 

0032079-004

 

15,871,661.00

 

11,237,500

 

FEDERAL-MOGUL CORPORATION

 

0034730-003

 

1,654,064

 

1,200,000

 

FORMICA CORPORATION

 

1004011

 

5,159,240

 

 

 

FORMICA CORPORATION

 

1004012

 

2,961,764

 

 

 

FORMICA CORPORATION

 

1004013

 

1,974,510

 

 

 

FORT WAYNE FOUNDRY CORP.

 

0033093-001

 

644,340

 

365,369

 

FORT WAYNE FOUNDRY CORP.

 

0033093-002

 

78,792

 

44,778

 

FORT WAYNE FOUNDRY CORP.

 

0033093-003

 

28,595

 

15,313

 

FORT WAYNE FOUNDRY CORP.

 

0033093-004

 

11,165

 

5,494

 

FORT WAYNE FOUNDRY CORP.

 

0033093-005

 

19,813

 

9,750

 

FORT WAYNE FOUNDRY CORP.

 

0033093-006

 

18,965

 

9,332

 

FORT WAYNE FOUNDRY CORP.

 

0033093-007

 

2,517

 

1,239

 

FORT WAYNE FOUNDRY CORP.

 

0033093-008

 

4,239

 

2,103

 

FORT WAYNE FOUNDRY CORP.

 

0033093-009

 

20,629

 

9,073

 

FORT WAYNE FOUNDRY CORP.

 

0033093-011

 

2,212,236

 

465,000

 

FRONT PORCH DEVELOPMENT CORP.

 

0037971-001

 

466,270

 

407,750

 

FULGHUM FIBRES, INC.

 

1004111

 

15,053,833

 

 

 

GATEWAY CONTAINER INTL., LTD.

 

0035326-001

 

3,252,696

 

1,104,132

 

GATEWAY CONTAINER INTL., LTD.

 

0035326-002

 

3,066,654

 

1,147,489

 

GATEWAY CONTAINER INTL., LTD.

 

0035326-003

 

3,854,103

 

2,443,331

 

GATEWAY CONTAINER INTL., LTD.

 

0035326-004

 

3,937,130

 

2,440,514

 

 

 

 

 

 

 

 

 

GAYLORD CONTAINER

 

0033918-002

 

7,703,449

 

3,610,383

 

GAYLORD CONTAINER

 

0033918-003

 

219,505

 

104,522

 

GAYLORD CONTAINER

 

0033918-004

 

46,645

 

22,211

 

GEMINI INDUSTRIES, INC.

 

1004311

 

2,849,227

 

 

 

GLENOIT CORPORATION

 

1004411

 

2,986,817

 

 

 

GLOBAL FITTNESS HOLDINGS

 

0041341-001

 

4,231,759

 

2,675,938

 

GRAYS HARBOR PAPER, L.P.

 

1004611

 

5,999,184

 

 

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-002

 

4,007,917

 

1,600,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-003

 

1,973,390

 

760,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-008

 

7,985,662

 

1,800,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-009

 

1,330,944

 

300,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-011

 

1,368,800

 

300,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-012

 

51,555,722

 

27,298,767

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-013

 

4,322,439

 

1,446,281

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-108

 

332,736

 

75,000

 

GREAT LAKES DREDGE & DOCK CO.

 

0034074-208

 

4,859,700

 

2,600,000

 

GREAT NORTHERN PAPER, INC.

 

1004711

 

9,596,610

 

 

 

GREYHOUND LINES INC

 

0040230-001

 

7,402,206

 

4,345,350

 

GREYHOUND LINES INC

 

0040230-002

 

16,227,974

 

9,559,770

 

GREYHOUND LINES INC

 

0040230-003

 

1,475,242

 

869,070

 

H.J. HEINZ COMPANY

 

0040918-001

 

19,982,362

 

19,380,000

 

HAINAN AIRLINES CO., LTD.

 

0039706-004

 

9,940,223

 

8,046,547

 

HAINAN AIRLINES CO., LTD.

 

0039706-005

 

10,484,160

 

8,487,882

 

HANSEN PRERO AVIATION, LLC

 

0042601-001

 

7,885,389

 

3,862,231

 

 

6

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

HAWAIIAN AIRLINES, INC.

 

0040141-001

 

542,110

 

276,774

 

HAWAIIAN AIRLINES, INC.

 

0040141-002

 

210,200

 

106,112

 

HAWAIIAN AIRLINES, INC.

 

0040141-003

 

103,490

 

52,243

 

HAWAIIAN AIRLINES, INC.

 

0040141-004

 

145,782

 

72,689

 

HAWAIIAN AIRLINES, INC.

 

0040141-005

 

106,268

 

52,987

 

HAWAIIAN AIRLINES, INC.

 

0040141-006

 

106,012

 

51,848

 

HAWAIIAN AIRLINES, INC.

 

0040141-007

 

133,977

 

66,179

 

HAWAIIAN AIRLINES, INC.

 

0040141-008

 

133,859

 

65,849

 

HAWAIIAN AIRLINES, INC.

 

0040141-009

 

135,315

 

66,179

 

HAWAIIAN AIRLINES, INC.

 

0040141-010

 

442,352

 

213,414

 

HAWAIIAN AIRLINES, INC.

 

0040141-011

 

65,171

 

31,003

 

HAWAIIAN AIRLINES, INC.

 

0040141-012

 

64,448

 

30,849

 

HAWAIIAN AIRLINES, INC.

 

0040141-013

 

206,530

 

96,898

 

HAWAIIAN AIRLINES, INC.

 

0040141-014

 

39,773

 

18,229

 

HAYES LEMMERZ INTL.

 

0034007-001

 

11,237,143

 

6,184,136

 

HAYES LEMMERZ INTL.

 

0035860-001

 

96,089

 

44,615

 

HAYNES INTERNATIONAL

 

0035593-001

 

124,703

 

—

 

HAYNES INTERNATIONAL

 

0035593-002

 

446,320

 

—

 

HAYNES INTERNATIONAL

 

0035593-003

 

744,765

 

—

 

HELIMED AERO TAXI LTDA

 

0043553-001

 

3,014,272

 

—

 

HOP-A-JET, INC.

 

1005311

 

1,095,144

 

 

 

HORIZON OFFSHORE CONTRACTOR,

 

1011011

 

32,624,439

 

 

 

INTERNATIONAL TRUCK AND ENGINE

 

0030940-003

 

4,739,679

 

3,914,400

 

INTERNATIONAL TRUCK AND ENGINE

 

0035872-001

 

15,671,985

 

11,208,750

 

INTERNATIONAL TRUCK AND ENGINE

 

0038304-001

 

54,058,366

 

12,628,624

 

INTERNATIONAL TRUCK AND ENGINE

 

0038304-002

 

4,114,683

 

980,800

 

INTERNATIONAL TRUCK AND ENGINE

 

0041018-001

 

46,103,030

 

29,824,089

 

INTERNATIONAL TRUCK AND ENGINE

 

0041018-002

 

2,416,679

 

1,454,854

 

INTERNATIONAL TRUCK AND ENGINE

 

0041029-001

 

46,645,186

 

30,174,810

 

INTERNATIONAL TRUCK AND ENGINE

 

0041029-002

 

2,445,098

 

1,471,962

 

INTERNATIONAL TRUCK AND ENGINE

 

0041030-001

 

16,793,748

 

14,688,090

 

J.L. FRENCH AUTOMOTIVE CASTING

 

0039740-001

 

3,234,310

 

1,367,494

 

JAMAICA ENERGY PARTNERS

 

1005611

 

5,856,773

 

 

 

JANUS EQUITIES LLC

 

1005711

 

17,495,778

 

 

 

JEFFERSON SMURFIT

 

0042743-001

 

2,967,115

 

488,250

 

JODA PARTNERSHIP  (LLC)

 

1006111

 

2,500,412

 

 

 

JODA PARTNERSHIP  (LLC)

 

1006112

 

7,233,475

 

 

 

JODA PARTNERSHIP  (LLC)

 

1006113

 

2,479,103

 

 

 

JOHNSTON INDUSTRIES ALABAMA,IN

 

1011811

 

357,038

 

 

 

KASGRO LEASING LLC

 

0041218-001

 

7,236,726

 

3,459,338

 

LCI SHIPHOLDING, INC.

 

0039448-001

 

52,638,132

 

19,687,500

 

LIDER TAXI AEREO S.A.

 

1006411

 

876,851

 

 

 

LIDER TAXI AEREO S.A.

 

1006412

 

858,488

 

 

 

LIDER TAXI AEREO S.A.

 

1006413

 

933,253

 

 

 

LIDER TAXI AEREO S.A.

 

1006414

 

909,643

 

 

 

LIDER TAXI AEREO S.A.

 

1006415

 

1,022,446

 

 

 

LIDER TAXI AEREO S.A.

 

1006416

 

978,506

 

 

 

LIDER TAXI AEREO S.A.

 

0039494-001

 

1,857,234

 

—

 

LOS CIPRESES S.A.

 

1006511

 

650,638

 

 

 

LOWA CORP

 

1006611

 

38,170,582

 

 

 

L-S ELECTRO-GALVANIZING CO.

 

0035448-002

 

12,753,693

 

4,032,000

 

LUCENT TECHNOLOGIES, INC.

 

0039673-001

 

21,274,458

 

18,487,500

 

LUCENT TECHNOLOGIES, INC.

 

0039684-001

 

22,101,864

 

19,212,500

 

LUKE DAVID, LLC

 

0037660-001

 

574,734

 

506,250

 

MARITIME SHIPPING NV (IPC)

 

1006711

 

10,969,221

 

 

 

MARITIME SHIPPING NV (IPC)

 

1006721

 

8,080,495

 

 

 

MERRITT TOOL CO., INC.

 

0036837-002

 

95,672

 

—

 

MICHAEL MCCULLOUGH

 

0038260-002

 

492,942

 

423,500

 

MID-AMERICA PACKAGING, LLC

 

0033918-001

 

4,553,070

 

2,659,074

 

NEUVANT AEROSPACE CORPORATION

 

0032566-101

 

250,433

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-102

 

38,785

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-103

 

264,181

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-104

 

29,300

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-105

 

48,740

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-106

 

50,371

 

—

 

NEUVANT AEROSPACE CORPORATION

 

0032566-107

 

78,588

 

—

 

NORTH ATLANTIC REFINING, LTD.

 

1006911

 

2,975,873

 

 

 

OMNI FLYS,.S.A. DE C.V.

 

0039004-001

 

2,478,077

 

—

 

OMNI FLYS,.S.A. DE C.V.

 

0039015-001

 

37,037,068

 

—

 

PEABODY HOLDING COMPANY, INC.

 

0041567-003

 

12,578,150

 

1,626,875

 

PEABODY WESTERN COAL CO.

 

0034718-001

 

2,959,456

 

2,473,014

 

PEERLESS IMPORTERS, INC.

 

0039348-001

 

1,020,771

 

847,000

 

 

7

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

PERRY JUDD’S INC

 

0040263-001

 

8,968,087

 

2,069,126

 

POLICYD, S.A. DE C.V.

 

1007412

 

33,189,103

 

 

 

POPE & TALBOT, INC.

 

1007511

 

15,447,417

 

 

 

PRIDE AMETHYST LIMITED

 

0035459-001

 

19,581,564

 

14,986,500

 

QUEBECOR WORLD JOHNSON&HARDIN

 

0032796-001

 

2,876,464

 

1,727,623

 

QUEST II, LLC

 

0032717-004

 

3,522,935

 

3,421,250

 

QUEST II, LLC

 

0032717-005

 

13,697

 

—

 

RADIANT AVIATION SERVICES

 

1007612

 

4,269,212

 

 

 

REVERE COPPER PRODUCTS, INC.

 

0032820-007

 

199,406

 

111,375

 

REVERE COPPER PRODUCTS, INC.

 

0032820-008

 

109,691

 

83,875

 

REVERE COPPER PRODUCTS, INC.

 

0032820-009

 

379,741

 

204,469

 

RIGI, INC.

 

1007914

 

1,788,600

 

 

 

RMH TELESERVICES, INC.

 

0037215-001

 

2,115,007

 

1,939,920

 

RMH TELESERVICES, INC.

 

0037215-002

 

41,014

 

23,876

 

ROLLS ROYCE CANADA LTD.

 

0033126-001

 

1,495,482

 

1,375,000

 

RUSSELL-STANLEY CORP.

 

0033841-001

 

610,402

 

377,652

 

RUSSELL-STANLEY CORP.

 

0033841-002

 

77,749

 

29,671

 

RUSSELL-STANLEY CORP.

 

0033841-003

 

648,419

 

481,284

 

RX CHOICE, INC.

 

0037904-001

 

15,146,935

 

10,357,892

 

RX CHOICE, INC.

 

0037904-002

 

9,022,765

 

5,610,751

 

RX CHOICE, INC.

 

0037904-003

 

9,263,822

 

5,610,908

 

RX CHOICE, INC.

 

0037904-004

 

3,789,545

 

1,801,095

 

SARGEANT MARINE, INC

 

1008012

 

15,384,539

 

 

 

SCI TEXAS FUNERAL SERVICES

 

1008111

 

31,589,996

 

 

 

SCI TEXAS FUNERAL SERVICES

 

0037560-003

 

11,482,923

 

—

 

SERVICIOS INTEGRALES DE

 

0042654-001

 

10,719,761

 

7,010,767

 

SERVICIOS INTEGRALES DE

 

0042654-002

 

8,706,110

 

6,922,500

 

SEVENTH 7RANSPORT, INC.

 

0039962-001

 

71,736

 

—

 

SEVENTH 7RANSPORT, INC.

 

0039962-002

 

111,664

 

—

 

SKY KING, INC.

 

1008211

 

1,798,292

 

 

 

SKY KING, INC.

 

1008212

 

126,810

 

 

 

SKY KING, INC.

 

1008221

 

553,019

 

 

 

SKY KING, INC.

 

1008222

 

36,111

 

 

 

SKY KING, INC.

 

1008231

 

2,699,093

 

 

 

SKY KING, INC.

 

1008232

 

120,126

 

 

 

SKY KING, INC.

 

1008233

 

50,321

 

 

 

SKY KING, INC.

 

0039717-001

 

2,530,350

 

—

 

SKY KING, INC.

 

0039717-002

 

2,639,286

 

251,175

 

SOUTHERN BULK INDUSTRIES, INC.

 

1008311

 

4,370,542

 

 

 

SOUTHERN BULK INDUSTRIES, INC.

 

1008312

 

2,981,920

 

 

 

SOUTHERN BULK INDUSTRIES, INC.

 

1008314

 

801,550

 

 

 

SOUTHERN BULK INDUSTRIES, INC.

 

1008315

 

3,366,406

 

 

 

SOUTHERN BULK INDUSTRIES, INC.

 

1008316

 

245,043

 

 

 

SOUTHERN BULK INDUSTRIES, INC.

 

0034541-001

 

425,079

 

—

 

SOUTHERN BULK INDUSTRIES, INC.

 

0034541-002

 

89,027

 

—

 

SOUTHERN BULK INDUSTRIES, INC.

 

0034541-003

 

37,311

 

—

 

SOUTHERN COMPANY SERVICES, INC

 

0037960-001

 

919,574

 

798,000

 

SPRINGS INDUSTRIES, INC.

 

1008411

 

18,815,055

 

 

 

STAR LEASING COMPANY

 

0032384-001

 

45,394

 

37,694

 

STAR LEASING COMPANY

 

0032384-002

 

158,416

 

131,544

 

STAR LEASING COMPANY

 

0032384-003

 

33,992

 

28,226

 

STAR LEASING COMPANY

 

0032384-004

 

158,204

 

—

 

STAR LEASING COMPANY

 

0032384-005

 

120,817

 

—

 

STAR LEASING COMPANY

 

0032384-006

 

22,362

 

—

 

STAR LEASING COMPANY

 

0032384-007

 

44,723

 

—

 

STAR LEASING COMPANY

 

0032384-008

 

406,395

 

—

 

STAR LEASING COMPANY

 

0032384-009

 

137,658

 

—

 

STAR LEASING COMPANY

 

0032384-010

 

957,876

 

—

 

STONE CONTAINER CORP.

 

0030213-115

 

1,027

 

2,408

 

STONE CONTAINER CORP.

 

0030791-003

 

26,797

 

71,914

 

STONE CONTAINER CORP.

 

0030791-011

 

6,332

 

13,514

 

STONE CONTAINER CORP.

 

0030791-013

 

23,207

 

49,526

 

STONE CONTAINER CORP.

 

0030791-015

 

6,171

 

12,382

 

STONE CONTAINER CORP.

 

0030791-017

 

(383

)

—

 

STONE CONTAINER CORP.

 

0030791-019

 

25,645

 

40,034

 

STONE CONTAINER CORP.

 

0030791-026

 

18,008

 

15,761

 

STONE CONTAINER CORP.

 

0030791-030

 

49,982

 

70,444

 

STONE CONTAINER CORP.

 

0030791-031

 

49,599

 

69,904

 

STONE CONTAINER CORP.

 

0030791-033

 

49,074

 

34,088

 

STONE CONTAINER CORP.

 

0030791-034

 

49,248

 

67,688

 

STONE CONTAINER CORP.

 

0030791-038

 

22,930

 

18,550

 

STONE CONTAINER CORP.

 

0030791-044

 

66,101

 

81,554

 

 

8

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

STONE CONTAINER CORP.

 

0030791-045

 

55,606

 

68,783

 

STONE CONTAINER CORP.

 

0030791-047

 

52,654

 

61,842

 

STONE CONTAINER CORP.

 

0030791-048

 

14,041

 

14,041

 

STONE CONTAINER CORP.

 

0030791-049

 

53,827

 

64,670

 

STONE CONTAINER CORP.

 

0030791-069

 

4,536

 

5,101

 

STONE CONTAINER CORP.

 

0030791-087

 

24,395

 

23,657

 

STONE CONTAINER CORP.

 

0030791-088

 

31,038

 

30,409

 

STONE CONTAINER CORP.

 

0030791-089

 

75,343

 

71,528

 

STONE CONTAINER CORP.

 

0030791-090

 

1,916,054

 

1,751,280

 

STONE CONTAINER CORP.

 

0030791-091

 

125,866

 

118,012

 

STONE CONTAINER CORP.

 

0030791-092

 

5,178

 

16,470

 

STONE CONTAINER CORP.

 

0030791-093

 

9,541

 

6,034

 

STONE CONTAINER CORP.

 

0030791-094

 

91,473

 

83,412

 

STONE CONTAINER CORP.

 

0030791-096

 

27,638

 

24,917

 

STONE CONTAINER CORP.

 

0030791-097

 

49,793

 

44,892

 

STONE CONTAINER CORP.

 

0030791-098

 

22,988

 

59,523

 

STONE CONTAINER CORP.

 

0030791-099

 

52,375

 

45,826

 

STONE CONTAINER CORP.

 

0030791-100

 

22,754

 

17,650

 

STONE CONTAINER CORP.

 

0030791-101

 

15,169

 

11,766

 

STONE CONTAINER CORP.

 

0030791-102

 

31,200

 

21,403

 

STONE CONTAINER CORP.

 

0030791-103

 

77,037

 

59,917

 

STONE CONTAINER CORP.

 

0030791-104

 

8,231

 

13,537

 

STONE CONTAINER CORP.

 

0030791-105

 

19,122

 

29,834

 

STONE CONTAINER CORP.

 

0030791-106

 

168,963

 

124,008

 

STONE CONTAINER CORP.

 

0030791-107

 

64,650

 

42,682

 

STONE CONTAINER CORP.

 

0030791-108

 

557,522

 

419,414

 

STONE CONTAINER CORP.

 

0030791-109

 

45,625

 

31,017

 

STONE CONTAINER CORP.

 

0030791-110

 

86,474

 

51,404

 

STONE CONTAINER CORP.

 

0030791-111

 

7,665

 

3,489

 

STONE CONTAINER CORP.

 

0030791-113

 

98,431

 

67,579

 

STONE CONTAINER CORP.

 

0030791-114

 

12,925

 

14,177

 

STONE CONTAINER CORP.

 

0030791-115

 

706,096

 

428,902

 

STONE CONTAINER CORP.

 

0030791-116

 

4,444,766

 

2,610,104

 

STONE CONTAINER CORP.

 

0030791-117

 

2,467,247

 

2,448,671

 

STONE CONTAINER CORP.

 

0030791-138

 

4,586

 

3,710

 

STONE CONTAINER CORP.

 

0030791-216

 

679,641

 

383,796

 

STONE CONTAINER CORP.

 

0030791-226

 

5,274

 

3,940

 

STONE CONTAINER CORP.

 

0030791-293

 

15,461

 

12,067

 

STONE CONTAINER CORP.

 

0030791-316

 

982,959

 

567,651

 

STONE CONTAINER CORP.

 

0030791-548

 

17,933

 

21,062

 

STONE CONTAINER CORP.

 

0030791-648

 

59,776

 

70,207

 

STONE CONTAINER CORP.

 

0030791-748

 

23,910

 

28,083

 

STONE CONTAINER CORP.

 

0030791-848

 

59,776

 

70,207

 

STOODY COMPANY

 

0033785-001

 

3,386

 

17,056

 

STOODY COMPANY

 

0033785-002

 

8,814

 

23,958

 

STOODY COMPANY

 

0033785-003

 

25,101

 

33,020

 

STOODY COMPANY

 

0033785-004

 

112,998

 

109,350

 

STOODY COMPANY

 

0033785-005

 

40,114

 

28,005

 

SUBIC AIR CHARTER INC.

 

1008511

 

4,549,629

 

 

 

SUNRISE ASSOCIATES, INC.

 

1008611

 

66,402

 

 

 

SYNTHETIC INDUSTRIES,INC

 

1008711

 

5,877,003

 

 

 

TCA NETWORK FUNDING, L.P.

 

1008811

 

12,166,837

 

 

 

THE BRIDGEPORT &PORT JEFFERSON

 

0038071-001

 

12,122,293

 

7,700,000

 

THE DOE RUN RESOURCES CORP.

 

1003811

 

52,384

 

 

 

THE LEHIGH PRESS, INC.

 

0034563-001

 

1,228,253

 

1,063,147

 

THERMAL DYNAMICS CORPORATION

 

0033774-003

 

27,024

 

7,385

 

TOWER AUTOMOTIVE, INC.

 

0043254-001

 

14,958,811

 

798,525

 

TOWER AUTOMOTIVE, INC.

 

0043254-101

 

2,170,458

 

115,863

 

TOWER AUTOMOTIVE, INC.

 

0043254-201

 

13,311,942

 

710,613

 

TRANS OCEAN LEASING CORP

 

0023374-021

 

1,666,278

 

1,138,666

 

TRANSOCEAN HOLDING INC.

 

0033192-001

 

7,167,716

 

4,253,750

 

TRANSOCEAN HOLDING INC.

 

0033192-002

 

359,336

 

212,688

 

TRANSOCEAN HOLDING INC.

 

0033192-003

 

610,633

 

351,686

 

TRANSOCEAN HOLDING INC.

 

0033192-004

 

316,116

 

181,876

 

TRANSOCEAN HOLDING INC.

 

0033192-005

 

1,618,210

 

833,052

 

TRANSOCEAN HOLDING INC.

 

0033192-006

 

907,681

 

439,758

 

TRANSOCEAN HOLDING INC.

 

0033192-007

 

518,730

 

248,771

 

TRANSOCEAN HOLDING INC.

 

0033192-008

 

638,356

 

272,240

 

TRANSOCEAN HOLDING INC.

 

0033192-009

 

426,651

 

251,176

 

TRAVELCENTERS OF AMERICA, INC.

 

1009211

 

3,528,209

 

 

 

TRIGEANT, L.P.

 

1009311

 

16,403,927

 

 

 

TRIGEANT, L.P.

 

1009312

 

1,485,410

 

 

 

 

9

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

TRUMP HOTELS & CASINO RESORTS

 

0033941-001

 

1,490,763

 

1,155,155

 

TUBE CITY, INC.

 

0033423-001

 

471,777

 

425,250

 

TUBE CITY, INC.

 

0033423-002

 

126,266

 

113,532

 

TUBE CITY, INC.

 

0033423-021

 

724,090

 

365,076

 

TUBE CITY, INC.

 

0033423-022

 

2,864

 

1,444

 

TUBE CITY, INC.

 

0033423-023

 

10,411

 

5,249

 

TUBE CITY, INC.

 

0033423-024

 

517,184

 

260,711

 

TUBE CITY, INC.

 

0033423-025

 

46,916

 

23,650

 

TUBE CITY, INC.

 

0033423-026

 

38,187

 

19,250

 

TUBE CITY, INC.

 

0033423-027

 

53,735

 

27,088

 

TUBE CITY, INC.

 

0033423-028

 

363,258

 

180,869

 

TUBE CITY, INC.

 

0033423-029

 

103,487

 

52,250

 

TUBE CITY, INC.

 

0033423-030

 

889,752

 

444,813

 

TUBE CITY, INC.

 

0033423-031

 

61,445

 

24,950

 

TUBE CITY, INC.

 

0033423-032

 

46,339

 

22,550

 

TUBE CITY, INC.

 

0033423-033

 

85,716

 

29,377

 

TUBE CITY, INC.

 

0033423-034

 

440,517

 

212,109

 

TUBE CITY, INC.

 

0033423-035

 

6,517

 

3,163

 

TUBE CITY, INC.

 

0033423-036

 

109,320

 

53,047

 

TUBE CITY, INC.

 

0033423-037

 

979,456

 

471,860

 

TUBE CITY, INC.

 

0033423-038

 

372,571

 

179,956

 

TUBE CITY, INC.

 

0033423-039

 

99,366

 

47,995

 

TUBE CITY, INC.

 

0033423-040

 

25,572

 

9,700

 

TUBE CITY, INC.

 

0033423-041

 

76,187

 

16,300

 

TUBE CITY, INC.

 

0033423-042

 

229,472

 

110,550

 

TUBE CITY, INC.

 

0033423-043

 

496,326

 

239,731

 

TUBE CITY, INC.

 

0033423-044

 

664,629

 

268,875

 

TUBE CITY, INC.

 

0033423-045

 

734,312

 

347,081

 

TUBE CITY, INC.

 

0033423-046

 

29,363

 

6,100

 

TUBE CITY, INC.

 

0033423-047

 

368,578

 

174,213

 

TUBE CITY, INC.

 

0033423-048

 

21,197

 

10,038

 

TUBE CITY, INC.

 

0033423-049

 

40,158

 

18,700

 

TUBE CITY, INC.

 

0033423-050

 

11,482

 

3,792

 

TUBE CITY, INC.

 

0033423-051

 

18,775

 

5,475

 

TUBE CITY, INC.

 

0033423-052

 

126,548

 

46,553

 

TUBE CITY, INC.

 

0033423-053

 

41,221

 

12,000

 

TUBE CITY, INC.

 

0033423-054

 

19,068

 

8,855

 

TUBE CITY, INC.

 

0033423-055

 

378,141

 

175,603

 

TUBE CITY, INC.

 

0033423-056

 

29,662

 

13,775

 

TUBE CITY, INC.

 

0033423-057

 

23,657

 

11,041

 

TUBE CITY, INC.

 

0033423-058

 

643,557

 

294,911

 

TUBE CITY, INC.

 

0033423-059

 

446,564

 

199,650

 

TUBE CITY, INC.

 

0033423-060

 

38,802

 

17,298

 

TUBE CITY, INC.

 

0033423-061

 

237,660

 

94,893

 

TUBE CITY, INC.

 

0033423-062

 

123,526

 

49,321

 

TUBE CITY, INC.

 

0033423-063

 

138,437

 

55,275

 

TUBE CITY, INC.

 

0033423-064

 

25,139

 

10,038

 

TUBE CITY, INC.

 

0033423-065

 

259,472

 

70,188

 

TUBE CITY, INC.

 

0033423-066

 

27,164

 

10,846

 

TUBE CITY, INC.

 

0033423-067

 

136,431

 

36,750

 

TUBE CITY, INC.

 

0033423-068

 

7,543

 

3,024

 

TUBE CITY, INC.

 

0033423-069

 

61,675

 

24,613

 

TUBE CITY, INC.

 

0033423-070

 

106,162

 

28,525

 

TUBE CITY, INC.

 

0033423-071

 

156,629

 

57,978

 

TUBE CITY, INC.

 

0033423-121

 

78,148

 

39,401

 

TUBE CITY, INC.

 

0033423-124

 

78,284

 

39,463

 

TUBE CITY, INC.

 

0033423-221

 

62,452

 

31,488

 

TUBE CITY, INC.

 

0033423-224

 

67,857

 

34,207

 

TUBE CITY, INC.

 

0033423-324

 

77,214

 

38,924

 

TUBE CITY, INC.

 

0033423-534

 

247,918

 

119,373

 

TUBE CITY, INC.

 

0033423-565

 

242,605

 

65,625

 

TUCKAHOE LLC

 

1009411

 

3,529,618

 

 

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-012

 

19,419

 

15,005

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-108

 

60,894

 

9,986

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-110

 

60,894

 

9,986

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-116

 

121,789

 

19,971

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-117

 

240,468

 

70,211

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-214

 

62,894

 

9,986

 

UNITED STATES STEEL CORP

 

0035204-003

 

40,968

 

110,616

 

UNITED STATES STEEL CORP

 

0035204-005

 

62,494

 

104,658

 

UNITED STATES STEEL CORP

 

0035204-016

 

86,284

 

95,266

 

UNITED STATES STEEL CORP

 

0035204-023

 

75,000

 

135,069

 

 

10

--------------------------------------------------------------------------------

 

Customer Name

 

Lease Schedule (IER)

 

Adjusted NAV
@ 4/30/04

 

Booked Residual

 

UNITED STATES STEEL CORP

 

0035204-024

 

31,755

 

42,701

 

UNITED STATES STEEL CORP

 

0035204-027

 

35,389

 

66,757

 

UNITED STATES STEEL CORP

 

0035204-028

 

39,806

 

60,057

 

UNITED STATES STEEL CORP

 

0035204-029

 

26,282

 

38,457

 

UNITED STATES STEEL CORP

 

0035204-030

 

25,283

 

36,630

 

UNITED STATES STEEL CORP

 

0035204-032

 

24,748

 

34,882

 

UNITED STATES STEEL CORP

 

0035204-034

 

60,943

 

74,931

 

UNITED STATES STEEL CORP

 

0035204-035

 

72,075

 

79,453

 

UNITED STATES STEEL CORP

 

0035204-039

 

153,779

 

125,716

 

UNITED STATES STEEL CORP

 

0035204-040

 

34,845

 

22,523

 

UNITED STATES STEEL CORP

 

0035204-041

 

46,034

 

35,955

 

UNITED STATES STEEL CORP

 

0035204-042

 

231,059

 

188,136

 

UNITED STATES STEEL CORP

 

0042754-001

 

8,222,669

 

4,406,396

 

VITESSE CORPORATION

 

0043132-001

 

4,733,318

 

3,152,737

 

VOUGHT AIRCRAFT INDUSTRIES,INC

 

1010011

 

3,948,615

 

 

 

VOUGHT AIRCRAFT INDUSTRIES,INC

 

1010012

 

6,542,798

 

 

 

WATERMAN STEAMSHIP CORP.

 

0039505-001

 

35,901,689

 

18,040,000

 

WEIRTON STEEL CORPORATION

 

0031484-021

 

51,669

 

51,879

 

WEIRTON STEEL CORPORATION

 

0031484-023

 

5,752

 

5,752

 

WEIRTON STEEL CORPORATION

 

0031484-024

 

145,196

 

145,196

 

WEIRTON STEEL CORPORATION

 

0031484-025

 

136,483

 

98,475

 

WEIRTON STEEL CORPORATION

 

0031484-026

 

155,154

 

98,475

 

WEIRTON STEEL CORPORATION

 

0031484-027

 

65,874

 

65,874

 

WEIRTON STEEL CORPORATION

 

0031484-028

 

201,208

 

157,592

 

WEIRTON STEEL CORPORATION

 

0031484-029

 

9,925

 

8,126

 

WEIRTON STEEL CORPORATION

 

0031484-030

 

33,062

 

26,542

 

WEIRTON STEEL CORPORATION

 

0031484-031

 

6,132

 

—

 

WEIRTON STEEL CORPORATION

 

0031484-033

 

32,681

 

18,584

 

WEIRTON STEEL CORPORATION

 

0031484-034

 

472,949

 

303,702

 

WEIRTON STEEL CORPORATION

 

0031484-035

 

13,044

 

9,680

 

WEIRTON STEEL CORPORATION

 

0031484-037

 

28,228

 

—

 

WEIRTON STEEL CORPORATION

 

0031484-136

 

78,802

 

—

 

WHITE SWAN, INC.

 

0032804-101

 

11,366

 

—

 

WINGS VENTURES LIMITED

 

0035859-001

 

16,767,797

 

14,738,231

 

WINGS VENTURES LIMITED

 

0035859-002

 

656,153

 

522,851

 

WINGS VENTURES LIMITED

 

0035859-003

 

650,539

 

249,749

 

WINGS VENTURES LIMITED

 

0035859-004

 

1,101,252

 

119,147

 

WORLD WIDE CONTAINER LEASING

 

0042523-001

 

4,578,370

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-002

 

1,331,447

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-003

 

1,089,708

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-004

 

2,817,356

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-005

 

3,225,978

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-006

 

5,272,648

 

—

 

WORLD WIDE CONTAINER LEASING

 

0042523-007

 

1,240,637

 

—

 

WYMAN-GORDON TITANIUM CASTING

 

0033275-001

 

779,313

 

352,400

 

XEROX CORPORATION

 

1010111

 

1,136,863

 

 

 

XEROX CORPORATION

 

0039584-001

 

14,729,035

 

9,913,440

 

ASSETS IN INVENTORY-

 

 

 

—

 

 

 

AMERICAN STANDARD INC.

 

0031203-025

 

25,000

 

—

 

AMERICAN STANDARD INC.

 

0031203-045

 

5,742

 

—

 

AMERICAN STANDARD INC.

 

0031203-047

 

2,464

 

—

 

AMERICAN STANDARD INC.

 

0031203-125

 

25,000

 

—

 

CARGILL, INC.

 

0030411-072

 

1

 

2,829.00

 

GALVPRO L.P.

 

0035259-005

 

2,400

 

—

 

GLOBAL AIR CHARTER, INC

 

0042045-001

 

2,847,296

 

2,235,359.00

 

GREAT DANE AIRLINE, INC.

 

0040541-001

 

2,535,674

 

1,557,914.00

 

STONE CONTAINER CORP.

 

0030791-022

 

6,510

 

13,594.00

 

STONE CONTAINER CORP.

 

0030791-095

 

19,679

 

25,568.00

 

STONE CONTAINER CORP.

 

0030791-195

 

19,679

 

25,568.00

 

STONE CONTAINER CORP.

 

0030791-295

 

9,839

 

12,784.00

 

TRANSAMERICA EQUIPMENT LEASING

 

0027474-001

 

139,724

 

519,704.00

 

UNC JOHNSON TECHNOLOGY, INC.

 

0033069-017

 

10,145

 

79,061.00

 

UNITED STATES STEEL CORP

 

0035204-106

 

5,500

 

28,755.00

 

 

 

 

 

1,873,901,461

 

705,743,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(22,117,711

)

 

 

11

--------------------------------------------------------------------------------

 

Schedule 1.4, Allocation Schedule

See Schedule 1.4 to Exhibit 10.2 to this Report on Form 8-K.

 

--------------------------------------------------------------------------------

 

Schedule 1.9 (a) (iv)

 

Quarterly Portfolio Reports

 

1.             All GE generated delinquency reports for each portfolio asset
showing 30 day, 60 day, and 90+ day delinquencies.

 

2.             All GE generated troubled account, close watch or other credit
monitoring reports related to portfolio assets.

 

3.             All specific reserves as of quarter end and write-offs or write
downs during the quarter for all portfolio assets.

 

4.             All details used in justifying reserves, write-off and write
downs if not covered in other reports above for each affected portfolio asset.

 

5.             Such other reports or data as may reasonably be requested.

 

--------------------------------------------------------------------------------

 

Schedule 2.1 Deferred Assets

 

LEASE
SCHEDULE
IER

 

CUSTOMER NAME

 

NAV as of
4/30/04

 

0039482-001

 

AEROSERVICIOS CORPORATIVOS

 

$

9,347,862

 

0043021-001

 

AERODYNAMICS, INC

 

$

3,974,391

 

0038971-001

 

AEROVITRO. S.A. DE C.V.

 

$

37,789,492

 

0037304-001

 

ATOLL HOLDINGS LIMITED

 

$

2,219,793

 

0034942-001

 

BISON AIR CORPORATION

 

$

3,263,522

 

0034942-002

 

BISON AIR CORPORATION

 

$

238,907

 

0034942-003

 

BISON AIR CORPORATION

 

$

274,870

 

0038060-001

 

BOEING COMPANY, THE

 

$

17,607,627

 

0038060-002

 

BOEING COMPANY, THE

 

$

4,966,078

 

0038360-001

 

BOEING COMPANY, THE

 

$

17,847,355

 

0038360-002

 

BOEING COMPANY, THE

 

$

4,771,328

 

0034485-003

 

CERIDIAN INC.

 

$

10,309,698

 

0042401-001

 

CHI AVIATION

 

$

5,695,107

 

0037360-001

 

CORPORATE JETS, INC.

 

$

583,174

 

0037360-002

 

CORPORATE JETS, INC.

 

$

583,174

 

0037360-003

 

CORPORATE JETS, INC.

 

$

1,104,828

 

0037360-004

 

CORPORATE JETS, INC.

 

$

3,143,314

 

0037360-005

 

CORPORATE JETS, INC.

 

$

538,683

 

0037360-006

 

CORPORATE JETS, INC.

 

$

1,062,234

 

0037360-007

 

CORPORATE JETS, INC.

 

$

2,608,414

 

0037360-008

 

CORPORATE JETS, INC.

 

$

2,713,157

 

0033907-001

 

DALLAS AIRMOTIVE, INC

 

$

3,343,524

 

0034918-001

 

DAN RIVER, INC.

 

$

4,030,860

 

0034185-001

 

AEROSERVICIOS DINAMICOS, S.A.

 

$

5,761,920

 

0035407-001

 

EMBRY-RIDDLE AERONAUTICAL

 

$

125,816

 

0035407-003

 

EMBRY-RIDDLE AERONAUTICAL

 

$

41,625

 

0035407-006

 

EMBRY-RIDDLE AERONAUTICAL

 

$

721,474

 

0035407-009

 

EMBRY-RIDDLE AERONAUTICAL

 

$

46,718

 

0035407-012

 

EMBRY-RIDDLE AERONAUTICAL

 

$

178,444

 

0035407-013

 

EMBRY-RIDDLE AERONAUTICAL

 

$

43,513

 

0035407-014

 

EMBRY-RIDDLE AERONAUTICAL

 

$

350,801

 

0035407-015

 

EMBRY-RIDDLE AERONAUTICAL

 

$

180,683

 

0035407-016

 

EMBRY-RIDDLE AERONAUTICAL

 

$

255,288

 

0035407-017

 

EMBRY-RIDDLE AERONAUTICAL

 

$

180,421

 

0035407-018

 

EMBRY-RIDDLE AERONAUTICAL

 

$

553,245

 

0035407-020

 

EMBRY-RIDDLE AERONAUTICAL

 

$

856,833

 

0035407-021

 

EMBRY-RIDDLE AERONAUTICAL

 

$

108,209

 

0035407-022

 

EMBRY-RIDDLE AERONAUTICAL

 

$

432,938

 

0035407-023

 

EMBRY-RIDDLE AERONAUTICAL

 

$

757,642

 

0035407-024

 

EMBRY-RIDDLE AERONAUTICAL

 

$

651,382

 

0035407-025

 

EMBRY-RIDDLE AERONAUTICAL

 

$

184,163

 

0035407-026

 

EMBRY-RIDDLE AERONAUTICAL

 

$

368,279

 

0035407-027

 

EMBRY-RIDDLE AERONAUTICAL

 

$

197,595

 

0035407-028

 

EMBRY-RIDDLE AERONAUTICAL

 

$

1,071,494

 

0035407-029

 

EMBRY-RIDDLE AERONAUTICAL

 

$

896,042

 

0035407-030

 

EMBRY-RIDDLE AERONAUTICAL

 

$

604,402

 

0035407-031

 

EMBRY-RIDDLE AERONAUTICAL

 

$

601,203

 

0035407-032

 

EMBRY-RIDDLE AERONAUTICAL

 

$

1,226,109

 

0035407-033

 

EMBRY-RIDDLE AERONAUTICAL

 

$

901,688

 

0035407-034

 

EMBRY-RIDDLE AERONAUTICAL

 

$

1,482,712

 

0035407-035

 

EMBRY-RIDDLE AERONAUTICAL

 

$

696,890

 

0035407-036

 

EMBRY-RIDDLE AERONAUTICAL

 

$

707,201

 

0035407-037

 

EMBRY-RIDDLE AERONAUTICAL

 

$

238,403

 

0035407-038

 

EMBRY-RIDDLE AERONAUTICAL

 

$

238,773

 

0035407-039

 

EMBRY-RIDDLE AERONAUTICAL

 

$

238,412

 

0035407-043

 

EMBRY-RIDDLE AERONAUTICAL

 

$

240,447

 

0035407-044

 

EMBRY-RIDDLE AERONAUTICAL

 

$

370,431

 

0035407-045

 

EMBRY-RIDDLE AERONAUTICAL

 

$

247,446

 

0035407-046

 

EMBRY-RIDDLE AERONAUTICAL

 

$

249,527

 

 

1

--------------------------------------------------------------------------------

 

LEASE
SCHEDULE
IER

 

CUSTOMER NAME

 

NAV as of
4/30/04

 

0035407-047

 

EMBRY-RIDDLE AERONAUTICAL

 

$

125,596

 

0035407-048

 

EMBRY-RIDDLE AERONAUTICAL

 

$

311,083

 

0035407-049

 

EMBRY-RIDDLE AERONAUTICAL

 

$

155,536

 

0035407-051

 

EMBRY-RIDDLE AERONAUTICAL

 

$

156,804

 

0035407-052

 

EMBRY-RIDDLE AERONAUTICAL

 

$

316,153

 

0035407-053

 

EMBRY-RIDDLE AERONAUTICAL

 

$

316,161

 

0035407-054

 

EMBRY-RIDDLE AERONAUTICAL

 

$

316,161

 

0035407-101

 

EMBRY-RIDDLE AERONAUTICAL

 

$

7,538

 

0035407-112

 

EMBRY-RIDDLE AERONAUTICAL

 

$

52,338

 

0035407-115

 

EMBRY-RIDDLE AERONAUTICAL

 

$

12,564

 

0035407-128

 

EMBRY-RIDDLE AERONAUTICAL

 

$

72,163

 

0037559-001

 

EMBRY-RIDDLE AERONAUTICAL

 

$

2,993,732

 

0032079-004

 

FEDERAL-MOGUL CORPORATION

 

$

18,228,235

 

0034730-003

 

FEDERAL-MOGUL CORPORATION

 

$

2,271,674

 

0040541-001

 

GREAT DANE AIRLINE, INC.

 

 

HFSOL

 

0042045-001

 

GLOBAL AIR CHARTER, INC

 

 

HFSOL

 

0041341-001

 

GLOBAL FITTNESS HOLDINGS

 

$

4,231,759

 

0034074-002

 

GREAT LAKES DREDGE & DOCK CO.

 

$

4,007,917

 

0034074-003

 

GREAT LAKES DREDGE & DOCK CO.

 

$

1,973,390

 

0034074-008

 

GREAT LAKES DREDGE & DOCK CO.

 

$

7,985,662

 

0034074-009

 

GREAT LAKES DREDGE & DOCK CO.

 

$

1,330,944

 

0034074-011

 

GREAT LAKES DREDGE & DOCK CO.

 

$

1,368,800

 

0034074-012

 

GREAT LAKES DREDGE & DOCK CO.

 

$

51,555,722

 

0034074-013

 

GREAT LAKES DREDGE & DOCK CO.

 

$

4,322,439

 

0034074-108

 

GREAT LAKES DREDGE & DOCK CO.

 

$

332,736

 

0034074-208

 

GREAT LAKES DREDGE & DOCK CO.

 

$

4,859,700

 

0040918-001

 

H.J. HEINZ COMPANY

 

$

19,982,362

 

0039706-004

 

HAINAN AIRLINES CO., LTD.

 

$

9,940,223

 

0039706-005

 

HAINAN AIRLINES CO., LTD.

 

$

10,484,160

 

0042601-001

 

HANSEN PRERO AVIATION, LLC

 

$

7,885,389

 

0043553-001

 

HELIMED AERO TAXI LTDA

 

$

3,014,272

 

0039448-001

 

LCI SHIPHOLDING, INC.

 

$

52,638,132

 

0039494-001

 

LIDER TAXI AEREO S.A.

 

$

1,857,234

 

0039673-001

 

LUCENT TECHNOLOGIES, INC.

 

$

21,274,458

 

0039684-001

 

LUCENT TECHNOLOGIES, INC.

 

$

22,101,864

 

0039004-001

 

OMNI FLYS,.S.A. DE C.V.

 

$

2,478,077

 

0039015-001

 

OMNI FLYS,.S.A. DE C.V.

 

$

37,037,068

 

0034718-001

 

PEABODY WESTERN COAL CO.

 

$

2,959,456

 

0032717-004

 

QUEST II, LLC

 

$

3,522,935

 

0032717-005

 

QUEST II, LLC

 

$

13,697

 

0037215-001

 

RMH TELESERVICES, INC.

 

$

2,115,007

 

0037215-002

 

RMH TELESERVICES, INC.

 

$

41,014

 

0033126-001

 

ROLLS ROYCE CANADA LTD.

 

$

1,495,482

 

0037904-001

 

RX CHOICE, INC.

 

$

15,146,935

 

0037904-002

 

RX CHOICE, INC.

 

$

9,022,765

 

0037904-003

 

RX CHOICE, INC.

 

$

9,263,822

 

0037904-004

 

RX CHOICE, INC.

 

$

3,789,545

 

0037560-003

 

SCI TEXAS FUNERAL SERVICES

 

$

11,482,923

 

0042654-001

 

SERVICIOS INTEGRALES DE

 

$

10,719,761

 

0042654-002

 

SERVICIOS INTEGRALES DE

 

$

8,706,110

 

0039717-001

 

SKY KING, INC.

 

$

2,530,350

 

0039717-002

 

SKY KING, INC.

 

$

2,639,286

 

0038071-001

 

THE BRIDGEPORT &PORT JEFFERSON

 

$

12,122,293

 

0033941-001

 

TRUMP HOTELS & CASINO RESORTS

 

$

1,490,763

 

0043132-001

 

VITESSE CORPORATION

 

$

4,733,318

 

0039505-001

 

WATERMAN STEAMSHIP CORP.

 

$

35,901,689

 

0035859-001

 

WINGS VENTURES LIMITED

 

$

16,767,797

 

0035859-002

 

WINGS VENTURES LIMITED

 

$

656,153

 

0035859-003

 

WINGS VENTURES LIMITED

 

$

650,539

 

0035859-004

 

WINGS VENTURES LIMITED

 

$

1,101,252

 

0039584-001

 

XEROX CORPORATION

 

$

14,729,035

 

 

 

 

 

 

 

 

 

Total

 

$

652,412,324

 

 

2

--------------------------------------------------------------------------------

 

SCHEDULE 2.2

 

BUYER TRANSACTION DOCUMENTS

 

A.            INITIAL CLOSING DATE DELIVERIES:

 

1.             Master Assignment and Assumption Agreement.

 

2.             Servicing Agreement.

 

3.             Transition Services Agreement.

 

4.             Option Agreement.

 

5.             Each agreement, instrument, certificate or other instrument as
any Seller shall reasonably request for purposes of consummating the
transactions contemplated by this Agreement, including, without limitation, any
FAA document, assumption agreement, consent agreement, purchase agreement, quiet
enjoyment agreement, non-disturbance agreement, limited power of attorney, title
document or other similar documentation.

 

B.            SUBSEQUENT CLOSING DATE DELIVERIES:  With respect to the Deferred
Assets, each agreement, instrument, certificate or other instrument as any
Seller shall reasonably request for purposes of consummating the transactions
contemplated by this Agreement, including, without limitation, any master
assignment and assumption agreement, servicing agreement, transition services
agreement, FAA document, assumption agreement, consent agreement, purchase
agreement, quiet enjoyment agreement, non-disturbance agreement, limited power
of attorney, title document or other similar documentation.

 

1.             Master Assignment and Assumption Agreement.

 

1

--------------------------------------------------------------------------------

 

SCHEDULE 2.3

 

SELLER TRANSACTION DOCUMENTS

 

A.            INITIAL CLOSING DATE DELIVERIES:

 

1.             Master Assignment and Assumption Agreement.

 

2.             Bill of Sale.

 

3.             Servicing Agreement.

 

4.             Transition Services Agreement.

 

5.             Option Agreement.

 

6.             With respect to each Seller, each agreement, instrument,
certificate or other instrument as Buyer shall reasonably request for purposes
of consummating the transactions contemplated by this Agreement, including,
without limitation, any allonge, stock power, FAA document, bill of sale,
limited power of attorney, assumption agreement, consent agreement, purchase
agreement, title document or other similar documentation.

 

B.            SUBSEQUENT CLOSING DATE DELIVERIES:  With respect to the Deferred
Assets, each agreement, instrument, certificate or other instrument as any
Seller shall reasonably request for purposes of consummating the transactions
contemplated by this Agreement, including, without limitation, any master
assignment and assumption agreement, bill of sale, allonge, stock power,
servicing agreement, transition services agreement, FAA document, assumption
agreement, consent agreement, purchase agreement, limited power of attorney,
title document or other similar documentation.

 

1.             Master Assignment and Assumption Agreement.

 

2.             Bill of Sale.

 

 

2

--------------------------------------------------------------------------------

 

Schedule 3.1(b)

 

Sellers’ Conflicts

 

1.     All aircraft and related title documents covered by the Agreement or by a
Seller Transaction Document will need to be registered with the proper
Governmental Authority.

 

2.     All vessels and related title documents covered by the Agreement or by a
Seller Transaction Document will need to be registered with the proper
Governmental Authority.

 

3.     All motor vehicles (including trucks and trailers) covered by the
Agreement or by a Seller Transaction Document will need to be registered/titled
with the proper Governmental Authority.

 

4.     All railroad rolling stock covered by the Agreement or by a Seller
Transaction Document will need to be registered/titled with the proper
Governmental Authority.

 

5.     Filing with the Brazilian Administrative Council for Economic Defense
under the Brazilian Antitrust Law.

 

6.     Filing with the Mexican Federal Competition Commission under the Mexican
Federal Law on Economic Competition.

 

7.     Filing with the Canadian Commissioner of Competition under the Canadian
Competition Act, subject to further review.

 

--------------------------------------------------------------------------------

 

 

Schedule 3.1(c)

 

Financial Statements – Income Statement

 

BOEING CAPITAL CORPORATION
COMMERCIAL FINANCIAL SERVICES SEGMENT
INCOME STATEMENT
31-Dec-03
(Dollars in Millions)

 

 

 

2003 YTD

 

 

 

 

 

REVENUE

 

 

 

Finance Lease Income

 

$

63.8

 

Interest Income

 

54.0

 

Operating Lease Income

 

96.9

 

Gain (loss) on Disposal or Re-lease of Assets

 

8.9

 

Other

 

5.4

 

Total Revenue

 

229.0

 

 

 

 

 

DIRECT EXPENSES

 

 

 

Interest and Debt Expense

 

83.9

 

Depreciation Expense on Financing Assets

 

48.1

 

 

 

 

 

Spread

 

97.0

 

Provision for Credit Losses

 

18.4

 

Net Margin

 

78.6

 

 

 

 

 

G&A AND OTHER EXPENSES

 

 

 

Direct

 

9.4

 

Allocated

 

9.6

 

Asset Impairment Expenses

 

3.9

 

Other Expenses

 

4.5

 

Total G&A and Other Expenses

 

27.4

 

 

 

 

 

Income Before Tax

 

51.2

 

Provision for Income Tax

 

17.2

 

 

 

 

 

Net Income

 

$

34.0

 

 

--------------------------------------------------------------------------------

 

Schedule 3.1(c)

 

Financial Statements – Balance Sheet

 

BOEING CAPITAL CORPORATION
COMMERCIAL FINANCIAL SERVICES SEGMENT
BALANCE SHEET
AS OF December 31, 2003
(Dollars in Millions)

 

 

 

 

December 31,
2003

 

 

 

 

 

ASSETS

 

 

 

Cash and Cash Equivalents

 

$

132.5

 

 

 

 

 

Financing Assets:

 

 

 

Direct Financing Leases

 

724.3

 

Notes Receivable

 

750.4

 

Leveraged Leases

 

—

 

Total Financing Assets

 

1,474.7

 

Reserve for Credit Losses

 

(48.4

)

Total Financing Assets less Reserve for Credit Losses

 

1,426.3

 

 

 

 

 

Other Financial Assets:

 

 

 

Operating Leases

 

729.0

 

Investments

 

—

 

Equipment Held for Sale or Re-lease

 

46.0

 

Total Other Financial Assets

 

775.0

 

 

 

 

 

Other Assets

 

32.2

 

Notes and Accounts with Boeing

 

—

 

Total Assets

 

2,366.0

 

 

 

 

 

LIABILITIES AND SHAREHOLDER’S EQUITY

 

 

 

Liabilities:

 

 

 

Notes and Accounts with Boeing

 

10.7

 

Accts Payable & Accrued Expense

 

8.8

 

Interest Payable

 

18.4

 

Other Liabilities

 

16.7

 

Deferred Tax

 

229.7

 

Debt

 

1,746.8

 

Total Liabilities

 

2,031.1

 

 

 

 

 

Shareholder’s Equity

 

334.9

 

Total Liabilities and Shareholder’s Equity

 

$

2,366.0

 

 

--------------------------------------------------------------------------------

 

Schedule 3.1(f)

 

Governmental Permits

 

No.

 

State

 

JURISDICTIONS REGISTERED
FOR SALES TAX

 

Account

 

CO

 

Filing Frequency

 

1

 

AL

 

ALABAMA STATE DEPT. OF REV.

 

7668-00804

 

ELC

 

MONTHLY

 

2

 

AL

 

CITY OF HUNTSVILLE, ALABAMA

 

307788

 

ELC

 

MONTHLY

 

3

 

AR

 

ARKANSAS DEPT. OF FINANCE

 

0024753-76-001

 

ELC

 

MONTHLY

 

4

 

AZ

 

ARIZONA DEPT. OF REVENUE

 

07-096231-V

 

ELC

 

MONTHLY

 

5

 

AZ

 

CITY OF CHANDLER

 

E126

 

ELC

 

MONTHLY

 

6

 

AZ

 

CITY OF FLAGSTAFF

 

80221252-M

 

ELC

 

MONTHLY

 

7

 

AZ

 

CITY OF GLENDALE

 

100007473

 

ELC

 

QUARTERLY

 

8

 

AZ

 

CITY OF NOGALES

 

4889

 

ELC

 

ANNUAL

 

9

 

AZ

 

CITY OF PEORIA

 

5619

 

ELC

 

ANNUAL

 

10

 

AZ

 

CITY OF PRESCOTT

 

2-90801-10

 

ELC

 

ANNUAL

 

11

 

AZ

 

CITY OF SCOTTSDALE

 

103428

 

ELC

 

QUARTERLY

 

12

 

AZ

 

CITY OF TEMPE

 

9242

 

ELC

 

QUARTERLY

 

13

 

AZ

 

CITY OF TUCSON

 

0064335

 

ELC

 

ANNUAL

 

14

 

AZ

 

CITY TREASURER - PHOENIX

 

74021545S

 

ELC

 

MONTHLY

 

15

 

CA

 

CA. STATE BOARD OF EQUAL.

 

SR SAB 16-638381

 

ELC

 

MONTHLY

 

16

 

CO

 

COLORADO DEPT. OF REVENUE

 

80-20685

 

ELC

 

MONTHLY

 

17

 

CO

 

CITY OF ARVADA

 

1598100

 

ELC

 

QUARTERLY

 

18

 

CO

 

CITY OF BOULDER

 

0-30284-2

 

ELC

 

MONTHLY

 

19

 

CO

 

CITY OF BRECKENRIDGE

 

7454-1-30-00

 

ELC

 

MONTHLY

 

20

 

CO

 

CITY OF COMMERCE

 

6488

 

ELC

 

ANNUAL

 

21

 

CO

 

CITY OF DURANGO

 

920268

 

ELC

 

MONTHLY

 

22

 

CO

 

CITY OF ENGLEWOOD

 

10960-3

 

ELC

 

ANNUAL

 

23

 

CO

 

CITY OF FORT COLLINS

 

24032

 

ELC

 

QUARTERLY

 

24

 

CO

 

CITY OF FORT LUPTON

 

 

 

ELC

 

ANNUAL

 

25

 

CO

 

CITY OF GLENDALE

 

0343

 

ELC

 

QUARTERLY

 

26

 

CO

 

CITY OF GRAND JUNCTION

 

15775-1

 

ELC

 

MONTHLY

 

27

 

CO

 

CITY OF LAJUNTA

 

1266

 

ELC

 

ANNUAL

 

28

 

CO

 

CITY OF LAKEWOOD

 

12499

 

ELC

 

QUARTERLY

 

29

 

CO

 

CITY OF LITTLETON

 

2-03844

 

ELC

 

OCCASIONAL

 

30

 

CO

 

CITY OF LONGMONT

 

1-10755-0188

 

ELC

 

MONTHLY

 

31

 

CO

 

CITY OF LOUISVILLE

 

L0118

 

ELC

 

ANNUAL

 

32

 

CO

 

CITY OF MESA

 

21765

 

ELC

 

ANNUAL

 

33

 

CO

 

CITY OF WHEAT RIDGE

 

01440

 

ELC

 

ANNUAL

 

34

 

CO

 

CITY OF WOODLAND PARK

 

000446

 

ELC

 

ANNUAL

 

35

 

CO

 

CITY WESTMINISTER

 

1159701-03

 

ELC

 

ANNUAL

 

36

 

CO

 

CITY/COUNTY OF DENVER

 

0048502

 

ELC

 

MONTHLY

 

37

 

CO

 

TOWN OF WINTER PARK

 

6032

 

ELC

 

OCCASIONAL

 

38

 

CT

 

CONNECTICUT DEPT. OF REV.

 

0886721-000

 

ELC

 

ANNUAL

 

39

 

DC

 

D.C. TREASURER/SALES TAX

 

350000008707

 

ELC

 

ANNUAL

 

40

 

DE

 

DELAWARE DEPT. OF REVENUE

 

1-952801432

 

ELC

 

QUARTERLY

 

41

 

FL

 

FLORIDA DEPT. OF REVENUE

 

78-04-020442-61

 

ELC

 

MONTHLY

 

 

--------------------------------------------------------------------------------

 

No.

 

State

 

JURISDICTIONS REGISTERED
FOR SALES TAX

 

Account

 

CO

 

Filing Frequency

 

42

 

GA

 

GEORGIA DEPT. OF REVENUE

 

175-61-12108-3

 

ELC

 

MONTHLY

 

43

 

HI

 

HAWAII DEPT. OF TAXATION

 

10227370

 

ELC

 

MONTHLY

 

44

 

IA

 

IOWA DEPT. OF REVENUE

 

2-00-112120

 

ELC

 

QUARTERLY

 

45

 

ID

 

IDAHO TAX COMMISSION

 

000146884-S

 

ELC

 

MONTHLY

 

46

 

IL

 

ILLINOIS DEPT. OF REVENUE

 

0269-5316

 

ELC

 

MONTHLY

 

47

 

IL

 

CITY OF CHICAGO

 

213206

 

ELC

 

MONTHLY

 

48

 

IN

 

INDIANA DEPT. OF REVENUE

 

003684733-001-0

 

ELC

 

MONTHLY

 

49

 

KA

 

KANSAS DEPT. OF REVENUE

 

115-0777

 

ELC

 

MONTHLY

 

50

 

KY

 

COMMONWEALTH OF KENTUCKY

 

113415

 

ELC

 

ANNUAL

 

51

 

LA

 

LOUISIANA DEPT. OF REV.

 

0756155-001

 

ELC

 

MONTHLY

 

52

 

LA

 

ACADIA PARISH SCHOOL BOARD

 

610257

 

ELC

 

ANNUAL

 

53

 

LA

 

BEAUREGARD PSH SHERIFF’S DT.

 

00164140

 

ELC

 

OCCASIONAL

 

54

 

LA

 

BIENVILLE PARISH SALES & USE TAX

 

12-04237

 

ELC

 

MONTHLY

 

55

 

LA

 

BOGALUSA SCL & WASH PARISH

 

1762

 

ELC

 

OCCASIONAL

 

56

 

LA

 

BOSSIER PARISH SCH BRD

 

610208

 

ELC

 

MONTHLY

 

57

 

LA

 

CADDO SHREVEPORT TAX COMM.

 

11171

 

ELC

 

MONTHLY

 

58

 

LA

 

CALCASIEU PARISH SCH BRD

 

00014073

 

ELC

 

OCCASIONAL

 

59

 

LA

 

CITY OF ABBEVILLE

 

11175

 

ELC

 

OCCASIONAL

 

60

 

LA

 

CITY OF BATON ROUGE

 

4031290-1

 

ELC

 

OCCASIONAL

 

61

 

LA

 

CITY OF BOGALUSA

 

6877

 

ELC

 

OCCASIONAL

 

62

 

LA

 

CITY OF COVINGTON

 

4238

 

ELC

 

OCCASIONAL

 

63

 

LA

 

CITY OF DERIDDER

 

0164140

 

ELC

 

OCCASIONAL

 

64

 

LA

 

CITY OF MAMOU

 

11-889-711

 

ELC

 

OCCASIONAL

 

65

 

LA

 

CITY OF MANDEVILLE

 

 

 

ELC

 

OCCASIONAL

 

66

 

LA

 

CITY OF MINDEN

 

61051

 

ELC

 

OCCASIONAL

 

67

 

LA

 

CITY OF MONROE

 

472205

 

ELC

 

MONTHLY

 

68

 

LA

 

CITY OF THIBODAUX

 

292-099-02129

 

ELC

 

OCCASIONAL

 

69

 

LA

 

EAST CARROLL PARISH

 

5-000300-M

 

ELC

 

OCCASIONAL

 

70

 

LA

 

FRANKLIN PARISH SCHOOL BOARD

 

 

 

ELC

 

OCCASIONAL

 

71

 

LA

 

H. LEE PARISH OF JEFFERSON

 

50-05325-3

 

ELC

 

QUARTERLY

 

72

 

LA

 

IBERIA PARISH SCHOOL BOARD

 

0793

 

ELC

 

OCCASIONAL

 

73

 

LA

 

JACKSON PARISH

 

22-01403

 

ELC

 

MONTHLY

 

74

 

LA

 

LAYFAYETTE PARISH SCH BRD

 

650-00-61-12806

 

ELC

 

OCCASIONAL

 

75

 

LA

 

LIVINGSTON PARISH SCH BRD

 

650-13-06283

 

ELC

 

OCCASIONAL

 

76

 

LA

 

MADISON PARISH SCHOOL BOARD

 

09-00437

 

ELC

 

OCCASIONAL

 

77

 

LA

 

NEW ORLEANS DEPT. OF FIN.

 

101184471 34

 

ELC

 

MONTHLY

 

78

 

LA

 

PARISH OF ALLEN

 

37-00938

 

ELC

 

OCCASIONAL

 

79

 

LA

 

PARISH OF ASCENSION

 

00-0-7516

 

ELC

 

MONTHLY

 

80

 

LA

 

PARISH OF AVOYELLES

 

316-5874

 

ELC

 

OCCASIONAL

 

81

 

LA

 

PARISH OF EVANGELINE / MAMOU

 

0000214

 

ELC

 

OCCASIONAL

 

82

 

LA

 

PARISH OF JEFFERSON DAVIS

 

011-6479

 

ELC

 

OCCASIONAL

 

83

 

LA

 

PARISH OF RICHLAND

 

0909772

 

ELC

 

OCCASIONAL

 

84

 

LA

 

PARISH OF ST. MARY

 

73A 8900 08572

 

ELC

 

ANNUAL

 

 

--------------------------------------------------------------------------------

 

No.

 

State

 

JURISDICTIONS REGISTERED
FOR SALES TAX

 

Account

 

CO

 

Filing Frequency

 

85

 

LA

 

PARISH OF ST. TAMMANY / SLIDELL

 

48-03-0226

 

ELC

 

OCCASIONAL

 

86

 

LA

 

PARISH OF TANGIPAHOA

 

0004119

 

ELC

 

OCCASIONAL

 

87

 

LA

 

PARISH OF TENSAS

 

2-001195

 

ELC

 

OCCASIONAL

 

88

 

LA

 

PARISH OF TERREBONNE

 

650-05G61-08915 X

 

ELC

 

OCCASIONAL

 

89

 

LA

 

PLAQUEMINES PARISH GOVERNMENT

 

09514

 

ELC

 

MONTHLY

 

90

 

LA

 

RAPIDES PARISH

 

12253

 

ELC

 

MONTHLY

 

91

 

LA

 

SAINT JAMES

 

300-061-04199

 

ELC

 

OCCASIONAL

 

92

 

LA

 

SAINT LANDRY

 

cert#499-61-13196

 

ELC

 

ANNUAL

 

93

 

LA

 

ST. CHARLES PARISH SCH BD

 

86-06799

 

ELC

 

OCCASIONAL

 

94

 

LA

 

ST. JOHN THE BAPTIST PARISH

 

480-761-9697

 

ELC

 

MONTHLY

 

95

 

LA

 

VERMILION PARISH SCHOOL

 

008339

 

ELC

 

OCCASIONAL

 

96

 

LA

 

W. BATON ROUGE P’SH SCH BRD

 

3330

 

ELC

 

ANNUAL

 

97

 

LA

 

WASHINGTON P’SH/POLICE JURY

 

05-62000

 

ELC

 

MONTHLY

 

98

 

LA

 

WEBSTER PARISH SCHOOL BOARD

 

01728

 

ELC

 

OCCASIONAL

 

99

 

LA

 

WINN PARISH-CITY WINNFELD

 

11-02539

 

ELC

 

OCCASIONAL

 

100

 

MA

 

MASSACHUSETTS DEPT. OF REV.

 

952-801-432*09*

 

ELC

 

QUARTERLY

 

101

 

MD

 

MARYLAND COMPTR.OF TREASURY

 

02249849

 

ELC

 

QUARTERLY

 

102

 

ME

 

MAINE BUREAU OF TAXATION

 

F053063

 

ELC

 

QUARTERLY

 

103

 

MI

 

MICHIGAN DEPT. OF REVENUE

 

95-2801432

 

ELC

 

MONTHLY

 

104

 

MN

 

MINNESOTA DEPT. OF REVENUE

 

6401912

 

ELC

 

MONTHLY

 

105

 

MN

 

CITY OF DULUTH

 

53731000C

 

ELC

 

ANNUAL

 

106

 

MN

 

CITY OF MINNEAPOLIS

 

6401912

 

ELC

 

MONTHLY

 

107

 

MO

 

MISSOURI DEPT. OF REVENUE

 

11341874

 

ELC

 

MONTHLY

 

108

 

MO

 

MISSOURI MOTOR VEHICLE BUREAU

 

LR1012

 

ELC

 

ANNUAL

 

109

 

MS

 

MISSISSIPPI TAX COMMISSION

 

83-02264-0

 

ELC

 

MONTHLY

 

110

 

NC

 

NORTH CAROLINA DEPT. OF REV.

 

711 9 101 14635

 

ELC

 

MONTHLY

 

111

 

NC

 

NC-MECKLENBURG PUBLIC TRANSPORTATION

 

10114635

 

ELC

 

MONTHLY

 

112

 

NC

 

NC-MOTR VEHICLE LEASE & RENTAL TAX

 

10114635

 

ELC

 

QUARTERLY

 

113

 

ND

 

NORTH DAKOTA

 

117440 00

 

ELC

 

QUARTERLY

 

114

 

NE

 

NEBRASKA DEPT. OF REV.

 

2 2467739 1 000

 

ELC

 

ANNUAL

 

115

 

NE

 

NEBRASKA DEPT. OF REV. - FORM 94

 

-2467739

 

ELC

 

ANNUAL

 

116

 

NJ

 

NEW JERSEY SALES TAX

 

952-801-432 / 000

 

ELC

 

MONTHLY

 

117

 

NM

 

NEW MEXICO DEPT. OF REVENUE

 

01791279002

 

ELC

 

MONTHLY

 

118

 

NV

 

NEVADA DEPT. OF TAXATION - B/T

 

659182109

 

ELC

 

QUARTERLY

 

119

 

NV

 

NEVADA DEPT. OF TAXATION - S/T

 

480114432

 

ELC

 

MONTHLY

 

120

 

NY

 

NEW YORK DEPT. OF REVENUE

 

95-28014322

 

ELC

 

MONTHLY

 

121

 

OH

 

OHIO DEPT. OF REVENUE

 

99-006281(2)

 

ELC

 

MONTHLY

 

122

 

OK

 

OKLAHOMA TAX COMMISSION

 

222018

 

ELC

 

MONTHLY

 

123

 

PA

 

COMMONWEALTH OF PENNSYLVANIA

 

99-234572

 

ELC

 

MONTHLY

 

 

--------------------------------------------------------------------------------

 

No.

 

State

 

JURISDICTIONS REGISTERED
FOR SALES TAX

 

Account

 

CO

 

Filing Frequency

 

124

 

PA

 

PA DEPARTMENT OF REVENUE - MV

 

99-234572

 

ELC

 

QUARTERLY

 

125

 

RI

 

RHODE ISLAND DIV. OF TAX.

 

94666

 

ELC

 

QUARTERLY

 

126

 

SC

 

SOUTH CAROLINA TAX COMM.

 

1394226-000-9

 

ELC

 

MONTHLY

 

127

 

SD

 

SOUTH DAKOTA DEPT. OF REVENUE

 

73-010358-ST-4

 

ELC

 

Bi-ANNUAL

 

128

 

TN

 

TENNESSEE DEPT. OF REVENUE

 

101761999

 

ELC

 

MONTHLY

 

129

 

TX

 

TEXAS COMPTROLLER OF ACCTS

 

1-95-2801432-7

 

ELC

 

MONTHLY

 

130

 

TX

 

TEXAS SURCHARGE Heavy Duty Diesel

 

1-95-2801432-7

 

ELC

 

MONTHLY

 

131

 

UT

 

UTAH STATE TAX COMMISSION

 

C65298

 

ELC

 

QUARTERLY

 

132

 

VA

 

VIRGINIA DEPT. OF REVENUE

 

000070092-4

 

ELC

 

MONTHLY

 

133

 

VT

 

STATE OF VERMONT

 

14839

 

ELC

 

ANNUAL

 

134

 

WA

 

WASHINGTON DEPT. OF REVENUE

 

600 1490 918

 

ELC

 

MONTHLY

 

135

 

WI

 

WISCONSIN DEPT. OF REVENUE

 

UT04827

 

ELC

 

MONTHLY

 

136

 

WV

 

WEST VIRGINIA TAX COMM.

 

95-280-1432-001

 

ELC

 

ANNUAL

 

137

 

WV

 

WEST VIRGINIA DIV. OF MV

 

00096-001

 

ELC

 

MONTHLY

 

138

 

WY

 

STATE OF WYOMING

 

24-0-01998

 

ELC

 

QUARTERLY

 

REGISTRATIONS / AUTHORITY TO DO BUSINESS

139

 

AL

 

 

 

 

 

ELC / BCC

 

 

 

140

 

AZ

 

 

 

 

 

ELC

 

 

 

141

 

CA

 

 

 

 

 

ELC / BCC

 

 

 

142

 

DE

 

 

 

 

 

ELC / BCC

 

 

 

143

 

FL

 

 

 

 

 

ELC

 

 

 

144

 

IL

 

 

 

 

 

ELC / BCC

 

 

 

145

 

KS

 

 

 

 

 

BCC

 

 

 

146

 

MA

 

 

 

 

 

ELC

 

 

 

147

 

MD

 

 

 

 

 

ELC / BCC

 

 

 

148

 

MI

 

 

 

 

 

ELC

 

 

 

149

 

MO

 

 

 

 

 

ELC

 

 

 

150

 

NC

 

 

 

 

 

ELC / BCC

 

 

 

151

 

OH

 

 

 

 

 

ELC / BCC

 

 

 

152

 

OK

 

 

 

 

 

ELC

 

 

 

153

 

OR

 

 

 

 

 

LLC

 

 

 

154

 

PA

 

 

 

 

 

ELC

 

 

 

155

 

TX

 

 

 

 

 

ELC / BCC

 

 

 

156

 

WI

 

 

 

 

 

ELC

 

 

 

BUSINESS LICENSES / PERMITS

 

157

 

AL

 

MADISON COUNTY, ALABAMA

 

105726

 

ELC

 

 

 

158

 

AL

 

CITY OF HUNTSVILLE, ALABAMA

 

18801

 

ELC

 

 

 

159

 

AZ

 

CITY OF CHANDLER

 

100014126

 

ELC

 

 

 

160

 

CA

 

CITY OF LONG BEACH

 

BU94061740

 

MDOFC

 

 

 

161

 

CA

 

CITY OF LONG BEACH

 

BU20101140

 

ELC

 

 

 

162

 

CA

 

COUNTY OF ALAMEDA

 

5291

 

ELC

 

 

 

163

 

CO

 

CITY OF GLENDALE

 

9-0588

 

ELC

 

 

 

164

 

CO

 

CITY OF AURORA

 

6449

 

ELC

 

 

 

165

 

CO

 

COUNTY OF ALAMEDA

 

5291

 

ELC

 

 

 

166

 

CO

 

CITY OF WESTMINSTER

 

64

 

ELC

 

 

 

 

--------------------------------------------------------------------------------

 

No.

 

State

 

JURISDICTIONS REGISTERED
FOR SALES TAX

 

Account

 

CO

 

Filing Frequency

 

167

 

DE

 

STATE OF DELAWARE

 

1989040277

 

ELC

 

 

 

168

 

LA

 

LOUISIANA MOTOR VEHICLE COMMISSION

 

L-8-197

 

ELC

 

 

 

169

 

NV

 

STATE OF NEVADA

 

C-0088633

 

ELC

 

 

 

170

 

OH

 

MOTOR VEHICLE LEASING DEALER LICENSE

 

LD003737

 

ELC

 

 

 

171

 

OR

 

CITY OF PORTLAND BUSINESS LICENSE

 

659200

 

PORTLAND TUBE

 

 

 

172

 

WA

 

CITY OF BELLEVUE

 

17211

 

ELC

 

 

 

173

 

WA

 

CITY OF CENTRALIA

 

5304

 

ELC

 

 

 

174

 

WA

 

CITY OF SPOKANE

 

L0405835

 

ELC

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 3.1(i)

 

Software Contracts

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 3.1(j)

 

Litigation – Seller

 

Donald Heavrin v. BCC, MDFC, et al.  Suit for “perjury”, fraud, filing false
claims.  Dismissed with prejudice by the United States District Court For
Western District of Kentucky.  Plaintiff is appealing to the 6th Circuit,
virtually no chance of success.

 

Include by reference Schedule 3.2(h).

 

--------------------------------------------------------------------------------

 

Schedule 3.1(k)

 

Contracts

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 3.1(n-(i))

 

Benefit Plans

 

1.                                       The Pension Value Plan for Employees of
The Boeing Company

2.                                       The Boeing Company Voluntary Investment
Plan

3.                                       The Boeing Company Employee Health and
Welfare Plan

4.                                       The Boeing Company Disability, Life and
Accident Plan

5.                                       The Boeing Company Executive Life
Insurance Plan

6.                                       The Boeing Company Retiree Life
Insurance Plan

7.                                       The Boeing Company Retiree Health and
Welfare Plan

8.                                       The Boeing Company Cafeteria plan, Plan
576

9.                                       The Boeing Company Layoff Benefits Plan

10.                                 The Boeing Company Executive Layoff Benefits
Plan

11.                                 Supplemental Benefits Plan for Employees of
The Boeing Company

12.                                 Supplemental Executive Retirement Plan for
Employees of The Boeing Company

13.                                 Deferred Compensation Plan for Employees of
The Boeing Company

14.                                 Incentive Compensation Plan for Officers and
Employees of The Boeing Company and Subsidiaries

15.                                 The Boeing Company 1997 Incentive Stock Plan

16.                                 The Boeing Company 1993 Incentive Stock Plan

17.                                 The Boeing Company 1988 Stock Option Plan

18.                                 Executive Compensation Program

19.                                 Cash Award Program

20.                                 Special Incentive Awards Program

21.                                 Commission Plan for CFS Marketing Employees

22.                                 Bonus Program for
Non-Marketing/Non-Executive CFS Employees

23.                                 The Boeing Company ShareValue Plan

24.                                 Vacation Provisions for Salaried Employees
(Procedure PRO-997)

25.                                 Sick Leave Provisions for Salaried Non-Union
Employees (Procedure PRO-1004)

Holidays (Procedure PRO-1002)

 

--------------------------------------------------------------------------------

 

Schedule 3.1(n-(iii))

 

Exceptions to Benefits

 

An application is pending with the Internal Revenue Service for an initial
determination letter on the qualification of The Pension Value Plan for
Employees of The Boeing Company.

 

--------------------------------------------------------------------------------

 

Schedule 3.1(p-(ii))

 

Retention Agreements

 

1.                                       Retention Bonus Program offered by The
Boeing Company to James C. Hammersmith, Sr. Dir – Documentation, retention date
January 20, 2004.

 

2.                                       Retention Bonus Program offered by The
Boeing Company to Ramon P. Seranio, Sr. Dir – Credit, retention date January 20,
2004.

 

3.                                       Retention Bonus Program offered by The
Boeing Company to Doby A. Rose, Dir – Equipment Portfolio, retention date
January 20, 2004.

 

4.                                       Retention Bonus Program offered by The
Boeing Company to Gary A. Willett, Sr. Dir – Equipment, retention date
January 20, 2004.

 

5.                                       Retention Bonus Program offered by The
Boeing Company to Louis C. Seno, Jr., Sr. Dir – Business Aircraft, retention
date January 20, 2004.

 

6.                                       Retention Bonus Program offered by The
Boeing Company to Terrence S. Johnson, Dir – Quantitative Analysis, retention
date January 20, 2004.

 

7.                                       Retention Bonus Program offered by The
Boeing Company to Joseph F. Corff, Manager – Special Credits, retention date
January 20, 2004.

 

--------------------------------------------------------------------------------

 

Schedule 3.1(q)

 

Undisclosed Liabilities

 

Off Balance sheet arrangements disclosed in the March 31, 2004 10Q in Footnote 9

 

Asset guarantees to General Electric Capital Corporation

 

1                                          Equipment Lease Agreement 20686 dated
June 10, 1990 between MDFC Equipment Leasing Corporation and HRB Systems, Inc.
As Lessee

a. 1990 Beachcraft Kind Air B350 Serial Number FL-034

 

2                                          Equipment Lease Agreement 35893 dated
December 30, 1999 between MDFC Equipment Leasing Corporation and Peabody Holding
Company, Inc.

a. Corporate Jets Model BAE-125-1000a Serial number 259031

 

3                                          Equipment Lease Agreement 35893 dated
December 30, 1999 between MDFC Equipment Leasing Corporation and Peabody Holding
Company, Inc.

a. MK-V EGPWS with windshear and EFIS, Dual NZ-2000 with channel GPS and Primus
880 weather radar installed on Corporate Jets Model BAE-125-1000A Serial number
259031

 

--------------------------------------------------------------------------------

 

Schedule 3.2(g)(i)

Late Payments

 

Boeing Capital Corporation

Accounts over 30 Days Past Due

As of 04/30/04

 

Unexpired Leases

 

Customer

Adelphia Communications

Centrobe, Inc.

CSU Transport

Dan River, Inc.

Edwards Baking Company

Embry Riddle

Quest II

Russell Stanley Corp.

Stone Container Corp.

United States Steel

Weirton Steel Corp.

World Wide Container Leasing

Xerox Corporation

Federal-Mogul Corporation

Neuvant Areospace Corporation

Sky King

Southern Bulk Industries, Inc.

 

LOANS

 

Customer

Aero Toy Store

Coleman Cable Acquistion

Doane Pet Care

Gemini Industries

Glenoit Corp

Golden Gems

Grays Harbor Paper

Joda Partnership

Lowa Corp.

Maritime Shipping

Policyd, S.A.DE C.V.

Sky King, Inc.

Southern Bulk Industries, Inc.

 

--------------------------------------------------------------------------------

 

PREPAYMENTS 3.2 (g)(i)

 

MAY 2004 PAYMENTS
RECEIVED IN APRIL

 

 

 

PREPAYMENTS
3.2 (g)(i)

 

 

 

 

 

RENT PREPAYMENTS
REFLECTED IN NAV

 

SALES TAX/OTHER
BAL.SHEET ITEMS

 

Customer

 

Invoice Nbr

 

Due Date

 

Lease

 

Fee Code Desc

 

Amount Applied

 

Amount Applied

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Standard Industries

 

298392

 

5/1/2004 0:00

 

31203

 

RENTS

 

2,447.37

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

1,698.02

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

5,175.63

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

4,916.91

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

1,723.99

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

1,337.28

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

1,660.40

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

3,169.80

 

 

 

American Standard Industries

 

298391

 

5/1/2004 0:00

 

31203

 

ACC & PREP RENT

 

18,787.43

 

 

 

American Standard Industries

 

298391

 

5/1/2004 0:00

 

31203

 

ACC & PREP RENT

 

18,750.56

 

 

 

American Standard Industries

 

298391

 

5/1/2004 0:00

 

31203

 

RENTS

 

10,545.00

 

 

 

American Standard Industries

 

298393

 

5/1/2004 0:00

 

31203

 

RENTS

 

5,437.20

 

 

 

American Standard Industries

 

 

 

 

 

31203

 

 

 

75,649.59

 

 

 

Bison Air Corporation

 

298402

 

5/1/2004 0:00

 

34942

 

ACC & PREP RENT

 

68,558.00

 

 

 

Bison Air Corporation

 

298402

 

5/1/2004 0:00

 

34942

 

TAX ON ACC/PRPD

 

 

 

1,513.76

 

Bison Air Corporation

 

298402

 

5/1/2004 0:00

 

34942

 

ACC & PREP RENT

 

6,279.50

 

 

 

Bison Air Corporation

 

298402

 

5/1/2004 0:00

 

34942

 

TAX ON ACC/PRPD

 

 

 

138.65

 

Bison Air Corporation

 

298403

 

5/1/2004 0:00

 

34942

 

ACC & PREP RENT

 

8,305.74

 

 

 

Bison Air Corporation

 

298403

 

5/1/2004 0:00

 

34942

 

TAX ON ACC/PRPD

 

 

 

183.39

 

Bison Air Corporation

 

 

 

 

 

34942

 

 

 

83,143.24

 

1,835.80

 

Boeing Company

 

298579

 

5/30/2004 0:00

 

38060

 

ACC & PREP RENT

 

166,808.70

 

 

 

Boeing Company

 

298579

 

5/30/2004 0:00

 

38060

 

TAX ON ACC/PRPD

 

 

 

15,464.83

 

Boeing Company

 

298579

 

5/30/2004 0:00

 

38060

 

ACC & PREP RENT

 

46,038.36

 

 

 

Boeing Company

 

298579

 

5/30/2004 0:00

 

38060

 

TAX ON ACC/PRPD

 

 

 

4,268.21

 

Boeing Company

 

 

 

 

 

38060

 

 

 

212,847.06

 

19,733.04

 

Boeing Company

 

298404

 

5/1/2004 0:00

 

38360

 

ACC & PREP RENT

 

44,815.36

 

 

 

Boeing Company

 

298404

 

5/1/2004 0:00

 

38360

 

TAX ON ACC/PRPD

 

 

 

4,154.83

 

Boeing Company

 

298580

 

5/31/2004 0:00

 

38360

 

ACC & PREP RENT

 

162,532.18

 

 

 

Boeing Company

 

298580

 

5/31/2004 0:00

 

38360

 

TAX ON ACC/PRPD

 

 

 

15,068.36

 

Boeing Company

 

 

 

 

 

38360

 

 

 

207,347.54

 

19,223.19

 

Camrose Pipe Corporation

 

298407

 

5/1/2004 0:00

 

43143

 

ACC & PREP RENT

 

82,197.50

 

 

 

Camrose Pipe Corporation

 

 

 

 

 

43143

 

 

 

82,197.50

 

 

 

Ceridian Inc

 

298409

 

5/1/2004 0:00

 

34485

 

ACC & PREP RENT

 

88,689.00

 

 

 

Ceridian Inc

 

298409

 

5/1/2004 0:00

 

34485

 

TAX ON ACC/PRPD

 

 

 

5,764.79

 

Ceridian Inc

 

 

 

 

 

34485

 

 

 

88,689.00

 

5,764.79

 

Chiquita Processed Foods

 

298585

 

5/16/2004 0:00

 

34141

 

RENTS

 

2,059.40

 

 

 

Chiquita Processed Foods

 

 

 

 

 

34141

 

 

 

2,059.40

 

 

 

Creative Golf Management

 

298413

 

5/1/2004 0:00

 

37893

 

ACC & PREP RENT

 

6,226.93

 

 

 

Creative Golf Management

 

 

 

 

 

37893

 

 

 

6,226.93

 

 

 

Del Monte Foods Corp

 

298417

 

5/7/2004 0:00

 

34096

 

ACC & PREP RENT

 

7,748.00

 

 

 

Del Monte Foods Corp

 

298417

 

5/7/2004 0:00

 

34096

 

ACC & PREP RENT

 

6,990.90

 

 

 

Del Monte Foods Corp

 

298597

 

5/18/2004 0:00

 

34096

 

ACC & PREP RENT

 

2,504.98

 

 

 

Del Monte Foods Corp

 

298600

 

5/25/2004 0:00

 

34096

 

RENTS

 

1,474.74

 

 

 

Del Monte Foods Corp

 

298602

 

5/29/2004 0:00

 

34096

 

RENTS

 

1,492.04

 

 

 

Del Monte Foods Corp

 

 

 

 

 

34096

 

 

 

20,210.66

 

 

 

Delta airlines

 

298419

 

5/1/2004 0:00

 

43408

 

ACC & PREP RENT

 

166.17

 

 

 

Delta airlines

 

 

 

 

 

43408

 

 

 

166.17

 

 

 

Equistar Chemicals

 

298628

 

5/16/2004 0:00

 

42610

 

ACC & PREP RENT

 

181,848.24

 

 

 

Equistar Chemicals

 

298628

 

5/16/2004 0:00

 

42610

 

ACC & PREP RENT

 

210,610.28

 

 

 

Equistar Chemicals

 

 

 

 

 

42610

 

 

 

392,458.52

 

 

 

Gaylord Container

 

298634

 

5/20/2004 0:00

 

33918

 

RENTAL TAX

 

 

 

288.24

 

Gaylord Container

 

298634

 

5/20/2004 0:00

 

33918

 

RENTS

 

3,145.74

 

 

 

Gaylord Container

 

298634

 

5/20/2004 0:00

 

33918

 

RENTAL TAX

 

 

 

61.25

 

Gaylord Container

 

298634

 

5/20/2004 0:00

 

33918

 

RENTS

 

668.48

 

 

 

Gaylord Container

 

 

 

 

 

33918

 

 

 

3,814.22

 

349.49

 

Hayes Lemmerz Int’l

 

298645

 

5/31/2004 0:00

 

34007

 

RENTS

 

102,301.05

 

 

 

 

--------------------------------------------------------------------------------

 

MAY 2004 PAYMENTS
RECEIVED IN APRIL

 

 

 

PREPAYMENTS
3.2 (g)(i)

 

 

 

 

 

RENT PREPAYMENTS
REFLECTED IN NAV

 

SALES TAX/OTHER
BAL.SHEET ITEMS

 

Customer

 

Invoice Nbr

 

Due Date

 

Lease

 

Fee Code Desc

 

Amount Applied

 

Amount Applied

 

Hayes Lemmerz Int’l

 

 

 

 

 

34007

 

 

 

102,301.05

 

 

 

Haynes International

 

298456

 

5/1/2004 0:00

 

35593

 

PRINCIPAL

 

10,649.62

 

 

 

Haynes International

 

298456

 

5/1/2004 0:00

 

35593

 

INTEREST

 

1,186.03

 

 

 

Haynes International

 

 

 

 

 

35593

 

 

 

11,835.65

 

 

 

Lehigh Press, Inc

 

298465

 

5/1/2004 0:00

 

34563

 

RENTS

 

32,665.20

 

 

 

Lehigh Press, Inc

 

 

 

 

 

34563

 

 

 

32,665.20

 

 

 

Lucent Technologies

 

298467

 

5/1/2004 0:00

 

39673

 

ACC & PREP RENT

 

690,569.23

 

 

 

Lucent Technologies

 

 

 

 

 

39673

 

 

 

690,569.23

 

 

 

Lucent Technologies

 

298468

 

5/1/2004 0:00

 

39684

 

ACC & PREP RENT

 

718,460.61

 

 

 

Lucent Technologies

 

 

 

 

 

39684

 

 

 

718,460.61

 

 

 

Luke David, LLC

 

298469

 

5/1/2004 0:00

 

37660

 

ACC & PREP RENT

 

8,107.50

 

 

 

Luke David, LLC

 

 

 

 

 

37660

 

 

 

8,107.50

 

 

 

Perry Judd’s Inc

 

298667

 

5/16/2004 0:00

 

40263

 

RENTS

 

117,681.56

 

 

 

Perry Judd’s Inc

 

 

 

 

 

40263

 

 

 

117,681.56

 

 

 

Revere Copper Production

 

298493

 

5/1/2004 0:00

 

32820

 

RENTS

 

4,471.30

 

 

 

Revere Copper Production

 

 

 

 

 

32820

 

 

 

4,471.30

 

 

 

Russell Stanley

 

298675

 

5/15/2004 0:00

 

33841

 

RENTS

 

1,023.25

 

 

 

Russell Stanley

 

 

 

 

 

33841

 

 

 

1,023.25

 

 

 

Servicios Integrales Aviacion

 

298502

 

5/23/2004 0:00

 

42654

 

LEGAL EXPENSES

 

 

 

45,742.03

 

Servicios Integrales Aviacion

 

 

 

 

 

42654

 

 

 

 

 

45,742.03

 

Star Leasing Corp

 

298677

 

5/30/2004 0:00

 

32384

 

RENTS

 

2,423.72

 

 

 

Star Leasing Corp

 

298677

 

5/30/2004 0:00

 

32384

 

RENTS

 

8,458.28

 

 

 

Star Leasing Corp

 

298677

 

5/30/2004 0:00

 

32384

 

RENTS

 

1,814.92

 

 

 

Star Leasing Corp

 

298677

 

5/30/2004 0:00

 

32384

 

PRINCIPAL

 

9,397.98

 

 

 

Star Leasing Corp

 

298677

 

5/30/2004 0:00

 

32384

 

INTEREST

 

8,375.76

 

 

 

Star Leasing Corp

 

 

 

 

 

32384

 

 

 

30,470.66

 

 

 

Stone Container Corp

 

298514

 

5/10/2004 0:00

 

30213

 

TX-ACC/PPD EXTN

 

 

 

28.89

 

Stone Container Corp

 

298514

 

5/10/2004 0:00

 

30213

 

EXT RENT-O/L

 

963.00

 

 

 

Stone Container Corp

 

 

 

 

 

30213

 

 

 

963.00

 

28.89

 

Stone Container Corp

 

298516

 

5/1/2004 0:00

 

30791

 

ACC & PREP RENT

 

930.62

 

 

 

Stone Container Corp

 

298516

 

5/1/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

67.47

 

Stone Container Corp

 

298538

 

5/1/2004 0:00

 

30791

 

ACC & PREP RENT

 

778.94

 

 

 

Stone Container Corp

 

298538

 

5/1/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

60.37

 

Stone Container Corp

 

298539

 

5/1/2004 0:00

 

30791

 

ACC & PREP RENT

 

519.29

 

 

 

Stone Container Corp

 

298539

 

5/1/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

42.84

 

Stone Container Corp

 

298531

 

5/1/2004 0:00

 

30791

 

ACC & PREP RENT

 

65,589.41

 

 

 

Stone Container Corp

 

298536

 

5/3/2004 0:00

 

30791

 

RENTAL TAX

 

 

 

188.12

 

Stone Container Corp

 

298536

 

5/3/2004 0:00

 

30791

 

RENTS

 

2,850.37

 

 

 

Stone Container Corp

 

298537

 

5/3/2004 0:00

 

30791

 

ACC & PREP RENT

 

1,078.09

 

 

 

Stone Container Corp

 

298537

 

5/3/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

78.17

 

Stone Container Corp

 

298537

 

5/3/2004 0:00

 

30791

 

ACC & PREP RENT

 

1,942.31

 

 

 

Stone Container Corp

 

298537

 

5/3/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

140.82

 

Stone Container Corp

 

298527

 

5/3/2004 0:00

 

30791

 

ACC & PREP RENT

 

1,190.68

 

 

 

Stone Container Corp

 

298527

 

5/3/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

107.16

 

Stone Container Corp

 

298526

 

5/3/2004 0:00

 

30791

 

ACC & PREP RENT

 

2,816.16

 

 

 

Stone Container Corp

 

298695

 

5/4/2004 0:00

 

30791

 

ACC & PREP RENT

 

5,604.00

 

 

 

Stone Container Corp

 

298695

 

5/4/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

406.29

 

Stone Container Corp

 

298523

 

5/5/2004 0:00

 

30791

 

TX-ACC/PPD EXTN

 

 

 

81.80

 

Stone Container Corp

 

298523

 

5/5/2004 0:00

 

30791

 

EXT RENT-O/L

 

884.22

 

 

 

Stone Container Corp

 

298520

 

5/6/2004 0:00

 

30791

 

ACC & PREP RENT

 

2,391.29

 

 

 

Stone Container Corp

 

298517

 

5/12/2004 0:00

 

30791

 

EXT RENT-O/L

 

1,596.90

 

 

 

Stone Container Corp

 

298517

 

5/12/2004 0:00

 

30791

 

EXT RENT-O/L

 

678.76

 

 

 

Stone Container Corp

 

298522

 

5/12/2004 0:00

 

30791

 

ACC & PREP RENT

 

596.00

 

 

 

Stone Container Corp

 

298522

 

5/12/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

55.13

 

Stone Container Corp

 

298534

 

5/12/2004 0:00

 

30791

 

ACC & PREP RENT

 

998.09

 

 

 

Stone Container Corp

 

298521

 

5/12/2004 0:00

 

30791

 

ACC & PREP RENT

 

149.00

 

 

 

Stone Container Corp

 

298521

 

5/12/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

12.30

 

Stone Container Corp

 

298530

 

5/14/2004 0:00

 

30791

 

RENTS

 

11,430.24

 

 

 

Stone Container Corp

 

298707

 

5/19/2004 0:00

 

30791

 

RENTS

 

4,076.34

 

 

 

 

--------------------------------------------------------------------------------

 

MAY 2004 PAYMENTS
RECEIVED IN APRIL

 

 

 

PREPAYMENTS
3.2 (g)(i)

 

 

 

 

 

RENT PREPAYMENTS
REFLECTED IN NAV

 

SALES TAX/OTHER
BAL.SHEET ITEMS

 

Customer

 

Invoice Nbr

 

Due Date

 

Lease

 

Fee Code Desc

 

Amount Applied

 

Amount Applied

 

Stone Container Corp

 

298702

 

5/22/2004 0:00

 

30791

 

ACC & PREP RENT

 

5,586.00

 

 

 

Stone Container Corp

 

298702

 

5/22/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

223.44

 

Stone Container Corp

 

298693

 

5/22/2004 0:00

 

30791

 

ACC & PREP RENT

 

668.00

 

 

 

Stone Container Corp

 

298693

 

5/22/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

46.76

 

Stone Container Corp

 

298689

 

5/22/2004 0:00

 

30791

 

ACC & PREP RENT

 

1,336.00

 

 

 

Stone Container Corp

 

298689

 

5/22/2004 0:00

 

30791

 

TAX ON ACC/PRPD

 

 

 

110.22

 

Stone Container Corp

 

298699

 

5/28/2004 0:00

 

30791

 

RENTS

 

74,953.39

 

 

 

Stone Container Corp

 

298705

 

5/30/2004 0:00

 

30791

 

TX-ACC/PPD EXTN

 

 

 

195.17

 

Stone Container Corp

 

298705

 

5/30/2004 0:00

 

30791

 

EXT RENT-O/L

 

2,409.40

 

 

 

Stone Container Corp

 

 

 

 

 

30791

 

 

 

191,053.50

 

1,816.06

 

US Steel Corporation

 

298552

 

5/1/2004 0:00

 

35204

 

ACC & PREP RENT

 

3,033.95

 

 

 

US Steel Corporation

 

298552

 

5/1/2004 0:00

 

35204

 

ACC & PREP RENT

 

4,204.26

 

 

 

US Steel Corporation

 

298552

 

5/1/2004 0:00

 

35204

 

ACC & PREP RENT

 

3,737.74

 

 

 

US Steel Corporation

 

298552

 

5/1/2004 0:00

 

35204

 

ACC & PREP RENT

 

9,501.25

 

 

 

US Steel Corporation

 

 

 

 

 

35204

 

 

 

20,477.20

 

 

 

Wings Venture Ltd

 

298796

 

5/22/2004 0:00

 

35859

 

ACC & PREP RENT

 

73,400.00

 

 

 

Wings Venture Ltd

 

298797

 

5/22/2004 0:00

 

35859

 

ACC & PREP RENT

 

3,520.00

 

 

 

Wings Venture Ltd

 

298798

 

5/22/2004 0:00

 

35859

 

ACC & PREP RENT

 

7,660.00

 

 

 

Wings Venture Ltd

 

298799

 

5/22/2004 0:00

 

35859

 

RENTS

 

15,420.00

 

 

 

Wings Venture Ltd

 

 

 

 

 

35859

 

 

 

100,000.00

 

 

 

Xerox Corporation

 

298563

 

5/1/2004 0:00

 

39584

 

ACC & PREP RENT

 

133,202.60

 

 

 

Xerox Corporation

 

 

 

 

 

39584

 

 

 

133,202.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grand Total

 

 

 

3,338,092.14

 

94,493.29

 

 

--------------------------------------------------------------------------------

 

Schedule 3.2(g)(ii)

 

Advance Rents, Other Payments and Deposits

 

 

See attached.

 

--------------------------------------------------------------------------------

 

Schedule 3.2(g)(ii)

Security Deposits, Maintenance Reserves and Other Liabilities

 

Advance Rents – None

 

Security Deposits

 

Customer Name

 

Amount

 

Description/Comment

 

New York connection

 

Aeroservicio Dinamicos

 

2,291,707.57

 

 

 

Lease Agreement governed by NY law

 

Aero Toy Store

 

2,000,000.00

 

 

 

 

 

Gaylord Containers

 

1,500,567.94

 

 

 

 

 

Global Aviation

 

60,000.00

 

 

 

 

 

Helimed

 

300,000.00

 

 

 

Lease Agreement governed by NY Law

 

Jefferson Smurfit

 

350,000.00

 

 

 

 

 

Maritime Shipping

 

362,191.48

 

 

 

Loan Agreement governed by NY law

 

McCullough, Michael

 

60,500.00

 

 

 

Lease Agreement governed by NY law

 

Shafer, Harold

 

188,000.00

 

In connection with Joda restructure

 

 

 

Servicio Integral (SIASA)

 

160,000.00

 

 

 

 

 

Wings Venture

 

600,334.00

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Security Deposits

 

7,873,300.99

 

 

 

 

 

 

Maintenance Reserves

 

Customer Name

 

Amount

 

Description/Comment

 

 

 

Heinz, HJ

 

778,914.56

 

 

 

 

 

 

Other Liabilities

 

Description

 

Amount

 

Description/Comment

 

 

Fancia Payable

 

89,670.00

 

Broker fee payable.  Paid each quarter from rentals

 

 

Estimated Property Taxes Payable

 

88,422.00

 

Amt Col from Customers for Estimated Taxes

 

 

Jamaica Insurance Payable

 

78,867.89

 

 

 

 

Accrued Sales Tax Payable

 

177,192.64

 

 

 

 

Sales Tax Payable

 

1,659.81

 

 

 

 

 

 

 

 

 

 

 

Total Other Liabilities

 

435,812.34

 

 

 

 

 

--------------------------------------------------------------------------------

*Taxes subject to Section 1.5 are governed thereby.  See Section 1.6(j)

 

--------------------------------------------------------------------------------

 

Schedule 3.2(g)(v)

 

Exceptions to Insurance Portfolio Property Coverage

 

Customer

 

Lease / Loan No.

 

System

 

Status

Aeroservicos Dinamicos, S.A.

 

01-34185

 

CLAS

 

Customer has informed BCC that their broker is processing the new certificate
and that it will be received shortly.

Weirton Steel Corporation

 

03-31484

 

CLAS

 

Weirton has been acquired by ISG and ISG has not issued insurance certificates
at this point.

Coleman Cable

 

10030-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

Dayco Products

 

10035-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

The Doe Run Resources Corp.

 

10038-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

Formica Corporation

 

10040-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

Gemini Industries, Inc.

 

10043-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

Synthetic Ind. (SI Corp.)

 

10087-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

Travel Centers of America

 

10092-1-1

 

NOVA Term Loan

 

No current insurance certificate on file.  Agent Bank is responsible for
providing all loan participants with insurance covearge.

 

--------------------------------------------------------------------------------

 

Schedule 3.2 (h)

 

ACCOUNTS WITH ATTORNEYS

 

3/29/2004

 

Account

 

$ Outstanding

 

Date Filed

 

Type

 

Attorney

 

Tele #

 

Comments

 

BANKRUPTCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Adelphia

 

$

4,322

 

6/21/2002

 

Ch 11

 

Jeff Fine/Hughes&Luce

 

214 939-5567

 

On Going

 

Allied Products

 

—

 

 

 

 

 

Alex Terras/Piper Rudnick

 

312 368-4046

 

Small Unsecured Claim remains

 

Baldwins Leasing

 

—

 

8/26/2002

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Unsecured claim remains

 

Bethlehem Steel

 

$

15,530

 

10/15/2001

 

Ch 11

 

Tom Quirk/Lathem & Watkins

 

312 876-6550

 

Lease assumed by ISG

 

Dan River Inc

 

$

8,284

 

3/31/2004

 

Ch 11

 

 

 

 

 

Rejecting All BCC Leases

 

Formica

 

$

10,060

 

3/5/2002

 

Ch 11

 

Term B Paricipation

 

 

 

Restructure Approved by Ct.

 

Furr’s

 

—

 

 

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Clean Up Work

 

Galvpro

 

—

 

8/10/2001

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Small Unsecured Claim remains

 

Glenoit

 

$

3,139

 

Aug-00

 

Ch 11

 

Kramer Levin

 

212 715-7651

 

Restructured Secured Creditors Own Co.

 

Golden Gem

 

$

474

 

 

 

?

 

Alex Terras

 

312 368-4046

 

Small portion of DIP in process of collection

 

The Grand Union

 

—

 

 

 

Ch 11

 

Cory Freidman

 

212 879-9751

 

Closed

 

Great Northern

 

$

10,283

 

1/9/2003

 

Ch 11

 

Alex Terras

 

312 368-4046

 

DIP loan in process of collection

 

Hawaiian Airlines

 

$

2,435

 

 

 

 

 

AFS

 

 

 

Anticipated lease assumption

 

Hayes Lemmerz

 

$

11,320

 

12/5/2001

 

Ch 11

 

Cory Friedman

 

212 879-9751

 

Lease Restructured and assumed

 

Haynes International

 

$

1,411

 

3/29/2004

 

Ch 11

 

 

 

 

 

Eq. Critical

 

Johnston Industries

 

$

516

 

1/31/2003

 

Ch 11

 

Alex Terras/Jason Kaplan

 

312-368-3437

 

Restructured through 363 Sale / Adm Claim Remains

 

Kevco, Inc.

 

$

119

 

2/5/2001

 

Ch 11

 

n/a

 

 

 

Closed

 

LTV Steel

 

—

 

12/29/2000

 

Ch 11

 

n/a

 

 

 

Closed

 

Morton Custom Plastics

 

—

 

11/1/2002

 

Ch 11

 

Alex Terras

 

312 368-4046

 

Paid in Full

 

Mulberry Phosphates

 

—

 

 

 

Ch 7

 

Roger Schwenke

 

813 223-7000

 

Charge Off / No Further collection potential

 

National Steel

 

—

 

3/6/2002

 

Ch 11

 

Tod Burgess

 

602 229-5169

 

Defend Preference Claim

 

Progressive Dairies

 

—

 

11/13/2000

 

Ch 7

 

Paul Ratelle

 

612 338-0115

 

Closed Received Last distribtion from Trustee 2/12/04

 

Sheldahl, Inc.

 

—

 

5/1/2002

 

Ch 11

 

Jeff Grell

 

612 335-1929

 

Small Unsecured Claim remains

 

Stoody

 

$

214

 

11/19/2001

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Paying per term

 

Trism

 

—

 

 

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Paying per term

 

Tyler Jet

 

—

 

2/27/2002

 

Ch 11

 

Jeff Fine

 

214 939-5567

 

Converted from Involuntary to Ch 12 / Little likelyhood of further recovery

 

Valley Media

 

—

 

 

 

Ch 11

 

Marshall Goldberg/Glass & Goldberg

 

818 715-7000

 

Small Unsecured Claim remains / Defend Preference Claim

 

Weirton Steel

 

$

1,474

 

5/19/2003

 

Ch 11

 

Alex Terras

 

312 368-4046

 

On Going

 

Welded Tube

 

—

 

12/29/2000

 

Ch 11

 

Tom Quirk

 

312 876-6550

 

Closed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER LITIGATION / LEGAL MATTERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tony Davis/Baker Botts

 

713 229-1547

 

Restructured, Collateral Releases Ongoing

 

Coastal Towing

 

$

9,049

 

 

 

 

 

David Heller

 

312 876-7670

 

Completed

 

Columbus Coatings

 

—

 

 

 

 

 

Alex Terras

 

312 368-4046

 

Suit filed against BCC

 

D. Heavrin vs BCC

 

n/a

 

 

 

 

 

David Singer/Piper Rudnic

 

312 368-3497

 

Completed

 

Gateway Container

 

$

22,412

 

 

 

 

 

Karen Patrick/BCC

 

541 929-9370

 

Restrructure

 

Grays Harbor Paper

 

$

5,999

 

 

 

 

 

 

 

 

 

 

 

JODA (2 a/c)

 

$

12,213

 

 

 

Workouts

 

Gregory Grossman

 

305-372-8282

 

Hop a Jet and Jackson Restructures

 

Mainko LLC
(1 a/c)

 

 

 

 

 

Workouts

 

Richard Jefferies

 

402-346-6000

 

Potential Suit under personal guaranty/Sale of a/c

 

L-S Electro

 

$

13,218

 

 

 

 

 

David Heller

 

312 876-7670

 

Completed

 

Northwesten Aircraft

 

—

 

 

 

Gty Suit

 

Justine Suhr/Piper Rudnic

 

310 595-3017

 

Completed - Filed No Asset Bkrptcy

 

Policyd / Cydsa

 

$

33,046

 

 

 

 

 

Jeff Smith / Daniel Kuri

 

860-240-2759/52-55-5294-5930

 

Workout issues

 

Radiant Aviation Ser

 

$

4,322

 

 

 

 

 

Karen Patrick/BCC

 

541 250-7422

 

Restructure & Settlement

 

Sky King

 

$

10,666

 

 

 

 

 

Alex Terras

 

312 368-4046

 

Completed

 

Southern Bulk et al

 

$

12,356

 

 

 

 

 

Brian Cohen, PiperRud & Kevin Snyder/Parker, Hudson

 

312 368-8865&404 420-5557

 

Forbearance

 

Uniminas

 

—

 

 

 

 

 

Rita Godoy

 

55 11 3291-1155

 

Completed

 

 

--------------------------------------------------------------------------------

 

Schedule 3.2(i)

 

Undelivered Specified Financing and Leasing Assets; Undelivered Portfolio
Property

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 3.2(j)

Obligor Bankruptcy

 

BANKRUPTCIES

 

Account

 

$ Outstanding

 

Date Filed

 

Type

 

Comments

 

 

 

 

 

 

 

 

 

 

 

Adelphia

 

$

3,896

 

6/21/2002

 

Ch 11

 

On Going

 

Allied Products

 

—

 

 

 

 

 

Small Unsecured Claim remains

 

Baldwins Leasing

 

—

 

8/26/2002

 

Ch 11

 

Unsecured claim remains

 

Bethlehem Steel

 

$

15,009

 

10/15/2001

 

Ch 11

 

Lease assumed by ISG

 

Dan River Inc

 

$

8,228

 

3/31/2004

 

Ch 11

 

Rejecting All BCC Leases

 

Federal Mogul

 

$

20,592

 

 

 

Ch 11

 

Paying per agreed to reduction, but have not signed doc

 

Formica

 

$

10,095

 

3/5/2002

 

Ch 11

 

Restructure Approved by Ct.

 

Furr’s

 

—

 

 

 

Ch 11

 

Clean Up Work

 

Galvpro

 

—

 

8/10/2001

 

Ch 11

 

Small Unsecured Claim remains

 

Glenoit

 

$

2,987

 

Aug-00

 

Ch 11

 

Restructured Secured Creditors Own Co.

 

Golden Gem

 

$

504

 

 

 

?

 

Small portion of DIP in process of collection

 

The Grand Union

 

—

 

 

 

Ch 11

 

Closed

 

Great Northern

 

$

9,597

 

5/1/2003

 

Ch 7

 

DIP loan in process of collection

 

Hawaiian Airlines

 

$

2,435

 

 

 

 

 

Anticipated lease assumption

 

Hayes Lemmerz

 

$

11,333

 

12/5/2001

 

Ch 11

 

Lease Restructured and assumed

 

Haynes International

 

$

1,316

 

3/29/2004

 

Ch 11

 

Eq. Critical

 

Johnston Industries

 

$

107

 

1/31/2003

 

Ch 11

 

Restructured through 363 Sale / Adm Claim Remains

 

Kevco, Inc.

 

—

 

2/5/2001

 

Ch 11

 

Closed

 

LTV Steel

 

—

 

12/29/2000

 

Ch 11

 

Closed

 

Morton Custom Plastics

 

—

 

11/1/2002

 

Ch 11

 

Paid in Full

 

Mulberry Phosphates

 

—

 

 

 

Ch 7

 

Charge Off / No Further collection potential

 

National Steel

 

—

 

3/6/2002

 

Ch 11

 

Defend Preference Claim

 

Progressive Dairies

 

—

 

11/13/2000

 

Ch 7

 

Closed Received Last distribtion from Trustee 2/12/04

 

Sheldahl, Inc.

 

—

 

5/1/2002

 

Ch 11

 

Small Unsecured Claim remains

 

Stoody

 

$

190

 

11/19/2001

 

Ch 11

 

Paying per term

 

Trism

 

—

 

 

 

Ch 11

 

Paying per term

 

Tyler Jet

 

—

 

2/27/2002

 

Ch 11

 

$2,466,808 Unsecured Claim

 

Valley Media

 

—

 

 

 

Ch 11

 

Small Unsecured Claim remains / Defend Preference Claim

 

Weirton Steel

 

$

1,436

 

5/19/2003

 

Ch 11

 

On Going

 

Welded Tube

 

—

 

12/29/2000

 

Ch 11

 

Closed

 

 

--------------------------------------------------------------------------------

 

Schedule 3.2(l)

 

On-Lease Equipment Casualty

 

Repossessed equipment is listed on Schedule 1.1(a)(i)

 

The only Specified Portfolio Property known to have been damaged and not fully
repaired is the vessel Asphalt Victory which secures a loan to Sargeant Marine,
Inc.  Reportedly the repair work has been completed.  The insurance company has
released progress payments.  The final payment is being negotiated at this point
and should be released shortly.

 

--------------------------------------------------------------------------------

 

Schedule 3.2(o)

Non-Direct Payments

 

Non-Direct Payments

 

None

 

Third Party Ageements

 

Name

 

 

 

Customer Name

 

Document Type Name

 

Category

 

 

 

 

 

 

 

 

 

cco.trag.0601.0039337.001

 

 

 

Access Leasing Corp.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.clob.1001.0039482.001.b

 

 

 

Aeroservicios Corp.,SA de CV(aka Gard)

 

Engine Maintenance Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.subk.0998.0035260

 

 

 

American Railcar Industries, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.part.0395.0031203.a

 

 

 

American Standard, Inc.

 

Partnership Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.06020.0035704.001

 

 

 

Anthony Crane Rental, L.P.

 

Intercreditor Agreement

 

Primary

cco.intr.0798.0035704.001

 

 

 

Anthony Crane Rental, L.P.

 

Intercreditor Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.subk.0603.0042512.001

 

 

 

Astilleros Bender S. de R.L.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.ema.0700.0037304.001

 

 

 

Atoll Holdings, Ltd.

 

Equipment Maintenance agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.1101.rmkt.0039728

 

 

 

Baldwins Leasing, L.P.

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.ema.0301.0038282.001

 

 

 

Bellevue Jet Partners, L.L.C.

 

Equipment Maintenance agreement

 

IER

 

 

 

 

 

 

 

 

 

cco.pa.0900.0037515.001

 

 

 

Bethlehem Steel Corp.

 

Participation agreement

 

Primary

cco.trag.0499.0037515.001

 

 

 

Bethlehem Steel Corp.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.pa.1201.0040296.001

 

 

 

Bonham C-P-D-J-E

 

Participation Agreement

 

Primary

cco.rmkt.0900.0040296.001

 

 

 

Bonham C-P-D-J-E

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.clob.1102.10112.1.1

 

 

 

Braspetro Oil Services, Co.

 

Trust Agreement

 

Ancillary

cco.pa.0799.0035659

 

 

 

Braspetro Oil Services, Co.

 

Participation agreement

 

Primary

cco.pa.0799.0035659

 

 

 

Braspetro Oil Services, Co.

 

Participation agreement

 

Primary

cco pa.1102.10112.1.1

 

 

 

Braspetro Oil Services, Co.

 

Participation agreement

 

Primary

cco.pa.0703.10112.1.1

 

 

 

Braspetro Oil Services, Co.

 

Participation agreement

 

Primary

cco.trag.0799.0035659

 

 

 

Braspetro Oil Services, Co.

 

Trust Agreement

 

Primary

cco.trag.1102.10112.1.1. P15

 

 

 

Braspetro Oil Services, Co.

 

Trust Agreement

 

Primary

cco.trag.1102.10112.1.1.P32

 

 

 

Braspetro Oil Services, Co.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.lica.1294.0032678.001

 

 

 

CAE USA, Inc (fka Reflectone Training)

 

License Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.loca.0903.0043143.001

 

 

 

Camrose Pipe Corporation

 

Letter of Credit Agreement

 

Primary

cco.lica.0903.0043143.001

 

 

 

Camrose Pipe Corporation

 

License Agreement

 

Primary

cco.fdlo.0303.0043143.001

 

 

 

Camrose Pipe Corporation

 

Formation documents (lessor)

 

Ancillary

 

--------------------------------------------------------------------------------

 

Name

 

 

 

Customer Name

 

Document Type Name

 

Category

cco.esta.0902.0033963-101.102

 

10029-103.104.105.106

 

Coastal Towing, Inc.

 

Escrow Trust Agreement

 

Ancillary

cco.intr.1002.0033963-101.102

 

10029-103.104.105.106.b

 

Coastal Towing, Inc.

 

Intercreditor Agreement

 

Primary

cco.intr.1002.0033963-101.102

 

10029-103.104.105.106.a

 

Coastal Towing, Inc.

 

Intercreditor Agreement

 

Primary

cco.subk.1002.0033963-101.102

 

10029-103.104.105.106

 

Coastal Towing, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.subk.0493.0032631

 

 

 

Container Applications International, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.1200.0037893.001

 

 

 

Creative Golf Management, Inc.

 

Participation agreement

 

Primary

cco.rmkt.0900.0037893.001

 

 

 

Creative Golf Management, Inc.

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.pa.0901.0040241.001

 

 

 

DeSoto Jordan

 

Participation agreement

 

Primary

cco.rmkt.0900.0040241.001

 

 

 

DeSoto Jordan

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.ema.0401.0032079.004

 

 

 

Federal-Mogul Corp.

 

Equipment Maintenance agreement

 

IER

 

 

 

 

 

 

 

 

 

cco.pa.1200.0037971.001

 

 

 

Front Porch Development Corp.

 

Participation agreement

 

Primary

cco.rmkt.0900.0037971.001

 

 

 

Front Porch Development Corp.

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.esta.1099.0035771.001

 

 

 

Fulghum Fibres, Inc.(W.Monroe Fibre Proc. Co.)

 

Escrow Trust Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.intr.0301.0035326

 

 

 

Gateway Container International, Ltd

 

Intercreditor Agreement

 

Primary

cco.intr.1203.0035326

 

 

 

Gateway Container International, Ltd

 

Intercreditor Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.1002.0035559.101

 

 

 

Glenoit LLC

 

Intercreditor Agreement

 

Primary

cco.pa.1002.0035559.101

 

 

 

Glenoit LLC

 

Participation agreement

 

Primary

cco.subk.1002.0035559.101

 

 

 

Glenoit LLC

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.intr.0998.0035182.001

 

 

 

Grays Harbor Paper, L.P.

 

Intercreditor Agreement

 

Primary

cco.subk.0998.0035182.001.a

 

 

 

Grays Harbor Paper, L.P.

 

Subordination agreement

 

Ancillary

cco.subk.0998.0035182.001

 

 

 

Grays Harbor Paper, L.P.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.0702.0034074.013

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

cco.pa.0797.0034074.003

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

cco.pa.1199.0034074.012

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

cco.pa.1298.0034074

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

cco.pa.1296.0034074

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

cco.pa.0297.0034074.002

 

 

 

Great Lakes Dredge & Dock Company

 

Participation agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.0302.0040707.001

 

 

 

Great Northern Paper, Inc.

 

Intercreditor Agreement

 

Primary

cco.subk.0302.0040707.001

 

 

 

Great Northern Paper, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.trag.1291.0040918

 

 

 

H.J. Heinz Co.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.esta.1003.0043553.001

 

 

 

Helimed Aero Taxi Ltda.

 

Escrow Trust Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.agam.1299.0035872.001

 

 

 

International Truck and Engine

 

Agency Agreement

 

Primary

cco.intr.1203.0041018.001

 

 

 

International Truck and Engine

 

Intercreditor Agreement

 

Primary

 

--------------------------------------------------------------------------------

 

Name

 

 

 

Customer Name

 

Document Type Name

 

Category

cco.pa.0301.0038304

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.0602.0041018.001

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.0602.0041030.001

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.0802.0041030.001.a

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.0802.0041030.001

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.0602.0041029.001

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.pa.1299.0035872.001

 

 

 

International Truck and Engine

 

Participation agreement

 

Primary

cco.fdlo.0502.0041018.001

 

 

 

International Truck and Engine

 

Formation documents (lessor)

 

Ancillary

cco.fdlo.0502.0041029.001

 

 

 

International Truck and Engine

 

Formation documents (lessor)

 

Ancillary

cco.fdlr.0598.0041030.001

 

 

 

International Truck and Engine

 

Formation documents (lender)

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.fdlr.0503.110115.101

 

 

 

ISG Columbus Coatings Inc.

 

Formation documents (lender)

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.clob.1296.0034018..001.e

 

 

 

Jamaica Energy Partners

 

Power Purchase Agreement

 

Ancillary

cco.clob.1296.0034018.001.a

 

 

 

Jamaica Energy Partners

 

Investment Agreement

 

Ancillary

cco.clob.1296.0034018.001.b

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.subk.0897.0034018.001

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.subk.1296.0034018.001.a

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.subk.1296.0034018.001.b

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.subk.1296.0034018.001

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.subk.1296.0034018.001c

 

 

 

Jamaica Energy Partners

 

Subordination agreement

 

Ancillary

cco.trag.1296.0034018.001

 

 

 

Jamaica Energy Partners

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.subk.0902.0041218.001

 

 

 

Kasgro

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.0201.0039494.001.a

 

 

 

Lider Taxi Aereo, S.A.

 

Purchase Agreement

 

IER

cco.pa.0201.0039494.001.b

 

 

 

Lider Taxi Aereo, S.A.

 

Purchase Agreement

 

IER

cco.pa.0201.0039494.001.c

 

 

 

Lider Taxi Aereo, S.A.

 

Purchase Agreement

 

IER

 

 

 

 

 

 

 

 

 

cco.trag.1201.0040252

 

 

 

Lowa Corp.

 

Trust Agreement

 

Primary

cco.trag.0902.0040252.004

 

 

 

Lowa Corp.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.fllr.0399.0035448.002

 

 

 

L-S Electro-Galvanizing Co.

 

Formation documents (lessor)

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.1100.0037660.001

 

 

 

Luke David, L.L.C

 

Participation agreement

 

Primary

cco.rmkt.0900.0037660.001

 

 

 

Luke David, L.L.C

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.clob.1002.0037371.002

 

 

 

Maritime Shipping NV (IPC)

 

Subordination agreement

 

Ancillary

cco.intr.1002.0037371.002

 

 

 

Maritime Shipping NV (IPC)

 

Intercreditor Agreement

 

Primary

cco.subk.0800.0037371.001

 

 

 

Maritime Shipping NV (IPC)

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.0301.0038260.002

 

 

 

Michael McCullough

 

Participation agreement

 

Primary

cco.rmkt.0900.0038260.002

 

 

 

Michael McCullough

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.subk.0994.0032566

 

 

 

Neuvant Aerospace Corp.

 

Subordination Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.clob.0598.0034926.001

 

 

 

New Piper Aircraft, Inc., The

 

Subordination Agreement

 

Ancillary

cco.intr.0598.0034926.001

 

 

 

New Piper Aircraft, Inc., The

 

Intercreditor Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.comk.0501.0039015.001

 

 

 

Omni Flys, S.A. de C.V.

 

Completion contract

 

Ancillary

 

--------------------------------------------------------------------------------

 

Name

 

 

 

Customer Name

 

Document Type Name

 

Category

 

 

 

 

 

 

 

 

 

cco.ema.0801.0041567.003

 

 

 

Peabody Holding Co., Inc.

 

Equipment Maintenance agreement

 

IER

 

 

 

 

 

 

 

 

 

cco.pa.0901.0039348.001

 

 

 

Peerless Importers, Inc.

 

Participation agreement

 

Primary

cco.rmkt.0900.003938.001

 

 

 

Peerless Importers, Inc.

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.trag.0600.0036771.001.b

 

 

 

PolicyD, S.A. de C.V.

 

Trust Agreement

 

Primary

cco.trag.0600.0036771.001.a

 

 

 

PolicyD, S.A. de C.V.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.ema.1201.0040330.001

 

 

 

Pope and Talbot, Inc.

 

Equipment Maintenance agreement

 

Primary

cco.intr.1201.0040330.001

 

 

 

Pope and Talbot, Inc.

 

Intercreditor Agreement

 

Primary

cco.pa.1201.0040330.001.a

 

 

 

Pope and Talbot, Inc.

 

Participation agreement

 

Primary

cco.pa.1201.0040330.001.b

 

 

 

Pope and Talbot, Inc.

 

Participation agreement

 

Primary

cco.part.1201.0040330.001

 

 

 

Pope and Talbot, Inc.

 

Partnership Agreement

 

Primary

cco.trag.1201.0040330.001

 

 

 

Pope and Talbot, Inc.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.pa.0299.0035459.001.

 

 

 

Pride Amethyst, Ltd

 

Participation agreement

 

Primary

cco.trag.0299.0035459.001.

 

 

 

Pride Amethyst, Ltd

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.0602.0035671.003

 

 

 

Radiant Aviation Services

 

Intercreditor Agreement

 

Primary

cco.lica.0701.0035671.003

 

 

 

Radiant Aviation Services

 

License Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.1297.0034429.a

 

 

 

Ravenna Aluminum, Inc.

 

Intercreditor Agreement

 

Primary

cco.intr.1297.0034429.b

 

 

 

Ravenna Aluminum, Inc.

 

Intercreditor Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.intr.0995.0032820

 

 

 

Revere Copper Products, Inc.

 

Intercreditor Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.subk.0999.0035737

 

 

 

Rigi, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.ema.1003.0037904.002

 

 

 

RX Choice, Inc.

 

Equipment Maintenance agreement

 

IER

cco.ema.0803.0037904.003

 

 

 

RX Choice, Inc.

 

Equipment Maintenance agreement

 

IER

cco.ema.0600.0037904.004

 

 

 

RX Choice, Inc.

 

Equipment Maintenance agreement

 

IER

cco.esta.0601.0037904

 

 

 

RX Choice, Inc.

 

Escrow Trust Agreement

 

Ancillary

cco.loca.0101.0037904.001.a

 

 

 

RX Choice, Inc.

 

Letter of Credit Agreement

 

Primary

cco.loca.0101.0037904.b

 

 

 

RX Choice, Inc.

 

Letter of Credit Agreement

 

Primary

cco.wary.0701.0037904.001

 

 

 

RX Choice, Inc.

 

Warranty

 

Ancillary

cco.wary.0701.0037904.001

 

 

 

RX Choice, Inc.

 

Warranty

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.clob.0703.0042654.001.a

 

 

 

Servicios Integrales de Avaicion, SA de CV (SIASA)

 

Subordination Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.esta.0399.0035471

 

 

 

Southern Bulk Industries, Inc.

 

Escrow Trust Agreement

 

Ancillary

cco.intr.0901.0035471.34541.a

 

 

 

Southern Bulk Industries, Inc.

 

Intercreditor Agreement

 

Primary

cco.intr.0901.0035471.34541.b

 

 

 

Southern Bulk Industries, Inc.

 

Intercreditor Agreement

 

Primary

cco.subk.0399.0035471.b

 

 

 

Southern Bulk Industries, Inc.

 

Subordination agreement

 

Ancillary

cco.subk.0399.0035471.a

 

 

 

Southern Bulk Industries, Inc.

 

Subordination agreement

 

Ancillary

cco.subk.0702.0035471.34541.a

 

 

 

Southern Bulk Industries, Inc.

 

Subordination agreement

 

Ancillary

cco.subk.0702.0035471.34541.b

 

 

 

Southern Bulk Industries, Inc.

 

Subordination agreement

 

Ancillary

cco.subk.0702.0035471.34541.c

 

 

 

Southern Bulk Industries, Inc.

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.0101.0037960.001

 

 

 

Southern Company Services, Inc.

 

Participation agreement

 

Primary

 

--------------------------------------------------------------------------------

 

Name

 

 

 

Customer Name

 

Document Type Name

 

Category

cco.rmkt.0900.0037960.001

 

 

 

Southern Company Services, Inc.

 

Remarketing agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.esta.0901.0039595.001

 

 

 

Springs Industries, Inc.

 

Escrow Trust Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.pa.0999.0035293.002

 

 

 

TCA Network Funding, Limited Partnership

 

Participation agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.esta.1003.0043254.001.101.201

 

 

 

Tower Automotive Madison, LLC

 

Escrow Trust Agreement

 

Ancillary

cco.loca.1003.0043254.001.101.201

 

 

 

Tower Automotive Madison, LLC

 

Letter of Credit Agreement

 

Primary

cco.pa.1003.0043254.001.101.201

 

 

 

Tower Automotive Madison, LLC

 

Participation Agreement

 

Primary

cco.subk.1003.0043254.001.101.201

 

 

 

Tower Automotive Madison, LLC

 

Subordination agreement

 

Ancillary

cco.subk.1003.0043254.001.101.201A

 

 

 

Tower Automotive Madison, LLC

 

Subordination agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.agam.0798.0033192

 

 

 

Transocean Holdings, Inc.

 

Agency Agreement

 

Primary

cco.agam.0797.0033192

 

 

 

Transocean Holdings, Inc.

 

Agency Agreement

 

Primary

cco.esta.1195.0033192

 

 

 

Transocean Holdings, Inc.

 

Escrow Trust Agreement

 

Ancillary

cco.trag.1195.0033192

 

 

 

Transocean Holdings, Inc.

 

Trust Agreement

 

Primary

 

 

 

 

 

 

 

 

 

cco.subk.1196.0033069

 

 

 

UNC Johnson Technology, Inc.

 

Subordination Agreement

 

Ancillary

 

 

 

 

 

 

 

 

 

cco.trag.0701.0039505.001

 

 

 

Waterman Steamship Corp.

 

Trust Agreement

 

Primary

 

--------------------------------------------------------------------------------

 

Schedule 3.2(r)

 

Designated Credit Enhancements

 

Issuing Bank

 

Dollar
Amount

 

Reduction
Date

 

Reduction
Code

 

Renewal
Date

 

Renewal
Code

 

Expiration
Date

 

Lease Term
Date

 

Letter of
Credit No.

 

Customer

 

Lease
Number

 

LOC
Number

 

 

 

 

 

 

 

(Y/N)

 

 

 

(Y/N)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOC'S NOT
AUTOMATICALLY
RENEWED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FLEET BANK

 

8,608,320.00

 

N/A

 

Yes*

 

N/A

 

N

 

09/30/04

 

02/01/09

 

ASL-3011624-130ISH

 

L-S ELECTRO-GALVANIZING CO.

 

0035448

 

002

 

WELLS FARGO

 

1,800,000.00

 

N/A

 

N

 

N/A

 

N

 

10/31/04

 

08/05/04

 

NZS472122*

 

JETCRAFT (JETCOAST 6042 LLC

 

10058

 

001

 

WELLS FARGO

 

1.00

 

N/A

 

N

 

N/A

 

N

 

10/31/04

 

08/05/04

 

NZS472122*

 

JETCRAFT (JETCOAST 6043 LLC)

 

10059

 

001

 

JPMORGAN CHASE BANK

 

1,500,000.00

 

N/A

 

N

 

N/A

 

N

 

06/30/05

 

03/29/17

 

P-241628

 

CAMROSE PIPE CORPORATION

 

0043143

 

001

 

GMAC

 

930,000.00

 

05/01/04

 

Yes

 

N/A

 

N

 

04/30/07

 

06/01/07

 

0422021047

 

FORT WAYNE FOUNDRY CORP.

 

0033093

 

001

 

 

 

12,838,321.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOC'S WITH AUTOMATIC
RENEWALS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CITIBANK, N.A.

 

1,600,000.00

 

N/A

 

N

 

06/27/04

 

Y

 

06/27/11

 

07/01/11

 

NY-02169-30030220

 

RX CHOICE, INC.

 

0037904

 

003

 

CITIBANK, N.A.

 

1,550,000.00

 

N/A

 

N

 

06/27/04

 

Y

 

06/27/11

 

07/01/11

 

NY-02169-30030221

 

RX CHOICE, INC.

 

0037904

 

002

 

CITIBANK, N.A.

 

911,946.00

 

N/A

 

N

 

06/27/04

 

Y

 

06/27/11

 

07/01/11

 

NY-02169-30030222

 

RX CHOICE, INC.

 

0037904

 

004

 

BANK OF AMERICA

 

650,389.55

 

N/A

 

N

 

06/30/04

 

Y

 

None stated

 

06/15/07

 

3058413*

 

AMERICAN COLOR GRAPHICS

 

0032684

 

001

 

BANK OF AMERICA

 

1.00

 

N/A

 

N

 

06/30/04

 

Y

 

None stated

 

06/15/07

 

3058413*

 

AMERICAN COLOR GRAPHICS

 

0033365

 

001

 

JP MORGAN CHASE BANK

 

1,000,000.00

 

N/A

 

N

 

09/02/04

 

Y

 

09/02/05

 

08/01/05

 

3940/IR011699STO

 

BISON AIR CORPORATION

 

0034942

 

001

 

BANK ONE

 

2,660,000.00

 

N/A

 

N

 

09/24/04

 

Y

 

None stated

 

11/16/07

 

CLS344020

 

TUBE CITY, INC.

 

0033423

 

001

 

COMERICA BANK

 

6,500,000.00

 

N/A

 

N

 

10/31/04

 

Y

 

None stated

 

11/03/09

 

587030-05

 

TOWER AUTOMOTIVE INC.

 

0043254

 

001

 

WELLS FARGO

 

5,205,570.00

 

07/15/04

 

Yes

 

12/27/04

 

Y

 

12/27/xx

 

01/16/09

 

NZS425403

 

GREYHOUND LINES INC

 

0040230

 

001

 

CITIBANK, N.A.

 

1,700,000.00

 

N/A

 

N

 

12/31/04

 

Y

 

03/15/11

 

08/01/11

 

NY-_____-30029059

 

RX CHOICE, INC.

 

0037904

 

001

 

JP MORGAN CHASE BANK

 

683,747.00

 

N/A

 

N

 

03/15/05

 

Y

 

05/20/07

 

04/01/07

 

P-223136

 

J.L. FRENCH AUTOMOTIVE CASTING

 

0039740

 

001

 

 

 

22,461,653.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,299,974.55

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No Certificates of Deposit

NOTE: All LOC’s located at 3780 Kilroy Airport Way, Long Beach, CA 90806

 

--------------------------------------------------------------------------------

 

Schedule 3.2(s)

Foreign Specified Financing and Lease Assets/ Credit Enhancement/ Foreign
Obligors

 

Customer

 

Lease/Loan Number

 

Foreign

 

Foreign
Customer
Location

 

Foreign
Equipment
Location

 

Payment
From
Foreign
Source

 

Billing Address

 

Comments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AEROSERVICIOS CORPORATIVOS Total

 

39482

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

AEROSERVICIOS DINAMICOS, S.A. Total

 

34185

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

AEROSERVICIOS VANGUARDIA, S.A. (AEROSER) Total

 

10002

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

AEROVITRO. S.A. DE C.V. Total

 

38971

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

ATOLL HOLDINGS LIMITED Total

 

37304

 

Y

 

Jersey, Channel Islands

 

Switzerland

 

Y

 

Greece

 

a/c registered in US

BRASPETRO OIL SERVICES CO. (BRASPET) Total

 

10112
35659

 

Y
Y

 

Brazil
Brazil

 

Brazil
Brazil

 

N
Y

 

New York
Brazil

 

Two vessels.  Registered in Panama

BUCYRUS INTERNATIONAL, INC. Total

 

33729, 39940

 

Y

 

US

 

Bahama

 

N

 

Wisconsin

 

33729 in US.  39940 in Bahama

CCA FINANCIAL SERVICES INC. (CCAFINA) Total

 

10027

 

Y

 

US

 

Brazil

 

N

 

Florida

 

We have a loan secured by 2 helicopters.  Our customer leases the exuipment to a
company in Brazil.  We have a security interest in the lease and the helicopters

CONTAINER APPLICATION INTL,INC Total

 

32631

 

Y

 

US

 

International

 

N

 

California

 

Shipping containers used in international trade

CREDENCE CAPITAL CORPORATION (CREDENC) Total

 

10033

 

Y

 

US

 

Korea

 

N

 

California

 

We have a loan to a US company that leases equipment to a US company, who in
turn subleases the equipment to their Korean sub.  We have a security interest
in the equipment, the lease and the sublease.

CRONOS CONTAINER Total

 

32591

 

Y

 

US

 

International

 

N

 

California

 

Shipping containers used in international trade

DEL MONTE FOODS CORP Total

 

 

 

Y

 

US

 

US Samoa

 

N

 

 

 

 

ESSAR SHIPPING LTD (ESSARSH) Total

 

10039

 

Y

 

India

 

International

 

Y

 

India

 

Loan secured by vessels registered and based in India

FANCIA INVESTMENTS Total

 

37026

 

Y

 

Panama

 

International

 

Y

 

Denmark

 

Shipping containers used in international trade.  Guarantor is Swiss

GATEWAY CONTAINER INTL., LTD. Total

 

35326, 37715

 

Y

 

Bermuda

 

International

 

N

 

California

 

Shipping containers used in international trade

HAINAN AIRLINES CO., LTD. Total

 

39706

 

Y

 

China

 

China

 

Y

 

China

 

 

HAYNES INTERNATIONAL Total

 

35593

 

Y

 

US

 

US/Mexico

 

N

 

Indiana

 

Equipment under Lease 35593 is located in Mexico.  NAV of $99K

HELIMED AERO TAXI

 

43553

 

Y

 

Brazil

 

Brazil

 

Y

 

Brazil

 

 

HORIZON OFFSHORE CONTRACTOR, (HORIZO1) Total

 

10110

 

Y

 

Cayman

 

International

 

N

 

Texas

 

Vessel used internationally and registered in Vanuatu.  US Guarantor

JAMAICA ENERGY PARTNERS (JAMAICA) Total

 

10056

 

Y

 

Jamaica

 

Jamaica

 

Y

 

Jamaica

 

 

LCI SHIPHOLDING, INC. Total

 

39448

 

Y

 

Liberia

 

International

 

N

 

Louisiana

 

Lease of a vessel used internationally and registered in Panama

LIDER TAXI AEREO S.A. Total

 

10064, 39494

 

Y

 

Brazil

 

Brazil

 

Y

 

Brazil

 

 

LOS CIPRESES S.A. (LOSCIPR) Total

 

10065

 

Y

 

Marshall Islands/ Uruguay

 

Unsecured

 

Y

 

Uruguay

 

Co-borrowers on an unsecured loan as part of a workout

LOWA CORP (LOWACOR) Total

 

10066

 

Y

 

Cayman Island

 

International

 

Y

 

UK (London)

 

Aircraft registered in Burmuda

MARITIME SHIPPING NV (IPC) (MARITIM) Total

 

10067

 

Y

 

Cayman Island

 

Mexico

 

Y

 

Mexico

 

Loan secured by vessel registered in Panama

NORTH ATLANTIC REFINING, LTD. (NORTHAT) Total

 

10069

 

Y

 

Canada

 

Canada

 

Y

 

Canada

 

 

OMNI FLYS,.S.A. DE C.V. Total

 

 

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

PARKER DRILLING OFFSHORE INTERNATIONAL (PARKER D)

 

10072

 

Y

 

Cayman Islands

 

Nigeria

 

Y

 

Texas

 

Loan secured by Panamanian flagged vessel.  US Guarantor.

POLICYD, S.A. DE C.V. (POLICYD) Total

 

10074

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

 

PRIDE AMETHYST LIMITED Total

 

35459

 

Y

 

British Virgin Islands

 

Brazil

 

N

 

Texas

 

Vessel registered in Netherland Antiles.  Vessel subleased to Petrobras. 
Transaction guarantied by US parent

ROLLS ROYCE CANADA LTD. Total

 

33126

 

Y

 

Canada

 

Canada

 

Y

 

Canada

 

 

SARGEANT MARINE, INC (SARGENT) Total

 

10080

 

Y

 

US/Cayman

 

International

 

N

 

Florida

 

2 vessels.  Commander is US registered and Victory is Cayman registered.

SEAFALCON LTD TOTAL

 

38093

 

Y

 

Bermuda

 

Switzerland

 

Y

 

Monte Carlo

 

Aircraft used internationally and registered in Switzerland

SERVICIOS INTEGRALES DE Total

 

42654

 

Y

 

Mexican

 

Mexico

 

Y

 

Mexico

 

Aircraft used internationally and registered in Mexico

STONE CONTAINER CORP. Total

 

30213

 

Y

 

US

 

Canada / US

 

N

 

US Several Locations

 

One piece of equipment moved to Canada.  NAV of $720K

 

--------------------------------------------------------------------------------

 

SUBIC AIR CHARTER INC. (SUBICAI) Total

 

10085

 

Y

 

Philippines

 

Philippines

 

Y

 

Philippines

 

Loan secured by aircraft used internationally (predominately in Philippines) and
registered in Philippines.

TRANS OCEAN LEASING CORP Total

 

23374

 

Y

 

US

 

International

 

N

 

New York

 

Shipping containers used in international trade

TRANS OCEAN HOLDING

 

33192

 

Y

 

N

 

Y

 

N

 

Louisiana

 

Serviced by GATX

WATERMAN STEAMSHIP CORP. Total

 

39505

 

Y

 

 

 

International

 

N

 

Louisiana

 

Vessel used internationally and registered in US

WORLD WIDE CONTAINER LEASING Total

 

42523

 

Y

 

Panama

 

International

 

Y

 

Switzerland

 

Shipping contatiners used in international trade.  Transaction guarantied by
Guernsey company and Swiss company

 

--------------------------------------------------------------------------------

 

Schedule 3.2(v)

 

Required Notices and Consents

 

Advance Notice Required:

 

OBLIGOR

 

BOEING ENTITY

American Railcar Industries, Inc.

 

Boeing Capital Corporation

Asphalt International and Victory Marine (master list Sargeant Marine)

 

Boeing Capital Corporation

Braspetro Oil Services, Co.  (Petrobras XXXIV Trust LLT)

 

Boeing Capital Corporation

Camrose Pipe Corporation

 

SPV – Portland Tube Facility LLC (Boeing member – BCC Equipment Leasing
Corporation)

Coastal Towing, Inc.

 

Boeing Capital Loan Corporation

Coastal Towing, Inc.

 

Boeing Capital Corporation

Container Applications International Inc.

 

Boeing Capital Leasing Corporation

Essar Shipping Limited

 

Boeing Capital Corporation

Gateway Container International Limited

 

BCC Equipment Leasing Corporation

Glenoit LLC

 

Boeing Capital Corporation

Horizon Vessels International Ltd. (master list Horizon Offshore Contractor)

 

Boeing Capital Corporation

Jefferson Smurfit Corporation

 

BCC Equipment Leasing Corporation

Los Cipreses S.A.

 

Boeing Capital Corporation

Maritime Shipping Ltd., Cayman Islands

 

Boeing Capital Corporation

Russell-Stanley Corp.

 

BCC Equipment Leasing Corporation

The Bridgeport and Port Jefferson Steamboat Company

 

BCC Equipment Leasing Corporation

U.S. Food Service, Inc.

 

BCC Equipment Leasing Corporation

World Wide Container Leasing, S.A.

 

BCC Equipment Leasing Corporation

 

Prior Consent Required:

 

OBLIGOR

 

BOEING ENTITY

Access Facilities Corporation

 

Boeing Capital Corporation

American Standard, Inc.

 

BCC Equipment Leasing Corporation

Autocam Corporation and Autocam France

 

Boeing Capital Corporation

 

1

--------------------------------------------------------------------------------

 

OBLIGOR

 

BOEING ENTITY

Access Facilities Corporation

 

Boeing Capital Corporation

Bethlehem Steel Corporation

 

BCC Equipment Leasing Corporation

Boeing Company, The

 

BCC Equipment Leasing Corporation

Boeing Space and Communications

 

BCC Equipment Leasing Corporation

Citation Corporation

 

Boeing Capital Corporation

Coleman Cable Acquisition, Inc.

 

Boeing Capital Corporation

Dayco Products LLC, MIV Acquisition Corporation, MIV Holdings SA, Mark IV
Industries Inc., Dayco Europe SRL and Lombardini SRL (master list Dayco
Products)

 

Boeing Capital Corporation

Doane Pet Care Company

 

Boeing Capital Corporation

Edwards Baking Company

 

Boeing Capital Corporation

Formica Corporation, Formica Limited, Formica Holdco (UK) Limited, Formica
Canada Inc., Formica S.A. and Formica Espanola S.A. (master list Formica Corp.)

 

Boeing Capital Corporation

Great Lakes Dredge & Dock Co.

 

McDonnell Douglas Overseas Finance Corporation

Greyhound Lines, Inc.

 

BCC Equipment Leasing Corporation

Great Lakes Dredge & Dock Co.

 

BCC Equipment Leasing Corporation;

H.J. Heinz Company

 

BCC Equipment Leasing Corporation

Helimed Aero Taxi Ltda (Brazil) LLC

 

Boeing Capital Corporation

Ispat Sidbec Inc.

 

Boeing Capital Corporation

Janus Equities, LLC (assignment from AE Reverse Co.)

 

Boeing Capital Corporation

Lider Taxi Aero S.A. Air Brazil

 

Boeing Capital Corporation

LCI Shipholdings

 

BCC Equipment Leasing Corporation

L-S Electro-Galvanizing Company

 

SPV – Cleveland Steel Facility, LLC (Boeing member – BCC Equipment Leasing
Corporation)

Lucent Technologies, Inc.

 

BCC Equipment Leasing Corporation

National Steel Corporation (master list United States Steel Corporation)

 

BCC Equipment Leasing Corporation

North Atlantic Refining Limited

 

Boeing Capital Corporation

Pride Amethyst Ltd.

 

BCC Equipment Leasing Corporation

R & B Falcon Drilling Co. fka Reading & Bates Drilling Co. (master list
Transocean Holdings)

 

SPV – Deep Sea Investors LLC (Boeing member – BCC Equipment Leasing Corporation)

Revere Cooper Products, Inc.

 

BCC Equipment Leasing Corporation

 

2

--------------------------------------------------------------------------------

 

OBLIGOR

 

BOEING ENTITY

Access Facilities Corporation

 

Boeing Capital Corporation

Springs Industries Inc.

 

Boeing Capital Corporation

Stoody Company

 

BCC Equipment Leasing Corporation

Synthetic Industries, Inc.

 

Boeing Capital Corporation

TCA Network Funding, Limited Partnership

 

Boeing Credit Corporation

The Boeing Company

 

BCC Equipment Leasing Corporation

Trans Ocean Leasing Corporation

 

BCC Equipment Leasing Corporation

Travelcenters of America, Inc.

 

Boeing Capital Corporation

Vought Aircraft Industries, Inc.

 

Boeing Capital Corporation

Waterman Steamship Corporation

 

BCC Equipment Leasing Corporation

Wyman-Gordon Titanium Castings, LLC (assignee from Wyman-Gordon Investment
Castings)

 

BCC Equipment Leasing Corporation

 

 

Equity Asset Notice or Consent:

 

BOEING ENTITY

 

EQUITY ASSET

 

REQUIRED CONSENT OR
NOTICE

 

 

 

 

 

BCC Equipment Leasing Corporation

 

Portland Tube Facility, L.L.C.

 

Heller Financial Leasing, Inc. – to sale/option

BCC Equipment Leasing Corporation

 

MDFC/Mitsui Leasing Partnership

 

Mitsui Leasing (U.S.A.) Inc. – to sale/option

 

--------------------------------------------------------------------------------

*  Required transfer or assignment fees are not indicated on this schedule.

 

**  In the case of syndicated transactions, some Assets may be removed from this
schedule if Buyer is already a member of the syndicate.

 

3

--------------------------------------------------------------------------------

 

Schedule 3.2(x)

 

Waiver of Material Rights

 

As part of the terms of the Forbearance Agreement entered into with Sky King,
Inc. the applicable Seller’s right to proceed against the guarantor’s portion of
his jointly owned residence is waived at the 91st day after perfection of the
additional collateral pledged under the Forbearance Agreement.  Part of the
additional collateral consists of an assignment of the guarantor’s portion of
the excess cash flow in his Walgreens Store (jointly owned with his wife who is
not a guarantor).  The Forbearance Agreement further provides that this
assignment will be released at the 2nd anniversary of the Forbearance Agreement
if no defaults have occurred.

 

--------------------------------------------------------------------------------

 

Schedule 3.3

 

List of Partnership/LLC Affiliations

 

A sale of 50% or more of the total interest in partnership capital and profits
within a 12-month period shall terminate the partnership for tax purposes.
May require Consent from the other Partners

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent to be

 

 

 

 

 

 

 

 

 

ACRO-

 

PARTNERS

 

 

 

 

 

 

 

Sold as an

 

 

 

 

 

 

 

FEIN

 

NYM

 

(* Tax Matter Partner)

 

 

 

 

 

TOTAL

 

Equity Asset

 

TOTAL NAV

 

BCC NAV

 

MDFC/Mitsui Leasing Partnership

 

 

 

 

 

BCC-ELC

 

Mitsui

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

as of 4/30/04

 

3780 Kilroy Airport Way, Suite 750, Long Beach, CA 90806

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(American Standard - non aircraft) - Equipment Leasing

 

33-0695795

 

MCE

 

50.0

%

50.00

%

 

 

 

 

 

 

 

 

100

%

49

%

8,395,944.00

 

4,197,972.00

 

Joint ownership of manufacturing eqpt

 

General Partnership Agreement effective as of March 31, 1995 by BCC-ELC and
Mitsui Leasing.

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact: Maria Santiago (212) 883-3023, Fax (212) 490-1684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract #31203-027 to 078 and 452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deep Sea Investors, L.L.C.

 

 

 

 

 

BCC-ELC

 

GATX

 

Heller

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Four Embarcadero Center, Suite 2200

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

San Francisco, CA 94111

 

13-3860286

 

R&B

 

34.03

%

44.70

%

21.27

%

 

 

 

 

 

 

100

%

 

 

36,918,686.00

 

12,563,429.00

 

(Readings and Bates) - Leasing Industrial Equipment

 

Amended and Restated Limited Liability Company Agreement dated as of July 1,
1998.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

34.03% owned by BCC-ELC - Joint ownership in Drilling Rig

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Return Prepared by Colleen Cheong (415) 955-3317)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11/08/1995 Date of Incorp.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract #33192-001 to 009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Aircraft 1997- 1, LLC

 

 

 

 

 

BCC-ELC

 

GECC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3780 Kilroy Airport Way, Suite 750, Long Beach, CA 90806

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(GECC - private aircraft) - Equipment Leasing

 

06-1499111

 

GE2

 

95.0

%

5.00

%

 

 

 

 

 

 

 

 

100

%

 

 

16,700,945.26

 

15,865,898.00

 

95% owned by BCC-ELC - Joint ownership of private aircraft

 

Limited Liability Company Agreement effective December 1, 1997 between BCC-ELC
and GECC of Tennessee

 

 

 

 

 

 

 

 

 

 

 

Xerox Aircraft and Note

 

 

 

12/1/97 Date of Incorp. (Delaware)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact #39584-001 and 002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cleveland Steel Facility, LLC

 

 

 

 

 

BCC-ELC

 

Heller

 

Transam.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3780 Kilroy Airport Way, Suite 750, Long Beach, CA 90806

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing equipment

 

33-0838502

 

LTV

 

40.0

%

40.00

%

20.0

%

 

 

 

 

 

 

100

%

 

 

31,884,232.50

 

12,753,693.00

 

1/25/99 Date of Incorp. (Delaware)

 

Amended and Restated Limited Liability Company Agreement dated as of January 25,
1999 as amended and restated, March 5, 1999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold BCC share (40%) to Heller Financial on 3/5/99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sold portion of ELC share (20%) to Transamerica Eqpt 4/99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cotract #35448-002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petrobras XXXIV Trust LLT

 

 

 

 

 

BCC-ELC

 

FPSO

 

CIT Group

 

GECC

 

Transam.

 

 

 

 

 

 

 

 

 

 

 

120 Long Ridge Rd., Stamford, CT 06927

 

 

 

 

 

 

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing equipment

 

52-7017915

 

PET

 

37.82100

%

18.91

%

11.34630

%

22.46700

%

9.45520

 

 

 

100

%

 

 

123,755,797.00

 

46,805,680.00

 

GECC is the TMP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Partnership Return prepared by Donald R. Sklar & Assoc

 

PETROBRAS XXXIV Trust LLT Agreement dated as of July 28, 1999 among the above
partners as Owner Participants and State Street Bank as Owner Trustee.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact - Donald Sklar Ph 404-832-0886 Fax 404-525-1120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract #35659-001 and 002

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(GECC)

 

The

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portland Tube Facility, LLC

 

 

 

 

 

BCC-ELC

 

Heller

 

CIT Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3780 Kilroy Airport Way, Suite 750, Long Beach, CA 90806

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leasing equipment (Welded Tube)

 

95-4801301

 

WTC

 

50.0

%

23.00

%

27.0

%

 

 

 

 

 

 

100

%

49

%

23,567,592.00

 

11,783,796.00

 

3/30/00 Date of Incorp.

 

Limited Liability Company as of March 30, 2000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contact: Tom Kramer (312) 441-7462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract #43143-001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General

 

Trans-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cylinder Head Line (Title owned by BCC-ELC)

 

 

 

 

 

BCC-ELC

 

UPS

 

Transamerica

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3780 Kilroy Airport Way, Suite 750

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long Beach, CA 90806

 

61-1431776

 

CYL

 

47.68

%

38.05

%

14.27

%

 

 

 

 

 

 

100.0

%

34.999

 

47,987,619.55

 

22,880,497.00

 

Leasing Manufacturing Equipment

 

Participation Agreement dated August 26, 2002 between Transamerica Equipment
Financial Services Corp and BCC-ELC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Formed: 8/26/2002 (Delaware)

 

Participation Agreement dated August 27, 2002 between UPS Capital Corporation
and BCC-ELC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract # 41030-001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BCC-ELC owns 100% membership interests in the following LLCs. Since these are
single member LLCs they are disregarded for income tax purposes:

 

Assembly and Test Line, LLC

 

 

 

ATL

 

100.00

%

 

 

 

 

 

 

 

 

 

 

48,519,709.00

 

48,519,709.00

 

Crankcase Finishing End Line, LLC

 

 

 

CFL

 

100.00

%

 

 

 

 

 

 

 

 

 

 

49,090,284.00

 

49,090,284.00

 

Contract #10112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BCC

 

Other Lenders

 

 

 

 

 

 

 

 

 

 

 

 

 

BCC has a 10% interest in a $300 million Petrobras Loan secured by oil drilling
platforms evidenced by a trust certificate in the following Special Lender
Participants entities PB Platforms 2001-P8, PB Platforms 2001-P16, PB Platforms
2001-P32

 

 

 

 

 

10.00

%

90.00

%

 

 

 

 

 

 

 

 

289,067,210.00

 

28,906,721.00

 

 

* None of these assets are certificated

 

--------------------------------------------------------------------------------

 

Schedule 5.3

Operations Prior to the Closing Date

 

Customer

 

Date

 

Action

 

 

Backlog Related

Aero Toy Store

 

19-May

 

Expect payoff of $2M loan secured by Security Deposit and funding of $1.5M loan
secured by 2 helicopters

The Boeing Corporation

 

24-May

 

Intend to fund $24,710,000 lease of a Challenger 604

Rigi

 

26-May

 

Expect to fund $2.6M loan secured by Pilatus a/c

 

 

 

 

 

 

 

Other Actions

Autocam

 

 

 

Customer is attempting to refinance this Term B loan.  Loan docs give them this
right.  We would be paid in full.

Citation Corporation

 

-

 

Approved Sale at 90%of Principal or Higher

Dan River

 

 

 

Transferred to HFLOS

Formica

 

30-Jun

 

Bankruptcy Reorg. Approved calling for 60-65% cash pay down and remainder
amortized over 6 yrs.

Gemini

 

30-Jun

 

Potential sale of company in process

 

 

 

 

 

Grays Harbor

 

31-May

 

Deferral of 5 payments approved in process of documentation Sale and financing
of GIII (Mainko) approved (closing subject to final negotiations with JODA. 
Completion of restructure of Hop-

JODA

 

31-May

 

A-Jet in process.

Kasgro Leasing

 

31-May

 

Anticipate Declining of proposal to amend lease terms

Los Cipreses (Buquebus)

 

30-Jun

 

Extension of Forbearance Agreement for additional year Customer is attempting to
refinance this Term B loan.  Loan docs give them this right.  We would be paid
in full.

Mark IV Policyd S.A. (Cydsa)

 

30-Jun

 

Anticipate restructuring with principal payments reduced

Aeroservicio (Cydsa)

 

30-Jun

 

Anticipate request to terminate lease and return airplane under existing terms
of documents

RMH Teleservices

 

31-May

 

Respond to request to Terminate Lease and accept a reduced amount under the
documents.

Sky King

 

-

 

Respond to requests required under Forbearance Agreement requiring 2 working day
turnaround.

Southern Bulk

 

7-Jun

 

Per Forbearance Agreement either it will be automatically extended to 9/30 or
sale of collateral will commence.

 

 

 

 

 

Trigeant, Ltd.

 

31-May

 

Decision to pursue remedies, restructure or forbear pending meeting of May 18.

 

 

 

 

 

Wings Venture

 

20-May

 

Expect to restructure lease to increase rent from $100,000 per month to $150,000
per month and extend term

 

 

 

 

 

Great Dane Airlines
0040541-001

 

28-May

 

Expect to lease Lear 35A S/N 237 to Hansen Perero Aviation, LLC.Rent $14,000
monthly advance, 48 month term, FMV purchase/ renewal or return at end of term.
Current NAV $2,535,674

 

--------------------------------------------------------------------------------

 

Global Air Charter
0042045-001

 

28-May

 

$131,000 Will be payable for contracted upgrade work for Lear 35A S/N 472.
Current NAV $2,590.333.

 

 

 

 

 

Transamerica
0027474-001

 

28-May

 

Agreement in place to sell the 113 trailers remaining in inventory. Net sale
proceeds of $90,720 is slightly in excess of NAV

 

 

 

 

 

Dan River Textile Equipment
0034752-001-008

 

28-May

 

Conducting sealed bid sale of textile equipment being rejected in Bankruptcy.
Current NAV $4.2 Million less specific reserve of $3.0 Million = $1.2 Million
exposure Bids in excess of $1.2 Million are anticipated.

 

 

 

 

 

US Steel
0035204-003

 

28-May

 

Selling Cat D7R Tractor, NAV $40,968. Net sale price $58,500 plus deferred
maintenance of approx. $16,000.

 

 

 

 

 

American Standard (Trane)
0031203-046

 

28-May

 

Selling (1) Haas HS-1RP Hor. Machining Center, NAV $6,384.02. Net sale price
$16,500.  This schedule is in partnership with Mitsui Leasing (50% each). These
figures represent BCC’s 50% portion.

 

 

 

 

 

CSU Transport
0039171-003

 

28-May

 

May sell 2 Spectec tipper trailers. Anticipated net sale proceeds $20,000. Total
NAV $13,297

 

 

 

 

 

CSU Transport
0039171-023

 

28-May

 

May sell 1995 Peterbilt tractor.  Anticipated net sale price $10,000. Current
NAV 0.

 

 

 

 

 

Embry Riddle Aeronautical
0037559-001

 

 

 

Upgrades to aircraft for re-lease to customer $31,250. Cost to be capitalized
into the NAV.

 

 

 

 

 

Quest II
0032717-004

 

 

 

Upgrades to aircraft for re-lease to customer $195,000. Cost to be capitalized
into the NAV.

 

 

 

 

 

Worldwide Containers - All IERs

 

28-May

 

Customer indicated intent to prepay in accordance with lease due to our plan to
sell the portfolio.

 

 

 

 

 

Fancia Investments - All IERs

 

28-May

 

Sister company of Worldwide.  Has asked permission to prepay on same basis for
same reason.

 

--------------------------------------------------------------------------------

 

SCHEDULE 9

 

INDEMNIFICATION

 

9.1           Indemnification by Sellers.

 

(a)           After the Initial Closing Date, and subject to the limitations set
forth herein, Sellers jointly and severally agree to indemnify, defend and hold
harmless each Buyer Group Member from and against any and all Indemnifiable
Losses incurred by such Buyer Group Member in connection with or arising from: 
(i) any breach of any warranty or the inaccuracy of any representation of
Sellers contained in this Agreement (other than a warranty or representation in
Section 3.1(e)(iii) or Section 3.1(e)(vii)), the Seller Transaction Documents or
any certificate delivered by or on behalf of Sellers pursuant hereto, (ii) any
breach by Sellers of, or failure by Sellers to perform, any of its covenants or
obligations contained in this Agreement other than under Section 9.1(a)(iii)) or
any Seller Transaction Document, including the failure to pay any Excluded
Liability, and (iii) (A) a breach of the representation of Sellers set forth in
Section 3.1(e)(iii), (B) any determination that, for U.S. federal Income Tax
purposes, a portion of any of the federal Income Tax attributes of ownership of
a Asset must be allocated to any of the Sellers for any period or portion of a
period beginning on or after the applicable Closing Date with respect to such
Asset as a result of a determination by the IRS that Buyer and Sellers have
formed a partnership for federal Income Tax purposes as a result of this
Agreement or the transactions effected hereby (provided, however, this
clause (B) of this Section 9.1(a)(iii) shall not impose any obligation as a
result of any entity identified on Schedule 9.1(a)(iii)(B) being treated as a
partnership), (C) any liability for sales, use or other similar Taxes assessed
in respect of any Purchased Portfolio Asset after the Closing Date to the extent
such Taxes were erroneously paid at the inception of such Purchased Portfolio
Asset, (D) any and all sales, use or other similar Taxes required to be
collected by Buyer in respect of any Purchased Portfolio Asset during the first
six (6) months following the applicable Closing Date if (1) Taxes of such type
were not being collected before the applicable Closing by any Seller with
respect to such Purchased Portfolio Asset, (2) exemption from collection of
Taxes of such type was dependent upon receipt by a Seller of a properly executed
exemption certificate, and (3) such exemption is not in fact available as of the
applicable Closing Date by reason of the failure of a Seller to have received
such a properly executed exemption certificate, (E) any Business Asset Permitted
Encumbrance, (F) any Portfolio Asset Permitted Encumbrance which resulted from
(1) any act (or omission to act) of, or any claim against, any Seller or (2) any
Tax owed by any Seller, except for any Tax required to be paid by any applicable
Obligor under the CFS Portfolio Financing and Lease Asset to which such
Portfolio Asset Permitted Encumbrance pertains, and (G) any breach or inaccuracy
of the representations and warranties of Sellers set forth in Section 3.2(s). 
For purposes of clause (i) of this Section 9.1(a), a breach of such
representation or warranty shall be deemed to exist either if such
representation or warranty is actually inaccurate or breached or if such
representation or warranty would have been breached or been inaccurate if such
representation or warranty had not contained any limitation or qualification as
to materiality, Material Adverse Effect, knowledge or Knowledge of Sellers in
any such representation or warranty, it being the intention of the parties
hereto that the Buyer Group Members shall be indemnified and held harmless from
and against any and all Indemnifiable Losses incurred by any of them in
connection with or arising from the failure of any such representation or
warranty to be true, correct and complete in any respect, determined in each

 

1

--------------------------------------------------------------------------------

 

case without regard to any qualification as to materiality, Material Adverse
Effect, knowledge or Knowledge of Sellers in any such representation or
warranty.

 

(b)           Each Buyer Group Member entitled to indemnification for any
Indemnifiable Losses suffered or incurred by such Buyer Group Member in
connection with or arising from a breach of any representation or warranty in
Sections 3.1(b)(i), 3.1(b)(ii), 3.1(b)(iii)(A), 3.1(e), 3.1(o) and 3.3(e) shall
be entitled to such indemnification for the full amount of such Indemnifiable
Losses regardless of the amount of such Indemnifiable Losses.  The
indemnification provided for in Section 9.1(a)(i) in connection with or arising
from a breach of any representation or warranty in Sections 3.1(b)(i),
3.1(b)(ii), 3.1(b)(iii)(A), 3.1(e), 3.1(o) and 3.3(e)  shall survive until
ninety (90) days after expiration of the relevant statutory period of
limitations applicable to the underlying claim, giving effect to any waiver,
mitigation or extension thereof (and no claims shall be made by any Buyer Group
Member under Section 9.1(a)(i) thereafter for any such breach).

 

(c)           Sellers shall be liable pursuant to Section 9.1(a)(i) with respect
to breaches of Sellers’ representations or warranties set forth in
Section 3.2(a) only to the extent that (i) the aggregate amount of Indemnifiable
Losses suffered by Buyer Group Members related to each individual claim or
series of related individual claims exceeds $20,000, of which the full amount
shall then be indemnifiable hereunder (subject to the immediately succeeding
clause (ii)) and shall be recorded against the $1,500,000 amount specified in
the immediately succeeding clause (ii), and (ii) the aggregate amount of such
Indemnifiable Losses suffered by Buyer Group Members exceeds $1,500,000, and
then Sellers shall be liable with respect to all such claims in excess of such
$1,500,000; provided, however, that the aggregate amount required to be paid
with respect to such breaches of Sellers’ representations or warranties set
forth in Section 3.2(a) shall not exceed $750,000,000.  The indemnification
provided for in Section 9.1(a)(i) in connection with or arising from a breach of
any representation or warranty in Section 3.2(a)  shall survive until five (5)
yearsafter the Final Closing Date (and no claims shall be made by any Buyer
Group Member under Section 9.1(a)(i) thereafter for any such breach).

 

(d)           Sellers shall be liable pursuant to Section 9.1(a)(i) with respect
to breaches of Sellers’ representations or warranties set forth in Sections 3.2
(other than 3.2(a) and 3.2(p)) and 3.3 (other than 3.3(e)) only to the extent
that (i) the aggregate amount of Indemnifiable Losses suffered by Buyer Group
Members related to each individual claim or series of related individual claims
exceeds $20,000, of which the full amount shall then be indemnifiable hereunder
(subject to the immediately succeeding clause (ii)) and shall be recorded
against the $4,000,000 amount specified in the immediately succeeding clause
(ii), and (ii) the aggregate amount of such Indemnifiable Losses suffered by
Buyer Group Members exceeds $4,000,000, and then with respect to all such claims
in excess of such $4,000,000; provided, however, that the aggregate amount
required to be paid with respect to such breaches of Sellers’ representations or
warranties set forth in Section 3.2 (other than 3.2(a) and 3.2(p) and 3.3 (other
than 3.3(e)) in the aggregate with all other breaches of Sellers’
representations or warranties referenced in Sections 9.1(e) and (f), shall not
exceed $350,000,000.  The indemnification provided for in Section 9.1(a)(i) in
connection with or arising from a breach of any representation or warranty in
Sections 3.2 (other than 3.2(a) and 3.2(p)) and 3.3 (other than 3.3(e)) shall
survive until five (5) years after the Final Closing Date (and no claims shall
be made by any Buyer Group Member under Section 9.1(a)(i) thereafter for any
such breach).

 

2

--------------------------------------------------------------------------------

 

(e)           Sellers shall be liable pursuant to Section 9.1(a)(i) with respect
to breaches of Sellers’ representations or warranties set forth in
Sections 3.1(b)(iii)(B) and 3.1(j)(i)-(vi) only to the extent that (i) the
aggregate amount of Indemnifiable Losses suffered by Buyer Group Members related
to each individual claim or series of related individual claims exceeds $20,000,
of which the full amount shall then be indemnifiable hereunder (subject to the
immediately succeeding clause (ii)) and shall be recorded against the
$12,000,000 amount specified in the immediately succeeding clause (ii), and
(ii) the aggregate amount of all Indemnifiable Losses suffered by Buyer Group
Members and referenced in this Section 9.1(e) or in Sections 9.1(b), (c), (d) or
(f)) exceeds $12,000,000, and then with respect to all such claims in excess of
such $12,000,000; provided, however, that the aggregate amount required to be
paid by Sellers pursuant to Section 9.1(a)(i) with respect to breaches of
Sellers’ representations or warranties set forth in Sections 3.1(b)(iii)(B) and
3.1(j)(i)-(vi), in the aggregate with all other Indemnifiable Losses referenced
in Section 9.1(d) and (f) for which amounts are required to be paid under
Section 9.1(a)(i), shall not exceed $350,000,000.  The indemnification provided
for in Section 9.1(a)(i) in connection with or arising from a breach of any
representation or warranty in Sections 3.1(b)(iii)(B) and 3.1(j)(i)-(vi) shall
survive until five (5) years after the Final Closing Date (and no claims shall
be made by any Buyer Group Member under Section 9.1(a)(i) thereafter for any
such breach).

 

(f)            Sellers shall be liable pursuant to Section 9.1(a)(i) with
respect to breaches of Sellers’ representations or warranties set forth in
Section 3.2(p) and Sellers’ representations and warranties not otherwise
referenced in Sections 9.1(b) through (e) only to the extent that (i) the
aggregate amount of Indemnifiable Losses suffered by Buyer Group Members related
to each individual claim or series of related individual claims exceeds $20,000,
of which the full amount shall be indemnifiable hereunder (subject to the
immediately succeeding clause (ii)) and shall be recorded against the
$12,000,000 amount specified in the immediately succeeding clause (ii), and
(ii) the aggregate amount of all Indemnifiable Losses suffered by Buyer Group
Members and referenced in this Section 9.1(f) or in Sections 9.1 (b), (c), (d)
or (e)) exceeds $12,000,000, and then with respect to all such claims in excess
of such $12,000,000; provided, however, that the aggregate amount required to be
paid by Sellers pursuant to Section 9.1(a)(i) with respect to breaches of
Sellers’ representations or warranties set forth in Section 3.2(p) and Sellers’
representations and warranties not otherwise referenced in Sections 9.1(b)
through (e), in the aggregate with all other Indemnifiable Losses referenced in
Sections 9.1(d) and (e) for which amounts are required to be paid under
Section 9.1(a)(i), shall not exceed $350,000,000.  The indemnification provided
for in Section 9.1(a)(i) in connection with or arising from a breach of any
representation or warranty in Section 3.2(p) shall survive until three (3)
yearsafter the Final Closing Date (and no claims shall be made by any Buyer
Group Member under Section 9.1(a)(i) thereafter for any such breach).  The
indemnification provided for in Section 9.1(a)(i) in connection with or arising
from a breach of any representation or warranty not otherwise referenced in
Sections 9.1(b) through (e) (other than Section 3.2(p)) shall survive until
eighteen (18) months after the Final Closing Date (and no claims shall be made
by any Buyer Group Member under Section 9.1(a)(i) thereafter for any such
breach).

 

(g)           Notwithstanding the provisions of Sections 9.1(a)-(f) above, if
Buyer does not elect to refuse an equitable assignment or to cause an Unwind of
Equitable Assignment as provided in Section 5.2(d), then no Buyer Group Member
shall be entitled to indemnification for

 

3

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any Indemnifiable Losses arising under or relating to any claim by an Obligor
with respect to a lack of a Required Consent to such equitable assignment.

 

9.2           Indemnification by Buyer.

 

(a)           After the Initial Closing Date, and subject to the limitations set
forth herein, Buyer agrees to indemnify, defend and hold harmless each Sellers
Group Member from and against any and all Indemnifiable Losses incurred by such
Sellers Group Member in connection with or arising from:  (i) any breach of any
warranty or the inaccuracy of any representation of Buyer contained in this
Agreement, the Buyer Transaction Documents or in any certificate delivered by or
on behalf of Buyer pursuant hereto, (ii) any breach by Buyer of, or failure by
Buyer to perform, any of its covenants and obligations contained in this
Agreement or any Buyer Transaction Document, and (iii) Buyer’s agreement to
assume and satisfy the Assumed Liabilities under Section 1.2 of this Agreement. 
For purposes of clause (i) of this Section 9.2(a), a breach of such
representation or warranty shall be deemed to exist either if such
representation or warranty is actually inaccurate or breached or if such
representation or warranty would have been breached or been inaccurate if such
representation or warranty had not contained any limitation or qualification as
to materiality, material adverse effect or knowledge in any such representation
or warranty, it being the intention of the parties hereto that the Sellers Group
Members shall be indemnified and held harmless from and against any and all
Indemnifiable Losses incurred by any of them in connection with or arising from
the failure of any such representation or warranty to be true, correct and
complete in any respect, determined in each case without regard to any
qualification as to materiality, material adverse effect or knowledge of Sellers
in any such representation or warranty.

 

(b)           The indemnification provided for in Section 9.2(a)(i) shall
terminate eighteen (18) months after the FinalClosing Date (and no claims shall
be made by any Sellers Group Member under Section 9.2(a)(i) thereafter).

 

9.3           Notice of Claims.

 

(a)           Any Buyer Group Member or Sellers Group Member seeking
indemnification hereunder (the “Indemnified Party”) shall give promptly to the
party obligated to provide indemnification to such Indemnified Party (the
“Indemnitor”) a written notice (a “Claim Notice”) describing in reasonable
detail the facts giving rise to the claim for indemnification hereunder and
shall include in such Claim Notice (if then known) the amount or the method of
computation of the amount of such claim, and a reference to the provision of
this Agreement or any other agreement, document or instrument executed hereunder
or in connection herewith upon which such claim is based; provided, however,
that the failure of any Indemnified Party to give the Claim Notice promptly as
required by this Section 9.3(a) shall not affect such Indemnified Party’s rights
under this Section 9 except to the extent such failure is actually prejudicial
to the rights and obligations of the Indemnitor.  The delivery of a Claim Notice
within the time limitations set forth in Schedule 9 shall cause the claims
subject to such Claim Notice to survive the expiration of the applicable
survival periods.

 

(b)           In calculating any Indemnifiable Losses (i) there shall be
deducted any insurance benefits and proceeds actually received net of any amount
that must be reimbursed,

 

4

--------------------------------------------------------------------------------

 

charged back, or that otherwise is not permanently received for the benefit of
the Indemnified Party as a result of any self-insurance, retention, deductible
or otherwise (collectively, “Insurance Benefits”) in respect thereof (and no
right of subrogation shall accrue hereunder to any insurer); (ii) there shall be
deducted any indemnification, contribution or other similar payment actually
recovered by the Indemnified Party from any third party (including a lessee)
with respect thereto; and (iii) other than in connection with a Tax Claim, any
Tax benefit (including, without limitation, any benefit attributable to a
decrease in income, increase in deduction or credit, increase in basis, or
refund) or Tax cost actually realized by the Indemnified Party as a result of
such Indemnifiable Losses or the receipt of indemnity payments hereunder shall
not be taken into account in calculating the amount of any indemnification
required of the Sellers hereunder.  Except for Expenses incurred by the
Indemnified Party in connection with an Income Tax audit and in connection with
a Tax Contest conducted in accordance with Section 9.4(c) hereof,
indemnification required with respect to a Tax Claim shall be limited by the
following provisions of this Section 9.3(b).

 

(1)           Indemnification pursuant to Section 9.1(a)(iii)(A) shall be
limited to the net increase in Income Tax liability actually incurred by the
Buyer by reason of the loss of depreciation, cost recovery or amortization
allowances or the change in the accrual of income, in each case resulting from
the breach of Section 3.1(e)(iii) with respect to which indemnification pursuant
to Section 9.1(a)(iii)(A) is so required.  Such net increase in Income Tax
liability shall be determined for each relevant taxable year taking into account
correlative adjustments for such year and will be payable periodically only if,
as and when such net increase is actually incurred.  The indemnification so
required shall be reduced by any reduction in such net increase in Income Tax
liability if, as and when incurred by the Buyer as so determined, either by
reduction of payments in respect of such indemnification requirement otherwise
due from Sellers or, if no such payment is due, by way of reimbursement to
Sellers.

 

(2)           Indemnification required pursuant to Section 9.1(a)(iii)(B) shall
be limited to the net decrease in actual Income Tax liability realized by the
Sellers, taken as a whole, by reason of allocations to Sellers of tax items as a
result of a determination described in Section 9.1(a)(iii)(B).  Such net
decrease in Income Tax liability shall be determined for each relevant taxable
year taking into account correlative adjustments for such year and will be
payable periodically only if, as and when such net reduction is actually
realized by the Sellers.  The indemnification required pursuant to
Section 9.1(a)(iii)(B) shall be reduced by any reduction in such net decrease in
Income Tax liability if, as and when realized by the Sellers as so determined,
either by reduction of payments in respect of such indemnification otherwise due
from Sellers or, if no such payment is due, by way of reimbursement to Sellers.

 

(3)           For purposes of determining the amount of any indemnification
pursuant to a Tax Claim, (i) for purposes of indemnification pursuant to
Section 9.1(a)(iii)(A), the actual Income Tax liability incurred by the Buyer
for each relevant taxable year shall be compared with the Income Tax liability
that the Buyer would have incurred determined by assuming the breach of
Section 3.1(e)(iii) had not taken place; (ii) for purposes of indemnification
pursuant to Section 9.1(a)(iii)(B), the actual Income Tax liability incurred by
the Sellers for each relevant taxable year and shall be compared with the Income
Tax liability that the Sellers would have incurred determined by assuming the
allocations required pursuant to a determination described in
Section 9.1(a)(iii)(B) were not made; (iii) the Buyer or the Sellers, as

 

5

--------------------------------------------------------------------------------

 

the case may be, shall be deemed to have “actually incurred” or “actually
realized” an increase or decrease in Income Tax liability to the extent that,
and at such time or times as, the amount of Income Taxes payable by such Person
or Persons are increased or decreased or reduced (including in connection with
the resolution of an Income Tax audit, examination or contest);
(iv) determination of the amount of any such increase or decrease in Income Tax
liability shall be based on the Tax Returns filed by the Buyer or the Sellers,
as the case may be, subject to any subsequent adjustments to those Tax Returns
(provided that nothing herein shall give any Person the right to obtain or
review such Tax Returns, and provided further that Buyer and each Seller agree
to provide as part of any Tax Claim or determination of any limitation of a Tax
Claim pursuant to Section 9.1(a)(iii), a worksheet summary of the relevant
information from such Tax Returns, certified by an authorized officer as
correctly reflecting such Tax Returns); (v) upon written request of the Sellers
or the Buyer, respectively, the other shall provide appropriate support for its
calculation of an increase, decrease, net increase, or net decrease in Income
Tax liability or reduction thereof in accordance herewith; (vi) the Buyer or the
Sellers, as the case may be, may, at its or their sole cost and expense and at
its or their discretion require the other to provide support for its or their
calculation of its or their increase, decrease, net increase or net decrease in
Income Tax liability or reduction thereof in the form of a certificate of a
nationally recognized accounting firm attesting to the accuracy of the
calculation (which accounting firm shall be selected by the party that so bears
the cost and expense of obtaining such a certificate and be reasonably
acceptable to the other party, who shall be entitled to object on the ground
that the selected firm is either party’s auditor); (vii) the tax liability of
Sellers and Buyer shall be determined by reference to the affiliated group of
corporations of which each of the Seller and Buyer, respectively is or shall
become a member if consolidated returns shall be filed for such affiliated group
for U.S. federal income tax purposes; and (viii) the state and local income tax
consequences to Buyer and Sellers of the event giving rise to a Tax Claim
pursuant to Section 9.1(a)(iii)(A) and (B) shall be determined by assuming that
such consequences are identical to the U.S. federal income tax consequences for
such Person, but with a state and local income tax rate (before giving effect to
the U.S. federal income tax consequences of the payment of such taxes, which
shall be deemed for purposes of calculations pursuant to this Section 9.3(b) to
have been made) for Sellers of 2.0 percent and for Buyer of 7.0 percent.

 

(4)           In the event that (i) Buyer makes a Tax Claim for indemnification
pursuant to Section 9.1(a)(iii)(B), or (ii) Buyer notifies the Sellers that the
IRS has given written notice to Buyer that it has made the determination
described in Section 9.1(a)(iii)(B), or (iii) the IRS gives written notice to
any of the Sellers that it has made the determination described in
Section 9.1(a)(iii)(B) (in which case Sellers will promptly notify Buyers in
writing within a reasonable time period), then at the request of Buyer, Sellers
promptly will take reasonable actions to claim any federal income Tax benefits
reasonably available to Sellers as a consequence of such determination,
provided, unless the IRS has issued a final partnership administrative
adjustment that is binding upon Sellers, that Sellers shall have received an
opinion reasonably acceptable to Sellers of tax counsel reasonably acceptable to
Seller selected by Buyer to the effect that there is a reasonable basis for
claiming such Income Tax benefits (and in the case of an appeal from an adverse
determination, an opinion from such counsel to the effect that there is
substantial authority for believing such adverse determination will be reversed
or substantially modified upon appeal in a manner that would allow the Sellers
to obtain such Income Tax benefits) and the Sellers shall seek such Income Tax
benefits in the forum and in the manner of Sellers’ choosing considering,
however, in good faith such request as the Buyer shall

 

6

--------------------------------------------------------------------------------

 

make concerning the most appropriate forum in which to proceed and as to other
matters related to such claim for Income Tax benefits.  Notwithstanding anything
hereunder to the contrary, but subject to Sellers’ obligation set forth in the
following sentence to treat certain foregone Income Tax benefits and detriments
as actually realized by Sellers, Sellers shall have full control over any such
action and shall determine, in their sole discretion, the nature of all actions
to be taken in connection with any claim for such Income Tax benefits, including
whether to pursue or forego any administrative proceedings, provided, however,
that the Sellers’ counsel shall consult in good faith with the Buyer’s counsel
in the action seeking such Income Tax benefits and shall keep counsel reasonably
informed regarding such proceedings.  Nothing contained herein shall require the
Sellers to take any position on their Tax Returns or filings or to take any
other action or continue any such actions or proceedings in order to obtain any
Income Tax benefits, and Sellers may cease to seek any such Income Tax benefits
that it would otherwise be required to seek hereunder had this and the preceding
sentence not been included in this Agreement, if, in each case, the Sellers
treat any such foregone Income Tax benefits (as reduced by any correlative
Income Tax detriments) that would have resulted from claiming such Income Tax
benefits for all purposes of this Section 9.3(b) as an amount that was obtained
by Sellers.  Sellers shall not be required to pursue any appeal to the United
States Supreme Court.

 

9.4           Third Person Claims.

 

(a)           In order for a party to be entitled to any indemnification
provided for under this Agreement in respect of, arising out of or involving a
claim or demand made by any third Person against the Indemnified Party, such
Indemnified Party must notify the Indemnitor in writing, and in reasonable
detail, of the third Person claim promptly after receipt by such Indemnified
Party of written notice of the third Person claim.  Thereafter, the Indemnified
Party shall deliver to the Indemnitor, within five (5) calendar days after the
Indemnified Party’s receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the third
Person claim.  Notwithstanding the foregoing, should a party be physically
served with a complaint with regard to a third Person claim, the Indemnified
Party must notify the Indemnitor with a copy of the complaint within five (5)
calendar days after receipt thereof and shall deliver to the Indemnitor within
five (5) calendar days after the receipt of such complaint copies of notices and
documents (including court papers) received by the Indemnified Party relating to
the third Person claim (or in each case such earlier time as may be necessary to
enable the Indemnitor to respond to the court proceedings on a timely basis). 
The failure of any Indemnified Party to give notice or copies as required by
this Section 9.4(a) shall not affect such Indemnified Party’s rights under this
Section 9 except to the extent such failure is actually prejudicial to the
rights and obligations of the Indemnitor.

 

(b)           Subject to Section 9.4(d)(i) in the event of the initiation of any
legal proceeding against the Indemnified Party by a third Person, the Indemnitor
shall have the sole and absolute right after the receipt of notice and written
acknowledgement to the Indemnified Party of the Indemnitor’s obligations to
indemnify, defend and hold harmless the Indemnified Party pursuant to
Section 9.1(a) with respect to any and all Indemnifiable Losses incurred by the
Indemnified Party arising from any such proceeding, at its option and at its own
expense, to be represented by counsel of its choice and to control, defend
against, negotiate, settle or otherwise deal with any proceeding, claim, or
demand which relates to any loss, liability or damage indemnified against
hereunder; provided, however, that the Indemnified Party may participate in

 

7

--------------------------------------------------------------------------------

 

any such proceeding with counsel of its choice and at its expense.  The parties
hereto agree to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such legal proceeding, claim or demand.  Such
cooperation shall include the retention and the provision of records and
information which is reasonably relevant to such third Person claim, and making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.  To the extent
the Indemnitor elects not to defend such proceeding, claim or demand, and the
Indemnified Party defends against or otherwise deals with any such proceeding,
claim or demand, the Indemnified Party may retain counsel, at the expense of the
Indemnitor, and control the defense of such proceeding.  Neither the Indemnitor
nor the Indemnified Party may settle any such proceeding if such settlement
obligates the other party to pay money, to perform obligations or to admit
liability without the written consent of the other party, such consent not to be
unreasonably withheld or delayed; provided that the consent of the Indemnified
Party shall not be required if the Indemnitor agrees in writing to pay any
amounts payable pursuant to such settlement and such settlement includes an
unconditional release of the Indemnified Party.

 

(c)           Notwithstanding anything in this Agreement to the contrary, the
following provisions shall control the conduct of any contest relating to a Tax
Claim (a “Tax Contest”).  If an adjustment shall be proposed by the IRS in a
notice of proposed adjustment that, if sustained, would result in a Tax Claim
for which the Sellers could be required to indemnify the Buyer under this
Agreement, the Buyer agrees promptly to notify the Sellers in writing of such
proposed adjustment; provided, however, that the failure of Buyer to give the
notice promptly as required by this Section 9.4(c) shall not affect the Buyer’s
rights under this Section 9 except to the extent such failure is actually
prejudicial to the rights and obligations of the Sellers.  If, (i) within 30
days after receipt of such notice the Sellers shall request that the Buyer
contest such proposed adjustment and (ii) the Sellers shall have received at
their cost an opinion reasonably acceptable to the Buyer of tax counsel
reasonably acceptable to the Buyer, to the effect that there is a reasonable
basis for contesting the proposed adjustment (and, in the case of an appeal from
an adverse determination, an opinion from such counsel, to the effect that there
is substantial authority for believing that such adverse determination will be
reversed or substantially modified upon appeal in a manner favorable to the
taxpayer) the Buyer shall contest such proposed adjustment in the forum of the
Buyer’s choosing, considering, however, in good faith such requests as the
Sellers shall make concerning the most appropriate forum in which to proceed and
other matters related to such contest.  Notwithstanding anything herein to the
contrary:

 

(1)           The Buyer shall have full control over any Tax Contest and shall
determine in its sole discretion the nature of all actions to be taken in
connection with any such Tax Contest, including the right to pursue or forego
any administrative proceedings; provided, however, that, the Buyer’s counsel
shall consult in good faith with the Sellers’ counsel in the contest of any
claim and shall keep such counsel reasonably informed regarding such Tax
Contest.

 

8

--------------------------------------------------------------------------------

 

(2)           The Buyer shall not be required to pursue any Tax Contest not
involving a Tax Claim under clause (B) of Section 9.1(a)(iii) unless (x) the
Sellers shall have agreed in writing to pay and shall pay the Buyer on demand
all reasonable costs and expenses that the Buyer shall incur in connection with
contesting such proposed adjustment, including, without limitation, reasonable
attorneys’, accountants’ and investigatory fees and disbursements (but only
until such time, if any, that the Buyer receives a written request from the
Sellers to discontinue the Tax Contest of such proposed adjustment), (y) the
proposed adjustment could result in a payment by the Sellers, taking into
account the amount of all similar and logically related adjustments with respect
to the transactions contemplated by this Agreement that could be raised in an
audit of any other taxable year of the Buyer (including any future taxable year)
not barred by the statute of limitations under section 6501(a) of the Code, plus
any interest, penalties and additions to tax that could be imposed with respect
to all such adjustments, of at least $125,000, and (z) if the Buyer shall
determine to pay the tax proposed and sue for a refund, the Sellers shall
advance to the Buyer on an interest free basis and with no additional net
after-tax cost to the Buyer sufficient funds to pay the tax and interest,
penalties and additions to tax payable with respect thereto.  Nothing contained
in this subsection (ii) shall require (i) the Buyer to contest a proposed
adjustment that it would otherwise be required to contest if the Buyer (A)
waives the payment by the Sellers of any amount that might otherwise be payable
by the Sellers under this Agreement by way of indemnity in respect of such
proposed adjustment and (B) pays to the Sellers any amount of taxes, interest,
penalties and additions to tax previously paid or advanced by the Sellers
pursuant to this Agreement with respect to such proposed adjustment, or (ii) the
Buyer to pursue any appeal to the United States Supreme Court.

 

(d)

 

(i)            (Notwithstanding anything in this Agreement to the contrary,
Buyer shall have the sole right, with counsel reasonably acceptable to Sellers,
to defend any claim that is a Non-Assumable Claim and that is indemnifiable
pursuant to Section 9.1, and Sellers shall not be entitled to assume the defense
thereof.  With respect to any Non-Assumable Claim that Buyer is defending,
Sellers shall be permitted to participate at their own expense in the defense of
such Non-Assumable Claim but shall not be entitled to assume the defense
thereof.  Except as otherwise provided in Section 9.4(d)(iii), Sellers, on the
one hand, and Buyer, on the other hand, shall each bear fifty percent (50%) of
the Expenses incurred by Buyer in defending any Non-Assumable Claim.

 

(ii)           Buyer shall conduct the defense of all Non-Assumable Claims
diligently and in good faith, shall keep Sellers timely apprised of the status
of all Non-Assumable Claims, and shall notify Sellers promptly of any material
developments relating to any Non-Assumable Claim.  Without limiting the
foregoing, no more frequently than once a fiscal quarter, Buyer shall provide
Sellers with a written report

 

9

--------------------------------------------------------------------------------

 

summarizing in reasonable detail the status of any pending Non-Assumable Claims
(including a summary of any material settlement discussions).

 

(iii)          Buyer shall consult with Sellers prior to proffering any offer of
compromise to a third party claimant in respect of a Non-Assumable Claim for
which Sellers have acknowledged sole liability to Buyer.  Notwithstanding the
foregoing, in the event (A) Buyer proffers any offer of compromise to a third
Person claimant in respect of a Non-Assumable Claim for which Sellers have
acknowledged sole liability to Buyer and Sellers have not approved such offer in
writing, or (B) Buyer settles or compromises a Non-Assumable Claim for which
Sellers have acknowledged sole liability to Buyer and Sellers have not approved
such settlement or compromise in writing, Sellers shall not be bound, in each
case, by any prior acknowledgement of liability to Buyer in respect of such
Non-Assumable Claim or the amount of the resultant Indemnifiable Loss, and
Sellers shall be deemed to have reserved all of their rights to contest their
liability with respect to such Non-Assumable Claim (including the reasonableness
of any such settlement).

 

(iv)          Upon the receipt by Buyer of a written offer of compromise
relating to a Non-Assumable Claim that includes an unconditional release of each
Buyer Group Member and requires only (A) the payment of money for which Sellers
have sole liability (a “Monetary Settlement”) or (B) a Monetary Settlement and
(1) action by Sellers or any of their Affiliates or (2) action by Buyer that, in
Buyer’s judgment, does not adversely impact the ongoing business of Buyer or any
of its Affiliates and does not require any admission of liability or wrongdoing
on the part of Buyer or its Affiliates (collectively, a “Non-Assumable Claim
Offer”), Buyer shall promptly inform Sellers of such Non-Assumable Claim Offer,
together with a description of the material terms thereof.  Sellers shall have
the right to terminate their liability for all Indemnifiable Losses in respect
of any Non-Assumable Claim that is the subject of such a Non-Assumable Claim
Offer upon Sellers’ irrevocable agreement to pay the amount contained in such
Non-Assumable Claim Offer and to take any action require to be taken by Sellers
or any of their Affiliates by the terms of such Non-Assumable Claim Offer.  Upon
receipt by Buyer of (x) the amount contained in such Non-Assumable Claim Offer
and payment by Sellers of all other Indemnifiable Losses suffered or incurred by
any Buyer Group Member in respect of such Non-Assumable Claim, and (y) an
executed agreement of Sellers and the third Person claimant agreeing to the
non-cash terms of such Non-Assumable Claim Offer including an unconditional
release of each Buyer Group Member, Sellers shall have no further liability to
any Buyer Group Member in respect of such Non-Assumable Claim.

 

(v)           At any time during the defense by Buyer of a Non- Assumable Claim,
Sellers shall have the right to require Buyer (A) to proffer to any third Person
claimant under such Non-Assumable Claim a Non-Assumable Claim Offer, and (B) if
such Non-Assumable Claim Offer is accepted by such third Person claimant, to
settle such Non-Assumable Claim on the terms of such Non-Assumable Claim Offer
and in accordance with the last sentence of clause (iv) above.

 

10

--------------------------------------------------------------------------------

 

9.5           Limitations.

 

(a)           Any indemnity payment hereunder shall be treated for Tax purposes
as an adjustment of the Purchase Price to the extent such characterization is
proper or permissible under relevant Tax Law, including court decisions,
statutes, regulations and administrative promulgations.  Buyer shall prepare any
amended Form 8594 that is required as a result of such treatment and shall
deliver a copy of such form to Sellers no later than thirty (30) days before the
due date of their Tax Returns for the relevant taxable years.

 

(b)           Except for remedies that cannot be waived as a matter of Law and
injunctive and provisional relief, and claims for Indemnifiable Losses or
contribution arising under any Environmental Law, if the Initial Closing occurs,
this Section 9 (and the provisions of Sections 6.1 and 6.2 with respect to the
matters covered therein) shall be the exclusive remedy for breaches of this
Agreement (including any covenant, obligation, representation or warranty
contained in this Agreement or in any certificate delivered pursuant to this
Agreement) or otherwise in respect of the sale of the Assets contemplated
hereby.

 

(c)           No party hereto shall have any liability for any incidental,
special, exemplary, multiple, punitive or consequential damages (including loss
of profit or revenue) or any equitable equivalent thereof or substitute
therefore suffered or incurred by any Buyer Group Member or Sellers Group
Member, as the case may be; provided, however, that all such damages asserted by
a third Person against an Indemnified Party shall be Liabilities subject to
indemnification by the Indemnitor hereunder.

 

9.6           Mitigation.  Each of the parties agrees to take all reasonable
steps to mitigate their respective Indemnifiable Losses in accordance with
applicable Law.

 

9.7           Subrogation.  Upon making any payment to the Indemnified Party for
any indemnification claim pursuant to this Section 9, the Indemnitor shall be
subrogated, to the extent of such payment, to any rights which the Indemnified
Party may have against any third-parties with respect to the subject matter
underlying such indemnification claim and the Indemnified Party shall assign any
such rights to the Indemnitor; provided, that the Indemnitor shall not be
subrogated as to rights against an Obligor unless the Obligor has satisfied all
of its obligations under its applicable Portfolio Assets.

 

9.8           No Offset.  The obligations hereunder of Sellers, on the one hand,
and Buyer, on the other hand, are independent of the obligations of the other
hereunder and shall not be subject to any right of offset, counterclaim or
deduction.

 

11

--------------------------------------------------------------------------------

SCHEDULE 9.1(a)(iii)(B)

List of Entities treated as Partnerships for federal Income Tax purposes

 

 

 

FEIN

 

ACRO-
NYM

 

PARTNERS
(Tax Matters Partner)

 

TOTAL

 

MDFC/Mitsui Leasing Partnership

 

 

 

 

 

BCC-ELC

 

Mitsui

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33-0695795

 

MCE

 

50.0

%

50.00

%

 

 

 

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deep Sea Investors, L.L.C.

 

 

 

 

 

BCC-ELC

 

GATN

 

Heller

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13-3860286

 

R&B

 

34.03

%

44.70

%

21.27

%

 

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Aircraft 1997- 1, LLC

 

 

 

 

 

BCC-ELC

 

GECC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

06-1499111

 

GE2

 

95.0

%

5.00

%

 

 

 

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cleveland Steel Facility, LLC

 

 

 

 

 

BCC-ELC

 

Heller

 

Transam.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33-0838502

 

LTV

 

40.0

%

40.00

%

20.0

%

 

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Petrobras XXXIV Trust LLT

 

 

 

 

 

BCC-ELC

 

FPSO

 

CIT Group

 

GECC

 

Transam.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

52-7017915

 

PET

 

37.82100

%

18.91

%

11.34630

%

22.46700

%

9.45520

%

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portland Tube Facility, LLC

 

 

 

 

 

BCC-ELC

 

(GECC)
Heller

 

The
CIT Group

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

95-4801301

 

WTC

 

50.0

%

23.00

%

27.0

%

 

 

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cylinder Head Line (Title owned by BCC-ELC)

 

 

 

 

 

BCC-ELC

 

UPS

 

Transamerica

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

61-1431776

 

CYL

 

47.68

%

38.05

%

14.27

%

 

 

 

 

100.0

%

 

BCC-ELC owns 100% membership interests in the following LLCs, Since these are
single member LLCs they are disregarded for income tax purposes:

 

Assembly and Test Line, LLC

 

 

 

ATL

 

100.00

%

Crankcase Finishing End Line, LLC

 

 

 

CFL

 

100.00

%

 

--------------------------------------------------------------------------------

 

SCHEDULE 10

 

SPECIAL WARRANTY

 

10.1         CFS Portfolio Loss Warranty.  Sellers acknowledge that a material
inducement in Buyer’s decision to enter into this Agreement and to purchase the
Assets from Sellers is Sellers’ agreement to provide the special warranty
provided for in this Schedule 10.  In furtherance of the foregoing, Sellers
hereby jointly and severally agree to make payments in accordance with this
Section 10 in the event of a Cumulative Net Loss (the “Portfolio Performance
Warranty”), such payments to commence starting with the first calendar quarter
following the calendar quarter during which Sellers stop providing any services
pursuant to the Transition Services Agreement.  As the sole and exclusive remedy
for Sellers’ breach of the Portfolio Performance Warranty, Sellers shall pay to
Buyer for each calendar quarter an amount necessary (the “Tentative Portfolio
Performance Warranty Payment”) to cause the aggregate amount of all Tentative
Portfolio Performance Warranty Payments to equal the Tentative Portfolio
Performance Warranty Amount.

 

10.2         Tentative Portfolio Performance Warranty Amount; Payment
Procedures.

 

(a)           “Tentative Portfolio Performance Warranty Amount” shall mean an
amount equal to the sum of: (i) Eighty percent (80%) of any Quarterly Net Loss
to the extent that such Quarterly Net Loss results in or increases the
Cumulative Net Loss, but does not cause the Cumulative Net Loss to exceed
$150,000,000; plus (ii) One hundred percent (100%) of any Quarterly Net Loss to
the extent such Quarterly Net Loss causes the Cumulative Net Loss to increase
above $150,000,000, but not above $275,000,000.  Notwithstanding any provision
contained in this Agreement to the contrary, none of Sellers will be required to
pay any Tentative Portfolio Performance Warranty Amount attributable to
Cumulative Net Loss in excess of $275,000,000.

 

(b)           If as of the end of any one or more calendar quarters there shall
have occurred both a Quarterly Net Loss and a Quarterly Net Gain, then the
Tentative Portfolio Performance Warranty Amount shall be recalculated as of the
end of each such quarter, and Buyer shall promptly refund (the “Tentative
Portfolio Performance Warranty Payment Refund”) to Sellers any excess of the
aggregate amount of Tentative Portfolio Performance Warranty Payments made by
Sellers over the Tentative Portfolio Performance Warranty Amount as so
recalculated; provided, however, in no event shall the sum of all amounts so
refunded by Buyer exceed the sum of all Tentative Portfolio Performance Warranty
Payments previously received by Buyer under this Section 10.

 

(c)           Payment of the Tentative Portfolio Performance Warranty Payment by
Sellers and the Tentative Portfolio Performance Warranty Payment Refund by Buyer
shall be based upon the information provided to Sellers in the Gain/Loss
Statement provided pursuant to Section 1.9, and Sellers shall have the same
review period and opportunity to provide a Notice of Disputed Amount (if any)
and a Notice of Disputed Gain or Loss (if any) as provided in Section 1.9. 
Sellers or Buyer (as the case may be) shall pay all amounts not pertaining to
any Disputed Amount or Disputed Gain or Loss within seven (7) Business Days
following the thirty (30) day review period.  To the extent that there are
Disputed Amounts or Disputed Gain or

 

1

--------------------------------------------------------------------------------

 

Loss, the resolution of such disputes shall be resolved using the procedures set
forth in Section 1.9.

 

10.3         Final Calculation and Payment.  The final calculation of Tentative
Portfolio Performance Warranty Amount (if any) and Tentative Portfolio
Performance Warranty Amount Refund (if any) and payment, if any, in connection
therewith shall be made for the calendar quarter following the calendar quarter
in which the last Specified Portfolio Asset is disposed of.

 

10.4         No Duplicative Warranty Payments.  Notwithstanding any provisions
in this Agreement to the contrary, no Tentative Portfolio Performance Warranty
Payment made by Sellers pursuant to this Schedule 10 shall be duplicative of any
indemnification payments made by Sellers pursuant to the provisions of
Schedule 9.

 

2

--------------------------------------------------------------------------------

 

Schedule 13.1

 

Business Asset Permitted Encumbrances

 

None.

 

--------------------------------------------------------------------------------

 

Schedule 13.2

 

Designated Energy Financing and Lease Assets

 

Lease Schedule

 

Customer

 

NAV ($) 4/30/2004

 

10112001001

 

BRASPETRO OIL SERVICES CO.

 

$

28,906,721

 

0035659-001

 

BRASPETRO OIL SERVICES CO.

 

37,220,178

 

0035659-002

 

BRASPETRO OIL SERVICES CO.

 

9,585,502

 

0035459-001

 

PRIDE AMETHYST LIMITED

 

19,581,564

 

 

 

Total

 

95,293,964

 

 

--------------------------------------------------------------------------------

EXHIBIT A

ACCOUNTING PRINCIPLES

 

The following accounting principles (including accounting methods, practices and
procedures) shall be used for purposes of preparing the Adjusted Book Value of
the Assets, the Draft Closing Book Value of the Assets Statement and the Final
Closing Book Value of the Assets Statement.

 

If the accounting principles (including accounting methods, practices and
procedures) set forth herein do not specifically address a particular matter
necessary to prepare Adjusted Book Value of the Assets, the Draft Closing Book
Value of the Assets Statements or the Final Closing Book Value of the Assets
Statement, then they shall be supplemented in accordance with GAAP, applied
consistently with the past practices and procedures of Boeing Capital as set
forth in the Financial Statements.

 

The Final Closing Book Value of the Assets Statement shall (i) reflect all
Assumed Liabilities assumed by Buyer and all Specified Financing and Lease
Assets, Equity Assets, Assets Held For Sale or Lease transferred to Buyer and
the existence of which are known on the date the McGladrey Findings are
delivered to Sellers and Buyer pursuant to Section 1.6(c) and, in each case,
which, as of the Effective Time (defined as of 5:00 p.m., May 31, 2004) were
assets or liabilities, as the case may be, of a type properly to have been
reflected on the Final Closing Book Value of the Assets Statement, irrespective
of whether such asset or liability is deemed not to be material (ii) remove any
goodwill associated with the Business and any other asset or liability which
should not have been reflected on the Final Closing Book Value of the Assets
Statement including any such assets or liabilities that were, in fact, reflected
on the Draft Closing Book Value of the Assets Statement (including any Excluded
Assets or Excluded Liabilities), irrespective of whether any such asset or
liability is deemed not to be material and (iii) with respect to the Equity
Assets transferred to Buyer, shall only reflect the actual ownership interests
transferred to Buyer on or prior to the Final Closing Date and shall not reflect
any interest in such Equity Assets that are subject to the Option Agreement.

 

Applicable NAV of Equity Assets shall not include any value in excess of the
Applicable NAV related to the underlying Specified Finance and Lease Asset
(without duplication).

 

Direct Finance Leases.  At lease commencement, Sellers (the “BCC Group”) records
the aggregate future minimum lease payments, estimated residual value of the
leased equipment, deferred initial direct costs and unearned income (“net
investment”).  Income is recognized over the life of the lease to approximate a
level rate of return on the net investment.  Residual values, which are reviewed
periodically, represent the estimated amount to be received at lease termination
from the disposition of leased equipment. Actual residual values realized could
differ from these estimates.

 

Notes and Other Receivables.  At note commencement, the BCC Group records the
note receivable and any unamortized discounts. Interest income is accrued and
related discounts are amortized at a constant rate over the related term of the
note.  Impaired notes are notes on which the BCC Group estimates it may not be
able to collect all amounts due under the contractual terms, excluding
insignificant delays and shortfalls.  A specific impairment

 

1

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allowance is recorded for collateral dependent notes and other receivables based
on the difference between the estimated net fair value of the collateral and the
carrying value of the note and other receivables.

 

Equipment Under Operating Leases, Net of Accumulated Depreciation.  Equipment
leased under operating leases is recorded at cost and depreciated over the lease
term to an estimated residual or salvage value, on a straight-line basis. 
Revenue from rentals is recorded to income on a straight-line basis over the
term of the lease.

 

Equity Assets.  Partnership and joint venture interests in which the BCC Group
does not have a controlling interest or a majority ownership are recorded as the
BCC Group’s proportionate share of the interests held by such partnerships or
joint ventures in their underlying loans or leases.

 

Equipment Held for Sale or Re-lease, Net of Accumulated Depreciation.  When
collateral is repossessed or returned in satisfaction of a receivable, the
carrying value of the receivable, if greater than the estimated fair value of
the asset, is written down against the allowance for losses to the estimated
fair value of the asset, less costs to sell, and is transferred to equipment
held for sale or re-lease.  Equipment held for sale is subsequently carried at
the lower of cost or estimated fair value less costs to sell.  Equipment held
for re-lease is depreciated over the remaining useful life of the equipment to
an estimated residual or salvage value, on a straight-line basis.  Fair value
for equipment held for sale is determined by using both internal and external
equipment valuations, including information developed from the sale of similar
equipment in the secondary market.

 

Asset Valuation.  The BCC Group periodically assesses the fair value of assets
that it owns, including equipment under operating leases and assets held for
sale or re-lease, and collateral on receivables to determine if the fair value
is less than the carrying value. Differences between carrying value and fair
value are considered in determining the allowance for losses on receivables and,
in certain circumstances, recorded as impairment for owned assets.

 

The BCC Group uses the average published fair value from multiple sources based
on the type and age of the aircraft to determine the fair value of aircraft.
Under certain circumstances, the BCC Group’s judgment is based on the attributes
of the specific aircraft or equipment to determine fair value, usually when the
features or use of the aircraft varies significantly from the more generic
aircraft attributes covered by outside publications.

 

Impairment Review for Equipment Under Operating Leases, Held for Sale or
Re-lease.  The BCC Group reviews its equipment under operating leases, held for
sale or re-lease for impairment when events or circumstances indicate, and no
less than annually, that the carrying amount of these assets may not be
recoverable. An asset held for sale is considered impaired if the carrying value
exceeds the fair value less costs to sell. An asset under operating lease or
held for re-lease is considered impaired when the expected undiscounted cash
flows over the remaining useful life is less than the carrying value.

 

The BCC Group uses various assumptions when determining the expected
undiscounted cash flow of these assets. These assumptions include:

 

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•    lease rates,

 

•    lease term(s),

 

•    periods in which the asset may be held in preparation for a follow-on
lease,

 

•    maintenance costs,

 

•    remarketing costs, and

 

•    the remaining useful life of the asset.

 

The determination of expected lease rates is generally based on outside
publications.  The BCC Group uses historical information and current economic
trends to determine the remaining assumptions.  When the BCC Group determines
that an asset is impaired, the amount of impairment loss recorded is the excess
of carrying value over fair value.

 

Allowance for Losses on Receivables.  The allowance for losses on receivables is
a valuation account used to provide for potential impairment of receivables in
the BCC Group portfolio.  The balance is an accounting estimate of probable but
unconfirmed losses in the receivables portfolio.  The allowance for losses on
receivables relates to two components of receivables:  (a) specifically
identified receivables that are evaluated individually for impairment and
(b) pools of receivables that are evaluated for impairment.

 

The BCC Group reviews a receivable for impairment when, based on current
information and events, it is probable that the BCC Group will be unable to
collect amounts due according to the original contractual terms of the
receivable agreement, without regard to any subsequent restructurings.  Factors
considered in assessing uncollectibility include a customer’s extended
delinquency, requests for restructuring and filings for bankruptcy.  The BCC
Group determines a specific impairment allowance based on the difference between
the carrying value of the receivable and the estimated fair value of the related
collateral.

 

The BCC Group reviews the adequacy of the general allowance attributable to the
remaining pool of receivables by assessing both the collateral exposure and the
applicable default rate.  Collateral exposure for a particular receivable is the
excess of the carrying value over the applicable fair value of the related
collateral.  A receivable with an estimated fair value in excess of the carrying
value is considered to have no collateral exposure.  The applicable default rate
is determined using two components:  customer credit ratings and
weighted-average remaining contract term. Credit ratings are identified for each
customer in the portfolio.  Customer credit ratings are updated based on current
rating agency information or our internal credit reviews.

 

For each credit rating category, the collateral exposure is multiplied by an
applicable historical default rate, yielding a credit-adjusted collateral
exposure.  Historical default rates are those published by Standard & Poor’s
reflecting both the customer credit rating and the weighted-average remaining
contract term.  The sum of the credit-adjusted collateral exposures generates an
initial estimate of the general allowance.  In recognition of the uncertainty of
the ultimate loss experience and relatively long duration of the portfolio, a
range

 

3

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of reasonably possible outcomes of the portfolio’s credit-adjusted collateral
exposure is calculated by varying the applicable default rate by approximately
plus or minus 15%.  The allowance recorded represents the best estimate within
the resulting range of credit-adjusted collateral exposure, factoring in
considerations of risk of individual credits, current and projected economic and
political conditions and prior loss experience.

 

Lease Residual Values.  Equipment under operating lease is carried at original
equipment cost less accumulated depreciation and is depreciated to estimated
residual value of the equipment at the end of lease term using the straight-line
method over the lease term.  Financing leases are recorded at the aggregated
future minimum lease payments plus estimated residual values of the equipment at
the end of lease term less unearned finance income. The BCC Group performs
periodic reviews of the estimated residual values and, for financing leases,
recognizes other than temporary impairments in the current period.

 

Nonaccrual Receivables.  Income recognition on an accrual basis is generally
suspended for leases and notes and other receivables at the earlier of when a
full recovery of income and principal becomes doubtful or when such account
becomes 90 days delinquent.  Income recognition is resumed when the lease or
notes and other receivables become contractually current and performance is
demonstrated to be resumed.  To the extent that income is accruable under
contractual terms, any cash received in the interim is recorded to income.

 

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EXHIBIT B

 

MASTER ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This MASTER ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made by
and among Boeing Capital Corporation, BCC Equipment Leasing Corporation,
McDonnell Douglas Overseas Finance Corporation and Boeing Capital Loan
Corporation (collectively, “Seller”), and General Electric Capital Corporation,
AVN Air, LLC, Heller Financial Leasing, Inc., CEF 2002 Aircraft, LLC and CEF
2002, LLC (collectively, “Purchaser”), as of [[                   , 2004]].  All
capitalized terms used and not otherwise defined herein shall have the meanings
given to them in the Purchase and Sale Agreement, dated as of May     , 2004, by
and among Seller and General Electric Capital Corporation (the “Purchase and
Sale Agreement”).  This Assignment is made with reference to the following
facts:

 

RECITALS

 

(a)           Pursuant to the terms of the Purchase and Sale Agreement, each
Purchaser (pursuant to the exercise by General Electric Capital Corporation of
its rights pursuant to Section 12.4 thereunder) has agreed to (i) purchase from
Seller, all of Seller’s right, title and interest in and to each of the
Specified Portfolio Assets listed on the attached Schedule A set forth opposite
each such Purchaser’s name (collectively, the “Transferred Assets”) and (ii)
assume from Seller, all of Seller’s obligations under each of the Transferred
Assets, in each case on the terms and for the consideration set forth in the
Purchase and Sale Agreement.

 

(b)           Pursuant to the Purchase and Sale Agreement, Seller desires to
sell, transfer, assign and set over to Purchaser (i) all of Seller’s right,
title and interest in and to, and (ii) all of Seller’s obligations under, the
Transferred Assets.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Seller hereby sells, transfers, assigns and sets
over to Purchaser, and Purchaser expressly purchases and assumes from Seller,
subject to the terms of the Purchase and Sale Agreement and with only such
representations and warranties as are expressly stated in the Purchase and Sale
Agreement, all of Seller’s right, title and interest in and to, and each and
every obligation under, the Transferred Assets.  The terms of this Assignment
shall not supersede the terms of the Purchase and Sale Agreement.

 

[This space intentionally left blank ]

 

1

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Each of Purchaser and Seller hereby agree that it shall execute each agreement,
instrument, certificate or other instrument as the other party shall from time
to time reasonably request for purposes of consummating the transactions
contemplated by this Assignment and the Purchase and Sale Agreement, including,
without limitation, any master assignment and assumption agreement, bill of
sale, individual bill of sale for any one or more Transferred Assets, allonge,
stock power, servicing agreement, transition services agreement, FAA document,
assumption agreement, consent agreement, purchase agreement, title document,
quiet enjoyment agreement, non-disturbance agreement,  powers of attorney or
other similar documentation.

 

 

BOEING CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

MCDONNELL DOUGLAS OVERSEAS FINANCE
CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

BOEING CAPITAL LOAN CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

AVN AIR, LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

HELLER FINANCIAL LEASING, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

CEF 2002 AIRCRAFT, LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

CEF 2002, LLC

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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SCHEDULE A

 

[SPECIFIED PORTFOLIO ASSETS – TO BE LISTED ON A TRANSACTION BY
TRANSACTION BASIS BY OBLIGOR]

 

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EXHIBIT C

 

Agreed Audit Procedures

 

Loans

 

•       Select a sample of loans and perform the following*:

 

•        Trace the following information from the data tape or operating system
(where applicable) to the original loan documentation file.

 

•        Borrower’s name

 

•        Original loan balance (Funding Amount)

 

•        Interest rate (Index and Spread)

 

•        Loan term

 

•        Periodic payment amount

 

•        Due date

 

•        Equipment type and model & year

 

•        Loan start date

 

•        Balloon Payment

 

•        Equipment Location (state, city & county)

 

•        Confirm terms including remaining payments, outstanding balance and
other pertinent information.

 

•        Recalculate the unearned income amount from the last payment received
and agree to the data tape.

 

•

 

•        Validate property tax filing and payment for most recent year.

 

•        Reconcile all data tape ending balances to the general ledger.

 

Financing Leases

 

•       Select a sample of direct finance leases and perform the following*:

 

•        Trace the following information from the data tape or operating system
(where applicable) to the original lease documentation file.

 

•        Lessee’s name

 

•        Capitalized costs

 

•        Interest rate (for quasi lease only)

 

•        Lease term

 

•        Monthly payment amount

 

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•        Monthly due date

 

•        Equipment type and model & year

 

•        Security Deposit

 

•        Lease start date

 

•        Residual value

 

•        End of lease purchase option or Early Buyout Option (EBO)

 

•      If lease has EBO, determine if EBO is greater than NAV at the EBO date

 

•        Equipment location (state, city & county)

 

•        ID tax rate being used and recalculate monthly/quarterly use tax

 

•        Validate property tax reporting base amount

 

•        If non-taxable for sales tax, inspect sales/use tax exemption
certificate

 

•        If non-taxable for property tax, inspect property tax exemption
certificate

 

•        Determine how the sales/use tax is computed: Upfront, or rental stream

 

•        If paid upfront, inspect proof of payment (e.g. invoice, title)

 

•        Confirm terms including remaining payments, outstanding balance and
other pertinent information.

 

•        Recalculate the unearned income amount from the last payment received
and agree to the data tape.

 

•        Recalculate lease classification under SFAS No. 13, as amended.

 

•        Reconcile all data tape ending balances to the general ledger.

 

Operating Leases

 

•       Select a sample of operating leases and perform the following*:

 

•        Trace the following information from the data tape or operating system
(where applicable) to the original lease documentation file.

 

•        Lessee’s name

 

•        Original equipment cost including capitalized costs

 

•        Lease term

 

•        End of lease purchase option or Early Buyout Option (EBO)

 

•      If lease has EBO, determine if EBO is greater than NAV at the EBO date

 

•        Monthly payment amount

 

•        Monthly due date

 

•        Security Deposit

 

•        Equipment type and model & year

 

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•        Lease start date

 

•        ID tax rate being used and recalculate monthly/quarterly use tax

 

•        If non taxable for sales tax, inspect the sales/use tax exemption
certificate

 

•        If non-taxable for property tax, inspect property tax exemption
certificate

 

•        Residual value

 

•        Equipment Location (State, City & County)

 

•        Confirm terms including remaining payments and other pertinent
information.

 

•        Trace the last payment received for each lease from the check, lockbox
report or cash report to the data tape.

 

•        Recalculate the monthly depreciation amount and the accumulated
depreciation balance from the data tape.

 

•        Recalculate any accrued and earned rents in accordance with the
underlying lease contract.

 

•        Recalculate lease classification under SFAS No. 13, as amended.

 

•        Determine how the sales/use tax is computed: Upfront or rental stream.

 

•        If paid upfront, inspect proof of payment (e.g. invoice, title)

 

•        Confirm who is responsible for reporting and paying property tax (e.g.
lessor or lessee).

 

•        Validate property tax filing and payment for most recent year.

 

•        Validate property tax reporting base amount.

 

•        Reconcile all data tape ending balances to the general ledger.

 

Security Deposits

 

•       Compare the amounts in the data tape to the original file documentation.

 

•       Reconcile to the general ledger

 

•       Determine state location for each security deposit.

 

Other

 

•        For any suspense or unapplied cash balances

•      Obtain account analysis and reconcile to General Ledger

•      Identify suspense and unapplied cash to specific customer accounts

•        Obtain schedules of other assets purchased and liabilities assumed

•        Reconcile to the general ledger.

•        Test the accounting principles, as discussed in the APA, for consistent
application.

 

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* The number of loans and leases to be tested will be selected using a
nonstatistical sample and will approximate 60 in total.

 

4

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EXHIBIT D

 

BILL OF SALE

 

BILL OF SALE, dated              , 200    , from Boeing Capital Corporation, BCC
Equipment Leasing Corporation, McDonnell Douglas Overseas Finance Corporation
and Boeing Capital Loan Corporation (collectively, the “Seller”) to General
Electric Capital Corporation, AVN Air, LLC, Heller Financial Leasing, Inc., CEF
2002 Aircraft, LLC and CEF 2002, LLC (collectively, the “Purchaser”).  All
capitalized terms used and not otherwise defined herein shall have the meanings
given to them in the Purchase and Sale Agreement, dated as of May       , 2004,
by and among Seller and General Electric Capital Corporation (the “Purchase and
Sale Agreement”).

 

WHEREAS, pursuant to the Purchase and Sale Agreement, Seller agreed to sell,
assign, and deliver to Purchaser, among other things, all of the Specified
Portfolio Assets owned by Seller and listed on Schedule I hereto (the
“Transferred Assets”).

 

NOW, THEREFORE, in consideration of payment by Purchaser to Seller on or prior
to the date hereof of the amounts set forth in the Purchase and Sale Agreement,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, Seller does hereby sell, assign, and set over to Purchaser, all of
the Seller’s right, title and interest in and to each of the Transferred Assets
set forth opposite each Purchaser’s name on Schedule I hereto. 

 

To Have and to Hold the same unto Purchaser, its successors and assignors
forever, absolutely and unconditionally, and Seller hereby warrants, covenants
and agrees that it will defend the title of the Transferred Assets conveyed by
this Bill of Sale against all persons making any claim thereto in accordance
with and subject to the terms of the Purchase and Sale Agreement.

 

This Bill of Sale shall be governed by and construed in accordance with the laws
of the State of New York.

 

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IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed as of the
date first written above.

 

 

 

BOEING CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

 

MCDONNELL DOUGLAS OVERSEAS FINANCE
CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

 

 

BOEING CAPITAL LOAN CORPORATION

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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SCHEDULE I

 

 

SPECIFIED PORTFOLIO ASSETS BEING TRANSFERRED

 

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Exhibit E

 

I.              OVERVIEW

 

The purpose of this policy is to provide guidance on accounting for impairment
of certain assets and the implications of asset restructurings under generally
accepted accounting principles.

 

II.            POLICY GUIDELINES

 

A.            Loans

 

Recognition of Impairment

 

A loan is deemed impaired when, based on current information and events*, it is
probable (80% or greater likelihood) that GECF will be unable to collect all
amounts due (principal and interest) under the contractual terms of the loan
agreement. FAS 5 provides the basic guidance for recognition of impairment
losses for all receivables.  FAS 114 provides more specific guidance on
measurement and disclosure for a subset of the population of loans.  This subset
consists of loans that are identified for evaluation and that are individually
deemed to be impaired (because it is probable that the creditor will be unable
to collect all the contractual interest and principal payments as scheduled in
the loan agreement).  It also includes all loans that are restructured in a
troubled debt restructuring involving a modification of terms.

 

Multiple loans with the same customer shall be evaluated separately for purposes
of impairment testing and disclosure as either impaired or nonearning.

 

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* Existing “environmental” factors (for example, existing industry,
geographical, economic, and political factors) should be considered as part of
current information and events.

 

 

Measurement of Impairment

 

Impairment can be measured in 2 ways:

 

•      Present value of the expected future cash flows discounted at the loan’s
effective interest rate. The effective interest rate of a loan is the rate of
return implicit in the loan (that is, the contractual interest rate adjusted for
any net deferred loan fees or costs, premium, or discount existing at the
origination or acquisition of a loan).

 

•      All available information reflecting past events and current conditions
should be considered when developing the estimate of future cash flows.  All

 

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[g75991ka6image002.jpg]

 

available information includes existing “environmental” factors (for example,
industry, geographical, economic, and political factors).

•      Estimated costs to sell shall also be included if those costs are
expected to reduce the cash flows available to repay the loan.

•      The weight given to the evidence should be commensurate with the extent
to which the evidence can be verified objectively.

•      The likelihood of possible outcomes should be considered in developing
the best estimate of expected future cash flows.

 

•      The fair value of the loan’s collateral. If foreclosure is probable, the
fair value of the collateral must be used to measure impairment

 

Refer to the Reserves Policy for additional instructions regarding the
calculation of general and specific reserves. (See Exhibit A)

 

 

Loan Modifications/Restructures

 

a.             Determination of Troubled Debt Restructuring

 

A restructuring of debt is considered a troubled debt restructuring (TDR) under
SFAS No. 15 if the creditor, for economic or legal reasons related to the
debtor’s financial difficulties grants a concession to the debtor that it would
not otherwise consider.  The concession may extend from an agreement between the
debtor and creditor, or it may be imposed by a law or court.

 

If the effective interest rate is reduced primarily to reflect a decrease in
market rates to maintain a relationship with a debtor that can readily obtain
funds from other sources at the current interest rate, a troubled debt
restructuring may not be involved.

 

Accounting for all loan modifications/restructures must be documented in a
Memorandum for Record (MFR) and signed off by GECF’s Controller’s Office.

 

A TDR includes (but not necessarily limited to):

 

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1.     Transfer from debtor to creditor of receivables from third parties, real
estate or other assets to satisfy fully or partially a debt. (includes a
transfer from resulting from foreclosure or repossession).

2.     Issuance of equity interest to the creditor

3.     Modification of terms of debt such as any one or combination of the
following:

 

•      Reduction of the stated interest rate for the remaining original life of
the debt

•      Extension of the maturity date or dates at a stated interest rate lower
than the current market rate for new debt with similar risk

•      Reduction (absolute or contingent) of the fact amount or maturity amount
of the debt as stated in the instrument or other agreement.

•      Reduction (absolute or contingent) of accrued interest

 

Recognition and Measurement of Impairment

 

Impairment is required to be assessed when GECF becomes aware of the borrower’s
financial difficulties.  A loan may be identified as impaired due to a pending
restructuring but not require a reserve.

 

Estimated cash flows may consider a proposed restructuring in determining the
amount of the impairment to record.  Cash flows must be discounted at the loan’s
original effective interest rate, not the rate provided in the restructured
agreement.  If the loan is a variable rate loan, the rate shall be fixed (for
purposes of calculating impairment) at the rate in effect at the date the loan
meets the impairment recognition criteria noted in (A) above.  Projections of an
anticipated rate change may not be made.  Existing FAS 91 capitalized costs and
deferred fees are maintained since the loan is not considered a new loan.  Fees
received in connection with a troubled debt restructuring shall be applied as a
reduction of the recorded investment in the loan and additional FAS 91 costs
shall be expensed.

 

Disclosure of the Loan as Impaired

 

A loan that has a specific reserve recorded against it under FAS 114 must be
disclosed as an impaired loan. A loan that is part of a troubled debt
restructuring is considered an impaired loan even if there is no reserve
requirement.   If circumstances change that enable release of the reserve or if
a portion of the account is written off and the remainder is deemed collectible
under FAS 114, it may be removed from the impaired loan schedule provided that
the account is considered current based on its original terms.  An impaired loan
that has been restructured in a TDR involving modification of terms need not be
included in the impaired loan schedule if (a) the restructuring agreement
specifies an interest rate equal to or greater than the rate that the creditor
was willing to accept at the time of the restructuring for a new loan with
comparable risk and (b) the loan is not impaired based on the terms specified by
the restructuring agreement

 

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Disclosure of the Loan as Nonearning

 

Nonearning loans are those (either principal, interest or both) that are 90 days
or more delinquent (or for which collection has otherwise become doubtful).  A
loan may be removed from the nonearning schedule provided the loan is current
per its original terms or in case of a TDR (a) the restructuring agreement
specifies an interest rate equal to or greater than the rate that the creditor
was willing to accept at the time of the restructuring for a new loan with
comparable risk and (b) the loan is not nonearning based on the terms specified
by the restructuring agreement (see exception under Day 2 Accounting for
Impaired Loans below).

 

In cases where repossession is deemed probable and the loan is otherwise
nonearning, it may not be removed from the nonearning schedule until we have
possession of the collateral.

 

Reduced earning accounts must be recorded on the nonearning schedule (all times)
since collection of the original amount is doubtful.

 

A loan may be impaired but not listed on the nonearning schedule. This is
possible when a lender is not expected to recover the loaned amount per the
stipulated terms of the agreement due to a temporary liquidity crisis of the
borrower but does not expect to lose their principal or interest.

 

Day 2 Accounting for Impaired Loans

 

Income accrual should stop at the earlier of the time at which collection of an
account becomes doubtful or the account becomes 90 days delinquent. Interest
income on impaired loans is to be recognized as cash is collected.

 

If a loan is restructured and does not require principal or interest payments
for a period of months but interest continues to accrue (so called PIK
interest), as a general rule,  no income should be recognized and the loan shall
continue to be classified as a nonearning receivable until at least interest
payments are received.  However, cash flows resulting from future payments of
PIK interest may be considered in determining the reserve requirement under FAS
114.

 

Loans that have been restructured to a below market interest rate will have a
FAS 114 reserve recorded representing the difference between the loan balance
and the estimated future cash flows discounted at the loans effective rate.  As
payments are made on the

 

4

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restructured loan, the valuation allowance may be adjusted so as to produce a
yield based on the original interest rate.

 

Subsequent to the initial measurement of impairment, if there is a significant
change in the amount or timing of an impaired loan’s expected future cash flows,
impairment shall be recalculated following the same procedures described above.

 

 

Troubled Debt Restructuring – Example

 

At December 31, 2001, GECF and XYZ Company agree to modify the terms of their
existing loan agreement because it is unlikely that XYZ Company (the borrower)
will be able to make its contractual loan payments during the next few years due
to severe cash flow difficulties arising from the closure of a significant
production plant.  The restructuring agreement is going to be formally signed
between the two parties on January 5, 2002.  The recorded investment in the loan
is $12.5 MM and it has a historical effective interest rate, based on the loan’s
original contractual interest rate, of 9.5% and is due to mature on December 31,
2005.

 

Under the terms of the restructured agreement, cash flows of $7.5 MM, $3.75 MM
and $3.75 MM are due at the end of 2003, 2004 and 2005 (the original contractual
maturity of the loan) respectively.  The payment made at the end of 2003 is
intended to represent the aggregate of principal and interest repayments for
both 2002 and 2003. At the time of the restructuring, GECF believes it is
probable that XYZ will be able to make all of the restructured payments.   The
terms of the restructuring also require the borrower to issue preferred stock to
GECF in an amount equal to the cash flows forgiven under the restructuring. 
However, the preferred stock has negligible value because the borrower has a
negative net worth.

 

 

Response:

 

In the example above, there are two points in time to consider.  First, at
December 31, 2001, GECF must assess whether the loan is impaired.  At that time,
the restructuring agreement is not yet in place, however GECF is aware of the
borrower’s economic situation and restructuring discussions are under way and
finalization is imminent.  The loan would be impaired if based on current
information and events, it is probably that GECF will be unable to collect all
amounts due according to the contractual terms of the loan agreement.  As used
in FAS 114, all amounts due according to the contractual terms means that both
the contractual interest payments and the contractual principal payments of a
loan will be collected as scheduled in the loan agreement.

 

5

--------------------------------------------------------------------------------

 

Under SFAS No. 114, ¶15, “all available evidence should be considered in
developing the estimate of expected future cash flows”.  In this case, in making
its assessment of impairment, GECF should take into account the expected future
cash flows, including any evidence provided to date from the ongoing efforts to
restructure the loan.  The loan’s impairment would be calculated based on the
difference between the recorded investment and the measure of the impaired loan
(which in this example is calculated as the net present value of the cash flows
expected to be received, because the loan is not deemed to be collateral
dependent).  The impairment charge at December 31, 2001 would be $0.77 MM ($12.5
MM less $11.73MM — the present value of the three cash flows received discounted
using the effective interest rate of 9.5%).

 

The second point in time to consider is January 5, 2002.  At that point, the
loan is considered a troubled debt restructuring (TDR).  Based on SFAS No. 15,
¶2, insofar as GECF “for economic or legal reasons related to [XYZ Company’s]
financial difficulties grants a concession to [XYZ Company] that it would not
otherwise consider”.

 

Under SFAS No. 114, impairment is measured based on the present value of
expected future cash flows discounted at the loan’s effective interest rate,
based on the original contractual rate, not the restructuring agreement. 
However, because an impairment measurement was performed at December 31, 2001
based on the expected future cash flows under the restructuring plan, no further
impairment is required to be recorded at this point in time.

 

SFAS No. 15, as amended by SFAS No. 114, requires a creditor to account for a
troubled debt restructuring involving a partial satisfaction or modification of
terms as prescribed in SFAS No. 114, except that, first, the recorded investment
in the loan shall be reduced by the fair value of assets received.  In this
case, the preferred stock is deemed to have a negligible fair value; therefore,
the recorded investment is not adjusted prior to the impairment charged
calculated above.  However, if the preferred stock had value, the recorded
investment would have been reduced by the preferred stock’s fair value.  This
new value would form the basis for the impairment assessment above.

 

In the above example, GECF restructured the loan to defer payments, including
the payment of interest, into future periods (referred to as “Paid in Kind”
(PIK) interest) received interest paid in kind (“PIK”) as it received a lump-sum
payment at the end of 2003 representing interest and principal for payments for
both 2002 and 2003.  During 2002, interest should not be accrued on this loan
and the loan should be classified as non-earning for the year.  Only when
payment is received at the end of 2003 should any related interest income be
recorded.

 

6

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B.            Finance Leases

 

Recognition of Impairment

 

There are two components of a finance lease with different impairment provisions
as follows:

 

•      Minimum Lease Payments Receivable (credit risk) – Although not included
in the scope of FAS 114, a finance lease is considered impaired when based on
current information and events, it is probable (80% or greater likelihood) that
GECF will be unable to collect all amounts due under the contractual terms of
the lease agreement.

•      Residual Value (asset risk) – The estimated residual value shall be
reviewed quarterly by major collateral type and if the review results in a lower
estimate than previously established, a determination must be made as to whether
the decline in estimated residual value is judged to be other than temporary
(controller’s office needs to be notified of the results). A presumption exists
that an other than temporary impairment shall have occurred for residual value
exposures that are within 5 quarters of the end of the lease term.

 

Impairment Measurement

 

Refer to the procedures under Impairment Measurement under Section I (Loans) and
below under Troubled Lease Restructurings.  Estimated cash flows must be
discounted using the interest rate implicit in the lease.

 

Additionally, residual impairment is measured as the difference between the
revised estimate and the original estimate.  The new estimate shall be
substituted for the old and the resulting reduction in the net investment shall
be recognized as a loss in the period in which the estimate is changed.  Upward
adjustments shall not be made.

 

Troubled Lease Restucturings

 

Although finance leases do not meet either the scope of FAS 15 or the scope of
FAS 114, we believe the concessions made to the lessee as a result of the
lessee’s financial difficulties should be accounted for similarly to a loan
(since finance leases are similar in nature to a loan).

 

A key consideration in analyzing the accounting implications of a lease
restructuring is whether the restructuring results in a new lease agreement. 
Below are the guidelines for determining a new lease versus a lease
modification.

 

Lease Modification includes:

 

•      A change in minimum lease payments without an extension or renewal

 

7

--------------------------------------------------------------------------------

 

•      Action:  Step 1:  Reconsider the classification of the lease as of the
original inception date.  Use the revised payments, but keep all other
assumptions constant.  Step 2:  If lease classification would have changed, the
changes result in a new lease agreement.  Determine classification of the new
agreement using current assumptions (may be different from Step 1)

 

•      Accounting Implications:  Modified lease agreement is a finance lease: 
discount the revised cash flows using the original implicit rate.  The decrease
in balance is recorded as a valuation allowance.

 

•      Modified lease agreement is an Operating Lease:  lessor records the asset
on the books at the lower of its original cost, present fair value or carrying
amount (which would be the lease receivable).  Any difference in value
recognized immediately

 

 

New Lease includes:

 

•      Any change that extends the lease term

 

•      Action:  New lease agreement includes the remaining term of the original
lease agreement plus the extension and is reclassified using current assumptions
(residual value, economic life, implicit rate, etc.)

 

•      Accounting Implications:  If new agreement classified as a finance
lease:  discount the revised cash flows using the original implicit rate.  The
decrease in balance is recorded as a valuation allowance.

 

•      If the new agreement is classified as an operating lease, lessor records
the asset on the books at the lower of its original cost, present fair value or
carrying amount (which would be the lease receivable).  Any difference in value
recognized immediately.

 

•      If the modification of provisions of a finance lease results in its
classification as an operating lease, residual value insurance may be purchased
for purposes of classifying the agreement as a finance lease based on the
modified terms.

 

 

Disclosure as Nonearning

 

A lease shall be considered a nonearning asset when payments are delinquent for
90 days or greater (or collection has otherwise become doubtful)

 

8

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If a lease is restructured and is classified as a “new” lease agreement under
FAS 13, it shall not be included on the Nonearning Schedule.  The terms of a
modified lease shall be examined – a modified lease shall be excluded from the
Nonearnings Schedule if the modified lease terms are similar to or more
favorable than the lease terms the lessor would normally lease at the time of
restructuring and also the lease payments are being made according to the
restructured agreement.

 

Disclosure as Impaired

 

There is no requirement to report finance leases that are considered impaired.

 

 

Operating Leases

 

Impairment Recognition

 

Assets subject to operating lease shall be subject to impairment testing under
FAS 144’s “held and used” model which requires impairment recognition if the
carrying amount of the asset is not recoverable and exceeds its fair value.  The
carrying amount of an asset is not recoverable if it exceeds the sum of the
undiscounted cash flows expected to result from the use and eventual disposition
of that asset.  This assessment is to be performed at the lowest level of
identifiable cash flows that are largely independent of the cash flows of other
asset groups.  For purposes of this policy, the customer level will be used to
make this assessment.  Therefore, cash flows from multiple leases with the same
customer may be grouped together to make this assessment.

 

Estimates of future cash flows used to test the recoverability of a long-lived
asset shall include only the future cash flows (i.e., cash inflows, less
associated cash outflows) that are directly associated with and that are
expected to arise as a direct result of the use and eventual disposition of the
asset.

 

Under FAS 144, we are required to test an asset or group for recoverability
whenever circumstances indicate that the entity may not be able to recover the
asset’s carrying amount.  For example, such circumstances may include:

 

•      A significant decrease in market price

•      A significant adverse change in the extent or manner in which the asset
is being used or its physical condition

•      A significant adverse change in legal factors or in the business climate
that could affect its value or an adverse action or assessment by a regulator

•      A current expectation that it is more likely than not that the asset will
be sold or disposed of significantly before the end of its previously estimated
useful life.

 

9

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The businesses shall make an annual assessment of their operating lease
portfolio (including ELTOOL held for use) and report to GECF’s Office of the
Controller the results of that assessment (whether impairment testing was
necessary on any lease agreements, and if so, the results)

 

Further, the business shall perform an annual review of the asset’s useful life
and the residual value assigned to the asset (based on collateral type).  Any
resulting downward adjustments shall be reflected prospectively in depreciation
expense.

 

Impairment Measurement

 

Impairment is measured as the excess of the carrying amount of the asset over
its fair value.  The fair value of a long-lived asset shall be based on quoted
market prices.  If no quoted market prices are available, consult with GECF
Corporate accounting staff to determine an alternate basis for fair value.

 

 

C.            Investments

 

Impairment Recognition

 

The accounting model that applies to the investment will be a factor in
recognizing impairment.  Most investments are classified under APB Opinion 18 or
under FAS 115.

 

APB Opinion 18

 

APB 18 applies to nonmarketable equity securities that are accounted for under
the cost method and under the equity method.  Paragraph 19h of APB 18 discusses
impairment as follows:

 

A loss in value of an investment which is other than a temporary decline should
be recognized.  Evidence of a loss in value might include, but would not
necessarily be limited to, absence of an ability to recover the carrying amount
of the investment or inability of the investee to sustain an earnings capacity
which would justify the carrying amount of the investment.  A current fair value
of an investment that is less than its carrying amount may indicate a loss in
value of the investment.  However, a decline in the quoted market price below
the carrying amount or the existence of operating losses is not necessarily
indicative of a loss in value that is other than temporary.  All are factors to
be evaluated.

 

Thus, the principal focus of APB 18 is recovery based.  In other words, one
needs to determine whether investment recovery is possible within a reasonable
period of time.  Cash flow analysis may be performed to determine
recoverability:

 

10

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•      All available information reflecting past events and current conditions
should be considered when developing the estimate of future cash flows.  All
available information includes existing “environmental” factors (for example,
industry, geographical, economic, and political factors).

•      Estimated costs to sell shall also be included if those costs are
expected to reduce the cash flows available to recover the investment.

•      The weight given to the evidence should be commensurate with the extent
to which the evidence can be verified objectively.

•      The likelihood of possible outcomes should be considered in developing
the best estimate of expected future cash flows.

 

The determination of a reasonable period of time involves judgment and
impairment analyses under APB 18 should be presented to the GECF’s controller’s
office.

 

FAS 115

 

FAS 115 applies to all investments in debt securities (as distinquished from
lending arrangements under FAS 114) and investments in marketable equity
securities.  FAS 115 requires use of a fair value model to determine other than
temporary impairment.  Marketable equity and debt securities are to be evaluated
based on quoted market prices.  Marketable debt securities are further evaluated
to determine whether the contractual principal and interest will be collected.

 

For investments in bonds and other investments with fixed maturity amounts,
market declines may be considered temporary unless the evidence indicates that
the investments will be disposed of before they mature or the carrying value of
the security will not be realized.  There are four criteria that should be
considered in the evaluation of potential impairment:

 

•      The issuer is in default or default appears imminent

•      Market value has declined substantially below cost for reasons other than
increases in interest rates in general

•      In order to meet projected cash flow needs or settlement of certain
liabilities, the security will likely be disposed of at a price below fair
market value

 

Recovery of value is key when performing an impairment assessment.  For equity
securities, this refers to the likelihood of experiencing an increase in price
back to the book value recorded.  In the case of debt securities, it refers to
the likelihood of receiving all the interest and face value per contract terms. 
A reasonable timeframe for recovery is taken to be 18 months.  Where
recoverability is in doubt, an other-than-temporary impairment has occurred and
the business must write the book value of such an

 

11

--------------------------------------------------------------------------------

 

investment down to the fair value (which becomes the new book value).  The
resulting realized loss is reflected in the earnings of the period it was
incurred.

 

Impairment Measurement

 

Investments under the APB 18 model shall have their potential impairment
measured as the estimated shortfall in the expected cash flows when compared to
the recorded investment.  As noted, the model is not a fair value model,
therefore, recovery of the investment in a reasonable period of time using
undiscounted cash flows is acceptable.

 

Investments under the FAS 115 model shall have their potential impairment
measured as the amount by which the estimated fair value of the investment is
below the recorded book value.  Quoted market prices are used for marketable
equity and debt securities.  Regarding nonmarketable debt securities, a
reasonable estimate of fair value should be made using a discounted cash flow
model.  Assumptions should reflect realistic expectations of growth, capital
requirements to facilitate that growth as well as a reasonable period in which
the investment is expected to be recovered.  Further, the discount rate used
should not be the coupon rate on the security, rather it should be the rate that
is commensurate with the with the current level of risk given the current
environment.  In most instances, if there has been a deterioration in the
industry or in the specific business, the discount rate used should be higher
than the coupon rate.  Selection of the discount rate is a matter of judgment.

 

Investments must be assessed quarterly to determine whether impairment has
become other than temporary.  Watchlists should be maintained and tollgates
should be established and if they are not met, a determination should be made
whether impairment should be recalculated based on revised estimates.  An MFR
must be completed for all impairment issues and must be submitted to the
Controller’s Office at least 2 weeks prior to quarter end so that we have ample
time to review the information with Corporate.

 

 

D.            Securitizations

 

Background:

 

Investments in debt securities that are backed by securitized assets and all
retained interests in GE securitizations that are subject to prepayment or
credit risk such that GE may not recover substantially all of its recorded
investment are required to be accounted for under EITF 99-20.   Under EITF
99-20, 1) Impairment: unrealized losses are deemed to be other-than-temporary
(impairment charged to earnings under SFAS No. 115) when an adverse change in
the timing or amount of cash flows is deemed to have occurred.  “Other Than
Temporary Impairment” losses become a permanent adjustment to the “Amortized
Cost” (basis) of the security. 2) Income recognition: determined on a
prospective level yield basis.

 

12

--------------------------------------------------------------------------------

 

Application of the Impairment Test

 

•      Determine Fair Value of the security

•      Compare the Fair Value to the amortized cost.  For available for sale
securities, unrealized gains or losses are recorded on the asset side of the
ledger with a corresponding entry to Other Comprehensive Income (OCI Equity),
net of tax.  Deferred taxes are provided for the unrealized gains or losses.

•      Determine whether an other than temporary impairment exists.  Are any
unrealized losses the result of an adverse change in the timing or amount of
cash flows (other than for interest rate resets on plain vanilla variable rate
securities)?  If due in part to an adverse change, the entire unrealized loss is
taken as a charge against current period earnings, net of tax.  Otherwise, the
unrealized loss remains in OCI.

 

 

Step 1 – Determine Fair Value of the security (FV)

 

•      The best estimate of fair value is a price quoted in an actively traded
market.  If such a market exists, that price should be used as the fair value.

•      If a price in an actively traded market is not available, alternative
methods should be used including obtaining a bid from a broker or dealer that
makes a market in this or similar securities.

•      If a credible bid cannot be obtained from a broker/dealer (illiquid
issue), then an internal valuation should be done that employs a discounted cash
flows approach using market assumptions.  Such a method should use assumptions
reasonably expected to be used by a third party willing to purchase the subject
security.  The following illustrates steps that might be followed to perform
such an internal valuation:

 

A.  Obtain Market yields for each rating and WAL of security.  This is usually
done through an Investment Bank with a Trading Desk and familiarity with the
asset type and deal structure. This part of the process is quite subjective and
different banks have been known to provide significantly different yields.

 

B.  Calculate the PV of the current estimated cashflows using the latest
assumptions and the yield obtained from the Investment Bank.  For this step, for
the Floating Rate Securities, use the current estimate of the floating rate
index .

 

C.  This calculated PV is the estimate of the Fair Value of the security

 

13

--------------------------------------------------------------------------------

 

Step 2.  Compare the Fair Value to the amortized cost.

 

Compare the fair value from step 1 to the amortized cost of the security. 
Amortized cost is the net book value (excluding unrealized gains or losses) and
includes the par value, any purchase/issue premium or discount, any accretion of
yield taken to-date (if separately accounted for) and any other-than-temporary
impairment previously taken.  Unrealized gains and losses on Available For Sale
securities are recorded to OCI.  Unrealized gains are present when the FV is
greater than the amortized cost basis (regardless of whether there is an other
than temporary impairment, or not), and unrealized losses are present when there
is no other than temporary impairment (see Step 3), but the FV is lower than the
amortized cost basis.

 

Step 3 – Determine whether an other than temporary impairment exists

 

The following computations should be made (excerpted from D+T publication,
Securitization Accounting under FASB 140 (2nd Edition, January 2002):

 

1 ] Calculate the present value of the newly estimated remaining cash flows
discounted at the last rate used to recognize accretable yield on the security.
Changes in cash flow resulting from resets on plain-vanilla floating rate
securities are not taken into account in this test provided the security is not
a super-floater or an inverse floater.

2 ] Compare the present value in step 1 to the present value of the previously
estimated remaining cash flows discounted at the last rate used to recognize
accretable yield on the security [adjusted for cash receipts during the
intervening period].

3 ] If the present value has decreased (i.e., step 1 result is less than step 2
result), then an adverse change and an other-than-temporary impairment has
occurred.  The EITF 99-20 impairment analysis must be done on a security- by
-security basis, not on an overall portfolio basis. This can cause unfortunate
income statement results if certain securities are deemed to be impaired, while
other securities are appreciating in value.

 

 

Income Recognition

 

•      General rule:  Income is recognized on a level yield basis with
prospective adjustments to the book yield at each quarter point.

•      For securities that have been written down in Step 3 (Impairment taken to
current period earnings and Cost basis written down to current FV), the yield
will be the IRR of the written down cost basis and the current estimate of cash
flows (for vanilla floaters these cashflows would be at the current estimated
floating rates).  This will equal the estimated current market yield on the
securities

 

14

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•      For securities that have no impairment charge taken because either they
passed the Other-than-temporary Impairment test (the PV of the current estimated
cashflows are greater than the PV of the previously estimated cashflows from the
current date forwards) or because they have unrealized gains (FV > Amortized
Cost basis), the revised book yield will be the IRR calculated using the newly
projected cashflows and the current Amortized Cost basis.

 

 

Example of application of EITF 99-20

 

You purchase a B-piece on January 1, 2001 for $106.08.  It has a face amount of
$100 and is also entitled to all of the excess interest from the net coupon on
the loans over the interest paid to the senior class, subject to reimbursing the
senior class for credit losses.

The assumed pre-tax yield at the date of purchase is 10.77% per annum based on
an assumed prepayment rate of 5 CPR and assumed losses of 100 basis points per
annum on the outstanding principal amount of the loans (the “Base Case”).

As of the end of year 1, there are five alternative scenarios presented in the
following table.  The first is tat the base case prepayment, loss and market
yield for the B-piece assumptions do not change.  The other scenario involves an
increase or decrease in one or more of the assumptions as to prepayments,
losses, and market yield for the B-piece.

 

 

 

 

 

 

Base
Case

 

 

 

 

Scenarios for Years 2 through 5

 

ONE

 

TWO

 

THREE

 

FOUR

1

 

Prepayment Assumption

 

5 CPR

 

7 CPR

 

7 CPR

 

3 CPR

 

3 CPR

 

2

 

Credit Loss Assumption

 

100 bp

 

200 bp

 

200 bp

 

50 bp

 

50 bp

 

3

 

Market Yield for B-piece

 

10.77

%

12

%

8

%

12

%

8

%

4

 

Cash Flows to B-piece

 

 

 

 

 

 

 

 

 

 

 

5

 

Year 1

 

$

15.70

 

$

15.70

 

$

15.70

 

$

15.70

 

$

15.70

 

6

 

Year 2

 

$

13.30

 

$

11.19

 

$

11.19

 

$

14.64

 

$

14.34

 

7

 

Year 3

 

$

28.08

 

$

31.70

 

$

31.70

 

$

24.51

 

$

24.51

 

8

 

Year 4

 

$

52.23

 

$

49.24

 

$

49.24

 

$

54.44

 

$

54.44

 

9

 

Year 5

 

$

42.89

 

$

38.52

 

$

38.52

 

$

46.65

 

$

46.65

 

10

 

Total Years 1 thru 5

 

$

152.20

 

$

146.35

 

$

146.35

 

$

155.94

 

$

155.64

 

11

 

Present value of Yr. 2 thru 5 Cash Flows discounted at accretable yield rate of
10.77%

 

$

101.80

 

$

97.75

 

$

97.75

 

$

103.96

 

$

103.96

 

12

 

Fair Value at End of Year 1 (PV of lines 6 thru 9 discounted at market yield in
line 3

 

$

101.80

 

$

94.79

 

$

104.94

 

$

100.74

 

$

111.80

 

13

 

Interest Income-Year 1 (investment of $106/08 times the base case yield of
10.77%)

 

$

11.43

 

$

11.43

 

$

11.43

 

$

11.43

 

$

11.43

 

14

 

Amortized Cost-end of Yr. 1 (initial investment plus interest income less year 1
cash flow

 

$

101.80

 

$

101.80

 

$

101.80

 

$

101.80

 

$

101.80

 

15

 

Has there been a decrease in the present value of estimated remaining cash flows
in line 11?

 

NA

 

YES

 

YES

 

NO

 

NO

 

16

 

Is Fair Value (line 12 below Amortized Cost (line 14)?

 

NO

 

YES

 

NO

 

YES

 

NO

 

17

 

Impairment to be Recorded (if line 15 and 16 are YES then line 14 minus line
12)?

 

NO

 

$

7.01

 

NO

 

NO

 

NO

 

18

 

Adjusted Carrying value at end of Year 1

 

$

101.80

 

$

94.79

 

$

101.80

 

$

101.80

 

$

101.80

 

19

 

Revised Yield for Year 2 (IRR of lines 6 thru 9 discounted back to line 18)

 

10.77

%

12.00

%

9.17

%

11.59

%

11.59

%

20

 

Interest Income-Year 2 (line 19 times line 18)

 

$

10.96

 

$

11.38

 

$

9.34

 

$

11.80

 

$

11.80

 

 

15

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--------------------------------------------------------------------------------

* For reverse –engineers only: The deal structure used to generate the cash
flows going to the B-piece was a pool of five-year loans with a principal amount
of $250 amortizing with five annual payments of $50.  Gross coupon of 12 percent
on the outstanding principal (after charge-offs) less servicing fee of 1 percent
of the outstanding principal (before charge-offs).  The senior class had a
principal amount of $150, an interest rate of 6 percent, and was entitled to 100
percent of all scheduled and unscheduled principal payments and liquidations
until retired.

 

F.             Goodwill

 

Goodwill will be aggregated and evaluated for impairment at the GECF level. 
Individual businesses do not need to perform impairment testing on goodwill.

 

16

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EXHIBIT A

 

Allowance Methodology

 

GECF generally has two types of loss reserves and related previsions as follows:

 

1. General reserves;

2. Specific reserves.

 

The sections that follow detail the methodology employed to calculate each type
of reserve.

 

General Reserves

 

A general reserve is recorded based upon the loss-to-collections (LTC) ratio of
the receivable portfolio. The LTC ratio is calculated as follows:

 

LTC Ratio =

Losses (last 2 years actual + actual year estimated)

 

Collections (last 2 years actual + current year estimated)

 

 

Losses should be net of any recoveries and collections should be gross
collections on outstanding receivables.

 

The LTC ratio is applied to the current net portfolio balance (less any accounts
with specific reserves) to determine the applicable general reserve balance. The
required reserve balance is then compared to the general ledger balance and any
adjustment made to the general ledger reserve balance has a corresponding entry
to loss provisions.  This ratio is periodically updated and is applied to GECF’s
portfolio on an individual portfolio basis.

 

Specific Reserves

 

A specific reserve is recorded when an individual account is deemed impaired and
the finance receivable is greater than $250,000. Ifs specific reserve is
required on a finance receivable in a accordance with either SFAS Nos. 5 or 114
the net investment in such finance receivable is deducted from the portfolio
balance for purposes of the loss to collection reserve balance as discussed
above.

 

Additionally, when an account becomes 90 days delinquent the account is placed
in a non-earning status (NEA) and no income is recognized.

 

In the event an account becomes 360 days delinquent or more, and a specific
reserve has not been recorded, GECF records a general 50% reserve of the
outstanding balance.

 

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EXHIBIT F

 

QUARTERLY GAIN/LOSS STATEMENT

 

A.            Quarterly Gain/Loss Statement should include for the quarter and
on a cumulative basis the following totals for Undisputed Portfolio Gains and
Losses:

 

1.             Current quarter losses

2.             Current quarter gains

3.             Current Quarterly Net Gain or Loss

4.             Cumulative quarterly losses

5.             Cumulative quarterly gains

6.             Cumulative Net Gain or Loss

7.             Net cumulative sharing of gains and losses in accordance with
Section 1.9 and Schedule 10 of the Agreement

8.             Net payment due to (from) Boeing Capital

9.             Cumulative payments to (from) Boeing Capital

 

B.            Quarterly Gain/Loss Statement should include on a quarterly basis
the following information regarding Portfolio Losses for each IER/SPRA where a
loss is indicated:

 

1.             All Deemed Losses

2.             All Realized Losses

3.             For all Deemed Losses, indicate the source of the loss and its
calculation for:

a.             Redeployed Defaulted Assets

b.             Redeployed Non-defaulted Assets

c.             Insurance losses

d.             Defaulted Assets where a Triggering Event has occurred

4.             For all Deemed Losses, indicate the nature of the Triggering
Event.  Losses or adjustment to losses may occur from quarter to quarter and
should not be double counted.

5.             For all Realized Losses, indicate the source of loss and its
calculation for:

a.             Liquidated Defaulted Assets

b.             Liquidated Non-Defaulted Assets

c.             Assets Held for Sale or Lease

d.             Losses where Stipulated Value used for final determination

e.             Insurance losses

f.              Paper Sale Losses

6.             Realized Losses may have originally been Deemed Losses and should
not be double counted and could result in adjustments to previously reported
losses.

 

C.            Quarterly Gain/Loss Statement should include on a quarterly basis
the following information regarding Portfolio Gains for each IER/SPRA where a
gain is indicated:

 

1.             All Deemed Gains

2.             All Realized Gains

3.             For all Deemed Gains, indicate the source of the gain and its
calculation for:

 

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a.             Redeployed Defaulted Assets

b.             Redeployed Non-Defaulted Assets

c.             Insurance Gains

4.             For all Realized Gains, indicate the source of the gain and its
calculation for:

a.             Liquidated Defaulted Assets

b.             Liquidated Non-Defaulted Assets

c.             Liquidated Held for Sale or Lease Assets

d.             Gains where Stipulated Value used to determine amount of gain

e.             Paper Sales

f.              Insurance gains

5.             Realized Gains may have originally been Deemed Gains and should
not be double counted and could result in adjustments to previously reported
Gains.

 

D.            EBO Gains and Imputed Remarketing Costs also should be summarized
for the quarter on the Gain/Loss Statement.

 

E.             Gain/Loss Statement should include description (with supporting
materials) of each Paper Sale (to the extent not covered above), Upgrade,
Collateral or On-Lease Equipment substitution and Roll-up that occurred during
such quarter.

 

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EXHIBIT G

 

Form of

 

NOTICE OF ASSIGNMENT

 

 

 

[Date]

 

[]

 

Dear []:

 

Reference is made to the Equipment Lease Agreement (Lease No. []), dated as of
[] between BCC Equipment Leasing Corporation and [], as amended, supplemented or
modified from time to time (and together with all Individual Equipment Records
executed and delivered pursuant to the terms thereof, the “Lease”).

 

We hereby give notice to you that BCC Equipment Leasing Corporation has agreed
to assign all of its right, title, interest and obligations under the Lease to
[name of purchaser to be completed later] (the “Assignee”) and the Assignee has
agreed to assume all right, title, interest and obligations as lessor under the
Lease.

 

Notwithstanding the foregoing, all future rent payments and all notices and
other information required to be delivered under the Lease shall continue to be
given to BCC Equipment Leasing Corporation until further notice from us.

 

 

Yours truly,

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

By:

 

 

Name:

Title:

 

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Form of

 

NOTICE OF ASSIGNMENT

 

 

 

[Date]

 

[Address of Lessee]

 

Dear [Sir or Madam/Contact Name]:

 

Reference is made to the [Loan Agreement/Loan and Security Agreement/Aircraft
Floorplan Security Agreement/ Promissory Note], dated as of [date] between
Boeing Capital Corporation and [name of borrower] (Loan No. [insert 5-digit
number], as amended, supplemented or modified from time to time, [and together
with the Aircraft Floorplan Standard Terms dated as of [date],](1) the “Loan
Agreement”).

 

We hereby give notice to you that Boeing Capital Corporation has agreed to
assign all of its right, title, interest and obligations under the Loan
Agreement, including any promissory notes issued pursuant to the Loan Agreement,
to [name of purchaser to be completed later] (the “Assignee”) and the Assignee
has agreed to assume all right, title, interest and obligations as lender under
the Loan Agreement.

 

Notwithstanding the foregoing, all future payments, including all payments of
principal and interest, and all notices and other information required to be
delivered under the Loan Agreement shall continue to be delivered to Boeing
Capital Corporation until further notice from us.

 

 

Yours truly,

 

BOEING CAPITAL CORPORATION

 

 

By:

 

 

Name:

Title:

 

 

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(1) Insert only if main document is the Aircraft Floorplan Security Agreement.

 

2

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EXHIBIT H

 

SERVICING AGREEMENT

 

THIS SERVICING AGREEMENT (this “Agreement”), dated as of May       , 2004, is
entered into by and among Boeing Capital Corporation, a Delaware corporation
(“Boeing”), and General Electric Capital Corporation, a Delaware corporation
(“GECC”).

 

W I T N E S S E T H:

 

WHEREAS, GECC is pursuant to a Purchase and Sale Agreement dated as of May
       , 2004 (the “Purchase Agreement”) (capitalized terms contained and not
defined herein shall have the meanings defined in the Purchase Agreement)
purchasing certain assets and assuming certain liabilities related to the
Business of Boeing and certain of its affiliates;

 

WHEREAS, the Purchase Agreement provides that GECC and Boeing shall enter into
this Agreement and, in accordance therewith, the parties hereto desire that GECC
provide certain services, upon the terms and conditions hereinafter set forth;

 

NOW THEREFORE, the parties hereto, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
mutually bound hereby, do hereby agree as follows:

 

1.             SERVICES.  GECC shall provide the services set forth in Exhibit A
hereto (the “Services”) for the term set forth therein for each Service.

 

2.             STANDARD OF CARE.

 

(a)           Except as otherwise expressly provided in this Agreement
(including subsection 2(b)), GECC shall perform the Services with the same
diligence and care as if GECC owned the accounts or equipment being serviced
hereunder.  Notwithstanding anything herein to the contrary, for purposes of the
Citrus World & Warren Assets set forth on Exhibit A, GECC shall have no
obligation to act (or refrain from acting), nor shall GECC have any liability
for its inactions or acts, respectively, if GECC reasonably determines that such
acts or inactions may expose GECC to any liability under or with respect to
Environmental Laws howsoever arising.

 

(b)           GECC and Boeing shall consult from time to time concerning the
operational adequacy of the procedures relating to the Services provided by GECC
and shall make such modifications as are mutually agreed by them.  Within the
foregoing parameters, GECC shall have the right from time to time to alter its
practices, policies and procedures and any such alteration may affect the manner
in which GECC provides the Services.  GECC undertakes to make reasonable good
faith efforts to inform Boeing of material alterations in such practices,
policies and procedures and in the manner in which GECC provides the Services. 
If at any time during the term of this Agreement, GECC proposes to make
modifications to its practices, policies or procedures with respect to any
leasing or loan transactions it originates after the date of this Agreement,
beyond the foregoing parameters, which enhance or improve the practices,
policies or procedures applied by GECC to such transactions, it shall offer to
provide such enhanced or improved practices, policies or procedures to Boeing
with respect to the Accounts at a price equal to its cost of providing such
enhanced or improved practices, policies or procedures to Boeing.  If Boeing
declines to accept such enhanced or improved practices,

 

1

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policies or procedures, then GECC shall continue to provide the Services in
accordance with the practices, policies and procedures used by GECC prior to the
time it improved the practices, policies and procedures applicable to its own
financing transactions except that GECC shall only be required not to
discriminate against Boeing in favor of the Purchased Portfolio Assets.

 

3.             SERVICES FEES AND COSTS.

 

(a)           As consideration for the Services to be performed by GECC, Boeing
shall pay the charges set forth on Exhibit A.  In addition to the other costs
and fees to be paid by Boeing to GECC, Boeing shall pay all reasonable
out-of-pocket costs and expenses incurred in connection with, or as a result of,
GECC providing the Services.

 

(b)           GECC shall invoice Boeing for all amounts due and payable
hereunder. All payments in respect of such invoices, to the extent not
discharged pursuant to Section 3 hereof, shall be made not more than thirty (30)
days after receipt by Boeing of any such invoices.

 

(c)           Upon the reasonable request and with prior written notice, during
normal business hours and in such a manner as shall not unduly interfere with or
interrupt the operation and conduct of GECC’s other businesses, GECC shall
provide representatives of Boeing (including its internal and external auditors)
with reasonable access to (i) the books, records, files and papers, whether in
hard copy or computer format, used or held for use in the provision of the
Services, and (ii) applicable employees of the GECC who provide or manage
provision of the Services, to permit an audit of the Services or any
out-of-pocket costs required to be reimbursed pursuant to this Agreement.

 

4.             ACCESS TO RECORDS.  From the date hereof through the date which
is the later of (a) the date which is at least 4 years after the termination of
the Agreement and (b) the date that the books and records relating to the
Services are returned to Boeing upon receipt of a reasonable request by Boeing,
GECC will provide Boeing and its representatives, at no additional cost to
Boeing, with reasonable access during normal business hours to the books and
records relating to the Services provided for the purposes of inspection or the
preparation of any Tax or Income Tax returns or information statements.  Such
access shall be exercised in such manner as not to interfere unreasonably with
GECC’s operations.  Boeing shall be entitled to make copies of, and extracts
from, such books and records, at its own cost and expense, in such manner as not
to interfere unreasonably with GECC’s operations.   Boeing shall be entitled to
access to the books and records relating to the Services provided for the
purposes of tax audits.

 

5.             EARLY TERMINATION.

 

(a)           Upon fifteen (15) days prior written notice by Boeing to GECC,
Boeing shall have the right to terminate any or all specific Services, whereupon
GECC shall no longer be obligated to provide such Services.

 

(b)           In the event Boeing has failed to timely pay any amounts due and
owing to GECC under this Agreement or Boeing is otherwise in material default of
its obligations under this Agreement, and such failure to pay or material
default remains uncured thirty (30) days after GECC has provided written notice
thereof to Boeing, then, upon five (5) days prior written

 

2

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notice, GECC shall have the right to terminate this Agreement with respect to
all of the Services that, as of the time of such termination, are subject to
this Agreement.

 

(c)           In the event (i) GECC has failed to timely pay any amounts due and
owing to Boeing under this Agreement or GECC is otherwise in material default of
its obligations under this Agreement, and such failure to pay or material
default remains uncured thirty (30) days after Boeing has provided written
notice thereof to GECC, then, upon five (5) days prior written notice, Boeing
shall have the right to terminate this Agreement with respect to all of the
Services that, as of the time of such termination, are subject to this
Agreement.

 

(d)           In the event that Boeing transfers ownership of any of the
accounts or the equipment that are the subject of the Services to any Person
other than an Affiliate of Boeing, GECC shall have no obligation to continue to
provide the Services with respect to such transferred account or equipment.

 

6.             DISCLAIMER OF WARRANTIES.  THE WARRANTIES, CONDITIONS,
REPRESENTATIONS, OBLIGATIONS, LIABILITIES AND REMEDIES OF THE PARTIES SET FORTH
IN THIS AGREEMENT ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND EACH PARTY HEREBY
WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND
LIABILITIES OF THE OTHER PARTY, AND ANY OTHER RIGHTS, CLAIMS AND REMEDIES,
EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMANCE OR DEFECT IN ANY OF THE SERVICES, TRAINING, DATA, DOCUMENTATION
OR OTHER THINGS PROVIDED UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

 

A.            ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

 

B.            ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE; OR

 

C.            ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER
OR NOT ARISING FROM THE NEGLIGENCE OF GECC (BUT EXCLUDING THE GROSS NEGLIGENCE
OR RECKLESS OR WILLFUL MISCONDUCT OF GECC, FOR WHICH NO RIGHTS OF BOEING ARE
WAIVED, LIMITED OR DISCLAIMED HEREUNDER HOWSOEVER);

 

PROVIDED, HOWEVER, THAT THE PARTIES DO NOT WAIVE, LIMIT OR DISCLAIM THEIR RIGHTS
TO ENFORCE THE TERMS OF THIS AGREEMENT.

 

7.             INDEMNIFICATION.

 

(a)           In consideration for the Services to be performed by GECC
hereunder, Boeing shall indemnify and hold harmless GECC (including the
directors, officers, employees and agents of GECC) from and against any and all
Damages (as defined below) suffered or incurred by GECC resulting from, arising
out of, based on or related to GECC’s performance of the Services hereunder
(including, without limitation any action taken, or any failure to take any

 

3

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action, by GECC (i) consistent with Boeing’s past practices or (ii) with the
authorization or at the instruction, direction or requirement of Boeing) and
will promptly reimburse GECC for all Damages as they are incurred in connection
with investigating, preparing or defending any action or claim which gives rise
to a right of indemnification hereunder; provided, however, that GECC shall not
be entitled to indemnification for any Damages to the extent such Damages result
from, arise out of, are based upon or relate to GECC’s willful misconduct or
GECC’s gross negligence (unless such Damages result from, arise out of, are
based upon or relate to any action, or any failure to take any action, by GECC
that is (A) consistent with Boeing’s past practices or (B) rendered by GECC as
authorized or instructed, directed or required by Boeing, in which case such
actions or failures to take any action shall be indemnifiable by Boeing).  Each
party to this Agreement shall use its commercially reasonable efforts to cause
its employees to cooperate with and assist the other party in connection with
any third party claim, action or proceeding for which indemnity is sought
hereunder.

 

(b)           “Damages” means any and all losses (including liquidated damages
and Environmental Losses), costs, claims, damages, liabilities, obligations,
judgments, equitable relief granted, settlements, awards, demands, offsets,
defenses, counterclaims, actions, proceedings, deficiency, fine, penalty or
expense, out-of-pocket costs, expenses and attorneys’ fees (including any such
reasonable costs, expenses and attorneys’ fees incurred in enforcing any right
of indemnification against any indemnitor or with respect to any appeal) and
interest and penalties, if any.  “Environmental Losses” means any and all
losses, costs, damages, liabilities, obligations, judgments, equitable relief
granted, settlements, awards, demands, offsets, defenses, counterclaims,
actions, proceedings, deficiency, fine, penalty or expense, out-of-pocket costs,
expenses and attorneys’ fees (including any such reasonable costs, expenses and
attorneys’ fees incurred in enforcing any right of indemnification against any
indemnitor or with respect to any appeal) and interest and penalties, if any,
the cost of any Remedial Action (voluntarily or involuntarily incurred) arising
under or with respect to any Environmental Law.  “Remedial Action” shall mean
any action required by any Governmental Entity or law to (A) clean up, remove,
treat or in any other way address any Hazardous Substances; (B) prevent the
release of any Hazardous Substances so it does not endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; or (C)
perform pre-remedial studies and investigations or post-remedial monitoring and
care.

 

8.             LIMITATION ON LIABILITY.

 

(a)           Neither GECC nor any of its directors or officers or employees or
agents shall have any liability to Boeing or any other Person for any activity
taken or for refraining from the taking of any activity (A) consistent with
Boeing’s past practices, (B) with the authorization, or at the instruction,
direction or requirement, of Boeing, or (C) due to the failure of Boeing to
approve any expense or costs hereunder.  GECC and any director, officer,
employee or agent of GECC may rely in good faith on any document of any kind
prima facie properly executed and submitted by Boeing respecting any matters
arising hereunder.

 

(b)           Other than with respect to GECC’s failure to remit to Boeing money
that GECC has collected on Boeing’s behalf, GECC’s total liability under this
Agreement is limited to the aggregate amount of the fees and other net amounts
paid to GECC hereunder.  Notwithstanding anything else to the contrary set forth
herein, GECC shall not have any liability

 

4

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to any Person in connection with GECC’s performance of the Services hereunder
unless the Person seeking to recover from GECC has proven that in providing the
Services, GECC failed at that time to use at least the same diligence and care
as that employed by Boeing when the accounts or equipment were owned and/or
serviced by Boeing on the date of this Agreement without regard or reference to
the diligence and care exercised by GECC with respect to financing transactions
owned by it on such date.

 

(c)           Notwithstanding anything to the contrary set forth in this
Agreement, GECC will not be obligated to take any action or fail to take any
action that in the reasonable opinion of GECC, upon the advice of its counsel,
would cause GECC to violate, or otherwise fail to comply with, any applicable
Law or incur any liability to a third Person whether or not Boeing shall have
directed, instructed, requested or otherwise purported to require GECC or any of
its officers, directors, employees or agents to take any action or fail to take
any such action.

 

9.             POWER OF ATTORNEY; AGENCY.  Boeing hereby constitutes and
appoints GECC as its true and lawful agent and attorney in fact, irrevocably,
with the power of substitution and delegation and with full power and authority
to the extent necessary or appropriate for GECC to perform the Services as
contemplated hereby, including the power to make, execute, acknowledge, make
oaths as to, publish, deliver, file and/or record certificates, instruments,
pleadings, motions, other items undertaken in connection with litigation,
bankruptcy or dispute resolution proceeding and documents in the name and on
behalf of Boeing.  GECC and Boeing each agree and confirm that (a) they do not
intend to create any form of partnership or joint venture with the other party
with respect to any of the Services or accounts and equipment serviced
hereunder, (b) they will not hold themselves out to the public as a partner with
the other party hereto or any other person with respect to any of the Services
or accounts and equipment serviced hereunder, (c) they do not have, or intend to
form, a joint profit motive with the other party hereto or any other person with
respect to any of the Services or accounts and equipment serviced hereunder,
(d) they are not authorized to act as, or to hold themselves out as, the agent
of or to otherwise bind the other party hereto with respect to any of the
Services or accounts and equipment serviced hereunder, (e) unless otherwise
required by the Internal Revenue Service or like governmental authority with
jurisdiction over income tax matters, they will not file any partnership or
other joint income tax return reflecting the other party as a partner or joint
venturer with respect to items of income, loss, deduction, or credit
attributable to the Services or accounts and equipment serviced hereunder, and
(f) they will report all items of income, loss, deduction and credit
attributable to the Services or accounts and equipment serviced hereunder on
their own tax returns in a manner consistent with the terms of this Agreement. 
GECC further agrees and acknowledges that Boeing (w) intends to, and will,
exercise its rights and carry out its obligations with respect to its interest
in the accounts and equipment serviced hereunder solely with a view to further
its own best interests, (x) except as expressly provided herein, has not waived,
and does not intend to waive, either (i) their right to encumber, alienate,
mortgage, and otherwise control its interest in each of such accounts and
equipment or (ii) its right to partition each of such accounts and equipment,
(y) is not, and will not be deemed to be, under the control of GECC with respect
to any of the Services or accounts and equipment serviced hereunder, and
(z) will conduct any and all business with respect to the Services or accounts
and equipment serviced hereunder in its own name and not in a joint name or in
the name of GECC.

 

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10.           FORCE MAJEURE.  Neither Party shall have liability for any
interruption of Services, delay or failure to perform under this Agreement when
such interruption, delay or failure results from causes beyond its reasonable
control or from any act or failure to act of the other Party or any Governmental
Authority, or as the result of strikes, lock-outs or other labor difficulties;
riot, insurrection or other hostilities; embargo, fuel or energy shortage, fire,
flood, acts of God, wrecks or transportation delays; acts of war or terrorism;
or inability to obtain necessary labor, materials or utilities as a result
thereof.  In such event, a Party’s obligations hereunder shall be postponed for
such time as its performance is suspended or delayed on account thereof.  Each
Party will promptly notify the other upon learning of the occurrence of such
event of force majeure.  Upon the cessation of the force majeure event, the
delayed Party will use all commercially reasonable efforts to resume its
performance with all reasonable speed.

 

11.           MISCELLANEOUS.

 

(a)           Incorporation by Reference.  The following provisions of the
Purchase Agreement are incorporated herein by reference and shall apply to this
Agreement in the same manner such provisions apply to the APA:  Sections 12.3,
12.4, 12.6, 12.7(a), 12.7(c), 12.7(d), 12.8, 12.10, 12.11, 12.12, 12.13 12.14,
12.15, 12.16, 12.18, and 12.21.

 

(b)           Further Assurances:  Each party shall, whenever and as often as
reasonably requested to do so by the other party, do, execute, acknowledge and
deliver any and all such other and further acts, assignments, transfers and any
instruments of further assurance, approvals and consents as are necessary or
proper in order to complete, ensure and perfect the transactions contemplated
herein.

 

(c)           Survival:  Sections 4, 7, 8 and 11 hereof shall survive the
termination of this Agreement.

 

(d)           Confidentiality:  Boeing and GECC each hereby agrees that it shall
not, and shall not permit any of its Affiliates to, directly or indirectly,
disclose (except as required by Law) or use any confidential information or
trade secrets of the other (including, but not limited to, the identity and
particular needs of any customer of the other and the methods, techniques,
marketing plans and objectives of the other), except (i) disclosure or use of
such confidential information or trade secrets that exclusively pertain to the
accounts or equipment serviced hereunder in order to fulfill the obligations
under this Agreement, (ii) if such information is readily available in the
public domain (other than as a result of a breach of this Agreement or (iii)
pursuant to applicable Law, it being acknowledged that, except for confidential
or proprietary information that is protected from disclosure by the
attorney-client privilege or work product doctrine, such confidential or
proprietary information does not include the (i) Tax structure or Tax treatment
of the transactions contemplated by this Agreement), except as required by
applicable Law.  Boeing and GECC each agrees to use the same degree of care (but
not less than a reasonable degree of care) in protecting such confidential
information or trade secrets of the other as it uses with respect to its own
confidential information or trade secrets.  Boeing and GECC each hereby
recognizes that a breach of this subsection would result in Damages to GECC or
Boeing as the case may be and that GECC or Boeing as the case may be could not
adequately be compensated for such Damages by monetary award alone. 
Accordingly, the

 

6

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parties hereto agree that in the event of any such breach, in addition to any
other remedies available to GECC or Boeing at law or otherwise, GECC or Boeing
as the case may be shall be entitled to apply to a court of competent
jurisdiction for relief by way of preliminary and permanent injunction,
restraining order, decree or otherwise as may be appropriate to ensure
compliance by Boeing or GECC and recover from Boeing or GECC an amount at least
equal to all reasonable costs and expenses (including legal fees) incurred by
GECC or Boeing as the case may be to enforce any provision of this subsection.

 

(e)           Ingress and Egress.    Each Party shall grant to the other Party,
at all times during the Services Period, subject to the granting Party’s
reasonable security requirements, the right to ingress to and egress from the
premises of the granting Party for reasonable purposes necessary to the delivery
of Services hereunder or the exercise of any right under this Agreement or the
performance of any obligations required by this Agreement.

 

(f)            Authorization.  GECC and Boeing each shall designate individuals
who shall be vested with all the requisite power and authority to approve on
behalf thereof, and whose express written approval shall be required for, all
settlements, extensions, waivers, amendments, terminations or other
modifications hereunder, and an alternate in case that individual is not
available from time to time.  As of the date hereof, the GECC designees shall be
Lauren Pura (203/790-2762) or her successor as Syndications Manager, and in the
alternate the Manager, Contracts Administration, each at 44 Old Ridgebury Rd.,
Danbury, CT 06810, and the Boeing designees shall be
                                              and                                              [address].

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives effective as of the date set forth above.

 

 

BOEING CAPITAL CORPORATION

GENERAL ELECTRIC CAPITAL
CORPORATION

 

 

 

 

By:

 

 

By:

 

 

 

Name:

 

Name:

 

Title:

 

Title:

 

8

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SERVICING AGREEMENT

EXHIBIT A

 

[INSERT MATRIX HERE]

 

--------------------------------------------------------------------------------

 

The following Services shall be provided solely with respect to the various
Serviced Assets as indicated by a ‘Yes’ in the corresponding column/row on the
foregoing table.  For avoidance of doubt, with respect to the table caption
“Equitable Assignment Failures, Opt-Outs and Unwinds (APA 5.2(d)), the Serviced
Assets do not include Assets equitably assigned as of the Final Closing Date as
to which neither Buyer nor Sellers exercise their right to refuse equitable
assignment pursuant to Section 5.2(d)(i) of the Purchase Agreement, unless and
until Buyer exercises its “Unwind” rights pursuant to Section 5.2(d)(iv) of the
Purchase Agreement.

 

(a)           Invoicing.  GECC shall invoice the Obligors as required by the
terms of the Financing and Lease Assets for the Serviced Assets.  Invoices shall
be issued by GECC, as agent for Boeing, and shall set forth the amount of the
rent or other installment, Taxes, late charges, penalties and any other sums
which may be due and owing under the applicable account and shall be in a form
used by GECC, from time to time, in connection with its own accounts; provided,
that such form is reasonably satisfactory to Boeing.

 

(b)           Taxes.

 

(i)            Billing & Collecting.  GECC shall (i) invoice each Obligor for
sales and use Taxes on a basis consistent with the terms of such Obligor’s
account and Boeing’s past practices, and (ii) as directed in writing by Boeing,
GECC shall bill each Obligor for personal property Taxes.  In no event shall
GECC be required to make any payment of Taxes to any Person (other than to remit
to Boeing amounts collected from Obligors in respect of any Taxes), nor shall
GECC be liable hereunder to Boeing or any other Person for any amounts not
actually received by GECC in respect of such Taxes.

 

(ii)           Reporting & Filing.    GECC shall timely prepare and file all
sales and use Tax Returns and personal property Tax Returns in the name of
Boeing as Agent for Boeing as required by the appropriate Governmental Authority
with respect to the Serviced Assets and making all payments due thereunder on
behalf of Boeing to the extent received from Obligors or Boeing in a manner
consistent with GECC’s current practices.  GECC shall prepare and submit to
Boeing promptly a complete set of the monthly filings of any such applicable Tax
Returns by the tenth Business Day of the following month, but no later than
fifteen (15) days following the termination of this Agreement a copy of the Tax
Returns, checks and detailed listings of the sales or use Taxes and personal
property Taxes collected and remitted by jurisdiction for the Serviced Assets. 
GECC shall not be required to remit any payment of Taxes to a Governmental
Authority unless and until monies in respect thereof have been received from the
applicable Obligor or Boeing.

 

(c)           Collections.

 

(i)            Accounts Less than 90 Days Delinquent.  On any account less than
90 days delinquent, GECC shall undertake normal and customary routine collection
services with respect to such account, including, without limitation,
(A) contacting the

 

1

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applicable Obligor by mail (normally within fifteen (15) days of the non-payment
of any scheduled payment) seeking collection of past-due payments and
(B) contacting the applicable Obligor by telephone (normally within thirty (30)
days of non-payment of any scheduled payment) to identify the cause of such
non-payment and seek payment of any past-due amounts.

 

(ii)           Accounts 90 Days Delinquent or More.  For any account 90 days
delinquent or more, GECC shall continue the normal and customary routine
collection services described in subsection (c)(i) hereof and, upon receipt of
Boeing’s written direction, GECC shall undertake additional collection services
including, without limitation, one or more of (A) seeking to effect repossession
of the Collateral relating to such account, (B) instituting and administering,
in the name of Boeing, litigation, collection proceedings and/or foreclosure
proceedings with respect to any Collateral relating to such account against the
applicable obligor thereunder (including, without limitation, assertion of
claims against any vendor, broker or portfolio seller (or any guarantor thereof)
against whom Boeing may have rights) and (C) managing outside collection
agencies.

 

(iii)          Bankrupt Obligors.  For any account with respect to which the
Obligor thereunder has become a debtor in a case or proceeding under a Debtor
Relief Law, GECC shall, upon receipt of Boeing’s written direction, undertake
additional services including, without limitation; (A) filing a proof of claim,
(B) monitoring the progress of the bankruptcy case or insolvency proceeding
(including, without limitation, monitoring the acceptance or rejection of such
account by the Obligor), (C) filing motions seeking adequate protection if the
Obligor seeks to use or sell the Collateral related to such account and
(D) filing motions voting or compromising any claim related to such account.

 

(d)           Reporting.

 

(i)            GECC shall provide to Boeing the following reports (certified by
an officer, the finance manager or the operations manager of GECC and in a form
reasonably satisfactory to Boeing), on a monthly basis summarizing the following
activity relating to the Serviced Assets in the prior month: (A) receivables
aging (including Taxes), the status of any Serviced Asset over 90 days
delinquent, notices received by GECC of bankruptcy or insolvency proceedings
involving any of the Obligors and a list of Collateral or On-Lease Equipment
repossessed by GECC, (B) cash receipts and any amendments, extensions or
terminations of the Serviced Assets and a reconciliation of such activity to the
GECC computer facilities, (C) information concerning the type and amount of
Taxes collected, reported by Vertex code and allocated to each applicable
Serviced Asset, and to the extent contained in GECC’s books and records, such
other data and information (including Tax data and information) with respect to
the Serviced Assets required by Boeing and its Affiliates for income tax
calculation and reporting purposes (including but not limited to depreciation of
the

 

2

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Collateral and On-Lease Equipment subject to such Serviced Assets), such data
and information in each case to be of a type and, subject to subsection 1(d)
hereof, in the form previously prepared by GECC, and (D) other reporting
services that may be reasonably requested by Boeing and reasonably agreed by
GECC.

 

(ii)           GECC shall not be obligated to provide any reports or information
concerning the Serviced Assets to any Person other than Boeing.  All information
contained in any report provided to Boeing by GECC pursuant to this Agreement or
obtained by Boeing pursuant to this Agreement shall be for the sole use and
benefit of Boeing.  GECC shall have no liability to any Person to whom Boeing
may disclose such information or report and no such information or report shall
be attributed to GECC without the prior written approval of GECC.

 

(iii)          Notwithstanding anything to the contrary set forth in this
Agreement, in no event shall GECC be required to prepare on behalf of Boeing or
any Affiliate any Tax returns or information statements required to be filed by
Boeing or any Affiliate with any taxing authority of any nation, state,
municipality or any political subdivision of any of the foregoing.

 

(e)           Customer Service.  GECC shall and shall be entitled to provide to
Obligors normal and customary routine Obligor services such as responding to
requests for information concerning the status of an Obligor’s account and, upon
receipt of Boeing’s written direction, GECC shall (i) provide Obligors with
payoff figures, (ii) provide Obligors with information as to fair market for
purposes of an Obligor’s purchase of property and (iii) respond to an Obligor’s
request for information and adjustments concerning Taxes or other payments under
an Obligor’s Account.

 

(f)            Access to Records.  Boeing shall make available to GECC all books
and records relating to the accounts and/or the equipment in the possession of,
or available to, Boeing.  GECC shall maintain such books and records during any
period in which GECC has possession of any such books and records and shall
maintain all books and records relating to each Serviced Asset for a period of
not less than four (4) years after termination, expiration or discontinuance of
the servicing by GECC of such Serviced Asset hereunder.  In the event that GECC
thereafter desires to dispose of any of such books and records, GECC shall give
Boeing thirty (30) days prior written notice of its intention to do so and
within thirty (30) days of the date of such notice, Boeing may, at its own
expense, arrange for taking possession of any such books and records.

 

(g)           Remittance.  All sums received by GECC that are payments in
respect of Serviced Assets shall be for the account of Boeing and held by GECC
in trust for the benefit of Boeing. GECC shall remit to Boeing all payments
received by it in respect of the Serviced Assets, net of (i) any amounts owed to
GECC by Boeing under this Agreement, (ii) any amounts due from and uncontested
by Boeing under the Purchase Agreement and (iii) any items received by GECC and
returned uncollected due to insufficient funds. Remittances shall be made weekly
on Wednesday of the week following the week in which payments are received by
GECC from Obligors, such remittance to be by wire transfer to Boeing (or its
designee) at such accounts as Boeing shall

 

3

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have designated in writing to GECC prior to such date and shall include a
reference to a specific Serviced Asset with respect to which payment was made.

 

(h)           Remarketing.  Upon return or repossession of any item of
Collateral or On-Lease Equipment, GECC shall, upon receipt of Boeing’s written
direction, remarket such equipment in a manner consistent with GECC’s past
practices and upon such terms and conditions (including the purchase price and
other payment terms) as may be approved by Boeing.  Boeing hereby agrees that
GECC may subcontract the remarketing of equipment to a person (the “Remarketer”)
on terms agreed to by Boeing (which agreement shall not be unreasonably withheld
or delayed) at the sole cost and expense of Boeing, and GECC shall have no
liability with respect to the Remarketer’s performance of such remarketing
services.

 

4

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[The Services indicated below are described in detail on the following pages.]

 

Serviced Assets

 

Citrus World
& Warren*

 

Equitable Assignment
Failures, Opt-Outs and
Unwinds (APA 5.2(d))

 

Assets Subject to
Option
Agreements

 

Zero-Balance
Accounts (APA
Sch. 1.1(b)(ii))

 

Irish Assets

 

 

 

 

 

 

 

 

 

 

 

Services

 

 

 

 

 

 

 

 

 

 

a) Invoicing

 

Yes

 

Yes

 

Yes

 

No

 

Yes

b) Taxes:

 

—

 

—

 

—

 

—

 

 

i) Billing & Collecting

 

Yes

 

Yes

 

Yes

 

No

 

Yes

ii) Reporting & Filing

 

No

 

Yes

 

Yes

 

No

 

Yes

c) Collections:

 

—

 

—

 

—

 

—

 

—

i) < 90 day collections

 

Yes

 

Yes

 

Yes

 

No

 

Yes

ii) > 90 day collection

 

No***

 

Yes

 

Yes

 

No

 

Yes

iii) Bankruptcy

 

No***

 

Yes

 

Yes

 

No

 

Yes

d) Reporting

 

Yes

 

Yes

 

Yes

 

No

 

Yes

e) Customer Service

 

Yes

 

Yes

 

Yes

 

No

 

Yes

f) Access to records

 

Yes

 

Yes

 

Yes

 

No

 

Yes

g) Remittance of Funds to BCC/Partners

 

Yes

 

Yes

 

Yes

 

Yes

 

Yes

h) Remarketing (as requested)

 

No***

 

Yes

 

Yes

 

Yes

 

Yes

 

 

 

 

 

 

 

 

 

 

 

Term (subject to any extension that may be agreed to by the parties)

 

Remaining term of Financing & Lease Asset.

 

18 months from opt-out or unwind.

 

Until acquisition.

 

18 months from Final Closing Date.

 

Earlier of acquisition and 18 months from Final Closing Date.

 

 

 

 

 

 

 

 

 

 

 

Fees (in addition to reasonable out-of-pocket expenses)

 

None.

 

None, subject to Remarketing Fee of 5% of sales proceeds.

 

None, subject to Remarketing Fee of 5% of sales proceeds.

 

None, subject to Remarketing Fee of 5% of sales proceeds.

 

None, subject to Remarketing Fee of 5% of sales proceeds.

 

--------------------------------------------------------------------------------

* Services will not include any activities that, in GE’s reasonable discretion,
could result in environmental liability.

 

** Including after termination of the option right or exercise of the unwind
rights thereunder.

 

***  Upon, and in accordance with the terms of, prior written consent of GECC,
Boeing may consult with former Boeing employees who are employees of GECC at the
time of request.

 

--------------------------------------------------------------------------------

 

EXHIBIT I

 

ANNUAL SPECIALIZED AUDIT STEPS RELATING TO
QUARTERLY GAIN/LOSS STATEMENTS

 

A.                                   Objective:  Render a written opinion
whether the quarterly Gain/Loss Statements for any year are materially in
compliance with the Terms and Conditions of the Purchase and Sale Agreement (the
“Agreement”), including any adjustments made as a result of the audit steps
performed.

 

B.                                     Minimum Audit Procedures

 

1.             Quarterly Summaries

 

a.                                       Trace cumulative totals to prior
quarters, support any adjustments to prior periods not appearing on the current
Quarterly Summary.

 

b.                                      Recompute gains or losses for the
quarter and cumulative to date.

 

c.                                       Test the sharing ratio of gains or
losses to the sharing ratios included in the Agreement.

 

d.                                      Recompute the amounts payable or
receivable to Boeing Capital et al. (Sellers) and cumulative amounts paid or
received.

 

2.             Quarterly Losses or Gains (for each IER and SPRA listed):

 

a.                                       Trace current NAV to Buyer’s (GE’S)
accounting records as of the default or liquidation date.

 

b.                                      Trace loss or gain amount to detailed
calculations required by the Agreement.  Determine if such calculations are in
accordance with the Agreement.

 

c.                                       Trace any Stipulated Values to written
documentation as to agreement of such amount by Boeing Capital or to appraisals
by Independent Appraisers.

 

d.                                      Trace Buyer’s costs of disposition to
appropriate cash disbursement or other appropriate accounting records for
material amounts.

 

e.                                       Support all Triggering Events by
reference to Defaults, Specific Reserves, Write-Downs or Write-offs or other
appropriate support as contemplated by the Agreement.

 

f.                                         Support material cash received
related to disposition proceeds or any payments by or on behalf of Obligors to
cash receipt or other appropriate accounting records.

 

g.                                      For adjustments to NAV as a result of
lease or loan restructuring, test such material adjustments for compliance with
GE’s accounting policies.

 

1

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EXHIBIT J

 

TRANSITION SERVICES AGREEMENT

 

This Transition Services Agreement (“Agreement”) is entered into as of the   
day of May, 2004, by and among Boeing Capital Corporation, a Delaware
corporation (“Provider”), and General Electric Capital Corporation, a Delaware
corporation (“Recipient”) (each a “Party” and collectively, the “Parties”).

 

WHEREAS, Recipient is pursuant to a Purchase and Sale Agreement dated as of May
   , 2004 (the “APA”) (capitalized terms contained and not defined herein shall
have the meanings defined in the APA) purchasing certain assets and assuming
certain liabilities related to the Business;

 

WHEREAS, Recipient is interested in purchasing the Services (as defined below)
from Provider during a Services Period (as defined below) from the date hereof;

 

WHEREAS, Recipient intends to migrate during the Services Period from the
Services and systems provided hereunder to services and systems independent of
Provider; and

 

NOW, THEREFORE, the Parties, intending to become legally bound, agree as
follows:

 

1.             SERVICES

 

1.1                                 Services. Provider hereby agrees to perform
certain services as described in Exhibit A (the “Services”) for Recipient for a
period commencing on the Initial Closing Date and ending five (5) months
following the Final Closing Date (subject to earlier termination pursuant to
Section 6.1) (the “Services Period”). The Services listed on Exhibit A may be
amended from time to time and upon mutual agreement by the Parties. The Parties
agree to conduct reviews at least once a month to ensure a timely completion of
all tasks and to conduct an evaluation of the continued need for each Service
being provided to Recipient by Provider. The Parties hereby acknowledge that one
of the primary purposes of the provision of the Services is to enable Recipient
to develop during the Services Period either independently or through
relationships with third party vendors, services in addition to and in
replacement of all of the Services provided by Provider hereunder.

 

1.2                                 Standard of Delivery.  In providing the
Services, Provider will use commercially reasonable efforts to provide such
services consistent with its past practice and at substantially the same level
and quality as performed by it for the Business during the twelve-month period
immediately preceding the Initial Closing Date.

 

1.3                                 Consultation/Cooperation.  During the
Services Period and upon reasonable request of a Party, during normal business
hours and in such a manner as shall not unduly interfere with or disrupt the
operation and conduct of the other Party’s other businesses, such Party shall
permit the other Party to consult on a reasonable periodic basis with the
applicable employees of Provider providing Services or who were involved in
Provider’s operation of the Business prior to the Initial Closing Date.  The
Parties agree to cooperate as reasonably required to assist Provider in
performing the Services.

 

1

--------------------------------------------------------------------------------

 

2.                CONTRACT PRICE AND PAYMENT SCHEDULE

 

2.1                                 Contract Price.  Recipient shall pay for the
Services an amount equal to the charges for each service rendered as defined in
Exhibit A hereto and subject to the terms and conditions defined in Exhibit A
hereto.

 

2.2           CALCULATION AND PAYMENT SCHEDULE.

 

2.2.1        INVOICES.  ON A MONTHLY BASIS, PROVIDER SHALL INVOICE RECIPIENT FOR
SERVICES PROVIDED UNDER THIS AGREEMENT. EACH MONTHLY STATEMENT WILL IDENTIFY THE
CATEGORIES OF SERVICES USED BASED ON EXHIBIT A.

 

2.2.2        TAXES.  EACH PARTY SHALL ASSUME THE COST OF ANY SALES, USE,
PRIVILEGE AND OTHER SALES OR SIMILAR TAXES, BUT EXCLUDING ANY INTEREST AND
PENALTIES (“TAXES”), IMPOSED UPON THAT PARTY AS A RESULT OF THE TRANSACTIONS
CONTEMPLATED HEREBY.  TO THE EXTENT ANY EXEMPTIONS FROM SUCH TAXES ARE
AVAILABLE, THE PARTIES SHALL COOPERATE TO PREPARE ANY CERTIFICATES OR OTHER
DOCUMENTS NECESSARY TO CLAIM SUCH EXEMPTIONS.

 

2.2.3        PAYMENT.  RECIPIENT WILL PAY ALL AMOUNTS DUE PURSUANT TO THIS
AGREEMENT WITHIN THIRTY (30) DAYS AFTER THE DATE OF EACH INVOICE STATEMENT
HEREUNDER. IF ANY AMOUNTS DUE HEREUNDER HAVE NOT BEEN RECEIVED BY THE DUE DATE,
SUCH OVERDUE AMOUNTS SHALL BEAR INTEREST FROM THE DUE DATE AT THE RATE OF ONE
PERCENT (1%) PER MONTH, OR PORTION THEREOF, UNTIL RECEIVED.  RECIPIENT SHALL
TIMELY MAKE EACH PAYMENT IN THE AMOUNT INVOICED, NOTWITHSTANDING ANY DISPUTE IN
CONNECTION WITH SERVICES NOT COVERED BY SUCH INVOICE, BY WIRE TRANSFER TO AN
ACCOUNT AT A FINANCIAL INSTITUTION DESIGNATED IN WRITING BY PROVIDER.

 

2.2.4        AUDIT.  UPON THE REASONABLE REQUEST AND WITH PRIOR WRITTEN NOTICE,
DURING NORMAL BUSINESS HOURS AND IN SUCH A MANNER AS SHALL NOT UNDULY INTERFERE
WITH OR INTERRUPT THE OPERATION AND CONDUCT OF PROVIDER’S OTHER BUSINESSES,
PROVIDER SHALL PROVIDE REPRESENTATIVES OF RECIPIENT (INCLUDING ITS INTERNAL AND
EXTERNAL AUDITORS) WITH REASONABLE ACCESS TO (I) THE BOOKS, RECORDS, FILES AND
PAPERS, WHETHER IN HARD COPY OR COMPUTER FORMAT, USED OR HELD FOR USE IN THE
PROVISION OF THE SERVICES, AND (II) APPLICABLE EMPLOYEES OF THE PROVIDER WHO
PROVIDE OR MANAGE PROVISION OF THE SERVICES, TO PERMIT AN AUDIT OF THE SERVICES
OR ANY OUT-OF-POCKET COSTS REQUIRED TO BE REIMBURSED PURSUANT TO THIS AGREEMENT.

 

3.             FORCE MAJEURE

 

Neither Party shall have liability for any interruption of Services, delay or
failure to perform under this Agreement when such interruption, delay or failure
results from causes beyond its reasonable control or from any act or failure to
act of the other Party or any Governmental Authority, or as the result of
strikes, lock-outs or other labor difficulties; riot, insurrection or other
hostilities; embargo, fuel or energy shortage, fire, flood, acts of God, wrecks
or transportation delays; acts of war or terrorism; or inability to obtain
necessary labor, materials or

 

2

--------------------------------------------------------------------------------

 

utilities as a result thereof.  In such event, a Party’s obligations hereunder
shall be postponed for such time as its performance is suspended or delayed on
account thereof.  Each Party will promptly notify the other upon learning of the
occurrence of such event of force majeure.  Upon the cessation of the force
majeure event, the delayed Party will use all commercially reasonable efforts to
resume its performance with all reasonable speed.

 

4.             WARRANTY

 

Provider warrants that, at the time of delivery, the Services will be performed
as specified in Article 1 of this Agreement.  In the event of any breach of this
warranty, Provider will either re-perform the work capable of being reperformed
in accordance with the applicable requirements at no charge, or refund the price
paid for the nonconforming Service, provided Provider is given written notice of
the breach, describing the nonconformity in detail, within ninety (90) days
after performance of the nonconforming Service.

 

5.             DISCLAIMER OF WARRANTIES

 

5.1           THE WARRANTIES, CONDITIONS, REPRESENTATIONS, OBLIGATIONS,
LIABILITIES AND REMEDIES OF THE PARTIES SET FORTH IN THIS AGREEMENT ARE
EXCLUSIVE AND IN SUBSTITUTION FOR, AND EACH PARTY HEREBY WAIVES, RELEASES AND
RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE OTHER PARTY,
AND ANY OTHER RIGHTS, CLAIMS AND REMEDIES, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY OF THE SERVICES,
TRAINING, DATA, DOCUMENTATION OR OTHER THINGS PROVIDED UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO:

 

A.            ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

 

B.            ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE; OR

 

C.            ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER
OR NOT ARISING FROM THE NEGLIGENCE OF PROVIDER (BUT EXCLUDING THE GROSS
NEGLIGENCE OR RECKLESS OR WILLFUL MISCONDUCT OF PROVIDER, FOR WHICH NO RIGHTS OF
RECIPIENT ARE WAIVED, LIMITED OR DISCLAIMED HEREUNDER HOWSOEVER);

 

PROVIDED, HOWEVER, THAT THE PARTIES DO NOT WAIVE, LIMIT OR DISCLAIM THEIR RIGHTS
TO ENFORCE THE TERMS OF THIS AGREEMENT.

 

5.2           Negotiated Agreement.  Recipient and Provider agree that this
Article 5 has been the subject of discussion and negotiation and is fully
understood by the Parties, and that this

 

3

--------------------------------------------------------------------------------

 

Agreement was arrived at in consideration of this Article.

 

6.             CANCELLATION FOR DEFAULT AND TERMINATION FOR CONVENIENCE

 

6.1           Termination for Convenience.  Recipient may terminate this
Agreement as to any Service under this Agreement by delivering to Provider a
fifteen (15) day written Notice of Termination specifying the extent of
termination and the effective date.

 

6.2           Termination of Entire Agreement.  Either Party shall have the
right to terminate this Agreement effective upon delivery of notice to the other
Party if the other Party: (a) makes an assignment for the benefit of creditors,
or becomes bankrupt or insolvent, or is petitioned into bankruptcy, or takes
advantage of any state, federal or foreign bankruptcy or insolvency act, or if a
receiver or receiver/manager is appointed for all or any substantial part of its
property and business and such receiver or receiver/manager remains undischarged
for a period of 15 days or (b) materially defaults in the performance of any of
its covenants or obligations contained in this Agreement and such default is not
remedied to the nondefaulting Party’s reasonable satisfaction within thirty (30)
days following written notice of such default.

 

6.3           Procedures on Termination.  Following any termination of this
Agreement in whole or in part, each Party will cooperate with the other Party as
reasonably necessary to avoid disruption of the ordinary course of the other
Party’s business. Termination shall not affect any right to payment for Services
provided prior to termination.

 

6.4           Authorization and Direction.  Notwithstanding anything to the
contrary set forth in this Agreement, Provider will not be obligated to take any
action or fail to take any action that in the reasonable opinion of Provider,
upon the advice of its counsel, would cause Provider to violate, or otherwise
fail to comply with, any applicable Law or incur any liability to a third Person
whether or not Recipient shall have directed, instructed, requested or otherwise
purported to require Provider or any of its officers, directors, employees or
agents to take any action or fail to take any such action

 

7.             INDEMNIFICATION

 

7.1           In consideration for the Services to be performed by Provider
hereunder, Recipient shall indemnify and hold harmless Provider (including the
directors, officers, employees and agents of Provider) from and against any and
all Damages (as defined below) suffered or incurred by Provider resulting from,
arising out of, based on or related to Provider’s performance of the Services
hereunder (including, without limitation any action taken, or any failure to
take any action, by Provider (i) consistent with Recipient’s past practices or
(ii) with the authorization or at the instruction, direction or requirement of
Recipient) and will promptly reimburse Provider for all Damages as they are
incurred in connection with investigating, preparing or defending any action or
claim which gives rise to a right of indemnification hereunder; provided,
however, that Provider shall not be entitled to indemnification for any Damages
to the extent such Damages result from, arise out of,

 

4

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are based upon or relate to Provider’s willful misconduct or Provider’s gross
negligence (unless such Damages result from, arise out of, are based upon or
relate to any action, or any failure to take any action, by Provider that is
(A) consistent with Recipient’s past practices or (B) rendered by Provider as
authorized or instructed, directed or required by Recipient, in which case such
actions or failures to take any action shall be indemnifiable by Recipient). 
Each party to this Agreement shall use its commercially reasonable efforts to
cause its employees to cooperate with and assist the other party in connection
with any third party claim, action or proceeding for which indemnity is sought
hereunder.

 

7.2           “Damages” means any and all losses (including liquidated damages
and Environmental Losses), costs, claims, damages, liabilities, obligations,
judgments, equitable relief granted, settlements, awards, demands, offsets,
defenses, counterclaims, actions, proceedings, deficiency, fine, penalty or
expense, out-of-pocket costs, expenses and attorneys’ fees (including any such
reasonable costs, expenses and attorneys’ fees incurred in enforcing any right
of indemnification against any indemnitor or with respect to any appeal) and
interest and penalties, if any.  “Environmental Losses” means any and all
losses, costs, damages, liabilities, obligations, judgments, equitable relief
granted, settlements, awards, demands, offsets, defenses, counterclaims,
actions, proceedings, deficiency, fine, penalty or expense out-of-pocket costs,
expenses and attorneys’ fees (including any such reasonable costs, expenses and
attorneys’ fees incurred in enforcing any right of indemnification against any
indemnitor or with respect to any appeal) and interest and penalties, if any,
the cost of any Remedial Action (voluntarily or involuntarily incurred) arising
under or with respect to any Environmental Law.  “Remedial Action” shall mean
any action required by any Governmental Entity or law to (A) clean up, remove,
treat or in any other way address any Hazardous Substances; (B) prevent the
release of any Hazardous Substances so it does not endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; or (C)
perform pre-remedial studies and investigations or post-remedial monitoring and
care.

 

8.             LIMITATION ON LIABILITY

 

8.1           Neither Provider nor any of its directors or officers or employees
or agents shall have any liability to Recipient or any other Person for any
activity taken or for refraining from the taking of any activity (A) consistent
with Recipient’s past practices, (B) with the authorization, or at the
instruction, direction or requirement, of Recipient, or (C) due to the failure
of Recipient to approve any expense or costs hereunder.   Provider and any
director, officer, employee or agent of Provider may rely in good faith on any
document of any kind prima facie properly executed and submitted by Recipient
respecting any matters arising hereunder.

 

8.2           Other than with respect to Provider’s failure to remit to
Recipient money that Provider has collected on Recipient’s behalf, Provider’s
total liability under this Agreement is limited to the aggregate amount of the
fees paid to Provider hereunder.

 

5

--------------------------------------------------------------------------------

 

8.3           Neither Party shall have any obligation or liability to the other
with respect to the subject matter hereof, whether arising in contract
(including warranty), tort (including active, passive or imputed negligence (but
excluding gross negligence or reckless or willful misconduct, for which no
rights are waived, limited or disclaimed hereunder howsoever)) or otherwise, for
loss of revenue or profit, or for any punitive, incidental, special or
consequential damages, whether foreseeable or not.  Claims by either Party
against the other for contribution toward third party damage, injury or loss are
not waived, limited or disclaimed.

 

9.             PROPRIETARY INFORMATION

 

9.1           Definition.  The term “Proprietary Information” means all
confidential or proprietary information, including but not limited to code or
intellectual property information, which relates to and is disclosed by one
Party (the “Originating Party”) to the other (the “Receiving Party”) in
connection with this Agreement, it being acknowledged that, except for
Proprietary Information that is protected from disclosure by the attorney-client
privilege or work product doctrine, such Proprietary Information does not
include the (i) Tax structure or Tax treatment of the transactions contemplated
by this Agreement), except as required by applicable Law.

 

9.2           Disclosure and Use.  The Receiving Party shall preserve
Proprietary Information received from the Originating Party in confidence and
shall refrain from disclosing Proprietary Information to any third party without
written authorization from the Originating Party.  Except for software in source
code form, these obligations will terminate five (5) years after receipt. 
During the term of this Agreement, the Receiving Party shall use Proprietary
Information received from the Originating Party solely in connection with the
performance of this Agreement. The disclosure and use obligations set forth
above shall be considered satisfied by the Receiving Party through the exercise
of the degree of care, but in no event less than reasonable care, used to
restrict disclosure and use of its own information of like kind and importance.

 

9.3           Protection of Recipient’s Systems.  Without Recipient’s written
permission, Provider agrees to use its commercially reasonable efforts not to
access or manipulate Recipient data during the term of this Agreement except as
required to perform Provider’s obligations under this Agreement or as agreed in
writing between the Parties.

 

9.4           Injunctive Relief.  Both Parties acknowledge that breach of this
Article 9 may cause damage of an irreparable and continuing nature to the
Originating Party for which monetary damages may not provide adequate relief. 
Therefore, in addition to any monetary damages, the Originating Party is also
entitled to seek an injunction, including if applicable, a temporary restraining
order, to prohibit continued breach of this Agreement.

 

9.5         Exceptions.  This Agreement shall not restrict disclosure or use of
Proprietary Information that is:

 

6

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9.5.1        known to the Receiving Party without restriction when received or
thereafter is developed independently by the Receiving Party without reference
to Proprietary Information of the Originating Party; or

 

9.5.2        obtained without restriction from a source other than the
Originating Party through no breach of confidence by the Receiving Party; or

 

9.5.3        in the public domain when received, or thereafter enters the public
domain through no fault of the Receiving Party; or

 

9.5.4        disclosed by the Originating Party to a third party without
restriction; or

 

9.5.5        Required by applicable Law or regulation, provided the Receiving
Party notifies the Originating Party of the requirement promptly, and cooperates
with the Originating Party (at the request and expense of the Originating Party)
in contesting the requirement.

 

9.6           No Other Rights Granted.  Proprietary Information shall remain the
property of the Originating Party.  Except for the rights expressly granted
under this Agreement, neither this Agreement nor disclosure of Proprietary
Information hereunder shall be construed as granting any right or license under
any trade secrets, copyrights, inventions, or patents now or hereafter owned or
controlled by either Party.  Nor does this Agreement grant any right or license,
or impose any restriction on use of disclosure with respect to information,
other than Proprietary Information, disclosed or received by either Party in
connection with this Agreement.

 

9.7           Wind-up Activities.  Upon completion or termination of the
Services and unless instructed in writing to do otherwise by the Originating
Party, the Receiving Party shall use commercially reasonable efforts to cease
use of and return or destroy all of the Proprietary Information, if any,
received from the Originating Party.  The Originating Party may request, within
sixty (60) days after termination of this Agreement, and the Receiving Party
shall provide, written certification of the return or destruction.
Notwithstanding the foregoing, each Party may retain one copy of each permanent
record of the Proprietary Information disclosed to it under this Agreement
solely as a record of the disclosure.  In the event that information not related
to the sale or operation of the Business is discovered by the Recipient, the
Recipient shall contact Provider for instructions as to the disposition of that
information and protect that information at the level of “Proprietary” in
accordance with this Article 9.

 

10.          MISCELLANEOUS

 

10.1         Ingress and Egress.  Each Party shall grant to the other Party, at
all times during the Services Period, subject to the granting Party’s reasonable
security requirements, the right to ingress to and egress from the premises of
the granting Party for reasonable purposes

 

7

--------------------------------------------------------------------------------

 

necessary to the delivery of Services hereunder or the exercise of any right
under this Agreement or the performance of any obligations required by this
Agreement.

 

10.2         Further Assurances.  Each Party shall, from time to time after the
Closing Date, at the request of any other Party and without further
consideration, execute and deliver such other instruments of conveyance,
assignments, transfer and assumption, and take such other actions, as such other
Party may reasonably request to effect the transactions contemplated by this
Agreement.

 

10.3         Power of Attorney; Agency.  Recipient hereby constitutes and
appoints Provider as its true and lawful agent and attorney in fact,
irrevocably, with the power of substitution and delegation and with full power
and authority to the extent necessary or appropriate for Provider to perform the
Services as contemplated hereby, including the power to make, execute,
acknowledge, make oaths as to, publish, deliver, file and/or record
certificates, instruments, pleadings, motions, other items undertaken in
connection with litigation, bankruptcy or dispute resolution proceeding and
documents in the name and on behalf of Recipient.  Provider and Recipient each
agree and confirm that (a) they do not intend to create any form of partnership
or joint venture with the other party with respect to any of the Services,
(b) they will not hold themselves out to the public as a partner with the other
party hereto or any other person with respect to any of the Services, (c) they
do not have, or intend to form, a joint profit motive with the other party
hereto or any other person with respect to any of the Services, (d) they are not
authorized to act as, or to hold themselves out as, the agent of or to otherwise
bind the other party hereto with respect to any of the Services, (e) unless
otherwise required by the Internal Revenue Service or like governmental
authority with jurisdiction over income tax matters, they will not file any
partnership or other joint income tax return reflecting the other party as a
partner or joint venturer with respect to items of income, loss, deduction, or
credit attributable to the Services, and (f) they will report all items of
income, loss, deduction and credit attributable to the Services on their own tax
returns in a manner consistent with the terms of this Agreement.  Provider
further agrees and acknowledges that Recipient will conduct any and all business
with respect to the Services in its own name and not in a joint name or in the
name of Provider.

 

10.4         Incorporation by Reference.  The following provisions of the APA
are incorporated herein by reference and shall apply to this Agreement in the
same manner such provisions apply to the APA:  Sections 12.3, 12.4, 12.6,
12.7(a), 12.7(c), 12.7(d), 12.8, 12.10, 12.11, 12.12, 12.13 12.14, 12.15, 12.16,
12.18, and 12.21.

 

10.5         Competing Provisions.  The Parties acknowledge and agree that
certain provisions of this Agreement may be inconsistent with the provisions of
the APA or any of the ancillary agreements contemplated to be executed by the
Parties in connection therewith.  To the extent that any provision hereof is
inconsistent with the provisions of such other agreements, the provisions of
such other agreements shall govern the subject of such inconsistencies in all
respects.

 

8

--------------------------------------------------------------------------------

 

10.6         Survival:  Sections 7, 8, 9 and 10 hereof shall survive the
termination of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

 

9

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

 

Boeing Capital Corporation

General Electric Capital Corporation

 

 

 

 

By:

 

 

By:

 

 

Name:

Name:

Title:

Title:

 

10

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EXHIBIT A

SERVICES

 

11

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Exhibit A

TO
TRANSITION SERVICES AGREEMENT

 

1.       Services.

 

(a)           Invoicing.

 

(i)            Provider shall invoice the Obligors as required by the terms of
the applicable Purchased Portfolio Assets, including invoices with respect to
payments due on or before the date that is 30 days after the end of the Service
Period but not including any invoices with respect to payments due after the
date that is 30 days after the end of the Service Period.  Invoices shall be in
the same format (including billing headers) and, except as provided in (ii),
shall direct payments to Provider’s lockboxes, as used by Provider immediately
prior to the Closing Date.  No changes shall be made to the invoice formats
without the prior written approval of the Buyer.

 

(ii)           Upon request of Buyer, Provider shall, in connection with its
final invoice to an Obligor as Provider hereunder, send a notice to each Obligor
in the form provided in advance by Buyer directing such Obligor to remit
payments to the lockboxes (or equivalents) designated by the Buyer prior to the
date of such notice (the “GE Lockboxes”).  Provider shall send a second notice
to an Obligor in the event Provider receives any payment from such Obligor with
respect to the applicable Purchased Portfolio Asset after the date of the first
notice.

 

(b)           Collections.

 

(i)            Purchased Portfolio Assets Less than 60 Days Delinquent.  For any
Purchased Portfolio Asset that is less than 60 Days Delinquent, Provider shall
undertake normal and customary routine collection services with respect to such
Purchased Portfolio Asset, including, without limitation, (A) contacting the
applicable Obligor by mail within thirty (30) days of the non-payment of any
scheduled payment to seek collection of past-due payments and (B) contacting the
applicable Obligor by telephone within sixty (60) days of non-payment of any
scheduled payment to seek to identify the cause of such non-payment and collect
any past-due amounts.

 

(ii)           Purchased Portfolio Assets 60 Days Delinquent or Greater.  For
any Purchased Portfolio Asset that is 60 Days Delinquent, Provider shall (A)
continue the normal and customary routine collection services described in
clause (i) above, (B) notify the applicable Owner Representative promptly of
such delinquency and (C) upon request, turn over all special servicing of such
Purchased Portfolio Asset to the applicable Buyer.

 

(iii)          Obligors in Bankruptcy.  For any Purchased Portfolio Asset that
Provider knows or receives notice that the Obligor thereunder has become a
debtor in a case or proceeding under Debtor Relief Laws, Provider shall (A)
notify the Buyer promptly of commencement of such proceedings and (B) turn over
all further servicing of the related Purchased Portfolio Asset to the Buyer.

 

--------------------------------------------------------------------------------

 

(iv)          In no event shall Provider undertake any collection activities
with respect to Purchased Portfolio Assets referred to in subsection 1(b)(ii) or
subsection 1(b)(iii) other than as provided therein without (A) Provider’s
written consent, (B) express written direction of Buyer and (C) additional
compensation and indemnification of the Provider.

 

(c)           Reporting.  Provider shall provide to the Buyer reports in
substantially the form, and of the type, set forth on Schedule 1 hereto in the
form which the Provider’s current computer programs and/or systems are capable
of generating such reports on or before the dates set forth thereon.  In
addition, Provider shall provide to the Buyer such other reports on the dates,
with the frequency and with the collection information as may be reasonably
requested by the Buyer and agreed to by Provider from time to time.  In addition
to any other compensation payable hereunder, Buyer shall pay to Provider costs
and expenses incurred by Provider in connection with the preparation and
delivery of reports that are not typically generated by Provider.

 

(d)           Administration; Customer Service.

 

(i)            Basic Customer Service.  Provider shall provide to Obligors
normal and customary routine informational customer services (which shall be
determined based on the type, kind and quality of customer services provided by
Provider for the CFS Portfolio prior to the Initial Closing Date, including
telephone etiquette and issue-resolution guidelines) using the toll-free
customer services telephone number used in connection with the management of the
CFS Portfolio prior to the Closing Date or any new telephone number established
by the Buyer.  Such services shall include responding to requests for
information concerning the status of an Obligor’s Purchased Portfolio Asset or
invoicing information and, subject to receipt by Provider of express written
directions from the Buyer pursuant to the Agreement, Provider shall respond to
Obligor requests for adjustments concerning Taxes or other Obligor payments
under such Obligor’s Purchased Portfolio Asset.

 

(ii)           Other Inquiries.  Provider shall forward to the Buyer within two
(2) Business Days following the receipt by Provider of any Obligor request,
whether written or by phone, including, without limitation, a request for a
quotation or a request relating to a possible upgrade, equipment return, end of
term option negotiation, cancellation, extension, waiver, modification,
settlement or restructuring of any Purchased Portfolio Asset or a request for
new financing or remarketing of any equipment and Provider shall not, and shall
not be obligated to, take any action with respect to any such matter unless
expressly directed in writing to do so by the Buyer.

 

(e)           Purchased Portfolio Asset Updates.  Provider shall process all
collections and other updates, modifications, cancellations or restructuring, if
any, to the Purchased Portfolio Assets, which modifications, cancellations or
restructuring have been approved in writing by the Buyer, on Provider’s
operating system.

 

(f)            Cash Application.  All sums received by Provider after the date
hereof that are payments in respect of the Purchased Portfolio Assets shall be
applied by Provider to the proper Purchased Portfolio Assets.  Provider shall
apply each payment as directed by the Obligor, or if the Obligor does not direct
the application of a payment, Provider will use cash application systems and
procedures similar to those used by it in connection with the CFS Portfolio
immediately prior to the Closing Date,

 

--------------------------------------------------------------------------------

 

subject to further instruction by Buyer.  Notwithstanding the foregoing,
Provider shall not be responsible for reporting or remitting payments made to
the GE Lockboxes.

 

(g)           Remittance to Buyer.  Except as otherwise provided in the Purchase
Agreement, all sums received by Provider after the Closing Date that are
payments in respect of any Purchased Portfolio Asset shall be for the account of
the Buyer and shall be held by Provider in trust for the benefit of the Buyer. 
Provider shall remit to the Buyer (or its designee) all payments received by
Provider in respect of the CFS Portfolio after the Closing Date.  All payments
made by Provider pursuant to the foregoing sentence may be made net of any
previously credited uncollectible payments received by Provider (such as checks
subsequently returned for insufficient funds) and net of any payments in respect
of taxes, which such payments shall be remitted to the appropriate Governmental
Authority.  Provider shall be entitled to apply undesignated payments made by an
Obligor with respect to multiple contracts or schedules on a pro rata basis but
shall not be entitled to set off against amounts to be paid by it to any Buyer
pursuant to this Section 2(g), any amount owing to Provider or by any Buyer
pursuant to this Agreement, the APA or otherwise.  Remittances shall be made
weekly on Wednesday of the week following the week in which payments are
received by Provider from Obligors, such remittance to be by wire transfer to
the Buyer (or its designee) at such accounts as the Buyer shall have designated
in writing to Provider prior to such date and shall include a reference to a
specific Purchased Portfolio Asset with respect to which payment was made.

 

(h)           Mutually Agreed Services.  Provider shall provide such other
services to the Buyer with respect to the Purchased Portfolio Assets on such
terms and subject to such conditions as may be mutually agreed upon by Provider
and Buyer.

 

(i)            Tax Services.  During the Service Period, Provider shall provide
to the Buyer as an agent of Buyer the services with respect to sales, use,
personal property and income taxes that are set forth on Schedule 2 hereto and
reporting with respect to such services as described on Schedule 3 hereto.

 

2.       Transition.  Prior to the end of the Service Period, Provider shall
provide the Buyer with assistance necessary to permit an orderly transition of
the Asset Files and the servicing records regarding the CFS Portfolio to the
Buyer, or to a successor service provider designated by the applicable Buyer,
such as (i) developing a transition schedule and appropriate interfaces for, and
allowing the transfer, in a prompt and timely manner, of documents (to extent
required under the APA or data relating to collections or Tax payments (before
or during the Service Period)) related to the Purchased Portfolio Assets from
the systems owned, controlled or utilized by Provider or its Affiliates with
respect to the Purchased Portfolio Assets to the applicable Buyer, (ii)
assistance in extracting such data relating to the Purchased Portfolio Assets
from Provider’s files and providing documentation adequate to permit data
mapping and data extraction and (iii) delivering a conversion data file
containing to the extent practicable the information reasonably requested by
Buyer within 5 Business Days following the applicable Closing Date and within 5
days after any subsequent data request in writing is received by Provider.

 

3.       Access to Records.

 

(a)           During the Service Period, Buyer shall permit and provide Provider
access to the information in a format mutually agreed upon by the Parties hereto
(electronic or otherwise) with respect to remittances from Obligors received
into GE Lockboxes (or equivalent accounts of Buyer) that is reasonably necessary
to enable Provider to service the Purchased Portfolio Assets in accordance
herewith; provided,

 

--------------------------------------------------------------------------------

 

however, in no event shall Provider have the right to withdraw any funds from
such GE Lockboxes (or equivalent accounts).

 

(b)           Upon receipt of a request of any Buyer and subject to the terms of
the Purchase Agreement, applicable Law and prior notice, Provider shall provide
the Buyer with access during regular business hours to those records that
constitute Purchased Portfolio Assets or servicing records that are held by
Provider and or that are under its control and that are necessary to enable such
Buyer to respond to Obligor inquiries or otherwise manage the Purchased
Portfolio Assets and other CFS Portfolio Assets that are being serviced under
this Agreement.  Buyer shall be entitled to make copies of, and extracts from,
such records.  Provider shall, from time to time, designate individuals (and an
alternate in case such individuals are not available from time to time) to be
the primary contacts with the Buyer for this purpose, and as of the Initial
Closing Date such persons shall be                and                 .

 

(c)           Upon or prior to the end of the Service Period, Provider shall, as
soon as reasonably practicable, deliver to the applicable Buyer the Asset Files
and all servicing records related to the Purchased Portfolio Assets during the
Service Period in the possession or under control of Provider, including those
which are reasonably necessary to enable such Buyer to respond to Obligor
inquiries or otherwise manage the Purchased Portfolio Assets, with an inventory
listing of records delivered.  Provider acknowledges and agrees that from and
after the date hereof such records are the property of the Buyer as provided in
the APA and other documents and instruments executed and delivered in connection
therewith and that Provider holds such records during the Service Period for the
benefit of Buyer.

 

4.       Authorization.  Buyer shall designate individuals who shall be vested
with all the requisite power and authority to approve on behalf of the Buyer,
and whose express written approval shall be required for, all settlements,
extensions, waivers, amendments, terminations or other modifications to any of
the Purchased Portfolio Assets, and an alternate in case that individual is not
available from time to time.  As of the Initial Closing Date, the designees
shall be Ivette Muniz (203/796-2448) and in the alternate, Kate Bartlet
(203/796-1458), both at  44 Old Ridgebury Rd., Danbury, CT 06810.

 

5.       Payment.  Buyer shall pay Provider for the Services in an amount equal
to Provider’s costs, which are defined as (i) all out-of-pocket expenses paid by
Provider (which may not exceed $2,500 per month without the prior written
approval of Buyer), (ii) the monthly salary and health benefit costs for each of
Provider’s employees pro rated for the time spent in that month engaged in
providing the Services, (iii) 20% of the retention amounts (as set forth on
Schedule 4 hereto) paid by Provider to each employee for each month (not to
exceed five months) that such employee is engaged in providing the Services, and
(iv) a reasonable allocation of overhead costs for each employee pro rated for
the time spent engaged in providing the Services.

 

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SCHEDULE 1

REPORTING

 

 

 

Reports

 

Frequency

 

Delivery Date

1.

 

Cash Received (including Name, Account Number, Total Received, Due date and
specific items applied).

 

                and weekly thereafter

 

                and last Business Day of each week thereafter

2.

 

Suspense Items Report (including Customer Name, Account Number, Total Cash
Received, Total Cash Remaining (unapplied), Date Cash Received, Any Comments,
Customer Direction as to Application of Cash and if none provided, Copies of
Back-up Media)

 

Monthly

 

Fifth Business Day of succeeding month

3

 

Account Changes/Modifications Report (s) (including Customer Name, Account
Number, Date of Modification, Change/Modification, Description, Cash Received
(if applicable), Cash Applied and to What Items (if applicable), Back up and
System Print Screens Showing Before and After, Copies of any Related
Documentation)

 

Monthly

 

Fifth Business Day of succeeding month

4

 

Delinquency Report

 

Monthly

 

Fifth Business Day of succeeding month

 

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SCHEDULE 2

TAXES

 

A.            Sales and Use Taxes

 

Solely in connection with the CFS Portfolio and except as otherwise provided in
the APA, Provider shall be responsible for:

 

(1)           Calculating and determining the amount of any sales or use Taxes
payable by an Obligor in respect of the Purchased Portfolio Assets and
determining when any such amounts should be paid in compliance with all
applicable Laws enacted by the appropriate Governmental Authority.

 

(2)           Timely preparing and filing all relevant Tax Returns or other
filings in the name of Provider as Agent for Buyer as required by the
appropriate Governmental Authority with respect to the Purchased Portfolio
Assets and making all payments due thereunder on behalf of the Buyer in a manner
consistent with Provider’s current practices.

 

(3)           Preparing and submitting to the Buyer promptly a complete set of
the monthly filings of any such applicable Tax Returns by the tenth Business Day
of the following month, but no later than fifteen (15) days following the
termination of this Agreement a copy of the Tax Returns, checks and detailed
listings of the sales or use Taxes collected and remitted by jurisdiction for
the Purchased Portfolio Assets.

 

(4)           Upon the reasonable request of the Buyer, during normal business
hours and in such a manner as shall not unduly interfere with or disrupt the
operation and conduct of Provider’s other businesses, providing the applicable
Buyer with supporting documentation and assistance in any sales or use Tax
audits of the Purchased Portfolio Assets.

 

(5)           The Provider shall not be required to remit any payment of Taxes
to a Governmental Authority unless and until monies in respect thereof have been
received from the applicable Obligor or Buyer.

 

B.            Personal Property Taxes

 

Solely in connection with the CFS Portfolio and except as otherwise provided in
the APA, Provider shall be responsible for:

 

1.             Maintaining personal property Tax data with respect to the
Purchased Portfolio Assets.  Provider shall provide to the Buyer no later than
five (5) Business Days after any assessment date during the Service Period all
relevant personal property Tax information on the Purchased Portfolio Assets for
Buyer to file a personal property Tax Return.  Buyer will provide Provider with
a list of required information that will be needed to file the Tax Return.

 

--------------------------------------------------------------------------------

 

2.             Upon the reasonable request of the Buyer, during normal business
hours and in such a manner as shall not unduly interfere with or disrupt the
operation and conduct of Provider’s other businesses, provide Buyer with
supporting documentation and assistance in any personal property Tax audits of
the Purchased Portfolio Assets.

 

C.            Income Tax Reporting

 

Provider shall be responsible for providing on a monthly basis the following
information in respect of any Purchased Portfolio Assets that are classified as
leases for federal Income Tax purposes:

 

•      Assets disposed of during the applicable period

i.      Disposition proceeds

ii.     Dates of dispositions

•      Rental collection per asset

•      Depreciation methods and lives

•      ADR Class

•      Location codes (Vertex) per asset

•      Other pertinent fields to be agreed upon

 

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SCHEDULE 3

TAX REPORT

 

Buyer

Property Tax Extract File Format as of 12-02-03

 

Field Length

 

Field Type

 

Field Format

 

Field Name

 

Field Description & Format

14

 

 

Numeric

 

 

 

Asset

 

Asset/Property Number Unique for Each Property.

8

 

 

Numeric

 

CCYYMMDD

 

acq_date

 

Acquisition Date (date seller is using on property tax return for Acquisition
Date)

25

 

 

Alpha/Numeric

 

 

 

Address1

 

Asset/Property Location Address 1

25

 

 

Alpha/Numeric

 

 

 

Address2

 

Asset/Property Location Address 2

25

 

 

Alpha/Numeric

 

 

 

Address3

 

Asset/Property Location Address 3

1

 

 

Numeric

 

 

 

asset_cat

 

Default value: 2

4

 

 

Alpha

 

 

 

Branch_id

 

Default value: XXXX

25

 

 

Alpha

 

 

 

city_name

 

Asset/Property Location:  City Name

3

 

 

Numeric

 

 

 

Cmpny_code

 

Leave this Field Blank

25

 

 

Alpha

 

 

 

cnty_name

 

Asset/Property Location:  County Name

30

 

 

Alpha/Numeric

 

 

 

descript

 

Asset Description

8

 

 

Numeric

 

CCYYMMDD

 

dispos_dte

 

Actual Disposition Date of Asset (if none, leave blank)

4

 

 

Alpha

 

 

 

div_id

 

Default value:  XXXX

 

 

 

Numeric

 

 

 

glacctno

 

Leave this Field Blank

8

 

 

Numeric

 

CCYYMMDD

 

lease_end

 

Projected Purchased Portfolio Asset End Date

14

 

 

Alpha/Numeric

 

 

 

lease_id

 

Purchased Portfolio Asset Schedule Number

3

 

 

Numeric

 

 

 

lease_term

 

Service Period of the Original Purchased Portfolio Asset in Days

2

 

 

Numeric

 

 

 

lease_type

 

Default value:  03

1

 

 

Numeric

 

 

 

lease_fix

 

Default Value:  1

25

 

 

Alpha/Numeric

 

 

 

cust_addr1

 

Same as Field Name:  address1

25

 

 

Alpha/Numeric

 

 

 

cust_addr2

 

Same as Field Name:  address2

25

 

 

Alpha/Numeric

 

 

 

cust_city

 

Same as Field Name:  city_name

12

 

 

 

 

 

 

lese_id

 

If seller has a specific code used for each of its customers property tax
location enter that code in this field, otherwise GE to Assign.

30

 

 

Alpha/Numeric

 

 

 

cust_name

 

Customer Name

2

 

 

Alpha

 

 

 

cust_state

 

Asset/Property Location:  State

9

 

 

Numeric

 

 

 

cust_zip

 

Asset/Property Location:  Zip Code (9 digits with no “-”)

1

 

 

Alpha

 

 

 

Make

 

Default to a “Y” if all assets reportable for property tax purposes, default to
a “I” if property has been returned and is in Lessor’s inventory (normally used
to identify if a contracts is active for property tax reporting if it is past
its projected termination date i.e. renewal, holdover rent etc.).

13.2

 

 

Alpha/Numeric

 

 

 

Model

 

Asset Model Number

 

Field Length

 

Field Type

 

Field Format

 

Field Name

 

Field Description & Format

13.2

 

 

Numeric

 

 

 

month_rent

 

Monthly Rent

15

 

 

Numeric

 

 

 

eqp_cost

 

Equipment Cost

3

 

 

Numeric

 

 

 

own_class

 

GE to Map based on Equipment Type

 

 

 

 

 

 

 

userfield1

 

default value  (blank)

 

 

 

 

 

 

 

userfield2

 

default value  (blank)

 

--------------------------------------------------------------------------------

 

15

 

 

Alpha/Numeric

 

 

 

glgrp_id

 

default value VF3945109001003

1

 

 

Alpha

 

 

 

taxrptcode

 

Property Tax Reporting Code:  G=Lessor reports and pays tax;  C=Customer reports
and pays tax;  E=Exempt;  D=Do not report and pay (i.e. 3rd party reporting and
paying as agent);  T=Terminated Asset;

13.2

 

 

Numeric

 

 

 

rptd_cost

 

Property Tax Reporting Equipment Cost

20

 

 

Alpha/Numeric

 

 

 

serial_no

 

If motor vehicle, enter VIN here.

30

 

 

Alpha/Numeric

 

 

 

bill_name

 

Same as cust_name field

2

 

 

Numeric

 

 

 

user_state

 

Two digit numeric state code (GE will map this to their coding-leave blank)

9

 

 

Numeric

 

 

 

Zip

 

Same as cust_zip field

8

 

 

Numeric

 

CCYYMMDD

 

lease_date

 

Same as acq_date field

 

 

 

 

 

 

 

userfield3

 

default value  (blank)

6

 

 

Alpha

 

 

 

Usefield5

 

default value SGLINV

Additional fields:

 

 

 

 

 

 

50

 

 

Alpha/Numeric

 

 

 

equip_type

 

Equipment Type Name i.e. computer, trucks, trailers, copier, telephone etc.  (GE
will map this to the numeric coding for equipment type)

 

Note:  Add any other fields your system contains that will be helpful in
reporting this equipment for property tax purposes.

 

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SCHEDULE 4

RETENTION PAYMENTS

 

Name

 

Total Retention Payment

 

 

 

 

 

[***to be completed by Boeing***]

 

 

 

 

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EXHIBIT K

 

PURCHASE OPTION AGREEMENT

 

THIS PURCHASE OPTION AGREEMENT (this “Agreement”) is dated as of             ,
2004 by and between BCC EQUIPMENT LEASING CORPORATION, a Delaware corporation
(the “Seller”), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation
(the “Buyer”).

 

WHEREAS, the Seller is the holder of a 13% beneficial interest in Bethlehem
Steel Corp 2000 Equipment Trust No. 1, as referenced in Trust Supplement No. 3,
dated September 29, 2000, under and pursuant to the Master Trust Agreement,
dated as of April 14, 1999, between the CIT Group/Equipment Financing, Inc., as
Trustor and Beneficiary, and First Security Bank, National Association, as Owner
Trustee, and the Lease Participation Agreement dated as of September 29, 2000
among Bethlehem Steel Corporation, as Lessee, The CIT Group/Equipment Financing,
Inc., Transamerica Equipment Financial Services Corporation, Safeco Credit
Company, Inc. and MDFC Equipment Leasing Corporation, as Owner Participants, and
First Security Bank, National Association, as Owner Trustee (such 13% beneficial
interest, the “Bethlehem Interest”; such Trust Supplement No. 3 and such Master
Trust Agreement, collectively, the “Bethlehem Trust Agreement”; and such Lease
Participation Agreement, the “Bethlehem Lease Agreement”);

 

WHEREAS, the Seller is the holder of a 12.684% partnership interest in Cylinder
Head Line Partnership, consisting of a portion of the “Seller’s Interest” as
referenced in the Participation Agreement, dated as of August 26, 2002, by and
between Transamerica Equipment Financial Services Corporation and Seller, and
the Participation Agreement, dated as of August 27, 2002, by and between UPS
Capital Corporation, a Delaware corporation, and Seller (such 12.684%
partnership interest, the “Cylinder Head Interest”; and such Participation
Agreements, the “Cylinder Head Agreements”);

 

WHEREAS, the Seller and the Buyer are among the parties to that certain Purchase
and Sale Agreement dated as of May    , 2004 (the “Purchase Agreement”) (each
capitalized term used in this Agreement which is not defined herein shall have
the meaning ascribed to such term in the Purchase Agreement); and

 

WHEREAS, pursuant to the Purchase Agreement, the Seller has agreed to grant to
the Buyer the rights provided for under this Agreement with respect to the
Bethlehem Interest and the Cylinder Head Interest (collectively, the “Seller
Interests”, and each individually, a “Seller Interest”) as a condition precedent
to the Buyer’s obligation to close under the Purchase Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

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SECTION 1            PURCHASE OPTION

 

1.1           PURCHASE OPTION.  THE SELLER HEREBY GRANTS TO THE BUYER THE RIGHT
TO PURCHASE FROM THE SELLER (THE “PURCHASE OPTION”) ON MARCH 21, 2005 (THE
“PURCHASE DATE”) ALL (BUT NOT LESS THAN ALL) OF THE SELLER’S RIGHT, TITLE AND
INTEREST IN, TO AND UNDER EITHER OR BOTH OF THE SELLER INTERESTS IN ACCORDANCE
WITH AND SUBJECT TO THE TERMS AND CONDITIONS OF THIS SECTION 1.

 

1.2           EXERCISE OF PURCHASE OPTION. 

 

(A)   IF THE BUYER ELECTS TO EXERCISE THE PURCHASE OPTION WITH RESPECT TO ONE OR
MORE OF THE SELLER INTERESTS, THE BUYER SHALL DELIVER WRITTEN NOTICE OF SUCH
ELECTION (A “BUYER ELECTION NOTICE”) TO THE SELLER DURING THE PERIOD BEGINNING
SIXTY (60) DAYS PRIOR TO THE PURCHASE DATE AND ENDING THIRTY (30) DAYS PRIOR TO
THE PURCHASE DATE (THE “BUYER EXERCISE PERIOD”) INDICATING WHICH OF THE SELLER
INTERESTS IT IS ELECTING TO PURCHASE.

 

(B)   ANY BUYER ELECTION NOTICE SHALL BE DELIVERED TO THE SELLER IN THE MANNER
AND AT THE ADDRESS FOR NOTICES FOR THE SELLER SET FORTH IN SECTION 12.3 OF THE
PURCHASE AGREEMENT.

 

(C)   THE PURCHASE OPTION WILL BECOME NULL AND VOID WITH RESPECT TO A SELLER
INTEREST IF THE BUYER DOES NOT INCLUDE SUCH SELLER INTEREST IN A BUYER ELECTION
NOTICE DURING THE BUYER ELECTION PERIOD OR IF THE PURCHASE OPTION CLOSING (AS
DEFINED BELOW) DOES NOT OCCUR WITH RESPECT TO SUCH SELLER INTEREST ON THE
PURCHASE DATE.  THE PURCHASE OPTION SHALL BE DEEMED TO BE NULL AND VOID AB
INITIO (I) AS TO THE BETHLEHEM INTEREST IN THE EVENT THAT EITHER BUYER OR SELLER
HAS ELECTED IN WRITING, PURSUANT TO SECTION 5.2(D)(I) OF THE PURCHASE AGREEMENT,
TO REFUSE AN EQUITABLE ASSIGNMENT OF THE SPECIFIED FINANCING AND LEASE ASSET OR
EQUITY ASSET THAT CONSISTS OF AN INTEREST IN THE SAME UNDERLYING ASSET OR ENTITY
AS THE BETHLEHEM INTEREST (THE “RELATED BETHLEHEM ASSET”), AND (II) AS TO THE
CYLINDER HEAD INTEREST IN THE EVENT THAT EITHER BUYER OR SELLER HAS ELECTED IN
WRITING, PURSUANT TO SECTION 5.2(D)(I) OF THE PURCHASE AGREEMENT, TO REFUSE AN
EQUITABLE ASSIGNMENT OF THE SPECIFIED FINANCING AND LEASE ASSET OR EQUITY ASSET
THAT CONSISTS OF AN INTEREST IN THE SAME UNDERLYING ASSET OR ENTITY AS THE
CYLINDER HEAD INTEREST (THE “RELATED CYLINDER HEAD ASSET”).

 

1.3           PURCHASE PRICE.  IF THE BUYER EXERCISES THE PURCHASE OPTION WITH
RESPECT TO A SELLER INTEREST IN ACCORDANCE WITH THIS SECTION 1, THE PURCHASE
PRICE PAYABLE BY THE BUYER FOR SUCH SELLER INTEREST (THE “PURCHASE PRICE”) SHALL
BE THE GREATER OF (I) THE APPLICABLE NAV FOR SUCH SELLER INTEREST AS OF MARCH 1,
2005, AS DETERMINED PURSUANT TO THE PURCHASE AGREEMENT, OR (II) THE AMOUNT THAT
WOULD HAVE BEEN RECEIVED WITH RESPECT TO SUCH SELLER INTEREST (A) IN THE CASE OF
THE BETHLEHEM INTEREST, UPON A SALE FOR FAIR MARKET VALUE (DETERMINED AS
PROVIDED HEREINBELOW) OF ALL ASSETS HELD PURSUANT TO THE BETHLEHEM TRUST
AGREEMENT, INCLUDING ALL RELATED ASSETS HELD IN ANY SEPARATE TRUST THEREUNDER
FOR THE BENEFIT OF ANY PERSON OTHER THAN SELLER, AND THE APPLICATION AND
DISTRIBUTION OF ALL PROCEEDS OF SUCH A SALE IN ACCORDANCE WITH THE BETHLEHEM
TRUST AGREEMENT, AND (B) IN THE CASE OF THE CYLINDER HEAD INTEREST, UPON A SALE
FOR FAIR MARKET VALUE (DETERMINED AS PROVIDED HEREINBELOW) OF ALL ASSETS HELD
PURSUANT TO THE CYLINDER HEAD AGREEMENTS AND THE APPLICATION AND DISTRIBUTION OF
ALL PROCEEDS OF SUCH A SALE IN ACCORDANCE WITH THE CYLINDER HEAD AGREEMENTS. 
FOR THIS PURPOSE, “FAIR MARKET VALUE” IS THE AMOUNT THAT WOULD BE ESTABLISHED BY
A WILLING BUYER AND A WILLING SELLER, OPERATING AT ARMS-LENGTH IN AN OPEN AND
UNRESTRICTED MARKET, WHERE THE BUYER WAS UNDER NO COMPULSION TO BUY AND THE
SELLER WAS UNDER NO COMPULSION TO SELL

 

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AND BOTH PARTIES WERE REASONABLY KNOWLEDGEABLE OF THE RELEVANT FACTS (THE “FAIR
MARKET VALUE”), AND SHALL BE DETERMINED AS FOLLOWS:

 

(A)   WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE OF A BUYER ELECTION NOTICE,
THE SELLER SHALL NOTIFY THE BUYER IN WRITING OF THE SELLER’S DETERMINATION OF
THE THEN CURRENT FAIR MARKET VALUE OF EACH SELLER INTEREST TO WHICH THE BUYER
ELECTION NOTICE RELATES.

 

(B)   WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE OF SUCH NOTICE, THE BUYER
SHALL NOTIFY THE SELLER IN WRITING AS TO WHETHER THE BUYER ACCEPTS OR REJECTS
THE SELLER’S DETERMINATION OF FAIR MARKET VALUE.

 

(C)   IF THE BUYER AND THE SELLER ARE UNABLE TO AGREE UPON THE FAIR MARKET VALUE
WITH RESPECT TO SUCH SELLER INTEREST, THE FAIR MARKET VALUE OF SUCH SELLER
INTEREST SHALL BE DETERMINED BY A NATIONALLY RECOGNIZED APPRAISER SELECTED BY
THE BUYER AND REASONABLY ACCEPTABLE TO THE SELLER (THE “APPRAISER”).

 

(D)   THE FAIR MARKET VALUE ESTABLISHED BY THE APPRAISER WITH RESPECT TO SUCH
SELLER INTEREST SHALL BE BINDING UPON BOTH THE BUYER AND THE SELLER.

 

1.4           CLOSING OF PURCHASE OPTION.  THE CLOSING OF THE PURCHASE OPTION
(THE “PURCHASE OPTION CLOSING”) WITH RESPECT TO EACH SELLER INTEREST THAT THE
BUYER ELECTS TO PURCHASE SHALL TAKE PLACE AT 10:00 A.M. NEW YORK TIME AT THE
OFFICES OF GIBSON, DUNN & CRUTCHER LLP, 200 PARK AVENUE, NEW YORK, NEW YORK
10166 ON THE PURCHASE DATE OR SUCH OTHER DATE AS THE BUYER AND THE APPLICABLE
SELLERS SHALL MUTUALLY AGREE.  ON THE PURCHASE DATE, THE BUYER SHALL DELIVER TO
THE SELLER, THE PURCHASE PRICE WITH RESPECT TO SUCH SELLER INTERESTS, IN CASH,
AND THE SELLER SHALL DELIVER TO THE BUYER THE CERTIFICATES (IF ANY) REPRESENTING
SUCH SELLER INTERESTS (IF ANY), FREE OF ANY LIENS OR ENCUMBRANCES (OTHER THAN
(I) PORTFOLIO ASSET PERMITTED ENCUMBRANCES, DETERMINED AS THOUGH EACH SELLER
INTEREST WERE A PORTFOLIO ASSET, (II) RESTRICTIONS IMPOSED BY THE BETHLEHEM
TRUST AGREEMENT, THE BETHLEHEM LEASE AGREEMENT OR THE CYLINDER HEAD AGREEMENT,
AND (III) RESTRICTIONS IMPOSED BY APPLICABLE SECURITIES LAW), TOGETHER WITH SUCH
POWERS, TRANSFER TAX STAMPS, ASSIGNMENT AGREEMENTS AND OTHER DOCUMENTATION AND
CERTIFICATES REASONABLY REQUIRED BY THE BUYER TO EFFECT THE TRANSFER OF ALL OF
THE SELLER’S RIGHT, TITLE AND INTEREST IN, TO AND UNDER SUCH SELLER INTERESTS. 
IN ADDITION, (I) THE SELLER SHALL DELIVER TO THE BUYER THE CERTIFICATE OF A DULY
AUTHORIZED OFFICER OF THE SELLER, CERTIFYING THAT THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN SECTION 2.2(A) ARE TRUE AND CORRECT AS OF THE PURCHASE
DATE, AND (II) THE BUYER AND THE SELLER SHALL EXECUTE AND DELIVER SUCH DOCUMENTS
AND INSTRUMENTS TO EACH OTHER, AND TO SUCH OTHER PERSONS, AS ARE REQUIRED UNDER
THE BETHLEHEM TRUST AGREEMENT (INCLUDING SECTION 8.1 THEREOF), THE BETHLEHEM
LEASE AGREEMENT (INCLUDING SECTION 6.01 THEREOF) AND THE CYLINDER HEAD
AGREEMENTS (INCLUDING SECTIONS 9 THEREOF AS THOUGH SELLER WERE THE “PARTICIPANT”
REFERRED TO THEREIN) AND OTHERWISE REASONABLY REQUIRED UNDER APPLICABLE LAW IN
ORDER TO CONSUMMATE THE ASSIGNMENT, SALE, PURCHASE, AND DELIVERY OF THE SELLER
INTERESTS TO THE BUYER ON THE PURCHASE DATE.

 

1.5           CERTAIN UNWIND RIGHTS.

 

(A)           IF BUYER ELECTS TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO
AN EQUITABLE ASSIGNMENT OF THE RELATED BETHLEHEM ASSET PURSUANT TO
SECTION 5.2(D)(IV) OF THE PURCHASE AGREEMENT, THEN (I) IF THE PURCHASE OPTION
WITH RESPECT TO THE BETHLEHEM INTEREST SHALL

 

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NOT HAVE BEEN EXERCISED AT THE TIME BUYER SO ELECTS TO CAUSE SUCH UNWIND OF
EQUITABLE ASSIGNMENT AS TO THE RELATED BETHLEHEM ASSET, THEN THE PURCHASE OPTION
SHALL BE DEEMED TO BE NULL AND VOID WITH RESPECT TO THE BETHLEHEM INTEREST WHEN
BUYER SO ELECTS TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED
BETHLEHEM ASSET, AND (II) IF THE PURCHASE OPTION WITH RESPECT TO THE BETHLEHEM
INTEREST SHALL HAVE BEEN EXERCISED AT THE TIME BUYER SO ELECTS TO CAUSE SUCH
UNWIND OF EQUITABLE ASSIGNMENT OF THE RELATED BETHLEHEM ASSET, THEN (A) THE
PARTIES SHALL TAKE ALL NECESSARY STEPS TO PROVIDE SELLER WITH ALL OF THE
BENEFITS OF THE BETHLEHEM INTEREST, AND TO RELIEVE BUYER OF ALL ASSUMED
LIABILITIES THEREUNDER, FROM AND AFTER THE DATE BUYER PROVIDES SELLERS WITH
WRITTEN NOTICE OF ITS ELECTION TO CAUSE THE UNWIND OF EQUITABLE ASSIGNMENT AS TO
THE RELATED BETHLEHEM ASSET, (B) WITHIN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT
OF BUYER’S WRITTEN NOTICE TO CAUSE THE UNWIND OF EQUITABLE ASSIGNMENT AS TO THE
RELATED BETHLEHEM ASSET, SELLER SHALL PAY TO BUYER THE THEN APPLICABLE NAV OF
THE BETHLEHEM INTEREST AS OF THE DATE OF BUYER’S ELECTION TO CAUSE THE UNWIND OF
EQUITABLE ASSIGNMENT AS TO THE RELATED BETHLEHEM ASSET (THE APPLICABLE NAV TO BE
DETERMINED IN THE SAME MANNER AS THOUGH THE BETHLEHEM INTEREST HAD BEEN A
SPECIFIED FINANCING AND LEASE ASSET OR EQUITY ASSET), AND (C) THE BETHLEHEM
INTEREST SHALL THEREUPON BECOME SUBJECT TO THE SERVICING AGREEMENT.

 

(B)           IF BUYER ELECTS TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO
AN EQUITABLE ASSIGNMENT OF THE RELATED CYLINDER HEAD ASSET PURSUANT TO
SECTION 5.2(D)(IV) OF THE PURCHASE AGREEMENT, THEN (I) IF THE PURCHASE OPTION
WITH RESPECT TO THE CYLINDER HEAD INTEREST SHALL NOT HAVE BEEN EXERCISED AT THE
TIME BUYER SO ELECTS TO CAUSE SUCH UNWIND OF EQUITABLE ASSIGNMENT AS TO THE
RELATED CYLINDER HEAD ASSET, THEN THE PURCHASE OPTION SHALL BE DEEMED TO BE NULL
AND VOID WITH RESPECT TO THE CYLINDER HEAD INTEREST WHEN BUYER SO ELECTS TO
CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED CYLINDER HEAD ASSET,
AND (II) IF THE PURCHASE OPTION WITH RESPECT TO THE CYLINDER HEAD INTEREST SHALL
HAVE BEEN EXERCISED AT THE TIME BUYER SO ELECTS TO CAUSE SUCH UNWIND OF
EQUITABLE ASSIGNMENT OF THE RELATED CYLINDER HEAD ASSET, THEN (A) THE PARTIES
SHALL TAKE ALL NECESSARY STEPS TO PROVIDE SELLER WITH ALL OF THE BENEFITS OF THE
CYLINDER HEAD INTEREST, AND TO RELIEVE BUYER OF ALL ASSUMED LIABILITIES
THEREUNDER, FROM AND AFTER THE DATE BUYER PROVIDES SELLERS WITH WRITTEN NOTICE
OF ITS ELECTION TO CAUSE THE UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED
CYLINDER HEAD ASSET, (B) WITHIN TEN (10) BUSINESS DAYS FOLLOWING RECEIPT OF
BUYER’S WRITTEN NOTICE TO CAUSE THE UNWIND OF EQUITABLE ASSIGNMENT AS TO THE
RELATED CYLINDER HEAD ASSET, SELLER SHALL PAY TO BUYER THE THEN APPLICABLE NAV
OF THE CYLINDER HEAD INTEREST AS OF THE DATE OF BUYER’S ELECTION TO CAUSE THE
UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED CYLINDER HEAD ASSET (THE
APPLICABLE NAV TO BE DETERMINED IN THE SAME MANNER AS THOUGH THE CYLINDER HEAD
INTEREST HAD BEEN A SPECIFIED FINANCING AND LEASE ASSET OR EQUITY ASSET), AND
(C) THE CYLINDER HEAD INTEREST SHALL THEREUPON BECOME SUBJECT TO THE SERVICING
AGREEMENT.

 

SECTION 2  REPRESENTATIONS AND WARRANTIES; COVENANTS

 

2.1           REPRESENTATIONS AND WARRANTIES OF THE BUYER.  THE BUYER REPRESENTS
AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(A)   IT IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE DELAWARE WITH ALL REQUISITE POWER AND AUTHORITY TO OWN,
LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW BEING
CONDUCTED;

 

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(B)   IT IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION
AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY OWNED OR
LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO QUALIFIED
(EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL ADVERSE EFFECT
ON THE ABILITY OF THE BUYER TO PERFORM ITS OBLIGATIONS HEREUNDER);

 

(C)   (I) IT HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO EXECUTE
AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND DELIVERY
BY THE BUYER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF DIRECTORS OF THE
BUYER, (III) NO OTHER ACTION ON THE PART OF THE BUYER OR ANY OTHER PERSON OR
ENTITY, WHETHER PURSUANT TO THE ORGANIZATIONAL DOCUMENTS OF THE BUYER OR BY LAW
OR OTHERWISE, ARE NECESSARY TO AUTHORIZE THE BUYER TO ENTER INTO THIS AGREEMENT
OR TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS
BEEN DULY EXECUTED AND DELIVERED BY THE BUYER AND (V) THIS AGREEMENT IS THE
LEGAL, VALID AND BINDING OBLIGATION OF THE BUYER, ENFORCEABLE AGAINST THE BUYER
IN ACCORDANCE WITH ITS TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED
BY LAWS PERTAINING TO BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’
RIGHTS AND BY THE AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND
OTHER EQUITABLE REMEDIES); AND

 

(D)   NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE BUYER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE BUYER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE BUYER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE BUYER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOCATE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE BUYER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE BUYER TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

2.2           REPRESENTATIONS AND WARRANTIES OF THE SELLER.  THE SELLER
REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(A)   THE SELLER (I) IS THE DIRECT OWNER, BENEFICIALLY AND OF RECORD, OF THE
SELLER INTERESTS AND (II) HAS NOT MADE ANY ASSIGNMENT, PLEDGE, HYPOTHECATION OR
TRANSFER OF, AND HAS NOT CREATED, OR PERMITTED TO EXIST, ANY SECURITY INTEREST
IN OR OTHER ENCUMBRANCE ON, THE SELLER INTERESTS;

 

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(B)   THE SELLER IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF DELAWARE WITH ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS NOW BEING CONDUCTED;

 

(C)   THE SELLER IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN
CORPORATION AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY
OWNED OR LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO
QUALIFIED (EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT ON THE ABILITY OF THE SELLER TO PERFORM ITS OBLIGATIONS
HEREUNDER);

 

(D)   (I) THE SELLER HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER
AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND
DELIVERY BY THE SELLER OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF
DIRECTORS OF THE SELLER, (III) NO OTHER CORPORATE ACTION ON THE PART OF THE
SELLER OR ANY OTHER PERSON OR ENTITY, WHETHER PURSUANT TO THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR BY LAW OR OTHERWISE, ARE NECESSARY TO
AUTHORIZE THE SELLER TO ENTER INTO THIS AGREEMENT OR TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY THE SELLER AND (V) THIS AGREEMENT IS THE LEGAL, VALID AND BINDING
OBLIGATION OF THE SELLER, ENFORCEABLE AGAINST THE SELLER IN ACCORDANCE WITH ITS
TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED BY LAWS PERTAINING TO
BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’ RIGHTS AND BY THE
AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND OTHER EQUITABLE
REMEDIES); AND

 

(E)   NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE SELLER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE SELLER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE SELLER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOKE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE SELLER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE SELLER PARTY TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

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2.3           RESTRICTION ON TRANSFER.  UNTIL AFTER EXPIRATION OF THE BUYER
ELECTION PERIOD (DETERMINED WITHOUT REGARD TO ANY EXTENSION THEREOF), SELLER
SHALL NOT MAKE ANY SALE OR EXCHANGE (WITHIN THE MEANING OF SECTION 708(B)(1)(B)
OF THE CODE) OF A SELLER INTEREST OR ANY INTEREST THEREIN.

 

2.4           CONSENTS.  THE SELLER AGREES THAT TO THE EXTENT THAT THE CONSENTS
OF ANY THIRD PARTIES ARE REQUIRED PRIOR TO THE TRANSFER BY THE SELLER OF THE
SELLER INTERESTS, THE SELLER WILL OBTAIN SUCH CONSENT ON OR PRIOR TO THE
PURCHASE DATE; PROVIDED, THE SOLE CONSEQUENCES UNDER THIS AGREEMENT OF THE
FAILURE OF SELLER SO TO OBTAIN SUCH CONSENTS SHALL BE THE APPLICATION (TO THE
EXTENT RELEVANT UNDER THE CIRCUMSTANCES) OF THE PROVISIONS OF THE LAST SENTENCE
OF SECTION 1.2(C) OF THIS AGREEMENT AND SECTION 1.5 OF THIS AGREEMENT.  UNTIL
EXPIRATION OF THE BUYER EXERCISE PERIOD, IF SELLER’S AGREEMENT, APPROVAL,
CONSENT OR VOTE WOULD HAVE BEEN REQUIRED IMMEDIATELY BEFORE THE INITIAL CLOSING
WITH RESPECT TO AN ACTION BY OR CONCERNING THE RELATED BETHLEHEM ASSET, THE
RELATED CYLINDER HEAD ASSET, OR THE UNDERLYING ASSETS THEREOF, THEN BUYER SHALL
OBTAIN SELLER’S CONSENT WITH RESPECT TO AGREEMENT, APPROVAL, CONSENT OR VOTE BY
BUYER WITH RESPECT TO SUCH ACTION IN BUYER’S CAPACITY AS HOLDER OF AN INTEREST
IN THE RELATED BETHLEHEM ASSET OR THE RELATED CYLINDER HEAD ASSET; PROVIDED,
SELLER SHALL NOT UNREASONABLY WITHHOLD OR DELAY SUCH CONSENT, AND SELLER SHALL
EXERCISE THIS RIGHT TO GRANT OR DENY SUCH CONSENT IN GOOD FAITH AND REASONABLY
IN LIGHT OF THE RELATIVE ECONOMIC POSITIONS OF THE PARTIES.

 

SECTION 3            MISCELLANEOUS.

 

3.1           CONFIDENTIALITY.  THE TERMS OF SECTION 5.5 OF THE PURCHASE
AGREEMENT AND THE TERMS OF THE CONFIDENTIALITY AGREEMENT (INCLUDING THE
EXCLUSION, EXCEPT FOR ITEMS PROTECTED FROM DISCLOSURE BY THE ATTORNEY-CLIENT
PRIVILEGE OR WORK PRODUCT DOCTRINE, OF INFORMATION RELATING TO THE TAX STRUCTURE
OR TAX TREATMENT OF THE TRANSACTIONS CONTEMPLATED, BY THIS AGREEMENT) ARE HEREBY
INCORPORATED BY REFERENCE AND BOTH THE BUYER AND THE SELLER AGREE TO BE BOUND
THEREBY AS IF SUCH TERMS WERE SET FORTH HEREIN IN THEIR ENTIRETY.

 

3.2           HEADINGS.  THE HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY AND SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF
ANY PROVISIONS HEREOF.

 

3.3           ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AND UNDERSTANDING OF THE PARTIES HERETO IN RESPECT OF THE SUBJECT MATTER HEREOF,
AND THERE ARE NO RESTRICTIONS, PROMISES, REPRESENTATIONS, WARRANTIES, COVENANTS,
OR UNDERTAKINGS WITH RESPECT TO THE SUBJECT MATTER HEREOF, OTHER THAN THOSE
EXPRESSLY SET FORTH OR REFERRED TO HEREIN.

 

3.4           NOTICES. ANY NOTICE, REQUEST, INSTRUCTION OR OTHER DOCUMENT TO BE
GIVEN HEREUNDER BY ANY PARTY TO THE OTHER PARTIES SHALL BE IN WRITING AND SHALL
BE DEEMED GIVEN OR DELIVERED WHEN DELIVERED IN THE MANNER AND TO THE ADDRESS SET
FORTH IN SECTION 12.3 OF THE PURCHASE AGREEMENT OR TO SUCH OTHER PLACE AND WITH
SUCH OTHER COPIES AS EITHER PARTY MAY DESIGNATE AS TO ITSELF BY WRITTEN NOTICE
TO THE OTHERS.  ANY FAILURE BY ANY PARTY TO DELIVER COPIES OF ANY NOTICE SHALL
NOT, IN ITSELF, AFFECT THE VALIDITY OF SUCH NOTICE IF OTHERWISE PROPERLY MADE TO
THE OTHER PARTY.

 

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3.5           SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF THIS AGREEMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR RESPECTIVE
HEIRS, SUCCESSORS AND PERMITTED ASSIGNS.  EXCEPT AS PROVIDED IN THIS
SECTION 3.5, NEITHER SELLER NOR BUYER MAY ASSIGN ITS RIGHTS UNDER THIS
AGREEMENT.  EITHER THE SELLER (SUBJECT TO COMPLIANCE BY SELLER WITH SECTION 2.3)
OR THE BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO ONE OR MORE OF
ITS AFFILIATES, AND BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO,
(A)  IN THE CASE OF THE BETHLEHEM INTEREST, ANY PURCHASER OF AN INTEREST IN THE
BETHLEHEM STEEL CORP. 2000 EQUIPMENT TRUST NO. 1 THAT THE BUYER OWNED AT ANY
TIME PRIOR TO THE PURCHASE DATE, OR (B) IN THE CASE OF THE CYLINDER HEAD
INTEREST, ANY PURCHASER OF AN INTEREST IN THE CYLINDER HEAD LINE PARTNERSHIP
THAT THE BUYER OWNED AT ANY TIME PRIOR TO THE PURCHASE DATE.

 

3.6           SPECIFIC PERFORMANCE.  EACH OF THE PARTIES HERETO ACKNOWLEDGES AND
AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING
PARTY OR PARTIES WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY
MONETARY DAMAGES.  IT IS ACCORDINGLY AGREED THAT THE PARTIES HERETO SHALL AND DO
HEREBY WAIVE THE DEFENSE IN ANY ACTION FOR SPECIFIC PERFORMANCE THAT A REMEDY AT
LAW WOULD BE ADEQUATE AND THAT THE PARTIES HERETO, IN ADDITION TO ANY OTHER
REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, SHALL BE ENTITLED TO
COMPEL SPECIFIC PERFORMANCE OF THIS AGREEMENT.

 

3.7           AMENDMENTS.  THIS AGREEMENT MAY NOT BE AMENDED, MODIFIED OR
SUPPLEMENTED WITHOUT THE PRIOR WRITTEN CONSENT OF ALL THE PARTIES HERETO.

 

3.8           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.

 

3.9           GOVERNING LAW.  THIS AGREEMENT AND ALL DISPUTES OR CONTROVERSIES
ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (EXCLUDING PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY THE LAW OF
ANOTHER JURISDICTION).

 

3.10         EXPENSES.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE PARTIES TO THIS
AGREEMENT SHALL BEAR THEIR RESPECTIVE EXPENSES INCURRED IN CONNECTION WITH THE
PREPARATION, EXECUTION AND PERFORMANCE OF THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, ALL FEES AND EXPENSES OF
AGENTS, REPRESENTATIVES, COUNSEL AND ACCOUNTANTS.

 

(SIGNATURES ON FOLLOWING PAGE)

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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Draft

 

PURCHASE OPTION AGREEMENT

 

THIS PURCHASE OPTION AGREEMENT (this “Agreement”) is dated as of
                 , 2004 by and between BCC EQUIPMENT LEASING CORPORATION, a
Delaware corporation (the “Seller”), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (the “Buyer”).

 

WHEREAS, the Seller is a member in Portland Tube Facility, L.L.C., a Delaware
limited liability company (the “Company”);

 

WHEREAS, Seller and Heller Financial Leasing, Inc., a Delaware corporation
(“Heller”), are parties to that certain Portland Tube Facility, L.L.C. Limited
Liability Company Agreement, dated as of March 30, 2000 (the “LLC Agreement”);

 

WHEREAS, Seller holds a membership interest in the Company as referenced in the
LLC Agreement;

 

WHEREAS, the Seller and the Buyer are among the parties to that certain Purchase
and Sale Agreement dated as of May    , 2004 (the “Purchase Agreement”) (each
capitalized term used in this Agreement which is not defined herein shall have
the meaning ascribed to such term in the Purchase Agreement); and

 

WHEREAS, pursuant to the Purchase Agreement, the Seller has agreed to grant to
the Buyer the rights provided for under this Agreement as a condition precedent
to the Buyer’s obligation to close under the Purchase Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

I.                                                                                        
PURCHASE OPTION

 

A.            PURCHASE OPTION.  THE SELLER HEREBY GRANTS TO THE BUYER THE RIGHT
TO PURCHASE FROM THE SELLER (THE “PURCHASE OPTION”) ON THE PURCHASE DATE (AS
HEREINAFTER DEFINED) ALL (BUT NOT LESS THAN ALL) OF THE SELLER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER A 1% MEMBERSHIP INTEREST IN THE COMPANY AS
REFERENCED IN THE LLC AGREEMENT (THE “SELLER INTEREST”), IN ACCORDANCE WITH AND
SUBJECT TO THE TERMS AND CONDITIONS OF THIS SECTION 1.

 

B.            EXERCISE OF PURCHASE OPTION.

 

1.     IF THE BUYER ELECTS TO EXERCISE THE PURCHASE OPTION WITH RESPECT TO THE
SELLER INTEREST, THE BUYER SHALL DELIVER WRITTEN NOTICE OF SUCH ELECTION (A
“BUYER ELECTION NOTICE”) TO THE SELLER DURING THE PERIOD BEGINNING SIXTY (60)
DAYS PRIOR TO THE PURCHASE DATE AND ENDING THIRTY (30) DAYS PRIOR TO THE
PURCHASE DATE (THE “BUYER EXERCISE PERIOD”).

 

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2.     ANY BUYER ELECTION NOTICE SHALL BE DELIVERED TO THE SELLER IN THE MANNER
AND AT THE ADDRESS FOR NOTICES FOR THE SELLER SET FORTH IN SECTION 12.3 OF THE
PURCHASE AGREEMENT.

 

3.     THE PURCHASE OPTION WILL BECOME NULL AND VOID IF THE BUYER DOES NOT
PROVIDE A BUYER ELECTION NOTICE DURING THE BUYER ELECTION PERIOD OR IF THE
PURCHASE OPTION CLOSING (AS DEFINED BELOW) DOES NOT OCCUR WITH RESPECT TO THE
SELLER INTEREST ON THE PURCHASE DATE.  THE PURCHASE OPTION SHALL BE DEEMED TO BE
NULL AND VOID AB INITIO AS TO THE SELLER INTEREST IN THE EVENT THAT EITHER BUYER
OR SELLER HAS ELECTED IN WRITING, PURSUANT TO SECTION 5.2(D)(V) OF THE PURCHASE
AGREEMENT, TO REFUSE AN EQUITABLE ASSIGNMENT OF THE SPECIFIED FINANCING AND
LEASE ASSET OR EQUITY ASSET THAT CONSISTS OF AN INTEREST IN THE COMPANY (SUCH
SPECIFIED FINANCING AND LEASE ASSET OR EQUITY ASSET, HEREIN THE “RELATED
ASSET”).

 

3.11         PURCHASE DATE.  THE “PURCHASE DATE” SHALL BE THAT CALENDAR DAY
WHICH IS THE FIRST BUSINESS DAY FOLLOWING THE DATE THAT IS ONE YEAR PLUS 60 DAYS
AFTER THE DATE UPON WHICH THE BUYER CONSUMMATED THE PURCHASE FROM SELLER OF THE
RELATED ASSET, PROVIDED THAT IF, FOLLOWING THE PURCHASE OF THE RELATED ASSET,
THE BUYER RETAINS THE RIGHT TO ELECT TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT
AS TO AN EQUITABLE ASSIGNMENT OF THE RELATED ASSET PURSUANT TO SECTION
5.2(D)(IV) OF THE PURCHASE AGREEMENT, THEN THE PURCHASE DATE SHALL BE THE
CALENDAR DAY THAT IS THE FIRST BUSINESS DAY THAT IS 60 DAYS AFTER THE DATE UPON
WHICH SUCH RIGHT TERMINATES (BUT IN NO EVENT EARLIER THAN THE DAY DETERMINED
UNDER THIS SECTION 1.3 WITHOUT REGARD TO THIS PROVISO).

 

3.12         PURCHASE PRICE.  IF THE BUYER EXERCISES THE PURCHASE OPTION WITH
RESPECT TO THE SELLER INTEREST IN ACCORDANCE WITH THIS SECTION 1, THE PURCHASE
PRICE PAYABLE BY THE BUYER FOR THE SELLER INTEREST (THE “PURCHASE PRICE”) SHALL
BE THE GREATER OF (I) THE APPLICABLE NAV FOR THE SELLER INTEREST, AS DETERMINED
PURSUANT TO THE PURCHASE AGREEMENT, AS OF THE PURCHASE DATE OR (II) THE AMOUNT
THAT WOULD HAVE BEEN RECEIVED WITH RESPECT TO THE SELLER INTEREST UPON A
DISSOLUTION AND LIQUIDATION OF THE COMPANY FOLLOWING A SALE OF ALL THE ASSETS OF
THE COMPANY AT THE FAIR MARKET VALUE (DETERMINED AS PROVIDED HEREINBELOW) AND
THE APPLICATION AND DISTRIBUTION OF ALL PROCEEDS OF SUCH A SALE UPON SUCH
DISSOLUTION AND LIQUIDATION IN ACCORDANCE WITH THE LLC AGREEMENT.  FOR THIS
PURPOSE, “FAIR MARKET VALUE” IS THE AMOUNT THAT WOULD BE ESTABLISHED BY A
WILLING BUYER AND A WILLING SELLER, OPERATING AT ARMS-LENGTH IN AN OPEN AND
UNRESTRICTED MARKET, WHERE THE BUYER WAS UNDER NO COMPULSION TO BUY AND THE
SELLER WAS UNDER NO COMPULSION TO SELL AND BOTH PARTIES WERE REASONABLY
KNOWLEDGEABLE OF THE RELEVANT FACTS (THE “FAIR MARKET VALUE”), AND SHALL BE
DETERMINED AS FOLLOWS:

 

(A)   WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE OF A BUYER ELECTION NOTICE,
THE SELLER SHALL NOTIFY THE BUYER IN WRITING OF THE SELLER’S DETERMINATION OF
THE THEN CURRENT FAIR MARKET VALUE OF THE SELLER INTEREST.

 

(B)   WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE OF SUCH NOTICE, THE BUYER
SHALL NOTIFY THE SELLER IN WRITING AS TO WHETHER THE BUYER ACCEPTS OR REJECTS
THE SELLER’S DETERMINATION OF FAIR MARKET VALUE.

 

(C)   IF THE BUYER AND THE SELLER ARE UNABLE TO AGREE UPON THE FAIR MARKET VALUE
WITH RESPECT TO SUCH SELLER INTEREST, THE FAIR MARKET VALUE OF SUCH SELLER
INTEREST SHALL BE DETERMINED BY A NATIONALLY RECOGNIZED APPRAISER SELECTED BY
THE BUYER AND REASONABLY ACCEPTABLE TO THE SELLER (THE “APPRAISER”).

 

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(D)   THE FAIR MARKET VALUE ESTABLISHED BY THE APPRAISER WITH RESPECT TO SUCH
SELLER INTEREST SHALL BE BINDING UPON BOTH THE BUYER AND THE SELLER.

 

C.            CLOSING OF PURCHASE OPTION.  THE CLOSING OF THE PURCHASE OPTION
(THE “PURCHASE OPTION CLOSING”) WITH RESPECT TO THE SELLER INTEREST SHALL TAKE
PLACE AT 10:00 A.M. NEW YORK TIME AT THE OFFICES OF GIBSON, DUNN & CRUTCHER LLP,
200 PARK AVENUE, NEW YORK, NEW YORK 10166 ON THE PURCHASE DATE OR SUCH OTHER
DATE AS THE BUYER AND THE APPLICABLE SELLERS SHALL MUTUALLY AGREE.  ON THE
PURCHASE DATE, THE BUYER SHALL DELIVER TO THE SELLER, THE PURCHASE PRICE WITH
RESPECT TO THE SELLER INTEREST, IN CASH, AND THE SELLER SHALL DELIVER TO THE
BUYER THE CERTIFICATE (IF ANY) REPRESENTING THE SELLER INTEREST, FREE OF ANY
LIENS OR ENCUMBRANCES (OTHER THAN (I) PORTFOLIO ASSET PERMITTED ENCUMBRANCES,
DETERMINED AS THOUGH THE SELLER INTEREST WERE A PORTFOLIO ASSET,
(II) RESTRICTIONS IMPOSED BY THE LLC AGREEMENT, AND (III) RESTRICTIONS IMPOSED
BY APPLICABLE SECURITIES LAW), TOGETHER WITH SUCH POWERS, TRANSFER TAX STAMPS,
ASSIGNMENT AGREEMENTS AND OTHER DOCUMENTATION AND CERTIFICATES REASONABLY
REQUIRED BY THE BUYER TO EFFECT THE TRANSFER OF ALL OF THE SELLER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER THE SELLER INTEREST.  IN ADDITION, (I) THE SELLER
SHALL DELIVER TO THE BUYER THE CERTIFICATE OF A DULY AUTHORIZED OFFICER OF THE
SELLER, CERTIFYING THAT THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION
2.2(A) ARE TRUE AND CORRECT AS OF THE PURCHASE DATE, AND (II) THE BUYER AND THE
SELLER SHALL EXECUTE AND DELIVER SUCH DOCUMENTS AND INSTRUMENTS TO EACH OTHER,
AND TO SUCH OTHER PERSONS, AS ARE REQUIRED UNDER THE LLC AGREEMENT AND OTHERWISE
REASONABLY REQUIRED UNDER APPLICABLE LAW IN ORDER TO CONSUMMATE THE ASSIGNMENT,
SALE, PURCHASE, AND DELIVERY OF THE SELLER INTEREST TO THE BUYER ON THE PURCHASE
DATE.

 

D.            RELATIONSHIP TO UNWIND RIGHTS.  IF BUYER ELECTS TO CAUSE AN UNWIND
OF EQUITABLE ASSIGNMENT AS TO AN EQUITABLE ASSIGNMENT OF THE RELATED ASSET
PURSUANT TO SECTION 5.2(D)(IV) OF THE PURCHASE AGREEMENT AND THE PURCHASE OPTION
WITH RESPECT TO THE SELLER INTEREST SHALL NOT HAVE BEEN EXERCISED AT THE TIME
BUYER SO ELECTS TO CAUSE SUCH UNWIND OF EQUITABLE ASSIGNMENT, THEN THE PURCHASE
OPTION SHALL BE DEEMED TO BE NULL AND VOID WHEN BUYER SO ELECTS TO CAUSE AN
UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED ASSET.  THE RIGHT OF BUYER TO
ELECT TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO AN EQUITABLE ASSIGNMENT
OF THE RELATED ASSET PURSUANT TO SECTION 5.2(D)(IV) OF THE PURCHASE AGREEMENT
SHALL BE DEEMED TO HAVE TERMINATED AND BE NULL AND VOID UPON ANY EXERCISE OF THE
PURCHASE OPTION.

 

II.                  REPRESENTATIONS AND WARRANTIES; COVENANTS

 

3.13         REPRESENTATIONS AND WARRANTIES OF THE BUYER.  THE BUYER REPRESENTS
AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(A)   IT IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE DELAWARE WITH ALL REQUISITE POWER AND AUTHORITY TO OWN,
LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW BEING
CONDUCTED;

 

(B)   IT IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION
AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY OWNED OR
LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO QUALIFIED
(EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL ADVERSE EFFECT
ON THE ABILITY OF THE BUYER TO PERFORM ITS OBLIGATIONS HEREUNDER);

 

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(C)   (I) IT HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO EXECUTE
AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND DELIVERY
BY THE BUYER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF DIRECTORS OF THE
BUYER, (III) NO OTHER ACTION ON THE PART OF THE BUYER OR ANY OTHER PERSON OR
ENTITY, WHETHER PURSUANT TO THE ORGANIZATIONAL DOCUMENTS OF THE BUYER OR BY LAW
OR OTHERWISE, ARE NECESSARY TO AUTHORIZE THE BUYER TO ENTER INTO THIS AGREEMENT
OR TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS
BEEN DULY EXECUTED AND DELIVERED BY THE BUYER AND (V) THIS AGREEMENT IS THE
LEGAL, VALID AND BINDING OBLIGATION OF THE BUYER, ENFORCEABLE AGAINST THE BUYER
IN ACCORDANCE WITH ITS TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED
BY LAWS PERTAINING TO BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’
RIGHTS AND BY THE AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND
OTHER EQUITABLE REMEDIES); AND

 

(D)   NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE BUYER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE BUYER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE BUYER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE BUYER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOCATE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE BUYER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE BUYER TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

A.            REPRESENTATIONS AND WARRANTIES OF THE SELLER.  THE SELLER
REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(E)   THE SELLER (I) IS THE DIRECT OWNER, BENEFICIALLY AND OF RECORD, OF THE
SELLER INTEREST AND (II) HAS NOT MADE ANY ASSIGNMENT, PLEDGE, HYPOTHECATION OR
TRANSFER OF, AND HAS NOT CREATED, OR PERMITTED TO EXIST, ANY SECURITY INTEREST
IN OR OTHER ENCUMBRANCE ON, THE SELLER INTEREST;

 

(F)    TO THE KNOWLEDGE OF THE SELLER, THE SELLER INTEREST HAS BEEN DULY
AUTHORIZED AND VALIDLY ISSUED;

 

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(G)   THE SELLER IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF DELAWARE WITH ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS NOW BEING CONDUCTED;

 

(H)   THE SELLER IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN
CORPORATION AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY
OWNED OR LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO
QUALIFIED (EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT ON THE ABILITY OF THE SELLER TO PERFORM ITS OBLIGATIONS
HEREUNDER);

 

(I)    (I) THE SELLER HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER
AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND
DELIVERY BY THE SELLER OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF
DIRECTORS OF THE SELLER, (III) NO OTHER CORPORATE ACTION ON THE PART OF THE
SELLER OR ANY OTHER PERSON OR ENTITY, WHETHER PURSUANT TO THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR BY LAW OR OTHERWISE, ARE NECESSARY TO
AUTHORIZE THE SELLER TO ENTER INTO THIS AGREEMENT OR TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY THE SELLER AND (V) THIS AGREEMENT IS THE LEGAL, VALID AND BINDING
OBLIGATION OF THE SELLER, ENFORCEABLE AGAINST THE SELLER IN ACCORDANCE WITH ITS
TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED BY LAWS PERTAINING TO
BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’ RIGHTS AND BY THE
AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND OTHER EQUITABLE
REMEDIES); AND

 

(J)    NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE SELLER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE SELLER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE SELLER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOKE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE SELLER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE SELLER PARTY TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

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B.            RESTRICTION ON TRANSFER.  UNTIL AFTER EXPIRATION OF THE BUYER
ELECTION PERIOD (DETERMINED WITHOUT REGARD TO ANY EXTENSION THEREOF), SELLER
SHALL NOT MAKE ANY SALE OR EXCHANGE (WITHIN THE MEANING OF SECTION 708(B)(1)(B)
OF THE CODE) OF THE SELLER INTEREST OR ANY INTEREST THEREIN.

 

C.            CONSENTS.  THE SELLER AGREES THAT TO THE EXTENT THAT THE CONSENTS
OF ANY THIRD PARTIES ARE REQUIRED PRIOR TO THE TRANSFER BY THE SELLER OF THE
SELLER INTEREST, THE SELLER WILL OBTAIN SUCH CONSENT ON OR PRIOR TO THE PURCHASE
DATE; PROVIDED, THE SOLE CONSEQUENCES UNDER THIS AGREEMENT OF THE FAILURE OF
SELLER SO TO OBTAIN SUCH CONSENTS SHALL BE (I) THE ADJUSTMENT IN CALCULATION OF
WHEN THE PURCHASE DATE FALLS PURSUANT TO SECTION 1.3 OF THIS AGREEMENT AND THE
CORRESPONDING EXTENSION OF THE BUYER EXERCISE PERIOD AS DEFINED IN
SECTION 1.2(A) OF THIS AGREEMENT, AND (II) THE APPLICATION  (TO THE EXTENT
RELEVANT UNDER THE CIRCUMSTANCES) OF THE PROVISIONS OF THE LAST SENTENCE OF
SECTION 1.2(C) OF THIS AGREEMENT AND SECTION 1.6 OF THIS AGREEMENT.

 

III.                                                                                
MISCELLANEOUS.

 

A.            CONFIDENTIALITY.  THE TERMS OF SECTION 5.5 OF THE PURCHASE
AGREEMENT AND THE TERMS OF THE CONFIDENTIALITY AGREEMENT (INCLUDING THE
EXCLUSION, EXCEPT FOR ITEMS PROTECTED FROM DISCLOSURE BY THE ATTORNEY-CLIENT
PRIVILEGE OR WORK PRODUCT DOCTRINE, OF INFORMATION RELATING TO THE TAX STRUCTURE
OR TAX TREATMENT OF THE TRANSACTIONS CONTEMPLATED, BY THIS AGREEMENT) ARE HEREBY
INCORPORATED BY REFERENCE AND BOTH THE BUYER AND THE SELLER AGREE TO BE BOUND
THEREBY AS IF SUCH TERMS WERE SET FORTH HEREIN IN THEIR ENTIRETY.

 

B.            HEADINGS.  THE HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY AND SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF
ANY PROVISIONS HEREOF.

 

C.            ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AND UNDERSTANDING OF THE PARTIES HERETO IN RESPECT OF THE SUBJECT MATTER HEREOF,
AND THERE ARE NO RESTRICTIONS, PROMISES, REPRESENTATIONS, WARRANTIES, COVENANTS,
OR UNDERTAKINGS WITH RESPECT TO THE SUBJECT MATTER HEREOF, OTHER THAN THOSE
EXPRESSLY SET FORTH OR REFERRED TO HEREIN.

 

D.            NOTICES. ANY NOTICE, REQUEST, INSTRUCTION OR OTHER DOCUMENT TO BE
GIVEN HEREUNDER BY ANY PARTY TO THE OTHER PARTIES SHALL BE IN WRITING AND SHALL
BE DEEMED GIVEN OR DELIVERED WHEN DELIVERED IN THE MANNER AND TO THE ADDRESS SET
FORTH IN SECTION 12.3 OF THE PURCHASE AGREEMENT OR TO SUCH OTHER PLACE AND WITH
SUCH OTHER COPIES AS EITHER PARTY MAY DESIGNATE AS TO ITSELF BY WRITTEN NOTICE
TO THE OTHERS.  ANY FAILURE BY ANY PARTY TO DELIVER COPIES OF ANY NOTICE SHALL
NOT, IN ITSELF, AFFECT THE VALIDITY OF SUCH NOTICE IF OTHERWISE PROPERLY MADE TO
THE OTHER PARTY.

 

E.             SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF THIS AGREEMENT SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE HEIRS, SUCCESSORS AND PERMITTED ASSIGNS.  EXCEPT AS PROVIDED IN THIS
SECTION 3.5, NEITHER SELLER NOR BUYER MAY ASSIGN ITS RIGHTS UNDER THIS
AGREEMENT.  EITHER SELLER (SUBJECT TO COMPLIANCE BY SELLER WITH SECTION 2.3) OR
BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO ONE OR MORE OF ITS

 

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AFFILIATES.  BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO ANY
PURCHASER OF AN INTEREST IN THE COMPANY THAT THE BUYER OWNED AT ANY TIME PRIOR
TO THE PURCHASE DATE.

 

F.             SPECIFIC PERFORMANCE.  EACH OF THE PARTIES HERETO ACKNOWLEDGES
AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING
PARTY OR PARTIES WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY
MONETARY DAMAGES.  IT IS ACCORDINGLY AGREED THAT THE PARTIES HERETO SHALL AND DO
HEREBY WAIVE THE DEFENSE IN ANY ACTION FOR SPECIFIC PERFORMANCE THAT A REMEDY AT
LAW WOULD BE ADEQUATE AND THAT THE PARTIES HERETO, IN ADDITION TO ANY OTHER
REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, SHALL BE ENTITLED TO
COMPEL SPECIFIC PERFORMANCE OF THIS AGREEMENT.

 

G.            AMENDMENTS.  THIS AGREEMENT MAY NOT BE AMENDED, MODIFIED OR
SUPPLEMENTED WITHOUT THE PRIOR WRITTEN CONSENT OF ALL THE PARTIES HERETO.

 

H.            COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.

 

I.              GOVERNING LAW.  THIS AGREEMENT AND ALL DISPUTES OR CONTROVERSIES
ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (EXCLUDING PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY THE LAW OF
ANOTHER JURISDICTION).

 

J.             EXPENSES.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE PARTIES TO
THIS AGREEMENT SHALL BEAR THEIR RESPECTIVE EXPENSES INCURRED IN CONNECTION WITH
THE PREPARATION, EXECUTION AND PERFORMANCE OF THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, ALL FEES AND
EXPENSES OF AGENTS, REPRESENTATIVES, COUNSEL AND ACCOUNTANTS.

 

(SIGNATURES ON FOLLOWING PAGE)

 

7

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

8

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Draft

 

PURCHASE OPTION AGREEMENT

 

THIS PURCHASE OPTION AGREEMENT (this “Agreement”) is dated as of
                   , 2004 by and between BCC EQUIPMENT LEASING CORPORATION, a
Delaware corporation (the “Seller”), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (the “Buyer”).

 

WHEREAS, the Seller is a partner in MDFC/Mitsui Leasing Partnership, a
California general partnership (the “Partnership”);

 

WHEREAS, Seller and Mitsui Leasing (U.S.A.) Inc., a                      
corporation (“Mitsui”), are parties to that certain MDFC/Mitsui Leasing
Partnership General Partnership Agreement, dated as of March 31, 1995, between
MDFC Equipment Leasing Corporation and Mitsui (the “Partnership Agreement”);

 

WHEREAS, Seller holds a partnership interest in the Partnership as referenced in
the Partnership Agreement;

 

WHEREAS, the Seller and the Buyer are among the parties to that certain Purchase
and Sale Agreement dated as of May    , 2004 (the “Purchase Agreement”) (each
capitalized term used in this Agreement which is not defined herein shall have
the meaning ascribed to such term in the Purchase Agreement); and

 

WHEREAS, pursuant to the Purchase Agreement, the Seller has agreed to grant to
the Buyer the rights provided for under this Agreement as a condition precedent
to the Buyer’s obligation to close under the Purchase Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

IV.                                                                                
PURCHASE OPTION

 

A.            PURCHASE OPTION.  THE SELLER HEREBY GRANTS TO THE BUYER THE RIGHT
TO PURCHASE FROM THE SELLER (THE “PURCHASE OPTION”) ON THE PURCHASE DATE (AS
HEREINAFTER DEFINED) ALL (BUT NOT LESS THAN ALL) OF THE SELLER’S RIGHT, TITLE
AND INTEREST IN, TO AND UNDER A 1% PARTNERSHIP INTEREST IN THE PARTNERSHIP, AS
REFERENCED IN THE PARTNERSHIP AGREEMENT (THE “SELLER INTEREST”), IN ACCORDANCE
WITH AND SUBJECT TO THE TERMS AND CONDITIONS OF THIS SECTION 1.

 

B.            EXERCISE OF PURCHASE OPTION.

 

1.     IF THE BUYER ELECTS TO EXERCISE THE PURCHASE OPTION WITH RESPECT TO THE
SELLER INTEREST, THE BUYER SHALL DELIVER WRITTEN NOTICE OF SUCH ELECTION (A
“BUYER ELECTION NOTICE”) TO THE SELLER DURING THE PERIOD BEGINNING SIXTY (60)
DAYS PRIOR TO THE PURCHASE DATE AND ENDING THIRTY (30) DAYS PRIOR TO THE
PURCHASE DATE (THE “BUYER EXERCISE PERIOD”).

 

1

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2.     ANY BUYER ELECTION NOTICE SHALL BE DELIVERED TO THE SELLER IN THE MANNER
AND AT THE ADDRESS FOR NOTICES FOR THE SELLER SET FORTH IN SECTION 12.3 OF THE
PURCHASE AGREEMENT.

 

3.     THE PURCHASE OPTION WILL BECOME NULL AND VOID IF THE BUYER DOES NOT
PROVIDE A BUYER ELECTION NOTICE DURING THE BUYER ELECTION PERIOD OR IF THE
PURCHASE OPTION CLOSING (AS DEFINED BELOW) DOES NOT OCCUR WITH RESPECT TO THE
SELLER INTEREST ON THE PURCHASE DATE.  THE PURCHASE OPTION SHALL BE DEEMED TO BE
NULL AND VOID AB INITIO AS TO THE SELLER INTEREST IN THE EVENT THAT EITHER BUYER
OR SELLER HAS ELECTED IN WRITING, PURSUANT TO SECTION 5.2(D)(I) OF THE PURCHASE
AGREEMENT, TO REFUSE AN EQUITABLE ASSIGNMENT OF THE SPECIFIED FINANCING AND
LEASE ASSET OR EQUITY ASSET THAT CONSISTS OF AN INTEREST IN THE COMPANY (SUCH
SPECIFIED FINANCING AND LEASE ASSET OR EQUITY ASSET, HEREIN THE “RELATED
ASSET”).

 

3.14         PURCHASE DATE.  THE “PURCHASE DATE” SHALL BE THAT CALENDAR DAY
WHICH IS THE FIRST BUSINESS DAY FOLLOWING THE DATE THAT IS ONE YEAR PLUS 60 DAYS
AFTER THE DATE UPON WHICH THE BUYER CONSUMMATED THE PURCHASE FROM SELLER OF THE
RELATED ASSET, PROVIDED THAT IF, FOLLOWING THE PURCHASE OF THE RELATED ASSET,
THE BUYER RETAINS THE RIGHT TO ELECT TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT
AS TO AN EQUITABLE ASSIGNMENT OF THE RELATED ASSET PURSUANT TO SECTION
5.2(D)(IV) OF THE PURCHASE AGREEMENT, THEN THE PURCHASE DATE SHALL BE THE
CALENDAR DAY THAT IS THE FIRST BUSINESS DAY THAT IS 60 DAYS AFTER THE DATE UPON
WHICH SUCH RIGHT TERMINATES (BUT IN NO EVENT EARLIER THAN THE DAY DETERMINED
UNDER THIS SECTION 1.3 WITHOUT REGARD TO THIS PROVISO).

 

C.            PURCHASE PRICE.  IF THE BUYER EXERCISES THE PURCHASE OPTION WITH
RESPECT TO THE SELLER INTEREST IN ACCORDANCE WITH THIS SECTION 1, THE PURCHASE
PRICE PAYABLE BY THE BUYER FOR THE SELLER INTEREST (THE “PURCHASE PRICE”) SHALL
BE THE GREATER OF (I) THE APPLICABLE NAV FOR THE SELLER INTEREST, AS DETERMINED
PURSUANT TO THE PURCHASE AGREEMENT, AS OF THE PURCHASE DATE OR (II) THE AMOUNT
THAT WOULD HAVE BEEN RECEIVED WITH RESPECT TO THE SELLER INTEREST UPON A
DISSOLUTION AND LIQUIDATION OF THE PARTNERSHIP FOLLOWING A SALE OF ALL THE
ASSETS OF THE PARTNERSHIP AT THE FAIR MARKET VALUE (DETERMINED AS PROVIDED
HEREINBELOW) AND THE APPLICATION AND DISTRIBUTION OF ALL PROCEEDS OF SUCH A SALE
UPON SUCH DISSOLUTION AND LIQUIDATION IN ACCORDANCE WITH THE PARTNERSHIP
AGREEMENT.  FOR THIS PURPOSE, “FAIR MARKET VALUE” IS THE AMOUNT THAT WOULD BE
ESTABLISHED BY A WILLING BUYER AND A WILLING SELLER, OPERATING AT ARMS-LENGTH IN
AN OPEN AND UNRESTRICTED MARKET, WHERE THE BUYER WAS UNDER NO COMPULSION TO BUY
AND THE SELLER WAS UNDER NO COMPULSION TO SELL AND BOTH PARTIES WERE REASONABLY
KNOWLEDGEABLE OF THE RELEVANT FACTS (THE “FAIR MARKET VALUE”), AND SHALL BE
DETERMINED AS FOLLOWS:

 

(A)   WITHIN TEN (10) BUSINESS DAYS AFTER THE DATE OF A BUYER ELECTION NOTICE,
THE SELLER SHALL NOTIFY THE BUYER IN WRITING OF THE SELLER’S DETERMINATION OF
THE THEN CURRENT FAIR MARKET VALUE OF THE SELLER INTEREST.

 

(B)   WITHIN FIVE (5) BUSINESS DAYS AFTER THE DATE OF SUCH NOTICE, THE BUYER
SHALL NOTIFY THE SELLER IN WRITING AS TO WHETHER THE BUYER ACCEPTS OR REJECTS
THE SELLER’S DETERMINATION OF FAIR MARKET VALUE.

 

(C)   IF THE BUYER AND THE SELLER ARE UNABLE TO AGREE UPON THE FAIR MARKET VALUE
WITH RESPECT TO SUCH SELLER INTEREST, THE FAIR MARKET VALUE OF SUCH SELLER
INTEREST SHALL BE DETERMINED BY A NATIONALLY RECOGNIZED APPRAISER SELECTED BY
THE BUYER AND REASONABLY ACCEPTABLE TO THE SELLER (THE “APPRAISER”).

 

2

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(D)   THE FAIR MARKET VALUE ESTABLISHED BY THE APPRAISER WITH RESPECT TO SUCH
SELLER INTEREST SHALL BE BINDING UPON BOTH THE BUYER AND THE SELLER.

 

D.            CLOSING OF PURCHASE OPTION.  THE CLOSING OF THE PURCHASE OPTION
(THE “PURCHASE OPTION CLOSING”) WITH RESPECT TO THE SELLER INTEREST SHALL TAKE
PLACE AT 10:00 A.M. NEW YORK TIME AT THE OFFICES OF GIBSON, DUNN & CRUTCHER LLP,
200 PARK AVENUE, NEW YORK, NEW YORK 10166 ON THE PURCHASE DATE OR SUCH OTHER
DATE AS THE BUYER AND THE APPLICABLE SELLERS SHALL MUTUALLY AGREE.  ON THE
PURCHASE DATE, THE BUYER SHALL DELIVER TO THE SELLER, THE PURCHASE PRICE WITH
RESPECT TO THE SELLER INTEREST, IN CASH, AND THE SELLER SHALL DELIVER TO THE
BUYER AN ASSIGNMENT OF THE SELLER INTEREST, FREE OF ANY LIENS OR ENCUMBRANCES
(OTHER THAN (I) PORTFOLIO ASSET PERMITTED ENCUMBRANCES, DETERMINED AS THOUGH THE
SELLER INTEREST WERE A PORTFOLIO ASSET, (II) RESTRICTIONS IMPOSED BY THE
PARTNERSHIP AGREEMENT OR THE CALIFORNIA UNIFORM PARTNERSHIP ACT OF 1994, AS
AMENDED, AND (III) RESTRICTIONS IMPOSED BY APPLICABLE SECURITIES LAW), TOGETHER
WITH SUCH POWERS, TRANSFER TAX STAMPS, ASSIGNMENT AGREEMENTS AND OTHER
DOCUMENTATION AND CERTIFICATES REASONABLY REQUIRED BY THE BUYER TO EFFECT THE
TRANSFER OF ALL OF THE SELLER’S RIGHT, TITLE AND INTEREST IN, TO AND UNDER THE
SELLER INTEREST.  IN ADDITION, (I) THE SELLER SHALL DELIVER TO THE BUYER THE
CERTIFICATE OF A DULY AUTHORIZED OFFICER OF THE SELLER, CERTIFYING THAT THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 2.2(A) ARE TRUE AND CORRECT
AS OF THE PURCHASE DATE, AND (II) THE BUYER AND THE SELLER SHALL EXECUTE AND
DELIVER SUCH DOCUMENTS AND INSTRUMENTS TO EACH OTHER, AND TO SUCH OTHER PERSONS,
AS ARE REQUIRED UNDER THE PARTNERSHIP AGREEMENT AND OTHERWISE REASONABLY
REQUIRED UNDER APPLICABLE LAW IN ORDER TO CONSUMMATE THE ASSIGNMENT, SALE,
PURCHASE, AND DELIVERY OF THE SELLER INTEREST TO THE BUYER ON THE PURCHASE DATE.

 

E.             RELATIONSHIP TO UNWIND RIGHTS.  IF BUYER ELECTS TO CAUSE AN
UNWIND OF EQUITABLE ASSIGNMENT AS TO AN EQUITABLE ASSIGNMENT OF THE RELATED
ASSET PURSUANT TO SECTION 5.2(D)(IV) OF THE PURCHASE AGREEMENT AND THE PURCHASE
OPTION WITH RESPECT TO THE SELLER INTEREST SHALL NOT HAVE BEEN EXERCISED AT THE
TIME BUYER SO ELECTS TO CAUSE SUCH UNWIND OF EQUITABLE ASSIGNMENT, THEN THE
PURCHASE OPTION SHALL BE DEEMED TO BE NULL AND VOID WHEN BUYER SO ELECTS TO
CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO THE RELATED ASSET.  THE RIGHT OF
BUYER TO ELECT TO CAUSE AN UNWIND OF EQUITABLE ASSIGNMENT AS TO AN EQUITABLE
ASSIGNMENT OF THE RELATED ASSET PURSUANT TO SECTION 5.2(D)(IV) OF THE PURCHASE
AGREEMENT SHALL BE DEEMED TO HAVE TERMINATED AND BE NULL AND VOID UPON ANY
EXERCISE OF THE PURCHASE OPTION.

 

V.                  REPRESENTATIONS AND WARRANTIES; COVENANTS

 

3.15         REPRESENTATIONS AND WARRANTIES OF THE BUYER.  THE BUYER REPRESENTS
AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(A)   IT IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE DELAWARE WITH ALL REQUISITE POWER AND AUTHORITY TO OWN,
LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS BUSINESS AS NOW BEING
CONDUCTED;

 

(B)   IT IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN CORPORATION
AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY OWNED OR
LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO QUALIFIED
(EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL ADVERSE EFFECT
ON THE ABILITY OF THE BUYER TO PERFORM ITS OBLIGATIONS HEREUNDER);

 

3

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(C)   (I) IT HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO EXECUTE
AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND DELIVERY
BY THE BUYER OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF DIRECTORS OF THE
BUYER, (III) NO OTHER ACTION ON THE PART OF THE BUYER OR ANY OTHER PERSON OR
ENTITY, WHETHER PURSUANT TO THE ORGANIZATIONAL DOCUMENTS OF THE BUYER OR BY LAW
OR OTHERWISE, ARE NECESSARY TO AUTHORIZE THE BUYER TO ENTER INTO THIS AGREEMENT
OR TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS
BEEN DULY EXECUTED AND DELIVERED BY THE BUYER AND (V) THIS AGREEMENT IS THE
LEGAL, VALID AND BINDING OBLIGATION OF THE BUYER, ENFORCEABLE AGAINST THE BUYER
IN ACCORDANCE WITH ITS TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED
BY LAWS PERTAINING TO BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’
RIGHTS AND BY THE AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND
OTHER EQUITABLE REMEDIES); AND

 

(D)   NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE BUYER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE BUYER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE BUYER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE BUYER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOCATE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE BUYER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE BUYER TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

A.            REPRESENTATIONS AND WARRANTIES OF THE SELLER.  THE SELLER
REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF:

 

(E)   THE SELLER (I) IS THE DIRECT OWNER, BENEFICIALLY AND OF RECORD, OF THE
SELLER INTEREST AND (II) HAS NOT MADE ANY ASSIGNMENT, PLEDGE, HYPOTHECATION OR
TRANSFER OF, AND HAS NOT CREATED, OR PERMITTED TO EXIST, ANY SECURITY INTEREST
IN OR OTHER ENCUMBRANCE ON, THE SELLER INTEREST;

 

(F)    TO THE KNOWLEDGE OF THE SELLER, THE SELLER INTEREST HAS BEEN DULY
AUTHORIZED AND VALIDLY ISSUED;

 

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(G)   THE SELLER IS A CORPORATION, DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD
STANDING UNDER THE LAWS OF THE STATE OF DELAWARE WITH ALL REQUISITE CORPORATE
POWER AND AUTHORITY TO OWN, LEASE AND OPERATE ITS PROPERTIES AND TO CARRY ON ITS
BUSINESS AS NOW BEING CONDUCTED;

 

(H)   THE SELLER IS DULY LICENSED OR QUALIFIED TO DO BUSINESS AS A FOREIGN
CORPORATION AND IS IN GOOD STANDING IN ALL JURISDICTIONS IN WHICH THE PROPERTY
OWNED OR LEASED BY IT OR THE ACTIVITIES CONDUCTED BY IT REQUIRES IT TO BE SO
QUALIFIED (EXCEPT WHERE THE FAILURE TO SO QUALIFY WOULD NOT HAVE A MATERIAL
ADVERSE EFFECT ON THE ABILITY OF THE SELLER TO PERFORM ITS OBLIGATIONS
HEREUNDER);

 

(I)    (I) THE SELLER HAS THE NECESSARY AND APPROPRIATE POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO CARRY OUT ITS OBLIGATIONS HEREUNDER
AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY, (II) THE EXECUTION AND
DELIVERY BY THE SELLER OF THIS AGREEMENT AND THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AUTHORIZED BY THE BOARD OF
DIRECTORS OF THE SELLER, (III) NO OTHER CORPORATE ACTION ON THE PART OF THE
SELLER OR ANY OTHER PERSON OR ENTITY, WHETHER PURSUANT TO THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR BY LAW OR OTHERWISE, ARE NECESSARY TO
AUTHORIZE THE SELLER TO ENTER INTO THIS AGREEMENT OR TO CONSUMMATE THE
TRANSACTIONS CONTEMPLATED HEREBY, (IV) THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED BY THE SELLER AND (V) THIS AGREEMENT IS THE LEGAL, VALID AND BINDING
OBLIGATION OF THE SELLER, ENFORCEABLE AGAINST THE SELLER IN ACCORDANCE WITH ITS
TERMS (EXCEPT TO THE EXTENT THAT ENFORCEMENT IS AFFECTED BY LAWS PERTAINING TO
BANKRUPTCY, REORGANIZATION, INSOLVENCY AND CREDITORS’ RIGHTS AND BY THE
AVAILABILITY OF INJUNCTIVE RELIEF, SPECIFIC PERFORMANCE AND OTHER EQUITABLE
REMEDIES); AND

 

(J)    NEITHER THE EXECUTION, DELIVERY OF THIS AGREEMENT NOR THE CONSUMMATION OF
THE TRANSACTIONS CONTEMPLATED HEREBY (I) REQUIRES ANY FILING OR REGISTRATION
WITH, NOTIFICATION TO, PERMISSION OF OR ANY ACTION OR ORDER BY ANY GOVERNMENTAL
OR REGULATORY AUTHORITY WITH RESPECT TO THE SELLER EXCEPT ANY SUCH FILING,
REGISTRATION, NOTIFICATION OR PERMISSION THAT HAS BEEN OR WILL BE OBTAINED AT
THE TIME OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, (II) (A)
VIOLATES OR WILL VIOLATE ANY ORDER, WRIT, INJUNCTION, JUDGMENT, DECREES OR AWARD
OR (B) TO THE KNOWLEDGE OF THE SELLER, VIOLATES OR WILL VIOLATE OR CONFLICT WITH
ANY LAW, IN EITHER CASE, OF ANY GOVERNMENTAL OR REGULATORY AUTHORITY TO WHICH
THE SELLER OR ANY OF ITS PROPERTIES OR ITS BUSINESSES ARE SUBJECT AS OF THE DATE
HEREOF, (III) VIOLATES OR WILL VIOLATE, OR CONFLICTS WITH OR WILL CONFLICT WITH
ANY PROVISION OF, OR CONSTITUTES A DEFAULT UNDER, THE CERTIFICATE OF
INCORPORATION OR BYLAWS OF THE SELLER OR (IV)(A) CONFLICTS WITH, VIOLATES,
BREACHES OR CONSTITUTES A MATERIAL DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR
LAPSE OF TIME OR BOTH, WOULD CONSTITUTE A MATERIAL DEFAULT) UNDER, REQUIRES ANY
CONSENT UNDER, OR GIVES RISE TO A RIGHT TO TERMINATE, AMEND, ACCELERATE,
SUSPEND, REVOKE OR CANCEL ANY MORTGAGE, CONTRACT, AGREEMENT, DEED OF TRUST,
LICENSE, LEASE OR OTHER INSTRUMENT, ARRANGEMENT, COMMITMENT, OBLIGATION,
UNDERSTANDING OR RESTRICTION OF ANY KIND TO WHICH THE SELLER IS A PARTY OR BY
WHICH ITS PROPERTIES MAY BE BOUND OR (B) WILL CAUSE, OR GIVE ANY PERSON GROUNDS
TO CAUSE, AN ACCELERATION (WITH NOTICE OR LAPSE OF TIME OR BOTH) OF THE MATURITY
OF, OR WILL INCREASE, ANY LIABILITY OR OBLIGATION OF SUCH PARTY AND IN THE CASE
OF EITHER CLAUSE (IV)(A) OR (IV)(B) ABOVE, WHICH CONFLICT, VIOLATION, BREACH,
DEFAULT, LIABILITY OR OBLIGATION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR WOULD
HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF THE SELLER PARTY TO PERFORM ITS
OBLIGATIONS HEREUNDER.

 

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B.            RESTRICTION ON TRANSFER.  UNTIL AFTER EXPIRATION OF THE BUYER
ELECTION PERIOD (DETERMINED WITHOUT REGARD TO ANY EXTENSION THEREOF), SELLER
SHALL NOT MAKE ANY SALE OR EXCHANGE (WITHIN THE MEANING OF SECTION 708(B)(1)(B)
OF THE CODE) OF THE SELLER INTEREST OR ANY INTEREST THEREIN.

 

C.            CONSENTS.  THE SELLER AGREES THAT TO THE EXTENT THAT THE CONSENTS
OF ANY THIRD PARTIES ARE REQUIRED PRIOR TO THE TRANSFER BY THE SELLER OF THE
SELLER INTEREST, THE SELLER WILL OBTAIN SUCH CONSENT ON OR PRIOR TO THE PURCHASE
DATE; PROVIDED, THE SOLE CONSEQUENCES UNDER THIS AGREEMENT OF THE FAILURE OF
SELLER SO TO OBTAIN SUCH CONSENTS SHALL BE (I) THE ADJUSTMENT IN CALCULATION OF
WHEN THE PURCHASE DATE FALLS PURSUANT TO SECTION 1.3 OF THIS AGREEMENT AND THE
CORRESPONDING EXTENSION OF THE BUYER EXERCISE PERIOD AS DEFINED IN
SECTION 1.2(A) OF THIS AGREEMENT, AND (II) THE APPLICATION  (TO THE EXTENT
RELEVANT UNDER THE CIRCUMSTANCES) OF THE PROVISIONS OF THE LAST SENTENCE OF
SECTION 1.2(C) OF THIS AGREEMENT AND SECTION 1.6 OF THIS AGREEMENT.

 

VI.                                                                                
MISCELLANEOUS.

 

A.            CONFIDENTIALITY.  THE TERMS OF SECTION 5.5 OF THE PURCHASE
AGREEMENT AND THE TERMS OF THE CONFIDENTIALITY AGREEMENT (INCLUDING THE
EXCLUSION, EXCEPT FOR ITEMS PROTECTED FROM DISCLOSURE BY THE ATTORNEY-CLIENT
PRIVILEGE OR WORK PRODUCT DOCTRINE, OF INFORMATION RELATING TO THE TAX STRUCTURE
OR TAX TREATMENT OF THE TRANSACTIONS CONTEMPLATED, BY THIS AGREEMENT) ARE HEREBY
INCORPORATED BY REFERENCE AND BOTH THE BUYER AND THE SELLER AGREE TO BE BOUND
THEREBY AS IF SUCH TERMS WERE SET FORTH HEREIN IN THEIR ENTIRETY.

 

B.            HEADINGS.  THE HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE OF
REFERENCE ONLY AND SHALL NOT CONTROL OR AFFECT THE MEANING OR CONSTRUCTION OF
ANY PROVISIONS HEREOF.

 

C.            ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
AND UNDERSTANDING OF THE PARTIES HERETO IN RESPECT OF THE SUBJECT MATTER HEREOF,
AND THERE ARE NO RESTRICTIONS, PROMISES, REPRESENTATIONS, WARRANTIES, COVENANTS,
OR UNDERTAKINGS WITH RESPECT TO THE SUBJECT MATTER HEREOF, OTHER THAN THOSE
EXPRESSLY SET FORTH OR REFERRED TO HEREIN.

 

D.            NOTICES. ANY NOTICE, REQUEST, INSTRUCTION OR OTHER DOCUMENT TO BE
GIVEN HEREUNDER BY ANY PARTY TO THE OTHER PARTIES SHALL BE IN WRITING AND SHALL
BE DEEMED GIVEN OR DELIVERED WHEN DELIVERED IN THE MANNER AND TO THE ADDRESS SET
FORTH IN SECTION 12.3 OF THE PURCHASE AGREEMENT OR TO SUCH OTHER PLACE AND WITH
SUCH OTHER COPIES AS EITHER PARTY MAY DESIGNATE AS TO ITSELF BY WRITTEN NOTICE
TO THE OTHERS.  ANY FAILURE BY ANY PARTY TO DELIVER COPIES OF ANY NOTICE SHALL
NOT, IN ITSELF, AFFECT THE VALIDITY OF SUCH NOTICE IF OTHERWISE PROPERLY MADE TO
THE OTHER PARTY.

 

E.             SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF THIS AGREEMENT SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE HEIRS, SUCCESSORS AND PERMITTED ASSIGNS.  EXCEPT AS PROVIDED IN THIS
SECTION 3.5, NEITHER SELLER NOR BUYER MAY ASSIGN ITS RIGHTS UNDER THIS
AGREEMENT.  EITHER SELLER (SUBJECT TO COMPLIANCE BY SELLER WITH SECTION 2.3) OR
BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO ONE OR MORE OF ITS

 

6

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AFFILIATES.  BUYER MAY, WITHOUT CONSENT, ASSIGN ITS RIGHTS HEREUNDER TO ANY
PURCHASER OF AN INTEREST IN THE PARTNERSHIP THAT THE BUYER OWNED AT ANY TIME
PRIOR TO THE PURCHASE DATE.

 

F.             SPECIFIC PERFORMANCE.  EACH OF THE PARTIES HERETO ACKNOWLEDGES
AND AGREES THAT IN THE EVENT OF ANY BREACH OF THIS AGREEMENT, THE NON-BREACHING
PARTY OR PARTIES WOULD BE IRREPARABLY HARMED AND COULD NOT BE MADE WHOLE BY
MONETARY DAMAGES.  IT IS ACCORDINGLY AGREED THAT THE PARTIES HERETO SHALL AND DO
HEREBY WAIVE THE DEFENSE IN ANY ACTION FOR SPECIFIC PERFORMANCE THAT A REMEDY AT
LAW WOULD BE ADEQUATE AND THAT THE PARTIES HERETO, IN ADDITION TO ANY OTHER
REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, SHALL BE ENTITLED TO
COMPEL SPECIFIC PERFORMANCE OF THIS AGREEMENT.

 

G.            AMENDMENTS.  THIS AGREEMENT MAY NOT BE AMENDED, MODIFIED OR
SUPPLEMENTED WITHOUT THE PRIOR WRITTEN CONSENT OF ALL THE PARTIES HERETO.

 

H.            COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.

 

I.              GOVERNING LAW.  THIS AGREEMENT AND ALL DISPUTES OR CONTROVERSIES
ARISING HEREUNDER OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (EXCLUDING PRINCIPLES OF CONFLICTS OF LAW THAT WOULD APPLY THE LAW OF
ANOTHER JURISDICTION).

 

J.             EXPENSES.  EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE PARTIES TO
THIS AGREEMENT SHALL BEAR THEIR RESPECTIVE EXPENSES INCURRED IN CONNECTION WITH
THE PREPARATION, EXECUTION AND PERFORMANCE OF THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION, ALL FEES AND
EXPENSES OF AGENTS, REPRESENTATIVES, COUNSEL AND ACCOUNTANTS.

 

(SIGNATURES ON FOLLOWING PAGE)

 

7

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

BCC EQUIPMENT LEASING CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

8

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Exhibit L

 

Data Tape Fields

 

Data File:

CFS Port Data Tape Incl 1.3 and 1.4 Sch. - 4.30.04 Sent 5.21.04.xls

 

 

 

 

 

 

 

 

 

 

Tab:

Entire Port excluding notes

FL

CSA

PmtFactor Templ. Navistar Float

Sec Dep

04-2004 Altered Cash Flows

04-2004 Notes Proj

04-2004 Altered Cash Flows

 

 

 

OL

 

 

 

 

 

 

 

 

 

FL-FA Short Case

 

 

 

 

 

 

 

 

 

OL-FA Short Case

 

 

 

 

 

 

 

 

 

FL FA Long Case

 

 

 

 

 

 

 

 

 

OL FA Long Case

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fields:

Schedule

LeaseSchedule

LeaseSchedule

Payment Factor Adjustment

ACCT NO

CustContSch

CustContSch

CustContSch

 

 

Customer

Customer

Customer

Original Payment Factor

CUSTOMER

CustNm

CustNm

CustNm

 

 

Start Date

Product

Product

IER

1ST DEP REC’D

LstInvIntCalcDetails

ExpDate

LstInvintCalcDetails

 

 

Term Date

Start Date

Start Date

OEC BCC’s Prorata Share

LEASE NO

AssetCost

FixFloat

AssetCost

 

 

Lease Term

Term Date

Term Date

BCC Portion

AMOUNT

dtProjEff

Spread

dtProjEff

 

 

Product

Trans Date

Trans Date

Treasury Index

 

cIntAmt

AllinRate

cIntAmt

 

 

Purchase Option

Pmt

Pmt

 

 

cPrinAmt

RecType

cPrinAmt

 

 

EQ Type

Book RV

Purchase Option

 

 

cTotalAmt

dtProjEff

cTotalAmt

 

 

Funding Amount

Purchase Option

NAV

 

 

EOM NAV

Interest

EOM NAV

 

 

NAV

Adj NAV

Adj NAV

 

 

430 NAV

Principal

430 NAV

 

 

Adj NAV

NAV

Adv/Arr

 

 

Adj Interest

430 NAV

Adj Interest

 

 

Book RV

Adv/Arr

Non-Earning

 

 

Adjust Princ

430 Adj NAV

Adjust Princ

 

 

 

 

 

 

 

 

 

 

 

 

EBO Date

Non-Earning

Past Due Amount

 

 

Adj Tot Pmt

Index

Adj Tot Pmt

 

 

EBO Amount

Past Due Amount

Special Credits Comment

 

 

 

 

 

 

 

Restructure and partnership Comments

Tax Life

 

 

 

 

 

 

 

 

NOTE

Tax Depr

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data File:

Adjusted Work Out 5.22.04.xls

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tab:

Souhtern Bulk CSA Revised CF

Federal Mogul Revised CF

SKY King Revised CF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fields:

LeaseSchedule

LeaseSchedule

LeaseSchedule

 

 

 

 

 

 

 

Customer

Customer

Customer

 

 

 

 

 

 

 

Product

Product

4/30/04 NAV

 

 

 

 

 

 

 

Start Date

Start Date

PMT (columns F to CH for rows 3 to 11)

 

 

 

 

 

 

 

Term Date

Term Date

 

 

 

 

 

 

 

 

Trans Date

Trans Date

 

 

 

 

 

 

 

 

Pmt

Pmt

 

 

 

 

 

 

 

 

Purchase Option

Book RV

 

 

 

 

 

 

 

 

NAV

Purchase Option

 

 

 

 

 

 

 

 

Adv/Arr

Adj NAV

 

 

 

 

 

 

 

 

Non-Earning

NAV

 

 

 

 

 

 

 

 

Past Due Amount

Adv/Arr

 

 

 

 

 

 

 

 

Special Credits Comment

Non-Earning

 

 

 

 

 

 

 

 

 

Past Due Amount

 

 

 

 

 

 

 

 

 

Tax Life

 

 

 

 

 

 

 

 

 

Tax Depr

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

ADDENDUM TO EXHIBIT L

 

PORTFOLIO INFORMATION EXCEPTIONS/LIMITATIONS

 

A.                                   Sellers make no representation or warranty
with respect to the following Portfolio Information reflected on the data tape
file named “CFS Port Data Tape Incl 1.3 and 1.4 Sch. – 4.30.04 sent 5.21.04.xls”
(identified by Tab and/or Column reference):

 

Tab:  CSA*

 

The cash flows for Neuvant are being rebooked in May via restructure and will be
depicted as described in footnote on tab:  Entire Port. Excl Notes.  IERs are
0032566-101-107 payment column H.  IER 0034541-001.  (Southern Bulk) data is
superseded by data file “Adjusted Workout 5.22.04.xls”

 

Tab:  FL FA Long Case

 

Cash flows which reflect follow on long case rents subject to float

IER 0041018-001 row 6788 to 6848

IER 0041018-002 row 6910 to 6970

IER 0041029-001 row 7032 to 7092

IER 0041029-002 row 7154 to 7214

IER 0041030-001 row 7276 to 7336

All numbers in payment column H

 

Tab:  Sky King Revised CF*

 

Superseded by file “Adjusted Workout 5.22.04.xls”.  The assumptions regarding
cash flows at such Tab have been based on the applicable obligor(s) making
non-contractual payments or exercising purchase and/or options.  No assurance
can be made that such payments will be made or made in the time frame indicated
or that such options will be exercised

 

Tab:  Federal Mogul Revised CF*

 

Superseded by file “Adjusted Workout 5.22.04.xls”

 

Tab:  04-2004 Altered Cash Flows*

 

All cash flows shown in Columns L, M, and N are estimates.  The assumptions
regarding cash flows at such Tab have been based on the applicable obligors
making non-contractual payments or exercising purchase and/or options.  No
assurance can be made that such payments will be made or made in the time frame
indicated or that such options will be exercised

 

1

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Tab:  PmtFactor Templ. Navistar Float

 

Treasury yield depicted in row 3, column B

 

Tab:  Sec Dep

 

Data Tape not updated.  Updated deposits shown in Schedule 3.2 (g)(ii) to the
Purchase and Sale Agreement dated May 24, 2004 (the “P&SA”)

 

Tab: 1.3 Nav @ 4-30

 

Data Tape not updated.  Updated in Schedule 1.3 attached to P&SA

 

Tab: 1.4 Allocation

 

Data Tape not updated.  Updated in Schedule 1.4 attached to P&SA

 

 

B.                                     Sellers make no representation or
warranty with respect to the following Portfolio Information reflected on the
data tape file named “Adjusted Workout 5.22.04.xls” (identified by Tab and/or
Column reference):

 

Tab:  Federal Mogul Revised CF*

 

Unsigned restructure.  No representation (other than with respect to the
assumptions to the extent described below in footnote *) regarding cash flows as
Federal Mogul has not signed restructured agreement.  Payments shown in Column
I.  The adjusted NAV supercedes the adjusted NAV in “CFS Port Data Tape Incl.
1.3 and 1.4 Sch. – 4.30.04 sent 5.21.04.xls” by $2.9 million write-down which is
depicted in Column AO

 

Tab:  Sky King Revised CF*

 

Cash flows after 12/05 located in columns Z through CG

 

Tab:  Southern Bulk Revised CSA CF*

 

Cash flows in Column H

 

C.                                     Sellers make no representation or
warranty with respect to the expected payment date or collectability of past due
amounts referenced (and to the extent specifically set forth) in the Data Tape

 

 

--------------------------------------------------------------------------------

*  Sellers represent that the assumptions used in deriving this information are
reasonable under the applicable circumstances and are consistent with Sellers’
historical practices in the ordinary course of business

 

2

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